8-K

UNITED STATESSECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):October 31, 2014

EXELIS INC.
(Exact name of registrant as specified in its charter)

Indiana	001-35228	45-2083813
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

1650 Tysons Boulevard, Suite 1700 McLean, Virginia	22102
(Address of principal executive offices)	(Zip Code)

(703) 790-6300
(Registrant’s telephone number, including area code)

NOT APPLICABLE
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

⃞ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

⃞ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

⃞ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

⃞ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

ITEM 2.02 Results of Operations and Financial Condition	3
ITEM 7.01 Regulation FD Disclosure	3
ITEM 9.01 Financial Statements and Exhibits	4
SIGNATURE	5

ITEM 2.02   Results of Operations and Financial Condition.

Attached hereto as Exhibit 99.1 and incorporated by reference herein is a press release issued by Exelis Inc. (the “Company”) on October 31, 2014 that includes financial information for the Company for the third quarter of 2014, and updated fiscal 2014 guidance.  This information shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) or incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

ITEM 7.01 Regulation FD Disclosure.

Mr. David Melcher, Chief Executive Officer and President, and Mr. Peter Milligan, Senior Vice President and Chief Financial Officer, will present financial information for the Company for the third quarter of 2014, and updated fiscal 2014 guidance on October 31, 2014.  A copy of the presentation is attached hereto and incorporated by reference herein as Exhibit 99.2.  This information is furnished pursuant to Item 7.01 Regulation FD Disclosure and shall not be deemed filed for purposes of Section 18 of the Exchange Act or incorporated by reference into any filing under the Securities Act or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.   

ITEM 9.01     Financial Statements and Exhibits

(d) Exhibits.

Exhibit
No.	Description
99.1	Press Release of Exelis Inc. dated October 31, 2014
99.2	Presentation slides issued by Exelis Inc. on October 31, 2014

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		EXELIS INC.
Date:	October 31, 2014	By:	/s/ Kathleen S. Stolar
			Kathleen S. Stolar
		Its:	Assistant Secretary
			(Authorized Officer of Registrant)

EX-99.1

Exhibit 99.1

Exelis reports third-quarter 2014 financial results; revises full-year guidance

• $1.5 billion in funded orders in the quarter and funded backlog increase of 15 percent over the second quarter of 2014
• C4ISR segment revenue increases year-over-year for second consecutive quarter
• 2014 full-year guidance revised to reflect successful spin-off of Vectrus

MCLEAN, Va.--(BUSINESS WIRE)--October 31, 2014--Exelis (NYSE: XLS) reported financial results for the third quarter of 2014. Third-quarter revenue was $1.1 billion, a six percent decrease from the third quarter of 2013, and third-quarter earnings were $52 million, or $0.27 per diluted share, a 34 percent decrease from the third quarter of 2013. Adjusted earnings, which exclude costs related to the spin-off of Vectrus, were $0.32 per share, a 22 percent decrease from the same period in 2013. Exelis generated $39 million in free cash flow during the quarter.

The company earned $1.5 billion in funded orders during the third quarter of 2014, including new business in its strategic growth platforms. Key announcements during the quarter included:

• Completion of the spin-off of the former Mission Systems business into Vectrus, a separate, publicly traded government services provider;
• A contract to provide advanced military air traffic management capabilities to the Saudi Arabian National Guard;
• An award from the U.S. Army for Generation 3 night vision equipment;
• A follow-on contract from Lockheed Martin for composite missile bodies and structures for the Joint Air-to-Surface Standoff Missile;
• Acquisition of Barco Orthogon, based in Bremen, Germany, which provides applications for air traffic flow management and decision-making to airport operators and air navigation service providers around the world.

“We are encouraged by the developing trend of revenue growth in our C4ISR segment and continue to earn new business in each of our strategic growth platforms, as well as from targeted international and commercial customers,” said Exelis CEO and President David F. Melcher. “Successful completion of the Vectrus spinoff was also a major milestone for us in the third quarter and positions both companies for success in the future.”

Segment Results

C4ISR Electronics and Systems

C4ISR Electronics and Systems third-quarter 2014 revenue was $503 million, up 1 percent from the same period in 2013 due to higher revenue on airborne and shipboard electronic warfare products, partially offset by lower revenue from domestic radios. Segment adjusted operating income for the quarter was $64 million, a decrease of 7 percent from the third quarter of 2013.

Information and Technical Services

Information and Technical Services third-quarter 2014 revenue was $565 million, a decrease of 12 percent from the same period in 2013, driven by lower customer activity in several U.S. government programs in Afghanistan. Third-quarter adjusted operating income for the segment was $47 million, down 27 percent from the same period in 2013, primarily due to lower revenue.

2014 Guidance

Sales	≈$3.25 billion
Adjusted Operating Margin	≈12.5%
Adjusted Earnings Per Share	≈$1.22
Free Cash Flow	≈$140 million

Exelis is adjusting its 2014 financial guidance to account for the spin-off of Vectrus, which was completed on September 27, 2014. Financial guidance includes approximately $15 million of projected restructuring expense and excludes approximately $25 million of expenses related to the spin-off of Vectrus. The company notes that forward-looking statements of future performance made in this release are based upon current expectations and are subject to factors that could cause actual results to differ materially from those suggested here, including those factors set forth in the Safe Harbor Statement below.

Investor Call Today

Exelis senior management will host a conference call for investors today at 10 a.m. EDT to review third-quarter 2014 results and guidance, and answer questions. The briefing can be monitored live via webcast at the following address on the company's website: http://investors.exelisinc.com.

About Exelis

Exelis is a diversified, global, aerospace, defense and information solutions company that leverages a 50-year legacy of deep customer knowledge and technical expertise to deliver affordable, mission-critical solutions for global customers. We are a leader in positioning and navigation, sensors, air traffic management solutions, image processing and distribution, communications and information systems, and focused on strategic growth in the areas of critical networks, ISR and analytics, electronic warfare and composite aerostructures. Headquartered in McLean, Va., Exelis employs approximately 10,000 people and generated 2013 sales of $4.8 billion. For more information, visit our website at www.exelisinc.com or connect with us on Facebook, Twitter, LinkedIn and YouTube.

Safe Harbor Statement

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Some of the information included herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. Whenever used, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “may,” “could,” “outlook” and other terms of similar meaning are intended to identify such forward-looking statements. Forward-looking statements are uncertain and to some extent unpredictable, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in, or implied from, such forward-looking statements. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the company’s historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to:

• Our dependence on the defense industry and the business risks peculiar to that industry, including changing priorities or reductions in the U.S. government or international defense budgets;
• Government regulations and compliance therewith, including changes to the Department of Defense procurement process;
• Our international operations, including sales to foreign customers;
• Competition, industry capacity and production rates;
• Misconduct of our employees, subcontractors, agents and business partners;
• The level of returns on postretirement benefit plan assets and potential employee benefit plan contributions and other employment and pension matters;
• Changes in interest rates and other factors that affect earnings and cash flows;
• The mix of our contracts and programs, our performance, and our ability to control costs;
• Governmental investigations;
• Our level of indebtedness and our ability to make payments on or service our indebtedness;
• Subcontractor performance;
• Economic and capital markets conditions;
• The availability and pricing of raw materials and components;
• Ability to retain and recruit qualified personnel;
• Protection of intellectual property rights;
• Changes in technology;
• Contingencies related to actual or alleged environmental contamination, claims and concerns;
• Security breaches and other disruptions to our information technology and operations;
• Our ability to execute our internal performance plans including restructuring, productivity improvements and cost reduction initiatives;
• Unanticipated changes in our tax provisions or exposure to additional income tax liabilities; and
• Ability to execute our internal performance plans, including restructuring, productivity and cost-reduction initiatives.

The forward-looking statements in this release are made as of the date hereof and the company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the company’s historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in the Exelis Inc. Form 10-K for the fiscal year ended December 31, 2013, and those described from time to time in our future reports filed with the Securities and Exchange Commission.

Exelis Inc.
Consolidated Statements of Operations
(unaudited)
(IN MILLIONS, EXCEPT PER SHARE AMOUNTS)	Three Months Ended September 30,				Nine Months Ended September 30,
	2014		2013		2014		2013
Product revenue	$	503	$	498	$	1,506	$	1,515
Service revenue		565		643		1,724		2,062
Total revenue		1,068		1,141		3,230		3,577
Cost of product revenue		356		354		1,088		1,091
Cost of service revenue		477		537		1,456		1,708
Selling, general and administrative expenses		117		100		344		337
Research and development expenses		18		11		43		39
Restructuring and asset impairment charges		4		6		11		68
Operating income		96		133		288		334
Interest expense, net		9		10		27		28
Other (income) expense, net		(1)		3		(5)		2
Income from continuing operations before income tax expense		88		120		266		304
Income tax expense		36		40		101		102
Net income	$	52	$	80	$	165	$	202
Earnings Per Share
Basic
Net income	$	0.28	$	0.42	$	0.87	$	1.07
Diluted
Net income	$	0.27	$	0.41	$	0.85	$	1.06
Weighted average common shares outstanding – basic		188.4		188.5		189.0		188.3
Weighted average common shares outstanding – diluted		193.2		192.8		193.9		191.0
Cash dividends declared per common share	$	0.10	$	0.10	$	0.31	$	0.31

Exelis Inc.
Consolidated Balance Sheets
(unaudited)
(IN MILLIONS)		September 30,			December 31,
		2014			2013
Assets
Current assets
Cash and cash equivalents	$	524		$	469
Receivables, net		939			939
Inventories, net		258			246
Deferred tax asset		44			16
Other current assets		42			70
Total current assets		1,807			1,740
Plant, property and equipment, net		452			498
Goodwill		2,195			2,184
Other intangible assets, net		157			167
Deferred tax asset		186			216
Other non-current assets		120			79
Total non-current assets		3,110			3,144
Total assets	$	4,917		$	4,884
Liabilities and Shareholders' Equity
Current liabilities
Accounts payable	$	311		$	367
Advance payments and billings in excess of costs		266			301
Compensation and other employee benefits		183			216
Other accrued liabilities		173			160
Total current liabilities		933			1,044
Defined benefit plans		1,259			1,407
Long-term debt		778			649
Deferred tax liability		3			2
Other non-current liabilities		155			130
Total non-current liabilities		2,195			2,188
Total liabilities		3,128			3,232
Commitments and contingencies
Shareholders' equity
Common stock		2			2
Additional paid-in capital		2,660			2,623
Treasury stock		(69	)		(16	)
Retained earnings		580			475
Accumulated other comprehensive loss		(1,384	)		(1,432	)
Total shareholders' equity		1,789			1,652
Total liabilities and shareholders' equity	$	4,917		$	4,884

Exelis Inc.
Consolidated Statements of Cash Flows
(unaudited)
(IN MILLIONS)	Nine Months Ended September 30,
	2014		2013
Operating activities
Net income	$	165	$	202
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		88		85
Stock-based compensation		21		25
Restructuring and asset impairment charges		11		68
Payments for restructuring		(23)		(42)
Defined benefit plans expense		48		69
Defined benefit plans payments		(134)		(136)
Change in assets and liabilities
Change in receivables		1		(22)
Change in inventories		(10)		(4)
Change in other assets		9		(5)
Change in accounts payable		(56)		(93)
Change in advance payments and billings in excess of costs		(35)		13
Change in deferred taxes		(14)		31
Change in other liabilities		2		(73)
Other, net		(2)		—
Net cash provided by operating activities		71		118
Investing activities
Capital expenditures		(37)		(57)
Proceeds from the sale of assets		4		9
Acquisitions, net of cash acquired		(22)		(16)
Other, net		(1)		—
Net cash used in investing activities		(56)		(64)
Financing activities
Proceeds from issuance of debt		140		—
Payment of debt issuance costs		(4)		—
Dividends paid		(60)		(39)
Common stock repurchased		(53)		(5)
Proceeds from exercise of stock options		17		11
Other, net		2		(2)
Net cash provided by (used in) financing activities		42		(35)
Exchange rate effects on cash and cash equivalents		(2)		(2)
Net change in cash and cash equivalents		55		17
Cash and cash equivalents – beginning of year		469		292
Cash and cash equivalents – end of period	$	524	$	309

Key Performance Indicators and Non-GAAP Financial Measures

Management reviews key performance indicators including revenue, segment operating income and margins, orders growth, and backlog, among other metrics on a regular basis. In addition, we consider certain additional measures to be useful to management and investors evaluating our operating performance for the periods presented, and provide a tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions and debt repayment. These metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (GAAP) and should not be considered a substitute for revenue, operating income, income from continuing operations, or net cash from continuing operations as determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators:

“Adjusted net income” defined as net income, adjusted to exclude items that include, but are not limited to, significant charges or credits that impact current results, but are not related to our ongoing operations, unusual and infrequent non-operating items and non-operating tax settlements or adjustments.

“Segment adjusted operating income” defined as operating income of our two segments, adjusted to exclude items that include, but are not limited to, significant charges or credits that impact current results, but are not related to our ongoing operations, unusual and infrequent non-operating items and non-operating tax settlements or adjustments.

“Segment adjusted operating margin” defined as segment adjusted operating income as defined above, divided by revenue.

“Free cash flow” defined as GAAP cash provided by operating activities, less capital expenditures plus separation costs related to the spin-off of Mission Systems. This metric does not include dividend payments.

“Estimated adjusted net income excluding Vectrus” defined as adjusted net income as defined above adjusted to exclude estimated Vectrus results and give effect to spin-related estimated G&A/tax adjustments.

“Estimated adjusted operating income excluding Vectrus" defined as adjusted operating income as defined above adjusted to exclude estimated Vectrus results and give effect to spin-related estimated G&A/tax adjustments.

“Estimated adjusted operating margin excluding Vectrus" defined as estimated adjusted operating income as defined above adjusted to exclude estimated Vectrus results and give effect to spin-related estimated G&A/tax adjustments.

“Estimated adjusted free cash flow excluding Vectrus" defined as free cash flow as defined above adjusted to exclude estimated Vectrus results and give effect to spin-related estimated G&A/tax adjustments.

Exelis Inc.
Non-GAAP Financial Measures - Adjusted Net Income & Adjusted EPS
	Three Months Ended		Nine Months Ended
	September 30,		September 30,
($ million, except per share)	2014	2013	2014	2013
Net Income	52	80	165	202
Separation Costs for the Vectrus Spin-off, net of tax	9	-	19	-
Adjusted Net Income	61	80	184	202
Net Income per fully diluted share	$0.27	$0.41	$0.85	$1.06
Adjusted Net Income per fully diluted share	$0.32	$0.41	$0.95	$1.06
Weighted Average Shares Outstanding, Diluted	193.2	192.8	193.9	191.0

Exelis Inc.
Non-GAAP Financial Measures - Adjusted Segment Operating Income & Operating Margin
	Three Months Ended		Nine Months Ended
	September 30,		September 30,
($ million)	2014	2013	2014	2013
Sales	1,068	1,141	3,230	3,577
C4ISR	503	498	1,506	1,515
I&TS	565	643	1,724	2,062
Segment Operating Income, As Reported	96	133	288	334
C4ISR	59	69	162	128
I&TS	37	64	126	206
Separation Costs for the Vectrus Spin-off, pre tax	15	-	30	-
C4ISR	5	-	13	-
I&TS	10	-	17	-
Segment Operating Income, Adjusted	111	133	318	334
C4ISR	64	69	175	128
I&TS	47	64	143	206
Segment Operating Margin, As Reported
C4ISR	11.7%	13.9%	10.8%	8.4%
I&TS	6.5%	10.0%	7.3%	10.0%
Segment Operating Margin, Adjusted
C4ISR	12.7%	13.9%	11.6%	8.4%
I&TS	8.3%	10.0%	8.3%	10.0%
Operating Margin, As Reported	9.0%	11.7%	8.9%	9.3%
Operating Margin, Adjusted	10.4%	11.7%	9.8%	9.3%

Exelis Inc.
Free Cash Flow Year-to-Date
	Nine Months Ended	Nine Months Ended
	September 30,	September 30,
($ million)	2014	2013
Cash Flow From Operating Activities	71	118
Subtract:
Capital Expenditures	(37)	(57)
Free Cash Flow	34	61
Add:
Separation Costs for the Mission Systems Spin-off, net of tax	19	-
Free Cash Flow, as Adjusted	53	61

Exelis Inc.
Free Cash Flow Quarter-to-Date
	Three Months Ended	Nine Months Ended	Six Months Ending
	September 30,	September 30,	June 30,
($ million)	2014	2014	2014
Cash Flow From Operating Activities	49	71	22
Subtract:
Capital Expenditures	(19)	(37)	(18)
Free Cash Flow	30	34	4
Add:
Separation Costs for the Mission Systems Spin-off, net of tax	9	19	10
Free Cash Flow, as Adjusted	39	53	14

Exelis Inc.
Non-GAAP Financial Measures - Adjusted Net Income & Adjusted EPS Excluding Vectrus Results
	Three Months Ended		Nine Months Ended
	September 30,		September 30,
($ million, except per share)	2014	2013	2014	2013
Reported Net Income	52	80	165	202
Subtract: Estimated Net Income, Vectrus Operations	2	24	22	84
Estimated Net Income, Stand-alone Exelis	50	56	143	118
Separation costs for the Vectrus spin-off, net of tax	9	-	19	-
Subtract: Separation costs, Vectrus Operations	8	-	15	-
Separation costs, Stand-alone Exelis	1	-	4	-
Adjusted Net Income	61	80	184	202
Subtract: Estimated Adjusted Net Income, Vectrus Operations	10	24	37	84
Estimated Adjusted Net Income, Stand-alone Exelis	51	56	147	118
Net Income per fully diluted share	0.27	0.41	0.85	1.06
Subtract: Estimated Net Income per fully diluted share, Vectrus Operations	0.01	0.13	0.11	0.44
Estimated Net Income per fully diluted share, Stand-alone Exelis	0.26	0.29	0.74	0.62
Adjusted Net Income per fully diluted share	0.32	0.41	0.95	1.06
Subtract: Estimated Adjusted net Income per fully diluted share, Vectrus Operations	0.06	0.13	0.19	0.44
Estimated Adjusted Net Income per fully diluted share, Stand-alone Exelis	0.26	0.29	0.76	0.62
Weighted Average Shares Outstanding, Diluted	193.2	192.8	193.9	191

Exelis Inc.
Non-GAAP Financial Measures - Adjusted Net Income & Adjusted EPS Excluding Vectrus Results
	Three Months Ended							Three Months Ended
	September 30, 2014							September 30, 2013
			Estimated		Separation Costs	Estimated				Estimated		Separation Costs	Estimated
			Vectrus		Stand-alone	Stand-alone				Vectrus		Stand-alone	Stand-alone
($ million)	As Reported		Operations		Exelis	Exelis		As Reported		Operations		Exelis	Exelis
Orders	1,544		(686	)		858		1,969		(922	)		1,047
C4ISR	437					437		540					540
I&TS	1,107		(686	)		421		1,429		(922	)		507
Sales	1,068		(288	)		780		1,141		(346	)		795
C4ISR	503					503		498					498
I&TS	565		(288	)		277		643		(346	)		297
Operating Income	96		(2	)	2	96		133		(32	)		101
C4ISR	59				1	60		69		(2	)		67
I&TS	37		(2	)	1	36		64		(30	)		34
Operating Margin	9.0	%				12.3	%	11.7	%				12.7	%
C4ISR	11.7	%				11.9	%	13.9	%				13.5	%
I&TS	6.5	%				13.0	%	10.0	%				11.4	%
Cash Flow from Operating Activities	49		(35	)	2	16		74		(12	)		62
Subtract: Capital Expenditures	(19	)	-			(19	)	(20	)	-			(20	)
Free Cash Flow	30		(35	)	2	(3	)	54		(12	)	-	42

CONTACT:
Exelis
Investors
Katy Herr, 703-790-6376
Katy.Herr@exelisinc.com
or
Media
B.J. Talley, 703-790-6349
William.Talley@exelisinc.com

EX-99.2

Exhibit 99.2

Third Quarter 2014 Earnings Presentation David Melcher Chief Executive Officer and President Peter Milligan Senior Vice President and Chief Financial Officer October 31, 2014

Safe Harbor Statement  Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 (the “Act”): Some of the information included herein includes forward-looking statements intended to qualify for the safe harbor from liability established by the Act. Whenever used, words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “may,” “could,” “outlook” and other terms of similar meaning are intended to identify such forward-looking statements.Forward-looking statements are uncertain and to some extent unpredictable, and involve known and unknown risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in, or implied from, such forward-looking statements. The company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. In addition, forwardlooking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the company’s historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to: The forward-looking statements in this presentation are made as of the date hereof and the company undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. In addition, forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from the company’s historical experience and our present expectations or projections. These risks and uncertainties include, but are not limited to, those described in the Exelis Inc. Form 10-K for the fiscal year ended December 31, 2013, and those described from time to time in our future reports filed with the Securities and Exchange Commission.Our dependence on the defense industry and the business risks peculiar to that industry, including changing priorities or reductions in the U.S. Government or international defense budgets; Government regulations and compliance therewith, including changes to the Department of Defense procurement process; Our international operations, including sales to foreign customers; Competition, industry capacity and production rates; Misconduct of our employees, subcontractors, agents and business partners; The level of returns on postretirement benefit plan assets and potential employee benefit plan contributions and other employment and pension matters; Changes in interest rates and other factors that affect earnings and cash flows; The mix of our contracts and programs, our performance, and our ability to control costs; Governmental investigations; Our level of indebtedness and our ability to make payments on or service our indebtedness; Subcontractor performance; Economic and capital markets conditions; The availability and pricing of raw materials and components; Ability to retain and recruit qualified personnel; Protection of intellectual property rights; Changes in technology; Contingencies related to actual or alleged environmental contamination,claims and concerns; Security breaches and other disruptions to our information technology andoperations; Unanticipated changes in our tax provisions or exposure to additionalincome tax liabilities; and Ability to execute our internal performance plans including restructuring, productivity improvements and cost reduction initiatives. 2

Q3 2014 Financial Results Q3 2014 Results Consolidated Ex. Vectrus(2) $ millions, except per share amounts 2014 vs. 2013(1) 2014 vs. 2013 Funded Orders $ 1,544 -22% $ 858 -18% Revenue $ 1,068 -6% $ 780 -2% Adj. Operating Income (3) $ 111 -17% $ 96 -28% Adj. Operating Margin (3) 10.4% -130 bps 12.3% +60 bps Adj. EPS (3) $ 0.32 -22% $ 0.26 -10% Year-to-Date Free Cash Flow (FCF) (4) $ 53 -$8 $ 3 +$15 (1) Third quarter 2013 results are as reported, including $6M of restructuring expense. (2) Excludes estimated Vectrus results and gives effect to spin-related estimated G&A/tax adjustments in Q3 2014 and Q3 2013. (3) 2014 adjusted operating income, operating margin and EPS excludes separation charges related to the Vectrus spin-off. (4) Free Cash Flow = Net Cash Provided by Operating Activities less Capital Expenditures plus separation costs related to the Vectrus spin-off. For Non-GAAP reconciliations, refer to appendix and www.exelisinc.com/investors 3 Total book-to-bill of 1.4x Ex-Vectrus book-to-bill 1.1x C4ISR sales growth International sales +21% year-to-dateSuccessful spin-off of Vectrus; Intense focus on Strategic Growth Platforms 3

Q3 2014 Backlog& Business Environment 4 Ex-Vectrus, funded backlog   3% Q/Q;  7% YTD Q3 strategic announcements Precision ground control approach radar to Saudi Arabian National Guard Follow-on contract to provide composite missile bodies and structures for the Joint Air-to- Surface Standoff Missile Generation 3 night vision equipment for the U.S. Army Cross-track Infrared Sounder (CrIS) Instrument for NASA Initial imagery from the Exelis-built super-spectral imaging system on the WorldView-3 satellite (1) Excludes estimated backlog amounts attributable to Vectrus in Q2 2014 and Q3 2014. $3.4 $3.9 $9.0 $8.9 $6.6 $6.7 $2.9 $3.0 (1) (1) 4

-160 bps Adjusted Operating Margin (2)(3) Higher IR&D -19% Funded Orders Military composites; Airborne EW FMS tactical radios; FMS ESM system +1% Revenue Domestic airborne EW; International ESM; TM-NVG Domestic tactical radios C4ISR Segment 5 Year-to-date book-to-bill 1.07x Q3 2014 Results Consolidated Ex. Vectrus(2) $ millions, except per share amounts 2014 vs. 2013(1) 2014 vs. 2013 Funded Orders $ 437 -19% $ 437 -19% Revenue $ 503 +1% $ 503 +1% Adj. Operating Income(2) $ 64 -7% $ 60 -10% Adj. Operating Margin (2) 12.7% -120 bps 11.9% -160 bps (1) Third quarter 2013 results are as reported, including $4M of restructuring expense in the C4ISR segment. (2) Excludes estimated Vectrus results and gives effect to spin-related estimated G&A/tax adjustments in Q3 2014 and Q3 2013. (3) 2014 adjusted operating income, operating margin and EPS excludes separation charges related to the spin-off of Vectrus. For Non-GAAP reconciliations, refer to appendix and www.exelisinc.com/investors 5

+160 bps Adjusted Operating Margin (2)(3) Productivity improvements-17% Funded Orders (2) Professional engineering services Space Ground and Range programs -7% Revenue (2) Network systems Classified programs I&TS Segment (1) Third quarter 2013 results are as reported, including $2M of restructuring expense in the I&TS segment. (2) Excludes estimated Vectrus results and gives effect to spin-related estimated G&A/tax adjustments in Q3 2014 and Q3 2013. (3) 2014 adjusted operating income, operating margin and EPS excludes separation charges related to the spin-off of Vectrus. For Non-GAAP reconciliations, refer to appendix and www.exelisinc.com/investors Ex-Vectrus Year-to-Date Book-to-Bill > 1.16x (3) 6 Q3 2014 Results Consolidated Ex. Vectrus(2) $ millions, except per share amounts 2014 vs. 2013(1) 2014 vs. 2013 Funded Orders $ 1,107 -23% $ 421 -17% Revenue $ 565 -12% $ 277 -7% Adj. Operating Income(3) $ 47 -27% $ 36 +6%Adj. Operating Margin (3) 8.3% -170 bps 13.0% +160bps 6

2014 Post-spin Guidance $1.44 – 1.50 (2) $1.22 (1)(2) $0.15 $0.07 7 (1) Excludes estimated Vectrus results and gives effect to spin-related estimated G&A/tax adjustments for 2014E. (2) 2014 Adjusted Operating Income/Margin/EPS excludes separation charges related to the Vectrus spin-off.(3) Free Cash Flow = Net Cash Provided by Operating Activities less Capital Expenditures plus separation costs related to the Vectrus spin-off.For Non-GAAP reconciliations, refer to appendix and www.exelisinc.com/investors2014E post-spin adjusted EPS ↑ 25%+ y/y2014 Guidance (1) Revenue ≈ $3,250 Adjusted Operating Margin(2) ≈ 12.5% Adjusted EPS(2) ≈ $1.22 Free Cash Flow(3) ≈ $140 Higher tax Lower CAS Key milestones and shipments 7

Appendix

Reconciliation of Non-GAAP Measures 9 Management reviews key performance indicators including revenue, segment operating income and margins, orders growth, and backlog, among other metrics on a regular basis. In addition, we consider certain additional measures to be useful to management and investors evaluating our operating performance for the periods presented, and provide a tool for evaluating our ongoing operations, liquidity and management of assets. This information can assist investors in assessing our financial performance and measures our ability to generate capital for deployment among competing strategic alternatives and initiatives, including, but not limited to, acquisitions and debt repayment. These metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (GAAP) and should not be considered a substitute for revenue, operating income, income from continuing operations, or net cash from continuing operations as determined in accordance with GAAP. We consider the following non-GAAP measures, which may not be comparable to similarly titled measures reported by other companies, to be key performance indicators: “Adjusted net income” defined as net income, adjusted to exclude items that include, but are not limited to, significant charges or credits that impact current results, but are not related to our ongoing operations, unusual and infrequent non-operating items and non-operating tax settlements or adjustments. A reconciliation of adjusted net income is provided below. ($ million, except per share) Q3 2014 Q3 2013 Q3 2014 YTD Q3 2013 YTD Net Income 52 80 165 202 Separation costs for the Vectrus spin-off, net of tax 9 - 19 - Adjusted Net Income 61 80 184 202 Net Income per fully diluted share $0.27 $0.41 $0.85 $1.06 Adjusted Net Income per fully diluted share $0.32 $0.41 $0.95 $1.06 Weighted Average Shares Outstanding, Diluted 193.2 192.8 193.9 191.0 9

Reconciliation of Non-GAAP Measures (cont.) 10 “adjusted operating income” defined as operating income of our two segments, adjusted to exclude items that include, but are not limited to, significant charges or credits that impact current results, but are not related to our ongoing operations, unusual and infrequent non-operating items and non-operating tax settlements or adjustments. A reconciliation of segment operating income is provided below. “segment adjusted operating margin” defined as segment adjusted operating income as defined above, divided by revenue. A reconciliation of segment operating margin is provided below. ($ million) Q3 2014 Q3 2013 Q3 2014 YTD Q3 2013 YTD Sales 1,068 1,141 3,230 3,577 C4ISR 503 498 1,506 1,515 I&TS 565 643 1,724 2,062 Segment Operating Income, As Reported 96 133 288 334 C4ISR 59 69 162 128 I&TS 37 64 126 206 Separation Costs for Vectrus Spin-off, pre tax 15 - 30 C4ISR 5 - 13 - I&TS 10 - 17 - Segment Operating Income, Adjusted 111 133 318 334 C4ISR 64 69 175 128 I&TS 47 64 143 206 Segment Operating Margin, As Reported C4ISR 11.7% 13.9% 10.8% 8.4% I&TS 6.5% 10.0% 7.3% 10.0% Segment Operating Margin, Adjusted 10.4% 11.7% 9.8% 9.3% C4ISR 12.7% 13.9% 11.6% 8.4% &TS 8.3% 10.0% 8.3% 10.0% Operating Margin, As Reported 9.0% 11.7% 8.9% 9.3%Operating Margin, Adjusted 10.4% 11.7% 9.8% 9.3% 10

Reconciliation of Non-GAAP Measures (cont.) 11 “Free cash flow” defined as GAAP cash provided by operating activities, less capital expenditures plus separation costs related to the spin-off of Vectrus. This metric does not include dividend payments. Year-to-Date Free Cash Flow Reconciliation Q3 YTD 2014 Q3 YTD 2013 ($ million) Cash Flow From Operating Activities 71 118 Subtract: Capital Expenditures (37) (57) Free Cash Flow 34 61 Add: Separation Costs for the Vectrus Spin-off, net of tax 19 - Free Cash Flow, as Adjusted 53 61  11

Reconciliation of Non-GAAP Measures (cont.) 12 “Free cash flow” defined as GAAP cash provided by operating activities, less capital expenditures plus separation costs related to the spin-off of Vectrus. This metric does not include dividend payments. Q3 QTD 2014 Q3 YTD 2014 Q2 YTD 2014 ($ million) Cash Flow From Operating Activities 49 71 22 Subtract: Capital Expenditures (19) (37) (18) Free Cash Flow 30 34 4 Add: Separation Costs for the Vectrus Spin-off, net of tax 9 19 10 Free Cash Flow, as Adjusted 39 53 14  12

Reconciliation of Non-GAAP Measures 13 Non-GAAP Measures Excluding Estimated Vectrus Results“Estimated adjusted net income excluding Vectrus” defined as adjusted net income as defined above adjusted to exclude estimated Vectrus results and give effect to spin-related estimated G&A/tax adjustments. ($ million, except per share) Q3 2014 Q3 2013 Q3 2014 YTD Q3 2013 YTD Reported Net Income 52 80 165 202 Subtract: Estimated Net Income, Vectrus 2 24 22 84 Estimated Net Income, Stand-alone Exelis 50 56 143 118 Separation costs for the Vectrus spin-off, net of tax 9 - 19 - Subtract: Separation costs, Vectrus 8 - 15 - Separation costs, Stand-alone Exelis 1 - 4 -Adjusted Net Income 61 80 184 202 Subtract: Estimated Adjusted Net Income, Vectrus 10 24 37 84 Estimated Adjusted Net Income, Stand-alone Exelis 51 56 147 118 Net Income per fully diluted share $0.27 $0.41 $0.85 $1.06 Subtract: Estimated Net Income per fully diluted share, Vectrus $0.01 $0.13 $0.11 $0.44 Estimated Net Income per fully diluted share, Stand-alone Exelis $0.26 $0.29 $0.74 $0.62 Adjusted Net Income per fully diluted share $0.32 $0.41 $0.95 $1.06 Subtract: Estimated Adjusted net Income per fully diluted share, Vectrus $0.06 $0.13 $0.19 $0.44 Estimated Adjusted Net Income per fully diluted share, Stand-alone Exelis $0.26 $0.29 $0.76 $0.62 Weighted Average Shares Outstanding, Diluted 193.2 192.8 193.9 191.0  13

Reconciliation of Non-GAAP Measures (cont.) 14 Non-GAAP Measures Excluding Estimated Vectrus Results “estimated adjusted operating income excluding Vectrus” defined as adjusted operating income as defined above adjusted to exclude estimated Vectrus results and give effect to spin-related estimated G&A/tax adjustments. “estimated adjusted operating margin excluding Vectrus” defined as estimated adjusted operating income as defined above adjusted to exclude estimated Vectrus results and give effect to spin-related estimated G&A/tax adjustments. “estimated adjusted free cash flow excluding Vectrus” defined as free cash flow as defined above adjusted to exclude estimated Vectrus results and give effect to spin-related estimated G&A/tax adjustments. ($ million) As ReportedEstimated Vectrus Results Separation Costs Standalone Exelis Estimated Stand-alone Exelis As Reported Estimated Vectrus Results Separation Costs Standalone Exelis Estimated Stand-alone   xelis Orders 1,544 (686) 858 1,969 (922) 1,047 C4ISR 437 437 540 540 I&TS 1,107 (686) 421 1,429 (922) 507 Sales 1,068 (288) 780 1,141 (346) 795 I&TS 565 (288) 277 643 (346) 297 C4ISR 59 1 60 69 (2) 67 I&TS 37 (2) 1 36 64 (30) 34 Operating Margin 9.0% 12.3% 11.7% 12.7% C4ISR 11.7% 11.9% 13.9% 13.5% I&TS 6.5% 13.0% 10.0% 11.4% Cash Flow from Operating Activities 49 (35) 2 16 74 (12) 62 Subtract: Capital Expenditures (19) - (19) (20) - (20) Free Cash Flow 30 (35) 2 (3) 54 (12) – 42 Q3 2014 Q3 2013