8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

August 4, 2016

Date of Report (Date of earliest event reported)

ESTERLINE TECHNOLOGIES CORPORATION

(Exact Name of Registrant as Specified in Charter)

Delaware	001-06357	13-2595091
(State or Other Jurisdiction of Incorporation)	(Commission File No.)	(IRS Employer Identification No.)
500-108th Avenue NE, Bellevue, Washington		98004
(Address of principal executive offices)		(Zip Code)

(425) 453-9400

(Registrant’s telephone number, including area code)

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:

¨ Written communication 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))

Item 2.02 Results of Operations and Financial Condition.

On August 4, 2016, Esterline Technologies Corporation issued a press release announcing financial results for the three and nine months ended July 1, 2016. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated herein by reference. In addition, supplemental information regarding the financial results for periods presented in the press release is attached hereto as Exhibit 99.2. The press release and the supplemental financial information should be read in conjunction with the note regarding forward-looking statements, which is included in the text of the press release and as part of the supplemental financial information.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.	Description
99.1	Press release announcing financial results issued by Esterline Technologies Corporation dated August 4, 2016.
99.2	Supplemental Financial Information dated August 4, 2016.

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.

	ESTERLINE TECHNOLOGIES CORPORATION
Dated: August 4, 2016	By:	/s/ ROBERT D. GEORGE
	Name:	Robert D. George
	Title:	Executive Vice President, Chief Financial Officer & Corporate Development

EXHIBIT INDEX

Exhibit No.	Description
99.1	Press release announcing financial results issued by Esterline Technologies Corporation dated August 4, 2016.
99.2	Supplemental Financial Information dated August 4, 2016.

EX-99.1

Exhibit 99.1

FOR IMMEDIATE RELEASE
Contact:	Julie Albrecht
	+1 425-453-9400

ESTERLINE REPORTS FISCAL 2016 THIRD QUARTER FINANCIAL RESULTS

• Sales up 6.7% to $517.1 million in the fiscal third quarter; strong book-to-bill of 1.1

• Earnings from continuing operations of $38.0 million; adjusted earnings from continuing operations of $40.9 million

• GAAP earnings per diluted share from continuing operations of $1.28; adjusted earnings per diluted share of $1.38

BELLEVUE, Wash., August 4, 2016 – Esterline Corporation (NYSE:ESL) (www.esterline.com), a leading specialty manufacturer serving the global aerospace and defense markets, today reported results for the third fiscal quarter ended July 1, 2016. During the third quarter of fiscal 2016, the company grew consolidated revenue to $517.1 million, an increase of 6.7% compared with the year-ago period results of $484.7 million. This revenue growth was driven by strength in various end markets for the company’s Avionics & Controls and Sensors & Systems business segments. In order to provide meaningful comparisons to prior-year periods, the results for our 2015 fiscal year have been recast to the twelve months ended October 2, 2015.

Curtis Reusser, Esterline’s Chief Executive Officer, said, “We are pleased to report a strong third quarter, delivering on commitments to our stakeholders despite market fluctuations. Our teams are executing well and making good progress against our objectives for growth, backlog, and profitability, while also continuing to drive a range of operational improvement initiatives.”

Earnings from continuing operations in the third quarter of fiscal 2016 increased to $38.0 million, or $1.28 per diluted share, compared with prior-year earnings from continuing operations of $28.2 million, or $0.90 per diluted share. Adjusted earnings from continuing operations for the third fiscal quarter of 2016 were $40.9 million, or $1.38 per diluted share. In the comparable period of the prior year, adjusted earnings from continuing operations were $36.0 million, or $1.15 per diluted share. For the third fiscal quarter of 2016, adjusted earnings exclude $0.19 per diluted share of costs related to previously identified integration, restructuring and compliance activities partially offset by $0.09 per diluted share of a one-time benefit related to long-term contract adjustments (see Table 1).

Page 2 of 9 Esterline Reports Fiscal 2016 Third Quarter Financial Results

Table 1: Effect of Certain Items on 3rd Fiscal Quarter 2016

Earnings from Continuing Operations

	$ Millions			EPS
Earnings (GAAP)	$	38.0		$	1.28
Accelerated Integration Costs		1.2			0.04
Compliance Costs		2.1			0.08
DAT Integration Costs		2.1			0.07
Long-term Contract Adjustments		(2.5	)		(0.09	)
Adjusted Earnings (non-GAAP)	$	40.9		$	1.38

Including discontinued operations, net earnings for the third fiscal quarter of 2016 were $29.4 million, or $0.99 per diluted share, compared with $27.7 million, or $0.88 per diluted share, in the comparable fiscal period in 2015. Net earnings in the third fiscal quarter of 2016 included an $8.7 million loss from discontinued operations, while the prior year included a $0.6 million loss from discontinued operations.

New orders in the third fiscal quarter of 2016 were $552.1 million, compared with $467.4 million in the comparable prior-year period; the company’s book-to-bill ratio for the third quarter and first nine months of fiscal 2016 was 1.1. The Avionics & Controls segment accounted for most of the increase in fiscal 2016 third quarter orders. Backlog at the end of the third quarter of 2016 was $1.4 billion, compared with $1.2 billion at the end of the third fiscal quarter of 2015.

Gross profit in the third fiscal quarter of 2016 was $173.6 million, compared with $165.3 million in the prior-year period. Reported gross margin as a percentage of sales in the third fiscal quarter of 2016 was 33.6% compared with 34.1% in the prior-year period. On an adjusted basis, excluding the discrete items consistent with adjusted earnings, the company reported gross margin of $173.0 million, or 33.5% of sales, in the third fiscal quarter of 2016, compared with adjusted gross margin of $169.3 million, or 34.9% of sales, in the prior-year period.

Selling, general and administrative (SG&A) expenses during the third fiscal quarter of 2016 were $96.8 million, or 18.7% of sales, compared with $92.0 million, or 19.0% of sales, in the prior-year period.

Research, development and engineering (R&D) spending in the third fiscal quarter of 2016 was $22.2 million, or 4.3% of sales, compared with $26.4 million, or 5.4% of sales, in the prior-year period. This change was primarily attributable to a change in mix of engineering expenses with greater customer funded and sustaining projects than in the prior-year period. The company continues to expect full-year R&D spending to be approximately 5% of sales.

Page 3 of 9 Esterline Reports Fiscal 2016 Third Quarter Financial Results

The company’s income tax rate in the third fiscal quarter of 2016 was 17.2% compared with 19.2% in the prior-year period. The higher tax rate in the prior-year period was primarily due to non-deductible compliance expenses. For the full year, the company expects a tax rate in the range of 15% to 17%.

For the nine months of fiscal 2016 ended July 1, year-to-date (YTD) sales were $1.45 billion, roughly even with the same period in the prior year. Fiscal 2016 YTD GAAP earnings from continuing operations were $64.9 million, or $2.18 per diluted share, compared with the prior-year period results of $87.6 million, or $2.76 per diluted share. Excluding the discrete costs described in Table 2 below, adjusted earnings from continuing operations in the first nine months of fiscal 2016 were $86.6 million, or $2.91 per diluted share, compared with the prior-year period results of $113.1 million, or $3.57 per diluted share.

Table 2: Effect of Certain Items on YTD Fiscal 2016

Earnings from Continuing Operations

	$ Millions		EPS
Earnings (GAAP)	$	64.9	$	2.18
Accelerated Integration Costs		4.2		0.14
Compliance Costs		7.0		0.23
DAT Integration Costs		8.9		0.30
Long-term Contract Adjustments		1.6		0.06
Adjusted Earnings (non-GAAP)	$	86.6	$	2.91

Cash flow from operations for the nine months ended July 1, 2016, was $114.7 million, compared with $117.2 million in the prior-year period. After capital expenditures of $58.5 million, free cash flow was $56.2 million in the first nine months of fiscal 2016. In the prior-year period, free cash flow was $80.9 million. Capital expenditures in fiscal 2016 are higher than the prior year due to approximately $15 million used to purchase and improve the primary facility of the DAT business. Additionally, during the third fiscal quarter of 2016, the company repurchased 102,267 of its shares for approximately $6.7 million. This brings the total number of shares repurchased since the inception of the company’s share repurchase program in the third fiscal quarter of 2014 to 3.1 million shares for a total purchase amount of $308.5 million. A total of $91.5 million remains under the $400 million share repurchase authorization.

Page 4 of 9 Esterline Reports Fiscal 2016 Third Quarter Financial Results

Conference Call Information

Esterline will host a conference call to discuss this announcement today at 5:00 p.m. Eastern Time (2:00 p.m. Pacific Time). The U.S. dial-in number is 877-307-0078; outside the U.S., use 531-289-2890. The pass code for the call is: 49084439. The company has posted a presentation on its website (www.esterline.com) under “Presentations” in the Investor Relations section to provide additional information about its fiscal 2016 third quarter and YTD operational and financial results. The presentation is also included as Exhibit 99.2 to the company’s report on Form 8-K, which is being submitted today to the SEC.

Non-GAAP Financial Information

This press release and the related presentation providing supplemental financial information include non-GAAP financial measures—adjusted earnings from continuing operations, adjusted earnings from continuing operations per diluted share, adjusted earnings before interest and tax (EBIT), operating earnings from continuing operations adjusted to exclude depreciation and amortization expense (EBITDA), adjusted gross margin, and free cash flow—that have not been calculated in accordance with generally accepted accounting principles in the U.S. (GAAP). Adjusted earnings from continuing operations consist of earnings from continuing operations attributable to Esterline less the costs associated with certain integration activities—including restructuring charges—and incremental compliance costs as well as discrete items associated with our acquisition of the DAT business in January 2015, adjustments to reserves on long-term contracts incurred in the periods presented and unique amounts related to pension expense, in each case, as further detailed in the tables below. Adjusted earnings from continuing operations per diluted share divides each element of adjusted earnings from continuing operations by the weighted average number of shares outstanding, diluted for the periods presented. EBIT is defined as operating earnings from continuing operations. Adjusted EBIT excludes the same costs excluded from adjusted earnings from continuing operations set forth in the table below. Third fiscal quarter 2016 adjusted gross margin excludes the cost of certain integration activities and adjustments to long-term contract reserves that have a total net impact of reducing GAAP gross margin by $(0.6) million. Fiscal third quarter 2015 adjusted gross margin excludes certain integration costs and purchase accounting charges totaling $4.0 million. In accordance with the SEC’s requirements, below is the reconciliation of the non-GAAP adjusted earnings from continuing operations to the comparable GAAP earnings from continuing operations and additional relevant reconciliations are included in the presentation providing supplemental financial information.

Page 5 of 9 Esterline Reports Fiscal 2016 Third Quarter Financial Results

In millions, except per share amounts
	Three						Recast Three
	Months Ended						Months Ended
	July 1, 2016						June 26, 2015
				Diluted						Diluted
				EPS						EPS
Earnings from Continuing Operations Attributable to Esterline (GAAP), Net of Tax	$	38.0		$	1.28		$	28.2		$	0.90
Accelerated Integration Costs, Net of Tax of $0.3 and $0.4		1.2			0.04			2.0			0.07
Compliance Costs, Net of Tax of $0.6 and $0.8		2.1			0.08			3.3			0.10
DAT Integration and Purchase Acctg Adjustments, Net of Tax of $0.7 and $0.9		2.1			0.07			2.5			0.08
Long-term Contract Adjustments, Net of Tax of $0.2		(2.5	)		(0.09	)		—			—
Adjusted Earnings from Continuing Operations (non-GAAP), Net of Tax	$	40.9		$	1.38		$	36.0		$	1.15
In millions, except per share amounts
	Nine						Recast Nine
	Months Ended						Months Ended
	July 1, 2016						June 26, 2015
				Diluted						Diluted
				EPS						EPS
Earnings from Continuing Operations Attributable to Esterline (GAAP), Net of Tax	$	64.9		$	2.18		$	87.6		$	2.76
Accelerated Integration Costs, Net of Tax of $0.7 and $2.5		4.2			0.14			9.4			0.29
Compliance Costs, Net of Tax of $1.2 and $2.4		7.0			0.23			8.9			0.29
DAT Integration and Purchase Acctg Adjustments, Net of Tax of $1.5 and $1.7		8.9			0.30			6.2			0.20
DAT Closing Expenses, Net of Tax of $1.3		—			—			4.7			0.14
Long-term Contract Adjustments, Net of Tax of $0.3 and $2.2		1.6			0.06			7.7			0.25
Pension Expense, Net of Tax of $0.7		—			—			2.3			0.07
Non-Income Tax Gain, Net of Tax of $4.4		—			—			(13.7	)		(0.43	)
Adjusted Earnings from Continuing Operations (non-GAAP), Net of Tax	$	86.6		$	2.91		$	113.1		$	3.57

The company provides these non-GAAP financial measures as supplemental information to the GAAP financial measures. Management uses these non-GAAP financial measures to (a) evaluate the company’s historical and prospective financial performance and its performance relative to its competitors, (b) allocate resources, and (c) measure the operational performance of the company’s business units.

Page 6 of 9 Esterline Reports Fiscal 2016 Third Quarter Financial Results

In addition, management believes including these non-GAAP financial measures enhances investors’ and financial analysts’ understanding of the company’s performance as well as their ability to assess and compare the company’s historical results of operations.

These non-GAAP financial measures are not meant to be considered in isolation or as a substitute for the comparable GAAP measures, and free cash flow is not necessarily indicative of amounts available for discretionary use. There are limitations to these non-GAAP financial measures because they are not prepared in accordance with GAAP and may not be comparable to similarly titled measures of other companies due to potential differences in methods of calculation and items that comprise the calculation. The company compensates for these limitations by using these non-GAAP financial measures as a supplement to the GAAP measures and by providing reconciliations of the non-GAAP and comparable GAAP financial measures. The non-GAAP financial measures should be read only in conjunction with the company’s consolidated financial statements prepared in accordance with GAAP.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or the company’s future financial performance. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should” or “will,” or the negative of such terms, or other comparable terminology. These forward-looking statements are only predictions based on the current intent and expectations of the management of Esterline, are not guarantees of future performance or actions, and involve risks and uncertainties that are difficult to predict and may cause Esterline’s or its industry’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Esterline’s actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements due to risks detailed in Esterline’s public filings with the Securities and Exchange Commission including its most recent Transition Report on Form 10-K.

Page 7 of 9 Esterline Reports Fiscal 2016 Third Quarter Financial Results

ESTERLINE TECHNOLOGIES CORPORATION

Consolidated Statement of Operations (unaudited)

In thousands, except per share amounts

	Three Months Ended						Nine Months Ended
	July 1,			June 26,			July 1,			June 26,
	2016			2015			2016			2015
				(Recast)						(Recast)
Segment Sales
Avionics & Controls	$	222,583		$	200,078		$	607,493		$	594,025
Sensors & Systems		186,337			175,544			514,836			529,976
Advanced Materials		108,172			109,101			326,550			333,543
Net Sales		517,092			484,723			1,448,879			1,457,544
Cost of Sales		343,508			319,433			981,403			963,996
		173,584			165,290			467,476			493,548
Expenses
Selling, general and administrative		96,769			92,028			293,283			289,549
Research, development and engineering		22,211			26,401			72,760			75,075
Restructuring charges		559			1,135			2,430			6,062
Other income		—			—			—			(12,744	)
Total Expenses		119,539			119,564			368,473			357,942
Operating Earnings from Continuing Operations		54,045			45,726			99,003			135,606
Interest Income		(30	)		(87	)		(211	)		(406	)
Interest Expense		7,659			10,393			22,169			24,409
Loss on Extinguishment of Debt		—			329			—			329
Earnings from Continuing Operations Before Income Taxes		46,416			35,091			77,045			111,274
Income Tax Expense		7,975			6,744			11,358			23,430
Earnings from Continuing Operations Including Noncontrolling Interests		38,441			28,347			65,687			87,844
Earnings Attributable to Noncontrolling Interests		(395	)		(125	)		(781	)		(216	)
Earnings from Continuing Operations Attributable to Esterline, Net of Tax		38,046			28,222			64,906			87,628
Loss from Discontinued Operations, Attributable to Esterline, Net of Tax		(8,690	)		(558	)		(15,493	)		(21,034	)
Net Earnings Attributable to Esterline	$	29,356		$	27,664		$	49,413		$	66,594
Earnings (Loss) Per Share—Basic:
Continuing Operations	$	1.30		$	.92		$	2.19		$	2.81
Discontinued Operations		(.30	)		(.02	)		(.52	)		(.67	)
Earnings (Loss) Per Share—Basic	$	1.00		$	.90		$	1.67		$	2.14
Earnings (Loss) Per Share—Diluted:
Continuing Operations	$	1.28		$	.90		$	2.18		$	2.76
Discontinued Operations		(.29	)		(.02	)		(.52	)		(.66	)
Earnings (Loss) Per Share—Diluted	$	.99		$	.88		$	1.66		$	2.10
Weighted Average Number of Shares Outstanding—Basic		29,381			30,831			29,517			31,183
Weighted Average Number of Shares Outstanding—Diluted		29,601			31,322			29,788			31,702

Page 8 of 9 Esterline Reports Fiscal 2016 Third Quarter Financial Results

ESTERLINE TECHNOLOGIES CORPORATION

Consolidated Sales and Earnings From Continuing Operations by Segment (unaudited)

In thousands

	Three Months Ended						Nine Months Ended
	July 1,			June 26,			July 1,			June 26,
	2016			2015			2016			2015
				(Recast)						(Recast)
Segment Sales
Avionics & Controls	$	222,583		$	200,078		$	607,493		$	594,025
Sensors & Systems		186,337			175,544			514,836			529,976
Advanced Materials		108,172			109,101			326,550			333,543
Net Sales	$	517,092		$	484,723		$	1,448,879		$	1,457,544
Earnings from Continuing Operations Before Income Taxes
Avionics & Controls	$	28,517		$	16,836		$	40,579		$	62,096
Sensors & Systems		27,942			22,968			61,670			56,682
Advanced Materials		15,512			24,514			51,710			65,538
Segment Earnings		71,971			64,318			153,959			184,316
Corporate expense		(17,926	)		(18,592	)		(54,956	)		(61,454	)
Other income		—			—			—			12,744
Interest income		30			87			211			406
Interest expense		(7,659	)		(10,393	)		(22,169	)		(24,409	)
Loss on extinguishment of debt		—			(329	)		—			(329	)
Earnings from Continuing Operations Before Income Taxes	$	46,416		$	35,091		$	77,045		$	111,274

Page 9 of 9 Esterline Reports Fiscal 2016 Third Quarter Financial Results

ESTERLINE TECHNOLOGIES CORPORATION

Consolidated Balance Sheet (unaudited)

In thousands

	July 1,		October 2,
	2016		2015
Assets
Current Assets
Cash and cash equivalents	$	237,845	$	191,355
Escrow cash		1,125		—
Accounts receivable, net		393,632		380,748
Inventories		466,975		446,768
Income tax refundable		4,957		12,575
Deferred income tax benefits		—		41,082
Prepaid expenses		20,611		23,008
Other current assets		5,370		5,427
Current assets of businesses held for sale		18,034		27,851
Total Current Assets		1,148,549		1,128,814
Property, Plant and Equipment, Net		326,775		309,399
Other Non-Current Assets
Goodwill		1,027,873		1,041,991
Intangibles, net		405,531		452,040
Deferred income tax benefits		69,259		28,979
Other assets		15,395		14,348
Non-current assets of businesses held for sale		10,735		24,917
	$	3,004,117	$	3,000,488
Liabilities and Shareholders’ Equity
Current Liabilities
Accounts payable	$	128,635	$	117,976
Accrued liabilities		246,967		259,734
Current maturities of long-term debt		16,340		13,376
Federal and foreign income taxes		6,322		2,404
Current liabilities of businesses held for sale		12,283		17,106
Total Current Liabilities		410,547		410,596
Long-Term Liabilities
Credit facilities		170,000		160,000
Long-term debt, net of current maturities		688,753		701,457
Deferred income tax liabilities		57,690		73,849
Pension and post-retirement obligations		73,653		75,019
Other liabilities		24,868		29,367
Non-current liabilities of businesses held for sale		1,222		2,409
Total Shareholders’ Equity		1,577,384		1,547,791
	$	3,004,117	$	3,000,488

EX-99.2

Q3 2016 Supplemental Financial Information August 4, 2016 Exhibit 99.2

This presentation may contain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or our future financial performance. In some cases, you can identify forward-looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “potential,” “predict,” “should” or “will,” or the negative of such terms, or other comparable terminology. These forward-looking statements are only predictions based on the current intent and expectations of the management of Esterline, are not guarantees of future performance or actions, and involve risks and uncertainties that are difficult to predict and may cause Esterline’s or its industry’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Esterline's actual results and the timing and outcome of events may differ materially from those expressed in or implied by the forward-looking statements due to risks detailed in Esterline's public filings with the Securities and Exchange Commission including its most recent Transition Report on Form 10-K. This presentation also contains references to non-GAAP financial information subject to Regulation G. The reconciliations of each non-GAAP financial measure to its comparable GAAP measure as well as further information on management’s use of non-GAAP financial measures are included in Esterline’s press release dated August 4, 2016, included as Exhibit 99.1 to Form 8-K filed with the SEC on the same date, as well as in this presentation, including the Appendix.

Q3 2016 Financial Results Sales of $517 million, up 6.7%* Organic sales up $27 million Positive FX impact of $6 million Book to Bill = 1.1 (both in Q3 and for YTD 2016) GAAP EPS of $1.28 Adjusted EPS of $1.38** (excludes certain discrete items) YTD free cash flow of $56 million** * Comparison is to the recast three-month period ended June 26, 2015. ** See Page 1 regarding non-GAAP financial measures.

Q3 2016 Year-over-Year (YOY) Summary* Dollars in millions, except EPS Q3 2016 Q3 2015* Change Sales $ 517 $ 485 $ 32 Gross Margin $ 174 $ 165 $ 9 - % of sales 33.6% 34.1% (0.5%) Net Earnings from Continuing Operations $ 38 $ 28 $ 10 Net Earnings Per Diluted Share $ 1.28 $ 0.90 $ 0.38 * Comparison is to the recast three-month period ended June 26, 2015.

Q3 2016 Earnings Adjustment Dollars in millions, except EPS Earnings from Continuing Ops EPS GAAP $ 38.0 $ 1.28 Accelerated integration costs 1.2 0.04 Compliance costs 2.1 0.08 DAT integration costs 2.1 0.07 Long-term contract adjustments (2.5) (0.09) Adjusted * $ 40.9 $ 1.38 * See Page 1 regarding non-GAAP financial measures.

Q3 2016 Sales Change (YOY)* Items Sales Q3 2015* $ 485 Foreign currency translation 1 FX forward contract gain 4 Sales volume 27 Q3 2016 $ 517 Dollars in millions * Comparison is to the recast three-month period ended June 26, 2015.

Q3 2016 Segment Sales Change (YOY)* Total Change Organic¹ FX Avionics & Controls 11% 9% 2% Sensors & Systems 6% 4% 2% Advanced Materials (1)% 1% (1)% Total 7% 5% 1% ¹ Q3 2016 organic sales growth represents the total reported increase within the company’s continuing operations less the impact of all foreign currency translation and hedging activities. * Comparison is to the recast three-month period ended June 26, 2015.

Q3 2016 Gross Margin Change (YOY)* Items Gross Margin Q3 2015* $ 165 Foreign currency translation 2 FX forward contract gain 4 Sales volume / mix 5 Other (2) Q3 2016 $ 174 Dollars in millions * Comparison is to the recast three-month period ended June 26, 2015.

YTD Q3 2016 Free Cash Flow Reconciliation 8 * Comparison is to the recast nine-month period ended June 26, 2015. ** See Page 1 regarding non-GAAP financial measures. YTD Q3 2016 YTD Q3 2015* Net Earnings $ 50 $ 67 Depreciation and amortization (Depreciation of $37M in both years) 73 76 Change in working capital (A/R, Inventory, A/P) (23) (19) Other 15 (7) Cash flow from operations $ 115 $ 117 Capital expenditures (59) (36) Free cash flow** $ 56 $ 81 Dollars in millions; GAAP results Amounts included in Free Cash Flow - GAAP YTD Q3 2016 YTD Q3 2015* Adjustments to Net Income (after-tax) ** $ 22 $ 26 Loss from Discontinued Operations $ (15) $ (21)

YTD Q3 2016 EBITDA * Comparison is to the recast nine-month period ended June 26, 2015. ** See Page 1 regarding non-GAAP financial measures. YTD Q3 2016 YTD Q3 2015* Operating Earnings from Continuing Operations $ 99 $ 136 Depreciation and amortization 72 74 EBITDA from Continuing Operations ** $ 171 $ 210 Dollars in millions

2016 Guidance Guidance Sales $1.950B - $1.975B GAAP EPS (diluted, continuing ops) $3.48 - $3.68 Adjusted EPS* (diluted, continuing ops) $4.40 - $4.60 EBITDA* $230M - $250M Free Cash Flow* $110M - $130M Guidance 2016 Adjusted EPS GAAP EPS (diluted, continuing ops) $3.48 - $3.68 Accelerated Integration Costs $0.20 Compliance Costs $0.31 DAT Integration Costs $0.35 Long-Term Contract Adjustments $0.06 Adjusted EPS* (diluted, continuing ops) $4.40 - $4.60 Tightened Ranges For Sales and EPS EPS range reflects estimated FY bottom-line impact from Defense Technologies incident * See Page 1 regarding non-GAAP financial measures.

Share Repurchase Update # Shares In thousands $ Value In millions $ Authorization Remaining In millions FY 2014 269 $ 30.3 FY 2015 2,562 259.5 Q1 2016 0 0 Q2 2016 203 12.0 Q3 2016 102 6.7 Total since inception* 3,136 $ 308.5 $ 91.5 * $400 million total authorization for share repurchase.

Q3 Supplemental Financial Information Global Coverage Strong global footprint for sales and manufacturing Nearly 20% of operations in low-cost countries Focused on competitive cost structure Ability to leverage technologies across the world

Foreign Exchange Information Country / Region % Total Sales* United States 49% Canada 10% UK 14% France 21% All Other 6% Currency Estimated % Total Sales US Dollar (USD) 70 - 75% Euro 15 - 20% British Pound 5 - 6% Canadian Dollar 1 - 3% * Based on data in Esterline’s 2015 10K Key Considerations A stronger USD impacts translation of non-USD sales and expenses – Lower sales and expenses in USD Mark-to-market of certain FX items creates P&L volatility Net monetary assets (non-functional currency) Embedded derivatives in backlog (non-functional currency) Most ESL cash flow hedges receive hedge accounting treatment Cash flow hedges that do not receive hedge accounting treatment have P&L impact Q3 Supplemental Financial Information

Appendix

2015 Recast Income Statement* * See Page 1 regarding non-GAAP financial measures.

2015 Recast Income Statement

2015 Recast EPS - Adjustments* * See Page 1 regarding non-GAAP financial measures.

Q3 2016 Adjusted Gross Margin and EBIT* * See Page 1 regarding non-GAAP financial measures

Q3 2015* Adjusted Gross Margin and EBIT** 19 * Q3 2015 is the recast three-month period ended June 26, 2015. ** See Page 1 regarding non-GAAP financial measures.

Q4 2015* Adjusted Gross Margin and EBIT** * Q4 2015 is the recast three-month period ended October 2, 2015. ** See Page 1 regarding non-GAAP financial measures.