|        |
|--------|
|        |  |
| þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|   | For the quarterly period ended December 30, 2016 |

|        |
|--------|
|        |  |
| o      | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|   | For the transition period from                              to                              |

|                                                                                    |
|------------------------------------------------------------------------------------|
|                                                                                    |  |  |
| Delaware                                                                           |   | 34-0276860 |
| (State or other jurisdiction ofincorporation or organization)                      |   | (I.R.S. Employer Identification No.) |
|                                                                               |
| 1025 West NASA BoulevardMelbourne, Florida                                         |   | 329l9 |
| (Address of principal executive offices)                                           |   | (Zip Code) |
|                                                                               |
| (321) 727-9l00                                                                     |
| (Registrant’s telephone number, including area code)                         |
|                                                                               |
| No changes                                                                         |
| (Former name, former address and former fiscal year, if changed since last report) |

|                                   |
|-----------------------------------|
|                                   |  |  |  |  |  |  |
| Large accelerated filer |   | þ |    |   | Accelerated filer | o |
| Non-accelerated filer             |   | o |    | (Do not check if a smaller reporting company) | Smaller reporting company | o |

|        |
|--------|
|        |  |  |  |  |
|   |

----

|                                                                                                                                           |
|-------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                           |  |
|                                                                                                                                      |   |
|                                                                                                                                      | Page |
| Part I. Financial Information:                                                                                                            |   |
| Item 1. Financial Statements (Unaudited):                                                                                            |   |
| Condensed Consolidated Statement of Income for the Quarter and Two Quarters Ended December 30, 2016 and January 1, 2016                   | 1 |
| Condensed Consolidated Statement of Comprehensive Income for the Quarter and Two Quarters Ended     December 30, 2016 and January 1, 2016 | 2 |
| Condensed Consolidated Balance Sheet at December 30, 2016 and July 1, 2016                                                      | 3 |
| Condensed Consolidated Statement of Cash Flows for the Two Quarters Ended December 30, 2016 and        January 1, 2016               | 4 |
| Notes to Condensed Consolidated Financial Statements                                                                                      | 5 |
| Review Report of Independent Registered Certified Public Accounting Firm                                                                  | 21 |
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations                                  | 22 |
| Item 3. Quantitative and Qualitative Disclosures About Market Risk                                                                   | 36 |
| Item 4. Controls and Procedures                                                                                                      | 37 |
|                                                                                                                                      |   |
| Part II. Other Information:                                                                                                               |   |
| Item 1. Legal Proceedings                                                                                                            | 38 |
| Item 1A. Risk Factors                                                                                                                | 38 |
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                                                                  | 38 |
| Item 3. Defaults Upon Senior Securities                                                                                              | 39 |
| Item 4. Mine Safety Disclosures                                                                                                      | 39 |
| Item 5. Other Information                                                                                                            | 39 |
| Item 6. Exhibits                                                                                                                     | 40 |
|                                                                                                                                      |   |
| Signature                                                                                                                                 | 41 |
| Exhibit Index                                                                                                                             |   |

----

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                  | Quarter Ended |   | Two Quarters Ended |
|                                                  | December 30, 2016 |   | January 1, 2016 |   | December 30, 2016 |   | January 1, 2016 |
|                                                  |   |   |   |   |   |   |   |
|                                                  | (In millions, except per share amounts) |
| Revenue from product sales and services               | $ | 1,700 |  |   | $ | 1,748 |  |   | $ | 3,378 |  |   | $ | 3,458 |  |
| Cost of product sales and services                    | (1,138 | ) |   | (1,203 | ) |   | (2,258 | ) |   | (2,347 | ) |
| Engineering, selling and administrative expenses      | (276 | ) |   | (217 | ) |   | (572 | ) |   | (525 | ) |
| Non-operating income                                  | 1 |  |   | — |  |   | 2 |  |   | 1 |  |
| Interest income                                       | 1 |  |   | — |  |   | 1 |  |   | 1 |  |
| Interest expense                                      | (44 | ) |   | (46 | ) |   | (88 | ) |   | (93 | ) |
| Income from continuing operations before income taxes | 244 |  |   | 282 |  |   | 463 |  |   | 495 |  |
| Income taxes                                          | (76 | ) |   | (85 | ) |   | (139 | ) |   | (152 | ) |
| Income from continuing operations                     | 168 |  |   | 197 |  |   | 324 |  |   | 343 |  |
| Discontinued operations, net of income taxes          | 9 |  |   | (349 | ) |   | 13 |  |   | (347 | ) |
| Net income (loss)                                     | $ | 177 |  |   | $ | (152 | ) |   | $ | 337 |  |   | $ | (4 | ) |
|                                                  |   |   |   |   |   |   |   |
| Net income (loss) per common share                    |   |   |   |   |   |   |   |
| Basic                                                 |   |   |   |   |   |   |   |
| Continuing operations                                 | $ | 1.35 |  |   | $ | 1.59 |  |   | $ | 2.60 |  |   | $ | 2.77 |  |
| Discontinued operations                               | 0.07 |  |   | (2.82 | ) |   | 0.11 |  |   | (2.81 | ) |
|                                                  | $ | 1.42 |  |   | $ | (1.23 | ) |   | $ | 2.71 |  |   | $ | (0.04 | ) |
| Diluted                                               |   |   |   |   |   |   |   |
| Continuing operations                                 | $ | 1.33 |  |   | $ | 1.58 |  |   | $ | 2.57 |  |   | $ | 2.75 |  |
| Discontinued operations                               | 0.07 |  |   | (2.80 | ) |   | 0.11 |  |   | (2.78 | ) |
|                                                  | $ | 1.40 |  |   | $ | (1.22 | ) |   | $ | 2.68 |  |   | $ | (0.03 | ) |
| Cash dividends paid per common share                  | $ | 0.53 |  |   | $ | 0.50 |  |   | $ | 1.06 |  |   | $ | 1.00 |  |
| Basic weighted average common shares outstanding      | 123.7 |  |   | 123.8 |  |   | 123.8 |  |   | 123.6 |  |
| Diluted weighted average common shares outstanding    | 125.4 |  |   | 124.9 |  |   | 125.5 |  |   | 124.7 |  |

----

|                                                                                 |
|---------------------------------------------------------------------------------|
|                                                                                 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                            | Quarter Ended |   | Two Quarters Ended |
|                                                                            | December 30, 2016 |   | January 1, 2016 |   | December 30, 2016 |   | January 1, 2016 |
|                                                                            |   |   |   |   |   |   |   |
|                                                                            | (In millions) |
| Net income (loss)                                                               | $ | 177 |  |   | $ | (152 | ) |   | $ | 337 |  |   | $ | (4 | ) |
| Other comprehensive loss:                                                       |   |   |   |   |   |   |   |
| Foreign currency translation loss, net of income taxes                          | (26 | ) |   | (15 | ) |   | (29 | ) |   | (47 | ) |
| Net unrealized gain (loss) on hedging derivatives, net of income taxes          | (1 | ) |   | 1 |  |   | (1 | ) |   | 1 |  |
| Net unrecognized gain (loss) on postretirement obligations, net of income taxes | 1 |  |   | (4 | ) |   | 2 |  |   | (4 | ) |
| Other comprehensive loss, net of income taxes                                   | (26 | ) |   | (18 | ) |   | (28 | ) |   | (50 | ) |
| Total comprehensive income (loss)                                               | $ | 151 |  |   | $ | (170 | ) |   | $ | 309 |  |   | $ | (54 | ) |

----

|                                                                                                                                                                          |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                          |  |  |  |  |  |  |  |
|                                                                                                                                                                     | December 30, 2016 |   | July 1, 2016 |
|                                                                                                                                                                     |   |   |   |
|                                                                                                                                                                     | (In millions, except shares) |
| Assets                                                                                                                                                                   |   |   |   |
| Current Assets                                                                                                                                                           |   |   |   |
| Cash and cash equivalents                                                                                                                                                | $ | 361 |  |   | $ | 487 |  |
| Receivables                                                                                                                                                              | 762 |  |   | 871 |  |
| Inventories                                                                                                                                                              | 1,001 |  |   | 950 |  |
| Income taxes receivable                                                                                                                                                  | 11 |  |   | 58 |  |
| Other current assets                                                                                                                                                     | 133 |  |   | 130 |  |
| Current assets of discontinued operations                                                                                                                                | 344 |  |   | 112 |  |
| Total current assets                                                                                                                                                     | 2,612 |  |   | 2,608 |  |
| Non-current Assets                                                                                                                                                       |   |   |   |
| Property, plant and equipment                                                                                                                                            | 908 |  |   | 943 |  |
| Goodwill                                                                                                                                                                 | 5,848 |  |   | 5,839 |  |
| Other intangible assets                                                                                                                                                  | 1,437 |  |   | 1,518 |  |
| Non-current deferred income taxes                                                                                                                                        | 550 |  |   | 552 |  |
| Other non-current assets                                                                                                                                                 | 263 |  |   | 254 |  |
| Non-current assets of discontinued operations                                                                                                                            | — |  |   | 279 |  |
| Total non-current assets                                                                                                                                                 | 9,006 |  |   | 9,385 |  |
|                                                                                                                                                                     | $ | 11,618 |  |   | $ | 11,993 |  |
| Liabilities and Equity                                                                                                                                                   |   |   |   |
| Current Liabilities                                                                                                                                                      |   |   |   |
| Short-term debt                                                                                                                                                          | $ | 183 |  |   | $ | 15 |  |
| Accounts payable                                                                                                                                                         | 540 |  |   | 591 |  |
| Compensation and benefits                                                                                                                                                | 130 |  |   | 166 |  |
| Other accrued items                                                                                                                                                      | 340 |  |   | 400 |  |
| Advance payments and unearned income                                                                                                                                     | 260 |  |   | 314 |  |
| Income taxes payable                                                                                                                                                     | 15 |  |   | 6 |  |
| Current portion of long-term debt                                                                                                                                        | 130 |  |   | 382 |  |
| Current liabilities of discontinued operations                                                                                                                           | 67 |  |   | 91 |  |
| Total current liabilities                                                                                                                                                | 1,665 |  |   | 1,965 |  |
| Non-current Liabilities                                                                                                                                                  |   |   |   |
| Defined benefit plans                                                                                                                                                    | 2,144 |  |   | 2,296 |  |
| Long-term debt, net                                                                                                                                                      | 4,087 |  |   | 4,120 |  |
| Non-current deferred income taxes                                                                                                                                        | 4 |  |   | 4 |  |
| Other long-term liabilities                                                                                                                                              | 560 |  |   | 525 |  |
| Non-current liabilities of discontinued operations                                                                                                                       | — |  |   | 26 |  |
| Total non-current liabilities                                                                                                                                            | 6,795 |  |   | 6,971 |  |
| Equity                                                                                                                                                                   |   |   |   |
| Shareholders’ Equity:                                                                                                                                              |   |   |   |
| Preferred stock, without par value; 1,000,000 shares authorized; none issued                                                                                             | — |  |   | — |  |
| Common stock, $1.00 par value; 500,000,000 shares authorized; issued and outstanding 124,277,167 shares at December 30, 2016 and 124,643,407 shares at July 1, 2016 | 124 |  |   | 125 |  |
| Other capital                                                                                                                                                            | 2,061 |  |   | 2,096 |  |
| Retained earnings                                                                                                                                                        | 1,495 |  |   | 1,330 |  |
| Accumulated other comprehensive loss                                                                                                                                     | (523 | ) |   | (495 | ) |
| Total shareholders’ equity                                                                                                                                         | 3,157 |  |   | 3,056 |  |
| Noncontrolling interests                                                                                                                                                 | 1 |  |   | 1 |  |
| Total equity                                                                                                                                                             | 3,158 |  |   | 3,057 |  |
|                                                                                                                                                                     | $ | 11,618 |  |   | $ | 11,993 |  |

----

|                                                                                          |
|------------------------------------------------------------------------------------------|
|                                                                                          |  |  |  |  |  |  |  |
|                                                                                     | Two Quarters Ended |
|                                                                                     | December 30, 2016 |   | January 1, 2016 |
|                                                                                     |   |   |   |
|                                                                                     | (In millions) |
| Operating Activities                                                                     |   |   |   |
| Net income (loss)                                                                        | $ | 337 |  |   | $ | (4 | ) |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |   |   |   |
| Depreciation and amortization                                                            | 101 |  |   | 114 |  |
| Amortization of intangible assets from Exelis Inc. acquisition                           | 66 |  |   | 66 |  |
| Share-based compensation                                                                 | 22 |  |   | 19 |  |
| Qualified pension plan contributions                                                     | (103 | ) |   | (97 | ) |
| Pension income                                                                           | (49 | ) |   | (12 | ) |
| Net liability reduction for certain post-employment benefit plans                        | — |  |   | (101 | ) |
| Impairment of goodwill and other assets                                                  | — |  |   | 367 |  |
| Adjustment to loss on sales of businesses, net                                           | — |  |   | 21 |  |
| (Increase) decrease in:                                                                  |   |   |   |
| Accounts receivable                                                                      | 125 |  |   | 220 |  |
| Inventories                                                                              | (50 | ) |   | (91 | ) |
| Increase (decrease) in:                                                                  |   |   |   |
| Accounts payable and accrued expenses                                                    | (132 | ) |   | (128 | ) |
| Advance payments and unearned income                                                     | (58 | ) |   | (59 | ) |
| Income taxes                                                                             | 70 |  |   | 31 |  |
| Other                                                                                    | (34 | ) |   | 41 |  |
| Net cash provided by operating activities                                                | 295 |  |   | 387 |  |
| Investing Activities                                                                     |   |   |   |
| Net additions of property, plant and equipment                                           | (49 | ) |   | (49 | ) |
| Adjustment to proceeds from sale of business                                             | (25 | ) |   | — |  |
| Net cash used in investing activities                                                    | (74 | ) |   | (49 | ) |
| Financing Activities                                                                     |   |   |   |
| Proceeds from borrowings                                                                 | 185 |  |   | 209 |  |
| Repayments of borrowings                                                                 | (300 | ) |   | (395 | ) |
| Proceeds from exercises of employee stock options                                        | 27 |  |   | 33 |  |
| Repurchases of common stock                                                              | (100 | ) |   | — |  |
| Cash dividends                                                                           | (134 | ) |   | (127 | ) |
| Other financing activities                                                               | (19 | ) |   | (15 | ) |
| Net cash used in financing activities                                                    | (341 | ) |   | (295 | ) |
| Effect of exchange rate changes on cash and cash equivalents                             | (6 | ) |   | (13 | ) |
| Net increase (decrease) in cash and cash equivalents                                     | (126 | ) |   | 30 |  |
| Cash and cash equivalents, beginning of year                                             | 487 |  |   | 481 |  |
| Cash and cash equivalents, end of quarter                                                | $ | 361 |  |   | $ | 511 |  |

----

----

|         |                                                                                                                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We recognized $3 million ($.02 per diluted share) and $13 million ($.10 per diluted share) of income tax benefit in our Condensed Consolidated Statement of Income (Unaudited) for the quarter and two quarters ended December 30, 2016, respectively; and |

|         |                                                                                                                                                                                                                                                                                         |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We classified $13 million of cash flows resulting from excess tax benefits related to employee share-based awards as net cash provided by operating activities in our Condensed Consolidated Statement of Cash Flows (Unaudited) for the two quarters ended December 30, 2016. |

----

|                                                  |
|--------------------------------------------------|
|                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                             | Quarter Ended |   | Two Quarters Ended |
|                                             | December 30, 2016 |   | January 1, 2016 |   | December 30, 2016 |   | January 1, 2016 |
|                                             |   |   |   |   |   |   |   |
|                                             | (In millions) |
| Revenue from product sales and services          | $ | 69 |  |   | $ | 95 |  |   | $ | 145 |  |   | $ | 196 |  |
| Cost of product sales and services               | (53 | ) |   | (77 | ) |   | (109 | ) |   | (154 | ) |
| Engineering, selling and administrative expenses | (11 | ) |   | (22 | ) |   | (26 | ) |   | (43 | ) |
| Impairment of goodwill and other assets          | — |  |   | (367 | ) |   | — |  |   | (367 | ) |
| Non-operating income                             | 7 |  |   | — |  |   | 7 |  |   | — |  |
| Income (loss) before income taxes                | 12 |  |   | (371 | ) |   | 17 |  |   | (368 | ) |
| Loss on sale of discontinued operation           | — |  |   | (21 | ) |   | — |  |   | (21 | ) |
| Income tax (expense) benefit                     | (3 | ) |   | 43 |  |   | (4 | ) |   | 42 |  |
| Discontinued operations, net of income taxes     | $ | 9 |  |   | $ | (349 | ) |   | $ | 13 |  |   | $ | (347 | ) |

|                                                                                                                                                                                                                                                                                  |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                  |  |  |  |  |  |  |  |  |
|                                                                                                                                                                                                                                                                             |   | December 30, 2016 (1) |   | July 1, 2016 |
|                                                                                                                                                                                                                                                                             |   |   |   |   |
|                                                                                                                                                                                                                                                                             |   | (In millions) |
| Assets                                                                                                                                                                                                                                                                           |   |   |   |
| Receivables                                                                                                                                                                                                                                                                      | $ | 50 |  |   | $ | 67 |  |
| Inventories                                                                                                                                                                                                                                                                      | 12 |  |   | 14 |  |
| Property, plant and equipment                                                                                                                                                                                                                                                    | 69 |  |   | — |  |
| Goodwill                                                                                                                                                                                                                                                                         | 132 |  |   | — |  |
| Other intangible assets                                                                                                                                                                                                                                                          | 22 |  |   | — |  |
| Other current assets                                                                                                                                                                                                                                                             | 59 |  |   | 31 |  |
| Current assets of discontinued operations                                                                                                                                                                                                                                        | $ | 344 |  |   | $ | 112 |  |
| Property, plant and equipment                                                                                                                                                                                                                                                    | $ | — |  |   | $ | 73 |  |
| Goodwill                                                                                                                                                                                                                                                                         | — |  |   | 136 |  |
| Other intangible assets                                                                                                                                                                                                                                                          | — |  |   | 24 |  |
| Other non-current assets                                                                                                                                                                                                                                                         | — |  |   | 46 |  |
| Non-current assets of discontinued operations                                                                                                                                                                                                                                    | $ | — |  |   | $ | 279 |  |
| Liabilities                                                                                                                                                                                                                                                                      |   |   |   |
| Accounts payable                                                                                                                                                                                                                                                                 | $ | 15 |  |   | $ | 11 |  |
| Post-closing adjustment liability                                                                                                                                                                                                                                                | 2 |  |   | 27 |  |
| Other current liabilities                                                                                                                                                                                                                                                        | 50 |  |   | 53 |  |
| Current liabilities of discontinued operations                                                                                                                                                                                                                                   | $ | 67 |  |   | $ | 91 |  |
| Non-current liabilities of discontinued operations                                                                                                                                                                                                                               | $ | — |  |   | $ | 26 |  |
|                                                                                                                                                                                                                                                                             |   |   |   |   |
| (1)  The assets and liabilities of discontinued operations held for sale are classified as current in our Condensed Consolidated Balance Sheet (Unaudited) as of December 30, 2016 because it was probable the sale would occur and proceeds would be collected within one year. |

----

|                                         |
|-----------------------------------------|
|                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                    | Quarter Ended |   | Two Quarters Ended |
|                                    | December 30, 2016 |   | January 1, 2016 |   | December 30, 2016 |   | January 1, 2016 |
|                                    |   |   |   |   |   |   |   |
|                                    | (In millions) |
| Depreciation and amortization           | $ | 3 |  |   | $ | 12 |  |   | $ | 11 |  |   | $ | 25 |  |
| Capital expenditures                    | 2 |  |   | 4 |  |   | 4 |  |   | 8 |  |
| Significant noncash items:              |   |   |   |   |   |   |   |
| Impairment of goodwill and other assets | — |  |   | 367 |  |   | — |  |   | 367 |  |

----

|                                                                                                                                           |
|-------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                           |  |  |  |  |  |  |  |  |
|                                                                                                                                      | December 30, 2016 (1) |   | July 1, 2016 (1) |
|                                                                                                                                      |   |   |   |
|                                                                                                                                      | (In millions) |
| Foreign currency translation, net of income taxes of $30 million and $29 million at December 30, 2016 and July 1, 2016, respectively | $ | (160 | ) |   | $ | (131 | ) |
| Net unrealized loss on hedging derivatives, net of income taxes of $11 million at December 30, 2016 and July 1, 2016            | (19 | ) |   | (18 | ) |
| Unrecognized postretirement obligations, net of income taxes of $213 million at December 30, 2016 and July 1, 2016                   | (344 | ) |   | (346 | ) |
|                                                                                                                                      | $ | (523 | ) |   | $ | (495 | ) |
|                                                                                                                                      |   |   |   |   |

|     |                                                                                                                                                                            |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Reclassifications out of accumulated other comprehensive loss to earnings were not material for the two quarters ended December 30, 2016 or January 1, 2016. |

|                                                            |
|------------------------------------------------------------|
|                                                            |  |  |  |  |  |  |  |
|                                                       | December 30, 2016 |   | July 1, 2016 |
|                                                       |   |   |   |
|                                                       | (In millions) |
| Accounts receivable                                        | $ | 469 |  |   | $ | 526 |  |
| Unbilled costs and accrued earnings on cost-plus contracts | 297 |  |   | 346 |  |
|                                                       | 766 |  |   | 872 |  |
| Less allowances for collection losses                      | (4 | ) |   | (1 | ) |
|                                                       | $ | 762 |  |   | $ | 871 |  |

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |
|                                                         | December 30, 2016 |   | July 1, 2016 |
|                                                         |   |   |   |
|                                                         | (In millions) |
| Unbilled costs and accrued earnings on fixed-price contracts | $ | 566 |  |   | $ | 511 |  |
| Finished products                                            | 108 |  |   | 128 |  |
| Work in process                                              | 129 |  |   | 119 |  |
| Raw materials and supplies                                   | 198 |  |   | 192 |  |
|                                                         | $ | 1,001 |  |   | $ | 950 |  |

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |
|                                           | December 30, 2016 |   | July 1, 2016 |
|                                           |   |   |   |
|                                           | (In millions) |
| Land                                           | $ | 43 |  |   | $ | 43 |  |
| Software capitalized for internal use          | 128 |  |   | 115 |  |
| Buildings                                      | 618 |  |   | 605 |  |
| Machinery and equipment                        | 1,259 |  |   | 1,220 |  |
|                                           | 2,048 |  |   | 1,983 |  |
| Less accumulated depreciation and amortization | (1,140 | ) |   | (1,040 | ) |
|                                           | $ | 908 |  |   | $ | 943 |  |

|                                                                         |
|-------------------------------------------------------------------------|
|                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                    | CommunicationSystems |   | Space andIntelligenceSystems |   | ElectronicSystems |   | CriticalNetworks (1) |   | Total |
|                                                                    |   |   |   |   |   |   |   |   |   |
|                                                                    | (In millions) |
| Balance at July 1, 2016 — As reported                        | $ | 781 |  |   | $ | 1,478 |  |   | $ | 1,650 |  |   | $ | 2,066 |  |   | $ | 5,975 |  |
| Decrease from reclassification to assets of discontinued operations (1) | — |  |   | — |  |   | — |  |   | (136 | ) |   | (136 | ) |
| Balance at July 1, 2016 — After reclassification             | $ | 781 |  |   | $ | 1,478 |  |   | $ | 1,650 |  |   | $ | 1,930 |  |   | $ | 5,839 |  |
| Currency translation adjustments                                        | 1 |  |   | (5 | ) |   | (3 | ) |   | (5 | ) |   | (12 | ) |
| Other                                                                   | 2 |  |   | 2 |  |   | 4 |  |   | 13 |  |   | 21 |  |
| Balance at December 30, 2016                                       | $ | 784 |  |   | $ | 1,475 |  |   | $ | 1,651 |  |   | $ | 1,938 |  |   | $ | 5,848 |  |

|        |
|--------|
|        |
|   |

|                                                               |
|---------------------------------------------------------------|
|                                                               |  |  |  |
|                                                          | (In millions) |
| Balance at July 1, 2016                                  | $ | 32 |  |
| Warranty provision for sales                                  | 8 |  |
| Settlements                                                   | (9 | ) |
| Other, including adjustments for foreign currency translation | (2 | ) |
| Balance at December 30, 2016                             | $ | 29 |  |

----

|                                                                                                                                                                                                                                                                                                                         |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                         |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                                                                                                                                                                                                    |   | Quarter Ended December 30, 2016 |   | Two Quarters Ended December 30, 2016 |
|                                                                                                                                                                                                                                                                                                                    |   | Pension |   | OtherBenefits |   | Total |   | Pension |   | OtherBenefits |   | Total |
|                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                    |   | (In millions) |
| Net periodic benefit income                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                                                                                                                                                                                                                                                                                            | $ | 14 |  |   | $ | — |  |   | $ | 14 |  |   | $ | 29 |  |   | $ | — |  |   | $ | 29 |  |
| Interest cost                                                                                                                                                                                                                                                                                                           | 46 |  |   | 2 |  |   | 48 |  |   | 92 |  |   | 4 |  |   | 96 |  |
| Expected return on plan assets                                                                                                                                                                                                                                                                                          | (85 | ) |   | (4 | ) |   | (89 | ) |   | (170 | ) |   | (8 | ) |   | (178 | ) |
| Amortization of net actuarial loss                                                                                                                                                                                                                                                                                      | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Amortization of prior service cost                                                                                                                                                                                                                                                                                      | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Net periodic benefit income                                                                                                                                                                                                                                                                                             | $ | (25 | ) |   | $ | (2 | ) |   | $ | (27 | ) |   | $ | (49 | ) |   | $ | (4 | ) |   | $ | (53 | ) |
| Effect of curtailments or settlements                                                                                                                                                                                                                                                                                   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |   | — |  |
| Total net periodic benefit income                                                                                                                                                                                                                                                                                       | $ | (25 | ) |   | $ | (2 | ) |   | $ | (27 | ) |   | $ | (49 | ) |   | $ | (4 | ) |   | $ | (53 | ) |
|                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                    |   | Quarter Ended January 1, 2016 |   | Two Quarters Ended January 1, 2016 |
|                                                                                                                                                                                                                                                                                                                    |   | Pension |   | OtherBenefits |   | Total |   | Pension |   | OtherBenefits |   | Total |
|                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                    |   | (In millions) |
| Net periodic benefit income                                                                                                                                                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |
| Service cost                                                                                                                                                                                                                                                                                                            | $ | 20 |  |   | $ | 2 |  |   | $ | 22 |  |   | $ | 38 |  |   | $ | 3 |  |   | $ | 41 |  |
| Interest cost                                                                                                                                                                                                                                                                                                           | 61 |  |   | 3 |  |   | 64 |  |   | 123 |  |   | 7 |  |   | 130 |  |
| Expected return on plan assets                                                                                                                                                                                                                                                                                          | (85 | ) |   | (4 | ) |   | (89 | ) |   | (171 | ) |   | (9 | ) |   | (180 | ) |
| Amortization of net actuarial loss                                                                                                                                                                                                                                                                                      | — |  |   | — |  |   | — |  |   | — |  |   | 2 |  |   | 2 |  |
| Amortization of prior service cost                                                                                                                                                                                                                                                                                      | — |  |   | (4 | ) |   | (4 | ) |   | — |  |   | (7 | ) |   | (7 | ) |
| Net periodic benefit income                                                                                                                                                                                                                                                                                             | $ | (4 | ) |   | $ | (3 | ) |   | $ | (7 | ) |   | $ | (10 | ) |   | $ | (4 | ) |   | $ | (14 | ) |
| Effect of curtailments or settlements (1)                                                                                                                                                                                                                                                                               | — |  |   | (121 | ) |   | (121 | ) |   | — |  |   | (121 | ) |   | (121 | ) |
| Total net periodic benefit income                                                                                                                                                                                                                                                                                       | $ | (4 | ) |   | $ | (124 | ) |   | $ | (128 | ) |   | $ | (10 | ) |   | $ | (125 | ) |   | $ | (135 | ) |
|                                                                                                                                                                                                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |   |
| (1)  We discontinued certain significantly underfunded post-employment benefit plans effective December 31, 2015. Under GAAP, this resulted in a negative plan amendment and curtailment during the quarter ended January 1, 2016, a settlement as of December 31, 2015, and a net liability reduction of $101 million. |

----

|                                                                                               |
|-----------------------------------------------------------------------------------------------|
|                                                                                               |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                          | Quarter Ended |   | Two Quarters Ended |
|                                                                                          | December 30, 2016 |   | January 1, 2016 |   | December 30, 2016 |   | January 1, 2016 |
|                                                                                          |   |   |   |   |   |   |   |
|                                                                                          | (In millions, except per share amounts) |
| Income from continuing operations                                                             | $ | 168 |  |   | $ | 197 |  |   | $ | 324 |  |   | $ | 343 |  |
| Adjustments for participating securities outstanding                                          | (1 | ) |   | — |  |   | (2 | ) |   | — |  |
| Income from continuing operations used in per basic and diluted common share calculations (A) | $ | 167 |  |   | $ | 197 |  |   | $ | 322 |  |   | $ | 343 |  |
| Basic weighted average common shares outstanding (B)                                          | 123.7 |  |   | 123.8 |  |   | 123.8 |  |   | 123.6 |  |
| Impact of dilutive share-based awards                                                         | 1.7 |  |   | 1.1 |  |   | 1.7 |  |   | 1.1 |  |
| Diluted weighted average common shares outstanding (C)                                        | 125.4 |  |   | 124.9 |  |   | 125.5 |  |   | 124.7 |  |
| Income from continuing operations per basic common share (A)/(B)                              | $ | 1.35 |  |   | $ | 1.59 |  |   | $ | 2.60 |  |   | $ | 2.77 |  |
| Income from continuing operations per diluted common  share (A)/(C)                           | $ | 1.33 |  |   | $ | 1.58 |  |   | $ | 2.57 |  |   | $ | 2.75 |  |

----

|         |                                                                                      |
|---------|--------------------------------------------------------------------------------------|
| • | Level 1 — Quoted prices in active markets for identical assets or liabilities. |

|         |                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 2 — Observable inputs other than quoted prices included within Level 1, including quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets or liabilities in markets that are not active; and inputs other than quoted prices that are observable or are derived principally from, or corroborated by, observable market data by correlation or other means. |

|         |                                                                                                                                                                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Level 3 — Unobservable inputs that are supported by little or no market activity, are significant to the fair value of the assets or liabilities, and reflect our own assumptions about the assumptions market participants would use in pricing the asset or liability developed using the best information available in the circumstances. |

|                                             |
|---------------------------------------------|
|                                             |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                        |   | Level 1 |   | Level 2 |   | Level 3 |   | Total |
|                                        |   |   |   |   |   |   |   |   |
|                                        |   | (In millions) |
| Assets                                      |   |   |   |   |   |   |   |
| Deferred compensation plan investments: (1) |   |   |   |   |   |   |   |
| Corporate-owned life insurance              | $ | — |  |   | $ | 18 |  |   | $ | — |  |   | $ | 18 |  |
| Stock fund                                  | 53 |  |   | — |  |   | — |  |   | 53 |  |
| Equity security                             | 47 |  |   | — |  |   | — |  |   | 47 |  |
| Liabilities                                 |   |   |   |   |   |   |   |
| Deferred compensation plans (2)             | 55 |  |   | 81 |  |   | — |  |   | 136 |  |
|                                        |   |   |   |   |   |   |   |   |

|     |                                                                                                                                                                                                                                                                                                     |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Represents investments held in a “Rabbi Trust” associated with our non-qualified deferred compensation plans, which we include in the “Other current assets” and “Other non-current assets” line items in our Condensed Consolidated Balance Sheet (Unaudited). |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Primarily represents obligations to pay benefits under certain non-qualified deferred compensation plans, which we include in the “Compensation and benefits” and “Other long-term liabilities” line items in our Condensed Consolidated Balance Sheet (Unaudited). Under these plans, participants designate investment options (including money market, stock and fixed-income funds), which serve as the basis for measurement of the notional value of their accounts. |

----

|                                                |
|------------------------------------------------|
|                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                           |   | December 30, 2016 |   | July 1, 2016 |
|                                           |   | CarryingAmount |   | FairValue |   | CarryingAmount |   | FairValue |
|                                           |   | (In millions) |
| Long-term debt (including current portion) (1) | $ | 4,217 |  |   | $ | 4,424 |  |   | $ | 4,502 |  |   | $ | 4,873 |  |
|                                           |   |   |   |   |   |   |   |   |

|     |                                                                                                                                                                                                                                                                         |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | The fair value was estimated using a market approach based on quoted market prices for our debt traded in the secondary market. If our long-term debt in our balance sheet were measured at fair value, it would be categorized in Level 2 of the fair value hierarchy. |

----

|         |                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------|
| • | Communication Systems, serving markets in tactical communications and defense and public safety networks; |

|         |                                                                                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Space and Intelligence Systems, providing complete Earth observation, environmental, geospatial, space protection, and intelligence solutions from advanced sensors and payloads, as well as ground processing and information analytics; |

|         |                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Electronic Systems, offering an extensive portfolio of solutions in electronic warfare, avionics, wireless technology, command, control, communications, computers and intelligence and undersea systems; and |

|         |                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Critical Networks, providing managed services supporting air traffic management and ground network operation and sustainment, as well as high-value IT and engineering services. |

----

|                                |
|--------------------------------|
|                                |  |  |  |  |  |  |  |  |
|                           |   | December 30, 2016 |   | July 1, 2016 |
|                           |   |   |   |   |
|                           |   | (In millions) |
| Total Assets                   |   |   |   |
| Communication Systems          | $ | 1,606 |  |   | $ | 1,667 |  |
| Space and Intelligence Systems | 2,119 |  |   | 2,149 |  |
| Electronic Systems             | 2,241 |  |   | 2,253 |  |
| Critical Networks              | 2,639 |  |   | 2,656 |  |
| Corporate (1) (2)              | 3,013 |  |   | 3,268 |  |
|                           | $ | 11,618 |  |   | $ | 11,993 |  |
|                           |   |   |   |   |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Identifiable intangible assets acquired in connection with our acquisition of Exelis Inc. (“Exelis”) in the fourth quarter of fiscal 2015 were recorded as Corporate assets because they benefit the entire Company as opposed to any individual segment. Exelis identifiable intangible asset balances recorded as Corporate assets were $1.4 billion as of December 30, 2016 and July 1, 2016. |

|     |                                                                                                                                                                                                         |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Corporate assets include the assets and liabilities of discontinued operations. See Note B — Discontinued Operations in these Notes for additional information regarding discontinued operations. |

----

|                                                       |
|-------------------------------------------------------|
|                                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                  |   | Quarter Ended |   | Two Quarters Ended |
|                                                  |   | December 30, 2016 |   | January 1, 2016 |   | December 30, 2016 |   | January 1, 2016 |
|                                                  |   |   |   |   |   |   |   |   |
|                                                  |   | (In millions) |
| Revenue                                               |   |   |   |   |   |   |   |
| Communication Systems                                 | $ | 413 |  |   | $ | 489 |  |   | $ | 843 |  |   | $ | 943 |  |
| Space and Intelligence Systems                        | 468 |  |   | 446 |  |   | 921 |  |   | 881 |  |
| Electronic Systems                                    | 384 |  |   | 381 |  |   | 745 |  |   | 756 |  |
| Critical Networks                                     | 454 |  |   | 446 |  |   | 905 |  |   | 910 |  |
| Corporate eliminations                                | (19 | ) |   | (14 | ) |   | (36 | ) |   | (32 | ) |
|                                                  | $ | 1,700 |  |   | $ | 1,748 |  |   | $ | 3,378 |  |   | $ | 3,458 |  |
| Income From Continuing Operations Before Income Taxes |   |   |   |   |   |   |   |
| Segment Operating Income:                             |   |   |   |   |   |   |   |
| Communication Systems (1)                             | $ | 121 |  |   | $ | 121 |  |   | $ | 240 |  |   | $ | 259 |  |
| Space and Intelligence Systems                        | 77 |  |   | 68 |  |   | 157 |  |   | 135 |  |
| Electronic Systems                                    | 79 |  |   | 63 |  |   | 153 |  |   | 132 |  |
| Critical Networks (2)                                 | 75 |  |   | 63 |  |   | 135 |  |   | 123 |  |
| Unallocated corporate income (expense) (3)            | (65 | ) |   | 14 |  |   | (135 | ) |   | (61 | ) |
| Corporate eliminations                                | (1 | ) |   | (1 | ) |   | (2 | ) |   | (2 | ) |
| Non-operating income                                  | 1 |  |   | — |  |   | 2 |  |   | 1 |  |
| Net interest expense                                  | (43 | ) |   | (46 | ) |   | (87 | ) |   | (92 | ) |
|                                                  | $ | 244 |  |   | $ | 282 |  |   | $ | 463 |  |   | $ | 495 |  |
|                                                  |   |   |   |   |   |   |   |   |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | Communication Systems operating income included $17 million of charges in the quarter and two quarters ended January 1, 2016, primarily related to workforce reductions, facility consolidation and other items. We recorded $14 million of these charges in the “Cost of product sales and services” line item and the remaining $3 million of these charges in the “Engineering, selling and administrative expenses” line item in the accompanying Condensed Consolidated Statement of Income (Unaudited). |

|     |                                                                                                                                                                                                                                                                                                                                                                                          |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Critical Networks operating income included $4 million of charges in the quarter and two quarters ended January 1, 2016, primarily related to workforce reductions and facility consolidation. We recorded these charges in the “Engineering, selling and administrative expenses” line item in the accompanying Condensed Consolidated Statement of Income (Unaudited). |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (3) | Unallocated corporate income (expense) included: (i) the impact of a net liability reduction of $101 million in the quarter and two quarters ended January 1, 2016 for certain post-employment benefit plans, (ii) charges of $13 million and $29 million in the quarter and two quarters ended December 30, 2016, respectively, compared with charges of $41 million and $61 million in the quarter and two quarters ended January 1, 2016, respectively, for integration and other costs associated with our acquisition of Exelis in the fourth quarter of fiscal 2015 and (iii) $33 million and $66 million of expense in the quarters and two quarters ended December 30, 2016 and January 1, 2016, respectively, for amortization of intangible assets acquired as a result of our acquisition of Exelis. Because the acquisition of Exelis benefited the entire Company as opposed to any individual segment, the amortization of identifiable intangible assets acquired in the Exelis acquisition was recorded as unallocated corporate expense. |

----

----

|                         |
|-------------------------|
|                         |  |  |  |
|                    | (In millions) |
| Assets                  |   |
| Current assets          | $ | 270 |  |
| Goodwill                | 460 |  |
| Other intangible assets | 250 |  |
| Other assets            | 20 |  |
| Liabilities             |   |
| Current liabilities     | $ | 110 |  |

----

----

----

|         |                                                                                                                                                                                                                                                                                                                                                     |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Results of Operations — an analysis of our consolidated results of operations and of the results in each of our four business segments, to the extent the segment operating results are helpful to an understanding of our business as a whole, for the periods presented in our Condensed Consolidated Financial Statements (Unaudited). |

|         |                                                                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Liquidity and Capital Resources — an analysis of cash flows, funding of pension plans, common stock repurchases, dividends, capital structure and resources, off-balance sheet arrangements and commercial commitments and contractual obligations. |

|         |                                                                                                                                                                                                                                                                                                                                |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Critical Accounting Policies and Estimates — information about accounting policies that require critical judgments and estimates and about accounting standards that have been issued, but are not yet effective for us, and their potential impact on our financial position, results of operations and cash flows. |

|         |                                                                                                                                                                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Forward-Looking Statements and Factors that May Affect Future Results — cautionary information about forward-looking statements and a description of certain risks and uncertainties that could cause our actual results to differ materially from our historical results or our current expectations or projections. |

|         |                                                                                                           |
|---------|-----------------------------------------------------------------------------------------------------------|
| • | Communication Systems, serving markets in tactical communications and defense and public safety networks; |

|         |                                                                                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Space and Intelligence Systems, providing complete Earth observation, environmental, geospatial, space protection, and intelligence solutions from advanced sensors and payloads, as well as ground processing and information analytics; |

|         |                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Electronic Systems, offering an extensive portfolio of solutions in electronic warfare, avionics, wireless technology, command, control, communications, computers and intelligence and undersea systems; and |

|         |                                                                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Critical Networks, providing managed services supporting air traffic management and ground network operation and sustainment, as well as high-value IT and engineering services. |

----

|         |                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Revenue decreased 3 percent to $1.70 billion in the second quarter of fiscal 2017 from $1.75 billion in the second quarter of fiscal 2016; |

|         |                                                                                                                                                                                             |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income from continuing operations decreased 15 percent to $168 million in the second quarter of fiscal 2017 from $197 million in the second quarter of fiscal 2016; |

|         |                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Income from continuing operations per diluted share decreased 16 percent to $1.33 in the second quarter of fiscal 2017 from $1.58 in the second quarter of fiscal 2016; |

|         |                                                                                                                                                                                                                                     |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Communication Systems revenue decreased 16 percent to $413 million and operating income was unchanged at $121 million in the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016; |

|         |                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Space and Intelligence Systems revenue increased 5 percent to $468 million and operating income increased 13 percent to $77 million in the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016; |

|         |                                                                                                                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Electronic Systems revenue increased 1 percent to $384 million and operating income increased 25 percent to $79 million in the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016; |

|         |                                                                                                                                                                                                                                              |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Critical Networks revenue increased 2 percent to $454 million and operating income increased 19 percent to $75 million in the second quarter of fiscal 2017 compared with the second quarter of fiscal 2016; and |

|         |                                                                                                                                                                                                              |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Net cash provided by operating activities decreased 24 percent to $295 million in the first two quarters of fiscal 2017 compared with $387 million in the first two quarters of fiscal 2016. |

|                                                            |
|------------------------------------------------------------|
|                                                            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                       |   | Quarter Ended |   | Two Quarters Ended |
|                                                       |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                       |   | (Dollars in millions, except per share amounts) |
| Revenue:                                                   |   |   |   |   |   |   |   |   |   |   |   |
| Communication Systems                                      | $ | 413 |  |   | $ | 489 |  |   | (16 | )% |   | $ | 843 |  |   | $ | 943 |  |   | (11 | )% |
| Space and Intelligence Systems                             | 468 |  |   | 446 |  |   | 5 |  % |   | 921 |  |   | 881 |  |   | 5 |  % |
| Electronic Systems                                         | 384 |  |   | 381 |  |   | 1 |  % |   | 745 |  |   | 756 |  |   | (1 | )% |
| Critical Networks                                          | 454 |  |   | 446 |  |   | 2 |  % |   | 905 |  |   | 910 |  |   | (1 | )% |
| Corporate eliminations                                     | (19 | ) |   | (14 | ) |   | 36 |  % |   | (36 | ) |   | (32 | ) |   | 13 |  % |
| Total revenue                                              | 1,700 |  |   | 1,748 |  |   | (3 | )% |   | 3,378 |  |   | 3,458 |  |   | (2 | )% |
| Cost of product sales and services                         | (1,138 | ) |   | (1,203 | ) |   | (5 | )% |   | (2,258 | ) |   | (2,347 | ) |   | (4 | )% |
| Gross margin                                               | 562 |  |   | 545 |  |   | 3 |  % |   | 1,120 |  |   | 1,111 |  |   | 1 |  % |
| % of total revenue                                         | 33 | % |   | 31 | % |   |   |   | 33 | % |   | 32 | % |   |   |
| Engineering, selling and administrative expenses           | (276 | ) |   | (217 | ) |   | 27 |  % |   | (572 | ) |   | (525 | ) |   | 9 |  % |
| % of total revenue                                         | 16 | % |   | 12 | % |   |   |   | 17 | % |   | 15 | % |   |   |
| Non-operating income                                       | 1 |  |   | — |  |   | * |  |   | 2 |  |   | 1 |  |   | 100 |  % |
| Net interest expense                                       | (43 | ) |   | (46 | ) |   | (7 | )% |   | (87 | ) |   | (92 | ) |   | (5 | )% |
| Income from continuing operations before income taxes      | 244 |  |   | 282 |  |   | (13 | )% |   | 463 |  |   | 495 |  |   | (6 | )% |
| Income taxes                                               | (76 | ) |   | (85 | ) |   | (11 | )% |   | (139 | ) |   | (152 | ) |   | (9 | )% |
| Effective tax rate                                         | 31 | % |   | 30 | % |   |   |   | 30 | % |   | 31 | % |   |   |
| Income from continuing operations                          | $ | 168 |  |   | $ | 197 |  |   | (15 | )% |   | $ | 324 |  |   | $ | 343 |  |   | (6 | )% |
| % of total revenue                                         | 10 | % |   | 11 | % |   |   |   | 10 | % |   | 10 | % |   |   |
| Income from continuing operations per diluted common share | $ | 1.33 |  |   | $ | 1.58 |  |   | (16 | )% |   | $ | 2.57 |  |   | $ | 2.75 |  |   | (7 | )% |
|                                                       |   |   |   |   |   |   |   |   |   |   |   |   |
| *   Not meaningful                                         |   |   |   |   |   |   |   |   |   |   |   |

----

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                               | Quarter Ended |   | Two Quarters Ended |
|                               | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |
|                               |   |   |   |   |   |   |   |   |   |   |   |
|                               | (Dollars in millions) |
| Revenue                            | $ | 413 |  |   | $ | 489 |  |   | (16 | )% |   | $ | 843 |  |   | $ | 943 |  |   | (11 | )% |
| Cost of product sales and services | (209 | ) |   | (264 | ) |   | (21 | )% |   | (427 | ) |   | (480 | ) |   | (11 | )% |
| Gross margin                       | 204 |  |   | 225 |  |   | (9 | )% |   | 416 |  |   | 463 |  |   | (10 | )% |
| % of revenue                       | 49 | % |   | 46 | % |   |   |   | 49 | % |   | 49 | % |   |   |
| ESA expenses                       | (83 | ) |   | (104 | ) |   | (20 | )% |   | (176 | ) |   | (204 | ) |   | (14 | )% |
| % of revenue                       | 20 | % |   | 21 | % |   |   |   | 21 | % |   | 22 | % |   |   |
| Segment operating income           | $ | 121 |  |   | $ | 121 |  |   | — |  % |   | $ | 240 |  |   | $ | 259 |  |   | (7 | )% |
| % of revenue                       | 29 | % |   | 25 | % |   |   |   | 28 | % |   | 27 | % |   |   |

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                               | Quarter Ended |   | Two Quarters Ended |
|                               | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |
|                               |   |   |   |   |   |   |   |   |   |   |   |
|                               | (Dollars in millions) |
| Revenue                            | $ | 468 |  |   | $ | 446 |  |   | 5 | % |   | $ | 921 |  |   | $ | 881 |  |   | 5 | % |
| Cost of product sales and services | (338 | ) |   | (331 | ) |   | 2 | % |   | (659 | ) |   | (644 | ) |   | 2 | % |
| Gross margin                       | 130 |  |   | 115 |  |   | 13 | % |   | 262 |  |   | 237 |  |   | 11 | % |
| % of revenue                       | 28 | % |   | 26 | % |   |   |   | 28 | % |   | 27 | % |   |   |
| ESA expenses                       | (53 | ) |   | (47 | ) |   | 13 | % |   | (105 | ) |   | (102 | ) |   | 3 | % |
| % of revenue                       | 11 | % |   | 11 | % |   |   |   | 11 | % |   | 12 | % |   |   |
| Segment operating income           | $ | 77 |  |   | $ | 68 |  |   | 13 | % |   | $ | 157 |  |   | $ | 135 |  |   | 16 | % |
| % of revenue                       | 16 | % |   | 15 | % |   |   |   | 17 | % |   | 15 | % |   |   |

----

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                               | Quarter Ended |   | Two Quarters Ended |
|                               | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |
|                               |   |   |   |   |   |   |   |   |   |   |   |
|                               | (Dollars in millions) |
| Revenue                            | $ | 384 |  |   | $ | 381 |  |   | 1 |  % |   | $ | 745 |  |   | $ | 756 |  |   | (1 | )% |
| Cost of product sales and services | (268 | ) |   | (278 | ) |   | (4 | )% |   | (517 | ) |   | (543 | ) |   | (5 | )% |
| Gross margin                       | 116 |  |   | 103 |  |   | 13 |  % |   | 228 |  |   | 213 |  |   | 7 |  % |
| % of revenue                       | 30 | % |   | 27 | % |   |   |   | 31 | % |   | 28 | % |   |   |
| ESA expenses                       | (37 | ) |   | (40 | ) |   | (8 | )% |   | (75 | ) |   | (81 | ) |   | (7 | )% |
| % of revenue                       | 10 | % |   | 10 | % |   |   |   | 10 | % |   | 11 | % |   |   |
| Segment operating income           | $ | 79 |  |   | $ | 63 |  |   | 25 |  % |   | $ | 153 |  |   | $ | 132 |  |   | 16 |  % |
| % of revenue                       | 21 | % |   | 17 | % |   |   |   | 21 | % |   | 17 | % |   |   |

|                                    |
|------------------------------------|
|                                    |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                               |   | Quarter Ended |   | Two Quarters Ended |
|                               |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |
|                               |   | (Dollars in millions) |
| Revenue                            | $ | 454 |  |   | $ | 446 |  |   | 2 |  % |   | $ | 905 |  |   | $ | 910 |  |   | (1 | )% |
| Cost of product sales and services | (340 | ) |   | (345 | ) |   | (1 | )% |   | (691 | ) |   | (712 | ) |   | (3 | )% |
| Gross margin                       | 114 |  |   | 101 |  |   | 13 |  % |   | 214 |  |   | 198 |  |   | 8 |  % |
| % of revenue                       | 25 | % |   | 23 | % |   |   |   | 24 | % |   | 22 | % |   |   |
| ESA expenses                       | (39 | ) |   | (38 | ) |   | 3 |  % |   | (79 | ) |   | (75 | ) |   | 5 |  % |
| % of revenue                       | 9 | % |   | 9 | % |   |   |   | 9 | % |   | 8 | % |   |   |
| Segment operating income           | $ | 75 |  |   | $ | 63 |  |   | 19 |  % |   | $ | 135 |  |   | $ | 123 |  |   | 10 |  % |
| % of revenue                       | 17 | % |   | 14 | % |   |   |   | 15 | % |   | 14 | % |   |   |
|                               |   |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                                |
|----------------------------------------------------------------|
|                                                                |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                           |   | Quarter Ended |   | Two Quarters Ended |
|                                                           |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |   | December 30, 2016 |   | January 1, 2016 |   | %Inc/(Dec) |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   | (Dollars in millions) |
| Unallocated corporate (income) expense                         | $ | 32 |  |   | $ | (47 | ) |   | * |  |   | $ | 69 |  |   | $ | (5 | ) |   | * |  |
| Amortization of intangible assets from Exelis Inc. acquisition | 33 |  |   | 33 |  |   | — | % |   | 66 |  |   | 66 |  |   | — | % |
| Corporate eliminations                                         | 1 |  |   | 1 |  |   | — | % |   | 2 |  |   | 2 |  |   | — | % |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| * Not meaningful                                               |   |   |   |   |   |   |   |   |   |   |   |

----

|                                                              |
|--------------------------------------------------------------|
|                                                              |  |  |  |  |  |  |  |
|                                                         | Two Quarters Ended |
|                                                         | December 30, 2016 |   | January 1, 2016 |
|                                                         |   |   |   |
|                                                         | (In millions) |
| Net cash provided by operating activities                    | $ | 295 |  |   | $ | 387 |  |
| Net cash used in investing activities                        | (74 | ) |   | (49 | ) |
| Net cash used in financing activities                        | (341 | ) |   | (295 | ) |
| Effect of exchange rate changes on cash and cash equivalents | (6 | ) |   | (13 | ) |
| Net increase (decrease) in cash and cash equivalents         | (126 | ) |   | 30 |  |
| Cash and cash equivalents, beginning of year                 | 487 |  |   | 481 |  |
| Cash and cash equivalents, end of quarter                    | $ | 361 |  |   | $ | 511 |  |

----

----

|         |                                                   |
|---------|---------------------------------------------------|
| • | Any obligation under certain guarantee contracts; |

|         |                                                                                                                                                                                                    |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | A retained or contingent interest in assets transferred to an unconsolidated entity or similar arrangement that serves as credit, liquidity or market risk support to that entity for such assets; |

|         |                                                                                              |
|---------|----------------------------------------------------------------------------------------------|
| • | Any obligation, including a contingent obligation, under certain derivative instruments; and |

|         |                                                                                                                                                                                                                                                                                                                                                                     |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Any obligation, including a contingent obligation, arising out of a variable interest in an unconsolidated entity that is held by, and material to, the registrant, where such entity provides financing, liquidity, market risk or credit risk support to the registrant, or engages in leasing, hedging or research and development services with the registrant. |

----

----

|                                  |
|----------------------------------|
|                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                             | Quarter Ended |   | Two Quarters Ended |
|                             | December 30, 2016 |   | January 1, 2016 |   | December 30, 2016 |   | January 1, 2016 |
|                             |   |   |   |   |   |   |   |
|                             | (In millions) |
| Favorable adjustments            | $ | 30 |  |   | $ | 49 |  |   | $ | 71 |  |   | $ | 96 |  |
| Unfavorable adjustments          | (22 | ) |   | (25 | ) |   | (50 | ) |   | (55 | ) |
| Net operating income adjustments | $ | 8 |  |   | $ | 24 |  |   | $ | 21 |  |   | $ | 41 |  |

----

|         |                                                                                                                                                                                                                                                                                                                         |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We depend on U.S. Government customers for a significant portion of our revenue, and the loss of these relationships, a reduction in U.S. Government funding or a change in U.S. Government spending priorities could have an adverse impact on our business, financial position, results of operations and cash flows. |

|         |                                                                                                                                                                                                                                                                                                                                                                              |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We depend significantly on U.S. Government contracts, which often are only partially funded, subject to immediate termination, and heavily regulated and audited. The termination or failure to fund, or negative audit findings for, one or more of these contracts could have an adverse impact on our business, financial position, results of operations and cash flows. |

|         |                                                                                                                                                                                                                                       |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We could be negatively impacted by a security breach, through cyber attack, cyber intrusion or otherwise, or other significant disruption of our IT networks and related systems or of those we operate for certain of our customers. |

----

|         |                                                                                                                                                                                                                                                                  |
|---------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The continued effects of the general weakness in the global economy and the U.S. Government’s budget deficits and national debt and sequestration could have an adverse impact on our business, financial condition, results of operations and cash flows. |

|         |                                                                                                                                                              |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The level of returns on defined benefit plan assets, changes in interest rates and other factors could affect our earnings and cash flows in future periods. |

|         |                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------|
| • | We enter into fixed-price contracts that could subject us to losses in the event of cost overruns or a significant increase in inflation. |

|         |                                                                                                                                           |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------|
| • | We use estimates in accounting for many of our programs and changes in our estimates could adversely affect our future financial results. |

|         |                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We derive a significant portion of our revenue from international operations and are subject to the risks of doing business internationally, including fluctuations in currency exchange rates. |

|         |                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------|
| • | Our reputation and ability to do business may be impacted by the improper conduct of our employees, agents or business partners. |

|         |                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We may not be successful in obtaining the necessary export licenses to conduct certain operations abroad, and Congress may prevent proposed sales to certain foreign governments. |

|         |                                                                                                                                                                             |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our future success will depend on our ability to develop new products, systems, services and technologies that achieve market acceptance in our current and future markets. |

|         |                                                                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We participate in markets that are often subject to uncertain economic conditions, which makes it difficult to estimate growth in our markets and, as a result, future income and expenditures. |

|         |                                                                                                                                                                                                             |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We cannot predict the consequences of future geo-political events, but they may adversely affect the markets in which we operate, our ability to insure against risks, our operations or our profitability. |

|         |                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------|
| • | We have made, and may continue to make, strategic acquisitions and divestitures that involve significant risks and uncertainties. |

|         |                                                                                                                                                                                                                                                                          |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Disputes with our subcontractors and the inability of our subcontractors to perform, or our key suppliers to timely deliver our components, parts or services, could cause our products or services to be produced or delivered in an untimely or unsatisfactory manner. |

|         |                                                                                                                                                                                                                                 |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Third parties have claimed in the past and may claim in the future that we are infringing directly or indirectly upon their intellectual property rights, and third parties may infringe upon our intellectual property rights. |

|         |                                                                                                                                                                                                                                                       |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The outcome of litigation or arbitration in which we are involved from time to time is unpredictable and an adverse decision in any such matter could have a material adverse effect on our financial position, results of operations and cash flows. |

|         |                                                                                                                                    |
|---------|------------------------------------------------------------------------------------------------------------------------------------|
| • | We face certain significant risk exposures and potential liabilities that may not be covered adequately by insurance or indemnity. |

|         |                                                                                            |
|---------|--------------------------------------------------------------------------------------------|
| • | Changes in our effective tax rate may have an adverse effect on our results of operations. |

|         |                                                                                                                                                                                                                                   |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our level of indebtedness and our ability to make payments on or service our indebtedness and our unfunded pension liability may adversely affect our financial and operating activities or our ability to incur additional debt. |

|         |                                                                                   |
|---------|-----------------------------------------------------------------------------------|
| • | A downgrade in our credit ratings could materially adversely affect our business. |

|         |                                                                                                                                                 |
|---------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Unforeseen environmental issues could have a material adverse effect on our business, financial position, results of operations and cash flows. |

|         |                                                                                                                                                                 |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | We have significant operations in locations that could be materially and adversely impacted in the event of a natural disaster or other significant disruption. |

|         |                                                                                                                                                                                                                                                                      |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Changes in future business or other market conditions could cause business investments and/or recorded goodwill or other long-term assets to become impaired, resulting in substantial losses and write-downs that would adversely affect our results of operations. |

|         |                                                                                                                                  |
|---------|----------------------------------------------------------------------------------------------------------------------------------|
| • | Some of our workforce is represented by labor unions, so our business could be harmed in the event of a prolonged work stoppage. |

|         |                                                                                         |
|---------|-----------------------------------------------------------------------------------------|
| • | We must attract and retain key employees, and failure to do so could seriously harm us. |

|         |                                                                                                                           |
|---------|---------------------------------------------------------------------------------------------------------------------------|
| • | We may be responsible for U.S. Federal income tax liabilities that relate to the spin-off of Vectrus completed by Exelis. |

|         |                                                                                                                                                                                                                                                                                                                                                               |
|---------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | In connection with the Vectrus spin-off, Vectrus indemnified Exelis for certain liabilities and Exelis indemnified Vectrus for certain liabilities. This indemnity may not be sufficient to insure us against the full amount of the liabilities assumed by Vectrus and Vectrus may be unable to satisfy its indemnification obligations to us in the future. |

|         |                                                                                                                                                              |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The Vectrus spin-off may expose us to potential liabilities arising out of state and Federal fraudulent conveyance laws and legal distribution requirements. |

|         |                                                                                                                                                                    |
|---------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | The ITT spin-off of Exelis may expose us to potential liabilities arising out of state and Federal fraudulent conveyance laws and legal distribution requirements. |

|         |                                                                                                                                                                                                          |
|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | If we are required to indemnify ITT or Xylem in connection with the ITT spin-off of Exelis, we may need to divert cash to meet those obligations and our financial results could be negatively impacted. |

----

|         |                                                                                                                                                                                                                                                                                                                                               |
|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| • | Our expected uses of proceeds from the anticipated divestiture of IT Services, and the resulting expected benefits to us, would be adversely impacted by a material delay, or a failure, in achieving the satisfaction (or waiver, if applicable) of the closing conditions for the transaction or otherwise in consummating the transaction. |

----

----

----

|                                       |
|---------------------------------------|
|                                       |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| Period*                               | Total number ofshares purchased |   | Average pricepaid per share |   | Total number ofshares purchasedas part of publiclyannounced  plansor programs (1) |   | Maximum approximatedollar value of sharesthat may yet bepurchased under theplans or programs (1) |
| Month No. 1                      |   |   |   |   |   |   |   |
| (October 1, 2016-October 28, 2016)    |   |   |   |   |   |   |   |
| Repurchase Programs (1)               | — |  |   | — |  |   | — |  |   | $ | 584,053,878 |  |
| Employee Transactions (2)             | 8,097 |  |   | $ | 90.85 |  |   | — |  |   | — |  |
| Month No. 2                      |   |   |   |   |   |   |   |
| (October 29, 2016-November 25, 2016)  |   |   |   |   |   |   |   |
| Repurchase Programs (1)               | — |  |   | $ | — |  |   | — |  |   | $ | 584,053,878 |  |
| Employee Transactions (2)             | 10,746 |  |   | $ | 97.32 |  |   | — |  |   | — |  |
| Month No. 3                      |   |   |   |   |   |   |   |
| (November 26, 2016-December 30, 2016) |   |   |   |   |   |   |   |
| Repurchase Programs (1)               | — |  |   | — |  |   | — |  |   | $ | 584,053,878 |  |
| Employee Transactions (2)             | 6,625 |  |   | $ | 104.27 |  |   | — |  |   | — |  |
| Total                                 | 25,468 |  |   | $ | 97.07 |  |   | — |  |   | $ | 584,053,878 |  |
|                                  |   |   |   |   |   |   |   |   |

|        |                                      |
|--------|--------------------------------------|
| *  | Periods represent our fiscal months. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (1) | On August 26, 2013, we announced that on August 23, 2013, our Board of Directors approved a new share repurchase program (our “2013 Repurchase Program”) authorizing us to repurchase up to $1 billion in shares of our common stock through open-market transactions, private transactions, transactions structured through investment banking institutions or any combination thereof. As of December 30, 2016, $584,053,878 (as reflected in the table above) was the approximate dollar amount of our common stock that may yet be purchased under our 2013 Repurchase Program, which does not have a stated expiration date. On February 2, 2017, we announced that on January 26, 2017, our Board of Directors approved a new share repurchase program (our “2017 Repurchase Program”) authorizing us to repurchase up to $1 billion in shares of our common stock through open-market purchases, private transactions, transactions structured through investment banking institutions or any combination thereof. Our 2017 Repurchase Program is in addition to our 2013 Repurchase Program and also does not have a stated expiration date. The level of our repurchases depends on a number of factors, including our financial condition, capital requirements, cash flows, results of operations, future business prospects and other factors our Board of Directors may deem relevant. The timing, volume and nature of repurchases are subject to market conditions, applicable securities laws and other factors and are at our discretion and may be suspended or discontinued at any time. |

|     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) | Represents a combination of (a) shares of our common stock delivered to us in satisfaction of the tax withholding obligation of holders of performance units, restricted stock units or restricted shares that vested during the quarter or (b) performance units, restricted stock units or restricted shares returned to us upon retirement or employment termination of employees. Our equity incentive plans provide that the value of shares delivered to us to pay the exercise price of options or to cover tax withholding obligations shall be the closing price of our common stock on the date the relevant transaction occurs. |

----

|           |
|-----------|
|           |  |  |  |
| (3        | ) |    | (a) Restated Certificate of Incorporation of Harris Corporation (1995), as amended, incorporated herein by reference to Exhibit 3(a) to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2012. (Commission File Number 1-3863) |
|      |    | (b) By-Laws of Harris Corporation, as amended and restated effective December 5, 2014, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 8, 2014. (Commission File Number 1-3863) |
| (10       | ) |    | *(a) Harris Corporation 2015 Equity Incentive Plan Non-Employee Director Restricted Share Award Agreement Terms and Conditions (As of December 4, 2015). |
|      |   | *(b) Amendment Number Two to the Harris Corporation 2005 Supplemental Executive Retirement Plan (as Amended and Restated effective November 28, 2011), dated December 16, 2016. |
|      |    | *(c) Amendment Number Six to the Harris Corporation Retirement Plan (as Amended and Restated effective January 1, 2016), effective November 1, 2016 and dated December 16, 2016. |
|      |    | *(d) Amendment Number Seven to the Harris Corporation Retirement Plan (as Amended and Restated effective January 1, 2016), effective January 1, 2017 and dated December 16. 2016. |
|      |   | *(e) Amendment to the Exelis Excess Pension Plan IA (as Amended and Restated as of October 31, 2011), dated December 16, 2016. |
|      |   | *(f) Amendment to the Exelis Excess Pension Plan IIA (as Amended and Restated as of October 31, 2011), dated December 16, 2016. |
|      |   | *(g) Amendment to the Exelis Excess Pension Plan IB (as Amended and Restated as of October 31, 2011), dated December 16, 2016. |
|      |   | *(h) Amendment to the Exelis Pension Plan IIB (as Amended and Restated as of October 31, 2011), dated December 16, 2016. |
|      |   | *(i) Amendment to the Exelis Salaried Retirement Plan (as Amended and Restated effective January 1, 2014), dated December 16, 2016. |
| (12       | ) |    | Computation of Ratio of Earnings to Fixed Charges. |
| (15       | ) |    | Letter Regarding Unaudited Interim Financial Information. |
| (31.1     | ) |    | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. |
| (31.2     | ) |    | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. |
| (32.1     | ) |    | Section 1350 Certification of Chief Executive Officer. |
| (32.2     | ) |    | Section 1350 Certification of Chief Financial Officer. |
| (101.INS) |  |    | XBRL Instance Document. |
| (101.SCH) |  |    | XBRL Taxonomy Extension Schema Document. |
| (101.CAL) |  |    | XBRL Taxonomy Extension Calculation Linkbase Document. |
| (101.LAB) |  |    | XBRL Taxonomy Extension Label Linkbase Document. |
| (101.PRE) |  |    | XBRL Taxonomy Extension Presentation Linkbase Document. |
| (101.DEF) |  |    | XBRL Taxonomy Extension Definition Linkbase Document. |
|      |   |   |

|   |                                                         |
|---|---------------------------------------------------------|
| * | Management contract or compensatory plan or arrangement |

----

|                        |
|------------------------|
|                        |  |  |  |  |  |  |
|                   |   |   |   |   |   |   |
|                   |   |   |   | HARRIS CORPORATION |
|                   |   |   |   | (Registrant) |
|                   |   |   |   |
| Date: February 3, 2017 |   |   |   | By: |   | /s/ Rahul Ghai |
|                   |   |   |   |   |   | Rahul Ghai |
|                   |   |   |   |   |   | Senior Vice President and Chief Financial Officer |
|                   |   |   |   |   |   | (principal financial officer and duly authorized officer) |

----

|                                                   |
|---------------------------------------------------|
|                                                   |  |  |
| Exhibit No.Under Reg. S-K,Item 601 |    | Description |
| (3)                                               |    | (a) Restated Certificate of Incorporation of Harris Corporation (1995), as amended, incorporated herein by reference to Exhibit 3(a) to the Company’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 28, 2012. (Commission File Number 1-3863) (b) By-Laws of Harris Corporation, as amended and restated effective December 5, 2014, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 8, 2014. (Commission File Number 1-3863) |
| (10)                                              |    | *(a) Harris Corporation 2015 Equity Incentive Plan Non-Employee Director Restricted Share Award Agreement Terms and Conditions (As of December 4, 2015). |
|                                              |   | *(b) Amendment Number Two to the Harris Corporation 2005 Supplemental Executive Retirement Plan (as Amended and Restated effective November 28, 2011), dated December 16, 2016. |
|                                              |   | *(c) Amendment Number Six to the Harris Corporation Retirement Plan (as Amended and Restated effective January 1, 2016), effective November 1, 2016 and dated December 16, 2016. |
|                                              |   | *(d) Amendment Number Seven to the Harris Corporation Retirement Plan (as Amended and Restated effective January 1, 2016), effective January 1, 2017 and dated December 16. 2016. |
|                                              |   | *(e) Amendment to the Exelis Excess Pension Plan IA (as Amended and Restated as of October 31, 2011), dated December 16, 2016. |
|                                              |   | *(f) Amendment to the Exelis Excess Pension Plan IIA (as Amended and Restated as of October 31, 2011), dated December 16, 2016. |
|                                              |   | *(g) Amendment to the Exelis Excess Pension Plan IB (as Amended and Restated as of October 31, 2011), dated December 16, 2016. |
|                                              |   | *(h) Amendment to the Exelis Pension Plan IIB (as Amended and Restated as of October 31, 2011), dated December 16, 2016. |
|                                              |   | *(i) Amendment to the Exelis Salaried Retirement Plan (as Amended and Restated effective January 1, 2014), dated December 16, 2016. |
| (12)                                              |    | Computation of Ratio of Earnings to Fixed Charges. |
| (15)                                              |    | Letter Regarding Unaudited Interim Financial Information. |
| (31.1)                                            |    | Rule 13a-14(a)/15d-14(a) Certification of Chief Executive Officer. |
| (31.2)                                            |    | Rule 13a-14(a)/15d-14(a) Certification of Chief Financial Officer. |
| (32.1)                                            |    | Section 1350 Certification of Chief Executive Officer. |
| (32.2)                                            |    | Section 1350 Certification of Chief Financial Officer. |
| (101.INS)                                         |    | XBRL Instance Document. |
| (101.SCH)                                         |    | XBRL Taxonomy Extension Schema Document. |
| (101.CAL)                                         |    | XBRL Taxonomy Extension Calculation Linkbase Document. |
| (101.LAB)                                         |    | XBRL Taxonomy Extension Label Linkbase Document. |
| (101.PRE)                                         |    | XBRL Taxonomy Extension Presentation Linkbase Document. |
| (101.DEF)                                         |    | XBRL Taxonomy Extension Definition Linkbase Document. |
|                                              |   |   |

|   |                                                         |
|---|---------------------------------------------------------|
| * | Management contract or compensatory plan or arrangement |