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Engility Reports Second Quarter 2012 Financial Results

Engility Holdings, Inc. (NYSE: EGL), a global provider of technical and professional services for the U.S. Government, today announced financial results for the second quarter of fiscal year 2012, which ended June 29, 2012. During this period, Engility was a subsidiary of L-3 Communications Holdings, Inc. (NYSE: LLL).

Second Quarter 2012 Financial Results

For the three months ended June 29, 2012, total revenue was $433 million, compared to $568 million for the three months ended July 1, 2011. The change in revenue was primarily attributable to (i) reduced demand for services on the Company’s major contracts supporting military efforts in Afghanistan and Iraq, which resulted from the drawdown of U.S. military forces in these countries, (ii) reduced revenues from the Global Security Solutions (GSS) business unit, which was retained by L-3 upon completion of the spin-off, (iii) revenue reductions tied to organizational conflict of interest (OCI) constraints and (iv) other revenue reductions in our Professional Support Services segment.

Selling, general and administrative expenses for the three months ended June 29, 2012 were $36 million, or 8.4% of revenue, compared to $36 million, or 6.3% of revenue, for the three months ended July 1, 2011. Selling, general and administrative expenses for the three months ended June 29, 2012 include spin-off-related transaction costs of $7 million, offset by a reduction in other selling, general and administrative expenses during the same period.

Operating income for the three months ended June 29, 2012 was $30 million, compared to $51 million for the three months ended July 1, 2011. Operating margin for the three months ended June 29, 2012 was 7.0%, compared to 9.1% for the three months ended July 1, 2011. The decrease in operating income was primarily due to lower revenue volume and spin-off-related transaction costs, and to a lesser extent, selling, general and administrative expenses decreasing at a lesser rate than revenue. The decrease in operating margin was primarily due to a reduction in higher margin work related to our Professional Support Services segment, and to a lesser extent, an increase in selling, general and administrative expenses as a percentage of revenue.

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