L-3 Communications (NYSE:LLL) announced today that it has completed its internal review of the Aerospace Systems segment (“Internal Review”) originally disclosed on July 31, 2014. The Company also filed its Quarterly Report on Form 10-Q for the second quarter ended June 27, 2014, as well as amendments to revise its previously issued financial statements in its Quarterly Report on Form 10-Q for the first quarter ended March 28, 2014 and its Annual Report on Form 10-K for the year ended December 31, 2013.

“We have completed a comprehensive internal review of our Aerospace Systems segment,” said Michael T. Strianese, L-3’s chairman, president and chief executive officer. “L-3 is committed to the integrity of its financial statements and to maintaining the highest ethical standards. Throughout the review, our employees demonstrated an unwavering commitment to our customers and contract performance. I appreciate their continued focus and dedication.”

The Company recorded aggregate pre-tax income charges related to the Internal Review of approximately $169 million, including a reduction in net sales of $58 million. The periods impacted are as follows: (i) $55 million for the three months ended June 27, 2014, including a reduction in net sales of $7 million, (ii) $20 million for the three months ended March 28, 2014, including a reduction in net sales of $8 million, and (iii) $94 million for periods prior to 2014, including a reduction in net sales of $43 million. The adjustments related to the Internal Review only affected the Logistics Solutions and Platform Systems sectors of the Aerospace Systems segment. The Internal Review adjustments attributable to the Logistics Solutions sector are approximately $117 million, including overstated net sales of $37 million, due to: (i) losses of $69 million, including inappropriately deferred cost overruns and $32 million of overstated net sales on a fixed-price Army maintenance and logistics support contract, and (ii) accounting errors of $48 million, including $5 million of overstated net sales, in connection with the valuation of inventories and unbilled contract receivables on other logistics support contracts. The Internal Review adjustments attributable to the Platform Systems sector are approximately $52 million, including overstated net sales of $21 million, primarily due to (i) losses of $37 million on two aircraft modification contracts and two contracts for rotary wing sub-assemblies and parts, and (ii) write-offs of deferred costs of $15 million to design and test aerostructures for a new commercial aircraft. Additional information relating to the Internal Review is included in Note 3 to the condensed consolidated financial statements in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 27, 2014.

Unrelated to the Internal Review, the financial statement revisions also corrected the accounting for a sales-type lease transaction in the Electronic Systems segment that began in 2004 and ends in 2023 for flight simulators, which increased pre-tax income by $28 million, primarily for interest income, for periods prior to 2014.

Headquartered in New York City, L-3 employs approximately 48,000 people worldwide and is a prime contractor in aerospace systems and national security solutions. L-3 is also a leading provider of a broad range of communication and electronic systems and products used on military and commercial platforms. The company reported 2013 sales of $12.6 billion.

To learn more about L-3, please visit the company’s website at www.L-3com.com. L-3 uses its website as a channel of distribution of material company information. Financial and other material information regarding L-3 is routinely posted on the company’s website and is readily accessible.

Forward-Looking Statements

Certain of the matters discussed in this news release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than historical facts, may be forward-looking statements, such as “may,” “will,” “should,” “likely,” “projects,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” and similar expressions are used to identify forward-looking statements. The Company cautions investors that these statements are subject to risks and uncertainties many of which are difficult to predict and generally beyond the Company’s control that could cause actual results to differ materially from those expressed in, or implied or projected by, the forward-looking information and statements. Some of the factors that could cause actual results to differ include, but are not limited to, the following: the effect, if any, of the results of the Internal Review on our customer relationships, financial condition, results of operations and internal controls over financial reporting; our dependence on the defense industry; backlog processing and program slips resulting from delayed funding of the Department of Defense (DoD) budget; U.S. Government failure to raise the debt ceiling; our reliance on contracts with a limited number of customers and the possibility of termination of government contracts by unilateral government action or for failure to perform; the extensive legal and regulatory requirements surrounding many of our contracts; our ability to retain our existing business and related contracts; our ability to successfully compete for and win new business; or, identify, acquire and integrate additional businesses; our ability to maintain and improve our operating margin; the availability of government funding and changes in customer requirements for our products and services; our significant amount of debt and the restrictions contained in our debt agreements; our ability to continue to recruit, retain and train our employees; actual future interest rates, volatility and other assumptions used in the determination of pension benefits and equity based compensation, as well as the market performance of benefit plan assets; our collective bargaining agreements, our ability to successfully negotiate contracts with labor unions and our ability to favorably resolve labor disputes should they arise; the business, economic and political conditions in the markets in which we operate; global economic uncertainty; the DoD’s in-sourcing and efficiency initiatives; events beyond our control such as acts of terrorism; our ability to perform contracts on schedule; our international operations; our extensive use of fixed-price type contracts; the rapid change of technology and high level of competition in which our businesses participate; our introduction of new products into commercial markets or our investments in civil and commercial products or companies; the outcome of litigation matters; results of audits by U.S. Government agencies and of on-going governmental investigations; the impact on our business of improper conduct by our employees, agents or business partners; ultimate resolution of contingent matters, claims and investigations relating to acquired businesses, and the impact on the final purchase price allocations; and the fair values of our assets.

Our forward-looking statements speak only as of the date of this news release or as of the date they were made, and we undertake no obligation to update forward-looking statements. For a more detailed discussion of these factors, also see the information under the captions “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our amendment to our Annual Report on Form 10-K for the year ended December 31, 2013 and in our quarterly report on Form 10-Q for the quarter ended June 27, 2014 and any material updates to these factors contained in any of our future filings.