#1DEFENSE & SECURITY SOLUTIONS Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) Investor Brief February 2017 KROTOS FROM STRENGTH TO SUCCESS NASDAQ: KTOS 1#2#3Investment Summary ▪ Kratos is a United States Defense and National Security Company KROTOS FROM STRENGTH TO SUCCESS ▪ Kratos Primary Products and Offerings are High Performance Unmanned Aerial Systems, Satellite Communication Equipment, Microwave Electronics and Cyber Security Solutions ▪ Kratos Provides Platforms and Systems Where Kratos Owns the Intellectual Property NASDAQ: KTOS 3 DEFENSE & SECURITY SOLUTIONS#4Investment Summary Recapitalization of U.S. Strategic Systems Underway U.S. Defense Industry Environment Improving ▪ John McCain Calls for $430B DoD Increase Over 5 Years ▪ President Trump's "Make Our Military Strong Again" Plan, Calls for End to Sequester, Increased U.S. Defense Spending KROTOS FROM STRENGTH TO SUCCESS ▪ Kratos is Strategically Aligned with U.S. DoD Third Offset Strategy and Innovation Initiative, i.e., Rapidly Field Low Cost, Leading Technology Systems to the Warfighter NASDAQ: KTOS 4 DEFENSE & SECURITY SOLUTIONS#5#6Investment Summary ▪ Kratos' Core Businesses, i.e., Unmanned Systems, Satellite Communications, Microwave Electronics, are in Large, Well Funded and Growing Primary Markets, KROTOS FROM STRENGTH TO SUCCESS Strong Projected Future Growth Profile from Existing, “Under Contract" and "In-Production" Unmanned Drone System Programs, i.e., USAF AFSAT, USN SSAT, US Army Fire Jet, etc., and Confidential Program Significant Upside Potential From New Unmanned Combat Aerial System Contract Wins and Opportunities NASDAQ: KTOS 6 DEFENSE & SECURITY SOLUTIONS#7#8#9#10#11#12#13#14#15#16#17#18#19#20#21#22#23#24#25#26#27#28#29#30#31