#1DEFENSE & SECURITY SOLUTIONS Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) Investor Presentation January 2016 KROTOS FROM STRENGTH TO SUCCESS NASDAQ: KTOS 1#2Notice Regarding Forward-Looking Statements Certain statements in this presentation may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements include, without limitation, statements regarding our customers, programs, products, services, and financial projections. All statements other than statements of historical fact are statements that could be deemed forward-looking statements. These forward-looking statements are made on the basis of the current beliefs, expectations and assumptions of the management of Kratos and are subject to significant risks and uncertainty. Investors are cautioned not to place undue reliance on any such forward-looking statements. All such forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise these statements, whether as a result of new information, future events or otherwise. Our business, and the expectations reflected in these forward-looking statements, may be impacted by risks and uncertainties including, but not limited to, changes in the scope or timing of our projects; general economic conditions, changes or cutbacks in spending or the appropriation of funding by the federal government, including the U.S. Department of Defense, which could cause delays or cancellations of key government contracts; the timing, rescheduling or cancellation of significant customer contracts and agreements, or consolidation by or the loss of key customers; risks of adverse regulatory action or litigation; risks associated with debt leverage; failure to successfully consummate acquisitions or integrate acquired operations; competition in the marketplace, which could reduce revenues and profit margins; and risks related to security breaches, including cyber security attacks and threats or other significant disruptions to our information systems, facilities, and infrastructures. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forward-looking statements, as well as risks relating to the business of Kratos in general, see the risk disclosures in the Annual Report on Form 10- K of Kratos for the year ended December 28, 2014 and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos. This presentation is based on information that is generally available to the public and does not contain any material non-public information. NASDAQ: KTOS KROTOS FROM STRENGTH TO SUCCESS 2 DEFENSE & SECURITY SOLUTIONS#3Kratos - Overview Product and Intellectual Property Focused National Security Company Focused on Command, Control, Communications, Computing, Combat Systems, Intelligence, Surveillance & Reconnaissance (C5ISR) NASDAQ: KTOS KROTOS FROM STRENGTH TO SUCCESS 3 DEFENSE & SECURITY SOLUTIONS#4Kratos - Overview Unmanned Systems Microwave Electronics NASDAQ: KTOS Training Systems Satellite Communications Modular Systems was fo WEDNESDAY 30 Apr 06 PPM OR WIN AF01-204, BAFS SUP 1, PARKE Mälype: Cyber Cartoon Carter KROTOS FROM STRENGTH TO SUCCESS Public Safety T M 11.35 M DC 2445 DOOM M 22 413 pr 29 M3128AJONU Cyber Security Strategic Programs DEFENSE & SECURITY SOLUTIONS#5Kratos - Overview ▪Highly Diversified → No Single Contract Accounts for More Than ~5% of Kratos' Revenue Backlog of $1 Billion, Bid & Proposal Pipeline of ~$7 Billion KROTOS FROM STRENGTH TO SUCCESS - -Intellectual Property Ownership in Key Products -New Programs and Contract Vehicles Provide for Organic Growth Potential Over Next Several Years NASDAQ: KTOS ▪Major Corporate Initiative and Significant Discretionary Investments in Tactical Unmanned Systems Area 5 DEFENSE & SECURITY SOLUTIONS#6Kratos - Unmanned Aerial Target Drone Systems Approved for Public Release BQM-177 BQM-167 BQM-178 Kratos is the Leader in Development and Production of High Performance Unmanned Aerial Drone Target Systems KROTOS FROM STRENGTH TO SUCCESS Kratos' Target Drone Systems Represent the Most Advanced Threats of Our Adversaries Kratos' Products Operationally Test U.S. and Allies' Weapon Systems Major New UAS Program Expected to Begin Production 2016. Major Confidential Program Expected to Begin Production 2016 NASDAQ: KTOS 6 DEFENSE & SECURITY SOLUTIONS#7Kratos - Unmanned Vehicle Command & KROTOS Control Systems, Avionics & Electronics FROM STRENGTH TO SUCCESS KALTOS NASDAQ: KTOS 7 11.9. S DEFENSE & SECURITY SOLUTIONS#8Kratos-UCAS Solution Altitude NASDAQ: KTOS 50,000 feet 30,000 feet VARIOUS → UTAP-22 0.45 Mach 0.7 Mach Modified UCAS-167A / 8 Airspeed UTAP-22 Kratos UCAS Solution KROTOS FROM STRENGTH TO SUCCESS 1.0 Mach DEFENSE & SECURITY SOLUTIONS