Engility Reports Second Quarter 2013 Results

  Engility Reports Second Quarter 2013 Results

  *Second quarter revenue of $377 million and adjusted diluted EPS of $0.85
  *Adjusted operating margin increases to 8.6% from 8.3% in the prior quarter
  *Reiterates 2013 revenue and EPS guidance (now incorporates the anticipated
    impact from sequestration and adjusts for one-time charges)
  *Engility closes on new $450 million credit facility, lowering borrowing
    costs by nearly 50%

Business Wire

CHANTILLY, Va. -- August 12, 2013

Engility Holdings, Inc. (NYSE: EGL) today announced financial results for the
second quarter ended June 28, 2013.

Second Quarter 2013 Results

Total revenue for the second quarter of 2013 was $377 million and operating
income was $29 million. Adjusted operating income for the second quarter was
$33 million. Operating margin for the second quarter of 2013 was 7.8% and
adjusted operating margin for the same period was 8.6%. Net income
attributable to Engility was $13 million, or $0.74 per diluted share. Adjusted
net income was $15 million, or $0.85 per diluted share. Our adjusted numbers
exclude the impact of legal and settlement costs.  Information about
Engility’s use of non-GAAP financial information is provided below under
“Non-GAAP Measures”.

“I am pleased with our second quarter results as we continued to execute
effectively against our strategic plan. During the quarter, we won several
additional contract vehicles, achieved sequential revenue growth and delivered
strong bottom-line results,” said Tony Smeraglinolo, President and CEO of
Engility. “We also are expecting to realize increased cash flow beginning in
the second half of 2013 from the implementation of our recent cash collection
initiatives, as well as from the reduction in required principal payments and
lower borrowing costs that we secured in our new credit facility.”

“We continue to successfully execute on our customers’ mission priorities in a
cost effective manner. We have received feedback from certain of our customers
that the efficiencies created by our business model are allowing them to
complete their entire contract missions within their reduced budgets. We
remain excited by our pipeline of opportunities, broad portfolio of existing
contracts and our differentiated low-cost business model, all of which we
believe to be strategically important to market success in today’s budget
constrained environment. Despite these successes, sequestration and contract
award delays are beginning to impact our business.”

Key Performance Indicators

  *Funded backlog at the end of the 2013 second quarter was $649 million.
  *Contract funded orders in the second quarter of 2013 were $210 million,
    representing a book-to-bill ratio of 0.6.
  *Days sales outstanding, net of advanced payments, at the end of the 2013
    second quarter was 83 days.

New Credit Facility

  *On August 9, 2013, Engility entered into a new $450 million credit
    facility agreement, which replaced the Company’s prior $400 million
    facility. The new facility includes a $250 million revolving credit line
    and a $200 million term loan with a maturity date of August 9, 2018. The
    new credit facility also has an accordion feature that will allow the
    facility to be expanded by up to an additional $150 million.

Significant Second Quarter 2013 Awards

  *A prime position on a $900 million multiple-award IDIQ contract for new
    work to provide Decision Superiority Support services to the Space and
    Naval Warfare Systems Center (SSC) Atlantic, Charleston, SC. Under this
    five year contract, we will provide support services primarily associated
    with the full system of life cycle support for command, control,
    communication, computers, combat systems, intelligence, surveillance and
    reconnaissance (C5ISR).
  *A prime position on a $900 million multiple-award IDIQ contract for new
    work to provide Business and Force Support (BFS) services to the Space and
    Naval Warfare Systems Center (SSC) Atlantic, Charleston, SC. Under this
    five year contract, we will provide an array of support services to the
    BFS portfolio, including design, acquisition, production, integration,
    testing, installation, lifecycle support and configuration management of
    certified Command, Control, Communications, Computers, Combat Systems,
    Intelligence, Surveillance and Reconnaissance (C5ISR) capabilities.
  *A prime position on an $854 million multiple-award IDIQ contract for new
    work to support the U.S. Marine Corps Logistics Command, Albany, GA. Under
    this five year contract, we will provide experienced logisticians,
    trainers, and IT specialists, to perform/support supply chain services and
    logistics management globally. These efforts will contribute to the
    overall readiness and sustainability of the Corps and its ability to
    respond to emerging requirements.
  *A prime position on a $400 million multiple-award IDIQ contract for the
    U.S. Agency for International Development’s (USAID) Clean Energy contract
    for Critical Priority Countries (Afghanistan, Iraq, Pakistan, Sudan and
    Yemen). Under this five year contract, we will provide a range of key
    technical assistance activities, from energy sector reform (including
    legal, regulatory and corporate governance structures and mechanisms) to
    increasing human resource capacity related to energy services and
    fostering private sector participation and investment. This new work
    represents an expansion of the energy support services that our highly
    skilled team of professionals has been providing on USAID’s behalf for the
    past 34 years.
  *A prime position on a $68 million multiple-award IDIQ contract for new
    work to support Navy computer networks ashore under a contract with the
    Space and Naval Warfare Systems Center Pacific. Under this three year
    contract, we will provide contract sustainment services for the Navy
    Enterprise Network (ONE-Net) including project management; engineering;
    technical and integrated logistics support; configuration management;
    certification and accreditation; and enterprise applications.

Second Quarter 2013 Recognition

  *The Association for Corporate Growth’s National Capital Chapter presented
    Engility with its 2012 award for the Greatest Regional Impact Deal of the
    Year. This award is presented to the regional company that leads an equity
    or M&A transaction that is expected to have the greatest regional impact
    in the coming years. Selection criteria for this award include factors
    such as transaction value, job creation, industry impact, and national and
    international recognition.
  *In our first year of eligibility, Washington Technology magazine named
    Engility to its list of the Top 100 government contractors. We attribute
    this accomplishment to our employee’s relentless focus on the success of
    our customers’ missions.
  *Engility was recognized by the National Veteran Small Business Coalition
    for exceptional support to veteran and service-disabled veteran small
    businesses. We are proud that the work we have performed to mentor and to
    help small businesses win, staff and execute on government contracts has
    been acknowledged by such a well-respected organization.

2013 Outlook

We are reiterating the fiscal year 2013 financial guidance we issued on May
13, 2013 (adjusted for one-time charges) based on our financial results for
the first half of 2013 and our outlook for the remainder of 2013. However, our
guidance now includes the potential impact from the federal government’s
sequestration budget cuts. As a result, our 2013 financial results may be near
the low-end of our guidance ranges. In addition, our adjusted diluted EPS
guidance excludes $3.2 million of legal and settlement costs incurred in the
second quarter of 2013 and an estimated $3.7 million write-off of bank debt
fees in the third quarter of 2013 associated with our prior credit facility.
The table below summarizes our fiscal year 2013 guidance.

                          
                          2013 Fiscal Year Outlook
Revenue                    $1.45 billion to $1.55 billion
Adjusted Diluted EPS ^(1)   $3.25 - $3.55
GAAP Diluted EPS ^(1)       $3.01 - $3.31
Operating cash flow        $80 million to $100 million

       2013 GAAP and adjusted diluted EPS guidance assumes a weighted-average
^(1)  share count of approximately 17.75 million shares and a full year
       effective tax rate of 39.5%.
       

Non-GAAP Measures

The tables under “Engility Holdings, Inc., Reconciliation of Non-GAAP
Measures” present Adjusted Operating Income, Adjusted Operating Margin,
Earnings before Interest, Taxes, Depreciation, and Amortization (EBITDA),
Adjusted EBITDA, EBITDA Margin, Adjusted EBITDA Margin, Adjusted Net Income,
Adjusted Diluted EPS and Adjusted Diluted EPS Guidance, reconciled to their
most directly comparable GAAP measure. These financial measures are calculated
and presented on the basis of methodologies other than in accordance with U.S.
generally accepted accounting principles (“Non-GAAP Measures”). Engility has
provided these Non-GAAP Measures to adjust for the impact of (i)
transaction-related-spin-off costs for the Company’s July 2012 spin-off from
L-3 Communications Holdings, Inc. (ii) legal and settlement costs and (iii) in
the case of our Adjusted Diluted EPS Guidance, the write-off of bank debt fees
associated with our prior credit facility. These items have been adjusted
because they are not considered core to the Company’s business or otherwise
not considered operational or because these charges are non-cash or
non-recurring. The Company presents these Non-GAAP Measures because management
believes that they are meaningful to understanding Engility’s performance
during the periods presented and the Company’s ongoing business. Non-GAAP
Measures are not prepared in accordance with GAAP and therefore are not
necessarily comparable to the financial results of other companies. These
Non-GAAP Measures should be considered a supplement to, not a substitute for,
or superior to, the corresponding financial measures calculated in accordance
with GAAP.

CONFERENCE CALL INFORMATION

Engility will host a conference call at 5 P.M. ET on August 12, 2013, to
discuss the financial results for the second quarter of 2013.

Listeners may access a webcast of the live conference call from the Investor
Relations section of the company's website at http://www.EngilityCorp.com.
Listeners may also access a slide presentation on the website which summarizes
our 2013 second quarter results. Listeners should go to the website at least
15 minutes before the live event to download and install any necessary audio
software.

Listeners may also participate in the conference call by dialing (877)
546-5021 (domestic) or (857) 244-7553 (international) and entering pass code
33618715.

A replay will be available on the company's website approximately two hours
after the conference call and continuing for one year. A telephonic replay
also will be available through August 19, 2013 at (888) 286-8010 (domestic) or
(617) 801-6888 (international) and entering pass code 23034505.

ABOUT ENGILITY CORPORATION

Engility is a pure-play government services contractor providing highly
skilled personnel wherever, whenever they are needed in a cost-effective
manner. Headquartered in Chantilly, Virginia, Engility is a leading provider
of specialized technical consulting, program and business support services,
engineering and technology lifecycle support, information technology
modernization and sustainment, supply chain services and logistics management,
and training and education for the U.S. Government with approximately 7,800
employees worldwide and sales of $1.66 billion for 2012. To learn more about
Engility, please visit www.engilitycorp.com

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995, including statements
regarding Engility’s future prospects, projected financial results, business
plans, and our strategic realignment completed in the first quarter of 2013.
Words such as “may,” “will,” “should,” “likely,” “anticipates,” “expects,”
“intends,” “plans,” “projects,” “believes,” “estimates” and similar
expressions are also used to identify these forward-looking statements. These
statements are based on the current beliefs and expectations of Engility’s
management and are subject to significant risks and uncertainties. Actual
results may differ from those set forth in the forward-looking statements.
Factors that could cause Engility’s actual results to differ materially from
those described in the forward-looking statements can be found under the
heading “Risk Factors” in the Information Statement included in our Annual
Report on Form 10-K for the year ended December 31, 2012, and our more recent
periodic reports, which have been filed with the Securities and Exchange
Commission (SEC) and are available on the investor relations section of
Engility’s website (http://www.engilitycorp.com) and on the SEC’s website
(www.sec.gov). Forward-looking statements are made only as of the date hereof,
and we undertake no obligation to update or revise the forward-looking
statements, whether as a result of new information, future events or
otherwise, except as required by law. In addition, historical information
should not be considered as an indicator of future performance.


ENGILITY HOLDINGS, INC.
UNAUDITED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

                Three Months Ended                     Six Months Ended
                 June 28,   June 29,                   June 28,   June 29,    
                  2013       2012       Change         2013       2012       Change
Revenue          $ 377,332   $ 371,889     $ 5,443       $ 739,007   $ 755,129     $ (16,122  )
Revenue from
former            -          46,413      (46,413 )    -          95,147      (95,147  )
affiliated
entities
Total revenue      377,332     418,302       (40,970 )     739,007     850,276       (111,269 )
Costs and
expenses
Cost of            328,103     305,479       22,624        643,594     629,647       13,947
revenue
Cost of
revenue from
former            -          46,413      (46,413 )    -          95,147      (95,147  )
affiliated
entities
Total cost of      328,103     351,892       (23,789 )     643,594     724,794       (81,200  )
revenue
Selling,
general and       19,936     35,666      (15,730 )    36,233     68,893      (32,660  )
administrative
expenses
Total costs       348,039    387,558     (39,519 )    679,827    793,687     (113,860 )
and expenses
Operating          29,293      30,744        (1,451  )     59,180      56,589        2,591
income
Interest           5,757       97            5,660         11,541      194           11,347
expense, net
Other income,     44         (85     )    129         73         (45     )    118      
net
Income from
continuing
operations         23,580      30,562        (6,982  )     47,712      56,350        (8,638   )
before income
taxes
Provision for     9,292      12,817      (3,525  )    18,645     23,619      (4,974   )
income taxes
Income from
continuing         14,288      17,745        (3,457  )     29,067      32,731        (3,664   )
operations
                                                                                   
Loss from
discontinued
operations         -           (423    )     423           -           (548    )     548
before income
taxes
Benefit for       -          (177    )    177         -          (230    )    230      
income taxes
Loss from
discontinued      -          (246    )    246         -          (318    )    318      
operations
                                                                                   
Net income       $ 14,288    $ 17,499      $ (3,211  )   $ 29,067    $ 32,413      $ (3,346   )
Less: Net
income
attributable      1,226      2,501       (1,275  )    2,227      3,430       (1,203   )
to
noncontrolling
interest
Net income
attributable     $ 13,062    $ 14,998     $ (1,936  )   $ 26,840    $ 28,983     $ (2,143   )
to Engility
                                                                                   
Earnings per
share
allocable to
Engility
Holdings, Inc.
common
shareholders -
Basic
Net income per
share from
continuing
operations       $ 0.77      $ 0.95        $ (0.18   )   $ 1.60      $ 1.82        $ (0.22    )
less
noncontrolling
interest
Net income per
share from         --        $ (0.02   )     0.02          --        $ (0.02   )     0.02
discontinued
operations
Net income per
share            $ 0.77      $ 0.93        $ (0.16   )   $ 1.60      $ 1.80        $ (0.20    )
attributable
to Engility
                                                                                   
Earnings per
share
allocable to
Engility
Holdings, Inc.
common
shareholders -
Diluted
Net income per
share from
continuing
operations       $ 0.74      $ 0.95        $ (0.21   )   $ 1.53      $ 1.82        $ (0.29    )
less
noncontrolling
interest
Net income per
share from         --        $ (0.02   )     0.02          --        $ (0.02   )     0.02
discontinued
operations
Net income per
share            $ 0.74      $ 0.93        $ (0.19   )   $ 1.53      $ 1.80        $ (0.27    )
attributable
to Engility
                                                                                   
Weighted
average number
of shares
outstanding
Basic              16,870      16,118                      16,826      16,118
Diluted            17,625      16,118                      17,503      16,118
                                                                                   


ENGILITY HOLDINGS, INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in thousands)
                                                As of          As of
                                                 June 28,        December 31,
                                                  2013          2012      
Assets:
Current assets:
Cash and cash equivalents                        $ 47,220        $ 27,021
Receivables, net                                   365,063         366,236
Other current assets                              26,114        34,832    
Total current assets                               438,397         428,089
Property, plant and equipment, net                 9,599           11,941
Goodwill                                           477,604         477,604
Identifiable intangible assets, net                96,567          100,929
Other assets                                      5,921         8,887     
Total assets                                     $ 1,028,088    $ 1,027,450 
Liabilities and Equity:
Current liabilities:
Current portion of long-term debt                $ 50,250        $ 50,250
Accounts payable, trade                            27,781          20,725
Accrued employment costs                           57,196          63,278
Accrued expenses                                   65,924          76,955
Advance payments and billings in excess of         16,159          24,855
costs incurred
Deferred income taxes, current and income          9,472           10,607
taxes payable
Other current liabilities                         22,672        19,311    
Total current liabilities                          249,454         265,981
Long-term debt                                     272,188         284,750
Long term deferred income tax                      5,309           --
Income tax payable                                 62,405          68,725
Other liabilities                                 18,163        19,683    
Total liabilities                                  607,519         639,139
                                                                 
Equity:
Preferred stock, par value $0.01 per share,
25,000 shares authorized, none issued or           -               -
outstanding as of June 28, 2013 or December
31, 2012
Common stock, par value $0.01 per share,
175,000 shares authorized, 17,183 shares
issued and outstanding as of June 28, 2013 and     172             168
16,703 shares issued and outstanding as of
December 31, 2012
Additional paid in capital                         759,813         755,638
Accumulated deficit                                (353,598  )     (380,438  )
Noncontrolling interest                           14,182        12,943    
Total equity                                      420,569       388,311   
Total liabilities and equity                     $ 1,028,088    $ 1,027,450 
                                                                 


ENGILITY HOLDINGS, INC.
UNAUDITED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS
(in thousands)
                                                   
                                                     Six Months Ended
                                                     June 28,     June 29,
                                                      2013        2012    
Operating activities:
Net income                                           $ 29,067      $ 32,413
Less: loss from discontinued operations, net of       --          (318    )
tax
Income from continuing operations                      29,067        32,731
Share-based compensation                               4,440         --
Depreciation and amortization                          7,629         8,335
Amortization of bank debt fees                         1,757         --
Deferred income taxes                                  5,984         (12,091 )
Changes in operating assets and liabilities,
excluding acquired amounts:
Receivables                                            1,173         48,511
Other assets                                           8,505         (1,041  )
Accounts payable, trade                                7,056         (14,378 )
Accrued employment costs                               (6,082  )     (6,255  )
Accrued expenses                                       (11,031 )     (15,768 )
Advance payments and billings in excess of costs       (8,696  )     (128    )
incurred
Other liabilities                                     (4,867  )    (75     )
Net cash provided by operating activities from         34,935        39,841
continuing operations
Investing activities:
Capital expenditures                                  (911    )    (469    )
Net cash used in investing activities from             (911    )     (469    )
continuing operations
Financing activities:
Borrowings from revolving credit facility              14,500        --
Repayments of revolving credit facility                (14,500 )     --
Repayments of long-term debt                           (12,562 )     --
Net transfers from prior parent                        --            (41,490 )
Proceeds from share-based payment arrangements         772           --
Payment of employee withholding taxes on               (1,037  )     --
restricted stock units vesting
Distributions to non-controlling interest member      (998    )    (1,140  )
Net cash used in financing activities from             (13,825 )     (42,630 )
continuing operations
Discontinued Operations:
Net cash provided by operating activities              --            9,222
Net cash used in investing activities                  --            --
Net cash used in financing activities                  --            (9,222  )
Cash balance of discontinued operations               --          (22     )
Net cash used in discontinued operations              --          (22     )
Net change in cash and cash equivalents                20,199        (3,280  )
Cash and cash equivalents, beginning of period        27,021      13,710  
Cash and cash equivalents, end of period             $ 47,220     $ 10,430  
                                                                   


ENGILITY HOLDINGS, INC.
RECONCILIATION OF NON-GAAP MEASURES

The following tables set forth a reconciliation of each of these Non-GAAP
Measures to the most directly comparable GAAP measure for the periods presented
(in thousands, except for ratio and per share amounts).

Adjusted Operating Income and Adjusted Operating Margin
(in thousands)
                                                      
                               Three Months Ended        Six Months Ended
                               June 28,    June 29,     June 28,    June 29,
                               2013         2012         2013         2012
                                                                      
Operating income               $ 29,293     $ 30,744     $ 59,180     $ 56,589
                                                                      
Adjustments
Transaction-related-spin-off     --           7,300        --           13,300
costs
Legal and settlement costs      3,228      --         3,228      --     
Total adjustments               3,228      7,300      3,228      13,300 
                                                                      
Adjusted operating income      $ 32,521    $ 38,044    $ 62,408    $ 69,889 
                                                                      
Operating margin                 7.8    %     7.3    %     8.0    %     6.7    %
Adjusted operating margin        8.6    %     9.1    %     8.4    %     8.2    %


ENGILITY HOLDINGS, INC.
Adjusted Earnings Per Share
(in thousands, except per share data)


                   Three Months Ended             Six Months Ended
                     June 28,     June 29, 2012     June 28,    June 29,
                     2013                             2013          2012
                                                                             
Adjusted             $  32,521      $  38,044         $  62,408     $ 69,889
operating income
                                                                             
Other items
Interest                5,757          97                11,541       194
expense, net
Other income,          44            (85     )        73          (45    )
net
Adjusted income
from continuing
operations              26,808         37,862            50,940       69,650
before income
tax
                                                                             
Provision for          10,564        13,698          19,917      26,012 
income taxes
Adjusted income
from continuing         16,244         24,164            31,023       43,638
operations
                                                                             
Loss from
discontinued            -              (246    )         -            (318   )
operations
Net income
attributable to        1,226         2,501           2,227       3,430  
non-controlling
interest
Adjusted net
income
attributable to      $  15,018      $  21,417        $  28,796     $ 39,890 
Engility
Holdings, Inc.
                                                                             
                                                                             
GAAP earnings
per share
Net income
attributable to      $  13,062      $  14,998         $  26,840     $ 28,983
Engility
Holdings, Inc.
                                                                             
Earnings per
share
attributable to
Engility
Holdings, Inc.
common
shareholders
Basic                $  0.77        $  0.93           $  1.60       $ 1.80
Diluted              $  0.74        $  0.93           $  1.53       $ 1.80
                                                                             
Weighted average
common shares
outstanding
Basic                   16,870         16,118            16,826       16,118
Diluted                 17,625         16,118            17,503       16,118
                                                                             
Adjusted
earnings per
share
attributable to
Engility
Holdings, Inc.
common
shareholders
Basic                $  0.89        $  1.33           $  1.71       $ 2.47
Diluted              $  0.85        $  1.33           $  1.65       $ 2.47
                                                                             
Weighted average
number of shares
outstanding
Basic                   16,870         16,118            16,826       16,118
Diluted                 17,625         16,118            17,503       16,118
                                                                             


ENGILITY HOLDINGS, INC.
Earnings before interest, taxes, depreciation, and amortization (EBITDA) and Adjusted
EBITDA
(dollars in thousands)


                               Three Months Ended          Six Months Ended
                                 June 28,     June 29,       June 28,     June 29,
                                 2013           2012           2013           2012
                                                                              
Income from continuing           $ 14,288       $ 17,745       $ 29,067       $ 32,731
operations
                                                                              
Interest, taxes,
depreciation, and
amortization
Interest expense                   5,757          97             11,541         194
Provision for income taxes         9,292          12,817         18,645         23,619
Depreciation and                  4,236        4,150        7,629        8,335  
amortization
EBITDA                           $ 33,573      $ 34,809      $ 66,882      $ 64,879 
                                                                              
Adjustments to EBITDA
Transaction-related-spin-off       -              7,300          -              13,300
costs
Legal and settlement costs        3,228        -            3,228        -      
                                   3,228          7,300          3,228          13,300
                                                                           
Adjusted EBITDA                  $ 36,801      $ 42,109      $ 70,110      $ 78,179 
                                                                              
EBITDA Margin                      8.9    %       8.3    %       9.1    %       7.6    %
Adjusted EBITDA Margin             9.8    %       10.1   %       9.5    %       9.2    %
                                                                              


ENGILITY HOLDINGS, INC.
Revision to Costs and Expenses
(in thousands)


                 For the Three Month Period Ending        For the Six Month Period Ending
                   June 29, 2012                              June 29, 2012
                   Reported    Adjustment   Revised     Reported    Adjustment   Revised
Costs and                                                                         
expenses
Cost of            $ 307,674     $ (2,195 )     $ 305,479     $ 634,340     $ (4,693 )     $ 629,647
revenue
Cost of
revenue from        46,413     -           $ 46,413       95,147     -           $ 95,147
affiliated
entities
Total cost of        354,087       (2,195 )     $ 351,892       729,487       (4,693 )     $ 724,794
revenue
                                                                                           
Selling,
general and          33,471        2,195        $ 35,666        64,200        4,693        $ 68,893
administrative
expenses
Total costs         387,558    -           $ 387,558      793,687    -           $ 793,687
and expenses
Impact of the
revision on        $ -         $ -           $ -           $ -         $ -           $ -
cost and
expenses
                                                                                           


Note – As noted in our Form 10-K for the year ended December 31, 2012,
management determined that we improperly classified certain amounts in cost of
revenue that were selling, general and administrative in nature. We have
assessed the impact of the adjustments on the statements of operations and
determined that the period was not materially misstated. This change did not
impact the balance sheet or statements of cash flows. The three and six month
periods ended June 29, 2012 have been revised to reflect this correction.



ENGILITY HOLDINGS, INC.
Estimated Adjusted Diluted EPS Guidance
For the Year Ending December 31, 2013

                                                 
                                          Low-End   High-End
                                                      
Estimated GAAP Diluted EPS                $  3.01     $  3.31
                                                      
Known adjustments, net of tax
Legal and settlement costs                   0.11        0.11
Bank debt fees previously capitalized       0.13       0.13
                                            0.24       0.24
                                                     
Estimated Adjusted Diluted EPS            $  3.25     $  3.55
                                                      

Contact:

Engility Holdings, Inc.
Corporate Communications and Media:
Eric Ruff, 703-375-6463
eric.ruff@engilitycorp.com
or
Investor Relations:
Dave Spille, 703-375-4221
dave.spille@engilitycorp.com