Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) Investor Presentation March 2012 NASDAQ: KTOS 1

Kratos Defense & Security Solutions, Inc. (NASDAQ: KTOS) Investor Presentation March 2012 NASDAQ: KTOS 1

Notice 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. Such statements include statements regarding our customers, programs, products, services, and financial projections. 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 may be impacted by risks and uncertainties including, but not limited to changes in the scope or timing of our projects; 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 statements regarding our intended uses of the proceeds of offered securities. For a further discussion of risks and uncertainties that could cause actual results to differ from those expressed in these forwardlooking 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 25, 2011, and in subsequent reports on Forms 10-Q and 8-K and other filings made with the SEC by Kratos. NASDAQ: KTOS 2

Kratos Investment Thesis Growing National Security solutions provider focused on National Security Priority areas; C4ISR, Unmanned Systems, Cyber Security, Satellite Communications and Electronic Warfare $50 - $65M, or $1.50 - $2.00 in Adjusted Free Cash Flow generation per KTOS share in 2012. Kratos generated $27M in Adjusted Operating Cash Flow second half of 2011 ~$260M in Net Operation Loss carry forwards primarily from previously discontinued/ sold businesses which expire in 2030 Pro Forma Adjusted LTM EBITDA FY11 including all closed acquisitions ~$123M Forecast 2012 Adjusted EBITDA of $120 - $130M, Revenues of $950M - $1B Backlog ~$1.1B, Bid & Proposal pipeline ~$3.7B Long term National Security programs and contracts provide a predictable business model Very high barriers to entry NASDAQ: KTOS 3

Kratos Kratos Defense & Security Solutions (NASDAQ: KTOS): Kratos is a Technology Based National Security Company providing specialized Products, Solutions and Services for mission critical United States National Security priorities Primary customers are National Security agencies Headquartered in San Diego, CA Engineering and Technical workforce of ~4,100 Significant number of Kratos work force hold an active National Security clearance, including Secret, Top Secret and Higher Experienced Management Team which has previously built a large National Security business and delivered significant shareholder value NASDAQ: KTOS 4

Kratos Defense & Security Solutions Stated Strategy WE ARE BUILDING A TECHNOLOGY BASED BUSINESS THAT MANUFACTURES AND DELIVERS VERY SPECIALIZED PRODUCTS AND SOLUTIONS FOR MISSION CRITICAL NATIONAL SECURITY PRIORITY AREAS: SATELLITE COMMUNICATIONS UNMANNED SYSTEMS INTELLIGENCE SURVEILLANCE AND RECONNAISSANCE ELECTRONIC WARFARE AND ELECTRONIC ATTACK BALLISTIC MISSILE DEFENSE AND TACTICAL MISSILE SYSTEMS CYBER WARFARE STRATEGIC ASSET SURVEILLANCE, RECONNAISSANCE & SECURITY SYSTEMS NASDAQ: KTOS 5

Kratos Strategic Differentiators Significant amount of Kratos work is Sole or Single source Majority of the work Kratos performs has Limited Competition Vast majority of Kratos work generated from Single Award Contract Vehicles Very High Barriers To Entry for the majority of what we do technology, tooling, IP, designed-in, customer relationships Substantially all of Kratos work is performed in a Secure Location or Secure Manufacturing Facility, on a Military Base, or at a Critical Infrastructure or Strategic Asset Site NASDAQ: KTOS 6

Kratos Satellite Communications, Command, Control, Signal Monitoring & Cyber Warfare Kratos is a leading provider of: Satellite Command and Control Systems Signal Processing Products and Systems Radio Frequency Interference (RFI) Detection and Protection Systems (space based cyber attacks) SATCOM Data Link Information Assurance and Cyber Security Geo Location of Signal Interference and Signal Intercept Sources (space based cyber attacks) Unmanned Aerial Vehicle Communications Link Assurance Unmanned Aerial Systems Flight and Ground RFI Detection and Countermeasures (EW/EA & cyber attacks) Specialized Products and Solutions for Classified Programs Classified Increasing Number of UAVs and Intelligence, Surveillance and Reconnaissance Requirements Driving Satellite Bandwidth Demand NASDAQ: KTOS 7

Kratos UAVs and ISR Requirements are Driving Rapid Satellite Bandwidth Growth Maintaining, Sustaining and Protecting ~85% of U.S. Satellite Systems Today GEO-Satellite MEO-Satellite LEO-Satellite Classified Command & Control Systems Spectrum Monitoring Frequency Monitoring Airborne Telemetry Simulators Interference Detection Terrestrial Network Management Systems Rapid Attack Identification Detection & Reporting System (RAIDRS) Flight Operations Geolocation Command & Control Systems Consolidated (CCS-C) Equipment Monitoring & Control (M&C) Detect & Locate Interfering Signals (Geolocation) Satellite Signal Monitoring Remote Site Management Terrestrial Signal Monitoring Fly Away Terminals Telemetry Processing Products Solid State Power Amplifiers (SSPAs) EPOCH Command & Control NASDAQ: KTOS 8 MONICS Satellite Monitoring SATCOM Terminals

Kratos Unmanned Aerial Systems Products, Solutions and Services MQ-12 Sky Warrior Gorgon Stare RQ-7 Shadow Classified Reaper Predator Intelligence, Surveillance & Sensors Flight Control System Electronics Reconnaissance Products Air Vehicle Transport Specialized Ground Support Command & Control System Directed Energy & Equipment C2 Electronics Electronic Weapons Multiple UAV Program Support Weaponization of UAVs Defensive Systems UAV Avionics NASDAQ: KTOS 9

Kratos Electronic Warfare, Electronic Attack, Intelligence, Surveillance, Reconnaissance Products EA-18G Growler P8a- Poseidon Classified Rivet Joint E-2 C/D Hawkeye Power Amplifiers SSPAs Integrated Microwave Assemblies Wave Glide Products Antenna Arrays EW & EA Test Equipment Digital RF Memory Products (DRFM) Classified Products EW/EA Software Aerostat ISR Platform Products Suppression of Enemy Air Defense (SEAD) Destruction of Enemy Air Defense (DEAD) Systems Systems NASDAQ: KTOS 10

Kratos Tactical & Ballistic Missile Defense Products Trident IRON DOME ARAV AMRAAM THAAD Patriot Radar Systems Missile Seekers SSPAs Command & Control Systems IMAs Target Control Systems BMD Targets Support Equipment Classified Equipment Test Equipment NASDAQ: KTOS 11

Kratos Cyber Security, Cyber Warfare, Cyber Protection Products and Services Network Intrusion Detection Products, Solutions and Services Continuous System/Network Monitoring Products and Services Satellite Communications Network Security and Information Assurance Unmanned Aerial Systems Communications Information Assurance Classified Communications Network Cyber Warfare Products, Solutions and Services Classified NASDAQ: KTOS 12

Kratos Strategic Asset Surveillance, Reconnaissance and Security Systems Homeland Security, Critical Infrastructure Protection and Public Safety Asymmetrical or terrorist threats and non conventional aggression against the United States is increasing at a significant rate Customers are primarily non federal government agencies. Primary business is designing, engineering, deploying, integrating and operating command, control, security, intelligence, surveillance and reconnaissance systems for Homeland Security CYBER SECURITY OPPORTUNITIES GROWING RAPIDLY FOR CRITICAL INFRASTRUCTURE NASDAQ: KTOS 13

Kratos Strategic Asset Surveillance, Reconnaissance and Security Systems Representative Customers: Classified Locations Port of Long Beach Kennedy Airport AMTRAK Nuclear Power Plant New York MTA Subway Asymmetric Threats to Critical Infrastructure are Rapidly Increasing NASDAQ: KTOS 14

Kratos Satellite Communications, Command, Control, Signal Monitoring, Interference/Cyber Detection & Protection Programs Growth Opportunities: Advanced Extremely High Frequency (AEHF) Satellite Program A four satellite constellation that has ~10 times greater operating capability than the current Military Strategic and Tactical Relay (MILSTAR) constellation, which provides secure communications to U.S. Armed Forces The Wideband Global Satcom System (WGS) Currently has three satellites in orbit, with six more scheduled to launch. The WGS system supports war fighting information exchange, enabling C4ISR, battle management and combat support Space Based Infrared System High (SBIRS-High) A four satellite constellation that utilizes Highly Elliptical Orbit (HEO) sensors and Geosynchronous Earth Orbit (GEO) satellites The Enhanced Polar System (EPS) Protected Extremely High Frequency (EHF) satellite communications in the North Pole region Demand for satellite communications bandwidth growing rapidly, due to ISR requirements, unmanned systems, applications that use full-motion video and high-resolution images U.S Strategic Command (STRATCOM): Satellite jamming threat growing SPACED BASED CYBER ATTACKS INCREASING NASDAQ: KTOS 15

The plan calls for 30% increase in the U.S. fleet of armed unmanned aircraft in the coming years It also foresees the deployment of more special-operations teams at a growing number of small lily pad bases across the globe where they can mentor local allies and launch missions. According to a Congressional Research Service report on unmanned aerial systems (UAS), unmanned aircraft are facing a future where air-to-air combat could become increasingly common. The report, published on Jan. 3, says that although to date UAS have focused on ground targets, there is a separate class of UAS that is being designed from the ground up to carry out combat missions. That separate class of UAS which have greater speed, payload, stealth and are designed to carry air-to-air weapons are called unmanned combat air vehicles (UCAVs), the report says.. NASDAQ: KTOS 16

Kratos Intelligence, Surveillance, Reconnaissance & Electronic Warfare Programs Growth Opportunities: Surface Electronic Warfare Improvement Program (SEWIP) Navy program to replace all legacy electronic warfare systems with a new surface electronic warfare capability for all ship classes Air and Missile Defense Radar Program (AMDR) New S-Band and X-Band air and missile defense radar system Next Generation Jammer (NGJ) New jamming system to blind enemy radars, disrupt communications, cyber attacks NASDAQ: KTOS 17

Kratos Ballistic Missile Defense Programs Growth Opportunities: Inside the Navy, June 20, 2011 Navy Aims for 94 AEGIS BMD Capable Ships by 2024.. Missile Defense Agency Aegis Ashore is The Planned Future Land-Based Component of the Ballistic Missile Defense System (BMDS). Aegis Ashore Leverages the Proven, Present and Future Aegis BMD Capabilities.. Army Technology.Com The U.S. Army is Expected to Acquire 80 to 99 Terminal High-Altitude Area Defense (THAAD) Launchers, 18 Ground-Based Radars and a Total of 1,422 THAAD Missiles.. Kratos AEGIS Readiness Assessment Vehicle (ARAV) NASDAQ: KTOS 18

Kratos Cyber Security/Cyber Warfare Growth Opportunities: China World s Biggest Cyber Thief: U.S. Intel Bloomberg Industrial Cyber war, China and Russia Using Cyber Spies to Steal U.S. Secrets Homeland Security News Wire 80% of U.S. Small Businesses Have No Cyber Security Policies In Place Homeland Security Newswire DoD reports Stunning Spike in Espionage Targeting U.S. Military Technology Inside the Pentagon Cyber attacks on critical infrastructure increasing Space based cyber attacks increasing Cyber Warfare Market estimated at ~$15.9B in 2012 NASDAQ: KTOS 19

Kratos Strategic Asset Surveillance, Reconnaissance and Security Systems Growth Opportunities: Visual surveillance security predicted to grow at 16% annually* Critical asset access control predicted to grow at 7% annually* Homeland Security warns about potential threats to utilities (CNN.com) Satellite spending expected to sky rocket in public safety sector (Satellite Today Insider) Public safety market expected to generate CAGR of 9.3% from 2015 to 2020 (Wireless Broadband in Public Safety Report) Cyber protection and security of United States critical infrastructure growing rapidly *Global Security Pipeline NASDAQ: KTOS 20

Kratos Diverse Revenue Base with Low Concentration Kratos enjoys a highly diverse base of contracts with no one contract representing more than 3% of revenues Kratos contract recompete win rate is 90% - 95% Vast majority of Kratos contract wins are Single Award Q4 2011 Contract Mix Q4 2011 Sales By Customer T&M 9.5% Cost Plus 13.9% Fixed Price 76.6% Commercial & Other 8% Foreign 10% Air Force 25% Other Govt 18% Navy 18% Army 21% NASDAQ: KTOS 21

Kratos Summary Financial Information Fourth Quarter 2011 Revenues $218.2M - Increased EBITDA EBITDA $27.0M EBITDA Rate 12.4% Second Half of 2011 Cash $27.2M* Flow From Operations Backlog ~$1.1B - Strong Cash Flow From Operations - Single Award Contracts - No MAC or GWACs Included In Backlog or B&P Pipeline Without Funded Task Orders Bid & Proposal Pipeline ~$3.7B *Excludes acquisition expenses NASDAQ: KTOS 22

Kratos Summary Financial Information Actual Forecast 2009 2010 2011 2012 Revenue $334.5M $408.5M $723.1M $950M - $1B GAAP EBITDA* $24.7M $39.7M $91.8M $120M - $130M EBITDA Rate 7.4% 9.7% 12.7% 12.0% - 13.7% Pro Forma Adjusted $49M $54M $123M $120M - $130M LTM EBITDA** *GAAP EBITDA includes impact of acquisitions from date of acquisition and forward **Reflecting all closed acquisitions as if acquired 1/1/2011 and excluding the impact of non-recurring expenses in accordance with Company s Bond Indenture Agreement NASDAQ: KTOS 23

Kratos Summary Financial Information Year-End 2011 Senior Notes Cash Net Debt Net Leverage* ~$625M ~$70M ~$563M ~4.6x Senior Notes due in 2017, consistent with stated strategy No maintenance covenants on Senior Notes $90M undrawn LOC 2012 Estimate Annual Capital Expenditures ~$10-$14M Annual Cash Paid For Interest Expenses Annual Cash Paid For Income Taxes ~$62M ~$6M-$7M *Utilizing Pro Forma Adjusted EBITDA in accordance with Bond Indenture Agreement and excluding issuance premium on debt Strong FCF is delevering Balance Sheet ~$260 million of Net Operating Losses significantly reduces cash paid for income taxes, NOLs expire in 2030 Kratos shares outstanding ~32.5 million NASDAQ: KTOS 24

Kratos What We See Strategically The world will continue to be dangerous and unstable Advanced missile development in Iran and North Korea Emergence of China as a global military power Remilitarization of Russia Continued and increasing Asymmetric Warfare Threats; Africa, Mid-East, South America Increasing Terrorist and Homeland Security threats Cyber security, cyber warfare, internet attacks and cyber espionage exploding National Security will remain solidly funded! NASDAQ: KTOS 25

Kratos What We See Strategically Intelligence, Surveillance and Reconnaissance and Unmanned Systems will be in greater demand in the future as these are true Force Multipliers and provide Information Dominance The number of Unmanned Aerial, Land, Surface and Undersea Systems will continue to grow exponentially for cost and war fighter safety concerns Electronic Warfare/Electronic Attack importance rapidly increasing Satellite based communications will see increased demand as a result of the increasing number of UAVs and ISR platforms that require high bandwidth, high speed space based communications infrastructure and utilization, i.e., Live Streaming Video, Command & Control, etc. Asymmetric or Terrorist threats will continue to increase, driving demand for greater Homeland Security, Critical Infrastructure Security and Public Safety in the United States Cyber Warfare and Cyber Security threats will increase at an exponential rate NASDAQ: KTOS 26

New Defense Strategy Boosts Investments in Select Capabilities The United States new defense strategy aims to trim conventional military forces while increasing investments in a handful of areas such as intelligence, surveillance and reconnaissance capabilities, unmanned systems, space programs, cyberspace capabilities, and platforms that project U.S. forces rapidly around the world, officials said this week. President Barack Obama told Pentagon reporters that the new strategy which he called for last year, is designed to recalibrate the armed forces... NASDAQ: KTOS 27

Kratos Investment Summary Clearly stated strategy We are building a Technology Based National Security business focused on Mission Critical National Security Priority Areas Kratos is well positioned Strategically and Programmatically for the current DoD Environment Large Backlog and Bid & Proposal Pipeline leads to a predictable business model Strong FCF generation estimated for 2012 ~$1.50 - $2.00 per KTOS share, rapidly delevering, increasing Equity Value One turn in multiple expansion of EBITDA equates to approximately $4.00 per share increased equity value Proven Management Team NASDAQ: KTOS 28