CFA Institute Challenge December 5, 2018 Anshooman Aga Executive - PowerPoint PPT Presentation

CFA Institute Challenge December 5, 2018 Anshooman Aga Executive Vice President and Chief Financial Officer

2 Safe Harbor & Disclosures This presentation contains statements that relate to future events and expectations and as such constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements about our expectations, beliefs, plans, objectives, assumptions or future events or our future financial and/or operating performance are not historical and may be forward- looking. These statements are often, but not always, made through the use of words or phrases such as “may,” “will,” “anticipate,” “estimate,” “plan,” “project,” “continuing,” “ongoing,” “expect,” “believe,” “intend,” “predict,” “potential,” “opportunity” and similar words or phrases or the negatives of these words or phrases. These statements involve estimates, assumptions and uncertainties, including those discussed in “Risk Factors” in the Company’s annual report on Form 10-K for the year ended September 30, 2018, that could cause actual results to differ materially from those expressed in these statements. Because the risk factors referred to above could cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking statements. Further, any forward-looking statement speaks only as of the date on which it is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. This presentation also includes non-GAAP financial measures as that term is defined in Regulation G. Non-GAAP financial measures supplement our GAAP disclosures and should not be considered an alternative to the GAAP measure. Reconciliations to the most directly comparable GAAP financial measures can be found in the Appendix to this presentation. Cubic has not provided a reconciliation of forward-looking financial measures such as Adjusted EBITDA to the most directly comparable financial measures prepared in accordance with GAAP because Cubic is unable to quantify certain amounts that would be required to be included in the GAAP measures without unreasonable efforts, and Cubic believes such reconciliations would imply a degree of precision that would be confusing or misleading to investors.

Company Overview

4 Our Common Mission and Technologies Cubic is a technology-driven, market-leading global provider of innovative, mission-critical solutions that reduce congestion and increase operational readiness and effectiveness through increased situational understanding. Cyber Management Secure Network Algorithms / Data Visualization Instrumentation Cloud Computing Communications Simulation Power Management

Cubic at a Glance: Our Segments 5 Transportation Systems Mission Solutions Defense Training Industry-leading integrator of payment Networked C4ISR solutions for defense, Innovative and realistic training solutions and information solutions and related intelligence, security and commercial for the United States and allied forces in $ in millions services for intelligent travel applications missions more than 35 nations Sales Sales $671 $207 $325 Adj. EBITDA Adj. EBITDA $73 ( 10.9%) $26 ( 12.7%) $26 ( 8.1%) (margin) 1 (margin) 1 • Urbanization • Insatiable appetite for • Complex threat ~16% ~16% ~10% ~10% $10b $16b+ $3b Full Motion Video ~3% ~3% • Reduce congestion • Refocus on training Market tailwinds Market tailwinds market market CAGR 2 CAGR 2 market CAGR 2 CAGR 2 CAGR 2 CAGR 2 • Complex threat and readiness • Reduce collection cost • Size, Weight and Power • Home base training advantage C2ISR 3 Virtual 12% Training 14% Air Breakdown Breakdown Products Training Services 43% Secure 32% Protected 57% Networking Ground Communications 26% Training 62% 54% Source: Company information; Note: percentages based on FY2018 sales; C4ISR = Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance 1 EBITDA and EBITDA Margin are non-GAAP financial measures. Reconciliations to the most directly comparable GAAP financial measurers can be found in the Appendix to this presentation; 2 2018-2021 CAGR; 3 C2ISR = Command and Control, Intelligence, Surveillance and Reconnaissance

Robust Revenue and Earnings Growth Supported by 6 Significant Backlog and Recent Wins  Record backlog - $4.1b or >3x sales (as of Q4 ’18); grew 60%+ YoY  Substantial pipeline of outstanding bid proposals awaiting award or to be submitted  Won all major urban transit contracts in the last 12 months  Leverage $1.8b of recent w ins into ~$2b of potential follow -on business BUILDING BUILDING BUILDING NEXTCITY NEXTMISSION NEXTTRAINING GLOBALLY GLOBALLY GLOBALLY  SLATE ATD 1 air combat large force  Mobile launches  GATR contract vehicle ceiling doubled to ~$1b exercise flights  San Francisco Bay Area  5gTI for USA command post  Instrumented-Tactical Engagement  New York upgrade Simulation System 2  Sydney ICMP 1  FIRSTNET  ACMI / JSF 1  Brisbane  Canada Urban Operations Training  Boston System Source: Company information; Note: financials based on FY2018 sales 1 ICMP = intelligent congestion management program, SLATE ATD = Secure LVC Advanced Training Environment Advanced Technology Demonstration; ACMI / JSF = Air Combat Maneuvering Instrumentation / Joint Strike Fighter

Strong Mix of Recurring Services Revenues Combined with 7 Deeply Entrenched Customer Relationships Diverse, Global Blue-Chip Customer Base Significant services revenue exposure Transportation Services Products 41% 59%  Investments in Mobile Suite, NextBus 2.0 and Delerrok expand Cubic’s solutions, offering growing services revenue from next Defense generation fare collection systems  Trafficware acquisition brings both predictable and growing recurring revenue streams through software-oriented focus and maintenance subscriptions  ~10 year average lifecycle of transportation revenue management systems, providing long-term recurring sales visibility Our comprehensive suite of new technologies and capabilities enables us Long standing relationships and track record of delivering to benefit from a recurring stream of revenues in established markets top quality solutions across a diversified global customer base Source: Company information; Percentages based on FY2018 sales

Transformative Innovations to Advance Strategic 8 Priorities Transportation Transportation Systems  Transformative Innovations to Advance Strategic Priorities Advanced Customer Operations & Analytics OneAccount Experience • NextBus 2.0 • Account based ticketing • • Intelligent gateline Next-Gen intelligent • Advanced mobile • Assisted service congestion • Cloud based solutions kiosk management C4ISR Protected Joint Aerial Cognitive ISR as a Communications Networking C2/ISR Service Defense Training  Performance-based training solutions  Live, Virtual, Constructive and Gaming (LVC-G) training Living One Cubic  IRAD focused on winning IdeaSpark – Ideation Scalable SAP technologies and collaboration  platform (all data in Culture of innovation and platform collaboration one place) C2ISR = Command and Control, Intelligence, Surveillance and Reconnaissance; C4ISR = Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance

9 Recent Acquisitions Transportation Systems Transportation Systems Trafficware - Suite of solutions that optimize the flow of M&A Evaluation Criteria vehicle and pedestrian traffic Serco - Traffic management systems for controlling urban 1 and interurban road networks Aligned with strategy NextBus - Real-time passenger information Mission Solutions Mission Solutions 2 Potential market-leading position Shield - Autonomous aircraft systems for ISR 1 services Beatty 2 - Secure, cloud operating systems technology 3 MotionDSP - Real-time video enhancement / analytics Technology-driven Vocality - Optimizes communication paths and consolidates DTECH supply chain 4 GATR - Inflatable, ultra-portable satellite communications Returns > risk adj. WACC antenna TeraLogics – Full motion video platform 5 DTECH - Ruggedized modular cloud-computing Cash EPS accretive year 2 Defense Training Defense Training Deltenna - Wireless tactical comms. infrastructure Intific - Software and game-based solutions 1 ISR = Intelligence, Surveillance and Reconnaissance; 2 Minority investment with purchase options

10 Trafficware Acquisition Expands Cubic’s Leadership Position in Next-Generation Intelligent Transportation Solutions  Fully integrated, innovative suite of software, Internet of Things (IoT) and hardware solutions that optimize the flow of vehicle and pedestrian traffic  Provides smart infrastructure to smart cars  Cubic and Trafficware to offer compelling solutions to greatly improve situational awareness and reduce congestion  Advances Operations & Analytics pillar of NextCity