What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-04-30 compared with 2023-10-31 · 90 added, 134 removed, 136 unchanged (62% of the section changed)

10 unchanged sentences

Unless indicated otherwise, references in this report to "we," "us" and "our" refer collectively to Leidos and its consolidated subsidiaries.

We are a FORTUNE 500 ® technology, engineering, and science company that provides services and solutions in the defense, intelligence, civil and health markets, both domestically and internationally.

We bring domain-specific capability and cross-market innovations to customers in each of these markets by leveraging five technical core competencies:

Leidos, a member of the Fortune 500®, is a dynamic innovation company that is at the forefront of addressing the world’s most challenging issues in national security and health sectors.

With a global workforce of approximately 47,000, Leidos is committed to developing smarter technology solutions, particularly for customers in highly regulated industries.

We bring domain-specific capability and cross-market innovations to customers in each of these markets by leveraging five technical core capabilities:

digital modernization, cyber operations, mission software systems, integrated systems and mission operations.

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Intelligence Community, the U.S.

Department of Homeland Security, the Federal Aviation Administration, the Department of Veterans Affairs and many other U.S.

Department of Homeland Security, the Federal Aviation Administration, the Department of Veterans Affairs, National Aeronautics and Space Administration and many other U.S.

civilian, state and local government agencies, foreign government agencies and commercial businesses.

We operate in three reportable segments:

Defense Solutions, Civil and Health.

Additionally, we separately present the unallocable costs associated with corporate functions as Corporate.

Beginning in fiscal 2024, we realigned our business and operate in four reportable segments that are focused on specific, defined capability sets we bring to our customers.

As a result of this change, prior year segment results and disclosures have been recast to reflect the current reportable segment structure.

We now operate in the following reportable segments:

National Security and Digital, Health & Civil, Commercial & International and Defense Systems.

We also separately present the unallocable costs associated with corporate functions as Corporate (see "Note 10–Business Segments").

Business Environment and Trends

Government Markets

During the three and nine months ended September 29, 2023, we generated approximately 87% and 86%, respectively, of total revenues from contracts with the U.S.

government, as compared to 87% during both of the three and nine months ended September 30, 2022.

During both of the three months ended March 29, 2024, and March 31, 2023, we generated approximately 87% of total revenues from contracts with the U.S.

Accordingly, our business performance is affected by the overall level of U.S.

government spending, especially on national security, homeland security and intelligence, and the alignment of our service and product offerings and capabilities with current and future budget priorities of the U.S.

On September 30, 2023, Congress avoided a federal government shutdown by passing a continuing resolution ("CR") that provides government funding until November 17, 2023.

The CR gives lawmakers more time to consider the 12 appropriations bills for government fiscal year (“GFY”) 2024 and organize new leadership of the House of Representatives.

The House has passed the State and Foreign Operations, Defense, Military Construction and Homeland Security Appropriations bills.

For GFY 2024, the total federal discretionary spending request is $1.59 trillion with $886 billion for defense spending and $703 billion for non-defense discretionary spending programs.

The Senate is also working on a government funding bill that will provide aid to Ukraine since such funding was not included in the CR.

Failure to pass the appropriations bills or another CR by November 17, 2023, will result in a partial or complete federal government shutdown.

Congress avoided a government shutdown by passing two appropriations packages.

The first package passed on March 8, 2024, included Agriculture-FDA, Energy-Water, Military Construction-VA, Transportation-HUD, Interior-Environment and Commerce-Justice-Science funding bills.

The second package passed on March 23, 2024, included Defense, Financial Services, Homeland Security, Labor-HHS-Education, Legislative Branch, and State-Foreign Operations funding bills.

In addition, the $7.3 trillion President’s budget was released on March 11, 2024, which is a 4.7% increase over the current budget and seeks to boost defense spending by 1% and non-defense discretionary spending by 2.4%.

The spending complies with caps that House Republicans pushed in last year's Fiscal Responsibility Act in exchange for raising the debt limit.

Congress will now focus on the government fiscal year ("GFY") 2025 appropriations bills before the GFY 2024 appropriations bills expire at the end of September 2024.

LEIDOS HOLDINGS, INC.

International Markets

Sales to customers in international markets represented approximately 9% of total revenues for both the three and nine months ended September 29, 2023, as compared to 8% of total revenues for both the three and nine months ended September 30, 2022.

Sales to customers in international markets represented approximately 8% of total revenues for both of the three months ended March 29, 2024, and March 31, 2023.

Our international customers include foreign governments and their agencies.

Our international business increases our exposure to international markets and the associated international regulatory and geopolitical risks.

Changes in international trade policies, including higher tariffs on imported goods and materials, may increase our procurement costs of certain IT hardware used both on our contracts and for internal use.

Changes in international trade policies, including higher tariffs on imported goods and materials, may increase the procurement cost of certain IT hardware used both on our contracts and internally.

However, we expect to recover certain portions of these higher tariffs through our cost-plus contracts.

While we evaluate the impact of higher tariffs, currently, we do not expect tariffs to have a significant impact to our business.

We are currently evaluating the impact of higher tariffs, and do not expect the tariffs to have a significant impact to our business.

Results of Operations

The following table summarizes our condensed consolidated results of operations for the periods presented:

Three Months Ended Nine Months Ended

September 29,

2023 September 30,

2022 Dollar change Percent change September 29,

2023 September 30,

Three Months Ended

2024 March 31,

2023 Dollar change Percent change

1 unchanged sentence

Revenues $ 3,975 $ 3,699 $ 276 7.5 %

Operating (loss) income (336) 281 (617) (219.6) % 260 823 (563) (68.4) %

Operating income 415 265 150 56.6 %

Non-operating expense, net

(47) (58) 11 (19.0) %

(Loss) income before income taxes

Income before income taxes

368 207 161 77.8 %

1 unchanged sentence

(85) (43) (42) 97.7 %

Net (loss) income $ (396) $ 164 $ (560) (341.5) % $ (22) $ 513 $ (535) (104.3) %

Net (loss) income attributable to Leidos common stockholders

Net income $ 283 $ 164 $ 119 72.6 %

Net income attributable to Leidos common stockholders

$ 284 $ 162 $ 122 75.3 %

1 unchanged sentence

Segment and Corporate Results

Three Months Ended Nine Months Ended

Defense Solutions September 29,

2023 September 30,

2022 Dollar change Percent change September 29,

2023 September 30,

Three Months Ended

National Security and Digital March 29,

2024 March 31,

2023 Dollar change Percent change

3 unchanged sentences

Operating margin 9.8 % 8.3 %

The increase in revenues for the three months ended September 29, 2023, as compared to the three months ended September 30, 2022, was primarily attributable to programs wins, a net increase in volumes on certain programs and a $28 million increase in revenues related to our Cobham Special Mission acquisition made in the last quarter of fiscal 2022.

The increase was partially offset by the completion of certain contracts.

The increase in revenues for the nine months ended September 29, 2023, as compared to the nine months ended September 30, 2022, was primarily attributable to a net increase in volumes on certain programs, programs wins, an increase in net write-ups on certain programs and a $86 million increase in revenues related to our Cobham Special Mission acquisition made in the last quarter of fiscal 2022.

The increase was partially offset by the completion of certain contracts and a $29 million unfavorable impact from exchange rate movements.

The increase in revenues for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to a net increase in volumes on certain programs and program wins, partially offset by the completion of certain contracts.

The increase in operating income for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to a net increase in volumes on certain programs, partially offset by the completion of certain contracts.

Three Months Ended

Health & Civil March 29,

2024 March 31,

2023 Dollar change Percent change

(dollars in millions)

Revenues $ 1,199 $ 1,008 $ 191 18.9 %

Operating income 222 113 109 96.5 %

Operating margin 18.5 % 11.2 %

The increase in revenues for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to higher volumes in the managed health services business, ramp up on certain programs and program wins.

LEIDOS HOLDINGS, INC.

The increase in operating income for the three months ended September 29, 2023, as compared to the three months ended September 30, 2022, was primarily attributable to a net increase in volumes on certain programs and program wins, partially offset by the completion of certain contracts.

The increase in operating income for the nine months ended September 29, 2023, as compared to the nine months ended September 30, 2022, was primarily attributable to a net increase in volumes on certain programs, program wins, partially offset by the completion of certain contracts.

Three Months Ended Nine Months Ended

Civil September 29,

2023 September 30,

2022 Dollar change Percent change September 29,

2023 September 30,

The increase in operating income for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily driven by a net increase in volumes and favorable business mix in the managed health services business.

Three Months Ended

Commercial & International March 29,

2024 March 31,

2023 Dollar change Percent change

1 unchanged sentence

Revenues $ 509 $ 489 $ 20 4.1 %

Operating (loss) income (607) 79 (686) NM (503) 160 (663) NM

Operating income 34 13 21 161.5 %

Operating margin 6.7 % 2.7 %

NM - not meaningful

The increase in revenues for the three and nine months ended September 29, 2023, as compared to the three and nine months ended September 30, 2022, were primarily attributable to a net increase in volumes and product mix on certain programs.

The decrease in operating income for the three months ended September 29, 2023, as compared to the three months ended September 30, 2022, were primarily driven by impairment charges of $679 million and restructuring charges of $9 million.

The decrease in operating income for the nine months ended September 29, 2023, as compared to the nine months ended September 30, 2022, were primarily driven by impairment charges of $679 million, restructuring charges of $10 million and a net decrease in volumes and product mix on certain programs.

The decrease was partially offset by $19 million in legal reserves and fees resulting from an adverse arbitration ruling related to the 2016 acquisition of the Information Systems & Global Solutions business from Lockheed Martin in the prior year periods and the performance of an equity method investment.

Three Months Ended Nine Months Ended

Health September 29,

2023 September 30,

2022 Dollar change Percent change September 29,

2023 September 30,

The increase in revenues and operating income for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to a net increase in volumes driven by commercial product mix and improved cost control, partially offset by the completion of certain contracts.

Three Months Ended

Defense Systems March 29,

2024 March 31,

2023 Dollar change Percent change

3 unchanged sentences

Operating margin 4.4 % 5.2 %

The increase in revenues for the three months ended September 29, 2023, as compared to the three months ended September 30, 2022, was primarily attributable to a net increase in volumes, program wins, write-ups for

incentive awards and recovery of prior expenditures in the medical examination business.

The increase in revenues for the nine months ended September 29, 2023, as compared to the nine months ended September 30, 2022, was primarily attributable to a net increase in program volumes, program wins and write-ups for incentive awards in the medical examination business.

The increase was partially offset by the completion of certain contracts.

The increase in operating income for the three months ended September 29, 2023, as compared to the three months ended September 30, 2022, was primarily attributable to program wins, write-ups for

incentive awards and recovery of prior expenditures in the medical examination business.

The increase in operating income for the nine months ended September 29, 2023, as compared to the nine months ended September 30, 2022, was primarily attributable to write-ups for incentive awards in the medical examination business and program wins.

LEIDOS HOLDINGS, INC.

Three Months Ended Nine Months Ended

Corporate September 29,

2023 September 30,

2022 Dollar change Percent change September 29,

2023 September 30,

The increase in revenues for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to an increase in volumes on certain programs and program wins.

The decrease in operating income for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to changes in program mix, partially offset by program wins.

Three Months Ended

Corporate March 29,

2024 March 31,

2023 Dollar change Percent change

1 unchanged sentence

Operating loss $ (37) $ (29) $ (8) 27.6 %

The increase in operating loss for the nine months ended September 29, 2023, as compared to the nine months ended September 30, 2022, was primarily attributable to increased administrative costs and transaction fees in connection with the issuance of the senior unsecured notes and Credit Agreement entered into during the first quarter of fiscal 2023, see "Note 6–Debt" for further information.

The increase was partially offset by the impact of foreign payroll tax reserves.

The increase in operating loss for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to increased general and administrative expenses.

Non-Operating Expense, net

Non-operating expense, net for the three months ended September 29, 2023, was $52 million as compared to $60 million for the three months ended September 30, 2022.

The decrease was primarily due to a net unrealized loss in our foreign currency forward contract related to the Cobham Special Mission acquisition as a result of unfavorable exchange rate movements in the prior year, partially offset by higher net interest expense driven by increased interest rates and refinancing activities.

Non-operating expense, net for the nine months ended September 29, 2023, was $167 million as compared to $155 million for the nine months ended September 30, 2022.

The increase was primarily due to higher net interest expense driven by increased interest rates and refinancing activities, partially offset by a net unrealized loss in our foreign currency forward contract related to the Cobham Special Mission acquisition as a result of unfavorable exchange rate movements in the prior year.

Non-operating expense, net for the three months ended March 29, 2024, was $47 million as compared to $58 million for the three months ended March 31, 2023.

The decrease was primarily due to increased interest income on higher cash balances and favorable exchange rate movements.

Provision for Income Taxes

For the three months ended September 29, 2023, our effective tax rate was (2.1)% compared to 25.8% for the three months ended September 30, 2022.

The decrease to the effective tax rate was primarily due to the tax impacts of non-deductible goodwill impairments.

For the nine months ended September 29, 2023, our effective tax rate was 123.7% compared to 23.2% for the nine months ended September 30, 2022.

The increase to the effective tax rate was primarily due to the tax impacts of non-deductible goodwill impairments.

Beginning in 2022, the Tax Cuts and Jobs Act of 2017 ("TCJA") eliminated the option to currently deduct certain research and development costs for tax purposes and requires taxpayers to capitalize and amortize research costs over five years.

The actual impact will depend on the amount of research and development costs the Company will incur, whether Congress modifies or repeals this provision and whether new guidance and interpretive rules are issued by the U.S.

Treasury, among other factors.

For the three months ended March 29, 2024, our effective tax rate was 23.1% compared to 20.8% for the three months ended March 31, 2023.

The increase to the effective tax rate was primarily due to an increase in unrecognized tax benefits and a reduced benefit in federal research tax credits, partially offset by an increase in excess tax benefits related to employee stock-based payment transactions.

In December 2021, the Organization for Economic Cooperation and Development enacted model rules for a new 15% global minimum tax framework (“Pillar Two”).

Many governments around the world have enacted or are in the process of enacting Pillar Two legislation.

The Pillar Two legislation is effective for certain jurisdictions beginning in fiscal 2024.

We will continue to evaluate the potential impact of the rules as additional legislation gets enacted but currently do not expect them to have a material impact.

LEIDOS HOLDINGS, INC.

Bookings and Backlog

We recorded net bookings worth an estimated $7.9 billion and $13.8 billion during the three and nine months ended September 29, 2023, as compared to $4.1 billion and $11.6 billion for the three and nine months ended September 30, 2022.

We recorded net bookings worth an estimated $3.7 billion during the three months ended March 29, 2024, as compared to $3.0 billion for the three months ended March 31, 2023.

The estimated value of our total backlog was as follows:

September 29, 2023 September 30, 2022

March 29, 2024 March 31, 2023

Segment Funded Unfunded Total Funded Unfunded Total

(in millions)

Defense Solutions $ 4,994 $ 14,568 $ 19,562 $ 4,178 $ 13,842 $ 18,020

Civil 2,297 9,602 11,899 2,037 8,652 10,689

Health 1,756 4,826 6,582 1,214 5,105 6,319

National Security and Digital $ 2,411 $ 15,144 $ 17,555 $ 2,984 $ 13,030 $ 16,014

Health & Civil 1,953 8,767 10,720 1,740 9,572 11,312

Commercial & International 2,465 2,071 4,536 2,537 1,317 3,854

Defense Systems 1,136 2,624 3,760 1,042 2,864 3,906

Total $ 7,965 $ 28,606 $ 36,571 $ 8,303 $ 26,783 $ 35,086

Total backlog as of September 29, 2023, as compared to September 30, 2022, included $610 million of backlog acquired through a business combination in our Defense Solutions reportable segment.

Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts, both funded and unfunded.

2 unchanged sentences

Liquidity and Capital Resources

As of September 29, 2023, we had $750 million in cash and cash equivalents.

In March 2023, we entered into a senior unsecured revolving credit facility which can provide up to $1 billion in additional borrowing, if required.

This new credit facility replaced the previous senior unsecured revolving credit facility.

As of September 29, 2023, there were no borrowings outstanding under the revolving credit facility.

We had outstanding debt of $4.7 billion and $4.9 billion at September 29, 2023, and December 30, 2022, respectively.

In February 2023, we entered into $750 million 5.75% fixed-rate senior notes.

The annual interest rate is payable on a semi-annual basis.

In March 2023, we entered into a Credit Agreement with certain financial institutions, which provided for a senior unsecured term loan facility in an aggregate principal amount of $1.0 billion (the “Term Loan Facility”).

The proceeds of the Term Loan Facility and cash on hand were used to repay in full all indebtedness, terminate all commitments and discharge all existing guarantees related to the $1.9 billion senior unsecured term loan facility and $750 million senior unsecured revolving facility, due January 2025.

As of September 29, 2023, borrowings under our Credit Agreement were based on a Term Secured Overnight Financing Rate (“SOFR”) with a 0.10% Term SOFR adjustment and an applicable margin range from 1.00% to 1.50%.

At September 29, 2023, the applicable margin for SOFR-denominated borrowings was 1.25%.

As of March 29, 2024, we had $633 million in cash and cash equivalents.

We have a senior unsecured revolving credit facility which can provide up to $1 billion in additional borrowing, if required.

As of March 29, 2024, and December 29, 2023, there were no borrowings outstanding under the revolving credit facility.

We had outstanding debt of $4.7 billion at both March 29, 2024, and December 29, 2023.

We have a commercial paper program in which we may issue short-term unsecured commercial paper notes ("Commercial Paper Notes") and have maturities of up to 397 days from the date of issuance.

On May 26, 2023, we increased the size of the commercial paper program by $250 million, or not to exceed $1.0 billion.

As of September 29, 2023, we did not have any Commercial Paper Notes outstanding.

We made principal payments, excluding the impacts of our Commercial Paper Notes, on our debt of $5 million and $2,041 million during the three and nine months ended September 29, 2023, respectively, and $25 million and $459 million during the three and nine months ended September 30, 2022, respectively.

The activity for the nine months ended September 29, 2023, included a $1,210 million payment to discharge the existing Term Loan Facility, a $498 million payment to discharge the $500 million 2.95% notes, due May 2023, and a principal repayment of $320 million to discharge the 364-day term loan credit agreement, as compared to $452 million required principal payments on our Term Loan Facility for the nine months ended September 30, 2022.

LEIDOS HOLDINGS, INC.

Our credit facilities, commercial paper notes, senior unsecured term loans and notes outstanding as of September 29, 2023, contain financial covenants and customary restrictive covenants.

We were in compliance with all covenants as of September 29, 2023.

We paid dividends of $50 million and $150 million during the three and nine months ended September 29, 2023, respectively, and $49 million and $149 million during the three and nine months ended September 30, 2022, respectively.

As of March 29, 2024, and December 29, 2023, we did not have any Commercial Paper Notes outstanding.

We made principal payments, excluding the impacts of our Commercial Paper Notes, on our debt of $4 million and $1,711 million during the three months ended March 29, 2024, and March 31, 2023, respectively.

The activity for the three months ended March 31, 2023, included a $1,210 million payment to discharge the $1.9 billion 5.77% senior unsecured term loan facility and a $498 million payment to discharge the $500 million 2.95% notes, due May 2023.

Our credit facilities, commercial paper notes and senior unsecured notes outstanding as of March 29, 2024, contain financial covenants and customary restrictive covenants.

We were in compliance with all covenants as of March 29, 2024.

We paid dividends of $53 million and $50 million during the three months ended March 29, 2024, and March 31, 2023, respectively.

Stock repurchases of Leidos common stock may be made on the open market or in privately negotiated transactions with third parties including through accelerated share repurchase agreements.

1 unchanged sentence

The repurchase program may be accelerated, suspended, delayed or discontinued at any time.

During the nine months ended September 29, 2023, we made open market repurchases of our common stock for aggregate purchase price of $25 million.

No share repurchases were made during the three months ended September 29, 2023.

Beginning in 2022, a provision in the TCJA which eliminated the option to currently deduct research and development costs for tax purposes and requires taxpayers to capitalize and amortize the costs over five years became effective.

We anticipate our tax cash payments to increase by approximately $270 million in 2023, primarily to cover both the 2022 and 2023 tax obligations related to this provision.

The actual impact will depend on the amount of research and development costs the Company incurs, whether Congress modifies or repeals this provision and whether new guidance and interpretive rules are issued by the U.S.

Treasury, among other factors.

During the three months ended March 29, 2024, and March 31, 2023, we made open market repurchases of our common stock for aggregate purchase price of $150 million and $25 million, respectively.

LEIDOS HOLDINGS, INC.

For the next 12 months, we anticipate that we will be able to meet our liquidity needs, including servicing our debt, through cash generated from operations, available cash balances, borrowings from our commercial paper program and, if needed, sales of accounts receivable and borrowings from our revolving credit facility.

1 unchanged sentence

The following table summarizes cash flow information for the periods presented:

Three Months Ended Nine Months Ended

September 29,

2023 September 30,

2022 September 29,

2023 September 30,

Three Months Ended

2024 March 31,

(in millions)

Net cash provided by operating activities (1)

$ 795 $ 729 $ 861 $ 867

Net cash provided by (used in) operating activities

Net cash used in investing activities (12) (39)

Net cash used in financing activities

(249) (217) (470) (730)

(1) Net cash provided by operating activities during the three and nine months ended September 30, 2022, were recast to present the effect of foreign exchange rate changes on cash, cash equivalents and restricted cash as a separate line in the condensed consolidated statements of cash flows.

Net cash provided by operating activities increased $66 million during the three months ended September 29, 2023, when compared to the prior year quarter.

The changes were primarily due to favorable timing of customer advance payments and vendor payments, partially offset by higher tax payments.

Net cash provided by operating activities decreased $6 million during the nine months ended September 29, 2023, when compared to the prior year.

The changes were primarily due to higher tax payments of $189 million, mainly in connection to the TCJA provision and a $62 million payment for payroll taxes related to the CARES Act, partially offset with strong collections on trade accounts receivable, favorable timing of customer advance payments and vendor payments.

LEIDOS HOLDINGS, INC.

Net cash used in investing activities increased $26 million for the three months ended September 29, 2023, when compared to the prior year quarter primarily due to higher capital expenditures of $23 million.

Net cash used in investing activities increased $80 million for the nine months ended September 29, 2023, when compared to the prior year.

The changes were primarily due to higher capital expenditures of $53 million and $15 million of proceeds received from the sale of Aviation & Missile Solutions LLC in the prior year.

Net cash used in financing activities increased $32 million for the three months ended September 29, 2023, when compared to the prior year quarter primarily due to a $30 million increase in net payments from debt activities.

Net cash used in financing activities decreased $260 million for the nine months ended September 29, 2023, when compared to the prior year primarily due to a net decrease of $488 million in stock repurchases driven by the accelerated share repurchase activities in the prior year and an increase of $1.4 billion in proceeds received from the issuance of debt in the current year, partially offset by an increase of $1.6 billion in payments of debt.

Net cash provided by operating activities increased $161 million during the three months ended March 29, 2024, when compared to the prior year quarter.

The increase was primarily due to lower tax payments of $133 million mainly in connection with the Tax Cuts and Jobs Act provision requiring capitalization of research and development costs and a nonrecurring $62 million payment for payroll taxes related to the CARES Act in the prior year quarter, partially offset by a net increase in working capital.

Net cash used in investing activities decreased $27 million for the three months ended March 29, 2024, when compared to the prior year quarter, primarily due to lower capital expenditures in the current year quarter.

Net cash used in financing activities increased $171 million for the three months ended March 29, 2024, when compared to the prior year quarter, primarily due to a net increase of $140 million in stock repurchases and a decrease of $29 million in net proceeds received from borrowings in connection with the issuance of debt in the prior year quarter.

Off-Balance Sheet Arrangements

12 unchanged sentences

$1,000 million 2.300% notes, due February 2031

$750 million 5.750% notes, due May 2033

$750 million 5.750% notes, due March 2033

Leidos Holdings, Inc.

16 unchanged sentences

Balance Sheet Information for the Guarantor and Issuer of Registered Notes

September 29,

2024 December 29,

11 unchanged sentences

Statement of Operations Information for the Guarantor and Issuer of Registered Notes

Nine Months Ended

September 29,

Three Months Ended

(in millions)

1 unchanged sentence

Operating income

Net loss attributable to Leidos common stockholders

Net income attributable to Leidos common stockholders

Contractual Obligations and Commitments

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis