Leidos Holdings (LDOS) 10-K risk factor changes: FY2022 vs FY2021

[removed: We generated approximately 87% of our] [added: Our] total revenues [removed: during fiscal 2021, 2020 and 2019] from contracts with the U.S. government (including all branches of the U.S. military), either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. [removed: government.][added: government generated approximately 86% in fiscal 2022, and 87% in fiscal 2021 and 2020.]

Our reputation and [removed: relationship] [added: relationships] with the U.S. government, particularly with the agencies of the DoD and the U.S. Intelligence Community, are key factors in maintaining and growing our [removed: revenues.][added: revenues, and enable us to provide informal input and advice to government entities and agencies prior to the development of a formal bid.]

[removed: Negative] [added: In addition, negative] publicity, including reports from the press or social media coverage, regardless of accuracy or completeness, and which could pertain to employee or subcontractor misconduct, conflicts of interest, poor contract performance, deficiencies in services, reports, products or other deliverables, [removed: information] security breaches or other [added: security incidents or other] aspects of our business, could harm our [removed: reputation, particularly] [added: reputation] with these [removed: agencies.][added: agencies and with certain non-U.S. customers.]

Revenues under contracts with the DoD and U.S. Intelligence Community, either as a prime contractor or subcontractor to other contractors, represented approximately 44% of our total revenues for fiscal [added: 2022 and] 2021, [removed: 49% of our total revenues for fiscal 2020] and [removed: 48%] [added: 49%] of our total revenues for fiscal [removed: 2019.][added: 2020.]

Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the defense spending priorities of the U.S. Presidential Administration and Congress and what challenges [added: potential] budget reductions will present for us and our industry generally.

[removed: If] [added: In addition, if] government funding relating to our contracts with the U.S. government or DoD becomes unavailable, or is reduced or delayed, or planned orders are reduced, our contract or subcontract under such programs may be terminated or adjusted by the U.S. government or [added: the prime contractor.]

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[removed: Because] [added: - Because] we depend on U.S. government contracts, a delay in the completion of the U.S. [removed: government's] [added: government’s] budget and [removed: appropriation] [added: appropriations] process could delay procurement of the products, services and solutions we provide and adversely affect our future [removed: revenues.][added: revenues.]

In years when the U.S. government does not complete its appropriations before the beginning of the new fiscal year on October 1, government operations are typically funded pursuant to a "continuing resolution," which allows federal government agencies to operate at spending levels approved in the previous appropriations [removed: cycle,] [added: cycle] but does not authorize new spending initiatives.

Consequently, programs are often partially funded [removed: initially] [added: initially,] and additional funds are committed only as Congress makes further appropriations.

In addition, [added: if and] when supplemental appropriations are required to operate the U.S. government or fund specific programs and passage of legislation needed to approve any supplemental appropriations bill is delayed, the overall funding environment for our business could be adversely affected.

Our business is highly [removed: competitive] [added: competitive,] and we compete with larger companies with greater name recognition, financial resources and a larger technical staff.

Some of our competitors have made or could make acquisitions of [removed: businesses,] [added: businesses] or establish teaming or other agreements among themselves or third parties, which [added: could] allow them to offer more competitive and comprehensive solutions.

For additional background on the regulations that apply to our business and the related compliance risks, see “Regulation” within Item 1 of this Annual Report on Form 10-K and the risk factor “Our business is subject to governmental review and investigation, which could adversely affect our financial position, operating results and growth prospects." The FAR and [added: many of our U.S. government contracts contain organizational conflict of interest clauses that may limit our ability to compete for or perform certain other contracts or other types of services for particular customers.]

Legislation, regulations and initiatives dealing with procurement reform, mitigation of potential conflicts of interest and environmental responsibility or sustainability, [added: including regulations that require reductions and disclosure of greenhouse gas emissions and climate-related financial risks,] as well as any resulting shifts in the buying practices of U.S. government agencies, such as increased usage of fixed-price contracts, multiple-award contracts and small business set-aside contracts, could have adverse effects on government contractors, including us.

As of December [removed: 31, 2021,] [added: 30, 2022,] indirect cost audits by the DCAA remain open for fiscal [removed: 2016] [added: 2021] and subsequent fiscal years.

[removed: We are routinely subject to governmental investigations relating to compliance with various laws and regulations with respect to our role as a contractor to federal, state and local government customers and in connection with performing services in countries outside the U.S.] If a review or investigation identifies improper or illegal activities, we may be subject to disgorgement of profits, fines, damages, litigation, civil or criminal penalties, exclusion from sales channels or sales opportunities, injunctions or administrative sanctions, including the termination of contracts, the triggering of price reduction clauses, suspension of payments, suspension or debarment from doing business with governmental agencies or other consequences.

We are subject to numerous state, federal and international laws and directives and regulations in the U.S. and abroad that involve matters central to our business, including data privacy and [removed: protection,] [added: security,] employment and labor relations, immigration, taxation, anti-corruption, anti-bribery, import-export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition.

[removed: Our] [added: - Our] business is subject to complex and evolving laws [removed: and regulations] [added: and regulations] regarding [added: data] privacy and [removed: data] security which could subject us to investigations, claims or monetary penalties against us, require us to change our business practices or otherwise adversely affect our revenues and [removed: profitability.][added: profitability.]

We are subject to a variety of laws and regulations in the [removed: U.S.] [added: U.S., at the federal, state] and [added: local levels and] abroad relating to data privacy and security.

In addition, the application, interpretation and enforcement of these laws and regulations are often uncertain, particularly in new and rapidly evolving areas of technology, and may differ in material respects among jurisdictions, interpreted and [added: applied inconsistently among jurisdictions or in a manner that is inconsistent with our current policies and practices, all of which can make compliance challenging and costly, and expose us to related risks and liabilities.]

To the extent that we do not comply with [removed: the] applicable security and control requirements, and there is unauthorized access or disclosure of sensitive [removed: information,] [added: information (including personal information),] this could potentially result in a contract termination or information security issues, which could materially and adversely affect our business and financial results and lead to reputational harm.

We will also be subject to the DoD Cybersecurity Maturity Model Certification (“CMMC”) requirements, which will require contractors processing critical national security information on their [removed: IT] [added: information technology] systems to receive specific third-party certifications relating to specified cybersecurity standards to be eligible for contract awards.

The overarching complexity of data privacy and security laws and regulations around the world [removed: pose] [added: poses] a compliance challenge that could manifest in costs, damages or liability in other forms as a result of failure to implement proper programmatic controls, failure to adhere to those controls, or the breach of applicable data privacy and security requirements by us, our employees, our business partners (including our service providers, suppliers or subcontractors) or our customers.

Any failure or perceived failure by us, our service providers, suppliers, subcontractors or other business partners to comply with applicable laws, [removed: regulations] [added: regulations, our public privacy policies] and other [added: public statements about data privacy and security and other] obligations in these areas could result in regulatory [removed: actions] or [added: government actions] lawsuits against [removed: us,] [added: us (including civil claims, such as representative actions and other class action-type litigation),] legal liability, [added: monetary penalties,] fines, [added: sanctions,] damages and other [removed: costs.][added: costs, orders to cease or change our processing of data, changes to our business practices, diversion of internal resources, and harm to our reputation, all of which could adversely affect our business, financial condition and results of operations.]

For additional background on the [added: data] privacy [added: and security] laws that apply to our business and the related compliance risks, see “Regulation” within Item 1 of this Annual Report on Form 10-K.

[removed: The] [added: In addition, the] global spread of COVID-19 [removed: has] resulted in a substantial decline in demand for air travel, which [removed: has] adversely impacted the demand for products and services related to our airport security detection and automation business.

We are not able to predict whether COVID-19 will result in permanent changes to air travel behaviors, including a permanent reduction in business travel as a result of the increased use of teleconferencing products and, more broadly, a general reluctance [removed: to travel] by [removed: consumers,] [added: consumers to travel,] each of which has, and could continue to, impact our business.

In the ordinary course of our [removed: business] [added: business,] we form and are members of joint ventures (meaning joint efforts or business arrangements of any type).

[removed: Competition for skilled personnel is intense and] [added: In addition,] many U.S. government programs [removed: also] require contractors to have security clearances, certain of which can be difficult and time-consuming to obtain and personnel with such security clearances are in great demand.

We believe [removed: that] our success will also depend on the continued employment of a highly qualified and experienced senior management team and its ability to retain existing business, generate new business, execute on our business plans in an efficient and effective manner, and continually develop new members of senior management.

As of December [removed: 31, 2021,] [added: 30, 2022,] our total backlog was [removed: $34.5] [added: $35.8] billion, including [removed: $7.4] [added: $8.4] billion in funded backlog.

Revenues from FFP contracts represented approximately [removed: 37%] [added: 38%] of our total revenues for fiscal [removed: 2021.][added: 2022.]

More generally, any increased or unexpected costs or unanticipated delays in the performance of our contracts, including costs and delays caused by contractual disputes or other factors outside of our control, such as performance failures of our subcontractors, rising [removed: inflation,] [added: inflationary pressures and fluctuations in interest rates,] natural disasters or other force majeure events, could make our contracts less profitable than expected or unprofitable.

We recognize revenue on our service-based contracts primarily over time as there is a continuous transfer of control to the customer throughout the contract as we perform the promised services, which generally requires estimates of total [added: costs at completion, fees earned on the contract, or both.]

As a government contractor and a provider of information technology services operating in multiple regulated industries and geographies, we and our service providers, suppliers and subcontractors collect, store, transmit and otherwise process [added: personal, confidential, proprietary and] sensitive information, including [removed: personally identifiable information,] protected health information, personnel information, [added: personal information,] classified information, [removed: contractor] [added: controlled] unclassified information, intellectual property and financial information, concerning our business, employees and customers.

Any electronic or physical break-in or other security breach or compromise of our information technology systems and networks or facilities, or those of our service providers, [removed: suppliers] [added: suppliers, joint ventures] or subcontractors, may jeopardize the security of [removed: information] [added: information, including personal, confidential, proprietary or sensitive information,] stored or transmitted through these systems and networks or stored in those facilities.

This could lead to disruptions in mission-critical systems, unauthorized [added: access to or] release of [removed: confidential] [added: personal, confidential, proprietary, sensitive] or otherwise protected information and corruption of data or systems.

Many statutory requirements, both in the U.S. and abroad, also include obligations for companies to provide notice of [removed: data] [added: information] security incidents involving certain types of [removed: data] [added: information] (including obligations to notify affected individuals and regulators in the event of [removed: security] [added: cybersecurity] breaches involving certain personal [removed: data),] [added: information),] which could result from breaches of our service providers, our suppliers or subcontractors.

Although we have implemented policies, procedures and controls [added: designed] to protect against, detect and mitigate these threats and attacks, we and our service providers, [removed: suppliers] [added: suppliers, joint ventures] and subcontractors have faced and continue to face advanced and persistent attacks on our information systems.

Summary of Risk Factors

This risk factor summary contains a high-level summary of risks associated with our business.

It does not contain all of the information that may be important to you, and you should read this risk factor summary together with the more detailed discussion of risks and uncertainties set forth following this summary.

A summary of our risks includes, but is not limited to, the following:

- We depend on government agencies as our primary customers and if our reputation or relationships with these agencies were harmed, our future revenues and growth prospects could be adversely affected.

- A decline in the U.S. government budget, changes in spending or budgetary priorities or delays in contract awards may significantly and adversely affect our future revenues and limit our growth prospects.

- Due to the competitive process to obtain contracts and the likelihood of bid protests, we may be unable to achieve or sustain revenue growth and profitability.

- The U.S. government may terminate, cancel, modify or curtail our contracts at any time prior to their completion and, if we do not replace them, this may adversely affect our future revenues and profitability.

- We face intense competition that can impact our ability to obtain contracts and therefore affect our future revenues and growth prospects.

- Our failure to comply with various complex procurement rules and regulations could result in our being liable for penalties, including termination of our U.S. government contracts, disqualification from bidding on future U.S. government contracts and suspension or debarment from U.S. government contracting.

- The U.S. government may adopt new contract rules and regulations or revise its procurement practices in a manner adverse to us at any time.

- As a U.S. government contractor, our partners and we are subject to reviews, audits and cost adjustments by the U.S. government, which could adversely affect our profitability, cash position or growth prospects if resolved unfavorably to us.

- Our business is subject to governmental review and investigation, which could adversely affect our financial position, operating results and growth prospects.

- Investigations, audits, claims, disputes, enforcement actions, litigation, arbitration or other legal proceedings could require us to pay potentially large damage awards and could be costly to defend, which would adversely affect our cash balances and profitability, and could damage our reputation.

- Our business and operations expose us to numerous legal and regulatory requirements, and any violation of these requirements could harm our business.

- The extent to which our business will be adversely affected by COVID-19 or other health epidemics, pandemics and similar outbreaks is highly uncertain and cannot be predicted.

- Misconduct of employees, subcontractors, agents, suppliers, business partners or joint ventures and others working on our behalf could cause us to lose existing contracts or customers and adversely affect our ability to obtain new contracts and customers and could have a significant adverse impact on our business and reputation.

- A failure to attract, train, retain and motivate skilled employees, including our management team, would adversely affect our ability to execute our strategy and may disrupt our operations.

- We may not realize the full amounts reflected in our backlog as revenues, which could adversely affect our expected future revenues and growth prospects.

- Our earnings and profitability may vary based on the mix of our contracts and may be adversely affected by our failure to estimate and manage costs, time and resources accurately.

- We use estimates in recognizing revenues, and if we make changes to estimates used in recognizing revenues, our profitability may be adversely affected.

- Cybersecurity breaches and other information security incidents could negatively impact our business and financial results, impair our ability to effectively provide our services to our clients and cause harm to our reputation or competitive position.

- Internal system or service failures, or failures in the systems or services of third parties on which we rely, could disrupt our business and impair our ability to effectively provide our services and products to our customers, which could damage our reputation and adversely affect our revenues and profitability.

- Customer systems failures could damage our reputation and adversely affect our revenues and profitability.

- Our success depends, in part, on our ability to work with complex and rapidly changing technologies to meet the needs of our customers.

- We have classified contracts with the U.S. government, which may limit investor insight into portions of our business.

- We have made and continue to make acquisitions, investments, joint ventures and divestitures that involve numerous risks and uncertainties.

- Goodwill and other intangible assets represent significant assets on our balance sheet and any impairment of these assets could negatively impact our results of operations.

- We depend on our teaming arrangements and relationships with other contractors and subcontractors.

If we are not able to maintain these relationships, or if these parties fail to satisfy their obligations to us or the customer, our revenues, profitability and growth prospects could be adversely affected.

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- We could incur significant liabilities and suffer negative publicity if our inspection or detection systems fail to detect bombs, explosives, weapons, contraband or other threats.

- Our insurance, customer indemnifications or other liability protections may be insufficient to protect us from product and other liability claims or losses.

- We face risks associated with our international business.

- We have only a limited ability to protect or exploit intellectual property rights, which are important to our success.

- Provisions in our charter documents and under Delaware law could delay or prevent transactions that many stockholders may favor.

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If our reputation is negatively affected or if we are unable to successfully maintain our relationships with government entities and agencies, certain customers could cease to do business with us and our ability to bid successfully for new business may be adversely affected, which could cause our actual results to differ materially and adversely from those anticipated.

For example, the military conflict between Russia and Ukraine has resulted in increased security assistance to Ukraine to help preserve its territorial integrity, secure its borders, and improve interoperability with NATO.

Changes in defense budgetary priorities as a result of such conflict could have an adverse impact on our results.

If our reputation is negatively affected, certain customers could cease to do business with us.

the prime contractor.

many of our U.S. government contracts contain organizational conflict of interest clauses that may limit our ability to compete for or perform certain other contracts or other types of services for particular customers.

applied inconsistently among jurisdictions or in a manner that is inconsistent with our current policies and practices, all of which can make compliance challenging and costly, and expose us to related risks and liabilities.

The outbreak and global spread of COVID-19, and the preventative or protective actions that governments, corporations, individuals and we are taking and may continue to take in an effort to limit the impact of COVID-19, have resulted in a period of business disruption and increased economic uncertainty.

The spread of COVID-19 has caused us to modify our business practices, including vaccination and testing requirements, employee travel, access to customer sites, employee and contractor remote work and restrictions to physical participation in meetings, events and conferences.

Illness, travel restrictions or other workforce disruptions could adversely affect our supply chain and our access to suppliers of important technologies and components, our ability to timely and satisfactorily complete our clients’ projects, our ability to provide services to our clients or our other business processes.

We may take further actions that we determine are in the best interests of our employees, customers and business partners or may be required by government authorities.

For example, on September 9, 2021, President Biden issued a series of executive orders to combat COVID-19, including an executive order that would have required us, as a federal contractor, to have our employees fully vaccinated unless the employee is legally entitled to a religious or medical exemption.

That executive order is currently under a nationwide injunction and its future is uncertain.

In any event, there is no certainty that such measures will be sufficient to mitigate the risks posed by COVID-19.

In addition, as local conditions and regulations continue to permit the return of employees to business generally, our workforce may not be able to return to work in person immediately, if at all, or may instead choose to pursue competing employment opportunities, including as

a result of transportation, childcare, and ongoing health issues, which could negatively affect our business.

If significant portions of our workforce are unable to work effectively, including because of illness, quarantines, government actions, increased employee attrition, facility closures or other restrictions due to COVID-19, or do not comply with our COVID-19 mitigation efforts or facility access requirements, our business and results of operations could be materially and adversely impacted.

Government agencies are our primary customers and the long-term impact of increased government spending in response to COVID-19 is uncertain.

This could result in a re-evaluation of U.S. government spending levels and priorities, which could impact our business performance.

The situation surrounding COVID-19 remains fluid and the likelihood of an impact on us that could be material increases the longer the virus impacts activity levels in the locations in which we operate.

In particular, the emergence of new and more transmissible COVID-19 variants, including the efficacy of vaccines against such variants, booster vaccinations, or a lack of public acceptance of vaccines and low vaccination rates in certain parts of the U.S., may delay economic recovery.

Further, even if vaccines are widely distributed and accepted, there can be no assurance that vaccines will ultimately be successful in limiting or stopping the spread of COVID-19.

costs at completion, fees earned on the contract, or both.

Therefore, we are continuously exposed to unauthorized attempts to compromise such sensitive information through cyber-attacks, insider threats and other information security threats, including physical break-ins and malicious insiders.

Some of these risks may be heightened due to protocols related to remote work implemented as a result of the COVID-19 pandemic.

legal, technology and market initiatives.

Transition risks, including changes in consumer preferences and additional regulatory requirements or taxes, could increase our expenses and undermine our strategies.

Acquisitions, investments and joint ventures pose many other risks that could adversely affect our reputation, operations or financial results, including that we may not be able to identify, compete effectively for or complete suitable acquisitions and investments at prices we consider attractive; we may not be able to accurately estimate the financial effect of acquisitions and investments on our business or realize anticipated synergies, business growth or profitability and may be unable to recover investments in any such acquisitions and investments; we may not be able to manage the integration process for acquisitions successfully, and the integration process may divert management time and focus from operating our business, including as a result of incompatible accounting, information management or other control systems; acquired technologies, capabilities, products and service offerings, particularly those that are still in development when acquired, may not perform as expected, may have defects or may not be integrated into our business as expected; we may have trouble retaining key employees and customers of an acquired business; we may need to implement or improve controls, procedures and policies at a business that prior to the acquisition may have lacked sufficiently effective controls, procedures and policies, including those relating to financial reporting, revenue recognition or other financial or control deficiencies; we may assume legal or regulatory risks, particularly with respect to smaller businesses that have immature business processes and compliance programs, or we may face litigation or material liabilities that were not identified as part of our due diligence or for which we are unable to receive a purchase price adjustment or reimbursement through indemnification, including claims from terminated employees, customers, former stockholders or other third parties, or there may be other unanticipated write-offs or charges; we may be required to spend a significant amount of cash or to incur debt, resulting in increased fixed payment obligations or covenants or other restrictions on us, or issue shares of our common stock or convertible debt, resulting in dilution of ownership; we may not be able to influence the operations of our joint ventures effectively, or we may be exposed to certain liabilities if our joint venture partners do not fulfill their obligations; and if our acquisitions, investments or joint ventures fail, perform poorly, or their value is otherwise impaired for any reason, including contractions in credit markets and global economic conditions, our business and financial results could be adversely affected.

Our failure to comply with these laws might subject us to civil and criminal penalties that might have a materially adverse impact on our business operations and our financial position or results of operations.

However, trade secrets are generally difficult to protect.

We may be required to expend significant resources

*In this section, we discuss our financial condition, changes in financial condition and results of our operations for the year ended December [removed: 31, 2021] [added: 30, 2022,] compared to the year ended [removed: January 1,] [added: December 31,] 2021.

For a discussion and analysis comparing our results for the year ended [removed: January 1, 2021] [added: December 31, 2021,] to the year ended January [removed: 3, 2020,] [added: 1, 2021,] see our Annual Report on Form 10-K for the year ended [removed: January 1,] [added: December 31,] 2021, filed with the SEC on February [removed: 23, 2021,] [added: 15, 2022,] under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”*

We bring domain-specific capabilities and innovations to customers in each of these markets by leveraging five technical [added: core] capabilities: digital modernization, cyber operations, mission software systems, integrated systems and mission operations.

[removed: Less than] [added: Approximately] 8% of our revenues and tangible long-lived assets are generated by or owned by entities located outside of the United States.

Impact on [removed: prior year] [added: the first half of fiscal 2021] segment results were determined to be immaterial and have not been recast to reflect this change.

- continued improvement in our [removed: back office] [added: back-office] infrastructure and related business processes for greater effectiveness and efficiency across all business functions; and

*Sales Trend.* For fiscal [removed: 2021,] [added: 2022,] revenues increased [removed: $1.4] [added: $0.7] billion, or [removed: 12%,] [added: 5%,] compared to fiscal [removed: 2020,] [added: 2021,] primarily due to [removed: program wins and] a net increase in volumes on certain programs, [removed: partially offset with the completion of certain contracts.][added: program wins and a net increase in revenues related to our business acquisitions.]

Leidos Holdings, Inc. Annual Report - [removed: 36][added: 48]

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*Operating Expenses and Income Trend.* For fiscal [removed: 2021,] [added: 2022,] operating expenses increased by [removed: $1.3] [added: $0.7] billion, or [removed: 11%,] [added: 6%,] compared to fiscal [removed: 2020.][added: 2021.]

Operating margin for fiscal [removed: 2021] [added: 2022] was [removed: 8.4%] [added: 7.6%] compared to [removed: 8.1%] [added: 8.4%] for fiscal [removed: 2020.][added: 2021.]

Operating income was [removed: $1,152] [added: $1,088] million, a [removed: $154] [added: $64] million [removed: increase] [added: decrease] compared to fiscal [removed: 2020.][added: 2021.]

In fiscal [removed: 2021,] [added: 2022,] we generated approximately [removed: 87%] [added: 86%] of our total revenues from contracts with the U.S. government, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. government.

Revenues under contracts with the DoD and U.S. Intelligence Community, including subcontracts under which the DoD or the U.S. Intelligence Community is the ultimate purchaser, represented approximately 44% of our total revenues for fiscal [removed: 2021.][added: 2022.]

Leidos Holdings, Inc. Annual Report - [removed: 37][added: 49]

Sales to customers in international markets represented approximately 8% of total revenues for fiscal [removed: 2021.][added: 2022.]

| | | | | | | Year Ended | | | | | | | | | | | | [removed: 2021] [added: 2022] to [removed: 2020] [added: 2021] | | | | | | | | |

| | | | | | | December [removed: 31, 2021] [added: 30, 2022] | | | | | | [removed: January 1,] [added: December 31,] 2021 | | | | | | Dollar change | | | | | | Percent change | | |

| Cost of revenues | | | | | | [removed: 11,723] [added: 12,312] | | | | | | [removed: 10,560] [added: 11,723] | | | | | | [removed: 1,163] [added: 589] | | | | | | [removed: 11] [added: 5] | | % |

| Selling, general and administrative expenses | | | | | | [removed: 860] [added: 950] | | | | | | [removed: 770] [added: 860] | | | | | | 90 | | | | | | [removed: 12] [added: 10] | | % |

| Acquisition, integration and restructuring costs | | | | | | [removed: 27] [added: 17] | | | | | | [removed: 39] [added: 27] | | | | | | [removed: (12)] [added: (10)] | | | | | | [removed: (31)] [added: (37)] | | % |

| Asset impairment charges | | | | | | [removed: 4] [added: 40] | | | | | | [removed: 12] [added: 4] | | | | | | [removed: (8)] [added: 36] | | | | | | [removed: (67)] [added: *NM*] | | [removed: %] |

| Equity earnings of non-consolidated subsidiaries | | | | | | [removed: (20)] [added: (12)] | | | | | | [removed: (14)] [added: (20)] | | | | | | [removed: (6)] [added: 8] | | | | | | [removed: 43] [added: (40)] | | % |

| Operating income | | | | | | [removed: 1,152] [added: 1,088] | | | | | | [removed: 998] [added: 1,152] | | | | | | [removed: 154] [added: (64)] | | | | | | [removed: 15] [added: (6)] | | % |

| Non-operating expense, net | | | | | | [removed: (185)] [added: (202)] | | | | | | [removed: (217)] [added: (185)] | | | | | | [removed: 32] [added: (17)] | | | | | | [removed: *NM*] [added: 9] | | [added: %] |

| Income before income taxes | | | | | | [removed: 967] [added: 886] | | | | | | [removed: 781] [added: 967] | | | | | | [removed: 186] [added: (81)] | | | | | | [removed: 24] [added: (8)] | | % |

| Income tax expense | | | | | | [removed: (208)] [added: (193)] | | | | | | [removed: (152)] [added: (208)] | | | | | | [removed: (56)] [added: 15] | | | | | | [removed: 37] [added: (7)] | | % |

| Net income | | | | | | [removed: 759] [added: 693] | | | | | | [removed: 629] [added: 759] | | | | | | [removed: 130] [added: (66)] | | | | | | [removed: 21] [added: (9)] | | % |

| Less: net income attributable to non-controlling interest | | | | | | [removed: 6] [added: 8] | | | | | | [removed: 1] [added: 6] | | | | | | [removed: 5] [added: 2] | | | | | | [removed: *NM*] [added: 33] | | [added: %] |

| Net income attributable to Leidos common stockholders | | | | | | $ | [removed: 753] [added: 685] | | | | | $ | [removed: 628] [added: 753] | | | | | $ | [removed: 125] [added: (68)] | | | | | [removed: 20] [added: (9)] | | % |

| *Operating income margin* | | | | | | [removed: 8.4] [added: 7.6] | | % | | | | [removed: *8.1*] [added: *8.4*] | | *%* | | | | | | | | | | | | |

Leidos Holdings, Inc. Annual Report - [removed: 38][added: 50]

| Defense Solutions | | | | | | December [removed: 31, 2021] [added: 30, 2022] | | | | | | [removed: January 1,] [added: December 31,] 2021 | | | | | | Dollar change | | | | | | Percent change | | |

| Operating income | | | | | | [removed: 569] [added: 541] | | | | | | [removed: 506] [added: 569] | | | | | | [removed: 63] [added: (28)] | | | | | | [removed: 12] [added: (5)] | | % |

| *Operating income margin* | | | | | | [removed: 7.1] [added: 6.6] | | % | | | | [removed: *6.9*] [added: *7.1*] | | *%* | | | | | | | | | | | | |

The increase in revenues for fiscal [removed: 2021] [added: 2022] as compared to fiscal [removed: 2020] [added: 2021] was primarily attributable to program wins, a net increase in volumes on certain [removed: programs, $149] [added: programs and a $63] million [removed: of] [added: net increase in] revenues [removed: from new business] [added: related to our] acquisitions [removed: and a reduction of] [added: made in] the [removed: negative impacts] [added: second and third quarters] from [removed: COVID-19 experienced during] the prior [added: year and the Cobham Special Mission acquisition made in the current] year.

The increase was partially offset by the completion of certain [removed: contracts and] [added: contracts,] contracts that were reassigned from [removed: the] Defense Solutions reportable segment to the Civil reportable segment during the third [removed: quarter.][added: quarter of fiscal 2021 and $95 million related to unfavorable exchange rate movements.]

| Civil | | | | | | December [removed: 31, 2021] [added: 30, 2022] | | | | | | [removed: January 1,] [added: December 31,] 2021 | | | | | | Dollar change | | | | | | Percent change | | |

| Operating income | | | | | | [removed: 248] [added: 234] | | | | | | [removed: 280] [added: 248] | | | | | | [removed: (32)] [added: (14)] | | | | | | [removed: (11)] [added: (6)] | | % |

| *Operating income margin* | | | | | | [removed: 7.9] [added: 6.8] | | % | | | | [removed: *9.4*] [added: *7.9*] | | *%* | | | | | | | | | | | | |

We also received $28 million in recoveries related to stop work orders on certain programs as a result of COVID-19.

The increase was partially offset by the completion of certain contracts and unfavorable exchange rate movements.

The decrease in operating income was primarily attributable to the completion of certain contracts, increase in legal fees and settlement costs and impairment charges of $37 million related to our ongoing facility rationalization efforts.

The decrease in operating income was partially offset by program wins and $28 million in recoveries related to stop work orders on certain programs as a result of COVID-19.

For fiscal 2022, the COVID-19 pandemic did not have a material impact to revenues and operating income, other than the receipt of $28 million in recoveries, within our Health segment related to stop work orders on certain programs.

The volume of global passenger air travel remains below pre-pandemic levels, which continues to impact the operations of our Security Enterprise Solutions reporting unit.

President Biden signed the $1.7 trillion GFY 2023 omnibus spending bill into law on December 29, 2022.

The omnibus spending bill funds the federal government through September 30, 2023.

The bill includes $772.5 billion in non-defense spending and $858.4 billion in defense spending.

The bill also includes $85 billion in emergency spending not included in the discretionary amount.

The new 118th Congress will begin to work on the GFY 2024 appropriations bills in the spring of 2023.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| Revenues | | | | | | $ | 14,396 | | | | | $ | 13,737 | | | | | $ | 659 | | | | | 5 | | % |

| Credit losses (recoveries), net | | | | | | 1 | | | | | | (9) | | | | | | 10 | | | | | | (111) | | % |

| | | | | | | Year Ended | | | | | | | | | | | | 2022 to 2021 | | | | | | | | |

| Revenues | | | | | | $ | 8,244 | | | | | $ | 8,032 | | | | | $ | 212 | | | | | 3 | | % |

The decrease in operating income for fiscal 2022 as compared to fiscal 2021 was primarily attributable to the completion of certain contracts, net write-downs on certain contracts, increased amortization expense of $8 million and $6 million related to unfavorable exchange rate movements.

Fiscal 2022 also included impairment charges of $12 million related to our ongoing facility rationalization efforts (see "Note 10—Leases").

The decrease was partially offset by program wins and a net increase in volumes on certain programs.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| | | | | | | Year Ended | | | | | | | | | | | | 2022 to 2021 | | | | | | | | |

| Revenues | | | | | | $ | 3,464 | | | | | $ | 3,157 | | | | | $ | 307 | | | | | 10 | | % |

The increase was partially offset by the completion of certain contracts and $12 million of unfavorable exchange rate movements.

The decrease in operating income for fiscal 2022 as compared to fiscal 2021 was primarily attributable to a $19 million increase in legal fees and settlement costs resulting from an adverse arbitration ruling related to the 2016 acquisition of the Information Systems & Global Solutions business (“IS&GS Business”) from Lockheed Martin and impairment charges of $14 million related to our ongoing facility rationalization efforts (see "Note 10—Leases").

The decreases were partially offset by a net increase in program volumes.

| | | | | | | Year Ended | | | | | | | | | | | | 2022 to 2021 | | | | | | | | |

| Revenues | | | | | | $ | 2,688 | | | | | $ | 2,548 | | | | | $ | 140 | | | | | 5 | | % |

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

The decrease was partially offset by $28 million in recoveries related to stop work orders on certain programs as a result of COVID-19 and program wins.

| | | | | | | Year Ended | | | | | | | | | | | | 2022 to 2021 | | | | | | | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

Non-operating expense, net increased $17 million for fiscal 2022 as compared to fiscal 2021, primarily due to higher interest expense driven by increased interest rates.

Based upon our interpretation of the law as enacted, we recorded the estimated fiscal 2022 impact, resulting in increases of $130 million to both our income taxes payable and net deferred tax assets, and our fiscal 2022 unrecognized tax benefits increased by $91 million with a corresponding increase to net deferred tax assets.

We expect this TCJA provision to have a similar impact to income taxes payable, unrecognized tax benefits and net deferred tax assets during fiscal 2023.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

We have a commercial paper program in which we may issue short-term unsecured commercial paper notes not to

The notes outstanding as of December 30, 2022, contain financial covenants and customary restrictive covenants.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

In December 2022, the FASB issued guidance which provides relief for entities with such LIBOR denominated credit instruments so that entities may continue to account for contract modifications as a continuation of the existing contract and the continuation of the hedge accounting arrangement through December 31, 2024.

There were no open market share repurchases in fiscal 2022.

In addition, revenue had a positive impact from business acquisitions in the Defense Solutions segment and a reduction of the negative impacts from COVID-19 experienced during the prior year.

PART II

The increase in operating income was primarily attributable to a net increase in volumes on certain programs, a reduction of the negative impacts from COVID-19 experienced during the prior year and program wins, partially offset by the completion of certain contracts.

The COVID-19 pandemic is affecting major economic and financial markets, and effectively all industries and governments are facing challenges, which has resulted in a period of business disruption, the length and severity of which cannot be predicted.

The pandemic has resulted in travel restrictions, government orders to “shelter-in-place”, quarantine restrictions and disruption of the financial markets.

We have acted to protect the health and safety of our employees, comply with workplace health and safety regulations and work with our customers to minimize disruptions.

For fiscal 2021, while we continue to navigate impacts associated with COVID-19, primarily relating to supply chain matters, we believe that COVID-19 did not have a material impact to revenues and operating income as compared to prior year results.

Section 3610 of the CARES Act, a $2 trillion coronavirus response bill providing widespread emergency relief, authorized the government to reimburse qualifying contractors for the cost of certain impacts of COVID-19.

While a portion of the recoveries that we have made are a result of Section 3610 of the CARES Act, the Act expired on September 30, 2021.

On September 9, 2021, President Biden issued a series of executive orders to combat COVID-19, one of which requires us, as a federal contractor, to have our employees fully vaccinated unless the employee is legally entitled to a religious or medical exemption.

This vaccine mandate is currently under a nationwide injunction, while courts adjudicate constitutional challenges to the executive order.

We are prepared to comply with the executive order in the event the injunction is lifted.

Congress received the GFY 2022 President’s Budget Request on May 28, 2021 and passed a Continuing Resolution ("CR") before the GFY deadline of September 30, 2021.

The CR fully funded the federal government at current levels through December 3, 2021 and provides $28.6 billion in disaster relief and $6.3 billion to support Afghanistan evacuees.

On December 2, 2021, Congress passed a second continuing resolution to fund the federal government at GFY 2021 levels until February 18, 2022.

The Senate plans to vote on a House-passed continuing resolution the week of February 14, 2022, that would extend government funding through March 11, 2022.

Congressional negotiations continue on defense and non-defense spending levels and controversial policy riders in the GFY 2022 appropriations bills.

President Biden is expected to release the GFY 2023 President’s Budget Request this spring.

| Revenues | | | | | | $ | 13,737 | | | | | $ | 12,297 | | | | | $ | 1,440 | | | | | 12 | | % |

| Bad debt expense and recoveries | | | | | | (9) | | | | | | (68) | | | | | | 59 | | | | | | (87) | | % |

*NM - Not meaningful*

| Revenues | | | | | | $ | 8,032 | | | | | $ | 7,341 | | | | | $ | 691 | | | | | 9 | | % |

In addition, in fiscal 2021, there was a $67 million benefit in exchange rate movements.

The increase in operating income for fiscal 2021 as compared to fiscal 2020 was primarily attributable to program wins, a net increase in program volumes on certain contracts, $18 million of operating income from new business acquisitions and a reduction of the negative impacts from COVID-19 experienced during the prior year, partially offset by the completion of certain contracts and an increase in amortization expense.

| Revenues | | | | | | $ | 3,157 | | | | | $ | 2,994 | | | | | $ | 163 | | | | | 5 | | % |

| Revenues | | | | | | $ | 2,548 | | | | | $ | 1,962 | | | | | $ | 586 | | | | | 30 | | % |

The increase in revenues for fiscal 2021 as compared to fiscal 2020 was primarily attributable to a net increase in volumes on certain programs, including a reduction of the negative impacts from COVID-19 experienced during the prior year and program wins, partially offset by the completion of certain contracts.

For fiscal 2020 we recorded $16 million, partially offset by amortization of $2 million.

Non-operating expense, net decreased $32 million for fiscal 2021 as compared to fiscal 2020, primarily due to $36 million of debt discount and deferred financing costs written off related to refinancing activities in the prior year, partially offset by higher interest expenses.

The effective tax rate for fiscal 2020 was favorably impacted primarily by federal research tax credits and excess tax benefits related to employee stock-based payment transactions, partially offset by taxes related to foreign operations.

Although it is possible that Congress may defer, modify, or repeal this provision, potentially with retroactive effect, we have no assurance that Congress will take any action with respect to this provision.

If the 2022 effective date remains in place, based on the law as currently enacted, our initial assessment is that our cash from operations will decrease by approximately $150 million in fiscal 2022 and our net deferred tax assets will increase by a similar amount.

*Non-controlling Interest*

We have an 88% controlling interest in Mission Support Alliance, LLC ("MSA"), a joint venture with Centerra Group, LLC, which includes 41% purchased from Jacobs Group, LLC on January 26, 2018.

MSA’s contract ended on January 24, 2021.

We also have a 53% controlling interest in Hanford Mission Integration Solutions, LLC ("HMIS"), the legal entity for the follow-on contract to MSA's contract and a joint venture with Centerra Group, LLC and Parsons Government Services, Inc. We include the financial results for MSA and HMIS in our consolidated financial statements.

Net income attributable to non-controlling interest was $6 million and $1 million for fiscal 2021 and 2020, respectively.

The purchases were recorded to "Additional paid-in capital" in the consolidated balance sheets.

Congress may defer, modify or repeal the provision, but the ultimate outcome is uncertain.

The uncertainty surrounding the TCJA provision and the potential for COVID-19 to affect the financial markets may impact our liquidity.

At December [removed: 31, 2021] [added: 30, 2022] and [removed: January 1,] [added: December 31,] 2021, we had [removed: $5.1] [added: $4.9] billion and [removed: $4.7] [added: $5.1] billion, respectively, of [removed: short-term and long-term] debt, which included [removed: $1.7] [added: $1.5] billion and [removed: $1.4] [added: $1.7] billion, respectively, related to our senior unsecured term loans that have a variable stated interest rate that is determined based on [added: either] the London Interbank Offered Rate ("LIBOR") [added: or the Stated Overnight Financing Date ("SOFR")] rate plus a margin.

Leidos Holdings, Inc. Annual Report - [removed: 48][added: 55]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

As of December [removed: 31, 2021,] [added: 30, 2022,] the notional value of the interest rate swap agreements was $1.0 billion.

[removed: As of December 31, 2021 and January 1, 2021, the] [added: The] fair value of our interest rate swap agreements with respect to our Variable Rate Loan was [added: an asset of $20 million, as of December 30, 2022, and] a liability of $53 [removed: million and $103] million, [removed: respectively.][added: as of December 31, 2021.]

The net hypothetical 10% movement in the one-month LIBOR [added: or SOFR] rate would not have a significant impact on our annual interest expense.

As of December [removed: 31, 2021] [added: 30, 2022] and [removed: January 1,] [added: December 31,] 2021, our cash and cash equivalents included investments in several large institutional money market accounts.

For fiscal [removed: 2021] [added: 2022] and fiscal [removed: 2020,] [added: 2021,] a hypothetical 10% interest rate movement would not have a significant impact on the value of our holdings or on interest income.

Our foreign operations represented 8% of total revenues for fiscal [removed: 2021, 2020] [added: 2022, 2021] and [removed: 2019.][added: 2020.]

As of December 30, 2022, we hold $500 million of unsecured notes due May 2023.

We anticipate refinancing this obligation during fiscal 2023, at which time we will be subject to current market rates which may vary significantly from the existing rates on our debt.

PART II

Leidos Holdings, Inc. Annual Report - 49

Since our founding [removed: 53] [added: 54] years ago, we have applied our expertise in science, research and engineering in rapidly-evolving technologies and markets to solve complex problems of global concern.

We bring domain-specific capabilities and innovations to customers in each of these markets by leveraging five technical core [removed: competencies:] [added: capabilities:] digital modernization, cyber operations, mission software systems, integrated systems and mission operations.

With a focus on delivering mission-critical solutions, Leidos generated [removed: 87%] [added: 86%] of revenues for the fiscal year ended December [removed: 31, 2021] [added: 30, 2022,] ("fiscal [removed: 2021")] [added: 2022")] from U.S. government contracts.

At December [removed: 31, 2021,] [added: 30, 2022,] our business is aligned into three reportable segments (Defense Solutions, Civil and Health).

[removed: Less than] [added: Approximately] 8% of our revenues and tangible long-lived assets are generated by or owned by entities located outside of the United States.

Our ever-changing technologies and innovations cover a wide spectrum of markets with primary areas of concentration in digital [removed: transformation,] [added: modernization, mission systems and integration,] Command, Control, [removed: Communications,] Computers, [added: Communications,] Intelligence, Surveillance and Reconnaissance ("C4ISR") technologies and services, [added: maritime solutions,] transformative software, analytics, intelligence analysis, mission support and logistics services, weapons systems and [removed: human] space [removed: exploration.][added: systems and solutions.]

We provide a diverse portfolio of national security solutions and systems for air, land, sea, space and cyberspace for the U.S. Intelligence Community, the DoD, the [added: Space Development Agency, the] National Aeronautics and Space Administration ("NASA"), Defense Information Systems Agency ("DISA"), military services, government agencies of U.S. allies abroad and other federal and commercial customers in the national security industry.

Defense Solutions represented [removed: 58%] [added: 57%] of total revenues for fiscal [removed: 2021, 60%] [added: 2022, 58%] of total revenues for the fiscal year ended [removed: January 1,] [added: December 31,] 2021 ("fiscal [removed: 2020")] [added: 2021")] and [removed: 57%] [added: 60%] of total revenues for the fiscal year ended January [removed: 3, 2020] [added: 1, 2021] ("fiscal [removed: 2019").][added: 2020").]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

- *Digital [removed: Transformation] [added: Modernization] –* As an industry leader in [added: cyber and] enterprise IT, we provide extensive worldwide digital support [removed: operations] for our nation's largest and most critical infrastructure.

Our market concentration is on airborne and ground intelligence, surveillance and reconnaissance ("ISR"), maritime systems, electronic warfare systems, distributed sensor systems, autonomous systems, [removed: sensors] [added: sensors, Command] and [added: Control ("C2"), Joint All-Domain] Command and Control [removed: ("C2").][added: ("JADC2") and Multi-Domain Operations.]

We provide multi-spectral, airborne, [removed: ground and] [added: ground,] maritime [added: and space-based] ISR [removed: collection] [added: collection, algorithm development] and processing systems, advanced sensor design, C2 solutions and training systems.

In the air, we support a fleet of [removed: over 100] government and Leidos-owned fixed wing, rotary wing and unmanned aircraft.

[removed: On] [added: We apply an open architecture approach to digitally connect] the [removed: ground, we provide mission-critical Command, Control] [added: joint force across air, land, sea, cyber] and [removed: ISR] [added: space domains in support of the DoD’s JADC2 imperative] and support through innovative solutions, essential services and enriched data management tools facilitating critical decision making.

[removed: On and under the sea, we] [added: We] continue to enhance our surface and subsurface autonomous and unmanned technologies to help make maritime operations safer and more efficient for government and industry by providing leading sensor systems, signal processing, communications hardware and software to support these vital missions.

We offer innovative data analytics [removed: capabilities] [added: capabilities,] and we design, develop, integrate, deploy and support information-centric software and enterprise IT systems for complex, data-driven national security challenges.

We deliver turn-key logistics support to U.S. and key [removed: allies] [added: allies,] and we provide enterprise solutions, including large-scale, end-to-end supply chain optimization and modernization.

- *Weapons [removed: Systems –*] [added: Systems* –] We offer tactical weapons components and systems for surface-launched missiles, cruise missiles, air-to-air, air-to-ground and anti-ship missiles and guided munitions and rockets across the DoD.

We also deliver offensive boost-glide, launcher and air-breathing [added: systems, thermal protection] systems and hypersonic defense systems.

We have capabilities in integrated force protection in both directed energy (such as high-energy lasers and microwave systems) and area defense (such as counter-unmanned aviation systems, radar [removed: systems] [added: systems, sensors] and kinetic weapon launchers).

- [removed: *Human Space Exploration*] [added: *Space Systems and Solutions*] – We provide integrated design, manufacturing, integration of human-rated and exploration spacecraft for NASA and commercial customers.

We have the capability to design and manufacture [removed: for satellite propulsion, structures and avionics] [added: space systems] and key launch vehicle subsystems such as avionics/mission computing, guidance, navigation and control, boosters and structures.

By applying leading science, innovative technologies and business acumen, our talented employees help customers achieve their missions and take on the connected world with data-driven insights, improved efficiencies and technological advantages in the areas of [removed: transportation solutions, security detection and automation,] digital [removed: transformation services and environment,] [added: modernization,] energy [added: infrastructure, integrated missions, transportation applications] and [removed: infrastructure.][added: security detection.]

Civil represented [removed: 23%] [added: 24%] of total revenues for fiscal [removed: 2021, 24%] [added: 2022, 23%] of total revenues for fiscal [removed: 2020] [added: 2021] and [removed: 25%] [added: 24%] of total revenues for fiscal [removed: 2019.][added: 2020.]

We deliver many of the FAA's key automation systems and services, including the En Route Automation Modernization ("ERAM"), Advanced [removed: Technology] [added: Technologies and] Oceanic Procedures ("ATOP"), Time Based Flow Management, Terminal Flight Data [removed: Management,] [added: Manager,] Enterprise-Information Display System, Geo-7 and Future Flight Services.

Leidos [removed: recently] received 10+ year extensions to the ERAM and ATOP contracts for continued delivery of the evolving National Airspace System needs.

- *Security [removed: Detection and Automation] [added: Enterprise Solutions ("SES")] –* [removed: Our comprehensive suite] [added: Leidos is an industry leader] of fully-integrated security detection [removed: and automation solutions help increase] [added: solutions, making] security [added: screening and checkpoints safer] for aviation, ports and [removed: borders] [added: borders,] and critical infrastructure customers around the world.

With more than 24,000 products deployed across over 120 countries, [removed: this] [added: the SES] business has the most widespread global footprint within the Civil [added: Group] portfolio.

We are [removed: also] a leader in aviation screening equipment, [added: computed tomography carry-on baggage scanners, people scanners and explosive trace detectors,] facilitating secure and efficient passenger movement [removed: through fully-integrated solutions] in airports worldwide.

For [removed: ports] [added: CBP,] and [removed: borders worldwide, Leidos is helping] [added: other global customers, we help to] safeguard the flow of [removed: regulated commerce through innovations in screening technologies, common interfaces and artificial intelligence] [added: travel] and [removed: machine learning to] [added: trade through solutions that] effectively detect and mitigate threats across all trade elements, including cargo, vehicles and people.

[removed: We are] [added: Leidos is] the leading supplier of mobile non-intrusive inspection systems to U.S. Customs and Border Protection ("CBP").

- *Digital [removed: Transformation –*] [added: Transformation* –] We deliver secure, user-centric IT solutions in cloud computing, mobility, application modernization, DevOps, data center and network modernization, asset management, help desk operations and digital workplace enablement.

Leidos is modernizing enterprise IT in classified and unclassified environments, including programs with the FAA, NASA, [removed: IRS and the] Department of [removed: Justice.][added: Justice, IRS, U.S. MINT, Department of Commerce, FTC, and HUD.]

- *Climate, Energy and [removed: Environment –*] [added: Environment* –] We are trusted by government agencies and commercial customers with substantial environmental and sustainability [removed: driven missions.][added: driven-missions.]

Our reputation across [added: climate science,] environmental [removed: management,] [added: management and operations,] nuclear security, [added: power grid engineering,] energy efficiency, infrastructure management, mission support and IT modernization provides the applicable expertise needed to transform operations while modernizing aging infrastructure and maintaining environmental stewardship.

We support the critical missions of the Department of Energy ("DoE"), National Nuclear Security Administration, National Science Foundation, utilities, energy investors and [removed: developers and] [added: developers,] energy efficiency [removed: administrators.][added: administrators and commercial industrial clients.]

At the DoE Hanford site, we provide site-wide infrastructure management and operation including oversight of land and logistics, public works, information technology, fleet transportation, environmental [removed: sustainability] [added: sustainability,] and compliance, first responder services and future project planning.

At the National Energy Technology Laboratory, we actively [removed: perform] [added: conduct] and [removed: provide] support [removed: for] fundamental and applied research efforts, including providing product and logistical support comprising [removed: of] strategic business development, technology transfer and agreements and education and outreach support for the effective and efficient [removed: conduct] [added: execution] of [removed: research.][added: research programs.]

In addition, we help investor-owned utilities [added: and industrial clients] modernize power delivery [removed: systems,] [added: systems for improved reliability,] implement energy management strategies, [added: support vehicle electrification,] transform digital infrastructure and gain operational efficiencies to meet evolving energy [removed: needs.][added: needs and climate change goals.]

The capabilities we provide predominantly fall in four major areas of activity: health information management services, managed health services, digital [removed: transformation] [added: modernization] and life sciences research and development.

We are heavily engaged in the top defense Research Development Test and Evaluation priorities that are driven by critical evolving threat-driven needs.

- *Maritime Solutions* *–* On and under the sea, we offer a wide range of capabilities.

In space we provide sensor, algorithm development and integrated payload capabilities to identify and track threats and cue defensive systems.

We have developed and delivered full integrated small satellite systems.

Our Gibbs & Cox subsidiary is the largest independent naval architecture and marine engineering firm by headcount in the United States.

Our naval architecture services span the entire ship’s lifetime, from early-stage concept designs through detailed design, shipyard construction support, full lifecycle and sustainment support, ship alterations, service life extensions, and disposal.

Our Marine Engineering involves a wide range of activities, beginning with concept and feasibility design and continues through detailed design, construction support, life-cycle support and into ship-alt design for service-life extensions.

We offer reverse engineering, classified manufacturing and design, and threat exploitation services to a wide breadth of Intelligence Community customers.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

Our unique autonomy algorithms provide decision support for the heavily-burdened warfighter and support coordinated man-autonomous machine operations.

We provide expertise in the design, manufacturing, and integration of satellite propulsion, structures, and space-based EO/IR, multi/hyperspectral, EW/SIGINT and communications payloads.

We also have cutting-edge screening technologies for checked baggage and cargo.

Leidos is also transforming security detection beyond aviation and ports of entry to help government agencies and the private sector secure public venues and critical infrastructures.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

We accelerate enterprise transformation using customizable roadmaps and repeatable processes, enabling customers to effectively use their resources and advance their objectives.

Using our cyber expertise, we continually enhance our techniques and processes to build systems that operate resiliently in the face of evolving cyber threats.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

During fiscal 2022, we completed the acquisition of Cobham Aviation Services Australia’s Special Mission business.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| Male | | | | | | 65 | | % |

| Female | | | | | | 34 | | % |

| Undisclosed | | | | | | 1 | | % |

| | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

The Council is comprised of volunteers from across the business functions, ERG leaders, key stakeholders with oversight and guidance from executive leadership and a Board liaison.

Each year we attend and sponsor national conferences and local career fairs that target our key market segments and talent from historically underrepresented groups.

We have a strong focus on our employees’ career, flexibility and well-being.

We call this Leidos Life.

It is about embracing what makes Leidos great and advancing a culture that helps every employee achieve personal and professional success.

Leidos Life is our commitment to make Leidos an even better place to work.

Leidos empowers and challenges employees to continuously seek, share and apply new knowledge, skills and behaviors.

We recognize the value of a high-performing workforce where every member of the team has an opportunity to feel motivated, valued and fulfilled, and have a purposeful and long career at Leidos.

We provide resources, development, and experiential learning to enable employees to grow.

We provide leaders with the knowledge, skills and resources needed to coach employees and enable employees' career development.

We value and develop a highly-skilled future-ready workforce.

We have a strong technical upskilling and reskilling program to develop and retain talent.

We offer formal programs to help employees earn many industry-standard professional and technical certifications.

We provide a variety of leadership development programs, targeted for each level of leader, and numerous resources for leader development.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

Leveraging this portfolio, our core technical strengths and robust research and development initiatives, we are positioned to address emerging and evolving threats through rapid development of innovative solutions for our global customers.

Our aviation solutions include best-in-class checkpoint computed tomography, people scanners, explosive trace detectors and checked baggage screening.

Leidos implemented the CBP “Port of the Future” pilot at Brownsville, Texas border crossing aimed at achieving CPB cargo and privately-owned vehicle border screening goals.

In addition, we are transforming security detection beyond ports of entry to deliver fully-integrated and frictionless security solutions for public venues and critical infrastructure.

See "Note 5—Acquisitions and Divestitures" in Part II of this Annual Report on Form 10-K for further information.

During fiscal 2019, we divested of our commercial cybersecurity and health staff augmentation businesses.

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| Global workforce | | | | | | 66 | | % | | | | 34 | | % |

The Council is chaired by two senior executives, a board member who serves as a senior advisor and volunteers from across the business lines and functions.

We recognize the value of a high-performing workforce and are committed to providing opportunities for employees by encouraging career growth and movement across the enterprise.

We view career development as a partnership between employees, leaders and the company with a focus on building skills and experiences through internal mobility, experiential learning, specialized programs (such as rotational opportunities), feedback and mentoring.

We provide a variety of career development resources, training and engagement sessions for employees and leaders.

We are dedicated to undertaking efforts to retain and strengthen our highly-skilled workforce.

We recognize the importance of technical upskilling and reskilling to support evolving workforce needs, and we offer programs which allow us to develop and retain internal talent while providing employees with career growth.

We offer instructor-led, virtual training and self-paced learning and development programs that develop and enhance employee skills.

We offer formal programs to help employees prepare for certifications including the Project Management Institute and International Council on Systems Engineering as well as resources to prepare for over 95 industry-standard professional and technical certifications.

We have the Leidos Leadership program, which develops effective and inclusive leaders, where our managers and executive leaders participate in leadership development programs targeted towards the competencies and skills needed at their level.

We have an annual succession planning rhythm and process that identifies and develops high-potential employees at all levels of the organization.

Each year we attend and sponsor a variety of national conferences and local career fairs that specifically engage talent across various dimensions of diversity including ethnically diverse, gender, military status and sexual orientation.

We have taken steps to support increased teleworking and working environments.

We have established a COVID-19 Safety Policy to ensure safety protocols are implemented throughout the pandemic.

Employees are also required to review our self-screening checklist to ensure they are not experiencing symptoms prior to coming into a facility.

On September 9, 2021, President Biden issued a series of executive orders to combat COVID-19, one of which requires us, as a federal contractor, to have our employees fully vaccinated unless the employee is legally entitled to a religious or medical exemption.

That executive order is currently under a nationwide injunction and its future is uncertain.

We are prepared to comply with the executive order in the event the injunction is lifted.

- Definitive Award Contracts.

- Indefinite Delivery/Indefinite Quantity ("IDIQ") Contracts.

- U.S. General Services Administration ("GSA") Schedule Contracts.

- Other Transaction Authority (“OTA”) agreements.

- the Virginia Consumer Data Protection Act (“VCDPA”), which will go into effect on January 1, 2023, grants Virginia residents the rights to access, correct, delete, know and opt-out of the sale and processing for targeted advertising purposes of their personal information, similar to the CCPA and CPRA.

The VCDPA also provides for additional data protection assessment requirements.

[removed: ][added: ]

For the fiscal year ended December [removed: 31, 2021][added: 30, 2022]

Securities registered pursuant to Section 12(g) of the [removed: Act:][added: Act: None]

| | | | Large accelerated filer | | | [removed: ☒] [added: x] | | | | | | | | | | | | | | | Accelerated filer | | | ☐ | | | | | |

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit [removed: report ☒][added: report.]

As of July [removed: 2, 2021,] [added: 1, 2022,] which was the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of Leidos Holdings, Inc. common stock (based upon the closing price of the stock on the New York Stock Exchange) held by non-affiliates of the registrant was [removed: $14,463,896,796.][added: $13,863,703,025.]

The number of shares issued and outstanding of the registrant’s class of common stock as of February [removed: 8, 2022] [added: 7, 2023,] was [removed: 140,505,454] [added: 136,937,673] shares ($.0001 par value per share).

Portions of Leidos Holdings, Inc.'s definitive Proxy Statement for the 2022 Annual Meeting of Stockholders [removed: ("2022] [added: ("2023] Proxy Statement") are incorporated by reference in Part III of this Annual Report on Form 10-K.

| Item 1. | | | [removed: [Business](#i51c376919b0c4db5a20f52c03ebbff09_16)] [added: [Business](#idb11c8fd3bed4955b736c2a6a1df863c_16)] | | | [removed: [3](#i51c376919b0c4db5a20f52c03ebbff09_16)] [added: [3](#idb11c8fd3bed4955b736c2a6a1df863c_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#i51c376919b0c4db5a20f52c03ebbff09_19)] [added: Factors](#idb11c8fd3bed4955b736c2a6a1df863c_19)] | | | [removed: [16](#i51c376919b0c4db5a20f52c03ebbff09_19)] [added: [16](#idb11c8fd3bed4955b736c2a6a1df863c_19)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#i51c376919b0c4db5a20f52c03ebbff09_22)] [added: Comments](#idb11c8fd3bed4955b736c2a6a1df863c_22)] | | | [removed: [31](#i51c376919b0c4db5a20f52c03ebbff09_22)] [added: [39](#idb11c8fd3bed4955b736c2a6a1df863c_22)] | | |

| Item 2. | | | [removed: [Properties](#i51c376919b0c4db5a20f52c03ebbff09_25)] [added: [Properties](#idb11c8fd3bed4955b736c2a6a1df863c_25)] | | | [removed: [31](#i51c376919b0c4db5a20f52c03ebbff09_25)] [added: [39](#idb11c8fd3bed4955b736c2a6a1df863c_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#i51c376919b0c4db5a20f52c03ebbff09_28)] [added: Proceedings](#idb11c8fd3bed4955b736c2a6a1df863c_28)] | | | [removed: [31](#i51c376919b0c4db5a20f52c03ebbff09_28)] [added: [39](#idb11c8fd3bed4955b736c2a6a1df863c_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#i51c376919b0c4db5a20f52c03ebbff09_31)] [added: Disclosures](#idb11c8fd3bed4955b736c2a6a1df863c_31)] | | | [removed: [31](#i51c376919b0c4db5a20f52c03ebbff09_31)] [added: [39](#idb11c8fd3bed4955b736c2a6a1df863c_31)] | | |

| [Executive Officers of the [removed: Registrant](#i51c376919b0c4db5a20f52c03ebbff09_34)] [added: Registrant](#idb11c8fd3bed4955b736c2a6a1df863c_34)] | | | | | | [removed: [31](#i51c376919b0c4db5a20f52c03ebbff09_34)] [added: [39](#idb11c8fd3bed4955b736c2a6a1df863c_34)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i51c376919b0c4db5a20f52c03ebbff09_40)] [added: Securities](#idb11c8fd3bed4955b736c2a6a1df863c_40)] | | | [removed: [34](#i51c376919b0c4db5a20f52c03ebbff09_40)] [added: [42](#idb11c8fd3bed4955b736c2a6a1df863c_40)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i51c376919b0c4db5a20f52c03ebbff09_46)] [added: Operations](#idb11c8fd3bed4955b736c2a6a1df863c_46)] | | | [removed: [36](#i51c376919b0c4db5a20f52c03ebbff09_46)] [added: [44](#idb11c8fd3bed4955b736c2a6a1df863c_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#i51c376919b0c4db5a20f52c03ebbff09_82)] [added: Risk](#idb11c8fd3bed4955b736c2a6a1df863c_79)] | | | [removed: [48](#i51c376919b0c4db5a20f52c03ebbff09_82)] [added: [55](#idb11c8fd3bed4955b736c2a6a1df863c_79)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#i51c376919b0c4db5a20f52c03ebbff09_85)] [added: Data](#idb11c8fd3bed4955b736c2a6a1df863c_82)] | | | [removed: [50](#i51c376919b0c4db5a20f52c03ebbff09_85)] [added: [56](#idb11c8fd3bed4955b736c2a6a1df863c_82)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i51c376919b0c4db5a20f52c03ebbff09_202)] [added: Disclosure](#idb11c8fd3bed4955b736c2a6a1df863c_181)] | | | [removed: [103](#i51c376919b0c4db5a20f52c03ebbff09_202)] [added: [110](#idb11c8fd3bed4955b736c2a6a1df863c_181)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#i51c376919b0c4db5a20f52c03ebbff09_205)] [added: Procedures](#idb11c8fd3bed4955b736c2a6a1df863c_184)] | | | [removed: [106](#i51c376919b0c4db5a20f52c03ebbff09_205)] [added: [110](#idb11c8fd3bed4955b736c2a6a1df863c_184)] | | |

| Item 9B. | | | [Other [removed: Information](#i51c376919b0c4db5a20f52c03ebbff09_211)] [added: Information](#idb11c8fd3bed4955b736c2a6a1df863c_190)] | | | [removed: [108](#i51c376919b0c4db5a20f52c03ebbff09_211)] [added: [112](#idb11c8fd3bed4955b736c2a6a1df863c_190)] | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#i51c376919b0c4db5a20f52c03ebbff09_217)] [added: Governance](#idb11c8fd3bed4955b736c2a6a1df863c_196)] | | | [removed: [108](#i51c376919b0c4db5a20f52c03ebbff09_217)] [added: [112](#idb11c8fd3bed4955b736c2a6a1df863c_196)] | | |

| Item 11. | | | [Executive [removed: Compensation](#i51c376919b0c4db5a20f52c03ebbff09_220)] [added: Compensation](#idb11c8fd3bed4955b736c2a6a1df863c_199)] | | | [removed: [108](#i51c376919b0c4db5a20f52c03ebbff09_220)] [added: [112](#idb11c8fd3bed4955b736c2a6a1df863c_199)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i51c376919b0c4db5a20f52c03ebbff09_223)] [added: Matters](#idb11c8fd3bed4955b736c2a6a1df863c_202)] | | | [removed: [108](#i51c376919b0c4db5a20f52c03ebbff09_223)] [added: [113](#idb11c8fd3bed4955b736c2a6a1df863c_202)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i51c376919b0c4db5a20f52c03ebbff09_226)] [added: Independence](#idb11c8fd3bed4955b736c2a6a1df863c_205)] | | | [removed: [109](#i51c376919b0c4db5a20f52c03ebbff09_226)] [added: [113](#idb11c8fd3bed4955b736c2a6a1df863c_205)] | | |

| Item 14. | | | [Principal Accounting Fees and [removed: Services](#i51c376919b0c4db5a20f52c03ebbff09_229)] [added: Services](#idb11c8fd3bed4955b736c2a6a1df863c_208)] | | | [removed: [109](#i51c376919b0c4db5a20f52c03ebbff09_229)] [added: [113](#idb11c8fd3bed4955b736c2a6a1df863c_208)] | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#i51c376919b0c4db5a20f52c03ebbff09_235)] [added: Schedules](#idb11c8fd3bed4955b736c2a6a1df863c_214)] | | | [removed: [110](#i51c376919b0c4db5a20f52c03ebbff09_235)] [added: [114](#idb11c8fd3bed4955b736c2a6a1df863c_214)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#i51c376919b0c4db5a20f52c03ebbff09_238)] [added: Summary](#idb11c8fd3bed4955b736c2a6a1df863c_217)] | | | [removed: [115](#i51c376919b0c4db5a20f52c03ebbff09_238)] [added: [119](#idb11c8fd3bed4955b736c2a6a1df863c_217)] | | |

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

- developments in the U.S. government defense and non-defense budgets, including budget reductions, sequestration, implementation of spending limits or changes in budgetary priorities, [removed: or] delays in the U.S. government budget process or [removed: approval] [added: a government shutdown, or the U.S. government’s failure to raise the debt ceiling, which increases the possibility] of [removed: raising] [added: a default by] the [added: U.S. government on its] debt [removed: ceiling;][added: obligations, related credit-rating downgrades, or an economic recession;]

- our ability to accurately estimate [removed: costs] [added: costs, including cost increases due to inflation,] associated with our firm-fixed-price ("FFP") contracts and other contracts;

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b).

| [Part I](#idb11c8fd3bed4955b736c2a6a1df863c_13) | | | | | | | | |

| [Part II](#idb11c8fd3bed4955b736c2a6a1df863c_37) | | | | | | | | |

| Item 6. | | | [\[Reserved\]](#idb11c8fd3bed4955b736c2a6a1df863c_43) | | | [43](#idb11c8fd3bed4955b736c2a6a1df863c_43) | | |

| [Part III](#idb11c8fd3bed4955b736c2a6a1df863c_193) | | | | | | | | |

| [Part IV](#idb11c8fd3bed4955b736c2a6a1df863c_211) | | | | | | | | |

| [Signatures](#idb11c8fd3bed4955b736c2a6a1df863c_220) | | | | | | [120](#idb11c8fd3bed4955b736c2a6a1df863c_220) | | |

- rising inflationary pressures and fluctuations in interest rates;

- the effects of COVID-19 or other health epidemics, pandemics and similar outbreaks may have on our business, financial position, results of operations and/or cash flows;

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

- our ability to comply with the U.S. Foreign Corrupt Practices Act, the U.K. Bribery Act of 2010 and similar worldwide anti-corruption and anti-bribery laws and regulations;

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

(Mark One)

None

| [Part I](#i51c376919b0c4db5a20f52c03ebbff09_13) | | | | | | | | |

| [Part II](#i51c376919b0c4db5a20f52c03ebbff09_37) | | | | | | | | |

| Item 6. | | | [Selected Financial Data](#i51c376919b0c4db5a20f52c03ebbff09_43) | | | [35](#i51c376919b0c4db5a20f52c03ebbff09_43) | | |

| [Part III](#i51c376919b0c4db5a20f52c03ebbff09_214) | | | | | | | | |

| [Part IV](#i51c376919b0c4db5a20f52c03ebbff09_232) | | | | | | | | |

| [Signatures](#i51c376919b0c4db5a20f52c03ebbff09_241) | | | | | | [116](#i51c376919b0c4db5a20f52c03ebbff09_241) | | |

- the impact of the coronavirus pandemic ("COVID-19") or future epidemics on our business, including the potential for facility closures, re-evaluation of U.S. government spending levels and priorities, delay of new contract awards, our ability to recover costs under contracts, the availability, acceptance and efficacy of vaccinations and laws and regulations with respect to vaccinations and insurance challenges;

- rates of inflation;

As of December [removed: 31, 2021,] [added: 30, 2022,] we conducted our operations in [removed: 433] [added: 416] locations in [removed: 40] [added: 42] states, the District of Columbia and various foreign countries.

We occupy approximately [removed: 8.9] [added: 8.6] million square feet of floor space.

Of this amount, we own approximately [removed: 1.2] [added: 1.1] million square feet, and the remaining balance is leased.

As of December [removed: 31, 2021,] [added: 30, 2022,] we owned the following properties:

| Reston, Virginia | | | | | | 1 | | | | | | 62,000 | | | | | | 2.6 | | |

The following is a list of the names and ages (as of February [removed: 15, 2022)] [added: 14, 2023)] of our executive officers, indicating all positions and offices held by each such person and each such person’s business experience during at least the past five years.

| Roger A. Krone | | | | | | [removed: 65] [added: 66] | | | | | | Mr. Krone is Chairman and Chief Executive Officer of Leidos. He joined Leidos as CEO in July 2014. Mr. Krone has held leadership roles at The Boeing Company, McDonnell Douglas Corp. and General Dynamics. He is a member of the Georgia Tech Foundation Board of Trustees, WETA Public Television and Radio in Washington board, [removed: the Greater Washington Urban League chapter advisory] [added: National Air and Space Museum] board, [removed: the Business Roundtable,] [added: Lear Corporation board,] the [removed: Aircraft Owners and Pilots Association Foundation’s Board] [added: National Academy] of [removed: Advisors] [added: Engineering, the Business Roundtable] and [removed: a member of] the Executive Committee of the Aerospace Industries Association. | | |

Leidos Holdings, Inc. Annual Report - [removed: 31][added: 39]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

| Christopher R. Cage | | | | | | [removed: 50] [added: 51] | | | | | | Mr. Cage has served as Executive Vice President and Chief Financial Officer since July 2021. He has served in several capacities throughout his [removed: 23-year] [added: 24-year] tenure with Leidos, including Senior Vice President, Chief Accounting Officer and Corporate Controller, Senior Vice President for Financial Planning and Analysis and Chief Financial Officer for the Health Group. | | |

| Carly E. Kimball | | | | | | [removed: 46] [added: 47] | | | | | | Ms. Kimball has served as Senior Vice President, Chief Accounting Officer and Corporate Controller since July 2021. Previously, she served as the Company’s Assistant Corporate Controller. Ms. Kimball brings over 20 years of experience leading large teams and has extensive proficiency in accounting, auditing, financial reporting, acquisitions and integrations, as well as business operations. Prior to joining Leidos, she served as Chief Financial Officer of CACI Products Company Inc. and senior manager in Ernst & Young’s Aerospace and Defense audit practice. | | |

| Gerard A. Fasano | | | | | | [removed: 56] [added: 57] | | | | | | Mr. Fasano has served as President for our Defense Group since October 2018, and before that, as Chief [added: of] Business Development [added: and] Strategy Officer. Mr. Fasano led the separation from Lockheed Martin and the integration of the Information Systems & Global Solutions Business into Leidos. Prior to joining Leidos, Mr. Fasano served Lockheed Martin Corporation for over 30 years. | | |

| Jerald S. Howe, Jr. | | | | | | [removed: 66] [added: 67] | | | | | | Mr. Howe has served as Executive Vice President and General Counsel since July 2017. Prior to joining Leidos, Mr. Howe was a partner at Fried, Frank, Harris, Shriver & Jacobson LLP, where he served in the firm’s litigation, government contracts, mergers and acquisitions and aerospace and defense practices. Prior to joining Fried Frank, Mr. Howe held general counsel positions at TASC, a leading aerospace and defense company, and at Veridian Corporation, a publicly traded company that provided advanced technology services and solutions to the intelligence community, military and homeland defense agencies. | | |

| James R. Moos | | | | | | [removed: 52] [added: 53] | | | | | | Mr. Moos has served as President for our Civil Group since February 2020. He previously served as Senior Vice President and Acting Group President for the Civil Group since October 2019, and before that, as Deputy President and Chief Operations Officer for the Civil Group. Prior to that, Mr. Moos has served Leidos for over 20 years in several capacities, including Senior Vice President and General Manager of Leidos' former Engineering Solutions Group. | | |

| Elizabeth A. Porter | | | | | | [removed: 51] [added: 52] | | | | | | Ms. Porter has served as President for our Health Group since August 2020 and, before that, as Acting Group President for the Health Group since March 2020. She previously served as Senior Vice President and Operation Manager for Leidos’ Federal Energy and Environment business. Prior to that role, Ms. Porter served as the Department of Defense Information Networks & Mission Partner Program Director. Prior to joining Leidos, Ms. Porter served Lockheed Martin Corporation for over 20 years in several capacities, most recently as Director of Energy Initiatives, Corporate Engineering & Technology*.* | | |

| Roy Stevens | | | | | | [removed: 53] [added: 54] | | | | | | Mr. Stevens has served as President for our Intelligence Group since July 2021, and before that, as Chief of Business Development and Strategy. Prior to joining Leidos, Mr. Stevens served Lockheed Martin Corporation in a variety of executive level positions for over 20 years, most recently as Vice President of Global Solutions under the Information Systems & Global Solutions business, and has also been integral to the merger and acquisition of several companies during his career. He serves on the Board of Directors for Cornerstones. | | |

Leidos Holdings, Inc. Annual Report - [removed: 32][added: 40]

| [removed: Paul Engola] [added: M. Victoria Schmanske] | | | | | | [removed: 50] [added: 60] | | | | | | [removed: Mr. Engola] [added: Ms. Schmanske] has served as [removed: Chief National Security Space Officer] [added: the Executive Vice President of Leidos Corporate Operations] since July [removed: 2021] [added: 2021,] and before that, as [removed: Executive Vice] President [removed: and Chief Human Resources Officer and Head of Business Partnerships, and] [added: for the Intelligence Group. Ms. Schmanske has also served] as [added: the Leidos] Chief Administrative Officer and Deputy [removed: President, Defense] [added: President] and [removed: Intelligence] [added: Chief Operations Officer for the Health] Group. Prior to joining Leidos, [removed: Mr. Engola] [added: Ms. Schmanske] served Lockheed Martin Corporation for [removed: more than 10] [added: over 30] years, most recently as Vice [removed: President, Transportation & Financial Solutions in their former Information Systems & Global Solutions business.] [added: President for Operations IS&GS. She serves on multiple outside boards to include Intelligence and National Security Alliance, U.S. Geospatial Intelligence Foundation and The Women’s Center.] | | |

Leidos Holdings, Inc. Annual Report - [removed: 33][added: 41]

| Steve Cook | | | | | | 55 | | | | | | Mr. Cook has served as President of the Dynetics Group since April 2022. He previously served as Deputy Group President and Operations Manager of the Leidos Innovations Center from February 2020 to March 2022. He joined Dynetics in 2009 as the director of space technologies before leading the Dynetics Space Division and then later overseeing Dynetics’ corporate development efforts. Prior to joining Dynetics, Mr. Cook enjoyed a long and successful career at NASA, serving in such roles as the deputy manager of NASA’s Marshall Space Transportation Programs and Projects Office as well as the manager of the Ares Projects Office at the Marshall Space Flight Center in Huntsville. | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| Debbie Opiekun | | | | | | 60 | | | | | | Ms. Opiekun has served as Chief Business Development Officer since August 2021, and before that, as Senior Vice President and Operations Manager of Leidos’ Military and Veterans Health Solutions business. She previously served as Leidos Deputy Health Group President and Senior Vice President Capture Operations and Excellence. Prior to joining Leidos, Ms. Opiekun served Lockheed Martin Corporation in a variety of positions for over 30 years, most recently as Director Capture Operations and Excellence. | | |

| Thomas C. Sanglier | | | | | | 62 | | | | | | Mr. Sanglier has served as Senior Vice President and Chief Audit Executive since July 2022. Prior to joining Leidos, Mr. Sanglier served as Senior Director, Internal Audit with Raytheon Technologies from November 2016 to June 2022 and as a Partner with Ernst & Young’s Advisory practice serving private and public organizations in the technology, manufacturing and professional services industries during June 2008 to December 2010. He currently serves as Chair of the North American Board and a member of the Global Board of the Institute of Internal Auditors ("IIA"). He has been involved as a volunteer leader with the IIA since becoming a member in 2011. Mr. Sanglier has also served as a member of The IIA’s Audit Committee, Guidance Development Committee, North American Publications Advisory Committee and multiple task forces. | | |

| Maureen Waterston | | | | | | 58 | | | | | | Ms. Waterston has served as Chief Human Resources Officer for Leidos since March 2022. Ms. Waterston brings over 25 years of experience overseeing talent, recruitment, and development; employee and labor relations; compensation and benefits; and diversity and inclusion across a global workforce. Prior to joining Leidos, Ms. Waterston served as Chief Human Resources Officer for Pratt & Whitney from November 2015 to March 2022, Chief Human Resources Officer for United Technologies Building & Industrial Systems and Global Chief Human Resources Officer for Otis Elevator Company. | | |

| James F. Carlini | | | | | | 57 | | | | | | Mr. Carlini has served as Chief Technology Officer of Leidos since June 2019. Prior to joining Leidos, Mr. Carlini founded and operated a national security consultancy from May 2006 to October 2018. Previously, Mr. Carlini served at Northrop Grumman Electronic Systems as Vice President of Advanced Development Programs between July 2002 to May 2006. He also served at the Defense Advanced Research Projects Agency (DARPA) for six years, with his last position being Director of the Special Projects Office. Mr. Carlini is a former member of the United States Army Science Board and the United States Air Force Scientific Advisory Board. He is currently a member of the Department of Defense’s Defense Science Board. | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| David A. King | | | | | | 60 | | | | | | Mr. King has served as Chief Executive Officer of Dynetics, Inc. since 2015. In February 2020, following Leidos' acquisition of Dynetics, Mr. King was elected as a Group President of Leidos with responsibility for the Dynetics business. Mr. King previously served as the Executive Vice President for special programs and President of Dynetics. Prior to joining Dynetics, he spent 25 years with NASA, as Space Shuttle Launch Director and Director of Shuttle Processing, and most recently as the Center Director of NASA Marshall Space Flight Center. | | |

As of February [removed: 8, 2022,] [added: 7, 2023,] there were approximately [removed: 20,047] [added: 19,798] holders of record of Leidos common stock.

During fiscal [removed: 2021] [added: 2022] and [removed: 2020,] [added: 2021,] we declared and paid quarterly dividends totaling [removed: $1.40] [added: $1.44] and [removed: $1.36] [added: $1.40] per share, respectively, of Leidos common stock.

Leidos Holdings, Inc. Annual Report - [removed: 34][added: 42]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

The following graph compares the total cumulative five-year return on Leidos common stock through December [removed: 31, 2021] [added: 30, 2022] to two indices: (i) the Standard & Poor's 500 Composite index and (ii) the Standard & Poor's 500 IT Services Industry index.

The graph assumes an initial investment of $100 on December [removed: 31, 2016,] [added: 29, 2017,] and that dividends, if any, have been reinvested.

[removed: ][added: ]

| Company/Market/Peer Group | | | | | | [removed: 12/30/2016] [added: 12/29/2017] | | | | | | [removed: 12/29/2017] [added: 12/28/2018] | | | | | | [removed: 12/28/2018] [added: 1/3/2020] | | | | | | [removed: 1/3/2020] [added: 1/1/2021] | | | | | | [removed: 1/1/2021] [added: 12/31/2021] | | | | | | [removed: 12/31/2021] [added: 12/30/2022] | | |

[removed: We have] [added: In February 2022, our Board of Directors authorized] a share repurchase program of up to 20 million shares of [removed: Leidos] [added: our] outstanding common stock.

As of December [removed: 31, 2021,] [added: 30, 2022,] the maximum number of shares that may yet be repurchased under the program was [removed: 4,554,346.][added: 15,203,974.]

For the three months ended December [removed: 31, 2021,] [added: 30, 2022,] there were no repurchases of our common stock.

| Leidos Inc. | | | | | | $ | 100.00 | | | | | $ | 82.79 | | | | | $ | 159.84 | | | | | $ | 171.33 | | | | | $ | 147.03 | | | | | $ | 176.50 | |

| S&P 500 Composite Index | | | | | | $ | 100.00 | | | | | $ | 94.80 | | | | | $ | 125.91 | | | | | $ | 148.85 | | | | | $ | 191.58 | | | | | $ | 156.88 | |

| S&P 500 IT Services Index | | | | | | $ | 100.00 | | | | | $ | 103.70 | | | | | $ | 147.74 | | | | | $ | 180.40 | | | | | $ | 189.20 | | | | | $ | 154.13 | |

This share repurchase authorization replaces the previous share repurchase authorization announced in February 2018.

| Leidos Inc. | | | | | | $ | 100.00 | | | | | $ | 129.10 | | | | | $ | 106.88 | | | | | $ | 206.36 | | | | | $ | 221.19 | | | | | $ | 189.82 | |

| S&P 500 Composite Index | | | | | | $ | 100.00 | | | | | $ | 121.83 | | | | | $ | 115.49 | | | | | $ | 153.40 | | | | | $ | 181.35 | | | | | $ | 233.41 | |

| S&P 500 IT Services Index | | | | | | $ | 100.00 | | | | | $ | 131.22 | | | | | $ | 136.07 | | | | | $ | 193.86 | | | | | $ | 236.72 | | | | | $ | 248.27 | |

Leidos Holdings, Inc. Annual Report - [removed: 35][added: 43]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

Refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" for discussion of selected financial data included within this Annual Report on Form 10-K.

[removed: LEIDOS HOLDINGS, INC.][added: Leidos Holdings, Inc. Annual Report - 106]

| [Report of Independent Registered Public Accounting [removed: Firm](#i51c376919b0c4db5a20f52c03ebbff09_94)] [added: Firm](#idb11c8fd3bed4955b736c2a6a1df863c_94)] (PCAOB ID No. 34) | | | | | | [removed: [51](#i51c376919b0c4db5a20f52c03ebbff09_94)] [added: [57](#idb11c8fd3bed4955b736c2a6a1df863c_94)] | | |

| [Consolidated Balance Sheets as [removed: of December] [added: of](#idb11c8fd3bed4955b736c2a6a1df863c_97) [December 30, 2022 and](#idb11c8fd3bed4955b736c2a6a1df863c_97) [December] 31, [removed: 2021 and January 1, 2021](#i51c376919b0c4db5a20f52c03ebbff09_97)] [added: 2021](#idb11c8fd3bed4955b736c2a6a1df863c_97)] | | | | | | [removed: [54](#i51c376919b0c4db5a20f52c03ebbff09_97)] [added: [60](#idb11c8fd3bed4955b736c2a6a1df863c_97)] | | |

| [Consolidated Statements of Income for the fiscal years ended December [added: 30, 2022, December] 31, 2021, [removed: January 1, 2021] and January [removed: 3, 2020](#i51c376919b0c4db5a20f52c03ebbff09_100)] [added: 1, 2021](#idb11c8fd3bed4955b736c2a6a1df863c_100)] | | | | | | [removed: [55](#i51c376919b0c4db5a20f52c03ebbff09_100)] [added: [61](#idb11c8fd3bed4955b736c2a6a1df863c_100)] | | |

| [Consolidated Statements of Comprehensive Income for the fiscal years [removed: ended December] [added: ended](#idb11c8fd3bed4955b736c2a6a1df863c_103) [December 30, 2022,](#idb11c8fd3bed4955b736c2a6a1df863c_103) [December] 31, [removed: 2021, January] [added: 2021](#idb11c8fd3bed4955b736c2a6a1df863c_103)[,](#idb11c8fd3bed4955b736c2a6a1df863c_103) [](#idb11c8fd3bed4955b736c2a6a1df863c_103)[and](#idb11c8fd3bed4955b736c2a6a1df863c_103) [January] 1, [removed: 2021 and January 3, 2020](#i51c376919b0c4db5a20f52c03ebbff09_103)] [added: 2021](#idb11c8fd3bed4955b736c2a6a1df863c_103)] | | | | | | [removed: [56](#i51c376919b0c4db5a20f52c03ebbff09_103)] [added: [62](#idb11c8fd3bed4955b736c2a6a1df863c_103)] | | |

| [Consolidated Statements of Equity for the fiscal years [removed: ended December] [added: ended](#idb11c8fd3bed4955b736c2a6a1df863c_106) [December 30, 2022,](#idb11c8fd3bed4955b736c2a6a1df863c_106) [December] 31, [removed: 2021, January] [added: 2021,](#idb11c8fd3bed4955b736c2a6a1df863c_106) [and](#idb11c8fd3bed4955b736c2a6a1df863c_106) [January] 1, [removed: 2021 and January 3, 2020](#i51c376919b0c4db5a20f52c03ebbff09_106)] [added: 2021](#idb11c8fd3bed4955b736c2a6a1df863c_106)] | | | | | | [removed: [57](#i51c376919b0c4db5a20f52c03ebbff09_106)] [added: [63](#idb11c8fd3bed4955b736c2a6a1df863c_106)] | | |

| [Consolidated Statements of Cash Flows for the fiscal years [removed: ended December] [added: ended](#idb11c8fd3bed4955b736c2a6a1df863c_109) [December 30, 2022,](#idb11c8fd3bed4955b736c2a6a1df863c_109) [December] 31, [removed: 2021, January] [added: 2021,](#idb11c8fd3bed4955b736c2a6a1df863c_109) [and](#idb11c8fd3bed4955b736c2a6a1df863c_109) [January] 1, [removed: 2021 and January 3, 2020](#i51c376919b0c4db5a20f52c03ebbff09_109)] [added: 2021](#idb11c8fd3bed4955b736c2a6a1df863c_109)] | | | | | | [removed: [58](#i51c376919b0c4db5a20f52c03ebbff09_109)] [added: [64](#idb11c8fd3bed4955b736c2a6a1df863c_109)] | | |

| [Notes to Consolidated Financial [removed: Statements](#i51c376919b0c4db5a20f52c03ebbff09_115)] [added: Statements](#idb11c8fd3bed4955b736c2a6a1df863c_115)] | | | | | | [removed: [60](#i51c376919b0c4db5a20f52c03ebbff09_115)] [added: [66](#idb11c8fd3bed4955b736c2a6a1df863c_115)] | | |

Leidos Holdings, Inc. Annual Report - [removed: 50][added: 107]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

We have audited the accompanying consolidated balance sheets of Leidos Holdings, Inc. and subsidiaries (the "Company") as of December [removed: 31, 2021] [added: 30, 2022] and [removed: January 1,] [added: December 31,] 2021, the related consolidated statements of income, comprehensive income, equity, and cash flows, for the fiscal years ended December [added: 30, 2022, December] 31, 2021, [added: and] January 1, 2021, and [removed: January 3, 2020, and] the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December [removed: 31, 2021] [added: 30, 2022] and [removed: January 1,] [added: December 31,] 2021, and the results of its operations and its cash flows for the fiscal years ended December [added: 30, 2022, December] 31, 2021, [added: and] January 1, 2021, [removed: and January 3, 2020,] in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December [removed: 31, 2021,] [added: 30, 2022,] based on criteria established in *Internal Control — Integrated Framework (2013*) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February [removed: 15, 2022,] [added: 14, 2023,] expressed an unqualified opinion on the Company's internal control over financial reporting.

Leidos Holdings, Inc. Annual Report - [removed: 51][added: 108]

Goodwill Valuation – Security [removed: Products] [added: Enterprise Solutions] Reporting Unit - Refer to Note [removed: 3, Note 5] [added: 3] and Note 8 to the financial statements

The Company performed a quantitative impairment evaluation of the goodwill for the Security [removed: Products] [added: Enterprise Solutions] reporting unit by comparing the estimated fair value of the reporting unit to its carrying value.

The goodwill balance was [removed: $6,744] [added: $6,696] million as of December [removed: 31, 2021] [added: 30, 2022] of which [removed: $926] [added: $899] million related to the Security [removed: Products] [added: Enterprise Solutions] reporting unit.

The Company’s accounting policy is to test for impairment on the first day of the fourth quarter of each [removed: year.][added: year and more frequently if events or circumstances indicate that the carrying value may not be recoverable.]

As a result of the quantitative assessment, the Company concluded that the fair value of the reporting unit exceeded the carrying value by [removed: approximately 6%,] [added: $174 million, or 13%,] which resulted in no impairment for the year ended December [removed: 31, 2021.][added: 30, 2022.]

[removed: Given the significant judgments made by management to estimate the fair value of the Security Products reporting unit and the difference between its fair value and carrying value, performing] [added: Performing] audit procedures to develop an independent estimate of the fair value of the Security [removed: Products] [added: Enterprise Solutions] reporting unit, which included evaluating estimates and assumptions related to the cost of capital, forecasts of future cash flows, and terminal growth rates [removed: specifically] due to the sensitivity of the operations to changes in global aviation security products and related services markets, required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

Our audit procedures related to the selection of the discount rate, terminal growth rate and forecasts of future revenues and cash flows for the Security [removed: Products] [added: Enterprise Solutions] reporting unit included the following, among others:

- We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the selection of the discount rate, terminal growth rate and management’s development of [removed: forecasts of future] [added: forecasted] revenues and cash flows.

- We developed an independent estimate of the fair value of the Security [removed: Products] [added: Enterprise Solutions] reporting unit using [removed: both] the income [removed: as well as the market] approach.

[removed: - The market approach analysis was performed by selecting] [added: We selected] guideline peer companies and [removed: developing] [added: developed] enterprise value multiples of revenues and [removed: Earnings Before Interest, Taxes, Depreciation] [added: earnings before interest, taxes, depreciation] and [removed: Amortization.][added: amortization.]

The accounting conclusions for contracts involves judgment, particularly as it relates to determining whether multiple promises within a single contract are highly interrelated and represent a single performance [removed: obligation,] [added: obligation] and whether the Company is acting as a principal in the fulfillment of the identified performance obligations on certain contracts.

Leidos Holdings, Inc. Annual Report - [removed: 52][added: 109]

On firm-fixed-price [removed: (FFP)] [added: ('FFP")] contracts requiring system integration and cost-plus contracts with variable consideration, revenue is recognized over time generally using a method that measures the extent of progress towards completion of a performance obligation, principally using a cost-input method (referred to as the cost-to-cost method).

- We tested the effectiveness of controls over contract revenue, including management’s controls over the initial setup of new contract arrangements and the estimates of total costs [added: and revenues] for identified performance obligations.

- For a selection of contracts, we performed [removed: elements of] the following for each contract:

▪Evaluating the contract within the context of the five-step model prescribed by [removed: ASC 606] [added: accounting principles generally accepted in the United States of America] and that management’s conclusions were appropriate by evaluating the nature of the promises within the contract, the interrelationship of the promised services provided, the pattern by which obligations are fulfilled, the number of performance obligations identified, and which party is acting as principal in the fulfillment of the identified performance obligations.

[removed: - Tested] [added: ◦Tested] the mathematical accuracy of management’s calculation of revenue for the performance obligation.

| | | | | | | December [added: 30, 2022 | | | | | | December] 31, [removed: 2021] [added: 2021] | | | | | | January 1, 2021 | | |

| | | | | | | (in millions) | | | | | | | | | [added: | | | | | |]

| [removed: Assets:] [added: Assets:] | | | | | | | | | | | | | | |

| Cash and cash equivalents | | | | | | $ | [removed: 727] [added: 516] | | | | | $ | [removed: 524] [added: 727] | |

| Receivables, net | | | | | | [removed: 2,189] [added: 2,350] | | | | | | [removed: 2,137] [added: 2,189] | | |

| Inventory, net | | | | | | [removed: 274] [added: 287] | | | | | | [removed: 276] [added: 274] | | |

| Other current assets | | | | | | [removed: 429] [added: 490] | | | | | | [removed: 402] [added: 429] | | |

| Total current assets | | | | | | [removed: 3,619] [added: 3,643] | | | | | | [removed: 3,339] [added: 3,619] | | |

| Property, plant and equipment, net | | | | | | [removed: 670] [added: 847] | | | | | | [removed: 604] [added: 670] | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

We identified goodwill for the Security Enterprise Solutions reporting unit as a critical audit matter due to the significant judgments made by management to estimate the fair value of the reporting unit and the difference between its fair value and carrying value.

- We developed an independent estimate of the fair value of the Security Enterprise Solutions reporting unit using the market approach.

- We calculated our independent expectation of the fair value of the reporting unit by weighting the results of the market and income approaches and compared the resulting fair value to the carrying value of the reporting unit.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| | | | | | | December 30, 2022 | | | | | | December 31, 2021 | | |

| Other long-term assets | | | | | | 388 | | | | | | 439 | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| Credit losses (recoveries), net | | | | | | 1 | | | | | | (9) | | | | | | (68) | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| Net capital distributions to non-controlling interest | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | (7) | | | | | | (7) | | |

| Balance at December 30, 2022 | | | | | | 137 | | | | | | $ | 2,005 | | | | | $ | 2,367 | | | | | $ | (73) | | | | | $ | 4,299 | | | | | $ | 54 | | | | | $ | 4,353 | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| Net income | | | | | | $ | 693 | | | | | $ | 759 | | | | | $ | 629 | |

| Asset impairment charges | | | | | | 40 | | | | | | 4 | | | | | | 12 | | |

| Repayments of borrowings | | | | | | (545) | | | | | | (106) | | | | | | (5,456) | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation.

We combined "Capital distributions to non-controlling interests" and "Capital contributions from non-controlling interests" into "Net capital (distributions to) contributions from non-controlling interests", "Collections on promissory notes" and "Bad debt expense and recoveries" into "Other" on the consolidated statements of cash flows.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

The amendments in this

by the discounting transition through December 31, 2022.

In December 2022, the FASB issued ASU 2022-06 which extends the deadline for application of ASU 2021-01 through December 31, 2024.

Fiscal 2022 ended December 30, 2022.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| | | | | | | December 30, 2022 | | | | | | December 31, 2021 | | | | | | January 1, 2021 | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

We record liabilities for uncertain tax positions in accordance with ASC 740 on the basis of a two-step process in which we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and for those tax positions that meet the more-likely-than-not recognition threshold, we recognize the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| Vehicles and transportation equipment | | | | | | Straight-line | | | | | | 2-15 | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

At December 30, 2022, certain of the Company's equipment leases include residual value guarantees.

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

We reconciled the results of the market approach with the discounted cash flow approach.

- We evaluated the carrying value of the reporting unit.

February 15, 2022

Leidos Holdings, Inc. Annual Report - 53

Leidos Holdings, Inc. Annual Report - 54

| Bad debt expense and recoveries | | | | | | (9) | | | | | | (68) | | | | | | (40) | | |

Leidos Holdings, Inc. Annual Report - 55

| Balance at December 28, 2018 | | | | | | 146 | | | | | | $ | 2,966 | | | | | $ | 372 | | | | | $ | (30) | | | | | $ | 3,308 | | | | | $ | 3 | | | | | $ | 3,311 | |

| Cumulative adjustments related to ASU adoptions | | | | | | — | | | | | | — | | | | | | 48 | | | | | | — | | | | | | 48 | | | | | | — | | | | | | 48 | | |

| Balance at December 28, 2018 | | | | | | 146 | | | | | | 2,966 | | | | | | 420 | | | | | | (30) | | | | | | 3,356 | | | | | | 3 | | | | | | 3,359 | | |

| Bad debt expense and recoveries | | | | | | (9) | | | | | | 13 | | | | | | 12 | | |

| Collections on promissory notes | | | | | | — | | | | | | 5 | | | | | | 5 | | |

| Payments of long-term debt | | | | | | (106) | | | | | | (5,456) | | | | | | (80) | | |

| Capital contributions from non-controlling interests | | | | | | 41 | | | | | | 4 | | | | | | — | | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective the beginning of fiscal 2020, certain contracts were reassigned from the Civil reportable segment to the Defense Solutions reportable segment.

Fiscal 2019 segment results and disclosures have been recast to reflect this change.

ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815-40)

In August 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-06 which simplifies the accounting for convertible debt and convertible preferred stock by removing the requirements to separate embedded conversion features from the host convertible instruments.

Additionally, the amendments in this update simplify the guidance in Subtopic 815-40 by removing certain criteria that must be satisfied in order to classify a contract as equity.

This update also improves the consistency of earnings per share calculations by requiring an entity to use the if-converted method of calculating diluted earnings per share rather than the treasury stock method for convertible instruments and also by requiring the inclusion of the potential effect of shares settled in cash or shares in the diluted earnings per share calculation.

The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2021, and adopted using either a fully or modified retrospective approach.

Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020.

Entities should adopt the guidance as of the beginning of the fiscal year of adoption and cannot adopt the guidance in an interim reporting period.

Effective January 2, 2021, we adopted the requirements of ASU 2020-06 using the modified retrospective method.

The adoption did not have an impact to our financial position, results of operations and earnings per share.

ASU 2021-05, Leases (Topic 842) Lessors—Certain Leases with Variable Lease Payments

In July 2021, the FASB issued ASU 2021-05, which amends lessor’s accounting for leases with variable lease payments classified as sales-type or direct financing leases.

The amendments in this update modify the lease classification requirements for lessors, whereby leases with variable lease payments that are not dependent on a reference index or a rate will be accounted for as operating leases if classification as a sales-type or direct financing lease would have resulted in a day-one loss.

The amendments in this update are effective for public entities for fiscal years beginning after December 15, 2021, as well as interim periods within those fiscal years, and can be adopted using either a prospective or retrospective approach.

Early adoption is also permitted.

ASU 2020-04 and ASU 2021-01, Reference Rate Reform (Topic 848)

The amendments in this Update are effective for public business entities for the fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and must be applied prospectively.

Early adoption is permitted.

We plan to adopt the requirements of ASU 2021-08 using the prospective method effective the first day of Fiscal 2022.

We recognize liabilities for uncertain tax positions when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities.

Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement.

At December 31, 2021, we did not have any lease agreements with residual value guarantees.

Fiscal 2019 amounts have been recast for certain contracts that were reassigned from the Civil reportable segment to the Defense Solutions reportable segment (see "Note 20—Business Segments").

| Other government agencies(1) | | | | | | 685 | | | | | | 2,291 | | | | | | 1,332 | | | | | | 4,308 | | |

Our management, with the participation of our principal executive officer (our Chairman and Chief Executive Officer) and principal financial officer (our Executive Vice President and Chief Financial Officer), has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) as of December [removed: 31, 2021.][added: 30, 2022.]

As part of the ongoing integration of [removed: 1901 Group and Gibbs & Cox,] [added: Cobham Special Mission,] we are in the process of incorporating the controls and related procedures of these businesses.

Other than incorporating controls for [removed: 1901 Group and Gibbs & Cox,] [added: Cobham Special Mission,] there have been no other changes in our internal control over financial reporting that occurred in the fourth quarter of the period ended December [removed: 31, 2021,] [added: 30, 2022,] covered by this Annual Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

As permitted by the SEC rules, management's assessment and conclusion on the effectiveness of our internal control over financial reporting as of December [removed: 31, 2021,] [added: 30, 2022,] excludes an assessment of the internal control over financial reporting of [removed: 1901 Group and Gibbs & Cox,] [added: Cobham Special Mission,] acquired on [removed: January 14, 2021 and May 7, 2021, respectively.][added: October 30, 2022.]

Our management, with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our internal control over financial reporting as of December [removed: 31, 2021,] [added: 30, 2022,] based on criteria established in *Internal Control—Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Our management has assessed the effectiveness of our internal control over financial reporting as of December [removed: 31, 2021,] [added: 30, 2022,] and has concluded that our internal control over financial reporting as of that date was effective.

Leidos Holdings, Inc. Annual Report - [removed: 106][added: 110]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

We have audited the internal control over financial reporting of Leidos Holdings, Inc. and subsidiaries (the [removed: "Company")] [added: “Company”)] as of December [removed: 31, 2021,] [added: 30, 2022,] based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December [removed: 31, 2021,] [added: 30, 2022,] based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the fiscal year ended December [removed: 31, 2021,] [added: 30, 2022,] of the Company and our report dated February [removed: 15, 2022,] [added: 14, 2023,] expressed an unqualified opinion on those financial statements.

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at [removed: 1901 Group and Gibbs & Cox,] [added: Cobham Special Mission,] which [removed: were] [added: was] acquired on [removed: January 14, 2021] [added: October 30, 2022,] and [removed: May 7, 2021, respectively,] whose financial statements [removed: reflect] [added: constitute] total assets of [removed: 1.45% and 3.03%, respectively,] [added: 1.55%, excluding the preliminary value of goodwill] and [removed: revenues constituting 0.35%] [added: intangible assets, 0.15% of revenues,] and [removed: 0.71%, respectively,] [added: 0.28%] of [added: operating income of] the consolidated financial statement amounts as of and for the fiscal year ended December [removed: 31, 2021.][added: 30, 2022.]

Accordingly, our audit did not include the internal control over financial reporting at [removed: 1901 Group and Gibbs & Cox.][added: Cobham Special Mission.]

[removed: Definition] [added: Definition] and Limitations of Internal Control over Financial [removed: Reporting][added: Reporting]

Leidos Holdings, Inc. Annual Report - [removed: 107][added: 111]

During the fourth quarter of fiscal 2022, we completed our acquisition of Cobham Special Mission.

Cobham Special Mission represents approximately 1.55% of our consolidated total assets, excluding the preliminary value of goodwill and intangible assets related to Cobham Special Mission, at December 30, 2022, and 0.15% and 0.28% of our consolidated revenues and operating income, respectively, for the fiscal year ended December 30, 2022.

February 14, 2023

February 14, 2023

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

During the first and second quarter of fiscal 2021, we completed our acquisition of 1901 Group and Gibbs & Cox, respectively.

February 15, 2022

On February 10, 2023, the Board of Directors amended our Amended and Restated Bylaws (as amended, "Bylaws"), effective immediately.

The amendments update various Bylaws provisions to make technical changes reflecting Rule 14a-19 promulgated under the Securities Exchange Act of 1934, and the DGCL, including recent DGCL amendments.

The amendments also update the Bylaws to use gender-neutral terms and include various immaterial modifications that provide clarification and consistency.

The foregoing description of the amendments is qualified in its entirety by reference to the Bylaws, a copy of which is filed as Exhibit 3.2 to this Annual Report on Form 10-K and incorporated by reference herein.

None.

For additional information required by Item 10 with respect to executive officers and directors, including audit committee and audit committee financial experts, procedures by which stockholders may recommend nominees to the Board of Directors and compliance with Section 16(a) of the Securities Exchange Act of 1934, see the information set forth under the captions "Proposal 1–Election of Directors," "Corporate Governance" and "Other Information" appearing in the [removed: 2022] [added: 2023] Proxy Statement, which required information is incorporated by reference into this Annual Report on Form 10-K.

A copy of our code of conduct is available on the Investor Relations section of our website free of charge at *www.leidos.com* by clicking on the links entitled "Investors" then "Corporate Governance" then "Overview" and then "Code of Conduct." [removed: We intend to post on] [added: Documents available under “Corporate Governance” in the Investor Relations section of] our website [removed: any material changes to or waivers from] [added: also include] our [removed: code] [added: Certificate] of [removed: business ethics.][added: Incorporation, Bylaws, Corporate Governance Guidelines, and charters for the Audit and Finance Committee, Human Resources and Compensation Committee, Corporate Governance and Ethics Committee, and Technology and Information Security Committee of the Board of Directors.]

We intend to post on our website any material changes to or waivers from our code of business ethics.

For information required by Item 11 with respect to executive compensation and director compensation, see the information set forth under the captions "Compensation Discussion and Analysis," "Executive Compensation" and "Corporate Governance" in the [removed: 2022] [added: 2023] Proxy Statement, which is incorporated by reference into this Annual Report on Form 10-K.

For information required by Item 11 with respect to compensation committee interlocks and insider participation, see the information set forth under the caption "Corporate Governance" in the [removed: 2022] [added: 2023] Proxy Statement, which is incorporated by reference into this Annual Report on Form 10-K.

Leidos Holdings, Inc. Annual Report - [removed: 108][added: 112]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

For information required by Item 12 with respect to the security ownership of certain beneficial owners and management, see the information set forth under the caption "Other Information" in the [removed: 2022] [added: 2023] Proxy Statement, which is incorporated by reference into this Annual Report on Form 10-K.

Information with respect to our equity compensation plans as of December [removed: 31, 2021,] [added: 30, 2022,] is set forth below:

(2)Represents (i) [removed: 1,850,479] [added: 1,785,729] shares of Leidos common stock reserved for future issuance for service-based awards and performance and market-based awards assuming achievement of the target level of performance for unearned performance and market-based awards (does not include an additional [removed: 250,249] [added: 239,934] shares if the maximum level of performance is achieved) and other stock awards under the 2017 Omnibus Incentive Plan and 2006 Equity Incentive Plan, (ii) [removed: 9,744] [added: 7,423] shares of Leidos common stock issuable pursuant to dividend equivalent rights and (iii) [removed: 2,058,877] [added: 1,748,600] shares of Leidos common stock reserved for future issuance upon the exercise of outstanding options awarded under the 2017 Omnibus Incentive Plan and 2006 Equity Incentive Plan.

(4)Represents [removed: 7,992,462] [added: 7,687,280] and [removed: 3,395,643] [added: 2,897,044] shares of Leidos common stock under the 2017 Omnibus Incentive Plan and 2006 Employee Stock Purchase Plan, respectively.

| Equity compensation plans approved by security holders (1) | | | | | | 3,541,752 | | | (2) | | | $ | 81.45 | | (3) | | | 10,584,324 | | | (4) | | |

| Total | | | | | | 3,541,752 | | | (2) | | | $ | 81.45 | | (3) | | | 10,584,324 | | | | | |

| Equity compensation plans approved by security holders (1) | | | | | | 3,919,100 | | | (2) | | | $ | 65.18 | | (3) | | | 11,388,105 | | | (4) | | |

| Total | | | | | | 3,919,100 | | | (2) | | | $ | 65.18 | | (3) | | | 11,388,105 | | | | | |

For information required by Item 13 with respect to certain relationships and related transactions and the independence of directors and nominees, see the information set forth under the caption "Corporate Governance" in the [removed: 2022] [added: 2023] Proxy Statement, which is incorporated by reference into this Annual Report on Form 10-K.

For information required by Item 14 with respect to principal accounting fees and services, see the information set forth under the caption "Audit Matters" in the [removed: 2022] [added: 2023] Proxy Statement, which is incorporated by reference into this Annual Report on Form 10-K.

Leidos Holdings, Inc. Annual Report - [removed: 109][added: 113]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

[Consolidated Balance [removed: Sheets](#i51c376919b0c4db5a20f52c03ebbff09_97)][added: Sheets](#idb11c8fd3bed4955b736c2a6a1df863c_97)]

[Consolidated Statements of [removed: Income](#i51c376919b0c4db5a20f52c03ebbff09_100)][added: Income](#idb11c8fd3bed4955b736c2a6a1df863c_100)]

[Consolidated Statements of Comprehensive [removed: Income](#i51c376919b0c4db5a20f52c03ebbff09_103)][added: Income](#idb11c8fd3bed4955b736c2a6a1df863c_103)]

[Consolidated Statements of [removed: Equity](#i51c376919b0c4db5a20f52c03ebbff09_106)][added: Equity](#idb11c8fd3bed4955b736c2a6a1df863c_106)]

[Consolidated Statements of Cash [removed: Flows](#i51c376919b0c4db5a20f52c03ebbff09_109)][added: Flows](#idb11c8fd3bed4955b736c2a6a1df863c_109)]

[Notes to Consolidated Financial [removed: Statements](#i51c376919b0c4db5a20f52c03ebbff09_115)][added: Statements](#idb11c8fd3bed4955b736c2a6a1df863c_115)]

| [removed: 3.2] [added: 4.6] | | | | | | [removed: [Amended and Restated Bylaws] [added: [Form] of [removed: Leidos Holdings, Inc.] [added: 2.950% Senior Notes due 2023.] Incorporated by reference to Exhibit [removed: 3.2] [added: 4.2] to our Current Report on Form 8-K filed with the SEC on May [removed: 15, 2020.](https://www.sec.gov/Archives/edgar/data/1336920/000133692020000053/leidosbylawsfinalmay152020.htm)] [added: 12, 2020.](https://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit44-formof2030no.htm)] | | |

Leidos Holdings, Inc. Annual Report - [removed: 110][added: 115]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

| [removed: 4.6] [added: 4.8] | | | | | | [Form of [removed: 2.950%] [added: 4.375%] Senior Notes due [removed: 2023.] [added: 2030.] Incorporated by reference to Exhibit [removed: 4.2] [added: 4.4] to our Current Report on Form 8-K filed with the SEC on May 12, [removed: 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit42-formof2023no.htm)] [added: 2020.](https://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit42-formof2023no.htm)] | | |

| [removed: 4.8] [added: 4.10] | | | | | | [Form of [removed: 4.375%] [added: 2.300%] Senior Notes due [removed: 2030.] [added: 2031.] Incorporated by reference to Exhibit [removed: 4.4] [added: 4.2] to our Current Report on Form 8-K filed with the SEC on [removed: May 12, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit44-formof2030no.htm)] [added: October 9, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000119312520266581/d69928dex42.htm)] | | |

| 4.9 | | | | | | [removed: [Exchange and Registration Rights Agreement,] [added: [Indenture relating to the 2.300% Senior Notes due 2031,] dated [removed: May 12, 2020, by and] [added: as of October 8, 2020] among Leidos, Inc., Leidos Holdings, [removed: Inc., Citigroup Global Markets Inc., MUFG Securities Americas Inc.] [added: Inc, as guarantor,] and [removed: BofA Securities, Inc.] [added: Citibank, N.A., as trustee.] Incorporated by reference to Exhibit [removed: 4.5] [added: 4.1] to our Current Report on Form 8-K filed with the SEC on [removed: May 12, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit45-registration.htm)] [added: October 9, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000119312520266581/d69928dex41.htm)] | | |

| [removed: 4.13] [added: 4.11] | | | | | | [Description of Common Stock. Incorporate by reference to Exhibit 4.13 to our Annual Report on Form 10-K filed with the SEC on February 23, 2021.](https://www.sec.gov/Archives/edgar/data/0001336920/000133692021000010/ldos01012021ex413.htm) | | |

| [removed: 10.2*] [added: 10.20*] | | | | | | [removed: [Leidos] [added: [Form of Notice of Grant of Options for Non-Employee Directors under the Leidos] Holdings, [removed: Inc.'s 2017 Omnibus Incentive Plan. Incorporated] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1022.htm) [Amended and Restated 2017](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1022.htm) [Omnibus](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1022.htm) [I](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1022.htm)[ncentive](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1022.htm) [Plan.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1022.htm) [Incorporated] by reference to Exhibit [removed: 4.3] [added: 10.22] to our [removed: Registration Statement] [added: Annual Report] on Form [removed: S-8] [added: 10-K] filed with the SEC on [removed: June 1, 2017.](http://www.sec.gov/Archives/edgar/data/1336920/000133692017000037/exhibit43toforms-82017omni.htm)] [added: February 23, 2018.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1022.htm)] | | |

Leidos Holdings, Inc. Annual Report - [removed: 111][added: 116]

| [removed: 10.20*] [added: 10.25*] | | | | | | [Form of Notice of Grant of [removed: Options] [added: Restricted Stock Unit Awards (Time-Vesting)] for Non-Employee Directors under the Leidos Holdings, [removed: Inc. 2017 Omnibus Plan. Incorporated] [added: Inc.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm) [A](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm)[mended and](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm) [R](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm)[estated 2017](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm) [Omnibus](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm) [Incentive](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm) [Plan.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm) [Incorporated] by reference to Exhibit [removed: 10.22] [added: 10.27] to our Annual Report on Form 10-K filed with the SEC on February 23, [removed: 2018.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1022.htm)] [added: 2018.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm)] | | |

| 10.21* | | | | | | [Form of Notice of Grant of Options for Employees under the Leidos Holdings, [removed: Inc.] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1021leidos-o.htm) [A](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1021leidos-o.htm)[mended and](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1021leidos-o.htm) [R](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1021leidos-o.htm)[estated] 2017 [removed: Omnibus Plan. Incorporated by reference to Exhibit 10.23 to our Annual Report on Form 10-K filed with the SEC on February 23, 2018.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1023.htm)] [added: Omnibus](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1021leidos-o.htm) [I](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1021leidos-o.htm)[ncentive](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1021leidos-o.htm) [Plan.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1021leidos-o.htm)] | | |

| 10.22* | | | | | | [Form of Notice of Grant of Restricted Stock Unit Awards (Performance-Vesting) for Employees under the Leidos Holdings, [removed: Inc. 2017 Omnibus Plan. Incorporated by reference to Exhibit 10.24 to our Annual Report on Form 10-K filed with the SEC on February 23, 2018.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1024.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1022leidos-p.htm) [Amended and Restated](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1022leidos-p.htm) [2017](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1022leidos-p.htm) [O](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1022leidos-p.htm)[mnibus](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1022leidos-p.htm) [Incentive](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1022leidos-p.htm) [Plan.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1022leidos-p.htm)] | | |

| 10.23* | | | | | | [removed: [Form] [added: [For](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm)[m] of Notice of Grant of Performance Share Awards for Employees under the Leidos Holdings, [removed: Inc. 2017 Omnibus Plan. Incorporated by reference to Exhibit 10.25 to our Annual Report on Form 10-K filed with the SEC on February 23, 2018.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1025.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm) [A](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm)[mended and](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm) [R](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm)[estated](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm) [2017](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm) [Omnibus](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm) [Incentive](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm) [Plan.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1023leidos-f.htm)] | | |

| 10.24* | | | | | | [Form of Notice of Grant of Restricted Stock Unit Awards (Time-Vesting) for Employees under the Leidos Holdings, [removed: Inc. 2017 Omnibus Plan. Incorporated by reference to Exhibit 10.26 to our Annual Report on Form 10-K filed with the SEC on February 23, 2018.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1026.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm) [](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm)[A](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm)[mended and](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm) [R](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm)[estated](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm) [2017](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm) [Omnibus](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm) [Incentive](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm) [Plan.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex1024-leidosx.htm)] | | |

Leidos Holdings, Inc. Annual Report - [removed: 112][added: 117]

| 10.26 | | | | | | [Agreement, dated October 11, 2013, by and among Leidos Renewable Energy, LLC, Plainfield Renewable Energy Owner, LLC and Plainfield Renewable Energy Holdings, LLC. Incorporated by reference to Exhibit 10.4 to our Quarterly Report on Form 10-Q filed with the SEC on December 10, [removed: 2013.](http://www.sec.gov/Archives/edgar/data/1336920/000133692013000009/exhibit104-consensualforec.htm)] [added: 2013.](https://www.sec.gov/Archives/edgar/data/1336920/000133692013000009/exhibit104-consensualforec.htm)] | | |

Leidos Holdings, Inc. Annual Report - [removed: 113][added: 118]

| [removed: 10.48] [added: 10.47] | | | | | | [Form of Commercial Paper Dealer Agreement, dated July 12, 2021, between Leidos, Inc., as issuer, the Company, as guarantor, and the applicable Dealer party thereto. Incorporated by reference to Exhibit 10.1 to our Form 8-K filed with the U.S. Securities and Exchange Commission on July 12, 2021.](https://www.sec.gov/Archives/edgar/data/0001336920/000119312521213204/d203042dex101.htm) | | |

| 21 | | | | | | [Subsidiaries of the [removed: Registrant.](https://www.sec.gov/Archives/edgar/data/1336920/000133692022000007/ldos12312021ex21.htm)] [added: Registrant.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex21.htm)] | | |

| 23.1 | | | | | | [Consent of Independent Registered Public Accounting Firm, Deloitte & Touche [removed: LLP.](https://www.sec.gov/Archives/edgar/data/1336920/000133692022000007/ldos12312021ex231.htm)] [added: LLP.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex231.htm)] | | |

| 31.1 | | | | | | [Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1336920/000133692022000007/ldos12312021ex311.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex311.htm)] | | |

| 31.2 | | | | | | [Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1336920/000133692022000007/ldos12312021ex312.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex312.htm)] | | |

| 32.1 | | | | | | [Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1336920/000133692022000007/ldos12312021ex321.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex321.htm)] | | |

| 32.2 | | | | | | [Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of [removed: 2002.](https://www.sec.gov/Archives/edgar/data/1336920/000133692022000007/ldos12312021ex322.htm)] [added: 2002.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex322.htm)] | | |

| 3.2 | | | | | | [Amended and Restated Bylaws of Leidos Holdings, Inc.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex32amendedand.htm) | | |

| 10.2 * | | | | | | [Leidos Holdings, Inc. Amended and Restated 2017 Omnibus Incentive Plan](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex102leidoshol.htm) | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| 22 | | | | | | [List of Guarantors and Subsidiary Issuers of Guaranteed Securities.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex22.htm) | | |

[Table of Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)

| | | | | | | | | |

| 4.10 | | | | | | [Indenture relating to the 2.300% Senior Notes due 2031, dated as of October 8, 2020 among Leidos, Inc., Leidos Holdings, Inc, as guarantor, and Citibank, N.A., as trustee. Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on October 9, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000119312520266581/d69928dex41.htm) | | |

| 4.11 | | | | | | [Form of 2.300% Senior Notes due 2031. Incorporated by reference to Exhibit 4.2 to our Current Report on Form 8-K filed with the SEC on October 9, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000119312520266581/d69928dex42.htm) | | |

| 4.12 | | | | | | [Registration Rights Agreement, dated October 8, 2020, among Leidos, Inc., Leidos Holdings, Inc., BofA Securities, Inc., Citigroup Global Markets Inc. and MUFG Securities Americas Inc. Incorporated by reference to Exhibit 4.3 to our Current Report on Form 8-K filed with the SEC on October 9, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000119312520266581/d69928dex43.htm) | | |

| 10.25* | | | | | | [Form of Notice of Grant of Restricted Stock Unit Awards (Time-Vesting) for Non-Employee Directors under the Leidos Holdings, Inc. 2017 Omnibus Plan. Incorporated by reference to Exhibit 10.27 to our Annual Report on Form 10-K filed with the SEC on February 23, 2018.](http://www.sec.gov/Archives/edgar/data/1336920/000133692018000008/ldos12292017ex1027.htm) | | |

| 10.47 | | | | | | [364-Day Term Loan Credit Agreement, dated as of June 18, 2020, by and among Leidos Holdings, Inc., Leidos, Inc., the guarantors party thereto, the lenders party thereto and Mizuho Bank, Ltd., as administrative agent. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K filed with the SEC on June 18, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000133692020000056/leidos364-dayloanxcreditag.htm) | | |

| 22 | | | | | | [List of Guarantors and Subsidiary Issuers of Guaranteed Securities. Incorporated herein by reference from the Company's Registration Statement on Form S-4, filed with the U.S. Securities and Exchange Commission on May 6, 2021.](https://www.sec.gov/Archives/edgar/data/0001336920/000119312521153482/d397284dex22.htm) | | |

Leidos Holdings, Inc. Annual Report - [removed: 115][added: 119]

[Table of [removed: Contents](#i51c376919b0c4db5a20f52c03ebbff09_7)][added: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)]

Dated: February [removed: 15, 2022][added: 14, 2023]

| /s/ Roger A. Krone | | | Principal Executive Officer | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /s/ Christopher R. Cage | | | Principal Financial Officer | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /s/ Carly E. Kimball | | | Principal Accounting Officer | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /s/ Gregory R. Dahlberg | | | Director | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /s/ David G. Fubini | | | Director | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /s/ Miriam E. John | | | Director | | | February [removed: 15, 2022] [added: 14, 2023] | | |

| /s/ Robert C. Kovarik, Jr. | | | Director | | | February [removed: 15, 2022] [added: 14, 2023] | | |