Leidos Holdings (LDOS) 10-K risk factor changes: FY2023 vs FY2022

If any of these risks or uncertainties actually occurs, our business, financial condition or operating results could be materially [removed: harmed] [added: harmed,] and our stock price could decline.

Additional risks and uncertainties not currently known to us or that we currently believe are immaterial also may materially harm our business, financial condition or operating [removed: results and result in a decline in our stock price.*][added: results.]

- The U.S. government may terminate, cancel, [removed: modify] [added: modify, renew on less favorable terms] 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.

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

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- 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 [removed: significant] [added: material] adverse impact on our [removed: business] [added: business, reputation] and [removed: reputation.][added: future results.]

- 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 [removed: clients] [added: customers] and cause harm to our reputation or competitive position.

- Goodwill and other intangible assets represent significant assets on our balance sheet and any impairment of these assets could negatively impact our results of [removed: operations.][added: operations, and shareholders' equity.]

- Changes in tax laws and regulations or exposure to additional tax liabilities could adversely affect our financial [removed: results][added: results.]

Our total revenues 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. government generated approximately [added: 87% in fiscal 2023,] 86% in fiscal 2022, and 87% in fiscal [removed: 2021 and 2020.][added: 2021.]

If any of the foregoing occurs, the amount of business with the U.S. government and other customers could decrease, and our business, future revenues, financial [removed: condition] [added: condition,] and growth prospects could be adversely affected.

Revenues under contracts with the DoD and U.S. Intelligence Community, either as a prime contractor or subcontractor to other contractors, represented approximately [removed: 44%] [added: 49%] of our total revenues for fiscal [removed: 2022 and 2021,] [added: 2023,] and [removed: 49%] [added: 44%] of our total revenues for [added: both] fiscal [removed: 2020.][added: 2022 and 2021.]

[removed: Levels of] U.S. government and DoD spending [added: levels] are difficult to predict and subject to significant risk.

[removed: Current U.S. government spending levels for defense-related or other programs may not be sustained and future] [added: Future] spending and program authorizations may not increase or may decrease or shift to programs in areas where we do not provide services or are less likely to be awarded contracts.

Such changes in spending authorizations and budgetary priorities may occur as a result of uncertainty surrounding the federal [removed: budget,] [added: budget and the federal government’s ability to meet its debt obligations, changes in the priorities of the U.S. Presidential Administration as a result of the upcoming election cycle,] increasing political pressure and legislation, shifts in spending priorities from defense-related or other programs as a result of competing demands for federal funds, the number and intensity of military conflicts or other factors.

For example, the [removed: military conflict] [added: conflicts] between Russia and Ukraine [removed: has] [added: and Israel and Hamas have] resulted in increased security assistance to [added: each of] Ukraine [added: and Israel] to help preserve [removed: its] [added: their] territorial integrity, secure [removed: its] [added: their] borders, and [added: with respect to the Russia/Ukraine conflict,] improve interoperability with NATO.

Our operating results could also be adversely affected by spending caps or changes in the [removed: budgetary priorities of the] U.S. government or the [removed: DoD,] [added: DoD's budgetary priorities,] as well as delays in program starts or the award of contracts or task orders under contracts.

The U.S. government also conducts periodic reviews of U.S. defense strategies and priorities, which may shift DoD or other budgetary priorities, reduce overall U.S. government [removed: spending] [added: spending,] or delay contract or task order awards for defense-related or other programs from which we would otherwise expect to derive a significant portion of our future revenues.

A significant decline in overall U.S. government spending, including in the areas of national security, [removed: intelligence] [added: intelligence,] and homeland security, a significant shift in its spending priorities, the substantial reduction or elimination of particular defense-related programs or significant delays in contract or task order awards for large programs could adversely affect our future revenues and results of operations and limit our growth prospects.

In addition, our ability to grow in advanced technology areas, such as hypersonics programs, space [removed: exploration] [added: exploration,] and classified programs, will also be affected by the overall budget environment, whether development programs transition to production and the timing of such transition, all of which are dependent on U.S. Government authorization and funding.

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

A federal government shutdown could, in turn, result in our incurrence of substantial labor or other costs without reimbursement under customer contracts, the delay or cancellation of key [removed: programs] [added: programs,] or the [removed: delay] [added: delay, or cancellation] of contract payments, which could have a negative effect on our cash flows and adversely affect our future results of operations.

The competitive bidding process involves substantial costs, including significant cost and managerial time to prepare bids and proposals for contracts that may not be awarded to us, may be split among [removed: competitors] [added: competitors,] or that may be awarded but for which we do not receive meaningful task orders, and several risks, including the risk of inaccurately estimating the resources and costs that will be required to fulfill any contract we win.

Following contract award, we may encounter significant expense, delay, contract [removed: modifications] [added: modifications,] or even contract loss as a result of our competitors protesting the award of contracts to us in competitive bidding.

We are also experiencing increased [removed: competition generally,] [added: competition,] which impacts our ability to obtain contracts; see the risk factor “We face intense competition that can impact our ability to obtain contracts [removed: and therefore] [added: and, therefore,] affect our future revenues and growth prospects.” Our failure to compete effectively in this procurement environment would adversely affect our revenues and profitability.

The U.S. government may terminate, cancel, [removed: modify] [added: modify, renew on less favorable terms] or curtail our contracts at any time prior to their [removed: completion and,] [added: completion, and] if we do not replace them, this may adversely affect our future revenues and profitability.

Any decisions by the U.S. government to not exercise contract options or to terminate, cancel, [removed: modify] [added: modify, renew on less favorable terms] or curtail our major programs or contracts would adversely affect our revenues, revenue growth and profitability.

[removed: We] [added: In addition, we] have experienced and continue to experience [removed: periodic] performance issues under certain of our contracts.

We face intense competition that can impact our ability to obtain contracts [removed: and therefore] [added: and, therefore,] affect our future revenues and growth prospects.

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

To remain competitive, we must consistently provide superior service, [removed: technology] [added: technology,] and performance [added: to our customers] on a cost-effective basis [removed: to our customers] while understanding customer priorities and maintaining customer relationships.

These competitive pressures in our market or our failure to compete effectively may result in fewer orders, reduced revenue and [removed: margins] [added: margins,] and loss of market share.

Further industry consolidation may also impact customers’ perceptions of the viability of smaller or even mid-size software firms [removed: and consequently] [added: and, consequently,] customers’ willingness to purchase from such firms.

Such laws and regulations may [removed: potentially] impose added costs on our business and our failure to comply with them may lead to civil or criminal penalties, termination of our U.S. government contracts, or suspension or debarment from contracting with federal agencies.

Organizational conflicts of interest arise when we engage in activities that may make us unable to render impartial assistance or advice to the U.S. government, impair our objectivity in performing contract [removed: work] [added: work,] or provide us with an unfair competitive advantage.

A [removed: conflict of interest] [added: conflict-of-interest] issue that precludes our competition for or performance on a significant program or contract could harm our prospects.

Our industry has experienced, and we expect it will continue to experience, significant changes to business practices as a result of an increased focus on affordability, [removed: efficiencies] [added: efficiencies,] and recovery of costs, among other items.

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

Any new contracting requirements or procurement methods could be costly or administratively difficult to implement and could adversely affect our future revenues, [removed: profitability] [added: profitability,] and prospects.

U.S. government contractors (including their subcontractors and others with whom they do business) operate in a highly regulated environment and are routinely audited and reviewed by the U.S. government and its agencies, including the DCAA, DCMA, the DoD Inspector [removed: General] [added: General,] and others.

In that event, the trading price of our stock could decline, and you could lose part or all of your investment*.

- Deterioration of economic conditions or weakening in credit or capital markets may have a material adverse effect on our business, results of operations and financial condition.

- We cannot predict the consequences of current or future geopolitical events, but they may adversely affect the markets in which we operate and our results of operations.

- Global supply chain issues and inflationary pressures have disrupted supply and increased the prices of goods and services, which could raise the costs associated with providing our services, diminish our ability to compete for new contracts or task orders and reduce customer buying power.

*•*Efforts by the U.S. government to revise its organizational conflict of interest rules could limit our ability to successfully compete for new contracts or task orders, which would adversely affect our results of operations.

- We utilize artificial intelligence, which could expose us to liability or adversely affect our business, especially if we are unable to compete effectively with others in adopting artificial intelligence.

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Current U.S. government spending levels for defense-related or other programs may not be sustained.

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Deterioration of economic conditions or weakening in credit or capital markets may have a material adverse effect on our business, results of operations and financial condition.

Volatile, negative, or uncertain economic conditions, an increase in the likelihood of a recession, or concerns about these or other similar risks may negatively impact our customers’ ability and willingness to fund their projects.

For example, declines in state and local tax revenues, as well as other economic declines, may result in lower government spending.

Our customers reducing, postponing, or canceling spending on projects in respect of which we provide services may reduce demand for our services quickly and with little warning, which could have a material adverse effect on our business, results of operations, and financial condition.

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Moreover, instability in the credit or capital markets in the U.S., including as a result of failures of financial institutions and any related market-wide reduction in liquidity, or concerns or rumors about events of these kinds or similar risks, could affect the availability of credit or our credit ratings, making it relatively difficult or expensive to obtain additional capital at competitive rates, on commercially reasonable terms or in sufficient amounts, or at all, thus making it more difficult or expensive for us to access funds or refinance our existing indebtedness, or obtain financing for acquisitions.

Such instability could also cause counterparties, including vendors, suppliers, and subcontractors, to be unable to perform their obligations or to breach their obligations to us under our contracts with them.

In addition, instability in the credit or capital markets could negatively impact our customers’ ability to fund their projects and, therefore, utilize our services, which could have a material adverse effect on our business, results of operations, and financial condition.

We cannot predict the consequences of current or future geopolitical events, but they may adversely affect the markets in which we operate and our results of operations.

Ongoing instability and current conflicts in global markets, including in Eastern Europe, the Middle East, and Asia, and the potential for other conflicts and future terrorist activities and other recent geopolitical events throughout the world, including the ongoing conflict between Russia and Ukraine, the ongoing Israel/Hamas conflict and its regional effects, and increased tensions in Asia, have created and may continue to create economic and political uncertainties and impacts that could have a material adverse effect on our business, operations, and profitability.

These types of matters cause uncertainty in financial markets and may significantly increase the political, economic and social instability in the geographic areas in which we operate.

In addition, in connection with the current status of international relations with Russia, particularly in light of the conflict between Russia and Ukraine, the U.S. government has imposed enhanced export controls on certain products and sanctions on certain industry sectors and parties in Russia.

The governments of other jurisdictions in which we operate, such as the European Union and Canada, may also implement sanctions or other restrictive measures.

These potential sanctions and export controls, as well as any responses from Russia, could adversely affect us and/or our supply chain, business partners, or customers.

Global supply chain issues and inflationary pressures have disrupted supply and increased the prices of goods and services, which could raise the costs associated with providing our services, diminish our ability to compete for new contracts or task orders and reduce customer buying power.

For a variety of reasons, the global economy in which we operate has faced, and may continue to face, heightened inflationary pressure, impacting the cost of doing business in both supply and labor markets.

These inflationary pressures have been and could continue to be exacerbated by geopolitical turmoil and economic policy actions, and the duration of such pressures is uncertain.

We generate revenue through various fixed-price and multi-year government contracts, our primary customer being the U.S. government, which has traditionally been viewed as less affected by inflationary pressures.

However, our approach to include modest annual price escalations in our bids for multi-year work may be insufficient to account for and mitigate inflationary cost pressures, which may result in cost overruns on contracts.

This could result in reduced profits or even losses if inflation increases, particularly for fixed-priced contracts and our longer-term multi-year contracts as contractual prices become less favorable to us over time.

In the competitive environment in which we operate as a government contractor, the lack of pricing leverage and power to renegotiate long-term, multi-year contracts, coupled with reduced customer buying power as a result of inflation, could reduce our profits, disrupt our business or otherwise materially adversely affect our results of operations.

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Government contract laws and regulations can impose terms or obligations that are different than those typically found in commercial transactions.

One of the significant differences is that the U.S. Government may terminate any of our government contracts, not only for default based on our performance but also at its convenience.

Generally, prime contractors have a similar right under subcontracts related to government contracts.

If a contract is terminated for convenience, we typically would be entitled to receive payments for our allowable costs incurred and the proportionate share of fees or earnings for the work performed.

However, to the extent insufficient funds have been appropriated by the U.S. Government to the program to cover our costs upon termination for convenience, the U.S. Government may assert that it is not required to appropriate additional funding.

If a contract is terminated for default, the U.S. Government could make claims to reduce the contract value or recover its procurement costs and could assess other special penalties, exposing us to liability and adversely affecting our ability to compete for future contracts and orders.

In addition, the U.S. Government could terminate a prime contract under which we are a subcontractor, notwithstanding the fact that our performance and the quality of the products or services we delivered were consistent with our contractual obligations as a subcontractor.

- 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.

- Our business is subject to disruption caused by physical or transition risks that could adversely affect our operations, profitability and overall financial position.

- Our services and operations sometimes involve using, handling or disposing of hazardous substances, which could expose us to potentially significant liabilities.

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

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

Our failure to adequately obtain, maintain, protect, defend and enforce our proprietary information and intellectual property rights could adversely affect our competitive position.

- We cannot assure you that we will continue to pay or increase dividends on our common stock or to repurchase shares of our common stock.

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

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 information technology systems to receive specific third-party certifications relating to specified cybersecurity standards to be eligible for contract awards.

In addition, our subcontractors, and in some cases our vendors, also may be required to adhere to the CMMC program requirements and, potentially, to achieve certification.

We are in the process of evaluating our readiness and preparing for the CMMC, but to the extent we are unable to achieve certification in advance of contract awards that specify the requirement in the future, we will be unable to bid on such contract awards or follow-on awards for existing work with the DoD, depending on the level of standard as required for each solicitation, which could adversely impact our revenue and profitability.

In addition, any obligations that may be imposed on us under the CMMC may be different from or in addition to those otherwise required by applicable laws and regulations, which may cause additional expense for compliance.

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.

In addition, the global spread of COVID-19 resulted in a substantial decline in demand for air travel, which 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 by consumers to travel, each of which has, and could continue to, impact our business.

Recently, the U.S. government has raised concerns about a potential increase in cyber-attacks generally as a result of the military conflict between Russia and Ukraine and the related sanctions imposed by the United States and other countries.

*In this section, we discuss our financial condition, changes in financial condition and results of our operations for the year ended December [removed: 30, 2022,] [added: 29, 2023,] compared to the year ended December [removed: 31, 2021.][added: 30, 2022.]

For a discussion and analysis comparing our results for the year ended December [removed: 31, 2021,] [added: 30, 2022,] to the year ended [removed: January 1,] [added: December 31,] 2021, see our Annual Report on Form 10-K for the year ended December [removed: 31, 2021,] [added: 30, 2022,] filed with the SEC on February [removed: 15, 2022,] [added: 14, 2023,] under Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”*

Our customers include the U.S. Department of Defense ("DoD"), the U.S. Intelligence Community, the U.S. Department of Homeland Security, the Federal Aviation Administration, the Department of Veterans [removed: Affairs] [added: Affairs, National Aeronautics] and [added: Space Administration ("NASA") and] many other U.S. civilian, state and local government agencies, foreign government agencies and commercial businesses.

Approximately [removed: 8%] [added: 9%] of our revenues [removed: and tangible long-lived assets] are generated by [removed: or owned by] entities located outside of the United States.

[removed: We operate] [added: Our business has been aligned] in three reportable segments: Defense Solutions, Civil and Health.

- achieving annual revenue growth through internal collaboration and better leveraging of key differentiators across our company and the deployment of resources and investments into [removed: higher] [added: profitable] growth markets;

*Sales Trend.* For fiscal [removed: 2022,] [added: 2023,] revenues increased [removed: $0.7] [added: $1.0] billion, or [removed: 5%,] [added: 7%,] compared to fiscal [removed: 2021,] [added: 2022,] primarily due to [added: program wins,] a net increase in volumes on certain [removed: programs, program wins] [added: programs] and a net increase in revenues [removed: related] [added: attributable] to our business acquisitions.

The increase was partially offset by the completion of certain contracts and [added: an] unfavorable [added: net impact from] exchange rate movements.

Leidos Holdings, Inc. Annual Report - [removed: 44][added: 55]

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*Operating Expenses and Income Trend.* For fiscal [removed: 2022,] [added: 2023,] operating expenses increased by [removed: $0.7] [added: $1.5] billion, or [removed: 6%,] [added: 11%,] compared to fiscal [removed: 2021.][added: 2022.]

Operating margin for fiscal [removed: 2022] [added: 2023] was [removed: 7.6%] [added: 4.0%] compared to [removed: 8.4%] [added: 7.6%] for fiscal [removed: 2021.][added: 2022.]

Operating income was [removed: $1,088] [added: $621] million, a [removed: $64] [added: $467] million decrease compared to fiscal [removed: 2021.][added: 2022.]

[removed: In fiscal 2022, we] [added: We] generated approximately [added: 87% of our total revenues from contracts with the U.S. government in fiscal 2023, as compared to] 86% of our total revenues from contracts with the U.S. [removed: government,] [added: government in fiscal 2022,] 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 [added: 49% and] 44% of our total revenues for fiscal [removed: 2022.][added: 2023 and 2022, respectively.]

Sales to customers in international markets represented approximately [added: 9% of total revenues for fiscal 2023, as compared to] 8% of total revenues for fiscal 2022.

Leidos Holdings, Inc. Annual Report - [removed: 45][added: 56]

| | | | | | | Year Ended | | | | | | | | | | | | [removed: 2022] [added: 2023] to [removed: 2021] [added: 2022] | | | | | | | | |

| | | | | | | December [removed: 30, 2022] [added: 29, 2023] | | | | | | December [removed: 31, 2021] [added: 30, 2022] | | | | | | Dollar change | | | | | | Percent change | | |

| Cost of revenues | | | | | | [removed: 12,312] [added: 13,194] | | | | | | [removed: 11,723] [added: 12,312] | | | | | | [removed: 589] [added: 882] | | | | | | [removed: 5] [added: 7] | | % |

| Selling, general and administrative expenses | | | | | | [removed: 950] [added: 942] | | | | | | [removed: 860] [added: 951] | | | | | | [removed: 90] [added: (9)] | | | | | | [removed: 10] [added: (1)] | | % |

| Acquisition, integration and restructuring costs | | | | | | [removed: 17] [added: 24] | | | | | | [removed: 27] [added: 17] | | | | | | [removed: (10)] [added: 7] | | | | | | [removed: (37)] [added: 41] | | % |

| Asset impairment charges | | | | | | [removed: 40] [added: 91] | | | | | | [removed: 4] [added: 40] | | | | | | [removed: 36] [added: 51] | | | | | | [removed: *NM*] [added: 128] | | [added: %] |

| Equity earnings of non-consolidated subsidiaries | | | | | | [removed: (12)] [added: (30)] | | | | | | [removed: (20)] [added: (12)] | | | | | | [removed: 8] [added: (18)] | | | | | | [removed: (40)] [added: 150] | | % |

| Operating income | | | | | | [removed: 1,088] [added: 621] | | | | | | [removed: 1,152] [added: 1,088] | | | | | | [removed: (64)] [added: (467)] | | | | | | [removed: (6)] [added: (43)] | | % |

| Non-operating expense, net | | | | | | [removed: (202)] [added: (218)] | | | | | | [removed: (185)] [added: (202)] | | | | | | [removed: (17)] [added: (16)] | | | | | | [removed: 9] [added: 8] | | % |

| Income before income taxes | | | | | | [removed: 886] [added: 403] | | | | | | [removed: 967] [added: 886] | | | | | | [removed: (81)] [added: (483)] | | | | | | [removed: (8)] [added: (55)] | | % |

| Income tax expense | | | | | | [removed: (193)] [added: (195)] | | | | | | [removed: (208)] [added: (193)] | | | | | | [removed: 15] [added: (2)] | | | | | | [removed: (7)] [added: 1] | | % |

| Net income | | | | | | [removed: 693] [added: 208] | | | | | | [removed: 759] [added: 693] | | | | | | [removed: (66)] [added: (485)] | | | | | | [removed: (9)] [added: (70)] | | % |

| Less: net income attributable to non-controlling interest | | | | | | [removed: 8] [added: 9] | | | | | | [removed: 6] [added: 8] | | | | | | [removed: 2] [added: 1] | | | | | | [removed: 33] [added: 13] | | % |

| Net income attributable to Leidos common stockholders | | | | | | [removed: $ | 685 | | | | | $ | 753 | | | | | $ | (68) | | | | | (9)] [added: 8] | | [removed: %] |

| *Operating [removed: income] margin* | | | | | | [removed: 7.6] [added: 4.0] | | % | | | | [removed: *8.4*] [added: *7.6*] | | *%* | | | | | | | | | | | | |

| Defense Solutions | | | | | | December [removed: 30, 2022] [added: 29, 2023] | | | | | | December [removed: 31, 2021] [added: 30, 2022] | | | | | | Dollar change | | | | | | Percent change | | |

| Operating income | | | | | | [removed: 541] [added: 636] | | | | | | [removed: 569] [added: 541] | | | | | | [removed: (28)] [added: 95] | | | | | | [removed: (5)] [added: 18] | | % |

| *Operating [removed: income] margin* | | | | | | [removed: 6.6] [added: 7.3] | | % | | | | [removed: *7.1*] [added: *6.6*] | | *%* | | | | | | | | | | | | |

The increase in revenues for fiscal [removed: 2022] [added: 2023] as compared to fiscal [removed: 2021] [added: 2022] was primarily attributable to program wins, a net increase in volumes on certain programs and a [removed: $63] [added: $94] million net increase in revenues related to our [removed: acquisitions made in the second and third quarters from the prior year and the] Cobham Special Mission acquisition made in the [removed: current year.][added: last quarter of fiscal 2022.]

The [removed: decrease] [added: increase] in operating income for fiscal [removed: 2022] [added: 2023] as compared to fiscal [removed: 2021] [added: 2022] was primarily attributable to [removed: the completion of certain contracts,] [added: program wins, a] net [removed: write-downs] [added: increase in volumes, improved cost control and net write-ups] on certain contracts, [removed: increased amortization expense] [added: partially offset by the completion] of [removed: $8 million and $6 million related to unfavorable exchange rate movements.][added: certain contracts.]

The decrease was partially offset by program [removed: wins and] [added: wins,] a net increase in volumes on certain [removed: programs.][added: programs and lower amortization expenses.]

Leidos Holdings, Inc. Annual Report - [removed: 46][added: 57]

| Civil | | | | | | December [removed: 30, 2022] [added: 29, 2023] | | | | | | December [removed: 31, 2021] [added: 30, 2022] | | | | | | Dollar change | | | | | | Percent change | | |

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

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

The decrease was primarily attributable to a net increase in impairment charges of $647 million mainly in our SES reporting unit (see "Note 8—Goodwill and Intangible Assets" of the notes to the consolidated financial statements contained within this Annual Report on Form 10-K).

On January 18, 2024, Congress passed a third continuing resolution (“CR”) to avoid a federal government shutdown.

The resolution is structured in two tiers with the first deadline being March 1, 2024, for Military Construction-VA, Agriculture, Energy-Water, and Transportation-HUD funding bills.

The eight remaining bills have a March 8, 2024, deadline.

The CR gives lawmakers extra time to consider the appropriations bills for government fiscal year (“GFY”) 2024.

Failure to pass the appropriations bills or another CR by March 1 and March 8, 2024, will result in a partial or complete federal government shutdown.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| Revenues | | | | | | $ | 15,438 | | | | | $ | 14,396 | | | | | $ | 1,042 | | | | | 7 | | % |

| Goodwill impairment charges | | | | | | 596 | | | | | | — | | | | | | 596 | | | | | | *NM* | | |

| Net income attributable to Leidos common stockholders | | | | | | $ | 199 | | | | | $ | 685 | | | | | $ | (486) | | | | | (71) | | % |

| | | | | | | Year Ended | | | | | | | | | | | | 2023 to 2022 | | | | | | | | |

| Revenues | | | | | | $ | 8,732 | | | | | $ | 8,244 | | | | | $ | 488 | | | | | 6 | | % |

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| | | | | | | Year Ended | | | | | | | | | | | | 2023 to 2022 | | | | | | | | |

| Revenues | | | | | | $ | 3,664 | | | | | $ | 3,464 | | | | | $ | 200 | | | | | 6 | | % |

| Operating (loss) income | | | | | | (413) | | | | | | 234 | | | | | | (647) | | | | | | (276) | | % |

The decrease was partially offset by $19 million in legal reserves and fees resulting from an adverse arbitration ruling in the prior year.

| | | | | | | Year Ended | | | | | | | | | | | | 2023 to 2022 | | | | | | | | |

| Revenues | | | | | | $ | 3,042 | | | | | $ | 2,688 | | | | | $ | 354 | | | | | 13 | | % |

The increase in operating income for fiscal 2023 as compared to fiscal 2022 was primarily attributable to increased earnings from incentive awards and a net increase in volumes on certain programs, partially offset by a net decrease in the recovery of expenditures in the medical examination business.

| | | | | | | Year Ended | | | | | | | | | | | | 2023 to 2022 | | | | | | | | |

The effective tax rate for fiscal 2023 was unfavorably impacted primarily by non tax deductible goodwill impairments.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

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

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

We are evaluating the potential impact of the rules but currently do not expect them to have a material impact.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

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

In February 2023, we issued and sold $750 million 5.75% fixed-rate senior notes.

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

The proceeds of the Term Loan Facility and cash on hand were used to repay in full all indebtedness, terminate all commitments and discharge all guarantees existing in connection with a predecessor $1.9 billion senior unsecured term loan facility and a senior unsecured revolving facility.

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

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

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

The activity for fiscal 2023 included a $1,210 million payment to discharge the existing Term Loan Facility, a $498 million payment to discharge the $500 million 2.95% notes, due May 2023, and a principal repayment of $320 million to discharge the 364-day term loan credit agreement.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

Our tax cash payments increased by approximately $260 million in fiscal 2023, primarily

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

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

Effective July 3, 2021, certain contracts were reassigned from the Defense Solutions reportable segment to the Civil reportable segment.

Impact on the first half of fiscal 2021 segment results were determined to be immaterial and have not been recast to reflect this change.

- increasing headcount and internal direct labor content on our contract portfolio;

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

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.

*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.

The full extent of the impact of the COVID-19 pandemic on our operational and financial performance, including our ability to execute on programs in the expected timeframe, will depend on future developments, including the duration and spread of the pandemic and the distribution of vaccines, all of which are uncertain and cannot be predicted.

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.

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

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

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

The increase was partially offset by the completion of certain contracts, contracts that were reassigned from Defense Solutions reportable segment to the Civil reportable segment during the third quarter of fiscal 2021 and $95 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").

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

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.

Operating income for fiscal 2021 included a $26 million benefit from a legal reserve adjustment related to the Mission Support Alliance joint venture (see "Note 1—Nature of Operations and Basis of Presentation").

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

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.

*Equity earnings of non-consolidated subsidiaries*

We have certain non-controlling ownership interests in equity method investments.

For fiscal 2022 and fiscal 2021 we recorded earnings of $12 million and $20 million, respectively, from our equity method investments.

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.

Total backlog at December 30, 2022, and December 31, 2021, included $610 million and $800 million, respectively, of backlog acquired during the year through business combinations in our Defense Solutions reportable segment.

The increase in backlog as of December 30, 2022, as compared to December 31, 2021, included an unfavorable impact of $233 million due to the movements in the British pound and Australian dollar when compared to the U.S. dollar.

exceed $750 million and have maturities of up to 397 days from the date of issuance (see "Note 13—Debt").

This activity included required principal payments on our term loans of $476 million, $96 million and $72 million during fiscal 2022, 2021 and 2020, respectively.

During fiscal 2020, we made $4,925 million of principal repayments for outstanding debt and retired the $450 million senior notes.

Interest on our Credit Facilities is calculated based on the London Interbank Offered Rate (“LIBOR”).

On July 27, 2017, the U.K.’s Financial Conduct Authority announced that LIBOR would be discontinued or become unavailable as a reference rate by the end of 2021 and LIBOR will be fully discontinued or become unavailable as a benchmark rate by June 2023.

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.

At December [removed: 30, 2022] [added: 29, 2023,] and December [removed: 31, 2021,] [added: 30, 2022,] we had [removed: $4.9] [added: $4.7] billion and [removed: $5.1] [added: $4.9] billion, respectively, of debt, which included [removed: $1.5] [added: $1.0] billion and [removed: $1.7] [added: $1.5] billion, respectively, related to our senior unsecured term loans that have a variable stated interest rate that is determined based on [removed: either] the [removed: London Interbank Offered Rate ("LIBOR") or the Stated] [added: Secured] Overnight Financing [removed: Date] [added: Rate] ("SOFR") [removed: rate] plus a margin.

[removed: Under the terms of the] [added: During fiscal 2023, we modified our] interest rate swap [removed: agreements, we] [added: agreements to] receive [added: monthly] variable interest payments based on the one-month [removed: LIBOR rate] [added: SOFR rate,] and [added: we will continue to] pay interest at a fixed rate.

As of December [removed: 30, 2022,] [added: 29, 2023,] the notional value of the interest rate swap agreements was [removed: $1.0 billion.][added: $500 million.]

The fair value of our interest rate swap agreements with respect to our Variable Rate Loan was an asset of [added: $11 million and] $20 [removed: million,] [added: million] as of December [removed: 30, 2022,] [added: 29, 2023,] and [removed: a liability of $53 million, as of] December [removed: 31, 2021.][added: 30, 2022, respectively.]

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

As of December [removed: 30, 2022] [added: 29, 2023,] and December [removed: 31, 2021,] [added: 30, 2022,] our cash and cash equivalents included investments in several large institutional money market accounts.

For fiscal [removed: 2022] [added: 2023] and fiscal [removed: 2021,] [added: 2022,] 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 [removed: 8%] [added: 9%] of total revenues for fiscal [removed: 2022, 2021] [added: 2023] and [removed: 2020.][added: 8% for both fiscal 2022 and 2021.]

Leidos Holdings, Inc. Annual Report - [removed: 55][added: 63]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

We applied the guidance of Accounting Standards Codification 848 which permits the continuation of hedge accounting for such modification.

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.

Since our founding [removed: 54] [added: 55] 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.

Our customers include the U.S. Department of Defense ("DoD"), the U.S. Intelligence Community, the U.S. Department of Homeland Security ("DHS"), the Federal Aviation Administration ("FAA"), the Department of Veterans Affairs [removed: ("VA")] [added: ("VA"), National Aeronautics] and [added: Space Administration ("NASA") and] many other U.S. civilian, state and local government agencies, foreign government agencies and commercial businesses.

With a focus on delivering mission-critical solutions, Leidos generated [removed: 86%] [added: 87%] of revenues for the fiscal year ended December [removed: 30, 2022,] [added: 29, 2023,] ("fiscal [removed: 2022")] [added: 2023")] from U.S. government [removed: contracts.][added: contracts, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. government.]

At December [removed: 30, 2022,] [added: 29, 2023,] our business [removed: is] [added: has been] aligned into three reportable segments (Defense Solutions, Civil and Health).

Approximately [removed: 8%] [added: 9%] of our revenues [removed: and tangible long-lived assets] are generated by [removed: or owned by] entities located outside of the United States.

Defense Solutions [removed: provides] [added: has provided] leading-edge and technologically advanced services, solutions and products to a broad customer base.

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 Space Development Agency, [removed: the National Aeronautics and Space Administration ("NASA"),] [added: 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: 57%] [added: 56%] of total revenues for fiscal [removed: 2022, 58%] [added: 2023, 57%] of total revenues for the fiscal year ended December [removed: 31, 2021] [added: 30, 2022] ("fiscal [removed: 2021")] [added: 2022")] and [removed: 60%] [added: 58%] of total revenues for the fiscal year ended [removed: January 1,] [added: December 31,] 2021 ("fiscal [removed: 2020").][added: 2021").]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

We are [removed: among the] [added: a] market [removed: leaders] [added: leader] in submarine collection technologies and anti-submarine warfare system installation and maintenance and are expanding our capabilities in these areas to meet market demand for this growing threat.

Our Gibbs & Cox subsidiary is [added: one of] the largest independent naval architecture and marine engineering firm by headcount in the United States.

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

We offer product support and lifecycle sustainment services to our U.S. Army, Navy and Air Force [removed: customers] [added: customers,] including planning and managing the cost and performance across the product’s lifecycle.

We offer reverse engineering, classified manufacturing and design, and threat exploitation services to a wide breadth of [added: U.S.] Intelligence Community customers.

Our Civil business [removed: is] [added: has been] focused on modernizing infrastructure, systems and security for government and commercial customers both domestically and internationally.

Civil represented 24% of total revenues for [added: both] fiscal [added: 2023 and] 2022, [removed: 23% of total revenues for fiscal 2021] and [removed: 24%] [added: 23%] of total revenues for fiscal [removed: 2020.][added: 2021.]

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

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

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

Our Health business [removed: focuses] [added: has been focused] on delivering effective and affordable solutions to federal and commercial customers that are responsible for the health and well-being of people worldwide, including service members and veterans.

Health represented [removed: 19%] [added: 20%] of total revenues for fiscal [removed: 2022,] [added: 2023, and] 19% of total revenues for [added: both] fiscal [removed: 2021] [added: 2022] and [removed: 16% of total revenues for 2020.][added: 2021.]

We have developed unique capabilities in behavioral health management through many decades of experience with a special emphasis on substance abuse [removed: services.][added: services and non-medical counseling.]

Leidos helps transform our customers' [removed: IT] [added: technology] environments in support of their most critical missions, accomplished in a highly secure manner by leveraging our cybersecurity domain expertise and our Leidos rapid application development software platform.

[removed: During fiscal 2020, we completed the acquisitions of L3Harris Technologies' ("L3Harris") security detection and automation businesses and Dynetics, Inc.] See "Note 5—Acquisitions and Divestitures" in Part II of this Annual Report on Form 10-K for further information.

Within the U.S. government, our revenues are diversified across many agencies, including various intelligence agencies, the U.S. Army, Navy and Air Force, [added: U.S Space Force,] DHS, DISA, FAA, Transportation Security Administration, CBP, DHA, VA, Department of Health and Human Services, NASA, National Science Foundation, DoE, the Environmental Protection Agency and research agencies such as Defense Advanced Research Projects Agency.

As of December [removed: 30, 2022,] [added: 29, 2023,] we employed approximately [removed: 45,000] [added: 47,000] full and part-time employees of whom approximately [removed: 41,000] [added: 41,800] are located in the United States and the remainder of which are located in [removed: more than 40] [added: 50] countries worldwide.

Approximately [removed: 35%] [added: 36%] of our employees have degrees in science, technology, engineering or mathematics fields, approximately [removed: 22%] [added: 23%] of our employees have advanced degrees, [removed: 53%] [added: 52%] of our employees possess U.S. security clearances and approximately 19% of our employees are military veterans.

As of December [removed: 30, 2022,] [added: 29, 2023,] our workforce consisted of the following:

| Female | | | | | | [removed: 34] [added: 35] | | % |

| White | | | | | | [removed: 62] [added: 61] | | % |

| Hispanic/Latino | | | | | | [removed: 9] [added: 10] | | % |

We have six core values that make us who we are as individuals and collectively as a [removed: company –] [added: company:] integrity, inclusion, innovation, agility, collaboration and commitment.

Our practices are based on our commitment to do the right thing for our customers, our employees and our [removed: community.][added: communities.]

For the [removed: fifth] [added: sixth] consecutive year, the Ethisphere Institute named Leidos one of the World's Most Ethical Companies in [removed: 2022.][added: 2023.]

[removed: Inclusion] [added: Diversity, Equity] and [removed: Diversity][added: Inclusion ("DEI")]

[removed: To further incorporate inclusion in all areas of our business processes and practices, all leaders] [added: Leaders, managers] and employees [added: of the Company] are required to take [removed: inclusion] [added: DEI] training annually to recognize challenges and mitigate barriers to inclusion in the workplace.

[removed: Our employees are encouraged] [added: We continue] to [removed: create] [added: grow] and [removed: join multiple] [added: expand our] employee resource groups (“ERGs”) [removed: where they can continue] [added: and DEI learning resources] to [added: equip employees with the tools to] develop cultural [added: their] competence across [removed: various categories] [added: all dimensions] of [removed: diversity,] [added: inclusion,] enhance their personal networks, [added: and] develop leadership skills [removed: and actively contribute] to [added: actively shape and change] workplace culture.

[removed: The Council is] [added: These councils are] comprised of volunteers from across the business functions, ERG leaders, key stakeholders with oversight and guidance from executive leadership and a Board liaison.

Additionally, we offer tuition [removed: assistance] [added: reimbursement and certification exam reimbursement] to full-time employees at accredited universities.

We conduct formal employee engagement surveys and [removed: quarterly] pulse surveys to listen to employees and develop customized strategies to drive engagement, inclusion and retention across the organization.

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

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

This includes encryption key management, the use of artificial intelligence to automate and streamline processes and the development of software to manage some of the worlds toughest data problems.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

During fiscal 2023, we completed an immaterial disposition of a business within our Defense Solutions segment.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

Our DEI strategy and approach focus on education and best practices that enable leader accountability and shift the organization from awareness to meaningful actions.

Our priorities focus on improving enterprise and senior leader representation and enhancing an inclusive culture.

The Enterprise Inclusion Council and group/functional level councils continue to champion DEI efforts across the enterprise and advise on the evolution of our DEI strategy.

We provide resources, development, and experiential learning to enable employees to grow, including a talent marketplace where employees can fill temporary roles to develop skills or provide additional assistance.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

Our primary focus is on the health and safety of our employees, with the physical and mental well-being of our employees being top priority as one of the three pillars of Leidos Life.

To support the physical and mental well-being of our employees, we provide many well-being and mental health benefits to all employees, including access to our Employee Assistance Program, Headspace, Virgin Pulse and meQuilibrium resources.

These partners provide a multitude of free resources to assist employees with their mental, financial, and physical health.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

- the California Consumer Privacy Act, as amended by the California Privacy Rights Act (collectively, “CCPA”), which broadly defines personal information and provides expanded consumer privacy rights to natural persons residing in California, such as affording them the right to access and request deletion of their information and to opt out of certain sharing and sales of personal information; and

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

These regulations and related risks are described in more detail below under "Risk Factors" in this Annual Report on Form 10-K.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

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

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

Commercially, we are leveraging these same Leidos-wide capabilities to manage critical infrastructure to one of the largest health systems in the United States.

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

Our inclusion and diversity strategy and approach focuses on extensive education and best practices to enable leader accountability, improve enterprise representation and evolve an inclusive culture.

We have an Enterprise Inclusion Council ("the Council") to advise on the evolution of our inclusion and diversity strategy and help leverage best practices across the company.

Our Executive Mentoring Program is a year-long cohort designed to engage, develop and retain high-potential employees, most of whom are female and/or ethnically diverse.

Our executives are each assigned to mentor at least one employee nominated through the program to support preparation for advancement opportunities.

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

Our primary focus is on the health and safety of our employees.

Our multi-functional working group established in fiscal 2020 to respond the COVID-19 pandemic has transitioned to a Pandemic Preparedness working group that continues to monitor and respond to COVID-19 and other issues that pose a health risk to our employees.

This group closely follows the recommendations of the World Health Organization and the U.S. Centers for Disease Control and Prevention, as well as national and local authorities in the regions where we perform work for our customers.

- the California Consumer Privacy Act of 2018 (“CCPA”), which took effect on January 1, 2020, provides new consumer privacy rights to natural persons residing in California by regulating the processing of personal information of California residents and increasing the obligations on businesses in connection with such activities;

- the California Privacy Rights Act (“CPRA”), which took effect in most material respects on January 1, 2023.

The CPRA modifies the CCPA significantly, including by expanding consumers’ rights with respect to certain sensitive personal information, extending the scope of the CCPA to include employees and job applicants residing in California and creating a new state agency to oversee implementation and enforcement efforts; and

[removed: ][added: ]

For the fiscal year ended December [removed: 30, 2022][added: 29, 2023]

As of [removed: July 1, 2022,] [added: June 30, 2023,] 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: $13,863,703,025.][added: $12,035,539,574.]

The number of shares issued and outstanding of the registrant’s class of common stock as of February [removed: 7, 2023,] [added: 6, 2024,] was [removed: 136,937,673] [added: 135,779,301] shares ($.0001 par value per share).

Portions of Leidos Holdings, Inc.'s definitive Proxy Statement for the [removed: 2022] [added: 2023] Annual Meeting of Stockholders [removed: ("2023] [added: ("2024] Proxy Statement") are incorporated by reference in Part III of this Annual Report on Form 10-K.

| Item 1. | | | [removed: [Business](#idb11c8fd3bed4955b736c2a6a1df863c_16)] [added: [Business](#idfc2de3250d049889cff5bea351405b6_16)] | | | [removed: [3](#idb11c8fd3bed4955b736c2a6a1df863c_16)] [added: [3](#idfc2de3250d049889cff5bea351405b6_16)] | | |

| Item 1A. | | | [Risk [removed: Factors](#idb11c8fd3bed4955b736c2a6a1df863c_19)] [added: Factors](#idfc2de3250d049889cff5bea351405b6_19)] | | | [removed: [16](#idb11c8fd3bed4955b736c2a6a1df863c_19)] [added: [16](#idfc2de3250d049889cff5bea351405b6_19)] | | |

| Item 1B. | | | [Unresolved Staff [removed: Comments](#idb11c8fd3bed4955b736c2a6a1df863c_22)] [added: Comments](#idfc2de3250d049889cff5bea351405b6_22)] | | | [removed: [39](#idb11c8fd3bed4955b736c2a6a1df863c_22)] [added: [43](#idfc2de3250d049889cff5bea351405b6_22)] | | |

| Item 2. | | | [removed: [Properties](#idb11c8fd3bed4955b736c2a6a1df863c_25)] [added: [Properties](#idfc2de3250d049889cff5bea351405b6_25)] | | | [removed: [39](#idb11c8fd3bed4955b736c2a6a1df863c_25)] [added: [46](#idfc2de3250d049889cff5bea351405b6_25)] | | |

| Item 3. | | | [Legal [removed: Proceedings](#idb11c8fd3bed4955b736c2a6a1df863c_28)] [added: Proceedings](#idfc2de3250d049889cff5bea351405b6_28)] | | | [removed: [39](#idb11c8fd3bed4955b736c2a6a1df863c_28)] [added: [46](#idfc2de3250d049889cff5bea351405b6_28)] | | |

| Item 4. | | | [Mine Safety [removed: Disclosures](#idb11c8fd3bed4955b736c2a6a1df863c_31)] [added: Disclosures](#idfc2de3250d049889cff5bea351405b6_31)] | | | [removed: [39](#idb11c8fd3bed4955b736c2a6a1df863c_31)] [added: [46](#idfc2de3250d049889cff5bea351405b6_31)] | | |

| [Executive Officers of the [removed: Registrant](#idb11c8fd3bed4955b736c2a6a1df863c_34)] [added: Registrant](#idfc2de3250d049889cff5bea351405b6_34)] | | | | | | [removed: [39](#idb11c8fd3bed4955b736c2a6a1df863c_34)] [added: [46](#idfc2de3250d049889cff5bea351405b6_34)] | | |

| Item 5. | | | [Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#idb11c8fd3bed4955b736c2a6a1df863c_40)] [added: Securities](#idfc2de3250d049889cff5bea351405b6_40)] | | | [removed: [42](#idb11c8fd3bed4955b736c2a6a1df863c_40)] [added: [49](#idfc2de3250d049889cff5bea351405b6_40)] | | |

| Item 6. | | | [removed: [\[Reserved\]](#idb11c8fd3bed4955b736c2a6a1df863c_43)] [added: [\[Reserved\]](#idfc2de3250d049889cff5bea351405b6_43)] | | | [removed: [43](#idb11c8fd3bed4955b736c2a6a1df863c_43)] [added: [51](#idfc2de3250d049889cff5bea351405b6_43)] | | |

| Item 7. | | | [Management’s Discussion and Analysis of Financial Condition and Results of [removed: Operations](#idb11c8fd3bed4955b736c2a6a1df863c_46)] [added: Operations](#idfc2de3250d049889cff5bea351405b6_46)] | | | [removed: [44](#idb11c8fd3bed4955b736c2a6a1df863c_46)] [added: [52](#idfc2de3250d049889cff5bea351405b6_46)] | | |

| Item 7A. | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#idb11c8fd3bed4955b736c2a6a1df863c_79)] [added: Risk](#idfc2de3250d049889cff5bea351405b6_79)] | | | [removed: [55](#idb11c8fd3bed4955b736c2a6a1df863c_79)] [added: [63](#idfc2de3250d049889cff5bea351405b6_79)] | | |

| Item 8. | | | [Financial Statements and Supplementary [removed: Data](#idb11c8fd3bed4955b736c2a6a1df863c_82)] [added: Data](#idfc2de3250d049889cff5bea351405b6_82)] | | | [removed: [56](#idb11c8fd3bed4955b736c2a6a1df863c_82)] [added: [64](#idfc2de3250d049889cff5bea351405b6_82)] | | |

| Item 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#idb11c8fd3bed4955b736c2a6a1df863c_181)] [added: Disclosure](#idfc2de3250d049889cff5bea351405b6_181)] | | | [removed: [110](#idb11c8fd3bed4955b736c2a6a1df863c_181)] [added: [117](#idfc2de3250d049889cff5bea351405b6_181)] | | |

| Item 9A. | | | [Controls and [removed: Procedures](#idb11c8fd3bed4955b736c2a6a1df863c_184)] [added: Procedures](#idfc2de3250d049889cff5bea351405b6_184)] | | | [removed: [110](#idb11c8fd3bed4955b736c2a6a1df863c_184)] [added: [117](#idfc2de3250d049889cff5bea351405b6_184)] | | |

| Item 9B. | | | [Other [removed: Information](#idb11c8fd3bed4955b736c2a6a1df863c_190)] [added: Information](#idfc2de3250d049889cff5bea351405b6_190)] | | | [removed: [112](#idb11c8fd3bed4955b736c2a6a1df863c_190)] [added: [119](#idfc2de3250d049889cff5bea351405b6_190)] | | |

| [Part [removed: III](#idb11c8fd3bed4955b736c2a6a1df863c_193)] [added: III](#idfc2de3250d049889cff5bea351405b6_193)] | | | | | | | | |

| Item 10. | | | [Directors, Executive Officers and Corporate [removed: Governance](#idb11c8fd3bed4955b736c2a6a1df863c_196)] [added: Governance](#idfc2de3250d049889cff5bea351405b6_196)] | | | [removed: [112](#idb11c8fd3bed4955b736c2a6a1df863c_196)] [added: [119](#idfc2de3250d049889cff5bea351405b6_196)] | | |

| Item 11. | | | [Executive [removed: Compensation](#idb11c8fd3bed4955b736c2a6a1df863c_199)] [added: Compensation](#idfc2de3250d049889cff5bea351405b6_199)] | | | [removed: [112](#idb11c8fd3bed4955b736c2a6a1df863c_199)] [added: [119](#idfc2de3250d049889cff5bea351405b6_199)] | | |

| Item 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#idb11c8fd3bed4955b736c2a6a1df863c_202)] [added: Matters](#idfc2de3250d049889cff5bea351405b6_202)] | | | [removed: [113](#idb11c8fd3bed4955b736c2a6a1df863c_202)] [added: [120](#idfc2de3250d049889cff5bea351405b6_202)] | | |

| Item 13. | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#idb11c8fd3bed4955b736c2a6a1df863c_205)] [added: Independence](#idfc2de3250d049889cff5bea351405b6_205)] | | | [removed: [113](#idb11c8fd3bed4955b736c2a6a1df863c_205)] [added: [120](#idfc2de3250d049889cff5bea351405b6_205)] | | |

| Item 14. | | | [Principal Accounting Fees and [removed: Services](#idb11c8fd3bed4955b736c2a6a1df863c_208)] [added: Services](#idfc2de3250d049889cff5bea351405b6_208)] | | | [removed: [113](#idb11c8fd3bed4955b736c2a6a1df863c_208)] [added: [120](#idfc2de3250d049889cff5bea351405b6_208)] | | |

| [Part [removed: IV](#idb11c8fd3bed4955b736c2a6a1df863c_211)] [added: IV](#idfc2de3250d049889cff5bea351405b6_211)] | | | | | | | | |

| Item 15. | | | [Exhibits, Financial Statement [removed: Schedules](#idb11c8fd3bed4955b736c2a6a1df863c_214)] [added: Schedules](#idfc2de3250d049889cff5bea351405b6_214)] | | | [removed: [114](#idb11c8fd3bed4955b736c2a6a1df863c_214)] [added: [121](#idfc2de3250d049889cff5bea351405b6_214)] | | |

| Item 16. | | | [Form 10-K [removed: Summary](#idb11c8fd3bed4955b736c2a6a1df863c_217)] [added: Summary](#idfc2de3250d049889cff5bea351405b6_217)] | | | [removed: [119](#idb11c8fd3bed4955b736c2a6a1df863c_217)] [added: [124](#idfc2de3250d049889cff5bea351405b6_217)] | | |

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

- [removed: rising] inflationary pressures and fluctuations in interest rates;

- changes in U.S. government procurement rules, regulations and [removed: practices;][added: practices, including its organizational conflict of interest rules;]

- the effects of [removed: COVID-19] [added: an epidemic, pandemic] or [removed: other health epidemics, pandemics and] similar [removed: outbreaks] [added: outbreak] may have on our business, financial position, results of operations and/or cash flows;

- our compliance with international, federal, state and local laws and regulations regarding privacy, data security, protection, storage, retention, [removed: transfer] [added: transfer, disposal] and [removed: disposal,] [added: other processing,] technology protection and personal information;

| [Part I](#idfc2de3250d049889cff5bea351405b6_13) | | | | | | | | |

| Item 1C. | | | [Cybersecurity](#idfc2de3250d049889cff5bea351405b6_2191) | | | [44](#idfc2de3250d049889cff5bea351405b6_2191) | | |

| [Part II](#idfc2de3250d049889cff5bea351405b6_37) | | | | | | | | |

| | | | | | | | | |

| [Signatures](#idfc2de3250d049889cff5bea351405b6_220) | | | | | | [125](#idfc2de3250d049889cff5bea351405b6_220) | | |

- deterioration of economic conditions or weakening in credit or capital markets;

- uncertainty in the consequences of current and future geopolitical events;

- increased preference by the U.S. government for minority-owned, small and small disadvantaged businesses;

- fluctuations in foreign currency exchange rates;

- our ability to respond rapidly to emerging technology trends, including the use of artificial intelligence;

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

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

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

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

Leidos Holdings, Inc. Annual Report - 43

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

PART I

Risk Management and Strategy

Cybersecurity risk management is an integral part of our digital posture and enterprise risk management strategy.

Cybersecurity is critical to maintaining the trust of our customers and business partners, and we are committed to protecting our and their confidential and sensitive information, including personal information, and mitigating cybersecurity risks that impact our systems and networks.

We maintain technologies, programs and processes designed to assess, identify, manage and mitigate cybersecurity risks.

Our efforts include regular monitoring of Leidos-managed programs for internal and external cybersecurity threats, providing cybersecurity training to our employees during the onboarding process and annually, and continually reviewing and refining formal policies and procedures designed to deter, identify and remediate cybersecurity incidents.

We regularly perform evaluations of our cybersecurity program and continue to invest in our capabilities to keep our customers, partners, suppliers and information assets in our possession safe.

Although we employ service provider due diligence and onboarding procedures to identify potential cybersecurity risk, our ability to monitor the cybersecurity practices of our service providers is limited and there can be no assurance that we can prevent or mitigate the risk of any compromise or failure in the information system, software, networks and other assets owned or controlled by our vendors.

Our Chief Information Security Officer leads our Cybersecurity Intelligence and Response Team (“CSIRT”) whose function is to stay apprised of existing and emerging cyber threats and monitor our global enterprise and proactively identify and protect against cybersecurity risk.

The CSIRT uses intelligence collected from various sources, fused with intelligence collected from analysis and response actions, to proactively search for, and address adversary activity against the Leidos network.

The CSIRT possesses in-depth knowledge of network, endpoint, perimeter security systems, identity, data protection, threat intelligence, forensics, penetration testing and malware reverse engineering, as well as the functioning of specific applications or underlying information technology infrastructure.

Leidos CSIRT owns the incident response process and provides direction and guidance to users of Leidos computing resources when responding to cybersecurity incidents.

Leidos CSIRT also provides intrusion monitoring of networks and information systems and continuously monitors the Leidos computing environments and performs triage and analysis of events to identify potential incidents.

We employ multiple security and monitoring devices and applications throughout the Company to identify, alert, report and log all authorized and unauthorized access to the Leidos enterprise networks.

We use an application that collects, correlates, and notifies CSIRT analysts regarding any item meeting an electronic intrusion event.

We categorize anomalous cyber events into discrete levels in which cybersecurity matters are escalated to certain levels of management, as well as our Board, based on the severity of the incident, as appropriate.

Sharing cyber threat information at these levels supports the Company’s ability to integrate cybersecurity considerations into its overarching risk management system and processes.

We also conduct periodic internal and third-party assessments to test our cybersecurity controls, perform cyber simulations and exercises, and continually evaluate our internal governing policies and procedures to help detect and respond to cybersecurity events in order to reduce harms or impacts from breaches and other information security incidents.

Governance

Management's Responsibilities

Our global information security program is led by our corporate Chief Information Security Officer, who works closely with key corporate functional and line of business stakeholders.

The Chief Information Security Officer partners with these functions for the purpose of identifying, considering and assessing material cybersecurity risks on an ongoing basis, establishing processes to ensure that such potential cybersecurity risks are monitored, implementing appropriate mitigation measures, reporting cybersecurity breaches and other information security incidents, and maintaining our cybersecurity program.

The team of senior management officers, who support our information security program, have expertise with cybersecurity, as demonstrated qualifications such as by prior work experience, possession of a cybersecurity certification, degree, or other cybersecurity experience.

Our management team receives regular updates on our cybersecurity posture and reviews detailed information about our cybersecurity preparedness.

Additionally, we have a Leidos Security Council that is co-chaired by the Chief Information Security Officer and the Chief Security Officer to address “all security hazards” across our global enterprise to ensure cohesion and effectiveness of our combined security governance and risk mitigations.

Leidos Holdings, Inc. Annual Report - 44

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

PART I

Board's Roles and Responsibilities

We have a Technology and Innovation Security Committee, comprised of six board members, with relevant backgrounds and experience, that oversees and advises the Board and management on matters involving the Company’s overall strategic direction and significant business risks and opportunities in the areas of technology and information security.

At least quarterly, management provides our Board and the Technology and Information Security Committee with updates about our cybersecurity and related risk exposures, our policies and procedures to mitigate such exposures and the status of projects to strengthen our information security infrastructure and program maturity and defend against and respond to cybersecurity threats.

In addition, we use a risk-based escalation process to notify the Board and the Technology and Information Security Committee outside of the regular reporting cycle should we identify a significant emerging risk or potentially material issue that should be brought to their attention.

Cybersecurity Threats

To date, we have not identified any cybersecurity threats that have materially affected or are reasonably likely to materially affect our business strategy, results of our operations, or our financial condition.

However, despite our efforts to identify and respond to cybersecurity threats, we cannot eliminate all risks from cybersecurity threats, or provide assurances that we have not experienced an undetected cybersecurity incident.

For more information about these risks, please see “Risk Factors – 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 customers and cause harm to our reputation or competitive position” in this Annual Report on Form 10-K.

Leidos Holdings, Inc. Annual Report - 45

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

PART I

As of December [removed: 30, 2022,] [added: 29, 2023,] we conducted our operations in [removed: 416] [added: 427] locations in [removed: 42] [added: 44] states, the District of Columbia and various foreign countries.

We occupy approximately [removed: 8.6] [added: 8.5] million square feet of floor space.

Our major locations are in the Washington, D.C., metropolitan area, where we occupy a combination of leased and owned floor space of approximately [removed: 2.2] [added: 1.9] million square feet.

As of December [removed: 30, 2022,] [added: 29, 2023,] we owned the following properties:

The following is a list of the names and ages (as of February [removed: 14, 2023)] [added: 13, 2024)] 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.

| Christopher R. Cage | | | | | | [removed: 51] [added: 52] | | | | | | Mr. Cage has served as Executive Vice President and Chief Financial Officer since July 2021. He has served in several capacities throughout his [removed: 24-year] [added: 25-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. | | |

Leidos Holdings, Inc. Annual Report - [removed: 39][added: 46]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

| Carly E. Kimball | | | | | | [removed: 47] [added: 48] | | | | | | Ms. Kimball has served as [added: the Executive Vice President, Chief Performance Officer since January 2024. In addition, she served as] Senior Vice President, Chief Accounting Officer and Corporate Controller since July 2021. [removed: Previously, she] [added: Ms. Kimball also] served as the Company’s Assistant Corporate Controller. Ms. Kimball [removed: brings] [added: has] over [removed: 20] [added: 25] 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 [removed: senior manager] [added: Senior Manager] in Ernst & Young’s Aerospace and Defense audit practice. | | |

| Gerard A. Fasano | | | | | | [removed: 57] [added: 58] | | | | | | Mr. Fasano has served as [added: Executive Vice President, Chief Growth Officer since January 2024. Previously, he served as] President for our Defense Group since October [removed: 2018, and before that,] [added: 2018. Mr. Fasano also served] as [added: the Company's] Chief of Business Development and Strategy [removed: Officer. Mr. Fasano] [added: Officer, and] led the separation from [added: the] Lockheed Martin [added: Corporation] 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: 67] [added: 68] | | | | | | Mr. Howe has served as Executive Vice President and General Counsel since July [removed: 2017.] [added: 2017 and as Corporate Secretary since September 2023.] 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. | | |

| Steve Cook | | | | | | [removed: 55] [added: 56] | | | | | | Mr. Cook has served as President [removed: of the] [added: for Leidos] Dynetics [removed: Group] [added: (formerly 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. [removed: He] [added: Mr. Cook] 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, [removed: Mr. Cook] [added: he] 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. | | |

| Elizabeth [removed: A.] [added: M.] Porter | | | | | | [removed: 52] [added: 53] | | | | | | Ms. Porter has served as President for [added: the Health and Civil Sector since January 2024. Previously, she served as President for] our Health Group since August 2020 and, before that, as Acting Group President for the Health Group since March 2020. [removed: She previously] [added: Ms. Porter also] 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 [removed: Energy Initiatives, Corporate Engineering & Technology*.*] [added: Army IT, a portfolio of IT programs for the U.S. Army*.*] | | |

| Roy Stevens | | | | | | [removed: 54] [added: 55] | | | | | | Mr. Stevens has served as President for [added: the National Security Sector since January 2024. Previously, he 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: 40][added: 47]

| Thomas C. Sanglier | | | | | | [removed: 62] [added: 63] | | | | | | 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 [removed: currently serves] [added: previously served] as Chair of the North American Board and a member of the Global Board of the Institute of Internal Auditors [removed: ("IIA").] [added: ("IIA") from April 2022 to March 2023.] 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 | | | | | | [removed: 58] [added: 59] | | | | | | Ms. Waterston has served as Chief Human Resources Officer for Leidos since March 2022. Ms. Waterston [removed: brings] [added: has] 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 [removed: Global] Chief Human Resources Officer for Otis Elevator Company. | | |

| James F. Carlini | | | | | | [removed: 57] [added: 59] | | | | | | 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 [removed: as] [added: from July 2002 to May 2006, with his last position being] Vice President of Advanced Development [removed: Programs between July 2002 to May 2006.] [added: Programs.] 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. | | |

| M. Victoria Schmanske | | | | | | [removed: 60] [added: 61] | | | | | | Ms. Schmanske has served as the [added: President of the Commercial and International Sector since January 2024. Previously, she served as the] Executive Vice President of Leidos Corporate Operations since July 2021, and before that, as President for the Intelligence Group. Ms. Schmanske has also served as the Leidos Chief Administrative Officer and Deputy President and Chief Operations Officer for the Health Group. Prior to joining Leidos, Ms. Schmanske served Lockheed Martin Corporation for over 30 years, most recently as Vice President for Operations IS&GS. She serves on multiple outside boards to include [removed: Intelligence and National Security Alliance, U.S. Geospatial Intelligence] [added: the University of Virginia School of Data Science Advisory Board, the Virginia Engineering] Foundation [added: Board of Directors,] and The Women’s Center. | | |

Leidos Holdings, Inc. Annual Report - [removed: 41][added: 48]

| Thomas A. Bell | | | | | | 63 | | | | | | Mr. Bell serves as the Chief Executive Officer of Leidos. He joined Leidos as CEO in May 3, 2023. Mr. Bell has held leadership roles as President – Defense Rolls-Royce plc; Chairman and CEO – Rolls-Royce North America (Rolls-Royce) since February 2018. Prior to that, Mr. Bell was Senior Vice President of global sales and marketing for defense, space and security at The Boeing Company (Boeing) from 2015. Before joining Boeing in 2015, Mr. Bell was President of Rolls-Royce Defense Aerospace, having joined as President, Customer Business, North America in mid-2012. | | |

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| Cindy Gruensfelder | | | | | | 58 | | | | | | Ms. Gruensfelder has served as the President of the Defense System Sector since January 2024. Ms. Gruensfelder has extensive Aerospace and Defense leadership expertise, serving for more than 30 years in a variety of leadership roles at Boeing, and its heritage company, McDonnell Douglas. She served as Vice President and General Manager of the Missile and Weapon Systems ("MWS"), division of Boeing Defense, Space & Security, from April 2021 to November 2022, and prior to that role, as Vice President of Weapons for the MWS division from October 2018 to April 2021. | | |

| Steve Hull | | | | | | 53 | | | | | | Mr. Hull has served as the President for the Digital Modernization Sector since January 2024. Previously, he served as Executive Vice President and Operations Manager for Enterprise and Cyber Solutions at Leidos from March 2022 through December 2023, and Chief Information Officer ("CIO") at Leidos from August 2016 through March 2022. Prior to joining Leidos, Mr. Hull served as the CIO of the Lockheed Martin Corporation's Information Systems & Global Solutions business area from January 2013 through August 2016, ensuring operations and security of IT systems for over 20,000 employees. Mr. Hull has over 30 years of experience in the IT field. | | |

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| Roger A. Krone | | | | | | 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, National Air and Space Museum board, Lear Corporation board, the National Academy of Engineering, the Business Roundtable and the Executive Committee of the Aerospace Industries Association. | | |

| James R. Moos | | | | | | 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. | | |

| 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. | | |

As of February [removed: 7, 2023,] [added: 6, 2024,] there were approximately [removed: 19,798] [added: 19,005] holders of record of Leidos common stock.

During fiscal [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] we declared and paid quarterly dividends totaling [removed: $1.44] [added: $1.46] and [removed: $1.40] [added: $1.44] per share, respectively, of Leidos common stock.

The following graph compares the total cumulative five-year return on Leidos common stock through December [removed: 30, 2022] [added: 29, 2023,] 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: 29, 2017,] [added: 28, 2018,] and that dividends, if any, have been reinvested.

[removed: ][added: ]

Leidos Holdings, Inc. Annual Report - [removed: 42][added: 49]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

| Company/Market/Peer Group | | | | | | [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: 12/30/2022] [added: 12/29/2023] | | |

[added: (2)] In February 2022, our Board of Directors authorized a share repurchase program of up to 20 million shares of our outstanding common stock.

The actual timing, number and value of shares repurchased under the program will depend on a number of factors, including the market price of [removed: Leidos] [added: our] common stock, general market and economic conditions, applicable legal requirements, compliance with the terms of our outstanding indebtedness and other considerations.

*This stock performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of Leidos under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.*

| Leidos Inc. | | | | | | $ | 100.00 | | | | | $ | 193.07 | | | | | $ | 206.95 | | | | | $ | 177.59 | | | | | $ | 213.19 | | | | | $ | 222.79 | |

| S&P 500 Composite Index | | | | | | $ | 100.00 | | | | | $ | 132.82 | | | | | $ | 157.02 | | | | | $ | 202.09 | | | | | $ | 165.49 | | | | | $ | 205.59 | |

| S&P 500 IT Services Index | | | | | | $ | 100.00 | | | | | $ | 142.47 | | | | | $ | 173.97 | | | | | $ | 182.45 | | | | | $ | 148.63 | | | | | $ | 195.36 | |

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The following table presents information related to the repurchases of our common stock during the quarter ended December 29, 2023:

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

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

| Period | | | | | | Total Number of Shares Purchased(1) | | | | | | Average Price Paid per Share | | | | | | Total Number of Shares Purchased as Part of Publicly Announced Repurchase Plans or Programs | | | | | | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs(2) | | |

| September 30, 2023 | | | | | | — | | | | | | $ | — | | | | | — | | | | | | 14,934,512 | | |

| October 1, 2023 - October 31, 2023 | | | | | | — | | | | | | — | | | | | | — | | | | | | 14,934,512 | | |

| November 1, 2023 - November 30, 2023 | | | | | | 1,669,887 | | | | | | 104.56 | | | | | | 1,669,887 | | | | | | 13,264,625 | | |

| December 1, 2023 - December 29, 2023 | | | | | | 233,306 | | | | | | 107.35 | | | | | | 233,306 | | | | | | 13,031,319 | | |

| Total | | | | | | 1,903,193 | | | | | | $ | 104.90 | | | | | 1,903,193 | | | | | | | | |

(1) The total number of shares purchased includes shares surrendered to satisfy statutory tax withholding obligations related to vesting of restricted stock units.

Leidos Holdings, Inc. Annual Report - 50

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

PART II

| 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 | |

Purchases of Equity Securities

As of December 30, 2022, the maximum number of shares that may yet be repurchased under the program was 15,203,974.

For the three months ended December 30, 2022, there were no repurchases of our common stock.

Leidos Holdings, Inc. Annual Report - [removed: 43][added: 51]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

[removed: LEIDOS HOLDINGS, INC.][added: Leidos Holdings, Inc. Annual Report - 110]

| [Report of Independent Registered Public Accounting [removed: Firm](#idb11c8fd3bed4955b736c2a6a1df863c_94)] [added: Firm](#idfc2de3250d049889cff5bea351405b6_94)] (PCAOB ID No. 34) | | | | | | [removed: [57](#idb11c8fd3bed4955b736c2a6a1df863c_94)] [added: [65](#idfc2de3250d049889cff5bea351405b6_94)] | | |

| [Consolidated Balance Sheets as [removed: of](#idb11c8fd3bed4955b736c2a6a1df863c_97) [December] [added: of December 29, 2023 and December] 30, [removed: 2022 and](#idb11c8fd3bed4955b736c2a6a1df863c_97) [December 31, 2021](#idb11c8fd3bed4955b736c2a6a1df863c_97)] [added: 2022](#idfc2de3250d049889cff5bea351405b6_97)] | | | | | | [removed: [60](#idb11c8fd3bed4955b736c2a6a1df863c_97)] [added: [68](#idfc2de3250d049889cff5bea351405b6_97)] | | |

| [Consolidated Statements of [removed: Income] [added: Operations] for the fiscal years ended December [added: 29, 2023, December] 30, [removed: 2022,] [added: 2022 and] December 31, [removed: 2021, and January 1, 2021](#idb11c8fd3bed4955b736c2a6a1df863c_100)] [added: 2021](#idfc2de3250d049889cff5bea351405b6_100)] | | | | | | [removed: [61](#idb11c8fd3bed4955b736c2a6a1df863c_100)] [added: [69](#idfc2de3250d049889cff5bea351405b6_100)] | | |

| [Consolidated Statements of Comprehensive Income for the fiscal years [removed: ended](#idb11c8fd3bed4955b736c2a6a1df863c_103) [December] [added: ended December 29, 2023, December] 30, [removed: 2022,](#idb11c8fd3bed4955b736c2a6a1df863c_103) [December] [added: 2022 and December] 31, [removed: 2021](#idb11c8fd3bed4955b736c2a6a1df863c_103)[,](#idb11c8fd3bed4955b736c2a6a1df863c_103) [](#idb11c8fd3bed4955b736c2a6a1df863c_103)[and](#idb11c8fd3bed4955b736c2a6a1df863c_103) [January 1, 2021](#idb11c8fd3bed4955b736c2a6a1df863c_103)] [added: 2021,](#idfc2de3250d049889cff5bea351405b6_103)] | | | | | | [removed: [62](#idb11c8fd3bed4955b736c2a6a1df863c_103)] [added: [70](#idfc2de3250d049889cff5bea351405b6_103)] | | |

| [Consolidated Statements of Equity for the fiscal years [removed: ended](#idb11c8fd3bed4955b736c2a6a1df863c_106) [December] [added: ended December 29, 2023, December] 30, [removed: 2022,](#idb11c8fd3bed4955b736c2a6a1df863c_106) [December] [added: 2022 and December] 31, [removed: 2021,](#idb11c8fd3bed4955b736c2a6a1df863c_106) [and](#idb11c8fd3bed4955b736c2a6a1df863c_106) [January 1, 2021](#idb11c8fd3bed4955b736c2a6a1df863c_106)] [added: 2021](#idfc2de3250d049889cff5bea351405b6_106)] | | | | | | [removed: [63](#idb11c8fd3bed4955b736c2a6a1df863c_106)] [added: [71](#idfc2de3250d049889cff5bea351405b6_106)] | | |

| [Consolidated Statements of Cash Flows for the fiscal years [removed: ended](#idb11c8fd3bed4955b736c2a6a1df863c_109) [December] [added: ended December 29, 2023, December] 30, [removed: 2022,](#idb11c8fd3bed4955b736c2a6a1df863c_109) [December] [added: 2022 and December] 31, [removed: 2021,](#idb11c8fd3bed4955b736c2a6a1df863c_109) [and](#idb11c8fd3bed4955b736c2a6a1df863c_109) [January 1, 2021](#idb11c8fd3bed4955b736c2a6a1df863c_109)] [added: 2021](#idfc2de3250d049889cff5bea351405b6_109)] | | | | | | [removed: [64](#idb11c8fd3bed4955b736c2a6a1df863c_109)] [added: [72](#idfc2de3250d049889cff5bea351405b6_109)] | | |

| [Notes to Consolidated Financial [removed: Statements](#idb11c8fd3bed4955b736c2a6a1df863c_115)] [added: Statements](#idfc2de3250d049889cff5bea351405b6_115)] | | | | | | [removed: [66](#idb11c8fd3bed4955b736c2a6a1df863c_115)] [added: [74](#idfc2de3250d049889cff5bea351405b6_115)] | | |

Leidos Holdings, Inc. Annual Report - [removed: 56][added: 111]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

We have audited the accompanying consolidated balance sheets of Leidos Holdings, Inc. and subsidiaries (the "Company") as of December [removed: 30, 2022] [added: 29, 2023] and December [removed: 31, 2021,] [added: 30, 2022,] the related consolidated statements of [removed: income,] [added: operations,] comprehensive income, equity, and cash flows, for the fiscal years ended December [added: 29, 2023, December] 30, 2022, [added: and] December 31, 2021, and [removed: January 1, 2021, 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: 30, 2022] [added: 29, 2023] and December [removed: 31, 2021,] [added: 30, 2022,] and the results of its operations and its cash flows for the fiscal years ended December [added: 29, 2023, December] 30, 2022, [added: and] December 31, 2021, [removed: and January 1, 2021,] 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: 30, 2022,] [added: 29, 2023,] 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: 14, 2023,] [added: 13, 2024,] expressed an unqualified opinion on the Company's internal control over financial reporting.

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved [added: our] especially challenging, subjective, or complex judgments.

Leidos Holdings, Inc. Annual Report - [removed: 57][added: 112]

[removed: The] [added: As a result, the] Company performed [removed: a] [added: an interim] quantitative impairment [removed: evaluation] [added: analysis] of [removed: the] goodwill for the [removed: Security Enterprise Solutions] [added: SES] reporting unit by comparing the estimated fair value of the reporting unit to its carrying value.

Estimating the fair value of a reporting unit requires the exercise of significant judgment and assumptions including judgments about expected future cash flows, weighted-average cost of capital, [removed: discount rates] and [removed: expected long-term] growth [removed: rates.][added: rates in revenue and margins.]

The Company’s accounting policy is to test [added: goodwill] for impairment on the first day of the fourth quarter of each 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 [removed: fair] [added: carrying] value of the reporting unit exceeded the [removed: carrying] [added: fair] value [removed: by $174 million, or 13%, which resulted in no] [added: and recognized a goodwill] impairment [added: charge of $596 million] for the year ended December [removed: 30, 2022.][added: 29, 2023.]

We identified goodwill for the [removed: Security Enterprise Solutions] [added: SES] 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 [removed: difference between its] [added: sensitivity of the] fair value [removed: and carrying value.][added: to changes in these estimates.]

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

[removed: The Company recognizes] [added: We recognize] revenue on [added: our] service-based contracts primarily over time as there is continuous transfer of control to the customer over the duration of the [removed: contract] [added: performance period] as the [removed: Company performs the promised services.][added: work is performed.]

Leidos Holdings, Inc. Annual Report - [removed: 58][added: 113]

On [removed: firm-fixed-price ('FFP") contracts requiring] [added: performance obligations that require] system integration and [removed: cost-plus contracts with] [added: capability development efforts or contain] 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).

Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred to estimated total costs-at-completion [removed: ("EAC").][added: (EAC).]

Our audit procedures related to management’s conclusions regarding whether multiple promises within a single contract represent a single performance obligation, whether [removed: or not] the Company is acting as a principal or an agent in fulfilling identified performance obligations on certain contracts, and estimates of total costs for the performance obligations that recognize revenue using the cost-to-cost method included the following, among others:

◦Evaluated the terms and conditions of each contract and the appropriateness of the accounting treatment in accordance with [added: accounting principles] generally accepted [removed: accounting principles,] [added: in the United States of America,] by:

▪Evaluating the contract within the context of the five-step model [removed: prescribed by 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 [added: and/or products] 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.

Leidos Holdings, Inc. Annual Report - [removed: 59][added: 114]

| | | | | | | December [added: 29, 2023 | | | | | | December] 30, [removed: 2022] [added: 2022] | | | | | | December 31, 2021 | | |

| Cash and cash equivalents | | | | | | $ | [removed: 516] [added: 777] | | | | | $ | [removed: 727] [added: 516] | |

| Receivables, net | | | | | | [removed: 2,350] [added: 2,429] | | | | | | [removed: 2,189] [added: 2,350] | | |

| Inventory, net | | | | | | [removed: 287] [added: 310] | | | | | | [removed: 274] [added: 287] | | |

| Other current assets | | | | | | [removed: 490] [added: 489] | | | | | | [removed: 429] [added: 490] | | |

| Total current assets | | | | | | [removed: 3,643] [added: 4,005] | | | | | | [removed: 3,619] [added: 3,643] | | |

| Property, plant and equipment, net | | | | | | [removed: 847] [added: 961] | | | | | | [removed: 670] [added: 847] | | |

| Intangible assets, net | | | | | | [removed: 952] [added: 667] | | | | | | [removed: 1,177] [added: 952] | | |

| Goodwill | | | | | | [removed: 6,696] [added: 6,112] | | | | | | [removed: 6,744] [added: 6,696] | | |

| Operating lease right-of-use assets, net | | | | | | [removed: 545] [added: 512] | | | | | | [removed: 612] [added: 545] | | |

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

During the third quarter of fiscal year 2023, the Security Enterprise Solutions (“SES”) reporting unit refined its business portfolio and made strategic business decisions to exit certain product offerings, as well as cease operations in certain countries in order to align the operations of the reporting unit with its strategic business plan.

These decisions, along with the continued delays in airline travel infrastructure projects and higher than anticipated servicing costs, contributed to a significant reduction in the reporting unit’s forecasted revenue and cash flows.

The Company’s determination of the estimated fair value of the reporting unit was based on a blended approach, including discounted cash flow-models and market earnings multiple.

Performing audit procedures to evaluate the reasonableness of management’s estimate required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

- We performed a sensitivity analysis of the forecasts of future revenue, earnings before interest, taxes, depreciation and amortization (“EBITDA”) and capital expenditures, which included their impact on the fair value of the SES reporting unit.

- We evaluated management’s ability to accurately forecast future SES reporting unit revenue and operating income, comparing actual results to management’s historical forecasts.

- We evaluated the reasonableness of management’s SES reporting unit revenue growth rates, EBITDA projections and timing of future cash flows by comparing the forecasts to:

◦Historical results and current performance.

◦Internal communications to management and the Board of Directors.

◦Forecasted information included in industry reports considering macroeconomic factors.

- With the assistance of our fair value specialists, we evaluated (1) the valuation methodology utilized, including testing mathematical accuracy of calculations and (2) the projections of future revenue growth rates, the discount rate and the determination of market multiples by either testing the underlying source information, or by developing a range of independent estimates and comparing those to the rate selected by management.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

- We developed an expectation of revenue and compared it to the recorded balance.

▪Evaluating the appropriateness and consistency of the methods and assumptions used by management to develop estimates of future revenues that will be recognized and costs that will be incurred.

February 13, 2024

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| | | | | | | December 29, 2023 | | | | | | December 30, 2022 | | |

| | | | | | | (in millions, except share and per share data) | | | | | | | | |

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| Goodwill impairment charges | | | | | | 596 | | | | | | — | | | | | | — | | |

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| Balance at December 29, 2023 | | | | | | 136 | | | | | | $ | 1,885 | | | | | $ | 2,364 | | | | | $ | (48) | | | | | $ | 4,201 | | | | | $ | 57 | | | | | $ | 4,258 | |

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| Net income | | | | | | $ | 208 | | | | | $ | 693 | | | | | $ | 759 | |

| Goodwill impairment charges | | | | | | 596 | | | | | | — | | | | | | — | | |

| Asset impairment charges | | | | | | 91 | | | | | | 40 | | | | | | 4 | | |

| Effect of foreign exchange rate changes on cash and cash equivalents | | | | | | 6 | | | | | | (6) | | | | | | (2) | | |

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

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

We combined "Credit losses (recoveries), net" into "Selling, general and administrative expenses" on the consolidated statements of operations.

We have certain entities where the functional currency is not the U.S. dollar and have separately presented the effect of exchange rate changes on cash, cash equivalents and restricted cash held in foreign currencies as a separate line in the consolidated statements of cash flows.

Accounting Standards Updates ("ASU") 2020-04, ASU 2021-01, and ASU 2022-06 Reference Rate Reform

In the first half of fiscal 2023, we adopted certain practical expedients available under Accounting Standards Codification ("ASC") 848.

Our term loans are based on a Secured Overnight Financing Rate (“SOFR”) rate (see "Note 13—Debt").

In fiscal 2023, we modified our interest rate swap agreements to reference SOFR (see "Note 12—Derivative Instruments") in conformity with the relief available under ASC 848.

The standard did not have a material impact on our financial position, results of operations or earnings per share.

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

| | | | | | | | | |

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

The goodwill balance was $6,696 million as of December 30, 2022 of which $899 million related to the Security Enterprise Solutions reporting unit.

Performing audit procedures to develop an independent estimate of the fair value of the Security 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 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.

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

We utilized historical results of the reporting unit and inspected third-party industry reports for the global aviation security products and related services markets to develop projections.

Additionally, we developed the discount rate and terminal year growth rate with the assistance of our fair value specialists.

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

We selected guideline peer companies and developed enterprise value multiples of revenues and earnings before interest, taxes, depreciation and amortization.

- 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.

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 obligation and whether the Company is acting as a principal in the fulfillment of the identified performance obligations on certain contracts.

- We tested recorded revenue using a combination of analytical procedures and detailed contract testing.

February 14, 2023

| | | | | | | | | | | | | | | |

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

| | | | | | | (in millions) | | | | | | | | |

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

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

| | | | | | | (in millions) | | | | | | | | | | | | | | |

Leidos Holdings, Inc. Annual Report - 62

| Balance at January 3, 2020 | | | | | | 141 | | | | | | $ | 2,587 | | | | | $ | 896 | | | | | $ | (70) | | | | | $ | 3,413 | | | | | $ | 4 | | | | | $ | 3,417 | |

| Cumulative adjustments related to ASU adoptions | | | | | | — | | | | | | — | | | | | | (1) | | | | | | — | | | | | | (1) | | | | | | — | | | | | | (1) | | |

| Balance at January 4, 2020 | | | | | | 141 | | | | | | 2,587 | | | | | | 895 | | | | | | (70) | | | | | | 3,412 | | | | | | 4 | | | | | | 3,416 | | |

| Net income | | | | | | — | | | | | | — | | | | | | 628 | | | | | | — | | | | | | 628 | | | | | | 1 | | | | | | 629 | | |

Leidos Holdings, Inc. Annual Report - 63

| Loss on debt extinguishment | | | | | | — | | | | | | — | | | | | | 36 | | |

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Effective July 3, 2021, certain contracts were reassigned from the Defense Solutions reportable segment to the Civil reportable segment.

Impact on prior year segment results were determined to be immaterial and have not been recast to reflect this change.

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.

ASU 2021-08, Business Combinations (Topic 805)

In October 2021, the FASB issued ASU 2021-08, which amends how contract assets and liabilities acquired in a business combination are measured.

Current guidance requires contract assets and liabilities to be measured at fair value in accordance with ASC 805, Business Combinations.

The amendments in this Update remove the requirement to measure contract assets and liabilities at fair value and instead require that they be recognized in accordance with ASC 606, Revenue from Contracts with Customers.

We adopted the requirements of ASU 2021-08 using the prospective method effective the first day of fiscal 2022.

For business combinations occurring after adoption, we measured contract assets and liabilities acquired in accordance ASC 606.

We are currently evaluating the impacts of the reference rate reform.

Except for our new $380 million term loan entered into on May 6, 2022 (see "Note 13—Debt"), we currently use the one-month LIBOR for which the rate publication will cease in June 2023.

One-time involuntary termination benefits are recognized as a liability at estimated fair value when the plan of termination has been communicated to employees and certain other criteria are met.

The standalone selling price of the performance obligations is generally based on an expected cost-plus margin approach, in accordance with the FAR.

Our management, with the participation of our principal executive officer (our [removed: 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 [removed: 1934)] [added: 1934,] as [added: amended) as] of December [removed: 30, 2022.][added: 29, 2023.]

Based upon that evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of [removed: 1934] [added: 1934, as amended,] is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission ("SEC").

These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of [removed: 1934] [added: 1934, as amended,] is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Other than [removed: incorporating controls for Cobham Special Mission,] [added: the foregoing,] there have been no [removed: other] changes in our internal control over financial reporting that occurred in the fourth quarter of the period ended December [removed: 30, 2022,] [added: 29, 2023,] covered by this Annual Report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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: 30, 2022,] [added: 29, 2023,] 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: 30, 2022,] [added: 29, 2023,] and has concluded that our internal control over financial reporting as of that date was effective.

Leidos Holdings, Inc. Annual Report - [removed: 110][added: 117]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

We have audited the internal control over financial reporting of Leidos Holdings, Inc. and subsidiaries (the “Company”) as of December [removed: 30, 2022,] [added: 29, 2023,] 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: 30, 2022,] [added: 29, 2023,] 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 [removed: fiscal] year ended December [removed: 30, 2022,] [added: 29, 2023,] of the Company and our report dated February [removed: 14, 2023,] [added: 13, 2024,] expressed an unqualified opinion on those financial statements.

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

Leidos Holdings, Inc. Annual Report - [removed: 111][added: 118]

As of December 29, 2023, we completed the integration of Cobham Special Mission into our controls over financial reporting.

February 13, 2024

February 13, 2024

[Table of Contents](#idfc2de3250d049889cff5bea351405b6_7)

As part of the ongoing integration of Cobham Special Mission, we are in the process of incorporating the controls and related procedures of these businesses.

As permitted by the SEC rules, management's assessment and conclusion on the effectiveness of our internal control over financial reporting as of December 30, 2022, excludes an assessment of the internal control over financial reporting of Cobham Special Mission, acquired on October 30, 2022.

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

As described in Management’s Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Cobham Special Mission, which was acquired on October 30, 2022, and whose financial statements constitute total assets of 1.55%, excluding the preliminary value of goodwill and intangible assets, 0.15% of revenues, and 0.28% of operating income of the consolidated financial statement amounts as of and for the fiscal year ended December 30, 2022.

Accordingly, our audit did not include the internal control over financial reporting at Cobham Special Mission.

Rule 10b5-1 trading arrangement

During the three months ended December 29, 2023, no director or officer of the Company adopted, modified or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Amendment to Bylaws

On February 8, 2024, the Board of Directors of the Company amended Article II, Section 2.02 of its Bylaws to decrease the ownership threshold for stockholders to aggregate their holdings of Company stock to call special meetings, effective on February 8, 2024.

As amended, one stockholder owning at least ten percent (10%), and one or more stockholders representing in aggregate at least fifteen percent (15%), rather than twenty-five percent (25%), of the voting power of the outstanding capital stock of the Company will have the right to call special meetings of stockholders.

As amended, all such stockholders must have held the Company stock for at least one (1) year prior to making the request to the Company.

The Company’s Amended and Restated Bylaws are filed as Exhibit 3.2 hereto.

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.

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: 2023] [added: 2024] Proxy [removed: Statement,] [added: Statement to be filed with the SEC within 120 days of the fiscal year ended December 29, 2023,] which required information is incorporated by reference into this Annual Report on Form 10-K.

We intend to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our code of business ethics by posting such information on our website.

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: 2023] [added: 2024] Proxy Statement, [added: to be filed with the SEC within 120 days of the fiscal year ended December 29, 2023,] which [added: required information] 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: 2023] [added: 2024] Proxy Statement, [added: to be filed with the SEC within 120 days of the fiscal year ended December 29, 2023,] which [added: required information] is incorporated by reference into this Annual Report on Form 10-K.

Leidos Holdings, Inc. Annual Report - [removed: 112][added: 119]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_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: 2023] [added: 2024] Proxy Statement, [added: to be filed with the SEC within 120 days of the fiscal year ended December 29, 2023,] which [added: required information] is incorporated by reference into this Annual Report on Form 10-K.

Information with respect to our equity compensation plans as of December [removed: 30, 2022,] [added: 29, 2023,] is set forth below:

| Equity compensation plans [added: not] approved by security holders [removed: (1)] [added: (5)] | | | | | | [removed: 3,541,752] [added: —] | | | [removed: (2)] | | | [removed: $] [added: —] | [removed: 81.45] | | [removed: (3)] | | | [removed: 10,584,324] [added: —] | | | [removed: (4)] | | |

| Equity compensation plans [removed: not] approved by security holders [removed: (5)] [added: (1)] | | | | | | [removed: —] [added: 3,824,297] | | | [added: (2)] | | | [removed: —] [added: $] | [added: 86.22] | | [added: (3)] | | | [removed: —] [added: 8,969,379] | | | [removed: (5)] [added: (4)] | | |

(2)Represents (i) [removed: 1,785,729] [added: 1,973,922] 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: 239,934] [added: 369,765] 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: 7,423] [added: no] shares of Leidos common stock issuable pursuant to dividend equivalent rights and (iii) [removed: 1,748,600] [added: 1,850,375] 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: 7,687,280] [added: 6,635,682] and [removed: 2,897,044] [added: 2,333,697] shares of Leidos common stock under the 2017 Omnibus Incentive Plan and 2006 Employee Stock Purchase Plan, respectively.

Those shares [removed: (i)] that are issued under the 2017 Omnibus Incentive Plan and 2006 Equity Incentive Plan that are forfeited or repurchased at the original purchase price or less or that are issuable upon exercise of awards granted under the plan that expire or become unexercisable for any reason after their grant date without having been exercised in [removed: full, (ii) that are withheld from an option or stock award pursuant to a Company-approved net exercise provision, or (iii) that are not delivered to or are award shares surrendered by a holder in consideration for applicable tax withholding will continue to be available for issuance under the 2017 Omnibus Incentive Plan.][added: full.]

| Total | | | | | | 3,824,297 | | | (2) | | | $ | 86.22 | | (3) | | | 8,969,379 | | | | | |

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

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: 2023] [added: 2024] Proxy Statement, [added: to be filed with the SEC within 120 days of the fiscal year ended December 29, 2023,] which [added: required information] 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: 2023] [added: 2024] Proxy Statement, [added: to be filed with the SEC within 120 days of the fiscal year ended December 29, 2023,] which [added: required information] is incorporated by reference into this Annual Report on Form 10-K.

Leidos Holdings, Inc. Annual Report - [removed: 113][added: 120]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

[Consolidated Balance [removed: Sheets](#idb11c8fd3bed4955b736c2a6a1df863c_97)][added: Sheets](#idfc2de3250d049889cff5bea351405b6_97)]

[Consolidated Statements [removed: of Income](#idb11c8fd3bed4955b736c2a6a1df863c_100)][added: of](#idfc2de3250d049889cff5bea351405b6_100) [Operation](#idfc2de3250d049889cff5bea351405b6_100)[s](#idfc2de3250d049889cff5bea351405b6_100)]

[Consolidated Statements of Comprehensive [removed: Income](#idb11c8fd3bed4955b736c2a6a1df863c_103)][added: Income](#idfc2de3250d049889cff5bea351405b6_103)]

[Consolidated Statements of [removed: Equity](#idb11c8fd3bed4955b736c2a6a1df863c_106)][added: Equity](#idfc2de3250d049889cff5bea351405b6_106)]

[Consolidated Statements of Cash [removed: Flows](#idb11c8fd3bed4955b736c2a6a1df863c_109)][added: Flows](#idfc2de3250d049889cff5bea351405b6_109)]

[Notes to Consolidated Financial [removed: Statements](#idb11c8fd3bed4955b736c2a6a1df863c_115)][added: Statements](#idfc2de3250d049889cff5bea351405b6_115)]

| [removed: 2.1] [added: 10.13*] | | | | | | [removed: [Distribution] [added: [Executive Employment] Agreement dated [removed: September 25, 2013.] [added: June 30, 2014.] Incorporated by reference to Exhibit [removed: 2.1] [added: 10.1] to our Current Report on Form 8-K filed with the SEC on [removed: October 1, 2013.](http://www.sec.gov/Archives/edgar/data/353394/000119312513387297/d605465dex21.htm)] [added: July, 2, 2014.](http://www.sec.gov/Archives/edgar/data/1336920/000119312514258238/d752502dex101.htm)] | | |

| [removed: 2.2] [added: 10.24] | | | | | | [removed: [Agreement and Plan of Merger,] [added: [Intellectual Property Matters Agreement,] dated [removed: January 26,] [added: August 16,] 2016, [removed: among Leidos Holdings, Inc.,] [added: between] Lockheed Martin [removed: Corporation,] [added: Corporation and] Abacus Innovations [removed: Corporation, and Lion Merger Co.] [added: Corporation.] Incorporated by reference to Exhibit [removed: 2.1] [added: 10.3] to our [removed: Current] [added: Quarterly] Report on Form [removed: 8-K] [added: 10-Q] filed with the SEC on [removed: January 28, 2016.](http://www.sec.gov/Archives/edgar/data/353394/000119312516442082/d43791dex21.htm)] [added: November 4, 2016.](http://www.sec.gov/Archives/edgar/data/1336920/000133692016000126/ldos093016q3ex103.htm)] | | |

| [removed: 2.6] [added: 10.6*] | | | | | | [removed: [Stock Purchase Agreement, dated December 17, 2019, by] [added: [Amended] and [removed: among] [added: Restated] Leidos Holdings, [removed: Inc., Leidos, Inc., DYHC, Inc. and Dynetics, Inc. Employee Stock Ownership Trust, as amended (which is part of the Dynetics, Inc.] [added: Inc.’s 2006] Employee Stock [removed: Ownership Plan).] [added: Purchase Plan.] Incorporated by reference to Exhibit [removed: 2.1] [added: 10.1] to our [removed: Current] [added: Quarterly] Report on Form [removed: 8-K] [added: 10-Q] filed with the SEC on [removed: December 18, 2019.](http://www.sec.gov/Archives/edgar/data/1336920/000133692019000058/exhibit21-stockpurchas.htm)] [added: August 4, 2017.](http://www.sec.gov/Archives/edgar/data/1336920/000133692017000047/ldos063017q2ex101.htm)] | | |

| [removed: 2.7] [added: 4.8] | | | | | | [removed: [Sale Agreement] [added: [Indenture relating to the 2.300% Senior Notes due 2031,] dated as of [removed: February 3, 2020, by and] [added: October 8, 2020] among [removed: L3 Harris Technologies, Inc.,] Leidos, [removed: Inc. and] [added: Inc.,] Leidos Holdings, [removed: Inc.] [added: Inc, as guarantor, and Citibank, N.A., as trustee.] Incorporated by reference to Exhibit [removed: 2.1] [added: 4.1] to our Current Report on Form 8-K filed with the SEC on [removed: February 4, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000133692020000013/ex21saleagreement1.htm)] [added: October 9, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000119312520266581/d69928dex41.htm)] | | |

| 3.2 | | | | | | [Amended and Restated Bylaws of Leidos Holdings, [removed: Inc.](https://www.sec.gov/Archives/edgar/data/1336920/000133692023000015/ldos12302022ex32amendedand.htm)] [added: Inc.](https://www.sec.gov/Archives/edgar/data/1336920/000133692024000008/ex32amendedandrestatedofle.htm)] | | |

Leidos Holdings, Inc. Annual Report - [removed: 114][added: 121]

[Table of [removed: Contents](#idb11c8fd3bed4955b736c2a6a1df863c_7)][added: Contents](#idfc2de3250d049889cff5bea351405b6_7)]

| 4.4 | | | | | | [removed: [Bridge Credit Agreement] [added: [Indenture relating to the 2.950% Senior Notes due 2023, 3.625% Senior Notes due 2025 and the 4.375% Senior Notes due 2030,] dated as of [removed: January 31,] [added: May 12,] 2020, [added: by and] among [added: Leidos, Inc., as issuer,] Leidos Holdings, Inc., [removed: Leidos, Inc.] [added: as guarantor,] and Citibank, [removed: N.A.] [added: N.A., as trustee.] Incorporated by reference to Exhibit 4.1 to our Current Report on Form 8-K filed with the SEC on [removed: January 31, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000133692020000009/exhibit41-bridgecredit.htm)] [added: May 12, 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit41-indenture.htm)] | | |

| 4.5 | | | | | | [removed: [Indenture relating to the] [added: [Form of] 2.950% Senior Notes due [removed: 2023, 3.625% Senior Notes due 2025 and the 4.375% Senior Notes due 2030, dated as of May 12, 2020, by and among Leidos, Inc., as issuer, Leidos Holdings, Inc., as guarantor, and Citibank, N.A., as trustee.] [added: 2023.] Incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] 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/exhibit41-indenture.htm)] [added: 2020.](https://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit44-formof2030no.htm)] | | |

| 4.6 | | | | | | [Form of [removed: 2.950%] [added: 3.625%] Senior Notes due [removed: 2023.] [added: 2025.] Incorporated by reference to Exhibit [removed: 4.2] [added: 4.3] to our Current Report on Form 8-K filed with the SEC on May 12, [removed: 2020.](https://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit44-formof2030no.htm)] [added: 2020.](http://www.sec.gov/Archives/edgar/data/1336920/000133692020000046/exhibit43-formof2025no.htm)] | | |