RESTON, Va., Feb. 23, 2021 /PRNewswire/ -- Leidos
Holdings, Inc. (NYSE: LDOS), a FORTUNE 500® science and
technology leader, today reported financial results for the fourth
quarter and fiscal year 2020.
Roger Krone, Leidos Chairman and
Chief Executive Officer, commented: "Fourth quarter results reflect
the resilience of our growing portfolio with new record levels of
revenue and backlog, coupled with margin expansion and further
balance sheet optimization. This performance positions us for
above-market growth in 2021, fueled by our talented diverse
workforce who continue to engineer and deliver technologically
innovative and secure solutions for our customers' evolving
needs."
Fourth Quarter Summary Results
Revenues for the quarter were $3.25
billion, compared to $2.95
billion in the prior year quarter, reflecting a 10.1%
increase. Revenues for the quarter included $300 million and
$89 million related to the acquisitions of Dynetics, Inc.
("Dynetics") and L3Harris Technologies' security detection and
automation businesses (the "SD&A Businesses"),
respectively.
Operating income for the quarter was $299
million, compared to $261
million in the prior year quarter. Operating income margin
increased to 9.2% from 8.8% in the prior year quarter. Non-GAAP
operating margin for the quarter was 10.7%, compared to 10.5% in
the prior year quarter, primarily due to favorable margin
performance on certain contracts and higher margins on certain
program wins.
Diluted earnings per share ("EPS") attributable to Leidos common
stockholders for the quarter was $1.37, compared to $1.26 in the prior year quarter. Non-GAAP diluted
EPS for the fourth quarter was $1.63
compared to $1.51 in the prior year
quarter. The weighted average diluted share count for the quarter
was 144 million, consistent with the prior year quarter.
Defense Solutions
Defense Solutions revenues for the quarter of $1.93 billion increased $273 million, or 16.5%, compared to the prior
year quarter. The revenue growth was primarily attributable to
$300 million of revenues related to the acquisition of
Dynetics and program wins, partially offset by a net decrease in
volumes on certain programs and the completion of certain
contracts.
Defense Solutions operating income margin for the quarter was
7.6%, compared to 8.9% in the prior year quarter. On a non-GAAP
basis, operating margin for the quarter was 8.9%, compared to 9.8%
in the prior year quarter, primarily attributable to the release of
a contract reserve in the prior year quarter, a net decrease in
volumes on certain programs and the completion of certain
contracts, partially offset by higher margins on certain program
wins.
Civil
Civil revenues for the quarter of $811
million increased $38 million,
or 4.9%, compared to the prior year quarter. The revenue growth was
primarily attributable to $89 million of revenues related to
the acquisition of the SD&A Businesses and program wins,
partially offset by a net decrease in volumes on certain programs,
including negative impacts on certain contracts due to the
coronavirus pandemic ("COVID-19"), and the completion of certain
contracts.
Civil operating income margin for the quarter was 11.0%,
compared to 9.6% in the prior year quarter. On a non-GAAP basis,
operating margin for the quarter was 12.3%, compared to 12.0% in
the prior year quarter, primarily attributable to favorable product
mix and higher margins on certain program wins.
Health
Health revenues for the quarter of $513
million decreased $13 million,
or 2.5%, as compared to the prior year quarter. The revenue decline
was primarily attributable to a net decrease in volumes on certain
programs and the completion of certain contracts, partially offset
by recoveries on certain programs previously delayed due to
COVID-19.
Health operating income margin for the quarter was 16.8%,
compared to 13.9% in the prior year quarter. On a non-GAAP basis,
operating margin for the quarter was 18.5%, compared to 16.0% in
the prior year quarter, primarily attributable to favorable volume
and margin performance on certain contracts.
Fiscal Year 2020 Summary Results
Revenues for fiscal year 2020 were $12.30
billion, compared to $11.09
billion in the prior year, reflecting a 10.8% increase.
Revenues for the fiscal year included $937
million and $243 million
related to the acquisitions of Dynetics and the SD&A
Businesses, respectively.
Operating income for fiscal year 2020 was $998 million, compared to $912 million in the prior year. Operating income
margin for fiscal year 2020 was 8.1%, compared to 8.2% in the prior
year. Non-GAAP operating margin was 10.1%, compared to 9.9% in the
prior year, primarily due to a net gain recognized upon the receipt
of proceeds related to the VirnetX, Inc. ("VirnetX") legal matter,
higher margins on certain program wins and lower indirect
expenditures due to cost reduction efforts in response to COVID-19.
This was partially offset by negative impacts from reduced volume
on certain contracts due to COVID-19 and a net gain recognized upon
the receipt of the Greek arbitration award in the prior year.
Diluted EPS attributable to Leidos common stockholders for
fiscal year 2020 was $4.36, compared
to $4.60 for the prior year. Non-GAAP
diluted EPS for fiscal year 2020 was $5.83, compared to $5.17 in the prior year. The diluted share count
was 144 million compared to 145 million in the prior year.
Defense Solutions
Defense Solutions revenues of $7.34
billion for fiscal year 2020 increased $1.04 billion, or 16.5%, compared to the prior
year. The revenue growth was primarily attributable to
$937 million of revenues related to the acquisition of
Dynetics, program wins and a net increase in materials volume on
certain programs. This was partially offset by the completion of
certain contracts and negative impacts from reduced volume on
certain contracts due to COVID-19.
Defense Solutions operating income margin for fiscal year 2020
was 6.9%, compared to 7.5% in the prior year. On a non-GAAP basis,
operating margin for the year was 8.2% compared to 8.5% in the
prior year, primarily attributable to negative impacts from reduced
volume on certain contracts due to COVID-19, partially offset by
higher margins on certain program wins and lower indirect
expenditures.
Civil
Civil revenues of $2.99 billion
for fiscal year 2020 increased $198
million, or 7.1%, compared to the prior year. The revenue
growth was primarily attributable to $243
million of revenues related to the acquisition of the
SD&A Businesses and program wins. This was partially offset by
the completion of certain contracts and negative impacts from
reduced volume on certain contracts due to COVID-19.
Civil operating income margin for fiscal year 2020 was 9.4%,
compared to 8.3% in the prior year. On a non-GAAP basis, operating
margin for the year was 11.7%, compared to 10.9% in the prior year,
primarily attributable to a decrease in bad debt expense and higher
margins on certain program wins, partially offset by the completion
of certain contracts.
Health
Health revenues of $1.96 billion
for fiscal year 2020 decreased $36
million, or 1.8%, compared to the prior year. The revenue
decline was primarily attributable to the timing of program
execution due to COVID-19, the impact from the sale of our health
staff augmentation business in the prior year and the completion of
certain contracts. This was partially offset by a net increase in
volumes on certain programs, program wins and the impact from our
acquisition of IMX Medical Management Services, Inc. ("IMX") in the
prior year.
Health operating income margin for fiscal year 2020 was 12.0%,
compared to 12.1% in the prior year. On a non-GAAP basis, operating
margin for the year was 14.4%, compared to 14.3% in the prior year,
primarily attributable to increased volume on certain higher margin
contracts, partially offset by reduced volume on certain managed
service contracts with fixed cost infrastructures that were
impacted by COVID-19.
Cash Flow Summary
Net cash used in operating activities for the quarter were
$52 million compared to $169 million net cash provided by operating
activities in the prior year quarter. The higher operating cash
outflows were primarily due to the sale of accounts receivable in
the prior quarter that did not recur in the current quarter and the
timing of payroll payments.
Net cash used in investing activities for the quarter were
$101 million compared to $54 million in the prior year quarter. The higher
cash outflows were primarily due to cash paid related to the
acquisition of the SD&A Businesses.
Net cash provided by financing activities for the quarter were
$98 million compared to $144 million net cash used in financing
activities in the prior year quarter. The higher cash inflows were
primarily due to proceeds received related to the issuance of our
$1.0 billion senior notes and the
timing of dividend payments, partially offset by principal payments
related to refinancing of outstanding debt and higher stock
repurchases in the current year quarter.
Net cash provided by operating activities for the fiscal year
were $1,334 million compared to
$992 million in the prior year. The
higher operating cash inflows were primarily due to the timing of
payroll payments, including the deferral of tax payments under the
Coronavirus Aid, Relief and Economic Security Act ("CARES Act"),
and the receipt of proceeds related to the VirnetX legal
matter.
Net cash used in investing activities for the fiscal year were
$2,815 million compared to
$65 million net cash provided by
investing activities in the prior year. The higher cash outflows
were primarily due to net cash paid related to the acquisitions of
Dynetics and the SD&A Businesses, net proceeds received in the
prior year for the disposition of our commercial cybersecurity and
health staff augmentation businesses and the sale of real estate
properties and higher purchases of equipment and leasehold
improvements associated with our new global headquarters. This was
partially offset by cash paid related to the acquisition of IMX in
the prior year.
Net cash provided by financing activities for the fiscal year
were $1,451 million compared to
$709 million net cash used in
financing activities in the prior year. The increase in financing
cash inflows were primarily due to proceeds received related to the
refinancing and issuance of new debt and higher stock repurchases
in the prior year. This was partially offset by principal
repayments of outstanding debt and the retirement of the
$450 million senior notes in the
current year.
As of January 1, 2021, the Company had $524 million in cash and cash equivalents and
$4.7 billion in debt.
New Business Awards
Net bookings totaled $3.3 billion
in the fourth quarter of fiscal year 2020 and $17.8 billion for fiscal year 2020, representing
a book-to-bill ratio of 1.0 and 1.4 for the fourth quarter and
fiscal year 2020, respectively.
Notable recent awards received include:
- Next Generation Enterprise Network Service
Management: The Company was awarded a prime contract by
the Naval Information Warfare Systems Command, formerly known as
the Space and Naval Warfare Systems Command, to provide global
network services under the Next Generation Enterprise Network
Re-compete Service Management, Integration & Transport
contract. Under the contract, Leidos will unify, operate and
maintain the shore-based networks and data management for the
Department of the Navy's Program Executive Office Digital to
improve capability and service under one enterprise network
construct. The single award, indefinite delivery/indefinite
quantity, firm-fixed-price and cost-plus contract has a five-year
base period of performance followed by three one-year option
periods, and an approximate value of $7.7
billion, if all options are exercised.
- Special Operations Command Tactical Airborne Multi-Sensor
Platforms Support: The Company was awarded a task order
by Army Contracting Command - Aberdeen Proving Ground under the
Responsive Strategic Sourcing for Services indefinite
delivery/indefinite quantity contract. Under the contract, Leidos
will provide pilot services, airborne sensor operators, hub and
spoke operations/excursion support, staffing for the Intelligence
Coordination Center, system training, logistics, aircraft and
primary mission equipment maintenance and integration,
configuration management and engineering support services in
support of the program's DHC- 8 and King Air 300 aircraft. The
award has a total value of $649
million and includes a one-year base period of performance
followed by four one-year option periods.
- U.S. Intelligence Community: The Company was
awarded contracts valued at $304
million, if all options are exercised, by U.S. national
security and intelligence clients. Though the specific nature of
these contracts is classified, they all encompass mission-critical
services that help to counter global threats and strengthen
national security.
The Company's backlog at the end of fiscal year 2020 was
$31.9 billion, of which $6.6 billion was funded.
Intent to Acquire Gibbs & Cox, Inc.
Consistent with Leidos strategy to add capabilities and deepen
customer relationships, the Company has entered into a definitive
agreement to acquire Gibbs & Cox, Inc. ("Gibbs & Cox"), the
largest, full-service independent engineering and design firm
specializing in naval architecture and marine engineering, for
$380 million in cash. Headquartered
in Arlington, Virginia, Gibbs
& Cox has 525 employees. Over its 90 plus year history, Gibbs
& Cox has remained a leader in maritime innovation and is on
the frontlines of providing maritime
solutions. The deal extends Leidos into an
attractive maritime market where Leidos is under-penetrated today,
and adds valuable engineering talent (naval architects and digital
engineers) to the team. It further positions Leidos for long-term
growth in the maritime unmanned market – a market requiring tight
integration of ship design and autonomy systems. The transaction is
expected to close in the second quarter of fiscal year 2021,
subject to satisfaction of customary closing conditions.
Forward Guidance
The Company's outlook for fiscal year 2021, which excludes the
announced acquisition of Gibbs & Cox, is as follows:
- Revenues of $13.7 billion to
$14.1 billion;
- Adjusted EBITDA margins of 10.3% to 10.5%;
- Non-GAAP diluted EPS of $6.15 to
$6.45; and
- Cash flows provided by operating activities at or above
$850 million.
Non-GAAP diluted EPS excludes amortization of acquired
intangible assets, asset impairment charges, acquisition,
integration and restructuring costs, amortization of equity method
investment, gain on sale of business, acquisition related financing
costs, loss on debt modification and other tax adjustments. For
additional information regarding non-GAAP diluted EPS and Leidos'
other non-GAAP financial measures, see the related explanations and
reconciliations to GAAP measures included elsewhere in this
release.
The Company does not provide a reconciliation of forward-looking
adjusted EBITDA margins (non-GAAP) or non-GAAP diluted EPS to GAAP
net income, due to the inherent difficulty in forecasting and
quantifying certain amounts that are necessary for such
reconciliation. Because certain deductions for non-GAAP exclusions
used to calculate projected net income may vary significantly based
on actual events, the Company is not able to forecast on a GAAP
basis with reasonable certainty all deductions needed in order to
provide a GAAP calculation of projected net income at this time.
The amounts of these deductions may be material and, therefore,
could result in projected GAAP net income and diluted EPS being
materially less than projected adjusted EBITDA margins (non-GAAP)
and non-GAAP diluted EPS.
COVID-19
The COVID-19 pandemic is affecting major economic and financial
markets, and effectively all industries and governments are facing
challenges, which has resulted in a period of business disruption,
the length and severity of which cannot be predicted. The pandemic
has resulted in significant travel restrictions, government orders
to "shelter-in-place", quarantine restrictions and significant
disruption of the financial markets. We have acted to protect the
health and safety of our employees, comply with workplace health
and safety regulations and work with our customers to minimize
disruptions. The pandemic has impacted each of our groups,
primarily in access to customer sites, travel restrictions,
limitations of remote work and COVID-19 related costs.
Consistent with federal, state and local guidance, we perform
work that is essential to support the critical infrastructure of
the United States, the Defense
Industrial Base and healthcare sector, and we continue to operate
in support of our customers. We have taken steps to support
increased teleworking and safe workplace environments. We have some
minor business operations that are not designated as critical
infrastructure and therefore have been required to operate in
minimal conditions.
For the quarter and fiscal year 2020, COVID-19 adversely
impacted revenues by approximately $12
million and $198 million,
respectively, and impacted operating income by approximately
$8 million and $96 million, respectively, as compared to prior
year results. Within our Health segment we saw recoveries in the
fourth quarter of fiscal year 2020 and continue to expect to see
further recoveries in fiscal year 2021. Our Defense Solutions
segment experienced less of a negative impact in the fourth quarter
of fiscal year 2020 than in previous quarters. We also experienced
lower indirect expenditures for fiscal year 2020 as a result of
COVID-19 which partially offset the operating income impact on our
programs. 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 and efficacy of vaccines, all of
which are uncertain and cannot be predicted.
The CARES Act, which is effective until March 31, 2021, enabled us to defer payment of
the employer portion of social security taxes. As of January 1, 2021, we deferred $123 million of employer social security tax
payments and received $12 million
from the Employee Retention Credit.
We have taken measures to protect the health and well-being of
our workforce and are working with our customers to minimize the
delay and disruption of the award and performance on our contracts.
Many of our employees continue to work remotely while our offices
remain open with limited capacity.
Conference Call Information
Leidos management will discuss operations and financial results
in an earnings conference call beginning at 8 A.M. eastern on February 23, 2021.
Analysts and institutional investors may participate by dialing +1
(877) 869-3847 (U.S. dial-in) or +1 (201) 689-8261 (international
dial-in).
A live audio broadcast of the conference call along with a
supplemental presentation will be available to the public through
links on the Leidos Investor Relations website
(http://ir.leidos.com).
After the call concludes, an audio replay can be accessed on the
Leidos Investor Relations website or by dialing +1 (877) 660-6853
(toll-free U.S.) or +1 (201) 612-7415 (international) and entering
conference ID 13715040.
About Leidos
Leidos is a Fortune 500® information technology,
engineering, and science solutions and services leader working to
solve the world's toughest challenges in the defense, intelligence,
homeland security, civil and health markets. The Company's 38,000
employees support vital missions for government and commercial
customers.
For more information, visit www.leidos.com.
Forward-Looking Statements
Certain statements in this release contain or are based on
"forward-looking" information within the meaning of the Private
Securities Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by words such as "expects,"
"intends," "plans," "anticipates," "believes," "estimates,"
"guidance" and similar words or phrases. Forward-looking statements
in this release include, among others, estimates of future
revenues, adjusted EBITDA margins, diluted EPS (including on a
non-GAAP basis) and cash flows provided by operating activities, as
well as statements about our business contingency plans, the impact
of COVID-19 and related actions taken to prevent its spread and
contract awards. These statements reflect our belief and
assumptions as to future events that may not prove to be
accurate.
Actual performance and results may differ materially from those
results anticipated by our guidance and other forward-looking
statements made in this release depending on a variety of factors,
including, but not limited to: the impact of COVID-19 or future
epidemics on our business, including the potential for facility
closures, re-evaluation of U.S. government spending levels and
priorities, delay of new contract awards, our ability to recover
costs under contracts and insurance challenges; developments in the
U.S. government defense and non-defense budgets, including budget
reductions, sequestration, implementation of spending limits or
changes in budgetary priorities, or delays in the U.S. government
budget process or approval of raising the debt ceiling; delays in
the U.S. government contract procurement process or the award of
contracts and delays or loss of contracts as a result of competitor
protests; changes in U.S. government procurement rules, regulations
and practices; our compliance with various U.S. government and
other government procurement rules and regulations; governmental
reviews, audits and investigations of our company; our ability to
effectively compete and win contracts with the U.S. government and
other customers; our reliance on information technology spending by
hospitals/healthcare organizations; our reliance on infrastructure
investments by industrial and natural resources organizations;
energy efficiency and alternative energy sourcing investments;
investments by U.S. government and commercial organizations in
environmental impact and remediation projects; our ability to
attract, train and retain skilled employees, including our
management team, and to obtain security clearances for our
employees; our ability to accurately estimate costs associated with
our firm-fixed-price contracts and other contracts; resolution of
legal and other disputes with our customers and others or legal or
regulatory compliance issues; cybersecurity, data security or other
security threats, system failures or other disruptions of our
business; our compliance with international, federal, state and
local laws and regulations regarding privacy, data security,
protection, storage, retention, transfer and disposal, technology
protection and personal information; the damage and disruption to
our business resulting from natural disasters; our ability to
effectively acquire businesses and make investments; our ability to
maintain relationships with prime contractors, subcontractors and
joint venture partners; our ability to manage performance and other
risks related to customer contracts; the failure of our inspection
or detection systems to detect threats; the adequacy of our
insurance programs, customer indemnifications or other liability
protections designed to protect us from significant product or
other liability claims; our ability to manage risks associated with
our international business; exposure to lawsuits and contingencies
associated with Lockheed Martin's Information Systems & Global
Solutions business; our ability to protect our intellectual
property and other proprietary rights by third parties of
infringement, misappropriation or other violations by us of their
intellectual property rights; our ability to prevail in litigation
brought by third parties of infringement, misappropriation or other
violations by us of their intellectual property rights; our ability
to declare future dividends based on our earnings, financial
condition, capital requirements and other factors, including
compliance with applicable law and our agreements; our ability to
grow our commercial health and infrastructure businesses, which
could be negatively affected by budgetary constraints faced by
hospitals and by developers of energy and infrastructure projects;
our ability to successfully integrate acquired businesses; and our
ability to execute our business plan and long-term management
initiatives effectively and to overcome these and other known and
unknown risks that we face. This release also contains statements
about the proposed acquisition of Gibbs & Cox that are based on
assumptions currently believed to be valid but involve significant
risks and uncertainties, many of which are beyond our control,
which could cause our actual results to differ materially from
these forward-looking statements with respect to the transaction,
including risks relating to anticipated tax treatment, ability to
retain key personnel, the dependency of the transaction on market
conditions and the impact of a change in market conditions on the
value to be received in the transaction, unforeseen liabilities,
future capital expenditures, uncertainty as to the expected
financial condition and economic performance of the Company
following the closing, including future revenues, expenses,
earnings, indebtedness, losses, prospects, business strategies for
the management, expansion and growth of the Company following the
closing, our ability to integrate the businesses successfully and
to achieve anticipated synergies, and the risk that disruptions
from the transaction will harm our business. These are only some of
the factors that may affect the forward-looking statements
contained in this release. For further information concerning risks
and uncertainties associated with our business, please refer to the
filings we make from time to time with the U.S. Securities and
Exchange Commission ("SEC"), including the "Risk Factors,"
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Legal Proceedings" sections of our
latest Annual report on Form 10-K and quarterly reports on Form
10-Q, all of which may be viewed or obtained through the Investor
Relations section of our website at www.leidos.com.
All information in this release is as of February 23, 2021.
The Company expressly disclaims any duty to update the guidance or
any other forward-looking statement provided in this release to
reflect subsequent events, actual results or changes in the
Company's expectations. The Company also disclaims any duty to
comment upon or correct information that may be contained in
reports published by investment analysts or others.
CONTACTS:
|
|
|
|
Investor
Relations:
|
Media
Relations:
|
Peter M.
Berl
|
Melissa Lee
Dueñas
|
571.526.7582
|
571.526.6850
|
ir@leidos.com
|
Duenasml@leidos.com
|
LEIDOS HOLDINGS,
INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF INCOME
|
(in millions,
except per share amounts)
|
|
|
|
Three Months
Ended
|
|
|
Twelve Months
Ended
|
|
|
|
January 1,
2021
|
|
|
January 3,
2020
|
|
|
January 1,
2021
|
|
|
January 3,
2020
|
|
Revenues
|
|
$
|
3,252
|
|
|
$
|
2,954
|
|
|
$
|
12,297
|
|
|
$
|
11,094
|
|
Cost of
revenues
|
|
2,761
|
|
|
2,527
|
|
|
10,560
|
|
|
9,546
|
|
Selling, general and
administrative expenses
|
|
187
|
|
|
171
|
|
|
770
|
|
|
689
|
|
Bad debt expense and
recoveries
|
|
2
|
|
|
(5)
|
|
|
(68)
|
|
|
(40)
|
|
Acquisition,
integration and restructuring costs
|
|
6
|
|
|
2
|
|
|
39
|
|
|
5
|
|
Asset impairment
charges
|
|
1
|
|
|
—
|
|
|
12
|
|
|
—
|
|
Equity earnings of
non-consolidated subsidiaries
|
|
(4)
|
|
|
(2)
|
|
|
(14)
|
|
|
(18)
|
|
Operating
income
|
|
299
|
|
|
261
|
|
|
998
|
|
|
912
|
|
Non-operating
expense:
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(46)
|
|
|
(34)
|
|
|
(179)
|
|
|
(133)
|
|
Other (expense)
income, net
|
|
(8)
|
|
|
—
|
|
|
(38)
|
|
|
87
|
|
Income before income
taxes
|
|
245
|
|
|
227
|
|
|
781
|
|
|
866
|
|
Income tax
expense
|
|
(48)
|
|
|
(46)
|
|
|
(152)
|
|
|
(196)
|
|
Net income
|
|
197
|
|
|
181
|
|
|
629
|
|
|
670
|
|
Less: net income
attributable to non-controlling interest
|
|
—
|
|
|
—
|
|
|
1
|
|
|
3
|
|
Net income attributable
to Leidos common stockholders
|
|
$
|
197
|
|
|
$
|
181
|
|
|
$
|
628
|
|
|
$
|
667
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
1.39
|
|
|
$
|
1.27
|
|
|
$
|
4.42
|
|
|
$
|
4.66
|
|
Diluted
|
|
1.37
|
|
|
1.26
|
|
|
4.36
|
|
|
4.60
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
142
|
|
|
142
|
|
|
142
|
|
|
143
|
|
Diluted
|
|
144
|
|
|
144
|
|
|
144
|
|
|
145
|
|
|
|
|
|
|
|
|
|
|
Cash dividends
declared per share
|
|
$
|
0.34
|
|
|
$
|
0.34
|
|
|
$
|
1.36
|
|
|
$
|
1.32
|
|
LEIDOS HOLDINGS,
INC.
UNAUDITED CONSOLIDATED BALANCE SHEETS
(in
millions)
|
|
|
|
January 1,
2021
|
|
January 3,
2020
|
ASSETS
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
524
|
|
|
$
|
668
|
|
Receivables,
net
|
|
2,137
|
|
|
1,734
|
|
Inventory,
net
|
|
276
|
|
|
72
|
|
Other current
assets
|
|
402
|
|
|
338
|
|
Total current
assets
|
|
3,339
|
|
|
2,812
|
|
Property, plant and
equipment, net
|
|
604
|
|
|
287
|
|
Intangible assets,
net
|
|
1,216
|
|
|
530
|
|
Goodwill
|
|
6,313
|
|
|
4,912
|
|
Operating lease
right-of-use assets, net
|
|
581
|
|
|
400
|
|
Other
assets
|
|
458
|
|
|
426
|
|
|
|
$
|
12,511
|
|
|
$
|
9,367
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
2,175
|
|
|
$
|
1,837
|
|
Accrued payroll and
employee benefits
|
|
632
|
|
|
435
|
|
Long-term debt,
current portion
|
|
100
|
|
|
61
|
|
Total current
liabilities
|
|
2,907
|
|
|
2,333
|
|
Long-term debt, net
of current portion
|
|
4,644
|
|
|
2,925
|
|
Operating lease
liabilities
|
|
564
|
|
|
326
|
|
Deferred tax
liabilities
|
|
234
|
|
|
184
|
|
Other long-term
liabilities
|
|
291
|
|
|
182
|
|
Commitments and
contingencies
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Preferred stock,
$0.0001 par value, 10 million shares authorized and no shares
issued and
outstanding at January 1, 2021 and
January 3, 2020
|
|
—
|
|
|
—
|
|
Common stock, $0.0001
par value, 500 million shares authorized, 142 million and 141
million shares issued and outstanding at
January 1, 2021 and January 3, 2020,
respectively
|
|
—
|
|
|
—
|
|
Additional paid-in
capital
|
|
2,580
|
|
|
2,587
|
|
Retained
earnings
|
|
1,328
|
|
|
896
|
|
Accumulated other
comprehensive loss
|
|
(46)
|
|
|
(70)
|
|
Total Leidos
stockholders' equity
|
|
3,862
|
|
|
3,413
|
|
Non-controlling
interest
|
|
9
|
|
|
4
|
|
Total
equity
|
|
3,871
|
|
|
3,417
|
|
|
|
$
|
12,511
|
|
|
$
|
9,367
|
|
LEIDOS HOLDINGS,
INC.
|
UNAUDITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
millions)
|
|
|
|
Three Months
Ended
|
|
Twelve Months
Ended
|
|
|
January 1,
2021
|
|
January 3,
2020
|
|
January 1,
2021
|
|
January 3,
2020
|
Cash flows from
operations:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
197
|
|
|
$
|
181
|
|
|
$
|
629
|
|
|
$
|
670
|
|
Adjustments to
reconcile net income to net cash (used in) provided by
operations:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
68
|
|
|
60
|
|
|
282
|
|
|
234
|
|
Gain on sale of
businesses
|
|
—
|
|
|
(1)
|
|
|
—
|
|
|
(88)
|
|
Stock-based
compensation
|
|
17
|
|
|
14
|
|
|
62
|
|
|
52
|
|
Loss on debt
extinguishment
|
|
5
|
|
|
—
|
|
|
36
|
|
|
—
|
|
Asset impairment
charges
|
|
1
|
|
|
—
|
|
|
12
|
|
|
—
|
|
Deferred income
taxes
|
|
(2)
|
|
|
(11)
|
|
|
(4)
|
|
|
18
|
|
Bad debt
expense
|
|
2
|
|
|
(7)
|
|
|
13
|
|
|
12
|
|
Other
|
|
(3)
|
|
|
—
|
|
|
1
|
|
|
3
|
|
Change in assets and
liabilities, net of effects of acquisitions and
dispositions:
|
|
|
|
|
|
|
|
|
Receivables
|
|
(267)
|
|
|
48
|
|
|
(127)
|
|
|
116
|
|
Other current assets
and other long-term assets
|
|
55
|
|
|
7
|
|
|
104
|
|
|
41
|
|
Accounts payable and
accrued liabilities and other long-term liabilities
|
|
(60)
|
|
|
(164)
|
|
|
151
|
|
|
(71)
|
|
Accrued payroll and
employee benefits
|
|
(86)
|
|
|
(12)
|
|
|
161
|
|
|
(29)
|
|
Income taxes
receivable/payable
|
|
21
|
|
|
54
|
|
|
14
|
|
|
34
|
|
Net cash (used in)
provided by operating activities
|
|
(52)
|
|
|
169
|
|
|
1,334
|
|
|
992
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Acquisitions of
businesses, net of cash acquired
|
|
(45)
|
|
|
—
|
|
|
(2,655)
|
|
|
(94)
|
|
Payments for property,
equipment and software
|
|
(63)
|
|
|
(54)
|
|
|
(183)
|
|
|
(121)
|
|
Proceeds from
disposition of businesses
|
|
—
|
|
|
(5)
|
|
|
—
|
|
|
178
|
|
Net proceeds from sale
of assets
|
|
2
|
|
|
—
|
|
|
12
|
|
|
96
|
|
Other
|
|
5
|
|
|
5
|
|
|
11
|
|
|
6
|
|
Net cash (used in)
provided by investing activities
|
|
(101)
|
|
|
(54)
|
|
|
(2,815)
|
|
|
65
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from debt
issuance
|
|
1,000
|
|
|
—
|
|
|
7,225
|
|
|
—
|
|
Payments of long-term
debt
|
|
(776)
|
|
|
(30)
|
|
|
(5,456)
|
|
|
(80)
|
|
Payments for debt
issuance and modification costs
|
|
(12)
|
|
|
—
|
|
|
(51)
|
|
|
—
|
|
Dividend
payments
|
|
(48)
|
|
|
(97)
|
|
|
(196)
|
|
|
(198)
|
|
Repurchases of stock
and other
|
|
(70)
|
|
|
(28)
|
|
|
(105)
|
|
|
(458)
|
|
Proceeds from
issuances of stock
|
|
9
|
|
|
11
|
|
|
35
|
|
|
27
|
|
Other
|
|
(5)
|
|
|
—
|
|
|
(1)
|
|
|
—
|
|
Net cash provided by
(used in) financing activities
|
|
98
|
|
|
(144)
|
|
|
1,451
|
|
|
(709)
|
|
Net (decrease)
increase in cash, cash equivalents and restricted cash
|
|
(55)
|
|
|
(29)
|
|
|
(30)
|
|
|
348
|
|
Cash, cash
equivalents and restricted cash at beginning of year
|
|
742
|
|
|
746
|
|
|
717
|
|
|
369
|
|
Cash, cash
equivalents and restricted cash at end of year
|
|
$
|
687
|
|
|
$
|
717
|
|
|
$
|
687
|
|
|
$
|
717
|
|
LEIDOS HOLDINGS,
INC.
|
UNAUDITED SEGMENT
OPERATING RESULTS
|
(in
millions)
|
|
Effective the
beginning of fiscal 2020, certain contracts were reassigned from
the Civil reportable segment to the Defense Solutions reportable
segment to better align operations within the reportable segments
to the customers they serve. Prior year segments results have been
recast to reflect this change. Additionally, the results of
Dynetics and the SD&A Businesses were included within the
Defense Solutions and Civil reportable segments,
respectively.
|
|
The segment
information for the periods presented was as follows:
|
|
|
|
Three
Months Ended
|
|
Twelve Months
Ended
|
|
|
January 1,
2021
|
|
January 3,
2020
|
|
Dollar
change
|
|
Percent
change
|
|
January 1,
2021
|
|
January 3,
2020
|
|
Dollar
change
|
|
Percent
change
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defense
Solutions
|
|
$
|
1,928
|
|
|
$
|
1,655
|
|
|
$
|
273
|
|
|
16.5
|
%
|
|
$
|
7,341
|
|
|
$
|
6,300
|
|
|
$
|
1,041
|
|
|
16.5
|
%
|
Civil
|
|
811
|
|
|
773
|
|
|
38
|
|
|
4.9
|
%
|
|
2,994
|
|
|
2,796
|
|
|
198
|
|
|
7.1
|
%
|
Health
|
|
513
|
|
|
526
|
|
|
(13)
|
|
|
(2.5)
|
%
|
|
1,962
|
|
|
1,998
|
|
|
(36)
|
|
|
(1.8)
|
%
|
Total
|
|
$
|
3,252
|
|
|
$
|
2,954
|
|
|
$
|
298
|
|
|
10.1
|
%
|
|
$
|
12,297
|
|
|
$
|
11,094
|
|
|
$
|
1,203
|
|
|
10.8
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defense
Solutions
|
|
$
|
147
|
|
|
$
|
147
|
|
|
$
|
—
|
|
|
—
|
%
|
|
$
|
506
|
|
|
$
|
471
|
|
|
$
|
35
|
|
|
7.4
|
%
|
Civil
|
|
89
|
|
|
74
|
|
|
15
|
|
|
20.3
|
%
|
|
280
|
|
|
231
|
|
|
49
|
|
|
21.2
|
%
|
Health
|
|
86
|
|
|
73
|
|
|
13
|
|
|
17.8
|
%
|
|
235
|
|
|
242
|
|
|
(7)
|
|
|
(2.9)
|
%
|
Corporate
|
|
(23)
|
|
|
(33)
|
|
|
10
|
|
|
(30.3)
|
%
|
|
(23)
|
|
|
(32)
|
|
|
9
|
|
|
(28.1)
|
%
|
Total
|
|
$
|
299
|
|
|
$
|
261
|
|
|
$
|
38
|
|
|
14.6
|
%
|
|
$
|
998
|
|
|
$
|
912
|
|
|
$
|
86
|
|
|
9.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income
margin:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Defense
Solutions
|
|
7.6
|
%
|
|
8.9
|
%
|
|
|
|
|
|
6.9
|
%
|
|
7.5
|
%
|
|
|
|
|
Civil
|
|
11.0
|
%
|
|
9.6
|
%
|
|
|
|
|
|
9.4
|
%
|
|
8.3
|
%
|
|
|
|
|
Health
|
|
16.8
|
%
|
|
13.9
|
%
|
|
|
|
|
|
12.0
|
%
|
|
12.1
|
%
|
|
|
|
|
Total
|
|
9.2
|
%
|
|
8.8
|
%
|
|
|
|
|
|
8.1
|
%
|
|
8.2
|
%
|
|
|
|
|
LEIDOS HOLDINGS, INC.
UNAUDITED BACKLOG BY REPORTABLE SEGMENT
(in millions)
Backlog represents the estimated amount of future revenues to be
recognized under negotiated contracts. Backlog value is based on
management's estimates about volume of services, availability of
customer funding and other factors, and excludes contracts that are
under protest. Our estimate of backlog comprises both funded and
negotiated unfunded backlog. Backlog estimates are subject to
change and may be affected by several factors including
modifications of contracts, non-exercise of options, foreign
currency movements, etc.
Funded backlog for contracts with the U.S. government represents
the value on contracts for which funding is appropriated less
revenues previously recognized on these contracts. Funded backlog
for contracts with non-U.S. government entities and commercial
customers represents the estimated value on contracts, which may
cover multiple future years, under which Leidos is obligated to
perform, less revenues previously recognized on the contracts.
Negotiated unfunded backlog represents estimated amounts of
revenue to be earned in the future from contracts for which funding
has not been appropriated and unexercised priced contract options.
Negotiated unfunded backlog does not include unexercised option
periods and future potential task orders expected to be awarded
under indefinite delivery/indefinite quantity ("IDIQ"), General
Services Administration Schedule or other master agreement contract
vehicles, with the exception of certain IDIQ contracts where task
orders are not competitively awarded or separately priced but
instead are used as a funding mechanism, and where there is a basis
for estimating future revenues and funding on future anticipated
task orders.
The estimated value of backlog as of the dates presented was as
follows:
|
|
January 1,
2021
|
|
January 3,
2020
|
Defense
Solutions(1):
|
|
|
|
|
Funded
backlog
|
|
$
|
3,710
|
|
|
$
|
3,063
|
|
Negotiated unfunded
backlog
|
|
14,721
|
|
|
11,974
|
|
Total Defense
Solutions backlog
|
|
$
|
18,431
|
|
|
$
|
15,037
|
|
Civil(1):
|
|
|
|
|
Funded
backlog
|
|
$
|
1,398
|
|
|
$
|
1,267
|
|
Negotiated unfunded
backlog
|
|
7,051
|
|
|
2,978
|
|
Total Civil
backlog
|
|
$
|
8,449
|
|
|
$
|
4,245
|
|
Health:
|
|
|
|
|
Funded
backlog
|
|
$
|
1,486
|
|
|
$
|
1,083
|
|
Negotiated unfunded
backlog
|
|
3,546
|
|
|
3,725
|
|
Total Health
backlog
|
|
$
|
5,032
|
|
|
$
|
4,808
|
|
Total:
|
|
|
|
|
Funded
backlog
|
|
$
|
6,594
|
|
|
$
|
5,413
|
|
Negotiated unfunded
backlog
|
|
25,318
|
|
|
18,677
|
|
Total
backlog
|
|
$
|
31,912
|
|
|
$
|
24,090
|
|
(1) Prior year amounts have been recast for the
contracts that were reassigned from the Civil reportable segment to
the Defense Solutions reportable segment.
The change in backlog for the Defense Solutions and Civil
reportable segments reflect $1,632
million and $574 million,
respectively, of backlog acquired as a result of the acquisitions
of Dynetics and the SD&A Businesses, respectively.
LEIDOS HOLDINGS, INC.
UNAUDITED NON-GAAP FINANCIAL MEASURES
(in millions, except per share amounts)
The Company uses and refers to non-GAAP operating income,
non-GAAP operating margin, adjusted EBITDA, adjusted EBITDA margin
and non-GAAP diluted EPS, which are not measures of financial
performance under generally accepted accounting principles in the
U.S. and, accordingly, these measures should not be considered in
isolation or as a substitute for the comparable GAAP measures and
should be read in conjunction with the Company's consolidated
financial statements prepared in accordance with GAAP.
Management believes that these non-GAAP measures provide another
measure of the Company's results of operations and financial
condition, including its ability to comply with financial
covenants. These non-GAAP measures are frequently used by financial
analysts covering Leidos and its peers. The Company's computation
of its non-GAAP measures may not be comparable to similarly titled
measures reported by other companies, thus limiting their use for
comparability.
Non-GAAP operating income is computed by excluding
the following items from net income: (i) non-operating expense,
net; (ii) income tax expense; and (iii) the following discrete
items and the related tax impacts:
- Acquisition, integration and restructuring costs - Represents
acquisition, integration, lease termination and severance costs
related to the Company's acquisitions.
- Amortization of acquired intangible assets - Represents the
amortization of the fair value of the acquired intangible
assets.
- Amortization of equity method investment - Represents the
amortization of the fair value of the acquired equity method
investment.
- Acquisition related financing costs - Represents the
amortization of the debt financing commitments in connection with
the Company's acquisitions of Dynetics and the SD&A
Businesses.
- Loss on debt modification - Represents the write-off of debt
discount and debt issuance costs as a result of debt
modifications.
- Gain on sale of business - Represents the net gain on sale of
businesses.
- Asset impairment charges - Represents impairments of long-lived
tangible assets.
- Other tax adjustments - Represents discrete tax items.
Non-GAAP operating margin is computed by dividing
non-GAAP operating income by revenue.
Adjusted EBITDA is computed by excluding the following
items from income before income taxes: (i) discrete items as
identified above; (ii) interest expense; (iii) interest income;
(iv) depreciation expense; and (v) amortization of intangibles.
Adjusted EBITDA margin is computed by dividing adjusted
EBITDA by revenue.
Non-GAAP diluted EPS is computed by dividing net
income, adjusted for the discrete items as identified above and the
related tax impacts, by the diluted weighted average number of
common shares outstanding.
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP FINANCIAL MEASURES [CONTINUED]
(in millions, except per share amounts)
|
|
The following tables
present the reconciliation of the non-GAAP measures identified
above to the most directly comparable GAAP measures:
|
|
|
|
Three Months Ended
January 1, 2021
|
|
|
As
reported
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Asset
impairment
charges
|
|
Non-GAAP
results
|
Operating
income
|
|
$
|
299
|
|
|
$
|
6
|
|
|
$
|
43
|
|
|
1
|
|
|
$
|
349
|
|
Non-operating expense,
net
|
|
(54)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(54)
|
|
Income before income
taxes
|
|
245
|
|
|
6
|
|
|
43
|
|
|
1
|
|
|
295
|
|
Income tax
expense(1)
|
|
(48)
|
|
|
(2)
|
|
|
(11)
|
|
|
—
|
|
|
(61)
|
|
Net income attributable
to Leidos common stockholders
|
|
$
|
197
|
|
|
$
|
4
|
|
|
$
|
32
|
|
|
$
|
1
|
|
|
$
|
234
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable to Leidos common stockholders
|
|
$
|
1.37
|
|
|
$
|
0.03
|
|
|
$
|
0.22
|
|
|
$
|
0.01
|
|
|
$
|
1.63
|
|
Diluted
shares
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
(1) Calculation uses an estimated
statutory tax rate on non-GAAP tax deductible
adjustments.
|
|
|
|
Three Months Ended
January 1, 2021
|
|
|
As
reported
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Asset
impairment
charges
|
|
Non-GAAP
results
|
Income before income
taxes
|
|
$
|
245
|
|
|
$
|
6
|
|
|
$
|
43
|
|
|
$
|
1
|
|
|
$
|
295
|
|
Depreciation
expense
|
|
24
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
24
|
|
Amortization of
intangibles
|
|
44
|
|
|
—
|
|
|
(43)
|
|
|
—
|
|
|
1
|
|
Interest expense,
net
|
|
46
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
46
|
|
EBITDA
|
|
$
|
359
|
|
|
$
|
6
|
|
|
$
|
—
|
|
|
$
|
1
|
|
|
$
|
366
|
|
EBITDA
margin
|
|
11.0
|
%
|
|
|
|
|
|
|
|
11.3
|
%
|
LEIDOS HOLDINGS,
INC.
|
UNAUDITED NON-GAAP
FINANCIAL MEASURES [CONTINUED]
|
(in millions,
except per share amounts)
|
|
|
|
Three Months Ended
January 3, 2020
|
|
|
As
reported
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Amortization
of equity
method
investment
|
|
Acquisition
related
financing
costs
|
|
Gain on sale of
business
|
|
Other tax
adjustments
|
|
Non-GAAP
results
|
Operating
income
|
|
$
|
261
|
|
|
$
|
2
|
|
|
$
|
43
|
|
|
$
|
3
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
309
|
|
Non-operating
expense,
net
|
|
(34)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(1)
|
|
|
—
|
|
|
(33)
|
|
Income before
income
taxes
|
|
227
|
|
|
2
|
|
|
43
|
|
|
3
|
|
|
2
|
|
|
(1)
|
|
|
—
|
|
|
276
|
|
Income tax
expense(1)
|
|
(46)
|
|
|
—
|
|
|
(11)
|
|
|
(1)
|
|
|
—
|
|
|
—
|
|
|
(1)
|
|
|
(59)
|
|
Net income
attributable
to Leidos common
stockholders
|
|
$
|
181
|
|
|
$
|
2
|
|
|
$
|
32
|
|
|
$
|
2
|
|
|
$
|
2
|
|
|
$
|
(1)
|
|
|
$
|
(1)
|
|
|
$
|
217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable
to Leidos common
stockholders
|
|
$
|
1.26
|
|
|
$
|
0.01
|
|
|
$
|
0.22
|
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1.51
|
|
Diluted
shares
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
(1) Calculation uses an estimated
statutory tax rate on non-GAAP tax deductible
adjustments.
|
|
|
|
Three Months Ended
January 3, 2020
|
|
|
As
reported
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Amortization
of equity
method
investment
|
|
Acquisition
related
financing
costs
|
|
Gain on sale
of business
|
|
Non-GAAP
results
|
Income before income
taxes
|
|
$
|
227
|
|
|
$
|
2
|
|
|
$
|
43
|
|
|
$
|
3
|
|
|
$
|
2
|
|
|
$
|
(1)
|
|
|
$
|
276
|
|
Depreciation
expense
|
|
16
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
Amortization of
intangibles
|
|
44
|
|
|
—
|
|
|
(43)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Amortization of
equity
method investment
|
|
3
|
|
|
—
|
|
|
—
|
|
|
(3)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Interest expense,
net
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
32
|
|
EBITDA
|
|
$
|
324
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(1)
|
|
|
$
|
325
|
|
EBITDA
margin
|
|
11.0
|
%
|
|
|
|
|
|
|
|
|
|
|
|
11.0
|
%
|
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP FINANCIAL MEASURES [CONTINUED]
(in millions, except per share amounts)
|
|
|
|
Year Ended January
1, 2021
|
|
|
As
reported
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Amortization
of equity
method
investment
|
|
Acquisition
related
financing
costs
|
|
Loss on debt
modification
|
|
Asset
impairment
charges
|
|
Non-GAAP
results
|
Operating
income
|
|
$
|
998
|
|
|
$
|
39
|
|
|
$
|
195
|
|
|
$
|
2
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12
|
|
|
$
|
1,246
|
|
Non-operating expense,
net
|
|
(217)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
31
|
|
|
—
|
|
|
(181)
|
|
Income before income
taxes
|
|
781
|
|
|
39
|
|
|
195
|
|
|
2
|
|
|
5
|
|
|
31
|
|
|
12
|
|
|
1,065
|
|
Income tax
expense(1)
|
|
(152)
|
|
|
(10)
|
|
|
(49)
|
|
|
(1)
|
|
|
(1)
|
|
|
(8)
|
|
|
(3)
|
|
|
(224)
|
|
Net income
|
|
629
|
|
|
29
|
|
|
146
|
|
|
1
|
|
|
4
|
|
|
23
|
|
|
9
|
|
|
841
|
|
Less: net
income
attributable to non-
controlling interest
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
Net income
attributable
to Leidos common
stockholders
|
|
$
|
628
|
|
|
$
|
29
|
|
|
$
|
146
|
|
|
$
|
1
|
|
|
$
|
4
|
|
|
$
|
23
|
|
|
$
|
9
|
|
|
$
|
840
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable
to Leidos common
stockholders
|
|
$
|
4.36
|
|
|
$
|
0.20
|
|
|
$
|
1.01
|
|
|
$
|
0.01
|
|
|
$
|
0.03
|
|
|
$
|
0.16
|
|
|
$
|
0.06
|
|
|
$
|
5.83
|
|
Diluted
shares
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
144
|
|
|
(1) Calculation uses an estimated
statutory tax rate on non-GAAP tax deductible
adjustments.
|
|
|
|
Year Ended January
1, 2021
|
|
|
As
reported
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization of
acquired intangibles
|
|
Amortization of
equity method investment
|
|
Acquisition related
financing costs
|
|
Loss on debt
modification
|
|
Asset impairment
charges
|
|
Non-GAAP
results
|
Income before income
taxes
|
|
$
|
781
|
|
|
$
|
39
|
|
|
$
|
195
|
|
|
$
|
2
|
|
|
$
|
5
|
|
|
$
|
31
|
|
|
$
|
12
|
|
|
$
|
1,065
|
|
Depreciation
expense
|
|
84
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
84
|
|
Amortization of
intangibles
|
|
198
|
|
|
—
|
|
|
(195)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Amortization of
equity
method investment
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Interest expense,
net
|
|
179
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(5)
|
|
|
—
|
|
|
—
|
|
|
174
|
|
EBITDA
|
|
$
|
1,244
|
|
|
$
|
39
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
31
|
|
|
$
|
12
|
|
|
$
|
1,326
|
|
EBITDA
margin
|
|
10.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10.8
|
%
|
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP FINANCIAL MEASURES [CONTINUED]
(in millions, except per share amounts)
|
|
|
|
Year Ended January 3,
2020
|
|
|
As
reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Amortization
of equity
method
investment
|
|
Acquisition
related
financing
costs
|
|
Gain on sale
of business
|
|
Other tax
adjustments
|
|
Non-GAAP
results
|
Operating
income
|
|
$
|
912
|
|
|
$
|
5
|
|
|
$
|
171
|
|
|
$
|
11
|
|
|
$
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
1,099
|
|
Non-operating expense,
net
|
|
(46)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
|
(88)
|
|
|
—
|
|
|
(132)
|
|
Income before income
taxes
|
|
866
|
|
|
5
|
|
|
171
|
|
|
11
|
|
|
2
|
|
|
(88)
|
|
|
—
|
|
|
967
|
|
Income tax (expense)
benefit(1)
|
|
(196)
|
|
|
(1)
|
|
|
(43)
|
|
|
(3)
|
|
|
—
|
|
|
22
|
|
|
7
|
|
|
(214)
|
|
Net income
|
|
670
|
|
|
4
|
|
|
128
|
|
|
8
|
|
|
2
|
|
|
(66)
|
|
|
7
|
|
|
753
|
|
Less: net
income
attributable to non-
controlling interest
|
|
3
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
3
|
|
Net income
attributable
to Leidos common
stockholders
|
|
$
|
667
|
|
|
$
|
4
|
|
|
$
|
128
|
|
|
$
|
8
|
|
|
$
|
2
|
|
|
$
|
(66)
|
|
|
$
|
7
|
|
|
$
|
750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable
to Leidos common
stockholders
|
|
$
|
4.60
|
|
|
$
|
0.03
|
|
|
$
|
0.88
|
|
|
$
|
0.06
|
|
|
$
|
0.01
|
|
|
$
|
(0.46)
|
|
|
$
|
0.05
|
|
|
$
|
5.17
|
|
Diluted
shares
|
|
145
|
|
|
145
|
|
|
145
|
|
|
145
|
|
|
145
|
|
|
145
|
|
|
145
|
|
|
145
|
|
|
(1) Calculation uses an estimated
statutory tax rate on non-GAAP tax deductible
adjustments.
|
|
|
|
Year Ended January 3,
2020
|
|
|
As
reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Amortization
of equity
method
investment
|
|
Acquisition
related
financing
costs
|
|
Gain on sale
of business
|
|
Non-GAAP
results
|
Income before income
taxes
|
|
$
|
866
|
|
|
$
|
5
|
|
|
$
|
171
|
|
|
$
|
11
|
|
|
$
|
2
|
|
|
$
|
(88)
|
|
|
$
|
967
|
|
Depreciation
expense
|
|
61
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
61
|
|
Amortization of
intangibles
|
|
173
|
|
|
—
|
|
|
(171)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2
|
|
Amortization of equity
method
investment
|
|
11
|
|
|
—
|
|
|
—
|
|
|
(11)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Interest expense,
net
|
|
133
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2)
|
|
|
—
|
|
|
131
|
|
EBITDA
|
|
$
|
1,244
|
|
|
$
|
5
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(88)
|
|
|
$
|
1,161
|
|
EBITDA
margin
|
|
11.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
10.5
|
%
|
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP FINANCIAL MEASURES [CONTINUED]
(in millions, except per share amounts)
|
|
The following tables
present the reconciliation of the non-GAAP operating income by
reportable segment and Corporate:
|
|
|
|
Three Months Ended
January 1, 2021
|
|
|
|
|
Operating
income (loss)
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Asset
impairment
charges
|
|
Non-GAAP
operating
income (loss)
|
|
Non-GAAP
operating
margin
|
Defense
Solutions
|
|
$
|
147
|
|
|
$
|
1
|
|
|
$
|
24
|
|
|
$
|
—
|
|
|
$
|
172
|
|
|
8.9
|
%
|
Civil
|
|
89
|
|
|
—
|
|
|
10
|
|
|
1
|
|
|
100
|
|
|
12.3
|
%
|
Health
|
|
86
|
|
|
—
|
|
|
9
|
|
|
—
|
|
|
95
|
|
|
18.5
|
%
|
Corporate
|
|
(23)
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(18)
|
|
|
NM
|
|
Total
|
|
$
|
299
|
|
|
$
|
6
|
|
|
$
|
43
|
|
|
$
|
1
|
|
|
$
|
349
|
|
|
10.7
|
%
|
|
|
|
|
Three Months Ended
January 3, 2020
|
|
|
|
|
Operating
income (loss)
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Amortization
of equity
method
investment
|
|
Non-GAAP
operating
income (loss)
|
|
Non-GAAP
operating
Margin
|
Defense
Solutions(1)
|
|
$
|
147
|
|
|
$
|
—
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
163
|
|
|
9.8
|
%
|
Civil(1)
|
|
74
|
|
|
—
|
|
|
16
|
|
|
3
|
|
|
93
|
|
|
12.0
|
%
|
Health
|
|
73
|
|
|
—
|
|
|
11
|
|
|
—
|
|
|
84
|
|
|
16.0
|
%
|
Corporate
|
|
(33)
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
(31)
|
|
|
NM
|
|
Total
|
|
$
|
261
|
|
|
$
|
2
|
|
|
$
|
43
|
|
|
$
|
3
|
|
|
$
|
309
|
|
|
10.5
|
%
|
|
|
|
|
Year Ended January
1, 2021
|
|
|
|
|
Operating
income (loss)
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Amortization
of equity
method
investment
|
|
Asset
impairment
charges
|
|
Non-GAAP
operating
income (loss)
|
|
Non-GAAP
operating
margin
|
Defense
Solutions
|
|
$
|
506
|
|
|
$
|
4
|
|
|
$
|
92
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
602
|
|
|
8.2
|
%
|
Civil
|
|
280
|
|
|
1
|
|
|
66
|
|
|
2
|
|
|
1
|
|
|
350
|
|
|
11.7
|
%
|
Health
|
|
235
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
11
|
|
|
283
|
|
|
14.4
|
%
|
Corporate
|
|
(23)
|
|
|
34
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
NM
|
|
Total
|
|
$
|
998
|
|
|
$
|
39
|
|
|
$
|
195
|
|
|
$
|
2
|
|
|
$
|
12
|
|
|
$
|
1,246
|
|
|
10.1
|
%
|
|
|
|
|
Year Ended January 3,
2020
|
|
|
|
|
Operating
income (loss)
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Amortization
of equity
method
investment
|
|
Non-GAAP
operating
income (loss)
|
|
Non-GAAP
operating
margin
|
Defense
Solutions(1)
|
|
$
|
471
|
|
|
$
|
—
|
|
|
$
|
64
|
|
|
$
|
—
|
|
|
$
|
535
|
|
|
8.5
|
%
|
Civil(1)
|
|
231
|
|
|
—
|
|
|
63
|
|
|
11
|
|
|
305
|
|
|
10.9
|
%
|
Health
|
|
242
|
|
|
—
|
|
|
44
|
|
|
—
|
|
|
286
|
|
|
14.3
|
%
|
Corporate
|
|
(32)
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
(27)
|
|
|
NM
|
|
Total
|
|
$
|
912
|
|
|
$
|
5
|
|
|
$
|
171
|
|
|
$
|
11
|
|
|
$
|
1,099
|
|
|
9.9
|
%
|
|
NM - Not
Meaningful
|
(1) Prior year amounts have been
recast for the contracts that were reassigned from the Civil
reportable segment to the Defense Solutions reportable
segment.
|
View original
content:http://www.prnewswire.com/news-releases/leidos-holdings-inc-reports-fourth-quarter-and-fiscal-year-2020-results-301233111.html
SOURCE Leidos