- Revenues of $3.6 billion,
up 4% year-over-year
- Net Income of $172 million;
Adjusted EBITDA of $366
million
- Diluted Earnings per Share of $1.24, or $1.59 on
a non-GAAP basis
- Cash Flows from Operations of $40
million; Free Cash Flow of $19
million
- Net Bookings of $2.2
billion (book-to-bill ratio of 0.6); backlog of $34.7 billion up 4% year-over-year
RESTON,
Va., Aug. 2, 2022 /PRNewswire/ -- Leidos
Holdings, Inc. (NYSE: LDOS), a FORTUNE 500® science and
technology leader, today reported financial results for the second
quarter of fiscal year 2022.
Roger Krone, Leidos Chairman and
Chief Executive Officer, commented, "Leidos remains on track for
another year of solid organic growth and core business
profitability. The affirmation of our Defense Enclave Services
contract award by the Government Accountability Office demonstrates
our leadership in digital modernization across the federal
government, with strong demand for our technology solutions and
services across our diversified business portfolio. We continue to
execute on our disciplined and balanced capital allocation strategy
to drive shareholder value. And, we are proving our ability to
compete successfully for talent with another quarter of robust
hiring."
Summary Operating Results
|
|
Three Months
Ended
|
(in millions, except
margin and per share amounts)
|
|
July 1,
2022
|
|
July 2, 2021
|
Revenues
|
|
$
3,597
|
|
$
3,448
|
Net income
|
|
$
172
|
|
$
170
|
Net income
margin
|
|
4.8 %
|
|
4.9 %
|
Diluted earnings per
share (EPS)
|
|
$
1.24
|
|
$
1.18
|
|
|
|
|
|
Non-GAAP
Measures*:
|
|
|
|
|
Adjusted
EBITDA
|
|
$
366
|
|
$
359
|
Adjusted EBITDA
margin
|
|
10.2 %
|
|
10.4 %
|
Non-GAAP diluted
EPS
|
|
$
1.59
|
|
$
1.52
|
|
* Non-GAAP financial
measures should be considered in addition to, but not as a
substitute for, the information provided in accordance with GAAP.
Management believes that these non-GAAP measures provide another
measure of Leidos' results of operations and financial condition,
including its ability to comply with financial covenants.
See Non-GAAP Financial Measures at the end of this press
release for more information and a reconciliation of our selected
reported results to these non-GAAP measures.
|
Revenues for the quarter were $3.60
billion, up 4% in total and organically compared to the
second quarter of fiscal year 2021. Revenues grew across all
reportable segments; the largest contributors were continued growth
of the Navy Next Generation Enterprise Network Recompete (NGEN-R)
Service Management, Integration and Transport (SMIT) contract and
increased deployments on the Defense Healthcare Management System
Modernization (DHMSM) program.
Net income was $172 million and
diluted EPS was $1.24. Net income and
diluted EPS were up 1% and 5% year-over-year, respectively, and net
income margin decreased from 4.9% to 4.8% year-over-year. Net
interest expense increased to $50
million from $46 million in
the second quarter of fiscal year 2021. In addition, the weighted
average diluted share count for the quarter was 138 million
compared to 143 million in the prior year quarter, which
benefited from the retirement of 0.3 million shares as part of the
final settlement of the Accelerated Share Repurchase (ASR)
agreement implemented in the first quarter of fiscal year 2022.
Adjusted EBITDA was $366 million
for the second quarter, up 2% year-over-year. Adjusted EBITDA
margin decreased from 10.4% to 10.2% over the same period. Non-GAAP
net income was $220 million for the
second quarter, which was up slightly year-over-year, and non-GAAP
diluted EPS for the quarter was $1.59, which was up 5% compared to the second
quarter of fiscal year 2021.
Cash Flow Summary
In the second quarter of fiscal year 2022, Leidos generated
$40 million of net cash provided by
operating activities, used $8 million
in investing activities and generated $6
million in financing activities. After adjusting for
payments for property, equipment and software, quarterly free cash
flow was $19 million.
In the quarter Leidos entered into a 364-day term loan credit
agreement for a senior unsecured term loan facility in an aggregate
principal amount of $380 million, and the proceeds were used
to repay the $380 million senior unsecured term loan entered
into on May 7, 2021. As of
July 1, 2022, Leidos had $339
million in cash and cash equivalents and $5.2 billion of debt, including $150 million of Commercial Paper Notes
outstanding.
After the close of the quarter, Leidos entered into a definitive
agreement with private equity firm Advent International to acquire
Cobham Aviation Services Australia's Special Mission business. The
acquired business provides Border Force Airborne Surveillance and
Maritime Safety Search and Rescue services to the Australian
Federal Government. The acquisition is subject to customary closing
conditions, including regulatory approvals.
On July 29, 2022, the Leidos Board of Directors declared
that Leidos will pay a cash dividend of $0.36 per share on September 30, 2022 to
stockholders of record at the close of business on
September 15, 2022.
New Business Awards
Net bookings totaled $2.2 billion
in the quarter, representing a book-to-bill ratio of 0.6. As a
result, backlog at the end of the quarter was $34.7 billion, of which $7.5 billion was funded. During the quarter
Leidos received several particularly important awards:
- Defense Information Systems Agency (DISA) Defense Enclave
Services (DES). DISA awarded Leidos a single-award, indefinite
delivery, indefinite quantity (IDIQ) contract with a total
estimated value of $11.5 billion and
a four-year base period of performance followed by three two-year
option periods. Through the DES contract, Leidos will consolidate
enterprise IT services and provide standardized, responsive and
cost-effective solutions for more than 370,000 users spanning 22
Department of Defense (DoD) agencies and field activities with over
500 sites both in the U.S. and abroad. This work will focus on
mission value and user experience, while improving cybersecurity,
network availability and reliability for Fourth Estate
agencies.
- Program Executive Office (PEO) Integrated Warfare Systems
(IWS) Undersea Warfare Combat System and Product Support.
Leidos was awarded a follow-on contract to support the Navy's PEO
IWS Directorate. Under the contract, Leidos will perform a range of
support services, including shipboard modernization, curriculum
development, training conduct, depot support, technical data,
maintenance planning and management. The single award,
cost-plus-fixed-fee contract holds an approximate value of
$291 million and includes a one-year
base period of performance with four additional one-year option
periods.
- Navy Medical Performance Research. Leidos was awarded a
new task order by the Naval Medical Readiness Logistics Command,
Detachment Fort Detrick, to support research to maximize warfighter
performance and survivability in the aviation, underwater and
special warfare environments. Under the contract, Leidos will
support research on the human cognitive and physiological factors
associated with military operations. The research focuses on motion
sickness, aeromedical standards, hypoxia, fatigue assessment,
aviation safety and both neurocognitive and neurophysiological
effects. The contract holds an approximate value of $53 million and includes a one-year base period
of performance with four one-year options and one six-month
option.
- Punta Cana Security Checkpoint Upgrade. Leidos was
selected by the Dominican
Republic's Punta Cana
International Airport to upgrade their security checkpoints.
Punta Cana hosts more than 4
million tourists annually with strong projected growth over the
coming years. The Leidos solution will keep passengers and staff
safe while enhancing operational efficiencies and increasing
passenger throughput. For example, using enhanced screening
techniques, passengers will no longer need to remove electronics
and liquids from carry-on bags. Implementation will be completed in
the first half of 2023.
Forward Guidance
Leidos is maintaining its fiscal year 2022 guidance as
follows:
Measure
|
FY22
Guidance
|
Revenues
(billions)
|
$13.9 -
$14.3
|
Adjusted EBITDA
Margin
|
10.3% -
10.5%
|
Non-GAAP Diluted
EPS
|
$6.10 -
$6.50
|
Cash Flows Provided by
Operating Activities (billions)
|
at or above
$1.0
|
For information regarding adjusted EBITDA margin and non-GAAP
diluted EPS, see the related explanations and reconciliations to
GAAP measures included elsewhere in this release.
Leidos does not provide a reconciliation of forward-looking
adjusted EBITDA margins or non-GAAP diluted EPS to 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, Leidos 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 net
income and diluted EPS being materially less than what may be
implied by projected adjusted EBITDA margins and non-GAAP diluted
EPS.
Conference Call Information
Leidos management will discuss operations and financial results
in an earnings conference call beginning at 8:00 A.M. eastern time on August 2, 2022.
Analysts and institutional investors may participate by dialing +1
(877) 869-3847 (toll-free U.S.) or +1 (201) 689-8261 (international
callers).
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 callers) and
entering conference ID 13731269.
About Leidos
Leidos is a Fortune 500® technology, engineering, and
science solutions and services leader working to solve the world's
toughest challenges in the defense, intelligence, civil and health
markets. Leidos' 44,000 employees support vital missions for
government and commercial customers. Headquartered in Reston, Va., Leidos reported annual revenues
of approximately $13.7 billion for
the fiscal year ended December 31,
2021.
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 our future
growth and financial and operating performance, including 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,
uncertainties in tax due to new tax legislation or other regulatory
developments, the impact of COVID-19 and related actions taken to
prevent its spread, our contract awards, strategy, planned
investments, sustainability goals and our future dividends, share
repurchases, capital expenditures, debt repayments, acquisitions,
dispositions, and cash flow conversion. 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, supply chain impacts,
airline travel levels, our ability to recover costs under
contracts, insurance challenges, uncertainty regarding the efficacy
of vaccines against variants, booster vaccinations, or the lack of
public acceptance of vaccines and low vaccination rates, and laws
and regulations with respect to vaccinations; changes to our
reputation and relationships with government agencies, developments
in the U.S. government defense budget, including budget reductions,
implementation of spending limits or changes in budgetary
priorities; delays in the U.S. government budget process or
approval of raises to the debt ceiling; delays in the U.S.
government contract procurement process or the award of contracts
or our ability to win contracts; delays or loss of contracts as a
result of competitor protests; changes in U.S. government
procurement rules, regulations and practices; changes in interest
rates and inflation, and other market factors out of our control,
including general economic and political conditions; our compliance
with various U.S. government and other government procurement rules
and regulations; governmental reviews, audits and investigations of
Leidos; our reliance on information technology spending by
hospitals/healthcare organizations, infrastructure investments by
industrial and natural resources organizations and other customer
investments related to our business; our ability to attract, train
and retain skilled employees, including our management team, and to
obtain security clearances for our employees; the mix of our
contracts and our ability to accurately estimate costs associated
with our firm-fixed-price and other contracts as well as our
ability to realize as revenues the full amount of our backlog;
cybersecurity, data security or other security threats, systems
failures or other disruptions of our business; resolution of legal
and other disputes with our customers and others or legal or
regulatory compliance issues; our ability to effectively acquire
businesses and make investments and any related contingencies or
liabilities to which we may become subject; 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, including complex engineering
projects; our ability to obtain necessary components and materials
to perform our contracts, including semiconductors and related
equipment, on reasonable terms or at all; the failure of our
inspection or detection systems to detect threats; changes in
business conditions that could impact business investments and/or
recorded goodwill or the value of other long-lived assets; the
adequacy of our insurance programs designed to protect us from
significant product or other liability claims; our ability to
manage risks associated with our international business; our
ability to declare future dividends or repurchase our stock based
on our earnings, financial condition, capital requirements and
other factors, including compliance with applicable laws and
contractual agreements; changes in accounting, U.S. or foreign tax,
export or other laws, regulations, and policies and their
interpretation or application; 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 certain forward-looking statements with
respect to Leidos' proposed acquisition of Cobham Aviation Services
Australia, including benefits of the transaction, the anticipated
timing of the transaction and the products and markets of each
company. Many factors could cause actual future events to differ
materially from the forward-looking statements in this release,
including but not limited to: (i) the risk that the transaction may
not be completed in a timely manner or at all, (ii) the failure to
satisfy the conditions to the consummation of the transaction,
including the receipt of certain governmental and regulatory
approvals, (iii) the occurrence of any event, change or other
circumstance that could give rise to the termination of the merger
agreement, (iv) the effect of the announcement or pendency of the
transaction on Cobham Aviation Services Australia's business
relationships, operating results, and business generally, (v) risks
that the proposed transaction disrupts current plans and operations
of Leidos or Cobham Aviation Services Australia and potential
difficulties in Cobham Aviation Services Australia's employee
retention as a result of the transaction, (vi) risks related to
diverting management's attention from Cobham Aviation Services
Australia ongoing business operations, (vii) the outcome of any
legal proceedings that may be instituted against Leidos or against
Cobham Aviation Services Australia related to the merger agreement
or the transaction, (viii) the ability of Leidos to successfully
integrate Cobham Aviation Services Australia's operations, product
lines, and technology, and (ix) the ability of Leidos to implement
its plans, forecasts, and other expectations with respect to Cobham
Aviation Services Australia's business after the completion of the
proposed acquisition and realize additional opportunities for
growth and innovation. 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 August 2, 2022.
Leidos 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 Leidos'
expectations. Leidos 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:
|
Stuart Davis
|
|
|
|
|
Melissa Lee
Dueñas
|
571.526.6124
|
|
|
|
|
571.526.6850
|
ir@leidos.com
|
|
|
|
|
Duenasml@leidos.com
|
LEIDOS HOLDINGS,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF INCOME
(in millions, except
per share amounts)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
July 1,
2022
|
|
July 2,
2021
|
|
July 1,
2022
|
|
July 2,
2021
|
Revenues
|
|
$
3,597
|
|
$
3,448
|
|
$
7,091
|
|
$
6,763
|
Cost of
revenues
|
|
3,059
|
|
2,950
|
|
6,041
|
|
5,798
|
Selling, general and
administrative expenses
|
|
260
|
|
224
|
|
494
|
|
392
|
Bad debt expense and
recoveries
|
|
2
|
|
(1)
|
|
4
|
|
(10)
|
Acquisition,
integration and restructuring costs
|
|
5
|
|
10
|
|
8
|
|
15
|
Asset impairment
charges
|
|
3
|
|
—
|
|
3
|
|
—
|
Equity earnings of
non-consolidated subsidiaries
|
|
(3)
|
|
(4)
|
|
(1)
|
|
(9)
|
Operating
income
|
|
271
|
|
269
|
|
542
|
|
577
|
Non-operating
expense:
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
(50)
|
|
(46)
|
|
(98)
|
|
(91)
|
Other income
(expense), net
|
|
4
|
|
—
|
|
3
|
|
(1)
|
Income before income
taxes
|
|
225
|
|
223
|
|
447
|
|
485
|
Income tax
expense
|
|
(53)
|
|
(53)
|
|
(98)
|
|
(110)
|
Net income
|
|
172
|
|
170
|
|
349
|
|
375
|
Less: net income
attributable to non-controlling interest
|
|
1
|
|
1
|
|
3
|
|
1
|
Net income attributable
to Leidos common stockholders
|
|
$
171
|
|
$
169
|
|
$
346
|
|
$
374
|
|
|
|
|
|
|
|
|
|
Earnings per
share:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
1.25
|
|
$
1.20
|
|
$
2.51
|
|
$
2.65
|
Diluted
|
|
1.24
|
|
1.18
|
|
2.49
|
|
2.62
|
|
|
|
|
|
|
|
|
|
Weighted average number
of common shares outstanding:
|
|
|
|
|
|
|
|
|
Basic
|
|
137
|
|
141
|
|
138
|
|
141
|
Diluted
|
|
138
|
|
143
|
|
139
|
|
143
|
|
|
|
|
|
|
|
|
|
Cash dividends declared
per share
|
|
$
0.36
|
|
$
0.34
|
|
$
0.72
|
|
$
0.68
|
LEIDOS HOLDINGS,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in
millions)
|
|
|
July 1,
2022
|
|
December 31,
2021
|
Assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
339
|
|
$
727
|
Receivables,
net
|
|
2,423
|
|
2,189
|
Inventory,
net
|
|
286
|
|
274
|
Other current
assets
|
|
478
|
|
429
|
Total current
assets
|
|
3,526
|
|
3,619
|
Property, plant and
equipment, net
|
|
669
|
|
670
|
Intangible assets,
net
|
|
1,038
|
|
1,177
|
Goodwill
|
|
6,673
|
|
6,744
|
Operating lease
right-of-use assets, net
|
|
614
|
|
612
|
Other long-term
assets
|
|
367
|
|
439
|
Total assets
|
|
$
12,887
|
|
$ 13,261
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
2,052
|
|
$
2,141
|
Accrued payroll and
employee benefits
|
|
701
|
|
605
|
Short-term debt and
current portion of long-term debt
|
|
1,153
|
|
483
|
Total current
liabilities
|
|
3,906
|
|
3,229
|
Long-term debt, net of
current portion
|
|
4,023
|
|
4,593
|
Operating lease
liabilities
|
|
614
|
|
589
|
Deferred tax
liabilities
|
|
89
|
|
239
|
Other long-term
liabilities
|
|
198
|
|
267
|
Total
liabilities
|
|
8,830
|
|
8,917
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock, $0.0001
par value, 500 million shares authorized, 137 million and
140 million shares issued and outstanding at July 1,
2022, and December 31, 2021, respectively
|
|
—
|
|
—
|
Additional paid-in
capital
|
|
1,955
|
|
2,423
|
Retained
earnings
|
|
2,128
|
|
1,880
|
Accumulated other
comprehensive loss
|
|
(79)
|
|
(12)
|
Total Leidos
stockholders' equity
|
|
4,004
|
|
4,291
|
Non-controlling
interest
|
|
53
|
|
53
|
Total stockholders'
equity
|
|
4,057
|
|
4,344
|
Total liabilities and
stockholders' equity
|
|
$
12,887
|
|
$ 13,261
|
LEIDOS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS
(in millions)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
July 1,
2022
|
|
July 2,
2021
|
|
July 1,
2022
|
|
July 2,
2021
|
Cash flows from
operations:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
172
|
|
$
170
|
|
$
349
|
|
$
375
|
Adjustments to
reconcile net income to net cash provided by operations:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
83
|
|
80
|
|
168
|
|
157
|
Stock-based
compensation
|
|
19
|
|
17
|
|
35
|
|
32
|
Deferred income
taxes
|
|
(75)
|
|
3
|
|
(136)
|
|
3
|
Other
|
|
3
|
|
(3)
|
|
7
|
|
(11)
|
Change in assets and
liabilities, net of effects of acquisitions and
dispositions:
|
|
|
|
|
|
|
|
|
Receivables
|
|
(6)
|
|
(79)
|
|
(238)
|
|
(89)
|
Other current assets
and other long-term assets
|
|
101
|
|
86
|
|
73
|
|
91
|
Accounts payable and
accrued liabilities and other long-term liabilities
|
|
(211)
|
|
(199)
|
|
(271)
|
|
(347)
|
Accrued payroll and
employee benefits
|
|
(23)
|
|
(4)
|
|
101
|
|
46
|
Income taxes
receivable/payable
|
|
(23)
|
|
(54)
|
|
45
|
|
(1)
|
Net cash provided by
operating activities
|
|
40
|
|
17
|
|
133
|
|
256
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Acquisition of
businesses, net of cash acquired
|
|
—
|
|
(375)
|
|
(2)
|
|
(593)
|
Divestiture of a
business
|
|
6
|
|
—
|
|
15
|
|
—
|
Payments for property,
equipment and software
|
|
(21)
|
|
(21)
|
|
(49)
|
|
(47)
|
Net proceeds from sale
of assets
|
|
6
|
|
—
|
|
6
|
|
—
|
Other
|
|
1
|
|
—
|
|
1
|
|
—
|
Net cash used in
investing activities
|
|
(8)
|
|
(396)
|
|
(29)
|
|
(640)
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from debt
issuance
|
|
380
|
|
380
|
|
380
|
|
380
|
Net proceeds from
commercial paper
|
|
75
|
|
—
|
|
150
|
|
—
|
Repayments of
borrowings
|
|
(407)
|
|
(27)
|
|
(434)
|
|
(53)
|
Dividend
payments
|
|
(49)
|
|
(48)
|
|
(100)
|
|
(98)
|
Repurchases of stock
and other
|
|
(2)
|
|
(3)
|
|
(528)
|
|
(126)
|
Net capital
(distributions to) contributions from non-controlling
interests
|
|
(1)
|
|
1
|
|
(3)
|
|
39
|
Proceeds from issuances
of stock
|
|
10
|
|
10
|
|
22
|
|
23
|
Net cash provided by
(used in) financing activities
|
|
6
|
|
313
|
|
(513)
|
|
165
|
Net increase (decrease)
in cash, cash equivalents and restricted cash
|
|
38
|
|
(66)
|
|
(409)
|
|
(219)
|
Cash, cash equivalents
and restricted cash at beginning of period
|
|
428
|
|
534
|
|
875
|
|
687
|
Cash, cash equivalents
and restricted cash at end of period
|
|
466
|
|
468
|
|
$
466
|
|
$
468
|
Less: restricted cash
at end of period
|
|
127
|
|
130
|
|
127
|
|
130
|
Cash and cash
equivalents at end of period
|
|
$
339
|
|
$
338
|
|
$
339
|
|
$
338
|
LEIDOS HOLDINGS, INC.
UNAUDITED SEGMENT OPERATING
RESULTS
(in millions)
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
July 1,
2022
|
|
July 2,
2021
|
|
July 1,
2022
|
|
July 2,
2021
|
Revenues:
|
|
|
|
|
|
|
|
|
Defense
Solutions
|
|
$
2,052
|
|
$
2,004
|
|
$
4,101
|
|
$
3,962
|
Civil
|
|
857
|
|
799
|
|
1,652
|
|
1,565
|
Health
|
|
688
|
|
645
|
|
1,338
|
|
1,236
|
Total
|
|
$
3,597
|
|
$
3,448
|
|
$
7,091
|
|
$
6,763
|
|
|
|
|
|
|
|
|
|
Operating income
(loss):
|
|
|
|
|
|
|
|
|
Defense
Solutions
|
|
$
139
|
|
$
137
|
|
$
272
|
|
$
289
|
Civil
|
|
38
|
|
55
|
|
81
|
|
129
|
Health
|
|
126
|
|
107
|
|
244
|
|
209
|
Corporate
|
|
(32)
|
|
(30)
|
|
(55)
|
|
(50)
|
Total
|
|
$
271
|
|
$
269
|
|
$
542
|
|
$
577
|
|
|
|
|
|
|
|
|
|
Operating income
margin:
|
|
|
|
|
|
|
|
|
Defense
Solutions
|
|
6.8 %
|
|
6.8 %
|
|
6.6 %
|
|
7.3 %
|
Civil
|
|
4.4 %
|
|
6.9 %
|
|
4.9 %
|
|
8.2 %
|
Health
|
|
18.3 %
|
|
16.6 %
|
|
18.2 %
|
|
16.9 %
|
Total
|
|
7.5 %
|
|
7.8 %
|
|
7.6 %
|
|
8.5 %
|
Defense Solutions
Defense Solutions revenues of $2,052
million increased by 2% compared to the prior year quarter.
The primary drivers of revenue growth were the ramp up of the Navy
NGEN-R SMIT and the Enduring Indirect Fires Protection Capability
(IFPC) contracts, which offset the completion of the programs
supporting operations in Afghanistan, a reduction in the volume of
material purchases supporting hypersonics programs and an adverse
foreign exchange impact. For the quarter Defense Solutions
operating income margin was 6.8% and non-GAAP operating income
margin was 8.3%, both unchanged compared to the prior year
quarter.
Civil
Civil revenues of $857 million
increased by 7% compared to the prior year quarter. The primary
drivers of revenue growth were the start up of the National
Aeronautics and Space Administration (NASA) Advanced Enterprise
Global Information Technology Solutions (AEGIS) program and
increased demand on existing programs with commercial energy
providers and the Department of Energy (DoE). Civil operating
income margin for the quarter decreased to 4.4% from 6.9% in the
prior year quarter. Non-GAAP operating income margin was 6.5%,
compared to 9.1% in the prior year quarter. The decline in segment
profitability was primarily attributable to an adverse arbitration
ruling and associated legal fees totaling $17 million relating to the acquisition of
IS&GS from Lockheed Martin.
Health
Health revenues of $688 million
increased by 7% compared to the prior year quarter, primarily as a
result of increased volumes on the DHMSM program and the ramp up of
the Military and Family Life Counseling (MFLC) program. In
addition, Leidos received a $28
million equitable adjustment to cover costs incurred as a
result of the COVID-19 pandemic, which was the primary driver for
operating income margin to improve from 16.6% to 18.3% and non-GAAP
operating income margin to improve from 17.8% to 19.8% compared to
the prior year quarter.
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. Estimated 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 and foreign
currency movements.
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 revenue 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 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:
|
|
July 1,
2022
|
|
July 2,
2021
|
Segment
|
|
Funded
|
|
Unfunded
|
|
Total
|
|
Funded
|
|
Unfunded
|
|
Total
|
Defense
Solutions
|
|
$
4,351
|
|
$
13,668
|
|
$
18,019
|
|
$
4,293
|
|
$ 14,154
|
|
$ 18,447
|
Civil
|
|
2,051
|
|
8,846
|
|
10,897
|
|
1,608
|
|
7,493
|
|
9,101
|
Health
|
|
1,139
|
|
4,667
|
|
5,806
|
|
1,255
|
|
4,720
|
|
5,975
|
Total
|
|
$
7,541
|
|
$
27,181
|
|
$
34,722
|
|
$
7,156
|
|
$ 26,367
|
|
$ 33,523
|
The increase in backlog includes $49
million of backlog acquired through business combinations in
our Defense Solutions reportable segment. Total backlog at
July 1, 2022, included a negative impact of $268 million when compared to total backlog at
July 2, 2021, primarily due to the exchange rate movements in
the British pound and Australian dollar when compared to the U.S.
dollar.
LEIDOS HOLDINGS, INC.
UNAUDITED
NON-GAAP FINANCIAL MEASURES
Leidos uses and refers to organic growth, non-GAAP operating
income, non-GAAP operating margin, adjusted EBITDA, adjusted EBITDA
margin, non-GAAP diluted EPS, free cash flow and free cash flow
conversion, 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 Leidos's consolidated financial statements
prepared in accordance with GAAP.
Management believes that these non-GAAP measures provide another
representation of the 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 computation of non-GAAP
measures may not be comparable to similarly titled measures
reported by other companies, thus limiting their use for
comparability.
Organic growth captures the revenue growth that is
inherent in the underlying business excluding the impact of
acquisitions made within the prior year; it is computed as current
revenues excluding acquisition revenues within the last 12 months
divided by previous year revenues excluding revenues from entities
divested within the prior year.
Non-GAAP operating income is computed by excluding
the following discrete items from operating income:
- Acquisition, integration and restructuring costs – Represents
acquisition, integration, lease termination and severance costs
related to acquisitions.
- Amortization of acquired intangible assets – Represents the
amortization of the fair value of the acquired intangible
assets.
- Asset impairment charges – Represents impairments of long-lived
intangible assets.
Non-GAAP operating margin is computed by dividing
non-GAAP operating income by revenues.
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 internally
developed intangible assets.
Adjusted EBITDA margin is computed by dividing
adjusted EBITDA by revenues.
Non-GAAP net income is computed by excluding the
discrete items listed under non-GAAP operating income and their
related tax impacts.
Non-GAAP diluted EPS is computed by dividing net
income attributable to Leidos common stockholders, adjusted for the
discrete items as identified above and the related tax impacts, by
the diluted weighted average number of common shares
outstanding.
Free cash flow is computed by deducting expenditures
for property, equipment and software from net cash provided by
operating activities.
Free cash flow conversion is computed by dividing free
cash flow by non-GAAP net income attributable to Leidos common
stockholders; operating cash flow conversion is computed by
dividing net cash provided by operating activities by net income
attributable to Leidos shareholders.
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP
FINANCIAL MEASURES [CONTINUED]
(in millions, except
growth percentages)
|
The following table
presents the reconciliation of revenues to organic growth by
reportable segment and total operations:
|
|
|
Three Months
Ended
|
|
|
|
|
July 1,
2022
|
|
July 2,
2021
|
|
Percent
Change
|
Defense
Solutions
|
|
|
|
|
|
|
Revenues, as
reported
|
|
$
2,052
|
|
$
2,004
|
|
2 %
|
Acquisition and
divestiture revenues(1)
|
|
17
|
|
5
|
|
|
Pro-forma revenues
(Organic Growth Rate)
|
|
$
2,035
|
|
$
1,999
|
|
2 %
|
|
|
|
|
|
|
|
Civil
|
|
|
|
|
|
|
Revenues, as
reported
|
|
$
857
|
|
$
799
|
|
7 %
|
|
|
|
|
|
|
|
Health
|
|
|
|
|
|
|
Revenues, as
reported
|
|
$
688
|
|
$
645
|
|
7 %
|
|
|
|
|
|
|
|
Total
Operations
|
|
|
|
|
|
|
Revenues, as
reported
|
|
$
3,597
|
|
$
3,448
|
|
4 %
|
Total acquisition and
divestiture revenues(1)
|
|
17
|
|
5
|
|
|
Pro-forma revenues
(Organic Growth Rate)
|
|
$
3,580
|
|
$
3,443
|
|
4 %
|
|
|
(1)
|
Current period
acquisition revenues reflect revenues in the current as reported
figures for 12 months from closing of each acquisition. Acquisition
revenues for the three months ended July 1, 2022 for the
Defense Solutions segment include Gibbs & Cox (acquired May 7,
2021) and a strategic, immaterial acquisition (acquired September
21, 2021). Year ago acquisition revenues reflect revenues from
assets subsequently divested. Acquisitions and divestiture in the
three months ended July 2, 2021 for the Defense Solutions
segment include the Aviation & Missile Solutions LLC (AMS)
divestiture that was completed on April 29, 2022.
|
UNAUDITED NON-GAAP
FINANCIAL MEASURES [CONTINUED]
(in millions, except
per share amounts and margin and growth percentages)
|
The following tables
present the reconciliation of non-GAAP operating income, net
income, diluted EPS, adjusted EBITDA, and adjusted EBITDA margin to
the most directly comparable GAAP measures for the three months
ended July 1, 2022:
|
|
|
Three Months Ended
July 1, 2022
|
|
|
As
reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization of
acquired
intangibles
|
|
Asset
impairment
charges
|
|
Non-GAAP
results
|
Operating
income
|
|
$
271
|
|
$
5
|
|
$
57
|
|
$
3
|
|
$
336
|
Non-operating expense,
net
|
|
(46)
|
|
—
|
|
—
|
|
—
|
|
(46)
|
Income before income
taxes
|
|
225
|
|
5
|
|
57
|
|
3
|
|
290
|
Income tax
expense(1)
|
|
(53)
|
|
(1)
|
|
(15)
|
|
(1)
|
|
(70)
|
Net income
|
|
172
|
|
4
|
|
42
|
|
2
|
|
220
|
Less: net income
attributable to non-controlling interest
|
|
1
|
|
—
|
|
—
|
|
—
|
|
1
|
Net income attributable
to Leidos common stockholders
|
|
$
171
|
|
$
4
|
|
$
42
|
|
$
2
|
|
$
219
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable to Leidos common stockholders(2)
|
|
$
1.24
|
|
$
0.03
|
|
$
0.31
|
|
$
0.01
|
|
$
1.59
|
Diluted
shares
|
|
138
|
|
138
|
|
138
|
|
138
|
|
138
|
|
|
|
Three Months Ended
July 1, 2022
|
|
|
As
reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization of
acquired
intangibles
|
|
Asset
impairment
charges
|
|
Non-GAAP
results
|
Net income
|
|
$
172
|
|
$
4
|
|
$
42
|
|
$
2
|
|
$
220
|
Income tax
expense(1)
|
|
53
|
|
1
|
|
15
|
|
1
|
|
70
|
Income before income
taxes
|
|
225
|
|
5
|
|
57
|
|
3
|
|
290
|
Depreciation
expense
|
|
26
|
|
—
|
|
—
|
|
—
|
|
26
|
Amortization of
intangibles
|
|
57
|
|
—
|
|
(57)
|
|
—
|
|
—
|
Interest expense,
net
|
|
50
|
|
—
|
|
—
|
|
—
|
|
50
|
EBITDA
|
|
$
358
|
|
$
5
|
|
$
—
|
|
$
3
|
|
$
366
|
EBITDA
margin
|
|
10.0 %
|
|
|
|
|
|
|
|
10.2 %
|
|
|
(1)
|
Calculation uses an
estimated statutory tax rate on non-GAAP adjustments.
|
(2)
|
Earnings per share is
computed independently for each of the non-GAAP adjustment
presented and therefore may not sum to the total non-GAAP earnings
per share due to rounding.
|
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP
FINANCIAL MEASURES [CONTINUED]
(in millions, except
per share amounts and margin and growth percentages)
|
The following tables
present the reconciliation of non-GAAP operating income, net
income, diluted EPS, adjusted EBITDA, and adjusted EBITDA margin to
the most directly comparable GAAP measures for the three months
ended July 2, 2021:
|
|
|
|
Three Months Ended July
2, 2021
|
|
|
As reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization of
acquired
intangibles
|
|
Non-GAAP
results
|
Operating
income
|
|
$
269
|
|
$
10
|
|
$
55
|
|
$
334
|
Non-operating expense,
net
|
|
(46)
|
|
—
|
|
—
|
|
(46)
|
Income before income
taxes
|
|
223
|
|
10
|
|
55
|
|
288
|
Income tax
expense(1)
|
|
(53)
|
|
(2)
|
|
(14)
|
|
(69)
|
Net income
|
|
170
|
|
8
|
|
41
|
|
219
|
Less: net income
attributable to non-controlling interest
|
|
1
|
|
—
|
|
—
|
|
1
|
Net income attributable
to Leidos common stockholders
|
|
$
169
|
|
$
8
|
|
$
41
|
|
$
218
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable to Leidos common stockholders
|
|
$
1.18
|
|
$
0.05
|
|
$
0.29
|
|
$
1.52
|
Diluted
shares
|
|
143
|
|
143
|
|
143
|
|
143
|
|
|
|
Three Months Ended July
2, 2021
|
|
|
As reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization of
acquired
intangibles
|
|
Non-GAAP
results
|
Net income attributable
to Leidos common stockholders
|
|
$
169
|
|
$
8
|
|
$
41
|
|
$
218
|
Income tax
expense(1)
|
|
53
|
|
2
|
|
14
|
|
69
|
Income before income
taxes
|
|
223
|
|
10
|
|
55
|
|
288
|
Depreciation
expense
|
|
25
|
|
—
|
|
—
|
|
25
|
Amortization of
intangibles
|
|
55
|
|
—
|
|
(55)
|
|
—
|
Interest expense,
net
|
|
46
|
|
—
|
|
—
|
|
46
|
EBITDA
|
|
$
349
|
|
$
10
|
|
$
—
|
|
$
359
|
EBITDA
margin
|
|
10.1 %
|
|
|
|
|
|
10.4 %
|
|
|
(1)
|
Calculation uses an
estimated statutory tax rate on non-GAAP adjustments.
|
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP
FINANCIAL MEASURES [CONTINUED]
(in millions, except
per share amounts and margin and growth percentages)
|
The following tables
present the reconciliation of non-GAAP operating income, net
income, diluted EPS, adjusted EBITDA, and adjusted EBITDA margin to
the most directly comparable GAAP measures for the six months ended
July 1, 2022:
|
|
|
|
Six Months Ended
July 1, 2022
|
|
|
As reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization of
acquired
intangibles
|
|
Asset
impairment
charges
|
|
Non-GAAP
results
|
Operating
income
|
|
$
542
|
|
$
8
|
|
$
115
|
|
$
3
|
|
$
668
|
Non-operating expense,
net
|
|
(95)
|
|
—
|
|
—
|
|
—
|
|
(95)
|
Income before income
taxes
|
|
447
|
|
8
|
|
115
|
|
3
|
|
573
|
Income tax
expense(1)
|
|
(98)
|
|
(2)
|
|
(29)
|
|
(1)
|
|
(130)
|
Net income
|
|
349
|
|
6
|
|
86
|
|
2
|
|
443
|
Less: net income
attributable to non-controlling interest
|
|
3
|
|
—
|
|
—
|
|
—
|
|
3
|
Net income attributable
to Leidos common stockholders
|
|
$
346
|
|
$
6
|
|
$
86
|
|
$
2
|
|
$
440
|
|
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable to Leidos common stockholders
|
|
$
2.49
|
|
$
0.04
|
|
$
0.63
|
|
$
0.01
|
|
$
3.17
|
Diluted
shares
|
|
139
|
|
139
|
|
139
|
|
139
|
|
139
|
|
|
|
Six Months Ended
July 1, 2022
|
|
|
As reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization of
acquired
intangibles
|
|
Asset
impairment
charges
|
|
Non-GAAP
results
|
Net income
|
|
$
349
|
|
$
6
|
|
$
86
|
|
$
2
|
|
$
443
|
Income tax
expense(1)
|
|
98
|
|
2
|
|
29
|
|
1
|
|
130
|
Income before income
taxes
|
|
447
|
|
8
|
|
115
|
|
3
|
|
573
|
Depreciation
expense
|
|
52
|
|
—
|
|
—
|
|
—
|
|
52
|
Amortization of
intangibles
|
|
116
|
|
—
|
|
(115)
|
|
—
|
|
1
|
Interest expense,
net
|
|
98
|
|
—
|
|
—
|
|
—
|
|
98
|
EBITDA
|
|
$
713
|
|
$
8
|
|
$
—
|
|
$
3
|
|
$
724
|
EBITDA
margin
|
|
10.1 %
|
|
|
|
|
|
|
|
10.2 %
|
|
|
(1)
|
Calculation uses an
estimated statutory tax rate on non-GAAP adjustments.
|
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP
FINANCIAL MEASURES [CONTINUED]
(in millions, except
per share amounts and margin and growth percentages)
|
The following tables
present the reconciliation of non-GAAP operating income, net
income, diluted EPS, adjusted EBITDA, and adjusted EBITDA margin to
the most directly comparable GAAP measures for the six months ended
July 2, 2021:
|
|
|
|
Six Months Ended July
2, 2021
|
|
|
As reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization of
acquired
intangibles
|
|
Non-GAAP
results
|
Operating
income
|
|
$
577
|
|
$
15
|
|
$
109
|
|
$
701
|
Non-operating expense,
net
|
|
(92)
|
|
—
|
|
—
|
|
(92)
|
Income before income
taxes
|
|
485
|
|
15
|
|
109
|
|
609
|
Income tax
expense(1)
|
|
(110)
|
|
(3)
|
|
(28)
|
|
(141)
|
Net income
|
|
375
|
|
12
|
|
81
|
|
468
|
Less: net income
attributable to non-controlling interest
|
|
1
|
|
—
|
|
—
|
|
1
|
Net income attributable
to Leidos common stockholders
|
|
$
374
|
|
$
12
|
|
$
81
|
|
$
467
|
|
|
|
|
|
|
|
|
|
Diluted EPS
attributable to Leidos common stockholders
|
|
$
2.62
|
|
$
0.08
|
|
$
0.57
|
|
$
3.27
|
Diluted
shares
|
|
143
|
|
143
|
|
143
|
|
143
|
|
|
|
Six Months Ended July
2, 2021
|
|
|
As reported
|
|
Acquisition,
integration and
restructuring
costs
|
|
Amortization of
acquired
intangibles
|
|
Non-GAAP
results
|
Net income
|
|
$
375
|
|
$
12
|
|
$
81
|
|
$
468
|
Income tax
expense(1)
|
|
(110)
|
|
(3)
|
|
(28)
|
|
(141)
|
Income before income
taxes
|
|
485
|
|
15
|
|
109
|
|
609
|
Depreciation
expense
|
|
47
|
|
—
|
|
—
|
|
47
|
Amortization of
intangibles
|
|
110
|
|
—
|
|
(109)
|
|
1
|
Interest expense,
net
|
|
91
|
|
—
|
|
—
|
|
91
|
EBITDA
|
|
$
733
|
|
$
15
|
|
$
—
|
|
$
748
|
EBITDA
margin
|
|
10.8 %
|
|
|
|
|
|
11.1 %
|
|
|
(1)
|
Calculation uses an
estimated statutory tax rate on non-GAAP adjustments.
|
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP
FINANCIAL MEASURES [CONTINUED]
(in millions, except
per share amounts and margin and growth percentages)
|
|
The following tables
present the reconciliation of non-GAAP operating income by
reportable segment and Corporate to operating income:
|
|
|
|
|
|
Three Months Ended
July 1, 2022
|
|
|
|
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
|
|
$
139
|
|
$
—
|
|
$
32
|
|
$
—
|
|
$
171
|
|
8.3 %
|
|
Civil
|
|
38
|
|
—
|
|
18
|
|
—
|
|
56
|
|
6.5 %
|
|
Health
|
|
126
|
|
—
|
|
7
|
|
3
|
|
136
|
|
19.8 %
|
|
Corporate
|
|
(32)
|
|
5
|
|
—
|
|
—
|
|
(27)
|
|
NM
|
|
Total
|
|
$
271
|
|
$
5
|
|
$
57
|
|
$
3
|
|
$
336
|
|
9.3 %
|
|
|
|
|
|
|
|
Three Months Ended July
2, 2021
|
|
|
|
|
|
Operating
income
(loss)
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of acquired
intangibles
|
|
Non-GAAP
operating
income
(loss)
|
|
Non-GAAP
operating
margin
|
|
Defense
Solutions
|
|
|
|
$
137
|
|
$
—
|
|
$
29
|
|
$
166
|
|
8.3 %
|
|
Civil
|
|
|
|
55
|
|
—
|
|
18
|
|
73
|
|
9.1 %
|
|
Health
|
|
|
|
107
|
|
—
|
|
8
|
|
115
|
|
17.8 %
|
|
Corporate
|
|
|
|
(30)
|
|
10
|
|
—
|
|
(20)
|
|
NM
|
|
Total
|
|
|
|
$
269
|
|
$
10
|
|
$
55
|
|
$
334
|
|
9.7 %
|
|
|
|
|
Six Months Ended July 1, 2022
|
|
|
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
|
|
$
272
|
|
$
—
|
|
$
65
|
|
$
—
|
|
$
337
|
|
8.2 %
|
Civil
|
|
81
|
|
—
|
|
36
|
|
—
|
|
117
|
|
7.1 %
|
Health
|
|
244
|
|
—
|
|
14
|
|
3
|
|
261
|
|
19.5 %
|
Corporate
|
|
(55)
|
|
8
|
|
—
|
|
—
|
|
(47)
|
|
NM
|
Total
|
|
$
542
|
|
$
8
|
|
$
115
|
|
$
3
|
|
$
668
|
|
9.4 %
|
|
|
|
|
|
Six Months Ended July
2, 2021
|
|
|
|
|
Operating
income
|
|
Acquisition,
integration
and
restructuring
costs
|
|
Amortization
of
acquired
intangibles
|
|
Non-GAAP
operating
income
|
|
Non-GAAP
operating
margin
|
Defense
Solutions
|
|
|
|
$
289
|
|
$
—
|
|
$
57
|
|
$
346
|
|
8.7 %
|
Civil
|
|
|
|
129
|
|
—
|
|
36
|
|
165
|
|
10.5 %
|
Health
|
|
|
|
209
|
|
—
|
|
16
|
|
225
|
|
18.2 %
|
Corporate
|
|
|
|
(50)
|
|
15
|
|
—
|
|
(35)
|
|
NM
|
Total
|
|
|
|
$
577
|
|
$
15
|
|
$
109
|
|
$
701
|
|
10.4 %
|
LEIDOS HOLDINGS,
INC.
UNAUDITED NON-GAAP
FINANCIAL MEASURES [CONTINUED]
(in millions, except
percentages)
|
The following table
presents the reconciliation of free cash flow to net cash provided
by operating activities as well as the calculation of operating
cash flow and free cash flow conversion ratios:
|
|
|
|
Three Months
Ended
|
|
|
July 1,
2022
|
|
July 2, 2021
|
Net cash provided by
operating activities
|
|
$
40
|
|
$
17
|
Payments for property,
equipment and software
|
|
(21)
|
|
(21)
|
Free cash
flow
|
|
$
19
|
|
$
(4)
|
|
|
|
|
|
Net income attributable
to Leidos common stockholders
|
|
$
171
|
|
$
169
|
Acquisition,
integration and restructuring costs (1)
|
|
4
|
|
8
|
Amortization of
acquired intangibles (1)
|
|
42
|
|
41
|
Asset impairment
charges (1)
|
|
2
|
|
—
|
Non-GAAP net income
attributable to Leidos common stockholders
|
|
$
219
|
|
$
218
|
|
|
|
|
|
Operating cash flow
conversion ratio
|
|
23 %
|
|
10 %
|
Free cash flow
conversion ratio
|
|
9 %
|
|
(2) %
|
|
|
(1)
|
After-tax expenses
excluded from non-GAAP net income.
|
View original
content:https://www.prnewswire.com/news-releases/leidos-holdings-inc-reports-second-quarter-fiscal-year-2022-results-301597322.html
SOURCE Leidos