Quarter Ended January 1, 2016

As reported

Amortization
of
intangibles¹

Restructuring
expenses

Gain on a
real estate
sale

Non-GAAP
results

Income from continuing operations, before 
     income taxes

$

173

$

(2)

$

(3)

$

82

$

96

Depreciation expense

7

—

—

—

7

Amortization expense

2

2

—

—

—

Interest expense, net

12

—

—

—

12

EBITDA

$

194

$

—

$

(3)

$

82

$

115

⁽¹⁾ Prior period has been recast to reflect amortization of acquired intangible assets as a non-GAAP adjustment.

LEIDOS HOLDINGS, INC.

UNAUDITED NON-GAAP FINANCIAL MEASURES [CONTINUED]

(in millions, except per share amounts)

Year Ended December 30, 2016

As
reported

Asset
impairment
charges

Acquisition
and
integration
costs

Amortization
of
intangibles

Restructuring
expenses

Gains on
sale of
assets and
businesses

Non-GAAP
results

Revenue

$

7,043

$

—

$

—

$

—

$

—

$

—

$

7,043

Cost of revenues

6,191

—

—

—

—

—

6,191

Selling, general and 
     administrative expenses ¹

337

—

—

84

—

—

253

Asset impairment charges

4

4

—

—

—

—

—

Acquisition and integration 
     costs

90

—

90

—

—

—

—

Restructuring expenses

14

—

—

—

14

—

—

Equity earnings of non-
     consolidated subsidiaries

(10)

—

—

—

—

—

(10)

Operating income

417

(4)

(90)

(84)

(14)

—

609

Non-operating expense, net

(99)

—

—

—

—

5

(104)

Income from continuing 
     operations, before income 
     taxes

318

(4)

(90)

(84)

(14)

5

505

Income tax expense ²

(72)

2

27

33

5

(1)

(138)

Income from continuing 
     operations

246

(2)

(63)

(51)

(9)

4

367

Less: net income attributable 
     to non-controlling interest, 
     net of taxes

2

—

—

—

—

—

2

Net income attributable to 
     Leidos common 
     stockholders

$

244

$

(2)

$

(63)

$

(51)

$

(9)

$

4

$

365

Diluted EPS from continuing 
     operations attributable to 
     Leidos common 
     stockholders

$

2.35

$

(0.02)

$

(0.60)

$

(0.49)

$

(0.09)

$

0.04

$

3.51

Diluted shares

104

104

104

104

104

104

104

⁽¹⁾ Selling, general and administrative expenses includes bad debt expense of $3 million.

⁽²⁾ Calculation uses an estimated statutory tax rate on non-GAAP tax deductible adjustments.