LEIDOS HOLDINGS, INC.

UNAUDITED NON-GAAP FINANCIAL MEASURES [CONTINUED]

(in millions, except per share amounts)

Calendar Year Ended January 1, 2016

As reported

Asset
impairment
charges

Amortization
of
intangibles¹

Restructuring
expenses

Gain on a
real estate
sale

Non-GAAP
results

Revenue

$

5,086

$

—

$

—

$

—

$

—

$

5,086

Cost of revenues

4,468

—

—

—

—

4,468

Selling, general and administrative 
     expenses²

241

—

9

—

—

232

Asset impairment charges

73

73

—

—

—

—

Restructuring expenses

6

—

—

6

—

—

Operating income

298

(73)

(9)

(6)

—

386

Non-operating income (expense), 
     net

30

—

—

—

82

(52)

Income from continuing operations, 
     before income taxes

328

(73)

(9)

(6)

82

334

Income tax expense ³

(92)

28

4

2

(11)

(115)

Income from continuing operations

236

(45)

(5)

(4)

71

219

Income from discontinued 
     operations, net of taxes

18

—

—

—

—

18

Net income

$

254

$

(45)

$

(5)

$

(4)

$

71

$

237

Diluted EPS from continuing 
     operations

$

3.19

$

(0.61)

$

(0.07)

$

(0.05)

$

0.96

$

2.96

Diluted shares

74

74

74

74

74

74

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

⁽²⁾ Selling, general and administrative expenses includes bad debt expense of $9 million.

⁽³⁾ Calculation uses an estimated statutory tax rate on non-GAAP tax deductible adjustments.