Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Dec. 29, 2017 | Feb. 13, 2018 | Jun. 30, 2017 | |
Document Documentand Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 29, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | LDOS | ||
Entity Registrant Name | Leidos Holdings, Inc. | ||
Entity Central Index Key | 1,336,920 | ||
Current Fiscal Year End Date | --12-29 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 151,459,401 | ||
Entity Public Float | $ 7,777,971,706 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 29, 2017 | Dec. 30, 2016 |
Current assets: | ||
Cash and cash equivalents | $ 390 | $ 376 |
Receivables, net | 1,831 | 1,657 |
Inventory, prepaid expenses and other current assets | 453 | 348 |
Total current assets | 2,674 | 2,381 |
Property, plant and equipment, net | 232 | 259 |
Intangible assets, net | 856 | 1,589 |
Goodwill | 4,974 | 4,622 |
Deferred income taxes | 0 | 16 |
Other assets | 254 | 265 |
Total assets | 8,990 | 9,132 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 1,639 | 1,427 |
Accrued payroll and employee benefits | 487 | 483 |
Dividends payable | 17 | 23 |
Income taxes payable | 4 | 21 |
Notes payable and long-term debt, current portion | 55 | 62 |
Total current liabilities | 2,202 | 2,016 |
Notes payable and long-term debt, net of current portion | 3,056 | 3,225 |
Deferred tax liabilities | 220 | 540 |
Other long-term liabilities | 129 | 204 |
Commitments and contingencies (Notes 18, 21 and 22) | ||
Stockholder's equity: | ||
Preferred stock, $.0001 par value,10 million shares authorized and no shares issued and outstanding at December 29, 2017, and December 30, 2016 | 0 | 0 |
Common stock, $.0001 par value, 500 million shares authorized, 151 million and 150 million shares issued and outstanding at December 29, 2017, and December 30, 2016, respectively | 0 | 0 |
Additional paid-in capital | 3,344 | 3,316 |
Accumulated deficit | (7) | (177) |
Accumulated other comprehensive loss | 33 | (4) |
Total stockholder's equity | 3,370 | 3,135 |
Non-controlling interest | 13 | 12 |
Total equity | 3,383 | 3,147 |
Total liabilities and stockholders' equity | $ 8,990 | $ 9,132 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 29, 2017 | Dec. 30, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized (shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (shares) | 0 | 0 |
Preferred stock, shares outstanding (shares) | 0 | 0 |
Common stock, par value (usd per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (shares) | 151,000,000 | 150,000,000 |
Common stock, shares outstanding (shares) | 151,000,000 | 150,000,000 |
Consolidated Statements Of Inco
Consolidated Statements Of Income - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Income Statement [Abstract] | |||
Revenues | $ 4,712 | $ 10,170 | $ 7,043 |
Cost of revenues | 4,146 | 8,923 | 6,191 |
Selling, general and administrative expenses | 201 | 552 | 334 |
Bad debt expense | 8 | 10 | 3 |
Acquisition and integration costs | 0 | 102 | 90 |
Asset impairment charges | 33 | 0 | 4 |
Restructuring expenses | 4 | 37 | 14 |
Equity earnings of non-consolidated subsidiaries | 0 | (13) | (10) |
Operating income | 320 | 559 | 417 |
Interest income | 4 | 8 | 10 |
Interest expense | (53) | (148) | (96) |
Other (expense) income, net | 84 | (26) | (13) |
Income from continuing operations before income taxes | 355 | 393 | 318 |
Income tax expense | (112) | (29) | (72) |
Income from continuing operations | 243 | 364 | 246 |
Discontinued operations: | |||
Loss from discontinued operations before income taxes | (1) | 0 | 0 |
Loss from discontinued operations | (1) | 0 | 0 |
Net income | 242 | 364 | 246 |
Less: net (loss) income attributable to non-controlling interest | 0 | (2) | 2 |
Net income attributable to Leidos common stockholders | $ 242 | $ 366 | $ 244 |
Basic: | |||
Income from continuing operations attributable to Leidos common stockholders (usd per share) | $ 3.33 | $ 2.41 | $ 2.39 |
Discontinued operations, net of taxes (usd per share) | (0.01) | 0 | 0 |
Net income attributable to Leidos common stockholders (usd per share) | 3.32 | 2.41 | 2.39 |
Diluted: | |||
Income from continuing operations attributable to Leidos common stockholders (usd per share) | 3.28 | 2.38 | 2.35 |
Discontinued operations, net of taxes (usd per share) | (0.01) | 0 | 0 |
Net income attributable to Leidos common stockholders (usd per share) | $ 3.27 | $ 2.38 | $ 2.35 |
Consolidated Statements Of Comp
Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 242 | $ 364 | $ 246 |
Other comprehensive income, net of taxes: | |||
Foreign currency translation adjustments | (1) | 24 | (7) |
Unrecognized gain on derivative instruments | (1) | (4) | (14) |
Pension liability adjustments | 3 | 9 | (3) |
Total other comprehensive income, net of taxes | 3 | 37 | 4 |
Comprehensive income | 245 | 401 | 250 |
Less: comprehensive (loss) income attributable to non-controlling interest | 0 | (2) | 2 |
Comprehensive income attributable to Leidos common stockholders | $ 245 | $ 403 | $ 248 |
Consolidated Statements Of Stoc
Consolidated Statements Of Stockholders' Equity - USD ($) shares in Millions, $ in Millions | Total | Leidos Holdings, Inc. stockholders' equity | Shares of common stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income (loss) | Non-controlling interest |
Balance, shares at Jan. 30, 2015 | 74 | ||||||
Balance, value at Jan. 30, 2015 | $ 998 | $ 998 | $ 1,433 | $ (424) | $ (11) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 242 | 242 | 242 | ||||
Other comprehensive income, net of taxes | 3 | 3 | 3 | ||||
Issuances of stock (less forfeitures), shares | 1 | ||||||
Issuances of stock (less forfeitures) | 7 | 7 | 7 | ||||
Repurchases of stock and other, shares | (3) | ||||||
Repurchases of stock and other | (118) | (118) | (118) | ||||
Dividends | (95) | (95) | (95) | ||||
Adjustments for income tax benefits from stock-based compensation | 1 | 1 | 1 | ||||
Stock-based compensation | 30 | 30 | 30 | ||||
Stock issued for the IS&GS Business acquisition | 0 | ||||||
Balance, shares at Jan. 01, 2016 | 72 | ||||||
Balance, value at Jan. 01, 2016 | 1,068 | 1,068 | 1,353 | (277) | (8) | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 246 | 244 | 244 | 2 | |||
Other comprehensive income, net of taxes | 4 | 4 | 4 | ||||
Issuances of stock (less forfeitures), shares | 1 | ||||||
Issuances of stock (less forfeitures) | 36 | 36 | 36 | ||||
Repurchases of stock and other | (24) | (24) | (24) | ||||
Dividends | (144) | (144) | (144) | ||||
Special cash dividend of $13.64 per share | (1,022) | (1,022) | (1,022) | ||||
Stock-based compensation | 35 | 35 | 35 | ||||
Stock issued for the IS&GS Business acquisition, shares | 77 | ||||||
Stock issued for the IS&GS Business acquisition | 2,938 | 2,938 | 2,938 | ||||
Equity interest acquired | 10 | 10 | |||||
Balance, shares at Dec. 30, 2016 | 150 | ||||||
Balance, value at Dec. 30, 2016 | 3,147 | 3,135 | 3,316 | (177) | (4) | 12 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 364 | 366 | 366 | (2) | |||
Other comprehensive income, net of taxes | 37 | 37 | 37 | ||||
Issuances of stock (less forfeitures), shares | 1 | ||||||
Issuances of stock (less forfeitures) | 16 | 16 | 16 | ||||
Repurchases of stock and other | (31) | (31) | (31) | ||||
Dividends | (196) | (196) | (196) | ||||
Stock-based compensation | 43 | 43 | 43 | ||||
Stock issued for the IS&GS Business acquisition | 0 | ||||||
Equity interest acquired | 3 | 3 | |||||
Balance, shares at Dec. 29, 2017 | 151 | ||||||
Balance, value at Dec. 29, 2017 | $ 3,383 | $ 3,370 | $ 3,344 | $ (7) | $ 33 | $ 13 |
Consolidated Statements Of Equ
Consolidated Statements Of Equity (Parenthetical) - $ / shares | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividend per share | $ 1.28 | $ 1.28 | $ 1.28 |
Special cash dividend of $13.64 per share | $ 13.64 |
Consolidated Statements Of Cash
Consolidated Statements Of Cash Flows - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Cash flows from operations: | |||
Net income | $ 242 | $ 364 | $ 246 |
Income from discontinued operations | 1 | 0 | 0 |
Adjustments to reconcile net income to net cash provided by continuing operations: | |||
Depreciation and amortization | 41 | 336 | 122 |
Amortization of equity method investments | 0 | 14 | 0 |
Stock-based compensation | 30 | 43 | 35 |
Asset impairment charges | 33 | 0 | 4 |
Promissory note impairment | 0 | 33 | 0 |
Gain on a real estate sale | (82) | 0 | 0 |
Bad debt expense | 8 | 10 | 3 |
Non-cash interest expense | 1 | 12 | 4 |
Other | (3) | 9 | (7) |
Change in assets and liabilities, net of effects of acquisitions and dispositions: | |||
Receivables | (19) | (191) | 123 |
Inventory, prepaid expenses and other current assets | (14) | (76) | (98) |
Accounts payable and accrued liabilities | 102 | 152 | (25) |
Accrued payroll and employee benefits | 5 | 8 | 26 |
Deferred income taxes and income taxes receivable/payable | 81 | (151) | 36 |
Other long-term assets/liabilities | (44) | (37) | (20) |
Net cash provided by operating activities of continuing operations | 382 | 526 | 449 |
Cash flows from investing activities: | |||
Payments for property, plant and equipment | (27) | (81) | (29) |
Acquisitions of businesses | 0 | 0 | 25 |
Payments on accrued purchase price related to prior acquisition | (13) | 0 | 0 |
Net proceeds from sale of assets | 79 | 8 | 3 |
Proceeds from disposition of business | 27 | 0 | 23 |
Other | 4 | 2 | 4 |
Net cash (used in) provided by investing activities of continuing operations | 70 | (71) | 26 |
Cash flows from financing activities: | |||
Payments of long-term debt | (39) | (209) | (277) |
Payments on real estate financing transaction | (8) | 0 | 0 |
Proceeds from debt issuance | 0 | 0 | 690 |
Payments for debt issuance and modification costs | 0 | (4) | (30) |
Proceeds from issuances of stock | 6 | 13 | 25 |
Repurchases of stock and other | (118) | (31) | (24) |
Special cash dividend payment | 0 | 0 | (993) |
Dividend payments | (93) | (198) | (142) |
Other | 1 | 0 | 0 |
Net cash used in financing activities of continuing operations | (251) | (429) | (751) |
Net increase (decrease) in cash, cash equivalents and restricted cash from continuing operations | 201 | 26 | (276) |
Cash flows from discontinued operations: | |||
Net decrease in cash, cash equivalents and restricted cash from discontinued operations | (7) | 0 | 0 |
Net cash used in operating activities of discontinued operations | 6 | 0 | (1) |
Net decrease in cash, cash equivalents and restricted cash from discontinued operations | (1) | 0 | (1) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 200 | 26 | (277) |
Cash, cash equivalents and restricted cash at beginning of year | 473 | 396 | 673 |
Cash, cash equivalents and restricted cash at end of year | $ 673 | $ 422 | $ 396 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 29, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Nature of Operations and Basis of Presentation Leidos Holdings, Inc., a Delaware corporation ("Leidos") is a holding company whose direct 100% -owned subsidiaries and principal operating companies are Leidos, Inc. and Leidos Innovations Corporation ("Leidos Innovations"). Leidos is a FORTUNE 500 ® science, engineering and information technology company that makes the world healthier, safer and more efficient by providing services and solutions in the defense, intelligence, civil and health markets. Leidos' domestic customers include the U.S. Department of Defense ("DoD"), the U.S. Intelligence Community, the U.S. Department of Homeland Security ("DHS"), the Federal Aviation Administration, the Department of Veterans Affairs, several other U.S. Government civil agencies and state and local government agencies. Leidos' international customers include foreign governments and their agencies, primarily located in the United Kingdom, the Middle East and Australia. Unless indicated otherwise, references to the "Company," "we," "us" and "our" refer collectively to Leidos Holdings, Inc. and its consolidated subsidiaries. On August 16, 2016, a wholly-owned subsidiary of Leidos Holdings, Inc. merged with the Information Systems & Global Solutions business (the "IS&GS Business") of Lockheed Martin Corporation in a Reverse Morris Trust transaction. The acquired IS&GS Business was renamed Leidos Innovations Corporation. See "Note 2—Acquisitions" for further information. As a result of the Lockheed Martin transaction, the Company received a controlling interest in Mission Support Alliance, LLC ("MSA"), a joint venture with Jacobs Engineering Group, Inc. and Centerra Group, LLC. The Company has consolidated the financial results for MSA into its consolidated financial statements. The consolidated financial statements include the balances of all voting interest entities in which Leidos has a controlling voting interest ("subsidiaries") and a variable interest entity ("VIE") in which Leidos is the primary beneficiary. The consolidated balances of MSA, of which Leidos has a 47% interest, and the Company's variable interest entity are not material to the Company's consolidated financial statements for the periods presented. Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation. During fiscal 2017, the Company completed its business reorganization, which resulted in identification of three reportable segments (Defense Solutions, Civil and Health). Additionally, the Company separately presents the costs associated with corporate functions as Corporate. The Company commenced operating and reporting under the new organizational structure effective the beginning of fiscal 2017. As a result of this change, prior year segment results and disclosures have been recast to reflect the new reportable segments (see "Note 20—Business Segments"). In December 2017, the U.S. government enacted the Tax Cuts and Jobs Act ("Tax Act"). The Tax Act makes broad and complex changes to the U.S. tax code. In January 2018, the SEC issued Staff Accounting Bulletin 118, Income Tax Accounting Implications of the Tax Cuts and Jobs Act ("SAB 118"), which provides guidance on accounting for the tax effects of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the Tax Act enactment date for companies to complete the accounting under Accounting Standard Codification ("ASC") 740. In accordance with SAB 118, a company must reflect the income tax effects of those aspects of the Tax Act for which the accounting under ASC 740 is complete. To the extent that a company's accounting for certain income tax effects of the Tax Act is not complete but it is able to determine a reasonable estimate, it must record a provisional estimate in the financial statements. If a company cannot determine a provisional estimate to be included in the financial statements, it should continue to apply ASC 740 on the basis of the provisions of the tax laws that were in effect immediately before the enactment of the Tax Act (see "Note 16—Income Taxes"). Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. The Company separately disclosed "Bad debt expense" and "Non-cash interest expense" on the consolidated statements of cash flows, which was previously aggregated in "Other" within operating cash flows. Reporting Periods On March 20, 2015, the Board of Directors approved the amendment and restatement of the bylaws of Leidos to change Leidos' year end from the Friday nearest the end of January to the Friday nearest the end of December. As a result of this change, the Company filed a Transition Report on Form 10-K for the 11-month period which began on January 31, 2015, and ended on January 1, 2016. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management evaluates these estimates and assumptions on an ongoing basis, including those relating to estimated profitability of long-term contracts, indirect billing rates, allowances for doubtful accounts, inventories, fair value and impairment of intangible assets and goodwill, income taxes, pension benefits, stock-based compensation expense and contingencies. These estimates have been prepared by management on the basis of the most current and best available information; however, actual results could differ materially from those estimates. Restructuring Expenses Restructuring expenses are incurred in connection with programs aimed at reducing the Company's costs and primarily include lease termination, vacancy costs and termination costs associated with headcount reduction. The Company's restructuring actions include one-time involuntary termination benefits as well as certain contractual termination benefits or employee terminations under ongoing benefit arrangements. One-time involuntary termination benefits are recognized as a liability at estimated fair value when the plan of termination has been communicated to employees and certain other criteria are met. Ongoing termination benefit arrangements are recognized as a liability at estimated fair value when it is probable that amounts will be paid to employees and such amounts are reasonably estimable. When the Company ceases using a facility but does not intend to or is unable to terminate the operating lease, the Company records a liability for the present value of the remaining lease payments, net of estimated sublease income, if any, that could be reasonably obtained for the property (even if the Company does not intend to sublease the facility for the remaining term of the lease). Costs associated with exit or disposal activities, including the related one-time and ongoing involuntary termination benefits, are reflected as "Restructuring expenses" on the consolidated statements of income. See "Note 4—Restructuring Expenses" for additional information about the Company's restructuring activities. Operating Cycle The Company's operating cycle for long-term contracts may be greater than one year and is measured by the average time intervening between the inception and the completion of those contracts. Contract-related assets and liabilities are therefore generally classified as current assets and current liabilities. Business Combinations, Investments and Variable Interest Entities Business Combinations The accounting for business combinations requires the Company to make judgments and estimates related to the fair value of assets acquired, including the identification and valuation of intangible assets, as well as liabilities and contingencies assumed. Such judgments and estimates directly impact the amount of goodwill recognized in connection with an acquisition. Investments Investments in entities and corporate joint ventures where the Company has a noncontrolling ownership interest representing less than 50% and over which the Company has the ability to exercise significant influence, are accounted for under the equity method of accounting whereby the Company recognizes its proportionate share of the entities' net income or loss and does not consolidate the entities' assets and liabilities. Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost or cost net of other-than-temporary impairments. Variable Interest Entities The Company occasionally forms joint ventures and/or enters into arrangements with special purpose limited liability companies for the purpose of bidding and executing on specific projects. The Company analyzes each such arrangement to determine whether it represents a VIE. If the arrangement is determined to be a VIE, the Company assesses whether it is the primary beneficiary of the VIE and is consequently required to consolidate the VIE. Revenue Recognition The Company's revenues are generated primarily from contracts with the U.S. Government, commercial customers and various international, state and local governments or from subcontracts with other contractors engaged in work with such customers. The Company performs under various types of contracts, which include firm-fixed-price, time-and-materials, fixed-price-level-of-effort, cost-plus-fixed-fee, cost-plus-award-fee, cost-plus-incentive-fee and fixed-price-incentive fee contracts. Firm-fixed-price contracts—Revenues and fees on these contracts that are system integration or engineering in nature are primarily recognized using the percentage-of-completion method of accounting utilizing the cost-to-cost method. The completed contract method is utilized when reasonable and reliable cost estimates for a project cannot be made. Time-and-materials contracts—Revenue is recognized on time-and-materials contracts based on the hours provided in performance under the contract multiplied by the negotiated contract billing rates, plus the negotiated contract billing rate of any allowable material and subcontract costs and out-of-pocket expenses. Fixed-price-level-of-effort contracts ("FP-LOE")—These contracts are substantially similar to time-and-materials contracts except they require a specified level of effort over a stated period of time. Accordingly, the Company recognizes revenue on FP-LOE contracts with the U.S. Government in a manner similar to time-and-materials contracts in which the Company measures progress toward completion based on the hours provided in performance under the contract multiplied by the negotiated contract billing rates, plus the negotiated contract billing rate of any allowable material costs and out-of-pocket expenses. Cost-plus-fixed-fee contracts—Revenue is recognized on cost-plus-fixed-fee contracts with the U.S. Government on the basis of partial performance equal to costs incurred, plus an estimate of applicable fees earned as the Company becomes contractually entitled to reimbursement of costs and the applicable fees. Cost-plus-award-fee/cost-plus-incentive fee contracts—Revenues and fees on these contracts with the U.S. Government are recognized using the percentage-of-completion method of accounting using the cost-to-cost method. The Company includes an estimate of the ultimate incentive or award fee to be received on the contract in the estimate of contract revenues for purposes of applying the percentage-of-completion method of accounting. Fixed-price-incentive fee contracts ("FP-IF")—These contracts are substantially similar to cost-plus-incentive fee contracts recognized using the percentage-of-completion method of accounting except they require specified targets for cost and profit, price ceiling (but not a profit ceiling or floor), and profit adjustment formula. Under a FP-IF contract, the allowable costs incurred are eligible for reimbursement but are subject to a cost-share arrangement, which affects profitability. Generally, if costs exceed the contract target cost or are not allowable under the applicable regulations, the Company may not be able to obtain reimbursement for all costs and may have fees reduced or eliminated. Revenues from services and maintenance contracts, notwithstanding contract type, are recognized over the term of the respective contracts as the services are performed and revenue is earned. Revenues from unit-priced contracts are recognized as transactions are processed based on objective measures of output. Revenues from the sale of manufactured products are recorded upon passage of title and risk of loss to the customer, which is generally upon delivery, provided that all other requirements for revenue recognition have been met. The Company also uses the efforts-expended method of percentage-of-completion using measures such as labor dollars for measuring progress toward completion in situations in which this approach is more representative of the progress on the contract. For example, the efforts-expended method is utilized when there are significant amounts of materials or hardware procured for the contract that is not representative of progress on the contract. Additionally, the Company utilizes the units-of-delivery method under percentage-of-completion on contracts where separate units of output are produced. Under the units-of-delivery method, revenue is generally recognized when the units are delivered to the customer, provided that all other requirements for revenue recognition have been met. The Company evaluates its contracts for multiple elements, and when appropriate, separates the contracts into separate units of accounting for revenue recognition. Revenues generated from product sales do not represent a material amount of the Company's total revenues. The Company generally provides for anticipated losses on contracts by recording an expense during the period in which the losses are determined. Amounts billed and collected but not yet recognized as revenues under contracts are deferred. Contract costs incurred for U.S. Government contracts, including indirect costs, are subject to audit and adjustment through negotiations between the Company and government representatives. The Company's indirect cost audits by the Defense Contract Audit Agency remain open for fiscal 2012 and subsequent fiscal years for Leidos, Inc. and for fiscal 2011 and subsequent fiscal years for Leidos Innovations. Revenues on U.S. Government contracts have been recorded in amounts that are expected to be realized upon final settlement. Contract claims are unanticipated additional costs incurred but not provided for in the executed contract price that the Company seeks to recover from the customer. Such costs are expensed as incurred. Additional revenue related to contract claims is recognized when the amounts are awarded by the customer. Un-priced change orders are included in revenue when they are probable of recovery in an amount at least equal to the cost. On certain contracts where the Company is not the primary obligor such as the provision of administrative oversight and/or management of government-owned facilities or support services related to other vendors' products, the Company recognizes as revenue the net management fee associated with the services and excludes from its income statement the gross sales and costs associated with the facility or other vendors' products. Changes in Estimates on Contracts Changes in estimates related to long-term contracts accounted for using the percentage of completion method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes, with the exception of contracts acquired through the acquisition of the IS&GS Business (see "Note 2—Acquisitions"), where the adjustment is for the period commencing from the date of acquisition. Changes in these estimates can occur over the contract performance period for a variety of reasons, including changes in contract scope, contract cost estimates and estimated incentive or award fees. Changes in estimates on contracts for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions, except for per share amounts) Net favorable impact to income from continuing operations before taxes $ 103 $ 37 $ 18 Impact on diluted EPS from continuing operations attributable to Leidos common stockholders $ 0.41 $ 0.22 $ 0.14 The increase in the changes in estimates on contracts from fiscal 2016 to fiscal 2017 is primarily due to completion of contracts or events which mitigated risk and due the finalization of award and incentive fees. The impact on diluted EPS from continuing operations attributable to Leidos common stockholders is calculated using the Company's statutory tax rate. Divestitures From time-to-time, the Company may dispose (or management may commit to plans to dispose) of strategic or non-strategic components of the business. Divestitures representing a strategic shift in operations are classified as discontinued operations for all periods presented. Non-strategic divestitures are not reclassified as discontinued operations and remain in continuing operations. Pre-contract and Transition Costs Pre-contract Costs Costs incurred on projects as pre-contract costs are deferred as assets ("Inventory, prepaid expenses and other current assets") when the Company has been requested by the customer to begin work under a new arrangement prior to contract execution and it is probable that the Company will recover the costs through the issuance of a contract. When the formal contract has been executed, the costs are recorded to the contract and revenue is recognized. Transition Costs Under certain services contracts, costs are incurred, usually at the beginning of the contract performance, to transition the services, employees and equipment from the customer or prior contractor. These costs are capitalized as deferred assets and amortized over the shorter of the contractual period of performance or expected period of performance, if recoverability is deemed probable. Fair Value Measurements The accounting standard for fair value measurements establishes a three-level value hierarchy, which prioritizes the inputs used in measuring fair value as follows: observable inputs such as quoted prices in active markets ( Level 1 ); inputs other than quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly or quoted prices that are not active ( Level 2 ); and unobservable inputs in which there is little or no market data (e.g., discounted cash flow and other similar pricing models), which requires the Company to develop its own assumptions ( Level 3 ). The accounting guidance for fair value measurements requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The accounting guidance provides for the irrevocable option to elect, on a contract-by-contract basis, to measure certain financial assets and liabilities at fair value at inception of the contract and record any subsequent changes in fair value in earnings. The Company has not made fair value option elections on any of its financial assets and liabilities. The fair value of financial instruments is determined based on quoted market prices, if available, or management's best estimate (see "Financial Instruments" below). Management evaluates its investments for other-than-temporary impairment at each balance sheet date. When testing long-term investments for recovery of carrying value, the fair value of long-term investments is determined using various valuation techniques and factors such as, market prices of comparable companies ( Level 2 input), discounted cash flow models ( Level 3 input) and recent capital transactions of the portfolio companies being valued ( Level 3 input). If management determines that an other-than-temporary decline in the fair value of an investment has occurred, an impairment loss is recognized to reduce the investment to its estimated fair value. The Company's non-financial instruments measured at fair value on a non-recurring basis include goodwill, indefinite-lived intangible assets and long-lived tangible assets. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions. As such, the Company generally classifies non-financial instruments as either Level 2 or Level 3 fair value measurements. Financial Instruments The Company is exposed to certain market risks which are inherent in certain transactions entered into during the normal course of business. These transactions include sales or purchase contracts denominated in foreign currencies, investments in equity securities and exposure to changing interest rates. The Company manages its risk to changes in interest rates through the use of derivative instruments. For fixed rate borrowings, the Company uses variable interest rate swaps, effectively converting fixed rate borrowings to variable rate borrowings. These swaps are designated as fair value hedges. The fair value of these interest rate swaps is determined based on observed values for underlying interest rates on the LIBOR yield curve (Level 2). For variable rate borrowings, the Company uses fixed interest rate swaps, effectively converting a portion of the variable interest rate payments to fixed interest rate payments. These swaps are designated as cash flow hedges. The fair value of these interest rate swaps is determined based on observed values for the underlying interest rates (Level 2). The Company does not hold derivative instruments for trading or speculative purposes. The Company's defined benefit plan assets consist of investments in pooled funds that contain investments with values based on quoted market prices, but for which the pools are not valued on a daily quoted market basis (Level 2 inputs). Cash and Cash Equivalents The Company's cash equivalents were primarily comprised of investments in several large institutional money market funds and bank deposits, with original maturity of three months or less. The Company includes outstanding payments within "Cash and cash equivalents" and increases "Accounts payable and accrued liabilities" on the consolidated balance sheets. At December 29, 2017, and December 30, 2016, the Company included $169 million and $67 million , respectively, of outstanding payments within "Cash and cash equivalents." Restricted Cash The Company has restricted cash balances, primarily representing advances from customers that are restricted as to use for expenditures related to that customer's contract. Restricted cash balances are included as "Inventory, prepaid expenses and other current assets" in the Company's consolidated balance sheets. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of accounts receivable. Since the Company's receivables are primarily with the U.S. Government, the Company does not have exposure to a material credit risk. Additionally, the Company is subject to credit risk related to its derivatives which is managed through the use of multiple counterparties with high credit standards. Receivables The Company's receivables include amounts billed and currently due from customers and amounts currently due from customers but are unbilled. Amounts billable are recognized at estimated realizable value and consist of costs and fees, substantially all of which are expected to be billed and collected generally within one year. Unbilled amounts also include rate variances that are billable upon negotiation of final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Contract retentions are billed upon contract completion, or the occurrence of a specified event, and when negotiation of final indirect rates with the U.S. Government is complete. Consequently, the timing of collection of retention balances is outside the Company's control. Based on the Company's historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant. When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded. Inventories Inventories are valued at the lower of cost or estimated net realizable value. Raw material inventory is valued using the average cost method. Work-in-process inventory includes raw material costs plus labor costs, including fringe benefits and allocable overhead costs. The majority of finished goods inventory consists of security products and baggage scanning equipment. The Company evaluates inventory against historical and planned usage to determine appropriate provisions for obsolete inventory. Property, Plant and Equipment Purchases of property, plant and equipment as well as costs associated with major renewals and improvements are capitalized. Maintenance, repairs and minor renewals and improvements are expensed as incurred. Construction in Progress ("CIP") is used to accumulate all costs for projects that are not yet complete. CIP balances are transferred to the appropriate asset account when the asset is capitalized and ready for its intended use. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is recognized. Depreciation is recognized using the methods and estimated useful lives as follows: Depreciation method Estimated useful lives (in years) Computers and other equipment Straight-line or declining-balance 2-10 Buildings Straight-line Not to exceed 40 Building improvements and leasehold improvements Straight-line Shorter of useful life of asset or remaining lease term Office furniture and fixtures Straight-line or declining-balance 6-9 The Company evaluates its long-lived assets for potential impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable and the carrying amount of the asset exceeds its estimated fair value. Project Assets Purchases of project assets are capitalized for specific contracts where delivery has not yet occurred or ownership is maintained by the Company over the life of the contract. Project assets include enterprise software licenses, computers and significant material purchases on contracts. These project assets are relieved from the balance sheet based on different methodologies, including transfer of assets, amortization based on useful life and percentage of completion utilizing efforts expended method of revenue recognition. Goodwill Goodwill represents the excess of the fair value of consideration transferred, plus the fair value of any non-controlling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is not amortized, but instead is tested annually for impairment at the reporting unit level and tested more frequently if events or circumstances indicate that the carrying value may not be recoverable. The Company's policy is to perform its annual goodwill impairment evaluation as of the first day of the fourth quarter of its fiscal year. During fiscal 2017, the Company had five reporting units for the purpose of testing goodwill for impairment. Goodwill is evaluated for impairment either under a qualitative assessment option or a quantitative approach depending on the facts and circumstances of a reporting unit, including consideration of the excess of fair value over carrying amount in previous assessments and changes in business environment. When performing a qualitative assessment, the Company considers factors including, but not limited to, current macroeconomic conditions, industry and market conditions, cost factors, financial performance and other events relevant to the entity or reporting unit under evaluation to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that a reporting unit's fair value is less than its carrying amount, a quantitative goodwill impairment test is performed. When performing a quantitative goodwill impairment test, the reporting unit carrying value is compared to its fair value. Goodwill is deemed impaired if, and the impairment loss is recognized for the amount by which, the reporting unit carrying value exceeds its fair value. The Company estimates the fair value of each reporting unit using both market and income approaches (Level 3) when a quantitative analysis is performed. To determine the fair value of the reporting units, the outputs from both methods are equally weighted. The market approach is a technique where the fair value is calculated based on fair values of publicly-traded companies that provide a reasonable basis of comparison with the reporting unit. Valuation ratios are selected that relate market prices to selected financial metrics from comparable companies. These ratios are applied after consideration of adjustments and weightings related to financial position, growth, volatility, working capital movement and other factors. Due to the fact that stock prices of comparable companies represent minority interests, the Company also considers an acquisition control premium to reflect the impact of additional value associated with a controlling interest. The income approach is a technique where the fair value is calculated based on present value of future cash flows using risk-adjusted discount rates, which represent the weighted-average cost of capital ("WACC") for each reporting unit. Determination of WACC includes assessing the cost of equity and debt as of the valuation date. In addition, a terminal value is developed for forecasted future cash flows beyond the projection period discounted back to the present value. The forecasts used in the Company’s estimation of fair value are developed by management based on business and market considerations. The goodwill impairment test process and valuation model is based upon certain key assumptions that require the exercise of significant judgment and assumptions including the use of appropriate financial projections, economic expectations, WACC, expected long-term growth rates, as well as using available market data. Significant changes to these estimates and assumptions could adversely impact conclusions and actual future results may differ from the estimates. In addition, the identification of reporting units and the allocation of assets and liabilities to the reporting units when determining the carrying value of each reporting unit also requires judgment. Intangible Assets Acquired intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are amortized over the following periods: Estimated useful lives (in years) Program and contract intangibles 6-11 Backlog 1 Customer relationships 8 Software and technology 4-15 Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets with indefinite lives are not amortized but are assessed for impairment at the beginning of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Selling, General and Administrative Expenses The Company classifies indirect costs incurred within or allocated to its U.S. Government customers as overhead (included in cost of revenues) or general and administrative expenses in the same manner as such costs are defined in the Company's disclosure statements under U.S. Government Cost Accountin |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 29, 2017 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions The Company may acquire businesses as part of its growth strategy to provide new or enhance existing capabilities and offerings to customers. During fiscal 2016, the Company completed the acquisition of Lockheed Martin's IS&GS Business. Lockheed Martin Transaction On January 26, 2016, Leidos announced it had entered into a definitive agreement (as amended, the "Merger Agreement") with Lockheed Martin Corporation ("Lockheed Martin"); Abacus Innovations Corporation, a Delaware corporation and a wholly owned subsidiary of Lockheed Martin ("Splitco"); and Lion Merger Co., a Delaware corporation and, at the time of announcement, a wholly owned subsidiary of Leidos ("Merger Sub"), pursuant to which Leidos would combine with Lockheed Martin's realigned Information Systems & Global Solutions business in a Reverse Morris Trust transaction. In connection with the Merger Agreement, Lockheed Martin and Splitco entered into a Separation Agreement dated January 26, 2016 (as amended, the "Separation Agreement"), pursuant to which Lockheed Martin would separate the IS&GS Business from Lockheed Martin and transfer the IS&GS Business to Splitco. The transactions contemplated by the Merger Agreement and the Separation Agreement are referred to herein as the "Transactions." On August 16, 2016, the acquisition date, the Company completed the Transactions. In the Transactions, among other steps, (i) Lockheed Martin transferred the IS&GS Business to Splitco; (ii) Lockheed Martin offered to Lockheed Martin stockholders the right to exchange all or a portion of their shares of Lockheed Martin common stock for shares of Splitco common stock by way of an exchange offer (the "Distribution"); and (iii) Merger Sub merged with and into Splitco, with Splitco as the surviving corporation (the "Merger") and a wholly owned subsidiary of Leidos. Additionally, on the closing date of the Transactions, Splitco's name was changed to Leidos Innovations Corporation. Upon consummation of the Transactions, those Lockheed Martin stockholders who elected to participate in the exchange offer received approximately 77 million shares of Leidos common stock, which represented approximately 50.5% of the outstanding shares of Leidos common stock after consummation of the Transactions. Holders of Leidos shares prior to the transaction held the remaining 49.5% of the outstanding shares of Leidos common stock immediately after the closing. Prior to the Distribution, Splitco incurred third-party debt financing in an aggregate principal amount of $1.8 billion and immediately thereafter, Lockheed Martin transferred the IS&GS Business to Splitco and Splitco made a special cash payment to Lockheed Martin of $1.8 billion . In connection with the Transactions, Leidos incurred new indebtedness and assumed Splitco's indebtedness in the form of term loans in an aggregate principal amount of $690 million and $1.8 billion , respectively, and entered into a new $750 million senior secured revolving credit facility, which replaced its existing revolving credit facility. See "Note 12—Debt" for further information regarding the new debt incurred and the new senior revolving credit facility. In conjunction with the Transactions, Leidos' Board of Directors declared a special dividend of $13.64 per share of Leidos common stock. Consequently, on August 22, 2016, the Company paid $993 million to stockholders of record as of August 15, 2016, and accrued $29 million of dividend equivalents with respect to outstanding equity awards. See "Note 15—Stock-Based Compensation" for further information regarding the modifications made to the Company's outstanding stock awards as a result of the special dividend. As a result of the Transactions, membership on the Leidos Board of Directors was increased to 12 directors, in which three directors designated by Lockheed Martin were appointed to the board. A majority of the senior management of Leidos immediately prior to the consummation of the Transactions remained Leidos executive officers immediately after the Transactions. Leidos management determined that Leidos is the accounting acquirer in the Transactions based on the facts and circumstances noted within this section and other relevant factors. The acquisition adds large, complex information technology ("IT") system implementation and operation experience and additional federal and international IT solutions and services work to the Leidos portfolio, providing more venues to sell value added services such as cybersecurity and analytics. As a result, the Company is more diversified in markets it serves and provides the Company the scale and access to markets intended to further growth. The final purchase consideration for the acquisition of the IS&GS Business was as follows (in millions): Value of common stock issued to Lockheed Martin stockholders (1) $ 2,929 Equity consideration for replacement awards (2) 9 Working capital adjustments (3) 81 Purchase price $ 3,019 (1) Represents approximately 77 million new shares of Leidos common stock issued to those Lockheed Martin stockholders who elected to participate in the exchange offer, based on the Company's August 16, 2016, closing share price of $51.69 , less the Leidos special cash dividend amount of $13.64 , which the Lockheed Martin stockholders were not entitled to receive. (2) Represents a portion of the $23 million total fair value of replacement equity-based awards attributable to the pre-Merger service period. The remaining $12 million , net of estimated forfeitures, will be recognized as stock-based compensation expense over the remaining requisite service period (see "Note 15—Stock-Based Compensation"). (3) In January 2018, the Company finalized its net working capital at $105 million . The additional $24 million was recorded as acquisition costs in the consolidated statements of income. The final fair values of the assets acquired and liabilities assumed at the date of the Transactions were as follows (in millions): Cash $ 25 Receivables, net 938 Inventory, prepaid expenses and other current assets 73 Property, plant and equipment 87 Intangible assets 1,194 Other assets 58 Accounts payable and accrued liabilities (733 ) Accrued payroll and employee benefits (186 ) Long-term debt, current portion (23 ) Deferred tax liabilities (328 ) Long-term debt, net of current portion (1,780 ) Other long-term liabilities (45 ) Total identifiable net liabilities assumed (720 ) Non-controlling interest (13 ) Goodwill 3,752 Purchase price $ 3,019 During fiscal 2017, the Company recorded adjustments to finalize the fair value of acquired assets and liabilities assumed which resulted in a $337 million increase in goodwill . Significant changes included intangible assets, property, plant and equipment, deferred tax assets, other assets, accounts payable and accrued liabilities and deferred tax liabilities. During fiscal 2017, the Company recognized cumulative catch-up adjustments related to valuation adjustments for equity method investments and property, plant, and equipment, which resulted in an increase of $7 million in amortization expense and an increase $7 million of depreciation expense, respectively. The Company recorded the cumulative catch-up adjustments to equity method investments within " Equity earnings of non-consolidated subsidiaries " and adjustments to depreciation within "Costs of revenues" and "Selling, general and administrative expenses" in the Company's consolidated statements of income. Additionally, during fiscal 2017, the Company recorded a valuation adjustment to reflect the fair value of the non-controlling interest acquired. The fair value of $13 million was determined by calculating the present value of future cash flows for the non-controlling interest. Significant assumptions inherent in the valuation of the non-controlling interest include the estimated after-tax cash flows expected to be received and an assessment of the appropriate discount rate. The goodwill represents intellectual capital and the acquired assembled work force, none of which qualify for recognition as a separate intangible asset. The value of goodwill has been allocated to the reporting units on a relative fair value approach (see "Note 6—Goodwill"). Of the total goodwill, $414 million is tax deductible. The Company identified $1.2 billion of intangible assets, representing program and contract intangibles, backlog and software and technology. The fair value measurements were primarily based on significant inputs that are not observable in the market and represent a Level 3 measurement (see "Note 5—Fair Value Measurements"). The income approach was primarily used to value the intangible assets, consisting primarily of acquired program and contract intangibles and backlog. The income approach indicates value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flow is discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money. The following table summarizes the fair value of intangible assets acquired at the date of acquisition and the related weighted average amortization period: Weighted average amortization period Fair value (in years) (in millions) Program and contract intangibles (1) 9.7 $ 1,011 Backlog 1.8 157 Software and technology (1) 4.6 26 Total 8.6 $ 1,194 (1) The weighted average amortization period is estimated based on the projected economic benefits associated with these assets. Refer to "Note 7—Intangible Assets" for additional information. The Company incurred the following expenses related to the acquisition and integration of the IS&GS Business: 12 Months Ended December 29, December 30, (in millions) Acquisition costs $ 25 $ 44 Integration costs 77 46 Total acquisition and integration costs $ 102 $ 90 On January 10, 2018, the final net working capital of the IS&GS Business as of the closing date of the Transactions was finally determined through a binding arbitration proceeding in accordance with the Separation Agreement with Lockheed Martin. As a result, $24 million was recorded as acquisition costs in the consolidated statements of income for fiscal 2017. On January 18, 2018, the final working capital adjustment amount of $105 million was paid to Lockheed Martin. Pro Forma Financial Information (unaudited) The following pro forma financial information presents consolidated results of operations as if the acquisition had occurred on January 31, 2015. The pro forma financial information was prepared based on historical financial information and has been adjusted to give effect to the events that are directly attributable to the Transactions and factually supportable. The pro forma results below do not reflect future events that have occurred or may occur after the Transactions, including anticipated synergies or other expected benefits that may be realized from the Transactions. The pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had been completed on January 31, 2015, nor is it intended to be an indication of future operating results. 12 Months Ended 11 Months Ended (unaudited) December 30, January 1, (in millions, except for per share amounts) Revenues $ 10,443 $ 9,868 Income from continuing operations 340 336 Income from continuing operations attributable to Leidos common stockholders 335 331 Earnings per share: Basic $ 2.23 $ 2.21 Diluted $ 2.20 $ 2.19 The unaudited pro forma financial information above excludes acquisition-related costs of $44 million for fiscal 2016 and includes these costs within the 11-month period ended January 1, 2016 as a nonrecurring significant adjustment. This adjustment was made to account for certain costs incurred as if the Transactions had been completed on January 31, 2015. |
Divestitures
Divestitures | 12 Months Ended |
Dec. 29, 2017 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Divestitures In April 2016, the Company's Civil segment disposed of a business that was primarily focused on providing design, build and heavy construction engineering services. The Company received cash proceeds of $23 million , resulting in a preliminary pre-tax gain on sale of $3 million . The major classes of assets and liabilities sold included $73 million of accounts receivable, net; $3 million of non-current assets and $63 million of accounts payable and accrued liabilities. In addition, the Company recorded a $6 million liability in connection with issuance of a performance guarantee on a contract and guarantee of collection of the accounts receivables transferred. The Company paid $1 million of selling costs related to the transaction. The Company recorded the pre-tax gain on sale in " Other (expense) income, net " in the Company's consolidated statements of income. Plainfield Renewable Energy Holdings LLC Plainfield Renewable Energy Holdings LLC ("Plainfield") is a 37.5 megawatt biomass-fueled power plant in Plainfield, Connecticut (the "plant"). In March 2015, the Company entered into a definitive Membership Interest Purchase Agreement (the "Agreement") to sell 100% of its equity membership interest in Plainfield. During the quarter ended July 3, 2015, further negotiations occurred related to the sale of Plainfield resulting in an approximate $29 million impairment charge. The Company adjusted the carrying values of Plainfield's assets to their fair values based on the estimated selling price of the business pursuant to the terms of the Agreement that was amended on July 17, 2015 (Level 1). The Company recorded these tangible asset impairment charges in "Asset impairment charges" in the Company's consolidated statements of income. On July 24, 2015, the Company completed the sale of its equity interests in Plainfield for an aggregate consideration of $102 million , subject to certain adjustments, and contingent earn-out payments. The consideration received at closing consisted of a cash payment of $29 million (the "Closing Payment") and a secured promissory note for $73 million (the "Note"). The sale resulted in an immaterial deferred gain. In addition to the Closing Payment and the Note, the Company is eligible to receive certain contingent earn-out payments not to exceed $30 million . The Company will recognize any consideration for the contingent earn-out payments when received. In conjunction with the sale of the plant, the Company paid $2 million of the purchase price contingent consideration accrued at January 30, 2015, based on the successful sale of the plant. The remaining accrued contingent consideration was released and not paid as the selling price did not meet the qualifications for the payment of the remaining contingent consideration. The original maturity date of the Note is July 24, 2017 (the "Original Maturity Date"), with an option to extend the maturity date for three consecutive one-year periods. The annual interest rate of 6% will increase to 8% if the maturity date is extended beyond July 24, 2017, and will increase to 9% if extended beyond July 24, 2019. The first payment of accrued and unpaid interest was due January 24, 2016, with subsequent payments occurring every six months, including a portion of the principal balance. The note allows for a six-month deferral of certain payments due in January 2016 and July 2016. In January 2016 and July 2016, the Company was notified by the buyer that the interest payment due on January 24, 2016, would be deferred to the next payment date, and a portion of the principal payment due on July 24, 2016, would be deferred to the next payment due date. During the quarter ended June 30, 2017, Plainfield exercised the first of three one -year term extension options available under the original credit agreement, thereby extending the maturity date of the Note to July 24, 2018. Concurrent with this extension, the interest rate on the Note increased from 6% to 8% . Also, during the quarter ended June 30, 2017, Leidos and Plainfield entered into an amendment to the Note allowing Plainfield to defer up to $4 million of the interest and principal payments due in July 2017 and January 2018 until July 2018. In consideration of this deferment, Leidos received certain concessions and releases from obligations under the original transaction documents. The Company collected $6 million of principal and interest each year during fiscal 2016 and fiscal 2017. Payments under the Note are secured by a general security interest in the personal property of Plainfield, a pledge of the membership interests of Plainfield and a first mortgage on the real property that comprises the plant. Subsequent to fiscal 2017, the Company entered into negotiations with the equity owners of Plainfield LLC regarding the Plainfield Recapitalization Plan ("Plan"). The proposed Plan envisions raising new equity combined with reduction of Plainfield's debt and, consequently, would cause impairment of Leidos' note receivable. The net realizable value of the Note, at December 29, 2017, is estimated to be approximately $40 million , compared to its carrying value of $73 million , including accrued interest. As a result, the Company recorded a $33 million impairment of its Note, which is presented within " Other (expense) income, net " in the Company's consolidated statements of income. Prior to the divestiture of Plainfield, the Company received a cash grant of $80 million from the U.S. Treasury Department, which contains a recapture provision that could require the Company to repay funds to the Treasury in certain circumstances. As outlined in the amended Agreement, the buyer represents to the Company that it meets the definition of a qualified buyer in regards to the terms in the U.S. Treasury cash grant. During the remaining recapture period, which ends in December 2018, the buyer and any following acquired companies, including any transferred membership interests to these companies, is contractually obligated to remain a qualified buyer, and the buyer shall cause any transferee of the plant permitted under the Agreement to enter into a written agreement to be jointly liable for any recapture event. In addition, the buyer and any continuing membership interests to acquired companies shall operate the plant as an "open-loop biomass" facility in accordance with Section 1603 of the cash grant, timely file all reports related to Section 1603 and indemnify the Company for any liabilities incurred that may arise if these obligations are breached. Based on the indemnification in the Agreement, and since the onus is on the buyer to comply with the conditions of the grant, the Company has deemed a recapture event not probable; therefore, has not recorded a liability associated with a potential recapture of the grant. Separation of New SAIC The Company completed the spin-off of New SAIC on September 27, 2013. The spin-off was made pursuant to the terms of a Distribution Agreement and several other agreements entered into between the Company and New SAIC on September 25, 2013. These agreements set forth, among other things, the principal actions needed to be taken in connection with the separation and govern certain aspects of the relationship between the Company and New SAIC following the separation. These agreements generally provide with certain exceptions, that each party is responsible for its respective assets, liabilities and obligations, including employee benefits, insurance and tax related assets and liabilities, whether accrued or contingent, except that unknown liabilities will be shared between the parties in certain circumstances. The agreements also describe the party's commitments to provide each other with certain services for a limited time to help ensure an orderly transition. The agreements also include the treatment of existing contracts, proposals, and teaming arrangements where New SAIC will jointly perform work after separation on Leidos contracts. While the Company is a party to the Distribution Agreement and the ancillary agreements, the Company has determined that it does not have significant continuing involvement in the operations of New SAIC, nor does the Company expect significant continuing cash flows from New SAIC. The operating results of activities related to the Company's distribution agreement with New SAIC for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Revenues $ 10 $ 14 $ 17 Cost of revenues 10 14 17 Operating income $ — $ — $ — The operating results through the date of disposal of the Company's discontinued operations, excluding the spin-off of New SAIC, for fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, were immaterial. The major classes of assets and liabilities included in discontinued operations through the date of disposal for the periods presented are immaterial for disclosure purposes. |
Restructuring Expenses
Restructuring Expenses | 12 Months Ended |
Dec. 29, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Expenses | Restructuring Expenses IS&GS Business Acquisition After the acquisition of the IS&GS Business, the Company began an initiative to align its cost structure, which includes optimization of its real estate portfolio by vacating certain facilities and consolidating others, and by reducing headcount. The restructuring expenses related to this program were as follows: 12 Months Ended December 29, December 30, (in millions) Severance costs $ 18 $ 10 Lease termination expenses 19 2 Restructuring expenses related to the IS&GS Business in operating income $ 37 $ 12 These restructuring expenses have been recorded within Corporate and presented separately within "Restructuring expenses" on the consolidated statements of income. The related restructuring liability related to this program was as follows: Severance Costs Lease Termination Expenses Total (in millions) Balance as of January 1, 2016 $ — $ — $ — Charges 10 2 12 Cash payments (3 ) (1 ) (4 ) Balance as of December 30, 2016 7 1 8 Charges 18 19 37 Cash payments (20 ) (16 ) (36 ) Balance as of December 29, 2017 $ 5 $ 4 $ 9 The Company expects the remainder of the restructuring liability to be substantially settled within one year . |
Fair Value Measurements (Notes)
Fair Value Measurements (Notes) | 12 Months Ended |
Dec. 29, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company's financial assets measured on a recurring basis at fair value consisted of the following: December 29, 2017 December 30, 2016 Carrying value Fair value Carrying value Fair value (in millions) Derivatives $ 37 $ 37 $ 29 $ 29 The Company's derivatives consisted of the fair value interest rate swaps on its $450 million fixed rate 4.45% senior secured notes maturing in December 2020, and cash flow interest rate swaps on $1.5 billion of the Company's variable rate senior secured term loans (see "Note 11—Derivative Instruments"). The fair value of the fair value interest rate swaps and cash flow interest rate swaps is determined based on observed values for underlying interest rates on the LIBOR yield curve and the underlying interest rate, respectively (Level 2 inputs). The carrying amounts of the Company's financial instruments, other than derivatives, which include cash equivalents, accounts receivable, accounts payable and accrued expenses, are reasonable estimates of their related fair values. The carrying value of the Company's notes receivable (see "Note 3—Divestitures" and "Note 18—Leases") of $63 million and $92 million as of December 29, 2017, and December 30, 2016, respectively, approximates fair value as the stated interest rates within the agreements are consistent with the current market rates used in notes with similar terms in the market (Level 2 inputs). As of December 29, 2017, and December 30, 2016, the fair value of debt was $3.2 billion and $3.3 billion , respectively, and the carrying amount was $3.1 billion and $3.3 billion , respectively (see "Note 12—Debt"). The fair value of long-term debt is determined based on current interest rates available for debt with terms and maturities similar to the Company's existing debt arrangements (Level 2 inputs). At December 29, 2017, the Company did not have any assets or liabilities measured at fair value on a non-recurring basis. At December 30, 2016, the Company had non-financial instruments measured at fair value on a non-recurring basis in connection with the acquisition of Lockheed Martin's IS&GS Business. Refer to "Note 2—Acquisitions" for the final fair values of the assets acquired and liabilities assumed. |
Goodwill
Goodwill | 12 Months Ended |
Dec. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill During fiscal 2017, the Company completed its business reorganization, which resulted in identification of three reportable segments (Defense Solutions, Civil and Health). Additionally, the Company separately presents the costs associated with corporate functions as Corporate. The Company commenced operating and reporting under the new organizational structure effective the beginning of fiscal 2017 (see "Note 20—Business Segments"). Goodwill, including the amounts from the acquisition of the IS&GS Business, was allocated to the reporting units on a relative fair value approach. The following table presents changes in the carrying amount of goodwill by reportable segment: Defense Solutions Civil Health Total (in millions) Goodwill at January 1, 2016 (1) $ 792 $ 244 $ 171 $ 1,207 Acquisition of the IS&GS Business 1,162 1,487 766 3,415 Goodwill at December 30, 2016 (1) 1,954 1,731 937 4,622 Adjustment to original purchase price allocation 94 259 (16 ) 337 Foreign currency translation adjustments 7 8 — 15 Goodwill at December 29, 2017 (1) $ 2,055 $ 1,998 $ 921 $ 4,974 (1) Carrying amount includes accumulated impairment losses of $369 million and $117 million within the Health and Civil segments, respectively. See "Note 2—Acquisitions" for the description of adjustments to the original purchase price allocation. In conjunction with the change in reportable segments, the Company evaluated goodwill for impairment, both before and after the segment change and determined that goodwill was not impaired. Based on a qualitative analysis performed during the Company's annual impairment evaluation for fiscal 2016 and the 11-month period ended January 1, 2016, for certain of its reporting units, it was determined that it is more likely than not that the fair values of the reporting units were in excess of the individual reporting unit carrying values. In fiscal 2017, the company performed a quantitative analysis, see "Note 1—Summary of Significant Accounting Policies," for all reporting units. It was determined that the fair values of all individual reporting units exceeded their carrying values. As a result, no goodwill impairments were identified as part of the annual goodwill impairment evaluation for the periods mentioned above. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets Intangible assets consisted of the following: December 29, 2017 December 30, 2016 Gross Accumulated Net Gross Accumulated Net (in millions) Finite-lived intangible assets: Program and contract intangibles $ 1,013 $ (187 ) $ 826 $ 1,450 $ (25 ) $ 1,425 Backlog 158 (158 ) — 200 (54 ) 146 Software and technology 89 (64 ) 25 61 (48 ) 13 Customer relationships 4 (3 ) 1 6 (5 ) 1 Total finite-lived intangible assets 1,264 (412 ) 852 1,717 (132 ) 1,585 Indefinite-lived intangible assets: Trade names 4 — 4 4 — 4 Total intangible assets $ 1,268 $ (412 ) $ 856 $ 1,721 $ (132 ) $ 1,589 Amortization expense related to intangible assets, including those acquired through the Transactions, was $281 million , $84 million and $8 million for fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, respectively. The acquired program and contract, and software and technology intangible assets are amortized over their respective estimated useful lives in proportion to the pattern of economic benefit based on expected future discounted cash flows. The acquired backlog intangible assets, as well as the Company's existing customer relationships and software and technology intangible assets, are amortized on a straight-line basis over their estimated useful lives. The estimated annual amortization expense related to finite-lived intangible assets as of December 29, 2017, is as follows: Fiscal Year Ending (in millions) 2018 $ 202 2019 172 2020 128 2021 106 2022 92 2023 and thereafter 152 $ 852 Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, the outcome and timing of completion of in-process research and development projects and other factors. |
Receivables
Receivables | 12 Months Ended |
Dec. 29, 2017 | |
Receivables [Abstract] | |
Receivables | Receivables The components of receivables, net consisted of the following: December 29, December 30, (in millions) Billed receivables $ 771 $ 847 Unbilled receivables 1,074 821 Allowance for doubtful accounts (14 ) (11 ) $ 1,831 $ 1,657 |
Property Plant and Equipment
Property Plant and Equipment | 12 Months Ended |
Dec. 29, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, net consisted of the following: December 29, December 30, (in millions) Computers and other equipment $ 194 $ 172 Leasehold improvements 171 161 Buildings and improvements 54 104 Office furniture and fixtures 34 35 Land 49 57 Construction in progress 44 12 546 541 Less: accumulated depreciation and amortization (314 ) (282 ) $ 232 $ 259 The change related to Buildings and improvements relates to valuation adjustments as a result of the acquisition of the IS&GS Business, see "Note 2—Acquisitions". Depreciation expense was $55 million , $38 million and $33 million for fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, respectively. During the 11-month period ended January 1, 2016, the Company amended its sale agreement entered into in 2013 and closed the sale of the remaining building, parcels of land that surround the building and the multi-level surface parking garage associated with the Company's former headquarters. The sale resulted in a write-off of $40 million in aggregate net book value of assets disposed, including $29 million for buildings and $10 million attributed to land. See "Note 18—Leases" for further information regarding the sale of the Company's former headquarters. |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 12 Months Ended |
Dec. 29, 2017 | |
Disclosure Schedule Of Certain Financial Statement Captions [Abstract] | |
Composition of Certain Financial Statement Captions | Composition of Certain Financial Statement Captions Balance Sheet December 29, December 30, (in millions) Inventory, prepaid expenses and other current assets: Prepaid expenses $ 90 $ 90 Inventory 76 67 Pre-contract costs 64 33 Transition costs and project assets 59 62 Prepaid income taxes and tax refunds receivable 54 13 Short-term notes receivable 40 3 Restricted cash 32 20 Other 38 60 $ 453 $ 348 Other assets: Investment in rabbi trust $ 58 $ 48 Derivatives 37 29 Equity method investments (1) 37 20 Deferred costs 24 31 Long-term notes receivables 23 89 Other 75 48 $ 254 $ 265 Accounts payable and accrued liabilities: Accrued liabilities $ 747 $ 493 Accounts payable 557 591 Collections in excess of revenues and deferred revenue 293 246 Tax indemnity liability 23 — Provision for loss contracts 19 97 $ 1,639 $ 1,427 Accrued payroll and employee benefits: Salaries, bonuses and amounts withheld from employees’ compensation $ 245 $ 211 Accrued vacation 236 244 Accrued contributions to employee benefit plans 6 28 $ 487 $ 483 Other long-term liabilities: Deferred compensation $ 56 $ 48 Lease related obligations 33 37 Deferred revenue 17 20 Liabilities for uncertain tax positions 7 5 Tax indemnity liability 1 31 Accrued pension liabilities — 6 Other 15 57 $ 129 $ 204 (1) Net of $30 million and $10 million of dividends received during fiscal 2017 and fiscal 2016, respectively, that were recorded in cash flows provided by operating activities of continuing operations on the consolidated statements of cash flows. 12 Months Ended 11 Months Ended Income Statement December 29, December 30, January 1, (in millions) Other (expense) income, net Promissory note impairment $ (33 ) $ — $ — Gain (loss) on foreign currency 5 (18 ) — Gain on sale of former headquarters — — 82 Other income, net 2 5 2 $ (26 ) $ (13 ) $ 84 |
Derivative Instruments
Derivative Instruments | 12 Months Ended |
Dec. 29, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments Fair Value Hedges The Company has interest rate swap agreements to hedge the fair value of the $450 million fixed rate 4.45% senior secured notes maturing in December 2020 (the "Notes"). The objective of these instruments is to hedge the Notes against changes in fair value due to the variability in the six-month LIBOR rate (the benchmark interest rate). Under the terms of the interest rate swap agreements, the Company will receive semi-annual interest payments at the coupon rate of 4.45% and will pay variable interest based on the six-month LIBOR rate. The interest rate swaps were accounted for as a fair value hedge of the Notes and qualified for the shortcut method of hedge accounting, which allows for the assumption of no ineffectiveness reported in earnings. The resulting changes in the fair value of the interest rate swaps are fully offset by the changes in the fair value of the underlying debt (the hedged item). The fair value of the Notes is stated at an amount that reflects changes in the six-month LIBOR rate subsequent to the inception of the interest rate swaps through the reporting date. Cash Flow Hedges In August 2016, the Company entered into interest rate swap agreements to hedge the cash flows with respect to $1.2 billion of the Company's variable rate senior secured term loans (the "Variable Rate Loans"). In September 2017, the Company entered into interest rate swap agreements to hedge the cash flows of an additional $300 million of its Variable Rate Loans. The objective of these instruments is to reduce variability in the forecasted interest payments of the Company's Variable Rate Loans, which is based on the LIBOR rate. Under the terms of the interest rate swap agreements, the Company will receive monthly variable interest payments based on the one-month LIBOR rate and will pay interest at a fixed rate. The interest rate swap agreements on $1.2 billion and $300 million of the Company's Variable Rate Loans have a maturity date of December 2021 and August 2022, respectively, and a fixed interest rate of 1.08% and 1.66% , respectively. The counterparties to these agreements are financial institutions. The interest rate swaps were accounted for as cash flow hedges of the Variable Rate Loans and qualified for hedge accounting treatment through the application of the long-haul method, which involves the comparison of cumulative changes in the fair value of the swap to the cumulative change in fair value of scheduled interest payments on the notional value (the perfectly effective hypothetical or "PEH"). The effective portion of the gain/loss on the swap is reported as a component of other comprehensive income/loss and will be reclassified into earnings on the dates the interest payments impact earnings. The amount of ineffectiveness recorded in earnings is equal to the excess of the cumulative change in fair value of the swap over the cumulative change in the fair value of the PEH. The fair value of the interest rate swaps was as follows: Balance sheet line item December 29, December 30, (in millions) Fair value interest rate swaps Other assets $ — $ 3 Cash flow interest rate swaps Other assets 37 26 $ 37 $ 29 The fair value adjustment to the fair value interest rate swap and the underlying debt was a decrease of $3 million and $5 million for the year ended December 29, 2017, and December 30, 2016, respectively. The effect of the Company's cash flow hedges on other comprehensive income and earnings for the periods presented was as follows: 12 Months Ended December 29, December 30, (in millions) Effective portion recognized in other comprehensive income $ 10 $ 22 Effective portion reclassified from accumulated other comprehensive income (loss) to interest expense — 2 Ineffective portion recognized in other (expense) income, net 1 2 The Company expects to reclassify gains of $8 million from accumulated other comprehensive income (loss) into earnings during the next 12 months. The cash flows associated with the interest rate swaps are classified as operating activities in the consolidated statements of cash flows. |
Debt
Debt | 12 Months Ended |
Dec. 29, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company's debt consisted of the following: Stated Effective December 29, 2017 (1) December 30, 2016 (1) (in millions) Senior secured notes: $450 million notes, due December 2020 4.45 % 4.53 % $ 449 $ 451 $300 million notes, due December 2040 5.95 % 6.03 % 216 216 Senior secured term loans: $400 million Term Loan A, due August 2019 — % — % — 123 $690 million Term Loan A, due August 2022 3.13 % 3.61 % 644 676 $310 million Term Loan A, due August 2022 3.13 % 3.60 % 270 304 $1,131 million Term Loan B, due August 2023 3.38 % 3.74 % 1,101 1,110 Senior unsecured notes: $250 million notes, due July 2032 7.13 % 7.43 % 246 246 $300 million notes, due July 2033 5.50 % 5.88 % 158 158 Capital leases and notes payable due on various dates through fiscal 2022 0%-5.55% Various 27 3 Total long-term debt 3,111 3,287 Less: current portion 55 62 Total long-term debt, net of current portion $ 3,056 $ 3,225 (1) The carrying amounts of the senior secured term loans and notes and unsecured notes as of December 29, 2017, and December 30, 2016, include the remaining principal outstanding of $3,129 million and $3,336 million , respectively, plus an immaterial amount and $3 million , respectively, related to the fair value of the interest rate swaps (see "Note 11—Derivative Instruments"), less unamortized debt discounts of $35 million and $46 million , respectively, less deferred debt issuance costs of $10 million and $9 million , respectively. Senior Secured Notes During the 11-month period ended January 1, 2016, the Company repurchased in the open market and retired principal amounts of $14 million on its $300 million 5.95% notes, due December 2040. Senior Secured Term Loans On August 16, 2016, in connection with the acquisition of the IS&GS Business, Leidos, Inc. secured a new term loan of $690 million . In addition, as a result of the acquisition, Leidos assumed the IS&GS Business' term loans of $1.8 billion , which were obtained by the IS&GS Business immediately prior to the Transactions (see "Note 2—Acquisitions"). The outstanding obligations under the term loans are secured by a first priority lien on substantially all of the assets of the Company, subject to certain exceptions set forth in the credit agreements and related documentation. In February 2017, Leidos amended the terms of its senior secured $1.1 billion Term Loan B, due August 2023. As a result, the margin on Term Loan B was reduced by 50 basis points to 2.25% and the six month call provision was extended an additional six months. The repricing of the term loan became effective on February 16, 2017. In August 2017, Leidos amended its senior secured term loans and revolving credit facility agreements. These amendments reduced the applicable margins for the revolving credit facility and Term Loans A and B each by 25 basis points. Additionally, the maturity date for the revolving credit facility, $690 million Term Loan A and $310 million Term Loan A were each extended by one year to August 2022, and the scheduled increase in quarterly principal payments for both of these term loans was delayed one year to March 2020. The amendments also include a collateral suspension provision that will permit the secured credit agreements to become unsecured under certain circumstances. The interest rate on the Company's senior secured term loans is determined based on the LIBOR rate plus a margin. The margin for the Term Loan A loans ranges from 1.50% to 2.00% , depending on the Company's senior secured leverage ratio, and is computed on a quarterly basis. At December 29, 2017, the current margin on Term Loan A was 1.75% and the margin on Term Loan B was 2.00% . As part of the credit agreements, the Company is required to perform a calculation each quarter that determines the incremental available amount of funds the Company is permitted to use towards investments relating to mergers and acquisitions, investments in joint ventures, repayment of outstanding debt and restricted payments relating to dividends and share repurchases. The incremental available amount is calculated as $35 million plus a portion of certain cash proceeds, multiplied by a percentage tied to the Company's senior secured leverage, which is added to an annual fixed amount of $250 million , as defined in the credit agreements. The constraints associated with use of cash are reduced and/or eliminated based on the Company's total leverage ratio. The Company is also required to perform an excess cash flow calculation annually that determines the additional amount of debt prepayments the Company is required to make during the first quarter of the following fiscal year, with the first payment occurring in 2018. The excess cash flow is calculated based on the Company's consolidated net income as of the end of the fiscal year plus or minus adjustments for certain non-cash items and incurred and expected cash payments, as defined in the credit agreements. The amount of the excess cash flow that the Company is required to use to prepay the loans is based upon the Company's senior secured leverage ratio. The required debt prepayment amount is equal to 50% of the excess cash flow calculated if the senior secured leverage ratio is greater than 2.75 and is equal to 25% of the excess cash flow calculated if the ratio is between 2.75 and 2.00 . No additional debt prepayment is required if the senior secured leverage ratio is less than 2.00 . During fiscal 2017, the Company made $76 million of required quarterly payments on its term loans. In addition to the required quarterly payments, the Company prepaid $130 million and $275 million of its term loans during fiscal 2017 and fiscal 2016, respectively. Associated with these early repayments, $2 million and $5 million during fiscal 2017 and fiscal 2016, respectively, of unamortized debt discount and deferred financing costs were written off and recorded to " Other (expense) income, net " in the Company's consolidated statements of income. Senior Unsecured Notes During the 11-month period ended January 1, 2016, the Company repurchased in the open market and retired principal amounts of $23 million on its $300 million 5.50% notes, due July 2033. The Company recorded a $1 million gain on extinguishment of debt as part of the partial repayment of the notes. The gain represents the difference between the repurchase price amounts of $22 million and the net carrying amount of the notes. The net carrying amount was reduced by the write-off of a portion of the unamortized debt discount and deferred financing costs on a pro-rata basis to the reduction of debt. The Company recorded the gain on extinguishment of debt in " Other (expense) income, net " in the Company's consolidated statements of income. Principal payments are made quarterly on the Company's variable rate senior secured term loans, with the majority of the principal due at maturity. Interest on the variable rate senior secured term loans is payable on a periodic basis, which must be at least quarterly. Interest on the senior fixed rate secured notes and unsecured notes is payable on a semi-annual basis with principal payments due at maturity. In connection with the new senior secured term loans, the Company recognized $53 million of debt discount and debt issuance costs, which were recorded as an offset against the carrying value of debt and will be amortized to interest expense over the term of the term loans. The Company also recognized $15 million of origination costs related to the new credit facility (see "Revolving Credit Facility" below), which were capitalized within "Other assets" in the consolidated balance sheets. Amortization for the senior secured term loans and notes, unsecured notes and revolving credit facility was $13 million , $6 million and $1 million for fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, respectively. The senior secured term loans and notes, unsecured notes and revolving credit facility are fully and unconditionally guaranteed by intercompany guarantees. The senior secured term loans and notes and unsecured notes contain certain customary restrictive covenants, including among other things, restrictions on the Company's ability to create liens and enter into sale and leaseback transactions under certain circumstances. The Company was in compliance with all covenants as of December 29, 2017. Future minimum payments of debt are as follows: Fiscal Year Ending (in millions) 2018 $ 55 2019 71 2020 582 2021 113 2022 642 2023 and thereafter 1,693 Total principal payments 3,156 Less: unamortized debt discount and issuance costs (45 ) Total long-term debt $ 3,111 Revolving Credit Facility On August 16, 2016, Leidos, Inc. entered into a revolving credit facility providing up to $750 million in secured borrowing capacity at interest rates determined based upon the LIBOR rate plus a margin that is subject to step-down provisions based on the Company's senior secured leverage ratio. The new credit facility replaced the previous $500 million credit facility that was set to expire in March 2018 . The maturity date of the new credit facility is August 2021 . During fiscal 2017 and fiscal 2016, there were no borrowings under the new credit facility. The credit agreements contain certain customary representations and warranties, as well as certain affirmative and negative covenants. The financial covenants define the debt-to-EBITDA ratio that the Company needs to maintain at the end of each quarter. The Company maintains a ratio of total senior secured debt, including borrowings under this credit facility, to the trailing four quarters of EBITDA (adjusted for certain items as defined in the credit facility) of not more than 4.75 prior to February 16, 2018, 4.25 from February 16, 2018, to February 16, 2019, and 3.75 thereafter. The Company was in compliance with these financial covenants as of December 29, 2017. Other covenants in the credit facility restrict certain of the Company's activities, including, among other things, its ability to create liens, dispose of certain assets and merge or consolidate with other entities. The credit facility also contains certain customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events, nonpayment, cross-defaults to other debt, breach of specified covenants, Employee Retirement Income Security Act (ERISA) events, material monetary judgments, change of control events, and the material inaccuracy of the Company’s representations and warranties. Notes Payable During fiscal 2017, the Company recognized $21 million of notes payable related to secured borrowings associated with certain contracts within its commercial energy business. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 12 Months Ended |
Dec. 29, 2017 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Accumulated Other Comprehensive Income (Loss) Changes in the components of accumulated other comprehensive income (loss) were as follows: Foreign currency translation adjustments Unrecognized (loss) gain on derivative instruments Pension liability adjustments Total accumulated other comprehensive income (loss) (in millions) Balance at January 30, 2015 $ 1 $ (5 ) $ (7 ) $ (11 ) Other comprehensive (loss) income (1 ) 1 5 5 Taxes — — (2 ) (2 ) Balance at January 1, 2016 — (4 ) (4 ) (8 ) Other comprehensive (loss) income (8 ) 26 1 19 Taxes 1 (10 ) 2 (7 ) Reclassification from accumulated other comprehensive income (loss) — (2 ) (6 ) (8 ) Balance at December 30, 2016 (7 ) 10 (7 ) (4 ) Other comprehensive income 36 10 9 55 Taxes (12 ) (6 ) — (18 ) Balance at December 29, 2017 $ 17 $ 14 $ 2 $ 33 Reclassifications for unrecognized (loss) gain on derivative instruments associated with outstanding debt are recorded in "Interest expense" in the Company's consolidated statements of income. Reclassifications for pension liability adjustments are recorded in "Selling, general and administrative expenses" in the Company's consolidated statements of income. |
Earnings Per Share (EPS)
Earnings Per Share (EPS) | 12 Months Ended |
Dec. 29, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share (EPS) | Earnings Per Share ("EPS") Basic EPS is computed by dividing income attributable to Leidos stockholders by the basic weighted average number of shares outstanding. Diluted EPS is computed similar to basic EPS, except the weighted average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards. The Company issues unvested stock awards that have forfeitable rights to dividends or dividend equivalents. These stock awards are dilutive common share equivalents subject to the treasury stock method. The weighted average number of shares used to compute basic and diluted EPS attributable to Leidos stockholders were: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Basic weighted average number of shares outstanding 152 102 73 Dilutive common share equivalents—stock options and other stock awards 2 2 1 Diluted weighted average number of shares outstanding 154 104 74 Share repurchases In the 11-month period ended January 1, 2016, the Company entered into an Accelerated Share Repurchase ("ASR") agreement with a financial institution to repurchase shares of its outstanding common stock for an aggregate purchase price of $100 million . During the second quarter of the 11-month period ended January 1, 2016, the Company paid $100 million to the financial institution and received a total delivery of 2.4 million shares of its outstanding shares of common stock. The purchase was allocated between additional paid in capital and retained earnings. All shares delivered were immediately retired. The total amount of shares delivered by the financial institution was adjusted by the volume weighted average price of the Company's stock over the valuation period specified in the ASR. The delivery of 2.4 million shares of Leidos common stock related to ASR purchases for the 11-month period ended January 1, 2016, reduced the Company's outstanding shares used to determine the weighted average shares outstanding for purposes of calculating basic and diluted EPS. There were no open market repurchases during fiscal 2017 and fiscal 2016. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 29, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation Plan Summaries As of December 29, 2017, the Company had stock-based compensation awards outstanding under the following plans: the 2017 Omnibus Incentive Plan, 2006 Equity Incentive Plan, as amended, and the 2006 Employee Stock Purchase Plan, as amended ("ESPP"). Leidos issues new shares upon the issuance of the vesting of stock units or exercise of stock options under these plans. In fiscal 2017, stockholders approved the 2017 Omnibus Incentive Plan which provides the Company and its affiliates' employees, directors and consultants the opportunity to receive various types of stock-based compensation and cash awards. As of December 29, 2017, the Company has issued stock options, restricted stock units, performance-based awards and cash awards under this plan to employees and directors. Service-based awards granted under the plan prior to fiscal 2015 generally vest or become exercisable 20% a year for the first three years and 40% in the fourth year. In fiscal 2015, the Company began granting awards that generally vest or become exercisable 25% a year over four years or cliff vest in three years. As of December 29, 2017, 5.3 million shares of Leidos' stock were reserved for future issuance under the 2017 Omnibus Incentive Plan and the 2006 Equity Incentive Plan. The Company has a Management Stock Compensation Plan and a Stock Compensation Plan, together referred to as the Stock Compensation Plans. These plans provided for the issuance of restricted share units to eligible employees. Benefits from these plans are payable in shares of Leidos' stock that are held in a trust for the purpose of funding shares to the plans' participants. All awards under these plans are fully vested and awards have not been issued under these plans since 2012. The Stock Compensation Plans do not provide for a maximum number of shares available for future issuance. In fiscal 2017, stockholders approved the amended ESPP which allows eligible employees to purchase shares of Leidos' stock at a discount of up to 15% of the fair market value on the date of purchase. During fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, the discount was 5% of the fair market value on the date of purchase, thereby resulting in the ESPP being non-compensatory. A total of 4.8 million shares remain available for future issuance under the Company's Amended and Restated 2006 ESPP. Stock-based compensation and related tax benefits recognized under all plans were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Total stock-based compensation expense $ 43 $ 35 $ 30 Tax benefits recognized from stock-based compensation $ 17 $ 14 $ 12 Stock Options Stock options are granted with exercise prices equal to the fair market value of Leidos' common stock on the date of grant and for terms not greater than ten years. Beginning in fiscal 2012, stock options granted under the 2006 Equity Incentive Plan have a term of seven years and a vesting period of four years, except for stock options granted to the Company's outside directors, which have a vesting period of the earlier of one year from grant date or the next annual meeting of stockholders following grant date. The fair value of the Company's stock option awards is estimated on the date of grant using the Black-Scholes-Merton option-pricing model. The fair value of the Company's stock option awards is generally expensed on a straight-line basis over the vesting period of four years, except for stock options granted to the Company's outside directors, which is recognized over the vesting period of one year or less. During the 11-month period ended January 1, 2016, the expected volatility was estimated using a blended volatility method for a period consistent with the expected term, based more significantly on the weighted average historical volatility of a group of publicly-traded peer companies and the weighted average implied volatility from traded options on Leidos stock for a time period prior to the grant date. During fiscal 2016, expected volatility was based on using a blended approach, which included weighted average historical volatility of a group of publicly-traded peer companies, weighted average historical volatility of the Company and the weighted average implied volatility. The expected volatility increased, from pre-acquisition to post-acquisition of the IS&GS Business in fiscal 2016, due to a higher allocation of peer group volatility used post-acquisition compared to a higher allocation of historical volatility used pre-acquisition. The post-acquisition volatility reflected an updated peer group mix. During fiscal 2017, the Company ceased the usage of peer group volatility, as an input into its blended approach to measure expected volatility, and increased the reliance on historical volatility. The revised blended approach includes the Company's weighted average historical and implied volatilities. The risk-free rate is derived using the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the stock option on the grant date. Leidos utilizes the simplified method for the expected term, which represents an appropriate period of time that the options granted are expected to remain outstanding between the weighted-average vesting period and end of the respective contractual term. The dividend yield increased from pre-acquisition to post-acquisition due to historical stock price fluctuations. The Company uses historical data to estimate forfeitures and was derived in the same manner as in the prior years presented. The weighted average grant-date fair value and assumptions used to determine fair value of stock options granted for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, 2016 December 30, 2016 January 1, Weighted average grant-date fair value $ 11.53 $ 10.33 $ 9.54 $ 6.72 Expected term (in years) 4.7 4.7 4.8 4.7 Expected volatility 29.7 % 37.9 % 29.9 % 24.5 % Risk-free interest rate 1.9 % 1.2 % 1.3 % 1.4 % Dividend yield 2.5 % 2.7 % 2.5 % 2.9 % Special Dividend Adjustment As a result of the payment of the special cash dividend to Leidos stockholders in August 2016, Leidos modified all outstanding stock options to preserve their original grant date fair value. The modifications resulted in a reduction in the strike prices of the outstanding stock options by a factor of 0.74 and an increase in the number of shares issuable upon the exercise of each option by a factor of 1.35 between the pre-modification stock price and post-modification stock price. These adjustments did not result in additional stock-based compensation expense, as the fair value of the outstanding options immediately following the payment of the special cash dividend was equal to the fair value immediately prior to such distribution. The modifications resulted in an increase in options outstanding by 0.9 million . The special dividend declared was $993 million . As a result of the special dividend declaration, the Company accrued $29 million of dividend equivalents with respect to outstanding equity awards. The transactions associated with the special cash dividend were recorded to "Additional paid-in capital" in the consolidated balance sheets. Stock option activity for each of the periods presented was as follows: Shares of stock under stock options Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value (in millions) (in years) (in millions) Outstanding at January 30, 2015 3.6 $ 38.50 4.0 $ 14 Options granted 0.6 42.64 Options forfeited or expired (0.9 ) 42.03 Options exercised (0.9 ) 38.53 9 Outstanding at January 1, 2016 2.4 $ 38.21 4.5 $ 43 Options granted 0.6 43.56 Special dividend adjustments 0.9 Options forfeited or expired (0.2 ) 34.98 Options exercised (0.4 ) 34.11 5 Outstanding at December 30, 2016 3.3 $ 29.77 4.1 70 Options granted 0.5 53.51 Options forfeited or expired (0.2 ) 35.72 Options exercised (0.8 ) 27.23 23 Outstanding at December 29, 2017 2.8 34.38 3.9 86 Exercisable at December 29, 2017 1.6 $ 29.13 2.7 $ 56 Vested and expected to vest in the future as of December 29, 2017 2.7 $ 33.98 3.8 $ 83 As of December 29, 2017, there was $6 million of unrecognized compensation cost, net of estimated forfeitures, related to stock options, which is expected to be recognized over a weighted-average period of 2.3 years. The following table summarizes activity related to exercises of stock options: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Tax benefits from stock options exercised $ 7 $ 1 $ 1 Fair value of stock surrendered in payment of the exercise price for stock options exercised $ 2 $ 4 $ 3 Cash received from exercises of stock options $ 2 $ — $ — Restricted Stock Units and Awards Compensation expense is measured at the grant date fair value and generally recognized over the vesting period of four years based upon required service conditions and in some cases revenue-based performance conditions. In connection with the Transactions (see "Note 2—Acquisitions"), the Company issued 0.6 million replacement restricted stock units valued at $23 million , of which $9 million was allocated as purchase consideration attributed to pre-acquisition service and the remaining $12 million represents the total remaining stock-based compensation expense, net of estimated forfeitures. This remaining expense will be recognized over three years from the date of acquisition. Restricted stock units activity for each of the periods presented was as follows: Shares of stock under stock awards Weighted average grant- date fair value (in millions) Unvested stock awards at January 30, 2015 3.0 $ 38.51 Awards granted 0.5 42.95 Awards forfeited (0.4 ) 40.10 Awards vested (0.8 ) 40.05 Unvested stock awards at January 1, 2016 2.3 $ 38.97 Awards granted 1.5 41.45 Awards forfeited (0.2 ) 40.88 Awards vested (1.1 ) 38.91 Unvested stock awards at December 30, 2016 2.5 $ 40.39 Awards granted 0.8 53.91 Awards forfeited (0.3 ) 45.89 Awards vested (1.0 ) 41.02 Unvested stock awards at December 29, 2017 2.0 $ 44.96 As of December 29, 2017, there was $37 million of unrecognized compensation cost, net of estimated forfeitures, related to restricted stock units, which is expected to be recognized over a weighted average period of 2.0 years. The fair value of restricted stock units that vested in fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, was $33 million , $43 million and $29 million , respectively. In addition, the fair value of dividend equivalents with respect to restricted stock units that vested in fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016 was $13 million , $8 million and $2 million , respectively. Performance-Based Stock Awards Historically, the Company granted performance-based stock awards to certain officers and key employees of the Company under the 2006 Equity Incentive Plan. During fiscal 2017, upon stockholder approval, the Company started granting performance-based stock awards to these individuals under the 2017 Omnibus Incentive Plan. Under both plans, the Company's performance-based stock awards vest and the stock is issued at the end of a three -year period based upon the achievement of specific performance criteria, with the number of shares ultimately awarded, if any, ranging up to 150% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. For awards granted during fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, the target number of shares of stock granted under the awards will vest and the stock will be issued at the end of a three -year period based on a three -year cycle performance period and the actual number of shares to be issued will be based upon the achievement of the three -year cycle's performance criteria. Also, during fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, the Company granted performance-based awards with market conditions. These market conditions grants represent the target number of shares and the actual number of shares to be awarded upon vesting may be higher or lower depending upon the achievement of the relevant market conditions. The target number of shares granted under the market conditions grants will vest and the stock will be issued at the end of a three -year period based on the attainment of certain total shareholder return performance measures and the employee's continued service through the vest date. Performance-based stock award activity for each of the periods presented was as follows: Expected number of shares of stock to be issued under performance-based stock awards Weighted average grant- date fair value (in millions) Unvested at January 30, 2015 0.1 $ 37.70 Awards granted 0.2 44.30 Awards forfeited (0.1 ) 43.49 Unvested at January 1, 2016 0.2 $ 43.35 Awards granted 0.2 45.62 Unvested at December 30, 2016 0.4 $ 44.44 Awards granted 0.2 57.94 Awards vested (0.1 ) 42.85 Unvested at December 29, 2017 0.5 $ 50.34 The weighted average grant date fair value for performance-based stock, excluding those with a market condition, during fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016 was $53.58 , $45.83 and $43.78 , respectively. The weighted average grant date fair value for performance-based stock with market conditions that were granted during fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, was $62.30 , $45.80 and $45.00 , respectively, and was calculated using the Monte Carlo simulation. The Monte Carlo simulation assumptions used for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, Expected volatility 27.19 % 31.73 % 27.67 % Risk free rate of return 1.53 % 1.01 % 0.82 % Weighted average grant date stock price $ 53.73 $ 46.54 $ 42.61 As of December 29, 2017, there was $9 million of unrecognized compensation cost, net of estimated forfeitures, related to performance-based stock awards granted under both the 2017 Omnibus Incentive Plan and 2006 Equity Incentive Plan, which is expected to be recognized over a weighted average period of 1.8 years. The fair value of performance-based stock awards that vested in fiscal 2017 was $4 million . There were no performance-based stock awards that vested in fiscal 2016 and the 11-month period ended January 1, 2016. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 29, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In December 2017, the U.S. government enacted the Tax Act which made broad and complex changes to the U.S. tax code, including, but not limited to, (1) reducing the U.S. federal corporate tax rate from 35% to 21% ; (2) requiring companies to pay a one-time transition tax on certain unrepatriated earnings of foreign subsidiaries; (3) generally eliminating U.S. federal income taxes on dividends from foreign subsidiaries; and (4) limiting the deductibility of certain executive compensation. As a result of the Company’s analysis of the impact of the Tax Act, a discrete net tax benefit of $115 million was recorded in fiscal 2017, which primarily consists of a net benefit for the corporate rate reduction of $119 million . This rate reduction resulted in a corresponding net decrease of deferred tax liabilities. The Company's accounting for the following elements of the Tax Act is not complete: (1) deemed repatriation tax, (2) cost recovery and (3) limitation on the deductibility of certain executive compensation. However, the Company was able to make reasonable estimates and has recorded provisional amounts. The Company expects to finalize its assessment of all provisional amounts within the maximum one year measurement period. There are no material elements of the Tax Act for which the Company was unable to make a reasonable estimate. Less than 10% of the Company's income from continuing operations before income taxes for fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, was earned outside of the United States. The provision for income taxes related to continuing operations for the periods presented included the following: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Current: Federal and foreign $ 130 $ 88 $ 71 State 30 16 14 Deferred: Federal and foreign (141 ) (29 ) 20 State 10 (3 ) 7 Total $ 29 $ 72 $ 112 A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate to income from continuing operations before income taxes for the periods presented was as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Amount computed at the statutory federal income tax rate (35%) $ 138 $ 111 $ 124 Change in statutory federal tax rate (125 ) — — State income taxes, net of federal tax benefit 31 8 14 Excess tax benefits from stock-based compensation (12 ) (8 ) — Capitalized transaction costs 9 7 — Change in valuation allowance for deferred tax assets 7 (8 ) (21 ) Research and development credits (7 ) (4 ) (4 ) Dividends paid to employee stock ownership plan (4 ) (38 ) (3 ) Impact of foreign operations (4 ) — — Change in accruals for uncertain tax positions — 1 (4 ) Other (4 ) 3 6 Total $ 29 $ 72 $ 112 Effective income tax rate 7.4 % 22.6 % 31.5 % The Company's effective tax rate for fiscal 2017 was favorably impacted by the Tax Act's reduction of the federal corporate tax rate from 35% to 21% applied to the Company's fiscal 2017 year-end deferred tax balances and excess tax benefits related to employee stock-based payment transactions. The Company's effective tax rate for fiscal 2016 was favorably impacted by the tax deductibility of the special cash dividend, related to the Transactions described in “Note 2—Acquisitions,” on shares held by the Leidos retirement plan, the income tax benefits of the research tax credit and the excess tax benefits related to employee stock-based payment transactions, partially offset by the impact of certain capitalized transactions costs related to the Transactions. The Company's effective tax rate for the 11-month period ended January 1, 2016, was favorably impacted by the release of the valuation allowance related to the utilization of a capital loss carryforward for capital gains recognized during the current year and the favorable resolution of certain tax contingencies with the tax authorities. In addition, the Company's effective tax rate was favorably impacted by the research tax credit as well as the tax deduction for dividends on shares held by the Leidos Retirement Plan (an employee stock ownership plan). Deferred income taxes are recorded for differences in the basis of assets and liabilities for financial reporting purposes and tax reporting purposes. Deferred tax assets (liabilities) were comprised of the following: December 29, December 30, (in millions) Reserves $ 62 $ 103 Capital loss carryover 60 81 Accrued vacation and bonuses 54 89 Credits and net operating losses carryovers 33 35 Deferred compensation 22 38 Vesting stock awards 17 23 Deferred rent and tenant allowances 10 16 Investments 2 3 Employee benefit contributions — 3 Other 18 17 Total deferred tax assets 278 408 Valuation allowance (83 ) (102 ) Deferred tax assets, net of valuation allowance 195 306 Purchased intangible assets (340 ) (748 ) Deferred revenue (34 ) (42 ) Partnership interest (17 ) (14 ) Accumulated other comprehensive income (13 ) (8 ) Employee benefit contributions (3 ) — Fixed asset basis differences — (11 ) Other (8 ) (7 ) Total deferred tax liabilities (415 ) (830 ) Net deferred tax liabilities $ (220 ) $ (524 ) Net deferred tax assets (liabilities) were as follows: December 29, December 30, (in millions) Net non-current deferred tax assets $ — $ 16 Net non-current deferred tax liabilities (220 ) (540 ) Total net deferred tax liabilities $ (220 ) $ (524 ) At December 29, 2017, the Company had $20 million of federal net operating loss ("NOL") carryforwards and $180 million of state net operating losses, which will begin to expire in fiscal 2018. The Company also has $13 million of state tax credits, which will begin to expire in fiscal 2018. The Company expects to utilize $5 million and $71 million of these state tax credits and state net operating losses, respectively. The company also had foreign net operating losses of $35 million . The majority of the NOLs were acquired in the Transactions. As of December 29, 2017, the Company had a capital loss carryforward of $234 million , $97 million of which will begin to expire in fiscal 2018. The Company does not believe it will be able to generate capital gains to realize the benefit from the capital loss carryforward. As a result, a full valuation allowance has been provided as of December 29, 2017. The Company's unrecognized tax benefits are primarily related to certain recurring deductions customary for the Company’s industry. The changes in the unrecognized tax benefits, excluding accrued interest and penalties, were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Unrecognized tax benefits at beginning of year $ 9 $ 11 $ 17 Additions for tax positions related to current year 2 1 5 Additions for tax positions related to prior years 2 4 4 Reductions for tax positions related to prior years (3 ) (7 ) (15 ) Unrecognized tax benefits at end of year $ 10 $ 9 $ 11 Unrecognized tax benefits that, if recognized, would affect the effective income tax rate $ 7 $ 4 $ 7 At December 29, 2017, December 30, 2016, and January 1, 2016, accrued interest and penalties totaled $1 million . A negligible amount of interest and penalties were recognized in the Company's consolidated statements of income in fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016. At December 29, 2017, the balance of unrecognized tax benefits included liabilities for uncertain tax positions of $11 million , $7 million of which were classified as other long-term liabilities on the Company's consolidated balance sheets. At December 30, 2016, the balance of unrecognized tax benefits included liabilities for uncertain tax positions of $10 million , $5 million of which were classified as other long-term liabilities on the Company's consolidated balance sheets. At January 1, 2016, the balance of unrecognized tax benefits included liabilities for uncertain tax positions of $12 million , $5 million of which were classified as other long-term liabilities on the Company's consolidated balance sheets. The Company files income tax returns in the United States and various state and foreign jurisdictions. The Company participates in the Internal Revenue Service (“IRS”) Compliance Assurance Process, a real-time audit of the Company's consolidated federal corporate income tax return. The IRS has examined the Company's consolidated federal income tax returns through the year ended December 30, 2016. With a few exceptions, as of December 29, 2017, the Company is no longer subject to state, local, or foreign examinations by the tax authorities for years before fiscal 2015. During the next 12 months, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and international, could be reached with respect to $6 million of the Company's unrecognized tax benefits, depending on the timing of ongoing examinations, any litigation and expiration of statute of limitations, either because the Company's tax positions are sustained or because the Company agrees to their disallowance and pays the related income tax. While the Company believes it has adequate accruals for uncertain tax positions, the tax authorities may determine that the Company owes taxes in excess of recorded accruals or the recorded accruals may be in excess of the final settlement amounts agreed to by tax authorities. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Dec. 29, 2017 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans Defined Contribution Plans The Company sponsors several defined contribution plans, including the Leidos, Inc. Retirement Plan which is both a 401(k) plan and an employee stock ownership plan, in which most employees are eligible to participate, and the Leidos, Inc. Retirement Plan for Former IS&GS Employees. These plans allow eligible participants to contribute a portion of their income through payroll deductions and the Company may also make discretionary contributions. Company contributions were $94 million , $68 million and $56 million for fiscal 2017, fiscal 2016 and the 11-month period ended January 1, 2016, respectively. Deferred Compensation Plans The Company maintains two deferred compensation plans, the Keystaff Deferral Plan ("KDP") and the Key Executive Stock Deferral Plan ("KESDP"), for the benefit of certain management or highly compensated employees or members of the Board of Directors. The deferred compensation plans allow eligible participants to elect to defer a portion of their salary, and all or a portion of certain bonuses, including stock unit awards. Directors may also elect to defer their director fees and retainers. The Company makes no contributions to the KDP but maintains participant accounts for deferred amounts and investments. The Company maintains a rabbi trust for the purpose of funding benefit payments to the KDP participants. Participants may allocate deferred cash bonus amounts into a variety of designated investment options, with gains and losses based on the elected investment option performance. Under the KESDP, eligible participants may also elect to defer in share units all or a portion of certain cash bonuses and stock unit awards granted under the 2006 Equity Incentive Plan and the 2017 Omnibus Incentive Plan (see "Note 15 Stock-Based Compensation"). The Company makes no contributions to the accounts of KESDP participants. Benefits from the KESDP are payable in shares of Leidos common stock held in a rabbi trust for the purpose of funding benefit payments to KESDP participants. Deferred balances in the KDP and KESDP plans are paid in lump sum or installments upon retirement, termination, or the elected specified date. The Company sponsored a 401(k) Excess Deferral Plan ("Excess Plan") for the benefit of certain management or highly compensated employees that allowed participants to elect to defer up to 20% of their eligible salary once the participant has met the IRS contribution limit imposed on the Leidos, Inc. Retirement Plan. The Company made matching contributions to participants who have received a reduced Company contribution in the Leidos, Inc. Retirement Plan due to the participant's deferral of salary into the Excess Plan which were included in the contributions expensed amount for defined contributions plans. This plan was frozen effective December 31, 2016. Defined Benefit Plans The Company sponsors a defined benefit pension plan in the United Kingdom for former employees on an expired customer contract. While benefits under the plan are frozen, the Company has continuing defined benefit pension obligations with respect to certain plan participants. In fiscal 2012, the Company sold certain components of its business, including the component of its business that contained this pension and employed the pension plan participants. Pursuant to the definitive sale agreement, the Company retained the assets and obligations of this defined benefit pension plan. As a result of retaining the pension obligation, the remaining immaterial components of ongoing pension expense, primarily interest costs and assumed return on plan assets subsequent to the sale, are recorded in continuing operations. The projected benefit obligation as of December 29, 2017, and December 30, 2016, was $120 million and $115 million , respectively. The increase in the projected benefit obligation was primarily due to the impact of a weaker U.S. dollar, partially offset by a gain resulting from changes in assumptions used in the valuation. The fair value of plan assets as of December 29, 2017, and December 30, 2016, was $129 million and $109 million , respectively. The plan funding status was overfunded $9 million and underfunded $6 million as of December 29, 2017, and December 30, 2016, respectively. Other The Company also sponsors a defined benefit pension plan for employees working on one U.S. Government contract. As part of the contractual agreement, the customer reimburses the Company for contributions made to the plan that are allowable under government contract cost accounting requirements. If the Company were to cease being the contractor as a result of a recompetition process, this defined benefit pension plan and related plan assets and liabilities would transfer to the new contractor. If the contract expires or is terminated with no transfer of the plan to a successor contractor, any amount by which plan liabilities exceed plan assets, as of that date, will be reimbursed by the U.S. Government customer. Since the Company is not responsible for the current or future funded status of this plan, no assets or liabilities arising from its funded status are recorded in the Company's consolidated financial statements and no amounts associated with this plan are included in the defined benefit plan disclosures above. |
Leases
Leases | 12 Months Ended |
Dec. 29, 2017 | |
Leases [Abstract] | |
Leases | Leases The Company occupies most of its facilities under operating leases. Most of the leases require the Company to pay maintenance and operating expenses such as taxes, insurance and utilities and also contain renewal options to extend the lease and provisions for periodic rate escalations to reflect inflationary increases. Certain equipment is leased under short-term or cancelable operating leases. Rental expense for facilities and equipment for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Gross rental expense $ 181 $ 107 $ 83 Less: sublease income (3 ) (2 ) (8 ) Net rental expense $ 178 $ 105 $ 75 The increase in rental expense was primarily due to the acquisition of the IS&GS Business in fiscal 2016. Future minimum lease commitments and sublease receipts, under non-cancelable operating leases in effect at December 29, 2017, are as follows: Fiscal Year Ending Operating lease Sublease (in millions) 2018 $ 140 $ 2 2019 107 1 2020 78 1 2021 53 1 2022 39 — 2023 and thereafter 78 — Total $ 495 $ 5 As of December 29, 2017, the Company had capital lease obligations of $6 million that are payable over the next two years (see "Note 12—Debt"). Sale and Leaseback Agreement On May 3, 2013, the Company entered into a purchase and sale agreement ("2013 Sale") relating to the sale of approximately 18 acres of land in Fairfax County, Virginia, including four office buildings, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as tangible personal property and third-party leases. This sale agreement contemplated that sales would be completed in a series of transactions over a period of several years. On August 31, 2015, the Company entered into an amendment to the original purchase and sale agreement and subsequently, in December 2015, closed the sale of the remaining building, parcels of land that surround the building and the multi-level surface parking garage for a net purchase consideration of $95 million . The closing consideration consisted of a cash payment of $75 million and a promissory note (the "Note") of $20 million , net of discount of $5 million . The proceeds of $95 million resulted in a gain of $82 million due to 1) the write-off of the financing note payable of $35 million and other long-term liabilities of $5 million from the 2013 Sale; 2) offset by the write-off of $40 million in aggregate net book value of property disposed, which includes amounts related to the disposal of the third office building sold during the 2013 Sale; and 3) payments for a lease termination fee of $8 million to terminate the financing leaseback agreement and transaction and selling costs of $5 million . The gain was recorded in " Other (expense) income, net " in the Company's consolidated statements of income. The Note matures on December 17, 2019 ("Maturity Date"), and accrues interest at 30-day LIBOR subject to a floor of 0.25% per annum, plus 0.50% over a four -year period. Interest will accrue daily and is not compounded to the outstanding principal balance. The total accumulated interest and principal will be paid in a lump sum on the Maturity Date. If prepayments are made towards the outstanding principal and interest balance prior to the maturity date, the Company will credit 60% of the accrued interest against the outstanding balance; additionally, if all of the outstanding principal and interest balance is prepaid on or before December 17, 2018, the Company will credit 80% of the accrued interest due under the Note. |
Supplementary Cash Flow Informa
Supplementary Cash Flow Information | 12 Months Ended |
Dec. 29, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Supplementary Cash Flow Information | Supplementary Cash Flow Information and Restricted Cash Supplementary cash flow information, including non-cash activities, for the periods presented was as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Supplementary cash flow information: Cash paid for income taxes, net of refunds $ 214 $ 47 $ 31 Cash paid for interest 133 90 50 Non-cash investing activity: Stock issued for acquisition of the IS&GS Business $ — $ 2,938 $ — Promissory note, net received for disposition of business — — 72 Promissory note, net received from a real estate sale — — 20 Non-cash financing activity: Capital lease and notes payable obligations $ 27 $ — $ 6 Dividends declared and other 3 21 2 The following is a reconciliation of cash and cash equivalents, as reported within the consolidated balance sheets, to the total cash, cash equivalents and restricted cash, as reported within the consolidated statements of cash flows, as required by the adoption of ASU 2016-18 (see "Note 1—Summary of Significant Accounting Policies"): December 29, December 30, (in millions) Cash and cash equivalents $ 390 $ 376 Restricted cash 32 20 Total cash, cash equivalents and restricted cash $ 422 $ 396 The restricted cash is recorded within "Inventory, prepaid expenses and other current assets" in the Company's consolidated balance sheets. The restricted cash primarily comprises of advances from customers that are restricted as to use for certain expenditures related to that customer's contract. |
Business Segments
Business Segments | 12 Months Ended |
Dec. 29, 2017 | |
Segment Reporting [Abstract] | |
Business Segments | Business Segments The Company defines its reportable segments based on the way the chief operating decision maker ("CODM"), currently its Chairman and Chief Executive Officer, manages the operations of the Company for purposes of allocating resources and assessing performance. During fiscal 2017, the Company completed its business reorganization, which resulted in identification of three reportable segments (Defense Solutions, Civil and Health). Additionally, the Company separately presents the costs associated with corporate functions as Corporate. The Company commenced operating and reporting under the new organization structure effective the beginning of fiscal 2017. The segment information for prior periods has been recast to reflect the Company's current reportable segments structure. Defense Solutions is focused on rapidly deploying agile, cost-effective solutions to meet the ever-changing missions of the Company's customers in areas of intelligence surveillance and reconnaissance, enterprise IT and integrated systems and cybersecurity and global services. Defense Solutions provides a diverse portfolio of national security solutions and systems for air, land, sea, space and cyberspace for the U.S. Intelligence Community, the DoD, military services, DHS, government agencies of U.S. allies abroad and other federal, civilian and commercial customers in the national security industry. The Company's solutions deliver innovative technology, large-scale intelligence systems, command and control, data analytics, logistics and cybersecurity solutions, as well as intelligence analysis and operations support to critical missions around the world. The Civil business is focused on seamlessly integrating and protecting physical, digital and data domains. By applying leading science, effective technologies and business acumen, the Company's forward thinkers are helping customers maximize their performance and take on the connected world with data-driven insights, improved efficiencies and technological advantages. The Health business is focused on delivering effective and affordable solutions to federal and commercial customers that are responsible for the health and wellbeing of people worldwide including service members and veterans. These solutions enable customers to deliver on the health mission of providing high quality, cost effective care and are accomplished through the integration of information technology, engineering, health & life sciences, clinical insights and health policy. The capabilities the Health business provides are principally encapsulated by four major areas of activity: complex systems integration, managed health services, enterprise IT transformation and life sciences. Corporate includes the operations of various corporate activities, certain corporate expense items that are not reimbursed by the Company's U.S. Government customers and certain other expense items excluded from a reportable segment's performance. The following table summarizes business segment information for the periods presented: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Revenues: Defense Solutions $ 4,959 $ 3,843 $ 3,009 Civil 3,409 2,082 1,141 Health 1,802 1,117 556 Corporate — 1 6 Total revenues $ 10,170 $ 7,043 $ 4,712 Operating income (loss): Defense Solutions $ 307 $ 312 $ 260 Civil 226 146 33 Health 228 110 46 Corporate (202 ) (151 ) (19 ) Total operating income $ 559 $ 417 $ 320 Amortization of intangible assets: Defense Solutions $ 108 $ 17 $ — Civil 132 39 6 Health 41 28 2 Total amortization of intangible assets $ 281 $ 84 $ 8 The financial performance measures used to evaluate segment performance are revenues and operating income. As a result, " Other (expense) income, net ," "Interest income," "Interest expense" and "Income tax expense," as reported in the consolidated financial statements are not allocated to the Company's segments. Under U.S. Government Cost Accounting Standards, indirect costs including depreciation expense are collected in numerous indirect cost pools, which are then collectively allocated out to the Company’s reportable segments based on a representative causal or beneficial relationship of the costs in the pool to the costs in the base. While depreciation expense is a component of the allocated costs, the allocation process precludes depreciation expense from being specifically identified by the Company’s individual reportable segments. For this reason, depreciation expense by reportable segment has not been reported above. Asset information by segment is not a key measure of performance used by the CODM. Less than 10% of the Company's revenues and tangible long-lived assets are generated by or owned by entities outside of the United States. As such, the financial information by geographic location is not presented. The Company's revenues are largely attributable to prime contracts with the U.S. Government or to subcontracts with other contractors engaged in work for the U.S. Government. The percentages of total revenues for the U.S. Government, its agencies and other customers comprising more than 10% of total revenues in any of the periods for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, U.S. Government 84 % 81 % 76 % U.S. DoD 47 % 56 % 64 % U.S. Army 13 % 14 % 14 % Maryland Procurement Office 5 % 7 % 10 % |
Contingencies
Contingencies | 12 Months Ended |
Dec. 29, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Legal Proceedings MSA Joint Venture On November 10, 2015, MSA received a final decision of the Department of Energy ("DoE") contracting officer for the Mission Support Contract concluding that certain payments to MSA by DoE for the performance of IT services by Lockheed Martin Services, Inc. (“LMSI”) under a subcontract to MSA constituted alleged affiliate fees in violation of the Federal Acquisition Regulation (the "FAR"). Lockheed Martin Integrated Technology LLC (now known as Leidos Integrated Technology LLC) is a member entity of MSA. Subsequent to the contracting officer's final decision, MSA, LMSI and Lockheed Martin Corporation received notice from the U.S. Attorney's Office for the Eastern District of Washington that the U.S. Government had initiated a False Claims Act investigation into the facts surrounding this dispute, and each of MSA, LMSI and Lockheed Martin Corporation have produced information in response to Civil Investigative Demands from the U.S. Attorney's Office. In addition, the U.S. Attorney's office has advised that a parallel criminal investigation is open, although no subjects or targets of the investigation have been identified. Since this issue first was raised by the DoE, MSA has asserted that the IT services performed by LMSI under a fixed price/fixed unit rate subcontract approved by the DoE meet the definition of a "commercial item" under the FAR and any profits earned on that subcontract are permissible. MSA filed an appeal of the contracting officer's decision with the Civilian Board of Contract Appeals and that appeal is pending, but has been stayed pending resolution of the False Claims Act investigation. Subsequent to the filing of MSA's appeal, the contracting officer demanded that MSA reimburse the DoE in the amount of $64 million , which was his estimate of the profits earned during the period from 2010 to 2014 by LMSI. The DoE has deferred that demand, pending resolution of the appeal, but to date the demand has not been rescinded. MSA and the other members of MSA have indicated they believe if MSA incurs a liability in this matter, then Leidos Integrated Technology, LLC is responsible to MSA for the loss. Under the terms of the Separation Agreement, Lockheed Martin has agreed to indemnify the Company for 100% of any damages in excess of $38 million up to $64 million , and 50% of any damages in excess of $64 million , with respect to claims asserted against MSA related to this matter. At December 29, 2017, the Company has a liability of $39 million and an indemnification asset of $1 million recorded in the consolidated balance sheets. Securities Litigation Between February and April 2012, alleged stockholders filed three putative securities class actions against the Company and several former executives relating to the Company's contract to develop and implement an automated time and attendance and workforce management system for certain agencies of the City of New York ("CityTime"). One case was withdrawn and two cases were consolidated in the U.S. District Court for the Southern District of New York in In Re: SAIC, Inc. Securities Litigation . The consolidated securities complaint asserted claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations that the Company and individual defendants made misleading statements or omissions about the Company's revenues, operating income and internal controls in connection with disclosures relating to the CityTime project. The plaintiffs sought to recover from the Company and the individual defendants an unspecified amount of damages class members allegedly incurred by buying Leidos' stock at an inflated price. The District Court dismissed the plaintiffs' claims with prejudice and without leave to replead. The plaintiffs then appealed to the United States Court of Appeals for the Second Circuit, which issued an opinion affirming in part, and vacating in part, the District Court's ruling. The Company filed a petition for a writ of certiorari in the U.S. Supreme Court, which was granted on March 27, 2017. The District Court granted the Company's request to stay all proceedings, including discovery, pending the outcome at the Supreme Court. In September 2017, the parties engaged in mediation resulting in an agreement to settle all remaining claims for an immaterial amount to be paid by the Company's insurer. The parties executed the settlement agreement and plaintiffs filed their motion for preliminary settlement approval at the District Court on December 13, 2017. The terms of the settlement agreement remain subject to court approval, which is expected to occur in the first half of 2018. Greek Government Contract In 2003, the Company entered into a firm-fixed-price contract with the Hellenic Republic of Greece to provide a Command, Control, Communications, Coordination and Integration System. The Greek government disputed the contract balance owed to the Company and has not paid the Company's final invoice. In 2013, the Company received an arbitral award by the International Chamber of Commerce for €39 million or $46 million , which has not been satisfied. In January 2017, the U.S. District Court granted an order to enforce the arbitration award and entered judgment in the Company's favor, converting the award to U.S. dollars in the amount of $63 million . The U.S. Court of Appeals for the D.C. Circuit subsequently ruled that the district court judgment should instead reflect the currency in which it was originally awarded. Separately, the Greek government sought to annul the award in the Greek courts; however, on July 27, 2017, the Athens Court of Appeals issued a decision rejecting the government's position. Based on the complex nature of this contractual situation and the difficulties encountered to date, significant uncertainties exist and the Company is unable to reliably estimate the ultimate outcome. Other The Company is also involved in various claims and lawsuits arising in the normal conduct of its business, none of which, in the opinion of the Company's management, based upon current information, will likely have a material adverse effect on the Company's consolidated financial position, results of operations, or cash flows. Other Contingencies VirnetX, Inc. On September 29, 2017, the federal trial court in the Eastern District of Texas entered a final judgment in the VirnetX v. Apple case referred to as Apple I. In an opinion and order, unsealed by the court on October 13, 2017, the court found that Apple willfully infringed the VirnetX patents at issue in the Apple I case and awarded enhanced damages, bringing the total award against Apple to over $343 million in pre-interest damages. The court also awarded costs, certain attorneys' fees, and certain interest, and directed VirnetX and Apple to meet and confer regarding those amounts, resulting in a filing by VirnetX asking the court to grant VirnetX an additional sum of over $96 million . This additional amount would bring the total award to VirnetX in the Apple I case to over $439 million . Apple has filed an appeal of the judgment in the Apple I case with the U.S. Court of Appeals for the Federal Circuit. A jury trial in an additional patent infringement case brought by VirnetX against Apple, referred to as the Apple II case, has been scheduled by the District Court to begin on April 2, 2018. Under its agreements with VirnetX, Leidos would receive 25% of the proceeds obtained by VirnetX after reduction for attorneys' fees and costs. However, Apple has appealed the verdict and no assurances can be given when or if the Company will receive any proceeds in connection with this jury award. In addition, if the Company receives any proceeds, the Company is required to pay a royalty to the customer who paid for the development of the technology. The Company does not have any material assets or liabilities recorded in connection with this matter as of December 29, 2017. Government Investigations and Reviews The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the United States. Adverse findings could have a material effect on the Company's business, financial position, results of operations, and cash flows due to its reliance on government contracts. During fiscal 2017, pursuant to the resolution of certain government accounting matters, including audits by the Defense Contract Audit Agency ("DCAA"), the Company recorded a net $24 million reduction to its accrued liabilities. Indirect cost audits by the DCAA remain open for fiscal 2012 and subsequent fiscal years for Leidos Inc. and fiscal 2011 and subsequent fiscal years for Leidos Innovations. Although the Company has recorded contract revenues based upon an estimate of costs that the Company believes will be approved upon final audit or review, the Company cannot predict the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Company's estimates, its profitability would be adversely affected. As of December 29, 2017, the Company believes it has adequately reserved for potential adjustments from audits or reviews of contract costs. In December 2017, Leidos submitted an external restructuring proposal ("XRP"), in accordance with provisions of the Defense Federal Acquisition Regulation Supplement, which permits defense contractors to recover certain specified external restructuring costs. The XRP proposal is subject to DCAA approval and audit, and any recovery may be through the pricing of the Company's services to the U.S. government in the future periods with the impact included in the reportable segments' results of operations. However, there is no certainty of the timing of approval of the XRP proposal and the amounts that may be approved for recovery. |
Commitments
Commitments | 12 Months Ended |
Dec. 29, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments The Company has outstanding letters of credit of $93 million as of December 29, 2017, principally related to performance guarantees on contracts. The Company also has outstanding surety bonds in the amount of $148 million as of December 29, 2017, principally related to performance and subcontractor payment bonds on the Company's contracts. The outstanding letters of credit and surety bonds have various terms with the majority expiring over the next four fiscal years. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 29, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On January 10, 2018, the final amount of the net working capital of the IS&GS Business, as of the closing date of the Transactions, was determined through a binding arbitration proceeding in accordance with the Separation Agreement with Lockheed Martin. As a result, $24 million was recorded as acquisition costs in the consolidated statements of income for fiscal 2017 (See "Note 2—Acquisitions"). On January 18, 2018, the final working capital amount of $105 million was paid to Lockheed Martin. On January 24, 2018, the Company entered into a lease agreement with its current lessor for office space in a building to be constructed to function as the Company's new corporate headquarters in Reston, Virginia. The Company will occupy the space for an initial term of 148 months and rent expense will be $11 million for the first lease year, with an annual rent expense increase of 2.5% . The Company currently expects construction to be completed and to take occupancy of the building by April 1, 2020, at which point the Company's lease agreements for its current corporate headquarters will terminate. On January 26, 2018, the Company entered into a Membership Interest Purchase Agreement with Jacobs Engineering Group, Inc. ("Jacobs Group"), whereby the Company purchased 100% of Jacobs Group's 41% outstanding membership interests in MSA. As a result, Leidos increased its ownership in MSA from 47% to 88% effective January 26, 2018. On February 14, 2018, Leidos and Plainfield entered into an amendment to the Note allowing Plainfield to defer the principal and additional interest payment originally due on January 24, 2018 until February 28, 2018. |
Summary of Significant Accoun32
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 29, 2017 | |
Accounting Policies [Abstract] | |
Reporting Periods | Reporting Periods On March 20, 2015, the Board of Directors approved the amendment and restatement of the bylaws of Leidos to change Leidos' year end from the Friday nearest the end of January to the Friday nearest the end of December. As a result of this change, the Company filed a Transition Report on Form 10-K for the 11-month period which began on January 31, 2015, and ended on January 1, 2016. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management evaluates these estimates and assumptions on an ongoing basis, including those relating to estimated profitability of long-term contracts, indirect billing rates, allowances for doubtful accounts, inventories, fair value and impairment of intangible assets and goodwill, income taxes, pension benefits, stock-based compensation expense and contingencies. These estimates have been prepared by management on the basis of the most current and best available information; however, actual results could differ materially from those estimates. |
Restructuring Expenses | Restructuring Expenses Restructuring expenses are incurred in connection with programs aimed at reducing the Company's costs and primarily include lease termination, vacancy costs and termination costs associated with headcount reduction. The Company's restructuring actions include one-time involuntary termination benefits as well as certain contractual termination benefits or employee terminations under ongoing benefit arrangements. One-time involuntary termination benefits are recognized as a liability at estimated fair value when the plan of termination has been communicated to employees and certain other criteria are met. Ongoing termination benefit arrangements are recognized as a liability at estimated fair value when it is probable that amounts will be paid to employees and such amounts are reasonably estimable. When the Company ceases using a facility but does not intend to or is unable to terminate the operating lease, the Company records a liability for the present value of the remaining lease payments, net of estimated sublease income, if any, that could be reasonably obtained for the property (even if the Company does not intend to sublease the facility for the remaining term of the lease). Costs associated with exit or disposal activities, including the related one-time and ongoing involuntary termination benefits, are reflected as "Restructuring expenses" on the consolidated statements of income. |
Operating Cycle | Operating Cycle The Company's operating cycle for long-term contracts may be greater than one year and is measured by the average time intervening between the inception and the completion of those contracts. Contract-related assets and liabilities are therefore generally classified as current assets and current liabilities. |
Business Combinations | Business Combinations The accounting for business combinations requires the Company to make judgments and estimates related to the fair value of assets acquired, including the identification and valuation of intangible assets, as well as liabilities and contingencies assumed. Such judgments and estimates directly impact the amount of goodwill recognized in connection with an acquisition. |
Investments | Investments Investments in entities and corporate joint ventures where the Company has a noncontrolling ownership interest representing less than 50% and over which the Company has the ability to exercise significant influence, are accounted for under the equity method of accounting whereby the Company recognizes its proportionate share of the entities' net income or loss and does not consolidate the entities' assets and liabilities. Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost or cost net of other-than-temporary impairments. |
Variable Interest Entities | Variable Interest Entities The Company occasionally forms joint ventures and/or enters into arrangements with special purpose limited liability companies for the purpose of bidding and executing on specific projects. The Company analyzes each such arrangement to determine whether it represents a VIE. If the arrangement is determined to be a VIE, the Company assesses whether it is the primary beneficiary of the VIE and is consequently required to consolidate the VIE. |
Revenue Recognition | Revenue Recognition The Company's revenues are generated primarily from contracts with the U.S. Government, commercial customers and various international, state and local governments or from subcontracts with other contractors engaged in work with such customers. The Company performs under various types of contracts, which include firm-fixed-price, time-and-materials, fixed-price-level-of-effort, cost-plus-fixed-fee, cost-plus-award-fee, cost-plus-incentive-fee and fixed-price-incentive fee contracts. Firm-fixed-price contracts—Revenues and fees on these contracts that are system integration or engineering in nature are primarily recognized using the percentage-of-completion method of accounting utilizing the cost-to-cost method. The completed contract method is utilized when reasonable and reliable cost estimates for a project cannot be made. Time-and-materials contracts—Revenue is recognized on time-and-materials contracts based on the hours provided in performance under the contract multiplied by the negotiated contract billing rates, plus the negotiated contract billing rate of any allowable material and subcontract costs and out-of-pocket expenses. Fixed-price-level-of-effort contracts ("FP-LOE")—These contracts are substantially similar to time-and-materials contracts except they require a specified level of effort over a stated period of time. Accordingly, the Company recognizes revenue on FP-LOE contracts with the U.S. Government in a manner similar to time-and-materials contracts in which the Company measures progress toward completion based on the hours provided in performance under the contract multiplied by the negotiated contract billing rates, plus the negotiated contract billing rate of any allowable material costs and out-of-pocket expenses. Cost-plus-fixed-fee contracts—Revenue is recognized on cost-plus-fixed-fee contracts with the U.S. Government on the basis of partial performance equal to costs incurred, plus an estimate of applicable fees earned as the Company becomes contractually entitled to reimbursement of costs and the applicable fees. Cost-plus-award-fee/cost-plus-incentive fee contracts—Revenues and fees on these contracts with the U.S. Government are recognized using the percentage-of-completion method of accounting using the cost-to-cost method. The Company includes an estimate of the ultimate incentive or award fee to be received on the contract in the estimate of contract revenues for purposes of applying the percentage-of-completion method of accounting. Fixed-price-incentive fee contracts ("FP-IF")—These contracts are substantially similar to cost-plus-incentive fee contracts recognized using the percentage-of-completion method of accounting except they require specified targets for cost and profit, price ceiling (but not a profit ceiling or floor), and profit adjustment formula. Under a FP-IF contract, the allowable costs incurred are eligible for reimbursement but are subject to a cost-share arrangement, which affects profitability. Generally, if costs exceed the contract target cost or are not allowable under the applicable regulations, the Company may not be able to obtain reimbursement for all costs and may have fees reduced or eliminated. Revenues from services and maintenance contracts, notwithstanding contract type, are recognized over the term of the respective contracts as the services are performed and revenue is earned. Revenues from unit-priced contracts are recognized as transactions are processed based on objective measures of output. Revenues from the sale of manufactured products are recorded upon passage of title and risk of loss to the customer, which is generally upon delivery, provided that all other requirements for revenue recognition have been met. The Company also uses the efforts-expended method of percentage-of-completion using measures such as labor dollars for measuring progress toward completion in situations in which this approach is more representative of the progress on the contract. For example, the efforts-expended method is utilized when there are significant amounts of materials or hardware procured for the contract that is not representative of progress on the contract. Additionally, the Company utilizes the units-of-delivery method under percentage-of-completion on contracts where separate units of output are produced. Under the units-of-delivery method, revenue is generally recognized when the units are delivered to the customer, provided that all other requirements for revenue recognition have been met. The Company evaluates its contracts for multiple elements, and when appropriate, separates the contracts into separate units of accounting for revenue recognition. Revenues generated from product sales do not represent a material amount of the Company's total revenues. The Company generally provides for anticipated losses on contracts by recording an expense during the period in which the losses are determined. Amounts billed and collected but not yet recognized as revenues under contracts are deferred. Contract costs incurred for U.S. Government contracts, including indirect costs, are subject to audit and adjustment through negotiations between the Company and government representatives. The Company's indirect cost audits by the Defense Contract Audit Agency remain open for fiscal 2012 and subsequent fiscal years for Leidos, Inc. and for fiscal 2011 and subsequent fiscal years for Leidos Innovations. Revenues on U.S. Government contracts have been recorded in amounts that are expected to be realized upon final settlement. Contract claims are unanticipated additional costs incurred but not provided for in the executed contract price that the Company seeks to recover from the customer. Such costs are expensed as incurred. Additional revenue related to contract claims is recognized when the amounts are awarded by the customer. Un-priced change orders are included in revenue when they are probable of recovery in an amount at least equal to the cost. On certain contracts where the Company is not the primary obligor such as the provision of administrative oversight and/or management of government-owned facilities or support services related to other vendors' products, the Company recognizes as revenue the net management fee associated with the services and excludes from its income statement the gross sales and costs associated with the facility or other vendors' products. |
Changes In Estimates On Contracts | The impact on diluted EPS from continuing operations attributable to Leidos common stockholders is calculated using the Company's statutory tax rate. Changes in Estimates on Contracts Changes in estimates related to long-term contracts accounted for using the percentage of completion method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes, with the exception of contracts acquired through the acquisition of the IS&GS Business (see "Note 2—Acquisitions"), where the adjustment is for the period commencing from the date of acquisition. Changes in these estimates can occur over the contract performance period for a variety of reasons, including changes in contract scope, contract cost estimates and estimated incentive or award fees. |
Divestitures | Divestitures From time-to-time, the Company may dispose (or management may commit to plans to dispose) of strategic or non-strategic components of the business. Divestitures representing a strategic shift in operations are classified as discontinued operations for all periods presented. Non-strategic divestitures are not reclassified as discontinued operations and remain in continuing operations. |
Pre-contract Costs | Pre-contract and Transition Costs Pre-contract Costs Costs incurred on projects as pre-contract costs are deferred as assets ("Inventory, prepaid expenses and other current assets") when the Company has been requested by the customer to begin work under a new arrangement prior to contract execution and it is probable that the Company will recover the costs through the issuance of a contract. When the formal contract has been executed, the costs are recorded to the contract and revenue is recognized. |
Transition Costs | Transition Costs Under certain services contracts, costs are incurred, usually at the beginning of the contract performance, to transition the services, employees and equipment from the customer or prior contractor. These costs are capitalized as deferred assets and amortized over the shorter of the contractual period of performance or expected period of performance, if recoverability is deemed probable. |
Fair Value Measurements | Fair Value Measurements The accounting standard for fair value measurements establishes a three-level value hierarchy, which prioritizes the inputs used in measuring fair value as follows: observable inputs such as quoted prices in active markets ( Level 1 ); inputs other than quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly or quoted prices that are not active ( Level 2 ); and unobservable inputs in which there is little or no market data (e.g., discounted cash flow and other similar pricing models), which requires the Company to develop its own assumptions ( Level 3 ). The accounting guidance for fair value measurements requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The accounting guidance provides for the irrevocable option to elect, on a contract-by-contract basis, to measure certain financial assets and liabilities at fair value at inception of the contract and record any subsequent changes in fair value in earnings. The Company has not made fair value option elections on any of its financial assets and liabilities. The fair value of financial instruments is determined based on quoted market prices, if available, or management's best estimate (see "Financial Instruments" below). Management evaluates its investments for other-than-temporary impairment at each balance sheet date. When testing long-term investments for recovery of carrying value, the fair value of long-term investments is determined using various valuation techniques and factors such as, market prices of comparable companies ( Level 2 input), discounted cash flow models ( Level 3 input) and recent capital transactions of the portfolio companies being valued ( Level 3 input). If management determines that an other-than-temporary decline in the fair value of an investment has occurred, an impairment loss is recognized to reduce the investment to its estimated fair value. The Company's non-financial instruments measured at fair value on a non-recurring basis include goodwill, indefinite-lived intangible assets and long-lived tangible assets. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions. As such, the Company generally classifies non-financial instruments as either Level 2 or Level 3 fair value measurements. |
Financial Instruments | Financial Instruments The Company is exposed to certain market risks which are inherent in certain transactions entered into during the normal course of business. These transactions include sales or purchase contracts denominated in foreign currencies, investments in equity securities and exposure to changing interest rates. The Company manages its risk to changes in interest rates through the use of derivative instruments. For fixed rate borrowings, the Company uses variable interest rate swaps, effectively converting fixed rate borrowings to variable rate borrowings. These swaps are designated as fair value hedges. The fair value of these interest rate swaps is determined based on observed values for underlying interest rates on the LIBOR yield curve (Level 2). For variable rate borrowings, the Company uses fixed interest rate swaps, effectively converting a portion of the variable interest rate payments to fixed interest rate payments. These swaps are designated as cash flow hedges. The fair value of these interest rate swaps is determined based on observed values for the underlying interest rates (Level 2). The Company does not hold derivative instruments for trading or speculative purposes. The Company's defined benefit plan assets consist of investments in pooled funds that contain investments with values based on quoted market prices, but for which the pools are not valued on a daily quoted market basis (Level 2 inputs). |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company's cash equivalents were primarily comprised of investments in several large institutional money market funds and bank deposits, with original maturity of three months or less. The Company includes outstanding payments within "Cash and cash equivalents" and increases "Accounts payable and accrued liabilities" on the consolidated balance sheets. At December 29, 2017, and December 30, 2016, the Company included $169 million and $67 million , respectively, of outstanding payments within "Cash and cash equivalents." |
Restricted Cash | Restricted Cash The Company has restricted cash balances, primarily representing advances from customers that are restricted as to use for expenditures related to that customer's contract. Restricted cash balances are included as "Inventory, prepaid expenses and other current assets" in the Company's consolidated balance sheets. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of accounts receivable. Since the Company's receivables are primarily with the U.S. Government, the Company does not have exposure to a material credit risk. Additionally, the Company is subject to credit risk related to its derivatives which is managed through the use of multiple counterparties with high credit standards. |
Receivables | Receivables The Company's receivables include amounts billed and currently due from customers and amounts currently due from customers but are unbilled. Amounts billable are recognized at estimated realizable value and consist of costs and fees, substantially all of which are expected to be billed and collected generally within one year. Unbilled amounts also include rate variances that are billable upon negotiation of final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Contract retentions are billed upon contract completion, or the occurrence of a specified event, and when negotiation of final indirect rates with the U.S. Government is complete. Consequently, the timing of collection of retention balances is outside the Company's control. Based on the Company's historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant. When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded. |
Inventories | Inventories Inventories are valued at the lower of cost or estimated net realizable value. Raw material inventory is valued using the average cost method. Work-in-process inventory includes raw material costs plus labor costs, including fringe benefits and allocable overhead costs. The majority of finished goods inventory consists of security products and baggage scanning equipment. The Company evaluates inventory against historical and planned usage to determine appropriate provisions for obsolete inventory. |
Property, Plant and Equipment | Property, Plant and Equipment Purchases of property, plant and equipment as well as costs associated with major renewals and improvements are capitalized. Maintenance, repairs and minor renewals and improvements are expensed as incurred. Construction in Progress ("CIP") is used to accumulate all costs for projects that are not yet complete. CIP balances are transferred to the appropriate asset account when the asset is capitalized and ready for its intended use. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is recognized. Depreciation is recognized using the methods and estimated useful lives as follows: Depreciation method Estimated useful lives (in years) Computers and other equipment Straight-line or declining-balance 2-10 Buildings Straight-line Not to exceed 40 Building improvements and leasehold improvements Straight-line Shorter of useful life of asset or remaining lease term Office furniture and fixtures Straight-line or declining-balance 6-9 The Company evaluates its long-lived assets for potential impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable and the carrying amount of the asset exceeds its estimated fair value. |
Project Assets | Project Assets Purchases of project assets are capitalized for specific contracts where delivery has not yet occurred or ownership is maintained by the Company over the life of the contract. Project assets include enterprise software licenses, computers and significant material purchases on contracts. These project assets are relieved from the balance sheet based on different methodologies, including transfer of assets, amortization based on useful life and percentage of completion utilizing efforts expended method of revenue recognition. |
Goodwill | Goodwill Goodwill represents the excess of the fair value of consideration transferred, plus the fair value of any non-controlling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is not amortized, but instead is tested annually for impairment at the reporting unit level and tested more frequently if events or circumstances indicate that the carrying value may not be recoverable. The Company's policy is to perform its annual goodwill impairment evaluation as of the first day of the fourth quarter of its fiscal year. During fiscal 2017, the Company had five reporting units for the purpose of testing goodwill for impairment. Goodwill is evaluated for impairment either under a qualitative assessment option or a quantitative approach depending on the facts and circumstances of a reporting unit, including consideration of the excess of fair value over carrying amount in previous assessments and changes in business environment. When performing a qualitative assessment, the Company considers factors including, but not limited to, current macroeconomic conditions, industry and market conditions, cost factors, financial performance and other events relevant to the entity or reporting unit under evaluation to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that a reporting unit's fair value is less than its carrying amount, a quantitative goodwill impairment test is performed. When performing a quantitative goodwill impairment test, the reporting unit carrying value is compared to its fair value. Goodwill is deemed impaired if, and the impairment loss is recognized for the amount by which, the reporting unit carrying value exceeds its fair value. The Company estimates the fair value of each reporting unit using both market and income approaches (Level 3) when a quantitative analysis is performed. To determine the fair value of the reporting units, the outputs from both methods are equally weighted. The market approach is a technique where the fair value is calculated based on fair values of publicly-traded companies that provide a reasonable basis of comparison with the reporting unit. Valuation ratios are selected that relate market prices to selected financial metrics from comparable companies. These ratios are applied after consideration of adjustments and weightings related to financial position, growth, volatility, working capital movement and other factors. Due to the fact that stock prices of comparable companies represent minority interests, the Company also considers an acquisition control premium to reflect the impact of additional value associated with a controlling interest. The income approach is a technique where the fair value is calculated based on present value of future cash flows using risk-adjusted discount rates, which represent the weighted-average cost of capital ("WACC") for each reporting unit. Determination of WACC includes assessing the cost of equity and debt as of the valuation date. In addition, a terminal value is developed for forecasted future cash flows beyond the projection period discounted back to the present value. The forecasts used in the Company’s estimation of fair value are developed by management based on business and market considerations. The goodwill impairment test process and valuation model is based upon certain key assumptions that require the exercise of significant judgment and assumptions including the use of appropriate financial projections, economic expectations, WACC, expected long-term growth rates, as well as using available market data. Significant changes to these estimates and assumptions could adversely impact conclusions and actual future results may differ from the estimates. In addition, the identification of reporting units and the allocation of assets and liabilities to the reporting units when determining the carrying value of each reporting unit also requires judgment. |
Intangible Assets | Intangible Assets Acquired intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are amortized over the following periods: Estimated useful lives (in years) Program and contract intangibles 6-11 Backlog 1 Customer relationships 8 Software and technology 4-15 Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets with indefinite lives are not amortized but are assessed for impairment at the beginning of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses The Company classifies indirect costs incurred within or allocated to its U.S. Government customers as overhead (included in cost of revenues) or general and administrative expenses in the same manner as such costs are defined in the Company's disclosure statements under U.S. Government Cost Accounting Standards. Selling, general and administrative expenses include general and administrative, bid and proposal and internal research and development ("IR&D") expenses. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method in accordance with the accounting standard for income taxes. The asset and liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The Company records net deferred tax assets to the extent that it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. If the Company were to determine that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount or would no longer be able to realize its deferred income tax assets in the future as currently recorded, the Company would make an adjustment to the valuation allowance which would decrease or increase the provision for income taxes. The provision for federal, state, foreign and local income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. The Company recognizes liabilities for uncertain tax positions when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company recognizes interest and penalties related to uncertain tax positions in its income tax expense. |
Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period, net of an estimated forfeiture rate. The fair value of restricted stock awards and performance-based stock awards is based on the closing price of the Company's common stock on the date of grant. The fair value of stock option awards granted is based on using the Black-Scholes-Merton option pricing model. The estimation of stock option fair value requires management to make estimates and judgments about, among other things, employee exercise behavior, forfeiture rates and the expected volatility of Leidos common stock over the expected option term. These judgments directly affect the amount of compensation expense that will ultimately be recognized. |
Foreign Currency | Foreign Currency The financial statements of consolidated international subsidiaries, for which the functional currency is not the U.S. dollar, are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted average exchange rate over the reporting period for revenues, expenses, gains and losses. Translation adjustments are recorded as accumulated other comprehensive income (loss) in stockholders' equity. Gains and losses due to movements in foreign currency exchange rates, are recognized as " Other (expense) income, net " in the Company's consolidated statements of income. |
Accounting Standards Updates Adopted | Accounting Standards Updates Adopted During fiscal 2017, the Company adopted the following Accounting Standards Updates ("ASU"): In January 2017, the FASB issued ASU 2017-04, Intangibles-Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment . This ASU eliminates step two of the goodwill impairment test and simplifies how the amount of an impairment loss is determined. The update is effective for public companies in the beginning of fiscal year 2020 and shall be applied on a prospective basis. Early adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. The Company adopted the provisions of ASU 2017-04 prospectively in the first quarter of fiscal 2017 and the standard did not have a material effect on the Company's consolidated financial position, results of operations or cash flows. In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting . This ASU provides clarification on when to apply modification accounting for a stock-based award to reduce diversity in practice. The update is effective for public companies in the beginning of fiscal year 2018 and shall be applied on a prospective basis. Early adoption is permitted for public business entities. The Company adopted the provisions of ASU 2017-09 prospectively in the second quarter of fiscal 2017 and the standard did not have a material effect on the Company's consolidated financial position, results of operations or cash flows. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. This ASU clarifies guidance in how certain cash receipts and cash payments are presented and classified on the statement of cash flows to reduce diversity in practice. The update is effective for public companies in the beginning of fiscal 2018. The amendments should be applied using a retrospective transition method to each period presented. For items that are impractical to apply the amendments retrospectively, they shall be applied prospectively as of the earliest date practicable. Early adoption is permitted. The Company early adopted the provisions of ASU 2016-15 in the third quarter of fiscal 2017, and the adoption did not have a material impact on the Company's consolidated statement of cash flows. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, a revised guidance that requires restricted cash and restricted cash equivalents to be included within beginning and ending total cash amounts reported in the consolidated statements of cash flows. The ASU requires disclosure of the nature of the restrictions on cash balances along with a reconciliation of the amount of cash and cash equivalents, as presented on the balance sheet, to the amount of cash, cash equivalents and restricted cash, as presented on the statement of cash flows. The update is effective for public companies in the beginning of fiscal year 2018, and should be applied on a retrospective basis. Early adoption is permitted. The Company early adopted the provisions of ASU 2016-18 in the third quarter of fiscal 2017. As a result of adoption of this ASU, changes in restricted cash, which had previously been presented as operating activities, are now included within beginning and ending cash, cash equivalents and restricted cash balances on the consolidated statements of cash flows. Consequently, operating cash flows for fiscal 2017 and fiscal 2016 increased by $12 million and $3 million , respectively, with a corresponding increase in the total change in cash, cash equivalents and restricted cash for the respective periods. Operating cash flows for the 11-month period ended January 1, 2016, decreased $13 million , with a corresponding decrease in the total change in cash, cash equivalents and restricted cash (see "Note 19—Supplementary Cash Flow Information and Restricted Cash" for the disclosures required by this ASU). |
Accounting Standards Updates Issued But Not Yet Adopted | Accounting Standards Updates Issued But Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (ASC Topic 606) . This ASU superseded all revenue recognition requirements in Topic 605 “Revenue Recognition” and industry-specific guidance throughout the Industry Topics of the codification. The core principle of ASC 606 is that an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying this principle, an entity is required to identify the contract(s) with a customer, identify the performance obligations in the contract(s), determine the transaction price, allocate the transaction price to the performance obligations in the contract(s) and recognize revenue when (or as) the performance obligation is satisfied. The ASU also requires expanded disclosures to enable users of financial statements to understand the amount, timing risks and judgments related to revenue recognition and related cash flows, including how and when performance obligations are satisfied and the relationship between revenue recognized and changes in contract balances during a reporting period. The Company will adopt this ASU in the beginning of fiscal 2018 using the modified retrospective method. This method requires recording the cumulative effect of adoption of this ASU as an adjustment to the beginning balance of retained earnings and not restating prior comparative periods, and also requires certain additional disclosures in the initial year of adoption. As of December 29, 2017, the Company has substantially completed its evaluation of the impact of adoption of this ASU, including assessment of differences in the timing and/or method of revenue recognition for contracts, impact on business processes, systems and controls and the required disclosures. The Company is currently completing its assessment of adoption of the ASU on the contract awards and modifications during the fourth quarter of fiscal 2017, and also finalizing system reports related to the new disclosures. Based on the Company's current evaluation, Leidos does not expect the impact of adoption of ASC 606 to be material. The Company believes the timing of and amount of revenue recognition will largely remain consistent between the current revenue standard and ASC 606. For the majority of the Company's contracts, the Company will continue to recognize revenue over time because of the continuous transfer of control to the customer, using an input measure (e.g., cost incurred) to reflect progress. The Company currently expects that the impact of adoption of ASC 606 will primarily occur within certain contracts as a result of the identification of new performance obligations, and on contracts that currently use the units-of-delivery method of revenue recognition, which will convert to an over-time model from the current point-in-time model. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) . This ASU will supersede the current lease guidance under ASC 840 and makes several changes, such as requiring an entity to recognize a right-of-use asset and corresponding lease obligation in the balance sheet, classified as financing or operating, as appropriate. The update is effective for public companies in the beginning of fiscal 2019 and should be adopted under the modified retrospective approach. Early adoption is permitted. The Company is evaluating the provisions of ASU 2016-02 and its impact on the Company's consolidated financial position, results of operations and cash flows. In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. This ASU eliminates the requirement that a credit loss on a financial instrument be "probable" prior to recognition. Instead, a valuation allowance will be recorded to reflect an entity's current estimate of all expected credit losses, based on both historical and forecasted information related to an instrument. The update is effective for public companies in the beginning of fiscal 2020 and should be adopted using a modified-retrospective approach, which applies a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. A prospective approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date and loans and debt securities acquired with deteriorated credit quality. The guidance may be early-adopted for fiscal 2019. The Company is evaluating the provisions of ASU 2016-13 and its impact on the Company's consolidated financial position, results of operations and cash flows. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedge Activities . This ASU improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities. The update is effective for public companies in the beginning of fiscal 2019 and should be applied on a modified retrospective basis. Early adoption is permitted. The Company is evaluating the provisions of ASU 2017-12 and its impact on the Company's consolidated financial position, results of operations and cash flows. |
Summary of Significant Accoun33
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Accounting Policies [Abstract] | |
Schedule of Change in Accounting Estimate | Changes in estimates on contracts for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions, except for per share amounts) Net favorable impact to income from continuing operations before taxes $ 103 $ 37 $ 18 Impact on diluted EPS from continuing operations attributable to Leidos common stockholders $ 0.41 $ 0.22 $ 0.14 |
Schedule of Depreciation using Estimated Useful Lives | Depreciation is recognized using the methods and estimated useful lives as follows: Depreciation method Estimated useful lives (in years) Computers and other equipment Straight-line or declining-balance 2-10 Buildings Straight-line Not to exceed 40 Building improvements and leasehold improvements Straight-line Shorter of useful life of asset or remaining lease term Office furniture and fixtures Straight-line or declining-balance 6-9 Property, plant and equipment, net consisted of the following: December 29, December 30, (in millions) Computers and other equipment $ 194 $ 172 Leasehold improvements 171 161 Buildings and improvements 54 104 Office furniture and fixtures 34 35 Land 49 57 Construction in progress 44 12 546 541 Less: accumulated depreciation and amortization (314 ) (282 ) $ 232 $ 259 |
Schedule of Finite-Lived Intangible Assets | Intangible assets with finite lives are amortized over the following periods: Estimated useful lives (in years) Program and contract intangibles 6-11 Backlog 1 Customer relationships 8 Software and technology 4-15 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The Company incurred the following expenses related to the acquisition and integration of the IS&GS Business: 12 Months Ended December 29, December 30, (in millions) Acquisition costs $ 25 $ 44 Integration costs 77 46 Total acquisition and integration costs $ 102 $ 90 The final purchase consideration for the acquisition of the IS&GS Business was as follows (in millions): Value of common stock issued to Lockheed Martin stockholders (1) $ 2,929 Equity consideration for replacement awards (2) 9 Working capital adjustments (3) 81 Purchase price $ 3,019 (1) Represents approximately 77 million new shares of Leidos common stock issued to those Lockheed Martin stockholders who elected to participate in the exchange offer, based on the Company's August 16, 2016, closing share price of $51.69 , less the Leidos special cash dividend amount of $13.64 , which the Lockheed Martin stockholders were not entitled to receive. (2) Represents a portion of the $23 million total fair value of replacement equity-based awards attributable to the pre-Merger service period. The remaining $12 million , net of estimated forfeitures, will be recognized as stock-based compensation expense over the remaining requisite service period (see "Note 15—Stock-Based Compensation"). (3) In January 2018, the Company finalized its net working capital at $105 million . The additional $24 million was recorded as acquisition costs in the consolidated statements of income. |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The final fair values of the assets acquired and liabilities assumed at the date of the Transactions were as follows (in millions): Cash $ 25 Receivables, net 938 Inventory, prepaid expenses and other current assets 73 Property, plant and equipment 87 Intangible assets 1,194 Other assets 58 Accounts payable and accrued liabilities (733 ) Accrued payroll and employee benefits (186 ) Long-term debt, current portion (23 ) Deferred tax liabilities (328 ) Long-term debt, net of current portion (1,780 ) Other long-term liabilities (45 ) Total identifiable net liabilities assumed (720 ) Non-controlling interest (13 ) Goodwill 3,752 Purchase price $ 3,019 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | The Company identified $1.2 billion of intangible assets, representing program and contract intangibles, backlog and software and technology. The fair value measurements were primarily based on significant inputs that are not observable in the market and represent a Level 3 measurement (see "Note 5—Fair Value Measurements"). The income approach was primarily used to value the intangible assets, consisting primarily of acquired program and contract intangibles and backlog. The income approach indicates value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flow is discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money. The following table summarizes the fair value of intangible assets acquired at the date of acquisition and the related weighted average amortization period: Weighted average amortization period Fair value (in years) (in millions) Program and contract intangibles (1) 9.7 $ 1,011 Backlog 1.8 157 Software and technology (1) 4.6 26 Total 8.6 $ 1,194 (1) The weighted average amortization period is estimated based on the projected economic benefits associated with these assets. Refer to "Note 7—Intangible Assets" for additional information. |
Business Acquisition, Pro Forma Information | The pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had been completed on January 31, 2015, nor is it intended to be an indication of future operating results. 12 Months Ended 11 Months Ended (unaudited) December 30, January 1, (in millions, except for per share amounts) Revenues $ 10,443 $ 9,868 Income from continuing operations 340 336 Income from continuing operations attributable to Leidos common stockholders 335 331 Earnings per share: Basic $ 2.23 $ 2.21 Diluted $ 2.20 $ 2.19 |
Divestitures (Tables)
Divestitures (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
SAIC | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |
Schedule of Discontinued Operations | The operating results of activities related to the Company's distribution agreement with New SAIC for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Revenues $ 10 $ 14 $ 17 Cost of revenues 10 14 17 Operating income $ — $ — $ — |
Restructuring Expenses (Tables)
Restructuring Expenses (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | The restructuring expenses related to this program were as follows: 12 Months Ended December 29, December 30, (in millions) Severance costs $ 18 $ 10 Lease termination expenses 19 2 Restructuring expenses related to the IS&GS Business in operating income $ 37 $ 12 |
Schedule of Restructuring Reserve | The related restructuring liability related to this program was as follows: Severance Costs Lease Termination Expenses Total (in millions) Balance as of January 1, 2016 $ — $ — $ — Charges 10 2 12 Cash payments (3 ) (1 ) (4 ) Balance as of December 30, 2016 7 1 8 Charges 18 19 37 Cash payments (20 ) (16 ) (36 ) Balance as of December 29, 2017 $ 5 $ 4 $ 9 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The Company's financial assets measured on a recurring basis at fair value consisted of the following: December 29, 2017 December 30, 2016 Carrying value Fair value Carrying value Fair value (in millions) Derivatives $ 37 $ 37 $ 29 $ 29 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Goodwill by Segment | The following table presents changes in the carrying amount of goodwill by reportable segment: Defense Solutions Civil Health Total (in millions) Goodwill at January 1, 2016 (1) $ 792 $ 244 $ 171 $ 1,207 Acquisition of the IS&GS Business 1,162 1,487 766 3,415 Goodwill at December 30, 2016 (1) 1,954 1,731 937 4,622 Adjustment to original purchase price allocation 94 259 (16 ) 337 Foreign currency translation adjustments 7 8 — 15 Goodwill at December 29, 2017 (1) $ 2,055 $ 1,998 $ 921 $ 4,974 (1) Carrying amount includes accumulated impairment losses of $369 million and $117 million within the Health and Civil segments, respectively. |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets Including Estimates of Assets Acquired | Intangible assets consisted of the following: December 29, 2017 December 30, 2016 Gross Accumulated Net Gross Accumulated Net (in millions) Finite-lived intangible assets: Program and contract intangibles $ 1,013 $ (187 ) $ 826 $ 1,450 $ (25 ) $ 1,425 Backlog 158 (158 ) — 200 (54 ) 146 Software and technology 89 (64 ) 25 61 (48 ) 13 Customer relationships 4 (3 ) 1 6 (5 ) 1 Total finite-lived intangible assets 1,264 (412 ) 852 1,717 (132 ) 1,585 Indefinite-lived intangible assets: Trade names 4 — 4 4 — 4 Total intangible assets $ 1,268 $ (412 ) $ 856 $ 1,721 $ (132 ) $ 1,589 |
Schedule of Amortization Expense for Finite-Lived Intangible Assets | The estimated annual amortization expense related to finite-lived intangible assets as of December 29, 2017, is as follows: Fiscal Year Ending (in millions) 2018 $ 202 2019 172 2020 128 2021 106 2022 92 2023 and thereafter 152 $ 852 |
Receivables (Tables)
Receivables (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Receivables [Abstract] | |
Schedule of Accounts Receivable | The components of receivables, net consisted of the following: December 29, December 30, (in millions) Billed receivables $ 771 $ 847 Unbilled receivables 1,074 821 Allowance for doubtful accounts (14 ) (11 ) $ 1,831 $ 1,657 |
Property Plant and Equipment (T
Property Plant and Equipment (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation is recognized using the methods and estimated useful lives as follows: Depreciation method Estimated useful lives (in years) Computers and other equipment Straight-line or declining-balance 2-10 Buildings Straight-line Not to exceed 40 Building improvements and leasehold improvements Straight-line Shorter of useful life of asset or remaining lease term Office furniture and fixtures Straight-line or declining-balance 6-9 Property, plant and equipment, net consisted of the following: December 29, December 30, (in millions) Computers and other equipment $ 194 $ 172 Leasehold improvements 171 161 Buildings and improvements 54 104 Office furniture and fixtures 34 35 Land 49 57 Construction in progress 44 12 546 541 Less: accumulated depreciation and amortization (314 ) (282 ) $ 232 $ 259 |
Composition of Certain Financ42
Composition of Certain Financial Statement Captions (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Disclosure Schedule Of Certain Financial Statement Captions [Abstract] | |
Schedule of Certain Financial Statement Captions | Balance Sheet December 29, December 30, (in millions) Inventory, prepaid expenses and other current assets: Prepaid expenses $ 90 $ 90 Inventory 76 67 Pre-contract costs 64 33 Transition costs and project assets 59 62 Prepaid income taxes and tax refunds receivable 54 13 Short-term notes receivable 40 3 Restricted cash 32 20 Other 38 60 $ 453 $ 348 Other assets: Investment in rabbi trust $ 58 $ 48 Derivatives 37 29 Equity method investments (1) 37 20 Deferred costs 24 31 Long-term notes receivables 23 89 Other 75 48 $ 254 $ 265 Accounts payable and accrued liabilities: Accrued liabilities $ 747 $ 493 Accounts payable 557 591 Collections in excess of revenues and deferred revenue 293 246 Tax indemnity liability 23 — Provision for loss contracts 19 97 $ 1,639 $ 1,427 Accrued payroll and employee benefits: Salaries, bonuses and amounts withheld from employees’ compensation $ 245 $ 211 Accrued vacation 236 244 Accrued contributions to employee benefit plans 6 28 $ 487 $ 483 Other long-term liabilities: Deferred compensation $ 56 $ 48 Lease related obligations 33 37 Deferred revenue 17 20 Liabilities for uncertain tax positions 7 5 Tax indemnity liability 1 31 Accrued pension liabilities — 6 Other 15 57 $ 129 $ 204 (1) Net of $30 million and $10 million of dividends received during fiscal 2017 and fiscal 2016, respectively, that were recorded in cash flows provided by operating activities of continuing operations on the consolidated statements of cash flows. 12 Months Ended 11 Months Ended Income Statement December 29, December 30, January 1, (in millions) Other (expense) income, net Promissory note impairment $ (33 ) $ — $ — Gain (loss) on foreign currency 5 (18 ) — Gain on sale of former headquarters — — 82 Other income, net 2 5 2 $ (26 ) $ (13 ) $ 84 |
Income Statement | 12 Months Ended 11 Months Ended Income Statement December 29, December 30, January 1, (in millions) Other (expense) income, net Promissory note impairment $ (33 ) $ — $ — Gain (loss) on foreign currency 5 (18 ) — Gain on sale of former headquarters — — 82 Other income, net 2 5 2 $ (26 ) $ (13 ) $ 84 |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The fair value of the interest rate swaps was as follows: Balance sheet line item December 29, December 30, (in millions) Fair value interest rate swaps Other assets $ — $ 3 Cash flow interest rate swaps Other assets 37 26 $ 37 $ 29 |
Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location | The effect of the Company's cash flow hedges on other comprehensive income and earnings for the periods presented was as follows: 12 Months Ended December 29, December 30, (in millions) Effective portion recognized in other comprehensive income $ 10 $ 22 Effective portion reclassified from accumulated other comprehensive income (loss) to interest expense — 2 Ineffective portion recognized in other (expense) income, net 1 2 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Notes Payable and Long-Term Debt | The Company's debt consisted of the following: Stated Effective December 29, 2017 (1) December 30, 2016 (1) (in millions) Senior secured notes: $450 million notes, due December 2020 4.45 % 4.53 % $ 449 $ 451 $300 million notes, due December 2040 5.95 % 6.03 % 216 216 Senior secured term loans: $400 million Term Loan A, due August 2019 — % — % — 123 $690 million Term Loan A, due August 2022 3.13 % 3.61 % 644 676 $310 million Term Loan A, due August 2022 3.13 % 3.60 % 270 304 $1,131 million Term Loan B, due August 2023 3.38 % 3.74 % 1,101 1,110 Senior unsecured notes: $250 million notes, due July 2032 7.13 % 7.43 % 246 246 $300 million notes, due July 2033 5.50 % 5.88 % 158 158 Capital leases and notes payable due on various dates through fiscal 2022 0%-5.55% Various 27 3 Total long-term debt 3,111 3,287 Less: current portion 55 62 Total long-term debt, net of current portion $ 3,056 $ 3,225 (1) The carrying amounts of the senior secured term loans and notes and unsecured notes as of December 29, 2017, and December 30, 2016, include the remaining principal outstanding of $3,129 million and $3,336 million , respectively, plus an immaterial amount and $3 million , respectively, related to the fair value of the interest rate swaps (see "Note 11—Derivative Instruments"), less unamortized debt discounts of $35 million and $46 million , respectively, less deferred debt issuance costs of $10 million and $9 million , respectively. |
Schedule of Maturities of Notes Payable and Long-Term Debt | Future minimum payments of debt are as follows: Fiscal Year Ending (in millions) 2018 $ 55 2019 71 2020 582 2021 113 2022 642 2023 and thereafter 1,693 Total principal payments 3,156 Less: unamortized debt discount and issuance costs (45 ) Total long-term debt $ 3,111 |
Accumulated Other Comprehensi45
Accumulated Other Comprehensive Income (Loss) (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Loss | Changes in the components of accumulated other comprehensive income (loss) were as follows: Foreign currency translation adjustments Unrecognized (loss) gain on derivative instruments Pension liability adjustments Total accumulated other comprehensive income (loss) (in millions) Balance at January 30, 2015 $ 1 $ (5 ) $ (7 ) $ (11 ) Other comprehensive (loss) income (1 ) 1 5 5 Taxes — — (2 ) (2 ) Balance at January 1, 2016 — (4 ) (4 ) (8 ) Other comprehensive (loss) income (8 ) 26 1 19 Taxes 1 (10 ) 2 (7 ) Reclassification from accumulated other comprehensive income (loss) — (2 ) (6 ) (8 ) Balance at December 30, 2016 (7 ) 10 (7 ) (4 ) Other comprehensive income 36 10 9 55 Taxes (12 ) (6 ) — (18 ) Balance at December 29, 2017 $ 17 $ 14 $ 2 $ 33 |
Earnings (Loss) Per Share (EPS)
Earnings (Loss) Per Share (EPS) (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted Average Number of Shares Outstanding | The weighted average number of shares used to compute basic and diluted EPS attributable to Leidos stockholders were: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Basic weighted average number of shares outstanding 152 102 73 Dilutive common share equivalents—stock options and other stock awards 2 2 1 Diluted weighted average number of shares outstanding 154 104 74 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Stock-Based Compensation and Related Tax Benefits Recognized | Stock-based compensation and related tax benefits recognized under all plans were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Total stock-based compensation expense $ 43 $ 35 $ 30 Tax benefits recognized from stock-based compensation $ 17 $ 14 $ 12 |
Schedule of Weighted Average Grant-Date Fair Value And Assumptions Used | The Monte Carlo simulation assumptions used for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, Expected volatility 27.19 % 31.73 % 27.67 % Risk free rate of return 1.53 % 1.01 % 0.82 % Weighted average grant date stock price $ 53.73 $ 46.54 $ 42.61 The weighted average grant-date fair value and assumptions used to determine fair value of stock options granted for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, 2016 December 30, 2016 January 1, Weighted average grant-date fair value $ 11.53 $ 10.33 $ 9.54 $ 6.72 Expected term (in years) 4.7 4.7 4.8 4.7 Expected volatility 29.7 % 37.9 % 29.9 % 24.5 % Risk-free interest rate 1.9 % 1.2 % 1.3 % 1.4 % Dividend yield 2.5 % 2.7 % 2.5 % 2.9 % |
Schedule of Options Outstanding | Stock option activity for each of the periods presented was as follows: Shares of stock under stock options Weighted average exercise price Weighted average remaining contractual term Aggregate intrinsic value (in millions) (in years) (in millions) Outstanding at January 30, 2015 3.6 $ 38.50 4.0 $ 14 Options granted 0.6 42.64 Options forfeited or expired (0.9 ) 42.03 Options exercised (0.9 ) 38.53 9 Outstanding at January 1, 2016 2.4 $ 38.21 4.5 $ 43 Options granted 0.6 43.56 Special dividend adjustments 0.9 Options forfeited or expired (0.2 ) 34.98 Options exercised (0.4 ) 34.11 5 Outstanding at December 30, 2016 3.3 $ 29.77 4.1 70 Options granted 0.5 53.51 Options forfeited or expired (0.2 ) 35.72 Options exercised (0.8 ) 27.23 23 Outstanding at December 29, 2017 2.8 34.38 3.9 86 Exercisable at December 29, 2017 1.6 $ 29.13 2.7 $ 56 Vested and expected to vest in the future as of December 29, 2017 2.7 $ 33.98 3.8 $ 83 |
Schedule of activities related to exercise of stock options | The following table summarizes activity related to exercises of stock options: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Tax benefits from stock options exercised $ 7 $ 1 $ 1 Fair value of stock surrendered in payment of the exercise price for stock options exercised $ 2 $ 4 $ 3 Cash received from exercises of stock options $ 2 $ — $ — |
Schedule of Vesting Stock Award Activity | Restricted stock units activity for each of the periods presented was as follows: Shares of stock under stock awards Weighted average grant- date fair value (in millions) Unvested stock awards at January 30, 2015 3.0 $ 38.51 Awards granted 0.5 42.95 Awards forfeited (0.4 ) 40.10 Awards vested (0.8 ) 40.05 Unvested stock awards at January 1, 2016 2.3 $ 38.97 Awards granted 1.5 41.45 Awards forfeited (0.2 ) 40.88 Awards vested (1.1 ) 38.91 Unvested stock awards at December 30, 2016 2.5 $ 40.39 Awards granted 0.8 53.91 Awards forfeited (0.3 ) 45.89 Awards vested (1.0 ) 41.02 Unvested stock awards at December 29, 2017 2.0 $ 44.96 |
Schedule of Performance-Based Stock Award Activity | Performance-based stock award activity for each of the periods presented was as follows: Expected number of shares of stock to be issued under performance-based stock awards Weighted average grant- date fair value (in millions) Unvested at January 30, 2015 0.1 $ 37.70 Awards granted 0.2 44.30 Awards forfeited (0.1 ) 43.49 Unvested at January 1, 2016 0.2 $ 43.35 Awards granted 0.2 45.62 Unvested at December 30, 2016 0.4 $ 44.44 Awards granted 0.2 57.94 Awards vested (0.1 ) 42.85 Unvested at December 29, 2017 0.5 $ 50.34 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Income Tax Disclosure [Abstract] | |
Schedule of Provision for Income Taxes | The provision for income taxes related to continuing operations for the periods presented included the following: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Current: Federal and foreign $ 130 $ 88 $ 71 State 30 16 14 Deferred: Federal and foreign (141 ) (29 ) 20 State 10 (3 ) 7 Total $ 29 $ 72 $ 112 |
Schedule of Reconciliation of Provision for Income Taxes | A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate to income from continuing operations before income taxes for the periods presented was as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Amount computed at the statutory federal income tax rate (35%) $ 138 $ 111 $ 124 Change in statutory federal tax rate (125 ) — — State income taxes, net of federal tax benefit 31 8 14 Excess tax benefits from stock-based compensation (12 ) (8 ) — Capitalized transaction costs 9 7 — Change in valuation allowance for deferred tax assets 7 (8 ) (21 ) Research and development credits (7 ) (4 ) (4 ) Dividends paid to employee stock ownership plan (4 ) (38 ) (3 ) Impact of foreign operations (4 ) — — Change in accruals for uncertain tax positions — 1 (4 ) Other (4 ) 3 6 Total $ 29 $ 72 $ 112 Effective income tax rate 7.4 % 22.6 % 31.5 % |
Schedule of Deferred Tax Assets (Liabilities) | Deferred income taxes are recorded for differences in the basis of assets and liabilities for financial reporting purposes and tax reporting purposes. Deferred tax assets (liabilities) were comprised of the following: December 29, December 30, (in millions) Reserves $ 62 $ 103 Capital loss carryover 60 81 Accrued vacation and bonuses 54 89 Credits and net operating losses carryovers 33 35 Deferred compensation 22 38 Vesting stock awards 17 23 Deferred rent and tenant allowances 10 16 Investments 2 3 Employee benefit contributions — 3 Other 18 17 Total deferred tax assets 278 408 Valuation allowance (83 ) (102 ) Deferred tax assets, net of valuation allowance 195 306 Purchased intangible assets (340 ) (748 ) Deferred revenue (34 ) (42 ) Partnership interest (17 ) (14 ) Accumulated other comprehensive income (13 ) (8 ) Employee benefit contributions (3 ) — Fixed asset basis differences — (11 ) Other (8 ) (7 ) Total deferred tax liabilities (415 ) (830 ) Net deferred tax liabilities $ (220 ) $ (524 ) |
Schedule of Net Deferred Tax Assets | Net deferred tax assets (liabilities) were as follows: December 29, December 30, (in millions) Net non-current deferred tax assets $ — $ 16 Net non-current deferred tax liabilities (220 ) (540 ) Total net deferred tax liabilities $ (220 ) $ (524 ) |
Schedule of Changes in Unrecognized Tax Benefits | The changes in the unrecognized tax benefits, excluding accrued interest and penalties, were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Unrecognized tax benefits at beginning of year $ 9 $ 11 $ 17 Additions for tax positions related to current year 2 1 5 Additions for tax positions related to prior years 2 4 4 Reductions for tax positions related to prior years (3 ) (7 ) (15 ) Unrecognized tax benefits at end of year $ 10 $ 9 $ 11 Unrecognized tax benefits that, if recognized, would affect the effective income tax rate $ 7 $ 4 $ 7 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Leases [Abstract] | |
Schedule of Rental Expense for Facilities and Equipment | Rental expense for facilities and equipment for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Gross rental expense $ 181 $ 107 $ 83 Less: sublease income (3 ) (2 ) (8 ) Net rental expense $ 178 $ 105 $ 75 |
Schedule of Future Minimum Lease Commitments and Sublease Receipts under Non-Cancelable Operating Leases | Future minimum lease commitments and sublease receipts, under non-cancelable operating leases in effect at December 29, 2017, are as follows: Fiscal Year Ending Operating lease Sublease (in millions) 2018 $ 140 $ 2 2019 107 1 2020 78 1 2021 53 1 2022 39 — 2023 and thereafter 78 — Total $ 495 $ 5 |
Supplementary Cash Flow Infor50
Supplementary Cash Flow Information (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of Supplementary Cash Flow Information | Supplementary cash flow information, including non-cash activities, for the periods presented was as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Supplementary cash flow information: Cash paid for income taxes, net of refunds $ 214 $ 47 $ 31 Cash paid for interest 133 90 50 Non-cash investing activity: Stock issued for acquisition of the IS&GS Business $ — $ 2,938 $ — Promissory note, net received for disposition of business — — 72 Promissory note, net received from a real estate sale — — 20 Non-cash financing activity: Capital lease and notes payable obligations $ 27 $ — $ 6 Dividends declared and other 3 21 2 The following is a reconciliation of cash and cash equivalents, as reported within the consolidated balance sheets, to the total cash, cash equivalents and restricted cash, as reported within the consolidated statements of cash flows, as required by the adoption of ASU 2016-18 (see "Note 1—Summary of Significant Accounting Policies"): December 29, December 30, (in millions) Cash and cash equivalents $ 390 $ 376 Restricted cash 32 20 Total cash, cash equivalents and restricted cash $ 422 $ 396 |
Business Segments (Tables)
Business Segments (Tables) | 12 Months Ended |
Dec. 29, 2017 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | The following table summarizes business segment information for the periods presented: 12 Months Ended 11 Months Ended December 29, December 30, January 1, (in millions) Revenues: Defense Solutions $ 4,959 $ 3,843 $ 3,009 Civil 3,409 2,082 1,141 Health 1,802 1,117 556 Corporate — 1 6 Total revenues $ 10,170 $ 7,043 $ 4,712 Operating income (loss): Defense Solutions $ 307 $ 312 $ 260 Civil 226 146 33 Health 228 110 46 Corporate (202 ) (151 ) (19 ) Total operating income $ 559 $ 417 $ 320 Amortization of intangible assets: Defense Solutions $ 108 $ 17 $ — Civil 132 39 6 Health 41 28 2 Total amortization of intangible assets $ 281 $ 84 $ 8 |
Schedule of Total Revenue Percentages Contributable to Specific Government Agencies | The percentages of total revenues for the U.S. Government, its agencies and other customers comprising more than 10% of total revenues in any of the periods for the periods presented were as follows: 12 Months Ended 11 Months Ended December 29, December 30, January 1, U.S. Government 84 % 81 % 76 % U.S. DoD 47 % 56 % 64 % U.S. Army 13 % 14 % 14 % Maryland Procurement Office 5 % 7 % 10 % |
Summary of Significant Accoun52
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016USD ($) | Dec. 29, 2017USD ($)Segment | Dec. 30, 2016USD ($) | |
Significant Accounting Policies [Line Items] | |||
Number of reportable segments | Segment | 3 | ||
Accounts payable and accrued liabilities | $ 1,639 | $ 1,427 | |
Internal research and development costs included in selling, general and administrative expenses | $ 29 | 42 | 44 |
Increase (decrease) in cash and cash equivalent including restricted cash | 200 | 26 | (277) |
Net (decrease) increase in cash, cash equivalents and restricted cash from continuing operations | 201 | $ 26 | (276) |
Customer relationships | |||
Significant Accounting Policies [Line Items] | |||
Useful life of intangible assets (in years) | 8 years | ||
Programs and contract intangibles | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Useful life of intangible assets (in years) | 6 years | ||
Programs and contract intangibles | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Useful life of intangible assets (in years) | 11 years | ||
Software and technology | Minimum | |||
Significant Accounting Policies [Line Items] | |||
Useful life of intangible assets (in years) | 4 years | ||
Software and technology | Maximum | |||
Significant Accounting Policies [Line Items] | |||
Useful life of intangible assets (in years) | 15 years | ||
Backlog | |||
Significant Accounting Policies [Line Items] | |||
Useful life of intangible assets (in years) | 1 year | ||
Accounting Standards Update 2016-18 | New Accounting Pronouncement, Early Adoption, Effect | |||
Significant Accounting Policies [Line Items] | |||
Increase (decrease) in cash and cash equivalent including restricted cash | 13 | $ 12 | 3 |
Net (decrease) increase in cash, cash equivalents and restricted cash from continuing operations | $ (13) | $ 12 | 3 |
Mission Supporting Alliance | |||
Significant Accounting Policies [Line Items] | |||
Voting interest (in percentage) | 47.00% | ||
Cash and Cash Equivalents | |||
Significant Accounting Policies [Line Items] | |||
Accounts payable and accrued liabilities | $ 169 | $ 67 | |
Subsidiaries | |||
Significant Accounting Policies [Line Items] | |||
Ownership interest (in percentage) | 100.00% |
Summary of Significant Accoun53
Summary of Significant Accounting Policies - Schedule of Depreciation using Estimated Useful Lives (Detail) | 12 Months Ended |
Dec. 29, 2017 | |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 2 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 10 years |
Building | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 40 years |
Building improvements and leasehold improvements | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | Shorter of useful life of asset or remaining lease term |
Office furniture and fixtures | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 6 years |
Office furniture and fixtures | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated useful lives (in years) | 9 years |
Summary of Significant Accoun54
Summary of Significant Accounting Policies (Changes in Estimates on Contracts) (Details) - USD ($) $ / shares in Units, $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Accounting Policies [Abstract] | |||
Net favorable impact to income from continuing operations before taxes | $ 18 | $ 103 | $ 37 |
Impact on diluted EPS from continuing operations attributable to Leidos common stockholders | $ 0.14 | $ 0.41 | $ 0.22 |
Acquisitions (Lockheed Martin M
Acquisitions (Lockheed Martin Merger) (Details) $ / shares in Units, shares in Millions | Jan. 18, 2018USD ($) | Aug. 22, 2016USD ($) | Aug. 16, 2016USD ($)director$ / sharesshares | Aug. 15, 2016$ / shares | Jan. 01, 2016USD ($) | Dec. 29, 2017USD ($) | Dec. 30, 2016USD ($)$ / shares |
Business Acquisition [Line Items] | |||||||
Special cash dividend (usd per share) | $ / shares | $ 13.64 | ||||||
Share price (usd per share) | $ / shares | $ 51.69 | ||||||
Adjustment to original purchase price allocation | $ 337,000,000 | ||||||
Amortization of intangible assets | $ 0 | 14,000,000 | $ 0 | ||||
Depreciation | $ 33,000,000 | 55,000,000 | 38,000,000 | ||||
Acquisition related costs | 24,000,000 | ||||||
Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares Lockheed Martin shareholders will receive from Leidos | shares | 77 | ||||||
Number of shares Lockheed Martin shareholders will receive from Leidos, as a percentage of Leidos common stock (in percentage) | 50.50% | ||||||
Percentage of common stock retained by the Leidos ( in percentage) | 49.50% | ||||||
Leidos Innovations Corporation indebtedness assumed | $ 1,800,000,000 | ||||||
Special cash dividend (usd per share) | $ / shares | $ 13.64 | ||||||
Special dividend declared | $ 993,000,000 | 993,000,000 | |||||
Number of directors | director | 12 | ||||||
Increase in number of directors | director | 3 | ||||||
Adjustment to original purchase price allocation | 337,000,000 | ||||||
Non-controlling interest | $ 13,000,000 | ||||||
Goodwill, expected tax deductible, amount | 414,000,000 | ||||||
Intangible assets acquired | 1,194,000,000 | ||||||
Acquisition related costs | $ 44,000,000 | ||||||
Abacus Innovations Corporation (Splitco) | Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Debt financing | 1,800,000,000 | ||||||
Payments to parent, special payment | 1,800,000,000 | ||||||
Secured Debt | Term Loan A $690 Million due August 2022 | Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Leidos Innovations Corporation indebtedness assumed | 690,000,000 | ||||||
Revolving Credit Facility | Line of Credit | |||||||
Business Acquisition [Line Items] | |||||||
Unsecured borrowing capacity | 750,000,000 | ||||||
Revolving Credit Facility | Line of Credit | Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Unsecured borrowing capacity | 750,000,000 | ||||||
Additional paid-in capital | Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued (shares) | $ 29,000,000 | 29,000,000 | |||||
Restricted Stock Units (RSUs) | Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Stock issued during the period (shares) | $ 23,000,000 | ||||||
Compensation not yet recognized | 12,000,000 | ||||||
Selling, General and Administrative Expenses | Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Amortization of intangible assets | 7,000,000 | ||||||
Selling, General and Administrative Expenses and Cost of Revenue | Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Depreciation | $ 7,000,000 | ||||||
Subsequent Event | Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Business Acquisition [Line Items] | |||||||
Net working capital | $ 105,000,000 |
Acquisitions (Break-up of Purch
Acquisitions (Break-up of Purchase Price Allocation) (Details) - Information Systems & Global Solutions Business of Lockheed Martin - USD ($) $ in Millions | Aug. 16, 2016 | Dec. 29, 2017 |
Business Acquisition [Line Items] | ||
Value of common stock issued to Lockheed Martin stockholders | $ 2,929 | |
Equity consideration for replacement awards | 9 | $ 9 |
Working capital adjustments | 81 | |
Purchase price | 3,019 | |
Leidos Innovations Corporation indebtedness assumed | $ 1,800 |
(Estimated Fair Values of Asset
(Estimated Fair Values of Assets Acquired and Liabilities Assumed) (Detail) - USD ($) $ in Millions | Dec. 29, 2017 | Dec. 30, 2016 | Aug. 16, 2016 | Jan. 01, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 4,974 | $ 4,622 | $ 1,207 | |
Information Systems & Global Solutions Business of Lockheed Martin | ||||
Business Acquisition [Line Items] | ||||
Cash | $ 25 | |||
Receivables, net | 938 | |||
Inventory, prepaid expenses and other current assets | 73 | |||
Property, plant and equipment | 87 | |||
Intangible assets | 1,194 | |||
Other assets | 58 | |||
Accounts payable and accrued liabilities | (733) | |||
Accrued payroll and employee benefits | (186) | |||
Long-term debt, current portion | (23) | |||
Deferred tax liabilities | (328) | |||
Long-term debt, net of current portion | (1,780) | |||
Other long-term liabilities | (45) | |||
Total identifiable net liabilities assumed | (720) | |||
Non-controlling interest | (13) | |||
Goodwill | 3,752 | |||
Purchase price | $ 3,019 |
Acquisitions (Schedule of Purch
Acquisitions (Schedule of Purchase Price Allocations Related to Acquisitions) (Detail) - USD ($) $ in Millions | Aug. 16, 2016 | Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 |
Business Acquisition [Line Items] | ||||
Acquisition and Integration Costs | $ 0 | $ 102 | $ 90 | |
Information Systems & Global Solutions Business of Lockheed Martin | ||||
Business Acquisition [Line Items] | ||||
Weighted average lives of finite-lived intangibles (years) | 8 years 7 months | |||
Intangible assets - Fair Value | $ 1,194 | |||
Acquisition costs | 25 | 44 | ||
Integration costs | 77 | 46 | ||
Acquisition and Integration Costs | $ 102 | $ 90 | ||
Information Systems & Global Solutions Business of Lockheed Martin | Program and contract intangibles | ||||
Business Acquisition [Line Items] | ||||
Weighted average lives of finite-lived intangibles (years) | 9 years 8 months | |||
Intangible assets - Fair Value | $ 1,011 | |||
Information Systems & Global Solutions Business of Lockheed Martin | Backlog | ||||
Business Acquisition [Line Items] | ||||
Weighted average lives of finite-lived intangibles (years) | 1 year 9 months | |||
Intangible assets - Fair Value | $ 157 | |||
Information Systems & Global Solutions Business of Lockheed Martin | Software and Technology, Intangible Asset | ||||
Business Acquisition [Line Items] | ||||
Weighted average lives of finite-lived intangibles (years) | 4 years 7 months | |||
Intangible assets - Fair Value | $ 26 |
Acquisitions Pro Forma Informat
Acquisitions Pro Forma Information (Details) - Information Systems & Global Solutions Business of Lockheed Martin - USD ($) $ / shares in Units, $ in Millions | 11 Months Ended | 12 Months Ended |
Jan. 01, 2016 | Dec. 29, 2017 | |
Business Acquisition [Line Items] | ||
Revenues | $ 9,868 | $ 10,443 |
Income from continuing operations | $ 336 | $ 340 |
Earnings per share: | ||
Basic (in usd per share) | $ 2.21 | $ 2.23 |
Diluted (in usd per share) | $ 2.19 | $ 2.20 |
Leidos Holdings, Inc | ||
Business Acquisition [Line Items] | ||
Income from continuing operations | $ 331 | $ 335 |
Divestitures - (Additional Inf
Divestitures - (Additional Information) (Detail) $ in Millions | Jul. 24, 2015USD ($)extension | Jul. 23, 2015USD ($) | Apr. 30, 2016USD ($) | Jul. 03, 2015USD ($) | Jan. 01, 2016USD ($) | Dec. 29, 2017USD ($) | Dec. 30, 2016USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2015 | Jan. 30, 2015USD ($) | Oct. 11, 2013MW |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Proceeds from disposition of business | $ 27 | $ 0 | $ 23 | ||||||||
Accounts payable and accrued liabilities | 1,639 | 1,427 | |||||||||
Promissory note, net received for disposition of business | 72 | 0 | 0 | ||||||||
Promissory note impairment | $ 0 | (33) | 0 | ||||||||
Proceeds from U.S. Treasury cash grant | $ 80 | ||||||||||
Plainfield Renewal Energy Holdings LLC | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Discontinued operation, percentage of ownership sold (in percentage) | 100.00% | ||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Plainfield Renewal Energy Holdings LLC | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Asset impairment charges | $ 29 | ||||||||||
Discontinued operation, consideration | $ 102 | ||||||||||
Cash payment on closing | 29 | ||||||||||
Promissory note, net received for disposition of business | 73 | ||||||||||
Contingent earn-out payments | $ 30 | ||||||||||
Note receivable, option to extend for one year period, number | extension | 3 | ||||||||||
Note receivable, interest rate, stated percentage (in percentage) | 6.00% | ||||||||||
Note receivable, interest rate, stated percentage, if maturity is extended beyond July 24, 2017 (in percentage), | 8.00% | ||||||||||
Stated interest rate, if maturity is extended beyond July 24, 2019 (in percentage) | 9.00% | ||||||||||
Note receivable, period of extension (in years) | 1 year | ||||||||||
Note receivable, deferred amount | $ 4 | ||||||||||
Collections on promissory note | 6 | $ 6 | |||||||||
Expected Settlement Amount | 40 | ||||||||||
Promissory note impairment | $ (33) | ||||||||||
Disposal Group, Disposed of by Sale, Not Discontinued Operations | Civil | One Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Proceeds from disposition of business | $ 23 | ||||||||||
Disposal group, account receivable | 73 | ||||||||||
Disposal group, non-current assets | 3 | ||||||||||
Disposal group, account payable and accrued liabilities | 63 | ||||||||||
Accounts payable and accrued liabilities | 6 | ||||||||||
Other Operating Income (Expense) | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Civil | One Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Gain on sale of business | 3 | ||||||||||
Selling costs | $ 1 | ||||||||||
Plainfield Renewal Energy Holdings LLC | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Contingent consideration arrangements | $ 2 | ||||||||||
Plainfield Renewal Energy Holdings LLC | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Capacity of power plant | MW | 37.5 |
Divestitures - (Operating Resul
Divestitures - (Operating Results Classified as Discontinued Operations) (Detail) - SAIC - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Discontinued Operation | |||
Revenues | $ 17 | $ 10 | $ 14 |
Cost of revenues | 17 | 10 | 14 |
Operating income | $ 0 | $ 0 | $ 0 |
Restructuring Expenses (Details
Restructuring Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 29, 2017 | Dec. 30, 2016 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring liability, period to settle, maximum (in years) | 1 year | |
IS&GS Acquisition | ||
Restructuring Reserve [Roll Forward] | ||
Opening balance | $ 8 | $ 0 |
Charges | 37 | 12 |
Cash payments | (36) | (4) |
Closing balance | 9 | 8 |
Severance costs | IS&GS Acquisition | ||
Restructuring Reserve [Roll Forward] | ||
Opening balance | 7 | 0 |
Charges | 18 | 10 |
Cash payments | (20) | (3) |
Closing balance | 5 | 7 |
Lease termination expenses | IS&GS Acquisition | ||
Restructuring Reserve [Roll Forward] | ||
Opening balance | 1 | 0 |
Charges | 19 | 2 |
Cash payments | (16) | (1) |
Closing balance | $ 4 | $ 1 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Dec. 29, 2017 | Dec. 30, 2016 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives | $ 37,000,000 | $ 29,000,000 |
Designated as Hedging Instrument | Interest rate swaps | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Hedged instrument, face amount | 1,500,000,000 | |
Designated as Hedging Instrument | Interest rate swaps | Notes Which Mature In December 2020 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Hedged instrument, face amount | $ 450,000,000 | |
Senior Notes | Designated as Hedging Instrument | Interest rate swaps | Notes Which Mature In December 2020 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Stated interest rate | 4.45% | |
Reported Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives | $ 37,000,000 | 29,000,000 |
Notes receivable, fair value disclosure | 63,000,000 | 92,000,000 |
Fair value of notes payable and long-term debt | 3,100,000,000 | 3,300,000,000 |
Estimate of Fair Value Measurement | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivatives | 37,000,000 | 29,000,000 |
Fair value of notes payable and long-term debt | $ 3,200,000,000 | $ 3,300,000,000 |
Goodwill (Schedule of Changes i
Goodwill (Schedule of Changes in Goodwill by Segment) (Detail) $ in Millions | 12 Months Ended | ||
Dec. 29, 2017USD ($)Segment | Dec. 30, 2016USD ($) | Jan. 01, 2016USD ($) | |
Goodwill [Line Items] | |||
Number of reportable segments | Segment | 3 | ||
Goodwill [Roll Forward] | |||
Beginning balance, Goodwill | $ 4,622 | $ 1,207 | |
Acquisition of the IS&GS Business | 3,415 | ||
Adjustment to original purchase price allocation | 337 | ||
Foreign currency translation adjustments | 15 | ||
Ending balance, Goodwill | 4,974 | 4,622 | |
Defense Solutions | |||
Goodwill [Roll Forward] | |||
Beginning balance, Goodwill | 1,954 | 792 | |
Acquisition of the IS&GS Business | 1,162 | ||
Adjustment to original purchase price allocation | 94 | ||
Foreign currency translation adjustments | 7 | ||
Ending balance, Goodwill | 2,055 | 1,954 | |
Civil | |||
Goodwill [Roll Forward] | |||
Beginning balance, Goodwill | 1,731 | 244 | |
Acquisition of the IS&GS Business | 1,487 | ||
Adjustment to original purchase price allocation | 259 | ||
Foreign currency translation adjustments | 8 | ||
Ending balance, Goodwill | 1,998 | 1,731 | |
Goodwill impairment charges | $ 117 | ||
Health | |||
Goodwill [Roll Forward] | |||
Beginning balance, Goodwill | 937 | 171 | |
Acquisition of the IS&GS Business | 766 | ||
Adjustment to original purchase price allocation | (16) | ||
Foreign currency translation adjustments | 0 | ||
Ending balance, Goodwill | $ 921 | $ 937 | |
Goodwill impairment charges | $ 369 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) $ in Millions | Dec. 29, 2017 | Dec. 30, 2016 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 1,264 | $ 1,717 |
Accumulated amortization | (412) | (132) |
Net carrying value | 852 | 1,585 |
Total intangible assets, Gross carrying value | 1,268 | 1,721 |
Total intangible assets, Net carrying value | 856 | 1,589 |
Program and contract intangibles | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 1,013 | 1,450 |
Accumulated amortization | (187) | (25) |
Net carrying value | 826 | 1,425 |
Backlog | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 158 | 200 |
Accumulated amortization | (158) | (54) |
Net carrying value | 0 | 146 |
Software and technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 89 | 61 |
Accumulated amortization | (64) | (48) |
Net carrying value | 25 | 13 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 4 | 6 |
Accumulated amortization | (3) | (5) |
Net carrying value | 1 | 1 |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | $ 4 | $ 4 |
Intangible Assets (Amortization
Intangible Assets (Amortization of Intangibles) (Details) - USD ($) $ in Millions | Dec. 29, 2017 | Dec. 30, 2016 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2,018 | $ 202 | |
2,019 | 172 | |
2,020 | 128 | |
2,021 | 106 | |
2,022 | 92 | |
2023 and thereafter | 152 | |
Net carrying value | $ 852 | $ 1,585 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Finite-Lived Intangible Assets [Line Items] | |||
Gross carrying value | $ 1,264 | $ 1,717 | |
Amortization of intangible assets | $ 8 | $ 281 | $ 84 |
Receivables (Details)
Receivables (Details) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
Billed receivables | $ 771 | $ 847 | |
Unbilled receivables | 1,074 | 821 | |
Allowance for doubtful accounts | (14) | (11) | |
Accounts receivable, net | 1,831 | 1,657 | |
Bad debt expense | $ 8 | $ 10 | $ 3 |
Property Plant and Equipment (D
Property Plant and Equipment (Details) - USD ($) $ in Millions | 1 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 31, 2015 | Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | $ 546 | $ 541 | ||
Less: accumulated depreciation and amortization | (314) | (282) | ||
Property, plant and equipment, net | 232 | 259 | ||
Depreciation | $ 33 | 55 | 38 | |
Write off of property disposed | $ 40 | 40 | ||
Computers and other equipment | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 194 | 172 | ||
Leasehold improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 171 | 161 | ||
Buildings and improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 54 | 104 | ||
Write off of property disposed | 29 | |||
Office furniture and fixtures | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 34 | 35 | ||
Land | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | 49 | 57 | ||
Write off of property disposed | $ 10 | |||
Construction in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, plant and equipment, gross | $ 44 | $ 12 |
Composition of Certain Financ70
Composition of Certain Financial Statement Captions (Schedule of Certain Financial Statement Captions) (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Inventory, prepaid expenses and other current assets: | |||
Prepaid expenses | $ 90 | $ 90 | |
Inventory | 76 | 67 | |
Short-term notes receivable | 64 | 33 | |
Transition costs and project assets | 59 | 62 | |
Prepaid income taxes and tax refunds receivable | 54 | 13 | |
Short-term notes receivable | 40 | 3 | |
Restricted cash | 32 | 20 | |
Other | 38 | 60 | |
Total inventory, prepaid expenses and other current assets | 453 | 348 | |
Other assets: | |||
Investment in rabbi trust | 58 | 48 | |
Derivatives | 37 | 29 | |
Equity method investments | 37 | 20 | |
Deferred costs | 24 | 31 | |
Long-term notes receivables | 23 | 89 | |
Other | 75 | 48 | |
Other Assets | 254 | 265 | |
Accounts payable and accrued liabilities: | |||
Accrued liabilities | 747 | 493 | |
Accounts payable | 557 | 591 | |
Collections in excess of revenues and deferred revenue | 293 | 246 | |
Tax indemnity liability | 23 | 0 | |
Provision for loss contracts | 19 | 97 | |
Total accounts payable and accrued liabilities | 1,639 | 1,427 | |
Accrued payroll and employee benefits: | |||
Salaries, bonuses and amounts withheld from employees’ compensation | 245 | 211 | |
Accrued vacation | 236 | 244 | |
Accrued contributions to employee benefit plans | 6 | 28 | |
Total Accrued payroll and employee benefits | 487 | 483 | |
Other long-term liabilities: | |||
Deferred compensation | 56 | 48 | |
Lease related obligations | 33 | 37 | |
Deferred revenue | 17 | 20 | |
Liabilities for uncertain tax positions | $ 5 | 7 | 5 |
Tax indemnity liability | 1 | 31 | |
Accrued pension liabilities | 0 | 6 | |
Other | 15 | 57 | |
Total other long-term liabilities | 129 | 204 | |
Other (expense) income, net | |||
Promissory note impairment | 0 | (33) | 0 |
Gain (loss) on foreign currency | 0 | 5 | (18) |
Gain on sale of former headquarters | 82 | 0 | 0 |
Other income, net | 2 | 2 | 5 |
Other (expense) income, net | $ 84 | (26) | (13) |
Dividends received from equity method investments | $ 30 | $ 10 |
Derivative Instruments and He71
Derivative Instruments and Hedging Activities (Details) - USD ($) | 12 Months Ended | |||
Dec. 29, 2017 | Dec. 30, 2016 | Sep. 29, 2017 | Aug. 31, 2016 | |
Derivative [Line Items] | ||||
Effective portion recognized in other comprehensive income | $ 10,000,000 | $ 22,000,000 | ||
Effective portion reclassified from accumulated other comprehensive income (loss) to interest expense | 0 | 2,000,000 | ||
Ineffective portion recognized in other (expense) income, net | 1,000,000 | 2,000,000 | ||
Loss to be recognized in the next 12 months | 8,000,000 | |||
Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Other assets | 37,000,000 | 29,000,000 | ||
Interest rate swaps | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Hedged instrument, face amount | 1,500,000,000 | |||
Interest rate swaps | Designated as Hedging Instrument | Notes Which Mature In December 2020 | ||||
Derivative [Line Items] | ||||
Hedged instrument, face amount | 450,000,000 | |||
Fair value adjustment | $ (3,000,000) | (5,000,000) | ||
Interest rate swaps | Notes Payable and Long Term Debt, Net of Current Portion | Designated as Hedging Instrument | Notes Which Mature In December 2020 | ||||
Derivative [Line Items] | ||||
Stated interest rate | 4.45% | |||
Fair value interest rate swaps | Interest rate swaps | Other assets | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Other assets | $ 0 | 3,000,000 | ||
Cash flow interest rate swaps | Interest rate swaps | Other assets | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Other assets | $ 37,000,000 | $ 26,000,000 | ||
Senior Notes | Interest rate swaps | Designated as Hedging Instrument | Notes Which Mature In December 2020 | ||||
Derivative [Line Items] | ||||
Stated interest rate | 4.45% | |||
Secured Debt | Interest Rate Swap, Maturity Date August 2022 | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Hedged instrument, face amount | $ 300,000,000 | |||
Stated interest rate | 1.66% | |||
Secured Debt | Interest rate swaps | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Hedged instrument, face amount | $ 1,200,000,000 | |||
Stated interest rate | 1.08% |
Debt (Summary of debt) (Detail)
Debt (Summary of debt) (Detail) - USD ($) | Dec. 29, 2017 | Aug. 31, 2017 | Dec. 30, 2016 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 3,111,000,000 | $ 3,287,000,000 | |
Less: current portion | 55,000,000 | 62,000,000 | |
Total long-term debt, net of current portion | 3,056,000,000 | 3,225,000,000 | |
Notes Which Mature In December 2020 | |||
Debt Instrument [Line Items] | |||
Senior secured notes: | $ 449,000,000 | 451,000,000 | |
Stated interest rate (in percentage) | 4.45% | ||
Effective interest rate | 4.53% | ||
Senior unsecured notes, face amount | $ 450,000,000 | ||
Notes Which Mature In December 2040 | |||
Debt Instrument [Line Items] | |||
Senior secured notes: | $ 216,000,000 | 216,000,000 | |
Stated interest rate (in percentage) | 5.95% | ||
Effective interest rate | 6.03% | ||
Senior unsecured notes, face amount | $ 300,000,000 | ||
Term Loan A Due August 2019 | |||
Debt Instrument [Line Items] | |||
Senior secured term loans: | $ 0 | 123,000,000 | |
Stated interest rate (in percentage) | 0.00% | ||
Effective interest rate | 0.00% | ||
Senior unsecured notes, face amount | $ 400,000,000 | ||
Term Loan A $690 Million due August 2022 | |||
Debt Instrument [Line Items] | |||
Senior secured term loans: | $ 644,000,000 | 676,000,000 | |
Stated interest rate (in percentage) | 3.13% | ||
Effective interest rate | 3.61% | ||
Senior unsecured notes, face amount | $ 690,000,000 | $ 690,000,000 | |
Term Loan A $310 Million Due August 2022 | |||
Debt Instrument [Line Items] | |||
Senior secured term loans: | $ 270,000,000 | 304,000,000 | |
Stated interest rate (in percentage) | 3.13% | ||
Effective interest rate | 3.60% | ||
Senior unsecured notes, face amount | $ 310,000,000 | ||
Term Loan B Due August 2023 | |||
Debt Instrument [Line Items] | |||
Senior secured term loans: | $ 1,101,000,000 | 1,110,000,000 | |
Stated interest rate (in percentage) | 3.38% | ||
Effective interest rate | 3.74% | ||
Senior unsecured notes, face amount | $ 1,131,000,000 | ||
Notes Which Mature In July 2032 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes: | $ 246,000,000 | 246,000,000 | |
Stated interest rate (in percentage) | 7.13% | ||
Effective interest rate | 7.43% | ||
Senior unsecured notes, face amount | $ 250,000,000 | ||
Notes Which Mature In July 2033 | |||
Debt Instrument [Line Items] | |||
Senior unsecured notes: | $ 158,000,000 | 158,000,000 | |
Stated interest rate (in percentage) | 5.50% | ||
Effective interest rate | 5.88% | ||
Senior unsecured notes, face amount | $ 300,000,000 | ||
Capital leases and notes payable due on various dates through fiscal 2022 | |||
Debt Instrument [Line Items] | |||
Capital leases and notes payable due on various dates through fiscal 2022 | $ 27,000,000 | $ 3,000,000 | |
Minimum | Capital leases and notes payable due on various dates through fiscal 2022 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 0.00% | ||
Maximum | Capital leases and notes payable due on various dates through fiscal 2022 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 5.55% |
Debt - Additional Information (
Debt - Additional Information (Detail) | Aug. 31, 2017USD ($) | Aug. 16, 2016USD ($) | Dec. 29, 2017USD ($) | Jan. 01, 2016USD ($) | Dec. 29, 2017USD ($) | Dec. 30, 2016USD ($) | Feb. 28, 2017USD ($) |
Debt Instrument [Line Items] | |||||||
Other Notes Payable | $ 21,000,000 | $ 21,000,000 | |||||
Long-term debt, gross | 3,129,000,000 | 3,129,000,000 | $ 3,336,000,000 | ||||
Derivatives | 37,000,000 | 37,000,000 | 29,000,000 | ||||
Unamortized discount | 35,000,000 | 35,000,000 | 46,000,000 | ||||
Debt issuance costs, net | 10,000,000 | 10,000,000 | 9,000,000 | ||||
Debt instrument, credit agreement, incremental available amount of funds, initial Value | $ 35,000,000 | ||||||
Debt instrument, annual fixed amount allowed per credit agreement | $ 250,000,000 | ||||||
Debt instrument, required prepayment amount equal to percentage of excess cash flow calculated based on secured leverage ratio greater than 2.75 (in percentage) | 50.00% | ||||||
Debt instrument, covenant, secured leverage ratio, for debt prepayment to be 50% of excess cash flow, minimum | 2.75 | ||||||
Debt instrument, required prepayment amount equal to percentage of excess cash flow calculated based on secured leverage ratio between 2.0 and 2.75, (in percentage) | 0.25 | ||||||
Debt instrument, covenant, secured leverage ratio, for debt prepayment to be 25% of excess cash flow, minimum | 2 | ||||||
Debt instrument, required prepayment amount equal to ratio less than 2.0 | $ 0 | ||||||
Notes Which Mature In December 2020 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 450,000,000 | $ 450,000,000 | |||||
Stated interest rate (in percentage) | 4.45% | 4.45% | |||||
Notes Which Mature In December 2040 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 300,000,000 | $ 300,000,000 | |||||
Stated interest rate (in percentage) | 5.95% | 5.95% | |||||
Notes Which Mature In July 2033 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 300,000,000 | $ 300,000,000 | |||||
Stated interest rate (in percentage) | 5.50% | 5.50% | |||||
Term Loan A Due August 2019 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 400,000,000 | $ 400,000,000 | |||||
Stated interest rate (in percentage) | 0.00% | 0.00% | |||||
Term Loan B Due August 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 1,131,000,000 | $ 1,131,000,000 | |||||
Stated interest rate (in percentage) | 3.38% | 3.38% | |||||
Term Loan A $690 Million due August 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 690,000,000 | $ 690,000,000 | $ 690,000,000 | ||||
Stated interest rate (in percentage) | 3.13% | 3.13% | |||||
Term Loan A $310 Million Due August 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 310,000,000 | $ 310,000,000 | |||||
Stated interest rate (in percentage) | 3.13% | 3.13% | |||||
Other Income, Net | |||||||
Debt Instrument [Line Items] | |||||||
Amortization of Debt Issuance Costs and Discounts | $ 1,000,000 | $ 13,000,000 | 6,000,000 | ||||
Senior Notes | Notes Which Mature In December 2040 | |||||||
Debt Instrument [Line Items] | |||||||
Retired principle amount | 14,000,000 | ||||||
Note payable, face amount | $ 300,000,000 | $ 300,000,000 | |||||
Stated interest rate (in percentage) | 5.95% | 5.95% | |||||
Secured Debt | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, decrease in basis points | 25.00% | ||||||
Repayment of debt, quarterly | $ 76,000,000 | ||||||
Repayments of term loan | 130,000,000 | 275,000,000 | |||||
Amortization of Debt Issuance Costs and Discounts | 2,000,000 | ||||||
Write off of deferred debt issuance cost | 5,000,000 | ||||||
Debt issuance costs, gross | 53,000,000 | ||||||
Secured Debt | Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, term, extension (in years) | 1 year | ||||||
Debt instrument, increase in quarterly payment, extension (in years) | 1 year | ||||||
Secured Debt | Term Loan B Due August 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 1,100,000,000 | ||||||
Stated interest rate (in percentage) | 2.25% | ||||||
Debt instrument, decrease in basis points | 50.00% | ||||||
Secured Debt | Term Loan A $310 Million Due August 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 310,000,000 | ||||||
Unsecured Debt | Notes Which Mature In July 2033 | |||||||
Debt Instrument [Line Items] | |||||||
Retired principle amount | 23,000,000 | ||||||
Note payable, face amount | $ 300,000,000 | $ 300,000,000 | |||||
Stated interest rate (in percentage) | 5.50% | 5.50% | |||||
Gain (loss) on extinguishment of debt | 1,000,000 | ||||||
Repayments of debt | $ 22,000,000 | ||||||
Interest rate swaps | Designated as Hedging Instrument | Fair value interest rate swaps | |||||||
Debt Instrument [Line Items] | |||||||
Derivatives | $ 3,000,000 | ||||||
Information Systems & Global Solutions Business of Lockheed Martin | |||||||
Debt Instrument [Line Items] | |||||||
Long-term debt | 1,800,000,000 | ||||||
Information Systems & Global Solutions Business of Lockheed Martin | Secured Debt | Term Loan A $690 Million due August 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Note payable, face amount | $ 690,000,000 | ||||||
LIBOR | Secured Debt | Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate (in percentage) | 1.75% | ||||||
LIBOR | Secured Debt | Term Loan B | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate (in percentage) | 2.00% | ||||||
LIBOR | Minimum | Secured Debt | Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate (in percentage) | 1.50% | ||||||
LIBOR | Maximum | Secured Debt | Term Loan A | |||||||
Debt Instrument [Line Items] | |||||||
Variable interest rate (in percentage) | 2.00% |
Debt (Schedule of Maturities of
Debt (Schedule of Maturities of Notes Payable and Long-Term Debt) (Detail) - USD ($) $ in Millions | Dec. 29, 2017 | Dec. 30, 2016 |
Note Payable and Long-Term Debt | ||
2,018 | $ 55 | |
2,019 | 71 | |
2,020 | 582 | |
2,021 | 113 | |
2,022 | 642 | |
2023 and thereafter | 1,693 | |
Total principal payments | 3,156 | |
Less: unamortized debt discount and issuance costs | (45) | |
Total long-term debt | $ 3,111 | $ 3,287 |
Debt (Revolving Credit Facility
Debt (Revolving Credit Facility) (Detail) | Dec. 29, 2017 | Aug. 16, 2016USD ($) | Aug. 15, 2016USD ($) |
Debt Instrument [Line Items] | |||
Ratio of consolidated funded debt to earnings before interest taxes depreciation and amortization numerator maximum, until Feb 16, 2018 | 4.75 | ||
Ratio of consolidated funded debt to earnings before interest taxes depreciation and amortization numerator maximum, from Feb 16, 2018 to Feb 16, 2019 | 4.25 | ||
Ratio of consolidated funded debt to earnings before interest taxes depreciation and amortization numerator, after Feb 16, 2019 | 3.75 | ||
Old Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Unsecured borrowing capacity | $ 500,000,000 | ||
Line of Credit | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Unsecured borrowing capacity | $ 750,000,000 | ||
Debt issuance costs, gross | $ 15,000,000 |
Accumulated Other Comprehensi76
Accumulated Other Comprehensive Income (Loss) (Schedule of Accumulated Other Comprehensive Income (Loss)) (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), before Tax, Portion Attributable to Parent | $ 5 | $ 55 | $ 19 |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, value | 998 | 3,147 | 1,068 |
Taxes | (2) | (18) | (7) |
Reclassification from accumulated other comprehensive income (loss) | (8) | ||
Balance, value | 1,068 | 3,383 | 3,147 |
Accumulated other comprehensive income (loss) | |||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, value | (11) | (4) | (8) |
Balance, value | (8) | 33 | (4) |
Foreign currency translation adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), before Tax, Portion Attributable to Parent | (1) | 36 | (8) |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, value | 1 | (7) | 0 |
Taxes | 0 | (12) | 1 |
Reclassification from accumulated other comprehensive income (loss) | 0 | ||
Balance, value | 0 | 17 | (7) |
Unrecognized (loss) gain on derivative instruments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), before Tax, Portion Attributable to Parent | 1 | 10 | 26 |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, value | (5) | 10 | (4) |
Taxes | 0 | (6) | (10) |
Reclassification from accumulated other comprehensive income (loss) | (2) | ||
Balance, value | (4) | 14 | 10 |
Pension liability adjustments | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Other Comprehensive Income (Loss), before Tax, Portion Attributable to Parent | 5 | 9 | 1 |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | |||
Balance, value | (7) | (7) | (4) |
Taxes | (2) | 0 | 2 |
Reclassification from accumulated other comprehensive income (loss) | (6) | ||
Balance, value | $ (4) | $ 2 | $ (7) |
Earnings Per Share (EPS) (Sched
Earnings Per Share (EPS) (Schedule of Basic and Diluted EPS) (Detail) - $ / shares | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Basic: | |||
Income from continuing operations attributable to Leidos common stockholders (usd per share) | $ 3.33 | $ 2.41 | $ 2.39 |
Discontinued operations, net of taxes (usd per share) | (0.01) | 0 | 0 |
Net income attributable to Leidos common stockholders (usd per share) | 3.32 | 2.41 | 2.39 |
Diluted: | |||
Income from continuing operations attributable to Leidos common stockholders (usd per share) | 3.28 | 2.38 | 2.35 |
Discontinued operations, net of taxes (usd per share) | (0.01) | 0 | 0 |
Net income attributable to Leidos common stockholders (usd per share) | $ 3.27 | $ 2.38 | $ 2.35 |
Earnings Per Share (EPS) (Recon
Earnings Per Share (EPS) (Reconciliation of Weighted Average Number of Shares Outstanding) (Details) - shares shares in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Earnings Per Share [Abstract] | |||
Basic weighted average number of shares outstanding | 73 | 152 | 102 |
Dilutive common share equivalents—stock options and other stock awards | 1 | 2 | 2 |
Diluted weighted average number of shares outstanding | 74 | 154 | 104 |
Earnings Per Share (EPS) (Share
Earnings Per Share (EPS) (Shares Repurchased) (Details) - USD ($) shares in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Equity, Class of Treasury Stock [Line Items] | |||
Amount paid to repurchase outstanding shares | $ 118,000,000 | $ 31,000,000 | $ 24,000,000 |
Value of initial shares repurchased | 118,000,000 | $ 31,000,000 | $ 24,000,000 |
Third Accelerated Share Repurchase | |||
Equity, Class of Treasury Stock [Line Items] | |||
Agreement to repurchase shares, amount | $ 100,000,000 | ||
Number of shares repurchased and retired | 2.4 | ||
Amount paid to repurchase outstanding shares | $ 100,000,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) shares in Millions, $ in Millions | 11 Months Ended | 12 Months Ended | ||
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | Jan. 01, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of vesting awards that vested | $ 29 | $ 33 | $ 43 | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period, Dividend Equivalent, Fair Value | $ 13 | 8 | $ 2 | |
2006 and 2017 Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of stock awards vest or exercisable after three years | 20.00% | |||
Percentage of stock awards vest or exercisable after four years | 40.00% | |||
Percentage of stock awards vest or exercisable, every year | 25.00% | |||
Vesting period (in years) | 4 years | |||
Number of shares available for grant (in shares) | 5.3 | |||
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of market price per share for stock purchase program | 15.00% | |||
Percentage of market price for employee purchase program for stock purchases during non-compensatory period | 5.00% | |||
Shares reserved for future issuance (in shares) | 4.8 | |||
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Tax benefits from stock options exercised | 1 | $ 7 | 1 | |
Fair value of stock surrendered in payment of the exercise price for stock options exercised | 3 | 2 | 4 | $ 3 |
Cash received from exercises of stock options | $ 0 | $ 2 | $ 0 | |
Stock Options | 2006 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 4 years |
Stock-Based Compensation (Sched
Stock-Based Compensation (Schedule of Stock-Based Compensation and Related Tax Benefits Recognized) (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 29, 2017 | Dec. 30, 2016 | Jan. 01, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Tax benefits recognized from stock-based compensation | $ 17 | $ 14 | $ 12 |
Continuing Operations | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Total stock-based compensation expense | $ 43 | $ 35 | $ 30 |
Stock-Based Compensation (Stock
Stock-Based Compensation (Stock options) (Details) - USD ($) $ in Millions | 4 Months Ended | 7 Months Ended | 11 Months Ended | 12 Months Ended |
Dec. 30, 2016 | Aug. 15, 2016 | Jan. 01, 2016 | Dec. 29, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 4 years 8 months 12 days | 4 years 9 months 18 days | 4 years 8 months 12 days | 4 years 8 months 12 days |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost, net of estimated forfeitures | $ 6 | |||
Expected weighted-average period of recognition, years | 2 years 3 months 19 days | |||
Stock Options | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 10 years | |||
2006 Equity Incentive Plan | Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected term (in years) | 7 years | |||
Vesting period (in years) | 4 years | |||
Outside Directors | 2006 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 1 year |
Stock-Based Compensation (Sch83
Stock-Based Compensation (Schedule of Weighted Average Grant-Date Fair Value and Assumptions Used) (Detail) - $ / shares | 4 Months Ended | 7 Months Ended | 11 Months Ended | 12 Months Ended | |
Dec. 30, 2016 | Aug. 15, 2016 | Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Weighted average grant-date fair value (usd per share) | $ 10.33 | $ 9.54 | $ 6.72 | $ 11.53 | |
Expected term (in years) | 4 years 8 months 12 days | 4 years 9 months 18 days | 4 years 8 months 12 days | 4 years 8 months 12 days | |
Expected volatility (in percentage) | 37.90% | 29.90% | 24.50% | 29.70% | |
Risk-free interest rate (in percentage) | 1.20% | 1.30% | 1.40% | 1.90% | |
Dividend yield (in percentage) | 2.70% | 2.50% | 2.90% | 2.50% | |
Performance Shares | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Expected volatility (in percentage) | 27.67% | 27.19% | 31.73% | ||
Risk-free interest rate (in percentage) | 0.82% | 1.53% | 1.01% |
Stock-Based Compensation (Speci
Stock-Based Compensation (Special dividend) (Details) $ in Millions | Aug. 22, 2016USD ($) | Aug. 16, 2016shares | Aug. 31, 2016shares | Dec. 29, 2017USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Decrease in strike price by factor | 0.74 | |||
Increase in number of shares issuable upon exercise of each option (in shares) | shares | 1.35 | |||
Information Systems & Global Solutions Business of Lockheed Martin | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Options, outstanding, period increase (decrease) | shares | 900,000 | |||
Special dividend declared | $ | $ 993 | $ 993 | ||
Additional paid-in capital | Information Systems & Global Solutions Business of Lockheed Martin | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock issued (shares) | $ | $ 29 | $ 29 |
Stock-Based Compensation (Sch85
Stock-Based Compensation (Schedule of Stock Option Activity) (Detail) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 11 Months Ended | 12 Months Ended | ||
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | Jan. 30, 2015 | |
Shares of stock under stock options | ||||
Outstanding, beginning balance (in shares) | 3.6 | 3.3 | 2.4 | |
Options granted (in shares) | 0.6 | 0.5 | 0.6 | |
Special dividend adjustments (in shares) | 0.9 | |||
Options forfeited or expired (in shares) | (0.9) | (0.2) | (0.2) | |
Options exercised (in shares) | (0.9) | (0.8) | (0.4) | |
Outstanding, ending balance (in shares) | 2.4 | 2.8 | 3.3 | 3.6 |
Exercisable at year end (in shares) | 1.6 | |||
Vested and expected to vest in the future as of year end (in shares) | 2.7 | |||
Weighted average exercise price | ||||
Outstanding, beginning balance (in usd per share) | $ 38.50 | $ 29.77 | $ 38.21 | |
Options granted (in usd per share) | 42.64 | 53.51 | 43.56 | |
Options forfeited or expired (in usd per share) | 42.03 | 35.72 | 34.98 | |
Options exercised (in usd per share) | 38.53 | 27.23 | 34.11 | |
Outstanding, ending balance (in usd per share) | $ 38.21 | 34.38 | $ 29.77 | $ 38.50 |
Exercisable at year end (in usd per share) | 29.13 | |||
Vested and expected to vest in the future as of year end (in usd per share) | $ 33.98 | |||
Weighted average remaining contractual term and Aggregate intrinsic value | ||||
Weighted average remaining contractual term, Outstanding (in years) | 4 years 6 months | 3 years 10 months 25 days | 4 years 1 month | 4 years |
Weighted average remaining contractual term, Exercisable at year end (in years) | 2 years 8 months 12 days | |||
Weighted average remaining contractual term, Vested and expected to vest (in years) | 3 years 9 months 18 days | |||
Aggregate intrinsic value, Outstanding, beginning balance | $ 14 | $ 70 | $ 43 | |
Aggregate intrinsic value, Outstanding, Option Exercised | 9 | 23 | 5 | |
Aggregate intrinsic value, Outstanding, ending balance | $ 43 | 86 | $ 70 | $ 14 |
Aggregate intrinsic value, Exercisable | 56 | |||
Aggregate intrinsic value, Outstanding, Vested and expected to vest | $ 83 |
Stock-Based Compensation (Sch86
Stock-Based Compensation (Schedule of RSU Activity) (Detail) - $ / shares | 11 Months Ended | 12 Months Ended | ||
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | Jan. 01, 2016 | |
Performance Shares | ||||
Shares of stock under stock awards | ||||
Shares, beginning balance (in shares) | 100,000 | 400,000 | 200,000 | |
Awards granted (in shares) | 200,000 | 200,000 | 200,000 | |
Awards forfeited (in shares) | (100,000) | |||
Awards vested (in shares) | 0 | (100,000) | 0 | |
Shares, ending balance (in shares) | 200,000 | 500,000 | 400,000 | 200,000 |
Weighted average grant- date fair value | ||||
Weighted average grant-date fair value, Shares, beginning balance (in dollars per share) | $ 37.70 | $ 44.44 | $ 43.35 | |
Weighted average grant-date fair value, Awards granted (in dollars per share) | 44.30 | 57,940,000 | 45.62 | |
Weighted average grant-date fair value, Awards forfeited (in dollars per share) | 43.49 | |||
Weighted average grant-date fair value, Awards vested (in dollars per share) | 42,850,000 | |||
Weighted average grant-date fair value, Shares, ending balance (in dollars per share) | $ 43.35 | $ 50,340,000 | $ 44.44 | $ 43.35 |
Restricted Stock Units (RSUs) | ||||
Shares of stock under stock awards | ||||
Shares, beginning balance (in shares) | 3,000,000 | 2,500,000 | 2,300,000 | |
Awards granted (in shares) | 500,000 | 800,000 | 1,500,000 | |
Awards forfeited (in shares) | (400,000) | (300,000) | (200,000) | |
Awards vested (in shares) | (800,000) | (1,000,000) | (1,100,000) | |
Shares, ending balance (in shares) | 2,300,000 | 2,000,000 | 2,500,000 | 2,300,000 |
Weighted average grant- date fair value | ||||
Weighted average grant-date fair value, Shares, beginning balance (in dollars per share) | $ 38.51 | $ 40.39 | $ 38.97 | |
Weighted average grant-date fair value, Awards granted (in dollars per share) | 42.95 | 53.91 | 41.45 | |
Weighted average grant-date fair value, Awards forfeited (in dollars per share) | 40.10 | 45.89 | 40.88 | |
Weighted average grant-date fair value, Awards vested (in dollars per share) | 40.05 | 41.02 | 38.91 | |
Weighted average grant-date fair value, Shares, ending balance (in dollars per share) | $ 38.97 | $ 44.96 | $ 40.39 | $ 38.97 |
Stock-Based Compensation (Restr
Stock-Based Compensation (Restricted Stock) (Details) - USD ($) shares in Millions, $ in Millions | Aug. 16, 2016 | Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Fair value of vesting awards that vested | $ 29 | $ 33 | $ 43 | |
2006 and 2017 Incentive Plans | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period (in years) | 4 years | |||
Information Systems & Global Solutions Business of Lockheed Martin | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Equity consideration for replacement awards | $ 9 | $ 9 | ||
Restricted Stock Units (RSUs) | Information Systems & Global Solutions Business of Lockheed Martin | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock issued during the period (in shares) | 0.6 | |||
Stock issued during the period (shares) | $ 23 | |||
Compensation not yet recognized | $ 12 | |||
Expected weighted-average period of recognition, years | 3 years | |||
Vesting Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Expected weighted-average period of recognition, years | 2 years | |||
Unrecognized compensation cost, net of estimated forfeitures | $ 37 |
Stock-Based Compensation (Sch88
Stock-Based Compensation (Schedule of Performance-Based Stock Award Activity) (Detail) - USD ($) $ / shares in Units, $ in Millions | 4 Months Ended | 7 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 30, 2016 | Aug. 15, 2016 | Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | Jan. 01, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Expected volatility (in percentage) | 37.90% | 29.90% | 24.50% | 29.70% | ||
Risk-free interest rate (in percentage) | 1.20% | 1.30% | 1.40% | 1.90% | ||
Fair value of vesting awards that vested | $ 29 | $ 33 | $ 43 | |||
Performance Shares | ||||||
Expected number of shares of stock to be issued under performance-based stock awards | ||||||
Shares, beginning balance (in shares) | 200,000 | 100,000 | 400,000 | 200,000 | ||
Awards granted (in shares) | 200,000 | 200,000 | 200,000 | |||
Awards canceled/forfeited (in shares) | (100,000) | |||||
Shares, ending balance (in shares) | 400,000 | 200,000 | 500,000 | 400,000 | 200,000 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Weighted average grant-date fair value, Shares, beginning balance (in dollars per share) | $ 43.35 | $ 37.70 | $ 44.44 | $ 43.35 | ||
Weighted average grant-date fair value, Awards granted (in dollars per share) | 45 | 62.30 | 45.80 | |||
Weighted average grant-date fair value, Awards forfeited/canceled (in dollars per share) | 43.49 | |||||
Weighted average grant-date fair value, Shares, ending balance (in dollars per share) | $ 44.44 | 43.35 | $ 50,340,000 | 44.44 | $ 43.35 | |
Performance period (in years) | 3 years | |||||
Maximum percentage that will ultimately vest for shares provided under long term performance based incentive equity awards based on target amount stated in agreement | 150.00% | |||||
Weighted average grant date fair value of the awards granted, excluding dividend equivalents (usd per share) | $ 43.78 | $ 53.58 | $ 45.83 | |||
Expected volatility (in percentage) | 27.67% | 27.19% | 31.73% | |||
Risk-free interest rate (in percentage) | 0.82% | 1.53% | 1.01% | |||
Weighted average grant-date fair value, Awards granted (in dollars per share) | $ 42.61 | $ 53.73 | $ 46.54 | |||
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period | 0 | 100,000 | 0 | |||
2006 and 2017 Incentive Plans | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Performance period (in years) | 4 years | |||||
2006 and 2017 Incentive Plans | Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | ||||||
Unrecognized compensation cost, net of estimated forfeitures | $ 9 | |||||
Expected weighted-average period of recognition, years | 1 year 9 months 18 days | |||||
Fair value of vesting awards that vested | $ 4 |
Income Taxes (Schedule of Provi
Income Taxes (Schedule of Provision for Income Taxes) (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Current: | |||
Current, Federal and foreign | $ 71 | $ 130 | $ 88 |
Current, State | 14 | 30 | 16 |
Deferred: | |||
Deferred, Federal and foreign | 20 | (141) | (29) |
Deferred, State | 7 | 10 | (3) |
Total | $ 112 | $ 29 | $ 72 |
Income Taxes (Schedule of Recon
Income Taxes (Schedule of Reconciliation of Provision for Income Taxes) (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Income Tax Disclosure [Abstract] | |||
Amount computed at the statutory federal income tax rate (35%) | $ 124 | $ 138 | $ 111 |
Change in statutory federal tax rate | 0 | (125) | 0 |
State income taxes, net of federal tax benefit | 14 | 31 | 8 |
Excess tax benefits from stock-based compensation | 0 | (12) | (8) |
Capitalized transaction costs | 0 | 9 | 7 |
Change in valuation allowance for deferred tax assets | (21) | 7 | (8) |
Research and development credits | (4) | (7) | (4) |
Dividends paid to employee stock ownership plan | (3) | (4) | (38) |
Effective Income Tax Rate Reconciliation, Repatriation of Foreign Earnings, Amount | 0 | (4) | 0 |
Change in accruals for uncertain tax positions | (4) | 0 | 1 |
Other | 6 | (4) | 3 |
Total | $ 112 | $ 29 | $ 72 |
Effective income tax rate | 31.50% | 7.40% | 22.60% |
Income Taxes (Schedule Of Defer
Income Taxes (Schedule Of Deferred Tax Assets (Liabilities)) (Detail) - USD ($) $ in Millions | Dec. 29, 2017 | Dec. 30, 2016 |
Income Tax Disclosure [Abstract] | ||
Capital loss carryover | $ 60 | $ 81 |
Reserves | 62 | 103 |
Accrued vacation and bonuses | 54 | 89 |
Credits and net operating losses carryovers | 33 | 35 |
Deferred compensation | 22 | 38 |
Vesting stock awards | 17 | 23 |
Deferred rent and tenant allowances | 10 | 16 |
Investments | 2 | 3 |
Employee benefit contributions | 0 | 3 |
Other | 18 | 17 |
Total deferred tax assets | 278 | 408 |
Valuation allowance | (83) | (102) |
Deferred tax assets, net of valuation allowance | 195 | 306 |
Purchased intangible assets | (340) | (748) |
Deferred revenue | (34) | (42) |
Partnership interest | (17) | (14) |
Accumulated other comprehensive income | (13) | (8) |
Employee benefit contributions | (3) | 0 |
Fixed asset basis differences | 0 | (11) |
Other | (8) | (7) |
Total deferred tax liabilities | (415) | (830) |
Net deferred tax liabilities | $ (220) | $ (524) |
Income Taxes (Schedule of Net D
Income Taxes (Schedule of Net Deferred Tax Assets) (Detail) - USD ($) $ in Millions | Dec. 29, 2017 | Dec. 30, 2016 |
Income Tax Disclosure [Abstract] | ||
Deferred income taxes | $ 0 | $ 16 |
Net non-current deferred tax liabilities | (220) | (540) |
Net deferred tax liabilities | $ (220) | $ (524) |
Income Taxes (Schedule of Chang
Income Taxes (Schedule of Changes in Unrecognized Tax Benefits) (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at beginning of year | $ 17 | $ 9 | $ 11 |
Additions for tax positions related to current year | 5 | 2 | 1 |
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions | 4 | 2 | 4 |
Reductions for tax positions related to prior years | (15) | (3) | (7) |
Unrecognized tax benefits at end of year | 11 | 10 | 9 |
Unrecognized tax benefits that, if recognized, would affect the effective income tax rate | $ 7 | $ 7 | $ 4 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Income Taxes [Line Items] | |||
Transition Tax | $ 0 | $ 4 | $ 0 |
Other | 6 | (4) | 3 |
Deferred income tax benefit | (115) | ||
Unrecognized tax benefits accrued interest and penalties | 1 | 1 | 1 |
Liabilities for uncertain tax positions | 12 | 11 | 10 |
Liabilities for uncertain tax positions, long-term | $ 5 | 7 | $ 5 |
Amount of reasonably possible resolution of reviews | 6 | ||
Tax Cuts and Jobs Act of 2017, Change in Tax Rate, Income Tax Expense (Benefit) | (119) | ||
Capital Loss Carryforward | |||
Income Taxes [Line Items] | |||
State tax credit carryforwards | 234 | ||
State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | 71 | ||
State tax credit carryforwards | 13 | ||
State tax credits | 5 | ||
Foreign Tax Authority | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | 35 | ||
Expiration in Calender Year 2018 | Capital Loss Carryforward | |||
Income Taxes [Line Items] | |||
State tax credit carryforwards | 97 | ||
Expiration in Calender Year 2018 | Domestic Tax Authority | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | 20 | ||
Expiration in Calender Year 2018 | State | |||
Income Taxes [Line Items] | |||
Net operating loss carryforwards | $ 180 |
Retirement Plans - Additional I
Retirement Plans - Additional Information (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Pension and Other Postretirement Benefits Disclosure [Line Items] | |||
Compensation expense | $ 56 | $ 94 | $ 68 |
Maximum percentage certain employees can defer from salary for certain plans | 20.00% | ||
Projected benefit obligation | $ 120 | 115 | |
Fair value of plan assets | 129 | 109 | |
Funded status of plan | $ (9) | $ 6 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 29, 2017USD ($) | |
Disclosure Leases Additional Information [Abstract] | |
Capital lease obligations | $ 6 |
Remaining term of capital lease | 2 years |
Leases (Schedule of Rental Expe
Leases (Schedule of Rental Expense for Facilities and Equipment) (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Leases [Abstract] | |||
Gross rental expense | $ 83 | $ 181 | $ 107 |
Less lease and sublease income | (8) | (3) | (2) |
Net rental expense | $ 75 | $ 178 | $ 105 |
Leases (Schedule of Future Mini
Leases (Schedule of Future Minimum Lease Commitments and Sublease Receipts under Non-Cancelable Operating Leases) (Detail) $ in Millions | Dec. 29, 2017USD ($) |
Operating lease Commitment | |
2,018 | $ 140 |
2,019 | 107 |
2,020 | 78 |
2,021 | 53 |
2,022 | 39 |
2023 and thereafter | 78 |
Total | 495 |
Sublease receipts | |
2,018 | 2 |
2,019 | 1 |
2,020 | 1 |
2,020 | 1 |
2,021 | 0 |
2022 and thereafter | 0 |
Total | $ 5 |
Leases (Sale and Leaseback Agre
Leases (Sale and Leaseback Agreement) (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 11 Months Ended | 12 Months Ended | ||
Dec. 31, 2015USD ($) | Jan. 01, 2016USD ($) | Jan. 01, 2016USD ($) | Dec. 29, 2017USD ($) | Dec. 30, 2016USD ($) | May 03, 2013aBuilding | |
Sale Leaseback Transaction [Line Items] | ||||||
Gain (loss) on sale of properties | $ 82 | $ 82 | $ 0 | $ 0 | ||
Write off of property disposed | $ 40 | $ 40 | ||||
May 2013 Sales Lease Back Agreement | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Area of land | a | 18 | |||||
Number of real estate properties | Building | 4 | |||||
Amendment to the Original Purchase and Sale Agreement | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Proceeds from real estate financing transaction | 95 | |||||
Proceeds from sale | 75 | |||||
Allocated consideration to Note parable and Other long-term liabilities | 20 | |||||
Discount on proceeds | 5 | |||||
Write off of financing note payable | 35 | |||||
Write off of other long term liabilities | 5 | |||||
Lease termination fees | 8 | |||||
Selling costs | $ 5 | |||||
Leidos | Purchaser of the Property | Prepaid Before December 17, 2018 | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Percentage of accrued interest (in percentage) | 80.00% | |||||
Leidos | Purchaser of the Property | Prepaid Prior to Maturity | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Percentage of accrued interest (in percentage) | 60.00% | |||||
Notes Payable | Leidos | Purchaser of the Property | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Stated interest rate (in percentage) | 0.50% | |||||
Term of debt instrument (in years) | 4 years | |||||
Notes Payable | Leidos | Purchaser of the Property | Floor | 30 day LIBOR | ||||||
Sale Leaseback Transaction [Line Items] | ||||||
Variable interest rate (in percentage) | 0.25% |
Supplementary Cash Flow Info100
Supplementary Cash Flow Information (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Supplemental Cash Flow Information [Abstract] | |||
Cash paid for interest | $ 50 | $ 133 | $ 90 |
Cash paid for income taxes, net of refunds | 31 | 214 | 47 |
Non-cash investing activity: | |||
Stock issued for the IS&GS Business acquisition | 0 | 0 | 2,938 |
Promissory note, net received for disposition of business | 72 | 0 | 0 |
Promissory note, net received from a real estate sale | 20 | 0 | 0 |
Non-cash financing activity: | |||
Dividends declared and other | 2 | 3 | 21 |
Capital lease and notes payable obligations | $ 6 | 27 | 0 |
Cash and cash equivalents | 390 | 376 | |
Restricted cash | 32 | 20 | |
Total cash, cash equivalents and restricted cash | $ 422 | $ 396 |
Schedule of Segment Reporting I
Schedule of Segment Reporting Information by Segment (Detail) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 4,712 | $ 10,170 | $ 7,043 |
Operating income (loss) | 320 | 559 | 417 |
Amortization of intangible assets | 8 | 281 | 84 |
Operating Segments | Defense Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues | 3,009 | 4,959 | 3,843 |
Operating income (loss) | 260 | 307 | 312 |
Amortization of intangible assets | 0 | 108 | 17 |
Operating Segments | Civil | |||
Segment Reporting Information [Line Items] | |||
Revenues | 1,141 | 3,409 | 2,082 |
Operating income (loss) | 33 | 226 | 146 |
Amortization of intangible assets | 6 | 132 | 39 |
Operating Segments | Health | |||
Segment Reporting Information [Line Items] | |||
Revenues | 556 | 1,802 | 1,117 |
Operating income (loss) | 46 | 228 | 110 |
Amortization of intangible assets | 2 | 41 | 28 |
Corporate, Non-Segment | |||
Segment Reporting Information [Line Items] | |||
Revenues | 6 | 0 | 1 |
Operating income (loss) | $ (19) | $ (202) | $ (151) |
Business Segment Information -
Business Segment Information - Additional Information (Detail) | 12 Months Ended |
Dec. 29, 2017 | |
Segment Reporting [Abstract] | |
Percentage of revenues contributed by external customers to total revenues | 10.00% |
Business Segments (Schedule of
Business Segments (Schedule of Total Revenue Percentages Contributable to Specific Government Agencies) (Detail) - Government Contracts Concentration Risk | 11 Months Ended | 12 Months Ended | |
Jan. 01, 2016 | Dec. 29, 2017 | Dec. 30, 2016 | |
US DoD | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 64.00% | 47.00% | 56.00% |
U.S. Government | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 76.00% | 84.00% | 81.00% |
U.S. Army | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 14.00% | 13.00% | 14.00% |
Maryland Procurement Office | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 10.00% | 5.00% | 7.00% |
Contingencies - Additional Info
Contingencies - Additional Information (Detail) € in Millions, $ in Millions | Oct. 13, 2017USD ($) | Apr. 30, 2012LegalMatter | Dec. 29, 2017USD ($) | Jan. 31, 2017USD ($) | Aug. 16, 2016USD ($) | Nov. 10, 2015USD ($) | Jan. 03, 2014USD ($) | Jan. 03, 2014EUR (€) |
Legal Proceedings [Line Items] | ||||||||
Loss contingency accrual, period increase (decrease) | $ (24) | |||||||
Securities Class Actions | ||||||||
Legal Proceedings [Line Items] | ||||||||
Number of lawsuits | LegalMatter | 3 | |||||||
Number of lawsuits, withdrawn | LegalMatter | 1 | |||||||
Number of lawsuits, consolidated | LegalMatter | 2 | |||||||
Greek Government Contract | ||||||||
Legal Proceedings [Line Items] | ||||||||
Arbitral award | $ 63 | $ 46 | € 39 | |||||
MSA Venture | ||||||||
Legal Proceedings [Line Items] | ||||||||
Estimate of loss | $ 64 | $ 64 | ||||||
Loss contingency accrual | 39 | |||||||
Lockheed Martin | MSA Venture | ||||||||
Legal Proceedings [Line Items] | ||||||||
Percentage of damages covered, between $38 million and $64 million settlement amount | 100.00% | |||||||
Percentage of damages covered, in excess of $64 million settlement amount | 50.00% | |||||||
Virnet X Inc | ||||||||
Legal Proceedings [Line Items] | ||||||||
Amount awarded to other party, pre interest | $ 343 | |||||||
Awarded to the other party, interest and legal fees | 96 | |||||||
Amount awarded to other party | $ 439 | |||||||
Leidos | ||||||||
Legal Proceedings [Line Items] | ||||||||
Percentage of settlement | 25.00% | |||||||
Leidos | MSA Venture | ||||||||
Legal Proceedings [Line Items] | ||||||||
Estimate of loss | $ 38 | |||||||
Information Systems & Global Solutions Business of Lockheed Martin | MSA Venture | ||||||||
Legal Proceedings [Line Items] | ||||||||
Indemnification assets, amount as of acquisition date | $ 1 |
Commitments - Additional Inform
Commitments - Additional Information (Detail) $ in Millions | Dec. 29, 2017USD ($) |
Standby Letters of Credit | |
Other Commitments And Contingencies [Line Items] | |
Letters of credit outstanding, amount | $ 93 |
Performance Guarantee | |
Other Commitments And Contingencies [Line Items] | |
Surety bonds | $ 148 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jan. 24, 2018 | Dec. 29, 2017 | Jan. 26, 2018 | Aug. 31, 2017 | Feb. 28, 2017 |
Subsequent Event [Line Items] | |||||
Acquisition related costs | $ 24,000,000 | ||||
Secured Debt | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, decrease in basis points | 25.00% | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Term of contract | 148 months | ||||
Rent expense for year one, per agreement | $ 11,000,000 | ||||
Rent increase | 2.50% | ||||
Term Loan B Due August 2023 | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, face amount | $ 1,131,000,000 | ||||
Stated interest rate (in percentage) | 3.38% | ||||
Term Loan B Due August 2023 | Secured Debt | |||||
Subsequent Event [Line Items] | |||||
Debt instrument, face amount | $ 1,100,000,000 | ||||
Debt instrument, decrease in basis points | 50.00% | ||||
Stated interest rate (in percentage) | 2.25% | ||||
Jacob Group's Interest in Mission Support Alliance [Member] | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Voting interest (in percentage) | 100.00% | ||||
Mission Supporting Alliance | |||||
Subsequent Event [Line Items] | |||||
Voting interest (in percentage) | 47.00% | ||||
Mission Supporting Alliance | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Voting interest (in percentage) | 88.00% | ||||
Jacobs Engineering Group, Inc. | Mission Supporting Alliance | Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Voting interest (in percentage) | 41.00% |