Cover
Cover - shares | 6 Months Ended | |
Jun. 28, 2019 | Jul. 22, 2019 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 28, 2019 | |
Document Transition Report | false | |
Entity File Number | 001-33072 | |
Entity Registrant Name | Leidos Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 20-3562868 | |
Entity Address, Address Line One | 11951 Freedom Drive, | |
Entity Address, City or Town | Reston, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 20190 | |
City Area Code | 571 | |
Local Phone Number | 526-6000 | |
Title of 12(b) Security | Common stock, par value $.0001 per share | |
Trading Symbol | LDOS | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 143,807,816 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001336920 | |
Current Fiscal Year End Date | --01-03 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Millions | Jun. 28, 2019 | Dec. 28, 2018 |
ASSETS | ||
Cash and cash equivalents | $ 660 | $ 327 |
Receivables, net | 1,842 | 1,877 |
Other current assets | 412 | 543 |
Assets held for sale | 0 | 92 |
Total current assets | 2,914 | 2,839 |
Property, plant and equipment, net | 216 | 237 |
Intangible assets, net | 571 | 652 |
Goodwill | 4,861 | 4,860 |
Operating lease right-of-use assets, net | 383 | 0 |
Other assets | 382 | 182 |
Total assets | 9,327 | 8,770 |
LIABILITIES AND EQUITY | ||
Accounts payable and accrued liabilities | 1,710 | 1,491 |
Accrued payroll and employee benefits | 471 | 473 |
Long-term debt, current portion | 65 | 72 |
Liabilities held for sale | 0 | 23 |
Total current liabilities | 2,246 | 2,059 |
Long-term debt, net of current portion | 2,954 | 3,052 |
Operating lease liabilities | 285 | 0 |
Deferred tax liabilities | 185 | 170 |
Other long-term liabilities | 295 | 178 |
Commitments and contingencies (Notes 19 and 20) | ||
Stockholders’ equity: | ||
Common stock, $.0001 par value, 500 million shares authorized, 144 million and 146 million shares issued and outstanding at June 28, 2019 and December 28, 2018, respectively | 0 | 0 |
Additional paid-in capital | 2,780 | 2,966 |
Retained earnings | 652 | 372 |
Accumulated other comprehensive loss | (73) | (30) |
Total Leidos stockholders’ equity | 3,359 | 3,308 |
Non-controlling interest | 3 | 3 |
Total equity | 3,362 | 3,311 |
Total liabilities and stockholders' equity | $ 9,327 | $ 8,770 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Jun. 28, 2019 | Dec. 28, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 500,000,000 | 500,000,000 |
Common stock, shares issued (in shares) | 144,000,000 | 146,000,000 |
Common stock, shares outstanding (in shares) | 144,000,000 | 146,000,000 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 2,728 | $ 2,529 | $ 5,305 | $ 4,972 |
Cost of revenues | 2,348 | 2,152 | 4,569 | 4,238 |
Selling, general and administrative expenses | 175 | 174 | 341 | 352 |
Integration and restructuring costs | 1 | 8 | 3 | 25 |
Asset impairment charges | 0 | 0 | 0 | 7 |
Equity earnings of non-consolidated subsidiaries | (6) | (4) | (10) | (8) |
Operating income | 210 | 199 | 402 | 358 |
Non-operating (expense) income: | ||||
Interest expense, net | (33) | (35) | (71) | (69) |
Other income, net | 2 | 1 | 94 | 1 |
Income before income taxes | 179 | 165 | 425 | 290 |
Income tax expense | (41) | (20) | (98) | (43) |
Net income | 138 | 145 | 327 | 247 |
Less: net income attributable to non-controlling interest | 2 | 1 | 2 | 1 |
Net income attributable to Leidos common stockholders | $ 136 | $ 144 | $ 325 | $ 246 |
Earnings per share: | ||||
Basic (dollars per share) | $ 0.94 | $ 0.95 | $ 2.26 | $ 1.62 |
Diluted (dollars per share) | $ 0.93 | $ 0.94 | $ 2.23 | $ 1.60 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 138 | $ 145 | $ 327 | $ 247 |
Foreign currency translation adjustments | (12) | (37) | (2) | (33) |
Unrecognized (loss) gain on derivative instruments | (26) | 4 | (41) | 14 |
Total other comprehensive loss, net of taxes | (38) | (33) | (43) | (19) |
Comprehensive income | 100 | 112 | 284 | 228 |
Less: comprehensive income attributable to non-controlling interest | 2 | 1 | 2 | 1 |
Comprehensive income attributable to Leidos common stockholders | $ 98 | $ 111 | $ 282 | $ 227 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) - USD ($) shares in Millions, $ in Millions | Total | Shares of common stock | Additional paid-in capital | (Accumulated deficit) retained earnings | Accumulated other comprehensive income (loss) | Leidos Holdings, Inc. stockholders' equity | Non-controlling interest |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative adjustments related to ASU adoption | $ 1 | $ (8) | $ 9 | $ 1 | |||
Beginning Balance, adjusted | 3,384 | $ 3,344 | (15) | 42 | 3,371 | $ 13 | |
Beginning Balance (shares) at Dec. 29, 2017 | 151 | ||||||
Beginning Balance at Dec. 29, 2017 | 3,383 | 3,344 | (7) | 33 | 3,370 | 13 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 102 | 102 | 102 | ||||
Other comprehensive loss, net of taxes | 14 | 14 | 14 | ||||
Issuances of stock (shares) | 1 | ||||||
Issuances of stock | 5 | 5 | 5 | ||||
Repurchases of stock and other | (22) | (22) | (22) | ||||
Dividends of $0.32 per share | (50) | (50) | (50) | ||||
Stock-based compensation | 11 | 11 | 11 | ||||
Purchase of a non-controlling interest | (10) | (10) | |||||
Ending Balance (shares) at Mar. 30, 2018 | 152 | ||||||
Ending Balance at Mar. 30, 2018 | 3,434 | 3,338 | 37 | 56 | 3,431 | 3 | |
Beginning Balance (shares) at Dec. 29, 2017 | 151 | ||||||
Beginning Balance at Dec. 29, 2017 | 3,383 | 3,344 | (7) | 33 | 3,370 | 13 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 247 | ||||||
Other comprehensive loss, net of taxes | (19) | ||||||
Ending Balance (shares) at Jun. 29, 2018 | 150 | ||||||
Ending Balance at Jun. 29, 2018 | 3,418 | 3,260 | 133 | 23 | 3,416 | 2 | |
Beginning Balance (shares) at Mar. 30, 2018 | 152 | ||||||
Beginning Balance at Mar. 30, 2018 | 3,434 | 3,338 | 37 | 56 | 3,431 | 3 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 145 | 144 | 144 | 1 | |||
Other comprehensive loss, net of taxes | (33) | (33) | (33) | ||||
Issuances of stock | 4 | 4 | 4 | ||||
Repurchases of stock and other (shares) | (2) | ||||||
Repurchases of stock and other | (94) | (94) | (94) | ||||
Dividends of $0.32 per share | (48) | (48) | (48) | ||||
Stock-based compensation | 12 | 12 | 12 | ||||
Other | (2) | (2) | |||||
Ending Balance (shares) at Jun. 29, 2018 | 150 | ||||||
Ending Balance at Jun. 29, 2018 | 3,418 | 3,260 | 133 | 23 | 3,416 | 2 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Cumulative adjustments related to ASU adoption | 48 | 48 | 0 | 48 | |||
Beginning Balance, adjusted | 3,359 | 2,966 | 420 | (30) | 3,356 | 3 | |
Beginning Balance (shares) at Dec. 28, 2018 | 146 | ||||||
Beginning Balance at Dec. 28, 2018 | 3,311 | 2,966 | 372 | (30) | 3,308 | 3 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 189 | 189 | 189 | ||||
Other comprehensive loss, net of taxes | (5) | (5) | (5) | ||||
Issuances of stock (shares) | 1 | ||||||
Issuances of stock | 11 | 11 | 11 | ||||
Repurchases of stock and other (shares) | (3) | ||||||
Repurchases of stock and other | (222) | (222) | (222) | ||||
Dividends of $0.32 per share | (47) | (47) | (47) | ||||
Stock-based compensation | 12 | 12 | 12 | ||||
Ending Balance (shares) at Mar. 29, 2019 | 144 | ||||||
Ending Balance at Mar. 29, 2019 | 3,297 | 2,767 | 562 | (35) | 3,294 | 3 | |
Beginning Balance (shares) at Dec. 28, 2018 | 146 | ||||||
Beginning Balance at Dec. 28, 2018 | 3,311 | 2,966 | 372 | (30) | 3,308 | 3 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 327 | ||||||
Other comprehensive loss, net of taxes | (43) | ||||||
Ending Balance (shares) at Jun. 28, 2019 | 144 | ||||||
Ending Balance at Jun. 28, 2019 | 3,362 | 2,780 | 652 | (73) | 3,359 | 3 | |
Beginning Balance (shares) at Mar. 29, 2019 | 144 | ||||||
Beginning Balance at Mar. 29, 2019 | 3,297 | 2,767 | 562 | (35) | 3,294 | 3 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 138 | 136 | 136 | 2 | |||
Other comprehensive loss, net of taxes | (38) | (38) | (38) | ||||
Issuances of stock | 6 | 6 | 6 | ||||
Repurchases of stock and other | (5) | (5) | (5) | ||||
Dividends of $0.32 per share | (46) | (46) | (46) | ||||
Stock-based compensation | 13 | 13 | 13 | ||||
Other | (3) | (1) | (1) | (2) | |||
Ending Balance (shares) at Jun. 28, 2019 | 144 | ||||||
Ending Balance at Jun. 28, 2019 | $ 3,362 | $ 2,780 | $ 652 | $ (73) | $ 3,359 | $ 3 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (UNAUDITED) (Parenthetical) - $ / shares | 3 Months Ended | |||
Jun. 28, 2019 | Mar. 29, 2019 | Jun. 29, 2018 | Mar. 30, 2018 | |
Statement of Stockholders' Equity [Abstract] | ||||
Dividends (in dollars per share) | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.32 |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 28, 2019 | Jun. 29, 2018 | |
Cash flows from operations: | ||
Net income | $ 327 | $ 247 |
Adjustments to reconcile net income to net cash provided by operations: | ||
Gain on sale of business | (87) | 0 |
Depreciation and amortization | 115 | 129 |
Stock-based compensation | 25 | 23 |
Asset impairment charges | 0 | 7 |
Other | 3 | 10 |
Change in assets and liabilities, net of effects of dispositions: | ||
Receivables | 32 | 36 |
Other current assets | (16) | (33) |
Accounts payable and accrued liabilities | 64 | (67) |
Accrued payroll and employee benefits | 0 | (35) |
Deferred income taxes and income taxes receivable/payable | 8 | (10) |
Other long-term assets/liabilities | 3 | (14) |
Net cash provided by operating activities | 474 | 293 |
Cash flows from investing activities: | ||
Proceeds from disposition of business | 171 | 0 |
Net proceeds from sale of assets | 96 | 0 |
Payments for property, equipment and software | (46) | (28) |
Acquisitions of businesses | 0 | (81) |
Net cash provided by (used in) investing activities | 221 | (109) |
Cash flows from financing activities: | ||
Repurchases of stock and other | (227) | (116) |
Dividend payments | (101) | (103) |
Payments of long-term debt | (48) | (44) |
Proceeds from issuances of stock | 15 | 8 |
Payment of tax indemnification liability | 0 | (23) |
Other | 0 | (5) |
Net cash used in financing activities | (361) | (283) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 334 | (99) |
Cash, cash equivalents and restricted cash at beginning of period | 369 | 422 |
Cash, cash equivalents and restricted cash at end of period | $ 703 | $ 323 |
Nature of Operations and Basis
Nature of Operations and Basis of Presentation | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Nature of Operations and Basis of Presentation | Note 1–Nature of Operations and Basis of Presentation Leidos Holdings, Inc. ("Leidos"), a Delaware corporation, is a holding company whose direct 100% -owned subsidiary and principal operating company is Leidos, Inc. Leidos is a FORTUNE 500 ® science, engineering and information technology company that provides 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, the Federal Aviation Administration, the Department of Veterans Affairs and many other U.S. government civilian agencies, as well as state and local government agencies . Leidos' international customers include foreign governments and their agencies, primarily located in Australia and the United Kingdom ("U.K."). Unless indicated otherwise, references to the "Company," "we," "us" and "our" refer collectively to Leidos Holdings, Inc. and its consolidated subsidiaries. The Company operates in three reportable segments: Defense Solutions, Civil and Health. Additionally, the Company separately presents the costs associated with corporate functions as Corporate. The Company has a controlling interest in Mission Support Alliance, LLC ("MSA"), a joint venture with Centerra Group, LLC. 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 interest in MSA. As a result, Leidos increased its controlling ownership in MSA from 47% to 88% . The Company consolidates the financial results for MSA into its unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements also 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 the Company’s VIE are not material to the Company’s unaudited condensed consolidated financial statements for the periods presented. Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation. The accompanying unaudited condensed financial information has been prepared in accordance with the rules of the U.S. Securities and Exchange Commission and accounting principles generally accepted in the United States of America ("GAAP"). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules. The preparation of financial statements in conformity with 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, 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. Effective December 29, 2018, the Company adopted the requirements of Accounting Standards Update ("ASU") 2016-02 using the modified retrospective approach (see " Note 2–Accounting Standards "). Comparative information for the prior fiscal year has not been retrospectively adjusted. Effective the beginning of fiscal 2019, certain contracts were reassigned between the Civil and Defense Solutions reportable segments (see " Note 18–Business Segments "). While this activity did not have a material impact on the Company's reportable segments, prior year segment results have been recast to reflect this change. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. The Company combined "Dividends payable" and "Income taxes payable" with "Accounts payable and accrued liabilities" on the condensed consolidated balance sheets. In the opinion of management, the accompanying unaudited condensed consolidated financial statements reflect all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. The results reported in these unaudited condensed consolidated financial statements are not necessarily indicative of the results that may be expected for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K filed on February 19, 2019. |
Accounting Standards
Accounting Standards | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Accounting Standards | Note 2–Accounting Standards Accounting Standards Updates Adopted ASU 2016-02, ASU 2018-10, ASU 2018-11, ASU 2018-20, and ASU 2019-01, Leases (Topic 842) In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02 ("ASC 842"), which supersedes the current lease guidance under Leases (Topic 840) and makes several changes, such as requiring an entity to recognize a right-of-use ("ROU") asset and corresponding lease obligation on the balance sheet, classified as financing or operating, as appropriate. The update is effective for public companies for annual and interim reporting periods beginning after December 15, 2018, and should be adopted under the modified retrospective approach. In July 2018, the FASB issued ASU 2018-10 "Codification Improvements to Topic 842, Leases" to add clarity to certain areas within ASU 2016-02, and ASU 2018-11 "Targeted Improvements", to add an additional and optional transition method to adopt the new leases standard by allowing recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The ASU also provided lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease components, similar to the expedient provided for lessees. In December 2018, the FASB issued ASU 2018-20 "Narrow-Scope Improvements for Lessors" to add clarity to lessors accounting for sales taxes and other similar taxes collected from lessees, accounting for variable payments for contracts with lease and non-lease components and accounting for certain lessor costs. In March 2019, the FASB issued ASU 2019-01 "Codification Improvements" to Leases (Topic 842) to clarify the codification more generally and/or to correct unintended application of guidance. The effective date and transition requirements of these updates are the same as ASU 2016-02. The Company has elected to adopt certain practical expedients provided under ASC 842, including the option to not apply lease recognition for short-term leases, reassessment of whether expired or existing contracts contain leases, reassessment of lease classification for expired or existing leases, applying a single discount rate to a portfolio of leased assets with similar durations, reassessing initial direct costs and combining lease and non-lease components in revenue arrangements. The Company did not elect the hindsight practical expedient to determine the lease term for existing leases and in assessing impairment for the ROU assets. Effective December 29, 2018, the Company adopted the requirements of ASC 842 using the modified retrospective approach. Comparative information for the prior fiscal year has not been retrospectively adjusted. As a result of the adoption of the new standard, the Company recorded $433 million and $486 million of ROU assets and lease liabilities, respectively, primarily due to its operating leases, to the Company's consolidated balance sheets. The standard did not have a material impact on the consolidated statements of income and consolidated statements of cash flows. The Company also recorded a $48 million increase in retained earnings due to the cumulative effect of recognizing the gain, net of taxes, related to the sale of the San Diego properties (see " Note 10–Property, Plant and Equipment "). The cumulative effect of the changes made to the Company's condensed consolidated balance sheet for the adoption of ASU 2016-02 was as follows: Balance at December 28, 2018 Adjustments due to ASU 2016-02 Balance at December 29, 2018 (in millions) Assets - non-current: Property, plant and equipment, net $ 237 $ 1 $ 238 Operating lease right-of-use assets, net — 418 418 Liabilities - current: Accounts payable and accrued liabilities $ 1,491 $ 132 $ 1,623 Long-term debt, current portion 72 8 80 Liabilities - non-current: Long-term debt, net of current portion $ 3,052 $ (72 ) $ 2,980 Operating lease liabilities — 320 320 Deferred tax liabilities 170 17 187 Other long-term liabilities 178 (34 ) 144 Equity: Retained earnings $ 372 $ 48 $ 420 Accounting Standards Updates Issued But Not Yet Adopted ASU 2016-13, ASU 2018-19, ASU 2019-05, Financial Instruments – Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, which 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 for annual and interim reporting periods beginning after December 15, 2019, 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. Early adoption is permitted. In November 2018, the FASB issued ASU 2018-19 "Codification Improvements to Topic 326, Financial Instruments - Credit Losses" to add clarity to certain areas within ASU 2016-13. In May 2019, the FASB issued ASU 2019-05 "Financial Instruments - Credit Losses (Topic 326), Target Transition Relief" which provided transition relief for entities adopting ASU 2016-13 by allowing the election of the fair value option on certain financial instruments. The effective date and the transition methodology for the amendments in these updates are the same as in ASU 2016-13. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | Note 3–Significant Accounting Policies Leases The Company has facilities and equipment lease arrangements. An arrangement is determined to be a lease at inception if it conveys the right to control the use of identified property and equipment for a period of time in exchange for consideration. ROU assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recorded on the consolidated balance sheet at lease commencement date based on the present value of the future minimum lease payments over the lease term. When the lease does not include an implicit rate, the discount rate used is the Company’s incremental borrowing rate based on information available at the commencement date. An ROU asset is initially measured by the present value of the remaining lease payments, plus initial direct costs and prepaid lease payments, less any lease incentives received before commencement. The remaining lease cost is allocated over the remaining lease term on a straight-line basis unless another systematic or rational basis is more representative of the pattern in which the underlying asset is expected to be used. ROU assets are evaluated for impairment in a manner consistent with the treatment of other long-lived assets. Certain of the Company’s facility leases contain options to renew or extend the terms of the lease which are included in the determination of the ROU assets and lease liabilities when it is reasonably certain that the Company will exercise the option. The Company's leases may also include variable lease payments such as an escalation clause based on consumer price index rates, maintenance costs and utilities. Variable lease payments that depend on an index or a rate are included in the determination of ROU assets and lease liabilities using the index or rate at the lease commencement date, whereas variable lease payments that do not depend on an index or rate are recorded as lease expense in the period incurred. At June 28, 2019 , the Company did not have any lease agreements with residual value guarantees. As a result of the adoption of ASC 842, the Company elected to not separate non-lease components from lease components and instead account for both components as a single lease, combining lease and non-lease components in revenue arrangements. The related lease payments on the Company’s short-term facilities and equipment leases are recognized as expense on a straight-line basis over the lease term. The Company's lessor arrangements with its customers are immaterial to the results of operations and cash flows. Changes in Estimates on Contracts Changes in estimates related to contracts accounted for using the cost-to-cost 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 a business combination, where the adjustment is made for the period commencing from the date of acquisition. Changes in estimates on contracts were as follows: Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, (in millions, except per share amounts) Favorable impact $ 23 $ 51 $ 46 $ 101 Unfavorable impact (10 ) (17 ) (29 ) (32 ) Net impact to income before income taxes $ 13 $ 34 $ 17 $ 69 Impact on diluted EPS attributable to Leidos common stockholders $ 0.07 $ 0.17 $ 0.09 $ 0.34 The impact on diluted earnings per share ("EPS") attributable to Leidos common stockholders is calculated using the Company's statutory tax rate. Revenue recognized from performance obligations satisfied in previous periods was $15 million and $19 million for the quarter and six months ended June 28, 2019 , respectively and $32 million and $66 million for the quarter and six months ended June 29, 2018 , respectively. The changes primarily relate to revisions of variable consideration, including award and incentive fees, and revisions to estimates at completion resulting from changes in contract scope, mitigation of contract risks or due to true-ups of contract estimates at the end of contract performance. Cash and Cash Equivalents The Company's cash equivalents are 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 correspondingly increases "Accounts payable and accrued liabilities" on the condensed consolidated balance sheets. At June 28, 2019 and December 28, 2018 , the Company included $62 million and $56 million , respectively, of outstanding payments within "Cash and cash equivalents." |
Leases
Leases | 6 Months Ended |
Jun. 28, 2019 | |
Leases [Abstract] | |
Leases | Note 4–Leases The Company's ROU assets and lease liabilities consisted of the following: Balance sheet line item June 28, (in millions) ROU assets: Finance leases Property, plant and equipment, net $ 11 Operating leases Operating lease right-of-use assets, net 383 $ 394 Current lease liabilities: Finance leases Long-term debt, current portion $ 8 Operating leases Accounts payable and accrued liabilities 138 $ 146 Non-current lease liabilities: Finance leases Long-term debt, net of current portion $ 3 Operating leases Operating lease liabilities 285 $ 288 The Company's total lease cost for the periods presented consisted of the following: Three Months Ended Six Months Ended June 28, June 28, (in millions) Finance lease cost: Amortization of ROU assets $ 2 $ 4 Operating lease cost 42 82 Variable lease cost 25 51 Short-term lease cost 1 3 Less: Sublease income (1 ) (1 ) Total lease cost $ 69 $ 139 The Company's lease costs are included in "Cost of revenues" and "Selling, general and administrative expenses" within the condensed consolidated statements of income. Lease terms and discount rates related to leases were as follows: June 28, Weighted-average remaining lease term (in years): Finance leases 2.3 Operating leases 4.6 Weighted-average discount rate: Finance leases 4.15 % Operating leases 4.10 % Other information related to leases was as follows: Six Months Ended June 28, (in millions) Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 86 Financing cash flows from finance leases 4 Lease liabilities arising from obtaining ROU assets: Operating lease liabilities $ 34 The Company's future minimum lease commitments of its finance and operating leases on an undiscounted basis, reconciled to the respective lease liability at June 28, 2019 , were as follows: Fiscal Year Ending Finance lease commitments Operating lease commitments (in millions) 2019 (remainder of year) $ 4 $ 81 2020 5 129 2021 1 80 2022 2 59 2023 — 40 2024 and thereafter — 77 Total undiscounted cash flows 12 466 Less: imputed interest (1 ) (43 ) Lease liability as of June 28, 2019 $ 11 $ 423 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. Disclosures related to periods prior to adoption of ASC 842 During the quarter and six months ended June 29, 2018 , the Company had $38 million and $80 million of net rental expense, respectively. Future minimum lease commitments and sublease receipts, under non-cancelable operating leases in effect at December 28, 2018, were as follows: Fiscal Year Ending Capital lease commitments Operating lease commitments Sublease receipts (in millions) 2019 $ 3 $ 144 $ 3 2020 — 114 1 2021 — 83 1 2022 — 71 — 2023 — 55 — 2024 and thereafter — 246 — Total $ 3 $ 713 $ 5 |
Leases | Note 4–Leases The Company's ROU assets and lease liabilities consisted of the following: Balance sheet line item June 28, (in millions) ROU assets: Finance leases Property, plant and equipment, net $ 11 Operating leases Operating lease right-of-use assets, net 383 $ 394 Current lease liabilities: Finance leases Long-term debt, current portion $ 8 Operating leases Accounts payable and accrued liabilities 138 $ 146 Non-current lease liabilities: Finance leases Long-term debt, net of current portion $ 3 Operating leases Operating lease liabilities 285 $ 288 The Company's total lease cost for the periods presented consisted of the following: Three Months Ended Six Months Ended June 28, June 28, (in millions) Finance lease cost: Amortization of ROU assets $ 2 $ 4 Operating lease cost 42 82 Variable lease cost 25 51 Short-term lease cost 1 3 Less: Sublease income (1 ) (1 ) Total lease cost $ 69 $ 139 The Company's lease costs are included in "Cost of revenues" and "Selling, general and administrative expenses" within the condensed consolidated statements of income. Lease terms and discount rates related to leases were as follows: June 28, Weighted-average remaining lease term (in years): Finance leases 2.3 Operating leases 4.6 Weighted-average discount rate: Finance leases 4.15 % Operating leases 4.10 % Other information related to leases was as follows: Six Months Ended June 28, (in millions) Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 86 Financing cash flows from finance leases 4 Lease liabilities arising from obtaining ROU assets: Operating lease liabilities $ 34 The Company's future minimum lease commitments of its finance and operating leases on an undiscounted basis, reconciled to the respective lease liability at June 28, 2019 , were as follows: Fiscal Year Ending Finance lease commitments Operating lease commitments (in millions) 2019 (remainder of year) $ 4 $ 81 2020 5 129 2021 1 80 2022 2 59 2023 — 40 2024 and thereafter — 77 Total undiscounted cash flows 12 466 Less: imputed interest (1 ) (43 ) Lease liability as of June 28, 2019 $ 11 $ 423 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. Disclosures related to periods prior to adoption of ASC 842 During the quarter and six months ended June 29, 2018 , the Company had $38 million and $80 million of net rental expense, respectively. Future minimum lease commitments and sublease receipts, under non-cancelable operating leases in effect at December 28, 2018, were as follows: Fiscal Year Ending Capital lease commitments Operating lease commitments Sublease receipts (in millions) 2019 $ 3 $ 144 $ 3 2020 — 114 1 2021 — 83 1 2022 — 71 — 2023 — 55 — 2024 and thereafter — 246 — Total $ 3 $ 713 $ 5 |
Revenues
Revenues | 6 Months Ended |
Jun. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Note 5–Revenues Remaining Performance Obligations Remaining performance obligations represent the expected value of exercised contracts, both funded and unfunded, less revenue recognized to date. Remaining performance obligations do not include unexercised option periods and future potential task orders expected to be awarded under indefinite delivery/indefinite quantity ("IDIQ") contracts with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future task orders is anticipated. As of June 28, 2019 , the Company had $10.6 billion of remaining performance obligations, which are expected to be recognized as revenue in the amounts of $5.4 billion , $2.4 billion and $2.8 billion for the remainder of fiscal 2019, fiscal 2020 and fiscal 2021 and thereafter, respectively. Disaggregation of Revenues The Company disaggregates revenues by customer-type, contract-type and geographic location for each of its reportable segments. These categories represent how the nature, timing and uncertainty of revenues and cash flows are affected. Prior year amounts have been recast for the contracts that were reassigned between the Defense Solutions and Civil reportable segments (see " Note 18–Business Segments "). Disaggregated revenues by customer-type were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) DoD and U.S. Intelligence Community (1) $ 1,158 $ 45 $ 113 $ 1,316 $ 2,274 $ 88 $ 237 $ 2,599 Other government agencies (1)(2) 66 664 349 1,079 128 1,271 660 2,059 Commercial and non-U.S. customers 122 172 39 333 211 369 67 647 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) DoD and U.S. Intelligence Community (3) $ 1,112 $ 26 $ 82 $ 1,220 $ 2,156 $ 49 $ 174 $ 2,379 Other government agencies (2)(3) 46 565 327 938 92 1,141 625 1,858 Commercial and non-U.S. customers 104 225 42 371 203 455 77 735 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 (1) For the six months ended June 28, 2019, the Company reclassified $6 million within the Defense Solutions segment from "Other government agencies" to "DoD and U.S. Intelligence Community" to reflect the change in disaggregation of U.S. government customers in the current period. (2) Includes federal government agencies other than the DoD and U.S. Intelligence Community, as well as state and local government agencies. (3) For the quarter and six months ended June 29, 2018, the Company reclassified $13 million and $25 million , respectively, within the Defense Solutions segment from "Other government agencies" to "DoD and U.S. Intelligence Community" to reflect the change in disaggregation of U.S. government customers in the current period. The majority of the Company's revenues are generated from U.S. government contracts, either as a prime contractor or as a subcontractor to other contractors. Revenues from the U.S. government can be adversely impacted by spending caps or changes in budgetary priorities of the U.S. government, as well as delays in program start dates or the award of a contract. Disaggregated revenues by contract-type were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) Cost-reimbursement and fixed-price-incentive-fee $ 916 $ 492 $ 47 $ 1,455 $ 1,814 $ 956 $ 116 $ 2,886 Firm-fixed-price 313 247 334 894 571 495 612 1,678 Time-and-materials and fixed-price-level-of-effort 117 142 120 379 228 277 236 741 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) Cost-reimbursement and fixed-price-incentive-fee $ 861 $ 474 $ 42 $ 1,377 $ 1,632 $ 913 $ 92 $ 2,637 Firm-fixed-price 265 197 284 746 558 443 537 1,538 Time-and-materials and fixed-price-level-of-effort 136 145 125 406 261 289 247 797 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 Cost-reimbursement and fixed-price-incentive-fee contracts are generally lower risk and have lower profits. Time-and-materials ("T&M") and fixed-price-level-of-effort contracts are also lower risk but profits may vary depending on actual labor costs compared to negotiated contract billing rates. Firm-fixed-price ("FFP") contracts offer the potential for higher profits while increasing the Company’s exposure to risk of cost overruns. Disaggregated revenues by geographic location were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) United States $ 1,238 $ 775 $ 501 $ 2,514 $ 2,428 $ 1,497 $ 964 $ 4,889 International 108 106 — 214 185 231 — 416 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) United States $ 1,169 $ 688 $ 451 $ 2,308 $ 2,268 $ 1,373 $ 876 $ 4,517 International 93 128 — 221 183 272 — 455 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 The Company's international business operations, primarily located in Australia and the U.K., are subject to additional and different risks than its U.S. business. Failure to comply with U.S government laws and regulations applicable to international business, such as the Foreign Corrupt Practices Act or U.S. export control regulations, could have an adverse impact on the Company's business with the U.S. government. In some countries, there is an increased chance for economic, legal or political changes that may adversely affect the performance of the Company's services, sales of products or repatriation of profits. International transactions can also involve increased financial and legal risks arising from foreign exchange variability, imposition of tariffs or additional taxes and restrictive trade policies, and delays or failure to collect amounts due to differing legal systems. For the quarter and six months ended June 28, 2019 , revenues include $12 million and $30 million recognized under ASC 842, respectively. Note 6–Contract Assets and Liabilities The Company’s performance obligations are satisfied either over time as work progresses or at a point in time. FFP contracts are typically billed to the customer using milestone payments while cost-reimbursable and T&M contracts are typically billed to the customer on a monthly or bi-weekly basis as indicated by the negotiated billing terms and conditions of the contract. As a result, for each of the Company’s contracts, the timing of revenue recognition, customer billings and cash collections results in a net contract asset or liability at the end of each reporting period. Contract assets consist of unbilled receivables, which is the amount of revenue recognized that exceeds the amount billed to the customer, where right to payment is not just subject to the passage of time. Contract liabilities consist of deferred revenue. The components of contract assets and contract liabilities consisted of the following: Balance sheet line item June 28, December 28, (in millions) Contract assets - current: Unbilled receivables (1) Receivables, net $ 737 $ 818 Contract liabilities - current: Deferred revenue Accounts payable and accrued liabilities $ 338 $ 276 Contract liabilities - non-current: Deferred revenue Other long-term liabilities $ 9 $ 10 (1) Balances exclude $467 million and $381 million determined to be billable at June 28, 2019 , and December 28, 2018 , respectively. The decrease in unbilled receivables was primarily due to the timing of revenue recognized on certain contracts. The increase in deferred revenue was primarily due to the timing of advance payments from customers offset by revenue recognized during the period. Revenue recognized for the quarter and six months ended June 28, 2019 of $136 million and $249 million , respectively, was included as a contract liability at December 28, 2018 . Revenue recognized for the quarter and six months ended June 29, 2018 of $72 million and $127 million , respectively, was included as a contract liability at December 30, 2017 (date of adoption). |
Contract Asset and Liabilities
Contract Asset and Liabilities | 6 Months Ended |
Jun. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Contract Asset and Liabilities | Note 5–Revenues Remaining Performance Obligations Remaining performance obligations represent the expected value of exercised contracts, both funded and unfunded, less revenue recognized to date. Remaining performance obligations do not include unexercised option periods and future potential task orders expected to be awarded under indefinite delivery/indefinite quantity ("IDIQ") contracts with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future task orders is anticipated. As of June 28, 2019 , the Company had $10.6 billion of remaining performance obligations, which are expected to be recognized as revenue in the amounts of $5.4 billion , $2.4 billion and $2.8 billion for the remainder of fiscal 2019, fiscal 2020 and fiscal 2021 and thereafter, respectively. Disaggregation of Revenues The Company disaggregates revenues by customer-type, contract-type and geographic location for each of its reportable segments. These categories represent how the nature, timing and uncertainty of revenues and cash flows are affected. Prior year amounts have been recast for the contracts that were reassigned between the Defense Solutions and Civil reportable segments (see " Note 18–Business Segments "). Disaggregated revenues by customer-type were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) DoD and U.S. Intelligence Community (1) $ 1,158 $ 45 $ 113 $ 1,316 $ 2,274 $ 88 $ 237 $ 2,599 Other government agencies (1)(2) 66 664 349 1,079 128 1,271 660 2,059 Commercial and non-U.S. customers 122 172 39 333 211 369 67 647 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) DoD and U.S. Intelligence Community (3) $ 1,112 $ 26 $ 82 $ 1,220 $ 2,156 $ 49 $ 174 $ 2,379 Other government agencies (2)(3) 46 565 327 938 92 1,141 625 1,858 Commercial and non-U.S. customers 104 225 42 371 203 455 77 735 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 (1) For the six months ended June 28, 2019, the Company reclassified $6 million within the Defense Solutions segment from "Other government agencies" to "DoD and U.S. Intelligence Community" to reflect the change in disaggregation of U.S. government customers in the current period. (2) Includes federal government agencies other than the DoD and U.S. Intelligence Community, as well as state and local government agencies. (3) For the quarter and six months ended June 29, 2018, the Company reclassified $13 million and $25 million , respectively, within the Defense Solutions segment from "Other government agencies" to "DoD and U.S. Intelligence Community" to reflect the change in disaggregation of U.S. government customers in the current period. The majority of the Company's revenues are generated from U.S. government contracts, either as a prime contractor or as a subcontractor to other contractors. Revenues from the U.S. government can be adversely impacted by spending caps or changes in budgetary priorities of the U.S. government, as well as delays in program start dates or the award of a contract. Disaggregated revenues by contract-type were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) Cost-reimbursement and fixed-price-incentive-fee $ 916 $ 492 $ 47 $ 1,455 $ 1,814 $ 956 $ 116 $ 2,886 Firm-fixed-price 313 247 334 894 571 495 612 1,678 Time-and-materials and fixed-price-level-of-effort 117 142 120 379 228 277 236 741 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) Cost-reimbursement and fixed-price-incentive-fee $ 861 $ 474 $ 42 $ 1,377 $ 1,632 $ 913 $ 92 $ 2,637 Firm-fixed-price 265 197 284 746 558 443 537 1,538 Time-and-materials and fixed-price-level-of-effort 136 145 125 406 261 289 247 797 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 Cost-reimbursement and fixed-price-incentive-fee contracts are generally lower risk and have lower profits. Time-and-materials ("T&M") and fixed-price-level-of-effort contracts are also lower risk but profits may vary depending on actual labor costs compared to negotiated contract billing rates. Firm-fixed-price ("FFP") contracts offer the potential for higher profits while increasing the Company’s exposure to risk of cost overruns. Disaggregated revenues by geographic location were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) United States $ 1,238 $ 775 $ 501 $ 2,514 $ 2,428 $ 1,497 $ 964 $ 4,889 International 108 106 — 214 185 231 — 416 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) United States $ 1,169 $ 688 $ 451 $ 2,308 $ 2,268 $ 1,373 $ 876 $ 4,517 International 93 128 — 221 183 272 — 455 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 The Company's international business operations, primarily located in Australia and the U.K., are subject to additional and different risks than its U.S. business. Failure to comply with U.S government laws and regulations applicable to international business, such as the Foreign Corrupt Practices Act or U.S. export control regulations, could have an adverse impact on the Company's business with the U.S. government. In some countries, there is an increased chance for economic, legal or political changes that may adversely affect the performance of the Company's services, sales of products or repatriation of profits. International transactions can also involve increased financial and legal risks arising from foreign exchange variability, imposition of tariffs or additional taxes and restrictive trade policies, and delays or failure to collect amounts due to differing legal systems. For the quarter and six months ended June 28, 2019 , revenues include $12 million and $30 million recognized under ASC 842, respectively. Note 6–Contract Assets and Liabilities The Company’s performance obligations are satisfied either over time as work progresses or at a point in time. FFP contracts are typically billed to the customer using milestone payments while cost-reimbursable and T&M contracts are typically billed to the customer on a monthly or bi-weekly basis as indicated by the negotiated billing terms and conditions of the contract. As a result, for each of the Company’s contracts, the timing of revenue recognition, customer billings and cash collections results in a net contract asset or liability at the end of each reporting period. Contract assets consist of unbilled receivables, which is the amount of revenue recognized that exceeds the amount billed to the customer, where right to payment is not just subject to the passage of time. Contract liabilities consist of deferred revenue. The components of contract assets and contract liabilities consisted of the following: Balance sheet line item June 28, December 28, (in millions) Contract assets - current: Unbilled receivables (1) Receivables, net $ 737 $ 818 Contract liabilities - current: Deferred revenue Accounts payable and accrued liabilities $ 338 $ 276 Contract liabilities - non-current: Deferred revenue Other long-term liabilities $ 9 $ 10 (1) Balances exclude $467 million and $381 million determined to be billable at June 28, 2019 , and December 28, 2018 , respectively. The decrease in unbilled receivables was primarily due to the timing of revenue recognized on certain contracts. The increase in deferred revenue was primarily due to the timing of advance payments from customers offset by revenue recognized during the period. Revenue recognized for the quarter and six months ended June 28, 2019 of $136 million and $249 million , respectively, was included as a contract liability at December 28, 2018 . Revenue recognized for the quarter and six months ended June 29, 2018 of $72 million and $127 million , respectively, was included as a contract liability at December 30, 2017 (date of adoption). |
Divestitures
Divestitures | 6 Months Ended |
Jun. 28, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Divestitures | Note 7–Divestitures On February 20, 2019, the Company's Civil segment disposed of its commercial cybersecurity business in order to focus on providing solutions, including cybersecurity, to the Company's core markets of governments and highly regulated industries. In February 2019, the Company received initial proceeds of $171 million . During the quarter ended June 28, 2019, working capital adjustments were finalized, resulting in a final sales price of $166 million . The Company recorded a pre-tax gain on sale of $87 million , net of assets divested of $69 million and $10 million in transaction related costs. The gain was recorded in " Other income, net " on the condensed consolidated statements of income. The major classes of assets and liabilities divested were as follows (in millions): Receivables, net $ 14 Other current assets 5 Property, plant and equipment, net 3 Intangible assets, net 5 Goodwill 57 Deferred tax assets 6 Total assets divested $ 90 Accounts payable and accrued liabilities $ (13 ) Accrued payroll and employee benefits (5 ) Other long-term liabilities (3 ) Total liabilities divested $ (21 ) |
Goodwill
Goodwill | 6 Months Ended |
Jun. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Note 8–Goodwill The following table presents changes in the carrying amount of goodwill by reportable segment: Defense Solutions Civil Health Total (in millions) Goodwill at December 29, 2017 $ 2,055 $ 1,998 $ 921 $ 4,974 Foreign currency translation adjustments (40 ) (11 ) — (51 ) Transfers to assets held for sale — (57 ) — (57 ) Adjustment to goodwill — (6 ) — (6 ) Goodwill at December 28, 2018 2,015 1,924 921 4,860 Goodwill re-allocation 25 (25 ) — — Foreign currency translation adjustments (2 ) — — (2 ) Adjustment to goodwill 3 — — 3 Goodwill at June 28, 2019 $ 2,041 $ 1,899 $ 921 $ 4,861 Accumulated goodwill impairment losses were $369 million and $117 million included within the Health and Civil segments, respectively, at June 28, 2019 , December 28, 2018 , and December 29, 2017 . Effective the beginning of fiscal 2019, the Company changed the composition of its Defense Solutions reportable segment, which resulted in the identification of new operating segments and reporting units within Defense Solutions. In addition, certain contracts were reassigned between Civil and Defense solutions reportable segments (see " Note 18–Business Segments "). Consequently, the carrying amount of goodwill was re-allocated among the reporting units for the purpose of testing goodwill for impairment. In conjunction with the changes mentioned above, the Company evaluated goodwill for impairment using a quantitative step one analysis, both before and after the changes were made, and determined that goodwill was not impaired. There were no goodwill impairments during the six months ended June 28, 2019 and June 29, 2018 . During the quarter ended March 29, 2019, the Company recorded an immaterial correction of $3 million with respect to the fair value of assets acquired from Lockheed Martin's Information Systems & Global Solutions business ("the Transactions"). |
Intangible Assets
Intangible Assets | 6 Months Ended |
Jun. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Note 9–Intangible Assets Intangible assets consisted of the following: June 28, 2019 December 28, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value (in millions) Finite-lived intangible assets: Program and contract intangibles $ 1,003 $ (455 ) $ 548 $ 1,003 $ (374 ) $ 629 Software and technology 98 (79 ) 19 93 (74 ) 19 Customer relationships 4 (4 ) — 4 (4 ) — Total finite-lived intangible assets 1,105 (538 ) 567 1,100 (452 ) 648 Indefinite-lived intangible assets: Trade names 4 — 4 4 — 4 Total intangible assets $ 1,109 $ (538 ) $ 571 $ 1,104 $ (452 ) $ 652 Amortization expense was $43 million and $86 million , for the quarter and six months ended June 28, 2019 , respectively, and $51 million and $101 million for the quarter and six months ended June 29, 2018 , respectively. Program and contract 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. Customer relationships are amortized on a straight-line basis over their estimated useful lives. Software and technology intangible assets are amortized either on a straight-line basis over their estimated useful lives or over their respective estimated useful lives in proportion to the pattern of economic benefit based on expected future discounted cash flows, as deemed appropriate. The estimated annual amortization expense as of June 28, 2019 , was as follows: Fiscal year ending (in millions) 2019 (remainder of year) $ 85 2020 128 2021 107 2022 93 2023 74 2024 and thereafter 80 $ 567 |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Note 10–Property, Plant and Equipment Property, plant and equipment, net consisted of the following: June 28, December 28, (in millions) Computers and other equipment $ 249 $ 233 Leasehold improvements 188 206 Office furniture and fixtures 35 36 Buildings and improvements 23 56 Land 4 40 Construction in progress 39 15 538 586 Less: accumulated depreciation (322 ) (349 ) $ 216 $ 237 Depreciation expense was $14 million and $29 million for the quarter and six months ended June 28, 2019 , respectively, and $15 million and $28 million for the quarter and six months ended June 29, 2018 , respectively. Sale and Leaseback Agreements Gaithersburg, MD Property On December 31, 2018, the Company closed the sale and leaseback agreement relating to its land and building in Gaithersburg, MD. The Company received proceeds of $31 million , net of selling costs for the property, which had a carrying value of $31 million . The term of the lease is expected to end during fiscal 2020. During the quarter ended March 30, 2018, an impairment charge of $7 million associated with this property was recorded within Corporate. San Diego, CA Properties On December 28, 2018, the Company closed the sale and leaseback agreement relating to two buildings and the adjacent land in San Diego, CA for consideration of $79 million , net of selling costs. The carrying value of the land and buildings was $14 million . The Company received cash proceeds of $14 million upon closing in December 2018, and received the remaining $65 million cash proceeds in January 2019. The term of the lease is expected to end during fiscal 2036. Prior to the adoption of ASC 842, the consideration of $79 million was recorded as a financing transaction. Under ASC 842, the transaction qualified as a sale-leaseback and consequently the debt of $79 million and the carrying value of the property of $14 million , net of the related tax impact of $17 million |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Jun. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 11–Fair Value Measurements The accounting standard for fair value measurements establishes a three-level fair 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 Company's financial instruments measured at fair value on a recurring basis consisted of the following: June 28, 2019 December 28, 2018 Carrying value Fair value Carrying value Fair value (in millions) Financial assets: Derivatives $ 4 $ 4 $ — $ — Financial liabilities: Derivatives $ 77 $ 77 $ 35 $ 35 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 12–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 note receivable of $25 million and $24 million as of June 28, 2019 , and December 28, 2018 , respectively, approximates fair value as the stated interest rate within the agreement is consistent with current market rates used in notes with similar terms in the market (Level 2 inputs). As of June 28, 2019 , and December 28, 2018 , the fair value of debt was $3.1 billion and the carrying amount was $3.0 billion and $3.1 billion , respectively (see " Note 13–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). During the six months ended June 28, 2019 , the Company did not have any assets or liabilities measured at fair value on a non-recurring basis. |
Derivative Instruments
Derivative Instruments | 6 Months Ended |
Jun. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 12–Derivative Instruments The Company manages its risk to changes in interest rates through the use of derivative instruments. The Company does not hold derivative instruments for trading or speculative purposes. 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. 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 the Company's interest rate swaps was as follows: Asset derivatives Balance sheet line item June 28, December 28, (in millions) Fair value interest rate swaps Other assets $ 4 $ — Liability derivatives Balance sheet line item June 28, December 28, (in millions) Fair value interest rate swaps Other long-term liabilities $ — $ 3 Cash flow interest rate swaps Other long-term liabilities 77 32 $ 77 $ 35 The cash flows associated with the interest rate swaps are classified as operating activities in the condensed consolidated statements of cash flows. Fair Value Hedge 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. 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) (See " Note 13–Debt "). 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. The following amounts were recorded on the condensed consolidated balance sheets related to cumulative basis adjustments for fair value hedges: Carrying amount of hedged item Cumulative amount of fair value adjustment included within the hedged item Balance sheet line item of hedged item June 28, December 28, June 28, December 28, (in millions) Long-term debt, net of current portion $ 453 $ 447 $ 4 $ (3 ) Cash Flow Hedges The Company has interest rate swap agreements to hedge the cash flows of a portion of its variable rate senior secured term loans (the "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 are 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. In February 2018, the Company entered into interest rate swap agreements to hedge the cash flows of an additional $250 million of its Variable Rate Loans. The interest rate swap agreements on $1.1 billion of the Company's Variable Rate Loans had a maturity date of December 2021 and a fixed interest rate of 1.08% . The interest rate swap agreements on $300 million and $250 million of the Company's Variable Rate Loans both had a maturity date of August 2022 and fixed interest rates of 1.66% and 2.59% , respectively. In September 2018, the Company terminated its existing interest rate swaps. The net derivative gain of $60 million related to the discontinued cash flow hedge remained within accumulated other comprehensive loss and is being reclassified into earnings over the remaining life of the original hedge as the hedged variable rate debt impacts earnings. Additionally, in September 2018, the Company entered into new interest rate swap agreements to hedge the cash flows of $1.5 billion of the Company's Variable Rate Loans. These interest rate swap agreements have a maturity date of August 2025 and a fixed interest rate of 3.00% . The interest rate swap transactions were accounted for as cash flow hedges. The gain/loss on the swap is reported as a component of other comprehensive income (loss) and is reclassified into earnings when the interest payments on the underlying hedged items impact earnings. A qualitative assessment of hedge effectiveness is performed on a quarterly basis, unless facts and circumstances indicate the hedge may no longer be highly effective. The effect of the Company's cash flow hedges on other comprehensive loss and earnings for the periods presented was as follows: Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, (in millions) Total interest expense, net presented in the condensed consolidated statements of income in which the effects of cash flow hedges are recorded $ 33 $ 35 $ 71 $ 69 Amount recognized in other comprehensive loss $ (31 ) $ 7 $ (49 ) $ 21 Amount reclassified from accumulated other comprehensive loss to interest expense, net (2 ) (2 ) (4 ) (3 ) The Company expects to reclassify net gains of $5 million |
Debt
Debt | 6 Months Ended |
Jun. 28, 2019 | |
Debt Disclosure [Abstract] | |
Debt | Note 13–Debt The Company's debt consisted of the following: Stated interest rate Effective interest rate June 28, 2019 (1) December 28, 2018 (1) (in millions) Senior secured notes: $450 million notes, due December 2020 4.45% 4.53% $ 453 $ 447 $300 million notes, due December 2040 5.95% 6.03% 216 216 Senior secured term loans: $690 million Term Loan A, due August 2023 4.00% 4.44% 595 617 $310 million Term Loan A, due August 2023 4.00% 4.45% 249 258 $1,131 million Term Loan B, due August 2025 4.25% 4.60% 1,078 1,085 Senior unsecured notes: $250 million notes, due July 2032 7.13% 7.43% 247 246 $300 million notes, due July 2033 5.50% 5.88% 158 158 Notes payable and finance leases due on various dates through fiscal 2022 (see Note 2) 2.85%-5.49% Various 23 97 Total long-term debt 3,019 3,124 Less: current portion 65 72 Total long-term debt, net of current portion $ 2,954 $ 3,052 (1) The carrying amounts of the senior secured term loans and notes and unsecured notes as of June 28, 2019 , and December 28, 2018 , include the remaining principal outstanding of $3,032 million and $3,073 million , respectively, less total unamortized debt discounts and deferred debt issuances costs of $40 million and $43 million , respectively, and a $4 million asset and $3 million liability related to the fair value interest rate swaps (see " Note 12–Derivative Instruments "), respectively. 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 1.25% to 2.00% , depending on the Company's senior secured leverage ratio, and is computed on a quarterly basis. At June 28, 2019 , the current margin on Term Loan A was 1.50% and the margin on Term Loan B was 1.75% . The Company made principal payments on its long-term debt of $17 million and $48 million during the quarter and six months ended June 28, 2019 , respectively, and $27 million and $44 million during the quarter and six months ended June 29, 2018 , respectively. This activity included required quarterly principal payments on its senior secured term loans of $14 million and $41 million during the quarter and six months ended June 28, 2019 , respectively, and $16 million and $31 million during the quarter and six months ended June 29, 2018 , respectively. In April 2018, the Company made a required debt prepayment of $10 million on its senior secured term loans. The prepayment was a result of the annual excess cash flow calculation clause in the Company's credit agreements. The Company has 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 maturity date of this credit facility is August 2023 . As of June 28, 2019 , and December 28, 2018 , there were no borrowings outstanding under the credit facility. Amortization of the debt discount and deferred debt issuance costs related to the senior secured term loans and notes, unsecured notes and revolving credit facility was $2 million and $5 million for the quarter and six months ended June 28, 2019 , respectively, and $3 million and $6 million for the quarter and six months ended June 29, 2018 , respectively. The senior secured term loans and notes, unsecured notes and revolving credit facility are fully and unconditionally guaranteed and 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 June 28, 2019 . |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 6 Months Ended |
Jun. 28, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Loss | Note 14–Accumulated Other Comprehensive Loss Changes in the components of accumulated other comprehensive income (loss) were as follows: Foreign currency translation adjustments Unrecognized gain (loss) on derivative instruments Pension adjustments Total accumulated other comprehensive income (loss) (in millions) Balance at December 29, 2017 $ 17 $ 14 $ 2 $ 33 Cumulative adjustments related to ASU adoptions 3 10 (4 ) 9 Balance at December 30, 2017 20 24 (2 ) 42 Other comprehensive loss (65 ) (7 ) (1 ) (73 ) Taxes 4 3 — 7 Reclassification from accumulated other comprehensive loss — (6 ) — (6 ) Balance at December 28, 2018 (41 ) 14 (3 ) (30 ) Other comprehensive loss (3 ) (49 ) — (52 ) Taxes 1 12 — 13 Reclassification from accumulated other comprehensive loss — (4 ) — (4 ) Balance at June 28, 2019 $ (43 ) $ (27 ) $ (3 ) $ (73 ) Reclassifications from unrecognized gain (loss) on derivative instruments are recorded in "Interest expense, net" in the Company's condensed consolidated statements of income. |
Earnings Per Share (EPS)
Earnings Per Share (EPS) | 6 Months Ended |
Jun. 28, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share (EPS) | Note 15–Earnings Per Share ("EPS") The following table provides a reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented: Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, (in millions) Basic weighted average number of shares outstanding 144 152 144 152 Dilutive common share equivalents—stock options and other stock awards 2 2 2 2 Diluted weighted average number of shares outstanding 146 154 146 154 Anti-dilutive stock-based awards are excluded from the weighted average number of shares outstanding used to compute diluted EPS. The total outstanding stock options and vesting stock awards that were anti-dilutive was 1 million for both the quarter and six months ended June 28, 2019, and 1 million for both the quarter and six months ended June 29, 2018 . On February 21, 2019, the Company entered into an Accelerated Share Repurchase ("ASR") agreement with a financial institution to repurchase shares of its outstanding common stock. During the quarter ended March 29, 2019, the Company paid $200 million to the financial institution and received an initial delivery of 2.6 million shares. In April 2019, the Company received the final delivery of 0.6 million shares related to the ASR agreement. The total number of shares that the Company received under the ASR agreement was based on the volume-weighted-average-price of $63.52 per share for the period February 21, 2019 to April 29, 2019. The purchases were recorded to "Additional paid-in capital" in the condensed consolidated balance sheets. All shares delivered were immediately retired. During the quarter and six months ended June 29, 2018 , the Company made open market repurchases of its common stock for an aggregate purchase price of $90 million and $100 million , respectively. All shares repurchased were immediately retired. |
Supplementary Cash Flow Informa
Supplementary Cash Flow Information and Restricted Cash | 6 Months Ended |
Jun. 28, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Supplementary Cash Flow Information and Restricted Cash | Note 16–Supplementary Cash Flow Information and Restricted Cash Supplementary cash flow information, and non-cash activities, for the periods presented was as follows: Six Months Ended June 28, June 29, (in millions) Supplementary cash flow information: Cash paid for interest $ 84 $ 68 Cash paid for income taxes, net of refunds 89 55 Non-cash financing activity: Purchase of a non-controlling interest $ 1 $ 7 See " Note 4–Leases " for additional supplementary cash flow information related to the Company's leases. The following is a reconciliation of cash and cash equivalents, as reported within the condensed consolidated balance sheets, to the total cash, cash equivalents and restricted cash, as reported within the condensed consolidated statements of cash flows: June 28, December 28, (in millions) Cash and cash equivalents $ 660 $ 327 Restricted cash 43 42 Total cash, cash equivalents and restricted cash $ 703 $ 369 The restricted cash is recorded within "Other current assets" in the Company's condensed consolidated balance sheets. The restricted cash is primarily comprised of advances from customers that are restricted as to use for certain expenditures related to that customer's contract. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 28, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 17–Income Taxes For the quarter ended June 28, 2019 , the effective tax rate was 22.9% compared to 12.1% for the quarter ended June 29, 2018 . The increase in the effective tax rate was primarily due to tax benefits recognized during the quarter ended June 29, 2018, related to the anticipated sale of the Company's commercial cybersecurity business. For the six months ended June 28, 2019 , the effective tax rate was 23.1% compared to 14.8% for the six months ended June 29, 2018 . The increase in the effective tax rate was primarily due to tax benefits recognized during the quarter ended June 29, 2018, related to the anticipated sale of the Company's commercial cybersecurity business and an increase in unrecognized tax benefits. |
Business Segments
Business Segments | 6 Months Ended |
Jun. 28, 2019 | |
Segment Reporting [Abstract] | |
Business Segments | Note 18–Business Segments The Company's operations and reportable segments are organized around the markets served and the nature of the products and services provided to customers in those markets. 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. Effective the beginning of fiscal 2019, the Company changed the composition of its Defense Solutions reportable segment to better align the operations within the reportable segment to the customers it serves. This resulted in the identification of new operating segments within Defense Solutions. In addition, certain contracts were reassigned between the Civil and Defense Solutions reportable segments. While this activity did not have a material impact on the Company's reportable segments prior year segments results have been recast to reflect this change. The segment information for the periods presented was as follows: Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, (in millions) Revenues: Defense Solutions $ 1,346 $ 1,262 $ 2,613 $ 2,451 Civil 881 816 1,728 1,645 Health 501 451 964 876 Total revenues $ 2,728 $ 2,529 $ 5,305 $ 4,972 Operating income (loss): Defense Solutions $ 101 $ 94 $ 190 $ 184 Civil 68 60 141 129 Health 61 68 106 110 Corporate (20 ) (23 ) (35 ) (65 ) Total operating income $ 210 $ 199 $ 402 $ 358 The financial performance measures used to evaluate segment performance are revenues and operating income. As a result, " Interest expense, net ," " Other income, net " and " Income tax expense " as reported in the condensed 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 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. As such, the company does not separately disclose depreciation expense on the condensed consolidated statements of income. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Note 19–Contingencies Legal Proceedings MSA Joint Venture On November 10, 2015, MSA received a final decision by the Department of Energy ("DoE") contracting officer for the Mission Support Contract concluding that certain payments to MSA by the 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 Federal Acquisition Regulations ("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. On February 8, 2019, the U.S. Attorney's office filed a complaint in the United States District Court for the Eastern District of Washington against MSA, Lockheed Martin Corporation, Lockheed Martin Services, Inc. and a Lockheed Martin employee. The complaint alleges violations of the False Claims Act, the Anti-Kickback Act and breach of contract with DoE, among other things. The U.S. Attorney's office had previously advised that a parallel criminal investigation was open, although no subjects or targets of the investigation had been identified. The U.S. Attorney's office has informed MSA that it has closed the criminal investigation. 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, which was stayed pending resolution of the False Claims Act matter. 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 collection of $32 million of that demand, pending resolution of the appeal and without prejudice to MSA's position that it is not liable for any of the DOE's $64 million reimbursement claim. The Company has agreed to indemnify Jacobs Group and Centerra Group, LLC for any liability MSA incurs in this matter. Under the terms of the Separation Agreement, Lockheed Martin 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 June 28, 2019 , the Company had a liability of $39 million recorded in the condensed 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. The amounts payable by the Company are covered by an insurance policy. The terms of the proposed settlement remain subject to court approval. Greek Government Contract In 2003, the Company entered into an FFP 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 , 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. The Company has commenced enforcement proceedings against the Greek government in several jurisdictions. Separately, the Greek government’s effort to annul the award in the Greek courts has been rejected by a final ruling of the Greek Supreme Court. Based on the difficulties encountered to date in enforcing the award, the Company is unable to reliably estimate the ultimate outcome. Arbitration Proceeding The Company is a party to an arbitration proceeding involving a claim by Lockheed Martin for indemnification for $56 million in taxes attributable to deferred revenue recognized as a result of the Transactions. Based on the arguments advanced to date, the Company believes that the claim appears to be without merit and intends to vigorously defend itself in arbitration. The Company does not believe that a material loss is probable, and has therefore not recorded any liability for this matter. 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 condensed 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 the Apple I case. 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 subsequently awarded an additional sum of over $96 million for costs, attorneys' fees, and interest, bringing the total award to VirnetX in the Apple I case to over $439 million . Apple appealed the judgment in the Apple I case with the U.S. Court of Appeals for the Federal Circuit and on January 15, 2019, the court affirmed the $439 million judgment. It is expected that Apple will appeal this decision. On April 10, 2018, a jury trial concluded in an additional patent infringement case brought by VirnetX against Apple, referred to as the Apple II case, in which the jury returned a verdict against Apple for infringement and awarded VirnetX damages in the amount of over $502 million . On April 11, 2018, in a second phase of the Apple II trial, the jury found Apple's infringement to be willful. On August 30, 2018, the federal trial court in the Eastern District of Texas entered a final judgment and rulings on post-trial motions in the Apple II case. The court affirmed the jury’s verdict of over $502 million and granted VirnetX’s motions for supplemental damages, a sunset royalty and royalty rate of $1.20 per infringing device, along with pre-judgment and post-judgment interest and costs. The court denied VirnetX’s motions for enhanced damages, attorneys’ fees, and an injunction. The court also denied Apple’s motions for judgment as a matter of law and for a new trial. An additional sum of over $93 million for costs and pre-judgment interest was subsequently agreed upon pursuant to a court order, bringing the total award to VirnetX in the Apple II case to over $595 million . Apple has filed an appeal of the judgment in the Apple II case with the U.S. Court of Appeals for the Federal Circuit. Under its agreements with VirnetX, the Company would receive 25% of the proceeds obtained by VirnetX after reduction for attorneys' fees and costs. However, the verdicts in these cases remain subject to appeal. In addition, the patents at issue in these cases are subject to U.S. Patent and Trademark Office post-grant inter partes review and/or reexamination proceedings and related appeals, which may result in all or part of these patents being invalidated or the claims of the patents being limited. Thus, no assurances can be given when or if the Company will receive any proceeds in connection with these jury awards. 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 assets or liabilities recorded in connection with this matter as of June 28, 2019 . 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. As of June 28, 2019 , indirect cost audits by the Defense Contract Audit Agency remain open for fiscal 2013 and subsequent fiscal years. 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 may be adversely affected. As of June 28, 2019 , the Company believes it has adequately reserved for potential adjustments from audits or reviews of contract costs. In February 2019, the Company executed an external restructuring advance agreement with the DoD in accordance with provisions of the Defense Federal Acquisition Regulation Supplement, which allows the Company to recover certain specified external restructuring costs. |
Commitments
Commitments | 6 Months Ended |
Jun. 28, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Note 20–Commitments The Company has outstanding letters of credit of $63 million as of June 28, 2019 , principally related to performance guarantees on contracts. The Company also has outstanding surety bonds with a notional amount of $52 million , principally related to performance and subcontractor payment bonds on the Company's contracts. The value of the surety bonds may vary due to changes in the underlying project status and/or contractual modifications. The outstanding letters of credit and surety bonds have various terms with the majority expiring over the remainder of the current fiscal year and the next two fiscal years. Reston, VA Lease Agreement 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, VA (see " Note 4–Leases "). Gaithersburg, MD Lease Agreement On December 31, 2018, the Company closed the sale and leaseback agreement relating to its land and building in Gaithersburg, MD. (see " Note 10–Property, Plant and Equipment "). San Diego, CA Lease Agreement On December 28, 2018, the Company closed the sales and leaseback agreement relating to two buildings and the adjacent land in San Diego, CA (see " Note 10–Property, Plant and Equipment "). |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 28, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 21–Subsequent Events On July 29, 2019, the Company announced that its Board of Directors declared an increase in the quarterly cash dividend on common stock to $0.34 per share, up from the current $0.32 per share, effective in the third quarter of fiscal 2019. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Accounting Standards Update Adopted, and Issued But Not Yet Adopted | Accounting Standards Updates Issued But Not Yet Adopted ASU 2016-13, ASU 2018-19, ASU 2019-05, Financial Instruments – Credit Losses (Topic 326) In June 2016, the FASB issued ASU 2016-13, which 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 for annual and interim reporting periods beginning after December 15, 2019, 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. Early adoption is permitted. In November 2018, the FASB issued ASU 2018-19 "Codification Improvements to Topic 326, Financial Instruments - Credit Losses" to add clarity to certain areas within ASU 2016-13. In May 2019, the FASB issued ASU 2019-05 "Financial Instruments - Credit Losses (Topic 326), Target Transition Relief" which provided transition relief for entities adopting ASU 2016-13 by allowing the election of the fair value option on certain financial instruments. The effective date and the transition methodology for the amendments in these updates are the same as in ASU 2016-13. Accounting Standards Updates Adopted ASU 2016-02, ASU 2018-10, ASU 2018-11, ASU 2018-20, and ASU 2019-01, Leases (Topic 842) In February 2016, the Financial Accounting Standards Board ("FASB") issued ASU 2016-02 ("ASC 842"), which supersedes the current lease guidance under Leases (Topic 840) and makes several changes, such as requiring an entity to recognize a right-of-use ("ROU") asset and corresponding lease obligation on the balance sheet, classified as financing or operating, as appropriate. The update is effective for public companies for annual and interim reporting periods beginning after December 15, 2018, and should be adopted under the modified retrospective approach. In July 2018, the FASB issued ASU 2018-10 "Codification Improvements to Topic 842, Leases" to add clarity to certain areas within ASU 2016-02, and ASU 2018-11 "Targeted Improvements", to add an additional and optional transition method to adopt the new leases standard by allowing recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. The ASU also provided lessors with a practical expedient, by class of underlying asset, to not separate non-lease components from the associated lease components, similar to the expedient provided for lessees. In December 2018, the FASB issued ASU 2018-20 "Narrow-Scope Improvements for Lessors" to add clarity to lessors accounting for sales taxes and other similar taxes collected from lessees, accounting for variable payments for contracts with lease and non-lease components and accounting for certain lessor costs. In March 2019, the FASB issued ASU 2019-01 "Codification Improvements" to Leases (Topic 842) to clarify the codification more generally and/or to correct unintended application of guidance. The effective date and transition requirements of these updates are the same as ASU 2016-02. The Company has elected to adopt certain practical expedients provided under ASC 842, including the option to not apply lease recognition for short-term leases, reassessment of whether expired or existing contracts contain leases, reassessment of lease classification for expired or existing leases, applying a single discount rate to a portfolio of leased assets with similar durations, reassessing initial direct costs and combining lease and non-lease components in revenue arrangements. The Company did not elect the hindsight practical expedient to determine the lease term for existing leases and in assessing impairment for the ROU assets. Effective December 29, 2018, the Company adopted the requirements of ASC 842 using the modified retrospective approach. Comparative information for the prior fiscal year has not been retrospectively adjusted. |
Leases, lessee | The Company has facilities and equipment lease arrangements. An arrangement is determined to be a lease at inception if it conveys the right to control the use of identified property and equipment for a period of time in exchange for consideration. ROU assets represent the Company’s right to use an underlying asset over the lease term and lease liabilities represent its obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recorded on the consolidated balance sheet at lease commencement date based on the present value of the future minimum lease payments over the lease term. When the lease does not include an implicit rate, the discount rate used is the Company’s incremental borrowing rate based on information available at the commencement date. An ROU asset is initially measured by the present value of the remaining lease payments, plus initial direct costs and prepaid lease payments, less any lease incentives received before commencement. The remaining lease cost is allocated over the remaining lease term on a straight-line basis unless another systematic or rational basis is more representative of the pattern in which the underlying asset is expected to be used. ROU assets are evaluated for impairment in a manner consistent with the treatment of other long-lived assets. Certain of the Company’s facility leases contain options to renew or extend the terms of the lease which are included in the determination of the ROU assets and lease liabilities when it is reasonably certain that the Company will exercise the option. The Company's leases may also include variable lease payments such as an escalation clause based on consumer price index rates, maintenance costs and utilities. Variable lease payments that depend on an index or a rate are included in the determination of ROU assets and lease liabilities using the index or rate at the lease commencement date, whereas variable lease payments that do not depend on an index or rate are recorded as lease expense in the period incurred. At June 28, 2019 , the Company did not have any lease agreements with residual value guarantees. As a result of the adoption of ASC 842, the Company elected to not separate non-lease components from lease components and instead account for both components as a single lease, combining lease and non-lease components in revenue arrangements. The related lease payments on the Company’s short-term facilities and equipment leases are recognized as expense on a straight-line basis over the lease term. |
Changes in Estimates on Contracts | Changes in Estimates on Contracts Changes in estimates related to contracts accounted for using the cost-to-cost 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 a business combination, where the adjustment is made for the period commencing from the date of acquisition. The impact on diluted earnings per share ("EPS") attributable to Leidos common stockholders is calculated using the Company's statutory tax rate. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Accounting Standards (Tables)
Accounting Standards (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of cumulative effect of the changes made to the Company’s consolidated balance sheet for the adoption of the ASUs | The cumulative effect of the changes made to the Company's condensed consolidated balance sheet for the adoption of ASU 2016-02 was as follows: Balance at December 28, 2018 Adjustments due to ASU 2016-02 Balance at December 29, 2018 (in millions) Assets - non-current: Property, plant and equipment, net $ 237 $ 1 $ 238 Operating lease right-of-use assets, net — 418 418 Liabilities - current: Accounts payable and accrued liabilities $ 1,491 $ 132 $ 1,623 Long-term debt, current portion 72 8 80 Liabilities - non-current: Long-term debt, net of current portion $ 3,052 $ (72 ) $ 2,980 Operating lease liabilities — 320 320 Deferred tax liabilities 170 17 187 Other long-term liabilities 178 (34 ) 144 Equity: Retained earnings $ 372 $ 48 $ 420 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Accounting Policies [Abstract] | |
Schedule of changes In estimates on contracts | Changes in estimates on contracts were as follows: Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, (in millions, except per share amounts) Favorable impact $ 23 $ 51 $ 46 $ 101 Unfavorable impact (10 ) (17 ) (29 ) (32 ) Net impact to income before income taxes $ 13 $ 34 $ 17 $ 69 Impact on diluted EPS attributable to Leidos common stockholders $ 0.07 $ 0.17 $ 0.09 $ 0.34 |
Leases (Tables)
Leases (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Leases [Abstract] | |
Schedule of ROU assets and lease liabilities | The Company's ROU assets and lease liabilities consisted of the following: Balance sheet line item June 28, (in millions) ROU assets: Finance leases Property, plant and equipment, net $ 11 Operating leases Operating lease right-of-use assets, net 383 $ 394 Current lease liabilities: Finance leases Long-term debt, current portion $ 8 Operating leases Accounts payable and accrued liabilities 138 $ 146 Non-current lease liabilities: Finance leases Long-term debt, net of current portion $ 3 Operating leases Operating lease liabilities 285 $ 288 |
Schedule of lease cost | The Company's total lease cost for the periods presented consisted of the following: Three Months Ended Six Months Ended June 28, June 28, (in millions) Finance lease cost: Amortization of ROU assets $ 2 $ 4 Operating lease cost 42 82 Variable lease cost 25 51 Short-term lease cost 1 3 Less: Sublease income (1 ) (1 ) Total lease cost $ 69 $ 139 |
Schedule of other information related to leases | Lease terms and discount rates related to leases were as follows: June 28, Weighted-average remaining lease term (in years): Finance leases 2.3 Operating leases 4.6 Weighted-average discount rate: Finance leases 4.15 % Operating leases 4.10 % Other information related to leases was as follows: Six Months Ended June 28, (in millions) Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 86 Financing cash flows from finance leases 4 Lease liabilities arising from obtaining ROU assets: Operating lease liabilities $ 34 |
Future minimum lease commitments of operating leases | The Company's future minimum lease commitments of its finance and operating leases on an undiscounted basis, reconciled to the respective lease liability at June 28, 2019 , were as follows: Fiscal Year Ending Finance lease commitments Operating lease commitments (in millions) 2019 (remainder of year) $ 4 $ 81 2020 5 129 2021 1 80 2022 2 59 2023 — 40 2024 and thereafter — 77 Total undiscounted cash flows 12 466 Less: imputed interest (1 ) (43 ) Lease liability as of June 28, 2019 $ 11 $ 423 |
Future minimum lease commitments of finance leases | The Company's future minimum lease commitments of its finance and operating leases on an undiscounted basis, reconciled to the respective lease liability at June 28, 2019 , were as follows: Fiscal Year Ending Finance lease commitments Operating lease commitments (in millions) 2019 (remainder of year) $ 4 $ 81 2020 5 129 2021 1 80 2022 2 59 2023 — 40 2024 and thereafter — 77 Total undiscounted cash flows 12 466 Less: imputed interest (1 ) (43 ) Lease liability as of June 28, 2019 $ 11 $ 423 |
Schedule of future minimum rental payments for operating leases, prior to adoption of ASC 842 | Future minimum lease commitments and sublease receipts, under non-cancelable operating leases in effect at December 28, 2018, were as follows: Fiscal Year Ending Capital lease commitments Operating lease commitments Sublease receipts (in millions) 2019 $ 3 $ 144 $ 3 2020 — 114 1 2021 — 83 1 2022 — 71 — 2023 — 55 — 2024 and thereafter — 246 — Total $ 3 $ 713 $ 5 |
Schedule of future minimum lease payments for capital leases | Future minimum lease commitments and sublease receipts, under non-cancelable operating leases in effect at December 28, 2018, were as follows: Fiscal Year Ending Capital lease commitments Operating lease commitments Sublease receipts (in millions) 2019 $ 3 $ 144 $ 3 2020 — 114 1 2021 — 83 1 2022 — 71 — 2023 — 55 — 2024 and thereafter — 246 — Total $ 3 $ 713 $ 5 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of disaggregated revenue | Disaggregated revenues by contract-type were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) Cost-reimbursement and fixed-price-incentive-fee $ 916 $ 492 $ 47 $ 1,455 $ 1,814 $ 956 $ 116 $ 2,886 Firm-fixed-price 313 247 334 894 571 495 612 1,678 Time-and-materials and fixed-price-level-of-effort 117 142 120 379 228 277 236 741 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) Cost-reimbursement and fixed-price-incentive-fee $ 861 $ 474 $ 42 $ 1,377 $ 1,632 $ 913 $ 92 $ 2,637 Firm-fixed-price 265 197 284 746 558 443 537 1,538 Time-and-materials and fixed-price-level-of-effort 136 145 125 406 261 289 247 797 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 Disaggregated revenues by customer-type were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) DoD and U.S. Intelligence Community (1) $ 1,158 $ 45 $ 113 $ 1,316 $ 2,274 $ 88 $ 237 $ 2,599 Other government agencies (1)(2) 66 664 349 1,079 128 1,271 660 2,059 Commercial and non-U.S. customers 122 172 39 333 211 369 67 647 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) DoD and U.S. Intelligence Community (3) $ 1,112 $ 26 $ 82 $ 1,220 $ 2,156 $ 49 $ 174 $ 2,379 Other government agencies (2)(3) 46 565 327 938 92 1,141 625 1,858 Commercial and non-U.S. customers 104 225 42 371 203 455 77 735 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 (1) For the six months ended June 28, 2019, the Company reclassified $6 million within the Defense Solutions segment from "Other government agencies" to "DoD and U.S. Intelligence Community" to reflect the change in disaggregation of U.S. government customers in the current period. (2) Includes federal government agencies other than the DoD and U.S. Intelligence Community, as well as state and local government agencies. (3) For the quarter and six months ended June 29, 2018, the Company reclassified $13 million and $25 million , respectively, within the Defense Solutions segment from "Other government agencies" to "DoD and U.S. Intelligence Community" to reflect the change in disaggregation of U.S. government customers in the current period. Disaggregated revenues by geographic location were as follows: Three Months Ended June 28, 2019 Six Months Ended June 28, 2019 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) United States $ 1,238 $ 775 $ 501 $ 2,514 $ 2,428 $ 1,497 $ 964 $ 4,889 International 108 106 — 214 185 231 — 416 Total $ 1,346 $ 881 $ 501 $ 2,728 $ 2,613 $ 1,728 $ 964 $ 5,305 Three Months Ended June 29, 2018 Six Months Ended June 29, 2018 Defense Solutions Civil Health Total Defense Solutions Civil Health Total (in millions) United States $ 1,169 $ 688 $ 451 $ 2,308 $ 2,268 $ 1,373 $ 876 $ 4,517 International 93 128 — 221 183 272 — 455 Total $ 1,262 $ 816 $ 451 $ 2,529 $ 2,451 $ 1,645 $ 876 $ 4,972 |
Contract Asset and Liabilities
Contract Asset and Liabilities (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Components of contract assets and contract liabilities | The components of contract assets and contract liabilities consisted of the following: Balance sheet line item June 28, December 28, (in millions) Contract assets - current: Unbilled receivables (1) Receivables, net $ 737 $ 818 Contract liabilities - current: Deferred revenue Accounts payable and accrued liabilities $ 338 $ 276 Contract liabilities - non-current: Deferred revenue Other long-term liabilities $ 9 $ 10 (1) Balances exclude $467 million and $381 million determined to be billable at June 28, 2019 , and December 28, 2018 , respectively. |
Divestiture (Tables)
Divestiture (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of major classes of assets and liabilities sold | The major classes of assets and liabilities divested were as follows (in millions): Receivables, net $ 14 Other current assets 5 Property, plant and equipment, net 3 Intangible assets, net 5 Goodwill 57 Deferred tax assets 6 Total assets divested $ 90 Accounts payable and accrued liabilities $ (13 ) Accrued payroll and employee benefits (5 ) Other long-term liabilities (3 ) Total liabilities divested $ (21 ) |
Goodwill (Tables)
Goodwill (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of carrying amount of goodwill by reportable segment | The following table presents changes in the carrying amount of goodwill by reportable segment: Defense Solutions Civil Health Total (in millions) Goodwill at December 29, 2017 $ 2,055 $ 1,998 $ 921 $ 4,974 Foreign currency translation adjustments (40 ) (11 ) — (51 ) Transfers to assets held for sale — (57 ) — (57 ) Adjustment to goodwill — (6 ) — (6 ) Goodwill at December 28, 2018 2,015 1,924 921 4,860 Goodwill re-allocation 25 (25 ) — — Foreign currency translation adjustments (2 ) — — (2 ) Adjustment to goodwill 3 — — 3 Goodwill at June 28, 2019 $ 2,041 $ 1,899 $ 921 $ 4,861 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | Intangible assets consisted of the following: June 28, 2019 December 28, 2018 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value (in millions) Finite-lived intangible assets: Program and contract intangibles $ 1,003 $ (455 ) $ 548 $ 1,003 $ (374 ) $ 629 Software and technology 98 (79 ) 19 93 (74 ) 19 Customer relationships 4 (4 ) — 4 (4 ) — Total finite-lived intangible assets 1,105 (538 ) 567 1,100 (452 ) 648 Indefinite-lived intangible assets: Trade names 4 — 4 4 — 4 Total intangible assets $ 1,109 $ (538 ) $ 571 $ 1,104 $ (452 ) $ 652 |
Schedule of estimated annual amortization expense | The estimated annual amortization expense as of June 28, 2019 , was as follows: Fiscal year ending (in millions) 2019 (remainder of year) $ 85 2020 128 2021 107 2022 93 2023 74 2024 and thereafter 80 $ 567 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, plant and equipment, net | Property, plant and equipment, net consisted of the following: June 28, December 28, (in millions) Computers and other equipment $ 249 $ 233 Leasehold improvements 188 206 Office furniture and fixtures 35 36 Buildings and improvements 23 56 Land 4 40 Construction in progress 39 15 538 586 Less: accumulated depreciation (322 ) (349 ) $ 216 $ 237 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Fair Value Disclosures [Abstract] | |
Schedule of financial assets measured on a recurring basis | The Company's financial instruments measured at fair value on a recurring basis consisted of the following: June 28, 2019 December 28, 2018 Carrying value Fair value Carrying value Fair value (in millions) Financial assets: Derivatives $ 4 $ 4 $ — $ — Financial liabilities: Derivatives $ 77 $ 77 $ 35 $ 35 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of fair value of the Company's interest rate swaps | The fair value of the Company's interest rate swaps was as follows: Asset derivatives Balance sheet line item June 28, December 28, (in millions) Fair value interest rate swaps Other assets $ 4 $ — Liability derivatives Balance sheet line item June 28, December 28, (in millions) Fair value interest rate swaps Other long-term liabilities $ — $ 3 Cash flow interest rate swaps Other long-term liabilities 77 32 $ 77 $ 35 |
Schedule of amounts recorded on the consolidated balance sheets related to cumulative basis adjustments for fair value hedges | The following amounts were recorded on the condensed consolidated balance sheets related to cumulative basis adjustments for fair value hedges: Carrying amount of hedged item Cumulative amount of fair value adjustment included within the hedged item Balance sheet line item of hedged item June 28, December 28, June 28, December 28, (in millions) Long-term debt, net of current portion $ 453 $ 447 $ 4 $ (3 ) |
Schedule of effect of the Company's cash flow hedges on other comprehensive income and earnings | The effect of the Company's cash flow hedges on other comprehensive loss and earnings for the periods presented was as follows: Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, (in millions) Total interest expense, net presented in the condensed consolidated statements of income in which the effects of cash flow hedges are recorded $ 33 $ 35 $ 71 $ 69 Amount recognized in other comprehensive loss $ (31 ) $ 7 $ (49 ) $ 21 Amount reclassified from accumulated other comprehensive loss to interest expense, net (2 ) (2 ) (4 ) (3 ) |
Debt (Tables)
Debt (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of notes payable and long-term debt | The Company's debt consisted of the following: Stated interest rate Effective interest rate June 28, 2019 (1) December 28, 2018 (1) (in millions) Senior secured notes: $450 million notes, due December 2020 4.45% 4.53% $ 453 $ 447 $300 million notes, due December 2040 5.95% 6.03% 216 216 Senior secured term loans: $690 million Term Loan A, due August 2023 4.00% 4.44% 595 617 $310 million Term Loan A, due August 2023 4.00% 4.45% 249 258 $1,131 million Term Loan B, due August 2025 4.25% 4.60% 1,078 1,085 Senior unsecured notes: $250 million notes, due July 2032 7.13% 7.43% 247 246 $300 million notes, due July 2033 5.50% 5.88% 158 158 Notes payable and finance leases due on various dates through fiscal 2022 (see Note 2) 2.85%-5.49% Various 23 97 Total long-term debt 3,019 3,124 Less: current portion 65 72 Total long-term debt, net of current portion $ 2,954 $ 3,052 (1) The carrying amounts of the senior secured term loans and notes and unsecured notes as of June 28, 2019 , and December 28, 2018 , include the remaining principal outstanding of $3,032 million and $3,073 million , respectively, less total unamortized debt discounts and deferred debt issuances costs of $40 million and $43 million , respectively, and a $4 million asset and $3 million liability related to the fair value interest rate swaps (see " Note 12–Derivative Instruments "), respectively. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Equity [Abstract] | |
Schedule of Changes in the components of accumulated other comprehensive (loss) income | Changes in the components of accumulated other comprehensive income (loss) were as follows: Foreign currency translation adjustments Unrecognized gain (loss) on derivative instruments Pension adjustments Total accumulated other comprehensive income (loss) (in millions) Balance at December 29, 2017 $ 17 $ 14 $ 2 $ 33 Cumulative adjustments related to ASU adoptions 3 10 (4 ) 9 Balance at December 30, 2017 20 24 (2 ) 42 Other comprehensive loss (65 ) (7 ) (1 ) (73 ) Taxes 4 3 — 7 Reclassification from accumulated other comprehensive loss — (6 ) — (6 ) Balance at December 28, 2018 (41 ) 14 (3 ) (30 ) Other comprehensive loss (3 ) (49 ) — (52 ) Taxes 1 12 — 13 Reclassification from accumulated other comprehensive loss — (4 ) — (4 ) Balance at June 28, 2019 $ (43 ) $ (27 ) $ (3 ) $ (73 ) |
Earnings Per Share (EPS) (Table
Earnings Per Share (EPS) (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS | The following table provides a reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented: Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, (in millions) Basic weighted average number of shares outstanding 144 152 144 152 Dilutive common share equivalents—stock options and other stock awards 2 2 2 2 Diluted weighted average number of shares outstanding 146 154 146 154 |
Supplementary Cash Flow Infor_2
Supplementary Cash Flow Information and Restricted Cash (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Supplemental Cash Flow Information [Abstract] | |
Schedule of supplementary cash flow information | Supplementary cash flow information, and non-cash activities, for the periods presented was as follows: Six Months Ended June 28, June 29, (in millions) Supplementary cash flow information: Cash paid for interest $ 84 $ 68 Cash paid for income taxes, net of refunds 89 55 Non-cash financing activity: Purchase of a non-controlling interest $ 1 $ 7 See " Note 4–Leases " for additional supplementary cash flow information related to the Company's leases. The following is a reconciliation of cash and cash equivalents, as reported within the condensed consolidated balance sheets, to the total cash, cash equivalents and restricted cash, as reported within the condensed consolidated statements of cash flows: June 28, December 28, (in millions) Cash and cash equivalents $ 660 $ 327 Restricted cash 43 42 Total cash, cash equivalents and restricted cash $ 703 $ 369 |
Business Segments (Tables)
Business Segments (Tables) | 6 Months Ended |
Jun. 28, 2019 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information by segment | The segment information for the periods presented was as follows: Three Months Ended Six Months Ended June 28, June 29, June 28, June 29, (in millions) Revenues: Defense Solutions $ 1,346 $ 1,262 $ 2,613 $ 2,451 Civil 881 816 1,728 1,645 Health 501 451 964 876 Total revenues $ 2,728 $ 2,529 $ 5,305 $ 4,972 Operating income (loss): Defense Solutions $ 101 $ 94 $ 190 $ 184 Civil 68 60 141 129 Health 61 68 106 110 Corporate (20 ) (23 ) (35 ) (65 ) Total operating income $ 210 $ 199 $ 402 $ 358 |
Nature of Operations and Basi_2
Nature of Operations and Basis of Presentation (Detail) - segment | 6 Months Ended | ||
Jun. 28, 2019 | Jan. 26, 2018 | Jan. 25, 2018 | |
Significant Accounting Policies [Line Items] | |||
Number of reportable segments | 3 | ||
Jacob's Group's Interest in MSA | Mission Support Alliance | |||
Significant Accounting Policies [Line Items] | |||
Voting interest acquired | 100.00% | ||
Mission Support Alliance, LLC | |||
Significant Accounting Policies [Line Items] | |||
Controlling ownership interest | 88.00% | 47.00% | |
Mission Support Alliance, LLC | Mission Support Alliance | |||
Significant Accounting Policies [Line Items] | |||
Voting interest acquired | 41.00% |
Accounting Standards (Details)
Accounting Standards (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Dec. 29, 2018 | Dec. 28, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease ROU assets | $ 394 | ||
Assets - non-current: | |||
Property, plant and equipment, net | 216 | $ 238 | $ 237 |
Operating lease right-of-use assets, net | 383 | 418 | 0 |
Liabilities - current: | |||
Accounts payable and accrued liabilities | 1,710 | 1,623 | 1,491 |
Long-term debt, current portion | 65 | 80 | 72 |
Liabilities - non-current: | |||
Long-term debt, net of current portion | 2,954 | 2,980 | 3,052 |
Operating lease liabilities | 285 | 320 | 0 |
Deferred tax liabilities | 185 | 187 | 170 |
Other long-term liabilities | 295 | 144 | 178 |
Equity: | |||
Retained earnings | $ 652 | 420 | $ 372 |
Adjustments due to ASU 2016-02 | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Lease ROU assets | 433 | ||
Lease liabilities | 486 | ||
Assets - non-current: | |||
Property, plant and equipment, net | 1 | ||
Operating lease right-of-use assets, net | 418 | ||
Liabilities - current: | |||
Accounts payable and accrued liabilities | 132 | ||
Long-term debt, current portion | 8 | ||
Liabilities - non-current: | |||
Long-term debt, net of current portion | (72) | ||
Operating lease liabilities | 320 | ||
Deferred tax liabilities | 17 | ||
Other long-term liabilities | (34) | ||
Equity: | |||
Retained earnings | $ 48 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Dec. 29, 2018 | Dec. 28, 2018 | |
Significant Accounting Policies [Line Items] | ||||||
Favorable impact | $ 23 | $ 51 | $ 46 | $ 101 | ||
Unfavorable impact | (10) | (17) | (29) | (32) | ||
Net impact to income before income taxes | $ 13 | $ 34 | $ 17 | $ 69 | ||
Impact on diluted EPS attributable to Leidos common stockholders (usd per share) | $ 0.07 | $ 0.17 | $ 0.09 | $ 0.34 | ||
Revenue recognized for performance obligation satisfied in the previous periods | $ 15 | $ 32 | $ 19 | $ 66 | ||
Accounts payable and accrued liabilities | 1,710 | 1,710 | $ 1,623 | $ 1,491 | ||
Cash and Cash Equivalents | ||||||
Significant Accounting Policies [Line Items] | ||||||
Accounts payable and accrued liabilities | $ 62 | $ 62 | $ 56 |
Leases (Schedule of ROU assets
Leases (Schedule of ROU assets and lease liabilities) (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Dec. 29, 2018 | Dec. 28, 2018 |
ROU assets: | |||
Finance leases, property, ROU assets | $ 11 | ||
Operating lease, ROU assets | 383 | $ 418 | $ 0 |
Non-current ROU assets | 394 | ||
Current lease liabilities: | |||
Finance leases, current lease liabilities | 8 | ||
Operating leases, current lease liabilities | 138 | ||
Current lease liabilities | 146 | ||
Non-current lease liabilities: | |||
Finance leases, non-current lease liabilities | 3 | ||
Operating lease liabilities | 285 | $ 320 | $ 0 |
Non-current lease liabilities | $ 288 |
Leases (Schedule of lease cost)
Leases (Schedule of lease cost) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Jun. 28, 2019 | Jun. 28, 2019 | |
Leases [Abstract] | ||
Amortization of ROU assets | $ 2 | $ 4 |
Operating lease cost | 42 | 82 |
Variable lease cost | 25 | 51 |
Short-term lease cost | 1 | 3 |
Less: Sublease income | (1) | (1) |
Total lease cost | $ 69 | $ 139 |
Leases (Schedule of other infor
Leases (Schedule of other information related to leases) (Details) $ in Millions | 6 Months Ended |
Jun. 28, 2019USD ($) | |
Leases [Abstract] | |
Finance leases, weighted-average remaining lease term | 2 years 3 months 18 days |
Operating leases, weighted-average remaining lease term | 4 years 7 months 6 days |
Finance leases, weighted average discount rate | 4.15% |
Operating leases, weighted average discount rate | 4.10% |
Operating cash flows from operating leases | $ 86 |
Financing cash flows from finance leases | 4 |
Operating lease liabilities | $ 34 |
Leases (Schedule of future mini
Leases (Schedule of future minimum lease commitments) (Details) $ in Millions | Jun. 28, 2019USD ($) |
Finance lease commitments | |
2019 (remainder of year) | $ 4 |
2020 | 5 |
2021 | 1 |
2022 | 2 |
2023 | 0 |
2024 and thereafter | 0 |
Total undiscounted cash flows | 12 |
Less: imputed interest | (1) |
Lease liability as of June 28, 2019 | 11 |
Operating lease commitments | |
2019 (remainder of year) | 81 |
2020 | 129 |
2021 | 80 |
2022 | 59 |
2023 | 40 |
2024 and thereafter | 77 |
Total undiscounted cash flows | 466 |
Less: imputed interest | (43) |
Lease liability as of June 28, 2019 | $ 423 |
Leases (Narrative) (Details)
Leases (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | |
Jun. 29, 2018 | Jun. 29, 2018 | Jan. 24, 2018 | |
Leases [Abstract] | |||
Operating lease, initial term | 148 months | ||
Operating lease, rent expense for the first lease year | $ 11 | ||
Annual rent increase percentage | 2.50% | ||
Rental expense | $ 38 | $ 80 |
Leases (Schedule of future mi_2
Leases (Schedule of future minimum rental payments for operating leases, prior to adoption of ASC 842) (Details) $ in Millions | Dec. 28, 2018USD ($) |
Capital lease commitments | |
2019 | $ 3 |
2020 | 0 |
2021 | 0 |
2022 | 0 |
2023 | 0 |
2024 and thereafter | 0 |
Total | 3 |
Operating lease commitments | |
2019 | 144 |
2020 | 114 |
2021 | 83 |
2022 | 71 |
2023 | 55 |
2024 and thereafter | 246 |
Total | 713 |
Sublease receipts | |
2019 | 3 |
2020 | 1 |
2021 | 1 |
2022 | 0 |
2023 | 0 |
2024 and thereafter | 0 |
Total | $ 5 |
Revenues (Narrative) (Details)
Revenues (Narrative) (Details) $ in Billions | Jun. 28, 2019USD ($) |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations, which are expected to be recognized as revenue | $ 10.6 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-06-29 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations, which are expected to be recognized as revenue | $ 5.4 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Remaining performance obligations, which are expected to be recognized as revenue, period | 6 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-04 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations, which are expected to be recognized as revenue | $ 2.4 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Remaining performance obligations, which are expected to be recognized as revenue, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-02 | |
Revenue from Contract with Customer [Abstract] | |
Remaining performance obligations, which are expected to be recognized as revenue | $ 2.8 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |
Remaining performance obligations, which are expected to be recognized as revenue, period |
Revenues (Disaggregation of rev
Revenues (Disaggregation of revenue) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 2,728 | $ 2,529 | $ 5,305 | $ 4,972 |
Lease revenues | 12 | 30 | ||
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 2,514 | 2,308 | 4,889 | 4,517 |
International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 214 | 221 | 416 | 455 |
Cost-reimbursement and fixed-price-incentive-fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,455 | 1,377 | 2,886 | 2,637 |
Firm-fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 894 | 746 | 1,678 | 1,538 |
Time-and-materials and fixed-price-level-of-effort | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 379 | 406 | 741 | 797 |
DoD and U.S. Intelligence Community | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,316 | 1,220 | 2,599 | 2,379 |
Other government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,079 | 938 | 2,059 | 1,858 |
Commercial and non-U.S. customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 333 | 371 | 647 | 735 |
Defense Solutions | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,346 | 1,262 | 2,613 | 2,451 |
Revenue reclassified | 13 | 6 | 25 | |
Defense Solutions | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,238 | 1,169 | 2,428 | 2,268 |
Defense Solutions | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 108 | 93 | 185 | 183 |
Defense Solutions | Cost-reimbursement and fixed-price-incentive-fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 916 | 861 | 1,814 | 1,632 |
Defense Solutions | Firm-fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 313 | 265 | 571 | 558 |
Defense Solutions | Time-and-materials and fixed-price-level-of-effort | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 117 | 136 | 228 | 261 |
Defense Solutions | DoD and U.S. Intelligence Community | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 1,158 | 1,112 | 2,274 | 2,156 |
Defense Solutions | Other government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 66 | 46 | 128 | 92 |
Defense Solutions | Commercial and non-U.S. customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 122 | 104 | 211 | 203 |
Civil | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 881 | 816 | 1,728 | 1,645 |
Civil | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 775 | 688 | 1,497 | 1,373 |
Civil | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 106 | 128 | 231 | 272 |
Civil | Cost-reimbursement and fixed-price-incentive-fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 492 | 474 | 956 | 913 |
Civil | Firm-fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 247 | 197 | 495 | 443 |
Civil | Time-and-materials and fixed-price-level-of-effort | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 142 | 145 | 277 | 289 |
Civil | DoD and U.S. Intelligence Community | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 45 | 26 | 88 | 49 |
Civil | Other government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 664 | 565 | 1,271 | 1,141 |
Civil | Commercial and non-U.S. customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 172 | 225 | 369 | 455 |
Health | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 501 | 451 | 964 | 876 |
Health | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 501 | 451 | 964 | 876 |
Health | International | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 0 | 0 | 0 | 0 |
Health | Cost-reimbursement and fixed-price-incentive-fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 47 | 42 | 116 | 92 |
Health | Firm-fixed-price | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 334 | 284 | 612 | 537 |
Health | Time-and-materials and fixed-price-level-of-effort | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 120 | 125 | 236 | 247 |
Health | DoD and U.S. Intelligence Community | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 113 | 82 | 237 | 174 |
Health | Other government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 349 | 327 | 660 | 625 |
Health | Commercial and non-U.S. customers | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 39 | $ 42 | $ 67 | $ 77 |
Contract Asset and Liabilitie_2
Contract Asset and Liabilities (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Dec. 28, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 |
Revenue from Contract with Customer [Abstract] | ||||||
Contract assets - current | $ 737 | $ 818 | $ 737 | $ 737 | ||
Contract liabilities - current | 338 | 276 | 338 | 338 | ||
Contract liabilities - non-current | 9 | 10 | 9 | 9 | ||
Contract assets billable | $ 467 | $ 381 | ||||
Contract liability revenue recognized | $ 136 | $ 72 | $ 249 | $ 127 |
Divestitures (Narrative) (Detai
Divestitures (Narrative) (Details) - USD ($) $ in Millions | Feb. 20, 2019 | Jun. 28, 2019 | Jun. 28, 2019 | Jun. 29, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from disposition of business | $ 171 | $ 0 | ||
Gain on sale of business | 87 | $ 0 | ||
Civil | Disposal Group, Disposed of by Sale, Not Discontinued Operations | Cybersecurity Business | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Proceeds from disposition of business | $ 171 | |||
Final sale price of business disposal | $ 166 | $ 166 | ||
Gain on sale of business | 87 | |||
Assets divested | 69 | |||
Transaction costs of business disposal | $ 10 |
Divestitures (Schedule of major
Divestitures (Schedule of major classes of assets and liabilities sold) (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Feb. 20, 2019 | Dec. 28, 2018 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Total assets divested | $ 0 | $ 92 | |
Total liabilities divested | $ 0 | $ (23) | |
Civil | Cybersecurity Business | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Receivables, net | $ 14 | ||
Other current assets | 5 | ||
Property, plant and equipment, net | 3 | ||
Intangible assets, net | 5 | ||
Goodwill | 57 | ||
Deferred tax assets | 6 | ||
Total assets divested | 90 | ||
Accounts payable and accrued liabilities | (13) | ||
Accrued payroll and employee benefits | (5) | ||
Other long-term liabilities | (3) | ||
Total liabilities divested | $ (21) |
Goodwill (Detail)
Goodwill (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Mar. 29, 2019 | Jun. 28, 2019 | Jun. 29, 2018 | Dec. 28, 2018 | Dec. 29, 2017 | |
Goodwill [Roll Forward] | |||||
Beginning balance, Goodwill | $ 4,860,000,000 | $ 4,860,000,000 | $ 4,974,000,000 | $ 4,974,000,000 | |
Foreign currency translation adjustments | (2,000,000) | (51,000,000) | |||
Transfers to assets held for sale | (57,000,000) | ||||
Goodwill re-allocation | 0 | ||||
Adjustment to goodwill | 3,000,000 | 3,000,000 | (6,000,000) | ||
Ending balance, Goodwill | 4,861,000,000 | 4,860,000,000 | |||
Goodwill impairments | 0 | 0 | |||
Defense Solutions | |||||
Goodwill [Roll Forward] | |||||
Beginning balance, Goodwill | 2,015,000,000 | 2,015,000,000 | 2,055,000,000 | 2,055,000,000 | |
Foreign currency translation adjustments | (2,000,000) | (40,000,000) | |||
Transfers to assets held for sale | 0 | ||||
Goodwill re-allocation | 25,000,000 | ||||
Adjustment to goodwill | 3,000,000 | 0 | |||
Ending balance, Goodwill | 2,041,000,000 | 2,015,000,000 | |||
Civil | |||||
Goodwill [Roll Forward] | |||||
Beginning balance, Goodwill | 1,924,000,000 | 1,924,000,000 | 1,998,000,000 | 1,998,000,000 | |
Foreign currency translation adjustments | 0 | (11,000,000) | |||
Transfers to assets held for sale | (57,000,000) | ||||
Goodwill re-allocation | (25,000,000) | ||||
Adjustment to goodwill | 0 | (6,000,000) | |||
Ending balance, Goodwill | 1,899,000,000 | 1,924,000,000 | |||
Accumulated goodwill impairment losses | 117,000,000 | 117,000,000 | $ 117,000,000 | ||
Health | |||||
Goodwill [Roll Forward] | |||||
Beginning balance, Goodwill | $ 921,000,000 | 921,000,000 | $ 921,000,000 | 921,000,000 | |
Foreign currency translation adjustments | 0 | 0 | |||
Transfers to assets held for sale | 0 | ||||
Goodwill re-allocation | 0 | ||||
Adjustment to goodwill | 0 | 0 | |||
Ending balance, Goodwill | 921,000,000 | 921,000,000 | |||
Accumulated goodwill impairment losses | $ 369,000,000 | $ 369,000,000 | $ 369,000,000 |
Intangible Assets (Schedule of
Intangible Assets (Schedule of intangible assets) (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Dec. 28, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying value | $ 1,105 | $ 1,100 |
Finite-lived intangible assets, accumulated amortization | (538) | (452) |
Finite-lived intangible assets, net carrying value | 567 | 648 |
Total intangible assets, gross carrying value | 1,109 | 1,104 |
Total intangible assets, net carrying value | 571 | 652 |
Trade names | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 4 | 4 |
Program and contract intangibles | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying value | 1,003 | 1,003 |
Finite-lived intangible assets, accumulated amortization | (455) | (374) |
Finite-lived intangible assets, net carrying value | 548 | 629 |
Software and technology | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying value | 98 | 93 |
Finite-lived intangible assets, accumulated amortization | (79) | (74) |
Finite-lived intangible assets, net carrying value | 19 | 19 |
Customer relationships | ||
Acquired Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross carrying value | 4 | 4 |
Finite-lived intangible assets, accumulated amortization | (4) | (4) |
Finite-lived intangible assets, net carrying value | $ 0 | $ 0 |
Intangible Assets (Narrative) (
Intangible Assets (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangible assets | $ 43 | $ 51 | $ 86 | $ 101 |
Intangible Assets (Schedule o_2
Intangible Assets (Schedule of estimated annual amortization expense) (Details) - USD ($) $ in Millions | Jun. 28, 2019 | Dec. 28, 2018 |
Estimated Annual Intangible Amortization Expense | ||
2019 (remainder of year) | $ 85 | |
2020 | 128 | |
2021 | 107 | |
2022 | 93 | |
2023 | 74 | |
2024 and thereafter | 80 | |
Finite-lived intangible assets, net carrying value | $ 567 | $ 648 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) $ in Millions | Dec. 31, 2018USD ($) | Jan. 31, 2019USD ($) | Dec. 28, 2018USD ($)building | Jun. 28, 2019USD ($) | Jun. 29, 2018USD ($) | Mar. 30, 2018USD ($) | Jun. 28, 2019USD ($) | Jun. 29, 2018USD ($) | Dec. 29, 2018USD ($) |
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, gross | $ 586 | $ 538 | $ 538 | ||||||
Less: accumulated depreciation and amortization | (349) | (322) | (322) | ||||||
Property, plant and equipment, net | 237 | 216 | 216 | $ 238 | |||||
Depreciation | 14 | $ 15 | 29 | $ 28 | |||||
Asset impairment charges | 0 | $ 0 | 0 | $ 7 | |||||
Gaithersburg, Maryland Property | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Proceeds from sale and leaseback agreement | $ 31 | ||||||||
Carrying value of sale and leaseback properties | $ 31 | ||||||||
San Diego Properties | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Proceeds from sale and leaseback agreement | $ 65 | ||||||||
Carrying value of sale and leaseback properties | $ 14 | 14 | |||||||
Number of real estate properties | building | 2 | ||||||||
Proceeds from real estate financing activities | $ 79 | ||||||||
Cash proceeds from sale and leaseback transaction | 14 | ||||||||
Debt | 79 | 79 | |||||||
Sale-leaseback transaction, tax impact | $ 17 | ||||||||
Corporate | Gaithersburg, Maryland Property | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Asset impairment charges | $ 7 | ||||||||
Computers and other equipment | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, gross | 233 | 249 | 249 | ||||||
Leasehold improvements | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, gross | 206 | 188 | 188 | ||||||
Office furniture and fixtures | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, gross | 36 | 35 | 35 | ||||||
Buildings and improvements | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, gross | 56 | 23 | 23 | ||||||
Land | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, gross | 40 | 4 | 4 | ||||||
Construction in progress | |||||||||
Property, Plant and Equipment [Line Items] | |||||||||
Property, plant and equipment, gross | $ 15 | $ 39 | $ 39 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Jun. 28, 2019 | Dec. 28, 2018 | Sep. 28, 2018 |
Interest Rate Swap | Designated as Hedging Instrument | $450 million notes, due December 2020 | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Hedged instrument, face amount | $ 450,000,000 | ||
Stated interest rate (in percentage) | 4.45% | ||
Interest Rate Swap | Designated as Hedging Instrument | $450 million notes, due December 2020 | Senior Notes | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Stated interest rate (in percentage) | 4.45% | ||
Interest Rate Swap, Maturity Date August 2025 | Designated as Hedging Instrument | Secured Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Stated interest rate (in percentage) | 3.00% | ||
Interest Rate Swap, Maturity Date August 2025 | Designated as Hedging Instrument | Variable Rate Loan | Secured Debt | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Hedged instrument, face amount | $ 1,500,000,000 | ||
Carrying value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative asset | $ 4,000,000 | $ 0 | |
Derivative liability | 77,000,000 | 35,000,000 | |
Fair value of notes receivable | 25,000,000 | 24,000,000 | |
Fair value of debt instrument | 3,000,000,000 | 3,100,000,000 | |
Fair value | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Derivative asset | 4,000,000 | 0 | |
Derivative liability | 77,000,000 | 35,000,000 | |
Fair value of debt instrument | $ 3,100,000,000 | $ 3,100,000,000 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Sep. 28, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Dec. 28, 2018 | Feb. 28, 2018 | |
Derivative [Line Items] | |||||||
Carrying amount of hedged item | $ 453,000,000 | $ 453,000,000 | $ 447,000,000 | ||||
Cumulative amount of fair value adjustment included within the hedged item | 4,000,000 | 4,000,000 | (3,000,000) | ||||
Total interest expense, net presented in the condensed consolidated statements of income in which the effects of cash flow hedges are recorded | 33,000,000 | $ 35,000,000 | 71,000,000 | $ 69,000,000 | |||
Amount recognized in other comprehensive loss | (31,000,000) | 7,000,000 | (49,000,000) | 21,000,000 | |||
Gains expected to be reclassified in the next 12 months | 5,000,000 | 5,000,000 | |||||
Asset Derivatives | Designated as Hedging Instrument | |||||||
Derivative [Line Items] | |||||||
Liability derivatives | 77,000,000 | 77,000,000 | 35,000,000 | ||||
Asset Derivatives | Designated as Hedging Instrument | $450 million notes, due December 2020 | |||||||
Derivative [Line Items] | |||||||
Hedged instrument, face amount | $ 450,000,000 | $ 450,000,000 | |||||
Stated interest rate (in percentage) | 4.45% | 4.45% | |||||
Asset Derivatives | long term debt | Designated as Hedging Instrument | $450 million notes, due December 2020 | |||||||
Derivative [Line Items] | |||||||
Hedged instrument, face amount | $ 450,000,000 | $ 450,000,000 | |||||
Stated interest rate (in percentage) | 4.45% | 4.45% | |||||
Fair Value Hedging | Asset Derivatives | Other assets | Designated as Hedging Instrument | |||||||
Derivative [Line Items] | |||||||
Asset derivatives | $ 4,000,000 | $ 4,000,000 | 0 | ||||
Fair Value Hedging | Asset Derivatives | Other long-term liabilities | Designated as Hedging Instrument | |||||||
Derivative [Line Items] | |||||||
Liability derivatives | 0 | 0 | 3,000,000 | ||||
Cash Flow Hedging | Asset Derivatives | |||||||
Derivative [Line Items] | |||||||
Net derivative gain | $ 60,000,000 | ||||||
Cash Flow Hedging | Asset Derivatives | Other long-term liabilities | Designated as Hedging Instrument | |||||||
Derivative [Line Items] | |||||||
Liability derivatives | 77,000,000 | 77,000,000 | $ 32,000,000 | ||||
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 (in percentage) | 1.66% | ||||||
Secured Debt | Interest Rate Swap, Maturity Date August 2022 | Designated as Hedging Instrument | Variable Rate Loan | |||||||
Derivative [Line Items] | |||||||
Hedged instrument, face amount | $ 250,000,000 | ||||||
Stated interest rate (in percentage) | 2.59% | ||||||
Secured Debt | Interest Rate Swap, Maturity Date December 2021 | Designated as Hedging Instrument | |||||||
Derivative [Line Items] | |||||||
Hedged instrument, face amount | $ 1,100,000,000 | ||||||
Stated interest rate (in percentage) | 1.08% | ||||||
Secured Debt | Interest Rate Swap, Maturity Date August 2025 | Designated as Hedging Instrument | |||||||
Derivative [Line Items] | |||||||
Stated interest rate (in percentage) | 3.00% | ||||||
Secured Debt | Interest Rate Swap, Maturity Date August 2025 | Designated as Hedging Instrument | Variable Rate Loan | |||||||
Derivative [Line Items] | |||||||
Hedged instrument, face amount | $ 1,500,000,000 | ||||||
Interest Expense | |||||||
Derivative [Line Items] | |||||||
Amount reclassified from accumulated other comprehensive loss to interest expense, net | $ (2,000,000) | $ (2,000,000) | $ (4,000,000) | $ (3,000,000) |
Debt (Summary of debt) (Detail)
Debt (Summary of debt) (Detail) - USD ($) | Jun. 28, 2019 | Dec. 29, 2018 | Dec. 28, 2018 |
Debt Instrument [Line Items] | |||
Total long-term debt | $ 3,019,000,000 | $ 3,124,000,000 | |
Less: current portion | 65,000,000 | 72,000,000 | |
Total long-term debt, net of current portion | 2,954,000,000 | $ 2,980,000,000 | 3,052,000,000 |
Long-term debt | 3,032,000,000 | 3,073,000,000 | |
Unamortized debt discounts and deferred debt issuances costs | 40,000,000 | 43,000,000 | |
Notes payable and finance leases due on various dates through fiscal 2022 | |||
Debt Instrument [Line Items] | |||
Notes payable and finance leases | $ 23,000,000 | 97,000,000 | |
Minimum | Notes payable and finance leases due on various dates through fiscal 2022 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 2.85% | ||
Maximum | Notes payable and finance leases due on various dates through fiscal 2022 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 5.49% | ||
Secured Debt | $450 million notes, due December 2020 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 4.45% | ||
Effective interest rate | 4.53% | ||
Senior secured notes | $ 453,000,000 | 447,000,000 | |
Senior unsecured notes, face amount | $ 450,000,000 | ||
Secured Debt | $300 million notes, due December 2040 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 5.95% | ||
Effective interest rate | 6.03% | ||
Senior secured notes | $ 216,000,000 | 216,000,000 | |
Senior unsecured notes, face amount | $ 300,000,000 | ||
Secured Debt | $690 million Term Loan A, due August 2023 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 4.00% | ||
Effective interest rate | 4.44% | ||
Senior secured term loans | $ 595,000,000 | 617,000,000 | |
Senior unsecured notes, face amount | $ 690,000,000 | ||
Secured Debt | $310 million Term Loan A, due August 2023 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 4.00% | ||
Effective interest rate | 4.45% | ||
Senior secured term loans | $ 249,000,000 | 258,000,000 | |
Senior unsecured notes, face amount | $ 310,000,000 | ||
Secured Debt | $1,131 million Term Loan B, due August 2025 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 4.25% | ||
Effective interest rate | 4.60% | ||
Senior secured term loans | $ 1,078,000,000 | 1,085,000,000 | |
Senior unsecured notes, face amount | $ 1,131,000,000 | ||
Unsecured Debt | $250 million notes, due July 2032 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 7.13% | ||
Effective interest rate | 7.43% | ||
Senior unsecured notes | $ 247,000,000 | 246,000,000 | |
Senior unsecured notes, face amount | $ 250,000,000 | ||
Unsecured Debt | $300 million notes, due July 2033 | |||
Debt Instrument [Line Items] | |||
Stated interest rate (in percentage) | 5.50% | ||
Effective interest rate | 5.88% | ||
Senior unsecured notes | $ 158,000,000 | 158,000,000 | |
Senior unsecured notes, face amount | 300,000,000 | ||
Asset Derivatives | Designated as Hedging Instrument | Fair Value Hedging | |||
Debt Instrument [Line Items] | |||
Derivative asset | $ 4,000,000 | ||
Derivative liability | $ 3,000,000 |
Debt (Narrative) (Detail)
Debt (Narrative) (Detail) - USD ($) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Apr. 30, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | Dec. 28, 2018 | |
Debt Instrument [Line Items] | ||||||
Payments of long-term debt | $ 17,000,000 | $ 27,000,000 | $ 48,000,000 | $ 44,000,000 | ||
Amortization of debt discount and deferred debt issuance costs | 2,000,000 | 3,000,000 | 5,000,000 | 6,000,000 | ||
Secured Debt | ||||||
Debt Instrument [Line Items] | ||||||
Repayment of debt, quarterly | 14,000,000 | $ 16,000,000 | $ 41,000,000 | $ 31,000,000 | ||
Repayments of debt | $ 10,000,000 | |||||
London Interbank Offered Rate (LIBOR) | Secured Debt | Term Loan A | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate (in percentage) | 1.50% | |||||
London Interbank Offered Rate (LIBOR) | Secured Debt | Term Loan B | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate (in percentage) | 1.75% | |||||
Revolving Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Unsecured borrowing capacity | 750,000,000 | $ 750,000,000 | ||||
Outstanding credit facility | $ 0 | $ 0 | $ 0 | |||
Minimum | London Interbank Offered Rate (LIBOR) | Secured Debt | Term Loan A | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate (in percentage) | 1.25% | |||||
Maximum | London Interbank Offered Rate (LIBOR) | Secured Debt | Term Loan A | ||||||
Debt Instrument [Line Items] | ||||||
Variable rate (in percentage) | 2.00% |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Schedule of accumulated other comprehensive loss) (Detail) - USD ($) $ in Millions | 6 Months Ended | 12 Months Ended | |
Jun. 28, 2019 | Dec. 28, 2018 | Dec. 29, 2017 | |
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | $ 3,308 | ||
Cumulative adjustments related to ASU adoptions | $ 48 | $ 1 | |
Beginning Balance, adjusted | 3,359 | 3,384 | |
Other comprehensive loss | (52) | (73) | |
Taxes | 13 | 7 | |
Reclassification from accumulated other comprehensive loss | (4) | (6) | |
Ending balance | 3,359 | 3,308 | |
Foreign currency translation adjustments | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | (41) | 17 | |
Cumulative adjustments related to ASU adoptions | 3 | ||
Beginning Balance, adjusted | 20 | ||
Other comprehensive loss | (3) | (65) | |
Taxes | 1 | 4 | |
Reclassification from accumulated other comprehensive loss | 0 | 0 | |
Ending balance | (43) | (41) | |
Unrecognized gain (loss) on derivative instruments | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | 14 | 14 | |
Cumulative adjustments related to ASU adoptions | 10 | ||
Beginning Balance, adjusted | 24 | ||
Other comprehensive loss | (49) | (7) | |
Taxes | 12 | 3 | |
Reclassification from accumulated other comprehensive loss | (4) | (6) | |
Ending balance | (27) | 14 | |
Pension adjustments | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | (3) | 2 | |
Cumulative adjustments related to ASU adoptions | (4) | ||
Beginning Balance, adjusted | (2) | ||
Other comprehensive loss | 0 | (1) | |
Taxes | 0 | 0 | |
Reclassification from accumulated other comprehensive loss | 0 | 0 | |
Ending balance | (3) | (3) | |
Total accumulated other comprehensive income (loss) | |||
AOCI, Net of Tax [Roll Forward] | |||
Beginning balance | (30) | 33 | |
Cumulative adjustments related to ASU adoptions | 0 | 9 | |
Beginning Balance, adjusted | (30) | $ 42 | |
Ending balance | $ (73) | $ (30) |
Earnings Per Share (EPS) (Recon
Earnings Per Share (EPS) (Reconciliation of weighted average number of shares outstanding) (Detail) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Earnings Per Share [Abstract] | ||||
Basic weighted average number of shares outstanding (shares) | 144 | 152 | 144 | 152 |
Dilutive common share equivalents-stock options and other stock awards (shares) | 2 | 2 | 2 | 2 |
Diluted weighted average number of shares outstanding (shares) | 146 | 154 | 146 | 154 |
Earnings Per Share (EPS) (Narra
Earnings Per Share (EPS) (Narrative) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | Apr. 29, 2019 | Feb. 21, 2019 | Apr. 29, 2019 | Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 |
Accelerated Share Repurchases [Line Items] | |||||||
Number of outstanding stock options and vesting stock awards that were anti-dilutive (in shares) | 1 | 1 | 1 | 1 | |||
Payments for repurchase of common stock | $ 90 | $ 100 | |||||
ASR agreement | |||||||
Accelerated Share Repurchases [Line Items] | |||||||
Payments for repurchase of common stock | $ 200 | ||||||
Stock repurchased during period, initial delivery (shares) | 0.6 | 2.6 | |||||
Stock repurchased during period, weighted average price (dollars per share) | $ 63.52 |
Supplementary Cash Flow Infor_3
Supplementary Cash Flow Information and Restricted Cash (Detail) - USD ($) $ in Millions | 6 Months Ended | |||
Jun. 28, 2019 | Jun. 29, 2018 | Dec. 28, 2018 | Dec. 29, 2017 | |
Supplementary cash flow information: | ||||
Cash paid for interest | $ 84 | $ 68 | ||
Cash paid for income taxes, net of refunds | 89 | 55 | ||
Non-cash financing activity: | ||||
Purchase of a non-controlling interest | 1 | 7 | ||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | ||||
Cash and cash equivalents | 327 | |||
Restricted cash | 43 | $ 42 | ||
Total cash, cash equivalents and restricted cash | $ 703 | $ 323 | $ 369 | $ 422 |
Income Taxes (Detail)
Income Taxes (Detail) | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 22.90% | 12.10% | 23.10% | 14.80% |
Business Segments (Schedule of
Business Segments (Schedule of segment reporting information by segment) (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 28, 2019 | Jun. 29, 2018 | Jun. 28, 2019 | Jun. 29, 2018 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 2,728 | $ 2,529 | $ 5,305 | $ 4,972 |
Operating income (loss) | 210 | 199 | 402 | 358 |
Defense Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,346 | 1,262 | 2,613 | 2,451 |
Civil | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 881 | 816 | 1,728 | 1,645 |
Health | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 501 | 451 | 964 | 876 |
Operating Segments | Defense Solutions | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 1,346 | 1,262 | 2,613 | 2,451 |
Operating income (loss) | 101 | 94 | 190 | 184 |
Operating Segments | Civil | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 881 | 816 | 1,728 | 1,645 |
Operating income (loss) | 68 | 60 | 141 | 129 |
Operating Segments | Health | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 501 | 451 | 964 | 876 |
Operating income (loss) | 61 | 68 | 106 | 110 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Operating income (loss) | $ (20) | $ (23) | $ (35) | $ (65) |
Contingencies (Detail)
Contingencies (Detail) € in Millions | Aug. 30, 2018USD ($) | Apr. 10, 2018USD ($) | Sep. 29, 2017USD ($) | Apr. 30, 2012LegalMatter | Jun. 28, 2019USD ($) | Nov. 10, 2015USD ($) | Dec. 31, 2013EUR (€) |
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 | € | € 39 | ||||||
MSA Venture | |||||||
Legal Proceedings [Line Items] | |||||||
Estimate of possible loss | $ 64,000,000 | $ 64,000,000 | |||||
Estimate of possible loss, amount deferred | 32,000,000 | ||||||
Contingency accrual | 39,000,000 | ||||||
Lockheed Martin | |||||||
Legal Proceedings [Line Items] | |||||||
Estimate of possible loss | $ 56,000,000 | ||||||
Lockheed Martin | MSA Venture | |||||||
Legal Proceedings [Line Items] | |||||||
Percentage of damages covered, between $38 million and $64 million (percentage) | 100.00% | ||||||
Percentage of damages covered, excess of $64 million settlement amount (percentage) | 50.00% | ||||||
Leidos | |||||||
Legal Proceedings [Line Items] | |||||||
Litigation settlement, percentage of total (percentage) | 25.00% | ||||||
Leidos | MSA Venture | |||||||
Legal Proceedings [Line Items] | |||||||
Estimate of possible loss | $ 38,000,000 | ||||||
Virnet X Inc | |||||||
Legal Proceedings [Line Items] | |||||||
Amount awarded to other party, pre interest | $ 343,000,000 | ||||||
Awarded to the other party, interest and legal fees | $ 93,000,000 | 96,000,000 | |||||
Amount awarded to other party | 595,000,000 | $ 502,000,000 | $ 439,000,000 | ||||
Royalty rate awarded, per device | $ 1.20 |
Commitments (Detail)
Commitments (Detail) $ in Millions | 6 Months Ended | |
Jun. 28, 2019USD ($) | Dec. 28, 2018building | |
Standby Letters of Credit | ||
Other Commitments And Contingencies [Line Items] | ||
Amount outstanding | $ 63 | |
Performance Guarantee | ||
Other Commitments And Contingencies [Line Items] | ||
Surety bonds notional amount | $ 52 | |
Standby Letters of Credit and Surety Bonds | ||
Other Commitments And Contingencies [Line Items] | ||
Debt instrument term | 2 years | |
San Diego Properties | ||
Other Commitments And Contingencies [Line Items] | ||
Number of real estate properties | building | 2 |
Subsequent Events (Details)
Subsequent Events (Details) - $ / shares | Jul. 29, 2019 | Jun. 28, 2019 | Mar. 29, 2019 | Jun. 29, 2018 | Mar. 30, 2018 |
Subsequent Event [Line Items] | |||||
Dividends (in dollars per share) | $ 0.32 | $ 0.32 | $ 0.32 | $ 0.32 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Dividends (in dollars per share) | $ 0.34 |