Nine Months Ended September 30, 2016

As reported

Acquisition and integration costs

Amortization of intangibles

Restructuring expenses

Gains (losses) on sale of assets

Non-GAAP results

Income from continuing operations,
 before income taxes

$

213

$

(68)

$

(30)

$

(6)

$

5

$

312

Depreciation expense

24

—

—

—

—

24

Amortization expense

30

—

30

—

—

—

Interest expense, net

49

—

—

—

—

49

EBITDA

$

316

$

(68)

$

—

$

(6)

$

5

$

385

LEIDOS HOLDINGS, INC.

UNAUDITED NON-GAAP FINANCIAL MEASURES

(in millions, except per share amounts)

Nine Months Ended October 2, 2015

As reported

Asset impairment charges

Amortization of intangibles¹

Restructuring expenses

Non-GAAP results

Revenue

$

3,805

$

—

$

—

$

—

$

3,805

Cost of revenues

3,344

—

—

—

3,344

Selling, general and administrative
 expenses ²

192

—

7

3

182

Asset impairment charges

73

73

—

—

—

Operating income

196

(73)

(7)

(3)

279

Non-operating expense, net

(41)

—

—

—

(41)

Income from continuing operations,
 before income taxes

155

(73)

(7)

(3)

238

Income tax (expense) benefit ³

(46)

28

3

1

(78)

Income from continuing operations

109

(45)

(4)

(2)

160

Income from discontinued operations,
 net of taxes

18

—

—

—

18

Net income

$

127

$

(45)

$

(4)

$

(2)

$

178

Diluted EPS from continuing operations ⁴

$

1.47

$

(0.61)

$

(0.05)

$

(0.03)

$

2.16

Diluted shares

74

74

74

74

74

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

⁽²⁾ Selling, general and administrative expenses includes bad debt expense of $10 million and restructuring expense of $3 million.

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

⁽⁴⁾ Earnings per share is computed independently for each of the non-GAAP adjustment presented and therefore may not sum to the total
     non-GAAP earnings per share due to rounding.