LEIDOS HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Three Months Ended

Twelve Months Ended

December 30,
2016

January 1,
2016

December 30,
2016

January 1,
2016

Cash flows from operations:

Net income

$

60

$

127

$

246

$

254

Income from discontinued operations

—

—

—

(18)

Adjustments to reconcile net income to net cash 
     provided by operations:

Depreciation and amortization

68

9

122

44

Stock-based compensation

10

8

35

31

Asset impairment charges

4

—

4

73

Gain on a real estate sale

—

(82)

—

(82)

Other

2

—

—

8

Change in assets and liabilities, net of effects of 
     acquisitions and dispositions:

Receivables

(17)

(70)

123

75

Inventory, prepaid expenses and other current 
     assets

23

8

(101)

(14)

Accounts payable and accrued liabilities

(61)

30

(25)

101

Accrued payroll and employee benefits

28

—

26

(26)

Deferred income taxes and income taxes
receivable/payable

55

32

36

12

Other long-term assets/ liabilities

(10)

(30)

(20)

(48)

Total cash flows provided by operating activities of 
     continuing operations

162

32

446

410

Cash flows from investing activities:

Payments for property, plant and equipment

(9)

(12)

(29)

(27)

Acquisitions of businesses

—

(2)

25

(2)

Payments on accrued purchase price related to prior 
     acquisition

—

—

—

(13)

Net proceeds from sale of assets

—

70

3

79

Proceeds from disposition of business

—

—

23

27

Proceeds from collections on promissory note

—

—

4

—

Other

1

—

—

—

Total cash flows (used in) provided by investing activities 
     of continuing operations

(8)

56

26

64

Cash flows from financing activities:

Payments of long-term debt

(175)

(13)

(277)

(62)

Proceeds from debt issuance

—

—

690

—

Payments for debt issuance costs

—

—

(30)

—

Payments on real estate financing transaction

—

(8)

—

(8)

Proceeds from issuances of stock

—

2

25

6

Repurchases of stock and other

(4)

(4)

(24)

(120)

Special cash dividend payment

—

—

(993)

—

Dividend payments

(48)

(46)

(142)

(117)

Other

—

2

—

5

Total cash flows used in financing activities of continuing 
     operations

(227)

(67)

(751)

(296)

(Decrease) increase in cash and cash equivalents from 
     continuing operations

(73)

21

(279)

178

Cash flows from discontinued operations:

Cash provided by operating activities of discontinued 
     operations

—

—

—

13

Cash (used in) provided by investing activities of 
     discontinued operations

—

—

(1)

6

(Decrease) increase in cash and cash equivalents from 
     discontinued operations

—

—

(1)

19

Total (decrease) increase in cash and cash equivalents

(73)

21

(280)

197

Cash and cash equivalents at beginning of year

449

635

656

459

Cash and cash equivalents at end of year

$

376

$

656

$

376

$

656