LEIDOS HOLDINGS, INC.

UNAUDITED NON-GAAP FINANCIAL MEASURES [CONTINUED]

(in millions, except per share amounts)

Quarter Ended July 1, 2016

As reported

Acquisition and integration costs

Amortization of intangibles

Restructuring expenses

Loss (gain) on sale of assets and businesses

Non-GAAP results

Operating income

$

75

$

15

$

2

$

1

$

—

$

93

Non-operating expense, net

(15)

—

—

—

(3)

(18)

Income from continuing operations, before income taxes

60

15

2

1

(3)

75

Income tax expense¹

(19)

(6)

(1)

—

1

(25)

Net income

$

41

$

9

$

1

$

1

$

(2)

$

50

Diluted EPS attributable to Leidos common stockholders

$

0.55

$

0.13

$

0.01

$

0.01

$

(0.02)

$

0.68

Diluted shares

74

74

74

74

74

74

⁽¹⁾ Calculation uses an estimated statutory tax rate on non-GAAP tax deductible adjustments.