LEIDOS HOLDINGS, INC.

UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

Three Months Ended

Twelve Months Ended

December 29,
 2017

December 30,
 2016

December 29,
 2017

December 30,
 2016

Cash flows from operations:

Net income

$

113

$

60

$

364

$

246

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

Depreciation and amortization

82

68

336

122

Amortization of equity method investments

3

—

14

—

Stock-based compensation

11

10

43

35

Asset impairment charges

—

4

—

4

Promissory note impairment

33

—

33

—

Bad debt expense

(1)

2

10

3

Non-cash interest expense

3

3

12

4

Other

6

(3)

9

(7)

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

Receivables

(36)

(17)

(191)

123

Inventory, prepaid expenses and other current
  assets

(30)

(18)

(76)

(98)

Accounts payable and accrued liabilities

147

(61)

152

(25)

Accrued payroll and employee benefits

52

28

8

26

Deferred income taxes and income taxes
receivable/payable

(101)

55

(151)

36

Other long-term assets/ liabilities

(118)

(10)

(37)

(20)

Net cash provided by operating activities of continuing
  operations

164

121

526

449

Cash flows from investing activities:

Payments for property, plant and equipment

(39)

(9)

(81)

(29)

Acquisitions of businesses

—

—

—

25

Net proceeds from sale of assets

1

—

8

3

Proceeds from disposition of business

—

—

—

23

Other

—

1

2

4

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

(38)

(8)

(71)

26

Cash flows from financing activities:

Payments of long-term debt

(15)

(175)

(209)

(277)

Proceeds from debt issuance

—

—

—

690

Payments for debt issuance and modification costs

—

—

(4)

(30)

Proceeds from issuances of stock

3

—

13

25

Repurchases of stock and other

(5)

(4)

(31)

(24)

Special cash dividend payment

—

—

—

(993)

Dividend payments

(48)

(48)

(198)

(142)

Net cash used in financing activities of continuing
  operations

(65)

(227)

(429)

(751)

Net increase (decrease) in cash, cash equivalents and
  restricted cash from continuing operations

61

(114)

26

(276)

Cash flows from discontinued operations:

Net cash used in investing activities of discontinued
  operations

—

—

—

(1)

Net decrease in cash, cash equivalents and restricted
  cash from discontinued operations

—

—

—

(1)

Net increase (decrease) in cash, cash equivalents and
  restricted cash

61

(114)

26

(277)

Cash, cash equivalents and restricted cash at beginning
  of year

361

510

396

673

Cash, cash equivalents and restricted cash at end of
  year

$

422

$

396

$

422

$

396