LEIDOS HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(in millions, except per share amounts)

Three Months Ended   

Nine Months Ended  

September 30,
 2016

October 2,
 2015

September 30,
 2016  

October 2,
 2015  

Revenues

$

1,868

$

1,302

$

4,468

$

3,805

Cost of revenues

1,630

1,138

3,925

3,344

Selling, general and administrative expenses

87

53

203

180

Bad debt expense

1

13

1

10

Acquisition and integration costs

44

—

68

—

Asset impairment charges

—

4

—

73

Restructuring expenses

5

—

6

2

Operating income

101

94

265

196

Interest income

3

1

8

2

Interest expense

(28)

(15)

(57)

(44)

Other (expense) income, net

(1)

—

(3)

1

Income from continuing operations before income taxes

75

80

213

155

Income tax benefit (expense)

17

(31)

(27)

(46)

Income from continuing operations

92

49

186

109

Discontinued operations:

Income tax benefit

—

—

—

18

Income from discontinued operations, net of taxes

—

—

—

18

Net income

92

49

186

127

Less: net income attributable to non-controlling interest,
  net of taxes

1

—

1

—

Net income attributable to Leidos Holdings, Inc.

$

91

$

49

$

185

$

127

Earnings per share:

Basic:

Income from continuing operations attributable to
  Leidos Holdings, Inc. common stockholders

$

0.81

$

0.68

$

2.18

$

1.49

Discontinued operations - net of tax

—

—

—

0.25

Net income attributable to Leidos Holdings, Inc.
  common stockholders

$

0.81

$

0.68

$

2.18

$

1.74

Diluted:

Income from continuing operations attributable to Leidos Holdings, Inc.
  common stockholders

$

0.80

$

0.67

$

2.13

$

1.47

Discontinued operations - net of tax

—

—

—

0.25

Net income attributable to Leidos Holdings, Inc.
  common stockholders

$

0.80

$

0.67

$

2.13

$

1.72

Weighted average number of common shares outstanding:

 Basic

112

72

85

73

 Diluted

114

73

87

74

 Cash dividends declared per share

$

13.96

$

0.32

$

14.60

$

0.96