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Document and Entity Information - USD ($)	12 Months Ended
Document and Entity Information - USD ($)	Dec. 28, 2018	Feb. 11, 2019	Jun. 29, 2018
Document Documentand Entity Information [Abstract]
Document Type	10-K
Amendment Flag	false
Document Period End Date	Dec. 28, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Trading Symbol	LDOS
Entity Registrant Name	Leidos Holdings, Inc.
Entity Central Index Key	0001336920
Current Fiscal Year End Date	--12-28
Entity Well-known Seasoned Issuer	Yes
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Large Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		146,160,889
Entity Public Float			$ 8,841,791,254

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 28, 2018	Dec. 29, 2017
ASSETS
Cash and cash equivalents	$ 327	$ 390
Receivables, net	1,877	1,831
Other current assets	543	453
Assets held for sale	92	0
Total current assets	2,839	2,674
Property, plant and equipment, net	237	232
Intangible assets, net	652	856
Goodwill	4,860	4,974
Other assets	182	254
Total assets	8,770	8,990
LIABILITIES AND EQUITY
Accounts payable and accrued liabilities	1,476	1,639
Accrued payroll and employee benefits	473	487
Dividends payable	12	17
Income taxes payable	3	4
Long-term debt, current portion	72	55
Liabilities held for sale	23	0
Total current liabilities	2,059	2,202
Long-term debt, net of current portion	3,052	3,056
Deferred tax liabilities	170	220
Other long-term liabilities	178	129
Commitments and contingencies (Notes 22, 25 and 26)
Stockholder's equity:
Preferred stock, $.0001 par value,10 million shares authorized and no shares issued and outstanding at December 28, 2018, and December 29, 2017	0	0
Common stock, $.0001 par value, 500 million shares authorized, 146 million and 151 million shares issued and outstanding at December 28, 2018, and December 29, 2017, respectively	0	0
Additional paid-in capital	2,966	3,344
Accumulated earnings (deficit)	372	(7)
Accumulated other comprehensive (loss) income	(30)	33
Total stockholder's equity	3,308	3,370
Non-controlling interest	3	13
Total equity	3,311	3,383
Total liabilities and stockholders' equity	$ 8,770	$ 8,990

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 28, 2018	Dec. 29, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.0001	$ 0.0001
Preferred stock, shares authorized (shares)	10,000,000	10,000,000
Preferred stock, shares issued (shares)	0	0
Preferred stock, shares outstanding (shares)	0	0
Common stock, par value (usd per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (shares)	500,000,000	500,000,000
Common stock, shares issued (shares)	146,000,000	151,000,000
Common stock, shares outstanding (shares)	146,000,000	151,000,000

Consolidated Statements Of Income - USD ($) $ in Millions	12 Months Ended
Consolidated Statements Of Income - USD ($) $ in Millions	Dec. 28, 2018	Dec. 29, 2017	Dec. 30, 2016
Income Statement [Abstract]
Revenues	$ 10,194	$ 10,170	$ 7,043
Cost of revenues	8,690	8,738	6,103
Selling, general and administrative expenses	729	737	422
Bad debt expense	0	10	3
Acquisition, integration and restructuring costs	37	139	104
Asset impairment charges	7	0	4
Equity earnings of non-consolidated subsidiaries	(18)	(13)	(10)
Operating income	749	559	417
Non-operating expense:
Interest expense, net	(138)	(140)	(86)
Other expense, net	(1)	(26)	(13)
Income before income taxes	610	393	318
Income tax expense	(28)	(29)	(72)
Net income	582	364	246
Less: net income (loss) attributable to non-controlling interest	1	(2)	2
Net income attributable to Leidos common stockholders	$ 581	$ 366	$ 244
Earnings per share:
Basic (usd per share)	$ 3.85	$ 2.41	$ 2.39
Diluted (usd per share)	$ 3.80	$ 2.38	$ 2.35

Consolidated Statements Of Comprehensive Income - USD ($) $ in Millions	12 Months Ended
	Dec. 28, 2018	Dec. 29, 2017	Dec. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 582	$ 364	$ 246
Foreign currency translation adjustments	(61)	24	(7)
Unrecognized (loss) gain on derivative instruments	(10)	4	14
Pension adjustments	(1)	9	(3)
Total other comprehensive (loss) income, net of taxes	(72)	37	4
Comprehensive income	510	401	250
Less: comprehensive income (loss) attributable to non-controlling interest	1	(2)	2
Comprehensive income attributable to Leidos common stockholders	$ 509	$ 403	$ 248

- Definition

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

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+ Details

Consolidated Statements Of Equity - USD ($) shares in Millions, $ in Millions	Total	Leidos Holdings, Inc. stockholders' equity	Shares of common stock	Additional paid-in capital	Accumulated earnings (deficit)	Accumulated other comprehensive (loss) income	Non-controlling interest
Balance, shares at Jan. 01, 2016			72
Balance, value at Jan. 01, 2016	$ 1,068	$ 1,068		$ 1,353	$ (277)	$ (8)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	246	244			244		2
Other comprehensive income (loss), net of taxes	4	4				4
Issuances of stock (less forfeitures), shares			1
Issuances of stock (less forfeitures)	36	36		36
Repurchases of stock and other, shares			0
Repurchases of stock and other	(24)	(24)		(24)
Dividends	(144)	(144)			(144)
Special cash dividend of $13.64 per share	(1,022)	(1,022)		(1,022)
Stock-based compensation	35	35		35
Stock issued for the IS&GS Business acquisition, shares			77
Stock issued for the IS&GS Business acquisition	2,938	2,938		2,938
Equity interest acquired	10						10
Balance, shares at Dec. 30, 2016			150
Balance, value at Dec. 30, 2016	3,147	3,135		3,316	(177)	(4)	12
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	364	366			366		(2)
Other comprehensive income (loss), net of taxes	37	37				37
Issuances of stock (less forfeitures), shares			1
Issuances of stock (less forfeitures)	16	16		16
Repurchases of stock and other	(31)	(31)		(31)
Dividends	(196)	(196)			(196)
Stock-based compensation	43	43		43
Stock issued for the IS&GS Business acquisition	0
Equity interest acquired	3						3
Balance, shares at Dec. 29, 2017			151
Balance, value at Dec. 29, 2017	3,383	3,370		3,344	(7)	33	13
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income (loss)	582	581			581		1
Other comprehensive income (loss), net of taxes	(72)	(72)				(72)
Issuances of stock (less forfeitures), shares			1
Issuances of stock (less forfeitures)	17	17		17
Repurchases of stock and other, shares			(6)
Repurchases of stock and other	(438)	(438)		(438)
Dividends	(194)	(194)			(194)
Stock-based compensation	44	44		44
Stock issued for the IS&GS Business acquisition	0
Purchase of a non-controlling interest	(11)	(1)		(1)			(10)
Other	(1)						(1)
Balance, shares at Dec. 28, 2018			146
Balance, value at Dec. 28, 2018	$ 3,311	$ 3,308		$ 2,966	$ 372	$ (30)	$ 3

Consolidated Statements Of Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 28, 2018	Dec. 29, 2017	Dec. 30, 2016
Statement of Stockholders' Equity [Abstract]
Cash dividend per share (usd per share)	$ 1.28	$ 1.28	$ 1.28
Special cash dividend (usd per share)			$ 13.64

Consolidated Statements Of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 28, 2018	Dec. 29, 2017	Dec. 30, 2016
Cash flows from operations:
Net income	$ 582	$ 364	$ 246
Adjustments to reconcile net income to net cash provided by continuing operations:
Depreciation and amortization	257	336	122
Amortization of equity method investments	10	14	0
Stock-based compensation	44	43	35
Asset impairment charges	7	0	4
Non-cash interest expense	6	12	4
Promissory note impairment	0	33	0
Bad debt expense	0	10	3
Other	2	9	(7)
Change in assets and liabilities, net of effects of acquisitions and dispositions:
Receivables	(58)	(191)	123
Other current assets	(73)	(76)	(98)
Accounts payable and accrued liabilities	(46)	152	(25)
Accrued payroll and employee benefits	(12)	8	26
Deferred income taxes and income taxes receivable/payable	(39)	(151)	36
Other long-term assets/liabilities	88	(37)	(20)
Net cash provided by operating activities of continuing operations	768	526	449
Cash flows from investing activities:
Payments for property, plant and equipment	(73)	(81)	(29)
Collections on promissory note	40	2	4
Acquisitions of businesses	(81)	0	25
Net proceeds from sale of assets	0	8	3
Proceeds from disposition of business	0	0	23
Net cash (used in) provided by investing activities of continuing operations	(114)	(71)	26
Cash flows from financing activities:
Payments of long-term debt	(59)	(209)	(277)
Proceeds from debt issuance	0	0	690
Payments for debt issuance and modification costs	(8)	(4)	(30)
Proceeds from issuances of stock	14	13	25
Repurchases of stock and other	(438)	(31)	(24)
Special cash dividend payment	0	0	(993)
Dividend payments	(198)	(198)	(142)
Payment of tax indemnification liability	(23)	0	0
Proceeds from real estate financing transaction	14	0	0
Payments for non-controlling interest acquired	(8)	0	0
Other	(1)	0	0
Net cash used in financing activities of continuing operations	(707)	(429)	(751)
Net (decrease) increase in cash, cash equivalents and restricted cash from continuing operations	(53)	26	(276)
Cash flows from discontinued operations:
Net cash used in investing activities of discontinued operations	0	0	(1)
Net decrease in cash, cash equivalents and restricted cash from discontinued operations	0	0	(1)
Net (decrease) increase in cash, cash equivalents and restricted cash	(53)	26	(277)
Cash, cash equivalents and restricted cash at beginning of year	422	396	673
Cash, cash equivalents and restricted cash at end of year	$ 369	$ 422	$ 396

Nature of Operations and Basis of Presentation	12 Months Ended
Nature of Operations and Basis of Presentation	Dec. 28, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Nature of Operations and Basis of Presentation	Note 1—Nature of Operations and Basis of Presentation Nature of Operations and Basis of Presentation Leidos Holdings, Inc. ("Leidos"), a Delaware corporation, is a holding company whose direct 100%-owned subsidiary and principal operating company is Leidos, Inc. Leidos is a FORTUNE 500^® science, engineering and information technology company that provides services and solutions in the defense, intelligence, civil and health markets. Leidos' domestic customers include the U.S. Department of Defense ("DoD"), the U.S. Intelligence Community, the U.S. Department of Homeland Security ("DHS"), the Federal Aviation Administration, the Department of Veterans Affairs and many other U.S. government civilian agencies, as well as state and local government agencies. Leidos' international customers include foreign governments and their agencies, primarily located in Australia and the United Kingdom ("U.K."). Unless indicated otherwise, references to the "Company," "we," "us" and "our" refer collectively to Leidos Holdings, Inc. and its consolidated subsidiaries. On August 16, 2016, a wholly-owned subsidiary of Leidos Holdings, Inc. merged with the Information Systems & Global Solutions business (the "IS&GS Business") of Lockheed Martin Corporation in a Reverse Morris Trust transaction (see "Note 6—Acquisitions" for further information). The acquired IS&GS Business was renamed Leidos Innovations Corporation. On December 28, 2018, Leidos Innovations Corporation was merged into Leidos, Inc. As a result of the Lockheed Martin transaction, the Company received a controlling interest in Mission Support Alliance, LLC ("MSA"), a joint venture with Centerra Group, LLC and Jacobs Engineering Group, Inc. ("Jacobs Group"). On January 26, 2018, the Company entered into a Membership Interest Purchase Agreement with Jacobs Group, whereby the Company purchased 100% of Jacobs Group's 41% outstanding membership interest in MSA. As a result, Leidos increased its controlling ownership in MSA from 47% to 88%. The Company consolidates the financial results for MSA into its consolidated financial statements. The consolidated financial statements also include the balances of all voting interest entities in which Leidos has a controlling voting interest ("subsidiaries") and a variable interest entity ("VIE") in which Leidos is the primary beneficiary. The consolidated balances of the Company's VIE are not material to the Company's consolidated financial statements for the periods presented. Intercompany accounts and transactions between consolidated companies have been eliminated in consolidation. During fiscal 2017, the Company completed its business reorganization, which resulted in identification of three reportable segments (Defense Solutions, Civil and Health). Additionally, the Company separately presents the costs associated with corporate functions as Corporate. The Company commenced operating and reporting under the new organizational structure effective the beginning of fiscal 2017. As a result of this change, fiscal 2016 segment results and disclosures have been recast to reflect the new reportable segments (see "Note 24—Business Segments"). Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. The Company classifies indirect costs incurred within or allocated to its U.S. government customers as overhead (included in "Cost of revenues") or general administrative expenses in the same manner as such costs are defined in the Company's disclosure statements under U.S. government Cost Accounting Standards ("CAS"). Effective the beginning of fiscal 2018, the Company established a new CAS structure and revised its disclosure statements accordingly to reflect the related cost accounting practice changes. Consequently, $185 million and $88 million was reclassified from "Cost of revenues" to "Selling, general and administrative expenses" on the consolidated statements of income for fiscal 2017 and 2016, respectively. The Company aggregated "Acquisition and integration costs" and "Restructuring expenses" into "Acquisition, integration and restructuring costs", and "Interest income" and "Interest expense" into "Interest expense, net" on the consolidated statements of income. Additionally, the Company separately disclosed "Collections on promissory note", which was previously included in "Other" within investing cash flows on the consolidated statements of cash flows.

Accounting Standards

12 Months Ended

Dec. 28, 2018

Accounting Changes and Error Corrections [Abstract]

Accounting Standards

Note 2—Accounting Standards

Accounting Standards Updates Adopted

During fiscal 2018, the Company adopted the following Accounting Standards Updates ("ASU"):

ASU 2014-09, Revenue from Contracts with Customers (Topic 606)

In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update 2014-09 ("ASC 606") and related amendments, which superseded all prior revenue recognition methods and industry-specific guidance. The core principle of ASC 606 is an entity should recognize revenue to depict the transfer of control for promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the revenue principles, an entity is required to identify the contract(s) with a customer, identify the performance obligations, determine the transaction price, allocate the transaction price to the performance obligations and recognize revenue when the performance obligation is satisfied (i.e., either over time or point in time). ASC 606 further requires that companies disclose sufficient information to enable users of financial statements to understand the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers.

ASC 606 provided companies an option of two transition methods, the full retrospective method, in which case the standard would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of initial application. The ASU was effective for annual reporting periods beginning after December 15, 2017.

Effective December 30, 2017 (the beginning of fiscal 2018), the Company adopted the requirements of ASC 606 using the modified retrospective method. The guidance was not applied to contracts that were complete at December 30, 2017, and the comparative information for the prior fiscal years have not been retrospectively adjusted.

As a result of the adoption the Company recorded a $1 million decrease to its beginning accumulated deficit as the cumulative impact of adoption of the new revenue standard. The primary impact was on certain units-of-delivery contracts, as the Company previously recognized revenue at a point in time when the customer accepted delivery of the product or service. Under ASC 606, revenues on certain units-of-delivery contracts are now recognized using an over-time model. The adoption of ASC 606 did not have a significant impact on the Company's revenue recognition policy as revenues on substantially all of the Company's contracts continue to be recognized over time.

In adopting ASC 606, the Company elected to use certain practical expedients permitted by the standard including using the portfolio approach where contracts with similar characteristics were assessed collectively to evaluate risk over the impact of ASC 606. The Company also elected to adopt the right-to-invoice practical expedient on certain cost-reimbursable contracts where the Company recognizes revenues as it is contractually able to invoice the customer based on the control transferred to the customer.

ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedge Activities

In August 2017, the FASB issued ASU 2017-12, which simplifies the application of hedge accounting and improves the financial reporting of hedging relationships to better portray the economic results of an entity's risk management activities. The ASU is effective for public companies for annual reporting periods beginning after December 15, 2018, and should be applied on a modified retrospective basis. Early adoption is permitted.

The Company early adopted the provisions of ASU 2017-12 using the modified retrospective method during the first quarter of fiscal 2018, and recorded a $3 million increase to accumulated other comprehensive income and a corresponding increase to beginning accumulated deficit for the cumulative ineffectiveness gains related to the cash flow hedges.

ASU 2018-02, Income Statement–Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income

In February 2018, the FASB issued ASU 2018-02, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act ("Tax Act"). This ASU is effective for all entities for annual reporting periods beginning after December 15, 2018, and should be applied either in the period of adoption or retrospectively to each period in which the effect of the change in the U.S. federal corporate income tax rate due to the Tax Act is recognized. Early adoption is permitted.

The Company early adopted the provisions of ASU 2018-02 during the first quarter of fiscal 2018 (applied in the period of adoption), and recorded a $6 million increase to accumulated other comprehensive income and a corresponding increase to beginning accumulated deficit to reflect the changes in the U.S. federal corporate income tax rate as a result of the Tax Act. As a result of the adoption of ASU 2018-02, the Company's policy to release income tax effects in accumulated other comprehensive income is consistent with the underlying book method.

The cumulative effect of the changes made to the Company's consolidated balance sheet for the adoptions of the ASUs above was as follows:



	Balance at December 29, 2017			Adjustments due to ASU 2014-09			Adjustments due to ASU 2017-12			Adjustments due to ASU 2018-02			Balance at December 30, 2017
	(in millions)
Assets:
Receivables, net	$	1,831		$	4		$	—		$	—		$	1,835
Other current assets	453			(3		)	—			—			450
Equity:
Accumulated deficit	$	(7	)	$	1		$	(3	)	$	(6	)	$	(15	)
Accumulated other comprehensive income	33			—			3			6			42

Accounting Standards Updates Issued But Not Yet Adopted

ASU 2016-02, ASU 2018-10, ASU 2018-11 and ASU 2018-20, Leases (Topic 842)

In February 2016, the FASB issued ASU 2016-02, which supersedes the current lease guidance under Leases (Topic 840) and makes several changes, such as requiring an entity to recognize a right-of-use ("ROU") asset and corresponding lease obligation on the balance sheet, classified as financing or operating, as appropriate. The update is effective for public companies for annual and interim reporting periods beginning after December 15, 2018, and should be adopted under the modified retrospective approach.

In July 2018, the FASB issued ASU 2018-10 "Codification Improvements to Topic 842, Leases" to add clarity to certain areas within ASU 2016-02 and ASU 2018-11 "Targeted Improvements", to add an additional and optional transition method to adopt the new leases standard by allowing recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption. In December 2018, the FASB issued ASU 2018-20 "Narrow-Scope Improvements for Lessors" to add clarity to lessors accounting for sales taxes and other similar taxes collected from lessees, accounting for variable payments for contracts with lease and non-lease components, and accounting for certain lessor costs. The effective date and transition requirements of these updates will be the same as ASU 2016-02.

The Company plans to adopt the new lease accounting standards in fiscal 2019 using the optional transition method. The Company has made progress in reviewing lease and other service based contracts, implementing a new lease accounting and administration software solution, establishing new processes and internal controls. The Company has elected to adopt certain practical expedients provided under ASC 842, including the option to not apply lease recognition for short-term leases, reassessment of whether expired or existing contracts contain leases, reassessment of lease classification for expired or existing leases, applying a single discount rate to a portfolio of leased assets with similar durations, reassessing initial direct costs and combining lease and non-lease components in revenue arrangements.

The Company expects the adoption of the new standard will result in the recognition of at least $350 million and $400 million of ROU assets and lease liabilities, respectively, primarily due to its operating leases, to the Company's consolidated balance sheets, but will not have a material impact on the consolidated statements of income and consolidated statements of cash flows. The Company's accounting for capital leases will remain substantially unchanged. Additionally, the Company estimates a $65 million increase in retained earnings due to the cumulative effect of recognizing a gain related to the sale and leaseback of the San Diego properties (see "Note 22—Leases").

ASU 2016-13, Financial Instruments – Credit Losses (Topic 326)

In June 2016, the FASB issued ASU 2016-13, which eliminates the requirement that a credit loss on a financial instrument be "probable" prior to recognition. Instead, a valuation allowance will be recorded to reflect an entity's current estimate of all expected credit losses, based on both historical and forecasted information related to an instrument. The update is effective for public companies for annual and interim reporting periods beginning after December 15, 2019, and should be adopted using a modified retrospective approach, which applies a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. A prospective approach is required for debt securities for which an other-than-temporary impairment had been recognized before the effective date and loans and debt securities acquired with deteriorated credit quality. Early adoption is permitted. The Company is evaluating the provisions of ASU 2016-13 and its impact on the Company's consolidated financial position, results of operations and cash flows.

ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement (Subtopic 350-40)

In August 2018, the FASB issued ASU 2018-15, which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs associated with internal-use software. The update is effective for public companies for annual and interim reporting periods beginning after December 15, 2019, and may be adopted either retrospectively or prospectively. Early adoption is permitted. The Company is evaluating the provisions of ASU 2018-15 and its impact on the Company’s consolidated financial position, results of operations and cash flows.

Summary of Significant Accounting Policies

12 Months Ended

Dec. 28, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 3—Summary of Significant Accounting Policies

Reporting Periods

Leidos' fiscal year ends on the Friday nearest the end of December. Fiscal 2018, 2017 and 2016 each included 52 weeks.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America ("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Management evaluates these estimates and assumptions on an ongoing basis, including those relating to estimated profitability of long-term contracts, indirect billing rates, allowances for doubtful accounts, inventories, fair value and impairment of intangible assets and goodwill, income taxes, pension benefits, stock-based compensation expense and contingencies. These estimates have been prepared by management on the basis of the most current and best available information; however, actual results could differ materially from those estimates.

Operating Cycle

The Company's operating cycle for long-term contracts may be greater than one year and is measured by the average time intervening between the inception and the completion of those contracts.

Business Combinations, Investments and Variable Interest Entities

Business Combinations

The accounting for business combinations requires the Company to make judgments and estimates related to the fair value of assets acquired, including the identification and valuation of intangible assets, as well as liabilities and contingencies assumed. Such judgments and estimates directly impact the amount of goodwill recognized in connection with an acquisition.

Investments

Investments in entities and corporate joint ventures where the Company has a non-controlling ownership interest but over which the Company has the ability to exercise significant influence, are accounted for under the equity method of accounting whereby the Company recognizes its proportionate share of the entities' net income or loss and does not consolidate the entities' assets and liabilities.

Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost or cost net of other-than-temporary impairments.

Variable Interest Entities

The Company occasionally forms joint ventures and/or enters into arrangements with special purpose limited liability companies for the purpose of bidding and executing on specific projects. The Company analyzes each such arrangement to determine whether it represents a VIE. If the arrangement is determined to be a VIE, the Company assesses whether it is the primary beneficiary of the VIE and is consequently required to consolidate the VIE.

Divestitures

From time-to-time, the Company may dispose (or management may commit to plans to dispose) of strategic or non-strategic components of the business. Divestitures representing a strategic shift in operations are classified as discontinued operations for all periods presented. Non-strategic divestitures are not reclassified as discontinued operations and remain in continuing operations.

Restructuring Expenses

Restructuring expenses are incurred in connection with programs aimed at reducing the Company's costs and primarily include lease termination, vacancy costs and termination costs associated with headcount reduction.

The Company's restructuring actions include one-time involuntary termination benefits as well as certain contractual termination benefits or employee terminations under ongoing benefit arrangements. One-time involuntary termination benefits are recognized as a liability at estimated fair value when the plan of termination has been communicated to employees and certain other criteria are met. Ongoing termination benefit arrangements are recognized as a liability at estimated fair value when it is probable that amounts will be paid to employees and such amounts are reasonably estimable. When the Company ceases using a facility but does not intend to or is unable to terminate the operating lease, the Company records a liability for the present value of the remaining lease payments, net of estimated sublease income, if any, that could be reasonably obtained for the property (even if the Company does not intend to sublease the facility for the remaining term of the lease). Costs associated with exit or disposal activities, including the related one-time and ongoing involuntary termination benefits, are included as "Acquisition, integration and restructuring costs" on the consolidated statements of income. See "Note 8—Restructuring Expenses" for additional information about the Company's restructuring activities.

Revenue Recognition

The Company's revenues from contracts with customers are from offerings including enterprise modernization; cyber operations; operations and logistics; mission software systems; integrated systems; sensors and phenomenology; and mission support, primarily with the U.S. government and its agencies. The Company also serves various state and local governments, foreign governments and U.S. commercial customers.

The Company performs under various types of contracts, which include firm-fixed-price ("FFP"), time-and-materials ("T&M"), fixed-price-level-of-effort ("FP-LOE"), cost-plus-fixed-fee, cost-plus-award-fee, cost-plus-incentive-fee and fixed-price-incentive-fee ("FP-IF") contracts.

To determine the proper revenue recognition, the Company first evaluates whether it has a duly approved and enforceable contract with a customer, in which the rights of the parties and payment terms are identified, and collectability is probable. The Company also evaluates whether two or more contracts should be combined and accounted for as a single contract, including the task orders issued under an indefinite delivery/indefinite quantity ("IDIQ") award. In addition, the Company assesses contract modifications to determine whether changes to existing contracts should be accounted for as part of the original contract or as a separate contract. Contract modifications for the Company generally relate to changes in contract specifications and requirements and do not add distinct services, and therefore are accounted for as part of the original contract. If contract modifications add distinct goods or services and increase the contract value by an amount that reflects the standalone selling price, those modifications are accounted for as separate contracts.

Most of the Company's contracts are comprised of multiple promises including the design and build of software-based systems, integration of hardware and software solutions, running and maintaining of IT infrastructure and procurement services. In all cases, the Company assesses if the multiple promises should be accounted for as separate performance obligations or combined into a single performance obligation. The Company generally separates multiple promises in a contract as separate performance obligations if those promises are distinct, both individually and in the context of the contract. If multiple promises in a contract are highly interrelated or require significant integration or customization within a group, they are combined and accounted for as a single performance obligation.

The Company's contracts with the U.S. government often contain options to renew existing contracts for an additional period of time (generally a year at a time) under the same terms and conditions as the original contract, and generally do not provide the customer any material rights under the contract. The Company accounts for renewal options as separate contracts when they include distinct goods or services at standalone selling prices.

Contracts with the U.S. government are subject to the Federal Acquisition Regulation ("FAR") and priced on estimated or actual costs of providing the goods or services. The FAR provides guidance on types of costs that are allowable in establishing prices for goods and services provided to the U.S. government and its agencies. Each contract is competitively priced and bid separately. Pricing for non-U.S. government agencies and commercial customers is based on specific negotiations with each customer. In circumstances where the standalone selling price is not directly observable, we estimate the standalone selling price using the expected cost plus margin approach. The Company excludes any taxes collected or imposed when determining the transaction price.

Certain of the Company's cost-plus and fixed-price contracts contain award fees, incentive fees or other provisions that may either increase or decrease the transaction price. These variable amounts generally are awarded upon achievement of certain performance metrics, program milestones or cost targets and can be based upon customer discretion. The Company estimates variable consideration at the most probable amount that it expects to be entitled to, based on the assessment of the contractual variable fee criteria, complexity of work and related risks, extent of customer discretion, amount of variable consideration received historically and the potential of significant reversal of revenue.

The Company allocates the transaction price of a contract to its performance obligations in the proportion of its respective standalone selling prices. The standalone selling price of the Company's performance obligations is generally based on an expected cost-plus margin approach, in accordance with the FAR. For certain product sales, the Company uses prices from other standalone sales. Substantially all of the Company's contracts do not contain a significant financing component, which would require an adjustment to the transaction price of the contract.

The Company recognizes revenue on its service based contracts primarily over time as there is continuous transfer of control to the customer over the duration of the contract as the Company performs the promised services. For U.S. government contracts, continuous transfer of control to the customer is evidenced by clauses in the contract that allow the customer to unilaterally terminate the contract for convenience, pay for costs incurred plus a reasonable profit and take control of any work-in-process. Similarly, for non-U.S. government contracts, the customer typically controls the work-in-process as evidenced by rights to payment for work performed to date plus a reasonable profit to deliver products or services that do not have an alternate use to the Company. Anticipated losses on service based contracts are recognized when known. In certain product sales, where the products have an alternate use, the Company recognizes revenue at a point in time when the customer takes control of the asset usually denoted by possession and legal title.

On FFP contracts, revenue recognized over time generally uses a method that measures the extent of progress towards completion of a performance obligation, principally using a cost-input method (referred to as the cost-to-cost method). Under the cost-to-cost method, revenue is recognized based on the proportion of total costs incurred to estimated total costs-at-completion ("EAC"). A performance obligation's EAC includes all direct costs such as materials, labor, subcontract costs, overhead, and a ratable portion of general and administrative costs. In addition, the Company includes in an EAC of a performance obligation future losses estimated to be incurred on onerous contracts, as and when known. On certain other contracts, principally T&M, FP-LOE, and cost-plus, revenue is recognized using the right-to-invoice practical expedient as the Company is contractually able to invoice the customer based on the control transferred to the customer. Additionally, on maintenance (generally FFP) performance obligations, revenue is recognized over time using a straight-line method as the control of the services is provided to the customer evenly over the period of performance.

For certain performance obligations, the Company is not primarily responsible for fulfilling the promise to provide the goods or service to the customer, does not have inventory risk and does not have discretion in establishing the price for the goods or service. In such cases, the Company recognizes revenue on a net basis.

Contract Costs

Contract costs generally include direct costs such as materials, labor, subcontract costs and indirect costs identifiable with or allocable to a specific contract. Costs are expensed as incurred except for costs incurred to fulfill a contract, which are capitalized and amortized on a straight-line basis over the expected period of performance. The Company does not incur significant incremental costs to acquire contracts. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by the Defense Contract Audit Agency ("DCAA") (see "Note 25—Contingencies").

Pre-contract Costs

Costs incurred on projects as pre-contract costs are deferred as assets when the Company has been requested by the customer to begin work under a new arrangement prior to contract execution and it is probable that the Company will recover the costs through the issuance of a contract. When the formal contract has been executed, the costs are recorded to the contract and revenue is recognized.

Transition Costs

Under certain service contracts, costs are incurred, usually at the beginning of the contract performance, to transition the services, employees and equipment to or from the customer or prior contractor. These costs are generally capitalized as deferred assets and amortized over the contractual period of performance and unexercised option periods.

Project Assets

Purchases of project assets are capitalized for specific contracts where delivery has not yet occurred, ownership is maintained by the Company over the life of the contract or the benefit is received over a period of time. Project assets include enterprise software licenses, hardware, maintenance agreements, computers and significant material purchases and other costs incurred on contracts. Project assets are relieved from the balance sheet based on different methodologies, including transfer of assets and amortization based on the estimated useful life of the asset or using the straight-line method over the expected term of the performance obligation.

Changes in Estimates on Contracts

Changes in estimates related to contracts accounted for using the cost-to-cost method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes, with the exception of contracts acquired through the acquisition of the IS&GS Business (see "Note 6—Acquisitions"), where the adjustment is for the period commencing from the date of acquisition.

Changes in estimates on contracts for the periods presented were as follows:



	Year Ended
	December 28, 2018		December 29, 2017		December 30, 2016
	(in millions, except for per share amounts)
Net favorable impact to income before income taxes	$	105	$	103	$	37
Impact on diluted EPS attributable to Leidos common stockholders	$	0.52	$	0.41	$	0.22

The increase in the changes in estimates on contracts from fiscal 2016 to fiscal 2017 is primarily due to completion of contracts or events which mitigated risk and due to the finalization of award and incentive fees.

The impact on diluted EPS attributable to Leidos common stockholders is calculated using the Company's statutory tax rate.

During fiscal 2018, revenue recognized from performance obligations satisfied in previous periods was $102 million. The changes primarily relate to revisions of variable consideration, including award fees, and revisions to estimates at completion resulting from changes in contract scope, mitigation of contract risks or due to true-ups of contract estimates at the end of contract performance.

Selling, General and Administrative Expenses

The Company classifies indirect costs incurred within or allocated to its U.S. government customers as overhead (included in "Cost of revenues") or general and administrative expenses in the same manner as such costs are defined in the Company's disclosure statements under U.S. government CAS.

Selling, general and administrative expenses include general and administrative, bid and proposal and internal research and development ("IR&D") expenses.

The Company conducts research and development activities under customer-funded contracts and with company-funded IR&D funds. For fiscal 2018, 2017 and 2016, company-funded IR&D expense was $46 million, $42 million and $44 million, respectively. Expenses for research and development activities performed under customer contracts are charged directly to cost of revenues for those contracts.

Income Taxes

The Company accounts for income taxes under the asset and liability method in accordance with the accounting standard for income taxes. The asset and liability method requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted.

The Company records net deferred tax assets to the extent that it believes these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. If the Company were to determine that it would be able to realize its deferred income tax assets in the future in excess of their net recorded amount or would no longer be able to realize its deferred income tax assets in the future as currently recorded, the Company would make an adjustment to the valuation allowance which would decrease or increase the provision for income taxes.

The provision for federal, state, foreign and local income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes.

The Company recognizes liabilities for uncertain tax positions when it is more likely than not that a tax position will not be sustained upon examination and settlement with various taxing authorities. Liabilities for uncertain tax positions are measured based upon the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. The Company recognizes interest and penalties related to uncertain tax positions in its income tax expense.

Cash and Cash Equivalents

The Company's cash equivalents were primarily comprised of investments in several large institutional money market funds and bank deposits, with original maturity of three months or less. The Company includes outstanding payments within "Cash and cash equivalents" and correspondingly increases "Accounts payable and accrued liabilities" on the consolidated balance sheets. At December 28, 2018, and December 29, 2017, the Company included $56 million and $169 million, respectively, of outstanding payments within "Cash and cash equivalents."

Restricted Cash

The Company has restricted cash balances, primarily representing advances from customers that are restricted as to use for certain expenditures related to that customer's contract. Restricted cash balances are included as "Other current assets" in the consolidated balance sheets.

Receivables

The Company's receivables include amounts billed and currently due from customers, amounts billable where the right to consideration is unconditional and amounts unbilled. As of fiscal 2018, amounts billable were classified as billed receivables. These receivables were classified as unbilled receivables for fiscal 2017 (see "Note 9—Receivables").

Amounts billable and unbilled amounts are recognized at estimated realizable value and consist of costs and fees, substantially all of which are expected to be billed and collected generally within one year. Unbilled amounts also include rate variances that are billable upon negotiation of final indirect rates with the DCAA.

The typical billing for the Company's cost-reimbursable and T&M contracts is as costs are incurred. FFP contracts are billed either based on milestones, which are the achievement of specific events as defined in the contract, or based on progress payments, which are interim payments up to a designated amount of costs incurred as work progresses. On certain contracts, the customer withholds a certain percentage of the contract price (retainage). These withheld amounts are included within the Company's unbilled receivables and are billed upon contract completion or the occurrence of a specified event, and when negotiation of final indirect rates with the U.S. government is complete. Based on the Company's historical experience, the write-offs of retention balances have not been significant.

When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded.

Amounts billed and collected on contracts but not yet recorded as revenue because the Company has not performed its obligation under the arrangement with a customer are deferred and included within "Accounts payable and accrued liabilities" or "Other long-term liabilities" on the consolidated balance sheets.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk primarily consist of accounts receivable and derivatives. Since the Company's receivables are primarily with the U.S. government, the Company does not have exposure to a material credit risk. The Company manages its credit risk related to derivatives through the use of multiple counterparties with high credit standards.

Inventories

Inventories are valued at the lower of cost or estimated net realizable value. Raw material inventory is valued using the average cost method. Work-in-process inventory includes raw material costs plus labor costs, including fringe benefits and allocable overhead costs. The majority of finished goods inventory consists of security products, inspection systems and baggage scanning equipment. The Company evaluates inventory against historical and planned usage to determine appropriate provisions for obsolete inventory. Inventory balances are included as "Other current assets" in the consolidated balance sheets.

Goodwill

Goodwill represents the excess of the fair value of consideration transferred, plus the fair value of any non-controlling interests in the acquiree, over the fair value of the net assets acquired and liabilities assumed as of the acquisition date. Goodwill is not amortized, but instead is tested annually for impairment at the reporting unit level and tested more frequently if events or circumstances indicate that the carrying value may not be recoverable. The Company's policy is to perform its annual goodwill impairment evaluation as of the first day of the fourth quarter of its fiscal year. During fiscal 2018, the Company had five reporting units for the purpose of testing goodwill for impairment.

Goodwill is evaluated for impairment either under a qualitative assessment option or a quantitative approach depending on the facts and circumstances of a reporting unit, consideration of the excess of a reporting unit's fair value over its carrying amount in previous assessments and changes in business environment.

When performing a qualitative assessment, the Company considers factors including, but not limited to, current macroeconomic conditions, industry and market conditions, cost factors, financial performance and other events relevant to the entity or reporting unit under evaluation to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the Company determines that it is more likely than not that a reporting unit's fair value is less than its carrying amount, a quantitative goodwill impairment test is performed.

When performing a quantitative goodwill impairment test, the reporting unit carrying value is compared to its fair value. Goodwill is deemed impaired if, and the impairment loss is recognized for the amount by which, the reporting unit carrying value exceeds its fair value.

The Company estimates the fair value of each reporting unit using both market and income approaches (Level 3) when a quantitative analysis is performed. To determine the fair value of the reporting units, the outputs from both methods are equally weighted.

The market approach is a technique where the fair value is calculated based on the multiples of comparable publicly-traded companies that provide a reasonable basis of comparison with each of the Company's reporting units. Valuation ratios are selected that relate market prices to selected financial metrics from comparable companies. These ratios are applied after consideration of adjustments and weightings related to financial position, growth, volatility, working capital movement and other factors. Due to the fact that stock prices of comparable companies represent minority interests, the Company also considers an acquisition control premium to reflect the impact of additional value associated with a controlling interest.

The income approach is a technique where the fair value is calculated based on present value of future cash flows using risk-adjusted discount rates, which represent the weighted-average cost of capital ("WACC") for each reporting unit. Determination of WACC includes assessing the cost of equity and debt as of the valuation date. In addition, a terminal value is developed for forecasted future cash flows beyond the projection period discounted back to the present value. The forecasts used in the Company’s estimation of fair value are developed by management based on business and market considerations.

The goodwill impairment test process and valuation model is based upon certain key assumptions that require the exercise of significant judgment and assumptions including the use of appropriate financial projections, economic expectations, WACC and expected long-term growth rates, as well as using available market data. Significant changes to these estimates and assumptions could adversely impact conclusions and actual future results may differ from the estimates. In addition, the identification of reporting units and the allocation of assets and liabilities to the reporting units when determining the carrying value of each reporting unit also requires judgment.

Intangible Assets

Acquired intangible assets with finite lives and internally developed software are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are amortized over the following periods:



		Estimated useful lives (in years)
Program and contract intangibles		6-11
Backlog		1
Customer relationships		8
Software and technology		4-15

Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Intangible assets with indefinite lives are not amortized but are assessed for impairment at the beginning of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

Property, Plant and Equipment

Purchases of property, plant and equipment, including purchases of software and software licenses, as well as costs associated with major renewals and improvements are capitalized. Maintenance, repairs and minor renewals and improvements are expensed as incurred.

Construction in Progress ("CIP") is used to accumulate all costs for projects that are not yet complete. CIP balances are transferred to the appropriate asset account when the asset is capitalized and ready for its intended use.

When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is recognized. Depreciation is recognized using the methods and estimated useful lives as follows:



	Depreciation method	Estimated useful lives (in years)
Computers and other equipment	Straight-line or declining-balance	3-10
Buildings	Straight-line	Not to exceed 40
Building improvements and leasehold improvements	Straight-line	Shorter of useful life of asset or remaining lease term
Office furniture and fixtures	Straight-line or declining-balance	6-9

The Company evaluates its long-lived assets for potential impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable and the carrying amount of the asset exceeds its estimated fair value.

Fair Value Measurements

The accounting standard for fair value measurements establishes a three-level fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: observable inputs such as quoted prices in active markets (Level 1); inputs other than quoted prices in active markets for identical assets or liabilities that are observable either directly or indirectly or quoted prices that are not active (Level 2); and unobservable inputs in which there is little or no market data (e.g., discounted cash flow and other similar pricing models), which requires the Company to develop its own assumptions (Level 3).

The accounting guidance for fair value measurements requires that the Company maximize the use of observable inputs and minimize the use of unobservable inputs in determining fair value. The accounting guidance provides for the irrevocable option to elect, on a contract-by-contract basis, to measure certain financial assets and liabilities at fair value at inception of the contract and record any subsequent changes in fair value in earnings. The Company has not made fair value option elections on any of its financial assets and liabilities.

The fair value of financial instruments is determined based on quoted market prices, if available, or management's best estimate (see "Financial Instruments" below).

Management evaluates its investments for other-than-temporary impairment at each balance sheet date. When testing long-term investments for recovery of carrying value, the fair value of long-term investments is determined using various valuation techniques and factors such as, market prices of comparable companies (Level 2 input), discounted cash flow models (Level 3 input) and recent capital transactions of the portfolio companies being valued (Level 3 input). If management determines that an other-than-temporary decline in the fair value of an investment has occurred, an impairment loss is recognized to reduce the investment to its estimated fair value.

The Company's non-financial instruments measured at fair value on a non-recurring basis include goodwill, indefinite-lived intangible assets and long-lived tangible assets. The valuation methods used to determine fair value require a significant degree of management judgment to determine the key assumptions. As such, the Company generally classifies non-financial instruments as either Level 2 or Level 3 fair value measurements.

Financial Instruments

The Company is exposed to certain market risks which are inherent in certain transactions entered into during the normal course of business. These transactions include sales or purchase contracts denominated in foreign currencies and exposure to changing interest rates. The Company manages its risk to changes in interest rates through the use of derivative instruments.

For fixed rate borrowings, the Company uses variable interest rate swaps, effectively converting fixed rate borrowings to variable rate borrowings. These swaps are designated as fair value hedges. The fair value of these interest rate swaps is determined based on observed values for underlying interest rates on the LIBOR yield curve (Level 2).

For variable rate borrowings, the Company uses fixed interest rate swaps, effectively converting a portion of the variable interest rate payments to fixed interest rate payments. These swaps are designated as cash flow hedges. The fair value of these interest rate swaps is determined based on observed values for the underlying interest rates (Level 2).

The Company does not hold derivative instruments for trading or speculative purposes.

The Company's defined benefit plan assets consist of investments in pooled funds that contain investments with values based on quoted market prices, but for which the pools are not valued on a daily quoted market basis (Level 2).

Stock-Based Compensation

The Company accounts for stock-based compensation at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is generally the vesting period, net of an estimated forfeiture rate.

The fair value of restricted stock awards and performance-based stock awards is based on the closing price of the Company's common stock on the date of grant. The fair value of performance-based stock awards with market conditions is based on using the Monte Carlo simulation.

The fair value of stock option awards granted is based on using the Black-Scholes-Merton option pricing model. The estimation of stock option fair value requires management to make estimates and judgments about, among other things, employee exercise behavior, forfeiture rates and the expected volatility of Leidos common stock over the expected option term. These judgments directly affect the amount of compensation expense that will ultimately be recognized.

Foreign Currency

The financial statements of consolidated international subsidiaries, for which the functional currency is not the U.S. dollar, are translated into U.S. dollars using the exchange rate at each balance sheet date for assets and liabilities and a weighted average exchange rate over the reporting period for revenues, expenses, gains and losses. Translation adjustments are recorded as accumulated other comprehensive (loss) income in stockholders' equity. Gains and losses due to movements in foreign currency exchange rates are recognized as "Other expense, net" on the consolidated statements of income.

Revenues

12 Months Ended

Dec. 28, 2018

Revenue from Contract with Customer [Abstract]

Revenues

Note 4—Revenues

Dual Reporting

The effects to the consolidated financial statements at and as of December 28, 2018, as a result of applying ASC 606, rather than previous GAAP ("ASC 605"), were the following:

Balance Sheet



	As Reported (ASC 606)		As Adjusted (ASC 605)
	(in millions)
Receivables, net	$	1,877	$	1,872
Other current assets	543		545
Accumulated earnings (deficit)	372		369

Income Statement



	Year Ended December 28, 2018
	As Reported (ASC 606)		As Adjusted (ASC 605)
	(in millions)
Revenues	$	10,194	$	10,189
Cost of revenues	8,690		8,688
Operating income	749		746

The changes reflected above were primarily due to the Company's units-of-delivery contracts, which were recognized at a point in time under ASC 605 and are recognized using an over-time model under ASC 606.

Remaining Performance Obligations

Remaining performance obligations represent the expected value of exercised contracts, both funded and unfunded, less revenue recognized to date. Remaining performance obligations do not include unexercised option periods and future potential task orders expected to be awarded under IDIQ contracts.

As of December 28, 2018, the Company had $10.2 billion of remaining performance obligations, which are expected to be recognized as revenue in the amounts of $7.3 billion, $1.1 billion and $1.8 billion for fiscal 2019, fiscal 2020 and fiscal 2021 and thereafter, respectively.

Disaggregation of Revenues

The Company disaggregates revenues by customer-type, contract-type and geographic location for each of its reportable segments. These categories represent how the nature, timing and uncertainty of revenues and cash flows are affected by the U.S. government procurement environment.

Disaggregated revenues by customer-type were as follows:



	Year Ended December 28, 2018
	Defense Solutions		Civil		Health		Total
	(in millions)
DoD	$	4,318	$	128	$	386	$	4,832
Other government agencies⁽¹⁾	194		2,412		1,276		3,882
Commercial and non-U.S. customers	436		889		155		1,480
Total	$	4,948	$	3,429	$	1,817	$	10,194

⁽¹⁾ Includes non-DoD federal government agencies, state and local government agencies.

The majority of the Company's revenues are generated from U.S. government contracts, either as a prime contractor or as a subcontractor to other contractors. Revenues from the U.S. government can be adversely impacted by spending caps or changes in budgetary priorities of the U.S. government, as well as delays in program start dates or the award of a contract. Government spending levels for the DoD may be impacted by spending priorities as a result of competing demands for federal funds.

Disaggregated revenues by contract-type were as follows:



	Year Ended December 28, 2018
	Defense Solutions		Civil		Health		Total
	(in millions)
Cost-reimbursement and fixed-price-incentive-fee	$	3,417	$	1,863	$	189	$	5,469
Firm-fixed-price	1,031		1,004		1,134		3,169
Time-and-materials and fixed-price-level-of-effort	500		562		494		1,556
Total	$	4,948	$	3,429	$	1,817	$	10,194

Cost-reimbursement and FP-IF contracts are generally lower risk and have lower profits. T&M and FP-LOE contracts are also low risk but profits may vary depending on actual labor costs compared to negotiated contract billing rates. FFP contracts offer the potential for higher profits while increasing the Company’s exposure to risk of cost overruns.

Disaggregated revenues by geographic location were as follows:



	Year Ended December 28, 2018
	Defense Solutions		Civil		Health		Total
	(in millions)
United States	$	4,572	$	2,876	$	1,817	$	9,265
International	376		553		—		929
Total	$	4,948	$	3,429	$	1,817	$	10,194

The Company's international business operations, primarily located in Australia and the U.K., are subject to additional and different risks than its U.S. business. Failure to comply with U.S. government laws and regulations applicable to international business, such as the Foreign Corrupt Practices Act or U.S. export control regulations, could have an adverse impact on the Company's business with the U.S. government.

In some countries, there is an increased chance for economic, legal or political changes that may adversely affect the performance of the Company's services, sales of products or repatriation of profits. International transactions can also involve increased financial and legal risks arising from foreign exchange variability, imposition of tariffs or additional taxes and restrictive trade policies and delays or failure to collect amounts due to differing legal systems.

Note 5—Contract Assets and Liabilities

The Company’s performance obligations are satisfied either over time as work progresses or at a point in time. FFP contracts are typically billed to the customer using milestone payments while cost-reimbursable and T&M contracts are typically billed to the customer on a monthly or bi-weekly basis as indicated by the negotiated billing terms and conditions of the contract. As a result, for each of the company’s contracts, the timing of revenue recognition, customer billings and cash collections results in a net contract asset or liability at the end of each reporting period.

Contract assets include unbilled receivables, which is the amount of revenue recognized that exceeds the amount billed to the customer, where right to payment is not just subject to the passage of time.

Contract liabilities consist of deferred revenue.

The components of contract assets and contract liabilities consisted of the following:



	Balance sheet line item	December 28, 2018		December 30, 2017⁽¹⁾
		(in millions)
Contract assets - current:
Unbilled receivables⁽²⁾	Receivables, net	$	818	$	844

Contract liabilities - current:
Deferred revenue	Accounts payable and accrued liabilities	$	276	$	293

Contract liabilities - non-current:
Deferred revenue	Other long-term liabilities	$	10	$	17

⁽¹⁾ Includes the cumulative effect of the changes made to the Company's opening balance sheet at December 30, 2017, as a result of the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606).

⁽²⁾ Balances exclude $381 million and $234 million determined to be billable at December 28, 2018, and December 30, 2017, respectively.

The decrease in unbilled receivables was primarily due to the timing of billings and revenue recognized on certain contracts. The decrease in deferred revenue was primarily due to revenue recognized during the period partially offset by the timing of advance payments from customers.

During fiscal 2018, the Company recognized revenues of $208 million relating to amounts that were included as a contract liability at December 30, 2017.

The Company did not recognize any impairment losses on contract assets during fiscal 2018.

Contract Asset and Liabilities

12 Months Ended

Dec. 28, 2018

Revenue from Contract with Customer [Abstract]

Contract Asset and Liabilities

Note 4—Revenues

Dual Reporting

The effects to the consolidated financial statements at and as of December 28, 2018, as a result of applying ASC 606, rather than previous GAAP ("ASC 605"), were the following:

Balance Sheet



	As Reported (ASC 606)		As Adjusted (ASC 605)
	(in millions)
Receivables, net	$	1,877	$	1,872
Other current assets	543		545
Accumulated earnings (deficit)	372		369

Income Statement



	Year Ended December 28, 2018
	As Reported (ASC 606)		As Adjusted (ASC 605)
	(in millions)
Revenues	$	10,194	$	10,189
Cost of revenues	8,690		8,688
Operating income	749		746

Remaining Performance Obligations

Disaggregation of Revenues

Disaggregated revenues by customer-type were as follows:



	Year Ended December 28, 2018
	Defense Solutions		Civil		Health		Total
	(in millions)
DoD	$	4,318	$	128	$	386	$	4,832
Other government agencies⁽¹⁾	194		2,412		1,276		3,882
Commercial and non-U.S. customers	436		889		155		1,480
Total	$	4,948	$	3,429	$	1,817	$	10,194

⁽¹⁾ Includes non-DoD federal government agencies, state and local government agencies.

Disaggregated revenues by contract-type were as follows:



	Year Ended December 28, 2018
	Defense Solutions		Civil		Health		Total
	(in millions)
Cost-reimbursement and fixed-price-incentive-fee	$	3,417	$	1,863	$	189	$	5,469
Firm-fixed-price	1,031		1,004		1,134		3,169
Time-and-materials and fixed-price-level-of-effort	500		562		494		1,556
Total	$	4,948	$	3,429	$	1,817	$	10,194

Disaggregated revenues by geographic location were as follows:



	Year Ended December 28, 2018
	Defense Solutions		Civil		Health		Total
	(in millions)
United States	$	4,572	$	2,876	$	1,817	$	9,265
International	376		553		—		929
Total	$	4,948	$	3,429	$	1,817	$	10,194

Note 5—Contract Assets and Liabilities

Contract liabilities consist of deferred revenue.

The components of contract assets and contract liabilities consisted of the following:



	Balance sheet line item	December 28, 2018		December 30, 2017⁽¹⁾
		(in millions)
Contract assets - current:
Unbilled receivables⁽²⁾	Receivables, net	$	818	$	844

Contract liabilities - current:
Deferred revenue	Accounts payable and accrued liabilities	$	276	$	293

Contract liabilities - non-current:
Deferred revenue	Other long-term liabilities	$	10	$	17

⁽²⁾ Balances exclude $381 million and $234 million determined to be billable at December 28, 2018, and December 30, 2017, respectively.

During fiscal 2018, the Company recognized revenues of $208 million relating to amounts that were included as a contract liability at December 30, 2017.

The Company did not recognize any impairment losses on contract assets during fiscal 2018.

Acquisitions

12 Months Ended

Dec. 28, 2018

Business Combinations [Abstract]

Acquisitions

Note 6—Acquisitions

The Company may acquire businesses as part of its growth strategy to provide new or enhance existing capabilities and offerings to customers. During fiscal 2016, the Company completed the acquisition of Lockheed Martin's IS&GS Business.

Lockheed Martin Transaction

On January 26, 2016, Leidos announced it had entered into a definitive agreement (as amended, the "Merger Agreement") with Lockheed Martin Corporation ("Lockheed Martin"); Abacus Innovations Corporation, a Delaware corporation and a wholly owned subsidiary of Lockheed Martin ("Splitco"); and Lion Merger Co., a Delaware corporation and, at the time of announcement, a wholly owned subsidiary of Leidos ("Merger Sub"), pursuant to which Leidos would combine with Lockheed Martin's realigned Information Systems & Global Solutions business in a Reverse Morris Trust transaction. In connection with the Merger Agreement, Lockheed Martin and Splitco entered into a Separation Agreement dated January 26, 2016 (as amended, the "Separation Agreement"), pursuant to which Lockheed Martin would separate the IS&GS Business from Lockheed Martin and transfer the IS&GS Business to Splitco. The transactions contemplated by the Merger Agreement and the Separation Agreement are referred to herein as the "Transactions."

On August 16, 2016, the acquisition date, the Company completed the Transactions. In the Transactions, among other steps, (i) Lockheed Martin transferred the IS&GS Business to Splitco; (ii) Lockheed Martin offered to Lockheed Martin stockholders the right to exchange all or a portion of their shares of Lockheed Martin common stock for shares of Splitco common stock by way of an exchange offer (the "Distribution"); and (iii) Merger Sub merged with and into Splitco, with Splitco as the surviving corporation (the "Merger") and a wholly owned subsidiary of Leidos. Upon consummation of the Transactions, those Lockheed Martin stockholders who elected to participate in the exchange offer received approximately 77 million shares of Leidos common stock, which represented approximately 50.5% of the outstanding shares of Leidos common stock after consummation of the Transactions. Holders of Leidos shares prior to the transaction held the remaining 49.5% of the outstanding shares of Leidos common stock immediately after the closing.

Prior to the Distribution, Splitco incurred third-party debt financing in an aggregate principal amount of $1.8 billion and immediately thereafter, Lockheed Martin transferred the IS&GS Business to Splitco and Splitco made a special cash payment to Lockheed Martin of $1.8 billion.

In connection with the Transactions, Leidos incurred new indebtedness and assumed Splitco's indebtedness in the form of term loans in an aggregate principal amount of $690 million and $1.8 billion, respectively, and entered into a new $750 million senior secured revolving credit facility, which replaced its existing revolving credit facility. See "Note 15—Debt" for further information regarding the debt incurred and the senior revolving credit facility.

In conjunction with the Transactions, Leidos' Board of Directors declared a special dividend of $13.64 per share of Leidos common stock. Consequently, on August 22, 2016, the Company paid $993 million to stockholders of record as of August 15, 2016, and accrued $29 million of dividend equivalents with respect to outstanding equity awards. See "Note 19—Stock-Based Compensation" for further information regarding the modifications made to the Company's outstanding stock awards as a result of the special dividend.

As a result of the Transactions, membership on the Leidos Board of Directors was increased to 12 directors, in which three directors designated by Lockheed Martin were appointed to the board. A majority of the senior management of Leidos immediately prior to the consummation of the Transactions remained Leidos executive officers immediately after the Transactions. Leidos management determined that Leidos is the accounting acquirer in the Transactions based on the facts and circumstances noted within this section and other relevant factors.

The acquisition adds large, complex information technology ("IT") system implementation and operation experience and additional federal and international IT solutions and services work to the Leidos portfolio, providing more venues to sell value added services such as cybersecurity and analytics. As a result, the Company is more diversified in markets it serves and provides the Company the scale and access to markets intended to further growth.

The final purchase consideration for the acquisition of the IS&GS Business was as follows (in millions):



Value of common stock issued to Lockheed Martin stockholders⁽¹⁾	$	2,929
Equity consideration for replacement awards⁽²⁾	9
Working capital adjustments⁽³⁾	81
Purchase price	$	3,019

⁽¹⁾ Represents approximately 77 million new shares of Leidos common stock issued to those Lockheed Martin stockholders who elected to participate in the exchange offer, based on the Company's August 16, 2016, closing share price of $51.69, less the Leidos special cash dividend amount of $13.64, which the Lockheed Martin stockholders were not entitled to receive.

⁽²⁾ Represents a portion of the $23 million total fair value of replacement equity-based awards attributable to the pre-Merger service period. The remaining $12 million, net of estimated forfeitures, will be recognized as stock-based compensation expense over the remaining requisite service period (see "Note 19—Stock-Based Compensation").

⁽³⁾In January 2018, the Company finalized its net working capital at $105 million. The additional $24 million was recorded as acquisition costs in the consolidated statements of income.

The final fair values of the assets acquired and liabilities assumed at the date of the Transactions were as follows (in millions):



Cash	$	25
Receivables, net	938
Other current assets	73
Property, plant and equipment	87
Intangible assets	1,194
Other assets	58
Accounts payable and accrued liabilities	(733		)
Accrued payroll and employee benefits	(186		)
Long-term debt, current portion	(23		)
Deferred tax liabilities	(328		)
Long-term debt, net of current portion	(1,780		)
Other long-term liabilities	(45		)
Total identifiable net liabilities assumed	(720		)
Non-controlling interest	(13		)
Goodwill	3,752
Purchase price	$	3,019

During fiscal 2017, the Company recorded adjustments to finalize the fair value of acquired assets and liabilities assumed which resulted in a $337 million increase in goodwill. Significant changes included intangible assets, property, plant and equipment, deferred tax assets, other assets, accounts payable and accrued liabilities and deferred tax liabilities. The Company recognized cumulative catch-up adjustments related to valuation adjustments for equity method investments and property, plant, and equipment, which resulted in an increase of $7 million in amortization expense and an increase of $7 million of depreciation expense, respectively. The Company recorded the cumulative catch-up adjustments to equity method investments within "Equity earnings of non-consolidated subsidiaries" and adjustments to depreciation within "Costs of revenues" and "Selling, general and administrative expenses" on the consolidated statement of income.

Additionally, during fiscal 2017, the Company recorded a valuation adjustment to reflect the fair value of the non-controlling interest acquired. The fair value of $13 million was determined by calculating the present value of future cash flows for the non-controlling interest. Significant assumptions inherent in the valuation of the non-controlling interest include the estimated after-tax cash flows expected to be received and an assessment of the appropriate discount rate.

The goodwill represents intellectual capital and the acquired assembled work force, none of which qualify for recognition as a separate intangible asset. The value of goodwill has been allocated to the reporting units on a relative fair value approach (see "Note 10—Goodwill"). Of the total goodwill, $414 million is tax deductible.

The Company identified $1.2 billion of intangible assets, representing program and contract intangibles, backlog and software and technology. The fair value measurements were primarily based on significant inputs that are not observable in the market and represent a Level 3 measurement (see "Note 13—Fair Value Measurements"). The income approach was primarily used to value the intangible assets, consisting primarily of acquired program and contract intangibles and backlog. The income approach indicates value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flow is discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money.

The following table summarizes the fair value of intangible assets acquired at the date of acquisition and the related weighted average amortization period:



	Weighted average amortization period	Fair value
	(in years)	(in millions)
Program and contract intangibles⁽¹⁾	9.7	$	1,011
Backlog	1.8	157
Software and technology⁽¹⁾	4.6	26
Total	8.6	$	1,194

⁽¹⁾ The weighted average amortization period is estimated based on the projected economic benefits associated with these assets.

The Company incurred the following expenses related to the acquisition and integration of the IS&GS Business:



	Year Ended
	December 28, 2018		December 29, 2017		December 30, 2016
	(in millions)
Acquisition costs	$	—	$	25	$	44
Integration costs	29		77		46
Total acquisition and integration costs	$	29	$	102	$	90

These acquisition and integration costs have been recorded within Corporate and presented in "Acquisition, integration and restructuring costs" on the consolidated statements of income.

On January 10, 2018, the final amount of the net working capital of the IS&GS Business was determined through a binding arbitration proceeding in accordance with the Separation Agreement with Lockheed Martin. As a result, $24 million was recorded as acquisition costs in the consolidated statements of income for fiscal 2017. On January 18, 2018, the final working capital amount of $105 million was paid to Lockheed Martin, of which $24 million and $81 million was presented as cash flows from operating and investing activities, respectively, on the consolidated statement of cash flows.

During fiscal 2018, a tax indemnification liability of $23 million was paid to Lockheed Martin in accordance with the Tax Matters Agreement, which was presented as cash flows from financing activities on the consolidated statement of cash flows.

Pro Forma Financial Information (unaudited)

The following pro forma financial information presents consolidated results of operations as if the acquisition had occurred on January 31, 2015. The pro forma financial information was prepared based on historical financial information and has been adjusted to give effect to the events that are directly attributable to the Transactions and factually supportable. The pro forma results below do not reflect future events that have occurred or may occur after the Transactions, including anticipated synergies or other expected benefits that may be realized from the Transactions. The pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had been completed on January 31, 2015, nor is it intended to be an indication of future operating results.



	Year Ended
(unaudited)	December 30, 2016
	(in millions, except for per share amounts)
Revenues	$	10,443
Net income	340
Net income attributable to Leidos common stockholders	335
Earnings per share:
Basic	$	2.23
Diluted	2.20

The unaudited pro forma financial information above excludes acquisition-related costs of $44 million as a non-recurring significant adjustment. This adjustment was made to account for certain costs incurred as if the Transactions had been completed on January 31, 2015.

Divestitures

12 Months Ended

Dec. 28, 2018

Discontinued Operations and Disposal Groups [Abstract]

Divestitures

Note 7—Divestitures

Commercial Cybersecurity Business

On June 5, 2018, the Company entered into a Stock and Asset Purchase Agreement to sell the Company's commercial cybersecurity business, included within the Company's Civil segment, in order to focus on providing solutions, including cybersecurity, to the Company's core markets of governments and highly regulated industries. The sale is expected to be completed in early fiscal 2019 and is not expected to result in a loss. The Company has presented the associated assets and liabilities of the business as held for sale in the Company's consolidated balance sheet as of December 28, 2018. The major classes of assets and liabilities classified as held for sale were as follows:



	December 28, 2018
	(in millions)
Receivables, net	$	16
Other current assets	5
Property, plant and equipment, net	3
Intangible assets, net	5
Goodwill	57
Deferred tax assets	6
Total assets held for sale	$	92

Accounts payable and accrued liabilities	$	16
Accrued payroll and employee benefits	4
Other long-term liabilities	3
Total liabilities held for sale	$	23

The planned disposition does not represent a strategic shift in operations that will have a material effect on the Company's operations and financial results, and accordingly was not presented as discontinued operations.

Heavy Construction Business

In April 2016, the Company's Civil segment disposed of a business that was primarily focused on providing design, build and heavy construction engineering services. The Company received cash proceeds of $23 million, resulting in a pre-tax gain on sale of $3 million. The major classes of assets and liabilities sold included $73 million of accounts receivable, net; $3 million of non-current assets and $63 million of accounts payable and accrued liabilities. The Company recorded the pre-tax gain on sale in "Other expense, net" on the consolidated statements of income.

Plainfield Renewable Energy Holdings LLC

On July 24, 2015, the Company completed the sale of its equity interests in Plainfield Renewable Energy Holdings LLC ("Plainfield"), a biomass-fueled power plant in Plainfield, Connecticut (the "plant"), for an aggregate consideration of $102 million, subject to certain adjustments. The consideration received at closing consisted of a cash payment of $29 million (the "Closing Payment") and a secured promissory note for $73 million, net of discount (the "Note").

The original maturity date of the Note was July 24, 2017 (the "Original Maturity Date"), with an option to extend the maturity date for three consecutive one-year periods. The annual interest rate of 6% would increase to 8% if the maturity date was extended beyond July 24, 2017, and would increase to 9% if extended beyond July 24, 2019. The first payment of accrued and unpaid interest was due January 24, 2016, with subsequent payments occurring every six months, including a portion of the principal balance. The Note allowed for a six-month deferral of certain payments due in January 2016 and July 2016. In January 2016 and July 2016, the Company was notified by the buyer that the interest payment due on January 24, 2016, would be deferred to the next payment date, and a portion of the principal payment due on July 24, 2016, would be deferred to the next payment due date.

During the quarter ended June 30, 2017, Plainfield exercised the first of three one-year term extension options available under the original credit agreement, thereby extending the maturity date of the Note to July 24, 2018. Concurrent with this extension, the interest rate on the Note increased from 6% to 8%. Also, during the quarter ended June 30, 2017, Leidos and Plainfield entered into an amendment to the Note allowing Plainfield to defer up to $4 million of the interest and principal payments due in July 2017 and January 2018 until July 2018. In consideration of this deferment, Leidos received certain concessions and releases from obligations under the original transaction documents.

The Company collected $6 million of principal and interest each year during fiscal 2016 and fiscal 2017. Payments under the Note were secured by a general security interest in the personal property of Plainfield, a pledge of the membership interests of Plainfield and a first mortgage on the real property that comprised the plant.

In January 2018, the Company entered into negotiations with the equity owners of Plainfield LLC regarding the Plainfield Recapitalization Plan ("Plan"). The Plan envisioned raising new equity combined with reduction of Plainfield's debt. As a result, the Company recorded a $33 million impairment of its Note, which is presented in "Other expense, net" on the consolidated statements of income. The net realizable value of the Note at December 29, 2017, was estimated to be approximately $40 million, compared to its carrying value of $73 million, including accrued interest.

On July 12, 2018, Leidos and Plainfield entered into an additional amendment to the Note, allowing Plainfield to defer the maturity of the Note until the earlier of August 24, 2018, or the date Plainfield successfully closed on a refinancing agreement with a third party. Under the terms of the agreement, if Plainfield successfully refinanced the Note prior to August 24, 2018, Leidos would allow Plainfield to settle the Note in full for $40 million plus 50% of additional net proceeds obtained by Plainfield. On August 23, 2018, Leidos and Plainfield entered into an agreement with respect to the final payoff of the Note. As a result, the Company received proceeds of $40 million in full satisfaction of Plainfield's obligations under the Note.

Restructuring Expenses

12 Months Ended

Dec. 28, 2018

Restructuring and Related Activities [Abstract]

Restructuring Expenses

Note 8—Restructuring Expenses

After the acquisition of the IS&GS Business, the Company began an initiative to reduce its cost structure, which includes optimization of its real estate portfolio by vacating certain facilities and consolidating others, and by reducing headcount.

The restructuring expenses related to this program were as follows:



	Year Ended
	December 28, 2018		December 29, 2017		December 30, 2016
	(in millions)
Severance costs	$	2	$	18	$	10
Lease termination expenses	6		19		2
Restructuring expenses related to the IS&GS Business	$	8	$	37	$	12

As of December 28, 2018, the Company has recognized a total of $57 million of expense in connection with restructuring activities. These restructuring expenses have been recorded within Corporate and presented in "Acquisition, integration and restructuring costs" on the consolidated statements of income.

The related restructuring liability related to this program was as follows:



	Severance Costs			Lease Termination Expenses			Total
	(in millions)
Balance at December 30, 2016	$	7		$	1		$	8
Charges	18			19			37
Cash payments	(20		)	(16		)	(36		)
Balance at December 29, 2017	5			4			9
Charges	2			6			8
Cash payments	(7		)	(8		)	(15		)
Balance at December 28, 2018	$	—		$	2		$	2

Receivables

12 Months Ended

Dec. 28, 2018

Receivables [Abstract]

Receivables

Note 9—Receivables

The components of receivables, net consisted of the following:



	December 28, 2018			December 29, 2017
	(in millions)
Billed receivables⁽¹⁾	$	1,067		$	771
Unbilled receivables	818			1,074
Allowance for doubtful accounts	(8		)	(14		)
	$	1,877		$	1,831

⁽¹⁾ As a result of the adoption of ASC 606, $381 million of billable receivables were classified as billed receivables for fiscal 2018. $234 million of billable receivables were classified as unbilled receivables for fiscal 2017.

- Definition

The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses.

+ References + Details

Goodwill

12 Months Ended

Dec. 28, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

Note 10—Goodwill

During fiscal 2017, the Company completed its business reorganization, which resulted in identification of three reportable segments (Defense Solutions, Civil and Health). Additionally, the Company separately presents the costs associated with corporate functions as Corporate. The Company commenced operating and reporting under the new organizational structure effective the beginning of fiscal 2017 (see "Note 24—Business Segments"). Goodwill, including the amounts from the acquisition of the IS&GS Business, was allocated to the reporting units on a relative fair value approach.

The following table presents changes in the carrying amount of goodwill by reportable segment:



	Defense Solutions			Civil			Health			Total
	(in millions)
Goodwill at December 30, 2016⁽¹⁾	$	1,954		$	1,731		$	937		$	4,622
Adjustment to original purchase price allocation	94			259			(16		)	337
Foreign currency translation adjustments	7			8			—			15
Goodwill at December 29, 2017⁽¹⁾	2,055			1,998			921			4,974
Foreign currency translation adjustments	(40		)	(11		)	—			(51		)
Transfers to assets held for sale	—			(57		)	—			(57		)
Adjustment to goodwill	—			(6		)	—			(6		)
Goodwill at December 28, 2018⁽¹⁾	$	2,015		$	1,924		$	921		$	4,860

⁽¹⁾Carrying amount includes accumulated impairment losses of $369 million and $117 million within the Health and Civil segments, respectively.

See "Note 6—Acquisitions" for the description of adjustments to the original purchase price allocation.

In conjunction with the fiscal 2017 change in reportable segments, the Company evaluated goodwill for impairment, both before and after the segment change and determined that goodwill was not impaired.

Based on a qualitative analysis performed during the Company's annual impairment evaluation for fiscal 2018 and fiscal 2016 for certain of its reporting units, it was determined that it is more likely than not that the fair values of the reporting units were in excess of the individual reporting unit carrying values, and as a result, a quantitative step one analysis was not necessary. Additionally, based on the results of the quantitative step one analysis for certain other of its reporting units, it was determined that the fair value was in excess of the individual reporting units carrying values. In fiscal 2017, the company performed a quantitative analysis for all reporting units. It was determined that the fair values of all reporting units exceeded their carrying values. As a result, no goodwill impairments were identified as part of the annual goodwill impairment evaluation for the periods mentioned above.

During the year ended December 28, 2018, the Company recorded an immaterial correction of $6 million with respect to fair value of liabilities acquired from the Transactions (see "Note 6—Acquisitions").

Intangible Assets

12 Months Ended

Dec. 28, 2018

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Note 11—Intangible Assets

Intangible assets consisted of the following:



	December 28, 2018							December 29, 2017
	Gross carrying value		Accumulated amortization			Net carrying value		Gross carrying value		Accumulated amortization			Net carrying value
	(in millions)
Finite-lived intangible assets:
Program and contract intangibles	$	1,003	$	(374	)	$	629	$	1,013	$	(187	)	$	826
Software and technology	93		(74		)	19		89		(64		)	25
Customer relationships	4		(4		)	—		4		(3		)	1
Backlog	—		—			—		158		(158		)	—
Total finite-lived intangible assets	1,100		(452		)	648		1,264		(412		)	852
Indefinite-lived intangible assets:
Trade names	4