Leidos Holdings Inc

Overview

As of June 28, 2024, we had $823 million in cash and cash equivalents. We have a senior unsecured revolving credit facility which can provide up to $1 billion in additional borrowing, if required. As of June 28, 2024, and December 29, 2023, there were no borrowings outstanding under the revolving credit facility.

We had outstanding debt of $4.7 billion at both June 28, 2024, and December 29, 2023.

We have a commercial paper program in which we may issue short-term unsecured commercial paper notes ("Commercial Paper Notes") and have maturities of up to 397 days from the date of issuance. As of June 28, 2024, and December 29, 2023, we did not have any Commercial Paper Notes outstanding.

We made principal payments, excluding the impacts of our Commercial Paper Notes, on our debt of $5 million and $9 million during the three and six months ended June 28, 2024, respectively, and $325 million and $2,036 million for the three and six months ended June 30, 2023, respectively. The activity for the three months ended June 30, 2023, included a required principal payment of $320 million to discharge the 364-day term loan credit agreement. The activity for the six months ended June 30, 2023, included a $1,210 million payment to discharge the $1.9 billion 5.77% senior unsecured term loan facility and a $498 million payment to discharge the $500 million 2.95% notes, due May 2023.

Our credit facilities, commercial paper notes and senior unsecured notes outstanding as of June 28, 2024, contain financial covenants and customary restrictive covenants. We were in compliance with all covenants as of June 28, 2024.

We paid dividends of $51 million and $104 million during the three and six months ended June 28, 2024, respectively, and $50 million and $100 million during the three and six months ended June 30, 2023, respectively.

Stock repurchases of Leidos common stock may be made on the open market or in privately negotiated transactions with third parties including through accelerated share repurchase agreements. Whether repurchases are made and the timing and actual number of shares repurchased depends on a variety of factors including price, corporate capital requirements, other market conditions and regulatory requirements. The repurchase program may be accelerated, suspended, delayed or discontinued at any time.

During the three and six months ended June 28, 2024, we made open market repurchases of our common stock for an aggregate purchase price of $100 million and $250 million, respectively, and $25 million during the six months ended June 30, 2023.There were no share repurchases for the three months ended June 30, 2023.

For the next 12 months, we anticipate that we will be able to meet our liquidity needs, including servicing our debt, through cash generated from operations, available cash balances, borrowings from our commercial paper program and, if needed, sales of accounts receivable and borrowings from our revolving credit facility.

Summary of Cash Flows

The following table summarizes cash flow information for the periods presented:

Net cash provided by operating activities increased $210 million during the three months ended June 28, 2024, when compared to the prior year quarter. The increase was primarily due to higher earnings and a favorable change in working capital.

Net cash provided by operating activities increased $371 million during the six months ended June 28, 2024, when compared to the prior year. The increase was primarily due to higher earnings and lower tax payments of $116 million mainly in connection with the Tax Cuts and Jobs Act provision requiring capitalization of research and development costs and a nonrecurring $62 million payment for payroll taxes related to the CARES Act in the prior year, partially offset by an unfavorable change in other working capital.

Net cash used in investing activities decreased $23 million and $50 million, respectively, for the three and six months ended June 28, 2024, when compared to the prior year quarter, primarily due to lower capital expenditures.

Net cash used in financing activities decreased $5 million for the three months ended June 28, 2024, when compared to the prior year quarter, primarily due to a decrease of $120 million in net payments made from debt activities, partially offset by a net increase of $114 million in stock repurchases.

Net cash used in financing activities increased $166 million for the six months ended June 28, 2024, when compared to the prior year. The increase was primarily due to a net increase of $225 million in open market share repurchases and $29 million increase in shares withheld for tax obligations, partially offset by a decrease of $91 million in net payments made from debt activities.