Leidos Holdings, Inc.

OVERVIEW OF LIQUIDITY

As of July 3, 2026, we had $748 million in cash and cash equivalents. We have a senior unsecured revolving credit facility which can provide up to $1.5 billion in additional borrowing, if required, and a commercial paper program under which we may issue short-term unsecured commercial paper notes ("Commercial Paper Notes") not to exceed $1.5 billion, with maturities of up to 397 days from the date of issuance. As of July 3, 2026, and January 2, 2026, there were no borrowings outstanding under the revolving credit facility and no Commercial Paper Notes outstanding.

We had outstanding debt of $6.0 billion and $4.6 billion at July 3, 2026, and January 2, 2026, respectively. In March 2026, we issued and sold $600 million 4.10% and $800 million 5.00% senior unsecured notes maturing in March 2029 and March 2036,

respectively. The annual interest rate is payable on a semi-annual basis. The proceeds from the notes were used to fund a portion of the consideration payable in connection with the acquisition of Entrust and for general corporate purposes.

We made $5 million and $10 million principal payments on our long-term debt during the three and six months ended July 3, 2026, respectively, and $30 million and $559 million during the three and six months July 4, 2025, respectively. The activity for the six months ended July 4, 2025, included a $500 million payment to discharge the $500 million notes due May 2025.

Our senior unsecured revolving credit facility, Commercial Paper Notes, senior unsecured term loan and notes outstanding as of July 3, 2026, contain financial covenants and customary restrictive covenants. We were in compliance with all financial covenants as of July 3, 2026.

We paid dividends of $55 million and $110 million during the three and six months ended July 3, 2026, respectively, and $52 million and $105 million for the three and six months ended July 4, 2025, respectively.

We may from time to time seek to retire or purchase our outstanding debt through cash purchases in the open market, privately negotiated transactions or otherwise. Such repurchases, if any, will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved may be material.

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.

We made open market repurchases of our common stock for an aggregate purchase price of $66 million and $266 million during the three and six months ended July 3, 2026, respectively. During the three and six months ended July 4, 2025, we did not make any open market repurchases; however, we repurchased $500 million of shares under an accelerated share repurchase agreement during the six months ended July 4, 2025.

During the three and six months ended July 3, 2026, we invested $12 million and $18 million, respectively, in an investment fund as a limited partner. In connection with this investment, we have committed to invest an additional $82 million over the next five years. We expect to fund this investment with cash on hand and cash generated through our operations.

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 $307 million and $550 million for the three and six months ended July 3, 2026, respectively when compared to the prior year. The increases were primarily due to favorable changes in working capital, excess tax payments made in the prior year and the timing of payroll and employee benefit payments.

Net cash used in investing activities decreased $276 million for the three months ended July 3, 2026, when compared to the prior year quarter primarily due to $285 million of net cash paid related to the acquisition of Kudu Dynamics in the prior year quarter.

Net cash used in investing activities increased $2,061 million for the six months ended July 3, 2026, when compared to the prior year. The increase was primarily due to $2,338 million of cash paid in connection with the acquisition of Entrust, net of cash acquired.

Net cash used in financing activities increased $340 million for the three months ended July 3, 2026, when compared to the prior year quarter. The increase was primarily due to a $300 million repayment on our commercial paper program.

Net cash provided by financing activities increased $1,163 million for the six months ended July 3, 2026, when compared to the prior year. The increase was primarily due to a net increase of $941 million in cash inflows from debt activity, consisting of proceeds from debt issuances and payments for borrowings and debt issuance costs. The increase was also related to $234 million net decrease in stock repurchases, primarily attributable to the prior year accelerated share repurchase activities.