Acquisitions (Tables)

3 Months Ended

Mar. 31, 2017

The preliminary 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
Preliminary working capital adjustments	56
Preliminary purchase price	$	2,994

⁽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⁾ The fair value of replacement equity-based awards attributable to pre-Merger service was recorded as part of the consideration transferred in the Merger.

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



	Three Months Ended
	March 31, 2017		April 1, 2016
	(in millions)
Acquisition costs	$	1	$	6
Integration costs	18		3
Total acquisition and integration costs	$	19	$	9

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

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



Cash	$	25
Receivables	943
Inventory, prepaid expenses and other current assets	73
Property, plant and equipment	114
Deferred tax assets	12
Intangible assets	1,650
Other assets	104
Accounts payable	(286		)
Accrued liabilities	(446		)
Accrued payroll and employee benefits	(190		)
Long-term debt, current portion	(23		)
Deferred tax liabilities	(556		)
Long-term debt, net of current portion	(1,780		)
Other long-term liabilities	(50		)
Total identifiable net liabilities assumed	(410		)
Non-controlling interest	(8		)
Goodwill	3,412
Preliminary purchase price	$	2,994

Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination

The following table summarizes the preliminary 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)
Programs and contract intangibles⁽¹⁾	10.0	$	1,450
Backlog	1.4	200
Total	9.0	$	1,650

⁽¹⁾ The weighted average amortization period is estimated based on the projected economic benefits associated with these assets. Refer to "Note 7–Intangible Assets" for additional information.

Business Acquisition, Pro Forma Information

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 3, 2015, nor is it intended to be an indication of future operating results.



	Three Months Ended
(unaudited)	April 1, 2016
	(in millions, except per share amounts)
Revenues	$	2,637
Income from continuing operations	52
Income from continuing operations attributable to Leidos common stockholders	50
Earnings per share:
Basic	$	0.34
Diluted	0.33