Acquisitions Acquisitions (Tables)

9 Months Ended

Oct. 02, 2020

Business Combinations [Abstract]

Preliminary Purchase Consideration

The preliminary purchase consideration for the acquisition of the SD&A Businesses was as follows (in millions):

Cash paid at closing	$	1,015
Preliminary working capital adjustments	20
Preliminary purchase price	$	1,035

Schedule of preliminary fair values of the assets acquired and liabilities assumed

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

Cash	$	30
Receivables	134
Inventory	104
Other current assets	23
Operating lease right-of-use assets	35
Property, plant and equipment	35
Intangible assets	430
Accounts payable and accrued liabilities	(124)
Accrued payroll and employee benefits	(8)
Operating lease liabilities	(32)
Deferred tax liabilities	(40)
Other long-term liabilities	(14)
Total identifiable net assets acquired	573
Goodwill	462
Purchase price	$	1,035

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

Cash	$	18
Receivables	159
Inventory	47
Other current assets	22
Operating lease right-of-use assets	25
Property, plant and equipment	178
Intangible assets	528
Other assets	8
Accounts payable and accrued liabilities	(48)
Accrued payroll and employee benefits	(29)
Operating lease liabilities	(20)
Other long-term liabilities	(4)
Total identifiable net assets acquired	884
Goodwill	776
Purchase price	$	1,660

Schedule of preliminary fair values of intangible assets acquired and related weighted average amortization periods

The following table summarizes the preliminary fair value of intangible assets acquired at the Transaction Date and the related weighted average amortization period:

	Weighted average amortization period	Fair value
	(in years)	(in millions)
Programs	13	$	150
Customer relationships	10	91
Technology	10	91
In-process research and development ("IPR&D")(1)		98
Total	11	$	430

(1) IPR&D assets are indefinite-lived at the acquisition date until placed into service, at which time such assets will be reclassified to a finite-lived amortizable intangible asset.

Schedule of preliminary fair values of intangible assets acquired and related weighted average amortization periods

The following table summarizes the preliminary fair value of intangible assets acquired at the Acquisition Date and the related weighted average amortization period:

	Weighted average amortization period	Fair value
	(in years)	(in millions)
Programs	13	$	485
Backlog	1	32
Technology	11	11
Total	12	$	528

Acquisition expenses incurred

The following expenses were incurred related to the acquisitions of Dynetics and the SD&A Businesses:

	Three Months Ended		Nine Months Ended
	October 2, 2020		October 2, 2020
	(in millions)
Acquisition costs	$	—	$	23
Integration costs	4		7
Total acquisition and integration costs	$	4	$	30

Acquisition pro forma information

The pro forma information is not intended to reflect the actual results of operations that would have occurred if the acquisitions had been completed on December 29, 2018, nor is it intended to be an indication of future operating results.

	Three Months Ended				Nine Months Ended
	October 2, 2020		September 27, 2019		October 2, 2020		September 27, 2019
	(in millions, except per share amounts)
Revenues	$	3,242	$	3,125	$	9,301	$	8,984
Net income	161		151		423		401
Net income attributable to Leidos common stockholders	161		150		422		398
Earnings per share:
Basic	$	1.13	$	1.05	$	2.97	$	2.76
Diluted	1.12		1.03		2.93		2.73