Leidos Holdings, Inc. (Exact Name of Registrant As Specified in Its Charter)
Total Page：16
File Type：pdf, Size：1020Kb
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended January 1, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 001-33072 Leidos Holdings, Inc. (Exact name of registrant as specified in its charter) Delaware 20-3562868 (State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.) 1750 Presidents Street, Reston, Virginia 20190 (Address of principal executive offices) (Zip Code) (571) 526-6000 (Registrant's telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of each class Trading symbol(s) Name of each exchange on which registered Common stock, par value $.0001 per share LDOS New York Stock Exchange Securities registered pursuant to Section 12(g) of the Act: None Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ☒ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x As of July 3, 2020, which was the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of Leidos Holdings, Inc. common stock (based upon the closing price of the stock on the New York Stock Exchange) held by non-affiliates of the registrant was $13,224,279,479. The number of shares issued and outstanding of the registrant’s class of common stock as of February 15, 2021 was 141,894,753 shares ($.0001 par value per share). DOCUMENTS INCORPORATED BY REFERENCE Portions of Leidos Holdings, Inc.'s definitive Proxy Statement for the 2021 Annual Meeting of Stockholders ("2021 Proxy Statement") are incorporated by reference in Part III of this Annual Report on Form 10-K. LEIDOS HOLDINGS, INC. FORM 10-K TABLE OF CONTENTS Page Part I Item 1. Business 3 Item 1A. Risk Factors 15 Item 1B. Unresolved Staff Comments 35 Item 2. Properties 35 Item 3. Legal Proceedings 36 Item 4. Mine Safety Disclosures 36 Executive Officers of the Registrant 36 Part II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer 38 Purchases of Equity Securities Item 6. Selected Financial Data 39 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 39 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 54 Item 8. Financial Statements and Supplementary Data 56 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 113 Item 9A. Controls and Procedures 113 Item 9B. Other Information 115 Part III Item 10. Directors, Executive Officers and Corporate Governance 116 Item 11. Executive Compensation 116 Item 12. Security Ownership of Certain Beneficial Owners and Management and Related 116 Stockholder Matters Item 13. Certain Relationships and Related Transactions, and Director Independence 117 Item 14. Principal Accounting Fees and Services 117 Part IV Item 15. Exhibits, Financial Statement Schedules 118 Item 16. Form 10-K Summary 123 Signatures 124 [THIS PAGE INTENTIONALLY LEFT BLANK] LEIDOS HOLDINGS, INC. FORM 10-K Forward-Looking Statements This Annual Report on Form 10-K contains forward-looking statements, within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on our management’s belief and assumptions about the future in light of information currently available to our management. In some cases, you can identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "predicts," "potential," "continue," and similar words or phrases or the negative of these words or phrases. These statements relate to future events or our future financial performance, and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. Although we believe that the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee future results, levels of activity, performance or achievements. There are a number of important factors that could cause our actual results to differ materially from those results anticipated by our forward-looking statements, which include, but are not limited to: • the impact of the coronavirus pandemic ("COVID-19") or future epidemics on our business, including the potential for facility closures, re-evaluation of U.S. government spending levels and priorities, delay of new contract awards, our ability to recover costs under contracts and insurance challenges; • developments in the U.S. government defense and non-defense budgets, including budget reductions, sequestration, implementation of spending limits or changes in budgetary priorities, or delays in the U.S. government budget process or approval of raising the debt ceiling; • delays in the U.S. government contract procurement process or the award of contracts and delays or loss of contracts as a result of competitor protests; • changes in U.S. government procurement rules, regulations and practices; • our compliance with various U.S. government and other government procurement rules and regulations; • governmental reviews, audits and investigations of our company; • our ability to effectively compete and win contracts with the U.S. government and other customers; • our reliance on information technology spending by hospitals/healthcare organizations; • our reliance on infrastructure investments by industrial and natural resources organizations; • energy efficiency and alternative energy sourcing investments; • investments by U.S. government and commercial organizations in environmental impact and remediation projects; • our ability to attract, train and retain skilled employees, including our management team, and to obtain security clearances for our employees; • our ability to accurately estimate costs associated with our firm-fixed-price ("FFP") contracts and other contracts; • resolution of legal and other disputes with our customers and others or legal or regulatory compliance issues; • cybersecurity, data security or other security threats, system failures or other disruptions of our business; • our compliance with international, federal, state and local laws and regulations regarding privacy, data security, protection, storage, retention, transfer and disposal, technology protection and personal information; • the damage and disruption to our business resulting from natural disasters; • our ability to effectively acquire businesses and make investments; • our ability to maintain relationships with prime contractors, subcontractors and joint venture partners; • our ability to manage performance and other risks related to customer contracts; Leidos Holdings, Inc. Annual Report - 1 LEIDOS HOLDINGS, INC. FORM 10-K • the failure of our inspection or detection systems to detect threats; • the adequacy of our insurance programs, customer indemnifications or other liability protections designed to protect us from significant product or other liability claims; • our ability to manage risks associated with our international business; • exposure to lawsuits and contingencies associated with Lockheed Martin’s Information Systems & Global Solutions business;