Leidos Holdings, Inc.LDOS
Leidos Holdings, Inc. Leases Disclosure
Note 10—Leases
LESSEE
ROU assets and lease liabilities consisted of the following:
| (in millions) | Balance sheet line item | January 2, 2026 | January 3, 2025 | |||||||||||||||||
| ROU assets: | ||||||||||||||||||||
| Finance leases | $ | 50 | $ | 69 | ||||||||||||||||
| Operating leases | Operating lease right-of-use assets, net | 526 | 560 | |||||||||||||||||
| $ | 576 | $ | 629 | |||||||||||||||||
| Current lease liabilities: | ||||||||||||||||||||
| Finance leases | $ | 20 | $ | 19 | ||||||||||||||||
| Operating leases | 107 | 123 | ||||||||||||||||||
| $ | 127 | $ | 142 | |||||||||||||||||
| Non-current lease liabilities: | ||||||||||||||||||||
| Finance leases | $ | 34 | $ | 54 | ||||||||||||||||
| Operating leases | Operating lease liabilities | 587 | 621 | |||||||||||||||||
| $ | 621 | $ | 675 | |||||||||||||||||
During fiscal 2025 and 2024, we reduced our leased space by exiting and consolidating underutilized buildings as part of an ongoing facility rationalization effort. We used discounted cash flow models to estimate the fair values of the affected assets and as a result, we recorded impairments of ROU and other assets in the amount of $5 million and $11 million for fiscal 2025 and 2024, respectively. The impairment charges were recorded across our reportable segments.
In fiscal 2024, we took occupancy of our newly constructed facility in San Diego, CA. As a result we recorded $117 million of ROU assets and $169 million of lease liabilities.
Total lease cost for the periods presented consisted of the following:
| Year Ended | ||||||||||||||||||||
| (in millions) | January 2, 2026 | January 3, 2025 | December 29, 2023 | |||||||||||||||||
| Finance lease cost: | ||||||||||||||||||||
| Amortization of ROU assets | $ | 20 | $ | 20 | $ | 18 | ||||||||||||||
| Interest on lease liabilities | 3 | 4 | 4 | |||||||||||||||||
| 23 | 24 | 22 | ||||||||||||||||||
Operating lease cost(1) | 145 | 143 | 148 | |||||||||||||||||
| Variable lease cost | 35 | 35 | 35 | |||||||||||||||||
| Short-term lease cost | 2 | 4 | 2 | |||||||||||||||||
| Less: Sublease income | (3) | — | — | |||||||||||||||||
| Total lease cost | $ | 202 | $ | 206 | $ | 207 | ||||||||||||||
(1)Includes ROU lease expense of $115 million, $119 million and $124 million for fiscal 2025, 2024 and 2023, respectively.
Lease costs and sublease income are included in “Cost of revenues” and “Selling, general and administrative expenses” within the consolidated statements of operations.
Lease terms and discount rates related to leases were as follows:
| Year Ended | ||||||||||||||||||||
| January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||||||||||||||
| Weighted-average remaining lease term (in years): | ||||||||||||||||||||
| Finance leases | 3.9 | 4.4 | 5.2 | |||||||||||||||||
| Operating leases | 9.5 | 9.9 | 7.3 | |||||||||||||||||
| Weighted-average discount rate: | ||||||||||||||||||||
| Finance leases | 4.3 | % | 4.7 | % | 4.8 | % | ||||||||||||||
| Operating leases | 4.6 | % | 4.5 | % | 3.7 | % | ||||||||||||||
Other information related to leases was as follows:
| Year Ended | ||||||||||||||||||||
| (in millions) | January 2, 2026 | January 3, 2025 | December 29, 2023 | |||||||||||||||||
| Cash paid for amounts included in measurement of lease liabilities: | ||||||||||||||||||||
| Operating cash related to finance leases | $ | 3 | $ | 4 | $ | 4 | ||||||||||||||
| Operating cash related to operating leases | 165 | 163 | 167 | |||||||||||||||||
| Financing cash flows related to finance leases | 19 | 18 | 17 | |||||||||||||||||
| ROU assets obtained in exchange for lease liabilities: | ||||||||||||||||||||
| Finance lease liabilities | $ | — | $ | — | $ | 63 | ||||||||||||||
| Operating lease liabilities | 69 | 236 | 97 | |||||||||||||||||
Future minimum lease commitments of our finance and operating leases on an undiscounted basis, reconciled to the respective lease liability at January 2, 2026, were as follows:
Fiscal Year Ending (in millions) | Finance lease commitments | Operating lease commitments | ||||||||||||
| 2026 | $ | 22 | $ | 134 | ||||||||||
| 2027 | 15 | 106 | ||||||||||||
| 2028 | 5 | 102 | ||||||||||||
| 2029 | 5 | 88 | ||||||||||||
| 2030 | 5 | 80 | ||||||||||||
| 2031 and thereafter | 6 | 376 | ||||||||||||
| Total undiscounted cash flows | 58 | 886 | ||||||||||||
| Less: imputed interest | (4) | (192) | ||||||||||||
| Lease liability as of January 2, 2026 | $ | 54 | $ | 694 | ||||||||||
LESSOR
As of January 2, 2026, and January 3, 2025, we had a total net investment in sales-type leases, which relates to lease payment receivables, of $79 million and $94 million, respectively. The current and non-current portions of net investment in sales-type leases are included within “Other current assets” and “Other long-term assets”, respectively, on the consolidated balance sheets.
The components of lease income were as follows:
| Year Ended | ||||||||||||||||||||||||||
| (in millions) | Statement of operations line item | January 2, 2026 | January 3, 2025 | December 29, 2023 | ||||||||||||||||||||||
| Selling price at lease commencement | Revenues | $ | 44 | $ | 55 | $ | 51 | |||||||||||||||||||
| Cost of underlying asset | Cost of revenues | (33) | (40) | (41) | ||||||||||||||||||||||
| Operating income | 11 | 15 | 10 | |||||||||||||||||||||||
| Interest income on lease receivables | Revenues | 2 | 5 | 9 | ||||||||||||||||||||||
| 13 | 20 | 19 | ||||||||||||||||||||||||
| Revenues | 21 | 26 | 39 | |||||||||||||||||||||||
| Total lease income | $ | 34 | $ | 46 | $ | 58 | ||||||||||||||||||||
As of January 2, 2026, undiscounted cash flows for sales-type and operating leases for the next five years are as follows:
Fiscal Year Ending (in millions) | Sales-type leases | Operating-type leases | |||||||||
| 2026 | $ | 43 | $ | 2 | |||||||
| 2027 | 27 | 1 | |||||||||
| 2028 | 10 | 1 | |||||||||
| 2029 | 1 | — | |||||||||
| Total undiscounted cash flows | $ | 81 | $ | 4 | |||||||
| Present value of lease payments as lease receivables | 79 | ||||||||||
| Difference between undiscounted cash flows and discounted cash flows | $ | 2 | |||||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2026 | Feb 17, 2026 | Showing above |
| 2025 | Feb 11, 2025 | |
| 2023 | Feb 13, 2024 | |
| 2022 | Feb 14, 2023 | |
| 2021 | Feb 23, 2021 | |
| 2020 | Feb 18, 2020 | |
| 2018 | Feb 19, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.