Business Segments

9 Months Ended

Sep. 30, 2016

Segment Reporting [Abstract]

Business Segments

Business Segments

During the quarter ended September 30, 2016, the Company completed its acquisition of Lockheed Martin's IS&GS Business (see "Note 2–Acquisitions"). The acquired IS&GS Business was identified as a new operating and reportable segment.

In April 2016, the Company sold its design, build and heavy construction engineering business (see "Note 4–Divestitures"). Consequently, the reportable segment of Health and Engineering was renamed as Health and Infrastructure Sector.

At September 30, 3016, Leidos' reportable segments were: National Security Solutions ("NSS"), Health and Infrastructure Sector ("HIS"), Information Systems & Global Solutions ("IS&GS") and Corporate and Other.

The segment information for the periods presented was as follows:

	Three Months Ended						Nine Months Ended
	September 30, 2016			October 2, 2015			September 30, 2016			October 2, 2015
	(in millions)
Revenues:
National Security Solutions	$	921		$	878		$	2,734		$	2,619
Health and Infrastructure Sector	328			418			1,115			1,182
Information Systems & Global Solutions	620			—			620			—
Corporate and Other	(1		)	6			(1		)	4
Total revenues	$	1,868		$	1,302		$	4,468		$	3,805
Operating income (loss):
National Security Solutions	$	91		$	78		$	224		$	214
Operating income margin	9.9		%	8.9		%	8.2		%	8.2		%
Health and Infrastructure Sector	41			13			116			(1		)
Operating income (loss) margin	12.5		%	3.1		%	10.4		%	(0.1		)%
Information Systems & Global Solutions	26			—			26			—
Operating income margin	4.2		%	—			4.2		%	—
Corporate and Other	(57		)	3			(101		)	(17		)
Total operating income	$	101		$	94		$	265		$	196
Operating income margin	5.4		%	7.2		%	5.9		%	5.2		%

Asset information by segment is not a key measure of performance used by the chief operating decision maker, currently the chief executive officer. Other income (expense), interest income, interest expense and provision for income taxes, as reported in the condensed consolidated financial statements, are not part of operating income and are primarily recorded at the corporate level. Under U.S. Government Cost Accounting Standards, indirect costs including depreciation expense are collected in numerous indirect cost pools, which are then collectively allocated out to the Company’s reportable segments based on a representative causal or beneficial relationship of the costs in the pool to the costs in the base.