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Debt | 6 Months Ended
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Jul. 04, 2025
Debt Disclosure [Abstract] |
Debt | Note 6–Debt Our debt consisted of the following:
(in millions) | Stated interest rate |  | Effective interest rate |  | July 4, 2025 |  | January 3, 2025
Senior unsecured term loan: |  |  |  |  |  |  |
$1,000 million term loan, due March 2028 | 5.66 | % |  | 5.83 | % |  | $ | 950 |  |  | $ | 1,000 |
Senior unsecured notes: |  |  |  |  |  |  |
$500 million notes, due May 2025 | 3.63 | % |  | 3.76 | % |  | — |  |  | 500 |
$750 million notes, due May 2030 | 4.38 | % |  | 4.50 | % |  | 750 |  |  | 750 |
$1,000 million notes, due February 2031 | 2.30 | % |  | 2.38 | % |  | 1,000 |  |  | 1,000 |
$500 million notes, due March 2032 | 5.40 | % |  | 5.42 | % |  | 500 |  |  | — |
$250 million notes, due July 2032 | 7.13 | % |  | 7.43 | % |  | 250 |  |  | 250 |
$750 million notes, due March 2033 | 5.75 | % |  | 5.81 | % |  | 750 |  |  | 750 |
$300 million notes, due July 2033 | 5.50 | % |  | 5.88 | % |  | 161 |  |  | 161 |
$500 million notes, due March 2035 | 5.50 | % |  | 5.55 | % |  | 500 |  |  | — |
$300 million notes, due December 2040 | 5.95 | % |  | 6.03 | % |  | 218 |  |  | 218 |
Finance leases due on various dates through fiscal 2032 | Various |  | 1.84%-6.31% |  | 64 |  |  | 73 |
Less: unamortized debt discounts and deferred debt issuance costs |  |  |  |  | (39) |  |  | (32) |
Total long-term debt |  |  |  |  | 5,104 |  |  | 4,670 |
Less current portion |  |  |  |  | (119) |  |  | (618) |
Total long-term debt, net of current portion |  |  |  |  | $ | 4,985 |  |  | $ | 4,052 |
REVOLVING CREDIT FACILITY We have a $1.0 billion senior unsecured revolving facility (the “Revolving Facility”). The Revolving Facility will mature in March 2028 and is subject to an annual commitment fee rate of 0.125% on the unused credit availability and permits two additional one-year extensions subject to lender consent. Principal payments are made quarterly, with the majority of the principal due at maturity. As of July 4, 2025, and January 3, 2025, there were no borrowings outstanding under the Revolving Facility. SENIOR NOTES On February 20, 2025, we issued and sold $500 million senior notes maturing in March 2032 (the "2032 Notes") and $500 million senior notes maturing in March 2035 (the "2035 Notes", and together with the 2032 Notes, the "Notes"). The Notes are senior unsecured obligations issued by Leidos, Inc. and guaranteed by Leidos Holdings, Inc. The annual interest rates for the 2032 Notes and the 2035 Notes are 5.40% and 5.50%, respectively, and the interest is payable on a semi-annual basis. In connection with the issuance of the Notes, $10 million of debt issuance costs and discount were recognized, which were recorded as an offset against the carrying value of debt. The proceeds from the Notes were used to retire the $500 million senior unsecured notes due May 2025 and repurchase $500 million outstanding shares of common stock in connection with the Accelerated Share Repurchase ("ASR") agreement (see "Note 8–Earnings Per Share"). COMMERCIAL PAPER We have a commercial paper program in which the Company may issue short-term unsecured commercial paper notes ("Commercial Paper Notes") not to exceed $1.0 billion. The proceeds will be used for general corporate purposes, including working capital, capital expenditures, acquisitions and share repurchases. The Commercial Paper Notes are issued in minimum denominations of $0.25 million and have maturities of up to 397 days from the date of issuance. The Commercial Paper Notes either bear a stated or floating interest rate, if interest bearing, or will be sold at a discount from the face amount. As of July 4, 2025, and January 3, 2025, we did not have any Commercial Paper Notes outstanding. COVENANTS The senior unsecured term loan, senior unsecured notes and Revolving Facility are fully and unconditionally guaranteed and contain certain customary restrictive covenants, including among other things, restrictions on our ability to create liens and enter into sale and leaseback transactions under certain circumstances. The financial covenants in the Revolving Facility and the senior unsecured term loan require that we maintain, as of the last day of each fiscal quarter, a ratio of adjusted consolidated total debt to consolidated EBITDA of not more than 3.75 to 1.00, subject to increases to 4.50 to 1.00 for four fiscal quarters following a material acquisition, and a ratio of EBITDA to consolidated interest expense of not less than 3.50 to 1.00. We were in compliance with all financial covenants as of July 4, 2025.

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