The company completed a business realignment during the quarter, resulting in the identification of new reportable segments: National Security and Digital, Health & Civil, Commercial & International, and Defense Systems. This realignment is expected to improve operational efficiency and strategic focus.

Net bookings for the quarter were $3.7 billion, compared to $3.0 billion in the prior year. This increase in bookings resulted in a total backlog of $36.571 billion, up from $35.086 billion at the end of the previous fiscal year.

Approximately 87% of total revenues were generated from contracts with the U.S. government. The company's performance is heavily influenced by U.S. government spending, particularly in national security, homeland security, and intelligence.

The effective tax rate increased to 23.1% compared to 20.8% in the prior year. This increase was primarily due to an increase in unrecognized tax benefits and a reduced benefit in federal research tax credits, partially offset by excess tax benefits related to employee stock-based payment transactions.

The company migrated and consolidated certain accounting and finance systems to create efficiencies. This resulted in updates to internal controls over financial reporting to align with these migrations and consolidations.

The company's credit facilities, commercial paper notes, and senior unsecured notes outstanding contain financial covenants and customary restrictive covenants. The company was in compliance with all covenants as of March 29, 2024.

There were no material changes to the risks described in Part I, Item 1A "Risk Factors" in our Annual Report on Form 10-K for the year ended December 29, 2023.

The company is routinely subject to investigations and reviews relating to compliance with various laws and regulations. Adverse findings could have a material effect on our business, financial position, results of operations and cash flows due to our reliance on government contracts.

International business increases our exposure to international markets and the associated international regulatory and geopolitical risks.

The National Security and Digital segment, a key area for Leidos, saw a 2.0% increase in revenues. The increase in operating income for the three months ended March 29, 2024, as compared to the three months ended March 31, 2023, was primarily attributable to a net increase in volumes on certain programs, partially offset by the completion of certain contracts.

The Health & Civil segment experienced a significant increase in both revenues (18.9%) and operating income (96.5%). This growth was primarily attributable to higher volumes in the managed health services business, ramp up on certain programs and program wins.

The Commercial & International segment experienced an increase in both revenues (4.1%) and operating income (161.5%). This growth was primarily attributable to a net increase in volumes driven by commercial product mix and improved cost control, partially offset by the completion of certain contracts.

The operating loss for the Corporate segment increased by 27.6%. This increase was primarily attributable to increased general and administrative expenses.

The operating income for the Defense Systems segment decreased by 8.7%. This decrease was primarily attributable to changes in program mix, partially offset by program wins.

As of March 29, 2024, we migrated and consolidated certain accounting and finance systems to create efficiencies. As a result of these changes, we updated certain internal controls over financial reporting to align with these migrations and consolidations.

National Security and Digital provides technology enabled services and mission software capabilities for defense and intelligence customers in the areas of cyber, logistics, security operations and decision analytics, as well as IT operations and digital transformation programs across all U.S. federal government customers.

Health & Civil provides services and solutions to federal and commercial customers in the areas of public health, care coordination, life and environmental sciences and transportation. Our core capabilities include health information management services, managed health services, systems and infrastructure modernization, and life sciences research and development.

Commercial & International provides technologically advanced services, solutions and products to commercial and international customers. Our offerings include IT modernization, software solutions, mission support and logistics, Command, Control, Computers, Communications, Intelligence, Surveillance and Reconnaissance ("C4ISR") technologies and services, cloud services, power grid engineering, energy modernization and security products and services.

The company repurchased 1,193,693 shares of common stock for an aggregate purchase price of $150 million during the quarter. This indicates management's confidence in the company's financial position and future prospects.

The company paid dividends of $53 million during the quarter, consistent with the prior year. This demonstrates a commitment to returning capital to shareholders.

The company made principal payments on its debt of $4 million during the quarter. The company has a commercial paper program in which it may issue short-term unsecured commercial paper notes.

The 10-Q filing does not explicitly mention any new or ongoing ESG initiatives. Further information may be available in other reports or disclosures.

Approximately 87% of total revenues were generated from contracts with the U.S. government. The company's performance is heavily influenced by U.S. government spending, particularly in national security, homeland security, and intelligence.

Congress avoided a government shutdown by passing two appropriations packages and the President's budget was released. These events provide some clarity on the near-term government spending environment.

The company is evaluating the potential impact of the Organization for Economic Cooperation and Development's (OECD) Pillar Two legislation, which establishes a new 15% global minimum tax framework. The legislation is effective for certain jurisdictions beginning in fiscal 2024.