10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________

Form 10-Q

_________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 28, 2022

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	Exact Name of Registrant as Specified in its Charter, Address of Principal Executive Offices and Telephone Number	State or other jurisdiction of incorporation or organization	I.R.S. Employer Identification No.
001-35832	Science Applications International Corporation	Delaware	46-1932921

12010 Sunset Hills Road, Reston, VA 20190

703-676-4300

_________________________________________________________

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	SAIC	New York Stock Exchange

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 ☒    No  ☐            

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  ☒ No  ☐            

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒        

The number of shares issued and outstanding of the registrant’s common stock as of November 18, 2022 was as follows:

54,629,268 shares of common stock ($.0001 par value per share)

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

FORM 10-Q

TABLE OF CONTENTS

		Page
Part I	Financial Information
Item 1	Financial Statements	1
	Condensed and Consolidated Statements of Income	1
	Condensed and Consolidated Statements of Comprehensive Income	2
	Condensed and Consolidated Balance Sheets	3
	Condensed and Consolidated Statements of Equity	4
	Condensed and Consolidated Statements of Cash Flows	5
	Notes to Condensed and Consolidated Financial Statements	6
	Note 1—Business Overview and Summary of Significant Accounting Policies	6
	Note 2—Earnings Per Share, Share Repurchases and Dividends	8
	Note 3—Revenues	9
	Note 4—Acquisitions	12
	Note 5—Goodwill and Intangible Assets	12
	Note 6—Income Taxes	13
	Note 7—Debt Obligations	14
	Note 8—Derivative Instruments Designated as Cash Flow Hedges	15
	Note 9—Changes in Accumulated Other Comprehensive Income (Loss) by Component	17
	Note 10—Sales of Receivables	18
	Note 11—Legal Proceedings and Other Commitments and Contingencies	18
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4	Controls and Procedures	27
Part II	Other Information	29
Item 1	Legal Proceedings	29
Item 1A	Risk Factors	29
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3	Defaults Upon Senior Securities	29
Item 4	Mine Safety Disclosures	29
Item 5	Other Information	29
Item 6	Exhibits	30
	Signatures	31

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PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions, except per share amounts)
Revenues	$	1,909	$	1,898	$	5,736	$	5,612
Cost of revenues	1,688		1,685		5,070		4,950
Selling, general and administrative expenses	87		87		272		252
Acquisition and integration costs	1		12		11		36
Other operating income	—		—		—		(3)
Operating income	133		114		383		377
Interest expense	30		26		87		79
Other (income) expense, net	3		—		6		(3)
Income before income taxes	100		88		290		301
Provision for income taxes	(20)		(17)		(62)		(66)
Net income	80		71		228		235
Net income attributable to non-controlling interest	—		—		2		1
Net income attributable to common stockholders	$	80	$	71	$	226	$	234
Earnings per share:
Basic	$	1.45	$	1.24	$	4.06	$	4.05
Diluted	$	1.45	$	1.22	$	4.04	$	4.01

 See accompanying notes to condensed and consolidated financial statements.

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Table of Contents

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Net income	$	80	$	71	$	228	$	235
Other comprehensive income, net of tax:
Net unrealized gain on derivative instruments	29		17		63		32
Total other comprehensive income, net of tax	29		17		63		32
Comprehensive income	$	109	$	88	$	291	$	267
Comprehensive income attributable to non-controlling interest	—		—		2		1
Comprehensive income attributable to common stockholders	$	109	$	88	$	289	$	266

See accompanying notes to condensed and consolidated financial statements.

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Table of Contents

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	October 28, 2022		January 28, 2022
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	53	$	106
Receivables, net	1,059		1,015
Inventory, prepaid expenses and other current assets	135		142
Total current assets	1,247		1,263
Goodwill	2,911		2,913
Intangible assets, net	1,040		1,132
Property, plant, and equipment (net of accumulated depreciation of $194 million and $182 million at October 28, 2022 and January 28, 2022, respectively)	95		100
Operating lease right of use assets	166		209
Other assets	169		129
Total assets	$	5,628	$	5,746
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	819	$	840
Accrued payroll and employee benefits	396		364
Long-term debt, current portion	15		148
Total current liabilities	1,230		1,352
Long-term debt, net of current portion	2,358		2,370
Operating lease liabilities	155		192
Deferred income taxes	—		43
Other long-term liabilities	189		160
Commitments and contingencies (Note 11)
Equity:
Common stock, $0.0001 par value, 1 billion shares authorized, 55 million and 56 million shares issued and outstanding as of October 28, 2022 and January 28, 2022, respectively	—		—
Additional paid-in capital	679		838
Retained earnings	981		818
Accumulated other comprehensive income (loss)	26		(37)
Total common stockholders' equity	1,686		1,619
Non-controlling interest	10		10
Total stockholders' equity	1,696		1,629
Total liabilities and stockholders' equity	$	5,628	$	5,746

See accompanying notes to condensed and consolidated financial statements.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

	Shares of common stock	Additional paid-in capital		Retained earnings		Accumulated other comprehensive income (loss)		Non-controlling interest		Total
	(in millions)
Balance at July 29, 2022	55	$	723	$	923	$	(3)	$	10	$	1,653
Net income	—	—		80		—		—		80
Issuances of stock	—	5		—		—		—		5
Other comprehensive income, net of tax	—	—		—		29		—		29
Cash dividends of $0.37 per share	—	—		(22)		—		—		(22)
Stock-based compensation	—	11		—		—		—		11
Repurchases of stock	—	(60)		—		—		—		(60)
Distributions to non-controlling interest	—	—		—		—		—		—
Balance at October 28, 2022	55	$	679	$	981	$	26	$	10	$	1,696
Balance at January 28, 2022	56	$	838	$	818	$	(37)	$	10	$	1,629
Net income	—	—		226		—		2		228
Issuances of stock	1	13		—		—		—		13
Other comprehensive income, net of tax	—	—		—		63		—		63
Cash dividends of $1.11 per share	—	—		(63)		—		—		(63)
Stock-based compensation	—	19		—		—		—		19
Repurchases of stock	(2)	(191)		—		—		—		(191)
Distributions to non-controlling interest	—	—		—		—		(2)		(2)
Balance at October 28, 2022	55	$	679	$	981	$	26	$	10	$	1,696
Balance at July 30, 2021	58	$	945	$	747	$	(74)	$	10	$	1,628
Net income	—	—		71		—		—		71
Issuances of stock	1	4		—		—		—		4
Other comprehensive income, net of tax	—	—		—		17		—		17
Cash dividends of $0.37 per share	—	—		(22)		—		—		(22)
Stock-based compensation	—	11		—		—		—		11
Repurchases of stock	(2)	(64)		—		—		—		(64)
Distributions to non-controlling interest	—	—		—		—		—		—
Balance at October 29, 2021	57	$	896	$	796	$	(57)	$	10	$	1,645
Balance at January 29, 2021	58	$	1,004	$	627	$	(89)	$	10	$	1,552
Net income	—	—		234		—		1		235
Issuances of stock	1	12		—		—		—		12
Other comprehensive income, net of tax	—	—		—		32		—		32
Cash dividends of $1.11 per share	—	—		(65)		—		—		(65)
Stock-based compensation	—	21		—		—		—		21
Repurchases of stock	(2)	(141)		—		—		—		(141)
Distributions to non-controlling interest	—	—		—		—		(1)		(1)
Balance at October 29, 2021	57	$	896	$	796	$	(57)	$	10	$	1,645

See accompanying notes to condensed and consolidated financial statements.

-4-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Nine Months Ended
	October 28, 2022		October 29, 2021
	(in millions)
Cash flows from operating activities:
Net income	$	228	$	235
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	118		123
Amortization of off-market customer contracts	(12)		(30)
Amortization of debt issuance costs	8		6
Deferred income taxes	(29)		41
Stock-based compensation expense	35		35
Gain on divestitures	—		(2)
Impairment of assets	—		10
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of acquisitions:
Receivables	(44)		(123)
Inventory, prepaid expenses and other current assets	7		28
Other assets	5		(8)
Accounts payable and accrued liabilities	(21)		47
Accrued payroll and employee benefits	32		45
Income taxes payable	59		—
Operating lease assets and liabilities, net	(1)		4
Other long-term liabilities	2		4
Net cash provided by operating activities	387		415
Cash flows from investing activities:
Expenditures for property, plant, and equipment	(18)		(27)
Purchases of marketable securities	(5)		(5)
Sales of marketable securities	3		4
Cash paid for acquisitions, net of cash acquired	—		(247)
Proceeds from divestitures	—		8
Other	(3)		(5)
Net cash used in investing activities	(23)		(272)
Cash flows from financing activities:
Dividend payments to stockholders	(63)		(65)
Principal payments on borrowings	(780)		(84)
Issuances of stock	12		12
Stock repurchased and retired or withheld for taxes on equity awards	(208)		(154)
Proceeds from borrowings	630		116
Debt issuance costs	(6)		—
Distributions to non-controlling interest	(2)		(1)
Net cash used in financing activities	(417)		(176)
Net decrease in cash, cash equivalents and restricted cash	(53)		(33)
Cash, cash equivalents and restricted cash at beginning of period	115		190
Cash, cash equivalents and restricted cash at end of period	$	62	$	157

 See accompanying notes to condensed and consolidated financial statements.

-5-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1—Business Overview and Summary of Significant Accounting Policies:

Overview

Science Applications International Corporation (collectively, with its consolidated subsidiaries, the “Company”) is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S. government. The Company provides these services for large, complex projects with a targeted emphasis on higher-end, differentiated technology services and solutions that accelerate and transform secure and resilient digital environments through system development, modernization, integration, and sustainment to drive enterprise and mission outcomes.

The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. Each of the Company’s two customer facing operating sectors is focused on providing both (1) growth and technology accelerating solutions and (2) core IT service offerings to one or more agencies of the U.S. federal government. Growth and technology accelerating solutions include the delivery of secure cloud modernization, outcome based enterprise IT as-a-service, and the integration, production and modernization of defense systems. Core IT services include systems engineering, the operation and maintenance of existing IT systems and networks, and logistics and supply chain solutions.

During the second quarter of fiscal 2022, the Company completed the acquisition of Halfaker and Associates, LLC (Halfaker), a mission focused, pure-play health IT company, growing the Company's digital transformation portfolio. Additionally, the Company acquired Koverse, a software company that provides a data management platform enabling artificial intelligence and machine learning on complex sensitive data.

Principles of Consolidation and Basis of Presentation

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. The financial statements are unaudited, but in the opinion of management include all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended January 28, 2022.

Non-controlling Interest. The Company holds a 50.1% majority interest in Forfeiture Support Associates J.V. (FSA). The results of operations of FSA are included in the Company's condensed and consolidated statements of income and comprehensive income and statements of cash flows. The non-controlling interest reported on the condensed and consolidated balance sheets represents the portion of FSA's equity that is attributable to the non-controlling interest.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates.

-6-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Reporting Periods

The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2023 began on January 29, 2022 and ends on February 3, 2023, while fiscal 2022 began on January 30, 2021 and ended on January 28, 2022.

Operating Cycle

The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts.

Derivative Instruments Designated as Cash Flow Hedges

Derivative instruments are recorded on the condensed and consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions.

The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges.

Marketable Securities

Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1). As of October 28, 2022 and January 28, 2022, the fair value of our investments totaled $26 million and $28 million, respectively, and are included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed and consolidated balance sheets for the periods presented:

	October 28, 2022		January 28, 2022
	(in millions)
Cash and cash equivalents	$	53	$	106
Restricted cash included in inventory, prepaid expenses and other current assets	5		5
Restricted cash included in other assets	4		4
Cash, cash equivalents and restricted cash	$	62	$	115

Acquisition and Integration Costs

Acquisition-related costs that are not part of the purchase price consideration are generally expensed as incurred, except for certain costs that are deferred in connection with the issuance of debt. These costs typically include transaction-related costs, such as finder’s fees, legal, accounting, and other professional costs. Integration-related costs represent costs directly related to combining the Company and its acquired businesses. Integration-related costs typically include strategic consulting services, facility consolidations, employee-related costs, such as retention and severance, costs to integrate information technology infrastructure, enterprise planning systems, processes, and other non-recurring integration-related costs. Acquisition and integration costs are presented together as acquisition and integration costs on the condensed and consolidated statements of income.

-7-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The amounts recognized in acquisition and integration costs on the condensed and consolidated statements of income are as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Acquisition(1)	$	(1)	$	—	$	(2)	$	3
Integration(2)	2		12		13		33
Total acquisition and integration costs	$	1	$	12	$	11	$	36

(1)    Acquisition expenses for the three and nine months ended October 28, 2022 reflects amounts recognized to reduce the fair value of the Koverse earnout liability. Acquisition expenses for the nine months ended October 29, 2021 are related to the acquisitions of Halfaker and Koverse. See Note 4 for additional information related to the acquisitions.

(2)    Integration expenses for the nine months ended October 29, 2021 include $10 million for the impairment of assets.

Restructuring

During the three and nine months ended October 28, 2022, the Company incurred $5 million and $7 million, respectively, of restructuring costs related to the consolidation of certain facilities and other costs associated with the optimization of business processes. These costs are presented within selling, general and administrative expenses in the condensed and consolidated statements of income.

Accounting Standards Updates

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50), which requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. These amendments are effective for fiscal years beginning after December 15, 2022, except for the requirement to provide rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured at the acquisition date in accordance with Topic 606 as if the acquirer had originated the contracts. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and must be applied prospectively. Early adoption is permitted. The Company adopted the requirements of ASU 2021-08 on a prospective basis effective the first day of fiscal 2023.

Note 2—Earnings Per Share, Share Repurchases and Dividends:

Earnings Per Share (EPS)

Basic EPS is computed by dividing net income attributable to common stockholders by the basic weighted-average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards.

-8-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The following table provides a reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

	Three Months Ended		Nine Months Ended
	October 28, 2022	October 29, 2021	October 28, 2022	October 29, 2021
	(in millions)
Basic weighted-average number of shares outstanding	55.0	57.5	55.6	57.8
Dilutive common share equivalents - stock options and other stock-based awards	0.5	0.5	0.4	0.6
Diluted weighted-average number of shares outstanding	55.5	58.0	56.0	58.4

Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three and nine months ended October 28, 2022 and October 29, 2021 were immaterial.

Share Repurchases

The Company may repurchase shares in accordance with established repurchase plans. The Company retires its common stock upon repurchase with the excess over par value allocated to additional paid-in capital. The Company has not made any material purchases of common stock other than in connection with established share repurchase plans. In June 2022, the number of shares of our common stock that may be repurchased under our existing repurchase plan was increased by 8.0 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 24.4 million shares. As of October 28, 2022, we have repurchased approximately 16.5 million shares of common stock under the program.

Dividends

The Company declared and paid a quarterly dividend of $0.37 per share of its common stock during the three months ended October 28, 2022. Subsequent to the end of the quarter, on November 29, 2022, the Company's Board of Directors declared a quarterly dividend of $0.37 per share of the Company's common stock payable on January 27, 2023 to stockholders of record on January 13, 2023.

Note 3—Revenues:

Changes in Estimates on Contracts

Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can occur routinely over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated.

Many of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions, except per share amounts)
Net (unfavorable) favorable adjustments	$	(6)	$	—	$	4	$	9
Net (unfavorable) favorable adjustments, after tax	(5)		—		3		7
Diluted EPS impact	$	(0.09)	$	—	$	0.05	$	0.12

Revenues were $2 million lower and $7 million higher for the three and nine months ended October 28, 2022, respectively, and $1 million and $21 million higher for the three and nine months ended October 29, 2021, respectively, due to net revenue recognized from performance obligations satisfied in prior periods.

Disaggregation of Revenues

The Company's revenues are generated primarily from long-term contracts with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company disaggregates revenues by customer, contract-type and prime versus subcontractor to the federal government.

Disaggregated revenues by customer were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Department of Defense	$	969	$	920	$	2,799	$	2,740
Other federal government agencies	903		940		2,827		2,762
Commercial, state and local	37		38		110		110
Total	$	1,909	$	1,898	$	5,736	$	5,612

Disaggregated revenues by contract-type were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Cost reimbursement	$	1,071	$	1,045	$	3,201	$	3,028
Time and materials (T&M)	363		363		1,077		1,139
Firm-fixed price (FFP)	475		490		1,458		1,445
Total	$	1,909	$	1,898	$	5,736	$	5,612

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Disaggregated revenues by prime versus subcontractor were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Prime contractor to federal government	$	1,725	$	1,722	$	5,212	$	5,069
Subcontractor to federal government	147		138		414		433
Other	37		38		110		110
Total	$	1,909	$	1,898	$	5,736	$	5,612

Contract Balances

Contract balances for the periods presented were as follows:

	Balance Sheet line item	October 28, 2022		January 28, 2022
		(in millions)
Billed and billable receivables, net(1)	Receivables, net	$	580	$	615
Contract assets - unbillable receivables	Receivables, net	479		400
Contract assets - contract retentions	Other assets	16		17
Contract liabilities - current	Accounts payable and accrued liabilities	35		55
Contract liabilities - non-current	Other long-term liabilities	$	5	$	9

(1)    Net of allowance of $3 million and $4 million as of October 28, 2022 and January 28, 2022, respectively.

During the three and nine months ended October 28, 2022, the Company recognized revenues of $4 million and $39 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 28, 2022. During the three and nine months ended October 29, 2021, the Company recognized revenues of $8 million and $72 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 29, 2021.

Remaining Performance Obligations

As of October 28, 2022, the Company had $5.0 billion of remaining performance obligations. Remaining performance obligations exclude any variable consideration that is allocated entirely to unsatisfied performance obligations on our supply chain contracts. The Company expects to recognize revenue on approximately 85% of the remaining performance obligations over the next 12 months and approximately 95% over the next 24 months, with the remaining recognized thereafter.

Lessor Revenue

The Company leases IT equipment and hardware to its customers. All of the Company’s lessor arrangements are operating leases. Operating lease revenue is recognized on a straight-line basis over the term of the lease. Operating lease income is reported as revenue on the condensed and consolidated statements of income. During the nine months ended October 28, 2022, the Company recognized revenue of $23 million from the exercise of purchase options under certain lessor arrangements. Operating lease income was immaterial for the three and nine months ended October 28, 2022 and $3 million and $14 million for the three and nine months ended October 29, 2021, respectively.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 4—Acquisitions:

Halfaker

On July 2, 2021, the Company completed the acquisition of Halfaker, a mission focused, pure-play health IT company for a purchase price of $228 million, net of $3 million cash acquired. The Company funded the transaction from increased borrowings and cash on hand. During the first quarter of fiscal 2023, the Company made fair value adjustments decreasing goodwill and increasing customer relationships intangible assets by $2 million. The Company has completed the determination of fair values of the acquired assets and liabilities assumed. The allocation of the purchase price resulted in goodwill of $104 million and intangible assets of $114 million, both of which are deductible for income tax purposes. The recognized goodwill is primarily associated with future customer relationships and an acquired assembled work force. The intangible assets consist of customer relationships of $97 million and backlog of $17 million that will be amortized over a period of nine years and one year, respectively. The Company made additional cash payments of $21 million in March 2022 associated with certain change in control provisions that are recognized as post-combination expense.

Koverse

On May 3, 2021, the Company acquired Koverse, a software company that provides a data management platform enabling artificial intelligence and machine learning on complex sensitive data, for a purchase price of $30 million, net of $2 million cash acquired. The purchase price included $3 million of contingent consideration, representing the acquisition date fair value recognized for up to $27 million gross of potential future earnout payments based on the achievement of certain revenue targets over the next four years. The Company has completed the allocation of the purchase price which resulted in goodwill of $21 million and intangible assets of $10 million, which are both not deductible for income tax purposes. The goodwill is primarily associated with intellectual capital, future customer relationships, and an acquired assembled work force. The intangible assets, which primarily consist of developed technology, are being amortized over a weighted-average period of seven years. As of October 28, 2022, the Company has recognized $11 million of the additional $13 million of post-combination compensation expense associated with certain employee retention agreements.

Unisys Federal

During the second quarters of fiscal 2023 and 2022, the Company accelerated the amortization for certain off-market customer contracts as a result of a change in their expected contractual terms. The accelerations resulted in additional amortization of $4 million and $6 million for the three and nine months ended October 28, 2022, respectively, and $9 million and $17 million for the three and nine months ended October 29, 2021, respectively. As of October 28, 2022, the remaining unamortized balance of the provision for certain off-market customer contracts is $7 million and is expected to be amortized by the end of fiscal 2024.

Note 5—Goodwill and Intangible Assets:

Goodwill

Goodwill had a carrying value of $2,911 million and $2,913 million as of October 28, 2022 and January 28, 2022, respectively. There were no impairments of goodwill during the periods presented.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Intangible Assets

Intangible assets, all of which were finite-lived, consisted of the following:

	October 28, 2022						January 28, 2022
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
	(in millions)
Customer relationships	$	1,467	$	(435)	$	1,032	$	1,467	$	(351)	$	1,116
Backlog	—		—		—		17		(10)		7
Developed technology	10		(2)		8		10		(2)		8
Trade name	1		(1)		—		1		—		1
Total intangible assets	$	1,478	$	(438)	$	1,040	$	1,495	$	(363)	$	1,132

Amortization expense related to intangible assets was $29 million and $94 million for the three and nine months ended October 28, 2022, respectively, and $33 million and $94 million for the three and nine months ended October 29, 2021, respectively. There were no intangible asset impairment losses during the periods presented.

As of October 28, 2022, the estimated future annual amortization expense related to intangible assets is as follows:

Fiscal Year	(in millions)
Remainder of 2023	$	31
2024	115
2025	115
2026	115
2027	115
Thereafter	549
Total	$	1,040

Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, and other factors.

Note 6—Income Taxes:

The Company's effective income tax rate was 20.3% and 21.3% for the three and nine months ended October 28, 2022, respectively, and 19.4% and 22.0% for the three and nine months ended October 29, 2021, respectively. The Company’s effective tax rate was higher for the three months ended October 28, 2022 compared to the prior year period primarily due to a lower deduction for foreign-derived intangible income. The Company’s effective tax rate was lower for the nine months ended October 28, 2022 compared to the prior year period primarily due to tax benefits recorded in fiscal 2023 from the completion of prior year tax return planning efforts including foreign-derived intangible income studies.

Tax rates for the three and nine months ended October 28, 2022 were lower than the combined federal and state statutory rates due to excess tax benefits related to employee stock-based compensation, research and development tax credits, a deduction for foreign-derived intangible income, and other permanent book tax differences.

As of January 28, 2022, the net deferred tax liability balance was $43 million and is presented as deferred income taxes on the condensed and consolidated balance sheets. As of October 28, 2022, the net deferred tax asset balance is $3 million, which is presented in other assets on the condensed and consolidated balance sheets and is due to capitalization of certain research and development expenses required under the Tax Cuts and Jobs Act of 2017.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 7—Debt Obligations:

The Company’s long-term debt as of the dates presented was as follows:

	October 28, 2022										January 28, 2022
	Stated interest rate		Effective interest rate		Principal		Unamortized debt issuance costs		Net		Principal		Unamortized debt issuance costs		Net
					(in millions)
Term Loan A Facility due June 2027	4.38	%	4.50	%	$	1,230	$	(5)	$	1,225	$	—	$	—	$	—
Term Loan A Facility due October 2023	—	%	—	%	—		—		—		785		(5)		780
Term Loan A2 Facility due October 2023	—	%	—	%	—		—		—		100		—		100
Term Loan B Facility due October 2025	5.01	%	5.22	%	488		(3)		485		983		(7)		976
Term Loan B2 Facility due March 2027	5.01	%	5.44	%	272		(4)		268		272		(5)		267
Senior Notes due April 2028	4.88	%	5.11	%	400		(5)		395		400		(5)		395
Total long-term debt					$	2,390	$	(17)	$	2,373	$	2,540	$	(22)	$	2,518
Less current portion					15		—		15		148		—		148
Total long-term debt, net of current portion					$	2,375	$	(17)	$	2,358	$	2,392	$	(22)	$	2,370

As of October 28, 2022, the Company has a $3.0 billion secured credit facility (the Credit Facility) consisting of a Term Loan A Facility due June 2027, a Term Loan B Facility due October 2025, a Term Loan B2 Facility due March 2027 (together, the Term Loan Facilities), and a $1.0 billion Revolving Credit Facility due June 2027. During the quarter, the Company made a $90 million voluntary principal prepayment on the Term Loan B Facility due October 2025. During the nine months ended October 28, 2022, the Company borrowed and repaid $200 million under the Revolving Credit Facility. There was no balance outstanding on the Revolving Credit Facility as of October 28, 2022. As of October 28, 2022, the Company was in compliance with the covenants under its Credit Facility.

On June 30, 2022, the Company executed the Fifth Amendment to the Third Amended and Restated Credit Agreement (Fifth Amendment), which established, among other things, a $1,230 million senior secured term loan credit facility (Term Loan A Facility due June 2027) and increased the Revolving Credit Facility commitment from $400 million to $1,000 million. The entire Term Loan A Facility due June 2027 was immediately borrowed by the Company and the proceeds were used to pay in full the outstanding principal balances under the Term Loan A Facility due October 2023 and Term Loan A2 Facility due October 2023 and to prepay $400 million of principal on the Term Loan B Facility due October 2025. For the three months ended July 29, 2022, the Company wrote off deferred debt issuance costs of $3 million associated with the Term Loan B Facility due October 2025 voluntary principal prepayments which was recognized in interest expense.

Borrowings under the Term Loan A Facility due June 2027 amortize quarterly beginning on October 31, 2023 at 1.250% of the original borrowed amount thereunder, with such quarterly amortization increasing to 1.875% on October 31, 2024 and to 2.500% on October 31, 2025. The Term Loan A Facility due June 2027 may be prepaid at any time without penalty and is subject to the same mandatory prepayments, including from excess cash flow, as the Company’s existing term loans under the Credit Facility.

As a result of the Fifth Amendment, the maturity date for the Revolving Credit Facility was extended to, and the maturity date of the Term Loan A Facility due June 2027 is, the earlier of June 30, 2027 or 91 days prior to the earliest term loan “B” facility maturity date (subject to acceleration in certain circumstances). The Term Loan A Facility due June 2027 is secured by substantially all of the assets of the Company and the Company’s wholly owned domestic subsidiaries, and is guaranteed by each of the Company’s wholly owned domestic subsidiaries. The Term Loan A Facility due June 2027 is subject to the same covenants and events of default as the Company’s existing term loans under the Credit Facility.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Effective with the Fifth Amendment, all interest rates under the Credit Facility transitioned from LIBOR to Term Secured Overnight Financing Rate (Term SOFR) plus 0.10% for US dollar denominated loans, Sterling Overnight Index Average (SONIA) for UK pound sterling denominated loans, and Euro Interbank Offered Rate (EURIBOR) for Euro denominated loans. The applicable interest rate margins under the Term Loan A Facility due June 2027 and the Revolving Credit Facility were reduced to a range from 0.75% to 1.75% per annum for Term SOFR, SONIA and EURIBOR loans, and from 0% to 0.75% per annum for base rate loans, in each case based on the Company’s leverage ratio. Commitment fees for undrawn amounts under the Revolving Credit Facility were also reduced to a range of 0.125% to 0.25% per annum based on the Company’s leverage ratio.

During the nine months ended October 28, 2022, the Company incurred $8 million of debt issuance costs associated with the Fifth Amendment, of which $2 million was recognized in interest expense, with the remaining $6 million deferred and amortized to interest expense through the maturity date of the facility utilizing the effective interest rate method.

As of October 28, 2022 and January 28, 2022, the carrying value of the Company’s outstanding debt obligations approximated its fair value. The fair value of long-term debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s Term Loan Facilities and Senior Notes.

Maturities of long-term debt as of October 28, 2022 are:

Fiscal Year	Total
	(in millions)
Remainder of 2023	$	—
2024	31
2025	77
2026	596
2027	123
Thereafter	1,563
Total principal payments	$	2,390

Note 8—Derivative Instruments Designated as Cash Flow Hedges:

The Company’s derivative instruments designated as cash flow hedges consist of:

							Fair Value of Asset (Liability)(1) at
	Notional Amount at October 28, 2022		Pay Fixed Rate		Receive Variable Rate	Settlement and Termination	October 28, 2022		January 28, 2022
	(in millions)						(in millions)
Interest rate swaps #1	$	685	2.96	%	Term SOFR	Monthly through October 31, 2025	$	23	$	(39)
Interest rate swaps #2	525		2.36	%	Term SOFR	Monthly through October 31, 2023	11		(12)
Total	$	1,210					$	34	$	(51)

(1)    The fair value of the fixed interest rate swap asset is included in other assets on the condensed and consolidated balance sheets. The fair value of the fixed interest rate swap liability is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate debt. The counterparties to all swap agreements are financial institutions.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

On June 30, 2022 and in conjunction with the Fifth Amendment, the Company transitioned the variable rate on its interest rate swaps from 1-month LIBOR to 1-month Term SOFR. Effective with the transition, the Company will pay fixed rates of 2.96% and 2.36% on the group of interest rate swaps maturing on October 31, 2025 and October 31, 2023, respectively. The Company elected to apply the optional expedient in ASC 848 in connection with transitioning its interest rate swaps from LIBOR to Term SOFR that enabled it to consider the new swaps a continuation of the existing contracts. As a result, the transition did not have an impact on the Company’s hedge accounting or a material impact to the Company’s financial statements.

See Note 9 for the unrealized change in fair values on cash flow hedges recognized in other comprehensive income (loss) and the amounts reclassified from accumulated other comprehensive income (loss) into earnings for the current and comparative periods presented. The Company estimates that it will reclassify $22 million of unrealized gains from accumulated other comprehensive income into earnings in the twelve months following October 28, 2022.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 9—Changes in Accumulated Other Comprehensive Income (Loss) by Component:

The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8 and the Company's defined benefit plans.

	Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1)		Defined Benefit Obligation Adjustment		Total
	(in millions)
Three months ended October 28, 2022
Balance at July 29, 2022	$	(4)	$	1	$	(3)
Other comprehensive income before reclassifications	38		—		38
Amounts reclassified from accumulated other comprehensive loss	1		—		1
Income tax impact	(10)		—		(10)
Net other comprehensive income	29		—		29
Balance at October 28, 2022	$	25	$	1	$	26
Three months ended October 29, 2021
Balance at July 30, 2021	$	(71)	$	(3)	$	(74)
Other comprehensive income before reclassifications	13		—		13
Amounts reclassified from accumulated other comprehensive loss	9		—		9
Income tax impact	(5)		—		(5)
Net other comprehensive income	17		—		17
Balance at October 29, 2021	$	(54)	$	(3)	$	(57)
Nine months ended October 28, 2022
Balance at January 28, 2022	$	(38)	$	1	$	(37)
Other comprehensive income before reclassifications	72		—		72
Amounts reclassified from accumulated other comprehensive loss	13		—		13
Income tax impact	(22)		—		(22)
Net other comprehensive income	63		—		63
Balance at October 28, 2022	$	25	$	1	$	26
Nine months ended October 29, 2021
Balance at January 29, 2021	$	(86)	$	(3)	$	(89)
Other comprehensive income before reclassifications	17		—		17
Amounts reclassified from accumulated other comprehensive loss	26		—		26
Income tax impact	(11)		—		(11)
Net other comprehensive income	32		—		32
Balance at October 29, 2021	$	(54)	$	(3)	$	(57)

(1)The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 10—Sales of Receivables:

The Company has a Master Accounts Receivable Purchase Agreement (MARPA Facility) with MUFG Bank, Ltd. (the Purchaser) for the sale of up to a maximum amount of $300 million of certain designated eligible receivables with the U.S. government. Effective March 31, 2022, the Company amended the MARPA Facility to transition the purchase discount rate defined within the facility agreement from using LIBOR to Term SOFR. The amendment did not have a material impact on the Company's financial statements.

During the nine months ended October 28, 2022 and October 29, 2021, the Company incurred purchase discount fees of $4 million and $2 million, respectively, which are presented in Other (income) expense, net on the condensed and consolidated statements of income.

MARPA Facility activity consisted of the following:

	Nine Months Ended
	October 28, 2022		October 29, 2021
	(in millions)
Beginning balance	$	200	$	185
Sale of receivables	2,776		2,484
Cash collections	(2,716)		(2,469)
Outstanding balance sold to Purchaser(1)	260		200
Cash collected, not remitted to Purchaser(2)	(15)		(31)
Remaining sold receivables	$	245	$	169

(1)    For the nine months ended October 28, 2022 and October 29, 2021, the Company recorded a net increase to cash flows from operating activities of $60 million and $15 million, respectively, from sold receivables.

(2)    Primarily represents the cash collected on behalf of but not yet remitted to the Purchaser as of October 28, 2022 and October 29, 2021. This balance is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

Note 11—Legal Proceedings and Other Commitments and Contingencies:

Legal Proceedings

The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

AAV Termination for Convenience

On August 27, 2018, the Company received a stop-work order from the United States Marine Corps on the Assault Amphibious Vehicle (AAV) contract and on October 3, 2018 the program was terminated for convenience by the customer. The Company is continuing to negotiate with the Marine Corps to recover costs associated with the termination.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Government Investigations, Audits and Reviews

The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect, in particular, to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the United States. U.S. government agencies, including the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review the adequacy of the contractor’s compliance with government standards for its business systems. Adverse findings in these investigations, audits, or reviews can lead to criminal, civil or administrative proceedings, and the Company could face disallowance of previously billed costs, penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. Due to the Company’s reliance on government contracts, adverse findings could also have a material impact on the Company’s business, including its financial position, results of operations and cash flows.

The indirect cost audits by the DCAA of the Company’s business remain open for certain prior years and the current year. Although the Company has recorded contract revenues based on an estimate of costs that the Company believes will be approved on final audit, the Company does not know the outcome of any ongoing or future audits. If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected.

As of October 28, 2022, the Company believes it has adequately reserved for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with U.S. government Cost Accounting Standards.

Letters of Credit and Surety Bonds

The Company has outstanding obligations relating to letters of credit of $9 million as of October 28, 2022, principally related to guarantees on insurance policies. The Company also has outstanding obligations relating to surety bonds of $19 million, principally related to performance and payment bonds on the Company’s contracts.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures about market risk should be read in conjunction with our unaudited condensed and consolidated financial statements and the related notes. It contains forward-looking statements (which may be identified by words such as those described in “Risk Factors—Forward-Looking Statement Risks” in Part I of the most recently filed Annual Report on Form 10-K), including statements regarding our intent, belief, or current expectations with respect to, among other things, trends affecting our financial condition or results of operations (including our financial targets discussed below under “Management of Operating Performance and Reporting” and “Liquidity and Capital Resources”); backlog; our industry; government budgets and spending; market opportunities; the impact of competition; and the impact of acquisitions. Such statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Risks, uncertainties and assumptions that could cause or contribute to these differences include those discussed below, in “Risk Factors” in Part II of this report and in Part I of the most recently filed Annual Report on Form 10-K. Due to such risks, uncertainties and assumptions, you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to update these factors or to publicly announce the results of any changes to our forward-looking statements due to future results or developments.

We use the terms "SAIC," the “Company,” “we,” “us” and “our” to refer to Science Applications International Corporation and its consolidated subsidiaries.

The Company utilizes a 52/53 week fiscal year, ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2023 began on January 29, 2022 and ends on February 3, 2023, while fiscal 2022 began on January 30, 2021 and ended on January 28, 2022.

Business Overview

We are a leading technology integrator providing full life cycle services and solutions in the technical, engineering and enterprise information technology (IT) markets. We developed our brand by addressing our customers’ mission critical needs and solving their most complex problems for over 50 years. As one of the largest pure-play technology service providers to the U.S. government, we serve markets of significant scale and opportunity. Our primary customers are the departments and agencies of the U.S. government. We serve our customers through approximately 1,900 active contracts and task orders and employ approximately 26,000 individuals who are led by an experienced executive team of proven industry leaders. Our long history of serving the U.S. government has afforded us the ability to develop strong and longstanding relationships with some of the largest customers in the markets we serve. Substantially all of our revenues and tangible long-lived assets are generated by or owned by entities located in the United States.

Economic Opportunities, Challenges, and Risks

During the three and nine months ended October 28, 2022, we generated approximately 98% of our revenues from contracts with the U.S. government, including subcontracts on which we perform. Our business performance is affected by the overall level of U.S. government spending and the alignment of our offerings and capabilities with the budget priorities of the U.S. government. Appropriations measures passed in March 2022 provided full funding for the federal government through the end of government fiscal year (GFY) 2022. The U.S. government is currently operating under a Continuing Resolution for GFY 2023. In October 2021, the Federal debt ceiling was increased by $480 billion and in December 2021 was further increased by $2.5 trillion which is expected to allow the U.S. government to operate into 2023. It is unlikely but possible these measures could expire without extension and lead to a partial or full government shutdown.

Adverse changes in fiscal and economic conditions could materially impact our business. Some changes that could have an adverse impact on our business include adverse regulations, the implementation of future spending reductions (including sequestration), delayed passage of appropriations bills resulting in temporary or full-year continuing resolutions, extreme inflationary increases adversely impacting fixed price contracts, inability to increase or suspend the Federal debt ceiling, and potential government shutdowns.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Spending packages, including the infrastructure bill, Inflation Reduction Act, and CHIPS and Science Act, as well as future potential spending packages, may provide additional opportunity in areas of SAIC focus such as digital modernization, cyber, microelectronics support, and climate resiliency.

The U.S. government has increasingly relied on contracts that are subject to a competitive bidding process (including indefinite delivery, indefinite quantity (IDIQ), U.S. General Services Administration (GSA) schedules, and other multi-award contracts), which has resulted in greater competition and increased pricing pressure. Additionally, the U.S. government has put renewed emphasis on increasing the number of small business prime set-aside contracts that further reduce the addressable market in some areas.

Despite the budget and competitive pressures affecting the industry, we believe we are well-positioned to protect and expand existing customer relationships and benefit from opportunities that we have not previously pursued. Our scale, size, and prime contractor leadership position are expected to help differentiate us from our competitors, especially on large contract opportunities. We believe our long-term, trusted customer relationships and deep technical expertise provide us with the sophistication to handle highly complex, mission-critical contracts. Our value proposition is found in the proven ability to serve as a trusted adviser to our customers. In doing so, we leverage our expertise and scale to help them execute their mission.

We succeed as a business based on the solutions we deliver, our past performance, and our ability to compete on price. Our solutions are inspired through innovation based on adoption of best practices and technology integration of the best capabilities available. Our past performance was achieved by employees dedicated to supporting our customers' most challenging missions. Our current cost structure and ongoing efforts to reduce costs by strategic sourcing and developing repeatable offerings sold "as a service" and as managed services in a more commercial business model are expected to allow us to compete effectively on price in an evolving environment. Our ability to be competitive in the future will continue to be driven by our reputation for successful program execution, competitive cost structure, development of new pricing and business models, and efficiencies in assigning the right people, at the right time, in support of our contracts.

On July 2, 2021, we completed the acquisition of Halfaker and Associates, LLC (Halfaker). The acquisition of Halfaker, in alignment with our long-term strategy, grows the Company's digital transformation portfolio while expanding its ability to support the government's healthcare mission.

Impacts of the COVID-19 Pandemic

We are continuing to monitor the ongoing outbreak of the coronavirus disease 2019 (COVID-19) and we continue to work with our stakeholders to assess further possible implications to our business, supply chain and customers, and to take actions in an effort to mitigate adverse consequences.

The CARES Act allowed for the deferral of certain payroll tax payments through December 31, 2020 and we deferred total payments of approximately $103 million. The first installment of these deferred payroll taxes was paid during the third quarter of fiscal 2022 (approximately $51 million) with the remaining amounts due in the fourth quarter of fiscal 2023.

We have not experienced a significant impact to our liquidity or access to capital as a result of the COVID-19 pandemic. While we continue to navigate the impacts of the COVID-19 pandemic, COVID-19 did not have a material impact to revenues and operating income for the three and nine months ended October 28, 2022. The full extent of the impact of COVID-19 on our business and our operational and financial performance will depend on future developments, including the duration and spread of the pandemic, all of which are uncertain and cannot be predicted.

Management of Operating Performance and Reporting

Our business and program management process is directed by professional managers focused on serving our customers by providing high quality services in achieving program requirements. These managers carefully monitor contract margin performance by constantly evaluating contract risks and opportunities. Throughout each contract's life cycle, program managers review performance and update contract performance estimates to reflect their understanding of the best information available. For performance obligations satisfied over time, updates to estimates are generally recognized on inception-to-date activity, during the period of adjustment, resulting in either a favorable or unfavorable impact to operating income.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

We evaluate our results of operations by considering the drivers causing changes in revenues, operating income and operating cash flows. Given that revenues fluctuate on our contract portfolio over time due to contract awards and completions, changes in customer requirements, and increases or decreases in ordering volume of materials, we evaluate significant trends and fluctuations in these terms. Whether performed by our employees or by our subcontractors, we primarily provide services and, as a result, our cost of revenues are predominantly variable. We also analyze our cost mix (labor, subcontractor or materials) in order to understand operating margin because programs with a higher proportion of SAIC labor are generally more profitable. Changes in cost of revenues as a percentage of revenues other than from revenue volume or cost mix are normally driven by fluctuations in shared or corporate costs, or cumulative revenue adjustments due to changes in estimates.

Changes in operating cash flows are described with regard to changes in cash generated through the delivery of services, significant drivers of fluctuations in assets or liabilities and the impacts of changes in timing of cash receipts or disbursements.

Results of Operations

The primary financial performance measures we use to manage our business and monitor results of operations are revenues, operating income, and cash flows from operating activities. The following table summarizes our results of operations:

	Three Months Ended								Nine Months Ended
	October 28, 2022			Percent change		October 29, 2021			October 28, 2022			Percent change		October 29, 2021
	(dollars in millions)
Revenues	$	1,909		1	%	$	1,898		$	5,736		2	%	$	5,612
Cost of revenues	1,688			—	%	1,685			5,070			2	%	4,950
As a percentage of revenues	88.4		%			88.8		%	88.4		%			88.2		%
Selling, general and administrative expenses	87			—	%	87			272			8	%	252
Acquisition and integration costs	1			(92	%)	12			11			(69	%)	36
Other operating income	—			—	%	—			—			(100	%)	(3)
Operating income	133			17	%	114			383			2	%	377
As a percentage of revenues	7.0		%			6.0		%	6.7		%			6.7		%
Net income attributable to common stockholders	$	80		13	%	$	71		$	226		(3	%)	$	234
Net cash provided by operating activities	$	128		(4	%)	$	134		$	387		(7	%)	$	415

Revenues. Revenues increased $11 million for the three months ended October 28, 2022 as compared to the same period in the prior year primarily due to ramp up on new and existing contracts, partially offset by contract completions and lower accelerated amortization on certain off-market liability contracts.

Revenues increased $124 million for the nine months ended October 28, 2022 as compared to the same period in the prior year due to ramp up on new and existing contracts and the acquisition of Halfaker (approximately $72 million), partially offset by contract completions, one fewer working day compared to the prior year period, lower net favorable changes in contract estimates, and lower accelerated amortization on certain off-market liability contracts. Adjusting for the impact of acquired and divested revenues, revenues grew approximately 1%.

Cost of Revenues. Cost of revenues increased $3 million for the three months ended October 28, 2022 as compared to the same period in the prior year primarily due to ramp up on new and existing contracts.

Cost of revenues increased $120 million for the nine months ended October 28, 2022 as compared to the same period in the prior year primarily due to ramp up on new and existing contracts and the acquisition of Halfaker.

Selling, General and Administrative Expenses. SG&A remained consistent for the three months ended October 28, 2022 as compared with the same period in the prior year.

SG&A increased $20 million for the nine months ended October 28, 2022 as compared to the same period in the prior year primarily due to higher indirect expenses and the acquisition of Halfaker.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Operating Income. Operating income as a percentage of revenues for the three months ended October 28, 2022 increased from the comparable prior year period primarily due to lower acquisition and integration costs and indirect costs, partially offset by lower accelerated amortization on certain off-market liability contracts.

Operating income as a percentage of revenues remained consistent for the nine months ended October 28, 2022 as compared with the same period in the prior year. Lower net favorable changes in contract estimates and accelerated amortization on certain off-market liability contracts were offset by lower acquisition and integration costs.

Net Cash Provided by Operating Activities. Net cash provided by operating activities was $387 million for the nine months ended October 28, 2022, a decrease of $28 million compared to the prior year, primarily due to the timing of customer collections and other changes in working capital, cash payments during the year associated with certain change in control provisions related to the acquisition of Halfaker, and lower net earnings, partially offset by the first installment of the deferred payroll taxes allowed under the CARES Act paid in the prior year and higher cash provided by the MARPA Facility.

Non-GAAP Measures

Earnings before interest, taxes, depreciation and amortization (EBITDA), and adjusted EBITDA are non-GAAP financial measures. While we believe that these non-GAAP financial measures may be useful in evaluating our financial information, they should be considered as supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Reconciliations, definitions, and how we believe these measures are useful to management and investors are provided below. Other companies may define similar measures differently.

EBITDA and Adjusted EBITDA. The performance measure EBITDA is calculated by taking net income and excluding interest and loss on sale of receivables, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is a performance measure that excludes costs that we do not consider to be indicative of our ongoing performance. Adjusted EBITDA is calculated by taking EBITDA and excluding acquisition and integration costs, impairments, restructuring costs, and any other material non-recurring costs. Integration costs are costs to integrate acquired companies including costs of strategic consulting services, facility consolidations and employee-related costs such as retention and severance costs. The acquisition and integration costs relate to the Company's acquisitions of Halfaker and Koverse in fiscal 2022 and Unisys Federal in fiscal 2021.

We believe that EBITDA and adjusted EBITDA provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

EBITDA and adjusted EBITDA for the periods presented were calculated as follows:

	Three Months Ended						Nine Months Ended
	October 28, 2022			October 29, 2021			October 28, 2022			October 29, 2021
	(in millions)
Net income	$	80		$	71		$	228		$	235
Interest expense and loss on sale of receivables	32			27			91			81
Interest income	(1)			—			(1)			—
Provision for income taxes	20			17			62			66
Depreciation and amortization	37			44			118			123
EBITDA	168			159			498			505
EBITDA as a percentage of revenues	8.8		%	8.4		%	8.7		%	9.0		%
Acquisition and integration costs	1			12			11			36
Restructuring and impairment costs	5			1			7			1
Depreciation included in acquisition and integration costs and restructuring and impairment costs	(1)			—			(1)			(1)
Recovery of acquisition and integration costs and restructuring and impairment costs(1)	(3)			(1)			(6)			(1)
Adjusted EBITDA	$	170		$	171		$	509		$	540
Adjusted EBITDA as a percentage of revenues	8.9		%	9.0		%	8.9		%	9.6		%

(1)    Adjustment reflects the portion of acquisition and integration costs and restructuring and impairment costs recovered through the Company's indirect rates in accordance with U.S. government Cost Accounting Standards.

Adjusted EBITDA as a percentage of revenues for the three months ended October 28, 2022 decreased to 8.9% from 9.0% for the same period in the prior year primarily due to lower revenue resulting from accelerated amortization on certain off-market liability contracts and net unfavorable changes in contract estimates, partially offset by lower indirect costs.

Adjusted EBITDA as a percentage of revenues for the nine months ended October 28, 2022 decreased to 8.9% from 9.6% for the same period in the prior year primarily due to lower net favorable changes in contract estimates and lower revenue resulting from accelerated amortization on certain off-market liability contracts.

Other Key Performance Measures

In addition to the financial measures described above, we believe that bookings and backlog are useful measures for management and investors to evaluate our potential future revenues. We also consider measures such as contract types and cost of revenues mix to be useful for management and investors to evaluate our operating income and performance.

Net Bookings and Backlog. Net bookings represent the estimated amount of revenues to be earned in the future from funded and negotiated unfunded contract awards that were received during the period, net of adjustments to estimates on previously awarded contracts. We calculate net bookings as the period’s ending backlog plus the period’s revenues less the prior period’s ending backlog and initial backlog obtained through acquisitions.

Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts as work is performed. We do not include in backlog estimates of revenues to be derived from IDIQ contracts, but rather record backlog and bookings when task orders are awarded on these contracts. Given that much of our revenue is derived from IDIQ contract task orders that renew annually, bookings on these contracts tend to refresh annually as the task orders are renewed. Additionally, we do not include in backlog contract awards that are under protest until the protest is resolved in our favor.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

We segregate our backlog into two categories as follows:

•Funded Backlog. Funded backlog for contracts with government agencies primarily represents estimated amounts of revenue to be earned in the future from contracts for which funding is appropriated less revenues previously recognized on these contracts. It does not include the unfunded portion of contracts in which funding is incrementally appropriated or authorized on a quarterly or annual basis by the U.S. government and other customers even though the contract may call for performance over a number of years. Funded backlog for contracts with non-government customers represents the estimated value on contracts, which may cover multiple future years, under which we are obligated to perform, less revenues previously recognized on these contracts.

•Negotiated Unfunded Backlog. Negotiated unfunded backlog represents estimated amounts of revenue to be earned in the future from negotiated contracts for which funding has not been appropriated or otherwise authorized and from unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders expected to be awarded under IDIQ, GSA Schedules or other master agreement contract vehicles.

We expect to recognize revenue from a substantial portion of our funded backlog within the next twelve months. However, the U.S. government can adjust the scope of services of or cancel contracts at any time. Similarly, certain contracts with commercial customers include provisions that allow the customer to cancel prior to contract completion. Most of our contracts have cancellation terms that would permit us to recover all or a portion of our incurred costs and fees (contract profit) for work performed.

The estimated value of our total backlog as of the dates presented was:

	October 28, 2022		January 28, 2022
	(in millions)
Funded backlog	$	4,019	$	3,491
Negotiated unfunded backlog	20,413		20,601
Total backlog	$	24,432	$	24,092

We had net bookings worth an estimated $2.0 billion and $6.1 billion during the three and nine months ended October 28, 2022. Total backlog at the end of the third quarter is consistent with our total backlog at prior year end.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Contract Types. Our earnings and profitability may vary materially depending on changes in the proportionate amount of revenues derived from each type of contract. For a discussion of the types of contracts under which we generate revenues, see “Contract Types” in Part I of the most recently filed Annual Report on Form 10-K. The following table summarizes revenues by contract type as a percentage of revenues for the periods presented:

	Nine Months Ended
	October 28, 2022		October 29, 2021
Cost reimbursement	56	%	54	%
Time and materials (T&M)	19	%	20	%
Firm-fixed price (FFP)	25	%	26	%
Total	100	%	100	%

Cost of Revenues Mix. We generate revenues by providing a customized mix of services to our customers. The profit generated from our service contracts is affected by the proportion of cost of revenues incurred from the efforts of our employees (which we refer to below as labor-related cost of revenues), the efforts of our subcontractors and the cost of materials used in the performance of our service obligations under our contracts. Contracts performed with a higher proportion of SAIC labor are generally more profitable. The following table presents cost mix for the periods presented:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(as a % of total cost of revenues)
Labor-related cost of revenues	53	%	53	%	54	%	54	%
Subcontractor-related cost of revenues	29	%	30	%	29	%	29	%
Supply chain materials-related cost of revenues	8	%	7	%	7	%	8	%
Other materials-related cost of revenues	10	%	10	%	10	%	9	%
Total	100	%	100	%	100	%	100	%

Cost of revenues mix for the three and nine months ended October 28, 2022 were consistent with the same periods in the prior year.

Liquidity and Capital Resources

As a services provider, our business generally requires minimal infrastructure investment. We expect to fund our ongoing working capital, commitments and any other discretionary investments with cash on hand, future operating cash flows and, if needed, borrowings under our $1.0 billion Revolving Credit Facility and $300 million MARPA Facility.

We anticipate that our future cash needs will be for working capital, capital expenditures, and contractual and other commitments. We consider various financial measures when we develop and update our capital deployment strategy, which include evaluating cash provided by operating activities, free cash flow and financial leverage. When our cash generation enables us to exceed our target average minimum cash balance, we intend to deploy excess cash through dividends, share repurchases, debt prepayments or strategic acquisitions.

Our ability to fund these needs will depend, in part, on our ability to generate cash in the future, which depends on our future financial results. Our future results are subject to general economic, financial, competitive, legislative and regulatory factors that may be outside of our direct control. Although we believe that the financing arrangements in place will permit us to finance our operations on acceptable terms and conditions for at least the next year, our future access to, and the availability of financing on acceptable terms and conditions will be impacted by many factors (including our credit rating, capital market liquidity and overall economic conditions). Therefore, we cannot ensure that such financing will be available to us on acceptable terms or that such financing will be available at all. Nevertheless, we believe that our existing cash on hand, generation of future operating cash flows, and access to bank financing and capital markets will provide adequate resources to meet our short-term liquidity and long-term capital needs.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

During the second quarter of fiscal 2023, we amended our Credit Facility. See Note 7 to the condensed and consolidated financial statements contained within this report for additional information.

Beginning in fiscal 2023, the Tax Cuts and Jobs Act of 2017 requires the capitalization of research and development costs for tax purposes and requires taxpayers to amortize such expenditures over five years. Congress may defer, modify, or repeal this provision, however, if the current effective date and current legislation remain in place, the Company's initial assessment is that cash flows from operations in fiscal 2023 will decrease by a minimum of $90 million, but net deferred tax assets will increase by a similar amount. The cash flow impact would continue over the five-year amortization period, but would decrease over the period and be immaterial in year six.

Historical Cash Flow Trends

The following table summarizes our cash flows:

	Nine Months Ended
	October 28, 2022		October 29, 2021
	(in millions)
Net cash provided by operating activities	$	387	$	415
Net cash used in investing activities	(23)		(272)
Net cash used in financing activities	(417)		(176)
Net decrease in cash, cash equivalents and restricted cash	$	(53)	$	(33)

Net Cash Provided by Operating Activities. Refer to “Results of Operations” above for a discussion of the changes in cash provided by operating activities between the nine months ended October 28, 2022 and the comparable prior year period.

Net Cash Used in Investing Activities. Cash used in investing activities for the nine months ended October 28, 2022 decreased compared to the prior year period primarily due to cash paid for the acquisitions of Halfaker and Koverse in the prior year period.

Net Cash Used in Financing Activities. Cash used in financing activities for the nine months ended October 28, 2022 increased compared to the prior year period as a result of borrowings obtained to finance the Halfaker acquisition in the prior year period, a $90 million voluntary principal prepayment during the third quarter of fiscal 2023, and higher share repurchases of $53 million.

Critical Accounting Policies

There have been no changes to our critical accounting policies during the nine months ended October 28, 2022 from those disclosed in our most recently filed Annual Report on Form 10-K.

Recently Issued But Not Yet Adopted Accounting Pronouncements

For information on recently issued but not yet adopted accounting pronouncements, see Note 1 to the condensed and consolidated financial statements contained within this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our market risks from those discussed in our most recently filed Annual Report on Form 10-K.

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) and have concluded that as of October 28, 2022 these controls and procedures were operating and effective.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarterly period covered by this report that materially affected, or are likely to materially affect, our internal control over financial reporting.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We have provided information about legal proceedings in which we are involved in our fiscal 2022 Annual Report on Form 10-K, and we have provided an update to this information in Note 11 to the condensed and consolidated financial statements contained within this report.

In addition to the described legal proceedings, we are routinely subject to investigations and reviews relating to compliance with various laws and regulations. Additional information regarding such investigations and reviews is included in our fiscal 2022 Annual Report on Form 10-K, and we have also updated this information in Note 11 to the condensed and consolidated financial statements contained within this report, under the heading “Government Investigations, Audits and Reviews.”

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in our most recently filed Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities. We may repurchase shares on the open market in accordance with established repurchase plans. Whether repurchases are made and the timing and amount of repurchases depend on a variety of factors including market conditions, our capital position, internal cash generation and other factors. We also repurchase shares in connection with stock option and stock award activities to satisfy tax withholding obligations.

The following table presents repurchases of our common stock during the three months ended October 28, 2022:

Period(1)	Total Number of Shares (or Units) Purchased(2)	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(3)
July 30, 2022 - September 2, 2022	226,413	$	93.86	226,413	8,315,323
September 3, 2022 - September 30, 2022	205,791	91.84		205,791	8,109,532
October 1, 2022 - October 28, 2022	196,770	95.07		196,770	7,912,762
Total	628,974	$	93.57	628,974

(1)Date ranges represent our fiscal periods during the current quarter. Our fiscal quarters typically consist of one five-week period and two four-week periods.

(2)Includes shares purchased on surrender by stockholders of previously owned shares to satisfy minimum statutory tax withholding obligations related to stock option exercises and vesting of stock awards in addition to shares purchased under our publicly announced plans or programs.

(3)In June 2022, the number of shares that may be purchased increased by 8.0 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 24.4 million shares. As of October 28, 2022, we have repurchased approximately 16.5 million shares of common stock under the program.

Item 3. Defaults Upon Senior Securities

No information is required in response to this item.

Item 4. Mine Safety Disclosures

No information is required in response to this item.

Item 5. Other Information

No information is required in response to this item.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data File. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104	The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: December 5, 2022

Science Applications International Corporation

/s/ Prabu Natarajan

Prabu Natarajan
Executive Vice President and Chief Financial Officer

-31-

EX-31.1

Exhibit 31.1

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nazzic S. Keene, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended October 28, 2022 of Science Applications International Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 5, 2022

/s/ Nazzic S. Keene

Nazzic S. Keene

Chief Executive Officer

EX-31.2

Exhibit 31.2

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Prabu Natarajan, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q for the period ended October 28, 2022 of Science Applications International Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: December 5, 2022

/S/ Prabu Natarajan 

Prabu Natarajan

Chief Financial Officer

EX-32.1

Exhibit 32.1

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Science Applications International Corporation (the “Company”) on Form 10-Q for the period ended October 28, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nazzic S. Keene, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: December 5, 2022

/s/ Nazzic S. Keene

Nazzic S. Keene

Chief Executive Officer

EX-32.2

Exhibit 32.2

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Science Applications International Corporation (the “Company”) on Form 10-Q for the period ended October 28, 2022 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Prabu Natarajan, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: December 5, 2022

/S/ Prabu Natarajan

Prabu Natarajan

Chief Financial Officer

XML

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	Oct. 28, 2022	Nov. 18, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Oct. 28, 2022
Document Transition Report	false
Entity File Number	001-35832
Entity Registrant Name	Science Applications International Corporation
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	46-1932921
Entity Address, Address Line One	12010 Sunset Hills Road
Entity Address, City or Town	Reston
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20190
City Area Code	703
Local Phone Number	676-4300
Title of 12(b) Security	Common Stock, par value $.0001 per share
Trading Symbol	SAIC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		54,629,268
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q3
Entity Central Index Key	0001571123
Current Fiscal Year End Date	--02-03

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CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Statement of Comprehensive Income [Abstract]
Revenues	$ 1,909	$ 1,898	$ 5,736	$ 5,612
Cost of revenues	1,688	1,685	5,070	4,950
Selling, general and administrative expenses	87	87	272	252
Acquisition and integration costs	1	12	11	36
Other operating income	0	0	0	(3)
Operating income	133	114	383	377
Interest expense	30	26	87	79
Other (income) expense, net	3	0	6	(3)
Income before income taxes	100	88	290	301
Provision for income taxes	(20)	(17)	(62)	(66)
Net income	80	71	228	235
Net income attributable to non-controlling interest	0	0	2	1
Net income attributable to common stockholders	$ 80	$ 71	$ 226	$ 234
Earnings per share:
Basic (in dollars per share)	$ 1.45	$ 1.24	$ 4.06	$ 4.05
Diluted (in dollars per share)	$ 1.45	$ 1.22	$ 4.04	$ 4.01

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CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Statement - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Statement of Comprehensive Income [Abstract]
Net income	$ 80	$ 71	$ 228	$ 235
Net unrealized gain on derivative instruments	29	17	63	32
Total other comprehensive income, net of tax	29	17	63	32
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Comprehensive income	109	88	291	267
Comprehensive income attributable to non-controlling interest	0	0	2	1
Comprehensive income attributable to common stockholders	$ 109	$ 88	$ 289	$ 266

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CONDENSED AND CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Oct. 28, 2022	Jan. 28, 2022
Current assets:
Cash and cash equivalents	$ 53	$ 106
Receivables, net	1,059	1,015
Inventory, prepaid expenses and other current assets	135	142
Total current assets	1,247	1,263
Goodwill	2,911	2,913
Intangible assets, net	1,040	1,132
Property, plant, and equipment (net of accumulated depreciation of $194 million and $182 million at October 28, 2022 and January 28, 2022, respectively)	95	100
Operating lease right of use assets	166	209
Other assets	169	129
Total assets	5,628	5,746
Current liabilities:
Accounts payable and accrued liabilities	819	840
Accrued payroll and employee benefits	396	364
Long-term debt, current portion	15	148
Total current liabilities	1,230	1,352
Long-term debt, net of current portion	2,358	2,370
Operating lease liabilities	155	192
Deferred income taxes	0	43
Other long-term liabilities	189	160
Commitments and contingencies (Note 11)
Equity:
Common stock	0	0
Additional paid-in capital	679	838
Retained earnings	981	818
Accumulated other comprehensive income (loss)	26	(37)
Total common stockholders' equity	1,686	1,619
Non-controlling interest	10	10
Total stockholders' equity	1,696	1,629
Total liabilities and stockholders' equity	$ 5,628	$ 5,746

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CONDENSED AND CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Oct. 28, 2022	Jan. 28, 2022
Statement of Financial Position [Abstract]
Property, plant and equipment, accumulated depreciation	$ 194	$ 182
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized (in shares)	1,000,000,000	1,000,000,000
Common stock, shares issued (in shares)	55,000,000	56,000,000
Common stock, shares outstanding (in shares)	55,000,000	56,000,000

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CONDENSED AND CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions	Total	Shares of common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive income (loss)	Non-controlling interest
Balance, beginning (in shares) at Jan. 29, 2021		58,000,000
Beginning Balance at Jan. 29, 2021	$ 1,552		$ 1,004	$ 627	$ (89)	$ 10
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	235			234		1
Issuances of stock (in shares)		1,000,000
Issuances of stock	12		12
Net other comprehensive income	32				32
Cash dividends	(65)			(65)
Stock-based compensation	21		21
Repurchases of stock (in shares)		(2,000,000)
Repurchases of stock	(141)		(141)
Distributions to non-controlling interest	(1)					(1)
Balance, ending (in shares) at Oct. 29, 2021		57,000,000
Ending Balance at Oct. 29, 2021	1,645		896	796	(57)	10
Balance, beginning (in shares) at Jul. 30, 2021		58,000,000
Beginning Balance at Jul. 30, 2021	1,628		945	747	(74)	10
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	71			71
Issuances of stock (in shares)		1,000,000
Issuances of stock	4		4
Net other comprehensive income	17				17
Cash dividends	(22)			(22)
Stock-based compensation	11		11
Repurchases of stock (in shares)		(2,000,000)
Repurchases of stock	(64)		(64)
Distributions to non-controlling interest	0					0
Balance, ending (in shares) at Oct. 29, 2021		57,000,000
Ending Balance at Oct. 29, 2021	$ 1,645		896	796	(57)	10
Balance, beginning (in shares) at Jan. 28, 2022	56,000,000	56,000,000
Beginning Balance at Jan. 28, 2022	$ 1,629		838	818	(37)	10
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	228			226		2
Issuances of stock (in shares)		1,000,000
Issuances of stock	13		13
Net other comprehensive income	63				63
Cash dividends	(63)			(63)
Stock-based compensation	19		19
Repurchases of stock (in shares)		(2,000,000)
Repurchases of stock	(191)		(191)
Distributions to non-controlling interest	$ (2)					(2)
Balance, ending (in shares) at Oct. 28, 2022	55,000,000	55,000,000
Ending Balance at Oct. 28, 2022	$ 1,696		679	981	26	10
Balance, beginning (in shares) at Jul. 29, 2022		55,000,000
Beginning Balance at Jul. 29, 2022	1,653		723	923	(3)	10
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	80			80
Issuances of stock	5		5
Net other comprehensive income	29				29
Cash dividends	(22)			(22)
Stock-based compensation	11		11
Repurchases of stock	(60)		(60)
Distributions to non-controlling interest	$ 0					0
Balance, ending (in shares) at Oct. 28, 2022	55,000,000	55,000,000
Ending Balance at Oct. 28, 2022	$ 1,696		$ 679	$ 981	$ 26	$ 10

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CONDENSED AND CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Statement of Stockholders' Equity [Abstract]
Cash dividends paid per share (in dollars per share)	$ 0.37	$ 0.37	$ 1.11	$ 1.11
Cash dividends declared per share (in dollars per share)	$ 0.37	$ 0.37	$ 1.11	$ 1.11

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CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021
Cash flows from operating activities:
Net income	$ 228	$ 235
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	118	123
Amortization of off-market customer contracts	(12)	(30)
Amortization of debt issuance costs	8	6
Deferred income taxes	(29)	41
Stock-based compensation expense	35	35
Gain on divestitures	0	(2)
Impairment of assets	0	10
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of acquisitions:
Receivables	(44)	(123)
Inventory, prepaid expenses and other current assets	7	28
Other assets	5	(8)
Accounts payable and accrued liabilities	(21)	47
Accrued payroll and employee benefits	32	45
Income taxes payable	59	0
Operating lease assets and liabilities, net	(1)	4
Other long-term liabilities	2	4
Net cash provided by operating activities	387	415
Cash flows from investing activities:
Expenditures for property, plant, and equipment	(18)	(27)
Purchases of marketable securities	(5)	(5)
Sales of marketable securities	3	4
Cash paid for acquisitions, net of cash acquired	0	(247)
Proceeds from divestitures	0	8
Other	(3)	(5)
Net cash used in investing activities	(23)	(272)
Cash flows from financing activities:
Dividend payments to stockholders	(63)	(65)
Principal payments on borrowings	(780)	(84)
Issuances of stock	12	12
Stock repurchased and retired or withheld for taxes on equity awards	(208)	(154)
Proceeds from borrowings	630	116
Debt issuance costs	(6)	0
Distributions to non-controlling interest	(2)	(1)
Net cash used in financing activities	(417)	(176)
Net decrease in cash, cash equivalents and restricted cash	(53)	(33)
Cash, cash equivalents and restricted cash at beginning of period	115	190
Cash, cash equivalents and restricted cash at end of period	$ 62	$ 157

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Business Overview and Summary of Significant Accounting Policies

9 Months Ended

Oct. 28, 2022

Accounting Policies [Abstract]

Business Overview and Summary of Significant Accounting Policies

Business Overview and Summary of Significant Accounting Policies:

Overview

Science Applications International Corporation (collectively, with its consolidated subsidiaries, the “Company”) is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S. government. The Company provides these services for large, complex projects with a targeted emphasis on higher-end, differentiated technology services and solutions that accelerate and transform secure and resilient digital environments through system development, modernization, integration, and sustainment to drive enterprise and mission outcomes.

The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. Each of the Company’s two customer facing operating sectors is focused on providing both (1) growth and technology accelerating solutions and (2) core IT service offerings to one or more agencies of the U.S. federal government. Growth and technology accelerating solutions include the delivery of secure cloud modernization, outcome based enterprise IT as-a-service, and the integration, production and modernization of defense systems. Core IT services include systems engineering, the operation and maintenance of existing IT systems and networks, and logistics and supply chain solutions.

During the second quarter of fiscal 2022, the Company completed the acquisition of Halfaker and Associates, LLC (Halfaker), a mission focused, pure-play health IT company, growing the Company's digital transformation portfolio. Additionally, the Company acquired Koverse, a software company that provides a data management platform enabling artificial intelligence and machine learning on complex sensitive data.

Principles of Consolidation and Basis of Presentation

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. The financial statements are unaudited, but in the opinion of management include all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended January 28, 2022.

Non-controlling Interest. The Company holds a 50.1% majority interest in Forfeiture Support Associates J.V. (FSA). The results of operations of FSA are included in the Company's condensed and consolidated statements of income and comprehensive income and statements of cash flows. The non-controlling interest reported on the condensed and consolidated balance sheets represents the portion of FSA's equity that is attributable to the non-controlling interest.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates.

Reporting Periods

The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2023 began on January 29, 2022 and ends on February 3, 2023, while fiscal 2022 began on January 30, 2021 and ended on January 28, 2022.

Operating Cycle

The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts.

Derivative Instruments Designated as Cash Flow Hedges

Derivative instruments are recorded on the condensed and consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions.

The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges.

Marketable Securities

Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1). As of October 28, 2022 and January 28, 2022, the fair value of our investments totaled $26 million and $28 million, respectively, and are included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed and consolidated balance sheets for the periods presented:

	October 28, 2022		January 28, 2022
	(in millions)
Cash and cash equivalents	$	53	$	106
Restricted cash included in inventory, prepaid expenses and other current assets	5		5
Restricted cash included in other assets	4		4
Cash, cash equivalents and restricted cash	$	62	$	115

Acquisition and Integration Costs

Acquisition-related costs that are not part of the purchase price consideration are generally expensed as incurred, except for certain costs that are deferred in connection with the issuance of debt. These costs typically include transaction-related costs, such as finder’s fees, legal, accounting, and other professional costs. Integration-related costs represent costs directly related to combining the Company and its acquired businesses. Integration-related costs typically include strategic consulting services, facility consolidations, employee-related costs, such as retention and severance, costs to integrate information technology infrastructure, enterprise planning systems, processes, and other non-recurring integration-related costs. Acquisition and integration costs are presented together as acquisition and integration costs on the condensed and consolidated statements of income.

The amounts recognized in acquisition and integration costs on the condensed and consolidated statements of income are as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Acquisition(1)	$	(1)	$	—	$	(2)	$	3
Integration(2)	2		12		13		33
Total acquisition and integration costs	$	1	$	12	$	11	$	36

(1)    Acquisition expenses for the three and nine months ended October 28, 2022 reflects amounts recognized to reduce the fair value of the Koverse earnout liability. Acquisition expenses for the nine months ended October 29, 2021 are related to the acquisitions of Halfaker and Koverse. See Note 4 for additional information related to the acquisitions.

(2)    Integration expenses for the nine months ended October 29, 2021 include $10 million for the impairment of assets.

Restructuring

During the three and nine months ended October 28, 2022, the Company incurred $5 million and $7 million, respectively, of restructuring costs related to the consolidation of certain facilities and other costs associated with the optimization of business processes. These costs are presented within selling, general and administrative expenses in the condensed and consolidated statements of income.

Accounting Standards Updates

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50), which requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. These amendments are effective for fiscal years beginning after December 15, 2022, except for the requirement to provide rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured at the acquisition date in accordance with Topic 606 as if the acquirer had originated the contracts. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and must be applied prospectively. Early adoption is permitted. The Company adopted the requirements of ASU 2021-08 on a prospective basis effective the first day of fiscal 2023.

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Earnings Per Share, Share Repurchases and Dividends

9 Months Ended

Oct. 28, 2022

Earnings Per Share [Abstract]

Earnings Per Share, Share Repurchases and Dividends

Earnings Per Share, Share Repurchases and Dividends:

Earnings Per Share (EPS)

Basic EPS is computed by dividing net income attributable to common stockholders by the basic weighted-average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards.

The following table provides a reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

	Three Months Ended		Nine Months Ended
	October 28, 2022	October 29, 2021	October 28, 2022	October 29, 2021
	(in millions)
Basic weighted-average number of shares outstanding	55.0	57.5	55.6	57.8
Dilutive common share equivalents - stock options and other stock-based awards	0.5	0.5	0.4	0.6
Diluted weighted-average number of shares outstanding	55.5	58.0	56.0	58.4

Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three and nine months ended October 28, 2022 and October 29, 2021 were immaterial.

Share Repurchases

The Company may repurchase shares in accordance with established repurchase plans. The Company retires its common stock upon repurchase with the excess over par value allocated to additional paid-in capital. The Company has not made any material purchases of common stock other than in connection with established share repurchase plans. In June 2022, the number of shares of our common stock that may be repurchased under our existing repurchase plan was increased by 8.0 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 24.4 million shares. As of October 28, 2022, we have repurchased approximately 16.5 million shares of common stock under the program.

Dividends

The Company declared and paid a quarterly dividend of $0.37 per share of its common stock during the three months ended October 28, 2022. Subsequent to the end of the quarter, on November 29, 2022, the Company's Board of Directors declared a quarterly dividend of $0.37 per share of the Company's common stock payable on January 27, 2023 to stockholders of record on January 13, 2023.

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Revenues

3 Months Ended

Oct. 28, 2022

Revenue from Contract with Customer [Abstract]

Revenues

Revenues:

Changes in Estimates on Contracts

Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can occur routinely over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated.

Many of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss.

Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions, except per share amounts)
Net (unfavorable) favorable adjustments	$	(6)	$	—	$	4	$	9
Net (unfavorable) favorable adjustments, after tax	(5)		—		3		7
Diluted EPS impact	$	(0.09)	$	—	$	0.05	$	0.12

Revenues were $2 million lower and $7 million higher for the three and nine months ended October 28, 2022, respectively, and $1 million and $21 million higher for the three and nine months ended October 29, 2021, respectively, due to net revenue recognized from performance obligations satisfied in prior periods.

Disaggregation of Revenues

The Company's revenues are generated primarily from long-term contracts with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company disaggregates revenues by customer, contract-type and prime versus subcontractor to the federal government.

Disaggregated revenues by customer were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Department of Defense	$	969	$	920	$	2,799	$	2,740
Other federal government agencies	903		940		2,827		2,762
Commercial, state and local	37		38		110		110
Total	$	1,909	$	1,898	$	5,736	$	5,612

Disaggregated revenues by contract-type were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Cost reimbursement	$	1,071	$	1,045	$	3,201	$	3,028
Time and materials (T&M)	363		363		1,077		1,139
Firm-fixed price (FFP)	475		490		1,458		1,445
Total	$	1,909	$	1,898	$	5,736	$	5,612

Disaggregated revenues by prime versus subcontractor were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Prime contractor to federal government	$	1,725	$	1,722	$	5,212	$	5,069
Subcontractor to federal government	147		138		414		433
Other	37		38		110		110
Total	$	1,909	$	1,898	$	5,736	$	5,612

Contract Balances

Contract balances for the periods presented were as follows:

	Balance Sheet line item	October 28, 2022		January 28, 2022
		(in millions)
Billed and billable receivables, net(1)	Receivables, net	$	580	$	615
Contract assets - unbillable receivables	Receivables, net	479		400
Contract assets - contract retentions	Other assets	16		17
Contract liabilities - current	Accounts payable and accrued liabilities	35		55
Contract liabilities - non-current	Other long-term liabilities	$	5	$	9

(1)    Net of allowance of $3 million and $4 million as of October 28, 2022 and January 28, 2022, respectively.

During the three and nine months ended October 28, 2022, the Company recognized revenues of $4 million and $39 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 28, 2022. During the three and nine months ended October 29, 2021, the Company recognized revenues of $8 million and $72 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 29, 2021.

Remaining Performance Obligations

As of October 28, 2022, the Company had $5.0 billion of remaining performance obligations. Remaining performance obligations exclude any variable consideration that is allocated entirely to unsatisfied performance obligations on our supply chain contracts. The Company expects to recognize revenue on approximately 85% of the remaining performance obligations over the next 12 months and approximately 95% over the next 24 months, with the remaining recognized thereafter.

Lessor Revenue

The Company leases IT equipment and hardware to its customers. All of the Company’s lessor arrangements are operating leases. Operating lease revenue is recognized on a straight-line basis over the term of the lease. Operating lease income is reported as revenue on the condensed and consolidated statements of income. During the nine months ended October 28, 2022, the Company recognized revenue of $23 million from the exercise of purchase options under certain lessor arrangements. Operating lease income was immaterial for the three and nine months ended October 28, 2022 and $3 million and $14 million for the three and nine months ended October 29, 2021, respectively.

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Acquisitions

9 Months Ended

Oct. 28, 2022

Business Combinations [Abstract]

Acquisitions

Acquisitions:

Halfaker

On July 2, 2021, the Company completed the acquisition of Halfaker, a mission focused, pure-play health IT company for a purchase price of $228 million, net of $3 million cash acquired. The Company funded the transaction from increased borrowings and cash on hand. During the first quarter of fiscal 2023, the Company made fair value adjustments decreasing goodwill and increasing customer relationships intangible assets by $2 million. The Company has completed the determination of fair values of the acquired assets and liabilities assumed. The allocation of the purchase price resulted in goodwill of $104 million and intangible assets of $114 million, both of which are deductible for income tax purposes. The recognized goodwill is primarily associated with future customer relationships and an acquired assembled work force. The intangible assets consist of customer relationships of $97 million and backlog of $17 million that will be amortized over a period of nine years and one year, respectively. The Company made additional cash payments of $21 million in March 2022 associated with certain change in control provisions that are recognized as post-combination expense.

Koverse

On May 3, 2021, the Company acquired Koverse, a software company that provides a data management platform enabling artificial intelligence and machine learning on complex sensitive data, for a purchase price of $30 million, net of $2 million cash acquired. The purchase price included $3 million of contingent consideration, representing the acquisition date fair value recognized for up to $27 million gross of potential future earnout payments based on the achievement of certain revenue targets over the next four years. The Company has completed the allocation of the purchase price which resulted in goodwill of $21 million and intangible assets of $10 million, which are both not deductible for income tax purposes. The goodwill is primarily associated with intellectual capital, future customer relationships, and an acquired assembled work force. The intangible assets, which primarily consist of developed technology, are being amortized over a weighted-average period of seven years. As of October 28, 2022, the Company has recognized $11 million of the additional $13 million of post-combination compensation expense associated with certain employee retention agreements.

Unisys Federal

During the second quarters of fiscal 2023 and 2022, the Company accelerated the amortization for certain off-market customer contracts as a result of a change in their expected contractual terms. The accelerations resulted in additional amortization of $4 million and $6 million for the three and nine months ended October 28, 2022, respectively, and $9 million and $17 million for the three and nine months ended October 29, 2021, respectively. As of October 28, 2022, the remaining unamortized balance of the provision for certain off-market customer contracts is $7 million and is expected to be amortized by the end of fiscal 2024.

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Goodwill and Intangible Assets (Notes)

9 Months Ended

Oct. 28, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

Goodwill and Intangible Assets:

Goodwill

Goodwill had a carrying value of $2,911 million and $2,913 million as of October 28, 2022 and January 28, 2022, respectively. There were no impairments of goodwill during the periods presented.

Intangible Assets

Intangible assets, all of which were finite-lived, consisted of the following:

	October 28, 2022						January 28, 2022
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
	(in millions)
Customer relationships	$	1,467	$	(435)	$	1,032	$	1,467	$	(351)	$	1,116
Backlog	—		—		—		17		(10)		7
Developed technology	10		(2)		8		10		(2)		8
Trade name	1		(1)		—		1		—		1
Total intangible assets	$	1,478	$	(438)	$	1,040	$	1,495	$	(363)	$	1,132

Amortization expense related to intangible assets was $29 million and $94 million for the three and nine months ended October 28, 2022, respectively, and $33 million and $94 million for the three and nine months ended October 29, 2021, respectively. There were no intangible asset impairment losses during the periods presented.

As of October 28, 2022, the estimated future annual amortization expense related to intangible assets is as follows:

Fiscal Year	(in millions)
Remainder of 2023	$	31
2024	115
2025	115
2026	115
2027	115
Thereafter	549
Total	$	1,040

Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, and other factors.

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Income Taxes

9 Months Ended

Oct. 28, 2022

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes:

The Company's effective income tax rate was 20.3% and 21.3% for the three and nine months ended October 28, 2022, respectively, and 19.4% and 22.0% for the three and nine months ended October 29, 2021, respectively. The Company’s effective tax rate was higher for the three months ended October 28, 2022 compared to the prior year period primarily due to a lower deduction for foreign-derived intangible income. The Company’s effective tax rate was lower for the nine months ended October 28, 2022 compared to the prior year period primarily due to tax benefits recorded in fiscal 2023 from the completion of prior year tax return planning efforts including foreign-derived intangible income studies.

Tax rates for the three and nine months ended October 28, 2022 were lower than the combined federal and state statutory rates due to excess tax benefits related to employee stock-based compensation, research and development tax credits, a deduction for foreign-derived intangible income, and other permanent book tax differences.

As of January 28, 2022, the net deferred tax liability balance was $43 million and is presented as deferred income taxes on the condensed and consolidated balance sheets. As of October 28, 2022, the net deferred tax asset balance is $3 million, which is presented in other assets on the condensed and consolidated balance sheets and is due to capitalization of certain research and development expenses required under the Tax Cuts and Jobs Act of 2017.

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Debt Obligations

9 Months Ended

Oct. 28, 2022

Debt Disclosure [Abstract]

Debt Obligations

Debt Obligations:

The Company’s long-term debt as of the dates presented was as follows:

	October 28, 2022										January 28, 2022
	Stated interest rate		Effective interest rate		Principal		Unamortized debt issuance costs		Net		Principal		Unamortized debt issuance costs		Net
					(in millions)
Term Loan A Facility due June 2027	4.38	%	4.50	%	$	1,230	$	(5)	$	1,225	$	—	$	—	$	—
Term Loan A Facility due October 2023	—	%	—	%	—		—		—		785		(5)		780
Term Loan A2 Facility due October 2023	—	%	—	%	—		—		—		100		—		100
Term Loan B Facility due October 2025	5.01	%	5.22	%	488		(3)		485		983		(7)		976
Term Loan B2 Facility due March 2027	5.01	%	5.44	%	272		(4)		268		272		(5)		267
Senior Notes due April 2028	4.88	%	5.11	%	400		(5)		395		400		(5)		395
Total long-term debt					$	2,390	$	(17)	$	2,373	$	2,540	$	(22)	$	2,518
Less current portion					15		—		15		148		—		148
Total long-term debt, net of current portion					$	2,375	$	(17)	$	2,358	$	2,392	$	(22)	$	2,370

As of October 28, 2022, the Company has a $3.0 billion secured credit facility (the Credit Facility) consisting of a Term Loan A Facility due June 2027, a Term Loan B Facility due October 2025, a Term Loan B2 Facility due March 2027 (together, the Term Loan Facilities), and a $1.0 billion Revolving Credit Facility due June 2027. During the quarter, the Company made a $90 million voluntary principal prepayment on the Term Loan B Facility due October 2025. During the nine months ended October 28, 2022, the Company borrowed and repaid $200 million under the Revolving Credit Facility. There was no balance outstanding on the Revolving Credit Facility as of October 28, 2022. As of October 28, 2022, the Company was in compliance with the covenants under its Credit Facility.

On June 30, 2022, the Company executed the Fifth Amendment to the Third Amended and Restated Credit Agreement (Fifth Amendment), which established, among other things, a $1,230 million senior secured term loan credit facility (Term Loan A Facility due June 2027) and increased the Revolving Credit Facility commitment from $400 million to $1,000 million. The entire Term Loan A Facility due June 2027 was immediately borrowed by the Company and the proceeds were used to pay in full the outstanding principal balances under the Term Loan A Facility due October 2023 and Term Loan A2 Facility due October 2023 and to prepay $400 million of principal on the Term Loan B Facility due October 2025. For the three months ended July 29, 2022, the Company wrote off deferred debt issuance costs of $3 million associated with the Term Loan B Facility due October 2025 voluntary principal prepayments which was recognized in interest expense.

Borrowings under the Term Loan A Facility due June 2027 amortize quarterly beginning on October 31, 2023 at 1.250% of the original borrowed amount thereunder, with such quarterly amortization increasing to 1.875% on October 31, 2024 and to 2.500% on October 31, 2025. The Term Loan A Facility due June 2027 may be prepaid at any time without penalty and is subject to the same mandatory prepayments, including from excess cash flow, as the Company’s existing term loans under the Credit Facility.

As a result of the Fifth Amendment, the maturity date for the Revolving Credit Facility was extended to, and the maturity date of the Term Loan A Facility due June 2027 is, the earlier of June 30, 2027 or 91 days prior to the earliest term loan “B” facility maturity date (subject to acceleration in certain circumstances). The Term Loan A Facility due June 2027 is secured by substantially all of the assets of the Company and the Company’s wholly owned domestic subsidiaries, and is guaranteed by each of the Company’s wholly owned domestic subsidiaries. The Term Loan A Facility due June 2027 is subject to the same covenants and events of default as the Company’s existing term loans under the Credit Facility.

Effective with the Fifth Amendment, all interest rates under the Credit Facility transitioned from LIBOR to Term Secured Overnight Financing Rate (Term SOFR) plus 0.10% for US dollar denominated loans, Sterling Overnight Index Average (SONIA) for UK pound sterling denominated loans, and Euro Interbank Offered Rate (EURIBOR) for Euro denominated loans. The applicable interest rate margins under the Term Loan A Facility due June 2027 and the Revolving Credit Facility were reduced to a range from 0.75% to 1.75% per annum for Term SOFR, SONIA and EURIBOR loans, and from 0% to 0.75% per annum for base rate loans, in each case based on the Company’s leverage ratio. Commitment fees for undrawn amounts under the Revolving Credit Facility were also reduced to a range of 0.125% to 0.25% per annum based on the Company’s leverage ratio.

During the nine months ended October 28, 2022, the Company incurred $8 million of debt issuance costs associated with the Fifth Amendment, of which $2 million was recognized in interest expense, with the remaining $6 million deferred and amortized to interest expense through the maturity date of the facility utilizing the effective interest rate method.

As of October 28, 2022 and January 28, 2022, the carrying value of the Company’s outstanding debt obligations approximated its fair value. The fair value of long-term debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s Term Loan Facilities and Senior Notes.

Maturities of long-term debt as of October 28, 2022 are:

Fiscal Year	Total
	(in millions)
Remainder of 2023	$	—
2024	31
2025	77
2026	596
2027	123
Thereafter	1,563
Total principal payments	$	2,390

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Derivative Instruments Designated as Cash Flow Hedges

9 Months Ended

Oct. 28, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments Designated as Cash Flow Hedges

Derivative Instruments Designated as Cash Flow Hedges:

The Company’s derivative instruments designated as cash flow hedges consist of:

							Fair Value of Asset (Liability)(1) at
	Notional Amount at October 28, 2022		Pay Fixed Rate		Receive Variable Rate	Settlement and Termination	October 28, 2022		January 28, 2022
	(in millions)						(in millions)
Interest rate swaps #1	$	685	2.96	%	Term SOFR	Monthly through October 31, 2025	$	23	$	(39)
Interest rate swaps #2	525		2.36	%	Term SOFR	Monthly through October 31, 2023	11		(12)
Total	$	1,210					$	34	$	(51)

(1)    The fair value of the fixed interest rate swap asset is included in other assets on the condensed and consolidated balance sheets. The fair value of the fixed interest rate swap liability is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate debt. The counterparties to all swap agreements are financial institutions.

On June 30, 2022 and in conjunction with the Fifth Amendment, the Company transitioned the variable rate on its interest rate swaps from 1-month LIBOR to 1-month Term SOFR. Effective with the transition, the Company will pay fixed rates of 2.96% and 2.36% on the group of interest rate swaps maturing on October 31, 2025 and October 31, 2023, respectively. The Company elected to apply the optional expedient in ASC 848 in connection with transitioning its interest rate swaps from LIBOR to Term SOFR that enabled it to consider the new swaps a continuation of the existing contracts. As a result, the transition did not have an impact on the Company’s hedge accounting or a material impact to the Company’s financial statements.

See Note 9 for the unrealized change in fair values on cash flow hedges recognized in other comprehensive income (loss) and the amounts reclassified from accumulated other comprehensive income (loss) into earnings for the current and comparative periods presented. The Company estimates that it will reclassify $22 million of unrealized gains from accumulated other comprehensive income into earnings in the twelve months following October 28, 2022.

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Changes in Accumulated Other Comprehensive Income by Component

9 Months Ended

Oct. 28, 2022

Equity [Abstract]

Changes in Accumulated Other Comprehensive Income by Component

Changes in Accumulated Other Comprehensive Income (Loss) by Component:

The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8 and the Company's defined benefit plans.

	Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1)		Defined Benefit Obligation Adjustment		Total
	(in millions)
Three months ended October 28, 2022
Balance at July 29, 2022	$	(4)	$	1	$	(3)
Other comprehensive income before reclassifications	38		—		38
Amounts reclassified from accumulated other comprehensive loss	1		—		1
Income tax impact	(10)		—		(10)
Net other comprehensive income	29		—		29
Balance at October 28, 2022	$	25	$	1	$	26
Three months ended October 29, 2021
Balance at July 30, 2021	$	(71)	$	(3)	$	(74)
Other comprehensive income before reclassifications	13		—		13
Amounts reclassified from accumulated other comprehensive loss	9		—		9
Income tax impact	(5)		—		(5)
Net other comprehensive income	17		—		17
Balance at October 29, 2021	$	(54)	$	(3)	$	(57)
Nine months ended October 28, 2022
Balance at January 28, 2022	$	(38)	$	1	$	(37)
Other comprehensive income before reclassifications	72		—		72
Amounts reclassified from accumulated other comprehensive loss	13		—		13
Income tax impact	(22)		—		(22)
Net other comprehensive income	63		—		63
Balance at October 28, 2022	$	25	$	1	$	26
Nine months ended October 29, 2021
Balance at January 29, 2021	$	(86)	$	(3)	$	(89)
Other comprehensive income before reclassifications	17		—		17
Amounts reclassified from accumulated other comprehensive loss	26		—		26
Income tax impact	(11)		—		(11)
Net other comprehensive income	32		—		32
Balance at October 29, 2021	$	(54)	$	(3)	$	(57)

(1)The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense.

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Sale of Receivables (Notes)

9 Months Ended

Oct. 28, 2022

Receivables [Abstract]

Sales of Receivables

Sales of Receivables:

The Company has a Master Accounts Receivable Purchase Agreement (MARPA Facility) with MUFG Bank, Ltd. (the Purchaser) for the sale of up to a maximum amount of $300 million of certain designated eligible receivables with the U.S. government. Effective March 31, 2022, the Company amended the MARPA Facility to transition the purchase discount rate defined within the facility agreement from using LIBOR to Term SOFR. The amendment did not have a material impact on the Company's financial statements.

During the nine months ended October 28, 2022 and October 29, 2021, the Company incurred purchase discount fees of $4 million and $2 million, respectively, which are presented in Other (income) expense, net on the condensed and consolidated statements of income.

MARPA Facility activity consisted of the following:

	Nine Months Ended
	October 28, 2022		October 29, 2021
	(in millions)
Beginning balance	$	200	$	185
Sale of receivables	2,776		2,484
Cash collections	(2,716)		(2,469)
Outstanding balance sold to Purchaser(1)	260		200
Cash collected, not remitted to Purchaser(2)	(15)		(31)
Remaining sold receivables	$	245	$	169

(1)    For the nine months ended October 28, 2022 and October 29, 2021, the Company recorded a net increase to cash flows from operating activities of $60 million and $15 million, respectively, from sold receivables.

(2)    Primarily represents the cash collected on behalf of but not yet remitted to the Purchaser as of October 28, 2022 and October 29, 2021. This balance is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

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Legal Proceedings and Other Commitments and Contingencies

9 Months Ended

Oct. 28, 2022

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings and Other Commitments and Contingencies

Legal Proceedings and Other Commitments and Contingencies:

Legal Proceedings

The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

AAV Termination for Convenience

On August 27, 2018, the Company received a stop-work order from the United States Marine Corps on the Assault Amphibious Vehicle (AAV) contract and on October 3, 2018 the program was terminated for convenience by the customer. The Company is continuing to negotiate with the Marine Corps to recover costs associated with the termination.

Government Investigations, Audits and Reviews

The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect, in particular, to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the United States. U.S. government agencies, including the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review the adequacy of the contractor’s compliance with government standards for its business systems. Adverse findings in these investigations, audits, or reviews can lead to criminal, civil or administrative proceedings, and the Company could face disallowance of previously billed costs, penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. Due to the Company’s reliance on government contracts, adverse findings could also have a material impact on the Company’s business, including its financial position, results of operations and cash flows.

The indirect cost audits by the DCAA of the Company’s business remain open for certain prior years and the current year. Although the Company has recorded contract revenues based on an estimate of costs that the Company believes will be approved on final audit, the Company does not know the outcome of any ongoing or future audits. If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected.

As of October 28, 2022, the Company believes it has adequately reserved for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with U.S. government Cost Accounting Standards.

Letters of Credit and Surety Bonds

The Company has outstanding obligations relating to letters of credit of $9 million as of October 28, 2022, principally related to guarantees on insurance policies. The Company also has outstanding obligations relating to surety bonds of $19 million, principally related to performance and payment bonds on the Company’s contracts.

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Business Overview and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Oct. 28, 2022

Accounting Policies [Abstract]

Segment Reporting

The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. Each of the Company’s two customer facing operating sectors is focused on providing both (1) growth and technology accelerating solutions and (2) core IT service offerings to one or more agencies of the U.S. federal government. Growth and technology accelerating solutions include the delivery of secure cloud modernization, outcome based enterprise IT as-a-service, and the integration, production and modernization of defense systems. Core IT services include systems engineering, the operation and maintenance of existing IT systems and networks, and logistics and supply chain solutions.

Basis of Presentation

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP).

Consolidation

All intercompany transactions and account balances within the Company have been eliminated.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates.

Reporting Periods

The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2023 began on January 29, 2022 and ends on February 3, 2023, while fiscal 2022 began on January 30, 2021 and ended on January 28, 2022.

Operating Cycle

The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts.

Derivative Instruments Designated as Cash Flow Hedges

Derivative instruments are recorded on the condensed and consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions.

The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges.

Marketable Securities

Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1). As of October 28, 2022 and January 28, 2022, the fair value of our investments totaled $26 million and $28 million, respectively, and are included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities.

Business Combinations Policy

Acquisition and Integration Costs

Acquisition-related costs that are not part of the purchase price consideration are generally expensed as incurred, except for certain costs that are deferred in connection with the issuance of debt. These costs typically include transaction-related costs, such as finder’s fees, legal, accounting, and other professional costs. Integration-related costs represent costs directly related to combining the Company and its acquired businesses. Integration-related costs typically include strategic consulting services, facility consolidations, employee-related costs, such as retention and severance, costs to integrate information technology infrastructure, enterprise planning systems, processes, and other non-recurring integration-related costs. Acquisition and integration costs are presented together as acquisition and integration costs on the condensed and consolidated statements of income.

Accounting Standards Updates

Accounting Standards Updates

In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50), which requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. These amendments are effective for fiscal years beginning after December 15, 2022, except for the requirement to provide rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured at the acquisition date in accordance with Topic 606 as if the acquirer had originated the contracts. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and must be applied prospectively. Early adoption is permitted. The Company adopted the requirements of ASU 2021-08 on a prospective basis effective the first day of fiscal 2023.

Earnings Per Share

Basic EPS is computed by dividing net income attributable to common stockholders by the basic weighted-average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards.

Change in Estimates and Disaggregation of Revenues

Changes in Estimates on Contracts

Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can occur routinely over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated.

Many of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss.

Disaggregation of RevenuesThe Company's revenues are generated primarily from long-term contracts with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company disaggregates revenues by customer, contract-type and prime versus subcontractor to the federal government.

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Business Overview and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Oct. 28, 2022

Accounting Policies [Abstract]

Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed and consolidated balance sheets for the periods presented:

	October 28, 2022		January 28, 2022
	(in millions)
Cash and cash equivalents	$	53	$	106
Restricted cash included in inventory, prepaid expenses and other current assets	5		5
Restricted cash included in other assets	4		4
Cash, cash equivalents and restricted cash	$	62	$	115

Business Combination, Separately Recognized Transactions [Table Text Block]

The amounts recognized in acquisition and integration costs on the condensed and consolidated statements of income are as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Acquisition(1)	$	(1)	$	—	$	(2)	$	3
Integration(2)	2		12		13		33
Total acquisition and integration costs	$	1	$	12	$	11	$	36

(1)    Acquisition expenses for the three and nine months ended October 28, 2022 reflects amounts recognized to reduce the fair value of the Koverse earnout liability. Acquisition expenses for the nine months ended October 29, 2021 are related to the acquisitions of Halfaker and Koverse. See Note 4 for additional information related to the acquisitions.

(2)    Integration expenses for the nine months ended October 29, 2021 include $10 million for the impairment of assets.

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Earnings Per Share, Share Repurchases and Dividends (Tables)

9 Months Ended

Oct. 28, 2022

Earnings Per Share [Abstract]

Reconciliation of Weighted Average Number of Shares Outstanding Used to Compute Basic and Diluted EPS

The following table provides a reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

	Three Months Ended		Nine Months Ended
	October 28, 2022	October 29, 2021	October 28, 2022	October 29, 2021
	(in millions)
Basic weighted-average number of shares outstanding	55.0	57.5	55.6	57.8
Dilutive common share equivalents - stock options and other stock-based awards	0.5	0.5	0.4	0.6
Diluted weighted-average number of shares outstanding	55.5	58.0	56.0	58.4

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Revenues (Tables)

9 Months Ended

Oct. 28, 2022

Revenue from Contract with Customer [Abstract]

Disaggregated Revenues

Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions, except per share amounts)
Net (unfavorable) favorable adjustments	$	(6)	$	—	$	4	$	9
Net (unfavorable) favorable adjustments, after tax	(5)		—		3		7
Diluted EPS impact	$	(0.09)	$	—	$	0.05	$	0.12

Disaggregated revenues by customer were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Department of Defense	$	969	$	920	$	2,799	$	2,740
Other federal government agencies	903		940		2,827		2,762
Commercial, state and local	37		38		110		110
Total	$	1,909	$	1,898	$	5,736	$	5,612

Disaggregated revenues by contract-type were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Cost reimbursement	$	1,071	$	1,045	$	3,201	$	3,028
Time and materials (T&M)	363		363		1,077		1,139
Firm-fixed price (FFP)	475		490		1,458		1,445
Total	$	1,909	$	1,898	$	5,736	$	5,612

Disaggregated revenues by prime versus subcontractor were as follows:

	Three Months Ended				Nine Months Ended
	October 28, 2022		October 29, 2021		October 28, 2022		October 29, 2021
	(in millions)
Prime contractor to federal government	$	1,725	$	1,722	$	5,212	$	5,069
Subcontractor to federal government	147		138		414		433
Other	37		38		110		110
Total	$	1,909	$	1,898	$	5,736	$	5,612

Contract Related Assets and Liabilities

Contract balances for the periods presented were as follows:

	Balance Sheet line item	October 28, 2022		January 28, 2022
		(in millions)
Billed and billable receivables, net(1)	Receivables, net	$	580	$	615
Contract assets - unbillable receivables	Receivables, net	479		400
Contract assets - contract retentions	Other assets	16		17
Contract liabilities - current	Accounts payable and accrued liabilities	35		55
Contract liabilities - non-current	Other long-term liabilities	$	5	$	9

(1)    Net of allowance of $3 million and $4 million as of October 28, 2022 and January 28, 2022, respectively.

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Goodwill and Intangible Assets (Tables)

9 Months Ended

Oct. 28, 2022

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets

Intangible assets, all of which were finite-lived, consisted of the following:

	October 28, 2022						January 28, 2022
	Gross carrying value		Accumulated amortization		Net carrying value		Gross carrying value		Accumulated amortization		Net carrying value
	(in millions)
Customer relationships	$	1,467	$	(435)	$	1,032	$	1,467	$	(351)	$	1,116
Backlog	—		—		—		17		(10)		7
Developed technology	10		(2)		8		10		(2)		8
Trade name	1		(1)		—		1		—		1
Total intangible assets	$	1,478	$	(438)	$	1,040	$	1,495	$	(363)	$	1,132

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

As of October 28, 2022, the estimated future annual amortization expense related to intangible assets is as follows:

Fiscal Year	(in millions)
Remainder of 2023	$	31
2024	115
2025	115
2026	115
2027	115
Thereafter	549
Total	$	1,040

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Debt Obligations (Tables)

9 Months Ended

Oct. 28, 2022

Debt Disclosure [Abstract]

Long-term Debt

The Company’s long-term debt as of the dates presented was as follows:

	October 28, 2022										January 28, 2022
	Stated interest rate		Effective interest rate		Principal		Unamortized debt issuance costs		Net		Principal		Unamortized debt issuance costs		Net
					(in millions)
Term Loan A Facility due June 2027	4.38	%	4.50	%	$	1,230	$	(5)	$	1,225	$	—	$	—	$	—
Term Loan A Facility due October 2023	—	%	—	%	—		—		—		785		(5)		780
Term Loan A2 Facility due October 2023	—	%	—	%	—		—		—		100		—		100
Term Loan B Facility due October 2025	5.01	%	5.22	%	488		(3)		485		983		(7)		976
Term Loan B2 Facility due March 2027	5.01	%	5.44	%	272		(4)		268		272		(5)		267
Senior Notes due April 2028	4.88	%	5.11	%	400		(5)		395		400		(5)		395
Total long-term debt					$	2,390	$	(17)	$	2,373	$	2,540	$	(22)	$	2,518
Less current portion					15		—		15		148		—		148
Total long-term debt, net of current portion					$	2,375	$	(17)	$	2,358	$	2,392	$	(22)	$	2,370

Long-term Debt Maturities

Maturities of long-term debt as of October 28, 2022 are:

Fiscal Year	Total
	(in millions)
Remainder of 2023	$	—
2024	31
2025	77
2026	596
2027	123
Thereafter	1,563
Total principal payments	$	2,390

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Derivative Instruments Designated as Cash Flow Hedges (Tables)

9 Months Ended

Oct. 28, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The Company’s derivative instruments designated as cash flow hedges consist of:

							Fair Value of Asset (Liability)(1) at
	Notional Amount at October 28, 2022		Pay Fixed Rate		Receive Variable Rate	Settlement and Termination	October 28, 2022		January 28, 2022
	(in millions)						(in millions)
Interest rate swaps #1	$	685	2.96	%	Term SOFR	Monthly through October 31, 2025	$	23	$	(39)
Interest rate swaps #2	525		2.36	%	Term SOFR	Monthly through October 31, 2023	11		(12)
Total	$	1,210					$	34	$	(51)

(1)    The fair value of the fixed interest rate swap asset is included in other assets on the condensed and consolidated balance sheets. The fair value of the fixed interest rate swap liability is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

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Changes in Accumulated Other Comprehensive Income by Component (Tables)

9 Months Ended

Oct. 28, 2022

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8 and the Company's defined benefit plans.

	Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1)		Defined Benefit Obligation Adjustment		Total
	(in millions)
Three months ended October 28, 2022
Balance at July 29, 2022	$	(4)	$	1	$	(3)
Other comprehensive income before reclassifications	38		—		38
Amounts reclassified from accumulated other comprehensive loss	1		—		1
Income tax impact	(10)		—		(10)
Net other comprehensive income	29		—		29
Balance at October 28, 2022	$	25	$	1	$	26
Three months ended October 29, 2021
Balance at July 30, 2021	$	(71)	$	(3)	$	(74)
Other comprehensive income before reclassifications	13		—		13
Amounts reclassified from accumulated other comprehensive loss	9		—		9
Income tax impact	(5)		—		(5)
Net other comprehensive income	17		—		17
Balance at October 29, 2021	$	(54)	$	(3)	$	(57)
Nine months ended October 28, 2022
Balance at January 28, 2022	$	(38)	$	1	$	(37)
Other comprehensive income before reclassifications	72		—		72
Amounts reclassified from accumulated other comprehensive loss	13		—		13
Income tax impact	(22)		—		(22)
Net other comprehensive income	63		—		63
Balance at October 28, 2022	$	25	$	1	$	26
Nine months ended October 29, 2021
Balance at January 29, 2021	$	(86)	$	(3)	$	(89)
Other comprehensive income before reclassifications	17		—		17
Amounts reclassified from accumulated other comprehensive loss	26		—		26
Income tax impact	(11)		—		(11)
Net other comprehensive income	32		—		32
Balance at October 29, 2021	$	(54)	$	(3)	$	(57)

(1)The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense.

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Sale of Receivables (Tables)

9 Months Ended

Oct. 28, 2022

Receivables [Abstract]

Transfers Of Financial Assets Accounted For As Sales, Marpa

MARPA Facility activity consisted of the following:

	Nine Months Ended
	October 28, 2022		October 29, 2021
	(in millions)
Beginning balance	$	200	$	185
Sale of receivables	2,776		2,484
Cash collections	(2,716)		(2,469)
Outstanding balance sold to Purchaser(1)	260		200
Cash collected, not remitted to Purchaser(2)	(15)		(31)
Remaining sold receivables	$	245	$	169

(1)    For the nine months ended October 28, 2022 and October 29, 2021, the Company recorded a net increase to cash flows from operating activities of $60 million and $15 million, respectively, from sold receivables.

(2)    Primarily represents the cash collected on behalf of but not yet remitted to the Purchaser as of October 28, 2022 and October 29, 2021. This balance is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

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Business Overview and Summary of Significant Accounting Policies - Narrative (Detail) $ in Millions	3 Months Ended	9 Months Ended
	Oct. 28, 2022 USD ($)	Oct. 28, 2022 USD ($) segment	Jan. 28, 2022 USD ($)
Summary of Significant Accounting Policies [Line Items]
Number of operating segments | segment		2
Number of reportable segments | segment		1
Operating cycle (greater than)		1 year
Marketable securities | $	$ 26	$ 26	$ 28
Restructuring Charges | $	$ 5	$ 7
Forfeiture Support Associates J.V.
Summary of Significant Accounting Policies [Line Items]
Noncontrolling interest, ownership percentage (as a percent)	50.10%	50.10%

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Business Overview and Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Millions	Oct. 28, 2022	Jan. 28, 2022	Oct. 29, 2021	Jan. 29, 2021
Accounting Policies [Abstract]
Cash and cash equivalents	$ 53	$ 106
Restricted cash included in inventory, prepaid expenses and other current assets	5	5
Restricted cash included in other assets	4	4
Cash, cash equivalents and restricted cash	$ 62	$ 115	$ 157	$ 190

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Business Overview and Summary of Significant Accounting Policies - Business Combination, Separately Recognized Transactions (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Summary of Significant Accounting Policies [Line Items]
Acquisition costs	$ (1)	$ 0	$ (2)	$ 3
Integration costs	2	12	13	33
Acquisition and integration costs	$ 1	$ 12	$ 11	36
Asset Impairment
Summary of Significant Accounting Policies [Line Items]
Integration costs				$ 10

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Earnings Per Share, Share Repurchases and Dividends - Reconciliation of Weighted Average Number of Shares Outstanding Used to Compute Basic and Diluted EPS (Details) - shares shares in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Earnings Per Share [Abstract]
Basic weighted-average number of shares outstanding (in shares)	55.0	57.5	55.6	57.8
Dilutive common share equivalents - stock options and other stock-based awards (in shares)	0.5	0.5	0.4	0.6
Weighted Average Number of Shares Outstanding, Diluted	55.5	58.0	56.0	58.4

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Earnings Per Share, Share Repurchases and Dividends (Detail) - $ / shares		3 Months Ended		9 Months Ended
	Nov. 29, 2022	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021	Jun. 21, 2022
Computation Of Earnings Per Share [Line Items]
Cash dividends declared per share (in dollars per share)		$ 0.37	$ 0.37	$ 1.11	$ 1.11
Cash dividends paid per share (in dollars per share)		$ 0.37	$ 0.37	$ 1.11	$ 1.11
Employee Stock
Computation Of Earnings Per Share [Line Items]
Antidilutive stock options excluded (in shares)		0	0
Stock Repurchase Plan
Computation Of Earnings Per Share [Line Items]
Increase in number of shares authorized to be repurchased under the repurchase plan (in shares)						8,000,000
Shares repurchased under the repurchase plan (in shares)				16,500,000
Stock Repurchase Plan | Maximum
Computation Of Earnings Per Share [Line Items]
Stock Repurchase Program, Number of Shares Authorized to be Repurchased						24,400,000
Dividend Declared | Subsequent Event
Computation Of Earnings Per Share [Line Items]
Cash dividends paid per share (in dollars per share)	$ 0.37

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Revenues - Change in Estimates (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Disaggregation of Revenue [Line Items]
Net (unfavorable) favorable adjustments	$ 133	$ 114	$ 383	$ 377
Net income	$ 80	$ 71	$ 226	$ 234
Diluted (in dollars per share)	$ 1.45	$ 1.22	$ 4.04	$ 4.01
Contract with customer, performance obligation satisfied in previous period	$ 2	$ 1	$ 7	$ 21
Change in Accounting Method Accounted for as Change in Estimate
Disaggregation of Revenue [Line Items]
Net (unfavorable) favorable adjustments	(6)	0	4	9
Net income	$ (5)	$ 0	$ 3	$ 7
Diluted (in dollars per share)	$ (0.09)	$ 0	$ 0.05	$ 0.12

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Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,909	$ 1,898	$ 5,736	$ 5,612
Prime contractor to federal government
Disaggregation of Revenue [Line Items]
Total revenues	1,725	1,722	5,212	5,069
Subcontractor to federal government
Disaggregation of Revenue [Line Items]
Total revenues	147	138	414	433
Other
Disaggregation of Revenue [Line Items]
Total revenues	37	38	110	110
Cost reimbursement
Disaggregation of Revenue [Line Items]
Total revenues	1,071	1,045	3,201	3,028
Time and materials (T&M)
Disaggregation of Revenue [Line Items]
Total revenues	363	363	1,077	1,139
Firm-fixed price (FFP)
Disaggregation of Revenue [Line Items]
Total revenues	475	490	1,458	1,445
Department of Defense
Disaggregation of Revenue [Line Items]
Total revenues	969	920	2,799	2,740
Other federal government agencies
Disaggregation of Revenue [Line Items]
Total revenues	903	940	2,827	2,762
Commercial, state and local
Disaggregation of Revenue [Line Items]
Total revenues	$ 37	$ 38	$ 110	$ 110

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Revenues - Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Contract with customer, performance obligation satisfied in previous period	$ 2	$ 1	$ 7	$ 21
Revenue recognized	4	8	39	72
Remaining performance obligation	5,000		5,000
Revenue from exercise of purchase options			23
Lease income	$ 0	$ 3	$ 0	$ 14
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-29
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue, remaining performance obligation (percent)	85.00%		85.00%
Revenue, remaining performance obligation, period	12 months		12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-29
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Revenue, remaining performance obligation (percent)	95.00%		95.00%
Revenue, remaining performance obligation, period	24 months		24 months

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Revenues - Contract Related Assets and Liabilities (Details) - USD ($) $ in Millions	Oct. 28, 2022	Jan. 28, 2022
Disaggregation of Revenue [Line Items]
Allowance for doubtful accounts	$ 3	$ 4
Receivables, net
Disaggregation of Revenue [Line Items]
Billed and billable receivables, net	580	615
Contract assets	479	400
Accounts payable and accrued liabilities
Disaggregation of Revenue [Line Items]
Contract liabilities - current	35	55
Other long-term liabilities
Disaggregation of Revenue [Line Items]
Contract liabilities - non-current	5	9
Contract retentions | Other assets
Disaggregation of Revenue [Line Items]
Contract assets	$ 16	$ 17

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Revenues - Remaining Performance Obligations (Details)	Oct. 28, 2022
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-29
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation (percent)	85.00%
Revenue, remaining performance obligation, period	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-29
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation (percent)	95.00%
Revenue, remaining performance obligation, period	24 months

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Acquisitions (Details) - USD ($) $ in Millions			3 Months Ended			9 Months Ended
	Jul. 02, 2021	May 03, 2021	Oct. 28, 2022	Jul. 29, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired						$ 0	$ 247
Post-Combination Expense, Recognized			$ 11			11
Amortization of intangible assets			29		$ 33	94	94
Halfaker and Associates, LLC
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired	$ 228
Cash Acquired in Excess of Payments to Acquire Business	3
Goodwill, Purchase Accounting Adjustments				$ 2
Goodwill acquired	104
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	114
Business Combination, Additional Cash Payments						21
Halfaker and Associates, LLC | Backlog
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 17
Finite-Lived Intangible Asset, Useful Life	1 year
Halfaker and Associates, LLC | Customer relationships
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles	$ 97
Finite-Lived Intangible Asset, Useful Life	9 years
Koverse
Business Acquisition [Line Items]
Payments to Acquire Businesses, Net of Cash Acquired		$ 30
Cash Acquired in Excess of Payments to Acquire Business		2
Goodwill acquired		21
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles		$ 10
Finite-Lived Intangible Asset, Useful Life		7 years
Business Combination, Additional Cash Payments		$ 27
Business Combination, Contingent Consideration, Liability		3
Post-Combination Expense		$ 13
Unisys Federal [Member]
Business Acquisition [Line Items]
Amortization of intangible assets			4		$ 9	6	$ 17
Intangible assets expected to be amortized			$ 7			$ 7

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Goodwill and Intangible Assets (Details) - USD ($)		3 Months Ended		9 Months Ended
	Jan. 28, 2022	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 2,913,000,000	$ 2,911,000,000		$ 2,911,000,000
Goodwill impairment				0	$ 0
Amortization of intangible assets		$ 29,000,000	$ 33,000,000	94,000,000	$ 94,000,000
Impairment of intangible assets	$ 0			$ 0

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Goodwill and Intangible Assets Intangible Assets (Details) - USD ($) $ in Millions	Oct. 28, 2022	Jan. 28, 2022
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	$ 1,478	$ 1,495
Accumulated amortization	(438)	(363)
Net carrying value	1,040	1,132
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	1,467	1,467
Accumulated amortization	(435)	(351)
Net carrying value	1,032	1,116
Backlog
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	0	17
Accumulated amortization	0	(10)
Net carrying value	0	7
Developed technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	10	10
Accumulated amortization	(2)	(2)
Net carrying value	8	8
Trade name
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	1	1
Accumulated amortization	(1)	0
Net carrying value	$ 0	$ 1

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Goodwill and Intangible Assets Intangible Assets Amortization (Details) - USD ($) $ in Millions	Oct. 28, 2022	Jan. 28, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Remainder of 2023	$ 31
2024	115
2025	115
2026	115
2027	115
Thereafter	549
Net carrying value	$ 1,040	$ 1,132

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Income Taxes (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021	Jan. 28, 2022
Income Tax Contingency [Line Items]
Effective income tax rate	20.30%	19.40%	21.30%	22.00%
Deferred income taxes	$ 0		$ 0		$ 43
Other assets
Income Tax Contingency [Line Items]
Net deferred tax asset	$ 3		$ 3

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Debt Obligations - Long-term Debt (Detail) - USD ($) $ in Millions	Oct. 28, 2022	Jun. 30, 2022	Jan. 28, 2022
Debt Instrument [Line Items]
Principal amount of long-term debt	$ 2,390.0		$ 2,540.0
Unamortized debt issuance costs, total long-term debt	(17.0)		(22.0)
Total long-term debt	2,373.0		2,518.0
Less current portion	15.0		148.0
Debt Issuance Costs, Current, Net	0.0		0.0
Principal amount of long-term debt, net of current portion	2,375.0		2,392.0
Unamortized debt issuance costs, total long-term debt, net of current portion	(17.0)		(22.0)
Total long-term debt, net of current portion	$ 2,358.0		2,370.0
Term Loan A Facility due June 2027
Debt Instrument [Line Items]
Stated interest rate	4.38%
Effective interest rate	4.50%
Principal amount of long-term debt	$ 1,230.0	$ 1,230.0	0.0
Unamortized debt issuance costs, total long-term debt	(5.0)		0.0
Total long-term debt	$ 1,225.0		0.0
Term Loan A Facility Commitment Due October Two Thousand Twenty Three
Debt Instrument [Line Items]
Stated interest rate	0.00%
Effective interest rate	0.00%
Principal amount of long-term debt	$ 0.0		785.0
Unamortized debt issuance costs, total long-term debt	0.0		(5.0)
Total long-term debt	$ 0.0		780.0
Term Loan A2 Facility Due October Two Thousand Twenty Three
Debt Instrument [Line Items]
Stated interest rate	0.00%
Effective interest rate	0.00%
Principal amount of long-term debt	$ 0.0		100.0
Unamortized debt issuance costs, total long-term debt	0.0		0.0
Total long-term debt	$ 0.0		100.0
Term Loan B Facility Due October Two Thousand Twenty Five
Debt Instrument [Line Items]
Stated interest rate	5.01%
Effective interest rate	5.22%
Principal amount of long-term debt	$ 488.0		983.0
Unamortized debt issuance costs, total long-term debt	(3.0)		(7.0)
Total long-term debt	$ 485.0		976.0
Term Loan B2 Facility Due March Two Thousand Twenty Seven [Member]
Debt Instrument [Line Items]
Stated interest rate	5.01%
Effective interest rate	5.44%
Principal amount of long-term debt	$ 272.0		272.0
Unamortized debt issuance costs, total long-term debt	(4.0)		(5.0)
Total long-term debt	$ 268.0		267.0
Senior Notes Due April Two Thousand Twenty Eight
Debt Instrument [Line Items]
Stated interest rate	4.88%
Effective interest rate	5.11%
Principal amount of long-term debt	$ 400.0		400.0
Unamortized debt issuance costs, total long-term debt	(5.0)		(5.0)
Total long-term debt	$ 395.0		$ 395.0

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Debt Obligations - Narrative (Detail) - USD ($)		3 Months Ended	9 Months Ended
	Jun. 30, 2022	Oct. 28, 2022	Oct. 28, 2022	Jan. 28, 2022
Debt Instrument [Line Items]
Long-term Debt, Gross		$ 2,390,000,000	$ 2,390,000,000	$ 2,540,000,000
Term Loan A Facility due June 2027
Debt Instrument [Line Items]
Long-term Debt, Gross	$ 1,230,000,000	$ 1,230,000,000	$ 1,230,000,000	0
Term Loan A Facility due June 2027 | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Debt Instrument, Amortization Rate		1.25%	1.25%
Term Loan A Facility due June 2027 | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Debt Instrument, Amortization Rate		1.875%	1.875%
Term Loan A Facility due June 2027 | Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Debt Instrument, Amortization Rate		2.50%	2.50%
Term Loan B Facility Due October Two Thousand Twenty Five
Debt Instrument [Line Items]
Long-term Debt, Gross		$ 488,000,000	$ 488,000,000	$ 983,000,000
Payment for Debt Extinguishment or Debt Prepayment Cost	400,000,000
Write off of Deferred Debt Issuance Cost		3,000,000
Revolving Credit Facility | Minimum
Debt Instrument [Line Items]
Line of Credit Facility, Commitment Fee Percentage			0.125%
Revolving Credit Facility | Maximum
Debt Instrument [Line Items]
Line of Credit Facility, Commitment Fee Percentage			0.25%
Line of Credit [Member] | Term Loan B Facility Due October Two Thousand Twenty Five
Debt Instrument [Line Items]
Payments on term debt		90,000,000
Line of Credit [Member] | The Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		3,000,000,000	$ 3,000,000,000
Line of Credit [Member] | The Credit Facility | Secured Overnight Financing Rate (SOFR)
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate			0.10%
Fifth Amendment Credit Agreement
Debt Instrument [Line Items]
Debt Issuance Costs, Gross		8,000,000	$ 8,000,000
Debt Issuance Costs, Deferred And Amortized To Interest Expense		6,000,000	6,000,000
Debt Issuance Costs, Interest Expense		2,000,000	2,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity	1,000,000,000
Proceeds from Lines of Credit			$ 200,000,000
Line of Credit Facility, Current Borrowing Capacity	$ 400,000,000
Revolving Credit Facility | Line of Credit [Member] | Term Loan A Facility due June 2027 | Secured Overnight Financing Rate (SOFR) | Minimum
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate			0.75%
Revolving Credit Facility | Line of Credit [Member] | Term Loan A Facility due June 2027 | Secured Overnight Financing Rate (SOFR) | Maximum
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate			1.75%
Revolving Credit Facility | Line of Credit [Member] | Term Loan A Facility due June 2027 | Base Rate [Member] | Minimum
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate			0.00%
Revolving Credit Facility | Line of Credit [Member] | Term Loan A Facility due June 2027 | Base Rate [Member] | Maximum
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate			0.75%
Revolving Credit Facility | Line of Credit [Member] | The Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity		1,000,000,000	$ 1,000,000,000
Long-Term Line of Credit		$ 0	$ 0

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Debt Obligations - Long-term Debt Maturities (Details) - USD ($) $ in Millions	Oct. 28, 2022	Jan. 28, 2022
Debt Disclosure [Abstract]
Long-Term Debt, Maturity, Remainder of Fiscal Year	$ 0.0
Long-Term Debt, Maturity, Year One	31.0
Long-Term Debt, Maturity, Year Two	77.0
Long-Term Debt, Maturity, Year Three	596.0
Long-Term Debt, Maturity, Year Four	123.0
Long-Term Debt, Maturity, after Year Four	1,563.0
Long-term Debt, Gross	$ 2,390.0	$ 2,540.0

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Derivative Instruments Designated as Cash Flow Hedges - Schedule of Derivative Instruments (Detail) - USD ($) $ in Millions	9 Months Ended
	Oct. 28, 2022	Jun. 30, 2022	Jan. 28, 2022
Derivative [Line Items]
Notional amount	$ 1,210
Asset Fair Value	34		$ (51)
Interest rate swaps #1 | Interest Rate Swaps
Derivative [Line Items]
Notional amount	$ 685
Pay fixed rate	2.96%	2.96%
Receive variable rate	Term SOFR
Settlement and termination	Monthly through October 31, 2025
Asset Fair Value	$ 23		(39)
Interest rate swaps #2 | Interest Rate Swaps
Derivative [Line Items]
Notional amount	$ 525
Pay fixed rate	2.36%	2.36%
Receive variable rate	Term SOFR
Settlement and termination	Monthly through October 31, 2023
Asset Fair Value	$ 11		$ (12)

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Derivative Instruments Designated as Cash Flow Hedges - Narrative (Detail) - Interest Rate Swaps - USD ($) $ in Millions	Oct. 28, 2022	Jun. 30, 2022
Derivative [Line Items]
Unrealized gains estimated to be reclassified from accumulated other comprehensive income into earnings in the next twelve months	$ 22
Interest rate swaps #1
Derivative [Line Items]
Pay fixed rate	2.96%	2.96%
Interest rate swaps #2
Derivative [Line Items]
Pay fixed rate	2.36%	2.36%

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Changes in Accumulated Other Comprehensive Income by Component (Detail) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Oct. 28, 2022	Oct. 29, 2021	Jul. 29, 2022	Jan. 28, 2022	Jul. 30, 2021	Jan. 29, 2021
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax	$ 26	$ (57)	$ 26	$ (57)	$ (3)	$ (37)	$ (74)	$ (89)
Other comprehensive income before reclassifications	38	13	72	17
Amounts reclassified from accumulated other comprehensive loss	1	9	13	26
Income tax impact	(10)	(5)	(22)	(11)
Net other comprehensive income	29	17	63	32
Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1)
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax	25	(54)	25	(54)	(4)	(38)	(71)	(86)
Other comprehensive income before reclassifications	38	13	72	17
Amounts reclassified from accumulated other comprehensive loss	1	9	13	26
Income tax impact	(10)	(5)	(22)	(11)
Net other comprehensive income	29	17	63	32
Defined Benefit Obligation Adjustment
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax	1	(3)	1	(3)	$ 1	$ 1	$ (3)	$ (3)
Other comprehensive income before reclassifications	0	0	0	0
Amounts reclassified from accumulated other comprehensive loss	0	0	0	0
Income tax impact	0	0	0	0
Net other comprehensive income	$ 0	$ 0	$ 0	$ 0

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Sale of Receivables (Details) - USD ($) $ in Millions	9 Months Ended
	Oct. 28, 2022	Oct. 29, 2021	Jan. 28, 2022	Jan. 29, 2021
Receivables [Abstract]
Maximum commitment	$ 300
Purchase discount fees	4	$ 2
Outstanding balance sold to Purchaser	260	200	$ 200	$ 185
Sale of receivables	2,776	2,484
Cash collections	(2,716)	(2,469)
Cash collected, not remitted to Purchaser(2)	(15)	(31)
Remaining sold receivables	245	169
Increase to cash flows from operating activities	$ 60	$ 15

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Legal Proceedings and Other Commitments and Contingencies (Detail) $ in Millions	Oct. 28, 2022 USD ($)
Letters of Credit
Commitments And Contingencies [Line Items]
Outstanding obligations	$ 9
Surety Bonds
Commitments And Contingencies [Line Items]
Outstanding obligations	$ 19