10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

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

For the quarterly period ended May 3, 2013

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.
001-33072	SAIC, Inc.		Delaware		20-3562868
	1710 SAIC Drive, McLean, Virginia 22102
	(703) 676-4300
000-12771	Science Applications International Corporation		Delaware		95-3630868
	1710 SAIC Drive, McLean, Virginia 22102
	(703) 676-4300

Former fiscal year: January 31

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.

SAIC, Inc.	Yes  x     No  ¨
Science Applications International Corporation	Yes  x     No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post such files).

SAIC, Inc.	Yes  x     No  ¨
Science Applications International Corporation	Yes  x     No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

SAIC, Inc.	Large accelerated filer	x	Accelerated filer	¨	Non-accelerated filer	¨	Smaller reporting company	¨
Science Applications International Corporation	Large accelerated filer	¨	Accelerated filer	¨	Non-accelerated filer	x	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

SAIC, Inc.	Yes  ¨     No  x
Science Applications International Corporation	Yes  ¨     No  x

The number of shares issued and outstanding of each issuer’s classes of common stock as of May 20, 2013 was as follows:

SAIC, Inc.	342,518,407 shares of common stock ($.0001 par value per share)
Science Applications International Corporation	5,000 shares of common stock ($.01 par value per share) held by SAIC, Inc.

Explanatory Note

This Quarterly Report on Form 10-Q is a combined report being filed by SAIC, Inc. (SAIC) and Science Applications International Corporation (Science Applications). SAIC is a holding company and Science Applications is a direct, 100%-owned subsidiary of SAIC. Each of SAIC and Science Applications is filing on its own behalf all of the information contained in this report that relates to such company. Where information or an explanation is provided that is substantially the same for each company, such information or explanation has been combined in this report. Where information or an explanation is not substantially the same for each company, separate information and explanation has been provided. In addition, separate condensed consolidated financial statements for each company, along with combined notes to the condensed consolidated financial statements, are included in this report. Unless indicated otherwise, references in this report to the “Company”, “we”, “us” and “our” refer collectively to SAIC, Science Applications and its consolidated subsidiaries.

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

SAIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions, except per share amounts)
Revenues	$	2,707		$	2,764
Costs and expenses:
Cost of revenues		2,378			2,433
Selling, general and administrative expenses		154			123
Separation transaction expenses		33			—
Operating income		142			208
Non-operating income (expense):
Interest income		4			2
Interest expense		(20	)		(29	)
Other income, net		1			2
Income before income taxes		127			183
Provision for income taxes		(46	)		(66	)
Net income	$	81		$	117
Earnings per share (Note 2):
Basic earnings per share	$	0.23		$	0.35
Diluted earnings per share	$	0.23		$	0.35
Cash dividends declared per share	$	1.12		$	0.12

See accompanying combined notes to condensed consolidated financial statements.

1

SAIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Net income	$	81	$	117
Other comprehensive income, net of tax:
Foreign currency translation adjustments		—		(1	)
Deferred taxes		—		1
Foreign currency translation adjustments, net of tax		—		—
Pension liability adjustments		—		16
Deferred taxes		—		(6	)
Pension liability adjustments, net of tax		—		10
Total other comprehensive income, net of tax		—		10
Comprehensive income	$	81	$	127

See accompanying combined notes to condensed consolidated financial statements.

2

SAIC, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	May 3, 2013			January 31, 2013
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	563		$	736
Receivables, net		2,063			1,889
Inventory, prepaid expenses and other current assets		393			454
Total current assets		3,019			3,079
Property, plant and equipment (less accumulated depreciation and amortization of $455 million and $442 million at May 3, 2013 and January 31, 2013, respectively)		315			318
Intangible assets, net		173			190
Goodwill		2,195			2,195
Deferred income taxes		14			14
Other assets		74			79
	$	5,790		$	5,875
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,211		$	1,249
Accrued payroll and employee benefits		448			542
Dividends payable		357			—
Notes payable and long-term debt, current portion		1			2
Total current liabilities		2,017			1,793
Notes payable and long-term debt, net of current portion		1,297			1,296
Other long-term liabilities		172			168
Commitments and contingencies (Notes 9 and 10)
Stockholders’ equity:
Common stock, $.0001 par value, 2 billion shares authorized, 342 million shares issued and outstanding at May 3, 2013 and January 31, 2013		—			—
Additional paid-in capital		2,124			2,110
Retained earnings		182			510
Accumulated other comprehensive loss		(2	)		(2	)
Total stockholders’ equity		2,304			2,618
	$	5,790		$	5,875

See accompanying combined notes to condensed consolidated financial statements.

3

SAIC, INC.

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

(UNAUDITED)

	Shares of common stock			Additional paid-in capital			Retained earnings			Accumulated other comprehensive loss			Total
	(in millions)
Balance at January 31, 2013		342		$	2,110		$	510		$	(2	)	$	2,618
Net income		—			—			81			—			81
Issuances of stock		1			6			—			—			6
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock		(1	)		(6	)		(10	)		—			(16	)
Cash dividends of $0.12 per share		—			—			(42	)		—			(42	)
Special cash dividend of $1.00 per share		—			—			(357	)		—			(357	)
Adjustments for income tax benefits from stock-based compensation		—			(10	)		—			—			(10	)
Stock-based compensation		—			24			—			—			24
Balance at May 3, 2013		342		$	2,124		$	182		$	(2	)	$	2,304

See accompanying combined notes to condensed consolidated financial statements.

4

SAIC, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Cash flows from operations:
Net income	$	81		$	117
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		30			27
Stock-based compensation		24			24
Impairment losses		4			—
Net gain on sales and disposals of assets		(7	)		(1	)
Other		(1	)		1
Increase (decrease) in cash and cash equivalents, net of effects of acquisitions and divestitures, resulting from changes in:
Receivables		(174	)		3
Inventory, prepaid expenses and other current assets		59			(16	)
Deferred income taxes		(1	)		—
Other assets		5			—
Accounts payable and accrued liabilities		(38	)		(554	)
Accrued payroll and employee benefits		(92	)		9
Income taxes payable		(3	)		28
Other long-term liabilities		2			1
Total cash flows used in operating activities of continuing operations		(111	)		(361	)
Cash flows from investing activities:
Expenditures for property, plant and equipment		(19	)		(8	)
Proceeds from sale of assets		25			—
Other		2			1
Total cash flows provided by (used in) investing activities of continuing operations		8			(7	)
Cash flows from financing activities:
Payments on notes payable and long-term debt		—			(1	)
Sales of stock		4			4
Repurchases of stock		(16	)		(19	)
Dividend payments		(41	)		(41	)
Total cash flows used in financing activities of continuing operations		(53	)		(57	)
Decrease in cash and cash equivalents from continuing operations		(156	)		(425	)
Cash flows from discontinued operations:
Cash used in operating activities of discontinued operations		(17	)		—
Decrease in cash and cash equivalents from discontinued operations		(17	)		—
Total decrease in cash and cash equivalents		(173	)		(425	)
Cash and cash equivalents at beginning of period		736			1,592
Cash and cash equivalents at end of period	$	563		$	1,167

See accompanying combined notes to condensed consolidated financial statements.

5

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Revenues	$	2,707		$	2,764
Costs and expenses:
Cost of revenues		2,378			2,433
Selling, general and administrative expenses		154			123
Separation transaction expenses		33			—
Operating income		142			208
Non-operating income (expense):
Interest income		4			2
Interest expense		(20	)		(29	)
Other income, net		1			2
Income before income taxes		127			183
Provision for income taxes		(46	)		(66	)
Net income	$	81		$	117

See accompanying combined notes to condensed consolidated financial statements.

6

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Net income	$	81	$	117
Other comprehensive income, net of tax:
Foreign currency translation adjustments		—		(1	)
Deferred taxes		—		1
Foreign currency translation adjustments, net of tax		—		—
Pension liability adjustments		—		16
Deferred taxes		—		(6	)
Pension liability adjustments, net of tax		—		10
Total other comprehensive income, net of tax		—		10
Comprehensive income	$	81	$	127

See accompanying combined notes to condensed consolidated financial statements.

7

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	May 3, 2013			January 31, 2013
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	563		$	736
Receivables, net		2,063			1,889
Inventory, prepaid expenses and other current assets		393			454
Total current assets		3,019			3,079
Property, plant and equipment (less accumulated depreciation and amortization of $455 million and $442 million at May 3, 2013 and January 31, 2013, respectively)		315			318
Intangible assets, net		173			190
Goodwill		2,195			2,195
Deferred income taxes		14			14
Other assets		74			79
Note receivable from SAIC, Inc. (Note 6)		16			—
	$	5,806		$	5,875
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	1,211		$	1,249
Accrued payroll and employee benefits		448			542
Notes payable and long-term debt, current portion		1			2
Total current liabilities		1,660			1,793
Notes payable and long-term debt, net of current portion		1,297			1,296
Notes payable to SAIC, Inc. (Note 6)		—			22
Other long-term liabilities		172			168
Commitments and contingencies (Notes 9 and 10)
Stockholders’ equity:
Common stock, $.01 par value, 10,000 shares authorized, 5,000 shares issued and outstanding at May 3, 2013 and January 31, 2013		—			—
Additional paid-in capital		233			233
Retained earnings		2,446			2,365
Accumulated other comprehensive loss		(2	)		(2	)
Total stockholders’ equity		2,677			2,596
	$	5,806		$	5,875

See accompanying combined notes to condensed consolidated financial statements.

8

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDER’S EQUITY

(UNAUDITED)

	Shares of common stock		Additional paid-in capital		Retained earnings		Accumulated other comprehensive loss			Total
	(in millions, except for share amounts)
Balance at January 31, 2013		5,000	$	233	$	2,365	$	(2	)	$	2,596
Net income		—		—		81		—			81
Other comprehensive income, net of tax		—		—		—		—			—
Balance at May 3, 2013		5,000	$	233	$	2,446	$	(2	)	$	2,677

See accompanying combined notes to condensed consolidated financial statements.

9

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Cash flows from operations:
Net income	$	81		$	117
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization		30			27
Stock-based compensation		24			24
Impairment losses		4			—
Net gain on sales and disposals of assets		(7	)		(1	)
Other		(1	)		1
Increase (decrease) in cash and cash equivalents, net of effects of acquisitions and divestitures, resulting from changes in:
Receivables		(174	)		3
Inventory, prepaid expenses and other current assets		59			(16	)
Deferred income taxes		(1	)		—
Other assets		5			—
Accounts payable and accrued liabilities		(38	)		(553	)
Accrued payroll and employee benefits		(92	)		9
Income taxes payable		(3	)		28
Other long-term liabilities		2			1
Total cash flows used in operating activities of continuing operations		(111	)		(360	)
Cash flows from investing activities:
Expenditures for property, plant and equipment		(19	)		(8	)
Proceeds from sale of assets		25			—
Other		2			1
Total cash flows provided by (used in) investing activities of continuing operations		8			(7	)
Cash flows from financing activities:
Proceeds from note payable to SAIC, Inc.		4			26
Payments on note payable to SAIC, Inc.		(57	)		(283	)
Payments on notes payable and long-term debt		—			(1	)
Total cash flows used in financing activities of continuing operations		(53	)		(258	)
Decrease in cash and cash equivalents from continuing operations		(156	)		(625	)
Cash flows from discontinued operations:
Cash used in operating activities of discontinued operations		(17	)		—
Decrease in cash and cash equivalents from discontinued operations		(17	)		—
Total decrease in cash and cash equivalents		(173	)		(625	)
Cash and cash equivalents at beginning of period		736			1,592
Cash and cash equivalents at end of period	$	563		$	967

See accompanying combined notes to condensed consolidated financial statements.

10

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1—Summary of Significant Accounting Policies:

Nature of Operations and Basis of Presentation

SAIC, Inc. (SAIC) is a holding company whose direct 100%-owned subsidiary is Science Applications International Corporation (Science Applications), a provider of scientific, engineering, systems integration and technical services and solutions in the areas of defense, health, energy, infrastructure, intelligence, surveillance, reconnaissance and cybersecurity to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security, and other U.S. Government civil agencies, state and local government agencies, foreign governments and customers in select commercial markets.

The condensed consolidated financial statements of SAIC include the accounts of its majority-owned and 100%-owned subsidiaries, including Science Applications. The condensed consolidated financial statements of Science Applications include the accounts of its majority-owned and 100%-owned subsidiaries. SAIC does not have separate operations, assets or liabilities independent of Science Applications, except for a note with Science Applications (the “related party note”), on which interest is recognized. From time to time, SAIC issues stock to employees of Science Applications and its subsidiaries, which is reflected in SAIC’s Condensed Consolidated Statement of Stockholders’ Equity and results in an increase to the related party note (see Note 6). All intercompany transactions and accounts have been eliminated in consolidation.

These Combined Notes to Condensed Consolidated Financial Statements apply to both SAIC and Science Applications. As SAIC consolidates Science Applications for financial statement purposes, disclosures that relate to activities of Science Applications also apply to SAIC. References to the “Company” refer collectively to SAIC, Science Applications, and its consolidated subsidiaries unless otherwise noted.

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and combined notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The preparation of 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. 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.

In the opinion of management, the financial information as of May 3, 2013 and for the three months ended May 3, 2013 and April 30, 2012 reflects all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. Operating results for the three months ended May 3, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2014, or any future period.

Reporting Periods

Unless otherwise noted, references to fiscal years are to fiscal years ended January 31, for fiscal 2013 and earlier periods, or fiscal years ended the Friday closest to January 31, for fiscal 2014 or later periods. For fiscal 2013, the Company’s fiscal quarters ended on the last calendar day of each of April, July and October. Effective in fiscal 2014, the Company changed its fiscal year to a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2014 began on February 1, 2013 and ends on January 31, 2014. The first quarter of fiscal 2014 ended on May 3, 2013. The Company does not believe that the change in its fiscal year has a material effect on the comparability of the periods presented.

Planned Separation Transaction

In August 2012, the Company announced that its board of directors authorized management to pursue a plan to separate into two independent, publicly traded companies. The proposed separation transaction is intended to take the form of a tax-free spin-off to SAIC stockholders of 100% of the shares of a newly formed company focused on technical, engineering and enterprise information technology (IT) services to the U.S. Government, as well as other public agencies. The separation is expected to occur in the latter half of calendar year 2013, subject to final approval of the board of directors and certain customary conditions, including receipt of an opinion from tax counsel and a ruling from the Internal Revenue Service (IRS) as to the tax-free nature of the transaction. Although the Company expects that the separation of its businesses will be consummated, there can be no assurance that a separation will ultimately occur. Upon completion of the separation transaction, the operating results of the separated business will be included in discontinued operations.

11

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The separation transaction expenses for the three months ended May 3, 2013 were as follows:

	Three Months Ended May 3, 2013
	(in millions)
Strategic advisory services	$	8
Legal and accounting services		6
Lease termination and facility consolidation expenses		14
Severance costs		5
Separation transaction expenses in operating income		33
Less: income tax benefit		(13	)
Separation transaction expenses, net of tax	$	20

In connection with the separation transaction, in the first quarter of fiscal 2014, the Company reduced headcount, which resulted in severance costs as reflected in the table above. Also, in connection with the separation transaction, the Company took actions during the first quarter of fiscal 2014 to reduce its real estate footprint by vacating facilities that are not necessary for its future requirements, which resulted in lease termination and facility consolidation expenses as reflected in the table above.

Consistent with the Company’s policy for acquisitions, the Company has recognized a tax benefit for the separation transaction expenses. Certain of the separation transaction expenses will be capitalized for tax purposes if the separation transaction is completed, resulting in a reversal of tax benefits previously recognized.

There were no separation transaction expenses for the three months ended April 30, 2012.

Receivables

The Company’s accounts receivable include unbilled receivables, which consist of costs and fees billable upon contract completion or the occurrence of a specified event, substantially all of which is expected to be billed and collected within one year. Unbilled receivables are stated at estimated realizable value. Since the Company’s receivables are primarily with the U.S. Government, the Company does not have a material credit risk exposure. Contract retentions are billed when the Company has negotiated final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Consequently, the timing of collection of retention balances is outside the Company’s control. Based on the Company’s historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant.

The Company has extended deferred payment terms with contractual maturities that may exceed one year to commercial customers related to certain construction projects. As of May 3, 2013, the Company had outstanding receivables from these customers with deferred payment terms of $152 million, which are expected to be collected in fiscal 2014 and fiscal 2015, when the customers have obtained financing.

When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded.

Changes in Estimates on Contracts

Changes in estimates related to certain types of contracts accounted for using the percentage of completion method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the contract performance period for a variety of reasons, including changes in contract scope, changes in contract cost estimates due to unanticipated cost growth or retirements of risk for amounts different than estimated, and changes in estimated incentive or award fees. Aggregate changes in contract estimates resulted in a decrease to operating income of $4 million ($0.01 per diluted share) for the three months ended May 3, 2013 and an increase to operating income of $4 million ($0.01 per diluted share) for the three months ended April 30, 2012.

Discontinued Operations

From time-to-time, the Company may dispose (or management may commit to plans to dispose) of non-strategic components of the business, which are reclassified as discontinued operations for all periods presented.

12

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In fiscal 2013, the Company sold certain components of its business, which were historically included in the Company’s Health and Engineering segment, primarily focused on providing operational test and evaluation services to U.S. Government customers.

The pre-sale operating results of this discontinued operation were as follows:

	Three Months Ended April 30, 2012
	(in millions)
Revenues	$	18
Costs and expenses:
Cost of revenues		15
Selling, general and administrative expenses		3
Operating income	$	—

Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above.

Supplementary Cash Flow Information

Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Vested stock issued as settlement of annual bonus accruals	$	2	$	2
Stock issued in lieu of cash dividend	$	1	$	1
Cash paid for interest	$	—	$	—
Cash paid for income taxes	$	2	$	8
Dividends payable for declared special cash dividend	$	357	$	—

Special Cash Dividend

In March 2013, SAIC’s board of directors declared a special cash dividend of $1.00 per share of SAIC common stock payable on June 28, 2013 to stockholders of record on June 14, 2013.

Sale and Leaseback Agreement

On May 3, 2013, the Company entered into a purchase and sale agreement relating to the sale of approximately 18 acres of land in Fairfax County, Virginia, including four office buildings, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as tangible personal property and third-party leases. This sale is expected to be completed in a series of transactions over approximately six years. Under the agreement, the Company will lease back from the buyer space in three of the office buildings over varying lease terms. The closing of the initial transaction is expected to occur in the second quarter of fiscal 2014.

Accounting Standards Updates Issued But Not Yet Adopted

Accounting standards and updates issued but not effective for the Company until after May 3, 2013 are not expected to have a material effect on the Company’s consolidated financial position or results of operations.

Note 2—Earnings Per Share (EPS):

The Company is required to allocate a portion of its earnings to its unvested stock awards containing nonforfeitable rights to dividends or dividend equivalents (participating securities) in calculating EPS using the two-class method. Unvested stock awards granted prior to fiscal 2013 are participating securities requiring application of the two-class method. In fiscal 2013, the Company began issuing unvested stock awards that have forfeitable rights to dividends or dividend equivalents. These stock awards are not participating securities requiring application of the two-class method, but are dilutive common share equivalents subject to the treasury stock method. Basic EPS is computed by dividing income less earnings allocable to

13

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

participating securities by the basic weighted average number of shares outstanding. Diluted EPS is computed similar 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.

A reconciliation of the income used to compute basic and diluted EPS for the periods presented was as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Basic EPS:
Net income, as reported	$	81		$	117
Less: allocation of distributed and undistributed earnings to participating securities		(4	)		(3	)
Net income, for computing basic EPS	$	77		$	114
Diluted EPS:
Net income, as reported	$	81		$	117
Less: allocation of distributed and undistributed earnings to participating securities		(4	)		(3	)
Net income, for computing diluted EPS	$	77		$	114

A reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Basic weighted average number of shares outstanding		336		330
Dilutive common share equivalents—stock options and other stock awards		—		—
Diluted weighted average number of shares outstanding		336		330

For the quarter ended May 3, 2013, the declared special dividend exceeded current period earnings. Therefore, the assumed exercise of 2 million stock options and stock awards was excluded from diluted weighted average shares outstanding because their inclusion would have been anti-dilutive.

The following stock-based awards were excluded from the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Antidilutive stock options excluded		20		21
Unvested stock awards excluded		2		—
Performance-based stock awards excluded		—		1

Note 3—Stock-Based Compensation:

Total Stock-Based Compensation. Total stock-based compensation expense for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Stock options	$	4	$	3
Vesting stock awards		19		20
Performance-based stock awards		1		1
Total stock-based compensation expense	$	24	$	24

14

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Stock Options. Stock options granted during the three months ended May 3, 2013 and April 30, 2012 have terms of seven years and a vesting period of four years, except for stock options granted to the Company’s outside directors, which have a vesting period of one year.

The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average grant-date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
Weighted average grant-date fair value	$	1.82		$	1.81
Expected term (in years)		5.0			5.0
Expected volatility		25.0	%		24.4	%
Risk-free interest rate		0.8	%		1.0	%
Dividend yield		3.9	%		3.7	%

Stock option activity for the three months ended May 3, 2013 was as follows:

	Shares of stock under stock options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic value
	(in millions)					(in years)		(in millions)
Outstanding at January 31, 2013		19.6		$	16.81		3.0	$	—
Options granted		4.7			13.55
Options forfeited or expired		(4.7	)		18.37
Outstanding at May 3, 2013		19.6			15.66		4.3		14.00
Exercisable at May 3, 2013		8.5			17.28		2.4		2.00

Vesting Stock Awards. Vesting stock award activity for the three months ended May 3, 2013 was as follows:

	Shares of stock under stock awards			Weighted average grant- date fair value
	(in millions)
Unvested stock awards at January 31, 2013		12.4		$	15.20
Awards granted		7.1			13.52
Awards forfeited		(0.7	)		14.68
Awards vested		(3.3	)		16.13
Unvested stock awards at May 3, 2013		15.5			14.24

The fair value of vesting stock awards that vested during each of the three months ended May 3, 2013 and April 30, 2012 was $50 million and $60 million, respectively.

15

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Performance-Based Stock Awards. The Company’s performance-based stock awards vest and the stock is issued at the end of a three-year period based upon the achievement of specific performance criteria, with the number of shares ultimately awarded, if any, ranging up to 150% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. Performance-based stock award activity for the three months ended May 3, 2013 was as follows:

	Expected number of shares of stock to be issued under performance- based stock awards			Weighted average grant- date fair value
	(in millions)
Outstanding at January 31, 2013		1.0		$	13.24
Awards vested		(0.4	)		14.43
Awards forfeited		(0.1	)		14.24
Outstanding at May 3, 2013		0.5			13.33

Adjustments to the expected number of shares of stock to be issued may occur due to changes in the expected level of achievement of the performance goals over the life of the awards.

Note 4—Goodwill and Intangible Assets:

Effective February 1, 2013 in preparation for the planned separation transaction, the Company realigned certain business operations among three of its reportable segments and renamed these reportable segments as follows: Health and Engineering (HE); National Security Solutions (NSS); and Technical Services and Information Technology (TSIT) (see Note 8). The reassignment of goodwill associated with the realignment is reflected in the table below.

The carrying value of goodwill by segment was as follows:

	HE			NSS		TSIT		Total
	(in millions)
Goodwill at January 31, 2013	$	1,144		$	641	$	410	$	2,195
Corporate reorganizations		(228	)		147		81		—
Goodwill at May 3, 2013	$	916		$	788	$	491	$	2,195

In fiscal 2013, the Company acquired 100% of maxIT Healthcare Holdings, Inc. (maxIT). The estimated fair values of maxIT assets acquired and liabilities assumed are preliminary for income tax related matters and may result in an adjustment to goodwill. There were no goodwill impairments during the three months ended May 3, 2013 and April 30, 2012.

Intangible assets consisted of the following:

	May 3, 2013							January 31, 2013
	Gross carrying value		Accumulated amortization			Net carrying value		Gross carrying value		Accumulated amortization			Net carrying value
	(in millions)
Finite-lived intangible assets:
Customer relationships	$	170	$	(80	)	$	90	$	175	$	(73	)	$	102
Software and technology		122		(57	)		65		127		(57	)		70
Other		2		(1	)		1		2		(1	)		1
Total finite-lived intangible assets		294		(138	)		156		304		(131	)		173
Indefinite-lived intangible assets:
In-process research and development		13		—			13		13		—			13
Trade names		4		—			4		4		—			4
Total indefinite-lived intangible assets		17		—			17		17		—			17
Total intangible assets	$	311	$	(138	)	$	173	$	321	$	(131	)	$	190

16

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Amortization expense related to amortizable intangible assets was $13 million and $10 million for the three months ended May 3, 2013 and April 30, 2012, respectively.

During the three months ended May 3, 2013, the Company recognized impairment losses for intangible assets of $4 million reported within selling, general, and administrative expenses. There were no impairment losses for intangible assets during the three months ended April 30, 2012.

The estimated annual amortization expense related to finite-lived intangible assets as of May 3, 2013 was as follows:

Fiscal Year Ending January 31
	(in millions)
2014 (remainder of the fiscal year)	$	31
2015		33
2016		31
2017		27
2018		18
2019 and thereafter		16
	$	156

Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, the outcome and timing of completion of in-process research and development projects (the assets of which will become amortizable upon completion and placement into service, or will be impaired if abandoned), adjustments to preliminary valuations of intangible assets and other factors.

Note 5—Financial Instruments:

The Company’s cash equivalents were primarily comprised of investments in several large institutional money market funds that invest primarily in bills, notes and bonds issued by the U.S. Treasury, U.S. Government guaranteed repurchase agreements fully collateralized by U.S. Treasury obligations, U.S. Government guaranteed securities and investment-grade corporate securities that have original maturities of three months or less. There are no restrictions on the withdrawal of the Company’s cash and cash equivalents. The Company’s cash equivalents are recorded at historical cost, which equals fair value based on quoted market prices (Level 1 input as defined by the accounting standard for fair value measurements).

SAIC has a revolving credit facility, which is fully and unconditionally guaranteed by Science Applications, providing for up to $750 million in unsecured borrowing capacity at interest rates determined, at SAIC’s option, based on either LIBOR plus a margin or a defined base rate. During the three months ended May 3, 2013, the maturity date of the credit facility was extended for one additional year to March 2017, as provided for in the terms of the credit facility. As of May 3, 2013 and January 31, 2013, there were no borrowings outstanding under the credit facility.

The credit facility contains certain customary representations and warranties, as well as certain affirmative and negative covenants. During the three months ended May 3, 2013, the financial covenants in the credit facility were amended to: (i) permit in the calculation of earnings before interest, taxes, depreciation and amortization (EBITDA) the adding back of certain expenses incurred in connection with the Company’s planned separation transaction; (ii) exclude the effect of debt incurred in connection with the separation transaction for purposes of calculating consolidated funded debt; and (iii) change the ratio of consolidated funded debt to EBITDA that the Company is required to maintain. The financial covenants contained in the credit facility require that, for a period of four trailing fiscal quarters, the Company maintains a ratio of consolidated funded debt, including borrowings under this facility, to EBITDA adjusted for other items as defined in the credit facility of not more than 3.25 to 1.0 and a ratio of EBITDA adjusted for other items as defined in the credit facility to interest expense of greater than 3.5 to 1.0. The Company was in compliance with these financial covenants as of May 3, 2013. A failure by the Company to meet these financial covenants in the future would reduce and could eliminate the Company’s borrowing capacity under the credit facility.

Other covenants in the credit facility restrict certain of the Company’s activities, including among other things, its ability to create liens, dispose of certain assets and merge or consolidate with other entities. The credit facility also contains certain customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events, nonpayment, cross-defaults to other debt, breach of specified covenants, Employee Retirement Income Security Act (ERISA) events, material monetary judgments, change of control events and the material inaccuracy of the Company’s representations and warranties.

17

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The Company’s notes payable and long-term debt consisted of the following:

	Stated interest rate			Effective interest rate			May 3, 2013		January 31, 2013
	(dollars in millions)
SAIC senior unsecured notes:
$450 million notes, which mature in December 2020		4.45	%		4.53	%	$	449	$	449
$300 million notes, which mature in December 2040		5.95	%		6.03	%		300		300
Science Applications senior unsecured notes:
$250 million notes, which mature in July 2032		7.13	%		7.43	%		248		248
$300 million notes, which mature in July 2033		5.50	%		5.78	%		296		297
Capital leases and other notes payable due on various dates through fiscal 2017		0%-2.4	%		Various			5		4
Total notes payable and long-term debt								1,298		1,298
Less current portion								1		2
Total notes payable and long-term debt, net of current portion							$	1,297	$	1,296
Fair value of notes payable and long-term debt							$	1,432	$	1,390

The fair value of long-term debt is determined based on current interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements (Level 2 and 3 inputs as defined by the accounting standard for fair value measurements).

The senior unsecured notes contain customary restrictive covenants, including, among other things, restrictions on the Company’s ability to create liens and enter into sale and leaseback transactions under certain circumstances. The Company was in compliance with all covenants as of May 3, 2013.

Note 6—Related Party Transactions:

Science Applications has fully and unconditionally guaranteed the obligations of SAIC under its $450 million 4.45% notes and $300 million 5.95% notes. These notes have been reflected as debt of Science Applications in these condensed consolidated financial statements. Science Applications has fully and unconditionally guaranteed any borrowings under SAIC’s amended and restated revolving credit facility maturing in fiscal 2018. SAIC has fully and unconditionally guaranteed the obligations of Science Applications under its $300 million 5.5% notes and $250 million 7.13% notes.

SAIC and Science Applications have a related party note in connection with a loan of cash between the entities, which is adjusted to reflect issuances of stock by SAIC to employees of Science Applications and its subsidiaries and Science Applications’ payment of certain obligations on behalf of SAIC. The related party note bears interest based on LIBOR plus a market-based premium. Portions of the related party note may be repaid at any time prior to its maturity date in November 2013. This maturity date will be automatically extended for successive one-year periods unless either SAIC or Science Applications provides prior notice to the other party.

Note 7—Accumulated Other Comprehensive Loss:

The components of accumulated other comprehensive loss were as follows:

	May 3, 2013			January 31, 2013
	(in millions)
Foreign currency translation adjustments, net of taxes of $(1) million as of May 3, 2013 and January 31, 2013	$	2		$	2
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of May 3, 2013 and January 31, 2013		(5	)		(5	)
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of May 3, 2013 and January 31, 2013		1			1
Total accumulated other comprehensive loss, net of taxes of $2 million as of May 3, 2013 and January 31, 2013	$	(2	)	$	(2	)

As of May 3, 2013, there is less than $1 million of the unrealized net loss on settled derivative instruments (pre-tax) that will be amortized and recognized as interest expense during the next 12 months.

Reclassifications from other comprehensive income to net income, relating to foreign currency translation adjustments, loss on settled derivative instruments and gain on defined benefit plan for the three months ended May 3, 2013, were not

18

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

material. Reclassifications for foreign currency translation adjustments and loss on settled derivative instruments are recorded in other income, net, and reclassifications for gain on defined benefit plan is recorded in selling, general and administrative expenses.

Note 8—Business Segment Information:

The Company defines its reportable segments based on the way the chief operating decision maker (CODM), currently its chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

In preparation for the planned separation transaction, the Company realigned certain business operations among its segments and renamed three of its reportable segments so that, effective February 1, 2013, the Company’s reportable segments include the following: Health and Engineering; National Security Solutions; Technical Services and Information Technology; and Corporate and Other. Prior to this realignment, the names of these segments were as follows: Health, Energy and Civil Solutions; Intelligence and Cybersecurity Solutions; Defense Solutions; and Corporate and Other, respectively.

The segment information for the periods presented, with the prior year period recast to give effect to the above changes in reportable segments, was as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Revenues:
Health and Engineering	$	521		$	416
National Security Solutions		1,080			1,185
Technical Services and Information Technology		1,107			1,163
Intersegment elimination		(1	)		—
Total revenues	$	2,707		$	2,764
Operating income (loss):
Health and Engineering	$	41		$	35
National Security Solutions		76			95
Technical Services and Information Technology		71			85
Corporate and Other		(46	)		(7	)
Total operating income	$	142		$	208

Note 9—Legal Proceedings:

Timekeeping Contract with City of New York

In March 2012, the Company reached a settlement with the U.S. Attorney’s Office for the Southern District of New York and the City of New York (City) relating to investigations being conducted by the U.S. Attorney’s Office and the City with respect to the Company’s contract to develop and implement an automated time and attendance and workforce management system (CityTime) for certain agencies of the City. As part of this settlement, the Company entered into a deferred prosecution agreement with the U.S. Attorney’s Office, under which the Company paid approximately $500 million and the U.S. Attorney’s Office deferred prosecution of a single criminal count against the Company, which alleged that the Company, through the conduct of certain managerial employees and others, caused the City to significantly overpay for the CityTime system. If the Company complies with the terms of the deferred prosecution agreement, the U.S Attorney will dismiss the criminal count at the end of a three-year period. In August 2012, the Company entered into an administrative agreement with the U.S. Army, on behalf of all agencies of the U.S. Government that confirms the Company’s continuing eligibility to enter into and perform contracts with all agencies of the U.S. Government following the CityTime settlement. The Army has determined that the U.S. Government will have adequate assurances under the terms of the administrative agreement that initiation of suspension or debarment is not necessary to protect the U.S. Government’s interests following the CityTime settlement. Under the terms of the administrative agreement, the Company has agreed, among other things, to maintain a contractor responsibility program having the specific elements described in the administrative agreement, including retaining a monitor and providing certain reports to the U.S. Army. The administrative agreement will continue in effect for five years, provided that the Company may request earlier termination after three years.

19

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Data Privacy Litigation

The Company is a defendant in a putative class action, In Re: Science Applications International Corporation (SAIC) Backup Tape Data Theft Litigation, a Multidistrict Litigation (MDL), in the U.S. District Court for the District of Columbia. The MDL action consolidates for pretrial proceedings the following seven individual putative class action lawsuits filed against the Company from October 2011 through March 2012: (1) Richardson, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (2) Arellano, et al. v. SAIC, Inc. in U.S. District Court for the Western District of Texas; (3) Biggerman, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (4) Moskowitz, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (5) Palmer, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al., in U.S. District Court for the District of Columbia; (6) Losack, et al. v. SAIC, Inc. in U.S. District Court for the Southern District of California; and (7) Deatrick v. Science Applications International Corporation in U.S. District Court for the Northern District of California. The lawsuits were filed following the theft of computer backup tapes from a vehicle of a Company employee. The employee was transporting the backup tapes between federal facilities under an IT services contract the Company was performing in support of TRICARE, the health care program for members of the military, retirees and their families. The tapes contained personally identifiable and protected health information of approximately five million military clinic and hospital patients. There is no evidence that any of the data on the backup tapes has actually been accessed or viewed by an unauthorized person. In order for an unauthorized person to access or view the data on the backup tapes, it would require knowledge of and access to specific hardware and software and knowledge of the system and data structure. The Company has notified potentially impacted persons by letter and has offered one year of credit monitoring services to those who request these services and in certain circumstances, one year of identity restoration services.

In October 2012, plaintiffs filed a consolidated amended complaint in the MDL action, which supersedes all previously filed complaints in the individual lawsuits. The consolidated amended complaint includes allegations of negligence, breach of contract, breach of implied-in-fact contract, invasion of privacy by public disclosure of private facts and statutory violations of the Texas Deceptive Trade Practices Act, the California Confidentiality of Medical Information Act, California data breach notification requirements, the California Unfair Competition Law, various state consumer protection or deceptive practices statutes, state privacy statutes, the Fair Credit Reporting Act and the Privacy Act of 1974. The consolidated amended complaint seeks monetary relief, including unspecified actual damages, punitive damages, statutory damages of $1,000 for each class member and attorneys’ fees, as well as injunctive and declaratory relief.

The Company intends to vigorously defend itself against the claims made in the class action lawsuits. In November 2012, the Company filed a motion to dismiss all claims against the Company alleged in the consolidated amended complaint and all substantive briefing on the motion has concluded. The Company has insurance coverage against judgments or settlements relating to the claims being brought in these lawsuits, with a $10 million deductible. The insurance coverage also covers the Company’s defense costs, subject to the same deductible. As of May 3, 2013, the Company has recorded a loss provision of $10 million related to these lawsuits, representing the low end of the Company’s estimated gross loss. The Company believes that, if any loss is experienced by the Company in excess of its estimate, such a loss would not exceed the Company’s insurance coverage. As these lawsuits progress, many factors will affect the amount of the ultimate loss resulting from these claims being brought against the Company, including the outcome of any motions to dismiss, the results of any discovery, the outcome of any pretrial motions and the courts’ rulings on certain legal issues.

The Company has been informed that the Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) is investigating matters related to the incident. OCR is the division of HHS charged with enforcement of the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA) and the privacy, security and data breach rules which implement HIPAA. OCR may, among other things, require a corrective action plan and impose civil monetary penalties against the data owner (Department of Defense) and, in certain situations, against the data owners’ contractors, such as the Company. The Company is cooperating with TRICARE in responding to the OCR investigation.

Derivative and Securities Litigation

Between February and April 2012, six stockholder derivative lawsuits were filed, each purportedly on the Company’s behalf. Two cases have been withdrawn and the four remaining cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Derivative Litigation. The consolidated derivative complaint asserts claims against the Company’s directors and current and former officers, including the chief executive officer, two former chief executive officers, the chief financial officer, a former group president, the former program manager of the CityTime program, and the former chief systems engineer of the CityTime program. The consolidated derivative complaint claims that the defendants breached

20

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

their fiduciary duties to the Company with respect to the CityTime contract for various reasons, including failure to supervise the adequacy of the Company’s internal controls, allowing the Company to issue misleading financial statements, and failure to exercise their oversight responsibilities to ensure that the Company complied with applicable laws, rules and regulations. The complaint further claims that the defendants are liable to the Company under theories of unjust enrichment, gross mismanagement, abuse of control, and violation of Section 14(a) of the Securities Exchange Act. The Company has filed a motion to dismiss the consolidated complaint because the respective plaintiffs did not serve a pre-suit demand before filing the derivative complaints. The Company has also received two stockholder demand letters related to CityTime (one of which is also related to the TRICARE matter described above), which an independent committee of the Company’s board of directors reviewed. The Company’s lead director has notified both stockholders’ attorneys, on behalf of the board of directors, that the Company has decided not to pursue the claims outlined in their demand letters.

Between February and April 2012, alleged stockholders filed three putative securities class actions. One case was withdrawn and two cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Securities Litigation. The consolidated securities complaint names as defendants the Company, its chief financial officer, two former chief executive officers, a former group president, and the former program manager on the CityTime program, and was filed purportedly on behalf of all purchasers of SAIC’s common stock from April 11, 2007 through September 1, 2011. The consolidated securities complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations that the Company and individual defendants made misleading statements or omissions about the Company’s revenues, operating income, and internal controls in connection with disclosures relating to the CityTime project. The plaintiffs seek to recover from the Company and the individual defendants an unspecified amount of damages class members allegedly incurred by buying SAIC’s stock at an inflated price. The Company intends to vigorously defend against these claims and has filed a motion to dismiss the consolidated securities complaint.

The Company currently believes that a loss relating to the above-described stockholder matters is reasonably possible, but the Company cannot reasonably estimate the range of loss in light of the fact that these matters are in their early stages.

Greek Government Contract

Background and Arbitration. In May 2003, the Company entered into a firm-fixed-price contract with the Hellenic Republic of Greece (the Customer) to provide a Command, Control, Communications, Coordination and Integration System (the System) to support the 2004 Athens Summer Olympic Games (the Olympics) and to serve as the security system for the Customer’s public order departments following completion of the Olympics.

In November 2008, the Customer accepted the System in writing pursuant to the requirements of the contract. At the time, the Customer determined that the System substantially complied with the terms of the contract and accepted the System with certain alleged minor omissions and deviations. Upon System acceptance, the Company invoiced the Customer for approximately $18 million, representing the undisputed portion of the contract balance owed to the Company. The Customer has not paid this final invoice.

In June 2009, the Company initiated arbitration before the International Chamber of Commerce against the Customer seeking damages for breaches of contract by the Customer. The Company seeks (i) aggregate damages in excess of $91 million for payment of amounts owed and other claims and damages, (ii) recovery of advance payment and performance bond amounts totaling $25 million and (iii) costs and expenses associated with the arbitration. The Customer filed an answer to the complaint denying liability on various grounds and a supplementary answer asserting set-off claims against amounts sought by the Company. The arbitration hearing was held in May 2012, and the Company filed a final brief in July 2012. Due to the complex nature of the legal and factual issues involved, the outcome of the arbitration is uncertain.

Financial Status and Contingencies. As a result of the significant uncertainties on this contract, the Company converted to the completed-contract method of accounting and ceased recognizing revenues for the System development portion of this contract in fiscal 2006. No profits or losses were recorded on the Greek contract during the three months ended May 3, 2013 and April 30, 2012. As of May 3, 2013, the Company has recorded $123 million of losses under the Greek contract, reflecting the Company’s estimated total cost to complete the System, assuming the Greek contract value was limited to the cash received to date. Based on the complex nature of this contractual situation and the difficulties encountered to date, significant uncertainties exist and the Company is unable to reliably estimate the ultimate outcome. The Company may reverse a portion of the losses from the Greek contract if it receives future payments as required under the modified Greek contract.

As of May 3, 2013, the Company has $15 million of receivables relating to value added tax (VAT) that the Company has paid and believes it is entitled to recover either as a refund from the taxing authorities or as a payment under the Greek contract.

21

SAIC, INC.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The Company has invoiced the Customer for $33 million for VAT and the Customer has failed to make payment. If the Customer fails to pay the outstanding VAT amounts or the Company is unable to recover the amount as a refund from the taxing authorities, the Company’s total losses on the Greek contract could increase.

The Company has met certain advance payment and performance bonding requirements through the issuance of euro-denominated standby letters of credit. As of May 3, 2013, there were $3 million in standby letters of credit outstanding relating to the support and maintenance of the System. The Company is seeking recovery of amounts drawn by the Customer in fiscal 2011 on the standby letters of credit in the ongoing arbitration. The principal subcontractor has provided to the Company euro-denominated standby letters of credit in the amount of $21 million as of May 3, 2013, of which $19 million relates to the delivery of the System. The Company may draw on the subcontractor’s standby letters of credit under certain circumstances by providing a statement to the responsible bank that the subcontractor has not fulfilled its obligations under the subcontract.

Nuclear Regulatory Commission

The U.S. Department of Justice filed a lawsuit against the Company in September 2004 in U.S. District Court for the District of Columbia alleging civil False Claims Act violations and breach of contract by the Company on two contracts that the Company had with the Nuclear Regulatory Commission (NRC). The complaint alleges that the Company’s performance of several subcontracts on separate U.S. Department of Energy (DOE) programs, the participation of a Company employee in an industry trade association, and certain other alleged relationships created organizational conflicts of interest under the two NRC contracts. The Company disputes that the work performed on the DOE programs and the alleged relationships raised by the government created organizational conflicts of interest. In July 2008, the jury found in favor of the government on the breach of contract and two False Claims Act counts. The jury awarded a nominal amount of $78 in damages for breach of contract and $2 million in damages for the False Claims Act claims. The judge entered the judgment in October 2008, trebling the False Claims Act damages and awarding a total of $585,000 in civil penalties. The Company appealed to the U.S. Court of Appeals for the District of Columbia Circuit. In December 2010, the Court of Appeals affirmed the District Court’s judgment as to both liability and damages of $78 on the breach of contract count and rescinded the judgment on the False Claims Act counts, including the aggregate damages and penalties. The Court of Appeals sent the False Claims Act counts back to the District Court for further proceedings. The Company has recorded a liability for an immaterial amount related to this matter as of May 3, 2013 based on its assessment of the likely outcome of this matter.

Other

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

Note 10—Other Commitments and Contingencies:

VirnetX, Inc.

In fiscal 2007, the Company transferred several patents to VirnetX Inc., a subsidiary of VirnetX Holding Corp. In consideration of this transfer, the Company received certain license rights and the right to receive a percentage of the consideration received in patent infringement or enforcement claims against third parties. In November 2012, a jury found that Apple Corporation infringed two of the patents that the Company previously transferred to VirnetX and awarded approximately $368 million to VirnetX. Under its agreements with VirnetX, the Company would receive 25% of the proceeds obtained by VirnetX in this lawsuit against Apple after reduction for attorneys’ fees and costs incurred in litigating those claims. In February 2013, the judge entered judgment against Apple consistent with the jury verdict; however, Apple has filed a motion to alter or amend the judgment. No assurances can be given as to when or if the Company will receive any proceeds in connection with this jury award. In addition, if the Company receives any proceeds under its agreements with VirnetX, the Company is required to pay a royalty on the proceeds received to the customer who paid for the development of the technology. The Company does not have any assets or liabilities recorded in connection with this matter as of May 3, 2012.

Government Investigations and Reviews

The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect 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. The Company is in discussions with the government on various investigations and reviews, including investigations arising under the Civil False Claims Act, one of which was settled in May 2013. As of May 3, 2013, the Company had recorded loss provisions aggregating approximately $18 million relating to such matters. We believe that the probability is remote that the outcome of any current investigation will have a material adverse effect on the Company as a whole.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

U.S. Government agencies, including the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA) 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, including: a contractor’s accounting system, earned value management system, estimating system, materials management and accounting system, property management system and purchasing system. Both contractors and the U.S. Government agencies conducting these audits and reviews have come under increased scrutiny. As a result, audits and reviews have become more rigorous and the standards to which the Company is held are being more strictly interpreted, increasing the likelihood of an audit or review resulting in an adverse outcome. During the course of its current audits, the DCAA is closely examining and questioning several of the Company’s long established and disclosed practices that it had previously audited and accepted, increasing the uncertainty as to the ultimate conclusion that will be reached.

The Company changed its indirect rate structure used in its indirect cost system and its direct labor bid structure used for its estimating system for fiscal 2011 and future years. The DCAA is performing reviews of these changes and the Company’s compliance with certain other U.S. Government Cost Accounting Standards. A finding of significant control deficiencies in the Company’s system audits or other reviews can result in decremented billing rates to its U.S. Government customers until the control deficiencies are corrected and their remediation is accepted by the DCMA.

The Company’s indirect cost audits by the DCAA have not been completed for fiscal 2006 and subsequent fiscal years. Although the Company has recorded contract revenues subsequent to fiscal 2005 based upon an estimate of costs that the Company believes will be approved upon final audit or review, the Company does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Company’s estimates, its profitability would be adversely affected. As of May 3, 2013, the Company has recorded a liability of $35 million for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs.

Variable Interest Entity (VIE)

In fiscal 2012, the Company entered into a fixed price agreement to provide engineering, procurement, and construction services to a special purpose limited liability company for a specific renewable energy project. The Company analyzed this arrangement and determined the special purpose limited liability company is a VIE. However, this VIE was not consolidated by the Company because the Company is not the primary beneficiary. The project is partially financed by the Company’s provision of extended payment terms in the amount of $133 million for certain of its services performed on the project. The arrangement also contemplates monetary penalties and project guarantees if the Company does not meet certain completion deadlines. The Company expects to bill a total of $220 million to complete the project. At May 3, 2013, the Company had a receivable of $93 million due from this VIE.

Tax Audits and Reviews

The Company files income tax returns in the United States and various state and foreign jurisdictions and is subject to routine compliance reviews by the IRS and other taxing authorities. The Company has effectively settled with the IRS for fiscal years prior to and including fiscal 2008. The Company also settled fiscal 2011 and 2012 as a result of the Company’s participation in the IRS Compliance Assurance Process (CAP) beginning in fiscal 2011. As part of the CAP, the Company and the IRS endeavor to agree on the treatment of all tax positions prior to the tax return being filed, thereby greatly reducing the period of time between tax return submission and settlement with the IRS. Future and ongoing reviews could have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

As of May 3, 2013, the Company had liabilities for uncertain tax positions of $25 million, $21 million of which were classified as other long-term liabilities in the condensed consolidated balance sheet.

During the next 12 months, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and international, could be reached with respect to $12 million of the Company’s uncertain tax positions including $2 million of previously accrued interest, depending on the timing of ongoing examinations, any litigation and expiration of statute of limitations, either because the Company’s tax positions are sustained or because the Company agrees to their disallowance and pays the related income tax. The resolution of tax matters related to uncertain tax positions could result in a $9 million reduction in income tax expense during the third quarter of fiscal 2014.

While the Company believes it has adequate accruals for uncertain tax positions, the tax authorities may determine that the Company owes taxes in excess of recorded accruals or the recorded accruals may be in excess of the final settlement amounts agreed to by the tax authorities.

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COMBINED NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The Company is subject to periodic audits by government agencies for taxes other than income taxes. The Company does not believe that the outcome of any other such tax matters would have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

Letters of Credit and Surety Bonds

The Company has outstanding letters of credit of $100 million as of May 3, 2013, principally related to guarantees on contracts. The Company also has outstanding surety bonds in the amount of $263 million, principally related to performance and payment bonds on the Company’s contracts.

Other

The Army Brigade Combat Team Modernization Engineering, Manufacturing and Development program was terminated for convenience by the DoD effective in fiscal 2012. From October 2009 through termination, the Company and its prime contractor performed on this program under an undefinitized change order with a provisional billing rate that allowed the Company to receive a lesser amount of the projected fee than the estimated fee due until completion of the contract negotiations. The Company recognized revenues of approximately $481 million, including estimated fee, from October 2009 through May 3, 2013 under the undefinitized change order. During fiscal 2013, an agreement in principle was reached between the prime contractor and the DoD; however a formal contract modification has not yet been received.

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

The following combined discussion and analysis of SAIC’s and Science Applications’ financial condition and results of operations and quantitative and qualitative disclosures about market risk should be read in conjunction with our condensed consolidated financial statements and related combined notes. As SAIC is a holding company and consolidates Science Applications for financial statement purposes, disclosures that relate to activities of Science Applications also apply to SAIC, unless otherwise noted. Science Applications’ revenues and operating expenses comprise 100% of SAIC’s revenues and operating expenses. In addition, Science Applications comprises approximately the entire balance of SAIC’s assets, liabilities and operating cash flows. Therefore, the following discussion is applicable to both SAIC and Science Applications, unless otherwise noted.

The following discussion contains forward-looking statements, including statements regarding our intent, belief, or current expectations with respect to, among other things, trends affecting our financial condition or results of operations, backlog, our industry, government budgets, spending and the impact of competition, our intent to create two independent public companies and our expectation that the separation transaction will be a tax-free spin-off. 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. Some of these factors include, but are not limited to, the risk factors set forth in our Annual Report on Form 10-K for the fiscal year ended January 31, 2013, as updated periodically through our subsequent quarterly reports on Form 10-Q. Due to such uncertainties and risks, 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 events or developments.

Except with respect to “Results of Operations—Discontinued Operations” and “—Net Income,” and “—Diluted EPS,” all amounts in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” are presented for our continuing operations.

We use the terms “Company”, “we”, “us” and “our” to refer to SAIC, Science Applications and its consolidated subsidiaries. Unless otherwise noted, references to fiscal years are to fiscal years ended January 31 (for fiscal 2013 and earlier periods) or fiscal years ending the Friday closest to January 31 (for fiscal 2014 and later periods). For example, we refer to the fiscal year ending January 31, 2014 as “fiscal 2014.” Effective in fiscal 2014, we changed our fiscal year to a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks.

Overview

We are a provider of scientific, engineering, systems integration and technical services and solutions in the areas of defense, health, energy, infrastructure, intelligence, surveillance, reconnaissance and cybersecurity to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security (DHS) and other U.S. Government civil agencies, state and local government agencies, foreign governments and customers in select commercial markets.

Our business is focused on using deep domain knowledge to solve problems of vital importance to the nation and the world in the areas of national security, energy and the environment, critical infrastructure and health. We are focusing our investments in our strategic growth areas including: intelligence, surveillance and reconnaissance; cybersecurity; logistics, readiness and sustainment; energy and environment; and health information technology. Our significant long-term management initiatives include:

• achieving internal, or non-acquisition related, annual revenue growth through internal collaboration and better leveraging of key differentiators across our company and the deployment of resources and investments into higher growth markets;

• improving our operating income margin through strong contract execution and growth in higher-margin business areas and continued improvement in our information technology (IT) systems infrastructure and related business processes for greater effectiveness and efficiency across all business functions;

• disciplined deployment of our cash resources and use of our capital structure to enhance growth and stockholder value through internal growth initiatives, strategic acquisitions, stock repurchases, dividends and other uses as conditions warrant; and

• investing in our people, including enhanced training and career development programs, with a focus on retention and recruiting.

Key financial events, including progress against management’s initiatives, during the three months ended May 3, 2013 include:

• Revenues for the three months ended May 3, 2013 decreased 2% over the corresponding period in the prior year, reflecting an internal revenue contraction (as defined in “Non-GAAP Financial Measures”) of 4%. Internal revenue

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contraction for the three months ended May 3, 2013, would have been 7% without the positive impact of $83 million in revenues for the two additional productive days as compared to the corresponding period in the prior year. The internal revenue contraction was primarily due to the ramp down of certain contracts in the National Security Solutions and the Technical Services and Information Technology segments and the tightening of the U.S. Government budget, partially offset by revenue growth in the Health and Engineering segment primarily resulting from the fiscal 2013 acquisition of maxIT Healthcare Holdings, Inc. (maxIT).

• Operating income decreased $66 million to $142 million (5.2% as a percentage of revenues) for the three months ended May 3, 2013 from $208 million for the corresponding period in the prior year. The decrease in operating income for the three months ended May 3, 2013, is primarily due to the expenses associated with the planned separation transaction discussed below of $33 million.

• Diluted earnings per share (EPS) for the three months ended May 3, 2013 decreased $0.12 as compared to the corresponding period in the prior year primarily due to a decrease in net income and an increase in the diluted weighted average number of shares outstanding of 6 million, or 2%.

• Cash and cash equivalents decreased $173 million during the three months ended May 3, 2013, primarily due to cash used in operations of $111 million and dividend payments of $41 million.

• Net bookings (as defined in “Key Financial Metrics—Bookings and Backlog”) were approximately $1.3 billion for the three months ended May 3, 2013. Total backlog was $16.5 billion at May 3, 2013 as compared to $17.9 billion at January 31, 2013.

Planned Separation Transaction

In August 2012, we announced that our board of directors authorized management to pursue a plan to separate into two independent, publicly traded companies: (i) a company focused on technical, engineering and enterprise information technology services, which will operate under the Science Applications International Corporation name (New SAIC); and (ii) a company focused on delivering science and technology solutions primarily in the areas of national security, engineering and health, which will be named Leidos Holdings, Inc. The proposed separation is intended to take the form of a tax-free spin-off of New SAIC. New SAIC had revenues of $4.8 billion for fiscal 2013.

In connection with the proposed separation transaction and in order to align our cost structure for greater competitiveness, we expect to take actions to reduce our real estate footprint by vacating facilities that are not necessary for our future requirements. We expect these actions will result in an aggregate of approximately $70 million in lease termination and facility consolidation costs over fiscal 2014 and fiscal 2015, which is expected to generate annualized cost savings of approximately $70 million. During the first quarter of fiscal 2014, we incurred approximately $14 million of these lease termination and facility consolidation costs. We also expect to incur separation transaction expenses, in addition to the lease termination and facility consolidation costs identified above, of approximately $50 million over fiscal 2014. During the first quarter of fiscal 2014, we incurred approximately $19 million of these separation transaction expenses, which included approximately $5 million of incremental severance costs related to organizational streamlining.

The separation transaction is expected to occur in the latter half of calendar year 2013, subject to final approval of the board of directors and certain other customary conditions including implementation of intercompany agreements, filing of required documents with the U.S. Securities and Exchange Commission and receipt of an opinion from tax counsel and a ruling from the Internal Revenue Service (IRS) as to the tax-free nature of the transaction. The separation transaction does not require a vote of the stockholders of SAIC.

Although we expect that the separation of our businesses will be consummated, there can be no assurance that a separation will ultimately occur. Upon completion of the separation transaction, the operating results of the separated business will be included in discontinued operations. See “Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended January 31, 2013, which includes certain risk factors relating to the proposed separation transaction.

Business Environment and Trends

In fiscal 2013, we generated approximately 87% of our total revenues from contracts with the U.S. Government, either as a prime contractor or a subcontractor to other contractors engaged in work for the U.S. Government. Revenues under contracts with the DoD, including subcontracts under which the DoD is the ultimate purchaser, represented approximately 70% of our total revenues in fiscal 2013. Accordingly, our business performance is affected by the overall level of U.S. Government spending, especially national security, including defense, homeland security, and intelligence spending, and the alignment of our service and product offerings and capabilities with current and future budget priorities of the U.S. Government. As an example, we expect to see a reduction in revenue of approximately $250 million from fiscal 2013 to fiscal 2014 on our contract to provide logistics services for tactical mine resistant ambush protected vehicles largely as a result of the drawdown of forces in the Middle East.

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While we believe that national security spending will continue to be a priority, U.S. Government budget deficits and the national debt has created increasing pressure to examine and reduce spending across all federal agencies. Baseline spending for the DoD for the next 10 years has been reduced and there may be further reductions. The Budget Control Act of 2011 increased the U.S. Government’s debt ceiling and enacted 10-year discretionary spending caps expected to generate over $1 trillion in savings for the U.S. Government. According to the Office of Management and Budget, these savings include $487 billion in DoD baseline spending reductions over the next 10 years. In addition, the Budget Control Act of 2011 provides for additional automatic spending cuts (referred to as sequestration) totaling $1.2 trillion over nine years, which are being implemented in the current U.S. Government fiscal year ending September 30, 2013 (GFY13). Although the Office of Management and Budget provided guidance to agencies on implementing sequestration cuts, there remains significant uncertainty about how exactly sequestration cuts will be implemented during the remainder of GFY13 and the impact it will have on contractors supporting the U.S. Government. The implementation of sequestration spending cuts and associated government guidance and planning activities has impacted existing contracts and caused delays in other government contracting actions. We continue to evaluate the potential impact of budget cuts and sequestration on our business, and while the ultimate effect on our business is uncertain, the amount and nature of these federal budget spending reductions could adversely impact our operations, future revenues and growth prospects in those markets.

The U.S. Government has funding measures in place through September 30, 2013. These funding measures include individual spending bills for certain government agencies, including DoD and DHS, and implement $85 billion of sequestration cuts for GFY13. Agencies and departments not covered by these individual spending bills will continue to operate under a continuing resolution with standard restrictions, including no new program starts and no program increases beyond current service levels, which could adversely impact our future revenues and growth prospects.

Trends in the U.S. Government contracting process, including a shift towards multiple-awards contracts (in which certain contractors are preapproved using indefinite-delivery/indefinite-quantity (IDIQ) and U.S. General Services Administration (GSA) contract vehicles) and awarding contracts on a low price, technically acceptable basis, have increased competition for U.S. Government contracts and increased pricing pressure. For example, during fiscal 2013, we were not awarded the successor contract to the DISN Global Solutions (DGS) program with the Defense Information Systems Agency. In fiscal 2013, we recognized approximately $425 million in revenue on this program. Revenues from the DGS program are expected to be approximately $40 million over the first half of fiscal 2014 as the activity transitions to the successor contractor. We expect that a majority of the business that we seek in the foreseeable future will be awarded through a competitive bidding process. For more information on these risks and uncertainties, see “Risk Factors” in Part I of our Annual Report on Form 10-K for the fiscal year ended January 31, 2013.

Reportable Segments

In preparation for the planned separation transaction, we realigned certain business operations among our segments and renamed three of our reportable segments so that, effective February 1, 2013, our reportable segments include the following: Health and Engineering; National Security Solutions; Technical Services and Information Technology; and Corporate and Other. Following completion of the planned separation transaction, the Technical Services and Information Technology segment will comprise New SAIC and the Health and Engineering and National Security Solutions segments will comprise Leidos Holdings, Inc. For additional information regarding our reportable segments, see Note 8 of the combined notes to the condensed consolidated financial statements for the three months ended May 3, 2013 contained in this Quarterly Report on Form 10-Q, and “Business” in Part I and Note 15 of the combined notes to consolidated financial statements contained in our Annual Report on Form 10-K for the fiscal year ended January 31, 2013.

Key Performance Measures

The primary financial performance measures we use to manage our business and monitor results of operations are revenue, operating income and cash flows from operations. We also believe that bookings and backlog are useful measures for management and investors to evaluate our potential future revenues. In addition, we consider measures such as contract types and revenue mix to be useful measures to management and investors evaluating our operating income and margin performance.

Bookings and Backlog. We received net bookings worth an estimated $1.3 billion during the three months ended May 3, 2013. Net bookings represent the estimated amount of revenues to be earned in the future from funded and unfunded contract awards that were received during the period, net of any adjustments to previously awarded backlog amounts. We calculate net bookings as the period’s ending backlog plus the period’s revenues less the prior period’s ending backlog and less the backlog obtained in acquisitions during the period.

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Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts as work is performed and excludes contract awards which have been protested by competitors. We segregate our backlog into two categories as follows:

• Funded Backlog. Funded backlog for contracts with government agencies primarily represents contracts for which funding is appropriated less revenues previously recognized on these contracts, and does not include the unfunded portion of contracts where 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 agencies 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 revenues to be earned in the future from (1) negotiated contracts for which funding has not been appropriated or otherwise authorized and (2) unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders expected to be awarded under IDIQ, GSA Schedule, or other master agreement contract vehicles.

The estimated value of our total backlog as of the dates presented, with the prior period recast for consistency with the current period’s presentation, was as follows:

	May 3, 2013		January 31, 2013
	(in millions)
Health and Engineering:
Funded backlog	$	1,094	$	1,295
Negotiated unfunded backlog		664		676
Total Health and Engineering backlog	$	1,758	$	1,971
National Security Solutions:
Funded backlog	$	1,878	$	2,121
Negotiated unfunded backlog	$	5,740		6,037
Total National Security Solutions backlog	$	7,618	$	8,158
Technical Services and Information Technology:
Funded backlog	$	1,733	$	1,945
Negotiated unfunded backlog	$	5,389		5,802
Total Technical Services and Information Technology backlog	$	7,122	$	7,747
Total:
Funded backlog	$	4,705	$	5,361
Negotiated unfunded backlog		11,793		12,515
Total backlog	$	16,498	$	17,876

Bookings and backlog fluctuate from period to period depending on our success rate in winning contracts and the timing of contract awards, renewals, modifications and cancellations. Contract awards continue to be negatively impacted by ongoing industry-wide delays in procurement decisions, which have resulted in an increase in the value of our submitted proposals awaiting decision. Contract awards have also been negatively impacted by budget cuts, including sequestration, by the U.S. Government as discussed in “Business Environment and Trends” in this Quarterly Report on Form 10-Q.

We expect to recognize a substantial portion of our funded backlog as revenues within the next 12 months. However, the U.S. Government may cancel any contract at any time through a termination for the convenience of the U.S. Government. In addition, certain contracts with commercial customers include provisions that allow the customer to cancel at any time. Most of our contracts have cancellation terms that would permit us to recover all or a portion of our incurred costs and fees for work performed. We have had one instance in the past three fiscal years where our U.S. Government customers have significantly terminated, canceled, modified or curtailed the scope of negotiated contracts. During fiscal 2012, the U.S. Army terminated for convenience the $2.7 billion Army Brigade Combat Team Modernization Engineering, Manufacturing and Development contract, which resulted in the elimination of approximately $500 million in contract backlog.

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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 additional information regarding the types of contracts under which we generate revenues, see “Business—Contract Types” in Part I of our Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The following table summarizes revenues by contract type as a percentage of total revenues for the periods presented:

	Three Months Ended
	May 3,         2013			April 30,         2012
Cost-reimbursement		42	%		42	%
Time and materials (T&M) and fixed-price-level-of-effort (FP-LOE)		28			30
Firm-fixed price (FFP)		30			28
Total		100	%		100	%

Revenue Mix. We generate revenues under our contracts from (1) the efforts of our technical staff, which we refer to as labor-related revenues, and (2) the materials provided on a contract and efforts of our subcontractors, which we refer to as M&S revenues. M&S revenues are generated primarily from large, multi-year systems integration contracts and contracts in our logistics, readiness and sustainment business area, as well as through sales of our proprietary products, such as our border, port and mobile security products and our checked baggage explosive detection systems. While our proprietary products are more profitable, these products represent a small percentage of our M&S revenues and the majority of our M&S revenues generally have lower margins than our labor-related revenues. The following table presents changes in labor-related revenues and M&S revenues for the periods presented:

	Three Months Ended
	May 3, 2013			Percent change			April 30, 2012
	(dollars in millions)
Labor-related revenues	$	1,491			0	%	$	1,498
As a percentage of revenues		55	%					54	%
M&S revenues		1,216			(4	)%		1,266
As a percentage of revenues		45	%					46	%

Labor-related revenues for the three months ended May 3, 2013 were relatively flat compared to the corresponding period in the prior year. M&S revenues decreased primarily due to the ramp down of the DGS program, which had a significant volume of subcontracted activity.

Geographic Location. Substantially all of our revenues and tangible long-lived assets are generated by or owned by entities located in the United States.

Results of Operations

The following table summarizes our results of operations for the periods presented:

	Three Months Ended
	May 3, 2013			Percent change			April 30, 2012
	(dollars in millions)
Revenues	$	2,707			(2	)%	$	2,764
Cost of revenues		2,378			(2	)		2,433
Selling, general and administrative expenses (SG&A):
General and administrative (G&A)		110			64	%		67
Bid and proposal (B&P)		30			(30	)		43
Internal research and development (IR&D)		14			8			13
Separation transaction expenses		33			—			0
Operating income		142			(32	)		208
Operating income margin		5.2	%					7.5	%
Non-operating expense, net		(15	)					(25	)
Income before income taxes		127			(31	)		183
Provision for income taxes		(46	)		(30	)		(66	)
Net income	$	81			(31	)	$	117

We classify indirect costs incurred within or allocated to our government customers as overhead (included in cost of revenues) and G&A expenses in the same manner as such costs are defined in our disclosure statements under U.S. Government Cost Accounting Standards.

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Changes in Estimates on Contracts. Changes in estimates related to certain types of contracts accounted for using the percentage of completion method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the contract performance period for a variety of reasons, including changes in contract scope, changes in contract cost estimates due to unanticipated cost growth or retirements of risk for amounts different than estimated, and changes in estimated incentive or award fees. Aggregate changes in contract estimates resulted in a decrease to operating income of $4 million ($0.01 per diluted share) for the three months ended May 3, 2013 and an increase to operating income of $4 million ($0.01 per diluted share) for the three months ended April 30, 2012.

Reportable Segment Results. In preparation for the planned separation transaction, we realigned certain business operations among our reportable segments so that, effective February 1, 2013, our reportable segments include the following: Health and Engineering; National Security Solutions; Technical Services and Information Technology; and Corporate and Other. Prior year amounts have been recast for consistency with the current year’s presentation.

The following table summarizes changes in Health and Engineering revenues and operating income for the periods presented:

	Three Months Ended
Health and Engineering	May 3, 2013			Percent change			April 30, 2012
	(dollars in millions)
Revenues	$	521			25	%	$	416
Operating income		41			17			35
Operating income margin		7.9	%					8.4	%

Health and Engineering revenues increased $105 million, or 25%, including an internal revenue growth rate of 9%, for the three months ended May 3, 2013 as compared to the corresponding period in the prior year. Revenue growth was primarily driven by revenues from the August 2012 acquisition of maxIT, a provider of healthcare IT consulting services to commercial clients. Internal revenue growth would have been 6% without the positive impact of two additional productive days as compared to the prior year period ($12 million). Internal revenue growth for the three months ended May 3, 2013 was positively impacted by higher engineering business volume primarily associated with power plant construction projects ($20 million) and increased unit deliveries and related maintenance of engineering products (previously referred to as non-intrusive inspection products) to both the federal government and international customers ($12 million).

Health and Engineering operating income increased $6 million, or 17%, for the three months ended May 3, 2013 as compared to the corresponding period in the prior year. The increase in operating income was driven by an increase in deliveries of engineering products, which typically generate higher margins, and increased revenue in other business areas. These increases were partially offset by a lower margin from the commercial health business primarily due an increase in intangible asset amortization expense ($5 million).

The following table summarizes changes in National Security Solutions revenues and operating income for the periods presented:

	Three Months Ended
National Security Solutions	May 3, 2013			Percent change			April 30, 2012
	(dollars in millions)
Revenues	$	1,080			(9	)%	$	1,185
Operating income		76			(20	)		95
Operating income margin		7.0	%					8.0	%

National Security Solutions revenues decreased $105 million, or 9%, all of which was internal revenue contraction, for the three months ended May 3, 2013 as compared to the corresponding period in the prior year. Internal revenue contraction would have been 12% without the positive impact of two additional productive days as compared to the prior year period ($36 million). Internal revenue contraction was primarily attributable to the ramp down of a systems integration and logistics program for tactical and mine resistant ambush protected vehicles ($67 million) along with the completion of an intelligence analysis program for a classified customer ($18 million) and an intelligence systems integration program for the U.S. Army ($15 million). Additional revenue declines ($78 million) arose from reduced activity on certain ongoing programs due to drawdowns of overseas U.S. military forces and U.S. Government budget reductions. The declines were partially offset by increased revenues related to three new intelligence analysis contracts for classified customers ($37 million).

National Security Solutions operating income decreased $19 million, or 20%, for the three months ended May 3, 2013 as compared to the corresponding period in the prior year. This decrease was primarily attributable to lower revenues, including

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certain programs with relatively higher fee rates ($10 million), a decline in sales of higher-margin proprietary products ($5 million) and intangible asset impairment charges ($4 million).

The following table summarizes changes in Technical Services and Information Technology revenues and operating income for the periods presented:

	Three Months Ended
Technical Services and Information Technology	May 3, 2013			Percent change			April 30, 2012
	(dollars in millions)
Revenues	$	1,107			(5	)%	$	1,163
Operating income		71			(16	)		85
Operating income margin		6.4	%					7.3	%

Technical Services and Information Technology revenues decreased $56 million, or 5%, all of which was internal revenue contraction, for the three months ended May 3, 2013 as compared to the corresponding period in the prior year. Internal revenue contraction would have been 8% without the positive impact of two additional productive days as compared to the prior year period ($35 million). Internal revenue contraction was primarily attributable to the ramp down of the DGS program ($53 million) as well as decreased activity on a contract vehicle to provide infrastructure support to the DHS ($15 million) and a program to provide systems engineering solutions for the U.S. Navy ($14 million).

Technical Services and Information Technology operating income decreased $14 million, or 16%, for the three months ended May 3, 2013 as compared to the corresponding period in the prior year. This decrease was primarily due to net unfavorable changes in contract estimates compared to a net favorable change in the prior year period ($7 million) and lower revenues, including the ramp down of the DGS program which had relatively higher profit levels ($3 million).

The following table summarizes changes in Corporate and Other revenues and operating loss for the periods presented:

	Three Months Ended
Corporate and Other	May 3, 2013			April 30, 2012
	(in millions)
Operating loss	$	(46	)	$	(7	)

Corporate and Other operating loss for the three months ended May 3, 2013 represents corporate costs that are unallowable under U.S. Government Cost Accounting Standards and the net effect of various items that are not directly related to the operating performance of the reportable segments. Corporate and Other operating loss increased by $39 million for the three months ended May 3, 2013 as compared to the corresponding period of the prior year primarily due to costs associated with the planned separation transaction ($33 million), costs to establish infrastructures for the two future companies ($7 million), and settlements of legal and regulatory matters ($4 million).

Non-Operating Expense. Non-operating expense for the three months ended May 3, 2013 decreased $10 million as compared to the corresponding period of the prior year. This decrease was primarily attributable to a decrease in interest expense of $9 million, primarily due to the payment of $550 million in July 2012 to settle the 6.25% notes at maturity.

Interest expense for Science Applications decreased $9 million for the three months ended May 3, 2013 as compared to the corresponding period of the prior year, reflecting a decrease in interest on third-party debt, which was primarily due to the payment of the $550 million notes discussed above. There was no change in interest expense related to Science Application’s note with SAIC. This note may fluctuate significantly from year to year based on changes in the underlying note balance and interest rates throughout the fiscal year.

Provision for Income Taxes. Our provision for income taxes as a percentage of income before income taxes was 36.2% for the three months ended May 3, 2013 compared to 36.1% for the corresponding period in the prior year. The increase in the effective tax rate for the current period was due to the estimated non-deductible portion of settlements of legal and regulatory matters, partially offset by the tax deductibility of the special dividend, which was declared during the three months ended May 3, 2013, on shares held by the SAIC Retirement Plan (an employee stock ownership plan) and the reinstatement of the research and development tax credit in the fourth quarter of fiscal 2013. The effective tax rate for the three months ended April 30, 2012 benefitted from a change in the estimated deductible amount of a legal settlement recorded in a prior fiscal year.

We file income tax returns in the United States and various state and foreign jurisdictions and have effectively settled with the IRS for fiscal years prior to and including fiscal 2008. We also settled fiscal 2011 and fiscal 2012 as a result of our

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participation in the IRS Compliance Assurance Process (CAP) beginning in fiscal 2011. As part of CAP, we endeavor to agree with the IRS on the treatment of all tax positions prior to the filing of the tax return, thereby greatly reducing the period of time between return submission and settlement with the IRS.

As of May 3, 2013, we had liabilities for uncertain tax positions of $25 million, $21 million of which were classified as other long-term liabilities in the condensed consolidated balance sheet. The resolution of certain of these tax matters could result in a $12 million reduction in our uncertain tax positions and a $9 million reduction in income tax expense during the third quarter of fiscal 2014.

Diluted Earnings per Share (EPS). Diluted EPS decreased $0.12 per share to $0.23 per share for the three months ended May 3, 2013 as compared to the corresponding period in the prior year primarily due to a decrease in net income and an increase of 6 million, or 2%, in the diluted weighted average number of shares outstanding.

Discontinued Operations. From time to time, we may dispose (or management may commit to plans to dispose) of non-strategic components of our business, which are reclassified as discontinued operations for all periods presented.

In fiscal 2013, we sold certain components of our business, which were historically included in the Health and Engineering segment, primarily focused on providing operational test and evaluation services.

The pre-sale operating results of this discontinued operation were as follows:

	Three Months Ended
	April 30, 2012
	(in millions)
Revenues	$	18
Costs and expenses:
Cost of revenues		15
Selling, general and administrative expenses		3
Operating income	$	—

Income from discontinued operations also includes other activity that is immaterial and not reflected in the amounts above.

Liquidity and Capital Resources

We had $563 million in cash and cash equivalents at May 3, 2013, which were primarily comprised of investments held in several large institutional money market funds that invest primarily in bills, notes and bonds issued by the U.S. Treasury, U.S. Government guaranteed repurchase agreements fully collateralized by U.S. Treasury obligations, U.S. Government guaranteed securities and investment-grade corporate securities that have original maturities of three months or less. We anticipate our principal sources of liquidity for the next 12 months and beyond will be our existing cash and cash equivalents and cash flows from operations. We may also borrow under our $750 million revolving credit facility. Our revolving credit facility is backed by a number of financial institutions, matures in fiscal 2018 and, by its terms, can be accessed on a same-day basis. In addition, prior to the completion of the planned separation transaction, we expect New SAIC will raise indebtedness in the amount of $500 million, of which $295 million is expected to be used to fund a cash distribution to SAIC in connection with the separation. We anticipate our principal uses of cash for the next 12 months and beyond will be for operating expenses, expenses related to the planned separation transaction, capital expenditures, acquisitions of businesses, stock repurchases and dividends. We anticipate that our operating cash flows, existing cash and cash equivalents, which have no restrictions on withdrawal, and borrowing capacity under our revolving credit facility will be sufficient to meet our anticipated cash requirements for at least the next 12 months.

Historical Trends

Cash and cash equivalents was $563 million and $736 million at May 3, 2013 and January 31, 2013, respectively. The following table summarizes cash flow information for the periods presented:

	Three Months Ended
	May 3,              2013			April 30,             2012
	(in millions)
Cash used in operating activities of continuing operations	$	(111	)	$	(361	)
Cash provided by (used in) investing activities of continuing operations		8			(7	)
Cash used in financing activities of continuing operations		(53	)		(57	)
Cash used in operating activities of discontinued operations		(17	)		—
Total decrease in cash and cash equivalents	$	(173	)	$	(425	)

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Cash Used in Operating Activities of Continuing Operations. Cash flows used in operating activities of continuing operations decreased $250 million for the three months ended May 3, 2013 as compared to the corresponding period in the prior year. Cash flows used in operating activities of continuing operations for the three months ended May 3, 2013 were negatively impacted by an increase in the average time to collect accounts receivable as a result of the discontinuance of the U.S. Government’s accelerated payment initiative that encouraged agencies to more timely pay contractors. In addition, there was one additional payroll in the three months ended May 3, 2013 as compared to the corresponding period in the prior year. Cash flows used in operating activities of continuing operations for the three months ended April 30, 2012 included a $500 million cash settlement payment related to the CityTime program described in Note 9 of the combined notes to the condensed consolidated financial statements.

Cash Provided by (Used in) Investing Activities of Continuing Operations. We had cash provided by investing activities of continuing operations of $8 million during the three months ended May 3, 2013, which resulted from proceeds of $25 million from the sale of facilities, partially offset by $19 million to purchase property, plant and equipment. We used $7 million of cash in support of investing activities of continuing operations during the three months ended April 30, 2012, including $8 million to purchase property, plant and equipment.

Cash Used in Financing Activities of Continuing Operations. We used $53 million of cash in support of financing activities of continuing operations during the three months ended May 3, 2013, including payment of a $41 million quarterly dividend and $16 million to repurchase shares of our stock. We used $57 million of cash in support of financing activities of continuing operations during the three months ended April 30, 2012, including payment of a $41 million quarterly dividend and $19 million to repurchase shares of our stock.

Cash Used in Operating Activities of Discontinued Operations. Cash flows used in operating activities of discontinued operations was primarily attributable to the payment of the tax on the gain from the sale of certain components of our business in fiscal 2013.

Science Applications’ Cash Flows. Any differences in cash flows from operating activities for Science Applications as compared to SAIC are primarily attributable to changes in interest payments (which reduce cash flow from operating activities of Science Applications) made by Science Applications on its note to SAIC and changes in excess tax benefits related to stock-based compensation (which reduce cash flows from operating activities for SAIC).

Science Applications used cash in financing activities of $53 million during the three months ended May 3, 2013, including repayments on its related party note with SAIC of $57 million partially offset by proceeds from the related party note with SAIC of $4 million. Science Applications used cash from financing activities of $258 million during the three months ended April 30, 2012, including repayments on the related party note with SAIC of $283 million, partially offset by proceeds from the related party note with SAIC of $26 million.

Special Cash Dividend

In March 2013, SAIC’s board of directors declared a special cash dividend of $1.00 per share of SAIC common stock payable on June 28, 2013 to stockholders of record on June 14, 2013.

Outstanding Indebtedness

Notes Payable and Long-term Debt. Our outstanding notes payable and long-term debt consisted of the following:

	Stated interest rate			Effective interest rate			May 3, 2013		January 31, 2013
	(dollars in millions)
SAIC senior unsecured notes:
$450 million notes, which mature in December 2020		4.45	%		4.53	%	$	449	$	449
$300 million notes, which mature in December 2040		5.95	%		6.03	%		300		300
Science Applications senior unsecured notes:
$250 million notes, which mature in July 2032		7.13	%		7.43	%		248		248
$300 million notes, which mature in July 2033		5.50	%		5.78	%		296		297
Capital leases and other notes payable due on various dates through fiscal 2017		0%-2.4	%		Various			5		4
Total notes payable and long-term debt								1,298		1,298
Less current portion								1		2
Total notes payable and long-term debt, net of current portion							$	1,297	$	1,296
Fair value of notes payable and long-term debt							$	1,432	$	1,390

These notes contain financial covenants and customary restrictive covenants, including, among other things, restrictions on our ability to create liens and enter into sale and leaseback transactions. We were in compliance with all covenants as of May 3, 2013.

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Credit Facility. SAIC has a revolving credit facility, which is fully and unconditionally guaranteed by Science Applications, providing for up to $750 million in unsecured borrowing capacity at interest rates determined, at SAIC’s option, based on either LIBOR plus a margin or a defined base rate. During the three months ended May 3, 2013, the maturity date of the credit facility was extended for one additional year to March 2017. As of May 3, 2013 and January 31, 2013, there were no borrowings outstanding under the credit facility.

The credit facility contains certain customary representations and warranties, as well as certain affirmative and negative covenants. During the three months ended May 3, 2013, the financial covenants in the credit facility were amended to: (i) permit in the calculation of earnings before interest, taxes, depreciation and amortization (EBITDA) the adding back of certain expenses incurred in connection with our planned separation transaction; (ii) exclude the effect of debt incurred in connection with the separation transaction for purposes of calculating consolidated funded debt; and (iii) change the ratio of consolidated funded debt to EBITDA that we are required to maintain. The financial covenants contained in the credit facility require that, for a period of four trailing fiscal quarters, we maintain a ratio of consolidated funded debt, including borrowings under this facility, to EBITDA adjusted for other items as defined in the credit facility of not more than 3.25 to 1.0 and a ratio of EBITDA adjusted for other items as defined in the credit facility to interest expense of greater than 3.5 to 1.0. We were in compliance with these financial covenants as of May 3, 2013. A failure by us to meet these financial covenants in the future would reduce and could eliminate our borrowing capacity under the credit facility.

Off-Balance Sheet Arrangements

We have outstanding performance guarantees and cross-indemnity agreements in connection with certain of our unconsolidated joint venture investments. We also have letters of credit outstanding principally related to guarantees on contracts and surety bonds outstanding principally related to performance and payment bonds as described in Note 10 of the combined notes to the condensed consolidated financial statements for the three months ended May 3, 2013 contained within this Quarterly Report on Form 10-Q. These arrangements have not had, and management does not believe it is likely that they will in the future have, a material effect on our liquidity, capital resources, operations or financial condition. We have also entered into an agreement with a variable interest entity (VIE) in connection with a renewable energy project as described in Note 10 of the combined notes to the condensed consolidated financial statements for the three months ended May 3, 2013 contained within this Quarterly Report on Form 10-Q.

Commitments and Contingencies

We are subject to a number of reviews, investigations, claims, lawsuits and other uncertainties related to our business. For a discussion of these items, see Notes 9 and 10 of the combined notes to the condensed consolidated financial statements for the three months ended May 3, 2013 contained within this Quarterly Report on Form 10-Q.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which are prepared in accordance with accounting principles generally accepted in the United States of America (GAAP). The preparation of these financial statements in accordance 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. Management evaluates these estimates and assumptions on an ongoing basis. Our estimates and assumptions have been prepared on the basis of the most current reasonably available information. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates under different assumptions and conditions.

We have several critical accounting policies, which were described in our Annual Report on Form 10-K for the fiscal year ended January 31, 2013, that are both important to the portrayal of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments. Typically, the circumstances that make these judgments difficult, subjective and complex have to do with making estimates about the effect of matters that are inherently uncertain. There were no material changes to our critical accounting policies during the three months ended May 3, 2013.

Non-GAAP Financial Measures

In this Quarterly Report on Form 10-Q, we refer to internal revenue growth (contraction) percentage, which is a non-GAAP financial measure that we reconcile to the most directly comparable GAAP financial measure. We calculate our internal revenue growth (contraction) percentage by comparing our reported revenues for the current year period to the revenues for the prior year period adjusted to include the actual revenues of acquired businesses for the comparable prior year period before acquisition. This calculation has the effect of adding revenues for the acquired businesses for the comparable prior year period to our prior year period reported revenues.

We use internal revenue growth (contraction) percentage as an indicator of how successful we are at growing our base business and how successful we are at growing the revenues of the businesses that we acquire. Our integration of acquired businesses

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allows our current management to leverage business development capabilities, drive internal resource collaboration, utilize access to markets and qualifications, and refine strategies to realize synergies, which benefits both acquired and existing businesses. As a result, the performance of the combined enterprise post-acquisition is an important measurement. In addition, as a means of rewarding the successful integration and growth of acquired businesses, and not acquisitions themselves, incentive compensation for senior management is based, in part, on achievement of revenue targets linked to internal revenue growth.

The limitation of this non-GAAP financial measure as compared to the most directly comparable GAAP financial measure is that internal revenue growth (contraction) percentage is one of two components of the total revenue growth (contraction) percentage, which is the most directly comparable GAAP financial measure. We address this limitation by presenting the total revenue growth (contraction) percentage next to or near disclosures of internal revenue growth (contraction) percentage. This financial measure is not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our condensed consolidated financial statements prepared in accordance with GAAP. The method that we use to calculate internal revenue growth (contraction) percentage is not necessarily comparable to similarly titled financial measures presented by other companies. Internal revenue growth (contraction) percentages for the three months ended May 3, 2013 were calculated as follows:

	Three Months Ended May 3, 2013
	(dollars in millions)
Health and Engineering:
Prior year period’s revenues, as reported	$	416
Revenues of acquired businesses for the comparable prior year period		63
Prior year period’s revenues, as adjusted	$	479
Current year period’s revenues, as reported		521
Internal revenue growth	$	42
Internal revenue growth percentage		9	%
National Security Solutions:
Prior year period’s revenues, as reported	$	1,185
Revenues of acquired businesses for the comparable prior year period		—
Prior year period’s revenues, as adjusted	$	1,185
Current year period’s revenues, as reported		1,080
Internal revenue contraction	$	(105	)
Internal revenue contraction percentage		(9	)%
Technical Services and Information Technology:
Prior year period’s revenues, as reported	$	1,163
Revenues of acquired businesses for the comparable prior year period		—
Prior year period’s revenues, as adjusted	$	1,163
Current year period’s revenues, as reported		1,107
Internal revenue contraction	$	(56	)
Internal revenue contraction percentage		(5	)%
Total*:
Prior year period’s revenues, as reported	$	2,764
Revenues of acquired businesses for the comparable prior year period		63
Prior year period’s revenues, as adjusted	$	2,827
Current year period’s revenues, as reported		2,707
Internal revenue contraction	$	(120	)
Internal revenue contraction percentage		(4	)%

* Total revenues include amounts related to Corporate and Other and intersegment eliminations.

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Effects of Inflation

Approximately 42% of our revenues are derived from cost-reimbursement type contracts, which are not subject to the impacts of inflation. Contracts for long-term FFP and T&M and FP-LOE contracts typically include sufficient provisions for labor and other cost escalations to cover anticipated cost increases over the period of performance. Consequently, revenues and costs have generally both been impacted similarly by inflation. As a result, net income as a percentage of total revenues has not been significantly impacted by inflation.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

During the three months ended May 3, 2013, there were no material changes in our market risk exposure. For a discussion of our market risk associated with interest rate risk and foreign currency risk as of January 31, 2013, see “Quantitative and Qualitative Disclosures about Market Risk” in Part II of our Annual Report on Form 10-K for the fiscal year ended January 31, 2013.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our principal executive officer (our President and Chief Executive Officer) and principal financial officer (our Executive Vice President and Chief Financial Officer), has evaluated the effectiveness of SAIC’s and Science Applications’ disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934) as of May 3, 2013, and our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the U.S. Securities and Exchange Commission. These disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to our management, including our principal executive officer and our principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Changes In Internal Control Over Financial Reporting

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

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PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We have provided information about legal proceedings in which we are involved in Note 9 of the combined notes to condensed consolidated financial statements for the three months ended May 3, 2013 contained within this Quarterly Report on Form 10-Q.

In addition to the matters disclosed in Note 9, we are routinely subject to investigations and reviews relating to compliance with various laws and regulations. Additional information regarding such investigations and reviews is set forth in Note 10, “Commitments and Contingencies—Government Investigations and Reviews,” of the combined notes to condensed consolidated financial statements for the three months ended May 3, 2013 contained within this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors.

There were no material changes from the risk factors disclosed in our Annual Report on Form 10-K for the fiscal year ended January 31, 2013.

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

(c) Purchases of Equity Securities by the Company

In March 2012, our board of directors authorized a stock repurchase program under which we may repurchase up to 40 million shares of SAIC common stock (the 2012 Repurchase Program). Stock repurchases may be made on the open market or in privately negotiated transactions with third-parties. Whether repurchases are made and the timing and actual number of shares repurchased depends on a variety of factors including price, corporate capital requirements, other market conditions and regulatory requirements.

The following table presents repurchases of SAIC common stock during the quarter ended May 3, 2013:

Period	(a) Total Number of Shares (or Units) Purchased (1)		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Repurchase Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (2)
February 1, 2013 – February 28, 2013		2,952	$	12.00		—		40,000,000
March 1, 2013 – March 31, 2013		82,684		12.11		—		40,000,000
April 1, 2013 – April 30, 2013		775,537		13.58		—		40,000,000
May 1, 2013 – May 3, 2013		187		14.85		—		40,000,000
Total		861,360		13.43		—

⁽¹⁾  Includes shares purchased as follows:

	February		March		April		May
Upon surrender by stockholders of previously owned shares to satisfy statutory tax withholding obligations related to vesting of stock awards		2,952		82,684		775,537		187

⁽²⁾ We may repurchase up to 40 million shares of SAIC common stock under the 2012 Repurchase Program, which was publicly announced in March 2012.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

None.

Item 6. Exhibits.

Exhibit Number		Description of Exhibit
	10.1	Amendment No. 1 dated as of April 19, 2013 to Amended and Restated Four-Year Credit Agreement, dated March 11, 2011, among SAIC, as borrower, Science Applications, as guarantor, Citibank, N.A., as administrative agent, and the other lenders party thereto. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K as filed on April 23, 2013 with the SEC.
	10.2	Purchase and Sale Agreement between Campus Realty Corporation and MRP-I Acquisition A, L.L.C., dated as of May 3, 2013. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K as filed on May 6, 2013 with the SEC.
	10.3	Form of Restricted Stock Unit Award Agreement of SAIC’s 2006 Equity Incentive Plan (Management—Three-Year Cliff Vesting).
	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.

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SIGNATURES

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

Date: June 4, 2013

SAIC, Inc.

/s/    MARK W. SOPP        

Mark W. Sopp

Executive Vice President and Chief Financial Officer and as a duly authorized officer

Date: June 4, 2013

Science Applications International Corporation

/S/    MARK W. SOPP        

Mark W. Sopp

Executive Vice President and Chief Financial Officer and as a duly authorized officer

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Item  6. Exhibits.

Exhibit Number		Description of Exhibit
	10.1	Amendment No. 1 dated as of April 19, 2013 to Amended and Restated Four-Year Credit Agreement, dated March 11, 2011, among SAIC, as borrower, Science Applications, as guarantor, Citibank, N.A., as administrative agent, and the other lenders party thereto. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K as filed on April 23, 2013 with the SEC.
	10.2	Purchase and Sale Agreement between Campus Realty Corporation and MRP-I Acquisition A, L.L.C., dated as of May 3, 2013. Incorporated by reference to Exhibit 10.1 to our Current Report on Form 8-K as filed on May 6, 2013 with the SEC.
	10.3	Form of Restricted Stock Unit Award Agreement of SAIC’s 2006 Equity Incentive Plan (Management—Three-Year Cliff Vesting).
	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.

EX-10.3

Exhibit 10.3

SAIC, INC.

2006 EQUITY INCENTIVE PLAN

RESTRICTED STOCK UNIT AWARD AGREEMENT

(Management – 3-year Cliff Vesting)

BY ACCEPTING THIS AWARD, YOU VOLUNTARILY AGREE TO ALL OF THE

TERMS AND CONDITIONS SET FORTH IN THIS AGREEMENT AND IN THE PLAN.

SAIC, Inc., a Delaware corporation (the “Company”), hereby grants to the participant named in the Grant Summary (as defined below) (“Recipient”), who is affiliated with the Company or an Affiliate as an employee, director or consultant, restricted stock units (“RSUs”) representing the right to receive one share of its Common Stock, $0.0001 par value per share (“Common Stock”) for each RSU. Certain specific details of this award, including the number of RSUs and the Grant Date, may be found in the Grant Summary and are hereby incorporated by reference into this Agreement. The RSUs shall be forfeited if certain performance conditions set forth below are not met. The terms and conditions of the grant of RSUs (this “Award”) are set forth in this Agreement and in the Company’s 2006 Equity Incentive Plan, as amended (the “Plan”).

1.     DEFINITIONS.    The following terms shall have the meanings as defined below. Capitalized terms used herein and not defined shall have the meanings attributed to them in the Plan.

“Affiliate” shall mean a “parent” or “subsidiary” (as each is defined in Section 424 of the Code) of the Company and any other entity that the Board or Committee designates as an “Affiliate” for purposes of this Plan.

“Award Letter” shall mean the award notice delivered to Recipient concurrently with this Agreement and which is hereby made a part hereof and incorporated by reference into this Agreement.

“Committee” shall have the meaning as defined in the Plan.

“Determination Date” means the date on which the Committee certifies whether and to what extent the Performance Goals have been achieved.

“Executive Officer” shall mean an officer of the Company designated as such for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.

“Grant Date” shall mean the date of the award of the RSUs as set forth in the Grant Summary.

“Grant Summary” shall mean the summary of this award as reflected in the electronic stock plan award administration system maintained by the Company or its designee that contains a link to this Agreement (which summary information is set forth in the appropriate records of the Company authorizing such award).

“Performance Goals” means the goals set forth in the Award Letter that will determine whether, and to what extent, the RSUs shall be earned.

“Permanent Disability” shall mean the status of disability determined conclusively by the Committee based upon certification of disability by the Social Security Administration or, to the extent compliant with Section 409A, upon such other proof as the Committee may require, effective upon receipt of such certification or other proof by the Committee.

“Special Retirement” shall mean: (i) retirement by the Recipient after reaching age 59 ¹/₂ with at least ten (10) years of service with the Company or an Affiliate; or (ii) retirement by the Recipient after reaching age 59 ¹/₂ and Recipient’s age plus years of service with the Company or an Affiliate equals at least 70; or (iii) if Recipient is an Executive Officer at the time of retirement, retirement after reaching the applicable mandatory retirement age, regardless of years of service with the Company or (iv) if the Recipient is a director of the Company, retirement either (A) after reaching the applicable mandatory retirement age at retirement or (B) at the end of a term of office if Recipient is not nominated for a successive term of office on account of the fact that Recipient would have reached the applicable mandatory retirement age during such successive term of office, regardless of years of service with the Company. For Special Retirement purposes, years of service shall mean the period of service determined conclusively by the Committee.

2. RIGHTS OF THE RECIPIENT WITH RESPECT TO THE RSUs.

a)     No Stockholder Rights.    The RSUs granted pursuant to this Award do not and shall not entitle Recipient to any rights of a stockholder. The rights of Recipient with respect to the RSUs shall remain forfeitable at all times prior to the date on which such rights become vested, and the restrictions with respect to the RSUs lapse, in accordance with Section 3, 4 or 5.

b)     Additional RSUs as Dividend Equivalents.    If the Company pays any cash dividends on its Common Stock, the Company shall credit to Recipient, on each dividend payment date, a number of additional RSUs (“Dividend Equivalents”) equal in value to the cash dividends that would have been paid on the shares of Common Stock underlying the unvested RSUs covered by this Agreement assuming that: (i) such underlying shares had been outstanding as of the record date for such dividends declared on or after the Grant Date and prior to the issuance date of the underlying shares; and (ii) the amount of the Dividend Equivalents had been reinvested in additional shares of Common Stock as of the payment date of such dividends. The number of additional RSUs representing Dividend Equivalents shall be determined by (a) multiplying the dollar amount of the cash dividends paid per share of Common Stock by the number of RSUs subject to this Award that remain unvested as of the applicable dividend payment date (including additional RSUs attributable to prior Dividend Equivalents) and (b) dividing such amount by the Fair Market Value (as defined in the Plan) of a share of Common Stock on the dividend payment date. Dividend Equivalents so credited shall be subject to the same terms and conditions as the RSUs to which such Dividend Equivalents relate, shall be distributed in shares of Common Stock when, and if, and to the extent that the RSUs to which they related are vested and settled as provided below, but shall be forfeited in the event that the RSUs with respect to which such Dividend Equivalents were credited are forfeited (including RSUs that are forfeited due to failure to meet the Performance Goals). For the avoidance of

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doubt, no Dividend Equivalents shall be credited or distributed with respect to any RSUs that have vested and for which the underlying shares have been issued prior to the applicable dividend payment date.

c)     Conversion of RSUs; Issuance of Common Stock.    No shares of Common Stock shall be issued to Recipient prior to the date on which the RSUs vest in accordance with Section 3, 4 or 5. On the date that any RSUs vest pursuant to Section 3, 4 or 5 (or as promptly as administratively practicable thereafter), the Company shall cause to be issued in book-entry form, registered in Recipient’s name or in the name of Recipient’s legal representatives, beneficiaries or heirs, as the case may be, the underlying shares in payment of such vested whole RSUs (including additional RSUs credited as Dividend Equivalents), unless such payment is deferred in accordance with the terms and conditions of the Company’s non-qualified compensation deferral plans.

3. VESTING SCHEDULE; RSUs SUBJECT TO FORFEITURE.

a)     Subject to the terms and conditions of this Award, if the Performance Goals are met, 100% of the RSUs, including any additional RSUs credited to Recipient as Dividend Equivalents, shall be earned and shall vest on the third-year anniversary of the Grant Date. If the Performance Goals are not met, the RSUs shall be forfeited as of the Determination Date, and no RSUs hereunder shall become vested.

b)     Recipient shall not sell, transfer, assign, hypothecate, pledge, grant a security interest in, or in any other way alienate, any of the RSUs, or any interest or right therein.

c)     Except in the event of death, Permanent Disability or Special Retirement or as set forth below, any unvested RSUs automatically shall be immediately and irrevocably forfeited without compensation on the date that Recipient’s affiliation with the Company or any Affiliate as an employee, director or consultant terminates, or if Recipient is an employee or director of an Affiliate and such entity ceases to be an Affiliate, whether by Committee action or otherwise, on the date such entity ceases to be an Affiliate.

4.     ACCELERATION OF VESTING UPON DEATH OR PERMANENT DISABILITY.    If Recipient is an employee, director or consultant of the Company or an Affiliate and ceases to be affiliated with the Company or any Affiliate as a result of Recipient’s death or Permanent Disability, or if Recipient’s death or Permanent Disability occurs following a Special Retirement, all of the RSUs shall become fully vested whether or not earned under Section 3(a).

5. CONTINUATION OF VESTING UPON SPECIAL RETIREMENT.

a)     If Recipient is an Executive Officer and Recipient’s affiliation with the Company or any Affiliate terminates as a result of Recipient’s Special Retirement in accordance with the provisions of subsection (iii) of the definition of the term “Special Retirement” in Section 1 above, or if Recipient is a director of the Company and Recipient’s affiliation with the Company or any Affiliate terminates as a result of Recipient’s Special Retirement in accordance with the provisions of subsection (iv) of the definition of the term “Special Retirement” in Section 1 above, any unvested RSUs shall continue to vest in accordance with the vesting schedule set

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forth in Section 3 above to the extent the RSUs are earned under Section 3(a).

b)     If, after the first anniversary of the Grant Date, Recipient’s affiliation with the Company or an Affiliate terminates as a result of Recipient’s Special Retirement in accordance with the provisions of subsection (i) or (ii) of the definition of the term “Special Retirement” in Section 1 above, the remaining unvested RSUs shall continue to vest in accordance with the vesting schedule set forth in Section 3 above, to the extent the RSUs are earned under Section 3(a). Shares shall be issued, if earned and vested under Section 3(a), no later than ninety (90) days following the third anniversary of the Grant Date.

c)     Notwithstanding the foregoing clauses (a) and (b), all unvested RSUs shall be immediately and irrevocably forfeited in the event that Recipient violates the terms of his or her inventions, copyright and confidentiality agreement with the Company or an Affiliate or breaches his or her other contractual or legal obligations to the Company or an Affiliate, including the non-solicitation obligations set forth in Section 13 of this Agreement.

d)     If Recipient is eligible for Special Retirement at the time of a Fundamental Transaction or is continuing to vest following Special Retirement under the foregoing clause (a) or (b), any unvested RSUs shall be treated as provided in the Plan, but the resulting consideration shall only be paid on the date the RSUs would have vested if a Fundamental Transaction had not occurred, unless the RSUs are terminated in a manner compliant with Section 409A.

6. TAX MATTERS

a)     Tax Withholding.    If the Company or an Affiliate is required to withhold any federal, state, local or other taxes upon the vesting or any acceleration of vesting of the RSUs, or any issuance of Common Stock or otherwise under this Agreement, the Company shall withhold a sufficient number of shares of Common Stock issuable upon settlement of the RSUs at the then current Fair Market Value (as defined in the Plan) to meet the withholding obligation based on the minimum rates required by law; provided, however, that the Company may, in its sole discretion, sell a sufficient number of shares of Common Stock on behalf of Recipient to satisfy such obligations, accept payment to satisfy such obligations in the form of cash or delivery to the Company of shares of Company stock already owned by Recipient, withhold amounts from Recipient’s compensation, or any combination of the foregoing or other actions as may be necessary or appropriate to satisfy any such tax withholding obligations.

b) Section 409A.

(i)      This Award is intended to qualify for the short-term deferral exception to Section 409A of the Code (“Section 409A”) described in the regulations promulgated under Section 409A to the maximum extent possible. To the extent Section 409A is applicable to this Award, this Award is intended to comply with Section 409A and to be interpreted and construed consistent with such intent.

(ii)     With respect to any Recipient who is eligible for Special Retirement, this Award is intended to be paid on fixed payment dates under Sections 3 and 5 of this Agreement and such payments may not be accelerated except as set forth in Section 5(b) hereof or otherwise to the extent permitted under Section 409A.

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(iii)     Without limiting the generality of the foregoing, if Recipient is a “specified employee” within the meaning of Section 409A, as determined under the Company’s established methodology for determining specified employees, on the date of Recipient’s termination of service at a time when this Award pursuant its terms would be settled, then to the extent required in order to comply with Section 409A, shares of Common Stock that would be issued under this Award (or any other amount due hereunder) at such termination of service shall not be issued before the earlier of (x) the date that is six months following the Recipient’s termination of employment and (y) the date of the Recipient’s death.

(iii)     For purposes of this Agreement, the terms “terminate,” “terminated” and “termination” mean a termination of the Recipient’s employment that constitutes a “separation from service” within the meaning of the default rules of Section 409A.

7.     RIGHTS, RESTRICTIONS AND LIMITATIONS.    All shares of Common Stock issued to Recipient pursuant to this Agreement are subject to the rights, restrictions and limitations set forth in the Company’s Restated Certificate of Incorporation. Recipient shall not have the rights of a stockholder until Shares, if any, are issued on or following the applicable vesting date.

8.     RESTRICTIONS UNDER SECURITIES LAW.    The issuance of RSUs and the shares of Common Stock covered by this Agreement are subject to any restrictions which may be imposed under applicable state and federal securities laws and are subject to obtaining all necessary consents which may be required by, or any condition which may be imposed in accordance with, applicable state and federal securities laws or regulations.

9. EMPLOYMENT AT WILL.

a)     If Recipient is an employee or consultant of the Company or an Affiliate, such employment or affiliation is not for any specified term and may be terminated by employee or by the Company or an Affiliate at any time, for any reason, with or without cause and with or without notice. Nothing in this Agreement (including, but not limited to, the vesting of the RSUs pursuant to the schedule set forth in Section 3 herein), the Plan or any covenant of good faith and fair dealing that may be found implicit in this Agreement or the Plan shall: (i) confer upon Recipient any right to continue in the employ of, or affiliation with, the Company or an Affiliate; (ii) constitute any promise or commitment by the Company or an Affiliate regarding the fact or nature of future positions, future work assignments, future compensation or any other term or condition of employment or affiliation; (iii) confer any right or benefit under this Agreement or the Plan unless such right or benefit has specifically accrued under the terms of this Agreement or Plan; or (iv) deprive the Company of the right to terminate Recipient at will and without regard to any future vesting opportunity that Recipient may have.

b)     Recipient acknowledges and agrees that the right to continue vesting in the RSUs pursuant to the schedule set forth in Section 3 is earned only by continuing as an employee or consultant at the will of the Company or as a director (not through the act of being hired, being granted RSUs or any other award or benefit) and that the Company has the right to reorganize, sell, spin-out or otherwise restructure one or more of its businesses or Affiliates at any time or from time to time, as it deems appropriate (a “reorganization”). Recipient acknowledges and

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agrees that such a reorganization could result in the termination of Recipient’s relationship as an employee or consultant to the Company or an Affiliate, or the termination of Affiliate status of Recipient’s employer and the loss of benefits available to Recipient under this Agreement, including but not limited to, the termination of the right to continue vesting the RSUs under this Agreement.

10.     INCORPORATION OF PLAN.    The RSUs granted hereby are granted pursuant to the Plan, all the terms and conditions of which are hereby made a part hereof and are incorporated herein by reference. In the event of any inconsistency between the terms and conditions contained herein and those set forth in the Plan, the terms and conditions of the Plan shall prevail.

11.     RECOUPMENT OF AWARDS.    The Human Resources and Compensation Committee of the Company’s Board of Directors adopted a recoupment policy on June 18, 2009 (the “Policy”), that may require members of senior management to return incentive compensation if there is a material restatement of the financial results upon which the compensation was originally based. The Policy also provides for recovery of incentive compensation from any employee involved in fraud or intentional misconduct, whether or not it results in a restatement of the Company’s financial results. Recipient acknowledges and agrees that the Policy applies to RSUs and that any payments or issuances of Common Stock with respect to RSUs are subject to recoupment pursuant to the Policy, including any amendments to the Policy and any recoupment obligations imposed by applicable law or regulation. This Agreement shall be deemed to include the restrictions imposed by the Policy.

12.     COPIES OF PLAN AND OTHER MATERIALS.    Recipient acknowledges that Recipient has received copies of the Plan and the Plan prospectus from the Company and agrees to receive stockholder information, including copies of any annual report, proxy statement and periodic report, electronically from the Company. Recipient acknowledges that copies of the Plan, Plan prospectus, Plan information and stockholder information are also available upon written or telephonic request to the Company. Recipient acknowledges that a copy of the Policy referenced in Section 11 is available on ISSAIC, the Company’s intranet, and is also available upon written or telephonic request to the Company.

13. NON-SOLICITATION.

a)     Solicitation of Employees.    Recipient agrees that, both while employed by the Company or an Affiliate and for one year afterward, Recipient will not solicit or attempt to solicit any employee of the Company or an Affiliate to leave his or her employment or to violate the terms of any agreement or understanding that employee may have with the Company or an Affiliate. The foregoing obligations apply to both the Recipient’s direct and indirect actions, and apply to actions intended to benefit Recipient or any other person, business or entity.

b)     Solicitation of Customers.    Recipient agrees that, for one year after termination of employment with the Company or an Affiliate, Recipient will not participate in any solicitation of any customer or prospective customer of the Company or an Affiliate concerning any business that:

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(i)      involves the same programs or projects for that customer in which Recipient was personally and substantially involved during the 12 months prior to termination of employment; or

(ii)     has been, at any time during the 12 months prior to termination of employment, the subject of any bid, offer or proposal activity by the Company or an Affiliate in respect of that customer or prospective customer, or any negotiations or discussions about the possible performance of services by the Company or an Affiliate to that customer or potential customer, in which Recipient was personally and substantially involved.

In the case of a governmental, regulatory or administrative agency, commission, department or other governmental authority, the customer or prospective customer will be determined by reference to the specific program offices or activities for which the Company or an Affiliate provides (or may reasonably provide) goods or services.

c)     Remedies.    Recipient acknowledges and agrees that a breach of any of the promises or agreements contained in this Section 13 will result in immediate, irreparable and continuing damage to the Company for which there is no adequate remedy at law, and the Company or an Affiliate will be entitled to injunctive relief, a decree for specific performance, and other relief as may be proper, including money damages.

14.     MISCELLANEOUS.    This Agreement contains the entire agreement of the parties with respect to its subject matter, provided, however, that if Recipient and the Company are parties to an existing written agreement addressing the subject matter of Section 13, such agreement shall control with respect to such subject matter until the termination thereof, at which time Section 13 shall control. This Agreement shall be binding upon and shall inure to the benefit of the respective parties, the successors and assigns of the Company, and the heirs, legatees and personal representatives of Recipient. The parties hereby agree that should any portion of this Agreement be judicially held to be invalid, unenforceable, or void, such portion shall be construed by limiting and reducing it, so as to be enforceable to the maximum extent compatible with the applicable law as is then in effect.

15.     GOVERNING LAW.    This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of Delaware without reference to such state’s principles of conflict of laws.

16.     NOTICE OF RESTRICTION.    The parties agree that any book entry representing the RSUs granted hereunder may contain a legend, or notation as the case may be, indicating that such RSUs are subject to the restrictions of this Agreement.

17.     ACKNOWLEDGMENT.    Recipient acknowledges that the RSUs constitute full and adequate consideration for Recipient’s obligations under this Agreement, the acceptance of the RSUs constitutes an unequivocal acceptance of this Agreement and any attempted modification or deletion will have no force or effect on the Company’s right to enforce the terms and conditions stated herein.

By accepting the RSUs, you agree to all of the terms and conditions set forth above and in the Plan.

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EX-31.1

Exhibit 31.1

SAIC, INC. AND SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, John P. Jumper, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended May 3, 2013 of SAIC, Inc. and 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 registrants as of, and for, the periods presented in this report;

4. The registrants’ 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 registrants 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 registrants, including each registrants’ 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 registrants’ 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 registrants’ internal control over financial reporting that occurred during the registrants’ most recent fiscal quarter (the registrants’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants’ internal control over financial reporting; and

5. The registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants’ auditors and the audit committee of the registrants’ 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 registrants’ 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 registrants’ internal control over financial reporting.

Date: June 4, 2013

/s/    JOHN P. JUMPER          

John P. Jumper

Chairman and Chief Executive Officer

EX-31.2

Exhibit 31.2

SAIC, INC. AND SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark W. Sopp, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the period ended May 3, 2013 of SAIC, Inc. and 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 registrants as of, and for, the periods presented in this report;

4. The registrants’ 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 registrants 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 registrants, including each registrants’ 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 registrants’ 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 registrants’ internal control over financial reporting that occurred during the registrants’ most recent fiscal quarter (the registrants’ fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants’ internal control over financial reporting; and

5. The registrants’ other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants’ auditors and the audit committee of the registrants’ 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 registrants’ 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 registrants’ internal control over financial reporting.

Date: June 4, 2013

/S/    MARK W. SOPP          

Mark W. Sopp

Chief Financial Officer

EX-32.1

Exhibit 32.1

SAIC, INC. AND 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 SAIC, Inc. (“SAIC”) and Science Applications International Corporation (“Science Applications”, and together with SAIC, the “Company”) on Form 10-Q for the period ended May 3, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. Jumper, Chief Executive Officer and President of each of SAIC and Science Applications, 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: June 4, 2013

/S/    JOHN P. JUMPER            

John P. Jumper

Chairman and Chief Executive Officer

EX-32.2

Exhibit 32.2

SAIC, INC. AND 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 SAIC, Inc. (“SAIC”) and Science Applications International Corporation (“Science Applications”, and together with SAIC, the “Company”) on Form 10-Q for the period ended May 3, 2013 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Mark W. Sopp, Chief Financial Officer of each of SAIC and Science Applications, 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: June 4, 2013

/S/    MARK W. SOPP        

Mark W. Sopp

Chief Financial Officer

XML

Legal Proceedings

3 Months Ended

May 03, 2013

Legal Proceedings

Note 9—Legal Proceedings:

Timekeeping Contract with City of New York

In March 2012, the Company reached a settlement with the U.S. Attorney’s Office for the Southern District of New York and the City of New York (City) relating to investigations being conducted by the U.S. Attorney’s Office and the City with respect to the Company’s contract to develop and implement an automated time and attendance and workforce management system (CityTime) for certain agencies of the City. As part of this settlement, the Company entered into a deferred prosecution agreement with the U.S. Attorney’s Office, under which the Company paid approximately $500 million and the U.S. Attorney’s Office deferred prosecution of a single criminal count against the Company, which alleged that the Company, through the conduct of certain managerial employees and others, caused the City to significantly overpay for the CityTime system. If the Company complies with the terms of the deferred prosecution agreement, the U.S Attorney will dismiss the criminal count at the end of a three-year period. In August 2012, the Company entered into an administrative agreement with the U.S. Army, on behalf of all agencies of the U.S. Government that confirms the Company’s continuing eligibility to enter into and perform contracts with all agencies of the U.S. Government following the CityTime settlement. The Army has determined that the U.S. Government will have adequate assurances under the terms of the administrative agreement that initiation of suspension or debarment is not necessary to protect the U.S. Government’s interests following the CityTime settlement. Under the terms of the administrative agreement, the Company has agreed, among other things, to maintain a contractor responsibility program having the specific elements described in the administrative agreement, including retaining a monitor and providing certain reports to the U.S. Army. The administrative agreement will continue in effect for five years, provided that the Company may request earlier termination after three years.

Data Privacy Litigation

The Company is a defendant in a putative class action, In Re: Science Applications International Corporation (SAIC) Backup Tape Data Theft Litigation, a Multidistrict Litigation (MDL), in the U.S. District Court for the District of Columbia. The MDL action consolidates for pretrial proceedings the following seven individual putative class action lawsuits filed against the Company from October 2011 through March 2012: (1) Richardson, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (2) Arellano, et al. v. SAIC, Inc. in U.S. District Court for the Western District of Texas; (3) Biggerman, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (4) Moskowitz, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (5) Palmer, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al., in U.S. District Court for the District of Columbia; (6) Losack, et al. v. SAIC, Inc. in U.S. District Court for the Southern District of California; and (7) Deatrick v. Science Applications International Corporation in U.S. District Court for the Northern District of California. The lawsuits were filed following the theft of computer backup tapes from a vehicle of a Company employee. The employee was transporting the backup tapes between federal facilities under an IT services contract the Company was performing in support of TRICARE, the health care program for members of the military, retirees and their families. The tapes contained personally identifiable and protected health information of approximately five million military clinic and hospital patients. There is no evidence that any of the data on the backup tapes has actually been accessed or viewed by an unauthorized person. In order for an unauthorized person to access or view the data on the backup tapes, it would require knowledge of and access to specific hardware and software and knowledge of the system and data structure. The Company has notified potentially impacted persons by letter and has offered one year of credit monitoring services to those who request these services and in certain circumstances, one year of identity restoration services.

In October 2012, plaintiffs filed a consolidated amended complaint in the MDL action, which supersedes all previously filed complaints in the individual lawsuits. The consolidated amended complaint includes allegations of negligence, breach of contract, breach of implied-in-fact contract, invasion of privacy by public disclosure of private facts and statutory violations of the Texas Deceptive Trade Practices Act, the California Confidentiality of Medical Information Act, California data breach notification requirements, the California Unfair Competition Law, various state consumer protection or deceptive practices statutes, state privacy statutes, the Fair Credit Reporting Act and the Privacy Act of 1974. The consolidated amended complaint seeks monetary relief, including unspecified actual damages, punitive damages, statutory damages of $1,000 for each class member and attorneys’ fees, as well as injunctive and declaratory relief.

The Company intends to vigorously defend itself against the claims made in the class action lawsuits. In November 2012, the Company filed a motion to dismiss all claims against the Company alleged in the consolidated amended complaint and all substantive briefing on the motion has concluded. The Company has insurance coverage against judgments or settlements relating to the claims being brought in these lawsuits, with a $10 million deductible. The insurance coverage also covers the Company’s defense costs, subject to the same deductible. As of May 3, 2013, the Company has recorded a loss provision of $10 million related to these lawsuits, representing the low end of the Company’s estimated gross loss. The Company believes that, if any loss is experienced by the Company in excess of its estimate, such a loss would not exceed the Company’s insurance coverage. As these lawsuits progress, many factors will affect the amount of the ultimate loss resulting from these claims being brought against the Company, including the outcome of any motions to dismiss, the results of any discovery, the outcome of any pretrial motions and the courts’ rulings on certain legal issues.

The Company has been informed that the Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) is investigating matters related to the incident. OCR is the division of HHS charged with enforcement of the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA) and the privacy, security and data breach rules which implement HIPAA. OCR may, among other things, require a corrective action plan and impose civil monetary penalties against the data owner (Department of Defense) and, in certain situations, against the data owners’ contractors, such as the Company. The Company is cooperating with TRICARE in responding to the OCR investigation.

Derivative and Securities Litigation

Between February and April 2012, six stockholder derivative lawsuits were filed, each purportedly on the Company’s behalf. Two cases have been withdrawn and the four remaining cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Derivative Litigation. The consolidated derivative complaint asserts claims against the Company’s directors and current and former officers, including the chief executive officer, two former chief executive officers, the chief financial officer, a former group president, the former program manager of the CityTime program, and the former chief systems engineer of the CityTime program. The consolidated derivative complaint claims that the defendants breached their fiduciary duties to the Company with respect to the CityTime contract for various reasons, including failure to supervise the adequacy of the Company’s internal controls, allowing the Company to issue misleading financial statements, and failure to exercise their oversight responsibilities to ensure that the Company complied with applicable laws, rules and regulations. The complaint further claims that the defendants are liable to the Company under theories of unjust enrichment, gross mismanagement, abuse of control, and violation of Section 14(a) of the Securities Exchange Act. The Company has filed a motion to dismiss the consolidated complaint because the respective plaintiffs did not serve a pre-suit demand before filing the derivative complaints. The Company has also received two stockholder demand letters related to CityTime (one of which is also related to the TRICARE matter described above), which an independent committee of the Company’s board of directors reviewed. The Company’s lead director has notified both stockholders’ attorneys, on behalf of the board of directors, that the Company has decided not to pursue the claims outlined in their demand letters.

Between February and April 2012, alleged stockholders filed three putative securities class actions. One case was withdrawn and two cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Securities Litigation. The consolidated securities complaint names as defendants the Company, its chief financial officer, two former chief executive officers, a former group president, and the former program manager on the CityTime program, and was filed purportedly on behalf of all purchasers of SAIC’s common stock from April 11, 2007 through September 1, 2011. The consolidated securities complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations that the Company and individual defendants made misleading statements or omissions about the Company’s revenues, operating income, and internal controls in connection with disclosures relating to the CityTime project. The plaintiffs seek to recover from the Company and the individual defendants an unspecified amount of damages class members allegedly incurred by buying SAIC’s stock at an inflated price. The Company intends to vigorously defend against these claims and has filed a motion to dismiss the consolidated securities complaint.

The Company currently believes that a loss relating to the above-described stockholder matters is reasonably possible, but the Company cannot reasonably estimate the range of loss in light of the fact that these matters are in their early stages.

Greek Government Contract

Background and Arbitration. In May 2003, the Company entered into a firm-fixed-price contract with the Hellenic Republic of Greece (the Customer) to provide a Command, Control, Communications, Coordination and Integration System (the System) to support the 2004 Athens Summer Olympic Games (the Olympics) and to serve as the security system for the Customer’s public order departments following completion of the Olympics.

In November 2008, the Customer accepted the System in writing pursuant to the requirements of the contract. At the time, the Customer determined that the System substantially complied with the terms of the contract and accepted the System with certain alleged minor omissions and deviations. Upon System acceptance, the Company invoiced the Customer for approximately $18 million, representing the undisputed portion of the contract balance owed to the Company. The Customer has not paid this final invoice.

In June 2009, the Company initiated arbitration before the International Chamber of Commerce against the Customer seeking damages for breaches of contract by the Customer. The Company seeks (i) aggregate damages in excess of $91 million for payment of amounts owed and other claims and damages, (ii) recovery of advance payment and performance bond amounts totaling $25 million and (iii) costs and expenses associated with the arbitration. The Customer filed an answer to the complaint denying liability on various grounds and a supplementary answer asserting set-off claims against amounts sought by the Company. The arbitration hearing was held in May 2012, and the Company filed a final brief in July 2012. Due to the complex nature of the legal and factual issues involved, the outcome of the arbitration is uncertain.

Financial Status and Contingencies. As a result of the significant uncertainties on this contract, the Company converted to the completed-contract method of accounting and ceased recognizing revenues for the System development portion of this contract in fiscal 2006. No profits or losses were recorded on the Greek contract during the three months ended May 3, 2013 and April 30, 2012. As of May 3, 2013, the Company has recorded $123 million of losses under the Greek contract, reflecting the Company’s estimated total cost to complete the System, assuming the Greek contract value was limited to the cash received to date. Based on the complex nature of this contractual situation and the difficulties encountered to date, significant uncertainties exist and the Company is unable to reliably estimate the ultimate outcome. The Company may reverse a portion of the losses from the Greek contract if it receives future payments as required under the modified Greek contract.

As of May 3, 2013, the Company has $15 million of receivables relating to value added tax (VAT) that the Company has paid and believes it is entitled to recover either as a refund from the taxing authorities or as a payment under the Greek contract. The Company has invoiced the Customer for $33 million for VAT and the Customer has failed to make payment. If the Customer fails to pay the outstanding VAT amounts or the Company is unable to recover the amount as a refund from the taxing authorities, the Company’s total losses on the Greek contract could increase.

The Company has met certain advance payment and performance bonding requirements through the issuance of euro-denominated standby letters of credit. As of May 3, 2013, there were $3 million in standby letters of credit outstanding relating to the support and maintenance of the System. The Company is seeking recovery of amounts drawn by the Customer in fiscal 2011 on the standby letters of credit in the ongoing arbitration. The principal subcontractor has provided to the Company euro-denominated standby letters of credit in the amount of $21 million as of May 3, 2013, of which $19 million relates to the delivery of the System. The Company may draw on the subcontractor’s standby letters of credit under certain circumstances by providing a statement to the responsible bank that the subcontractor has not fulfilled its obligations under the subcontract.

Nuclear Regulatory Commission

The U.S. Department of Justice filed a lawsuit against the Company in September 2004 in U.S. District Court for the District of Columbia alleging civil False Claims Act violations and breach of contract by the Company on two contracts that the Company had with the Nuclear Regulatory Commission (NRC). The complaint alleges that the Company’s performance of several subcontracts on separate U.S. Department of Energy (DOE) programs, the participation of a Company employee in an industry trade association, and certain other alleged relationships created organizational conflicts of interest under the two NRC contracts. The Company disputes that the work performed on the DOE programs and the alleged relationships raised by the government created organizational conflicts of interest. In July 2008, the jury found in favor of the government on the breach of contract and two False Claims Act counts. The jury awarded a nominal amount of $78 in damages for breach of contract and $2 million in damages for the False Claims Act claims. The judge entered the judgment in October 2008, trebling the False Claims Act damages and awarding a total of $585,000 in civil penalties. The Company appealed to the U.S. Court of Appeals for the District of Columbia Circuit. In December 2010, the Court of Appeals affirmed the District Court’s judgment as to both liability and damages of $78 on the breach of contract count and rescinded the judgment on the False Claims Act counts, including the aggregate damages and penalties. The Court of Appeals sent the False Claims Act counts back to the District Court for further proceedings. The Company has recorded a liability for an immaterial amount related to this matter as of May 3, 2013 based on its assessment of the likely outcome of this matter.

Other

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

Science Applications International Corporation

Legal Proceedings

Note 9—Legal Proceedings:

Timekeeping Contract with City of New York

In March 2012, the Company reached a settlement with the U.S. Attorney’s Office for the Southern District of New York and the City of New York (City) relating to investigations being conducted by the U.S. Attorney’s Office and the City with respect to the Company’s contract to develop and implement an automated time and attendance and workforce management system (CityTime) for certain agencies of the City. As part of this settlement, the Company entered into a deferred prosecution agreement with the U.S. Attorney’s Office, under which the Company paid approximately $500 million and the U.S. Attorney’s Office deferred prosecution of a single criminal count against the Company, which alleged that the Company, through the conduct of certain managerial employees and others, caused the City to significantly overpay for the CityTime system. If the Company complies with the terms of the deferred prosecution agreement, the U.S Attorney will dismiss the criminal count at the end of a three-year period. In August 2012, the Company entered into an administrative agreement with the U.S. Army, on behalf of all agencies of the U.S. Government that confirms the Company’s continuing eligibility to enter into and perform contracts with all agencies of the U.S. Government following the CityTime settlement. The Army has determined that the U.S. Government will have adequate assurances under the terms of the administrative agreement that initiation of suspension or debarment is not necessary to protect the U.S. Government’s interests following the CityTime settlement. Under the terms of the administrative agreement, the Company has agreed, among other things, to maintain a contractor responsibility program having the specific elements described in the administrative agreement, including retaining a monitor and providing certain reports to the U.S. Army. The administrative agreement will continue in effect for five years, provided that the Company may request earlier termination after three years.

Data Privacy Litigation

The Company is a defendant in a putative class action, In Re: Science Applications International Corporation (SAIC) Backup Tape Data Theft Litigation, a Multidistrict Litigation (MDL), in the U.S. District Court for the District of Columbia. The MDL action consolidates for pretrial proceedings the following seven individual putative class action lawsuits filed against the Company from October 2011 through March 2012: (1) Richardson, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (2) Arellano, et al. v. SAIC, Inc. in U.S. District Court for the Western District of Texas; (3) Biggerman, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (4) Moskowitz, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (5) Palmer, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al., in U.S. District Court for the District of Columbia; (6) Losack, et al. v. SAIC, Inc. in U.S. District Court for the Southern District of California; and (7) Deatrick v. Science Applications International Corporation in U.S. District Court for the Northern District of California. The lawsuits were filed following the theft of computer backup tapes from a vehicle of a Company employee. The employee was transporting the backup tapes between federal facilities under an IT services contract the Company was performing in support of TRICARE, the health care program for members of the military, retirees and their families. The tapes contained personally identifiable and protected health information of approximately five million military clinic and hospital patients. There is no evidence that any of the data on the backup tapes has actually been accessed or viewed by an unauthorized person. In order for an unauthorized person to access or view the data on the backup tapes, it would require knowledge of and access to specific hardware and software and knowledge of the system and data structure. The Company has notified potentially impacted persons by letter and has offered one year of credit monitoring services to those who request these services and in certain circumstances, one year of identity restoration services.

In October 2012, plaintiffs filed a consolidated amended complaint in the MDL action, which supersedes all previously filed complaints in the individual lawsuits. The consolidated amended complaint includes allegations of negligence, breach of contract, breach of implied-in-fact contract, invasion of privacy by public disclosure of private facts and statutory violations of the Texas Deceptive Trade Practices Act, the California Confidentiality of Medical Information Act, California data breach notification requirements, the California Unfair Competition Law, various state consumer protection or deceptive practices statutes, state privacy statutes, the Fair Credit Reporting Act and the Privacy Act of 1974. The consolidated amended complaint seeks monetary relief, including unspecified actual damages, punitive damages, statutory damages of $1,000 for each class member and attorneys’ fees, as well as injunctive and declaratory relief.

The Company intends to vigorously defend itself against the claims made in the class action lawsuits. In November 2012, the Company filed a motion to dismiss all claims against the Company alleged in the consolidated amended complaint and all substantive briefing on the motion has concluded. The Company has insurance coverage against judgments or settlements relating to the claims being brought in these lawsuits, with a $10 million deductible. The insurance coverage also covers the Company’s defense costs, subject to the same deductible. As of May 3, 2013, the Company has recorded a loss provision of $10 million related to these lawsuits, representing the low end of the Company’s estimated gross loss. The Company believes that, if any loss is experienced by the Company in excess of its estimate, such a loss would not exceed the Company’s insurance coverage. As these lawsuits progress, many factors will affect the amount of the ultimate loss resulting from these claims being brought against the Company, including the outcome of any motions to dismiss, the results of any discovery, the outcome of any pretrial motions and the courts’ rulings on certain legal issues.

The Company has been informed that the Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) is investigating matters related to the incident. OCR is the division of HHS charged with enforcement of the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA) and the privacy, security and data breach rules which implement HIPAA. OCR may, among other things, require a corrective action plan and impose civil monetary penalties against the data owner (Department of Defense) and, in certain situations, against the data owners’ contractors, such as the Company. The Company is cooperating with TRICARE in responding to the OCR investigation.

Derivative and Securities Litigation

Between February and April 2012, six stockholder derivative lawsuits were filed, each purportedly on the Company’s behalf. Two cases have been withdrawn and the four remaining cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Derivative Litigation. The consolidated derivative complaint asserts claims against the Company’s directors and current and former officers, including the chief executive officer, two former chief executive officers, the chief financial officer, a former group president, the former program manager of the CityTime program, and the former chief systems engineer of the CityTime program. The consolidated derivative complaint claims that the defendants breached their fiduciary duties to the Company with respect to the CityTime contract for various reasons, including failure to supervise the adequacy of the Company’s internal controls, allowing the Company to issue misleading financial statements, and failure to exercise their oversight responsibilities to ensure that the Company complied with applicable laws, rules and regulations. The complaint further claims that the defendants are liable to the Company under theories of unjust enrichment, gross mismanagement, abuse of control, and violation of Section 14(a) of the Securities Exchange Act. The Company has filed a motion to dismiss the consolidated complaint because the respective plaintiffs did not serve a pre-suit demand before filing the derivative complaints. The Company has also received two stockholder demand letters related to CityTime (one of which is also related to the TRICARE matter described above), which an independent committee of the Company’s board of directors reviewed. The Company’s lead director has notified both stockholders’ attorneys, on behalf of the board of directors, that the Company has decided not to pursue the claims outlined in their demand letters.

Between February and April 2012, alleged stockholders filed three putative securities class actions. One case was withdrawn and two cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Securities Litigation. The consolidated securities complaint names as defendants the Company, its chief financial officer, two former chief executive officers, a former group president, and the former program manager on the CityTime program, and was filed purportedly on behalf of all purchasers of SAIC’s common stock from April 11, 2007 through September 1, 2011. The consolidated securities complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations that the Company and individual defendants made misleading statements or omissions about the Company’s revenues, operating income, and internal controls in connection with disclosures relating to the CityTime project. The plaintiffs seek to recover from the Company and the individual defendants an unspecified amount of damages class members allegedly incurred by buying SAIC’s stock at an inflated price. The Company intends to vigorously defend against these claims and has filed a motion to dismiss the consolidated securities complaint.

The Company currently believes that a loss relating to the above-described stockholder matters is reasonably possible, but the Company cannot reasonably estimate the range of loss in light of the fact that these matters are in their early stages.

Greek Government Contract

Background and Arbitration. In May 2003, the Company entered into a firm-fixed-price contract with the Hellenic Republic of Greece (the Customer) to provide a Command, Control, Communications, Coordination and Integration System (the System) to support the 2004 Athens Summer Olympic Games (the Olympics) and to serve as the security system for the Customer’s public order departments following completion of the Olympics.

In November 2008, the Customer accepted the System in writing pursuant to the requirements of the contract. At the time, the Customer determined that the System substantially complied with the terms of the contract and accepted the System with certain alleged minor omissions and deviations. Upon System acceptance, the Company invoiced the Customer for approximately $18 million, representing the undisputed portion of the contract balance owed to the Company. The Customer has not paid this final invoice.

In June 2009, the Company initiated arbitration before the International Chamber of Commerce against the Customer seeking damages for breaches of contract by the Customer. The Company seeks (i) aggregate damages in excess of $91 million for payment of amounts owed and other claims and damages, (ii) recovery of advance payment and performance bond amounts totaling $25 million and (iii) costs and expenses associated with the arbitration. The Customer filed an answer to the complaint denying liability on various grounds and a supplementary answer asserting set-off claims against amounts sought by the Company. The arbitration hearing was held in May 2012, and the Company filed a final brief in July 2012. Due to the complex nature of the legal and factual issues involved, the outcome of the arbitration is uncertain.

Financial Status and Contingencies. As a result of the significant uncertainties on this contract, the Company converted to the completed-contract method of accounting and ceased recognizing revenues for the System development portion of this contract in fiscal 2006. No profits or losses were recorded on the Greek contract during the three months ended May 3, 2013 and April 30, 2012. As of May 3, 2013, the Company has recorded $123 million of losses under the Greek contract, reflecting the Company’s estimated total cost to complete the System, assuming the Greek contract value was limited to the cash received to date. Based on the complex nature of this contractual situation and the difficulties encountered to date, significant uncertainties exist and the Company is unable to reliably estimate the ultimate outcome. The Company may reverse a portion of the losses from the Greek contract if it receives future payments as required under the modified Greek contract.

As of May 3, 2013, the Company has $15 million of receivables relating to value added tax (VAT) that the Company has paid and believes it is entitled to recover either as a refund from the taxing authorities or as a payment under the Greek contract. The Company has invoiced the Customer for $33 million for VAT and the Customer has failed to make payment. If the Customer fails to pay the outstanding VAT amounts or the Company is unable to recover the amount as a refund from the taxing authorities, the Company’s total losses on the Greek contract could increase.

The Company has met certain advance payment and performance bonding requirements through the issuance of euro-denominated standby letters of credit. As of May 3, 2013, there were $3 million in standby letters of credit outstanding relating to the support and maintenance of the System. The Company is seeking recovery of amounts drawn by the Customer in fiscal 2011 on the standby letters of credit in the ongoing arbitration. The principal subcontractor has provided to the Company euro-denominated standby letters of credit in the amount of $21 million as of May 3, 2013, of which $19 million relates to the delivery of the System. The Company may draw on the subcontractor’s standby letters of credit under certain circumstances by providing a statement to the responsible bank that the subcontractor has not fulfilled its obligations under the subcontract.

Nuclear Regulatory Commission

The U.S. Department of Justice filed a lawsuit against the Company in September 2004 in U.S. District Court for the District of Columbia alleging civil False Claims Act violations and breach of contract by the Company on two contracts that the Company had with the Nuclear Regulatory Commission (NRC). The complaint alleges that the Company’s performance of several subcontracts on separate U.S. Department of Energy (DOE) programs, the participation of a Company employee in an industry trade association, and certain other alleged relationships created organizational conflicts of interest under the two NRC contracts. The Company disputes that the work performed on the DOE programs and the alleged relationships raised by the government created organizational conflicts of interest. In July 2008, the jury found in favor of the government on the breach of contract and two False Claims Act counts. The jury awarded a nominal amount of $78 in damages for breach of contract and $2 million in damages for the False Claims Act claims. The judge entered the judgment in October 2008, trebling the False Claims Act damages and awarding a total of $585,000 in civil penalties. The Company appealed to the U.S. Court of Appeals for the District of Columbia Circuit. In December 2010, the Court of Appeals affirmed the District Court’s judgment as to both liability and damages of $78 on the breach of contract count and rescinded the judgment on the False Claims Act counts, including the aggregate damages and penalties. The Court of Appeals sent the False Claims Act counts back to the District Court for further proceedings. The Company has recorded a liability for an immaterial amount related to this matter as of May 3, 2013 based on its assessment of the likely outcome of this matter.

Other

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

XML

Schedule of Segment Reporting Information by Segment (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Segment Reporting Information [Line Items]
Revenues	$ 2,707	$ 2,764
Operating income (loss)	142	208
Health, Energy And Civil Solutions
Segment Reporting Information [Line Items]
Revenues	521	416
Operating income (loss)	41	35
Intelligence and Cybersecurity Solutions
Segment Reporting Information [Line Items]
Revenues	1,080	1,185
Operating income (loss)	76	95
Technical Services and Information Technology
Segment Reporting Information [Line Items]
Revenues	1,107	1,163
Operating income (loss)	71	85
Intersegment Elimination
Segment Reporting Information [Line Items]
Revenues	(1)
Corporate and Other
Segment Reporting Information [Line Items]
Operating income (loss)	$ (46)	$ (7)

XML

Condensed Consolidated Balance Sheets (USD $) In Millions, unless otherwise specified	May 03, 2013	Jan. 31, 2013
Current assets:
Cash and cash equivalents	$ 563	$ 736
Receivables, net	2,063	1,889
Inventory, prepaid expenses and other current assets	393	454
Total current assets	3,019	3,079
Property, plant and equipment net	315	318
Intangible assets, net	173	190
Goodwill	2,195	2,195
Deferred income taxes	14	14
Other assets	74	79
Total assets	5,790	5,875
Current liabilities:
Accounts payable and accrued liabilities	1,211	1,249
Accrued payroll and employee benefits	448	542
Dividends payable	357
Notes payable and long-term debt, current portion	1	2
Total current liabilities	2,017	1,793
Notes payable and long-term debt, net of current portion	1,297	1,296
Other long-term liabilities	172	168
Commitments and contingencies (Notes 9 and 10)
Stockholders' equity:
Common stock
Additional paid-in capital	2,124	2,110
Retained earnings	182	510
Accumulated other comprehensive loss	(2)	(2)
Total stockholders' equity	2,304	2,618
Total liabilities and stockholders' equity	5,790	5,875
Science Applications International Corporation
Current assets:
Cash and cash equivalents	563	736
Receivables, net	2,063	1,889
Inventory, prepaid expenses and other current assets	393	454
Total current assets	3,019	3,079
Property, plant and equipment net	315	318
Intangible assets, net	173	190
Goodwill	2,195	2,195
Deferred income taxes	14	14
Other assets	74	79
Note receivable from SAIC, Inc. (Note 6)	16
Total assets	5,806	5,875
Current liabilities:
Accounts payable and accrued liabilities	1,211	1,249
Accrued payroll and employee benefits	448	542
Notes payable and long-term debt, current portion	1	2
Total current liabilities	1,660	1,793
Notes payable and long-term debt, net of current portion	1,297	1,296
Notes payable to SAIC, Inc. (Note 6)		22
Other long-term liabilities	172	168
Commitments and contingencies (Notes 9 and 10)
Stockholders' equity:
Additional paid-in capital	233	233
Retained earnings	2,446	2,365
Accumulated other comprehensive loss	(2)	(2)
Total stockholders' equity	2,677	2,596
Total liabilities and stockholders' equity	$ 5,806	$ 5,875

XML

Earnings Per Share (EPS)

3 Months Ended

May 03, 2013

Earnings Per Share (EPS)

Note 2—Earnings Per Share (EPS):

The Company is required to allocate a portion of its earnings to its unvested stock awards containing nonforfeitable rights to dividends or dividend equivalents (participating securities) in calculating EPS using the two-class method. Unvested stock awards granted prior to fiscal 2013 are participating securities requiring application of the two-class method. In fiscal 2013, the Company began issuing unvested stock awards that have forfeitable rights to dividends or dividend equivalents. These stock awards are not participating securities requiring application of the two-class method, but are dilutive common share equivalents subject to the treasury stock method. Basic EPS is computed by dividing income less earnings allocable to participating securities by the basic weighted average number of shares outstanding. Diluted EPS is computed similar 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.

A reconciliation of the income used to compute basic and diluted EPS for the periods presented was as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Basic EPS:
Net income, as reported	$	81		$	117
Less: allocation of distributed and undistributed earnings to participating securities		(4	)		(3	)
Net income, for computing basic EPS	$	77		$	114
Diluted EPS:
Net income, as reported	$	81		$	117
Less: allocation of distributed and undistributed earnings to participating securities		(4	)		(3	)
Net income, for computing diluted EPS	$	77		$	114

A reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Basic weighted average number of shares outstanding		336		330
Dilutive common share equivalents—stock options and other stock awards		—		—
Diluted weighted average number of shares outstanding		336		330

For the quarter ended May 3, 2013, the declared special dividend exceeded current period earnings. Therefore, the assumed exercise of 2 million stock options and stock awards was excluded from diluted weighted average shares outstanding because their inclusion would have been anti-dilutive.

The following stock-based awards were excluded from the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Antidilutive stock options excluded		20		21
Unvested stock awards excluded		2		—
Performance-based stock awards excluded		—		1

Science Applications International Corporation

Earnings Per Share (EPS)

Note 2—Earnings Per Share (EPS):

The Company is required to allocate a portion of its earnings to its unvested stock awards containing nonforfeitable rights to dividends or dividend equivalents (participating securities) in calculating EPS using the two-class method. Unvested stock awards granted prior to fiscal 2013 are participating securities requiring application of the two-class method. In fiscal 2013, the Company began issuing unvested stock awards that have forfeitable rights to dividends or dividend equivalents. These stock awards are not participating securities requiring application of the two-class method, but are dilutive common share equivalents subject to the treasury stock method. Basic EPS is computed by dividing income less earnings allocable to participating securities by the basic weighted average number of shares outstanding. Diluted EPS is computed similar 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.

A reconciliation of the income used to compute basic and diluted EPS for the periods presented was as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Basic EPS:
Net income, as reported	$	81		$	117
Less: allocation of distributed and undistributed earnings to participating securities		(4	)		(3	)
Net income, for computing basic EPS	$	77		$	114
Diluted EPS:
Net income, as reported	$	81		$	117
Less: allocation of distributed and undistributed earnings to participating securities		(4	)		(3	)
Net income, for computing diluted EPS	$	77		$	114

A reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Basic weighted average number of shares outstanding		336		330
Dilutive common share equivalents—stock options and other stock awards		—		—
Diluted weighted average number of shares outstanding		336		330

For the quarter ended May 3, 2013, the declared special dividend exceeded current period earnings. Therefore, the assumed exercise of 2 million stock options and stock awards was excluded from diluted weighted average shares outstanding because their inclusion would have been anti-dilutive.

The following stock-based awards were excluded from the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Antidilutive stock options excluded		20		21
Unvested stock awards excluded		2		—
Performance-based stock awards excluded		—		1

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Financial Instruments (Tables)

3 Months Ended

May 03, 2013

Schedule of Notes Payable and Long-Term Debt

The Company’s notes payable and long-term debt consisted of the following:

	Stated interest rate			Effective interest rate			May 3, 2013		January 31, 2013
	(dollars in millions)
SAIC senior unsecured notes:
$450 million notes, which mature in December 2020		4.45	%		4.53	%	$	449	$	449
$300 million notes, which mature in December 2040		5.95	%		6.03	%		300		300
Science Applications senior unsecured notes:
$250 million notes, which mature in July 2032		7.13	%		7.43	%		248		248
$300 million notes, which mature in July 2033		5.50	%		5.78	%		296		297
Capital leases and other notes payable due on various dates through fiscal 2017		0%-2.4	%		Various			5		4
Total notes payable and long-term debt								1,298		1,298
Less current portion								1		2
Total notes payable and long-term debt, net of current portion							$	1,297	$	1,296
Fair value of notes payable and long-term debt							$	1,432	$	1,390

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Other Commitments and Contingencies

3 Months Ended

May 03, 2013

Other Commitments and Contingencies

Note 10—Other Commitments and Contingencies:

VirnetX, Inc.

In fiscal 2007, the Company transferred several patents to VirnetX Inc., a subsidiary of VirnetX Holding Corp. In consideration of this transfer, the Company received certain license rights and the right to receive a percentage of the consideration received in patent infringement or enforcement claims against third parties. In November 2012, a jury found that Apple Corporation infringed two of the patents that the Company previously transferred to VirnetX and awarded approximately $368 million to VirnetX. Under its agreements with VirnetX, the Company would receive 25% of the proceeds obtained by VirnetX in this lawsuit against Apple after reduction for attorneys’ fees and costs incurred in litigating those claims. In February 2013, the judge entered judgment against Apple consistent with the jury verdict; however, Apple has filed a motion to alter or amend the judgment. No assurances can be given as to when or if the Company will receive any proceeds in connection with this jury award. In addition, if the Company receives any proceeds under its agreements with VirnetX, the Company is required to pay a royalty on the proceeds received to the customer who paid for the development of the technology. The Company does not have any assets or liabilities recorded in connection with this matter as of May 3, 2012.

Government Investigations and Reviews

The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect 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. The Company is in discussions with the government on various investigations and reviews, including investigations arising under the Civil False Claims Act, one of which was settled in May 2013. As of May 3, 2013, the Company had recorded loss provisions aggregating approximately $18 million relating to such matters. We believe that the probability is remote that the outcome of any current investigation will have a material adverse effect on the Company as a whole.

U.S. Government agencies, including the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA) 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, including: a contractor’s accounting system, earned value management system, estimating system, materials management and accounting system, property management system and purchasing system. Both contractors and the U.S. Government agencies conducting these audits and reviews have come under increased scrutiny. As a result, audits and reviews have become more rigorous and the standards to which the Company is held are being more strictly interpreted, increasing the likelihood of an audit or review resulting in an adverse outcome. During the course of its current audits, the DCAA is closely examining and questioning several of the Company’s long established and disclosed practices that it had previously audited and accepted, increasing the uncertainty as to the ultimate conclusion that will be reached.

The Company changed its indirect rate structure used in its indirect cost system and its direct labor bid structure used for its estimating system for fiscal 2011 and future years. The DCAA is performing reviews of these changes and the Company’s compliance with certain other U.S. Government Cost Accounting Standards. A finding of significant control deficiencies in the Company’s system audits or other reviews can result in decremented billing rates to its U.S. Government customers until the control deficiencies are corrected and their remediation is accepted by the DCMA.

The Company’s indirect cost audits by the DCAA have not been completed for fiscal 2006 and subsequent fiscal years. Although the Company has recorded contract revenues subsequent to fiscal 2005 based upon an estimate of costs that the Company believes will be approved upon final audit or review, the Company does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Company’s estimates, its profitability would be adversely affected. As of May 3, 2013, the Company has recorded a liability of $35 million for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs.

Variable Interest Entity (VIE)

In fiscal 2012, the Company entered into a fixed price agreement to provide engineering, procurement, and construction services to a special purpose limited liability company for a specific renewable energy project. The Company analyzed this arrangement and determined the special purpose limited liability company is a VIE. However, this VIE was not consolidated by the Company because the Company is not the primary beneficiary. The project is partially financed by the Company’s provision of extended payment terms in the amount of $133 million for certain of its services performed on the project. The arrangement also contemplates monetary penalties and project guarantees if the Company does not meet certain completion deadlines. The Company expects to bill a total of $220 million to complete the project. At May 3, 2013, the Company had a receivable of $93 million due from this VIE.

Tax Audits and Reviews

The Company files income tax returns in the United States and various state and foreign jurisdictions and is subject to routine compliance reviews by the IRS and other taxing authorities. The Company has effectively settled with the IRS for fiscal years prior to and including fiscal 2008. The Company also settled fiscal 2011 and 2012 as a result of the Company’s participation in the IRS Compliance Assurance Process (CAP) beginning in fiscal 2011. As part of the CAP, the Company and the IRS endeavor to agree on the treatment of all tax positions prior to the tax return being filed, thereby greatly reducing the period of time between tax return submission and settlement with the IRS. Future and ongoing reviews could have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

As of May 3, 2013, the Company had liabilities for uncertain tax positions of $25 million, $21 million of which were classified as other long-term liabilities in the condensed consolidated balance sheet.

During the next 12 months, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and international, could be reached with respect to $12 million of the Company’s uncertain tax positions including $2 million of previously accrued interest, depending on the timing of ongoing examinations, any litigation and expiration of statute of limitations, either because the Company’s tax positions are sustained or because the Company agrees to their disallowance and pays the related income tax. The resolution of tax matters related to uncertain tax positions could result in a $9 million reduction in income tax expense during the third quarter of fiscal 2014.

While the Company believes it has adequate accruals for uncertain tax positions, the tax authorities may determine that the Company owes taxes in excess of recorded accruals or the recorded accruals may be in excess of the final settlement amounts agreed to by the tax authorities.

The Company is subject to periodic audits by government agencies for taxes other than income taxes. The Company does not believe that the outcome of any other such tax matters would have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

Letters of Credit and Surety Bonds

The Company has outstanding letters of credit of $100 million as of May 3, 2013, principally related to guarantees on contracts. The Company also has outstanding surety bonds in the amount of $263 million, principally related to performance and payment bonds on the Company’s contracts.

Other

The Army Brigade Combat Team Modernization Engineering, Manufacturing and Development program was terminated for convenience by the DoD effective in fiscal 2012. From October 2009 through termination, the Company and its prime contractor performed on this program under an undefinitized change order with a provisional billing rate that allowed the Company to receive a lesser amount of the projected fee than the estimated fee due until completion of the contract negotiations. The Company recognized revenues of approximately $481 million, including estimated fee, from October 2009 through May 3, 2013 under the undefinitized change order. During fiscal 2013, an agreement in principle was reached between the prime contractor and the DoD; however a formal contract modification has not yet been received.

Science Applications International Corporation

Other Commitments and Contingencies

Note 10—Other Commitments and Contingencies:

VirnetX, Inc.

In fiscal 2007, the Company transferred several patents to VirnetX Inc., a subsidiary of VirnetX Holding Corp. In consideration of this transfer, the Company received certain license rights and the right to receive a percentage of the consideration received in patent infringement or enforcement claims against third parties. In November 2012, a jury found that Apple Corporation infringed two of the patents that the Company previously transferred to VirnetX and awarded approximately $368 million to VirnetX. Under its agreements with VirnetX, the Company would receive 25% of the proceeds obtained by VirnetX in this lawsuit against Apple after reduction for attorneys’ fees and costs incurred in litigating those claims. In February 2013, the judge entered judgment against Apple consistent with the jury verdict; however, Apple has filed a motion to alter or amend the judgment. No assurances can be given as to when or if the Company will receive any proceeds in connection with this jury award. In addition, if the Company receives any proceeds under its agreements with VirnetX, the Company is required to pay a royalty on the proceeds received to the customer who paid for the development of the technology. The Company does not have any assets or liabilities recorded in connection with this matter as of May 3, 2012.

Government Investigations and Reviews

The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect 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. The Company is in discussions with the government on various investigations and reviews, including investigations arising under the Civil False Claims Act, one of which was settled in May 2013. As of May 3, 2013, the Company had recorded loss provisions aggregating approximately $18 million relating to such matters. We believe that the probability is remote that the outcome of any current investigation will have a material adverse effect on the Company as a whole.

U.S. Government agencies, including the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA) 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, including: a contractor’s accounting system, earned value management system, estimating system, materials management and accounting system, property management system and purchasing system. Both contractors and the U.S. Government agencies conducting these audits and reviews have come under increased scrutiny. As a result, audits and reviews have become more rigorous and the standards to which the Company is held are being more strictly interpreted, increasing the likelihood of an audit or review resulting in an adverse outcome. During the course of its current audits, the DCAA is closely examining and questioning several of the Company’s long established and disclosed practices that it had previously audited and accepted, increasing the uncertainty as to the ultimate conclusion that will be reached.

The Company changed its indirect rate structure used in its indirect cost system and its direct labor bid structure used for its estimating system for fiscal 2011 and future years. The DCAA is performing reviews of these changes and the Company’s compliance with certain other U.S. Government Cost Accounting Standards. A finding of significant control deficiencies in the Company’s system audits or other reviews can result in decremented billing rates to its U.S. Government customers until the control deficiencies are corrected and their remediation is accepted by the DCMA.

The Company’s indirect cost audits by the DCAA have not been completed for fiscal 2006 and subsequent fiscal years. Although the Company has recorded contract revenues subsequent to fiscal 2005 based upon an estimate of costs that the Company believes will be approved upon final audit or review, the Company does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Company’s estimates, its profitability would be adversely affected. As of May 3, 2013, the Company has recorded a liability of $35 million for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs.

Variable Interest Entity (VIE)

In fiscal 2012, the Company entered into a fixed price agreement to provide engineering, procurement, and construction services to a special purpose limited liability company for a specific renewable energy project. The Company analyzed this arrangement and determined the special purpose limited liability company is a VIE. However, this VIE was not consolidated by the Company because the Company is not the primary beneficiary. The project is partially financed by the Company’s provision of extended payment terms in the amount of $133 million for certain of its services performed on the project. The arrangement also contemplates monetary penalties and project guarantees if the Company does not meet certain completion deadlines. The Company expects to bill a total of $220 million to complete the project. At May 3, 2013, the Company had a receivable of $93 million due from this VIE.

Tax Audits and Reviews

The Company files income tax returns in the United States and various state and foreign jurisdictions and is subject to routine compliance reviews by the IRS and other taxing authorities. The Company has effectively settled with the IRS for fiscal years prior to and including fiscal 2008. The Company also settled fiscal 2011 and 2012 as a result of the Company’s participation in the IRS Compliance Assurance Process (CAP) beginning in fiscal 2011. As part of the CAP, the Company and the IRS endeavor to agree on the treatment of all tax positions prior to the tax return being filed, thereby greatly reducing the period of time between tax return submission and settlement with the IRS. Future and ongoing reviews could have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows.

As of May 3, 2013, the Company had liabilities for uncertain tax positions of $25 million, $21 million of which were classified as other long-term liabilities in the condensed consolidated balance sheet.

During the next 12 months, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and international, could be reached with respect to $12 million of the Company’s uncertain tax positions including $2 million of previously accrued interest, depending on the timing of ongoing examinations, any litigation and expiration of statute of limitations, either because the Company’s tax positions are sustained or because the Company agrees to their disallowance and pays the related income tax. The resolution of tax matters related to uncertain tax positions could result in a $9 million reduction in income tax expense during the third quarter of fiscal 2014.

While the Company believes it has adequate accruals for uncertain tax positions, the tax authorities may determine that the Company owes taxes in excess of recorded accruals or the recorded accruals may be in excess of the final settlement amounts agreed to by the tax authorities.

The Company is subject to periodic audits by government agencies for taxes other than income taxes. The Company does not believe that the outcome of any other such tax matters would have a material adverse effect on its consolidated financial position, results of operations, or cash flows.

Letters of Credit and Surety Bonds

The Company has outstanding letters of credit of $100 million as of May 3, 2013, principally related to guarantees on contracts. The Company also has outstanding surety bonds in the amount of $263 million, principally related to performance and payment bonds on the Company’s contracts.

Other

The Army Brigade Combat Team Modernization Engineering, Manufacturing and Development program was terminated for convenience by the DoD effective in fiscal 2012. From October 2009 through termination, the Company and its prime contractor performed on this program under an undefinitized change order with a provisional billing rate that allowed the Company to receive a lesser amount of the projected fee than the estimated fee due until completion of the contract negotiations. The Company recognized revenues of approximately $481 million, including estimated fee, from October 2009 through May 3, 2013 under the undefinitized change order. During fiscal 2013, an agreement in principle was reached between the prime contractor and the DoD; however a formal contract modification has not yet been received.

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Related Party Transactions - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013 Y
Related Party Transaction [Line Items]
Credit facility, maturity date	2018
Related party maturity date	November 2013
Period extension for portions of intercompany loans (years)	1
Notes Which Mature In December 2020
Related Party Transaction [Line Items]
Notes payable, related parties	450
Stated interest rate	4.45%
Notes Which Mature In December 2040
Related Party Transaction [Line Items]
Notes payable, related parties	300
Stated interest rate	5.95%
Notes Which Mature In July 2033
Related Party Transaction [Line Items]
Notes payable, related parties	300
Stated interest rate	5.50%
Notes Which Mature In July 2032
Related Party Transaction [Line Items]
Notes payable, related parties	250
Stated interest rate	7.13%

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Schedule of Stock Option Activity (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended	12 Months Ended
	May 03, 2013	Jan. 31, 2013
Stock-Based Compensation [Abstract]
Shares of stock under stock options, Outstanding, beginning balance	19.6
Shares of stock under stock options, Options granted	4.7
Shares of stock under stock options, Options forfeited or expired	(4.7)
Shares of stock under stock options, Outstanding, ending balance	19.6	19.6
Shares of stock under stock options, Outstanding,Exercisable	8.5
Weighted average exercise price, Outstanding, beginning balance	$ 16.81
Weighted average exercise price, Options granted	$ 13.55
Weighted average exercise price, Options forfeited or expired	$ 18.37
Weighted average exercise price, Outstanding, ending balance	$ 15.66	$ 16.81
Weighted average exercise price,Exercisable at May 3, 2013	$ 17.28
Weighted average remaining contractual term, Outstanding	4 years 3 months 18 days	3 years
Weighted average remaining contractual term, Exercisable May 3, 2013	2 years 4 months 24 days
Aggregate intrinsic value, Outstanding, ending balance	$ 14.00
Aggregate intrinsic value, Exercisable at May 3, 2013	$ 2

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Summary of Significant Accounting Policies - Additional Information (Detail) (USD $) In Millions, except Per Share data, unless otherwise specified	1 Months Ended		3 Months Ended
	Mar. 31, 2013	Aug. 31, 2012 Entity	May 03, 2013 Customer Y Building acre	Apr. 30, 2012
Significant Accounting Policies [Line Items]
Percentage of shares of newly formed company after spin-off transaction		100.00%
Number of companies separated		2
Period for billing and collection of unbilled receivables, maximum (in years)			1
Period of collection for contract retentions, minimum (in years)			1
Outstanding receivables			$ 152
Number of commercial customers within extended deferred payments terms			1
Increase (decrease) in income due to contract estimates			$ 4	$ 4
Increase (decrease) in income due to contract estimates per diluted share			$ 0.01	$ 0.01
Dividend declared	$ 1.00		$ 1.00
Dividends Payable, Date to be Paid	Jun. 28, 2013
Dividends Payable, Date of Record	Jun. 14, 2013
Period of purchase and sale agreement			6 years
Area of land			18
Number of office building			4
Number of Building under lease back agreement			3
Minimum
Significant Accounting Policies [Line Items]
Period of extension for deferred payment terms (in years)			1
Science Applications International Corporation
Significant Accounting Policies [Line Items]
Ownership interest			100.00%

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Business Segment Information (Tables)

3 Months Ended

May 03, 2013

Schedule of Segment Reporting Information by Segment

The segment information for the periods presented, with the prior year period recast to give effect to the above changes in reportable segments, was as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Revenues:
Health and Engineering	$	521		$	416
National Security Solutions		1,080			1,185
Technical Services and Information Technology		1,107			1,163
Intersegment elimination		(1	)		—
Total revenues	$	2,707		$	2,764
Operating income (loss):
Health and Engineering	$	41		$	35
National Security Solutions		76			95
Technical Services and Information Technology		71			85
Corporate and Other		(46	)		(7	)
Total operating income	$	142		$	208

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Schedule of Notes Payable and Long-Term Debt (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Jan. 31, 2013
Debt Instrument [Line Items]
Total notes payable and long-term debt	$ 1,298	$ 1,298
Less current portion	1	2
Total notes payable and long-term debt, net of current portion	1,297	1,296
Fair value of notes payable and long-term debt	1,432	1,390
Notes Which Mature In December 2020
Debt Instrument [Line Items]
Senior unsecured notes	449	449
Stated interest rate	4.45%
Effective interest rate	4.53%
Notes Which Mature In December 2040
Debt Instrument [Line Items]
Senior unsecured notes	300	300
Stated interest rate	5.95%
Effective interest rate	6.03%
Notes Which Mature In July 2032
Debt Instrument [Line Items]
Senior unsecured notes	248	248
Stated interest rate	7.13%
Effective interest rate	7.43%
Notes Which Mature In July 2033
Debt Instrument [Line Items]
Senior unsecured notes	296	297
Stated interest rate	5.50%
Effective interest rate	5.78%
Other Notes Payable Due on Various Dates through Fiscal 2017
Debt Instrument [Line Items]
Other notes payable due on various dates through fiscal 2017	$ 5	$ 4
Minimum stated interest rate	0.00%
Maximum stated interest rate	2.40%

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Schedule of Stock-Based Awards Excluded from Weighted Average Shares Outstanding (Detail) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock based awards	2
Stock Options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock based awards	20	21
Outstanding Stock Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock based awards		1
Unvested Stock Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock based awards	2

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Schedule of Performance-Based Stock Award Activity (Detail) (Performance-Based Stock Awards, USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	May 03, 2013
Performance-Based Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, beginning balance	1.0
Expected number of shares of stock to be issued under performance-based stock awards, Awards vested	(0.4)
Expected number of shares of stock to be issued under performance-based stock awards, Awards forfeited	(0.1)
Shares, ending balance	0.5
Weighted average grant-date fair value, Shares, beginning balance	$ 13.24
Weighted average grant-date fair value, Awards vested	$ 14.43
Weighted average grant-date fair value, Awards forfeited	$ 14.24
Weighted average grant-date fair value, Shares, ending balance	$ 13.33

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Schedule of Accumulated Other Comprehensive Loss (Detail) (USD $) In Millions, unless otherwise specified	May 03, 2013	Jan. 31, 2013
Accumulated Other Comprehensive Loss [Abstract]
Foreign currency translation adjustments, net of taxes of $(1) million as of May 3, 2013 and January 31, 2013	$ 2	$ 2
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of May 3, 2013 and January 31, 2013	(5)	(5)
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of May 3, 2013 and January 31, 2013	1	1
Total accumulated other comprehensive loss, net of taxes of $2 million as of May 3, 2013 and January 31, 2013	$ (2)	$ (2)

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Reconciliation of Income used in Calculating Earnings per Share (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Basic EPS:
Net income, as reported	$ 81	$ 117
Less: allocation of distributed and undistributed earnings to participating securities	(4)	(3)
Net income, for computing basic EPS	77	114
Diluted EPS:
Net income, as reported	81	117
Less: allocation of distributed and undistributed earnings to participating securities	(4)	(3)
Net income, for computing diluted EPS	$ 77	$ 114

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Schedule of Intangible Assets Including Estimates of Assets Acquired (Detail) (USD $) In Millions, unless otherwise specified	May 03, 2013	Jan. 31, 2013
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	$ 294	$ 304
Total intangible assets, Gross carrying value	311	321
Accumulated amortization	(138)	(131)
Net carrying value	156	173
Total intangible assets, Net carrying value	173	190
Indefinite-lived intangible assets	17	17
In-Process Research And Development
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	13	13
Trade Names
Finite-Lived Intangible Assets [Line Items]
Indefinite-lived intangible assets	4	4
Customer Relationships
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	170	175
Accumulated amortization	(80)	(73)
Net carrying value	90	102
Software and Technology
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	122	127
Accumulated amortization	(57)	(57)
Net carrying value	65	70
Other
Finite-Lived Intangible Assets [Line Items]
Gross carrying value	2	2
Accumulated amortization	(1)	(1)
Net carrying value	$ 1	$ 1

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Accumulated Other Comprehensive Loss (Tables)

3 Months Ended

May 03, 2013

Schedule of Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss were as follows:

	May 3, 2013			January 31, 2013
	(in millions)
Foreign currency translation adjustments, net of taxes of $(1) million as of May 3, 2013 and January 31, 2013	$	2		$	2
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of May 3, 2013 and January 31, 2013		(5	)		(5	)
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of May 3, 2013 and January 31, 2013		1			1
Total accumulated other comprehensive loss, net of taxes of $2 million as of May 3, 2013 and January 31, 2013	$	(2	)	$	(2	)

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Condensed Consolidated Statement of Stockholders' Equity (USD $) In Millions, except Share data	Total USD ($)	Shares of Common stock	Additional paid-in capital USD ($)	Retained earnings USD ($)	Accumulated other comprehensive loss USD ($)	Science Applications International Corporation USD ($)	Science Applications International Corporation Shares of Common stock USD ($)	Science Applications International Corporation Additional paid-in capital USD ($)	Science Applications International Corporation Retained earnings USD ($)	Science Applications International Corporation Accumulated other comprehensive loss USD ($)
Balance, value at Jan. 31, 2013	$ 2,618		$ 2,110	$ 510	$ (2)	$ 2,596		$ 233	$ 2,365	$ (2)
Balance, shares at Jan. 31, 2013		342,000,000					5,000
Net income	81			81		81			81
Issuances of stock, value	6		6
Other comprehensive income (loss), net of tax
Issuances of stock, shares		1,000,000
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock, value	(16)		(6)	(10)
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock , shares		(1,000,000)
Cash dividends of $0.12 per share	(42)			(42)
Special cash dividend of $1.00 per share	(357)			(357)
Adjustments for income tax benefits from stock-based compensation	(10)		(10)
Stock-based compensation	24		24
Balance, value at May. 03, 2013	$ 2,304		$ 2,124	$ 182	$ (2)	$ 2,677		$ 233	$ 2,446	$ (2)
Balance, shares at May. 03, 2013		342,000,000					5,000

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Condensed Consolidated Statements of Cash Flows (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Cash flows from operations:
Net income	$ 81	$ 117
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	30	27
Stock-based compensation	24	24
Impairment losses	4	0
Net gain on sales and disposals of assets	(7)	(1)
Other	(1)	1
Increase (decrease) in cash and cash equivalents, net of effects of acquisitions and divestitures, resulting from changes in:
Receivables	(174)	3
Inventory, prepaid expenses and other current assets	59	(16)
Deferred income taxes	(1)
Other assets	5
Accounts payable and accrued liabilities	(38)	(554)
Accrued payroll and employee benefits	(92)	9
Income taxes payable	(3)	28
Other long-term liabilities	2	1
Total cash flows used in operating activities of continuing operations	(111)	(361)
Cash flows from investing activities:
Expenditures for property, plant and equipment	(19)	(8)
Proceeds from sale of assets	25
Other	2	1
Total cash flows provided by (used in) investing activities of continuing operations	8	(7)
Cash flows from financing activities:
Payments on notes payable and long-term debt		(1)
Sales of stock	4	4
Repurchases of stock	(16)	(19)
Dividend payments	(41)	(41)
Total cash flows used in financing activities of continuing operations	(53)	(57)
Decrease in cash and cash equivalents from continuing operations	(156)	(425)
Cash flows from discontinued operations:
Cash used in operating activities of discontinued operations	(17)
Decrease in cash and cash equivalents from discontinued operations	(17)
Total decrease in cash and cash equivalents	(173)	(425)
Cash and cash equivalents at beginning of period	736	1,592
Cash and cash equivalents at end of period	563	1,167
Science Applications International Corporation
Cash flows from operations:
Net income	81	117
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	30	27
Stock-based compensation	24	24
Impairment losses	4
Net gain on sales and disposals of assets	(7)	(1)
Other	(1)	1
Increase (decrease) in cash and cash equivalents, net of effects of acquisitions and divestitures, resulting from changes in:
Receivables	(174)	3
Inventory, prepaid expenses and other current assets	59	(16)
Deferred income taxes	(1)
Other assets	5
Accounts payable and accrued liabilities	(38)	(553)
Accrued payroll and employee benefits	(92)	9
Income taxes payable	(3)	28
Other long-term liabilities	2	1
Total cash flows used in operating activities of continuing operations	(111)	(360)
Cash flows from investing activities:
Expenditures for property, plant and equipment	(19)	(8)
Proceeds from sale of assets	25
Other	2	1
Total cash flows provided by (used in) investing activities of continuing operations	8	(7)
Cash flows from financing activities:
Proceeds from note payable to SAIC, Inc.	4	26
Payments on note payable to SAIC, Inc.	(57)	(283)
Payments on notes payable and long-term debt		(1)
Total cash flows used in financing activities of continuing operations	(53)	(258)
Decrease in cash and cash equivalents from continuing operations	(156)	(625)
Cash flows from discontinued operations:
Cash used in operating activities of discontinued operations	(17)
Decrease in cash and cash equivalents from discontinued operations	(17)
Total decrease in cash and cash equivalents	(173)	(625)
Cash and cash equivalents at beginning of period	736	1,592
Cash and cash equivalents at end of period	$ 563	$ 967

XML

Stock-Based Compensation

3 Months Ended

May 03, 2013

Stock-Based Compensation

Note 3—Stock-Based Compensation:

Total Stock-Based Compensation. Total stock-based compensation expense for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Stock options	$	4	$	3
Vesting stock awards		19		20
Performance-based stock awards		1		1
Total stock-based compensation expense	$	24	$	24

Stock Options. Stock options granted during the three months ended May 3, 2013 and April 30, 2012 have terms of seven years and a vesting period of four years, except for stock options granted to the Company’s outside directors, which have a vesting period of one year.

The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average grant-date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
Weighted average grant-date fair value	$	1.82		$	1.81
Expected term (in years)		5.0			5.0
Expected volatility		25.0	%		24.4	%
Risk-free interest rate		0.8	%		1.0	%
Dividend yield		3.9	%		3.7	%

Stock option activity for the three months ended May 3, 2013 was as follows:

	Shares of stock under stock options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic value
	(in millions)					(in years)		(in millions)
Outstanding at January 31, 2013		19.6		$	16.81		3.0	$	—
Options granted		4.7			13.55
Options forfeited or expired		(4.7	)		18.37
Outstanding at May 3, 2013		19.6			15.66		4.3		14.00
Exercisable at May 3, 2013		8.5			17.28		2.4		2.00

Vesting Stock Awards. Vesting stock award activity for the three months ended May 3, 2013 was as follows:

	Shares of stock under stock awards			Weighted average grant- date fair value
	(in millions)
Unvested stock awards at January 31, 2013		12.4		$	15.20
Awards granted		7.1			13.52
Awards forfeited		(0.7	)		14.68
Awards vested		(3.3	)		16.13
Unvested stock awards at May 3, 2013		15.5			14.24

The fair value of vesting stock awards that vested during each of the three months ended May 3, 2013 and April 30, 2012 was $50 million and $60 million, respectively.

Performance-Based Stock Awards. The Company’s performance-based stock awards vest and the stock is issued at the end of a three-year period based upon the achievement of specific performance criteria, with the number of shares ultimately awarded, if any, ranging up to 150% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. Performance-based stock award activity for the three months ended May 3, 2013 was as follows:

	Expected number of shares of stock to be issued under performance- based stock awards			Weighted average grant- date fair value
	(in millions)
Outstanding at January 31, 2013		1.0		$	13.24
Awards vested		(0.4	)		14.43
Awards forfeited		(0.1	)		14.24
Outstanding at May 3, 2013		0.5			13.33

Adjustments to the expected number of shares of stock to be issued may occur due to changes in the expected level of achievement of the performance goals over the life of the awards.

Science Applications International Corporation

Stock-Based Compensation

Note 3—Stock-Based Compensation:

Total Stock-Based Compensation. Total stock-based compensation expense for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Stock options	$	4	$	3
Vesting stock awards		19		20
Performance-based stock awards		1		1
Total stock-based compensation expense	$	24	$	24

Stock Options. Stock options granted during the three months ended May 3, 2013 and April 30, 2012 have terms of seven years and a vesting period of four years, except for stock options granted to the Company’s outside directors, which have a vesting period of one year.

The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average grant-date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
Weighted average grant-date fair value	$	1.82		$	1.81
Expected term (in years)		5.0			5.0
Expected volatility		25.0	%		24.4	%
Risk-free interest rate		0.8	%		1.0	%
Dividend yield		3.9	%		3.7	%

Stock option activity for the three months ended May 3, 2013 was as follows:

	Shares of stock under stock options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic value
	(in millions)					(in years)		(in millions)
Outstanding at January 31, 2013		19.6		$	16.81		3.0	$	—
Options granted		4.7			13.55
Options forfeited or expired		(4.7	)		18.37
Outstanding at May 3, 2013		19.6			15.66		4.3		14.00
Exercisable at May 3, 2013		8.5			17.28		2.4		2.00

Vesting Stock Awards. Vesting stock award activity for the three months ended May 3, 2013 was as follows:

	Shares of stock under stock awards			Weighted average grant- date fair value
	(in millions)
Unvested stock awards at January 31, 2013		12.4		$	15.20
Awards granted		7.1			13.52
Awards forfeited		(0.7	)		14.68
Awards vested		(3.3	)		16.13
Unvested stock awards at May 3, 2013		15.5			14.24

The fair value of vesting stock awards that vested during each of the three months ended May 3, 2013 and April 30, 2012 was $50 million and $60 million, respectively.

Performance-Based Stock Awards. The Company’s performance-based stock awards vest and the stock is issued at the end of a three-year period based upon the achievement of specific performance criteria, with the number of shares ultimately awarded, if any, ranging up to 150% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. Performance-based stock award activity for the three months ended May 3, 2013 was as follows:

	Expected number of shares of stock to be issued under performance- based stock awards			Weighted average grant- date fair value
	(in millions)
Outstanding at January 31, 2013		1.0		$	13.24
Awards vested		(0.4	)		14.43
Awards forfeited		(0.1	)		14.24
Outstanding at May 3, 2013		0.5			13.33

Adjustments to the expected number of shares of stock to be issued may occur due to changes in the expected level of achievement of the performance goals over the life of the awards.

XML

Summary of Significant Accounting Policies

3 Months Ended

May 03, 2013

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies:

Nature of Operations and Basis of Presentation

SAIC, Inc. (SAIC) is a holding company whose direct 100%-owned subsidiary is Science Applications International Corporation (Science Applications), a provider of scientific, engineering, systems integration and technical services and solutions in the areas of defense, health, energy, infrastructure, intelligence, surveillance, reconnaissance and cybersecurity to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security, and other U.S. Government civil agencies, state and local government agencies, foreign governments and customers in select commercial markets.

The condensed consolidated financial statements of SAIC include the accounts of its majority-owned and 100%-owned subsidiaries, including Science Applications. The condensed consolidated financial statements of Science Applications include the accounts of its majority-owned and 100%-owned subsidiaries. SAIC does not have separate operations, assets or liabilities independent of Science Applications, except for a note with Science Applications (the “related party note”), on which interest is recognized. From time to time, SAIC issues stock to employees of Science Applications and its subsidiaries, which is reflected in SAIC’s Condensed Consolidated Statement of Stockholders’ Equity and results in an increase to the related party note (see Note 6). All intercompany transactions and accounts have been eliminated in consolidation.

These Combined Notes to Condensed Consolidated Financial Statements apply to both SAIC and Science Applications. As SAIC consolidates Science Applications for financial statement purposes, disclosures that relate to activities of Science Applications also apply to SAIC. References to the “Company” refer collectively to SAIC, Science Applications, and its consolidated subsidiaries unless otherwise noted.

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and combined notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The preparation of 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. 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.

In the opinion of management, the financial information as of May 3, 2013 and for the three months ended May 3, 2013 and April 30, 2012 reflects all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. Operating results for the three months ended May 3, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2014, or any future period.

Reporting Periods

Unless otherwise noted, references to fiscal years are to fiscal years ended January 31, for fiscal 2013 and earlier periods, or fiscal years ended the Friday closest to January 31, for fiscal 2014 or later periods. For fiscal 2013, the Company’s fiscal quarters ended on the last calendar day of each of April, July and October. Effective in fiscal 2014, the Company changed its fiscal year to a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2014 began on February 1, 2013 and ends on January 31, 2014. The first quarter of fiscal 2014 ended on May 3, 2013. The Company does not believe that the change in its fiscal year has a material effect on the comparability of the periods presented.

Planned Separation Transaction

In August 2012, the Company announced that its board of directors authorized management to pursue a plan to separate into two independent, publicly traded companies. The proposed separation transaction is intended to take the form of a tax-free spin-off to SAIC stockholders of 100% of the shares of a newly formed company focused on technical, engineering and enterprise information technology (IT) services to the U.S. Government, as well as other public agencies. The separation is expected to occur in the latter half of calendar year 2013, subject to final approval of the board of directors and certain customary conditions, including receipt of an opinion from tax counsel and a ruling from the Internal Revenue Service (IRS) as to the tax-free nature of the transaction. Although the Company expects that the separation of its businesses will be consummated, there can be no assurance that a separation will ultimately occur. Upon completion of the separation transaction, the operating results of the separated business will be included in discontinued operations.

The separation transaction expenses for the three months ended May 3, 2013 were as follows:

	Three Months Ended May 3, 2013
	(in millions)
Strategic advisory services	$	8
Legal and accounting services		6
Lease termination and facility consolidation expenses		14
Severance costs		5
Separation transaction expenses in operating income		33
Less: income tax benefit		(13	)
Separation transaction expenses, net of tax	$	20

In connection with the separation transaction, in the first quarter of fiscal 2014, the Company reduced headcount, which resulted in severance costs as reflected in the table above. Also, in connection with the separation transaction, the Company took actions during the first quarter of fiscal 2014 to reduce its real estate footprint by vacating facilities that are not necessary for its future requirements, which resulted in lease termination and facility consolidation expenses as reflected in the table above.

Consistent with the Company’s policy for acquisitions, the Company has recognized a tax benefit for the separation transaction expenses. Certain of the separation transaction expenses will be capitalized for tax purposes if the separation transaction is completed, resulting in a reversal of tax benefits previously recognized.

There were no separation transaction expenses for the three months ended April 30, 2012.

Receivables

The Company’s accounts receivable include unbilled receivables, which consist of costs and fees billable upon contract completion or the occurrence of a specified event, substantially all of which is expected to be billed and collected within one year. Unbilled receivables are stated at estimated realizable value. Since the Company’s receivables are primarily with the U.S. Government, the Company does not have a material credit risk exposure. Contract retentions are billed when the Company has negotiated final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Consequently, the timing of collection of retention balances is outside the Company’s control. Based on the Company’s historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant.

The Company has extended deferred payment terms with contractual maturities that may exceed one year to commercial customers related to certain construction projects. As of May 3, 2013, the Company had outstanding receivables from these customers with deferred payment terms of $152 million, which are expected to be collected in fiscal 2014 and fiscal 2015, when the customers have obtained financing.

When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded.

Changes in Estimates on Contracts

Changes in estimates related to certain types of contracts accounted for using the percentage of completion method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the contract performance period for a variety of reasons, including changes in contract scope, changes in contract cost estimates due to unanticipated cost growth or retirements of risk for amounts different than estimated, and changes in estimated incentive or award fees. Aggregate changes in contract estimates resulted in a decrease to operating income of $4 million ($0.01 per diluted share) for the three months ended May 3, 2013 and an increase to operating income of $4 million ($0.01 per diluted share) for the three months ended April 30, 2012.

Discontinued Operations

From time-to-time, the Company may dispose (or management may commit to plans to dispose) of non-strategic components of the business, which are reclassified as discontinued operations for all periods presented.

In fiscal 2013, the Company sold certain components of its business, which were historically included in the Company’s Health and Engineering segment, primarily focused on providing operational test and evaluation services to U.S. Government customers.

The pre-sale operating results of this discontinued operation were as follows:

	Three Months Ended April 30, 2012
	(in millions)
Revenues	$	18
Costs and expenses:
Cost of revenues		15
Selling, general and administrative expenses		3
Operating income	$	—

Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above.

Supplementary Cash Flow Information

Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Vested stock issued as settlement of annual bonus accruals	$	2	$	2
Stock issued in lieu of cash dividend	$	1	$	1
Cash paid for interest	$	—	$	—
Cash paid for income taxes	$	2	$	8
Dividends payable for declared special cash dividend	$	357	$	—

Special Cash Dividend

In March 2013, SAIC’s board of directors declared a special cash dividend of $1.00 per share of SAIC common stock payable on June 28, 2013 to stockholders of record on June 14, 2013.

Sale and Leaseback Agreement

On May 3, 2013, the Company entered into a purchase and sale agreement relating to the sale of approximately 18 acres of land in Fairfax County, Virginia, including four office buildings, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as tangible personal property and third-party leases. This sale is expected to be completed in a series of transactions over approximately six years. Under the agreement, the Company will lease back from the buyer space in three of the office buildings over varying lease terms. The closing of the initial transaction is expected to occur in the second quarter of fiscal 2014.

Accounting Standards Updates Issued But Not Yet Adopted

Accounting standards and updates issued but not effective for the Company until after May 3, 2013 are not expected to have a material effect on the Company’s consolidated financial position or results of operations.

Science Applications International Corporation

Summary of Significant Accounting Policies

Note 1—Summary of Significant Accounting Policies:

Nature of Operations and Basis of Presentation

SAIC, Inc. (SAIC) is a holding company whose direct 100%-owned subsidiary is Science Applications International Corporation (Science Applications), a provider of scientific, engineering, systems integration and technical services and solutions in the areas of defense, health, energy, infrastructure, intelligence, surveillance, reconnaissance and cybersecurity to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security, and other U.S. Government civil agencies, state and local government agencies, foreign governments and customers in select commercial markets.

The condensed consolidated financial statements of SAIC include the accounts of its majority-owned and 100%-owned subsidiaries, including Science Applications. The condensed consolidated financial statements of Science Applications include the accounts of its majority-owned and 100%-owned subsidiaries. SAIC does not have separate operations, assets or liabilities independent of Science Applications, except for a note with Science Applications (the “related party note”), on which interest is recognized. From time to time, SAIC issues stock to employees of Science Applications and its subsidiaries, which is reflected in SAIC’s Condensed Consolidated Statement of Stockholders’ Equity and results in an increase to the related party note (see Note 6). All intercompany transactions and accounts have been eliminated in consolidation.

These Combined Notes to Condensed Consolidated Financial Statements apply to both SAIC and Science Applications. As SAIC consolidates Science Applications for financial statement purposes, disclosures that relate to activities of Science Applications also apply to SAIC. References to the “Company” refer collectively to SAIC, Science Applications, and its consolidated subsidiaries unless otherwise noted.

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and combined notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The preparation of 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. 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.

In the opinion of management, the financial information as of May 3, 2013 and for the three months ended May 3, 2013 and April 30, 2012 reflects all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. Operating results for the three months ended May 3, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2014, or any future period.

Reporting Periods

Unless otherwise noted, references to fiscal years are to fiscal years ended January 31, for fiscal 2013 and earlier periods, or fiscal years ended the Friday closest to January 31, for fiscal 2014 or later periods. For fiscal 2013, the Company’s fiscal quarters ended on the last calendar day of each of April, July and October. Effective in fiscal 2014, the Company changed its fiscal year to a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2014 began on February 1, 2013 and ends on January 31, 2014. The first quarter of fiscal 2014 ended on May 3, 2013. The Company does not believe that the change in its fiscal year has a material effect on the comparability of the periods presented.

Planned Separation Transaction

In August 2012, the Company announced that its board of directors authorized management to pursue a plan to separate into two independent, publicly traded companies. The proposed separation transaction is intended to take the form of a tax-free spin-off to SAIC stockholders of 100% of the shares of a newly formed company focused on technical, engineering and enterprise information technology (IT) services to the U.S. Government, as well as other public agencies. The separation is expected to occur in the latter half of calendar year 2013, subject to final approval of the board of directors and certain customary conditions, including receipt of an opinion from tax counsel and a ruling from the Internal Revenue Service (IRS) as to the tax-free nature of the transaction. Although the Company expects that the separation of its businesses will be consummated, there can be no assurance that a separation will ultimately occur. Upon completion of the separation transaction, the operating results of the separated business will be included in discontinued operations.

The separation transaction expenses for the three months ended May 3, 2013 were as follows:

	Three Months Ended May 3, 2013
	(in millions)
Strategic advisory services	$	8
Legal and accounting services		6
Lease termination and facility consolidation expenses		14
Severance costs		5
Separation transaction expenses in operating income		33
Less: income tax benefit		(13	)
Separation transaction expenses, net of tax	$	20

In connection with the separation transaction, in the first quarter of fiscal 2014, the Company reduced headcount, which resulted in severance costs as reflected in the table above. Also, in connection with the separation transaction, the Company took actions during the first quarter of fiscal 2014 to reduce its real estate footprint by vacating facilities that are not necessary for its future requirements, which resulted in lease termination and facility consolidation expenses as reflected in the table above.

Consistent with the Company’s policy for acquisitions, the Company has recognized a tax benefit for the separation transaction expenses. Certain of the separation transaction expenses will be capitalized for tax purposes if the separation transaction is completed, resulting in a reversal of tax benefits previously recognized.

There were no separation transaction expenses for the three months ended April 30, 2012.

Receivables

The Company’s accounts receivable include unbilled receivables, which consist of costs and fees billable upon contract completion or the occurrence of a specified event, substantially all of which is expected to be billed and collected within one year. Unbilled receivables are stated at estimated realizable value. Since the Company’s receivables are primarily with the U.S. Government, the Company does not have a material credit risk exposure. Contract retentions are billed when the Company has negotiated final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Consequently, the timing of collection of retention balances is outside the Company’s control. Based on the Company’s historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant.

The Company has extended deferred payment terms with contractual maturities that may exceed one year to commercial customers related to certain construction projects. As of May 3, 2013, the Company had outstanding receivables from these customers with deferred payment terms of $152 million, which are expected to be collected in fiscal 2014 and fiscal 2015, when the customers have obtained financing.

When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded.

Changes in Estimates on Contracts

Changes in estimates related to certain types of contracts accounted for using the percentage of completion method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the contract performance period for a variety of reasons, including changes in contract scope, changes in contract cost estimates due to unanticipated cost growth or retirements of risk for amounts different than estimated, and changes in estimated incentive or award fees. Aggregate changes in contract estimates resulted in a decrease to operating income of $4 million ($0.01 per diluted share) for the three months ended May 3, 2013 and an increase to operating income of $4 million ($0.01 per diluted share) for the three months ended April 30, 2012.

Discontinued Operations

From time-to-time, the Company may dispose (or management may commit to plans to dispose) of non-strategic components of the business, which are reclassified as discontinued operations for all periods presented.

In fiscal 2013, the Company sold certain components of its business, which were historically included in the Company’s Health and Engineering segment, primarily focused on providing operational test and evaluation services to U.S. Government customers.

The pre-sale operating results of this discontinued operation were as follows:

	Three Months Ended April 30, 2012
	(in millions)
Revenues	$	18
Costs and expenses:
Cost of revenues		15
Selling, general and administrative expenses		3
Operating income	$	—

Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above.

Supplementary Cash Flow Information

Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Vested stock issued as settlement of annual bonus accruals	$	2	$	2
Stock issued in lieu of cash dividend	$	1	$	1
Cash paid for interest	$	—	$	—
Cash paid for income taxes	$	2	$	8
Dividends payable for declared special cash dividend	$	357	$	—

Special Cash Dividend

In March 2013, SAIC’s board of directors declared a special cash dividend of $1.00 per share of SAIC common stock payable on June 28, 2013 to stockholders of record on June 14, 2013.

Sale and Leaseback Agreement

On May 3, 2013, the Company entered into a purchase and sale agreement relating to the sale of approximately 18 acres of land in Fairfax County, Virginia, including four office buildings, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as tangible personal property and third-party leases. This sale is expected to be completed in a series of transactions over approximately six years. Under the agreement, the Company will lease back from the buyer space in three of the office buildings over varying lease terms. The closing of the initial transaction is expected to occur in the second quarter of fiscal 2014.

Accounting Standards Updates Issued But Not Yet Adopted

Accounting standards and updates issued but not effective for the Company until after May 3, 2013 are not expected to have a material effect on the Company’s consolidated financial position or results of operations.

XML

Goodwill and Intangible Assets - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended
	Jan. 31, 2013 Segment	May 03, 2013 Segment	Apr. 30, 2012
Goodwill and Intangible Assets [Line Items]
Number of reportable segment	3	3
Amortization expense related to amortizable intangible assets		$ 13	$ 10
Impairment loss for intangible assets		$ 4	$ 0
maxIT Healthcare Holdings, Inc.
Goodwill and Intangible Assets [Line Items]
Ownership Percentage		100.00%

XML

Separation Transaction Expenses (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013
Spin Off Transaction [Line Items]
Strategic advisory services	$ 8
Legal and accounting services	6
Lease termination and facility consolidation expenses	14
Severance costs	5
Separation transaction expenses in operating income	33
Less: income tax benefit	(13)
Separation transaction expenses, net of tax	$ 20

XML

Reconciliation of Weighted Average Number of Shares Outstanding (Detail) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Earnings Per Share [Abstract]
Basic weighted average number of shares outstanding	336	330
Dilutive common share equivalents-stock options and other stock awards
Diluted weighted average number of shares outstanding	336	330

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Schedule of Weighted Average Grant-Date Fair Value and Assumptions Used (Detail) (USD $)	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Stock-Based Compensation [Abstract]
Weighted average grant-date fair value	$ 1.82	$ 1.81
Expected term (in years)	5 years	5 years
Expected volatility	25.00%	24.40%
Risk-free interest rate	0.80%	1.00%
Dividend yield	3.90%	3.70%

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Other Commitments and Contingencies - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	1 Months Ended	3 Months Ended		12 Months Ended		3 Months Ended		3 Months Ended				1 Months Ended
	Nov. 30, 2012	May 03, 2013	Apr. 30, 2012	Jan. 31, 2012	Jan. 31, 2013	May 03, 2013 Government Investigations And Reviews	May 03, 2013 Tax Audits And Reviews	May 03, 2013 Contract	Oct. 31, 2014 Subsequent Event Tax Audits And Reviews	May 03, 2013 Standby Letters of Credit	May 03, 2013 Performance Guarantee	Nov. 30, 2012 Virnet X Inc
Other Commitments And Contingencies [Line Items]
Number of patents infringed												2
Patents transferred and awarded												$ 368
Percentage of proceeds obtained	25.00%
Aggregate loss provisions						18
Liability for estimate of loss						35
Project financing from the company's provision of extended payment terms				133
Total project billings				220
Receivable due from VIE		93
Other long-term liabilities		172			168		25
Liabilities for uncertain tax positions							21
Unrecognized tax benefits							12
Uncertain tax positions on previously accrued interest							2
Reduction in income tax expense									9
Amount outstanding										100
Surety bonds											263
Revenues		$ 2,707	$ 2,764					$ 481

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Schedule of Accumulated Other Comprehensive Loss (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	May 03, 2013	Jan. 31, 2013
Accumulated Other Comprehensive Income (Loss) [Line Items]
Foreign currency translation adjustments, tax effect	$ (1)	$ (1)
Unrecognized net loss on settled derivative instruments associated with outstanding debt, tax effect	3	3
Unrecognized net loss on defined benefit plan, taxes	0	0
Total accumulated other comprehensive loss, tax effect	$ 2	$ 2

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Financial Instruments - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013 Y	Jan. 31, 2013
Financial Instruments [Line Items]
Unsecured borrowing capacity	$ 750
Extended maturity period of revolving credit facility (in years)	1
Extended maturity date of revolving credit facility	March 2017
Borrowings outstanding under the revolving credit facility	$ 0	$ 0
Revolving credit facility financial covenants description	For a period of four trailing fiscal quarters, the Company maintains a ratio of consolidated funded debt, including borrowings under this facility, to EBITDA adjusted for other items as defined in the credit facility of not more than 3.25 to 1.0 and a ratio of EBITDA adjusted for other items as defined in the credit facility to interest expense of greater than 3.5 to 1.0.
Ratio of consolidated funded debt to EBITDA, numerator, maximum	3.25
Ratio of consolidated funded debt to EBITDA, denominator, maximum	1.0
Minimum ratio of EBITDA to interest expense, numerator	3.5
Minimum ratio of EBITDA to interest expense, denominator	1.0

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Condensed Consolidated Statements of Comprehensive Income (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Net income	$ 81	$ 117
Other comprehensive income, net of tax:
Foreign currency translation adjustments		(1)
Deferred taxes		1
Foreign currency translation adjustments, net of tax
Pension liability adjustments		16
Deferred taxes		(6)
Pension liability adjustments, net of tax		10
Total other comprehensive income, net of tax		10
Comprehensive income	81	127
Science Applications International Corporation
Net income	81	117
Other comprehensive income, net of tax:
Foreign currency translation adjustments		(1)
Deferred taxes		1
Foreign currency translation adjustments, net of tax
Pension liability adjustments		16
Deferred taxes		(6)
Pension liability adjustments, net of tax		10
Total other comprehensive income, net of tax		10
Comprehensive income	$ 81	$ 127

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Related Party Transactions

3 Months Ended

May 03, 2013

Related Party Transactions

Note 6—Related Party Transactions:

Science Applications has fully and unconditionally guaranteed the obligations of SAIC under its $450 million 4.45% notes and $300 million 5.95% notes. These notes have been reflected as debt of Science Applications in these condensed consolidated financial statements. Science Applications has fully and unconditionally guaranteed any borrowings under SAIC’s amended and restated revolving credit facility maturing in fiscal 2018. SAIC has fully and unconditionally guaranteed the obligations of Science Applications under its $300 million 5.5% notes and $250 million 7.13% notes.

SAIC and Science Applications have a related party note in connection with a loan of cash between the entities, which is adjusted to reflect issuances of stock by SAIC to employees of Science Applications and its subsidiaries and Science Applications’ payment of certain obligations on behalf of SAIC. The related party note bears interest based on LIBOR plus a market-based premium. Portions of the related party note may be repaid at any time prior to its maturity date in November 2013. This maturity date will be automatically extended for successive one-year periods unless either SAIC or Science Applications provides prior notice to the other party.

Science Applications International Corporation

Related Party Transactions

Note 6—Related Party Transactions:

Science Applications has fully and unconditionally guaranteed the obligations of SAIC under its $450 million 4.45% notes and $300 million 5.95% notes. These notes have been reflected as debt of Science Applications in these condensed consolidated financial statements. Science Applications has fully and unconditionally guaranteed any borrowings under SAIC’s amended and restated revolving credit facility maturing in fiscal 2018. SAIC has fully and unconditionally guaranteed the obligations of Science Applications under its $300 million 5.5% notes and $250 million 7.13% notes.

SAIC and Science Applications have a related party note in connection with a loan of cash between the entities, which is adjusted to reflect issuances of stock by SAIC to employees of Science Applications and its subsidiaries and Science Applications’ payment of certain obligations on behalf of SAIC. The related party note bears interest based on LIBOR plus a market-based premium. Portions of the related party note may be repaid at any time prior to its maturity date in November 2013. This maturity date will be automatically extended for successive one-year periods unless either SAIC or Science Applications provides prior notice to the other party.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $) In Millions, except Share data, unless otherwise specified	May 03, 2013	Jan. 31, 2013
Property, plant and equipment, accumulated depreciation and amortization	$ 455	$ 442
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	2,000,000,000	2,000,000,000
Common stock, shares issued	342,000,000	342,000,000
Common stock, shares outstanding	342,000,000	342,000,000
Science Applications International Corporation
Property, plant and equipment, accumulated depreciation and amortization	$ 455	$ 442
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	10,000	10,000
Common stock, shares issued	5,000	5,000
Common stock, shares outstanding	5,000	5,000

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Condensed Consolidated Statements of Income (USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Revenues	$ 2,707	$ 2,764
Costs and expenses:
Cost of revenues	2,378	2,433
Selling, general and administrative expenses	154	123
Separation transaction expenses	33
Operating income	142	208
Non-operating income (expense):
Interest income	4	2
Interest expense	(20)	(29)
Other income, net	1	2
Income before income taxes	127	183
Provision for income taxes	(46)	(66)
Net income	81	117
Earnings per share (Note 2):
Basic earnings per share	$ 0.23	$ 0.35
Diluted earnings per share	$ 0.23	$ 0.35
Cash dividends declared per share	$ 1.12	$ 0.12
Science Applications International Corporation
Revenues	2,707	2,764
Costs and expenses:
Cost of revenues	2,378	2,433
Selling, general and administrative expenses	154	123
Separation transaction expenses	33
Operating income	142	208
Non-operating income (expense):
Interest income	4	2
Interest expense	(20)	(29)
Other income, net	1	2
Income before income taxes	127	183
Provision for income taxes	(46)	(66)
Net income	$ 81	$ 117

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Accumulated Other Comprehensive Loss - Additional Information (Detail) (Maximum, USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013
Maximum
Accumulated Other Comprehensive Income (Loss) [Line Items]
Unrealized net loss on settled derivatives which will be amortized and recognized	$ 1

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Schedule of Pre-Sale Operating Results of Discontinued Operations (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	Apr. 30, 2012
Discontinued Operation
Revenues	$ 18
Cost of revenues	15
Selling, general and administrative expenses	3
Operating income

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Goodwill and Intangible Assets (Tables)

3 Months Ended

May 03, 2013

Schedule of Changes in Goodwill by Segment

The carrying value of goodwill by segment was as follows:

	HE			NSS		TSIT		Total
	(in millions)
Goodwill at January 31, 2013	$	1,144		$	641	$	410	$	2,195
Corporate reorganizations		(228	)		147		81		—
Goodwill at May 3, 2013	$	916		$	788	$	491	$	2,195

Schedule of Intangible Assets Including Estimates of Assets Acquired

Intangible assets consisted of the following:

	May 3, 2013							January 31, 2013
	Gross carrying value		Accumulated amortization			Net carrying value		Gross carrying value		Accumulated amortization			Net carrying value
	(in millions)
Finite-lived intangible assets:
Customer relationships	$	170	$	(80	)	$	90	$	175	$	(73	)	$	102
Software and technology		122		(57	)		65		127		(57	)		70
Other		2		(1	)		1		2		(1	)		1
Total finite-lived intangible assets		294		(138	)		156		304		(131	)		173
Indefinite-lived intangible assets:
In-process research and development		13		—			13		13		—			13
Trade names		4		—			4		4		—			4
Total indefinite-lived intangible assets		17		—			17		17		—			17
Total intangible assets	$	311	$	(138	)	$	173	$	321	$	(131	)	$	190

Schedule of Amortization Expense for Finite-Lived Intangible Assets

The estimated annual amortization expense related to finite-lived intangible assets as of May 3, 2013 was as follows:

Fiscal Year Ending January 31
	(in millions)
2014 (remainder of the fiscal year)	$	31
2015		33
2016		31
2017		27
2018		18
2019 and thereafter		16
	$	156

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Schedule of Amortization Expense for Finite-Lived Intangible Assets (Detail) (USD $) In Millions, unless otherwise specified	May 03, 2013	Jan. 31, 2013
Goodwill And Intangible Assets [Abstract]
2014 (remainder of the fiscal year)	$ 31
2015	33
2016	31
2017	27
2018	18
2019 and thereafter	16
Net carrying value	$ 156	$ 173

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Legal Proceedings - Additional Information (Detail) (USD $)	3 Months Ended		3 Months Ended		3 Months Ended											1 Months Ended
	May 03, 2013 LegalMatter Y Item	Jan. 31, 2013	May 03, 2013 Timekeeping Contract with City of New York	May 03, 2013 Data Privacy Litigation	Apr. 30, 2012 Securities Class Actions LegalMatter	Apr. 30, 2012 Stockholder Derivative Cases LegalMatter	May 03, 2013 Greek Government Contract	Apr. 30, 2012 Greek Government Contract	Jun. 30, 2009 Greek Government Contract	Nov. 30, 2008 Greek Government Contract Invoice for Undisputed Portion of Contract	May 03, 2013 Greek Government Contract Value Added Taxes	May 03, 2013 Greek Government Contract Letters of Credit Relating to Delivery	May 03, 2013 Greek Government Contract Standby Letters of Credit	May 03, 2013 Greek Government Contract Letters of Credit Related System Support and Maintenance Letters of Credit Relating to Delivery	Jun. 30, 2009 Greek Government Contract Performance Guarantee	Dec. 31, 2010 Nuclear Regulatory Commission Breach of Contract	Jul. 31, 2008 Nuclear Regulatory Commission Breach of Contract	Oct. 31, 2008 Nuclear Regulatory Commission False Claims Act Claims	Jul. 31, 2008 Nuclear Regulatory Commission False Claims Act Claims
Legal Proceedings [Line Items]
Cash settlement payment			$ 500,000,000
DPA provides that the monitor will serve for a period (in years)	3
Number of patients (in millions)	5,000,000
Number of lawsuits	7				3	6
Period of identity restoration services	1
Damages sought	1,000
Judgments or settlements relating to the claims				10,000,000
Estimated loss, minimum				10,000,000
Number of lawsuits, withdrawn					1	2
Number of lawsuits, consolidated					2	4
Contracts receivable										18,000,000	33,000,000
Damages sought by SAIC									91,000,000						25,000,000
Profit or loss recorded on contract							0	0
Recorded losses							123,000,000
Receivables relating to value added taxes											15,000,000
Amount outstanding	0	0												3,000,000
Letter of credit available to the company												19,000,000	21,000,000
Loss related to litigation settlement																78	78
Judgment rescinded on appeal																		$ 585,000	$ 2,000,000

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Schedule of Vesting Stock Award Activity (Detail) (Vesting Stock Awards, USD $) In Millions, except Per Share data, unless otherwise specified	3 Months Ended
	May 03, 2013
Vesting Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares, beginning balance	12.4
Shares of stock under stock awards, Awards granted	7.1
Shares of stock under stock awards, Awards forfeited	(0.7)
Shares of stock under stock awards, Awards vested	(3.3)
Shares, ending balance	15.5
Weighted average grant-date fair value, Shares, beginning balance	$ 15.20
Weighted average grant-date fair value, Awards granted	$ 13.52
Weighted average grant-date fair value, Awards forfeited	$ 14.68
Weighted average grant-date fair value, Awards vested	$ 16.13
Weighted average grant-date fair value, Shares, ending balance	$ 14.24

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Schedule of Stock-Based Compensation and Related Tax Benefits Recognized (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense recorded in continuing operations	$ 24	$ 24
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense recorded in continuing operations	4	3
Performance-Based Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense recorded in continuing operations	1	1
Vesting Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total stock-based compensation expense recorded in continuing operations	$ 19	$ 20

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Stock-Based Compensation - Additional Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term	5 years	5 years
Vesting period	3 years
Fair value of vesting awards that vested	$ 50	$ 60
Maximum percentage that will ultimately be awarded	150.00%
Stock Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Expected term	7 years	7 years
Vesting period	4 years	4 years
Outside Directors
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	1 year	1 year

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Financial Instruments

3 Months Ended

May 03, 2013

Financial Instruments

Note 5—Financial Instruments:

The Company’s cash equivalents were primarily comprised of investments in several large institutional money market funds that invest primarily in bills, notes and bonds issued by the U.S. Treasury, U.S. Government guaranteed repurchase agreements fully collateralized by U.S. Treasury obligations, U.S. Government guaranteed securities and investment-grade corporate securities that have original maturities of three months or less. There are no restrictions on the withdrawal of the Company’s cash and cash equivalents. The Company’s cash equivalents are recorded at historical cost, which equals fair value based on quoted market prices (Level 1 input as defined by the accounting standard for fair value measurements).

SAIC has a revolving credit facility, which is fully and unconditionally guaranteed by Science Applications, providing for up to $750 million in unsecured borrowing capacity at interest rates determined, at SAIC’s option, based on either LIBOR plus a margin or a defined base rate. During the three months ended May 3, 2013, the maturity date of the credit facility was extended for one additional year to March 2017, as provided for in the terms of the credit facility. As of May 3, 2013 and January 31, 2013, there were no borrowings outstanding under the credit facility.

The credit facility contains certain customary representations and warranties, as well as certain affirmative and negative covenants. During the three months ended May 3, 2013, the financial covenants in the credit facility were amended to: (i) permit in the calculation of earnings before interest, taxes, depreciation and amortization (EBITDA) the adding back of certain expenses incurred in connection with the Company’s planned separation transaction; (ii) exclude the effect of debt incurred in connection with the separation transaction for purposes of calculating consolidated funded debt; and (iii) change the ratio of consolidated funded debt to EBITDA that the Company is required to maintain. The financial covenants contained in the credit facility require that, for a period of four trailing fiscal quarters, the Company maintains a ratio of consolidated funded debt, including borrowings under this facility, to EBITDA adjusted for other items as defined in the credit facility of not more than 3.25 to 1.0 and a ratio of EBITDA adjusted for other items as defined in the credit facility to interest expense of greater than 3.5 to 1.0. The Company was in compliance with these financial covenants as of May 3, 2013. A failure by the Company to meet these financial covenants in the future would reduce and could eliminate the Company’s borrowing capacity under the credit facility.

Other covenants in the credit facility restrict certain of the Company’s activities, including among other things, its ability to create liens, dispose of certain assets and merge or consolidate with other entities. The credit facility also contains certain customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events, nonpayment, cross-defaults to other debt, breach of specified covenants, Employee Retirement Income Security Act (ERISA) events, material monetary judgments, change of control events and the material inaccuracy of the Company’s representations and warranties.

The Company’s notes payable and long-term debt consisted of the following:

	Stated interest rate			Effective interest rate			May 3, 2013		January 31, 2013
	(dollars in millions)
SAIC senior unsecured notes:
$450 million notes, which mature in December 2020		4.45	%		4.53	%	$	449	$	449
$300 million notes, which mature in December 2040		5.95	%		6.03	%		300		300
Science Applications senior unsecured notes:
$250 million notes, which mature in July 2032		7.13	%		7.43	%		248		248
$300 million notes, which mature in July 2033		5.50	%		5.78	%		296		297
Capital leases and other notes payable due on various dates through fiscal 2017		0%-2.4	%		Various			5		4
Total notes payable and long-term debt								1,298		1,298
Less current portion								1		2
Total notes payable and long-term debt, net of current portion							$	1,297	$	1,296
Fair value of notes payable and long-term debt							$	1,432	$	1,390

The fair value of long-term debt is determined based on current interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements (Level 2 and 3 inputs as defined by the accounting standard for fair value measurements).

The senior unsecured notes contain customary restrictive covenants, including, among other things, restrictions on the Company’s ability to create liens and enter into sale and leaseback transactions under certain circumstances. The Company was in compliance with all covenants as of May 3, 2013.

Science Applications International Corporation

Financial Instruments

Note 5—Financial Instruments:

The Company’s cash equivalents were primarily comprised of investments in several large institutional money market funds that invest primarily in bills, notes and bonds issued by the U.S. Treasury, U.S. Government guaranteed repurchase agreements fully collateralized by U.S. Treasury obligations, U.S. Government guaranteed securities and investment-grade corporate securities that have original maturities of three months or less. There are no restrictions on the withdrawal of the Company’s cash and cash equivalents. The Company’s cash equivalents are recorded at historical cost, which equals fair value based on quoted market prices (Level 1 input as defined by the accounting standard for fair value measurements).

SAIC has a revolving credit facility, which is fully and unconditionally guaranteed by Science Applications, providing for up to $750 million in unsecured borrowing capacity at interest rates determined, at SAIC’s option, based on either LIBOR plus a margin or a defined base rate. During the three months ended May 3, 2013, the maturity date of the credit facility was extended for one additional year to March 2017, as provided for in the terms of the credit facility. As of May 3, 2013 and January 31, 2013, there were no borrowings outstanding under the credit facility.

The credit facility contains certain customary representations and warranties, as well as certain affirmative and negative covenants. During the three months ended May 3, 2013, the financial covenants in the credit facility were amended to: (i) permit in the calculation of earnings before interest, taxes, depreciation and amortization (EBITDA) the adding back of certain expenses incurred in connection with the Company’s planned separation transaction; (ii) exclude the effect of debt incurred in connection with the separation transaction for purposes of calculating consolidated funded debt; and (iii) change the ratio of consolidated funded debt to EBITDA that the Company is required to maintain. The financial covenants contained in the credit facility require that, for a period of four trailing fiscal quarters, the Company maintains a ratio of consolidated funded debt, including borrowings under this facility, to EBITDA adjusted for other items as defined in the credit facility of not more than 3.25 to 1.0 and a ratio of EBITDA adjusted for other items as defined in the credit facility to interest expense of greater than 3.5 to 1.0. The Company was in compliance with these financial covenants as of May 3, 2013. A failure by the Company to meet these financial covenants in the future would reduce and could eliminate the Company’s borrowing capacity under the credit facility.

Other covenants in the credit facility restrict certain of the Company’s activities, including among other things, its ability to create liens, dispose of certain assets and merge or consolidate with other entities. The credit facility also contains certain customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events, nonpayment, cross-defaults to other debt, breach of specified covenants, Employee Retirement Income Security Act (ERISA) events, material monetary judgments, change of control events and the material inaccuracy of the Company’s representations and warranties.

The Company’s notes payable and long-term debt consisted of the following:

	Stated interest rate			Effective interest rate			May 3, 2013		January 31, 2013
	(dollars in millions)
SAIC senior unsecured notes:
$450 million notes, which mature in December 2020		4.45	%		4.53	%	$	449	$	449
$300 million notes, which mature in December 2040		5.95	%		6.03	%		300		300
Science Applications senior unsecured notes:
$250 million notes, which mature in July 2032		7.13	%		7.43	%		248		248
$300 million notes, which mature in July 2033		5.50	%		5.78	%		296		297
Capital leases and other notes payable due on various dates through fiscal 2017		0%-2.4	%		Various			5		4
Total notes payable and long-term debt								1,298		1,298
Less current portion								1		2
Total notes payable and long-term debt, net of current portion							$	1,297	$	1,296
Fair value of notes payable and long-term debt							$	1,432	$	1,390

The fair value of long-term debt is determined based on current interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements (Level 2 and 3 inputs as defined by the accounting standard for fair value measurements).

The senior unsecured notes contain customary restrictive covenants, including, among other things, restrictions on the Company’s ability to create liens and enter into sale and leaseback transactions under certain circumstances. The Company was in compliance with all covenants as of May 3, 2013.

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Schedule of Supplementary Cash Flow Information (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013	Apr. 30, 2012
Supplemental Financial Information [Line Items]
Vested stock issued as settlement of annual bonus accruals	$ 2	$ 2
Stock issued in lieu of cash dividend	1	1
Cash paid for interest
Cash paid for income taxes	2	8
Dividends payable for declared special cash dividend	$ 357

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Schedule of Carrying Value of Goodwill by Segment (Detail) (USD $) In Millions, unless otherwise specified			3 Months Ended
	May 03, 2013	Jan. 31, 2013	May 03, 2013 Health, Energy And Civil Solutions	May 03, 2013 Intelligence and Cybersecurity Solutions	May 03, 2013 Technical Services and Information Technology
Goodwill [Line Items]
Beginning balance, Goodwill	$ 2,195	$ 2,195	$ 1,144	$ 641	$ 410
Corporate reorganizations			(228)	147	81
Ending balance, Goodwill	$ 2,195	$ 2,195	$ 916	$ 788	$ 491

XML

Business Segment Information

3 Months Ended

May 03, 2013

Business Segment Information

Note 8—Business Segment Information:

The Company defines its reportable segments based on the way the chief operating decision maker (CODM), currently its chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

In preparation for the planned separation transaction, the Company realigned certain business operations among its segments and renamed three of its reportable segments so that, effective February 1, 2013, the Company’s reportable segments include the following: Health and Engineering; National Security Solutions; Technical Services and Information Technology; and Corporate and Other. Prior to this realignment, the names of these segments were as follows: Health, Energy and Civil Solutions; Intelligence and Cybersecurity Solutions; Defense Solutions; and Corporate and Other, respectively.

The segment information for the periods presented, with the prior year period recast to give effect to the above changes in reportable segments, was as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Revenues:
Health and Engineering	$	521		$	416
National Security Solutions		1,080			1,185
Technical Services and Information Technology		1,107			1,163
Intersegment elimination		(1	)		—
Total revenues	$	2,707		$	2,764
Operating income (loss):
Health and Engineering	$	41		$	35
National Security Solutions		76			95
Technical Services and Information Technology		71			85
Corporate and Other		(46	)		(7	)
Total operating income	$	142		$	208

Science Applications International Corporation

Business Segment Information

Note 8—Business Segment Information:

The Company defines its reportable segments based on the way the chief operating decision maker (CODM), currently its chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance.

In preparation for the planned separation transaction, the Company realigned certain business operations among its segments and renamed three of its reportable segments so that, effective February 1, 2013, the Company’s reportable segments include the following: Health and Engineering; National Security Solutions; Technical Services and Information Technology; and Corporate and Other. Prior to this realignment, the names of these segments were as follows: Health, Energy and Civil Solutions; Intelligence and Cybersecurity Solutions; Defense Solutions; and Corporate and Other, respectively.

The segment information for the periods presented, with the prior year period recast to give effect to the above changes in reportable segments, was as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Revenues:
Health and Engineering	$	521		$	416
National Security Solutions		1,080			1,185
Technical Services and Information Technology		1,107			1,163
Intersegment elimination		(1	)		—
Total revenues	$	2,707		$	2,764
Operating income (loss):
Health and Engineering	$	41		$	35
National Security Solutions		76			95
Technical Services and Information Technology		71			85
Corporate and Other		(46	)		(7	)
Total operating income	$	142		$	208

XML

Goodwill and Intangible Assets

3 Months Ended

May 03, 2013

Goodwill and Intangible Assets

Note 4—Goodwill and Intangible Assets:

Effective February 1, 2013 in preparation for the planned separation transaction, the Company realigned certain business operations among three of its reportable segments and renamed these reportable segments as follows: Health and Engineering (HE); National Security Solutions (NSS); and Technical Services and Information Technology (TSIT) (see Note 8). The reassignment of goodwill associated with the realignment is reflected in the table below.

The carrying value of goodwill by segment was as follows:

	HE			NSS		TSIT		Total
	(in millions)
Goodwill at January 31, 2013	$	1,144		$	641	$	410	$	2,195
Corporate reorganizations		(228	)		147		81		—
Goodwill at May 3, 2013	$	916		$	788	$	491	$	2,195

In fiscal 2013, the Company acquired 100% of maxIT Healthcare Holdings, Inc. (maxIT). The estimated fair values of maxIT assets acquired and liabilities assumed are preliminary for income tax related matters and may result in an adjustment to goodwill. There were no goodwill impairments during the three months ended May 3, 2013 and April 30, 2012.

Intangible assets consisted of the following:

	May 3, 2013							January 31, 2013
	Gross carrying value		Accumulated amortization			Net carrying value		Gross carrying value		Accumulated amortization			Net carrying value
	(in millions)
Finite-lived intangible assets:
Customer relationships	$	170	$	(80	)	$	90	$	175	$	(73	)	$	102
Software and technology		122		(57	)		65		127		(57	)		70
Other		2		(1	)		1		2		(1	)		1
Total finite-lived intangible assets		294		(138	)		156		304		(131	)		173
Indefinite-lived intangible assets:
In-process research and development		13		—			13		13		—			13
Trade names		4		—			4		4		—			4
Total indefinite-lived intangible assets		17		—			17		17		—			17
Total intangible assets	$	311	$	(138	)	$	173	$	321	$	(131	)	$	190

Amortization expense related to amortizable intangible assets was $13 million and $10 million for the three months ended May 3, 2013 and April 30, 2012, respectively.

During the three months ended May 3, 2013, the Company recognized impairment losses for intangible assets of $4 million reported within selling, general, and administrative expenses. There were no impairment losses for intangible assets during the three months ended April 30, 2012.

The estimated annual amortization expense related to finite-lived intangible assets as of May 3, 2013 was as follows:

Fiscal Year Ending January 31
	(in millions)
2014 (remainder of the fiscal year)	$	31
2015		33
2016		31
2017		27
2018		18
2019 and thereafter		16
	$	156

Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, the outcome and timing of completion of in-process research and development projects (the assets of which will become amortizable upon completion and placement into service, or will be impaired if abandoned), adjustments to preliminary valuations of intangible assets and other factors.

Science Applications International Corporation

Goodwill and Intangible Assets

Note 4—Goodwill and Intangible Assets:

Effective February 1, 2013 in preparation for the planned separation transaction, the Company realigned certain business operations among three of its reportable segments and renamed these reportable segments as follows: Health and Engineering (HE); National Security Solutions (NSS); and Technical Services and Information Technology (TSIT) (see Note 8). The reassignment of goodwill associated with the realignment is reflected in the table below.

The carrying value of goodwill by segment was as follows:

	HE			NSS		TSIT		Total
	(in millions)
Goodwill at January 31, 2013	$	1,144		$	641	$	410	$	2,195
Corporate reorganizations		(228	)		147		81		—
Goodwill at May 3, 2013	$	916		$	788	$	491	$	2,195

In fiscal 2013, the Company acquired 100% of maxIT Healthcare Holdings, Inc. (maxIT). The estimated fair values of maxIT assets acquired and liabilities assumed are preliminary for income tax related matters and may result in an adjustment to goodwill. There were no goodwill impairments during the three months ended May 3, 2013 and April 30, 2012.

Intangible assets consisted of the following:

	May 3, 2013							January 31, 2013
	Gross carrying value		Accumulated amortization			Net carrying value		Gross carrying value		Accumulated amortization			Net carrying value
	(in millions)
Finite-lived intangible assets:
Customer relationships	$	170	$	(80	)	$	90	$	175	$	(73	)	$	102
Software and technology		122		(57	)		65		127		(57	)		70
Other		2		(1	)		1		2		(1	)		1
Total finite-lived intangible assets		294		(138	)		156		304		(131	)		173
Indefinite-lived intangible assets:
In-process research and development		13		—			13		13		—			13
Trade names		4		—			4		4		—			4
Total indefinite-lived intangible assets		17		—			17		17		—			17
Total intangible assets	$	311	$	(138	)	$	173	$	321	$	(131	)	$	190

Amortization expense related to amortizable intangible assets was $13 million and $10 million for the three months ended May 3, 2013 and April 30, 2012, respectively.

During the three months ended May 3, 2013, the Company recognized impairment losses for intangible assets of $4 million reported within selling, general, and administrative expenses. There were no impairment losses for intangible assets during the three months ended April 30, 2012.

The estimated annual amortization expense related to finite-lived intangible assets as of May 3, 2013 was as follows:

Fiscal Year Ending January 31
	(in millions)
2014 (remainder of the fiscal year)	$	31
2015		33
2016		31
2017		27
2018		18
2019 and thereafter		16
	$	156

Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, the outcome and timing of completion of in-process research and development projects (the assets of which will become amortizable upon completion and placement into service, or will be impaired if abandoned), adjustments to preliminary valuations of intangible assets and other factors.

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Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) (USD $)	3 Months Ended
	May 03, 2013
Cash dividends per share	$ 0.12
Special cash dividends per share	$ 1.00

XML

Business Segment Information - Additional Information (Detail)	1 Months Ended	3 Months Ended
	Jan. 31, 2013 Segment	May 03, 2013 Segment
Segment Reporting Information [Line Items]
Number of reportable segments	3	3

XML

Schedule of Notes Payable and Long-Term Debt (Parenthetical) (Detail) (USD $) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013
Notes Which Mature In December 2020
Debt Instrument [Line Items]
Senior unsecured notes, face amount	$ 450
Debt maturity date	Dec. 01, 2020
Notes Which Mature In December 2040
Debt Instrument [Line Items]
Senior unsecured notes, face amount	300
Debt maturity date	Dec. 01, 2040
Notes Which Mature In July 2032
Debt Instrument [Line Items]
Senior unsecured notes, face amount	250
Debt maturity date	Jul. 01, 2032
Notes Which Mature In July 2033
Debt Instrument [Line Items]
Senior unsecured notes, face amount	$ 300
Debt maturity date	Jul. 01, 2033

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Earnings Per Share (EPS) - Additional Information (Detail) In Millions, unless otherwise specified	3 Months Ended
	May 03, 2013
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive stock based awards	2

XML

Summary of Significant Accounting Policies (Policies)

3 Months Ended

May 03, 2013

Nature of Operations and Basis of Presentation

Nature of Operations and Basis of Presentation

SAIC, Inc. (SAIC) is a holding company whose direct 100%-owned subsidiary is Science Applications International Corporation (Science Applications), a provider of scientific, engineering, systems integration and technical services and solutions in the areas of defense, health, energy, infrastructure, intelligence, surveillance, reconnaissance and cybersecurity to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security, and other U.S. Government civil agencies, state and local government agencies, foreign governments and customers in select commercial markets.

The condensed consolidated financial statements of SAIC include the accounts of its majority-owned and 100%-owned subsidiaries, including Science Applications. The condensed consolidated financial statements of Science Applications include the accounts of its majority-owned and 100%-owned subsidiaries. SAIC does not have separate operations, assets or liabilities independent of Science Applications, except for a note with Science Applications (the “related party note”), on which interest is recognized. From time to time, SAIC issues stock to employees of Science Applications and its subsidiaries, which is reflected in SAIC’s Condensed Consolidated Statement of Stockholders’ Equity and results in an increase to the related party note (see Note 6). All intercompany transactions and accounts have been eliminated in consolidation.

These Combined Notes to Condensed Consolidated Financial Statements apply to both SAIC and Science Applications. As SAIC consolidates Science Applications for financial statement purposes, disclosures that relate to activities of Science Applications also apply to SAIC. References to the “Company” refer collectively to SAIC, Science Applications, and its consolidated subsidiaries unless otherwise noted.

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). Certain disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and combined notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The preparation of 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. 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.

In the opinion of management, the financial information as of May 3, 2013 and for the three months ended May 3, 2013 and April 30, 2012 reflects all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. Operating results for the three months ended May 3, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2014, or any future period.

Reporting Periods

Reporting Periods

Unless otherwise noted, references to fiscal years are to fiscal years ended January 31, for fiscal 2013 and earlier periods, or fiscal years ended the Friday closest to January 31, for fiscal 2014 or later periods. For fiscal 2013, the Company’s fiscal quarters ended on the last calendar day of each of April, July and October. Effective in fiscal 2014, the Company changed its fiscal year to a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2014 began on February 1, 2013 and ends on January 31, 2014. The first quarter of fiscal 2014 ended on May 3, 2013. The Company does not believe that the change in its fiscal year has a material effect on the comparability of the periods presented.

Planned Separation Transaction

Planned Separation Transaction

In August 2012, the Company announced that its board of directors authorized management to pursue a plan to separate into two independent, publicly traded companies. The proposed separation transaction is intended to take the form of a tax-free spin-off to SAIC stockholders of 100% of the shares of a newly formed company focused on technical, engineering and enterprise information technology (IT) services to the U.S. Government, as well as other public agencies. The separation is expected to occur in the latter half of calendar year 2013, subject to final approval of the board of directors and certain customary conditions, including receipt of an opinion from tax counsel and a ruling from the Internal Revenue Service (IRS) as to the tax-free nature of the transaction. Although the Company expects that the separation of its businesses will be consummated, there can be no assurance that a separation will ultimately occur. Upon completion of the separation transaction, the operating results of the separated business will be included in discontinued operations.

The separation transaction expenses for the three months ended May 3, 2013 were as follows:

	Three Months Ended May 3, 2013
	(in millions)
Strategic advisory services	$	8
Legal and accounting services		6
Lease termination and facility consolidation expenses		14
Severance costs		5
Separation transaction expenses in operating income		33
Less: income tax benefit		(13	)
Separation transaction expenses, net of tax	$	20

In connection with the separation transaction, in the first quarter of fiscal 2014, the Company reduced headcount, which resulted in severance costs as reflected in the table above. Also, in connection with the separation transaction, the Company took actions during the first quarter of fiscal 2014 to reduce its real estate footprint by vacating facilities that are not necessary for its future requirements, which resulted in lease termination and facility consolidation expenses as reflected in the table above.

Consistent with the Company’s policy for acquisitions, the Company has recognized a tax benefit for the separation transaction expenses. Certain of the separation transaction expenses will be capitalized for tax purposes if the separation transaction is completed, resulting in a reversal of tax benefits previously recognized.

There were no separation transaction expenses for the three months ended April 30, 2012.

Receivables

Receivables

The Company’s accounts receivable include unbilled receivables, which consist of costs and fees billable upon contract completion or the occurrence of a specified event, substantially all of which is expected to be billed and collected within one year. Unbilled receivables are stated at estimated realizable value. Since the Company’s receivables are primarily with the U.S. Government, the Company does not have a material credit risk exposure. Contract retentions are billed when the Company has negotiated final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Consequently, the timing of collection of retention balances is outside the Company’s control. Based on the Company’s historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant.

The Company has extended deferred payment terms with contractual maturities that may exceed one year to commercial customers related to certain construction projects. As of May 3, 2013, the Company had outstanding receivables from these customers with deferred payment terms of $152 million, which are expected to be collected in fiscal 2014 and fiscal 2015, when the customers have obtained financing.

When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded.

Changes in Estimates on Contracts

Changes in Estimates on Contracts

Changes in estimates related to certain types of contracts accounted for using the percentage of completion method of accounting are recognized in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the contract performance period for a variety of reasons, including changes in contract scope, changes in contract cost estimates due to unanticipated cost growth or retirements of risk for amounts different than estimated, and changes in estimated incentive or award fees. Aggregate changes in contract estimates resulted in a decrease to operating income of $4 million ($0.01 per diluted share) for the three months ended May 3, 2013 and an increase to operating income of $4 million ($0.01 per diluted share) for the three months ended April 30, 2012.

Discontinued Operations

Discontinued Operations

From time-to-time, the Company may dispose (or management may commit to plans to dispose) of non-strategic components of the business, which are reclassified as discontinued operations for all periods presented.

In fiscal 2013, the Company sold certain components of its business, which were historically included in the Company’s Health and Engineering segment, primarily focused on providing operational test and evaluation services to U.S. Government customers.

The pre-sale operating results of this discontinued operation were as follows:

	Three Months Ended April 30, 2012
	(in millions)
Revenues	$	18
Costs and expenses:
Cost of revenues		15
Selling, general and administrative expenses		3
Operating income	$	—

Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above.

Supplementary Cash Flow Information

Supplementary Cash Flow Information

Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Vested stock issued as settlement of annual bonus accruals	$	2	$	2
Stock issued in lieu of cash dividend	$	1	$	1
Cash paid for interest	$	—	$	—
Cash paid for income taxes	$	2	$	8
Dividends payable for declared special cash dividend	$	357	$	—

Special Cash Dividend

Special Cash Dividend

In March 2013, SAIC’s board of directors declared a special cash dividend of $1.00 per share of SAIC common stock payable on June 28, 2013 to stockholders of record on June 14, 2013.

Sale and Leaseback Agreement

Sale and Leaseback Agreement

On May 3, 2013, the Company entered into a purchase and sale agreement relating to the sale of approximately 18 acres of land in Fairfax County, Virginia, including four office buildings, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as tangible personal property and third-party leases. This sale is expected to be completed in a series of transactions over approximately six years. Under the agreement, the Company will lease back from the buyer space in three of the office buildings over varying lease terms. The closing of the initial transaction is expected to occur in the second quarter of fiscal 2014.

Accounting Standards Updates Issued But Not Yet Adopted

Accounting Standards Updates Issued But Not Yet Adopted

Accounting standards and updates issued but not effective for the Company until after May 3, 2013 are not expected to have a material effect on the Company’s consolidated financial position or results of operations.

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Accumulated Other Comprehensive Loss

3 Months Ended

May 03, 2013

Accumulated Other Comprehensive Loss

Note 7—Accumulated Other Comprehensive Loss:

The components of accumulated other comprehensive loss were as follows:

	May 3, 2013			January 31, 2013
	(in millions)
Foreign currency translation adjustments, net of taxes of $(1) million as of May 3, 2013 and January 31, 2013	$	2		$	2
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of May 3, 2013 and January 31, 2013		(5	)		(5	)
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of May 3, 2013 and January 31, 2013		1			1
Total accumulated other comprehensive loss, net of taxes of $2 million as of May 3, 2013 and January 31, 2013	$	(2	)	$	(2	)

As of May 3, 2013, there is less than $1 million of the unrealized net loss on settled derivative instruments (pre-tax) that will be amortized and recognized as interest expense during the next 12 months.

Reclassifications from other comprehensive income to net income, relating to foreign currency translation adjustments, loss on settled derivative instruments and gain on defined benefit plan for the three months ended May 3, 2013, were not material. Reclassifications for foreign currency translation adjustments and loss on settled derivative instruments are recorded in other income, net, and reclassifications for gain on defined benefit plan is recorded in selling, general and administrative expenses.

Science Applications International Corporation

Accumulated Other Comprehensive Loss

Note 7—Accumulated Other Comprehensive Loss:

The components of accumulated other comprehensive loss were as follows:

	May 3, 2013			January 31, 2013
	(in millions)
Foreign currency translation adjustments, net of taxes of $(1) million as of May 3, 2013 and January 31, 2013	$	2		$	2
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of May 3, 2013 and January 31, 2013		(5	)		(5	)
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of May 3, 2013 and January 31, 2013		1			1
Total accumulated other comprehensive loss, net of taxes of $2 million as of May 3, 2013 and January 31, 2013	$	(2	)	$	(2	)

As of May 3, 2013, there is less than $1 million of the unrealized net loss on settled derivative instruments (pre-tax) that will be amortized and recognized as interest expense during the next 12 months.

Reclassifications from other comprehensive income to net income, relating to foreign currency translation adjustments, loss on settled derivative instruments and gain on defined benefit plan for the three months ended May 3, 2013, were not material. Reclassifications for foreign currency translation adjustments and loss on settled derivative instruments are recorded in other income, net, and reclassifications for gain on defined benefit plan is recorded in selling, general and administrative expenses.

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Stock-Based Compensation (Tables)

3 Months Ended

May 03, 2013

Schedule of Stock-Based Compensation Expenses

Total stock-based compensation expense for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Stock options	$	4	$	3
Vesting stock awards		19		20
Performance-based stock awards		1		1
Total stock-based compensation expense	$	24	$	24

Schedule of Weighted Average Grant-Date Fair Value and Assumptions Used

The weighted average grant-date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
Weighted average grant-date fair value	$	1.82		$	1.81
Expected term (in years)		5.0			5.0
Expected volatility		25.0	%		24.4	%
Risk-free interest rate		0.8	%		1.0	%
Dividend yield		3.9	%		3.7	%

Schedule of Stock Option Activity

Stock option activity for the three months ended May 3, 2013 was as follows:

	Shares of stock under stock options			Weighted average exercise price		Weighted average remaining contractual term		Aggregate intrinsic value
	(in millions)					(in years)		(in millions)
Outstanding at January 31, 2013		19.6		$	16.81		3.0	$	—
Options granted		4.7			13.55
Options forfeited or expired		(4.7	)		18.37
Outstanding at May 3, 2013		19.6			15.66		4.3		14.00
Exercisable at May 3, 2013		8.5			17.28		2.4		2.00

Schedule of Vesting Stock Award Activity

Vesting stock award activity for the three months ended May 3, 2013 was as follows:

	Shares of stock under stock awards			Weighted average grant- date fair value
	(in millions)
Unvested stock awards at January 31, 2013		12.4		$	15.20
Awards granted		7.1			13.52
Awards forfeited		(0.7	)		14.68
Awards vested		(3.3	)		16.13
Unvested stock awards at May 3, 2013		15.5			14.24

Schedule of Performance-Based Stock Award Activity

Performance-based stock award activity for the three months ended May 3, 2013 was as follows:

	Expected number of shares of stock to be issued under performance- based stock awards			Weighted average grant- date fair value
	(in millions)
Outstanding at January 31, 2013		1.0		$	13.24
Awards vested		(0.4	)		14.43
Awards forfeited		(0.1	)		14.24
Outstanding at May 3, 2013		0.5			13.33

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Summary of Significant Accounting Policies (Tables)

3 Months Ended

May 03, 2013

Separation Transaction Expenses

The separation transaction expenses for the three months ended May 3, 2013 were as follows:

	Three Months Ended May 3, 2013
	(in millions)
Strategic advisory services	$	8
Legal and accounting services		6
Lease termination and facility consolidation expenses		14
Severance costs		5
Separation transaction expenses in operating income		33
Less: income tax benefit		(13	)
Separation transaction expenses, net of tax	$	20

Schedule of Pre-Sale Operating Results of Discountinued Operations

The pre-sale operating results of this discontinued operation were as follows:

	Three Months Ended April 30, 2012
	(in millions)
Revenues	$	18
Costs and expenses:
Cost of revenues		15
Selling, general and administrative expenses		3
Operating income	$	—

Schedule of Supplementary Cash Flow Information

Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Vested stock issued as settlement of annual bonus accruals	$	2	$	2
Stock issued in lieu of cash dividend	$	1	$	1
Cash paid for interest	$	—	$	—
Cash paid for income taxes	$	2	$	8
Dividends payable for declared special cash dividend	$	357	$	—

XML

Document and Entity Information	3 Months Ended
	May 03, 2013	May 20, 2013
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 03, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Trading Symbol	SAI
Entity Registrant Name	SAIC, Inc.
Entity Central Index Key	0001336920
Current Fiscal Year End Date	--01-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		342,518,407
Science Applications International Corporation
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	May 03, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1
Entity Registrant Name	SCIENCE APPLICATIONS INTERNATIONAL CORP
Entity Central Index Key	0000353394
Current Fiscal Year End Date	--01-31
Entity Filer Category	Non-accelerated Filer
Entity Common Stock, Shares Outstanding		5,000

XML

Earnings Per Share (EPS) (Tables)

3 Months Ended

May 03, 2013

Reconciliation of Income used in Calculating Earnings Per Share

A reconciliation of the income used to compute basic and diluted EPS for the periods presented was as follows:

	Three Months Ended
	May 3, 2013			April 30, 2012
	(in millions)
Basic EPS:
Net income, as reported	$	81		$	117
Less: allocation of distributed and undistributed earnings to participating securities		(4	)		(3	)
Net income, for computing basic EPS	$	77		$	114
Diluted EPS:
Net income, as reported	$	81		$	117
Less: allocation of distributed and undistributed earnings to participating securities		(4	)		(3	)
Net income, for computing diluted EPS	$	77		$	114

Reconciliation of Weighted Average Number of Shares Outstanding

A reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented was as follows:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Basic weighted average number of shares outstanding		336		330
Dilutive common share equivalents—stock options and other stock awards		—		—
Diluted weighted average number of shares outstanding		336		330

Schedule of Stock-Based Awards Excluded from Weighted Average Shares Outstanding

The following stock-based awards were excluded from the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

	Three Months Ended
	May 3, 2013		April 30, 2012
	(in millions)
Antidilutive stock options excluded		20		21
Unvested stock awards excluded		2		—
Performance-based stock awards excluded		—		1