|
|
|
x
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
Commission File Number
|
|
|
|
Exact Name of Registrant as Specified in its Charter, Address of Principal Executive Offices and Telephone Number
|
|
State or other jurisdiction of incorporation or organization
|
|
I.R.S. Employer Identification No.
|
001-35832
|
|
|
|
Science Applications
International Corporation
|
|
Delaware
|
|
46-1932921
|
|
|
|
|
12010 Sunset Hills Road, Reston, VA 20190
|
|
|
|
|
|
|
|
|
703-676-4300
|
|
|
|
|
|
Title of each class
|
|
Name of each exchange on which registered
|
Science Applications International Corporation
Common Stock, Par Value $.0001 Per Share
|
|
New York Stock Exchange
|
|
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
|
Yes
x
|
No ☐
|
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
|
Yes
☐
|
No
x
|
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
|
Yes
x
|
No
☐
|
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
|
Yes
x
|
No
☐
|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
|
x
|
|
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
|
|
|
Large accelerated filer
|
x
|
Accelerated filer
|
☐
|
Non-accelerated filer
|
☐
|
Smaller reporting company
|
☐
|
|
|
|
|
|
|
Emerging growth company
|
☐
|
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
☐
|
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
|
|
Yes
☐
|
|
No
x
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
FORM 10-K
TABLE OF CONTENTS
|
|
|
Page
|
Part I
|
|
|
|
|
|
Item 1.
|
||
Item 1A.
|
||
Item 1B.
|
||
Item 2.
|
||
Item 3.
|
||
Item 4.
|
||
|
|
|
Part II
|
|
|
|
|
|
Item 5.
|
||
Item 6.
|
||
Item 7.
|
||
Item 7A.
|
||
Item 8.
|
||
Item 9.
|
||
Item 9A.
|
||
Item 9B.
|
||
|
|
|
Part III
|
|
|
|
|
|
Item 10.
|
||
Item 11.
|
||
Item 12.
|
||
Item 13.
|
||
Item 14.
|
||
|
|
|
Part IV
|
|
|
|
|
|
Item 15.
|
||
Item 16.
|
||
|
|
|
|
|
|
|
Year Ended
|
|||||||
|
February 1, 2019
|
|
|
February 2, 2018
|
|
|
February 3, 2017
|
|
U.S. Army
|
29
|
%
|
|
30
|
%
|
|
28
|
%
|
U.S. Navy
|
13
|
%
|
|
13
|
%
|
|
13
|
%
|
Other DoD
|
18
|
%
|
|
19
|
%
|
|
17
|
%
|
Other federal government
|
37
|
%
|
|
36
|
%
|
|
40
|
%
|
Total U.S. government
|
97
|
%
|
|
98
|
%
|
|
98
|
%
|
Other
|
3
|
%
|
|
2
|
%
|
|
2
|
%
|
Total
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
•
|
Cost-reimbursement contracts provide for reimbursement of our direct contract costs and allocable indirect costs, plus a fee (contract profit). This type of contract is generally used when uncertainties involved in contract performance do not permit costs to be estimated with sufficient accuracy to use a fixed-price contract. Cost-reimbursement contracts usually subject us to lower risk and generally require us to use our best efforts to accomplish the scope of the work within a specified time and amount of costs.
|
•
|
Time-and-materials (T&M) contracts typically provide for negotiated fixed hourly rates for specified categories of direct labor plus reimbursement of other direct costs. This type of contract is generally used when there is uncertainty of the extent or duration of the work to be performed by the contractor at the time of contract award or it is not possible to anticipate costs with any reasonable degree of confidence. On T&M contracts, we assume the risk of providing appropriately qualified staff to perform these contracts at the hourly rates set forth in the contracts over their period of performance.
|
•
|
Firm-fixed price (FFP) contracts provide for a predetermined price for specific solutions. These contracts offer us potential increased profits if we can complete the work at lower costs than planned. While FFP contracts allow us to benefit from cost savings, these contracts also increase our exposure to reduced profits or losses from increased or unexpected costs.
|
•
|
the engineering and technical services divisions of large defense contractors that provide IT services in addition to other hardware systems and products, which include companies such as General Dynamics Corporation, Northrop Grumman Corporation, and Raytheon Company;
|
•
|
contractors focused principally on technical and IT services, such as Booz Allen Hamilton Inc., CACI International, Inc., Leidos Holdings, Inc., ManTech International Corporation, Serco Group plc, and Perspecta, Inc.;
|
•
|
diversified commercial providers that also provide U.S. government IT services, such as Accenture plc, International Business Machines Corporation and Unisys Corporation; and
|
•
|
contractors providing supply chain management and other logistics services, such as Agility Logistics Corporation
|
•
|
we may not retain key employees (including those with needed security clearances), customers and business partners of an acquired business in the future;
|
•
|
we may fail to successfully integrate acquired businesses, such as failing to successfully implement IT and other control systems relating to the operations of any acquired business;
|
•
|
we may not generate sufficient earnings to meet the required Leverage Ratio under the Credit Facility, which would give lenders the right to, among other things, foreclose on our assets;
|
•
|
acquisitions normally require a significant investment of time and resources, which may disrupt our business and distract our management from other important responsibilities;
|
•
|
we may not be able to accurately estimate the financial effect of any acquisitions and investments on our business and we may not realize anticipated revenue opportunities, cost savings, or other synergies or benefits, or acquisitions may not result in improved operating performance; and
|
•
|
we may assume known as well as unknown material liabilities, legal or regulatory risks that were not identified as part of our due diligence or for which we are unable to receive a purchase price adjustment or reimbursement through indemnification;
|
•
|
the inability to successfully combine our business with Engility in a manner that permits the combined company to achieve the full revenue and cost synergies and other benefits anticipated to result from the merger;
|
•
|
the loss of customers and strategic partners who may not wish to continue their relationships with the combined company;
|
•
|
required regulatory approvals from governmental entities may result in limitations, additional costs or placement of restrictions on the conduct of the combined company, imposition of additional material costs on or materially limiting the revenues of the combined company following the merger;
|
•
|
complexities associated with managing the combined businesses, including difficulty addressing possible differences in corporate cultures and management philosophies and the challenge of integrating complex systems, technology, networks and other assets of each of the companies in a seamless manner that minimizes any adverse impact on customers, suppliers, employees and other business partners; and
|
•
|
potential unknown liabilities and unforeseen increased expenses or delays associated with the merger.
|
Period
(1)
|
Total Number of Shares (or Units) Purchased
(2)
|
|
|
Average Price Paid per Share (or Unit)
|
|
|
Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs
|
|
|
Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
(3)
|
|
|
November 3, 2018 - December 7, 2018
|
289
|
|
|
$
|
69.79
|
|
|
—
|
|
|
2,317,844
|
|
December 8, 2018 - January 4, 2019
|
—
|
|
|
—
|
|
|
—
|
|
|
2,317,844
|
|
|
January 5, 2019 - February 1, 2019
|
120,445
|
|
|
65.92
|
|
|
119,234
|
|
|
2,198,610
|
|
|
Total
|
120,734
|
|
|
$
|
65.93
|
|
|
119,234
|
|
|
|
(1)
|
Date ranges represent our fiscal periods during the current quarter. Our fiscal quarters typically consist of one five-week period and two four-week periods.
|
(2)
|
Includes shares purchased on surrender by stockholders of previously owned shares to satisfy minimum statutory tax withholding obligations related to stock option exercises and vesting of stock awards in addition to shares purchased under our publicly announced plans or programs.
|
(3)
|
On December 15, 2016, the number of additional shares of our common stock that may be repurchased under our existing repurchase program previously announced in October 2013 was increased by approximately 3.3 million shares, bringing the total authorized shares to be repurchased under the program to approximately
11.8 million
shares. As of
February 1, 2019
, we have repurchased approximately
9.6 million
shares of common stock under the program. Subsequent to the end of fiscal 2019, the number of shares that may be repurchased increased by approximately 4.6 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 16.4 million shares.
|
|
Year Ended
|
||||||||||||||||||
|
February 1, 2019
(2)
|
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|
January 29,
2016 |
|
|
January 30,
2015 |
|
|||||
|
(in millions, except per share data)
|
||||||||||||||||||
Consolidated and Combined Statement of Income Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Revenues
|
$
|
4,659
|
|
|
$
|
4,454
|
|
|
$
|
4,442
|
|
|
$
|
4,315
|
|
|
$
|
3,885
|
|
Operating income
|
220
|
|
|
256
|
|
|
263
|
|
|
227
|
|
|
240
|
|
|||||
Net income
|
137
|
|
|
179
|
|
|
143
|
|
|
117
|
|
|
141
|
|
|||||
Earnings per share
(1)
:
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
$
|
3.16
|
|
|
$
|
4.13
|
|
|
$
|
3.21
|
|
|
$
|
2.55
|
|
|
$
|
3.01
|
|
Diluted
|
$
|
3.11
|
|
|
$
|
4.02
|
|
|
$
|
3.12
|
|
|
$
|
2.47
|
|
|
$
|
2.91
|
|
Cash dividend per share
|
$
|
1.24
|
|
|
$
|
1.24
|
|
|
$
|
1.24
|
|
|
$
|
1.21
|
|
|
$
|
1.12
|
|
Consolidated and Combined Balance Sheet Data:
|
February 1, 2019
(2)
|
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|
January 29,
2016 |
|
|
January 30,
2015 |
|
|||||
Total assets
|
$
|
4,563
|
|
|
$
|
2,073
|
|
|
$
|
2,042
|
|
|
$
|
2,122
|
|
|
$
|
1,389
|
|
Long-term debt, including current portion
|
2,089
|
|
|
1,024
|
|
|
1,047
|
|
|
1,070
|
|
|
486
|
|
|||||
Other long-term liabilities and deferred income taxes
|
102
|
|
|
68
|
|
|
48
|
|
|
41
|
|
|
38
|
|
(1)
|
For more information on the calculation of Basic and Diluted Earnings per share see
Note 2
of the notes to the consolidated financial statements contained within this report.
|
(2)
|
The Company adopted ASC 606 on February 3, 2018, using the modified retrospective method whereby the Company recognized the cumulative effect of adoption as an adjustment to its opening balance of retained earnings on February 3, 2018, see
Note 1
of the notes to the consolidated financial statements contained within this report.
|
|
Fiscal 2019
|
|
|
Fiscal 2018
|
|
|
Fiscal 2017
|
|
|
(weeks)
|
|||||||
First Quarter
|
13
|
|
|
13
|
|
|
14
|
|
Second Quarter
|
13
|
|
|
13
|
|
|
13
|
|
Third Quarter
|
13
|
|
|
13
|
|
|
13
|
|
Fourth Quarter
|
13
|
|
|
13
|
|
|
13
|
|
Fiscal Year
|
52
|
|
|
52
|
|
|
53
|
|
•
|
low single digit annual revenue growth percentage, excluding impacts from acquisitions,
|
•
|
adjusted EBITDA margin expansion of 10 to 20 basis points annually, and
|
•
|
return of capital in excess of operating needs.
|
|
Year Ended
|
||||||||||||||||
|
February 1, 2019
|
|
|
Percent change
|
|
February 2, 2018
|
|
|
Percent change
|
|
February 3, 2017
|
|
|||||
|
(dollars in millions)
|
||||||||||||||||
Revenues
|
$
|
4,659
|
|
|
5
|
%
|
|
$
|
4,454
|
|
|
—
|
%
|
|
$
|
4,442
|
|
Cost of revenues
|
4,195
|
|
|
4
|
%
|
|
4,043
|
|
|
1
|
%
|
|
4,003
|
|
|||
As a percentage of revenues
|
90.0
|
%
|
|
|
|
90.8
|
%
|
|
|
|
90.1
|
%
|
|||||
Selling, general and administrative expenses
|
158
|
|
|
2
|
%
|
|
155
|
|
|
(7
|
)%
|
|
166
|
|
|||
Acquisition and integration costs
|
86
|
|
|
100
|
%
|
|
—
|
|
|
(100
|
)%
|
|
10
|
|
|||
Operating income
|
220
|
|
|
(14
|
)%
|
|
256
|
|
|
(3
|
)%
|
|
263
|
|
|||
As a percentage of revenues
|
4.7
|
%
|
|
|
|
5.7
|
%
|
|
|
|
|
5.9
|
%
|
||||
Net income
|
$
|
137
|
|
|
(23
|
)%
|
|
$
|
179
|
|
|
25
|
%
|
|
$
|
143
|
|
Cash flows provided by operating activities
|
$
|
184
|
|
|
(15
|
)%
|
|
$
|
217
|
|
|
(21
|
)%
|
|
$
|
273
|
|
|
Year Ended
|
||||||||||
|
February 1, 2019
|
|
|
February 2, 2018
|
|
|
February 3, 2017
|
|
|||
|
(in millions)
|
||||||||||
Net income
|
$
|
137
|
|
|
$
|
179
|
|
|
$
|
143
|
|
Interest expense
|
53
|
|
|
44
|
|
|
52
|
|
|||
Interest income
|
(3
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Provision for income taxes
|
33
|
|
|
35
|
|
|
69
|
|
|||
Depreciation and amortization
|
47
|
|
|
44
|
|
|
50
|
|
|||
EBITDA
|
267
|
|
|
301
|
|
|
314
|
|
|||
EBITDA as a percentage of revenues
|
5.7
|
%
|
|
6.8
|
%
|
|
7.1
|
%
|
|||
Acquisition and integration costs
|
86
|
|
|
—
|
|
|
10
|
|
|||
Restructuring costs
|
—
|
|
|
13
|
|
|
—
|
|
|||
Depreciation included in restructuring costs and acquisition and integration costs
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|||
Adjusted EBITDA
|
$
|
353
|
|
|
$
|
313
|
|
|
$
|
322
|
|
Adjusted EBITDA as a percentage of revenues
|
7.6
|
%
|
|
7.0
|
%
|
|
7.2
|
%
|
•
|
Funded Backlog.
Funded backlog for contracts with government agencies primarily represents estimated amounts of revenue to be earned in the future from contracts for which funding is appropriated less revenues previously recognized on these contracts. It does not include the unfunded portion of contracts in which funding is incrementally appropriated or authorized on a quarterly or annual basis by the U.S. government and other customers even though the contract may call for performance over a number of years. Funded backlog for contracts with non-government customers represents the estimated value on contracts, which may cover multiple future years, under which we are obligated to perform, less revenues previously recognized on these contracts.
|
•
|
Negotiated Unfunded Backlog.
Negotiated unfunded backlog represents estimated amounts of revenue to be earned in the future from negotiated contracts for which funding has not been appropriated or otherwise authorized and from unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders expected to be awarded under IDIQ, GSA Schedules or other master agreement contract vehicles.
|
|
February 1, 2019
|
|
|
February 2, 2018
|
|
||
|
(in millions)
|
||||||
Funded backlog
|
$
|
2,753
|
|
|
$
|
2,012
|
|
Negotiated unfunded backlog
|
11,048
|
|
|
8,215
|
|
||
Total backlog
|
$
|
13,801
|
|
|
$
|
10,227
|
|
|
|
Year Ended
|
|||||||
|
|
February 1, 2019
|
|
|
February 2, 2018
|
|
|
February 3, 2017
|
|
Cost reimbursement
|
|
50
|
%
|
|
45
|
%
|
|
41
|
%
|
Time and materials (T&M)
|
|
23
|
%
|
|
27
|
%
|
|
30
|
%
|
Firm-fixed price (FFP)
|
|
27
|
%
|
|
28
|
%
|
|
29
|
%
|
Total
|
|
100
|
%
|
|
100
|
%
|
|
100
|
%
|
|
|
Year Ended
|
|||||||
|
|
February 1, 2019
|
|
|
February 2, 2018
|
|
|
February 3, 2017
|
|
|
|
(as a % of total cost of revenues)
|
|||||||
Labor-related cost of revenues
|
|
48
|
%
|
|
47
|
%
|
|
48
|
%
|
Subcontractor-related cost of revenues
|
|
30
|
%
|
|
33
|
%
|
|
34
|
%
|
Supply chain materials-related cost of revenues
|
|
15
|
%
|
|
13
|
%
|
|
12
|
%
|
Other materials-related cost of revenues
|
|
7
|
%
|
|
7
|
%
|
|
6
|
%
|
|
Year Ended
|
||||||||||
|
February 1, 2019
|
|
|
February 2, 2018
|
|
|
February 3, 2017
|
|
|||
|
(in millions)
|
||||||||||
Net cash provided by operating activities
|
$
|
184
|
|
|
$
|
217
|
|
|
$
|
273
|
|
Net cash used in investing activities
|
(1,028
|
)
|
|
(22
|
)
|
|
(17
|
)
|
|||
Net cash provided by (used in) financing activities
|
938
|
|
|
(261
|
)
|
|
(247
|
)
|
|||
Total increase (decrease) in cash, cash equivalents and restricted cash
|
$
|
94
|
|
|
$
|
(66
|
)
|
|
$
|
9
|
|
|
Payments Due by Fiscal Year
|
||||||||||||||||||
|
Total
|
|
|
2020
|
|
|
2021-2022
|
|
|
2023-2024
|
|
|
2025 - Thereafter
|
|
|||||
|
(in millions)
|
||||||||||||||||||
Contractual obligations:
|
|
|
|
|
|
|
|
|
|
||||||||||
Long-term debt including current portion
(1)
|
$
|
2,115
|
|
|
$
|
24
|
|
|
$
|
138
|
|
|
$
|
958
|
|
|
$
|
995
|
|
Interest payments on long-term debt
(2)
|
479
|
|
|
90
|
|
|
161
|
|
|
152
|
|
|
76
|
|
|||||
Operating lease obligations
|
211
|
|
|
55
|
|
|
78
|
|
|
35
|
|
|
43
|
|
|||||
Estimated purchase obligations
(3)
|
98
|
|
|
62
|
|
|
19
|
|
|
5
|
|
|
12
|
|
|||||
Other long-term liabilities
(4)
|
40
|
|
|
7
|
|
|
10
|
|
|
5
|
|
|
18
|
|
|||||
Total contractual obligations
|
$
|
2,943
|
|
|
$
|
238
|
|
|
$
|
406
|
|
|
$
|
1,155
|
|
|
$
|
1,144
|
|
(1)
|
The amounts presented are based on an anticipated loan repayment schedule. However, we may be required to make certain mandatory prepayments based on our level of cash flow generation and we also have the option to prepay loan principal amounts at any time.
|
(2)
|
Amounts include an estimate of future variable interest payments on the Term Loan Facilities based on scheduled outstanding principal amounts, current applicable margin and projected 1-month LIBOR as of
February 1, 2019
. The amounts presented in this table exclude the effects of interest rate swaps used to hedge against changes in 1-month LIBOR.
|
(3)
|
Includes estimated obligations to transfer funds under legally enforceable agreements for fixed or minimum amounts or quantities of goods or services at fixed or minimum prices. Excludes purchase orders for services or products to be delivered pursuant to U.S. government contracts in which we have full recourse under normal contract termination clauses.
|
(4)
|
Other long-term liabilities primarily consist of liabilities associated with deferred compensation plan obligations, and liabilities for unrecognized tax benefits. Deferred compensation plan obligations have been allocated to fiscal years based on participants’ payment elections on retirement and estimated retirement ages, but is subject to acceleration on participants’ termination of employment prior to retirement. Liabilities for unrecognized tax benefits are allocated to the fiscal years in which the statute of limitations is currently expected to expire.
|
Name of officer
|
Age
|
|
Position(s) with the Company and prior business experience
|
|
|
|
|
Nazzic S. Keene
|
58
|
|
Chief Operating Officer (COO) since June 2017. Prior to this role Ms. Keene served as Sector President, Global Markets and Missions from September 2013 to June 2017. Ms. Keene served as former Parent’s Senior Vice President for Corporate Strategy and Planning from August 2012 to September 2013. Prior to joining us, Ms. Keene was the Senior Vice President and General Manager for U.S. Enterprise Markets at CGI Group, Inc. from 2004.
|
|
|
|
|
Steven G. Mahon
|
57
|
|
General Counsel and Corporate Secretary since November 2015. Mr. Mahon previously served as General Counsel, Chief Compliance Officer and Corporate Secretary at MTS Systems Corporation (MTS) from October 2011 to November 2015. Prior to MTS, Mr. Mahon was Assistant General Counsel for Alliant Techsystems Inc. and is a retired Colonel from the U.S. Army where he served in the U.S. Judge Advocate’s General’s Corps, practicing law in a variety of roles on active duty and in the U.S. Army Reserve.
|
|
|
|
|
Charles A. Mathis
|
59
|
|
Chief Financial Officer since November 2016. Mr. Mathis previously served as CFO at ScanSource Inc., a global public company focused on technology services and products, since 2012. Prior to ScanSource, Mathis was CFO from 2008 to 2012 for Force Protection Inc., based in South Carolina, where he led strategic and operational improvements of the global defense company. He was also the CFO for Fort Worth-based EFW, Inc., the U.S.-based subsidiary of the Israeli defense contractor, Elbit Systems from 2006 to 2008.
|
|
|
|
|
Anthony J. Moraco
(1)
|
59
|
|
Chief Executive Officer since September 2013. Mr. Moraco previously served as the President for the Government Solutions Group of former Parent from February 2013 to September 2013. Mr. Moraco also held positions as Group President of former Parent’s Intelligence, Surveillance and Reconnaissance organization from March 2012 to February 2013, Executive Vice President for Operations and Performance Excellence from August 2010 to March 2012, and Business Unit General Manager and other positions for the Space and Geospatial Intelligence business unit from February 2006 to August 2010. Prior to joining us in 2006, Mr. Moraco worked for The Boeing Company from 2000 to 2006 where he served as the Deputy General Manager of Mission Systems in the Space and Intelligence Systems organization as well as the Director of Homeland Security Technology Integration.
|
|
|
|
|
Karen A. Wheeler
|
49
|
|
Chief Human Resources Officer since February 2017. Prior to this role, Ms. Wheeler served as Chief Procurement Officer from July 2013 to February 2017. Ms. Wheeler has more than 20 years of experience at SAIC, where she held many key contracts and procurement director positions supporting numerous business areas.
|
(1)
|
Tony Moraco will retire as chief executive officer effective July 31, 2019, and the Board of Directors has elected Nazzic S. Keene, currently the Company's chief operating officer, to succeed him.
|
Equity Compensation Plan Information
|
|||||||||
Plan Category
|
Number of securities to be issued upon exercise of outstanding options, warrants and rights
(1)
|
|
|
Weighted-average exercise price of outstanding
options, warrants
and rights
(2)
|
|
|
Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
(3)
|
|
|
|
(a)
|
|
(b)
|
|
(c)
|
||||
Equity compensation plans approved by security holders
|
2,343,938
|
|
|
$
|
53.67
|
|
|
7,010,527
|
|
Equity compensation plans not approved by security holders
|
—
|
|
|
$
|
—
|
|
|
—
|
|
Total
|
2,343,938
|
|
|
|
|
7,010,527
|
|
(1)
|
This amount includes 1,058,165 stock options outstanding, 1,105,473 shares issuable for other stock-based awards under the 2013 Equity Incentive Plan and 180,300 shares issuable for other stock-based awards under the 2012 Long Term Performance Plan (for assumed Engility awards, see
Note 7
to the consolidated financial statements contained within this report). This amount does not include shares to be issued pursuant to purchase rights under the 2013 Employee Stock Purchase Plan.
|
(2)
|
Does not include shares to be issued for stock-based awards, other than stock options, which will not require any payment upon issuance of those shares.
|
(3)
|
Includes 2,988,496 shares of our common stock available for issuance under the 2013 Employee Stock Purchase Plan (ESPP). The maximum number of shares initially available for issuance under the ESPP was 1 million. The ESPP provides for an automatic increase to the share reserve on the first day of each fiscal year beginning on February 1, 2014 in an amount equal to the lesser of (i) 1 million shares, (ii) two percent of the number of shares of our common stock outstanding on the last day of the immediately preceding fiscal year or (iii) a number determined by the Compensation Committee of the Board of Directors. The amount authorized for issuance under the ESPP increased 500,000, 916,198 and 973,477 during fiscal 2017, 2016 and 2015 respectively. There was no increase to the amount authorized for issuance under the ESPP during fiscal 2018 or fiscal 2019. In addition, this includes 3,106,084 shares of our common stock available for issuance under the 2013 Equity Incentive Plan (EIP). The maximum number of shares initially available for issuance under the EIP was 5.7 million, which was increased by 2.8 million per the amended and restated 2013 Equity Incentive Plan, adopted June 4, 2014, amounting to a total authorized for issuance of 8.5 million. Lastly, this includes 915,947 shares of our common stock available for issuance under the 2012 Long Term Performance Plan (LTPP), see
Note 7
to the consolidated financial statements contained within this report. The shares outstanding under the LTPP relate to assumed awards from the Engility acquisition, and as of the acquisition date, January 14, 2019, the maximum number of shares available for issuance under the LTPP was 1,198,010. We expect that the number of shares actually issued under the EIP and LTPP will be significantly less than the number of total awards outstanding under the respective plans because (a) a net option exercise results in a smaller portion of the number of award shares being issued when a participant uses award shares, rather than cash, to pay the exercise price, which historically most participants have elected to do, (b) most participants historically have elected to let the Company retain award shares to pay for taxes due on the exercise of options and all participants are required to use award shares to pay for taxes upon the vesting of restricted stock or restricted stock units, (c) some participants may terminate employment with the Company before the vesting of awards resulting in awards being forfeited and (d) some participants may not exercise stock options before the expiration date for a variety of reasons, including if the exercise price exceeds the then current market price of shares.
|
(a)
|
Documents filed as part of the report
|
Science Applications International Corporation
|
||
|
|
|
By
|
/s/ Charles A. Mathis
|
|
|
|
|
|
Charles A. Mathis
Chief Financial Officer
|
Signature
|
|
Title
|
|
Date
|
/s/ Anthony J. Moraco
|
|
Principal Executive Officer and Director
|
|
March 29, 2019
|
Anthony J. Moraco
|
|
|
||
|
|
|
|
|
/s/ Charles A. Mathis
|
|
Principal Financial Officer and
Principal Accounting Officer
|
|
March 29, 2019
|
Charles A. Mathis
|
|
|
||
|
|
|
|
|
/s/ Donna S. Morea
|
|
Chair of the Board
|
|
March 29, 2019
|
Donna S. Morea
|
|
|
||
|
|
|
|
|
/s/ Robert A. Bedingfield
|
|
Director
|
|
March 29, 2019
|
Robert A. Bedingfield
|
|
|
||
|
|
|
|
|
/s/ Deborah B. Dunie
|
|
Director
|
|
March 29, 2019
|
Deborah B. Dunie
|
|
|
||
|
|
|
|
|
/s/ John J. Hamre
|
|
Director
|
|
March 29, 2019
|
John J. Hamre
|
|
|
||
|
|
|
|
|
/s/ Mark J. Johnson
|
|
Director
|
|
March 29, 2019
|
Mark J. Johnson
|
|
|
||
|
|
|
|
|
/s/ David M. Kerko
|
|
Director
|
|
March 29, 2019
|
David M. Kerko
|
|
|
||
|
|
|
|
|
/s/ Timothy J. Mayopoulos
|
|
Director
|
|
March 29, 2019
|
Timothy J. Mayopoulos
|
|
|
||
|
|
|
|
|
/s/ Katharina G. McFarland
|
|
Director
|
|
March 29, 2019
|
Katharina G. McFarland
|
|
|
||
|
|
|
|
|
/s/ Edward J. Sanderson, Jr.
|
|
Director
|
|
March 29, 2019
|
Edward J. Sanderson, Jr.
|
|
|
||
|
|
|
|
|
/s/ Steven R. Shane
|
|
Director
|
|
March 29, 2019
|
Steven R. Shane
|
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
|
CONSOLIDATED FINANCIAL STATEMENTS
|
Page
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended
|
||||||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|||
|
(in millions, except per share amounts)
|
||||||||||
Revenues
|
$
|
4,659
|
|
|
$
|
4,454
|
|
|
$
|
4,442
|
|
Cost of revenues
|
4,195
|
|
|
4,043
|
|
|
4,003
|
|
|||
Selling, general and administrative expenses
|
158
|
|
|
155
|
|
|
166
|
|
|||
Acquisition and integration costs (Note 4)
|
86
|
|
|
—
|
|
|
10
|
|
|||
Operating income
|
220
|
|
|
256
|
|
|
263
|
|
|||
Interest expense
|
53
|
|
|
44
|
|
|
52
|
|
|||
Other (income) expense, net
|
(3
|
)
|
|
(2
|
)
|
|
(1
|
)
|
|||
Income before income taxes
|
170
|
|
|
214
|
|
|
212
|
|
|||
Provision for income taxes (Note 9)
|
(33
|
)
|
|
(35
|
)
|
|
(69
|
)
|
|||
Net income
|
$
|
137
|
|
|
$
|
179
|
|
|
$
|
143
|
|
Net income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|||
Net income attributable to common stockholders
|
$
|
137
|
|
|
$
|
179
|
|
|
$
|
143
|
|
Earnings per share (Note 2):
|
|
|
|
|
|
||||||
Basic
|
$
|
3.16
|
|
|
$
|
4.13
|
|
|
$
|
3.21
|
|
Diluted
|
$
|
3.11
|
|
|
$
|
4.02
|
|
|
$
|
3.12
|
|
|
Year ended
|
||||||||||
|
February 1, 2019
|
|
|
February 2, 2018
|
|
|
February 3, 2017
|
|
|||
|
(in millions)
|
||||||||||
Net income
|
$
|
137
|
|
|
$
|
179
|
|
|
$
|
143
|
|
Other comprehensive (loss) income, net of tax:
|
|
|
|
|
|
||||||
Unrealized (loss) gain on derivative instruments, net of tax benefit (expense) of $6 million, $(2) million and $(1) million for the year ended February 1, 2019, February 2, 2018 and February 3, 2017, respectively
|
(17
|
)
|
|
3
|
|
|
2
|
|
|||
Reclassification adjustment for (benefits) costs realized in net income, net of tax expense (benefit) of $0 million, $(1) million and $(3) million for the year ended February 1, 2019, February 2, 2018 and February 3, 2017, respectively
|
(1
|
)
|
|
2
|
|
|
5
|
|
|||
Net unrealized (loss) gain on derivative instruments
|
(18
|
)
|
|
5
|
|
|
7
|
|
|||
Total other comprehensive (loss) income, net of tax
|
(18
|
)
|
|
5
|
|
|
7
|
|
|||
Comprehensive income
|
$
|
119
|
|
|
$
|
184
|
|
|
$
|
150
|
|
Comprehensive income attributable to non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|||
Comprehensive income attributable to common stockholders
|
$
|
119
|
|
|
$
|
184
|
|
|
$
|
150
|
|
|
February 1,
2019 |
|
|
February 2,
2018 |
|
||
|
(in millions)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
237
|
|
|
$
|
144
|
|
Receivables, net
(Note 3)
|
1,050
|
|
|
674
|
|
||
Inventories, net
|
74
|
|
|
68
|
|
||
Prepaid expenses
|
47
|
|
|
35
|
|
||
Other current assets
|
25
|
|
|
29
|
|
||
Total current assets
|
1,433
|
|
|
950
|
|
||
Goodwill (Note 5)
|
2,120
|
|
|
863
|
|
||
Intangible assets, net (Note 5)
|
803
|
|
|
179
|
|
||
Property, plant, and equipment, net (Note 6)
|
103
|
|
|
61
|
|
||
Other assets
|
104
|
|
|
20
|
|
||
Total assets
|
$
|
4,563
|
|
|
$
|
2,073
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
455
|
|
|
$
|
397
|
|
Accrued payroll and other employee benefits
|
121
|
|
|
69
|
|
||
Accrued vacation
|
120
|
|
|
81
|
|
||
Other accrued liabilities
|
177
|
|
|
107
|
|
||
Long-term debt, current portion (Note 10)
|
24
|
|
|
41
|
|
||
Total current liabilities
|
897
|
|
|
695
|
|
||
Long-term debt, net of current portion (Note 10)
|
2,065
|
|
|
983
|
|
||
Deferred income taxes
|
—
|
|
|
23
|
|
||
Other long-term liabilities
|
102
|
|
|
45
|
|
||
Commitments and contingencies (Note 15)
|
|
|
|
||||
Equity:
|
|
|
|
||||
Common stock, $.0001 par value, 1 billion shares authorized, 60 million shares and 43 million shares issued and outstanding as of February 1, 2019 and February 2, 2018, respectively
|
—
|
|
|
—
|
|
||
Additional paid-in capital
|
1,132
|
|
|
—
|
|
||
Retained earnings
|
367
|
|
|
323
|
|
||
Accumulated other comprehensive (loss) income
|
(14
|
)
|
|
4
|
|
||
Total common stockholders' equity
|
1,485
|
|
|
327
|
|
||
Non-controlling interest
|
14
|
|
|
—
|
|
||
Total stockholders' equity
|
1,499
|
|
|
327
|
|
||
Total liabilities and stockholders' equity
|
$
|
4,563
|
|
|
$
|
2,073
|
|
|
Shares of
common stock
|
|
|
Additional
paid-in
capital
|
|
|
Retained
earnings
|
|
|
Accumulated
other
comprehensive
income (loss)
|
|
|
Non-Controlling Interest
|
|
|
Total
|
|
|||||
|
(in millions)
|
|||||||||||||||||||||
Balance at January 29, 2016
|
45
|
|
|
$
|
215
|
|
|
$
|
174
|
|
|
$
|
(9
|
)
|
|
$
|
—
|
|
|
$
|
380
|
|
Net income
|
—
|
|
|
—
|
|
|
143
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|||||
Issuances of stock
|
1
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|
—
|
|
|
7
|
|
|||||
Cash dividends of $1.24 per share
|
—
|
|
|
—
|
|
|
(57
|
)
|
|
—
|
|
|
—
|
|
|
(57
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
6
|
|
|||||
Income tax benefits from stock-based compensation
|
—
|
|
|
18
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18
|
|
|||||
Repurchases of stock
|
(2
|
)
|
|
(156
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(156
|
)
|
|||||
Balance at February 3, 2017
|
44
|
|
|
91
|
|
|
260
|
|
|
(2
|
)
|
|
—
|
|
|
349
|
|
|||||
Net income
|
—
|
|
|
—
|
|
|
179
|
|
|
—
|
|
|
—
|
|
|
179
|
|
|||||
Issuances of stock
|
1
|
|
|
8
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8
|
|
|||||
Reclassification of AOCI due to the Tax Act
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
1
|
|
|
—
|
|
|
—
|
|
|||||
Other comprehensive income, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
—
|
|
|
5
|
|
|||||
Cash dividends of $1.24 per share
|
—
|
|
|
—
|
|
|
(55
|
)
|
|
—
|
|
|
—
|
|
|
(55
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
(4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(4
|
)
|
|||||
Repurchases of stock
|
(2
|
)
|
|
(95
|
)
|
|
(60
|
)
|
|
—
|
|
|
—
|
|
|
(155
|
)
|
|||||
Balance at February 2, 2018
|
43
|
|
|
—
|
|
|
323
|
|
|
4
|
|
|
—
|
|
|
327
|
|
|||||
Cumulative impact from adopting ASC 606 (Note 1) on February 3, 2018
|
—
|
|
|
—
|
|
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
|||||
Net income attributable to common stockholders
|
—
|
|
|
—
|
|
|
137
|
|
|
—
|
|
|
—
|
|
|
137
|
|
|||||
Issuances of stock
|
1
|
|
|
7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
7
|
|
|||||
Other comprehensive loss, net of tax
|
—
|
|
|
—
|
|
|
—
|
|
|
(18
|
)
|
|
—
|
|
|
(18
|
)
|
|||||
Cash dividends of $1.24 per share
|
—
|
|
|
—
|
|
|
(54
|
)
|
|
—
|
|
|
—
|
|
|
(54
|
)
|
|||||
Stock-based compensation
|
—
|
|
|
52
|
|
|
(9
|
)
|
|
—
|
|
|
—
|
|
|
43
|
|
|||||
Repurchases of stock
|
(1
|
)
|
|
(11
|
)
|
|
(33
|
)
|
|
—
|
|
|
—
|
|
|
(44
|
)
|
|||||
Stock issued for the Engility acquisition
|
17
|
|
|
1,084
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,084
|
|
|||||
Acquired non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
13
|
|
|
13
|
|
|||||
Contribution from non-controlling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
1
|
|
|||||
Balance at February 1, 2019
|
60
|
|
|
1,132
|
|
|
367
|
|
|
(14
|
)
|
|
14
|
|
|
1,499
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Fiscal 2019
|
|
|
Fiscal 2018
|
|
|
Fiscal 2017
|
|
|
(weeks)
|
|||||||
First Quarter
|
13
|
|
|
13
|
|
|
14
|
|
Second Quarter
|
13
|
|
|
13
|
|
|
13
|
|
Third Quarter
|
13
|
|
|
13
|
|
|
13
|
|
Fourth Quarter
|
13
|
|
|
13
|
|
|
13
|
|
Fiscal Year
|
52
|
|
|
52
|
|
|
53
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
February 1, 2019
|
|
|
February 2, 2018
|
|
||
|
(in millions)
|
||||||
Cash and cash equivalents
|
$
|
237
|
|
|
$
|
144
|
|
Restricted cash included in other assets
|
9
|
|
|
8
|
|
||
Cash, cash equivalents and restricted cash
|
$
|
246
|
|
|
$
|
152
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Balance at February 2, 2018
|
|
Adjustments due to ASC 606
|
|
Opening Balance at February 3, 2018
|
||||||
|
(in millions)
|
||||||||||
Assets
|
|
|
|
|
|
||||||
Receivables, net
|
$
|
674
|
|
|
$
|
(1
|
)
|
|
$
|
673
|
|
Inventories, net
|
68
|
|
|
(2
|
)
|
|
66
|
|
|||
Other current assets
|
29
|
|
|
(15
|
)
|
|
14
|
|
|||
Other assets
|
20
|
|
|
11
|
|
|
31
|
|
|||
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
||||||
Other accrued liabilities
|
107
|
|
|
(13
|
)
|
|
94
|
|
|||
Deferred income taxes
|
23
|
|
|
1
|
|
|
24
|
|
|||
Other long-term liabilities
|
45
|
|
|
2
|
|
|
47
|
|
|||
Retained earnings
|
$
|
323
|
|
|
$
|
3
|
|
|
$
|
326
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
Twelve Months Ended February 1, 2019
|
||||||||||
|
|
As reported
|
|
Balances without adoption of ASC 606
|
|
Effect of change
|
||||||
|
|
(in millions)
|
||||||||||
Income Statement
|
|
|
|
|
|
|
||||||
Revenues
|
|
$
|
4,659
|
|
|
$
|
4,672
|
|
|
$
|
(13
|
)
|
Cost of revenues
|
|
4,195
|
|
|
4,209
|
|
|
(14
|
)
|
|||
Operating income
|
|
$
|
220
|
|
|
$
|
219
|
|
|
$
|
1
|
|
|
February 1, 2019
|
||||||||||
|
As reported
|
|
Balances without adoption of ASC 606
|
|
Effect of change
|
||||||
|
(in millions)
|
||||||||||
Balance Sheet
|
|
|
|
|
|
||||||
Assets
|
|
|
|
|
|
||||||
Receivables, net
|
$
|
1,050
|
|
|
$
|
1,048
|
|
|
$
|
2
|
|
Inventories, net
|
74
|
|
|
78
|
|
|
(4
|
)
|
|||
Other assets
|
104
|
|
|
93
|
|
|
11
|
|
|||
|
|
|
|
|
|
||||||
Liabilities and Equity
|
|
|
|
|
|
||||||
Other accrued liabilities
|
177
|
|
|
174
|
|
|
3
|
|
|||
Other long-term liabilities
|
102
|
|
|
100
|
|
|
2
|
|
|||
Retained earnings
|
$
|
367
|
|
|
$
|
363
|
|
|
$
|
4
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
|||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|
(in millions)
|
|||||||
Basic weighted-average number of shares outstanding
|
43.4
|
|
|
43.3
|
|
|
44.5
|
|
Dilutive common share equivalents - stock options and other stock-based awards
|
0.7
|
|
|
1.2
|
|
|
1.4
|
|
Diluted weighted-average number of shares outstanding
|
44.1
|
|
|
44.5
|
|
|
45.9
|
|
|
Year Ended
|
|||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|
(in millions)
|
|||||||
Antidilutive stock options excluded
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
||||||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|||
|
(in millions, except per share amounts)
|
||||||||||
Favorable adjustments
|
$
|
30
|
|
|
$
|
27
|
|
|
$
|
42
|
|
Unfavorable adjustments
|
(13
|
)
|
|
(30
|
)
|
|
(20
|
)
|
|||
Net (unfavorable) favorable adjustments
|
17
|
|
|
(3
|
)
|
|
22
|
|
|||
Income tax effect
|
(4
|
)
|
|
1
|
|
|
(7
|
)
|
|||
Net (unfavorable) favorable adjustments, after tax
|
13
|
|
|
(2
|
)
|
|
15
|
|
|||
Basic EPS impact
|
$
|
0.29
|
|
|
$
|
(0.05
|
)
|
|
$
|
0.34
|
|
Diluted EPS impact
|
$
|
0.29
|
|
|
$
|
(0.04
|
)
|
|
$
|
0.33
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
|
|
|
February 1, 2019
|
|
|
|
(in millions)
|
||
Department of Defense
|
$
|
2,805
|
|
Other federal government agencies
|
1,707
|
|
|
Commercial, state and local
|
147
|
|
|
Total
|
$
|
4,659
|
|
|
Year Ended
|
|
|
|
February 1, 2019
|
|
|
|
(in millions)
|
||
Cost reimbursement
|
$
|
2,306
|
|
Time and materials (T&M)
|
1,086
|
|
|
Firm-fixed price (FFP)
|
1,267
|
|
|
Total
|
$
|
4,659
|
|
|
Year Ended
|
|
|
|
February 1, 2019
|
|
|
|
(in millions)
|
||
Prime contractor to federal government
|
$
|
4,178
|
|
Subcontractor to federal government
|
334
|
|
|
Other
|
147
|
|
|
Total
|
$
|
4,659
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
(1)
|
Includes the cumulative effect of the changes made to the Company's opening balance sheet at February 3, 2018 from the modified retrospective adoption of ASC 606.
|
(2)
|
Net of allowance for doubtful accounts of
$2 million
and
$1 million
as of
February 1, 2019
and February 3, 2018, respectively.
|
|
Balance Sheet line item
|
February 1,
2019 |
|
|
February 3, 2018
(1)
|
|
||
|
|
(in millions)
|
||||||
Pre-contract costs
|
Other current assets
|
$
|
1
|
|
|
$
|
1
|
|
Fulfillment costs - current
|
Other current assets
|
—
|
|
|
3
|
|
||
Fulfillment costs - non-current
|
Other assets
|
$
|
13
|
|
|
$
|
—
|
|
(1)
|
Includes the cumulative effect of the changes made to the Company's opening balance sheet at February 3, 2018 from the modified retrospective adoption of ASC 606.
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
(1)
|
Represents approximately
16.8 million
new shares of SAIC common stock issued to Engility shareholders prior to the market opening on January 14, 2019, using the SAIC share price of
$65.03
at the close of business on January 11, 2019.
|
(2)
|
Represents the fair value of the converted vesting stock awards assumed attributable to pre-acquisition service. See
Note 7
.
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Amount
|
|
|
Weighted-Average Amortization Period
|
|
|
(in millions)
|
|
|
(in years)
|
|
Backlog
|
$
|
30
|
|
|
1
|
Developed technology
|
2
|
|
|
10
|
|
Customer relationships
|
616
|
|
|
14
|
|
Total intangible assets
|
$
|
648
|
|
|
13
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
||||||
|
February 1, 2019
|
|
|
February 2, 2018
|
|
||
|
(in millions, except per share amounts)
|
||||||
Revenues
|
$
|
6,426
|
|
|
$
|
6,352
|
|
Net income attributable to common stockholders
|
$
|
260
|
|
|
$
|
140
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
February 1, 2019
|
|
February 2, 2018
|
||||||||||||||||||||
|
Gross carrying value
|
|
|
Accumulated amortization
|
|
|
Net carrying value
|
|
|
Gross carrying value
|
|
|
Accumulated amortization
|
|
|
Net carrying value
|
|
||||||
|
(in millions)
|
||||||||||||||||||||||
Customer relationships
|
$
|
850
|
|
|
$
|
(78
|
)
|
|
$
|
772
|
|
|
$
|
234
|
|
|
$
|
(55
|
)
|
|
$
|
179
|
|
Backlog
|
30
|
|
|
(1
|
)
|
|
29
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Developed technology
|
2
|
|
|
—
|
|
|
2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Total intangible assets
|
$
|
882
|
|
|
$
|
(79
|
)
|
|
$
|
803
|
|
|
$
|
234
|
|
|
$
|
(55
|
)
|
|
$
|
179
|
|
Fiscal Year Ending
|
(in millions)
|
|
|
2020
|
$
|
94
|
|
2021
|
64
|
|
|
2022
|
64
|
|
|
2023
|
65
|
|
|
2024
|
63
|
|
|
Thereafter
|
453
|
|
|
Total
|
$
|
803
|
|
|
Depreciation or
amortization method
|
|
Estimated useful lives (in years)
|
|
February 1,
2019 |
|
|
February 2,
2018 |
|
||
|
|
|
|
|
(in millions)
|
||||||
Computer equipment
|
Straight-line or
declining balance |
|
3-10
|
|
$
|
90
|
|
|
$
|
75
|
|
Capitalized software and software licenses
|
Straight-line or
declining balance |
|
3-10
|
|
61
|
|
|
58
|
|
||
Leasehold improvements
|
Straight-line
|
|
Shorter of lease term or 10
|
|
81
|
|
|
53
|
|
||
Office furniture and fixtures
|
Straight-line or
declining balance |
|
3-10
|
|
19
|
|
|
11
|
|
||
Buildings and improvements
|
Straight-line
|
|
40
|
|
7
|
|
|
7
|
|
||
Construction in process
|
|
|
|
|
3
|
|
|
—
|
|
||
Land
|
|
|
|
|
1
|
|
|
—
|
|
||
Property, plant, and equipment
|
|
|
|
|
262
|
|
|
204
|
|
||
Accumulated depreciation and amortization
|
|
|
|
|
(159
|
)
|
|
(143
|
)
|
||
Property, plant, and equipment, net
|
|
|
|
|
$
|
103
|
|
|
$
|
61
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
||||||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|||
|
(in millions)
|
||||||||||
Stock-based compensation expense:
|
|
|
|
|
|
||||||
Stock options
|
$
|
3
|
|
|
$
|
3
|
|
|
$
|
4
|
|
Vesting stock awards
|
37
|
|
|
21
|
|
|
24
|
|
|||
Performance share awards
|
5
|
|
|
3
|
|
|
3
|
|
|||
Total stock-based compensation expense
|
$
|
45
|
|
|
$
|
27
|
|
|
$
|
31
|
|
Tax benefits recognized from stock-based compensation
|
$
|
20
|
|
|
$
|
32
|
|
|
$
|
12
|
|
|
Shares of stocks under stock options
|
|
|
Weighted average exercise price
|
|
|
Weighted average remaining contractual term
|
|
Aggregate intrinsic value
|
|
||
|
(in millions)
|
|
|
|
|
(in years)
|
|
(in millions)
|
|
|||
Outstanding at February 2, 2018
|
1.4
|
|
|
$
|
43.07
|
|
|
3.5
|
|
$
|
46
|
|
Options granted
|
0.1
|
|
|
85.62
|
|
|
|
|
|
|||
Options forfeited or expired
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options exercised
|
(0.4
|
)
|
|
32.78
|
|
|
|
|
|
|||
Outstanding at February 1, 2019
|
1.1
|
|
|
$
|
53.67
|
|
|
3.6
|
|
$
|
18
|
|
Options exercisable at February 1, 2019
|
0.8
|
|
|
$
|
45.78
|
|
|
2.8
|
|
$
|
17
|
|
Vested and expected to vest as of February 1, 2019
|
1.0
|
|
|
$
|
53.43
|
|
|
3.5
|
|
$
|
18
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
||||||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|||
|
(in millions)
|
||||||||||
Cash received from exercises of stock options
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Stock exchanged at fair value upon exercises of stock options
|
$
|
1
|
|
|
$
|
1
|
|
|
$
|
3
|
|
Tax benefits from exercises of stock options
|
$
|
7
|
|
|
$
|
8
|
|
|
$
|
8
|
|
Total intrinsic value of options exercised
|
$
|
24
|
|
|
$
|
22
|
|
|
$
|
21
|
|
|
Year Ended
|
||||||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|||
Weighted average grant-date fair value
|
$
|
19.48
|
|
|
$
|
16.34
|
|
|
$
|
10.20
|
|
Expected term (in years)
|
4.0
|
|
|
4.4
|
|
|
4.4
|
|
|||
Expected volatility
|
29.0
|
%
|
|
28.2
|
%
|
|
28.9
|
%
|
|||
Risk-free interest rate
|
2.5
|
%
|
|
1.7
|
%
|
|
1.2
|
%
|
|||
Dividend yield
|
1.6
|
%
|
|
1.5
|
%
|
|
2.7
|
%
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Shares of stock under stock awards
|
|
|
Weighted average grant date fair value
|
|
|
|
(in millions)
|
|||||
Unvested February 2, 2018
|
0.9
|
|
|
$
|
59.93
|
|
Awards granted
|
0.4
|
|
|
84.28
|
|
|
Awards assumed
|
0.6
|
|
|
65.03
|
|
|
Awards forfeited
|
(0.1
|
)
|
|
72.28
|
|
|
Awards vested
|
(0.8
|
)
|
|
60.36
|
|
|
Unvested February 1, 2019
|
1.0
|
|
|
$
|
70.76
|
|
|
Shares of stock under performance shares
|
|
|
Weighted average grant date fair value
|
|
|
|
(in millions)
|
|
|
|
||
Unvested performance shares at February 2, 2018
|
0.2
|
|
|
$
|
62.96
|
|
Performance shares granted
|
0.1
|
|
|
85.31
|
|
|
Performance shares forfeited
|
(0.1
|
)
|
|
64.62
|
|
|
Performance shares vested
|
(0.1
|
)
|
|
53.34
|
|
|
Performance shares adjustment
|
—
|
|
|
—
|
|
|
Unvested performance shares at February 1, 2019
|
0.1
|
|
|
$
|
79.12
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
February 1, 2019
|
||||||
|
Pension Plan
|
|
RHRA Benefit Plan
|
||||
|
(in millions)
|
||||||
Change in benefit obligation:
|
|
|
|
||||
Benefit obligation at acquisition
|
$
|
71
|
|
|
$
|
15
|
|
Benefit obligation at end of year
|
$
|
71
|
|
|
$
|
15
|
|
Change in plan assets:
|
|
|
|
||||
Fair value of plan assets at acquisition
|
49
|
|
|
—
|
|
||
Employer contributions
|
3
|
|
|
—
|
|
||
Fair value of plan assets at end of year
|
$
|
52
|
|
|
$
|
—
|
|
Unfunded status
|
$
|
19
|
|
|
$
|
15
|
|
|
February 1, 2019
|
||||||
|
Pension Plan
|
|
RHRA Benefit Plan
|
||||
|
(in millions)
|
||||||
Other accrued liabilities
|
$
|
—
|
|
|
$
|
1
|
|
Other long-term liabilities
|
19
|
|
|
14
|
|
||
Net amount recognized
|
$
|
19
|
|
|
$
|
15
|
|
|
February 1, 2019
|
||||
|
Pension Plan
|
|
RHRA Benefit Plan
|
||
Discount rate
|
4.06
|
%
|
|
3.82
|
%
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
February 1, 2019
|
||||||||||||||
Asset Category
|
Total
|
|
|
Quoted Prices in Active Markets for Identical Assets (Level 1)
|
|
|
Significant Other Observable Inputs (Level 2)
|
|
|
Significant Unobservable Inputs (Level 3)
|
|
||||
|
(in millions)
|
||||||||||||||
Mutual funds
|
$
|
49
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Guaranteed deposit account
|
3
|
|
|
—
|
|
|
—
|
|
|
3
|
|
||||
Total
|
$
|
52
|
|
|
$
|
49
|
|
|
$
|
—
|
|
|
$
|
3
|
|
Fiscal Year
|
Pension Plan
|
|
RHRA Benefit Plan
|
|
Total
|
|
|||||
|
(in millions)
|
||||||||||
2020
|
$
|
5
|
|
|
$
|
1
|
|
|
$
|
6
|
|
2021
|
5
|
|
|
1
|
|
|
6
|
|
|||
2022
|
5
|
|
|
1
|
|
|
6
|
|
|||
2023
|
5
|
|
|
1
|
|
|
6
|
|
|||
2024
|
5
|
|
|
2
|
|
|
7
|
|
|||
Five subsequent fiscal years
|
$
|
24
|
|
|
$
|
8
|
|
|
$
|
32
|
|
|
Year Ended
|
||||||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|||
|
(in millions)
|
||||||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
4
|
|
|
$
|
3
|
|
|
$
|
59
|
|
State
|
10
|
|
|
2
|
|
|
12
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
17
|
|
|
26
|
|
|
2
|
|
|||
State
|
2
|
|
|
4
|
|
|
(4
|
)
|
|||
Total
|
$
|
33
|
|
|
$
|
35
|
|
|
$
|
69
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Year Ended
|
||||||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|||
|
(in millions)
|
||||||||||
Statutory federal income tax rate
(1)
|
21.0
|
%
|
|
33.7
|
%
|
|
35.0
|
%
|
|||
Amount computed at the blended statutory federal income tax rate
|
$
|
36
|
|
|
$
|
72
|
|
|
$
|
74
|
|
State income taxes, net of federal tax benefit
|
9
|
|
|
8
|
|
|
6
|
|
|||
Research and development and other federal credits
|
(8
|
)
|
|
(4
|
)
|
|
(9
|
)
|
|||
Federal income tax reduction per the Tax Act
|
—
|
|
|
(17
|
)
|
|
—
|
|
|||
Manufacturer's deduction
|
—
|
|
|
(1
|
)
|
|
(2
|
)
|
|||
Non-deductible compensation
|
3
|
|
|
—
|
|
|
—
|
|
|||
Non-deductible acquisition costs
|
3
|
|
|
—
|
|
|
—
|
|
|||
Excess tax benefits for stock-based compensation
|
(9
|
)
|
|
(22
|
)
|
|
—
|
|
|||
Other
|
(1
|
)
|
|
(1
|
)
|
|
—
|
|
|||
Total
|
$
|
33
|
|
|
$
|
35
|
|
|
$
|
69
|
|
Effective income tax rate
|
19.4
|
%
|
|
16.5
|
%
|
|
32.7
|
%
|
(1)
|
The statutory federal income tax rate for fiscal 2018 is a blended rate due to the Tax Act. See Note 1.
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
February 1,
2019 |
|
|
February 2,
2018 |
|
||
|
(in millions)
|
||||||
Accrued vacation and bonuses
|
$
|
27
|
|
|
$
|
18
|
|
Accrued liabilities
|
13
|
|
|
3
|
|
||
Deferred compensation
|
22
|
|
|
14
|
|
||
Stock awards
|
11
|
|
|
9
|
|
||
Net operating loss and other carryforwards
|
138
|
|
|
12
|
|
||
Fixed asset basis differences
|
3
|
|
|
—
|
|
||
Accumulated other comprehensive loss
|
5
|
|
|
—
|
|
||
Valuation allowance
|
(5
|
)
|
|
(1
|
)
|
||
Total deferred tax assets
|
214
|
|
|
55
|
|
||
Deferred revenue
|
(1
|
)
|
|
(20
|
)
|
||
Fixed asset basis differences
|
—
|
|
|
(6
|
)
|
||
Purchased intangible assets
|
(159
|
)
|
|
(51
|
)
|
||
Accumulated other comprehensive income
|
—
|
|
|
(1
|
)
|
||
Total deferred tax liabilities
|
(160
|
)
|
|
(78
|
)
|
||
Net deferred tax assets (liabilities)
|
$
|
54
|
|
|
$
|
(23
|
)
|
|
Year Ended
|
||||||||||
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|
February 3,
2017 |
|
|||
|
(in millions)
|
||||||||||
Unrecognized tax benefits at beginning of the year
|
$
|
7
|
|
|
$
|
5
|
|
|
$
|
—
|
|
Additions for acquired unrecognized tax benefits
|
3
|
|
|
—
|
|
|
—
|
|
|||
Additions for tax positions related to prior years
|
1
|
|
|
1
|
|
|
2
|
|
|||
Additions for tax positions related to the current year
|
2
|
|
|
1
|
|
|
3
|
|
|||
Unrecognized tax benefits at end of the year
|
$
|
13
|
|
|
$
|
7
|
|
|
$
|
5
|
|
Unrecognized tax benefits that, if recognized, would affect the effective income tax rate
|
$
|
9
|
|
|
$
|
7
|
|
|
$
|
5
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
February 1, 2019
|
|
February 2, 2018
|
||||||||||||||||||||||||||
|
Stated interest rate
|
|
|
Effective interest rate
|
|
|
Principal
|
|
|
Unamortized Debt Issuance Costs
|
|
|
Net
|
|
|
Principal
|
|
|
Unamortized Debt Issuance Costs
|
|
|
Net
|
|
||||||
|
|
|
|
|
(in millions)
|
||||||||||||||||||||||||
Term Loan A Facility due October 2023
|
4.00
|
%
|
|
4.33
|
%
|
|
$
|
1,068
|
|
|
$
|
(14
|
)
|
|
$
|
1,054
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
Term Loan A Facility due August 2021
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
635
|
|
|
(2
|
)
|
|
633
|
|
||||||||
Term Loan B Facility due October 2025
|
4.25
|
%
|
|
4.46
|
%
|
|
1,047
|
|
|
(12
|
)
|
|
1,035
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Term Loan B Facility due May 2022
|
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
400
|
|
|
(9
|
)
|
|
391
|
|
||||||||
Total long-term debt
|
|
|
|
|
$
|
2,115
|
|
|
$
|
(26
|
)
|
|
$
|
2,089
|
|
|
$
|
1,035
|
|
|
$
|
(11
|
)
|
|
$
|
1,024
|
|
||
Less current portion
|
|
|
|
|
24
|
|
|
—
|
|
|
24
|
|
|
41
|
|
|
—
|
|
|
41
|
|
||||||||
Total long-term debt, net of current portion
|
|
|
|
|
$
|
2,091
|
|
|
$
|
(26
|
)
|
|
$
|
2,065
|
|
|
$
|
994
|
|
|
$
|
(11
|
)
|
|
$
|
983
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
Fiscal Year Ending
|
Total
|
|
|
|
(in millions)
|
|
|
2020
|
$
|
24
|
|
2021
|
70
|
|
|
2022
|
68
|
|
|
2023
|
147
|
|
|
2024
|
811
|
|
|
Thereafter
|
995
|
|
|
Total principal payments
|
$
|
2,115
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
|
|
|
|
|
|
|
|
Asset (Liability) Fair Value
(1)
at
|
|||||||||
|
Notional Amount at February 1, 2019
|
|
|
Pay Fixed Rate
|
|
|
Receive Variable Rate
|
|
Settlement and Termination
|
|
February 1,
2019 |
|
|
February 2,
2018 |
|
|||
|
(in millions)
|
|
|
|
|
|
|
|
(in millions)
|
|||||||||
Interest rate swaps #1
|
$
|
—
|
|
|
1.41
|
%
|
|
1-month LIBOR
|
|
Monthly through September 26, 2018
|
|
$
|
—
|
|
|
$
|
1
|
|
Interest rate swaps #2
(2)
|
—
|
|
|
1.88
|
%
|
|
3-month LIBOR
(3)
|
|
Quarterly through May 7, 2020
(2)
|
|
—
|
|
|
4
|
|
|||
Interest rate swaps #3
(4)
|
353
|
|
|
2.78
|
%
|
|
1-month LIBOR
|
|
Monthly through July 30, 2021
|
|
(2
|
)
|
|
—
|
|
|||
Interest rate swaps #4
(5)
|
500
|
|
|
3.07
|
%
|
|
1-month LIBOR
|
|
Monthly through October 31, 2025
|
|
(21
|
)
|
|
—
|
|
|||
Interest rate swaps #5
(6)
|
500
|
|
|
2.49
|
%
|
|
1-month LIBOR
|
|
Monthly through October 31, 2023
|
|
(1
|
)
|
|
—
|
|
|||
Total
|
$
|
1,353
|
|
|
|
|
|
|
|
|
$
|
(24
|
)
|
|
$
|
5
|
|
(1)
|
The fair value of the fixed interest rate swaps asset is included in other assets on the consolidated balance sheets. The fair value of the fixed interest rate swaps liability is included in other accrued liabilities on the consolidated balance sheets.
|
(2)
|
On October 31, 2018, the Company exited its Term loan interest rate swaps #2 and discontinued hedge accounting. The Company received cash proceeds of
$6 million
upon the early settlement. The
$6 million
of deferred gains in accumulated other comprehensive loss will be reclassified into interest expense over the original contractual term of the interest rate swaps, which has a maturity date of May 7, 2020.
|
(3)
|
Subject to a
0.75%
floor.
|
(4)
|
On June 12, 2018, the Company executed forward-starting fixed interest rate swaps that hedge the variability in interest payments on an initial aggregate notional amount of
$365 million
of floating rate debt. The tenor of these swaps began on September 26, 2018. The Company has designated, and will account for, these fixed interest rate swaps as cash flow hedges.
|
(5)
|
On October 31, 2018, the Company executed fixed interest rate swaps that hedge the variability in interest payments on an initial aggregate notional amount of
$500 million
of floating rate debt. The Company has designated, and will account for, these fixed interest rate swaps as cash flow hedges.
|
(6)
|
On January 14, 2019, the Company executed forward-starting fixed interest rate swaps that hedge the variability in interest payments on an initial aggregate notional amount of
$500 million
of floating rate debt. The tenor of these swaps began on January 31, 2019. The Company has designated, and will account for, these fixed interest rate swaps as cash flow hedges.
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
Pre-Tax Amount
|
||
|
Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges
(1)
|
|
|
|
(in millions)
|
||
Balance at January 29, 2016
|
$
|
(14
|
)
|
Other comprehensive income before reclassifications
|
3
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
8
|
|
|
Net other comprehensive income
|
11
|
|
|
Balance at February 3, 2017
|
$
|
(3
|
)
|
Other comprehensive income before reclassifications
|
5
|
|
|
Amounts reclassified from accumulated other comprehensive loss
|
3
|
|
|
Net other comprehensive income
|
8
|
|
|
Balance at February 2, 2018
|
$
|
5
|
|
Other comprehensive loss before reclassifications
|
(23
|
)
|
|
Amounts reclassified from accumulated other comprehensive loss
|
(1
|
)
|
|
Net other comprehensive loss
|
(24
|
)
|
|
Balance at February 1, 2019
|
$
|
(19
|
)
|
(1)
|
The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense.
|
Fiscal Year Ending
|
(in millions)
|
|
|
2020
|
$
|
55
|
|
2021
|
42
|
|
|
2022
|
36
|
|
|
2023
|
19
|
|
|
2024
|
16
|
|
|
Thereafter
|
43
|
|
|
Total
|
$
|
211
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
|
|
First
Quarter
|
|
|
Second
Quarter
|
|
|
Third
Quarter
|
|
|
Fourth
Quarter
|
|
||||
|
(in millions, except per share amounts)
|
||||||||||||||
Fiscal 2019
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
1,175
|
|
|
$
|
1,115
|
|
|
$
|
1,177
|
|
|
$
|
1,192
|
|
Operating income
|
66
|
|
|
74
|
|
|
73
|
|
|
7
|
|
||||
Net income (loss)
|
49
|
|
|
49
|
|
|
48
|
|
|
(9
|
)
|
||||
Basic EPS
|
$
|
1.16
|
|
|
$
|
1.15
|
|
|
$
|
1.13
|
|
|
$
|
(0.20
|
)
|
Diluted EPS
|
$
|
1.13
|
|
|
$
|
1.13
|
|
|
$
|
1.11
|
|
|
$
|
(0.20
|
)
|
Fiscal 2018
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
1,103
|
|
|
$
|
1,078
|
|
|
$
|
1,145
|
|
|
$
|
1,128
|
|
Operating income
|
63
|
|
|
59
|
|
|
72
|
|
|
62
|
|
||||
Net income
|
49
|
|
|
36
|
|
|
43
|
|
|
51
|
|
||||
Basic EPS
|
$
|
1.12
|
|
|
$
|
0.83
|
|
|
$
|
0.99
|
|
|
$
|
1.19
|
|
Diluted EPS
|
$
|
1.08
|
|
|
$
|
0.80
|
|
|
$
|
0.98
|
|
|
$
|
1.16
|
|
Exhibit
Number
|
Description of Exhibit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
EXHIBIT INDEX
|
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
EXHIBIT INDEX
|
Exhibit
Number
|
Description of Exhibit
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101
|
Interactive Data File.
|
*
|
Compensation Plans and Arrangements
|
Subsidiaries of Registrant
|
|
Jurisdiction of Incorporation or Organization
|
|
SAIC International Holdings, Inc.
|
|
Delaware
|
|
SAIC Gemini Huntsville, LLC
|
|
Delaware
|
|
Odyssey Drive I, Ltd.
|
|
California
|
|
Engility Holdings, Inc.
|
|
Delaware
|
|
Engility Corporation
|
|
Massachusetts
|
|
Engility LLC
|
|
Delaware
|
|
Forfeiture Support Associates, LLC
|
|
Delaware
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Registration Statement (Form S-8 No. 333-191436)
|
(2)
|
Registration Statement (Form S-8 No. 333-203222)
|
(3)
|
Registration Statement (Form S-8 No. 333-229254)
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
February 1, 2019
of Science Applications International Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Anthony J. Moraco
|
Anthony J. Moraco
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K for the period ended
February 1, 2019
of Science Applications International Corporation;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
/s/ Charles A. Mathis
|
Charles A. Mathis
|
Chief Financial Officer
|
/s/ Anthony J. Moraco
|
Anthony J. Moraco
Chief Executive Officer
|
/s/ Charles A. Mathis
|
|
Charles A. Mathis
|
Chief Financial Officer
|