Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Feb. 01, 2019 | Mar. 08, 2019 | Aug. 03, 2018 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Feb. 1, 2019 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | SAIC | ||
Entity Registrant Name | Science Applications International Corporation | ||
Entity Central Index Key | 0001571123 | ||
Current Fiscal Year End Date | --02-01 | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Small Business | false | ||
Entity Common Stock, Shares Outstanding (in shares) | 59,320,566 | ||
Entity Public Float | $ 3.4 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Revenues | $ 4,659,000,000 | $ 4,454,000,000 | $ 4,442,000,000 |
Cost of revenues | 4,195,000,000 | 4,043,000,000 | 4,003,000,000 |
Selling, general and administrative expenses | 158,000,000 | 155,000,000 | 166,000,000 |
Acquisition and integration costs (Note 4) | 86,000,000 | 0 | 10,000,000 |
Operating income | 220,000,000 | 256,000,000 | 263,000,000 |
Interest expense | 53,000,000 | 44,000,000 | 52,000,000 |
Other (income) expense, net | (3,000,000) | (2,000,000) | (1,000,000) |
Income before income taxes | 170,000,000 | 214,000,000 | 212,000,000 |
Provision for income taxes (Note 9) | (33,000,000) | (35,000,000) | (69,000,000) |
Net income | 137,000,000 | 179,000,000 | 143,000,000 |
Net income attributable to non-controlling interest | 0 | 0 | 0 |
Net income attributable to common stockholders | $ 137,000,000 | $ 179,000,000 | $ 143,000,000 |
Earnings per share (Note 2): | |||
Basic (in dollars per share) | $ 3.16 | $ 4.13 | $ 3.21 |
Diluted (in dollars per share) | $ 3.11 | $ 4.02 | $ 3.12 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
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 | 0 | 0 | 0 |
Comprehensive income attributable to common stockholders | $ 119 | $ 184 | $ 150 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Statement of Comprehensive Income [Abstract] | |||
Unrealized (loss) gain on derivative instruments, tax benefit (expense) | $ 6 | $ (2) | $ (1) |
Reclassification adjustment for (benefits) costs realized in net income, tax expense (benefit) | $ 0 | $ (1) | $ (3) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 |
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 |
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 | 0 | 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 | 0 | 0 |
Additional paid-in capital | 1,132 | 0 |
Retained earnings | 367 | 323 |
Accumulated other comprehensive (loss) income | (14) | 4 |
Total common stockholders' equity | 1,485 | 327 |
Non-controlling interest | 14 | 0 |
Total stockholders' equity | 1,499 | 327 |
Total liabilities and stockholders' equity | $ 4,563 | $ 2,073 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Feb. 01, 2019 | Feb. 02, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 60,000,000 | 43,000,000 |
Common stock, shares outstanding (in shares) | 60,000,000 | 43,000,000 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) shares in Millions, $ in Millions | Total | Shares of common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Non-Controlling Interest |
Balance, (in shares) at Jan. 29, 2016 | 45 | |||||
Balance, beginning of period at Jan. 29, 2016 | $ 380 | $ 215 | $ 174 | $ (9) | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 143 | 143 | ||||
Issuances of stock, (in shares) | 1 | |||||
Issuances of stock | 8 | 8 | ||||
Other comprehensive income, net of tax | 7 | 7 | ||||
Cash dividends | (57) | (57) | ||||
Stock-based compensation | 6 | 6 | ||||
Income tax benefits from stock-based compensation | 18 | 18 | ||||
Repurchases of stock, (in shares) | (2) | |||||
Repurchases of stock | (156) | (156) | ||||
Balance, (in shares) at Feb. 03, 2017 | 44 | |||||
Balance, end of period at Feb. 03, 2017 | 349 | 91 | 260 | (2) | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 179 | 179 | ||||
Issuances of stock, (in shares) | 1 | |||||
Issuances of stock | 8 | 8 | ||||
Reclassification of AOCI due to the Tax Act | 0 | (1) | 1 | |||
Other comprehensive income, net of tax | 5 | 5 | ||||
Cash dividends | (55) | (55) | ||||
Stock-based compensation | (4) | (4) | ||||
Repurchases of stock, (in shares) | (2) | |||||
Repurchases of stock | $ (155) | (95) | (60) | |||
Balance, (in shares) at Feb. 02, 2018 | 43 | 43 | ||||
Balance, end of period at Feb. 02, 2018 | $ 327 | 0 | 323 | 4 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 137 | 137 | ||||
Issuances of stock, (in shares) | 1 | |||||
Issuances of stock | 7 | 7 | ||||
Other comprehensive income, net of tax | (18) | (18) | ||||
Cash dividends | (54) | (54) | ||||
Stock-based compensation | 43 | 52 | (9) | |||
Repurchases of stock, (in shares) | (1) | |||||
Repurchases of stock | (44) | (11) | (33) | |||
Stock issued for the Engility acquisition (in shares) | 17 | |||||
Stock issued for the Engility acquisition | 1,084 | 1,084 | ||||
Acquired non-controlling interest | 13 | 13 | ||||
Contribution from non-controlling interest | $ 1 | 1 | ||||
Balance, (in shares) at Feb. 01, 2019 | 60 | 60 | ||||
Balance, end of period at Feb. 01, 2019 | $ 1,499 | $ 1,132 | $ 367 | $ (14) | $ 14 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends paid per share (in dollars per share) | $ 1.24 | $ 1.24 | $ 1.24 |
Cash dividends declared per share (in dollars per share) | $ 1.24 | $ 1.24 | $ 1.24 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 137 | $ 179 | $ 143 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 49 | 46 | 53 |
Deferred income taxes | 19 | 13 | (2) |
Stock-based compensation expense | 45 | 27 | 31 |
Excess tax benefits from stock-based compensation | 0 | 0 | (18) |
Loss on disposal of property, plant, and equipment | 0 | 0 | 1 |
Loss on extinguishment of debt | 4 | 0 | 2 |
Provisions for inventory and deferred contract costs | 36 | 0 | 0 |
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of the acquisition: | |||
Receivables | (26) | (135) | 96 |
Inventory, prepaid expenses, and other current assets | (26) | 19 | (36) |
Other assets | (12) | 2 | 0 |
Accounts payable and accrued liabilities | (65) | 68 | 24 |
Accrued payroll and employee benefits | 22 | (8) | (26) |
Other long-term liabilities | 1 | 6 | 5 |
Net cash provided by operating activities | 184 | 217 | 273 |
Cash flows from investing activities: | |||
Expenditures for property, plant, and equipment | (28) | (22) | (15) |
Other | 1 | 0 | (2) |
Cash paid for acquisition, net of cash acquired | (1,001) | 0 | 0 |
Net cash used in investing activities | (1,028) | (22) | (17) |
Cash flows from financing activities: | |||
Dividend payments to stockholders | (53) | (54) | (54) |
Principal payments on borrowings | (779) | (50) | (236) |
Issuances of stock | 7 | 6 | 5 |
Stock repurchased and retired or withheld for taxes on equity awards | (69) | (186) | (180) |
Excess tax benefits from stock-based compensation | 0 | 0 | 18 |
Disbursements for obligations assumed from Scitor acquisition | 0 | (2) | (7) |
Proceeds from borrowings | 1,859 | 25 | 209 |
Debt issuance costs | (26) | 0 | (2) |
Equity issuance costs | (2) | 0 | 0 |
Contributions from non-controlling interest | 1 | 0 | 0 |
Net cash provided by (used in) financing activities | 938 | (261) | (247) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 94 | (66) | 9 |
Cash, cash equivalents and restricted cash at beginning of period | 152 | 218 | 209 |
Cash, cash equivalents and restricted cash at end of period (Note 1) | 246 | 152 | 218 |
Supplementary cash flow disclosure: | |||
Cash paid for interest | 44 | 41 | 48 |
Cash paid for income taxes | 24 | 31 | 46 |
Non-cash investing and financing activities: | |||
Increase (decrease) in accrued plan share repurchases | 0 | (1) | 0 |
(Decrease) increase in accrued plant, property, and equipment | (3) | 2 | (1) |
Fair value of equity consideration paid for acquisition | $ 1,108 | $ 0 | $ 0 |
Business Overview and Summary o
Business Overview and Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 01, 2019 | |
Accounting Policies [Abstract] | |
Business Overview and Summary of Significant Accounting Policies | Business Overview and Summary of Significant Accounting Policies: Overview Description of Business. Science Applications International Corporation (collectively, with its consolidated subsidiaries, the “Company”) is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S. government. The Company provides engineering and integration services for large, complex projects and offers a broad range of services with a targeted emphasis on higher-end, differentiated technology services. The Company is organized as a matrix comprised of three customer facing operating segments supported by a solutions and technology group. Each of the Company’s three customer facing operating segments is focused on providing the Company’s comprehensive technical, engineering and enterprise IT service offerings to one or more agencies of the U.S federal government. The Company's operating segments are aggregated into one reportable segment for financial reporting purposes, see Note 14 . Acquisitions. On January 14, 2019, we completed the acquisition of Engility Holdings, Inc. (collectively with its consolidated subsidiaries, "Engility"), which provides increased customer and market access, as well as increased scale in strategic business areas of national interest, such as defense, federal civilian agencies, intelligence and space. On May 4, 2015, the Company acquired 100% of privately held Scitor Holdings, Inc. ("Scitor"), a leading global provider of technical services to the U.S. intelligence community and other U.S. government customers. Separation from Former Parent. The Company commenced its operations on September 27, 2013 (the Distribution Date) following completion of a tax-free spin-off transaction from its former parent company, Leidos Holdings, Inc. (formerly SAIC, Inc., collectively with its consolidated subsidiaries, “former Parent”). In the spin-off transaction, former Parent’s technical, engineering and enterprise IT services business was separated (the separation) into an independent, publicly traded company named Science Applications International Corporation (formerly SAIC Gemini, Inc.). Principles of Consolidation and Basis of Presentation References to “financial statements” refer to the consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. Non-controlling Interest. As a result of the acquisition of Engility, the Company holds a 50.1% majority interest in Forfeiture Support Associates J.V. (FSA). The results of operations of FSA are included in the Company's consolidated statements of operations. The non-controlling interest reported on the consolidated balance sheets represents the portion of FSA’s equity that is attributable to the non-controlling interest. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates. Restructuring During fiscal 2018, the Company initiated restructuring activities (the "Restructuring") intended to improve operational efficiency, reduce costs, and better position the Company to drive future growth. The restructuring activities consisted of involuntary and voluntary terminations and the consolidation of existing leased facilities. The Company completed the Restructuring in fiscal 2018 with total restructuring costs of approximately $13 million , comprised of $6 million for employee severance and $7 million of lease exit costs. For fiscal year 2018, $6 million of restructuring costs are included in cost of revenues and $7 million in selling, general and administrative expenses in the consolidated statements of income. The Company made cash payments of $5 million and $1 million during fiscal 2018 and fiscal 2019, respectively, for severance associated with the Restructuring. The liability associated with lease exit costs will be substantially settled by the end of fiscal 2021. Reporting Periods The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2017 began on January 30, 2016 and ended on February 3, 2017 , fiscal 2018 began on February 4, 2017 and ended on February 2, 2018 , and fiscal 2019 began on February 3, 2018 and ended on February 1, 2019 . The number of weeks for each quarter for fiscal 2019 , 2018 and 2017 are as follows: 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 Stock-based Compensation The Company issues stock-based awards as compensation to employees and directors. Stock-based awards include stock options, vesting stock awards and performance share awards. These awards are accounted for as equity awards. The Company recognizes stock-based compensation expense net of estimated forfeitures on a straight-line basis over the underlying award’s requisite service period, as measured using the award’s grant date fair value. For performance share awards, the Company reassesses the probability of achieving the performance conditions at each reporting period end and adjusts compensation expense based on the number of shares the Company expects to ultimately issue. Income Taxes The Company accounts for income taxes under the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The provision for federal, state, local and foreign income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. Recording the provision for income taxes requires management to make significant judgments and estimates for matters for which the ultimate resolution may not become known until the final resolution of an examination by taxing authorities or the statute of limitations lapses. Additionally, recording liabilities for uncertainty in income taxes involves significant judgment in evaluating the Company’s tax positions and developing the best estimate of the taxes ultimately expected to be paid. Tax penalties and interest are included in income tax expense. The Company records net deferred tax assets to the extent these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. If it is determined that the Company would be able to realize the deferred income tax assets in the future in excess of their net recorded amount or would no longer be able to realize the deferred income tax assets in the future as currently recorded, an adjustment would be made to the valuation allowance which would decrease or increase the provision for income taxes. The Company has also recognized liabilities for uncertainty in income taxes when it is more likely than not that a tax position will not be sustained on examination and settlement with various taxing authorities. Liabilities for uncertainty in income taxes are measured based on the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Deferred tax assets and liabilities are netted by taxable jurisdiction and classified as noncurrent on the consolidated balance sheets. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017, which amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Tax Act reduces the corporate federal tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The rate change is administratively effective at the beginning of our fiscal year 2018, using a blended rate for the fiscal 2018 annual period. As a result, the Company's blended federal statutory tax rate for fiscal year 2018 was 33.7% . The Company has a statutory rate of 21% for fiscal year 2019 and all future periods. The SEC staff issued Staff Accounting Bulletin No 118 (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The final amount recorded related to the re-measurement of the Company's net deferred tax liabilities was a $19 million discrete net tax benefit. A net benefit for the corporate rate reduction of $17 million was recognized in income tax expense for fiscal 2018, and an additional $2 million benefit was recognized in income tax expense for fiscal 2019. This rate reduction resulted in a corresponding net decrease of deferred tax liabilities. As of February 1, 2019, we have completed our accounting for the tax effects of enactment of the Tax Act. Prior to February 1, 2019, there were two areas still under review including: (1) the expensing of qualified assets and (2) the limitation on the deductibility of certain executive compensation. No material measurement period adjustments were required as a result of this review. Costs Allocated to Contracts The Company classifies indirect costs as overhead (included in cost of revenues) or general and administrative expenses in the same manner as such costs are defined in the Company’s Disclosure Statements under U.S. government Cost Accounting Standards (CAS). Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents are comprised of cash in banks and highly liquid instruments, which primarily consist of bank deposits and investments in institutional money market funds. The Company includes outstanding payments within cash and cash equivalents and accounts payable on the consolidated balance sheets and as of February 1, 2019 and February 2, 2018 these amounts were $47 million and $31 million , respectively. The Company does not invest in high yield or high risk securities. The cash in bank accounts at times may exceed federally insured limits. Restricted cash consists of cash on deposit in rabbi trusts that are contractually restricted from use in operations, but are subject to future claims of creditors. Restricted cash will be used to fund future payments to settle the Company's obligations related to deferred compensation plans. The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets for the periods presented: 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 Receivables Receivables include billed and billable receivables, and unbilled receivables. The Company’s receivables are primarily due from the U.S. government, or from prime contractors on which we are subcontractors and the end customer is the U.S. government, and are generally considered collectable from the perspective of the customer’s ability to pay. The Company does not have a material credit risk exposure. Unbilled receivables, substantially all of which are expected to be billed and collected within one year , are stated at their estimated realizable value and consist of costs and fees billable on contract completion or the occurrence of a specified event, other than the passage of time. Legal title to the related accumulated costs of contracts in progress generally vests with the U.S. government on the Company’s receipt of progress payments. Progress payments received of $26 million and $20 million offset unbilled receivables as of February 1, 2019 and February 2, 2018 , respectively. Contract retentions are billed when contract conditions have been met and may relate to uncompleted indirect cost negotiations with the U.S. government. Based on historical experience, the majority of retention balances are expected to be collected beyond one year. In fiscal 2018 retention of $11 million was presented within receivables, net on the consolidated balance sheet. With the modified retrospective method of adoption of ASC 606 in fiscal 2019, retention is now presented as a non-current asset in other assets on the consolidated balance sheet, see Note 3 . Write-offs of retention balances have not been significant. The Company establishes an allowance for doubtful accounts based on the latest information available to determine whether outstanding invoices are ultimately collectable. The Company determines its allowance for doubtful accounts by analyzing individual receivables, historical bad debts, and, for non-U.S. government customers, customer creditworthiness. Receivable balances are written off in the period during which management determines they are uncollectable, and, at that time, such balances are removed from billed receivables and, if previously reserved, from the allowance for doubtful accounts. Inventory Inventory is substantially comprised of finished goods inventory purchased for resale to customers, such as tires and lubricants, and is valued at the lower of cost or net realizable value, generally using the average method. The Company evaluates current inventory against historical and planned usage to estimate the appropriate provision for obsolete inventory. The Company recognized a $26 million provision for inventory within cost of revenues during fiscal 2019 related to firm purchase commitments on a firm-fixed price program. Business Combinations The Company records all tangible and intangible assets acquired and liabilities assumed in a business combination at fair value as of the acquisition date, which is determined using a cost, market or income approach. The excess amount of the aggregated purchase consideration paid over the fair value of the net of assets acquired and liabilities assumed is recorded as goodwill. Acquisition date fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as measured on the acquisition date. The valuations are based on information that existed as of the acquisition date. During the measurement period that shall not exceed one year from the acquisition date, the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information that the Company has subsequently obtained regarding facts and circumstances that existed as of the acquisition date. Acquisition-related costs that are not part of the purchase price consideration are expensed as incurred. These costs typically include transaction-related costs, such as finder’s fees, and legal, accounting and other professional costs. Goodwill and Intangible Assets Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill and indefinite-lived intangible assets are not amortized, but rather are tested for potential impairment annually at the beginning of the fourth quarter, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. There were no impairments during the periods presented. The goodwill impairment test is performed at the reporting unit level. The Company estimates and compares the fair value of each reporting unit to its respective carrying value including goodwill. The fair value of the Company’s reporting units are determined using either a market approach, income approach, or a combination of both, which involves the use of estimates and assumptions, including projected future operating results and cash flows, the cost of capital, and financial measures derived from observable market data of comparable public companies. If the fair value is less than the carrying value, the amount of impairment expense is equal to the difference between the reporting unit’s fair value and the reporting unit’s carrying value. Intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Impairment of Long-lived Assets The Company evaluates its long-lived assets for potential impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable and the carrying amount of the asset exceeds its estimated future undiscounted cash flows. When the carrying amount of the asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized to reduce the asset’s carrying amount to its estimated fair value based on the present value of its estimated future cash flows. Commitments and Contingencies Accruals for commitments and loss contingencies are recorded when it is both probable that they will occur and the amounts can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount of loss. The Company reviews these accruals quarterly and adjusts the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information. Pension and Defined Benefit Plans The Company measures plan assets and benefit obligations as of the month-end that is closest to its fiscal year-end. Accounting and reporting for the Company's pension and defined benefit plans requires the use of assumptions, including but not limited to, a discount rate and an expected return on assets. These assumptions are reviewed at least annually based on reviews of current plan information and consultation with the Company's independent actuary and the plans’ investment advisor. If these assumptions differ materially from actual results, the Company's obligations under the pension and defined benefit plans could also differ materially, potentially requiring the Company to record an additional liability. The Company's pension and defined benefit plan liabilities are developed from actuarial valuations, which are performed each year. Fair Value Measurements The Company utilizes fair value measurement guidance prescribed by GAAP to value its financial instruments. The accounting standard for fair value measurements establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: observable inputs such as quoted prices in active markets (Level 1); inputs other than the quoted prices in active markets that are observable either directly or indirectly (Level 2); and unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions (Level 3). The carrying amounts of cash and cash equivalents, receivables, accounts payable and other amounts included in other current assets and current liabilities that meet the definition of a financial instrument approximate fair value because of the short-term nature of these amounts. The carrying value of the Company’s outstanding debt obligations approximates its fair value. The fair value of long-term debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. Non-financial instruments were measured at fair value in connection with the acquisition of Engility, see Note 4. The fair values of the assets acquired and liabilities assumed were preliminarily determined using income, market and cost valuation methodologies. The fair value measurements were estimated using significant inputs that are not observable in the market and thus represent a Level 3 measurement. Derivative Instruments Designated as Cash Flow Hedges Derivative instruments are recorded on the consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. The ineffective portion of all hedges, if any, is recognized immediately in earnings. The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party or canceled. See Note 11 for further discussion on the Company’s derivative instruments designated as cash flow hedges. Operating Cycle The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts. Research and Development The Company conducts research and development activities under customer-funded contracts and with company-funded independent research and development (IR&D) funds. IR&D efforts consist of projects involving basic research, applied research, development, and systems and other concept formulation studies. Company-funded IR&D expense is included in selling, general and administrative expenses and was $5 million , $4 million and $4 million in fiscal 2019 , 2018 and 2017 , respectively. Customer-funded research and development activities performed under customer contracts are charged directly to cost of revenues for those particular contracts. Accounting Standards Updates In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements and some cost guidance included in the Accounting Standards Codification (ASC). This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The Company adopted the standard on February 3, 2018, using the modified retrospective method. Under this method, the Company recognized the cumulative effect of adoption as an adjustment to its opening balance of retained earnings on February 3, 2018. In determining the cumulative impact of the adoption the Company applied the provisions of ASC 606 only to contracts that had not yet been completed at the date of adoption. Prior periods were not retrospectively adjusted, but the Company has maintained dual reporting for the year of initial application, disclosing the effect of adoption. Under the new standard, the Company continues to recognize revenue over time as services are rendered to fulfill its contractual obligations; however, the Company generally accounts for customer option period exercises (renewals) and service contract modifications prospectively, instead of as a cumulative adjustment to revenue under a single unit of accounting. Also, under the new standard, award and incentive-based fees generally are recognized during the discrete periods of performance to which they relate as opposed to on a cumulative basis over the contract period. The net impact to opening retained earnings from these changes as a result of the adoption was $3 million . The Company no longer defers the recognition of revenues and costs associated with significant upfront material acquisitions on programs previously accounted for using the efforts-expended method of percentage of completion. Under the new standard, the Company recognizes revenue on an adjusted cost-to-cost basis, where the amount of revenue that is recognized is equal to the amount of costs incurred plus profit based on the adjusted cost input measure of progress. This change resulted in a $15 million reduction in other current assets and other accrued liabilities on February 3, 2018, but had no impact on the adjustment to opening retained earnings. The cumulative effect of adopting ASC 606 on the Company's opening balance sheet is as follows: 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 The amounts by which the Company’s financial statements were impacted by the adoption of ASC 606, as compared to the guidance in effect before the change, as of and for the twelve months ended February 1, 2019 were as follows: 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 These impacts were primarily attributable to the change in accounting for programs previously accounted for using the efforts-expended method of percentage of completion. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedge Activities , which simplifies the application of hedge accounting and eliminates the requirement to separately measure and report hedge ineffectiveness. The Company early adopted the provisions of the standard in the first quarter of fiscal 2019. Adoption did not have a material impact on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) , which supersedes the existing lease accounting standards ( Topic 840 ). Under the new guidance, a lessee will be required to recognize lease assets and lease liabilities for all leases with lease terms in excess of twelve months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as either a finance lease or operating lease. The criteria for distinction between a finance lease and an operating lease are substantially similar to existing lease guidance for capital leases and operating leases. Some changes to lessor accounting have been made to conform and align that guidance with the lessee guidance and other areas within GAAP, such as Revenue from Contracts with Customers (Topic 606) . In July 2018, the FASB provided an optional transition method of adoption, permitting entities to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as opposed to the beginning of the earliest period presented in the financial statements. ASU 2016-2 becomes effective for the Company in the first quarter of fiscal 2020. The Company will adopt using the optional transition method. The Company is implementing new lease accounting software and is designing new processes and internal controls. The Company continues to evaluate the standard, but has not quantified the impact of adoption on its financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , which provides amendments to simplify several aspects of the accounting for share-based payment transactions. Among other requirements in the new standard, the ASU requires that an entity- (i) recognize excess tax benefits and deficiencies related to employee share-based payment transactions in the provision for income taxes, instead of in equity; (ii) classify excess tax benefits as an operating activity on the statement of cash flows, instead of the previous classification as a financing activity; (iii) classify all cash payments made to taxing authorities on the employees’ behalf for withheld shares as financing activities on the statement of cash flows; and (iv) make a policy election either to estimate expected forfeitures or to account for them as they occur. The Company adopted the ASU prospectively in the first quarter of fiscal 2018. As a result, for the year ended February 2, 2018, the Company recognized a $22 million tax benefit, which is included in the provision for income taxes on the consolidated statements of income and comprehensive income and as an operating activity in the consolidated statement of cash flows. The amendments were applied prospectively and therefore, prior periods have not been adjusted and there was no impact to beginning retained earnings. The Company will continue to classify cash paid for tax withholding purposes as a financing activity in the statement of cash flows and to estimate forfeitures rather than account for them as they occur. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company early adopted this new standard during the first quarter of fiscal 2018, which resulted in a $6 million increase to net cash used in investing activities for the year ended February 3, 2017. A reconciliation of cash, cash equivalents and restricted cash for each period presented is provided above under the heading “Cash, Cash Equivalents and Restricted Cash.” In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220), which allows a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for the deferred taxes previously recorded in AOCI that exceed the current federal tax rate of 21% resulting from the newly enacted corporate tax rate resulting from t |
Earnings Per Share, Share Repur
Earnings Per Share, Share Repurchases and Dividends | 12 Months Ended |
Feb. 01, 2019 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Share Repurchases and Dividends | Earnings Per Share, Share Repurchases and Dividends: Earnings per Share (EPS) Basic EPS is computed by dividing net income by the basic weighted average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards. A reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS was: Year Ended February 1, February 2, February 3, (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 The following stock-based awards were excluded from the weighted average number of shares outstanding used to compute diluted EPS: Year Ended February 1, February 2, February 3, (in millions) Antidilutive stock options excluded 0.2 0.2 0.2 Share Repurchases The Company may repurchase shares in accordance with established repurchase plans. The Company retires its common stock upon repurchase with the excess over par value allocated to additional paid-in capital. The Company has not made any material purchases of common stock other than in connection with established share repurchase plans. On December 15, 2016, the number of shares of our common stock that may be repurchased under our existing repurchase plan, previously announced in October 2013, was increased by approximately 3.3 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 11.8 million shares. As of February 1, 2019 , the Company has repurchased approximately 9.6 million shares of common stock under the plan. 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. Dividends The Company declared and paid quarterly dividends of $0.31 per share every quarter for the years presented. Total dividends declared and paid were $1.24 per share during each of fiscal year 2019 , 2018 and 2017 . On March 27, 2019 , the Company’s Board of Directors declared a cash dividend of $0.37 per share of the Company’s common stock payable on April 26, 2019 to stockholders of record on April 12, 2019 . |
Revenues
Revenues | 12 Months Ended |
Feb. 01, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues: Revenue Recognition The Company provides technical, engineering and enterprise IT services under long-term service arrangements primarily with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company also serves a number of state and local governments, foreign governments and U.S. commercial customers. The Company provides services under various contract types, including firm-fixed price (FFP), time-and-materials (T&M), cost-plus-fixed-fee, cost-plus-award-fee and cost-plus-incentive-fee contracts. Our service arrangements typically involve an annual base period of performance followed by renewal periods that are accounted for as separate contracts upon each exercise. The Company recognizes revenue when, or as, we satisfy our performance obligations under a contract. A performance obligation is the unit of account for revenue recognition and refers to a promise in a contract to transfer a distinct service or good to the customer. The majority of the Company’s contracts contain a single performance obligation involving a significant integration of various activities that are performed together to deliver a combined service or solution. Performance obligations may be satisfied over time or at a point in time, but the majority of the Company’s performance obligations are satisfied over time. The Company selects the appropriate measure of progress for revenue recognition based on the nature of the performance obligation, contract type and other pertinent contract terms. Over time performance obligations may involve a series of recurring services, such as network operations and maintenance, operation and program support services, IT outsourcing services, and other IT arrangements where the Company is standing ready to provide support, when-and-if needed. Such performance obligations are satisfied over time because the customer simultaneously receives and consumes the benefits of our performance as services are provided. Alternatively, over time performance obligations may involve the completion of a contract deliverable. Examples include systems integration, network engineering, network design, and engineering and build services. Deliverable-based performance obligations are satisfied over time when the Company’s performance creates or enhances an asset that is controlled by the customer, or when the Company’s performance creates an asset that is customized to the customer’s specifications and the Company has a right to payment, including profit, for work performed to date. For recurring services performance obligations, the Company measures progress using either a cost input measure (cost-to-cost), a time-elapsed output measure, or the as-invoiced practical expedient. A cost input measure typically is applied to the Company’s cost-reimbursable contracts. Revenue is recognized based on the ratio of costs incurred to total estimated costs at completion. Award or incentive fees are allocated to the distinct periods to which they relate. For fixed-price contracts, a time-elapsed output measure is applied to fixed consideration, such that revenue is recognized ratably over the period of performance. Where fixed-price contracts also provide for reimbursement of certain costs, such as travel or other direct costs, consideration may be attributed only to a distinct subset of time within the performance period. The Company’s time-and-material and fixed price-level of effort contracts generally qualify for the as-invoiced practical expedient. Revenue is recognized in the amount to which the Company has a contractual right to invoice. Contract modifications typically create new enforceable rights and obligations, which are accounted for prospectively. Changes to our estimates of the transaction price are recognized as a cumulative adjustment to revenue. For deliverable-based performance obligations satisfied over time, the Company recognizes revenue using a cost input measure of progress (cost-to-cost), regardless of contract type. Revenue is recognized based on the ratio of costs incurred to total estimated costs at completion, except for certain contracts for which the costs associated with significant materials or hardware procurements are excluded from the measure of progress and revenue is recognized on an adjusted cost-to-cost basis. Contract modifications typically change currently enforceable rights and obligations and are accounted for as a cumulative adjustment to revenue. Changes to our estimates of transaction price are recognized as a cumulative adjustment to revenue. For performance obligations in which the Company does not transfer control over time, we recognize revenue at the point-in-time when the customer obtains control of the related asset, usually at the time of shipment or upon delivery. The Company accrues for shipping and handling costs occurring after the point-in-time control transfers to the customer. Recognizing revenue on long-term contracts involves significant estimates and judgments. The transaction price is the estimated amount of consideration we expect to receive for performance under our contracts. Contract terms may include variable consideration, such as reimbursable costs, award and incentive fees, usage-based fees, service-level penalties, performance bonuses, or other provisions that can either increase or decrease the transaction price. Variable amounts generally are determined upon our achievement of certain performance metrics, program milestones or cost targets and may be based upon customer discretion. When making our estimates, the Company considers the customer, contract terms, the complexity of the work and related risks, the extent of customer discretion, historical experience and the potential of a significant reversal of revenue. The Company includes variable consideration in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimating costs at completion is complex due to the nature of the services being performed and the length of certain contracts. Contract costs generally include direct costs, such as labor, subcontract costs and materials, and indirect costs identifiable with or allocable to a specific contract. Management must make assumptions regarding the complexity of the work to be performed, the schedule and associated tasks, labor productivity and availability, increases in wages and prices of materials, execution by our subcontractors, overhead cost rates, and other variables. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by the Defense Contract Audit Agency ("DCAA"). Contract fulfillment costs are expensed as incurred except for certain costs incurred for transition, set-up or other fulfillment activities, which are capitalized and amortized on a straight-line basis over the expected period of benefit, which generally includes the base contract period of performance and anticipated renewal periods. The Company provides for anticipated losses on contracts with the U.S. government by recording an expense for the total expected loss during the period in which the losses are first determined. For contracts with multiple performance obligations, the Company allocates transaction price to each performance obligation based on the relative standalone selling price of each distinct performance obligation within the contract. Because the Company typically provides customized services and solutions that are specific to a single customer’s requirements, standalone selling price is most often estimated based on expected costs plus a reasonable profit margin. Changes in Estimates on Contracts Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss. Aggregate changes in these estimates recognized in operating income were: Year Ended February 1, February 2, February 3, (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 In addition, revenues were $8 million higher for the twelve months ended February 1, 2019 , due to net revenue recognized from performance obligations satisfied in prior periods. Disaggregation of Revenues The Company's revenues are generated primarily from long-term contracts with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company disaggregates revenues by customer, contract-type and prime vs. subcontractor to the federal government. Disaggregated revenues by customer was as follows: 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 Disaggregated revenues by contract-type was as follows: 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 Disaggregated revenues by prime vs. subcontractor was as follows: Year Ended February 1, 2019 (in millions) Prime contractor to federal government $ 4,178 Subcontractor to federal government 334 Other 147 Total $ 4,659 Contract Balances Timing of revenue recognition may differ from the timing of billing and cash receipts from customers. Amounts are invoiced as work progresses, typically biweekly or monthly in arrears, or upon achievement of contractual milestones. We record a contract asset when revenue is recognized prior to invoicing, or a contract liability when cash is received in advance of recognizing revenue. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets include unbillable receivables and contract retentions, but exclude billed and billable receivables. Billed and billable receivables are rights to consideration which are unconditional other than to the passage of time. Contract liabilities include customer advances, billings in excess of revenues and deferred revenue. Contract assets and liabilities are recorded net on a contract-by-contract basis and are generally classified as current based on our contract operating cycle. Deferred revenue attributable to long-term contract material renewal options may be classified as non-current when the option renewal period will not occur within one year of the balance sheet date. Contract balances for the periods presented were as follows: Balance Sheet line item February 1, February 3, 2018 (1) (in millions) Billed and billable receivables, net (2) Receivables, net $ 740 $ 515 Contract assets - unbillable receivables Receivables, net 310 158 Contract assets - contract retentions Other assets 13 11 Contract liabilities - current Other accrued liabilities 34 15 Contract liabilities - non-current Other long-term liabilities $ 6 $ 1 (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. The changes in the Company's contract assets and contract liabilities during the current period primarily results from the acquisition of Engility in fiscal 2019 and timing differences between the Company's performance, invoicing and customer payments. During the twelve months ended February 1, 2019 , the Company recognized revenues of $10 million relating to amounts that were included in the opening balance of contract liabilities as of February 3, 2018. Deferred Costs Certain eligible costs, typically incurred during the initial phases of our service contracts, are capitalized when the costs relate directly to the contract, are expected to be recovered, and generate or enhance resources to be used in satisfying the performance obligation. These costs primarily consist of transition and set-up costs. Capitalized fulfillment costs are amortized on a straight-line basis over the expected period of benefit, which generally includes the contract base period and anticipated renewals. The Company defers fulfillment costs incurred to transfer service to a customer prior to the establishment of a contract provided recovery is probable. These pre-contract costs are typically expensed upon contract award unless they are eligible for capitalization. The Company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. The carrying amount of the asset is compared to the remaining amount of consideration the Company expects to receive for the services to which the asset relates, less the costs that relate directly to providing those services that have not yet been recognized. If the carrying amount is not recoverable, an impairment loss is recognized. Deferred costs for the periods presented were as follows: Balance Sheet line item February 1, 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. Pre-contract costs of $15 million were expensed during the twelve months ended February 1, 2019 , which includes $10 million for a contract that was not awarded. Fulfillment costs of $5 million were amortized during the twelve months ended February 1, 2019 . Remaining Performance Obligations As of February 1, 2019 , the Company had $3.8 billion of remaining performance obligations. Remaining performance obligations exclude any variable consideration that is allocated entirely to unsatisfied performance obligations on our supply chain contracts. The Company expects to recognize revenue on approximately 80% of the remaining performance obligations over the next 12 months and approximately 90% over the next 24 months, with the remaining recognized thereafter. |
Engility Acquisition
Engility Acquisition | 12 Months Ended |
Feb. 01, 2019 | |
Business Combinations [Abstract] | |
Engility Acquisition | Engility Acquisition: On January 14, 2019, the Company completed the acquisition of Engility Holdings, Inc., a leading provider of integrated solutions and services supporting U.S. government customers in the defense, federal civilian, and intelligence and space communities. This strategic acquisition enables greater market and customer access, particularly in the intelligence and space communities, and enhances the Company's portfolio of capabilities, particularly in the area of systems engineering and integration. The acquisition enables acceleration of revenue growth through increased market and customer access, increased investment capacity, addition of cleared personnel and strategic alignment with key customers. The acquisition also enables increased profitability and cash generation with an improved margin profile and greater financial flexibility for investment and capital deployment. The acquisition was funded through a combination of SAIC common stock and additional borrowings. At the effective time of the acquisition, each outstanding share of Engility common stock was automatically canceled and converted into the right to receive 0.45 shares of the SAIC common stock. The Company amended its existing credit agreement to provide for a new five -year senior secured $1.1 billion term loan facility, as discussed in Note 10 . SAIC borrowed the entire amount of the term loan facility, the proceeds of which were immediately used to repay Engility’s existing credit facility and outstanding notes and to pay fees and expenses associated with the acquisition, with the balance retained by SAIC to be used for general corporate purposes. The purchase consideration for the acquisition of Engility was as follows: (in millions) Common stock issued to Engility shareholders (1) $ 1,086 Converted vesting stock awards assumed (2) 22 Cash consideration paid to extinguish Engility outstanding debt 1,052 Purchase price $ 2,160 (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 . The purchase price was allocated, on a preliminary basis, among assets acquired and liabilities assumed at fair value on the acquisition date, January 14, 2019, based on the best available information, with the excess purchase price recorded as goodwill. As of February 1, 2019, the Company had not finalized the determination of fair values allocated to various assets and liabilities, including, but not limited to, receivables, other current assets, deferred tax assets, property, plant, and equipment, other accrued liabilities and goodwill. The allocation of the purchase price is subject to change as the Company continues to obtain and assess relevant information that existed as of the acquisition date, including but not limited to, information pertaining to Engility’s historical government compliance accounting practices, legal proceedings, reserves, income taxes, contracts with customers, and pre-acquisition contingencies. The Company expects to have sufficient information available to resolve these items by the fourth quarter of fiscal 2020, which could potentially result in changes in assets or liabilities on Engility’s opening balance sheet and an adjustment to goodwill. The purchase accounting entries were recorded on a preliminary basis as follows: (in millions) Cash and cash equivalents $ 51 Receivables 351 Inventories 5 Prepaid expenses 5 Other current assets 15 Property, plant, and equipment 39 Deferred tax assets 91 Other assets 7 Intangible assets 648 Goodwill 1,257 Total assets acquired 2,469 Accounts payable 115 Accrued payroll and other employee benefits 30 Accrued vacation 39 Other accrued liabilities 58 Other long-term liabilities 54 Total liabilities assumed 296 Non-controlling interest 13 Net assets acquired $ 2,160 Amount of tax deductible goodwill $ 441 Goodwill represents intellectual capital and an acquired assembled work force. The Company inherited Engility’s historical tax basis in deductible goodwill, certain other intangible assets, and net operating loss carryforwards. The following table summarizes the fair value of intangible assets and the related weighted average useful lives: 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 The backlog intangible asset is comprised solely of funded backlog as of the acquisition date. The customer relationships intangible asset consists of unfunded backlog as of the acquisition date and estimated future renewals. The backlog and customer relationships intangible assets were valued using the excess earnings method (income approach) in which the value is derived from an estimation of the after-tax cash flows specifically attributable to backlog and customer relationships. The analysis included assumptions for projections of revenues and expenses, contributory asset charges, discount rates, and a tax amortization benefit. The developed technology asset was valued using the relief from royalty method (income approach) in which the value is derived by estimation of the after-tax royalty savings attributable to owning the assets. Assumptions in this analysis included projections of revenues, royalty rates representing costs avoided due to ownership of the assets, discount rates, a tax amortization benefit, and future obsolescence of the technology. The Company incurred $118 million in costs associated with the acquisition and integration of Engility. The Company incurred $63 million in acquisition-related costs, including $31 million of debt issue costs, see Note 10 , and $2 million in stock issue costs for fiscal 2019. During fiscal 2019, the Company recognized acquisition-related costs of $31 million and integration-related costs of $55 million , primarily for strategic consulting services, employee termination costs, including severance and the acceleration of assumed vesting stock awards, and other non-recurring integration-related costs, which are presented together as acquisition and integration costs of $86 million on the consolidated statements of income. The amount of Engility's revenue included in the consolidated statements of income for fiscal 2019 was $98 million and the amount of net loss included in the consolidated statements of income for fiscal 2019 was $19 million , which includes $32 million of integration-related costs. The following unaudited pro forma financial information presents the combined results of operations for Engility and the Company for the year ended February 1, 2019 and February 2, 2018, respectively: 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 The unaudited pro forma, combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Engility as though it had occurred on February 4, 2017. They include adjustments for intangible asset amortization; interest expense and debt issuance costs on long-term debt; acquisition, integration, and other transaction costs; and the elimination of intercompany revenue and costs. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Feb. 01, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: Goodwill Goodwill had a carrying value of $2,120 million and $863 million as of February 1, 2019 and February 2, 2018 , respectively. Goodwill increased by $1,257 million during fiscal 2019 due to the acquisition of Engility. There were no impairments of goodwill during the periods presented. Intangible Assets Intangible assets, all of which were finite-lived, consisted of the following: 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 Amortization expense related to intangible assets was $24 million , $21 million and $26 million for fiscal 2019 , 2018 and 2017 , respectively. There were no intangible asset impairment losses during the periods presented. The estimated annual amortization expense related to intangible assets as of February 1, 2019 is as follows: Fiscal Year Ending (in millions) 2020 $ 94 2021 64 2022 64 2023 65 2024 63 Thereafter 453 Total $ 803 Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments and other factors. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 12 Months Ended |
Feb. 01, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment | Property, Plant, and Equipment: Property, plant, and equipment are carried at cost net of accumulated depreciation and amortization. Purchases of property, plant, and equipment, as well as costs associated with major renewals and betterments, are capitalized. Maintenance, repairs and minor renewals and betterments are expensed as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is recognized. Depreciation and amortization is recognized using the methods and estimated useful lives as follows: Depreciation or amortization method Estimated useful lives (in years) February 1, February 2, (in millions) Computer equipment Straight-line or 3-10 $ 90 $ 75 Capitalized software and software licenses Straight-line or 3-10 61 58 Leasehold improvements Straight-line Shorter of lease term or 10 81 53 Office furniture and fixtures Straight-line or 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 Depreciation and amortization expense for property, plant, and equipment was $23 million , $23 million and $24 million in fiscal 2019 , 2018 and 2017 , respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Feb. 01, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation: Engility Acquisition Assumed Awards Upon the acquisition of Engility, all Engility outstanding and unvested equity awards were converted into SAIC vesting stock awards using the same exchange ratio as Engility’s common shareholders ( 0.45 SAIC share per Engility share). The Company assumed approximately 642,000 converted vesting stock awards with a fair value of $65.03 per share for a total of $42 million , which was bifurcated between pre- and post-combination periods of service in the amount of $22 million and $20 million , respectively. The amount attributable to the pre-combination service period is included in the purchase consideration of Engility. The remaining $20 million attributable to the post-combination service period will be recognized as post-combination service expense over the remaining vesting periods of the underlying awards. During fiscal 2019, subsequent to the acquisition, the Company completed certain integration activities that accelerated the recognition of $14 million of the post-combination service period expense, which has been included in the amounts reported within acquisition and integration costs on the consolidated statements of income. Plan Summaries Certain of the Company’s employees participate in the following four stock-based compensation plans: “2013 Equity Incentive Plan” (EIP), “Management Stock Compensation Plan,” “Employee Stock Purchase Plan” (ESPP), and the "2012 Long Term Performance Plan" (LTPP) for Engility assumed awards, which are herein referred to together as the “Plans.” The Company issues new shares on the vesting of stock awards or exercise of stock options under these Plans. The EIP provides the Company’s employees and directors the opportunity to receive various types of stock-based compensation and cash awards. The terms of the stock-based awards granted to employees and directors are the same, except that those for directors cliff vest within one year of the grant date. As of February 1, 2019 , the Company has outstanding stock options, vested and vesting stock awards, and performance share awards under this plan. Vesting stock awards and stock options granted under the EIP prior to fiscal 2015 generally vest or become exercisable 20% , 20% , 20% , and 40% after one, two, three and four years, respectively. Stock options granted under the EIP in fiscal 2015 and thereafter generally become exercisable 33% , 33% , and 33% after one, two and three years, respectively, while vesting stock awards granted in fiscal 2015 and thereafter generally vest 25% , 25% , 25% and 25% after one, two, three and four years, respectively. The maximum contractual term for stock options granted under the EIP is ten years , but historically the Company has granted stock options with a seven -year contractual term. Vesting may be accelerated for employees meeting retirement eligibility conditions. Stock-based awards generally provide for accelerated vesting if there is a change in control (as defined in the EIP). Vesting stock awards and performance share awards have forfeitable rights to dividends. In June 2014, the EIP was amended and restated to increase the total authorized shares of common stock for issuance under the EIP from 5.7 million to 8.5 million . The Company grants performance-based stock awards to certain officers and key employees under the EIP. Performance shares are rights to receive shares of the Company’s stock on the satisfaction of service requirements and performance conditions. These awards cliff vest at the end of the third fiscal year following the grant date, subject to meeting the minimum service requirements and the achievement of certain annual and cumulative financial metrics of the Company’s performance, with the number of shares ultimately issued, if any, ranging up to 150% of the specified target shares. If performance is below the minimum threshold level of performance, no shares will be issued. For all performance share awards granted, the annual financial metrics are based on operating cash flows and the cumulative financial metrics are based on operating income. The Management Stock Compensation Plan provides for awards in share units to eligible employees. Benefits from these plans are payable in shares of the Company’s stock that are held in a trust for the purpose of funding benefit payments to the participants. During fiscal 2017 all remaining outstanding awards in the Management Stock Compensation Plan vested. The Board of Directors may at any time amend or terminate the Management Stock Compensation Plan. In the event of a change in control of the Company (as defined by the Management Stock Compensation Plan), participant accounts will be immediately distributed, otherwise will generally be distributed upon retirement, based on the participant’s payout election, or upon termination. The Management Stock Compensation Plan does not provide for a maximum number of shares available for future issuance. The Company’s ESPP allows eligible employees to purchase shares of the Company’s stock at a discount of up to 15% of the fair market value on the date of purchase. During the three years ended February 1, 2019 , the discount was 5% of the fair market value on the date of purchase for purchases made under the Company’s ESPP, thereby resulting in the ESPP being non-compensatory. As of February 1, 2019 , 3.4 million shares of the Company’s stock are authorized for issuance under the ESPP. The LTPP provides certain employees of the Company the opportunity to receive various types of stock-based compensation awards. As of February 1, 2019, the Company has vesting stock awards assumed from the Engility acquisition under this plan. These remaining outstanding vesting stock awards assumed under the LTPP will continue to vest under their original vesting schedule, when granted by Engility prior to the acquisition, and generally cliff vest at the end of the third fiscal year following the grant date. Vesting may be accelerated for employees meeting retirement eligibility conditions. Vesting stock awards under the LTPP have forfeitable rights to dividends. Expense and Related Tax Benefits Recognized Stock-based compensation expense and related tax benefits recognized under the Plans were: Year Ended February 1, February 2, February 3, (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 Stock Options Stock options are granted with their exercise price equal to the closing market price of the Company’s stock on the last trading day preceding the grant date, except for those stock options outstanding as of September 27, 2013, for which the exercise prices (and number of stock options) were adjusted for the conversion at separation. Stock option activity for the year ended February 1, 2019 was: 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 As of February 1, 2019 there was $2 million of unrecognized compensation cost, net of estimated forfeitures, related to stock options, which is expected to be recognized over a weighted average period of 0.9 years . The following table summarizes activity related to exercises of stock options: Year Ended February 1, February 2, February 3, (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 The fair value of stock option awards granted under the Company’s plan were valued using the Black-Scholes option-pricing model based on the following assumptions: Expected Term --For options granted during fiscal 2019, the expected term was calculated from the Company's historical data using the midpoint method. For options granted prior to fiscal 2019, the expected term was calculated using the U.S. Security and Exchange Commission’s “simplified method” as the midpoint between the vesting term and contractual term. Expected Volatility --For options granted in fiscal 2017 and after, the expected volatility is based on the historical volatility of the Company since the separation from former Parent. For options granted during fiscal 2016 and prior, the expected volatility is based on the volatilities of selected peer group companies over a period consistent with the expected term. Peer group companies were selected from companies within the Company’s industry that most closely match the Company’s business, including size, capital structure and customer base. Risk-Free Interest Rate --The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the stock option on the date of grant. Dividend Yield --The dividend yield assumed over the expected term of the option is calculated based on the most recently announced dividend as of the grant date. The weighted average grant date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were: Year Ended February 1, February 2, February 3, 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 % Vesting Stock Awards Vesting stock award activity for the year ended February 1, 2019 was: 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 The grant date fair value of vesting stock awards is based on the closing market price of the Company’s stock on the last trading day preceding the grant date. The weighted average grant date fair value of the vesting stock awards granted for fiscal 2019 , fiscal 2018 and fiscal 2017 was $84.28 , $72.90 and $53.62 , respectively. As of February 1, 2019 there was $37 million of unrecognized compensation cost, net of estimated forfeitures, related to vesting stock awards, which is expected to be recognized over a weighted average period of 1.6 years . The fair value of vesting stock awards that vested in fiscal 2019 , fiscal 2018 and fiscal 2017 was $60 million , $58 million and $64 million , respectively. Performance Share Awards Performance share award activity for the year ended February 1, 2019 was: 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 The actual number of shares to be issued upon vesting range between 0 - 150% of the specified target shares. The number of performance shares are presented at 100% of the specified target shares in the table above, except for performance shares that vested and performance shares adjustment. Performance shares vested reflects the number of shares to be issued based on the actual achievement of the performance goals for shares that vested during the period. Performance shares adjustment reflects the increase or decrease in the number of performance shares vested compared to the number of performance shares that would have vested at target. The fair value of performance share awards that vested in fiscal 2019 was $3 million . For unvested performance shares as of February 1, 2019 the Company expects to issue 0.1 million shares of stock in the future based on estimated future achievement of the performance goals. The grant date fair value of the performance share awards granted for fiscal 2019 , fiscal 2018 , and fiscal 2017 was $85.31 , $72.91 and $53.34 , respectively. The grant date fair value of performance share awards is based on the closing market price of the Company’s common stock on the last trading day preceding the grant date. As of February 1, 2019 there was $5.7 million of unrecognized compensation cost, net of estimated forfeitures, related to performance share awards, which is expected to be recognized over a weighted average period of 1.7 years . |
Retirement Plans
Retirement Plans | 12 Months Ended |
Feb. 01, 2019 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans: Defined Contribution Plans The Company sponsors the Science Applications International Corporation Retirement Plan (a qualified defined contribution 401(k) plan) and an employee stock ownership plan, in which most employees are eligible to participate. Engility sponsors the Engility Master Savings Plan, which is a 401(k) plan in which most employees of Engility are eligible to participate. There are a variety of investment options available under the 401(k) plans, including the Company's stock. The Science Applications International Corporation Retirement Plan allows eligible participants to contribute a portion of their income through payroll deductions and the Company makes matching company contributions and may also make discretionary contributions. The Company contributions expensed for defined contribution plans were $46 million , $42 million and $48 million in fiscal 2019 , 2018 and 2017 , respectively. Deferred Compensation Plans The Company has established the Science Applications International Corporation Deferred Compensation Plan (DCP), effective January 1, 2015, providing certain eligible employees and directors an opportunity to defer some or all of their compensation on an unfunded, nonqualified basis. Participant deferrals are fully vested and diversified at the participant’s direction among the investment options offered under the DCP. Participant accounts will be credited with a rate of return based on the performance of the investment options selected. Distributions are made in cash. Deferred balances will be paid on retirement, based on the participant’s payout election, or upon termination. The Company may provide discretionary contributions to participants, but no Company contributions have been made. The Science Applications International Corporation Key Executive Stock Deferral Plan (KESDP) was closed on December 31, 2014, and no further deferrals are allowed. Benefits from the KESDP are payable in shares of the Company’s stock that may be held in trust for the purpose of funding benefit payments to KESDP participants. Vested deferred balances will generally be paid on retirement, based on the participant’s payout election, or upon termination. The Science Applications International Corporation 401(k) Excess Deferral Plan (Excess Plan) was also closed on December 31, 2014, and no further deferrals are allowed. Participant deferrals are fully vested and diversified at the participant’s direction among the investment options offered under the Excess Plan. Deferred balances will generally be paid following retirement or termination. Defined Benefit Plans In connection with the acquisition of Engility on January 14, 2019, SAIC assumed two defined benefit pension plans sponsored by Engility for certain current and former employees: a Retiree Health Reimbursement Account Plan (RHRA Benefit Plan) and a Defined Benefit Pension Plan (Pension Plan). Membership and participants' calculated pension benefit are frozen in the Pension Plan and membership in the RHRA is frozen. Based on a valuation analysis, we recognized a $37 million liability on January 14, 2019 for the unfunded status of the Engility pension plans, reflecting projected benefit obligations of $86 million , in excess of the $49 million fair value of plan assets. The Company recognized no gain or loss related to changes in the benefit obligation during fiscal 2019. Net Periodic Pension Costs Due to the proximity of the acquisition to our fiscal year end, there was no net periodic benefit costs recognized during the year ended February 1, 2019. Obligations and Funded Status 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 Amounts recognized in the consolidated balance sheets consist of: 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 Assumptions The Company uses the spot rate approach to measure interest costs for pension and postretirement benefits. Under the spot rate approach, the Company uses individual spot rates along the yield curve that correspond with the timing of each benefit payment. The discount rates represent the estimated rate at which we could effectively settle our pension benefit obligations. In order to estimate this rate for the Pension Plan and the RHRA Benefit Plan, the timing of each benefit payment was matched against the individual spot rates along a yield curve to produce a single discount rate. The assumed long-term rate of return on plan assets, which is the average return expected on the funds invested or to be invested to provide future benefits to pension plan participants, is determined by an annual review of historical plan assets returns and consultation with outside investment advisers. In selecting the expected long-term rate of return on assets used for the Pension Plan, the Company considered its investment return goals stated in the Pension Plan's investment policy. The Company, with input from the Pension Plan's professional investment managers, also considered the average rate of earnings expected on the funds invested or to be invested to provide Pension Plan benefits. This process included determining expected returns for the various asset classes that comprise the Pension Plan's target asset allocation. The following assumptions were used to determine the benefit obligations: February 1, 2019 Pension Plan RHRA Benefit Plan Discount rate 4.06 % 3.82 % Pension Plan Assets The Company's investment policy includes a periodic review of the Pension Plan's investment in the various asset classes. During 2019 , the Company's overall investment strategy is for plan assets to achieve a long-term rate of return of 5.50% , with a wide diversification of asset types, fund strategies and fund managers. The target allocation for the plan assets is 44% in domestic equity securities, 20% international equity, 31% in fixed income securities, and 5% in a liquid cash equivalent option. The risk management practices include regular evaluations of fund managers to ensure the risk assumed is commensurate with the given investment style and objectives. According to the plan's investment policy, performance will be evaluated across all time periods, with a particular emphasis on longer-term returns relative to associated peers and benchmarks. The fair value measurement of plan asset by category at February 1, 2019 is as follows: 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 Fair Value Measurement Using Significant Unobservable Inputs (Level 3) Due to the proximity of the acquisition to our fiscal year end, there was no change to the fair value of guaranteed deposits during the year ended February 1, 2019. Estimated Future Benefit Payments The following table sets forth the expected timing of benefit payments by fiscal year: 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 |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 01, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: Substantially all of the Company’s income before income taxes for the three years ended February 1, 2019 is subject to taxation in the United States. The provision for income taxes for each of the periods presented include the following: Year Ended February 1, February 2, February 3, (in millions) Current: Federal $ 4 $ 3 $ 59 State 10 2 12 Deferred: Federal 17 26 2 State 2 4 (4 ) Total $ 33 $ 35 $ 69 A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate to income before income taxes for each of the periods presented follows: Year Ended February 1, February 2, February 3, (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. The effective income tax rate for fiscal 2019 is higher than fiscal 2018 primarily due to smaller excess tax benefits from stock-based compensation, $3 million of tax expense for non-deductible acquisition expenses that only occurred in fiscal 2019 and the higher non-deductible executive compensation in fiscal 2019 as a result from the Tax Act. The one-time Federal income tax rate reduction in fiscal 2018 was largely offset by the benefit of the lower corporate tax rate which applied in fiscal 2019. The effective income tax rate for fiscal 2018 is lower than fiscal 2017 primarily due to $22 million in excess tax benefits recognized in fiscal 2018 as well as a $17 million benefit in fiscal 2018 as a result of the federal rate change from the Tax Act. The excess tax benefits are related to employee share-based compensation as a result of the adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting. Deferred income taxes are recorded for differences in the basis of assets and liabilities for financial reporting purposes and tax reporting purposes. Deferred tax assets (liabilities) were comprised of: February 1, February 2, (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 ) For fiscal 2019, net deferred tax assets of $54 million is presented in other assets on the consolidated balance sheets. For fiscal 2018, net deferred tax liabilities are presented as deferred income taxes on the consolidated balance sheets. Deferred tax assets for both periods presented include state tax credit carryforwards for which the Company has set up a valuation allowance. The changes in the unrecognized tax benefits, excluding accrued interest and penalties, were: Year Ended February 1, February 2, February 3, (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 We believe it is reasonably possible that $2 million to $4 million of unrecognized tax benefits will reverse in the next 12 months due to the resolution of a tax authority examination and approximately $4 million as a result of statute of limitations expiration, along with associated interest and penalties. For the periods presented, there was not a material amount of current year interest and penalties recognized in the consolidated balance sheets and statements of income and comprehensive income. Tax interest and tax penalties, if any, would be included in income tax expense. Beginning with fiscal 2014, the Company has filed income tax returns in the U.S. and various state jurisdictions, which may be subject to routine compliance reviews by the Internal Revenue Service ("IRS") and other taxing authorities. 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 tax authorities. The Company’s tax returns for fiscal years 2016 through 2018 remain subject to examination by the IRS and various other tax jurisdictions. The Company is currently under examination by the IRS for fiscal years 2016 and 2017. The Company is not responsible for any tax items on operations before the separation except for Scitor’s tax returns that remain subject to examination by the IRS and various other tax jurisdictions from 2005 through the acquisition. The Company is also subject to examination for the returns of Engility from calendar year 2015 through the short pre-acquisition period ended January 13, 2019. The Company is responsible for any tax items on operations before acquisition for Engility. In fiscal 2016, the Company acquired all of Scitor’s stock in a transaction taxable to the selling shareholders. The Company inherited Scitor’s historical tax basis in deductible goodwill, certain other intangible assets, and operating loss carryforwards. At the date of the acquisition, the tax deductible goodwill was $136 million and the tax deductible identified intangible assets were $163 million . The Company inherited a federal and state net operating loss of $90 million subject to Internal Revenue Code Section 382 limitations. The Company expects to utilize these losses completely by fiscal 2020 . The net operating losses will begin to expire in fiscal 2027 . In fiscal year 2019, the Company acquired all of Engility’s stock in a tax free transaction to the selling shareholders. The Company inherited Engility’s historical tax basis in deductible goodwill, certain other intangible assets, and operating loss carryforwards. At the date of the acquisition, the tax deductible goodwill was $441 million and the tax deductible identified intangible assets were $255 million . The Company inherited a federal net operating loss of $483 million subject to Internal Revenue Code Section 382 limitations. The Company expects to utilize these losses completely by fiscal 2036. The net operating losses will begin to expire in fiscal 2029. Under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended (the Code), if a corporation undergoes an “ownership change,” the corporation’s ability to use its pre-change net operating loss carryforwards and other pre-change tax attributes, such as its adjusted tax basis in its amortizable goodwill, to offset its post-change income and taxes may be limited. Such an ownership change occurred during the acquisition of Engility and, as a result of these limitations, $3 million of tax credit carryforwards were eliminated in purchase accounting. The Company has approximately $30 million of state loss carryforwards and approximately $9 million of state credit carryforwards that will begin to expire in fiscal 2026 . The valuation allowance shown above relates to these state carryforwards. |
Debt Obligations
Debt Obligations | 12 Months Ended |
Feb. 01, 2019 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations: The Company’s long-term debt as of the periods presented was as follows: 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 As of February 1, 2019, the Company has a $2.5 billion credit facility (the Credit Facility) consisting of a $400 million secured Revolving Credit Facility due October 2023, a $1,068 million secured Term Loan A Facility due October 2023, and a $1,047 million secured Term Loan B Facility due October 2025 (together, the Term Loan Facilities). There is no balance outstanding on the Revolving Credit Facility due October 2023 as of February 1, 2019. Any obligations under the Credit Facility are secured by liens on substantially all of the assets of the Company and its subsidiaries. As of February 2, 2018, the Company had a $1.2 billion credit facility consisting of a $200 million secured Revolving Credit Facility due August 2021, a $635 million secured Term Loan A Facility due August 2021, and a $400 million secured Term Loan B Facility due May 2022 under the First Amendment to the Second Amended and Restated Credit Agreement (First Amendment). On February 7, 2018, the Company executed the Second Amendment to the Second Amended and Restated Credit Agreement (Second Amendment) reducing the interest rate margins by 0.25% , 0.50% , and 0.25% , across all leverage ratios for the Term Loan A Facility due August 2021, the Term Loan B Facility due May 2022, and the Revolving Credit Facility due August 2021, respectively. Effective upon execution of the Second Amendment, the applicable margin with respect to the Term Loan A Facility due August 2021 and borrowings under the Revolving Credit Facility due August 2021 ranged from 1.25% to 2.00% for Eurocurrency Rate loans, and 0.25% to 1.00% for Base Rate loans. Under the Second Amendment, interest rate margins for the Term Loan B Facility due May 2022 were 2.00% , subject to a 0.75% floor for Eurocurrency Rate loans, or 1.00% for Base Rate loans. The Company incurred and paid $2 million in fees associated with the Second Amendment, including $1 million of deferred financing fees. On October 31, 2018, the Company entered into the Third Amended and Restated Credit Agreement (Third Amended Credit Agreement) in anticipation of the acquisition of Engility (see Note 4 ). The Third Amended Credit Agreement, among other things, provided for and permitted: 1) the acquisition of Engility; 2) the establishment of a senior secured Term Loan B Facility due October 2025 in the amount of $1.1 billion ; 3) the establishment of a senior secured Term Loan A Facility Commitment due October 2023 in the amount of $1.1 billion ; 4) an increase to the existing $200 million Revolving Credit Facility by an additional $200 million upon the effectiveness of the acquisition of Engility; and, 5) an extension to the term of the Revolving Credit Facility to October 2023. The Term Loan B Facility due October 2025 was funded in full in October 2018 and the proceeds were used to repay all indebtedness outstanding under the Second Amendment and related expenses. On January 14, 2019, in connection with the acquisition of Engility, the Company funded the Term Loan A Facility in the amount of $1.1 billion and increased the existing Revolving Credit Facility to $400 million . The proceeds were used to partially finance the acquisition of Engility and for general corporate purposes. The Company incurred $31 million of debt issue costs associated with the Third Amended Credit Agreement. The Company recognized $5 million in expenses associated with the Third Amended Credit Agreement, which is included in interest expense and includes a $4 million loss on extinguishment of debt. The Company deferred $26 million in financing fees that are amortized to interest expense utilizing the effective interest method. Borrowings under the Term Loan A Facility due October 2023 will amortize quarterly beginning on January 31, 2020 at 1.25% of the original borrowed amount thereunder, with such quarterly amortization payments increasing to 1.875% on January 31, 2021 and then to 2.50% on January 31, 2022. The Term Loan B Facility due October 2025 will amortize quarterly at 0.25% of the original borrowed amount beginning on January 31, 2019. Beginning with SAIC’s fiscal year ending on or about January 31, 2020, the scheduled principal repayments for the Term Loan A and Term Loan B facilities may be further reduced or eliminated by annual mandatory prepayments of a portion of SAIC’s Excess Cash Flow (as defined in the Third Amended Credit Agreement). Mandatory principal prepayments are allocated to Term Loan A and Term Loan B facilities on a pro rata basis and reduce the remaining scheduled principal installments for each facility. Voluntary principal prepayments may be applied to either or both loans at the Company’s direction. The Company made no voluntary principal prepayments during fiscal 2019. Subsequent to the end of fiscal 2019, the Company made $150 million of voluntary principal prepayments on the Term Loan A Facility due October 2023. Borrowings under the Third Amended Credit Agreement bear interest at a variable rate of interest based on LIBOR or a Base Rate, plus in each case an applicable margin. Applicable margins with respect to borrowings under the Term Loan B Facility due October 2025 are 1.75% for LIBOR loans and 0.75% for Base Rate loans. Applicable margins with respect to borrowings under the Term Loan A Facility due October 2023 and the Revolving Credit Facility due October 2023 range from 1.25% to 2.00% for LIBOR loans and 0.25% to 1.00% for Base Rate loans, in each case based on the then applicable Leverage Ratio (as defined in the Third Amended Credit Agreement). The Company also pays a commitment fee with respect to undrawn amounts under the Revolving Credit Facility due October 2023 ranging from 0.20% to 0.35% . The Third Amended Credit Agreement contains certain restrictive covenants applicable to the Company and its subsidiaries including a requirement to maintain a Senior Secured Leverage Ratio (as defined in the Third Amended Credit Agreement) of not greater than 3.75 to 1.00 until the effectiveness of the acquisition, not greater than 4.50 to 1.00 upon the effectiveness of the acquisition and for the succeeding six fiscal quarters, and not greater than 4.00 to 1.00 thereafter, unless a Permitted Acquisition (as defined in the Third Amended Credit Agreement) occurs in which case not greater than 4.25 to 1.00 for three consecutive quarters following such a transaction. As of February 1, 2019 , the Company was in compliance with the covenants under the Third Amended Credit Agreement. Maturities of long-term debt as of February 1, 2019 are: Fiscal Year Ending Total (in millions) 2020 $ 24 2021 70 2022 68 2023 147 2024 811 Thereafter 995 Total principal payments $ 2,115 As of February 1, 2019 and February 2, 2018 , the carrying value of the Company’s outstanding debt obligations approximated its fair value. The fair value of long-term debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s Term Loan Facilities. |
Derivative Instruments Designat
Derivative Instruments Designated as Cash Flow Hedges | 12 Months Ended |
Feb. 01, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments Designated as Cash Flow Hedges | Derivative Instruments Designated as Cash Flow Hedges: The Company’s derivative instruments designated as cash flow hedges consist of: Asset (Liability) Fair Value (1) at Notional Amount at February 1, 2019 Pay Fixed Rate Receive Variable Rate Settlement and Termination February 1, February 2, (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. The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate debt. The counterparties to all swap agreements are financial institutions. See Note 12 for the unrealized change in fair values on cash flow hedges recognized in other comprehensive income (loss) and the amounts reclassified from accumulated other comprehensive income (loss) into earnings for the current and comparative periods presented. There was no ineffectiveness during the periods presented prior to the adoption of ASU 2017-12. The Company estimates that the total reclassifications of unrealized losses from accumulated other comprehensive loss into earnings in the twelve months following February 1, 2019 will no t be material. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component | 12 Months Ended |
Feb. 01, 2019 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss by Component | Changes in Accumulated Other Comprehensive Loss by Component: The following table presents the changes in accumulated other comprehensive loss attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 11 . 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. |
Operating Leases
Operating Leases | 12 Months Ended |
Feb. 01, 2019 | |
Leases [Abstract] | |
Operating Leases | Operating Leases: The Company occupies most of its facilities under operating leases. Most of the leases require the Company to pay maintenance and operating expenses (such as taxes, insurance and utilities), and also contain renewal options to extend the lease and provisions for periodic rate escalations to reflect inflationary increases. Certain equipment is leased under short-term or cancelable operating leases. Rental expense for facilities and equipment was $46 million , $48 million , and $65 million in fiscal 2019, 2018, and 2017, respectively. Future minimum operating lease commitments at February 1, 2019 are: Fiscal Year Ending (in millions) 2020 $ 55 2021 42 2022 36 2023 19 2024 16 Thereafter 43 Total $ 211 |
Business Segment Information
Business Segment Information | 12 Months Ended |
Feb. 01, 2019 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information: The Company is organized as a matrix comprised of three customer facing operating segments supported by a solutions and technology group. The three operating segments are responsible for customer relationships, business development and program management, and delivery and execution, while the solutions and technology group organization manages the development of our offerings, solutions and capabilities. Each of the Company’s three operating segments is focused on providing the Company’s comprehensive technical, engineering and enterprise IT service offerings to one or more agencies of the U.S federal government. The Company's operating segments are aggregated into one reportable segment because they have similar economic characteristics and meet the other aggregation criteria within the accounting standard on segment reporting, including similarities in the nature of the services provided, methods of service delivery, customers served and the regulatory environment in which they operate. Substantially all of the Company’s revenues were generated by, and tangible long-lived assets owned by, entities located in the United States. As such, financial information by geographic location is not presented. In each of fiscal 2019 , 2018 , and 2017 over 95% of our total revenues were attributable to prime contracts with the U.S. government or to subcontracts with other contractors engaged in work for the U.S. government. |
Legal Proceedings and Commitmen
Legal Proceedings and Commitments and Contingencies | 12 Months Ended |
Feb. 01, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Commitments and Contingencies | Legal Proceedings and Commitments and Contingencies: Legal Proceedings The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. AAV Termination for Convenience On August 27, 2018, the Company received a stop-work order from the United States Marine Corps on the Assault Amphibious Vehicle (AAV) contract and on October 3, 2018 the program was terminated for convenience by the customer. Beginning in fiscal 2018, the Company entered into contracts with various vendors for long-lead time materials that would be necessary to complete the low-rate initial production (LRIP) phase of the program, including portions of the LRIP phase which had not yet been awarded. As a result of the program termination, the Company recognized an inventory provision for long-lead items, see Note 1. The Company is continuing to negotiate with the Marine Corps to recover all costs associated with the termination. Scitor Acquisition On May 4, 2015 , the Company completed the acquisition of Scitor, a leading global provider of technical services to the U.S. intelligence community and other U.S. government customers. Purchase consideration paid to acquire Scitor was $764 million (net of cash acquired), including $43 million which was deposited to escrow accounts. In August 2015, $3 million was released from escrow to the sellers after finalizing the working capital adjustment and another $13 million was released in September 2016 that was held to secure a portion of the sellers’ indemnification obligations. During the first quarter of fiscal 2019, the Company received a $6 million distribution from escrow to settle a claim, which was recognized as a reduction to selling, general, and administrative costs. There is no remaining amount in escrow. Agreements with Former Parent Former Parent and the Company executed various agreements to provide mechanisms for an orderly transition and to govern certain ongoing relationships between the companies following the separation. The agreements include a Distribution Agreement, Employee Matters Agreement, Tax Matters Agreement, Master Transition Services Agreement, and Master Transitional Contracting Agreement (MTCA). These agreements generally provide that each party is responsible for its respective assets, liabilities and obligations, including employee benefits, insurance and tax-related assets and liabilities. The MTCA also governs the relationship between former Parent and the Company with regard to the treatment of contracts, proposals, and teaming arrangements where both companies are or will be jointly performing work after separation. Each of former Parent and the Company indemnify the other party for work performed by it under the MTCA. Contingent losses that were unknown at the time of separation and arise from the operation of the Company’s historical business or the former Parent’s historical corporate losses will be shared between the parties to the extent that losses in any such category exceed $50 million in the aggregate. If they arise and exceed the $50 million threshold, the Company will be responsible for 30% of the former Parent’s incremental contingent losses on corporate claims (and former Parent will be responsible for 70% of the Company’s incremental losses on claims relating to operations that exceed $50 million ). Government Investigations, Audits and Reviews The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect, in particular, to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the United States. U.S. government agencies, including the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review the adequacy of the contractor’s compliance with government standards for its business systems. Adverse findings in these investigations, audits, or reviews can lead to criminal, civil or administrative proceedings, and the Company could face disallowance of previously billed costs, penalties, fines, compensatory damages, and suspension or debarment from doing business with governmental agencies. Due to the Company’s reliance on government contracts, adverse findings could also have a material impact on the Company’s business, including its financial position, results of operations and cash flows. The indirect cost audits by the DCAA of the Company’s business remain open for fiscal 2010 and subsequent years. Although the Company has recorded contract revenues subsequent to and including fiscal 2010 based on an estimate of costs that the Company believes will be approved on final audit, the Company does not know the outcome of any ongoing or future audits. If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected. The Company has recorded reserves for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with Cost Accounting Standards, which include indemnification obligations owing to former Parent for periods prior to the Distribution Date. As of February 1, 2019 , the Company has recorded a total liability of $63 million for estimated net amounts to be refunded to customers for potential adjustments from audits of contract costs, which is presented in other accrued liabilities on the consolidated balance sheets. Any additional amounts which may be determined to be owed for periods prior to the separation will be allocated to former Parent and the Company in proportions determined in accordance with the Distribution Agreement. Letters of Credit and Surety Bonds The Company has outstanding obligations relating to letters of credit of $16 million as of February 1, 2019 , principally related to guarantees on insurance policies. The Company also has outstanding obligations relating to surety bonds in the amount of $18 million , principally related to performance and payment bonds on the Company’s contracts. The majority of the surety bonds outstanding were initially obtained by former Parent and the Company is required to satisfy these obligations under the terms of the Distribution Agreement. |
Selected Quarterly Financial Da
Selected Quarterly Financial Data (Unaudited) | 12 Months Ended |
Feb. 01, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected Quarterly Financial Data (Unaudited): Selected unaudited financial data for each quarter of the most recent two fiscal years was: 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 |
Business Overview and Summary_2
Business Overview and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 01, 2019 | |
Accounting Policies [Abstract] | |
Segment Reporting | The Company is organized as a matrix comprised of three customer facing operating segments supported by a solutions and technology group. Each of the Company’s three customer facing operating segments is focused on providing the Company’s comprehensive technical, engineering and enterprise IT service offerings to one or more agencies of the U.S federal government. The Company's operating segments are aggregated into one reportable segment for financial reporting purposes, see Note 14 . |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation References to “financial statements” refer to the consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates. |
Restructuring | Restructuring During fiscal 2018, the Company initiated restructuring activities (the "Restructuring") intended to improve operational efficiency, reduce costs, and better position the Company to drive future growth. The restructuring activities consisted of involuntary and voluntary terminations and the consolidation of existing leased facilities. |
Reporting Periods | Reporting Periods The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2017 began on January 30, 2016 and ended on February 3, 2017 , fiscal 2018 began on February 4, 2017 and ended on February 2, 2018 , and fiscal 2019 began on February 3, 2018 and ended on February 1, 2019 . The number of weeks for each quarter for fiscal 2019 , 2018 and 2017 are as follows: 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 |
Stock-based Compensation | Stock-based Compensation The Company issues stock-based awards as compensation to employees and directors. Stock-based awards include stock options, vesting stock awards and performance share awards. These awards are accounted for as equity awards. The Company recognizes stock-based compensation expense net of estimated forfeitures on a straight-line basis over the underlying award’s requisite service period, as measured using the award’s grant date fair value. For performance share awards, the Company reassesses the probability of achieving the performance conditions at each reporting period end and adjusts compensation expense based on the number of shares the Company expects to ultimately issue. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The provision for federal, state, local and foreign income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. Recording the provision for income taxes requires management to make significant judgments and estimates for matters for which the ultimate resolution may not become known until the final resolution of an examination by taxing authorities or the statute of limitations lapses. Additionally, recording liabilities for uncertainty in income taxes involves significant judgment in evaluating the Company’s tax positions and developing the best estimate of the taxes ultimately expected to be paid. Tax penalties and interest are included in income tax expense. The Company records net deferred tax assets to the extent these assets will more likely than not be realized. In making such determination, the Company considers all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies and recent results of operations. If it is determined that the Company would be able to realize the deferred income tax assets in the future in excess of their net recorded amount or would no longer be able to realize the deferred income tax assets in the future as currently recorded, an adjustment would be made to the valuation allowance which would decrease or increase the provision for income taxes. The Company has also recognized liabilities for uncertainty in income taxes when it is more likely than not that a tax position will not be sustained on examination and settlement with various taxing authorities. Liabilities for uncertainty in income taxes are measured based on the largest amount of benefit that is greater than 50% likely of being realized upon ultimate settlement. Deferred tax assets and liabilities are netted by taxable jurisdiction and classified as noncurrent on the consolidated balance sheets. The Tax Cuts and Jobs Act (the “Tax Act”) was enacted on December 22, 2017, which amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Tax Act reduces the corporate federal tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The rate change is administratively effective at the beginning of our fiscal year 2018, using a blended rate for the fiscal 2018 annual period. As a result, the Company's blended federal statutory tax rate for fiscal year 2018 was 33.7% . The Company has a statutory rate of 21% for fiscal year 2019 and all future periods. The SEC staff issued Staff Accounting Bulletin No 118 (“SAB 118”), which allows us to record provisional amounts during a measurement period not to extend beyond one year of the enactment date. The final amount recorded related to the re-measurement of the Company's net deferred tax liabilities was a $19 million discrete net tax benefit. A net benefit for the corporate rate reduction of $17 million was recognized in income tax expense for fiscal 2018, and an additional $2 million benefit was recognized in income tax expense for fiscal 2019. This rate reduction resulted in a corresponding net decrease of deferred tax liabilities. As of February 1, 2019, we have completed our accounting for the tax effects of enactment of the Tax Act. Prior to February 1, 2019, there were two areas still under review including: (1) the expensing of qualified assets and (2) the limitation on the deductibility of certain executive compensation. No material measurement period adjustments were required as a result of this review. |
Costs Allocated to Contracts | Costs Allocated to Contracts The Company classifies indirect costs as overhead (included in cost of revenues) or general and administrative expenses in the same manner as such costs are defined in the Company’s Disclosure Statements under U.S. government Cost Accounting Standards (CAS). |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents are comprised of cash in banks and highly liquid instruments, which primarily consist of bank deposits and investments in institutional money market funds. The Company includes outstanding payments within cash and cash equivalents and accounts payable on the consolidated balance sheets and as of February 1, 2019 and February 2, 2018 these amounts were $47 million and $31 million , respectively. The Company does not invest in high yield or high risk securities. The cash in bank accounts at times may exceed federally insured limits. Restricted cash consists of cash on deposit in rabbi trusts that are contractually restricted from use in operations, but are subject to future claims of creditors. Restricted cash will be used to fund future payments to settle the Company's obligations related to deferred compensation plans. |
Receivables | Receivables Receivables include billed and billable receivables, and unbilled receivables. The Company’s receivables are primarily due from the U.S. government, or from prime contractors on which we are subcontractors and the end customer is the U.S. government, and are generally considered collectable from the perspective of the customer’s ability to pay. The Company does not have a material credit risk exposure. Unbilled receivables, substantially all of which are expected to be billed and collected within one year , are stated at their estimated realizable value and consist of costs and fees billable on contract completion or the occurrence of a specified event, other than the passage of time. Legal title to the related accumulated costs of contracts in progress generally vests with the U.S. government on the Company’s receipt of progress payments. Progress payments received of $26 million and $20 million offset unbilled receivables as of February 1, 2019 and February 2, 2018 , respectively. Contract retentions are billed when contract conditions have been met and may relate to uncompleted indirect cost negotiations with the U.S. government. Based on historical experience, the majority of retention balances are expected to be collected beyond one year. In fiscal 2018 retention of $11 million was presented within receivables, net on the consolidated balance sheet. With the modified retrospective method of adoption of ASC 606 in fiscal 2019, retention is now presented as a non-current asset in other assets on the consolidated balance sheet, see Note 3 . Write-offs of retention balances have not been significant. The Company establishes an allowance for doubtful accounts based on the latest information available to determine whether outstanding invoices are ultimately collectable. The Company determines its allowance for doubtful accounts by analyzing individual receivables, historical bad debts, and, for non-U.S. government customers, customer creditworthiness. Receivable balances are written off in the period during which management determines they are uncollectable, and, at that time, such balances are removed from billed receivables and, if previously reserved, from the allowance for doubtful accounts. |
Inventory | Inventory Inventory is substantially comprised of finished goods inventory purchased for resale to customers, such as tires and lubricants, and is valued at the lower of cost or net realizable value, generally using the average method. The Company evaluates current inventory against historical and planned usage to estimate the appropriate provision for obsolete inventory. |
Business Combinations | Business Combinations The Company records all tangible and intangible assets acquired and liabilities assumed in a business combination at fair value as of the acquisition date, which is determined using a cost, market or income approach. The excess amount of the aggregated purchase consideration paid over the fair value of the net of assets acquired and liabilities assumed is recorded as goodwill. Acquisition date fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as measured on the acquisition date. The valuations are based on information that existed as of the acquisition date. During the measurement period that shall not exceed one year from the acquisition date, the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information that the Company has subsequently obtained regarding facts and circumstances that existed as of the acquisition date. Acquisition-related costs that are not part of the purchase price consideration are expensed as incurred. These costs typically include transaction-related costs, such as finder’s fees, and legal, accounting and other professional costs. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill and indefinite-lived intangible assets are not amortized, but rather are tested for potential impairment annually at the beginning of the fourth quarter, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. There were no impairments during the periods presented. The goodwill impairment test is performed at the reporting unit level. The Company estimates and compares the fair value of each reporting unit to its respective carrying value including goodwill. The fair value of the Company’s reporting units are determined using either a market approach, income approach, or a combination of both, which involves the use of estimates and assumptions, including projected future operating results and cash flows, the cost of capital, and financial measures derived from observable market data of comparable public companies. If the fair value is less than the carrying value, the amount of impairment expense is equal to the difference between the reporting unit’s fair value and the reporting unit’s carrying value. Intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company evaluates its long-lived assets for potential impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable and the carrying amount of the asset exceeds its estimated future undiscounted cash flows. When the carrying amount of the asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized to reduce the asset’s carrying amount to its estimated fair value based on the present value of its estimated future cash flows. |
Commitments and Contingencies | Commitments and Contingencies Accruals for commitments and loss contingencies are recorded when it is both probable that they will occur and the amounts can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount of loss. The Company reviews these accruals quarterly and adjusts the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information. |
Pension and Defined Benefit Plans | Pension and Defined Benefit Plans The Company measures plan assets and benefit obligations as of the month-end that is closest to its fiscal year-end. Accounting and reporting for the Company's pension and defined benefit plans requires the use of assumptions, including but not limited to, a discount rate and an expected return on assets. These assumptions are reviewed at least annually based on reviews of current plan information and consultation with the Company's independent actuary and the plans’ investment advisor. If these assumptions differ materially from actual results, the Company's obligations under the pension and defined benefit plans could also differ materially, potentially requiring the Company to record an additional liability. The Company's pension and defined benefit plan liabilities are developed from actuarial valuations, which are performed each year. |
Fair Value Measurements | Fair Value Measurements The Company utilizes fair value measurement guidance prescribed by GAAP to value its financial instruments. The accounting standard for fair value measurements establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: observable inputs such as quoted prices in active markets (Level 1); inputs other than the quoted prices in active markets that are observable either directly or indirectly (Level 2); and unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions (Level 3). The carrying amounts of cash and cash equivalents, receivables, accounts payable and other amounts included in other current assets and current liabilities that meet the definition of a financial instrument approximate fair value because of the short-term nature of these amounts. The carrying value of the Company’s outstanding debt obligations approximates its fair value. The fair value of long-term debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. |
Derivative Instruments Designated as Cash Flow Hedges | Derivative Instruments Designated as Cash Flow Hedges Derivative instruments are recorded on the consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. The ineffective portion of all hedges, if any, is recognized immediately in earnings. The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party or canceled. See Note 11 for further discussion on the Company’s derivative instruments designated as cash flow hedges. |
Operating Cycle | Operating Cycle The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts. |
Research and Development | Research and Development The Company conducts research and development activities under customer-funded contracts and with company-funded independent research and development (IR&D) funds. IR&D efforts consist of projects involving basic research, applied research, development, and systems and other concept formulation studies. Company-funded IR&D expense is included in selling, general and administrative expenses and was $5 million , $4 million and $4 million in fiscal 2019 , 2018 and 2017 , respectively. Customer-funded research and development activities performed under customer contracts are charged directly to cost of revenues for those particular contracts. |
Accounting Standards Updates | Accounting Standards Updates In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the revenue recognition requirements and some cost guidance included in the Accounting Standards Codification (ASC). This ASU is based on the principle that revenue is recognized to depict the transfer of goods or services to customers at an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The ASU also requires additional disclosures about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments, and assets recognized from costs incurred to obtain or fulfill a contract. The Company adopted the standard on February 3, 2018, using the modified retrospective method. Under this method, the Company recognized the cumulative effect of adoption as an adjustment to its opening balance of retained earnings on February 3, 2018. In determining the cumulative impact of the adoption the Company applied the provisions of ASC 606 only to contracts that had not yet been completed at the date of adoption. Prior periods were not retrospectively adjusted, but the Company has maintained dual reporting for the year of initial application, disclosing the effect of adoption. Under the new standard, the Company continues to recognize revenue over time as services are rendered to fulfill its contractual obligations; however, the Company generally accounts for customer option period exercises (renewals) and service contract modifications prospectively, instead of as a cumulative adjustment to revenue under a single unit of accounting. Also, under the new standard, award and incentive-based fees generally are recognized during the discrete periods of performance to which they relate as opposed to on a cumulative basis over the contract period. The net impact to opening retained earnings from these changes as a result of the adoption was $3 million . The Company no longer defers the recognition of revenues and costs associated with significant upfront material acquisitions on programs previously accounted for using the efforts-expended method of percentage of completion. Under the new standard, the Company recognizes revenue on an adjusted cost-to-cost basis, where the amount of revenue that is recognized is equal to the amount of costs incurred plus profit based on the adjusted cost input measure of progress. This change resulted in a $15 million reduction in other current assets and other accrued liabilities on February 3, 2018, but had no impact on the adjustment to opening retained earnings. The cumulative effect of adopting ASC 606 on the Company's opening balance sheet is as follows: 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 The amounts by which the Company’s financial statements were impacted by the adoption of ASC 606, as compared to the guidance in effect before the change, as of and for the twelve months ended February 1, 2019 were as follows: 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 These impacts were primarily attributable to the change in accounting for programs previously accounted for using the efforts-expended method of percentage of completion. In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedge Activities , which simplifies the application of hedge accounting and eliminates the requirement to separately measure and report hedge ineffectiveness. The Company early adopted the provisions of the standard in the first quarter of fiscal 2019. Adoption did not have a material impact on the Company's financial statements. In February 2016, the FASB issued ASU No. 2016-2, Leases (Topic 842) , which supersedes the existing lease accounting standards ( Topic 840 ). Under the new guidance, a lessee will be required to recognize lease assets and lease liabilities for all leases with lease terms in excess of twelve months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as either a finance lease or operating lease. The criteria for distinction between a finance lease and an operating lease are substantially similar to existing lease guidance for capital leases and operating leases. Some changes to lessor accounting have been made to conform and align that guidance with the lessee guidance and other areas within GAAP, such as Revenue from Contracts with Customers (Topic 606) . In July 2018, the FASB provided an optional transition method of adoption, permitting entities to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as opposed to the beginning of the earliest period presented in the financial statements. ASU 2016-2 becomes effective for the Company in the first quarter of fiscal 2020. The Company will adopt using the optional transition method. The Company is implementing new lease accounting software and is designing new processes and internal controls. The Company continues to evaluate the standard, but has not quantified the impact of adoption on its financial statements. In March 2016, the FASB issued ASU No. 2016-09, Improvements to Employee Share-Based Payment Accounting , which provides amendments to simplify several aspects of the accounting for share-based payment transactions. Among other requirements in the new standard, the ASU requires that an entity- (i) recognize excess tax benefits and deficiencies related to employee share-based payment transactions in the provision for income taxes, instead of in equity; (ii) classify excess tax benefits as an operating activity on the statement of cash flows, instead of the previous classification as a financing activity; (iii) classify all cash payments made to taxing authorities on the employees’ behalf for withheld shares as financing activities on the statement of cash flows; and (iv) make a policy election either to estimate expected forfeitures or to account for them as they occur. The Company adopted the ASU prospectively in the first quarter of fiscal 2018. As a result, for the year ended February 2, 2018, the Company recognized a $22 million tax benefit, which is included in the provision for income taxes on the consolidated statements of income and comprehensive income and as an operating activity in the consolidated statement of cash flows. The amendments were applied prospectively and therefore, prior periods have not been adjusted and there was no impact to beginning retained earnings. The Company will continue to classify cash paid for tax withholding purposes as a financing activity in the statement of cash flows and to estimate forfeitures rather than account for them as they occur. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash , which requires that restricted cash be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company early adopted this new standard during the first quarter of fiscal 2018, which resulted in a $6 million increase to net cash used in investing activities for the year ended February 3, 2017. A reconciliation of cash, cash equivalents and restricted cash for each period presented is provided above under the heading “Cash, Cash Equivalents and Restricted Cash.” In February 2018, the FASB issued ASU No. 2018-02, Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income (Topic 220), which allows a reclassification from accumulated other comprehensive income (AOCI) to retained earnings for the deferred taxes previously recorded in AOCI that exceed the current federal tax rate of 21% resulting from the newly enacted corporate tax rate resulting from the Tax Act. The Company early adopted the provisions of the standard in the fourth quarter of fiscal 2018 and reclassified deferred taxes recorded in AOCI in excess of the newly enacted corporate tax rate to retained earnings, which affects only the period that the effects related to the Tax Act are recognized. The effect of adopting the ASU resulted in a decrease to retained earnings and corresponding increase to AOCI of $1 million , at February 2, 2018. In August 2018, the FASB issued ASU No. 2018-14, Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715- 20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans , which modifies the disclosure requirements for the defined benefit pension plans and other postretirement plans. ASU 2018-14 becomes effective for the Company in the first quarter of fiscal 2022 and is required to be adopted retrospectively. Early adoption is permitted. The Company early adopted the provisions of the standard in the fourth quarter of fiscal 2019 which did not result in a material impact to its financial statements. In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract , which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software (Subtopic 350-40) . ASU 2018-15 becomes effective for the Company in the first quarter of fiscal 2021 and may be adopted either retrospectively or prospectively. Early adoption is permitted. The Company is currently evaluating the impact of adoption of this standard on its financial statements. Other Accounting Standards Updates effective after February 1, 2019 are not expected to have a material effect on the Company’s financial statements. |
Revenue Recognition | Revenue Recognition The Company provides technical, engineering and enterprise IT services under long-term service arrangements primarily with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company also serves a number of state and local governments, foreign governments and U.S. commercial customers. The Company provides services under various contract types, including firm-fixed price (FFP), time-and-materials (T&M), cost-plus-fixed-fee, cost-plus-award-fee and cost-plus-incentive-fee contracts. Our service arrangements typically involve an annual base period of performance followed by renewal periods that are accounted for as separate contracts upon each exercise. The Company recognizes revenue when, or as, we satisfy our performance obligations under a contract. A performance obligation is the unit of account for revenue recognition and refers to a promise in a contract to transfer a distinct service or good to the customer. The majority of the Company’s contracts contain a single performance obligation involving a significant integration of various activities that are performed together to deliver a combined service or solution. Performance obligations may be satisfied over time or at a point in time, but the majority of the Company’s performance obligations are satisfied over time. The Company selects the appropriate measure of progress for revenue recognition based on the nature of the performance obligation, contract type and other pertinent contract terms. Over time performance obligations may involve a series of recurring services, such as network operations and maintenance, operation and program support services, IT outsourcing services, and other IT arrangements where the Company is standing ready to provide support, when-and-if needed. Such performance obligations are satisfied over time because the customer simultaneously receives and consumes the benefits of our performance as services are provided. Alternatively, over time performance obligations may involve the completion of a contract deliverable. Examples include systems integration, network engineering, network design, and engineering and build services. Deliverable-based performance obligations are satisfied over time when the Company’s performance creates or enhances an asset that is controlled by the customer, or when the Company’s performance creates an asset that is customized to the customer’s specifications and the Company has a right to payment, including profit, for work performed to date. For recurring services performance obligations, the Company measures progress using either a cost input measure (cost-to-cost), a time-elapsed output measure, or the as-invoiced practical expedient. A cost input measure typically is applied to the Company’s cost-reimbursable contracts. Revenue is recognized based on the ratio of costs incurred to total estimated costs at completion. Award or incentive fees are allocated to the distinct periods to which they relate. For fixed-price contracts, a time-elapsed output measure is applied to fixed consideration, such that revenue is recognized ratably over the period of performance. Where fixed-price contracts also provide for reimbursement of certain costs, such as travel or other direct costs, consideration may be attributed only to a distinct subset of time within the performance period. The Company’s time-and-material and fixed price-level of effort contracts generally qualify for the as-invoiced practical expedient. Revenue is recognized in the amount to which the Company has a contractual right to invoice. Contract modifications typically create new enforceable rights and obligations, which are accounted for prospectively. Changes to our estimates of the transaction price are recognized as a cumulative adjustment to revenue. For deliverable-based performance obligations satisfied over time, the Company recognizes revenue using a cost input measure of progress (cost-to-cost), regardless of contract type. Revenue is recognized based on the ratio of costs incurred to total estimated costs at completion, except for certain contracts for which the costs associated with significant materials or hardware procurements are excluded from the measure of progress and revenue is recognized on an adjusted cost-to-cost basis. Contract modifications typically change currently enforceable rights and obligations and are accounted for as a cumulative adjustment to revenue. Changes to our estimates of transaction price are recognized as a cumulative adjustment to revenue. For performance obligations in which the Company does not transfer control over time, we recognize revenue at the point-in-time when the customer obtains control of the related asset, usually at the time of shipment or upon delivery. The Company accrues for shipping and handling costs occurring after the point-in-time control transfers to the customer. Recognizing revenue on long-term contracts involves significant estimates and judgments. The transaction price is the estimated amount of consideration we expect to receive for performance under our contracts. Contract terms may include variable consideration, such as reimbursable costs, award and incentive fees, usage-based fees, service-level penalties, performance bonuses, or other provisions that can either increase or decrease the transaction price. Variable amounts generally are determined upon our achievement of certain performance metrics, program milestones or cost targets and may be based upon customer discretion. When making our estimates, the Company considers the customer, contract terms, the complexity of the work and related risks, the extent of customer discretion, historical experience and the potential of a significant reversal of revenue. The Company includes variable consideration in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Estimating costs at completion is complex due to the nature of the services being performed and the length of certain contracts. Contract costs generally include direct costs, such as labor, subcontract costs and materials, and indirect costs identifiable with or allocable to a specific contract. Management must make assumptions regarding the complexity of the work to be performed, the schedule and associated tasks, labor productivity and availability, increases in wages and prices of materials, execution by our subcontractors, overhead cost rates, and other variables. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by the Defense Contract Audit Agency ("DCAA"). Contract fulfillment costs are expensed as incurred except for certain costs incurred for transition, set-up or other fulfillment activities, which are capitalized and amortized on a straight-line basis over the expected period of benefit, which generally includes the base contract period of performance and anticipated renewal periods. The Company provides for anticipated losses on contracts with the U.S. government by recording an expense for the total expected loss during the period in which the losses are first determined. For contracts with multiple performance obligations, the Company allocates transaction price to each performance obligation based on the relative standalone selling price of each distinct performance obligation within the contract. Because the Company typically provides customized services and solutions that are specific to a single customer’s requirements, standalone selling price is most often estimated based on expected costs plus a reasonable profit margin. |
Changes in Estimates on Contracts | Changes in Estimates on Contracts Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss. |
Earnings Per Share (EPS) | Earnings per Share (EPS) Basic EPS is computed by dividing net income by the basic weighted average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards. |
Property, Plant and Equipment | Property, plant, and equipment are carried at cost net of accumulated depreciation and amortization. Purchases of property, plant, and equipment, as well as costs associated with major renewals and betterments, are capitalized. Maintenance, repairs and minor renewals and betterments are expensed as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed from the accounts and any resulting gain or loss is recognized. |
Business Overview and Summary_3
Business Overview and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Accounting Policies [Abstract] | |
Schedule Of Fiscal Period | The number of weeks for each quarter for fiscal 2019 , 2018 and 2017 are as follows: 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 |
Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets for the periods presented: 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 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets for the periods presented: 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 |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | The cumulative effect of adopting ASC 606 on the Company's opening balance sheet is as follows: 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 The amounts by which the Company’s financial statements were impacted by the adoption of ASC 606, as compared to the guidance in effect before the change, as of and for the twelve months ended February 1, 2019 were as follows: 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 |
Earnings Per Share, Share Rep_2
Earnings Per Share, Share Repurchases and Dividends (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted Average Number of Shares Outstanding Used to Compute Basic and Diluted EPS | A reconciliation of the weighted average number of shares outstanding used to compute basic and diluted EPS was: Year Ended February 1, February 2, February 3, (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 |
Stock-Based Awards Excluded from Weighted Average Number of Shares Outstanding Used to Compute Diluted EPS | The following stock-based awards were excluded from the weighted average number of shares outstanding used to compute diluted EPS: Year Ended February 1, February 2, February 3, (in millions) Antidilutive stock options excluded 0.2 0.2 0.2 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregated revenues by customer was as follows: 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 Disaggregated revenues by contract-type was as follows: 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 Disaggregated revenues by prime vs. subcontractor was as follows: Year Ended February 1, 2019 (in millions) Prime contractor to federal government $ 4,178 Subcontractor to federal government 334 Other 147 Total $ 4,659 |
Contract with Customer, Asset and Liability | Contract balances for the periods presented were as follows: Balance Sheet line item February 1, February 3, 2018 (1) (in millions) Billed and billable receivables, net (2) Receivables, net $ 740 $ 515 Contract assets - unbillable receivables Receivables, net 310 158 Contract assets - contract retentions Other assets 13 11 Contract liabilities - current Other accrued liabilities 34 15 Contract liabilities - non-current Other long-term liabilities $ 6 $ 1 (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. Aggregate changes in these estimates recognized in operating income were: Year Ended February 1, February 2, February 3, (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 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | Deferred costs for the periods presented were as follows: Balance Sheet line item February 1, 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. |
Engility Acquisition (Tables)
Engility Acquisition (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The purchase consideration for the acquisition of Engility was as follows: (in millions) Common stock issued to Engility shareholders (1) $ 1,086 Converted vesting stock awards assumed (2) 22 Cash consideration paid to extinguish Engility outstanding debt 1,052 Purchase price $ 2,160 (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 . |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The purchase accounting entries were recorded on a preliminary basis as follows: (in millions) Cash and cash equivalents $ 51 Receivables 351 Inventories 5 Prepaid expenses 5 Other current assets 15 Property, plant, and equipment 39 Deferred tax assets 91 Other assets 7 Intangible assets 648 Goodwill 1,257 Total assets acquired 2,469 Accounts payable 115 Accrued payroll and other employee benefits 30 Accrued vacation 39 Other accrued liabilities 58 Other long-term liabilities 54 Total liabilities assumed 296 Non-controlling interest 13 Net assets acquired $ 2,160 Amount of tax deductible goodwill $ 441 |
Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination | The following table summarizes the fair value of intangible assets and the related weighted average useful lives: 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 |
Schedule of Unaudited Pro Forma Financial Information | The following unaudited pro forma financial information presents the combined results of operations for Engility and the Company for the year ended February 1, 2019 and February 2, 2018, respectively: 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 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, all of which were finite-lived, consisted of the following: 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 |
Schedule of Estimated Annual Amortization Expense Related To Intangible Assets | The estimated annual amortization expense related to intangible assets as of February 1, 2019 is as follows: Fiscal Year Ending (in millions) 2020 $ 94 2021 64 2022 64 2023 65 2024 63 Thereafter 453 Total $ 803 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation and amortization is recognized using the methods and estimated useful lives as follows: Depreciation or amortization method Estimated useful lives (in years) February 1, February 2, (in millions) Computer equipment Straight-line or 3-10 $ 90 $ 75 Capitalized software and software licenses Straight-line or 3-10 61 58 Leasehold improvements Straight-line Shorter of lease term or 10 81 53 Office furniture and fixtures Straight-line or 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 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation and Related Tax Benefits | Stock-based compensation expense and related tax benefits recognized under the Plans were: Year Ended February 1, February 2, February 3, (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 |
Stock Option Activity | Stock option activity for the year ended February 1, 2019 was: 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 |
Schedule of Share-Based Compensation Activity Related to Exercise of Stock Options | The following table summarizes activity related to exercises of stock options: Year Ended February 1, February 2, February 3, (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 |
Weighted Average Grant Date Fair Value and Assumptions Used to Determine Fair Value of Stock Options Granted | The weighted average grant date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were: Year Ended February 1, February 2, February 3, 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 % |
Vesting Stock Award Activity | Vesting stock award activity for the year ended February 1, 2019 was: 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 |
Performance Share Award Activity | Performance share award activity for the year ended February 1, 2019 was: 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 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Retirement Benefits [Abstract] | |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | 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 |
Schedule of Amounts Recognized in Balance Sheet | Amounts recognized in the consolidated balance sheets consist of: 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 |
Schedule of Assumptions Used | The following assumptions were used to determine the benefit obligations: February 1, 2019 Pension Plan RHRA Benefit Plan Discount rate 4.06 % 3.82 % |
Schedule of Allocation of Plan Assets | The fair value measurement of plan asset by category at February 1, 2019 is as follows: 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 |
Schedule of Expected Benefit Payments | The following table sets forth the expected timing of benefit payments by fiscal year: 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 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision for income taxes for each of the periods presented include the following: Year Ended February 1, February 2, February 3, (in millions) Current: Federal $ 4 $ 3 $ 59 State 10 2 12 Deferred: Federal 17 26 2 State 2 4 (4 ) Total $ 33 $ 35 $ 69 |
Reconciliation of Provision for Income Taxes Computed by Statutory Federal Income Tax Rate | A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate to income before income taxes for each of the periods presented follows: Year Ended February 1, February 2, February 3, (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. |
Deferred Tax Assets and Liabilities | Deferred tax assets (liabilities) were comprised of: February 1, February 2, (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 ) |
Changes in Unrecognized Tax Benefits | The changes in the unrecognized tax benefits, excluding accrued interest and penalties, were: Year Ended February 1, February 2, February 3, (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 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Debt Disclosure [Abstract] | |
Long Term Debt | The Company’s long-term debt as of the periods presented was as follows: 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 |
Maturities of Long-term Debt | Maturities of long-term debt as of February 1, 2019 are: Fiscal Year Ending Total (in millions) 2020 $ 24 2021 70 2022 68 2023 147 2024 811 Thereafter 995 Total principal payments $ 2,115 |
Derivative Instruments Design_2
Derivative Instruments Designated as Cash Flow Hedges (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments Designated as Cash Flow Hedges | The Company’s derivative instruments designated as cash flow hedges consist of: Asset (Liability) Fair Value (1) at Notional Amount at February 1, 2019 Pay Fixed Rate Receive Variable Rate Settlement and Termination February 1, February 2, (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. |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income Attributable to the Company's Fixed Interest Rate Swap Cash Flow Hedges | The following table presents the changes in accumulated other comprehensive loss attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 11 . 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. |
Operating Leases (Tables)
Operating Leases (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Leases [Abstract] | |
Future Minimum Operating Lease Commitments | Future minimum operating lease commitments at February 1, 2019 are: Fiscal Year Ending (in millions) 2020 $ 55 2021 42 2022 36 2023 19 2024 16 Thereafter 43 Total $ 211 |
Selected Quarterly Financial _2
Selected Quarterly Financial Data (Unaudited) (Tables) | 12 Months Ended |
Feb. 01, 2019 | |
Quarterly Financial Information Disclosure [Abstract] | |
Selected Quarterly Financial Data (Unaudited) | Selected unaudited financial data for each quarter of the most recent two fiscal years was: 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 |
Business Overview and Summary_4
Business Overview and Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 12 Months Ended | 24 Months Ended | ||||
Feb. 02, 2018USD ($) | Feb. 01, 2019USD ($)segment | Feb. 02, 2018USD ($) | Feb. 03, 2017USD ($) | Feb. 01, 2019USD ($) | Feb. 03, 2018USD ($) | May 04, 2015 | |
Significant Accounting Policies [Line Items] | |||||||
Number of operating segments | segment | 3 | ||||||
Number of reportable segments | segment | 1 | ||||||
Total restructuring costs | $ 13,000,000 | $ 13,000,000 | |||||
Cash payments for restructuring costs | 5,000,000 | $ 1,000,000 | |||||
Statutory federal income tax rate (percent) | 21.00% | 33.70% | 35.00% | ||||
Income tax expense (benefit) | $ 19,000,000 | ||||||
Net benefit recorded related to the re-measurement of net deferred tax liabilities | $ 17,000,000 | ||||||
Additional benefit recorded related to the re-measurement of net deferred tax liabilities | $ 2,000,000 | ||||||
Outstanding payments | 31,000,000 | $ 47,000,000 | 31,000,000 | 47,000,000 | |||
Unbilled receivables, maximum expected period for billing and collection | 1 year | ||||||
Amount of progress payments received are offset against unbilled receivables | 20,000,000 | $ 26,000,000 | 20,000,000 | 26,000,000 | |||
Unbilled receivables | 11,000,000 | 11,000,000 | |||||
Provisions for inventory and deferred contract costs | 26,000,000 | ||||||
Impairment of goodwill and intangible assets | $ 0 | 0 | $ 0 | ||||
Operating cycle (in years) | greater than one year | ||||||
Internal research and development costs included in selling, general and administrative expenses | $ 5,000,000 | 4,000,000 | 4,000,000 | ||||
Retained earnings | 323,000,000 | 367,000,000 | 323,000,000 | 367,000,000 | $ 326,000,000 | ||
Other current assets | 29,000,000 | 25,000,000 | 29,000,000 | $ 25,000,000 | 14,000,000 | ||
Excess tax benefits from share-based award payments | $ 9,000,000 | 22,000,000 | 0 | ||||
Reclassification of AOCI due to the Tax Act | 0 | ||||||
Accounting Standards Update 2014-09, Revenue Recognition, Adjusted Cost-To-Cost Basis | |||||||
Significant Accounting Policies [Line Items] | |||||||
Inventory, prepaid expenses, and other current assets | (15,000,000) | ||||||
Accounting Standards Update 2016-09 | |||||||
Significant Accounting Policies [Line Items] | |||||||
Excess tax benefits from share-based award payments | 22,000,000 | ||||||
Scitor Holdings, Inc. | |||||||
Significant Accounting Policies [Line Items] | |||||||
Definitive agreement to acquire business, percentage of acquisition | 100.00% | ||||||
Employee Severance | |||||||
Significant Accounting Policies [Line Items] | |||||||
Total restructuring costs | 6,000,000 | 6,000,000 | |||||
Contract Termination | |||||||
Significant Accounting Policies [Line Items] | |||||||
Total restructuring costs | 7,000,000 | 7,000,000 | |||||
Retained Earnings | |||||||
Significant Accounting Policies [Line Items] | |||||||
Reclassification of AOCI due to the Tax Act | (1,000,000) | ||||||
Retained Earnings | Accounting Standards Update 2018-02 | |||||||
Significant Accounting Policies [Line Items] | |||||||
Reclassification of AOCI due to the Tax Act | (1,000,000) | ||||||
AOCI Attributable to Parent | |||||||
Significant Accounting Policies [Line Items] | |||||||
Reclassification of AOCI due to the Tax Act | 1,000,000 | ||||||
AOCI Attributable to Parent | Accounting Standards Update 2018-02 | |||||||
Significant Accounting Policies [Line Items] | |||||||
Reclassification of AOCI due to the Tax Act | 1,000,000 | ||||||
New Accounting Pronouncement, Early Adoption, Effect | Accounting Standards Update 2016-18 | |||||||
Significant Accounting Policies [Line Items] | |||||||
(Increase) decrease in net cash used in investing activities | $ 6,000,000 | ||||||
Difference between Revenue Guidance in Effect before and after Topic 606 | Accounting Standards Update 2014-09, Revenue Recognition, Adjusted Cost-To-Cost Basis | |||||||
Significant Accounting Policies [Line Items] | |||||||
Retained earnings | $ 3,000,000 | ||||||
Cost of Sales | |||||||
Significant Accounting Policies [Line Items] | |||||||
Total restructuring costs | 6,000,000 | 6,000,000 | |||||
Selling, General and Administrative Expenses | |||||||
Significant Accounting Policies [Line Items] | |||||||
Total restructuring costs | $ 7,000,000 | $ 7,000,000 | |||||
Forfeiture Support Associates J.V. | |||||||
Significant Accounting Policies [Line Items] | |||||||
Ownership percentage | 50.10% | 50.10% |
Business Overview and Summary_5
Business Overview and Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | Jan. 29, 2016 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 237 | $ 144 | ||
Restricted cash included in other assets | 9 | 8 | ||
Cash, cash equivalents and restricted cash | $ 246 | $ 152 | $ 218 | $ 209 |
Business Overview and Summary_6
Business Overview and Summary of Significant Accounting Policies - Schedule of Restatement to Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | ||||||||||
Feb. 01, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | May 04, 2018 | Feb. 02, 2018 | Nov. 03, 2017 | Aug. 04, 2017 | May 05, 2017 | Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | Feb. 03, 2018 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||||||||
Revenues | $ 1,192 | $ 1,177 | $ 1,115 | $ 1,175 | $ 1,128 | $ 1,145 | $ 1,078 | $ 1,103 | $ 4,659 | $ 4,454 | $ 4,442 | |
Assets | ||||||||||||
Receivables, net | 1,050 | 674 | 1,050 | 674 | $ 673 | |||||||
Inventories, net | 74 | 68 | 74 | 68 | 66 | |||||||
Other current assets | 25 | 29 | 25 | 29 | 14 | |||||||
Other assets | 104 | 20 | 104 | 20 | 31 | |||||||
Liabilities and Equity | ||||||||||||
Other accrued liabilities | 177 | 107 | 177 | 107 | 94 | |||||||
Deferred income taxes | 0 | 23 | 0 | 23 | 24 | |||||||
Other long-term liabilities | 102 | 45 | 102 | 45 | 47 | |||||||
Retained earnings | 367 | 323 | 367 | 323 | 326 | |||||||
Income Statement | ||||||||||||
Cost of revenues | 4,195 | 4,043 | 4,003 | |||||||||
Operating income | 7 | $ 73 | $ 74 | $ 66 | 62 | $ 72 | $ 59 | $ 63 | 220 | 256 | $ 263 | |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||||||||||
Assets | ||||||||||||
Receivables, net | 1,048 | 674 | 1,048 | 674 | ||||||||
Inventories, net | 78 | 68 | 78 | 68 | ||||||||
Other current assets | 29 | 29 | ||||||||||
Other assets | 93 | 20 | 93 | 20 | ||||||||
Liabilities and Equity | ||||||||||||
Other accrued liabilities | 174 | 107 | 174 | 107 | ||||||||
Deferred income taxes | 23 | 23 | ||||||||||
Other long-term liabilities | 100 | 45 | 100 | 45 | ||||||||
Retained earnings | 363 | $ 323 | 363 | $ 323 | ||||||||
Income Statement | ||||||||||||
Revenues | 4,672 | |||||||||||
Cost of revenues | 4,209 | |||||||||||
Operating income | 219 | |||||||||||
Accounting Standards Update 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | ||||||||||||
Assets | ||||||||||||
Receivables, net | 2 | 2 | (1) | |||||||||
Inventories, net | (4) | (4) | (2) | |||||||||
Other current assets | (15) | |||||||||||
Other assets | 11 | 11 | 11 | |||||||||
Liabilities and Equity | ||||||||||||
Other accrued liabilities | 3 | 3 | (13) | |||||||||
Deferred income taxes | 1 | |||||||||||
Other long-term liabilities | 2 | 2 | 2 | |||||||||
Retained earnings | $ 4 | 4 | $ 3 | |||||||||
Income Statement | ||||||||||||
Revenues | (13) | |||||||||||
Cost of revenues | (14) | |||||||||||
Operating income | $ 1 |
Earnings Per Share, Share Rep_3
Earnings Per Share, Share Repurchases and Dividends - Schedule of Weighted Average Shares Outstanding (Details) - shares shares in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Computation Of Earnings Per Share [Line Items] | |||
Basic weighted-average number of shares outstanding (in shares) | 43.4 | 43.3 | 44.5 |
Dilutive common share equivalents - stock options and other stock-based awards (in shares) | 0.7 | 1.2 | 1.4 |
Diluted weighted-average number of shares outstanding (in shares) | 44.1 | 44.5 | 45.9 |
Stock options | |||
Computation Of Earnings Per Share [Line Items] | |||
Antidilutive stock options excluded (in shares) | 0.2 | 0.2 | 0.2 |
Earnings Per Share, Share Rep_4
Earnings Per Share, Share Repurchases and Dividends - Narrative (Details) - $ / shares shares in Millions | Mar. 27, 2019 | Feb. 01, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | May 04, 2018 | Feb. 02, 2018 | Nov. 03, 2017 | Aug. 04, 2017 | May 05, 2017 | Feb. 03, 2017 | Nov. 04, 2016 | Aug. 05, 2016 | May 06, 2016 | Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | Mar. 28, 2019 | Dec. 15, 2016 |
Computation Of Earnings Per Share [Line Items] | ||||||||||||||||||
Cash dividends paid per share (in dollars per share) | $ 1.24 | $ 1.24 | $ 1.24 | |||||||||||||||
Cash dividends declared per share (in dollars per share) | $ 1.24 | $ 1.24 | $ 1.24 | |||||||||||||||
Subsequent Event | ||||||||||||||||||
Computation Of Earnings Per Share [Line Items] | ||||||||||||||||||
Cash dividends declared per share (in dollars per share) | $ 0.37 | |||||||||||||||||
Quarterly Dividend | ||||||||||||||||||
Computation Of Earnings Per Share [Line Items] | ||||||||||||||||||
Cash dividends paid per share (in dollars per share) | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | ||||||
Cash dividends declared per share (in dollars per share) | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | $ 0.31 | ||||||
Share Repurchase Plan | ||||||||||||||||||
Computation Of Earnings Per Share [Line Items] | ||||||||||||||||||
Increase in number of shares authorized to be repurchased under the repurchase plan (in shares) | 3.3 | |||||||||||||||||
Shares repurchased under the repurchase plan (in shares) | 9.6 | |||||||||||||||||
Share Repurchase Plan | Subsequent Event | ||||||||||||||||||
Computation Of Earnings Per Share [Line Items] | ||||||||||||||||||
Increase in number of shares authorized to be repurchased under the repurchase plan (in shares) | 4.6 | |||||||||||||||||
Share Repurchase Plan | Maximum | ||||||||||||||||||
Computation Of Earnings Per Share [Line Items] | ||||||||||||||||||
Shares authorized to be repurchased under the repurchase plan (in shares) | 11.8 | 11.8 | ||||||||||||||||
Share Repurchase Plan | Maximum | Subsequent Event | ||||||||||||||||||
Computation Of Earnings Per Share [Line Items] | ||||||||||||||||||
Shares authorized to be repurchased under the repurchase plan (in shares) | 16.4 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) $ in Millions | 12 Months Ended |
Feb. 01, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | |
Contract with customer, performance obligation satisfied in previous period | $ 8 |
Contract with customer, liability, revenue recognized | 10 |
Revenue, remaining performance obligation, amount | 3,800 |
Pre-contract costs | |
Disaggregation of Revenue [Line Items] | |
Capitalized contract cost, amortization | 15 |
Pre-contract cost, not awarded | |
Disaggregation of Revenue [Line Items] | |
Capitalized contract cost, amortization | 10 |
Fulfillment costs - current | |
Disaggregation of Revenue [Line Items] | |
Capitalized contract cost, amortization | $ 5 |
Revenues - Change in Estimates
Revenues - Change in Estimates on Contracts (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Revenue from Contract with Customer [Abstract] | |||
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 (in dollars per share) | $ 0.29 | $ (0.05) | $ 0.34 |
Diluted EPS impact (in dollars per share) | $ 0.29 | $ (0.04) | $ 0.33 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 01, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | May 04, 2018 | Feb. 02, 2018 | Nov. 03, 2017 | Aug. 04, 2017 | May 05, 2017 | Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 1,192 | $ 1,177 | $ 1,115 | $ 1,175 | $ 1,128 | $ 1,145 | $ 1,078 | $ 1,103 | $ 4,659 | $ 4,454 | $ 4,442 |
Prime contractor to federal government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 4,178 | ||||||||||
Subcontractor to federal government | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 334 | ||||||||||
Other | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 147 | ||||||||||
Cost reimbursement | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 2,306 | ||||||||||
Time and materials (T&M) | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 1,086 | ||||||||||
Firm-fixed price (FFP) | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 1,267 | ||||||||||
Department of Defense | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 2,805 | ||||||||||
Other federal government agencies | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | 1,707 | ||||||||||
Commercial, state and local | |||||||||||
Disaggregation of Revenue [Line Items] | |||||||||||
Revenues | $ 147 |
Revenues - Contract Balances (D
Revenues - Contract Balances (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 |
Disaggregation of Revenue [Line Items] | ||
Allowance for doubtful accounts receivable | $ 2 | $ 1 |
Receivables, net | ||
Disaggregation of Revenue [Line Items] | ||
Billed and billable receivables, net | 740 | 515 |
Contract assets | 310 | 158 |
Other assets | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 13 | 11 |
Other accrued liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 34 | 15 |
Other long-term liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 6 | $ 1 |
Revenues - Deferred Costs (Deta
Revenues - Deferred Costs (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 |
Other current assets | Pre-contract costs | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, net | $ 1 | $ 1 |
Other current assets | Fulfillment costs - current | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, net | 0 | 3 |
Other assets | Fulfillment costs - non-current | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, net | $ 13 | $ 0 |
Revenues - Performance Obligati
Revenues - Performance Obligation (Details) - Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-02-02 | Feb. 01, 2019 | Nov. 02, 2018 |
Next Twelve Months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, percentage | 80.00% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year | |
Next Twenty Four Months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Revenue, remaining performance obligation, percentage | 90.00% | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Engility Acquisition - Narrativ
Engility Acquisition - Narrative (Details) $ in Millions | Jan. 14, 2019USD ($) | Feb. 01, 2019USD ($) | Feb. 02, 2018USD ($) | Feb. 03, 2017USD ($) | Oct. 31, 2018USD ($) |
Business Acquisition [Line Items] | |||||
Principal amount of long-term debt | $ 2,115 | $ 1,035 | |||
Payments of debt issuance costs | 26 | 0 | $ 2 | ||
Payments of stock issuance costs | 2 | 0 | 0 | ||
Acquisition and integration costs (Note 4) | 86 | $ 0 | $ 10 | ||
Engility Holdings, Inc | |||||
Business Acquisition [Line Items] | |||||
Business combination, equity right conversion, common shares conversion ratio | 0.45 | ||||
Business acquisition, transaction costs | 118 | ||||
Acquisition related costs | $ 63 | 32 | |||
Payments of debt issuance costs | 31 | ||||
Payments of stock issuance costs | $ 2 | ||||
Revenues | 98 | ||||
Loss from acquisition | 19 | ||||
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | Third Amended Credit Agreement | |||||
Business Acquisition [Line Items] | |||||
Debt instrument, term | 5 years | ||||
Principal amount of long-term debt | $ 1,100 | $ 1,100 | |||
Acquisition-related Costs | Engility Holdings, Inc | |||||
Business Acquisition [Line Items] | |||||
Acquisition related costs | 31 | ||||
Integration related costs | $ 55 |
Engility Acquisition - Summary
Engility Acquisition - Summary of Preliminary Purchase Consideration - (Details) - Engility Holdings, Inc $ / shares in Units, shares in Millions, $ in Millions | Jan. 14, 2019USD ($)$ / sharesshares |
Business Acquisition [Line Items] | |
Cash consideration paid to extinguish Engility outstanding debt | $ 1,052 |
Purchase price | $ 2,160 |
Share price (in dollars per share) | $ / shares | $ 65.03 |
Common Stock | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred, equity interests issued and issuable | $ 1,086 |
New shares (in shares) | shares | 16.8 |
Restricted Stock | |
Business Acquisition [Line Items] | |
Business combination, consideration transferred, equity interests issued and issuable | $ 22 |
Engility Acquisition - Fair Val
Engility Acquisition - Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Jan. 14, 2019 | Feb. 02, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,120 | $ 863 | |
Engility Holdings, Inc | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 51 | ||
Receivables | 351 | ||
Inventories | 5 | ||
Prepaid expenses | 5 | ||
Other current assets | 15 | ||
Property, plant, and equipment | 39 | ||
Deferred tax assets | 91 | ||
Other assets | 7 | ||
Intangible assets | 648 | ||
Goodwill | 1,257 | ||
Total assets acquired | 2,469 | ||
Accounts payable | 115 | ||
Accrued payroll and other employee benefits | 30 | ||
Accrued vacation | 39 | ||
Other accrued liabilities | 58 | ||
Other long-term liabilities | 54 | ||
Total liabilities assumed | 296 | ||
Non-controlling interest | 13 | ||
Net assets acquired | 2,160 | ||
Amount of tax deductible goodwill | $ 441 | $ 441 |
Engility Acquisition - Fair v_2
Engility Acquisition - Fair value of Intangible Assets and Related Weighted Average Useful Lives (Details) - Engility Holdings, Inc $ in Millions | Jan. 14, 2019USD ($) |
Business Acquisition [Line Items] | |
Amount | $ 648 |
Weighted-Average Amortization Period | 13 years |
Backlog | |
Business Acquisition [Line Items] | |
Amount | $ 30 |
Weighted-Average Amortization Period | 1 year |
Developed technology | |
Business Acquisition [Line Items] | |
Amount | $ 2 |
Weighted-Average Amortization Period | 10 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Amount | $ 616 |
Weighted-Average Amortization Period | 14 years |
Engility Acquisition - Pro Form
Engility Acquisition - Pro Forma (Details) - Engility Holdings, Inc - USD ($) $ in Millions | 12 Months Ended | |
Feb. 01, 2019 | Feb. 02, 2018 | |
Business Acquisition [Line Items] | ||
Revenues | $ 6,426 | $ 6,352 |
Net income attributable to common stockholders | $ 260 | $ 140 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Goodwill | $ 2,120,000,000 | $ 863,000,000 | |
Increase in goodwill | 1,257,000,000 | ||
Impairment of goodwill | 0 | 0 | $ 0 |
Amortization expense related to intangible assets | 24,000,000 | 21,000,000 | 26,000,000 |
Intangible asset impairment losses | $ 0 | $ 0 | $ 0 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 882 | $ 234 |
Accumulated amortization | (79) | (55) |
Net carrying value | 803 | 179 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 850 | 234 |
Accumulated amortization | (78) | (55) |
Net carrying value | 772 | 179 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 30 | 0 |
Accumulated amortization | (1) | 0 |
Net carrying value | 29 | 0 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 2 | 0 |
Accumulated amortization | 0 | 0 |
Net carrying value | $ 2 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated Annual Amortization Expense (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2020 | $ 94 | |
2021 | 64 | |
2022 | 64 | |
2023 | 65 | |
2024 | 63 | |
Thereafter | 453 | |
Net carrying value | $ 803 | $ 179 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 01, 2019 | Feb. 02, 2018 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | $ 262 | $ 204 |
Accumulated depreciation and amortization | (159) | (143) |
Property, plant, and equipment, net | $ 103 | 61 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line or declining balance | |
Property, plant, and equipment | $ 90 | 75 |
Computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 3 years | |
Computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 10 years | |
Capitalized software and software licenses | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line or declining balance | |
Property, plant, and equipment | $ 61 | 58 |
Capitalized software and software licenses | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 3 years | |
Capitalized software and software licenses | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 10 years | |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line | |
Estimated useful lives (in years) | Shorter of lease term or 10 | |
Estimated useful lives (in years) | 10 years | |
Property, plant, and equipment | $ 81 | 53 |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line or declining balance | |
Property, plant, and equipment | $ 19 | 11 |
Office furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 3 years | |
Office furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 10 years | |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line | |
Estimated useful lives (in years) | 40 years | |
Property, plant, and equipment | $ 7 | 7 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 3 | 0 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | $ 1 | $ 0 |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 23 | $ 23 | $ 24 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |||||
Feb. 01, 2019USD ($)plan$ / sharesshares | Feb. 02, 2018USD ($)$ / shares | Feb. 03, 2017USD ($)$ / shares | Jan. 14, 2019 | Jun. 30, 2014shares | Jan. 31, 2014shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of stock based compensation plans | plan | 4 | |||||
Employee Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized compensation cost, net of estimated forfeitures | $ 2 | |||||
Expected weighted-average period of recognition, years | 329 days | |||||
Performance share awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of target shares | 150.00% | |||||
Unrecognized compensation cost, net of estimated forfeitures | $ 5.7 | |||||
Expected weighted-average period of recognition, years | 1 year 256 days | |||||
Awards granted (in dollars per share) | $ / shares | $ 85.31 | $ 72.91 | $ 53.34 | |||
Fair value of vesting awards that vested | $ 3 | |||||
Below threshold level of performance (in shares) | shares | 0 | |||||
Percentage of awards presented for target number of shares | 100.00% | |||||
Share awards granted upon future achievement (in shares) | shares | 100,000 | |||||
Vesting stock awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Awards assumed (in shares) | shares | 642,000 | |||||
Awards assumed (in dollars per share) | $ / shares | $ 65.03 | |||||
Unrecognized compensation cost, net of estimated forfeitures | $ 37 | |||||
Expected weighted-average period of recognition, years | 1 year 219 days | |||||
Awards granted (in dollars per share) | $ / shares | $ 84.28 | $ 72.90 | $ 53.62 | |||
Fair value of vesting awards that vested | $ 60 | $ 58 | $ 64 | |||
Share-based Payment Arrangement | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock granted, value, share-based compensation | 42 | |||||
Accelerated compensation cost | 14 | |||||
Share-based Payment Arrangement, Pre-combination | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock granted, value, share-based compensation | 22 | |||||
Share-based Payment Arrangement, Post-combination | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Stock granted, value, share-based compensation | $ 20 | |||||
2013 Equity Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares authorized under plan (in shares) | shares | 8,500,000 | 5,700,000 | ||||
2013 Equity Incentive Plan | Vesting Stock Awards And Employee Stock Option Granted Prior To Fiscal Twenty Fifteen | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of stock awards vest or exercisable after one year | 20.00% | |||||
Percentage of stock awards vest or exercisable after two years | 20.00% | |||||
Percentage of stock awards vest or exercisable after three years | 20.00% | |||||
Percentage of stock awards vest or exercisable after four years | 40.00% | |||||
2013 Equity Incentive Plan | Employee Stock Option Granted Thereafter | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of stock awards vest or exercisable after one year | 33.00% | |||||
Percentage of stock awards vest or exercisable after two years | 33.00% | |||||
Percentage of stock awards vest or exercisable after three years | 33.00% | |||||
2013 Equity Incentive Plan | Vesting Stock Awards Granted Thereafter | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of stock awards vest or exercisable after one year | 25.00% | |||||
Percentage of stock awards vest or exercisable after two years | 25.00% | |||||
Percentage of stock awards vest or exercisable after three years | 25.00% | |||||
Percentage of stock awards vest or exercisable after four years | 25.00% | |||||
2013 Equity Incentive Plan | Employee Stock Option | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Contractual term | 7 years | |||||
2013 Equity Incentive Plan | Employee Stock Option | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Contractual term | 10 years | |||||
2013 Equity Incentive Plan | Directors | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Vesting period | 1 year | |||||
Employee Stock Purchase Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares authorized under plan (in shares) | shares | 3,400,000 | |||||
Percentage of market price for employee purchase program for stock purchases during non-compensatory period | 5.00% | |||||
Employee Stock Purchase Plan | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Percentage of market price for employee purchase program for stock purchases during non-compensatory period | 15.00% | |||||
Engility Holdings, Inc | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Business combination, equity right conversion, common shares conversion ratio | 0.45 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense and Related Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 45 | $ 27 | $ 31 |
Tax benefits recognized from stock-based compensation | 20 | 32 | 12 |
Stock options | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 3 | 3 | 4 |
Vesting stock awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | 37 | 21 | 24 |
Performance share awards | |||
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items] | |||
Total stock-based compensation expense | $ 5 | $ 3 | $ 3 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |
Feb. 01, 2019 | Feb. 02, 2018 | |
Shares of stocks under stock options | ||
Outstanding, beginning balance (in shares) | 1.4 | |
Options granted (in shares) | 0.1 | |
Options forfeited or expired (in shares) | 0 | |
Options exercised (in shares) | (0.4) | |
Outstanding, ending balance (in shares) | 1.1 | 1.4 |
Options exercisable, ending balance (in shares) | 0.8 | |
Options vested and expected to vest, ending balance (in shares) | 1 | |
Weighted average exercise price | ||
Outstanding beginning balance (in dollars per share) | $ 43.07 | |
Options granted (in dollars per share) | 85.62 | |
Options forfeited or expired (in dollars per share) | 0 | |
Options exercised (in dollars per share) | 32.78 | |
Outstanding ending balance (in dollars per share) | 53.67 | $ 43.07 |
Options exercisable (in dollars per share) | 45.78 | |
Vested and expected to vest in the future (in dollars per share) | $ 53.43 | |
Weighted average remaining contractual term | ||
Outstanding | 3 years 219 days | 3 years 6 months |
Options exercisable | 2 years 292 days | |
Vested and expected to vest | 3 years 183 days | |
Aggregate intrinsic value | ||
Options outstanding | $ 18 | $ 46 |
Options exercisable | 17 | |
Vested and expected to vest | $ 18 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Shared-Based Compensation Cost Related to Stock Options (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||
Cash received from exercises of stock options | $ 0 | $ 0 | $ 0 |
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 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value and Valuation Assumptions of Stock Options (Details) - Employee Stock Option - $ / shares | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average grant-date fair value | $ 19.48 | $ 16.34 | $ 10.20 |
Expected term (in years) | 4 years | 4 years 4 months 24 days | 4 years 4 months 24 days |
Expected volatility | 29.00% | 28.20% | 28.90% |
Risk-free interest rate | 2.50% | 1.70% | 1.20% |
Dividend yield | 1.60% | 1.50% | 2.70% |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Vesting Stock Award Activity (Details) - Vesting stock awards - $ / shares shares in Thousands | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Shares of stock under stock awards | |||
Unvested awards, beginning balance (in shares) | 900 | ||
Awards granted (in shares) | 400 | ||
Awards assumed (in shares) | 642 | ||
Awards forfeited (in shares) | (100) | ||
Awards vested (in shares) | (800) | ||
Unvested awards, ending balance (in shares) | 1,000 | 900 | |
Weighted average grant date fair value | |||
Unvested awards beginning balance (in dollars per share) | $ 59.93 | ||
Awards granted (in dollars per share) | 84.28 | $ 72.90 | $ 53.62 |
Awards assumed (in dollars per share) | 65.03 | ||
Awards forfeited (in dollars per share) | 72.28 | ||
Awards vested (in dollars per share) | 60.36 | ||
Unvested awards ending balance (in dollars per share) | $ 70.76 | $ 59.93 |
Stock-Based Compensation - Sc_5
Stock-Based Compensation - Schedule of Performance Share Award Activity (Details) - Performance share awards - $ / shares shares in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Shares of stock under performance shares | |||
Unvested awards, beginning balance (in shares) | 0.2 | ||
Performance shares granted (in shares) | 0.1 | ||
Performance shares forfeited (in shares) | (0.1) | ||
Performance shares vested (in shares) | (0.1) | ||
Performance shares adjustment (in shares) | 0 | ||
Unvested awards, ending balance (in shares) | 0.1 | 0.2 | |
Weighted average grant date fair value | |||
Unvested awards beginning balance (in dollars per share) | $ 62.96 | ||
Performance shares granted (in dollars per share) | 85.31 | $ 72.91 | $ 53.34 |
Performance shares forfeited (in dollars per share) | 64.62 | ||
Performance shares vested (in dollars per share) | 53.34 | ||
Performance shares adjustment (in dollars per share) | 0 | ||
Unvested awards ending balance (in dollars per share) | $ 79.12 | $ 62.96 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | Jan. 14, 2019 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Company contributions to defined contribution plans expense | $ 46 | $ 42 | $ 48 | |
Plan assets, amount | 52 | |||
Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Defined benefit plan liability | 19 | $ 37 | ||
Benefit obligation | 71 | 71 | 86 | |
Plan assets, amount | $ 52 | $ 49 | $ 49 | |
Long-term rate of return | 5.50% | |||
Defined Benefit Plan, Equity Securities, US | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Target allocation, percentage | 44.00% | |||
Defined Benefit Plan, Equity Securities, Non-US | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Target allocation, percentage | 20.00% | |||
Fixed Income Securities | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Target allocation, percentage | 31.00% | |||
Defined Benefit Plan, Cash and Cash Equivalents | Pension Plan | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Target allocation, percentage | 5.00% |
Retirement Plans - Obligations
Retirement Plans - Obligations and Funded Status (Details) $ in Millions | 12 Months Ended |
Feb. 01, 2019USD ($) | |
Change in plan assets: | |
Fair value of plan assets at end of year | $ 52 |
Pension Plan | |
Change in benefit obligation: | |
Benefit obligation at acquisition | 71 |
Benefit obligation at end of year | 71 |
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) |
RHRA Benefit Plan | |
Change in benefit obligation: | |
Benefit obligation at acquisition | 15 |
Benefit obligation at end of year | 15 |
Change in plan assets: | |
Fair value of plan assets at acquisition | 0 |
Employer contributions | 0 |
Fair value of plan assets at end of year | 0 |
Unfunded status | $ (15) |
Retirement Plans - Amounts Reco
Retirement Plans - Amounts Recognized In The Balance Sheet (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Jan. 14, 2019 |
Pension Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other accrued liabilities | $ 0 | |
Other long-term liabilities | 19 | |
Net amount recognized | 19 | $ 37 |
RHRA Benefit Plan | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other accrued liabilities | 1 | |
Other long-term liabilities | 14 | |
Net amount recognized | $ 15 |
Retirement Plans - Assumptions
Retirement Plans - Assumptions Used (Details) | Feb. 01, 2019 |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Benefit obligation, discount rate | 4.06% |
RHRA Benefit Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
Benefit obligation, discount rate | 3.82% |
Retirement Plans - Fair Value M
Retirement Plans - Fair Value Measurement Plan Assets (Details) $ in Millions | Feb. 01, 2019USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | $ 52 |
Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 49 |
Significant Other Observable Inputs (Level 2) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 0 |
Significant Unobservable Inputs (Level 3) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 3 |
Mutual funds | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 49 |
Mutual funds | Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 49 |
Mutual funds | Significant Other Observable Inputs (Level 2) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 0 |
Mutual funds | Significant Unobservable Inputs (Level 3) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 0 |
Guaranteed deposit account | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 3 |
Guaranteed deposit account | Quoted Prices in Active Markets for Identical Assets (Level 1) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 0 |
Guaranteed deposit account | Significant Other Observable Inputs (Level 2) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | 0 |
Guaranteed deposit account | Significant Unobservable Inputs (Level 3) | |
Defined Benefit Plan Disclosure [Line Items] | |
Plan assets, amount | $ 3 |
Retirement Plans - Estimated Fu
Retirement Plans - Estimated Future Benefit Payment (Details) $ in Millions | Feb. 01, 2019USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | $ 6 |
2021 | 6 |
2022 | 6 |
2023 | 6 |
2024 | 7 |
Five subsequent fiscal years | 32 |
Pension Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 5 |
2021 | 5 |
2022 | 5 |
2023 | 5 |
2024 | 5 |
Five subsequent fiscal years | 24 |
RHRA Benefit Plan | |
Defined Benefit Plan Disclosure [Line Items] | |
2020 | 1 |
2021 | 1 |
2022 | 1 |
2023 | 1 |
2024 | 2 |
Five subsequent fiscal years | $ 8 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Current: | |||
Federal | $ 4 | $ 3 | $ 59 |
State | 10 | 2 | 12 |
Deferred: | |||
Federal | 17 | 26 | 2 |
State | 2 | 4 | (4) |
Total | $ 33 | $ 35 | $ 69 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Income Tax Disclosure [Abstract] | |||
Statutory federal income tax rate (percent) | 21.00% | 33.70% | 35.00% |
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 | 0 | (17) | 0 |
Manufacturer's deduction | 0 | (1) | (2) |
Non-deductible compensation | 3 | 0 | 0 |
Non-deductible acquisition costs | 3 | 0 | 0 |
Excess tax benefits for stock-based compensation | (9) | (22) | 0 |
Other | (1) | (1) | 0 |
Total | $ 33 | $ 35 | $ 69 |
Effective income tax rate (percent) | 19.40% | 16.50% | 32.70% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Feb. 01, 2019 | Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | Jan. 14, 2019 | Jan. 29, 2016 | |
Income Taxes [Line Items] | ||||||
Non-deductible acquisition costs | $ 3 | $ 0 | $ 0 | |||
Excess tax benefits from share-based award payments | 9 | 22 | 0 | |||
Federal income tax reduction per the Tax Act | 0 | $ (17) | $ 0 | |||
Net deferred tax assets | $ 54 | 54 | ||||
Carryforward amount, eliminated | 3 | |||||
Scitor Holdings, Inc. | ||||||
Income Taxes [Line Items] | ||||||
Tax deductible goodwill | $ 136 | |||||
Tax deductible identified intangible assets | 163 | |||||
Federal and state net operating loss | $ 90 | |||||
Engility Holdings, Inc | ||||||
Income Taxes [Line Items] | ||||||
Tax deductible goodwill | 441 | 441 | $ 441 | |||
Tax deductible identified intangible assets | 255 | 255 | ||||
Federal and state net operating loss | 483 | 483 | ||||
State | ||||||
Income Taxes [Line Items] | ||||||
Operating loss carryforwards | 30 | 30 | ||||
Carryforward amount | 9 | 9 | ||||
Settlement with Taxing Authority | Minimum | ||||||
Income Taxes [Line Items] | ||||||
Reversal unrecognized tax benefits reasonably possible | 2 | 2 | ||||
Settlement with Taxing Authority | Maximum | ||||||
Income Taxes [Line Items] | ||||||
Reversal unrecognized tax benefits reasonably possible | 4 | 4 | ||||
Statute of Limitations Expiration | ||||||
Income Taxes [Line Items] | ||||||
Reversal unrecognized tax benefits reasonably possible | $ 4 | $ 4 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 |
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
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 | 0 |
Accumulated other comprehensive loss | 5 | 0 |
Valuation allowance | (5) | (1) |
Total deferred tax assets | 214 | 55 |
Deferred revenue | (1) | (20) |
Fixed asset basis differences | 0 | (6) |
Purchased intangible assets | (159) | (51) |
Accumulated other comprehensive income | 0 | (1) |
Total deferred tax liabilities | (160) | (78) |
Net deferred tax assets | $ 54 | |
Net deferred tax liabilities | $ (23) |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at beginning of the year | $ 7 | $ 5 | $ 0 |
Additions for acquired unrecognized tax benefits | 3 | 0 | 0 |
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 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 |
Debt Instrument [Line Items] | ||
Total principal payments | $ 2,115 | $ 1,035 |
Principal amount of long-term debt, current | 24 | 41 |
Principal amount of long-term debt, non current | 2,091 | 994 |
Unamortized Debt Issuance Costs | (26) | (11) |
Unamortized debt issuance costs, current | 0 | 0 |
Unamortized debt issuance costs, non current | (26) | (11) |
Total long-term debt | 2,089 | 1,024 |
Less current portion | 24 | 41 |
Total long-term debt, net of current portion | $ 2,065 | 983 |
Term Loan A Facility due October 2023 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 3.9989% | |
Effective interest rate | 4.33% | |
Total principal payments | $ 1,068 | 0 |
Unamortized Debt Issuance Costs | (14) | 0 |
Total long-term debt | 1,054 | 0 |
Term Loan A Facility due August 2021 | ||
Debt Instrument [Line Items] | ||
Total principal payments | 0 | 635 |
Unamortized Debt Issuance Costs | 0 | (2) |
Total long-term debt | $ 0 | 633 |
Term Loan B Facility due October 2025 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.2489% | |
Effective interest rate | 4.46% | |
Total principal payments | $ 1,047 | 0 |
Unamortized Debt Issuance Costs | (12) | 0 |
Total long-term debt | 1,035 | 0 |
Term Loan B Facility due May 2022 | ||
Debt Instrument [Line Items] | ||
Total principal payments | 0 | 400 |
Unamortized Debt Issuance Costs | 0 | (9) |
Total long-term debt | $ 0 | $ 391 |
Debt Obligations - Narrative (D
Debt Obligations - Narrative (Details) | Oct. 31, 2018USD ($) | Feb. 07, 2018USD ($) | Mar. 28, 2019USD ($) | Feb. 01, 2019USD ($) | Feb. 02, 2018USD ($) | Feb. 03, 2017USD ($) | Jan. 14, 2019USD ($) |
Debt Instrument [Line Items] | |||||||
Deferred financing fees | $ 26,000,000 | $ 0 | $ 2,000,000 | ||||
Principal amount of long-term debt | 2,115,000,000 | 1,035,000,000 | |||||
Interest expense | 53,000,000 | 44,000,000 | 52,000,000 | ||||
Loss on extinguishment of debt | 4,000,000 | 0 | $ 2,000,000 | ||||
February 2019 Credit Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, maximum borrowing capacity | 2,500,000,000 | ||||||
Term Loan A Facility due October 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of long-term debt | 1,068,000,000 | 0 | |||||
Term Loan B Facility due October 2025 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of long-term debt | $ 1,047,000,000 | 0 | |||||
Amortization rate | 0.25% | ||||||
Credit Facility due August 2021 | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, maximum borrowing capacity | 1,200,000,000 | ||||||
Term Loan A Facility due August 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of long-term debt | $ 0 | 635,000,000 | |||||
Term Loan B Facility due May 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of long-term debt | 0 | 400,000,000 | |||||
Revolving Credit Facility | Minimum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee percentage | 0.20% | ||||||
Revolving Credit Facility | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Commitment fee percentage | 0.35% | ||||||
Term Loan B Facility Due October Two Thousand Twenty Five | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 0.75% | ||||||
Term Loan B Facility Due October Two Thousand Twenty Five | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 1.75% | ||||||
Term Loan B Facility Due October Two Thousand Twenty Five | Third Amended Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of long-term debt | $ 1,050,000,000 | ||||||
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | Minimum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 0.25% | ||||||
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | Minimum | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 1.25% | ||||||
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | Maximum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 1.00% | ||||||
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | Maximum | London Interbank Offered Rate (LIBOR) | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 2.00% | ||||||
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | Third Amended Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Principal amount of long-term debt | $ 1,100,000,000 | $ 1,100,000,000 | |||||
Long term debt, gross, merger termination feature | 200,000,000 | ||||||
Secured Debt | Term Loan A Facility due October 2023 | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | 1,068,000,000 | ||||||
Secured Debt | Term Loan B Facility due October 2025 | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | 1,047,000,000 | ||||||
Secured Debt | Term Loan A Facility due August 2021 | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | 635,000,000 | ||||||
Secured Debt | Term Loan B Facility due May 2022 | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, face amount | 400,000,000 | ||||||
Third Amended Credit Agreement | |||||||
Debt Instrument [Line Items] | |||||||
Deferred financing fees | 31,000,000 | ||||||
Interest expense | 5,000,000 | ||||||
Loss on extinguishment of debt | 4,000,000 | ||||||
Payments of financing fees | $ 26,000,000 | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | |||||||
Debt Instrument [Line Items] | |||||||
Deferred financing fees | $ 1,000,000 | ||||||
Payments of financing fees | $ 2,000,000 | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Term Loan A Facility due August 2021 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, reduction to interest rate margin | 0.25% | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Term Loan A Facility due August 2021 | Minimum | Eurocurrency Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 1.25% | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Term Loan A Facility due August 2021 | Minimum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 0.25% | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Term Loan A Facility due August 2021 | Maximum | Eurocurrency Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 2.00% | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Term Loan A Facility due August 2021 | Maximum | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 1.00% | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Term Loan B Facility due May 2022 | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, reduction to interest rate margin | 0.50% | ||||||
Interest rate margin under credit agreement | 2.00% | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Term Loan B Facility due May 2022 | Eurocurrency Rate | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument floor rate | 0.75% | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Term Loan B Facility due May 2022 | Base Rate | |||||||
Debt Instrument [Line Items] | |||||||
Interest rate margin under credit agreement | 1.00% | ||||||
Second Amended and Restated Credit Agreement, as Amended on August 23, 2016 | Revolving Credit Facility | |||||||
Debt Instrument [Line Items] | |||||||
Debt instrument, reduction to interest rate margin | 0.25% | ||||||
Revolving Credit Facility | February 2019 Credit Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 400,000,000 | $ 400,000,000 | |||||
Revolving Credit Facility | Credit Facility due August 2021 | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Credit facility, maximum borrowing capacity | $ 200,000,000 | ||||||
Until July 31, 2016 | Third Amended Credit Agreement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Credit agreement financial covenant, leverage ratio | 3.75 | ||||||
After July 31, 2016 | Third Amended Credit Agreement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Credit agreement financial covenant, leverage ratio | 4.5 | ||||||
Third Term | Third Amended Credit Agreement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Credit agreement financial covenant, leverage ratio | 4 | ||||||
Fourth Term | Third Amended Credit Agreement | Maximum | |||||||
Debt Instrument [Line Items] | |||||||
Credit agreement financial covenant, leverage ratio | 4.25 | ||||||
Subsequent Event | |||||||
Debt Instrument [Line Items] | |||||||
Principal payments on borrowings | $ 150,000,000 | ||||||
Debt Instrument, Redemption, Period One | Term Loan A Facility due October 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Amortization rate | 1.25% | ||||||
Debt Instrument, Redemption, Period Two | Term Loan A Facility due October 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Amortization rate | 1.875% | ||||||
Debt Instrument, Redemption, Period Three | Term Loan A Facility due October 2023 | |||||||
Debt Instrument [Line Items] | |||||||
Amortization rate | 2.50% |
Debt Obligations - Maturities o
Debt Obligations - Maturities of Long-term Debt (Details) - USD ($) $ in Millions | Feb. 01, 2019 | Feb. 02, 2018 |
Debt Disclosure [Abstract] | ||
2020 | $ 24 | |
2021 | 70 | |
2022 | 68 | |
2023 | 147 | |
2024 | 811 | |
Thereafter | 995 | |
Total principal payments | $ 2,115 | $ 1,035 |
Derivative Instruments Design_3
Derivative Instruments Designated as Cash Flow Hedges - Schedule of Derivative Instruments Designated as Cash Flow Hedges (Details) - USD ($) | Oct. 31, 2018 | Feb. 01, 2019 | Jan. 14, 2019 | Jun. 12, 2018 | Feb. 02, 2018 |
Derivative [Line Items] | |||||
Notional Amount | $ 1,353,000,000 | ||||
Asset (Liability) Fair Value | (24,000,000) | $ 5,000,000 | |||
Interest rate swaps 1 | Interest Rate Swaps | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 0 | ||||
Pay Fixed Rate | 1.41% | ||||
Receive Variable Rate | 1-month LIBOR | ||||
Settlement and Termination | Monthly through September 26, 2018 | ||||
Asset (Liability) Fair Value | $ 0 | 1,000,000 | |||
Interest rate swaps 2 | Interest Rate Swaps | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 0 | ||||
Pay Fixed Rate | 1.88% | ||||
Receive Variable Rate | 3-month LIBOR(3) | ||||
Settlement and Termination | Quarterly through May 7, 2020 (2) | ||||
Asset (Liability) Fair Value | $ 0 | 4,000,000 | |||
Derivative, cash received on hedge | $ 6,000,000 | ||||
Accumulated other comprehensive income loss cumulative Changes In Net Gain Loss From Cash Flow Hedges Effect Before Tax1 | 6,000,000 | ||||
Interest rate swaps 3 | Interest Rate Swaps | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 353,000,000 | ||||
Pay Fixed Rate | 2.78% | ||||
Receive Variable Rate | 1-month LIBOR | ||||
Settlement and Termination | Monthly through July 30, 2021 | ||||
Asset (Liability) Fair Value | $ (2,000,000) | 0 | |||
Derivative instrument floor rate | 0.75% | ||||
Interest rate swaps 4 | Interest Rate Swaps | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 500,000,000 | ||||
Pay Fixed Rate | 3.07% | ||||
Receive Variable Rate | 1-month LIBOR | ||||
Settlement and Termination | Monthly through October 31, 2025 | ||||
Asset (Liability) Fair Value | $ (21,000,000) | 0 | |||
Interest rate swaps 5 | Interest Rate Swaps | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 500,000,000 | ||||
Pay Fixed Rate | 2.49% | ||||
Receive Variable Rate | 1-month LIBOR | ||||
Settlement and Termination | Monthly through October 31, 2023 | ||||
Asset (Liability) Fair Value | $ (1,000,000) | $ 0 | |||
Cash Flow Hedging | Interest rate swaps 4 | Interest Rate Swaps | |||||
Derivative [Line Items] | |||||
Notional Amount | $ 500,000,000 | $ 500,000,000 | $ 365,000,000 |
Derivative Instruments Design_4
Derivative Instruments Designated as Cash Flow Hedges - Narrative (Details) - Interest Rate Swaps - USD ($) | 12 Months Ended | ||
Feb. 02, 2018 | Feb. 03, 2017 | Feb. 01, 2019 | |
Derivative [Line Items] | |||
Unrealized gains from accumulated other comprehensive loss | $ 0 | ||
Cash Flow Hedging | |||
Derivative [Line Items] | |||
Ineffective portion of the unrealized change in fair value, net of tax | $ 0 | $ 0 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss by Component (Details) - Unrealized Gains (losses) on Fixed Interest Rate Swap Cash Flow Hedges - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | $ 5 | $ (3) | $ (14) |
Other comprehensive income before reclassifications | (23) | 5 | 3 |
Amounts reclassified from accumulated other comprehensive loss | 1 | (3) | (8) |
Net other comprehensive income | (24) | 8 | 11 |
Balance, end of period | $ (19) | $ 5 | $ (3) |
Operating Leases - Narrative (D
Operating Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Leases [Abstract] | |||
Rental expense for facilities and equipment | $ 46 | $ 48 | $ 65 |
Operating Leases - Future Minim
Operating Leases - Future Minimum Operating Lease Commitments (Details) $ in Millions | Feb. 01, 2019USD ($) |
Leases [Abstract] | |
2020 | $ 55 |
2021 | 42 |
2022 | 36 |
2023 | 19 |
2024 | 16 |
Thereafter | 43 |
Total | $ 211 |
Business Segment Information (D
Business Segment Information (Details) - segment | 12 Months Ended | ||
Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | 3 | ||
Number of reportable segments | 1 | ||
Sales Revenue, Net | Customer Concentration Risk | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 95.00% | 95.00% | 95.00% |
Legal Proceedings and Commitm_2
Legal Proceedings and Commitments and Contingencies (Details) - USD ($) | May 04, 2015 | Sep. 30, 2016 | Aug. 31, 2015 | May 04, 2018 | Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 |
Commitments And Contingencies [Line Items] | |||||||
Payments to acquire businesses, net of cash acquired | $ 1,001,000,000 | $ 0 | $ 0 | ||||
Contingent losses, loss sharing percentage in excess of threshold | 30.00% | ||||||
Government Investigations and Reviews | |||||||
Commitments And Contingencies [Line Items] | |||||||
Estimated net amounts to be refunded for potential adjustments | $ 63,000,000 | ||||||
Letters of Credit | |||||||
Commitments And Contingencies [Line Items] | |||||||
Outstanding obligations | 16,000,000 | ||||||
Surety Bonds | |||||||
Commitments And Contingencies [Line Items] | |||||||
Outstanding obligations | $ 18,000,000 | ||||||
Former Parent | |||||||
Commitments And Contingencies [Line Items] | |||||||
Contingent losses, loss sharing percentage in excess of threshold | 70.00% | ||||||
Former Parent | Minimum | |||||||
Commitments And Contingencies [Line Items] | |||||||
Contingent losses, threshold for loss sharing with former parent | $ 50,000,000 | ||||||
Scitor Holdings, Inc. | |||||||
Commitments And Contingencies [Line Items] | |||||||
Payments to acquire businesses, net of cash acquired | $ 764,000,000 | ||||||
Business combination amount deposited to adjustment and indemnification escrow accounts included in cash consideration paid | $ 43,000,000 | ||||||
Business combination amount deposited to adjustment and indemnification escrow accounts amounts released | $ 13,000,000 | $ 3,000,000 | |||||
Business combination, escrow deposit disbursements received | $ 6,000,000 | ||||||
Escrow deposit | $ 0 |
Selected Quarterly Financial _3
Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 12 Months Ended | |||||||||
Feb. 01, 2019 | Nov. 02, 2018 | Aug. 03, 2018 | May 04, 2018 | Feb. 02, 2018 | Nov. 03, 2017 | Aug. 04, 2017 | May 05, 2017 | Feb. 01, 2019 | Feb. 02, 2018 | Feb. 03, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |||||||||||
Revenues | $ 1,192 | $ 1,177 | $ 1,115 | $ 1,175 | $ 1,128 | $ 1,145 | $ 1,078 | $ 1,103 | $ 4,659 | $ 4,454 | $ 4,442 |
Operating income | 7 | 73 | 74 | 66 | 62 | 72 | 59 | 63 | 220 | 256 | 263 |
Net income (loss) | $ (9) | $ 48 | $ 49 | $ 49 | $ 51 | $ 43 | $ 36 | $ 49 | $ 137 | $ 179 | $ 143 |
Basic EPS (in dollars per share) | $ (0.20) | $ 1.13 | $ 1.15 | $ 1.16 | $ 1.19 | $ 0.99 | $ 0.83 | $ 1.12 | $ 3.16 | $ 4.13 | $ 3.21 |
Diluted EPS (in dollars per share) | $ (0.20) | $ 1.11 | $ 1.13 | $ 1.13 | $ 1.16 | $ 0.98 | $ 0.80 | $ 1.08 | $ 3.11 | $ 4.02 | $ 3.12 |
Uncategorized Items - saic-2019
Label | Element | Value |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 3,000,000 |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 3,000,000 |