Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Oct. 28, 2022 | Nov. 18, 2022 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Oct. 28, 2022 | |
Document Transition Report | false | |
Entity File Number | 001-35832 | |
Entity Registrant Name | Science Applications International Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-1932921 | |
Entity Address, Address Line One | 12010 Sunset Hills Road | |
Entity Address, City or Town | Reston | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 20190 | |
City Area Code | 703 | |
Local Phone Number | 676-4300 | |
Title of 12(b) Security | Common Stock, par value $.0001 per share | |
Trading Symbol | SAIC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,629,268 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001571123 | |
Current Fiscal Year End Date | --02-03 |
CONDENSED AND CONSOLIDATED STAT
CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Revenues | $ 1,909 | $ 1,898 | $ 5,736 | $ 5,612 |
Cost of revenues | 1,688 | 1,685 | 5,070 | 4,950 |
Selling, general and administrative expenses | 87 | 87 | 272 | 252 |
Acquisition and integration costs | 1 | 12 | 11 | 36 |
Other operating income | 0 | 0 | 0 | (3) |
Operating income | 133 | 114 | 383 | 377 |
Interest expense | 30 | 26 | 87 | 79 |
Other (income) expense, net | 3 | 0 | 6 | (3) |
Income before income taxes | 100 | 88 | 290 | 301 |
Provision for income taxes | (20) | (17) | (62) | (66) |
Net income | 80 | 71 | 228 | 235 |
Net income attributable to non-controlling interest | 0 | 0 | 2 | 1 |
Net income attributable to common stockholders | $ 80 | $ 71 | $ 226 | $ 234 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 1.45 | $ 1.24 | $ 4.06 | $ 4.05 |
Diluted (in dollars per share) | $ 1.45 | $ 1.22 | $ 4.04 | $ 4.01 |
CONDENSED AND CONSOLIDATED ST_2
CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Statement - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 80 | $ 71 | $ 228 | $ 235 |
Net unrealized gain on derivative instruments | 29 | 17 | 63 | 32 |
Total other comprehensive income, net of tax | 29 | 17 | 63 | 32 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Comprehensive income | 109 | 88 | 291 | 267 |
Comprehensive income attributable to non-controlling interest | 0 | 0 | 2 | 1 |
Comprehensive income attributable to common stockholders | $ 109 | $ 88 | $ 289 | $ 266 |
CONDENSED AND CONSOLIDATED BALA
CONDENSED AND CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 53 | $ 106 |
Receivables, net | 1,059 | 1,015 |
Inventory, prepaid expenses and other current assets | 135 | 142 |
Total current assets | 1,247 | 1,263 |
Goodwill | 2,911 | 2,913 |
Intangible assets, net | 1,040 | 1,132 |
Property, plant, and equipment (net of accumulated depreciation of $194 million and $182 million at October 28, 2022 and January 28, 2022, respectively) | 95 | 100 |
Operating lease right of use assets | 166 | 209 |
Other assets | 169 | 129 |
Total assets | 5,628 | 5,746 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 819 | 840 |
Accrued payroll and employee benefits | 396 | 364 |
Long-term debt, current portion | 15 | 148 |
Total current liabilities | 1,230 | 1,352 |
Long-term debt, net of current portion | 2,358 | 2,370 |
Operating lease liabilities | 155 | 192 |
Deferred income taxes | 0 | 43 |
Other long-term liabilities | 189 | 160 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Common stock | 0 | 0 |
Additional paid-in capital | 679 | 838 |
Retained earnings | 981 | 818 |
Accumulated other comprehensive income (loss) | 26 | (37) |
Total common stockholders' equity | 1,686 | 1,619 |
Non-controlling interest | 10 | 10 |
Total stockholders' equity | 1,696 | 1,629 |
Total liabilities and stockholders' equity | $ 5,628 | $ 5,746 |
CONDENSED AND CONSOLIDATED BA_2
CONDENSED AND CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Statement of Financial Position [Abstract] | ||
Property, plant and equipment, accumulated depreciation | $ 194 | $ 182 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 55,000,000 | 56,000,000 |
Common stock, shares outstanding (in shares) | 55,000,000 | 56,000,000 |
CONDENSED AND CONSOLIDATED ST_3
CONDENSED AND CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions | Total | Shares of common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Non-controlling interest |
Balance, beginning (in shares) at Jan. 29, 2021 | 58,000,000 | |||||
Beginning Balance at Jan. 29, 2021 | $ 1,552 | $ 1,004 | $ 627 | $ (89) | $ 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 235 | 234 | 1 | |||
Issuances of stock (in shares) | 1,000,000 | |||||
Issuances of stock | 12 | 12 | ||||
Net other comprehensive income | 32 | 32 | ||||
Cash dividends | (65) | (65) | ||||
Stock-based compensation | 21 | 21 | ||||
Repurchases of stock (in shares) | (2,000,000) | |||||
Repurchases of stock | (141) | (141) | ||||
Distributions to non-controlling interest | (1) | (1) | ||||
Balance, ending (in shares) at Oct. 29, 2021 | 57,000,000 | |||||
Ending Balance at Oct. 29, 2021 | 1,645 | 896 | 796 | (57) | 10 | |
Balance, beginning (in shares) at Jul. 30, 2021 | 58,000,000 | |||||
Beginning Balance at Jul. 30, 2021 | 1,628 | 945 | 747 | (74) | 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 71 | 71 | ||||
Issuances of stock (in shares) | 1,000,000 | |||||
Issuances of stock | 4 | 4 | ||||
Net other comprehensive income | 17 | 17 | ||||
Cash dividends | (22) | (22) | ||||
Stock-based compensation | 11 | 11 | ||||
Repurchases of stock (in shares) | (2,000,000) | |||||
Repurchases of stock | (64) | (64) | ||||
Distributions to non-controlling interest | 0 | 0 | ||||
Balance, ending (in shares) at Oct. 29, 2021 | 57,000,000 | |||||
Ending Balance at Oct. 29, 2021 | $ 1,645 | 896 | 796 | (57) | 10 | |
Balance, beginning (in shares) at Jan. 28, 2022 | 56,000,000 | 56,000,000 | ||||
Beginning Balance at Jan. 28, 2022 | $ 1,629 | 838 | 818 | (37) | 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 228 | 226 | 2 | |||
Issuances of stock (in shares) | 1,000,000 | |||||
Issuances of stock | 13 | 13 | ||||
Net other comprehensive income | 63 | 63 | ||||
Cash dividends | (63) | (63) | ||||
Stock-based compensation | 19 | 19 | ||||
Repurchases of stock (in shares) | (2,000,000) | |||||
Repurchases of stock | (191) | (191) | ||||
Distributions to non-controlling interest | $ (2) | (2) | ||||
Balance, ending (in shares) at Oct. 28, 2022 | 55,000,000 | 55,000,000 | ||||
Ending Balance at Oct. 28, 2022 | $ 1,696 | 679 | 981 | 26 | 10 | |
Balance, beginning (in shares) at Jul. 29, 2022 | 55,000,000 | |||||
Beginning Balance at Jul. 29, 2022 | 1,653 | 723 | 923 | (3) | 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 80 | 80 | ||||
Issuances of stock | 5 | 5 | ||||
Net other comprehensive income | 29 | 29 | ||||
Cash dividends | (22) | (22) | ||||
Stock-based compensation | 11 | 11 | ||||
Repurchases of stock | (60) | (60) | ||||
Distributions to non-controlling interest | $ 0 | 0 | ||||
Balance, ending (in shares) at Oct. 28, 2022 | 55,000,000 | 55,000,000 | ||||
Ending Balance at Oct. 28, 2022 | $ 1,696 | $ 679 | $ 981 | $ 26 | $ 10 |
CONDENSED AND CONSOLIDATED ST_4
CONDENSED AND CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends paid per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 1.11 | $ 1.11 |
Cash dividends declared per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 1.11 | $ 1.11 |
CONDENSED AND CONSOLIDATED ST_5
CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Oct. 28, 2022 | Oct. 29, 2021 | |
Cash flows from operating activities: | ||
Net income | $ 228 | $ 235 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 118 | 123 |
Amortization of off-market customer contracts | (12) | (30) |
Amortization of debt issuance costs | 8 | 6 |
Deferred income taxes | (29) | 41 |
Stock-based compensation expense | 35 | 35 |
Gain on divestitures | 0 | (2) |
Impairment of assets | 0 | 10 |
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of acquisitions: | ||
Receivables | (44) | (123) |
Inventory, prepaid expenses and other current assets | 7 | 28 |
Other assets | 5 | (8) |
Accounts payable and accrued liabilities | (21) | 47 |
Accrued payroll and employee benefits | 32 | 45 |
Income taxes payable | 59 | 0 |
Operating lease assets and liabilities, net | (1) | 4 |
Other long-term liabilities | 2 | 4 |
Net cash provided by operating activities | 387 | 415 |
Cash flows from investing activities: | ||
Expenditures for property, plant, and equipment | (18) | (27) |
Purchases of marketable securities | (5) | (5) |
Sales of marketable securities | 3 | 4 |
Cash paid for acquisitions, net of cash acquired | 0 | (247) |
Proceeds from divestitures | 0 | 8 |
Other | (3) | (5) |
Net cash used in investing activities | (23) | (272) |
Cash flows from financing activities: | ||
Dividend payments to stockholders | (63) | (65) |
Principal payments on borrowings | (780) | (84) |
Issuances of stock | 12 | 12 |
Stock repurchased and retired or withheld for taxes on equity awards | (208) | (154) |
Proceeds from borrowings | 630 | 116 |
Debt issuance costs | (6) | 0 |
Distributions to non-controlling interest | (2) | (1) |
Net cash used in financing activities | (417) | (176) |
Net decrease in cash, cash equivalents and restricted cash | (53) | (33) |
Cash, cash equivalents and restricted cash at beginning of period | 115 | 190 |
Cash, cash equivalents and restricted cash at end of period | $ 62 | $ 157 |
Business Overview and Summary o
Business Overview and Summary of Significant Accounting Policies | 9 Months Ended |
Oct. 28, 2022 | |
Accounting Policies [Abstract] | |
Business Overview and Summary of Significant Accounting Policies | Business Overview and Summary of Significant Accounting Policies: Overview Science Applications International Corporation (collectively, with its consolidated subsidiaries, the “Company”) is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S. government. The Company provides these services for large, complex projects with a targeted emphasis on higher-end, differentiated technology services and solutions that accelerate and transform secure and resilient digital environments through system development, modernization, integration, and sustainment to drive enterprise and mission outcomes. The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. Each of the Company’s two customer facing operating sectors is focused on providing both (1) growth and technology accelerating solutions and (2) core IT service offerings to one or more agencies of the U.S. federal government. Growth and technology accelerating solutions include the delivery of secure cloud modernization, outcome based enterprise IT as-a-service, and the integration, production and modernization of defense systems. Core IT services include systems engineering, the operation and maintenance of existing IT systems and networks, and logistics and supply chain solutions. During the second quarter of fiscal 2022, the Company completed the acquisition of Halfaker and Associates, LLC (Halfaker), a mission focused, pure-play health IT company, growing the Company's digital transformation portfolio. Additionally, the Company acquired Koverse, a software company that provides a data management platform enabling artificial intelligence and machine learning on complex sensitive data. Principles of Consolidation and Basis of Presentation The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. The financial statements are unaudited, but in the opinion of management include all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended January 28, 2022. Non-controlling Interest. The Company holds a 50.1% majority interest in Forfeiture Support Associates J.V. (FSA). The results of operations of FSA are included in the Company's condensed and consolidated statements of income and comprehensive income and statements of cash flows. The non-controlling interest reported on the condensed and consolidated balance sheets represents the portion of FSA's equity that is attributable to the non-controlling interest. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates. Reporting Periods The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2023 began on January 29, 2022 and ends on February 3, 2023, while fiscal 2022 began on January 30, 2021 and ended on January 28, 2022. Operating Cycle The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts. Derivative Instruments Designated as Cash Flow Hedges Derivative instruments are recorded on the condensed and consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges. Marketable Securities Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1). As of October 28, 2022 and January 28, 2022, the fair value of our investments totaled $26 million and $28 million, respectively, and are included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed and consolidated balance sheets for the periods presented: October 28, January 28, (in millions) Cash and cash equivalents $ 53 $ 106 Restricted cash included in inventory, prepaid expenses and other current assets 5 5 Restricted cash included in other assets 4 4 Cash, cash equivalents and restricted cash $ 62 $ 115 Acquisition and Integration Costs Acquisition-related costs that are not part of the purchase price consideration are generally expensed as incurred, except for certain costs that are deferred in connection with the issuance of debt. These costs typically include transaction-related costs, such as finder’s fees, legal, accounting, and other professional costs. Integration-related costs represent costs directly related to combining the Company and its acquired businesses. Integration-related costs typically include strategic consulting services, facility consolidations, employee-related costs, such as retention and severance, costs to integrate information technology infrastructure, enterprise planning systems, processes, and other non-recurring integration-related costs. Acquisition and integration costs are presented together as acquisition and integration costs on the condensed and consolidated statements of income. The amounts recognized in acquisition and integration costs on the condensed and consolidated statements of income are as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Acquisition (1) $ (1) $ — $ (2) $ 3 Integration (2) 2 12 13 33 Total acquisition and integration costs $ 1 $ 12 $ 11 $ 36 (1) Acquisition expenses for the three and nine months ended October 28, 2022 reflects amounts recognized to reduce the fair value of the Koverse earnout liability. Acquisition expenses for the nine months ended October 29, 2021 are related to the acquisitions of Halfaker and Koverse. See Note 4 for additional information related to the acquisitions. (2) Integration expenses for the nine months ended October 29, 2021 include $10 million for the impairment of assets. Restructuring During the three and nine months ended October 28, 2022, the Company incurred $5 million and $7 million, respectively, of restructuring costs related to the consolidation of certain facilities and other costs associated with the optimization of business processes. These costs are presented within selling, general and administrative expenses in the condensed and consolidated statements of income. Accounting Standards Updates In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) , which requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. These amendments are effective for fiscal years beginning after December 15, 2022, except for the requirement to provide rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured at the acquisition date in accordance with Topic 606 as if the acquirer had originated the contracts. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and must be applied prospectively. Early adoption is permitted. The Company adopted the requirements of ASU 2021-08 on a prospective basis effective the first day of fiscal 2023. |
Earnings Per Share, Share Repur
Earnings Per Share, Share Repurchases and Dividends | 9 Months Ended |
Oct. 28, 2022 | |
Earnings Per Share [Abstract] | |
Earnings Per Share, Share Repurchases and Dividends | Earnings Per Share, Share Repurchases and Dividends: Earnings Per Share (EPS) Basic EPS is computed by dividing net income attributable to common stockholders by the basic weighted-average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards. The following table provides a reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS for the periods presented: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Basic weighted-average number of shares outstanding 55.0 57.5 55.6 57.8 Dilutive common share equivalents - stock options and other stock-based awards 0.5 0.5 0.4 0.6 Diluted weighted-average number of shares outstanding 55.5 58.0 56.0 58.4 Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three and nine months ended October 28, 2022 and October 29, 2021 were immaterial. Share Repurchases The Company may repurchase shares in accordance with established repurchase plans. The Company retires its common stock upon repurchase with the excess over par value allocated to additional paid-in capital. The Company has not made any material purchases of common stock other than in connection with established share repurchase plans. In June 2022, the number of shares of our common stock that may be repurchased under our existing repurchase plan was increased by 8.0 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 24.4 million shares. As of October 28, 2022, we have repurchased approximately 16.5 million shares of common stock under the program. Dividends The Company declared and paid a quarterly dividend of $0.37 per share of its common stock during the three months ended October 28, 2022. Subsequent to the end of the quarter, on November 29, 2022, the Company's Board of Directors declared a quarterly dividend of $0.37 per share of the Company's common stock payable on January 27, 2023 to stockholders of record on January 13, 2023. |
Revenues
Revenues | 3 Months Ended |
Oct. 28, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues: Changes in Estimates on Contracts Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can occur routinely over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. Many of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss. Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions, except per share amounts) Net (unfavorable) favorable adjustments $ (6) $ — $ 4 $ 9 Net (unfavorable) favorable adjustments, after tax (5) — 3 7 Diluted EPS impact $ (0.09) $ — $ 0.05 $ 0.12 Revenues were $2 million lower and $7 million higher for the three and nine months ended October 28, 2022, respectively, and $1 million and $21 million higher for the three and nine months ended October 29, 2021, respectively, due to net revenue recognized from performance obligations satisfied in prior periods. Disaggregation of Revenues The Company's revenues are generated primarily from long-term contracts with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company disaggregates revenues by customer, contract-type and prime versus subcontractor to the federal government. Disaggregated revenues by customer were as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Department of Defense $ 969 $ 920 $ 2,799 $ 2,740 Other federal government agencies 903 940 2,827 2,762 Commercial, state and local 37 38 110 110 Total $ 1,909 $ 1,898 $ 5,736 $ 5,612 Disaggregated revenues by contract-type were as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Cost reimbursement $ 1,071 $ 1,045 $ 3,201 $ 3,028 Time and materials (T&M) 363 363 1,077 1,139 Firm-fixed price (FFP) 475 490 1,458 1,445 Total $ 1,909 $ 1,898 $ 5,736 $ 5,612 Disaggregated revenues by prime versus subcontractor were as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Prime contractor to federal government $ 1,725 $ 1,722 $ 5,212 $ 5,069 Subcontractor to federal government 147 138 414 433 Other 37 38 110 110 Total $ 1,909 $ 1,898 $ 5,736 $ 5,612 Contract Balances Contract balances for the periods presented were as follows: Balance Sheet line item October 28, January 28, (in millions) Billed and billable receivables, net (1) Receivables, net $ 580 $ 615 Contract assets - unbillable receivables Receivables, net 479 400 Contract assets - contract retentions Other assets 16 17 Contract liabilities - current Accounts payable and accrued liabilities 35 55 Contract liabilities - non-current Other long-term liabilities $ 5 $ 9 (1) Net of allowance of $3 million and $4 million as of October 28, 2022 and January 28, 2022, respectively. During the three and nine months ended October 28, 2022, the Company recognized revenues of $4 million and $39 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 28, 2022. During the three and nine months ended October 29, 2021, the Company recognized revenues of $8 million and $72 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 29, 2021. Remaining Performance Obligations As of October 28, 2022, the Company had $5.0 billion of remaining performance obligations. Remaining performance obligations exclude any variable consideration that is allocated entirely to unsatisfied performance obligations on our supply chain contracts. The Company expects to recognize revenue on approximately 85% of the remaining performance obligations over the next 12 months and approximately 95% over the next 24 months, with the remaining recognized thereafter. Lessor Revenue The Company leases IT equipment and hardware to its customers. All of the Company’s lessor arrangements are operating leases. Operating lease revenue is recognized on a straight-line basis over the term of the lease. Operating lease income is reported as revenue on the condensed and consolidated statements of income. During the nine months ended October 28, 2022, the Company recognized revenue of $23 million from the exercise of purchase options under certain lessor arrangements. Operating lease income was immaterial for the three and nine months ended October 28, 2022 and $3 million and $14 million for the three and nine months ended October 29, 2021, respectively. |
Acquisitions
Acquisitions | 9 Months Ended |
Oct. 28, 2022 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions: Halfaker On July 2, 2021, the Company completed the acquisition of Halfaker, a mission focused, pure-play health IT company for a purchase price of $228 million, net of $3 million cash acquired. The Company funded the transaction from increased borrowings and cash on hand. During the first quarter of fiscal 2023, the Company made fair value adjustments decreasing goodwill and increasing customer relationships intangible assets by $2 million. The Company has completed the determination of fair values of the acquired assets and liabilities assumed. The allocation of the purchase price resulted in goodwill of $104 million and intangible assets of $114 million, both of which are deductible for income tax purposes. The recognized goodwill is primarily associated with future customer relationships and an acquired assembled work force. The intangible assets consist of customer relationships of $97 million and backlog of $17 million that will be amortized over a period of nine years and one year, respectively. The Company made additional cash payments of $21 million in March 2022 associated with certain change in control provisions that are recognized as post-combination expense. Koverse On May 3, 2021, the Company acquired Koverse, a software company that provides a data management platform enabling artificial intelligence and machine learning on complex sensitive data, for a purchase price of $30 million, net of $2 million cash acquired. The purchase price included $3 million of contingent consideration, representing the acquisition date fair value recognized for up to $27 million gross of potential future earnout payments based on the achievement of certain revenue targets over the next four years. The Company has completed the allocation of the purchase price which resulted in goodwill of $21 million and intangible assets of $10 million, which are both not deductible for income tax purposes. The goodwill is primarily associated with intellectual capital, future customer relationships, and an acquired assembled work force. The intangible assets, which primarily consist of developed technology, are being amortized over a weighted-average period of seven years. As of October 28, 2022, the Company has recognized $11 million of the additional $13 million of post-combination compensation expense associated with certain employee retention agreements. Unisys Federal |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Notes) | 9 Months Ended |
Oct. 28, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: Goodwill Goodwill had a carrying value of $2,911 million and $2,913 million as of October 28, 2022 and January 28, 2022, respectively. There were no impairments of goodwill during the periods presented. Intangible Assets Intangible assets, all of which were finite-lived, consisted of the following: October 28, 2022 January 28, 2022 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value (in millions) Customer relationships $ 1,467 $ (435) $ 1,032 $ 1,467 $ (351) $ 1,116 Backlog — — — 17 (10) 7 Developed technology 10 (2) 8 10 (2) 8 Trade name 1 (1) — 1 — 1 Total intangible assets $ 1,478 $ (438) $ 1,040 $ 1,495 $ (363) $ 1,132 Amortization expense related to intangible assets was $29 million and $94 million for the three and nine months ended October 28, 2022, respectively, and $33 million and $94 million for the three and nine months ended October 29, 2021, respectively. There were no intangible asset impairment losses during the periods presented. As of October 28, 2022, the estimated future annual amortization expense related to intangible assets is as follows: Fiscal Year (in millions) Remainder of 2023 $ 31 2024 115 2025 115 2026 115 2027 115 Thereafter 549 Total $ 1,040 Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, and other factors. |
Income Taxes
Income Taxes | 9 Months Ended |
Oct. 28, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The Company's effective income tax rate was 20.3% and 21.3% for the three and nine months ended October 28, 2022, respectively, and 19.4% and 22.0% for the three and nine months ended October 29, 2021, respectively. The Company’s effective tax rate was higher for the three months ended October 28, 2022 compared to the prior year period primarily due to a lower deduction for foreign-derived intangible income. The Company’s effective tax rate was lower for the nine months ended October 28, 2022 compared to the prior year period primarily due to tax benefits recorded in fiscal 2023 from the completion of prior year tax return planning efforts including foreign-derived intangible income studies. Tax rates for the three and nine months ended October 28, 2022 were lower than the combined federal and state statutory rates due to excess tax benefits related to employee stock-based compensation, research and development tax credits, a deduction for foreign-derived intangible income, and other permanent book tax differences. As of January 28, 2022, the net deferred tax liability balance was $43 million and is presented as deferred income taxes on the condensed and consolidated balance sheets. As of October 28, 2022, the net deferred tax asset balance is $3 million, which is presented in other assets on the condensed and consolidated balance sheets and is due to capitalization of certain research and development expenses required under the Tax Cuts and Jobs Act of 2017. |
Debt Obligations
Debt Obligations | 9 Months Ended |
Oct. 28, 2022 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations: The Company’s long-term debt as of the dates presented was as follows: October 28, 2022 January 28, 2022 Stated Effective Principal Unamortized Net Principal Unamortized Net (in millions) Term Loan A Facility due June 2027 4.38 % 4.50 % $ 1,230 $ (5) $ 1,225 $ — $ — $ — Term Loan A Facility due October 2023 — % — % — — — 785 (5) 780 Term Loan A2 Facility due October 2023 — % — % — — — 100 — 100 Term Loan B Facility due October 2025 5.01 % 5.22 % 488 (3) 485 983 (7) 976 Term Loan B2 Facility due March 2027 5.01 % 5.44 % 272 (4) 268 272 (5) 267 Senior Notes due April 2028 4.88 % 5.11 % 400 (5) 395 400 (5) 395 Total long-term debt $ 2,390 $ (17) $ 2,373 $ 2,540 $ (22) $ 2,518 Less current portion 15 — 15 148 — 148 Total long-term debt, net of current portion $ 2,375 $ (17) $ 2,358 $ 2,392 $ (22) $ 2,370 As of October 28, 2022, the Company has a $3.0 billion secured credit facility (the Credit Facility) consisting of a Term Loan A Facility due June 2027, a Term Loan B Facility due October 2025, a Term Loan B2 Facility due March 2027 (together, the Term Loan Facilities), and a $1.0 billion Revolving Credit Facility due June 2027. During the quarter, the Company made a $90 million voluntary principal prepayment on the Term Loan B Facility due October 2025. During the nine months ended October 28, 2022, the Company borrowed and repaid $200 million under the Revolving Credit Facility. There was no balance outstanding on the Revolving Credit Facility as of October 28, 2022. As of October 28, 2022, the Company was in compliance with the covenants under its Credit Facility. On June 30, 2022, the Company executed the Fifth Amendment to the Third Amended and Restated Credit Agreement (Fifth Amendment), which established, among other things, a $1,230 million senior secured term loan credit facility (Term Loan A Facility due June 2027) and increased the Revolving Credit Facility commitment from $400 million to $1,000 million. The entire Term Loan A Facility due June 2027 was immediately borrowed by the Company and the proceeds were used to pay in full the outstanding principal balances under the Term Loan A Facility due October 2023 and Term Loan A2 Facility due October 2023 and to prepay $400 million of principal on the Term Loan B Facility due October 2025. For the three months ended July 29, 2022, the Company wrote off deferred debt issuance costs of $3 million associated with the Term Loan B Facility due October 2025 voluntary principal prepayments which was recognized in interest expense. Borrowings under the Term Loan A Facility due June 2027 amortize quarterly beginning on October 31, 2023 at 1.250% of the original borrowed amount thereunder, with such quarterly amortization increasing to 1.875% on October 31, 2024 and to 2.500% on October 31, 2025. The Term Loan A Facility due June 2027 may be prepaid at any time without penalty and is subject to the same mandatory prepayments, including from excess cash flow, as the Company’s existing term loans under the Credit Facility. As a result of the Fifth Amendment, the maturity date for the Revolving Credit Facility was extended to, and the maturity date of the Term Loan A Facility due June 2027 is, the earlier of June 30, 2027 or 91 days prior to the earliest term loan “B” facility maturity date (subject to acceleration in certain circumstances). The Term Loan A Facility due June 2027 is secured by substantially all of the assets of the Company and the Company’s wholly owned domestic subsidiaries, and is guaranteed by each of the Company’s wholly owned domestic subsidiaries. The Term Loan A Facility due June 2027 is subject to the same covenants and events of default as the Company’s existing term loans under the Credit Facility. Effective with the Fifth Amendment, all interest rates under the Credit Facility transitioned from LIBOR to Term Secured Overnight Financing Rate (Term SOFR) plus 0.10% for US dollar denominated loans, Sterling Overnight Index Average (SONIA) for UK pound sterling denominated loans, and Euro Interbank Offered Rate (EURIBOR) for Euro denominated loans. The applicable interest rate margins under the Term Loan A Facility due June 2027 and the Revolving Credit Facility were reduced to a range from 0.75% to 1.75% per annum for Term SOFR, SONIA and EURIBOR loans, and from 0% to 0.75% per annum for base rate loans, in each case based on the Company’s leverage ratio. Commitment fees for undrawn amounts under the Revolving Credit Facility were also reduced to a range of 0.125% to 0.25% per annum based on the Company’s leverage ratio. During the nine months ended October 28, 2022, the Company incurred $8 million of debt issuance costs associated with the Fifth Amendment, of which $2 million was recognized in interest expense, with the remaining $6 million deferred and amortized to interest expense through the maturity date of the facility utilizing the effective interest rate method. As of October 28, 2022 and January 28, 2022, the carrying value of the Company’s outstanding debt obligations approximated its fair value. The fair value of long-term debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s Term Loan Facilities and Senior Notes. Maturities of long-term debt as of October 28, 2022 are: Fiscal Year Total (in millions) Remainder of 2023 $ — 2024 31 2025 77 2026 596 2027 123 Thereafter 1,563 Total principal payments $ 2,390 |
Derivative Instruments Designat
Derivative Instruments Designated as Cash Flow Hedges | 9 Months Ended |
Oct. 28, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments Designated as Cash Flow Hedges | Derivative Instruments Designated as Cash Flow Hedges: The Company’s derivative instruments designated as cash flow hedges consist of: Fair Value of Asset (Liability) (1) at Notional Amount at October 28, 2022 Pay Fixed Receive Settlement and October 28, January 28, 2022 (in millions) (in millions) Interest rate swaps #1 $ 685 2.96 % Term SOFR Monthly through October 31, 2025 $ 23 $ (39) Interest rate swaps #2 525 2.36 % Term SOFR Monthly through October 31, 2023 11 (12) Total $ 1,210 $ 34 $ (51) (1) The fair value of the fixed interest rate swap asset is included in other assets on the condensed and consolidated balance sheets. The fair value of the fixed interest rate swap liability is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets. The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate debt. The counterparties to all swap agreements are financial institutions. On June 30, 2022 and in conjunction with the Fifth Amendment, the Company transitioned the variable rate on its interest rate swaps from 1-month LIBOR to 1-month Term SOFR. Effective with the transition, the Company will pay fixed rates of 2.96% and 2.36% on the group of interest rate swaps maturing on October 31, 2025 and October 31, 2023, respectively. The Company elected to apply the optional expedient in ASC 848 in connection with transitioning its interest rate swaps from LIBOR to Term SOFR that enabled it to consider the new swaps a continuation of the existing contracts. As a result, the transition did not have an impact on the Company’s hedge accounting or a material impact to the Company’s financial statements. See Note 9 for the unrealized change in fair values on cash flow hedges recognized in other comprehensive income (loss) and the amounts reclassified from accumulated other comprehensive income (loss) into earnings for the current and comparative periods presented. The Company estimates that it will reclassify $22 million of unrealized gains from accumulated other comprehensive income into earnings in the twelve months following October 28, 2022. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income by Component | 9 Months Ended |
Oct. 28, 2022 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income by Component | Changes in Accumulated Other Comprehensive Income (Loss) by Component: The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8 and the Company's defined benefit plans. Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges (1) Defined Benefit Total (in millions) Three months ended October 28, 2022 Balance at July 29, 2022 $ (4) $ 1 $ (3) Other comprehensive income before reclassifications 38 — 38 Amounts reclassified from accumulated other comprehensive loss 1 — 1 Income tax impact (10) — (10) Net other comprehensive income 29 — 29 Balance at October 28, 2022 $ 25 $ 1 $ 26 Three months ended October 29, 2021 Balance at July 30, 2021 $ (71) $ (3) $ (74) Other comprehensive income before reclassifications 13 — 13 Amounts reclassified from accumulated other comprehensive loss 9 — 9 Income tax impact (5) — (5) Net other comprehensive income 17 — 17 Balance at October 29, 2021 $ (54) $ (3) $ (57) Nine months ended October 28, 2022 Balance at January 28, 2022 $ (38) $ 1 $ (37) Other comprehensive income before reclassifications 72 — 72 Amounts reclassified from accumulated other comprehensive loss 13 — 13 Income tax impact (22) — (22) Net other comprehensive income 63 — 63 Balance at October 28, 2022 $ 25 $ 1 $ 26 Nine months ended October 29, 2021 Balance at January 29, 2021 $ (86) $ (3) $ (89) Other comprehensive income before reclassifications 17 — 17 Amounts reclassified from accumulated other comprehensive loss 26 — 26 Income tax impact (11) — (11) Net other comprehensive income 32 — 32 Balance at October 29, 2021 $ (54) $ (3) $ (57) (1) The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense. |
Sale of Receivables (Notes)
Sale of Receivables (Notes) | 9 Months Ended |
Oct. 28, 2022 | |
Receivables [Abstract] | |
Sales of Receivables | Sales of Receivables: The Company has a Master Accounts Receivable Purchase Agreement (MARPA Facility) with MUFG Bank, Ltd. (the Purchaser) for the sale of up to a maximum amount of $300 million of certain designated eligible receivables with the U.S. government. Effective March 31, 2022, the Company amended the MARPA Facility to transition the purchase discount rate defined within the facility agreement from using LIBOR to Term SOFR. The amendment did not have a material impact on the Company's financial statements. During the nine months ended October 28, 2022 and October 29, 2021, the Company incurred purchase discount fees of $4 million and $2 million, respectively, which are presented in Other (income) expense, net on the condensed and consolidated statements of income. MARPA Facility activity consisted of the following: Nine Months Ended October 28, October 29, (in millions) Beginning balance $ 200 $ 185 Sale of receivables 2,776 2,484 Cash collections (2,716) (2,469) Outstanding balance sold to Purchaser (1) 260 200 Cash collected, not remitted to Purchaser (2) (15) (31) Remaining sold receivables $ 245 $ 169 (1) For the nine months ended October 28, 2022 and October 29, 2021, the Company recorded a net increase to cash flows from operating activities of $60 million and $15 million, respectively, from sold receivables. |
Legal Proceedings and Other Com
Legal Proceedings and Other Commitments and Contingencies | 9 Months Ended |
Oct. 28, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Other Commitments and Contingencies | Legal Proceedings and Other Commitments and Contingencies: Legal Proceedings The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. AAV Termination for Convenience On August 27, 2018, the Company received a stop-work order from the United States Marine Corps on the Assault Amphibious Vehicle (AAV) contract and on October 3, 2018 the program was terminated for convenience by the customer. The Company is continuing to negotiate with the Marine Corps to recover costs associated with the termination. Government Investigations, Audits and Reviews The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect, in particular, to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the United States. U.S. government agencies, including the Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review the adequacy of the contractor’s compliance with government standards for its business systems. Adverse findings in these investigations, audits, or reviews can lead to criminal, civil or administrative proceedings, and the Company could face disallowance of previously billed costs, penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. Due to the Company’s reliance on government contracts, adverse findings could also have a material impact on the Company’s business, including its financial position, results of operations and cash flows. The indirect cost audits by the DCAA of the Company’s business remain open for certain prior years and the current year. Although the Company has recorded contract revenues based on an estimate of costs that the Company believes will be approved on final audit, the Company does not know the outcome of any ongoing or future audits. If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected. As of October 28, 2022, the Company believes it has adequately reserved for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with U.S. government Cost Accounting Standards. Letters of Credit and Surety Bonds |
Business Overview and Summary_2
Business Overview and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Oct. 28, 2022 | |
Accounting Policies [Abstract] | |
Segment Reporting | The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. Each of the Company’s two customer facing operating sectors is focused on providing both (1) growth and technology accelerating solutions and (2) core IT service offerings to one or more agencies of the U.S. federal government. Growth and technology accelerating solutions include the delivery of secure cloud modernization, outcome based enterprise IT as-a-service, and the integration, production and modernization of defense systems. Core IT services include systems engineering, the operation and maintenance of existing IT systems and networks, and logistics and supply chain solutions. |
Basis of Presentation | The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). |
Consolidation | All intercompany transactions and account balances within the Company have been eliminated. |
Use of Estimates | The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates. |
Reporting Periods | The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2023 began on January 29, 2022 and ends on February 3, 2023, while fiscal 2022 began on January 30, 2021 and ended on January 28, 2022. |
Operating Cycle | The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts. |
Derivative Instruments Designated as Cash Flow Hedges | Derivative instruments are recorded on the condensed and consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges. |
Marketable Securities | Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1). As of October 28, 2022 and January 28, 2022, the fair value of our investments totaled $26 million and $28 million, respectively, and are included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities. |
Business Combinations Policy | Acquisition and Integration Costs Acquisition-related costs that are not part of the purchase price consideration are generally expensed as incurred, except for certain costs that are deferred in connection with the issuance of debt. These costs typically include transaction-related costs, such as finder’s fees, legal, accounting, and other professional costs. Integration-related costs represent costs directly related to combining the Company and its acquired businesses. Integration-related costs typically include strategic consulting services, facility consolidations, employee-related costs, such as retention and severance, costs to integrate information technology infrastructure, enterprise planning systems, processes, and other non-recurring integration-related costs. Acquisition and integration costs are presented together as acquisition and integration costs on the condensed and consolidated statements of income. |
Accounting Standards Updates | Accounting Standards Updates In September 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-04, Liabilities—Supplier Finance Programs (Subtopic 405-50) , which requires annual and interim disclosures for entities that use supplier finance programs in connection with the purchase of goods and services. The new standard does not affect the recognition, measurement or financial statement presentation of supplier finance program obligations. These amendments are effective for fiscal years beginning after December 15, 2022, except for the requirement to provide rollforward information, which is effective for fiscal years beginning after December 15, 2023. Early adoption is permitted. The Company does not expect the adoption of this standard to have a material impact on its consolidated financial statements. In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured at the acquisition date in accordance with Topic 606 as if the acquirer had originated the contracts. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years, and must be applied prospectively. Early adoption is permitted. The Company adopted the requirements of ASU 2021-08 on a prospective basis effective the first day of fiscal 2023. |
Earnings Per Share | Basic EPS is computed by dividing net income attributable to common stockholders by the basic weighted-average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards. |
Change in Estimates and Disaggregation of Revenues | Changes in Estimates on Contracts Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can occur routinely over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. Many of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss. |
Business Overview and Summary_3
Business Overview and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed and consolidated balance sheets for the periods presented: October 28, January 28, (in millions) Cash and cash equivalents $ 53 $ 106 Restricted cash included in inventory, prepaid expenses and other current assets 5 5 Restricted cash included in other assets 4 4 Cash, cash equivalents and restricted cash $ 62 $ 115 |
Business Combination, Separately Recognized Transactions [Table Text Block] | The amounts recognized in acquisition and integration costs on the condensed and consolidated statements of income are as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Acquisition (1) $ (1) $ — $ (2) $ 3 Integration (2) 2 12 13 33 Total acquisition and integration costs $ 1 $ 12 $ 11 $ 36 (1) Acquisition expenses for the three and nine months ended October 28, 2022 reflects amounts recognized to reduce the fair value of the Koverse earnout liability. Acquisition expenses for the nine months ended October 29, 2021 are related to the acquisitions of Halfaker and Koverse. See Note 4 for additional information related to the acquisitions. (2) Integration expenses for the nine months ended October 29, 2021 include $10 million for the impairment of assets. |
Earnings Per Share, Share Rep_2
Earnings Per Share, Share Repurchases and Dividends (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Earnings Per Share [Abstract] | |
Reconciliation of Weighted Average Number of Shares Outstanding Used to Compute Basic and Diluted EPS | The following table provides a reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS for the periods presented: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Basic weighted-average number of shares outstanding 55.0 57.5 55.6 57.8 Dilutive common share equivalents - stock options and other stock-based awards 0.5 0.5 0.4 0.6 Diluted weighted-average number of shares outstanding 55.5 58.0 56.0 58.4 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregated Revenues | Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions, except per share amounts) Net (unfavorable) favorable adjustments $ (6) $ — $ 4 $ 9 Net (unfavorable) favorable adjustments, after tax (5) — 3 7 Diluted EPS impact $ (0.09) $ — $ 0.05 $ 0.12 Disaggregated revenues by customer were as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Department of Defense $ 969 $ 920 $ 2,799 $ 2,740 Other federal government agencies 903 940 2,827 2,762 Commercial, state and local 37 38 110 110 Total $ 1,909 $ 1,898 $ 5,736 $ 5,612 Disaggregated revenues by contract-type were as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Cost reimbursement $ 1,071 $ 1,045 $ 3,201 $ 3,028 Time and materials (T&M) 363 363 1,077 1,139 Firm-fixed price (FFP) 475 490 1,458 1,445 Total $ 1,909 $ 1,898 $ 5,736 $ 5,612 Disaggregated revenues by prime versus subcontractor were as follows: Three Months Ended Nine Months Ended October 28, October 29, October 28, October 29, (in millions) Prime contractor to federal government $ 1,725 $ 1,722 $ 5,212 $ 5,069 Subcontractor to federal government 147 138 414 433 Other 37 38 110 110 Total $ 1,909 $ 1,898 $ 5,736 $ 5,612 |
Contract Related Assets and Liabilities | Contract balances for the periods presented were as follows: Balance Sheet line item October 28, January 28, (in millions) Billed and billable receivables, net (1) Receivables, net $ 580 $ 615 Contract assets - unbillable receivables Receivables, net 479 400 Contract assets - contract retentions Other assets 16 17 Contract liabilities - current Accounts payable and accrued liabilities 35 55 Contract liabilities - non-current Other long-term liabilities $ 5 $ 9 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, all of which were finite-lived, consisted of the following: October 28, 2022 January 28, 2022 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value (in millions) Customer relationships $ 1,467 $ (435) $ 1,032 $ 1,467 $ (351) $ 1,116 Backlog — — — 17 (10) 7 Developed technology 10 (2) 8 10 (2) 8 Trade name 1 (1) — 1 — 1 Total intangible assets $ 1,478 $ (438) $ 1,040 $ 1,495 $ (363) $ 1,132 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of October 28, 2022, the estimated future annual amortization expense related to intangible assets is as follows: Fiscal Year (in millions) Remainder of 2023 $ 31 2024 115 2025 115 2026 115 2027 115 Thereafter 549 Total $ 1,040 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Debt Disclosure [Abstract] | |
Long-term Debt | The Company’s long-term debt as of the dates presented was as follows: October 28, 2022 January 28, 2022 Stated Effective Principal Unamortized Net Principal Unamortized Net (in millions) Term Loan A Facility due June 2027 4.38 % 4.50 % $ 1,230 $ (5) $ 1,225 $ — $ — $ — Term Loan A Facility due October 2023 — % — % — — — 785 (5) 780 Term Loan A2 Facility due October 2023 — % — % — — — 100 — 100 Term Loan B Facility due October 2025 5.01 % 5.22 % 488 (3) 485 983 (7) 976 Term Loan B2 Facility due March 2027 5.01 % 5.44 % 272 (4) 268 272 (5) 267 Senior Notes due April 2028 4.88 % 5.11 % 400 (5) 395 400 (5) 395 Total long-term debt $ 2,390 $ (17) $ 2,373 $ 2,540 $ (22) $ 2,518 Less current portion 15 — 15 148 — 148 Total long-term debt, net of current portion $ 2,375 $ (17) $ 2,358 $ 2,392 $ (22) $ 2,370 |
Long-term Debt Maturities | Maturities of long-term debt as of October 28, 2022 are: Fiscal Year Total (in millions) Remainder of 2023 $ — 2024 31 2025 77 2026 596 2027 123 Thereafter 1,563 Total principal payments $ 2,390 |
Derivative Instruments Design_2
Derivative Instruments Designated as Cash Flow Hedges (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The Company’s derivative instruments designated as cash flow hedges consist of: Fair Value of Asset (Liability) (1) at Notional Amount at October 28, 2022 Pay Fixed Receive Settlement and October 28, January 28, 2022 (in millions) (in millions) Interest rate swaps #1 $ 685 2.96 % Term SOFR Monthly through October 31, 2025 $ 23 $ (39) Interest rate swaps #2 525 2.36 % Term SOFR Monthly through October 31, 2023 11 (12) Total $ 1,210 $ 34 $ (51) (1) The fair value of the fixed interest rate swap asset is included in other assets on the condensed and consolidated balance sheets. The fair value of the fixed interest rate swap liability is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets. |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Income by Component (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8 and the Company's defined benefit plans. Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges (1) Defined Benefit Total (in millions) Three months ended October 28, 2022 Balance at July 29, 2022 $ (4) $ 1 $ (3) Other comprehensive income before reclassifications 38 — 38 Amounts reclassified from accumulated other comprehensive loss 1 — 1 Income tax impact (10) — (10) Net other comprehensive income 29 — 29 Balance at October 28, 2022 $ 25 $ 1 $ 26 Three months ended October 29, 2021 Balance at July 30, 2021 $ (71) $ (3) $ (74) Other comprehensive income before reclassifications 13 — 13 Amounts reclassified from accumulated other comprehensive loss 9 — 9 Income tax impact (5) — (5) Net other comprehensive income 17 — 17 Balance at October 29, 2021 $ (54) $ (3) $ (57) Nine months ended October 28, 2022 Balance at January 28, 2022 $ (38) $ 1 $ (37) Other comprehensive income before reclassifications 72 — 72 Amounts reclassified from accumulated other comprehensive loss 13 — 13 Income tax impact (22) — (22) Net other comprehensive income 63 — 63 Balance at October 28, 2022 $ 25 $ 1 $ 26 Nine months ended October 29, 2021 Balance at January 29, 2021 $ (86) $ (3) $ (89) Other comprehensive income before reclassifications 17 — 17 Amounts reclassified from accumulated other comprehensive loss 26 — 26 Income tax impact (11) — (11) Net other comprehensive income 32 — 32 Balance at October 29, 2021 $ (54) $ (3) $ (57) (1) The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense. |
Sale of Receivables (Tables)
Sale of Receivables (Tables) | 9 Months Ended |
Oct. 28, 2022 | |
Receivables [Abstract] | |
Transfers Of Financial Assets Accounted For As Sales, Marpa | MARPA Facility activity consisted of the following: Nine Months Ended October 28, October 29, (in millions) Beginning balance $ 200 $ 185 Sale of receivables 2,776 2,484 Cash collections (2,716) (2,469) Outstanding balance sold to Purchaser (1) 260 200 Cash collected, not remitted to Purchaser (2) (15) (31) Remaining sold receivables $ 245 $ 169 (1) For the nine months ended October 28, 2022 and October 29, 2021, the Company recorded a net increase to cash flows from operating activities of $60 million and $15 million, respectively, from sold receivables. |
Business Overview and Summary_4
Business Overview and Summary of Significant Accounting Policies - Narrative (Detail) $ in Millions | 3 Months Ended | 9 Months Ended | |
Oct. 28, 2022 USD ($) | Oct. 28, 2022 USD ($) segment | Jan. 28, 2022 USD ($) | |
Summary of Significant Accounting Policies [Line Items] | |||
Number of operating segments | segment | 2 | ||
Number of reportable segments | segment | 1 | ||
Operating cycle (greater than) | 1 year | ||
Marketable securities | $ | $ 26 | $ 26 | $ 28 |
Restructuring Charges | $ | $ 5 | $ 7 | |
Forfeiture Support Associates J.V. | |||
Summary of Significant Accounting Policies [Line Items] | |||
Noncontrolling interest, ownership percentage (as a percent) | 50.10% | 50.10% |
Business Overview and Summary_5
Business Overview and Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 | Oct. 29, 2021 | Jan. 29, 2021 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 53 | $ 106 | ||
Restricted cash included in inventory, prepaid expenses and other current assets | 5 | 5 | ||
Restricted cash included in other assets | 4 | 4 | ||
Cash, cash equivalents and restricted cash | $ 62 | $ 115 | $ 157 | $ 190 |
Business Overview and Summary_6
Business Overview and Summary of Significant Accounting Policies - Business Combination, Separately Recognized Transactions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Summary of Significant Accounting Policies [Line Items] | ||||
Acquisition costs | $ (1) | $ 0 | $ (2) | $ 3 |
Integration costs | 2 | 12 | 13 | 33 |
Acquisition and integration costs | $ 1 | $ 12 | $ 11 | 36 |
Asset Impairment | ||||
Summary of Significant Accounting Policies [Line Items] | ||||
Integration costs | $ 10 |
Earnings Per Share, Share Rep_3
Earnings Per Share, Share Repurchases and Dividends - Reconciliation of Weighted Average Number of Shares Outstanding Used to Compute Basic and Diluted EPS (Details) - shares shares in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Earnings Per Share [Abstract] | ||||
Basic weighted-average number of shares outstanding (in shares) | 55 | 57.5 | 55.6 | 57.8 |
Dilutive common share equivalents - stock options and other stock-based awards (in shares) | 0.5 | 0.5 | 0.4 | 0.6 |
Weighted Average Number of Shares Outstanding, Diluted | 55.5 | 58 | 56 | 58.4 |
Earnings Per Share, Share Rep_4
Earnings Per Share, Share Repurchases and Dividends (Detail) - $ / shares | 3 Months Ended | 9 Months Ended | ||||
Nov. 29, 2022 | Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jun. 21, 2022 | |
Computation Of Earnings Per Share [Line Items] | ||||||
Cash dividends declared per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 1.11 | $ 1.11 | ||
Cash dividends paid per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 1.11 | $ 1.11 | ||
Employee Stock | ||||||
Computation Of Earnings Per Share [Line Items] | ||||||
Antidilutive stock options excluded (in shares) | 0 | 0 | ||||
Stock Repurchase Plan | ||||||
Computation Of Earnings Per Share [Line Items] | ||||||
Increase in number of shares authorized to be repurchased under the repurchase plan (in shares) | 8,000,000 | |||||
Shares repurchased under the repurchase plan (in shares) | 16,500,000 | |||||
Stock Repurchase Plan | Maximum | ||||||
Computation Of Earnings Per Share [Line Items] | ||||||
Stock Repurchase Program, Number of Shares Authorized to be Repurchased | 24,400,000 | |||||
Dividend Declared | Subsequent Event | ||||||
Computation Of Earnings Per Share [Line Items] | ||||||
Cash dividends paid per share (in dollars per share) | $ 0.37 |
Revenues - Change in Estimates
Revenues - Change in Estimates (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Net (unfavorable) favorable adjustments | $ 133 | $ 114 | $ 383 | $ 377 |
Net income | $ 80 | $ 71 | $ 226 | $ 234 |
Diluted (in dollars per share) | $ 1.45 | $ 1.22 | $ 4.04 | $ 4.01 |
Contract with customer, performance obligation satisfied in previous period | $ 2 | $ 1 | $ 7 | $ 21 |
Change in Accounting Method Accounted for as Change in Estimate | ||||
Disaggregation of Revenue [Line Items] | ||||
Net (unfavorable) favorable adjustments | (6) | 0 | 4 | 9 |
Net income | $ (5) | $ 0 | $ 3 | $ 7 |
Diluted (in dollars per share) | $ (0.09) | $ 0 | $ 0.05 | $ 0.12 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 1,909 | $ 1,898 | $ 5,736 | $ 5,612 |
Prime contractor to federal government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,725 | 1,722 | 5,212 | 5,069 |
Subcontractor to federal government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 147 | 138 | 414 | 433 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 37 | 38 | 110 | 110 |
Cost reimbursement | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,071 | 1,045 | 3,201 | 3,028 |
Time and materials (T&M) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 363 | 363 | 1,077 | 1,139 |
Firm-fixed price (FFP) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 475 | 490 | 1,458 | 1,445 |
Department of Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 969 | 920 | 2,799 | 2,740 |
Other federal government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 903 | 940 | 2,827 | 2,762 |
Commercial, state and local | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 37 | $ 38 | $ 110 | $ 110 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Contract with customer, performance obligation satisfied in previous period | $ 2 | $ 1 | $ 7 | $ 21 |
Revenue recognized | 4 | 8 | 39 | 72 |
Remaining performance obligation | 5,000 | 5,000 | ||
Revenue from exercise of purchase options | 23 | |||
Lease income | $ 0 | $ 3 | $ 0 | $ 14 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-29 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue, remaining performance obligation (percent) | 85% | 85% | ||
Revenue, remaining performance obligation, period | 12 months | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-29 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue, remaining performance obligation (percent) | 95% | 95% | ||
Revenue, remaining performance obligation, period | 24 months | 24 months |
Revenues - Contract Related Ass
Revenues - Contract Related Assets and Liabilities (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Disaggregation of Revenue [Line Items] | ||
Allowance for doubtful accounts | $ 3 | $ 4 |
Receivables, net | ||
Disaggregation of Revenue [Line Items] | ||
Billed and billable receivables, net | 580 | 615 |
Contract assets | 479 | 400 |
Accounts payable and accrued liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities - current | 35 | 55 |
Other long-term liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities - non-current | 5 | 9 |
Contract retentions | Other assets | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 16 | $ 17 |
Revenues - Remaining Performanc
Revenues - Remaining Performance Obligations (Details) | Oct. 28, 2022 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation (percent) | 85% |
Revenue, remaining performance obligation, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-29 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation (percent) | 95% |
Revenue, remaining performance obligation, period | 24 months |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Jul. 02, 2021 | May 03, 2021 | Oct. 28, 2022 | Jul. 29, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Business Acquisition [Line Items] | |||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 0 | $ 247 | |||||
Post-Combination Expense, Recognized | $ 11 | 11 | |||||
Amortization of intangible assets | 29 | $ 33 | 94 | 94 | |||
Halfaker and Associates, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 228 | ||||||
Cash Acquired in Excess of Payments to Acquire Business | 3 | ||||||
Goodwill, Purchase Accounting Adjustments | $ 2 | ||||||
Goodwill acquired | 104 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 114 | ||||||
Business Combination, Additional Cash Payments | 21 | ||||||
Halfaker and Associates, LLC | Backlog | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 17 | ||||||
Finite-Lived Intangible Asset, Useful Life | 1 year | ||||||
Halfaker and Associates, LLC | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 97 | ||||||
Finite-Lived Intangible Asset, Useful Life | 9 years | ||||||
Koverse | |||||||
Business Acquisition [Line Items] | |||||||
Payments to Acquire Businesses, Net of Cash Acquired | $ 30 | ||||||
Cash Acquired in Excess of Payments to Acquire Business | 2 | ||||||
Goodwill acquired | 21 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | $ 10 | ||||||
Finite-Lived Intangible Asset, Useful Life | 7 years | ||||||
Business Combination, Additional Cash Payments | $ 27 | ||||||
Business Combination, Contingent Consideration, Liability | 3 | ||||||
Post-Combination Expense | $ 13 | ||||||
Unisys Federal [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Amortization of intangible assets | 4 | $ 9 | 6 | $ 17 | |||
Intangible assets expected to be amortized | $ 7 | $ 7 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Jan. 28, 2022 | Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 2,913,000,000 | $ 2,911,000,000 | $ 2,911,000,000 | ||
Goodwill impairment | 0 | $ 0 | |||
Amortization of intangible assets | $ 29,000,000 | $ 33,000,000 | 94,000,000 | $ 94,000,000 | |
Impairment of intangible assets | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets Intangible Assets (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 1,478 | $ 1,495 |
Accumulated amortization | (438) | (363) |
Net carrying value | 1,040 | 1,132 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 1,467 | 1,467 |
Accumulated amortization | (435) | (351) |
Net carrying value | 1,032 | 1,116 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 0 | 17 |
Accumulated amortization | 0 | (10) |
Net carrying value | 0 | 7 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 10 | 10 |
Accumulated amortization | (2) | (2) |
Net carrying value | 8 | 8 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 1 | 1 |
Accumulated amortization | (1) | 0 |
Net carrying value | $ 0 | $ 1 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets Intangible Assets Amortization (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2023 | $ 31 | |
2024 | 115 | |
2025 | 115 | |
2026 | 115 | |
2027 | 115 | |
Thereafter | 549 | |
Net carrying value | $ 1,040 | $ 1,132 |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | |
Income Tax Contingency [Line Items] | |||||
Effective income tax rate | 20.30% | 19.40% | 21.30% | 22% | |
Deferred income taxes | $ 0 | $ 0 | $ 43 | ||
Other assets | |||||
Income Tax Contingency [Line Items] | |||||
Net deferred tax asset | $ 3 | $ 3 |
Debt Obligations - Long-term De
Debt Obligations - Long-term Debt (Detail) - USD ($) $ in Millions | Oct. 28, 2022 | Jun. 30, 2022 | Jan. 28, 2022 |
Debt Instrument [Line Items] | |||
Principal amount of long-term debt | $ 2,390 | $ 2,540 | |
Unamortized debt issuance costs, total long-term debt | (17) | (22) | |
Total long-term debt | 2,373 | 2,518 | |
Less current portion | 15 | 148 | |
Debt Issuance Costs, Current, Net | 0 | 0 | |
Principal amount of long-term debt, net of current portion | 2,375 | 2,392 | |
Unamortized debt issuance costs, total long-term debt, net of current portion | (17) | (22) | |
Total long-term debt, net of current portion | $ 2,358 | 2,370 | |
Term Loan A Facility due June 2027 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.38% | ||
Effective interest rate | 4.50% | ||
Principal amount of long-term debt | $ 1,230 | $ 1,230 | 0 |
Unamortized debt issuance costs, total long-term debt | (5) | 0 | |
Total long-term debt | $ 1,225 | 0 | |
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 0% | ||
Effective interest rate | 0% | ||
Principal amount of long-term debt | $ 0 | 785 | |
Unamortized debt issuance costs, total long-term debt | 0 | (5) | |
Total long-term debt | $ 0 | 780 | |
Term Loan A2 Facility Due October Two Thousand Twenty Three | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 0% | ||
Effective interest rate | 0% | ||
Principal amount of long-term debt | $ 0 | 100 | |
Unamortized debt issuance costs, total long-term debt | 0 | 0 | |
Total long-term debt | $ 0 | 100 | |
Term Loan B Facility Due October Two Thousand Twenty Five | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.01% | ||
Effective interest rate | 5.22% | ||
Principal amount of long-term debt | $ 488 | 983 | |
Unamortized debt issuance costs, total long-term debt | (3) | (7) | |
Total long-term debt | $ 485 | 976 | |
Term Loan B2 Facility Due March Two Thousand Twenty Seven [Member] | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.01% | ||
Effective interest rate | 5.44% | ||
Principal amount of long-term debt | $ 272 | 272 | |
Unamortized debt issuance costs, total long-term debt | (4) | (5) | |
Total long-term debt | $ 268 | 267 | |
Senior Notes Due April Two Thousand Twenty Eight | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.88% | ||
Effective interest rate | 5.11% | ||
Principal amount of long-term debt | $ 400 | 400 | |
Unamortized debt issuance costs, total long-term debt | (5) | (5) | |
Total long-term debt | $ 395 | $ 395 |
Debt Obligations - Narrative (D
Debt Obligations - Narrative (Detail) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Jun. 30, 2022 | Oct. 28, 2022 | Oct. 28, 2022 | Jan. 28, 2022 | |
Debt Instrument [Line Items] | ||||
Long-term Debt, Gross | $ 2,390,000,000 | $ 2,390,000,000 | $ 2,540,000,000 | |
Term Loan A Facility due June 2027 | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Gross | $ 1,230,000,000 | $ 1,230,000,000 | $ 1,230,000,000 | 0 |
Term Loan A Facility due June 2027 | Debt Instrument, Redemption, Period One | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Amortization Rate | 1.25% | 1.25% | ||
Term Loan A Facility due June 2027 | Debt Instrument, Redemption, Period Two | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Amortization Rate | 1.875% | 1.875% | ||
Term Loan A Facility due June 2027 | Debt Instrument, Redemption, Period Three | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Amortization Rate | 2.50% | 2.50% | ||
Term Loan B Facility Due October Two Thousand Twenty Five | ||||
Debt Instrument [Line Items] | ||||
Long-term Debt, Gross | $ 488,000,000 | $ 488,000,000 | $ 983,000,000 | |
Payment for Debt Extinguishment or Debt Prepayment Cost | 400,000,000 | |||
Write off of Deferred Debt Issuance Cost | 3,000,000 | |||
Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.125% | |||
Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Line of Credit Facility, Commitment Fee Percentage | 0.25% | |||
Line of Credit [Member] | Term Loan B Facility Due October Two Thousand Twenty Five | ||||
Debt Instrument [Line Items] | ||||
Payments on term debt | 90,000,000 | |||
Line of Credit [Member] | The Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 3,000,000,000 | $ 3,000,000,000 | ||
Line of Credit [Member] | The Credit Facility | Secured Overnight Financing Rate (SOFR) | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.10% | |||
Fifth Amendment Credit Agreement | ||||
Debt Instrument [Line Items] | ||||
Debt Issuance Costs, Gross | 8,000,000 | $ 8,000,000 | ||
Debt Issuance Costs, Deferred And Amortized To Interest Expense | 6,000,000 | 6,000,000 | ||
Debt Issuance Costs, Interest Expense | 2,000,000 | 2,000,000 | ||
Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 1,000,000,000 | |||
Proceeds from Lines of Credit | $ 200,000,000 | |||
Line of Credit Facility, Current Borrowing Capacity | $ 400,000,000 | |||
Revolving Credit Facility | Line of Credit [Member] | Term Loan A Facility due June 2027 | Secured Overnight Financing Rate (SOFR) | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |||
Revolving Credit Facility | Line of Credit [Member] | Term Loan A Facility due June 2027 | Secured Overnight Financing Rate (SOFR) | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |||
Revolving Credit Facility | Line of Credit [Member] | Term Loan A Facility due June 2027 | Base Rate [Member] | Minimum | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0% | |||
Revolving Credit Facility | Line of Credit [Member] | Term Loan A Facility due June 2027 | Base Rate [Member] | Maximum | ||||
Debt Instrument [Line Items] | ||||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |||
Revolving Credit Facility | Line of Credit [Member] | The Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | 1,000,000,000 | $ 1,000,000,000 | ||
Long-Term Line of Credit | $ 0 | $ 0 |
Debt Obligations - Long-term _2
Debt Obligations - Long-term Debt Maturities (Details) - USD ($) $ in Millions | Oct. 28, 2022 | Jan. 28, 2022 |
Debt Disclosure [Abstract] | ||
Long-Term Debt, Maturity, Remainder of Fiscal Year | $ 0 | |
Long-Term Debt, Maturity, Year One | 31 | |
Long-Term Debt, Maturity, Year Two | 77 | |
Long-Term Debt, Maturity, Year Three | 596 | |
Long-Term Debt, Maturity, Year Four | 123 | |
Long-Term Debt, Maturity, after Year Four | 1,563 | |
Long-term Debt, Gross | $ 2,390 | $ 2,540 |
Derivative Instruments Design_3
Derivative Instruments Designated as Cash Flow Hedges - Schedule of Derivative Instruments (Detail) - USD ($) $ in Millions | 9 Months Ended | ||
Oct. 28, 2022 | Jun. 30, 2022 | Jan. 28, 2022 | |
Derivative [Line Items] | |||
Notional amount | $ 1,210 | ||
Asset Fair Value | 34 | $ (51) | |
Interest rate swaps #1 | Interest Rate Swaps | |||
Derivative [Line Items] | |||
Notional amount | $ 685 | ||
Pay fixed rate | 2.96% | 2.96% | |
Receive variable rate | Term SOFR | ||
Settlement and termination | Monthly through October 31, 2025 | ||
Asset Fair Value | $ 23 | (39) | |
Interest rate swaps #2 | Interest Rate Swaps | |||
Derivative [Line Items] | |||
Notional amount | $ 525 | ||
Pay fixed rate | 2.36% | 2.36% | |
Receive variable rate | Term SOFR | ||
Settlement and termination | Monthly through October 31, 2023 | ||
Asset Fair Value | $ 11 | $ (12) |
Derivative Instruments Design_4
Derivative Instruments Designated as Cash Flow Hedges - Narrative (Detail) - Interest Rate Swaps - USD ($) $ in Millions | Oct. 28, 2022 | Jun. 30, 2022 |
Derivative [Line Items] | ||
Unrealized gains estimated to be reclassified from accumulated other comprehensive income into earnings in the next twelve months | $ 22 | |
Interest rate swaps #1 | ||
Derivative [Line Items] | ||
Pay fixed rate | 2.96% | 2.96% |
Interest rate swaps #2 | ||
Derivative [Line Items] | ||
Pay fixed rate | 2.36% | 2.36% |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Income by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Oct. 28, 2022 | Oct. 29, 2021 | Oct. 28, 2022 | Oct. 29, 2021 | Jul. 29, 2022 | Jan. 28, 2022 | Jul. 30, 2021 | Jan. 29, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax | $ 26 | $ (57) | $ 26 | $ (57) | $ (3) | $ (37) | $ (74) | $ (89) |
Other comprehensive income before reclassifications | 38 | 13 | 72 | 17 | ||||
Amounts reclassified from accumulated other comprehensive loss | 1 | 9 | 13 | 26 | ||||
Income tax impact | (10) | (5) | (22) | (11) | ||||
Net other comprehensive income | 29 | 17 | 63 | 32 | ||||
Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1) | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax | 25 | (54) | 25 | (54) | (4) | (38) | (71) | (86) |
Other comprehensive income before reclassifications | 38 | 13 | 72 | 17 | ||||
Amounts reclassified from accumulated other comprehensive loss | 1 | 9 | 13 | 26 | ||||
Income tax impact | (10) | (5) | (22) | (11) | ||||
Net other comprehensive income | 29 | 17 | 63 | 32 | ||||
Defined Benefit Obligation Adjustment | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax | 1 | (3) | 1 | (3) | $ 1 | $ 1 | $ (3) | $ (3) |
Other comprehensive income before reclassifications | 0 | 0 | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 0 | 0 | ||||
Income tax impact | 0 | 0 | 0 | 0 | ||||
Net other comprehensive income | $ 0 | $ 0 | $ 0 | $ 0 |
Sale of Receivables (Details)
Sale of Receivables (Details) - USD ($) $ in Millions | 9 Months Ended | |||
Oct. 28, 2022 | Oct. 29, 2021 | Jan. 28, 2022 | Jan. 29, 2021 | |
Receivables [Abstract] | ||||
Maximum commitment | $ 300 | |||
Purchase discount fees | 4 | $ 2 | ||
Outstanding balance sold to Purchaser | 260 | 200 | $ 200 | $ 185 |
Sale of receivables | 2,776 | 2,484 | ||
Cash collections | (2,716) | (2,469) | ||
Cash collected, not remitted to Purchaser(2) | (15) | (31) | ||
Remaining sold receivables | 245 | 169 | ||
Increase to cash flows from operating activities | $ 60 | $ 15 |
Legal Proceedings and Other C_2
Legal Proceedings and Other Commitments and Contingencies (Detail) $ in Millions | Oct. 28, 2022 USD ($) |
Letters of Credit | |
Commitments And Contingencies [Line Items] | |
Outstanding obligations | $ 9 |
Surety Bonds | |
Commitments And Contingencies [Line Items] | |
Outstanding obligations | $ 19 |