Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Feb. 03, 2023 | Mar. 10, 2023 | Jul. 29, 2022 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Feb. 03, 2023 | ||
Document Transition Report | false | ||
Entity Registrant Name | Science Applications International Corporation | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 46-1932921 | ||
Entity Address, Address Description | 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 Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
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 Public Float | $ 5.2 | ||
Entity Common Stock, Shares Outstanding (in shares) | 54,200,358 | ||
Documents Incorporated by Reference [Text Block] | Portions of Science Applications International Corporation’s Definitive Proxy Statement for the 2023 Annual Meeting of Stockholders are incorporated by reference in Part III of this report. | ||
Entity Central Index Key | 0001571123 | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Current Fiscal Year End Date | --02-03 | ||
Entity File Number | 001-35832 | ||
ICFR Auditor Attestation Flag | false |
Audit Information
Audit Information | 12 Months Ended |
Feb. 03, 2023 | |
Auditor Information [Abstract] | |
Auditor Location | Tysons, Virginia |
Auditor Name | Ernst & Young LLP |
Auditor Firm ID | 42 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Revenues | $ 7,704 | $ 7,394 | $ 7,056 |
Cost of revenues | 6,816 | 6,535 | 6,264 |
Selling, general and administrative expenses | 374 | 344 | 352 |
Acquisition and integration costs | 13 | 56 | 54 |
Other operating income | 0 | (3) | (4) |
Operating income | 501 | 462 | 390 |
Interest expense | 120 | 105 | 122 |
Other (income) expense, net | 6 | (1) | (3) |
Income before income taxes | 375 | 358 | 271 |
Provision for income taxes | (72) | (79) | (60) |
Net income | 303 | 279 | 211 |
Net income attributable to non-controlling interest | 3 | 2 | 2 |
Net income attributable to common stockholders | $ 300 | $ 277 | $ 209 |
Earnings per share: | |||
Basic (in dollars per share) | $ 5.42 | $ 4.81 | $ 3.60 |
Diluted (in dollars per share) | $ 5.38 | $ 4.77 | $ 3.56 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Statement of Comprehensive Income [Abstract] | |||
Net income | $ 303 | $ 279 | $ 211 |
Other comprehensive income (loss), net of tax: | |||
Net unrealized gain (loss) on derivative instruments | 56 | 48 | (19) |
Defined benefit obligation adjustment | 3 | 4 | 2 |
Other comprehensive income (loss) | 59 | 52 | (17) |
Comprehensive income | 362 | 331 | 194 |
Comprehensive income attributable to non-controlling interest | (3) | (2) | (2) |
Comprehensive income attributable to common stockholders | $ 359 | $ 329 | $ 192 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 109 | $ 106 |
Receivables, net | 936 | 1,015 |
Inventories, net | 71 | 64 |
Prepaid expenses | 58 | 57 |
Other current assets | 23 | 21 |
Total current assets | 1,197 | 1,263 |
Goodwill | 2,911 | 2,913 |
Intangible assets, net | 1,009 | 1,132 |
Property, plant, and equipment, net | 92 | 100 |
Operating lease right of use assets | 158 | 209 |
Other assets | 176 | 129 |
Total assets | 5,543 | 5,746 |
Current liabilities: | ||
Accounts payable | 624 | 612 |
Accrued payroll and other employee benefits | 205 | 227 |
Accrued vacation | 123 | 137 |
Other accrued liabilities | 143 | 228 |
Long-term debt, current portion | 31 | 148 |
Total current liabilities | 1,126 | 1,352 |
Long-term debt, net of current portion | 2,343 | 2,370 |
Operating lease liabilities | 152 | 192 |
Deferred income taxes | 0 | 43 |
Other long-term liabilities | 218 | 160 |
Commitments and contingencies (Note 17) | ||
Equity: | ||
Common stock, $0.0001 par value, 1 billion shares authorized, 54 million shares and 56 million shares issued and outstanding as of February 3, 2023 and January 28, 2022, respectively | 0 | 0 |
Additional paid-in capital | 637 | 838 |
Retained earnings | 1,035 | 818 |
Accumulated other comprehensive income (loss) | 22 | (37) |
Total common stockholders' equity | 1,694 | 1,619 |
Non-controlling interest | 10 | 10 |
Total stockholders' equity | 1,704 | 1,629 |
Total liabilities and stockholders' equity | $ 5,543 | $ 5,746 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Feb. 03, 2023 | Jan. 28, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, shares authorized (in shares) | 1,000,000,000 | 1,000,000,000 |
Common stock, shares issued (in shares) | 54,000,000 | 56,000,000 |
Common stock, shares outstanding (in shares) | 54,000,000 | 56,000,000 |
CONSOLIDATED STATEMENTS OF EQUI
CONSOLIDATED STATEMENTS OF EQUITY - USD ($) $ in Millions | Total | Shares of common stock | Additional paid-in capital | Retained earnings | AOCI Attributable to Parent [Member] | Non-controlling Interest |
Balance, (in shares) at Jan. 31, 2020 | 58,000,000 | |||||
Balance, beginning of period at Jan. 31, 2020 | $ 1,427 | $ 983 | $ 506 | $ (72) | $ 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 211 | 209 | 2 | |||
Issuances of stock | 14 | 14 | ||||
Other comprehensive income (loss) | (17) | (17) | ||||
Cash dividends | (88) | (88) | ||||
Stock-based compensation | 30 | 30 | ||||
Repurchases of stock | (23) | (23) | ||||
Distributions to non-controlling interest | (2) | (2) | ||||
Balance, (in shares) at Jan. 29, 2021 | 58,000,000 | |||||
Balance, end of period at Jan. 29, 2021 | 1,552 | 1,004 | 627 | (89) | 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 279 | 277 | 2 | |||
Issuances of stock, (in shares) | 1,000,000 | |||||
Issuances of stock | 16 | 16 | ||||
Other comprehensive income (loss) | 52 | 52 | ||||
Cash dividends | (86) | (86) | ||||
Stock-based compensation | 32 | 32 | ||||
Repurchases of stock, (in shares) | (3,000,000) | |||||
Repurchases of stock | (214) | (214) | ||||
Distributions to non-controlling interest | $ (2) | (2) | ||||
Balance, (in shares) at Jan. 28, 2022 | 56,000,000 | 56,000,000 | ||||
Balance, end of period at Jan. 28, 2022 | $ 1,629 | 838 | 818 | (37) | 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 303 | 300 | 3 | |||
Issuances of stock, (in shares) | 1,000,000 | |||||
Issuances of stock | 17 | 17 | ||||
Other comprehensive income (loss) | 59 | 59 | ||||
Cash dividends | (83) | (83) | ||||
Stock-based compensation | 29 | 29 | ||||
Repurchases of stock, (in shares) | (3,000,000) | |||||
Repurchases of stock | (247) | (247) | ||||
Distributions to non-controlling interest | $ (3) | (3) | ||||
Balance, (in shares) at Feb. 03, 2023 | 54,000,000 | 54,000,000 | ||||
Balance, end of period at Feb. 03, 2023 | $ 1,704 | $ 637 | $ 1,035 | $ 22 | $ 10 |
CONSOLIDATED STATEMENTS OF EQ_2
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Statement of Stockholders' Equity [Abstract] | |||
Cash dividends paid per share (in dollars per share) | $ 1.48 | $ 1.48 | $ 1.48 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Statement of Cash Flows [Abstract] | |||
Net income | $ 303 | $ 279 | $ 211 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 157 | 165 | 179 |
Amortization of Off Market Customer Contracts | (14) | (33) | (15) |
Amortization of Debt Issuance Costs | 9 | 7 | 21 |
Deferred income taxes | (17) | 59 | 12 |
Stock-based compensation expense | 48 | 46 | 42 |
(Gain) loss on divestitures | 0 | (2) | 10 |
Impairment of assets | 4 | 18 | 2 |
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of the acquisitions: | |||
Receivables | 79 | (31) | 221 |
Inventory, prepaid expenses, and other current assets | (10) | 14 | 8 |
Other assets | 6 | (3) | (14) |
Accounts payable and accrued liabilities | (9) | 30 | (76) |
Accrued payroll and employee benefits | (36) | 10 | 95 |
Operating lease assets and liabilities, net | (3) | 5 | (5) |
Other long-term liabilities | 15 | (46) | 64 |
Net cash provided by operating activities | 532 | 518 | 755 |
Cash flows from investing activities: | |||
Expenditures for property, plant, and equipment | (25) | (36) | (46) |
Payments to Acquire Marketable Securities | (7) | (9) | (6) |
Proceeds from Sale and Maturity of Marketable Securities | 4 | 6 | 9 |
Cash paid for acquisitions, net of cash acquired | 0 | (255) | (1,202) |
Proceeds from Divestiture of Businesses | 0 | 8 | 17 |
Other | (8) | (6) | (3) |
Net cash used in investing activities | (36) | (292) | (1,231) |
Cash flows from financing activities: | |||
Dividend payments to stockholders | (83) | (86) | (87) |
Principal payments on borrowings | (990) | (119) | (399) |
Issuances of stock | 16 | 16 | 13 |
Stock repurchased and retired or withheld for taxes on equity awards | (267) | (226) | (34) |
Proceeds from borrowings | 840 | 116 | 1,000 |
Debt issuance costs | (6) | 0 | (27) |
Distributions to non-controlling interest | (3) | (2) | (2) |
Net cash (used in) provided by financing activities | (493) | (301) | 464 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 3 | (75) | (12) |
Cash, cash equivalents and restricted cash at beginning of period | 115 | 190 | 202 |
Cash, cash equivalents and restricted cash at end of period | 118 | 115 | 190 |
Supplementary cash flow disclosure: | |||
Cash paid for interest | 111 | 98 | 96 |
Cash paid for income taxes | 70 | 7 | 39 |
Non-cash investing and financing activities: | |||
(Decrease) increase in accrued plan share repurchases | (2) | 2 | 1 |
Decrease in accrued property, plant, and equipment | $ (1) | $ (2) | $ (1) |
Business Overview and Summary o
Business Overview and Summary of Significant Accounting Policies | 12 Months Ended |
Feb. 03, 2023 | |
Accounting Policies [Abstract] | |
Business Overview and Summary of Significant Accounting Policies | Business Overview and Summary of Significant Accounting Policies: Overview Description of Business. Science Applications International Corporation (collectively, with its consolidated subsidiaries, the “Company”) is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S. government. The Company provides 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. 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. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. See Note 16 for additional information. Acquisitions. On July 2, 2021, the Company completed the acquisition of Halfaker and Associates, LLC (Halfaker), a mission focused, pure-play health IT company. On May 3, 2021, the Company completed the acquisition of Koverse, a software company that provides a data management platform enabling artificial intelligence and machine learning on complex sensitive data. On March 13, 2020, the Company completed the acquisition of Unisys Federal, a former operating unit of Unisys Corporation, which enhances our capabilities in government priority areas, expands our portfolio of intellectual property and technology-driven offerings, and increases our access to current and new customers. See Note 4 for additional information. Principles of Consolidation and Basis of Presentation References to “financial statements” refer to the consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. Non-controlling Interest. As of February 3, 2023, the Company held a 50.1% majority interest in Forfeiture Support Associates J.V. (FSA). The results of operations of FSA are included in the Company's consolidated statements of income and comprehensive income and statements of cash flows. The non-controlling interest reported on the consolidated balance sheets represents the portion of FSA’s equity that is attributable to the non-controlling interest. Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to, estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates. 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 ended on February 3, 2023, fiscal 2022 began on January 30, 2021 and ended on January 28, 2022, and fiscal 2021 began on February 1, 2020 and ended on January 29, 2021. Fiscal 2023 consisted of 53 weeks with the extra week occurring in the fourth quarter, while fiscal 2022 and 2021 consisted of 52 weeks. Revenue Recognition The Company provides technical, engineering and enterprise IT services under long-term service arrangements primarily with the U.S. government, including subcontracts with other contractors engaged in work for the U.S. government. The Company also serves a number of state and local governments, foreign governments and U.S. commercial customers. The Company provides services under various contract types, including firm-fixed price (FFP), time-and-materials (T&M), cost-plus-fixed-fee, cost-plus-award-fee and cost-plus-incentive-fee contracts. Our service arrangements typically involve an annual base period of performance followed by renewal option periods that upon exercise are generally accounted for as separate contracts. To determine the proper revenue recognition, the Company first evaluates whether we have a duly approved and enforceable contract with a customer, in which rights of parties and payment terms are identified and collectability is probable. We also evaluate whether two or more contracts should be combined and accounted for as a single contract and whether modifications to existing contracts should be accounted for as part of the original contract or as a separate contract. Contract modifications that create new enforceable rights and obligations are accounted for prospectively. Contract modifications that do not add distinct goods or services are accounted for through cumulative catch-up adjustments. Contract modifications that add distinct goods or services and increase the contract value by an amount that reflects the standalone selling price are accounted for as separate contracts. The Company recognizes revenue when, or as, we satisfy our performance obligations under a contract. A performance obligation is the unit of account for revenue recognition and refers to a promise in a contract to transfer a distinct service or good to the customer. The majority of the Company’s contracts contain a single performance obligation involving a significant integration of various activities that are performed together to deliver a combined service or solution. Performance obligations may be satisfied over time or at a point in time, but the majority of the Company’s performance obligations are satisfied over time. The Company selects the appropriate measure of progress for revenue recognition based on the nature of the performance obligation, contract type and other pertinent contract terms. Performance obligations satisfied over time may involve a series of recurring services, such as network operations and maintenance, operation and program support services, IT outsourcing services, and other IT arrangements where the Company is standing ready to provide support, when-and-if needed. Such performance obligations are satisfied over time because the customer simultaneously receives and consumes the benefits of our performance as services are provided. Alternatively, performance obligations satisfied over time may involve the completion of a contract deliverable. Examples include systems integration, network engineering, network design, and engineering and build services. Deliverable-based performance obligations are satisfied over time when the Company’s performance creates or enhances an asset that is controlled by the customer, or when the Company’s performance creates an asset that is customized to the customer’s specifications and the Company has a right to payment, including a reasonable profit margin, for work performed to date. For series-services performance obligations, the Company measures progress using either a cost input measure (cost-to-cost), a time-elapsed output measure, or the as-invoiced practical expedient. A cost input measure typically is applied to the Company’s cost-reimbursable contracts. Revenue is recognized based on the ratio of costs incurred to total estimated costs at completion. Award or incentive fees are allocated to the distinct periods to which they relate. For fixed-price contracts, a time-elapsed output measure is applied to fixed consideration, such that revenue is recognized ratably over the period of performance. Where fixed-price contracts also provide for reimbursement of certain costs, such as travel or other direct costs, consideration may be attributed only to a distinct subset of time within the performance period. The Company’s time-and-material and fixed price-level of effort contracts generally qualify for the as-invoiced practical expedient. Revenue on these contracts is recognized in the amount to which the Company has a contractual right to invoice. For deliverable-based performance obligations satisfied over time, the Company recognizes revenue using a cost input measure of progress (cost-to-cost), regardless of contract type. Revenue is recognized based on the ratio of costs incurred to total estimated costs at completion. The Company may incur costs associated with significant materials or hardware procurements that are not proportionate to the Company’s progress in satisfying its performance obligations. For these contracts, costs are excluded from the measure of progress, and revenue is recognized equal to the costs incurred. For performance obligations in which the Company does not transfer control over time, we recognize revenue at the point-in-time when the customer obtains control of the related asset, usually at the time of shipment or upon delivery. The Company accrues for shipping and handling costs occurring after the point-in-time control transfers to the customer. Recognizing revenue on long-term contracts involves significant estimates and judgments. The transaction price is the estimated amount of consideration we expect to receive for performance under our contracts. Contract terms may include variable consideration, such as reimbursable costs, award and incentive fees, usage-based fees, service-level penalties, performance bonuses, or other provisions that can either increase or decrease the transaction price. Variable amounts are generally determined upon our achievement of certain performance metrics, program milestones or cost targets and may be based upon customer discretion. When making our estimates, the Company considers the customer, contract terms, the complexity of the work and related risks, the extent of customer discretion, historical experience and the potential of a significant reversal of revenue. The Company includes variable consideration in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Many of the Company's contracts recognize revenue using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. Estimating costs at completion is complex due to the nature of the services being performed and the length of certain contracts. Contract costs generally include direct costs, such as labor, subcontract costs and materials, and indirect costs identifiable with or allocable to a specific contract. Management must make assumptions regarding the complexity of the work to be performed, the schedule and associated tasks, labor productivity and availability, increases in wages and prices of materials, execution by our subcontractors, overhead cost rates, and other variables. For contracts using a cost input measure, when total expected contract costs exceed total estimated contract revenues, 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. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by the Defense Contract Audit Agency (DCAA). For contracts with multiple performance obligations, the Company allocates transaction price to each performance obligation based on the relative standalone selling price of each distinct performance obligation within the contract. Since the Company typically provides customized services and solutions that are specific to a single customer’s requirements, standalone selling price is most often estimated based on expected costs plus a reasonable profit margin. Changes in Estimates on Contracts Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can 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. Contract Balances The timing of revenue recognition may differ from the timing of billing and cash receipts from customers. Amounts are invoiced as work progresses, typically biweekly or monthly in arrears, or upon achievement of contractual milestones. We record a contract asset when revenue is recognized prior to invoicing, or a contract liability when cash is received in advance of recognizing revenue. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets include unbillable receivables and contract retentions, but exclude billed and billable receivables. Billed and billable receivables are rights to consideration, which are unconditional other than to the passage of time. Contract liabilities include customer advances, billings in excess of revenues and deferred revenue. Contract assets and liabilities are recorded net on a contract-by-contract basis and are generally classified as current based on our contract operating cycle. Deferred revenue attributable to long-term contract material renewal options may be classified as non-current when the option renewal period will not occur within one year of the balance sheet date. Deferred Costs Certain eligible costs, such as costs to obtain and costs to fulfill our service contracts, are capitalized when the costs relate directly to the contract, are expected to be recovered, and generate or enhance resources to be used in satisfying the performance obligation. These costs primarily consist of commissions, transition and set-up costs. Capitalized costs to obtain and fulfill a contract are amortized on a straight-line basis over the expected period of benefit, which generally includes the contract base period and anticipated renewals. The Company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. The carrying amount of the asset is compared to the remaining amount of consideration the Company expects to receive for the services to which the asset relates, less the costs that relate directly to providing those services that have not yet been recognized. If the carrying amount is not recoverable, an impairment loss is recognized. Costs Allocated to Contracts The Company classifies indirect costs as overhead (included in cost of revenues) or general and administrative expenses in the same manner as such costs are defined in the Company’s Disclosure Statements under U.S. government Cost Accounting Standards (CAS). Stock-based Compensation The Company issues stock-based awards as compensation to employees and directors. Stock-based awards include stock options, vesting stock awards and performance share awards. These awards are accounted for as equity awards. The Company recognizes stock-based compensation expense net of estimated forfeitures on a straight-line basis over the underlying award’s requisite service period, as measured using the award’s grant date fair value. For performance share awards, the Company reassesses the probability of achieving the performance conditions at each reporting period end and adjusts compensation expense based on the number of shares the Company expects to ultimately issue. Income Taxes The Company accounts for income taxes under the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The provision for federal, state, local and foreign income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. Recording the provision for income taxes requires management to make significant judgments and estimates for matters for which the ultimate resolution may not become known until the final resolution of an examination by taxing authorities or the statute of limitations lapses. Additionally, recording liabilities for uncertainty in income taxes involves significant judgment in evaluating the Company’s tax positions and developing the best estimate of the taxes ultimately expected to be paid. Tax penalties and interest are included in income tax expense. The Company has also recognized liabilities for uncertainty in income taxes when it is more likely than not that a tax position will not be sustained on examination and settlement with various taxing authorities. The Company records the largest amount of benefit that is more likely than not to be realized when the tax position is settled. To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of reserves, our effective tax rate in a given financial period may be materially impacted. Deferred tax assets and liabilities are netted by taxable jurisdiction and classified as noncurrent on the consolidated balance sheets. Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents are comprised of cash in banks and highly liquid instruments, which primarily consist of bank deposits and investments in institutional money market funds. The Company includes outstanding payments within cash and cash equivalents and accounts payable on the consolidated balance sheets and as of February 3, 2023 and January 28, 2022 these amounts were $49 million and $54 million, respectively. The Company does not invest in high yield or high risk securities. The cash in bank accounts at times may exceed federally insured limits. Restricted cash consists of cash on deposit in rabbi trusts that are contractually restricted from use in operations, but are subject to future claims of creditors. The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets for the periods presented: February 3, 2023 January 28, 2022 (in millions) Cash and cash equivalents $ 109 $ 106 Restricted cash included in other current assets 5 5 Restricted cash included in other assets 4 4 Cash, cash equivalents and restricted cash $ 118 $ 115 Receivables Receivables include billed and billable receivables, and unbilled receivables. The Company’s receivables are primarily due from the U.S. government, or from prime contractors on which we are subcontractors and the end customer is the U.S. government, and are generally considered collectable from the perspective of the customer’s ability to pay. The Company does not have a material credit risk exposure. Unbilled receivables, substantially all of which are expected to be billed and collected within one year, are stated at their estimated realizable value and consist of costs and fees billable on contract completion or the occurrence of a specified event, other than the passage of time. Legal title to the related accumulated costs of contracts in progress generally vests with the U.S. government on the Company’s receipt of progress payments. Progress payments received of $42 million and $76 million offset unbilled receivables as of February 3, 2023 and January 28, 2022, respectively. Contract retentions are billed when contract conditions have been met and may relate to uncompleted indirect cost negotiations with the U.S. government. Based on historical experience, the majority of retention balances are expected to be collected beyond one year. Retention is presented in other assets on the consolidated balance sheets, see Note 3. Write-offs of retention balances have not been significant. Receivable balances are written-off in the period during which management determines they are uncollectable, and, at that time, such balances are removed from billed receivables and, if previously reserved, from the allowance. Inventory Inventory is substantially comprised of finished goods inventory purchased for resale to customers, such as tires and lubricants, and is valued at the lower of cost or net realizable value, generally using the average cost method. The Company evaluates current inventory against historical and planned usage to estimate the appropriate provision for obsolete inventory. Business Combinations The Company records all tangible and intangible assets acquired and liabilities assumed in a business combination at fair value as of the acquisition date, which is determined using a cost, market or income approach. The excess amount of the aggregated purchase consideration paid over the fair value of the net of assets acquired and liabilities assumed is recorded as goodwill. Acquisition date fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as measured on the acquisition date. The valuations are based on information that existed as of the acquisition date. During the measurement period that shall not exceed one year from the acquisition date, the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information that the Company has subsequently obtained regarding facts and circumstances that existed as of the acquisition date. Acquisition 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 consolidation, 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 consolidated statements of income. The amounts recognized in acquisition and integration costs on the consolidated statements of income are as follows: Year Ended February 3, January 28, January 29, (in millions) Acquisition (1) $ (2) $ 3 $ 20 Integration (2)(3) 15 53 34 Total acquisition and integration costs $ 13 $ 56 $ 54 (1) Acquisition expenses in fiscal 2023 reflect adjustments to the fair value of the Koverse earnout liability. Acquisition expenses recognized for fiscal 2022 were related to the acquisitions of Halfaker and Koverse. Acquisition expenses recognized for fiscal 2021 were related to the acquisition of Unisys Federal. See Note 4 for additional information related to the acquisitions. (2) Integration expenses for fiscal 2021 include an $11 million loss associated with the sale of certain non-strategic international operations. (3) Integration expenses include $6 million of restructuring costs for fiscal 2021 and $17 million and $1 million for the impairment of assets for fiscal 2022 and 2021, respectively. See Note 5 for additional information related to restructuring and impairment costs. Restructuring Costs The Company periodically initiates restructuring activities to support business strategies, realign resources, and enhance its operational efficiency. Restructuring costs may include severance and other employee related termination costs, and costs associated with consolidating or closing facilities. One-time involuntary employee termination benefits are recognized as a liability and measured at fair value when the plan of termination has been communicated to employees and certain other criteria are met. Ongoing employee termination benefit arrangements are recognized as a liability and measured at fair value when it is probable that amounts will be paid and such amounts are reasonably estimable. Costs to consolidate or close facilities primarily include lease obligation charges for exited facilities, including the impact of accelerated lease expense for right of use assets and accelerated depreciation expense for leasehold improvements with reductions in their estimated useful lives due to exited facilities. Leases The Company occupies most of its facilities under operating leases. Certain equipment is also leased under short-term or cancelable operating leases. The Company recognizes a right of use (ROU) asset and a lease liability upon the commencement of its operating leases. The initial lease liability is equal to the future fixed minimum lease payments discounted using the Company’s incremental borrowing rate on a secured basis. The lease term includes option renewal periods and early termination payments when it is reasonably certain that the Company will exercise those rights. The initial measurement of the ROU asset is equal to the initial lease liability plus any initial direct costs and prepayments, less any lease incentives. The Company recognizes lease costs on a straight-line basis over the remaining lease term, except for variable lease payments that are expensed in the period in which the obligation for those payments is incurred. For its facility leases, the Company combines and accounts for lease and non-lease components together as a single component. The Company does not recognize lease liabilities and ROU assets for leases with original terms of 12 months or less. ROU assets are evaluated for impairment as a long-lived asset. The Company leases IT equipment and hardware to its customers. All of the Company’s lessor arrangements are operating leases. Operating lease income is recognized on a straight-line basis over the term of the lease and is reported as revenue on the consolidated statements of income. Goodwill and Intangible Assets Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill and indefinite-lived intangible assets are not amortized, but rather are tested for potential impairment annually at the beginning of the Company's fourth quarter, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. There were no impairments during the periods presented. The goodwill impairment test is performed at the reporting unit level. The Company estimates and compares the fair value of each reporting unit to its respective carrying value including goodwill. The fair value of the Company’s reporting units are determined using either a market approach, income approach, or a combination of both, which involves the use of estimates and assumptions, including projected future operating results and cash flows, the cost of capital, and financial measures derived from observable market data of comparable public companies. If the fair value is less than the carrying value, the amount of impairment expense is equal to the difference between the reporting unit’s fair value and the reporting unit’s carrying value. Intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable at the asset group level. Property, Plant, and Equipment Property, plant, and equipment are carried at cost net of accumulated depreciation and amortization. Purchases of property, plant, and equipment, as well as costs associated with major renewals and betterments, are capitalized. Maintenance, repairs and minor renewals and betterments are expensed as incurred. When assets are sold or otherwise disposed of, the cost and related accumulated depreciation or amortization are removed and any resulting gain or loss is recognized. See Note 7 for depreciation and amortization methods and estimated useful lives by major asset class. Impairment of Long-lived Assets The Company evaluates its long-lived assets (including right of use lease assets) for potential impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable and the carrying amount of the asset exceeds its estimated future undiscounted cash flows (including sublease income) at the asset group level. When the carrying amount of the asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized to reduce the asset’s carrying amount to its estimated fair value based on the present value of its estimated future cash flows. In circumstances in which the Company has the ability and intent to sublease an exited facility, the Company performs an impairment test of the asset group (mainly consisting of right of use lease assets and leasehold improvements) on the earlier of the cease use date or sublease inception date by comparing the carrying amount of the asset group to the undiscounted cash flows associated with the asset group (mainly sublease income). When the carrying amount of the asset group exceeds its estimated future undiscounted cash flows, an impairment loss is recognized to reduce the asset group’s carrying amount to its estimated fair value based on the present value of estimated future cash flows. In circumstances in which the Company does not have the ability or intent to sublease an exited facility, the Company adjusts the estimated useful life of the facility related assets to end on the cease use date and recognizes accelerated depreciation and amortization. Commitments and Contingencies Accruals for commitments and loss contingencies are recorded when it is both probable that they will occur and the amounts can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both the probabilit |
Earnings Per Share, Share Repur
Earnings Per Share, Share Repurchases and Dividends | 12 Months Ended |
Feb. 03, 2023 | |
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: Year Ended February 3, January 28, January 29, (in millions) Basic weighted-average number of shares outstanding 55.3 57.6 58.1 Dilutive common share equivalents - stock options and other stock-based awards 0.5 0.5 0.6 Diluted weighted-average number of shares outstanding 55.8 58.1 58.7 Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for fiscal 2023, 2022, and 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 8.0 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 24.4 million shares. As of February 3, 2023, the Company has repurchased approximately 17.0 million shares of its common stock under the plan. Dividends The Company declared and paid quarterly dividends of $0.37 per share every quarter for the years presented. Total dividends declared and paid were $1.48 per share during fiscal 2023, 2022 and 2021. |
Revenues
Revenues | 12 Months Ended |
Feb. 03, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues: Changes in Estimates on Contracts Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows: Year Ended February 3, January 28, January 29, (in millions, except per share amounts) Favorable adjustments $ 40 $ 40 $ 41 Unfavorable adjustments (36) (27) (32) Net favorable adjustments 4 13 9 Income tax effect (1) (3) (2) Net favorable adjustments, after tax 3 10 7 Basic EPS impact $ 0.05 $ 0.17 $ 0.12 Diluted EPS impact $ 0.05 $ 0.17 $ 0.12 Revenues were $7 million, $21 million and $21 million higher for fiscal 2023, 2022 and 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: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Department of Defense $ 3,806 $ 3,578 $ 3,292 Other federal government agencies 3,750 3,671 3,611 Commercial, state and local 148 145 153 Total $ 7,704 $ 7,394 $ 7,056 Disaggregated revenues by contract type were as follows: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Cost reimbursement $ 4,282 $ 4,020 $ 3,773 Time and materials (T&M) 1,464 1,473 1,557 Firm-fixed price (FFP) 1,958 1,901 1,726 Total $ 7,704 $ 7,394 $ 7,056 Disaggregated revenues by prime versus subcontractor were as follows: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Prime contractor to federal government $ 6,996 $ 6,683 $ 6,337 Subcontractor to federal government 560 566 566 Other 148 145 153 Total $ 7,704 $ 7,394 $ 7,056 Contract Balances Contract balances for the periods presented were as follows: Balance Sheet line item February 3, January 28, (in millions) Billed and billable receivables, net (1) Receivables, net $ 572 $ 615 Contract assets - unbillable receivables Receivables, net 364 400 Contract assets - contract retentions Other assets 15 17 Contract liabilities - current Other accrued liabilities 48 55 Contract liabilities - non-current Other long-term liabilities $ 4 $ 9 (1) Net of allowance of $4 million as of February 3, 2023 and January 28, 2022. The changes in the Company's contract assets and contract liabilities during the current period primarily result from timing differences between the Company's performance, invoicing and customer payments. During fiscal 2023 and 2022, the Company recognized revenues of $46 million and $75 million relating to amounts that were included in the opening balance of contract liabilities as of January 28, 2022 and January 29, 2021, respectively. Deferred Costs Deferred costs for the periods presented were as follows: Balance Sheet line item February 3, January 28, (in millions) Pre-contract costs Other current assets $ 7 $ 4 Fulfillment costs - non-current Other assets 11 16 Costs to obtain Other assets $ 5 $ 3 Pre-contract costs of $6 million and $4 million were expensed during fiscal 2023 and 2022, respectively. Fulfillment costs of $5 million and $6 million were amortized during fiscal 2023 and 2022, respectively. Costs to obtain of $1 million were amortized during fiscal 2023 and 2022. Remaining Performance Obligations As of February 3, 2023, the Company had approximately $5 billion of remaining performance obligations. Remaining performance obligations exclude any variable consideration that is allocated entirely to unsatisfied performance obligations on our supply chain contracts. The Company expects to recognize revenue on approximately 80% of the remaining performance obligations over the next 12 months and approximately 95% over the next 24 months, with the remaining recognized thereafter. |
Acquisitions
Acquisitions | 12 Months Ended |
Feb. 03, 2023 | |
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 (as discussed in Note 11) 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 and are being 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, both of which are 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 February 3, 2023, the Company has recognized $12 million of the $13 million of post-combination compensation expense associated with employee retention agreements. Unisys Federal On March 13, 2020, the Company completed the acquisition of Unisys Federal, a former operating unit of Unisys Corporation. Unisys Federal provides infrastructure modernization, cloud migration, managed services, and enterprise IT-as-a-service solutions to U.S. federal civilian agencies and the Department of Defense. The Company purchased substantially all of the assets and liabilities of Unisys Federal for an aggregate purchase price of $1.2 billion. The Company used the net proceeds from its offering of Senior Notes and borrowings under the Term Loan B2 Facility, proceeds from the sale of receivables under its MARPA Facility, and cash on its balance sheet to finance the acquisition and pay related fees and expenses. The Company recorded a $67 million provision for certain off-market customer contracts whose terms were unfavorable compared to the current market terms as of the acquisition date. An income approach was used to estimate fair value, involving estimates for future costs to complete the remaining performance under the contract as well as a market participant profit rate of return. The provision for off-market customer contracts is included in other long-term liabilities and is being amortized over the remaining contractual terms as an increase to revenue. During fiscal 2023 and 2022, the Company accelerated the amortization for certain off-market customer contracts as a result of changes in their expected contractual terms which resulted in additional amortization of $6 million and $15 million during fiscal 2023 and 2022, respectively. As of February 3, 2023, the remaining unamortized balance of the provision for certain off-market customer contracts is $5 million and is expected to be amortized by the end of fiscal 2024. The Company incurred $49 million in acquisition-related costs associated with the acquisition of Unisys Federal, including $27 million of debt issue costs (as discussed in Note 11). The amount of Unisys Federal's revenue and net income attributable to common stockholders included in the consolidated statements of income for fiscal 2021 was $669 million and $62 million, respectively. The following unaudited pro forma financial information presents the combined results of operations for Unisys Federal and the Company for the twelve months ended January 29, 2021: Year Ended January 29, Revenues $ 7,146 Net income attributable to common stockholders $ 258 The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the acquisition of Unisys Federal as though it had occurred on the first day of fiscal 2020. They include adjustments for intangible asset amortization; interest expense and debt issuance costs on long-term debt; acquisition and other transaction costs; and certain costs allocated from the former parent. The unaudited pro forma financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on the first day of fiscal 2020, nor is it indicative of future operating results. |
Restructuring and Impairment
Restructuring and Impairment | 12 Months Ended |
Jan. 29, 2021 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Impairment | Restructuring and Impairment: Restructuring and impairment costs recognized were as follows: Year Ended Statement of Income line item February 3, 2023 January 28, 2022 January 29, 2021 (in millions) 2023 Restructuring: Severance and other employee costs SG&A and Cost of revenues $ 6 $ — $ — Other associated costs SG&A 14 — — 2022 Restructuring: Other associated costs SG&A — 1 — 2021 Restructuring: Severance and other employee costs SG&A — — 4 2019 Restructuring: Severance and other employee costs Acquisition and integration costs — — 2 Other associated costs Acquisition and integration costs — — 4 Total restructuring costs 20 1 10 Impairment of assets SG&A 4 1 1 Impairment of assets Acquisition and integration costs — 17 1 Total impairment of assets 4 18 2 Total restructuring costs and impairment $ 24 $ 19 $ 12 In fiscal 2023, the Company initiated restructuring activities (the "2023 Restructuring") associated with the optimization of business processes and incurred consulting costs, severance and other employee costs, and other costs related to the consolidation of certain facilities. The Company expects to complete these restructuring activities in fiscal 2024. During fiscal 2023, cash paid for consulting costs was $5 million. The remaining liability for consulting costs ($2 million) and the severance and other employee costs will be paid in fiscal 2024. In fiscal 2022, the Company initiated and completed restructuring activities (the “2022 Restructuring”) associated with the optimization and consolidation of certain facilities. The 2022 Restructuring included total restructuring costs of $1 million which were fully paid as of January 28, 2022. In fiscal 2021, the Company initiated and completed restructuring activities (the "2021 Restructuring") associated with an internal reorganization. As of January 29, 2021, the remaining liability associated with this restructuring was $4 million. During fiscal 2022, the Company made cash payments to fully settle this liability. In fiscal 2019, the Company initiated restructuring activities (the "2019 Restructuring") to realize cost synergies from the integration of Engility Holdings, Inc. (collectively with its consolidated subsidiaries, "Engility," which we acquired on January 14, 2019), which included employee termination costs and other costs associated with the optimization and consolidation of facilities. The 2019 Restructuring included total restructuring costs of $51 million, comprised of $40 million for severance and other employee costs and $11 million of other associated costs, such as contract terminations and costs incurred for facility consolidation. Cash paid for severance and other employee costs was $3 million and $12 million during fiscal 2021 and 2020, respectively. Cash paid for other associated costs was $4 million and $7 million during fiscal 2021 and 2020, respectively. The 2019 Restructuring was completed in fiscal 2021 and there was no remaining liability associated with this restructuring as of February 3, 2023 and January 28, 2022. During fiscal 2023, 2022 and 2021, the Company recognized impairment charges for certain assets associated with exited facilities of $4 million, $18 million and $2 million, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Feb. 03, 2023 | |
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 February 3, 2023 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: February 3, 2023 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 $ (466) $ 1,001 $ 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 $ (469) $ 1,009 $ 1,495 $ (363) $ 1,132 Amortization expense related to intangible assets was $125 million, $128 million and $147 million for fiscal 2023, 2022 and 2021, respectively. There were no impairments of intangible assets during the periods presented. Intangible assets with a gross carrying value of $19 million became fully amortized during fiscal 2023 and are no longer reflected in the gross carrying value and accumulated amortization as of February 3, 2023. As of February 3, 2023, the estimated future annual amortization expense related to intangible assets is as follows: Fiscal Year (in millions) 2024 $ 115 2025 115 2026 115 2027 115 2028 98 Thereafter 451 Total $ 1,009 Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments and other factors. |
Property, Plant, and Equipment
Property, Plant, and Equipment | 12 Months Ended |
Feb. 03, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant, and Equipment | Property, Plant, and Equipment: Property, plant, and equipment, depreciation and amortization methods, and estimated useful lives by major asset class were as follows: Depreciation or amortization method Estimated useful lives (in years) February 3, January 28, (in millions) Computer equipment Straight-line or 3-10 $ 92 $ 97 Capitalized software and software licenses Straight-line or 3-10 47 47 Leasehold improvements Straight-line Shorter of lease term or 10 109 94 Office furniture and fixtures Straight-line or 3-10 19 20 Buildings and improvements Straight-line 40 7 7 Construction in process 11 16 Land 1 1 Property, plant, and equipment 286 282 Accumulated depreciation and amortization (194) (182) Property, plant, and equipment, net $ 92 $ 100 Depreciation and amortization expense for property, plant, and equipment was $32 million, $37 million and $32 million in fiscal 2023, 2022 and 2021, respectively. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Feb. 03, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation: Plan Summaries Certain of the Company’s employees participate in the following four stock-based compensation plans: “2013 Equity Incentive Plan” (EIP), “Management Stock Compensation Plan,” “2013 Employee Stock Purchase Plan” (ESPP), and the "2012 Long Term Performance Plan" (LTPP), which are herein referred to together as the “Plans.” The Company issues new shares on the vesting of stock awards or exercise of stock options under these Plans. The EIP provides the Company’s employees and directors the opportunity to receive various types of stock-based compensation and cash awards. The terms of the stock-based awards granted to employees and directors are the same, except that those for directors cliff vest within one year of the grant date. As of February 3, 2023, the Company has outstanding stock options, vested and vesting stock awards, and performance share awards under this plan. Stock options granted under the EIP generally become exercisable 33%, 33% and 33% after one, two and three years, respectively, while vesting stock awards granted prior to fiscal 2020 generally vest 25%, 25%, 25% and 25% after one, two, three and four years, respectively. Vesting stock awards granted in fiscal 2020 and thereafter generally vest 33%, 33% and 33% after one, two and three years, respectively. The maximum contractual term for stock options granted under the EIP is ten years, but historically the Company has granted stock options with a seven-year contractual term. The requisite service period is accelerated for employees meeting retirement eligibility conditions. Vesting accelerates for eligible officers upon termination of employment, subject to certain conditions set forth in the Company’s Executive Severance, Change in Control and Retirement Policy effective July 1, 2020. Stock-based awards generally provide for accelerated vesting if there is a change in control (as defined in the EIP). Vesting stock awards and performance share awards have forfeitable rights to dividends. As of February 3, 2023, the total authorized shares of common stock for issuance under the EIP is 8.5 million. The Company grants performance-based stock awards to certain officers and key employees under the EIP. Performance shares are rights to receive shares of the Company’s stock upon satisfaction of certain requirements. Performance-based stock awards granted prior to fiscal 2022 include service and performance conditions. Performance-based stock awards granted in fiscal 2022 and thereafter also include market conditions. For performance-based stock awards granted prior to fiscal 2023, the performance metrics are based on annual operating cash flows and a three year cumulative measure of earnings. For performance-based stock awards granted in fiscal 2023, the performance metrics are based on three year cumulative operating cash flows and a three year cumulative measure of earnings. The market conditions for awards granted in fiscal 2022 and thereafter are based on the Company's total shareholder return over the three year performance period as compared to the total shareholder return for a specified group of companies over the same period. These awards cliff vest at the end of the third fiscal year following the grant date, subject to meeting the minimum service requirements and the achievement of the Company’s performance metrics and market conditions, with the number of shares ultimately issued, if any, ranging up to 200% of the specified target shares. If performance is below a minimum threshold level of performance, no shares will be issued. The Management Stock Compensation Plan provides for awards in share units to eligible employees. Benefits are payable in shares of the Company’s stock that are held in a trust for the purpose of funding benefit payments to the participants. During fiscal 2017, all remaining outstanding awards in the Management Stock Compensation Plan vested. The Board of Directors may at any time amend or terminate the Management Stock Compensation Plan. In the event of a change in control of the Company (as defined by the Management Stock Compensation Plan), participant accounts will be immediately distributed, otherwise participant accounts will generally be distributed upon retirement based on the participant’s payout election, or upon termination. The Management Stock Compensation Plan does not provide for a maximum number of shares available for future issuance. The Company’s ESPP allows eligible employees to purchase shares of the Company’s stock at a discount of up to 15% of the fair market value on the date of purchase. During the three fiscal years ended February 3, 2023, the ESPP discount was 5% of the fair market value on the date of purchase, thereby resulting in the ESPP being non-compensatory. As of February 3, 2023, 3.4 million shares of the Company’s stock are authorized for issuance under the ESPP. The LTPP provides certain employees of the Company the opportunity to receive various types of stock-based compensation awards. Vesting stock awards issued under the LTPP generally cliff vest at the end of the third fiscal year following the grant date. Vesting may be accelerated for employees meeting retirement eligibility conditions. Vesting stock awards under the LTPP have forfeitable rights to dividends. Expense and Related Tax Benefits Recognized Stock-based compensation expense and related tax benefits recognized under the Plans were: Year Ended February 3, January 28, January 29, (in millions) Stock-based compensation expense: Stock options $ — $ 1 $ 3 Vesting stock awards 38 36 32 Performance share awards 10 9 7 Total stock-based compensation expense $ 48 $ 46 $ 42 Tax benefits recognized from stock-based compensation $ 16 $ 15 $ 14 Stock-based compensation expense for stock options was not material for fiscal 2023. Stock Options Stock options are granted with their exercise price equal to the closing market price of the Company’s stock on the last trading day preceding the grant date. Stock option activity for the year ended February 3, 2023 was: Shares of stock under stock options Weighted-average exercise price Weighted-average remaining contractual term Aggregate intrinsic value (in millions) (in years) (in millions) Outstanding at January 28, 2022 0.6 $ 72.34 3.3 $ 6 Options granted — — Options forfeited or expired — — Options exercised (0.2) 68.89 Outstanding at February 3, 2023 0.4 $ 74.57 2.9 $ 11 Exercisable at February 3, 2023 0.3 $ 74.67 2.8 $ 10 Vested and expected to vest at February 3, 2023 0.4 $ 74.57 2.9 $ 11 As of February 3, 2023, the unrecognized compensation cost, net of estimated forfeitures, related to stock options was not material. The following table summarizes activity related to exercises of stock options: Year Ended February 3, January 28, January 29, (in millions) Cash received from exercises of stock options $ — $ 1 $ — Stock exchanged at fair value upon exercises of stock options $ 1 $ 1 $ 1 Tax benefits from exercises of stock options $ 1 $ 1 $ 2 Total intrinsic value of options exercised $ 8 $ 4 $ 8 The fair value of stock option awards granted under the Company’s plan were valued using the Black-Scholes option-pricing model based on the following assumptions: Expected Term --The expected term was calculated from the Company's historical settlement data. Expected Volatility --The expected volatility is based on the historical volatility of the Company over a period commensurate with the expected term of the stock option as of the date of grant. Risk-Free Interest Rate --The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the stock option on the date of grant. Dividend Yield --The dividend yield assumed over the expected term of the option is calculated based on the most recently announced dividend as of the grant date. The weighted-average grant date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were: Year Ended January 29, Weighted-average grant-date fair value $ 17.54 Expected term (in years) 3.8 Expected volatility 35.5 % Risk-free interest rate 0.3 % Dividend yield 1.8 % Vesting Stock Awards Vesting stock award activity for the year ended February 3, 2023 was: Shares of stock under vesting stock awards Weighted-average grant date fair value (in millions) Unvested at January 28, 2022 1.0 $ 80.78 Awards granted 0.6 95.43 Awards forfeited (0.1) 85.94 Awards vested (0.5) 79.87 Unvested at February 3, 2023 1.0 $ 89.60 The grant date fair value of vesting stock awards is based on the closing market price of the Company’s stock on the last trading day preceding the grant date. The weighted-average grant date fair value of the vesting stock awards granted in fiscal 2023, 2022 and 2021 was $95.43, $83.65 and $76.41, respectively. As of February 3, 2023 there was $46 million of unrecognized compensation cost, net of estimated forfeitures, related to vesting stock awards, which is expected to be recognized over a weighted-average period of 1.8 years. The fair value of vesting stock awards that vested in fiscal 2023, 2022 and 2021 was $44 million, $39 million and $32 million, respectively. Performance Share Awards Performance share award activity for the year ended February 3, 2023 was: Shares of stock under performance shares Weighted-average grant date fair value (in millions) Unvested at January 28, 2022 0.2 $ 78.13 Awards granted 0.2 100.94 Awards forfeited — — Awards vested (0.1) 74.46 Performance adjustments — — Unvested at February 3, 2023 0.3 $ 91.63 The actual number of shares to be issued upon vesting range between 0-200% of the specified target shares. In the table above, the number of performance shares are presented at 100% of the specified target shares, except for awards that vested and the performance adjustment. The vested amount reflects the number of shares to be issued based on the actual achievement of the performance goals for shares that vested during the period. The performance adjustment amount reflects the increase or decrease in the number of performance shares vested compared to the number of performance shares that would have vested at target. The weighted-average grant date fair value of the performance share awards granted in fiscal 2023, 2022 and 2021 was $100.94, $80.57 and $74.40, respectively. For performance shares granted prior to fiscal 2022, the grant date fair value was based on the closing market price of the Company’s common stock on the last trading day preceding the grant date. For performance share awards granted in fiscal 2022 and thereafter, the grant date fair value was determined using a Monte Carlo simulation model that incorporated multiple valuation assumptions, including the Company's expected total shareholder return relative to a specified group of companies defined within the award agreement. The primary assumptions included an expected volatility of 38.02% and 39.73% for fiscal 2023 and 2022, respectively, and a risk-free interest rate of 2.44% and 0.32% for fiscal 2023 and 2022, respectively. The expected volatility was based on the historical volatility of the Company over a period commensurate with the expected term of the award as of the date of grant. The risk-free interest rate was based on the yield curve of a zero-coupon U.S. Treasury bond with a maturity equal to the expected term of the award on the date of grant. The fair value of performance share awards that vested in fiscal 2023 was $10 million. For unvested performance shares as of February 3, 2023 the Company expects to issue 0.3 million shares of stock in the future based on the estimated future achievement of the performance goals. As of February 3, 2023 there was $11 million of unrecognized compensation cost, net of estimated forfeitures, related to performance share awards, which is expected to be recognized over a weighted-average period of 1.8 years. |
Retirement Plans
Retirement Plans | 12 Months Ended |
Feb. 03, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Plans | Retirement Plans: Defined Contribution Plans The Company sponsors the Science Applications International Corporation Retirement Plan (a qualified defined contribution 401(k) plan) and an employee stock ownership plan, in which most employees are eligible to participate. There are a variety of investment options available, including the Company's stock. The Science Applications International Corporation Retirement Plan allows eligible participants to contribute a portion of their income through payroll deductions and the Company makes matching company contributions and may also make discretionary contributions. The Company contributions expensed for defined contribution plans were $80 million, $79 million and $73 million in fiscal 2023, 2022 and 2021, respectively. Deferred Compensation Plans The Company maintains the Science Applications International Corporation Deferred Compensation Plan (DCP) which provides certain eligible employees and directors an opportunity to defer some or all of their compensation on an unfunded, nonqualified basis. Participant deferrals are fully vested and diversified at the participant’s direction among the investment options offered under the DCP. Participant accounts are credited with a rate of return based on the performance of the investment options selected. Distributions are made in cash. Deferred balances are paid on retirement based on the participant’s payout election, or upon termination. The Company may provide discretionary contributions to participants, but no Company contributions have been made. The Science Applications International Corporation Key Executive Stock Deferral Plan (KESDP) was closed on December 31, 2014, and no further deferrals are allowed. Benefits from the KESDP are payable in shares of the Company’s stock that may be held in trust for the purpose of funding benefit payments to KESDP participants. Vested deferred balances are paid on retirement based on the participant’s payout election, or upon termination. The Science Applications International Corporation 401(k) Excess Deferral Plan (Excess Plan) was also closed on December 31, 2014, and no further deferrals are allowed. Participant deferrals are fully vested and diversified at the participant’s direction among the investment options offered under the Excess Plan. Deferred balances are paid on retirement or termination. Defined Benefit Plans In connection with the acquisition of Engility in fiscal 2019, SAIC assumed two defined benefit plans sponsored by Engility for certain current and former employees: a Defined Benefit Pension Plan (Pension Plan) and a Retiree Health Reimbursement Account Plan (RHRA Benefit Plan). Membership and participants' calculated pension benefit are frozen in the Pension Plan and membership in the RHRA Benefit Plan is frozen. Our funding policy is to contribute at least the minimum amount required by the Employee Retirement Income Security Act of 1974. Additional amounts are contributed to assure that plan assets will be adequate to provide retirement benefits. During fiscal 2024, the Company expects to contribute $1 million to fund the RHRA Benefit Plan. During fiscal 2023, the Company recognized a net gain of $4 million on its retirement plans within other comprehensive income. The gain was comprised of a $10 million gain due to an increase in discount rates, partially offset by a $6 million loss due to the difference between actual investment return and expected return. During fiscal 2022, the Company recognized a net gain of $5 million on its retirement plans within other comprehensive income. The gain was comprised of a $4 million gain due to an increase in discount rates and a $1 million gain from the excess in actual investment return over the expected return. During fiscal 2021, the Company recognized a net gain of $2 million on its retirement plans within other comprehensive loss. The gain was primarily comprised of a $3 million gain due to assumption changes other than discount rates, $2 million gain from the excess in actual investment return over the expected return, and $1 million in settlement charges, partially offset by a $4 million increase in liability caused by a decrease in the discount rates. The settlement charges were driven by the Company transferring out $6 million of assets to settle the obligations of certain retirees within the Pension Plan. Net Periodic Benefit Cost The net periodic benefit (income) cost was as follows: Pension Plan RHRA Benefit Plan Year Ended February 3, 2023 January 28, 2022 January 29, 2021 February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Interest cost on projected benefit obligation $ 2 $ 1 $ 2 $ — $ 1 $ — Expected return on plan assets (3) (3) (3) — — — Settlement cost — — 1 — — — Net periodic benefit (income) cost $ (1) $ (2) $ — $ — $ 1 $ — Obligations and Funded Status The projected benefit obligation, fair value of plan assets and funded status for each plan are as follows: Pension Plan RHRA Benefit Plan February 3, 2023 January 28, 2022 February 3, 2023 January 28, 2022 (in millions) Change in benefit obligation: Benefit obligation at beginning of year $ 63 $ 70 $ 13 $ 14 Interest cost 2 1 — 1 Benefits paid (5) (5) (1) (1) Actuarial gain (8) (3) (2) (1) Benefit obligation at end of year $ 52 $ 63 $ 10 $ 13 Change in plan assets: Fair value of plan assets at beginning of year 54 55 — — Actual return on plan assets (3) 4 — — Employer contributions — — 1 1 Benefits paid (5) (5) (1) (1) Fair value of plan assets at end of year $ 46 $ 54 $ — $ — Unfunded status $ 6 $ 9 $ 10 $ 13 Amounts recognized in the consolidated balance sheets consist of: Pension Plan RHRA Benefit Plan February 3, 2023 January 28, 2022 February 3, 2023 January 28, 2022 (in millions) Other accrued liabilities $ — $ — $ 1 $ 1 Other long-term liabilities 6 9 9 12 Net amount recognized $ 6 $ 9 $ 10 $ 13 Assumptions The Company uses the spot rate approach to measure liabilities and interest costs for defined benefit obligations. Under the spot rate approach, the Company uses individual spot rates along the yield curve that correspond with the timing of each benefit payment. The discount rates represent the estimated rate at which we could effectively settle our defined benefit obligations using a high quality bond yield curve. The assumed long-term rate of return on plan assets, which is the average return expected on the funds invested or to be invested to provide future benefits to pension plan participants, is determined by an annual review of historical returns on plan assets. In selecting the expected long-term rate of return on assets used for the Pension Plan, the Company considered its investment return goals stated in the Pension Plan's investment policy. This process included determining expected returns for the various asset classes that comprise the Pension Plan's target asset allocation. The following assumptions were used to determine the benefit obligations and net periodic benefit costs: Pension Plan RHRA Benefit Plan February 3, 2023 January 28, 2022 January 29, 2021 February 3, 2023 January 28, 2022 January 29, 2021 Discount rate 4.94 % 3.13 % 2.47 % 4.85 % 2.78 % 1.86 % Interest cost effective rate 2.61 % 1.72 % 2.47 % 2.33 % 1.35 % 2.27 % Expected rate of return on assets 5.25 % 5.50 % 5.50 % N/A N/A N/A Pension Plan Assets The Company's investment policy includes a periodic review of the Pension Plan's investment in the various asset classes. During fiscal 2023, the Company's overall investment strategy was for plan assets to achieve a long-term rate of return of 5.25%, with a wide diversification of asset types, fund strategies and fund managers. The target allocation for the plan assets is 44% in domestic equity securities, 20% international equity securities, 31% in fixed income securities and 5% in cash and cash equivalents. The risk management practices include regular evaluations of fund managers to ensure the risk assumed is commensurate with the given investment style and objectives. According to the plan's investment policy, performance will be evaluated across all time periods, with a particular emphasis on longer-term returns relative to associated peers and benchmarks. The fair value measurement of plan assets by category is as follows: Asset Category Fair Value Hierarchy February 3, 2023 January 28, 2022 (in millions) Mutual funds Equity Level 1 $ 30 $ 34 Fixed income Level 1 8 9 Guaranteed deposit account Level 3 1 3 Subtotal 39 46 Collective trust - fixed income (1) Measured at NAV 7 8 Total $ 46 $ 54 (1) Collective trusts are measured at fair value using net asset value (NAV) as a practical expedient and have not been categorized in the fair value hierarchy. Fair Value Measurement Using Significant Unobservable Inputs (Level 3) A reconciliation of the beginning and ending balances of the Guaranteed Deposit Account (GDA) is as follows: Guaranteed Deposit Account (in millions) Balance at January 29, 2021 $ 3 Purchases 5 Sales (5) Balance at January 28, 2022 3 Purchases 3 Sales (5) Balance at February 3, 2023 $ 1 The GDA is designed to provide liquidity and safety of principal with a competitive guaranteed rate of return. The fair value of the GDA approximates the market value of underlying investments by discounting expected future investment cash flow from both investment income and repayment of principal for each investment purchased directly for the defined benefit segment of the General Account. Principal and accumulated interest are fully guaranteed by Prudential Retirement Insurance and Annuity Company (PRIAC). The declared interest rate is announced each year in advance and is determined by PRIAC. The GDA invests in a broadly diversified, fixed-income portfolio within PRIAC's general account. The portfolio is invested in public bonds, commercial mortgages and private placement bonds. Estimated Future Benefit Payments The following table sets forth the expected timing of benefit payments by fiscal year: Fiscal Year Pension Plan RHRA Benefit Plan Total (in millions) 2024 $ 5 $ 1 $ 6 2025 5 1 6 2026 5 1 6 2027 5 1 6 2028 4 1 5 Five subsequent fiscal years $ 21 $ 5 $ 26 |
Income Taxes
Income Taxes | 12 Months Ended |
Feb. 03, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: Substantially all of the Company’s income before income taxes for the three fiscal years ended February 3, 2023 is subject to taxation in the United States. The provision for income taxes for each of the periods presented include the following: Year Ended February 3, January 28, January 29, (in millions) Current: Federal $ 69 $ 13 $ 34 State 20 7 14 Deferred: Federal (15) 48 10 State (2) 11 2 Total $ 72 $ 79 $ 60 A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate to income before income taxes for each of the periods presented was as follows: Year Ended February 3, January 28, January 29, (in millions) Amount computed at the statutory federal income tax rate $ 79 $ 75 $ 57 State income taxes, net of federal tax benefit 13 16 13 Research and development and other federal credits (8) (9) (8) Non-deductible compensation 3 3 3 Excess tax benefits for stock-based compensation (3) (3) (3) Foreign-derived intangible income (12) (6) (1) Other — 3 (1) Total $ 72 $ 79 $ 60 Effective income tax rate 19.3 % 22.1 % 22.1 % The effective income tax rate for fiscal 2023 is below the rate in fiscal 2022 primarily due to additional tax deductions from foreign-derived intangible income studies. Deferred income taxes are recorded for differences in the basis of assets and liabilities for financial reporting purposes and tax reporting purposes. Deferred tax assets (liabilities) were comprised of: February 3, January 28, (in millions) Accrued vacation and bonuses $ 28 $ 30 Accrued liabilities 17 12 Deferred compensation 17 18 Stock awards 9 10 Net operating loss and other carryforwards 80 94 Fixed asset basis difference 2 — Deferred revenue — 17 Lease liability 50 63 Research and development expenditures 152 — Accumulated other comprehensive loss — 13 Valuation allowance (8) (7) Total deferred tax assets 347 250 Deferred revenue (21) — Payroll tax deferral (2) (2) Fixed asset basis difference — (3) Purchased intangible assets (264) (235) Right of use assets (40) (53) Accumulated other comprehensive income (6) — Total deferred tax liabilities (333) (293) Net deferred tax assets (liabilities) $ 14 $ (43) For fiscal 2023, net deferred tax assets are presented in other assets on the consolidated balance sheets. For fiscal 2022, net deferred tax liabilities are presented as deferred income taxes on the consolidated balance sheets. Deferred tax assets for both periods include state tax credit carryforwards for which the Company has set up a valuation allowance. The changes in the unrecognized tax benefits, excluding accrued interest and penalties, were: Year Ended February 3, January 28, January 29, (in millions) Unrecognized tax benefits at beginning of the year $ 78 $ 66 $ 51 Additions for tax positions related to prior years 5 2 8 Additions for tax positions related to the current year 75 10 9 Reductions for prior year tax positions related to statute expiration — — (2) Unrecognized tax benefits at end of the year $ 158 $ 78 $ 66 Unrecognized tax benefits that, if recognized, would affect the effective income tax rate $ 90 $ 70 $ 66 Beginning in fiscal 2023, the Tax Cuts and Jobs Act of 2017 (TCJA) eliminated the option for taxpayers to deduct certain research and development expenditures in the year incurred and instead requires taxpayers to capitalize and amortize such research expenditures over five years. During the year ended February 3, 2023, as a result of the TCJA, the Company recognized an increase in unrecognized tax benefits of approximately $61 million with a corresponding increase to net deferred tax assets. It is reasonably possible that within the next twelve months our liabilities associated with uncertain tax positions may increase by approximately $50 million related to capitalized research and development costs. The actual impact will depend on the amount of research and development costs incurred by the Company, whether Congress modifies, or repeals this provision and whether new guidance and interpretive rules are issued by the U.S. Treasury, among other factors. The Company recognizes net interest and penalties as a component of income tax expense. As of February 3, 2023, our accrued interest and penalties related to unrecognized tax benefits was approximately $8 million. The Company has filed income tax returns in the U.S. and in various foreign jurisdictions, which may be subject to routine compliance reviews by the Internal Revenue Service (IRS) and other taxing authorities. While the Company believes it has adequate accruals for uncertain tax positions, the tax authorities may determine that the Company owes taxes in excess of recorded accruals or the recorded accruals may be in excess of the final settlement amounts agreed to by tax authorities. The Company’s tax returns for fiscal years 2016 through 2022 remain subject to examination by the IRS and various other tax jurisdictions. The Company is currently under examination by the IRS for fiscal years 2016 through 2019. As of February 3, 2023, the Company has approximately $62 million of tax effected federal loss carryforwards, $9 million of tax effected state loss carryforwards and approximately $9 million of state credit carryforwards that will begin to expire in fiscal 2025. The valuation allowance of $8 million at February 3, 2023 relates to these state credit carryforwards. |
Debt Obligations
Debt Obligations | 12 Months Ended |
Feb. 03, 2023 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations: The Company’s long-term debt as of the periods presented was as follows: February 3, 2023 January 28, 2022 Stated interest rate Effective interest rate Principal Unamortized debt issuance costs Net Principal Unamortized debt issuance costs Net (in millions) Term Loan A Facility due June 2027 5.91 % 6.03 % $ 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 6.54 % 6.75 % 488 (3) 485 983 (7) 976 Term Loan B2 Facility due March 2027 6.54 % 6.99 % 272 (4) 268 272 (5) 267 Senior Notes due April 2028 4.88 % 5.11 % 400 (4) 396 400 (5) 395 Total long-term debt $ 2,390 $ (16) $ 2,374 $ 2,540 $ (22) $ 2,518 Less current portion 31 — 31 148 — 148 Total long-term debt, net of current portion $ 2,359 $ (16) $ 2,343 $ 2,392 $ (22) $ 2,370 As of February 3, 2023, 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 secured Revolving Credit Facility due June 2027. Any obligations under the Credit Facility are secured by liens on substantially all of the assets of the Company and its subsidiaries. The Revolving Credit Facility is available to the Company through June 2027 and there is no balance outstanding as of February 3, 2023. During fiscal 2023, the Company borrowed and repaid $410 million under the Revolving Credit Facility. As of February 3, 2023, the Company was in compliance with the covenants under its Credit Facility. During fiscal 2019, the Company entered into the Third Amended and Restated Credit Agreement (Third Amended Credit Agreement). The Third Amended Credit Agreement contains certain restrictive covenants applicable to the Company and its subsidiaries including a requirement to maintain a Senior Secured Leverage Ratio (as defined in the Third Amended Credit Agreement) of not greater than 3.75 to 1.00 until the effectiveness of the acquisition of Engility, not greater than 4.50 to 1.00 upon the effectiveness of the acquisition and for the succeeding six fiscal quarters, and not greater than 4.00 to 1.00 thereafter, unless a Permitted Acquisition (as defined in the Third Amended Credit Agreement) occurs in which case not greater than 4.25 to 1.00 for three consecutive quarters following such a transaction. Borrowings under the Term Loan A Facility due October 2023 amortized quarterly beginning on January 31, 2020 at 1.25% of the original borrowed amount thereunder, with such quarterly amortization payments increasing to 1.875% on January 31, 2021 and then to 2.50% on January 31, 2022. Borrowings under the Term Loan B Facility due October 2025 amortize quarterly at 0.25% of the original borrowed amount. On March 13, 2020, the Company entered into the Second Amendment to the Third Amended and Restated Credit Agreement (Second Amendment), which established, among other things, a new $600 million senior secured term loan "B" credit facility commitment (the Term Loan B2 Facility due March 2027) that was funded in full contemporaneously with the closing of the acquisition of Unisys Federal (see Note 4). Borrowings under the Term Loan B2 Facility due March 2027 amortize quarterly beginning on July 31, 2020 at 0.25% of the original borrowed amount with the remaining unamortized balance due in full upon its maturity, March 13, 2027. The Term Loan B2 Facility due March 2027 is subject to the same mandatory prepayments as the Company’s existing term loans under the Credit Facility and is subject to the same covenants and events of default as the Company's Term Loan B Facility due October 2025. During fiscal 2021, the Company made voluntary principal prepayments on the Term Loan B2 Facility due March 2027 of $325 million. The Company wrote off debt issuance costs associated with the voluntary principal prepayments of $8 million. On March 13, 2020, to partially finance the acquisition of Unisys Federal, the Company issued $400 million of unsecured 4.875% Senior Notes due 2028 (the Senior Notes) through a private offering. Interest is payable semi-annually on April 1 and October 1 of each year, commencing on October 1, 2020, and the principal is due on April 1, 2028. The Company incurred $27 million of debt issue costs associated with the Second Amendment, the issuance of the Senior Notes, and an undrawn bridge facility that terminated upon the consummation of the acquisition of Unisys Federal. The Company deferred $22 million of financing fees and recognized $5 million of expenses associated with the undrawn bridge facility, which was included in interest expense. Deferred financing fees are amortized to interest expense utilizing the effective interest method. On March 1, 2021, the Company executed the Third Amendment to the Third Amended and Restated Credit Agreement, which reduced the applicable margin for the Term Loan B2 Facility due March 2027 for LIBOR loans from 2.25% to 1.875% and for base rate loans from 1.25% to 0.875%. On July 2, 2021, the Company executed the Fourth Amendment to the Third Amended and Restated Credit Agreement, which established a new senior secured incremental term loan credit facility commitment in the amount of $100 million (the Term Loan A2 Facility due October 2023). The entirety of the Term Loan A2 Facility due October 2023 was borrowed by the Company and the proceeds were immediately used to pay a portion of the purchase price of Halfaker (see Note 4). 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. In fiscal 2023, 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. Prior to its prepayment on June 30, 2022, borrowings under the Term Loan A2 Facility due October 2023 amortized quarterly beginning on October 31, 2021 at 0.3125% of the original borrowed amount thereunder. The Term Loan A2 Facility due October 2023 bore interest at a variable rate of interest based on LIBOR or a base rate, plus an applicable margin of 1.25% to 2.00% for LIBOR loans and 0.25% to 1.00% for base rate loans, dependent on the Company’s leverage ratio. 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. 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 dates of the facilities utilizing the effective interest rate method. The scheduled principal repayments for the Term Loan Facilities may be further reduced or eliminated by annual mandatory prepayments of a portion of SAIC’s Excess Cash Flow (as defined in the Third Amended Credit Agreement). Mandatory principal prepayments are allocated to the Term Loan Facilities on a pro rata basis and reduce the remaining scheduled principal installments for each facility. Voluntary principal prepayments may be applied to either or individual loans at the Company’s direction. In addition to the voluntary principal prepayments mentioned above associated with the Second Amendment and Fifth Amendment, the Company made $90 million and $35 million of voluntary principal prepayments on the Term Loan B Facility due October 2025 in fiscal 2023 and 2022, respectively. Maturities of long-term debt as of February 3, 2023 are: Fiscal Year Total (in millions) 2024 $ 31 2025 77 2026 596 2027 123 2028 1,163 Thereafter 400 Total principal payments $ 2,390 |
Derivative Instruments Designat
Derivative Instruments Designated as Cash Flow Hedges | 12 Months Ended |
Feb. 03, 2023 | |
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 February 3, 2023 Pay Fixed Rate Receive Variable Rate Settlement and Termination February 3, January 28, (in millions) (in millions) Interest rate swaps #1 685 2.96 % Term SOFR Monthly through October 31, 2025 16 (39) Interest rate swaps #2 475 2.36 % Term SOFR Monthly through October 31, 2023 9 (12) Total $ 1,160 $ 25 $ (51) (1) The fair value of the fixed interest rate swap asset is included in other assets on the consolidated balance sheets. The fair value of the fixed interest rate swaps liability is included in other accrued liabilities on the consolidated balance sheets. The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate debt. The counterparties to all swap agreements are financial institutions. See Note 13 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 February 3, 2023. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Loss by Component | 12 Months Ended |
Feb. 03, 2023 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Loss 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 defined benefit plans and fixed interest rate swap cash flow hedges that are discussed in Note 9 and Note 12, respectively. Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges (1) Defined Benefit Obligation Adjustment (2) Total (in millions) Balance at January 31, 2020 $ (67) $ (5) $ (72) Other comprehensive (loss) income before reclassifications (55) 1 (54) Amounts reclassified from accumulated other comprehensive loss 29 1 30 Income tax impact 7 — 7 Net other comprehensive (loss) income (19) 2 (17) Balance at January 29, 2021 $ (86) $ (3) $ (89) Other comprehensive income before reclassifications 31 5 36 Amounts reclassified from accumulated other comprehensive loss 34 — 34 Income tax impact (17) (1) (18) Net other comprehensive income 48 4 52 Balance at January 28, 2022 $ (38) $ 1 $ (37) Other comprehensive income before reclassifications 67 4 71 Amounts reclassified from accumulated other comprehensive income (loss) 9 — 9 Income tax impact (20) (1) (21) Net other comprehensive income 56 3 59 Balance at February 3, 2023 $ 18 $ 4 $ 22 (1) The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense. (2) The amount reclassified from accumulated other comprehensive income (loss) is included in other (income) expense, net. |
Sale of Receivables
Sale of Receivables | 12 Months Ended |
Feb. 03, 2023 | |
Receivables [Abstract] | |
Sales of Receivables | Sale 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. The receivables sold under the MARPA Facility are without recourse for any U.S. government credit risk. The MARPA Facility automatically renews each year unless one of the parties gives prior notice to terminate. The receivable transfers under the MARPA Facility have been recognized as sales, as the receivables had been legally isolated from the Company, the financial institution had a right to pledge or exchange the assets received and we do not maintain effective control over the transferred receivables. The fair value of the sold receivables approximated their book value due to their short-term nature. The Company does not retain an ongoing financial interest in the transferred receivables other than cash collection and administrative services. The Company estimated that its servicing fee was at fair value and therefore has not recognized a servicing asset or liability as of February 3, 2023 and January 28, 2022. Proceeds from the sale of receivables are reflected as cash flows from operating activities on the consolidated statements of cash flows. During fiscal 2023, 2022 and 2021, the Company incurred purchase discount fees of $8 million, $2 million and $2 million, respectively, which are presented in other (income) expense, net on the consolidated statements of income. MARPA Facility activity consisted of the following: Year Ended February 3, 2023 January 28, 2022 (in millions) Beginning balance $ 200 $ 185 Sale of receivables 3,729 3,224 Cash collections (3,679) (3,209) Outstanding balance sold to Purchaser (1) 250 200 Cash collected, not remitted to Purchaser (2) (30) (23) Remaining sold receivables $ 220 $ 177 (1) For fiscal 2023 and 2022, the Company recorded a net increase to cash flows from operating activities of $50 million and $15 million, respectively, from sold receivables. |
Leases
Leases | 12 Months Ended |
Feb. 03, 2023 | |
Leases [Abstract] | |
Leases | Leases: Total operating lease cost is comprised of the following: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Operating lease cost $ 67 $ 92 $ 74 Variable lease cost 11 17 21 Short-term lease cost 2 9 35 Sublease income — (1) (2) Total lease cost $ 80 $ 117 $ 128 Lease cost and sublease income are included primarily in cost of revenues and SG&A, except for $12 million and $1 million of impairment of right of use assets for fiscal 2022 and 2021, respectively, that are included in acquisition and integration costs. The Company's ROU assets and lease liabilities consisted of the following: Balance Sheet line item February 3, 2023 January 28, 2022 (in millions) Operating lease ROU asset Operating lease right of use assets $ 158 $ 209 Operating lease current liability Other accrued liabilities 42 52 Operating lease non-current liability Operating lease liabilities 152 192 Total operating lease liabilities $ 194 $ 244 Other supplemental operating lease information consists of the following: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Cash paid for amounts included in the measurement of operating lease liabilities $ 62 $ 74 $ 77 ROU assets obtained in exchange for new operating lease obligations $ 15 $ 54 $ 110 Maturities of operating lease liabilities as of February 3, 2023 were as follows: Fiscal Year Total (in millions) 2024 $ 48 2025 49 2026 41 2027 35 2028 19 Thereafter 19 Total minimum lease payments 211 Less: imputed interest (17) Present value of operating lease liabilities $ 194 The weighted-average remaining lease term and the weighted-average discount rate was 5 years and 3.5% as of February 3, 2023, respectively, and 5 years and 3.1% as of January 28, 2022, respectively. As of February 3, 2023, the Company had rental commitments of $3 million for facility leases that have not yet commenced. These operating leases are expected to commence in fiscal 2024 and have a weighted-average lease term of approximately 10 years. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Feb. 03, 2023 | |
Segment Reporting [Abstract] | |
Business Segment Information | Business Segment Information:The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization. We define our operating sectors based on the way our chief operating decision maker (CODM), currently our Chief Executive Officer, manages the operations for the purpose of allocating resources and assessing performance. The two operating sectors are responsible for customer relationships, business development and program management, and delivery and execution, while the enterprise solutions and operations organization manages the development of our offerings, solutions and capabilities. 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. The Company's operating sectors are aggregated into one reportable segment because they have similar economic characteristics and meet the other aggregation criteria including similarities in the nature of the services provided, methods of service delivery, customers served and the regulatory environment in which they operate. Substantially all of the Company’s revenues and tangible long-lived assets are generated and located in the United States. As such, financial information by geographic location is not presented. In each of fiscal 2023, 2022 and 2021, 98% of our total revenues were attributable to prime contracts with the U.S. government or to subcontracts with other contractors engaged in work for the U.S. government. |
Legal Proceedings and Commitmen
Legal Proceedings and Commitments and Contingencies | 12 Months Ended |
Feb. 03, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Commitments and Contingencies | Legal Proceedings and Commitments and Contingencies: Legal Proceedings The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. In April 2022, the Company received a Federal Grand Jury Subpoena in connection with a criminal investigation being conducted by the U.S. Department of Justice, Antitrust Division (DOJ). As required by the subpoena, the Company has provided the DOJ with a broad range of documents related to the investigation, and the Company’s collection and production process remains ongoing. The Company is fully cooperating with the investigation. At this time, it is not possible to determine whether the Company will incur, or to reasonably estimate the amount of, any fines, penalties or further liabilities in connection with the investigation pursuant to which the subpoena was issued. 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 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 February 3, 2023, 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 CAS. Letters of Credit and Surety Bonds The Company has outstanding obligations relating to letters of credit of $9 million as of February 3, 2023, principally related to guarantees on insurance policies. The Company also has outstanding obligations relating to surety bonds in the amount of $19 million, principally related to performance and payment bonds on the Company’s contracts. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Feb. 03, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events: FSA Amendment On February 4, 2023, the Company sold 0.1% of its ownership interest in FSA to its sole joint venture partner for a nominal amount. As a result of the sale and the corresponding amendment to the joint venture operating agreement, the Company will no longer control the joint venture as of the date of the transaction and will therefore account for its retained interest as an equity method investment from the date of the transaction. Silicon Valley Bank On March 10, 2023, it was announced that Silicon Valley Bank (SVB) was closed by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver. As of March 10, 2023 , the Company held an immaterial amount of its cash and cash equivalents at SVB. As of the date of this report, the Company regained access to all of its funds that were previously held in deposit accounts with SVB and has transferred substantially all funds to an alternative financial institution. Agreement to Sell Logistics and Supply Chain Management Business On March 23, 2023, SAIC executed a definitive agreement to sell its logistics and supply chain management business to ASRC Federal Holding Company, LLC (ASRC Federal), a subsidiary of Arctic Slope Regional Corporation, for $350 million of pre-tax cash proceeds, which allows us to advance our focus on long-term strategic growth areas. The transaction is expected to close in the first half of fiscal 2024, subject to the satisfaction of customary closing conditions, including the receipt of required regulatory approvals, and is expected to result in a gain. Quarterly Dividend Declared Subsequent to the end of fiscal 2023, on March 29, 2023, the Company’s Board of Directors declared a cash dividend of $0.37 per share of the Company’s common stock payable on April 28, 2023 to stockholders of record on April 14, 2023. |
Business Overview and Summary_2
Business Overview and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Feb. 03, 2023 | |
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. 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. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. See Note 16 for additional information. |
Principles of Consolidation and Basis of Presentation | Principles of Consolidation and Basis of Presentation References to “financial statements” refer to the consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. |
Use of Estimates | Use of Estimates The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to, estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates. |
Reporting Periods | Reporting Periods The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2023 began on January 29, 2022 and ended on February 3, 2023, fiscal 2022 began on January 30, 2021 and ended on January 28, 2022, and fiscal 2021 began on February 1, 2020 and |
Stock-based Compensation | Stock-based CompensationThe Company issues stock-based awards as compensation to employees and directors. Stock-based awards include stock options, vesting stock awards and performance share awards. These awards are accounted for as equity awards. The Company recognizes stock-based compensation expense net of estimated forfeitures on a straight-line basis over the underlying award’s requisite service period, as measured using the award’s grant date fair value. For performance share awards, the Company reassesses the probability of achieving the performance conditions at each reporting period end and adjusts compensation expense based on the number of shares the Company expects to ultimately issue. |
Income Taxes | Income Taxes The Company accounts for income taxes under the asset and liability method of accounting, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. Under this method, changes in tax rates and laws are recognized in income in the period such changes are enacted. The provision for federal, state, local and foreign income taxes is calculated on income before income taxes based on current tax law and includes the cumulative effect of any changes in tax rates from those used previously in determining deferred tax assets and liabilities. Such provision differs from the amounts currently payable because certain items of income and expense are recognized in different reporting periods for financial reporting purposes than for income tax purposes. Recording the provision for income taxes requires management to make significant judgments and estimates for matters for which the ultimate resolution may not become known until the final resolution of an examination by taxing authorities or the statute of limitations lapses. Additionally, recording liabilities for uncertainty in income taxes involves significant judgment in evaluating the Company’s tax positions and developing the best estimate of the taxes ultimately expected to be paid. Tax penalties and interest are included in income tax expense. The Company has also recognized liabilities for uncertainty in income taxes when it is more likely than not that a tax position will not be sustained on examination and settlement with various taxing authorities. The Company records the largest amount of benefit that is more likely than not to be realized when the tax position is settled. To the extent we prevail in matters for which accruals have been established or are required to pay amounts in excess of reserves, our effective tax rate in a given financial period may be materially impacted. Deferred tax assets and liabilities are netted by taxable jurisdiction and classified as noncurrent on the consolidated balance sheets. |
Costs Allocated to Contracts | Costs Allocated to Contracts The Company classifies indirect costs as overhead (included in cost of revenues) or general and administrative expenses in the same manner as such costs are defined in the Company’s Disclosure Statements under U.S. government Cost Accounting Standards (CAS). |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents are comprised of cash in banks and highly liquid instruments, which primarily consist of bank deposits and investments in institutional money market funds. The Company includes outstanding payments within cash and cash equivalents and accounts payable on the consolidated balance sheets and as of February 3, 2023 and January 28, 2022 these amounts were $49 million and $54 million, respectively. The Company does not invest in high yield or high risk securities. The cash in bank accounts at times may exceed federally insured limits. |
Receivables | Receivables Receivables include billed and billable receivables, and unbilled receivables. The Company’s receivables are primarily due from the U.S. government, or from prime contractors on which we are subcontractors and the end customer is the U.S. government, and are generally considered collectable from the perspective of the customer’s ability to pay. The Company does not have a material credit risk exposure. Unbilled receivables, substantially all of which are expected to be billed and collected within one year, are stated at their estimated realizable value and consist of costs and fees billable on contract completion or the occurrence of a specified event, other than the passage of time. Legal title to the related accumulated costs of contracts in progress generally vests with the U.S. government on the Company’s receipt of progress payments. Progress payments received of $42 million and $76 million offset unbilled receivables as of February 3, 2023 and January 28, 2022, respectively. Contract retentions are billed when contract conditions have been met and may relate to uncompleted indirect cost negotiations with the U.S. government. Based on historical experience, the majority of retention balances are expected to be collected beyond one year. Retention is presented in other assets on the consolidated balance sheets, see Note 3. Write-offs of retention balances have not been significant. Receivable balances are written-off in the period during which management determines they are uncollectable, and, at that time, such balances are removed from billed receivables and, if previously reserved, from the allowance. |
Inventory | Inventory Inventory is substantially comprised of finished goods inventory purchased for resale to customers, such as tires and lubricants, and is valued at the lower of cost or net realizable value, generally using the average cost method. The Company evaluates current inventory against historical and planned usage to estimate the appropriate provision for obsolete inventory. |
Business Combinations | Business Combinations The Company records all tangible and intangible assets acquired and liabilities assumed in a business combination at fair value as of the acquisition date, which is determined using a cost, market or income approach. The excess amount of the aggregated purchase consideration paid over the fair value of the net of assets acquired and liabilities assumed is recorded as goodwill. Acquisition date fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants as measured on the acquisition date. The valuations are based on information that existed as of the acquisition date. During the measurement period that shall not exceed one year from the acquisition date, the Company may adjust provisional amounts recorded for assets acquired and liabilities assumed to reflect new information that the Company has subsequently obtained regarding facts and circumstances that existed as of the acquisition date. Acquisition 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 consolidation, 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 consolidated statements of income. The amounts recognized in acquisition and integration costs on the consolidated statements of income are as follows: Year Ended February 3, January 28, January 29, (in millions) Acquisition (1) $ (2) $ 3 $ 20 Integration (2)(3) 15 53 34 Total acquisition and integration costs $ 13 $ 56 $ 54 (1) Acquisition expenses in fiscal 2023 reflect adjustments to the fair value of the Koverse earnout liability. Acquisition expenses recognized for fiscal 2022 were related to the acquisitions of Halfaker and Koverse. Acquisition expenses recognized for fiscal 2021 were related to the acquisition of Unisys Federal. See Note 4 for additional information related to the acquisitions. (2) Integration expenses for fiscal 2021 include an $11 million loss associated with the sale of certain non-strategic international operations. (3) Integration expenses include $6 million of restructuring costs for fiscal 2021 and $17 million and $1 million for the impairment of assets for fiscal 2022 and 2021, respectively. See Note 5 for additional information related to restructuring and impairment costs. |
Restructuring Costs | Restructuring Costs The Company periodically initiates restructuring activities to support business strategies, realign resources, and enhance its operational efficiency. Restructuring costs may include severance and other employee related termination costs, and costs associated with consolidating or closing facilities. One-time involuntary employee termination benefits are recognized as a liability and measured at fair value when the plan of termination has been communicated to employees and certain other criteria are met. Ongoing employee termination benefit arrangements are recognized as a liability and measured at fair value when it is probable that amounts will be paid and such amounts are reasonably estimable. Costs to consolidate or close facilities primarily include lease obligation charges for exited facilities, including the impact of accelerated lease expense for right of use assets and accelerated depreciation expense for leasehold improvements with reductions in their estimated useful lives due to exited facilities. |
Leases | Leases The Company occupies most of its facilities under operating leases. Certain equipment is also leased under short-term or cancelable operating leases. The Company recognizes a right of use (ROU) asset and a lease liability upon the commencement of its operating leases. The initial lease liability is equal to the future fixed minimum lease payments discounted using the Company’s incremental borrowing rate on a secured basis. The lease term includes option renewal periods and early termination payments when it is reasonably certain that the Company will exercise those rights. The initial measurement of the ROU asset is equal to the initial lease liability plus any initial direct costs and prepayments, less any lease incentives. The Company recognizes lease costs on a straight-line basis over the remaining lease term, except for variable lease payments that are expensed in the period in which the obligation for those payments is incurred. For its facility leases, the Company combines and accounts for lease and non-lease components together as a single component. The Company does not recognize lease liabilities and ROU assets for leases with original terms of 12 months or less. ROU assets are evaluated for impairment as a long-lived asset. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill is recorded as the difference, if any, between the aggregate consideration paid for an acquisition and the fair value of the net tangible and intangible assets acquired and liabilities assumed. Goodwill and indefinite-lived intangible assets are not amortized, but rather are tested for potential impairment annually at the beginning of the Company's fourth quarter, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. There were no impairments during the periods presented. The goodwill impairment test is performed at the reporting unit level. The Company estimates and compares the fair value of each reporting unit to its respective carrying value including goodwill. The fair value of the Company’s reporting units are determined using either a market approach, income approach, or a combination of both, which involves the use of estimates and assumptions, including projected future operating results and cash flows, the cost of capital, and financial measures derived from observable market data of comparable public companies. If the fair value is less than the carrying value, the amount of impairment expense is equal to the difference between the reporting unit’s fair value and the reporting unit’s carrying value. Intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable at the asset group level. |
Property, Plant and Equipment | Property, Plant, and Equipment Property, plant, and equipment are carried at cost net of accumulated depreciation and amortization. Purchases of property, plant, and equipment, as well as costs associated with major renewals and betterments, are capitalized. Maintenance, repairs and minor renewals and betterments are expensed as incurred. When assets are sold or |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company evaluates its long-lived assets (including right of use lease assets) for potential impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable and the carrying amount of the asset exceeds its estimated future undiscounted cash flows (including sublease income) at the asset group level. When the carrying amount of the asset exceeds its estimated future undiscounted cash flows, an impairment loss is recognized to reduce the asset’s carrying amount to its estimated fair value based on the present value of its estimated future cash flows. In circumstances in which the Company has the ability and intent to sublease an exited facility, the Company performs an impairment test of the asset group (mainly consisting of right of use lease assets and leasehold improvements) on the earlier of the cease use date or sublease inception date by comparing the carrying amount of the asset group to the undiscounted cash flows associated with the asset group (mainly sublease income). When the carrying amount of the asset group exceeds its estimated future undiscounted cash flows, an impairment loss is recognized to reduce the asset group’s carrying amount to its estimated fair value based on the present value of estimated future cash flows. In circumstances in which the Company does not have the ability or intent to sublease an exited facility, the Company adjusts the estimated useful life of the facility related assets to end on the cease use date and recognizes accelerated depreciation and amortization. |
Commitments and Contingencies | Commitments and Contingencies Accruals for commitments and loss contingencies are recorded when it is both probable that they will occur and the amounts can be reasonably estimated. In addition, legal fees are accrued for cases where a loss is probable and the related fees can be reasonably estimated. Significant judgment is required to determine both the probability and the estimated amount of loss. The Company reviews these accruals quarterly and adjusts the accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel and other updated information. |
Pension and Defined Benefit Plans | Pension and Defined Benefit Plans The Company measures plan assets and benefit obligations as of the month-end that is closest to its fiscal year-end. Accounting and reporting for the Company's pension and defined benefit plans requires the use of assumptions, including but not limited to, a discount rate and an expected return on assets. These assumptions are reviewed at least annually based on reviews of current plan information and consultation with the Company's independent actuary and the plans’ investment advisor. If these assumptions differ materially from actual results, the Company's obligations under the pension and defined benefit plans could also differ materially, potentially requiring the Company to record an additional liability. The Company's pension and defined benefit plan liabilities are developed from actuarial valuations performed each year. |
Marketable Securities, Policy | 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 February 3, 2023 and January 28, 2022, the fair value of our investments total $28 million, and was included in other assets on the consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities. |
Fair Value Measurements | Fair Value Measurements The Company utilizes fair value measurement guidance prescribed by GAAP to value its financial instruments. The accounting standard for fair value measurements establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows: observable inputs such as quoted prices in active markets (Level 1); inputs other than the quoted prices in active markets that are observable either directly or indirectly (Level 2); and unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions (Level 3). The carrying amounts of cash and cash equivalents, receivables, accounts payable and other amounts included in other current assets and current liabilities that meet the definition of a financial instrument approximate fair value due to the short-term nature of these amounts. The carrying value of the Company’s outstanding debt obligations approximates its fair value, which is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements. |
Derivative Instruments Designated as Cash Flow Hedges | Derivative Instruments Designated as Cash Flow Hedges Derivative instruments are recorded on the consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and their 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 12 for further discussion on the Company’s derivative instruments designated as cash flow hedges. |
Operating Cycle | Operating CycleThe Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts. |
Research and Development | Research and Development The Company conducts research and development activities under customer-funded contracts and with company-funded independent research and development (IR&D) funds. IR&D efforts consist of projects involving basic research, applied research, development, and systems and other concept formulation studies. Company-funded IR&D expense is included in selling, general and administrative expenses (SG&A) and was $1 million, $4 million and $6 million in fiscal 2023, 2022 and 2021, respectively. Customer-funded research and development activities performed under customer contracts are charged directly to cost of revenues for those particular contracts. |
Accounting Standards Updates | Accounting Standards Updates In 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. |
Revenue Recognition | Revenue Recognition The Company provides technical, engineering and enterprise IT services under long-term service arrangements primarily with the U.S. government, including subcontracts with other contractors engaged in work for the U.S. government. The Company also serves a number of state and local governments, foreign governments and U.S. commercial customers. The Company provides services under various contract types, including firm-fixed price (FFP), time-and-materials (T&M), cost-plus-fixed-fee, cost-plus-award-fee and cost-plus-incentive-fee contracts. Our service arrangements typically involve an annual base period of performance followed by renewal option periods that upon exercise are generally accounted for as separate contracts. To determine the proper revenue recognition, the Company first evaluates whether we have a duly approved and enforceable contract with a customer, in which rights of parties and payment terms are identified and collectability is probable. We also evaluate whether two or more contracts should be combined and accounted for as a single contract and whether modifications to existing contracts should be accounted for as part of the original contract or as a separate contract. Contract modifications that create new enforceable rights and obligations are accounted for prospectively. Contract modifications that do not add distinct goods or services are accounted for through cumulative catch-up adjustments. Contract modifications that add distinct goods or services and increase the contract value by an amount that reflects the standalone selling price are accounted for as separate contracts. The Company recognizes revenue when, or as, we satisfy our performance obligations under a contract. A performance obligation is the unit of account for revenue recognition and refers to a promise in a contract to transfer a distinct service or good to the customer. The majority of the Company’s contracts contain a single performance obligation involving a significant integration of various activities that are performed together to deliver a combined service or solution. Performance obligations may be satisfied over time or at a point in time, but the majority of the Company’s performance obligations are satisfied over time. The Company selects the appropriate measure of progress for revenue recognition based on the nature of the performance obligation, contract type and other pertinent contract terms. Performance obligations satisfied over time may involve a series of recurring services, such as network operations and maintenance, operation and program support services, IT outsourcing services, and other IT arrangements where the Company is standing ready to provide support, when-and-if needed. Such performance obligations are satisfied over time because the customer simultaneously receives and consumes the benefits of our performance as services are provided. Alternatively, performance obligations satisfied over time may involve the completion of a contract deliverable. Examples include systems integration, network engineering, network design, and engineering and build services. Deliverable-based performance obligations are satisfied over time when the Company’s performance creates or enhances an asset that is controlled by the customer, or when the Company’s performance creates an asset that is customized to the customer’s specifications and the Company has a right to payment, including a reasonable profit margin, for work performed to date. For series-services performance obligations, the Company measures progress using either a cost input measure (cost-to-cost), a time-elapsed output measure, or the as-invoiced practical expedient. A cost input measure typically is applied to the Company’s cost-reimbursable contracts. Revenue is recognized based on the ratio of costs incurred to total estimated costs at completion. Award or incentive fees are allocated to the distinct periods to which they relate. For fixed-price contracts, a time-elapsed output measure is applied to fixed consideration, such that revenue is recognized ratably over the period of performance. Where fixed-price contracts also provide for reimbursement of certain costs, such as travel or other direct costs, consideration may be attributed only to a distinct subset of time within the performance period. The Company’s time-and-material and fixed price-level of effort contracts generally qualify for the as-invoiced practical expedient. Revenue on these contracts is recognized in the amount to which the Company has a contractual right to invoice. For deliverable-based performance obligations satisfied over time, the Company recognizes revenue using a cost input measure of progress (cost-to-cost), regardless of contract type. Revenue is recognized based on the ratio of costs incurred to total estimated costs at completion. The Company may incur costs associated with significant materials or hardware procurements that are not proportionate to the Company’s progress in satisfying its performance obligations. For these contracts, costs are excluded from the measure of progress, and revenue is recognized equal to the costs incurred. For performance obligations in which the Company does not transfer control over time, we recognize revenue at the point-in-time when the customer obtains control of the related asset, usually at the time of shipment or upon delivery. The Company accrues for shipping and handling costs occurring after the point-in-time control transfers to the customer. Recognizing revenue on long-term contracts involves significant estimates and judgments. The transaction price is the estimated amount of consideration we expect to receive for performance under our contracts. Contract terms may include variable consideration, such as reimbursable costs, award and incentive fees, usage-based fees, service-level penalties, performance bonuses, or other provisions that can either increase or decrease the transaction price. Variable amounts are generally determined upon our achievement of certain performance metrics, program milestones or cost targets and may be based upon customer discretion. When making our estimates, the Company considers the customer, contract terms, the complexity of the work and related risks, the extent of customer discretion, historical experience and the potential of a significant reversal of revenue. The Company includes variable consideration in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Many of the Company's contracts recognize revenue using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. Estimating costs at completion is complex due to the nature of the services being performed and the length of certain contracts. Contract costs generally include direct costs, such as labor, subcontract costs and materials, and indirect costs identifiable with or allocable to a specific contract. Management must make assumptions regarding the complexity of the work to be performed, the schedule and associated tasks, labor productivity and availability, increases in wages and prices of materials, execution by our subcontractors, overhead cost rates, and other variables. For contracts using a cost input measure, when total expected contract costs exceed total estimated contract revenues, 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. Contract costs incurred for U.S. government contracts, including indirect costs, are subject to audit and adjustment by the Defense Contract Audit Agency (DCAA). For contracts with multiple performance obligations, the Company allocates transaction price to each performance obligation based on the relative standalone selling price of each distinct performance obligation within the contract. Since the Company typically provides customized services and solutions that are specific to a single customer’s requirements, standalone selling price is most often estimated based on expected costs plus a reasonable profit margin. Changes in Estimates on Contracts Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can 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. Contract Balances The timing of revenue recognition may differ from the timing of billing and cash receipts from customers. Amounts are invoiced as work progresses, typically biweekly or monthly in arrears, or upon achievement of contractual milestones. We record a contract asset when revenue is recognized prior to invoicing, or a contract liability when cash is received in advance of recognizing revenue. A contract asset is a right to consideration that is conditional upon factors other than the passage of time. Contract assets include unbillable receivables and contract retentions, but exclude billed and billable receivables. Billed and billable receivables are rights to consideration, which are unconditional other than to the passage of time. Contract liabilities include customer advances, billings in excess of revenues and deferred revenue. Contract assets and liabilities are recorded net on a contract-by-contract basis and are generally classified as current based on our contract operating cycle. Deferred revenue attributable to long-term contract material renewal options may be classified as non-current when the option renewal period will not occur within one year of the balance sheet date. Deferred Costs Certain eligible costs, such as costs to obtain and costs to fulfill our service contracts, are capitalized when the costs relate directly to the contract, are expected to be recovered, and generate or enhance resources to be used in satisfying the performance obligation. These costs primarily consist of commissions, transition and set-up costs. Capitalized costs to obtain and fulfill a contract are amortized on a straight-line basis over the expected period of benefit, which generally includes the contract base period and anticipated renewals. The Company performs periodic reviews to assess the recoverability of deferred contract transition and setup costs. The carrying amount of the asset is compared to the remaining amount of consideration the Company expects to receive for the services to which the asset relates, less the costs that relate directly to providing those services that have not yet been recognized. If the carrying amount is not recoverable, an impairment loss is recognized. |
Earnings Per Share (EPS) | 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. |
Business Overview and Summary_3
Business Overview and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets for the periods presented: February 3, 2023 January 28, 2022 (in millions) Cash and cash equivalents $ 109 $ 106 Restricted cash included in other current assets 5 5 Restricted cash included in other assets 4 4 Cash, cash equivalents and restricted cash $ 118 $ 115 |
Schedule of Cash and Cash Equivalents | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the consolidated balance sheets for the periods presented: February 3, 2023 January 28, 2022 (in millions) Cash and cash equivalents $ 109 $ 106 Restricted cash included in other current assets 5 5 Restricted cash included in other assets 4 4 Cash, cash equivalents and restricted cash $ 118 $ 115 |
Business Combination, Separately Recognized Transactions | The amounts recognized in acquisition and integration costs on the consolidated statements of income are as follows: Year Ended February 3, January 28, January 29, (in millions) Acquisition (1) $ (2) $ 3 $ 20 Integration (2)(3) 15 53 34 Total acquisition and integration costs $ 13 $ 56 $ 54 (1) Acquisition expenses in fiscal 2023 reflect adjustments to the fair value of the Koverse earnout liability. Acquisition expenses recognized for fiscal 2022 were related to the acquisitions of Halfaker and Koverse. Acquisition expenses recognized for fiscal 2021 were related to the acquisition of Unisys Federal. See Note 4 for additional information related to the acquisitions. (2) Integration expenses for fiscal 2021 include an $11 million loss associated with the sale of certain non-strategic international operations. (3) Integration expenses include $6 million of restructuring costs for fiscal 2021 and $17 million and $1 million for the impairment of assets for fiscal 2022 and 2021, respectively. See Note 5 for additional information related to restructuring and impairment costs. |
Earnings Per Share, Share Rep_2
Earnings Per Share, Share Repurchases and Dividends (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
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: Year Ended February 3, January 28, January 29, (in millions) Basic weighted-average number of shares outstanding 55.3 57.6 58.1 Dilutive common share equivalents - stock options and other stock-based awards 0.5 0.5 0.6 Diluted weighted-average number of shares outstanding 55.8 58.1 58.7 |
Revenues (Tables)
Revenues (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | Disaggregated revenues by customer were as follows: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Department of Defense $ 3,806 $ 3,578 $ 3,292 Other federal government agencies 3,750 3,671 3,611 Commercial, state and local 148 145 153 Total $ 7,704 $ 7,394 $ 7,056 Disaggregated revenues by contract type were as follows: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Cost reimbursement $ 4,282 $ 4,020 $ 3,773 Time and materials (T&M) 1,464 1,473 1,557 Firm-fixed price (FFP) 1,958 1,901 1,726 Total $ 7,704 $ 7,394 $ 7,056 Disaggregated revenues by prime versus subcontractor were as follows: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Prime contractor to federal government $ 6,996 $ 6,683 $ 6,337 Subcontractor to federal government 560 566 566 Other 148 145 153 Total $ 7,704 $ 7,394 $ 7,056 |
Contract with Customer, Asset and Liability | Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows: Year Ended February 3, January 28, January 29, (in millions, except per share amounts) Favorable adjustments $ 40 $ 40 $ 41 Unfavorable adjustments (36) (27) (32) Net favorable adjustments 4 13 9 Income tax effect (1) (3) (2) Net favorable adjustments, after tax 3 10 7 Basic EPS impact $ 0.05 $ 0.17 $ 0.12 Diluted EPS impact $ 0.05 $ 0.17 $ 0.12 Contract balances for the periods presented were as follows: Balance Sheet line item February 3, January 28, (in millions) Billed and billable receivables, net (1) Receivables, net $ 572 $ 615 Contract assets - unbillable receivables Receivables, net 364 400 Contract assets - contract retentions Other assets 15 17 Contract liabilities - current Other accrued liabilities 48 55 Contract liabilities - non-current Other long-term liabilities $ 4 $ 9 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure | Deferred costs for the periods presented were as follows: Balance Sheet line item February 3, January 28, (in millions) Pre-contract costs Other current assets $ 7 $ 4 Fulfillment costs - non-current Other assets 11 16 Costs to obtain Other assets $ 5 $ 3 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Business Combinations [Abstract] | |
Schedule of Unaudited Pro Forma Financial Information | The following unaudited pro forma financial information presents the combined results of operations for Unisys Federal and the Company for the twelve months ended January 29, 2021: Year Ended January 29, Revenues $ 7,146 Net income attributable to common stockholders $ 258 |
Restructuring and Impairment (T
Restructuring and Impairment (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Related Costs | Restructuring and impairment costs recognized were as follows: Year Ended Statement of Income line item February 3, 2023 January 28, 2022 January 29, 2021 (in millions) 2023 Restructuring: Severance and other employee costs SG&A and Cost of revenues $ 6 $ — $ — Other associated costs SG&A 14 — — 2022 Restructuring: Other associated costs SG&A — 1 — 2021 Restructuring: Severance and other employee costs SG&A — — 4 2019 Restructuring: Severance and other employee costs Acquisition and integration costs — — 2 Other associated costs Acquisition and integration costs — — 4 Total restructuring costs 20 1 10 Impairment of assets SG&A 4 1 1 Impairment of assets Acquisition and integration costs — 17 1 Total impairment of assets 4 18 2 Total restructuring costs and impairment $ 24 $ 19 $ 12 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets, all of which were finite-lived, consisted of the following: February 3, 2023 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 $ (466) $ 1,001 $ 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 $ (469) $ 1,009 $ 1,495 $ (363) $ 1,132 |
Schedule of Estimated Annual Amortization Expense Related To Intangible Assets | As of February 3, 2023, the estimated future annual amortization expense related to intangible assets is as follows: Fiscal Year (in millions) 2024 $ 115 2025 115 2026 115 2027 115 2028 98 Thereafter 451 Total $ 1,009 |
Property, Plant, and Equipment
Property, Plant, and Equipment (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | epreciation and amortization methods, and estimated useful lives by major asset class were as follows: Depreciation or amortization method Estimated useful lives (in years) February 3, January 28, (in millions) Computer equipment Straight-line or 3-10 $ 92 $ 97 Capitalized software and software licenses Straight-line or 3-10 47 47 Leasehold improvements Straight-line Shorter of lease term or 10 109 94 Office furniture and fixtures Straight-line or 3-10 19 20 Buildings and improvements Straight-line 40 7 7 Construction in process 11 16 Land 1 1 Property, plant, and equipment 286 282 Accumulated depreciation and amortization (194) (182) Property, plant, and equipment, net $ 92 $ 100 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation and Related Tax Benefits | Stock-based compensation expense and related tax benefits recognized under the Plans were: Year Ended February 3, January 28, January 29, (in millions) Stock-based compensation expense: Stock options $ — $ 1 $ 3 Vesting stock awards 38 36 32 Performance share awards 10 9 7 Total stock-based compensation expense $ 48 $ 46 $ 42 Tax benefits recognized from stock-based compensation $ 16 $ 15 $ 14 |
Stock Option Activity | Stock option activity for the year ended February 3, 2023 was: Shares of stock under stock options Weighted-average exercise price Weighted-average remaining contractual term Aggregate intrinsic value (in millions) (in years) (in millions) Outstanding at January 28, 2022 0.6 $ 72.34 3.3 $ 6 Options granted — — Options forfeited or expired — — Options exercised (0.2) 68.89 Outstanding at February 3, 2023 0.4 $ 74.57 2.9 $ 11 Exercisable at February 3, 2023 0.3 $ 74.67 2.8 $ 10 Vested and expected to vest at February 3, 2023 0.4 $ 74.57 2.9 $ 11 |
Schedule of Share-Based Compensation Activity Related to Exercise of Stock Options | The following table summarizes activity related to exercises of stock options: Year Ended February 3, January 28, January 29, (in millions) Cash received from exercises of stock options $ — $ 1 $ — Stock exchanged at fair value upon exercises of stock options $ 1 $ 1 $ 1 Tax benefits from exercises of stock options $ 1 $ 1 $ 2 Total intrinsic value of options exercised $ 8 $ 4 $ 8 |
Weighted Average Grant Date Fair Value and Assumptions Used to Determine Fair Value of Stock Options Granted | The weighted-average grant date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were: Year Ended January 29, Weighted-average grant-date fair value $ 17.54 Expected term (in years) 3.8 Expected volatility 35.5 % Risk-free interest rate 0.3 % Dividend yield 1.8 % |
Vesting Stock Award Activity | Vesting stock award activity for the year ended February 3, 2023 was: Shares of stock under vesting stock awards Weighted-average grant date fair value (in millions) Unvested at January 28, 2022 1.0 $ 80.78 Awards granted 0.6 95.43 Awards forfeited (0.1) 85.94 Awards vested (0.5) 79.87 Unvested at February 3, 2023 1.0 $ 89.60 |
Performance Share Award Activity | Performance share award activity for the year ended February 3, 2023 was: Shares of stock under performance shares Weighted-average grant date fair value (in millions) Unvested at January 28, 2022 0.2 $ 78.13 Awards granted 0.2 100.94 Awards forfeited — — Awards vested (0.1) 74.46 Performance adjustments — — Unvested at February 3, 2023 0.3 $ 91.63 |
Retirement Plans (Tables)
Retirement Plans (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The net periodic benefit (income) cost was as follows: Pension Plan RHRA Benefit Plan Year Ended February 3, 2023 January 28, 2022 January 29, 2021 February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Interest cost on projected benefit obligation $ 2 $ 1 $ 2 $ — $ 1 $ — Expected return on plan assets (3) (3) (3) — — — Settlement cost — — 1 — — — Net periodic benefit (income) cost $ (1) $ (2) $ — $ — $ 1 $ — |
Schedule of Benefit Obligations in Excess of Fair Value of Plan Assets | The projected benefit obligation, fair value of plan assets and funded status for each plan are as follows: Pension Plan RHRA Benefit Plan February 3, 2023 January 28, 2022 February 3, 2023 January 28, 2022 (in millions) Change in benefit obligation: Benefit obligation at beginning of year $ 63 $ 70 $ 13 $ 14 Interest cost 2 1 — 1 Benefits paid (5) (5) (1) (1) Actuarial gain (8) (3) (2) (1) Benefit obligation at end of year $ 52 $ 63 $ 10 $ 13 Change in plan assets: Fair value of plan assets at beginning of year 54 55 — — Actual return on plan assets (3) 4 — — Employer contributions — — 1 1 Benefits paid (5) (5) (1) (1) Fair value of plan assets at end of year $ 46 $ 54 $ — $ — Unfunded status $ 6 $ 9 $ 10 $ 13 |
Schedule of Amounts Recognized in Balance Sheet | Amounts recognized in the consolidated balance sheets consist of: Pension Plan RHRA Benefit Plan February 3, 2023 January 28, 2022 February 3, 2023 January 28, 2022 (in millions) Other accrued liabilities $ — $ — $ 1 $ 1 Other long-term liabilities 6 9 9 12 Net amount recognized $ 6 $ 9 $ 10 $ 13 |
Schedule of Assumptions Used | The following assumptions were used to determine the benefit obligations and net periodic benefit costs: Pension Plan RHRA Benefit Plan February 3, 2023 January 28, 2022 January 29, 2021 February 3, 2023 January 28, 2022 January 29, 2021 Discount rate 4.94 % 3.13 % 2.47 % 4.85 % 2.78 % 1.86 % Interest cost effective rate 2.61 % 1.72 % 2.47 % 2.33 % 1.35 % 2.27 % Expected rate of return on assets 5.25 % 5.50 % 5.50 % N/A N/A N/A |
Schedule of Allocation of Plan Assets | The fair value measurement of plan assets by category is as follows: Asset Category Fair Value Hierarchy February 3, 2023 January 28, 2022 (in millions) Mutual funds Equity Level 1 $ 30 $ 34 Fixed income Level 1 8 9 Guaranteed deposit account Level 3 1 3 Subtotal 39 46 Collective trust - fixed income (1) Measured at NAV 7 8 Total $ 46 $ 54 (1) Collective trusts are measured at fair value using net asset value (NAV) as a practical expedient and have not been categorized in the fair value hierarchy. Fair Value Measurement Using Significant Unobservable Inputs (Level 3) A reconciliation of the beginning and ending balances of the Guaranteed Deposit Account (GDA) is as follows: Guaranteed Deposit Account (in millions) Balance at January 29, 2021 $ 3 Purchases 5 Sales (5) Balance at January 28, 2022 3 Purchases 3 Sales (5) Balance at February 3, 2023 $ 1 |
Schedule of Expected Benefit Payments | The following table sets forth the expected timing of benefit payments by fiscal year: Fiscal Year Pension Plan RHRA Benefit Plan Total (in millions) 2024 $ 5 $ 1 $ 6 2025 5 1 6 2026 5 1 6 2027 5 1 6 2028 4 1 5 Five subsequent fiscal years $ 21 $ 5 $ 26 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Income Tax Disclosure [Abstract] | |
Provision for Income Taxes | The provision for income taxes for each of the periods presented include the following: Year Ended February 3, January 28, January 29, (in millions) Current: Federal $ 69 $ 13 $ 34 State 20 7 14 Deferred: Federal (15) 48 10 State (2) 11 2 Total $ 72 $ 79 $ 60 |
Reconciliation of Provision for Income Taxes Computed by Statutory Federal Income Tax Rate | A reconciliation of the provision for income taxes to the amount computed by applying the statutory federal income tax rate to income before income taxes for each of the periods presented was as follows: Year Ended February 3, January 28, January 29, (in millions) Amount computed at the statutory federal income tax rate $ 79 $ 75 $ 57 State income taxes, net of federal tax benefit 13 16 13 Research and development and other federal credits (8) (9) (8) Non-deductible compensation 3 3 3 Excess tax benefits for stock-based compensation (3) (3) (3) Foreign-derived intangible income (12) (6) (1) Other — 3 (1) Total $ 72 $ 79 $ 60 Effective income tax rate 19.3 % 22.1 % 22.1 % |
Deferred Tax Assets and Liabilities | Deferred tax assets (liabilities) were comprised of: February 3, January 28, (in millions) Accrued vacation and bonuses $ 28 $ 30 Accrued liabilities 17 12 Deferred compensation 17 18 Stock awards 9 10 Net operating loss and other carryforwards 80 94 Fixed asset basis difference 2 — Deferred revenue — 17 Lease liability 50 63 Research and development expenditures 152 — Accumulated other comprehensive loss — 13 Valuation allowance (8) (7) Total deferred tax assets 347 250 Deferred revenue (21) — Payroll tax deferral (2) (2) Fixed asset basis difference — (3) Purchased intangible assets (264) (235) Right of use assets (40) (53) Accumulated other comprehensive income (6) — Total deferred tax liabilities (333) (293) Net deferred tax assets (liabilities) $ 14 $ (43) |
Changes in Unrecognized Tax Benefits | The changes in the unrecognized tax benefits, excluding accrued interest and penalties, were: Year Ended February 3, January 28, January 29, (in millions) Unrecognized tax benefits at beginning of the year $ 78 $ 66 $ 51 Additions for tax positions related to prior years 5 2 8 Additions for tax positions related to the current year 75 10 9 Reductions for prior year tax positions related to statute expiration — — (2) Unrecognized tax benefits at end of the year $ 158 $ 78 $ 66 Unrecognized tax benefits that, if recognized, would affect the effective income tax rate $ 90 $ 70 $ 66 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Debt Disclosure [Abstract] | |
Long Term Debt | The Company’s long-term debt as of the periods presented was as follows: February 3, 2023 January 28, 2022 Stated interest rate Effective interest rate Principal Unamortized debt issuance costs Net Principal Unamortized debt issuance costs Net (in millions) Term Loan A Facility due June 2027 5.91 % 6.03 % $ 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 6.54 % 6.75 % 488 (3) 485 983 (7) 976 Term Loan B2 Facility due March 2027 6.54 % 6.99 % 272 (4) 268 272 (5) 267 Senior Notes due April 2028 4.88 % 5.11 % 400 (4) 396 400 (5) 395 Total long-term debt $ 2,390 $ (16) $ 2,374 $ 2,540 $ (22) $ 2,518 Less current portion 31 — 31 148 — 148 Total long-term debt, net of current portion $ 2,359 $ (16) $ 2,343 $ 2,392 $ (22) $ 2,370 |
Maturities of Long-term Debt | Maturities of long-term debt as of February 3, 2023 are: Fiscal Year Total (in millions) 2024 $ 31 2025 77 2026 596 2027 123 2028 1,163 Thereafter 400 Total principal payments $ 2,390 |
Derivative Instruments Design_2
Derivative Instruments Designated as Cash Flow Hedges (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments Designated as Cash Flow Hedges | The Company’s derivative instruments designated as cash flow hedges consist of: Fair Value of Asset (Liability) (1) at Notional Amount at February 3, 2023 Pay Fixed Rate Receive Variable Rate Settlement and Termination February 3, January 28, (in millions) (in millions) Interest rate swaps #1 685 2.96 % Term SOFR Monthly through October 31, 2025 16 (39) Interest rate swaps #2 475 2.36 % Term SOFR Monthly through October 31, 2023 9 (12) Total $ 1,160 $ 25 $ (51) (1) The fair value of the fixed interest rate swap asset is included in other assets on the consolidated balance sheets. The fair value of the fixed interest rate swaps liability is included in other accrued liabilities on the consolidated balance sheets. |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Loss by Component (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income Attributable to the Company's Fixed Interest Rate Swap Cash Flow Hedges | The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s defined benefit plans and fixed interest rate swap cash flow hedges that are discussed in Note 9 and Note 12, respectively. Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges (1) Defined Benefit Obligation Adjustment (2) Total (in millions) Balance at January 31, 2020 $ (67) $ (5) $ (72) Other comprehensive (loss) income before reclassifications (55) 1 (54) Amounts reclassified from accumulated other comprehensive loss 29 1 30 Income tax impact 7 — 7 Net other comprehensive (loss) income (19) 2 (17) Balance at January 29, 2021 $ (86) $ (3) $ (89) Other comprehensive income before reclassifications 31 5 36 Amounts reclassified from accumulated other comprehensive loss 34 — 34 Income tax impact (17) (1) (18) Net other comprehensive income 48 4 52 Balance at January 28, 2022 $ (38) $ 1 $ (37) Other comprehensive income before reclassifications 67 4 71 Amounts reclassified from accumulated other comprehensive income (loss) 9 — 9 Income tax impact (20) (1) (21) Net other comprehensive income 56 3 59 Balance at February 3, 2023 $ 18 $ 4 $ 22 (1) The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense. (2) The amount reclassified from accumulated other comprehensive income (loss) is included in other (income) expense, net. |
Sale of Receivables (Tables)
Sale of Receivables (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Receivables [Abstract] | |
Transfers Of Financial Assets Accounted For As Sales, Marpa [Table Text Block] | MARPA Facility activity consisted of the following: Year Ended February 3, 2023 January 28, 2022 (in millions) Beginning balance $ 200 $ 185 Sale of receivables 3,729 3,224 Cash collections (3,679) (3,209) Outstanding balance sold to Purchaser (1) 250 200 Cash collected, not remitted to Purchaser (2) (30) (23) Remaining sold receivables $ 220 $ 177 (1) For fiscal 2023 and 2022, the Company recorded a net increase to cash flows from operating activities of $50 million and $15 million, respectively, from sold receivables. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Feb. 03, 2023 | |
Leases [Abstract] | |
Lease, Cost [Table Text Block] | Total operating lease cost is comprised of the following: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Operating lease cost $ 67 $ 92 $ 74 Variable lease cost 11 17 21 Short-term lease cost 2 9 35 Sublease income — (1) (2) Total lease cost $ 80 $ 117 $ 128 The Company's ROU assets and lease liabilities consisted of the following: Balance Sheet line item February 3, 2023 January 28, 2022 (in millions) Operating lease ROU asset Operating lease right of use assets $ 158 $ 209 Operating lease current liability Other accrued liabilities 42 52 Operating lease non-current liability Operating lease liabilities 152 192 Total operating lease liabilities $ 194 $ 244 |
OtherSupplementalLeaseInformation [Table Text Block] | Other supplemental operating lease information consists of the following: Year Ended February 3, 2023 January 28, 2022 January 29, 2021 (in millions) Cash paid for amounts included in the measurement of operating lease liabilities $ 62 $ 74 $ 77 ROU assets obtained in exchange for new operating lease obligations $ 15 $ 54 $ 110 |
Lessee, Operating Lease, Liability, Maturity [Table Text Block] | Maturities of operating lease liabilities as of February 3, 2023 were as follows: Fiscal Year Total (in millions) 2024 $ 48 2025 49 2026 41 2027 35 2028 19 Thereafter 19 Total minimum lease payments 211 Less: imputed interest (17) Present value of operating lease liabilities $ 194 |
Business Overview and Summary_4
Business Overview and Summary of Significant Accounting Policies - Narrative (Details) | 12 Months Ended | ||
Feb. 03, 2023 USD ($) segment | Jan. 28, 2022 USD ($) | Jan. 29, 2021 USD ($) | |
Significant Accounting Policies [Line Items] | |||
Number of operating segments | segment | 2 | ||
Number of reportable segments | segment | 1 | ||
Outstanding payments | $ 49,000,000 | $ 54,000,000 | |
Unbilled receivables, maximum expected period for billing and collection | 1 year | ||
Amount of progress payments received are offset against unbilled receivables | $ 42,000,000 | 76,000,000 | |
Impairment of goodwill and intangible assets | 0 | 0 | |
Marketable Securities, Noncurrent | 28,000,000 | 28,000,000 | |
Internal research and development costs included in selling, general and administrative expenses | $ 1,000,000 | $ 4,000,000 | $ 6,000,000 |
Forfeiture Support Associates J.V. | |||
Significant Accounting Policies [Line Items] | |||
Ownership percentage | 50.10% |
Business Overview and Summary_5
Business Overview and Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Jan. 31, 2020 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 109 | $ 106 | ||
Restricted cash included in other current assets | 5 | 5 | ||
Restricted cash included in other assets | 4 | 4 | ||
Cash, cash equivalents and restricted cash | $ 118 | $ 115 | $ 190 | $ 202 |
Business Overview and Summary_6
Business Overview and Summary of Significant Accounting Policies - Schedule of Acquisition and Integration Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jul. 03, 2020 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Business Acquisition [Line Items] | ||||
Acquisition related costs | $ (2) | $ 3 | $ 20 | |
Integration related costs | 15 | 53 | 34 | |
Acquisition and integration costs | 13 | 56 | 54 | |
(Gain) loss on divestitures | 0 | (2) | 10 | |
Restructuring Costs | $ 20 | 1 | 10 | |
Restructuring Charges | ||||
Business Acquisition [Line Items] | ||||
Integration related costs | 6 | |||
Operating Lease, Right-of-Use Asset, Impairment | ||||
Business Acquisition [Line Items] | ||||
Integration related costs | $ 17 | $ 1 | ||
Non-Strategic International Operations | ||||
Business Acquisition [Line Items] | ||||
(Gain) loss on divestitures | $ 11 |
Earnings Per Share, Share Rep_3
Earnings Per Share, Share Repurchases and Dividends - Schedule of Weighted Average Shares Outstanding (Details) - shares shares in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Computation Of Earnings Per Share [Line Items] | |||
Basic weighted-average number of shares outstanding (in shares) | 55.3 | 57.6 | 58.1 |
Dilutive common share equivalents - stock options and other stock-based awards (in shares) | 0.5 | 0.5 | 0.6 |
Diluted weighted-average number of shares outstanding (in shares) | 55.8 | 58.1 | 58.7 |
Earnings Per Share, Share Rep_4
Earnings Per Share, Share Repurchases and Dividends - Narrative (Details) - $ / shares shares in Millions | 12 Months Ended | |||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Jun. 30, 2022 | |
Computation Of Earnings Per Share [Line Items] | ||||
Cash dividends declared per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 0.37 | |
Cash dividends paid per share (in dollars per share) | $ 1.48 | $ 1.48 | $ 1.48 | |
Employee Stock Option | ||||
Computation Of Earnings Per Share [Line Items] | ||||
Antidilutive stock options excluded (in shares) | 0 | 0 | 0 | |
Share Repurchase Plan | ||||
Computation Of Earnings Per Share [Line Items] | ||||
Increase in number of shares authorized to be repurchased under the repurchase plan (in shares) | 8 | |||
Shares repurchased under the repurchase plan (in shares) | 17 | |||
Share Repurchase Plan | Maximum | ||||
Computation Of Earnings Per Share [Line Items] | ||||
Shares authorized to be repurchased under the repurchase plan (in shares) | 24.4 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Contract with customer, performance obligation satisfied in previous period | $ 7 | $ 21 | $ 21 |
Contract with customer, liability, revenue recognized | 46 | 75 | |
Revenue, remaining performance obligation, amount | 5,000 | ||
Pre-contract costs | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost, amortization | 6 | 4 | |
Fulfillment costs - current | |||
Disaggregation of Revenue [Line Items] | |||
Capitalized contract cost, amortization | $ 5 | $ 6 |
Revenues - Change in Estimates
Revenues - Change in Estimates on Contracts (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Revenue from Contract with Customer [Abstract] | |||
Favorable adjustments | $ 40 | $ 40 | $ 41 |
Unfavorable adjustments | (36) | (27) | (32) |
Net favorable adjustments | 4 | 13 | 9 |
Income tax effect | (1) | (3) | (2) |
Net favorable adjustments, after tax | $ 3 | $ 10 | $ 7 |
Basic EPS impact (in dollars per share) | $ 0.05 | $ 0.17 | $ 0.12 |
Diluted EPS impact (in dollars per share) | $ 0.05 | $ 0.17 | $ 0.12 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 7,704 | $ 7,394 | $ 7,056 |
Prime contractor to federal government | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 6,996 | 6,683 | 6,337 |
Subcontractor to federal government | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 560 | 566 | 566 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 148 | 145 | 153 |
Cost reimbursement | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 4,282 | 4,020 | 3,773 |
Time and materials (T&M) | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,464 | 1,473 | 1,557 |
Firm-fixed price (FFP) | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 1,958 | 1,901 | 1,726 |
Department of Defense | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 3,806 | 3,578 | 3,292 |
Other federal government agencies | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | 3,750 | 3,671 | 3,611 |
Commercial, state and local | |||
Disaggregation of Revenue [Line Items] | |||
Revenues | $ 148 | $ 145 | $ 153 |
Revenues - Contract Balances (D
Revenues - Contract Balances (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Disaggregation of Revenue [Line Items] | ||
Allowance for doubtful accounts receivable | $ 4 | $ 4 |
Receivables, net | ||
Disaggregation of Revenue [Line Items] | ||
Billed and billable receivables, net | 572 | 615 |
Contract assets | 364 | 400 |
Other assets | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | 15 | 17 |
Other accrued liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | 48 | 55 |
Other long-term liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities | $ 4 | $ 9 |
Revenues - Deferred Costs (Deta
Revenues - Deferred Costs (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Costs To Obtain | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, net | $ 1 | $ 1 |
Other current assets | Pre-contract costs | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, net | 7 | 4 |
Other assets | Fulfillment costs - non-current | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, net | 11 | 16 |
Other assets | Costs To Obtain | ||
Capitalized Contract Cost [Line Items] | ||
Capitalized contract cost, net | $ 5 | $ 3 |
Revenues - Performance Obligati
Revenues - Performance Obligation (Details) | Feb. 03, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-02-04 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 80% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, percentage | 95% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 2 years |
Acquisitions (Details)
Acquisitions (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||||
Jul. 02, 2021 | May 03, 2021 | Mar. 13, 2020 | Apr. 29, 2022 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Business Acquisition [Line Items] | |||||||
Deferred financing fees | $ 6 | $ 0 | $ 27 | ||||
Amortization expense related to intangible assets | 125 | 128 | 147 | ||||
2025 | 115 | ||||||
Acquisition related costs | (2) | 3 | 20 | ||||
Payments to acquire businesses, net of cash acquired | 0 | 255 | 1,202 | ||||
Halfaker and Associates, LLC | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, Purchase Accounting Adjustments | $ 2 | ||||||
Payments to acquire businesses, net of cash acquired | $ 228 | ||||||
Cash Acquired in Excess of Payments to Acquire Business | 3 | ||||||
Goodwill, Acquired During Period | 104 | ||||||
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Finite-Lived Intangibles | 114 | ||||||
Business Combination, Additional Cash Payments | 21 | ||||||
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 | ||||||
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 | ||||||
Koverse | |||||||
Business Acquisition [Line Items] | |||||||
Business Combination, Provision For Off-Market Customer Contracts | $ 67 | ||||||
Payments to acquire businesses, net of cash acquired | 30 | ||||||
Cash Acquired in Excess of Payments to Acquire Business | 2 | ||||||
Goodwill, Acquired During Period | 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 | 12 | |||||
Unisys Federal | |||||||
Business Acquisition [Line Items] | |||||||
Payments to Acquire Businesses, Gross | $ 1,200 | ||||||
Revenues | 669 | ||||||
Business Combination, Pro Forma Information, Earnings or Loss of Acquiree since Acquisition Date, Actual | $ 62 | ||||||
Deferred financing fees | 27 | ||||||
Amortization expense related to intangible assets | 6 | $ 15 | |||||
2025 | $ 5 | ||||||
Acquisition related costs | $ 49 |
Acquisitions Pro Forma Earnings
Acquisitions Pro Forma Earnings (Details) - Unisys Federal $ in Millions | 12 Months Ended |
Jan. 29, 2021 USD ($) | |
Business Acquisition [Line Items] | |
Business Acquisition, Pro Forma Revenue | $ 7,146 |
Business Acquisition, Pro Forma Net Income (Loss) | $ 258 |
Restructuring and Impairment -
Restructuring and Impairment - Schedule of Restructuring Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring Costs | $ 20 | $ 1 | $ 10 |
Total impairment of assets | 4 | 18 | 2 |
Total restructuring costs and impairment | 24 | 19 | 12 |
Selling, General and Administrative Expenses | |||
Restructuring Cost and Reserve [Line Items] | |||
Total impairment of assets | 4 | 1 | 1 |
Selling, General and Administrative Expenses | Restructuring Plan 2023 | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 6 | 0 | 0 |
Other Restructuring Costs | 14 | 0 | 0 |
Selling, General and Administrative Expenses | Restructuring Plan 2022 | |||
Restructuring Cost and Reserve [Line Items] | |||
Other Restructuring Costs | 0 | 1 | 0 |
Selling, General and Administrative Expenses | Restructuring Plan 2021 | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 0 | 0 | 4 |
Acquisition and Integration Costs | |||
Restructuring Cost and Reserve [Line Items] | |||
Total impairment of assets | 0 | 17 | 1 |
Acquisition and Integration Costs | Restructuring Plan 2020 | |||
Restructuring Cost and Reserve [Line Items] | |||
Severance Costs | 0 | 0 | 2 |
Other Restructuring Costs | $ 0 | $ 0 | $ 4 |
Restructuring and Impairment _2
Restructuring and Impairment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Jan. 31, 2020 | |
Restructuring Cost and Reserve [Line Items] | ||||
Total impairment of assets | $ 4 | $ 18 | $ 2 | |
Cash Paid For Consulting Costs | $ 5 | |||
Restructuring Incurred Cost Statement Of Income Or Comprehensive Income Extensible Enumeration Not Disclosed Flag | true | |||
Integration of Engility | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Incurred Cost | 51 | |||
Severance Costs | 40 | |||
Other Restructuring Costs | 11 | |||
Restructuring Plan 2023 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Remaining | $ 2 | |||
Restructuring Plan 2021 | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Restructuring and Related Cost, Expected Cost Remaining | 4 | |||
Optimization and Consolidated Of Facilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Payments for Restructuring | 1 | |||
Employee Severance | Integration of Engility | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Payments for Restructuring | 3 | $ 12 | ||
Other Restructuring | Integration of Engility | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Payments for Restructuring | 4 | $ 7 | ||
Exited Facilities | ||||
Restructuring Cost and Reserve [Line Items] | ||||
Total impairment of assets | $ 4 | $ 18 | $ 2 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Finite-Lived Intangible Assets [Line Items] | |||
Goodwill | $ 2,911,000,000 | $ 2,913,000,000 | |
Impairment of goodwill | 0 | 0 | |
Amortization expense related to intangible assets | 125,000,000 | 128,000,000 | $ 147,000,000 |
Impairment of Intangible Assets, Finite-lived | 0 | 0 | |
Finite Lived Intangible Assets, Gross Carrying Value, Fully Amortized | 19,000,000 | ||
Unisys Federal | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization expense related to intangible assets | $ 6,000,000 | $ 15,000,000 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 1,478 | $ 1,495 |
Accumulated amortization | (469) | (363) |
Net carrying value | 1,009 | 1,132 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 1,467 | 1,467 |
Accumulated amortization | (466) | (351) |
Net carrying value | 1,001 | 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 Names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 1 | 1 |
Accumulated amortization | (1) | 0 |
Net carrying value | $ 0 | $ 1 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Estimated Annual Amortization Expense (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2024 | $ 115 | |
2025 | 115 | |
2026 | 115 | |
2027 | 115 | |
2028 | 98 | |
Thereafter | 451 | |
Net carrying value | $ 1,009 | $ 1,132 |
Property, Plant, and Equipmen_2
Property, Plant, and Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 03, 2023 | Jan. 28, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | $ 286 | $ 282 |
Accumulated depreciation and amortization | (194) | (182) |
Property, plant, and equipment, net | $ 92 | 100 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line | |
Estimated useful lives (in years) | 10 years | |
Property, plant, and equipment | $ 109 | 94 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line | |
Estimated useful lives (in years) | 40 years | |
Property, plant, and equipment | $ 7 | 7 |
Construction in process | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 11 | 16 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | $ 1 | 1 |
Computer equipment | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line ordeclining balance | |
Property, plant, and equipment | $ 92 | 97 |
Computer equipment | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 3 years | |
Computer equipment | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 10 years | |
Capitalized software and software licenses | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line ordeclining balance | |
Property, plant, and equipment | $ 47 | 47 |
Capitalized software and software licenses | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 3 years | |
Capitalized software and software licenses | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 10 years | |
Office furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation or amortization method | Straight-line ordeclining balance | |
Property, plant, and equipment | $ 19 | $ 20 |
Office furniture and fixtures | Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 3 years | |
Office furniture and fixtures | Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Estimated useful lives (in years) | 10 years |
Property, Plant, and Equipmen_3
Property, Plant, and Equipment - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expense | $ 32 | $ 37 | $ 32 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Feb. 03, 2023 USD ($) compensationPlan $ / shares shares | Jan. 28, 2022 USD ($) $ / shares | Jan. 29, 2021 USD ($) $ / shares | Jun. 30, 2014 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of stock based compensation plans | compensationPlan | 4 | |||
Document Period End Date | Feb. 03, 2023 | |||
Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost, net of estimated forfeitures | $ 0 | |||
Expected volatility | 35.50% | |||
Risk-free interest rate | 0.30% | |||
Performance share awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of target shares | 200% | |||
Unrecognized compensation cost, net of estimated forfeitures | $ 11 | |||
Expected weighted-average period of recognition, years | 1 year 9 months 18 days | |||
Awards granted (in dollars per share) | $ / shares | $ 100.94 | $ 80.57 | $ 74.40 | |
Fair value of vesting awards that vested | $ 10 | |||
Below threshold level of performance (in shares) | shares | 0 | |||
Percentage of awards presented for target number of shares | 100% | |||
Expected volatility | 38.02% | 39.73% | ||
Risk-free interest rate | 2.44% | 0.32% | ||
Share awards granted upon future achievement (in shares) | shares | 300,000 | |||
Vesting stock awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost, net of estimated forfeitures | $ 46 | |||
Expected weighted-average period of recognition, years | 1 year 9 months 18 days | |||
Awards granted (in dollars per share) | $ / shares | $ 95.43 | $ 83.65 | $ 76.41 | |
Fair value of vesting awards that vested | $ 44 | $ 39 | $ 32 | |
2013 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized under plan (in shares) | shares | 8,500,000 | |||
2013 Equity Incentive Plan | Employee Stock Option Granted Thereafter | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of stock awards vest or exercisable after one year | 33% | |||
Percentage of stock awards vest or exercisable after two years | 33% | |||
Percentage of stock awards vest or exercisable after three years | 33% | |||
2013 Equity Incentive Plan | Vesting Stock Awards Granted Thereafter | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of stock awards vest or exercisable after one year | 25% | |||
Percentage of stock awards vest or exercisable after two years | 25% | |||
Percentage of stock awards vest or exercisable after three years | 25% | |||
Percentage of stock awards vest or exercisable after four years | 25% | |||
2013 Equity Incentive Plan | Employee Stock Option | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual term | 7 years | |||
2013 Equity Incentive Plan | Employee Stock Option | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Contractual term | 10 years | |||
2013 Equity Incentive Plan | Directors | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Vesting period | 1 year | |||
Employee Stock Purchase Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Shares authorized under plan (in shares) | shares | 3,400,000 | |||
Percentage of market price for employee purchase program for stock purchases during non-compensatory period | 5% | |||
Employee Stock Purchase Plan | Maximum | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of market price for employee purchase program for stock purchases during non-compensatory period | 15% | |||
Vesting after one year | 2013 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33% | |||
Vesting after two years | 2013 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33% | |||
Vesting after three years | 2013 Equity Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage | 33% |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense and Related Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Document Period End Date | Feb. 03, 2023 | ||
Total stock-based compensation expense | $ 48 | $ 46 | $ 42 |
Tax benefits recognized from stock-based compensation | 16 | 15 | 14 |
Stock options | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 0 | 1 | 3 |
Vesting stock awards | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | 38 | 36 | 32 |
Performance share awards | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Total stock-based compensation expense | $ 10 | $ 9 | $ 7 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Stock Option Activity (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 12 Months Ended | |
Feb. 03, 2023 | Jan. 28, 2022 | |
Shares of stock under stock options | ||
Outstanding, beginning balance (in shares) | 0.6 | |
Options granted (in shares) | 0 | |
Options forfeited or expired (in shares) | 0 | |
Options exercised (in shares) | (0.2) | |
Outstanding, ending balance (in shares) | 0.4 | 0.6 |
Options exercisable, ending balance (in shares) | 0.3 | |
Options vested and expected to vest, ending balance (in shares) | 0.4 | |
Weighted-average exercise price | ||
Outstanding beginning balance (in dollars per share) | $ 72.34 | |
Options granted (in dollars per share) | 0 | |
Options forfeited or expired (in dollars per share) | 0 | |
Options exercised (in dollars per share) | 68.89 | |
Outstanding ending balance (in dollars per share) | 74.57 | $ 72.34 |
Options exercisable (in dollars per share) | 74.67 | |
Vested and expected to vest in the future (in dollars per share) | $ 74.57 | |
Weighted-average remaining contractual term | ||
Outstanding | 2 years 10 months 24 days | 3 years 3 months 18 days |
Options exercisable | 2 years 9 months 18 days | |
Vested and expected to vest | 2 years 10 months 24 days | |
Aggregate intrinsic value | ||
Options outstanding | $ 11 | $ 6 |
Options exercisable | 10 | |
Vested and expected to vest | $ 11 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Shared-Based Compensation Cost Related to Stock Options (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Cash received from exercises of stock options | $ 0 | $ 1 | $ 0 |
Stock exchanged at fair value upon exercises of stock options | 1 | 1 | 1 |
Tax benefits from exercises of stock options | 1 | 1 | 2 |
Total intrinsic value of options exercised | $ 8 | $ 4 | $ 8 |
Stock-Based Compensation - Fair
Stock-Based Compensation - Fair Value and Valuation Assumptions of Stock Options (Details) - Employee Stock Option | 12 Months Ended |
Jan. 29, 2021 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Weighted-average grant-date fair value | $ 17.54 |
Expected term (in years) | 3 years 9 months 18 days |
Expected volatility | 35.50% |
Risk-free interest rate | 0.30% |
Dividend yield | 1.80% |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of Vesting Stock Award Activity (Details) - Vesting stock awards - $ / shares shares in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Shares of stock under vesting stock awards | |||
Unvested awards, beginning balance (in shares) | 1 | ||
Awards granted (in shares) | 0.6 | ||
Awards forfeited (in shares) | (0.1) | ||
Awards vested (in shares) | (0.5) | ||
Unvested awards, ending balance (in shares) | 1 | 1 | |
Weighted-average grant date fair value | |||
Unvested awards beginning balance (in dollars per share) | $ 80.78 | ||
Awards granted (in dollars per share) | 95.43 | $ 83.65 | $ 76.41 |
Awards forfeited (in dollars per share) | 85.94 | ||
Awards vested (in dollars per share) | 79.87 | ||
Unvested awards ending balance (in dollars per share) | $ 89.60 | $ 80.78 |
Stock-Based Compensation - Sc_5
Stock-Based Compensation - Schedule of Performance Share Award Activity (Details) - $ / shares shares in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Weighted-average grant date fair value | |||
Document Period End Date | Feb. 03, 2023 | ||
Performance share awards | |||
Shares of stock under performance shares | |||
Unvested awards, beginning balance (in shares) | 0.2 | ||
Performance shares granted (in shares) | 0.2 | ||
Performance shares forfeited (in shares) | 0 | ||
Performance shares vested (in shares) | (0.1) | ||
Performance shares adjustment (in shares) | 0 | ||
Unvested awards, ending balance (in shares) | 0.3 | 0.2 | |
Weighted-average grant date fair value | |||
Unvested awards beginning balance (in dollars per share) | $ 78.13 | ||
Performance shares granted (in dollars per share) | 100.94 | $ 80.57 | $ 74.40 |
Performance shares forfeited (in dollars per share) | 0 | ||
Performance shares vested (in dollars per share) | 74.46 | ||
Performance shares adjustment (in dollars per share) | 0 | ||
Unvested awards ending balance (in dollars per share) | $ 91.63 | $ 78.13 |
Retirement Plans - Narrative (D
Retirement Plans - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Company contributions to defined contribution plans expense | $ 80 | $ 79 | $ 73 |
Plan assets, amount | 46 | 54 | |
Net losses from change in net benefit obligation | 4 | 5 | 2 |
Increase in projected benefit obligation from decrease in discount rate | 10 | 4 | 4 |
Defined Benefit Plan, Benefit Obligation, Increase (Decrease) For Difference Between Investment Return Over Expected Return | (6) | ||
Actual investment return in excess of expected return | 1 | 2 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | 1 | ||
Defined Benefit Plan, Plan Assets, Increase (Decrease) for Assets Transferred to (from) Plan | 6 | ||
Defined Benefit Plan, Benefit Obligation, Period Increase (Decrease) | 3 | ||
Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan liability | 6 | 9 | |
Benefit obligation | 52 | 63 | 70 |
Plan assets, amount | $ 46 | 54 | 55 |
Long-term rate of return | 5.25% | ||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | $ 0 | 0 | (1) |
Retiree Health Reimbursement Account Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Expected contribution amount | 1 | ||
Defined benefit plan liability | 10 | 13 | |
Benefit obligation | 10 | 13 | 14 |
Plan assets, amount | 0 | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | $ 0 | $ 0 | $ 0 |
Defined Benefit Plan, Equity Securities, US | Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation, percentage | 44% | ||
Defined Benefit Plan, Equity Securities, Non-US | Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation, percentage | 20% | ||
Fixed Income Securities | Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation, percentage | 31% | ||
Defined Benefit Plan, Cash and Cash Equivalents | Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Target allocation, percentage | 5% |
Retirement Plans - Net Periodic
Retirement Plans - Net Periodic Benefit Income (Expense) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | $ (1) | ||
Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | $ 2 | $ 1 | 2 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | (3) | (3) | (3) |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | 0 | 0 | 1 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | (1) | (2) | 0 |
Retiree Health Reimbursement Account Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Interest cost | 0 | 1 | 0 |
Defined Benefit Plan, Expected Return (Loss) on Plan Assets | 0 | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit), Gain (Loss) Due to Settlement | 0 | 0 | 0 |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) | $ 0 | $ 1 | $ 0 |
Retirement Plans - Obligations
Retirement Plans - Obligations and Funded Status (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | $ 54 | ||
Fair value of plan assets at end of year | 46 | $ 54 | |
Pension Plan [Member] | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 63 | 70 | |
Interest cost | 2 | 1 | $ 2 |
Benefits paid | (5) | (5) | |
Actuarial gain | (8) | (3) | |
Benefit obligation at end of year | 52 | 63 | 70 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 54 | 55 | |
Actual return on plan assets | (3) | 4 | |
Employer contributions | 0 | 0 | |
Benefits paid | (5) | (5) | |
Fair value of plan assets at end of year | 46 | 54 | 55 |
Unfunded status | 6 | 9 | |
Retiree Health Reimbursement Account Plan [Member] | |||
Change in benefit obligation: | |||
Benefit obligation at beginning of year | 13 | 14 | |
Interest cost | 0 | 1 | 0 |
Benefits paid | (1) | (1) | |
Actuarial gain | (2) | (1) | |
Benefit obligation at end of year | 10 | 13 | 14 |
Change in plan assets: | |||
Fair value of plan assets at beginning of year | 0 | 0 | |
Actual return on plan assets | 0 | 0 | |
Employer contributions | 1 | 1 | |
Benefits paid | (1) | (1) | |
Fair value of plan assets at end of year | 0 | 0 | $ 0 |
Unfunded status | $ 10 | $ 13 |
Retirement Plans - Amounts Reco
Retirement Plans - Amounts Recognized In The Balance Sheet (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Pension Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other accrued liabilities | $ 0 | $ 0 |
Other long-term liabilities | 6 | 9 |
Net amount recognized | 6 | 9 |
Retiree Health Reimbursement Account Plan [Member] | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Other accrued liabilities | 1 | 1 |
Other long-term liabilities | 9 | 12 |
Net amount recognized | $ 10 | $ 13 |
Retirement Plans - Assumptions
Retirement Plans - Assumptions Used (Details) | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Pension Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit obligation, discount rate | 4.94% | 3.13% | 2.47% |
Interest cost effective rate | 2.61% | 1.72% | 2.47% |
Expected rate of return on assets | 5.25% | 5.50% | 5.50% |
Retiree Health Reimbursement Account Plan [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Benefit obligation, discount rate | 4.85% | 2.78% | 1.86% |
Interest cost effective rate | 2.33% | 1.35% | 2.27% |
Retirement Plans - Fair Value M
Retirement Plans - Fair Value Measurement Plan Assets (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, amount | $ 46 | $ 54 |
Equity | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, amount | 30 | 34 |
Fixed income | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, amount | 8 | 9 |
Guaranteed deposit account | Significant Unobservable Inputs (Level 3) | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, amount | 1 | 3 |
Subtotal | Fair Value, Inputs, Level 1, 2 and 3 | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, amount | 39 | 46 |
Collective trust - fixed income | Measured at NAV | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Plan assets, amount | $ 7 | $ 8 |
Retirement Plans - Schedule of
Retirement Plans - Schedule of Guaranteed Deposit Accounts (Details) - Level 3 - USD ($) $ in Millions | 12 Months Ended | |
Feb. 03, 2023 | Jan. 28, 2022 | |
Change in plan assets: | ||
Beginning balance | $ 3 | $ 3 |
Purchases | 3 | 5 |
Sales | (5) | (5) |
Ending balance | $ 1 | $ 3 |
Retirement Plans - Estimated Fu
Retirement Plans - Estimated Future Benefit Payment (Details) $ in Millions | Feb. 03, 2023 USD ($) |
Defined Benefit Plan Disclosure [Line Items] | |
2023 | $ 6 |
2024 | 6 |
2025 | 6 |
2026 | 6 |
2027 | 5 |
Five subsequent fiscal years | 26 |
Pension Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2023 | 5 |
2024 | 5 |
2025 | 5 |
2026 | 5 |
2027 | 4 |
Five subsequent fiscal years | 21 |
Retiree Health Reimbursement Account Plan [Member] | |
Defined Benefit Plan Disclosure [Line Items] | |
2023 | 1 |
2024 | 1 |
2025 | 1 |
2026 | 1 |
2027 | 1 |
Five subsequent fiscal years | $ 5 |
Income Taxes - Provision for In
Income Taxes - Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Income Tax Disclosure [Abstract] | |||
Document Period End Date | Feb. 03, 2023 | ||
Current: | |||
Federal | $ 69 | $ 13 | $ 34 |
State | 20 | 7 | 14 |
Deferred: | |||
Federal | (15) | 48 | 10 |
State | (2) | 11 | 2 |
Total | $ 72 | $ 79 | $ 60 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Provision for Income Taxes (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Income Tax Disclosure [Abstract] | |||
Amount computed at the statutory federal income tax rate | $ 79 | $ 75 | $ 57 |
State income taxes, net of federal tax benefit | 13 | 16 | 13 |
Research and development and other federal credits | (8) | (9) | (8) |
Non-deductible compensation | 3 | 3 | 3 |
Excess tax benefits for stock-based compensation | (3) | (3) | (3) |
IncomeTaxReconciliationDeductionsFDII | (12) | (6) | (1) |
Other | 0 | 3 | (1) |
Total | $ 72 | $ 79 | $ 60 |
Effective Income Tax Rate Reconciliation, Percent | 19.30% | 22.10% | 22.10% |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 11 Months Ended | 12 Months Ended | ||
Jan. 03, 2024 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Income Taxes [Line Items] | ||||
Unrecognized Tax Benefits, Period Increase (Decrease) | $ 61 | |||
Additions for tax positions related to prior years | 5 | $ 2 | $ 8 | |
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued | 8 | |||
Forecast | ||||
Income Taxes [Line Items] | ||||
Additions for tax positions related to prior years | $ 50 | |||
Federal | ||||
Income Taxes [Line Items] | ||||
Operating loss carryforwards | 62 | |||
State | ||||
Income Taxes [Line Items] | ||||
Operating loss carryforwards | 9 | |||
Carryforward amount | 9 | |||
Valuation allowance | $ 8 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets (Liabilities) (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Components of Deferred Tax Assets and Liabilities [Abstract] | ||
Accrued vacation and bonuses | $ 28 | $ 30 |
Accrued liabilities | 17 | 12 |
Deferred compensation | 17 | 18 |
Stock awards | 9 | 10 |
Net operating loss and other carryforwards | 80 | 94 |
Fixed asset basis difference | 2 | 0 |
Deferred revenue | 0 | 17 |
Lease liability | 50 | 63 |
Research and development expenditures | 152 | 0 |
Accumulated other comprehensive loss | 0 | 13 |
Valuation allowance | (8) | (7) |
Total deferred tax assets | 347 | 250 |
Deferred revenue | (21) | 0 |
Payroll tax deferral | (2) | (2) |
Fixed asset basis difference | 0 | (3) |
Purchased intangible assets | (264) | (235) |
Right of use assets | (40) | (53) |
Accumulated other comprehensive income | (6) | 0 |
Total deferred tax liabilities | (333) | (293) |
Net deferred tax assets (liabilities) | $ (43) | |
Deferred Tax Assets, Net | $ 14 |
Income Taxes - Schedule of Chan
Income Taxes - Schedule of Changes in Unrecognized Tax Benefits (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |||
Unrecognized tax benefits at beginning of the year | $ 78 | $ 66 | $ 51 |
Additions for tax positions related to prior years | 5 | 2 | 8 |
Additions for tax positions related to the current year | 75 | 10 | 9 |
Reductions for prior year tax positions related to statute expiration | 0 | 0 | (2) |
Unrecognized tax benefits at end of the year | 158 | 78 | 66 |
Unrecognized tax benefits that, if recognized, would affect the effective income tax rate | $ 90 | $ 70 | $ 66 |
Debt Obligations - Schedule of
Debt Obligations - Schedule of Long-term Debt (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 | Mar. 13, 2020 |
Debt Instrument [Line Items] | |||
Total principal payments | $ 2,390 | $ 2,540 | |
Principal amount of long-term debt, current | 31 | 148 | |
Principal amount of long-term debt, non current | 2,359 | 2,392 | |
Unamortized debt issuance costs | (16) | (22) | |
Unamortized debt issuance costs, current | 0 | 0 | |
Unamortized debt issuance costs, non current | (16) | (22) | |
Total long-term debt | 2,374 | 2,518 | |
Less current portion | 31 | 148 | |
Total long-term debt, net of current portion | $ 2,343 | 2,370 | |
June 2027 Credit Facility, Term Loan A | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 5.91% | ||
Effective interest rate | 6.03% | ||
Total principal payments | $ 1,230 | 0 | |
Unamortized debt issuance costs | (5) | 0 | |
Total long-term debt | $ 1,225 | 0 | |
Term Loan A Facility due October 2023 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 0% | ||
Effective interest rate | 0% | ||
Total principal payments | $ 0 | 785 | |
Unamortized debt issuance costs | 0 | (5) | |
Total long-term debt | $ 0 | 780 | |
Term Loan A2 Facility due October 2023 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 0% | ||
Effective interest rate | 0% | ||
Total principal payments | $ 0 | 100 | |
Unamortized debt issuance costs | 0 | 0 | |
Total long-term debt | $ 0 | 100 | |
Term Loan B Facility due October 2025 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.54% | ||
Effective interest rate | 6.75% | ||
Total principal payments | $ 488 | 983 | |
Unamortized debt issuance costs | (3) | (7) | |
Total long-term debt | $ 485 | 976 | |
Term Loan B2 Facility due March 2027 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 6.54% | ||
Effective interest rate | 6.99% | ||
Total principal payments | $ 272 | 272 | $ 600 |
Unamortized debt issuance costs | (4) | (5) | |
Total long-term debt | $ 268 | 267 | |
Senior Notes due April 2028 | |||
Debt Instrument [Line Items] | |||
Stated interest rate | 4.88% | 4.875% | |
Effective interest rate | 5.11% | ||
Total principal payments | $ 400 | 400 | $ 400 |
Unamortized debt issuance costs | (4) | (5) | |
Total long-term debt | $ 396 | $ 395 |
Debt Obligations - Narrative (D
Debt Obligations - Narrative (Details) | 6 Months Ended | 12 Months Ended | |||||||||
Jun. 30, 2022 USD ($) | Oct. 31, 2021 | Mar. 01, 2021 | Jul. 29, 2022 USD ($) | Feb. 03, 2023 USD ($) | Jan. 28, 2022 USD ($) | Oct. 28, 2022 | Jul. 02, 2021 USD ($) | Jan. 29, 2021 USD ($) | Mar. 13, 2020 USD ($) | Oct. 31, 2018 | |
Debt Instrument [Line Items] | |||||||||||
Principal amount of long-term debt | $ 2,390,000,000 | $ 2,540,000,000 | |||||||||
Debt Issuance Costs, Net | 16,000,000 | 22,000,000 | |||||||||
Line of Credit Facility, Fair Value of Amount Outstanding | 0 | ||||||||||
Minimum | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 1.25% | ||||||||||
Minimum | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 2.25% | ||||||||||
Maximum | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 0.875% | ||||||||||
Maximum | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 1.875% | ||||||||||
Second Amendmente to the Third Amended Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Issuance Costs, Gross | $ 27,000,000 | ||||||||||
Debt Issuance Costs, Net | 22,000,000 | ||||||||||
Debt Issuance Costs, Interest Expense | $ 5,000,000 | ||||||||||
Fifth Amendment Credit Agreement | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Debt Issuance Costs, Gross | 8,000,000 | ||||||||||
Debt Issuance Costs, Interest Expense | 2,000,000 | ||||||||||
Debt Issuance Costs, Deferred And Amortized To Interest Expense | 6,000,000 | ||||||||||
February 2019 Credit Facility | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing capacity | 3,000,000,000 | ||||||||||
Term Loan A Facility due October 2023 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of long-term debt | $ 0 | 785,000,000 | |||||||||
Stated interest rate | 0% | ||||||||||
Debt Issuance Costs, Net | $ 0 | 5,000,000 | |||||||||
Term Loan B Facility due October 2025 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of long-term debt | $ 488,000,000 | 983,000,000 | |||||||||
Amortization rate | 0.25% | ||||||||||
Stated interest rate | 6.54% | ||||||||||
Debt Issuance Costs, Net | $ 3,000,000 | 7,000,000 | |||||||||
Revolving Credit Facility | Minimum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee percentage | 0.125% | ||||||||||
Revolving Credit Facility | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Commitment fee percentage | 0.25% | ||||||||||
Term Loan B Facility Due October Two Thousand Twenty Five | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Write off of Deferred Debt Issuance Cost | $ 3,000,000 | ||||||||||
Payment for Debt Extinguishment or Debt Prepayment Cost | $ 400,000,000 | ||||||||||
Term Loan B Facility Due October Two Thousand Twenty Five | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of Other Long-Term Debt | $ 90,000,000 | ||||||||||
Term Loan B2 Facility due March 2027 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of long-term debt | $ 272,000,000 | 272,000,000 | $ 600,000,000 | ||||||||
Amortization rate | 0.25% | ||||||||||
Repayments of Secured Debt | 325,000,000 | ||||||||||
Write off of Deferred Debt Issuance Cost | 8,000,000 | ||||||||||
Stated interest rate | 6.54% | ||||||||||
Debt Issuance Costs, Net | $ 4,000,000 | 5,000,000 | |||||||||
Senior Notes due April 2028 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of long-term debt | $ 400,000,000 | 400,000,000 | $ 400,000,000 | ||||||||
Stated interest rate | 4.88% | 4.875% | |||||||||
Debt Issuance Costs, Net | $ 4,000,000 | 5,000,000 | |||||||||
Term Loan A2 Facility Due October Two Thousand Twenty Three | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of long-term debt | $ 100,000,000 | ||||||||||
Amortization rate | 0.3125% | ||||||||||
Term Loan A2 Facility Due October Two Thousand Twenty Three | Second Amendmente to the Third Amended Credit Agreement | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 1% | ||||||||||
Term Loan A2 Facility Due October Two Thousand Twenty Three | Second Amendmente to the Third Amended Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 2% | ||||||||||
Term Loan A2 Facility Due October Two Thousand Twenty Three | First Amendment to the Third Amended Credit Agreement | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 0.25% | ||||||||||
Term Loan A2 Facility Due October Two Thousand Twenty Three | First Amendment to the Third Amended Credit Agreement | London Interbank Offered Rate (LIBOR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 1.25% | ||||||||||
Term Loan A Facility Due June Two Thousand Twenty Seven | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Principal amount of long-term debt | 1,230,000,000 | ||||||||||
The Credit Facility | Line of Credit | Secured Overnight Financing Rate (SOFR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 0.10% | ||||||||||
Secured Debt | Term Loan B Facility due October 2025 | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Repayments of Other Long-Term Debt | $ 35,000,000 | ||||||||||
Revolving Credit Facility | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing capacity | 1,000,000,000 | ||||||||||
Proceeds from lines of credit | $ 410,000,000 | ||||||||||
Line of Credit Facility, Current Borrowing Capacity | $ 400,000,000 | ||||||||||
Revolving Credit Facility | February 2019 Credit Facility | Line of Credit | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit facility, maximum borrowing capacity | $ 1,000,000,000 | ||||||||||
Revolving Credit Facility | Term Loan A Facility Due June Two Thousand Twenty Seven | Line of Credit | Minimum | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 0% | ||||||||||
Revolving Credit Facility | Term Loan A Facility Due June Two Thousand Twenty Seven | Line of Credit | Minimum | Secured Overnight Financing Rate (SOFR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 0.75% | ||||||||||
Revolving Credit Facility | Term Loan A Facility Due June Two Thousand Twenty Seven | Line of Credit | Maximum | Base Rate | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 0.75% | ||||||||||
Revolving Credit Facility | Term Loan A Facility Due June Two Thousand Twenty Seven | Line of Credit | Maximum | Secured Overnight Financing Rate (SOFR) | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Interest rate margin under credit agreement | 1.75% | ||||||||||
Until July 31, 2016 | Third Amended Credit Agreement | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit agreement financial covenant, leverage ratio | 3.75 | ||||||||||
After July 31, 2016 | Third Amended Credit Agreement | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit agreement financial covenant, leverage ratio | 4.50 | ||||||||||
Third Term | Third Amended Credit Agreement | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit agreement financial covenant, leverage ratio | 4 | ||||||||||
Fourth Term | Third Amended Credit Agreement | Maximum | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Credit agreement financial covenant, leverage ratio | 4.25 | ||||||||||
Debt Instrument, Redemption, Period One | Term Loan A Facility due October 2023 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization rate | 1.25% | ||||||||||
Debt Instrument, Redemption, Period One | Term Loan A Facility Due June Two Thousand Twenty Seven | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization rate | 1.25% | ||||||||||
Debt Instrument, Redemption, Period Two | Term Loan A Facility due October 2023 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization rate | 1.875% | ||||||||||
Debt Instrument, Redemption, Period Two | Term Loan A Facility Due June Two Thousand Twenty Seven | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization rate | 1.875% | ||||||||||
Debt Instrument, Redemption, Period Three | Term Loan A Facility due October 2023 | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization rate | 2.50% | ||||||||||
Debt Instrument, Redemption, Period Three | Term Loan A Facility Due June Two Thousand Twenty Seven | |||||||||||
Debt Instrument [Line Items] | |||||||||||
Amortization rate | 2.50% |
Debt Obligations - Maturities o
Debt Obligations - Maturities of Long-term Debt (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Debt Disclosure [Abstract] | ||
2023 | $ 31 | |
2024 | 77 | |
2025 | 596 | |
2026 | 123 | |
2027 | 1,163 | |
Thereafter | 400 | |
Total principal payments | $ 2,390 | $ 2,540 |
Derivative Instruments Design_3
Derivative Instruments Designated as Cash Flow Hedges - Schedule of Derivative Instruments Designated as Cash Flow Hedges (Details) - USD ($) $ in Millions | 12 Months Ended | |
Feb. 03, 2023 | Jan. 28, 2022 | |
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 1,160 | |
Asset (Liability) Fair Value | 25 | $ (51) |
Interest rate swap 2 | Interest Rate Swaps | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 685 | |
Pay Fixed Rate | 2.96% | |
Receive Variable Rate | Term SOFR | |
Settlement and Termination | Monthly through October 31, 2025 | |
Asset (Liability) Fair Value | $ 16 | (39) |
Interest rate swap 3 | Interest Rate Swaps | ||
Derivative [Line Items] | ||
Derivative, Notional Amount | $ 475 | |
Pay Fixed Rate | 2.36% | |
Receive Variable Rate | Term SOFR | |
Settlement and Termination | Monthly through October 31, 2023 | |
Asset (Liability) Fair Value | $ 9 | $ (12) |
Derivative Instruments Design_4
Derivative Instruments Designated as Cash Flow Hedges - Narrative (Details) - Interest Rate Swaps - USD ($) $ in Millions | Feb. 03, 2023 | Jun. 30, 2022 |
Derivative [Line Items] | ||
Unrealized loss from accumulated other comprehensive gain | $ 22 | |
Term loan interest rate swaps 2 | ||
Derivative [Line Items] | ||
Pay Fixed Rate | 2.96% | |
Pay Fixed Rate | 2.96% | |
Term loan interest rate swaps 3 | ||
Derivative [Line Items] | ||
Pay Fixed Rate | 2.36% | |
Pay Fixed Rate | 2.36% |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Loss by Component (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | $ 1,629 | $ 1,552 | $ 1,427 |
Other comprehensive (loss) income before reclassifications | 71 | 36 | (54) |
Amounts reclassified from accumulated other comprehensive loss | 9 | 34 | 30 |
Income tax impact | (21) | (18) | 7 |
Other comprehensive income (loss) | 59 | 52 | (17) |
Balance, end of period | 1,704 | 1,629 | 1,552 |
Unrealized Gains (losses) on Fixed Interest Rate Swap Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (38) | (86) | |
Other comprehensive (loss) income before reclassifications | 67 | 31 | (55) |
Amounts reclassified from accumulated other comprehensive loss | 9 | 34 | 29 |
Income tax impact | (20) | (17) | 7 |
Other comprehensive income (loss) | 56 | 48 | (19) |
Balance, end of period | 18 | (38) | (86) |
Defined Benefit Obligation Adjustment(2) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | 1 | (3) | |
Other comprehensive (loss) income before reclassifications | 4 | 5 | 1 |
Amounts reclassified from accumulated other comprehensive loss | 0 | 0 | 1 |
Income tax impact | (1) | (1) | 0 |
Other comprehensive income (loss) | 3 | 4 | 2 |
Balance, end of period | 4 | 1 | (3) |
AOCI Attributable to Parent | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (37) | (89) | (72) |
Other comprehensive income (loss) | 59 | 52 | (17) |
Balance, end of period | $ 22 | $ (37) | (89) |
Accounting Standards Update 2018-02 | Unrealized Gains (losses) on Fixed Interest Rate Swap Cash Flow Hedges | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (67) | ||
Accounting Standards Update 2018-02 | Defined Benefit Obligation Adjustment(2) | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | (5) | ||
Accounting Standards Update 2018-02 | AOCI Attributable to Parent | |||
Accumulated Other Comprehensive Income (Loss) [Line Items] | |||
Balance, beginning of period | $ (72) |
Sale of Receivables (Details)
Sale of Receivables (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Jan. 21, 2020 | |
Receivables [Abstract] | ||||
Maximum commitment | $ 300 | |||
Purchase discount fees | $ 8 | $ 2 | $ 2 | |
Oustanding amount | 250 | 200 | $ 185 | |
Sale of receivables | 3,729 | 3,224 | ||
Cash collections | (3,679) | (3,209) | ||
Cash collected, not remitted to Purchaser(2) | (30) | (23) | ||
Remaining sold receivables | 220 | 177 | ||
Increase to cash flows from operating activities | $ 50 | $ 15 |
Leases Lease Cost (Details)
Leases Lease Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Leases [Abstract] | |||
Operating Lease, Cost | $ 67 | $ 92 | $ 74 |
Variable Lease, Cost | 11 | 17 | 21 |
Short-term Lease, Cost | 2 | 9 | 35 |
Sublease Income | 0 | 1 | 2 |
Lease, Cost | $ 80 | 117 | 128 |
Operating Lease, Impairment Loss | $ 12 | $ 1 |
Leases Assets and Liabilities,
Leases Assets and Liabilities, Leases (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Leases [Abstract] | ||
Operating lease right of use assets | $ 158 | $ 209 |
Operating Lease, Liability, Current | 42 | 52 |
Operating Lease, Liability, Noncurrent | 152 | 192 |
Operating Lease, Liability | $ 194 | $ 244 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Other accrued liabilities | Other accrued liabilities |
Leases Other Supplemental Lease
Leases Other Supplemental Lease Information (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Leases [Abstract] | |||
Operating Lease, Payments | $ 62 | $ 74 | $ 77 |
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability | $ 15 | $ 54 | $ 110 |
Operating Lease, Weighted Average Remaining Lease Term | 5 years | 5 years | |
Operating Lease, Weighted Average Discount Rate, Percent | 3.50% | 3.10% |
Leases Operating Lease Liabilit
Leases Operating Lease Liabilities, Payments Due (Details) - USD ($) $ in Millions | Feb. 03, 2023 | Jan. 28, 2022 |
Leases [Abstract] | ||
2023 | $ 48 | |
2024 | 49 | |
2025 | 41 | |
2026 | 35 | |
2027 | 19 | |
Thereafter | 19 | |
Lessee, Operating Lease, Liability, Payments, Due | 211 | |
Lessee, Operating Lease, Liability, Undiscounted Excess Amount | (17) | |
Operating Lease, Liability | $ 194 | $ 244 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Leases [Abstract] | |||
Operating Lease, Lease Income | $ 2 | $ 18 | $ 40 |
Operating Lease, Liability, to be Paid, Sublease Arrangements | 0 | ||
Rental Commitments, Leases Not Commenced | $ 3 | ||
Rental Commitments, Leases Not Commenced, Lease Term | 10 years | ||
Cash received from exercises of stock options | $ 0 | $ 1 | $ 0 |
Proceeds from Stock Options Exercised Under Agreements | $ 23 | ||
Operating Lease Income Comprehensive Income Extensible List Not Disclosed Flag | true |
Business Segment Information (D
Business Segment Information (Details) - segment | 12 Months Ended | ||
Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | |
Segment Reporting Information [Line Items] | |||
Number of operating segments | 2 | ||
Number of reportable segments | 1 | ||
Sales Revenue, Net | Customer Concentration Risk | UNITED STATES | |||
Segment Reporting Information [Line Items] | |||
Percentage of sales | 98% | 98% | 98% |
Legal Proceedings and Commitm_2
Legal Proceedings and Commitments and Contingencies (Details) $ in Millions | Feb. 03, 2023 USD ($) |
Letters of Credit | |
Commitments And Contingencies [Line Items] | |
Outstanding obligations | $ 9 |
Surety Bonds | |
Commitments And Contingencies [Line Items] | |
Outstanding obligations | $ 19 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||||
Mar. 29, 2023 | Mar. 23, 2023 | Feb. 03, 2023 | Jan. 28, 2022 | Jan. 29, 2021 | Feb. 04, 2023 | |
Subsequent Event [Line Items] | ||||||
Cash dividends declared per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 0.37 | |||
Subsequent Event | ||||||
Subsequent Event [Line Items] | ||||||
Ownership Interest Percentage Sold By Parent | 0.10% | |||||
Pre Tax Cash Proceeds From Sale Of Business | $ 350 | |||||
Cash dividends declared per share (in dollars per share) | $ 0.37 |