Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Aug. 04, 2023 | Aug. 25, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Aug. 04, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-35832 | |
Entity Registrant Name | Science Applications International Corporation | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 46-1932921 | |
Entity Address, Address Line One | 12010 Sunset Hills Road, | |
Entity Address, City or Town | Reston, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 20190 | |
City Area Code | (703) | |
Local Phone Number | 676-4300 | |
Title of 12(b) Security | Common Stock, par value $.0001 per share | |
Trading Symbol | SAIC | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 52,935,354 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001571123 | |
Current Fiscal Year End Date | --02-02 |
CONDENSED AND CONSOLIDATED STAT
CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Revenues | $ 1,784 | $ 1,831 | $ 3,812 | $ 3,827 |
Cost of revenues | 1,568 | 1,612 | 3,361 | 3,382 |
Selling, general and administrative expenses | 88 | 93 | 172 | 185 |
Acquisition and integration costs | 1 | 1 | 1 | 10 |
Other operating income (includes gain on divestiture, see Note 4) | (235) | 0 | (241) | 0 |
Operating income | 362 | 125 | 519 | 250 |
Interest expense | 33 | 30 | 66 | 57 |
Other (income) expense, net | (6) | 0 | (5) | 3 |
Income before income taxes | 335 | 95 | 458 | 190 |
Provision for income taxes | (88) | (21) | (113) | (42) |
Net income | 247 | 74 | 345 | 148 |
Net income attributable to non-controlling interest | 0 | 1 | 0 | 2 |
Net income attributable to common stockholders | $ 247 | $ 73 | $ 345 | $ 146 |
Earnings per share: | ||||
Basic (in dollars per share) | $ 4.60 | $ 1.31 | $ 6.40 | $ 2.61 |
Diluted (in dollars per share) | $ 4.56 | $ 1.30 | $ 6.35 | $ 2.59 |
CONDENSED AND CONSOLIDATED ST_2
CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Statement - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 247 | $ 74 | $ 345 | $ 148 |
Net unrealized gain (loss) on derivative instruments | 7 | (3) | 1 | 34 |
Total other comprehensive income (loss), net of tax | 7 | (3) | 1 | 34 |
Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||||
Comprehensive income | 254 | 71 | 346 | 182 |
Comprehensive income attributable to non-controlling interest | 0 | 1 | 0 | 2 |
Comprehensive income attributable to common stockholders | $ 254 | $ 70 | $ 346 | $ 180 |
CONDENSED AND CONSOLIDATED BALA
CONDENSED AND CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Aug. 04, 2023 | Feb. 03, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 352 | $ 109 |
Receivables, net | 958 | 936 |
Inventory, prepaid expenses and other current assets | 74 | 152 |
Total current assets | 1,384 | 1,197 |
Goodwill | 2,851 | 2,911 |
Intangible assets, net | 951 | 1,009 |
Property, plant, and equipment (net of accumulated depreciation of $193 million and $194 million at August 4, 2023 and February 3, 2023, respectively) | 90 | 92 |
Operating lease right of use assets | 140 | 158 |
Other assets | 256 | 176 |
Total assets | 5,672 | 5,543 |
Current liabilities: | ||
Accounts payable and accrued liabilities | 820 | 767 |
Accrued payroll and employee benefits | 330 | 328 |
Long-term debt, current portion | 62 | 31 |
Total current liabilities | 1,212 | 1,126 |
Long-term debt, net of current portion | 2,215 | 2,343 |
Operating lease liabilities | 138 | 152 |
Other long-term liabilities | 264 | 218 |
Commitments and contingencies (Note 11) | ||
Equity: | ||
Common stock | 0 | 0 |
Additional paid-in capital | 480 | 637 |
Retained earnings | 1,340 | 1,035 |
Accumulated other comprehensive income | 23 | 22 |
Total common stockholders' equity | 1,843 | 1,694 |
Non-controlling interest | 0 | 10 |
Total stockholders' equity | 1,843 | 1,704 |
Total liabilities and stockholders' equity | $ 5,672 | $ 5,543 |
CONDENSED AND CONSOLIDATED BA_2
CONDENSED AND CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Aug. 04, 2023 | Feb. 03, 2023 |
Statement of Financial Position [Abstract] | ||
Property, plant and equipment, accumulated depreciation | $ 193 | $ 194 |
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) | 53,000,000 | 54,000,000 |
Common stock, shares outstanding (in shares) | 53,000,000 | 54,000,000 |
CONDENSED AND CONSOLIDATED ST_3
CONDENSED AND CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions | Total | Shares of common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Non-controlling interest |
Balance, beginning (in shares) at Jan. 28, 2022 | 56,000,000 | |||||
Beginning Balance at Jan. 28, 2022 | $ 1,629 | $ 838 | $ 818 | $ (37) | $ 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 148 | 146 | 2 | |||
Issuances of stock (in shares) | 1,000,000 | |||||
Issuances of stock | 8 | 8 | ||||
Net other comprehensive income | 34 | 34 | ||||
Cash dividends | (41) | (41) | ||||
Stock-based compensation | 8 | 8 | ||||
Repurchases of stock (in shares) | (2,000,000) | |||||
Repurchases of stock | (131) | (131) | ||||
Distributions to non-controlling interest | (2) | (2) | ||||
Balance, ending (in shares) at Jul. 29, 2022 | 55,000,000 | |||||
Ending Balance at Jul. 29, 2022 | 1,653 | 723 | 923 | (3) | 10 | |
Balance, beginning (in shares) at Apr. 29, 2022 | 56,000,000 | |||||
Beginning Balance at Apr. 29, 2022 | 1,650 | 770 | 870 | 0 | 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 74 | 73 | 1 | |||
Issuances of stock | 3 | 3 | ||||
Net other comprehensive income | (3) | (3) | ||||
Cash dividends | (20) | (20) | ||||
Stock-based compensation | 12 | 12 | ||||
Repurchases of stock (in shares) | (1,000,000) | |||||
Repurchases of stock | (62) | (62) | ||||
Distributions to non-controlling interest | (1) | (1) | ||||
Balance, ending (in shares) at Jul. 29, 2022 | 55,000,000 | |||||
Ending Balance at Jul. 29, 2022 | $ 1,653 | 723 | 923 | (3) | 10 | |
Balance, beginning (in shares) at Feb. 03, 2023 | 54,000,000 | 54,000,000 | ||||
Beginning Balance at Feb. 03, 2023 | $ 1,704 | 637 | 1,035 | 22 | 10 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 345 | 345 | ||||
Issuances of stock (in shares) | 1,000,000 | |||||
Issuances of stock | 9 | 9 | ||||
Net other comprehensive income | 1 | 1 | ||||
Cash dividends | (40) | (40) | ||||
Stock-based compensation | 7 | 7 | ||||
Repurchases of stock (in shares) | (2,000,000) | |||||
Repurchases of stock | (173) | (173) | ||||
Deconsolidation of non-controlling interest | (10) | (10) | ||||
Distributions to non-controlling interest | $ 0 | |||||
Balance, ending (in shares) at Aug. 04, 2023 | 53,000,000 | 53,000,000 | ||||
Ending Balance at Aug. 04, 2023 | $ 1,843 | 480 | 1,340 | 23 | 0 | |
Balance, beginning (in shares) at May. 05, 2023 | 54,000,000 | |||||
Beginning Balance at May. 05, 2023 | 1,692 | 563 | 1,113 | 16 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Net income | 247 | 247 | ||||
Issuances of stock | 5 | 5 | ||||
Net other comprehensive income | 7 | 7 | ||||
Cash dividends | (20) | (20) | ||||
Stock-based compensation | 14 | 14 | ||||
Repurchases of stock (in shares) | (1,000,000) | |||||
Repurchases of stock | $ (102) | (102) | ||||
Balance, ending (in shares) at Aug. 04, 2023 | 53,000,000 | 53,000,000 | ||||
Ending Balance at Aug. 04, 2023 | $ 1,843 | $ 480 | $ 1,340 | $ 23 | $ 0 |
CONDENSED AND CONSOLIDATED ST_4
CONDENSED AND CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Cash dividends paid per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 0.74 | $ 0.74 |
Cash dividends declared per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 0.74 | $ 0.74 |
CONDENSED AND CONSOLIDATED ST_5
CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 6 Months Ended | |
Aug. 04, 2023 | Jul. 29, 2022 | |
Cash flows from operating activities: | ||
Net income | $ 345 | $ 148 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 72 | 81 |
Amortization of off-market customer contracts | (4) | (6) |
Amortization of debt issuance costs | 4 | 6 |
Deferred income taxes | (25) | (22) |
Stock-based compensation expense | 27 | 23 |
Gain on sale of long-lived assets | (3) | 0 |
Gain on divestitures | (247) | 0 |
Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of divestitures: | ||
Receivables | (90) | (21) |
Inventory, prepaid expenses and other current assets | 8 | 7 |
Other assets | (3) | 5 |
Accounts payable and accrued liabilities | 52 | 29 |
Accrued payroll and employee benefits | 9 | (27) |
Income taxes payable | 74 | 36 |
Operating lease assets and liabilities, net | (2) | 0 |
Other long-term liabilities | 15 | 0 |
Net cash provided by operating activities | 232 | 259 |
Cash flows from investing activities: | ||
Expenditures for property, plant, and equipment | (12) | (12) |
Purchases of marketable securities | (5) | (4) |
Sales of marketable securities | 4 | 2 |
Proceeds from Sale of Intangible Assets | 3 | 0 |
Proceeds from divestitures | 355 | 0 |
Cash divested upon deconsolidation of joint venture | (8) | 0 |
Other | (3) | (3) |
Net cash provided by (used in) investing activities | 334 | (17) |
Cash flows from financing activities: | ||
Dividend payments to stockholders | (41) | (42) |
Principal payments on borrowings | (260) | (575) |
Issuances of stock | 8 | 8 |
Stock repurchased and retired or withheld for taxes on equity awards | (190) | (148) |
Proceeds from borrowings | 160 | 515 |
Debt issuance costs | 0 | (5) |
Distributions to non-controlling interest | 0 | (2) |
Net cash used in financing activities | (323) | (249) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 243 | (7) |
Cash, cash equivalents and restricted cash at beginning of period | 118 | 115 |
Cash, cash equivalents and restricted cash at end of period | $ 361 | $ 108 |
Business Overview and Summary o
Business Overview and Summary of Significant Accounting Policies | 6 Months Ended |
Aug. 04, 2023 | |
Accounting Policies [Abstract] | |
Business Overview and Summary of Significant Accounting Policies | Business Overview and Summary of Significant Accounting Policies: Overview Science Applications International Corporation (collectively, with its consolidated subsidiaries, and herein referred to as "SAIC," the “Company,” "we," "us," or "our") is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S. government. The Company provides these services for large, complex projects with a targeted emphasis on higher-end, differentiated technology services and solutions that accelerate and transform secure and resilient digital environments through system development, modernization, integration, and sustainment to drive enterprise and mission outcomes. The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. Each of the Company’s two customer facing operating sectors is focused on providing both (1) growth and technology accelerating solutions and (2) core 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 service offerings include systems engineering and the operation and maintenance of existing IT systems and networks. Principles of Consolidation and Basis of Presentation The accompanying financial information was prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. The financial statements are unaudited, but in the opinion of management include all adjustments necessary for a fair presentation thereof. The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended February 3, 2023. 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 2024 began on February 4, 2023 and ends on February 2, 2024, while fiscal 2023 began on January 29, 2022 and ended on February 3, 2023. Operating Cycle The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts. Derivative Instruments Designated as Cash Flow Hedges Derivative instruments are recorded on the condensed and consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges. Marketable Securities Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1). As of August 4, 2023 and February 3, 2023, the fair value of the Company's investments totaled $30 million and $28 million, respectively, and are included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund its deferred compensation plan liabilities. Cash, Cash Equivalents and Restricted Cash The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported on the condensed and consolidated balance sheets for the periods presented: August 4, February 3, (in millions) Cash and cash equivalents $ 352 $ 109 Restricted cash included in inventory, prepaid expenses and other current assets 5 5 Restricted cash included in other assets 4 4 Cash, cash equivalents and restricted cash $ 361 $ 118 Acquisition and Integration Costs Acquisition-related costs that are not part of the purchase price consideration are generally expensed as incurred, except for certain costs that are deferred in connection with the issuance of debt. These costs typically include transaction-related costs, such as finder’s fees, legal, accounting, and other professional costs. Integration-related costs represent costs directly related to combining the Company and its acquired businesses. Integration-related costs typically include strategic consulting services, facility consolidations, employee related costs, such as retention and severance, costs to integrate information technology infrastructure, enterprise planning systems, processes, and other non-recurring integration-related costs. Acquisition and integration costs are presented together as acquisition and integration costs on the condensed and consolidated statements of income. Acquisition costs for the three and six months ended August 4, 2023 were immaterial. During the six months ended July 29, 2022, the Company recognized a $1 million benefit related to the acquisition of Koverse. During the three and six months ended August 4, 2023, the Company incurred $1 million of integration costs related to the acquisitions of Halfaker and Koverse. During the three and six months ended July 29, 2022, the Company incurred $1 million and $11 million of integration costs, respectively, related to the acquisitions of Halfaker and Koverse. Restructuring During the three and six months ended August 4, 2023, the Company incurred $5 million and $6 million of restructuring costs, respectively. During the three and six months ended July 29, 2022, the Company incurred $2 million of restructuring costs. These costs are associated with the optimization and consolidation of certain facilities and are presented within selling, general and administrative expenses on the condensed and consolidated statements of income. Investments in Equity Securities The Company invests in certain companies that advance or develop new technologies applicable to its business. The Company also occasionally forms joint ventures as a part of its investment strategy for the purpose of bidding and executing on specific projects. Each investment is evaluated for consolidation under the variable interest entities (VIEs) model and/or the voting interest model. The results of these investments are not material to the unaudited condensed and consolidated financial statements for the periods presented. The Company applies the equity method of accounting to its unconsolidated investments when it has the ability to exercise significant influence over the entity and recognizes its proportionate share of the entities’ net income or loss within other operating income on the condensed and consolidated statements of income. Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost or cost net of other-than-temporary impairments. 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 adopted the requirements of ASU 2022-04 effective the first day of fiscal 2024. |
Earnings Per Share, Share Repur
Earnings Per Share, Share Repurchases and Dividends | 6 Months Ended |
Aug. 04, 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: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions) Basic weighted-average number of shares outstanding 53.5 55.6 53.9 55.9 Dilutive common share equivalents - stock options and other stock-based awards 0.4 0.3 0.4 0.4 Diluted weighted-average number of shares outstanding 53.9 55.9 54.3 56.3 Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three and six months ended August 4, 2023 and July 29, 2022 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 the Company's common stock that may be repurchased under its existing repurchase plan was increased by 8.0 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 24.4 million shares. As of August 4, 2023, the Company has repurchased approximately 18.7 million shares of common stock under the program. Dividends The Company declared and paid a quarterly dividend of $0.37 per share of its common stock during the three months ended August 4, 2023. Subsequent to the end of the quarter, on September 6, 2023, the Company's Board of Directors declared a quarterly dividend of $0.37 per share of the Company's common stock payable on October 27, 2023 to stockholders of record on October 13, 2023. |
Revenues
Revenues | 6 Months Ended |
Aug. 04, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues: Changes in Estimates on Contracts Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can occur routinely over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. A significant portion of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss. Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions, except per share amounts) Net (unfavorable) favorable adjustments $ (1) $ 5 $ 4 $ 10 Net (unfavorable) favorable adjustments, after tax (1) 4 3 8 Diluted EPS impact $ (0.02) $ 0.07 $ 0.06 $ 0.14 Revenues were $1 million lower and $4 million higher for the three and six months ended August 4, 2023, respectively, and $5 million and $9 million higher for the three and six months ended July 29, 2022, respectively, due to net revenue recognized from performance obligations satisfied in prior periods. Disaggregation of Revenues The Company's revenues are generated primarily from long-term contracts with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company disaggregates revenues by customer, contract type and prime versus subcontractor to the federal government. Disaggregated revenues by customer were as follows: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions) Department of Defense $ 919 $ 884 $ 1,990 $ 1,830 Other federal government agencies 828 911 1,748 1,924 Commercial, state and local 37 36 74 73 Total $ 1,784 $ 1,831 $ 3,812 $ 3,827 Disaggregated revenues by contract type were as follows: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions) Cost reimbursement $ 1,105 $ 1,035 $ 2,217 $ 2,130 Time and materials (T&M) 358 328 725 714 Firm-fixed price (FFP) 321 468 870 983 Total $ 1,784 $ 1,831 $ 3,812 $ 3,827 Disaggregated revenues by prime versus subcontractor were as follows: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions) Prime contractor to federal government $ 1,591 $ 1,665 $ 3,446 $ 3,487 Subcontractor to federal government 156 130 292 267 Other 37 36 74 73 Total $ 1,784 $ 1,831 $ 3,812 $ 3,827 Contract Balances Contract balances for the periods presented were as follows: Balance Sheet line item August 4, February 3, (in millions) Billed and billable receivables, net (1) Receivables, net $ 608 $ 572 Contract assets - unbillable receivables Receivables, net 350 364 Contract assets - contract retentions Other assets 14 15 Contract liabilities - current Accounts payable and accrued liabilities 45 48 Contract liabilities - non-current Other long-term liabilities $ 3 $ 4 (1) Net of allowance of $4 million as of August 4, 2023 and February 3, 2023. During the three and six months ended August 4, 2023, the Company recognized revenues of $12 million and $33 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of February 3, 2023. During the three and six months ended July 29, 2022, the Company recognized revenues of $8 million and $35 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of January 28, 2022. Remaining Performance Obligations As of August 4, 2023, the Company had approximately $5 billion of remaining performance obligations. The Company expects to recognize revenue on approximately 85% of the remaining performance obligations over the next 12 months and approximately 95% over the next 24 months, with the remaining recognized thereafter. Lessor Revenue The Company leases IT equipment and hardware to its customers. All of the Company’s lessor arrangements are operating leases. Operating lease income is recognized on a straight-line basis over the term of the lease and is reported as revenue on the condensed and consolidated statements of income. During the six months ended July 29, 2022, the Company recognized revenue of $23 million from the exercise of purchase options under certain lessor arrangements. Operating lease income was immaterial for the three and six months ended August 4, 2023 and July 29, 2022. |
Divestitures
Divestitures | 6 Months Ended |
Aug. 04, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Mergers, Acquisitions and Dispositions Disclosures | Divestitures: FSA Amendment On February 4, 2023, the Company sold 0.1% of its 50.1% majority ownership interest in Forfeiture Support Associates J.V. (FSA) to its sole joint venture partner for a nominal amount. As a result of the sale and amendment to the joint venture operating agreement of FSA, the Company no longer controls the joint venture and will account for its retained interest as an equity method investment as of the date of the transaction. The Company remeasured its retained investment in FSA to a fair value of $14 million. The equity method investment is included within other assets on the condensed and consolidated balance sheets. The remeasurement resulted in a gain of $7 million which is included within other operating income on the condensed and consolidated statements of income and is reflected within gain on divestitures on the condensed and consolidated statements of cash flows. The Company estimated the fair value of its retained investment in FSA based on Level 3 inputs of the fair value hierarchy. The Company used the income approach which involves the use of estimates and assumptions, including revenue growth rates, projected operating margins, discount rates and terminal growth rates. Sale of Logistics and Supply Chain Management Business On May 6, 2023, the Company closed the sale of its logistics and supply chain management business (Supply Chain Business) to ASRC Federal Holding Company, LLC (ASRC Federal) for $356 million in cash, including $355 million received at closing and a preliminary post-closing adjustment for working capital. The sale enables the Company to focus its resources on long-term strategic growth areas. The Company recorded a preliminary pre-tax gain of $233 million, net of $7 million of transaction costs, which is included within other operating income on the condensed and consolidated statements of income. The disposition does not represent a strategic shift in operations that will have a material effect on the Company's operations and financial results, and accordingly has not been presented as discontinued operations. The major classes of assets and liabilities divested were as follows: (in millions) Assets: Receivables, net $ 46 Inventory, prepaid expenses and other current assets 73 Goodwill 60 Operating lease right of use assets 2 Total assets divested $ 181 Liabilities: Accounts payable and accrued liabilities $ 63 Accrued payroll and employee benefits 1 Operating lease liabilities 1 Total liabilities divested $ 65 In connection with the sale, the Company and ASRC Federal entered into certain transition services agreements pursuant to which the Company will provide certain services through approximately the end of fiscal 2024 on a cost reimbursable basis to ASRC Federal. The transition services include certain IT, finance and other services necessary to support the transition of the sale. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Notes) | 6 Months Ended |
Aug. 04, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets: Goodwill Goodwill had a carrying value of $2,851 million and $2,911 million as of August 4, 2023 and February 3, 2023, respectively. Goodwill decreased $60 million compared to February 3, 2023 due to the sale of the Supply Chain Business (see Note 4). There were no impairments of goodwill during the periods presented. Intangible Assets Intangible assets, all of which were finite-lived, consisted of the following: August 4, 2023 February 3, 2023 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value (in millions) Customer relationships $ 1,462 $ (518) $ 944 $ 1,467 $ (466) $ 1,001 Developed technology 10 (3) 7 10 (2) 8 Trade name 1 (1) — 1 (1) — Total intangible assets $ 1,473 $ (522) $ 951 $ 1,478 $ (469) $ 1,009 Amortization expense related to intangible assets was $29 million and $58 million for the three and six months ended August 4, 2023, respectively, and $32 million and $65 million for the three and six months ended July 29, 2022, respectively. There were no intangible asset impairment losses during the periods presented. As of August 4, 2023, the estimated future annual amortization expense related to intangible assets is as follows: Fiscal Year (in millions) Remainder of 2024 $ 57 2025 115 2026 115 2027 115 2028 98 Thereafter 451 Total $ 951 Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, divestitures, impairments, and other factors. |
Income Taxes
Income Taxes | 6 Months Ended |
Aug. 04, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes: The Company's effective income tax rate was 26.4% and 24.7% for the three and six months ended August 4, 2023, respectively, and 21.8% and 21.9% for the three and six months ended July 29, 2022, respectively. The Company’s higher effective tax rate for the three and six months ended August 4, 2023, compared to the same periods in the prior year, is primarily attributable to the gain from the disposition of the Supply Chain Business and the associated non-deductible goodwill, partially offset by higher tax benefits from stock-based compensation and the completion of a foreign-derived intangible income study. Beginning in fiscal 2023, the Tax Cuts and Jobs Act of 2017 (TCJA) removed the ability of taxpayers to immediately deduct specific research and development expenditures in the year incurred and instead requires taxpayers to capitalize and amortize such research expenditures over a period of five years. As of August 4, 2023, the Company's unrecognized tax benefits were $207 million, compared to $156 million as of February 3, 2023. The increase during the six months ended August 4, 2023 is primarily attributable to research tax credits and capitalized research and development costs in accordance with the TCJA. This increase also resulted in a corresponding $35 million increase to deferred tax assets. As of August 4, 2023 and February 3, 2023, the net deferred tax asset balance was $74 million and $14 million, respectively, and is presented in other assets on the condensed and consolidated balance sheets. |
Debt Obligations
Debt Obligations | 6 Months Ended |
Aug. 04, 2023 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations: The Company’s long-term debt as of the dates presented was as follows: August 4, 2023 February 3, 2023 Stated Effective Principal Unamortized Net Principal Unamortized Net (dollars in millions) Term Loan A Facility due June 2027 6.42 % 6.54 % $ 1,230 $ (4) $ 1,226 $ 1,230 $ (5) $ 1,225 Term Loan B Facility due October 2025 7.29 % 7.50 % 424 (2) 422 488 (3) 485 Term Loan B2 Facility due March 2027 7.29 % 7.73 % 236 (3) 233 272 (4) 268 Senior Notes due April 2028 4.88 % 5.11 % 400 (4) 396 400 (4) 396 Total long-term debt $ 2,290 $ (13) $ 2,277 $ 2,390 $ (16) $ 2,374 Less current portion 62 — 62 31 — 31 Total long-term debt, net of current portion $ 2,228 $ (13) $ 2,215 $ 2,359 $ (16) $ 2,343 As of August 4, 2023, the Company has a $2.9 billion secured credit facility (the Credit Facility) consisting of a Term Loan A Facility due June 2027, a Term Loan B Facility due October 2025, a Term Loan B2 Facility due March 2027 (together, the Term Loan Facilities), and a $1.0 billion Revolving Credit Facility due June 2027 (the Revolving Credit Facility). During the three and six months ended August 4, 2023, the Company made principal prepayments of $64 million and $36 million on the Term Loan B Facility due October 2025 and the Term Loan B2 Facility due March 2027, respectively. During the six months ended August 4, 2023, the Company borrowed and repaid $160 million under the Revolving Credit Facility. There was no balance outstanding on the Revolving Credit Facility as of August 4, 2023. As of August 4, 2023, the Company was in compliance with the covenants under its Credit Facility. As of August 4, 2023 and February 3, 2023, the carrying value of the Company’s outstanding debt obligations approximated its fair value. The fair value of long-term debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s Term Loan Facilities and Senior Notes. Maturities of long-term debt as of August 4, 2023 are: Fiscal Year Total (in millions) Remainder of 2024 $ 31 2025 77 2026 532 2027 123 2028 1,127 Thereafter 400 Total principal payments $ 2,290 |
Derivative Instruments Designat
Derivative Instruments Designated as Cash Flow Hedges | 6 Months Ended |
Aug. 04, 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 (1) at Notional Amount at August 4, 2023 Pay Fixed Receive Settlement and August 4, February 3, 2023 (in millions) (in millions) Interest rate swaps #1 $ 685 2.96 % Term SOFR Monthly through October 31, 2025 $ 23 $ 16 Interest rate swaps #2 450 2.36 % Term SOFR Monthly through October 31, 2023 3 9 Total $ 1,135 $ 26 $ 25 (1) The fair value of the fixed interest rate swap asset is included in other assets on the condensed and consolidated balance sheets. The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate debt. The counterparties to all swap agreements are financial institutions. See Note 9 for the unrealized change in fair values on cash flow hedges recognized in other comprehensive income (loss) and the amounts reclassified from accumulated other comprehensive income (loss) into earnings for the current and comparative periods presented. The Company estimates that it will reclassify $19 million of unrealized gains from accumulated other comprehensive income into earnings in the twelve months following August 4, 2023. |
Changes in Accumulated Other Co
Changes in Accumulated Other Comprehensive Income by Component | 6 Months Ended |
Aug. 04, 2023 | |
Equity [Abstract] | |
Changes in Accumulated Other Comprehensive Income by Component | Changes in Accumulated Other Comprehensive Income (Loss) by Component: The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8 and the Company's defined benefit plans. Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges (1) Defined Benefit Total (in millions) Three months ended August 4, 2023 Balance at May 5, 2023 $ 12 $ 4 $ 16 Other comprehensive income before reclassifications 15 — 15 Amounts reclassified from accumulated other comprehensive income (6) — (6) Income tax impact (2) — (2) Net other comprehensive income 7 — 7 Balance at August 4, 2023 $ 19 $ 4 $ 23 Three months ended July 29, 2022 Balance at April 29, 2022 $ (1) $ 1 $ — Other comprehensive loss before reclassifications (8) — (8) Amounts reclassified from accumulated other comprehensive loss 4 — 4 Income tax impact 1 — 1 Net other comprehensive loss (3) — (3) Balance at July 29, 2022 $ (4) $ 1 $ (3) Six months ended August 4, 2023 Balance at February 3, 2023 $ 18 $ 4 $ 22 Other comprehensive income before reclassifications 13 — 13 Amounts reclassified from accumulated other comprehensive income (12) — (12) Income tax impact — — — Net other comprehensive income 1 — 1 Balance at August 4, 2023 $ 19 $ 4 $ 23 Six months ended July 29, 2022 Balance at January 28, 2022 $ (38) $ 1 $ (37) Other comprehensive income before reclassifications 34 — 34 Amounts reclassified from accumulated other comprehensive loss 12 — 12 Income tax impact (12) — (12) Net other comprehensive income 34 — 34 Balance at July 29, 2022 $ (4) $ 1 $ (3) (1) The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense. |
Sale of Receivables (Notes)
Sale of Receivables (Notes) | 6 Months Ended |
Aug. 04, 2023 | |
Receivables [Abstract] | |
Sales of Receivables | Sales of Receivables: The Company has a Master Accounts Receivable Purchase Agreement (MARPA Facility) with MUFG Bank, Ltd. (the Purchaser) for the sale of up to a maximum amount of $300 million of certain designated eligible receivables with the U.S. government. During the six months ended August 4, 2023 and July 29, 2022, the Company incurred purchase discount fees of $5 million and $2 million, respectively, which are presented in other (income) expense, net on the condensed and consolidated statements of income and are reflected as cash flows from operating activities on the condensed and consolidated statements of cash flows. MARPA Facility activity consisted of the following: Six Months Ended August 4, July 29, (in millions) Beginning balance $ 250 $ 200 Sale of receivables 1,425 2,010 Cash collections (1,425) (1,950) Outstanding balance sold to Purchaser (1) 250 260 Cash collected, not remitted to Purchaser (2) (25) (29) Remaining sold receivables $ 225 $ 231 (1) For the six months ended August 4, 2023 there was no net impact to cash flows from operating activities from sold receivables. For the six months ended July 29, 2022, the Company recorded a net increase to cash flows from operating activities of $60 million from sold receivables. |
Legal Proceedings and Other Com
Legal Proceedings and Other Commitments and Contingencies | 6 Months Ended |
Aug. 04, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Proceedings and Other Commitments and Contingencies | Legal Proceedings and Other Commitments and Contingencies: Legal Proceedings The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. A vendor used by the Company to audit employee retirement benefits confirmed to the Company on August 4, 2023, that it had experienced a cybersecurity incident related to MOVEit software, a commonly used secure file transfer application. The vendor indicated that the incident may have resulted in the personal information of certain employees and former employees of the Company being accessed by an unauthorized third party. The vendor and the Company have conducted a review of the incident and the vendor has undertaken remedial measures including credit monitoring at its expense. At this time, the Company has not experienced and does not anticipate any material impact on its ongoing operations, financial condition or results of operations as a direct result of this incident. This disclosure should be read in conjunction with "Risk Factors" in Part I of the most recently filed Annual Report on Form 10-K. 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 Defense Contract Audit Agency (DCAA), the Defense Contract Management Agency and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review the adequacy of the contractor’s compliance with government standards for its business systems. Adverse findings in these investigations, audits, or reviews can lead to criminal, civil or administrative proceedings, and the Company could face disallowance of previously billed costs, penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. Due to the Company’s reliance on government contracts, adverse findings could also have a material impact on the Company’s business, including its financial position, results of operations and cash flows. The indirect cost audits by the DCAA of the Company’s business remain open for certain prior years and the current year. Although the Company has recorded contract revenues based on an estimate of costs that the Company believes will be approved on final audit, the Company does not know the outcome of any ongoing or future audits. If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected. As of August 4, 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 U.S. government Cost Accounting Standards. Letters of Credit and Surety Bonds |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | |
Pay vs Performance Disclosure | ||||
Net income | $ 247 | $ 73 | $ 345 | $ 146 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Aug. 04, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Business Overview and Summary_2
Business Overview and Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Aug. 04, 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. The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes. Each of the Company’s two customer facing operating sectors is focused on providing both (1) growth and technology accelerating solutions and (2) core 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 service offerings include systems engineering and the operation and maintenance of existing IT systems and networks. |
Basis of Presentation | The accompanying financial information was prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). |
Consolidation | All intercompany transactions and account balances within the Company have been eliminated. |
Use of Estimates | The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates. |
Reporting Periods | The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2024 began on February 4, 2023 and ends on February 2, 2024, while fiscal 2023 began on January 29, 2022 and ended on February 3, 2023. |
Operating Cycle | The Company’s operating cycle may be greater than one year and is measured by the average time intervening between the inception and the completion of contracts. |
Derivative Instruments Designated as Cash Flow Hedges | Derivative instruments are recorded on the condensed and consolidated balance sheets at fair value. Unrealized gains and losses on derivatives designated as cash flow hedges are reported in other comprehensive income (loss) and reclassified to earnings in a manner that matches the timing of the earnings impact of the hedged transactions. The Company’s fixed interest rate swaps are considered over-the-counter derivatives, and fair value is calculated using a standard pricing model for interest rate swaps with contractual terms for maturities, amortization and interest rates. Level 2, or market observable inputs (such as yield and credit curves), are used within the standard pricing models in order to determine fair value. The fair value is an estimate of the amount that the Company would pay or receive as of a measurement date if the agreements were transferred to a third party. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges. |
Marketable Securities | Investments in marketable securities consist of equity securities, which are recorded at fair value using observable inputs such as quoted prices in active markets (Level 1). As of August 4, 2023 and February 3, 2023, the fair value of the Company's investments totaled $30 million and $28 million, respectively, and are included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund its deferred compensation plan liabilities. |
Business Combinations Policy | Acquisition and Integration Costs Acquisition-related costs that are not part of the purchase price consideration are generally expensed as incurred, except for certain costs that are deferred in connection with the issuance of debt. These costs typically include transaction-related costs, such as finder’s fees, legal, accounting, and other professional costs. Integration-related costs represent costs directly related to combining the Company and its acquired businesses. Integration-related costs typically include strategic consulting services, facility consolidations, employee related costs, such as retention and severance, costs to integrate information technology infrastructure, enterprise planning systems, processes, and other non-recurring integration-related costs. Acquisition and integration costs are presented together as acquisition and integration costs on the condensed and consolidated statements of income. |
Investment in Equity Securities, Policy | The Company invests in certain companies that advance or develop new technologies applicable to its business. The Company also occasionally forms joint ventures as a part of its investment strategy for the purpose of bidding and executing on specific projects. Each investment is evaluated for consolidation under the variable interest entities (VIEs) model and/or the voting interest model. The results of these investments are not material to the unaudited condensed and consolidated financial statements for the periods presented. The Company applies the equity method of accounting to its unconsolidated investments when it has the ability to exercise significant influence over the entity and recognizes its proportionate share of the entities’ net income or loss within other operating income on the condensed and consolidated statements of income. Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost or cost net of other-than-temporary impairments. |
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 adopted the requirements of ASU 2022-04 effective the first day of fiscal 2024. |
Earnings Per Share | Basic EPS is computed by dividing net income attributable to common stockholders by the basic weighted-average number of shares outstanding. Diluted EPS is computed similarly to basic EPS, except the weighted-average number of shares outstanding is increased to include the dilutive effect of outstanding stock options and other stock-based awards. |
Change in Estimates and Disaggregation of Revenues | Changes in Estimates on Contracts Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can occur routinely over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. A significant portion 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. 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. |
Business Overview and Summary_3
Business Overview and Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Aug. 04, 2023 | |
Accounting Policies [Abstract] | |
Reconciliation of Cash, Cash Equivalents and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported on the condensed and consolidated balance sheets for the periods presented: August 4, February 3, (in millions) Cash and cash equivalents $ 352 $ 109 Restricted cash included in inventory, prepaid expenses and other current assets 5 5 Restricted cash included in other assets 4 4 Cash, cash equivalents and restricted cash $ 361 $ 118 |
Earnings Per Share, Share Rep_2
Earnings Per Share, Share Repurchases and Dividends (Tables) | 6 Months Ended |
Aug. 04, 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: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions) Basic weighted-average number of shares outstanding 53.5 55.6 53.9 55.9 Dilutive common share equivalents - stock options and other stock-based awards 0.4 0.3 0.4 0.4 Diluted weighted-average number of shares outstanding 53.9 55.9 54.3 56.3 |
Revenues (Tables)
Revenues (Tables) | 6 Months Ended |
Aug. 04, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregated Revenues | Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions, except per share amounts) Net (unfavorable) favorable adjustments $ (1) $ 5 $ 4 $ 10 Net (unfavorable) favorable adjustments, after tax (1) 4 3 8 Diluted EPS impact $ (0.02) $ 0.07 $ 0.06 $ 0.14 Disaggregated revenues by customer were as follows: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions) Department of Defense $ 919 $ 884 $ 1,990 $ 1,830 Other federal government agencies 828 911 1,748 1,924 Commercial, state and local 37 36 74 73 Total $ 1,784 $ 1,831 $ 3,812 $ 3,827 Disaggregated revenues by contract type were as follows: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions) Cost reimbursement $ 1,105 $ 1,035 $ 2,217 $ 2,130 Time and materials (T&M) 358 328 725 714 Firm-fixed price (FFP) 321 468 870 983 Total $ 1,784 $ 1,831 $ 3,812 $ 3,827 Disaggregated revenues by prime versus subcontractor were as follows: Three Months Ended Six Months Ended August 4, July 29, August 4, July 29, (in millions) Prime contractor to federal government $ 1,591 $ 1,665 $ 3,446 $ 3,487 Subcontractor to federal government 156 130 292 267 Other 37 36 74 73 Total $ 1,784 $ 1,831 $ 3,812 $ 3,827 |
Contract Related Assets and Liabilities | Contract balances for the periods presented were as follows: Balance Sheet line item August 4, February 3, (in millions) Billed and billable receivables, net (1) Receivables, net $ 608 $ 572 Contract assets - unbillable receivables Receivables, net 350 364 Contract assets - contract retentions Other assets 14 15 Contract liabilities - current Accounts payable and accrued liabilities 45 48 Contract liabilities - non-current Other long-term liabilities $ 3 $ 4 (1) Net of allowance of $4 million as of August 4, 2023 and February 3, 2023. |
Divestitures (Tables)
Divestitures (Tables) | 6 Months Ended |
Aug. 04, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Disclosure of Long-Lived Assets Held-for-Sale | The major classes of assets and liabilities divested were as follows: (in millions) Assets: Receivables, net $ 46 Inventory, prepaid expenses and other current assets 73 Goodwill 60 Operating lease right of use assets 2 Total assets divested $ 181 Liabilities: Accounts payable and accrued liabilities $ 63 Accrued payroll and employee benefits 1 Operating lease liabilities 1 Total liabilities divested $ 65 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets (Tables) | 6 Months Ended |
Aug. 04, 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: August 4, 2023 February 3, 2023 Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value (in millions) Customer relationships $ 1,462 $ (518) $ 944 $ 1,467 $ (466) $ 1,001 Developed technology 10 (3) 7 10 (2) 8 Trade name 1 (1) — 1 (1) — Total intangible assets $ 1,473 $ (522) $ 951 $ 1,478 $ (469) $ 1,009 |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | As of August 4, 2023, the estimated future annual amortization expense related to intangible assets is as follows: Fiscal Year (in millions) Remainder of 2024 $ 57 2025 115 2026 115 2027 115 2028 98 Thereafter 451 Total $ 951 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 6 Months Ended |
Aug. 04, 2023 | |
Debt Disclosure [Abstract] | |
Long-term Debt | The Company’s long-term debt as of the dates presented was as follows: August 4, 2023 February 3, 2023 Stated Effective Principal Unamortized Net Principal Unamortized Net (dollars in millions) Term Loan A Facility due June 2027 6.42 % 6.54 % $ 1,230 $ (4) $ 1,226 $ 1,230 $ (5) $ 1,225 Term Loan B Facility due October 2025 7.29 % 7.50 % 424 (2) 422 488 (3) 485 Term Loan B2 Facility due March 2027 7.29 % 7.73 % 236 (3) 233 272 (4) 268 Senior Notes due April 2028 4.88 % 5.11 % 400 (4) 396 400 (4) 396 Total long-term debt $ 2,290 $ (13) $ 2,277 $ 2,390 $ (16) $ 2,374 Less current portion 62 — 62 31 — 31 Total long-term debt, net of current portion $ 2,228 $ (13) $ 2,215 $ 2,359 $ (16) $ 2,343 |
Schedule of Maturities of Long-term Debt | Maturities of long-term debt as of August 4, 2023 are: Fiscal Year Total (in millions) Remainder of 2024 $ 31 2025 77 2026 532 2027 123 2028 1,127 Thereafter 400 Total principal payments $ 2,290 |
Derivative Instruments Design_2
Derivative Instruments Designated as Cash Flow Hedges (Tables) | 6 Months Ended |
Aug. 04, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | The Company’s derivative instruments designated as cash flow hedges consist of: Fair Value of Asset (1) at Notional Amount at August 4, 2023 Pay Fixed Receive Settlement and August 4, February 3, 2023 (in millions) (in millions) Interest rate swaps #1 $ 685 2.96 % Term SOFR Monthly through October 31, 2025 $ 23 $ 16 Interest rate swaps #2 450 2.36 % Term SOFR Monthly through October 31, 2023 3 9 Total $ 1,135 $ 26 $ 25 (1) The fair value of the fixed interest rate swap asset is included in other assets on the condensed and consolidated balance sheets. |
Changes in Accumulated Other _2
Changes in Accumulated Other Comprehensive Income by Component (Tables) | 6 Months Ended |
Aug. 04, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following table presents the changes in accumulated other comprehensive income (loss) attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8 and the Company's defined benefit plans. Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges (1) Defined Benefit Total (in millions) Three months ended August 4, 2023 Balance at May 5, 2023 $ 12 $ 4 $ 16 Other comprehensive income before reclassifications 15 — 15 Amounts reclassified from accumulated other comprehensive income (6) — (6) Income tax impact (2) — (2) Net other comprehensive income 7 — 7 Balance at August 4, 2023 $ 19 $ 4 $ 23 Three months ended July 29, 2022 Balance at April 29, 2022 $ (1) $ 1 $ — Other comprehensive loss before reclassifications (8) — (8) Amounts reclassified from accumulated other comprehensive loss 4 — 4 Income tax impact 1 — 1 Net other comprehensive loss (3) — (3) Balance at July 29, 2022 $ (4) $ 1 $ (3) Six months ended August 4, 2023 Balance at February 3, 2023 $ 18 $ 4 $ 22 Other comprehensive income before reclassifications 13 — 13 Amounts reclassified from accumulated other comprehensive income (12) — (12) Income tax impact — — — Net other comprehensive income 1 — 1 Balance at August 4, 2023 $ 19 $ 4 $ 23 Six months ended July 29, 2022 Balance at January 28, 2022 $ (38) $ 1 $ (37) Other comprehensive income before reclassifications 34 — 34 Amounts reclassified from accumulated other comprehensive loss 12 — 12 Income tax impact (12) — (12) Net other comprehensive income 34 — 34 Balance at July 29, 2022 $ (4) $ 1 $ (3) (1) The amount reclassified from accumulated other comprehensive income (loss) is included in interest expense. |
Sale of Receivables (Tables)
Sale of Receivables (Tables) | 6 Months Ended |
Aug. 04, 2023 | |
Receivables [Abstract] | |
Transfers Of Financial Assets Accounted For As Sales, Marpa | MARPA Facility activity consisted of the following: Six Months Ended August 4, July 29, (in millions) Beginning balance $ 250 $ 200 Sale of receivables 1,425 2,010 Cash collections (1,425) (1,950) Outstanding balance sold to Purchaser (1) 250 260 Cash collected, not remitted to Purchaser (2) (25) (29) Remaining sold receivables $ 225 $ 231 (1) For the six months ended August 4, 2023 there was no net impact to cash flows from operating activities from sold receivables. For the six months ended July 29, 2022, the Company recorded a net increase to cash flows from operating activities of $60 million from sold receivables. |
Business Overview and Summary_4
Business Overview and Summary of Significant Accounting Policies - Narrative (Detail) $ in Millions | 3 Months Ended | 6 Months Ended | |||
Aug. 04, 2023 USD ($) | Jul. 29, 2022 USD ($) | Aug. 04, 2023 USD ($) segment | Jul. 29, 2022 USD ($) | Feb. 03, 2023 USD ($) | |
Accounting Policies [Abstract] | |||||
Number of operating segments | segment | 2 | ||||
Number of reportable segments | segment | 1 | ||||
Operating cycle (greater than) | 1 year | ||||
Marketable securities | $ 30 | $ 30 | $ 28 | ||
Acquisition costs | $ (1) | ||||
Integration costs | 1 | $ 1 | 1 | 11 | |
Restructuring charges | $ 5 | $ 2 | $ 6 | $ 2 |
Business Overview and Summary_5
Business Overview and Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Millions | Aug. 04, 2023 | Feb. 03, 2023 | Jul. 29, 2022 | Jan. 28, 2022 |
Accounting Policies [Abstract] | ||||
Cash and cash equivalents | $ 352 | $ 109 | ||
Restricted cash included in inventory, prepaid expenses and other current assets | 5 | 5 | ||
Restricted cash included in other assets | 4 | 4 | ||
Cash, cash equivalents and restricted cash | $ 361 | $ 118 | $ 108 | $ 115 |
Earnings Per Share, Share Rep_3
Earnings Per Share, Share Repurchases and Dividends - Reconciliation of Weighted Average Number of Shares Outstanding Used to Compute Basic and Diluted EPS (Details) - shares shares in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | |
Earnings Per Share [Abstract] | ||||
Basic weighted-average number of shares outstanding (in shares) | 53.5 | 55.6 | 53.9 | 55.9 |
Dilutive common share equivalents - stock options and other stock-based awards (in shares) | 0.4 | 0.3 | 0.4 | 0.4 |
Diluted weighted-average number of shares outstanding (in shares) | 53.9 | 55.9 | 54.3 | 56.3 |
Earnings Per Share, Share Rep_4
Earnings Per Share, Share Repurchases and Dividends (Detail) - $ / shares | 3 Months Ended | 6 Months Ended | ||||
Sep. 06, 2023 | Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | Jun. 21, 2022 | |
Computation Of Earnings Per Share [Line Items] | ||||||
Cash dividends declared per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 0.74 | $ 0.74 | ||
Cash dividends paid per share (in dollars per share) | $ 0.37 | $ 0.37 | $ 0.74 | $ 0.74 | ||
Employee Stock | ||||||
Computation Of Earnings Per Share [Line Items] | ||||||
Antidilutive stock options excluded (in shares) | 0 | 0 | ||||
Stock Repurchase Plan | ||||||
Computation Of Earnings Per Share [Line Items] | ||||||
Increase in number of shares authorized to be repurchased under the repurchase plan (in shares) | 8,000,000 | |||||
Shares repurchased under the repurchase plan (in shares) | 18,700,000 | |||||
Stock Repurchase Plan | Maximum | ||||||
Computation Of Earnings Per Share [Line Items] | ||||||
Authorized shares to be repurchased (in shares) | 24,400,000 | |||||
Subsequent Event | ||||||
Computation Of Earnings Per Share [Line Items] | ||||||
Cash dividends declared per share (in dollars per share) | $ 0.37 |
Revenues - Change in Estimates
Revenues - Change in Estimates (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Net (unfavorable) favorable adjustments | $ 362 | $ 125 | $ 519 | $ 250 |
Net income | $ 247 | $ 73 | $ 345 | $ 146 |
Diluted (in dollars per share) | $ 4.56 | $ 1.30 | $ 6.35 | $ 2.59 |
Contract with customer, performance obligation satisfied in previous period | $ 1 | $ 5 | $ 4 | $ 9 |
Change in Accounting Method Accounted for as Change in Estimate | ||||
Disaggregation of Revenue [Line Items] | ||||
Net (unfavorable) favorable adjustments | (1) | 5 | 4 | 10 |
Net income | $ (1) | $ 4 | $ 3 | $ 8 |
Diluted (in dollars per share) | $ (0.02) | $ 0.07 | $ 0.06 | $ 0.14 |
Revenues - Disaggregation of Re
Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | |
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 1,784 | $ 1,831 | $ 3,812 | $ 3,827 |
Prime contractor to federal government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,591 | 1,665 | 3,446 | 3,487 |
Subcontractor to federal government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 156 | 130 | 292 | 267 |
Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 37 | 36 | 74 | 73 |
Cost reimbursement | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 1,105 | 1,035 | 2,217 | 2,130 |
Time and materials (T&M) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 358 | 328 | 725 | 714 |
Firm-fixed price (FFP) | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 321 | 468 | 870 | 983 |
Department of Defense | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 919 | 884 | 1,990 | 1,830 |
Other federal government agencies | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | 828 | 911 | 1,748 | 1,924 |
Commercial, state and local | ||||
Disaggregation of Revenue [Line Items] | ||||
Total revenues | $ 37 | $ 36 | $ 74 | $ 73 |
Revenues - Narrative (Details)
Revenues - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Contract with customer, performance obligation satisfied in previous period | $ 1 | $ 5 | $ 4 | $ 9 |
Revenue recognized | 12 | 8 | 33 | $ 35 |
Remaining performance obligation | 5,000 | 5,000 | ||
Revenue from exercise of purchase options | $ 23 | |||
Lease income | $ 0 | $ 0 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-29 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue, remaining performance obligation (percent) | 85% | 85% | ||
Revenue, remaining performance obligation, period | 12 months | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-10-29 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Revenue, remaining performance obligation (percent) | 95% | 95% | ||
Revenue, remaining performance obligation, period | 24 months | 24 months |
Revenues - Contract Related Ass
Revenues - Contract Related Assets and Liabilities (Details) - USD ($) $ in Millions | Aug. 04, 2023 | Feb. 03, 2023 |
Disaggregation of Revenue [Line Items] | ||
Allowance for doubtful accounts | $ 4 | $ 4 |
Receivables, net | ||
Disaggregation of Revenue [Line Items] | ||
Billed and billable receivables, net | 608 | 572 |
Contract assets | 350 | 364 |
Accounts payable and accrued liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities - current | 45 | 48 |
Other long-term liabilities | ||
Disaggregation of Revenue [Line Items] | ||
Contract liabilities - non-current | 3 | 4 |
Contract retentions | Other assets | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 14 | $ 15 |
Divestitures (Details)
Divestitures (Details) - USD ($) $ in Millions | 3 Months Ended | |||
May 06, 2023 | Aug. 04, 2023 | Feb. 04, 2023 | Feb. 03, 2023 | |
Schedule of Equity Method Investments [Line Items] | ||||
Retained investment to a fair value | $ 14 | |||
Gain included in other operating income | $ 7 | |||
Cash proceeds | $ 356 | |||
Cash received at closing | 355 | |||
Preliminary pre-tax gain | 233 | |||
Transaction costs | $ 7 | |||
Forfeiture Support Associates J.V. | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Ownership interest sold by parent | 0.10% | |||
Noncontrolling interest, parent ownership | 50.10% |
Divestitures - Disclosure of Lo
Divestitures - Disclosure of Long-Lived Assets Held-For-Sale (Details) $ in Millions | Aug. 04, 2023 USD ($) |
Disposal Group, Not Discontinued Operation, Disposal Disclosures [Abstract] | |
Receivables, net | $ 46 |
Inventory, prepaid expenses and other current assets | 73 |
Goodwill | 60 |
Operating lease right of use assets | 2 |
Total assets divested | 181 |
Accounts payable and accrued liabilities | 63 |
Accrued payroll and employee benefits | 1 |
Operating lease liabilities | 1 |
Total liabilities divested | $ 65 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | Feb. 03, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||||
Goodwill | $ 2,851,000,000 | $ 2,851,000,000 | $ 2,911,000,000 | ||
Increase (decrease) in goodwill | (60,000,000) | ||||
Goodwill impairment | 0 | $ 0 | |||
Amortization of intangible assets | $ 29,000,000 | $ 32,000,000 | 58,000,000 | 65,000,000 | |
Impairment of intangible assets | $ 0 | $ 0 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets Intangible Assets (Details) - USD ($) $ in Millions | Aug. 04, 2023 | Feb. 03, 2023 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | $ 1,473 | $ 1,478 |
Accumulated amortization | (522) | (469) |
Net carrying value | 951 | 1,009 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 1,462 | 1,467 |
Accumulated amortization | (518) | (466) |
Net carrying value | 944 | 1,001 |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 10 | 10 |
Accumulated amortization | (3) | (2) |
Net carrying value | 7 | 8 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross carrying value | 1 | 1 |
Accumulated amortization | (1) | (1) |
Net carrying value | $ 0 | $ 0 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets Intangible Assets Amortization (Details) - USD ($) $ in Millions | Aug. 04, 2023 | Feb. 03, 2023 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Remainder of 2024 | $ 57 | |
2025 | 115 | |
2026 | 115 | |
2027 | 115 | |
2028 | 98 | |
Thereafter | 451 | |
Net carrying value | $ 951 | $ 1,009 |
Income Taxes (Detail)
Income Taxes (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||
Aug. 04, 2023 | May 05, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | Feb. 03, 2023 | |
Income Tax Contingency [Line Items] | ||||||
Effective income tax rate | 26.40% | 21.80% | 24.70% | 21.90% | ||
Liabilities for uncertain tax positions | $ 156 | $ 207 | ||||
Increase to deferred tax assets | 35 | |||||
Other assets | ||||||
Income Tax Contingency [Line Items] | ||||||
Net deferred tax asset | $ 74 | $ 74 | $ 14 |
Debt Obligations - Long-term De
Debt Obligations - Long-term Debt (Detail) - USD ($) $ in Millions | Aug. 04, 2023 | Feb. 03, 2023 |
Debt Instrument [Line Items] | ||
Principal | $ 2,290 | $ 2,390 |
Unamortized debt issuance costs | (13) | (16) |
Net | 2,277 | 2,374 |
Less current portion | 62 | 31 |
Unamortized debt issuance costs, current portion | 0 | 0 |
Principal amount of long-term debt, net of current portion | 2,228 | 2,359 |
Unamortized debt issuance costs, total long-term debt, net of current portion | (13) | (16) |
Total long-term debt, net of current portion | $ 2,215 | 2,343 |
Term Loan A Facility due June 2027 | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 6.42% | |
Effective interest rate | 6.54% | |
Principal | $ 1,230 | 1,230 |
Unamortized debt issuance costs | (4) | (5) |
Net | $ 1,226 | 1,225 |
Term Loan B Facility Due October Two Thousand Twenty Five | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 7.29% | |
Effective interest rate | 7.50% | |
Principal | $ 424 | 488 |
Unamortized debt issuance costs | (2) | (3) |
Net | $ 422 | 485 |
Term Loan B2 Facility Due March Two Thousand Twenty Seven | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 7.29% | |
Effective interest rate | 7.73% | |
Principal | $ 236 | 272 |
Unamortized debt issuance costs | (3) | (4) |
Net | $ 233 | 268 |
Senior Notes Due April Two Thousand Twenty Eight | ||
Debt Instrument [Line Items] | ||
Stated interest rate | 4.88% | |
Effective interest rate | 5.11% | |
Principal | $ 400 | 400 |
Unamortized debt issuance costs | (4) | (4) |
Net | $ 396 | $ 396 |
Debt Obligations - Narrative (D
Debt Obligations - Narrative (Detail) | 3 Months Ended | 6 Months Ended |
Aug. 04, 2023 USD ($) | Aug. 04, 2023 USD ($) | |
Term Loan B Facility Due October Two Thousand Twenty Five | ||
Debt Instrument [Line Items] | ||
Repayments of Long-term Debt | $ 64,000,000 | $ 64,000,000 |
Repayments of Long-term Debt | 64,000,000 | 64,000,000 |
Term Loan B2 Facility Due March Two Thousand Twenty Seven | ||
Debt Instrument [Line Items] | ||
Repayments of Long-term Debt | 36,000,000 | 36,000,000 |
Repayments of Long-term Debt | 36,000,000 | 36,000,000 |
Line of Credit [Member] | The Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 2,900,000,000 | 2,900,000,000 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Lines of credit borrowed and repaid | 160,000,000 | |
Revolving Credit Facility | Line of Credit [Member] | The Credit Facility | ||
Debt Instrument [Line Items] | ||
Maximum borrowing capacity | 1,000,000,000 | 1,000,000,000 |
Balance outstanding | $ 0 | $ 0 |
Debt Obligations - Long-term _2
Debt Obligations - Long-term Debt Maturities (Details) - USD ($) $ in Millions | Aug. 04, 2023 | Feb. 03, 2023 |
Debt Disclosure [Abstract] | ||
Remainder of 2024 | $ 31 | |
2025 | 77 | |
2026 | 532 | |
2027 | 123 | |
2028 | 1,127 | |
Thereafter | 400 | |
Total principal payments | $ 2,290 | $ 2,390 |
Derivative Instruments Design_3
Derivative Instruments Designated as Cash Flow Hedges - Schedule of Derivative Instruments (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Aug. 04, 2023 | Feb. 03, 2023 | |
Derivative [Line Items] | ||
Notional amount | $ 1,135 | |
Asset Fair Value | 26 | $ 25 |
Interest rate swaps #1 | Interest Rate Swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 685 | |
Pay Fixed Rate | 2.96% | |
Receive Variable Rate | Term SOFR | |
Settlement and Termination | Monthly through October 31, 2025 | |
Asset Fair Value | $ 23 | 16 |
Interest rate swaps #2 | Interest Rate Swaps | ||
Derivative [Line Items] | ||
Notional amount | $ 450 | |
Pay Fixed Rate | 2.36% | |
Receive Variable Rate | Term SOFR | |
Settlement and Termination | Monthly through October 31, 2023 | |
Asset Fair Value | $ 3 | $ 9 |
Derivative Instruments Design_4
Derivative Instruments Designated as Cash Flow Hedges - Narrative (Detail) $ in Millions | Aug. 04, 2023 USD ($) |
Interest Rate Swaps | |
Derivative [Line Items] | |
Unrealized gains estimated to be reclassified from accumulated other comprehensive income into earnings in the next twelve months | $ 19 |
Changes in Accumulated Other _3
Changes in Accumulated Other Comprehensive Income by Component (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||||||
Aug. 04, 2023 | Jul. 29, 2022 | Aug. 04, 2023 | Jul. 29, 2022 | May 05, 2023 | Feb. 03, 2023 | Apr. 29, 2022 | Jan. 28, 2022 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax | $ 23 | $ (3) | $ 23 | $ (3) | $ 16 | $ 22 | $ 0 | $ (37) |
Other comprehensive income before reclassifications | 15 | (8) | 13 | 34 | ||||
Amounts reclassified from accumulated other comprehensive income | (6) | 4 | (12) | 12 | ||||
Income tax impact | (2) | 1 | 0 | (12) | ||||
Net other comprehensive income | 7 | (3) | 1 | 34 | ||||
Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1) | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax | 19 | (4) | 19 | (4) | 12 | 18 | (1) | (38) |
Other comprehensive income before reclassifications | 15 | (8) | 13 | 34 | ||||
Amounts reclassified from accumulated other comprehensive income | (6) | 4 | (12) | 12 | ||||
Income tax impact | (2) | 1 | 0 | (12) | ||||
Net other comprehensive income | 7 | (3) | 1 | 34 | ||||
Defined Benefit Obligation Adjustment | ||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax | 4 | 1 | 4 | 1 | $ 4 | $ 4 | $ 1 | $ 1 |
Other comprehensive income before reclassifications | 0 | 0 | 0 | 0 | ||||
Amounts reclassified from accumulated other comprehensive income | 0 | 0 | 0 | 0 | ||||
Income tax impact | 0 | 0 | 0 | 0 | ||||
Net other comprehensive income | $ 0 | $ 0 | $ 0 | $ 0 |
Sale of Receivables (Details)
Sale of Receivables (Details) - USD ($) $ in Millions | 6 Months Ended | |||
Aug. 04, 2023 | Jul. 29, 2022 | Feb. 03, 2023 | Jan. 28, 2022 | |
Receivables [Abstract] | ||||
Maximum commitment | $ 300 | |||
Purchase discount fees | 5 | $ 2 | ||
Outstanding balance sold to Purchaser | 250 | 260 | $ 250 | $ 200 |
Sale of receivables | 1,425 | 2,010 | ||
Cash collections | (1,425) | (1,950) | ||
Cash collected, not remitted to Purchaser(2) | (25) | (29) | ||
Remaining sold receivables | $ 225 | 231 | ||
Increase to cash flows from operating activities | $ 60 |
Legal Proceedings and Other C_2
Legal Proceedings and Other Commitments and Contingencies (Detail) $ in Millions | Aug. 04, 2023 USD ($) |
Letters of Credit | |
Commitments And Contingencies [Line Items] | |
Outstanding obligations | $ 9 |
Surety Bonds | |
Commitments And Contingencies [Line Items] | |
Outstanding obligations | $ 19 |