10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________________________________________

Form 10-Q

_________________________________________________________

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended August 2, 2019

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                     

_________________________________________________________

Commission File Number	Exact Name of Registrant as Specified in its Charter, Address of Principal Executive Offices and Telephone Number	State or other jurisdiction of incorporation or organization	I.R.S. Employer Identification No.
001-35832	Science Applications International Corporation	Delaware	46-1932921

 

12010 Sunset Hills Road, Reston, VA 20190

703-676-4300

_________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $.0001 per share	SAIC	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒    No  ☐            

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒ No  ☐            

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐	Non-accelerated filer	☐	Smaller reporting company	☐
						Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒        

The number of shares issued and outstanding of the registrant’s common stock as of August 23, 2019 was as follows:

57,701,393 shares of common stock ($.0001 par value per share)

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

FORM 10-Q

TABLE OF CONTENTS

		Page
Part I	Financial Information
Item 1	Financial Statements	1
	Condensed and Consolidated Statements of Income	1
	Condensed and Consolidated Statements of Comprehensive Income	2
	Condensed and Consolidated Balance Sheets	3
	Condensed and Consolidated Statements of Equity	4
	Condensed and Consolidated Statements of Cash Flows	5
	Notes to Condensed and Consolidated Financial Statements	6
	Note 1—Business Overview and Summary of Significant Accounting Policies	6
	Note 2—Earnings Per Share	8
	Note 3—Revenues	8
	Note 4—Engility Acquisition	10
	Note 5—Stock-Based Compensation	12
	Note 6—Income Taxes	13
	Note 7—Debt Obligations	13
	Note 8—Derivative Instruments Designated as Cash Flow Hedges	14
	Note 9—Changes in Accumulated Other Comprehensive Loss by Component	15
	Note 10—Leases	15
	Note 11—Legal Proceedings and Other Commitments and Contingencies	17
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
Item 3	Quantitative and Qualitative Disclosures About Market Risk	25
Item 4	Controls and Procedures	26
Part II	Other Information	27
Item 1	Legal Proceedings	27
Item 1A	Risk Factors	27
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3	Defaults Upon Senior Securities	27
Item 4	Mine Safety Disclosures	27
Item 5	Other Information	27
Item 6	Exhibits	28
	Signatures	29

-i-

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME

(UNAUDITED)

	Three Months Ended						Six Months Ended
	August 2, 2019			August 3, 2018			August 2, 2019			August 3, 2018
	(in millions, except per share amounts)
Revenues	$	1,594		$	1,115		$	3,209		$	2,290
Cost of revenues	1,409			1,003			2,844			2,077
Selling, general and administrative expenses	82			38			159			73
Acquisition and integration costs (Note 4)	8			—			18			—
Operating income	95			74			188			140
Interest expense	22			10			47			22
Other (income) expense, net	(1		)	—			(3		)	(1		)
Income before income taxes	74			64			144			119
Provision for income taxes (Note 6)	(17		)	(15		)	(31		)	(21		)
Net income	$	57		$	49		$	113		$	98
Net income attributable to non-controlling interest	—			—			1			—
Net income attributable to common stockholders	$	57		$	49		$	112		$	98
Earnings per share (Note 2):
Basic	$	0.97		$	1.15		$	1.90		$	2.31
Diluted	$	0.96		$	1.13		$	1.88		$	2.26

See accompanying notes to condensed and consolidated financial statements.

-1-

Table of Contents

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

	Three Months Ended						Six Months Ended
	August 2, 2019			August 3, 2018			August 2, 2019			August 3, 2018
	(in millions)
Net income	$	57		$	49		$	113		$	98
Other comprehensive loss, net of tax:
Unrealized (loss) gain on derivative instruments, net of tax benefit (expense) of $12 million and $16 million for the three and six months ended August 2, 2019, respectively, and $0 million and $(1) million for the three and six months ended August 3, 2018, respectively	(35		)	—			(45		)	1
Reclassification adjustment for (benefits) costs realized in net income, net of tax expense (benefit) of $0 million and $0 million for the three and six months ended August 2, 2019, respectively, and $0 million and $0 million for the three and six months ended August 3, 2018, respectively	—			(1		)	—			(1		)
Net unrealized loss on derivative instruments	(35		)	(1		)	(45		)	—
Total other comprehensive loss, net of tax	(35		)	(1		)	(45		)	—
Comprehensive income	$	22		$	48		$	68		$	98
Comprehensive income attributable to non-controlling interest	—			—			1			—
Comprehensive income attributable to common stockholders	$	22		$	48		$	67		$	98

See accompanying notes to condensed and consolidated financial statements.

-2-

Table of Contents

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

	August 2, 2019			February 1, 2019
	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	179		$	237
Receivables, net	1,033			1,050
Inventory, prepaid expenses and other current assets	130			146
Total current assets	1,342			1,433
Goodwill	2,120			2,120
Intangible assets (net of accumulated amortization of $127 million and $79 million at August 2, 2019 and February 1, 2019, respectively)	754			803
Property, plant, and equipment (net of accumulated depreciation of $172 million and $159 million at August 2, 2019 and February 1, 2019, respectively)	97			103
Other assets	314			104
Total assets	$	4,627		$	4,563
LIABILITIES AND EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	738		$	632
Accrued payroll and employee benefits	259			241
Long-term debt, current portion (Note 7)	151			24
Total current liabilities	1,148			897
Long-term debt, net of current portion (Note 7)	1,887			2,065
Other long-term liabilities	243			102
Commitments and contingencies (Note 11)
Equity:
Common stock, $.0001 par value, 1 billion shares authorized, 58 million and 60 million shares issued and outstanding as of August 2, 2019 and February 1, 2019, respectively	—			—
Additional paid-in capital	963			1,132
Retained earnings	435			367
Accumulated other comprehensive loss	(59		)	(14		)
Total common stockholders' equity	1,339			1,485
Non-controlling interest	10			14
Total stockholders' equity	1,349			1,499
Total liabilities and stockholders' equity	$	4,627		$	4,563

See accompanying notes to condensed and consolidated financial statements.

-3-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED STATEMENTS OF EQUITY

(UNAUDITED)

	Shares of common stock		Additional paid-in capital			Retained earnings			Accumulated other comprehensive (loss) income			Non-controlling interest			Total
	(in millions)
Balance at May 3, 2019	59		$	1,086		$	400		$	(24	)	$	11		$	1,473
Net income	—		—			57			—			—			57
Issuances of stock	—		3			—			—			—			3
Other comprehensive loss, net of tax	—		—			—			(35		)	—			(35		)
Cash dividends of $0.37 per share	—		—			(22		)	—			—			(22		)
Stock-based compensation	—		9			—			—			—			9
Repurchases of stock	(1	)	(135		)	—			—			—			(135		)
Distributions to non-controlling interest	—		—			—			—			(1		)	(1		)
Balance at August 2, 2019	58		$	963		$	435		$	(59	)	$	10		$	1,349
Balance at February 1, 2019	60		$	1,132		$	367		$	(14	)	$	14		$	1,499
Net income	—		—			112			—			1			113
Issuances of stock	—		6			—			—			—			6
Other comprehensive loss, net of tax	—		—			—			(45		)	—			(45		)
Cash dividends of $0.74 per share	—		—			(44		)	—			—			(44		)
Stock-based compensation	—		5			—			—			—			5
Repurchases of stock	(2	)	(180		)	—			—			—			(180		)
Distributions to non-controlling interest	—		—			—			—			(5		)	(5		)
Balance at August 2, 2019	58		$	963		$	435		$	(59	)	$	10		$	1,349
Balance at May 4, 2018	43		$	—		$	320		$	5		$	—		$	325
Net income	—		—			49			—			—			49
Issuances of stock	—		2			—			—			—			2
Other comprehensive loss, net of tax	—		—			—			(1		)	—			(1		)
Cash dividends of $0.31 per share	—		—			(14		)	—			—			(14		)
Stock-based compensation	—		6			—			—			—			6
Balance at August 3, 2018	43		$	8		$	355		$	4		$	—		$	367
Balance at February 2, 2018	43		$	—		$	323		$	4		$	—		$	327
Cumulative impact from adopting ASC 606 on February 3, 2018	—		—			3			—			—			3
Net income	—		—			98			—			—			98
Issuances of stock	1		4			—			—			—			4
Cash dividends of $0.62 per share	—		—			(27		)	—			—			(27		)
Stock-based compensation	—		4			(9		)	—			—			(5		)
Repurchases of stock	(1	)	—			(33		)	—			—			(33		)
Balance at August 3, 2018	43		$	8		$	355		$	4		$	—		$	367

See accompanying notes to condensed and consolidated financial statements.

-4-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

	Six Months Ended
	August 2, 2019			August 3, 2018
	(in millions)
Cash flows from operating activities:
Net income	$	113		$	98
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	70			22
Deferred income taxes	16			—
Stock-based compensation expense	20			16
Increase (decrease) resulting from changes in operating assets and liabilities:
Receivables	17			(34		)
Inventory, prepaid expenses and other current assets	11			6
Other assets	27			(12		)
Accounts payable and accrued liabilities	21			(36		)
Accrued payroll and employee benefits	18			13
Other long-term liabilities	(40		)	3
Net cash provided by operating activities	273			76
Cash flows from investing activities:
Expenditures for property, plant, and equipment	(14		)	(18		)
Purchases of marketable securities	(22		)	—
Sales of marketable securities	2			—
Other	(3		)	1
Net cash used in investing activities	(37		)	(17		)
Cash flows from financing activities:
Dividend payments to stockholders	(44		)	(27		)
Principal payments on borrowings	(155		)	(17		)
Issuances of stock	5			3
Stock repurchased and retired or withheld for taxes on equity awards	(195		)	(55		)
Proceeds from borrowings	100			—
Debt issuance costs	—			(1		)
Distributions to non-controlling interest	(5		)	—
Net cash used in financing activities	(294		)	(97		)
Net decrease in cash, cash equivalents and restricted cash	(58		)	(38		)
Cash, cash equivalents and restricted cash at beginning of period	246			152
Cash, cash equivalents and restricted cash at end of period (Note 1)	$	188		$	114

 

See accompanying notes to condensed and consolidated financial statements.

-5-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 1—Business Overview and Summary of Significant Accounting Policies:

Overview

Science Applications International Corporation (collectively, with its consolidated subsidiaries, the “Company”) is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S. government. The Company provides engineering and integration services for large, complex projects and offers a broad range of services with a targeted emphasis on higher-end, differentiated technology services. The Company is organized as a matrix comprised of three customer facing operating segments supported by a solutions and technology group. Each of the Company’s three customer facing operating segments is focused on providing the Company’s comprehensive technical and enterprise IT service offerings to one or more agencies of the U.S. federal government. The Company's operating segments are aggregated into one reportable segment for financial reporting purposes.

On January 14, 2019, the Company completed the acquisition of Engility Holdings, Inc. (collectively with its consolidated subsidiaries, "Engility"), which provides increased customer and market access, as well as increased scale in strategic business areas of national interest, such as defense, federal civilian agencies, intelligence and space.

Principles of Consolidation and Basis of Presentation

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. The financial statements are unaudited, but in the opinion of management include all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended February 1, 2019.

Non-controlling Interest. As a result of the acquisition of Engility, the Company holds a 50.1% majority interest in Forfeiture Support Associates J.V. (FSA). The results of operations of FSA are included in the Company's condensed and consolidated statements of income and comprehensive income. The non-controlling interest reported on the condensed and consolidated balance sheets represents the portion of FSA's equity that is attributable to the non-controlling interest.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates.

Reporting Periods

The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2019 began on February 3, 2018 and ended on February 1, 2019, while fiscal 2020 began on February 2, 2019 and ends on January 31, 2020.

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.

-6-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

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 or canceled. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges.

Inventory

Inventory is substantially comprised of finished goods inventory purchased for resale to customers, such as tires and lubricants, and is valued at the lower of cost or net realizable value, generally using the average method. The Company evaluates current inventory against historical and planned usage to estimate the appropriate provision for obsolete inventory.

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 2, 2019 and February 1, 2019, the fair value of our investments total $25 million and $4 million, respectively, and was included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed and consolidated balance sheets for the periods presented:

	August 2, 2019		February 1, 2019
	(in millions)
Cash and cash equivalents	$	179	$	237
Restricted cash included in other assets	9		9
Cash, cash equivalents and restricted cash	$	188	$	246

Accounting Standards Updates

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which supersedes the existing lease accounting standards (Topic 840). Under the new guidance, a lessee will be required to recognize lease assets and lease liabilities for all leases with lease terms in excess of twelve months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as either a finance lease or operating lease. The criteria for distinction between a finance lease and an operating lease are substantially similar to existing lease guidance for capital leases and operating leases. Some changes to lessor accounting have been made to conform and align that guidance with the lessee guidance and other areas within GAAP, such as Revenue from Contracts with Customers (Topic 606). In July 2018, the FASB provided an optional transition method of adoption, permitting entities to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as opposed to the beginning of the earliest period presented in the financial statements.

ASU 2016-02 became effective for the Company in the first quarter of fiscal 2020. The Company adopted the standard using the optional transition method. Accordingly, the prior periods were not recast, and all prior period amounts disclosed are presented under ASC 840. The Company elected certain practical expedients provided under the standard, including the package of practical expedients, which allows entities not to reassess whether existing contracts are or contain leases. Therefore, at adoption, existing leases have been identified using the criteria of ASC 840.

-7-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

As a result of the adoption of the new standard, on February 2, 2019, the Company recognized approximately $169 million of right of use operating assets and $187 million of operating lease liabilities, of which $140 million was noncurrent. The adoption did not have a material impact on retained earnings, the condensed and consolidated statements of income, or the condensed and consolidated statements of cash flows.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software (Subtopic 350-40). ASU 2018-15 becomes effective for the Company in the first quarter of fiscal 2021 and may be adopted either retrospectively or prospectively. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its financial statements.

Other Accounting Standards Updates effective after August 2, 2019 are not expected to have a material effect on the Company’s financial statements.

Note 2—Earnings Per Share:

Basic earnings per share (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.

A reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS was:

	Three Months Ended		Six Months Ended
	August 2, 2019	August 3, 2018	August 2, 2019	August 3, 2018
	(in millions)
Basic weighted-average number of shares outstanding	58.6	42.5	59.0	42.4
Dilutive common share equivalents - stock options and other stock-based awards	0.5	0.7	0.6	0.9
Diluted weighted-average number of shares outstanding	59.1	43.2	59.6	43.3

The following stock-based awards were excluded from the weighted-average number of shares outstanding used to compute diluted EPS:

	Three Months Ended		Six Months Ended
	August 2, 2019	August 3, 2018	August 2, 2019	August 3, 2018
	(in millions)
Antidilutive stock options excluded	0.3	0.1	0.3	0.2

Note 3—Revenues:

Changes in Estimates

Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss.

-8-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Aggregate changes in these estimates increased operating income by $4 million ($0.05 per diluted share) and $12 million ($0.16 per diluted share) for the three and six months ended August 2, 2019, respectively, increased operating income by $2 million ($0.03 per diluted share) for the three months ended August 3, 2018, and decreased operating income by $3 million ($0.05 per diluted share) for the six months ended August 3, 2018. Changes in these estimates increased net income by $3 million and $9 million for the three and six months ended August 2, 2019, respectively. In addition, revenues were $5 million and $14 million higher for the three and six months ended August 2, 2019, 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 vs. subcontractor to the federal government.

Disaggregated revenues by customer were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Department of Defense	$	846	$	678	$	1,710	$	1,424
Other federal government agencies	716		417		1,438		830
Commercial, state and local	32		20		61		36
Total	$	1,594	$	1,115	$	3,209	$	2,290

Disaggregated revenues by contract-type were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Cost reimbursement	$	918	$	532	$	1,839	$	1,065
Time and materials (T&M)	321		295		646		610
Firm-fixed price (FFP)	355		288		724		615
Total	$	1,594	$	1,115	$	3,209	$	2,290

Disaggregated revenues by prime vs. subcontractor were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Prime contractor to federal government	$	1,405	$	1,014	$	2,839	$	2,091
Subcontractor to federal government	157		81		309		163
Other	32		20		61		36
Total	$	1,594	$	1,115	$	3,209	$	2,290

-9-

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Contract Balances

Contract balances for the periods presented were as follows:

	Balance Sheet line item	August 2, 2019		February 1, 2019
		(in millions)
Billed and billable receivables, net(1)	Receivables, net	$	760	$	740
Contract assets - unbillable receivables	Receivables, net	273		310
Contract assets - contract retentions	Other assets	16		13
Contract liabilities - current	Accounts payable and accrued liabilities	34		34
Contract liabilities - non-current	Other long-term liabilities	$	9	$	6

(1) Net of allowance for doubtful accounts of $2 million as of August 2, 2019 and February 1, 2019.

During the six months ended August 2, 2019 and August 3, 2018, the Company recognized revenues of $19 million and $9 million relating to amounts that were included in the opening balance of contract liabilities as of February 1, 2019 and February 3, 2018, respectively. $6 million in revenues were recognized for the three months ended August 2, 2019, relating to amounts that were included in the opening balance of contract liabilities - current as of February 1, 2019.

Deferred Costs

Deferred costs for the periods presented were as follows:

	Balance Sheet line item	August 2, 2019		February 1, 2019
		(in millions)
Pre-contract costs	Inventory, prepaid expenses and other current assets	$	—	$	1
Fulfillment costs - non-current	Other assets	$	13	$	13

Pre-contract costs of $1 million were expensed during the six months ended August 2, 2019 and $2 million were expensed during the three and six months ended August 3, 2018, respectively. Fulfillment costs of $1 million and $2 million were amortized during the three and six months ended August 2, 2019, respectively.

Remaining Performance Obligations

As of August 2, 2019, the Company had $4.2 billion of remaining performance obligations. Remaining performance obligations exclude any variable consideration that is allocated entirely to unsatisfied performance obligations on our supply chain contracts. The Company expects to recognize revenue on approximately 80% of the remaining performance obligations over the next 12 months and approximately 90% over the next 24 months, with the remaining recognized thereafter.

Note 4—Engility Acquisition:

On January 14, 2019, the Company completed the acquisition of Engility Holdings, Inc., a leading provider of integrated solutions and services supporting U.S. government customers in the defense, federal civilian, and intelligence and space communities. This strategic acquisition enables greater market and customer access, particularly in the intelligence and space communities, and enhances the Company's portfolio of capabilities, particularly in the area of systems engineering and integration. The acquisition enables acceleration of revenue growth through increased market and customer access, increased investment capacity, addition of cleared personnel and strategic alignment with key customers. The acquisition also enables increased profitability and cash generation with an improved margin profile and greater financial flexibility for investment and capital deployment.

The acquisition was funded through a combination of SAIC common stock and additional borrowings. At the effective time of the acquisition, each outstanding share of Engility common stock was automatically cancelled and

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

converted into the right to receive 0.45 shares of the Science Applications International Corporation common stock. The Company amended its credit agreement to provide for a new five-year senior secured $1.1 billion term loan facility. SAIC borrowed the entire amount of the term loan facility, the proceeds of which were immediately used to repay Engility's existing credit facility and outstanding notes and to pay fees and expenses associated with the acquisition, with the balance retained by SAIC to be used for general corporate purposes.

The purchase consideration for the acquisition of Engility was as follows:

	(in millions)
Common stock issued to Engility shareholders(1)	$	1,086
Converted vesting stock awards assumed(2)	22
Cash consideration paid to extinguish Engility outstanding debt	1,052
Purchase price	$	2,160

⁽¹⁾  Represents approximately 16.8 million new shares of SAIC common stock issued to Engility shareholders prior to the market opening on January 14, 2019, using the SAIC share price of $65.03 at the close of business on January 11, 2019.

⁽²⁾  Represents the fair value of the converted vesting stock awards assumed attributable to pre-acquisition service.

The purchase price was allocated, on a preliminary basis, among assets acquired and liabilities assumed at fair value on the acquisition date, January 14, 2019, based on the best available information, with the excess purchase price recorded as goodwill. As of August 2, 2019, the Company had not finalized the determination of fair values allocated to various assets and liabilities, including, but not limited to, receivables, other current assets, deferred tax assets, property, plant, and equipment, other accrued liabilities and goodwill. The allocation of the purchase price is subject to change as the Company continues to obtain and assess relevant information that existed as of the acquisition date, including but not limited to, information pertaining to Engility’s historical government compliance accounting practices, legal proceedings, reserves, income taxes, contracts with customers, and pre-acquisition contingencies. The Company expects to have sufficient information available to resolve these items by the fourth quarter of fiscal 2020, which could potentially result in changes in assets or liabilities on Engility’s opening balance sheet and an adjustment to goodwill. The purchase accounting entries were recorded on a preliminary basis as follows:

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

	(in millions)
Cash and cash equivalents	$	51
Receivables	351
Inventories	5
Prepaid expenses	5
Other current assets	15
Property, plant, and equipment	39
Deferred tax assets	91
Other assets	7
Intangible assets	648
Goodwill	1,257
Total assets acquired	2,469
Accounts payable	115
Accrued payroll and other employee benefits	30
Accrued vacation	39
Other accrued liabilities	58
Other long-term liabilities	54
Total liabilities assumed	296
Non-controlling interest	13
Net assets acquired	$	2,160
Amount of tax deductible goodwill	$	441

Goodwill represents intellectual capital and an acquired assembled work force. The Company inherited Engility's historical tax basis in deductible goodwill, certain other intangible assets, and net operating loss carryforwards.

The following table summarizes the fair value of intangible assets and the related weighted-average useful lives:

	Amount		Weighted-Average Amortization Period
	(in millions)		(in years)
Backlog	$	30	1
Developed technology	2		10
Customer relationships	616		14
Total intangible assets	$	648	13

The Company incurred $136 million in costs associated with the acquisition and integration of Engility. Acquisition-related expenses, all of which were incurred in fiscal year 2019, were $63 million including $31 million of debt issue costs, and $2 million in stock issue costs.

For the three and six months ended August 2, 2019, the Company incurred $8 million and $18 million, respectively, of costs in connection with the integration of Engility, primarily for strategic consulting services, severance costs, and other integration-related costs. The Company did not incur any acquisition and integration costs for the three and six months ended August 3, 2018. These costs are included in acquisition and integration costs on the condensed and consolidated statements of income.

Note 5—Stock-Based Compensation:

Stock Options

During the six months ended August 2, 2019, the Company granted certain employees 0.1 million stock options with a weighted-average exercise price and weighted-average grant date fair value of $75.43 and $16.82, respectively. These options will expire on the seventh anniversary of the grant date and will vest ratably on each anniversary of the grant date over a three-year period.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Restricted Stock Units (RSUs)

During the six months ended August 2, 2019, the Company granted certain employees 0.4 million RSUs with a weighted-average grant date fair value of $75.34, which will vest ratably on each anniversary of the grant date over a three-year period.

Performance Shares

During the six months ended August 2, 2019, the Company granted to certain employees 0.1 million performance share awards with a grant date fair value of $79.04 per award. These awards will cliff vest at the end of the third fiscal year following the grant date, subject to meeting the minimum service requirements and the achievement of certain annual and cumulative financial metrics of the Company’s performance, with the number of shares ultimately issued, if any, ranging up to 150% of the specified target shares.

Note 6—Income Taxes:

The Company's effective income tax rate was 23.3% and 21.6% for the three and six months ended August 2, 2019, respectively, and 23.1% and 17.2% for the three and six months ended August 3, 2018, respectively. The Company's effective tax rate was higher for the six months ended August 2, 2019 compared to the prior year period due principally to lower excess tax benefits related to employee share-based compensation. Tax rates for the periods ended August 2, 2019 were lower than the combined federal and state statutory rates due principally to excess tax benefits related to employee share-based compensation, research and development credits, partially offset by permanent book tax differences.

As of August 2, 2019, the balance of unrecognized tax benefits included liabilities for uncertainty in income taxes of $14 million, which is classified as other long-term liabilities on the condensed and consolidated balance sheets. Of this balance, $12 million, if recognized, would impact the effective income tax rate for the Company. While the

Company believes it has adequate accruals for uncertainty in income taxes, the tax authorities, on review of the Company’s tax filings, 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. Although the timing of such reviews is not certain, we believe it is reasonably possible that $2 million to $4 million of unrecognized tax benefits will reverse in the next 12 months due to the resolution of a tax authority examination and approximately $2 million as a result of statute of limitations expirations, along with associated interest and penalties.

Note 7—Debt Obligations:

The Company’s long-term debt as of the dates presented was as follows:

	August 2, 2019											February 1, 2019
	Stated interest rate		Effective interest rate		Principal		Unamortized debt issuance costs			Net		Principal		Unamortized debt issuance costs			Net
					(in millions)
Term Loan A Facility due October 2023	3.73	%	4.07	%	$	918	$	(10	)	$	908	$	1,068	$	(14	)	$	1,054
Term Loan B Facility due October 2025	3.98	%	4.19	%	1,042		(12		)	1,030		1,047		(12		)	1,035
Revolving Credit Facility due October 2023	3.86	%			100		—			100		—		—			—
Total long-term debt					$	2,060	$	(22	)	$	2,038	$	2,115	$	(26	)	$	2,089
Less current portion					151		—			151		24		—			24
Total long-term debt, net of current portion					$	1,909	$	(22	)	$	1,887	$	2,091	$	(26	)	$	2,065

As of August 2, 2019, the Company has a $2.4 billion credit facility (the Credit Facility) consisting of a $400 million secured Revolving Credit Facility with an available capacity of $300 million for additional borrowings, a $918 million secured Term Loan A Facility, and a $1,042 million secured Term Loan B Facility (together, the Term Loan Facilities). As of August 2, 2019, the outstanding principal under the Revolving Credit Facility was classified as

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

current portion of long-term debt on the condensed and consolidated balance sheets. Subsequent to quarter end, the Company repaid $50 million on the Revolving Credit Facility.

As of August 2, 2019, the Company was in compliance with the covenants under its Credit Facility.

As of August 2, 2019 and February 1, 2019, 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.

Note 8—Derivative Instruments Designated as Cash Flow Hedges:

The Company’s derivative instruments designated as cash flow hedges consist of:

							Liability Fair Value(1) at
	Notional Amount at August 2, 2019		Pay Fixed Rate		Receive Variable Rate	Settlement and Termination	August 2, 2019			February 1, 2019
	(in millions)						(in millions)
Interest rate swaps #1	$	328	2.78	%	1-month LIBOR	Monthly through July 30, 2021	$	(6	)	$	(2	)
Interest rate swaps #2	500		3.07	%	1-month LIBOR	Monthly through October 31, 2025	(56		)	(21		)
Interest rate swaps #3	525		2.49	%	1-month LIBOR	Monthly through October 31, 2023	(21		)	(1		)
Total	$	1,353					$	(83	)	$	(24	)

⁽¹⁾  The fair value of the fixed interest rate swaps liability is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate debt. The counterparties to all swap agreements are financial institutions. See Note 9 for the unrealized change in fair values on cash flow hedges recognized in other comprehensive loss and the amounts reclassified from accumulated other comprehensive loss into earnings for the current and comparative periods presented. The Company estimates that it will reclassify $10 million of unrealized losses from accumulated other comprehensive loss into earnings in the twelve months following August 2, 2019.

On October 31, 2018, the Company exited one of its interest rate swaps and discontinued hedge accounting. The Company received cash proceeds of $6 million upon the early settlement. The $6 million of deferred gains in accumulated other comprehensive loss will be reclassified into interest expense over the original contractual term of the interest rate swaps, which has a maturity date of May 7, 2020.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Note 9—Changes in Accumulated Other Comprehensive Loss by Component:

The following table presents the changes in accumulated other comprehensive loss attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8.

	Pre-Tax Amount
	Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1)
	(in millions)
Three months ended August 2, 2019
Balance at May 3, 2019	$	(33	)
Other comprehensive loss before reclassifications	(47		)
Amounts reclassified from accumulated other comprehensive loss	—
Net other comprehensive loss	(47		)
Balance at August 2, 2019	$	(80	)
Three months ended August 3, 2018
Balance at May 4, 2018	$	7
Other comprehensive income before reclassifications	—
Amounts reclassified from accumulated other comprehensive income	(1		)
Net other comprehensive loss	(1		)
Balance at August 3, 2018	$	6
Six months ended August 2, 2019
Balance at February 1, 2019	$	(19	)
Other comprehensive loss before reclassifications	(61		)
Amounts reclassified from accumulated other comprehensive loss	—
Net other comprehensive loss	(61		)
Balance at August 2, 2019	$	(80	)
Six months ended August 3, 2018
Balance at February 2, 2018	$	5
Other comprehensive income before reclassifications	2
Amounts reclassified from accumulated other comprehensive income	(1		)
Net other comprehensive income	1
Balance at August 3, 2018	$	6

⁽¹⁾  The amount reclassified from accumulated other comprehensive loss is included in interest expense.

Note 10—Leases:

The Company occupies most of its facilities under operating leases. Certain equipment also is leased under short-term or cancelable operating leases.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Effective upon the adoption of ASU 2016-02, 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 facility leases with original terms of 12 months or less. ROU assets are evaluated for impairment as a long-lived asset.

Total operating lease cost is comprised of the following:

		Three Months Ended			Six Months Ended
	Income Statement line item(s)	August 2, 2019			August 2, 2019
		(in millions)
Operating lease cost	Cost of revenues and selling, general and administrative expenses	$	17		$	33
Variable lease cost	Cost of revenues and selling, general and administrative expenses	3			7
Short-term lease cost	Cost of revenues and selling, general and administrative expenses	1			2
Sublease income	Cost of revenues and selling, general and administrative expenses	(1		)	(2		)
Total lease cost		$	20		$	40

The Company's ROU assets and lease liabilities consisted of the following:

	Balance Sheet line item	August 2, 2019
		(in millions)
Operating lease ROU asset	Other assets	$	184
Operating lease current liability	Accounts payable and accrued liabilities	43
Operating lease non-current liability	Other long-term liabilities	155
Total operating lease liabilities		$	198

Other supplemental operating lease information consists of the following:

	As of and for the six months ended
	August 2, 2019
	(dollars in millions)
Cash paid for amounts included in the measurement of operating lease liabilities	$	33
ROU assets obtained in exchange for new operating lease obligations	$	43
Weighted-average remaining lease term	5 years
Weighted-average discount rate	4.3		%

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

Maturities of operating lease liabilities as of August 2, 2019 were as follows:

Fiscal Year Ending	Total
	(in millions)
Remainder of 2020	$	25
2021	51
2022	44
2023	27
2024	23
Thereafter	57
Total minimum lease payments	227
Less: imputed interest	(29		)
Present value of operating lease liabilities	$	198

As of August 2, 2019, the Company has rental commitments of $1 million for facility leases that have not yet commenced. These operating leases are expected to commence in fiscal 2020 and have a weighted-average lease term of approximately 6 years.

Note 11—Legal Proceedings and Other Commitments and Contingencies:

Legal Proceedings

The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

AAV Termination for Convenience

On August 27, 2018, the Company received a stop-work order from the United States Marine Corps on the Assault Amphibious Vehicle (AAV) contract and on October 3, 2018 the program was terminated for convenience by the customer.

Beginning in fiscal 2018, the Company entered into contracts with various vendors for long-lead time materials that would be necessary to complete the low-rate initial production (LRIP) phase of the program, including portions of the LRIP phase which had not yet been awarded. As a result of the program termination, the Company recognized an inventory provision for long-lead items. The Company is continuing to negotiate with the Marine Corps to recover all 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.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED AND CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

The indirect cost audits by the DCAA of the Company’s business remain open for fiscal 2011 and subsequent years. Although the Company has recorded contract revenues subsequent to and including fiscal 2011 based on an estimate of costs that the Company believes will be approved on final audit, the Company does not know the outcome of any ongoing or future audits. If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected.

The Company has recorded reserves for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with Cost Accounting Standards. As of August 2, 2019, the Company has recorded a total liability of $68 million for estimated net amounts to be refunded to customers for potential adjustments from audits of contract costs, which is presented in accounts payable and accrued liabilities on the condensed and consolidated balance sheets. Any additional amounts which may be determined to be owed for periods prior to the separation will be allocated to former Parent and the Company in proportions determined in accordance with the Distribution Agreement.

Letters of Credit and Surety Bonds

The Company has outstanding obligations relating to letters of credit of $11 million as of August 2, 2019, principally related to guarantees on insurance policies. The Company also has outstanding obligations relating to surety bonds in the amount of $18 million, principally related to performance and payment bonds on the Company’s contracts.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations and quantitative and qualitative disclosures about market risk should be read in conjunction with our unaudited condensed and consolidated financial statements and the related notes. It contains forward-looking statements (which may be identified by words such as those described in “Risk Factors—Forward-Looking Statement Risks” in Part I of the most recently filed Annual Report on Form 10-K), including statements regarding our intent, belief, or current expectations with respect to, among other things, trends affecting our financial condition or results of operations (including our financial targets discussed below under “Management of Operating Performance and Reporting” and “Liquidity and Capital Resources”); backlog; our industry; government budgets and spending; market opportunities; the impact of competition; and the impact of the Engility and Scitor acquisitions. Such statements are not guarantees of future performance and involve risks and uncertainties, and actual results may differ materially from those in the forward-looking statements as a result of various factors. Risks, uncertainties and assumptions that could cause or contribute to these differences include those discussed below, in “Risk Factors” in Part II of this report and in Part I of the most recently filed Annual Report on Form 10-K. Due to such risks, uncertainties and assumptions you are cautioned not to place undue reliance on such forward-looking statements, which speak only as of the date hereof. We do not undertake any obligation to update these factors or to publicly announce the results of any changes to our forward-looking statements due to future results or developments.

We use the terms "SAIC," the “Company,” “we,” “us” and “our” to refer to Science Applications International Corporation and its consolidated subsidiaries.

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 2019 began on February 3, 2018 and ended on February 1, 2019, while fiscal 2020 began on February 2, 2019 and ends on January 31, 2020.

Business Overview

We are a leading technology integrator providing full life cycle services and solutions in the technical, engineering and enterprise information technology (IT) markets. We developed our brand by addressing our customers’ mission critical needs and solving their most complex problems for over 50 years. As one of the largest pure-play technical service providers to the U.S. government, we serve markets of significant scale and opportunity. Our primary customers are the departments and agencies of the U.S. government. We serve our customers through approximately 2,200 active contracts and task orders and employ more than 23,000 individuals who are led by an experienced executive team of proven industry leaders. Our long history of serving the U.S. government has afforded us the ability to develop strong and longstanding relationships with some of the largest customers in the markets we serve. Substantially all of our revenues and tangible long-lived assets are generated by or owned by entities located in the United States.

Economic Opportunities, Challenges, and Risks

In fiscal year 2019, we generated greater than 95% of our revenues from contracts with the U.S. government, including subcontracts on which we perform. Our business performance is affected by the overall level of U.S. government spending and the alignment of our offerings and capabilities with the budget priorities of the U.S. government. Appropriations measures passed in September 2018 and February 2019, when combined, provide full funding for the federal government through the end of government fiscal year (GFY) 2019. These bills are funded at increased levels for defense and non-defense spending based on a bi-partisan agreement reached in February 2018 to lift caps set by the Budget Control Act of 2011 (BCA), providing additional business opportunities for the Company.

In July 2019, Congress passed, and the President signed, legislation that would increase the caps for GFY 2020 and GFY 2021 by a total of $323 billion. GFY 2020 and GFY 2021 are the final two years of the BCA limits on discretionary spending, so enactment of this measure effectively ends the threat of sequestration going forward (there remain caps for additional years on certain mandatory spending accounts, but these have little to no effect on our business). The cap increases also were paired with an extension of the federal debt limit until July 31, 2021, postponing the threat of a federal government default.

While the cap increases prevent sequestration under the BCA, Congress has not yet passed any GFY 2020 appropriations measures. This makes it likely that one or more continuing resolutions (CRs) will be necessary to fund the government past September 30, and there remains a possibility that political and policy disputes could result in a full or partial government shutdown later this year.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Adverse changes in fiscal and economic conditions could materially impact our business. In addition to the ongoing threat of shutdowns, future Congresses could choose to reduce overall spending levels or fail to increase the federal debt limit.

The U.S. government has increasingly relied on contracts that are subject to a competitive bidding process (including indefinite delivery, indefinite quantity (IDIQ), U.S. General Services Administration (GSA) schedules, and other multi-award contracts), which has resulted in greater competition and increased pricing pressure. We expect that a majority of the business that we seek in the foreseeable future will be awarded through a competitive bidding process.

Despite the budget and competitive pressures affecting the industry, we believe we are well-positioned to protect and expand existing customer relationships and benefit from opportunities that we have not previously pursued. Our scale, size, and prime contractor leadership position are expected to help differentiate us from our competitors, especially on large contract opportunities. We believe our long-term, trusted customer relationships and deep technical expertise provide us with the sophistication to handle highly complex, mission-critical contracts. SAIC’s value proposition is found in the proven ability to serve as a trusted adviser to our customers. In doing so, we leverage our expertise and scale to help them execute their mission.

We succeed as a business based on the solutions we deliver, our past performance, and our ability to compete on price. Our solutions are inspired through innovation based on adoption of best practices and technology integration of the best capabilities available. Our past performance was achieved by employees dedicated to supporting our customers’ most challenging missions. Our current cost structure and ongoing efforts to reduce costs by strategic sourcing and developing repeatable offerings are expected to allow us to compete effectively on price in an evolving environment. Our ability to be competitive in the future will continue to be driven by our reputation for successful program execution, competitive cost structure, and efficiencies in assigning the right people, at the right time, in support of our contracts.

On January 14, 2019, we completed the acquisition of Engility Holdings, Inc. (collectively with its consolidated subsidiaries, "Engility"). The acquisition of Engility accelerates the execution of our long-term strategy to be the premier technology integrator in the government services market and deliver sustained profitable growth. The acquisition of Engility strengthens the execution of our long-term strategy by: (1) combining two leading government service providers with highly complementary capabilities, customers, and cultures; (2) accelerating both companies' long-term strategies, creating sub-segment scale in strategic business areas of national interest; and (3) enhancing shareholder value through improved cash flow and margin profile driven by cost synergies and increased growth from greater customer access with more competitive and differentiated solutions.

Management of Operating Performance and Reporting

Our business and program management process is directed by professional managers focused on satisfying our customers by providing high quality services in achieving program requirements. These managers carefully monitor contract margin performance by constantly evaluating contract risks and opportunities. Through each contract's life cycle, program managers review performance and update contract performance estimates to reflect their understanding of the best information available. For performance obligations satisfied over time, updates to estimates are recognized on inception-to-date activity, during the period of adjustment, resulting in either a favorable or unfavorable impact to operating income.

We evaluate our results of operations by considering the drivers causing changes in revenues, operating income and operating cash flows. Given that revenues fluctuate on our contract portfolio over time due to contract awards and completions, changes in customer requirements, and increases or decreases in ordering volume of materials, we evaluate significant trends and fluctuations in these terms. Whether performed by our employees or by our subcontractors, we primarily provide services and, as a result, our cost of revenues are predominantly variable. We also analyze our cost mix (labor, subcontractor or materials) in order to understand operating margin because programs with a higher proportion of SAIC labor are generally more profitable. Changes in costs of revenues as a percentage of revenue other than from revenue volume or cost mix are normally driven by fluctuations in shared or corporate costs, or cumulative revenue adjustments due to changes in estimates.

Changes in operating cash flows are described with regard to changes in cash generated through the delivery of services, significant drivers of fluctuations in assets or liabilities and the impacts of changes in timing of cash receipts or disbursements.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Results of Operations

The primary financial performance measures we use to manage our business and monitor results of operations are revenues, operating income, and cash flows from operating activities. The following table summarizes our results of operations:

	Three Months Ended								Six Months Ended
	August 2, 2019			Percent change		August 3, 2018			August 2, 2019			Percent change		August 3, 2018
	(in millions)
Revenues	$	1,594		43	%	$	1,115		$	3,209		40	%	$	2,290
Cost of revenues	1,409			40	%	1,003			2,844			37	%	2,077
As a percentage of revenues	88.4		%			90.0		%	88.6		%			90.7		%
Selling, general and administrative expenses	82			116	%	38			159			118	%	73
Acquisition and integration costs	8			100	%	—			18			100	%	—
Operating income	95			28	%	74			188			34	%	140
As a percentage of revenues	6.0		%			6.6		%	5.9		%			6.1		%
Net income attributable to common stockholders	$	57		16	%	$	49		$	112		14	%	$	98
Net cash provided by (used in) operating activities	$	95		892	%	$	(12	)	$	273		259	%	$	76

Revenues. Revenues increased $479 million or 43.0% for the three months ended August 2, 2019 as compared to the same period in the prior year due to the acquisition of Engility. Adjusting for the impact of acquired revenues, revenues were consistent with the prior year quarter.

Revenues increased $919 million or 40.1% for the six months ended August 2, 2019 as compared to the same period in the prior year due to the acquisition of Engility. Adjusting for the impact of acquired revenues, revenues contracted 1.4%, attributable to humanitarian relief materials in the prior year and the effect of acquisition related dis-synergies.

Cost of Revenues. Cost of revenues increased $406 million for the three months ended August 2, 2019 as compared to the same period in the prior year primarily due to the acquisition of Engility. Cost of revenues as a percentage of revenues decreased from 90.0% in the prior year quarter to 88.4%, as a result of the acquisition of Engility.

Cost of revenues increased $767 million for the six months ended August 2, 2019 as compared to the same period in the prior year primarily due to the acquisition of Engility. Cost of revenues as a percentage of revenues decreased from 90.7% in the prior year quarter to 88.6%, due to the Engility acquisition and improved performance across our portfolio including higher net favorable changes in estimates related to performance obligations satisfied over time ($15 million).

Selling, General and Administrative Expenses. SG&A increased $44 million for the three months ended August 2, 2019 as compared to the same period in the prior year primarily due to the acquisition of Engility ($21 million) and related intangible asset amortization ($19 million).

SG&A increased $86 million for the six months ended August 2, 2019 as compared to the same period in the prior year primarily due to the acquisition of Engility ($44 million) and related intangible asset amortization ($39 million).

Operating Income. Operating income as a percentage of revenues of 6.0% for the three months ended August 2, 2019 decreased from 6.6% in the comparable prior year period due to increased intangible asset amortization and acquisition and integration costs related to the acquisition of Engility, partially offset by cost synergies.

Operating income as a percentage of revenues decreased to 5.9% for the six months ended August 2, 2019 from 6.1% in the comparable prior year period primarily due to increased intangible asset amortization and acquisition and integration costs related to the Engility acquisition, partially offset by cost synergies and improved performance across our portfolio.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Net Income Attributable to Common Stockholders. Net income attributable to common stockholders for the three months ended August 2, 2019 increased $8 million as compared to the same period in the prior year primarily due to increased operating income ($16 million, net of tax), partially offset by higher interest expense.

Net income attributable to common stockholders for the six months ended August 2, 2019 increased $14 million as compared to the same period in the prior year due to higher operating income ($40 million, net of tax), partially offset by higher interest expense and a higher effective tax rate.

Net Cash Provided by Operating Activities. Net cash provided by operating activities was $273 million for the six months ended August 2, 2019, an increase of $197 million compared to the prior year, primarily due to cash provided from the operating activities of Engility, strong customer collections across several programs, and customer collections recouped from the U.S. federal government partial shutdown that occurred in the fourth quarter of fiscal 2019.

Non-GAAP Measures

EBITDA and Adjusted EBITDA. Earnings before interest, taxes, depreciation and amortization (EBITDA) is a non-GAAP financial performance measure that is calculated by taking net income and excluding interest, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is calculated by taking EBITDA and excluding acquisition and integration costs that we do not consider to be indicative of our ongoing operating performance. The acquisition and integration costs relate to the Company's significant acquisition of Engility.

While we believe that these non-GAAP financial measures may be useful in evaluating our financial information, it should be considered as supplemental in nature and not as a substitute for financial information prepared in accordance with GAAP. Other companies may define similar measures differently.

We believe that EBITDA and adjusted EBITDA provide management and investors with useful information in assessing trends in our ongoing operating performance and may provide greater visibility in understanding the long-term financial performance of the Company.

EBITDA and adjusted EBITDA for the periods presented were calculated as follows:

	Three Months Ended						Six Months Ended
	August 2, 2019			August 3, 2018			August 2, 2019			August 3, 2018
	(in millions)
Net income	$	57		$	49		$	113		$	98
Interest expense	22			10			47			22
Interest income	(1		)	—			(2		)	(1		)
Provision for income taxes	17			15			31			21
Depreciation and amortization	33			10			66			20
EBITDA	128			84			255			160
EBITDA as a percentage of revenues	8.0		%	7.5		%	7.9		%	7.0		%
Acquisition and integration costs	8			—			18			—
Recovery of acquisition and integration costs(1)	(2		)	—			(4		)	—
Adjusted EBITDA	$	134		$	84		$	269		$	160
Adjusted EBITDA as a percentage of revenues	8.4		%	7.5		%	8.4		%	7.0		%

⁽¹⁾  Adjustment to reflect the portion of acquisition and integration costs recovered through the Company's indirect rates in accordance with Cost Accounting Standards.

Adjusted EBITDA for the three months ended August 2, 2019 increased to 8.4% of revenues from 7.5% of revenues for the prior year driven by the acquisition of Engility and cost synergies related to the acquisition.

Adjusted EBITDA for the six months ended August 2, 2019 increased to 8.4% of revenues from 7.0% of revenues for the prior year, driven by the acquisition of Engility, cost synergies related to the acquisition and improved performance across our portfolio including higher net favorable changes in estimates related to performance obligations satisfied over time.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Other Key Performance Measures

In addition to the financial measures described above, we believe that bookings and backlog are useful measures for management and investors to evaluate our potential future revenues. We also consider measures such as contract types and cost of revenues mix to be useful for management and investors to evaluate our operating income and performance.

Net Bookings and Backlog. Net bookings represent the estimated amount of revenues to be earned in the future from funded and negotiated unfunded contract awards that were received during the period, net of adjustments to estimates on previously awarded contracts. We calculate net bookings as the period’s ending backlog plus the period’s revenues less the prior period’s ending backlog and initial backlog obtained through acquisitions.

Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts as work is performed. We do not include in backlog estimates of revenues to be derived from IDIQ contracts, but rather record backlog and bookings when task orders are awarded on these contracts. Given that much of our revenue is derived from IDIQ contract task orders that renew annually, bookings on these contracts tend to refresh annually as the task orders are renewed. Additionally, we do not include in backlog contract awards that are under protest until the protest is resolved in our favor.

We segregate our backlog into two categories as follows:

• Funded Backlog. Funded backlog for contracts with government agencies primarily represents estimated amounts of revenue to be earned in the future from contracts for which funding is appropriated less revenues previously recognized on these contracts. It does not include the unfunded portion of contracts in which funding is incrementally appropriated or authorized on a quarterly or annual basis by the U.S. government and other customers even though the contract may call for performance over a number of years. Funded backlog for contracts with non-government customers represents the estimated value on contracts, which may cover multiple future years, under which we are obligated to perform, less revenues previously recognized on these contracts.

• Negotiated Unfunded Backlog. Negotiated unfunded backlog represents estimated amounts of revenue to be earned in the future from negotiated contracts for which funding has not been appropriated or otherwise authorized and from unexercised priced contract options. Negotiated unfunded backlog does not include any estimate of future potential task orders expected to be awarded under IDIQ, GSA Schedules or other master agreement contract vehicles.

We expect to recognize revenue from a substantial portion of our funded backlog within the next twelve months. However, the U.S. government can adjust the scope of services of or cancel contracts at any time. Similarly, certain contracts with commercial customers include provisions that allow the customer to cancel prior to contract completion. Most of our contracts have cancellation terms that would permit us to recover all or a portion of our incurred costs and fees (contract profit) for work performed.

The estimated value of our total backlog as of the dates presented was:

	August 2, 2019		February 1, 2019
	(in millions)
Funded backlog	$	2,593	$	2,753
Negotiated unfunded backlog	11,329		11,048
Total backlog	$	13,922	$	13,801

We had net bookings worth an estimated $1.9 billion and $3.3 billion during the three and six months ended August 2, 2019. Total backlog at the end of the second quarter is consistent with our total backlog at prior year end.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Contract Types. Our earnings and profitability may vary materially depending on changes in the proportionate amount of revenues derived from each type of contract. For a discussion of the types of contracts under which we generate revenues, see “Contract Types” in Part I of the most recently filed Annual Report on Form 10-K. The following table summarizes revenues by contract type as a percentage of revenues for the periods presented:

	Six Months Ended
	August 2, 2019		August 3, 2018
Cost reimbursement	57	%	46	%
Time and materials (T&M)	20	%	27	%
Firm-fixed price (FFP)	23	%	27	%
Total	100	%	100	%

Our contract mix for the six months ended August 2, 2019 reflects an increase in cost reimbursement type contracts due the acquisition of Engility, which historically had a higher proportion of cost reimbursement type contracts, and a change in contract type on a significant contract supporting the Department of Defense.

Cost of Revenues Mix. We generate revenues by providing a customized mix of services to our customers. The profit generated from our service contracts is affected by the proportion of cost of revenues incurred from the efforts of our employees (which we refer to below as labor-related cost of revenues), the efforts of our subcontractors and the cost of materials used in the performance of our service obligations under our contracts. Contracts performed with a higher proportion of SAIC labor are generally more profitable. The following table presents changes in cost mix for the periods presented:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(as a % of cost of revenues)
Labor-related cost of revenues	55	%	48	%	55	%	47	%
Subcontractor-related cost of revenues	30	%	32	%	29	%	32	%
Supply chain materials-related cost of revenues	10	%	14	%	11	%	15	%
Other materials-related cost of revenues	5	%	6	%	5	%	6	%

Cost of revenues mix for the three and six months ended August 2, 2019 reflects an increase in labor-related content due to the acquisition of Engility, which historically had a higher proportion of such costs.

Liquidity and Capital Resources

As a services provider, our business generally requires minimal infrastructure investment. We expect to fund our ongoing working capital, commitments and any other discretionary investments with cash on hand, future operating cash flows and, if needed, borrowings under our $400 million Revolving Credit Facility.

We anticipate that our future cash needs will be for working capital, capital expenditures, and contractual and other commitments. We consider various financial measures when we develop and update our capital deployment strategy, which includes evaluating cash provided by operating activities, free cash flow and financial leverage. When our cash generation enables us to exceed our target average minimum cash balance, we intend to deploy excess cash through dividends, share repurchases, debt prepayments or strategic acquisitions.

Our ability to fund these needs will depend, in part, on our ability to generate cash in the future, which depends on our future financial results. Our future results are subject to general economic, financial, competitive, legislative and regulatory factors that may be outside of our direct control. Although we believe that the financing arrangements in place will permit us to finance our operations on acceptable terms and conditions for at least the next year, our future access to, and the availability of financing on acceptable terms and conditions will be impacted by many factors (including our credit rating, capital market liquidity and overall economic conditions). Therefore, we cannot ensure that such financing will be available to us on acceptable terms or that such financing will be available at all. Nevertheless, we believe that our existing cash on hand, generation of future operating cash flows, and access to bank financing and capital markets will provide adequate resources to meet our short-term liquidity and long-term capital needs.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Historical Cash Flow Trends

The following table summarizes our cash flows:

	Six Months Ended
	August 2, 2019			August 3, 2018
	(in millions)
Net cash provided by operating activities	$	273		$	76
Net cash used in investing activities	(37		)	(17		)
Net cash used in financing activities	(294		)	(97		)
Net decrease in cash, cash equivalents and restricted cash	$	(58	)	$	(38	)

Net Cash Provided by Operating Activities. Refer to “Results of Operations” above for a discussion of the changes in cash provided by operating activities between the six months ended August 2, 2019 and the comparable prior year period.

Net Cash Used in Investing Activities. Cash used in investing activities for the six months ended August 2, 2019 increased compared to the prior year period due to purchases of marketable securities, partially offset by lower capital expenditures for property, plant, and equipment.

Net Cash Used in Financing Activities. Cash used in financing activities for the six months ended August 2, 2019 increased compared to the prior year period primarily due to $150 million of voluntary principal prepayments on the Term Loan A Facility, increase in stock repurchased and retired or withheld for taxes on equity awards and an increase in dividend payments to stockholders, partially offset by proceeds from borrowings on our revolver.

Critical Accounting Policies

Our discussion and analysis of our financial condition and results of operations are based on our condensed and consolidated financial statements, which are prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies, as well as the reported amounts of revenues, expenses, gains and losses during the reporting periods. Management evaluates these estimates and assumptions on an ongoing basis. Our estimates and assumptions have been prepared on the basis of the most current reasonably available information and, in some cases, are our basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Estimates and assumptions may change in the future as more current information is available.

Management believes that our critical accounting policies are those that are both material to the presentation of our financial condition and results of operations and require management’s most difficult, subjective and complex judgments. Typically, the circumstances that make these judgments difficult, subjective and complex have to do with making estimates about the effect of matters that are inherently uncertain.

There have been no changes to our existing critical accounting policies, other than our accounting policy on leases, during the six months ended August 2, 2019 from those disclosed in our most recently filed Annual Report on Form 10-K. We revised our accounting policy on leases in conjunction with our adoption of Accounting Standards Update No. 2016-02. See Note 10 of the notes to the condensed and consolidated financial statements contained within this report.

Recently Issued But Not Yet Adopted Accounting Pronouncements

For information on recently issued but not yet adopted accounting pronouncements, see Note 1 of the notes to the condensed and consolidated financial statements contained within this report.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes to our Market Risks from those discussed in our most recently filed Annual Report on Form 10-K.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Item 4. Controls and Procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, have evaluated the effectiveness of the Company's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) and have concluded that as of August 2, 2019, these controls and procedures were operating and effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the quarterly period covered by this report that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

We have provided information about legal proceedings in which we are involved in our fiscal 2019 Annual Report on Form 10-K, and we have provided an update to this information in Note 11 of the notes to the condensed and consolidated financial statements contained within this report.

In addition to the described legal proceedings, we are routinely subject to investigations and reviews relating to compliance with various laws and regulations. Additional information regarding such investigations and reviews is included in our fiscal 2019 Annual Report on Form 10-K, and we have also updated this information in Note 11 of the notes to the condensed and consolidated financial statements contained within this report, under the heading “Government Investigations, Audits and Reviews.”

Item 1A. Risk Factors

There have been no material changes from the risk factors disclosed in our most recently filed Annual Report on Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Purchases of Equity Securities. We may repurchase shares on the open market in accordance with established repurchase plans. Whether repurchases are made and the timing and amount of repurchases depend on a variety of factors including market conditions, our capital position, internal cash generation and other factors. We also repurchase shares in connection with stock option and stock award activities to satisfy tax withholding obligations.

The following table presents repurchases of our common stock during the three months ended August 2, 2019:

Period(1)	Total Number of Shares (or Units) Purchased(2)	Average Price Paid per Share (or Unit)		Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs(3)
May 4, 2019 - June 7, 2019	267,651	$	77.50	257,620	5,973,854
June 8, 2019 - July 5, 2019(4)	1,326,215	85.66		1,322,915	4,650,939
July 6, 2019 - August 2, 2019	1,073	86.56		—	4,650,939
Total	1,594,939	$	84.29	1,580,535

⁽¹⁾  Date ranges represent our fiscal periods during the current quarter. Our fiscal quarters typically consist of one five-week period and two four-week periods.

⁽²⁾  Includes shares purchased on surrender by stockholders of previously owned shares to satisfy minimum statutory tax withholding obligations related to stock option exercises and vesting of stock awards in addition to shares purchased under our publicly announced plans or programs.

⁽³⁾  On March 27, 2019, the number of shares that may be purchased increased by approximately 4.6 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 16.4 million shares. As of August 2, 2019, we have repurchased approximately 11.8 million shares of common stock under the program.

⁽⁴⁾  On July 2, 2019 we made a negotiated share repurchase under our existing plan for $100 million or approximately 1.2 million shares.

Item 3. Defaults Upon Senior Securities

No information is required in response to this item.

Item 4. Mine Safety Disclosures

No information is required in response to this item.

Item 5. Other Information

No information is required in response to this item.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Item 6. Exhibits

Exhibit Number	Description of Exhibit
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	Interactive Data File. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104	The cover page from this Quarterly Report on Form 10-Q, formatted as Inline XBRL.

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date: September 5, 2019

Science Applications International Corporation

/s/ Charles A. Mathis

Charles A. Mathis

Executive Vice President and Chief Financial Officer

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EX-31.1

Exhibit 31.1

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Nazzic S. Keene, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended August 2, 2019 of Science Applications International Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 5, 2019

/s/ Nazzic S. Keene

Nazzic S. Keene

Chief Executive Officer

EX-31.2

Exhibit 31.2

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Charles A. Mathis, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the period ended August 2, 2019 of Science Applications International Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: September 5, 2019

/S/ Charles A. Mathis 

Charles A. Mathis

Chief Financial Officer

EX-32.1

Exhibit 32.1

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Science Applications International Corporation (the “Company”) on Form 10-Q for the period ended August 2, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Nazzic S. Keene, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: September 5, 2019

/s/ Nazzic S. Keene

Nazzic S. Keene

Chief Executive Officer

EX-32.2

Exhibit 32.2

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Science Applications International Corporation (the “Company”) on Form 10-Q for the period ended August 2, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Charles A. Mathis, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to the best of my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: September 5, 2019

/S/ Charles A. Mathis 

Charles A. Mathis

Chief Financial Officer

XML

Revenues - Remaining Performance Obligations (Details)	Aug. 02, 2019
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-08-02
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation (percent)	80.00%
Revenue, remaining performance obligation, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-07-31
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, remaining performance obligation (percent)	90.00%
Revenue, remaining performance obligation, period	1 year

XML

Business Overview and Summary of Significant Accounting Policies - Reconciliation of Cash, Cash Equivalents and Restricted Cash (Detail) - USD ($) $ in Millions	Aug. 02, 2019	Feb. 01, 2019	Aug. 03, 2018	Feb. 02, 2018
Accounting Policies [Abstract]
Cash and cash equivalents	$ 179	$ 237
Restricted cash included in other assets	9	9
Cash, cash equivalents and restricted cash	$ 188	$ 246	$ 114	$ 152

XML

Revenues - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase (decrease) in income from change in contract estimates	$ 95	$ 74	$ 188	$ 140
Increase (decrease) in income from change in contract estimates per diluted share (in dollars per share)	$ 0.96	$ 1.13	$ 1.88	$ 2.26
Net income	$ 57	$ 49	$ 112	$ 98
Contract with customer, performance obligation satisfied in previous period	5		14
Contract with Customer, Liability, Revenue Recognized	6		19	9
Remaining performance obligation	4,200		4,200
Change in Accounting Method Accounted for as Change in Estimate
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase (decrease) in income from change in contract estimates	$ 4	$ 2	$ 12	$ (3)
Increase (decrease) in income from change in contract estimates per diluted share (in dollars per share)	$ 0.05	$ 0.03	$ 0.16	$ (0.05)
Net income	$ 3		$ 9
Pre-contract costs
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Capitalized Contract Cost, Amortization			$ 1	$ 2

XML

Debt Obligations

6 Months Ended

Aug. 02, 2019

Debt Disclosure [Abstract]

Debt Obligations

Debt Obligations:

The Company’s long-term debt as of the dates presented was as follows:

	August 2, 2019											February 1, 2019
	Stated interest rate		Effective interest rate		Principal		Unamortized debt issuance costs			Net		Principal		Unamortized debt issuance costs			Net
					(in millions)
Term Loan A Facility due October 2023	3.73	%	4.07	%	$	918	$	(10	)	$	908	$	1,068	$	(14	)	$	1,054
Term Loan B Facility due October 2025	3.98	%	4.19	%	1,042		(12		)	1,030		1,047		(12		)	1,035
Revolving Credit Facility due October 2023	3.86	%			100		—			100		—		—			—
Total long-term debt					$	2,060	$	(22	)	$	2,038	$	2,115	$	(26	)	$	2,089
Less current portion					151		—			151		24		—			24
Total long-term debt, net of current portion					$	1,909	$	(22	)	$	1,887	$	2,091	$	(26	)	$	2,065

As of August 2, 2019, the Company has a $2.4 billion credit facility (the Credit Facility) consisting of a $400 million secured Revolving Credit Facility with an available capacity of $300 million for additional borrowings, a $918 million secured Term Loan A Facility, and a $1,042 million secured Term Loan B Facility (together, the Term Loan Facilities). As of August 2, 2019, the outstanding principal under the Revolving Credit Facility was classified as

current portion of long-term debt on the condensed and consolidated balance sheets. Subsequent to quarter end, the Company repaid $50 million on the Revolving Credit Facility.

As of August 2, 2019, the Company was in compliance with the covenants under its Credit Facility.

As of August 2, 2019 and February 1, 2019, 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.

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Revenues

6 Months Ended

Aug. 02, 2019

Revenue from Contract with Customer [Abstract]

Revenues

Revenues:

Changes in Estimates

Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss.

Aggregate changes in these estimates increased operating income by $4 million ($0.05 per diluted share) and $12 million ($0.16 per diluted share) for the three and six months ended August 2, 2019, respectively, increased operating income by $2 million ($0.03 per diluted share) for the three months ended August 3, 2018, and decreased operating income by $3 million ($0.05 per diluted share) for the six months ended August 3, 2018. Changes in these estimates increased net income by $3 million and $9 million for the three and six months ended August 2, 2019, respectively. In addition, revenues were $5 million and $14 million higher for the three and six months ended August 2, 2019, 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 vs. subcontractor to the federal government.

Disaggregated revenues by customer were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Department of Defense	$	846	$	678	$	1,710	$	1,424
Other federal government agencies	716		417		1,438		830
Commercial, state and local	32		20		61		36
Total	$	1,594	$	1,115	$	3,209	$	2,290

Disaggregated revenues by contract-type were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Cost reimbursement	$	918	$	532	$	1,839	$	1,065
Time and materials (T&M)	321		295		646		610
Firm-fixed price (FFP)	355		288		724		615
Total	$	1,594	$	1,115	$	3,209	$	2,290

Disaggregated revenues by prime vs. subcontractor were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Prime contractor to federal government	$	1,405	$	1,014	$	2,839	$	2,091
Subcontractor to federal government	157		81		309		163
Other	32		20		61		36
Total	$	1,594	$	1,115	$	3,209	$	2,290

Contract Balances

Contract balances for the periods presented were as follows:

	Balance Sheet line item	August 2, 2019		February 1, 2019
		(in millions)
Billed and billable receivables, net(1)	Receivables, net	$	760	$	740
Contract assets - unbillable receivables	Receivables, net	273		310
Contract assets - contract retentions	Other assets	16		13
Contract liabilities - current	Accounts payable and accrued liabilities	34		34
Contract liabilities - non-current	Other long-term liabilities	$	9	$	6

(1) Net of allowance for doubtful accounts of $2 million as of August 2, 2019 and February 1, 2019.

During the six months ended August 2, 2019 and August 3, 2018, the Company recognized revenues of $19 million and $9 million relating to amounts that were included in the opening balance of contract liabilities as of February 1, 2019 and February 3, 2018, respectively. $6 million in revenues were recognized for the three months ended August 2, 2019, relating to amounts that were included in the opening balance of contract liabilities - current as of February 1, 2019.

Deferred Costs

Deferred costs for the periods presented were as follows:

	Balance Sheet line item	August 2, 2019		February 1, 2019
		(in millions)
Pre-contract costs	Inventory, prepaid expenses and other current assets	$	—	$	1
Fulfillment costs - non-current	Other assets	$	13	$	13

Pre-contract costs of $1 million were expensed during the six months ended August 2, 2019 and $2 million were expensed during the three and six months ended August 3, 2018, respectively. Fulfillment costs of $1 million and $2 million were amortized during the three and six months ended August 2, 2019, respectively.

Remaining Performance Obligations

As of August 2, 2019, the Company had $4.2 billion of remaining performance obligations. Remaining performance obligations exclude any variable consideration that is allocated entirely to unsatisfied performance obligations on our supply chain contracts. The Company expects to recognize revenue on approximately 80% of the remaining performance obligations over the next 12 months and approximately 90% over the next 24 months, with the remaining recognized thereafter.

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Leases Lease, Cost (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Aug. 02, 2019	Aug. 02, 2019
Lease, Cost [Abstract]
Operating Lease, Cost	$ 17	$ 33
Variable Lease, Cost	3	7
Short-term Lease, Cost	1	2
Sublease Income	(1)	(2)
Lease, Cost	$ 20	$ 40

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Changes in Accumulated Other Comprehensive Income by Component (Detail) - Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest [Member] - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018	May 03, 2019	Feb. 01, 2019	May 04, 2018	Feb. 02, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
AOCI Including Portion Attributable to Noncontrolling Interest, before Tax	$ (80)	$ 6	$ (80)	$ 6	$ (33)	$ (19)	$ 7	$ 5
Other Comprehensive Income (Loss), before Reclassifications, before Tax	(47)	0	(61)	2
Reclassification from Accumulated Other Comprehensive Income, Current Period, before Tax	0	(1)	0	(1)
Other Comprehensive Income (Loss), before Tax	$ (47)	$ (1)	$ (61)	$ 1

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Derivative Instruments Designated as Cash Flow Hedges - Narrative (Detail) - Interest Rate Swaps $ in Millions	6 Months Ended
	Aug. 02, 2019 USD ($)
Derivative [Line Items]
Unrealized gains estimated to be reclassified from accumulated other comprehensive income into earnings in the next twelve months	$ 10
Interest rate swaps 4
Derivative [Line Items]
Derivative, Cash Received on Hedge	6
Accumulated Other Comprehensive Income Loss Cumulative Changes In Net Gain Loss From Cash Flow Hedges Effect Before Tax1	$ 6

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Engility Acquisition Summary of Preliminary Purchase Consideration (Details) - Engility Holdings, Inc [Member] $ / shares in Units, shares in Millions, $ in Millions	Jan. 14, 2019 USD ($) $ / shares shares
Business Acquisition [Line Items]
Payments to Acquire Businesses, Gross	$ 1,052
Business Combination, Consideration Transferred	$ 2,160
Business Acquisition, Share Price | $ / shares	$ 65.03
Shares of common stock
Business Acquisition [Line Items]
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	$ 1,086
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares	16.8
Restricted Stock [Member]
Business Acquisition [Line Items]
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	$ 22

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Income Taxes (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018
Income Taxes [Line Items]
Effective income tax rate	23.30%	23.10%	21.60%	17.20%
Liabilities for uncertainty in income taxes	$ 14		$ 14
Unrecognized tax benefits	12		12
Statute of Limitations Expiration [Member]
Income Taxes [Line Items]
Decrease in Unrecognized Tax Benefits is Reasonably Possible	2		2
Settlement with Taxing Authority [Member] | Minimum
Income Taxes [Line Items]
Decrease in Unrecognized Tax Benefits is Reasonably Possible	2		2
Settlement with Taxing Authority [Member] | Maximum
Income Taxes [Line Items]
Decrease in Unrecognized Tax Benefits is Reasonably Possible	$ 4		$ 4

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Revenues (Tables)

6 Months Ended

Aug. 02, 2019

Revenue from Contract with Customer [Abstract]

Disaggregated Revenues

Disaggregated revenues by customer were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Department of Defense	$	846	$	678	$	1,710	$	1,424
Other federal government agencies	716		417		1,438		830
Commercial, state and local	32		20		61		36
Total	$	1,594	$	1,115	$	3,209	$	2,290

Disaggregated revenues by contract-type were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Cost reimbursement	$	918	$	532	$	1,839	$	1,065
Time and materials (T&M)	321		295		646		610
Firm-fixed price (FFP)	355		288		724		615
Total	$	1,594	$	1,115	$	3,209	$	2,290

Disaggregated revenues by prime vs. subcontractor were as follows:

	Three Months Ended				Six Months Ended
	August 2, 2019		August 3, 2018		August 2, 2019		August 3, 2018
	(in millions)
Prime contractor to federal government	$	1,405	$	1,014	$	2,839	$	2,091
Subcontractor to federal government	157		81		309		163
Other	32		20		61		36
Total	$	1,594	$	1,115	$	3,209	$	2,290

Contract Related Assets and Liabilities

Contract balances for the periods presented were as follows:

	Balance Sheet line item	August 2, 2019		February 1, 2019
		(in millions)
Billed and billable receivables, net(1)	Receivables, net	$	760	$	740
Contract assets - unbillable receivables	Receivables, net	273		310
Contract assets - contract retentions	Other assets	16		13
Contract liabilities - current	Accounts payable and accrued liabilities	34		34
Contract liabilities - non-current	Other long-term liabilities	$	9	$	6

(1) Net of allowance for doubtful accounts of $2 million as of August 2, 2019 and February 1, 2019.

Deferred Costs

Deferred costs for the periods presented were as follows:

	Balance Sheet line item	August 2, 2019		February 1, 2019
		(in millions)
Pre-contract costs	Inventory, prepaid expenses and other current assets	$	—	$	1
Fulfillment costs - non-current	Other assets	$	13	$	13

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CONDENSED AND CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions	Aug. 02, 2019	Feb. 01, 2019
Statement of Financial Position [Abstract]
Intangible assets, accumulated amortization	$ 127	$ 79
Property, plant and equipment, accumulated depreciation	$ 172	$ 159
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)	58	60,000,000
Common stock, shares outstanding (in shares)	58	60,000,000

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Legal Proceedings and Other Commitments and Contingencies

6 Months Ended

Aug. 02, 2019

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings and Other Commitments and Contingencies

Legal Proceedings and Other Commitments and Contingencies:

Legal Proceedings

The Company is involved in various claims and lawsuits arising in the normal conduct of its business, none of which the Company’s management believes, based on current information, is expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows.

AAV Termination for Convenience

On August 27, 2018, the Company received a stop-work order from the United States Marine Corps on the Assault Amphibious Vehicle (AAV) contract and on October 3, 2018 the program was terminated for convenience by the customer.

Beginning in fiscal 2018, the Company entered into contracts with various vendors for long-lead time materials that would be necessary to complete the low-rate initial production (LRIP) phase of the program, including portions of the LRIP phase which had not yet been awarded. As a result of the program termination, the Company recognized an inventory provision for long-lead items. The Company is continuing to negotiate with the Marine Corps to recover all 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 fiscal 2011 and subsequent years. Although the Company has recorded contract revenues subsequent to and including fiscal 2011 based on an estimate of costs that the Company believes will be approved on final audit, the Company does not know the outcome of any ongoing or future audits. If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected.

The Company has recorded reserves for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with Cost Accounting Standards. As of August 2, 2019, the Company has recorded a total liability of $68 million for estimated net amounts to be refunded to customers for potential adjustments from audits of contract costs, which is presented in accounts payable and accrued liabilities on the condensed and consolidated balance sheets. Any additional amounts which may be determined to be owed for periods prior to the separation will be allocated to former Parent and the Company in proportions determined in accordance with the Distribution Agreement.

Letters of Credit and Surety Bonds

The Company has outstanding obligations relating to letters of credit of $11 million as of August 2, 2019, principally related to guarantees on insurance policies. The Company also has outstanding obligations relating to surety bonds in the amount of $18 million, principally related to performance and payment bonds on the Company’s contracts.

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Changes in Accumulated Other Comprehensive Income by Component (Tables)

6 Months Ended

Aug. 02, 2019

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

The following table presents the changes in accumulated other comprehensive loss attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8.

	Pre-Tax Amount
	Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1)
	(in millions)
Three months ended August 2, 2019
Balance at May 3, 2019	$	(33	)
Other comprehensive loss before reclassifications	(47		)
Amounts reclassified from accumulated other comprehensive loss	—
Net other comprehensive loss	(47		)
Balance at August 2, 2019	$	(80	)
Three months ended August 3, 2018
Balance at May 4, 2018	$	7
Other comprehensive income before reclassifications	—
Amounts reclassified from accumulated other comprehensive income	(1		)
Net other comprehensive loss	(1		)
Balance at August 3, 2018	$	6
Six months ended August 2, 2019
Balance at February 1, 2019	$	(19	)
Other comprehensive loss before reclassifications	(61		)
Amounts reclassified from accumulated other comprehensive loss	—
Net other comprehensive loss	(61		)
Balance at August 2, 2019	$	(80	)
Six months ended August 3, 2018
Balance at February 2, 2018	$	5
Other comprehensive income before reclassifications	2
Amounts reclassified from accumulated other comprehensive income	(1		)
Net other comprehensive income	1
Balance at August 3, 2018	$	6

⁽¹⁾ 

The amount reclassified from accumulated other comprehensive loss is included in interest expense.

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CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Statement - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018
Statement of Comprehensive Income [Abstract]
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 57	$ 49	$ 113	$ 98
Other Comprehensive Income (Loss), Net of Tax [Abstract]
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	22	48	68	98
Comprehensive Income (Loss), Net of Tax, Attributable to Noncontrolling Interest	0	0	1	0
Comprehensive Income (Loss), Net of Tax, Attributable to Parent	22	48	67	98
Other Comprehensive Income (Loss), Net of Tax	(35)	(1)	(45)	0
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, after Tax	(35)	0	(45)	1
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, after Tax	0	(1)	0	(1)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), after Reclassification and Tax	$ (35)	$ (1)	$ (45)	$ 0

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Engility Acquisition (Details) $ in Millions		3 Months Ended		6 Months Ended
	Jan. 14, 2019 USD ($)	Aug. 02, 2019 USD ($)	Aug. 03, 2018 USD ($)	Aug. 02, 2019 USD ($)	Aug. 03, 2018 USD ($)	Feb. 01, 2019 USD ($)
Business Acquisition [Line Items]
Long-term Debt, Gross		$ 2,060		$ 2,060		$ 2,115
Debt issuance costs				0	$ 1
Acquisition and integration costs (Note 4)		8	$ 0	18	$ 0
Engility Holdings, Inc [Member]
Business Acquisition [Line Items]
Common shares conversion ratio	0.45
Business Acquisition, Transaction Costs		136		136
Business Combination, Acquisition Related Costs	$ 63
Debt issuance costs	31
Payments of Stock Issuance Costs	$ 2
Acquisition and integration costs (Note 4)		8		18
Term Loan A Facility Commitment Due October Two Thousand Twenty Three
Business Acquisition [Line Items]
Debt Instrument, Term	5 years
Long-term Debt, Gross		$ 918		$ 918		$ 1,068
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | Third Amended Credit Agreement
Business Acquisition [Line Items]
Long-term Debt, Gross	$ 1,100

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Stock-Based Compensation (Detail) shares in Millions	6 Months Ended
	Aug. 02, 2019 $ / shares shares
Employee Stock Option
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Options granted (in shares) | shares	0.1
Stock option weighted-average exercise price (in dollars per share)	$ 75.43
Weighted-average grant date fair value of options awarded (in dollars per share)	$ 16.82
Contractual term	7 years
Vesting period	3 years
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Awards granted (in shares) | shares	0.4
Weighted-average grant date fair value (in dollars per share)	$ 75.34
Performance Shares [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Vesting period	3 years
Awards granted (in shares) | shares	0.1
Weighted-average grant date fair value (in dollars per share)	$ 79.04

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Derivative Instruments Designated as Cash Flow Hedges - Schedule of Derivative Instruments (Detail) - USD ($)	6 Months Ended
	Aug. 02, 2019	Feb. 01, 2019
Derivative [Line Items]
Notional amount	$ 1,353,000,000
Asset Fair Value	(83,000,000)	$ (24,000,000)
Interest rate swaps 1 | Interest Rate Swaps
Derivative [Line Items]
Notional amount	$ 328,000,000
Pay fixed rate	2.78%
Receive variable rate	1-month LIBOR
Settlement and termination	Monthly through July 30, 2021
Asset Fair Value	$ (6,000,000)	(2,000,000)
Interest rate swaps 2 | Interest Rate Swaps
Derivative [Line Items]
Notional amount	$ 500,000,000
Pay fixed rate	3.07%
Receive variable rate	1-month LIBOR
Settlement and termination	Monthly through October 31, 2025
Asset Fair Value	$ (56,000,000)	(21,000,000)
Interest rate swaps 3 | Interest Rate Swaps
Derivative [Line Items]
Notional amount	$ 525,000,000
Pay fixed rate	2.49%
Receive variable rate	1-month LIBOR
Settlement and termination	Monthly through October 31, 2023
Asset Fair Value	$ (21,000,000)	$ (1,000,000)

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Leases (Tables)

6 Months Ended

Aug. 02, 2019

Leases [Abstract]

Lease, Cost [Table Text Block]

Total operating lease cost is comprised of the following:

		Three Months Ended			Six Months Ended
	Income Statement line item(s)	August 2, 2019			August 2, 2019
		(in millions)
Operating lease cost	Cost of revenues and selling, general and administrative expenses	$	17		$	33
Variable lease cost	Cost of revenues and selling, general and administrative expenses	3			7
Short-term lease cost	Cost of revenues and selling, general and administrative expenses	1			2
Sublease income	Cost of revenues and selling, general and administrative expenses	(1		)	(2		)
Total lease cost		$	20		$	40

Supplemental Balance Sheet Disclosures [Text Block]

The Company's ROU assets and lease liabilities consisted of the following:

	Balance Sheet line item	August 2, 2019
		(in millions)
Operating lease ROU asset	Other assets	$	184
Operating lease current liability	Accounts payable and accrued liabilities	43
Operating lease non-current liability	Other long-term liabilities	155
Total operating lease liabilities		$	198

OtherSupplementalLeaseInformation [Table Text Block]

Other supplemental operating lease information consists of the following:

	As of and for the six months ended
	August 2, 2019
	(dollars in millions)
Cash paid for amounts included in the measurement of operating lease liabilities	$	33
ROU assets obtained in exchange for new operating lease obligations	$	43
Weighted-average remaining lease term	5 years
Weighted-average discount rate	4.3		%

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

Maturities of operating lease liabilities as of August 2, 2019 were as follows:

Fiscal Year Ending	Total
	(in millions)
Remainder of 2020	$	25
2021	51
2022	44
2023	27
2024	23
Thereafter	57
Total minimum lease payments	227
Less: imputed interest	(29		)
Present value of operating lease liabilities	$	198

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CONDENSED AND CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (PARENTHETICAL) (Parentheticals) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018
Statement of Comprehensive Income [Abstract]
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), before Reclassification, Tax	$ 12	$ 0	$ 16	$ (1)
Other Comprehensive Income (Loss), Cash Flow Hedge, Gain (Loss), Reclassification, Tax	$ 0	$ 0	$ 0	$ 0

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Engility Acquisition (Tables)

6 Months Ended

Aug. 02, 2019

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

The purchase accounting entries were recorded on a preliminary basis as follows:

	(in millions)
Cash and cash equivalents	$	51
Receivables	351
Inventories	5
Prepaid expenses	5
Other current assets	15
Property, plant, and equipment	39
Deferred tax assets	91
Other assets	7
Intangible assets	648
Goodwill	1,257
Total assets acquired	2,469
Accounts payable	115
Accrued payroll and other employee benefits	30
Accrued vacation	39
Other accrued liabilities	58
Other long-term liabilities	54
Total liabilities assumed	296
Non-controlling interest	13
Net assets acquired	$	2,160
Amount of tax deductible goodwill	$	441

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The purchase consideration for the acquisition of Engility was as follows:

	(in millions)
Common stock issued to Engility shareholders(1)	$	1,086
Converted vesting stock awards assumed(2)	22
Cash consideration paid to extinguish Engility outstanding debt	1,052
Purchase price	$	2,160

⁽¹⁾  Represents approximately 16.8 million new shares of SAIC common stock issued to Engility shareholders prior to the market opening on January 14, 2019, using the SAIC share price of $65.03 at the close of business on January 11, 2019.

⁽²⁾ 

Represents the fair value of the converted vesting stock awards assumed attributable to pre-acquisition service.

Schedule of Indefinite-lived Intangible Assets Acquired as Part of Business Combination [Table Text Block]

The following table summarizes the fair value of intangible assets and the related weighted-average useful lives:

	Amount		Weighted-Average Amortization Period
	(in millions)		(in years)
Backlog	$	30	1
Developed technology	2		10
Customer relationships	616		14
Total intangible assets	$	648	13

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Document and Entity Information - shares	6 Months Ended
	Aug. 02, 2019	Aug. 23, 2019
Document And Entity Information [Abstract]
Document Type	10-Q
Document Period End Date	Aug. 02, 2019
Document Quarterly Report	true
Document Transition Report	false
Document Fiscal Year Focus	2020
Current Fiscal Year End Date	--01-31
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, State or Province	Reston
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	20190
City Area Code	703
Local Phone Number	676-4300
Amendment Flag	false
Title of 12(b) Security	Common Stock, par value $.0001 per share
Trading Symbol	SAIC
Entity Central Index Key	0001571123
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		57,701,393
Entity Emerging Growth Company	false
Entity Small Business	false
Document Fiscal Period Focus	Q2
Entity Interactive Data Current	Yes
Security Exchange Name	NYSE
Entity Interactive Data Current	Yes
Entity Shell Company	false

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CONDENSED AND CONSOLIDATED STATEMENT OF EQUITY - USD ($) $ in Millions	Total	Shares of common stock	Additional paid-in capital	Retained earnings	Accumulated other comprehensive (loss) income	Non-controlling interest
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative impact from adopting ASC 606 on February 3, 2018	$ 3			$ 3
Balance, beginning (in shares) at Feb. 02, 2018		43,000,000
Beginning Balance at Feb. 02, 2018	327		$ 0	323	$ 4	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	98			98
Issuances of stock (in shares)		1,000,000
Issuances of stock	4		4
Other comprehensive loss, net of tax	0
Dividends, Common Stock, Cash	(27)			(27)
Stock-based compensation	(5)		4	(9)
Repurchases of stock (in shares)		(1,000,000)
Repurchases of stock	(33)		0	(33)
Net Income (Loss) Attributable to Noncontrolling Interest	0
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	98
Distributions to non-controlling interest	0
Balance, ending (in shares) at Aug. 03, 2018		43,000,000
Ending Balance at Aug. 03, 2018	367		8	355	4	0
Balance, beginning (in shares) at May. 04, 2018		43,000,000
Beginning Balance at May. 04, 2018	325		0	320	5	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	49			49
Issuances of stock (in shares)		0
Issuances of stock	2		2
Other comprehensive loss, net of tax	(1)				(1)
Dividends, Common Stock, Cash	(14)			(14)
Stock-based compensation	6		6	0
Net Income (Loss) Attributable to Noncontrolling Interest	0
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	49
Balance, ending (in shares) at Aug. 03, 2018		43,000,000
Ending Balance at Aug. 03, 2018	$ 367		8	355	4	0
Balance, beginning (in shares) at Feb. 01, 2019	60,000,000	60,000,000
Beginning Balance at Feb. 01, 2019	$ 1,499		1,132	367	(14)	14
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	112			112
Issuances of stock (in shares)		0
Issuances of stock	6		6
Other comprehensive loss, net of tax	(45)				(45)
Dividends, Common Stock, Cash	(44)			(44)
Stock-based compensation	5		5	0
Repurchases of stock (in shares)		(2,000,000)
Repurchases of stock	(180)		(180)	0
Net Income (Loss) Attributable to Noncontrolling Interest	(1)					1
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	113
Distributions to non-controlling interest	$ (5)					(5)
Balance, ending (in shares) at Aug. 02, 2019	58	58,000,000
Ending Balance at Aug. 02, 2019	$ 1,349		963	435	(59)	10
Balance, beginning (in shares) at May. 03, 2019		59,000,000
Beginning Balance at May. 03, 2019	1,473		1,086	400	(24)	11
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	57			57
Issuances of stock	3		3
Other comprehensive loss, net of tax	(35)				(35)
Dividends, Common Stock, Cash	(22)			(22)
Stock-based compensation	9		9
Repurchases of stock (in shares)		(1,000,000)
Repurchases of stock	(135)		(135)
Net Income (Loss) Attributable to Noncontrolling Interest	0					0
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	57
Distributions to non-controlling interest	$ (1)					(1)
Balance, ending (in shares) at Aug. 02, 2019	58	58,000,000
Ending Balance at Aug. 02, 2019	$ 1,349		$ 963	$ 435	$ (59)	$ 10

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Business Overview and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Aug. 02, 2019

Accounting Policies [Abstract]

Segment Reporting

The Company is organized as a matrix comprised of three customer facing operating segments supported by a solutions and technology group. Each of the Company’s three customer facing operating segments is focused on providing the Company’s comprehensive technical and enterprise IT service offerings to one or more agencies of the U.S. federal government. The Company's operating segments are aggregated into one reportable segment for financial reporting purposes.

Basis of Presentation

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP).

Consolidation

All intercompany transactions and account balances within the Company have been eliminated.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates.

Reporting Periods

The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2019 began on February 3, 2018 and ended on February 1, 2019, while fiscal 2020 began on February 2, 2019 and ends on January 31, 2020.

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 or canceled. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges.

Accounting Standards Updates

Accounting Standards Updates

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which supersedes the existing lease accounting standards (Topic 840). Under the new guidance, a lessee will be required to recognize lease assets and lease liabilities for all leases with lease terms in excess of twelve months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as either a finance lease or operating lease. The criteria for distinction between a finance lease and an operating lease are substantially similar to existing lease guidance for capital leases and operating leases. Some changes to lessor accounting have been made to conform and align that guidance with the lessee guidance and other areas within GAAP, such as Revenue from Contracts with Customers (Topic 606). In July 2018, the FASB provided an optional transition method of adoption, permitting entities to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as opposed to the beginning of the earliest period presented in the financial statements.

ASU 2016-02 became effective for the Company in the first quarter of fiscal 2020. The Company adopted the standard using the optional transition method. Accordingly, the prior periods were not recast, and all prior period amounts disclosed are presented under ASC 840. The Company elected certain practical expedients provided under the standard, including the package of practical expedients, which allows entities not to reassess whether existing contracts are or contain leases. Therefore, at adoption, existing leases have been identified using the criteria of ASC 840.

As a result of the adoption of the new standard, on February 2, 2019, the Company recognized approximately $169 million of right of use operating assets and $187 million of operating lease liabilities, of which $140 million was noncurrent. The adoption did not have a material impact on retained earnings, the condensed and consolidated statements of income, or the condensed and consolidated statements of cash flows.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software (Subtopic 350-40). ASU 2018-15 becomes effective for the Company in the first quarter of fiscal 2021 and may be adopted either retrospectively or prospectively. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its financial statements.

Other Accounting Standards Updates effective after August 2, 2019 are not expected to have a material effect on the Company’s financial statements.

Earnings Per Share

Basic earnings per share (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

Disaggregation of Revenues

The Company's revenues are generated primarily from long-term contracts with the U.S. government including subcontracts with other contractors engaged in work for the U.S. government. The Company disaggregates revenues by customer, contract-type and prime vs. subcontractor to the federal government.

Changes in Estimates

Changes in estimates of revenues, cost of revenues or profits related to performance obligations satisfied over time are recognized in operating income in the period in which such changes are made for the inception-to-date effect of the changes. Changes in these estimates can routinely occur over the performance period for a variety of reasons, which include: changes in scope; changes in cost estimates due to unanticipated cost growth or reassessments of risks impacting costs; changes in the estimated transaction price, such as variable amounts for incentive or award fees; and performance being better or worse than previously estimated. In cases when total expected costs exceed total estimated revenues for a performance obligation, the Company recognizes the total estimated loss in the quarter identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss.

Inventory

Inventory is substantially comprised of finished goods inventory purchased for resale to customers, such as tires and lubricants, and is valued at the lower of cost or net realizable value, generally using the average method. The Company evaluates current inventory against historical and planned usage to estimate the appropriate provision for obsolete inventory.

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 2, 2019 and February 1, 2019, the fair value of our investments total $25 million and $4 million, respectively, and was included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities.

Lessee

The Company occupies most of its facilities under operating leases. Certain equipment also is leased under short-term or cancelable operating leases.

Effective upon the adoption of ASU 2016-02, 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 facility leases with original terms of 12 months or less. ROU assets are evaluated for impairment as a long-lived asset.

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Business Overview and Summary of Significant Accounting Policies - Narrative (Detail) $ in Millions	6 Months Ended
	Aug. 02, 2019 USD ($) segment	Feb. 01, 2019 USD ($)
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Number of operating segments	3
Number of reportable segments	1
Operating cycle (greater than)	1 year
Retained earnings | $	$ 435	$ 367
Forfeiture Support Associates J.V. [Member]
Revenue, Initial Application Period Cumulative Effect Transition [Line Items]
Noncontrolling Interest, Ownership Percentage by Parent	50.10%

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Earnings Per Share (Detail) - $ / shares shares in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018
Computation Of Earnings Per Share [Line Items]
Common Stock, Dividends, Per Share, Cash Paid	$ 0.37	$ 0.31	$ 0.74	$ 0.62
Basic weighted-average number of shares outstanding (in shares)	58.6	42.5	59.0	42.4
Dilutive common share equivalents - stock options and other stock-based awards (in shares)	0.5	0.7	0.6	0.9
Diluted weighted-average number of shares outstanding (in shares)	59.1	43.2	59.6	43.3
Stock Options
Computation Of Earnings Per Share [Line Items]
Antidilutive stock options excluded (in shares)	0.3	0.1	0.3	0.2

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Revenues - Deferred Costs (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Aug. 02, 2019	Aug. 02, 2019	Aug. 03, 2018	Feb. 01, 2019
Pre-contract costs
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Amortization		$ 1	$ 2
Fulfillment costs - non-current
Capitalized Contract Cost [Line Items]
Capitalized Contract Cost, Amortization	$ 1	2
Inventory, prepaid expenses and other current assets | Pre-contract costs
Capitalized Contract Cost [Line Items]
Deferred costs	0	0		$ 1
Other assets | Fulfillment costs - non-current
Capitalized Contract Cost [Line Items]
Deferred costs	$ 13	$ 13		$ 13

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Derivative Instruments Designated as Cash Flow Hedges

6 Months Ended

Aug. 02, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments Designated as Cash Flow Hedges

Derivative Instruments Designated as Cash Flow Hedges:

The Company’s derivative instruments designated as cash flow hedges consist of:

							Liability Fair Value(1) at
	Notional Amount at August 2, 2019		Pay Fixed Rate		Receive Variable Rate	Settlement and Termination	August 2, 2019			February 1, 2019
	(in millions)						(in millions)
Interest rate swaps #1	$	328	2.78	%	1-month LIBOR	Monthly through July 30, 2021	$	(6	)	$	(2	)
Interest rate swaps #2	500		3.07	%	1-month LIBOR	Monthly through October 31, 2025	(56		)	(21		)
Interest rate swaps #3	525		2.49	%	1-month LIBOR	Monthly through October 31, 2023	(21		)	(1		)
Total	$	1,353					$	(83	)	$	(24	)

⁽¹⁾  The fair value of the fixed interest rate swaps liability is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

The Company is party to fixed interest rate swap instruments that are designated and accounted for as cash flow hedges to manage risks associated with interest rate fluctuations on a portion of the Company’s floating rate debt. The counterparties to all swap agreements are financial institutions. See Note 9 for the unrealized change in fair values on cash flow hedges recognized in other comprehensive loss and the amounts reclassified from accumulated other comprehensive loss into earnings for the current and comparative periods presented. The Company estimates that it will reclassify $10 million of unrealized losses from accumulated other comprehensive loss into earnings in the twelve months following August 2, 2019.

On October 31, 2018, the Company exited one of its interest rate swaps and discontinued hedge accounting. The Company received cash proceeds of $6 million upon the early settlement. The $6 million of deferred gains in accumulated other comprehensive loss will be reclassified into interest expense over the original contractual term of the interest rate swaps, which has a maturity date of May 7, 2020.

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Engility Acquisition

6 Months Ended

Aug. 02, 2019

Business Combinations [Abstract]

Engility Acquisition

Engility Acquisition:

On January 14, 2019, the Company completed the acquisition of Engility Holdings, Inc., a leading provider of integrated solutions and services supporting U.S. government customers in the defense, federal civilian, and intelligence and space communities. This strategic acquisition enables greater market and customer access, particularly in the intelligence and space communities, and enhances the Company's portfolio of capabilities, particularly in the area of systems engineering and integration. The acquisition enables acceleration of revenue growth through increased market and customer access, increased investment capacity, addition of cleared personnel and strategic alignment with key customers. The acquisition also enables increased profitability and cash generation with an improved margin profile and greater financial flexibility for investment and capital deployment.

The acquisition was funded through a combination of SAIC common stock and additional borrowings. At the effective time of the acquisition, each outstanding share of Engility common stock was automatically cancelled and

converted into the right to receive 0.45 shares of the Science Applications International Corporation common stock. The Company amended its credit agreement to provide for a new five-year senior secured $1.1 billion term loan facility. SAIC borrowed the entire amount of the term loan facility, the proceeds of which were immediately used to repay Engility's existing credit facility and outstanding notes and to pay fees and expenses associated with the acquisition, with the balance retained by SAIC to be used for general corporate purposes.

The purchase consideration for the acquisition of Engility was as follows:

	(in millions)
Common stock issued to Engility shareholders(1)	$	1,086
Converted vesting stock awards assumed(2)	22
Cash consideration paid to extinguish Engility outstanding debt	1,052
Purchase price	$	2,160

⁽¹⁾  Represents approximately 16.8 million new shares of SAIC common stock issued to Engility shareholders prior to the market opening on January 14, 2019, using the SAIC share price of $65.03 at the close of business on January 11, 2019.

⁽²⁾  Represents the fair value of the converted vesting stock awards assumed attributable to pre-acquisition service.

The purchase price was allocated, on a preliminary basis, among assets acquired and liabilities assumed at fair value on the acquisition date, January 14, 2019, based on the best available information, with the excess purchase price recorded as goodwill. As of August 2, 2019, the Company had not finalized the determination of fair values allocated to various assets and liabilities, including, but not limited to, receivables, other current assets, deferred tax assets, property, plant, and equipment, other accrued liabilities and goodwill. The allocation of the purchase price is subject to change as the Company continues to obtain and assess relevant information that existed as of the acquisition date, including but not limited to, information pertaining to Engility’s historical government compliance accounting practices, legal proceedings, reserves, income taxes, contracts with customers, and pre-acquisition contingencies. The Company expects to have sufficient information available to resolve these items by the fourth quarter of fiscal 2020, which could potentially result in changes in assets or liabilities on Engility’s opening balance sheet and an adjustment to goodwill. The purchase accounting entries were recorded on a preliminary basis as follows:

	(in millions)
Cash and cash equivalents	$	51
Receivables	351
Inventories	5
Prepaid expenses	5
Other current assets	15
Property, plant, and equipment	39
Deferred tax assets	91
Other assets	7
Intangible assets	648
Goodwill	1,257
Total assets acquired	2,469
Accounts payable	115
Accrued payroll and other employee benefits	30
Accrued vacation	39
Other accrued liabilities	58
Other long-term liabilities	54
Total liabilities assumed	296
Non-controlling interest	13
Net assets acquired	$	2,160
Amount of tax deductible goodwill	$	441

Goodwill represents intellectual capital and an acquired assembled work force. The Company inherited Engility's historical tax basis in deductible goodwill, certain other intangible assets, and net operating loss carryforwards.

The following table summarizes the fair value of intangible assets and the related weighted-average useful lives:

	Amount		Weighted-Average Amortization Period
	(in millions)		(in years)
Backlog	$	30	1
Developed technology	2		10
Customer relationships	616		14
Total intangible assets	$	648	13

The Company incurred $136 million in costs associated with the acquisition and integration of Engility. Acquisition-related expenses, all of which were incurred in fiscal year 2019, were $63 million including $31 million of debt issue costs, and $2 million in stock issue costs.

For the three and six months ended August 2, 2019, the Company incurred $8 million and $18 million, respectively, of costs in connection with the integration of Engility, primarily for strategic consulting services, severance costs, and other integration-related costs. The Company did not incur any acquisition and integration costs for the three and six months ended August 3, 2018. These costs are included in acquisition and integration costs on the condensed and consolidated statements of income.

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Legal Proceedings and Other Commitments and Contingencies (Detail) - USD ($) $ in Millions	Aug. 02, 2019	Feb. 01, 2019
Commitments And Contingencies [Line Items]
Inventories, prepaid expenses and other current assets	$ 130	$ 146
Government Investigations And Reviews
Commitments And Contingencies [Line Items]
Estimated net amounts to be refunded for potential adjustments	68
Letters of Credit
Commitments And Contingencies [Line Items]
Outstanding obligations	11
Surety Bonds
Commitments And Contingencies [Line Items]
Outstanding obligations	$ 18

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Leases Assets and Liabilities, Leases (Details) - USD ($) $ in Millions	Aug. 02, 2019	Feb. 02, 2019
Assets and Liabilities, Lessee [Abstract]
Operating Lease, Right-of-Use Asset	$ 184	$ 169
Operating Lease, Liability, Current	43	187
Operating Lease, Liability, Noncurrent	155	$ 140
Operating Lease, Liability	$ 198

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Engility Acquisition Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Aug. 02, 2019	Feb. 01, 2019	Jan. 14, 2019
Business Acquisition [Line Items]
Goodwill	$ 2,120	$ 2,120
Engility Holdings, Inc [Member]
Business Acquisition [Line Items]
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Cash and Equivalents			$ 51
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Receivables			351
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Inventory			5
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Prepaid Expense and Other Assets			5
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Assets, Other			15
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Property, Plant, and Equipment			39
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets			91
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Other Noncurrent Assets			7
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Intangible Assets, Other than Goodwill			648
Goodwill			1,257
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Assets Including Goodwill			2,469
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Current Liabilities, Accounts Payable			115
Business Combination Recognized Identifiable Assets Acquired And Liabilities Assumed Current Liabilities Accrued Payroll And Employee Benefits			30
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities, Accrued Vacation			39
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities, Other Accrued			58
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Noncurrent Liabilities, Other			54
Business Combination, Recognized Identifiable Assets Acquired and Liabilities Assumed, Liabilities			296
Business Combination, Acquisition of Less than 100 Percent, Noncontrolling Interest, Fair Value			13
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Less Noncontrolling Interest			2,160
Business Acquisition, Goodwill, Expected Tax Deductible Amount			$ 441

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Debt Obligations - Long-term Debt (Detail) - USD ($)	Aug. 02, 2019	Feb. 01, 2019
Debt Instrument [Line Items]
Principal amount of long-term debt	$ 2,060,000,000	$ 2,115,000,000
Unamortized debt issuance costs, total long-term debt	(22,000,000)	(26,000,000)
Total long-term debt	2,038,000,000	2,089,000,000
Less current portion	151,000,000	24,000,000
Debt Issuance Costs, Current, Net	0	0
Principal amount of long-term debt, net of current portion	1,909,000,000	2,091,000,000
Unamortized debt issuance costs, total long-term debt, net of current portion	(22,000,000)	(26,000,000)
Total long-term debt, net of current portion	$ 1,887,000,000	2,065,000,000
Term Loan A Facility Commitment Due October Two Thousand Twenty Three
Debt Instrument [Line Items]
Stated interest rate	3.73%
Effective interest rate	4.07%
Principal amount of long-term debt	$ 918,000,000	1,068,000,000
Unamortized debt issuance costs, total long-term debt	(10,000,000)	(14,000,000)
Total long-term debt	$ 908,000,000	1,054,000,000
Term Loan B Facility Due October Two Thousand Twenty Five
Debt Instrument [Line Items]
Stated interest rate	3.98%
Effective interest rate	4.19%
Principal amount of long-term debt	$ 1,042,000,000	1,047,000,000
Unamortized debt issuance costs, total long-term debt	(12,000,000)	(12,000,000)
Total long-term debt	$ 1,030,000,000	1,035,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Stated interest rate	3.86%
Principal amount of long-term debt	$ 100,000,000	0
Unamortized debt issuance costs, total long-term debt	0	0
Total long-term debt	100,000,000	$ 0
Line of Credit [Member] | August 2019 Credit Facility
Debt Instrument [Line Items]
Credit Facility, Maximum Borrowing Capacity	2,400,000,000
Line of Credit [Member] | Revolving Credit Facility | August 2019 Credit Facility
Debt Instrument [Line Items]
Credit Facility, Maximum Borrowing Capacity	400,000,000
Line of Credit Facility, Remaining Borrowing Capacity	300,000,000
Line of Credit [Member] | Secured Debt [Member] | Term Loan A Facility Commitment Due October Two Thousand Twenty Three
Debt Instrument [Line Items]
Debt Instrument, Face Amount	918,000,000
Line of Credit [Member] | Secured Debt [Member] | Term Loan B Facility Due October Two Thousand Twenty Five
Debt Instrument [Line Items]
Principal amount of long-term debt	$ 1,042,000,000

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Derivative Instruments Designated as Cash Flow Hedges (Tables)

6 Months Ended

Aug. 02, 2019

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments

The Company’s derivative instruments designated as cash flow hedges consist of:

							Liability Fair Value(1) at
	Notional Amount at August 2, 2019		Pay Fixed Rate		Receive Variable Rate	Settlement and Termination	August 2, 2019			February 1, 2019
	(in millions)						(in millions)
Interest rate swaps #1	$	328	2.78	%	1-month LIBOR	Monthly through July 30, 2021	$	(6	)	$	(2	)
Interest rate swaps #2	500		3.07	%	1-month LIBOR	Monthly through October 31, 2025	(56		)	(21		)
Interest rate swaps #3	525		2.49	%	1-month LIBOR	Monthly through October 31, 2023	(21		)	(1		)
Total	$	1,353					$	(83	)	$	(24	)

⁽¹⁾ 

The fair value of the fixed interest rate swaps liability is included in accounts payable and accrued liabilities on the condensed and consolidated balance sheets.

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CONDENSED AND CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions	Aug. 02, 2019	Feb. 01, 2019
Current assets:
Cash and cash equivalents	$ 179	$ 237
Receivables, net	1,033	1,050
Inventories, prepaid expenses and other current assets	130	146
Total current assets	1,342	1,433
Goodwill	2,120	2,120
Intangible assets (net of accumulated amortization of $127 million and $79 million at August 2, 2019 and February 1, 2019, respectively)	754	803
Property, plant, and equipment (net of accumulated depreciation of $172 million and $159 million at August 2, 2019 and February 1, 2019, respectively)	97	103
Other assets	314	104
Total assets	4,627	4,563
Current liabilities:
Accounts payable and accrued liabilities	738	632
Accrued payroll and employee benefits	259	241
Long-term debt, current portion (Note 7)	151	24
Total current liabilities	1,148	897
Long-term debt, net of current portion (Note 7)	1,887	2,065
Other long-term liabilities	243	102
Commitments and contingencies (Note 11)
Equity:
Common stock, $.0001 par value, 1 billion shares authorized, 58 million and 60 million shares issued and outstanding as of August 2, 2019 and February 1, 2019, respectively	0	0
Additional paid-in capital	963	1,132
Retained earnings	435	367
Accumulated other comprehensive loss	(59)	(14)
Total common stockholders' equity	1,339	1,485
Stockholders' Equity Attributable to Noncontrolling Interest	10	14
Stockholders' Equity, Including Portion Attributable to Noncontrolling Interest	1,349	1,499
Total liabilities and stockholders' equity	$ 4,627	$ 4,563

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CONDENSED AND CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions	6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018
Cash flows from operating activities:
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	$ 113	$ 98
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	70	22
Deferred income taxes	16	0
Stock-based compensation expense	20	16
Increase (decrease) resulting from changes in operating assets and liabilities:
Receivables	17	(34)
Inventory, prepaid expenses and other current assets	11	6
Other assets	27	(12)
Accounts payable and accrued liabilities	21	(36)
Accrued payroll and employee benefits	18	13
Other long-term liabilities	(40)	3
Net Cash Provided by (Used in) Operating Activities	273	76
Cash flows from investing activities:
Expenditures for property, plant, and equipment	(14)	(18)
Purchases of marketable securities	(22)	0
Sales of marketable securities	2	0
Other	(3)	1
Net Cash Provided by (Used in) Investing Activities	(37)	(17)
Cash flows from financing activities:
Dividend payments to stockholders	(44)	(27)
Principal payments on borrowings	(155)	(17)
Issuances of stock	5	3
Stock repurchased and retired or withheld for taxes on equity awards	(195)	(55)
Proceeds from borrowings	100	0
Debt issuance costs	0	(1)
Distributions to non-controlling interest	(5)	0
Net Cash Provided by (Used in) Financing Activities	(294)	(97)
Net decrease in cash, cash equivalents and restricted cash	(58)	(38)
Cash, cash equivalents and restricted cash at beginning of period	246	152
Cash, cash equivalents and restricted cash at end of period (Note 1)	$ 188	$ 114

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Earnings Per Share (Tables)

6 Months Ended

Aug. 02, 2019

Earnings Per Share [Abstract]

Reconciliation of Weighted Average Number of Shares Outstanding Used to Compute Basic and Diluted EPS

A reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS was:

	Three Months Ended		Six Months Ended
	August 2, 2019	August 3, 2018	August 2, 2019	August 3, 2018
	(in millions)
Basic weighted-average number of shares outstanding	58.6	42.5	59.0	42.4
Dilutive common share equivalents - stock options and other stock-based awards	0.5	0.7	0.6	0.9
Diluted weighted-average number of shares outstanding	59.1	43.2	59.6	43.3

Stock-Based Awards Excluded from Weighted Average Number of Shares Outstanding Used to Compute Diluted EPS

The following stock-based awards were excluded from the weighted-average number of shares outstanding used to compute diluted EPS:

	Three Months Ended		Six Months Ended
	August 2, 2019	August 3, 2018	August 2, 2019	August 3, 2018
	(in millions)
Antidilutive stock options excluded	0.3	0.1	0.3	0.2

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Income Taxes

6 Months Ended

Aug. 02, 2019

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes:

The Company's effective income tax rate was 23.3% and 21.6% for the three and six months ended August 2, 2019, respectively, and 23.1% and 17.2% for the three and six months ended August 3, 2018, respectively. The Company's effective tax rate was higher for the six months ended August 2, 2019 compared to the prior year period due principally to lower excess tax benefits related to employee share-based compensation. Tax rates for the periods ended August 2, 2019 were lower than the combined federal and state statutory rates due principally to excess tax benefits related to employee share-based compensation, research and development credits, partially offset by permanent book tax differences.

As of August 2, 2019, the balance of unrecognized tax benefits included liabilities for uncertainty in income taxes of $14 million, which is classified as other long-term liabilities on the condensed and consolidated balance sheets. Of this balance, $12 million, if recognized, would impact the effective income tax rate for the Company. While the

Company believes it has adequate accruals for uncertainty in income taxes, the tax authorities, on review of the Company’s tax filings, 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. Although the timing of such reviews is not certain, we believe it is reasonably possible that $2 million to $4 million of unrecognized tax benefits will reverse in the next 12 months due to the resolution of a tax authority examination and approximately $2 million as a result of statute of limitations expirations, along with associated interest and penalties.

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Earnings Per Share

6 Months Ended

Aug. 02, 2019

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share:

Basic earnings per share (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.

A reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS was:

	Three Months Ended		Six Months Ended
	August 2, 2019	August 3, 2018	August 2, 2019	August 3, 2018
	(in millions)
Basic weighted-average number of shares outstanding	58.6	42.5	59.0	42.4
Dilutive common share equivalents - stock options and other stock-based awards	0.5	0.7	0.6	0.9
Diluted weighted-average number of shares outstanding	59.1	43.2	59.6	43.3

The following stock-based awards were excluded from the weighted-average number of shares outstanding used to compute diluted EPS:

	Three Months Ended		Six Months Ended
	August 2, 2019	August 3, 2018	August 2, 2019	August 3, 2018
	(in millions)
Antidilutive stock options excluded	0.3	0.1	0.3	0.2

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Leases

6 Months Ended

Aug. 02, 2019

Leases [Abstract]

Leases

Leases:

The Company occupies most of its facilities under operating leases. Certain equipment also is leased under short-term or cancelable operating leases.

Effective upon the adoption of ASU 2016-02, 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 facility leases with original terms of 12 months or less. ROU assets are evaluated for impairment as a long-lived asset.

Total operating lease cost is comprised of the following:

		Three Months Ended			Six Months Ended
	Income Statement line item(s)	August 2, 2019			August 2, 2019
		(in millions)
Operating lease cost	Cost of revenues and selling, general and administrative expenses	$	17		$	33
Variable lease cost	Cost of revenues and selling, general and administrative expenses	3			7
Short-term lease cost	Cost of revenues and selling, general and administrative expenses	1			2
Sublease income	Cost of revenues and selling, general and administrative expenses	(1		)	(2		)
Total lease cost		$	20		$	40

The Company's ROU assets and lease liabilities consisted of the following:

	Balance Sheet line item	August 2, 2019
		(in millions)
Operating lease ROU asset	Other assets	$	184
Operating lease current liability	Accounts payable and accrued liabilities	43
Operating lease non-current liability	Other long-term liabilities	155
Total operating lease liabilities		$	198

Other supplemental operating lease information consists of the following:

	As of and for the six months ended
	August 2, 2019
	(dollars in millions)
Cash paid for amounts included in the measurement of operating lease liabilities	$	33
ROU assets obtained in exchange for new operating lease obligations	$	43
Weighted-average remaining lease term	5 years
Weighted-average discount rate	4.3		%

Maturities of operating lease liabilities as of August 2, 2019 were as follows:

Fiscal Year Ending	Total
	(in millions)
Remainder of 2020	$	25
2021	51
2022	44
2023	27
2024	23
Thereafter	57
Total minimum lease payments	227
Less: imputed interest	(29		)
Present value of operating lease liabilities	$	198

As of August 2, 2019, the Company has rental commitments of $1 million for facility leases that have not yet commenced. These operating leases are expected to commence in fiscal 2020 and have a weighted-average lease term of approximately 6 years.

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Business Overview and Summary of Significant Accounting Policies Significant Accounting Policies (Details) - USD ($) $ in Millions	Aug. 02, 2019	Feb. 01, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Marketable Securities, Noncurrent	$ 25	$ 4

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Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018
Disaggregation of Revenue [Line Items]
Total revenues	$ 1,594	$ 1,115	$ 3,209	$ 2,290
Prime contractor to federal government
Disaggregation of Revenue [Line Items]
Total revenues	1,405	1,014	2,839	2,091
Subcontractor to federal government
Disaggregation of Revenue [Line Items]
Total revenues	157	81	309	163
Other
Disaggregation of Revenue [Line Items]
Total revenues	32	20	61	36
Cost reimbursement
Disaggregation of Revenue [Line Items]
Total revenues	918	532	1,839	1,065
Time and materials (T&M)
Disaggregation of Revenue [Line Items]
Total revenues	321	295	646	610
Firm-fixed price (FFP)
Disaggregation of Revenue [Line Items]
Total revenues	355	288	724	615
Department of Defense
Disaggregation of Revenue [Line Items]
Total revenues	846	678	1,710	1,424
Other federal government agencies
Disaggregation of Revenue [Line Items]
Total revenues	716	417	1,438	830
Commercial, state and local
Disaggregation of Revenue [Line Items]
Total revenues	$ 32	$ 20	$ 61	$ 36

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Leases Other Supplemental Lease Information (Details) $ in Millions	6 Months Ended
	Aug. 02, 2019 USD ($)
Lessee, Lease, Description [Line Items]
LesseeOperatingLeaseNotyetCommencedValue	$ 1
Operating Lease, Payments	33
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability	$ 43
Operating Lease, Weighted Average Remaining Lease Term	5 years
Operating Lease, Weighted Average Discount Rate, Percent	4.30%
Lease Arrangement 1 [Member]
Lessee, Lease, Description [Line Items]
Lessee, Operating Lease, Lease Not yet Commenced, Term of Contract	6 years

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Changes in Accumulated Other Comprehensive Income by Component

6 Months Ended

Aug. 02, 2019

Equity [Abstract]

Changes in Accumulated Other Comprehensive Income by Component

Changes in Accumulated Other Comprehensive Loss by Component:

The following table presents the changes in accumulated other comprehensive loss attributable to the Company’s fixed interest rate swap cash flow hedges that are discussed in Note 8.

	Pre-Tax Amount
	Unrealized Gains (Losses) on Fixed Interest Rate Swap Cash Flow Hedges(1)
	(in millions)
Three months ended August 2, 2019
Balance at May 3, 2019	$	(33	)
Other comprehensive loss before reclassifications	(47		)
Amounts reclassified from accumulated other comprehensive loss	—
Net other comprehensive loss	(47		)
Balance at August 2, 2019	$	(80	)
Three months ended August 3, 2018
Balance at May 4, 2018	$	7
Other comprehensive income before reclassifications	—
Amounts reclassified from accumulated other comprehensive income	(1		)
Net other comprehensive loss	(1		)
Balance at August 3, 2018	$	6
Six months ended August 2, 2019
Balance at February 1, 2019	$	(19	)
Other comprehensive loss before reclassifications	(61		)
Amounts reclassified from accumulated other comprehensive loss	—
Net other comprehensive loss	(61		)
Balance at August 2, 2019	$	(80	)
Six months ended August 3, 2018
Balance at February 2, 2018	$	5
Other comprehensive income before reclassifications	2
Amounts reclassified from accumulated other comprehensive income	(1		)
Net other comprehensive income	1
Balance at August 3, 2018	$	6

⁽¹⁾ 

The amount reclassified from accumulated other comprehensive loss is included in interest expense.

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Stock-Based Compensation

6 Months Ended

Aug. 03, 2018

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation:

Stock Options

During the six months ended August 2, 2019, the Company granted certain employees 0.1 million stock options with a weighted-average exercise price and weighted-average grant date fair value of $75.43 and $16.82, respectively. These options will expire on the seventh anniversary of the grant date and will vest ratably on each anniversary of the grant date over a three-year period.

Restricted Stock Units (RSUs)

During the six months ended August 2, 2019, the Company granted certain employees 0.4 million RSUs with a weighted-average grant date fair value of $75.34, which will vest ratably on each anniversary of the grant date over a three-year period.

Performance Shares

During the six months ended August 2, 2019, the Company granted to certain employees 0.1 million performance share awards with a grant date fair value of $79.04 per award. These awards will cliff vest at the end of the third fiscal year following the grant date, subject to meeting the minimum service requirements and the achievement of certain annual and cumulative financial metrics of the Company’s performance, with the number of shares ultimately issued, if any, ranging up to 150% of the specified target shares.

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Business Overview and Summary of Significant Accounting Policies

6 Months Ended

Aug. 02, 2019

Accounting Policies [Abstract]

Business Overview and Summary of Significant Accounting Policies

Business Overview and Summary of Significant Accounting Policies:

Overview

Science Applications International Corporation (collectively, with its consolidated subsidiaries, the “Company”) is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S. government. The Company provides engineering and integration services for large, complex projects and offers a broad range of services with a targeted emphasis on higher-end, differentiated technology services. The Company is organized as a matrix comprised of three customer facing operating segments supported by a solutions and technology group. Each of the Company’s three customer facing operating segments is focused on providing the Company’s comprehensive technical and enterprise IT service offerings to one or more agencies of the U.S. federal government. The Company's operating segments are aggregated into one reportable segment for financial reporting purposes.

On January 14, 2019, the Company completed the acquisition of Engility Holdings, Inc. (collectively with its consolidated subsidiaries, "Engility"), which provides increased customer and market access, as well as increased scale in strategic business areas of national interest, such as defense, federal civilian agencies, intelligence and space.

Principles of Consolidation and Basis of Presentation

The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission for interim reporting purposes. References to “financial statements” refer to the condensed and consolidated financial statements of the Company, which include the statements of income and comprehensive income, balance sheets, statements of equity and statements of cash flows. These financial statements were prepared in accordance with U.S. generally accepted accounting principles (GAAP). All intercompany transactions and account balances within the Company have been eliminated. The financial statements are unaudited, but in the opinion of management include all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended February 1, 2019.

Non-controlling Interest. As a result of the acquisition of Engility, the Company holds a 50.1% majority interest in Forfeiture Support Associates J.V. (FSA). The results of operations of FSA are included in the Company's condensed and consolidated statements of income and comprehensive income. The non-controlling interest reported on the condensed and consolidated balance sheets represents the portion of FSA's equity that is attributable to the non-controlling interest.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. Significant estimates inherent in the preparation of the financial statements may include, but are not limited to estimated profitability of long-term contracts, income taxes, fair value measurements, fair value of goodwill and other intangible assets, pension and defined benefit plan obligations, and contingencies. Estimates have been prepared by management on the basis of the most current and best available information at the time of estimation and actual results could differ from those estimates.

Reporting Periods

The Company utilizes a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2019 began on February 3, 2018 and ended on February 1, 2019, while fiscal 2020 began on February 2, 2019 and ends on January 31, 2020.

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 or canceled. See Note 8 for further discussion on the Company’s derivative instruments designated as cash flow hedges.

Inventory

Inventory is substantially comprised of finished goods inventory purchased for resale to customers, such as tires and lubricants, and is valued at the lower of cost or net realizable value, generally using the average method. The Company evaluates current inventory against historical and planned usage to estimate the appropriate provision for obsolete inventory.

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 2, 2019 and February 1, 2019, the fair value of our investments total $25 million and $4 million, respectively, and was included in other assets on the condensed and consolidated balance sheets. The Company's investments are primarily held in a custodial account, which includes investments to fund our deferred compensation plan liabilities.

Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed and consolidated balance sheets for the periods presented:

	August 2, 2019		February 1, 2019
	(in millions)
Cash and cash equivalents	$	179	$	237
Restricted cash included in other assets	9		9
Cash, cash equivalents and restricted cash	$	188	$	246

Accounting Standards Updates

In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which supersedes the existing lease accounting standards (Topic 840). Under the new guidance, a lessee will be required to recognize lease assets and lease liabilities for all leases with lease terms in excess of twelve months. The recognition, measurement and presentation of expenses and cash flows arising from a lease by a lessee primarily will depend on its classification as either a finance lease or operating lease. The criteria for distinction between a finance lease and an operating lease are substantially similar to existing lease guidance for capital leases and operating leases. Some changes to lessor accounting have been made to conform and align that guidance with the lessee guidance and other areas within GAAP, such as Revenue from Contracts with Customers (Topic 606). In July 2018, the FASB provided an optional transition method of adoption, permitting entities to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption as opposed to the beginning of the earliest period presented in the financial statements.

ASU 2016-02 became effective for the Company in the first quarter of fiscal 2020. The Company adopted the standard using the optional transition method. Accordingly, the prior periods were not recast, and all prior period amounts disclosed are presented under ASC 840. The Company elected certain practical expedients provided under the standard, including the package of practical expedients, which allows entities not to reassess whether existing contracts are or contain leases. Therefore, at adoption, existing leases have been identified using the criteria of ASC 840.

As a result of the adoption of the new standard, on February 2, 2019, the Company recognized approximately $169 million of right of use operating assets and $187 million of operating lease liabilities, of which $140 million was noncurrent. The adoption did not have a material impact on retained earnings, the condensed and consolidated statements of income, or the condensed and consolidated statements of cash flows.

In August 2018, the FASB issued ASU No. 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the capitalization requirements for implementation costs incurred in a hosting arrangement that is a service contract with the existing capitalization requirements for implementation costs incurred to develop or obtain internal-use software (Subtopic 350-40). ASU 2018-15 becomes effective for the Company in the first quarter of fiscal 2021 and may be adopted either retrospectively or prospectively. Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its financial statements.

Other Accounting Standards Updates effective after August 2, 2019 are not expected to have a material effect on the Company’s financial statements.

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Business Overview and Summary of Significant Accounting Policies ASC 842 Impact (Details) - USD ($) $ in Millions	Aug. 02, 2019	Feb. 02, 2019
ASC 842 Adoption Impact [Abstract]
Operating Lease, Right-of-Use Asset	$ 184	$ 169
Operating Lease, Liability, Current	43	187
Operating Lease, Liability, Noncurrent	$ 155	$ 140

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Revenues - Contract Related Assets and Liabilities (Details) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Aug. 02, 2019	Aug. 02, 2019	Aug. 03, 2018	Feb. 01, 2019
Disaggregation of Revenue [Line Items]
Allowance for doubtful accounts	$ 2	$ 2		$ 2
Contract with Customer, Liability, Revenue Recognized	6	19	$ 9
Receivables, net
Disaggregation of Revenue [Line Items]
Billed and billable receivables, net	760	760		740
Contract assets	273	273		310
Accounts payable and accrued liabilities
Disaggregation of Revenue [Line Items]
Contract liabilities - current	34	34		34
Other long-term liabilities
Disaggregation of Revenue [Line Items]
Contract liabilities - non-current	9	9		6
Contract retentions | Other assets
Disaggregation of Revenue [Line Items]
Contract assets	$ 16	$ 16		$ 13

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Leases Operating Lease Liabilities, Payments Due (Details) $ in Millions	Aug. 02, 2019 USD ($)
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Lessee, Operating Lease, Liability, Payments, Remainder of Fiscal Year	$ 25
Operating Leases, Future Minimum Payments, Due in Two Years	51
Operating Leases, Future Minimum Payments, Due in Three Years	44
Operating Leases, Future Minimum Payments, Due in Four Years	27
Operating Leases, Future Minimum Payments, Due in Five Years	23
Operating Leases, Future Minimum Payments, Due Thereafter	57
Operating Leases, Future Minimum Payments Due	227
Lessee, Operating Lease, Liability, Undiscounted Excess Amount	(29)
Operating Lease, Liability	$ 198

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Engility Acquisition Fair Value of Intangible Assets and Related Weighted Average Useful Lives (Details) - Engility Holdings, Inc [Member] $ in Millions	Jan. 14, 2019 USD ($)
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired	$ 648
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	13 years
Order or Production Backlog [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired	$ 30
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	1 year
Technology-Based Intangible Assets [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired	$ 2
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	10 years
Customer Relationships [Member]
Business Acquisition [Line Items]
Finite-lived Intangible Assets Acquired	$ 616
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life	14 years

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Debt Obligations - Narrative (Detail) - USD ($)	3 Months Ended
	Nov. 01, 2019	Aug. 02, 2019	Feb. 01, 2019	Jan. 14, 2019
Debt Instrument [Line Items]
Principal amount of long-term debt		$ 2,060,000,000	$ 2,115,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Principal amount of long-term debt		100,000,000	0
August 2019 Credit Facility | Line of Credit [Member]
Debt Instrument [Line Items]
Credit Facility, Maximum Borrowing Capacity		2,400,000,000
August 2019 Credit Facility | Revolving Credit Facility | Line of Credit [Member]
Debt Instrument [Line Items]
Credit Facility, Maximum Borrowing Capacity		400,000,000
Term Loan A Facility Commitment Due October Two Thousand Twenty Three
Debt Instrument [Line Items]
Principal amount of long-term debt		918,000,000	1,068,000,000
Term Loan A Facility Commitment Due October Two Thousand Twenty Three | Third Amended Credit Agreement
Debt Instrument [Line Items]
Principal amount of long-term debt				$ 1,100,000,000
Term Loan B Facility Due October Two Thousand Twenty Five
Debt Instrument [Line Items]
Principal amount of long-term debt		1,042,000,000	$ 1,047,000,000
Term Loan B Facility Due October Two Thousand Twenty Five | Secured Debt [Member] | Line of Credit [Member]
Debt Instrument [Line Items]
Principal amount of long-term debt		$ 1,042,000,000
Subsequent Event | August 2019 Credit Facility | Revolving Credit Facility | Line of Credit [Member]
Debt Instrument [Line Items]
Repayments of Lines of Credit	$ 50,000,000

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Debt Obligations (Tables)

6 Months Ended

Aug. 02, 2019

Debt Disclosure [Abstract]

Long-term Debt

The Company’s long-term debt as of the dates presented was as follows:

	August 2, 2019											February 1, 2019
	Stated interest rate		Effective interest rate		Principal		Unamortized debt issuance costs			Net		Principal		Unamortized debt issuance costs			Net
					(in millions)
Term Loan A Facility due October 2023	3.73	%	4.07	%	$	918	$	(10	)	$	908	$	1,068	$	(14	)	$	1,054
Term Loan B Facility due October 2025	3.98	%	4.19	%	1,042		(12		)	1,030		1,047		(12		)	1,035
Revolving Credit Facility due October 2023	3.86	%			100		—			100		—		—			—
Total long-term debt					$	2,060	$	(22	)	$	2,038	$	2,115	$	(26	)	$	2,089
Less current portion					151		—			151		24		—			24
Total long-term debt, net of current portion					$	1,909	$	(22	)	$	1,887	$	2,091	$	(26	)	$	2,065

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CONDENSED AND CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018
Statement of Comprehensive Income [Abstract]
Revenues	$ 1,594	$ 1,115	$ 3,209	$ 2,290
Cost of revenues	1,409	1,003	2,844	2,077
Selling, general and administrative expenses	82	38	159	73
Acquisition and integration costs (Note 4)	8	0	18	0
Operating income	95	74	188	140
Interest expense	22	10	47	22
Other (income) expense, net	(1)	0	(3)	(1)
Income before income taxes	74	64	144	119
Provision for income taxes (Note 6)	(17)	(15)	(31)	(21)
Net Income (Loss), Including Portion Attributable to Noncontrolling Interest	57	49	113	98
Net Income (Loss) Attributable to Noncontrolling Interest	0	0	1	0
Net income	$ 57	$ 49	$ 112	$ 98
Earnings per share (Note 2):
Basic (in dollars per share)	$ 0.97	$ 1.15	$ 1.90	$ 2.31
Diluted (in dollars per share)	$ 0.96	$ 1.13	$ 1.88	$ 2.26

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CONDENSED AND CONSOLIDATED STATEMENT OF EQUITY (Parenthetical) - $ / shares	3 Months Ended		6 Months Ended
	Aug. 02, 2019	Aug. 03, 2018	Aug. 02, 2019	Aug. 03, 2018
Statement of Stockholders' Equity [Abstract]
Cash dividends paid per share (in dollars per share)	$ 0.37	$ 0.31	$ 0.74	$ 0.62
Cash dividends declared per share (in dollars per share)	$ 0.37	$ 0.31	$ 0.74	$ 0.62

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Business Overview and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Aug. 02, 2019

Accounting Policies [Abstract]

Reconciliation of Cash, Cash Equivalents and Restricted Cash

The following table provides a reconciliation of cash, cash equivalents and restricted cash to amounts reported within the condensed and consolidated balance sheets for the periods presented:

	August 2, 2019		February 1, 2019
	(in millions)
Cash and cash equivalents	$	179	$	237
Restricted cash included in other assets	9		9
Cash, cash equivalents and restricted cash	$	188	$	246