What changed in this filing

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Item 1. Business

2023-04-03 compared with 2022-03-28 · 77 added, 87 removed, 179 unchanged (48% of the section changed)

Science Applications International Corporation (herein referred to as “SAIC,” the “Company,” “we,” “us,” or “our”) is a leading provider of technical, engineering and enterprise information technology (IT) services primarily to the U.S.

As a technology integrator, we provide engineering, systems integration and information technology offerings for large, complex government projects and offer a broad range of services with a targeted emphasis on higher-end, differentiated technology services.

The Company provides these services for large, complex projects with a targeted emphasis on higher-end, differentiated technology services and solutions that accelerate and transform secure and resilient digital environments through system development, modernization, integration, and sustainment to drive enterprise and mission outcomes.

Our end-to-end enterprise IT offerings span the entire spectrum of our customers' IT infrastructure.

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We deploy our tools and processes enterprise-wide and emphasize a consistent approach to planning, designing and delivering solutions and services to our customers.

We hold certifications from the International Organization for Standardization (including ISO 9001, ISO/IEC 27001, ISO 20000-1 and AS9100D), and from the Capability Maturity Model Integration Institute as a CMMI®-DEV Maturity Level 3 organization.

We hold certifications from the International Organization for Standardization (including ISO 9001, ISO/IEC 27001, and AS9100D), and from the Capability Maturity Model Integration Institute as a CMMI®-DEV Maturity Level 3 organization.

The Company is organized as a matrix comprised of two customer facing operating sectors supported by an enterprise solutions and operations organization.

The two operating sectors are responsible for customer relationships, business development and program management, and delivery and execution, while the enterprise solutions and operations organization manages the development of our offerings, solutions and capabilities.

Each of the Company’s two operating sectors is focused on providing the Company’s comprehensive technical, engineering and enterprise IT service offerings to one or more agencies of the U.S federal government.

Each of the Company’s two customer facing operating sectors is focused on providing both (1) growth and technology accelerating solutions and (2) core IT service offerings to one or more agencies of the U.S.

federal government.

Growth and technology accelerating solutions include the delivery of secure cloud modernization, outcome based enterprise IT as-a-service, and the integration, production and modernization of defense systems.

Core IT services include systems engineering, the operation and maintenance of existing IT systems and networks, and logistics and supply chain solutions.

The Company's operating sectors are aggregated into one reportable segment for financial reporting purposes.

For additional discussion and analysis related to recent business developments, see “Economic Opportunities, Challenges and Risks” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this report.

For additional discussion and analysis related to recent business developments, see “Economic Opportunities, Challenges, and Risks” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of this report.

Key Customers

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government, its agencies and other customers, including those comprising more than 10% of total revenues for each of the periods presented were approximately:

January 28, 2022 January 29, 2021 January 31, 2020

February 3, 2023 January 28, 2022 January 29, 2021

Army 15 % 15 % 17 %

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SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Our business is heavily regulated and we must comply with and are affected by laws and regulations, including Federal Acquisition Regulations (FAR) and Cost Accounting Standards (CAS), relating to the award, administration and performance of U.S.

Our business is heavily regulated and we must comply with and are affected by laws and regulations, including Federal Acquisition Regulations (FAR) and U.S.

government Cost Accounting Standards (CAS), relating to the award, administration and performance of U.S.

government and other contracts.

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In order to help ensure compliance with these complex laws and regulations, we have established policies and procedures that address our approach to meeting these requirements and also administer a robust ethics and compliance training program to maintain a compliance-oriented workforce.

These regulations and risks affecting our business are described in more detail under “Risk Factors” in this report.

These regulations and risks affecting our business are described in more detail under “Risk Factors” in Part I, Item 1A of this report.

We must comply with and are affected by laws and regulations relating to the formation, administration and performance of U.S.

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Given the relative amount of risk assumed by the contractor, cost-reimbursement and T&M contracts generally have lower profitability than FFP contracts.

For the proportionate amount of revenues derived from each type of contract for the last three fiscal years, see “Other Key Performance Measures—Contract Types” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this report.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Backlog represents the estimated amount of future revenues to be recognized under negotiated contracts as work is performed.

Our backlog consists of funded backlog and negotiated unfunded backlog.

At January 28, 2022 and January 29, 2021 our total backlog was $24.1 billion and $21.5 billion, respectively.

For a complete description of our backlog, see “Other Key Performance Measures—Net Bookings and Backlog” in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part II of this report.

Competition for contracts is intense and we often compete against a large number of established multinational companies, which may have greater name recognition, financial resources and larger technical staffs than we do.

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In the case of some subcontracts that we perform, the prime contractor may also have certain rights to the programs and solutions that we develop under the subcontract.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

People and Culture

SAIC’s purpose is to advance the power of technology and innovation to serve and protect our world .

Our purpose is to advance the power of technology and innovation to serve and protect our world .

We achieve our purpose with and through our people, who are fundamental to our success.

Our values underpin our culture and are at the heart of how we operate:

Love what you do

• Empowerment:

Decide and act

Embrace differences

• Innovation:

Think courageously

Attracting and retaining top talent is an essential element of SAIC’s business strategy and our value proposition for our shareholders, customers, and employees.

To deliver on this strategy, we seek to be a company that provides meaningful work and purpose, and creates a fulfilling and differentiated experience for our employees.

Our investments in our employees drive a productive, innovative and inclusive culture, where our people are empowered to be their best authentic selves and to do their best work.

As of January 28, 2022, we employed approximately 26,000 employees, of which 93% are full time with the majority l ocated in the United States.

To cultivate a differentiated employee experience, we are focused on fostering a flexible work environment, strengthening diversity, equity and inclusion (DE&I), and enhancing employee well-being.

Fostering flexibility

The pandemic has caused people to re-evaluate their priorities and expectations about work.

Flexibility of work schedule and location is a key reason why people join and stay at companies, and we are creating an environment at SAIC where our employees can use the power of flexibility to thrive.

We implemented flexible work schedules including a 4-day workweek and other schedule options and increased remote and hybrid work opportunities.

Our definition of flexibility is not a one-size fits all, rather it is tailored and nurtured through the engagement between our employees and their leaders.

Flexibility has helped us widen the talent pool and attract and retain highly skilled people in extremely sought after disciplines such as science, technology, engineering and cybersecurity.

During fiscal 2022, we hired more than 5,800 new employees and kept voluntary turnover below our industry’s average rate.

Strengthening diversity, equity, and inclusion

Our ongoing diversity, equity, and inclusion efforts demonstrate our continuing promise to share our intentions, to hold ourselves accountable, and to be transparent about both our progress and our areas of opportunity.

We believe diversity creates unparalleled innovation and is critical to the delivery of exceptional business results.

We seek to drive tangible change through our commitments to:

Fight racism, bias, and prejudice in our workplace.

Make SAIC more inclusive and diverse.

Support non-profit organizations that are uplifting people of color in our communities.

Measure and hold ourselves accountable for results.

The strength of our leadership is greatest when it fully reflects the diversity of our workforce.

In fiscal 2022, we established goals to achieve parity in the representation of women and people of color between our leadership and non-leadership roles within five years.

We made meaningful progress toward our goals this year, with women now representing 27% of our leadership and people of color representing 22%.

While we have achieved parity between women in leader and non-leader roles and made considerable progress toward our people of color leader representation goal, we know there is more work to be done.

To hold ourselves

Our values of passion, empowerment, integrity, inclusion and innovation underpin our culture and are at the heart of how we operate.

Attracting and retaining top talent is an essential element of our business strategy and part of our value proposition for our shareholders, customers and employees.

To deliver on this strategy, we seek to be a company that provides meaningful work and purpose by continuing to strengthen our diversity, equity and inclusion efforts;

nurturing our people through every aspect of the talent lifecycle;

creating a culture where our people are empowered to be their authentic selves and to do their best work;

and providing benefits and programs that enhance the employee experience and their well-being.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

accountable for results, SAIC’s executive compensation incentive plans are tied to meeting our diversity goals.

As of January 28, 2022, our diversity representation was:

Advancing Diversity, Equity and Inclusion

Our ongoing diversity, equity and inclusion efforts demonstrate our continuing commitment to hold ourselves accountable and to be transparent about both our progress and our areas of opportunity.

Diversity creates innovation and is critical to the delivery of exceptional business results.

In fiscal 2023, we accomplished significant advancement of workforce diversity through internal development, talent acquisition and employee engagement at all levels of the enterprise.

In fiscal 2022, to ensure our leadership reflects the diversity of the workforce, we established goals to achieve parity in the representation of women and people of color between our leader and non-leadership roles by the end of fiscal 2026.

In fiscal 2023, we achieved parity for women ahead of our committed timeline as we increased women in leadership to 28%.

In addition, we have increased people of color in leadership 400 basis points over the past two years.

To hold ourselves accoun table for our results, our executive compensation incentive plans are tied to meeting our diversity goals.

As of February 3, 2023, our diversity representation was:

SAIC Leaders 28% Women 23% People of Color

SAIC Non-leader Employees 27% Women 33% People of Color

To build our diversity pipeline, we instituted a new approach to ensure SAIC job descriptions, recruiting tools and processes eliminated the potential for bias, and we required a diverse slate of candidates for leadership roles.

We launched the AcceleratHER Women's Leadership Academy, a nomination-based development and mentoring program focused on accelerating the advancement of SAIC's high-potential women.

Among our efforts to fight racism, bias, and prejudice in the workplace, we added unconscious bias training as a requirement for all new employees and continued to require that all leaders complete our “From Unconscious Bias to Inclusion” training course.

As an important demonstration of SAIC’s commitment to advance diversity, equity and inclusion, we added Juneteenth as a paid holiday for our employees, being one of the first in our industry to do so.

Our employees are encouraged to actively participate in our multiple employee resource groups (ERG) where they can enhance their personal networks and their sense of belonging.

This year, we added a new accessibility ERG to advocate and support employees and their family members with visible and non-visible disabilities including mental health and neurodiversity.

Our progress on our DE&I initiatives has been recognized:

SAIC is a Forbes 2022 Best Large Employers;

a Forbes America’s Best Employers for Veterans;

a Human Rights Campaign Best Places to Work for LGBTQ Equality;

and a Forbes Best Employers for Diversity.

We are honored that 23% of our employees are veterans of the U.S.

armed forces.

Enhancing employee well-being

Through our annual culture survey, we gather confidential feedback from our employees to learn how we can improve our efforts to provide an exceptional employee experience.

To ensure all levels of management understand employee sentiment, every individual leader receives aggregated results to develop an action plan to address their team’s needs.

We are committed to developing a diverse leadership team from within our existing workforce.

Now in its second year, the Company’s AcceleratHER Women’s Leadership Academy program welcomed its second cohort in 2022.

This program is for high-performing, early to mid-career women who are on track to progress to leadership roles.

To meet our commitment to enhance our diversity, equity and inclusion in our hiring efforts, the Company continues to ensure our job descriptions, recruiting tools and processes help eliminate the potential for bias, and we actively promote diverse slates of candidates for leadership roles.

To cultivate inclusion, we have seven active Employee Resource Groups (ERGs) to allow our employees to foster connections with their fellow colleagues and bring their authentic selves to work.

We encourage our employees to actively participate in these ERGs, and as a result in fiscal 2023, our ERGs experienced a 13% year-over-year increase in engagement, which ultimately strengthens employee retention.

Third-parties acknowledge SAIC’s commitment to an inclusive workforce:

We are very proud that SAIC was on Forbes 2022 list of 500 Best Employers for Diversity and its Best Employers for Veterans;

LATINA Style’s Top 50 Best Companies for Latinas;

and No.1 on DiversityInc’s 2022 Top Companies for Veterans.

For the fourth consecutive year, SAIC received a score of 100% on the Human Rights Campaign Foundation’s 2021 Corporate Equality Index (CEI), which is the most recent year for this recognition and is the nation’s premier benchmarking survey and report measuring corporate policies and practices related to LGBTQ workplace equality.

Nurturing the Talent Lifecycle

At every point in the talent lifecycle, we are committed to creating an inclusive workforce culture that attracts highly skilled, exceptional talent and develops and sustains the critical skills of our employees to drive engagement and retention.

During fiscal 2023, we hired approximately 5,800 new e mployees and we are an industry leader in the retention of our employees.

Employee referrals often result in some of our best performing new hires.

We invest in our people through technical and professional skills training, leadership development programs, higher education programs and tuition assistance programs for continuing education or industry certification.

In fiscal 2023, our employees completed approximately 129,000 hours of training that included over 7,800 hours of leadership specific development for aspiring managers.

Enhancing Culture and Employee Experience

Through our annual culture and engagement survey, we gather confidential feedback from our employees to learn and take action on how we can improve our efforts to create an authentic culture and provide an exceptional employee experience.

To ensure all levels of management understand employee sentiment, leaders receive aggregated results to develop an action plan to address their team’s needs.

Strengths and opportunities are identified, leading to focused investments to build on our cultural strengths and address areas for improvement.

Training to upskill our leaders in coaching, enhancing team well-being, and engaging hybrid teams inclusively was implemented this year as a result of survey feedback.

Additionally, we invest in our people through technical and professional skills training, leadership development programs, higher education programs and tuition assistance programs for continuing education or industry certification.

In fiscal 2022, our employees completed approximately 134,000 hours of training including 55,000 hours of ethics and compliance training.

Our leaders completed over 11,000 hours of leadership development training.

SAIC provides wide-ranging options to support employees’ well-being, including an Employee Assistance Program and a wellness program.

This year, based on employee feedback, we substantially raised paid family leave to further support parents and multi-generational families and offered company-subsidized backup child and elder care.

Additionally, for the second year in a row, SAIC is fully covering the increased costs of employee premiums in the Company’s medical insurance plans and holding employee premiums flat.

Employee health and safety is paramount to our business and contributes to our employees’ well-being.

We encourage employees to prevent workplace hazards and engage in health and wellness initiatives.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Inclusion and engagement are often witnessed through employee volunteering and philanthropy.

Our people embrace our legacy of community involvement and philanthropy.

Last year they volunteered more than 26,000 hours and donated both their time and money to causes circled around SAIC’s three pillars of focus:

military heroes, community wellness, and science, technology, engineering and mathematics (STEM).

As a key component of our culture and at the core of our commitment to our employees is the SAIC Foundation, a public 501(c)(3) organization to address the unforeseen financial impact on employees and their families.

The SAIC Foundation continues its work to help employees and their dependents by providing emergency funds to help them when financial hardships or natural disasters arise.

In fiscal 2023, the Foundation awarded 26 grants or $69,000 in direct support to our employees.

Supporting Well-being

We provide wide-ranging options to support employees’ well-being, including an Employee Assistance Program and a wellness program.

For the third consecutive year, we are fully covering the increased costs of employee premiums in the Company’s medical insurance plans, holding employee premiums flat.

Last year, based on employee feedback, we substantially raised paid family leave to further support parents and multi-generational families and offered company-subsidized backup child and elder care.

This year, we significantly expanded military leave for our employees who continue to bravely serve our nation.

Employee health and safety is always paramount to our business and to our employees’ well-being.

We encourage employees to participate in health and wellness initiatives, and actively work to prevent workplace hazards.

Throughout the COVID-19 pandemic, our priority has been the safety and well-being of our employees and business partners.

We continue to closely monitor COVID-19 matters and provide comprehensive resources and programs for managing through the pandemic, working virtually and handling associated stress as well as sharing timely information on the topic.

While all aspects of the COVID-19 virus have notably decreased, we continue to monitor COVID-19 matters and provide resources and programs as appropriate.

Research and Development

For information related to our research and development activities, see Note 1 to the consolidated financial statements contained within this report.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

government’s fiscal year ends on September 30.

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Our operations are subject to various foreign, federal, state and local environmental protection and health and safety laws and regulations.

SAIC is committed to being a good steward of the environment through assessing, mitigating and reducing the impact we have on the world around us.

Due to the nature of our business, SAIC has limited exposure to environmental risks, yet we set self-imposed goals related to the reduction of greenhouse gas emissions, energy conservation, recycling and other important environmental initiatives.

In 2014, SAIC set a goal of reducing greenhouse gas emissions by 15% by 2025 and exceeded that goal by reaching the reduction of 25% in 2016.

To further encourage cuts to our carbon footprint, we used 2019 as a new baseline and made significant progress in reducing emissions in 2020.

Specifically, direct emissions from owned or controlled sources (Scope 1) were 25% below 2019 emissions levels, and indirect emissions from purchased electricity (Scope 2) were 21% below 2019 levels.

For energy conservation, SAIC’s efforts are sharply focused on electrical energy consumption.

We track and evaluate electricity consumption and efficiency at those facilities over which we have operational control.

In calendar year 2020, partially due to decreased facility use as a result of the COVID-19 pandemic, SAIC reduced its electrical energy consumption by 3% from 2019 levels, with a total consumption of 34,813,703 kWh.

For additional information regarding environmental matters, see SAIC's 2022 Corporate Responsibility Report, which is expected to be issued during the second quarter of fiscal 2023 and will be available on our website at www.saic.com .

The information on our website is not incorporated by reference into and is not a part of this report.

Although we do not currently anticipate that compliance costs or the liabilities associated with environmental laws or climate change will adversely affect our business, financial position, and results of operations and/or cash flows, it is possible that we may incur material costs or liabilities in the future.

These regulations and risks are described in more detail under “Risk Factors” in this report.

These regulations and risks are described in more detail under “Risk Factors” in Part I, Item 1A of this report.

We are committed to being a good steward of the environment through assessing, mitigating and reducing the impact we have on climate change and the physical environment in which we operate.

Our direct emissions from owned or controlled sources (Scope 1) are used in the ordinary course of business and consist primarily of natural gas emissions from some of our facilities.

Indirect emissions from purchased electricity (Scope 2) are related to ongoing business operations at our various facilities.

SAIC measures, monitors and tracks our greenhouse gas (GHG) emissions (Scope 1 and Scope 2) and publicly discloses those emissions.

Given our recent acquisition activities, in 2019 we established a new corporate goal of an additional 15% reduction by 2025 for Scope 1 and Scope 2 emissions.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

Calendar year 2021 is our most recently disclosed data on GHG and reflects a 30% decrease in combined Scope 1 and Scope 2 emissions from our 2019 baseline.

We track and evaluate electricity consumption and efficiency at facilities where we have operational control.

In calendar year 2021, we reduced our electrical energy consumption by 10.5% from 2020 levels through our ongoing and consistent efforts across our portfolio to improve operating efficiencies including optimizing space utilization, deploying energy efficient lighting and implementing programs addressing after-hours setback and controls for heating and cooling.

SAIC encourages recycling and responsible disposal of non-hazardous waste and works to reduce waste through several initiatives, including leveraging remote work environments, promoting electronic equipment refurbishment programs and implementing programming to reduce paper usage.

Executive Officers

For information about our executive officers, see “Directors, Executive Officers and Corporate Governance” in Part III of this report.

For information about our executive officers, see “Directors, Executive Officers and Corporate Governance” in Part III, Item 10 of this report.

Company Website and Available Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business