What changed in this filing

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Item 1. Financial Statements

2025-06-02 compared with 2024-12-05 · 126 added, 365 removed, 397 unchanged (55% of the section changed)

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended Nine Months Ended

2024 November 3,

2023 November 1,

2024 November 3,

Three Months Ended

(in millions, except per share amounts)

2 unchanged sentences

Selling, general and administrative expenses 89 85

(Gain) loss on divestitures, net of transaction costs — — — ( 240 )

Other operating (income) expense

( 6 ) ( 1 ) ( 10 ) ( 1 )

Operating income 121 131

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended Nine Months Ended

2024 November 3,

2023 November 1,

2024 November 3,

Three Months Ended

(in millions)

2 unchanged sentences

Net unrealized (loss) gain on derivative instruments

( 1 ) ( 3 ) ( 6 ) ( 2 )

Total other comprehensive (loss) income, net of tax

( 1 ) ( 3 ) ( 6 ) ( 2 )

Comprehensive income $ 67 $ 80

3 unchanged sentences

CONDENSED CONSOLIDATED BALANCE SHEETS

2024 February 2,

2025 January 31,

(in millions)

6 unchanged sentences

Intangible assets, net 750 779

Property, plant, and equipment (net of accumulated depreciation of $ 197 million and $ 184 million at November 1, 2024 and February 2, 2024, respectively)

Property, plant, and equipment (net of accumulated depreciation of $ 206 million and $ 200 million at May 2, 2025 and January 31, 2025, respectively)

Operating lease right of use assets 161 164

13 unchanged sentences

Commitments and contingencies (Note 11)

Common stock, $ 0.0001 par value, 1 billion shares authorized, 49 million and 52 million shares issued and outstanding as of November 1, 2024 and February 2, 2024, respectively

Common stock, $ 0.0001 par value, 1 billion shares authorized, 47 million and 48 million shares issued and outstanding as of May 2, 2025 and January 31, 2025, respectively

Additional paid-in capital — —

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comprehensive

income (loss) Non-controlling

interest Total

income (loss) Total

(in millions)

Balance at August 2, 2024 50 $ 63 $ 1,551 $ 11 $ — $ 1,625

Net income — — 106 — — 106

Issuances of stock — 5 — — — 5

Other comprehensive loss, net of tax

— — — ( 1 ) — ( 1 )

Cash dividends of $ 0.37 per share

— — ( 18 ) — — ( 18 )

Stock-based compensation, net of shares withheld for taxes (1)

— 11 — — — 11

Repurchases of stock ( 1 ) ( 79 ) ( 37 ) — — ( 116 )

Balance at November 1, 2024 49 $ — $ 1,602 $ 10 $ — $ 1,612

Balance at February 2, 2024 52 $ 337 $ 1,432 $ 16 $ — $ 1,785

Balance at January 31, 2025 48 $ — $ 1,565 $ 12 $ 1,577

Net income — — 68 — 68

1 unchanged sentence

Other comprehensive loss, net of tax — — — ( 1 ) ( 1 )

— — — ( 6 ) — ( 6 )

Cash dividends of $ 0.37 per share

3 unchanged sentences

Repurchases of stock ( 1 ) ( 4 ) ( 121 ) — ( 125 )

Balance at November 1, 2024 49 $ — $ 1,602 $ 10 $ — $ 1,612

Balance at August 4, 2023 53 $ 480 $ 1,340 $ 23 $ — $ 1,843

Net income — — 93 — — 93

Issuances of stock — 4 — — — 4

Other comprehensive income, net of tax

— — — ( 3 ) — ( 3 )

Cash dividends of $ 0.37 per share

— — ( 20 ) — — ( 20 )

Stock-based compensation, net of shares withheld for taxes (1)

— 14 — — — 14

Repurchases of stock ( 1 ) ( 103 ) — — — ( 103 )

Balance at November 3, 2023 52 $ 395 $ 1,413 $ 20 $ — $ 1,828

Balance at May 2, 2025 47 $ — $ 1,494 $ 11 $ 1,505

Balance at February 2, 2024 52 $ 337 $ 1,432 $ 16 $ 1,785

2 unchanged sentences

Other comprehensive income, net of tax

— — — ( 2 ) — ( 2 )

Cash dividends of $ 0.37 per share

3 unchanged sentences

Repurchases of stock ( 1 ) ( 81 ) — — ( 81 )

Deconsolidation of non-controlling interest — — — — ( 10 ) ( 10 )

Balance at November 3, 2023 52 $ 395 $ 1,413 $ 20 $ — $ 1,828

(1) During the three months ended November 1, 2024 and November 3, 2023, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 2 million and $ 1 million, respectively.

During the nine months ended November 1, 2024 and November 3, 2023, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 25 million and $ 21 million, respectively.

Balance at May 3, 2024 51 $ 251 $ 1,489 $ 19 $ 1,759

(1) During the three months ended May 2, 2025 and May 3, 2024, shares withheld for taxes related to stock-based compensation arrangements amounted to $ 17 million and $ 22 million, respectively.

See accompanying notes to condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

2024 November 3,

Three Months Ended

(in millions)

3 unchanged sentences

Depreciation and amortization 36 35

Deferred income taxes ( 15 ) ( 33 )

Stock-based compensation expense 15 13

Gain on sale of equity method investments and long-lived assets

Gain on divestitures

Other — ( 1 )

Increase (decrease) resulting from changes in operating assets and liabilities, net of the effect of divestitures:

Increase (decrease) resulting from changes in operating assets and liabilities:

Receivables ( 9 ) ( 20 )

Prepaid expenses and other current assets

Other assets 10 5

Accounts payable and accrued liabilities

Accrued payroll and employee benefits ( 51 ) ( 83 )

Income taxes payable ( 2 ) 21

Operating lease assets and liabilities, net ( 2 ) ( 3 )

Other long-term liabilities 11 21

Other assets and other long-term liabilities, net

Net cash provided by operating activities 100 98

3 unchanged sentences

Sales of marketable securities 3 4

Proceeds from sale of long-lived assets — 3

Proceeds from sale of equity method investments 10 —

Proceeds from divestitures — 356

Cash divested upon deconsolidation of joint venture — ( 8 )

Other ( 3 ) ( 10 )

Net cash (used in) provided by investing activities

Contributions to investments

Net cash used in investing activities

Cash flows from financing activities:

Dividend payments to stockholders ( 57 ) ( 60 )

Principal payments on borrowings ( 689 ) ( 310 )

Issuances of stock 14 13

Stock repurchased and retired or withheld for taxes on equity awards ( 425 ) ( 293 )

Excise tax payments on stock repurchases ( 3 ) —

Proceeds from borrowings 750 293

Stock repurchased and retired or withheld for taxes on equity awards ( 142 ) ( 103 )

Dividend payments to stockholders ( 19 ) ( 20 )

Issuances of stock 6 4

Net cash used in financing activities ( 94 ) ( 136 )

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash at beginning of period 64 103

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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.

Effective February 3, 2024, the first day of fiscal 2025, the Company completed a business reorganization which replaced its previous two customer facing operating sectors with five customer facing business groups supported by the enterprise organizations, including the Innovation Factory.

The Company has five customer facing business groups supported by the enterprise organizations, including the Innovation Factory.

The Company's five business groups, which are also its operating segments, are aggregated into two reportable segments for financial reporting purposes given the similarity in economic and qualitative characteristics, and based on the nature of the customers they serve.

The Company’s two reportable segments are the Defense and Intelligence segment and the Civilian segment.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the defense and intelligence departments and agencies of the United States Government.

The Civilian segment provides solutions to the civilian markets, encompassing federal, state, and local governments, in order to deliver services for citizen well-being and protecting lives.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the Department of Defense ("DoD") and Intelligence Community of the United States Government.

The Civilian segment provides solutions to the civilian markets, encompassing federal, state, and local governments, in order to deliver services for citizen well-being, border security, and protecting lives.

This includes integrating solutions into a spectrum of public service missions that impact travel, trade, health and the economy.

1 unchanged sentence

These services include end-to-end solutions spanning the design, development, integration, deployment, management and operations, sustainment and security of the customers’ entire IT infrastructure.

The Company's Innovation Factory supports the operating segments by developing enterprise-class solutions which are delivered to the Company's customers as stand-alone solutions or integrated with and aligned to product offerings through the operations of the business to meet complex customer needs and accelerate digital transformation.

The Innovation Factory includes designated teams focused on AI, application development, network services, platforms and cloud, and cybersecurity.

The Company's Innovation Factory supports the operating segments by developing enterprise-class solutions which are delivered to the Company's customers as stand-alone solutions or integrated with and aligned to the Company's product offerings through the operations of the business to meet complex customer needs and accelerate digital transformation.

The Innovation Factory includes designated teams focused on AI, application development, network services, platforms and cloud, engineering, and cybersecurity.

It uses a highly automated, cloud-hosted tool set to rapidly build, test and deploy solutions and works with customers to enhance solutions going forward.

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See Note 10—Business Segments Information for additional information.

Within this report, the Company has recast historical financial information to reflect the new reportable segments.

The recast historical information has no impact on the Company's previously reported condensed consolidated financial statements.

Principles of Consolidation and Basis of Presentation

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

The results reported in these financial statements are not necessarily indicative of results that may be expected for the entire year and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended January 31, 2025.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Certain amounts in the prior year financial statements have been reclassified to conform to the current year presentation.

Interest income was reclassified from "Other (income) expense, net" to "Interest expense, net" on the condensed consolidated statements of income, gains on divestitures, net of transaction costs were reclassified from "Other operating (income) expense" to "(Gain) loss on divestitures, net of transaction costs" on the condensed consolidated statements of income, and "Accounts Payable" is now presented separately from "Other accrued liabilities" on the condensed consolidated balance sheets.

Use of Estimates

4 unchanged sentences

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 2025 began on February 3, 2024 and ends on January 31, 2025, while fiscal 2024 began on February 4, 2023 and ended on February 2, 2024.

Fiscal 2026 began on February 1, 2025 and ends on January 30, 2026, while fiscal 2025 began on February 3, 2024 and ended on January 31, 2025.

Operating Cycle

10 unchanged sentences

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 November 1, 2024 and February 2, 2024, the fair value of the Company's investments totaled $ 36 million and $ 32 million, respectively, and are included in "Other assets" on the condensed consolidated balance sheets.

As of May 2, 2025 and January 31, 2025, the fair value of the Company's investments totaled $ 35 million and $ 36 million, respectively, and are included in "Other assets" on the condensed consolidated balance sheets.

The Company's investments are primarily held in a custodial account, which includes investments to fund its deferred compensation plan liabilities.

1 unchanged sentence

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Sale of Equity Method Investment

On August 30, 2024, Morpheus Data, one of the Company’s unconsolidated venture investments, completed a transaction to sell all its outstanding equity, including the Company's equity investment, to Hewlett Packard Enterprise (NYSE:

The transaction resulted in a pre-tax gain of $ 5 million which is included within "Other operating (income) expense" on the condensed consolidated statements of income.

Cash, Cash Equivalents and Restricted Cash

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

2024 February 2,

2025 January 31,

(in millions)

3 unchanged sentences

Cash, cash equivalents and restricted cash $ 55 $ 64

Restructuring Costs

The Company periodically initiates restructuring activities to support business strategies, realign resources, and enhance its operational efficiency.

Restructuring costs may include severance and other employee related termination costs, costs associated with consolidating or closing facilities and consulting costs.

Restructuring costs for the nine months ended November 1, 2024 were $ 4 million and were primarily related to activities associated with the reorganization of its business sectors into business groups and the optimization and consolidation of certain facilities.

Restructuring costs for the three and nine months ended November 3, 2023 were $ 2 million and $ 8 million, respectively, and were primarily associated with the optimization and consolidation of certain facilities.

Restructuring costs are presented within "Selling, general and administrative expenses" on the condensed consolidated statements of income.

Accounting Standards Updates

Accounting Standards Updates Recently Adopted

In November 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No.

2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

The standard includes new disclosure requirements relating to specified categories of expenses (purchases of inventory, employee compensation, depreciation, and amortization) that are included in certain expense captions presented on the face of the income statement.

The standard is effective for fiscal years beginning after December 15, 2026, and interim periods beginning after December 15, 2027.

Early adoption is permitted.

The amendments can be applied on a prospective or retrospective basis.

The Company is currently evaluating the impact of adoption of this standard on its financial statement disclosures.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

Amongst other amendments, the standard requires annual and interim disclosures of significant segment expenses that are regularly provided to the chief operating decision maker ("CODM"), and interim disclosures about a reportable segment’s profit or loss and assets that are currently required annually.

This standard does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

The standard was effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The Company adopted the annual disclosure requirements in fiscal 2025 and adopted the interim disclosure requirements in fiscal 2026.

See Note 10—Business Segments Information for additional information.

Accounting Standards Updates Recently Issued But Not Yet Adopted

In December 2023, the FASB issued ASU No.

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The amendments can be applied on a prospective or retrospective basis.

The Company plans to adopt this standard in fiscal 2026 and is currently evaluating the impact of adoption of this standard on its financial statement disclosures.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The Company plans to adopt this standard prospectively in fiscal 2026 and does not expect it to have a material impact on its consolidated financial statements and related disclosures.

In November 2024, the FASB issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

This standard does not change how an entity identifies its operating segments, aggregates those operating segments, or applies the quantitative thresholds to determine its reportable segments.

The standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

2024-03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses.

Early adoption is permitted.

The Company will adopt the annual disclosure in fiscal 2025 and the interim disclosure in fiscal 2026 and is currently evaluating the impact of adoption of this standard on its financial statement disclosures.

The amendments can be applied on a prospective or retrospective basis.

In January 2025, the FASB clarified the effective date of the standard by issuing ASU No.

2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date.

The standard is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of adoption of this standard on its financial statement disclosures.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 2—Earnings Per Share, Share Repurchases and Dividends:

4 unchanged sentences

The following table provides a reconciliation of the weighted-average number of shares outstanding used to compute basic and diluted EPS for the periods presented:

Three Months Ended Nine Months Ended

2024 November 3,

2023 November 1,

2024 November 3,

Three Months Ended

(in millions)

Basic weighted-average number of shares outstanding

49.4 52.8 50.6 53.5

Dilutive common share equivalents - stock options and other stock-based awards 0.2 0.5

Diluted weighted-average number of shares outstanding

49.8 53.3 51.1 54.0

Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three and nine months ended November 1, 2024 and November 3, 2023 were immaterial .

Antidilutive stock awards excluded from the weighted-average number of shares outstanding used to compute diluted EPS for the three months ended May 2, 2025 and May 3, 2024 were immaterial .

Share Repurchases

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The Company has not made any material purchases of common stock other than in connection with established share repurchase plans.

In June 2022, the number of shares of the Company's common stock that may be repurchased under the Company's existing repurchase plan was increased by 8.0 million shares, bringing the total authorized shares to be repurchased under the plan to approximately 24.4 million shares.

As of November 1, 2024, the Company has repurchased approximately 23.4 million shares of its common stock under the plan.

The Company declared and paid a quarterly dividend of $ 0.37 per share of its common stock during the three months ended November 1, 2024.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the three months ended May 2, 2025, the Company repurchased approximately 1.2 million shares of its common stock from the open market under its existing share repurchase plan for approximately $ 125 million.

As of May 2, 2025, the Company has repurchased approximately 25.7 million shares of its common stock under the plan for approximately $ 2.2 billion.

The Company declared and paid a quarterly dividend of $ 0.37 per share of its common stock during the three months ended May 2, 2025.

Subsequent to the end of the quarter, on May 29, 2025, the Company's Board of Directors declared a quarterly dividend of $ 0.37 per share of the Company's common stock payable on July 25, 2025 to stockholders of record on July 11, 2025.

Note 3—Revenues:

6 unchanged sentences

and performance being better or worse than previously estimated.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A significant portion of the Company's contracts recognize revenue on performance obligations using a cost input measure (cost-to-cost), which requires estimates of total costs at completion.

2 unchanged sentences

Aggregate net changes in estimates on contracts accounted for using the cost-to-cost method of accounting were recognized in operating income as follows:

Three Months Ended Nine Months Ended

2024 November 3,

2023 November 1,

2024 November 3,

Three Months Ended

(in millions, except per share amounts)

Net favorable (unfavorable) adjustments

$ 15 $ 2 $ 15 $ 6

Net favorable (unfavorable) adjustments, after tax

Diluted EPS impact $ ( 0.04 ) $ 0.02

Revenues were $ 13 million and $ 14 million higher for the three and nine months ended November 1, 2024 and $ 4 million and $ 8 million higher for the three and nine months ended November 3, 2023, respectively, due to net revenue recognized from performance obligations satisfied in prior periods.

Revenues were unchanged and $ 1 million higher for the three months ended May 2, 2025 and May 3, 2024, respectively, due to net revenue recognized from performance obligations satisfied in prior periods.

Disaggregation of Revenues

4 unchanged sentences

Three Months Ended

November 1, 2024

November 3, 2023

Defense and Intelligence

7 unchanged sentences

Total $ 1,433 $ 444 $ 1,877 $ 1,436 $ 411 $ 1,847

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended

November 1, 2024

November 3, 2023

Defense and Intelligence

(in millions)

Department of Defense $ 2,916 $ 15 $ 2,931 $ 2,961 $ 21 $ 2,982

Intelligence and other federal government agencies

1,430 1,158 2,588 1,492 1,119 2,611

Commercial, state and local governments and international

20 102 122 12 102 114

Total $ 4,366 $ 1,275 $ 5,641 $ 4,465 $ 1,242 $ 5,707

Disaggregated revenues by contract type were as follows:

Three Months Ended

November 1, 2024

November 3, 2023

Defense and Intelligence

7 unchanged sentences

Total $ 1,433 $ 444 $ 1,877 $ 1,436 $ 411 $ 1,847

Nine Months Ended

November 1, 2024

November 3, 2023

Defense and Intelligence

(in millions)

Cost reimbursement $ 3,464 $ 69 $ 3,533 $ 3,371 $ 53 $ 3,424

Time and materials ("T&M")

430 819 1,249 363 744 1,107

Firm-fixed price ("FFP")

472 387 859 731 445 1,176

Total $ 4,366 $ 1,275 $ 5,641 $ 4,465 $ 1,242 $ 5,707

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Disaggregated revenues by prime versus subcontractor were as follows:

Three Months Ended

November 1, 2024 November 3, 2023

Defense and Intelligence

(in millions)

Prime contractor to federal government $ 1,384 $ 385 $ 1,769 $ 1,363 $ 347 $ 1,710

Subcontractor to federal government 125 41 166 111 34 145

Other 6 35 41 5 35 40

Total $ 1,515 $ 461 $ 1,976 $ 1,479 $ 416 $ 1,895

Nine Months Ended

November 1, 2024

November 3, 2023

May 2, 2025 May 3, 2024

Defense and Intelligence

5 unchanged sentences

Total $ 1,433 $ 444 $ 1,877 $ 1,436 $ 411 $ 1,847

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Contract Balances

Contract balances for the periods presented were as follows:

Balance Sheet line item November 1,

2024 February 2,

Balance Sheet line item May 2,

2025 January 31,

(in millions)

2 unchanged sentences

Contract assets - unbillable receivables Receivables, net 479 474

Contract assets - unbillable receivables Other assets

Contract assets - contract retentions Other assets 16 15

Contract liabilities - current Other accrued liabilities

Contract liabilities - non-current Other long-term liabilities $ 1 $ 2

(1) Net of allowance of $ 3 million as of November 1, 2024 and February 2, 2024.

During the three and nine months ended November 1, 2024, the Company recognized revenues of $ 3 million and $ 33 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of February 2, 2024.

During the three and nine months ended November 3, 2023, the Company recognized revenues of $ 5 million and $ 38 million, respectively, relating to amounts that were included in the opening balance of contract liabilities as of February 3, 2023.

(1) Net of allowance of $ 3 million as of May 2, 2025 and January 31, 2025.

During the three months ended May 2, 2025 and May 3, 2024, the Company recognized revenues of $ 17 million and $ 20 million relating to amounts that were included in the opening balance of contract liabilities as of January 31, 2025 and February 2, 2024 , respectively.

Remaining Performance Obligations

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RPO does not include unexercised option periods and future task orders expected to be awarded under IDIQ contracts.

As of November 1, 2024, the Company had approximately $ 5.7 billion of RPO.

As of May 2, 2025, the Company had approximately $ 5.8 billion of RPO.

The Company expects to recognize revenue on approximately 83 % of the RPO over the next 12 months and approximately 93 % over the next 24 months, with the remaining recognized thereafter.

Note 4—Divestitures:

FSA Amendment

On February 4, 2023, the Company sold 0.1 % of its 50.1 % majority ownership interest in Forfeiture Support Associates J.V.

("FSA") to its sole joint venture partner for a nominal amount.

In conjunction with the sale, the Company remeasured its retained investment in FSA to a fair value of $ 14 million.

As a result of the sale and amendment to the joint venture operating agreement of FSA, the Company no longer controls the joint venture and will account for its retained interest as an equity method investment as of the date of the transaction.

The equity method investment is included within "Other assets" on the condensed consolidated balance sheets.

The remeasurement resulted in a gain of $ 7 million which is included within "(Gain) loss on divestitures, net of transaction costs" on the condensed consolidated statements of income and is reflected within "Gain on divestitures" on the condensed consolidated statements of cash flows for the nine months ended November 3, 2023.

The Company estimated the fair value of its retained investment in FSA based on Level 3 inputs of the fair value hierarchy.

The Company used the income approach which involves the use of estimates and assumptions, including revenue growth rates, projected operating margins, discount rates and terminal growth rates.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Sale of Logistics and Supply Chain Management Business

On May 6, 2023, the Company closed the sale of its logistics and supply chain management business ("Supply Chain Business") to ASRC Federal Holding Company, LLC ("ASRC Federal") for $ 356 million in cash, including $ 355 million received at closing and a preliminary post-closing adjustment for working capital.

The Company recognized the cash as "Proceeds from divestitures" on the condensed consolidated statements of cash flows.

The sale enables the Company to focus its resources on long-term strategic growth areas.

During the second quarter of fiscal 2024, the Company recorded a preliminary pre-tax gain of $ 233 million, net of $ 7 million of transaction costs, which is included within "(Gain) loss on divestitures, net of transaction costs" on the condensed consolidated statements of income.

The disposition did not represent a strategic shift in operations that would have a material effect on the Company's operations and financial results, and accordingly has not been presented as discontinued operations.

The major classes of assets and liabilities divested were as follows:

(in millions)

Receivables, net $ 46

Inventories, net

Prepaid expenses

Operating lease right of use assets 2

Total assets divested $ 181

Accounts payable

Accrued payroll and employee benefits 1

Other accrued liabilities

Operating lease liabilities 1

Total liabilities divested $ 65

In connection with the sale, the Company and ASRC Federal entered into certain transition services agreements pursuant to which the Company provided certain services to ASRC Federal through the first quarter of fiscal 2025 on a cost reimbursable basis.

The transition services included certain IT, finance and other services necessary to support the transition of the sale.

Note 4—Goodwill and Intangible Assets:

The following table presents the carrying value of goodwill by reportable segment:

2024 February 2,

2025 January 31,

(in millions)

3 unchanged sentences

Goodwill is not amortized, but rather tested for potential impairment annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

The goodwill impairment test is performed at

The goodwill impairment test is performed at the reporting unit level.

There were no impairments of goodwill during the periods presented.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

the reporting unit level.

As a result of the internal reorganization on February 3, 2024, the Company reallocated its goodwill to its five new goodwill reporting units.

The Company performed a goodwill impairment test immediately before and after the reorganization, both of which resulted in no impairment.

For the goodwill impairment test immediately after the reorganization, the Company performed a quantitative assessment of its goodwill as of February 3, 2024 for its five new goodwill reporting units.

The Company estimated the fair value of each reporting unit using a 50:50 weighting of fair values derived from an income approach and market approach.

Under the income approach, the Company estimated the fair value of its reporting units using a multi-year discounted cash flow model involving assumptions about projected future revenue growth, operating margins, income tax rates, capital expenditures, discount rate, and terminal value.

Under the market approach, the Company estimated the fair value of its reporting units based on multiples of earnings derived from observable market data of comparable public companies.

Intangible Assets

Intangible assets, all of which were finite-lived, consisted of the following:

November 1, 2024 February 2, 2024

May 2, 2025 January 31, 2025

Gross carrying value Accumulated amortization Net carrying value Gross carrying value Accumulated amortization Net carrying value

4 unchanged sentences

Total intangible assets $ 1,471 $ ( 721 ) $ 750 $ 1,473 $ ( 694 ) $ 779

Amortization expense related to intangible assets was $ 29 million and $ 87 million for the three and nine months ended November 1, 2024, respectively, and $ 28 million and $ 86 million for the three and nine months ended November 3, 2023, respectively.

Amortization expense related to intangible assets was $ 29 million for the three months ended May 2, 2025 and May 3, 2024.

There were no intangible asset impairment losses during the periods presented.

As of November 1, 2024, the estimated future annual amortization expense related to intangible assets is as follows:

As of May 2, 2025, the estimated future annual amortization expense related to intangible assets is as follows:

Fiscal Year (in millions)

3 unchanged sentences

Note 5—Income Taxes:

The Company's effective income tax rate was 15.6 % and 17.8 % for the three and nine months ended November 1, 2024, respectively, and 18.0 % and 23.4 % for the three and nine months ended November 3, 2023, respectively.

The Company’s effective tax rate differs from the statutory tax rate primarily due to the deduction for foreign derived intangible income, research and development tax credits, and stock-based compensation windfalls.

The effective

The Company's effective income tax rate was 20.6 % and 19.0 % for the three months ended May 2, 2025 and May 3, 2024, respectively.

The Company’s effective tax rate for the three months ended May 2, 2025 increased compared to the same period in the prior year primarily due to lower tax benefits from employee share-based compensation.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

tax rate in the prior year further differed from the statutory tax rate due to a gain from the disposition of the Supply Chain Business and the associated non-deductible goodwill.

The Company’s effective tax rate for the three and nine months ended November 1, 2024 decreased compared to the same periods in the prior year due to the non-recurrence of a gain from the disposition of the Supply Chain Business and the associated non-deductible goodwill.

In addition, the effective tax rates for the three and nine months ended November 1, 2024 benefited from the release of certain state liabilities for uncertain tax positions.

Note 6—Debt Obligations:

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

November 1, 2024 February 2, 2024

May 2, 2025 January 31, 2025

rate Effective

3 unchanged sentences

Term Loan A Facility due June 2027 5.67 % 5.78 % $ 1,099 $ ( 2 ) $ 1,097 $ 1,122 $ ( 2 ) $ 1,120

Term Loan B Facility due October 2025 — % — % — — — 328 ( 1 ) 327

Term Loan B2 Facility due March 2027

— % — % — — — 182 ( 2 ) 180

Term Loan B3 Facility due February 2031

7 unchanged sentences

$ 1,884 $ ( 8 ) $ 1,876 $ 1,915 $ ( 8 ) $ 1,907

(1) The stated interest rate for the Revolving Credit Facility due June 2027 reflects the weighted average interest rate for the outstanding borrowings as of November 1, 2024.

As of November 1, 2024, the Company had a $ 2.7 billion secured credit facility (the Credit Facility) consisting of a Term Loan A Facility due June 2027, a Term Loan B3 Facility due February 2031 (together, the "Term Loan Facilities"), and a $ 1.0 billion Revolving Credit Facility due June 2027 (the "Revolving Credit Facility").

On February 8, 2024, the Company executed the Sixth Amendment to the Third Amended and Restated Credit Agreement ("Sixth Amendment"), which established a $ 510 million senior secured term loan credit facility ("Term Loan B3 Facility due February 2031").

The entire Term Loan B3 Facility due February 2031 was immediately borrowed by the Company and the proceeds were used to pay in full the outstanding principal balances under the Term Loan B Facility due October 2025 and Term Loan B2 Facility due March 2027.

The Tranche B3 Facility due February 2031 is subject to the same covenants and events of default as the Company's existing Term Loan Facilities.

Borrowings under the Term Loan B3 Facility due February 2031 amortize quarterly beginning on July 31, 2024 at 0.25 % of the original borrowed amount with the remaining unamortized balance due in full upon its maturity on February 8, 2031.

On October 18, 2024, the Company executed the Seventh Amendment to the Third Amended and Restated Credit Agreement ("Seventh Amendment"), which lowered the applicable margin for the Term Loan B3 Facility due February 2031 from 1.875 % to 1.750 % for Term SOFR loans and from 0.875 % to 0.750 % for base rate loans.

In the event any portion of the Term Loan B3 Facility due February 2031 is repaid prior to April 18, 2025 as a result of a repricing event, the Company will be required to repay a 1.00 % fee of the amount repaid.

After April 18, 2025, the Term Loan B3 Facility due February 2031 may be prepaid at any time without penalty and is subject to the same mandatory prepayments, including from excess cash flow, as the Company’s existing term loans under the Credit Facility.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

During the nine months ended November 1, 2024, the Company incurred $ 6 million of debt issuance costs associated with the Sixth and Seventh Amendments, of which $ 4 million was recognized in interest expense and the remaining $ 2 million deferred and amortized to interest expense through the maturity date of the facility utilizing the effective interest rate method.

During the three and nine months ended November 1, 2024, the Company made scheduled principal payments of $ 23 million and $ 54 million, respectively, on the Term Loan A Facility due June 2027 and made scheduled principal payments of $ 1 million and $ 2 million, respectively, on the Term Loan B3 Facility due February 2031.

During the three and nine months ended November 1, 2024, the Company borrowed $ 405 million and $ 975 million, respectively, and repaid $ 390 million and $ 860 million, respectively, under the Revolving Credit Facility.

As of November 1, 2024, the outstanding principal under the Revolving Credit Facility was classified as current portion of debt on the condensed consolidated balance sheets.

Subsequent to quarter end, the Company repaid $ 65 million on the Revolving Credit Facility.

(1) The stated interest rate for the Revolving Credit Facility due June 2027 reflects the weighted average interest rate for outstanding borrowings as of May 2, 2025.

As of May 2, 2025, the Company had a $ 2.6 billion secured credit facility (the Credit Facility) consisting of a Term Loan A Facility due June 2027, a Term Loan B3 Facility due February 2031 (together, the "Term Loan Facilities"), and a $ 1.0 billion Revolving Credit Facility due June 2027 (the "Revolving Credit Facility").

During the three months ended May 2, 2025, the Company made scheduled principal payments of $ 23 million and $ 1 million on the Term Loan A Facility due June 2027 and the Term Loan B3 Facility due February 2031, respectively.

During the three months ended May 2, 2025, the Company borrowed $ 750 million and repaid $ 665 million under the Revolving Credit Facility.

As of May 2, 2025, the outstanding principal under the Revolving Credit Facility was classified as "Debt, current portion" on the condensed consolidated balance sheets.

Subsequent to quarter end, the Company repaid $ 60 million of the outstanding principal under the Revolving Credit Facility.

Commitment fees for undrawn amounts under the Revolving Credit Facility range from 0.125 % to 0.25 % per annum based on the Company’s leverage ratio.

As of November 1, 2024, the Company was in compliance with the covenants under its Credit Facility.

As of November 1, 2024 and February 2, 2024, the carrying value of the Company’s outstanding debt obligations approximated its fair value.

As of May 2, 2025, the Company was in compliance with the covenants under its Credit Facility.

As of May 2, 2025 and January 31, 2025, the carrying value of the Company’s outstanding debt obligations approximated its fair value.

The fair value of debt is calculated using Level 2 inputs, based on interest rates available for debt with terms and maturities similar to the Company’s Term Loan Facilities and Senior Notes.

Maturities of debt as of November 1, 2024 are:

Maturities of debt as of May 2, 2025 are:

Fiscal Year Total

3 unchanged sentences

Total principal payments $ 2,289

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 7—Derivative Instruments Designated as Cash Flow Hedges:

1 unchanged sentence

Fair Value of Asset (1) at

Notional Amount at November 1, 2024 Pay Fixed

Notional Amount at May 2, 2025 Pay Fixed

Rate Settlement and

Termination November 1,

2024 February 2, 2024

Termination May 2,

2025 January 31, 2025

(in millions) (in millions)

2 unchanged sentences

(1) The fair value of the fixed interest rate swap asset is included in "Other assets" on the condensed 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 within the Credit Facility.

The counterparties to all swap agreements are financial institutions.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

See Note 8—Changes in Accumulated Other Comprehensive Income (Loss) by Component for the unrealized change in fair values on cash flow hedges recognized in other comprehensive income (loss) and the amounts reclassified from accumulated other comprehensive income (loss) into earnings for the current and comparative periods presented.

During the three months ended November 3, 2023, Interest Rate Swaps due October 31, 2023 matured, which had a notional value of $ 450 million upon maturity.

The Company estimates that it will reclassify $ 8 million of unrealized gains from accumulated other comprehensive income into earnings in the twelve months following November 1, 2024.

The Company estimates that it will reclassify $ 4 million of unrealized gains from accumulated other comprehensive income into earnings from May 3, 2025 until the interest rate swaps mature on October 31, 2025.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

9 unchanged sentences

(in millions)

Three months ended November 1, 2024

Balance at August 2, 2024 $ 6 $ 5 $ 11

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive income ( 4 ) — ( 4 )

Income tax impact — — —

Net other comprehensive loss

( 1 ) — ( 1 )

Balance at November 1, 2024 $ 5 $ 5 $ 10

Three months ended November 3, 2023

Balance at August 4, 2023 $ 19 $ 4 $ 23

Other comprehensive income before reclassifications

Amounts reclassified from accumulated other comprehensive income

( 8 ) — ( 8 )

Income tax impact 1 — 1

Net other comprehensive loss

( 3 ) — ( 3 )

Balance at November 3, 2023 $ 16 $ 4 $ 20

Nine months ended November 1, 2024

Balance at February 2, 2024 $ 11 $ 5 $ 16

Other comprehensive income before reclassifications 5 — 5

Three months ended May 2, 2025

Balance at January 31, 2025 $ 4 $ 8 $ 12

Other comprehensive loss before reclassifications

Amounts reclassified from accumulated other comprehensive income ( 2 ) — ( 2 )

1 unchanged sentence

Net other comprehensive loss ( 1 ) — ( 1 )

( 6 ) — ( 6 )

Balance at November 1, 2024 $ 5 $ 5 $ 10

Nine months ended November 3, 2023

Balance at May 2, 2025 $ 3 $ 8 $ 11

Three months ended May 3, 2024

Balance at February 2, 2024 $ 11 $ 5 $ 16

3 unchanged sentences

Income tax impact ( 1 ) — ( 1 )

Net other comprehensive loss

( 2 ) — ( 2 )

Balance at November 3, 2023 $ 16 $ 4 $ 20

Net other comprehensive income

Balance at May 3, 2024 $ 14 $ 5 $ 19

(1) The amount reclassified from accumulated other comprehensive income (loss) is included in "Interest expense, net.

4 unchanged sentences

(the "Purchaser") for the sale of up to a maximum amount of $ 300 million of certain designated eligible receivables with the U.S.

During the three and nine months ended November 1, 2024, the Company incurred purchase discount fees of $ 4 million and $ 11 million, respectively.

During the three and nine months ended November 3, 2023, the Company incurred purchase discount fees of $ 2 million and $ 7 million, respectively.

During the three months ended May 2, 2025 and May 3, 2024, the Company incurred purchase discount fees of approximately $ 4 million and $ 3 million, respectively.

The purchase discount fees are presented in "Other (income) expense, net" on the condensed consolidated statements of income and are reflected as cash flows from operating activities on the condensed consolidated statements of cash flows.

MARPA Facility activity consisted of the following:

Nine Months Ended

2024 November 3,

Three Months Ended

(in millions)

6 unchanged sentences

Remaining sold receivables $ 191 $ 218

(1) For the nine months ended November 1, 2024, the Company recorded a net increase of $ 95 million to cash flows from operating activities from sold receivables.

For the nine months ended November 3, 2023, there was no net impact to cash flows from operating activities from sold receivables.

(2) Primarily represents the cash collected on behalf of but not yet remitted to the Purchaser as of November 1, 2024 and November 3, 2023.

(1) During the three months ended May 2, 2025 and May 3, 2024, the Company recorded a net increase to cash flows from operating activities of $ 136 million and $ 79 million, respectively, from sold receivables.

(2) Primarily represents the cash collected on behalf of but not yet remitted to the Purchaser as of May 2, 2025 and May 3, 2024.

This balance is included in "Accounts payable" on the condensed consolidated balance sheets.

Note 10—Business Segments Information:

The five business groups represent the Company’s operating segments and have been aggregated into two reportable segments (Defense and Intelligence, and Civilian) given the similarity in economic and qualitative characteristics, and based on the nature of the customers they serve.

The Company has five customer facing business groups supported by the enterprise organizations, including the Innovation Factory.

The five business groups, which are also its operating segments, are aggregated into two reportable segments for financial reporting purposes given the similarity in economic and qualitative characteristics, and based on the nature of the customers they serve.

The Company’s two reportable segments are the Defense and Intelligence segment and the Civilian segment.

The Company defines its operating segments based on the way the CODM, currently the Company's CEO, manages the operations for the purpose of allocating resources and assessing performance.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the defense and intelligence departments and agencies of the United States Government.

The Civilian segment provides solutions to the civilian markets, encompassing federal, state, and local governments, in order to deliver services for citizen well-being and protecting lives.

The Defense and Intelligence segment provides a diverse portfolio of national security solutions to the DoD and Intelligence Community of the United States Government.

This includes integrating solutions into a spectrum of public service missions that impact travel, trade, health and the economy.

5 unchanged sentences

The CODM reviews and evaluates segment operating performance using segment "Revenues" and "Adjusted operating income (loss)".

Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions that we do not consider to be indicative of our ongoing operating performance.

Adjusted operating income is a performance measure that primarily excludes the impact of non-recurring transactions that the Company does not consider to be indicative of its ongoing operating performance.

Labor base is the significant expense that is regularly provided to the CODM, and primarily includes direct labor on customer contracts.

The segment information for the periods presented was as follows:

Three Months Ended

November 1, 2024 November 3, 2023

Defense and Intelligence

Three Months Ended May 2, 2025

Defense and Intelligence

1 unchanged sentence

Revenues $ 1,433 $ 444 $ — $ 1,877

Operating income (loss)

130 37 ( 7 ) 160 106 54 ( 17 ) 143

Depreciation of property, plant, and equipment 1 — 5 6 1 — 5 6

Amortization of intangible assets 17 12 — 29 16 12 — 28

Restructuring and impairment costs

— — — — — — 2 2

Recovery of restructuring and impairment costs (1)

Labor base 431 133 — 564

Other operating expenses (1)

887 259 9 1,155

Adjusted operating income (loss) $ 115 $ 52 $ ( 9 ) $ 158

$ 148 $ 49 $ ( 2 ) $ 195 $ 123 $ 66 $ ( 11 ) $ 178

(1) Adjustment reflects the portion of restructuring and impairment costs recovered through our indirect rates in accordance with U.S.

government Cost Accounting Standards.

The table below includes a reconciliation of total "Adjusted operating income" to "Income before income taxes" for the three months ended November 1, 2024.

Three Months Ended

2024 November 3,

Three Months Ended May 3, 2024

Defense and Intelligence Civilian Corporate Total SAIC

(in millions)

Adjusted operating income

Depreciation of property, plant, and equipment

Amortization of intangible assets

( 29 ) ( 28 )

Restructuring and impairment costs — ( 2 )

Recovery restructuring and impairment costs (1)

Interest expense, net

( 32 ) ( 27 )

Other (income) expense, net

Income before income taxes

(1) Adjustment reflects the portion of restructuring and impairment costs recovered through our indirect rates in accordance with U.S.

government Cost Accounting Standards.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Nine Months Ended

November 1, 2024 November 3, 2023

Defense and Intelligence

(dollars in millions)

Revenues $ 1,436 $ 411 $ — $ 1,847

Operating income (loss)

344 105 ( 24 ) 425 336 139 187 662

Depreciation of property, plant, and equipment 1 — 16 17 1 — 18 19

Amortization of intangible assets 51 36 — 87 50 36 — 86

Acquisition and integration costs (1)

— — ( 2 ) ( 2 ) — — 1 1

Restructuring and impairment costs — — 4 4 — — 8 8

Recovery of acquisition and integration costs and restructuring and impairment costs (2)

Labor base 429 129 — 558

Other operating expenses (1)

883 236 5 1,124

(Gain) loss on divestitures, net of transaction costs — — — — — — ( 240 ) ( 240 )

Adjusted operating income (loss) $ 124 $ 46 $ ( 5 ) $ 165

$ 396 $ 141 $ ( 8 ) $ 529 $ 387 $ 175 $ ( 27 ) $ 535

(1) Adjustment consists of a reversal of immaterial costs related to the Koverse acquisition.

(2) Adjustment reflects the portion of acquisition and integration costs and restructuring and impairment costs recovered through our indirect rates in accordance with U.S.

government Cost Accounting Standards.

The table below includes a reconciliation of total "Adjusted operating income" to "Income before income taxes" for the nine months ended November 1, 2024.

Nine Months Ended

2024 November 3,

(1) "Other operating expenses" includes cost of revenues, selling, general and administrative expenses, and other operating income or expenses which are not regularly provided to the CODM.

This excludes labor base which is presented separately.

The table below includes a reconciliation of total "Adjusted operating income" to "Income before income taxes" for the three months ended May 2, 2025 and May 3, 2024.

Three Months Ended

(in millions)

1 unchanged sentence

Depreciation of property, plant, and equipment

( 17 ) ( 19 )

Amortization of intangible assets

( 87 ) ( 86 )

Acquisition and integration costs

1 unchanged sentence

Recovery of acquisition and integration costs and restructuring and impairment costs (1)

(Gain) loss on divestitures, net of transaction costs

Interest expense, net

( 97 ) ( 88 )

Other (income) expense, net

Income before income taxes

(1) Adjustment consists of a reversal of immaterial costs related to the Koverse acquisition.

(2) Adjustment reflects the portion of acquisition and integration costs and restructuring and impairment costs recovered through our indirect rates in accordance with U.S.

(1) Adjustment reflects the portion of restructuring and impairment costs recovered through the Company's indirect rates in accordance with U.S.

government Cost Accounting Standards.

10 unchanged sentences

At this time, it is not possible to determine whether the Company will incur, or to reasonably estimate the amount of, any fines, penalties or further liabilities in connection with the investigation pursuant to which the subpoenas were issued.

AAV Termination for Convenience

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

In the third quarter of fiscal 2025, the Company entered into a $ 21.2 million termination settlement agreement with the customer to recover the contract costs associated with the termination, which resulted in an increase to "Revenues" of $ 13 million on the Company's condensed consolidated statements of income for the three and nine months ended November 1, 2024.

The settlement agreement releases the customer from all obligation and claims from the Company.

Government Investigations, Audits and Reviews

7 unchanged sentences

If future completed audit adjustments exceed the Company’s reserves for potential adjustments, the Company’s profitability could be materially adversely affected.

As of November 1, 2024, the Company believes it has adequately reserved for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with U.S.

As of May 2, 2025, the Company believes it has adequately reserved for estimated net amounts to be refunded to customers for potential adjustments for indirect cost audits and compliance with U.S.

government Cost Accounting Standards.

Letters of Credit and Surety Bonds

The Company has outstanding obligations relating to letters of credit of $ 11 million as of November 1, 2024, principally related to guarantees on insurance policies.

The Company has outstanding obligations relating to letters of credit of $ 8 million as of May 2, 2025, principally related to guarantees on insurance policies.

The Company also has outstanding obligations relating to surety bonds of $ 19 million, principally related to performance and payment bonds on the Company’s contracts.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 13—Subsequent Events

Quarterly Dividend Declared

On December 4, 2024, the Company's Board of Directors declared a quarterly dividend of $ 0.37 per share of the Company's common stock payable on January 24, 2025 to stockholders of record on January 10, 2025.

Plan Share Repurchase Authorization

On December 4, 2024, the Company's Board of Directors authorized the repurchase of up to $ 1.2 billion of the company’s outstanding common stock.

This authorization is effective as of December 16, 2024 and has no expiration date.

The share repurchase program will be used as part of the Company’s capital allocation strategy, which includes returning capital to its shareholders.

This share repurchase authorization replaces the Company’s existing share repurchase program.

SCIENCE APPLICATIONS INTERNATIONAL CORPORATION

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-Q

Item 1. Financial Statements