Document_and_Entity_Informatio
Document and Entity Information | 9 Months Ended | |
Nov. 01, 2013 | Nov. 26, 2013 | |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 1-Nov-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Trading Symbol | 'LDOS | ' |
Entity Registrant Name | 'Leidos Holdings, Inc. | ' |
Entity Central Index Key | '0001336920 | ' |
Current Fiscal Year End Date | '--01-31 | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 85,627,012 |
Leidos, Inc. | ' | ' |
Document Information [Line Items] | ' | ' |
Document Type | '10-Q | ' |
Amendment Flag | 'false | ' |
Document Period End Date | 1-Nov-13 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Entity Registrant Name | 'Leidos, Inc. | ' |
Entity Central Index Key | '0000353394 | ' |
Current Fiscal Year End Date | '--01-31 | ' |
Entity Filer Category | 'Non-accelerated Filer | ' |
Entity Common Stock, Shares Outstanding | ' | 5,000 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 |
Revenues | $1,420 | $1,673 | $4,486 | $4,899 |
Costs and expenses: | ' | ' | ' | ' |
Cost of revenues | 1,224 | 1,434 | 3,903 | 4,218 |
Selling, general and administrative expenses | 116 | 139 | 360 | 367 |
Bad debt expense | 43 | 0 | 45 | 0 |
Intangible asset impairment losses | 19 | 0 | 51 | 0 |
Separation transaction and restructuring expenses | 25 | 0 | 58 | 0 |
Operating (loss) income | -7 | 100 | 69 | 314 |
Non-operating income (expense): | ' | ' | ' | ' |
Interest income | 5 | 1 | 15 | 5 |
Interest expense | -21 | -20 | -59 | -73 |
Other income, net | 2 | 2 | 3 | 8 |
(Loss) income from continuing operations before income taxes | -21 | 83 | 28 | 254 |
Income tax benefit (expense) | 12 | -28 | 1 | -89 |
(Loss) income from continuing operations | -9 | 55 | 29 | 165 |
Discontinued operations: | ' | ' | ' | ' |
Income from discontinued operations before income taxes | 21 | 94 | 158 | 279 |
Income tax expense | -15 | -37 | -67 | -105 |
Income from discontinued operations | 6 | 57 | 91 | 174 |
Net (loss) income | -3 | 112 | 120 | 339 |
Basic: | ' | ' | ' | ' |
(Loss) income from continuing operations | ($0.11) | $0.66 | $0.31 | $1.95 |
Income from discontinued operations | $0.07 | $0.66 | $1.08 | $2.05 |
Basic earnings per share | ($0.04) | $1.32 | $1.39 | $4 |
Diluted: | ' | ' | ' | ' |
(Loss) income from continuing operations | ($0.11) | $0.66 | $0.31 | $1.95 |
Income from discontinued operations | $0.07 | $0.66 | $1.08 | $2.05 |
Diluted earnings per share | ($0.04) | $1.32 | $1.39 | $4 |
Cash dividends declared per share | $0.32 | $0.48 | $5.28 | $1.44 |
Leidos, Inc. | ' | ' | ' | ' |
Revenues | 1,420 | 1,673 | 4,486 | 4,899 |
Costs and expenses: | ' | ' | ' | ' |
Cost of revenues | 1,224 | 1,434 | 3,903 | 4,218 |
Selling, general and administrative expenses | 116 | 139 | 360 | 367 |
Bad debt expense | 43 | 0 | 45 | 0 |
Intangible asset impairment losses | 19 | 0 | 51 | 0 |
Separation transaction and restructuring expenses | 25 | 0 | 58 | 0 |
Operating (loss) income | -7 | 100 | 69 | 314 |
Non-operating income (expense): | ' | ' | ' | ' |
Interest income | 5 | 1 | 15 | 5 |
Interest expense | -21 | -20 | -59 | -73 |
Other income, net | 2 | 2 | 3 | 8 |
(Loss) income from continuing operations before income taxes | -21 | 83 | 28 | 254 |
Income tax benefit (expense) | 12 | -28 | 1 | -89 |
(Loss) income from continuing operations | -9 | 55 | 29 | 165 |
Discontinued operations: | ' | ' | ' | ' |
Income from discontinued operations before income taxes | 21 | 94 | 158 | 279 |
Income tax expense | -15 | -37 | -67 | -105 |
Income from discontinued operations | 6 | 57 | 91 | 174 |
Net (loss) income | ($3) | $112 | $120 | $339 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Comprehensive Income (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 |
Net (loss) income | ($3) | $112 | $120 | $339 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustments | 0 | 0 | 0 | -1 |
Deferred taxes | 0 | 0 | 0 | 1 |
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 | 0 |
Pension liability adjustments | 0 | 0 | 0 | 16 |
Deferred taxes | 0 | 0 | 0 | -6 |
Pension liability adjustments, net of tax | 0 | 0 | 0 | 10 |
Total other comprehensive income, net of tax | 0 | 0 | 0 | 10 |
Comprehensive income | -3 | 112 | 120 | 349 |
Leidos, Inc. | ' | ' | ' | ' |
Net (loss) income | -3 | 112 | 120 | 339 |
Other comprehensive income, net of tax: | ' | ' | ' | ' |
Foreign currency translation adjustments | 0 | 0 | 0 | -1 |
Deferred taxes | 0 | 0 | 0 | 1 |
Foreign currency translation adjustments, net of tax | 0 | 0 | 0 | 0 |
Pension liability adjustments | 0 | 0 | 0 | 16 |
Deferred taxes | 0 | 0 | 0 | -6 |
Pension liability adjustments, net of tax | 0 | 0 | 0 | 10 |
Total other comprehensive income, net of tax | 0 | 0 | 0 | 10 |
Comprehensive income | ($3) | $112 | $120 | $349 |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Nov. 01, 2013 | Jan. 31, 2013 |
In Millions, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $814 | $735 |
Receivables, net | 1,161 | 1,168 |
Inventory, prepaid expenses and other current assets | 298 | 342 |
Assets of discontinued operations | 13 | 1,371 |
Total current assets | 2,286 | 3,616 |
Property, plant and equipment (less accumulated depreciation and amortization of $340 million and $391 million at November 1, 2013 and January 31, 2013, respectively) | 473 | 288 |
Intangible assets, net | 100 | 178 |
Goodwill | 1,704 | 1,704 |
Deferred income taxes | 10 | 12 |
Other assets | 62 | 77 |
Total assets | 4,635 | 5,875 |
Current liabilities: | ' | ' |
Accounts payable and accrued liabilities | 782 | 787 |
Accrued payroll and employee benefits | 307 | 357 |
Notes payable and long-term debt, current portion | 151 | 0 |
Liabilities of discontinued operations | 0 | 648 |
Total current liabilities | 1,240 | 1,792 |
Notes payable and long-term debt, net of current portion | 1,330 | 1,295 |
Other long-term liabilities | 182 | 170 |
Commitments and contingencies (Notes 11 and 12) | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | 0 | 0 |
Additional paid-in capital | 1,735 | 2,110 |
Retained earnings | 150 | 510 |
Accumulated other comprehensive loss | -2 | -2 |
Total stockholders’ equity | 1,883 | 2,618 |
Total liabilities and stockholders' equity | 4,635 | 5,875 |
Leidos, Inc. | ' | ' |
Current assets: | ' | ' |
Cash and cash equivalents | 546 | 735 |
Receivables, net | 1,161 | 1,168 |
Inventory, prepaid expenses and other current assets | 298 | 342 |
Assets of discontinued operations | 13 | 1,371 |
Total current assets | 2,018 | 3,616 |
Property, plant and equipment (less accumulated depreciation and amortization of $340 million and $391 million at November 1, 2013 and January 31, 2013, respectively) | 473 | 288 |
Intangible assets, net | 100 | 178 |
Goodwill | 1,704 | 1,704 |
Deferred income taxes | 10 | 12 |
Other assets | 62 | 77 |
Note receivable from Leidos Holdings, Inc. (Note 8) | 1,075 | 0 |
Total assets | 5,442 | 5,875 |
Current liabilities: | ' | ' |
Accounts payable and accrued liabilities | 782 | 787 |
Accrued payroll and employee benefits | 307 | 357 |
Notes payable and long-term debt, current portion | 151 | 0 |
Liabilities of discontinued operations | 0 | 648 |
Total current liabilities | 1,240 | 1,792 |
Notes payable and long-term debt, net of current portion | 1,330 | 1,295 |
Note payable to Leidos Holdings, Inc. | 0 | 22 |
Other long-term liabilities | 182 | 170 |
Commitments and contingencies (Notes 11 and 12) | ' | ' |
Stockholders' equity: | ' | ' |
Common stock | 0 | 0 |
Additional paid-in capital | 207 | 233 |
Retained earnings | 2,485 | 2,365 |
Accumulated other comprehensive loss | -2 | -2 |
Total stockholders’ equity | 2,690 | 2,596 |
Total liabilities and stockholders' equity | $5,442 | $5,875 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parenthetical) (USD $) | Nov. 01, 2013 | Jan. 31, 2013 |
In Millions, except Share data, unless otherwise specified | ||
Property, plant and equipment, accumulated depreciation and amortization | $340 | $391 |
Common stock, par value | $0.00 | $0.00 |
Common stock, shares authorized | 500,000,000 | 500,000,000 |
Common stock, shares issued | 86,000,000 | 86,000,000 |
Common stock, shares outstanding | 86,000,000 | 86,000,000 |
Leidos, Inc. | ' | ' |
Property, plant and equipment, accumulated depreciation and amortization | $340 | $290 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 10,000 | 10,000 |
Common stock, shares issued | 5,000 | 5,000 |
Common stock, shares outstanding | 5,000 | 5,000 |
Condensed_Consolidated_Stateme2
Condensed Consolidated Statement of Stockholders' Equity (USD $) | Total | Shares of Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Leidos, Inc. | Leidos, Inc. | Leidos, Inc. | Leidos, Inc. | Leidos, Inc. |
In Millions | USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | Shares of Common stock | Additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | |
USD ($) | USD ($) | USD ($) | ||||||||
Balance, value at Jan. 31, 2013 | $2,618 | ' | $2,110 | $510 | ($2) | $2,596 | ' | $233 | $2,365 | ($2) |
Balance, shares at Jan. 31, 2013 | ' | 86 | ' | ' | ' | ' | 5,000 | ' | ' | ' |
Net (loss) income | 120 | ' | ' | 120 | ' | 120 | ' | ' | 120 | ' |
Issuances of stock, value | 30 | ' | 30 | ' | ' | ' | ' | ' | ' | ' |
Issuances of stock, shares | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock, value | -17 | ' | -6 | -11 | ' | ' | ' | ' | ' | ' |
Shares repurchased and retired or withheld for tax withholdings on vesting of restricted stock , shares | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Cash dividends of $1.28 per share | -113 | ' | ' | -113 | ' | ' | ' | ' | ' | ' |
Special cash dividend of $4.00 per share | -356 | ' | ' | -356 | ' | ' | ' | ' | ' | ' |
Adjustments for income tax benefits from stock-based compensation | -10 | ' | -10 | ' | ' | ' | ' | ' | ' | ' |
Stock-based compensation (including discontinued operations of $21 million) | 64 | ' | 64 | ' | ' | ' | ' | ' | ' | ' |
Dividend received, net of contribution paid, from the separation of New SAIC | 269 | ' | 269 | ' | ' | ' | ' | ' | ' | ' |
Contribution paid related to the separation of New SAIC | ' | ' | ' | ' | ' | -26 | ' | -26 | ' | ' |
Separation of New SAIC | -722 | ' | -722 | ' | ' | ' | ' | ' | ' | ' |
Balance, value at Nov. 01, 2013 | 1,883 | ' | 1,735 | 150 | -2 | 2,690 | ' | 207 | 2,485 | -2 |
Balance, shares at Nov. 01, 2013 | ' | 86 | ' | ' | ' | ' | 5,000 | ' | ' | ' |
Balance, value at Aug. 02, 2013 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net (loss) income | -3 | ' | ' | ' | ' | -3 | ' | ' | ' | ' |
Balance, value at Nov. 01, 2013 | $1,883 | ' | ' | ' | ($2) | $2,690 | ' | ' | ' | ($2) |
Balance, shares at Nov. 01, 2013 | ' | ' | ' | ' | ' | ' | 5,000 | ' | ' | ' |
Condensed_Consolidated_Stateme3
Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) (USD $) | 9 Months Ended |
In Millions, except Per Share data, unless otherwise specified | Nov. 01, 2013 |
Statement of Stockholders' Equity [Abstract] | ' |
Cash dividends per share | $1.28 |
Special cash dividends per share | $4 |
Share based compensation, discontinued operation | $21 |
Condensed_Consolidated_Stateme4
Condensed Consolidated Statements of Cash Flows (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 |
Cash flows from operations: | ' | ' |
Net (loss) income | $120 | $339 |
Income from discontinued operations | -91 | -174 |
Adjustments to reconcile net income to net cash provided by operations: | ' | ' |
Depreciation and amortization | 66 | 73 |
Stock-based compensation | 43 | 42 |
Intangible asset impairment losses | 51 | 0 |
Inventory write-down | 3 | 0 |
Bad debt expense | 45 | 0 |
Net gain on sales and disposals of assets | -9 | -7 |
Other | 3 | 3 |
Increase (decrease) in cash and cash equivalents, net of effects of acquisitions and dispositions, resulting from changes in: | ' | ' |
Receivables | -139 | 211 |
Inventory, prepaid expenses and other current assets | 30 | -73 |
Deferred income taxes | 20 | -4 |
Other assets | 3 | -2 |
Accounts payable and accrued liabilities | 9 | -671 |
Accrued payroll and employee benefits | -48 | 74 |
Income taxes receivable/payable | -14 | 35 |
Other long-term liabilities | -14 | 3 |
Total cash flows provided by (used in) operating activities of continuing operations | 78 | -151 |
Cash flows from investing activities: | ' | ' |
Expenditures for property, plant and equipment | -31 | -31 |
Acquisitions of businesses, net of cash acquired of $9 million in fiscal 2013 | -1 | -478 |
Proceeds from sale of assets | 65 | 2 |
Net proceeds (purchases) of cost method investments | 12 | 0 |
Dividend received from the separation of New SAIC | 295 | 0 |
Contribution paid related to the separation of New SAIC | -26 | 0 |
Other | -2 | 1 |
Other | 312 | -506 |
Cash flows from financing activities: | ' | ' |
Payments on notes payable and long-term debt | -1 | -550 |
Payments for deferred financing costs | -5 | 0 |
Payment from New SAIC for deferred financing costs | 5 | 0 |
Proceeds from real estate financing transaction | 38 | 0 |
Proceeds from debt issuance | 500 | 0 |
Distribution of debt to New SAIC | -500 | 0 |
Sales of stock and exercises of stock options | 11 | 15 |
Repurchases of stock | -17 | -21 |
Dividend payments | -452 | -124 |
Other | 2 | 0 |
Total cash flows used in financing activities of continuing operations | -419 | -680 |
Decrease in cash and cash equivalents from continuing operations | -29 | -1,337 |
Cash flows from discontinued operations: | ' | ' |
Cash provided by operating activities of discontinued operations | 125 | 285 |
Cash used in investing activities of discontinued operations | -17 | -6 |
Cash used in financing activities of discontinued operations | 0 | -3 |
Increase in cash and cash equivalents from discontinued operations | 108 | 276 |
Total increase (decrease) in cash and cash equivalents | 79 | -1,061 |
Cash and cash equivalents at beginning of period | 735 | 1,592 |
Cash and cash equivalents at end of period | 814 | 531 |
Leidos, Inc. | ' | ' |
Cash flows from operations: | ' | ' |
Net (loss) income | 120 | 339 |
Income from discontinued operations | -91 | -174 |
Adjustments to reconcile net income to net cash provided by operations: | ' | ' |
Depreciation and amortization | 66 | 73 |
Stock-based compensation | 43 | 42 |
Intangible asset impairment losses | 51 | 0 |
Inventory write-down | 3 | 0 |
Bad debt expense | 45 | 0 |
Net gain on sales and disposals of assets | -9 | -7 |
Other | 3 | 3 |
Increase (decrease) in cash and cash equivalents, net of effects of acquisitions and dispositions, resulting from changes in: | ' | ' |
Receivables | -139 | 211 |
Inventory, prepaid expenses and other current assets | 30 | -73 |
Deferred income taxes | 20 | -4 |
Other assets | 3 | -2 |
Accounts payable and accrued liabilities | 9 | -671 |
Accrued payroll and employee benefits | -48 | 74 |
Income taxes receivable/payable | -14 | 35 |
Other long-term liabilities | -14 | 3 |
Total cash flows provided by (used in) operating activities of continuing operations | 78 | -151 |
Cash flows from investing activities: | ' | ' |
Expenditures for property, plant and equipment | -31 | -31 |
Acquisitions of businesses, net of cash acquired of $9 million in fiscal 2013 | -1 | -478 |
Proceeds from sale of assets | 65 | 2 |
Net proceeds (purchases) of cost method investments | 12 | 0 |
Contribution paid related to the separation of New SAIC | -26 | 0 |
Other | -2 | 1 |
Other | 17 | -506 |
Cash flows from financing activities: | ' | ' |
Payments on notes payable and long-term debt | 11 | 40 |
Payments on note payable to Leidos Holdings, Inc. | -442 | -369 |
Payments on notes payable and long-term debt | -1 | -550 |
Payments for deferred financing costs | -5 | -1 |
Payment from New SAIC for deferred financing costs | 5 | 0 |
Proceeds from real estate financing transaction | 38 | 0 |
Other | 2 | 0 |
Total cash flows used in financing activities of continuing operations | -392 | -880 |
Decrease in cash and cash equivalents from continuing operations | -297 | -1,537 |
Cash flows from discontinued operations: | ' | ' |
Cash provided by operating activities of discontinued operations | 125 | 285 |
Cash used in investing activities of discontinued operations | -17 | -6 |
Cash used in financing activities of discontinued operations | 0 | -3 |
Increase in cash and cash equivalents from discontinued operations | 108 | 276 |
Total increase (decrease) in cash and cash equivalents | -189 | -1,261 |
Cash and cash equivalents at beginning of period | 735 | 1,592 |
Cash and cash equivalents at end of period | $546 | $331 |
Condensed_Consolidated_Stateme5
Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statement of Cash Flow (Parenthetical) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Oct. 31, 2012 |
Cash acquired in acquisition | $9 |
Summary_of_Significant_Account
Summary of Significant Accounting Policies | 9 Months Ended | |||||||||
Nov. 01, 2013 | ||||||||||
Summary of Significant Accounting Policies | ' | |||||||||
Summary of Significant Accounting Policies: | ||||||||||
Nature of Operations and Basis of Presentation | ||||||||||
Leidos Holdings, Inc. ("Leidos") (formerly known as SAIC, Inc.) is a holding company whose direct 100%-owned subsidiary is Leidos, Inc. (formerly known as Science Applications International Corporation), a company focused on delivering science and technology solutions primarily in the areas of national security, health and engineering to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security, and other U.S. Government civil agencies, state and local government agencies, foreign governments and customers across a variety of commercial markets. Unless indicated otherwise, references to the "Company", "we", "us" and "our" refer collectively to Leidos Holdings, Inc., Leidos, Inc., and its consolidated subsidiaries. | ||||||||||
On September 27, 2013 (the "Distribution Date"), Leidos completed the previously announced separation of its technical services and enterprise information technology services business into an independent, publicly traded company named Science Applications International Corporation (“New SAIC”) (formerly known as SAIC Gemini, Inc.). The separation was effected through a tax-free distribution to Leidos' stockholders of 100% of the shares of New SAIC's common stock. On the Distribution Date, New SAIC's common stock was distributed, on a pro rata basis, to Leidos' stockholders of record as of the close of business on September 19, 2013, the record date. Each holder of Leidos common stock received one share of New SAIC common stock for every seven shares of Leidos common stock held on the record date. Prior to the Distribution Date, Leidos Holdings, Inc. was named SAIC, Inc. and Leidos, Inc. was named Science Applications International Corporation. The companies' names were changed as part of the separation, and New SAIC assumed the name Science Applications International Corporation. | ||||||||||
As a result of the separation, the assets, liabilities, results of operations and cash flows of New SAIC have been classified as discontinued operations for all periods presented. References to financial data are to the Company’s continuing operations, unless otherwise noted. See Note 2-Discontinued Operations for further information. | ||||||||||
Immediately following the distribution, Leidos effectuated a one-for-four reverse stock split of its shares of common stock, so that every four shares of Leidos common stock issued and outstanding were combined and converted into one share of Leidos common stock. Each reference to the number of shares outstanding or per share amounts has been adjusted to reflect the reverse stock split for all periods presented. | ||||||||||
The condensed consolidated financial statements of Leidos include the accounts of its majority-owned and 100%-owned subsidiaries, including Leidos, Inc. The condensed consolidated financial statements of Leidos, Inc. include the accounts of its majority-owned and 100%-owned subsidiaries. Leidos does not have separate operations, assets or liabilities independent of Leidos, Inc., except for a note with Leidos, Inc. (the “related party note”), on which interest is recognized, and cash from the dividend paid by New SAIC that is held at Leidos for general corporate purposes, including dividend payments and share repurchases. From time to time, Leidos issues stock to employees of Leidos, Inc. and its subsidiaries, which is reflected in Leidos’ Condensed Consolidated Statement of Stockholders’ Equity and results in an increase to the related party note (see Note 8). All intercompany transactions and accounts have been eliminated in consolidation. | ||||||||||
The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and accounting principles generally accepted in the United States of America (GAAP). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and combined notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The preparation of 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. 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. | ||||||||||
In the opinion of management, the financial information as of November 1, 2013 and for the three and nine months ended November 1, 2013 and October 31, 2012 reflects all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. Operating results for the three and nine months ended November 1, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2014, or any future period. | ||||||||||
Reporting Periods | ||||||||||
Unless otherwise noted, references to fiscal years are to fiscal years ended January 31, for fiscal 2013 and earlier periods, or fiscal years ended the Friday closest to January 31, for fiscal 2014 or later periods. For fiscal 2013, the Company’s fiscal quarters ended on the last calendar day of each of April, July and October. Effective in fiscal 2014, the Company changed its fiscal year to a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2014 began on February 1, 2013 and ends on January 31, 2014. The third quarter of fiscal 2014 ended on November 1, 2013. The Company does not believe that the change in its fiscal year has a material effect on the comparability of the periods presented. | ||||||||||
Separation Transaction and Restructuring Expenses | ||||||||||
In anticipation of the planned separation of New SAIC from the Company, the Company initiated an overall separation program to align the Company’s cost structure for post-separation. During the nine months ended November 1, 2013, the Company reduced headcount, which resulted in severance costs, and reduced its real estate footprint by vacating facilities that are not necessary for its future requirements, which resulted in lease termination and facility consolidation expenses, as reflected in the table below. | ||||||||||
Separation transaction and restructuring expenses related to New SAIC, exclusive of any tax impacts, of $20 million and $55 million for the three months and nine months ended November 1, 2013, respectively, and $11 million and $15 million for the three and nine months ended October 31, 2012, respectively, were reclassified as discontinued operations. There were no separation transaction and restructuring expenses for continuing operations in fiscal year 2013 and the separation transaction and restructuring expenses for continuing operations for fiscal year 2014 were as follows: | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
November 1, 2013 | November 1, 2013 | |||||||||
(in millions) | ||||||||||
Strategic advisory services | $ | 5 | $ | 7 | ||||||
Legal and accounting services | 1 | 1 | ||||||||
Lease termination and facility consolidation expenses | 17 | 40 | ||||||||
Severance costs | 2 | 10 | ||||||||
Separation transaction and restructuring expenses in operating income | 25 | 58 | ||||||||
Less: income tax benefit | (10 | ) | (23 | ) | ||||||
Separation transaction and restructuring expenses, net of tax | $ | 15 | $ | 35 | ||||||
The following table represents the restructuring liability balance as of November 1, 2013, and summarizes the changes during the period attributable to costs incurred and charged to expense, costs paid or otherwise settled, and any adjustments to the liability: | ||||||||||
Severance Costs | Lease Termination and Facility Consolidation Expenses | Total | ||||||||
(in millions) | ||||||||||
Balance as of January 31, 2013 | $ | 8 | $ | 2 | $ | 10 | ||||
Charges | 10 | 36 | 46 | |||||||
Cash payments | (14 | ) | (16 | ) | (30 | ) | ||||
Balance as of November 1, 2013 | $ | 4 | $ | 22 | $ | 26 | ||||
Variable Interest Entity (VIE) | ||||||||||
In fiscal 2012, the Company entered into a fixed price agreement to provide engineering, procurement, and construction services to a special purpose limited liability company (Plainfield Renewable Energy LLC or "Plainfield") for a specific renewable energy project. The Company analyzed this arrangement and determined that Plainfield is a VIE. Prior to the third quarter of fiscal 2014, the VIE was not consolidated by the Company because the Company was not the primary beneficiary. | ||||||||||
On October 11, 2013, the Company and Plainfield Renewable Energy Owner, LLC (“project owner”) entered into a consensual foreclosure agreement pursuant to which, the project owners agreed to transfer 100% of the equity interest of Plainfield Renewable Energy Holdings, LLC (“PRE Holdings”) to an indirect wholly owned subsidiary of Leidos in full satisfaction of certain secured obligations owed by the project owner to the Company. As a result of the entry into the foreclosure agreement, the Company determined that it has the power to direct the activities of the VIE and has the right to receive benefits from or the obligation to absorb the losses of the VIE. Accordingly, the Company was deemed the primary beneficiary of the VIE, resulting in the consolidation of Plainfield as of October 11, 2013. See Note 3 - Acquisitions, for further information. | ||||||||||
Goodwill and Intangible Assets | ||||||||||
The Company evaluates goodwill for potential impairment annually at the beginning of the fourth quarter, or whenever events or circumstances indicate that the carrying value of goodwill may not be recoverable. The goodwill impairment test is a two-step process performed at the reporting unit level. The first step consists of estimating the fair values of each of the reporting units based on a market approach and an income approach. Fair value computed using these two methods is determined using a number of factors, including projected future operating results and business plans, economic projections, anticipated future cash flows, comparable market data based on industry grouping, and the cost of capital. The estimated fair values are compared with the carrying values of the reporting units. If the fair value is less than the carrying value of a reporting unit, which includes the allocated goodwill, a second step is performed to compute the amount of the impairment by determining an implied fair value of goodwill. The implied fair value of goodwill is the residual fair value derived by deducting the fair value of a reporting unit’s identifiable assets and liabilities from its estimated fair value calculated in the first step. The impairment expense represents the excess of the carrying amount of the reporting units’ goodwill over the implied fair value of the reporting units’ goodwill. The Company faces continued uncertainty in its business environment due to the substantial fiscal and economic challenges facing the U.S. Government, its primary customer, as well as challenges in the commercial healthcare industry, compounded by lower levels of U.S. Government reimbursements, including reductions in Medicare reimbursements. Adverse changes in fiscal and economic conditions, such as the manner in which budget cuts are implemented, including sequestration, and issues related to the nation’s debt ceiling, could result in an impairment of goodwill. | ||||||||||
Intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets with indefinite lives are not amortized but are assessed for impairment at the beginning of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. | ||||||||||
Receivables | ||||||||||
The Company’s accounts receivable include unbilled receivables, which consist of costs and fees billable upon contract completion or the occurrence of a specified event, substantially all of which is expected to be billed and collected within one year. Unbilled receivables are stated at estimated realizable value. Since the Company’s receivables, other than those receivables with deferred payment terms, are primarily with the U.S. Government, the Company does not have a material credit risk exposure. Contract retentions are billed when the Company has negotiated final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Consequently, the timing of collection of retention balances is outside the Company’s control. Based on the Company’s historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant. | ||||||||||
The Company has extended deferred payment terms with contractual maturities that may exceed one year to commercial customers related to certain construction projects. During the three months ended November 1, 2013, the Company received a $25 million payment from one construction project and recorded bad debt expense in the Company's condensed consolidated statements of income of $42 million related to two different construction projects. In addition, approximately $105 million of the outstanding deferred payment term receivables were used to acquire PRE Holdings. See Note 3 - Acquisitions, for further information. As of November 1, 2013, the Company had outstanding receivables with deferred payment terms of $30 million, which are expected to be collected in fiscal 2015, when the customers obtain financing. | ||||||||||
When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded. | ||||||||||
Changes in Estimates on Contracts | ||||||||||
Changes in estimates related to certain types of contracts accounted for using the percentage of completion method of accounting are recognized 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 contract performance period for a variety of reasons, including changes in contract scope, changes in contract cost estimates due to unanticipated cost growth or retirements of risk for amounts different than estimated, and changes in estimated incentive or award fees. Aggregate changes in contract estimates resulted in a decrease to operating income of $1 million ($0.01 per diluted share) and $29 million ($0.22 per diluted share) for the three and nine months ended November 1, 2013, respectively. Aggregate changes in contract estimates resulted in an increase to operating income of $3 million ($0.03 per diluted share) for the three months ended October 31, 2012 and an increase to operating income of $2 million ($0.01 per diluted share) for the nine months ended October 31, 2012. | ||||||||||
Supplementary Cash Flow Information | ||||||||||
Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows: | ||||||||||
Nine Months Ended | ||||||||||
November 1, | October 31, | |||||||||
2013 | 2012 | |||||||||
(in millions) | ||||||||||
Vested stock issued as settlement of annual bonus accruals | $ | 2 | $ | 2 | ||||||
Stock issued in lieu of cash dividend | $ | 17 | $ | 2 | ||||||
Fair value of assets acquired in acquisitions (See Note 3 - Acquisitions) | $ | 259 | $ | 541 | ||||||
Less: cash paid in acquisitions, net of cash acquired of $9 million in fiscal 2013 | $ | (1 | ) | $ | (478 | ) | ||||
Forgiveness of accounts receivable to acquire equity interest in business combination | $ | (105 | ) | $ | — | |||||
Liabilities assumed in acquisitions, including accrued acquisition payments | $ | (148 | ) | $ | 63 | |||||
Accrued liability for acquisition of business | $ | (5 | ) | $ | — | |||||
Cash paid for interest (including discontinued operations) | $ | 37 | $ | 53 | ||||||
Cash paid for income taxes (including discontinued operations) | $ | 62 | $ | 126 | ||||||
Special Cash Dividend | ||||||||||
In March 2013, Leidos' board of directors declared a special cash dividend of $4.00 per share of Leidos common stock and paid an aggregate of $342 million on June 28, 2013 to stockholders of record on June 14, 2013. See Note 5-Stock Based Compensation, for further information regarding the modifications made to the Company’s outstanding stock options resulting from the special cash dividend. There were no modifications made to the Company’s vesting stock awards and performance-based stock awards as a result of the special dividend. | ||||||||||
Sale and Leaseback Agreement | ||||||||||
On May 3, 2013, the Company entered into a purchase and sale agreement relating to the sale of approximately 18 acres of land in Fairfax County, Virginia, including four office buildings, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as tangible personal property and third-party leases. This sale is expected to be completed in a series of transactions over approximately six years. | ||||||||||
On July 26, 2013, the Company closed the first phase of the purchase and sale agreement and received proceeds of $83 million, net of selling costs. The Company leased back from the buyer three of the office buildings over varying lease terms. The sale of two of the office buildings will be accounted for as a sale-leaseback transaction with proceeds from the sale of $40 million, a corresponding book value of $42 million resulting in a $2 million loss recorded in selling, general and administrative expenses. These leases will be accounted for as operating leases over a six months term. The sale of the third office building will be accounted for as a financing transaction. The allocated consideration received of $38 million was recorded as a note payable to be paid over seven years with interest at the lessee’s incremental borrowing rate, estimated at 3.7%. The right of use for the multi-level parking garage and surface parking lots were allocated proceeds of $1 million and $4 million, respectively, and were accounted for as other long term liabilities. | ||||||||||
Accounting Standards Updates Issued But Not Yet Adopted | ||||||||||
Accounting standards and updates issued but not effective for the Company until after November 1, 2013 are not expected to have a material effect on the Company’s consolidated financial position or results of operations. | ||||||||||
Leidos, Inc. | ' | |||||||||
Summary of Significant Accounting Policies | ' | |||||||||
Summary of Significant Accounting Policies: | ||||||||||
Nature of Operations and Basis of Presentation | ||||||||||
Leidos Holdings, Inc. ("Leidos") (formerly known as SAIC, Inc.) is a holding company whose direct 100%-owned subsidiary is Leidos, Inc. (formerly known as Science Applications International Corporation), a company focused on delivering science and technology solutions primarily in the areas of national security, health and engineering to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security, and other U.S. Government civil agencies, state and local government agencies, foreign governments and customers across a variety of commercial markets. Unless indicated otherwise, references to the "Company", "we", "us" and "our" refer collectively to Leidos Holdings, Inc., Leidos, Inc., and its consolidated subsidiaries. | ||||||||||
On September 27, 2013 (the "Distribution Date"), Leidos completed the previously announced separation of its technical services and enterprise information technology services business into an independent, publicly traded company named Science Applications International Corporation (“New SAIC”) (formerly known as SAIC Gemini, Inc.). The separation was effected through a tax-free distribution to Leidos' stockholders of 100% of the shares of New SAIC's common stock. On the Distribution Date, New SAIC's common stock was distributed, on a pro rata basis, to Leidos' stockholders of record as of the close of business on September 19, 2013, the record date. Each holder of Leidos common stock received one share of New SAIC common stock for every seven shares of Leidos common stock held on the record date. Prior to the Distribution Date, Leidos Holdings, Inc. was named SAIC, Inc. and Leidos, Inc. was named Science Applications International Corporation. The companies' names were changed as part of the separation, and New SAIC assumed the name Science Applications International Corporation. | ||||||||||
As a result of the separation, the assets, liabilities, results of operations and cash flows of New SAIC have been classified as discontinued operations for all periods presented. References to financial data are to the Company’s continuing operations, unless otherwise noted. See Note 2-Discontinued Operations for further information. | ||||||||||
Immediately following the distribution, Leidos effectuated a one-for-four reverse stock split of its shares of common stock, so that every four shares of Leidos common stock issued and outstanding were combined and converted into one share of Leidos common stock. Each reference to the number of shares outstanding or per share amounts has been adjusted to reflect the reverse stock split for all periods presented. | ||||||||||
The condensed consolidated financial statements of Leidos include the accounts of its majority-owned and 100%-owned subsidiaries, including Leidos, Inc. The condensed consolidated financial statements of Leidos, Inc. include the accounts of its majority-owned and 100%-owned subsidiaries. Leidos does not have separate operations, assets or liabilities independent of Leidos, Inc., except for a note with Leidos, Inc. (the “related party note”), on which interest is recognized, and cash from the dividend paid by New SAIC that is held at Leidos for general corporate purposes, including dividend payments and share repurchases. From time to time, Leidos issues stock to employees of Leidos, Inc. and its subsidiaries, which is reflected in Leidos’ Condensed Consolidated Statement of Stockholders’ Equity and results in an increase to the related party note (see Note 8). All intercompany transactions and accounts have been eliminated in consolidation. | ||||||||||
The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and accounting principles generally accepted in the United States of America (GAAP). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and combined notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The preparation of 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. 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. | ||||||||||
In the opinion of management, the financial information as of November 1, 2013 and for the three and nine months ended November 1, 2013 and October 31, 2012 reflects all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. Operating results for the three and nine months ended November 1, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2014, or any future period. | ||||||||||
Reporting Periods | ||||||||||
Unless otherwise noted, references to fiscal years are to fiscal years ended January 31, for fiscal 2013 and earlier periods, or fiscal years ended the Friday closest to January 31, for fiscal 2014 or later periods. For fiscal 2013, the Company’s fiscal quarters ended on the last calendar day of each of April, July and October. Effective in fiscal 2014, the Company changed its fiscal year to a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2014 began on February 1, 2013 and ends on January 31, 2014. The third quarter of fiscal 2014 ended on November 1, 2013. The Company does not believe that the change in its fiscal year has a material effect on the comparability of the periods presented. | ||||||||||
Separation Transaction and Restructuring Expenses | ||||||||||
In anticipation of the planned separation of New SAIC from the Company, the Company initiated an overall separation program to align the Company’s cost structure for post-separation. During the nine months ended November 1, 2013, the Company reduced headcount, which resulted in severance costs, and reduced its real estate footprint by vacating facilities that are not necessary for its future requirements, which resulted in lease termination and facility consolidation expenses, as reflected in the table below. | ||||||||||
Separation transaction and restructuring expenses related to New SAIC, exclusive of any tax impacts, of $20 million and $55 million for the three months and nine months ended November 1, 2013, respectively, and $11 million and $15 million for the three and nine months ended October 31, 2012, respectively, were reclassified as discontinued operations. There were no separation transaction and restructuring expenses for continuing operations in fiscal year 2013 and the separation transaction and restructuring expenses for continuing operations for fiscal year 2014 were as follows: | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
November 1, 2013 | November 1, 2013 | |||||||||
(in millions) | ||||||||||
Strategic advisory services | $ | 5 | $ | 7 | ||||||
Legal and accounting services | 1 | 1 | ||||||||
Lease termination and facility consolidation expenses | 17 | 40 | ||||||||
Severance costs | 2 | 10 | ||||||||
Separation transaction and restructuring expenses in operating income | 25 | 58 | ||||||||
Less: income tax benefit | (10 | ) | (23 | ) | ||||||
Separation transaction and restructuring expenses, net of tax | $ | 15 | $ | 35 | ||||||
The following table represents the restructuring liability balance as of November 1, 2013, and summarizes the changes during the period attributable to costs incurred and charged to expense, costs paid or otherwise settled, and any adjustments to the liability: | ||||||||||
Severance Costs | Lease Termination and Facility Consolidation Expenses | Total | ||||||||
(in millions) | ||||||||||
Balance as of January 31, 2013 | $ | 8 | $ | 2 | $ | 10 | ||||
Charges | 10 | 36 | 46 | |||||||
Cash payments | (14 | ) | (16 | ) | (30 | ) | ||||
Balance as of November 1, 2013 | $ | 4 | $ | 22 | $ | 26 | ||||
Variable Interest Entity (VIE) | ||||||||||
In fiscal 2012, the Company entered into a fixed price agreement to provide engineering, procurement, and construction services to a special purpose limited liability company (Plainfield Renewable Energy LLC or "Plainfield") for a specific renewable energy project. The Company analyzed this arrangement and determined that Plainfield is a VIE. Prior to the third quarter of fiscal 2014, the VIE was not consolidated by the Company because the Company was not the primary beneficiary. | ||||||||||
On October 11, 2013, the Company and Plainfield Renewable Energy Owner, LLC (“project owner”) entered into a consensual foreclosure agreement pursuant to which, the project owners agreed to transfer 100% of the equity interest of Plainfield Renewable Energy Holdings, LLC (“PRE Holdings”) to an indirect wholly owned subsidiary of Leidos in full satisfaction of certain secured obligations owed by the project owner to the Company. As a result of the entry into the foreclosure agreement, the Company determined that it has the power to direct the activities of the VIE and has the right to receive benefits from or the obligation to absorb the losses of the VIE. Accordingly, the Company was deemed the primary beneficiary of the VIE, resulting in the consolidation of Plainfield as of October 11, 2013. See Note 3 - Acquisitions, for further information. | ||||||||||
Goodwill and Intangible Assets | ||||||||||
The Company evaluates goodwill for potential impairment annually at the beginning of the fourth quarter, or whenever events or circumstances indicate that the carrying value of goodwill may not be recoverable. The goodwill impairment test is a two-step process performed at the reporting unit level. The first step consists of estimating the fair values of each of the reporting units based on a market approach and an income approach. Fair value computed using these two methods is determined using a number of factors, including projected future operating results and business plans, economic projections, anticipated future cash flows, comparable market data based on industry grouping, and the cost of capital. The estimated fair values are compared with the carrying values of the reporting units. If the fair value is less than the carrying value of a reporting unit, which includes the allocated goodwill, a second step is performed to compute the amount of the impairment by determining an implied fair value of goodwill. The implied fair value of goodwill is the residual fair value derived by deducting the fair value of a reporting unit’s identifiable assets and liabilities from its estimated fair value calculated in the first step. The impairment expense represents the excess of the carrying amount of the reporting units’ goodwill over the implied fair value of the reporting units’ goodwill. The Company faces continued uncertainty in its business environment due to the substantial fiscal and economic challenges facing the U.S. Government, its primary customer, as well as challenges in the commercial healthcare industry, compounded by lower levels of U.S. Government reimbursements, including reductions in Medicare reimbursements. Adverse changes in fiscal and economic conditions, such as the manner in which budget cuts are implemented, including sequestration, and issues related to the nation’s debt ceiling, could result in an impairment of goodwill. | ||||||||||
Intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets with indefinite lives are not amortized but are assessed for impairment at the beginning of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. | ||||||||||
Receivables | ||||||||||
The Company’s accounts receivable include unbilled receivables, which consist of costs and fees billable upon contract completion or the occurrence of a specified event, substantially all of which is expected to be billed and collected within one year. Unbilled receivables are stated at estimated realizable value. Since the Company’s receivables, other than those receivables with deferred payment terms, are primarily with the U.S. Government, the Company does not have a material credit risk exposure. Contract retentions are billed when the Company has negotiated final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Consequently, the timing of collection of retention balances is outside the Company’s control. Based on the Company’s historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant. | ||||||||||
The Company has extended deferred payment terms with contractual maturities that may exceed one year to commercial customers related to certain construction projects. During the three months ended November 1, 2013, the Company received a $25 million payment from one construction project and recorded bad debt expense in the Company's condensed consolidated statements of income of $42 million related to two different construction projects. In addition, approximately $105 million of the outstanding deferred payment term receivables were used to acquire PRE Holdings. See Note 3 - Acquisitions, for further information. As of November 1, 2013, the Company had outstanding receivables with deferred payment terms of $30 million, which are expected to be collected in fiscal 2015, when the customers obtain financing. | ||||||||||
When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded. | ||||||||||
Changes in Estimates on Contracts | ||||||||||
Changes in estimates related to certain types of contracts accounted for using the percentage of completion method of accounting are recognized 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 contract performance period for a variety of reasons, including changes in contract scope, changes in contract cost estimates due to unanticipated cost growth or retirements of risk for amounts different than estimated, and changes in estimated incentive or award fees. Aggregate changes in contract estimates resulted in a decrease to operating income of $1 million ($0.01 per diluted share) and $29 million ($0.22 per diluted share) for the three and nine months ended November 1, 2013, respectively. Aggregate changes in contract estimates resulted in an increase to operating income of $3 million ($0.03 per diluted share) for the three months ended October 31, 2012 and an increase to operating income of $2 million ($0.01 per diluted share) for the nine months ended October 31, 2012. | ||||||||||
Supplementary Cash Flow Information | ||||||||||
Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows: | ||||||||||
Nine Months Ended | ||||||||||
November 1, | October 31, | |||||||||
2013 | 2012 | |||||||||
(in millions) | ||||||||||
Vested stock issued as settlement of annual bonus accruals | $ | 2 | $ | 2 | ||||||
Stock issued in lieu of cash dividend | $ | 17 | $ | 2 | ||||||
Fair value of assets acquired in acquisitions (See Note 3 - Acquisitions) | $ | 259 | $ | 541 | ||||||
Less: cash paid in acquisitions, net of cash acquired of $9 million in fiscal 2013 | $ | (1 | ) | $ | (478 | ) | ||||
Forgiveness of accounts receivable to acquire equity interest in business combination | $ | (105 | ) | $ | — | |||||
Liabilities assumed in acquisitions, including accrued acquisition payments | $ | (148 | ) | $ | 63 | |||||
Accrued liability for acquisition of business | $ | (5 | ) | $ | — | |||||
Cash paid for interest (including discontinued operations) | $ | 37 | $ | 53 | ||||||
Cash paid for income taxes (including discontinued operations) | $ | 62 | $ | 126 | ||||||
Special Cash Dividend | ||||||||||
In March 2013, Leidos' board of directors declared a special cash dividend of $4.00 per share of Leidos common stock and paid an aggregate of $342 million on June 28, 2013 to stockholders of record on June 14, 2013. See Note 5-Stock Based Compensation, for further information regarding the modifications made to the Company’s outstanding stock options resulting from the special cash dividend. There were no modifications made to the Company’s vesting stock awards and performance-based stock awards as a result of the special dividend. | ||||||||||
Sale and Leaseback Agreement | ||||||||||
On May 3, 2013, the Company entered into a purchase and sale agreement relating to the sale of approximately 18 acres of land in Fairfax County, Virginia, including four office buildings, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as tangible personal property and third-party leases. This sale is expected to be completed in a series of transactions over approximately six years. | ||||||||||
On July 26, 2013, the Company closed the first phase of the purchase and sale agreement and received proceeds of $83 million, net of selling costs. The Company leased back from the buyer three of the office buildings over varying lease terms. The sale of two of the office buildings will be accounted for as a sale-leaseback transaction with proceeds from the sale of $40 million, a corresponding book value of $42 million resulting in a $2 million loss recorded in selling, general and administrative expenses. These leases will be accounted for as operating leases over a six months term. The sale of the third office building will be accounted for as a financing transaction. The allocated consideration received of $38 million was recorded as a note payable to be paid over seven years with interest at the lessee’s incremental borrowing rate, estimated at 3.7%. The right of use for the multi-level parking garage and surface parking lots were allocated proceeds of $1 million and $4 million, respectively, and were accounted for as other long term liabilities. | ||||||||||
Accounting Standards Updates Issued But Not Yet Adopted | ||||||||||
Accounting standards and updates issued but not effective for the Company until after November 1, 2013 are not expected to have a material effect on the Company’s consolidated financial position or results of operations. |
Discontinued_Operations_Notes
Discontinued Operations (Notes) | 9 Months Ended | |||||||||||||||
Nov. 01, 2013 | ||||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | |||||||||||||||
Discontinued Operations | ' | |||||||||||||||
Discontinued Operations: | ||||||||||||||||
Fiscal Year 2014 Dispositions: | ||||||||||||||||
Separation of New SAIC | ||||||||||||||||
As discussed in Note 1, the Company completed the separation of New SAIC on September 27, 2013. In anticipation of this separation, the Company entered into a credit agreement in June 2013 as a guarantor that consisted of a unsecured term credit facility of $500 million with New SAIC as the borrower. New SAIC was a subsidiary of Leidos prior to the separation date. On September 26, 2013, New SAIC borrowed $500 million under this term credit facility which was unconditionally guaranteed by the Company. The Company was released from its guaranty on September 27, 2013, the completion date of the separation transaction. At separation, New SAIC made a $295 million dividend payment to Leidos and reimbursed Leidos, Inc. $5 million for financing costs previously advanced to New SAIC to secure a revolving and term credit facility, and Leidos, Inc. made a $26 million capital contribution to New SAIC. | ||||||||||||||||
The separation was made pursuant to the terms of a Distribution Agreement and several other agreements entered into between the Company and New SAIC on September 25, 2013. These agreements set forth, among other things, the principal actions needed to be taken in connection with the separation and govern certain aspects of the relationship between the Company and New SAIC following the separation. These agreements generally provide that each party is responsible for its respective assets, liabilities and obligations, including employee benefits, insurance and tax related assets and liabilities, whether accrued or contingent, except that unknown liabilities will be shared between the parties in certain circumstances. The agreements also describe the party’s commitments to provide each other with certain services for a limited time to help ensure an orderly transition. While the Company is a party to the Distribution Agreement and the ancillary agreements, the Company has determined that it does not have significant continuing involvement in the operations of New SAIC, nor does the Company expect significant continuing cash flows from New SAIC. Brief descriptions of agreements associated with the separation are provided below. | ||||||||||||||||
Distribution Agreement | ||||||||||||||||
The Distribution Agreement provides for the allocation, transfer and assumption of assets and liabilities among New SAIC and Leidos. Pursuant to the agreement, subject to certain exceptions, the Company and New SAIC released the other from claims against each other that arise out of or relate to events, circumstances, or actions occurring or failing to occur or any conditions existing at or prior to the time of distribution. In addition, the Company and New SAIC agreed to indemnify each other against breaches of this agreement and certain liabilities in connection with their respective businesses. | ||||||||||||||||
Employee Matters Agreement | ||||||||||||||||
The Employee Matters Agreement contains agreements as to certain employment, compensation and benefits matters. The Employee Matters Agreement provides for the allocation and treatment of assets and liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs, and certain other employment matters. Generally, New SAIC assumed or retained liabilities relating to New SAIC’s employees and the Company assumed or retained liabilities relating to the Company’s employees. The Employee Matters Agreement also provides for the adjustment of outstanding equity awards to reflect the separation and the one-for-four reverse stock split of the Company’s shares. | ||||||||||||||||
Tax Matters Agreement | ||||||||||||||||
The Tax Matters Agreement governs the respective rights, responsibilities and obligations of the Company and New SAIC after the separation with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. As a former subsidiary of the Company, New SAIC has (and will continue to have following the separation) joint and several liability with the Company to the IRS for the consolidated U.S. federal income taxes of the Company consolidated group relating to the taxable periods in which New SAIC was part of that group. However, the Tax Matters Agreement specifies the portion, if any, of this tax liability for which New SAIC bears responsibility, and the Company agrees to indemnify New SAIC against any amounts for which New SAIC is not responsible. | ||||||||||||||||
Transition Services Agreement | ||||||||||||||||
Under the Transition Services Agreement, the Company or its affiliates will provide New SAIC, and New SAIC or its affiliates will provide the Company, with certain services for a limited time to help ensure an orderly transition following the distribution. Under the Transition Services Agreement, the Company and New SAIC will provide each other certain services, including information technology, financial, telecommunications, benefits support services and other specified services, on a transitional basis. The Company expects that these services will be provided at cost, and these services are planned to extend for a period of six to eighteen months in most circumstances. | ||||||||||||||||
Master Transitional Contracting Agreement | ||||||||||||||||
The legal transfer of government contracts to New SAIC will occur through a novation process and commercial, including state and local, contracts will be transferred by assignment to New SAIC. The Master Transitional Contracting Agreement governs the relationship between the Company and New SAIC pending novation and assignment of contracts to New SAIC and addresses the treatment of existing contracts, proposals, and teaming arrangements where both companies will jointly perform work after separation. Joint contracts entered into post separation will be treated as traditional prime and subcontractor relationships. | ||||||||||||||||
The operating results of New SAIC, which have been classified as discontinued operations, for the periods presented were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues | $ | 598 | $ | 1,195 | $ | 2,712 | $ | 3,558 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenues | 533 | 1,073 | 2,446 | 3,205 | ||||||||||||
Selling, general and administrative expenses | 22 | 14 | 42 | 52 | ||||||||||||
Separation transaction and restructuring expenses | 20 | 11 | 55 | 15 | ||||||||||||
Operating income | $ | 23 | $ | 97 | $ | 169 | $ | 286 | ||||||||
Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above. | ||||||||||||||||
The major classes of assets and liabilities included in discontinued operations through the Distribution Date related to the separation of New SAIC are presented in the table below: | ||||||||||||||||
January 31, | ||||||||||||||||
2013 | ||||||||||||||||
(in millions) | ||||||||||||||||
Cash and cash equivalents | $ | 1 | ||||||||||||||
Receivables, net | 717 | |||||||||||||||
Inventory, prepaid expenses and other current assets | 101 | |||||||||||||||
Total current assets | 819 | |||||||||||||||
Property, plant and equipment, net | 29 | |||||||||||||||
Intangible assets, net | 6 | |||||||||||||||
Goodwill | 491 | |||||||||||||||
Deferred income taxes | 2 | |||||||||||||||
Other assets | 1 | |||||||||||||||
Total assets | 1,348 | |||||||||||||||
Accounts payable and accrued liabilities | 461 | |||||||||||||||
Accrued payroll and employee benefits | 185 | |||||||||||||||
Notes payable and long-term debt | 1 | |||||||||||||||
Total current liabilities | 647 | |||||||||||||||
Non-current liabilities | — | |||||||||||||||
Total liabilities | $ | 647 | ||||||||||||||
Other Fiscal Year 2014 Dispositions | ||||||||||||||||
From time-to-time, the Company may dispose (or management may commit to plans to dispose) of non-strategic components of the business, which are reclassified as discontinued operations for all periods presented. | ||||||||||||||||
During the three months ended November 1, 2013, in order to better align its business portfolio with its strategy, the Company sold a certain component of its business resulting in an insignificant gain, which were historically included in the Company’s National Security Solutions segment, focused on machine language translation. | ||||||||||||||||
During the three months ended August 2, 2013, in order to better align its business portfolio with its strategy, the Company committed to plans to dispose of certain components of its business, which were historically included in the Company’s National Security Solutions segment, focused on technology used to detect if an individual is concealing explosive devices or other hidden weapons. | ||||||||||||||||
Fiscal Year 2013 Dispositions: | ||||||||||||||||
The Company sold certain components of its business, which were historically included in the Company’s Health and Engineering segment, primarily focused on providing operational test and evaluation services to U.S. Government customers. The Company received net proceeds of $51 million resulting in a gain on sale before income taxes of $17 million related to this sale. | ||||||||||||||||
The pre-sale operating results and through the date of disposal of the Company’s discontinued operations discussed above for Other Fiscal Year 2014 Dispositions and Fiscal Year 2013 Dispositions, not including the separation of New SAIC, for the periods presented were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues | $ | 1 | $ | 19 | $ | 3 | $ | 60 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenues | 6 | 18 | 9 | 54 | ||||||||||||
Selling, general and administrative expenses | (3 | ) | 4 | 5 | 13 | |||||||||||
Operating income | $ | (2 | ) | $ | (3 | ) | $ | (11 | ) | $ | (7 | ) | ||||
Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above. | ||||||||||||||||
The major classes of assets and liabilities included in discontinued operations through the date of disposal, not including the separation of New SAIC, are immaterial for disclosure purposes. | ||||||||||||||||
Leidos, Inc. | ' | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | |||||||||||||||
Discontinued Operations | ' | |||||||||||||||
Discontinued Operations: | ||||||||||||||||
Fiscal Year 2014 Dispositions: | ||||||||||||||||
Separation of New SAIC | ||||||||||||||||
As discussed in Note 1, the Company completed the separation of New SAIC on September 27, 2013. In anticipation of this separation, the Company entered into a credit agreement in June 2013 as a guarantor that consisted of a unsecured term credit facility of $500 million with New SAIC as the borrower. New SAIC was a subsidiary of Leidos prior to the separation date. On September 26, 2013, New SAIC borrowed $500 million under this term credit facility which was unconditionally guaranteed by the Company. The Company was released from its guaranty on September 27, 2013, the completion date of the separation transaction. At separation, New SAIC made a $295 million dividend payment to Leidos and reimbursed Leidos, Inc. $5 million for financing costs previously advanced to New SAIC to secure a revolving and term credit facility, and Leidos, Inc. made a $26 million capital contribution to New SAIC. | ||||||||||||||||
The separation was made pursuant to the terms of a Distribution Agreement and several other agreements entered into between the Company and New SAIC on September 25, 2013. These agreements set forth, among other things, the principal actions needed to be taken in connection with the separation and govern certain aspects of the relationship between the Company and New SAIC following the separation. These agreements generally provide that each party is responsible for its respective assets, liabilities and obligations, including employee benefits, insurance and tax related assets and liabilities, whether accrued or contingent, except that unknown liabilities will be shared between the parties in certain circumstances. The agreements also describe the party’s commitments to provide each other with certain services for a limited time to help ensure an orderly transition. While the Company is a party to the Distribution Agreement and the ancillary agreements, the Company has determined that it does not have significant continuing involvement in the operations of New SAIC, nor does the Company expect significant continuing cash flows from New SAIC. Brief descriptions of agreements associated with the separation are provided below. | ||||||||||||||||
Distribution Agreement | ||||||||||||||||
The Distribution Agreement provides for the allocation, transfer and assumption of assets and liabilities among New SAIC and Leidos. Pursuant to the agreement, subject to certain exceptions, the Company and New SAIC released the other from claims against each other that arise out of or relate to events, circumstances, or actions occurring or failing to occur or any conditions existing at or prior to the time of distribution. In addition, the Company and New SAIC agreed to indemnify each other against breaches of this agreement and certain liabilities in connection with their respective businesses. | ||||||||||||||||
Employee Matters Agreement | ||||||||||||||||
The Employee Matters Agreement contains agreements as to certain employment, compensation and benefits matters. The Employee Matters Agreement provides for the allocation and treatment of assets and liabilities and responsibilities with respect to certain employee compensation and benefit plans and programs, and certain other employment matters. Generally, New SAIC assumed or retained liabilities relating to New SAIC’s employees and the Company assumed or retained liabilities relating to the Company’s employees. The Employee Matters Agreement also provides for the adjustment of outstanding equity awards to reflect the separation and the one-for-four reverse stock split of the Company’s shares. | ||||||||||||||||
Tax Matters Agreement | ||||||||||||||||
The Tax Matters Agreement governs the respective rights, responsibilities and obligations of the Company and New SAIC after the separation with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns. As a former subsidiary of the Company, New SAIC has (and will continue to have following the separation) joint and several liability with the Company to the IRS for the consolidated U.S. federal income taxes of the Company consolidated group relating to the taxable periods in which New SAIC was part of that group. However, the Tax Matters Agreement specifies the portion, if any, of this tax liability for which New SAIC bears responsibility, and the Company agrees to indemnify New SAIC against any amounts for which New SAIC is not responsible. | ||||||||||||||||
Transition Services Agreement | ||||||||||||||||
Under the Transition Services Agreement, the Company or its affiliates will provide New SAIC, and New SAIC or its affiliates will provide the Company, with certain services for a limited time to help ensure an orderly transition following the distribution. Under the Transition Services Agreement, the Company and New SAIC will provide each other certain services, including information technology, financial, telecommunications, benefits support services and other specified services, on a transitional basis. The Company expects that these services will be provided at cost, and these services are planned to extend for a period of six to eighteen months in most circumstances. | ||||||||||||||||
Master Transitional Contracting Agreement | ||||||||||||||||
The legal transfer of government contracts to New SAIC will occur through a novation process and commercial, including state and local, contracts will be transferred by assignment to New SAIC. The Master Transitional Contracting Agreement governs the relationship between the Company and New SAIC pending novation and assignment of contracts to New SAIC and addresses the treatment of existing contracts, proposals, and teaming arrangements where both companies will jointly perform work after separation. Joint contracts entered into post separation will be treated as traditional prime and subcontractor relationships. | ||||||||||||||||
The operating results of New SAIC, which have been classified as discontinued operations, for the periods presented were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues | $ | 598 | $ | 1,195 | $ | 2,712 | $ | 3,558 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenues | 533 | 1,073 | 2,446 | 3,205 | ||||||||||||
Selling, general and administrative expenses | 22 | 14 | 42 | 52 | ||||||||||||
Separation transaction and restructuring expenses | 20 | 11 | 55 | 15 | ||||||||||||
Operating income | $ | 23 | $ | 97 | $ | 169 | $ | 286 | ||||||||
Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above. | ||||||||||||||||
The major classes of assets and liabilities included in discontinued operations through the Distribution Date related to the separation of New SAIC are presented in the table below: | ||||||||||||||||
January 31, | ||||||||||||||||
2013 | ||||||||||||||||
(in millions) | ||||||||||||||||
Cash and cash equivalents | $ | 1 | ||||||||||||||
Receivables, net | 717 | |||||||||||||||
Inventory, prepaid expenses and other current assets | 101 | |||||||||||||||
Total current assets | 819 | |||||||||||||||
Property, plant and equipment, net | 29 | |||||||||||||||
Intangible assets, net | 6 | |||||||||||||||
Goodwill | 491 | |||||||||||||||
Deferred income taxes | 2 | |||||||||||||||
Other assets | 1 | |||||||||||||||
Total assets | 1,348 | |||||||||||||||
Accounts payable and accrued liabilities | 461 | |||||||||||||||
Accrued payroll and employee benefits | 185 | |||||||||||||||
Notes payable and long-term debt | 1 | |||||||||||||||
Total current liabilities | 647 | |||||||||||||||
Non-current liabilities | — | |||||||||||||||
Total liabilities | $ | 647 | ||||||||||||||
Other Fiscal Year 2014 Dispositions | ||||||||||||||||
From time-to-time, the Company may dispose (or management may commit to plans to dispose) of non-strategic components of the business, which are reclassified as discontinued operations for all periods presented. | ||||||||||||||||
During the three months ended November 1, 2013, in order to better align its business portfolio with its strategy, the Company sold a certain component of its business resulting in an insignificant gain, which were historically included in the Company’s National Security Solutions segment, focused on machine language translation. | ||||||||||||||||
During the three months ended August 2, 2013, in order to better align its business portfolio with its strategy, the Company committed to plans to dispose of certain components of its business, which were historically included in the Company’s National Security Solutions segment, focused on technology used to detect if an individual is concealing explosive devices or other hidden weapons. | ||||||||||||||||
Fiscal Year 2013 Dispositions: | ||||||||||||||||
The Company sold certain components of its business, which were historically included in the Company’s Health and Engineering segment, primarily focused on providing operational test and evaluation services to U.S. Government customers. The Company received net proceeds of $51 million resulting in a gain on sale before income taxes of $17 million related to this sale. | ||||||||||||||||
The pre-sale operating results and through the date of disposal of the Company’s discontinued operations discussed above for Other Fiscal Year 2014 Dispositions and Fiscal Year 2013 Dispositions, not including the separation of New SAIC, for the periods presented were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues | $ | 1 | $ | 19 | $ | 3 | $ | 60 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenues | 6 | 18 | 9 | 54 | ||||||||||||
Selling, general and administrative expenses | (3 | ) | 4 | 5 | 13 | |||||||||||
Operating income | $ | (2 | ) | $ | (3 | ) | $ | (11 | ) | $ | (7 | ) | ||||
Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above. | ||||||||||||||||
The major classes of assets and liabilities included in discontinued operations through the date of disposal, not including the separation of New SAIC, are immaterial for disclosure purposes. |
Acquisition_Notes
Acquisition (Notes) | 9 Months Ended | |||
Nov. 01, 2013 | ||||
Business Acquisition [Line Items] | ' | |||
Acquisition | ' | |||
Acquisitions: | ||||
Plainfield Renewable Energy Holdings LLC | ||||
As described in Note 1, the Company became the primary beneficiary of Plainfield on October 11, 2013 which required the consolidation of the VIE. The Company also determined that Plainfield met the definition of a business and as such is gaining control of 100% of PRE Holdings equity through the consensual foreclosure agreement which constituted a change in control accounted for as a business combination. | ||||
The Plainfield Renewable Energy Project involves the design, construction, and financing of a 37.5 megawatt biomass-fueled power plant in Plainfield, Connecticut (the plant). The plant is scheduled to be completed by the end of calendar year 2013. Connecticut Light & Power will purchase approximately 80% of the power produced by the plant based on a 15-year off-take agreement, utilizing the plant's status as a renewable power source. In addition, there are fuel supply agreements with initial terms of 5 to 15 years and minimum purchase requirements either at prevailing market prices or a set price plus a CPI index. | ||||
The project was partially financed by the Company’s provision of extended payment terms for certain of its services performed on the project and, at the time of this transaction, the Company had a receivable of $138 million due from Plainfield. The remainder of the project was financed by Carlyle Group with two secured notes aggregating $148 million, which these notes were assumed by the Company as part of consensual foreclosure. See Note 7 - Financial Instruments, for further information. | ||||
At the time the Company became the primary beneficiary of Plainfield, the Company measured the assets acquired and liabilities assumed at their fair values. This value also contemplates a plant placed into service prior to December 31, 2013, which will allow the Company to apply for a 1603 Treasury Grant for approximately $70 million. The settlement of the project with PRE Holdings resulted in a $33 million loss which was recorded as bad debt expense in the Company's condensed consolidated statements of income. In addition, there is contingent consideration of approximately $5 million as of November 1, 2013 which is to be paid based on various milestones: $2 million based on the earlier of January 2014 or the completion of the collateral transfer and $3 million based on the successful sale of the plant. | ||||
The aggregate purchase consideration that the Company exchanged for PRE Holdings is as follows (in millions): | ||||
Forgiveness of accounts receivable (net of $33 million bad debt expense) | $ | 105 | ||
Contingent consideration | 6 | |||
Total preliminary purchase consideration | $ | 111 | ||
The preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition were as follows (in millions): | ||||
Property, plant and equipment | $ | 248 | ||
Other assets | 8 | |||
Notes payable assumed (net of debt discount) | (148 | ) | ||
Total identifiable net assets acquired | 108 | |||
Intangible assets | 3 | |||
Total preliminary purchase consideration | $ | 111 | ||
maxIT Healthcare Holdings, Inc. | ||||
In August 2012, the Company acquired 100% of the stock of maxIT Healthcare Holdings, Inc. (maxIT), a provider of clinical, business and information technology services primarily to commercial hospital groups and other medical delivery organizations. The purchase price of $505 million consists of cash payments and accrued acquisition payments of $13 million. This acquisition expands the Company’s commercial consulting practice in electronic health record (EHR) implementation and optimization and strengthens the Company’s capabilities to provide these services to its federal healthcare customers as those customers migrate to commercial off-the-shelf EHR applications. This acquisition was in the Health and Engineering segment and the results of maxIT have been included in the financial statements since the acquisition date. | ||||
The fair values of the assets acquired and liabilities assumed at the date of acquisition, including subsequent adjustments, were as follows (in millions): | ||||
Cash | $ | 9 | ||
Receivables | 50 | |||
Other assets | 24 | |||
Accounts payable, accrued liabilities and accrued payroll and employee benefits | (21 | ) | ||
Deferred tax liabilities, net | (24 | ) | ||
Total identifiable net assets acquired | 38 | |||
Goodwill | 395 | |||
Intangible assets | 72 | |||
Total purchase price | $ | 505 | ||
Leidos, Inc. | ' | |||
Business Acquisition [Line Items] | ' | |||
Acquisition | ' | |||
Acquisitions: | ||||
Plainfield Renewable Energy Holdings LLC | ||||
As described in Note 1, the Company became the primary beneficiary of Plainfield on October 11, 2013 which required the consolidation of the VIE. The Company also determined that Plainfield met the definition of a business and as such is gaining control of 100% of PRE Holdings equity through the consensual foreclosure agreement which constituted a change in control accounted for as a business combination. | ||||
The Plainfield Renewable Energy Project involves the design, construction, and financing of a 37.5 megawatt biomass-fueled power plant in Plainfield, Connecticut (the plant). The plant is scheduled to be completed by the end of calendar year 2013. Connecticut Light & Power will purchase approximately 80% of the power produced by the plant based on a 15-year off-take agreement, utilizing the plant's status as a renewable power source. In addition, there are fuel supply agreements with initial terms of 5 to 15 years and minimum purchase requirements either at prevailing market prices or a set price plus a CPI index. | ||||
The project was partially financed by the Company’s provision of extended payment terms for certain of its services performed on the project and, at the time of this transaction, the Company had a receivable of $138 million due from Plainfield. The remainder of the project was financed by Carlyle Group with two secured notes aggregating $148 million, which these notes were assumed by the Company as part of consensual foreclosure. See Note 7 - Financial Instruments, for further information. | ||||
At the time the Company became the primary beneficiary of Plainfield, the Company measured the assets acquired and liabilities assumed at their fair values. This value also contemplates a plant placed into service prior to December 31, 2013, which will allow the Company to apply for a 1603 Treasury Grant for approximately $70 million. The settlement of the project with PRE Holdings resulted in a $33 million loss which was recorded as bad debt expense in the Company's condensed consolidated statements of income. In addition, there is contingent consideration of approximately $5 million as of November 1, 2013 which is to be paid based on various milestones: $2 million based on the earlier of January 2014 or the completion of the collateral transfer and $3 million based on the successful sale of the plant. | ||||
The aggregate purchase consideration that the Company exchanged for PRE Holdings is as follows (in millions): | ||||
Forgiveness of accounts receivable (net of $33 million bad debt expense) | $ | 105 | ||
Contingent consideration | 6 | |||
Total preliminary purchase consideration | $ | 111 | ||
The preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition were as follows (in millions): | ||||
Property, plant and equipment | $ | 248 | ||
Other assets | 8 | |||
Notes payable assumed (net of debt discount) | (148 | ) | ||
Total identifiable net assets acquired | 108 | |||
Intangible assets | 3 | |||
Total preliminary purchase consideration | $ | 111 | ||
maxIT Healthcare Holdings, Inc. | ||||
In August 2012, the Company acquired 100% of the stock of maxIT Healthcare Holdings, Inc. (maxIT), a provider of clinical, business and information technology services primarily to commercial hospital groups and other medical delivery organizations. The purchase price of $505 million consists of cash payments and accrued acquisition payments of $13 million. This acquisition expands the Company’s commercial consulting practice in electronic health record (EHR) implementation and optimization and strengthens the Company’s capabilities to provide these services to its federal healthcare customers as those customers migrate to commercial off-the-shelf EHR applications. This acquisition was in the Health and Engineering segment and the results of maxIT have been included in the financial statements since the acquisition date. | ||||
The fair values of the assets acquired and liabilities assumed at the date of acquisition, including subsequent adjustments, were as follows (in millions): | ||||
Cash | $ | 9 | ||
Receivables | 50 | |||
Other assets | 24 | |||
Accounts payable, accrued liabilities and accrued payroll and employee benefits | (21 | ) | ||
Deferred tax liabilities, net | (24 | ) | ||
Total identifiable net assets acquired | 38 | |||
Goodwill | 395 | |||
Intangible assets | 72 | |||
Total purchase price | $ | 505 | ||
Earnings_Per_Share_EPS
Earnings Per Share (EPS) | 9 Months Ended | |||||||||||||||
Nov. 01, 2013 | ||||||||||||||||
Earnings Per Share (EPS) | ' | |||||||||||||||
Earnings Per Share (EPS): | ||||||||||||||||
The Company is required to allocate a portion of its earnings to its unvested stock awards containing nonforfeitable rights to dividends or dividend equivalents (participating securities) in calculating EPS using the two-class method. Unvested stock awards granted prior to fiscal 2013 are participating securities requiring application of the two-class method. In fiscal 2013, the Company began issuing unvested stock awards that have forfeitable rights to dividends or dividend equivalents. These stock awards are not participating securities requiring application of the two-class method, but are dilutive common share equivalents subject to the treasury stock method. Basic EPS is computed by dividing income less earnings allocable to participating securities by the basic weighted average number of shares outstanding. Diluted EPS is computed similar 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 income used to compute basic and diluted EPS for the periods presented was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Basic EPS: | ||||||||||||||||
(Loss) income from continuing operations, as reported | $ | (9 | ) | $ | 55 | $ | 29 | $ | 165 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | — | (3 | ) | (3 | ) | ||||||||||
(Loss) income from continuing operations, for computing | $ | (9 | ) | $ | 55 | $ | 26 | $ | 162 | |||||||
basic EPS | ||||||||||||||||
Net income, as reported | $ | (3 | ) | $ | 112 | $ | 120 | $ | 339 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | (2 | ) | (3 | ) | (7 | ) | |||||||||
Net income, for computing basic EPS | $ | (3 | ) | $ | 110 | $ | 117 | $ | 332 | |||||||
Diluted EPS: | ||||||||||||||||
(Loss) income from continuing operations, as reported | (9 | ) | 55 | 29 | 165 | |||||||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | — | (3 | ) | (3 | ) | ||||||||||
(Loss) income from continuing operations, for computing | $ | (9 | ) | $ | 55 | $ | 26 | $ | 162 | |||||||
diluted EPS | ||||||||||||||||
Net income, as reported | $ | (3 | ) | $ | 112 | $ | 120 | $ | 339 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | (2 | ) | (3 | ) | (7 | ) | |||||||||
Net income, for computing diluted EPS | $ | (3 | ) | $ | 110 | $ | 117 | $ | 332 | |||||||
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. The presentation gives effect to the one-for-four reverse stock split which occurred after market close on September 27, 2013. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Basic weighted average number of shares outstanding | 84 | 83 | 84 | 83 | ||||||||||||
Dilutive common share equivalents—stock options and | — | — | — | — | ||||||||||||
other stock awards | ||||||||||||||||
Diluted weighted average number of shares outstanding | 84 | 83 | 84 | 83 | ||||||||||||
For the three months ended November 1, 2013, all outstanding common stock equivalents were excluded in the computation of diluted (loss) per share because their effect would have been anti-dilutive due to the net loss for the quarter. For the nine months ended November 1, 2013, the declared dividends exceeded current period earnings. Therefore, we are in a loss position for computing diluted (loss) per share and all outstanding common stock equivalents were excluded in the computation because their effect would have been anti-dilutive. | ||||||||||||||||
The following anti-dilutive stock-based awards were excluded from the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Stock options | 5 | 5 | 5 | 5 | ||||||||||||
Vesting stock awards | 4 | — | 4 | — | ||||||||||||
Leidos, Inc. | ' | |||||||||||||||
Earnings Per Share (EPS) | ' | |||||||||||||||
Earnings Per Share (EPS): | ||||||||||||||||
The Company is required to allocate a portion of its earnings to its unvested stock awards containing nonforfeitable rights to dividends or dividend equivalents (participating securities) in calculating EPS using the two-class method. Unvested stock awards granted prior to fiscal 2013 are participating securities requiring application of the two-class method. In fiscal 2013, the Company began issuing unvested stock awards that have forfeitable rights to dividends or dividend equivalents. These stock awards are not participating securities requiring application of the two-class method, but are dilutive common share equivalents subject to the treasury stock method. Basic EPS is computed by dividing income less earnings allocable to participating securities by the basic weighted average number of shares outstanding. Diluted EPS is computed similar 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 income used to compute basic and diluted EPS for the periods presented was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Basic EPS: | ||||||||||||||||
(Loss) income from continuing operations, as reported | $ | (9 | ) | $ | 55 | $ | 29 | $ | 165 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | — | (3 | ) | (3 | ) | ||||||||||
(Loss) income from continuing operations, for computing | $ | (9 | ) | $ | 55 | $ | 26 | $ | 162 | |||||||
basic EPS | ||||||||||||||||
Net income, as reported | $ | (3 | ) | $ | 112 | $ | 120 | $ | 339 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | (2 | ) | (3 | ) | (7 | ) | |||||||||
Net income, for computing basic EPS | $ | (3 | ) | $ | 110 | $ | 117 | $ | 332 | |||||||
Diluted EPS: | ||||||||||||||||
(Loss) income from continuing operations, as reported | (9 | ) | 55 | 29 | 165 | |||||||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | — | (3 | ) | (3 | ) | ||||||||||
(Loss) income from continuing operations, for computing | $ | (9 | ) | $ | 55 | $ | 26 | $ | 162 | |||||||
diluted EPS | ||||||||||||||||
Net income, as reported | $ | (3 | ) | $ | 112 | $ | 120 | $ | 339 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | (2 | ) | (3 | ) | (7 | ) | |||||||||
Net income, for computing diluted EPS | $ | (3 | ) | $ | 110 | $ | 117 | $ | 332 | |||||||
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. The presentation gives effect to the one-for-four reverse stock split which occurred after market close on September 27, 2013. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Basic weighted average number of shares outstanding | 84 | 83 | 84 | 83 | ||||||||||||
Dilutive common share equivalents—stock options and | — | — | — | — | ||||||||||||
other stock awards | ||||||||||||||||
Diluted weighted average number of shares outstanding | 84 | 83 | 84 | 83 | ||||||||||||
For the three months ended November 1, 2013, all outstanding common stock equivalents were excluded in the computation of diluted (loss) per share because their effect would have been anti-dilutive due to the net loss for the quarter. For the nine months ended November 1, 2013, the declared dividends exceeded current period earnings. Therefore, we are in a loss position for computing diluted (loss) per share and all outstanding common stock equivalents were excluded in the computation because their effect would have been anti-dilutive. | ||||||||||||||||
The following anti-dilutive stock-based awards were excluded from the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Stock options | 5 | 5 | 5 | 5 | ||||||||||||
Vesting stock awards | 4 | — | 4 | — | ||||||||||||
StockBased_Compensation
Stock-Based Compensation | 9 Months Ended | |||||||||||||||
Nov. 01, 2013 | ||||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||
Stock-Based Compensation: | ||||||||||||||||
Total Stock-Based Compensation. Total stock-based compensation expense for the periods presented was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Stock options | $ | 4 | $ | 1 | $ | 9 | $ | 5 | ||||||||
Vesting stock awards | 10 | 13 | 35 | 37 | ||||||||||||
Total stock-based compensation expense | $ | 14 | $ | 14 | $ | 44 | $ | 42 | ||||||||
New SAIC Separation Adjustments. As a result of the separation of New SAIC, effective September 27, 2013, all outstanding equity awards related to New SAIC employees were assumed by New SAIC. Also in connection with the separation, adjustments were made to the share amounts and exercise prices of all remaining outstanding Leidos stock options, and the share amounts for vesting stock awards and performance-based stock awards as of the Distribution Date such that the adjustments were generally made to preserve the aggregate intrinsic value at the distribution date pursuant to the terms of the stock based compensation plans under which they were issued. Taking into account the change in the value of the Company’s common stock as a result of the distribution of the New SAIC shares, the conversion ratio applied to all outstanding equity awards at the distribution date was 1.4523. In addition, all outstanding equity awards reflected the Company’s one-for-four reverse stock split. Awards held by non-employee directors were modified so that the directors’ awards were bifurcated into awards in both companies in a manner intended to preserve the aggregate intrinsic value. | ||||||||||||||||
As a result of the separation adjustments, a modification was made on September 27, 2013 to Leidos and New SAIC stock options outstanding as of the distribution date by which additional stock-based compensation expense was recognized, as the fair value of the outstanding options immediately following the separation was greater than the fair value immediately prior to the separation. An increase of expense related to the modification of $3 million was recorded for awards that were fully vested on the modification date, and an additional $3 million of incremental fair value will be recorded in future periods for unvested awards that will continue to vest, resulting in a total additional stock compensation cost of $6 million with a weighted average modification fair value of $1.02 related to continuing Leidos stock options outstanding. | ||||||||||||||||
Under the terms of the Employee Matters Agreement, the performance period for certain performance-based stock awards was deemed completed as of the last fiscal quarter prior to the separation with the target shares prorated for the completed period earned based on actual performance as determined by the Company’s compensation committee. For the remaining target shares in the original award for which the performance period was not deemed completed, the performance condition was removed and the awards are subject to vesting based on continued employment through the original performance period. These modifications resulted in approximately $1 million of incremental fair value to be expensed in future periods over the remaining vesting period. | ||||||||||||||||
The separation adjustments are reflected in the tables below. | ||||||||||||||||
Stock Options. Stock options granted during the nine months ended November 1, 2013 and October 31, 2012 have terms of seven years and a vesting period of four years based upon required service conditions, except for stock options granted to the Company’s outside directors, which have a vesting period of one year. | ||||||||||||||||
In connection with the special cash dividend, anti-dilutive adjustments were made to all outstanding stock options on the dividend record date to preserve their value following the special cash dividend, as required by the Company’s 2006 Equity Incentive Plan. The modifications were made to reduce the exercise prices of the outstanding stock options and to increase the number of shares issuable upon the exercise of each option such that the aggregate difference between the market price and exercise price times the number of shares issuable upon exercise was substantially the same immediately before and after the payment of the special dividend. To affect these modifications, on June 12, 2013, the Company increased the shares of stock subject to stock options by a factor of 1.0713, which is the ratio of the closing price of $59.48 on June 11, 2013, the last trading date prior to ex-dividend date, to the opening price of $55.52 on the ex-dividend date, June 12, 2013, and decreased the exercise price of each of the stock options by a factor of 0.9334, which is the ratio of the opening price on the ex-dividend date to the closing price on June 11, 2013. These adjustments did not result in additional share-based compensation expense, as the fair value of the outstanding options immediately following the payment of the special cash dividend was equal to the fair value immediately prior to such distribution. These adjustments are reflected in the “Special Dividend Adjustment” line in the stock option activity table below. | ||||||||||||||||
The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average grant date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were as follows: | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
October 2013 Grants | 31-Oct-12 | |||||||||||||||
2013 Grants Before Spin | ||||||||||||||||
Weighted average grant-date fair value** | $ | 9.48 | $ | 6.96 | ** | $ | 6.75 | ** | ||||||||
Expected term (in years) | 5 | 5 | 5 | |||||||||||||
Expected volatility | 30 | % | 25 | % | 24.5 | % | ||||||||||
Risk-free interest rate | 1.4 | % | 0.8 | % | 1 | % | ||||||||||
Dividend yield | 2.8 | % | 3.8 | % | 3.7 | % | ||||||||||
**Adjusted for additional awards granted for the $4.00 Special Dividend | ||||||||||||||||
Stock option activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Shares of stock under stock options | Weighted average exercise price | Weighted average remaining contractual term | Aggregate intrinsic value | |||||||||||||
(in millions) | (in years) | (in millions) | ||||||||||||||
Outstanding at January 31, 2013 | 4.9 | $ | 67.24 | 3 | $ | — | ||||||||||
Options granted | 1.4 | 54.86 | ||||||||||||||
Special dividend adjustments | 0.4 | |||||||||||||||
Options forfeited or expired | (1.3 | ) | 71.8 | |||||||||||||
Separation Adjustment | (1.9 | ) | 57.85 | |||||||||||||
Outstanding at September 27, 2013 | 3.5 | 59.25 | 3.9 | 24 | ||||||||||||
Exercisable at September 27, 2013 | 1.5 | 64.17 | 2 | 4 | ||||||||||||
Shares of stock under stock options | Weighted average exercise price | Weighted average remaining contractual term | Aggregate intrinsic value | |||||||||||||
(in millions) | (in years) | (in millions) | ||||||||||||||
Outstanding at September 28, 2013 | 4.9 | ** | $ | 40.2 | ** | 3.9 | $ | 24 | ||||||||
Options granted | 0.1 | 46.19 | ||||||||||||||
Options forfeited or expired | (0.1 | ) | 42.84 | |||||||||||||
Outstanding at November 1, 2013 | 4.9 | 40.31 | 4 | 35 | ||||||||||||
Exercisable at November 1, 2013 | 2 | 44.3 | 2 | 6 | ||||||||||||
** Adjusted for Conversion Ratio of 1.4523 | ||||||||||||||||
Vesting Stock Awards. Vesting stock award activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Shares of stock under stock awards | Weighted average grant- date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Unvested stock awards at January 31, 2013 | 3.1 | $ | 60.78 | |||||||||||||
Awards granted | 2.1 | 53.51 | ||||||||||||||
Awards forfeited | (0.4 | ) | 58.28 | |||||||||||||
Awards vested | (0.9 | ) | 64.76 | |||||||||||||
Separation Adjustment | (1.5 | ) | 57.04 | |||||||||||||
Unvested stock awards at September 27, 2013 | 2.4 | 59.98 | ||||||||||||||
Shares of stock under stock awards | Weighted average grant- date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Unvested stock awards at September 28, 2013 | 3.5 | ** | $ | 42.98 | ** | |||||||||||
Awards granted | 0.4 | * | 33.44 | * | ||||||||||||
Unvested stock awards at November 1, 2013 | 3.9 | 42.37 | ||||||||||||||
* Includes Modified Performance-Based Stock Awards | ||||||||||||||||
** Adjusted for Conversion Ratio of 1.4523 | ||||||||||||||||
Vesting stock awards generally vest over a four-year vesting period, or seven for certain stock awards, based upon required service conditions and in some cases performance conditions. The fair value of vesting stock awards that vested during each of the nine months ended November 1, 2013 and October 31, 2012 was $57 million and $64 million, respectively. | ||||||||||||||||
Performance-Based Stock Awards. The Company’s performance-based stock awards vest and the stock is issued at the end of a three-year period based upon the achievement of specific performance criteria, with the number of shares ultimately awarded, if any, ranging up to 150% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. As discussed above in New SAIC Separation Adjustments, the performance period for certain performance-based stock awards was deemed completed as of the last fiscal quarter prior to the separation with the target shares prorated for the completed period earned. For all of the remaining target shares in the original award, the performance condition was removed and the awards are subject to vesting based on continued employment through the original performance period and reflected in the vesting stock awards table above. In the table below, the outstanding awards represent the awards whose performance conditions were completed in the last fiscal quarter prior to the separation and continue to vest over the original service period of the award. Performance-based stock award activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Expected number of shares of stock to be issued under performance-based stock awards | Weighted average grant-date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Outstanding at January 31, 2013 | 0.3 | $ | 52.96 | |||||||||||||
Awards canceled | (0.2 | ) | * | 53.23 | * | |||||||||||
Outstanding at November 1, 2013 | 0.1 | ** | 36.59 | ** | ||||||||||||
* Includes Modified Performance-Based Stock Awards | ||||||||||||||||
** Adjusted for Conversion Ratio of 1.4523 | ||||||||||||||||
Leidos, Inc. | ' | |||||||||||||||
Stock-Based Compensation | ' | |||||||||||||||
Stock-Based Compensation: | ||||||||||||||||
Total Stock-Based Compensation. Total stock-based compensation expense for the periods presented was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Stock options | $ | 4 | $ | 1 | $ | 9 | $ | 5 | ||||||||
Vesting stock awards | 10 | 13 | 35 | 37 | ||||||||||||
Total stock-based compensation expense | $ | 14 | $ | 14 | $ | 44 | $ | 42 | ||||||||
New SAIC Separation Adjustments. As a result of the separation of New SAIC, effective September 27, 2013, all outstanding equity awards related to New SAIC employees were assumed by New SAIC. Also in connection with the separation, adjustments were made to the share amounts and exercise prices of all remaining outstanding Leidos stock options, and the share amounts for vesting stock awards and performance-based stock awards as of the Distribution Date such that the adjustments were generally made to preserve the aggregate intrinsic value at the distribution date pursuant to the terms of the stock based compensation plans under which they were issued. Taking into account the change in the value of the Company’s common stock as a result of the distribution of the New SAIC shares, the conversion ratio applied to all outstanding equity awards at the distribution date was 1.4523. In addition, all outstanding equity awards reflected the Company’s one-for-four reverse stock split. Awards held by non-employee directors were modified so that the directors’ awards were bifurcated into awards in both companies in a manner intended to preserve the aggregate intrinsic value. | ||||||||||||||||
As a result of the separation adjustments, a modification was made on September 27, 2013 to Leidos and New SAIC stock options outstanding as of the distribution date by which additional stock-based compensation expense was recognized, as the fair value of the outstanding options immediately following the separation was greater than the fair value immediately prior to the separation. An increase of expense related to the modification of $3 million was recorded for awards that were fully vested on the modification date, and an additional $3 million of incremental fair value will be recorded in future periods for unvested awards that will continue to vest, resulting in a total additional stock compensation cost of $6 million with a weighted average modification fair value of $1.02 related to continuing Leidos stock options outstanding. | ||||||||||||||||
Under the terms of the Employee Matters Agreement, the performance period for certain performance-based stock awards was deemed completed as of the last fiscal quarter prior to the separation with the target shares prorated for the completed period earned based on actual performance as determined by the Company’s compensation committee. For the remaining target shares in the original award for which the performance period was not deemed completed, the performance condition was removed and the awards are subject to vesting based on continued employment through the original performance period. These modifications resulted in approximately $1 million of incremental fair value to be expensed in future periods over the remaining vesting period. | ||||||||||||||||
The separation adjustments are reflected in the tables below. | ||||||||||||||||
Stock Options. Stock options granted during the nine months ended November 1, 2013 and October 31, 2012 have terms of seven years and a vesting period of four years based upon required service conditions, except for stock options granted to the Company’s outside directors, which have a vesting period of one year. | ||||||||||||||||
In connection with the special cash dividend, anti-dilutive adjustments were made to all outstanding stock options on the dividend record date to preserve their value following the special cash dividend, as required by the Company’s 2006 Equity Incentive Plan. The modifications were made to reduce the exercise prices of the outstanding stock options and to increase the number of shares issuable upon the exercise of each option such that the aggregate difference between the market price and exercise price times the number of shares issuable upon exercise was substantially the same immediately before and after the payment of the special dividend. To affect these modifications, on June 12, 2013, the Company increased the shares of stock subject to stock options by a factor of 1.0713, which is the ratio of the closing price of $59.48 on June 11, 2013, the last trading date prior to ex-dividend date, to the opening price of $55.52 on the ex-dividend date, June 12, 2013, and decreased the exercise price of each of the stock options by a factor of 0.9334, which is the ratio of the opening price on the ex-dividend date to the closing price on June 11, 2013. These adjustments did not result in additional share-based compensation expense, as the fair value of the outstanding options immediately following the payment of the special cash dividend was equal to the fair value immediately prior to such distribution. These adjustments are reflected in the “Special Dividend Adjustment” line in the stock option activity table below. | ||||||||||||||||
The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average grant date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were as follows: | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
October 2013 Grants | 31-Oct-12 | |||||||||||||||
2013 Grants Before Spin | ||||||||||||||||
Weighted average grant-date fair value** | $ | 9.48 | $ | 6.96 | ** | $ | 6.75 | ** | ||||||||
Expected term (in years) | 5 | 5 | 5 | |||||||||||||
Expected volatility | 30 | % | 25 | % | 24.5 | % | ||||||||||
Risk-free interest rate | 1.4 | % | 0.8 | % | 1 | % | ||||||||||
Dividend yield | 2.8 | % | 3.8 | % | 3.7 | % | ||||||||||
**Adjusted for additional awards granted for the $4.00 Special Dividend | ||||||||||||||||
Stock option activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Shares of stock under stock options | Weighted average exercise price | Weighted average remaining contractual term | Aggregate intrinsic value | |||||||||||||
(in millions) | (in years) | (in millions) | ||||||||||||||
Outstanding at January 31, 2013 | 4.9 | $ | 67.24 | 3 | $ | — | ||||||||||
Options granted | 1.4 | 54.86 | ||||||||||||||
Special dividend adjustments | 0.4 | |||||||||||||||
Options forfeited or expired | (1.3 | ) | 71.8 | |||||||||||||
Separation Adjustment | (1.9 | ) | 57.85 | |||||||||||||
Outstanding at September 27, 2013 | 3.5 | 59.25 | 3.9 | 24 | ||||||||||||
Exercisable at September 27, 2013 | 1.5 | 64.17 | 2 | 4 | ||||||||||||
Shares of stock under stock options | Weighted average exercise price | Weighted average remaining contractual term | Aggregate intrinsic value | |||||||||||||
(in millions) | (in years) | (in millions) | ||||||||||||||
Outstanding at September 28, 2013 | 4.9 | ** | $ | 40.2 | ** | 3.9 | $ | 24 | ||||||||
Options granted | 0.1 | 46.19 | ||||||||||||||
Options forfeited or expired | (0.1 | ) | 42.84 | |||||||||||||
Outstanding at November 1, 2013 | 4.9 | 40.31 | 4 | 35 | ||||||||||||
Exercisable at November 1, 2013 | 2 | 44.3 | 2 | 6 | ||||||||||||
** Adjusted for Conversion Ratio of 1.4523 | ||||||||||||||||
Vesting Stock Awards. Vesting stock award activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Shares of stock under stock awards | Weighted average grant- date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Unvested stock awards at January 31, 2013 | 3.1 | $ | 60.78 | |||||||||||||
Awards granted | 2.1 | 53.51 | ||||||||||||||
Awards forfeited | (0.4 | ) | 58.28 | |||||||||||||
Awards vested | (0.9 | ) | 64.76 | |||||||||||||
Separation Adjustment | (1.5 | ) | 57.04 | |||||||||||||
Unvested stock awards at September 27, 2013 | 2.4 | 59.98 | ||||||||||||||
Shares of stock under stock awards | Weighted average grant- date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Unvested stock awards at September 28, 2013 | 3.5 | ** | $ | 42.98 | ** | |||||||||||
Awards granted | 0.4 | * | 33.44 | * | ||||||||||||
Unvested stock awards at November 1, 2013 | 3.9 | 42.37 | ||||||||||||||
* Includes Modified Performance-Based Stock Awards | ||||||||||||||||
** Adjusted for Conversion Ratio of 1.4523 | ||||||||||||||||
Vesting stock awards generally vest over a four-year vesting period, or seven for certain stock awards, based upon required service conditions and in some cases performance conditions. The fair value of vesting stock awards that vested during each of the nine months ended November 1, 2013 and October 31, 2012 was $57 million and $64 million, respectively. | ||||||||||||||||
Performance-Based Stock Awards. The Company’s performance-based stock awards vest and the stock is issued at the end of a three-year period based upon the achievement of specific performance criteria, with the number of shares ultimately awarded, if any, ranging up to 150% of the specified target awards. If performance is below the threshold level of performance, no shares will be issued. As discussed above in New SAIC Separation Adjustments, the performance period for certain performance-based stock awards was deemed completed as of the last fiscal quarter prior to the separation with the target shares prorated for the completed period earned. For all of the remaining target shares in the original award, the performance condition was removed and the awards are subject to vesting based on continued employment through the original performance period and reflected in the vesting stock awards table above. In the table below, the outstanding awards represent the awards whose performance conditions were completed in the last fiscal quarter prior to the separation and continue to vest over the original service period of the award. Performance-based stock award activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Expected number of shares of stock to be issued under performance-based stock awards | Weighted average grant-date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Outstanding at January 31, 2013 | 0.3 | $ | 52.96 | |||||||||||||
Awards canceled | (0.2 | ) | * | 53.23 | * | |||||||||||
Outstanding at November 1, 2013 | 0.1 | ** | 36.59 | ** | ||||||||||||
* Includes Modified Performance-Based Stock Awards | ||||||||||||||||
** Adjusted for Conversion Ratio of 1.4523 |
Goodwill_and_Intangible_Assets
Goodwill and Intangible Assets | 9 Months Ended | |||||||||||||||||||||||
Nov. 01, 2013 | ||||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||||
Goodwill and Intangible Assets: | ||||||||||||||||||||||||
The changes in the carrying value of goodwill for Health and Engineering (HES) and National Security Solutions (NSS) were as follows: | ||||||||||||||||||||||||
HES | NSS | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Goodwill at January 31, 2013 | $ | 985 | $ | 719 | $ | 1,704 | ||||||||||||||||||
Corporate reorganizations | (69 | ) | 69 | — | ||||||||||||||||||||
Goodwill at November 1, 2013 | $ | 916 | $ | 788 | $ | 1,704 | ||||||||||||||||||
In the second and third quarter of fiscal 2014, the Company forecasted a significant decline in revenue and operating income related to the Health Solutions and Engineering reporting units within its HES reporting segment. The Company determined that this decline constituted a significant change in circumstances which could potentially reduce the fair value of the reporting units below their carrying value. As such, an interim goodwill impairment test was performed (see Note 1) and the Company determined that the estimated fair values of the Health Solutions and Engineering reporting units exceeded its book value and therefore no goodwill impairment charge was recorded. | ||||||||||||||||||||||||
There were no goodwill impairments during the nine months ended November 1, 2013 and October 31, 2012. | ||||||||||||||||||||||||
Intangible assets consisted of the following: | ||||||||||||||||||||||||
November 1, 2013 | January 31, 2013 | |||||||||||||||||||||||
Gross carrying value | Accumulated amortization | Net carrying value | Gross carrying value | Accumulated amortization | Net carrying value | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||
Customer relationships | $ | 116 | $ | (64 | ) | $ | 52 | $ | 154 | $ | (57 | ) | $ | 97 | ||||||||||
Software and technology | 66 | (35 | ) | 31 | 97 | (30 | ) | 67 | ||||||||||||||||
Other | 4 | (1 | ) | 3 | 1 | (1 | ) | — | ||||||||||||||||
Total finite-lived intangible assets | 186 | (100 | ) | 86 | 252 | (88 | ) | 164 | ||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||
In-process research and development | 10 | — | 10 | 10 | — | 10 | ||||||||||||||||||
Trade names | 4 | — | 4 | 4 | — | 4 | ||||||||||||||||||
Total indefinite-lived intangible assets | 14 | — | 14 | 14 | — | 14 | ||||||||||||||||||
Total intangible assets | $ | 200 | $ | (100 | ) | $ | 100 | $ | 266 | $ | (88 | ) | $ | 178 | ||||||||||
Amortization expense related to amortizable intangible assets was $8 million and $31 million for the three and nine months ended November 1, 2013, respectively, and $12 million and $30 million for the three and nine months ended October 31, 2012, respectively. | ||||||||||||||||||||||||
During the second quarter of fiscal 2014, the Company determined that certain intangible assets consisting of software and technology, associated with the acquisition of Reveal Imaging Technologies, Inc. in fiscal 2011, were not recoverable due to lower projected revenue levels from the associated products and customers. As a result, the Health and Engineering reportable segment recognized an impairment loss within intangible asset impairment losses in the Company's condensed consolidated statements of income of $30 million to reduce the carrying value of these intangible assets to their estimated fair values. Fair value was estimated using the income approach based on management’s forecast of future cash flows to be derived from the assets’ use (Level 3 under the accounting standard for fair value measurement). | ||||||||||||||||||||||||
During the three months ended November 1, 2013, the Company determined that certain customer relationship intangible assets associated with the acquisitions of Vitalize and maxIT in fiscal 2012 and 2013, respectively, were not recoverable due to lower projected revenue levels from the associated services and customers. As a result, the Health and Engineering reportable segment recognized an impairment loss within intangible asset impairment losses in the Company's condensed consolidated statements of income of $19 million to reduce the carrying value of these intangible assets to their estimated fair values. Fair value was estimated using the income approach based on management’s forecast of future cash flows to be derived from the assets’ use (Level 3 under the accounting standard for fair value measurement). | ||||||||||||||||||||||||
During the three and nine months ended November 1, 2013, the Company recognized impairment losses for intangible assets of $19 million and $51 million, respectively, reported within intangible asset impairment losses in the Company's condensed consolidated statements of income. During the three and nine months ended October 31, 2012, the Company did not recognize any impairment losses for intangible assets. | ||||||||||||||||||||||||
The estimated annual amortization expense related to finite-lived intangible assets as of November 1, 2013 was as follows: | ||||||||||||||||||||||||
Fiscal Year Ending January 31 | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
2014 (remainder of the fiscal year) | $ | 6 | ||||||||||||||||||||||
2015 | 22 | |||||||||||||||||||||||
2016 | 20 | |||||||||||||||||||||||
2017 | 17 | |||||||||||||||||||||||
2018 | 11 | |||||||||||||||||||||||
2019 and thereafter | 10 | |||||||||||||||||||||||
$ | 86 | |||||||||||||||||||||||
Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, dispositions, impairments, the outcome and timing of completion of in-process research and development projects (the assets of which will become amortizable upon completion and placement into service, or will be impaired if abandoned), adjustments to preliminary valuations of intangible assets and other factors. | ||||||||||||||||||||||||
Leidos, Inc. | ' | |||||||||||||||||||||||
Goodwill and Intangible Assets | ' | |||||||||||||||||||||||
Goodwill and Intangible Assets: | ||||||||||||||||||||||||
The changes in the carrying value of goodwill for Health and Engineering (HES) and National Security Solutions (NSS) were as follows: | ||||||||||||||||||||||||
HES | NSS | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Goodwill at January 31, 2013 | $ | 985 | $ | 719 | $ | 1,704 | ||||||||||||||||||
Corporate reorganizations | (69 | ) | 69 | — | ||||||||||||||||||||
Goodwill at November 1, 2013 | $ | 916 | $ | 788 | $ | 1,704 | ||||||||||||||||||
In the second and third quarter of fiscal 2014, the Company forecasted a significant decline in revenue and operating income related to the Health Solutions and Engineering reporting units within its HES reporting segment. The Company determined that this decline constituted a significant change in circumstances which could potentially reduce the fair value of the reporting units below their carrying value. As such, an interim goodwill impairment test was performed (see Note 1) and the Company determined that the estimated fair values of the Health Solutions and Engineering reporting units exceeded its book value and therefore no goodwill impairment charge was recorded. | ||||||||||||||||||||||||
There were no goodwill impairments during the nine months ended November 1, 2013 and October 31, 2012. | ||||||||||||||||||||||||
Intangible assets consisted of the following: | ||||||||||||||||||||||||
November 1, 2013 | January 31, 2013 | |||||||||||||||||||||||
Gross carrying value | Accumulated amortization | Net carrying value | Gross carrying value | Accumulated amortization | Net carrying value | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||
Customer relationships | $ | 116 | $ | (64 | ) | $ | 52 | $ | 154 | $ | (57 | ) | $ | 97 | ||||||||||
Software and technology | 66 | (35 | ) | 31 | 97 | (30 | ) | 67 | ||||||||||||||||
Other | 4 | (1 | ) | 3 | 1 | (1 | ) | — | ||||||||||||||||
Total finite-lived intangible assets | 186 | (100 | ) | 86 | 252 | (88 | ) | 164 | ||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||
In-process research and development | 10 | — | 10 | 10 | — | 10 | ||||||||||||||||||
Trade names | 4 | — | 4 | 4 | — | 4 | ||||||||||||||||||
Total indefinite-lived intangible assets | 14 | — | 14 | 14 | — | 14 | ||||||||||||||||||
Total intangible assets | $ | 200 | $ | (100 | ) | $ | 100 | $ | 266 | $ | (88 | ) | $ | 178 | ||||||||||
Amortization expense related to amortizable intangible assets was $8 million and $31 million for the three and nine months ended November 1, 2013, respectively, and $12 million and $30 million for the three and nine months ended October 31, 2012, respectively. | ||||||||||||||||||||||||
During the second quarter of fiscal 2014, the Company determined that certain intangible assets consisting of software and technology, associated with the acquisition of Reveal Imaging Technologies, Inc. in fiscal 2011, were not recoverable due to lower projected revenue levels from the associated products and customers. As a result, the Health and Engineering reportable segment recognized an impairment loss within intangible asset impairment losses in the Company's condensed consolidated statements of income of $30 million to reduce the carrying value of these intangible assets to their estimated fair values. Fair value was estimated using the income approach based on management’s forecast of future cash flows to be derived from the assets’ use (Level 3 under the accounting standard for fair value measurement). | ||||||||||||||||||||||||
During the three months ended November 1, 2013, the Company determined that certain customer relationship intangible assets associated with the acquisitions of Vitalize and maxIT in fiscal 2012 and 2013, respectively, were not recoverable due to lower projected revenue levels from the associated services and customers. As a result, the Health and Engineering reportable segment recognized an impairment loss within intangible asset impairment losses in the Company's condensed consolidated statements of income of $19 million to reduce the carrying value of these intangible assets to their estimated fair values. Fair value was estimated using the income approach based on management’s forecast of future cash flows to be derived from the assets’ use (Level 3 under the accounting standard for fair value measurement). | ||||||||||||||||||||||||
During the three and nine months ended November 1, 2013, the Company recognized impairment losses for intangible assets of $19 million and $51 million, respectively, reported within intangible asset impairment losses in the Company's condensed consolidated statements of income. During the three and nine months ended October 31, 2012, the Company did not recognize any impairment losses for intangible assets. | ||||||||||||||||||||||||
The estimated annual amortization expense related to finite-lived intangible assets as of November 1, 2013 was as follows: | ||||||||||||||||||||||||
Fiscal Year Ending January 31 | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
2014 (remainder of the fiscal year) | $ | 6 | ||||||||||||||||||||||
2015 | 22 | |||||||||||||||||||||||
2016 | 20 | |||||||||||||||||||||||
2017 | 17 | |||||||||||||||||||||||
2018 | 11 | |||||||||||||||||||||||
2019 and thereafter | 10 | |||||||||||||||||||||||
$ | 86 | |||||||||||||||||||||||
Actual amortization expense in future periods could differ from these estimates as a result of future acquisitions, dispositions, impairments, the outcome and timing of completion of in-process research and development projects (the assets of which will become amortizable upon completion and placement into service, or will be impaired if abandoned), adjustments to preliminary valuations of intangible assets and other factors. |
Financial_Instruments
Financial Instruments | 9 Months Ended | |||||||||||||
Nov. 01, 2013 | ||||||||||||||
Financial Instruments | ' | |||||||||||||
Financial Instruments: | ||||||||||||||
The Company’s cash equivalents were primarily comprised of investments in several large institutional money market funds that invest primarily in bills, notes and bonds issued by the U.S. Treasury, U.S. Government guaranteed repurchase agreements fully collateralized by U.S. Treasury obligations, U.S. Government guaranteed securities and investment-grade corporate securities that have maturities of three months or less, and bank deposits. There are no restrictions on the withdrawal of the Company’s cash and cash equivalents. The Company’s cash equivalents are recorded at historical cost, which equals fair value based on quoted market prices (Level 1 input as defined by the accounting standard for fair value measurements). | ||||||||||||||
Leidos has a revolving credit facility, which is fully and unconditionally guaranteed by Leidos, Inc., providing for up to $750 million in unsecured borrowing capacity at interest rates determined, at Leidos’ option, based on either LIBOR plus a margin or a defined base rate. During the three months ended May 3, 2013, the maturity date of the credit facility was extended for one additional year to March 2017, as provided for in the terms of the credit facility. As of November 1, 2013 and January 31, 2013, there were no borrowings outstanding under the credit facility. | ||||||||||||||
The credit facility contains certain customary representations and warranties, as well as certain affirmative and negative covenants. During the three months ended May 3, 2013, the financial covenants in the credit facility were amended to: (i) permit in the calculation of earnings before interest, taxes, depreciation and amortization (EBITDA) the adding back of certain expenses incurred in connection with the Company’s planned separation transaction; (ii) exclude the effect of debt incurred in connection with the separation transaction for purposes of calculating consolidated funded debt; and (iii) change the ratio of consolidated funded debt to EBITDA that the Company is required to maintain. The financial covenants contained in the credit facility require that, for a period of four trailing fiscal quarters, the Company maintains a ratio of consolidated funded debt, including borrowings under this facility, to EBITDA adjusted for other items as defined in the credit facility of not more than 3.25 to 1.0 and a ratio of EBITDA adjusted for other items as defined in the credit facility to interest expense of greater than 3.5 to 1.0. The Company was in compliance with these financial covenants as of November 1, 2013. A failure by the Company to meet these financial covenants in the future would reduce and could eliminate the Company’s borrowing capacity under the credit facility. | ||||||||||||||
Other covenants in the credit facility restrict certain of the Company’s activities, including among other things, its ability to create liens, dispose of certain assets and merge or consolidate with other entities. The credit facility also contains certain customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events, nonpayment, cross-defaults to other debt, breach of specified covenants, Employee Retirement Income Security Act (ERISA) events, material monetary judgments, change of control events and the material inaccuracy of the Company’s representations and warranties. | ||||||||||||||
The Plainfield Renewable Energy Project is being financed through two secured notes aggregating $149 million, net of debt discount, provided by affiliates of the Carlyle Group (“Carlyle”). Leidos assumed in the acquisition of Plainfield a Note Purchase Agreement between Plainfield and Carlyle, consisting of two secured notes, a Construction Note and a Cash Grant Note in the amount of $81 million and $68 million, respectively, as of November 1, 2013. The Construction Note has a 17.5% stated interest rate, consisting of 8% paid in cash and the remainder is accrued over the term of the note and paid at maturity. The Cash Grant Note has a 17.5% stated interest rate, consisting of 6% paid in cash and the remainder is accrued over the term of the note and paid at maturity. Once the commercial operation date has occurred in February 2014, the Construction Note can be converted into term notes based upon conditions set forth in the Note Purchase Agreement. The Company was in compliance with its covenants as of November 1, 2013. A failure by the Company to meet these covenants in the future would reduce and could eliminate the Company’s borrowing capacity under the notes. | ||||||||||||||
On December 6, 2013, the Company entered into an Early Payoff Agreement (the "Agreement") between Plainfield and Carlyle, under which the Company agreed to pay off on December 16, 2013 its obligations under the Note Purchase Agreement to include principal and interest due under the Construction Note and Cash Grant Note, an additional interest payment as provided in Note Purchase Agreement and an early termination fee consisting of a make whole payment. In consideration of the early payment, the Agreement provided for a $6 million discount on the early termination fee and waived the covenants in Note Purchase Agreement. The Company will pay $149 million in principal, $10 million of interest, including the additional interest payment, and $6 million in an early termination fee, net of the discount, for a total amount of $165 million. | ||||||||||||||
The Company’s notes payable and long-term debt consisted of the following: | ||||||||||||||
Stated interest rate | Effective interest rate | 1-Nov-13 | 31-Jan-13 | |||||||||||
(dollars in millions) | ||||||||||||||
Leidos Holdings, Inc. senior unsecured notes: | ||||||||||||||
$450 million notes, which mature in December 2020 | 4.45 | % | 4.53 | % | $ | 449 | $ | 449 | ||||||
$300 million notes, which mature in December 2040 | 5.95 | % | 6.03 | % | 300 | 300 | ||||||||
Leidos, Inc. senior unsecured notes: | ||||||||||||||
$250 million notes, which mature in July 2032 | 7.13 | % | 7.43 | % | 248 | 248 | ||||||||
$300 million notes, which mature in July 2033 | 5.5 | % | 5.78 | % | 296 | 296 | ||||||||
Plainfield construction note, which matures February 2014 | 17.5 | % | 17.5 | % | 81 | — | ||||||||
Plainfield cash grant note, which matures April 2014 | 17.5 | % | 17.5 | % | 68 | — | ||||||||
Capital leases and other notes payable due on various dates through fiscal 2021 | 0%-3.7% | Various | 39 | 2 | ||||||||||
Total notes payable and long-term debt | 1,481 | 1,295 | ||||||||||||
Less current portion | 151 | — | ||||||||||||
Total notes payable and long-term debt, net of current portion | $ | 1,330 | $ | 1,295 | ||||||||||
Fair value of notes payable and long-term debt | $ | 1,469 | $ | 1,390 | ||||||||||
The fair value of long-term debt is determined based on current interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements (Level 2 and 3 inputs as defined by the accounting standard for fair value measurements). | ||||||||||||||
The senior unsecured notes contain customary restrictive covenants, including, among other things, restrictions on the Company’s ability to create liens and enter into sale and leaseback transactions under certain circumstances. The Company was in compliance with all covenants as of November 1, 2013. | ||||||||||||||
Leidos, Inc. | ' | |||||||||||||
Financial Instruments | ' | |||||||||||||
Financial Instruments: | ||||||||||||||
The Company’s cash equivalents were primarily comprised of investments in several large institutional money market funds that invest primarily in bills, notes and bonds issued by the U.S. Treasury, U.S. Government guaranteed repurchase agreements fully collateralized by U.S. Treasury obligations, U.S. Government guaranteed securities and investment-grade corporate securities that have maturities of three months or less, and bank deposits. There are no restrictions on the withdrawal of the Company’s cash and cash equivalents. The Company’s cash equivalents are recorded at historical cost, which equals fair value based on quoted market prices (Level 1 input as defined by the accounting standard for fair value measurements). | ||||||||||||||
Leidos has a revolving credit facility, which is fully and unconditionally guaranteed by Leidos, Inc., providing for up to $750 million in unsecured borrowing capacity at interest rates determined, at Leidos’ option, based on either LIBOR plus a margin or a defined base rate. During the three months ended May 3, 2013, the maturity date of the credit facility was extended for one additional year to March 2017, as provided for in the terms of the credit facility. As of November 1, 2013 and January 31, 2013, there were no borrowings outstanding under the credit facility. | ||||||||||||||
The credit facility contains certain customary representations and warranties, as well as certain affirmative and negative covenants. During the three months ended May 3, 2013, the financial covenants in the credit facility were amended to: (i) permit in the calculation of earnings before interest, taxes, depreciation and amortization (EBITDA) the adding back of certain expenses incurred in connection with the Company’s planned separation transaction; (ii) exclude the effect of debt incurred in connection with the separation transaction for purposes of calculating consolidated funded debt; and (iii) change the ratio of consolidated funded debt to EBITDA that the Company is required to maintain. The financial covenants contained in the credit facility require that, for a period of four trailing fiscal quarters, the Company maintains a ratio of consolidated funded debt, including borrowings under this facility, to EBITDA adjusted for other items as defined in the credit facility of not more than 3.25 to 1.0 and a ratio of EBITDA adjusted for other items as defined in the credit facility to interest expense of greater than 3.5 to 1.0. The Company was in compliance with these financial covenants as of November 1, 2013. A failure by the Company to meet these financial covenants in the future would reduce and could eliminate the Company’s borrowing capacity under the credit facility. | ||||||||||||||
Other covenants in the credit facility restrict certain of the Company’s activities, including among other things, its ability to create liens, dispose of certain assets and merge or consolidate with other entities. The credit facility also contains certain customary events of default, including, among others, defaults based on certain bankruptcy and insolvency events, nonpayment, cross-defaults to other debt, breach of specified covenants, Employee Retirement Income Security Act (ERISA) events, material monetary judgments, change of control events and the material inaccuracy of the Company’s representations and warranties. | ||||||||||||||
The Plainfield Renewable Energy Project is being financed through two secured notes aggregating $149 million, net of debt discount, provided by affiliates of the Carlyle Group (“Carlyle”). Leidos assumed in the acquisition of Plainfield a Note Purchase Agreement between Plainfield and Carlyle, consisting of two secured notes, a Construction Note and a Cash Grant Note in the amount of $81 million and $68 million, respectively, as of November 1, 2013. The Construction Note has a 17.5% stated interest rate, consisting of 8% paid in cash and the remainder is accrued over the term of the note and paid at maturity. The Cash Grant Note has a 17.5% stated interest rate, consisting of 6% paid in cash and the remainder is accrued over the term of the note and paid at maturity. Once the commercial operation date has occurred in February 2014, the Construction Note can be converted into term notes based upon conditions set forth in the Note Purchase Agreement. The Company was in compliance with its covenants as of November 1, 2013. A failure by the Company to meet these covenants in the future would reduce and could eliminate the Company’s borrowing capacity under the notes. | ||||||||||||||
On December 6, 2013, the Company entered into an Early Payoff Agreement (the "Agreement") between Plainfield and Carlyle, under which the Company agreed to pay off on December 16, 2013 its obligations under the Note Purchase Agreement to include principal and interest due under the Construction Note and Cash Grant Note, an additional interest payment as provided in Note Purchase Agreement and an early termination fee consisting of a make whole payment. In consideration of the early payment, the Agreement provided for a $6 million discount on the early termination fee and waived the covenants in Note Purchase Agreement. The Company will pay $149 million in principal, $10 million of interest, including the additional interest payment, and $6 million in an early termination fee, net of the discount, for a total amount of $165 million. | ||||||||||||||
The Company’s notes payable and long-term debt consisted of the following: | ||||||||||||||
Stated interest rate | Effective interest rate | 1-Nov-13 | 31-Jan-13 | |||||||||||
(dollars in millions) | ||||||||||||||
Leidos Holdings, Inc. senior unsecured notes: | ||||||||||||||
$450 million notes, which mature in December 2020 | 4.45 | % | 4.53 | % | $ | 449 | $ | 449 | ||||||
$300 million notes, which mature in December 2040 | 5.95 | % | 6.03 | % | 300 | 300 | ||||||||
Leidos, Inc. senior unsecured notes: | ||||||||||||||
$250 million notes, which mature in July 2032 | 7.13 | % | 7.43 | % | 248 | 248 | ||||||||
$300 million notes, which mature in July 2033 | 5.5 | % | 5.78 | % | 296 | 296 | ||||||||
Plainfield construction note, which matures February 2014 | 17.5 | % | 17.5 | % | 81 | — | ||||||||
Plainfield cash grant note, which matures April 2014 | 17.5 | % | 17.5 | % | 68 | — | ||||||||
Capital leases and other notes payable due on various dates through fiscal 2021 | 0%-3.7% | Various | 39 | 2 | ||||||||||
Total notes payable and long-term debt | 1,481 | 1,295 | ||||||||||||
Less current portion | 151 | — | ||||||||||||
Total notes payable and long-term debt, net of current portion | $ | 1,330 | $ | 1,295 | ||||||||||
Fair value of notes payable and long-term debt | $ | 1,469 | $ | 1,390 | ||||||||||
The fair value of long-term debt is determined based on current interest rates available for debt with terms and maturities similar to the Company’s existing debt arrangements (Level 2 and 3 inputs as defined by the accounting standard for fair value measurements). | ||||||||||||||
The senior unsecured notes contain customary restrictive covenants, including, among other things, restrictions on the Company’s ability to create liens and enter into sale and leaseback transactions under certain circumstances. The Company was in compliance with all covenants as of November 1, 2013. |
Related_Party_Transactions
Related Party Transactions | 9 Months Ended |
Nov. 01, 2013 | |
Related Party Transactions | ' |
Related Party Transactions: | |
Leidos, Inc. has fully and unconditionally guaranteed the obligations of Leidos under its $450 million 4.45% notes and $300 million 5.95% notes. These notes have been reflected as debt of Leidos, Inc. in these condensed consolidated financial statements. Leidos, Inc. has fully and unconditionally guaranteed any borrowings under Leidos’ amended and restated revolving credit facility maturing in fiscal 2018. Leidos has fully and unconditionally guaranteed the obligations of Leidos, Inc. under its $300 million 5.5% notes and $250 million 7.13% notes. | |
Prior to the separation of New SAIC, Leidos fully and unconditionally guaranteed the obligations of New SAIC under its $700 million credit agreement dated June 27, 2013. However, upon completion of the separation transaction on September 27, 2013, the guarantee was released and the credit support surrounding the credit agreement was eliminated. | |
Leidos and Leidos, Inc. have a related party note in connection with a loan of cash between the entities, which is adjusted to reflect issuances of stock by Leidos to employees of Leidos, Inc. and its subsidiaries and Leidos Inc.’s payment of certain obligations on behalf of Leidos. The related party note bears interest based on LIBOR plus a market-based premium. Portions of the related party note may be repaid at any time. The note automatically extends for successive one-year periods unless either Leidos or Leidos, Inc. provides prior notice to the other party. As of November 1, 2013, the related party note is a note receivable from Leidos Holdings, Inc. to Leidos, Inc. of $1.1 billion which changed from a note payable to Leidos Holdings, Inc. from Leidos, Inc. of $22 million as of January 31, 2013. This change in the related party note primarily represents the distribution of the assets and liabilities of New SAIC of $722 million and the special cash dividend payment made by Leidos, Inc. of approximately $356 million. | |
Leidos, Inc. | ' |
Related Party Transactions | ' |
Related Party Transactions: | |
Leidos, Inc. has fully and unconditionally guaranteed the obligations of Leidos under its $450 million 4.45% notes and $300 million 5.95% notes. These notes have been reflected as debt of Leidos, Inc. in these condensed consolidated financial statements. Leidos, Inc. has fully and unconditionally guaranteed any borrowings under Leidos’ amended and restated revolving credit facility maturing in fiscal 2018. Leidos has fully and unconditionally guaranteed the obligations of Leidos, Inc. under its $300 million 5.5% notes and $250 million 7.13% notes. | |
Prior to the separation of New SAIC, Leidos fully and unconditionally guaranteed the obligations of New SAIC under its $700 million credit agreement dated June 27, 2013. However, upon completion of the separation transaction on September 27, 2013, the guarantee was released and the credit support surrounding the credit agreement was eliminated. | |
Leidos and Leidos, Inc. have a related party note in connection with a loan of cash between the entities, which is adjusted to reflect issuances of stock by Leidos to employees of Leidos, Inc. and its subsidiaries and Leidos Inc.’s payment of certain obligations on behalf of Leidos. The related party note bears interest based on LIBOR plus a market-based premium. Portions of the related party note may be repaid at any time. The note automatically extends for successive one-year periods unless either Leidos or Leidos, Inc. provides prior notice to the other party. As of November 1, 2013, the related party note is a note receivable from Leidos Holdings, Inc. to Leidos, Inc. of $1.1 billion which changed from a note payable to Leidos Holdings, Inc. from Leidos, Inc. of $22 million as of January 31, 2013. This change in the related party note primarily represents the distribution of the assets and liabilities of New SAIC of $722 million and the special cash dividend payment made by Leidos, Inc. of approximately $356 million. |
Accumulated_Other_Comprehensiv
Accumulated Other Comprehensive Loss | 9 Months Ended | |||||||
Nov. 01, 2013 | ||||||||
Accumulated Other Comprehensive Loss | ' | |||||||
Accumulated Other Comprehensive Loss: | ||||||||
The components of accumulated other comprehensive loss was as follows: | ||||||||
November 1, 2013 | 31-Jan-13 | |||||||
(in millions) | ||||||||
Foreign currency translation adjustments, net of taxes of $(1) million as of November 1, 2013 and January 31, 2013 | $ | 2 | $ | 2 | ||||
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of November 1, 2013 and January 31, 2013 | (5 | ) | (5 | ) | ||||
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of November 1, 2013 and January 31, 2013 | 1 | 1 | ||||||
Total accumulated other comprehensive loss, net of taxes of $2 million as of November 1, 2013 and January 31, 2013 | $ | (2 | ) | $ | (2 | ) | ||
As of November 1, 2013, there is less than $1 million of the unrealized net loss on settled derivative instruments (pre-tax) that will be amortized and recognized as interest expense during the next 12 months. | ||||||||
Reclassifications from other comprehensive income to net income, relating to foreign currency translation adjustments, loss on settled derivative instruments and gain on defined benefit plan for the three and nine months ended November 1, 2013, were not material. Reclassifications for foreign currency translation adjustments and loss on settled derivative instruments are recorded in other income, net, and reclassifications for gain on defined benefit plan is recorded in selling, general and administrative expenses. | ||||||||
Leidos, Inc. | ' | |||||||
Accumulated Other Comprehensive Loss | ' | |||||||
Accumulated Other Comprehensive Loss: | ||||||||
The components of accumulated other comprehensive loss was as follows: | ||||||||
November 1, 2013 | 31-Jan-13 | |||||||
(in millions) | ||||||||
Foreign currency translation adjustments, net of taxes of $(1) million as of November 1, 2013 and January 31, 2013 | $ | 2 | $ | 2 | ||||
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of November 1, 2013 and January 31, 2013 | (5 | ) | (5 | ) | ||||
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of November 1, 2013 and January 31, 2013 | 1 | 1 | ||||||
Total accumulated other comprehensive loss, net of taxes of $2 million as of November 1, 2013 and January 31, 2013 | $ | (2 | ) | $ | (2 | ) | ||
As of November 1, 2013, there is less than $1 million of the unrealized net loss on settled derivative instruments (pre-tax) that will be amortized and recognized as interest expense during the next 12 months. | ||||||||
Reclassifications from other comprehensive income to net income, relating to foreign currency translation adjustments, loss on settled derivative instruments and gain on defined benefit plan for the three and nine months ended November 1, 2013, were not material. Reclassifications for foreign currency translation adjustments and loss on settled derivative instruments are recorded in other income, net, and reclassifications for gain on defined benefit plan is recorded in selling, general and administrative expenses. |
Business_Segment_Information
Business Segment Information | 9 Months Ended | |||||||||||||||
Nov. 01, 2013 | ||||||||||||||||
Business Segment Information | ' | |||||||||||||||
Business Segment Information: | ||||||||||||||||
The Company defines its reportable segments based on the way the chief operating decision maker (CODM), currently its chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance. | ||||||||||||||||
Effective February 1, 2013, the Company realigned certain business operations among its segments and renamed three of its reportable segments as follows: Health and Engineering; National Security Solutions; Technical Services and Information Technology; and Corporate and Other. In connection with the separation of New SAIC, discussed in Note 2, the Technical Services and Information Technology reportable segment was distributed to New SAIC and was included as part of the Company's discontinued operations. | ||||||||||||||||
The segment information for the periods presented, with the prior year period recast to give effect to the above changes in reportable segments, was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues: | ||||||||||||||||
Health and Engineering | $ | 408 | $ | 508 | $ | 1,380 | $ | 1,341 | ||||||||
National Security Solutions | 1,014 | 1,166 | 3,117 | 3,563 | ||||||||||||
Corporate and Other | (1 | ) | — | (8 | ) | (1 | ) | |||||||||
Intersegment elimination | (1 | ) | (1 | ) | (3 | ) | (4 | ) | ||||||||
Total revenues | $ | 1,420 | $ | 1,673 | $ | 4,486 | $ | 4,899 | ||||||||
Operating income (loss): | ||||||||||||||||
Health and Engineering | $ | (30 | ) | $ | 46 | $ | 2 | $ | 107 | |||||||
National Security Solutions | 63 | 79 | 195 | 260 | ||||||||||||
Corporate and Other | (40 | ) | (25 | ) | (128 | ) | (53 | ) | ||||||||
Total operating income | $ | (7 | ) | $ | 100 | $ | 69 | $ | 314 | |||||||
Leidos, Inc. | ' | |||||||||||||||
Business Segment Information | ' | |||||||||||||||
Business Segment Information: | ||||||||||||||||
The Company defines its reportable segments based on the way the chief operating decision maker (CODM), currently its chief executive officer, manages the operations of the Company for purposes of allocating resources and assessing performance. | ||||||||||||||||
Effective February 1, 2013, the Company realigned certain business operations among its segments and renamed three of its reportable segments as follows: Health and Engineering; National Security Solutions; Technical Services and Information Technology; and Corporate and Other. In connection with the separation of New SAIC, discussed in Note 2, the Technical Services and Information Technology reportable segment was distributed to New SAIC and was included as part of the Company's discontinued operations. | ||||||||||||||||
The segment information for the periods presented, with the prior year period recast to give effect to the above changes in reportable segments, was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues: | ||||||||||||||||
Health and Engineering | $ | 408 | $ | 508 | $ | 1,380 | $ | 1,341 | ||||||||
National Security Solutions | 1,014 | 1,166 | 3,117 | 3,563 | ||||||||||||
Corporate and Other | (1 | ) | — | (8 | ) | (1 | ) | |||||||||
Intersegment elimination | (1 | ) | (1 | ) | (3 | ) | (4 | ) | ||||||||
Total revenues | $ | 1,420 | $ | 1,673 | $ | 4,486 | $ | 4,899 | ||||||||
Operating income (loss): | ||||||||||||||||
Health and Engineering | $ | (30 | ) | $ | 46 | $ | 2 | $ | 107 | |||||||
National Security Solutions | 63 | 79 | 195 | 260 | ||||||||||||
Corporate and Other | (40 | ) | (25 | ) | (128 | ) | (53 | ) | ||||||||
Total operating income | $ | (7 | ) | $ | 100 | $ | 69 | $ | 314 | |||||||
Legal_Proceedings
Legal Proceedings | 9 Months Ended |
Nov. 01, 2013 | |
Legal Proceedings | ' |
Legal Proceedings: | |
Timekeeping Contract with City of New York | |
In March 2012, the Company reached a settlement with the U.S. Attorney’s Office for the Southern District of New York and the City of New York (City) relating to investigations being conducted by the U.S. Attorney’s Office and the City with respect to the Company’s contract to develop and implement an automated time and attendance and workforce management system (CityTime) for certain agencies of the City. As part of this settlement, the Company entered into a deferred prosecution agreement with the U.S. Attorney’s Office, under which the Company paid approximately $500 million and the U.S. Attorney’s Office deferred prosecution of a single criminal count against the Company, which alleged that the Company, through the conduct of certain managerial employees and others, caused the City to significantly overpay for the CityTime system. If the Company complies with the terms of the deferred prosecution agreement, the U.S Attorney will dismiss the criminal count at the end of a three-year period. In August 2012, the Company entered into an administrative agreement with the U.S. Army, on behalf of all agencies of the U.S. Government that confirms the Company’s continuing eligibility to enter into and perform contracts with all agencies of the U.S. Government following the CityTime settlement. The Army has determined that the U.S. Government will have adequate assurances under the terms of the administrative agreement that initiation of suspension or debarment is not necessary to protect the U.S. Government’s interests following the CityTime settlement. Under the terms of the administrative agreement, the Company has agreed, among other things, to maintain a contractor responsibility program having the specific elements described in the administrative agreement, including retaining a monitor and providing certain reports to the U.S. Army. The administrative agreement will continue in effect for five years, provided that the Company may request earlier termination after three years. | |
Data Privacy Litigation | |
The Company is a defendant in a putative class action, In Re: Science Applications International Corporation (SAIC) Backup Tape Data Theft Litigation, a Multidistrict Litigation (MDL), in the U.S. District Court for the District of Columbia. The MDL action consolidates for pretrial proceedings the following seven individual putative class action lawsuits filed against the Company from October 2011 through March 2012: (1) Richardson, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (2) Arellano, et al. v. SAIC, Inc. in U.S. District Court for the Western District of Texas; (3) Biggerman, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (4)Moskowitz, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (5) Palmer, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al., in U.S. District Court for the District of Columbia; (6) Losack, et al. v. SAIC, Inc. in U.S. District Court for the Southern District of California; and (7) Deatrick v. Science Applications International Corporation in U.S. District Court for the Northern District of California. The lawsuits were filed following the theft of computer backup tapes from a vehicle of a Company employee. The employee was transporting the backup tapes between federal facilities under an IT services contract the Company was performing in support of TRICARE, the health care program for members of the military, retirees and their families. The tapes contained personally identifiable and protected health information of approximately five million military clinic and hospital patients. There is no evidence that any of the data on the backup tapes has actually been accessed or viewed by an unauthorized person. In order for an unauthorized person to access or view the data on the backup tapes, it would require knowledge of and access to specific hardware and software and knowledge of the system and data structure. The Company has notified potentially impacted persons by letter and has offered one year of credit monitoring services to those who request these services and in certain circumstances, one year of identity restoration services. | |
In October 2012, plaintiffs filed a consolidated amended complaint in the MDL action, which supersedes all previously filed complaints in the individual lawsuits. The consolidated amended complaint includes allegations of negligence, breach of contract, breach of implied-in-fact contract, invasion of privacy by public disclosure of private facts and statutory violations of the Texas Deceptive Trade Practices Act, the California Confidentiality of Medical Information Act, California data breach notification requirements, the California Unfair Competition Law, various state consumer protection or deceptive practices statutes, state privacy statutes, the Fair Credit Reporting Act and the Privacy Act of 1974. The consolidated amended complaint seeks monetary relief, including unspecified actual damages, punitive damages, statutory damages of $1,000 for each class member and attorneys’ fees, as well as injunctive and declaratory relief. | |
The Company intends to vigorously defend itself against the claims made in the class action lawsuits. In November 2012, the Company filed a motion to dismiss all claims against the Company alleged in the consolidated amended complaint and all substantive briefing on the motion has concluded. The Company has insurance coverage against judgments or settlements relating to the claims being brought in these lawsuits, with a $10 million deductible. The insurance coverage also covers the Company’s defense costs, subject to the same deductible. As of November 1, 2013, the Company has recorded a loss provision of $10 million related to these lawsuits, representing the low end of the Company’s estimated gross loss. The Company believes that, if any loss is experienced by the Company in excess of its estimate, such a loss would not exceed the Company’s insurance coverage. As these lawsuits progress, many factors will affect the amount of the ultimate loss resulting from these claims being brought against the Company, including the outcome of any motions to dismiss, the results of any discovery, the outcome of any pretrial motions and the courts’ rulings on certain legal issues. | |
The Company has been informed that the Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) is investigating matters related to the incident. OCR is the division of HHS charged with enforcement of the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA) and the privacy, security and data breach rules which implement HIPAA. OCR may, among other things, require a corrective action plan and impose civil monetary penalties against the data owner (Department of Defense) and, in certain situations, against the data owners’ contractors, such as the Company. The Company is cooperating with TRICARE in responding to the OCR investigation. | |
Derivative and Securities Litigation | |
Between February and April 2012, six stockholder derivative lawsuits were filed, each purportedly on the Company’s behalf. Two cases have been withdrawn and the four remaining cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Derivative Litigation. The consolidated derivative complaint asserted claims against the Company’s directors and current and former officers, including the chief executive officer, two former chief executive officers, the chief financial officer, a former group president, the former program manager of the CityTime program, and the former chief systems engineer of the CityTime program. The consolidated derivative complaint claimed that the defendants breached their fiduciary duties to the Company with respect to the CityTime contract for various reasons, including failure to supervise the adequacy of the Company’s internal controls, allowing the Company to issue misleading financial statements, and failure to exercise their oversight responsibilities to ensure that the Company complied with applicable laws, rules and regulations. The complaint further claimed that the defendants are liable to the Company under theories of unjust enrichment, gross mismanagement, abuse of control, and violation of Section 14(a) of the Securities Exchange Act. On June 10, 2013, the District Court dismissed the complaint with prejudice. The plaintiffs have filed an appeal with the United States Court of Appeals for the Second Circuit. The appeal is pending. | |
The Company has also received three stockholder demand letters related to CityTime (one of which is also related to the TRICARE matter described above). An independent committee of the Company’s board of directors reviewed two of the demands and the Company’s lead director has notified both stockholders’ attorneys, on behalf of the board of directors, that the Company has decided not to pursue the claims outlined in their demand letters. The third demand is under review by the independent committee. | |
Between February and April 2012, alleged stockholders filed three putative securities class actions. One case was withdrawn and two cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Securities Litigation. The consolidated securities complaint names as defendants the Company, its chief financial officer, two former chief executive officers, a former group president, and the former program manager on the CityTime program, and was filed purportedly on behalf of all purchasers of the Company's common stock from April 11, 2007 through September 1, 2011. The consolidated securities complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations that the Company and individual defendants made misleading statements or omissions about the Company’s revenues, operating income, and internal controls in connection with disclosures relating to the CityTime project. The plaintiffs seek to recover from the Company and the individual defendants an unspecified amount of damages class members allegedly incurred by buying the Company's stock at an inflated price. On October 1, 2013, the district court dismissed many claims in the complaint with prejudice, granted the plaintiffs leave to amend some claims, and denied dismissal of limited claims. The Company intends to vigorously defend against these claims. | |
The Company currently believes that a loss relating to the above-described stockholder matters is reasonably possible, but the Company cannot reasonably estimate the range of loss in light of the fact that these matters are in their early stages. | |
Greek Government Contract | |
Background and Arbitration. In May 2003, the Company entered into a firm-fixed-price contract with the Hellenic Republic of Greece (the Customer) to provide a Command, Control, Communications, Coordination and Integration System (the System) to support the 2004 Athens Summer Olympic Games (the Olympics) and to serve as the security system for the Customer’s public order departments following completion of the Olympics. | |
In November 2008, the Customer accepted the System in writing pursuant to the requirements of the contract. At the time, the Customer determined that the System substantially complied with the terms of the contract and accepted the System with certain alleged minor omissions and deviations. Upon System acceptance, the Company invoiced the Customer for approximately $19 million, representing the undisputed portion of the contract balance owed to the Company. The Customer has not paid this final invoice. | |
In June 2009, the Company initiated arbitration before the International Chamber of Commerce against the Customer seeking damages for breaches of contract by the Customer. In July 2013, the Company received an arbitral award for approximately $53 million. The Customer has yet to satisfy the arbitral award. The Company is pursuing an enforcement action in U.S. District Court for the District of Columbia. In September 2013, the Customer filed a petition in a Greek court seeking to nullify the arbitral award and to stay enforcement of the award in Greece until a hearing can be held on the Customer's annulment petition. A hearing on the Customer's nullification request is scheduled in Greece for April 2014 although the Company is continuing to pursue its enforcement action in U.S. District Court. The outcome of the Company's pending enforcement action is uncertain. | |
Financial Status and Contingencies. As a result of the significant uncertainties on this contract, the Company converted to the completed-contract method of accounting and ceased recognizing revenues for the System development portion of this contract in fiscal 2006. No profits or losses were recorded on the Greek contract during the nine months ended November 1, 2013 and October 31, 2012. As of November 1, 2013, the Company has recorded $123 million of losses under the Greek contract, reflecting the Company’s estimated total cost to complete the System, assuming the Greek contract value was limited to the cash received to date. Based on the complex nature of this contractual situation and the difficulties encountered to date, significant uncertainties exist and the Company is unable to reliably estimate the ultimate outcome. The Company may reverse a portion of the losses from the Greek contract if it receives payments as provided in the arbitral award. | |
As of November 1, 2013, the Company has $15 million of receivables relating to value added tax (VAT) that the Company has paid and believes it is entitled to recover either as a refund from the taxing authorities or as a payment under the Greek contract. The Company has invoiced the Customer for $34 million for VAT and the Customer has failed to make payment. If the Customer fails to pay the outstanding VAT amounts or the Company is unable to recover the amount as a refund from the taxing authorities, the Company’s total losses on the Greek contract could increase. | |
The Company has met certain advance payment and performance bonding requirements through the issuance of euro-denominated standby letters of credit. As of November 1, 2013, there were $3 million in standby letters of credit outstanding relating to the support and maintenance of the System. In the arbitration, the Company was awarded $26 million representing the amounts drawn by the Customer in fiscal 2011 on certain standby letters of credit as well as damages. The principal subcontractor has provided to the Company euro-denominated standby letters of credit in the amount of $22 million as of November 1, 2013, of which $20 million relates to the delivery of the System. The Company may draw on the subcontractor’s standby letters of credit under certain circumstances by providing a statement to the responsible bank that the subcontractor has not fulfilled its obligations under the subcontract. | |
Nuclear Regulatory Commission | |
The U.S. Department of Justice filed a lawsuit against the Company in September 2004 in U.S. District Court for the District of Columbia alleging civil False Claims Act violations and breach of contract by the Company on two contracts that the Company had with the Nuclear Regulatory Commission (NRC). The complaint alleges that the Company’s performance of several subcontracts on separate U.S. Department of Energy (DOE) programs, the participation of a Company employee in an industry trade association, and certain other alleged relationships created organizational conflicts of interest under the two NRC contracts. The Company disputes that the work performed on the DOE programs and the alleged relationships raised by the government created organizational conflicts of interest. In July 2008, the jury found in favor of the government on the breach of contract and two False Claims Act counts. The jury awarded a nominal amount of $78 in damages for breach of contract and $2 million in damages for the False Claims Act claims. The judge entered the judgment in October 2008, trebling the False Claims Act damages and awarding a total of $585,000 in civil penalties. The Company appealed to the U.S. Court of Appeals for the District of Columbia Circuit. In December 2010, the Court of Appeals affirmed the District Court’s judgment as to both liability and damages of $78 on the breach of contract count and rescinded the judgment on the False Claims Act counts, including the aggregate damages and penalties. The Court of Appeals sent the False Claims Act counts back to the District Court for further proceedings. The Company has recorded a liability for an immaterial amount related to this matter as of November 1, 2013 based on its assessment of the likely outcome of this matter. | |
Other | |
The Company is also involved in various claims and lawsuits arising in the normal conduct of its business, none of which, in the opinion of the Company’s management, based upon current information, will likely have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. | |
Leidos, Inc. | ' |
Legal Proceedings | ' |
Legal Proceedings: | |
Timekeeping Contract with City of New York | |
In March 2012, the Company reached a settlement with the U.S. Attorney’s Office for the Southern District of New York and the City of New York (City) relating to investigations being conducted by the U.S. Attorney’s Office and the City with respect to the Company’s contract to develop and implement an automated time and attendance and workforce management system (CityTime) for certain agencies of the City. As part of this settlement, the Company entered into a deferred prosecution agreement with the U.S. Attorney’s Office, under which the Company paid approximately $500 million and the U.S. Attorney’s Office deferred prosecution of a single criminal count against the Company, which alleged that the Company, through the conduct of certain managerial employees and others, caused the City to significantly overpay for the CityTime system. If the Company complies with the terms of the deferred prosecution agreement, the U.S Attorney will dismiss the criminal count at the end of a three-year period. In August 2012, the Company entered into an administrative agreement with the U.S. Army, on behalf of all agencies of the U.S. Government that confirms the Company’s continuing eligibility to enter into and perform contracts with all agencies of the U.S. Government following the CityTime settlement. The Army has determined that the U.S. Government will have adequate assurances under the terms of the administrative agreement that initiation of suspension or debarment is not necessary to protect the U.S. Government’s interests following the CityTime settlement. Under the terms of the administrative agreement, the Company has agreed, among other things, to maintain a contractor responsibility program having the specific elements described in the administrative agreement, including retaining a monitor and providing certain reports to the U.S. Army. The administrative agreement will continue in effect for five years, provided that the Company may request earlier termination after three years. | |
Data Privacy Litigation | |
The Company is a defendant in a putative class action, In Re: Science Applications International Corporation (SAIC) Backup Tape Data Theft Litigation, a Multidistrict Litigation (MDL), in the U.S. District Court for the District of Columbia. The MDL action consolidates for pretrial proceedings the following seven individual putative class action lawsuits filed against the Company from October 2011 through March 2012: (1) Richardson, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (2) Arellano, et al. v. SAIC, Inc. in U.S. District Court for the Western District of Texas; (3) Biggerman, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (4)Moskowitz, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al. in U.S. District Court for the District of Columbia; (5) Palmer, et al. v. TRICARE Management Activity, Science Applications International Corporation, United States Department of Defense, et al., in U.S. District Court for the District of Columbia; (6) Losack, et al. v. SAIC, Inc. in U.S. District Court for the Southern District of California; and (7) Deatrick v. Science Applications International Corporation in U.S. District Court for the Northern District of California. The lawsuits were filed following the theft of computer backup tapes from a vehicle of a Company employee. The employee was transporting the backup tapes between federal facilities under an IT services contract the Company was performing in support of TRICARE, the health care program for members of the military, retirees and their families. The tapes contained personally identifiable and protected health information of approximately five million military clinic and hospital patients. There is no evidence that any of the data on the backup tapes has actually been accessed or viewed by an unauthorized person. In order for an unauthorized person to access or view the data on the backup tapes, it would require knowledge of and access to specific hardware and software and knowledge of the system and data structure. The Company has notified potentially impacted persons by letter and has offered one year of credit monitoring services to those who request these services and in certain circumstances, one year of identity restoration services. | |
In October 2012, plaintiffs filed a consolidated amended complaint in the MDL action, which supersedes all previously filed complaints in the individual lawsuits. The consolidated amended complaint includes allegations of negligence, breach of contract, breach of implied-in-fact contract, invasion of privacy by public disclosure of private facts and statutory violations of the Texas Deceptive Trade Practices Act, the California Confidentiality of Medical Information Act, California data breach notification requirements, the California Unfair Competition Law, various state consumer protection or deceptive practices statutes, state privacy statutes, the Fair Credit Reporting Act and the Privacy Act of 1974. The consolidated amended complaint seeks monetary relief, including unspecified actual damages, punitive damages, statutory damages of $1,000 for each class member and attorneys’ fees, as well as injunctive and declaratory relief. | |
The Company intends to vigorously defend itself against the claims made in the class action lawsuits. In November 2012, the Company filed a motion to dismiss all claims against the Company alleged in the consolidated amended complaint and all substantive briefing on the motion has concluded. The Company has insurance coverage against judgments or settlements relating to the claims being brought in these lawsuits, with a $10 million deductible. The insurance coverage also covers the Company’s defense costs, subject to the same deductible. As of November 1, 2013, the Company has recorded a loss provision of $10 million related to these lawsuits, representing the low end of the Company’s estimated gross loss. The Company believes that, if any loss is experienced by the Company in excess of its estimate, such a loss would not exceed the Company’s insurance coverage. As these lawsuits progress, many factors will affect the amount of the ultimate loss resulting from these claims being brought against the Company, including the outcome of any motions to dismiss, the results of any discovery, the outcome of any pretrial motions and the courts’ rulings on certain legal issues. | |
The Company has been informed that the Office for Civil Rights (OCR) of the Department of Health and Human Services (HHS) is investigating matters related to the incident. OCR is the division of HHS charged with enforcement of the Health Insurance Portability and Accountability Act of 1996, as amended (HIPAA) and the privacy, security and data breach rules which implement HIPAA. OCR may, among other things, require a corrective action plan and impose civil monetary penalties against the data owner (Department of Defense) and, in certain situations, against the data owners’ contractors, such as the Company. The Company is cooperating with TRICARE in responding to the OCR investigation. | |
Derivative and Securities Litigation | |
Between February and April 2012, six stockholder derivative lawsuits were filed, each purportedly on the Company’s behalf. Two cases have been withdrawn and the four remaining cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Derivative Litigation. The consolidated derivative complaint asserted claims against the Company’s directors and current and former officers, including the chief executive officer, two former chief executive officers, the chief financial officer, a former group president, the former program manager of the CityTime program, and the former chief systems engineer of the CityTime program. The consolidated derivative complaint claimed that the defendants breached their fiduciary duties to the Company with respect to the CityTime contract for various reasons, including failure to supervise the adequacy of the Company’s internal controls, allowing the Company to issue misleading financial statements, and failure to exercise their oversight responsibilities to ensure that the Company complied with applicable laws, rules and regulations. The complaint further claimed that the defendants are liable to the Company under theories of unjust enrichment, gross mismanagement, abuse of control, and violation of Section 14(a) of the Securities Exchange Act. On June 10, 2013, the District Court dismissed the complaint with prejudice. The plaintiffs have filed an appeal with the United States Court of Appeals for the Second Circuit. The appeal is pending. | |
The Company has also received three stockholder demand letters related to CityTime (one of which is also related to the TRICARE matter described above). An independent committee of the Company’s board of directors reviewed two of the demands and the Company’s lead director has notified both stockholders’ attorneys, on behalf of the board of directors, that the Company has decided not to pursue the claims outlined in their demand letters. The third demand is under review by the independent committee. | |
Between February and April 2012, alleged stockholders filed three putative securities class actions. One case was withdrawn and two cases were consolidated in the U.S. District Court for the Southern District of New York in In re SAIC, Inc. Securities Litigation. The consolidated securities complaint names as defendants the Company, its chief financial officer, two former chief executive officers, a former group president, and the former program manager on the CityTime program, and was filed purportedly on behalf of all purchasers of the Company's common stock from April 11, 2007 through September 1, 2011. The consolidated securities complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 based on allegations that the Company and individual defendants made misleading statements or omissions about the Company’s revenues, operating income, and internal controls in connection with disclosures relating to the CityTime project. The plaintiffs seek to recover from the Company and the individual defendants an unspecified amount of damages class members allegedly incurred by buying the Company's stock at an inflated price. On October 1, 2013, the district court dismissed many claims in the complaint with prejudice, granted the plaintiffs leave to amend some claims, and denied dismissal of limited claims. The Company intends to vigorously defend against these claims. | |
The Company currently believes that a loss relating to the above-described stockholder matters is reasonably possible, but the Company cannot reasonably estimate the range of loss in light of the fact that these matters are in their early stages. | |
Greek Government Contract | |
Background and Arbitration. In May 2003, the Company entered into a firm-fixed-price contract with the Hellenic Republic of Greece (the Customer) to provide a Command, Control, Communications, Coordination and Integration System (the System) to support the 2004 Athens Summer Olympic Games (the Olympics) and to serve as the security system for the Customer’s public order departments following completion of the Olympics. | |
In November 2008, the Customer accepted the System in writing pursuant to the requirements of the contract. At the time, the Customer determined that the System substantially complied with the terms of the contract and accepted the System with certain alleged minor omissions and deviations. Upon System acceptance, the Company invoiced the Customer for approximately $19 million, representing the undisputed portion of the contract balance owed to the Company. The Customer has not paid this final invoice. | |
In June 2009, the Company initiated arbitration before the International Chamber of Commerce against the Customer seeking damages for breaches of contract by the Customer. In July 2013, the Company received an arbitral award for approximately $53 million. The Customer has yet to satisfy the arbitral award. The Company is pursuing an enforcement action in U.S. District Court for the District of Columbia. In September 2013, the Customer filed a petition in a Greek court seeking to nullify the arbitral award and to stay enforcement of the award in Greece until a hearing can be held on the Customer's annulment petition. A hearing on the Customer's nullification request is scheduled in Greece for April 2014 although the Company is continuing to pursue its enforcement action in U.S. District Court. The outcome of the Company's pending enforcement action is uncertain. | |
Financial Status and Contingencies. As a result of the significant uncertainties on this contract, the Company converted to the completed-contract method of accounting and ceased recognizing revenues for the System development portion of this contract in fiscal 2006. No profits or losses were recorded on the Greek contract during the nine months ended November 1, 2013 and October 31, 2012. As of November 1, 2013, the Company has recorded $123 million of losses under the Greek contract, reflecting the Company’s estimated total cost to complete the System, assuming the Greek contract value was limited to the cash received to date. Based on the complex nature of this contractual situation and the difficulties encountered to date, significant uncertainties exist and the Company is unable to reliably estimate the ultimate outcome. The Company may reverse a portion of the losses from the Greek contract if it receives payments as provided in the arbitral award. | |
As of November 1, 2013, the Company has $15 million of receivables relating to value added tax (VAT) that the Company has paid and believes it is entitled to recover either as a refund from the taxing authorities or as a payment under the Greek contract. The Company has invoiced the Customer for $34 million for VAT and the Customer has failed to make payment. If the Customer fails to pay the outstanding VAT amounts or the Company is unable to recover the amount as a refund from the taxing authorities, the Company’s total losses on the Greek contract could increase. | |
The Company has met certain advance payment and performance bonding requirements through the issuance of euro-denominated standby letters of credit. As of November 1, 2013, there were $3 million in standby letters of credit outstanding relating to the support and maintenance of the System. In the arbitration, the Company was awarded $26 million representing the amounts drawn by the Customer in fiscal 2011 on certain standby letters of credit as well as damages. The principal subcontractor has provided to the Company euro-denominated standby letters of credit in the amount of $22 million as of November 1, 2013, of which $20 million relates to the delivery of the System. The Company may draw on the subcontractor’s standby letters of credit under certain circumstances by providing a statement to the responsible bank that the subcontractor has not fulfilled its obligations under the subcontract. | |
Nuclear Regulatory Commission | |
The U.S. Department of Justice filed a lawsuit against the Company in September 2004 in U.S. District Court for the District of Columbia alleging civil False Claims Act violations and breach of contract by the Company on two contracts that the Company had with the Nuclear Regulatory Commission (NRC). The complaint alleges that the Company’s performance of several subcontracts on separate U.S. Department of Energy (DOE) programs, the participation of a Company employee in an industry trade association, and certain other alleged relationships created organizational conflicts of interest under the two NRC contracts. The Company disputes that the work performed on the DOE programs and the alleged relationships raised by the government created organizational conflicts of interest. In July 2008, the jury found in favor of the government on the breach of contract and two False Claims Act counts. The jury awarded a nominal amount of $78 in damages for breach of contract and $2 million in damages for the False Claims Act claims. The judge entered the judgment in October 2008, trebling the False Claims Act damages and awarding a total of $585,000 in civil penalties. The Company appealed to the U.S. Court of Appeals for the District of Columbia Circuit. In December 2010, the Court of Appeals affirmed the District Court’s judgment as to both liability and damages of $78 on the breach of contract count and rescinded the judgment on the False Claims Act counts, including the aggregate damages and penalties. The Court of Appeals sent the False Claims Act counts back to the District Court for further proceedings. The Company has recorded a liability for an immaterial amount related to this matter as of November 1, 2013 based on its assessment of the likely outcome of this matter. | |
Other | |
The Company is also involved in various claims and lawsuits arising in the normal conduct of its business, none of which, in the opinion of the Company’s management, based upon current information, will likely have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. |
Other_Commitments_and_Continge
Other Commitments and Contingencies | 9 Months Ended |
Nov. 01, 2013 | |
Other Commitments and Contingencies | ' |
Other Commitments and Contingencies: | |
VirnetX, Inc. | |
In fiscal 2007, the Company transferred several patents to VirnetX Inc., a subsidiary of VirnetX Holding Corp. In consideration of this transfer, the Company received certain license rights and the right to receive a percentage of the consideration received in patent infringement or enforcement claims against third parties. In November 2012, a jury found that Apple Corporation infringed two of the patents that the Company previously transferred to VirnetX and awarded approximately $368 million to VirnetX. Under its agreements with VirnetX, the Company would receive 25% of the proceeds obtained by VirnetX in this lawsuit against Apple after reduction for attorneys’ fees and costs incurred in litigating those claims. Apple has filed an appeal of the jury verdict with the United States Court of Appeals for the Federal Circuit which remains pending. No assurances can be given as to when or if the Company will receive any proceeds in connection with this jury award. In addition, if the Company receives any proceeds under its agreements with VirnetX, the Company is required to pay a royalty on the proceeds received to the customer who paid for the development of the technology. The Company does not have any assets or liabilities recorded in connection with this matter as of November 1, 2013. | |
Government Investigations and Reviews | |
The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect 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. Adverse findings in these investigations or reviews can lead to criminal, civil or administrative proceedings and the Company could face penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. Adverse findings could also have a material adverse effect on the Company’s business, consolidated financial position, results of operations and cash flows due to its reliance on government contracts. During the first nine months of fiscal 2014, the Company paid approximately $18 million to the government to settle various investigations and reviews, including investigations arising under the Civil False Claims Act. | |
U.S. Government agencies, including the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA) 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, including: a contractor’s accounting system, earned value management system, estimating system, materials management and accounting system, property management system and purchasing system. Both contractors and the U.S. Government agencies conducting these audits and reviews have come under increased scrutiny. As a result, audits and reviews have become more rigorous and the standards to which the Company is held are being more strictly interpreted, increasing the likelihood of an audit or review resulting in an adverse outcome. During the course of its current audits, the DCAA is closely examining and questioning several of the Company’s long established and disclosed practices that it had previously audited and accepted, increasing the uncertainty as to the ultimate conclusion that will be reached. | |
The Company changed its indirect rate structure used in its indirect cost system and its direct labor bid structure used for its estimating system for fiscal 2011 and future years. The DCAA is performing reviews of these changes and the Company’s compliance with certain other U.S. Government Cost Accounting Standards. A finding of significant control deficiencies in the Company’s system audits or other reviews can result in decremented billing rates to its U.S. Government customers until the control deficiencies are corrected and their remediation is accepted by the DCMA. | |
The Company’s indirect cost audits by the DCAA have not been completed for fiscal 2006 and subsequent fiscal years. Although the Company has recorded contract revenues subsequent to fiscal 2005 based upon an estimate of costs that the Company believes will be approved upon final audit or review, the Company does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Company’s estimates, its profitability would be adversely affected. Pursuant to the Distribution Agreement with New SAIC and upon the separation date, the Company's liability of $45 million for net amounts to be refunded to customers for potential adjustments from such audit or review of contract costs was allocated to New SAIC in the amount of $18 million and the Company in the amount of $27 million. Subsequent to the separation date, any amounts owed in addition to the $45 million liability for periods prior to the separation date will be proportioned between Leidos and New SAIC in accordance with the Distribution Agreement. As of November 1, 2013, the Company has recorded a liability of $29 million for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs. | |
Tax Audits and Reviews | |
The Company files income tax returns in the United States and various state and foreign jurisdictions and is subject to routine compliance reviews by the IRS and other taxing authorities. The Company has effectively settled with the IRS for fiscal years prior to and including fiscal 2009, with fiscal 2010 subject to examination. The Company also settled fiscal 2011 and 2012 as a result of the Company’s participation in the IRS Compliance Assurance Process (CAP) beginning in fiscal 2011. As part of the CAP, the Company and the IRS endeavor to agree on the treatment of all tax positions prior to the tax return being filed, thereby greatly reducing the period of time between tax return submission and settlement with the IRS. Future and ongoing reviews could have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. | |
As of November 1, 2013, the Company had liabilities for uncertain tax positions of $16 million, $11 million of which were classified as other long-term liabilities in the condensed consolidated balance sheet. | |
During the next 12 months, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and international, could be reached with respect to $6 million of the Company’s uncertain tax positions, including $1 million of previously accrued interest, depending on the timing of ongoing examinations, any litigation and expiration of statute of limitations, either because the Company’s tax positions are sustained or because the Company agrees to their disallowance and pays the related income tax. The resolution of tax matters related to uncertain tax positions could result in a $3 million reduction in income tax expense during the third quarter of fiscal 2015. | |
While the Company believes it has adequate accruals for uncertain tax positions, the tax authorities may determine that the Company owes taxes in excess of recorded accruals or the recorded accruals may be in excess of the final settlement amounts agreed to by the tax authorities. | |
The Company is subject to periodic audits by government agencies for taxes other than income taxes. The Company does not believe that the outcome of any other such tax matters would have a material adverse effect on its consolidated financial position, results of operations, or cash flows. | |
Letters of Credit and Surety Bonds | |
The Company has outstanding letters of credit of $98 million as of November 1, 2013, principally related to guarantees on contracts. The Company also has outstanding surety bonds in the amount of $140 million, principally related to performance and payment bonds on the Company’s contracts. | |
Leidos, Inc. | ' |
Other Commitments and Contingencies | ' |
Other Commitments and Contingencies: | |
VirnetX, Inc. | |
In fiscal 2007, the Company transferred several patents to VirnetX Inc., a subsidiary of VirnetX Holding Corp. In consideration of this transfer, the Company received certain license rights and the right to receive a percentage of the consideration received in patent infringement or enforcement claims against third parties. In November 2012, a jury found that Apple Corporation infringed two of the patents that the Company previously transferred to VirnetX and awarded approximately $368 million to VirnetX. Under its agreements with VirnetX, the Company would receive 25% of the proceeds obtained by VirnetX in this lawsuit against Apple after reduction for attorneys’ fees and costs incurred in litigating those claims. Apple has filed an appeal of the jury verdict with the United States Court of Appeals for the Federal Circuit which remains pending. No assurances can be given as to when or if the Company will receive any proceeds in connection with this jury award. In addition, if the Company receives any proceeds under its agreements with VirnetX, the Company is required to pay a royalty on the proceeds received to the customer who paid for the development of the technology. The Company does not have any assets or liabilities recorded in connection with this matter as of November 1, 2013. | |
Government Investigations and Reviews | |
The Company is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect 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. Adverse findings in these investigations or reviews can lead to criminal, civil or administrative proceedings and the Company could face penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. Adverse findings could also have a material adverse effect on the Company’s business, consolidated financial position, results of operations and cash flows due to its reliance on government contracts. During the first nine months of fiscal 2014, the Company paid approximately $18 million to the government to settle various investigations and reviews, including investigations arising under the Civil False Claims Act. | |
U.S. Government agencies, including the Defense Contract Audit Agency (DCAA), Defense Contract Management Agency (DCMA) 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, including: a contractor’s accounting system, earned value management system, estimating system, materials management and accounting system, property management system and purchasing system. Both contractors and the U.S. Government agencies conducting these audits and reviews have come under increased scrutiny. As a result, audits and reviews have become more rigorous and the standards to which the Company is held are being more strictly interpreted, increasing the likelihood of an audit or review resulting in an adverse outcome. During the course of its current audits, the DCAA is closely examining and questioning several of the Company’s long established and disclosed practices that it had previously audited and accepted, increasing the uncertainty as to the ultimate conclusion that will be reached. | |
The Company changed its indirect rate structure used in its indirect cost system and its direct labor bid structure used for its estimating system for fiscal 2011 and future years. The DCAA is performing reviews of these changes and the Company’s compliance with certain other U.S. Government Cost Accounting Standards. A finding of significant control deficiencies in the Company’s system audits or other reviews can result in decremented billing rates to its U.S. Government customers until the control deficiencies are corrected and their remediation is accepted by the DCMA. | |
The Company’s indirect cost audits by the DCAA have not been completed for fiscal 2006 and subsequent fiscal years. Although the Company has recorded contract revenues subsequent to fiscal 2005 based upon an estimate of costs that the Company believes will be approved upon final audit or review, the Company does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Company’s estimates, its profitability would be adversely affected. Pursuant to the Distribution Agreement with New SAIC and upon the separation date, the Company's liability of $45 million for net amounts to be refunded to customers for potential adjustments from such audit or review of contract costs was allocated to New SAIC in the amount of $18 million and the Company in the amount of $27 million. Subsequent to the separation date, any amounts owed in addition to the $45 million liability for periods prior to the separation date will be proportioned between Leidos and New SAIC in accordance with the Distribution Agreement. As of November 1, 2013, the Company has recorded a liability of $29 million for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs. | |
Tax Audits and Reviews | |
The Company files income tax returns in the United States and various state and foreign jurisdictions and is subject to routine compliance reviews by the IRS and other taxing authorities. The Company has effectively settled with the IRS for fiscal years prior to and including fiscal 2009, with fiscal 2010 subject to examination. The Company also settled fiscal 2011 and 2012 as a result of the Company’s participation in the IRS Compliance Assurance Process (CAP) beginning in fiscal 2011. As part of the CAP, the Company and the IRS endeavor to agree on the treatment of all tax positions prior to the tax return being filed, thereby greatly reducing the period of time between tax return submission and settlement with the IRS. Future and ongoing reviews could have a material adverse effect on the Company’s consolidated financial position, results of operations or cash flows. | |
As of November 1, 2013, the Company had liabilities for uncertain tax positions of $16 million, $11 million of which were classified as other long-term liabilities in the condensed consolidated balance sheet. | |
During the next 12 months, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and international, could be reached with respect to $6 million of the Company’s uncertain tax positions, including $1 million of previously accrued interest, depending on the timing of ongoing examinations, any litigation and expiration of statute of limitations, either because the Company’s tax positions are sustained or because the Company agrees to their disallowance and pays the related income tax. The resolution of tax matters related to uncertain tax positions could result in a $3 million reduction in income tax expense during the third quarter of fiscal 2015. | |
While the Company believes it has adequate accruals for uncertain tax positions, the tax authorities may determine that the Company owes taxes in excess of recorded accruals or the recorded accruals may be in excess of the final settlement amounts agreed to by the tax authorities. | |
The Company is subject to periodic audits by government agencies for taxes other than income taxes. The Company does not believe that the outcome of any other such tax matters would have a material adverse effect on its consolidated financial position, results of operations, or cash flows. | |
Letters of Credit and Surety Bonds | |
The Company has outstanding letters of credit of $98 million as of November 1, 2013, principally related to guarantees on contracts. The Company also has outstanding surety bonds in the amount of $140 million, principally related to performance and payment bonds on the Company’s contracts. |
Subsequent_Events_Notes
Subsequent Events (Notes) | 9 Months Ended |
Nov. 01, 2013 | |
Subsequent Event [Line Items] | ' |
Subsequent Events | ' |
Subsequent Events: | |
On December 6, 2013, the Company’s Board of Directors authorized the repurchase of up to 20 million shares of the Company’s outstanding common stock through one or more open market repurchases or privately negotiated transactions. This share repurchase authorization replaces the March 2012 share repurchase authorization. | |
On December 6, 2013, the Company’s Board of Directors declared a quarterly cash dividend of $0.32 per share payable on January 30, 2014 to stockholders of record as of the close of business on January 15, 2014. | |
Leidos, Inc. | ' |
Subsequent Event [Line Items] | ' |
Subsequent Events | ' |
Subsequent Events: | |
On December 6, 2013, the Company’s Board of Directors authorized the repurchase of up to 20 million shares of the Company’s outstanding common stock through one or more open market repurchases or privately negotiated transactions. This share repurchase authorization replaces the March 2012 share repurchase authorization. | |
On December 6, 2013, the Company’s Board of Directors declared a quarterly cash dividend of $0.32 per share payable on January 30, 2014 to stockholders of record as of the close of business on January 15, 2014. |
Summary_of_Significant_Account1
Summary of Significant Accounting Policies (Policies) | 9 Months Ended | |||||||
Nov. 01, 2013 | ||||||||
Nature of Operations and Basis of Presentation | ' | |||||||
Nature of Operations and Basis of Presentation | ||||||||
Leidos Holdings, Inc. ("Leidos") (formerly known as SAIC, Inc.) is a holding company whose direct 100%-owned subsidiary is Leidos, Inc. (formerly known as Science Applications International Corporation), a company focused on delivering science and technology solutions primarily in the areas of national security, health and engineering to agencies of the U.S. Department of Defense (DoD), the intelligence community, the U.S. Department of Homeland Security, and other U.S. Government civil agencies, state and local government agencies, foreign governments and customers across a variety of commercial markets. Unless indicated otherwise, references to the "Company", "we", "us" and "our" refer collectively to Leidos Holdings, Inc., Leidos, Inc., and its consolidated subsidiaries. | ||||||||
On September 27, 2013 (the "Distribution Date"), Leidos completed the previously announced separation of its technical services and enterprise information technology services business into an independent, publicly traded company named Science Applications International Corporation (“New SAIC”) (formerly known as SAIC Gemini, Inc.). The separation was effected through a tax-free distribution to Leidos' stockholders of 100% of the shares of New SAIC's common stock. On the Distribution Date, New SAIC's common stock was distributed, on a pro rata basis, to Leidos' stockholders of record as of the close of business on September 19, 2013, the record date. Each holder of Leidos common stock received one share of New SAIC common stock for every seven shares of Leidos common stock held on the record date. Prior to the Distribution Date, Leidos Holdings, Inc. was named SAIC, Inc. and Leidos, Inc. was named Science Applications International Corporation. The companies' names were changed as part of the separation, and New SAIC assumed the name Science Applications International Corporation. | ||||||||
As a result of the separation, the assets, liabilities, results of operations and cash flows of New SAIC have been classified as discontinued operations for all periods presented. References to financial data are to the Company’s continuing operations, unless otherwise noted. See Note 2-Discontinued Operations for further information. | ||||||||
Immediately following the distribution, Leidos effectuated a one-for-four reverse stock split of its shares of common stock, so that every four shares of Leidos common stock issued and outstanding were combined and converted into one share of Leidos common stock. Each reference to the number of shares outstanding or per share amounts has been adjusted to reflect the reverse stock split for all periods presented. | ||||||||
The condensed consolidated financial statements of Leidos include the accounts of its majority-owned and 100%-owned subsidiaries, including Leidos, Inc. The condensed consolidated financial statements of Leidos, Inc. include the accounts of its majority-owned and 100%-owned subsidiaries. Leidos does not have separate operations, assets or liabilities independent of Leidos, Inc., except for a note with Leidos, Inc. (the “related party note”), on which interest is recognized, and cash from the dividend paid by New SAIC that is held at Leidos for general corporate purposes, including dividend payments and share repurchases. From time to time, Leidos issues stock to employees of Leidos, Inc. and its subsidiaries, which is reflected in Leidos’ Condensed Consolidated Statement of Stockholders’ Equity and results in an increase to the related party note (see Note 8). All intercompany transactions and accounts have been eliminated in consolidation. | ||||||||
The accompanying financial information has been prepared by the Company pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and accounting principles generally accepted in the United States of America (GAAP). Certain disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and combined notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended January 31, 2013. The preparation of 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. 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. | ||||||||
In the opinion of management, the financial information as of November 1, 2013 and for the three and nine months ended November 1, 2013 and October 31, 2012 reflects all adjustments, which consist of normal recurring adjustments, necessary for a fair presentation thereof. Operating results for the three and nine months ended November 1, 2013 are not necessarily indicative of the results that may be expected for the fiscal year ending January 31, 2014, or any future period. | ||||||||
Reporting Periods | ' | |||||||
Reporting Periods | ||||||||
Unless otherwise noted, references to fiscal years are to fiscal years ended January 31, for fiscal 2013 and earlier periods, or fiscal years ended the Friday closest to January 31, for fiscal 2014 or later periods. For fiscal 2013, the Company’s fiscal quarters ended on the last calendar day of each of April, July and October. Effective in fiscal 2014, the Company changed its fiscal year to a 52/53 week fiscal year ending on the Friday closest to January 31, with fiscal quarters typically consisting of 13 weeks. Fiscal 2014 began on February 1, 2013 and ends on January 31, 2014. The third quarter of fiscal 2014 ended on November 1, 2013. The Company does not believe that the change in its fiscal year has a material effect on the comparability of the periods presented. | ||||||||
Variable Interest Entity (VIE) | ' | |||||||
Variable Interest Entity (VIE) | ||||||||
In fiscal 2012, the Company entered into a fixed price agreement to provide engineering, procurement, and construction services to a special purpose limited liability company (Plainfield Renewable Energy LLC or "Plainfield") for a specific renewable energy project. The Company analyzed this arrangement and determined that Plainfield is a VIE. Prior to the third quarter of fiscal 2014, the VIE was not consolidated by the Company because the Company was not the primary beneficiary. | ||||||||
On October 11, 2013, the Company and Plainfield Renewable Energy Owner, LLC (“project owner”) entered into a consensual foreclosure agreement pursuant to which, the project owners agreed to transfer 100% of the equity interest of Plainfield Renewable Energy Holdings, LLC (“PRE Holdings”) to an indirect wholly owned subsidiary of Leidos in full satisfaction of certain secured obligations owed by the project owner to the Company. As a result of the entry into the foreclosure agreement, the Company determined that it has the power to direct the activities of the VIE and has the right to receive benefits from or the obligation to absorb the losses of the VIE. Accordingly, the Company was deemed the primary beneficiary of the VIE, resulting in the consolidation of Plainfield as of October 11, 2013. See Note 3 - Acquisitions, for further information. | ||||||||
Goodwill and Intangible Assets | ' | |||||||
Goodwill and Intangible Assets | ||||||||
The Company evaluates goodwill for potential impairment annually at the beginning of the fourth quarter, or whenever events or circumstances indicate that the carrying value of goodwill may not be recoverable. The goodwill impairment test is a two-step process performed at the reporting unit level. The first step consists of estimating the fair values of each of the reporting units based on a market approach and an income approach. Fair value computed using these two methods is determined using a number of factors, including projected future operating results and business plans, economic projections, anticipated future cash flows, comparable market data based on industry grouping, and the cost of capital. The estimated fair values are compared with the carrying values of the reporting units. If the fair value is less than the carrying value of a reporting unit, which includes the allocated goodwill, a second step is performed to compute the amount of the impairment by determining an implied fair value of goodwill. The implied fair value of goodwill is the residual fair value derived by deducting the fair value of a reporting unit’s identifiable assets and liabilities from its estimated fair value calculated in the first step. The impairment expense represents the excess of the carrying amount of the reporting units’ goodwill over the implied fair value of the reporting units’ goodwill. The Company faces continued uncertainty in its business environment due to the substantial fiscal and economic challenges facing the U.S. Government, its primary customer, as well as challenges in the commercial healthcare industry, compounded by lower levels of U.S. Government reimbursements, including reductions in Medicare reimbursements. Adverse changes in fiscal and economic conditions, such as the manner in which budget cuts are implemented, including sequestration, and issues related to the nation’s debt ceiling, could result in an impairment of goodwill. | ||||||||
Intangible assets with finite lives are amortized using the method that best reflects how their economic benefits are utilized or, if a pattern of economic benefits cannot be reliably determined, on a straight-line basis over their estimated useful lives. Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets with indefinite lives are not amortized but are assessed for impairment at the beginning of the fourth quarter and whenever events or changes in circumstances indicate that the carrying value may not be recoverable. | ||||||||
Receivables | ' | |||||||
Receivables | ||||||||
The Company’s accounts receivable include unbilled receivables, which consist of costs and fees billable upon contract completion or the occurrence of a specified event, substantially all of which is expected to be billed and collected within one year. Unbilled receivables are stated at estimated realizable value. Since the Company’s receivables, other than those receivables with deferred payment terms, are primarily with the U.S. Government, the Company does not have a material credit risk exposure. Contract retentions are billed when the Company has negotiated final indirect rates with the U.S. Government and, once billed, are subject to audit and approval by government representatives. Consequently, the timing of collection of retention balances is outside the Company’s control. Based on the Company’s historical experience, the majority of retention balances are expected to be collected beyond one year and write-offs of retention balances have not been significant. | ||||||||
The Company has extended deferred payment terms with contractual maturities that may exceed one year to commercial customers related to certain construction projects. During the three months ended November 1, 2013, the Company received a $25 million payment from one construction project and recorded bad debt expense in the Company's condensed consolidated statements of income of $42 million related to two different construction projects. In addition, approximately $105 million of the outstanding deferred payment term receivables were used to acquire PRE Holdings. See Note 3 - Acquisitions, for further information. As of November 1, 2013, the Company had outstanding receivables with deferred payment terms of $30 million, which are expected to be collected in fiscal 2015, when the customers obtain financing. | ||||||||
When events or conditions indicate that amounts outstanding from customers may become uncollectible, an allowance is estimated and recorded. | ||||||||
Changes in Estimates on Contracts | ' | |||||||
Changes in Estimates on Contracts | ||||||||
Changes in estimates related to certain types of contracts accounted for using the percentage of completion method of accounting are recognized 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 contract performance period for a variety of reasons, including changes in contract scope, changes in contract cost estimates due to unanticipated cost growth or retirements of risk for amounts different than estimated, and changes in estimated incentive or award fees. Aggregate changes in contract estimates resulted in a decrease to operating income of $1 million ($0.01 per diluted share) and $29 million ($0.22 per diluted share) for the three and nine months ended November 1, 2013, respectively. Aggregate changes in contract estimates resulted in an increase to operating income of $3 million ($0.03 per diluted share) for the three months ended October 31, 2012 and an increase to operating income of $2 million ($0.01 per diluted share) for the nine months ended October 31, 2012. | ||||||||
Supplementary Cash Flow Information | ' | |||||||
Supplementary Cash Flow Information | ||||||||
Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows: | ||||||||
Nine Months Ended | ||||||||
November 1, | October 31, | |||||||
2013 | 2012 | |||||||
(in millions) | ||||||||
Vested stock issued as settlement of annual bonus accruals | $ | 2 | $ | 2 | ||||
Stock issued in lieu of cash dividend | $ | 17 | $ | 2 | ||||
Fair value of assets acquired in acquisitions (See Note 3 - Acquisitions) | $ | 259 | $ | 541 | ||||
Less: cash paid in acquisitions, net of cash acquired of $9 million in fiscal 2013 | $ | (1 | ) | $ | (478 | ) | ||
Forgiveness of accounts receivable to acquire equity interest in business combination | $ | (105 | ) | $ | — | |||
Liabilities assumed in acquisitions, including accrued acquisition payments | $ | (148 | ) | $ | 63 | |||
Accrued liability for acquisition of business | $ | (5 | ) | $ | — | |||
Cash paid for interest (including discontinued operations) | $ | 37 | $ | 53 | ||||
Cash paid for income taxes (including discontinued operations) | $ | 62 | $ | 126 | ||||
Special Cash Dividend | ' | |||||||
Special Cash Dividend | ||||||||
In March 2013, Leidos' board of directors declared a special cash dividend of $4.00 per share of Leidos common stock and paid an aggregate of $342 million on June 28, 2013 to stockholders of record on June 14, 2013. See Note 5-Stock Based Compensation, for further information regarding the modifications made to the Company’s outstanding stock options resulting from the special cash dividend. There were no modifications made to the Company’s vesting stock awards and performance-based stock awards as a result of the special dividend. | ||||||||
Sale and Leaseback Agreement | ' | |||||||
Sale and Leaseback Agreement | ||||||||
On May 3, 2013, the Company entered into a purchase and sale agreement relating to the sale of approximately 18 acres of land in Fairfax County, Virginia, including four office buildings, a multi-level parking garage, surface parking lots, and other related improvements and structures, as well as tangible personal property and third-party leases. This sale is expected to be completed in a series of transactions over approximately six years. | ||||||||
On July 26, 2013, the Company closed the first phase of the purchase and sale agreement and received proceeds of $83 million, net of selling costs. The Company leased back from the buyer three of the office buildings over varying lease terms. The sale of two of the office buildings will be accounted for as a sale-leaseback transaction with proceeds from the sale of $40 million, a corresponding book value of $42 million resulting in a $2 million loss recorded in selling, general and administrative expenses. These leases will be accounted for as operating leases over a six months term. The sale of the third office building will be accounted for as a financing transaction. The allocated consideration received of $38 million was recorded as a note payable to be paid over seven years with interest at the lessee’s incremental borrowing rate, estimated at 3.7%. The right of use for the multi-level parking garage and surface parking lots were allocated proceeds of $1 million and $4 million, respectively, and were accounted for as other long term liabilities. | ||||||||
Accounting Standards Updates Issued But Not Yet Adopted | ' | |||||||
Accounting Standards Updates Issued But Not Yet Adopted | ||||||||
Accounting standards and updates issued but not effective for the Company until after November 1, 2013 are not expected to have a material effect on the Company’s consolidated financial position or results of operations. |
Summary_of_Significant_Account2
Summary of Significant Accounting Policies (Tables) | 9 Months Ended | |||||||||
Nov. 01, 2013 | ||||||||||
Accounting Policies [Abstract] | ' | |||||||||
Schedule of Separation Transaction and Restructuring Expense | ' | |||||||||
There were no separation transaction and restructuring expenses for continuing operations in fiscal year 2013 and the separation transaction and restructuring expenses for continuing operations for fiscal year 2014 were as follows: | ||||||||||
Three Months Ended | Nine Months Ended | |||||||||
November 1, 2013 | November 1, 2013 | |||||||||
(in millions) | ||||||||||
Strategic advisory services | $ | 5 | $ | 7 | ||||||
Legal and accounting services | 1 | 1 | ||||||||
Lease termination and facility consolidation expenses | 17 | 40 | ||||||||
Severance costs | 2 | 10 | ||||||||
Separation transaction and restructuring expenses in operating income | 25 | 58 | ||||||||
Less: income tax benefit | (10 | ) | (23 | ) | ||||||
Separation transaction and restructuring expenses, net of tax | $ | 15 | $ | 35 | ||||||
Schedule of Restructuring Reserve | ' | |||||||||
The following table represents the restructuring liability balance as of November 1, 2013, and summarizes the changes during the period attributable to costs incurred and charged to expense, costs paid or otherwise settled, and any adjustments to the liability: | ||||||||||
Severance Costs | Lease Termination and Facility Consolidation Expenses | Total | ||||||||
(in millions) | ||||||||||
Balance as of January 31, 2013 | $ | 8 | $ | 2 | $ | 10 | ||||
Charges | 10 | 36 | 46 | |||||||
Cash payments | (14 | ) | (16 | ) | (30 | ) | ||||
Balance as of November 1, 2013 | $ | 4 | $ | 22 | $ | 26 | ||||
Schedule of Supplementary Cash Flow Information | ' | |||||||||
Supplementary cash flow information, including non-cash investing and financing activities, for the periods presented was as follows: | ||||||||||
Nine Months Ended | ||||||||||
November 1, | October 31, | |||||||||
2013 | 2012 | |||||||||
(in millions) | ||||||||||
Vested stock issued as settlement of annual bonus accruals | $ | 2 | $ | 2 | ||||||
Stock issued in lieu of cash dividend | $ | 17 | $ | 2 | ||||||
Fair value of assets acquired in acquisitions (See Note 3 - Acquisitions) | $ | 259 | $ | 541 | ||||||
Less: cash paid in acquisitions, net of cash acquired of $9 million in fiscal 2013 | $ | (1 | ) | $ | (478 | ) | ||||
Forgiveness of accounts receivable to acquire equity interest in business combination | $ | (105 | ) | $ | — | |||||
Liabilities assumed in acquisitions, including accrued acquisition payments | $ | (148 | ) | $ | 63 | |||||
Accrued liability for acquisition of business | $ | (5 | ) | $ | — | |||||
Cash paid for interest (including discontinued operations) | $ | 37 | $ | 53 | ||||||
Cash paid for income taxes (including discontinued operations) | $ | 62 | $ | 126 | ||||||
Discontinued_Operations_Tables
Discontinued Operations (Tables) | 9 Months Ended | |||||||||||||||
Nov. 01, 2013 | ||||||||||||||||
SAIC | ' | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | |||||||||||||||
Schedule of Income Statement, Balance Sheet for Discontinued Operation | ' | |||||||||||||||
The operating results of New SAIC, which have been classified as discontinued operations, for the periods presented were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues | $ | 598 | $ | 1,195 | $ | 2,712 | $ | 3,558 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenues | 533 | 1,073 | 2,446 | 3,205 | ||||||||||||
Selling, general and administrative expenses | 22 | 14 | 42 | 52 | ||||||||||||
Separation transaction and restructuring expenses | 20 | 11 | 55 | 15 | ||||||||||||
Operating income | $ | 23 | $ | 97 | $ | 169 | $ | 286 | ||||||||
Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above. | ||||||||||||||||
The major classes of assets and liabilities included in discontinued operations through the Distribution Date related to the separation of New SAIC are presented in the table below: | ||||||||||||||||
January 31, | ||||||||||||||||
2013 | ||||||||||||||||
(in millions) | ||||||||||||||||
Cash and cash equivalents | $ | 1 | ||||||||||||||
Receivables, net | 717 | |||||||||||||||
Inventory, prepaid expenses and other current assets | 101 | |||||||||||||||
Total current assets | 819 | |||||||||||||||
Property, plant and equipment, net | 29 | |||||||||||||||
Intangible assets, net | 6 | |||||||||||||||
Goodwill | 491 | |||||||||||||||
Deferred income taxes | 2 | |||||||||||||||
Other assets | 1 | |||||||||||||||
Total assets | 1,348 | |||||||||||||||
Accounts payable and accrued liabilities | 461 | |||||||||||||||
Accrued payroll and employee benefits | 185 | |||||||||||||||
Notes payable and long-term debt | 1 | |||||||||||||||
Total current liabilities | 647 | |||||||||||||||
Non-current liabilities | — | |||||||||||||||
Total liabilities | $ | 647 | ||||||||||||||
Other Disposals | ' | |||||||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | |||||||||||||||
Schedule of Income Statement, Balance Sheet for Discontinued Operation | ' | |||||||||||||||
The pre-sale operating results and through the date of disposal of the Company’s discontinued operations discussed above for Other Fiscal Year 2014 Dispositions and Fiscal Year 2013 Dispositions, not including the separation of New SAIC, for the periods presented were as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues | $ | 1 | $ | 19 | $ | 3 | $ | 60 | ||||||||
Costs and expenses: | ||||||||||||||||
Cost of revenues | 6 | 18 | 9 | 54 | ||||||||||||
Selling, general and administrative expenses | (3 | ) | 4 | 5 | 13 | |||||||||||
Operating income | $ | (2 | ) | $ | (3 | ) | $ | (11 | ) | $ | (7 | ) | ||||
Income from discontinued operations also includes other activity that is immaterial and not reflected in the table above. | ||||||||||||||||
The major classes of assets and liabilities included in discontinued operations through the date of disposal, not including the separation of New SAIC, are immaterial for disclosure purposes. |
Acquisition_Tables
Acquisition (Tables) | 9 Months Ended | |||
Nov. 01, 2013 | ||||
Business Acquisition [Line Items] | ' | |||
Schedule of detail break-up of purchase price | ' | |||
The aggregate purchase consideration that the Company exchanged for PRE Holdings is as follows (in millions): | ||||
Forgiveness of accounts receivable (net of $33 million bad debt expense) | $ | 105 | ||
Contingent consideration | 6 | |||
Total preliminary purchase consideration | $ | 111 | ||
Plainfield | ' | |||
Business Acquisition [Line Items] | ' | |||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | ' | |||
The preliminary estimated fair values of the assets acquired and liabilities assumed at the date of acquisition were as follows (in millions): | ||||
Property, plant and equipment | $ | 248 | ||
Other assets | 8 | |||
Notes payable assumed (net of debt discount) | (148 | ) | ||
Total identifiable net assets acquired | 108 | |||
Intangible assets | 3 | |||
Total preliminary purchase consideration | $ | 111 | ||
maxIT | ' | |||
Business Acquisition [Line Items] | ' | |||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | ' | |||
The fair values of the assets acquired and liabilities assumed at the date of acquisition, including subsequent adjustments, were as follows (in millions): | ||||
Cash | $ | 9 | ||
Receivables | 50 | |||
Other assets | 24 | |||
Accounts payable, accrued liabilities and accrued payroll and employee benefits | (21 | ) | ||
Deferred tax liabilities, net | (24 | ) | ||
Total identifiable net assets acquired | 38 | |||
Goodwill | 395 | |||
Intangible assets | 72 | |||
Total purchase price | $ | 505 | ||
Earnings_Per_Share_EPS_Tables
Earnings Per Share (EPS) (Tables) | 9 Months Ended | |||||||||||||||
Nov. 01, 2013 | ||||||||||||||||
Reconciliation of Income used in Calculating Earnings Per Share | ' | |||||||||||||||
A reconciliation of the income used to compute basic and diluted EPS for the periods presented was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Basic EPS: | ||||||||||||||||
(Loss) income from continuing operations, as reported | $ | (9 | ) | $ | 55 | $ | 29 | $ | 165 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | — | (3 | ) | (3 | ) | ||||||||||
(Loss) income from continuing operations, for computing | $ | (9 | ) | $ | 55 | $ | 26 | $ | 162 | |||||||
basic EPS | ||||||||||||||||
Net income, as reported | $ | (3 | ) | $ | 112 | $ | 120 | $ | 339 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | (2 | ) | (3 | ) | (7 | ) | |||||||||
Net income, for computing basic EPS | $ | (3 | ) | $ | 110 | $ | 117 | $ | 332 | |||||||
Diluted EPS: | ||||||||||||||||
(Loss) income from continuing operations, as reported | (9 | ) | 55 | 29 | 165 | |||||||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | — | (3 | ) | (3 | ) | ||||||||||
(Loss) income from continuing operations, for computing | $ | (9 | ) | $ | 55 | $ | 26 | $ | 162 | |||||||
diluted EPS | ||||||||||||||||
Net income, as reported | $ | (3 | ) | $ | 112 | $ | 120 | $ | 339 | |||||||
Less: allocation of distributed and undistributed earnings to participating securities | — | (2 | ) | (3 | ) | (7 | ) | |||||||||
Net income, for computing diluted EPS | $ | (3 | ) | $ | 110 | $ | 117 | $ | 332 | |||||||
Reconciliation of Weighted Average Number of Shares Outstanding | ' | |||||||||||||||
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. The presentation gives effect to the one-for-four reverse stock split which occurred after market close on September 27, 2013. | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Basic weighted average number of shares outstanding | 84 | 83 | 84 | 83 | ||||||||||||
Dilutive common share equivalents—stock options and | — | — | — | — | ||||||||||||
other stock awards | ||||||||||||||||
Diluted weighted average number of shares outstanding | 84 | 83 | 84 | 83 | ||||||||||||
Schedule of Stock-Based Awards Excluded from Weighted Average Shares Outstanding | ' | |||||||||||||||
The following anti-dilutive stock-based awards were excluded from the weighted average number of shares outstanding used to compute basic and diluted EPS for the periods presented: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Stock options | 5 | 5 | 5 | 5 | ||||||||||||
Vesting stock awards | 4 | — | 4 | — | ||||||||||||
StockBased_Compensation_Tables
Stock-Based Compensation (Tables) | 9 Months Ended | |||||||||||||||
Nov. 01, 2013 | ||||||||||||||||
Schedule of Stock-Based Compensation Expenses | ' | |||||||||||||||
Total stock-based compensation expense for the periods presented was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Stock options | $ | 4 | $ | 1 | $ | 9 | $ | 5 | ||||||||
Vesting stock awards | 10 | 13 | 35 | 37 | ||||||||||||
Total stock-based compensation expense | $ | 14 | $ | 14 | $ | 44 | $ | 42 | ||||||||
Schedule of Weighted Average Grant-Date Fair Value and Assumptions Used | ' | |||||||||||||||
The fair value of the Company’s stock option awards is estimated on the date of grant using the Black-Scholes option-pricing model. The weighted average grant date fair value and assumptions used to determine the fair value of stock options granted for the periods presented were as follows: | ||||||||||||||||
Nine Months Ended | ||||||||||||||||
October 2013 Grants | 31-Oct-12 | |||||||||||||||
2013 Grants Before Spin | ||||||||||||||||
Weighted average grant-date fair value** | $ | 9.48 | $ | 6.96 | ** | $ | 6.75 | ** | ||||||||
Expected term (in years) | 5 | 5 | 5 | |||||||||||||
Expected volatility | 30 | % | 25 | % | 24.5 | % | ||||||||||
Risk-free interest rate | 1.4 | % | 0.8 | % | 1 | % | ||||||||||
Dividend yield | 2.8 | % | 3.8 | % | 3.7 | % | ||||||||||
**Adjusted for additional awards granted for the $4.00 Special Dividend | ||||||||||||||||
Schedule of Stock Option Activity | ' | |||||||||||||||
Stock option activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Shares of stock under stock options | Weighted average exercise price | Weighted average remaining contractual term | Aggregate intrinsic value | |||||||||||||
(in millions) | (in years) | (in millions) | ||||||||||||||
Outstanding at January 31, 2013 | 4.9 | $ | 67.24 | 3 | $ | — | ||||||||||
Options granted | 1.4 | 54.86 | ||||||||||||||
Special dividend adjustments | 0.4 | |||||||||||||||
Options forfeited or expired | (1.3 | ) | 71.8 | |||||||||||||
Separation Adjustment | (1.9 | ) | 57.85 | |||||||||||||
Outstanding at September 27, 2013 | 3.5 | 59.25 | 3.9 | 24 | ||||||||||||
Exercisable at September 27, 2013 | 1.5 | 64.17 | 2 | 4 | ||||||||||||
Shares of stock under stock options | Weighted average exercise price | Weighted average remaining contractual term | Aggregate intrinsic value | |||||||||||||
(in millions) | (in years) | (in millions) | ||||||||||||||
Outstanding at September 28, 2013 | 4.9 | ** | $ | 40.2 | ** | 3.9 | $ | 24 | ||||||||
Options granted | 0.1 | 46.19 | ||||||||||||||
Options forfeited or expired | (0.1 | ) | 42.84 | |||||||||||||
Outstanding at November 1, 2013 | 4.9 | 40.31 | 4 | 35 | ||||||||||||
Exercisable at November 1, 2013 | 2 | 44.3 | 2 | 6 | ||||||||||||
** Adjusted for Conversion Ratio of | ||||||||||||||||
Schedule of Vesting Stock Award Activity | ' | |||||||||||||||
Vesting stock award activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Shares of stock under stock awards | Weighted average grant- date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Unvested stock awards at January 31, 2013 | 3.1 | $ | 60.78 | |||||||||||||
Awards granted | 2.1 | 53.51 | ||||||||||||||
Awards forfeited | (0.4 | ) | 58.28 | |||||||||||||
Awards vested | (0.9 | ) | 64.76 | |||||||||||||
Separation Adjustment | (1.5 | ) | 57.04 | |||||||||||||
Unvested stock awards at September 27, 2013 | 2.4 | 59.98 | ||||||||||||||
Shares of stock under stock awards | Weighted average grant- date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Unvested stock awards at September 28, 2013 | 3.5 | ** | $ | 42.98 | ** | |||||||||||
Awards granted | 0.4 | * | 33.44 | * | ||||||||||||
Unvested stock awards at November 1, 2013 | 3.9 | 42.37 | ||||||||||||||
* Includes Modified Performance-Based Stock Awards | ||||||||||||||||
** Adjusted for Conversion Ratio of | ||||||||||||||||
Schedule of Performance-Based Stock Award Activity | ' | |||||||||||||||
Performance-based stock award activity for the nine months ended November 1, 2013 was as follows: | ||||||||||||||||
Expected number of shares of stock to be issued under performance-based stock awards | Weighted average grant-date fair value | |||||||||||||||
(in millions) | ||||||||||||||||
Outstanding at January 31, 2013 | 0.3 | $ | 52.96 | |||||||||||||
Awards canceled | (0.2 | ) | * | 53.23 | * | |||||||||||
Outstanding at November 1, 2013 | 0.1 | ** | 36.59 | ** | ||||||||||||
Goodwill_and_Intangible_Assets1
Goodwill and Intangible Assets (Tables) | 9 Months Ended | |||||||||||||||||||||||
Nov. 01, 2013 | ||||||||||||||||||||||||
Schedule of Changes in Goodwill by Segment | ' | |||||||||||||||||||||||
The changes in the carrying value of goodwill for Health and Engineering (HES) and National Security Solutions (NSS) were as follows: | ||||||||||||||||||||||||
HES | NSS | Total | ||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Goodwill at January 31, 2013 | $ | 985 | $ | 719 | $ | 1,704 | ||||||||||||||||||
Corporate reorganizations | (69 | ) | 69 | — | ||||||||||||||||||||
Goodwill at November 1, 2013 | $ | 916 | $ | 788 | $ | 1,704 | ||||||||||||||||||
Schedule of Intangible Assets Including Estimates of Assets Acquired | ' | |||||||||||||||||||||||
Intangible assets consisted of the following: | ||||||||||||||||||||||||
November 1, 2013 | January 31, 2013 | |||||||||||||||||||||||
Gross carrying value | Accumulated amortization | Net carrying value | Gross carrying value | Accumulated amortization | Net carrying value | |||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
Finite-lived intangible assets: | ||||||||||||||||||||||||
Customer relationships | $ | 116 | $ | (64 | ) | $ | 52 | $ | 154 | $ | (57 | ) | $ | 97 | ||||||||||
Software and technology | 66 | (35 | ) | 31 | 97 | (30 | ) | 67 | ||||||||||||||||
Other | 4 | (1 | ) | 3 | 1 | (1 | ) | — | ||||||||||||||||
Total finite-lived intangible assets | 186 | (100 | ) | 86 | 252 | (88 | ) | 164 | ||||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||||||
In-process research and development | 10 | — | 10 | 10 | — | 10 | ||||||||||||||||||
Trade names | 4 | — | 4 | 4 | — | 4 | ||||||||||||||||||
Total indefinite-lived intangible assets | 14 | — | 14 | 14 | — | 14 | ||||||||||||||||||
Total intangible assets | $ | 200 | $ | (100 | ) | $ | 100 | $ | 266 | $ | (88 | ) | $ | 178 | ||||||||||
Schedule of Amortization Expense for Finite-Lived Intangible Assets | ' | |||||||||||||||||||||||
The estimated annual amortization expense related to finite-lived intangible assets as of November 1, 2013 was as follows: | ||||||||||||||||||||||||
Fiscal Year Ending January 31 | ||||||||||||||||||||||||
(in millions) | ||||||||||||||||||||||||
2014 (remainder of the fiscal year) | $ | 6 | ||||||||||||||||||||||
2015 | 22 | |||||||||||||||||||||||
2016 | 20 | |||||||||||||||||||||||
2017 | 17 | |||||||||||||||||||||||
2018 | 11 | |||||||||||||||||||||||
2019 and thereafter | 10 | |||||||||||||||||||||||
$ | 86 | |||||||||||||||||||||||
Financial_Instruments_Tables
Financial Instruments (Tables) | 9 Months Ended | |||||||||||||
Nov. 01, 2013 | ||||||||||||||
Schedule of Notes Payable and Long-Term Debt | ' | |||||||||||||
The Company’s notes payable and long-term debt consisted of the following: | ||||||||||||||
Stated interest rate | Effective interest rate | 1-Nov-13 | 31-Jan-13 | |||||||||||
(dollars in millions) | ||||||||||||||
Leidos Holdings, Inc. senior unsecured notes: | ||||||||||||||
$450 million notes, which mature in December 2020 | 4.45 | % | 4.53 | % | $ | 449 | $ | 449 | ||||||
$300 million notes, which mature in December 2040 | 5.95 | % | 6.03 | % | 300 | 300 | ||||||||
Leidos, Inc. senior unsecured notes: | ||||||||||||||
$250 million notes, which mature in July 2032 | 7.13 | % | 7.43 | % | 248 | 248 | ||||||||
$300 million notes, which mature in July 2033 | 5.5 | % | 5.78 | % | 296 | 296 | ||||||||
Plainfield construction note, which matures February 2014 | 17.5 | % | 17.5 | % | 81 | — | ||||||||
Plainfield cash grant note, which matures April 2014 | 17.5 | % | 17.5 | % | 68 | — | ||||||||
Capital leases and other notes payable due on various dates through fiscal 2021 | 0%-3.7% | Various | 39 | 2 | ||||||||||
Total notes payable and long-term debt | 1,481 | 1,295 | ||||||||||||
Less current portion | 151 | — | ||||||||||||
Total notes payable and long-term debt, net of current portion | $ | 1,330 | $ | 1,295 | ||||||||||
Fair value of notes payable and long-term debt | $ | 1,469 | $ | 1,390 | ||||||||||
Accumulated_Other_Comprehensiv1
Accumulated Other Comprehensive Loss (Tables) | 9 Months Ended | |||||||
Nov. 01, 2013 | ||||||||
Schedule of Accumulated Other Comprehensive Loss | ' | |||||||
The components of accumulated other comprehensive loss was as follows: | ||||||||
November 1, 2013 | 31-Jan-13 | |||||||
(in millions) | ||||||||
Foreign currency translation adjustments, net of taxes of $(1) million as of November 1, 2013 and January 31, 2013 | $ | 2 | $ | 2 | ||||
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of November 1, 2013 and January 31, 2013 | (5 | ) | (5 | ) | ||||
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of November 1, 2013 and January 31, 2013 | 1 | 1 | ||||||
Total accumulated other comprehensive loss, net of taxes of $2 million as of November 1, 2013 and January 31, 2013 | $ | (2 | ) | $ | (2 | ) |
Business_Segment_Information_T
Business Segment Information (Tables) | 9 Months Ended | |||||||||||||||
Nov. 01, 2013 | ||||||||||||||||
Segment Reporting [Abstract] | ' | |||||||||||||||
Schedule of Segment Reporting Information by Segment | ' | |||||||||||||||
The segment information for the periods presented, with the prior year period recast to give effect to the above changes in reportable segments, was as follows: | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
November 1, | October 31, | November 1, | October 31, | |||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||
(in millions) | ||||||||||||||||
Revenues: | ||||||||||||||||
Health and Engineering | $ | 408 | $ | 508 | $ | 1,380 | $ | 1,341 | ||||||||
National Security Solutions | 1,014 | 1,166 | 3,117 | 3,563 | ||||||||||||
Corporate and Other | (1 | ) | — | (8 | ) | (1 | ) | |||||||||
Intersegment elimination | (1 | ) | (1 | ) | (3 | ) | (4 | ) | ||||||||
Total revenues | $ | 1,420 | $ | 1,673 | $ | 4,486 | $ | 4,899 | ||||||||
Operating income (loss): | ||||||||||||||||
Health and Engineering | $ | (30 | ) | $ | 46 | $ | 2 | $ | 107 | |||||||
National Security Solutions | 63 | 79 | 195 | 260 | ||||||||||||
Corporate and Other | (40 | ) | (25 | ) | (128 | ) | (53 | ) | ||||||||
Total operating income | $ | (7 | ) | $ | 100 | $ | 69 | $ | 314 | |||||||
Summary_of_Significant_Account3
Summary of Significant Accounting Policies (Additional Information) (Detail) (USD $) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | 3 Months Ended | |||||||||||
In Millions, except Per Share data, unless otherwise specified | Jul. 26, 2013 | Jun. 28, 2013 | Mar. 31, 2013 | Aug. 31, 2012 | Nov. 01, 2013 | 3-May-13 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | Oct. 11, 2013 | Nov. 01, 2013 |
Building | Building | Building | Customer | Minimum | Leidos, Inc. | Leidos, Inc. | Leidos, Inc. | Leidos, Inc. | SAIC | SAIC | SAIC | SAIC | Plainfield | One Customer | ||||||
acre | ||||||||||||||||||||
Significant Accounting Policies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Restructuring Charges | ' | ' | ' | ' | ' | ' | ' | $46 | ' | ' | ' | ' | ' | ' | $20 | $11 | $55 | $15 | ' | ' |
Proceeds from Sale and Collection of Receivables | ' | ' | ' | ' | 25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Bad debt expense | ' | ' | ' | ' | 43 | ' | 0 | 45 | 0 | ' | 43 | 0 | 45 | 0 | ' | ' | ' | ' | ' | 42 |
Forgiveness of accounts receivable to acquire equity interest in business combination | ' | ' | ' | ' | ' | ' | ' | -105 | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | -105 | ' |
Ownership interest | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100.00% | ' | 100.00% | ' | ' | ' | ' | ' | ' | ' |
Number of companies separated | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period for billing and collection of unbilled receivables, maximum (in years) | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of collection for contract retentions, minimum (in years) | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Outstanding receivables | ' | ' | ' | ' | 30 | ' | ' | 30 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of extension for deferred payment terms (in years) | ' | ' | ' | ' | ' | ' | ' | ' | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of commercial customers within extended deferred payments terms | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (decrease) in income due to contract estimates | ' | ' | ' | ' | 1 | ' | -3 | 29 | -2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (decrease) in income due to contract estimates per diluted share | ' | ' | ' | ' | $0.01 | ' | $0.03 | $0.22 | $0.01 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend declared | ' | ' | $4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividend paid | ' | 342 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends payable, date to be paid | ' | ' | 28-Jun-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Dividends payable, date of record | ' | ' | 14-Jun-13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of purchase and sale agreement | ' | ' | ' | ' | ' | '6 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Area of land | ' | ' | ' | ' | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of office building | ' | ' | ' | ' | ' | 4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Proceeds from sale of assets | 83 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of buildings under lease back agreement | 3 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales-leaseback transaction with proceeds from sale of assets | 40 | ' | ' | ' | ' | ' | ' | 38 | 0 | ' | ' | ' | 38 | 0 | ' | ' | ' | ' | ' | ' |
Sales-leaseback transaction, book value | 42 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales-leaseback transaction, deferred loss | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Length of extension period, years | '6 months | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Finance lease proceeds recoreded as a note payable | 38 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable period, in years | 'P7Y | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable interest rate | 3.70% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred rental income | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Lease long term liability | $4 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Stock issued to Leidos shareholder upon divestiture of SAIC, ratio | ' | ' | ' | ' | 0.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1.452 | ' | 1.452 | ' | ' | ' |
Separation_Transaction_Expense
(Separation Transaction Expenses) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 |
Spin Off Transaction [Line Items] | ' | ' | ' | ' |
Strategic advisory services | $5 | ' | $7 | ' |
Legal and accounting services | 1 | ' | 1 | ' |
Lease termination and facility consolidation expenses | 17 | ' | 40 | ' |
Severance costs | 2 | ' | 10 | ' |
Separation transaction expenses in operating income | 25 | 0 | 58 | 0 |
Less: income tax benefit | -10 | ' | -23 | ' |
Separation transaction expenses, net of tax | $15 | ' | $35 | ' |
Summary_of_Significant_Account4
Summary of Significant Accounting Policies (Restructuring Reserve) (Details) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Nov. 01, 2013 |
Restructuring Reserve [Roll Forward] | ' |
Beginng balance | $10 |
Charges | 46 |
Cash payments | -30 |
Ending balance | 26 |
Employee Severance [Member] | ' |
Restructuring Reserve [Roll Forward] | ' |
Beginng balance | 8 |
Charges | 10 |
Cash payments | -14 |
Ending balance | 4 |
Facility Closing [Member] | ' |
Restructuring Reserve [Roll Forward] | ' |
Beginng balance | 2 |
Charges | 36 |
Cash payments | -16 |
Ending balance | $22 |
Summary_of_Significant_Account5
Summary of Significant Accounting Policies (Schedule of Supplementary Cash Flow Information) (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 |
Accounting Policies [Abstract] | ' | ' |
Vested stock issued as settlement of annual bonus accruals | $2 | $2 |
Stock issued in lieu of cash dividend | 17 | 2 |
Fair value of assets acquired in acquisitions (See Note 3 - Acquisitions) | 259 | 541 |
Less: cash paid in acquisitions, net of cash acquired of $9 million in fiscal 2013 | -1 | -478 |
Forgiveness of accounts receivable to acquire equity interest in business combination | -105 | 0 |
Liabilities assumed in acquisitions, including accrued acquisition payments | -148 | 63 |
Accrued liability for acquisition of business | -5 | 0 |
Cash paid for interest (including discontinued operations) | 37 | 53 |
Cash paid for income taxes (including discontinued operations) | $62 | $126 |
Discontinued_Operations_Detail
Discontinued Operations (Details) (USD $) | 3 Months Ended | 9 Months Ended | |||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | Jan. 31, 2013 |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ' | ' | ' | ' | ' |
Restructuring Charges | ' | ' | $46 | ' | ' |
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | ' | ' | ' | ' | ' |
Total current assets | 13 | ' | 13 | ' | 1,371 |
Notes payable and long-term debt | 0 | ' | 0 | ' | 648 |
Other Disposals | ' | ' | ' | ' | ' |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ' | ' | ' | ' | ' |
Revenues | 1 | 19 | 3 | 60 | ' |
Cost of revenues | 6 | 18 | 9 | 54 | ' |
Selling, general and administrative expenses | -3 | 4 | 5 | 13 | ' |
Operating income | -2 | -3 | -11 | -7 | ' |
SAIC | ' | ' | ' | ' | ' |
Disposal Group, Including Discontinued Operation, Income Statement Disclosures [Abstract] | ' | ' | ' | ' | ' |
Revenues | 598 | 1,195 | 2,712 | 3,558 | ' |
Cost of revenues | 533 | 1,073 | 2,446 | 3,205 | ' |
Selling, general and administrative expenses | 22 | 14 | 42 | 52 | ' |
Restructuring Charges | 20 | 11 | 55 | 15 | ' |
Operating income | 23 | 97 | 169 | 286 | ' |
Disposal Group, Including Discontinued Operation, Balance Sheet Disclosures [Abstract] | ' | ' | ' | ' | ' |
Cash and cash equivalents | ' | ' | ' | ' | 1 |
Receivables, net | ' | ' | ' | ' | 717 |
Inventory, prepaid expenses and other current assets | ' | ' | ' | ' | 101 |
Total current assets | ' | ' | ' | ' | 819 |
Property, plant and equipment, net | ' | ' | ' | ' | 29 |
Intangible assets, net | ' | ' | ' | ' | 6 |
Goodwill | ' | ' | ' | ' | 491 |
Deferred income taxes | ' | ' | ' | ' | 2 |
Other assets | ' | ' | ' | ' | 1 |
Assets | ' | ' | ' | ' | 1,348 |
Accounts payable and accrued liabilities | ' | ' | ' | ' | 461 |
Accrued payroll and employee benefits | ' | ' | ' | ' | 185 |
Disposal Group, Including Discontinued Operation, Note Payable and Long-term Debt | ' | ' | ' | ' | 1 |
Notes payable and long-term debt | ' | ' | ' | ' | 647 |
Total current liabilities | ' | ' | ' | ' | 0 |
Liabilities | ' | ' | ' | ' | $647 |
Discontinued_Operations_Narrat
Discontinued Operations (Narrative) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 9 Months Ended | 0 Months Ended | ||
In Millions, unless otherwise specified | Sep. 27, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Oct. 31, 2012 | Jun. 30, 2013 | Nov. 01, 2013 | Sep. 26, 2013 |
Other Disposals | Leidos, Inc. | ||||||
SAIC | |||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Distribution of debt to New SAIC | $500 | ' | ($500) | $0 | ' | ' | ' |
Unsecured borrowing capacity | ' | 750 | 750 | ' | 500 | ' | ' |
Amount outstanding | 500 | ' | ' | ' | ' | ' | ' |
Reimbursement received from SAIC for financing costs | ' | ' | ' | ' | ' | ' | 5 |
Contribution paid to New SAIC | ' | ' | ' | ' | ' | ' | 26 |
Net proceeds from divestures | ' | 295 | 295 | 0 | ' | 51 | ' |
Gain on sale of discontinued operation, before tax | ' | ' | ' | ' | ' | $17 | ' |
Acquisition_Purchase_Price_All
Acquisition (Purchase Price Allocation) (Details) (USD $) | Nov. 01, 2013 | Jan. 31, 2013 | Oct. 11, 2013 | Aug. 31, 2012 |
In Millions, unless otherwise specified | Plainfield | maxIT | ||
Business Acquisition [Line Items] | ' | ' | ' | ' |
Cash | ' | ' | ' | $9 |
Property, plant and equipment | ' | ' | 248 | 50 |
Other assets | ' | ' | 8 | 24 |
Accounts payable, accrued liabilities and accrued payroll and employee benefits | ' | ' | ' | -21 |
Notes payable assumed (net of debt discount) | ' | ' | -148 | -24 |
Total identifiable net assets acquired | ' | ' | 108 | 38 |
Goodwill | 1,704 | 1,704 | ' | 395 |
Intangible assets | ' | ' | 3 | 72 |
Purchase Price | ' | ' | $111 | $505 |
Acquisition_Narrative_Details
Acquisition (Narrative) (Details) (USD $) | Oct. 11, 2013 | Aug. 31, 2012 | Oct. 11, 2013 | Oct. 11, 2013 | Nov. 01, 2013 | Oct. 31, 2013 | Oct. 11, 2013 | Nov. 01, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 |
In Millions, unless otherwise specified | Plainfield | maxIT | Minimum | Maximum | Secured Debt [Member] | Receivable from PRE Holdings | Connecticut Light and Power | Carlyle Group | Achievement of milestones | January 2014 or the completion of the collateral transfer | October 2013 or the successful sale by the Company of project. | Plainfield |
MW | Plainfield | Plainfield | Plainfield | Plainfield | Plainfield | Secured Debt [Member] | Plainfield | Plainfield | Plainfield | |||
note | Plainfield | |||||||||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of ownership | 100.00% | 100.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Capacity of the power plant | 37.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Percentage of power to be purchased | ' | ' | ' | ' | ' | ' | 80.00% | ' | ' | ' | ' | ' |
Term of agreement | ' | ' | ' | ' | ' | ' | '15 years | ' | ' | ' | ' | ' |
Fuel supply agreement, term | ' | ' | '5 years | '15 years | ' | ' | ' | ' | ' | ' | ' | ' |
Receivable from Plainfield | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $138 |
Number of debt instruments | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' |
Notes, face amount | ' | ' | ' | ' | ' | ' | ' | 148 | ' | ' | ' | ' |
Eligibility for grant, amount | 70 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Gains (losses) on extinguishment of debt | ' | ' | ' | ' | ' | 33 | ' | ' | ' | ' | ' | ' |
Contingent consideration | 6 | ' | ' | ' | ' | ' | ' | ' | 5 | 2 | 3 | ' |
Cash paid for purchase price | 111 | 505 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business Combination, Consideration Transferred, Liabilities Incurred | ' | $13 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Acquisition_Aggregate_of_Purch
Acquisition (Aggregate of Purchase Price) (Details) (USD $) | 9 Months Ended | 0 Months Ended | 1 Months Ended | ||||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Oct. 11, 2013 | Oct. 31, 2013 | Oct. 11, 2013 | Oct. 11, 2013 | Oct. 11, 2013 |
Plainfield | Receivable from PRE Holdings | Achievement of milestones | January 2014 or the completion of the collateral transfer | October 2013 or the successful sale by the Company of project. | |||
Plainfield | Plainfield | Plainfield | Plainfield | ||||
Business Acquisition [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Eligibility for grant, amount | ' | ' | $70 | ' | ' | ' | ' |
Gains (losses) on extinguishment of debt | ' | ' | ' | 33 | ' | ' | ' |
Forgiveness of accounts receivable (net of $33 million bad debt expense) | 105 | 0 | 105 | ' | ' | ' | ' |
Contingent consideration | ' | ' | 6 | ' | 5 | 2 | 3 |
Total preliminary purchase consideration | ' | ' | $111 | ' | ' | ' | ' |
Earnings_Per_Share_Reconciliat
Earnings Per Share (Reconciliation of Income used in Calculating Earnings per Share) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 |
Basic EPS: | ' | ' | ' | ' |
(Loss) income from continuing operations, as reported | ($9) | $55 | $29 | $165 |
Less: allocation of distributed and undistributed earnings to participating securities | 0 | 0 | -3 | -3 |
(Loss) income from continuing operations, for computing basic EPS | -9 | 55 | 26 | 162 |
Net income, as reported | -3 | 112 | 120 | 339 |
Less: allocation of distributed and undistributed earnings to participating securities | 0 | -2 | -3 | -7 |
Net income, for computing basic EPS | -3 | 110 | 117 | 332 |
Diluted EPS: | ' | ' | ' | ' |
(Loss) income from continuing operations, as reported | -9 | 55 | 29 | 165 |
Less: allocation of distributed and undistributed earnings to participating securities | 0 | 0 | -3 | -3 |
(Loss) income from continuing operations, for computing diluted EPS | -9 | 55 | 26 | 162 |
Net income, as reported | -3 | 112 | 120 | 339 |
Less: allocation of distributed and undistributed earnings to participating securities | 0 | -2 | -3 | -7 |
Net income, for computing diluted EPS | ($3) | $110 | $117 | $332 |
Reconciliation_of_Weighted_Ave
Reconciliation of Weighted Average Number of Shares Outstanding (Detail) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 |
Earnings Per Share [Abstract] | ' | ' | ' | ' |
Basic weighted average number of shares outstanding | 84 | 83 | 84 | 83 |
Dilutive common share equivalents-stock options and other stock awards | 0 | 0 | 0 | 0 |
Diluted weighted average number of shares outstanding | 84 | 83 | 84 | 83 |
Schedule_of_StockBased_Awards_
Schedule of Stock-Based Awards Excluded from Weighted Average Shares Outstanding (Detail) | 3 Months Ended | 9 Months Ended | ||
Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | |
Stock Options | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive stock based awards | 5 | 5 | 5 | 5 |
Vesting Stock Awards | ' | ' | ' | ' |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ' | ' | ' | ' |
Antidilutive stock based awards | 4 | 0 | 4 | 0 |
Schedule_of_StockBased_Compens
Schedule of Stock-Based Compensation and Related Tax Benefits Recognized (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense recorded in continuing operations | $14 | $14 | $44 | $42 |
Stock Options | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense recorded in continuing operations | 4 | 1 | 9 | 5 |
Vesting Stock Awards | ' | ' | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' |
Total stock-based compensation expense recorded in continuing operations | $10 | $13 | $35 | $37 |
StockBased_Compensation_Additi
Stock-Based Compensation - Additional Information (Detail) (USD $) | 1 Months Ended | 8 Months Ended | 9 Months Ended | 9 Months Ended | |||||||||
In Millions, except Per Share data, unless otherwise specified | Nov. 01, 2013 | Jun. 12, 2013 | Sep. 27, 2013 | Nov. 01, 2013 | Oct. 31, 2012 | Jun. 11, 2013 | Jun. 12, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 |
Closing Price | Opening Price | Vesting Stock Awards | Vesting Stock Awards | Stock Options | Stock Options | Outside Directors | Outside Directors | ||||||
Required Service Conditions and Performance Conditions | |||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Expected term | '5 years | ' | '5 years | ' | '5 years | ' | ' | ' | ' | '7 years | '7 years | ' | ' |
Vesting period | ' | ' | ' | '3 years | ' | ' | ' | '4 years | '7 years | '4 years | '4 years | '1 year | '1 year |
Incremental share factor | ' | 1.0713 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Share price | ' | ' | ' | ' | ' | $59.48 | $55.52 | ' | ' | ' | ' | ' | ' |
Decrease in share factor | ' | 0.9334 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of vesting awards that vested | ' | ' | ' | $57 | $64 | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum percentage that will ultimately be awarded | ' | ' | ' | 150.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' |
StockBased_Compensation_Schedu
Stock-Based Compensation (Schedule of Stock Option Activity) (Detail) (USD $) | 8 Months Ended | 12 Months Ended | 1 Months Ended | 8 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Sep. 27, 2013 | Jan. 31, 2013 | Sep. 27, 2013 | Nov. 01, 2013 | Sep. 27, 2013 | ||
SAIC Separation Adjustment | Stock Split | Stock Split | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ||
Stock conversion upon divestiture | ' | ' | 1.4523 | ' | ' | ||
Stock-Based Compensation [Abstract] | ' | ' | ' | ' | ' | ||
Shares of stock under stock options, Outstanding, beginning balance | 4.9 | ' | ' | 4.9 | [1] | ' | |
Shares of stock under stock options, Options granted | 1.4 | ' | ' | 0.1 | ' | ||
Shares of stock under stock options, Special dividend adjustments | 0.4 | ' | ' | ' | ' | ||
Shares of stock under stock options, Options forfeited or expired | -1.3 | ' | ' | -0.1 | ' | ||
Shares of stock under stock options, Separation Adjustment | -1.9 | ' | ' | ' | ' | ||
Shares of stock under stock options, Outstanding, ending balance | 3.5 | 4.9 | ' | 4.9 | 4.9 | [1] | |
Shares of stock under stock options, Outstanding, Exercisable | 1.5 | ' | ' | 2 | ' | ||
Weighted average exercise price, Outstanding, beginning balance | $67.24 | ' | ' | $40.20 | [1] | ' | |
Weighted average exercise price, Options granted | $54.86 | ' | ' | $46.19 | ' | ||
Weighted average exercise price, Options forfeited or expired | $71.80 | ' | ' | $42.84 | ' | ||
Weighted average exercise price, Separation Adjustment | $57.85 | ' | ' | ' | ' | ||
Weighted average exercise price, Outstanding, ending balance | $59.25 | $67.24 | ' | $40.31 | $40.20 | [1] | |
Weighted average exercise price, Exercisable at end of the period | $64.17 | ' | ' | $44.30 | ' | ||
Weighted average remaining contractual term, Outstanding | '3 years 10 months 24 days | '3 years | ' | '4 years | '3 years 10 months 24 days | ||
Weighted average remaining contractual term, Exercisable end of the period | '2 years | ' | ' | '2 years | ' | ||
Aggregate intrinsic value, Outstanding, beginning balance | $0 | ' | ' | $24 | ' | ||
Aggregate intrinsic value, Outstanding, ending balance | 24 | 0 | ' | 35 | 24 | ||
Aggregate intrinsic value, Exercisable end of the period | $4 | ' | ' | $6 | ' | ||
[1] | Adjusted for Conversion Ratio of |
StockBased_Compensation_Schedu1
Stock-Based Compensation (Schedule of Vesting Stock Award Activity) (Detail) (USD $) | 8 Months Ended | 1 Months Ended | ||
In Millions, except Per Share data, unless otherwise specified | Sep. 27, 2013 | Sep. 27, 2013 | Nov. 01, 2013 | |
SAIC Separation Adjustment | Stock Split | |||
Vesting Stock Awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | |
Stock conversion upon divestiture | ' | 1.4523 | ' | |
Shares, beginning balance | 3.1 | ' | 3.5 | [1] |
Shares of stock under stock awards, Awards granted | 2.1 | ' | 0.4 | |
Shares of stock under stock awards, Awards forfeited | -0.4 | ' | ' | |
Shares of stock under stock awards, Awards vested | -0.9 | ' | ' | |
Shares of stock under stock awards, Separation Adjustment | -1.5 | ' | ' | |
Shares, ending balance | 2.4 | ' | 3.9 | |
Weighted average grant-date fair value, Shares, beginning balance | $60.78 | ' | $42.98 | [1] |
Weighted average grant-date fair value, Awards granted | $53.51 | ' | $33.44 | |
Weighted average grant-date fair value, Awards forfeited | $58.28 | ' | ' | |
Weighted average grant-date fair value, Awards vested | $64.76 | ' | ' | |
Weighted average grant-date fair value, Separation Adjustment | $57.04 | ' | ' | |
Weighted average grant-date fair value, Shares, ending balance | $59.98 | ' | $42.37 | |
[1] | Adjusted for Conversion Ratio of |
Schedule_of_PerformanceBased_S
(Schedule of Performance-Based Stock Award Activity) (Detail) (USD $) | 8 Months Ended | 9 Months Ended | |
In Millions, except Per Share data, unless otherwise specified | Sep. 27, 2013 | Nov. 01, 2013 | |
Performance-Based Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | |
Shares, beginning balance | 3.1 | 0.3 | |
Expected number of shares of stock to be issued under performance-based stock awards, Awards vested | -0.9 | ' | |
Expected number of shares of stock to be issued under performance-based stock awards, Awards forfeited | -0.4 | -0.2 | [1] |
Shares, ending balance | 2.4 | 0.1 | [2] |
Weighted average grant-date fair value, Shares, beginning balance | $60.78 | $52.96 | |
Weighted average grant-date fair value, Awards forfeited | ' | $53.23 | |
Weighted average grant-date fair value, Shares, ending balance | $59.98 | $36.59 | [2] |
[1] | Adjusted for Conversion Ratio of 1.4523 | ||
[2] | Includes Modified Performance-Based Stock Awards |
StockBased_Compensation_Schedu2
Stock-Based Compensation (Schedule of Weighted Average Grant-Date Fair Value and Assumptions Used) (Detail) (USD $) | 1 Months Ended | 8 Months Ended | 9 Months Ended | ||
Nov. 01, 2013 | Sep. 27, 2013 | Oct. 31, 2012 | |||
Stock-Based Compensation [Abstract] | ' | ' | ' | ||
Weighted average grant-date fair value | $9.48 | $6.96 | [1] | $6.75 | [1] |
Expected term (in years) | '5 years | '5 years | '5 years | ||
Expected volatility | 30.00% | 25.00% | 24.50% | ||
Risk-free interest rate | 1.40% | 0.80% | 1.00% | ||
Dividend yield | 2.80% | 3.80% | 3.70% | ||
Special cash dividends per share | $4 | $4 | ' | ||
[1] | Adjusted for additional awards granted for the $4.00 Special Dividend |
StockBased_Compensation_New_SA
Stock-Based Compensation (New SAIC Adjustment) (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | 1 Months Ended | |||
In Millions, except Per Share data, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | Sep. 27, 2013 | Nov. 01, 2013 | Nov. 01, 2013 |
SAIC Separation Adjustment | SAIC Separation Adjustment | Performance-Based Stock Awards | |||||
SAIC Separation Adjustment | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Reverse stock split | ' | ' | ' | ' | 1.4523 | ' | ' |
Stock issued to Leidos shareholder upon divestiture of SAIC, ratio | 0.25 | ' | ' | ' | 0.25 | ' | ' |
Increase in stock based compensation related to modification for awards fully vested | ' | ' | ' | ' | ' | $3 | ' |
Increase in stock based compensation related to incremental fair value to be recorded in future years for the unvested options | ' | ' | ' | ' | ' | 3 | ' |
Addiitonal share-based compensation recorded due to SAIC separation | 14 | 14 | 44 | 42 | ' | 6 | ' |
Modification in weighted average fair value | ' | ' | ' | ' | ' | $1.02 | ' |
Increase in stock based compensation related to incremental fair value to be recorded in future years for the unvested options., performnace shares | ' | ' | ' | ' | ' | ' | $1 |
Goodwill_and_Intangible_Assets2
Goodwill and Intangible Assets (Additional Information) (Detail) (USD $) | 3 Months Ended | 9 Months Ended | 3 Months Ended | ||||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | Jan. 31, 2013 | Aug. 02, 2013 | Nov. 01, 2013 |
Reveal Imaging Technologies, Inc. | Vitalize and maxIT | ||||||
Health and Engineering | Health and Engineering | ||||||
Goodwill and Intangible Assets [Line Items] | ' | ' | ' | ' | ' | ' | ' |
Goodwill | $1,704 | ' | $1,704 | ' | $1,704 | ' | ' |
Goodwill impairment | ' | ' | 0 | 0 | ' | ' | ' |
Amortization expense related to amortizable intangible assets | 8 | 12 | 31 | 30 | ' | ' | ' |
Impairment loss for intangible assets | $19 | $0 | $51 | $0 | ' | $30 | $19 |
Goodwill_and_Intangible_Assets3
Goodwill and Intangible Assets (Schedule of Carrying Value of Goodwill by Segment) (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Nov. 01, 2013 |
Goodwill [Line Items] | ' |
Beginning balance, Goodwill | $1,704 |
Corporate reorganizations | 0 |
Ending balance, Goodwill | 1,704 |
Health and Engineering | ' |
Goodwill [Line Items] | ' |
Beginning balance, Goodwill | 985 |
Corporate reorganizations | 69 |
Ending balance, Goodwill | 916 |
National Security Solutions | ' |
Goodwill [Line Items] | ' |
Beginning balance, Goodwill | 719 |
Corporate reorganizations | -69 |
Ending balance, Goodwill | $788 |
Goodwill_and_Intangible_Assets4
Goodwill and Intangible Assets (Schedule of Intangible Assets Including Estimates of Assets Acquired) (Detail) (USD $) | Nov. 01, 2013 | Jan. 31, 2013 |
In Millions, unless otherwise specified | ||
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross carrying value | $186 | $252 |
Total intangible assets, Gross carrying value | 200 | 266 |
Accumulated amortization | -100 | -88 |
Net carrying value | 86 | 164 |
Total intangible assets, Net carrying value | 100 | 178 |
Indefinite-lived intangible assets | 14 | 14 |
In-Process Research And Development | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Indefinite-lived intangible assets | 10 | 10 |
Trade Names | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Indefinite-lived intangible assets | 4 | 4 |
Customer Relationships | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross carrying value | 116 | 154 |
Accumulated amortization | -64 | -57 |
Net carrying value | 52 | 97 |
Software and Technology | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross carrying value | 66 | 97 |
Accumulated amortization | -35 | -30 |
Net carrying value | 31 | 67 |
Other | ' | ' |
Finite-Lived Intangible Assets [Line Items] | ' | ' |
Gross carrying value | 4 | 1 |
Accumulated amortization | -1 | -1 |
Net carrying value | $3 | $0 |
Goodwill_and_Intangible_Assets5
Goodwill and Intangible Assets (Schedule of Amortization Expense for Finite-Lived Intangible Assets) (Detail) (USD $) | Nov. 01, 2013 | Jan. 31, 2013 |
In Millions, unless otherwise specified | ||
Goodwill And Intangible Assets [Abstract] | ' | ' |
2014 (remainder of the fiscal year) | $6 | ' |
2015 | 22 | ' |
2016 | 20 | ' |
2017 | 17 | ' |
2018 | 11 | ' |
2019 and thereafter | 10 | ' |
Net carrying value | $86 | $164 |
Financial_Instruments_Addition
Financial Instruments (Additional Information) (Detail) (USD $) | 0 Months Ended | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||||||||||||
In Millions, unless otherwise specified | Sep. 27, 2013 | 3-May-13 | Nov. 01, 2013 | Oct. 31, 2012 | Jun. 30, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Jan. 31, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Oct. 31, 2013 | Nov. 01, 2013 | Oct. 31, 2013 | Dec. 06, 2013 | Dec. 06, 2013 |
Construction Note | Cash Grant Note | Revolving Credit Facility | Revolving Credit Facility | Carlyle Group | Carlyle Group | Carlyle Group | Carlyle Group | Carlyle Group | Subsequent Event | Notes Payable | ||||||
Notes Payable | Construction Note | Construction Note | Cash Grant Note | Cash Grant Note | Carlyle Group | Subsequent Event | ||||||||||
note | Notes Payable | Carlyle Group | ||||||||||||||
Financial Instruments [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unsecured borrowing capacity | ' | ' | $750 | ' | $500 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extended maturity period of revolving credit facility (in years) | ' | '1 year | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Extended maturity date of revolving credit facility | ' | 1-Mar-17 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Borrowings outstanding under the revolving credit facility | 500 | ' | ' | ' | ' | ' | ' | 0 | 0 | ' | ' | ' | ' | ' | ' | ' |
Revolving credit facility financial covenants description | ' | 'For a period of four trailing fiscal quarters, the Company maintains a ratio of consolidated funded debt, including borrowings under this facility, to EBITDA adjusted for other items as defined in the credit facility of not more than 3.25 to 1.0 and a ratio of EBITDA adjusted for other items as defined in the credit facility to interest expense of greater than 3.5 to 1.0. | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of consolidated funded debt to EBITDA, numerator, maximum | ' | ' | 3.25 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Ratio of consolidated funded debt to EBITDA, denominator, maximum | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum ratio of EBITDA to interest expense, numerator | ' | ' | 3.5 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Minimum ratio of EBITDA to interest expense, denominator | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of debt instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' |
Secured notes, face amount | ' | ' | ' | ' | ' | ' | ' | ' | ' | 149 | 81 | ' | 68 | ' | ' | ' |
Stated interest rate | ' | ' | ' | ' | ' | 17.50% | 17.50% | ' | ' | ' | ' | 17.50% | ' | 17.50% | ' | ' |
Stated interest rate, paid in cash | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8.00% | ' | 6.00% | ' | ' |
Discount on early termination fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' |
Face value of debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 149 | ' |
Interest paid on debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 10 | ' |
Early termination fees | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6 | ' |
Agreement to repay debt to Carlyle Group | $500 | ' | ($500) | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $165 |
Financial_Instruments_Schedule
Financial Instruments (Schedule of Notes Payable and Long-Term Debt) (Detail) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Nov. 01, 2013 | Jan. 31, 2013 |
Debt Instrument [Line Items] | ' | ' |
Total notes payable and long-term debt | $1,481 | $1,295 |
Less current portion | 151 | 0 |
Total notes payable and long-term debt, net of current portion | 1,330 | 1,295 |
Fair value of notes payable and long-term debt | 1,469 | 1,390 |
Notes Which Mature In December 2020 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior unsecured notes | 449 | 449 |
Stated interest rate | 4.45% | ' |
Effective interest rate | 4.53% | ' |
Notes Which Mature In December 2040 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior unsecured notes | 300 | 300 |
Stated interest rate | 5.95% | ' |
Effective interest rate | 6.03% | ' |
Notes Which Mature In July 2032 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior unsecured notes | 248 | 248 |
Stated interest rate | 7.13% | ' |
Effective interest rate | 7.43% | ' |
Notes Which Mature In July 2033 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Senior unsecured notes | 296 | 296 |
Stated interest rate | 5.50% | ' |
Effective interest rate | 5.78% | ' |
Construction Note Which Matures Feburary 2014 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Notes payable | 81 | ' |
Stated interest rate | 17.50% | ' |
Effective interest rate | 17.50% | ' |
Plainfield Cash Grant Note Which Matures April 2014 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Notes payable | 68 | ' |
Stated interest rate | 17.50% | ' |
Effective interest rate | 17.50% | ' |
Capital Leases And Other Notes Payable Due On Various Dates Through Fiscal 2021 | ' | ' |
Debt Instrument [Line Items] | ' | ' |
Other notes payable due on various dates through fiscal 2021 | $39 | $2 |
Minimum stated interest rate | 0.00% | ' |
Maximum stated interest rate | 3.70% | ' |
Financial_Instruments_Schedule1
Financial Instruments (Schedule of Notes Payable and Long-Term Debt) (Parenthetical) (Detail) (USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Nov. 01, 2013 |
Notes Which Mature In December 2020 | ' |
Debt Instrument [Line Items] | ' |
Senior unsecured notes, face amount | $450 |
Debt maturity date | 1-Dec-20 |
Notes Which Mature In December 2040 | ' |
Debt Instrument [Line Items] | ' |
Senior unsecured notes, face amount | 300 |
Debt maturity date | 1-Dec-40 |
Notes Which Mature In July 2032 | ' |
Debt Instrument [Line Items] | ' |
Senior unsecured notes, face amount | 250 |
Debt maturity date | 1-Jul-32 |
Notes Which Mature In July 2033 | ' |
Debt Instrument [Line Items] | ' |
Senior unsecured notes, face amount | $300 |
Debt maturity date | 1-Jul-33 |
Related_Party_Transactions_Add
Related Party Transactions (Additional Information) (Detail) (USD $) | 1 Months Ended | 9 Months Ended | 8 Months Ended | ||||||
In Millions, unless otherwise specified | Jun. 28, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Jan. 31, 2013 | Sep. 27, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Nov. 01, 2013 |
Leidos Holdings Inc, | Leidos Holdings Inc, | Leidos, Inc. | Notes Which Mature In December 2020 | Notes Which Mature In December 2040 | Notes Which Mature In July 2033 | Notes Which Mature In July 2032 | |||
SAIC | |||||||||
Related Party Transaction [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Notes payable, related parties | ' | ' | ' | ' | ' | $450 | $300 | $300 | $250 |
Stated interest rate | ' | ' | ' | ' | ' | 4.45% | 5.95% | 5.50% | 7.13% |
Credit facility, maturity date | ' | '2018 | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding under credit facility | ' | 700 | ' | ' | ' | ' | ' | ' | ' |
Period extension for portions of intercompany loans (years) | ' | '1 year | ' | ' | ' | ' | ' | ' | ' |
Note receivable from Leidos Holdings, Inc. | ' | ' | 1,100 | ' | ' | ' | ' | ' | ' |
Notes payable | ' | ' | ' | 22 | ' | ' | ' | ' | ' |
Distribution of assets and liabilites upon separation | ' | ' | ' | ' | 722 | ' | ' | ' | ' |
Dividend paid | $342 | ' | ' | ' | $356 | ' | ' | ' | ' |
Accumulated_Other_Comprehensiv2
Accumulated Other Comprehensive Loss (Additional Information) (Detail) (Maximum, USD $) | 9 Months Ended |
In Millions, unless otherwise specified | Nov. 01, 2013 |
Maximum | ' |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' |
Unrealized net loss on settled derivatives which will be amortized and recognized | $1 |
Accumulated_Other_Comprehensiv3
Accumulated Other Comprehensive Loss (Schedule of Accumulated Other Comprehensive Loss) (Detail) (USD $) | Nov. 01, 2013 | Jan. 31, 2013 |
In Millions, unless otherwise specified | ||
Accumulated Other Comprehensive Loss [Abstract] | ' | ' |
Foreign currency translation adjustments, net of taxes of $(1) million as of November 1, 2013 and January 31, 2013 | $2 | $2 |
Unrecognized net loss on settled derivative instruments associated with outstanding debt, net of taxes of $3 million as of November 1, 2013 and January 31, 2013 | -5 | -5 |
Unrecognized net gain on defined benefit plan, net of taxes of $0 million as of November 1, 2013 and January 31, 2013 | 1 | 1 |
Total accumulated other comprehensive loss, net of taxes of $2 million as of November 1, 2013 and January 31, 2013 | ($2) | ($2) |
Accumulated_Other_Comprehensiv4
Accumulated Other Comprehensive Loss (Schedule of Accumulated Other Comprehensive Loss) (Parenthetical) (Detail) (USD $) | Nov. 01, 2013 | Jan. 31, 2013 |
In Millions, unless otherwise specified | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ' | ' |
Foreign currency translation adjustments, tax effect | ($1) | ($1) |
Unrecognized net loss on settled derivative instruments associated with outstanding debt, tax effect | 3 | 3 |
Unrecognized net loss on defined benefit plan, taxes | 0 | 0 |
Total accumulated other comprehensive loss, tax effect | $2 | $2 |
Business_Segment_Information_A
Business Segment Information - Additional Information (Detail) | 1 Months Ended | 9 Months Ended |
Jan. 31, 2013 | Nov. 01, 2013 | |
Segment | Segment | |
Segment Reporting [Abstract] | ' | ' |
Number of reportable segments | 3 | 3 |
Schedule_of_Segment_Reporting_
Schedule of Segment Reporting Information by Segment (Detail) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Millions, unless otherwise specified | Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | $1,420 | $1,673 | $4,486 | $4,899 |
Operating income (loss) | -7 | 100 | 69 | 314 |
Health and Engineering | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 408 | 508 | 1,380 | 1,341 |
Operating income (loss) | -30 | 46 | 2 | 107 |
National Security Solutions | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | 1,014 | 1,166 | 3,117 | 3,563 |
Operating income (loss) | 63 | 79 | 195 | 260 |
Intersegment Elimination | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | -1 | -1 | -3 | -4 |
Corporate and Other | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' |
Revenues | -1 | 0 | -8 | -1 |
Operating income (loss) | ($40) | ($25) | ($128) | ($53) |
Legal_Proceedings_Additional_I
Legal Proceedings - Additional Information (Detail) (USD $) | 9 Months Ended | 9 Months Ended | 3 Months Ended | 1 Months Ended | 9 Months Ended | 1 Months Ended | |||||||||||
Nov. 01, 2013 | Sep. 27, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Apr. 30, 2012 | Apr. 30, 2012 | Jul. 31, 2013 | Nov. 01, 2013 | Nov. 30, 2008 | Nov. 01, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Dec. 31, 2010 | Jul. 31, 2008 | Oct. 31, 2008 | Jul. 31, 2008 | |
LegalMatter | Timekeeping Contract with City of New York | Data Privacy Litigation | Stockholder Derivative Cases | Securities Class Actions | Greek Government Contract | Greek Government Contract | Greek Government Contract | Greek Government Contract | Greek Government Contract | Greek Government Contract | Greek Government Contract | Nuclear Regulatory Commission | Nuclear Regulatory Commission | Nuclear Regulatory Commission | Nuclear Regulatory Commission | ||
Patient | LegalMatter | LegalMatter | Invoice for Undisputed Portion of Contract | Value Added Taxes | Letters of Credit Relating to Delivery | Standby Letters of Credit | Letters of Credit Related System Support and Maintenance | Breach of Contract | Breach of Contract | False Claims Act Claims | False Claims Act Claims | ||||||
Letters of Credit Relating to Delivery | |||||||||||||||||
Legal Proceedings [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash settlement payment | ' | ' | $500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
DPA provides that the monitor will serve for a period (in years) | '3 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of patients (in millions) | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of lawsuits | 7 | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Period of identity restoration services | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Damages sought | 1,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Judgments or settlements relating to the claims | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated loss, minimum | ' | ' | ' | 10,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of lawsuits, withdrawn | ' | ' | ' | ' | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of lawsuits, consolidated | ' | ' | ' | ' | 4 | 2 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Contracts receivable | ' | ' | ' | ' | ' | ' | ' | ' | 19,000,000 | 34,000,000 | ' | ' | ' | ' | ' | ' | ' |
Arbitral awards | ' | ' | ' | ' | ' | ' | 53,000,000 | 26,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Recorded losses | ' | ' | ' | ' | ' | ' | ' | 123,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Receivables relating to value added taxes | ' | ' | ' | ' | ' | ' | ' | ' | ' | 15,000,000 | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding | ' | 500,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,000,000 | ' | ' | ' | ' |
Letter of credit available to the company | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20,000,000 | 22,000,000 | ' | ' | ' | ' | ' |
Loss related to litigation settlement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 78 | 78 | ' | ' |
Judgment rescinded on appeal | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $585,000 | $2,000,000 |
Other_Commitments_and_Continge1
Other Commitments and Contingencies - Additional Information (Detail) (USD $) | 1 Months Ended | 6 Months Ended | 8 Months Ended | 9 Months Ended | 3 Months Ended | 1 Months Ended | 8 Months Ended | 9 Months Ended | 8 Months Ended | |||||
In Millions, unless otherwise specified | Nov. 30, 2012 | Nov. 01, 2013 | Jan. 31, 2013 | Aug. 02, 2013 | Sep. 27, 2013 | Nov. 01, 2013 | Oct. 31, 2014 | Nov. 01, 2013 | Nov. 01, 2013 | Nov. 01, 2013 | Nov. 30, 2012 | Sep. 27, 2013 | Nov. 01, 2013 | Sep. 27, 2013 |
Government Investigations And Reviews | Government Investigations And Reviews | Government Investigations And Reviews | Tax Audits And Reviews | Tax Audits And Reviews | Standby Letters of Credit | Performance Guarantee | Virnet X Inc | SAIC | SAIC | Pre-Separation [Member] | ||||
Government Investigations And Reviews | Government Investigations And Reviews | Government Investigations And Reviews | ||||||||||||
Other Commitments And Contingencies [Line Items] | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of patents infringed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2 | ' | ' | ' |
Patents transferred and awarded | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $368 | ' | ' | ' |
Percentage of proceeds obtained | 25.00% | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Aggregate loss provisions | ' | ' | ' | 18 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Liability for estimate of loss | ' | ' | ' | ' | 27 | 29 | ' | ' | ' | ' | ' | 18 | 45 | 45 |
Other long-term liabilities | ' | 182 | 170 | ' | ' | ' | ' | 11 | ' | ' | ' | ' | ' | ' |
Liabilities for uncertain tax positions | ' | ' | ' | ' | ' | ' | ' | 16 | ' | ' | ' | ' | ' | ' |
Unrecognized tax benefits | ' | ' | ' | ' | ' | ' | ' | 6 | ' | ' | ' | ' | ' | ' |
Uncertain tax positions on previously accrued interest | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' |
Reduction in income tax expense | ' | ' | ' | ' | ' | ' | 3 | ' | ' | ' | ' | ' | ' | ' |
Amount outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 98 | ' | ' | ' | ' | ' |
Surety bonds | ' | ' | ' | ' | ' | ' | ' | ' | ' | $140 | ' | ' | ' | ' |
Subsequent_Events_Details
Subsequent Events (Details) (USD $) | 3 Months Ended | 9 Months Ended | 0 Months Ended | ||
Nov. 01, 2013 | Oct. 31, 2012 | Nov. 01, 2013 | Oct. 31, 2012 | Dec. 06, 2013 | |
Subsequent Event | |||||
Subsequent Event [Line Items] | ' | ' | ' | ' | ' |
Authorized shares for the repurchase program | ' | ' | ' | ' | 20,000,000 |
Cash dividends declared per share | $0.32 | $0.48 | $5.28 | $1.44 | $0.32 |