UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
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(Mark One) |
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) |
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For the quarterly period ended October 31, 2003 |
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OR |
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) |
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Commission file number: 0-12771 |
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Science Applications International Corporation
(Exact name of registrant as specified in its charter)
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Delaware |
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95-3630868 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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10260 Campus Point Drive |
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(Address, including zip code, and telephone number, |
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Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý No o
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act).
Yes o No ý
As of November 30, 2003 the Registrant had 182,432,225 shares of Class A common stock, $.01 par value per share, issued and outstanding, and 228,190 shares of Class B common stock, $.05 par value per share, issued and outstanding.
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
Condensed Consolidated Statements of Income
(Unaudited, in thousands, except per share amounts)
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Three months ended |
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Nine months ended |
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October 31, 2003 |
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October 31, 2002 |
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October 31, 2003 |
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October 31, 2002 |
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Revenues |
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$ |
1,751,425 |
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$ |
1,539,640 |
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$ |
4,914,103 |
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$ |
4,360,261 |
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Costs and expenses: |
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Cost of revenues |
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1,442,829 |
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1,242,034 |
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4,065,893 |
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3,535,953 |
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Selling, general and administrative expenses |
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138,428 |
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144,557 |
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426,744 |
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438,001 |
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Goodwill impairment |
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7,022 |
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9,007 |
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Gain on sale of business units, net |
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(1,516 |
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(4,899 |
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Operating income |
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170,168 |
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154,565 |
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414,444 |
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382,199 |
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Non-operating income (expense): |
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Net gain (loss) on marketable securities and other investments, including impairment losses |
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20,135 |
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(8,476 |
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4,928 |
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(134,134 |
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Interest income |
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8,353 |
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11,531 |
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38,444 |
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28,025 |
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Interest expense |
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(21,091 |
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(17,107 |
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(56,951 |
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(28,992 |
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Other income (loss), net |
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1,638 |
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(73 |
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3,217 |
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2,867 |
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Minority interest in income of consolidated subsidiaries |
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(3,295 |
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(2,022 |
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(7,211 |
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(5,723 |
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Income from continuing operations before income taxes |
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175,908 |
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138,418 |
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396,871 |
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244,242 |
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Provision for income taxes |
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60,501 |
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46,341 |
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121,045 |
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77,887 |
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Income from continuing operations |
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115,407 |
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92,077 |
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275,826 |
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166,355 |
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Discontinued operations (Note Q): |
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Loss from discontinued operations of INTESA joint venture, net of income tax expense of $3,054 and $9,351 for the three and nine months ended October 31, 2002, respectively |
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— |
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(238 |
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— |
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(728 |
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Net income |
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$ |
115,407 |
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$ |
91,839 |
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$ |
275,826 |
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$ |
165,627 |
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Earnings per share: |
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Basic |
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$ |
.63 |
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$ |
.48 |
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$ |
1.49 |
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$ |
.83 |
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Diluted |
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$ |
.61 |
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$ |
.46 |
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$ |
1.46 |
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$ |
.80 |
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Common equivalent shares: |
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Basic |
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184,632 |
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192,616 |
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185,689 |
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198,916 |
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Diluted |
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188,053 |
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198,373 |
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189,141 |
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207,045 |
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See accompanying notes to condensed consolidated financial statements.
2
SCIENCE APPLICATIONS INTERNATIONAL CORPORATION
Condensed Consolidated Balance Sheets
(Unaudited, in thousands)
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October 31, 2003 |
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January 31, 2003 |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
982,210 |
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$ |
1,095,441 |
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Restricted cash |
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11,597 |
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8,442 |
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Short-term investments in marketable securities |
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1,257,795 |
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1,093,455 |
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Receivables, net |
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1,245,627 |
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1,127,584 |
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Prepaid expenses and other current assets |
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97,327 |
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90,064 |
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Deferred income taxes |
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89,754 |
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89,512 |
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Total current assets |
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3,684,310 |
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3,504,498 |
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Property, plant and equipment (less accumulated depreciation of $487,196 and $492,272 at October 31, 2003 and January 31, 2003, respectively) |
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474,024 |
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406,263 |
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Intangible assets |
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38,156 |
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28,162 |
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Goodwill |
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233,169 |
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136,676 |
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Long-term investments in marketable securities |
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5,946 |
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19,301 |
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Prepaid pension assets |
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555,478 |
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558,178 |
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Other assets |
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120,049 |
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151,298 |
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$ |
5,111,132 |
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$ |
4,804,376 |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable and accrued liabilities |
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$ |
747,313 |
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$ |
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