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REVENUE RECOGNITION
12 Months Ended
Jun. 30, 2019
Revenue From Contract With Customer [Abstract]  
REVENUE RECOGNITION

NOTE 11. REVENUE RECOGNITION

We disaggregate our revenue arrangements by contract type, customer, and whether the Company performs on the contract as the prime or subcontractor.  We believe that these categories allow for a better understanding of the nature, amount, timing, and uncertainty of revenue and cash flows arising from our contracts.

 

Revenue by Contract Type

The Company generated revenue on our cost-plus-fee, firm fixed-price (including proprietary software product sales), and time-and-materials contracts as follows during the year ended June 30, 2019 (in thousands):

 

 

 

Year Ended June 30, 2019

 

 

 

Domestic

 

 

International

 

 

Total

 

Cost-plus-fee

 

$

2,764,291

 

 

$

 

 

$

2,764,291

 

Firm fixed-price

 

 

1,365,052

 

 

 

100,507

 

 

 

1,465,559

 

Time and materials

 

 

700,107

 

 

 

56,384

 

 

 

756,491

 

Total

 

$

4,829,450

 

 

$

156,891

 

 

$

4,986,341

 

Customer Information

The Company generated revenue from our primary customer groups as follows during the year ended June 30, 2019 (in thousands):

 

 

 

Year Ended June 30, 2019

 

 

 

Domestic

 

 

International

 

 

Total

 

Department of Defense

 

$

3,489,854

 

 

$

 

 

$

3,489,854

 

Federal civilian agencies

 

 

1,263,681

 

 

 

 

 

 

1,263,681

 

Commercial and other

 

 

75,915

 

 

 

156,891

 

 

 

232,806

 

Total

 

$

4,829,450

 

 

$

156,891

 

 

$

4,986,341

 

Prime or Subcontractor

The Company generated revenue as either the prime or subcontractor as follows during the year ended June 30, 2019 (in thousands):

 

 

 

Year Ended June 30, 2019

 

 

 

Domestic

 

 

International

 

 

Total

 

Prime contractor

 

$

4,429,439

 

 

$

156,891

 

 

$

4,586,330

 

Subcontractor

 

 

400,011

 

 

 

 

 

 

400,011

 

Total

 

$

4,829,450

 

 

$

156,891

 

 

$

4,986,341

 

 

Significant Estimates

The Company uses an estimate at completion (EAC) as the basis to measure progress towards the complete satisfaction of its contractual performance obligations, for each of its contracts in which revenue is recognized using a percentage of completion calculation.  The EAC process requires the Company to use professional judgment when assessing risks, estimating contract revenue and costs, estimating variable consideration, and making assumptions for schedule and technical issues.  Based on changes in a contract’s EAC, a cumulative adjustment to revenue will be recorded.  During the year ended June 30, 2019, we recognized an increase to income before income taxes of $19.7 million ($0.57 per diluted share), from EAC adjustments.  The Company used its statutory tax rate when calculating the impact to diluted earnings per share.

The Company records final true-up adjustments to its estimated award or incentive fees in the period in which we receive the customer’s final performance score or when we can determine that more objective, contractually-defined criteria have been fully satisfied.  These final true-up adjustments are disclosed as revenue recognized from previously satisfied performance obligations.  For the year ended June 30, 2019, the revenue recognized from previously satisfied performance obligations was not material.

Remaining Performance Obligations

The Company’s remaining performance obligations balance as of period end represents the expected revenue to be recognized for the satisfaction of remaining performance obligations on our existing contracts.  This balance excludes unexercised contract option years and task orders that may be issued underneath an IDIQ vehicle.  Our remaining performance obligations balance as of June 30, 2019 was $6.2 billion.

The Company expects to recognize approximately 77 percent of our remaining performance obligations balance as revenue over the next year and the remaining 23 percent thereafter.