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Sales of Receivables

3 Months Ended

Sep. 30, 2019

Transfers And Servicing Of Financial Assets [Abstract]

Sales of Receivables

9. Sales of Receivables

On December 28, 2018, the Company entered into a Master Accounts Receivable Purchase Agreement (MARPA Facility) with MUFG Bank, Ltd. (the Purchaser), for the sale of certain designated eligible U.S. government receivables.  The MARPA Facility has an initial term of one-year.  Under the MARPA Facility, the Company can sell eligible receivables, including certain billed and unbilled receivables up to a maximum amount of $200.0 million.  The Company’s receivables are sold under the MARPA Facility without recourse for any U.S. government credit risk.

The Company accounts for receivable transfers under the MARPA Facility as sales under ASC 860, Transfers and Servicing, and derecognizes the sold receivables from its balance sheets.  The fair value of the sold receivables approximated their book value due to their short-term nature.  

The Company does not retain an ongoing financial interest in the transferred receivables other than cash collection and administrative services.  The Company estimated that its servicing fee was at fair value and therefore no servicing asset or liability related to these receivables was recognized as of September 30, 2019.  Proceeds from the sold receivables are reflected in our operating cash flows on the statement of cash flows.

MARPA Facility activity consisted of the following (in thousands):

		As of and for the
		Three Months Ended
		September 30, 2019
Outstanding balance – June 30, 2019:		$	192,527
Sales of receivables			493,879
Cash collections			(505,303	)
Outstanding balance sold to Purchaser – September 30, 2019: (1)			181,103
Cash collected, not remitted to Purchaser (2)			(90,850	)
Remaining sold receivables		$	90,253

(1) For the three months ended September 30, 2019, the Company recorded a cash outflow in its cash flows from operating activities of $11.4 million from sold receivables.  The cash outflow is calculated as the change in the outstanding balance of sold receivables as of September 30, 2019, compared with the outstanding balance as of June 30, 2019.

(2) Includes the cash collected on behalf of but not yet remitted to the Purchaser as of September 30, 2019.  This balance represents an obligation to the Purchaser and is included in other accrued expenses and current liabilities in the accompanying consolidated balance sheet.

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- References

No definition available.

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- Definition

The entire disclosure for a transferor's continuing involvement in financial assets that it has transferred in a securitization or asset-backed financing arrangement, the nature of any restrictions on assets reported by an entity in its statement of financial position that relate to a transferred financial asset (including the carrying amounts of such assets), how servicing assets and servicing liabilities are reported, and (for securitization or asset-backed financing arrangements accounted for as sales) when a transferor has continuing involvement with the transferred financial assets and transfers of financial assets accounted for as secured borrowings, how the transfer of financial assets affects an entity's financial position, financial performance, and cash flows.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 860
-URI http://asc.fasb.org/topic&trid=2197590

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