XML 34 R18.htm IDEA: XBRL DOCUMENT v3.20.2
REVENUE RECOGNITION
 12 Months Ended
Jun. 30, 2020
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, and time-and-materials contracts as follows during the year ended June 30, 2020 and 2019 (in thousands):

 

 

 

Year Ended June 30, 2020

 

 

Year Ended June 30, 2019

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Cost-plus-fee

 

$

3,274,707

 

 

$

—

 

 

$

3,274,707

 

 

$

2,764,291

 

 

$

—

 

 

$

2,764,291

 

Firm fixed-price

 

 

1,524,381

 

 

 

105,094

 

 

 

1,629,475

 

 

 

1,365,052

 

 

 

100,507

 

 

 

1,465,559

 

Time and materials

 

 

757,584

 

 

 

58,276

 

 

 

815,860

 

 

 

700,107

 

 

 

56,384

 

 

 

756,491

 

Total

 

$

5,556,672

 

 

$

163,370

 

 

$

5,720,042

 

 

$

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, 2020 and 2019 (in thousands):

 

 

 

Year Ended June 30, 2020

 

 

Year Ended June 30, 2019

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Department of Defense

 

$

3,999,261

 

 

$

—

 

 

$

3,999,261

 

 

$

3,489,854

 

 

$

—

 

 

$

3,489,854

 

Federal civilian agencies

 

 

1,467,801

 

 

 

—

 

 

 

1,467,801

 

 

 

1,263,681

 

 

 

—

 

 

 

1,263,681

 

Commercial and other

 

 

89,610

 

 

 

163,370

 

 

 

252,980

 

 

 

75,915

 

 

 

156,891

 

 

 

232,806

 

Total

 

$

5,556,672

 

 

$

163,370

 

 

$

5,720,042

 

 

$

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, 2020 and 2019 (in thousands):

 

 

 

Year Ended June 30, 2020

 

 

Year Ended June 30, 2019

 

 

 

Domestic

 

 

International

 

 

Total

 

 

Domestic

 

 

International

 

 

Total

 

Prime contractor

 

$

5,057,930

 

 

$

163,370

 

 

$

5,221,300

 

 

$

4,429,439

 

 

$

156,891

 

 

$

4,586,330

 

Subcontractor

 

 

498,742

 

 

 

—

 

 

 

498,742

 

 

 

400,011

 

 

 

—

 

 

 

400,011

 

Total

 

$

5,556,672

 

 

$

163,370

 

 

$

5,720,042

 

 

$

4,829,450

 

 

$

156,891

 

 

$

4,986,341

 

 

Significant Estimates

For many of our fixed price revenue arrangements and for revenue arrangements that have award or incentive fees, the Company uses an estimate at completion (EAC) to measure progress towards the complete satisfaction of its performance obligations.  For these revenue arrangements, revenue is recognized over time primarily using a cost-to-cost input method based on the ratio of costs incurred to date to total estimated costs at completion.  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.  The Company periodically reassesses its EAC assumptions and updates its estimates as needed.  When estimates of total costs to be incurred on a contract exceed total revenue, a provision for the entire loss on the contract is recorded in the period in which the loss is determined.

Based on changes in a contract’s EAC, a cumulative adjustment to revenue will be recorded.  For the twelve months June 30, 2020 and 2019, we recognized an increase to income before income taxes of $33.0 million ($0.95 per diluted share) and $19.7 million ($0.57 per diluted share), respectively.  The Company used its statutory tax rate when calculating the impact to diluted earnings per share.

Revenue recognized from previously satisfied performance obligations was $10.5 million for the twelve months ended June 30, 2020, compared with an immaterial amount for the twelve months ended June 30, 2019.  The change in revenue generally relates to final true-up adjustments to our 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.  During the twelve months ended June 30, 2020, the Company received notification that certain contract close out risks had been mitigated on previously satisfied performance obligations and therefore recorded a reduction to its established reserve amount.

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, 2020 was $6.4 billion.

The Company expects to recognize approximately 80 percent of our remaining performance obligations balance as revenue over the next year and the remaining 20 percent thereafter.