Cover
Cover - shares | 3 Months Ended | |
Jun. 30, 2023 | Jul. 24, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2023 | |
Document Transition Report | false | |
Entity File Number | 001-34972 | |
Entity Registrant Name | Booz Allen Hamilton Holding Corp | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 26-2634160 | |
Entity Address, Address Line One | 8283 Greensboro Drive, | |
Entity Address, City or Town | McLean, | |
Entity Address, State or Province | VA | |
Entity Address, Postal Zip Code | 22102 | |
City Area Code | 703 | |
Local Phone Number | 902-5000 | |
Title of 12(b) Security | Class A Common Stock | |
Trading Symbol | BAH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 131,043,378 | |
Entity Central Index Key | 0001443646 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2024 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --03-31 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Current assets: | ||
Cash and cash equivalents | $ 209,640 | $ 404,862 |
Accounts receivable, net | 2,099,966 | 1,774,830 |
Prepaid expenses and other current assets | 98,150 | 108,366 |
Total current assets | 2,407,756 | 2,288,058 |
Property and equipment, net of accumulated depreciation | 183,316 | 195,186 |
Operating lease right-of-use assets | 183,127 | 187,798 |
Intangible assets, net of accumulated amortization | 657,780 | 685,615 |
Goodwill | 2,343,789 | 2,338,399 |
Deferred tax assets | 696,602 | 573,780 |
Other long-term assets | 293,947 | 281,816 |
Total assets | 6,766,317 | 6,550,652 |
Current liabilities: | ||
Current portion of long-term debt | 116,250 | 41,250 |
Accounts payable and other accrued expenses | 1,391,029 | 1,316,640 |
Accrued compensation and benefits | 372,506 | 445,205 |
Operating lease liabilities | 46,281 | 51,238 |
Other current liabilities | 66,389 | 42,721 |
Total current liabilities | 1,992,455 | 1,897,054 |
Long-term debt, net of current portion | 2,761,333 | 2,770,895 |
Operating lease liabilities, net of current portion | 195,473 | 198,144 |
Income tax reserves | 654,341 | 552,623 |
Other long-term liabilities | 145,644 | 139,934 |
Total liabilities | 5,749,246 | 5,558,650 |
Commitments and contingencies (Note 15) | ||
Stockholders’ equity: | ||
Common stock, Class A - $0.01 par value - authorized, 600,000,000 shares; issued, 166,521,283 shares at June 30, 2023 and 165,872,332 shares at March 31, 2023; outstanding, 131,116,370 shares at June 30, 2023 and 131,637,588 shares at March 31, 2023 | 1,665 | 1,659 |
Treasury stock, at cost — 35,404,913 shares at June 30, 2023 and 34,234,744 shares at March 31, 2023 | (1,972,886) | (1,859,905) |
Additional paid-in capital | 805,240 | 769,460 |
Retained earnings | 2,150,361 | 2,051,455 |
Accumulated other comprehensive income | 32,691 | 29,333 |
Total stockholders’ equity | 1,017,071 | 992,002 |
Total liabilities and stockholders’ equity | $ 6,766,317 | $ 6,550,652 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Jun. 30, 2023 | Mar. 31, 2023 |
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 600,000,000 | 600,000,000 |
Common stock, issued (in shares) | 166,521,283 | 165,872,332 |
Common stock, outstanding (in shares) | 131,116,370 | 131,637,588 |
Treasury stock (in shares) | 35,404,913 | 34,234,744 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Income Statement [Abstract] | ||
Revenue | $ 2,654,486 | $ 2,249,600 |
Operating costs and expenses: | ||
Cost of revenue | 1,251,916 | 1,074,973 |
Billable expenses | 812,304 | 674,266 |
General and administrative expenses | 314,001 | 253,064 |
Depreciation and amortization | 41,847 | 40,102 |
Total operating costs and expenses | 2,420,068 | 2,042,405 |
Operating income | 234,418 | 207,195 |
Interest expense | (35,474) | (24,655) |
Other income (expense), net | 1,924 | (2,958) |
Income before income taxes | 200,868 | 179,582 |
Income tax expense | 39,480 | 41,489 |
Net income | 161,388 | 138,093 |
Net loss attributable to non-controlling interest | 0 | 191 |
Net income attributable to common stockholders | $ 161,388 | $ 138,284 |
Earnings per common share (Note 4): | ||
Basic (in dollars per share) | $ 1.22 | $ 1.04 |
Diluted (in dollars per share) | $ 1.22 | $ 1.03 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 161,388 | $ 138,093 |
Other comprehensive income, net of tax: | ||
Change in unrealized gain on derivatives designated as cash flow hedges | 3,741 | 5,759 |
Change in postretirement plan costs | (383) | (2) |
Total other comprehensive income, net of tax | 3,358 | 5,757 |
Comprehensive income | 164,746 | 143,850 |
Comprehensive loss attributable to non-controlling interest | 0 | 191 |
Comprehensive income attributable to common stockholders | $ 164,746 | $ 144,041 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Cash flows from operating activities | ||
Net income | $ 161,388 | $ 138,093 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 41,847 | 40,102 |
Noncash lease expense | 13,610 | 13,787 |
Stock-based compensation expense | 17,685 | 13,696 |
Amortization of debt issuance costs | 1,027 | 1,161 |
Net losses on dispositions, and other | 1,208 | 1,293 |
Changes in assets and liabilities: | ||
Accounts receivable, net | (325,363) | (205,387) |
Deferred income taxes and income taxes receivable / payable | 31,509 | 34,802 |
Prepaid expenses and other current and long-term assets | (10,217) | (11,241) |
Accrued compensation and benefits | (56,738) | (61,039) |
Accounts payable and other accrued expenses | 74,389 | (4,287) |
Other current and long-term liabilities | (21,877) | (6,614) |
Net cash used in operating activities | (71,532) | (45,634) |
Cash flows from investing activities | ||
Purchases of property, equipment, and software | (10,488) | (13,734) |
Payments for business acquisitions and dispositions | (406) | 0 |
Payments for cost method investments | (4,160) | 0 |
Net cash used in investing activities | (15,054) | (13,734) |
Cash flows from financing activities | ||
Proceeds from issuance of common stock | 6,925 | 6,081 |
Stock option exercises | 11,176 | 4,596 |
Repurchases of common stock | (128,390) | (73,397) |
Cash dividends paid | (63,034) | (58,899) |
Repayments on revolving credit facility, term loans, and Senior Notes | (10,313) | (17,095) |
Proceeds from revolving credit facility | 75,000 | 0 |
Net cash used in financing activities | (108,636) | (138,714) |
Net decrease in cash and cash equivalents | (195,222) | (198,082) |
Cash and cash equivalents––beginning of period | 404,862 | 695,910 |
Cash and cash equivalents––end of period | 209,640 | 497,828 |
Net cash paid during the period for: | ||
Interest | 26,091 | 8,735 |
Income taxes | $ 2,868 | $ 2,952 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Class A Common Stock | Common Stock Class A Common Stock | Treasury Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-Controlling Interest | ||
Beginning of period (in shares) at Mar. 31, 2022 | 164,372,545 | |||||||||
Beginning of period at Mar. 31, 2022 | $ 1,046,721 | $ 1,646 | $ (1,635,454) | $ 656,222 | $ 2,015,071 | $ 8,585 | $ 651 | |||
Beginning of period (in shares) at Mar. 31, 2022 | (31,788,197) | |||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock (in shares) | 385,009 | |||||||||
Issuance of common stock | 6,081 | $ 3 | 6,078 | |||||||
Stock options exercised (in shares) | 143,325 | |||||||||
Stock options exercised | 4,596 | $ 1 | 4,595 | |||||||
Repurchase of common stock (in shares) | (600,000) | (689,304) | [1] | |||||||
Repurchase of common stock | (57,558) | [1] | $ (46,900) | $ (57,558) | [1] | |||||
Net income | 138,093 | 138,284 | (191) | |||||||
Other comprehensive income, net of tax | 5,757 | 5,757 | ||||||||
Dividends declared | (58,262) | (58,262) | ||||||||
Stock-based compensation expense | 13,696 | 13,696 | ||||||||
Contribution to non-controlling interest | 0 | (959) | 959 | |||||||
End of period (in shares) at Jun. 30, 2022 | 164,900,879 | |||||||||
End of period at Jun. 30, 2022 | $ 1,099,124 | $ 1,650 | $ (1,693,012) | 679,632 | 2,095,093 | 14,342 | 1,419 | |||
End of period (in shares) at Jun. 30, 2022 | (32,477,501) | |||||||||
Beginning of period (in shares) at Mar. 31, 2023 | 131,637,588 | 165,872,332 | ||||||||
Beginning of period at Mar. 31, 2023 | $ 992,002 | $ 1,659 | $ (1,859,905) | 769,460 | 2,051,455 | 29,333 | 0 | |||
Beginning of period (in shares) at Mar. 31, 2023 | (34,234,744) | (34,234,744) | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||
Issuance of common stock (in shares) | 396,569 | |||||||||
Issuance of common stock | $ 6,925 | $ 4 | 6,921 | |||||||
Stock options exercised (in shares) | 252,382 | |||||||||
Stock options exercised | 11,176 | $ 2 | 11,174 | |||||||
Repurchase of common stock (in shares) | (1,000,000) | (1,170,169) | [2] | |||||||
Repurchase of common stock | (112,981) | [2] | $ (100,100) | $ (112,981) | [2] | |||||
Net income | 161,388 | 161,388 | 0 | |||||||
Other comprehensive income, net of tax | 3,358 | 3,358 | ||||||||
Dividends declared | (62,482) | (62,482) | ||||||||
Stock-based compensation expense | $ 17,685 | 17,685 | ||||||||
End of period (in shares) at Jun. 30, 2023 | 131,116,370 | 166,521,283 | ||||||||
End of period at Jun. 30, 2023 | $ 1,017,071 | $ 1,665 | $ (1,972,886) | $ 805,240 | $ 2,150,361 | $ 32,691 | $ 0 | |||
End of period (in shares) at Jun. 30, 2023 | (35,404,913) | (35,404,913) | ||||||||
[1]During the three months ended June 30, 2022, the Company purchased 0.6 million shares of the Company’s Class A Common Stock in a series of open market transactions for $46.9 million. Additionally, the Company repurchased shares for $10.6 million during the three months ended June 30, 2022 to cover the minimum statutory withholding taxes on restricted stock units that vested on various dates during the period.[2]During the three months ended June 30, 2023, the Company purchased 1.0 million shares of the Company’s Class A Common Stock in a series of open market transactions for $100.1 million. Additionally, the Company repurchased shares for $12.4 million during the three months ended June 30, 2023 to cover the minimum statutory withholding taxes on restricted stock units that vested on various dates during the period. |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Parenthetical) - USD ($) $ in Thousands, shares in Millions | 3 Months Ended | |||
Jun. 30, 2023 | Jun. 30, 2022 | |||
Dividends paid (in dollars per share) | $ 0.47 | $ 0.43 | ||
Repurchase of common stock, value | $ 112,981 | [1] | $ 57,558 | [2] |
Repurchase of shares to cover tax withholding on restricted stock units that vested | $ 12,400 | $ 10,600 | ||
Class A Common Stock | ||||
Repurchase of common stock (in shares) | 1 | 0.6 | ||
Repurchase of common stock, value | $ 100,100 | $ 46,900 | ||
[1]During the three months ended June 30, 2023, the Company purchased 1.0 million shares of the Company’s Class A Common Stock in a series of open market transactions for $100.1 million. Additionally, the Company repurchased shares for $12.4 million during the three months ended June 30, 2023 to cover the minimum statutory withholding taxes on restricted stock units that vested on various dates during the period.[2]During the three months ended June 30, 2022, the Company purchased 0.6 million shares of the Company’s Class A Common Stock in a series of open market transactions for $46.9 million. Additionally, the Company repurchased shares for $10.6 million during the three months ended June 30, 2022 to cover the minimum statutory withholding taxes on restricted stock units that vested on various dates during the period. |
Business Overview
Business Overview | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business Overview | Business OverviewBooz Allen Hamilton Holding Corporation, including its wholly owned subsidiaries, or the Company, we, us, and our, was incorporated in Delaware in May 2008. The Company provides management and technology consulting, analytics, engineering, digital solutions, mission operations, and cyber services to U.S. and international governments, major corporations, and not-for-profit organizations. The Company reports operating results and financial data in one reportable segment. The Company is headquartered in McLean, Virginia, with approximately 32,600 employees as of June 30, 2023. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the information contained in the Company's Annual Report on Form 10-K for the year ended March 31, 2023. The interim period unaudited condensed consolidated financial statements are presented as described below. Certain information and disclosures normally required for annual financial statements have been condensed or omitted pursuant to GAAP and SEC rules and regulations. In the opinion of management, all adjustments considered necessary for fair presentation of the results of the interim periods presented have been included. The Company’s fiscal year ends on March 31 and, unless otherwise noted, references to fiscal year or fiscal are for fiscal years ended March 31. The results of operations for the three months ended June 30, 2023 are not necessarily indicative of results to be expected for the full fiscal year. The condensed consolidated financial statements and notes of the Company include its subsidiaries, and other entities over which the Company has a controlling financial interest or where the Company is a primary beneficiary. The Company uses the equity method to account for investments in entities that it does not control if it is otherwise able to exert significant influence over the entities' operating and financial policies. Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost or cost net of other-than-temporary impairments. Certain amounts reported in the Company's prior fiscal year condensed consolidated financial statements have been reclassified to conform to the current fiscal year presentation. Accounting Estimates 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 disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Areas of the financial statements where estimates may have the most significant effect include the provision for claimed indirect costs, valuation and expected lives of tangible and intangible assets, impairment of long-lived assets, accrued liabilities, revenue recognition, including the accrual of indirect costs, bonus and other incentive compensation, stock-based compensation, reserves for uncertain tax positions and valuation allowances on deferred tax assets, provisions for income taxes, postretirement obligations, collectability of receivables, and loss accruals for litigation. Actual results experienced by the Company may differ materially from management's estimates. Recently Adopted Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“Topic 848”). The guidance is intended to provide relief for entities impacted by reference rate reform. Topic 848 contains provisions and optional accounting expedients designed to simplify requirements around the designation of hedging relationships, probability assessments of hedged forecasted transactions, and accounting for modifications of contracts that refer to the London Interbank Offered Rate (“LIBOR”) or other rates affected by reference rate reform. The guidance is elective and is effective on the date of issuance. Topic 848 is applied prospectively to contract modifications and as of the effective date for existing and new eligible hedging relationships. During the first quarter of fiscal 2024, the Company modified its interest rate swap agreements to transition from LIBOR-indexed to term SOFR-indexed periodic swap payments to align with interest payments in connection with its term SOFR-indexed debt. As such, the Company elected the optional expedients under Topic 848 which allows the cash flow hedge to continue being recognized under hedge accounting without de-designation upon a change in critical terms affected by the reference rate reform. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements and disclosures. Recent Accounting Pronouncements Not Yet Adopted Accounting and reporting pronouncements effective after June 30, 2023 and issued through the filing date are not expected to have a material impact on the Company's condensed consolidated financial statements. |
Revenue
Revenue | 3 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue The Company's revenues from contracts with customers (clients) are derived from offerings that include management and technology consulting services, analytics, digital solutions, engineering, mission operations, and cyber services, substantially all with the U.S. government and its agencies and, to a lesser extent, subcontractors. The Company also serves foreign governments, as well as domestic and international commercial clients. The Company performs and generates revenue under three basic types of contracts, which include cost-reimbursable contracts, time-and-materials contracts, and fixed-price contracts. Contract Estimates We recognize revenue for many of our contracts under a contract cost-based input method and require an Estimate-at-Completion (“EAC”) process, which management uses to review and monitor the progress towards the completion of our performance obligations. Under this process, management considers various inputs and assumptions related to the EAC, including, but not limited to, progress towards completion, labor costs and productivity, material and subcontractor costs, and identified risks. Estimating the total cost at the completion of our performance obligations is subjective and requires management to make assumptions about future activity and cost drivers under the contract. Changes in these estimates can occur for a variety of reasons and, if significant, may impact the profitability of the Company’s contracts. Changes in estimates related to contracts accounted for under the EAC process are recognized on a cumulative catch-up basis in the period when such changes are determinable and reasonably estimable. If the estimate of contract profitability indicates an anticipated loss on a contract, the Company recognizes the total loss at the time it is identified. For each of the three months ended June 30, 2023 and 2022, the aggregate impact of adjustments in contract estimates was not material. Disaggregation of Revenue We disaggregate our revenue from contracts with customers by contract type and by customer type, as well as by whether the Company acts as prime contractor or sub-contractor, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables presents our revenue disaggregated by these categories. Revenue by Contract Type: We generate revenue under the following three basic types of contracts: • Cost-Reimbursable Contracts: Cost-reimbursable contracts provide for the payment of allowable costs incurred during performance of the contract, up to a ceiling based on the amount that has been funded, plus a fixed fee or award fee. • Time-and-Materials Contracts: Under contracts in this category, we are paid a fixed hourly rate for each direct labor hour expended, and we are reimbursed for billable material costs and billable out-of-pocket expenses inclusive of allocable indirect costs. We assume the financial risk on time-and-materials contracts because our costs of performance may exceed negotiated hourly rates. • Fixed-Price Contracts: Under a fixed-price contract, we agree to perform the specified work for a predetermined price. To the extent our actual direct and allocated indirect costs decrease or increase from the estimates upon which the price was negotiated, we will generate more or less profit, respectively, or could incur a loss. The table below presents the total revenue for each type of contract: Three Months Ended 2023 2022 Cost-reimbursable $ 1,450,184 55 % $ 1,190,828 53 % Time-and-materials 635,733 24 % 545,902 24 % Fixed-price 568,569 21 % 512,870 23 % Total Revenue $ 2,654,486 100 % $ 2,249,600 100 % Revenue by Customer Type: Three Months Ended 2023 2022 U.S. government (1) : Defense Clients $ 1,224,317 46 % $ 1,027,811 46 % Intelligence Clients 476,497 18 % 404,123 18 % Civil Clients 904,960 34 % 754,660 33 % Total U.S. government 2,605,774 98 % 2,186,594 97 % Global Commercial Clients 48,712 2 % 63,006 3 % Total Revenue $ 2,654,486 100 % $ 2,249,600 100 % (1) Certain contracts were reassigned between the various verticals of our U.S. government business shown in the table above to better align our operations to the customers we serve within each market. Prior year revenue by customer type has been recast to reflect the changes. Revenue by Whether the Company Acts as a Prime Contractor or a Subcontractor: Three Months Ended 2023 2022 Prime Contractor $ 2,517,558 95 % $ 2,131,295 95 % Subcontractor 136,928 5 % 118,305 5 % Total Revenue $ 2,654,486 100 % $ 2,249,600 100 % Performance Obligations Remaining performance obligations represent the transaction price of exercised contracts for which work has not yet been performed, irrespective of whether funding has or has not been authorized and appropriated as of the date of exercise. Remaining performance obligations exclude negotiated but unexercised options, the unfunded value of expired contracts, and certain variable consideration which the Company does not expect to recognize as revenue. As of June 30, 2023 and March 31, 2023, the Company had $8.0 billion and $7.9 billion of remaining performance obligations, respectively. We expect to recognize approximately 75% of the remaining performance obligations at June 30, 2023 as revenue over the next 12 months, and approximately 85% over the next 24 months. The remainder is expected to be recognized thereafter. Contract Balances The Company's performance obligations are typically satisfied over time and revenue is generally recognized using a cost-based input method. Fixed-price contracts are typically billed to the customer using milestone or fixed monthly payments, while cost-reimbursable-plus-fee and time-and-material contracts are typically billed to the customer at periodic intervals (e.g., monthly or weekly) as indicated by the terms of the contract. Disparities between the timing of revenue recognition and customer billings and cash collections result in net contract assets or liabilities being recognized at the end of each reporting period. Contract assets primarily consist of unbilled receivables typically resulting from revenue recognized exceeding the amount billed to the customer and right to payment is not just subject to the passage of time. Unbilled amounts represent revenues for which billings have not been presented to customers. These amounts are generally billed and collected within one year subject to various conditions including, without limitation, appropriated and available funding. Long-term unbilled receivables not anticipated to be billed and collected within one year, which are primarily related to retainage, holdbacks, and long-term rate settlements to be billed at contract closeout, are included in other long-term assets in the accompanying condensed consolidated balance sheets. Contract liabilities primarily consist of advance payments, billings in excess of costs incurred and deferred revenue. Contract assets and liabilities are reported on a net contract basis at the end of each reporting period. The Company maintains an allowance for credit losses to provide for an estimate of uncollectible receivables. Provision for credit losses recognized was not material for the three months ended June 30, 2023 and 2022. The following table summarizes the contract assets and liabilities, and accounts receivable, net of allowance recognized on the Company’s condensed consolidated balance sheets: June 30, March 31, Current assets Accounts receivable–billed $ 745,924 $ 551,666 Accounts receivable–unbilled (contract assets) 1,354,108 1,223,482 Allowance for credit losses (66) (318) Accounts receivable, net 2,099,966 1,774,830 Other long-term assets Accounts receivable–unbilled (contract assets) 59,733 59,455 Total accounts receivable, net $ 2,159,699 $ 1,834,285 Other current liabilities Advance payments, billings in excess of costs incurred and deferred revenue (contract liabilities) $ 13,635 $ 18,995 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The Company computes basic and diluted earnings per share amounts based on net income attributable to common stockholders for the periods presented. The Company uses the weighted average number of shares of common stock outstanding during the period to calculate basic earnings per share, or EPS. Diluted EPS adjusts the weighted average number of shares outstanding to include the dilutive effect of outstanding common stock options and other stock-based awards. The Company currently has outstanding shares of Class A Common Stock. Holders of unvested Class A Restricted Common Stock are entitled to participate in non-forfeitable dividends or other distributions. These unvested restricted shares participated in the Company's dividends declared and paid in the first quarter of fiscal 2024 and 2023. As such, EPS is calculated using the two-class method whereby earnings are reduced by distributed earnings as well as any available undistributed earnings allocable to holders of these unvested restricted shares. A reconciliation of the income used to compute basic and diluted EPS for the periods presented are as follows: Three Months Ended 2023 2022 Earnings for basic computations (1) $ 160,146 $ 137,369 Weighted-average of common stock shares outstanding for basic computations 131,031,979 132,371,487 Earnings for diluted computations (1) $ 160,149 $ 137,372 Dilutive stock options and restricted stock 498,654 639,601 Weighted-average of common stock shares outstanding for diluted computations 131,530,633 133,011,088 Earnings per share of common stock Basic $ 1.22 $ 1.04 Diluted $ 1.22 $ 1.03 (1) During the three months ended June 30, 2023 and 2022, approximately 1.0 million and 0.9 million shares of participating securities were paid dividends totaling $0.5 million and $0.4 million, respectively. There were undistributed earnings of $0.8 million and $0.5 million for the three months ended June 30, 2023 and 2022, respectively, allocated to the participating class of securities in both basic and diluted earnings per share of common stock. The allocated undistributed earnings and the dividends paid comprise the difference between net income attributable to common stockholders presented on the condensed consolidated statements of operations and earnings for basic and diluted computations for the three months ended June 30, 2023 and 2022. Anti-dilutive options excluded from the calculation of diluted EPS was not material during the periods presented. |
Acquisition, Goodwill and Intan
Acquisition, Goodwill and Intangible Assets | 3 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisition, Goodwill and Intangible Assets | Acquisition, Goodwill and Intangible Assets Acquisition On October 14, 2022, the Company completed the acquisition of EverWatch Corp. (“EverWatch”), a leading provider of advanced solutions to the defense and intelligence communities for approximately $445.1 million, net of post-closing adjustments and incurred transaction costs as part of the acquisition. The acquisition was funded with cash on hand. As a result of the transaction, EverWatch became a wholly owned subsidiary of Booz Allen Hamilton Inc. The Company recognized $108.6 million of intangible assets which consists primarily of contract assets and were valued using the excess earnings method discounted cash flow approach, incorporating Level 3 inputs as described under the fair value hierarchy of Topic 820. These unobservable inputs reflect the Company's own judgment about which assumptions market participants would use in pricing an asset on a non-recurring basis. The intangible assets are being amortized over the estimated useful life of 14 years. The goodwill of $330.9 million is primarily attributable to EverWatch's specialized workforce and the expected synergies between the Company and EverWatch, and is non-deductible for tax purposes. The following table summarizes the consideration and the allocation of the purchase price paid for EverWatch: Cash consideration (gross of cash acquired) $ 445,074 Purchase price allocation: Cash 4,779 Current assets 27,725 Operating lease right-of-use asset 7,894 Other long-term assets 5,078 Intangible assets 108,600 Deferred tax liabilities (20,394) Current liabilities (11,612) Operating lease liabilities - short-term (1,362) Operating lease liabilities - long-term (6,532) Total fair value of identifiable net assets acquired $ 114,176 Goodwill $ 330,898 The acquisition was accounted for under the acquisition method of accounting, which requires the total acquisition consideration to be allocated to the assets acquired and liabilities assumed based on an estimate of the acquisition date fair value, with the difference reflected in goodwill. As of June 30, 2023, the Company had completed the determination of fair values of the acquired assets and liabilities assumed. Pro forma results of operations for this acquisition are not presented because the acquisition is not material to the Company's consolidated results of operations. Goodwill As of June 30, 2023 and March 31, 2023, goodwill was $2,343.8 million and $2,338.4 million, respectively. The $5.4 million increase in the carrying amount of goodwill was attributable the Company's finalization of the accounting for the acquisition of EverWatch. Intangible Assets Intangible assets consisted of the following: June 30, 2023 March 31, 2023 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Amortizable intangible assets: Programs and contract assets, channel relationships, and other amortizable intangible assets $ 591,894 $ 186,096 $ 405,798 $ 599,794 $ 169,316 $ 430,478 Software 137,944 76,162 61,782 134,152 69,215 64,937 Total amortizable intangible assets $ 729,838 $ 262,258 $ 467,580 $ 733,946 $ 238,531 $ 495,415 Unamortizable intangible assets: Trade name $ 190,200 $ — $ 190,200 $ 190,200 $ — $ 190,200 Total $ 920,038 $ 262,258 $ 657,780 $ 924,146 $ 238,531 $ 685,615 The decrease in the gross carrying value of intangible assets was primarily attributable to a $7.9 million adjustment related to the Company's finalization of the accounting for the acquisition of EverWatch. |
Accounts Payable and Other Accr
Accounts Payable and Other Accrued Expenses | 3 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Accounts Payable and Other Accrued Expenses | Accounts Payable and Other Accrued Expenses Accounts payable and other accrued expenses consisted of the following: June 30, March 31, Vendor payables $ 572,355 $ 597,808 Accrued expenses 818,674 718,832 Total accounts payable and other accrued expenses $ 1,391,029 $ 1,316,640 Accrued expenses consisted primarily of the Company’s provision for claimed indirect costs (approximately $333.4 million and $326.7 million as of June 30, 2023 and March 31, 2023, respectively), and the reserve associated with the U.S. Department of Justice's investigation of the Company ($377.5 million as of June 30, 2023). See Note 15, “ Commitments and Contingencies, ” to the condensed consolidated financial statements for further discussion of these items. |
Accrued Compensation and Benefi
Accrued Compensation and Benefits | 3 Months Ended |
Jun. 30, 2023 | |
Compensation Related Costs [Abstract] | |
Accrued Compensation and Benefits | Accrued Compensation and Benefits Accrued compensation and benefits consisted of the following: June 30, March 31, Bonus $ 27,423 $ 120,023 Retirement 79,115 52,480 Vacation 218,914 203,627 Other 47,054 69,075 Total accrued compensation and benefits $ 372,506 $ 445,205 |
Debt
Debt | 3 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following: June 30, 2023 March 31, 2023 Interest Outstanding Interest Outstanding Term Loan A 6.45 % $ 1,619,063 5.97 % $ 1,629,375 Revolver 8.50 % 75,000 — % — Senior Notes due 2028 3.88 % 700,000 3.88 % 700,000 Senior Notes due 2029 4.00 % 500,000 4.00 % 500,000 Less: Unamortized debt issuance costs and discount on debt (16,480) (17,230) Total 2,877,583 2,812,145 Less: Current portion of long-term debt (116,250) (41,250) Long-term debt, net of current portion $ 2,761,333 $ 2,770,895 Credit Agreement Booz Allen Hamilton Inc. (“Booz Allen Hamilton”), Booz Allen Hamilton Investor Corporation (“Investor”), and certain wholly owned subsidiaries of Booz Allen Hamilton are parties to a Credit Agreement dated as of July 31, 2012, as amended (the “Credit Agreement”), with certain institutional lenders and Bank of America, N.A., as Administrative Agent, Collateral Agent and Issuing Lender. As of June 30, 2023, the Credit Agreement provided Booz Allen Hamilton with a $1,619.1 million Term Loan A (“Term Loan A”) and a $1.0 billion revolving credit facility (the “Revolving Credit Facility”), with a sub-limit for letters of credit of $200.0 million. As of June 30, 2023, the maturity date of the Term Loan A and the Revolving Commitments is September 7, 2027. Voluntary prepayments of the Term Loan A and the Revolving Loans are permitted at any time, in minimum principal amounts, without premium or penalty. Booz Allen Hamilton’s obligations and the guarantors’ guarantees under the Credit Agreement were secured by a first priority lien on substantially all of the assets (including capital stock of subsidiaries) of Booz Allen Hamilton, Investor and the subsidiary guarantors, subject to certain exceptions set forth in the Credit Agreement and related documentation; such security was released in connection with Booz Allen Hamilton obtaining investment grade ratings from both Moody's and S&P. On September 7, 2022 (the “Ninth Amendment Effective Date”), the Term Loan B loans under the Credit Agreement were prepaid in full. On July 27, 2023 (the “Tenth Amendment Effective Date”), Booz Allen Hamilton entered into a Tenth Amendment (the “Amendment”) to the Credit Agreement (as amended prior to the Tenth Amendment Effective Date, the “Existing Credit Agreement” and, as amended by the Amendment, the “Amended Credit Agreement”) with Bank of America, N.A., as administrative agent (in such capacity, the “Administrative Agent”), and the lenders and other financial institutions party thereto, in order to make permanent certain changes to the Existing Credit Agreement in connection with Booz Allen Hamilton obtaining investment grade ratings from both Moody's and S&P and prepaying the Term Loan B loans in full and to make certain additional changes in connection therewith, including, among other things, (i) removing the requirements for the obligations under the Amended Credit Agreement to be secured, (ii) removing the requirement for any subsidiary or other affiliate of Booz Allen Hamilton (other than the Company) to provide any guarantee of the obligations under the Amended Credit Agreement, and (iii) removing or modifying certain covenants applicable to Booz Allen Hamilton. Pursuant to the Amendment, all guarantees in respect of the Existing Credit Agreement have been released. On the Tenth Amendment Effective Date in connection with the Amendment, the Company entered into a Guarantee Agreement (the “Guarantee Agreement”) in favor of the Administrative Agent, pursuant to which the Company guarantees on an unsecured basis the obligations of Booz Allen Hamilton under the Amended Credit Agreement subject to certain conditions. Pursuant to the Amended Credit Agreement Booz Allen Hamilton has the option, though not any obligation, to join one or more of its domestic subsidiaries as a guarantor under the Guarantee Agreement. The Term Loan A amortizes in consecutive quarterly installments in an amount equal to (i) on the last business day of each full fiscal quarter that begins after the Ninth Amendment Effective Date but on or before the two year anniversary of the Ninth Amendment Effective Date, 0.625% of the stated principal amount of the Term Loan A and (ii) on the last business day of each full fiscal quarter that begins after the two year anniversary of the Ninth Amendment Effective Date but before the five year anniversary of the Ninth Amendment Effective Date, 1.25% of the stated principal amount of the Term Loan A. The remaining balance of the Term Loan A will be payable upon maturity. The rate at which the Term Loan A and the Revolving Loans bear interest is based, at Booz Allen Hamilton’s option, either on Term SOFR (subject to a 0.10% adjustment and a floor of zero) for the applicable interest period or a base rate (equal to the highest of (i) the administrative agent’s prime corporate rate, (ii) the overnight federal funds rate plus 0.50% and (iii) three-month Term SOFR (subject to a 0.10% adjustment and a floor of zero) plus 1.00%), in each case plus an applicable margin, payable at the end of the applicable interest period and in any event at least quarterly. The applicable margin for the Term Loan A and the Revolving Loans ranges from 1.00% to 2.00% for Term SOFR loans and zero to 1.00% for base rate loans, in each case based on the lower of (i) the applicable rate per annum determined pursuant to a consolidated total net leverage ratio grid and (ii) the applicable rate per annum determined pursuant to a ratings grid. Unused Revolving Commitments are subject to a quarterly fee ranging from 0.10% to 0.35% based on the lower of (i) the applicable fee rate per annum determined pursuant to a consolidated total net leverage ratio grid and (ii) the applicable fee rate per annum determined pursuant to a ratings grid. Booz Allen Hamilton has also agreed to pay customary letter of credit and agency fees. The Company occasionally borrows under the Revolving Credit Facility for our working capital needs. During the three months ended June 30, 2023, the Company accessed a total of $75.0 million of its $1.0 billion Revolving Credit Facility, which was repaid in the beginning of the second quarter of fiscal 2024. As of March 31, 2023, there was no outstanding balance on the Revolving Credit Facility. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. In addition, Booz Allen Hamilton is required to meet a financial covenant at each quarter end based on a consolidated net total leverage ratio. As of June 30, 2023 and March 31, 2023, Booz Allen Hamilton was in compliance with all financial covenants associated with its debt and debt-like instruments. In connection with Booz Allen Hamilton obtaining investment grade ratings from both Moody's and S&P, activities restricted by certain negative covenants are permitted subject to pro forma compliance with the financial covenants and no events of default having occurred and continuing. The following table summarizes interest payments made on the Company ’ s term loans: Three Months Ended 2023 2022 Term Loan A $ 26,091 $ 6,319 Term Loan B — 2,417 Total $ 26,091 $ 8,736 Borrowings under the Term Loan A, and if used, the Revolving Credit Facility, incur interest at a variable rate. As of June 30, 2023, Booz Allen Hamilton had interest rate swaps with an aggregate notional amount of $550.0 million. These instruments hedge the variability of cash outflows for interest payments on the Term Loans and Revolving Credit Facility. The Company's objectives in using cash flow hedges are to reduce volatility due to interest rate movements and to add stability to interest expense (See Note 9, “ Derivatives, ” to our condensed consolidated financial statements). Senior Notes For information on the terms, conditions, and restrictions of Booz Allen Hamilton's 4.000% Senior Notes due July 1, 2029 (the “Senior Notes due 2029”) and 3.875% Senior Notes due September 1, 2028 (the “Senior Notes due 2028”, and, together with the Senior Notes due 2029, the “Senior Notes”), see Note 10, “Debt,” of the Company’s consolidated financial statements included in the fiscal 2023 Form 10-K. In connection with Booz Allen Hamilton obtaining investment grade ratings from both Moody's and S&P, certain negative covenants in the indentures governing the Senior Notes were suspended, and guarantees of the Senior Notes were released. Interest Expense Interest on debt and debt-like instruments consisted of the following: Three Months Ended 2023 2022 (In thousands) Term Loan A Loans Interest Expense 26,103 6,359 Term Loan B Loans Interest Expense — 2,429 Interest on Revolving Credit Facility 17 — Senior Notes Interest Expense 11,781 11,781 Amortization of Debt Issuance Cost (DIC) and Original Issue Discount (OID) (1) 1,027 1,161 Interest Swap (Income) Expense (3,568) 2,831 Other 114 94 Total Interest Expense $ 35,474 $ 24,655 (1) DIC and OID on the Term Loans and senior notes are recorded as a reduction of long-term debt in the condensed consolidated balance sheet and are amortized ratably over the life of the related debt using the effective rate method. DIC on the Revolving Credit Facility is recorded as a long-term asset on the condensed consolidated balance sheet and amortized ratably over the term of the Revolving Credit Facility. |
Derivatives
Derivatives | 3 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives | Derivatives The Company utilizes derivative financial instruments to manage interest rate risk related to its variable rate debt. The Company’s objectives in using these interest rate derivatives, which were designated as cash flow hedges, are to manage its exposure to interest rate movements and reduce volatility of interest expense. The following table summarizes the material terms of the Company’s outstanding interest rate swap derivative contracts as of June 30, 2023: Effective Date Maturity Date Terms Notional Amount April 28, 2023 (1) June 30, 2024 Variable to Fixed $ 200,000 April 28, 2023 (1) June 30, 2025 Variable to Fixed 200,000 June 30, 2023 June 30, 2026 Variable to Fixed 150,000 Total $ 550,000 (1) Swap agreements were originally effective on April 30, 2019 and were amended during the first quarter of fiscal 2024 to transition from LIBOR-indexed to term SOFR-indexed periodic swap payments to align with interest payments in connection with its term SOFR-indexed debt. See Note 2, “Basis of Presentation,” to the condensed consolidated financial statements for further information on the transition. The floating-to-fixed interest rate swaps involve the exchange of variable interest amounts from a counterparty for the Company making fixed-rate interest payments over the life of the agreements without exchange of the underlying notional amount and effectively convert a portion of the variable rate debt into fixed interest rate debt. Derivative instruments are recorded in the condensed consolidated balance sheet on a gross basis at estimated fair value. As of June 30, 2023, $14.2 million and $4.3 million, were classified as other current assets and other long-term assets, respectively, on the condensed consolidated balance sheet. As of March 31, 2023, $11.2 million, $3.5 million and $1.4 million were classified as other current assets, other long-term assets and other long-term liabilities, respectively , on the condensed consolidated balance sheet. For interest rate swaps designated as cash flow hedges, the changes in the fair value of derivatives are recorded in Accumulated Other Comprehensive Income, or AOCI, net of taxes, and is subsequently reclassified into interest expense, net in the period that the hedged forecasted interest payments are made on the Company's variable-rate debt. The effect of derivative instruments on the accompanying condensed consolidated financial statements for the three months ended June 30, 2023 and 2022 is as follows: Three Months Ended Derivatives in Cash Flow Hedging Relationships Location of Gain or Loss Recognized in Income on Derivatives Amount of Pre-Tax Gain Recognized in AOCI on Derivatives Amount of Pre-Tax Gain or (Loss) Reclassified from AOCI into Income (1) 2023 2022 2023 2022 Interest rate swaps Interest income (expense) $ 8,599 $ 4,966 $ 3,568 $ (2,831) (1) The reclassifications from accumulated other comprehensive income to net income were reduced by tax (expense) benefit of ($0.9 million) and $0.7 million for the three months ended June 30, 2023 and 2022, respectively. Over the next 12 months, the Company estimates that $14.2 million will be reclassified as a decrease to interest expense. Cash flows associated with periodic settlements of interest rate swaps will be classified as operating activities in the condensed consolidated statement of cash flows. The Company is subject to counterparty risk in connection with its interest rate swap derivative contracts. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The Company mitigates this credit risk by entering into agreements with credit-worthy counterparties and regularly reviews its credit exposure and the creditworthiness of the counterparties. |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company’s effective income tax rates were 19.7% and 23.1% for the three months ended June 30, 2023 and 2022, respectively. Our effective tax rates for these periods differ from the federal statutory rate of 21.0% primarily due to the inclusion of state and foreign income taxes and permanent rate differences, which are predominantly related to certain executive compensation and the accrual of reserves for uncertain tax positions, offset by research and development tax credits, excess tax benefits for employee share-based compensation, and the Foreign Derived Intangible Income deduction. The Company is currently contesting tax assessments from the District of Columbia Office of Tax and Revenue (“DC OTR”) for fiscal years 2013 through 2015. The assessment relates to $11.7 million of taxes, net of federal tax benefits, as of June 30, 2023. During fiscal 2022, the Company received notification that the District of Columbia Office of Administrative Hearings ruled in favor of the DC OTR. The Company is currently appealing the decision with the District of Columbia Court of Appeals. The Company intends to continue to vigorously defend this matter. Oral arguments are expected to occur later in calendar year 2023. The Company has taken similar tax positions with respect to subsequent fiscal years. As of June 30, 2023, the Company does not maintain reserves for any uncertain tax positions related to the contested tax benefits related to 2013 through 2015, nor does it maintain reserves for the similar tax positions taken in the subsequent fiscal years. Management continues to evaluate this position quarterly to determine if a change in estimate is needed. If an adverse final resolution were to occur with respect to the contested tax benefits or the similar tax positions taken for fiscal years 2013 through 2020, the total potential future tax expense that would arise would be approximately $39.4 million to $59.7 million, net of federal benefit. During fiscal 2024, the Company expects to recognize an increase in reserves for uncertain tax positions related to an increase in research and development tax credits available, as in prior years, and the required capitalization of research and development expenditures, as in fiscal 2023. The unrecognized tax benefits related to the capitalization of research and development expenditures is expected to be offset by a deferred tax asset. Tax Receivables and Payables The Company has both income tax receivables and income tax payable on its condensed consolidated balance sheets as follows: June 30, March 31, Current income tax receivable — 23,633 Long term income tax receivable 167,821 167,821 Current income tax payable 47,984 14,523 Current income tax payable represents current liabilities associated with the Company’s current tax returns that the Company intends to file in fiscal 2024 and fiscal 2025. This amount is classified as other current liabilities on the condensed consolidated balance sheets. The long-term income tax receivable primarily represents the amended U.S. federal return refund claims for research and development tax credits and the carryback claim for the fiscal 2021 net operating loss which is classified as other long-term assets on the condensed consolidated balance sheet. The Company is currently under federal audit by the IRS for fiscal years 2016, 2017 and 2019-2021 and the receipt of our U.S federal return refund claims is contingent upon the completion of the ongoing IRS audits. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Jun. 30, 2023 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit PlansThe Company sponsors the Employees’ Capital Accumulation Plan, or ECAP, which is a qualified defined contribution plan that covers eligible U.S. and certain international employees. ECAP provides for distributions to participants by reason of retirement, death, disability, or termination of employment. The Company provides an annual matching contribution of up to 6% of eligible annual compensation. Total expenses recognized for matching contributions under ECAP were $54.3 million and $46.2 million for the three months ended June 30, 2023 and 2022, respectively.The Company also provides post-retirement healthcare benefits to former officers under a medical indemnity insurance plan, with premiums paid by the Company. As of June 30, 2023 and March 31, 2023, the unfunded status of the post-retirement medical plan was $105.7 million and $105.6 million, respectively, which is included in other long-term liabilities in the accompanying condensed consolidated balance sheets. Balance sheet and income statement impacts of any remaining benefit plans are immaterial for all periods presented in these condensed consolidated financial statements. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 3 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income | Accumulated Other Comprehensive Income All amounts recorded in other comprehensive income are related to the Company's post-retirement plans and interest rate swaps designated as cash flow hedges. The following table shows the changes in accumulated other comprehensive loss, net of tax: Three Months Ended Post-retirement plans Derivatives designated as cash flow hedges Totals Beginning of period $ 19,450 $ 9,883 $ 29,333 Other comprehensive income before reclassifications (1) — 6,356 6,356 Amounts reclassified from accumulated other comprehensive income (383) (2,615) (2,998) Net current-period other comprehensive (loss) income (383) 3,741 3,358 End of period $ 19,067 $ 13,624 $ 32,691 (1) Changes in other comprehensive income before reclassification for derivatives designated as cash flow hedges are recorded net of ta x expense of $2.2 million for the three months ended June 30, 2023. The tax impact of other comprehensive income before reclassification for post-retirement plans for the three months ended June 30, 2023 was immaterial. Three Months Ended Post-retirement plans Derivatives designated as cash flow hedges Totals Beginning of period $ 8,811 $ (226) $ 8,585 Other comprehensive income before reclassifications (2) — 3,668 3,668 Amounts reclassified from accumulated other comprehensive income (loss) (2) 2,091 2,089 Net current-period other comprehensive (loss) income (2) 5,759 5,757 End of period $ 8,809 $ 5,533 $ 14,342 (2) Changes in other comprehensive income before reclassification for derivatives designated as cash flow hedges are recorded net of tax expense of $1.3 million for the three months ended June 30, 2022. The tax impact of other |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation The following table summarizes stock-based compensation expense recognized in the condensed consolidated statements of operations: Three Months Ended 2023 2022 Cost of revenue $ 7,914 $ 7,482 General and administrative expenses 9,771 6,214 Total $ 17,685 $ 13,696 The following table summarizes the total stock-based compensation expense recognized in the condensed consolidated statements of operations by the following types of equity awards, including stock options, time-based and performance-based restricted stock awards. Compensation expense for performance-based awards is estimated at each reporting date using management's expectation of the probable achievement of the specified performance criteria of each tranche during the respective performance periods: Three Months Ended 2023 2022 Equity Incentive Plan Options $ 320 $ 552 Restricted Stock and other awards 17,365 13,144 Total $ 17,685 $ 13,696 As of June 30, 2023, there was $102.2 million of total unrecognized compensation cost related to unvested stock-based compensation agreements. The unrecognized compensation cost as of June 30, 2023 is expected to be fully amortized over the next 4.25 years. Absent the effect of forfeiture or acceleration of stock compensation cost for any departures of employees, the following table summarizes the unrecognized compensation cost and the weighted-average period the cost is expected to be amortized: June 30, 2023 Unrecognized Compensation Cost Weighted Average Remaining Period to be Recognized (in years) Equity Incentive Plan Options $ 2,834 3.39 Restricted Stock Awards 99,390 2.04 Total $ 102,224 Equity Incentive Plan As of June 30, 2023, there were 0.9 million EIP options outstanding, of which 0.3 million were unvested. During the three months ended June 30, 2023, the Board of Directors granted 0.8 million time-based and performance-based restricted stock units to certain employees of the Company. The aggregate value of these awards was $72.3 million based on the grant date fair value. The performance-based awards granted during the three months ended June 30, 2023 included additional market conditions related to the Company’s total shareholder return relative to its peer group over the three-year performance period. The Company recognizes compensation expense for these performance-based awards with market conditions based on the grant-date fair value calculated using a Monte Carlo model. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value MeasurementsThe accounting standard for fair value measurements establishes a three-tier value hierarchy, which prioritizes the inputs used in measuring fair value as follows: observable inputs such as quoted prices in active markets (Level 1); inputs other than quoted prices in active markets that are observable either directly or indirectly (Level 2); and unobservable inputs in which there is little or no market data, which requires the Company to develop its own assumptions (Level 3). A financial instrument's level within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The financial instruments measured at fair value in the accompanying condensed consolidated balance sheets consist of the following: Recurring Fair Value Measurements Level 1 Level 2 Level 3 Total Assets: Current derivative instruments (2) $ — $ 14,190 $ — $ 14,190 Long-term derivative instruments (2) — 4,281 — 4,281 Long-term deferred compensation plan asset (1) 27,405 — — 27,405 Total Assets $ 27,405 $ 18,471 $ — $ 45,876 Liabilities: Long-term deferred compensation plan liability (1) 27,405 — — 27,405 Total Liabilities $ 27,405 $ — $ — $ 27,405 Recurring Fair Value Measurements Level 1 Level 2 Level 3 Total Assets: Current derivative instruments (2) $ — $ 11,245 $ — $ 11,245 Long-term derivative instruments (2) — 3,530 — 3,530 Long-term deferred compensation plan asset (1) 20,090 — — 20,090 Total Assets $ 20,090 $ 14,775 $ — $ 34,865 Liabilities: Long-term derivative instruments (2) — 1,369 — 1,369 Long-term deferred compensation plan liability (1) 20,090 — — 20,090 Total Liabilities $ 20,090 $ 1,369 $ — $ 21,459 (1) Investments in this category consist primarily of mutual funds whose fair values are determined by reference to the quoted market price per unit in active markets multiplied by the number of units held without consideration of transaction costs. These assets and liabilities represent investments held in a consolidated trust to fund the Company's non-qualified deferred compensation plan and are recorded in other long-term assets and other long-term liabilities on our condensed consolidated balance sheets. (2) The Company’s interest rate swaps are considered over-the-counter derivatives and fair value is estimated based on the present value of future cash flows using a model-derived valuation that uses Level 2 observable inputs such as interest rate yield curves. See Note 9, “ Derivatives, ” to the condensed consolidated financial statements for further discussion on the Company’s derivative instruments designated as cash flow hedges. We did not have any material items that were measured at fair value on a non-recurring basis as of June 30, 2023, with the exception of the assets and liabilities acquired through our acquisitions (see Note 5, “Acquisition, Goodwill and Intangible Assets,” to the condensed consolidated financial statements). The fair value of the Company's cash and cash equivalents, which are Level 1 inputs, approximated its carrying value at June 30, 2023 and March 31, 2023. The Company’s cash and cash equivalent balances presented on the accompanying condensed consolidated balance sheets include $139.0 million and $237.8 million of marketable securities in money market funds as of June 30, 2023 and March 31, 2023, respectively. The Company's long-term debt is carried at amortized cost and is measured at fair value quarterly for disclosure purposes. The estimated fair values are determined using quoted prices or other market information obtained from recent trading activity of the debt in markets that are not active (Level 2 inputs). The fair value is corroborated by prices derived from the interest rate spreads of recently completed leveraged loan transactions of a similar credit profile, industry, and terms to that of the Company. The fair value of the Senior Notes due 2029 and the Senior Notes due 2028 are determined using quoted prices or other market information obtained from recent trading activity in the high-yield bond market (Level 2 inputs). The carrying amount and estimated fair value of long-term debt consists of the following: June 30, 2023 March 31, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Term Loan A $ 1,619,063 $ 1,588,706 $ 1,629,375 $ 1,600,861 3.88% Senior Notes due 2028 700,000 637,896 700,000 638,540 4.00% Senior Notes due 2029 500,000 450,255 500,000 451,930 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Letters of Credit and Third-Party Guarantees As of June 30, 2023 and March 31, 2023, the Company was contingently liable under open standby letters of credit and bank guarantees issued by our banks in favor of third parties that totaled $4.4 million and $6.1 million, respectively. These letters of credit and bank guarantees primarily support insurance and bid and performance obligations. At both June 30, 2023 and March 31, 2023, approximately $1.3 million of these instruments reduced the available borrowings under the Revolving Credit Facility. The remainder is guaranteed under a separate $7.5 million facility of which $4.4 million and $2.7 million were available to the Company at June 30, 2023 and March 31, 2023, respectively. Government Contracting Matters - Provision for Claimed Indirect Costs For the three months ended June 30, 2023 and 2022, approximately 98% and 97%, respectively, of the Company's revenue was generated from contracts where the end user was an agency or department of the U.S. government, including contracts where the Company performed either as a prime contractor or subcontractor, and regardless of the geographic location in which the work was performed. As noted in the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023, in the ordinary course of business, agencies of the U.S. government, including the Defense Contract Audit Agency (DCAA), audit the Company’s claimed indirect costs and conduct inquiries and investigations of our business practices with respect to government contracts to determine whether the Company's operations are conducted in accordance with these requirements and the terms of the relevant contracts. Management believes it has recorded the appropriate provision for claimed indirect costs for any audit, inquiry, or investigation of which it is aware that may be subject to any reductions and/or penalties. As of June 30, 2023 and March 31, 2023, the Company had recorded liabilities of approximately $333.4 million and $326.7 million, respectively, for estimated adjustments to claimed indirect costs based on its historical DCAA audit results, including the final resolution of such audits with the Defense Contract Management Agency, for claimed indirect costs incurred subsequent to fiscal 2011, and for contracts not yet closed that are subject to audit and final resolution. Litigation Our performance under U.S. government contracts and compliance with the terms of those contracts and applicable laws and regulations are subject to continuous audit, review, and investigation by the U.S. government, which may include such investigative techniques as subpoenas or civil investigative demands. Given the nature of our business, these audits, reviews, and investigations may focus, among other areas, on various aspects of procurement integrity, labor time reporting, sensitive and/or classified information access and control, executive compensation, and post government employment restrictions. We are not always aware of our status in such matters, but we are currently aware of certain pending audits and investigations involving labor time reporting, procurement integrity, and classified information access. In addition, from time to time, we are also involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with clients and contractors, intellectual property disputes, and other business matters. These legal proceedings seek various remedies, including claims for monetary damages in varying amounts, none of which are considered material, or are unspecified as to amount. Although the outcome of any such matter is inherently uncertain and may be materially adverse, based on current information, we do not expect any of the currently ongoing audits, reviews, investigations, or litigation to have a material adverse effect on our financial condition and results of operations. As of June 30, 2023 and March 31, 2023, there were no material amounts accrued in the condensed consolidated financial statements related to these proceedings. As previously disclosed in Note 20, “ Commitments and Contingencies, ” to the consolidated financial statements of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 2023, the Company is not able to reasonably estimate the expected amount or range of cost or any loss associated with these matters. On June 7, 2017, Booz Allen Hamilton was informed that the U.S. Department of Justice (“DOJ”) was conducting a civil and criminal investigation of the Company. In connection with the investigation, the DOJ requested information from the Company relating to certain elements of the Company’s cost accounting and indirect cost charging practices with the U.S. government. The investigation resulted from a qui tam lawsuit filed on or about September 26, 2016 in the United States District Court for the District of Columbia pursuant to the qui tam provisions of the civil False Claims Act (the “Civil Action”), which lawsuit was under judicial seal until July 21, 2023. After learning of the investigation, the Company engaged a law firm experienced in these matters to represent the Company in connection with this matter and respond to the government's requests. As is commonly the case with this type of matter, the Company was also contacted by other regulatory agencies and bodies, including the SEC, which notified the Company that it was conducting an investigation that the Company believes related to the matters that were also the subject of the DOJ's investigation. On May 12, 2021, the Company was informed that the DOJ closed its criminal investigation. On July 21, 2023, the Company entered into a Settlement Agreement (the “Settlement Agreement”) with the United States of America, acting through the DOJ and on behalf of the Department of Defense and Defense Contract Management Agency (collectively the “United States”), and Relator Sarah A. Feinberg, to resolve the DOJ’s civil investigation and the Civil Action. The Company entered into the Settlement Agreement to avoid the delay, uncertainty and expense of protracted litigation. The Settlement Agreement contains no admission of liability by the Company. Under the terms of the Settlement Agreement, the Company agreed to pay to the United States $377.5 million (the “Settlement Amount”), which the Company accrued as a reserve for this matter as of June 30, 2023. The Company paid the Settlement Amount with cash on hand and by drawing on its revolving credit facility. The Company had previously recorded a $350.0 million reserve relating to this investigation and had previously disclosed that it believed the range of reasonably possible loss in connection with the investigation to be between $350 million and $378 million. Following the United States’ receipt of the Settlement Amount, the Company was released from any civil or administrative monetary claims under the civil False Claims Act and other specified civil statutes and common law theories of liability for certain elements of the Company’s cost accounting and indirect cost charging practices from April 1, 2011 through March 31, 2021, and the claim brought in the Civil Action was dismissed with prejudice. On July 27, 2023, the Company was informed that the SEC concluded its investigation without recommending an enforcement action. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Jun. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and should be read in conjunction with the information contained in the Company's Annual Report on Form 10-K for the year ended March 31, 2023. The interim period unaudited condensed consolidated financial statements are presented as described below. Certain information and disclosures normally required for annual financial statements have been condensed or omitted pursuant to GAAP and SEC rules and regulations. In the opinion of management, all adjustments considered necessary for fair presentation of the results of the interim periods presented have been included. The Company’s fiscal year ends on March 31 and, unless otherwise noted, references to fiscal year or fiscal are for fiscal years ended March 31. The results of operations for the three months ended June 30, 2023 are not necessarily indicative of results to be expected for the full fiscal year. The condensed consolidated financial statements and notes of the Company include its subsidiaries, and other entities over which the Company has a controlling financial interest or where the Company is a primary beneficiary. The Company uses the equity method to account for investments in entities that it does not control if it is otherwise able to exert significant influence over the entities' operating and financial policies. Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost or cost net of other-than-temporary impairments. Certain amounts reported in the Company's prior fiscal year condensed consolidated financial statements have been reclassified to conform to the current fiscal year presentation. |
Accounting Estimates | Accounting Estimates 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 disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Areas of the financial statements where estimates may have the most significant effect include the provision for claimed indirect costs, valuation and expected lives of tangible and intangible assets, impairment of long-lived assets, accrued liabilities, revenue recognition, including the accrual of indirect costs, bonus and other incentive compensation, stock-based compensation, reserves for uncertain tax positions and valuation allowances on deferred tax assets, provisions for income taxes, postretirement obligations, collectability of receivables, and loss accruals for litigation. Actual results experienced by the Company may differ materially from management's estimates. |
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted | Recently Adopted Accounting Pronouncements In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“Topic 848”). The guidance is intended to provide relief for entities impacted by reference rate reform. Topic 848 contains provisions and optional accounting expedients designed to simplify requirements around the designation of hedging relationships, probability assessments of hedged forecasted transactions, and accounting for modifications of contracts that refer to the London Interbank Offered Rate (“LIBOR”) or other rates affected by reference rate reform. The guidance is elective and is effective on the date of issuance. Topic 848 is applied prospectively to contract modifications and as of the effective date for existing and new eligible hedging relationships. During the first quarter of fiscal 2024, the Company modified its interest rate swap agreements to transition from LIBOR-indexed to term SOFR-indexed periodic swap payments to align with interest payments in connection with its term SOFR-indexed debt. As such, the Company elected the optional expedients under Topic 848 which allows the cash flow hedge to continue being recognized under hedge accounting without de-designation upon a change in critical terms affected by the reference rate reform. The adoption of this guidance did not have a material impact on the condensed consolidated financial statements and disclosures. Recent Accounting Pronouncements Not Yet Adopted Accounting and reporting pronouncements effective after June 30, 2023 and issued through the filing date are not expected to have a material impact on the Company's condensed consolidated financial statements. |
Revenue | The Company's revenues from contracts with customers (clients) are derived from offerings that include management and technology consulting services, analytics, digital solutions, engineering, mission operations, and cyber services, substantially all with the U.S. government and its agencies and, to a lesser extent, subcontractors. The Company also serves foreign governments, as well as domestic and international commercial clients. The Company performs and generates revenue under three basic types of contracts, which include cost-reimbursable contracts, time-and-materials contracts, and fixed-price contracts. Contract Estimates We recognize revenue for many of our contracts under a contract cost-based input method and require an Estimate-at-Completion (“EAC”) process, which management uses to review and monitor the progress towards the completion of our performance obligations. Under this process, management considers various inputs and assumptions related to the EAC, including, but not limited to, progress towards completion, labor costs and productivity, material and subcontractor costs, and identified risks. Estimating the total cost at the completion of our performance obligations is subjective and requires management to make assumptions about future activity and cost drivers under the contract. Changes in these estimates can occur for a variety of reasons and, if significant, may impact the profitability of the Company’s contracts. Changes in estimates related to contracts accounted for under the EAC process are recognized on a cumulative catch-up basis in the period when such changes are determinable and reasonably estimable. If the estimate of contract profitability indicates an anticipated loss on a contract, the Company recognizes the total loss at the time it is identified. For each of the three months ended June 30, 2023 and 2022, the aggregate impact of adjustments in contract estimates was not material. Disaggregation of Revenue We disaggregate our revenue from contracts with customers by contract type and by customer type, as well as by whether the Company acts as prime contractor or sub-contractor, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables presents our revenue disaggregated by these categories. Revenue by Contract Type: We generate revenue under the following three basic types of contracts: • Cost-Reimbursable Contracts: Cost-reimbursable contracts provide for the payment of allowable costs incurred during performance of the contract, up to a ceiling based on the amount that has been funded, plus a fixed fee or award fee. • Time-and-Materials Contracts: Under contracts in this category, we are paid a fixed hourly rate for each direct labor hour expended, and we are reimbursed for billable material costs and billable out-of-pocket expenses inclusive of allocable indirect costs. We assume the financial risk on time-and-materials contracts because our costs of performance may exceed negotiated hourly rates. • Fixed-Price Contracts: Under a fixed-price contract, we agree to perform the specified work for a predetermined price. To the extent our actual direct and allocated indirect costs decrease or increase from the estimates upon which the price was negotiated, we will generate more or less profit, respectively, or could incur a loss. |
Revenue (Tables)
Revenue (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The table below presents the total revenue for each type of contract: Three Months Ended 2023 2022 Cost-reimbursable $ 1,450,184 55 % $ 1,190,828 53 % Time-and-materials 635,733 24 % 545,902 24 % Fixed-price 568,569 21 % 512,870 23 % Total Revenue $ 2,654,486 100 % $ 2,249,600 100 % Revenue by Customer Type: Three Months Ended 2023 2022 U.S. government (1) : Defense Clients $ 1,224,317 46 % $ 1,027,811 46 % Intelligence Clients 476,497 18 % 404,123 18 % Civil Clients 904,960 34 % 754,660 33 % Total U.S. government 2,605,774 98 % 2,186,594 97 % Global Commercial Clients 48,712 2 % 63,006 3 % Total Revenue $ 2,654,486 100 % $ 2,249,600 100 % (1) Certain contracts were reassigned between the various verticals of our U.S. government business shown in the table above to better align our operations to the customers we serve within each market. Prior year revenue by customer type has been recast to reflect the changes. Revenue by Whether the Company Acts as a Prime Contractor or a Subcontractor: Three Months Ended 2023 2022 Prime Contractor $ 2,517,558 95 % $ 2,131,295 95 % Subcontractor 136,928 5 % 118,305 5 % Total Revenue $ 2,654,486 100 % $ 2,249,600 100 % |
Schedule of Contract Assets and Liabilities | The following table summarizes the contract assets and liabilities, and accounts receivable, net of allowance recognized on the Company’s condensed consolidated balance sheets: June 30, March 31, Current assets Accounts receivable–billed $ 745,924 $ 551,666 Accounts receivable–unbilled (contract assets) 1,354,108 1,223,482 Allowance for credit losses (66) (318) Accounts receivable, net 2,099,966 1,774,830 Other long-term assets Accounts receivable–unbilled (contract assets) 59,733 59,455 Total accounts receivable, net $ 2,159,699 $ 1,834,285 Other current liabilities Advance payments, billings in excess of costs incurred and deferred revenue (contract liabilities) $ 13,635 $ 18,995 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Reconciliation of the Income Used to Compute Basic and Diluted EPS | A reconciliation of the income used to compute basic and diluted EPS for the periods presented are as follows: Three Months Ended 2023 2022 Earnings for basic computations (1) $ 160,146 $ 137,369 Weighted-average of common stock shares outstanding for basic computations 131,031,979 132,371,487 Earnings for diluted computations (1) $ 160,149 $ 137,372 Dilutive stock options and restricted stock 498,654 639,601 Weighted-average of common stock shares outstanding for diluted computations 131,530,633 133,011,088 Earnings per share of common stock Basic $ 1.22 $ 1.04 Diluted $ 1.22 $ 1.03 (1) During the three months ended June 30, 2023 and 2022, approximately 1.0 million and 0.9 million shares of participating securities were paid dividends totaling $0.5 million and $0.4 million, respectively. There were undistributed earnings of $0.8 million and $0.5 million for the three months ended June 30, 2023 and 2022, respectively, allocated to the participating class of securities in both basic and diluted earnings per share of common stock. The allocated undistributed earnings and the dividends paid comprise the difference between net income attributable to common stockholders presented on the condensed consolidated statements of operations and earnings for basic and diluted computations for the three months ended June 30, 2023 and 2022. Anti-dilutive options excluded from the calculation of diluted EPS was not material during the periods presented. |
Acquisition, Goodwill and Int_2
Acquisition, Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Business Acquisitions, by Acquisition | The following table summarizes the consideration and the allocation of the purchase price paid for EverWatch: Cash consideration (gross of cash acquired) $ 445,074 Purchase price allocation: Cash 4,779 Current assets 27,725 Operating lease right-of-use asset 7,894 Other long-term assets 5,078 Intangible assets 108,600 Deferred tax liabilities (20,394) Current liabilities (11,612) Operating lease liabilities - short-term (1,362) Operating lease liabilities - long-term (6,532) Total fair value of identifiable net assets acquired $ 114,176 Goodwill $ 330,898 |
Schedule of Intangible Assets | Intangible assets consisted of the following: June 30, 2023 March 31, 2023 Gross Carrying Value Accumulated Amortization Net Carrying Value Gross Carrying Value Accumulated Amortization Net Carrying Value Amortizable intangible assets: Programs and contract assets, channel relationships, and other amortizable intangible assets $ 591,894 $ 186,096 $ 405,798 $ 599,794 $ 169,316 $ 430,478 Software 137,944 76,162 61,782 134,152 69,215 64,937 Total amortizable intangible assets $ 729,838 $ 262,258 $ 467,580 $ 733,946 $ 238,531 $ 495,415 Unamortizable intangible assets: Trade name $ 190,200 $ — $ 190,200 $ 190,200 $ — $ 190,200 Total $ 920,038 $ 262,258 $ 657,780 $ 924,146 $ 238,531 $ 685,615 |
Accounts Payable and Other Ac_2
Accounts Payable and Other Accrued Expenses (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Payables and Accruals [Abstract] | |
Schedule of Accounts Payable and Accrued Liabilities | Accounts payable and other accrued expenses consisted of the following: June 30, March 31, Vendor payables $ 572,355 $ 597,808 Accrued expenses 818,674 718,832 Total accounts payable and other accrued expenses $ 1,391,029 $ 1,316,640 |
Accrued Compensation and Bene_2
Accrued Compensation and Benefits (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Compensation Related Costs [Abstract] | |
Schedule of Accrued Compensation and Benefits | Accrued compensation and benefits consisted of the following: June 30, March 31, Bonus $ 27,423 $ 120,023 Retirement 79,115 52,480 Vacation 218,914 203,627 Other 47,054 69,075 Total accrued compensation and benefits $ 372,506 $ 445,205 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Debt consisted of the following: June 30, 2023 March 31, 2023 Interest Outstanding Interest Outstanding Term Loan A 6.45 % $ 1,619,063 5.97 % $ 1,629,375 Revolver 8.50 % 75,000 — % — Senior Notes due 2028 3.88 % 700,000 3.88 % 700,000 Senior Notes due 2029 4.00 % 500,000 4.00 % 500,000 Less: Unamortized debt issuance costs and discount on debt (16,480) (17,230) Total 2,877,583 2,812,145 Less: Current portion of long-term debt (116,250) (41,250) Long-term debt, net of current portion $ 2,761,333 $ 2,770,895 The following table summarizes interest payments made on the Company ’ s term loans: Three Months Ended 2023 2022 Term Loan A $ 26,091 $ 6,319 Term Loan B — 2,417 Total $ 26,091 $ 8,736 |
Schedule of Interest Expense | Interest on debt and debt-like instruments consisted of the following: Three Months Ended 2023 2022 (In thousands) Term Loan A Loans Interest Expense 26,103 6,359 Term Loan B Loans Interest Expense — 2,429 Interest on Revolving Credit Facility 17 — Senior Notes Interest Expense 11,781 11,781 Amortization of Debt Issuance Cost (DIC) and Original Issue Discount (OID) (1) 1,027 1,161 Interest Swap (Income) Expense (3,568) 2,831 Other 114 94 Total Interest Expense $ 35,474 $ 24,655 (1) DIC and OID on the Term Loans and senior notes are recorded as a reduction of long-term debt in the condensed consolidated balance sheet and are amortized ratably over the life of the related debt using the effective rate method. DIC on the Revolving Credit Facility is recorded as a long-term asset on the condensed consolidated balance sheet and amortized ratably over the term of the Revolving Credit Facility. |
Derivatives (Tables)
Derivatives (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Effect of Derivative Instruments | The following table summarizes the material terms of the Company’s outstanding interest rate swap derivative contracts as of June 30, 2023: Effective Date Maturity Date Terms Notional Amount April 28, 2023 (1) June 30, 2024 Variable to Fixed $ 200,000 April 28, 2023 (1) June 30, 2025 Variable to Fixed 200,000 June 30, 2023 June 30, 2026 Variable to Fixed 150,000 Total $ 550,000 (1) Swap agreements were originally effective on April 30, 2019 and were amended during the first quarter of fiscal 2024 to transition from LIBOR-indexed to term SOFR-indexed periodic swap payments to align with interest payments in connection with its term SOFR-indexed debt. See Note 2, “Basis of Presentation,” to the condensed consolidated financial statements for further information on the transition. three months ended June 30, 2023 and 2022 is as follows: Three Months Ended Derivatives in Cash Flow Hedging Relationships Location of Gain or Loss Recognized in Income on Derivatives Amount of Pre-Tax Gain Recognized in AOCI on Derivatives Amount of Pre-Tax Gain or (Loss) Reclassified from AOCI into Income (1) 2023 2022 2023 2022 Interest rate swaps Interest income (expense) $ 8,599 $ 4,966 $ 3,568 $ (2,831) (1) The reclassifications from accumulated other comprehensive income to net income were reduced by tax (expense) benefit of ($0.9 million) and $0.7 million for the three months ended June 30, 2023 and 2022, respectively. |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Receivables and Payables | The Company has both income tax receivables and income tax payable on its condensed consolidated balance sheets as follows: June 30, March 31, Current income tax receivable — 23,633 Long term income tax receivable 167,821 167,821 Current income tax payable 47,984 14,523 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income | The following table shows the changes in accumulated other comprehensive loss, net of tax: Three Months Ended Post-retirement plans Derivatives designated as cash flow hedges Totals Beginning of period $ 19,450 $ 9,883 $ 29,333 Other comprehensive income before reclassifications (1) — 6,356 6,356 Amounts reclassified from accumulated other comprehensive income (383) (2,615) (2,998) Net current-period other comprehensive (loss) income (383) 3,741 3,358 End of period $ 19,067 $ 13,624 $ 32,691 (1) Changes in other comprehensive income before reclassification for derivatives designated as cash flow hedges are recorded net of ta x expense of $2.2 million for the three months ended June 30, 2023. The tax impact of other comprehensive income before reclassification for post-retirement plans for the three months ended June 30, 2023 was immaterial. Three Months Ended Post-retirement plans Derivatives designated as cash flow hedges Totals Beginning of period $ 8,811 $ (226) $ 8,585 Other comprehensive income before reclassifications (2) — 3,668 3,668 Amounts reclassified from accumulated other comprehensive income (loss) (2) 2,091 2,089 Net current-period other comprehensive (loss) income (2) 5,759 5,757 End of period $ 8,809 $ 5,533 $ 14,342 (2) Changes in other comprehensive income before reclassification for derivatives designated as cash flow hedges are recorded net of tax expense of $1.3 million for the three months ended June 30, 2022. The tax impact of other |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense Recognized in the Condensed Consolidated Statements of Operations | The following table summarizes stock-based compensation expense recognized in the condensed consolidated statements of operations: Three Months Ended 2023 2022 Cost of revenue $ 7,914 $ 7,482 General and administrative expenses 9,771 6,214 Total $ 17,685 $ 13,696 The following table summarizes the total stock-based compensation expense recognized in the condensed consolidated statements of operations by the following types of equity awards, including stock options, time-based and performance-based restricted stock awards. Compensation expense for performance-based awards is estimated at each reporting date using management's expectation of the probable achievement of the specified performance criteria of each tranche during the respective performance periods: Three Months Ended 2023 2022 Equity Incentive Plan Options $ 320 $ 552 Restricted Stock and other awards 17,365 13,144 Total $ 17,685 $ 13,696 |
Schedule of Unrecognized Compensation Cost | Absent the effect of forfeiture or acceleration of stock compensation cost for any departures of employees, the following table summarizes the unrecognized compensation cost and the weighted-average period the cost is expected to be amortized: June 30, 2023 Unrecognized Compensation Cost Weighted Average Remaining Period to be Recognized (in years) Equity Incentive Plan Options $ 2,834 3.39 Restricted Stock Awards 99,390 2.04 Total $ 102,224 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Jun. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of Recurring Fair Value Measurements | The financial instruments measured at fair value in the accompanying condensed consolidated balance sheets consist of the following: Recurring Fair Value Measurements Level 1 Level 2 Level 3 Total Assets: Current derivative instruments (2) $ — $ 14,190 $ — $ 14,190 Long-term derivative instruments (2) — 4,281 — 4,281 Long-term deferred compensation plan asset (1) 27,405 — — 27,405 Total Assets $ 27,405 $ 18,471 $ — $ 45,876 Liabilities: Long-term deferred compensation plan liability (1) 27,405 — — 27,405 Total Liabilities $ 27,405 $ — $ — $ 27,405 Recurring Fair Value Measurements Level 1 Level 2 Level 3 Total Assets: Current derivative instruments (2) $ — $ 11,245 $ — $ 11,245 Long-term derivative instruments (2) — 3,530 — 3,530 Long-term deferred compensation plan asset (1) 20,090 — — 20,090 Total Assets $ 20,090 $ 14,775 $ — $ 34,865 Liabilities: Long-term derivative instruments (2) — 1,369 — 1,369 Long-term deferred compensation plan liability (1) 20,090 — — 20,090 Total Liabilities $ 20,090 $ 1,369 $ — $ 21,459 (1) Investments in this category consist primarily of mutual funds whose fair values are determined by reference to the quoted market price per unit in active markets multiplied by the number of units held without consideration of transaction costs. These assets and liabilities represent investments held in a consolidated trust to fund the Company's non-qualified deferred compensation plan and are recorded in other long-term assets and other long-term liabilities on our condensed consolidated balance sheets. (2) The Company’s interest rate swaps are considered over-the-counter derivatives and fair value is estimated based on the present value of future cash flows using a model-derived valuation that uses Level 2 observable inputs such as interest rate yield curves. See Note 9, “ Derivatives, ” to the condensed consolidated financial statements for further discussion on the Company’s derivative instruments designated as cash flow hedges. |
Schedule of Carrying Values and Estimated Fair Values of Debt Instruments | The carrying amount and estimated fair value of long-term debt consists of the following: June 30, 2023 March 31, 2023 Carrying Amount Estimated Fair Value Carrying Amount Estimated Fair Value Term Loan A $ 1,619,063 $ 1,588,706 $ 1,629,375 $ 1,600,861 3.88% Senior Notes due 2028 700,000 637,896 700,000 638,540 4.00% Senior Notes due 2029 500,000 450,255 500,000 451,930 |
Business Overview (Details)
Business Overview (Details) | 3 Months Ended |
Jun. 30, 2023 employee segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of operating segments | 1 |
Number of reportable segments | 1 |
Number of employees | employee | 32,600 |
Revenue - Schedule of Disaggreg
Revenue - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 2,654,486 | $ 2,249,600 |
Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 100% | 100% |
Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 100% | 100% |
Revenue from Contract with Customer Benchmark | Contractor Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 100% | 100% |
Prime Contractor | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 2,517,558 | $ 2,131,295 |
Prime Contractor | Revenue from Contract with Customer Benchmark | Contractor Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 95% | 95% |
Subcontractor | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 136,928 | $ 118,305 |
Subcontractor | Revenue from Contract with Customer Benchmark | Contractor Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 5% | 5% |
Total U.S. government | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 2,605,774 | $ 2,186,594 |
Total U.S. government | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 98% | 97% |
Defense Clients | Total U.S. government | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,224,317 | $ 1,027,811 |
Defense Clients | Total U.S. government | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 46% | 46% |
Intelligence Clients | Total U.S. government | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 476,497 | $ 404,123 |
Intelligence Clients | Total U.S. government | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 18% | 18% |
Civil Clients | Total U.S. government | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 904,960 | $ 754,660 |
Civil Clients | Total U.S. government | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 34% | 33% |
Global Commercial Clients | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 48,712 | $ 63,006 |
Global Commercial Clients | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 2% | 3% |
Cost-reimbursable | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 1,450,184 | $ 1,190,828 |
Cost-reimbursable | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 55% | 53% |
Time-and-materials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 635,733 | $ 545,902 |
Time-and-materials | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 24% | 24% |
Fixed-price | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 568,569 | $ 512,870 |
Fixed-price | Revenue from Contract with Customer Benchmark | Product Concentration Risk | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk (as a percent) | 21% | 23% |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |||
Revenue, amount of remaining performance obligation | $ 8,000 | $ 7,900 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Contract with customer, liability, revenue recognized | $ 14.4 | $ 16.3 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-07-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation (as a percent) | 75% | ||
Remaining performance obligation, expected timing, period | 12 months | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-04-01 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |||
Remaining performance obligation (as a percent) | 85% | ||
Remaining performance obligation, expected timing, period | 24 months |
Revenue - Schedule of Contract
Revenue - Schedule of Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Current assets | ||
Accounts receivable–billed | $ 745,924 | $ 551,666 |
Accounts receivable–unbilled (contract assets) | 1,354,108 | 1,223,482 |
Allowance for credit losses | (66) | (318) |
Accounts receivable, net | 2,099,966 | 1,774,830 |
Other long-term assets | ||
Accounts receivable–unbilled (contract assets) | 59,733 | 59,455 |
Total accounts receivable, net | 2,159,699 | 1,834,285 |
Other current liabilities | ||
Advance payments, billings in excess of costs incurred and deferred revenue (contract liabilities) | $ 13,635 | $ 18,995 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Earnings Per Share, Basic and Diluted, by Common Class, Including Two Class Method [Line Items] | ||
Earnings for basic computations | $ 160,146 | $ 137,369 |
Weighted-average of common stock shares outstanding for basic computations (in shares) | 131,031,979 | 132,371,487 |
Earnings for diluted computations | $ 160,149 | $ 137,372 |
Dilutive stock options and restricted stock (in shares) | 498,654 | 639,601 |
Weighted-average of common stock shares outstanding for diluted computations (in shares) | 131,530,633 | 133,011,088 |
Earnings per share of common stock | ||
Basic (in dollars per share) | $ 1.22 | $ 1.04 |
Diluted (in dollars per share) | $ 1.22 | $ 1.03 |
Unvested shares participating in the payment of the company's dividends declared (in shares) | 1,000,000 | 900,000 |
Dividends paid | $ 63,034 | $ 58,899 |
Undistributed earnings allocated to participating securities, basic | 800 | 500 |
Undistributed earnings allocated to participating securities, diluted | 800 | 500 |
Restricted Stock | ||
Earnings per share of common stock | ||
Dividends paid | $ 500 | $ 400 |
Acquisition, Goodwill and Int_3
Acquisition, Goodwill and Intangible Assets - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Oct. 14, 2022 | Jun. 30, 2023 | Mar. 31, 2023 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 2,343,789 | $ 2,338,399 | |
EverWatch | |||
Business Acquisition [Line Items] | |||
Cash consideration (gross of cash acquired) | $ 445,074 | ||
Intangible assets | $ 108,600 | ||
Useful life (in years) | 14 years | ||
Goodwill | $ 330,898 | ||
Increase in goodwill | 5,400 | ||
Initial accounting incomplete, adjustment, intangibles | $ (7,900) |
Acquisition, Goodwill and Int_4
Acquisition, Goodwill and Intangible Assets - Schedule of Business Acquisitions, by Acquisition (Details) - USD ($) $ in Thousands | Oct. 14, 2022 | Jun. 30, 2023 | Mar. 31, 2023 |
Purchase price allocation: | |||
Goodwill | $ 2,343,789 | $ 2,338,399 | |
EverWatch | |||
Business Acquisition [Line Items] | |||
Cash consideration (gross of cash acquired) | $ 445,074 | ||
Purchase price allocation: | |||
Cash | 4,779 | ||
Current assets | 27,725 | ||
Operating lease right-of-use asset | 7,894 | ||
Other long-term assets | 5,078 | ||
Intangible assets | 108,600 | ||
Deferred tax liabilities | (20,394) | ||
Current liabilities | (11,612) | ||
Operating lease liabilities - short-term | (1,362) | ||
Operating lease liabilities - long-term | (6,532) | ||
Total fair value of identifiable net assets acquired | 114,176 | ||
Goodwill | $ 330,898 |
Acquisition, Goodwill and Int_5
Acquisition, Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Value | $ 729,838 | $ 733,946 |
Accumulated Amortization | 262,258 | 238,531 |
Net Carrying Value | 467,580 | 495,415 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Intangible assets, gross | 920,038 | 924,146 |
Intangible assets, net | 657,780 | 685,615 |
Trade name | ||
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Unamortizable intangible assets | 190,200 | 190,200 |
Programs and contract assets, channel relationships, and other amortizable intangible assets | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Value | 591,894 | 599,794 |
Accumulated Amortization | 186,096 | 169,316 |
Net Carrying Value | 405,798 | 430,478 |
Software | ||
Finite-Lived Intangible Assets, Net [Abstract] | ||
Gross Carrying Value | 137,944 | 134,152 |
Accumulated Amortization | 76,162 | 69,215 |
Net Carrying Value | $ 61,782 | $ 64,937 |
Accounts Payable and Other Ac_3
Accounts Payable and Other Accrued Expenses (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Payables and Accruals [Abstract] | ||
Vendor payables | $ 572,355 | $ 597,808 |
Accrued expenses | 818,674 | 718,832 |
Total accounts payable and other accrued expenses | 1,391,029 | 1,316,640 |
Unfavorable Regulatory Action | Claimed Indirect Costs | ||
Loss Contingencies [Line Items] | ||
Provision for claimed indirect costs | 333,400 | $ 326,700 |
Unfavorable Regulatory Action | U.S. Department of Justice | ||
Loss Contingencies [Line Items] | ||
Provision for claimed indirect costs | $ 377,500 |
Accrued Compensation and Bene_3
Accrued Compensation and Benefits (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Compensation Related Costs [Abstract] | ||
Bonus | $ 27,423 | $ 120,023 |
Retirement | 79,115 | 52,480 |
Vacation | 218,914 | 203,627 |
Other | 47,054 | 69,075 |
Total accrued compensation and benefits | $ 372,506 | $ 445,205 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Long-term Debt, Current and Noncurrent [Abstract] | ||
Less: Unamortized debt issuance costs and discount on debt | $ (16,480) | $ (17,230) |
Total | 2,877,583 | 2,812,145 |
Less: Current portion of long-term debt | (116,250) | (41,250) |
Long-term debt, net of current portion | $ 2,761,333 | $ 2,770,895 |
Revolver | ||
Long-term Debt, Current and Noncurrent [Abstract] | ||
Interest Rate | 8.50% | 0% |
Outstanding Balance | $ 75,000 | $ 0 |
Term Loans | Term Loan A | ||
Long-term Debt, Current and Noncurrent [Abstract] | ||
Interest Rate | 6.45% | 5.97% |
Outstanding Balance | $ 1,619,063 | $ 1,629,375 |
Senior Notes | Senior Notes due 2028 | ||
Long-term Debt, Current and Noncurrent [Abstract] | ||
Interest Rate | 3.88% | 3.88% |
Outstanding Balance | $ 700,000 | $ 700,000 |
Senior Notes | Senior Notes due 2029 | ||
Long-term Debt, Current and Noncurrent [Abstract] | ||
Interest Rate | 4% | 4% |
Outstanding Balance | $ 500,000 | $ 500,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Sep. 07, 2022 | Jun. 30, 2023 | Mar. 31, 2023 |
Cash Flow Hedging | Designated as Hedging Instrument | Interest Rate Swap | |||
Debt Instrument [Line Items] | |||
Notional amount of interest rate swaps | $ 550,000,000 | ||
Revolving Commitments | Minimum | |||
Debt Instrument [Line Items] | |||
Commitment fee (as a percent) | 0.10% | ||
Revolving Commitments | Maximum | |||
Debt Instrument [Line Items] | |||
Commitment fee (as a percent) | 0.35% | ||
Revolver | |||
Debt Instrument [Line Items] | |||
Long-term debt outstanding | 75,000,000 | $ 0 | |
Term Loans | SOFR | |||
Debt Instrument [Line Items] | |||
Variable rate, adjustment | 0.10% | ||
Variable rate, floor | 0% | ||
Term Loans | SOFR | Minimum | |||
Debt Instrument [Line Items] | |||
Long-term debt, basis spread on variable rate | 1% | ||
Term Loans | SOFR | Maximum | |||
Debt Instrument [Line Items] | |||
Long-term debt, basis spread on variable rate | 2% | ||
Term Loans | Overnight Federal Funds Rate | |||
Debt Instrument [Line Items] | |||
Long-term debt, basis spread on variable rate | 0.50% | ||
Term Loans | Three-month Term SOFR | |||
Debt Instrument [Line Items] | |||
Variable rate, adjustment | 0.10% | ||
Variable rate, floor | 0% | ||
Long-term debt, basis spread on variable rate | 1% | ||
Term Loans | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Revolving credit facility, amount outstanding | 0 | ||
Term Loans | Letter of Credit | |||
Debt Instrument [Line Items] | |||
Revolving credit facility, maximum borrowing capacity | 200,000,000 | ||
Term Loans | Term Loan A | |||
Debt Instrument [Line Items] | |||
Revolving credit facility, maximum borrowing capacity | 1,619,100,000 | ||
Long-term debt outstanding | 1,619,063,000 | 1,629,375,000 | |
Term Loans | Term Loan A | Base Rate | Minimum | |||
Debt Instrument [Line Items] | |||
Long-term debt, basis spread on variable rate | 0% | ||
Term Loans | Term Loan A | Base Rate | Maximum | |||
Debt Instrument [Line Items] | |||
Long-term debt, basis spread on variable rate | 1% | ||
Term Loans | Term Loan A | Before Two Year Anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument (as a percent) | 0.625% | ||
Term Loans | Term Loan A | After Two Year But Before Five Year Anniversary | |||
Debt Instrument [Line Items] | |||
Debt instrument (as a percent) | 1.25% | ||
Term Loans | Secured Credit Facility | Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Revolving credit facility, maximum borrowing capacity | $ 1,000,000,000 | ||
Senior Notes | Senior Notes due 2029 | |||
Debt Instrument [Line Items] | |||
Debt instrument (as a percent) | 4% | ||
Long-term debt outstanding | $ 500,000,000 | 500,000,000 | |
Senior Notes | Senior Notes due 2028 | |||
Debt Instrument [Line Items] | |||
Debt instrument (as a percent) | 3.875% | ||
Long-term debt outstanding | $ 700,000,000 | $ 700,000,000 |
Debt - Schedule of Interest Pay
Debt - Schedule of Interest Payment (Details) - Term Loans - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||
Interest payments | $ 26,091 | $ 8,736 |
Term Loan A | ||
Debt Instrument [Line Items] | ||
Interest payments | 26,091 | 6,319 |
Term Loan B | ||
Debt Instrument [Line Items] | ||
Interest payments | $ 0 | $ 2,417 |
Debt - Schedule of Interest Exp
Debt - Schedule of Interest Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Debt Instrument [Line Items] | ||
Amortization of Debt Issuance Cost (DIC) and Original Issue Discount (OID) | $ 1,027 | $ 1,161 |
Interest Swap (Income) Expense | (3,568) | 2,831 |
Other | 114 | 94 |
Total Interest Expense | 35,474 | 24,655 |
Term Loans | Term Loan A | ||
Debt Instrument [Line Items] | ||
Interest expense on debt | 26,103 | 6,359 |
Term Loans | Term Loan B | ||
Debt Instrument [Line Items] | ||
Interest expense on debt | 0 | 2,429 |
Revolving Credit Facility | ||
Debt Instrument [Line Items] | ||
Interest expense on debt | 17 | 0 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Interest expense on debt | $ 11,781 | $ 11,781 |
Derivatives - Schedule of Outst
Derivatives - Schedule of Outstanding Interest Rate Swap Derivative Contracts (Details) - Cash Flow Hedging - Designated as Hedging Instrument $ in Thousands | Jun. 30, 2023 USD ($) |
Interest Rate Swap 1 | |
Derivative [Line Items] | |
Notional Amount | $ 200,000 |
Interest Rate Swap 2 | |
Derivative [Line Items] | |
Notional Amount | 200,000 |
Interest Rate Swap 3 | |
Derivative [Line Items] | |
Notional Amount | 150,000 |
Interest Rate Swap | |
Derivative [Line Items] | |
Notional Amount | $ 550,000 |
Derivatives - Narrative (Detail
Derivatives - Narrative (Details) - USD ($) $ in Millions | Jun. 30, 2023 | Mar. 31, 2023 |
Derivative [Line Items] | ||
Estimate of amount to be reclassified over the next 12 months | $ 14.2 | |
Other Current Assets | ||
Derivative [Line Items] | ||
Derivative asset | 14.2 | $ 11.2 |
Other Noncurrent Assets | ||
Derivative [Line Items] | ||
Derivative asset | $ 4.3 | 3.5 |
Other Noncurrent Liabilities | ||
Derivative [Line Items] | ||
Derivative liability | $ 1.4 |
Derivatives - Schedule of Effec
Derivatives - Schedule of Effect of Derivative Instruments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Accumulated Gain (Loss) | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Reclassification from AOCI, current period, tax | $ 900 | $ (700) |
Designated as Hedging Instrument | Cash Flow Hedging | Interest Rate Swap | ||
Derivative Instruments and Hedging Activities Disclosures [Line Items] | ||
Amount of Pre-Tax Gain Recognized in AOCI on Derivatives | 8,599 | 4,966 |
Amount of Pre-Tax Gain or (Loss) Reclassified from AOCI into Income | $ 3,568 | $ (2,831) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Operating Loss Carryforwards [Line Items] | ||
Effective income tax rate (as a percent) | 19.70% | 23.10% |
Minimum | ||
Operating Loss Carryforwards [Line Items] | ||
Potential future tax expense that would arise | $ 39.4 | |
Maximum | ||
Operating Loss Carryforwards [Line Items] | ||
Potential future tax expense that would arise | 59.7 | |
Tax Years 2013-2015 | ||
Operating Loss Carryforwards [Line Items] | ||
Income tax assessments | $ 11.7 |
Income Taxes - Schedule of Comp
Income Taxes - Schedule of Components of Income Tax Receivables and Payables (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Income Tax Disclosure [Abstract] | ||
Current income tax receivable | $ 0 | $ 23,633 |
Long term income tax receivable | 167,821 | 167,821 |
Current income tax payable | $ 47,984 | $ 14,523 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer matching contribution, percent of match (as a percent) | 6% | ||
Employees’ capital accumulation plan, total expense recognized | $ 54.3 | $ 46.2 | |
Officer Medical Plan | Other Postretirement Benefits Plan | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Defined benefit plan, unfunded status of plan | $ 105.7 | $ 105.6 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning of period | $ 992,002 | $ 1,046,721 |
Other comprehensive income before reclassifications | 6,356 | 3,668 |
Amounts reclassified from accumulated other comprehensive income (loss) | (2,998) | 2,089 |
Total other comprehensive income, net of tax | 3,358 | 5,757 |
End of period | 1,017,071 | 1,099,124 |
Totals | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning of period | 29,333 | 8,585 |
Total other comprehensive income, net of tax | 3,358 | 5,757 |
End of period | 32,691 | 14,342 |
Post-retirement plans | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning of period | 19,450 | 8,811 |
Other comprehensive income before reclassifications | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income (loss) | (383) | (2) |
Total other comprehensive income, net of tax | (383) | (2) |
End of period | 19,067 | 8,809 |
Derivatives designated as cash flow hedges | ||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||
Beginning of period | 9,883 | (226) |
Other comprehensive income before reclassifications | 6,356 | 3,668 |
Amounts reclassified from accumulated other comprehensive income (loss) | (2,615) | 2,091 |
Total other comprehensive income, net of tax | 3,741 | 5,759 |
End of period | 13,624 | 5,533 |
Other comprehensive income (loss) before reclassifications, tax expense | $ 2,200 | $ 1,300 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense Recognized in the Condensed Consolidated Statements of Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Jun. 30, 2023 | Jun. 30, 2022 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 17,685 | $ 13,696 |
Equity Incentive Plan Options | Equity Incentive Plan Options | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 320 | 552 |
Restricted Stock and other awards | Restricted Stock and other awards | Class A Common Stock | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 17,365 | 13,144 |
Cost of revenue | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 7,914 | 7,482 |
General and administrative expenses | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 9,771 | $ 6,214 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Unrecognized Compensation Cost (Details) $ in Thousands | 3 Months Ended |
Jun. 30, 2023 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 102,224 |
Weighted Average Remaining Period to be Recognized (in years) | 4 years 3 months |
Equity Incentive Plan Options | Equity Incentive Plan Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 2,834 |
Weighted Average Remaining Period to be Recognized (in years) | 3 years 4 months 20 days |
Restricted Stock and other awards | Restricted Stock Awards | Class A Common Stock | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized Compensation Cost | $ 99,390 |
Weighted Average Remaining Period to be Recognized (in years) | 2 years 14 days |
Stock-Based Compensation - Equi
Stock-Based Compensation - Equity Incentive Plan (Narrative) (Details) - Equity Incentive Plan Options shares in Millions, $ in Millions | 3 Months Ended |
Jun. 30, 2023 USD ($) shares | |
Equity Incentive Plan Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock options outstanding (in shares) | 0.9 |
Stock options outstanding, unvested (in shares) | 0.3 |
Restricted stock units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Restricted stock granted (in shares) | 0.8 |
Fair value of options granted | $ | $ 72.3 |
Performance period | 3 years |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Recurring Fair Value Measurements (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Assets: | ||
Current derivative instruments | $ 14,190 | $ 11,245 |
Long term derivative instruments | 4,281 | 3,530 |
Long-term deferred compensation plan asset | 27,405 | 20,090 |
Total Assets | 45,876 | 34,865 |
Liabilities: | ||
Long-term derivative instruments | 1,369 | |
Long-term deferred compensation plan liability | 27,405 | 20,090 |
Total Liabilities | 27,405 | 21,459 |
Level 1 | ||
Assets: | ||
Current derivative instruments | 0 | 0 |
Long term derivative instruments | 0 | 0 |
Long-term deferred compensation plan asset | 27,405 | 20,090 |
Total Assets | 27,405 | 20,090 |
Liabilities: | ||
Long-term derivative instruments | 0 | |
Long-term deferred compensation plan liability | 27,405 | 20,090 |
Total Liabilities | 27,405 | 20,090 |
Level 2 | ||
Assets: | ||
Current derivative instruments | 14,190 | 11,245 |
Long term derivative instruments | 4,281 | 3,530 |
Long-term deferred compensation plan asset | 0 | 0 |
Total Assets | 18,471 | 14,775 |
Liabilities: | ||
Long-term derivative instruments | 1,369 | |
Long-term deferred compensation plan liability | 0 | 0 |
Total Liabilities | 0 | 1,369 |
Level 3 | ||
Assets: | ||
Current derivative instruments | 0 | 0 |
Long term derivative instruments | 0 | 0 |
Long-term deferred compensation plan asset | 0 | 0 |
Total Assets | 0 | 0 |
Liabilities: | ||
Long-term derivative instruments | 0 | |
Long-term deferred compensation plan liability | 0 | 0 |
Total Liabilities | $ 0 | $ 0 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents, at fair value | $ 209,640 | $ 404,862 |
Money Market Funds | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Cash and cash equivalents, at fair value | $ 139,000 | $ 237,800 |
Fair Value Measurements - Sch_2
Fair Value Measurements - Schedule of Carrying Values and Estimated Fair Values of Debt Instruments (Details) - USD ($) $ in Thousands | Jun. 30, 2023 | Mar. 31, 2023 |
3.88% Senior Notes due 2028 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument (as a percent) | 3.88% | |
4.00% Senior Notes due 2029 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt instrument (as a percent) | 4% | |
Carrying Amount | Term Loan A | Term Loans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | $ 1,619,063 | $ 1,629,375 |
Carrying Amount | 3.88% Senior Notes due 2028 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | 700,000 | 700,000 |
Carrying Amount | 4.00% Senior Notes due 2029 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | 500,000 | 500,000 |
Estimated Fair Value | Term Loan A | Term Loans | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | 1,588,706 | 1,600,861 |
Estimated Fair Value | 3.88% Senior Notes due 2028 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | 637,896 | 638,540 |
Estimated Fair Value | 4.00% Senior Notes due 2029 | Senior Notes | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Debt | $ 450,255 | $ 451,930 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |||
Jul. 21, 2023 | Jun. 30, 2023 | Jun. 30, 2022 | Mar. 31, 2023 | Mar. 31, 2021 | |
U.S. Department of Justice | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 350 | ||||
U.S. Department of Justice | Minimum | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 350 | ||||
U.S. Department of Justice | Maximum | |||||
Loss Contingencies [Line Items] | |||||
Estimate of possible loss | $ 378 | ||||
Contracts with U.S. Government Agencies or Other U.S. Government Contractors | Revenue Benchmark | Total U.S. government | |||||
Concentration Risk [Line Items] | |||||
Concentration risk (as a percent) | 98% | 97% | |||
Unfavorable Regulatory Action | Claimed Indirect Costs | |||||
Loss Contingencies [Line Items] | |||||
Liability for reductions and/or penalties from U.S Government audits | $ 333.4 | $ 326.7 | |||
Unfavorable Regulatory Action | U.S. Department of Justice | |||||
Loss Contingencies [Line Items] | |||||
Liability for reductions and/or penalties from U.S Government audits | 377.5 | ||||
Unfavorable Regulatory Action | U.S. Department of Justice | Subsequent Event | |||||
Loss Contingencies [Line Items] | |||||
Amount awarded to other party | $ 377.5 | ||||
Financial Standby Letter of Credit | |||||
Concentration Risk [Line Items] | |||||
Guarantor obligations, carrying value | 4.4 | 6.1 | |||
Guarantor obligations, reduction to available borrowings | 1.3 | 1.3 | |||
Guarantor obligations, facility | 7.5 | 7.5 | |||
Guarantor obligations, available amount | $ 4.4 | $ 2.7 |