Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Nov. 13, 2018 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Delta Tucker Holdings, Inc. | |
Entity Central Index Key | 1,514,226 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2018 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Common Stock, Shares Outstanding | 100 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Revenue | $ 525,022 | $ 502,974 | $ 1,609,676 | $ 1,437,133 |
Cost of services | (454,270) | (447,796) | (1,396,291) | (1,256,924) |
Selling, general and administrative expenses | (21,163) | (21,243) | (71,192) | (80,129) |
Depreciation and amortization expense | (6,022) | (8,792) | (18,053) | (25,936) |
(Loss) earnings from equity method investees | (60) | 53 | 209 | 105 |
Operating income | 43,507 | 25,196 | 124,349 | 74,249 |
Interest expense | (16,197) | (17,149) | (49,268) | (53,628) |
Loss on early extinguishment of debt | 0 | 0 | (239) | (24) |
Interest income | 863 | 15 | 1,796 | 39 |
Other income (expense), net | 790 | (43) | 1,931 | 1,474 |
Income before income taxes | 28,963 | 8,019 | 78,569 | 22,110 |
Provision for income taxes | (2,040) | (3,338) | (9,924) | (11,677) |
Net income | 26,923 | 4,681 | 68,645 | 10,433 |
Noncontrolling interests | (278) | (295) | (783) | (858) |
Net income attributable to Delta Tucker Holdings, Inc. | $ 26,645 | $ 4,386 | $ 67,862 | $ 9,575 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 26,923 | $ 4,681 | $ 68,645 | $ 10,433 |
Other comprehensive (loss) income, net of tax: | ||||
Foreign currency translation adjustment | (22) | 247 | (50) | 263 |
Other comprehensive (loss) income, before tax | (22) | 247 | (50) | 263 |
Income tax benefit (expense) related to items of other comprehensive income (loss) | 5 | (88) | 11 | (94) |
Other comprehensive (loss) income | (17) | 159 | (39) | 169 |
Comprehensive income | 26,906 | 4,840 | 68,606 | 10,602 |
Comprehensive loss attributable to noncontrolling interests | (278) | (295) | (783) | (858) |
Comprehensive income attributable to Delta Tucker Holdings, Inc. | $ 26,628 | $ 4,545 | $ 67,823 | $ 9,744 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 239,145 | $ 168,250 | $ 168,250 | $ 110,657 | $ 118,218 |
Accounts receivable, net of allowances of $5,076 and $10,142 respectively | 119,567 | 160,770 | 352,550 | ||
Contract assets | 163,876 | 190,440 | 0 | ||
Prepaid expenses and other current assets | 49,826 | 52,542 | 52,542 | ||
Total current assets | 572,414 | 572,002 | 573,342 | ||
Property and equipment, net | 22,985 | 23,568 | 23,568 | ||
Goodwill | 42,093 | 42,093 | 42,093 | ||
Tradenames, net | 28,536 | 28,536 | 28,536 | ||
Other intangibles, net | 38,074 | 55,302 | 55,302 | ||
Long-term deferred taxes | 874 | 369 | 369 | ||
Other assets, net | 11,234 | 12,507 | 12,507 | ||
Total assets | 716,210 | 734,377 | 735,717 | ||
Current liabilities: | |||||
Current portion of long-term debt, net | 0 | 53,652 | 53,652 | ||
Accounts payable | 100,078 | 109,396 | 109,396 | ||
Accrued payroll and employee costs | 79,739 | 105,391 | 105,391 | ||
Contract liabilities | 39,842 | 9,164 | 0 | ||
Accrued liabilities | 56,416 | 89,520 | 98,684 | ||
Income taxes payable | 14,854 | 18,401 | 18,401 | ||
Total current liabilities | 290,929 | 385,524 | 385,524 | ||
Long-term debt, net | 536,945 | 527,039 | 527,039 | ||
Other long-term liabilities | 11,437 | 13,081 | 13,081 | ||
Total liabilities | 839,311 | 925,644 | 925,644 | ||
DEFICIT | |||||
Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 0 | 0 | 0 | ||
Additional paid-in capital | 596,816 | 596,393 | 596,393 | ||
Accumulated deficit | (724,923) | (792,785) | (791,445) | ||
Accumulated other comprehensive loss | (443) | (404) | (404) | ||
Total deficit attributable to Delta Tucker Holdings, Inc. | (128,550) | (196,796) | (195,456) | ||
Noncontrolling interests | 5,449 | 5,529 | 5,529 | ||
Total deficit | (123,101) | (191,267) | (189,927) | $ (211,237) | $ (261,937) |
Total liabilities and deficit | $ 716,210 | $ 734,377 | $ 735,717 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Allowance for doubtful accounts | $ 5,076 | $ 10,142 |
DEFICIT | ||
Common stock, par value (in dollars per share) | $ 0.01000 | $ 0.01000 |
Common stock, shares authorized (in shares) | 1,000 | 1,000 |
Common stock, shares issued (in shares) | 100 | 100 |
Common stock, shares outstanding (in shares) | 100 | 100 |
Unaudited Condensed Consolida_5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | ||
Cash flows from operating activities | |||
Net income | $ 68,645 | $ 10,433 | |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | [1] | 20,635 | 27,245 |
Loss on early extinguishment of debt | 239 | 24 | |
Amortization of deferred loan costs and original issue discount | 4,008 | 4,049 | |
Allowance on accounts receivable and other noncash gains or losses | (24,659) | 2,724 | |
Earnings from equity method investees | (209) | (105) | |
Distributions from equity method investees | 0 | 222 | |
Deferred income taxes | (505) | (755) | |
Other, including paid in kind interest | 6,082 | 6,226 | |
Changes in assets and liabilities: | |||
Accounts receivable and contract assets | 74,680 | (25,731) | |
Prepaid expenses and other current assets | 576 | (4,867) | |
Accounts payable, accrued liabilities and contract liabilities | (14,757) | (14,168) | |
Income taxes payable | (3,632) | 4,840 | |
Net cash provided by operating activities | 131,103 | 10,137 | |
Cash flows from investing activities | |||
Purchase of property and equipment | (8,377) | (3,931) | |
Proceeds from sale of property and equipment | 13 | 537 | |
Purchase of software | (274) | (646) | |
Return of capital from equity method investees | 8,278 | 6,017 | |
Contributions to equity method investees | (4,433) | (3,250) | |
Net cash used in investing activities | (4,793) | (1,273) | |
Cash flows from financing activities | |||
Payments on senior secured credit facility | (54,943) | (25,114) | |
Payment to bondholders of senior unsecured notes | 0 | (39,319) | |
Equity contribution from affiliates of Cerberus | 300 | 40,899 | |
Payment of dividends to noncontrolling interests | (772) | (555) | |
Net cash used in financing activities | (55,415) | (24,089) | |
Net increase (decrease) in cash, cash equivalents and restricted cash | 70,895 | (15,225) | |
Cash, cash equivalents and restricted cash, beginning of period | 168,250 | 125,882 | |
Cash, cash equivalents and restricted cash, end of period | 239,145 | 110,657 | |
Income taxes paid, net of receipts | 14,107 | 7,692 | |
Interest paid | $ 49,200 | $ 55,786 | |
[1] | Includes amounts included in Cost of services of $0.9 million and $2.6 million and for the three and nine months ended September 30, 2018, respectively, and $0.5 million and $1.3 million for the three and nine months ended September 30, 2017, respectively. |
Unaudited Condensed Consolida_6
Unaudited Condensed Consolidated Statements of Deficit - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance (in shares) | 100 | ||||
Balance | $ (189,927) | $ (261,937) | |||
Share based compensation, net | 54 | 27 | |||
Comprehensive income attributable to Delta Tucker Holdings, Inc. | $ 26,906 | $ 4,840 | 68,606 | 10,602 | |
Capital contribution | 300 | 40,899 | |||
DIFZ financing, net of tax | 69 | 4 | |||
Dividends declared to noncontrolling interests | $ (863) | (832) | |||
Balance (in shares) | 100 | 100 | |||
Balance | $ (123,101) | $ (211,237) | $ (123,101) | $ (211,237) | |
ASU 2014-09 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adjustment due to adoption of ASC 606 | $ (1,340) | ||||
Common Stock | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance (in shares) | 0 | 0 | |||
Balance | $ 0 | $ 0 | |||
Balance (in shares) | 0 | 0 | 0 | 0 | |
Balance | $ 0 | $ 0 | $ 0 | $ 0 | |
Additional Paid-in Capital | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance | 596,393 | 555,163 | |||
Share based compensation, net | 54 | 27 | |||
Capital contribution | 300 | 40,899 | |||
DIFZ financing, net of tax | 69 | 4 | |||
Balance | 596,816 | 596,093 | 596,816 | 596,093 | |
Accumulated Deficit | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance | (791,445) | (822,045) | |||
Comprehensive income attributable to Delta Tucker Holdings, Inc. | 67,862 | 9,575 | |||
Balance | (724,923) | (812,470) | (724,923) | (812,470) | |
Accumulated Deficit | ASU 2014-09 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adjustment due to adoption of ASC 606 | (1,340) | ||||
Accumulated Other Comprehensive Loss | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance | (404) | (510) | |||
Comprehensive income attributable to Delta Tucker Holdings, Inc. | (39) | 169 | |||
Balance | (443) | (341) | (443) | (341) | |
Total Deficit Attributable to Delta Tucker Holdings, Inc. | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance | (195,456) | (267,392) | |||
Share based compensation, net | 54 | 27 | |||
Comprehensive income attributable to Delta Tucker Holdings, Inc. | 67,823 | 9,744 | |||
Capital contribution | 300 | 40,899 | |||
DIFZ financing, net of tax | 69 | 4 | |||
Balance | (128,550) | (216,718) | (128,550) | (216,718) | |
Total Deficit Attributable to Delta Tucker Holdings, Inc. | ASU 2014-09 | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Adjustment due to adoption of ASC 606 | $ (1,340) | ||||
Noncontrolling Interest | |||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Balance | 5,529 | 5,455 | |||
Comprehensive income attributable to Delta Tucker Holdings, Inc. | 783 | 858 | |||
Dividends declared to noncontrolling interests | (863) | (832) | |||
Balance | $ 5,449 | $ 5,481 | $ 5,449 | $ 5,481 |
Basis of Presentation and Accou
Basis of Presentation and Accounting Policies | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Accounting Policies | Basis of Presentation and Accounting Policies Basis of Presentation Delta Tucker Holdings, Inc. ("Holdings"), the parent of DynCorp International Inc. ("DynCorp International"), through its subsidiaries (together, "the Company"), provides defense and technical services and government outsourced solutions primarily to U.S. government agencies domestically and internationally. The Company was incorporated in the state of Delaware on April 1, 2010. Our customers include the DoD, the U.S. Department of State ("DoS"), the U.S. Agency for International Development ("USAID"), foreign governments, commercial customers and certain other U.S. federal, state and local government departments and agencies. Unless the context otherwise indicates, references herein to "we," "our," "us," or "the Company" refer to Delta Tucker Holdings, Inc. and our consolidated subsidiaries. The unaudited condensed consolidated financial statements include the accounts of the Company and our domestic and foreign subsidiaries. These unaudited condensed consolidated financial statements have been prepared pursuant to accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, we believe that all disclosures are adequate and do not make the information presented misleading. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . In the opinion of management, normal recurring adjustments necessary to fairly present our financial position as of September 30, 2018 and December 31, 2017 , the results of operations and statements of comprehensive income for the three and nine months ended September 30, 2018 and September 30, 2017 and the statements of deficit and cash flows for the nine months ended September 30, 2018 and September 30, 2017 have been included. The results of operations and statements of comprehensive income for the three and nine months ended September 30, 2018 and September 30, 2017 and the statements of deficit and cash flows for the nine months ended September 30, 2018 and September 30, 2017 are not necessarily indicative of the results to be expected for the full calendar year or for any future periods. We use estimates and assumptions required for preparation of the financial statements. The estimates are primarily based on historical experience and business knowledge and are revised as circumstances change. Our actual results may differ from these estimates. The unaudited condensed consolidated financial statements include the accounts of both our domestic and foreign subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. Use of Estimates General - We are predominantly a services provider and only include products or systems when necessary for the execution of the service arrangement. As such, systems, equipment or materials are not generally separable from the services we provide. Revenue is recognized for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability is probable. Our contracts are primarily with U.S. government customers and are generally structured under the following contract types: (i) fixed-price; (ii) time-and-materials; and (iii) cost-reimbursement contracts. In a fixed-price contract, the price is generally not subject to adjustment based on costs incurred and may include firm fixed-price, fixed-price with economic adjustment, and fixed-price incentive elements. Time-and-materials contracts provide for acquiring supplies or services on the basis of direct labor hours at fixed hourly/daily rates plus materials at cost. Cost-reimbursement contracts provide for payment for allowable incurred costs, to the extent prescribed in the contract, plus a fixed-fee, award-fee, incentive-fee or a combination thereof. Our contracts contain promises to provide distinct goods or services to the customer which represent performance obligations and is the unit of account under ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). To determine the proper revenue recognition method, consideration is given as to whether a single contract should be accounted for as more than one performance obligation or whether two or more contracts should be combined and accounted for as one single contract. For most of our contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and deliverables into a single service solution. Hence, the entire contract is accounted for as one performance obligation. Less commonly, however, we may promise to provide distinct goods or services within a contract in which case we separate the contract into more than one performance obligation. If a contract has multiple performance obligations, the contract’s transaction price is allocated based on the estimated relative standalone selling prices of the promised goods or services underlying each performance. The primary method used to estimate standalone selling price is the expected cost plus a margin approach. In instances where a performance obligation does not have an observable standalone selling price, we select an estimation method that maximizes the use of observable inputs. Major factors we consider in determining total estimated revenue and cost include the base contract price, contract options, change orders (modifications of the original contract), back charges and claims, and contract provisions for penalties, award fees and performance incentives. All of these factors and other less significant contract provisions are evaluated throughout the life of our contracts when estimating transaction price. We inherently have risks related to our estimates with long-term contracts. Actual amounts could materially differ from these estimates. We believe the following are the risks associated with our estimation process: (i) assumptions are uncertain and inherently judgmental at the time of the estimate; (ii) use of reasonably different assumptions could have changed our estimates, particularly with respect to estimates of contract revenues, costs and recoverability of assets; and (iii) changes in estimates could have material effects on our financial condition or results of operations. The impact of any one of these factors could contribute to a material cumulative adjustment. Our revenues are primarily derived from long-term contracts and programs with a base period and multiple option periods for services provided to the U.S. federal government. We recognize revenue over time and our contracts typically have one year base periods and multiple one year option periods. The option periods are considered separate purchase obligations from the base period. Generally, the terms and conditions of the contracts result in a continuous transfer of control over the relevant goods and services. As a result of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use a cost-to-cost measure of progress for our contracts because it best depicts the transfer of assets to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill include labor, materials and subcontractors’ costs, other direct costs and an allocation of indirect costs. In certain instances, we may recognize revenue at the point in time at which control is transferred to the customer using an output method based on units produced or delivered. We consider the unfunded portions of a contract and award and incentive fees to be variable consideration. Some of our long-term contracts with the U.S. government are only partially funded at inception as a result of the U.S. government’s annual budget and appropriations process. The unfunded portion of a contract is included in the estimated transaction price to the extent it is probable that the unfunded portion of the contract will become funded. We consider the following factors in determining the likelihood that the unfunded portion of the contract would not result in a significant revenue reversal: (i) period of time before contract funding is expected; (ii) history of receiving funding in similar situations; and (iii) communication from the customer that funding will be obtained. Award and incentive fees are generally awarded upon achievement of specified performance objectives, milestones, or cost targets and are considered variable consideration. We do not consider the mere existence of potential award or incentive fees as presumptive evidence that award or incentive fees are to be included in determining total transaction price. We include award or incentive fees in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. These estimates are based largely on an assessment of our anticipated performance, historical award experience, and information that is reasonably available to us. Pre-contract costs are costs incurred to fulfill a contract in anticipation of a contract award. Pre-contract costs such as those specifically chargeable to a customer and probable of recovery under a specific anticipated contract would be capitalized. All other pre-contract costs, including start-up costs, would be expensed as incurred. Management regularly reviews project profitability and underlying estimates, including total cost to complete a project. For each project, estimates for total project costs are based on such factors as a project's contractual requirements and management's assessment of current and future pricing, economic conditions, political conditions and site conditions. Estimates can be impacted by such factors as additional requirements from our customers, a change in labor markets impacting the availability or cost of a skilled workforce, regulatory changes both domestically and internationally, political unrest or security issues at project locations. Revisions to estimates are reflected in our consolidated results of operations as changes in accounting estimates in the periods in which the facts that give rise to the revisions become known by management. We believe long-term contracts, contracts in a loss position, contracts with material award fees, and contract modifications drive the significant changes in estimates in our contracts. The preparation of the financial statements requires us to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Our estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the consolidated statements of operations in the period that they are determined. The majority of our contracts are accounted for under series guidance, as the performance obligation represents a series of distinct goods and services where each day of the promised service is a distinct obligation, and the effects of changes in contract estimates related to certain types of contracts accounted for using an input method measure of progress, such as cost-to-cost, are recognized prospectively. Changes in these estimates can occur over the life of a contract for a variety of reasons, including changes in scope, estimated incentive or award fees, cost estimates, level of effort and/or other assumptions impacting revenue or cost to perform a contract. Changes in contract estimates related to past performance are recognized in the period in which such changes are made for the inception to date effect of the changes. The gross favorable and unfavorable adjustments to income before income taxes below reflect changes in contract estimates during each reporting period, excluding new or completed contracts where no comparative estimates exist between reporting periods. The following amounts during the three and nine months ended September 30, 2018 and September 30, 2017 are presented under ASC 605, due to the adoption of ASC 606 on January 1, 2018 using the modified retrospective method. Three Months Ended Nine Months Ended (Amounts in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Gross favorable adjustments $ 7.9 $ 8.0 $ 18.2 $ 22.1 Gross unfavorable adjustments (7.5 ) (1.0 ) (1.5 ) (2.0 ) Net adjustments $ 0.4 $ 7.0 $ 16.7 $ 20.1 Contract Assets Contract assets primarily consist of unbilled receivables which represent rights to consideration for work completed but not billed as of the reporting date. Due to the adoption of ASC 606, amounts previously presented as unbilled receivables in Accounts receivable, net of allowances, for the year ended December 31, 2017 of $191.8 million , have prospectively been presented as Contract assets within the Company’s consolidated balance sheets. Contract Liabilities Contract liabilities represent advanced payments, billings in excess of costs and earnings, and deferred revenue amounts. These amounts are recognized as revenue once the performance progress has occurred. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Advance payments and billings in excess of revenue as current, and deferred revenue as current or noncurrent based on the timing of when revenue is expected to be recognized. Due to the adoption of ASC 606, amounts received from customers in excess of revenue recognized previously presented within customer liabilities in Total accrued liabilities, for the year ended December 31, 2017 of $9.2 million , have prospectively been presented as Contract liabilities within the Company’s consolidated balance sheets. Accounting Policies There have been no material changes to our significant accounting policies from those described in our Annual Report on Form 10-K for the year ended December 31, 2017 , except as described below. Recently Adopted Accounting Standards In November 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 clarifies the guidance on the cash flow classification and presentation of changes in restricted cash or restricted cash equivalents. The Company elected to adopt ASU 2016-18 during the fourth quarter of calendar year 2017 and therefore, amounts generally described as restricted cash or restricted cash equivalents are now included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flow. The Company recasted its statement of cash flows for the nine months ended September 30, 2017 . Our statement of cash flows explains the change in the total of cash, cash equivalents, and restricted cash. The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows: Nine Months Ended ( Amounts in thousands) September 30, 2017 Beginning of period Cash and cash equivalents $ 118,218 Restricted cash 7,664 Total cash, cash equivalents and restricted cash, beginning of period 125,882 End of period Cash and cash equivalents 110,657 Restricted cash — Total cash, cash equivalents and restricted cash, end of period 110,657 Net decrease in cash, cash equivalents and restricted cash $ (15,225 ) The following table illustrates changes in the Company's Condensed Consolidated Statements of Cash Flows as reported and as previously reported prior to the adoption of ASU 2016-18 in the fourth quarter of calendar year 2017: Nine Months Ended September 30, 2017 As Reported As Previously Reported ( Amounts in thousands) Net cash provided by operating activities $ 10,137 $ 10,744 Net cash (used in) provided by investing activities (1,273 ) 5,784 Net cash used in financing activities (24,089 ) (24,089 ) Net decrease in cash, cash equivalents and restricted cash (1) (15,225 ) (7,561 ) Cash, cash equivalents and restricted cash, beginning of period (1) 125,882 118,218 Cash, cash equivalents and restricted cash, end of period (1) 110,657 110,657 (1) Amounts in the As Reported column include cash, cash equivalents and restricted cash as required upon the adoption of ASU 2016-18. Amounts in the As Previously Reported column reflects only cash and cash equivalents. In May 2014, the FASB issued ASC 606, which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. We adopted ASC 606, Revenue from Contracts with Customers, as of January 1, 2018 using the modified retrospective approach only on contracts not completed at the date of initial application with the cumulative effect of adoption recorded as an adjustment to the opening balance of equity as of that date without restatement of comparative periods. See this Note and Note 2 for the required disclosures related to the impact of adopting this standard and a discussion of the Company's updated policies related to revenue recognition. Recently Issued Accounting Developments In February 2016, the FASB issued ASU No. 2016-02, Leases . The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases. ASU 2016-02 requires an entity to recognize right-of-use assets and lease liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. Entities are required to adopt ASU 2016-02 using a modified retrospective approach, subject to certain optional practice expedients, and apply the provisions of ASU 2016-02 to leasing arrangements existing at or entered into after the earliest comparative period presented in the financial statements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The new standard will be effective for the Company in the first quarter of calendar year 2019. The Company has established a cross-functional team of key stakeholders for implementing the new standard. As part of the Company’s assessment and implementation plan, the Company performed a completeness assessment over the lease population, analyzing the practical expedients and assessing opportunities to make certain changes to its business policies, processes, systems and internal controls in order to determine the best implementation strategy. All of the Company's material leases are classified as operating leases, which the Company expects will continue to be classified as operating under the new standard. The Company's long-term leases (term in excess of 12 months) will be subject to the new guidance and recognized as right-of-use assets and lease liabilities upon adoption, resulting in a material impact to our total assets and total liabilities on the consolidated balance sheets. The Company does not expect the adoption of the new standard to impact its results of operations and cash flows. The Company's existing debt agreements exclude the impact of this standard on its debt covenants, accordingly the new standard will have no impact on the Company's debt-covenant compliance under the current debt agreements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments are effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019 and applied using a prospective transition approach for debt securities for which an other-than-temporary impairment had been recognized before the effective date. We are currently evaluating the potential effects of the adoption of ASU 2016-13 on our consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Reporting Comprehensive Income - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income to help businesses and other organizations present some effects from the Tax Act’s reduction in the corporate tax rate in their income statements. ASU 2018-02 gives the option of reclassifying what are called the “stranded” tax effects within accumulated other comprehensive income (loss) to retained earnings (deficit) during each fiscal year or quarter in which the effect of the lower tax rate is recorded. ASU 2018-02 instructs businesses and other organizations to provide a disclosure in their financial statement footnotes that describes the accounting policy they used to release the income tax effects from accumulated other comprehensive income (loss), whether they are reclassifying the stranded income tax effects from the Tax Act, and information about the other effects on taxes from the reclassification. The update is effective for fiscal years beginning after December 15, 2018, and the interim periods in those years, and early adoption is permitted. We are currently evaluating the potential effects of the adoption of ASU 2018-02 on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. This guidance is effective for public companies in fiscal years beginning after December 15, 2019 with early adoption permitted. We are currently evaluating the potential effects of the adoption of ASU 2018-13 on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract to provide guidance on implementation costs incurred in a cloud computing arrangement that is a service contract. The ASU aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of such arrangements that are service contracts and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We are currently evaluating the potential effects of the adoption of ASU 2018-15 on our consolidated financial statements. In August 2018, the SEC issued SEC Final Rule Release No. 33-10532, Disclosure Update and Simplification , which amends certain of its disclosure requirements and is intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The final rule includes a requirement to provide an analysis of changes in stockholders’ deficit for the current and comparative year-to-date interim periods in interim reports. The final rule is effective for all filings submitted on or after November 5, 2018. The Company plans to adopt the guidance on the presentation of changes in the statements of deficit in its Form 10-Q for the quarter ending March 31, 2019. Other accounting standards updates effective after September 30, 2018 are not expected to have a material effect on our consolidated financial position or results of operations and cash flows for the period ended September 30, 2018 . |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers, which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. We adopted ASC 606, as of January 1, 2018 using the modified retrospective approach with the cumulative effect of adoption recorded as an adjustment to the opening balance of equity as of that date without restatement of comparative periods. The impacts related to the adoption of ASC 606 on our portfolio of contracts primarily relate to the units of account and methods used to measure of progress toward satisfaction of a performance obligation. Previously, certain of our contracts that included multiple promises related to the transfer of goods or services to the customer were combined or segmented based on profit center and the requisite revenue was recognized by profit center using the percentage-of-completion method or completed-contract method. We now evaluate all promises in an arrangement to determine if they represent one or more distinct performance obligations. The adoption of ASC 606 will not change the total revenue or operating earnings recognized under these contracts, only the timing of when those amounts are recognized. Nature of Goods and Services The Company generally derives revenue from long-term, service-based contracts and programs for commercial, government, and military customers. Our contracts typically fall into the following two categories with the first representing substantially all of our revenue: (i) federal government contracts and (ii) other contracts. Federal Government Contracts - Contracts with the U.S. federal government, primarily to the Department of Defense (“DoD”) and the Department of State (“DoS”), contemplate the provision of services related to aviation solutions, construction management, base and logistics operations, intelligence training, and operations and linguistics support. Certain contracts are structured using an IDIQ vehicle awarded to multiple contractors. However, many IDIQ vehicles permit the customer to direct work to a particular contractor. When a customer wishes to order services under an IDIQ contract, the customer issues a task order request for proposal to the contract awardees and task orders are awarded under a best-value approach. The task orders awarded may be fixed-priced, time-and-materials, or cost-reimbursement contracts. The Company generally performs over a base period with multiple option periods. The U.S. government is not obligated to exercise options under a contract after the base period. At the time of completion of the contract term of a U.S. government contract, the contract may be re-competed to the extent the service is still required. Historically, the Company has received additional revenue through increases in program scope beyond that of the original contract and “over and above” requests derived from changes in customer requests. For most of our contracts, we provide a significant service of integrating equipment, materials, and services into a single project which is accounted for as one performance obligation. In certain instances, we also provide a stand-ready service in the case where the Company responds to the customer’s needs on the basis of its demand. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the best estimate of the standalone selling price for each distinct good or service. Where a series of distinct services has been identified, the Company generally allocates variable consideration to distinct time increments of service (e.g. hours, days, etc.). Where the variable consideration is not directly tied to the base pricing structure of the contract (e.g. cost incurrence), the Company allocates variable consideration to a subset of services within a period (e.g. evaluation periods for awards/incentives). Revenues are recognized over time upon contract specifications. The method utilized to measure performance progress reflects the best depiction of control to the customer. If control is transferred over time, revenue is recognized over time using the cost-to-cost-method to measure performance progress. Typical payment terms for U.S. federal government contracts are in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. In most instances, the customer generally pays the Company for actual costs incurred within a short period of time. In certain cases, the Company receives interim payments as work progresses or an advance payment. The Company recognizes a liability for advance payments in excess of revenue recognized which is included in contract liabilities on the balance sheet. The advance payment typically is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract. Other Contracts - Contracts with non-federal government customers are predominantly service arrangements which may involve various combinations related to the provision of services, delivery of equipment and materials, grant licenses and other rights, or take certain actions. For most of our contracts, we provide a significant service of integrating equipment, materials, or other services into a single project which is accounted for as one performance obligation. In certain instances, we also provide a stand-ready service in the case where the Company responds to the customer’s needs on the basis of its demand. In determining transaction price, the Company considers the unfunded portions of a contract and award and incentive fees to be variable consideration which is estimated using the best estimate of consideration to which the Company expects to be entitled per the terms and conditions of the contract at inception and reassessed quarterly. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the best estimate of the standalone selling price for each distinct good or service. Where a series of distinct services has been identified, the Company generally allocates variable consideration to distinct time increments of service (e.g. hours, days, etc.). Where the variable consideration is not directly tied to the base pricing structure of the contract (e.g. cost incurrence), the Company allocates variable consideration to a subset of services within a period (e.g. evaluation periods for awards/incentives). Revenue is recognized over time upon contract specifications. The method utilized to measure performance progress reflects the best depiction of control to the customer. If consideration is considered fixed, revenue is recognized over time using the cost-to-cost-method to measure performance progress. If consideration is considered variable, revenue is recognized as performance occurs. In instances where the contract structure is time-and-materials, the Company may utilize the practical expedient allowing the recognition of revenue in the amount at which the Company invoices as the invoiced amounts correspond directly with the value provided to the customer and to which it is entitled to payment for performance to date. The Company is electing the practical expedient on not disclosing remaining performance obligations as the Company's performance obligations, with one exception, have an original expected duration of one year or less. The contract exception relates to a contract executed during the quarter ended June 30, 2018 which has a 30 month term with a remaining performance obligation of $208.0 million as of September 30, 2018 . We expect to recognize approximately 40% and 88% of our September 30, 2018 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. In addition, during the second quarter of calendar year 2018, we received a $45.1 million advance payment on this contract which is included in Contract liabilities, net of revenue recognized through September 30, 2018 . Typical payment terms for non-federal government contracts are in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. In certain cases, the Company receives interim payments as work progresses or an advance payment. The Company recognizes a liability for advance payments in excess of revenue recognized which is included in contract liabilities on the balance sheet. The advance payment typically is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract. Disaggregation of Revenue The following tables represent revenues disaggregated by customer-type and contract-type and include a reconciliation of the disaggregated revenue with reportable segments for the three and nine months ended September 30, 2018 : Under ASC 606 Three months ended September 30, 2018 (Amounts in thousands) DynAviation DynLogistics Headquarters / Other Total Customer DOD $ 231,094 $ 225,729 $ — $ 456,823 DOS 5,282 42,424 — 47,706 Other 14,622 6,740 (869 ) 20,493 Total revenue $ 250,998 $ 274,893 $ (869 ) $ 525,022 Contract Type Fixed-Price $ 105,900 $ 79,437 $ (271 ) $ 185,066 Time-and-Materials 25,481 3,234 (36 ) 28,679 Cost-Reimbursement 119,617 192,222 (562 ) 311,277 Total revenue $ 250,998 $ 274,893 $ (869 ) $ 525,022 Under ASC 606 Nine months ended September 30, 2018 (Amounts in thousands) DynAviation DynLogistics Headquarters / Other Total Customer DOD $ 715,040 $ 625,649 $ — $ 1,340,689 DOS 105,480 107,547 — 213,027 Other 45,164 10,467 329 55,960 Total revenue $ 865,684 $ 743,663 $ 329 $ 1,609,676 Contract Type Fixed-Price $ 369,698 $ 234,109 $ 123 $ 603,930 Time-and-Materials 67,723 5,755 15 73,493 Cost-Reimbursement 428,263 503,799 191 932,253 Total revenue $ 865,684 $ 743,663 $ 329 $ 1,609,676 Financial Statement Impact of Adopting ASC 606 The Company adopted ASC 606 using the modified retrospective method and we recorded a net increase to opening accumulated deficit of $1.3 million as of January 1, 2018 due to the cumulative impact of adopting ASC 606. Additionally, amounts previously presented as unbilled receivables in Accounts receivable, net of allowances, for the year ended December 31, 2017 , have prospectively been presented as Contract assets and amounts received from customers in excess of revenue recognized previously presented within customer liabilities in Total accrued liabilities for the year ended December 31, 2017 , have prospectively been presented as Contract liabilities within the Company's consolidated balance sheets. As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to accounts on the condensed consolidated balance sheet as of January 1, 2018 : As reported Adjustments Adjusted (Amounts in thousands) December 31, 2017 Contract Assets Contract Liabilities Accumulated Deficit January 1, 2018 Current assets: Cash and cash equivalents $ 168,250 $ — $ — $ — $ 168,250 Accounts receivable, net of allowance of $10,142 352,550 (191,780 ) — — 160,770 Contract assets — 191,780 — (1,340 ) 190,440 Prepaid expenses and other current assets 52,542 — — — 52,542 Total current assets 573,342 — — (1,340 ) 572,002 Property and equipment, net 23,568 — — — 23,568 Goodwill 42,093 — — — 42,093 Tradenames, net 28,536 — — — 28,536 Other intangibles, net 55,302 — — — 55,302 Long-term deferred taxes 369 — — — 369 Other assets, net 12,507 — — — 12,507 Total assets $ 735,717 $ — $ — $ (1,340 ) $ 734,377 Current liabilities: Current portion of long-term debt, net $ 53,652 $ — $ — $ — $ 53,652 Accounts payable 109,396 — — — 109,396 Accrued payroll and employee costs 105,391 — — — 105,391 Contract liabilities — — 9,164 — 9,164 Accrued liabilities 98,684 — (9,164 ) — 89,520 Income taxes payable 18,401 — — — 18,401 Total current liabilities 385,524 — — — 385,524 Long-term debt, net 527,039 — — — 527,039 Other long-term liabilities 13,081 — — — 13,081 Total liabilities 925,644 — — — 925,644 Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at December 31, 2017 — — — — — Additional paid-in capital 596,393 — — — 596,393 Accumulated deficit (791,445 ) — — (1,340 ) (792,785 ) Accumulated other comprehensive loss (404 ) — — — (404 ) Total deficit attributable to Delta Tucker Holdings, Inc. (195,456 ) — — (1,340 ) (196,796 ) Noncontrolling interests 5,529 — — — 5,529 Total deficit (189,927 ) — — (1,340 ) (191,267 ) Total liabilities and deficit $ 735,717 $ — $ — $ (1,340 ) $ 734,377 Impact of New Revenue Guidance on Financial Statement Line Items The following tables compare the reported condensed consolidated statement of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2018 and the condensed consolidated balance sheet as of September 30, 2018 , to the pro-forma amounts had the previous guidance been in effect. Consolidated Statements of Operations Three months ended September 30, 2018 Nine months ended September 30, 2018 (Amounts in thousands) As reported Pro forma as if the previous accounting guidance was in effect As reported Pro forma as if the previous accounting guidance was in effect Revenue $ 525,022 $ 520,133 $ 1,609,676 $ 1,609,864 Cost of services (454,270 ) (454,270 ) (1,396,291 ) (1,396,286 ) Selling, general and administrative expenses (21,163 ) (21,163 ) (71,192 ) (71,192 ) Depreciation and amortization expense (6,022 ) (6,022 ) (18,053 ) (18,053 ) (Loss) earnings from equity method investees (60 ) (60 ) 209 209 Operating income 43,507 38,618 124,349 124,542 Interest expense (16,197 ) (16,197 ) (49,268 ) (49,268 ) Loss on early extinguishment of debt — — (239 ) (239 ) Interest income 863 863 1,796 1,796 Other income, net 790 790 1,931 1,931 Income before income taxes 28,963 24,074 78,569 78,762 Provision for income taxes (2,040 ) (1,298 ) (9,924 ) (9,947 ) Net income 26,923 22,776 68,645 68,815 Noncontrolling interests (278 ) (278 ) (783 ) (783 ) Net income attributable to Delta Tucker Holdings, Inc. $ 26,645 $ 22,498 $ 67,862 $ 68,032 The following summarizes the significant changes on the Company's condensed consolidated statement of operations for the three and nine months ended September 30, 2018 as a result of the adoption of ASC 606 on January 1, 2018 compared to if the Company had continued to recognize revenues under ASC 605. The effect of the change was primarily driven by the change in period of performance of our contracts under ASC 605 as compared to ASC 606 and the impact of timing of recognition on variable consideration on certain contracts. The remaining impacts were not material. Consolidated Statements of Comprehensive Income Three months ended September 30, 2018 Nine months ended September 30, 2018 (Amounts in thousands) As reported Pro forma as if the previous accounting guidance was in effect As reported Pro forma as if the previous accounting guidance was in effect Net income $ 26,923 $ 22,776 $ 68,645 $ 68,815 Other comprehensive income, net of tax: Foreign currency translation adjustment (22 ) (22 ) (50 ) (50 ) Other comprehensive (loss) income, before tax (22 ) (22 ) (50 ) (50 ) Income tax benefit related to items of other comprehensive (loss) income 5 5 11 11 Other comprehensive loss (17 ) (17 ) (39 ) (39 ) Comprehensive income 26,906 22,759 68,606 68,776 Comprehensive income attributable to noncontrolling interests (278 ) (278 ) (783 ) (783 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 26,628 $ 22,481 $ 67,823 $ 67,993 The Company's statements of comprehensive income were only impacted by the change in net income due to the adoption of ASC 606. Consolidated Balance Sheets As of September 30, 2018 (Amounts in thousands) As reported Pro forma as if the previous accounting guidance was in effect Current assets: Cash and cash equivalents $ 239,145 $ 239,145 Accounts receivable, net of allowances of $5,076 119,567 285,519 Contract assets 163,876 — Prepaid expenses and other current assets 49,826 49,826 Total current assets 572,414 574,490 Property and equipment, net 22,985 22,985 Goodwill 42,093 42,093 Tradenames, net 28,536 28,536 Other intangibles, net 38,074 38,074 Long-term deferred taxes 874 874 Other assets, net 11,234 11,234 Total assets $ 716,210 $ 718,286 Current liabilities: Accounts payable $ 100,078 $ 100,078 Accrued payroll and employee costs 79,739 79,739 Contract liabilities 39,842 — Accrued liabilities 56,416 96,801 Income taxes payable 14,854 14,877 Total current liabilities 290,929 291,495 Long-term debt, net 536,945 536,945 Other long-term liabilities 11,437 11,437 Total liabilities 839,311 839,877 Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at September 30, 2018 — — Additional paid-in capital 596,816 596,816 Accumulated deficit (724,923 ) (723,413 ) Accumulated other comprehensive loss (443 ) (443 ) Total deficit attributable to Delta Tucker Holdings, Inc. (128,550 ) (127,040 ) Noncontrolling interests 5,449 5,449 Total deficit (123,101 ) (121,591 ) Total liabilities and deficit $ 716,210 $ 718,286 Total reported assets were $2.1 million greater than total assets in the pro-forma balance sheet, which assumes the previous guidance remained in effect as of September 30, 2018 . This was largely due to the change in period of performance of our contracts under ASC 605 as compared to ASC 606 and the impact of timing of recognition on variable consideration on certain contracts. Total reported liabilities were $0.6 million less than total liabilities in the pro-forma balance sheet, which assumes the previous guidance remained in effect as of September 30, 2018 . This was primarily due to the change in amounts received from customers in excess of revenue recognized. The remaining impacts were not material. Consolidated Statements of Cash Flows Nine months ended September 30, 2018 (Amounts in thousands) As reported Pro forma as if the previous accounting guidance was in effect Cash flows from operating activities Net income $ 68,645 $ 68,815 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,635 20,635 Loss on early extinguishment of debt 239 239 Amortization of deferred loan costs and original issue discount 4,008 4,008 Allowance on accounts receivable and other noncash gains or losses (24,659 ) (24,659 ) Earnings from equity method investees (209 ) (209 ) Deferred income taxes (505 ) (505 ) Other, including paid in kind interest 6,082 6,082 Changes in assets and liabilities: Accounts receivable and contract assets 74,680 73,945 Prepaid expenses and other current assets 576 576 Accounts payable, accrued liabilities and contract liabilities (14,757 ) (14,215 ) Income taxes payable (3,632 ) (3,609 ) Net cash provided by operating activities 131,103 131,103 Cash flows from investing activities Purchase of property and equipment (8,377 ) (8,377 ) Proceeds from sale of property and equipment 13 13 Purchase of software (274 ) (274 ) Return of capital from equity method investees 8,278 8,278 Contributions to equity method investees (4,433 ) (4,433 ) Net cash used in investing activities (4,793 ) (4,793 ) Cash flows from financing activities Payments on senior secured credit facility (54,943 ) (54,943 ) Equity contribution from affiliates of Cerberus 300 300 Payment of dividends to noncontrolling interests (772 ) (772 ) Net cash used in financing activities (55,415 ) (55,415 ) Net increase in cash, cash equivalents and restricted cash 70,895 70,895 Cash, cash equivalents and restricted cash, beginning of period 168,250 168,250 Cash, cash equivalents and restricted cash, end of period $ 239,145 $ 239,145 The adoption of ASC 606 had no impact on the totals of the Company's cash flows from operating, investing and financing activities. |
Composition of Certain Financia
Composition of Certain Financial Statement Captions | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Composition of Certain Financial Statement Captions | Composition of Certain Financial Statement Captions The following tables present financial information of certain consolidated balance sheet captions. Prepaid expenses and other current assets As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Prepaid expenses $ 39,556 $ 38,423 Inventories, net 4,794 8,240 Work-in-process inventory 459 520 Joint venture receivables 37 29 Other current assets 4,980 5,330 Total prepaid expenses and other current assets $ 49,826 $ 52,542 Prepaid expenses include prepaid insurance, prepaid vendor deposits, and prepaid rent, none of which individually exceed 5% of current assets. The change in prepaid expenses is primarily due to the timing of insurance payments. Inventory is valued at the lower of cost or net realizable value. Property and equipment, net As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Aircraft $ 3,868 $ 3,868 Computers and related equipment 9,960 7,967 Leasehold improvements 17,401 17,614 Office furniture and fixtures 3,374 4,184 Vehicles 14,533 12,659 Gross property and equipment 49,136 46,292 Less accumulated depreciation (26,151 ) (22,724 ) Total property and equipment, net $ 22,985 $ 23,568 As of September 30, 2018 and December 31, 2017 , Property and equipment, net, included the accrual for property additions of $1.4 million and $4.4 million , respectively. Depreciation expense, including certain depreciation amounts classified as Cost of services, was $1.5 million and $4.6 million during the three and nine months ended September 30, 2018 , respectively. Depreciation expense, including certain depreciation amounts classified as Cost of services, was $1.3 million and $3.3 million during the three and nine months ended September 30, 2017 , respectively. Other assets, net As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Investment in affiliates $ 2,110 $ 5,746 Palm promissory note, long-term portion 1,751 1,876 Other 7,373 4,885 Total other assets, net $ 11,234 $ 12,507 Accrued payroll and employee costs As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Wages, compensation and other benefits $ 61,615 $ 90,583 Accrued vacation 17,034 13,625 Accrued contributions to employee benefit plans 1,090 1,183 Total accrued payroll and employee costs $ 79,739 $ 105,391 Accrued liabilities As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Customer liabilities $ 6,803 $ 23,486 Accrued insurance 19,456 23,793 Accrued interest 12,069 23,194 Contract losses 1,699 2,660 Legal reserves 4,743 9,233 Other 11,646 16,318 Total accrued liabilities $ 56,416 $ 98,684 We adopted ASC 606, Revenue from Contracts with Customers, as of January 1, 2018 using the modified retrospective approach. Due to the adoption of ASC 606, amounts received from customers in excess of revenue recognized previously presented within customer liabilities in Total accrued liabilities for the year ended December 31, 2017, have prospectively been presented as Contract liabilities within the Company's consolidated balance sheets without restatement to prior periods. See Note 6 for further discussion. Customer liabilities represent amounts due back to a customer. The reduction in customer liabilities is partially due to the settlement of certain liabilities in advance of the closeout of the Civilian Police ("CivPol") contract during the third quarter of calendar year 2018. Contract losses represent our best estimate of forward losses using currently available information and could change in future periods as new facts and circumstances emerge. Changes to the provision for contract losses are presented in Cost of services on our Statement of Operations. Legal matters include reserves related to various lawsuits and claims. See Note 9 for further discussion. Other is comprised primarily of accrued rent and workers' compensation related claims and other balances that are not individually material to the consolidated financial statements. Other long-term liabilities As of September 30, 2018 and December 31, 2017 , Other long-term liabilities were $11.4 million and $13.1 million , respectively. Other long-term liabilities are primarily due to our long-term incentive bonus plan and nonqualified unfunded deferred compensation plan of $2.9 million and $3.3 million as of September 30, 2018 and December 31, 2017 , respectively, and a long-term leasehold obligation related to our Tysons Corner facility in McLean, Virginia, of $2.5 million and $2.8 million as of September 30, 2018 and December 31, 2017 , respectively. Other long-term liabilities also include an uncertain tax benefit of $3.5 million as of September 30, 2018 and December 31, 2017 . See Note 5 for further discussion. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets In January 2018, the Company amended its organizational structure to improve efficiencies within existing businesses, capitalize on new opportunities, continue international growth and expand commercial business. The Company’s three operating and reporting segments, Aviation Engineering, Logistics and Sustainment ("AELS"), Aviation Operations and Life Cycle Management ("AOLC") and DynLogistics, were re-aligned into two operating and reporting segments by combining AELS and AOLC into DynAviation with DynLogistics continuing to operate as a separate segment. Our two operating and reporting segments provide services domestically and in foreign countries primarily under contracts with the U.S. government. Each operating and reportable segment is its own reporting unit and only the DynLogistics reporting unit had a goodwill balance as of September 30, 2018 , which we assess for potential goodwill impairment. The carrying amount of goodwill for DynLogistics was $42.1 million as of both September 30, 2018 and December 31, 2017 . We assess goodwill and other intangible assets with indefinite lives for impairment annually in October or when an event occurs or circumstances change that would suggest a triggering event. If a triggering event is identified, a goodwill impairment test is performed to identify any possible impairment in the period in which the event is identified. In connection with our annual assessment of goodwill during the fourth quarter of each year, we update our key assumptions, including our forecasts of revenue and income for each reporting unit. The projections for these reporting units include significant estimates related to new business opportunities. If we are unsuccessful in obtaining these opportunities in 2018, a triggering event could be identified and a goodwill impairment test would be performed to identify any possible goodwill impairment in the period in which the event is identified. There can be no assurance that the estimates and assumptions regarding forecasted earnings and cash flows, the period of strength of the U.S. defense spending, and other inputs used in forecasting the present value of forecasted cash flows will prove to be accurate projections of future performance. During the nine months ended September 30, 2018 , we did not have a triggering event in any of our reporting units. Amortization expense for customer-related intangibles, other intangibles and finite-lived tradenames was $5.4 million and $16.0 million for the three and nine months ended September 30, 2018 , respectively. Amortization expense for customer-related intangibles, other intangibles and finite-lived tradenames was $8.0 million and $24.0 million for the three and nine months ended September 30, 2017 , respectively. Other intangibles are primarily representative of our capitalized software which had a net carrying value of $1.5 million and $3.2 million as of September 30, 2018 and December 31, 2017 , respectively. Estimated aggregate future amortization expense for finite lived assets subject to amortization are $5.4 million for the three months ending December 31, 2018 , $21.4 million in 2019, $11.1 million in 2020, $0.1 million in 2021, $0.0 million in 2022 and $0.0 million thereafter. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes On December 22, 2017, the President of the United States signed into law the Tax Act. The Tax Act amends the Internal Revenue Code to reduce tax rates and modify policies, credits, and deductions for individuals and businesses. For businesses, the Tax Act creates limitations on interest expense deductions (if certain conditions apply) and reduces the corporate federal tax rate from a maximum of 35% to a flat 21% rate, effective January 1, 2018. The Company is required to value its deferred tax assets and liabilities applying the rates prescribed by the enacted law for the period in which such deferred tax assets and liabilities are expected to reverse. SEC Staff Accounting Bulletin (“SAB”) 118 allows us to provide a provisional estimate of the impacts of the Tax Act due to the complexities involved in accounting for the enactment of the Tax Act. SAB 118 provides a measurement period that should not extend beyond one year from the enactment of the Tax Act to complete the accounting under ASC 740, Income Taxes. Specific impacts of the Tax Act are discussed below. The domestic and foreign components of Income before income taxes are as follows: Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Domestic $ 23,886 $ 7,683 $ 72,967 $ 19,909 Foreign 5,077 336 5,602 2,201 Income before income taxes $ 28,963 $ 8,019 $ 78,569 $ 22,110 Non-current deferred tax assets, net, was $0.9 million and $0.4 million as of September 30, 2018 and December 31, 2017 , respectively. Our effective tax rate ("ETR") was 7.0% and 12.6% for the three and nine months ended September 30, 2018 , respectively. Our ETR was 41.6% and 52.8% for the three and nine months ended September 30, 2017 , respectively. For the three and nine months ended September 30, 2018 , the ETR was primarily driven by a decrease in the corporate federal tax rate effective January 1, 2018 and a reduction in the valuation allowance partially offset by an increase in foreign taxes and pretax book income. Management assesses both the available positive and negative evidence to determine whether it is more likely than not that there will be sufficient sources of future taxable income to recognize deferred tax assets. The Company must also assess whether its valuation allowance analyses are affected by the Tax Act. The following items impacted the valuation allowance due to the enacted Tax Act: • A reduction in deductible interest expense for federal income tax purposes which will create an indefinite lived asset; • The prevention of deferring revenue with respect to unbilled receivables; and • The recognition of revenue it had previously deferred as unbilled receivables over a four-year period pursuant to Internal Revenue Code ("IRC") Section 481. While we anticipate that the Tax Act will result in the Company enhancing its ability to recognize existing deferred tax assets in the future, the Company also anticipates that the Tax Act will create new deferred tax assets that will be subject to future valuation allowance. As such, the Company will remain in a valuation allowance on most domestic deferred tax assets for the period ended September 30, 2018 but will assess the need for valuation allowance each period. As of September 30, 2018 and December 31, 2017 , our valuation allowance was $58.0 million and $66.6 million , respectively. As of September 30, 2018 , we had $4.1 million of total unrecognized tax benefits of which $2.7 million would impact our effective tax rate if recognized. As of December 31, 2017 , we had $2.8 million of total unrecognized tax benefits of which $2.7 million would impact our effective tax rate if recognized. We do not expect the unrecognized tax benefit and any related interest or penalties to be settled within the next twelve months. During the nine months ended September 30, 2018 , we made no estimated federal income tax payments. All of our income taxes paid or refunds received during the nine months ended September 30, 2018 were related to state or foreign jurisdictions. During the nine months ended September 30, 2018 , a tax assessment from the Saudi Arabia Tax Authority ("GAZT") was received, seeking approximately $7.7 million in taxes and penalties specific to an existing audit of a branch location for periods between 2002 to 2013. We filed an initial appeal on the assessment with the GAZT and we previously established an accrual for the more likely than not amount of the estimated tax liability. We will continue to monitor and revise the liability accordingly. |
Contract Balances
Contract Balances | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Contract Balances | Contract Balances Our contract balances consist of accounts receivable, contract assets and contract liabilities. We adopted ASC 606, Revenue from Contracts with Customers, as of January 1, 2018 using the modified retrospective approach. Due to the adoption of ASC 606, amounts previously presented as unbilled receivables in Accounts receivable, net of allowances, for the year ended December 31, 2017 , have prospectively been presented as Contract assets within the Company's consolidated balance sheets without restatement to prior periods. Contract assets primarily consist of unbilled receivables which represent rights to consideration for work completed but not billed as of the reporting date. The balance of unbilled receivables consists of costs and fees that are: (i) billable immediately; (ii) billable on contract completion; or (iii) billable upon other specified events, such as the resolution of a request for equitable adjustment or formal claim. Contract assets as of September 30, 2018 include $14.1 million related to costs incurred on projects for which we are awaiting final funding, definitization or other contract actions in order for us to bill our customer. As of December 31, 2017 , unbilled accounts receivable included $12.0 million related to costs incurred on projects for which we are awaiting final funding, definitization or other contract actions in order for us to bill our customer. As of September 30, 2018 and December 31, 2017 , we had one contract claim outstanding totaling $2.8 million and $2.7 million , respectively, net of reserves. We do not believe we have significant exposure to credit risk as our receivables are primarily with the U.S. government. Due to the adoption of ASC 606, amounts previously presented as customer liabilities in Total accrued liabilities for the year ended December 31, 2017 , have prospectively been presented as Contract liabilities within the Company's consolidated balance sheets without restatement to prior periods. Contract liabilities represent advanced payments, billings in excess of costs and earnings, and deferred revenue amounts. These current and noncurrent contract liabilities are transferred to contract assets once the performance progress has occurred. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. Our contract balances consisted of the following: (Amounts in thousands) September 30, 2018 December 31, 2017 $ Change Accounts receivable, net of allowances $ 119,567 $ 160,770 $ (41,203 ) Unbilled accounts receivable — 191,780 (191,780 ) Contract assets 163,876 — 163,876 Contract liabilities 39,842 — 39,842 During the nine months ended September 30, 2018 : • we reclassified $191.8 million of Unbilled accounts receivable to Contract assets due to the implementation of ASC 606; • we increased Contract assets by $1.6 billion due to the recognition of revenue in calendar year 2018, which included adjustments for changes in estimates arising from a change in the measure of progress, a change in an estimate of the transaction price or contract modifications; • we reclassified $1.6 billion of Contract assets to Accounts receivable when the right to consideration became unconditional; • we recognized revenue of $7.5 million related to our Contract liabilities as of January 1, 2018 . Our allowance for doubtful accounts was $5.1 million as of September 30, 2018 compared to $10.1 million as of December 31, 2017 , and is primarily due to the collection of a majority of the previously reserved outstanding receivables where we operated under a subcontract for a prime contractor on a U.S. government program that ended December 31, 2014 . See Note 9 for further discussion. |
Fair Value of Financial Assets
Fair Value of Financial Assets and Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Assets and Liabilities | Fair Value of Financial Assets and Liabilities ASC 820 – Fair Value Measurements and Disclosures establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1, defined as observable inputs such as quoted prices in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. Fair Value of Financial Instruments Our financial instruments include cash and cash equivalents, accounts receivable, accounts payable, and borrowings. Because of the short-term nature of cash and cash equivalents, accounts receivable, and accounts payable, the fair value of these instruments approximates the carrying value. Our estimate of the fair value of our 11.875% senior secured second lien notes (the "Second Lien Notes"), and New Senior Credit Facility (as defined in Note 8) is based on Level 1 and Level 2 inputs, as defined above. Our estimate of the fair value of our Cerberus 3L Notes (as defined in Note 8) is based on Level 3 inputs, as defined above. We used the following techniques in determining the fair value disclosed for the Cerberus 3L Notes classified as Level 3. The fair value as of September 30, 2018 has been calculated by discounting the expected cash flows using a discount rate of 6.3% . This discount rate is determined using the Moody's credit rating for the Second Lien Notes and reducing the rating one level lower for the Cerberus 3L Notes as they are subordinated to the Second Lien Notes. As Of September 30, 2018 December 31, 2017 (Amounts in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 11.875% senior secured second lien notes $ 384,713 $ 402,025 $ 379,006 $ 401,273 Term loan 127,343 127,343 182,286 182,286 Cerberus 3L notes 33,665 30,404 32,420 30,267 Total indebtedness 545,721 559,772 593,712 613,826 Less current portion of long-term debt — — (54,943 ) (54,943 ) Total long-term debt $ 545,721 $ 559,772 $ 538,769 $ 558,883 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | Debt Debt consisted of the following: As of September 30, 2018 (Amounts in thousands) Carrying Amount Original Issue Discount on Term Loan Deferred Financing Costs, Net Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net 11.875% senior secured second lien notes $ 384,713 $ — $ (876 ) $ 383,837 Term loan 127,343 (6,324 ) (1,511 ) 119,508 Cerberus 3L notes 33,665 — (65 ) 33,600 Total indebtedness 545,721 (6,324 ) (2,452 ) 536,945 Less current portion of long-term debt, net (1) — — — — Total long-term debt, net $ 545,721 $ (6,324 ) $ (2,452 ) $ 536,945 (1) The carrying amount of the current portion of long-term debt as of September 30, 2018 includes the Revolver (as defined below). As of September 30, 2018 , there were no amounts borrowed under the Revolver. As of December 31, 2017 (Amounts in thousands) Carrying Amount Original Issue Discount on Term Loan Deferred Financing Costs, Net Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net 11.875% senior secured second lien notes $ 379,006 $ — $ (1,177 ) $ 377,829 Term loan 182,286 (8,996 ) (2,776 ) 170,514 Cerberus 3L notes 32,420 — (72 ) 32,348 Total indebtedness 593,712 (8,996 ) (4,025 ) 580,691 Less current portion of long-term debt, net (2) (54,943 ) 1,110 181 (53,652 ) Total long-term debt, net $ 538,769 $ (7,886 ) $ (3,844 ) $ 527,039 (2) The carrying amount of the current portion of long-term debt as of December 31, 2017 includes our Excess Cash Flow Payment of $54.9 million , which was paid on March 21, 2018 . The original issue discount on the Term Loan facility under the New Senior Credit Facility (the "Term Loan") and deferred financing costs are amortized through interest expense. Amortization related to the original issue discount was $0.9 million and $2.7 million during the three and nine months ended September 30, 2018 , respectively, and was $0.9 million and $2.7 million during the three and nine months ended September 30, 2017 . Amortization related to deferred financing costs was $0.4 million and $1.3 million during the three and nine months ended September 30, 2018 , respectively, and was $0.5 million and $1.4 million during the three and nine months ended September 30, 2017 , respectively. Deferred financing costs for the nine months ended September 30, 2018 were reduced by $0.2 million related to the pro rata write-off of deferred financing costs to loss on early extinguishment of debt as a result of the $54.9 million Excess Cash Flow principal payment made on the Term Loan on March 21, 2018 , which was the only principal payment made on the Term Loan during the nine months ended September 30, 2018 . Deferred financing costs for the nine months ended September 30, 2017 were reduced an immaterial amount related to the pro rata write-off of deferred financing costs to loss on early extinguishment of debt as a result of the $25.1 million in principal prepayment made on the Term Loan. New Senior Credit Facility On July 7, 2010 , we entered into a senior secured credit facility (the "Senior Credit Facility"), with a banking syndicate and Bank of America, N.A. as Administrative Agent (the "Agent"). On April 30, 2016 , we entered into Amendment No. 5 ("Amendment No. 5") to the Senior Credit Facility which provided for a new senior secured credit facility (the "New Senior Credit Facility") upon the satisfaction of certain conditions. On June 15, 2016 , we satisfied the conditions set forth in Amendment No. 5 and the New Senior Credit Facility became effective. The New Senior Credit Facility is secured by substantially all of our assets and guaranteed by substantially all of our subsidiaries. As of September 30, 2018 , the New Senior Credit Facility provided for the following: • a $127.3 million Term Loan; • a $85.8 million class B revolving facility (the "Revolver"); and • up to $15.0 million in incremental revolving facilities provided by and at the discretion of certain non-debt fund affiliates that are controlled by Cerberus (as defined herein), which shall rank pari passu with, and be on the same terms as, the Revolver. As of September 30, 2018 and December 31, 2017 , the available borrowing capacity under the New Senior Credit Facility was approximately $66.5 million and $65.5 million , respectively, and included $19.3 million and $20.3 million , respectively, in issued letters of credit. Amounts borrowed under the Revolver are used to fund operations. As of September 30, 2018 and December 31, 2017 there were no amounts borrowed under the Revolver. The Revolver and the Term Loan mature on July 7, 2019 and July 7, 2020 , respectively. Interest Rates on Term Loan & Revolver The interest rate per annum applicable to the Term Loan is, at our option, equal to either the Base Rate or the Eurocurrency Rate, in each case, plus (i) 5.00% in the case of Base Rate loans and (ii) 6.00% in the case of Eurocurrency Rate loans. The interest rate per annum applicable to the Revolver is, at our option, equal to either a Base Rate or a Eurocurrency Rate plus (i) a range of 4.50% to 5.00% based on the First Lien Secured Leverage Ratio in the case of Base Rate loans and (ii) a range of 5.50% to 6.00% based on the First Lien Secured Leverage Ratio in the case of Eurocurrency Rate loans. The First Lien Secured Leverage Ratio is the ratio of total first lien secured consolidated debt (net of up to $75 million of unrestricted cash and cash equivalents) to consolidated earnings before interest, taxes, depreciation and amortization ("Consolidated EBITDA"), as defined in the New Senior Credit Facility. The variable Base Rate has a floor of 2.75% and the variable Eurocurrency Rate has a floor of 1.75% . Interest payments on both the Term Loan and Revolver are payable at the end of the interest period as defined in the New Senior Credit Facility, but not less than quarterly. As of September 30, 2018 and December 31, 2017 , the applicable interest rate on the Term Loan was 8.08% and 7.75% , respectively. Interest Rates on Letter of Credit Subfacility and Unused Commitment Fees All of our letters of credit under the New Senior Credit Facility are subject to a 0.25% fronting fee. The letter of credit subfacility bears interest at an applicable rate that ranges from 5.50% to 6.00% with respect to the Revolver commitments. The unused commitment fee on our Revolver ranges from 0.50% to 0.75% on the undrawn amount of the facility depending on the First Lien Secured Leverage Ratio. Interest payments on both the letter of credit subfacility and unused commitments are payable quarterly in arrears. We will also pay customary letter of credit and agency fees. The applicable interest rate for our letter of credit subfacility was 5.50% as of September 30, 2018 and December 31, 2017 , respectively. The applicable interest rate for our unused commitment fees was 0.50% as of September 30, 2018 and December 31, 2017 . Principal Payments The credit agreement governing the New Senior Credit Facility contains an annual requirement to submit a portion of our Excess Cash Flow, as defined in the credit agreement, within five business days of filing annual financial statements, as additional principal payments. Based on our annual financial results for the years ended December 31, 2017 and 2016, we made additional principal payments as required under the Excess Cash Flow provisions of the New Senior Credit Facility of $54.9 million on March 21, 2018 and $25.1 million on April 4, 2017 . Certain other transactions can trigger mandatory principal payments such as tax refunds, a disposition of a portion of our business or a significant asset sale. We had no such transactions during the nine months ended September 30, 2018 or September 30, 2017 . The New Senior Credit Facility requires us to prepay outstanding term loans, subject to certain exceptions, with: • 100% of excess cash flow (as defined in Amendment No. 5) less the amount of certain voluntary prepayments as described in Amendment No. 5; and • 100% of the net cash proceeds of all non-ordinary course asset sales and casualty and condemnation events, if we do not reinvest or commit to reinvest those proceeds in assets to be used in our business or to make certain other permitted investments within nine months (and, if committed to be so reinvested, actually reinvested within twelve months). We are permitted to voluntarily repay outstanding loans under the New Senior Credit Facility at any time without premium or penalty, other than customary "breakage" costs with respect to Eurocurrency Rate Loans. Maturity and Principal Amortization We were required to make principal amortization payments with respect to the Term Loan of $22.5 million on or prior to June 15, 2017 and $22.5 million on or prior to June 15, 2018 , which amounts were fully satisfied as a result of the additional principal payments of $54.9 million and $25.1 million made on March 21, 2018 and April 4, 2017 , respectively, under the Excess Cash Flow requirement discussed above. The principal amount of the Term Loan may be reduced as a result of prepayments, with the remaining amount payable on July 7, 2020 . Guarantee and Security The guarantors of the obligations under the New Senior Credit Facility are identical to those under the Second Lien Notes and the Cerberus 3L Notes. See Note 12. The New Senior Credit Facility is secured on a first lien basis by the same collateral that secures the Second Lien Notes on a second lien basis and the Cerberus 3L Notes on a third lien basis. Covenants and Other Terms The New Senior Credit Facility contains a number of financial, as well as non-financial, affirmative and negative covenants that we believe are usual and customary. Among other things, the New Senior Credit Facility requires us to maintain a maximum total leverage ratio and a minimum interest coverage ratio. The total leverage ratio is the ratio of Consolidated Total Debt, as defined in Amendment No. 5 (which definition excludes debt under the Cerberus 3L Notes), less unrestricted cash and cash equivalents (up to $75.0 million ) to Consolidated EBITDA, as defined in Amendment No. 5, for the applicable period. The maximum total leverage ratio was 4.75 to 1.0 for the period ended September 30, 2018 . The interest coverage ratio is the ratio of Consolidated EBITDA to Consolidated Interest Expense, as defined in Amendment No. 5 (which provides that interest expense with respect to the Cerberus 3L Notes is excluded). The minimum interest coverage ratio was 1.70 to 1.0 for the period ended September 30, 2018 . The New Senior Credit Facility requires, solely for the benefit of the lenders under the Revolver, for us to maintain minimum liquidity (based on availability of revolving credit commitments plus unrestricted cash and cash equivalents) as of the end of each fiscal quarter ending after December 31, 2017 of not less than $50 million . The credit agreement governing the New Senior Credit Facility also contains customary representations and warranties and events of default. As of September 30, 2018 and December 31, 2017 , we were in compliance with our financial maintenance covenants under the New Senior Credit Facility. We expect, based on current projections and estimates, to be in compliance with our covenants in the New Senior Credit Facility (including our financial maintenance covenants), and the covenants in the Second Lien Notes and the Cerberus 3L notes, further discussed below, for the next twelve months. Second Lien Notes On June 15, 2016 , $415.7 million principal amount of the 10.375% Senior Notes due 2017 (the "Senior Unsecured Notes") were exchanged for $45.0 million cash and $370.6 million aggregate principal amount of newly issued Second Lien Notes due November 30, 2020 , which are governed by the terms of the indenture (the "Indenture"), among DynCorp International, Holdings, as parent guarantor, DynCorp International’s subsidiaries that currently guarantee the New Senior Credit Facility, as subsidiary guarantors (the "Subsidiary Guarantors"), and Wilmington Trust, National Association, as trustee and collateral agent. Interest on the Second Lien Notes accrues at the rate of 11.875% per annum, comprised of 10.375% per annum in cash and 1.500% per annum payable in kind ("PIK," and such interest "PIK Interest"). The cash portion of the interest on the Second Lien Notes is payable in cash and the PIK Interest on the Second Lien Notes is payable in kind, each semi-annually in arrears on January 1 and July 1, commencing on July 1, 2016 . During the three and nine months ended September 30, 2018 , PIK interest converted into the carrying amount of the Second Lien Notes was $2.9 million and $5.7 million , respectively. During the three and nine months ended September 30, 2017 , PIK interest converted into the carrying amount of the Second Lien Notes was $2.8 million and $5.6 million , respectively. PIK interest accrued on the Second Lien Notes was $1.4 million and $2.8 million as of September 30, 2018 and December 31, 2017 , respectively. Covenants and Events of Default The Indenture contains a number of non-financial affirmative and negative covenants we believe are usual and customary. These covenants are subject to a number of important exceptions and qualifications as set forth in the Indenture. In addition, the Indenture required DynCorp International to make an amortization payment of $22.5 million principal amount of the Term Loan under the New Senior Credit Facility no later than June 15, 2018 , which amount was fully satisfied as a result of the Company’s $54.9 million excess cash flow payment discussed above. The Indenture contains customary events of default, including for failure to pay other indebtedness in a total amount exceeding $10.0 million after final maturity of such indebtedness. Optional Redemption On and after July 1, 2018 , the Second Lien Notes are redeemable at the option of the Company, in whole or in part, at any time and from time to time, upon not less than 30 nor more than 60 days’ prior notice, at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid cash interest, if any, together with an amount of cash equal to all accrued and unpaid PIK Interest to but excluding the redemption date: Period Redemption Price July 1, 2018 through June 30, 2019 103.00 % July 1, 2019 and thereafter 100.00 % Cerberus 3L Notes On June 15, 2016 , DynCorp Funding LLC, a limited liability company managed by Cerberus Capital Management, L.P. ("Cerberus"), entered into a Third Lien Credit Agreement (the "Third Lien Credit Agreement") with us. Under the Third Lien Credit Agreement, DynCorp Funding LLC has made a $30 million term loan to us (the "Cerberus 3L Notes"). The proceeds of the Cerberus 3L Notes were fully utilized and were restricted to pay fees and expenses (including reimbursement of out-of-pocket expenses) in support of or related to the Company’s Global Advisory Group. Interest Rate and Fees The interest rate per annum applicable to the Cerberus 3L Notes is 5.00% , payable in kind on a quarterly basis. During the three and nine months ended September 30, 2018 , PIK interest converted into the carrying amount of the Cerberus 3L Notes was $0.4 million and $1.1 million , respectively. During the three and nine months ended September 30, 2017 , PIK interest converted into the carrying amount of the Cerberus 3L Notes was $0.4 million and $1.2 million , respectively. Prepayments The Cerberus 3L Notes do not require any mandatory prepayments, and, subject to the terms of the Intercreditor Agreement (as defined below), we are permitted to voluntarily repay outstanding loans under the Cerberus 3L Notes without premium or penalty. The New Senior Credit Facility and the Indenture governing the Second Lien Notes restrict us from making any principal payments on the Cerberus 3L Notes. Maturity and Amortization The Cerberus 3L Notes do not require any mandatory amortization payments prior to maturity and the outstanding principal amounts shall be payable on June 15, 2026 . Covenants and Events of Default The Cerberus 3L Notes include non-financial affirmative and negative covenants consistent with the covenants set forth in the Second Lien Notes; provided that each "basket" or "cushion" set forth in the covenants is at least 25% less restrictive than the corresponding provision set forth in the Second Lien Notes. The Third Lien Credit Agreement contains customary events of default, including for failure to pay other debt in a total amount exceeding $12.5 million after final maturity or acceleration of such indebtedness. Intercreditor Agreement The collateral granted to secure the indebtedness under the New Senior Credit Facility, on a first-priority basis, has also been granted to secure (a) the Second Lien Notes and the guarantees under the Indenture on a second-priority basis and (b) the Cerberus 3L Notes and the guarantees under the Third Lien Credit Agreement on a third-priority basis. The relative priority of the liens afforded to the New Senior Credit Facility, Second Lien Notes and Cerberus 3L Notes and the subordination in right of payment of the Cerberus 3L Notes to the New Senior Credit Facility and the Second Lien Notes are set forth in the Intercreditor Agreement (the "Intercreditor Agreement"), dated as of June 15, 2016 , by and among the administrative agent under the New Senior Credit Facility, the collateral agent under the Indenture, and the collateral agent under the Third Lien Credit Agreement. Debt Maturity Schedule The following table represents our contractual maturity schedule associated with our debt as of September 30, 2018 : Calendar Years (1) (Amounts in thousands) 2018 2019 2020 2021 2022 Thereafter Total 11.875% senior secured second lien notes $ — $ — $ 384,713 $ — $ — $ — $ 384,713 Term loan (2) — — 127,343 — — — 127,343 Cerberus 3L notes — — — — — 33,665 33,665 Total debt $ — $ — $ 512,056 $ — $ — $ 33,665 $ 545,721 (1) As of September 30, 2018 , there were no amounts outstanding under the Revolver. (2) On October 19, 2018 , we made a voluntary principal payment of $50.0 million on the Term Loan. Excess cash flow principal payments are determined annually. Accordingly, after giving effect to this voluntary prepayment, the required payments in the calendar year 2020 and the Total column will be $77,343 . |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Commitments We have operating leases for the use of real estate and certain property and equipment which are either non-cancelable, cancelable only by the payment of penalties or cancelable upon one month’s notice. All lease payments are based on the lapse of time. There are no purchase options on operating leases at favorable terms, but most leases have one or more renewal options. Certain real estate leases are subject to annual escalations for increases in base rents, utilities and property taxes. Lease rental expense was $13.0 million and $34.0 million for the three and nine months ended September 30, 2018 , respectively. Lease rental expense was $10.5 million and $31.7 million for the three and nine months ended September 30, 2017 , respectively. We have no significant long-term purchase agreements with service providers. Contingencies General Legal Matters We are involved in various lawsuits and claims that arise in the normal course of business. We have established reserves for matters in which it is believed that losses are probable and can be reasonably estimated. Reserves related to these matters have been recorded in Other accrued liabilities totaling approximately $4.7 million and $9.2 million as of September 30, 2018 and December 31, 2017 , respectively. We believe that appropriate accruals have been established for such matters based on information currently available; however, some of the matters may involve compensatory, punitive, or other claims or sanctions that, if granted, could require us to pay damages or make other expenditures in amounts that could not be reasonably estimated at September 30, 2018 . These accrued reserves represent the best estimate of amounts believed to be our liability in a range of expected losses. In addition to matters that are considered probable and that can be reasonably estimated, we also have certain matters considered reasonably possible. Other than matters disclosed below, we believe the aggregate range of possible loss related to matters considered reasonably possible was not material as of September 30, 2018 . Litigation is inherently unpredictable and unfavorable resolutions could occur. Accordingly, it is possible that an adverse outcome from such proceedings could (i) exceed the amounts accrued for probable matters; or (ii) require a reserve for a matter we did not originally believe to be probable or could be reasonably estimated. Such changes could be material to our financial condition, results of operations and cash flows in any particular reporting period. Our view of the matters not specifically disclosed could possibly change in future periods as events thereto unfold. Pending Litigation and Claims In October 2007 , we entered into a subcontract with Northrop Grumman Technical Services, Inc. (“Northrop”) to support Northrop’s prime contract with the DoD Counter Narcotics Terrorism Program Office ("CNTPO"). We performed the services requested by Northrop, the government determined that it received “intended quality and skills of personnel,” and Northrop paid our invoices until July 2014 . Subsequent to July 2014 , Northrop stopped paying our periodic invoices. The contract operations ended on December 31, 2014 . In March 2015 , Northrop filed a civil action against us to obtain documents regarding our invoices and now asserts approximately $5.0 million in damages. We believe the damages asserted by Northrop represent a loss contingency that is remote. In September 2015 , we filed an Answer and Counterclaim seeking approximately $41.0 million for unpaid invoices. We have collected a majority of these funds and we continue to seek payment on the remaining balance. On February 24, 2012 , we were advised by the Department of Justice Civil Litigation Division (the "Civil Division”) that they are conducting an investigation regarding the CivPol and Department of State Advisor Support Mission ("DASM") contracts in Iraq and Corporate Bank, a former subcontractor. The issues include allowable hours worked under a specific task order and invoices to the Department of State for certain hotel leasing, labor rates and overhead within the 2003 to 2008 timeframe. Since 2012 , the Company has been in discussions with the Civil Division, and has been cooperating with the Civil Division’s requests for information. On July 19, 2016 , the Civil Division filed a civil lawsuit asserting violations of underlying contract terms and also the False Claims Act. If our operations are found to be in violation of any laws or government regulations, we may be subject to penalties, damages or fines, any or all of which could adversely affect our financial results; however, the complaint does not include any specific monetary demand and as such we are unable to estimate a range of loss at this time. We are continuing to evaluate this lawsuit and at this time believe the potential for penalties, damages or fines resulting from this matter do not represent a probable loss contingency. U.S. Government Investigations We primarily sell our services to the U.S. government. These contracts are subject to extensive legal and regulatory requirements, and we are occasionally the subject of investigations by various agencies of the U.S. government who investigate whether our operations are being conducted in accordance with these requirements. Such investigations could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed on us, or could lead to suspension or debarment from future U.S. government contracting. U.S. government investigations often take years to complete and may result in adverse action against us. We believe that any adverse actions arising from such matters could have a material effect on our ability to invoice and receive timely payment on our contracts, perform contracts or compete for contracts with the U.S. government and could have a material effect on our operating performance. U.S. Government Audits Our contracts are regularly audited by the Defense Contract Audit Agency ("DCAA") and other government agencies. These agencies review our contract performance, cost structure and compliance with applicable laws, regulations and standards. The government also reviews the adequacy of, and our compliance with, our internal control systems and policies, including our purchasing, property, estimating, accounting and material management business systems. Any costs found to be improperly allocated to a specific contract will not be reimbursed. The DCAA will in some cases issue a Form 1 representing the non-conformance of such costs or requirements as it relates to our government contracts. If we are unable to provide sufficient evidence of the costs in question, the costs could be suspended or disallowed which could be material to our financial statements. Government contract payments received by us for direct and indirect costs are subject to adjustment after government audit and repayment to the government if the payments exceed allowable costs as defined in the government regulations. We have received a series of audit reports from the DCAA related to their examination of certain incurred, invoiced and reimbursed costs on the Logistics Civil Augmentation Program IV ("LOGCAP IV") for contract years 2009 to 2016. For contract years 2009 to 2012, through our negotiation efforts with the Contracting Officer the issues have been resolved, resulting in final settlements of all audited costs of approximately $0.8 million of questioned costs. For contract years 2013 and 2014, we have received DCAA’s final audit report, which questions approximately $3.9 million of costs. We are in discussion with the Contracting Officer and we believe that the settlement of these outstanding amounts will not be material to our financial statements. Additionally, the DCAA has recently completed its audit of contract years 2015 and 2016, and LOGCAP IV had no questioned contract costs. Foreign Contingencies On January 22, 2014 , a tax assessment from the Large Tax Office of the Afghanistan Ministry of Finance ("MOF") was received, seeking approximately $64.2 million in taxes and penalties specific to one of our business licenses in Afghanistan for periods between 2009 to 2012. The majority of this assessment was income tax related; however, $10.2 million of the assessed amount is non-income tax related and represents loss contingencies that we consider reasonably possible. We filed our initial appeal of the assessment with the MOF on February 19, 2014 . In May 2014 , the Afghanistan Supreme Court issued an opinion in our favor for the income tax related issue which totaled approximately $54.0 million . In October 2018, we received a formal release from the MOF for the entire amount. Credit Risk We are subject to concentrations of credit risk primarily by virtue of our accounts receivable. Departments and agencies of the U.S. federal government account for all but minor portions of our customer base, minimizing this credit risk. Furthermore, the significance of any one contract can change as our business expands or contracts. Additionally, as contract modifications, contract extensions or other contract actions occur, the profitability of any one contract can become more or less significant to the Company. As contracts are recompeted, there is the potential for the size, contract type, contract structure or other contract elements to materially change from the original contract resulting in significant changes to the scope, scale, profitability or magnitude of accounts receivable of the new recompeted contract as compared to the original contract. We continuously review all accounts receivable and record provisions for doubtful accounts when necessary. Risk Management Liabilities and Reserves We are insured for domestic workers' compensation liabilities and a significant portion of our employee medical costs. However, we bear risk for a portion of claims pursuant to the terms of the applicable insurance contracts. We account for these programs based on actuarial estimates of the amount of loss inherent in that period’s claims, including losses for which claims have not been reported of $7.4 million and $7.7 million as of September 30, 2018 and December 31, 2017 , respectively. These loss estimates rely on actuarial observations of ultimate loss experience for similar historical events. We limit our risk by purchasing stop-loss insurance policies for significant claims incurred for both domestic workers' compensation liabilities and medical costs. Our exposure under the stop-loss policies for domestic workers' compensation and medical costs is limited based on fixed dollar amounts. For domestic workers' compensation and employers' liability under state and federal law, the fixed dollar amount of stop-loss coverage is $1.0 million per occurrence on most policies, but is $0.25 million per occurrence on a California-based policy. For medical costs, the fixed dollar amount of stop-loss coverage is $0.4 million for total costs per covered participant per calendar year. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information In January 2018, the Company amended its organizational structure. The Company's previous three operating and reporting segments, AELS, AOLC and DynLogistics, were re-aligned into two operating and reporting segments by combining AELS and AOLC into DynAviation with DynLogistics continuing to operate as a separate segment. The DynAviation and DynLogistics segments operate principally within a regulatory environment subject to governmental contracting and accounting requirements, including Federal Acquisition Regulations, Cost Accounting Standards and audits by various U.S. federal agencies. The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements: Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue DynAviation $ 250,998 $ 307,864 $ 865,684 $ 886,085 DynLogistics 274,893 195,810 743,663 551,791 Headquarters / Other (1) (869 ) (700 ) 329 (743 ) Total revenue $ 525,022 $ 502,974 $ 1,609,676 $ 1,437,133 Operating income (loss) DynAviation $ 21,152 $ 26,415 $ 72,368 $ 66,060 DynLogistics 35,788 9,125 83,991 50,424 Headquarters / Other (2) (13,433 ) (10,344 ) (32,010 ) (42,235 ) Total operating income (loss) $ 43,507 $ 25,196 $ 124,349 $ 74,249 Depreciation and amortization DynAviation $ 272 $ 525 $ 1,057 $ 1,139 DynLogistics 632 258 1,700 594 Headquarters / Other 6,009 8,537 17,878 25,512 Total depreciation and amortization (3) $ 6,913 $ 9,320 $ 20,635 $ 27,245 (1) Headquarters revenue primarily represents revenue earned on shared services arrangements for general and administrative services provided to unconsolidated joint ventures and elimination of intercompany items between segments. (2) Headquarters operating expenses primarily relate to amortization of intangible assets and other costs that are not allocated to segments and are not billable to our U.S. government customers, partially offset by equity method investee income. (3) Includes amounts included in Cost of services of $0.9 million and $2.6 million and for the three and nine months ended September 30, 2018 , respectively, and $0.5 million and $1.3 million for the three and nine months ended September 30, 2017 , respectively. The following is a summary of the assets of the reportable segments reconciled to the amounts reported in the consolidated financial statements: As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Assets DynAviation $ 177,630 $ 244,231 DynLogistics 239,213 243,281 Headquarters / Other (1) 299,367 248,205 Total assets $ 716,210 $ 735,717 (1) Assets primarily include cash, investments in unconsolidated subsidiaries, and intangible assets (excluding goodwill). |
Related Parties, Joint Ventures
Related Parties, Joint Ventures and Variable Interest Entities | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Parties, Joint Ventures and Variable Interest Entities | Related Parties, Joint Ventures and Variable Interest Entities Consulting Fee We have a Master Consulting and Advisory Services agreement ("COAC Agreement") with Cerberus Operations and Advisory Company, LLC ("COAC") where, pursuant to the terms of the agreement, they make personnel available to us for the purpose of providing reasonably requested business advisory services. The services are priced on a case by case basis depending on the requirements of the project and agreements in pricing. We incurred $0.1 million and $0.2 million of consulting fees on a gross basis before considering the effect of our contract mix which provides for partial recovery in conjunction with the COAC Agreement, during the three and nine months ended September 30, 2018 , respectively, and $1.1 million and $3.6 million during the three and nine months ended September 30, 2017 , respectively. The New Senior Credit Facility permits payments under the COAC Agreement or any transaction contemplated thereby not to exceed $6.0 million per fiscal year with respect to executives seconded from COAC and personnel of COAC that provide services to us at cost on a weekly, monthly or pro-rated basis. Certain members of executive management and board members of the Company and seconded COAC individuals may have agreements and conduct business with Cerberus and its affiliates for which they receive compensation. We recognize such compensation as an administrative expense in the consolidated financial statements. Joint Ventures and Variable Interest Entities We account for our investments in variable interest entities ("VIEs") in accordance with ASC 810 - Consolidation . In cases where we have (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the VIE that could potentially be significant or the right to receive benefits from the entity that could potentially be significant to the VIE, we consolidate the entity. We consolidated DynCorp International FZ - LLC ("DIFZ") based on the aforementioned criteria. Alternatively, in cases where all of the aforementioned criteria are not met, the investment is accounted for under the equity method. As of September 30, 2018 , we accounted for Partnership for Temporary Housing LLC ("PaTH") and Global Linguist Solutions ("GLS") as equity method investments. We present our share of the PaTH and GLS earnings in (Loss) earnings from equity method investees as these joint ventures are considered operationally integral. Receivables due from our unconsolidated joint ventures totaled $0.1 million as of both September 30, 2018 and December 31, 2017 . These receivables are a result of items purchased and services rendered by us on behalf of our unconsolidated joint ventures. We have assessed these receivables as having minimal collection risk based on our historic experience with these joint ventures and our inherent influence through our ownership interest. We did not incur cost or earn revenue from services provided to our unconsolidated joint ventures during the three and nine months ended September 30, 2018 . We recognized $0.2 million and $0.6 million in cost of services and did not earn revenue from our unconsolidated joint ventures during the three and nine months ended September 30, 2017 , respectively. Additionally, we recognized $0.1 million of losses and $0.2 million in equity method income (includes operationally integral and non-integral income) during the three and nine months ended September 30, 2018 and $0.1 million in equity method income during the three and nine months ended September 30, 2017 . GLS’ revenue was $13.4 million and $39.3 million during the three and nine months ended September 30, 2018 , respectively, and $10.4 million and $26.3 million during the three and nine months ended September 30, 2017 . GLS’ operating and net income was $0.9 million and $2.9 million during the three and nine months ended September 30, 2018 . GLS' operating and net income was $0.3 million and operating loss was $2.1 million during the three and nine months ended September 30, 2017 , respectively. We currently hold one promissory note included in Other assets on our consolidated balance sheet from Palm Trading Investment Corp, which had an aggregate initial value of $9.2 million . The loan balance outstanding was $1.8 million and $2.0 million as of September 30, 2018 and December 31, 2017 , respectively, reflecting the initial value plus accrued interest, less non-cash dividend payments against the promissory note. The fair value of the note receivable is not materially different from its carrying value. As discussed above and in accordance with ASC 810 - Consolidation , we consolidate DIFZ. The following tables present selected financial information for DIFZ as of September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and September 30, 2017 : As Of (Amounts in millions) September 30, 2018 December 31, 2017 Assets $ 16.2 $ 4.5 Liabilities 13.1 0.9 Three Months Ended Nine Months Ended (Amounts in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue $ 43.5 $ 43.4 $ 128.8 $ 127.9 The following tables present selected financial information for our equity method investees as of September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and September 30, 2017 : As Of (Amounts in millions) September 30, 2018 December 31, 2017 Current assets $ 17.6 $ 28.2 Total assets 17.6 28.2 Current liabilities 6.1 11.6 Total liabilities 6.1 11.6 Three Months Ended Nine Months Ended (Amounts in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue $ 13.4 $ 10.7 $ 42.7 $ 27.3 Gross profit (loss) 0.9 0.4 3.6 (2.5 ) Net income (loss) 0.7 0.4 3.5 (2.3 ) Many of our joint ventures and VIEs only perform on a single contract. The modification or termination of a contract under a joint venture or VIE could trigger an impairment in the fair value of our investment in these entities. In the aggregate, our maximum exposure to losses as a result of our investment consists of our (i) $2.1 million investment in unconsolidated joint ventures, (ii) $0.1 million in receivables from our unconsolidated joint ventures, (iii) $1.8 million note receivable from Palm Trading Investment Corp. and (iv) contingent liabilities that were neither probable nor reasonably estimable as of September 30, 2018 . |
Consolidating Financial Stateme
Consolidating Financial Statements of Subsidiary Guarantors | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidating Financial Statements of Subsidiary Guarantors | Consolidating Financial Statements of Subsidiary Guarantors The Second Lien Notes issued by DynCorp International Inc. ("Subsidiary Issuer"), the New Senior Credit Facility and the term loan under the Third Lien Credit Agreement are fully and unconditionally guaranteed, jointly and severally, by the Company ("Parent") and the following domestic subsidiaries of Subsidiary Issuer: DynCorp International LLC, DTS Aviation Services LLC, DynCorp Aerospace Operations LLC, DynCorp International Services LLC, DIV Capital Corporation, Dyn Marine Services of Virginia LLC, Services International LLC, Worldwide Management and Consulting Services LLC, Worldwide Recruiting and Staffing Services LLC, Heliworks LLC, Phoenix Consulting Group, LLC, Casals & Associates, Inc., Culpeper National Security Solutions LLC, and Highground Global, Inc. ("Subsidiary Guarantors"). Each of the Subsidiary Issuer and the Subsidiary Guarantors is 100% owned by the Company. Under the Indenture governing the Second Lien Notes, a guarantee of a Subsidiary Guarantor would terminate upon the following customary circumstances: (i) the sale of the capital stock of such Subsidiary Guarantor if such sale complies with the indenture; (ii) the designation of such Subsidiary Guarantor as an unrestricted subsidiary; (iii) if such Subsidiary Guarantor no longer guarantees certain other indebtedness of the Subsidiary Issuer or (iv) the defeasance or discharge of the indenture. The following condensed consolidating financial statements present (i) unaudited condensed consolidating balance sheets as of September 30, 2018 and December 31, 2017 , (ii) unaudited condensed consolidating statements of operations and comprehensive income for the three and nine months ended September 30, 2018 and September 30, 2017 , (iii) unaudited condensed consolidating statements of cash flows for the nine months ended September 30, 2018 and September 30, 2017 and (iii) elimination entries necessary to consolidate Parent and its subsidiaries. The Parent company, the Subsidiary Issuer, the combined Subsidiary Guarantors and the combined subsidiary non-guarantors account for their investments in subsidiaries using the equity method of accounting; therefore, the Parent column reflects the equity income of the subsidiary and its subsidiary guarantors, and subsidiary non-guarantors. Additionally, the Subsidiary Guarantors’ column reflects the equity income of its subsidiary non-guarantors. DynCorp International Inc. is considered the Subsidiary Issuer as it issued the Second Lien Notes. Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Operations Information For the Three Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Revenue $ — $ — $ 528,022 $ 47,099 $ (50,099 ) $ 525,022 Cost of services — — (457,789 ) (46,522 ) 50,041 (454,270 ) Selling, general and administrative expenses — — (21,108 ) (111 ) 56 (21,163 ) Depreciation and amortization expense — — (5,963 ) (61 ) 2 (6,022 ) Loss from equity method investees — — (60 ) — — (60 ) Operating income — — 43,102 405 — 43,507 Interest expense — (15,821 ) (376 ) — — (16,197 ) Interest income — — 863 — — 863 Equity in income of consolidated subsidiaries 26,645 36,929 76 — (63,650 ) — Other income (expense), net — — 804 (14 ) — 790 Income before income taxes 26,645 21,108 44,469 391 (63,650 ) 28,963 Benefit (provision) for income taxes — 5,537 (7,540 ) (37 ) — (2,040 ) Net income 26,645 26,645 36,929 354 (63,650 ) 26,923 Noncontrolling interests — — — (278 ) — (278 ) Net income attributable to Delta Tucker Holdings, Inc. $ 26,645 $ 26,645 $ 36,929 $ 76 $ (63,650 ) $ 26,645 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Operations Information For the Three Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Revenue $ — $ — $ 506,037 $ 48,103 $ (51,166 ) $ 502,974 Cost of services — — (451,480 ) (47,457 ) 51,141 (447,796 ) Selling, general and administrative expenses — — (21,150 ) (114 ) 21 (21,243 ) Depreciation and amortization expense — — (8,621 ) (174 ) 3 (8,792 ) Earnings from equity method investees — — 53 — — 53 Operating income — — 24,839 358 (1 ) 25,196 Interest expense — (16,454 ) (695 ) — — (17,149 ) Interest income — — 14 1 — 15 Equity in income of consolidated subsidiaries 4,386 15,081 14 — (19,481 ) — Other expense, net — — (27 ) (16 ) — (43 ) Income (loss) before income taxes 4,386 (1,373 ) 24,145 343 (19,482 ) 8,019 Benefit (provision) for income taxes — 5,759 (9,063 ) (34 ) — (3,338 ) Net income 4,386 4,386 15,082 309 (19,482 ) 4,681 Noncontrolling interests — — — (295 ) — (295 ) Net income attributable to Delta Tucker Holdings, Inc. $ 4,386 $ 4,386 $ 15,082 $ 14 $ (19,482 ) $ 4,386 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Operations Information For the Nine Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Revenue $ — $ — $ 1,619,342 $ 140,892 $ (150,558 ) $ 1,609,676 Cost of services — — (1,407,418 ) (139,353 ) 150,480 (1,396,291 ) Selling, general and administrative expenses — — (70,946 ) (316 ) 70 (71,192 ) Depreciation and amortization expense — — (17,874 ) (187 ) 8 (18,053 ) Earnings from equity method investees — — 209 — — 209 Operating income — — 123,313 1,036 — 124,349 Interest expense — (47,889 ) (1,379 ) — — (49,268 ) Loss on early extinguishment of debt — (239 ) — — — (239 ) Interest income — — 1,793 3 — 1,796 Equity in income of consolidated subsidiaries 67,862 99,146 131 — (167,139 ) — Other income (expense), net — — 1,955 (24 ) — 1,931 Income before income taxes 67,862 51,018 125,813 1,015 (167,139 ) 78,569 Benefit (provision) for income taxes — 16,844 (26,667 ) (101 ) — (9,924 ) Net income 67,862 67,862 99,146 914 (167,139 ) 68,645 Noncontrolling interests — — — (783 ) — (783 ) Net income attributable to Delta Tucker Holdings, Inc. $ 67,862 $ 67,862 $ 99,146 $ 131 $ (167,139 ) $ 67,862 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Operations Information For the Nine Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Revenue $ — $ — $ 1,447,557 $ 144,725 $ (155,149 ) $ 1,437,133 Cost of services — — (1,269,058 ) (142,973 ) 155,107 (1,256,924 ) Selling, general and administrative expenses — — (79,848 ) (314 ) 33 (80,129 ) Depreciation and amortization expense — — (25,423 ) (522 ) 9 (25,936 ) Earnings from equity method investees — — 105 — — 105 Operating income — — 73,333 916 — 74,249 Interest expense — (51,265 ) (2,363 ) — — (53,628 ) Loss on early extinguishment of debt — (24 ) — — — (24 ) Interest income — — 35 4 — 39 Equity in income of consolidated subsidiaries 9,575 42,914 91 — (52,580 ) — Other income, net — — 1,417 57 — 1,474 Income (loss) before income taxes 9,575 (8,375 ) 72,513 977 (52,580 ) 22,110 Benefit (provision) for income taxes — 17,950 (29,599 ) (28 ) — (11,677 ) Net income 9,575 9,575 42,914 949 (52,580 ) 10,433 Noncontrolling interests — — — (858 ) — (858 ) Net income attributable to Delta Tucker Holdings, Inc. $ 9,575 $ 9,575 $ 42,914 $ 91 $ (52,580 ) $ 9,575 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Comprehensive Income Information For the Three Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net income $ 26,645 $ 26,645 $ 36,929 $ 354 $ (63,650 ) $ 26,923 Other comprehensive loss, net of tax: Foreign currency translation adjustment (22 ) (22 ) — (22 ) 44 (22 ) Other comprehensive loss, before tax (22 ) (22 ) — (22 ) 44 (22 ) Income tax benefit related to items of other comprehensive loss 5 5 — 5 (10 ) 5 Other comprehensive loss (17 ) (17 ) — (17 ) 34 (17 ) Comprehensive income 26,628 26,628 36,929 337 (63,616 ) 26,906 Noncontrolling interests — — — (278 ) — (278 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 26,628 $ 26,628 $ 36,929 $ 59 $ (63,616 ) $ 26,628 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Comprehensive Income Information For the Three Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net income $ 4,386 $ 4,386 $ 15,082 $ 309 $ (19,482 ) $ 4,681 Other comprehensive income, net of tax: Foreign currency translation adjustment 247 247 243 4 (494 ) 247 Other comprehensive income, before tax 247 247 243 4 (494 ) 247 Income tax expense related to items of other comprehensive income (88 ) (88 ) (88 ) — 176 (88 ) Other comprehensive income 159 159 155 4 (318 ) 159 Comprehensive income 4,545 4,545 15,237 313 (19,800 ) 4,840 Noncontrolling interests — — — (295 ) — (295 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 4,545 $ 4,545 $ 15,237 $ 18 $ (19,800 ) $ 4,545 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Comprehensive Income Information For the Nine Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net income $ 67,862 $ 67,862 $ 99,146 $ 914 $ (167,139 ) $ 68,645 Other comprehensive loss, net of tax: Foreign currency translation adjustment (50 ) (50 ) — (50 ) 100 (50 ) Other comprehensive loss, before tax (50 ) (50 ) — (50 ) 100 (50 ) Income tax benefit related to items of other comprehensive loss 11 11 — 11 (22 ) 11 Other comprehensive loss (39 ) (39 ) — (39 ) 78 (39 ) Comprehensive income 67,823 67,823 99,146 875 (167,061 ) 68,606 Noncontrolling interests — — — (783 ) — (783 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 67,823 $ 67,823 $ 99,146 $ 92 $ (167,061 ) $ 67,823 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Comprehensive Income Information For the Nine Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net income $ 9,575 $ 9,575 $ 42,914 $ 949 $ (52,580 ) $ 10,433 Other comprehensive income, net of tax: Foreign currency translation adjustment 263 263 243 20 (526 ) 263 Other comprehensive income, before tax 263 263 243 20 (526 ) 263 Income tax expense related to items of other comprehensive income (94 ) (94 ) (88 ) (6 ) 188 (94 ) Other comprehensive income 169 169 155 14 (338 ) 169 Comprehensive income 9,744 9,744 43,069 963 (52,918 ) 10,602 Noncontrolling interests — — — (858 ) — (858 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 9,744 $ 9,744 $ 43,069 $ 105 $ (52,918 ) $ 9,744 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Balance Sheet Information September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ — $ 220,702 $ 18,443 $ — $ 239,145 Accounts receivable, net — — 133,662 — (14,095 ) 119,567 Contract assets — — 163,957 — (81 ) 163,876 Intercompany receivables — — 208,976 17,956 (226,932 ) — Prepaid expenses and other current assets — — 45,686 4,140 — 49,826 Total current assets — — 772,983 40,539 (241,108 ) 572,414 Property and equipment, net — — 22,603 382 — 22,985 Goodwill — — 9,694 32,399 — 42,093 Tradenames, net — — 28,536 — — 28,536 Other intangibles, net — — 38,074 — — 38,074 Investment in subsidiaries — 630,411 54,700 — (685,111 ) — Long-term deferred taxes — — 874 — — 874 Other assets, net — — 10,838 396 — 11,234 Total assets $ — $ 630,411 $ 938,302 $ 73,716 $ (926,219 ) $ 716,210 LIABILITIES & DEFICIT Current liabilities: Accounts payable $ — $ — $ 99,940 $ 746 $ (608 ) $ 100,078 Accrued payroll and employee costs — — 78,382 13,426 (12,069 ) 79,739 Contract liabilities — — 39,842 — — 39,842 Intercompany payables 46,426 162,550 17,956 — (226,932 ) — Deferred income taxes — — — 27 (27 ) — Accrued liabilities 82,124 13,040 39,632 4,817 (83,197 ) 56,416 Income taxes payable — — 15,253 — (399 ) 14,854 Total current liabilities 128,550 175,590 291,005 19,016 (323,232 ) 290,929 Long-term debt, net — 536,945 — — — 536,945 Other long-term liabilities — — 11,437 — — 11,437 Noncontrolling interests — — 5,449 — — 5,449 (Deficit) equity (128,550 ) (82,124 ) 630,411 54,700 (602,987 ) (128,550 ) Total liabilities and deficit $ — $ 630,411 $ 938,302 $ 73,716 $ (926,219 ) $ 716,210 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Balance Sheet Information December 31, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ — $ 153,004 $ 15,246 $ — $ 168,250 Accounts receivable, net — — 361,362 — (8,812 ) 352,550 Intercompany receivables — — 162,470 9,140 (171,610 ) — Prepaid expenses and other current assets — — 48,473 4,321 (252 ) 52,542 Total current assets — — 725,309 28,707 (180,674 ) 573,342 Property and equipment, net — — 22,980 588 — 23,568 Goodwill — — 9,694 32,399 — 42,093 Tradenames, net — — 28,536 — — 28,536 Other intangibles, net — — 55,302 — — 55,302 Investment in subsidiaries — 579,191 54,690 — (633,881 ) — Long-term deferred taxes — — 369 — — 369 Other assets, net — — 8,941 3,566 — 12,507 Total assets $ — $ 579,191 $ 905,821 $ 65,260 $ (814,555 ) $ 735,717 LIABILITIES & DEFICIT Current liabilities: Current portion of long-term debt, net $ — $ 53,652 $ — $ — $ — $ 53,652 Accounts payable — — 106,039 4,170 (813 ) 109,396 Accrued payroll and employee costs — — 102,953 2,438 — 105,391 Intercompany payables 45,085 117,385 9,140 — (171,610 ) — Deferred income taxes — — — 29 (29 ) — Accrued liabilities 150,371 31,486 71,200 3,933 (158,306 ) 98,684 Income taxes payable — — 18,688 — (287 ) 18,401 Total current liabilities 195,456 202,523 308,020 10,570 (331,045 ) 385,524 Long-term debt, net — 527,039 — — — 527,039 Other long-term liabilities — — 13,081 — — 13,081 Noncontrolling interests — — 5,529 — — 5,529 (Deficit) Equity (195,456 ) (150,371 ) 579,191 54,690 (483,510 ) (195,456 ) Total liabilities and deficit $ — $ 579,191 $ 905,821 $ 65,260 $ (814,555 ) $ 735,717 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Cash Flow Information For the Nine Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net cash provided by operating activities $ — $ 8,138 $ 110,180 $ 13,557 $ (772 ) $ 131,103 Cash flows from investing activities: Purchase of property and equipment — — (8,377 ) — — (8,377 ) Proceeds from sale of property, plant and equipment — — 13 — — 13 Purchase of software — — (274 ) — — (274 ) Return of capital from equity method investees — — 8,278 — — 8,278 Contributions to equity method investees — — (4,433 ) — — (4,433 ) Transfers to affiliates — — (46,505 ) (8,816 ) 55,321 — Net cash used in investing activities — — (51,298 ) (8,816 ) 55,321 (4,793 ) Cash flows from financing activities: Payments on senior secured credit facility — (54,943 ) — — — (54,943 ) Equity contribution from affiliates of Cerberus — 300 — — — 300 Payments of dividends to noncontrolling interests — — — (1,544 ) 772 (772 ) Net transfers from Parent/subsidiary — 46,505 8,816 — (55,321 ) — Net cash (used in ) provided by financing activities — (8,138 ) 8,816 (1,544 ) (54,549 ) (55,415 ) Net increase in cash, cash equivalents and restricted cash — — 67,698 3,197 — 70,895 Cash, cash equivalents and restricted cash, beginning of period — — 153,004 15,246 — 168,250 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 220,702 $ 18,443 $ — $ 239,145 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Cash Flow Information For The Nine Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net cash provided by (used in) operating activities $ — $ 22,568 $ (12,013 ) $ 136 $ (554 ) $ 10,137 Cash flows from investing activities: Purchase of property and equipment — — (3,931 ) — — (3,931 ) Proceeds from sale of property, plant and equipment — — 537 — — 537 Purchase of software — — (646 ) — — (646 ) Return of capital from equity method investees — — 6,017 — — 6,017 Contributions to equity method investees — — (3,250 ) — — (3,250 ) Contribution to subsidiary (40,599 ) — — — 40,599 — Transfers from affiliates — — 5,978 4,525 (10,503 ) — Net cash (used in) provided by investing activities (40,599 ) — 4,705 4,525 30,096 (1,273 ) Cash flows from financing activities: Payments on senior secured credit facility — (25,114 ) — — — (25,114 ) Payment to bondholders of senior unsecured notes — (39,319 ) — — — (39,319 ) Equity contribution from Parent — 40,599 — — (40,599 ) — Equity contributions from affiliates of Cerberus 40,599 300 — — — 40,899 Payments of dividends to noncontrolling interests — — — (1,109 ) 554 (555 ) Net transfers to Parent/subsidiary — (5,978 ) (4,525 ) — 10,503 — Net cash provided by (used in) financing activities 40,599 (29,512 ) (4,525 ) (1,109 ) (29,542 ) (24,089 ) Net (decrease) increase in cash, cash equivalents and restricted cash — (6,944 ) (11,833 ) 3,552 — (15,225 ) Cash, cash equivalents and restricted cash, beginning of period — 6,944 107,136 11,802 — 125,882 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 95,303 $ 15,354 $ — $ 110,657 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events We evaluated potential subsequent events occurring after the period end date through the date the financial statements were issued and determined no subsequent events merited disclosure for the period ended September 30, 2018 , except as disclosed within the Notes to the unaudited condensed consolidated financial statements or as described below. Voluntary Term Loan Payment On October 19, 2018 , we made a voluntary principal payment of $50.0 million on the Term Loan. Sale of Inventory In October 2018, we amended a contract, which was executed in July 2018, to sell inventory from our T-6 Contractor Operated and Maintained Base Supply ("T-6 COMBS") contract. As of November 13, 2018 , the sale was pending transfer of title and final funding. |
Basis of Presentation and Acc_2
Basis of Presentation and Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Delta Tucker Holdings, Inc. ("Holdings"), the parent of DynCorp International Inc. ("DynCorp International"), through its subsidiaries (together, "the Company"), provides defense and technical services and government outsourced solutions primarily to U.S. government agencies domestically and internationally. The Company was incorporated in the state of Delaware on April 1, 2010. Our customers include the DoD, the U.S. Department of State ("DoS"), the U.S. Agency for International Development ("USAID"), foreign governments, commercial customers and certain other U.S. federal, state and local government departments and agencies. Unless the context otherwise indicates, references herein to "we," "our," "us," or "the Company" refer to Delta Tucker Holdings, Inc. and our consolidated subsidiaries. The unaudited condensed consolidated financial statements include the accounts of the Company and our domestic and foreign subsidiaries. These unaudited condensed consolidated financial statements have been prepared pursuant to accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, we believe that all disclosures are adequate and do not make the information presented misleading. These unaudited condensed consolidated financial statements should be read in conjunction with our audited consolidated financial statements and the related notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017 . In the opinion of management, normal recurring adjustments necessary to fairly present our financial position as of September 30, 2018 and December 31, 2017 , the results of operations and statements of comprehensive income for the three and nine months ended September 30, 2018 and September 30, 2017 and the statements of deficit and cash flows for the nine months ended September 30, 2018 and September 30, 2017 have been included. The results of operations and statements of comprehensive income for the three and nine months ended September 30, 2018 and September 30, 2017 and the statements of deficit and cash flows for the nine months ended September 30, 2018 and September 30, 2017 are not necessarily indicative of the results to be expected for the full calendar year or for any future periods. We use estimates and assumptions required for preparation of the financial statements. The estimates are primarily based on historical experience and business knowledge and are revised as circumstances change. Our actual results may differ from these estimates. The unaudited condensed consolidated financial statements include the accounts of both our domestic and foreign subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. |
Use of Estimates | Use of Estimates General - We are predominantly a services provider and only include products or systems when necessary for the execution of the service arrangement. As such, systems, equipment or materials are not generally separable from the services we provide. Revenue is recognized for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance, and collectability is probable. Our contracts are primarily with U.S. government customers and are generally structured under the following contract types: (i) fixed-price; (ii) time-and-materials; and (iii) cost-reimbursement contracts. In a fixed-price contract, the price is generally not subject to adjustment based on costs incurred and may include firm fixed-price, fixed-price with economic adjustment, and fixed-price incentive elements. Time-and-materials contracts provide for acquiring supplies or services on the basis of direct labor hours at fixed hourly/daily rates plus materials at cost. Cost-reimbursement contracts provide for payment for allowable incurred costs, to the extent prescribed in the contract, plus a fixed-fee, award-fee, incentive-fee or a combination thereof. Our contracts contain promises to provide distinct goods or services to the customer which represent performance obligations and is the unit of account under ASU 2014-09, Revenue from Contracts with Customers (Topic 606) ("ASC 606"). To determine the proper revenue recognition method, consideration is given as to whether a single contract should be accounted for as more than one performance obligation or whether two or more contracts should be combined and accounted for as one single contract. For most of our contracts, the customer contracts with us to provide a significant service of integrating a complex set of tasks and deliverables into a single service solution. Hence, the entire contract is accounted for as one performance obligation. Less commonly, however, we may promise to provide distinct goods or services within a contract in which case we separate the contract into more than one performance obligation. If a contract has multiple performance obligations, the contract’s transaction price is allocated based on the estimated relative standalone selling prices of the promised goods or services underlying each performance. The primary method used to estimate standalone selling price is the expected cost plus a margin approach. In instances where a performance obligation does not have an observable standalone selling price, we select an estimation method that maximizes the use of observable inputs. Major factors we consider in determining total estimated revenue and cost include the base contract price, contract options, change orders (modifications of the original contract), back charges and claims, and contract provisions for penalties, award fees and performance incentives. All of these factors and other less significant contract provisions are evaluated throughout the life of our contracts when estimating transaction price. We inherently have risks related to our estimates with long-term contracts. Actual amounts could materially differ from these estimates. We believe the following are the risks associated with our estimation process: (i) assumptions are uncertain and inherently judgmental at the time of the estimate; (ii) use of reasonably different assumptions could have changed our estimates, particularly with respect to estimates of contract revenues, costs and recoverability of assets; and (iii) changes in estimates could have material effects on our financial condition or results of operations. The impact of any one of these factors could contribute to a material cumulative adjustment. Our revenues are primarily derived from long-term contracts and programs with a base period and multiple option periods for services provided to the U.S. federal government. We recognize revenue over time and our contracts typically have one year base periods and multiple one year option periods. The option periods are considered separate purchase obligations from the base period. Generally, the terms and conditions of the contracts result in a continuous transfer of control over the relevant goods and services. As a result of control transferring over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. We generally use a cost-to-cost measure of progress for our contracts because it best depicts the transfer of assets to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Costs to fulfill include labor, materials and subcontractors’ costs, other direct costs and an allocation of indirect costs. In certain instances, we may recognize revenue at the point in time at which control is transferred to the customer using an output method based on units produced or delivered. We consider the unfunded portions of a contract and award and incentive fees to be variable consideration. Some of our long-term contracts with the U.S. government are only partially funded at inception as a result of the U.S. government’s annual budget and appropriations process. The unfunded portion of a contract is included in the estimated transaction price to the extent it is probable that the unfunded portion of the contract will become funded. We consider the following factors in determining the likelihood that the unfunded portion of the contract would not result in a significant revenue reversal: (i) period of time before contract funding is expected; (ii) history of receiving funding in similar situations; and (iii) communication from the customer that funding will be obtained. Award and incentive fees are generally awarded upon achievement of specified performance objectives, milestones, or cost targets and are considered variable consideration. We do not consider the mere existence of potential award or incentive fees as presumptive evidence that award or incentive fees are to be included in determining total transaction price. We include award or incentive fees in the estimated transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. These estimates are based largely on an assessment of our anticipated performance, historical award experience, and information that is reasonably available to us. Pre-contract costs are costs incurred to fulfill a contract in anticipation of a contract award. Pre-contract costs such as those specifically chargeable to a customer and probable of recovery under a specific anticipated contract would be capitalized. All other pre-contract costs, including start-up costs, would be expensed as incurred. Management regularly reviews project profitability and underlying estimates, including total cost to complete a project. For each project, estimates for total project costs are based on such factors as a project's contractual requirements and management's assessment of current and future pricing, economic conditions, political conditions and site conditions. Estimates can be impacted by such factors as additional requirements from our customers, a change in labor markets impacting the availability or cost of a skilled workforce, regulatory changes both domestically and internationally, political unrest or security issues at project locations. Revisions to estimates are reflected in our consolidated results of operations as changes in accounting estimates in the periods in which the facts that give rise to the revisions become known by management. We believe long-term contracts, contracts in a loss position, contracts with material award fees, and contract modifications drive the significant changes in estimates in our contracts. The preparation of the financial statements requires us to make estimates and assumptions that affect the amounts reported in the financial statements. Actual results could differ from those estimates. Our estimates and assumptions are reviewed periodically, and the effects of changes, if any, are reflected in the consolidated statements of operations in the period that they are determined. The majority of our contracts are accounted for under series guidance, as the performance obligation represents a series of distinct goods and services where each day of the promised service is a distinct obligation, and the effects of changes in contract estimates related to certain types of contracts accounted for using an input method measure of progress, such as cost-to-cost, are recognized prospectively. Changes in these estimates can occur over the life of a contract for a variety of reasons, including changes in scope, estimated incentive or award fees, cost estimates, level of effort and/or other assumptions impacting revenue or cost to perform a contract. Changes in contract estimates related to past performance are recognized in the period in which such changes are made for the inception to date effect of the changes. The gross favorable and unfavorable adjustments to income before income taxes below reflect changes in contract estimates during each reporting period, excluding new or completed contracts where no comparative estimates exist between reporting periods. |
Accounting Policies | Accounting Policies There have been no material changes to our significant accounting policies from those described in our Annual Report on Form 10-K for the year ended December 31, 2017 , except as described below. |
Recently Adopted Accounting Standards and Recently Issued Accounting Developments | Recently Adopted Accounting Standards In November 2016, the Financial Accounting Standards Board ("FASB") issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. ASU 2016-18 clarifies the guidance on the cash flow classification and presentation of changes in restricted cash or restricted cash equivalents. The Company elected to adopt ASU 2016-18 during the fourth quarter of calendar year 2017 and therefore, amounts generally described as restricted cash or restricted cash equivalents are now included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flow. The Company recasted its statement of cash flows for the nine months ended September 30, 2017 . Our statement of cash flows explains the change in the total of cash, cash equivalents, and restricted cash. The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows: Nine Months Ended ( Amounts in thousands) September 30, 2017 Beginning of period Cash and cash equivalents $ 118,218 Restricted cash 7,664 Total cash, cash equivalents and restricted cash, beginning of period 125,882 End of period Cash and cash equivalents 110,657 Restricted cash — Total cash, cash equivalents and restricted cash, end of period 110,657 Net decrease in cash, cash equivalents and restricted cash $ (15,225 ) The following table illustrates changes in the Company's Condensed Consolidated Statements of Cash Flows as reported and as previously reported prior to the adoption of ASU 2016-18 in the fourth quarter of calendar year 2017: Nine Months Ended September 30, 2017 As Reported As Previously Reported ( Amounts in thousands) Net cash provided by operating activities $ 10,137 $ 10,744 Net cash (used in) provided by investing activities (1,273 ) 5,784 Net cash used in financing activities (24,089 ) (24,089 ) Net decrease in cash, cash equivalents and restricted cash (1) (15,225 ) (7,561 ) Cash, cash equivalents and restricted cash, beginning of period (1) 125,882 118,218 Cash, cash equivalents and restricted cash, end of period (1) 110,657 110,657 (1) Amounts in the As Reported column include cash, cash equivalents and restricted cash as required upon the adoption of ASU 2016-18. Amounts in the As Previously Reported column reflects only cash and cash equivalents. In May 2014, the FASB issued ASC 606, which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. We adopted ASC 606, Revenue from Contracts with Customers, as of January 1, 2018 using the modified retrospective approach only on contracts not completed at the date of initial application with the cumulative effect of adoption recorded as an adjustment to the opening balance of equity as of that date without restatement of comparative periods. See this Note and Note 2 for the required disclosures related to the impact of adopting this standard and a discussion of the Company's updated policies related to revenue recognition. Recently Issued Accounting Developments In February 2016, the FASB issued ASU No. 2016-02, Leases . The guidance in ASU 2016-02 supersedes the lease recognition requirements in ASC Topic 840, Leases. ASU 2016-02 requires an entity to recognize right-of-use assets and lease liabilities arising from a lease for both financing and operating leases, along with additional qualitative and quantitative disclosures. Entities are required to adopt ASU 2016-02 using a modified retrospective approach, subject to certain optional practice expedients, and apply the provisions of ASU 2016-02 to leasing arrangements existing at or entered into after the earliest comparative period presented in the financial statements. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The new standard will be effective for the Company in the first quarter of calendar year 2019. The Company has established a cross-functional team of key stakeholders for implementing the new standard. As part of the Company’s assessment and implementation plan, the Company performed a completeness assessment over the lease population, analyzing the practical expedients and assessing opportunities to make certain changes to its business policies, processes, systems and internal controls in order to determine the best implementation strategy. All of the Company's material leases are classified as operating leases, which the Company expects will continue to be classified as operating under the new standard. The Company's long-term leases (term in excess of 12 months) will be subject to the new guidance and recognized as right-of-use assets and lease liabilities upon adoption, resulting in a material impact to our total assets and total liabilities on the consolidated balance sheets. The Company does not expect the adoption of the new standard to impact its results of operations and cash flows. The Company's existing debt agreements exclude the impact of this standard on its debt covenants, accordingly the new standard will have no impact on the Company's debt-covenant compliance under the current debt agreements. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which is intended to provide financial statement users with more decision-useful information about the expected credit losses on financial instruments and other commitments to extend credit held by a reporting entity at each reporting date. To achieve this objective, the amendments in this update replace the existing incurred loss impairment methodology with a methodology that reflects expected credit losses and requires consideration of a broader range of reasonable and supportable information to inform credit loss estimates. The amendments are effective for annual reporting periods, and interim periods therein, beginning after December 15, 2019 and applied using a prospective transition approach for debt securities for which an other-than-temporary impairment had been recognized before the effective date. We are currently evaluating the potential effects of the adoption of ASU 2016-13 on our consolidated financial statements. In February 2018, the FASB issued ASU No. 2018-02, Reporting Comprehensive Income - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income to help businesses and other organizations present some effects from the Tax Act’s reduction in the corporate tax rate in their income statements. ASU 2018-02 gives the option of reclassifying what are called the “stranded” tax effects within accumulated other comprehensive income (loss) to retained earnings (deficit) during each fiscal year or quarter in which the effect of the lower tax rate is recorded. ASU 2018-02 instructs businesses and other organizations to provide a disclosure in their financial statement footnotes that describes the accounting policy they used to release the income tax effects from accumulated other comprehensive income (loss), whether they are reclassifying the stranded income tax effects from the Tax Act, and information about the other effects on taxes from the reclassification. The update is effective for fiscal years beginning after December 15, 2018, and the interim periods in those years, and early adoption is permitted. We are currently evaluating the potential effects of the adoption of ASU 2018-02 on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-13, Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC 820. This guidance is effective for public companies in fiscal years beginning after December 15, 2019 with early adoption permitted. We are currently evaluating the potential effects of the adoption of ASU 2018-13 on our consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15 Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract to provide guidance on implementation costs incurred in a cloud computing arrangement that is a service contract. The ASU aligns the accounting for such costs with the guidance on capitalizing costs associated with developing or obtaining internal-use software. Specifically, the ASU amends ASC 350 to include in its scope implementation costs of such arrangements that are service contracts and clarifies that a customer should apply ASC 350-40 to determine which implementation costs should be capitalized. This guidance is effective for interim and annual reporting periods beginning after December 15, 2019, and early adoption is permitted. We are currently evaluating the potential effects of the adoption of ASU 2018-15 on our consolidated financial statements. In August 2018, the SEC issued SEC Final Rule Release No. 33-10532, Disclosure Update and Simplification , which amends certain of its disclosure requirements and is intended to facilitate the disclosure of information to investors and simplify compliance without significantly altering the total mix of information provided to investors. The final rule includes a requirement to provide an analysis of changes in stockholders’ deficit for the current and comparative year-to-date interim periods in interim reports. The final rule is effective for all filings submitted on or after November 5, 2018. The Company plans to adopt the guidance on the presentation of changes in the statements of deficit in its Form 10-Q for the quarter ending March 31, 2019. Other accounting standards updates effective after September 30, 2018 are not expected to have a material effect on our consolidated financial position or results of operations and cash flows for the period ended September 30, 2018 . |
Revenue Recognition | In May 2014, the FASB issued ASC 606, Revenue from Contracts with Customers, which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. We adopted ASC 606, as of January 1, 2018 using the modified retrospective approach with the cumulative effect of adoption recorded as an adjustment to the opening balance of equity as of that date without restatement of comparative periods. The impacts related to the adoption of ASC 606 on our portfolio of contracts primarily relate to the units of account and methods used to measure of progress toward satisfaction of a performance obligation. Previously, certain of our contracts that included multiple promises related to the transfer of goods or services to the customer were combined or segmented based on profit center and the requisite revenue was recognized by profit center using the percentage-of-completion method or completed-contract method. We now evaluate all promises in an arrangement to determine if they represent one or more distinct performance obligations. The adoption of ASC 606 will not change the total revenue or operating earnings recognized under these contracts, only the timing of when those amounts are recognized. Nature of Goods and Services The Company generally derives revenue from long-term, service-based contracts and programs for commercial, government, and military customers. Our contracts typically fall into the following two categories with the first representing substantially all of our revenue: (i) federal government contracts and (ii) other contracts. Federal Government Contracts - Contracts with the U.S. federal government, primarily to the Department of Defense (“DoD”) and the Department of State (“DoS”), contemplate the provision of services related to aviation solutions, construction management, base and logistics operations, intelligence training, and operations and linguistics support. Certain contracts are structured using an IDIQ vehicle awarded to multiple contractors. However, many IDIQ vehicles permit the customer to direct work to a particular contractor. When a customer wishes to order services under an IDIQ contract, the customer issues a task order request for proposal to the contract awardees and task orders are awarded under a best-value approach. The task orders awarded may be fixed-priced, time-and-materials, or cost-reimbursement contracts. The Company generally performs over a base period with multiple option periods. The U.S. government is not obligated to exercise options under a contract after the base period. At the time of completion of the contract term of a U.S. government contract, the contract may be re-competed to the extent the service is still required. Historically, the Company has received additional revenue through increases in program scope beyond that of the original contract and “over and above” requests derived from changes in customer requests. For most of our contracts, we provide a significant service of integrating equipment, materials, and services into a single project which is accounted for as one performance obligation. In certain instances, we also provide a stand-ready service in the case where the Company responds to the customer’s needs on the basis of its demand. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the best estimate of the standalone selling price for each distinct good or service. Where a series of distinct services has been identified, the Company generally allocates variable consideration to distinct time increments of service (e.g. hours, days, etc.). Where the variable consideration is not directly tied to the base pricing structure of the contract (e.g. cost incurrence), the Company allocates variable consideration to a subset of services within a period (e.g. evaluation periods for awards/incentives). Revenues are recognized over time upon contract specifications. The method utilized to measure performance progress reflects the best depiction of control to the customer. If control is transferred over time, revenue is recognized over time using the cost-to-cost-method to measure performance progress. Typical payment terms for U.S. federal government contracts are in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. In most instances, the customer generally pays the Company for actual costs incurred within a short period of time. In certain cases, the Company receives interim payments as work progresses or an advance payment. The Company recognizes a liability for advance payments in excess of revenue recognized which is included in contract liabilities on the balance sheet. The advance payment typically is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract. Other Contracts - Contracts with non-federal government customers are predominantly service arrangements which may involve various combinations related to the provision of services, delivery of equipment and materials, grant licenses and other rights, or take certain actions. For most of our contracts, we provide a significant service of integrating equipment, materials, or other services into a single project which is accounted for as one performance obligation. In certain instances, we also provide a stand-ready service in the case where the Company responds to the customer’s needs on the basis of its demand. In determining transaction price, the Company considers the unfunded portions of a contract and award and incentive fees to be variable consideration which is estimated using the best estimate of consideration to which the Company expects to be entitled per the terms and conditions of the contract at inception and reassessed quarterly. For contracts with multiple performance obligations, the contract’s transaction price is allocated to each performance obligation using the best estimate of the standalone selling price for each distinct good or service. Where a series of distinct services has been identified, the Company generally allocates variable consideration to distinct time increments of service (e.g. hours, days, etc.). Where the variable consideration is not directly tied to the base pricing structure of the contract (e.g. cost incurrence), the Company allocates variable consideration to a subset of services within a period (e.g. evaluation periods for awards/incentives). Revenue is recognized over time upon contract specifications. The method utilized to measure performance progress reflects the best depiction of control to the customer. If consideration is considered fixed, revenue is recognized over time using the cost-to-cost-method to measure performance progress. If consideration is considered variable, revenue is recognized as performance occurs. In instances where the contract structure is time-and-materials, the Company may utilize the practical expedient allowing the recognition of revenue in the amount at which the Company invoices as the invoiced amounts correspond directly with the value provided to the customer and to which it is entitled to payment for performance to date. The Company is electing the practical expedient on not disclosing remaining performance obligations as the Company's performance obligations, with one exception, have an original expected duration of one year or less. The contract exception relates to a contract executed during the quarter ended June 30, 2018 which has a 30 month term with a remaining performance obligation of $208.0 million as of September 30, 2018 . We expect to recognize approximately 40% and 88% of our September 30, 2018 backlog as revenue over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. In addition, during the second quarter of calendar year 2018, we received a $45.1 million advance payment on this contract which is included in Contract liabilities, net of revenue recognized through September 30, 2018 . Typical payment terms for non-federal government contracts are in accordance with agreed-upon contractual terms, either at periodic intervals (e.g., biweekly or monthly) or upon achievement of contractual milestones. In certain cases, the Company receives interim payments as work progresses or an advance payment. The Company recognizes a liability for advance payments in excess of revenue recognized which is included in contract liabilities on the balance sheet. The advance payment typically is not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract. |
Basis of Presentation and Acc_3
Basis of Presentation and Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Policies [Abstract] | |
Gross favorable and unfavorable adjustments to income before income taxes | The gross favorable and unfavorable adjustments to income before income taxes below reflect changes in contract estimates during each reporting period, excluding new or completed contracts where no comparative estimates exist between reporting periods. The following amounts during the three and nine months ended September 30, 2018 and September 30, 2017 are presented under ASC 605, due to the adoption of ASC 606 on January 1, 2018 using the modified retrospective method. Three Months Ended Nine Months Ended (Amounts in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Gross favorable adjustments $ 7.9 $ 8.0 $ 18.2 $ 22.1 Gross unfavorable adjustments (7.5 ) (1.0 ) (1.5 ) (2.0 ) Net adjustments $ 0.4 $ 7.0 $ 16.7 $ 20.1 |
Reconciliation of cash, cash equivalents, and restricted cash | The following table provides a reconciliation of cash and cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of such amounts in the consolidated statements of cash flows: Nine Months Ended ( Amounts in thousands) September 30, 2017 Beginning of period Cash and cash equivalents $ 118,218 Restricted cash 7,664 Total cash, cash equivalents and restricted cash, beginning of period 125,882 End of period Cash and cash equivalents 110,657 Restricted cash — Total cash, cash equivalents and restricted cash, end of period 110,657 Net decrease in cash, cash equivalents and restricted cash $ (15,225 ) |
Changes in the Consolidated Statements of Cash Flows due to adoption of ASU 2016-18 | The following table illustrates changes in the Company's Condensed Consolidated Statements of Cash Flows as reported and as previously reported prior to the adoption of ASU 2016-18 in the fourth quarter of calendar year 2017: Nine Months Ended September 30, 2017 As Reported As Previously Reported ( Amounts in thousands) Net cash provided by operating activities $ 10,137 $ 10,744 Net cash (used in) provided by investing activities (1,273 ) 5,784 Net cash used in financing activities (24,089 ) (24,089 ) Net decrease in cash, cash equivalents and restricted cash (1) (15,225 ) (7,561 ) Cash, cash equivalents and restricted cash, beginning of period (1) 125,882 118,218 Cash, cash equivalents and restricted cash, end of period (1) 110,657 110,657 (1) Amounts in the As Reported column include cash, cash equivalents and restricted cash as required upon the adoption of ASU 2016-18. Amounts in the As Previously Reported column reflects only cash and cash equivalents. |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues disaggregated by product versus service, customer-type, pricing structure, and reportable segment | The following tables represent revenues disaggregated by customer-type and contract-type and include a reconciliation of the disaggregated revenue with reportable segments for the three and nine months ended September 30, 2018 : Under ASC 606 Three months ended September 30, 2018 (Amounts in thousands) DynAviation DynLogistics Headquarters / Other Total Customer DOD $ 231,094 $ 225,729 $ — $ 456,823 DOS 5,282 42,424 — 47,706 Other 14,622 6,740 (869 ) 20,493 Total revenue $ 250,998 $ 274,893 $ (869 ) $ 525,022 Contract Type Fixed-Price $ 105,900 $ 79,437 $ (271 ) $ 185,066 Time-and-Materials 25,481 3,234 (36 ) 28,679 Cost-Reimbursement 119,617 192,222 (562 ) 311,277 Total revenue $ 250,998 $ 274,893 $ (869 ) $ 525,022 Under ASC 606 Nine months ended September 30, 2018 (Amounts in thousands) DynAviation DynLogistics Headquarters / Other Total Customer DOD $ 715,040 $ 625,649 $ — $ 1,340,689 DOS 105,480 107,547 — 213,027 Other 45,164 10,467 329 55,960 Total revenue $ 865,684 $ 743,663 $ 329 $ 1,609,676 Contract Type Fixed-Price $ 369,698 $ 234,109 $ 123 $ 603,930 Time-and-Materials 67,723 5,755 15 73,493 Cost-Reimbursement 428,263 503,799 191 932,253 Total revenue $ 865,684 $ 743,663 $ 329 $ 1,609,676 |
Financial statement impact of adopting ASC 606 | As a result of applying the modified retrospective method to adopt the new revenue guidance, the following adjustments were made to accounts on the condensed consolidated balance sheet as of January 1, 2018 : As reported Adjustments Adjusted (Amounts in thousands) December 31, 2017 Contract Assets Contract Liabilities Accumulated Deficit January 1, 2018 Current assets: Cash and cash equivalents $ 168,250 $ — $ — $ — $ 168,250 Accounts receivable, net of allowance of $10,142 352,550 (191,780 ) — — 160,770 Contract assets — 191,780 — (1,340 ) 190,440 Prepaid expenses and other current assets 52,542 — — — 52,542 Total current assets 573,342 — — (1,340 ) 572,002 Property and equipment, net 23,568 — — — 23,568 Goodwill 42,093 — — — 42,093 Tradenames, net 28,536 — — — 28,536 Other intangibles, net 55,302 — — — 55,302 Long-term deferred taxes 369 — — — 369 Other assets, net 12,507 — — — 12,507 Total assets $ 735,717 $ — $ — $ (1,340 ) $ 734,377 Current liabilities: Current portion of long-term debt, net $ 53,652 $ — $ — $ — $ 53,652 Accounts payable 109,396 — — — 109,396 Accrued payroll and employee costs 105,391 — — — 105,391 Contract liabilities — — 9,164 — 9,164 Accrued liabilities 98,684 — (9,164 ) — 89,520 Income taxes payable 18,401 — — — 18,401 Total current liabilities 385,524 — — — 385,524 Long-term debt, net 527,039 — — — 527,039 Other long-term liabilities 13,081 — — — 13,081 Total liabilities 925,644 — — — 925,644 Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at December 31, 2017 — — — — — Additional paid-in capital 596,393 — — — 596,393 Accumulated deficit (791,445 ) — — (1,340 ) (792,785 ) Accumulated other comprehensive loss (404 ) — — — (404 ) Total deficit attributable to Delta Tucker Holdings, Inc. (195,456 ) — — (1,340 ) (196,796 ) Noncontrolling interests 5,529 — — — 5,529 Total deficit (189,927 ) — — (1,340 ) (191,267 ) Total liabilities and deficit $ 735,717 $ — $ — $ (1,340 ) $ 734,377 The following tables compare the reported condensed consolidated statement of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2018 and the condensed consolidated balance sheet as of September 30, 2018 , to the pro-forma amounts had the previous guidance been in effect. Consolidated Statements of Operations Three months ended September 30, 2018 Nine months ended September 30, 2018 (Amounts in thousands) As reported Pro forma as if the previous accounting guidance was in effect As reported Pro forma as if the previous accounting guidance was in effect Revenue $ 525,022 $ 520,133 $ 1,609,676 $ 1,609,864 Cost of services (454,270 ) (454,270 ) (1,396,291 ) (1,396,286 ) Selling, general and administrative expenses (21,163 ) (21,163 ) (71,192 ) (71,192 ) Depreciation and amortization expense (6,022 ) (6,022 ) (18,053 ) (18,053 ) (Loss) earnings from equity method investees (60 ) (60 ) 209 209 Operating income 43,507 38,618 124,349 124,542 Interest expense (16,197 ) (16,197 ) (49,268 ) (49,268 ) Loss on early extinguishment of debt — — (239 ) (239 ) Interest income 863 863 1,796 1,796 Other income, net 790 790 1,931 1,931 Income before income taxes 28,963 24,074 78,569 78,762 Provision for income taxes (2,040 ) (1,298 ) (9,924 ) (9,947 ) Net income 26,923 22,776 68,645 68,815 Noncontrolling interests (278 ) (278 ) (783 ) (783 ) Net income attributable to Delta Tucker Holdings, Inc. $ 26,645 $ 22,498 $ 67,862 $ 68,032 Consolidated Statements of Comprehensive Income Three months ended September 30, 2018 Nine months ended September 30, 2018 (Amounts in thousands) As reported Pro forma as if the previous accounting guidance was in effect As reported Pro forma as if the previous accounting guidance was in effect Net income $ 26,923 $ 22,776 $ 68,645 $ 68,815 Other comprehensive income, net of tax: Foreign currency translation adjustment (22 ) (22 ) (50 ) (50 ) Other comprehensive (loss) income, before tax (22 ) (22 ) (50 ) (50 ) Income tax benefit related to items of other comprehensive (loss) income 5 5 11 11 Other comprehensive loss (17 ) (17 ) (39 ) (39 ) Comprehensive income 26,906 22,759 68,606 68,776 Comprehensive income attributable to noncontrolling interests (278 ) (278 ) (783 ) (783 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 26,628 $ 22,481 $ 67,823 $ 67,993 Consolidated Balance Sheets As of September 30, 2018 (Amounts in thousands) As reported Pro forma as if the previous accounting guidance was in effect Current assets: Cash and cash equivalents $ 239,145 $ 239,145 Accounts receivable, net of allowances of $5,076 119,567 285,519 Contract assets 163,876 — Prepaid expenses and other current assets 49,826 49,826 Total current assets 572,414 574,490 Property and equipment, net 22,985 22,985 Goodwill 42,093 42,093 Tradenames, net 28,536 28,536 Other intangibles, net 38,074 38,074 Long-term deferred taxes 874 874 Other assets, net 11,234 11,234 Total assets $ 716,210 $ 718,286 Current liabilities: Accounts payable $ 100,078 $ 100,078 Accrued payroll and employee costs 79,739 79,739 Contract liabilities 39,842 — Accrued liabilities 56,416 96,801 Income taxes payable 14,854 14,877 Total current liabilities 290,929 291,495 Long-term debt, net 536,945 536,945 Other long-term liabilities 11,437 11,437 Total liabilities 839,311 839,877 Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at September 30, 2018 — — Additional paid-in capital 596,816 596,816 Accumulated deficit (724,923 ) (723,413 ) Accumulated other comprehensive loss (443 ) (443 ) Total deficit attributable to Delta Tucker Holdings, Inc. (128,550 ) (127,040 ) Noncontrolling interests 5,449 5,449 Total deficit (123,101 ) (121,591 ) Total liabilities and deficit $ 716,210 $ 718,286 Consolidated Statements of Cash Flows Nine months ended September 30, 2018 (Amounts in thousands) As reported Pro forma as if the previous accounting guidance was in effect Cash flows from operating activities Net income $ 68,645 $ 68,815 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 20,635 20,635 Loss on early extinguishment of debt 239 239 Amortization of deferred loan costs and original issue discount 4,008 4,008 Allowance on accounts receivable and other noncash gains or losses (24,659 ) (24,659 ) Earnings from equity method investees (209 ) (209 ) Deferred income taxes (505 ) (505 ) Other, including paid in kind interest 6,082 6,082 Changes in assets and liabilities: Accounts receivable and contract assets 74,680 73,945 Prepaid expenses and other current assets 576 576 Accounts payable, accrued liabilities and contract liabilities (14,757 ) (14,215 ) Income taxes payable (3,632 ) (3,609 ) Net cash provided by operating activities 131,103 131,103 Cash flows from investing activities Purchase of property and equipment (8,377 ) (8,377 ) Proceeds from sale of property and equipment 13 13 Purchase of software (274 ) (274 ) Return of capital from equity method investees 8,278 8,278 Contributions to equity method investees (4,433 ) (4,433 ) Net cash used in investing activities (4,793 ) (4,793 ) Cash flows from financing activities Payments on senior secured credit facility (54,943 ) (54,943 ) Equity contribution from affiliates of Cerberus 300 300 Payment of dividends to noncontrolling interests (772 ) (772 ) Net cash used in financing activities (55,415 ) (55,415 ) Net increase in cash, cash equivalents and restricted cash 70,895 70,895 Cash, cash equivalents and restricted cash, beginning of period 168,250 168,250 Cash, cash equivalents and restricted cash, end of period $ 239,145 $ 239,145 |
Composition of Certain Financ_2
Composition of Certain Financial Statement Captions (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Prepaid expenses and other current assets | The following tables present financial information of certain consolidated balance sheet captions. Prepaid expenses and other current assets As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Prepaid expenses $ 39,556 $ 38,423 Inventories, net 4,794 8,240 Work-in-process inventory 459 520 Joint venture receivables 37 29 Other current assets 4,980 5,330 Total prepaid expenses and other current assets $ 49,826 $ 52,542 |
Property, plant and equipment | Property and equipment, net As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Aircraft $ 3,868 $ 3,868 Computers and related equipment 9,960 7,967 Leasehold improvements 17,401 17,614 Office furniture and fixtures 3,374 4,184 Vehicles 14,533 12,659 Gross property and equipment 49,136 46,292 Less accumulated depreciation (26,151 ) (22,724 ) Total property and equipment, net $ 22,985 $ 23,568 |
Other assets, net | Other assets, net As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Investment in affiliates $ 2,110 $ 5,746 Palm promissory note, long-term portion 1,751 1,876 Other 7,373 4,885 Total other assets, net $ 11,234 $ 12,507 |
Accrued payroll and employee costs | Accrued payroll and employee costs As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Wages, compensation and other benefits $ 61,615 $ 90,583 Accrued vacation 17,034 13,625 Accrued contributions to employee benefit plans 1,090 1,183 Total accrued payroll and employee costs $ 79,739 $ 105,391 |
Accrued liabilities | Accrued liabilities As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Customer liabilities $ 6,803 $ 23,486 Accrued insurance 19,456 23,793 Accrued interest 12,069 23,194 Contract losses 1,699 2,660 Legal reserves 4,743 9,233 Other 11,646 16,318 Total accrued liabilities $ 56,416 $ 98,684 |
Income Taxes (Tables)
Income Taxes (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Domestic and foreign components of income (loss) before income taxes | The domestic and foreign components of Income before income taxes are as follows: Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Domestic $ 23,886 $ 7,683 $ 72,967 $ 19,909 Foreign 5,077 336 5,602 2,201 Income before income taxes $ 28,963 $ 8,019 $ 78,569 $ 22,110 |
Contract Balances (Tables)
Contract Balances (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Receivables [Abstract] | |
Composition of contract balances | Our contract balances consisted of the following: (Amounts in thousands) September 30, 2018 December 31, 2017 $ Change Accounts receivable, net of allowances $ 119,567 $ 160,770 $ (41,203 ) Unbilled accounts receivable — 191,780 (191,780 ) Contract assets 163,876 — 163,876 Contract liabilities 39,842 — 39,842 |
Fair Value of Financial Asset_2
Fair Value of Financial Assets and Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | |
Fair value of financial instruments | As Of September 30, 2018 December 31, 2017 (Amounts in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 11.875% senior secured second lien notes $ 384,713 $ 402,025 $ 379,006 $ 401,273 Term loan 127,343 127,343 182,286 182,286 Cerberus 3L notes 33,665 30,404 32,420 30,267 Total indebtedness 545,721 559,772 593,712 613,826 Less current portion of long-term debt — — (54,943 ) (54,943 ) Total long-term debt $ 545,721 $ 559,772 $ 538,769 $ 558,883 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Composition of debt | Debt consisted of the following: As of September 30, 2018 (Amounts in thousands) Carrying Amount Original Issue Discount on Term Loan Deferred Financing Costs, Net Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net 11.875% senior secured second lien notes $ 384,713 $ — $ (876 ) $ 383,837 Term loan 127,343 (6,324 ) (1,511 ) 119,508 Cerberus 3L notes 33,665 — (65 ) 33,600 Total indebtedness 545,721 (6,324 ) (2,452 ) 536,945 Less current portion of long-term debt, net (1) — — — — Total long-term debt, net $ 545,721 $ (6,324 ) $ (2,452 ) $ 536,945 (1) The carrying amount of the current portion of long-term debt as of September 30, 2018 includes the Revolver (as defined below). As of September 30, 2018 , there were no amounts borrowed under the Revolver. As of December 31, 2017 (Amounts in thousands) Carrying Amount Original Issue Discount on Term Loan Deferred Financing Costs, Net Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net 11.875% senior secured second lien notes $ 379,006 $ — $ (1,177 ) $ 377,829 Term loan 182,286 (8,996 ) (2,776 ) 170,514 Cerberus 3L notes 32,420 — (72 ) 32,348 Total indebtedness 593,712 (8,996 ) (4,025 ) 580,691 Less current portion of long-term debt, net (2) (54,943 ) 1,110 181 (53,652 ) Total long-term debt, net $ 538,769 $ (7,886 ) $ (3,844 ) $ 527,039 (2) The carrying amount of the current portion of long-term debt as of December 31, 2017 includes our Excess Cash Flow Payment of $54.9 million , which was paid on March 21, 2018 . |
Optional redemption of Second Lien Notes | On and after July 1, 2018 , the Second Lien Notes are redeemable at the option of the Company, in whole or in part, at any time and from time to time, upon not less than 30 nor more than 60 days’ prior notice, at the following redemption prices (expressed as a percentage of the principal amount), plus accrued and unpaid cash interest, if any, together with an amount of cash equal to all accrued and unpaid PIK Interest to but excluding the redemption date: Period Redemption Price July 1, 2018 through June 30, 2019 103.00 % July 1, 2019 and thereafter 100.00 % |
Contractual maturity schedule associated with debt | The following table represents our contractual maturity schedule associated with our debt as of September 30, 2018 : Calendar Years (1) (Amounts in thousands) 2018 2019 2020 2021 2022 Thereafter Total 11.875% senior secured second lien notes $ — $ — $ 384,713 $ — $ — $ — $ 384,713 Term loan (2) — — 127,343 — — — 127,343 Cerberus 3L notes — — — — — 33,665 33,665 Total debt $ — $ — $ 512,056 $ — $ — $ 33,665 $ 545,721 (1) As of September 30, 2018 , there were no amounts outstanding under the Revolver. (2) On October 19, 2018 , we made a voluntary principal payment of $50.0 million on the Term Loan. Excess cash flow principal payments are determined annually. Accordingly, after giving effect to this voluntary prepayment, the required payments in the calendar year 2020 and the Total column will be $77,343 . |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Summary of the financial information of reportable segments | The following is a summary of the financial information of the reportable segments reconciled to the amounts reported in the condensed consolidated financial statements: Three Months Ended Nine Months Ended (Amounts in thousands) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue DynAviation $ 250,998 $ 307,864 $ 865,684 $ 886,085 DynLogistics 274,893 195,810 743,663 551,791 Headquarters / Other (1) (869 ) (700 ) 329 (743 ) Total revenue $ 525,022 $ 502,974 $ 1,609,676 $ 1,437,133 Operating income (loss) DynAviation $ 21,152 $ 26,415 $ 72,368 $ 66,060 DynLogistics 35,788 9,125 83,991 50,424 Headquarters / Other (2) (13,433 ) (10,344 ) (32,010 ) (42,235 ) Total operating income (loss) $ 43,507 $ 25,196 $ 124,349 $ 74,249 Depreciation and amortization DynAviation $ 272 $ 525 $ 1,057 $ 1,139 DynLogistics 632 258 1,700 594 Headquarters / Other 6,009 8,537 17,878 25,512 Total depreciation and amortization (3) $ 6,913 $ 9,320 $ 20,635 $ 27,245 (1) Headquarters revenue primarily represents revenue earned on shared services arrangements for general and administrative services provided to unconsolidated joint ventures and elimination of intercompany items between segments. (2) Headquarters operating expenses primarily relate to amortization of intangible assets and other costs that are not allocated to segments and are not billable to our U.S. government customers, partially offset by equity method investee income. (3) Includes amounts included in Cost of services of $0.9 million and $2.6 million and for the three and nine months ended September 30, 2018 , respectively, and $0.5 million and $1.3 million for the three and nine months ended September 30, 2017 , respectively |
Schedule of the assets of reportable segments | The following is a summary of the assets of the reportable segments reconciled to the amounts reported in the consolidated financial statements: As Of (Amounts in thousands) September 30, 2018 December 31, 2017 Assets DynAviation $ 177,630 $ 244,231 DynLogistics 239,213 243,281 Headquarters / Other (1) 299,367 248,205 Total assets $ 716,210 $ 735,717 (1) Assets primarily include cash, investments in unconsolidated subsidiaries, and intangible assets (excluding goodwill). |
Related Parties, Joint Ventur_2
Related Parties, Joint Ventures and Variable Interest Entities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Related Party Transactions [Abstract] | |
Selected financial information for DFIZ | The following tables present selected financial information for DIFZ as of September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and September 30, 2017 : As Of (Amounts in millions) September 30, 2018 December 31, 2017 Assets $ 16.2 $ 4.5 Liabilities 13.1 0.9 Three Months Ended Nine Months Ended (Amounts in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue $ 43.5 $ 43.4 $ 128.8 $ 127.9 |
Selected financial information for equity method investees | The following tables present selected financial information for our equity method investees as of September 30, 2018 and December 31, 2017 and for the three and nine months ended September 30, 2018 and September 30, 2017 : As Of (Amounts in millions) September 30, 2018 December 31, 2017 Current assets $ 17.6 $ 28.2 Total assets 17.6 28.2 Current liabilities 6.1 11.6 Total liabilities 6.1 11.6 Three Months Ended Nine Months Ended (Amounts in millions) September 30, 2018 September 30, 2017 September 30, 2018 September 30, 2017 Revenue $ 13.4 $ 10.7 $ 42.7 $ 27.3 Gross profit (loss) 0.9 0.4 3.6 (2.5 ) Net income (loss) 0.7 0.4 3.5 (2.3 ) |
Consolidating Financial State_2
Consolidating Financial Statements of Subsidiary Guarantors (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Unaudited Condensed Consolidating Statement of Operations Information | Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Operations Information For the Three Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Revenue $ — $ — $ 528,022 $ 47,099 $ (50,099 ) $ 525,022 Cost of services — — (457,789 ) (46,522 ) 50,041 (454,270 ) Selling, general and administrative expenses — — (21,108 ) (111 ) 56 (21,163 ) Depreciation and amortization expense — — (5,963 ) (61 ) 2 (6,022 ) Loss from equity method investees — — (60 ) — — (60 ) Operating income — — 43,102 405 — 43,507 Interest expense — (15,821 ) (376 ) — — (16,197 ) Interest income — — 863 — — 863 Equity in income of consolidated subsidiaries 26,645 36,929 76 — (63,650 ) — Other income (expense), net — — 804 (14 ) — 790 Income before income taxes 26,645 21,108 44,469 391 (63,650 ) 28,963 Benefit (provision) for income taxes — 5,537 (7,540 ) (37 ) — (2,040 ) Net income 26,645 26,645 36,929 354 (63,650 ) 26,923 Noncontrolling interests — — — (278 ) — (278 ) Net income attributable to Delta Tucker Holdings, Inc. $ 26,645 $ 26,645 $ 36,929 $ 76 $ (63,650 ) $ 26,645 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Operations Information For the Three Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Revenue $ — $ — $ 506,037 $ 48,103 $ (51,166 ) $ 502,974 Cost of services — — (451,480 ) (47,457 ) 51,141 (447,796 ) Selling, general and administrative expenses — — (21,150 ) (114 ) 21 (21,243 ) Depreciation and amortization expense — — (8,621 ) (174 ) 3 (8,792 ) Earnings from equity method investees — — 53 — — 53 Operating income — — 24,839 358 (1 ) 25,196 Interest expense — (16,454 ) (695 ) — — (17,149 ) Interest income — — 14 1 — 15 Equity in income of consolidated subsidiaries 4,386 15,081 14 — (19,481 ) — Other expense, net — — (27 ) (16 ) — (43 ) Income (loss) before income taxes 4,386 (1,373 ) 24,145 343 (19,482 ) 8,019 Benefit (provision) for income taxes — 5,759 (9,063 ) (34 ) — (3,338 ) Net income 4,386 4,386 15,082 309 (19,482 ) 4,681 Noncontrolling interests — — — (295 ) — (295 ) Net income attributable to Delta Tucker Holdings, Inc. $ 4,386 $ 4,386 $ 15,082 $ 14 $ (19,482 ) $ 4,386 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Operations Information For the Nine Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Revenue $ — $ — $ 1,619,342 $ 140,892 $ (150,558 ) $ 1,609,676 Cost of services — — (1,407,418 ) (139,353 ) 150,480 (1,396,291 ) Selling, general and administrative expenses — — (70,946 ) (316 ) 70 (71,192 ) Depreciation and amortization expense — — (17,874 ) (187 ) 8 (18,053 ) Earnings from equity method investees — — 209 — — 209 Operating income — — 123,313 1,036 — 124,349 Interest expense — (47,889 ) (1,379 ) — — (49,268 ) Loss on early extinguishment of debt — (239 ) — — — (239 ) Interest income — — 1,793 3 — 1,796 Equity in income of consolidated subsidiaries 67,862 99,146 131 — (167,139 ) — Other income (expense), net — — 1,955 (24 ) — 1,931 Income before income taxes 67,862 51,018 125,813 1,015 (167,139 ) 78,569 Benefit (provision) for income taxes — 16,844 (26,667 ) (101 ) — (9,924 ) Net income 67,862 67,862 99,146 914 (167,139 ) 68,645 Noncontrolling interests — — — (783 ) — (783 ) Net income attributable to Delta Tucker Holdings, Inc. $ 67,862 $ 67,862 $ 99,146 $ 131 $ (167,139 ) $ 67,862 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Operations Information For the Nine Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Revenue $ — $ — $ 1,447,557 $ 144,725 $ (155,149 ) $ 1,437,133 Cost of services — — (1,269,058 ) (142,973 ) 155,107 (1,256,924 ) Selling, general and administrative expenses — — (79,848 ) (314 ) 33 (80,129 ) Depreciation and amortization expense — — (25,423 ) (522 ) 9 (25,936 ) Earnings from equity method investees — — 105 — — 105 Operating income — — 73,333 916 — 74,249 Interest expense — (51,265 ) (2,363 ) — — (53,628 ) Loss on early extinguishment of debt — (24 ) — — — (24 ) Interest income — — 35 4 — 39 Equity in income of consolidated subsidiaries 9,575 42,914 91 — (52,580 ) — Other income, net — — 1,417 57 — 1,474 Income (loss) before income taxes 9,575 (8,375 ) 72,513 977 (52,580 ) 22,110 Benefit (provision) for income taxes — 17,950 (29,599 ) (28 ) — (11,677 ) Net income 9,575 9,575 42,914 949 (52,580 ) 10,433 Noncontrolling interests — — — (858 ) — (858 ) Net income attributable to Delta Tucker Holdings, Inc. $ 9,575 $ 9,575 $ 42,914 $ 91 $ (52,580 ) $ 9,575 |
Unaudited Condensed Consolidating Statement of Comprehensive Income/Loss Information | Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Comprehensive Income Information For the Three Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net income $ 26,645 $ 26,645 $ 36,929 $ 354 $ (63,650 ) $ 26,923 Other comprehensive loss, net of tax: Foreign currency translation adjustment (22 ) (22 ) — (22 ) 44 (22 ) Other comprehensive loss, before tax (22 ) (22 ) — (22 ) 44 (22 ) Income tax benefit related to items of other comprehensive loss 5 5 — 5 (10 ) 5 Other comprehensive loss (17 ) (17 ) — (17 ) 34 (17 ) Comprehensive income 26,628 26,628 36,929 337 (63,616 ) 26,906 Noncontrolling interests — — — (278 ) — (278 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 26,628 $ 26,628 $ 36,929 $ 59 $ (63,616 ) $ 26,628 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Comprehensive Income Information For the Three Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net income $ 4,386 $ 4,386 $ 15,082 $ 309 $ (19,482 ) $ 4,681 Other comprehensive income, net of tax: Foreign currency translation adjustment 247 247 243 4 (494 ) 247 Other comprehensive income, before tax 247 247 243 4 (494 ) 247 Income tax expense related to items of other comprehensive income (88 ) (88 ) (88 ) — 176 (88 ) Other comprehensive income 159 159 155 4 (318 ) 159 Comprehensive income 4,545 4,545 15,237 313 (19,800 ) 4,840 Noncontrolling interests — — — (295 ) — (295 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 4,545 $ 4,545 $ 15,237 $ 18 $ (19,800 ) $ 4,545 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Comprehensive Income Information For the Nine Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net income $ 67,862 $ 67,862 $ 99,146 $ 914 $ (167,139 ) $ 68,645 Other comprehensive loss, net of tax: Foreign currency translation adjustment (50 ) (50 ) — (50 ) 100 (50 ) Other comprehensive loss, before tax (50 ) (50 ) — (50 ) 100 (50 ) Income tax benefit related to items of other comprehensive loss 11 11 — 11 (22 ) 11 Other comprehensive loss (39 ) (39 ) — (39 ) 78 (39 ) Comprehensive income 67,823 67,823 99,146 875 (167,061 ) 68,606 Noncontrolling interests — — — (783 ) — (783 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 67,823 $ 67,823 $ 99,146 $ 92 $ (167,061 ) $ 67,823 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Comprehensive Income Information For the Nine Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net income $ 9,575 $ 9,575 $ 42,914 $ 949 $ (52,580 ) $ 10,433 Other comprehensive income, net of tax: Foreign currency translation adjustment 263 263 243 20 (526 ) 263 Other comprehensive income, before tax 263 263 243 20 (526 ) 263 Income tax expense related to items of other comprehensive income (94 ) (94 ) (88 ) (6 ) 188 (94 ) Other comprehensive income 169 169 155 14 (338 ) 169 Comprehensive income 9,744 9,744 43,069 963 (52,918 ) 10,602 Noncontrolling interests — — — (858 ) — (858 ) Comprehensive income attributable to Delta Tucker Holdings, Inc. $ 9,744 $ 9,744 $ 43,069 $ 105 $ (52,918 ) $ 9,744 |
Unaudited Condensed Consolidating Balance Sheet Information | Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Balance Sheet Information September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ — $ 220,702 $ 18,443 $ — $ 239,145 Accounts receivable, net — — 133,662 — (14,095 ) 119,567 Contract assets — — 163,957 — (81 ) 163,876 Intercompany receivables — — 208,976 17,956 (226,932 ) — Prepaid expenses and other current assets — — 45,686 4,140 — 49,826 Total current assets — — 772,983 40,539 (241,108 ) 572,414 Property and equipment, net — — 22,603 382 — 22,985 Goodwill — — 9,694 32,399 — 42,093 Tradenames, net — — 28,536 — — 28,536 Other intangibles, net — — 38,074 — — 38,074 Investment in subsidiaries — 630,411 54,700 — (685,111 ) — Long-term deferred taxes — — 874 — — 874 Other assets, net — — 10,838 396 — 11,234 Total assets $ — $ 630,411 $ 938,302 $ 73,716 $ (926,219 ) $ 716,210 LIABILITIES & DEFICIT Current liabilities: Accounts payable $ — $ — $ 99,940 $ 746 $ (608 ) $ 100,078 Accrued payroll and employee costs — — 78,382 13,426 (12,069 ) 79,739 Contract liabilities — — 39,842 — — 39,842 Intercompany payables 46,426 162,550 17,956 — (226,932 ) — Deferred income taxes — — — 27 (27 ) — Accrued liabilities 82,124 13,040 39,632 4,817 (83,197 ) 56,416 Income taxes payable — — 15,253 — (399 ) 14,854 Total current liabilities 128,550 175,590 291,005 19,016 (323,232 ) 290,929 Long-term debt, net — 536,945 — — — 536,945 Other long-term liabilities — — 11,437 — — 11,437 Noncontrolling interests — — 5,449 — — 5,449 (Deficit) equity (128,550 ) (82,124 ) 630,411 54,700 (602,987 ) (128,550 ) Total liabilities and deficit $ — $ 630,411 $ 938,302 $ 73,716 $ (926,219 ) $ 716,210 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Balance Sheet Information December 31, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated ASSETS Current assets: Cash and cash equivalents $ — $ — $ 153,004 $ 15,246 $ — $ 168,250 Accounts receivable, net — — 361,362 — (8,812 ) 352,550 Intercompany receivables — — 162,470 9,140 (171,610 ) — Prepaid expenses and other current assets — — 48,473 4,321 (252 ) 52,542 Total current assets — — 725,309 28,707 (180,674 ) 573,342 Property and equipment, net — — 22,980 588 — 23,568 Goodwill — — 9,694 32,399 — 42,093 Tradenames, net — — 28,536 — — 28,536 Other intangibles, net — — 55,302 — — 55,302 Investment in subsidiaries — 579,191 54,690 — (633,881 ) — Long-term deferred taxes — — 369 — — 369 Other assets, net — — 8,941 3,566 — 12,507 Total assets $ — $ 579,191 $ 905,821 $ 65,260 $ (814,555 ) $ 735,717 LIABILITIES & DEFICIT Current liabilities: Current portion of long-term debt, net $ — $ 53,652 $ — $ — $ — $ 53,652 Accounts payable — — 106,039 4,170 (813 ) 109,396 Accrued payroll and employee costs — — 102,953 2,438 — 105,391 Intercompany payables 45,085 117,385 9,140 — (171,610 ) — Deferred income taxes — — — 29 (29 ) — Accrued liabilities 150,371 31,486 71,200 3,933 (158,306 ) 98,684 Income taxes payable — — 18,688 — (287 ) 18,401 Total current liabilities 195,456 202,523 308,020 10,570 (331,045 ) 385,524 Long-term debt, net — 527,039 — — — 527,039 Other long-term liabilities — — 13,081 — — 13,081 Noncontrolling interests — — 5,529 — — 5,529 (Deficit) Equity (195,456 ) (150,371 ) 579,191 54,690 (483,510 ) (195,456 ) Total liabilities and deficit $ — $ 579,191 $ 905,821 $ 65,260 $ (814,555 ) $ 735,717 |
Unaudited Condensed Consolidating Statement of Cash Flow Information | Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Cash Flow Information For the Nine Months Ended September 30, 2018 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net cash provided by operating activities $ — $ 8,138 $ 110,180 $ 13,557 $ (772 ) $ 131,103 Cash flows from investing activities: Purchase of property and equipment — — (8,377 ) — — (8,377 ) Proceeds from sale of property, plant and equipment — — 13 — — 13 Purchase of software — — (274 ) — — (274 ) Return of capital from equity method investees — — 8,278 — — 8,278 Contributions to equity method investees — — (4,433 ) — — (4,433 ) Transfers to affiliates — — (46,505 ) (8,816 ) 55,321 — Net cash used in investing activities — — (51,298 ) (8,816 ) 55,321 (4,793 ) Cash flows from financing activities: Payments on senior secured credit facility — (54,943 ) — — — (54,943 ) Equity contribution from affiliates of Cerberus — 300 — — — 300 Payments of dividends to noncontrolling interests — — — (1,544 ) 772 (772 ) Net transfers from Parent/subsidiary — 46,505 8,816 — (55,321 ) — Net cash (used in ) provided by financing activities — (8,138 ) 8,816 (1,544 ) (54,549 ) (55,415 ) Net increase in cash, cash equivalents and restricted cash — — 67,698 3,197 — 70,895 Cash, cash equivalents and restricted cash, beginning of period — — 153,004 15,246 — 168,250 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 220,702 $ 18,443 $ — $ 239,145 Delta Tucker Holdings, Inc. and Subsidiaries Unaudited Condensed Consolidating Statement of Cash Flow Information For The Nine Months Ended September 30, 2017 (Amounts in thousands) Parent Subsidiary Issuer Subsidiary Guarantors Subsidiary Non- Guarantors Eliminations Consolidated Net cash provided by (used in) operating activities $ — $ 22,568 $ (12,013 ) $ 136 $ (554 ) $ 10,137 Cash flows from investing activities: Purchase of property and equipment — — (3,931 ) — — (3,931 ) Proceeds from sale of property, plant and equipment — — 537 — — 537 Purchase of software — — (646 ) — — (646 ) Return of capital from equity method investees — — 6,017 — — 6,017 Contributions to equity method investees — — (3,250 ) — — (3,250 ) Contribution to subsidiary (40,599 ) — — — 40,599 — Transfers from affiliates — — 5,978 4,525 (10,503 ) — Net cash (used in) provided by investing activities (40,599 ) — 4,705 4,525 30,096 (1,273 ) Cash flows from financing activities: Payments on senior secured credit facility — (25,114 ) — — — (25,114 ) Payment to bondholders of senior unsecured notes — (39,319 ) — — — (39,319 ) Equity contribution from Parent — 40,599 — — (40,599 ) — Equity contributions from affiliates of Cerberus 40,599 300 — — — 40,899 Payments of dividends to noncontrolling interests — — — (1,109 ) 554 (555 ) Net transfers to Parent/subsidiary — (5,978 ) (4,525 ) — 10,503 — Net cash provided by (used in) financing activities 40,599 (29,512 ) (4,525 ) (1,109 ) (29,542 ) (24,089 ) Net (decrease) increase in cash, cash equivalents and restricted cash — (6,944 ) (11,833 ) 3,552 — (15,225 ) Cash, cash equivalents and restricted cash, beginning of period — 6,944 107,136 11,802 — 125,882 Cash, cash equivalents and restricted cash, end of period $ — $ — $ 95,303 $ 15,354 $ — $ 110,657 |
Basis of Presentation and Acc_4
Basis of Presentation and Accounting Policies - Gross Favorable and Unfavorable Adjustments to Income Before Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Accounting Policies [Abstract] | ||||
Gross favorable adjustments | $ 7.9 | $ 8 | $ 18.2 | $ 22.1 |
Gross unfavorable adjustments | (7.5) | (1) | (1.5) | (2) |
Net adjustments | $ 0.4 | $ 7 | $ 16.7 | $ 20.1 |
Basis of Presentation and Acc_5
Basis of Presentation and Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract assets | $ 163,876 | $ 190,440 | $ 0 |
Contract liabilities | $ 39,842 | 9,164 | 0 |
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract assets | 191,800 | ||
Contract liabilities | $ 9,164 | $ 9,200 |
Basis of Presentation and Acc_6
Basis of Presentation and Accounting Policies - Reconciliation of Cash, Cash Equivalents, and Restricted Cash (Details) - USD ($) $ in Thousands | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Reconciliation Of Cash, Cash Equivalents, And Restricted Cash [Roll Forward] | |||||
Cash and cash equivalents | $ 239,145 | $ 110,657 | $ 168,250 | $ 168,250 | $ 118,218 |
Restricted cash | 0 | 7,664 | |||
Total cash, cash equivalents and restricted cash | 239,145 | 110,657 | $ 168,250 | $ 125,882 | |
Net decrease in cash, cash equivalents and restricted cash | $ 70,895 | $ (15,225) |
Basis of Presentation and Acc_7
Basis of Presentation and Accounting Policies - Changes in the Consolidated Statements of Cash Flows due to Adoption of ASU 2016-18 (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by operating activities | $ 131,103 | $ 10,137 |
Net cash (used in) provided by investing activities | (4,793) | (1,273) |
Net cash used in financing activities | (55,415) | (24,089) |
Net decrease in cash, cash equivalents and restricted cash | 70,895 | (15,225) |
Cash, cash equivalents and restricted cash, beginning of period | 168,250 | 125,882 |
Cash, cash equivalents and restricted cash, end of period | $ 239,145 | 110,657 |
As Previously Reported | ||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||
Net cash provided by operating activities | 10,744 | |
Net cash (used in) provided by investing activities | 5,784 | |
Net cash used in financing activities | (24,089) | |
Net decrease in cash, cash equivalents and restricted cash | (7,561) | |
Cash, cash equivalents and restricted cash, beginning of period | 118,218 | |
Cash, cash equivalents and restricted cash, end of period | $ 110,657 |
Revenue Recognition - Performan
Revenue Recognition - Performance Obligations (Details) $ in Millions | Sep. 30, 2018USD ($) |
Revenue from Contract with Customer [Abstract] | |
Performance obligation, expected timing of satisfaction | 30 months |
Performance obligation | $ 208 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected performance obligation recognized | 40.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-07-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Expected performance obligation recognized | 88.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue from Contract with Customer [Abstract] | |
Performance obligation, expected timing of satisfaction | 1 year |
Revenue Recognition - Narrative
Revenue Recognition - Narrative (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract liabilities | $ 39,842 | $ 9,164 | $ 0 |
Accumulated deficit | (724,923) | (792,785) | (791,445) |
Total reported assets | 716,210 | 734,377 | 735,717 |
Total reported liabilities | 839,311 | $ 925,644 | $ 925,644 |
Difference between Revenue Guidance in Effect before and after Topic 606 | ASU 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Total reported assets | 2,100 | ||
Total reported liabilities | 600 | ||
Long-term Contract with Customer | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Contract liabilities | $ 45,100 |
Revenue Recognition - Disaggreg
Revenue Recognition - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 525,022 | $ 502,974 | $ 1,609,676 | $ 1,437,133 | |
Headquarters / Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | [1] | (869) | (700) | 329 | (743) |
Fixed-Price | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 185,066 | 603,930 | |||
Fixed-Price | Headquarters / Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | (271) | 123 | |||
Time-and-Materials | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 28,679 | 73,493 | |||
Time-and-Materials | Headquarters / Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | (36) | 15 | |||
Cost-Reimbursement | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 311,277 | 932,253 | |||
Cost-Reimbursement | Headquarters / Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | (562) | 191 | |||
DOD | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 456,823 | 1,340,689 | |||
DOD | Headquarters / Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 0 | 0 | |||
DOS | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 47,706 | 213,027 | |||
DOS | Headquarters / Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 0 | 0 | |||
Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 20,493 | 55,960 | |||
Other | Headquarters / Other | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | (869) | 329 | |||
DynAviation | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 250,998 | 307,864 | 865,684 | 886,085 | |
DynAviation | Fixed-Price | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 105,900 | 369,698 | |||
DynAviation | Time-and-Materials | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 25,481 | 67,723 | |||
DynAviation | Cost-Reimbursement | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 119,617 | 428,263 | |||
DynAviation | DOD | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 231,094 | 715,040 | |||
DynAviation | DOS | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 5,282 | 105,480 | |||
DynAviation | Other | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 14,622 | 45,164 | |||
DynLogistics | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 274,893 | $ 195,810 | 743,663 | $ 551,791 | |
DynLogistics | Fixed-Price | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 79,437 | 234,109 | |||
DynLogistics | Time-and-Materials | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 3,234 | 5,755 | |||
DynLogistics | Cost-Reimbursement | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 192,222 | 503,799 | |||
DynLogistics | DOD | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 225,729 | 625,649 | |||
DynLogistics | DOS | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | 42,424 | 107,547 | |||
DynLogistics | Other | Operating Segments | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue | $ 6,740 | $ 10,467 | |||
[1] | Headquarters revenue primarily represents revenue earned on shared services arrangements for general and administrative services provided to unconsolidated joint ventures and elimination of intercompany items between segments. |
Revenue Recognition - Balance S
Revenue Recognition - Balance Sheets Adjustments due to Adoption of ASC 606 (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 239,145 | $ 168,250 | $ 168,250 | $ 110,657 | $ 118,218 |
Accounts receivable, net | 119,567 | 160,770 | 352,550 | ||
Contract assets | 163,876 | 190,440 | 0 | ||
Prepaid expenses and other current assets | 49,826 | 52,542 | 52,542 | ||
Total current assets | 572,414 | 572,002 | 573,342 | ||
Property and equipment, net | 22,985 | 23,568 | 23,568 | ||
Goodwill | 42,093 | 42,093 | 42,093 | ||
Tradenames, net | 28,536 | 28,536 | 28,536 | ||
Other intangibles, net | 38,074 | 55,302 | 55,302 | ||
Long-term deferred taxes | 874 | 369 | 369 | ||
Other assets, net | 11,234 | 12,507 | 12,507 | ||
Total assets | 716,210 | 734,377 | 735,717 | ||
Current liabilities: | |||||
Current portion of long-term debt, net | 0 | 53,652 | 53,652 | ||
Accounts payable | 100,078 | 109,396 | 109,396 | ||
Accrued payroll and employee costs | 79,739 | 105,391 | 105,391 | ||
Contract liabilities | 39,842 | 9,164 | 0 | ||
Accrued liabilities | 56,416 | 89,520 | 98,684 | ||
Income taxes payable | 14,854 | 18,401 | 18,401 | ||
Total current liabilities | 290,929 | 385,524 | 385,524 | ||
Long-term debt, net | 536,945 | 527,039 | 527,039 | ||
Other long-term liabilities | 11,437 | 13,081 | 13,081 | ||
Total liabilities | 839,311 | 925,644 | 925,644 | ||
DEFICIT | |||||
Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 0 | 0 | 0 | ||
Additional paid-in capital | 596,816 | 596,393 | 596,393 | ||
Accumulated deficit | (724,923) | (792,785) | (791,445) | ||
Accumulated other comprehensive loss | (443) | (404) | (404) | ||
Total deficit attributable to Delta Tucker Holdings, Inc. | (128,550) | (196,796) | (195,456) | ||
Noncontrolling interests | 5,449 | 5,529 | 5,529 | ||
Total deficit | (123,101) | (191,267) | (189,927) | $ (211,237) | $ (261,937) |
Total liabilities and deficit | 716,210 | 734,377 | 735,717 | ||
Parenthetical Disclosures | |||||
Allowance for doubtful accounts | $ 5,076 | $ 10,142 | |||
Common stock, par value (in dollars per share) | $ 0.01000 | $ 0.01000 | |||
Common stock, shares authorized (in shares) | 1,000 | 1,000 | |||
Common stock, shares issued (in shares) | 100 | 100 | |||
Common stock, shares outstanding (in shares) | 100 | 100 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||
Current assets: | |||||
Cash and cash equivalents | $ 239,145 | $ 168,250 | |||
Accounts receivable, net | 285,519 | 352,550 | |||
Contract assets | 0 | 0 | |||
Prepaid expenses and other current assets | 49,826 | 52,542 | |||
Total current assets | 574,490 | 573,342 | |||
Property and equipment, net | 22,985 | 23,568 | |||
Goodwill | 42,093 | 42,093 | |||
Tradenames, net | 28,536 | 28,536 | |||
Other intangibles, net | 38,074 | 55,302 | |||
Long-term deferred taxes | 874 | 369 | |||
Other assets, net | 11,234 | 12,507 | |||
Total assets | 718,286 | 735,717 | |||
Current liabilities: | |||||
Current portion of long-term debt, net | 53,652 | ||||
Accounts payable | 100,078 | 109,396 | |||
Accrued payroll and employee costs | 79,739 | 105,391 | |||
Contract liabilities | 0 | 0 | |||
Accrued liabilities | 96,801 | 98,684 | |||
Income taxes payable | 14,877 | 18,401 | |||
Total current liabilities | 291,495 | 385,524 | |||
Long-term debt, net | 536,945 | 527,039 | |||
Other long-term liabilities | 11,437 | 13,081 | |||
Total liabilities | 839,877 | 925,644 | |||
DEFICIT | |||||
Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at September 30, 2018 and December 31, 2017, respectively | 0 | 0 | |||
Additional paid-in capital | 596,816 | 596,393 | |||
Accumulated deficit | (723,413) | (791,445) | |||
Accumulated other comprehensive loss | (443) | (404) | |||
Total deficit attributable to Delta Tucker Holdings, Inc. | (127,040) | (195,456) | |||
Noncontrolling interests | 5,449 | 5,529 | |||
Total deficit | (121,591) | (189,927) | |||
Total liabilities and deficit | $ 718,286 | 735,717 | |||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | |||||
Current assets: | |||||
Accounts receivable, net | (191,780) | ||||
Contract assets | 191,800 | ||||
Total current assets | (1,340) | ||||
Total assets | (1,340) | ||||
Current liabilities: | |||||
Contract liabilities | 9,164 | $ 9,200 | |||
Accrued liabilities | (9,164) | ||||
DEFICIT | |||||
Accumulated deficit | (1,340) | ||||
Total deficit attributable to Delta Tucker Holdings, Inc. | (1,340) | ||||
Total deficit | (1,340) | ||||
Total liabilities and deficit | (1,340) | ||||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Contract Assets | |||||
Current assets: | |||||
Contract assets | 191,780 | ||||
ASU 2014-09 | Difference between Revenue Guidance in Effect before and after Topic 606 | Accumulated Deficit | |||||
Current assets: | |||||
Contract assets | $ (1,340) |
Revenue Recognition - Consolida
Revenue Recognition - Consolidated Statements of Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | $ 525,022 | $ 502,974 | $ 1,609,676 | $ 1,437,133 |
Cost of services | (454,270) | (447,796) | (1,396,291) | (1,256,924) |
Selling, general and administrative expenses | (21,163) | (21,243) | (71,192) | (80,129) |
Depreciation and amortization expense | (6,022) | (8,792) | (18,053) | (25,936) |
(Loss) earnings from equity method investees | (60) | 53 | 209 | 105 |
Operating income | 43,507 | 25,196 | 124,349 | 74,249 |
Interest expense | (16,197) | (17,149) | (49,268) | (53,628) |
Loss on early extinguishment of debt | 0 | 0 | (239) | (24) |
Interest income | 863 | 15 | 1,796 | 39 |
Other income, net | 790 | (43) | 1,931 | 1,474 |
Income before income taxes | 28,963 | 8,019 | 78,569 | 22,110 |
Provision for income taxes | (2,040) | (3,338) | (9,924) | (11,677) |
Net income | 26,923 | 4,681 | 68,645 | 10,433 |
Noncontrolling interests | (278) | (295) | (783) | (858) |
Net income attributable to Delta Tucker Holdings, Inc. | 26,645 | $ 4,386 | 67,862 | $ 9,575 |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue | 520,133 | 1,609,864 | ||
Cost of services | (454,270) | (1,396,286) | ||
Selling, general and administrative expenses | (21,163) | (71,192) | ||
Depreciation and amortization expense | (6,022) | (18,053) | ||
(Loss) earnings from equity method investees | (60) | 209 | ||
Operating income | 38,618 | 124,542 | ||
Interest expense | (16,197) | (49,268) | ||
Loss on early extinguishment of debt | 0 | (239) | ||
Interest income | 863 | 1,796 | ||
Other income, net | 790 | 1,931 | ||
Income before income taxes | 24,074 | 78,762 | ||
Provision for income taxes | (1,298) | (9,947) | ||
Net income | 22,776 | 68,815 | ||
Noncontrolling interests | (278) | (783) | ||
Net income attributable to Delta Tucker Holdings, Inc. | $ 22,498 | $ 68,032 |
Revenue Recognition - Consoli_2
Revenue Recognition - Consolidated Statements of Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net income | $ 26,923 | $ 4,681 | $ 68,645 | $ 10,433 |
Foreign currency translation adjustment | (22) | 247 | (50) | 263 |
Other comprehensive (loss) income, before tax | (22) | 247 | (50) | 263 |
Income tax benefit (expense) related to items of other comprehensive income (loss) | 5 | (88) | 11 | (94) |
Other comprehensive (loss) income | (17) | 159 | (39) | 169 |
Comprehensive income | 26,906 | 4,840 | 68,606 | 10,602 |
Comprehensive loss attributable to noncontrolling interests | (278) | (295) | (783) | (858) |
Comprehensive income attributable to Delta Tucker Holdings, Inc. | 26,628 | $ 4,545 | 67,823 | $ 9,744 |
Calculated under Revenue Guidance in Effect before Topic 606 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Net income | 22,776 | 68,815 | ||
Foreign currency translation adjustment | (22) | (50) | ||
Other comprehensive (loss) income, before tax | (22) | (50) | ||
Income tax benefit (expense) related to items of other comprehensive income (loss) | 5 | 11 | ||
Other comprehensive (loss) income | (17) | (39) | ||
Comprehensive income | 22,759 | 68,776 | ||
Comprehensive loss attributable to noncontrolling interests | (278) | (783) | ||
Comprehensive income attributable to Delta Tucker Holdings, Inc. | $ 22,481 | $ 67,993 |
Revenue Recognition - Consoli_3
Revenue Recognition - Consolidated Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 239,145 | $ 168,250 | $ 168,250 | $ 110,657 | $ 118,218 |
Accounts receivable, net of allowances of $5,076 | 119,567 | 160,770 | 352,550 | ||
Contract assets | 163,876 | 190,440 | 0 | ||
Prepaid expenses and other current assets | 49,826 | 52,542 | 52,542 | ||
Total current assets | 572,414 | 572,002 | 573,342 | ||
Property and equipment, net | 22,985 | 23,568 | 23,568 | ||
Goodwill | 42,093 | 42,093 | 42,093 | ||
Tradenames, net | 28,536 | 28,536 | 28,536 | ||
Other intangibles, net | 38,074 | 55,302 | 55,302 | ||
Long-term deferred taxes | 874 | 369 | 369 | ||
Other assets, net | 11,234 | 12,507 | 12,507 | ||
Total assets | 716,210 | 734,377 | 735,717 | ||
Current liabilities: | |||||
Accounts payable | 100,078 | 109,396 | 109,396 | ||
Accrued payroll and employee costs | 79,739 | 105,391 | 105,391 | ||
Contract liabilities | 39,842 | 9,164 | 0 | ||
Accrued liabilities | 56,416 | 89,520 | 98,684 | ||
Income taxes payable | 14,854 | 18,401 | 18,401 | ||
Total current liabilities | 290,929 | 385,524 | 385,524 | ||
Long-term debt, net | 536,945 | 527,039 | 527,039 | ||
Other long-term liabilities | 11,437 | 13,081 | 13,081 | ||
Total liabilities | 839,311 | 925,644 | 925,644 | ||
DEFICIT | |||||
Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at September 30, 2018 | 0 | 0 | 0 | ||
Additional paid-in capital | 596,816 | 596,393 | 596,393 | ||
Accumulated deficit | (724,923) | (792,785) | (791,445) | ||
Accumulated other comprehensive loss | (443) | (404) | (404) | ||
Total deficit attributable to Delta Tucker Holdings, Inc. | (128,550) | (196,796) | (195,456) | ||
Noncontrolling interests | 5,449 | 5,529 | 5,529 | ||
Total deficit | (123,101) | (191,267) | (189,927) | $ (211,237) | $ (261,937) |
Total liabilities and deficit | 716,210 | $ 734,377 | 735,717 | ||
Parenthetical Disclosures | |||||
Allowance for doubtful accounts | $ 5,076 | $ 10,142 | |||
Common stock, par value (in dollars per share) | $ 0.01000 | $ 0.01000 | |||
Common stock, shares authorized (in shares) | 1,000 | 1,000 | |||
Common stock, shares issued (in shares) | 100 | 100 | |||
Common stock, shares outstanding (in shares) | 100 | 100 | |||
Calculated under Revenue Guidance in Effect before Topic 606 | |||||
Current assets: | |||||
Cash and cash equivalents | $ 239,145 | $ 168,250 | |||
Accounts receivable, net of allowances of $5,076 | 285,519 | 352,550 | |||
Contract assets | 0 | 0 | |||
Prepaid expenses and other current assets | 49,826 | 52,542 | |||
Total current assets | 574,490 | 573,342 | |||
Property and equipment, net | 22,985 | 23,568 | |||
Goodwill | 42,093 | 42,093 | |||
Tradenames, net | 28,536 | 28,536 | |||
Other intangibles, net | 38,074 | 55,302 | |||
Long-term deferred taxes | 874 | 369 | |||
Other assets, net | 11,234 | 12,507 | |||
Total assets | 718,286 | 735,717 | |||
Current liabilities: | |||||
Accounts payable | 100,078 | 109,396 | |||
Accrued payroll and employee costs | 79,739 | 105,391 | |||
Contract liabilities | 0 | 0 | |||
Accrued liabilities | 96,801 | 98,684 | |||
Income taxes payable | 14,877 | 18,401 | |||
Total current liabilities | 291,495 | 385,524 | |||
Long-term debt, net | 536,945 | 527,039 | |||
Other long-term liabilities | 11,437 | 13,081 | |||
Total liabilities | 839,877 | 925,644 | |||
DEFICIT | |||||
Common stock, $0.01 par value – 1,000 shares authorized and 100 shares issued and outstanding at September 30, 2018 | 0 | 0 | |||
Additional paid-in capital | 596,816 | 596,393 | |||
Accumulated deficit | (723,413) | (791,445) | |||
Accumulated other comprehensive loss | (443) | (404) | |||
Total deficit attributable to Delta Tucker Holdings, Inc. | (127,040) | (195,456) | |||
Noncontrolling interests | 5,449 | 5,529 | |||
Total deficit | (121,591) | (189,927) | |||
Total liabilities and deficit | $ 718,286 | $ 735,717 |
Revenue Recognition - Consoli_4
Revenue Recognition - Consolidated Statements of Cash Flows (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | ||
Cash flows from operating activities | |||||||
Net income | $ 26,923 | $ 4,681 | $ 68,645 | $ 10,433 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | [1] | 6,913 | 9,320 | 20,635 | 27,245 | ||
Loss on early extinguishment of debt | 0 | 0 | 239 | 24 | |||
Amortization of deferred loan costs and original issue discount | 4,008 | 4,049 | |||||
Allowance on accounts receivable and other noncash gains or losses | (24,659) | 2,724 | |||||
Earnings from equity method investees | (209) | (105) | |||||
Deferred income taxes | (505) | (755) | |||||
Other, including paid in kind interest | 6,082 | 6,226 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable and contract assets | 74,680 | (25,731) | |||||
Prepaid expenses and other current assets | 576 | (4,867) | |||||
Accounts payable, accrued liabilities and contract liabilities | (14,757) | (14,168) | |||||
Income taxes payable | (3,632) | 4,840 | |||||
Net cash provided by operating activities | 131,103 | 10,137 | |||||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (8,377) | (3,931) | |||||
Proceeds from sale of property and equipment | 13 | 537 | |||||
Purchase of software | (274) | (646) | |||||
Return of capital from equity method investees | 8,278 | 6,017 | |||||
Contributions to equity method investees | (4,433) | (3,250) | |||||
Net cash used in investing activities | (4,793) | (1,273) | |||||
Cash flows from financing activities | |||||||
Payments on senior secured credit facility | (54,943) | (25,114) | |||||
Equity contribution from affiliates of Cerberus | 300 | 40,899 | |||||
Payments of dividends to noncontrolling interests | (772) | (555) | |||||
Net cash used in financing activities | (55,415) | (24,089) | |||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 70,895 | (15,225) | |||||
Cash, cash equivalents and restricted cash, end of period | 239,145 | 110,657 | 239,145 | 110,657 | |||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | 239,145 | $ 110,657 | 239,145 | $ 110,657 | $ 168,250 | $ 125,882 | |
Calculated under Revenue Guidance in Effect before Topic 606 | |||||||
Cash flows from operating activities | |||||||
Net income | 22,776 | 68,815 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 20,635 | ||||||
Loss on early extinguishment of debt | 0 | 239 | |||||
Amortization of deferred loan costs and original issue discount | 4,008 | ||||||
Allowance on accounts receivable and other noncash gains or losses | (24,659) | ||||||
Earnings from equity method investees | (209) | ||||||
Deferred income taxes | (505) | ||||||
Other, including paid in kind interest | 6,082 | ||||||
Changes in assets and liabilities: | |||||||
Accounts receivable and contract assets | 73,945 | ||||||
Prepaid expenses and other current assets | 576 | ||||||
Accounts payable, accrued liabilities and contract liabilities | (14,215) | ||||||
Income taxes payable | (3,609) | ||||||
Net cash provided by operating activities | 131,103 | ||||||
Cash flows from investing activities | |||||||
Purchase of property and equipment | (8,377) | ||||||
Proceeds from sale of property and equipment | 13 | ||||||
Purchase of software | (274) | ||||||
Return of capital from equity method investees | 8,278 | ||||||
Contributions to equity method investees | (4,433) | ||||||
Net cash used in investing activities | (4,793) | ||||||
Cash flows from financing activities | |||||||
Payments on senior secured credit facility | (54,943) | ||||||
Equity contribution from affiliates of Cerberus | 300 | ||||||
Payments of dividends to noncontrolling interests | (772) | ||||||
Net cash used in financing activities | (55,415) | ||||||
Net increase (decrease) in cash, cash equivalents and restricted cash | 70,895 | ||||||
Cash, cash equivalents and restricted cash, end of period | 239,145 | 239,145 | |||||
Cash, Cash Equivalents, Restricted Cash and Restricted Cash Equivalents | $ 239,145 | $ 239,145 | $ 168,250 | ||||
[1] | Includes amounts included in Cost of services of $0.9 million and $2.6 million and for the three and nine months ended September 30, 2018, respectively, and $0.5 million and $1.3 million for the three and nine months ended September 30, 2017, respectively. |
Composition of Certain Financ_3
Composition of Certain Financial Statement Captions - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Prepaid expenses and other current assets | |||
Prepaid expenses | $ 39,556 | $ 38,423 | |
Inventories, net | 4,794 | 8,240 | |
Work-in-process inventory | 459 | 520 | |
Joint venture receivables | 37 | 29 | |
Other current assets | 4,980 | 5,330 | |
Total prepaid expenses and other current assets | $ 49,826 | $ 52,542 | $ 52,542 |
Composition of Certain Financ_4
Composition of Certain Financial Statement Captions - Property, Plant and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Aircraft | $ 3,868 | $ 3,868 | |
Computers and related equipment | 9,960 | 7,967 | |
Leasehold improvements | 17,401 | 17,614 | |
Office furniture and fixtures | 3,374 | 4,184 | |
Vehicles | 14,533 | 12,659 | |
Gross property and equipment | 49,136 | 46,292 | |
Less accumulated depreciation | (26,151) | (22,724) | |
Total property and equipment, net | $ 22,985 | $ 23,568 | $ 23,568 |
Composition of Certain Financ_5
Composition of Certain Financial Statement Captions - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Restructuring Cost and Reserve [Line Items] | |||||
Maximum percentage of prepaid expense on current assets | 5.00% | 5.00% | |||
Property additions | $ 1.4 | $ 4.4 | |||
Depreciation expense | $ 1.5 | $ 1.3 | 4.6 | $ 3.3 | |
Other long-term liabilities | 11.4 | 11.4 | 13.1 | ||
Other long-term liabilities due to long-term incentive bonus plan and nonqualified unfunded deferred compensation plan | 2.9 | 2.9 | 3.3 | ||
Uncertain tax benefit included in other long-term liabilities | 3.5 | 3.5 | 3.5 | ||
Tysons Corner Facility | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Other long-term liabilities due to long-term leasehold obligations | $ 2.5 | $ 2.5 | $ 2.8 |
Composition of Certain Financ_6
Composition of Certain Financial Statement Captions - Other Assets, Net (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Investment in affiliates | $ 2,110 | $ 5,746 | |
Palm promissory note, long-term portion | 1,751 | 1,876 | |
Other | 7,373 | 4,885 | |
Total other assets, net | $ 11,234 | $ 12,507 | $ 12,507 |
Composition of Certain Financ_7
Composition of Certain Financial Statement Captions - Accrued Payroll and Employee Costs (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Wages, compensation and other benefits | $ 61,615 | $ 90,583 | |
Accrued vacation | 17,034 | 13,625 | |
Accrued contributions to employee benefit plans | 1,090 | 1,183 | |
Total accrued payroll and employee costs | $ 79,739 | $ 105,391 | $ 105,391 |
Composition of Certain Financ_8
Composition of Certain Financial Statement Captions - Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Customer liabilities | $ 6,803 | $ 23,486 | |
Accrued insurance | 19,456 | 23,793 | |
Accrued interest | 12,069 | 23,194 | |
Contract losses | 1,699 | 2,660 | |
Legal reserves | 4,743 | 9,233 | |
Other | 11,646 | 16,318 | |
Total accrued liabilities | $ 56,416 | $ 89,520 | $ 98,684 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jan. 31, 2018segment | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)segment | Jan. 01, 2018USD ($) | |
Subsidiary or Equity Method Investee [Line Items] | |||||||
Number of operating segments | segment | 2 | 3 | |||||
Number of reporting segments | segment | 2 | 3 | |||||
Carrying amount of goodwill | $ 42,093 | $ 42,093 | $ 42,093 | $ 42,093 | |||
Amortization expense for customer-related intangibles, other intangibles and finite-lived tradenames | 5,400 | $ 8,000 | 16,000 | $ 24,000 | |||
Net carrying value of capitalized software | 1,500 | 1,500 | 3,200 | ||||
Estimated aggregate future amortization expense | |||||||
Remainder of current year | 5,400 | 5,400 | |||||
2,019 | 21,400 | 21,400 | |||||
2,020 | 11,100 | 11,100 | |||||
2,021 | 100 | 100 | |||||
2,022 | 0 | 0 | |||||
Thereafter | 0 | 0 | |||||
DynLogistics | Operating Segments | |||||||
Subsidiary or Equity Method Investee [Line Items] | |||||||
Carrying amount of goodwill | $ 42,100 | $ 42,100 | $ 42,100 |
Income Taxes - Domestic and For
Income Taxes - Domestic and Foreign Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Domestic and foreign components of Income (loss) before income taxes | ||||
Domestic | $ 23,886 | $ 7,683 | $ 72,967 | $ 19,909 |
Foreign | 5,077 | 336 | 5,602 | 2,201 |
Income before income taxes | $ 28,963 | $ 8,019 | $ 78,569 | $ 22,110 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Operating Loss Carryforwards [Line Items] | |||||
Non-current deferred tax liabilities | $ 900,000 | $ 900,000 | $ 400,000 | ||
Effective tax rate | 7.00% | 41.60% | 12.60% | 52.80% | |
Valuation allowance on deferred tax assets | $ 58,000,000 | $ 58,000,000 | 66,600,000 | ||
Unrecognized tax benefits | 4,100,000 | 4,100,000 | 2,800,000 | ||
Unrecognized tax benefits impacting the effective tax rate if recognized | $ 2,700,000 | 2,700,000 | $ 2,700,000 | ||
Estimated federal income tax payments | 14,107,000 | $ 7,692,000 | |||
Domestic Tax Authority | |||||
Operating Loss Carryforwards [Line Items] | |||||
Estimated federal income tax payments | 0 | ||||
Saudi Arabia Tax Authority | Tax Year 2002 to 2013 | |||||
Operating Loss Carryforwards [Line Items] | |||||
Tax assessment | $ 7,700,000 |
Contract Balances - Narrative (
Contract Balances - Narrative (Details) $ in Thousands | 9 Months Ended | ||
Sep. 30, 2018USD ($)contract_claim | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($)contract_claim | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Unbilled receivables | $ 14,100 | $ 12,000 | |
Number of contract claims | contract_claim | 1 | 1 | |
Receivables on contract claims outstanding, net of reserves | $ 2,800 | $ 2,700 | |
Unbilled accounts receivable reclassified to contract assets | 74,680 | $ (25,731) | |
Increase in contract assets | 1,600,000 | ||
Contract assets reclassified to accounts receivable | 1,600,000 | ||
Revenue recognized related to contract liabilities | 7,500 | ||
Allowance for doubtful accounts | 5,100 | $ 10,100 | |
Unbilled accounts receivable | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Unbilled accounts receivable reclassified to contract assets | $ 191,780 |
Contract Balances - Composition
Contract Balances - Composition of Contract Balances (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Accounts receivable | ||
Beginning balance | $ 352,550 | |
Change | (74,680) | $ 25,731 |
Ending balance | 119,567 | |
Contract assets | ||
Beginning balance | 0 | |
Change | 163,876 | |
Ending balance | 163,876 | |
Contract liabilities | ||
Beginning balance | 0 | |
Change | 39,842 | |
Ending balance | 39,842 | |
Billed accounts receivable, net of allowances | ||
Accounts receivable | ||
Beginning balance | 160,770 | |
Change | (41,203) | |
Ending balance | 119,567 | |
Unbilled accounts receivable | ||
Accounts receivable | ||
Beginning balance | 191,780 | |
Change | (191,780) | |
Ending balance | $ 0 |
Fair Value of Financial Asset_3
Fair Value of Financial Assets and Liabilities (Details) - USD ($) | Sep. 30, 2018 | Dec. 31, 2017 | Jun. 15, 2016 |
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount | $ 545,721,000 | $ 593,712,000 | |
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 536,945,000 | 580,691,000 | |
Less current portion of long-term debt, net | 0 | (54,943,000) | |
Total long-term debt, net | 545,721,000 | 538,769,000 | |
Fair Value, Measurements, Recurring | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 559,772,000 | 613,826,000 | |
Less current portion of long-term debt, net | 0 | (54,943,000) | |
Total long-term debt, net | 559,772,000 | 558,883,000 | |
Fair Value, Measurements, Recurring | Carrying Amount | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount | 545,721,000 | 593,712,000 | |
Less current portion of long-term debt, net | 0 | (54,943,000) | |
Total long-term debt, net | $ 545,721,000 | 538,769,000 | |
Discount Rate | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Measurement input | 0.063 | ||
11.875% senior secured second lien notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate | 11.875% | ||
11.875% senior secured second lien notes | Fair Value, Measurements, Recurring | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | $ 402,025,000 | 401,273,000 | |
11.875% senior secured second lien notes | Fair Value, Measurements, Recurring | Carrying Amount | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount | 384,713,000 | 379,006,000 | |
Term loan | Fair Value, Measurements, Recurring | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 127,343,000 | 182,286,000 | |
Term loan | Fair Value, Measurements, Recurring | Carrying Amount | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount | 127,343,000 | 182,286,000 | |
Cerberus 3L notes | Fair Value, Measurements, Recurring | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 30,404,000 | 30,267,000 | |
Cerberus 3L notes | Fair Value, Measurements, Recurring | Carrying Amount | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount | $ 33,665,000 | 32,420,000 | |
11.875% senior secured second lien notes | |||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | |||
Interest rate | 11.875% | 11.875% | |
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount | $ 370,600,000 | ||
11.875% senior secured second lien notes | Fair Value, Measurements, Recurring | Carrying Amount | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount | $ 384,713,000 | 379,006,000 | |
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 383,837,000 | 377,829,000 | |
Cerberus 3L notes | Fair Value, Measurements, Recurring | Carrying Amount | |||
Estimate of the fair value of long-term debt based on quoted prices in active markets | |||
Carrying Amount | 33,665,000 | 32,420,000 | $ 30,000,000 |
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | $ 33,600,000 | $ 32,348,000 |
Debt - Composition of Debt (Det
Debt - Composition of Debt (Details) - USD ($) | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Jun. 15, 2016 |
Debt Instrument [Line Items] | ||||
Carrying Amount | $ 545,721,000 | $ 593,712,000 | ||
Original Issue Discount on Term Loan | (6,324,000) | (8,996,000) | ||
Deferred Financing Costs, Net | (2,452,000) | (4,025,000) | ||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 536,945,000 | 580,691,000 | ||
Less current portion of long-term debt, net | 0 | (54,943,000) | ||
Less current portion of long-term debt, net, original issue discount on term loan | 0 | 1,110,000 | ||
Less current portion of long-term debt, net, deferred financing costs, net | 0 | 181,000 | ||
Less current portion of long-term debt, net, carrying amount less original issue discount | 0 | $ (53,652,000) | (53,652,000) | |
Total long-term debt, net | 545,721,000 | 538,769,000 | ||
Total long-term debt, net, original issue discount on term loan | (6,324,000) | (7,886,000) | ||
Total long-term debt, net, deferred financing costs, net | (2,452,000) | (3,844,000) | ||
Total long-term debt, net, carrying amount less original issue discount | 536,945,000 | $ 527,039,000 | 527,039,000 | |
Fair Value, Measurements, Recurring | ||||
Debt Instrument [Line Items] | ||||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 559,772,000 | 613,826,000 | ||
Less current portion of long-term debt, net | 0 | (54,943,000) | ||
Total long-term debt, net | 559,772,000 | 558,883,000 | ||
Fair Value, Measurements, Recurring | Carrying Amount | ||||
Debt Instrument [Line Items] | ||||
Carrying Amount | 545,721,000 | 593,712,000 | ||
Less current portion of long-term debt, net | 0 | (54,943,000) | ||
Total long-term debt, net | $ 545,721,000 | 538,769,000 | ||
11.875% senior secured second lien notes | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 11.875% | 11.875% | ||
Carrying Amount | $ 370,600,000 | |||
11.875% senior secured second lien notes | Fair Value, Measurements, Recurring | Carrying Amount | ||||
Debt Instrument [Line Items] | ||||
Carrying Amount | $ 384,713,000 | 379,006,000 | ||
Original Issue Discount on Term Loan | 0 | 0 | ||
Deferred Financing Costs, Net | (876,000) | (1,177,000) | ||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 383,837,000 | 377,829,000 | ||
Term loan | Fair Value, Measurements, Recurring | Carrying Amount | ||||
Debt Instrument [Line Items] | ||||
Carrying Amount | 127,343,000 | 182,286,000 | ||
Original Issue Discount on Term Loan | (6,324,000) | (8,996,000) | ||
Deferred Financing Costs, Net | (1,511,000) | (2,776,000) | ||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 119,508,000 | 170,514,000 | ||
Term loan | Fair Value, Measurements, Recurring | Carrying Amount | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Carrying Amount | 127,300,000 | |||
Cerberus 3L notes | Fair Value, Measurements, Recurring | Carrying Amount | ||||
Debt Instrument [Line Items] | ||||
Carrying Amount | 33,665,000 | 32,420,000 | $ 30,000,000 | |
Original Issue Discount on Term Loan | 0 | 0 | ||
Deferred Financing Costs, Net | (65,000) | (72,000) | ||
Carrying Amount less Original Issue Discount on Term Loan and Deferred Financing Costs, Net | 33,600,000 | 32,348,000 | ||
Revolver | Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Amounts borrowed under the Revolver | $ 0 | $ 0 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Mar. 21, 2018USD ($) | Apr. 04, 2017USD ($) | Jun. 15, 2016USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Dec. 31, 2017USD ($) |
Debt Instrument [Line Items] | ||||||||
Loss on early extinguishment of debt | $ 0 | $ 0 | $ (239,000) | $ (24,000) | ||||
Long-term debt, gross | 545,721,000 | 545,721,000 | $ 593,712,000 | |||||
Principal payment required no later than specified date | 0 | 0 | ||||||
Repayments of senior debt | 0 | 39,319,000 | ||||||
Principal payment required no later than June 15, 2018 | 0 | 0 | ||||||
Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt less unrestricted cash and cash equivalents (up to) | $ 75,000,000 | $ 75,000,000 | ||||||
Applicable interest rate for unused commitment fees | 0.50% | 0.50% | ||||||
Revolving Credit Facility | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable base rate floor | 2.75% | |||||||
Revolving Credit Facility | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Variable Eurocurrency rate floor | 1.75% | |||||||
Letter of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Fronting fee rate | 0.25% | |||||||
Applicable interest rate for letter of credit subfacility | 5.50% | 5.50% | 5.50% | |||||
Fair Value, Measurements, Recurring | Carrying Amount | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | $ 545,721,000 | $ 545,721,000 | $ 593,712,000 | |||||
Term loan | ||||||||
Debt Instrument [Line Items] | ||||||||
Amortization of original issue discount | 900,000 | 900,000 | 2,700,000 | 2,700,000 | ||||
Amortization of financing costs | 400,000 | 500,000 | 1,300,000 | 1,400,000 | ||||
Principal payment required no later than specified date | 22,500,000 | 22,500,000 | ||||||
Repayments of principal in next twelve months | $ 22,500,000 | $ 22,500,000 | ||||||
Principal payment required no later than June 15, 2018 | $ 22,500,000 | |||||||
Term loan | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable interest rate for Term Loan | 8.08% | 8.08% | 7.75% | |||||
Term loan | Revolving Credit Facility | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable interest rates | 5.00% | |||||||
Term loan | Revolving Credit Facility | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable interest rates | 6.00% | |||||||
Term loan | Fair Value, Measurements, Recurring | Carrying Amount | ||||||||
Debt Instrument [Line Items] | ||||||||
Periodic payment, principal | $ 54,900,000 | |||||||
Long-term debt, gross | $ 127,343,000 | $ 127,343,000 | $ 182,286,000 | |||||
Term loan | Fair Value, Measurements, Recurring | Carrying Amount | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | 127,300,000 | $ 127,300,000 | ||||||
Senior Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Excess cash flow required to be used towards principal repayment | 100.00% | |||||||
Net cash proceeds of non-ordinary course assets sales, casualty and condemnation events except eligible reinvestments, required to be used towards principal repayment | 100.00% | |||||||
Senior Credit Facility | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Debt less unrestricted cash and cash equivalents (up to) | 75,000,000 | $ 75,000,000 | ||||||
Minimum liquidity requirement | 50,000,000 | $ 50,000,000 | ||||||
Senior Credit Facility | Fair Value, Measurements, Recurring | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum total leverage ratio | 4.75 | |||||||
Minimum interest coverage ratio | 1.70 | |||||||
Senior Credit Facility | Fair Value, Measurements, Recurring | Carrying Amount | ||||||||
Debt Instrument [Line Items] | ||||||||
Periodic payment, principal | $ 54,900,000 | $ 25,100,000 | ||||||
Revolver | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Maximum borrowing capacity | 85,800,000 | $ 85,800,000 | ||||||
Available borrowing capacity | 66,500,000 | 66,500,000 | 65,500,000 | |||||
Amounts borrowed under the Revolver | 0 | $ 0 | 0 | |||||
Revolver | Revolving Credit Facility | Minimum | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable interest rates | 5.50% | |||||||
Applicable interest rate for unused commitment fees | 0.50% | |||||||
Revolver | Revolving Credit Facility | Minimum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable interest rates | 4.50% | |||||||
Revolver | Revolving Credit Facility | Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable interest rate for unused commitment fees | 0.75% | |||||||
Revolver | Revolving Credit Facility | Maximum | Base Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable interest rates | 5.00% | |||||||
Revolver | Revolving Credit Facility | Maximum | Eurocurrency Rate | ||||||||
Debt Instrument [Line Items] | ||||||||
Applicable interest rates | 6.00% | |||||||
Revolver | Letter of Credit | ||||||||
Debt Instrument [Line Items] | ||||||||
Available borrowing capacity | 19,300,000 | $ 19,300,000 | 20,300,000 | |||||
Cerberus 3L notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Interest rate, payable in-kind | 5.00% | |||||||
Payable in kind interest converted into carrying amount | 400,000 | 400,000 | 1,100,000 | 1,200,000 | ||||
Decrease in covenant restrictiveness | 25.00% | |||||||
Cerberus 3L notes | Failure to Repay Debt, Maximum | ||||||||
Debt Instrument [Line Items] | ||||||||
Indenture default limit | $ 12,500,000 | |||||||
Cerberus 3L notes | Revolving Credit Facility | ||||||||
Debt Instrument [Line Items] | ||||||||
Incremental borrowing capacity | 15,000,000 | 15,000,000 | ||||||
Cerberus 3L notes | Fair Value, Measurements, Recurring | Carrying Amount | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | 30,000,000 | $ 33,665,000 | $ 33,665,000 | 32,420,000 | ||||
10.375% senior unsecured notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Principal amount | $ 415,700,000 | |||||||
Interest rate | 10.375% | |||||||
Repayments of senior debt | $ 45,000,000 | |||||||
11.875% senior secured second lien notes | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | $ 370,600,000 | |||||||
Interest rate | 11.875% | 11.875% | 11.875% | |||||
Interest rate, payable in cash | 10.375% | |||||||
Interest rate, payable in-kind | 1.50% | |||||||
Payable in kind interest converted into carrying amount | $ 2,900,000 | $ 2,800,000 | $ 5,700,000 | $ 5,600,000 | ||||
Payable in kind interest accrued | 1,400,000 | 1,400,000 | 2,800,000 | |||||
Total amount of indebtedness failed to repay resulting in default | $ 10,000,000 | |||||||
Date on which notes are redeemable | Jul. 1, 2018 | |||||||
Minimum notice period for redemption | 30 days | |||||||
Maximum notice period for redemption | 60 days | |||||||
11.875% senior secured second lien notes | Fair Value, Measurements, Recurring | Carrying Amount | ||||||||
Debt Instrument [Line Items] | ||||||||
Long-term debt, gross | $ 384,713,000 | $ 384,713,000 | $ 379,006,000 |
Debt - Optional Redemption of t
Debt - Optional Redemption of the Second Lien Notes (Details) - 11.875% senior secured second lien notes | Jun. 15, 2016 |
July 1, 2018 through June 30, 2019 | |
Debt Instrument [Line Items] | |
Redemption price | 103.00% |
July 1, 2019 and thereafter | |
Debt Instrument [Line Items] | |
Redemption price | 100.00% |
Debt - Contractual Maturity Sch
Debt - Contractual Maturity Schedule Associated with Debt (Details) - USD ($) $ in Thousands | Oct. 19, 2018 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | Jun. 15, 2016 |
Debt Instrument [Line Items] | |||||
2,018 | $ 0 | ||||
2,019 | 0 | ||||
2,020 | 512,056 | ||||
2,021 | 0 | ||||
2,022 | 0 | ||||
Thereafter | 33,665 | ||||
Carrying Amount | 545,721 | $ 593,712 | |||
Voluntary principal payment | 54,943 | $ 25,114 | |||
11.875% senior secured second lien notes | |||||
Debt Instrument [Line Items] | |||||
Carrying Amount | $ 370,600 | ||||
11.875% senior secured second lien notes | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
2,018 | 0 | ||||
2,019 | 0 | ||||
2,020 | 384,713 | ||||
2,021 | 0 | ||||
2,022 | 0 | ||||
Thereafter | 0 | ||||
Carrying Amount | 384,713 | ||||
Term loan | |||||
Debt Instrument [Line Items] | |||||
2,018 | 22,500 | ||||
2,019 | $ 22,500 | ||||
Term loan | Revolving Credit Facility | Subsequent Event | |||||
Debt Instrument [Line Items] | |||||
2,020 | $ 77,343 | ||||
Carrying Amount | 77,343 | ||||
Voluntary principal payment | $ 50,000 | ||||
Term loan | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
2,018 | 0 | ||||
2,019 | 0 | ||||
2,020 | 127,343 | ||||
2,021 | 0 | ||||
2,022 | 0 | ||||
Thereafter | 0 | ||||
Carrying Amount | 127,343 | ||||
Cerberus 3L notes | Line of Credit | |||||
Debt Instrument [Line Items] | |||||
2,018 | 0 | ||||
2,019 | 0 | ||||
2,020 | 0 | ||||
2,021 | 0 | ||||
2,022 | 0 | ||||
Thereafter | 33,665 | ||||
Carrying Amount | $ 33,665 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | Jan. 22, 2014 | Sep. 30, 2015 | Mar. 31, 2015 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | May 31, 2014 |
Loss Contingencies [Line Items] | |||||||||
Lease rental expense | $ 13,000,000 | $ 10,500,000 | $ 34,000,000 | $ 31,700,000 | |||||
Other accrued liabilities | 4,743,000 | 4,743,000 | $ 9,233,000 | ||||||
Liability for unpaid claims and claims adjustment expense, incurred but not reported (IBNR) claims, amount | 7,400,000 | 7,400,000 | $ 7,700,000 | ||||||
California Policy | |||||||||
Loss Contingencies [Line Items] | |||||||||
Fixed amount of stop loss coverage on policies | 250,000 | 250,000 | |||||||
Foreign Tax Authority | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought | $ 64,200,000 | ||||||||
Income tax issue resolved in favor of company | $ 54,000,000 | ||||||||
Other Matters | Foreign Tax Authority | Afghanistan | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought | $ 10,200,000 | ||||||||
Pending Litigation | Collectibility of Receivables | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought | $ 41,000,000 | ||||||||
Northrop Grumman Technical Services, Inc. | Pending Litigation | Performance Guarantee | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought | $ 5,000,000 | ||||||||
DCAA Audits Contracts - Years 2009 to 2012 | Unfavorable Regulatory Action | LOGCAP IV | |||||||||
Loss Contingencies [Line Items] | |||||||||
Audit costs settled | 800,000 | ||||||||
DCAA Audits Contracts - Years 2013 to 2014 | Unfavorable Regulatory Action | LOGCAP IV | |||||||||
Loss Contingencies [Line Items] | |||||||||
Damages sought | 3,900,000 | ||||||||
Workers' Compensation And Employers' Liability Product Line | |||||||||
Loss Contingencies [Line Items] | |||||||||
Fixed amount of stop loss coverage on policies | 1,000,000 | 1,000,000 | |||||||
Health Insurance Product Line | |||||||||
Loss Contingencies [Line Items] | |||||||||
Fixed amount of stop loss coverage on policies | $ 400,000 | $ 400,000 |
Segment Information - Narrative
Segment Information - Narrative (Details) - segment | 1 Months Ended | 12 Months Ended |
Jan. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting [Abstract] | ||
Number of operating segments | 2 | 3 |
Number of reporting segments | 2 | 3 |
Segment Information - Summary o
Segment Information - Summary of the Financial Information of Reportable Segments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | ||
Summary of the financial information of the reportable segments reconciled | |||||
Revenue | $ 525,022 | $ 502,974 | $ 1,609,676 | $ 1,437,133 | |
Operating income (loss) | 43,507 | 25,196 | 124,349 | 74,249 | |
Depreciation and amortization | [1] | 6,913 | 9,320 | 20,635 | 27,245 |
Cost of services | 900 | 500 | 2,600 | 1,300 | |
Headquarters / Other | |||||
Summary of the financial information of the reportable segments reconciled | |||||
Revenue | [2] | (869) | (700) | 329 | (743) |
Operating income (loss) | [3] | (13,433) | (10,344) | (32,010) | (42,235) |
Depreciation and amortization | 6,009 | 8,537 | 17,878 | 25,512 | |
DynAviation | Operating Segments | |||||
Summary of the financial information of the reportable segments reconciled | |||||
Revenue | 250,998 | 307,864 | 865,684 | 886,085 | |
Operating income (loss) | 21,152 | 26,415 | 72,368 | 66,060 | |
Depreciation and amortization | 272 | 525 | 1,057 | 1,139 | |
DynLogistics | Operating Segments | |||||
Summary of the financial information of the reportable segments reconciled | |||||
Revenue | 274,893 | 195,810 | 743,663 | 551,791 | |
Operating income (loss) | 35,788 | 9,125 | 83,991 | 50,424 | |
Depreciation and amortization | $ 632 | $ 258 | $ 1,700 | $ 594 | |
[1] | Includes amounts included in Cost of services of $0.9 million and $2.6 million and for the three and nine months ended September 30, 2018, respectively, and $0.5 million and $1.3 million for the three and nine months ended September 30, 2017, respectively. | ||||
[2] | Headquarters revenue primarily represents revenue earned on shared services arrangements for general and administrative services provided to unconsolidated joint ventures and elimination of intercompany items between segments. | ||||
[3] | Headquarters operating expenses primarily relate to amortization of intangible assets and other costs that are not allocated to segments and are not billable to our U.S. government customers, partially offset by equity method investee income. |
Segment Information - Summary_2
Segment Information - Summary of the Assets of Reportable Segments (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
ASSETS | ||||
Assets | $ 716,210 | $ 734,377 | $ 735,717 | |
Headquarters / Other | ||||
ASSETS | ||||
Assets | [1] | 299,367 | 248,205 | |
DynAviation | Operating Segments | ||||
ASSETS | ||||
Assets | 177,630 | 244,231 | ||
DynLogistics | Operating Segments | ||||
ASSETS | ||||
Assets | $ 239,213 | $ 243,281 | ||
[1] | Assets primarily include cash, investments in unconsolidated subsidiaries, and intangible assets (excluding goodwill). |
Related Parties, Joint Ventur_3
Related Parties, Joint Ventures and Variable Interest Entities - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | |||||
Consulting fees | $ 100,000 | $ 1,100,000 | $ 200,000 | $ 3,600,000 | |
Maximum payments permitted under new senior credit facility | 6,000,000 | ||||
Receivables due from unconsolidated joint ventures | 100,000 | 100,000 | $ 100,000 | ||
Related cost of services | 200,000 | 600,000 | |||
(Loss) earnings from equity method investees | (60,000) | 53,000 | 209,000 | 105,000 | |
Revenue | 525,022,000 | 502,974,000 | 1,609,676,000 | 1,437,133,000 | |
Palm Trading Investment Corp | |||||
Variable Interest Entity [Line Items] | |||||
Promissory note | 9,200,000 | ||||
Outstanding balance of note receivable | 1,800,000 | 1,800,000 | $ 2,000,000 | ||
Trading Investment Corp | |||||
Variable Interest Entity [Line Items] | |||||
Investment in unconsolidated joint ventures | 2,100,000 | 2,100,000 | |||
GLS | |||||
Variable Interest Entity [Line Items] | |||||
Revenue | 13,400,000 | 10,400,000 | 39,300,000 | 26,300,000 | |
Net operating income (loss) | 900,000 | 300,000 | 2,900,000 | (2,100,000) | |
Equity Method Income | |||||
Variable Interest Entity [Line Items] | |||||
(Loss) earnings from equity method investees | $ (100,000) | $ 100,000 | $ 200,000 | $ 100,000 |
Related Parties, Joint Ventur_4
Related Parties, Joint Ventures and Variable Interest Entities - Selected Financial Information for DFIZ (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Jan. 01, 2018 | Dec. 31, 2017 | |
Variable Interest Entity [Line Items] | ||||||
Assets | $ 716,210 | $ 716,210 | $ 734,377 | $ 735,717 | ||
Liabilities | 839,311 | 839,311 | $ 925,644 | 925,644 | ||
Revenue | 525,022 | $ 502,974 | 1,609,676 | $ 1,437,133 | ||
DynCorp International FZ-LLC | ||||||
Variable Interest Entity [Line Items] | ||||||
Assets | 16,200 | 16,200 | 4,500 | |||
Liabilities | 13,100 | 13,100 | $ 900 | |||
Revenue | $ 43,500 | $ 43,400 | $ 128,800 | $ 127,900 |
Related Parties, Joint Ventur_5
Related Parties, Joint Ventures and Variable Interest Entities - Selected Financial Information for Equity Method Investees (Details) - Equity Method Investee - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |||||
Current assets | $ 17.6 | $ 17.6 | $ 28.2 | ||
Total assets | 17.6 | 17.6 | 28.2 | ||
Current liabilities | 6.1 | 6.1 | 11.6 | ||
Total liabilities | 6.1 | 6.1 | $ 11.6 | ||
Revenue | 13.4 | $ 10.7 | 42.7 | $ 27.3 | |
Gross profit (loss) | 0.9 | 0.4 | 3.6 | (2.5) | |
Net income (loss) | $ 0.7 | $ 0.4 | $ 3.5 | $ (2.3) |
Consolidating Financial State_3
Consolidating Financial Statements of Subsidiary Guarantors - Statement of Operations Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||||
Revenue | $ 525,022 | $ 502,974 | $ 1,609,676 | $ 1,437,133 |
Cost of services | (454,270) | (447,796) | (1,396,291) | (1,256,924) |
Selling, general and administrative expenses | (21,163) | (21,243) | (71,192) | (80,129) |
Depreciation and amortization expense | (6,022) | (8,792) | (18,053) | (25,936) |
(Loss) earnings from equity method investees | (60) | 53 | 209 | 105 |
Operating income | 43,507 | 25,196 | 124,349 | 74,249 |
Interest expense | (16,197) | (17,149) | (49,268) | (53,628) |
Loss on early extinguishment of debt | 0 | 0 | (239) | (24) |
Interest income | 863 | 15 | 1,796 | 39 |
Equity in income of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Other income (expense), net | 790 | (43) | 1,931 | 1,474 |
Income before income taxes | 28,963 | 8,019 | 78,569 | 22,110 |
Provision for income taxes | (2,040) | (3,338) | (9,924) | (11,677) |
Net income | 26,923 | 4,681 | 68,645 | 10,433 |
Noncontrolling interests | (278) | (295) | (783) | (858) |
Net income attributable to Delta Tucker Holdings, Inc. | 26,645 | 4,386 | 67,862 | 9,575 |
Reportable Legal Entities | Parent | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost of services | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 | 0 | 0 |
Depreciation and amortization expense | 0 | 0 | 0 | 0 |
(Loss) earnings from equity method investees | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Loss on early extinguishment of debt | 0 | 0 | ||
Interest income | 0 | 0 | 0 | 0 |
Equity in income of consolidated subsidiaries | 26,645 | 4,386 | 67,862 | 9,575 |
Other income (expense), net | 0 | 0 | 0 | 0 |
Income before income taxes | 26,645 | 4,386 | 67,862 | 9,575 |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income | 26,645 | 4,386 | 67,862 | 9,575 |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Delta Tucker Holdings, Inc. | 26,645 | 4,386 | 67,862 | 9,575 |
Reportable Legal Entities | Subsidiary Issuer | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Revenue | 0 | 0 | 0 | 0 |
Cost of services | 0 | 0 | 0 | 0 |
Selling, general and administrative expenses | 0 | 0 | 0 | 0 |
Depreciation and amortization expense | 0 | 0 | 0 | 0 |
(Loss) earnings from equity method investees | 0 | 0 | 0 | 0 |
Operating income | 0 | 0 | 0 | 0 |
Interest expense | (15,821) | (16,454) | (47,889) | (51,265) |
Loss on early extinguishment of debt | (239) | (24) | ||
Interest income | 0 | 0 | 0 | 0 |
Equity in income of consolidated subsidiaries | 36,929 | 15,081 | 99,146 | 42,914 |
Other income (expense), net | 0 | 0 | 0 | 0 |
Income before income taxes | 21,108 | (1,373) | 51,018 | (8,375) |
Provision for income taxes | 5,537 | 5,759 | 16,844 | 17,950 |
Net income | 26,645 | 4,386 | 67,862 | 9,575 |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Delta Tucker Holdings, Inc. | 26,645 | 4,386 | 67,862 | 9,575 |
Reportable Legal Entities | Subsidiary Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Revenue | 528,022 | 506,037 | 1,619,342 | 1,447,557 |
Cost of services | (457,789) | (451,480) | (1,407,418) | (1,269,058) |
Selling, general and administrative expenses | (21,108) | (21,150) | (70,946) | (79,848) |
Depreciation and amortization expense | (5,963) | (8,621) | (17,874) | (25,423) |
(Loss) earnings from equity method investees | (60) | 53 | 209 | 105 |
Operating income | 43,102 | 24,839 | 123,313 | 73,333 |
Interest expense | (376) | (695) | (1,379) | (2,363) |
Loss on early extinguishment of debt | 0 | 0 | ||
Interest income | 863 | 14 | 1,793 | 35 |
Equity in income of consolidated subsidiaries | 76 | 14 | 131 | 91 |
Other income (expense), net | 804 | (27) | 1,955 | 1,417 |
Income before income taxes | 44,469 | 24,145 | 125,813 | 72,513 |
Provision for income taxes | (7,540) | (9,063) | (26,667) | (29,599) |
Net income | 36,929 | 15,082 | 99,146 | 42,914 |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Delta Tucker Holdings, Inc. | 36,929 | 15,082 | 99,146 | 42,914 |
Reportable Legal Entities | Subsidiary Non- Guarantors | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Revenue | 47,099 | 48,103 | 140,892 | 144,725 |
Cost of services | (46,522) | (47,457) | (139,353) | (142,973) |
Selling, general and administrative expenses | (111) | (114) | (316) | (314) |
Depreciation and amortization expense | (61) | (174) | (187) | (522) |
(Loss) earnings from equity method investees | 0 | 0 | 0 | 0 |
Operating income | 405 | 358 | 1,036 | 916 |
Interest expense | 0 | 0 | 0 | 0 |
Loss on early extinguishment of debt | 0 | 0 | ||
Interest income | 0 | 1 | 3 | 4 |
Equity in income of consolidated subsidiaries | 0 | 0 | 0 | 0 |
Other income (expense), net | (14) | (16) | (24) | 57 |
Income before income taxes | 391 | 343 | 1,015 | 977 |
Provision for income taxes | (37) | (34) | (101) | (28) |
Net income | 354 | 309 | 914 | 949 |
Noncontrolling interests | (278) | (295) | (783) | (858) |
Net income attributable to Delta Tucker Holdings, Inc. | 76 | 14 | 131 | 91 |
Eliminations | ||||
Condensed Financial Statements, Captions [Line Items] | ||||
Revenue | (50,099) | (51,166) | (150,558) | (155,149) |
Cost of services | 50,041 | 51,141 | 150,480 | 155,107 |
Selling, general and administrative expenses | 56 | 21 | 70 | 33 |
Depreciation and amortization expense | 2 | 3 | 8 | 9 |
(Loss) earnings from equity method investees | 0 | 0 | 0 | 0 |
Operating income | 0 | (1) | 0 | 0 |
Interest expense | 0 | 0 | 0 | 0 |
Loss on early extinguishment of debt | 0 | 0 | ||
Interest income | 0 | 0 | 0 | 0 |
Equity in income of consolidated subsidiaries | (63,650) | (19,481) | (167,139) | (52,580) |
Other income (expense), net | 0 | 0 | 0 | 0 |
Income before income taxes | (63,650) | (19,482) | (167,139) | (52,580) |
Provision for income taxes | 0 | 0 | 0 | 0 |
Net income | (63,650) | (19,482) | (167,139) | (52,580) |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Net income attributable to Delta Tucker Holdings, Inc. | $ (63,650) | $ (19,482) | $ (167,139) | $ (52,580) |
Consolidating Financial State_4
Consolidating Financial Statements of Subsidiary Guarantors - Statement of Comprehensive Income Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Consolidating Statement of Comprehensive Income Information | ||||
Net income | $ 26,923 | $ 4,681 | $ 68,645 | $ 10,433 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (22) | 247 | (50) | 263 |
Other comprehensive (loss) income, before tax | (22) | 247 | (50) | 263 |
Income tax (expense) benefit related to items of other comprehensive income | 5 | (88) | 11 | (94) |
Other comprehensive (loss) income | (17) | 159 | (39) | 169 |
Comprehensive income | 26,906 | 4,840 | 68,606 | 10,602 |
Noncontrolling interests | (278) | (295) | (783) | (858) |
Comprehensive income attributable to Delta Tucker Holdings, Inc. | 26,628 | 4,545 | 67,823 | 9,744 |
Eliminations | ||||
Condensed Consolidating Statement of Comprehensive Income Information | ||||
Net income | (63,650) | (19,482) | (167,139) | (52,580) |
Other comprehensive income: | ||||
Foreign currency translation adjustment | 44 | (494) | 100 | (526) |
Other comprehensive (loss) income, before tax | 44 | (494) | 100 | (526) |
Income tax (expense) benefit related to items of other comprehensive income | (10) | 176 | (22) | 188 |
Other comprehensive (loss) income | 34 | (318) | 78 | (338) |
Comprehensive income | (63,616) | (19,800) | (167,061) | (52,918) |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Delta Tucker Holdings, Inc. | (63,616) | (19,800) | (167,061) | (52,918) |
Parent | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Comprehensive Income Information | ||||
Net income | 26,645 | 4,386 | 67,862 | 9,575 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (22) | 247 | (50) | 263 |
Other comprehensive (loss) income, before tax | (22) | 247 | (50) | 263 |
Income tax (expense) benefit related to items of other comprehensive income | 5 | (88) | 11 | (94) |
Other comprehensive (loss) income | (17) | 159 | (39) | 169 |
Comprehensive income | 26,628 | 4,545 | 67,823 | 9,744 |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Delta Tucker Holdings, Inc. | 26,628 | 4,545 | 67,823 | 9,744 |
Subsidiary Issuer | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Comprehensive Income Information | ||||
Net income | 26,645 | 4,386 | 67,862 | 9,575 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (22) | 247 | (50) | 263 |
Other comprehensive (loss) income, before tax | (22) | 247 | (50) | 263 |
Income tax (expense) benefit related to items of other comprehensive income | 5 | (88) | 11 | (94) |
Other comprehensive (loss) income | (17) | 159 | (39) | 169 |
Comprehensive income | 26,628 | 4,545 | 67,823 | 9,744 |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Delta Tucker Holdings, Inc. | 26,628 | 4,545 | 67,823 | 9,744 |
Subsidiary Guarantors | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Comprehensive Income Information | ||||
Net income | 36,929 | 15,082 | 99,146 | 42,914 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | 0 | 243 | 0 | 243 |
Other comprehensive (loss) income, before tax | 0 | 243 | 0 | 243 |
Income tax (expense) benefit related to items of other comprehensive income | 0 | (88) | 0 | (88) |
Other comprehensive (loss) income | 0 | 155 | 0 | 155 |
Comprehensive income | 36,929 | 15,237 | 99,146 | 43,069 |
Noncontrolling interests | 0 | 0 | 0 | 0 |
Comprehensive income attributable to Delta Tucker Holdings, Inc. | 36,929 | 15,237 | 99,146 | 43,069 |
Subsidiary Non- Guarantors | Reportable Legal Entities | ||||
Condensed Consolidating Statement of Comprehensive Income Information | ||||
Net income | 354 | 309 | 914 | 949 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | (22) | 4 | (50) | 20 |
Other comprehensive (loss) income, before tax | (22) | 4 | (50) | 20 |
Income tax (expense) benefit related to items of other comprehensive income | 5 | 0 | 11 | (6) |
Other comprehensive (loss) income | (17) | 4 | (39) | 14 |
Comprehensive income | 337 | 313 | 875 | 963 |
Noncontrolling interests | (278) | (295) | (783) | (858) |
Comprehensive income attributable to Delta Tucker Holdings, Inc. | $ 59 | $ 18 | $ 92 | $ 105 |
Consolidating Financial State_5
Consolidating Financial Statements of Subsidiary Guarantors - Balance Sheet Information (Details) - USD ($) $ in Thousands | Sep. 30, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | Dec. 31, 2016 |
Current assets: | |||||
Cash and cash equivalents | $ 239,145 | $ 168,250 | $ 168,250 | $ 110,657 | $ 118,218 |
Accounts receivable, net | 119,567 | 160,770 | 352,550 | ||
Contract assets | 163,876 | 190,440 | 0 | ||
Intercompany receivables | 0 | 0 | |||
Prepaid expenses and other current assets | 49,826 | 52,542 | 52,542 | ||
Total current assets | 572,414 | 572,002 | 573,342 | ||
Property and equipment, net | 22,985 | 23,568 | 23,568 | ||
Goodwill | 42,093 | 42,093 | 42,093 | ||
Tradenames, net | 28,536 | 28,536 | 28,536 | ||
Other intangibles, net | 38,074 | 55,302 | 55,302 | ||
Investment in subsidiaries | 0 | 0 | |||
Long-term deferred taxes | 874 | 369 | 369 | ||
Other assets, net | 11,234 | 12,507 | 12,507 | ||
Total assets | 716,210 | 734,377 | 735,717 | ||
Current liabilities: | |||||
Current portion of long-term debt, net | 0 | 53,652 | 53,652 | ||
Accounts payable | 100,078 | 109,396 | 109,396 | ||
Accrued payroll and employee costs | 79,739 | 105,391 | 105,391 | ||
Contract liabilities | 39,842 | 9,164 | 0 | ||
Intercompany payables | 0 | 0 | |||
Deferred income taxes | 0 | 0 | |||
Accrued liabilities | 56,416 | 89,520 | 98,684 | ||
Income taxes payable | 14,854 | 18,401 | 18,401 | ||
Total current liabilities | 290,929 | 385,524 | 385,524 | ||
Long-term debt, net | 536,945 | 527,039 | 527,039 | ||
Other long-term liabilities | 11,437 | 13,081 | 13,081 | ||
Noncontrolling interests | 5,449 | 5,529 | 5,529 | ||
(Deficit) Equity | (128,550) | (196,796) | (195,456) | ||
Total liabilities and deficit | 716,210 | $ 734,377 | 735,717 | ||
Eliminations | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Accounts receivable, net | (14,095) | (8,812) | |||
Contract assets | (81) | ||||
Intercompany receivables | (226,932) | (171,610) | |||
Prepaid expenses and other current assets | 0 | (252) | |||
Total current assets | (241,108) | (180,674) | |||
Property and equipment, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Tradenames, net | 0 | 0 | |||
Other intangibles, net | 0 | 0 | |||
Investment in subsidiaries | (685,111) | (633,881) | |||
Long-term deferred taxes | 0 | 0 | |||
Other assets, net | 0 | 0 | |||
Total assets | (926,219) | (814,555) | |||
Current liabilities: | |||||
Current portion of long-term debt, net | 0 | ||||
Accounts payable | (608) | (813) | |||
Accrued payroll and employee costs | (12,069) | 0 | |||
Contract liabilities | 0 | ||||
Intercompany payables | (226,932) | (171,610) | |||
Deferred income taxes | (27) | (29) | |||
Accrued liabilities | (83,197) | (158,306) | |||
Income taxes payable | (399) | (287) | |||
Total current liabilities | (323,232) | (331,045) | |||
Long-term debt, net | 0 | 0 | |||
Other long-term liabilities | 0 | 0 | |||
Noncontrolling interests | 0 | 0 | |||
(Deficit) Equity | (602,987) | (483,510) | |||
Total liabilities and deficit | (926,219) | (814,555) | |||
Parent | Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Accounts receivable, net | 0 | 0 | |||
Contract assets | 0 | ||||
Intercompany receivables | 0 | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | |||
Total current assets | 0 | 0 | |||
Property and equipment, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Tradenames, net | 0 | 0 | |||
Other intangibles, net | 0 | 0 | |||
Investment in subsidiaries | 0 | 0 | |||
Long-term deferred taxes | 0 | 0 | |||
Other assets, net | 0 | 0 | |||
Total assets | 0 | 0 | |||
Current liabilities: | |||||
Current portion of long-term debt, net | 0 | ||||
Accounts payable | 0 | 0 | |||
Accrued payroll and employee costs | 0 | 0 | |||
Contract liabilities | 0 | ||||
Intercompany payables | 46,426 | 45,085 | |||
Deferred income taxes | 0 | 0 | |||
Accrued liabilities | 82,124 | 150,371 | |||
Income taxes payable | 0 | 0 | |||
Total current liabilities | 128,550 | 195,456 | |||
Long-term debt, net | 0 | 0 | |||
Other long-term liabilities | 0 | 0 | |||
Noncontrolling interests | 0 | 0 | |||
(Deficit) Equity | (128,550) | (195,456) | |||
Total liabilities and deficit | 0 | 0 | |||
Subsidiary Issuer | Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | 0 | 0 | |||
Accounts receivable, net | 0 | 0 | |||
Contract assets | 0 | ||||
Intercompany receivables | 0 | 0 | |||
Prepaid expenses and other current assets | 0 | 0 | |||
Total current assets | 0 | 0 | |||
Property and equipment, net | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Tradenames, net | 0 | 0 | |||
Other intangibles, net | 0 | 0 | |||
Investment in subsidiaries | 630,411 | 579,191 | |||
Long-term deferred taxes | 0 | 0 | |||
Other assets, net | 0 | 0 | |||
Total assets | 630,411 | 579,191 | |||
Current liabilities: | |||||
Current portion of long-term debt, net | 53,652 | ||||
Accounts payable | 0 | 0 | |||
Accrued payroll and employee costs | 0 | 0 | |||
Contract liabilities | 0 | ||||
Intercompany payables | 162,550 | 117,385 | |||
Deferred income taxes | 0 | 0 | |||
Accrued liabilities | 13,040 | 31,486 | |||
Income taxes payable | 0 | 0 | |||
Total current liabilities | 175,590 | 202,523 | |||
Long-term debt, net | 536,945 | 527,039 | |||
Other long-term liabilities | 0 | 0 | |||
Noncontrolling interests | 0 | 0 | |||
(Deficit) Equity | (82,124) | (150,371) | |||
Total liabilities and deficit | 630,411 | 579,191 | |||
Subsidiary Guarantors | Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | 220,702 | 153,004 | |||
Accounts receivable, net | 133,662 | 361,362 | |||
Contract assets | 163,957 | ||||
Intercompany receivables | 208,976 | 162,470 | |||
Prepaid expenses and other current assets | 45,686 | 48,473 | |||
Total current assets | 772,983 | 725,309 | |||
Property and equipment, net | 22,603 | 22,980 | |||
Goodwill | 9,694 | 9,694 | |||
Tradenames, net | 28,536 | 28,536 | |||
Other intangibles, net | 38,074 | 55,302 | |||
Investment in subsidiaries | 54,700 | 54,690 | |||
Long-term deferred taxes | 874 | 369 | |||
Other assets, net | 10,838 | 8,941 | |||
Total assets | 938,302 | 905,821 | |||
Current liabilities: | |||||
Current portion of long-term debt, net | 0 | ||||
Accounts payable | 99,940 | 106,039 | |||
Accrued payroll and employee costs | 78,382 | 102,953 | |||
Contract liabilities | 39,842 | ||||
Intercompany payables | 17,956 | 9,140 | |||
Deferred income taxes | 0 | 0 | |||
Accrued liabilities | 39,632 | 71,200 | |||
Income taxes payable | 15,253 | 18,688 | |||
Total current liabilities | 291,005 | 308,020 | |||
Long-term debt, net | 0 | 0 | |||
Other long-term liabilities | 11,437 | 13,081 | |||
Noncontrolling interests | 5,449 | 5,529 | |||
(Deficit) Equity | 630,411 | 579,191 | |||
Total liabilities and deficit | 938,302 | 905,821 | |||
Subsidiary Non- Guarantors | Reportable Legal Entities | |||||
Current assets: | |||||
Cash and cash equivalents | 18,443 | 15,246 | |||
Accounts receivable, net | 0 | 0 | |||
Contract assets | 0 | ||||
Intercompany receivables | 17,956 | 9,140 | |||
Prepaid expenses and other current assets | 4,140 | 4,321 | |||
Total current assets | 40,539 | 28,707 | |||
Property and equipment, net | 382 | 588 | |||
Goodwill | 32,399 | 32,399 | |||
Tradenames, net | 0 | 0 | |||
Other intangibles, net | 0 | 0 | |||
Investment in subsidiaries | 0 | 0 | |||
Long-term deferred taxes | 0 | 0 | |||
Other assets, net | 396 | 3,566 | |||
Total assets | 73,716 | 65,260 | |||
Current liabilities: | |||||
Current portion of long-term debt, net | 0 | ||||
Accounts payable | 746 | 4,170 | |||
Accrued payroll and employee costs | 13,426 | 2,438 | |||
Contract liabilities | 0 | ||||
Intercompany payables | 0 | 0 | |||
Deferred income taxes | 27 | 29 | |||
Accrued liabilities | 4,817 | 3,933 | |||
Income taxes payable | 0 | 0 | |||
Total current liabilities | 19,016 | 10,570 | |||
Long-term debt, net | 0 | 0 | |||
Other long-term liabilities | 0 | 0 | |||
Noncontrolling interests | 0 | 0 | |||
(Deficit) Equity | 54,700 | 54,690 | |||
Total liabilities and deficit | $ 73,716 | $ 65,260 |
Consolidating Financial State_6
Consolidating Financial Statements of Subsidiary Guarantors - Statement of Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | $ 131,103 | $ 10,137 |
Cash flows from investing activities: | ||
Purchase of property and equipment | (8,377) | (3,931) |
Proceeds from sale of property and equipment | 13 | 537 |
Purchase of software | (274) | (646) |
Return of capital from equity method investees | 8,278 | 6,017 |
Contributions to equity method investees | (4,433) | (3,250) |
Contribution to subsidiary | 0 | |
Transfers to affiliates | 0 | 0 |
Net cash used in investing activities | (4,793) | (1,273) |
Cash flows from financing activities: | ||
Payments on senior secured credit facility | (54,943) | (25,114) |
Payment to bondholders of senior unsecured notes | 0 | (39,319) |
Equity contribution from Parent | 0 | |
Equity contribution from affiliates of Cerberus | 300 | 40,899 |
Payments of dividends to noncontrolling interests | (772) | (555) |
Net transfers (to) from Parent/subsidiary | 0 | 0 |
Net cash used in financing activities | (55,415) | (24,089) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 70,895 | (15,225) |
Cash, cash equivalents and restricted cash, beginning of period | 168,250 | 125,882 |
Cash, cash equivalents and restricted cash, end of period | 239,145 | 110,657 |
Reportable Legal Entities | Parent | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 0 | 0 |
Cash flows from investing activities: | ||
Purchase of property and equipment | 0 | 0 |
Proceeds from sale of property and equipment | 0 | 0 |
Purchase of software | 0 | 0 |
Return of capital from equity method investees | 0 | 0 |
Contributions to equity method investees | 0 | 0 |
Contribution to subsidiary | (40,599) | |
Transfers to affiliates | 0 | 0 |
Net cash used in investing activities | 0 | (40,599) |
Cash flows from financing activities: | ||
Payments on senior secured credit facility | 0 | 0 |
Payment to bondholders of senior unsecured notes | 0 | |
Equity contribution from Parent | 0 | |
Equity contribution from affiliates of Cerberus | 0 | 40,599 |
Payments of dividends to noncontrolling interests | 0 | 0 |
Net transfers (to) from Parent/subsidiary | 0 | 0 |
Net cash used in financing activities | 0 | 40,599 |
Net increase (decrease) in cash, cash equivalents and restricted cash | 0 | 0 |
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 |
Cash, cash equivalents and restricted cash, end of period | 0 | 0 |
Reportable Legal Entities | Subsidiary Issuer | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 8,138 | 22,568 |
Cash flows from investing activities: | ||
Purchase of property and equipment | 0 | 0 |
Proceeds from sale of property and equipment | 0 | 0 |
Purchase of software | 0 | 0 |
Return of capital from equity method investees | 0 | 0 |
Contributions to equity method investees | 0 | 0 |
Contribution to subsidiary | 0 | |
Transfers to affiliates | 0 | 0 |
Net cash used in investing activities | 0 | 0 |
Cash flows from financing activities: | ||
Payments on senior secured credit facility | (54,943) | (25,114) |
Payment to bondholders of senior unsecured notes | (39,319) | |
Equity contribution from Parent | 40,599 | |
Equity contribution from affiliates of Cerberus | 300 | 300 |
Payments of dividends to noncontrolling interests | 0 | 0 |
Net transfers (to) from Parent/subsidiary | 46,505 | (5,978) |
Net cash used in financing activities | (8,138) | (29,512) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 0 | (6,944) |
Cash, cash equivalents and restricted cash, beginning of period | 0 | 6,944 |
Cash, cash equivalents and restricted cash, end of period | 0 | 0 |
Reportable Legal Entities | Subsidiary Guarantors | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 110,180 | (12,013) |
Cash flows from investing activities: | ||
Purchase of property and equipment | (8,377) | (3,931) |
Proceeds from sale of property and equipment | 13 | 537 |
Purchase of software | (274) | (646) |
Return of capital from equity method investees | 8,278 | 6,017 |
Contributions to equity method investees | (4,433) | (3,250) |
Contribution to subsidiary | 0 | |
Transfers to affiliates | (46,505) | 5,978 |
Net cash used in investing activities | (51,298) | 4,705 |
Cash flows from financing activities: | ||
Payments on senior secured credit facility | 0 | 0 |
Payment to bondholders of senior unsecured notes | 0 | |
Equity contribution from Parent | 0 | |
Equity contribution from affiliates of Cerberus | 0 | 0 |
Payments of dividends to noncontrolling interests | 0 | 0 |
Net transfers (to) from Parent/subsidiary | 8,816 | (4,525) |
Net cash used in financing activities | 8,816 | (4,525) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 67,698 | (11,833) |
Cash, cash equivalents and restricted cash, beginning of period | 153,004 | 107,136 |
Cash, cash equivalents and restricted cash, end of period | 220,702 | 95,303 |
Reportable Legal Entities | Subsidiary Non- Guarantors | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | 13,557 | 136 |
Cash flows from investing activities: | ||
Purchase of property and equipment | 0 | 0 |
Proceeds from sale of property and equipment | 0 | 0 |
Purchase of software | 0 | 0 |
Return of capital from equity method investees | 0 | 0 |
Contributions to equity method investees | 0 | 0 |
Contribution to subsidiary | 0 | |
Transfers to affiliates | (8,816) | 4,525 |
Net cash used in investing activities | (8,816) | 4,525 |
Cash flows from financing activities: | ||
Payments on senior secured credit facility | 0 | 0 |
Payment to bondholders of senior unsecured notes | 0 | |
Equity contribution from Parent | 0 | |
Equity contribution from affiliates of Cerberus | 0 | 0 |
Payments of dividends to noncontrolling interests | (1,544) | (1,109) |
Net transfers (to) from Parent/subsidiary | 0 | 0 |
Net cash used in financing activities | (1,544) | (1,109) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 3,197 | 3,552 |
Cash, cash equivalents and restricted cash, beginning of period | 15,246 | 11,802 |
Cash, cash equivalents and restricted cash, end of period | 18,443 | 15,354 |
Eliminations | ||
Condensed Financial Statements, Captions [Line Items] | ||
Net cash provided by operating activities | (772) | (554) |
Cash flows from investing activities: | ||
Purchase of property and equipment | 0 | 0 |
Proceeds from sale of property and equipment | 0 | 0 |
Purchase of software | 0 | 0 |
Return of capital from equity method investees | 0 | 0 |
Contributions to equity method investees | 0 | 0 |
Contribution to subsidiary | 40,599 | |
Transfers to affiliates | 55,321 | (10,503) |
Net cash used in investing activities | 55,321 | 30,096 |
Cash flows from financing activities: | ||
Payments on senior secured credit facility | 0 | 0 |
Payment to bondholders of senior unsecured notes | 0 | |
Equity contribution from Parent | (40,599) | |
Equity contribution from affiliates of Cerberus | 0 | 0 |
Payments of dividends to noncontrolling interests | 772 | 554 |
Net transfers (to) from Parent/subsidiary | (55,321) | 10,503 |
Net cash used in financing activities | (54,549) | (29,542) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 0 | 0 |
Cash, cash equivalents and restricted cash, beginning of period | 0 | 0 |
Cash, cash equivalents and restricted cash, end of period | $ 0 | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Thousands | Oct. 19, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Line of Credit Facility [Line Items] | |||
Voluntary principal payment | $ 54,943 | $ 25,114 | |
Revolving Credit Facility | Term Loan | Subsequent Event | |||
Line of Credit Facility [Line Items] | |||
Voluntary principal payment | $ 50,000 |