10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2017

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to          

Commission File Number 001-31400

CACI International Inc

(Exact name of registrant as specified in its charter)

Delaware	54-1345888
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

1100 North Glebe Road, Arlington, VA 22201

(Address of principal executive offices)

(703) 841-7800

(Registrant’s telephone number, including area code)

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒    No  ☐.

Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).  Yes  ☒    No  ☐.

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company,” and “emerging growth company”in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  ☐    No  ☒.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐.

Indicate the number of shares outstanding of each of the Registrant’s classes of Common Stock, as of January 24, 2018: CACI International Inc Common Stock, $0.10 par value, 24,627,905 shares.

CACI INTERNATIONAL INC

		PAGE
PART I:	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Statements of Operations (Unaudited) for the Three Months Ended December 31, 2017 and 2016	3
	Consolidated Statements of Operations (Unaudited) for the Six Months Ended December 31, 2017 and 2016	4
	Consolidated Statements of Comprehensive Income (Unaudited) for the Three and Six Months Ended December 31, 2017 and 2016	5
	Consolidated Balance Sheets (Unaudited) as of December 31, 2017 and June 30, 2017	6
	Consolidated Statements of Cash Flows (Unaudited) for the Six Months Ended December 31, 2017 and 2016	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26
Item 4.	Controls and Procedures	26
PART II:	OTHER INFORMATION
Item 1.	Legal Proceedings	27
Item 1A.	Risk Factors	27
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27
Item 3.	Defaults Upon Senior Securities	27
Item 4.	Mine Safety Disclosures	28
Item 5.	Other Information	28
Item 6.	Exhibits	28
	Signatures	29

2

PART I

FINANCIAL INFORMATION

Item 1.  Financial Statements

CACI INTERNATIONAL INC

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(amounts in thousands, except per share data)

	Three Months Ended
	December 31,
	2017			2016
Revenue	$	1,087,860		$	1,057,530
Costs of revenue:
Direct costs		727,160			705,321
Indirect costs and selling expenses		254,180			253,822
Depreciation and amortization		18,258			18,132
Total costs of revenue		999,598			977,275
Income from operations		88,262			80,255
Interest expense and other, net		10,956			12,325
Income before income taxes		77,306			67,930
Income tax expense (benefit)		(65,489	)		25,510
Net income	$	142,795		$	42,420
Basic earnings per share	$	5.80		$	1.74
Diluted earnings per share	$	5.66		$	1.69
Weighted-average basic shares outstanding		24,622			24,387
Weighted-average diluted shares outstanding		25,211			25,069

See Notes to Unaudited Consolidated Financial Statements

3

CACI INTERNATIONAL INC

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(amounts in thousands)

	Six Months Ended
	December 31,
	2017			2016
Revenue	$	2,173,674		$	2,130,810
Costs of revenue:
Direct costs		1,466,838			1,433,542
Indirect costs and selling expenses		515,424			511,160
Depreciation and amortization		35,846			36,195
Total costs of revenue		2,018,108			1,980,897
Income from operations		155,566			149,913
Interest expense and other, net		22,203			24,814
Income before income taxes		133,363			125,099
Income tax expense (benefit)		(51,478	)		46,016
Net income	$	184,841		$	79,083
Basic earnings per share	$	7.53		$	3.25
Diluted earnings per share	$	7.33		$	3.16
Weighted-average basic shares outstanding		24,555			24,363
Weighted-average diluted shares outstanding		25,228			24,998

See Notes to Unaudited Consolidated Financial Statements

4

CACI INTERNATIONAL INC

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

(amounts in thousands)

	Three Months Ended					Six Months Ended
	December 31,					December 31,
	2017		2016			2017		2016
Net income	$	142,795	$	42,420		$	184,841	$	79,083
Other comprehensive income:
Foreign currency translation adjustment		1,191		(6,424	)		5,554		(10,126	)
Change in fair value of interest rate swap agreements,    net of tax		2,613		10,045			3,121		12,899
Other comprehensive income, net of tax		3,804		3,621			8,675		2,773
Comprehensive income	$	146,599	$	46,041		$	193,516	$	81,856

See Notes to Unaudited Consolidated Financial Statements

5

CACI INTERNATIONAL INC

CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(amounts in thousands, except per share data)

	December 31,			June 30,
	2017			2017
ASSETS
Current assets:
Cash and cash equivalents	$	56,328		$	65,539
Accounts receivable, net		758,141			757,341
Prepaid expenses and other current assets		73,697			57,022
Total current assets		888,166			879,902
Goodwill		2,614,294			2,577,435
Intangible assets, net		244,072			235,371
Property and equipment, net		101,470			91,749
Supplemental retirement savings plan assets		91,755			91,367
Accounts receivable, long-term		8,177			7,886
Other long-term assets		36,199			27,372
Total assets	$	3,984,133		$	3,911,082
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	80,947		$	53,965
Accounts payable		91,056			62,874
Accrued compensation and benefits		234,999			239,741
Other accrued expenses and current liabilities		166,359			170,164
Total current liabilities		573,361			526,744
Long-term debt, net of current portion		1,070,846			1,177,598
Supplemental retirement savings plan obligations, net of current portion		87,593			81,823
Deferred income taxes		192,688			273,320
Other long-term liabilities		72,825			57,876
Total liabilities		1,997,313			2,117,361
COMMITMENTS AND CONTINGENCIES
Shareholders’ equity:
Preferred stock $0.10 par value, 10,000 shares authorized, no shares issued or    outstanding		—			—
Common stock $0.10 par value, 80,000 shares authorized; 42,059 shares    issued and 24,625 outstanding at December 31, 2017 and 41,896 shares    issued and 24,462 outstanding at June 30, 2017		4,206			4,190
Additional paid-in capital		568,646			569,080
Retained earnings		2,010,460			1,825,619
Accumulated other comprehensive loss		(20,441	)		(29,116	)
Treasury stock, at cost (17,434 and 17,435 shares, respectively)		(576,186	)		(576,187	)
Total CACI shareholders’ equity		1,986,685			1,793,586
Noncontrolling interest		135			135
Total shareholders’ equity		1,986,820			1,793,721
Total liabilities and shareholders’ equity	$	3,984,133		$	3,911,082

See Notes to Unaudited Consolidated Financial Statements

6

CACI INTERNATIONAL INC

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(amounts in thousands)

	Six Months Ended
	December 31,
	2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	184,841		$	79,083
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization		35,846			36,195
Amortization of deferred financing costs		2,212			2,252
Loss on disposal of fixed assets		—			975
Stock-based compensation expense		12,389			10,557
Deferred income taxes		(83,212	)		5,081
Equity in earnings of unconsolidated ventures		—			(103	)
Changesin operating assets and liabilities, net of effect of business acquisitions:
Accounts receivable, net		7,367			71,080
Prepaid expenses and other assets		(10,107	)		1,649
Accounts payable and other accrued expenses		15,190			(58,873	)
Accrued compensation and benefits		(11,126	)		(15,339	)
Income taxes payable and receivable		(3,796	)		(391	)
Supplemental retirement savings plan obligations and other long-term liabilities		6,157			3,184
Net cash provided by operating activities		155,761			135,350
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		(22,013	)		(21,826	)
Cash paid for business acquisitions, net of cash acquired		(45,565	)		(5,605	)
Proceeds from net working capital refund of acquired business		—			13,619
Proceeds from equity method investments		—			4,681
Other		(183	)		1,051
Net cash (used in) investing activities		(67,761	)		(8,080	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings under bank credit facilities		256,500			240,500
Principal payments made under bank credit facilities		(338,483	)		(338,991	)
Payment of contingent consideration		(3,630	)		—
Proceeds from employee stock purchase plans		2,459			2,262
Repurchases of common stock		(2,463	)		(2,243	)
Payment of taxes for equity transactions		(12,656	)		(3,632	)
Net cash used in financing activities		(98,273	)		(102,104	)
Effect of exchange rate changes on cash and cash equivalents		1,062			(1,598	)
Net (decrease) increase in cash and cash equivalents		(9,211	)		23,568
Cash and cash equivalents, beginning of period		65,539			49,082
Cash and cash equivalents, end of period	$	56,328		$	72,650
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for income taxes, net of refunds	$	35,264		$	41,273
Cash paid during the period for interest	$	20,505		$	22,512
Non-cash financing and investing activities:
Accrued capital expenditures	$	3,316		$	1,482

See Notes to Unaudited Consolidated Financial Statements

7

CACI INTERNATIONAL INC

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of CACI International Inc and subsidiaries (CACI or the Company) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and include the assets, liabilities, results of operations, comprehensive income and cash flows for the Company, including its subsidiaries and ventures that are majority-owned or otherwise controlled by the Company.  Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated in consolidation.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and amounts included in other current assets and current liabilities that meet the definition of a financial instrument approximate fair value because of the short-term nature of these amounts.  The fair value of the Company’s debt outstanding as of December 31, 2017 under its bank credit facility approximates its carrying value.  The fair value of the Company’s debt under its bank credit facility was estimated using Level 2 inputs based on market data of companies with a corporate rating similar to CACI’s that have recently priced credit facilities.  See Notes 6 and 12.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments and reclassifications (all of which are of a normal, recurring nature) that are necessary for the fair presentation of the periods presented.  It is suggested that these unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest annual report to the SEC on Form 10-K for the year ended June 30, 2017.  The results of operations for the three and six months ended December 31, 2017 are not necessarily indicative of the results to be expected for any subsequent interim period or for the full fiscal year.

2. Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-01, Clarifying the Definition of a Business, which revises the definition of a business and provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for the fiscal year, and interim periods within that fiscal year, beginning after December 15, 2017. The Company believes that the evaluation of whether transactions should be accounted for as acquisitions (or dispositions) of assets or businesses will be simplified under the new standard.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which amends the existing guidance on accounting for leases.  The new standard requires lessees to put virtually all leases on the balance sheet by recognizing lease assets and lease liabilities. Lessor accounting is largely unchanged from that applied under previous guidance. The amended guidance is effective for the fiscal year, and interim periods within that fiscal year, beginning after December 15, 2018, and requires a modified retrospective approach.  Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended (ASC 606), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. On July 9, 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09 to annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017, using either a full retrospective approach or a modified approach.

The Company plans to adopt the standard on July 1, 2018 and apply it on a modified retrospective basis, whereby the cumulative effect of applying the standard will be recognized through shareholders’ equity on the date of adoption.  We are in the process of identifying the changes to accounting policies, business processes, systems, disclosures, and controls to support the adoption of the new standard.

8

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

We expect the standard will impact the pattern of revenue recognition for some of our contracts with customers.  For our award and incentive fee contracts, we will recognize a constrained amount of variable consideration over time as the performance obligation is satisfied rather than defer recognition of the relevant portion of fee until customer notification of the amount earned.  Some of our fixed price contracts in which revenue is recognized on a straight-line basis over the performance period will be converted to recognition of revenue over time by measuring the progress toward complete satisfaction of the performance obligation using input methods, including cost and labor hours.  We do not anticipate a material impact to our cost-plus-fixed fee, fixed price/level-of-effort, time-and-materials, or fixed price contracts that currently use percentage-of-completion accounting.  

The cumulative catch-up adjustment that will be recorded through shareholders’ equity on July 1, 2018 is still being quantified.  We will continue evaluating the impact of the standard on our contract portfolio through the date of adoption.

3. Acquisitions

Domestic Acquisition

On November 22, 2017, CACI acquired 100 percent of the outstanding membership interests of a business in the United States.  The acquisition was financed with cash on hand.  The purchase consideration is approximately $53.0 million, which includes a $40.1 million initial cash payment, $4.5 million of deferred consideration, $8.7 million estimated fair value of contingent consideration to be paid upon achieving certain metrics and a $0.3 million estimated refund due from the seller for a net working capital adjustment.  The Company recognized fair values of the assets acquired and liabilities assumed and preliminarily allocated $26.7 million to goodwill and $24.9 million to intangible assets. The intangible assets primarily consist of customer relationships and acquired technology.  The final purchase price is subject to customary adjustments for final working capital. The final purchase price allocation is provisional and is expected to be completed in the second quarter of FY2019, will be based on final appraisals and other analysis of fair values of acquired assets and liabilities. The Company does not expect that differences between the preliminary and final purchase price allocation will have a material impact on its results of operations or financial position.

International Acquisitions

On October 1, 2017, CACI Limited acquired 100 percent of the outstanding shares of a United Kingdom (U.K.) IT consulting services and software engineering company. The purchase consideration is approximately $9.1 million, which includes initial cash payments, deferred consideration and an estimated net working capital payment.

On November 1, 2017, CACI Limited acquired 100 percent of the outstanding shares of a London-based software and mapping data company. The company provides geographical information systems, logistics and route optimization software and related map data. The purchase consideration is approximately $7.5 million, which includes initial cash payments, deferred consideration and an estimated net working capital payment.

9

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

4. Intangible Assets

Intangible assets consisted of the following (in thousands):

	December 31,			June 30,
	2017 (1)			2017
Intangible assets
Customer contracts and related customer relationships	$	431,973		$	635,895
Acquired technologies		13,888			28,503
Covenants not to compete		—			3,305
Other		804			1,545
Intangible assets		446,665			669,248
Less accumulated amortization
Customer contracts and related customer relationships		(194,166	)		(402,934	)
Acquired technologies		(8,025	)		(26,542	)
Covenants not to compete		—			(3,288	)
Other		(402	)		(1,113	)
Less accumulated amortization		(202,593	)		(433,877	)
Total intangible assets, net	$	244,072		$	235,371

__________________

⁽¹⁾ During the six months ended December 31, 2017, the Company wrote off $250.7 million in fully amortized intangible assets.

Intangible assets are primarily amortized on an accelerated basis over periods ranging from one to twenty years.  The weighted-average period of amortization for all customer contracts and related customer relationships as of December 31, 2017 is 14.7 years, and the weighted-average remaining period of amortization is 11.7 years.  The weighted-average period of amortization for acquired technologies as of December 31, 2017 is 7.4 years, and the weighted-average remaining period of amortization is 6.4 years.

Expected amortization expense for the remainder of the fiscal year ending June 30, 2018, and for each of the fiscal years thereafter, is as follows (in thousands):

Fiscal year ending June 30,	Amount
2018 (six months)	$	18,854
2019		34,257
2020		29,651
2021		26,190
2022		22,613
Thereafter		112,507
Total intangible assets, net	$	244,072

5. Goodwill

The changes in the carrying amount of goodwill for the year ended June 30, 2017 and the six months ended December 31, 2017 are as follows (in thousands):

	Domestic			International			Total
Balance at June 30, 2016	$	2,487,148		$	98,195		$	2,585,343
Business acquisitions		(7,652	)		2,220			(5,432	)
Foreign currency translation		—			(2,476	)		(2,476	)
Balance at June 30, 2017		2,479,496			97,939			2,577,435
Business acquisitions		26,662			6,379			33,041
Foreign currency translation		—			3,818			3,818
Balance at December 31, 2017	$	2,506,158		$	108,136		$	2,614,294

10

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

6. Long-term Debt

Long-term debt consisted of the following (in thousands):

	December 31,			June 30,
	2017			2017
Bank credit facility – term loans	$	951,885		$	978,867
Bank credit facility – revolver loans		210,000			265,000
Principal amount of long-term debt		1,161,885			1,243,867
Less unamortized debt issuance costs		(10,092	)		(12,304	)
Total long-term debt		1,151,793			1,231,563
Less current portion		(80,947	)		(53,965	)
Long-term debt, net of current portion	$	1,070,846		$	1,177,598

Bank Credit Facility

The Company has a $1,981.3 million credit facility (the Credit Facility), which consists of an $850.0 million revolving credit facility (the Revolving Facility) and a $1,131.3 million term loan (the Term Loan). The Revolving Facility has subfacilities of $100.0 million for same-day swing line loan borrowings and $25.0 million for stand-by letters of credit.  At any time and so long as no default has occurred, the Company has the right to increase the Revolving Facility or the Term Loan in an aggregate principal amount of up to the greater of $400.0 million or an amount subject to 2.75 times senior secured leverage, calculated assuming the Revolving Facility is fully drawn, with applicable lender approvals.  The Credit Facility is available to refinance existing indebtedness and for general corporate purposes, including working capital expenses and capital expenditures.

The Revolving Facility is a secured facility that permits continuously renewable borrowings of up to $850.0 million. As of December 31, 2017, the Company had $210.0 million outstanding under the Revolving Facility, no borrowings on the swing line and an outstanding letter of credit of $0.4 million.  The Company pays a quarterly facility fee for the unused portion of the Revolving Facility.

The Term Loan is a five-year secured facility under which principal payments are due in quarterly installments of $13.5 million through June 30, 2018 and $27.0 million thereafter until the balance is due in full on June 1, 2020. As of December 31, 2017, the Company had $951.9 million outstanding under the Term Loan.

The interest rates applicable to loans under the Credit Facility are floating interest rates that, at the Company’s option, equal a base rate or a Eurodollar rate plus, in each case, an applicable rate based upon the Company’s consolidated total leverage ratio.  As of December 31, 2017, the effective interest rate, including the impact of the Company’s floating-to-fixed interest rate swap agreements and excluding the effect of amortization of debt financing costs, for the outstanding borrowings under the Credit Facility was 3.36 percent.

The Credit Facility requires the Company to comply with certain financial covenants, including a maximum senior secured leverage ratio, a maximum total leverage ratio and a minimum fixed charge coverage ratio.  The Credit Facility also includes customary negative covenants restricting or limiting the Company’s ability to guarantee or incur additional indebtedness, grant liens or other security interests to third parties, make loans or investments, transfer assets, declare dividends or redeem or repurchase capital stock or make other distributions, prepay subordinated indebtedness and engage in mergers, acquisitions or other business combinations, in each case except as expressly permitted under the Credit Facility.  As of December 31, 2017, the Company was in compliance with all of the financial covenants.  A majority of the Company’s assets serve as collateral under the Credit Facility.

All debt issuance costs are being amortized from the date incurred to the expiration date of the Credit Facility. 

11

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

Cash Flow Hedges

The Company periodically uses derivative financial instruments as part of a strategy to manage exposure to market risks associated with interest rate fluctuations.  The Company has entered into several floating-to-fixed interest rate swap agreements for an aggregate notional amount of $800.0 million which hedge a portion of the Company’s floating rate indebtedness.  The swaps mature at various dates through 2022.  The Company has designated the swaps as cash flow hedges. Unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Unrealized gains and losses on these swaps are designated as effective or ineffective. Realized gains and losses in connection with each required interest payment are reclassified from accumulated other comprehensive income or loss to interest expense.  The Company does not hold or issue derivative financial instruments for trading purposes.

The effect of derivative instruments in the consolidated statements of operations and accumulated other comprehensive loss for the three and six months ended December 31, 2017 and 2016 is as follows (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Gain (loss) recognized in other comprehensive income	$	1,867	$	7,920	$	1,521	$	8,525
Amounts reclassified to earnings from accumulated other    comprehensive loss		746		2,125		1,600		4,374
Net current period other comprehensive income	$	2,613	$	10,045	$	3,121	$	12,899

The aggregate maturities of long-term debt at December 31, 2017 are as follows (in thousands):

Twelve months ending December 31,
2018	$	80,947
2019		107,930
2020		973,008
Principal amount of long-term debt		1,161,885
Less unamortized debt issuance costs		(10,092	)
Total long-term debt	$	1,151,793

7. Commitments and Contingencies

The Company is involved in various lawsuits, claims, and administrative proceedings arising in the normal course of business. Management is of the opinion that any liability or loss associated with such matters, either individually or in the aggregate, will not have a material adverse effect on the Company’s operations and liquidity.

Government Contracting

Payments to the Company on cost-plus-fee and time-and-materials contracts are subject to adjustment upon audit by the Defense Contract Audit Agency (DCAA) and other government agencies that do not utilize DCAA’s services.  The DCAA is nearing completion of audits of the Company’s incurred cost submissions for its fiscal years 2012 and 2013, and continues its audits of incurred cost submission for fiscal years 2011 through 2013 associated with CACI’s acquisition of National Security Solutions (NSS), a L-3 subsidiary.  In its efforts to bring its audits more current, DCAA has commenced audits of our incurred cost submission through our fiscal year 2016.  We are still negotiating the results of prior years’ audits with the respective cognizant contracting officers and believe our reserves for such are adequate. In the opinion of management, adjustments that may result from these audits and the audits not yet started are not expected to have a material effect on the Company’s financial position, results of operations, or cash flows as the Company has accrued its best estimate of potential disallowances. Additionally, the DCAA continually reviews the cost accounting and other practices of government contractors, including the Company. In the course of those reviews, cost accounting and other issues are identified, discussed and settled.

On March 26, 2012, the Company received a subpoena from the Defense Criminal Investigative Service seeking documents related to one of the Company’s contracts for the period of January 1, 2007 through March 26, 2012.  The Company has provided documents responsive to the subpoena and is cooperating fully with the government’s investigation.  The Company has accrued its current best estimate of the likely outcome within its estimated range of zero to $3.9 million.

12

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

8. Stock-Based Compensation

Stock-based compensation expense recognized, together with the income tax benefits recognized, is as follows (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Stock-based compensation related to RSUs included in    indirect costs and selling expense	$	6,038	$	5,660	$	12,389	$	10,557

Under the terms of the 2016 Amended and Restated Incentive Compensation Plan (the 2016 Plan), the Company may issue, among others, non-qualified stock options, restricted stock, RSUs, SSARs, and performance awards, collectively referred to herein as equity instruments. The 2016 Plan was approved by the Company’s stockholders in November 2016 and amended and restated the 2006 Stock Incentive Plan (the 2006 Plan) which was due to expire at the end of the ten-year period. Previous grants that were made under the 2006 Plan, and equity instruments granted prior to approval of the 2016 Plan continue to be governed by the terms of the 2006 Plan. During the periods presented all equity instrument grants were made in the form of RSUs.  Other than performance-based RSUs (PRSUs) which contain a market-based element, the fair value of RSU grants was determined based on the closing price of a share of the Company’s common stock on the date of grant. The fair value of RSUs with market-based vesting features was also measured on the grant date, but was done so using a binomial lattice model.

Annual grants under the 2016 Plan, and previously the 2006 Plan, are generally made to the Company’s key employees during the first quarter of the Company’s fiscal year and to members of the Company’s Board of Directors during the second quarter of the Company’s fiscal year. With the approval of its Chief Executive Officer, the Company also issues equity instruments to strategic new hires and to employees who have demonstrated superior performance.

In September 2014, the Company made its annual grant to key employees consisting of 180,570 PRSUs.  The final number of such PRSUs that are earned by participants and vest is based on the achievement of a specified earnings per share (EPS) for the year ended June 30, 2015 and on the average share price of Company stock for the 90 day period ending September 23, 2015, 2016 and 2017 as compared to the average share price for the 90 day period ended September 23, 2014.  The specified EPS for the year ended June 30, 2015 was met and the average share price of the Company’s stock for the 90 day periods ending September 23, 2015, 2016 and 2017 exceeded the average share price of the Company’s stock for the 90 day period ended September 23, 2014, resulting in an additional 63,642 RSUs earned by participants. 

In September 2015, the Company made its annual grant to key employees consisting of 208,160 PRSUs.  The final number of such PRSUs that are earned by participants and vest is based on the achievement of a specified EPS for the year ending June 30, 2016 and on the average share price of Company stock for the 90 day periods ending September 18, 2016, 2017 and 2018 as compared to the average share price for the 90 day period ended September 18, 2015.  The specified EPS for the year ended June 30, 2016 was met and the average share price of the Company’s stock for the 90 day period ending September 18, 2016 and 2017 exceeded the average share price of the Company’s stock for the 90 day period ended September 18, 2015, resulting in an additional 48,068 RSUs earned by participants.  

In September 2016, the Company made its annual grant to key employees consisting of 193,420 PRSUs.  The final number of such PRSUs that are earned by participants and vest is based on the achievement of a specified EPS for the year ended June 30, 2017 and on the average share price of Company stock for the 90 day period ending September 30, 2017, 2018 and 2019 as compared to the average share price for the 90 day period ended September 30, 2016.  The specified EPS for the year ended June 30, 2017 was met and the average share price of the Company’s stock for the 90 day period ending September 30, 2017 exceeded the average share price of the Company’s stock for the 90 day period ended September 30, 2016, resulting in an additional 21,824 RSUs earned by participants.

In September 2017, the Company made its annual grant to key employees consisting of 146,550 PRSUs.  The final number of such PRSUs that are earned by participants and vest is based on the achievement of a specified EPS for the year ended June 30, 2018 and on the average share price of Company stock for the 90 day period ending September 15, 2018, 2019 and 2020 as compared to the average share price for the 90 day period ended September 15, 2017.  If the specified EPS for the year ended June 30, 2018 is met and if the average share price of the Company’s stock for the 90 day period ending September 15, 2018, 2019 and 2020 exceeds the average share price of the Company’s stock for the 90 day period ended September 15, 2017 by 100 percent or more, then an additional 146,550 could be earned by participants.  This is the maximum number of additional RSUs that can be earned related to the September 2017 annual grant.  In addition to the performance and market conditions, there is a service vesting condition which stipulates that 50 percent of the earned award will vest on October 1, 2020 and 50 percent of the earned award will vest on October 1, 2021, in both cases dependent upon continuing service by the grantee as an employee of the Company, unless the grantee is eligible for earlier vesting upon retirement or certain other events.

13

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

As of December 31, 2017, the total number of shares authorized by shareholders for grants under the 2016 Plan and its predecessor plan is 1,200,000 plus any forfeitures from the 2006 Plan. The aggregate number of grants that may be made may exceed this approved amount as forfeited RSUs become available for future grants. As of December 31, 2017, cumulative grants of 311,387 equity instruments underlying the shares authorized have been awarded, and 79,330 of these instruments have been forfeited.

Activity related to RSUs during the six months ended December 31, 2017 is as follows:

	RSUs
Unvested at June 30, 2017		834,607
Granted		269,631
Vested		(256,589	)
Forfeited		(27,161	)
Unvested at December 31, 2017		820,488
Weighted-average grant date fair value for RSUs	$	145.94

As of December 31, 2017, there was $49.1 million of total unrecognized compensation costs related to RSUs scheduled to be recognized over a weighted-average period of 3.0 years.

9. Earnings Per Share

ASC 260, Earnings Per Share (ASC 260), requires dual presentation of basic and diluted earnings per share on the face of the income statement. Basic earnings per share excludes dilution and is computed by dividing income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock but not securities that are anti-dilutive. Using the treasury stock method, diluted earnings per share include the incremental effect of RSUs that are no longer subject to a market or performance condition.  The PRSUs granted in September 2017 are excluded from the calculation of diluted earnings per share as the underlying shares are considered to be contingently issuable shares. These shares will be included in the calculation of diluted earnings per share beginning in the first reporting period in which the performance metric is achieved. The chart below shows the calculation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Net income	$	142,795	$	42,420	$	184,841	$	79,083
Weighted-average number of basic shares outstanding    during the period		24,622		24,387		24,555		24,363
Dilutive effect of RSUs after application of treasury    stock method		589		682		673		635
Weighted-average number of diluted shares outstanding    during the period		25,211		25,069		25,228		24,998
Basic earnings per share	$	5.80	$	1.74	$	7.53	$	3.25
Diluted earnings per share	$	5.66	$	1.69	$	7.33	$	3.16

10. Income Taxes

The Company is subject to income taxes in the U.S. and various state and foreign jurisdictions. Tax statutes and regulations within each jurisdiction are subject to interpretation and require the application of significant judgment.  The Company is currently under examination by two state jurisdictions for the years 2010 through 2017 and one foreign jurisdiction for the years 2011 through 2015.  The Company does not expect resolution of these examinations to have a material impact on its results of operations, financial condition or cash flows.

14

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The Company’s total liability for unrecognized tax benefits as of December 31, 2017 and June 30, 2017 was $1.9 million and $1.7 million, respectively. The $1.9 million unrecognized tax benefit at December 31, 2017, if recognized, would impact the Company’s effective tax rate.

The effective income tax rate for the three months ended December 31, 2017 decreased to (84.7) percent from 37.6 percent for the same period last year. The effective tax rate decreased primarily due to certain impacts of the Tax Cuts and Jobs Act (TCJA) discussed below.  The effective tax rate was also favorably affected by a benefit from the research and development tax credit and gains from the change in value of assets invested in corporate owned life insurance (COLI) policies.

The effective income tax rate for the six months ended December 31, 2017 decreased to (38.6) percent from 36.8 percent for the same period last year.  The effective tax rate decreased primarily due to certain impacts of the TCJA, discussed below.  The effective tax rate was also favorably affected by excess tax benefits from employee share-based payment awards under ASU 2016-09, a benefit from the research and development tax credit, and gains from the change in value of assets invested in corporate owned life insurance (COLI) policies.

Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017.  Among other things, the TCJA reduces the U.S. federal corporate tax rate from 35.0 percent to 21.0 percent effective on January 1, 2018.  The rate change is administratively effective at the beginning of our fiscal year, using a blended rate for the annual period.  As a result, the blended federal statutory tax rate for the year is 28.06 percent.  Additionally, the TCJA requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, creates new taxes on certain foreign-sourced earnings and changes or limits certain tax deductions and credits.  At December 31, 2017, we have not completed our accounting for the tax effects of enactment of the TCJA; however, as described below, we have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. For these items we recognized provisional amounts in income tax expense benefit as discussed below.

We remeasured deferred tax asset and liability balances at December 22, 2017 based on the rates at which they are expected to reverse in the future, which is generally 21.0 percent for reversals after FY2018 and a blended rate of 28.06 percent for reversals within FY2018. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of our net deferred tax liabilities was a $94.8 million reduction to income tax expense for the three and six months ended December 31, 2017.

The one-time transition tax is based on our total post-1986 earnings and profits (“E&P”) for which we have previously deferred from U.S. income taxes. We recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries, resulting in a $9.7 million increase in income tax expense for the three and six months ended December 31, 2017. The Company expects to pay this amount over eight years.  We have not yet completed our calculation of the total post-1986 foreign E&P for these foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax and any additional outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations.

The Company will continue to analyze the TCJA to determine the full effects of the new law, including the new lower corporate tax rate, international provisions, and the impact of the TCJA on the 162(m) limitations on its financial condition and results of operations.  Additionally, the Company will continue to monitor various state law changes in reaction to the TCJA as changes are enacted.  

The overall impact of the TCJA on our results of operations was a $92.3 million reduction to tax expense for the three and six months ended December 31, 2017.  The corresponding increase in diluted earnings per share was $3.66 for the three and six months ended December 31, 2017, respectively.

15

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

11. Business Segment Information

The Company reports operating results and financial data in two segments: domestic operations and international operations. Domestic operations provide information solutions and services to its customers. Its customers are primarily U.S. federal government agencies. Other customers of the Company’s domestic operations include commercial enterprises.  The Company places employees in locations around the world in support of its clients. International operations offer services to both commercial and non-U.S. government customers primarily within the Company’s business systems and enterprise IT markets. The Company evaluates the performance of its operating segments based on net income. Summarized financial information concerning the Company’s reportable segments is as follows (in thousands):

	Domestic Operations		International Operations		Total
Three Months Ended December 31, 2017
Revenue from external customers	$	1,046,823	$	41,037	$	1,087,860
Net income		138,930		3,865		142,795
Three Months Ended December 31, 2016
Revenue from external customers	$	1,024,025	$	33,505	$	1,057,530
Net income		38,732		3,688		42,420
Six Months Ended December 31, 2017
Revenue from external customers	$	2,097,706	$	75,968	$	2,173,674
Net income attributable to CACI		177,763		7,078		184,841
Six Months Ended December 31, 2016
Revenue from external customers	$	2,062,916	$	67,894	$	2,130,810
Net income attributable to CACI		72,374		6,709		79,083

12. Fair Value of Financial Instruments

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  Fair value is the price that would be received to sell an asset or paid to transfer a liability between market participants in an orderly transaction.  The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as the principal market.  When no principal market exists, the most advantageous market is used.  This is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received or minimizes the amount that would be paid.  Fair value is based on assumptions market participants would make in pricing the asset or liability.  Generally, fair value is based on observable quoted market prices or derived from observable market data when such market prices or data are available.  When such prices or inputs are not available, the reporting entity should use valuation models.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. The inputs used in measuring fair value are categorized into three levels, as follows:

• Level 1 Inputs – unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 Inputs – unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

• Level 3 Inputs – amounts derived from valuation models in which unobservable inputs reflect the reporting entity’s own assumptions about the assumptions of market participants that would be used in pricing the asset or liability.

16

CACI INTERNATIONAL INC

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) (Continued)

The Company’s financial instruments measured at fair value included interest rate swap agreements and contingent consideration in connection with business combinations.  The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and June 30, 2017, and the level they fall within the fair value hierarchy (in thousands):

			December 31,		June 30,
	Financial Statement	Fair Value	2017		2017
Description of Financial Instrument	Classification	Hierarchy	Fair Value
Contingent consideration	Other accrued expenses and    current liabilities	Level 3	$	9,600	$	14,889
Contingent consideration	Other long-term liabilities	Level 3	$	9,100	$	658
Interest rate swap agreements	Other long-term assets	Level 2	$	8,121	$	5,559
Interest rate swap agreements	Other accrued expenses and    current liabilities	Level 2	$	23	$	3
Interest rate swap agreements	Other long-term liabilities	Level 2	$	506	$	3,110

Changes in the fair value of the interest rate swap agreements are recorded as a component of accumulated other comprehensive income or loss.

Various acquisitions completed during prior fiscal years contained provisions requiring that the Company pay contingent consideration in the event the acquired businesses achieved certain specified earnings results during the two and three year periods subsequent to each acquisition.  The Company determined the fair value of the contingent consideration as of each acquisition date using a valuation model which included the evaluation of the most likely outcome and the application of an appropriate discount rate.  At the end of each reporting period, the fair value of the contingent consideration was remeasured and any changes were recorded in indirect costs and selling expenses.  During the three and six months ended December 31, 2017 this remeasurement resulted in a $1.1 million and $2.0 million change to the liability recorded.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations

There are statements made herein which do not address historical facts and, therefore, could be interpreted to be forward-looking statements as that term is defined in the Private Securities Litigation Reform Act of 1995.  Such statements are subject to factors that could cause actual results to differ materially from anticipated results.  The factors that could cause actual results to differ materially from those anticipated include, but are not limited to, the following: legal, regulatory, and political change as a result of transitioning to a new presidential administration that could result in economic uncertainty; changes in U.S. federal agencies, current agreements with other nations, foreign events, or any other events which may affect the global economy; regional and national economic conditions in the United States and globally; terrorist activities or war; changes in interest rates; currency fluctuations; significant fluctuations in the equity markets; changes in our effective tax rate; failure to achieve contract awards in connection with re-competes for present business and/or competition for new business; the risks and uncertainties associated with client interest in and purchases of new products and/or services; continued funding of U.S. government or other public sector projects, based on a change in spending patterns under the Budget Control Act of 2011 (BCA), or any legislation that amends or changes discretionary spending levels under that act; changes in budgetary priorities or in the event of a priority need for funds, such as homeland security; government contract procurement (such as bid protest, small business set asides, loss of work due to organizational conflicts of interest, etc.) and termination risks; the results of government audits and reviews conducted by the Defense Contract Audit Agency, the Defense Contract Management Agency, or other governmental entities with cognizant oversight; individual business decisions of our clients; paradigm shifts in technology; competitive factors such as pricing pressures and/or competition to hire and retain employees (particularly those with security clearances); market speculation regarding our continued independence; material changes in laws or regulations applicable to our businesses, particularly in connection with (i) government contracts for services, (ii) outsourcing of activities that have been performed by the government, and (iii) competition for task orders under Government Wide Acquisition Contracts (GWACs) and/or schedule contracts with the General Services Administration; the ability to successfully integrate the operations of our recent and any future acquisitions; our own ability to achieve the objectives of near term or long range business plans; and other risks described in our SEC filings.

Overview

The following discussion and analysis of our financial condition and results of operations is provided to enhance the understanding of, and should be read together with, our unaudited consolidated financial statements and the notes to those statements that appear elsewhere in this Quarterly Report on Form 10-Q.

During the six months ended December 31, 2017, 93.7 percent of our revenue was derived from contracts with U.S. government agencies versus 93.8 percent in same period in 2016.  These were derived through both prime and subcontractor relationships.  We also provide services to commercial customers, and through our international operations, to non-U.S. government agencies.  We provide our services and solutions to our customers in the following market areas:

• Business Systems – CACI’s business systems solutions enable efficiency, innovation, and compliance by applying focused federal domain expertise, combined with best-fit technology solutions, all integrated, implemented, and operated to improve the organizational performance of our customers. Our solutions in financial management, human capital management, asset and materials management, and administrative management help customers improve their efficiency. CACI is a full-service federal systems integrator, implementing the foundational system solutions for both mission and business support, and providing the consulting assistance and business intelligence/analytics that convert data into actionable information to support smart decisions for over 100 federal military, intelligence, and federal civilian organizations.

• Command and Control (C2) – CACI develops, integrates, sustains, and operates agile and flexible C2 solutions, consisting of hardware, software, and interfaces that enhance our customers’ situational awareness, planning, execution, and assessment. CACI’s solutions enable network-centric operations to generate decision advantage in the most demanding environments.

• Communications – CACI’s broad-based solutions offer communications capabilities for soldier systems, mobile platforms, fixed facilities, and the enterprise. We leverage our expertise to design, develop, integrate, and provide field support to deliver rapidly deployable communications solutions when they are required anywhere in the world. CACI develops and integrates solutions that deliver secure multi-level unified communications from the enterprise directly to and from the tactical edge. We rapidly tailor and implement our products, services, and solutions to fit the specific missions and operating contexts of our customers.

• Cyber Security – CACI’s cyber security solutions combine years of cyber and electronic warfare experience with cutting-edge signals intelligence and radio frequency (RF) expertise. We help protect vulnerable platforms – including airplanes, cell phones, weapons systems, and unmanned aerial vehicles – from cyber attacks, and provide comprehensive cyber support to a number of federal customers and the Intelligence Community (IC). We also have a world-class cyber team that provides tailored support to the IC and Department of Defense (DoD). CACI’s full spectrum cyber security capabilities span platform defense and exploitation, advanced network operations, and cyber engineering of resilient systems. Our rapid research and development, prototyping, and integration capabilities enable us to combat shifting and emerging threats.

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• Enterprise Information Technology (IT) – CACI’s Enterprise IT solutions enable our customers’ missions. Our experts secure operational IT environments in the defense, intelligence, homeland security, and civilian communities. We provide tailored, end-to-end, enterprise-wide information solutions and services for the design, development, integration, deployment, operations and management, sustainment, and security of our customers’ IT solutions. Our solutions include cloud-powered solutions; performance-based service management; development operations and mobility; defensive cyber; end-user services; and infrastructure services. We support customers in the adoption of virtualized cloud services and mobile solutions that are revolutionizing the efficiency, reliability, and cost-effectiveness of IT services. We provide managed services and technical services that enhance efficiency, improve mission uptime, and reduce costs. Our operational, analytic, consulting, and transformational services use industry leading-edge practices, standards, and innovations to enable and optimize the full lifecycle of the enterprise IT environment.

• Health – CACI supports federal civilian and military health missions to improve healthcare delivery systems, integrate electronic health records, improve health outcomes for communities, and enhance the speed and efficiency of emergency responsiveness. To improve cost efficiencies in healthcare, we use data analytics to better predict clinical, financial, and operational needs to reduce financial waste and fraud. We solve challenges in bio-surveillance, outbreak detection, disease prevention systems, health systems security, medical supply logistics and rapid disaster/emergency response. We provide capabilities that address evolving healthcare regulations and establish more efficient and interoperable healthcare delivery systems through program management, strategic planning, software engineering, operation and maintenance, and IT facility support.

• Intelligence Services – CACI’s intelligence specialists support our customers’ mission to convert data collected from all information sources into knowledge that enables event forecasting and empowers decisions. Our support is provided at the strategic and tactical levels, and consists of intelligence analysis, operations and planning, policy, doctrine, and security support. We work within the United States and internationally, providing analysis of data received from a variety of sources, and we provide direct support such as ground truth and intelligence gathering internationally.

• Intelligence Systems and Support – CACI designs, develops, integrates, deploys, and rapidly prototypes hardware- and software-enabled tools and applications which in support of data collection, processing and analysis for our IC and DoD customers. An industry leader in signals intelligence (SIGINT) collection, processing, and dissemination systems, we deliver end-to-end SIGINT capabilities, including virtualized signal processing. We also provide significant support to the federal government in foreign instrumentation signals intelligence. We employ multi-intelligence fusion analysis of vast data from multiple intelligence sources, displayed using robust visualization techniques, to support a wide range of intelligence products and services for our customers to deliver actionable information in near real-time. We design and develop software-defined radio systems capable of hosting a range of SIGINT capabilities. We also deliver quick reaction capabilities for integrating SIGINT and RF systems into platforms to meet the rising tempo of missions.

• Investigation and Litigation Support – CACI assists the U.S. government in investigating and litigating cases. We continually monitor and develop new document and data capture methodologies that increase efficiency and lower costs for our customers in high-stakes situations such as trials, investigations, hearings, and regulatory and enforcement activities. We are a proven provider with decades of experience delivering start-to-finish investigation and litigation support, leveraging technology to help customers manage documents and acquire and present evidence from pre-filing investigation through complaint, discovery, and trial; then post-trial and appeals. With our American Society of Crime Laboratory Directors/Laboratory Accreditation Board (ASCLD/LAB) International-accredited computer and audio/video forensics lab, we analyze digital evidence to support criminal and civil investigations, litigations, and security inquiries. We offer scalable cloud hosting solutions that are stable, secure, and fast, with access to industry-leading e-Discovery tools. As the premier contractor for delivering background investigations to the U.S. federal government, our fully trained and cleared investigators provide cost-efficient, high-quality personnel security investigations.

• Logistics and Material Readiness – CACI provides a full suite of logistics and material readiness solutions and professional service offerings that ensure the efficient, effective, and secure global flow and storage of materials, services, and information in support of U.S. government agencies. We provide complete product lifecycle management to make certain that provisions, equipment, and systems are ready anytime, anywhere. We deploy comprehensive supply chain solutions to enhance visibility, facilitate readiness-based sparing, and analyze readiness in near-real time. To advance the secure flow of supplies, we optimize efficiency while minimizing the time and cost of meeting readiness requirements across the enterprise. We provide our customers with workforce readiness by tailoring solutions to achieve the optimal capability of the organization and individual. We develop and manage logistics information systems as well as specialized simulation and modeling toolsets, and provide logistics engineering services.

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• Space Operations and Resiliency – CACI provides the advanced technology and mission support capabilities required to launch, operate, and exploit systems in the space domain. Our unique solutions predict outcomes, allowing decision-makers more time and better options for executing the mission. Our advanced analytics capabilities are used across the mission space ranging from the execution of launch operations planning to the mission management of complex on orbit systems.  We utilize advanced big data and deep learning solutions to enhance the ability of our mission partners to solve their most complex problems. We also provide Engineering, Logistics and Modification solutions to globally deployed ground systems used to provide critical mission capabilities to ongoing missions as well as launch and early orbit events.

• Surveillance and Reconnaissance – CACI integrates surveillance and reconnaissance technologies into platforms that support identification of potential targets and enhance troop safety. We develop and integrate state-of-the-art surveillance and reconnaissance sensors into air and ground systems, leveraging our mission-customized software and electronics. We provide integration, development, quick-reaction solutions and technical support services in support of military, intelligence, and homeland security missions throughout the U.S. and around the world.

We continue to carefully follow federal budget, legislative and contracting trends and activities and evolve our strategies to take these into consideration.  Since March 2013, the federal government has been operating under sequestration required by the BCA.  Under sequestration, constraints on discretionary expenditures have taken place each of the government’s fiscal years since 2013 and, unless the BCA is amended or repealed, will continue through the government’s Fiscal Year 2021.  At the end of October 2015, the Bipartisan Budget Act of 2015 (BBA) was passed and signed into law, which raised the discretionary spending caps under the BCA in the government’s Fiscal Years 2016 and 2017, respectively.  During the government’s Fiscal Year 2017, the U.S. Government operated under a series of continuing resolutions (CRs) until early May and under omnibus appropriations legislation from then until September 30, 2017.  Since October 1, 2017, the U.S Government has been operating under a series of CRs until January 19, 2018.  Between January 20^th and 22^nd the government shutdown until Congress passed another CR which will expire on February 8, 2018.   Before the February date, Congress must pass and the president must sign legislation that will fund federal agencies and programs either by discretionary funding through annual appropriations acts or interim CRs.  When federal agencies and programs lack either appropriated or interim funding, they experience a funding gap and, under the Antideficiency Act, passed in 1870 and amended several times, they must cease operations, or shutdown, except in certain emergency situations or when law authorizes continued activity.  Government shutdowns necessitate furloughs of several hundred thousand federal employees, require cessation or reduction of many government activities, and affect numerous sectors of the economy.  We expect the impact of the above legislation and actions Congress will take on contracts and task orders we hold, and may receive, to continue throughout our FY18.

We are continuously reviewing our operations in an attempt to identify those programs that are potentially at risk from the consequences of sequestration beyond the coverage of the current legislation so that we can make appropriate contingency plans, should that be necessary.  We are experiencing reduced funding on some of our programs, and may experience further reductions, but we do not expect the cancellation of any of our major programs.

In July, the Treasury Department determined that the federal government would exceed the statutory debt limit set by law in October 2015 at the end of September 2017.  The Treasury Department also determined that at that time it would have exhausted all financing options and would no longer be able to pay for all federal obligations.  When the debt limit is exceeded, some federal payments to creditors, vendors, contractors, state and local governments, beneficiaries, and other entities would either be delayed or limited.  These delays in payments would, in effect, be borrowings from contractors such as us, and would create a backlog of unpaid bills until the government collects more revenue or other sources of cash than its outlays.  In some cases, delaying federal payments incurs interest penalties under some statutes such as the Prompt Payment Act, which directs the government to pay interest penalties to contractors if it does not pay them by the required payment date.  Were there to be a delay in paying for all federal obligations, it is expected that this would result in significant economic and financial consequences that may have a lasting impact on federal programs and the federal government’s ability to borrow in the future.  To mitigate the possibility of these events from happening, on September 8^th Congress passed and the president signed into law legislation that suspended the debt limit until December 8, 2017.  Once that suspension lapsed, the Secretary of the Treasury invoked authorities to employ extraordinary measures, which are estimated to last until sometime in late March or early April 2018.  The Treasury Secretary has asked some congressional leaders to act on the debt limit before the end of February 2018.  We expect that Congress will address the debt limit issue prior to that date.

We also continue to face some uncertainties due to the current general business environment, and we continue to see protests of major contract awards and delays in government procurement activities.  In addition, many of our federal government contracts require us to employ personnel with security clearances, specific levels of education and specific past work experience.  Depending on the level of clearance, security clearances can be difficult and time-consuming to obtain and competition for skilled personnel in the information technology services industry is intense.  In addition, a shift of expenditures away from programs that we support could cause federal government agencies to reduce their purchases under contracts, to exercise their right to terminate contracts at any time without penalty, or to decide not to exercise options to renew contracts.  Additional factors that could affect our federal government contracting business include an increase in set-asides for small businesses and budgetary priorities limiting or delaying federal government spending in general.

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Results of Operations for the Three Months Ended December 31, 2017 and 2016

Revenue. The table below sets forth revenue by customer type with related percentages of total revenue for the three months ended December 31, 2017 and 2016, respectively:

	Three Months Ended December 31,								Change
(dollars in thousands)	2017				2016				$			%
Department of Defense	$	720,239	66.2	%	$	684,673	64.8	%	$	35,566			5.2	%
Federal civilian agencies		296,230	27.2			308,053	29.1			(11,823	)		(3.8	)
Commercial and other		71,391	6.6			64,804	6.1			6,587			10.2
Total	$	1,087,860	100.0	%	$	1,057,530	100.0	%	$	30,330			2.9	%

For the three months ended December 31, 2017, total revenue increased by 2.9 percent, or $30.3 million, compared to the same period a year ago.  This growth in revenue resulted primarily from new business offset by contract completions.

DoD revenue increased 5.2 percent, or $35.6 million, for the three months ended December 31, 2017, as compared to the same period a year ago primarily due to new intelligence services and satellite network support business.  DoD revenue includes services provided to the U.S. Army, our largest customer, where our services focus on supporting readiness, tactical military intelligence, and communications systems.  DoD revenue also includes work with the U.S. Navy and other DoD agencies across all of our major service offerings.

Revenue from federal civilian agencies decreased 3.8 percent, or $11.8 million, for the three months ended December 31, 2017, as compared to the same period a year ago.  This decrease was primarily attributable to reduced material sales and customer requirements offset by growth in security services support.  Federal civilian agency revenue also includes services provided to non-DoD national intelligence agencies.

Commercial and other revenue increased 10.2 percent, or $6.6 million for the three months ended December 31, 2017, as compared to the same period a year ago.  This increase was attributable to increased new managed services business from our international acquisitions.  Commercial revenue and other is derived from both international and domestic operations.  Of the total commercial and other revenue, international operations accounted for 57.5 percent, or $41.0 million for the three months ended December 31, 2017 as compared to 51.7 percent or $33.5 million over the same period a year ago due to growth of managed services business from acquisitions.  Domestic operations accounted for 42.5 percent or $30.4 million as compared to 48.3 percent or $31.3 million over those same periods a year ago, due to reduced technology support on state and local contracts.

21

Income from Operations. The following table sets forth the relative percentage that certain items of expense and earnings bear to revenue for the three months ended December 31, 2017 and 2016, respectively.

	Dollar Amount					Percentage of Revenue
	Three Months Ended					Three Months Ended
	December 31,					December 31,						Change
(dollars in thousands)	2017			2016		2017			2016			$			%
Revenue	$	1,087,860		$	1,057,530		100.0	%		100.0	%	$	30,330			2.9	%
Costs of revenue
Direct costs		727,160			705,321		66.8			66.7			21,839			3.1
Indirect costs and selling expenses		254,180			253,822		23.4			24.0			358			0.1
Depreciation and amortization		18,258			18,132		1.7			1.7			126			0.7
Total costs of revenue		999,598			977,275		91.9			92.4			22,323			2.3
Income from operations		88,262			80,255		8.1			7.6			8,007			10.0
Interest expense and other, net		10,956			12,325		1.0			1.2			(1,369	)		(11.1	)
Income before income taxes		77,306			67,930		7.1			6.4			9,376			13.8
Income tax expense (benefit)		(65,489	)		25,510		(6.0	)		2.4			(90,999	)		(365.7	)
Net income	$	142,795		$	42,420		13.1	%		4.0	%	$	100,375			236.6	%

Income from operations for the three months ended December 31, 2017 was $88.3 million. This was an increase of $8.0 million, or 10.0 percent, from income from operations of $80.3 million for the three months ended December 31, 2016. Our operating margin of 8.1 percent for the period ended December 31, 2017 increased from 7.6 percent during the period ended December 31, 2016. This increase is due to lower indirect costs and higher margin work on new business.

As a percentage of revenue, direct costs were 66.8 percent and 66.7 percent for the three months ended December 31, 2017 and 2016, respectively. Direct costs include direct labor and ODCs, which include, among other costs, subcontracted labor and material purchases.  

Indirect costs and selling expenses include fringe benefits (attributable to both direct and indirect labor), marketing and bid and proposal costs, indirect labor, and other discretionary expenses.  Indirect costs and selling expenses remained at the same percentages, increasing $0.4 million or 0.1 percent comparing the three months ended December 31, 2017 to the three months ended December 31, 2016.  

Depreciation and amortization expense increased $0.1 million or 0.7 percent for the three months ended December 31, 2017 as compared to the same period a year ago.  This change was primarily due to an increase in depreciation, offset by a decrease in amortization due to the run-off of amortization expense related to prior acquisitions.

Interest expense and other, net decreased $1.4 million or 11.1 percent during the three months ended December 31, 2017 as compared to the same period a year ago.  The decrease primarily relates to lower outstanding debt balances.

The effective income tax rate for the three months ended December 31, 2017 generated a benefit of $65.5 million resulting in a decreased to (84.7) percent from 37.6 percent for the same period last year. The effective tax rate decreased primarily due to certain impacts of the TCJA discussed in Note 10.  The effective tax rate was also favorably affected by a benefit from the research and development tax credit and gains from the change in value of assets invested in corporate owned life insurance (COLI) policies.     

22

Results of Operations for the Six Months Ended December 31, 2017 and 2016

Revenue. The table below sets forth revenue by customer type with related percentages of total revenue for the six months ended December 31, 2017 and 2016, respectively:

	Six Months Ended December 31,								Change
(dollars in thousands)	2017				2016				$			%
Department of Defense	$	1,434,292	66.0	%	$	1,376,876	64.6	%	$	57,416			4.2	%
Federal civilian agencies		602,766	27.7			621,846	29.2			(19,080	)		(3.1	)
Commercial and other		136,616	6.3			132,088	6.2			4,528			3.4
Total	$	2,173,674	100.0	%	$	2,130,810	100.0	%	$	42,864			2.0	%

For the six months ended December 31, 2017, total revenue increased by 2.0 percent, or $42.9 million, over the same period a year ago.  This growth in revenue resulted primarily from new business offset by contract completions.

DoD revenue increased 4.2 percent, or $57.4 million, for the six months ended December 31, 2017, as compared to the same period a year ago.  This growth was primarily from new business in intelligence and technology support services.  DoD revenue includes services provided to the U.S. Army, our largest customer, where our services focus on supporting readiness, tactical military intelligence, and communications systems.  DoD revenue also includes work with the U.S. Navy and other DoD agencies across all of our major service offerings.

Revenue from federal civilian agencies decreased 3.1 percent, or $19.1 million, for the six months ended December 31, 2017, as compared to the same period a year ago.  This decrease was primarily attributable to reduced material sales and customer requirements offset by growth in security services support.  Federal civilian agency revenue also includes services provided to non-DoD national intelligence agencies.

Commercial and other revenue increased 3.4 percent, or $4.5 million primarily from our international and domestic technology services and cyber security products.  This increase was primarily attributable to increased product orders and managed services revenue from acquisitions within our international operations.  Commercial and other revenue is derived from both international and domestic operations.  Of the total commercial and other revenue, international operations accounted for 55.6 percent, or $76.0 million for the six months ended December 31, 2017 as compared to 51.4 percent, or $67.9 million over the same period a year ago.  Domestic operations accounted for 44.4 percent, or $60.6 million as compared to 48.6 percent, or $64.2 million over the same period a year ago.

23

Income from Operations. The following table sets forth the relative percentage that certain items of expense and earnings bear to revenue for the six months ended December 31, 2017 and 2016, respectively.

	Dollar Amount					Percentage of Revenue
	Six Months Ended					Six Months Ended
	December 31,					December 31,						Change
(dollars in thousands)	2017			2016		2017			2016			$			%
Revenue	$	2,173,674		$	2,130,810		100.0	%		100.0	%	$	42,864			2.0	%
Costs of revenue
Direct costs		1,466,838			1,433,542		67.5			67.3			33,296			2.3
Indirect costs and selling expenses		515,424			511,160		23.7			24.0			4,264			0.8
Depreciation and amortization		35,846			36,195		1.6			1.7			(349	)		(1.0	)
Total costs of revenue		2,018,108			1,980,897		92.8			93.0			37,211			1.9
Income from operations		155,566			149,913		7.2			7.0			5,653			3.8
Interest expense and other, net		22,203			24,814		1.0			1.1			(2,611	)		(10.5	)
Income before income taxes		133,363			125,099		6.2			5.9			8,264			6.6
Income tax expense (benefit)		(51,478	)		46,016		(2.3	)		2.2			(97,494	)		(211.9	)
Net income	$	184,841		$	79,083		8.5	%		3.7	%	$	105,758			133.7	%

Income from operations for the six months ended December 31, 2017 was $155.6 million. This was an increase of $5.7 million, or 3.8 percent, from income from operations of $149.9 million for the six months ended December 31, 2016. Our operating margin of 7.2 percent for the period ended December 31, 2017 increased from 7.0 percent during the period ended December 31, 2016. This increase was due to lower indirect costs and higher margin work on new business.

As a percentage of revenue, direct costs were 67.5 percent and 67.3 percent for the six months ended December 31, 2017 and 2016, respectively. Direct costs include direct labor and ODCs, which include, among other costs, subcontracted labor and material purchases.

Indirect costs and selling expenses include fringe benefits (attributable to both direct and indirect labor), marketing and bid and proposal costs (B&P), indirect labor, and other discretionary expenses.  Indirect costs and selling expenses increased less than 1.0 percent or $4.3 million comparing the six months ended December 31, 2017 to the six months ended December 31, 2016.  This increase was driven by increased fringe benefits relating to insurance costs offset by cost savings initiatives and lower B&P.

Depreciation and amortization expense decreased $0.3 million or 1.0 percent for the six months ended December 31, 2017 as compared to the same period a year ago.  This decrease was the result of the run-off of amortization expense related to prior acquisitions, partially offset by increased depreciation expense.

Interest expense and other, net decreased $2.6 million or 10.5 percent during the six months ended December 31, 2017 as compared to the same period a year ago.  The decrease primarily relates to lower outstanding debt balances.

The effective income tax rate for the six months ended December 31, 2017 generated a benefit of $51.5 million resulting in a decreased to (38.6) percent from 36.8 percent for the same period last year.  The effective tax rate decreased primarily due to certain impacts of the TCJA, discussed in Note 10.  The effective tax rate was also favorably affected by excess tax benefits from employee share-based payment awards under ASU 2016-09, a benefit from the research and development tax credit, and gains from the change in value of assets invested in corporate owned life insurance (COLI) policies.

24

Liquidity and Capital Resources

As of December 31, 2017, the aggregate amount of committed financing under our Credit Facility was $1,981.3 million, which included an $850.0 million revolving credit facility, and a $1,131.3 million term loan.  The Credit Facility matures on June 1, 2020.

The Revolving Facility is a secured facility that permits continuously renewable borrowings and has subfacilities of $100.0 million for same-day swing line borrowings and $25.0 million for stand-by letters of credit.  As of December 31, 2017, we had $210.0 million outstanding under the Revolving Facility, no borrowings on the swing line and an outstanding letter of credit of $0.4 million.

The Term Loan is a five-year secured facility under which principal payments are due in quarterly installments of $13.5 million through June 30, 2018 and $27.0 million thereafter until the balance is due in full on June 1, 2020.  As of December 31, 2017, $951.9 million was outstanding under the Term Loan.

At any time and so long as no default has occurred, we have the right to increase the Term Loan or Revolving Facility in an aggregate principal amount of up to the greater of $400.0 million or an amount subject to 2.75 times secured leverage, calculated assuming the Revolving Facility is fully drawn, with applicable lender approvals.

The interest rates applicable to loans under the Credit Facility are floating interest rates that, at our option, equal a base rate or a Eurodollar rate plus, in each case, an applicable margin based upon our consolidated total leverage ratio.

The Credit Facility requires us to comply with certain financial covenants, including a maximum senior secured leverage ratio, a maximum total leverage ratio and a minimum fixed charge coverage ratio.  The Credit Facility also includes customary negative covenants restricting or limiting our ability to guarantee or incur additional indebtedness, grant liens or other security interests to third parties, make loans or investments, transfer assets, declare dividends or redeem or repurchase capital stock or make other distributions, prepay subordinated indebtedness and engage in mergers, acquisitions or other business combinations, in each case except as expressly permitted under the Credit Facility.  Since the inception of the Credit Facility, we have been in compliance with all of the financial covenants.  A majority of our assets serve as collateral under the Credit Facility.

Cash and cash equivalents were $56.3 million and $65.5 million as of December 31, 2017 and June 30, 2017, respectively. Our operating cash flow was $155.8 million for the six months ended December 31, 2017 compared to $135.4 million for the same period a year ago. The year-over-year increase is primarily due to the timing of vendor payables and receivable collections. Days-sales outstanding (DSO) was 61 days at December 31, 2017, compared to 60 days at December 31, 2016 due to normal fluctuations in collections.

Cash used in investing activities was $67.8 million and $8.1 million during the six months ended December 31, 2017 and 2016, respectively.  During the six months ended December 31, 2017 we paid $45.6 million for business acquisitions, as compared to $5.6 million during the same period a year ago.  For the six months ended December 31, 2016 we received a net working capital refund from our NSS acquisition of $13.6 million.  We also received $4.7 million of capital contributions relating to our joint ventures.  We had no similar proceeds during the six months ended December 31, 2017.  

Cash flows used in financing activities were $98.3 and $102.1 million during the six months ended December 31, 2017 and December 31, 2016, respectively.  During the six months ended December 31, 2017 and December 31, 2016 we had net payments under our credit facility of $82.0 million and $98.5 million, respectively. During the six months ended December 31, 2017 and December 31, 2016 we also used cash within financing activities of $12.7 million and $3.6 million to pay taxes on equity transactions. 

We believe that the combination of internally generated funds, available bank borrowings and cash and cash equivalents on hand will provide the required liquidity and capital resources necessary to fund on-going operations, customary capital expenditures, debt service obligations, and other working capital requirements over the next twelve months.  We may in the future seek to borrow additional amounts under a long-term debt security.  Over the longer term, our ability to generate sufficient cash flows from operations necessary to fulfill the obligations under the Credit Facility and any other indebtedness we may incur will depend on our future financial performance which will be affected by many factors outside of our control, including worldwide economic and financial market conditions.

The TCJA was enacted on December 22, 2017.  Among other things, the TCJA reduces the U.S. federal corporate tax rate from 35 percent to 21 percent, requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, creates new taxes on certain foreign-sourced earnings and changes or limits certain tax deductions.  The Company expects that these changes will have a net favorable impact on the Company’s future after-tax earnings, primarily due to the lower federal tax rate, however, we have not fully analyzed the potential benefit the TCJA could have on our free cash flow. The Company will continue to assess the expected impacts of the TCJA on our consolidated financial statements.

25

Off-Balance Sheet Arrangements and Contractual Obligations

We use off-balance sheet arrangements to finance the lease of operating facilities. We have financed the use of all of our current office and warehouse facilities through operating leases. Operating leases are also used to finance the use of computers, servers, phone systems, motor vehicles in the U.K., and to a lesser extent, other fixed assets, such as furnishings, that are obtained in connection with business acquisitions. We generally assume the lease rights and obligations of companies acquired in business combinations and continue financing equipment under operating leases until the end of the lease term following the acquisition date. We generally do not finance capital expenditures with operating leases, but instead finance such purchases with available cash balances. For additional information regarding our operating lease commitments, see Note 14 in the Notes to Consolidated Financial Statements contained in our Annual Report on Form 10-K for the year ended June 30, 2017. The Credit Facility provides for stand-by letters of credit aggregating up to $25.0 million that reduce the funds available under the Revolving Facility when issued. As of December 31, 2017, we had an outstanding letter of credit of $0.4 million. We have no other material off-balance sheet financing arrangements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

The interest rates on both the Term Loan and the Revolving Facility are affected by changes in market interest rates.  We have the ability to manage these fluctuations in part through interest rate hedging alternatives in the form of interest rate swaps.  We have entered into floating-to-fixed interest rate swap agreements for an aggregate notional amount of $800.0 million related to a portion of our floating rate indebtedness. All remaining balances under our Term Loan, and any additional amounts that may be borrowed under our Revolving Facility, are currently subject to interest rate fluctuations. With every one percent fluctuation in the applicable interest rates, interest expense on our variable rate debt for the six months ended December 31, 2017 would have fluctuated by approximately $2.1 million.

Approximately 3.5 percent and 3.2 percent of our total revenue in six months ended December 31, 2017 and 2016, respectively, was derived from our international operations headquartered in the U.K. Our practice in our international operations is to negotiate contracts in the same currency in which the predominant expenses are incurred, thereby mitigating the exposure to foreign currency exchange fluctuations. It is not possible to accomplish this in all cases; thus, there is some risk that profits will be affected by foreign currency exchange fluctuations. As of December 31, 2017, we held a combination of euros and pounds sterling in the U.K. and in the Netherlands equivalent to approximately $26.6 million. This allows us to better utilize our cash resources on behalf of our foreign subsidiaries, thereby mitigating foreign currency conversion risks.

Item 4.  Controls and Procedures

As of the end of the three month period covered by this report, we carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-15, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer.

The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. The effectiveness of a system of disclosure controls and procedures is subject to various inherent limitations, including cost limitation, judgments used in decision making, assumptions about the likelihood of future events, the soundness of internal controls, and fraud.  Due to such inherent limitations, there can be only reasonable, and not absolute, assurance that any system of disclosure controls and procedures will be successful in preventing all errors or fraud, or in making all material information known in a timely manner to appropriate levels of management.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were operating and effective at December 31, 2017.

The Company reports that no changes in its internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2017.

26

PART II

OTHER INFORMATION

Item 1.  Legal Proceedings

Al Shimari, et al. v. L-3 Services, Inc. et al.

Reference is made to Part I, Item 3, Legal Proceedings in the Registrant’s Annual Report on Form 10-K for the year ended June 30, 2017 for the most recently filed information concerning the suit filed in the United States District Court for the Southern District of Ohio.  The lawsuit names CACI International Inc, CACI Premier Technology, Inc. and former CACI employee Timothy Dugan as Defendants, along with L-3 Services, Inc.  Plaintiffs seek, inter alia, compensatory damages, punitive damages, and attorney’s fees.

Since the filing of Registrant’s report described above, on remand, Defendant CACI Premier Technology, Inc. moved to dismiss Plaintiffs’ claims based upon the political question doctrine.  On June 18, 2015, the Court issued an Order granting Defendant CACI Premier Technology, Inc.’s motion to dismiss, and on June 26, 2015 entered a final judgment in favor of Defendant CACI Premier Technology, Inc.

On July 23, 2015, Plaintiffs filed a Notice of Appeal of the district court’s June 2015 decision.  On October 21, 2016, the Court of Appeals vacated and remanded the District Court’s judgment with instructions for the District Court to make further determinations regarding the political question doctrine.  The District Court conducted an initial status conference on December 16, 2016.  On June 9, 2017, the District Court dismissed Plaintiff Rashid without prejudice from the action based upon his inability to participate.  On July 19, 2017, CACI Premier Technology, Inc. filed a motion to dismiss the action on numerous legal grounds.  The Court held a hearing on that motion on September 22, 2017, and denied the motion pending issuance of a written decision.  On January 17, 2018, CACI filed a third-party complaint naming the United States and John Does 1-60, asserting claims for contribution, indemnification, exoneration and breach of contract in the event that CACI PT is held liable to Plaintiffs, as Plaintiffs are seeking to hold CACI PT liable on a co-conspirator theory and a theory of aiding and abetting.

Abbass, et al v. CACI Premier Technology, Inc. and CACI International Inc, Case No. 1:13CV1186-LMB/JFA (EDVA)

Reference is made to Part I, Item 3, Legal Proceedings in the Registrant’s Annual Report on Form 10-K for the year ended June 30, 2017 for the most recently filed information concerning the suit filed in the United States District Court for the Eastern District of Virginia.  The lawsuit names CACI International Inc and CACI Premier Technology, Inc. as Defendants.  Plaintiffs seeks, inter alia, compensatory damages, punitive damages, and attorney’s fees.

Since the filing of Registrant’s report described above, the case remains stayed pending the outcome in the Al Shimari appeal.

We are vigorously defending the above-described legal proceedings, and, based on our present knowledge of the facts, believe the lawsuits are completely without merit.

Item 1A.  Risk Factors

Reference is made to Part I, Item 1A, Risk Factors, in the Registrant’s Annual Report on Form 10-K for the year ended June 30, 2017. There have been no material changes from the risk factors described in that report.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides certain information with respect to our purchases of shares of CACI International Inc’s common stock:

Period	TotalNumber of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased As Part of Publicly Announced Programs		Maximum Number of Sharesthat May Yet Be Purchased Under the Plans or Programs
October 2017		8,753	$	143.19		1,130,930		119,070
November 2017		—		—		—		—
December 2017		—		—		—		—
Total		8,753	$	143.19		1,130,930		119,070

Item 3.  Defaults Upon Senior Securities

None

27

Item 4.  Mine Safety Disclosures

Not applicable

Item 5.  Other Information

None

Item 6.  Exhibits

			Incorporated by Reference
Exhibit No.	Description	Filed with this Form 10-Q	Form	Filing Date	Exhibit  No.
10.1	Performance Restricted Stock Unit Grant Agreement		8-K	November 28, 2017	10.1
31.1	Section 302 Certification Kenneth Asbury	X
31.2	Section 302 Certification Thomas A. Mutryn	X
32.1	Section 906 Certification Kenneth Asbury	X
32.2	Section 906 Certification Thomas A. Mutryn	X
101	The following materials from the CACI International Inc Quarterly Report on Form 10-Q for the quarter ended December 31, 2017 formatted in eXtensible Business Reporting Language (XBRL): (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Balance Sheets, (iv) Consolidated Statements of Cash Flows and (v) Notes to Consolidated Financial Statements. *

* Submitted electronically herewith.

28

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	CACI International Inc
	Registrant
Date:  February 1, 2018	By:	/s/ Kenneth Asbury
		Kenneth Asbury
		President,
		Chief Executive Officer and Director
		(Principal Executive Officer)
Date:  February 1, 2018	By:	/s/ Thomas A. Mutryn
		Thomas A. Mutryn
		Executive Vice President,
		Chief Financial Officer and Treasurer
		(Principal Financial Officer)
Date:  February 1, 2018	By:	/s/ Gregory W. Buckis, Sr.
		Gregory W. Buckis, Sr.
		Senior Vice President, Corporate Controller
		and Chief Accounting Officer
		(Principal Accounting Officer)

29

EX-31.1

Exhibit 31.1

Section 302 Certification

I, Kenneth Asbury, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CACI International Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to affect the Registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date: February 1, 2018

/s/      Kenneth Asbury

Kenneth Asbury

President

Chief Executive Officer and Director

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Section 302 Certification

I, Thomas A. Mutryn, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CACI International Inc;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter (the Registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s Board of Directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to affect the Registrant’s ability to record, process, summarize, and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal controls over financial reporting.

Date: February 1, 2018

/s/      Thomas A. Mutryn

Thomas A. Mutryn

Executive Vice President, Chief Financial Officer

and Treasurer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Section 906 Certification

In connection with the quarterly report on Form 10-Q of CACI International Inc (the Company) for the three months ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned President and Chief Executive Officer of the Company certifies, to the best of his knowledge and belief pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 1, 2018

/s/      Kenneth Asbury

Kenneth Asbury

President

Chief Executive Officer and Director

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Section 906 Certification

In connection with the quarterly report on Form 10-Q of CACI International Inc (the Company) for the three months ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the Report), the undersigned Executive Vice President, Chief Financial Officer and Treasurer of the Company certifies, to the best of his knowledge and belief pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: February 1, 2018

/s/     Thomas A. Mutryn

Thomas A. Mutryn

Executive Vice President, Chief Financial Officer

and Treasurer

(Principal Financial Officer)

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Document And Entity Information - shares	6 Months Ended
	Dec. 31, 2017	Jan. 24, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	CACI INTERNATIONAL INC /DE/
Entity Central Index Key	0000016058
Trading Symbol	caci
Current Fiscal Year End Date	--06-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		24,627,905
Document Type	10-Q
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2

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CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Revenue	$ 1,087,860	$ 1,057,530	$ 2,173,674	$ 2,130,810
Costs of revenue:
Direct costs	727,160	705,321	1,466,838	1,433,542
Indirect costs and selling expenses	254,180	253,822	515,424	511,160
Depreciation and amortization	18,258	18,132	35,846	36,195
Total costs of revenue	999,598	977,275	2,018,108	1,980,897
Income from operations	88,262	80,255	155,566	149,913
Interest expense and other, net	10,956	12,325	22,203	24,814
Income before income taxes	77,306	67,930	133,363	125,099
Income tax expense (benefit)	(65,489)	25,510	(51,478)	46,016
Net income	$ 142,795	$ 42,420	$ 184,841	$ 79,083
Basic earnings per share	$ 5.80	$ 1.74	$ 7.53	$ 3.25
Diluted earnings per share	$ 5.66	$ 1.69	$ 7.33	$ 3.16
Weighted-average basic shares outstanding	24,622	24,387	24,555	24,363
Weighted-average diluted shares outstanding	25,211	25,069	25,228	24,998

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 142,795	$ 42,420	$ 184,841	$ 79,083
Other comprehensive income:
Foreign currency translation adjustment	1,191	(6,424)	5,554	(10,126)
Change in fair value of interest rate swap agreements, net of tax	2,613	10,045	3,121	12,899
Other comprehensive income, net of tax	3,804	3,621	8,675	2,773
Comprehensive income	$ 146,599	$ 46,041	$ 193,516	$ 81,856

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Dec. 31, 2017		Jun. 30, 2017
Current assets:
Cash and cash equivalents	$ 56,328		$ 65,539
Accounts receivable, net	758,141		757,341
Prepaid expenses and other current assets	73,697		57,022
Total current assets	888,166		879,902
Goodwill	2,614,294		2,577,435
Intangible assets, net	244,072	[1]	235,371
Property and equipment, net	101,470		91,749
Supplemental retirement savings plan assets	91,755		91,367
Accounts receivable, long-term	8,177		7,886
Other long-term assets	36,199		27,372
Total assets	3,984,133		3,911,082
Current liabilities:
Current portion of long-term debt	80,947		53,965
Accounts payable	91,056		62,874
Accrued compensation and benefits	234,999		239,741
Other accrued expenses and current liabilities	166,359		170,164
Total current liabilities	573,361		526,744
Long-term debt, net of current portion	1,070,846		1,177,598
Supplemental retirement savings plan obligations, net of current portion	87,593		81,823
Deferred income taxes	192,688		273,320
Other long-term liabilities	72,825		57,876
Total liabilities	1,997,313		2,117,361
COMMITMENTS AND CONTINGENCIES
Shareholders’ equity:
Preferred stock $0.10 par value, 10,000 shares authorized, no shares issued or outstanding
Common stock $0.10 par value, 80,000 shares authorized; 42,059 shares issued and 24,625 outstanding at December 31, 2017 and 41,896 shares issued and 24,462 outstanding at June 30, 2017	4,206		4,190
Additional paid-in capital	568,646		569,080
Retained earnings	2,010,460		1,825,619
Accumulated other comprehensive loss	(20,441)		(29,116)
Treasury stock, at cost (17,434 and 17,435 shares, respectively)	(576,186)		(576,187)
Total CACI shareholders’ equity	1,986,685		1,793,586
Noncontrolling interest	135		135
Total shareholders’ equity	1,986,820		1,793,721
Total liabilities and shareholders’ equity	$ 3,984,133		$ 3,911,082

[1] During the six months ended December 31, 2017, the Company wrote off $250.7 million in fully amortized intangible assets.

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CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parentheticals) - $ / shares	Dec. 31, 2017	Jun. 30, 2017
Statement Of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.10	$ 0.10
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$ 0.10	$ 0.10
Common stock, shares authorized	80,000,000	80,000,000
Common stock, shares issued	42,059,000	41,896,000
Common stock, shares outstanding	24,625,000	24,462,000
Treasury stock, shares at cost	17,434,000	17,435,000

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$ 184,841	$ 79,083
Reconciliation of net income to net cash provided by operating activities:
Depreciation and amortization	35,846	36,195
Amortization of deferred financing costs	2,212	2,252
Loss on disposal of fixed assets		975
Stock-based compensation expense	12,389	10,557
Deferred income taxes	(83,212)	5,081
Equity in earnings of unconsolidated ventures		(103)
Changes in operating assets and liabilities, net of effect of business acquisitions:
Accounts receivable, net	7,367	71,080
Prepaid expenses and other assets	(10,107)	1,649
Accounts payable and other accrued expenses	15,190	(58,873)
Accrued compensation and benefits	(11,126)	(15,339)
Income taxes payable and receivable	(3,796)	(391)
Supplemental retirement savings plan obligations and other long-term liabilities	6,157	3,184
Net cash provided by operating activities	155,761	135,350
CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures	(22,013)	(21,826)
Cash paid for business acquisitions, net of cash acquired	(45,565)	(5,605)
Proceeds from net working capital refund of acquired business		13,619
Proceeds from equity method investments		4,681
Other	(183)	1,051
Net cash (used in) investing activities	(67,761)	(8,080)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings under bank credit facilities	256,500	240,500
Principal payments made under bank credit facilities	(338,483)	(338,991)
Payment of contingent consideration	(3,630)
Proceeds from employee stock purchase plans	2,459	2,262
Repurchases of common stock	(2,463)	(2,243)
Payment of taxes for equity transactions	(12,656)	(3,632)
Net cash used in financing activities	(98,273)	(102,104)
Effect of exchange rate changes on cash and cash equivalents	1,062	(1,598)
Net (decrease) increase in cash and cash equivalents	(9,211)	23,568
Cash and cash equivalents, beginning of period	65,539	49,082
Cash and cash equivalents, end of period	56,328	72,650
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for income taxes, net of refunds	35,264	41,273
Cash paid during the period for interest	20,505	22,512
Non-cash financing and investing activities:
Accrued capital expenditures	$ 3,316	$ 1,482

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Basis of Presentation

6 Months Ended

Dec. 31, 2017

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Presentation

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of CACI International Inc and subsidiaries (CACI or the Company) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and include the assets, liabilities, results of operations, comprehensive income and cash flows for the Company, including its subsidiaries and ventures that are majority-owned or otherwise controlled by the Company.  Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated in consolidation.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and amounts included in other current assets and current liabilities that meet the definition of a financial instrument approximate fair value because of the short-term nature of these amounts.  The fair value of the Company’s debt outstanding as of December 31, 2017 under its bank credit facility approximates its carrying value.  The fair value of the Company’s debt under its bank credit facility was estimated using Level 2 inputs based on market data of companies with a corporate rating similar to CACI’s that have recently priced credit facilities.  See Notes 6 and 12.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments and reclassifications (all of which are of a normal, recurring nature) that are necessary for the fair presentation of the periods presented.  It is suggested that these unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest annual report to the SEC on Form 10-K for the year ended June 30, 2017.  The results of operations for the three and six months ended December 31, 2017 are not necessarily indicative of the results to be expected for any subsequent interim period or for the full fiscal year.

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Recent Accounting Pronouncements

6 Months Ended

Dec. 31, 2017

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

Recent Accounting Pronouncements

2. Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-01, Clarifying the Definition of a Business, which revises the definition of a business and provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for the fiscal year, and interim periods within that fiscal year, beginning after December 15, 2017. The Company believes that the evaluation of whether transactions should be accounted for as acquisitions (or dispositions) of assets or businesses will be simplified under the new standard.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which amends the existing guidance on accounting for leases.  The new standard requires lessees to put virtually all leases on the balance sheet by recognizing lease assets and lease liabilities. Lessor accounting is largely unchanged from that applied under previous guidance. The amended guidance is effective for the fiscal year, and interim periods within that fiscal year, beginning after December 15, 2018, and requires a modified retrospective approach.  Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended (ASC 606), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. On July 9, 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09 to annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017, using either a full retrospective approach or a modified approach.

The Company plans to adopt the standard on July 1, 2018 and apply it on a modified retrospective basis, whereby the cumulative effect of applying the standard will be recognized through shareholders’ equity on the date of adoption.  We are in the process of identifying the changes to accounting policies, business processes, systems, disclosures, and controls to support the adoption of the new standard.

We expect the standard will impact the pattern of revenue recognition for some of our contracts with customers.  For our award and incentive fee contracts, we will recognize a constrained amount of variable consideration over time as the performance obligation is satisfied rather than defer recognition of the relevant portion of fee until customer notification of the amount earned.  Some of our fixed price contracts in which revenue is recognized on a straight-line basis over the performance period will be converted to recognition of revenue over time by measuring the progress toward complete satisfaction of the performance obligation using input methods, including cost and labor hours.  We do not anticipate a material impact to our cost-plus-fixed fee, fixed price/level-of-effort, time-and-materials, or fixed price contracts that currently use percentage-of-completion accounting.  

The cumulative catch-up adjustment that will be recorded through shareholders’ equity on July 1, 2018 is still being quantified.  We will continue evaluating the impact of the standard on our contract portfolio through the date of adoption.

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Acquisitions

6 Months Ended

Dec. 31, 2017

Business Combinations [Abstract]

Acquisitions

3. Acquisitions

Domestic Acquisition

On November 22, 2017, CACI acquired 100 percent of the outstanding membership interests of a business in the United States.  The acquisition was financed with cash on hand.  The purchase consideration is approximately $53.0 million, which includes a $40.1 million initial cash payment, $4.5 million of deferred consideration, $8.7 million estimated fair value of contingent consideration to be paid upon achieving certain metrics and a $0.3 million estimated refund due from the seller for a net working capital adjustment.  The Company recognized fair values of the assets acquired and liabilities assumed and preliminarily allocated $26.7 million to goodwill and $24.9 million to intangible assets. The intangible assets primarily consist of customer relationships and acquired technology.  The final purchase price is subject to customary adjustments for final working capital. The final purchase price allocation is provisional and is expected to be completed in the second quarter of FY2019, will be based on final appraisals and other analysis of fair values of acquired assets and liabilities. The Company does not expect that differences between the preliminary and final purchase price allocation will have a material impact on its results of operations or financial position.

International Acquisitions

On October 1, 2017, CACI Limited acquired 100 percent of the outstanding shares of a United Kingdom (U.K.) IT consulting services and software engineering company. The purchase consideration is approximately $9.1 million, which includes initial cash payments, deferred consideration and an estimated net working capital payment.

On November 1, 2017, CACI Limited acquired 100 percent of the outstanding shares of a London-based software and mapping data company. The company provides geographical information systems, logistics and route optimization software and related map data. The purchase consideration is approximately $7.5 million, which includes initial cash payments, deferred consideration and an estimated net working capital payment.

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Intangible Assets

6 Months Ended

Dec. 31, 2017

Finite Lived Intangible Assets Net [Abstract]

Intangible Assets

4. Intangible Assets

Intangible assets consisted of the following (in thousands):

	December 31,			June 30,
	2017 (1)			2017
Intangible assets
Customer contracts and related customer relationships	$	431,973		$	635,895
Acquired technologies		13,888			28,503
Covenants not to compete		—			3,305
Other		804			1,545
Intangible assets		446,665			669,248
Less accumulated amortization
Customer contracts and related customer relationships		(194,166	)		(402,934	)
Acquired technologies		(8,025	)		(26,542	)
Covenants not to compete		—			(3,288	)
Other		(402	)		(1,113	)
Less accumulated amortization		(202,593	)		(433,877	)
Total intangible assets, net	$	244,072		$	235,371

__________________

⁽¹⁾ During the six months ended December 31, 2017, the Company wrote off $250.7 million in fully amortized intangible assets.

Intangible assets are primarily amortized on an accelerated basis over periods ranging from one to twenty years.  The weighted-average period of amortization for all customer contracts and related customer relationships as of December 31, 2017 is 14.7 years, and the weighted-average remaining period of amortization is 11.7 years.  The weighted-average period of amortization for acquired technologies as of December 31, 2017 is 7.4 years, and the weighted-average remaining period of amortization is 6.4 years.

Expected amortization expense for the remainder of the fiscal year ending June 30, 2018, and for each of the fiscal years thereafter, is as follows (in thousands):

Fiscal year ending June 30,	Amount
2018 (six months)	$	18,854
2019		34,257
2020		29,651
2021		26,190
2022		22,613
Thereafter		112,507
Total intangible assets, net	$	244,072

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Goodwill

6 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill

5. Goodwill

The changes in the carrying amount of goodwill for the year ended June 30, 2017 and the six months ended December 31, 2017 are as follows (in thousands):

	Domestic			International			Total
Balance at June 30, 2016	$	2,487,148		$	98,195		$	2,585,343
Business acquisitions		(7,652	)		2,220			(5,432	)
Foreign currency translation		—			(2,476	)		(2,476	)
Balance at June 30, 2017		2,479,496			97,939			2,577,435
Business acquisitions		26,662			6,379			33,041
Foreign currency translation		—			3,818			3,818
Balance at December 31, 2017	$	2,506,158		$	108,136		$	2,614,294

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Long-term Debt

6 Months Ended

Dec. 31, 2017

Long Term Debt [Abstract]

Long-term Debt

6. Long-term Debt 

Long-term debt consisted of the following (in thousands):

	December 31,			June 30,
	2017			2017
Bank credit facility – term loans	$	951,885		$	978,867
Bank credit facility – revolver loans		210,000			265,000
Principal amount of long-term debt		1,161,885			1,243,867
Less unamortized debt issuance costs		(10,092	)		(12,304	)
Total long-term debt		1,151,793			1,231,563
Less current portion		(80,947	)		(53,965	)
Long-term debt, net of current portion	$	1,070,846		$	1,177,598

Bank Credit Facility

The Company has a $1,981.3 million credit facility (the Credit Facility), which consists of an $850.0 million revolving credit facility (the Revolving Facility) and a $1,131.3 million term loan (the Term Loan). The Revolving Facility has subfacilities of $100.0 million for same-day swing line loan borrowings and $25.0 million for stand-by letters of credit.  At any time and so long as no default has occurred, the Company has the right to increase the Revolving Facility or the Term Loan in an aggregate principal amount of up to the greater of $400.0 million or an amount subject to 2.75 times senior secured leverage, calculated assuming the Revolving Facility is fully drawn, with applicable lender approvals.  The Credit Facility is available to refinance existing indebtedness and for general corporate purposes, including working capital expenses and capital expenditures.

The Revolving Facility is a secured facility that permits continuously renewable borrowings of up to $850.0 million. As of December 31, 2017, the Company had $210.0 million outstanding under the Revolving Facility, no borrowings on the swing line and an outstanding letter of credit of $0.4 million.  The Company pays a quarterly facility fee for the unused portion of the Revolving Facility.

The Term Loan is a five-year secured facility under which principal payments are due in quarterly installments of $13.5 million through June 30, 2018 and $27.0 million thereafter until the balance is due in full on June 1, 2020. As of December 31, 2017, the Company had $951.9 million outstanding under the Term Loan.

The interest rates applicable to loans under the Credit Facility are floating interest rates that, at the Company’s option, equal a base rate or a Eurodollar rate plus, in each case, an applicable rate based upon the Company’s consolidated total leverage ratio.  As of December 31, 2017, the effective interest rate, including the impact of the Company’s floating-to-fixed interest rate swap agreements and excluding the effect of amortization of debt financing costs, for the outstanding borrowings under the Credit Facility was 3.36 percent.

The Credit Facility requires the Company to comply with certain financial covenants, including a maximum senior secured leverage ratio, a maximum total leverage ratio and a minimum fixed charge coverage ratio.  The Credit Facility also includes customary negative covenants restricting or limiting the Company’s ability to guarantee or incur additional indebtedness, grant liens or other security interests to third parties, make loans or investments, transfer assets, declare dividends or redeem or repurchase capital stock or make other distributions, prepay subordinated indebtedness and engage in mergers, acquisitions or other business combinations, in each case except as expressly permitted under the Credit Facility.  As of December 31, 2017, the Company was in compliance with all of the financial covenants.  A majority of the Company’s assets serve as collateral under the Credit Facility.

All debt issuance costs are being amortized from the date incurred to the expiration date of the Credit Facility. 

Cash Flow Hedges

The Company periodically uses derivative financial instruments as part of a strategy to manage exposure to market risks associated with interest rate fluctuations.  The Company has entered into several floating-to-fixed interest rate swap agreements for an aggregate notional amount of $800.0 million which hedge a portion of the Company’s floating rate indebtedness.  The swaps mature at various dates through 2022.  The Company has designated the swaps as cash flow hedges. Unrealized gains are recognized as assets while unrealized losses are recognized as liabilities. The interest rate swap agreements are highly correlated to the changes in interest rates to which the Company is exposed. Unrealized gains and losses on these swaps are designated as effective or ineffective. Realized gains and losses in connection with each required interest payment are reclassified from accumulated other comprehensive income or loss to interest expense.  The Company does not hold or issue derivative financial instruments for trading purposes.

The effect of derivative instruments in the consolidated statements of operations and accumulated other comprehensive loss for the three and six months ended December 31, 2017 and 2016 is as follows (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Gain (loss) recognized in other comprehensive income	$	1,867	$	7,920	$	1,521	$	8,525
Amounts reclassified to earnings from accumulated other    comprehensive loss		746		2,125		1,600		4,374
Net current period other comprehensive income	$	2,613	$	10,045	$	3,121	$	12,899

The aggregate maturities of long-term debt at December 31, 2017 are as follows (in thousands):

Twelve months ending December 31,
2018	$	80,947
2019		107,930
2020		973,008
Principal amount of long-term debt		1,161,885
Less unamortized debt issuance costs		(10,092	)
Total long-term debt	$	1,151,793

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Commitments and Contingencies

6 Months Ended

Dec. 31, 2017

Commitments And Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies

The Company is involved in various lawsuits, claims, and administrative proceedings arising in the normal course of business. Management is of the opinion that any liability or loss associated with such matters, either individually or in the aggregate, will not have a material adverse effect on the Company’s operations and liquidity.

Government Contracting

Payments to the Company on cost-plus-fee and time-and-materials contracts are subject to adjustment upon audit by the Defense Contract Audit Agency (DCAA) and other government agencies that do not utilize DCAA’s services.  The DCAA is nearing completion of audits of the Company’s incurred cost submissions for its fiscal years 2012 and 2013, and continues its audits of incurred cost submission for fiscal years 2011 through 2013 associated with CACI’s acquisition of National Security Solutions (NSS), a L-3 subsidiary.  In its efforts to bring its audits more current, DCAA has commenced audits of our incurred cost submission through our fiscal year 2016.  We are still negotiating the results of prior years’ audits with the respective cognizant contracting officers and believe our reserves for such are adequate. In the opinion of management, adjustments that may result from these audits and the audits not yet started are not expected to have a material effect on the Company’s financial position, results of operations, or cash flows as the Company has accrued its best estimate of potential disallowances. Additionally, the DCAA continually reviews the cost accounting and other practices of government contractors, including the Company. In the course of those reviews, cost accounting and other issues are identified, discussed and settled.

On March 26, 2012, the Company received a subpoena from the Defense Criminal Investigative Service seeking documents related to one of the Company’s contracts for the period of January 1, 2007 through March 26, 2012.  The Company has provided documents responsive to the subpoena and is cooperating fully with the government’s investigation.  The Company has accrued its current best estimate of the likely outcome within its estimated range of zero to $3.9 million.

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Stock-Based Compensation

6 Months Ended

Dec. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

8. Stock-Based Compensation

Stock-based compensation expense recognized, together with the income tax benefits recognized, is as follows (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Stock-based compensation related to RSUs included in    indirect costs and selling expense	$	6,038	$	5,660	$	12,389	$	10,557

Under the terms of the 2016 Amended and Restated Incentive Compensation Plan (the 2016 Plan), the Company may issue, among others, non-qualified stock options, restricted stock, RSUs, SSARs, and performance awards, collectively referred to herein as equity instruments. The 2016 Plan was approved by the Company’s stockholders in November 2016 and amended and restated the 2006 Stock Incentive Plan (the 2006 Plan) which was due to expire at the end of the ten-year period. Previous grants that were made under the 2006 Plan, and equity instruments granted prior to approval of the 2016 Plan continue to be governed by the terms of the 2006 Plan. During the periods presented all equity instrument grants were made in the form of RSUs.  Other than performance-based RSUs (PRSUs) which contain a market-based element, the fair value of RSU grants was determined based on the closing price of a share of the Company’s common stock on the date of grant. The fair value of RSUs with market-based vesting features was also measured on the grant date, but was done so using a binomial lattice model.

Annual grants under the 2016 Plan, and previously the 2006 Plan, are generally made to the Company’s key employees during the first quarter of the Company’s fiscal year and to members of the Company’s Board of Directors during the second quarter of the Company’s fiscal year. With the approval of its Chief Executive Officer, the Company also issues equity instruments to strategic new hires and to employees who have demonstrated superior performance.

In September 2014, the Company made its annual grant to key employees consisting of 180,570 PRSUs.  The final number of such PRSUs that are earned by participants and vest is based on the achievement of a specified earnings per share (EPS) for the year ended June 30, 2015 and on the average share price of Company stock for the 90 day period ending September 23, 2015, 2016 and 2017 as compared to the average share price for the 90 day period ended September 23, 2014.  The specified EPS for the year ended June 30, 2015 was met and the average share price of the Company’s stock for the 90 day periods ending September 23, 2015, 2016 and 2017 exceeded the average share price of the Company’s stock for the 90 day period ended September 23, 2014, resulting in an additional 63,642 RSUs earned by participants. 

In September 2015, the Company made its annual grant to key employees consisting of 208,160 PRSUs.  The final number of such PRSUs that are earned by participants and vest is based on the achievement of a specified EPS for the year ending June 30, 2016 and on the average share price of Company stock for the 90 day periods ending September 18, 2016, 2017 and 2018 as compared to the average share price for the 90 day period ended September 18, 2015.  The specified EPS for the year ended June 30, 2016 was met and the average share price of the Company’s stock for the 90 day period ending September 18, 2016 and 2017 exceeded the average share price of the Company’s stock for the 90 day period ended September 18, 2015, resulting in an additional 48,068 RSUs earned by participants.  

In September 2016, the Company made its annual grant to key employees consisting of 193,420 PRSUs.  The final number of such PRSUs that are earned by participants and vest is based on the achievement of a specified EPS for the year ended June 30, 2017 and on the average share price of Company stock for the 90 day period ending September 30, 2017, 2018 and 2019 as compared to the average share price for the 90 day period ended September 30, 2016.  The specified EPS for the year ended June 30, 2017 was met and the average share price of the Company’s stock for the 90 day period ending September 30, 2017 exceeded the average share price of the Company’s stock for the 90 day period ended September 30, 2016, resulting in an additional 21,824 RSUs earned by participants.

In September 2017, the Company made its annual grant to key employees consisting of 146,550 PRSUs.  The final number of such PRSUs that are earned by participants and vest is based on the achievement of a specified EPS for the year ended June 30, 2018 and on the average share price of Company stock for the 90 day period ending September 15, 2018, 2019 and 2020 as compared to the average share price for the 90 day period ended September 15, 2017.  If the specified EPS for the year ended June 30, 2018 is met and if the average share price of the Company’s stock for the 90 day period ending September 15, 2018, 2019 and 2020 exceeds the average share price of the Company’s stock for the 90 day period ended September 15, 2017 by 100 percent or more, then an additional 146,550 could be earned by participants.  This is the maximum number of additional RSUs that can be earned related to the September 2017 annual grant.  In addition to the performance and market conditions, there is a service vesting condition which stipulates that 50 percent of the earned award will vest on October 1, 2020 and 50 percent of the earned award will vest on October 1, 2021, in both cases dependent upon continuing service by the grantee as an employee of the Company, unless the grantee is eligible for earlier vesting upon retirement or certain other events.

As of December 31, 2017, the total number of shares authorized by shareholders for grants under the 2016 Plan and its predecessor plan is 1,200,000 plus any forfeitures from the 2006 Plan. The aggregate number of grants that may be made may exceed this approved amount as forfeited RSUs become available for future grants. As of December 31, 2017, cumulative grants of 311,387 equity instruments underlying the shares authorized have been awarded, and 79,330 of these instruments have been forfeited.

Activity related to RSUs during the six months ended December 31, 2017 is as follows:

	RSUs
Unvested at June 30, 2017		834,607
Granted		269,631
Vested		(256,589	)
Forfeited		(27,161	)
Unvested at December 31, 2017		820,488
Weighted-average grant date fair value for RSUs	$	145.94

As of December 31, 2017, there was $49.1 million of total unrecognized compensation costs related to RSUs scheduled to be recognized over a weighted-average period of 3.0 years.

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Earnings Per Share

6 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Earnings Per Share

9. Earnings Per Share

ASC 260, Earnings Per Share (ASC 260), requires dual presentation of basic and diluted earnings per share on the face of the income statement. Basic earnings per share excludes dilution and is computed by dividing income by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock but not securities that are anti-dilutive. Using the treasury stock method, diluted earnings per share include the incremental effect of RSUs that are no longer subject to a market or performance condition.  The PRSUs granted in September 2017 are excluded from the calculation of diluted earnings per share as the underlying shares are considered to be contingently issuable shares. These shares will be included in the calculation of diluted earnings per share beginning in the first reporting period in which the performance metric is achieved. The chart below shows the calculation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Net income	$	142,795	$	42,420	$	184,841	$	79,083
Weighted-average number of basic shares outstanding    during the period		24,622		24,387		24,555		24,363
Dilutive effect of RSUs after application of treasury    stock method		589		682		673		635
Weighted-average number of diluted shares outstanding    during the period		25,211		25,069		25,228		24,998
Basic earnings per share	$	5.80	$	1.74	$	7.53	$	3.25
Diluted earnings per share	$	5.66	$	1.69	$	7.33	$	3.16

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Income Taxes

6 Months Ended

Dec. 31, 2017

Income Tax Disclosure [Abstract]

Income Taxes

10. Income Taxes

The Company is subject to income taxes in the U.S. and various state and foreign jurisdictions. Tax statutes and regulations within each jurisdiction are subject to interpretation and require the application of significant judgment.  The Company is currently under examination by two state jurisdictions for the years 2010 through 2017 and one foreign jurisdiction for the years 2011 through 2015.  The Company does not expect resolution of these examinations to have a material impact on its results of operations, financial condition or cash flows.

The Company’s total liability for unrecognized tax benefits as of December 31, 2017 and June 30, 2017 was $1.9 million and $1.7 million, respectively. The $1.9 million unrecognized tax benefit at December 31, 2017, if recognized, would impact the Company’s effective tax rate.

The effective income tax rate for the three months ended December 31, 2017 decreased to (84.7) percent from 37.6 percent for the same period last year. The effective tax rate decreased primarily due to certain impacts of the Tax Cuts and Jobs Act (TCJA) discussed below.  The effective tax rate was also favorably affected by a benefit from the research and development tax credit and gains from the change in value of assets invested in corporate owned life insurance (COLI) policies.

The effective income tax rate for the six months ended December 31, 2017 decreased to (38.6) percent from 36.8 percent for the same period last year.  The effective tax rate decreased primarily due to certain impacts of the TCJA, discussed below.  The effective tax rate was also favorably affected by excess tax benefits from employee share-based payment awards under ASU 2016-09, a benefit from the research and development tax credit, and gains from the change in value of assets invested in corporate owned life insurance (COLI) policies.

Tax Cuts and Jobs Act

The Tax Cuts and Jobs Act (the “TCJA”) was enacted on December 22, 2017.  Among other things, the TCJA reduces the U.S. federal corporate tax rate from 35.0 percent to 21.0 percent effective on January 1, 2018.  The rate change is administratively effective at the beginning of our fiscal year, using a blended rate for the annual period.  As a result, the blended federal statutory tax rate for the year is 28.06 percent.  Additionally, the TCJA requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries that were previously tax deferred, creates new taxes on certain foreign-sourced earnings and changes or limits certain tax deductions and credits.  At December 31, 2017, we have not completed our accounting for the tax effects of enactment of the TCJA; however, as described below, we have made a reasonable estimate of the effects on our existing deferred tax balances and the one-time transition tax. For these items we recognized provisional amounts in income tax expense benefit as discussed below.

We remeasured deferred tax asset and liability balances at December 22, 2017 based on the rates at which they are expected to reverse in the future, which is generally 21.0 percent for reversals after FY2018 and a blended rate of 28.06 percent for reversals within FY2018. However, we are still analyzing certain aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax amounts. The provisional amount recorded related to the remeasurement of our net deferred tax liabilities was a $94.8 million reduction to income tax expense for the three and six months ended December 31, 2017.

The one-time transition tax is based on our total post-1986 earnings and profits (“E&P”) for which we have previously deferred from U.S. income taxes. We recorded a provisional amount for our one-time transition tax liability for our foreign subsidiaries, resulting in a $9.7 million increase in income tax expense for the three and six months ended December 31, 2017. The Company expects to pay this amount over eight years.  We have not yet completed our calculation of the total post-1986 foreign E&P for these foreign subsidiaries. Further, the transition tax is based in part on the amount of those earnings held in cash and other specified assets. This amount may change when we finalize the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets. No additional income taxes have been provided for any remaining undistributed foreign earnings not subject to the transition tax and any additional outside basis difference inherent in these entities as these amounts continue to be indefinitely reinvested in foreign operations.

The Company will continue to analyze the TCJA to determine the full effects of the new law, including the new lower corporate tax rate, international provisions, and the impact of the TCJA on the 162(m) limitations on its financial condition and results of operations.  Additionally, the Company will continue to monitor various state law changes in reaction to the TCJA as changes are enacted.  

The overall impact of the TCJA on our results of operations was a $92.3 million reduction to tax expense for the three and six months ended December 31, 2017.  The corresponding increase in diluted earnings per share was $3.66 for the three and six months ended December 31, 2017, respectively.

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Business Segment Information

6 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Business Segment Information

11. Business Segment Information

The Company reports operating results and financial data in two segments: domestic operations and international operations. Domestic operations provide information solutions and services to its customers. Its customers are primarily U.S. federal government agencies. Other customers of the Company’s domestic operations include commercial enterprises.  The Company places employees in locations around the world in support of its clients. International operations offer services to both commercial and non-U.S. government customers primarily within the Company’s business systems and enterprise IT markets. The Company evaluates the performance of its operating segments based on net income. Summarized financial information concerning the Company’s reportable segments is as follows (in thousands):

	Domestic Operations		International Operations		Total
Three Months Ended December 31, 2017
Revenue from external customers	$	1,046,823	$	41,037	$	1,087,860
Net income		138,930		3,865		142,795
Three Months Ended December 31, 2016
Revenue from external customers	$	1,024,025	$	33,505	$	1,057,530
Net income		38,732		3,688		42,420
Six Months Ended December 31, 2017
Revenue from external customers	$	2,097,706	$	75,968	$	2,173,674
Net income attributable to CACI		177,763		7,078		184,841
Six Months Ended December 31, 2016
Revenue from external customers	$	2,062,916	$	67,894	$	2,130,810
Net income attributable to CACI		72,374		6,709		79,083

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Fair Value of Financial Instruments

6 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

12. Fair Value of Financial Instruments

ASC 820, Fair Value Measurements and Disclosures, defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements.  Fair value is the price that would be received to sell an asset or paid to transfer a liability between market participants in an orderly transaction.  The market in which the reporting entity would sell the asset or transfer the liability with the greatest volume and level of activity for the asset or liability is known as the principal market.  When no principal market exists, the most advantageous market is used.  This is the market in which the reporting entity would sell the asset or transfer the liability with the price that maximizes the amount that would be received or minimizes the amount that would be paid.  Fair value is based on assumptions market participants would make in pricing the asset or liability.  Generally, fair value is based on observable quoted market prices or derived from observable market data when such market prices or data are available.  When such prices or inputs are not available, the reporting entity should use valuation models.

The Company’s financial assets and liabilities recorded at fair value on a recurring basis are categorized based on the priority of the inputs used to measure fair value. The inputs used in measuring fair value are categorized into three levels, as follows:

• Level 1 Inputs – unadjusted quoted prices in active markets for identical assets or liabilities.

• Level 2 Inputs – unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

• Level 3 Inputs – amounts derived from valuation models in which unobservable inputs reflect the reporting entity’s own assumptions about the assumptions of market participants that would be used in pricing the asset or liability.

The Company’s financial instruments measured at fair value included interest rate swap agreements and contingent consideration in connection with business combinations.  The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and June 30, 2017, and the level they fall within the fair value hierarchy (in thousands):

			December 31,		June 30,
	Financial Statement	Fair Value	2017		2017
Description of Financial Instrument	Classification	Hierarchy	Fair Value
Contingent consideration	Other accrued expenses and    current liabilities	Level 3	$	9,600	$	14,889
Contingent consideration	Other long-term liabilities	Level 3	$	9,100	$	658
Interest rate swap agreements	Other long-term assets	Level 2	$	8,121	$	5,559
Interest rate swap agreements	Other accrued expenses and    current liabilities	Level 2	$	23	$	3
Interest rate swap agreements	Other long-term liabilities	Level 2	$	506	$	3,110

Changes in the fair value of the interest rate swap agreements are recorded as a component of accumulated other comprehensive income or loss.

Various acquisitions completed during prior fiscal years contained provisions requiring that the Company pay contingent consideration in the event the acquired businesses achieved certain specified earnings results during the two and three year periods subsequent to each acquisition.  The Company determined the fair value of the contingent consideration as of each acquisition date using a valuation model which included the evaluation of the most likely outcome and the application of an appropriate discount rate.  At the end of each reporting period, the fair value of the contingent consideration was remeasured and any changes were recorded in indirect costs and selling expenses.  During the three and six months ended December 31, 2017 this remeasurement resulted in a $1.1 million and $2.0 million change to the liability recorded.

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Accounting Policies (Policies)

6 Months Ended

Dec. 31, 2017

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements of CACI International Inc and subsidiaries (CACI or the Company) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (SEC) and include the assets, liabilities, results of operations, comprehensive income and cash flows for the Company, including its subsidiaries and ventures that are majority-owned or otherwise controlled by the Company.  Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (GAAP) have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information presented not misleading. All intercompany balances and transactions have been eliminated in consolidation.

The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and amounts included in other current assets and current liabilities that meet the definition of a financial instrument approximate fair value because of the short-term nature of these amounts.  The fair value of the Company’s debt outstanding as of December 31, 2017 under its bank credit facility approximates its carrying value.  The fair value of the Company’s debt under its bank credit facility was estimated using Level 2 inputs based on market data of companies with a corporate rating similar to CACI’s that have recently priced credit facilities.  See Notes 6 and 12.

In the opinion of management, the accompanying unaudited consolidated financial statements reflect all adjustments and reclassifications (all of which are of a normal, recurring nature) that are necessary for the fair presentation of the periods presented.  It is suggested that these unaudited consolidated financial statements be read in conjunction with the audited consolidated financial statements and the notes thereto included in the Company’s latest annual report to the SEC on Form 10-K for the year ended June 30, 2017.  The results of operations for the three and six months ended December 31, 2017 are not necessarily indicative of the results to be expected for any subsequent interim period or for the full fiscal year.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In January 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-01, Clarifying the Definition of a Business, which revises the definition of a business and provides guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The guidance is effective for the fiscal year, and interim periods within that fiscal year, beginning after December 15, 2017. The Company believes that the evaluation of whether transactions should be accounted for as acquisitions (or dispositions) of assets or businesses will be simplified under the new standard.

In February 2016, the FASB issued ASU No. 2016-02, Leases, which amends the existing guidance on accounting for leases.  The new standard requires lessees to put virtually all leases on the balance sheet by recognizing lease assets and lease liabilities. Lessor accounting is largely unchanged from that applied under previous guidance. The amended guidance is effective for the fiscal year, and interim periods within that fiscal year, beginning after December 15, 2018, and requires a modified retrospective approach.  Early adoption is permitted. The Company is currently evaluating the impact of the adoption of this standard on its consolidated financial statements.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, as amended (ASC 606), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five-step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. On July 9, 2015, the FASB approved a one-year deferral of the effective date of ASU 2014-09 to annual reporting periods, including interim reporting periods within those periods, beginning after December 15, 2017, using either a full retrospective approach or a modified approach.

The Company plans to adopt the standard on July 1, 2018 and apply it on a modified retrospective basis, whereby the cumulative effect of applying the standard will be recognized through shareholders’ equity on the date of adoption.  We are in the process of identifying the changes to accounting policies, business processes, systems, disclosures, and controls to support the adoption of the new standard.

We expect the standard will impact the pattern of revenue recognition for some of our contracts with customers.  For our award and incentive fee contracts, we will recognize a constrained amount of variable consideration over time as the performance obligation is satisfied rather than defer recognition of the relevant portion of fee until customer notification of the amount earned.  Some of our fixed price contracts in which revenue is recognized on a straight-line basis over the performance period will be converted to recognition of revenue over time by measuring the progress toward complete satisfaction of the performance obligation using input methods, including cost and labor hours.  We do not anticipate a material impact to our cost-plus-fixed fee, fixed price/level-of-effort, time-and-materials, or fixed price contracts that currently use percentage-of-completion accounting.  

The cumulative catch-up adjustment that will be recorded through shareholders’ equity on July 1, 2018 is still being quantified.  We will continue evaluating the impact of the standard on our contract portfolio through the date of adoption.

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Intangible Assets (Tables)

6 Months Ended

Dec. 31, 2017

Finite Lived Intangible Assets Net [Abstract]

Schedule of Intangible Assets

Intangible assets consisted of the following (in thousands):

	December 31,			June 30,
	2017 (1)			2017
Intangible assets
Customer contracts and related customer relationships	$	431,973		$	635,895
Acquired technologies		13,888			28,503
Covenants not to compete		—			3,305
Other		804			1,545
Intangible assets		446,665			669,248
Less accumulated amortization
Customer contracts and related customer relationships		(194,166	)		(402,934	)
Acquired technologies		(8,025	)		(26,542	)
Covenants not to compete		—			(3,288	)
Other		(402	)		(1,113	)
Less accumulated amortization		(202,593	)		(433,877	)
Total intangible assets, net	$	244,072		$	235,371

__________________

⁽¹⁾ During the six months ended December 31, 2017, the Company wrote off $250.7 million in fully amortized intangible assets.

Expected Amortization Expense

Expected amortization expense for the remainder of the fiscal year ending June 30, 2018, and for each of the fiscal years thereafter, is as follows (in thousands):

Fiscal year ending June 30,	Amount
2018 (six months)	$	18,854
2019		34,257
2020		29,651
2021		26,190
2022		22,613
Thereafter		112,507
Total intangible assets, net	$	244,072

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Goodwill (Tables)

6 Months Ended

Dec. 31, 2017

Goodwill And Intangible Assets Disclosure [Abstract]

Rollforward of Goodwill

The changes in the carrying amount of goodwill for the year ended June 30, 2017 and the six months ended December 31, 2017 are as follows (in thousands):

	Domestic			International			Total
Balance at June 30, 2016	$	2,487,148		$	98,195		$	2,585,343
Business acquisitions		(7,652	)		2,220			(5,432	)
Foreign currency translation		—			(2,476	)		(2,476	)
Balance at June 30, 2017		2,479,496			97,939			2,577,435
Business acquisitions		26,662			6,379			33,041
Foreign currency translation		—			3,818			3,818
Balance at December 31, 2017	$	2,506,158		$	108,136		$	2,614,294

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Long-term Debt (Tables)

6 Months Ended

Dec. 31, 2017

Long Term Debt [Abstract]

Schedule of Long-term Debt

Long-term debt consisted of the following (in thousands):

	December 31,			June 30,
	2017			2017
Bank credit facility – term loans	$	951,885		$	978,867
Bank credit facility – revolver loans		210,000			265,000
Principal amount of long-term debt		1,161,885			1,243,867
Less unamortized debt issuance costs		(10,092	)		(12,304	)
Total long-term debt		1,151,793			1,231,563
Less current portion		(80,947	)		(53,965	)
Long-term debt, net of current portion	$	1,070,846		$	1,177,598

Cash Flow Hedges

The effect of derivative instruments in the consolidated statements of operations and accumulated other comprehensive loss for the three and six months ended December 31, 2017 and 2016 is as follows (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Gain (loss) recognized in other comprehensive income	$	1,867	$	7,920	$	1,521	$	8,525
Amounts reclassified to earnings from accumulated other    comprehensive loss		746		2,125		1,600		4,374
Net current period other comprehensive income	$	2,613	$	10,045	$	3,121	$	12,899

Aggregate Maturities of Long-term Debt

The aggregate maturities of long-term debt at December 31, 2017 are as follows (in thousands):

Twelve months ending December 31,
2018	$	80,947
2019		107,930
2020		973,008
Principal amount of long-term debt		1,161,885
Less unamortized debt issuance costs		(10,092	)
Total long-term debt	$	1,151,793

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Stock-Based Compensation (Tables)

6 Months Ended

Dec. 31, 2017

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation Expense and Related Tax Benefits Recognized

Stock-based compensation expense recognized, together with the income tax benefits recognized, is as follows (in thousands):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Stock-based compensation related to RSUs included in    indirect costs and selling expense	$	6,038	$	5,660	$	12,389	$	10,557

Summary of Activity Related to RSUs

Activity related to RSUs during the six months ended December 31, 2017 is as follows:

	RSUs
Unvested at June 30, 2017		834,607
Granted		269,631
Vested		(256,589	)
Forfeited		(27,161	)
Unvested at December 31, 2017		820,488
Weighted-average grant date fair value for RSUs	$	145.94

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Earnings Per Share (Tables)

6 Months Ended

Dec. 31, 2017

Earnings Per Share [Abstract]

Calculation of Basic and Diluted Earnings per Share

The chart below shows the calculation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended				Six Months Ended
	December 31,				December 31,
	2017		2016		2017		2016
Net income	$	142,795	$	42,420	$	184,841	$	79,083
Weighted-average number of basic shares outstanding    during the period		24,622		24,387		24,555		24,363
Dilutive effect of RSUs after application of treasury    stock method		589		682		673		635
Weighted-average number of diluted shares outstanding    during the period		25,211		25,069		25,228		24,998
Basic earnings per share	$	5.80	$	1.74	$	7.53	$	3.25
Diluted earnings per share	$	5.66	$	1.69	$	7.33	$	3.16

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Business Segment Information (Tables)

6 Months Ended

Dec. 31, 2017

Segment Reporting [Abstract]

Summarized Financial Information of Reportable Segments

Summarized financial information concerning the Company’s reportable segments is as follows (in thousands):

	Domestic Operations		International Operations		Total
Three Months Ended December 31, 2017
Revenue from external customers	$	1,046,823	$	41,037	$	1,087,860
Net income		138,930		3,865		142,795
Three Months Ended December 31, 2016
Revenue from external customers	$	1,024,025	$	33,505	$	1,057,530
Net income		38,732		3,688		42,420
Six Months Ended December 31, 2017
Revenue from external customers	$	2,097,706	$	75,968	$	2,173,674
Net income attributable to CACI		177,763		7,078		184,841
Six Months Ended December 31, 2016
Revenue from external customers	$	2,062,916	$	67,894	$	2,130,810
Net income attributable to CACI		72,374		6,709		79,083

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Dec. 31, 2017

Fair Value Disclosures [Abstract]

Recurring Fair Value Measurements

The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2017 and June 30, 2017, and the level they fall within the fair value hierarchy (in thousands):

			December 31,		June 30,
	Financial Statement	Fair Value	2017		2017
Description of Financial Instrument	Classification	Hierarchy	Fair Value
Contingent consideration	Other accrued expenses and    current liabilities	Level 3	$	9,600	$	14,889
Contingent consideration	Other long-term liabilities	Level 3	$	9,100	$	658
Interest rate swap agreements	Other long-term assets	Level 2	$	8,121	$	5,559
Interest rate swap agreements	Other accrued expenses and    current liabilities	Level 2	$	23	$	3
Interest rate swap agreements	Other long-term liabilities	Level 2	$	506	$	3,110

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Acquisitions (Detail Textual) - USD ($) $ in Thousands				6 Months Ended
	Nov. 22, 2017	Nov. 01, 2017	Oct. 01, 2017	Dec. 31, 2017	Jun. 30, 2017	Jun. 30, 2016
Business Acquisition [Line Items]
Goodwill				$ 2,614,294	$ 2,577,435	$ 2,585,343
Domestic Acquisition
Business Acquisition [Line Items]
Acquisition date				Nov. 22, 2017
Percentage of membership interests acquired	100.00%
Purchase consideration	$ 53,000
Cash consideration	40,100
Deferred consideration	4,500
Contingent consideration	8,700
Consideration, net working capital adjustment	300
Goodwill	26,700
Identifiable intangible assets	$ 24,900
United Kingdom IT Consulting Services and Software Engineering Company
Business Acquisition [Line Items]
Acquisition date				Oct. 01, 2017
Purchase consideration			$ 9,100
Percentage of outstanding shares acquired			100.00%
London-Based Software and Mapping Data Company
Business Acquisition [Line Items]
Acquisition date				Nov. 01, 2017
Purchase consideration		$ 7,500
Percentage of outstanding shares acquired		100.00%

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Intangible Assets - Summary of Intangible Assets (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	[1]	Jun. 30, 2017
Finite Lived Intangible Assets [Line Items]
Intangible assets	$ 446,665		$ 669,248
Less accumulated amortization	(202,593)		(433,877)
Total intangible assets, net	244,072		235,371
Customer contracts and related customer relationships
Finite Lived Intangible Assets [Line Items]
Intangible assets	431,973		635,895
Less accumulated amortization	(194,166)		(402,934)
Acquired technologies
Finite Lived Intangible Assets [Line Items]
Intangible assets	13,888		28,503
Less accumulated amortization	(8,025)		(26,542)
Covenants not to compete
Finite Lived Intangible Assets [Line Items]
Intangible assets			3,305
Less accumulated amortization			(3,288)
Other
Finite Lived Intangible Assets [Line Items]
Intangible assets	804		1,545
Less accumulated amortization	$ (402)		$ (1,113)

[1] During the six months ended December 31, 2017, the Company wrote off $250.7 million in fully amortized intangible assets.

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Intangible Assets - Summary of Intangible Assets (Parenthetical) (Detail) $ in Millions	6 Months Ended
	Dec. 31, 2017 USD ($)
Finite Lived Intangible Assets Net [Abstract]
Write-off of fully amortized intangible assets	$ 250.7

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Intangible Assets (Detail Textual)	6 Months Ended
	Dec. 31, 2017
Minimum
Finite Lived Intangible Assets [Line Items]
Intangible asset amortization period	1 year
Maximum
Finite Lived Intangible Assets [Line Items]
Intangible asset amortization period	20 years
Customer contracts and related customer relationships
Finite Lived Intangible Assets [Line Items]
Weighted-average amortization period	14 years 8 months 13 days
Weighted-average remaining amortization period	7 years 4 months 25 days
Acquired technologies
Finite Lived Intangible Assets [Line Items]
Weighted-average amortization period	11 years 8 months 13 days
Weighted-average remaining amortization period	6 years 4 months 25 days

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Intangible Assets - Expected Amortization Expense (Detail) - USD ($) $ in Thousands	Dec. 31, 2017		Jun. 30, 2017
Finite Lived Intangible Assets Net [Abstract]
2018 (six months)	$ 18,854
2019	34,257
2020	29,651
2021	26,190
2022	22,613
Thereafter	112,507
Total intangible assets, net	$ 244,072	[1]	$ 235,371

[1] During the six months ended December 31, 2017, the Company wrote off $250.7 million in fully amortized intangible assets.

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Goodwill - Rollforward of Goodwill (Detail) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Dec. 31, 2017	Jun. 30, 2017
Goodwill [Roll Forward]
Balance	$ 2,577,435	$ 2,585,343
Business acquisitions	33,041	(5,432)
Foreign currency translation	3,818	(2,476)
Balance	2,614,294	2,577,435
Domestic
Goodwill [Roll Forward]
Balance	2,479,496	2,487,148
Business acquisitions	26,662	(7,652)
Balance	2,506,158	2,479,496
International
Goodwill [Roll Forward]
Balance	97,939	98,195
Business acquisitions	6,379	2,220
Foreign currency translation	3,818	(2,476)
Balance	$ 108,136	$ 97,939

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Long-term Debt - Schedule of Long-term Debt (Detail) - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
Debt Instrument [Line Items]
Principal amount of long-term debt	$ 1,161,885	$ 1,243,867
Less unamortized debt issuance costs	(10,092)	(12,304)
Total long-term debt	1,151,793	1,231,563
Less current portion	(80,947)	(53,965)
Long-term debt, net of current portion	1,070,846	1,177,598
Bank credit facility - term loans
Debt Instrument [Line Items]
Principal amount of long-term debt	951,885	978,867
Bank credit facility - revolver loans
Debt Instrument [Line Items]
Principal amount of long-term debt	$ 210,000	$ 265,000

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Long-term Debt (Detail Textual) - USD ($)	6 Months Ended
	Dec. 31, 2017	Jun. 30, 2017
Debt Instrument [Line Items]
Outstanding amount under Credit Facility	$ 1,161,885,000	$ 1,243,867,000
Interest Rate Swap | Cash Flow Hedging
Debt Instrument [Line Items]
Aggregate notional amount	800,000,000
Bank Credit Facility
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	$ 1,981,300,000
Credit facility borrowing capacity, description	At any time and so long as no default has occurred, the Company has the right to increase the Revolving Facility or the Term Loan in an aggregate principal amount of up to the greater of $400.0 million or an amount subject to 2.75 times senior secured leverage, calculated assuming the Revolving Facility is fully drawn, with applicable lender approvals.
Credit Facility optional increases to borrowing capacity	$ 400,000,000
Ratio that restricts optional increases to borrowing capacity	275.00%
Outstanding borrowings interest rate	3.36%
Revolving Credit Facility
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	$ 850,000,000
Outstanding amount under Credit Facility	210,000,000	265,000,000
Term loans
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	1,131,300,000
Outstanding amount under Credit Facility	$ 951,885,000	$ 978,867,000
Term loan period	5 years
Loan maturity date	Jun. 01, 2020
Term loan frequency of payment	quarterly
Term loans | Principal Payment Through June 30, 2018
Debt Instrument [Line Items]
Term loan principal payment	$ 13,500,000
Term loans | Principal Payment Thereafter June 30, 2018
Debt Instrument [Line Items]
Term loan principal payment	27,000,000
Same-Day Swing Line Loan Revolving Credit Sub Facility
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	100,000,000
Outstanding amount under Credit Facility	0
Stand-By Letters Of Credit Revolving Credit Sub Facility
Debt Instrument [Line Items]
Credit facility maximum borrowing capacity	25,000,000
Outstanding Letters of Credit	$ 400,000

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Long-term Debt - Cash Flow Hedges (Detail 2) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Long Term Debt [Abstract]
Gain (loss) recognized in other comprehensive income	$ 1,867	$ 7,920	$ 1,521	$ 8,525
Amounts reclassified to earnings from accumulated other comprehensive loss	746	2,125	1,600	4,374
Net current period other comprehensive income	$ 2,613	$ 10,045	$ 3,121	$ 12,899

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Long-term Debt - Aggregate Maturities of Long-Term Debt (Detail 3) - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
Long Term Debt [Abstract]
2018	$ 80,947
2019	107,930
2020	973,008
Principal amount of long-term debt	1,161,885	$ 1,243,867
Less unamortized debt issuance costs	(10,092)	(12,304)
Total long-term debt	$ 1,151,793	$ 1,231,563

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Commitments and Contingencies (Detail Textual) - Government Contracting	Dec. 31, 2017 USD ($)
Minimum
Loss Contingencies [Line Items]
Estimated amount of possible loss	$ 0
Maximum
Loss Contingencies [Line Items]
Estimated amount of possible loss	$ 3,900,000

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Stock-Based Compensation - Expense and Related Tax Benefits Recognized (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Stock-based compensation included in indirect costs and selling expense:
Stock-based compensation related to RSUs included in indirect costs and selling expense	$ 6,038	$ 5,660	$ 12,389	$ 10,557

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Stock-Based Compensation (Detail Textual) $ in Millions	6 Months Ended
	Dec. 31, 2017 USD ($) shares
PRSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Period to establish average share price for performance measurement	90 days
PRSUs | September 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PRSUs granted	180,570
Additional PRSUs earned pursuant to condition	63,642
PRSUs | September 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PRSUs granted	208,160
Additional PRSUs earned pursuant to condition	48,068
PRSUs | September 2016
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PRSUs granted	193,420
Additional PRSUs earned pursuant to condition	21,824
PRSUs | September 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PRSUs granted	146,550
Potential additional PRSUs to be earned pursuant to condition	146,550
Percentage of earned award vesting after three years	50.00%
Percentage of earned award vesting after four years	50.00%
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PRSUs granted	269,631
Unrecognized compensation cost | $	$ 49.1
Weighted-average period to recognize unrecognized compensation cost (in years)	3 years
2006 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock incentive plan, expiration period	10 years
2016 Plan
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares authorized for grants	1,200,000
Cumulative equity instruments awarded	311,387
Cumulative equity instruments forfeited	79,330

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Stock-Based Compensation - Summary of Activity Related to RSUs (Detail 1) - RSUs	6 Months Ended
	Dec. 31, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested at June 30, 2017	834,607
Granted	269,631
Vested	(256,589)
Forfeited	(27,161)
Unvested at December 31, 2017	820,488
Weighted-average grant date fair value for RSUs | $ / shares	$ 145.94

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Earnings Per Share - Calculation of Basic and Diluted Earnings per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Earnings Per Share [Abstract]
Net income	$ 142,795	$ 42,420	$ 184,841	$ 79,083
Weighted-average number of basic shares outstanding during the period	24,622	24,387	24,555	24,363
Dilutive effect of RSUs after application of treasury stock method	589	682	673	635
Weighted-average number of diluted shares outstanding during the period	25,211	25,069	25,228	24,998
Basic earnings per share	$ 5.80	$ 1.74	$ 7.53	$ 3.25
Diluted earnings per share	$ 5.66	$ 1.69	$ 7.33	$ 3.16

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Income Taxes (Detail Textual) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended		6 Months Ended
	Dec. 22, 2017	Dec. 21, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Jun. 30, 2017
Income Tax [Line Items]
Liability for unrecognized tax benefits			$ 1.9		$ 1.9		$ 1.7
Unrecognized tax benefit that would impact the company's effective tax rate			$ 1.9		$ 1.9
Effective tax rate, percentage			(84.70%)	37.60%	(38.60%)	36.80%
Statutory U.S. Income Tax Rate	28.06%	35.00%
TCJA remeasurement of net deferred tax liabilities			$ (94.8)		$ (94.8)
TCJA one-time transition tax liability			9.7		$ 9.7
TCJA one-time transition tax liability payment term					8 years
TCJA overall impact on results of operations			$ (92.3)		$ (92.3)
TCJA overall impact on diluted earnings per share			$ 3.66		$ 3.66
FY 2019 [Member]
Income Tax [Line Items]
Statutory U.S. Income Tax Rate	21.00%

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Business Segment Information (Detail Textual)	6 Months Ended
	Dec. 31, 2017 Segment
Segment Reporting [Abstract]
Number of reportable segments	2

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Business Segment Information - Summarized Financial Information of Reportable Segments (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2017	Dec. 31, 2016
Segment Reporting Information [Line Items]
Revenue from external customers	$ 1,087,860	$ 1,057,530	$ 2,173,674	$ 2,130,810
Net income	142,795	42,420	184,841	79,083
Domestic Operations
Segment Reporting Information [Line Items]
Revenue from external customers	1,046,823	1,024,025	2,097,706	2,062,916
Net income	138,930	38,732	177,763	72,374
International Operations
Segment Reporting Information [Line Items]
Revenue from external customers	41,037	33,505	75,968	67,894
Net income	$ 3,865	$ 3,688	$ 7,078	$ 6,709

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Fair Value of Financial Instruments - Recurring Fair Value Measurements (Detail) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Dec. 31, 2017	Jun. 30, 2017
Other accrued expenses and current liabilities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	$ 9,600	$ 14,889
Other accrued expenses and current liabilities | Level 2 | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap agreements	23	3
Other long-term liabilities | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Contingent consideration	9,100	658
Other long-term liabilities | Level 2 | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap agreements	506	3,110
Other long-term assets | Level 2 | Interest Rate Swap
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Interest rate swap agreements	$ 8,121	$ 5,559

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Fair Value of Financial Instruments (Detail Textual) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Dec. 31, 2017	Dec. 31, 2017
Fair Value Disclosures [Abstract]
Business combination contingent consideration period		two and three year periods
Change in fair value of contingent consideration	$ (1.1)	$ (2.0)