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Revenue Recognition
3 Months Ended
Mar. 31, 2019
Disaggregation Of Revenue [Abstract]  
Revenue Recognition

NOTE 9 – REVENUE RECOGNITION

Disaggregation of Revenue

The Company disaggregates revenue from clients, most of which is earned over time, into categories that depict how the nature, amount and uncertainty of revenue and cash flows are affected by economic factors. Those categories are client market, client type and contract mix. Client market revenue information provides insight into the breadth of the Company’s expertise. In classifying revenue by client market, the Company attributes revenue from a client to the market that the Company believes is the client’s primary market. The Company also classifies revenue by the type of entity for which it does business, which is an indicator of the diversity of its client base. The Company attributes revenue generated as a subcontractor to a commercial company as government revenue when the ultimate client is a government agency or department. Finally, disaggregation by contract mix provides insight in terms of the degree of performance risk that the Company has assumed. Fixed-price contracts are considered to provide the highest amount of performance risk as the Company is required to deliver a scope of work or level of effort for a negotiated fixed price. Time-and-materials contracts require the Company to provide skilled employees on contracts for negotiated fixed hourly rates. Since the Company is not required to deliver a scope of work, but merely skilled employees, it considers these contracts to be less risky than a fixed-price agreement. Cost-based contracts are considered to provide the lowest amount of performance risk since the Company is generally reimbursed for all contract costs incurred in performance of contract deliverables with only the amount of incentive or award fees (if applicable) dependent on the achievement of negotiated performance requirements.  

Increases in revenue from energy, environment, and infrastructure client markets, and U.S. state and local governments in the three months ended March 31, 2019 compared to the prior year period were primarily due to work performed on disaster recovery and relief efforts which also caused an increase in revenue generated through time-and-materials contracts. Consumer and financial client market revenue increased primarily due to acquisitions during the prior year.

 

 

Three Months Ended

 

 

March 31, 2019

 

 

March 31, 2018

 

 

Dollars

 

 

Percent

 

 

Dollars

 

 

Percent

 

Client Markets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Energy, environment, and infrastructure

$

153,651

 

 

 

45

%

 

$

124,250

 

 

 

41

%

Health, education, and social programs

 

121,337

 

 

 

35

%

 

 

122,928

 

 

 

41

%

Safety and security

 

29,052

 

 

 

9

%

 

 

25,475

 

 

 

8

%

Consumer and financial

 

37,214

 

 

 

11

%

 

 

30,127

 

 

 

10

%

Total

$

341,254

 

 

 

100

%

 

$

302,780

 

 

 

100

%

 

 

Three Months Ended

 

 

March 31, 2019

 

 

March 31, 2018

 

 

Dollars

 

 

Percent

 

 

Dollars

 

 

Percent

 

Client Type:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

U.S. federal government

$

131,823

 

 

 

39

%

 

$

134,185

 

 

 

44

%

U.S. state and local government

 

65,522

 

 

 

19

%

 

 

31,313

 

 

 

10

%

International government

 

27,158

 

 

 

8

%

 

 

28,767

 

 

 

10

%

Total Government

 

224,503

 

 

 

66

%

 

 

194,265

 

 

 

64

%

Commercial

 

116,751

 

 

 

34

%

 

 

108,515

 

 

 

36

%

Total

$

341,254

 

 

 

100

%

 

$

302,780

 

 

 

100

%

 

 

Three Months Ended

 

 

March 31, 2019

 

 

March 31, 2018

 

 

Dollars

 

 

Percent

 

 

Dollars

 

 

Percent

 

Contract Mix:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fixed-price

$

133,534

 

 

 

39

%

 

$

122,328

 

 

 

40

%

Time-and-materials

 

156,347

 

 

 

46

%

 

 

124,342

 

 

 

41

%

Cost-based

 

51,373

 

 

 

15

%

 

 

56,110

 

 

 

19

%

Total

$

341,254

 

 

 

100

%

 

$

302,780

 

 

 

100

%

Contract Balances:

Contract assets consist primarily of unbilled amounts resulting from long-term contracts when revenue recognized exceeds the amount billed often due to billing schedule timing. Contract liabilities result from advance payments received on a contract or from billings in excess of revenue recognized on long-term contracts due to billing schedule timing. The net contact assets (liabilities) increased $22.7 million due primarily to increases in contract assets offset partially by increases in contract liabilities. The increase in contract assets is primarily due to hurricane relief and rebuild work for U.S. state and local governments, which is considered part of the energy, environment and infrastructure client market, and most of which has been performed on time-and-materials agreements. There were no material changes to contract balances due to impairments or business combinations during the period.

 

 

March 31, 2019

 

 

December 31, 2018

 

 

$ Change

 

 

% Change

 

Contract assets

$

151,805

 

 

$

126,688

 

 

$

25,117

 

 

 

19.8

%

Contract liabilities

 

(35,936

)

 

 

(33,494

)

 

 

(2,442

)

 

 

7.3

%

Net contract assets (liabilities)

$

115,869

 

 

$

93,194

 

 

$

22,675

 

 

 

24.3

%

Performance Obligations:

The Company had $1.4 billion in unfulfilled performance obligations as of March 31, 2019, which primarily entail the future delivery of services for which revenue will be recognized over time. The obligations relate to continued or additional services required on contracts and were generally valued using an estimated cost plus margin approach, with variable consideration being estimated at the most likely amount.  The Company expects to satisfy these performance obligations, on average, in one year.