10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

___________________________________ 

FORM 10-Q

 ___________________________________

(Mark One)

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

For the quarterly period ended September 30, 2012

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

For the transition period from             to             

Commission File No. 001-34972

 ___________________________________

Booz Allen Hamilton Holding Corporation

(Exact name of registrant as specified in its charter)

 ___________________________________

Delaware	26-2634160
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
8283 Greensboro Drive, McLean, Virginia	22102
(Address of principal executive offices)	(Zip Code)

(703) 902-5000

Registrant’s telephone number, including area code

(Former name, former address, and former fiscal year if changed since last report.)

___________________________________ 

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  ýNo  ¨

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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ýNo  ¨

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

Large accelerated filer	¨	Accelerated filer	ý
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

	Shares Outstanding as of  October 29, 2012
Class A Common Stock	132,045,531
Class B Non-Voting Common Stock	2,350,854
Class C Restricted Common Stock	1,372,336
Class E Special Voting Common Stock	8,942,319

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TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION		2
ITEM 1	FINANCIAL STATEMENTS	2
ITEM 2	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	15
ITEM 3	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	29
ITEM 4	CONTROLS AND PROCEDURES	30
PART II. OTHER INFORMATION		31
ITEM 1	LEGAL PROCEEDINGS	31
ITEM 1A	RISK FACTORS	31
ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	31
ITEM 3	DEFAULTS UPON SENIOR SECURITIES	31
ITEM 4	MINE SAFETY DISCLOSURES	31
ITEM 5	OTHER INFORMATION	31
ITEM 6	EXHIBITS	35

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

BOOZ ALLEN HAMILTON HOLDING CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS
	September 30, 2012			March 31, 2012
	(Unaudited)
	(Amounts in thousands, except share and per share data)
ASSETS
Current assets:
Cash and cash equivalents	$	488,979		$	484,368
Accounts receivable, net of allowance	839,647			1,077,315
Prepaid expenses and other current assets	114,036			95,980
Total current assets	1,442,662			1,657,663
Property and equipment, net of accumulated depreciation	174,640			191,079
Intangible assets, net of accumulated amortization	217,576			223,834
Goodwill	1,187,715			1,188,004
Other long-term assets	67,485			54,211
Total assets	$	3,090,078		$	3,314,791
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	46,500		$	42,500
Accounts payable and other accrued expenses	449,199			443,951
Accrued compensation and benefits	396,407			357,872
Other current liabilities	76,948			70,123
Total current liabilities	969,054			914,446
Long-term debt, net of current portion	1,691,088			922,925
Other long-term liabilities	310,402			292,235
Total liabilities	2,970,544			2,129,606
Commitments and contingencies (Note 13)
Stockholders’ equity:
Common stock, Class A — $0.01 par value — authorized, 600,000,000 shares; issued, 132,209,076 shares at September 30, 2012 and 128,726,324 shares at March 31, 2012; outstanding, 131,819,755 shares at September 30, 2012 and 128,392,549 shares at March 31, 2012	1,322			1,287
Non-voting common stock, Class B — $0.01 par value — authorized, 16,000,000 shares; issued and outstanding, 2,401,854 shares at September 30, 2012 and 2,487,125 shares at March 31, 2012	24			25
Restricted common stock, Class C — $0.01 par value — authorized, 5,000,000 shares; issued and outstanding, 1,401,803 shares at September 30, 2012 and 1,533,020 shares at March 31, 2012	14			15
Special voting common stock, Class E — $0.003 par value — authorized, 25,000,000 shares; issued and outstanding, 8,942,319 shares at September 30, 2012 and 10,140,067 shares at March 31, 2012	27			30
Treasury stock, at cost — 389,321 shares at September 30, 2012 and 333,775 shares at March 31, 2012	(6,226		)	(5,377		)
Additional paid-in capital	94,135			898,541
Retained earnings	38,473			299,379
Accumulated other comprehensive loss	(8,235		)	(8,715		)
Total stockholders’ equity	119,534			1,185,185
Total liabilities and stockholders’ equity	$	3,090,078		$	3,314,791

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2

BOOZ ALLEN HAMILTON HOLDING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
	Three Months Ended September 30,						Six Months Ended September 30,
	2012			2011			2012			2011
	(Amounts in thousands, except per share data)						(Amounts in thousands, except per share data)
Revenue	$	1,387,650		$	1,429,044		$	2,820,074		$	2,875,880
Operating costs and expenses:
Cost of revenue	702,066			715,642			1,429,436			1,442,473
Billable expenses	353,444			380,911			731,904			773,101
General and administrative expenses	212,498			220,290			405,853			432,125
Depreciation and amortization	17,613			18,536			36,116			36,394
Total operating costs and expenses	1,285,621			1,335,379			2,603,309			2,684,093
Operating income	102,029			93,665			216,765			191,787
Interest expense	(17,811		)	(12,194		)	(29,057		)	(24,488		)
Other, net	(7,343		)	4,051			(7,826		)	3,609
Income before income taxes	76,875			85,522			179,882			170,908
Income tax expense	30,759			10,190			71,821			44,440
Net income	$	46,116		$	75,332		$	108,061		$	126,468
Earnings per common share (Note 3):
Basic	$	0.29		$	0.58		$	0.75		$	0.98
Diluted	$	0.27		$	0.53		$	0.69		$	0.90
Dividends declared per share	$	6.59		$	—		$	8.18		$	—

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

3

BOOZ ALLEN HAMILTON HOLDING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
	(Amounts in thousands)				(Amounts in thousands)
Net income	$	46,116	$	75,332	$	108,061	$	126,468
Change in postretirement plan costs, net of tax	381		108		480		215
Comprehensive income	$	46,497	$	75,440	$	108,541	$	126,683

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

4

BOOZ ALLEN HAMILTON HOLDING CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
	Six Months Ended September 30,
	2012			2011
	(Amounts in thousands)
Cash flows from operating activities
Net income	$	108,061		$	126,468
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of state and local transportation business	—			(4,082		)
Transaction costs on sale of state and local transportation business	—			(5,432		)
Depreciation and amortization	36,116			36,394
Amortization of debt issuance costs	2,672			2,400
Amortization of original issuance discount on debt	646			550
Loss on extinguishment	9,879			—
Excess tax benefits from the exercise of stock options	(16,305		)	(15,960		)
Stock-based compensation expense	14,367			18,448
Loss on disposition of property and equipment	956			10
Changes in assets and liabilities:
Accounts receivable, net	237,668			71,045
Prepaid expenses and other current assets	(2,066		)	(6,674		)
Other long-term assets	5,549			11,847
Accrued compensation and benefits	(21,616		)	(49,198		)
Accounts payable and other accrued expenses	1,144			21,135
Accrued interest	4,075			4,694
Other current liabilities	6,488			(6,412		)
Other long-term liabilities	2,114			(28,116		)
Net cash provided by operating activities	389,748			177,117
Cash flows from investing activities
Purchases of property and equipment	(14,375		)	(43,640		)
Proceeds from sale of state and local transportation business	—			23,332
Net cash used in investing activities	(14,375		)	(20,308		)
Cash flows from financing activities
Net proceeds from issuance of common stock	3,359			4,695
Cash dividends paid	(1,097,773		)	—
Dividend equivalents to option holders	(37,731		)	—
Repayment of debt	(970,000		)	(15,000		)
Net proceeds from debt	1,710,143			—
Excess tax benefits from the exercise of stock options	16,305			15,960
Stock option exercises	5,784			6,502
Repurchases of common stock	(849		)	(5,377		)
Net cash (used in) / provided by financing activities	(370,762		)	6,780
Net increase (decrease) in cash and cash equivalents	4,611			163,589
Cash and cash equivalents––beginning of period	484,368			192,631
Cash and cash equivalents––end of period	$	488,979		$	356,220
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest	$	17,622		$	17,085
Income taxes	$	65,732		$	50,072

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

5

BOOZ ALLEN HAMILTON HOLDING CORPORATION

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in thousands, except share and per share data or unless otherwise noted)

September 30, 2012

1. BUSINESS OVERVIEW

Organization

Booz Allen Hamilton Holding Corporation, including its wholly owned subsidiaries, or Holding or the Company, is an affiliate of The Carlyle Group, or Carlyle, and was incorporated in Delaware in May 2008. The Company provides management and technology consulting services primarily to the U.S. government and its agencies in the defense, intelligence, and civil markets. The Company offers clients functional knowledge spanning strategy and organization, analytics, technology, and operations, which it combines with specialized expertise in clients’ mission and domain areas to help solve critical problems. The Company reports operating results and financial data in one operating segment. The Company is headquartered in McLean, Virginia, with approximately 24,000 employees as of September 30, 2012.

2. BASIS OF PRESENTATION

The Company prepared the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q, or Quarterly Report, in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The Company followed the accounting policies used and disclosed in the consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2012 filed with the Securities and Exchange Commission on May 30, 2012, or Annual Report. The Company’s fiscal year ends on March 31 and unless otherwise noted, references to fiscal year or fiscal are for fiscal years ended March 31.

The interim financial information in this Quarterly Report reflects all adjustments, consisting of normal recurring adjustments except as otherwise disclosed, necessary for a fair presentation of the Company’s results of operations for the interim periods. The results of operations for the six months ended September 30, 2012 are not necessarily indicative of results to be expected for the full fiscal year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Areas of the financial statements where estimates may have the most significant effect include allowance for doubtful accounts, contractual and regulatory reserves, lives of tangible and intangible assets, impairment of long-lived assets, accrued liabilities, revenue recognition, bonus and other incentive compensation, stock-based compensation, realization of deferred tax assets, provisions for income taxes, and postretirement obligations. Actual results experienced by the Company may differ materially from management's estimates.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the FASB during the three months ended September 30, 2012 and through the filing date did not or are not believed by management to have a material impact on the Company's present or historical condensed consolidated financial statements.

3. EARNINGS PER SHARE

The Company computes basic and diluted earnings per share amounts based on net income for the periods presented. The Company uses the weighted average number of common shares outstanding during the period to calculate basic earnings per share, or EPS. Diluted EPS adjusts the weighted average number of shares outstanding to include the dilutive effect of outstanding common stock options and other stock-based awards.

The Company currently has outstanding shares of Class A Common Stock, Class B Non-Voting Common Stock, Class C Restricted Common Stock, and Class E Special Voting Common Stock. Class E Special Voting Common Stock shares are not included in the calculation of EPS as these shares represent voting rights only and are not entitled to participate in dividends or other distributions. Unvested Class A Restricted Common Stock and unvested Class C Restricted Common Stock holders are entitled to participate in dividends or other distributions. These unvested shares participated in the Company's dividends declared and paid in the first and second quarters of fiscal 2013, and as such, EPS is calculated using the two-class method,

6

whereby earnings are reduced by the dividends declared and paid to the restricted shareholders. No such dividends were paid in the first and second quarters of fiscal 2012, as such EPS is calculated using the treasury stock method. A reconciliation of the income used to compute basic and diluted EPS for the periods presented are as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Earnings for basic computations (a)	$	38,511	$	75,332	$	99,205	$	126,468
Weighted-average Class A Common Stock outstanding	129,686,292		125,883,669		128,809,548		124,432,403
Weighted-average Class B Non-Voting Common Stock outstanding	2,431,003		2,833,324		2,452,728		2,929,808
Weighted-average Class C Restricted Common Stock outstanding	1,319,600		1,739,986		1,358,210		1,863,790
Total weighted-average common shares outstanding for basic computations	133,436,895		130,456,979		132,620,486		129,226,001
Earnings for diluted computations (a)	$	38,511	$	75,332	$	99,205	$	126,468
Dilutive stock options and restricted stock	10,812,267		10,802,985		11,027,991		11,374,985
Average number of common shares outstanding for diluted computations	144,249,162		141,259,964		143,648,477		140,600,986
Earnings per common share
Basic	$	0.29	$	0.58	$	0.75	$	0.98
Diluted	$	0.27	$	0.53	$	0.69	$	0.90

(a) During the three and six months ended September 30, 2012 approximately 1.2 million participating securities were paid dividends totaling $7.6 million and $8.9 million, respectively, that comprises the difference from net income presented on the condensed consolidated statements of operations.

In the EPS calculation for the three and six months ended September 30, 2012, 219,000 and 13,000 options, respectively, were not included in the EPS calculation as their impact was anti-dilutive. For the three and six months ended September 30, 2011, 2.2 million options were not included in the EPS calculation as their impact was anti-dilutive.

4. ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

	September 30, 2012			March 31, 2012
Current
Accounts receivable–billed	$	331,169		$	436,314
Accounts receivable–unbilled	509,240			641,800
Allowance for doubtful accounts	(762		)	(799		)
Accounts receivable, net	839,647			1,077,315
Long-term
Unbilled receivables related to retainage and holdbacks	19,527			24,163
Total accounts receivable, net	$	859,174		$	1,101,478

The Company recognized a provision for doubtful accounts of $150,000 and $2.3 million for the three months ended September 30, 2012 and 2011, respectively, and $890,000 and $2.9 million for the six months ended September 30, 2012 and 2011, respectively. Long-term unbilled receivables related to retainage, holdbacks, and long-term rate settlements to be billed at contract closeout are included in other long-term assets as accounts receivable in the accompanying condensed consolidated balance sheets.

7

5. ACCRUED COMPENSATION AND BENEFITS

Accrued compensation and benefits consisted of the following:

	September 30, 2012		March 31, 2012
Bonus	$	41,092	$	83,464
Retirement	134,256		86,723
Vacation	134,727		143,154
Stock-based compensation liability (Note 10)	59,388		8,936
Other	26,944		35,595
Total accrued compensation and benefits	$	396,407	$	357,872

Total accrued compensation and benefits includes a restructuring liability of $3.7 million at September 30, 2012 and $11.1 million at March 31, 2012, respectively.

6. DEBT

Debt consisted of the following:

	September 30, 2012					March 31, 2012
	Interest Rate		Outstanding Balance			Interest Rate		Outstanding Balance
Tranche A Loans	2.97	%	$	724,165		2.49	%	$	472,870
Tranche B Loans	4.50	%	1,013,423			3.75	%	492,555
Total			1,737,588					965,425
Less: Current portion of long-term debt			(46,500		)			(42,500		)
Long-term debt, net of current portion			$	1,691,088				$	922,925

On July 31, 2012, the Company consummated a recapitalization transaction, or Recapitalization Transaction, which included the refinancing and termination of the Company's existing senior secured credit agreement with the proceeds of the borrowings under the Company's new senior secured credit agreement, or Credit Agreement. The Credit Agreement provided the Company with a $725.0 million Term Loan A tranche and a $1,025.0 million Term Loan B tranche, and a $500.0 million revolving credit facility, with a sublimit for letters of credit of $100.0 million. The outstanding obligations under the Credit Agreement are secured by a security interest in substantially all of the assets of the Company, subject to certain exceptions set forth in the Credit Agreement and related documentation.

In connection with the Recapitalization Transaction, the Company accelerated the amortization of ratable portions of the Debt Issuance Costs, or DIC, and Original Issuance Discount, or OID, associated with the prior senior secured term loan facilities and portions of the DIC and OID of the Credit Agreement that do not qualify for deferral of $7.2 million. These amounts are reflected in other expense, net in the three months ended September 30, 2012. Furthermore, the Company expensed third party debt issuance costs of $2.7 million that did not qualify for deferral, which are reflected in general and administrative costs in the three months ended September 30, 2012.

The Credit Agreement requires quarterly principal payments of 1.25% of the stated principal amount of Tranche A Loans, with annual incremental increases to 1.875%, 2.50%, 3.125%, and 13.0%, prior to the Tranche A Loans' maturity date of December 31, 2017, and 0.25% of the stated principal amount of Tranche B Loans, with the remaining balance payable on the Tranche B Loans' maturity date of July 31, 2019. The revolving credit facility matures on December 31, 2017, at which time any outstanding principal balance is due in full. As of September 30, 2012 and March 31, 2012, there were no amounts outstanding on the revolving credit facility.

The interest rate on borrowings under Tranche A is LIBOR plus 2.75%, and will range from 2.00% to 2.75% based on the Company's total leverage ratio. The interest rate on borrowings under Tranche B is LIBOR plus 3.5% with a 1% floor. The revolving credit facility margin and commitment fee are subject to the leveraged based pricing grid, as set forth in the Credit Agreement.

8

Prior to the Recapitalization Transaction, the Company maintained a senior secured credit agreement, as amended, with a syndicate of lenders. The senior secured credit agreement, as amended, provided for $1.0 billion in term loans ($500.0 million of Tranche A Loans and $500.0 million of Tranche B Loans) and a $275.0 million revolving credit facility. The loans under the senior secured credit agreement, as amended, were secured by substantially all of the Company’s assets.

The total outstanding debt balance is recorded in the accompanying condensed consolidated balance sheets, net of unamortized discount of $12.4 million and $4.6 million as of September 30, 2012 and March 31, 2012, respectively.

Both the Credit Agreement and the senior secured credit agreement, as amended, require the maintenance of certain financial and non-financial covenants. The loans under the Credit Agreement are secured by substantially all of our assets and none of such assets will be available to satisfy the claims of our general creditors. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants are limited to the following, in each case subject to certain exceptions: a maximum net total leverage ratio; a minimum net interest coverage ratio; limitations on indebtedness and liens; mergers, consolidations or amalgamations, or liquidations, wind-ups or dissolutions; dispositions of property; restricted payments; investments; transactions with affiliates; sale and lease back transactions; change in fiscal periods; negative pledges; restrictive agreements; limitations on line of business; limitations on speculative hedging and limitations on changes of names and jurisdictions. In addition, we are required to meet certain financial covenants at each quarter end, namely Consolidated Net Total Leverage and Consolidated Net Interest Coverage Ratios. As of September 30, 2012 and March 31, 2012, the Company was in compliance with all of its covenants.

7. INCOME TAXES

The Company’s effective income tax rate was 40.0% and 11.9% for the three months ended September 30, 2012 and 2011, respectively, and 39.9% and 26.0% for the six months ended September 30, 2012 and 2011, respectively. The three and six month effective tax rates of 40.0% and 39.9%, respectively, differ from the statutory rate of 35.0% due to state and foreign taxes and the effect of permanent rate differences, which primarily relate to meals and entertainment.

The Company is also subject to taxes imposed by various taxing authorities including state and foreign jurisdictions. Tax years related to state and foreign jurisdictions that remain open and subject to examination are not considered to be material, or will be indemnified under the merger agreement as described in the Company's Annual Report.

8. EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

The Company sponsors the Employees’ Capital Accumulation Plan, or ECAP, which is a qualified defined contribution plan that covers eligible U.S. and international employees. ECAP provides for distributions, subject to certain vesting provisions, to participants by reason of retirement, death, disability, or termination of employment. Total expense recognized under ECAP for the three months ended September 30, 2012 and 2011 was $59.3 million and $55.5 million, respectively, and $118.8 million and $114.7 million for the six months ended September 30, 2012 and 2011, respectively. The Company-paid contributions for the three months ended September 30, 2012 and 2011 were $30.0 million and $28.3 million, respectively, and $71.3 million and $70.0 million for the six months ended September 30, 2012 and 2011, respectively.

Defined Benefit Plan and Other Postretirement Benefit Plans

The Company maintains and administers a postretirement medical plan and a defined benefit retirement plan for current, retired, and resigned officers.

The components of net postretirement medical expense for the Officer Medical Plan were as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Service cost	$	973	$	1,000	$	1,946	$	1,956
Interest cost	787		724		1,573		1,493
Total postretirement medical expense	$	1,760	$	1,724	$	3,519	$	3,449

As of September 30, 2012 and March 31, 2012, the unfunded status of the Officer Medical Plan was $66.6 million and $63.6 million, respectively, which is included in other long-term liabilities in the accompanying condensed consolidated balance sheets.

9

Total expense for the Company’s Retired Officers’ Bonus Plan was $186,000 and $217,000 for the three months ended September 30, 2012 and 2011, respectively, and $371,000 and $434,000 for the six months ended September 30, 2012 and 2011, respectively. The Retired Officers’ Bonus Plan is an unfunded plan and contributions are made as benefits are paid. As of September 30, 2012 and March 31, 2012, the accumulated liability of $4.8 million and $4.6 million, respectively, is included in other long-term liabilities in the accompanying condensed consolidated balance sheets is unfunded.

9. STOCKHOLDERS’ EQUITY

Common Stock

The common stock shares activity consisted of the following:

	Class A Common Stock	Class B Non-Voting Common Stock	Class C Restricted Common Stock		Class E Special Voting Common Stock		Treasury Stock
Balance at March 31, 2011	122,784,835	3,053,130	2,028,270		12,348,860		—
Issuance of common stock	1,080,245	—	—		—		—
Stock options exercised	3,799,989	—	—		(2,208,793)		—
Share exchange	1,061,255	(566,005)	(495,250)		—		—
Repurchase of common stock (1)	—	—	—		—		333,775
Balance at March 31, 2012	128,726,324	2,487,125	1,533,020		10,140,067		333,775
Issuance of common stock	950,268	—	—		—		—
Stock options exercised	2,315,996	—	—		(1,197,748	)	—
Share exchange	216,488	(85,271)	(131,217	)	—		—
Repurchase of common stock (2)	—	—	—		—		55,546
Balance at September 30, 2012	132,209,076	2,401,854	1,401,803		8,942,319		389,321

(1) Reflects shares repurchased during the three months ended September 30, 2011 associated with the share surrender program that was limited to Rollover Options (defined below) that were required to be exercised between June 30, 2011 and September 15, 2011.

(2) Reflects shares repurchased on July 2, 2012 to cover for the withholding taxes on restricted stock awards that vested on June 30, 2012.

In connection with the Company’s initial public offering in November 2010, the Company established a tax qualified Employee Stock Purchase Plan, or ESPP, which is designed to enable eligible employees to periodically purchase shares of the Company’s Class A Common Stock up to an aggregate of 10,000,000 shares at a five percent discount from the fair market value of the Company’s common stock. The ESPP provides for quarterly offering periods, the first of which commenced on April 1, 2011. For the quarterly offering period that closed on September 30, 2012, 122,004 Class A Common Stock shares were purchased by employees under the ESPP. As of the program's inception, 786,805 shares have been purchased by employees.

On July 30, 2012 our Board of Directors authorized and declared a special cash dividend of $6.50 per share and a regular quarterly cash dividend in the amount of $0.09 per share. Both the special dividend and quarterly dividends were paid on August 31, 2012. The dividends were accounted for on July 31, 2012, the declaration date, by reducing retained earnings to zero with the remainder being recorded as a reduction to additional paid-in capital. The total payout of the dividend has been presented as a financing activity within the Condensed Consolidated Statement of Cash Flows. Additionally, the Company paid $9.0 million to holders of Rollover Options (described below in Note 10) and $28.7 million to holders of Amended and Restated Equity Incentive Plan, or EIP, Options (described below in Note 10.) The $37.7 million is presented as a financing activity within the Condensed Consolidated Statement of Cash Flows.

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10. STOCK-BASED COMPENSATION

The following table summarizes stock-based compensation expense recognized in the condensed consolidated statements of operations:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Cost of revenue	$	2,168	2,213		$	4,095	$	5,269
General and administrative expenses	5,437		5,558		10,272		13,179
Total	$	7,605	$	7,771	$	14,367	$	18,448

As of September 30, 2012, there was $30.3 million of total unrecognized compensation cost related to unvested stock-based compensation agreements. The unrecognized compensation cost as of September 30, 2012 is expected to be amortized over 4.75 years.

Officers’ Rollover Stock Plan

For the three and six months ended September 30, 2012, 0 and 136,200 shares of Class C Restricted Common Stock, or Class C Restricted Stock, vested. Total compensation expense recorded in conjunction with all Class C Restricted Stock for the three months ended September 30, 2012 and 2011 was $59,000 and $148,000, respectively, and $192,000 and $740,000 for the six months ended September 30, 2012 and 2011, respectively. Future compensation cost related to non-vested Class C Restricted Stock not yet recognized in the condensed consolidated statements of operations was $178,000, and is expected to be fully recognized by June 30, 2013.

A portion of the old stock rights held by Booz Allen Hamilton Inc.’s U.S. government consulting partners issued under the stock rights plan that existed for Booz Allen Hamilton Inc.’s officers prior to the merger transaction, as described in the Company’s Annual Report, were exchanged for new options, or Rollover Options. As of September 30, 2012, there were 8,239,293 Rollover Options outstanding, of which 1,879,375 were unvested. Total compensation expense recorded in conjunction with all Rollover Options for the three months ended September 30, 2012 and 2011 was $578,000 and $2.0 million, respectively, and $1.8 million and $7.1 million for the six months ended September 30, 2012 and 2011, respectively. Future compensation cost related to non-vested Rollover Options not yet recognized in the condensed consolidated statements of operations was $1.7 million, and is expected to be fully recognized by June 30, 2013.

Equity Incentive Plan

On August 2, 2012, 20,000 options were granted under the EIP. The estimated fair value of our Class A Common Stock on August 2, 2012 at the time of the option grant, was $17.32.

As of September 30, 2012, there were 10,860,741 EIP options outstanding, of which 5,486,402 were unvested. Total compensation expense recorded in conjunction with EIP options for the three months ended September 30, 2012 and 2011 was $2.2 million and $3.1 million, respectively, and $6.4 million and $8.0 million for the six months ended September 30, 2012 and 2011, respectively. Future compensation cost related to non-vested EIP options not yet recognized in the condensed consolidated statements of operations was $15.5 million, and is expected to be recognized over 4.75 years.

Grants of Class A Restricted Common Stock

On June 29, 2012, the Board of Directors granted 674,456 shares of Class A Restricted Stock in conjunction with the Annual Incentive Plan adopted on October 1, 2010. The amount of the annual incentive payment was determined based on performance targets established by the Compensation Committee and a portion of the bonus was paid in the form of Class A Restricted Stock. Equity awards will vest based on the passage of time, subject to the officer’s continued employment by the Company. The portion to be paid in the form of equity will be recognized in the accompanying consolidated statements of operations based on grant date fair value over the vesting period of three years and the aggregate value was estimated at $10.3 million based on the stock price of $15.28 on the grant date. On August 2, 2012, the Board of Directors granted 24,251 shares of Class A Restricted Stock to certain members of the Board of Directors.

Total compensation expense recorded in conjunction with Class A Restricted Stock for the three and six months ended September 30, 2012 was $2.5 million and $3.8 million, respectively. Future compensation cost related to this award not yet recognized in the condensed consolidated statements of operations was $11.3 million and is expected to be recognized over

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2.75 years.

Dividends

On May 29, 2012, our Board of Directors authorized and declared a regular quarterly cash dividend in the amount of $0.09 per share. In addition, the Board of Directors declared a special cash dividend of $1.50 per share. Both the quarterly and special dividend were paid on June 29, 2012 to stockholders of record on June 11, 2012. The Compensation Committee, as the Administrator of the Officers' Rollover Stock Plan and the EIP, made a required adjustment to the outstanding options under each plan by granting holders of the Rollover Options a cash payment equal to the amount of the special dividend on the options' mandatory exercise date and by granting the holders of EIP options a dividend equivalent equal to the special dividend and payable on June 29, 2012 or the vesting of the EIP option, whichever is later.

On July 30, 2012, our Board of Directors authorized and declared a special cash dividend of $6.50 per share and a regular quarterly cash dividend in the amount of $0.09 per share. The dividends were paid on August 31, 2012 to stockholders of record on August 13, 2012 for the special cash dividend and August 14, 2012 for the regular quarterly cash dividend. The Board of Directors, as the Administrator of the Officers' Rollover Stock Plan and the EIP, made a determination to adjust the outstanding options under each plan.  

Holders of the Rollover Options received a cash payment equal to the amount of the special dividend on the options' mandatory exercise date. On August 31, 2012, Rollover options holders received a dividend equivalent payment of $9.0 million related to the special dividend. Holders of EIP options with a pre-dividend exercise price less than $11.00 per share received a dividend equivalent equal to the amount of the special dividend payable on August 31, 2012 or the vesting of the EIP option, whichever is later. On August 31, 2012, vested outstanding EIP options received a dividend equivalent payment of $28.7 million related to the August 2012 special dividend. All other EIP options were adjusted, based on authorization from the Board of Directors, by reducing the exercise price by $6.36 which is equal to the difference between the pre-dividend closing fair market value of our Class A Common Stock and the post-dividend opening fair market value of our Class A Common Stock as noted on the New York Stock Exchange. Payment of the dividend equivalents and adjustments to option exercise prices were accounted for as modifications resulting in incremental benefit to the option holders resulting in additional compensation expense of $3.8 million. Total compensation expense recorded in conjunction with the payment of the dividend equivalent to holders of unvested EIP options for the six months ended September 30, 2012 was $2.2 million. Future compensation cost related to payment of the dividend equivalents to holders of EIP options not yet recognized in the statement of operations is $1.6 million and is expected to be recognized over 4.75 years.

As of September 30, 2012 and March 31, 2012, the Company calculated a total recorded and unrecorded stock-based compensation liability of $119.3 million and $38.3 million, respectively, related to the special dividends paid in December 2009, June 2012, and August 2012, as follows:

	September 30, 2012						March 31, 2012
	EIP Options		Rollover Options		Total		EIP Options		Rollover Options		Total
Current portion of liability1	$	13,311	$	46,073	$	59,384	$	—	$	8,939	$	8,939
Long-term portion of liability2	—		45,223		45,223		—		27,724		27,724
	$	13,311	$	91,296	$	104,607	$	—	$	36,663	$	36,663

¹ Included in accrued compensation and benefits (Note 5).

² Included in other long-term liabilities.

As of September 30, 2012, $8.1 million related to Rollover Options and $6.6 million related to EIP Options will be recorded as liabilities as the related compensation expense is recognized over the next three quarters for Rollover Options and 4.75 years for EIP Options. As of March 31, 2012, there was a similar unrecognized liability of $1.6 million related to Rollover Options .

11. FINANCIAL INSTRUMENTS

The fair value of the Company's cash and cash equivalents, trade accounts receivable, and accounts payable approximates its carrying value at September 30, 2012 and March 31, 2012 because of the short-term nature of these amounts. The fair value of the Company's debt instruments approximates its carrying value at September 30, 2012 and March 31, 2012.

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The fair value of debt is determined based on interest rates available for debt with terms and maturities similar to the Company's existing debt arrangements.

12. RELATED-PARTY TRANSACTIONS

The Company is an affiliate of Carlyle, and from time to time, and in the ordinary course of business: (1) other Carlyle portfolio companies engage the Company as a subcontractor or service provider, and (2) the Company engages other Carlyle portfolio companies as subcontractors or service providers. Revenue and cost associated with these related parties for the three months ended September 30, 2012 were $195,000 and $185,000, respectively, and $345,000 and $329,000 for the six months ended September 30, 2012, respectively. Revenue and cost associated with these related parties for the three months ended September 30, 2011 were $343,000 and $305,000, respectively, and $946,000 and $852,000 for the six months ended September 30, 2011, respectively.

On July 31, 2008, the Company entered into a management agreement, or Management Agreement, with TC Group V US, L.L.C., or TC Group, a company affiliated with Carlyle. In accordance with the Management Agreement, TC Group provides the Company with advisory, consulting, and other services and the Company pays TC Group an aggregate annual fee of $1.0 million, plus expenses. For the three months ended September 30, 2012 and 2011, the Company incurred $250,000 in advisory fees. For the six months ended September 30, 2012 and 2011, the Company incurred $500,000 in advisory fees.

13. COMMITMENTS AND CONTINGENCIES

Leases

As a result of the July 2008 merger transaction, as described in the Company’s Annual Report, the Company assigned a total of nine leases to Booz & Co. The facilities are located in New York, New York; Troy, Michigan; Florham Park, New Jersey; Parsippany, New Jersey; Houston, Texas; Chicago, Illinois; Cleveland, Ohio; Dallas, Texas; and London, England. Except for the Houston, Cleveland and Dallas leases, which expired, the Company remains liable under the terms of the original leases should Booz & Co. default on its obligations. There were no events of default under these leases as of September 30, 2012 and March 31, 2012. The maximum potential amount of undiscounted future payments is $30.4 million, and the leases expire at different dates between February 2013 and March 2017. Based on the Company’s assessment of the likelihood of future payment, no amounts have been recorded related to the Company’s contingent liability on such leases.

Government Contracting Matters

For the three and six months ended September 30, 2012, approximately 99% of the Company’s revenue was generated from contracts with U.S. government agencies or other U.S. government contractors, and approximately 98% for the three and six months ended September 30, 2011. Contracts with the U.S. government are subject to extensive legal and regulatory requirements and, from time to time and in the ordinary course of business, agencies of the U.S. government investigate whether the Company’s operations are conducted in accordance with these requirements and the terms of the relevant contracts by using investigative techniques as subpoenas or civil investigative demands. U.S. government investigations of the Company, whether related to the Company’s U.S. government contracts or conducted for other reasons, could result in administrative, civil, or criminal liabilities, including repayments, fines, or penalties being imposed upon the Company, or could lead to suspension or debarment from future U.S. government contracting. Management believes it has adequately reserved for any losses that may be experienced from any investigation of which it is aware. The Defense Contract Management Agency Administrative Contracting Officer has negotiated annual final indirect cost rates through fiscal year 2006. Audits of subsequent years may result in cost reductions and/or penalties. Management believes it has adequately reserved for any losses that may be experienced from any such reductions and/or penalties. As of September 30, 2012 and March 31, 2012, the Company has recorded a liability of approximately $143.7 million and $127.2 million, respectively, for its current best estimate of amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs incurred subsequent to fiscal year 2006.

Litigation

The Company is involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with clients and contractors, intellectual property disputes, and other business matters. These legal proceedings seek various remedies, including claims for monetary damages in varying amounts that currently range up to $40 million or have a reasonably estimated outcome within that range, or are unspecified as to amount. Although the outcome of any such matter is inherently uncertain and may be materially adverse, based on current information, management does not expect any of the currently ongoing audits, reviews, investigations, or litigation to have a material adverse effect on the Company’s financial condition and results of operations.

Six former officers and stockholders who had departed the firm prior to the acquisition, as described in the Company’s

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Annual Report, have filed a total of nine suits in various jurisdictions, with original filing dates ranging from July 3, 2008 through December 15, 2009 (three of which were amended on July 2, 2010 and then further amended into one consolidated complaint on September 7, 2010) against the Company and certain of the Company’s current and former directors and officers. Each of the suits arises out of the acquisition and alleges that the former stockholders are entitled to certain payments that they would have received if they had held their stock at the time of the acquisition. Some of the suits also allege that the acquisition price paid to stockholders was insufficient. The various suits assert claims for breach of contract, tortious interference with contract, breach of fiduciary duty, civil Racketeer Influenced and Corrupt Organizations Act, or RICO, violations, violations of the Employee Retirement Income Security Act, and/or securities and common law fraud. Two of these suits have been dismissed with all appeals exhausted. Five of the remaining suits are pending in the United States District Court for the Southern District of New York, the sixth is pending in New York state court and the seventh is pending in the United States District Court for the Southern District of California. As of September 30, 2012 and March 31, 2012, the aggregate alleged damages sought in the seven remaining suits was approximately $348.7 million ($291.5 million of which is sought to be trebled pursuant to RICO) plus punitive damages, costs, and fees. Although the outcome of any of these cases is inherently uncertain and may be materially adverse, based on current information, we do not expect them to have a material adverse effect on our financial condition and results of operations.

14. SUBSEQUENT EVENTS

On October 16, 2012, the Company announced that it had entered into a definitive agreement to acquire the Defense Systems Engineering and Support, or DSES, division of ARINC Incorporated. The Company expects to complete the acquisition of 100% of the membership interests of the entity that owns DSES in the third quarter of fiscal 2013.

Pursuant to the terms of the definitive agreement, the Company will pay approximately $154 million in cash to ARINC Incorporated. The acquisition of DSES will be accounted for under the purchase method of accounting which requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value. The excess of the purchase consideration over the amounts assigned to tangible and intangible assets acquired and liabilities assumed will be recognized as goodwill. Of the total transaction costs of $3.5 million to $4.0 million expected to be incurred during fiscal 2013, $2.6 million has been accrued and recognized as a component of general and administrative expenses as of September 30, 2012.

On October 29, 2012, our Board of Directors authorized and declared a regular quarterly cash dividend in the amount of $0.09 per share. The quarterly dividend is payable on November 30, 2012 to shareholders of record on November 13, 2012.

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

—The following discussion and analysis is intended to help the reader understand our business, financial condition, results of operations, and liquidity and capital resources. You should read this discussion in conjunction with our condensed consolidated financial statements and the related notes contained elsewhere in this Quarterly Report on Form 10-Q, or Quarterly Report.

—The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources, and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in our Annual Report on Form 10-K for the fiscal year ended March 31, 2012 filed with the Securities and Exchange Commission on May 30, 2012, or Annual Report, and under Part II, “Item 1A. Risk Factors,” and “— Special Note Regarding Forward Looking Statements” of this Quarterly Report. Our actual results may differ materially from those contained in or implied by any forward-looking statements.

—Our fiscal year ends March 31 and, unless otherwise noted, references to years or fiscal are for fiscal years ended March 31. See “—Results of Operations.”

Overview

We are a leading provider of management and technology consulting services to the U.S. government in the defense, intelligence, and civil markets. Additionally, we provide management and technology consulting services to major corporations, institutions, and not for profit organizations. As the needs of our clients have grown more complex, we have developed deep expertise in technology, engineering, and analytics. Leveraging our 98-year consulting heritage and a talent base of approximately 24,000 people, we deploy our deep domain knowledge, functional expertise, and experience to help our clients achieve their objectives. We serve substantially all of the cabinet-level departments of the U.S. government. Our major clients include the Department of Defense, all branches of the U.S. military, the U.S. Intelligence Community, and civil agencies such as the Department of Homeland Security, the Department of Energy, the Department of Health and Human Services, the Department of the Treasury, and the Environmental Protection Agency. We support these clients in addressing complex and pressing challenges such as combating global terrorism, improving cyber capabilities, transforming the healthcare system, improving efficiency and managing change within the government, and protecting the environment.

We have a collaborative culture, supported by our operating model, which helps our professionals identify and respond to emerging trends across the markets we serve and deliver enduring results for our clients.

Financial and Other Highlights

Revenue decreased 2.9% from the three months ended September 30, 2011 to the three months ended September 30, 2012 and decreased 1.9% from the six months ended September 30, 2011 to the six months ended September 30, 2012, primarily due to a reduction in billable expenses and a lower rate of indirect costs to direct labor. Reductions in billable expenses and indirect costs have a direct correlation to the amount of revenue recognized on cost reimbursable contracts. The lower rate of indirect expenses is primarily attributable to the cost reduction actions the Company implemented in late fiscal 2012. The negative impact on revenue attributable to these two factors was partially offset by continued modest growth in direct consulting staff labor sold. Direct consulting staff labor represents our consulting staff’s labor under contracts for which we act as a prime contractor or subcontractor. Substantially all of our revenue and backlog is derived from services and solutions provided to client organizations across the U.S. government, primarily by our consulting staff and, to a lesser extent, our subcontractors. The mix of revenue generated by consulting staff and subcontractors affects our operating margin, substantially all of which is derived from direct consulting staff labor, as the portion of our revenue derived from fees we earn on services provided by our subcontractors is not significant.

Operating income grew 8.9% to $102.0 million in the three months ended September 30, 2012 from $93.7 million in the three months ended September 30, 2011, which reflects a 80 basis point increase in operating margin to 7.4% from 6.6% in the comparable periods. Operating income grew 13.0% to $216.8 million in the six months ended September 30, 2012 from $191.8 million in the six months ended September 30, 2011, which reflects a 100 basis point increase in operating margin to 7.7% from 6.7% in the comparable period. The improvement in operating margin was due to increased contract profitability due to disciplined cost management of indirect spending, as well as decreases in stock-based compensation costs and lower amortization of our intangible assets. The factors contributing to the increased operating margin were partially offset by increases in depreciation expense due to facility expansion in previous years, causing a higher increase in depreciation for fiscal 2013.

Cash provided by operations increased $212.6 million to $389.7 million from $177.1 million. The increase in cash provided by operations was a result of overall profitability of our contracts, our ability to invoice and collect from clients in a more timely

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manner, and our effective management of vendor payments. We experienced a higher than normal cash collection during the U.S. government's fiscal 2012 year end as U.S. government agencies were more aggressive in completing payment actions before the end of its fiscal year. This behavior was in part due to the U.S. Government's Office of Management and Budget's July 2012 temporary requirement to pay Department of Defense prime contractors within 15 days, which allows small business contractors and subcontractors to receive payments earlier. As a result, we experienced earlier receipt of monies than in the comparable prior year period.

Non-GAAP Measures

We publicly disclose certain non-GAAP financial measurements, including Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted Earnings Per Share, or EPS, because management uses these measures for business planning purposes, including to manage our business against internal projected results of operations and measure our performance. We view Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS as measures of our core operating business, which exclude the impact of the items detailed below, as these items are generally not operational in nature. These non-GAAP measures also provide another basis for comparing period to period results by excluding potential differences caused by non-operational and unusual or non-recurring items. We also utilize and discuss Free Cash Flow, because management uses this measure for business planning purposes, measuring the cash generating ability of the operating business, and measuring liquidity generally. We present these supplemental measures because we believe that these measures provide investors with important supplemental information with which to evaluate our performance, long term earnings potential, or liquidity, as applicable, and to enable them to assess our performance on the same basis as management. These supplemental performance measurements may vary from and may not be comparable to similarly titled measures by other companies in our industry. Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow are not recognized measurements under accounting principles generally accepted in the United States, or GAAP, and when analyzing our performance or liquidity, as applicable, investors should (i) evaluate each adjustment in our reconciliation of operating and net income to Adjusted Operating Income, Adjusted EBITDA and Adjusted Net Income, and net cash provided by operating activities to Free Cash Flows, and the explanatory footnotes regarding those adjustments, each as defined under GAAP, (ii) use Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS in addition to, and not as an alternative to, operating income, net income or diluted EPS, as a measure of operating results, and (iii) use Free Cash Flows in addition to, and not as an alternative to, net cash provided by operating activities as a measure of liquidity, each as defined under GAAP. We have defined the aforementioned non-GAAP measures as follows:

• "Adjusted Operating Income" represents operating income before (i) certain stock option-based and other equity-based compensation expenses, (ii) adjustments related to the amortization of intangible assets, and (iii) any extraordinary, unusual, or non-recurring items. We prepare Adjusted Operating Income to eliminate the impact of items we do not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary, or non-recurring nature or because they result from an event of a similar nature.

• "Adjusted EBITDA" represents net income before income taxes, net interest and other expense, and depreciation and amortization and before certain other items, including: (i) certain stock option-based and other equity-based compensation expenses, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, and (iii) any extraordinary, unusual, or non-recurring items. We prepare Adjusted EBITDA to eliminate the impact of items we do not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary, or non-recurring nature or because they result from an event of a similar nature.

• "Adjusted Net Income" represents net income before: (i) certain stock option-based and other equity-based compensation expenses, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, (iii) adjustments related to the amortization of intangible assets, (iv) amortization or write-off of debt issuance costs and write-off of original issue discount, and (v) any extraordinary, unusual, or non-recurring items, in each case net of the tax effect calculated using an assumed effective tax rate. We prepare Adjusted Net Income to eliminate the impact of items, net of tax, we do not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary, or non-recurring nature or because they result from an event of a similar nature.

• "Adjusted Diluted EPS" represents diluted EPS calculated using Adjusted Net Income as opposed to net income. Additionally, Adjusted Diluted EPS does not contemplate any adjustments to net income as required under the two-class method as disclosed in the footnotes to the financial statements.

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• "Free Cash Flow" represents the net cash generated from operating activities less the impact of purchases of property and equipment.

Below is a reconciliation of Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow to the most directly comparable financial measure calculated and presented in accordance with GAAP.

	Three Months Ended September 30,						Six Months Ended September 30,
(Amounts in thousands, except share and per share data)	2012			2011			2012			2011
	(Unaudited)						(Unaudited)
Adjusted Operating Income
Operating Income	$	102,029		$	93,665		$	216,765		$	191,787
Certain stock-based compensation expense (a)	1,465			2,274			3,858			9,171
Amortization of intangible assets (b)	3,126			4,091			6,259			8,182
Transaction expenses (c)	2,725			—			2,725			—
Adjusted Operating Income	$	109,345		$	100,030		$	229,607		$	209,140
EBITDA & Adjusted EBITDA
Net income	$	46,116		$	75,332		$	108,061		$	126,468
Income tax expense	30,759			10,190			71,821			44,440
Interest and other, net	25,154			8,143			36,883			20,879
Depreciation and amortization	17,613			18,536			36,116			36,394
EBITDA	119,642			112,201			252,881			228,181
Certain stock-based compensation expense (a)	1,465			2,274			3,858			9,171
Transaction expenses (c)	2,725			—			2,725			—
Adjusted EBITDA	$	123,832		$	114,475		$	259,464		$	237,352
Adjusted Net Income
Net income	$	46,116		$	75,332		$	108,061		$	126,468
Certain stock-based compensation expense (a)	1,465			2,274			3,858			9,171
Transaction expenses (c)	2,725			—			2,725			—
Amortization of intangible assets (b)	3,126			4,091			6,259			8,182
Amortization or write-off of debt issuance costs and write-off of original issue discount	8,628			1,206			9,826			2,400
Net gain on sale of state and local transportation business (d)	—			(5,681		)	—			(5,681		)
Release of income tax reserves (e)	—			(23,584		)	—			(24,048		)
Adjustments for tax effect (f)	(6,378		)	(3,028		)	(9,068		)	(7,901		)
Adjusted Net Income	$	55,682		$	50,610		$	121,661		$	108,591
Adjusted Diluted Earnings Per Share
Weighted-average number of diluted shares outstanding	144,249,162			141,259,964			143,648,477			140,600,986
Adjusted Net Income Per Diluted Share (g)	$	0.39		$	0.36		$	0.85		$	0.77
Free Cash Flow
Net cash provided by operating activities	$	315,705		$	123,273		$	389,748		$	177,117
Less: Purchases of property and equipment	(10,406		)	(26,039		)	(14,375		)	(43,640		)
Free Cash Flow	$	305,299		$	97,234		$	375,373		$	133,477

___________________________________

(a) Reflects stock-based compensation expense for options for Class A Common Stock and restricted shares, in each case, issued in connection with the Acquisition of our Company by The Carlyle Group (the Acquisition) under the Officers' Rollover Stock Plan. Also reflects stock-based compensation expense for Equity Incentive Plan Class A Common Stock options issued in connection with the Acquisition under the Equity Incentive Plan.

(b) Reflects amortization of intangible assets resulting from the Acquisition.

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(c) Reflects debt refinancing costs incurred in connection with the Recapitalization Transaction consummated on July 31, 2012.

(d) Three and six months ended September 30, 2011 reflects the gain on sale of our state and local transportation business, net of the associated tax benefit of $1.6 million.

(e) Reflects the release of income tax reserves.

(f) Reflects tax effect of adjustments at an assumed marginal tax rate of 40%.

(g) Excludes an adjustment of approximately $7.6 million and $8.9 million of net earnings for the three and six months ended September 30, 2012, respectively, associated with the application of the two-class method for computing diluted earnings per share.

Recent Developments

The following recent developments occurred after September 30, 2012, which may cause our future results of operations to differ from our historical results of operations discussed under “— Results of Operations.”

On October 16, 2012, the Company announced that it had entered into a definitive agreement to acquire the Defense Systems Engineering and Support, or DSES, division of ARINC Incorporated. The Company expects to complete the acquisition of 100% of the membership interests of the entity that owns DSES in the third quarter of fiscal 2013.

Pursuant to the terms of the definitive agreement, the Company will pay approximately $154 million in cash to ARINC Incorporated. The acquisition of DSES will be accounted for under the purchase method of accounting which requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value. The excess of the purchase consideration over the amounts assigned to tangible and intangible assets acquired and liabilities assumed will be recognized as goodwill. Of the total transaction costs of $3.5 million to $4.0 million expected to be incurred during fiscal 2013, $2.6 million has been accrued and recognized as a component of general and administrative expenses as of September 30, 2012.

On October 29, 2012, our Board of Directors authorized and declared a regular quarterly cash dividend in the amount of $0.09 per share. The quarterly dividend is payable on November 30, 2012 to shareholders of record on November 13, 2012.

Factors and Trends Affecting Our Results of Operations

Our results of operations have been, and we expect them to continue to be, affected by the following factors, which may cause our future results of operations to differ from our historical results of operations discussed under “— Results of Operations.”

Business Environment and Key Trends in Our Markets

We believe that the following trends and developments in the U.S. government services industry and our markets may influence our future results of operations:

• budget deficits and the growing U.S. national debt increasing pressure on the U.S. government to reduce federal spending across all federal agencies together with associated uncertainty about the size and timing of those reductions;

• changes in the relative mix of overall U.S. government spending and areas of spending growth, with lower spending on homeland security, intelligence and defense-related programs as overseas operations end, and continued increased spending on cyber-security, advanced analytics, technology integration and healthcare;

• cost cutting and efficiency initiatives and other efforts to streamline the U.S. defense and intelligence infrastructure, including the initiatives implemented by the Secretary of Defense or reductions in defense budgets resulting from Congressional action;

• in the absence of Congressional action to the contrary, material reductions in defense budgets resulting from the commencement on January 2, 2013 of automatic sequestration as required under the Budget Control Act of 2011;

• delays in the completion of the U.S. government’s budget process, which has in the past and could in the future delay procurement of the products, services, and solutions we provide;

• existing and proposed fiscal constraints by the U.S. government and uncertainty about the size of future budget reductions may cause clients to invest appropriated funds on a less consistent or rapid basis, or not at all, particularly when considering long-term initiatives, not issue task orders in sufficient volume to reach current contract ceilings, and delay requests for new proposals and contract awards, relying on short-term

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extensions of current contracts instead;

• the federal focus on refining the definition of “inherently governmental” work will continue to drive pockets of insourcing in various agencies, particularly in the intelligence market;

• cost cutting and efficiency and effectiveness efforts by U.S. civilian agencies with a focus on increased use of performance measurement, “program integrity” efforts to reduce waste, fraud and abuse in entitlement programs, and renewed focus on improving procurement practices for and interagency use of IT services, including through the use of cloud based options and data center consolidation;

• U.S. government agencies awarding contracts on a technically acceptable/lowest cost basis, which could have a negative impact on our ability to win certain contracts;

• restrictions by the U.S. government on the ability of federal agencies to use lead system integrators, in response to cost, schedule and performance problems with large defense acquisition programs where contractors were performing the lead system integrator role;

• increasingly complex requirements of the Department of Defense and the U.S. Intelligence Community, including cyber-security, managing federal health care cost growth and focus on reforming existing government regulation of various sectors of the economy, such as financial regulation and healthcare;

• increased competition from other government contractors and market entrants seeking to take advantage of the trends identified above; and

• efforts by the U.S. government to address organizational conflicts of interest and related issues and the impact of those efforts on us and our competitors.

Sources of Revenue

Substantially all of our revenue is derived from services provided under contracts and task orders with the U.S. government, primarily by our consulting staff and, to a lesser extent, our subcontractors. Funding for our contracts and task orders is generally linked to trends in budgets and spending across various U.S. government agencies and departments. We provide services under a large portfolio of contracts and contract vehicles to a broad client base, and we believe that our diversified contract and client base lessens potential volatility in our business; however, a reduction in the amount of services that we are contracted to provide to the U.S. government or any of our significant U.S. government clients could have a material adverse effect on our business and results of operations. In particular, the Department of Defense is one of our significant clients, and the Budget Control Act of 2011 could impose an estimated $500 billion to $600 billion in automatic federal defense spending cuts between 2013 and 2021 to the extent that automatic sequestration required by the act commences on January 2, 2013. A reduction in the amount of services that we are contracted to provide to the Department of Defense could have a material adverse effect on our business and results of operations, and given the uncertainty of how these automatic reductions may be applied, we are unable to predict the nature or magnitude of the potential adverse effect.

Contract Types

We generate revenue under the following three basic types of contracts:

• Cost-Reimbursable Contracts. Cost-reimbursable contracts provide for the payment of allowable costs incurred during performance of the contract, up to a ceiling based on the amount that has been funded, plus a fee. We generate revenue under two general types of cost-reimbursable contracts: cost-plus-fixed-fee and cost-plus-award-fee, both of which reimburse allowable costs and provide for a fee. The fee under each type of cost-reimbursable contract is generally payable upon completion of services in accordance with the terms of the contract. Cost-plus-fixed-fee contracts offer no opportunity for payment beyond the fixed fee. Cost-plus-award-fee contracts also provide for an award fee that varies within specified limits based upon the client’s assessment of our performance against a predetermined set of criteria, such as targets for factors like cost, quality, schedule, and performance.

• Time-and-Materials Contracts. Under a time-and-materials contract, we are paid a fixed hourly rate for each direct labor hour expended, and we are reimbursed for allowable material costs and allowable out-of-pocket expenses. To the extent our actual direct labor and associated costs vary in relation to the fixed hourly billing rates provided in the contract, we will generate more or less profit, or could incur a loss.

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• Fixed-Price Contracts. Under a fixed-price contract, we agree to perform the specified work for a pre-determined price. To the extent our actual costs vary from the estimates upon which the price was negotiated, we will generate more or less profit, or could incur a loss. Some fixed-price contracts have a performance-based component, pursuant to which we can earn incentive payments or incur financial penalties based on our performance. Fixed-price level of effort contracts require us to provide a specified level of effort (i.e., labor hours), over a stated period of time, for a fixed price.

The amount of risk and potential reward varies under each type of contract. Under cost-reimbursable contracts, there is limited financial risk, because we are reimbursed for all allowable costs up to a ceiling. However, profit margins on this type of contract tend to be lower than on time-and-materials and fixed-price contracts. Under time-and-materials contracts, we are reimbursed for the hours worked using the predetermined hourly rates for each labor category. In addition, we are typically reimbursed for other contract direct costs and expenses at cost. We assume financial risk on time-and-materials contracts because our labor costs may exceed the negotiated billing rates. Profit margins on well-managed time-and-materials contracts tend to be higher than profit margins on cost-reimbursable contracts as long as we are able to staff those contracts with people who have an appropriate skill set. Under fixed-price contracts, we are required to deliver the objectives under the contract for a pre-determined price. Compared to time-and-materials and cost-reimbursable contracts, fixed-price contracts generally offer higher profit margin opportunities because we receive the full benefit of any cost savings but generally involve greater financial risk because we bear the impact of any cost overruns. In the aggregate, the contract type mix in our revenue for any given period will affect that period's profitability. Over time we have experienced a relatively stable contract mix. However, over the last twelve months we have experienced a shift from time-and-materials contracts to cost-reimbursable contracts.

The table below presents the percentage of total revenue for each type of contract:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Cost-reimbursable (1)	57	%	54	%	57	%	54	%
Time-and-materials	29	%	31	%	29	%	31	%
Fixed-price (2)	14	%	15	%	14	%	15	%

(1) Includes both cost-plus-fixed-fee and cost-plus-award-fee contracts.

(2) Includes fixed-price level of effort contracts.

Contract Diversity and Revenue Mix

We provide services to our clients through a large number of single award contracts and contract vehicles and multiple award contract vehicles. Most of our revenue is generated under indefinite delivery/indefinite quantity, or ID/IQ, contract vehicles, which include multiple award government wide acquisition contract vehicles, or GWACs, and General Services Administration Multiple Award Schedule Contracts, or GSA schedules, and certain single award contracts. GWACs and GSA schedules are available to all U.S. government agencies. Any number of contractors typically compete under multiple award ID/IQ contract vehicles for task orders to provide particular services, and we earn revenue under these contract vehicles only to the extent that we are successful in the bidding process for task orders.

We generate revenue under our contracts and task orders through our provision of services as both a prime contractor and subcontractor, as well as from the provision of services by subcontractors under contracts and task orders for which we act as the prime contractor. The mix of these types of revenue affects our operating margin. Substantially all of our operating margin is derived from direct consulting staff labor and the portion of our operating margin derived from fees we earn on services provided by our subcontractors is not significant. We view growth in direct consulting staff labor as the primary driver of earnings growth. Direct consulting staff labor growth is driven by consulting staff headcount growth, after attrition, and total backlog growth.

Our People

Revenue from our contracts is derived from services delivered by consulting staff and, to a lesser extent, from our subcontractors. Our ability to hire, retain, and deploy talent with skills appropriately aligned with client needs is critical to our ability to grow our revenue. We continuously evaluate whether our talent base is properly sized and contains an optimal mix of skills to meet the rapidly evolving needs of our clients and we seek to achieve that result through recruitment and capacity management. As of September 30, 2012 and 2011, we employed approximately 24,000 and 25,800 people, respectively, of which approximately 21,600 and 23,300, respectively, were consulting staff.

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Contract Backlog

We define backlog to include the following three components:

• Funded Backlog. Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts.

• Unfunded Backlog. Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized.

• Priced Options. Priced contract options represent 100% of the revenue value of all future contract option periods under existing contracts that may be exercised at our clients’ option and for which funding has not been appropriated or otherwise authorized.

Backlog does not include any task orders under ID/IQ contracts, including GWACs and GSA schedules, except to the extent that task orders have been awarded to us under those contracts.

The following table summarizes the value of our contract backlog at the respective dates presented:

	As of September 30
	2012		2011
	(In millions)
Backlog:
Funded	$	3,516	$	3,438
Unfunded (1)	2,785		3,349
Priced options	6,147		6,068
Total backlog	$	12,448	$	12,855

(1) Reflects a reduction by management to the revenue value of orders for services under two existing single award ID/IQ contracts based on an established pattern of funding under these contracts by the U.S. government.

Our backlog includes orders under contracts that in some cases extend for several years. The U.S. Congress generally appropriates funds for our clients on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years. As a result, contracts typically are only partially funded at any point during their term and all or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

We view growth in total backlog and consulting staff headcount as the two key measures of our potential business growth. Growing and deploying consulting staff is the primary means by which we are able to recognize profitable revenue growth. To the extent that we are able to hire additional consulting staff and deploy them against funded backlog, we generally recognize increased revenue. Total backlog decreased by 3.2% from September 30, 2011 to September 30, 2012, while funded backlog increased by 2.3% from September 30, 2011 to September 30, 2012. Additions to funded backlog during the twelve months ended September 30, 2012 totaled $5.9 billion as a result of the conversion of unfunded backlog to funded backlog, the award of new contracts and task orders under which funding was appropriated, and the exercise and subsequent funding of priced options. We report internally on our backlog on a monthly basis and review backlog upon occurrence of certain events to determine if any adjustments are necessary.

We cannot predict with any certainty the portion of our backlog that we expect to recognize as revenue in any future period and we cannot guarantee that we will recognize any revenue from our backlog. The primary risks that could affect our ability to recognize such revenue on a timely basis or at all are: program schedule changes, contract modifications, and our ability to assimilate and deploy new consulting staff against funded backlog; cost cutting initiatives and other efforts to reduce U.S. government spending, which could reduce or delay funding for orders for services; and delayed funding of our contracts due to delays in the completion of the U.S. government's budgeting process and the use of continuing resolutions by the U.S. government to fund its operations. Funded backlog includes orders under contracts for which the period of performance has expired, and we may not recognize revenue on the funded backlog that includes such orders due to, among other reasons, the

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tardy submission of invoices by our subcontractors and the expiration of the relevant appropriated funding in accordance with a pre-determined expiration date such as the end of the U.S. government's fiscal year. The revenue value of orders included in funded backlog that has not been recognized as revenue due to period of performance expirations has not exceeded approximately 4.9% of funded backlog as of the end of any of the eight fiscal quarters preceding the fiscal quarter ended September 30, 2012. In our recent experience, none of the following additional risks have had a material negative effect on our ability to realize revenue from our funded backlog: the unilateral right of the U.S. government to cancel multi-year contracts and related orders or to terminate existing contracts for convenience or default; in the case of unfunded backlog, the potential that funding will not be made available; and, in the case of priced options, the risk that our clients will not exercise their options.

Operating Costs and Expenses

Costs associated with compensation and related expenses for our people are the most significant component of our operating costs and expenses. The principal factors that affect our costs are additional people as we grow our business and are awarded new contracts, task orders, and additional work under our existing contracts, and the hiring of people with specific skill sets and security clearances as required by our additional work. In conjunction with our initial public offering, our Board of Directors adopted a new equity compensation plan. The equity compensation component of the new plan has reduced officer-related compensation expense included in cost of revenue and general and administrative expenses over the near term with such expense reduction to reverse over time.

Our most significant operating costs and expenses are described below.

• Cost of Revenue. Cost of revenue includes direct labor, related employee benefits, and overhead. Overhead consists of indirect costs, including indirect labor relating to infrastructure, management and administration, and other expenses.

• Billable Expenses. Billable expenses include direct subcontractor expenses, travel expenses, and other expenses incurred to perform on contracts.

• General and Administrative Expenses. General and administrative expenses include indirect labor of executive management and corporate administrative functions, marketing and bid and proposal costs, and other discretionary spending.

• Depreciation and Amortization. Depreciation and amortization includes the depreciation of computers, leasehold improvements, furniture and other equipment, and the amortization of internally developed software, as well as third-party software that we use internally, and of identifiable long-lived intangible assets over their estimated useful lives.

Seasonality

The U.S. government's fiscal year ends on September 30 of each year. It is not uncommon for U.S. government agencies to award extra tasks or complete other contract actions in the weeks before the end of its fiscal year in order to avoid the loss of unexpended fiscal year funds. In addition, we also have generally experienced higher bid and proposal costs in the months leading up to the U.S. government's fiscal year end as we pursue new contract opportunities being awarded shortly after the U.S. government fiscal year end as new opportunities are expected to have funding appropriated in the U.S. government's subsequent fiscal year. We may continue to experience this seasonality in future periods, and our future periods may be affected by it.

Critical Accounting Estimates and Policies

There have been no material changes during the period covered by this Quarterly Report to the information disclosed in the Critical Accounting Estimates and Policies section in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report.

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Results of Operations

The following table sets forth items from our condensed consolidated statements of operations for the periods indicated:

	Three Months Ended September 30,						Percent		Six Months Ended September 30,						Percent
	2012			2011			Change		2012			2011			Change
	(Unaudited)			(Unaudited)					(Unaudited)			(Unaudited)
	(In thousands)								(In thousands)
Revenue	$	1,387,650		$	1,429,044		(2.9	)%	$	2,820,074		$	2,875,880		(1.9	)%
Operating costs and expenses:
Cost of revenue	702,066			715,642			(1.9	)%	1,429,436			1,442,473			(0.9	)%
Billable expenses	353,444			380,911			(7.2	)%	731,904			773,101			(5.3	)%
General and administrative expenses	212,498			220,290			(3.5	)%	405,853			432,125			(6.1	)%
Depreciation and amortization	17,613			18,536			(5.0	)%	36,116			36,394			(0.8	)%
Total operating costs and expenses	1,285,621			1,335,379			(3.7	)%	2,603,309			2,684,093			(3.0	)%
Operating income	102,029			93,665			8.9	%	216,765			191,787			13.0	%
Interest expense	(17,811		)	(12,194		)	46.1	%	(29,057		)	(24,488		)	18.7	%
Other, net	(7,343		)	4,051			(281.3	)%	(7,826		)	3,609			(316.8	)%
Income before income taxes	76,875			85,522			(10.1	)%	179,882			170,908			5.3	%
Income tax expense	30,759			10,190			201.9	%	71,821			44,440			61.6	%
Net income	$	46,116		$	75,332		(38.8	)%	$	108,061		$	126,468		(14.6	)%

Three Months Ended September 30, 2012 Compared to Three Months Ended September 30, 2011

Revenue

Revenue decreased to $1,387.7 million from $1,429.0 million, or a 2.9% decrease. The decrease was primarily driven by a decrease in revenue attributable to billable expenses and a lower rate of indirect expenses which reduces revenue under cost reimbursable contracts. The lower rate of indirect expenses is primarily attributable to the cost reduction actions the Company implemented in late fiscal 2012. The negative impact on revenue attributable to these two factors was partially offset by continued modest growth in direct consulting staff labor sold. Additions to funded backlog during the twelve months ended September 30, 2012 totaled $5.9 billion, as a result of the conversion of unfunded backlog to funded backlog, the award of new contracts and task orders under which funding was appropriated, and the exercise and subsequent funding of priced options.

Cost of Revenue

Cost of revenue decreased to $702.1 million from $715.6 million, or a 1.9% decrease. This decrease was primarily due to decrease in salaries and salary related benefits of $21.7 million. The cost of revenue decrease was offset by increases in incentive compensation costs of $6.4 million, employer retirement plan contributions of $1.2 million, and other direct consulting staff expenses of $0.6 million attributable to the modest growth in direct consulting staff labor sold. The increase in incentive compensation costs was due to higher incentive compensation accrual rates in fiscal 2013 as compared to fiscal 2012 offset by reduced headcount in the senior ranks associated with the cost restructuring plan that was implemented during fiscal 2012. The increase in employer retirement plan contributions was due to an increase in the number of employees who completed one year of service and became eligible to participate in our defined contribution plan, the Employees' Capital Accumulation Plan, or ECAP. Cost of revenue as a percentage of revenue was 50.6% and 50.1% in the three months ended September 30, 2012 and 2011, respectively.

Billable Expenses

Billable expenses decreased to $353.4 million from $380.9 million, or a 7.2% decrease. This decrease was primarily due to decreases in travel and material expenses of $10.0 million incurred to perform on contracts and by decreases in subcontractor-related expenses of $25.5 million. The decrease in direct subcontractor-related expenses reflected the reduced amount of government funding available against which to deploy subcontractors. Billable expenses as a percentage of revenue were 25.5% and 26.7% in the three months ended September 30, 2012 and 2011, respectively.

General and Administrative Expenses

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General and administrative expenses decreased to $212.5 million from $220.3 million, or a 3.5% decrease. This decrease was primarily due to a decrease of $9.5 million in other business-related expenses and professional fees attributable to the Company's disciplined management of corporate-related expenditures and a decrease in salaries and salary-related benefits of $7.9 million. These decreases were offset by transaction costs for the pending acquisition of DSES of $2.6 million and increases in incentive compensation costs of $4.6 million and employer retirement plan contributions of $2.5 million. The increase in incentive compensation costs was due to higher incentive compensation accrual rates in fiscal 2013 as compared to fiscal 2012 offset by reduced headcount in the senior ranks associated with the cost restructuring plan that was implemented during fiscal 2012. The increase in employer retirement plan contributions was due to an increase in the number of employees who completed one year of service and became eligible to participate in our defined contribution plan, the ECAP. General and administrative expenses as a percentage of revenue were 15.3% and 15.4% for the three months ended September 30, 2012 and 2011, respectively.

Depreciation and Amortization

Depreciation and amortization decreased to $17.6 million from $18.5 million, or a 5.0% decrease. This decrease was primarily due to a decrease of $1.0 million in the amortization of our intangible assets, which includes below market rate leases and contract backlog that were recorded in connection with the Acquisition, as described in our Annual Report, and are amortized based on contractual lease terms and projected future cash flows, respectively, thereby reflecting higher amortization expense initially and declining expense in subsequent periods. Intangible asset amortization expense decreased to $3.1 million for the three months ended September 30, 2012 compared to $4.1 million for the three months ended September 30, 2011.

Interest Expense

Interest expense increased to $17.8 million from $12.2 million, or a 46.1% increase, primarily due to debt incurred in connection with the Recapitalization Transaction consummated on July 31, 2012, offset slightly by a decrease in the interest expense related to the deferred payment obligation due to payments made by the Company.

Income Tax Expense

Income tax expense increased to $30.8 million from $10.2 million or a 201.9% increase. The effective tax rate increased from 11.9% to 40.0% respectively primarily due to the release of uncertain tax position reserves in the prior year.

Six Months Ended September 30, 2012 Compared to Six Months Ended September 30, 2011

Revenue

Revenue decreased to $2,820.1 million from $2,875.9 million, or a 1.9% decrease. The decrease was primarily driven by a decrease in revenue attributable to billable expenses and a lower rate of indirect expenses which reduces revenue under cost reimbursable contracts. The lower rate of indirect expenses is primarily attributable to the cost reduction actions the Company implemented in late fiscal 2012. The negative impact on revenue attributable to these two factors was partially offset by continued modest growth in direct consulting staff labor sold. Additions to funded backlog during the twelve months ended September 30, 2012 totaled $5.9 billion, as a result of the conversion of unfunded backlog to funded backlog, the award of new contracts and task orders under which funding was appropriated, and the exercise and subsequent funding of priced options.

Cost of Revenue

Cost of revenue decreased to $1,429.4 million from $1,442.5 million, or a 0.9% decrease. This decrease was primarily due to decrease in salaries and salary related benefits of $21.8 million and $1.2 million in stock-based compensation expense. The cost of revenue decrease was offset by increases in employer retirement plan contributions of $2.1 million, and other direct consulting staff expenses of $7.9 million attributable to the modest growth in direct consulting staff labor sold. The increase in employer retirement plan contributions was due to an increase in the number of employees who completed one year of service and became eligible to participate in our defined contribution plan, the ECAP. Cost of revenue as a percentage of revenue was 50.7% and 50.2% in the six months ended September 30, 2012 and 2011, respectively.

Billable Expenses

Billable expenses decreased to $731.9 million from $773.1 million, or a 5.3% decrease. This decrease was primarily due to decreases in travel and material expenses of $19.1 million incurred to perform on contracts and by decreases in subcontractor-related expenses of $24.0 million. The decrease in direct subcontractor-related expenses reflected the reduced amount of government funding available against which to deploy subcontractors. Billable expenses as a percentage of revenue were 26.0% and 26.9% in the six months ended September 30, 2012 and 2011, respectively.

General and Administrative Expenses

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General and administrative expenses decreased to $405.9 million from $432.1 million, or a 6.1% decrease. This decrease was primarily due to a decrease of $24.1 million in other business-related expenses and professional fees attributable to the Company's disciplined management of corporate-related expenditures, a decrease of $5.6 million in salaries and salary-related benefits, and a decrease in stock-based compensation of $2.9 million. These decreases were offset by transaction costs for the pending acquisition of DSES of $2.6 million, increases of $2.0 million in employer retirement plan contributions and incentive compensation costs of $1.8 million. The increase in incentive compensation costs was due to increased incentive compensation accrual rates in fiscal 2013 as compared to fiscal 2012 despite reduced headcount in the senior ranks associated with the cost restructuring plan that was implemented in late fiscal 2012. The increase in employer retirement plan contributions was due to an increase in the number of employees who completed one year of service and became eligible to participate in our defined contribution plan, the ECAP. General and administrative expenses as a percentage of revenue were 14.4% and 15.0% for the six months ended September 30, 2012 and 2011, respectively.

Depreciation and Amortization

Depreciation and amortization decreased to $36.1 million from $36.4 million, or an 0.8% decrease. This decrease in depreciation and amortization expense was primarily due to a decrease of $1.9 million in the amortization of our intangible assets, which includes below market rate leases and contract backlog that were recorded in connection with the Acquisition, as described in our Annual Report, and are amortized based on contractual lease terms and projected future cash flows, respectively, thereby reflecting higher amortization expense initially and declining expense in subsequent periods. Intangible asset amortization expense decreased to $6.3 million for the six months ended September 30, 2012 compared to $8.2 million for the six months ended September 30, 2011.

Interest Expense

Interest expense increased to $29.1 million from $24.5 million, or an 18.7% increase, primarily due to debt incurred in connection with the Recapitalization Transaction consummated on July 31, 2012, offset slightly by a decrease in the interest expense related to the deferred payment obligation due to payments made by the Company.

Income Tax Expense

Income tax expense increased to $71.8 million from $44.4 million or a 61.6% increase. The effective tax rate increased from 26.0% to 39.9% respectively primarily due to the release of uncertain tax position reserves in the prior year.

Liquidity and Capital Resources

We have historically been able to generate sufficient cash to fund our operations, debt payments, capital expenditures, and discretionary funding needs. We had $489.0 million and $484.4 million in cash and cash equivalents as of September 30, 2012 and March 31, 2012 respectively, and our debt totaled $1,737.6 million and $965.4 million as of September 30, 2012 and March 31, 2012 respectively. Due to fluctuations in cash flows and the growth in operations, it may be necessary from time to time in the future to borrow under our senior secured loan facilities to meet cash demands. We anticipate that cash provided by operating activities, cash and cash equivalents, and borrowing capacity under our revolving credit facility will be sufficient to meet our anticipated cash requirements for the next twelve months, which primarily include:

• operating expenses, including salaries;

• working capital requirements to fund the growth of our business;

• capital expenditures which primarily relate to the purchase of computers, business systems, furniture, and leasehold improvements to support our operations;

• debt service requirements for borrowings under our senior secured loan facilities; and

• cash taxes to be paid.

Effective July 31, 2012, the Company consummated the Recapitalization Transaction whereby our debt under the new senior credit facilities total $1.75 billion ($725 million Tranche A and $1,025 million Tranche B) and includes a $500 million revolving credit facility. See "-- Indebtedness."

From time to time we evaluate alternative uses for excess cash resources including debt prepayments, payment of dividends,

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share repurchases or funding acquisitions. Any determination to pursue one or more of the above alternative uses for excess cash is subject to the discretion of our Board of Directors, and will depend upon various factors, including our results of operations, financial condition, liquidity requirements, restrictions that may be imposed by applicable law, our contracts, and our senior secured credit agreement, as amended, and other factors deemed relevant by our Board of Directors.

On December 12, 2011, the Board of Directors approved a $30.0 million share repurchase program, to be funded from cash on hand. As of September 30, 2012, no shares have been repurchased under the program.

During the three and six months ended September 30, 2012, we declared recurring cash dividends totaling $12.1 million ($0.09 per share) and $24.0 million ($0.18 per share). Additionally, during the three and six months ended September 30, 2012, we declared special dividends totaling $903.7 million ($6.50 per share) and $1,112.1 million ($8.00 per share). No other cash dividends were declared for the same periods in fiscal 2012.

For each special dividend declared, the Compensation Committee, as Administrator of the Officers' Rollover Stock Plan and the Equity Incentive Plan, as amended, is required to make a determination under the respective plan's antidilution provision to adjust the outstanding options. For both the $1.50 and $6.50 special dividends, holders of the Rollover Options received a cash payment equal to the amount of the special dividend on the options' mandatory exercise date. For the $1.50 special dividend, holders of EIP options were granted a dividend equivalent equal to the special dividend payable on June 29, 2012 or the vesting of the EIP option, whichever is later. For the $6.50 special dividend, holders of EIP options with a pre-dividend exercise price less than $11.00 per share received a dividend equivalent equal to the amount of the special dividend payable on August 31, 2012 or the vesting of the EIP option, whichever is later. All other EIP options were adjusted by reducing the exercise price by $6.36 which is equal to the difference between the pre-dividend closing fair market value of our Class A Common Stock and the post-dividend opening fair market value of our Class A Common Stock as noted on the New York Stock Exchange.

Associated with the payment of the dividends, and in connection with the authorization of the special dividends, the Company paid accrued interest on the Deferred Payment Obligation, or DPO, of $4.0 million for the three and six months ended September 30, 2012. No such payments were made for the same periods in fiscal 2012.

As described above in Recent Developments, pursuant to the terms of the definitive agreement, the Company expects to close the acquisition of the DSES division in the third quarter of fiscal 2013 and will pay approximately $154 million in cash, funded by available cash on hand, to ARINC Incorporated.

On October 29, 2012, our Board of Directors authorized and declared a regular quarterly cash dividend in the amount of $0.09 per share. The quarterly dividend is payable on November 30, 2012 to shareholders of record on November 13, 2012.

Cash Flows

Cash received from clients, either from the payment of invoices for work performed or for advances in excess of costs incurred, is our primary source of cash. We generally do not begin work on contracts until funding is appropriated by the client. Billing timetables and payment terms on our contracts vary based on a number of factors, including whether the contract type is cost-reimbursable, time-and-materials, or fixed-price. We generally bill and collect cash more frequently under cost-reimbursable and time-and-materials contracts, as we are authorized to bill as the costs are incurred or work is performed. In contrast, we may be limited to bill certain fixed-price contracts only when specified milestones, including deliveries, are achieved. In addition, a number of our contracts may provide for performance-based payments, which allow us to bill and collect cash prior to completing the work.

Accounts receivable is the principal component of our working capital and is generally driven by revenue growth with other short-term fluctuations related to the payment practices of our clients. Our accounts receivable reflect amounts billed to our clients as of each balance sheet date. Our clients generally pay our invoices within 30 days of the invoice date. At any month-end, we also include in accounts receivable the revenue that was recognized in the preceding month, which is generally billed early in the following month. Finally, we include in accounts receivable amounts related to revenue accrued in excess of amounts billed, primarily on our fixed-price and cost-plus-award-fee contracts. The total amount of our accounts receivable can vary significantly over time, but is generally sensitive to revenue levels. Total accounts receivable (billed and unbilled combined, net of allowance for doubtful accounts) days sales outstanding, which we calculate by dividing total accounts receivable by revenue per day during the relevant fiscal quarter, was 57 as of September 30, 2012 and 65 as of March 31, 2012.

The table below sets forth our net cash flows for the periods presented:

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	Six Months Ended September 30,
	2012			2011
	(Unaudited)			(Unaudited)
	(In thousands)
Net cash provided by operating activities	$	389,748		$	177,117
Net cash used in investing activities	(14,375		)	(20,308		)
Net cash (used in) / provided by financing activities	(370,762		)	6,780
Total increase in cash and cash equivalents	$	4,611		$	163,589

Net Cash from Operating Activities

Net cash from operations is primarily affected by the overall profitability of our contracts, our ability to invoice and collect from clients in a timely manner, and our ability to manage our vendor payments. Net cash provided by operations was $389.7 million in the six months ended September 30, 2012 compared to $177.1 million in the same prior year period, or a 120.1% increase. The increase in net cash provided by operations was primarily due to a higher volume in cash collections during the U.S. government's fiscal year end, which resulted in a decrease in DSO. Our higher cash collections was due to more timely payments by our customers that in the comparable prior year period, due in part to the U.S. Government's Office of Management and Budget's July 2012 temporary requirement to pay Department of Defense prime contractors within 15 days, which allows small business contractors and subcontractors to receive payments earlier. As a result, we experienced earlier receipt of monies than in the comparable prior year period.

Net Cash from Investing Activities

Net cash used in investing activities was $14.4 million in the six months ended September 30, 2012 compared to $20.3 million in the same prior year period, or a 29.2% decrease. The decrease in net cash used in investing activities was due to a decrease in capital expenditures. The decrease in capital expenditures was primarily due to the additional facility expansion and computer equipment to support the increase in headcount in fiscal 2012. This decrease was partially offset by proceeds from the sale of the Company's state and local transportation business during fiscal 2012.

Net Cash from Financing Activities

Net cash used in financing activities was $370.8 million in the six months ended September 30, 2012 compared to net cash provided by financing activities of $6.8 million in the same prior year period. The increase in net cash used in financing activities was primarily due to the payment of regular and special dividends and associated dividend equivalents, partially offset by the net proceeds of the Recapitalization Transaction.

Indebtedness

Our debt totaled $1,737.6 million and $965.4 million as of September 30, 2012 and March 31, 2012 respectively. The interest rate in effect for Tranche A was 2.97% and for Tranche B was 4.50% as of September 30, 2012, respectively, and 2.49% and 3.75% as of March 31, 2012, respectively. As of September 30, 2012 and March 31, 2012, there were no amounts outstanding on the revolving credit facilities of $500 million and $275 million respectively. As of September 30, 2012 the Company was in compliance with all of its financial covenants.

On July 31, 2012, the Company consummated a recapitalization transaction, which included the refinancing and termination of the Company's existing senior secured credit agreement with the proceeds of the borrowings under the Company's new senior secured credit agreement. Additionally the net proceeds of the recapitalization were used to pay the special dividend on August 31, 2012, as described above in Liquidity and Capital Resources. The new senior secured credit agreement, or the Credit Agreement, provided the Company with a $725.0 million Term Loan A tranche and a $1,025.0 million Term Loan B tranche, and a $500.0 million revolving credit facility with a sublimit for letters of credit.

In connection with the recapitalization, the Company accelerated the amortization of ratable portions of the Debt Issuance Costs, or DIC, and Original Issuance Discount, or OID, associated with the prior senior secured term loan facilities and portions of the DIC and OID of the Credit Agreement that do not qualify for deferral of $7.2 million. These amounts are reflected in other expense, net in the three months ended September 30, 2012. Furthermore, the Company expensed third party debt issuance costs of $2.7 million that did not qualify for deferral, which are reflected in general and administrative costs in the three months ended September 30, 2012.

Absent any prepayment accelerations of DIC or the effect of changes in interest rates, the following table summarizes the

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estimated annual amortization expense of DIC using the effective interest rate method:

	DIC Amortization Expense
	Total		2013		2014		2015		2016		2017		Thereafter
	(in thousands)
Tranche A Loans	$	12,818	$	1,534	$	2,987	$	2,839	$	2,604	$	2,179	$	675
Tranche B Loans	11,910		771		1,589		1,643		1,715		1,775		4,417
Revolver	10,283		976		1,957		1,957		1,962		1,957		1,474
Total	$	35,011	$	3,281	$	6,533	$	6,439	$	6,281	$	5,911	$	6,566

The Credit Agreement requires quarterly principal payments of 1.25% of the stated principal amount of Tranche A Loans, with annual incremental increases to 1.875%, 2.50%, 3.125%, and 13%, prior to the Tranche A Loans maturity date of December 31, 2017, and 0.25% of the stated principal amount of Tranche B Loans, with the remaining balance payable on the Tranche B Loans maturity date of July 31, 2019. The revolving credit facility matures on December 31, 2017, at which time any outstanding principal balance is due in full.

The interest rate on borrowings under Tranche A is LIBOR plus 2.75%, and will range from 2.00% to 2.75% based on the Company's total leverage ratio. The interest rate on borrowings under Tranche B is LIBOR plus 3.5% with a 1% floor. The revolving credit facility margin and commitment fee are subject to the leveraged based pricing grid, as set forth in the Credit Agreement.

The loans under the Credit Agreement are secured by substantially all of our assets and none of such assets will be available to satisfy the claims of our general creditors. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants are limited to the following, in each case subject to certain exceptions: a maximum net total leverage ratio; a minimum net interest coverage ratio; limitations on indebtedness and liens; mergers, consolidations or amalgamations, or liquidations, wind-ups or dissolutions; dispositions of property; restricted payments; investments; transactions with affiliates; sale and lease back transactions; change in fiscal periods; negative pledges; restrictive agreements; limitations on line of business; limitations on speculative hedging and limitations on changes of names and jurisdictions. In addition, we are required to meet certain financial covenants at each quarter end, namely Consolidated Net Total Leverage and Consolidated Net Interest Coverage Ratios. As of September 30, 2012 we were compliant with these covenants.

Capital Structure and Resources

Our stockholders’ equity amounted to $119.5 million as of September 30, 2012, a decrease of $1,065.7 million compared to stockholders’ equity of $1,185.2 million as of March 31, 2012, primarily due to the payment of special dividends on June 29, 2012 and August 31, 2012, offset by the net increase for the six month period from common stock issuances, stock option exercises, net income of $108.1 million in the six months ended September 30, 2012, and stock-based compensation expense of $14.4 million.

Off-Balance Sheet Arrangements

As of September 30, 2012, we did not have any off-balance sheet arrangements.

Capital Expenditures

Since we do not own any of our facilities, our capital expenditure requirements primarily relate to the purchase of computers, business systems, furniture, and leasehold improvements to support our operations. Direct facility and equipment costs billed to clients are not treated as capital expenses. Our capital expenditures for the six months ended September 30, 2012 and 2011 were $14.4 million and $43.6 million, respectively, and the majority of such capital expenditures related to facilities infrastructure, equipment, and information technology. Expenditures for facilities infrastructure and equipment are generally incurred to support new and existing programs across our business. We also incur capital expenditures for information technology to support programs and general enterprise information technology infrastructure.

Commitments and Contingencies

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We are subject to a number of reviews, investigations, claims, lawsuits, and other uncertainties related to our business. For a discussion of these items, refer to Note 13 to our condensed consolidated financial statements.

Special Note Regarding Forward Looking Statements

This Quarterly Report on Form 10-Q, or Quarterly Report, including information incorporated by reference into this Quarterly Report, contains forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “forecasts,” “expects,” “intends,” “plans,” “anticipates,” “projects,” “outlook,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “preliminary,” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. These forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.

These risks and other factors include: cost cutting and efficiency initiatives and other efforts to reduce U.S. government spending, including automatic sequestration required by the Budget Control Act of 2011, which could reduce or delay funding for orders for services especially in the current political environment; delayed funding of our contracts due to delays in the completion of the U.S. government's budgeting process and the use of continuing resolutions by the U.S. government to fund its operations or related changes in the pattern or timing of government funding and spending; any issue that compromises our relationships with the U.S. government or damages our professional reputation; changes in U.S. government spending and mission priorities that shift expenditures away from agencies or programs that we support; the size of our addressable markets and the amount of U.S. government spending on private contractors; failure to comply with numerous laws and regulations; our ability to compete effectively in the competitive bidding process and delays caused by competitors' protests of major contract awards received by us; the loss of General Services Administration Multiple Award schedule contracts, or GSA schedules, or our position as prime contractor on government-wide acquisition contract vehicles, or GWACs; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time, and resources for our contracts; our ability to generate revenue under certain of our contracts; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in estimates used in recognizing revenue; an inability to attract, train, or retain employees with the requisite skills, experience, and security clearances; an inability to hire, assimilate, and deploy enough employees to serve our clients under existing contracts; an inability to timely and effectively utilize our employees; failure by us or our employees to obtain and maintain necessary security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; increased competition from other companies in our industry; failure to maintain strong relationships with other contractors; inherent uncertainties and potential adverse developments in legal or regulatory proceedings, including litigation, audits, reviews, and investigations, which may result in materially adverse judgments, settlements, withheld payments, penalties, or other unfavorable outcomes including debarment, as well as disputes over the availability of insurance or indemnification; internal system or service failures and security breaches, including, but not limited to, those resulting from external cyber attacks on our network and internal systems; risks related to changes to our operating structure, capabilities, or strategy intended to address client needs, grow our business or respond to market developments; risks associated with new relationships, clients, capabilities, and service offerings in our U.S. and international businesses; failure to comply with special U.S. government laws and regulations relating to our international operations; risks related to our indebtedness and credit facilities which contain financial and operating covenants; the adoption by the U.S. government of new laws, rules, and regulations, such as those relating to organizational conflicts of interest issues; our ability to realize the expected benefits from our acquisition of the DSES division of ARINC Incorporated; risks related to future acquisitions; an inability to utilize existing or future tax benefits, including those related to our stock-based compensation expense, for any reason, including a change in law; variable purchasing patterns under U.S. government GSA schedules, blanket purchase agreements and indefinite delivery, indefinite quantity, or ID/IQ, contracts; and other risks and factors described in Part II, “Item 1A. Risk Factors” and elsewhere in this Quarterly Report.

In light of these risks, uncertainties and other factors, the forward-looking statements contained in this Quarterly Report might not prove to be accurate and you should not place undue reliance upon them. All forward-looking statements speak only as of the date made and we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

There have been no material changes during the period covered by this Quarterly Report on Form 10-Q to the information disclosed in the Quantitative and Qualitative Disclosures about Market Risk section in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K

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for the fiscal year ended March 31, 2012 filed with the Securities and Exchange Commission on May 30, 2012.

Item 4.    Controls and Procedures

Disclosure Controls and Procedures

Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended, or Exchange Act, as of the end of the period covered by this Quarterly Report on Form 10-Q, or Quarterly Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of the end of the period covered by this Quarterly Report, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Our performance under U.S. government contracts and compliance with the terms of those contracts and applicable laws and regulations are subject to continuous audit, review, and investigation by the U.S. government which may include such investigative techniques as subpoenas or civil investigative demands. Given the nature of our business, these audits, reviews, and investigations may focus, among other areas, on various aspects of procurement integrity, labor time reporting, sensitive and/or classified information access and control, executive compensation, and post government employment restrictions. We are not always aware of our status in such matters, but we are currently aware of certain pending audits and investigations involving labor time reporting, procurement integrity, and classified information access. On April 13, 2012, we entered into an Administrative Agreement with the U.S. Air Force, which lifted the proposed debarment of our San Antonio office and removed it from the U.S. government’s Excluded Parties List System. See our Form 10-K for the fiscal year ended March 31, 2012 for additional information. In addition, from time to time, we are also involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with clients and contractors, intellectual property disputes, and other business matters. These legal proceedings seek various remedies, including claims for monetary damages in varying amounts that currently range up to $40.0 million or have a reasonably estimated outcome within that range or are unspecified as to amount. Although the outcome of any such matter is inherently uncertain and may be materially adverse, based on current information, we do not expect any of the currently ongoing audits, reviews, investigations, or litigation to have a material adverse effect on our financial condition and results of operations.

Six former officers and stockholders who had departed the firm prior to the acquisition, as described in our Annual Report, have filed a total of nine suits in various jurisdictions, with original filing dates ranging from July 3, 2008 through December 15, 2009 (three of which were amended on July 2, 2010 and then further amended into one consolidated complaint on September 7, 2010), against us and certain of our current and former directors and officers. Each of the suits arises out of the acquisition, as described in our Annual Report, and alleges that the former stockholders are entitled to certain payments that they would have received if they had held their stock at the time of the acquisition. Some of the suits also allege that the acquisition price paid to stockholders was insufficient. The various suits assert claims for breach of contract, tortious interference with contract, breach of fiduciary duty, civil Racketeer Influenced and Corrupt Organizations Act, or RICO, violations, violations of the Employee Retirement Income Security Act, or ERISA, and/or securities and common law fraud. Two of these suits have been dismissed with all appeals exhausted. Five of the remaining suits are pending in the United States District Court for the Southern District of New York, the sixth is pending in New York state court, and the seventh is pending in the United States District Court for the Southern District of California. The aggregate alleged damages sought in these seven remaining suits is approximately $348.7 million ($291.5 million of which is sought to be trebled pursuant to RICO), plus punitive damages, costs, and fees. Although the outcome of any of these cases is inherently uncertain and may be materially adverse, based on current information, we do not expect them to have a material adverse effect on our financial condition and results of operations.

Item 1A. Risk Factors

There have been no material changes during the period covered by this Quarterly Report on Form 10-Q to the risk factors disclosed in Part I, Item 1A, of our Annual Report on Form 10-K for the fiscal year ended March 31, 2012 filed with the Securities and Exchange Commission on May 30, 2012.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

Exhibit Number	Description
2.1	Agreement and Plan of Merger, dated as of May 15, 2008, by and among Booz Allen Hamilton Inc., Booz Allen Hamilton Holding Corporation (formerly known as Explorer Holding Corporation), Booz Allen Hamilton Investor Corporation (formerly known as Explorer Investor Corporation), Explorer Merger Sub Corporation and Booz & Company Inc. (Incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-1 (File No. 333- 167645))
2.2	Spin Off Agreement, dated as of May 15, 2008, by and among Booz Allen Hamilton Inc., Booz & Company Holdings, LLC, Booz & Company Inc., Booz & Company Intermediate I Inc. and Booz & Company Intermediate II Inc. (Incorporated by reference to Exhibit 2.2 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
2.3	Amendment to the Agreement and Plan of Merger and the Spin Off Agreement, dated as of July 30, 2008, by and among Booz Allen Hamilton Inc., Booz Allen Hamilton Investor Corporation (formerly known as Explorer Investor Corporation), Explorer Merger Sub Corporation, Booz & Company Holdings, LLC, Booz & Company Inc., Booz & Company Intermediate I Inc. and Booz & Company Intermediate II Inc. (Incorporated by reference to Exhibit 2.3 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
3.1	Second Amended and Restated Certificate of Incorporation of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report for the period ended December 31, 2010 on Form 10-Q (File No. 001-34972))
3.2	Second Amended and Restated Bylaws of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 3.2 to the Company’s Quarterly Report for the period ended December 31, 2010 on Form 10-Q (File No. 001-34972))
4.1	Amended and Restated Stockholders Agreement (Incorporated by reference to Exhibit 4.3 to the Company’s Quarterly Report for the period ended December 31, 2010 on Form 10-Q (File No. 001-34972))
4.2	Irrevocable Proxy and Tag-Along Agreement (Incorporated by reference to Exhibit 4.4 to the Company’s Quarterly Report for the period ended December 31, 2010 on Form 10-Q (File No. 001-34972))
4.3	Form of Stock Certificate (Incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.1	Management Agreement, among Booz Allen Hamilton Holding Corporation (formerly known as Explorer Holding Corporation), Booz Allen Hamilton Inc., and TC Group V US, LLC, dated as of July 31, 2008 (Incorporated by reference to Exhibit 10.6 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.2	Amended and Restated Equity Incentive Plan of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.3	Booz Allen Hamilton Holding Corporation Officers’ Rollover Stock Plan (Incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.4	Form of Booz Allen Hamilton Holding Corporation Rollover Stock Option Agreement (Incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.5	Form of Stock Option Agreement under the Equity Incentive Plan of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.6	Form of Stock Option Agreement under the Equity Incentive Plan of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.7	Form of Subscription Agreement (Incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.8	Form of Restricted Stock Agreement for Directors under the Equity Incentive Plan of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.9	Form of Restricted Stock Agreement for Employees under the Equity Incentive Plan of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))

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10.10	Booz Allen Hamilton Holding Corporation Annual Incentive Plan (Incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.11	Booz Allen Hamilton Holding Corporation Officers’ Retirement Plan (Incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.12	Officer’s Comprehensive Medical and Dental Plans (Incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.13	Retired Officer’s Comprehensive Medical and Dental Plans (Incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.14	Excess ECAP Payment Program (Incorporated by reference to Exhibit 10.19 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.15	Group Variable Universal Life Insurance (Incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.16	Group Personal Excess Liability Insurance (Incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.17	Annual Performance Program (Incorporated by reference to Exhibit 10.22 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.18	Form of Booz Allen Hamilton Holding Corporation Director and Officer Indemnification Agreement (Incorporated by reference to Exhibit 10.23 to the Company’s Registration Statement on Form S-1 (File No. 333-167645))
10.19	Form of Stock Option Agreement under the Equity Incentive Plan of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 10.23 to the Company’s Annual Report for the year ended March 31, 2011 on Form 10-K (File No. 001-34972))
10.20	Officer Transition Policy (Incorporated by reference to Exhibit 10.24 to the Company’s Annual Report for the year ended March 31, 2011 on Form 10-K (File No. 001-34972))
10.21	Form of Stock Option Agreement under the Equity Incentive Plan of Booz Allen Hamilton Holding Corporation (Incorporated by reference to Exhibit 10.25 to the Company’s Quarterly Report for the period ended December 31, 2011 on Form 10-Q (File No. 001-34972))
10.22	Administrative Agreement, dated as of April 13, 2012, between Booz Allen Hamilton Inc. and the United States Department of the Air Force (Incorporated by reference to Exhibit 10.1 to the Company’s Periodic Report on Form 8-K filed on April 13, 2012 (File No. 001-34972))
10.23	Amendment No. 1 to the Amended and Restated Stockholders Agreement (Incorporated by reference to Exhibit 10.1 to the Company's Periodic Report on Form 8-K filed on June 14, 2012 (File No. 001-34972))
10.24	Credit Agreement among Booz Allen Hamilton Inc., as the Borrower, the several lenders from time to time parties thereto, Bank of America, N.A., as Administrative Agent, Collateral Agent and Issuing Lender, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Credit Suisse Securities (USA) LLC, as Joint Lead Arrangers, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Credit Suisse Securities (USA) LLC, Barclays Bank PLC, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Morgan Stanley Senior Funding, Inc. and Sumimoto Mitsui Banking Corporation, as Joint Bookrunners, Credit Suisse Securities (USA) LLC, as Syndication Agent, Barclays Bank PLC, Citigroup Global Markets Inc., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, Morgan Stanley Senior Funding, Inc., Sumimoto Mitsui Banking Corporation and The Bank of Tokyo-Mitsubishi UFJ, Ltd., as Co-Documentation Agents, dated as of July 31, 2012 (Incorporated by reference to Exhibit 10.1 to the Company’s Periodic Report on Form 8-K filed on August 1, 2012 (File No. 001-34972))
10.25	Guarantee and Collateral Agreement, among Booz Allen Hamilton Investor Corporation, Booz Allen Hamilton Inc., and the Subsidiary Guarantors party thereto, in favor of Bank of America, N.A., as Collateral Agent, dated as of July 31, 2012 (Incorporated by reference to Exhibit 10.2 to the Company’s Periodic Report on Form 8-K filed on August 1, 2012 (File No. 001-34972))
31.1	Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer*
31.2	Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer*
32.1	Certification of the Chief Executive Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)*
32.2	Certification of the Chief Financial Officer required by Rule 13a-14(b) or Rule 15d-14(b) and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350)*

33

101 The following materials from Booz Allen Hamilton Holding Corporation’s Quarterly Report on Form 10-Q for the three months ended June 30, 2012, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Statements of Operations for the three and six months ended September 30, 2012 and 2011; (ii) Condensed Consolidated Statements of Comprehensive Income for the three and six months ended September 30, 2012 and 2011; (iii) Condensed Consolidated Balance Sheets at September 30, 2012 and March 31, 2012; (iv) Condensed Consolidated Statements of Cash Flows for the six months ended September 30, 2012 and 2011; and (v) Notes to Condensed Consolidated Financial Statements.**

___________________________________

* Filed electronically herewith.

** Pursuant to Rule 406T of Regulation S-T, the Interactive Data Files on Exhibit 101 hereto are deemed not filed or part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, are deemed not filed for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended, and otherwise are not subject to liability under those sections

34

SIGNATURES

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

		Booz Allen Hamilton Holding Corporation
		Registrant
Date: October 31, 2012	By:	/s/ Samuel R. Strickland
		Samuel R. Strickland Executive Vice President Chief Financial Officer, Chief Administrative Officer and Director (Principal Financial and Accounting Officer)

35

EX-31.1

Exhibit 31.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13A-14(A) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Ralph W. Shrader, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Booz Allen Hamilton Holding Corporation.

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.

(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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

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 adversely affect the registrant's ability to record, process, summarize and report financial information.

(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: October 31, 2012	By:	/s/ Ralph W. Shrader
		Ralph W. Shrader Chairman of the Board President and Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13A-14(A) OF THE

SECURITIES EXCHANGE ACT OF 1934, AS AMENDED

I, Samuel R. Strickland, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Booz Allen Hamilton Holding Corporation.

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.

(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 that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

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 adversely affect the registrant's ability to record, process, summarize and report financial information.

(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: October 31, 2012	By:	/s/ Samuel R. Strickland
		Samuel R. Strickland Executive Vice President Chief Financial Officer, Chief Administrative Officer and Director (Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the report on Form 10-Q of Booz Allen Hamilton Holding Corporation (the “Company”) for the fiscal quarter ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Chairman of the Board and 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.

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

Date: October 31, 2012	By:	/s/ Ralph W. Shrader
		Ralph W. Shrader Chairman of the Board President and Chief Executive Officer (Principal Executive Officer)

A signed original of this written statement required by Section 906 has been provided to Booz Allen Hamilton Holding Corporation and will be retained by Booz Allen Hamilton Holding Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATIONS PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the report on Form 10-Q of Booz Allen Hamilton Holding Corporation (the “Company”) for the fiscal quarter ended September 30, 2012, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned Executive Vice President and Chief Financial Officer, Chief Administrative Officer and Director 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.

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

Date: October 31, 2012	By:	/s/ Samuel R. Strickland
		Samuel R. Strickland Executive Vice President Chief Financial Officer, Chief Administrative Officer and Director (Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to Booz Allen Hamilton Holding Corporation and will be retained by Booz Allen Hamilton Holding Corporation and furnished to the Securities and Exchange Commission or its staff upon request.

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Stock-Based Compensation (Dividends) (Details) (USD $)	3 Months Ended		6 Months Ended		1 Months Ended						3 Months Ended	6 Months Ended	1 Months Ended	3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Jul. 31, 2012 Ordinary Dividend	May 31, 2012 Ordinary Dividend	Jul. 31, 2012 Special Cash Dividend	May 31, 2012 Special Cash Dividend	Aug. 31, 2012 Stock options Special Cash Dividend	Aug. 31, 2012 Stock options Special Cash Dividend EIP	Sep. 30, 2012 Stock options Special Cash Dividend EIP	Sep. 30, 2012 Stock options Special Cash Dividend EIP	Aug. 31, 2012 Stock options Special Cash Dividend Rollover Options	Sep. 30, 2012 Stock options Special Cash Dividend Rollover Options
Dividends [Line Items]
Dividends declared per share	$ 6.59	$ 0.00	$ 8.18	$ 0.00	$ 0.09	$ 0.09	$ 6.50	$ 1.50
Cash payment for special dividends			$ 37,731,000	$ 0					$ 37,700,000	$ 28,700,000			$ 9,000,000
Dividend declared, pre-dividend exercise price per share, maximum										$ 11
Dividend, option exercise price reduction, per share										$ 6.36
Share-based compensation arrangement, plan modification, incremental compensation cost										3,800,000
Share-based compensation arrangement, plan modification, incremental compensation cost recognized in period												2,200,000
Share-based compensation arrangement, plan modification, incremental compensation cost, deferred											$ 1,600,000	$ 1,600,000
Share-based compensation arrangement, plan modification, incremental compensation cost, deferred, recognition period											4 years 9 months			9 months

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Income Taxes (Details)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Tax Disclosure [Abstract]
Effective income tax rate	40.00%	11.90%	39.90%	26.00%
Statutory rate	35.00%	35.00%	35.00%	35.00%

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Employee Benefit Plans (Tables)

6 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

Components of net postretirement medical expense

The components of net postretirement medical expense for the Officer Medical Plan were as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Service cost	$	973	$	1,000	$	1,946	$	1,956
Interest cost	787		724		1,573		1,493
Total postretirement medical expense	$	1,760	$	1,724	$	3,519	$	3,449

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Commitments and Contingecies (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended		3 Months Ended		6 Months Ended
	Sep. 30, 2012 leases	Mar. 31, 2012	Sep. 30, 2012 Contracts with U.S. government agencies or other U.S. government contractors	Sep. 30, 2011 Contracts with U.S. government agencies or other U.S. government contractors	Sep. 30, 2012 Contracts with U.S. government agencies or other U.S. government contractors	Sep. 30, 2011 Contracts with U.S. government agencies or other U.S. government contractors
Commitments and Contingencies Disclosure [Abstract]
Number of facility leases assigned to Booz & Co., outstanding	9
Maximum potential amount of undiscounted future lease payments	$ 30.4
Liability for reductions and/or penalties from U.S Governement audits	$ 143.7	$ 127.2
Concentration Risk [Line Items]
Concentration risk, percentage			99.00%	98.00%	99.00%	98.00%

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Stock-Based Compensation (Stock-based Compensation Expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 7,605	$ 7,771	$ 14,367	$ 18,448
Cost of revenue
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	2,168	2,213	4,095	5,269
General and administrative expenses
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Stock-based compensation expense	$ 5,437	$ 5,558	$ 10,272	$ 13,179

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Earnings Per Share

6 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

The Company computes basic and diluted earnings per share amounts based on net income for the periods presented. The Company uses the weighted average number of common shares outstanding during the period to calculate basic earnings per share, or EPS. Diluted EPS adjusts the weighted average number of shares outstanding to include the dilutive effect of outstanding common stock options and other stock-based awards.

The Company currently has outstanding shares of Class A Common Stock, Class B Non-Voting Common Stock, Class C Restricted Common Stock, and Class E Special Voting Common Stock. Class E Special Voting Common Stock shares are not included in the calculation of EPS as these shares represent voting rights only and are not entitled to participate in dividends or other distributions. Unvested Class A Restricted Common Stock and unvested Class C Restricted Common Stock holders are entitled to participate in dividends or other distributions. These unvested shares participated in the Company's dividends declared and paid in the first and second quarters of fiscal 2013, and as such, EPS is calculated using the two-class method, whereby earnings are reduced by the dividends declared and paid to the restricted shareholders. No such dividends were paid in the first and second quarters of fiscal 2012, as such EPS is calculated using the treasury stock method. A reconciliation of the income used to compute basic and diluted EPS for the periods presented are as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Earnings for basic computations (a)	$	38,511	$	75,332	$	99,205	$	126,468
Weighted-average Class A Common Stock outstanding	129,686,292		125,883,669		128,809,548		124,432,403
Weighted-average Class B Non-Voting Common Stock outstanding	2,431,003		2,833,324		2,452,728		2,929,808
Weighted-average Class C Restricted Common Stock outstanding	1,319,600		1,739,986		1,358,210		1,863,790
Total weighted-average common shares outstanding for basic computations	133,436,895		130,456,979		132,620,486		129,226,001
Earnings for diluted computations (a)	$	38,511	$	75,332	$	99,205	$	126,468
Dilutive stock options and restricted stock	10,812,267		10,802,985		11,027,991		11,374,985
Average number of common shares outstanding for diluted computations	144,249,162		141,259,964		143,648,477		140,600,986
Earnings per common share
Basic	$	0.29	$	0.58	$	0.75	$	0.98
Diluted	$	0.27	$	0.53	$	0.69	$	0.90

(a) During the three and six months ended September 30, 2012 approximately 1.2 million participating securities were paid dividends totaling $7.6 million and $8.9 million, respectively, that comprises the difference from net income presented on the condensed consolidated statements of operations.

In the EPS calculation for the three and six months ended September 30, 2012, 219,000 and 13,000 options, respectively, were not included in the EPS calculation as their impact was anti-dilutive. For the three and six months ended September 30, 2011, 2.2 million options were not included in the EPS calculation as their impact was anti-dilutive.

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Commitments and Contingencies (Litigation) (Details) (USD $) In Millions, unless otherwise specified	6 Months Ended	12 Months Ended	18 Months Ended	30 Months Ended
	Sep. 30, 2012	Mar. 31, 2012	Dec. 15, 2009 plaintiffs claims	Sep. 30, 2012 claims	Jul. 02, 2010 claims
Legal proceedings and investigations arising in the ordinary course of business | Maximum
Loss Contingencies [Line Items]
Loss contingencies, damages sought, value	$ 40.0
Former stockholder litigation
Loss Contingencies [Line Items]
Loss contingencies, number of plaintiffs			6
Loss contingencies, new claims filed, number			9
Loss contingencies, claims amended, number					3
Loss contingencies, claims dismissed, number				2
Loss contingencies, damages sought, value	348.7	348.7
Former stockholder litigation | United States District Court for the Southern District of New York
Loss Contingencies [Line Items]
Loss contingencies, pending claims, number	5			5
Former stockholder litigation | New York state court
Loss Contingencies [Line Items]
Loss contingencies, pending claims, number	1			1
Former stockholder litigation | United States District Court for the Southern District of California
Loss Contingencies [Line Items]
Loss contingencies, pending claims, number	1			1
Former stockholder litigation | RICO
Loss Contingencies [Line Items]
Loss contingencies, damages sought, value	$ 291.5	$ 291.5

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Earnings Per Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended				6 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Earnings for basic computations	$ 38,511	[1]	$ 75,332	[1]	$ 99,205	[1]	$ 126,468	[1]
Weighted-average common shares outstanding for basic computations	133,436,895		130,456,979		132,620,486		129,226,001
Earnings for diluted computations	38,511	[1]	75,332	[1]	99,205	[1]	126,468	[1]
Dilutive stock options and restricted stock	10,812,267		10,802,985		11,027,991		11,374,985
Average number of common shares outstanding for diluted computations	144,249,162		141,259,964		143,648,477		140,600,986
Earnings per common share, Basic	$ 0.29		$ 0.58		$ 0.75		$ 0.98
Earnings per common share, Diluted	$ 0.27		$ 0.53		$ 0.69		$ 0.90
Unvested shares, cash dividends paid					37,731		0
Unvested Class A and Class C Restricted Common Stock
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Unvested shares participating in the payment of the Company's dividends declared	1,200,000				1,200,000
Unvested shares, cash dividends paid	$ 7,600				$ 8,900
Stock options
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Antidilutive options excluded from the computation of EPS	219,000		2,220,000		13,000		2,200,000
Common stock, Class A
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average common shares outstanding for basic computations	129,686,292		125,883,669		128,809,548		124,432,403
Non-voting common stock, Class B
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average common shares outstanding for basic computations	2,431,003		2,833,324		2,452,728		2,929,808
Restricted common stock, Class C
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items]
Weighted-average common shares outstanding for basic computations	1,319,600		1,739,986		1,358,210		1,863,790

[1] During the three and six months ended September 30, 2012 approximately 1.2 million participating securities were paid dividends totaling $7.6 million and $8.9 million, respectively, that comprises the difference from net income presented on the condensed consolidated statements of operations.

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Business Overview (Details)	Sep. 30, 2012 employees
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of employees	24,000

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Subsequent Events (Details) (USD $)	3 Months Ended		6 Months Ended		1 Months Ended				3 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Jul. 31, 2012 Ordinary Dividend	May 31, 2012 Ordinary Dividend	Oct. 31, 2012 Subsequent Event Dividend Declared Ordinary Dividend	Oct. 16, 2012 Subsequent Event Defense Systems Engineering and Support (DSES) division of ARINC Incorporated	Sep. 30, 2012 Subsequent Event Defense Systems Engineering and Support (DSES) division of ARINC Incorporated General and administrative expenses	Oct. 16, 2012 Subsequent Event Defense Systems Engineering and Support (DSES) division of ARINC Incorporated Minimum	Oct. 16, 2012 Subsequent Event Defense Systems Engineering and Support (DSES) division of ARINC Incorporated Maximum
Subsequent Event [Line Items]
Business acquisition, percentage of voting interests acquired								100.00%
Business acquisition, purchase price								$ 154,000,000
Business acquisition, transaction costs										3,500,000.0	4,000,000.0
Business acquisition, transactions costs recongized during period									$ 2,600,000
Dividends declared per share	$ 6.59	$ 0.00	$ 8.18	$ 0.00	$ 0.09	$ 0.09	$ 0.09

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Accounts Receivable, Net (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012
Current
Accounts receivable–billed	$ 331,169		$ 331,169		$ 436,314
Accounts receivable–unbilled	509,240		509,240		641,800
Allowance for doubtful accounts	(762)		(762)		(799)
Accounts receivable, net	839,647		839,647		1,077,315
Long-term
Unbilled receivables related to retainage and holdbacks	19,527		19,527		24,163
Total accounts receivable, net	859,174		859,174		1,101,478
Provision for doubtful accounts	$ 150	$ 2,300	$ 890	$ 2,900

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Accrued Compensation and Benefits (Details) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Accrued Compensation and Benefits [Abstract]
Bonus	$ 41,092,000	$ 83,464,000
Retirement	134,256,000	86,723,000
Vacation	134,727,000	143,154,000
Stock Based Compensation Liability	59,388,000	8,936,000
Other	26,944,000	35,595,000
Total accrued compensation and benefits	396,407,000	357,872,000
Restructuring liability	$ 3,700,000	$ 11,100,000

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Basis of Presentation

6 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BASIS OF PRESENTATION

BASIS OF PRESENTATION

The Company prepared the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q, or Quarterly Report, in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. As a result, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted. The Company followed the accounting policies used and disclosed in the consolidated financial statements included in the Annual Report on Form 10-K for the fiscal year ended March 31, 2012 filed with the Securities and Exchange Commission on May 30, 2012, or Annual Report. The Company’s fiscal year ends on March 31 and unless otherwise noted, references to fiscal year or fiscal are for fiscal years ended March 31.

The interim financial information in this Quarterly Report reflects all adjustments, consisting of normal recurring adjustments except as otherwise disclosed, necessary for a fair presentation of the Company’s results of operations for the interim periods. The results of operations for the six months ended September 30, 2012 are not necessarily indicative of results to be expected for the full fiscal year.

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Areas of the financial statements where estimates may have the most significant effect include allowance for doubtful accounts, contractual and regulatory reserves, lives of tangible and intangible assets, impairment of long-lived assets, accrued liabilities, revenue recognition, bonus and other incentive compensation, stock-based compensation, realization of deferred tax assets, provisions for income taxes, and postretirement obligations. Actual results experienced by the Company may differ materially from management's estimates.

Recent Accounting Pronouncements

Recent accounting pronouncements issued by the FASB during the three months ended September 30, 2012 and through the filing date did not or are not believed by management to have a material impact on the Company's present or historical condensed consolidated financial statements.

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Debt (Details) (USD $)	3 Months Ended	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Mar. 31, 2012
Long-term Debt, Current and Noncurrent [Abstract]
Long-term debt	$ 1,737,588,000	$ 1,737,588,000	$ 965,425,000
Less: Current portion of long-term debt	(46,500,000)	(46,500,000)	(42,500,000)
Long-term debt, net of current portion	1,691,088,000	1,691,088,000	922,925,000
Amortization of original issuance discount on debt	7,200,000
Debt issuance costs	2,700,000
Long-term debt, unamortized discount	12,400,000	12,400,000	4,600,000
Secured Debt
Long-term Debt, Current and Noncurrent [Abstract]
Extinguishment of debt during period	1,000,000,000
Secured Debt | Tranche A Loans
Long-term Debt, Current and Noncurrent [Abstract]
Interest rate	2.97%	2.97%	2.49%
Long-term debt	724,165,000	724,165,000	472,870,000
Term loan, face amount	725,000,000	725,000,000
Quarterly principal periodic payment percentage		1.25%
Quarterly principal periodic payment percentage, year two	1.875%	1.875%
Quarterly principal periodic payment percentage, year three	2.50%	2.50%
Quarterly principal periodic payment percentage, year four	3.125%	3.125%
Quarterly principal periodic payment percentage, year five	13.00%	13.00%
Long-term debt, variable rate basis	LIBOR
Long-term debt, basis spread on variable rate	2.75%	2.75%
Extinguishment of debt during period	500,000,000
Secured Debt | Tranche A Loans | Minimum
Long-term Debt, Current and Noncurrent [Abstract]
Long-term debt, basis spread on variable rate	2.00%	2.00%
Secured Debt | Tranche A Loans | Maximum
Long-term Debt, Current and Noncurrent [Abstract]
Long-term debt, basis spread on variable rate	2.75%	2.75%
Secured Debt | Tranche B Loans
Long-term Debt, Current and Noncurrent [Abstract]
Interest rate	4.50%	4.50%	3.75%
Long-term debt	1,013,423,000	1,013,423,000	492,555,000
Term loan, face amount	1,025,000,000	1,025,000,000
Quarterly principal periodic payment percentage		0.25%
Quarterly principal periodic payment percentage, year two	0.25%	0.25%
Quarterly principal periodic payment percentage, year three	0.25%	0.25%
Quarterly principal periodic payment percentage, year four	0.25%	0.25%
Quarterly principal periodic payment percentage, year five	0.25%	0.25%
Quarterly principal periodic payment percentage, year six	0.25%	0.25%
Long-term debt, variable rate basis	LIBOR
Long-term debt, basis spread on variable rate	3.50%	3.50%
Extinguishment of debt during period	500,000,000
Secured Debt | Tranche B Loans | Minimum
Long-term Debt, Current and Noncurrent [Abstract]
Long-term debt, basis spread on variable rate	1.00%	1.00%
Revolving Credit Facility
Long-term Debt, Current and Noncurrent [Abstract]
Revolving credit facility, maximum borrowing capacity	500,000,000	500,000,000
Revolving credit facility, amount outstanding	0	0	0
Extinguishment of debt during period	275,000,000
Letter of Credit
Long-term Debt, Current and Noncurrent [Abstract]
Revolving credit facility, maximum borrowing capacity	$ 100,000,000	$ 100,000,000

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Stock-Based Compensation (Recorded and Unrecorded Stock-based Compensation Liability) (Details) (Special Cash Dividend, USD $)	3 Months Ended
	Sep. 30, 2012		Mar. 31, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Recorded and unrecorded stock-based compensation liability, current and noncurrent	$ 119,300,000		$ 38,300,000
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation liability, current	59,384,000	[1]	8,939,000	[1]
Stock-based compensation liability, noncurrent	45,223,000	[2]	27,724,000	[2]
Stock-based compensation liability, current and noncurrent	104,607,000		36,663,000
Stock options | EIP
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation liability, current	13,311,000	[1]
Stock-based compensation liability, current and noncurrent	13,311,000
Share-based compensation arrangement, plan modification, incremental compensation cost, deferred, recognition period	4 years 9 months
Unrecorded stock-based compensation liability, current and noncurrent	6,600,000
Stock options | Rollover Options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation liability, current	46,073,000	[1]	8,939,000	[1]
Stock-based compensation liability, noncurrent	45,223,000	[2]	27,724,000	[2]
Stock-based compensation liability, current and noncurrent	91,296,000		36,663,000
Share-based compensation arrangement, plan modification, incremental compensation cost, deferred, recognition period	9 months
Unrecorded stock-based compensation liability, current and noncurrent	$ 8,100,000		$ 1,600,000

[1] Included in accrued compensation and benefits (Note 5).

[2] Included in other long-term liabilities.

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Condensed Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Mar. 31, 2012
Current assets:
Cash and cash equivalents	$ 488,979	$ 484,368
Accounts receivable, net of allowance	839,647	1,077,315
Prepaid expenses and other current assets	114,036	95,980
Total current assets	1,442,662	1,657,663
Property and equipment, net of accumulated depreciation	174,640	191,079
Intangible assets, net of accumulated amortization	217,576	223,834
Goodwill	1,187,715	1,188,004
Other long-term assets	67,485	54,211
Total assets	3,090,078	3,314,791
Current liabilities:
Current portion of long-term debt	46,500	42,500
Accounts payable and other accrued expenses	449,199	443,951
Accrued compensation and benefits	396,407	357,872
Other current liabilities	76,948	70,123
Total current liabilities	969,054	914,446
Long-term debt, net of current portion	1,691,088	922,925
Other long-term liabilities	310,402	292,235
Total liabilities	2,970,544	2,129,606
Commitments and contingencies (Note 13)
Stockholders' equity:
Treasury stock, at cost — 389,321 shares at September 30, 2012 and 333,775 shares at March 31, 2012	(6,226)	(5,377)
Additional paid-in capital	94,135	898,541
Retained earnings	38,473	299,379
Accumulated other comprehensive loss	(8,235)	(8,715)
Total stockholders' equity	119,534	1,185,185
Total liabilities and stockholders' equity	3,090,078	3,314,791
Common stock, Class A
Stockholders' equity:
Common stock	1,322	1,287
Non-voting common stock, Class B
Stockholders' equity:
Common stock	24	25
Restricted common stock, Class C
Stockholders' equity:
Common stock	14	15
Special voting common stock, Class E
Stockholders' equity:
Common stock	$ 27	$ 30

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities
Net income	$ 108,061	$ 126,468
Adjustments to reconcile net income to net cash provided by operating activities:
Gain on sale of state and local transportation business	0	(4,082)
Transaction costs on sale of state and local transportation business	0	(5,432)
Depreciation and amortization	36,116	36,394
Amortization of debt issuance costs	2,672	2,400
Amortization of original issuance discount on debt	646	550
Loss on extinguishment	9,879	0
Excess tax benefits from the exercise of stock options	(16,305)	(15,960)
Stock-based compensation expense	14,367	18,448
Loss on disposition of property and equipment	956	10
Changes in assets and liabilities:
Accounts receivable, net	237,668	71,045
Prepaid expenses and other current assets	(2,066)	(6,674)
Other long-term assets	5,549	11,847
Accrued compensation and benefits	(21,616)	(49,198)
Accounts payable and other accrued expenses	1,144	21,135
Accrued interest	4,075	4,694
Other current liabilities	(6,488)	6,412
Other long-term liabilities	2,114	(28,116)
Net cash provided by operating activities	389,748	177,117
Cash flows from investing activities
Purchases of property and equipment	(14,375)	(43,640)
Proceeds from sale of state and local transportation business	0	23,332
Net cash used in investing activities	(14,375)	(20,308)
Cash flows from financing activities
Net proceeds from issuance of common stock	3,359	4,695
Cash dividends paid	(1,097,773)	0
Dividend equivalents to option holders	(37,731)	0
Repayment of debt	(970,000)	(15,000)
Net proceeds from debt	1,710,143	0
Excess tax benefits from the exercise of stock options	16,305	15,960
Stock option exercises	5,784	6,502
Repurchases of common stock	(849)	(5,377)
Net cash used in financing activities	(370,762)	6,780
Net increase (decrease) in cash and cash equivalents	4,611	163,589
Cash and cash equivalents-beginning of period	484,368	192,631
Cash and cash equivalents-end of period	488,979	356,220
Cash paid during the period for:
Interest	17,622	17,085
Income taxes	$ 65,732	$ 50,072

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Stockholders' Equity Stockholders' Equity (Common Stock Shares Activity) (Details)	6 Months Ended		12 Months Ended
	Sep. 30, 2012		Mar. 31, 2012
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Treasury stock, shares, beginning of period	333,775		0
Repurchase of common stock	55,546	[1]	333,775	[2]
Treasury stock, shares, end of period	389,321		333,775
Common stock, Class A
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, shares issued, beginning of period	128,726,324		122,784,835
Issuance of common stock	950,268		1,080,245
Stock options exercised	2,315,996		3,799,989
Share exchange	216,488		1,061,255
Common stock, shares issued, end of period	132,209,076		128,726,324
Non-voting common stock, Class B
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, shares issued, beginning of period	2,487,125		3,053,130
Share exchange	(85,271)		(566,005)
Common stock, shares issued, end of period	2,401,854		2,487,125
Restricted common stock, Class C
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, shares issued, beginning of period	1,533,020		2,028,270
Share exchange	(131,217)		(495,250)
Common stock, shares issued, end of period	1,401,803		1,533,020
Special voting common stock, Class E
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Common stock, shares issued, beginning of period	10,140,067		12,348,860
Stock options exercised	(1,197,748)		(2,208,793)
Common stock, shares issued, end of period	8,942,319		10,140,067

[1] Reflects shares repurchased on July 2, 2012 to cover for the withholding taxes on restricted stock awards that vested on June 30, 2012.

[2] Reflects shares repurchased during the three months ended September 30, 2011 associated with the share surrender program that was limited to Rollover Options (defined below) that were required to be exercised between June 30, 2011 and September 15, 2011.

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Accounts Receivable, Net (Tables)

6 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Accounts receivable, net

Accounts receivable, net consisted of the following:

	September 30, 2012			March 31, 2012
Current
Accounts receivable–billed	$	331,169		$	436,314
Accounts receivable–unbilled	509,240			641,800
Allowance for doubtful accounts	(762		)	(799		)
Accounts receivable, net	839,647			1,077,315
Long-term
Unbilled receivables related to retainage and holdbacks	19,527			24,163
Total accounts receivable, net	$	859,174		$	1,101,478

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Stockholders' Equity Stockholders' Equity (Employee Stock Purchase Plan and Special Cash Dividend) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended		1 Months Ended				3 Months Ended	6 Months Ended	23 Months Ended	1 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Jul. 31, 2012 Special Cash Dividend	May 31, 2012 Special Cash Dividend	Jul. 31, 2012 Ordinary Dividend	May 31, 2012 Ordinary Dividend	Sep. 30, 2012 Employee Stock Purchase Plan Common stock, Class A	Sep. 30, 2012 Employee Stock Purchase Plan Common stock, Class A	Sep. 30, 2012 Employee Stock Purchase Plan Common stock, Class A	Aug. 31, 2012 Stock options Special Cash Dividend	Aug. 31, 2012 Stock options Rollover Options Special Cash Dividend	Aug. 31, 2012 Stock options EIP Special Cash Dividend
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Employee stock purchase plan, aggregate shares									10,000,000	10,000,000	10,000,000
Employee stock purchase plan, purchase price discount from the fair market value										5.00%
Shares purchased by employees under the employee stock purchase plan									122,004		786,805
Dividends declared per share	$ 6.59	$ 0.00	$ 8.18	$ 0.00	$ 6.50	$ 1.50	$ 0.09	$ 0.09
Cash payment for special dividends			$ 37,731	$ 0								$ 37,700	$ 9,000	$ 28,700

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Debt (Tables)

6 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Debt

Debt consisted of the following:

	September 30, 2012					March 31, 2012
	Interest Rate		Outstanding Balance			Interest Rate		Outstanding Balance
Tranche A Loans	2.97	%	$	724,165		2.49	%	$	472,870
Tranche B Loans	4.50	%	1,013,423			3.75	%	492,555
Total			1,737,588					965,425
Less: Current portion of long-term debt			(46,500		)			(42,500		)
Long-term debt, net of current portion			$	1,691,088				$	922,925

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Business Overview

6 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

BUSINESS OVERVIEW

BUSINESS OVERVIEW

Organization

Booz Allen Hamilton Holding Corporation, including its wholly owned subsidiaries, or Holding or the Company, is an affiliate of The Carlyle Group, or Carlyle, and was incorporated in Delaware in May 2008. The Company provides management and technology consulting services primarily to the U.S. government and its agencies in the defense, intelligence, and civil markets. The Company offers clients functional knowledge spanning strategy and organization, analytics, technology, and operations, which it combines with specialized expertise in clients’ mission and domain areas to help solve critical problems. The Company reports operating results and financial data in one operating segment. The Company is headquartered in McLean, Virginia, with approximately 24,000 employees as of September 30, 2012.

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Condensed Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2012	Mar. 31, 2012
Treasury stock, shares	389,321	333,775
Common stock, Class A
Common stock, par value	0.01	0.01
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	132,209,076	128,726,324
Common stock, shares outstanding	131,819,755	128,392,549
Non-voting common stock, Class B
Common stock, par value	0.01	0.01
Common stock, shares authorized	16,000,000	16,000,000
Common stock, shares issued	2,401,854	2,487,125
Common stock, shares outstanding	2,401,854	2,487,125
Restricted common stock, Class C
Common stock, par value	0.01	0.01
Common stock, shares authorized	5,000,000	5,000,000
Common stock, shares issued	1,401,803	1,533,020
Common stock, shares outstanding	1,401,803	1,533,020
Special voting common stock, Class E
Common stock, par value	0.003	0.003
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	8,942,319	10,140,067
Common stock, shares outstanding	8,942,319	10,140,067

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Financial Instruments

6 Months Ended

Sep. 30, 2012

Derivative Instruments and Hedging Activities Disclosure [Abstract]

FINANCIALS INSTRUMENTS

FINANCIAL INSTRUMENTS

The fair value of the Company's cash and cash equivalents, trade accounts receivable, and accounts payable approximates its carrying value at September 30, 2012 and March 31, 2012 because of the short-term nature of these amounts. The fair value of the Company's debt instruments approximates its carrying value at September 30, 2012 and March 31, 2012. The fair value of debt is determined based on interest rates available for debt with terms and maturities similar to the Company's existing debt arrangements.

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Document and Entity Information	6 Months Ended
	Sep. 30, 2012	Oct. 29, 2012 Common stock, Class A	Oct. 29, 2012 Non-voting common stock, Class B	Oct. 29, 2012 Restricted common stock, Class C	Oct. 29, 2012 Special voting common stock, Class E
Entity Registrant Name	Booz Allen Hamilton Holding Corp
Entity Central Index Key	0001443646
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--03-31
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		132,045,531	2,350,854	1,372,336	8,942,319

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Related-Party Transactions

6 Months Ended

Sep. 30, 2012

Related Party Transactions [Abstract]

RELATED-PARTY TRANSACTIONS

RELATED-PARTY TRANSACTIONS

The Company is an affiliate of Carlyle, and from time to time, and in the ordinary course of business: (1) other Carlyle portfolio companies engage the Company as a subcontractor or service provider, and (2) the Company engages other Carlyle portfolio companies as subcontractors or service providers. Revenue and cost associated with these related parties for the three months ended September 30, 2012 were $195,000 and $185,000, respectively, and $345,000 and $329,000 for the six months ended September 30, 2012, respectively. Revenue and cost associated with these related parties for the three months ended September 30, 2011 were $343,000 and $305,000, respectively, and $946,000 and $852,000 for the six months ended September 30, 2011, respectively.

On July 31, 2008, the Company entered into a management agreement, or Management Agreement, with TC Group V US, L.L.C., or TC Group, a company affiliated with Carlyle. In accordance with the Management Agreement, TC Group provides the Company with advisory, consulting, and other services and the Company pays TC Group an aggregate annual fee of $1.0 million, plus expenses. For the three months ended September 30, 2012 and 2011, the Company incurred $250,000 in advisory fees. For the six months ended September 30, 2012 and 2011, the Company incurred $500,000 in advisory fees.

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Statement [Abstract]
Revenue	$ 1,387,650	$ 1,429,044	$ 2,820,074	$ 2,875,880
Operating costs and expenses:
Cost of revenue	702,066	715,642	1,429,436	1,442,473
Billable expenses	353,444	380,911	731,904	773,101
General and administrative expenses	212,498	220,290	405,853	432,125
Depreciation and amortization	17,613	18,536	36,116	36,394
Total operating costs and expenses	1,285,621	1,335,379	2,603,309	2,684,093
Operating income	102,029	93,665	216,765	191,787
Interest expense	(17,811)	(12,194)	(29,057)	(24,488)
Other, net	(7,343)	4,051	(7,826)	3,609
Income before income taxes	76,875	85,522	179,882	170,908
Income tax expense	30,759	10,190	71,821	44,440
Net income	$ 46,116	$ 75,332	$ 108,061	$ 126,468
Earnings per common share (Note 3):
Basic (in dollars per share)	$ 0.29	$ 0.58	$ 0.75	$ 0.98
Diluted (in dollars per share)	$ 0.27	$ 0.53	$ 0.69	$ 0.90
Dividends declared per share	$ 6.59	$ 0.00	$ 8.18	$ 0.00

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Debt

6 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

DEBT

DEBT

Debt consisted of the following:

	September 30, 2012					March 31, 2012
	Interest Rate		Outstanding Balance			Interest Rate		Outstanding Balance
Tranche A Loans	2.97	%	$	724,165		2.49	%	$	472,870
Tranche B Loans	4.50	%	1,013,423			3.75	%	492,555
Total			1,737,588					965,425
Less: Current portion of long-term debt			(46,500		)			(42,500		)
Long-term debt, net of current portion			$	1,691,088				$	922,925

On July 31, 2012, the Company consummated a recapitalization transaction, or Recapitalization Transaction, which included the refinancing and termination of the Company's existing senior secured credit agreement with the proceeds of the borrowings under the Company's new senior secured credit agreement, or Credit Agreement. The Credit Agreement provided the Company with a $725.0 million Term Loan A tranche and a $1,025.0 million Term Loan B tranche, and a $500.0 million revolving credit facility, with a sublimit for letters of credit of $100.0 million. The outstanding obligations under the Credit Agreement are secured by a security interest in substantially all of the assets of the Company, subject to certain exceptions set forth in the Credit Agreement and related documentation.

In connection with the Recapitalization Transaction, the Company accelerated the amortization of ratable portions of the Debt Issuance Costs, or DIC, and Original Issuance Discount, or OID, associated with the prior senior secured term loan facilities and portions of the DIC and OID of the Credit Agreement that do not qualify for deferral of $7.2 million. These amounts are reflected in other expense, net in the three months ended September 30, 2012. Furthermore, the Company expensed third party debt issuance costs of $2.7 million that did not qualify for deferral, which are reflected in general and administrative costs in the three months ended September 30, 2012.

The Credit Agreement requires quarterly principal payments of 1.25% of the stated principal amount of Tranche A Loans, with annual incremental increases to 1.875%, 2.50%, 3.125%, and 13.0%, prior to the Tranche A Loans' maturity date of December 31, 2017, and 0.25% of the stated principal amount of Tranche B Loans, with the remaining balance payable on the Tranche B Loans' maturity date of July 31, 2019. The revolving credit facility matures on December 31, 2017, at which time any outstanding principal balance is due in full. As of September 30, 2012 and March 31, 2012, there were no amounts outstanding on the revolving credit facility.

The interest rate on borrowings under Tranche A is LIBOR plus 2.75%, and will range from 2.00% to 2.75% based on the Company's total leverage ratio. The interest rate on borrowings under Tranche B is LIBOR plus 3.5% with a 1% floor. The revolving credit facility margin and commitment fee are subject to the leveraged based pricing grid, as set forth in the Credit Agreement.

Prior to the Recapitalization Transaction, the Company maintained a senior secured credit agreement, as amended, with a syndicate of lenders. The senior secured credit agreement, as amended, provided for $1.0 billion in term loans ($500.0 million of Tranche A Loans and $500.0 million of Tranche B Loans) and a $275.0 million revolving credit facility. The loans under the senior secured credit agreement, as amended, were secured by substantially all of the Company’s assets.

The total outstanding debt balance is recorded in the accompanying condensed consolidated balance sheets, net of unamortized discount of $12.4 million and $4.6 million as of September 30, 2012 and March 31, 2012, respectively.

Both the Credit Agreement and the senior secured credit agreement, as amended, require the maintenance of certain financial and non-financial covenants. The loans under the Credit Agreement are secured by substantially all of our assets and none of such assets will be available to satisfy the claims of our general creditors. The Credit Agreement contains customary representations and warranties and customary affirmative and negative covenants. The negative covenants are limited to the following, in each case subject to certain exceptions: a maximum net total leverage ratio; a minimum net interest coverage ratio; limitations on indebtedness and liens; mergers, consolidations or amalgamations, or liquidations, wind-ups or dissolutions; dispositions of property; restricted payments; investments; transactions with affiliates; sale and lease back transactions; change in fiscal periods; negative pledges; restrictive agreements; limitations on line of business; limitations on speculative hedging and limitations on changes of names and jurisdictions. In addition, we are required to meet certain financial covenants at each quarter end, namely Consolidated Net Total Leverage and Consolidated Net Interest Coverage Ratios. As of September 30, 2012 and March 31, 2012, the Company was in compliance with all of its covenants.

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Accrued Compensation and Benefits

6 Months Ended

Sep. 30, 2012

Accrued Compensation and Benefits [Abstract]

ACCRUED COMPENSATION AND BENEFITS

ACCRUED COMPENSATION AND BENEFITS

Accrued compensation and benefits consisted of the following:

	September 30, 2012		March 31, 2012
Bonus	$	41,092	$	83,464
Retirement	134,256		86,723
Vacation	134,727		143,154
Stock-based compensation liability (Note 10)	59,388		8,936
Other	26,944		35,595
Total accrued compensation and benefits	$	396,407	$	357,872

Total accrued compensation and benefits includes a restructuring liability of $3.7 million at September 30, 2012 and $11.1 million at March 31, 2012, respectively.

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Accrued Compensation and Benefits (Tables)

6 Months Ended

Sep. 30, 2012

Accrued Compensation and Benefits [Abstract]

Accrued compensation and benefits

Accrued compensation and benefits consisted of the following:

	September 30, 2012		March 31, 2012
Bonus	$	41,092	$	83,464
Retirement	134,256		86,723
Vacation	134,727		143,154
Stock-based compensation liability (Note 10)	59,388		8,936
Other	26,944		35,595
Total accrued compensation and benefits	$	396,407	$	357,872

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Commitments and Contingencies

6 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Leases

As a result of the July 2008 merger transaction, as described in the Company’s Annual Report, the Company assigned a total of nine leases to Booz & Co. The facilities are located in New York, New York; Troy, Michigan; Florham Park, New Jersey; Parsippany, New Jersey; Houston, Texas; Chicago, Illinois; Cleveland, Ohio; Dallas, Texas; and London, England. Except for the Houston, Cleveland and Dallas leases, which expired, the Company remains liable under the terms of the original leases should Booz & Co. default on its obligations. There were no events of default under these leases as of September 30, 2012 and March 31, 2012. The maximum potential amount of undiscounted future payments is $30.4 million, and the leases expire at different dates between February 2013 and March 2017. Based on the Company’s assessment of the likelihood of future payment, no amounts have been recorded related to the Company’s contingent liability on such leases.

Government Contracting Matters

For the three and six months ended September 30, 2012, approximately 99% of the Company’s revenue was generated from contracts with U.S. government agencies or other U.S. government contractors, and approximately 98% for the three and six months ended September 30, 2011. Contracts with the U.S. government are subject to extensive legal and regulatory requirements and, from time to time and in the ordinary course of business, agencies of the U.S. government investigate whether the Company’s operations are conducted in accordance with these requirements and the terms of the relevant contracts by using investigative techniques as subpoenas or civil investigative demands. U.S. government investigations of the Company, whether related to the Company’s U.S. government contracts or conducted for other reasons, could result in administrative, civil, or criminal liabilities, including repayments, fines, or penalties being imposed upon the Company, or could lead to suspension or debarment from future U.S. government contracting. Management believes it has adequately reserved for any losses that may be experienced from any investigation of which it is aware. The Defense Contract Management Agency Administrative Contracting Officer has negotiated annual final indirect cost rates through fiscal year 2006. Audits of subsequent years may result in cost reductions and/or penalties. Management believes it has adequately reserved for any losses that may be experienced from any such reductions and/or penalties. As of September 30, 2012 and March 31, 2012, the Company has recorded a liability of approximately $143.7 million and $127.2 million, respectively, for its current best estimate of amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs incurred subsequent to fiscal year 2006.

Litigation

The Company is involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with clients and contractors, intellectual property disputes, and other business matters. These legal proceedings seek various remedies, including claims for monetary damages in varying amounts that currently range up to $40 million or have a reasonably estimated outcome within that range, or are unspecified as to amount. Although the outcome of any such matter is inherently uncertain and may be materially adverse, based on current information, management does not expect any of the currently ongoing audits, reviews, investigations, or litigation to have a material adverse effect on the Company’s financial condition and results of operations.

Six former officers and stockholders who had departed the firm prior to the acquisition, as described in the Company’s Annual Report, have filed a total of nine suits in various jurisdictions, with original filing dates ranging from July 3, 2008 through December 15, 2009 (three of which were amended on July 2, 2010 and then further amended into one consolidated complaint on September 7, 2010) against the Company and certain of the Company’s current and former directors and officers. Each of the suits arises out of the acquisition and alleges that the former stockholders are entitled to certain payments that they would have received if they had held their stock at the time of the acquisition. Some of the suits also allege that the acquisition price paid to stockholders was insufficient. The various suits assert claims for breach of contract, tortious interference with contract, breach of fiduciary duty, civil Racketeer Influenced and Corrupt Organizations Act, or RICO, violations, violations of the Employee Retirement Income Security Act, and/or securities and common law fraud. Two of these suits have been dismissed with all appeals exhausted. Five of the remaining suits are pending in the United States District Court for the Southern District of New York, the sixth is pending in New York state court and the seventh is pending in the United States District Court for the Southern District of California. As of September 30, 2012 and March 31, 2012, the aggregate alleged damages sought in the seven remaining suits was approximately $348.7 million ($291.5 million of which is sought to be trebled pursuant to RICO) plus punitive damages, costs, and fees. Although the outcome of any of these cases is inherently uncertain and may be materially adverse, based on current information, we do not expect them to have a material adverse effect on our financial condition and results of operations.

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Stockholders' Equity

6 Months Ended

Sep. 30, 2012

Equity [Abstract]

STOCKHOLDERS' EQUITY

STOCKHOLDERS’ EQUITY

Common Stock

The common stock shares activity consisted of the following:

	Class A Common Stock	Class B Non-Voting Common Stock	Class C Restricted Common Stock		Class E Special Voting Common Stock		Treasury Stock
Balance at March 31, 2011	122,784,835	3,053,130	2,028,270		12,348,860		—
Issuance of common stock	1,080,245	—	—		—		—
Stock options exercised	3,799,989	—	—		(2,208,793)		—
Share exchange	1,061,255	(566,005)	(495,250)		—		—
Repurchase of common stock (1)	—	—	—		—		333,775
Balance at March 31, 2012	128,726,324	2,487,125	1,533,020		10,140,067		333,775
Issuance of common stock	950,268	—	—		—		—
Stock options exercised	2,315,996	—	—		(1,197,748	)	—
Share exchange	216,488	(85,271)	(131,217	)	—		—
Repurchase of common stock (2)	—	—	—		—		55,546
Balance at September 30, 2012	132,209,076	2,401,854	1,401,803		8,942,319		389,321

(1) Reflects shares repurchased during the three months ended September 30, 2011 associated with the share surrender program that was limited to Rollover Options (defined below) that were required to be exercised between June 30, 2011 and September 15, 2011.

(2) Reflects shares repurchased on July 2, 2012 to cover for the withholding taxes on restricted stock awards that vested on June 30, 2012.

In connection with the Company’s initial public offering in November 2010, the Company established a tax qualified Employee Stock Purchase Plan, or ESPP, which is designed to enable eligible employees to periodically purchase shares of the Company’s Class A Common Stock up to an aggregate of 10,000,000 shares at a five percent discount from the fair market value of the Company’s common stock. The ESPP provides for quarterly offering periods, the first of which commenced on April 1, 2011. For the quarterly offering period that closed on September 30, 2012, 122,004 Class A Common Stock shares were purchased by employees under the ESPP. As of the program's inception, 786,805 shares have been purchased by employees.

On July 30, 2012 our Board of Directors authorized and declared a special cash dividend of $6.50 per share and a regular quarterly cash dividend in the amount of $0.09 per share. Both the special dividend and quarterly dividends were paid on August 31, 2012. The dividends were accounted for on July 31, 2012, the declaration date, by reducing retained earnings to zero with the remainder being recorded as a reduction to additional paid-in capital. The total payout of the dividend has been presented as a financing activity within the Condensed Consolidated Statement of Cash Flows. Additionally, the Company paid $9.0 million to holders of Rollover Options (described below in Note 10) and $28.7 million to holders of Amended and Restated Equity Incentive Plan, or EIP, Options (described below in Note 10.) The $37.7 million is presented as a financing activity within the Condensed Consolidated Statement of Cash Flows.

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Income Taxes

6 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company’s effective income tax rate was 40.0% and 11.9% for the three months ended September 30, 2012 and 2011, respectively, and 39.9% and 26.0% for the six months ended September 30, 2012 and 2011, respectively. The three and six month effective tax rates of 40.0% and 39.9%, respectively, differ from the statutory rate of 35.0% due to state and foreign taxes and the effect of permanent rate differences, which primarily relate to meals and entertainment.

The Company is also subject to taxes imposed by various taxing authorities including state and foreign jurisdictions. Tax years related to state and foreign jurisdictions that remain open and subject to examination are not considered to be material, or will be indemnified under the merger agreement as described in the Company's Annual Report.

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Employee Benefit Plans

6 Months Ended

Sep. 30, 2012

Compensation and Retirement Disclosure [Abstract]

EMPLOYEE BENEFIT PLANS

EMPLOYEE BENEFIT PLANS

Defined Contribution Plan

The Company sponsors the Employees’ Capital Accumulation Plan, or ECAP, which is a qualified defined contribution plan that covers eligible U.S. and international employees. ECAP provides for distributions, subject to certain vesting provisions, to participants by reason of retirement, death, disability, or termination of employment. Total expense recognized under ECAP for the three months ended September 30, 2012 and 2011 was $59.3 million and $55.5 million, respectively, and $118.8 million and $114.7 million for the six months ended September 30, 2012 and 2011, respectively. The Company-paid contributions for the three months ended September 30, 2012 and 2011 were $30.0 million and $28.3 million, respectively, and $71.3 million and $70.0 million for the six months ended September 30, 2012 and 2011, respectively.

Defined Benefit Plan and Other Postretirement Benefit Plans

The Company maintains and administers a postretirement medical plan and a defined benefit retirement plan for current, retired, and resigned officers.

The components of net postretirement medical expense for the Officer Medical Plan were as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Service cost	$	973	$	1,000	$	1,946	$	1,956
Interest cost	787		724		1,573		1,493
Total postretirement medical expense	$	1,760	$	1,724	$	3,519	$	3,449

As of September 30, 2012 and March 31, 2012, the unfunded status of the Officer Medical Plan was $66.6 million and $63.6 million, respectively, which is included in other long-term liabilities in the accompanying condensed consolidated balance sheets.

Total expense for the Company’s Retired Officers’ Bonus Plan was $186,000 and $217,000 for the three months ended September 30, 2012 and 2011, respectively, and $371,000 and $434,000 for the six months ended September 30, 2012 and 2011, respectively. The Retired Officers’ Bonus Plan is an unfunded plan and contributions are made as benefits are paid. As of September 30, 2012 and March 31, 2012, the accumulated liability of $4.8 million and $4.6 million, respectively, is included in other long-term liabilities in the accompanying condensed consolidated balance sheets is unfunded.

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Stock-Based Compensation

6 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

The following table summarizes stock-based compensation expense recognized in the condensed consolidated statements of operations:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Cost of revenue	$	2,168	2,213		$	4,095	$	5,269
General and administrative expenses	5,437		5,558		10,272		13,179
Total	$	7,605	$	7,771	$	14,367	$	18,448

As of September 30, 2012, there was $30.3 million of total unrecognized compensation cost related to unvested stock-based compensation agreements. The unrecognized compensation cost as of September 30, 2012 is expected to be amortized over 4.75 years.

Officers’ Rollover Stock Plan

For the three and six months ended September 30, 2012, 0 and 136,200 shares of Class C Restricted Common Stock, or Class C Restricted Stock, vested. Total compensation expense recorded in conjunction with all Class C Restricted Stock for the three months ended September 30, 2012 and 2011 was $59,000 and $148,000, respectively, and $192,000 and $740,000 for the six months ended September 30, 2012 and 2011, respectively. Future compensation cost related to non-vested Class C Restricted Stock not yet recognized in the condensed consolidated statements of operations was $178,000, and is expected to be fully recognized by June 30, 2013.

A portion of the old stock rights held by Booz Allen Hamilton Inc.’s U.S. government consulting partners issued under the stock rights plan that existed for Booz Allen Hamilton Inc.’s officers prior to the merger transaction, as described in the Company’s Annual Report, were exchanged for new options, or Rollover Options. As of September 30, 2012, there were 8,239,293 Rollover Options outstanding, of which 1,879,375 were unvested. Total compensation expense recorded in conjunction with all Rollover Options for the three months ended September 30, 2012 and 2011 was $578,000 and $2.0 million, respectively, and $1.8 million and $7.1 million for the six months ended September 30, 2012 and 2011, respectively. Future compensation cost related to non-vested Rollover Options not yet recognized in the condensed consolidated statements of operations was $1.7 million, and is expected to be fully recognized by June 30, 2013.

Equity Incentive Plan

On August 2, 2012, 20,000 options were granted under the EIP. The estimated fair value of our Class A Common Stock on August 2, 2012 at the time of the option grant, was $17.32.

As of September 30, 2012, there were 10,860,741 EIP options outstanding, of which 5,486,402 were unvested. Total compensation expense recorded in conjunction with EIP options for the three months ended September 30, 2012 and 2011 was $2.2 million and $3.1 million, respectively, and $6.4 million and $8.0 million for the six months ended September 30, 2012 and 2011, respectively. Future compensation cost related to non-vested EIP options not yet recognized in the condensed consolidated statements of operations was $15.5 million, and is expected to be recognized over 4.75 years.

Grants of Class A Restricted Common Stock

On June 29, 2012, the Board of Directors granted 674,456 shares of Class A Restricted Stock in conjunction with the Annual Incentive Plan adopted on October 1, 2010. The amount of the annual incentive payment was determined based on performance targets established by the Compensation Committee and a portion of the bonus was paid in the form of Class A Restricted Stock. Equity awards will vest based on the passage of time, subject to the officer’s continued employment by the Company. The portion to be paid in the form of equity will be recognized in the accompanying consolidated statements of operations based on grant date fair value over the vesting period of three years and the aggregate value was estimated at $10.3 million based on the stock price of $15.28 on the grant date. On August 2, 2012, the Board of Directors granted 24,251 shares of Class A Restricted Stock to certain members of the Board of Directors.

Total compensation expense recorded in conjunction with Class A Restricted Stock for the three and six months ended September 30, 2012 was $2.5 million and $3.8 million, respectively. Future compensation cost related to this award not yet recognized in the condensed consolidated statements of operations was $11.3 million and is expected to be recognized over 2.75 years.

Dividends

On May 29, 2012, our Board of Directors authorized and declared a regular quarterly cash dividend in the amount of $0.09 per share. In addition, the Board of Directors declared a special cash dividend of $1.50 per share. Both the quarterly and special dividend were paid on June 29, 2012 to stockholders of record on June 11, 2012. The Compensation Committee, as the Administrator of the Officers' Rollover Stock Plan and the EIP, made a required adjustment to the outstanding options under each plan by granting holders of the Rollover Options a cash payment equal to the amount of the special dividend on the options' mandatory exercise date and by granting the holders of EIP options a dividend equivalent equal to the special dividend and payable on June 29, 2012 or the vesting of the EIP option, whichever is later.

On July 30, 2012, our Board of Directors authorized and declared a special cash dividend of $6.50 per share and a regular quarterly cash dividend in the amount of $0.09 per share. The dividends were paid on August 31, 2012 to stockholders of record on August 13, 2012 for the special cash dividend and August 14, 2012 for the regular quarterly cash dividend. The Board of Directors, as the Administrator of the Officers' Rollover Stock Plan and the EIP, made a determination to adjust the outstanding options under each plan.  

Holders of the Rollover Options received a cash payment equal to the amount of the special dividend on the options' mandatory exercise date. On August 31, 2012, Rollover options holders received a dividend equivalent payment of $9.0 million related to the special dividend. Holders of EIP options with a pre-dividend exercise price less than $11.00 per share received a dividend equivalent equal to the amount of the special dividend payable on August 31, 2012 or the vesting of the EIP option, whichever is later. On August 31, 2012, vested outstanding EIP options received a dividend equivalent payment of $28.7 million related to the August 2012 special dividend. All other EIP options were adjusted, based on authorization from the Board of Directors, by reducing the exercise price by $6.36 which is equal to the difference between the pre-dividend closing fair market value of our Class A Common Stock and the post-dividend opening fair market value of our Class A Common Stock as noted on the New York Stock Exchange. Payment of the dividend equivalents and adjustments to option exercise prices were accounted for as modifications resulting in incremental benefit to the option holders resulting in additional compensation expense of $3.8 million. Total compensation expense recorded in conjunction with the payment of the dividend equivalent to holders of unvested EIP options for the six months ended September 30, 2012 was $2.2 million. Future compensation cost related to payment of the dividend equivalents to holders of EIP options not yet recognized in the statement of operations is $1.6 million and is expected to be recognized over 4.75 years.

As of September 30, 2012 and March 31, 2012, the Company calculated a total recorded and unrecorded stock-based compensation liability of $119.3 million and $38.3 million, respectively, related to the special dividends paid in December 2009, June 2012, and August 2012, as follows:

	September 30, 2012						March 31, 2012
	EIP Options		Rollover Options		Total		EIP Options		Rollover Options		Total
Current portion of liability1	$	13,311	$	46,073	$	59,384	$	—	$	8,939	$	8,939
Long-term portion of liability2	—		45,223		45,223		—		27,724		27,724
	$	13,311	$	91,296	$	104,607	$	—	$	36,663	$	36,663

¹ Included in accrued compensation and benefits (Note 5).

² Included in other long-term liabilities.

As of September 30, 2012, $8.1 million related to Rollover Options and $6.6 million related to EIP Options will be recorded as liabilities as the related compensation expense is recognized over the next three quarters for Rollover Options and 4.75 years for EIP Options. As of March 31, 2012, there was a similar unrecognized liability of $1.6 million related to Rollover Options .

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Employee Benefit Plans (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Mar. 31, 2012
Compensation and Retirement Disclosure [Abstract]
Employees’ Capital Accumulation Plan, Total expense recongnized	$ 59,300,000	$ 55,500,000	$ 118,800,000	$ 114,700,000
Employees’ Capital Accumulation Plan, Company-paid contributions	30,000,000	28,300,000	71,300,000	70,000,000
Retired Officers' Bonus Plan
Defined Benefit Plan Disclosure [Line Items]
Total benefit cost	186,000	217,000	371,000	434,000
Defined benefit plan, unfunded status of plan	4,800,000		4,800,000		4,600,000
Officer Medical Plan
Defined Benefit Plan Disclosure [Line Items]
Service cost	973,000	1,000,000	1,946,000	1,956,000
Interest cost	787,000	724,000	1,573,000	1,493,000
Total benefit cost	1,760,000	1,724,000	3,519,000	3,449,000
Defined benefit plan, unfunded status of plan	$ 66,600,000		$ 66,600,000		$ 63,600,000

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Earnings Per Share (Tables)

6 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Reconciliation of the income used to compute basic and diluted EPS

A reconciliation of the income used to compute basic and diluted EPS for the periods presented are as follows:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Earnings for basic computations (a)	$	38,511	$	75,332	$	99,205	$	126,468
Weighted-average Class A Common Stock outstanding	129,686,292		125,883,669		128,809,548		124,432,403
Weighted-average Class B Non-Voting Common Stock outstanding	2,431,003		2,833,324		2,452,728		2,929,808
Weighted-average Class C Restricted Common Stock outstanding	1,319,600		1,739,986		1,358,210		1,863,790
Total weighted-average common shares outstanding for basic computations	133,436,895		130,456,979		132,620,486		129,226,001
Earnings for diluted computations (a)	$	38,511	$	75,332	$	99,205	$	126,468
Dilutive stock options and restricted stock	10,812,267		10,802,985		11,027,991		11,374,985
Average number of common shares outstanding for diluted computations	144,249,162		141,259,964		143,648,477		140,600,986
Earnings per common share
Basic	$	0.29	$	0.58	$	0.75	$	0.98
Diluted	$	0.27	$	0.53	$	0.69	$	0.90

(a) During the three and six months ended September 30, 2012 approximately 1.2 million participating securities were paid dividends totaling $7.6 million and $8.9 million, respectively, that comprises the difference from net income presented on the condensed consolidated statements of operations.

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Stockholders' Equity (Tables)

6 Months Ended

Sep. 30, 2012

Equity [Abstract]

Common stock shares activity

The common stock shares activity consisted of the following:

	Class A Common Stock	Class B Non-Voting Common Stock	Class C Restricted Common Stock		Class E Special Voting Common Stock		Treasury Stock
Balance at March 31, 2011	122,784,835	3,053,130	2,028,270		12,348,860		—
Issuance of common stock	1,080,245	—	—		—		—
Stock options exercised	3,799,989	—	—		(2,208,793)		—
Share exchange	1,061,255	(566,005)	(495,250)		—		—
Repurchase of common stock (1)	—	—	—		—		333,775
Balance at March 31, 2012	128,726,324	2,487,125	1,533,020		10,140,067		333,775
Issuance of common stock	950,268	—	—		—		—
Stock options exercised	2,315,996	—	—		(1,197,748	)	—
Share exchange	216,488	(85,271)	(131,217	)	—		—
Repurchase of common stock (2)	—	—	—		—		55,546
Balance at September 30, 2012	132,209,076	2,401,854	1,401,803		8,942,319		389,321

(1) Reflects shares repurchased during the three months ended September 30, 2011 associated with the share surrender program that was limited to Rollover Options (defined below) that were required to be exercised between June 30, 2011 and September 15, 2011.

(2) Reflects shares repurchased on July 2, 2012 to cover for the withholding taxes on restricted stock awards that vested on June 30, 2012.

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Related-Party Transactions (Details) (USD $)	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Related Party Transactions [Abstract]
Revenue associated with related parties	$ 195,000	$ 343,000	$ 345,000	$ 946,000
Cost associated with related parties	185,000	305,000	329,000	852,000
Management agreement, annual fee	1,000,000		1,000,000
Management agreement, advisory fees	$ 250,000	$ 250,000	$ 500,000	$ 500,000

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Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Statement of Other Comprehensive Income [Abstract]
Net income	$ 46,116	$ 75,332	$ 108,061	$ 126,468
Change in postretirement plan costs, net of tax	381	108	480	215
Comprehensive income	$ 46,497	$ 75,440	$ 108,541	$ 126,683

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Accounts Receivable, Net

6 Months Ended

Sep. 30, 2012

Receivables [Abstract]

ACCOUNTS RECEIVABLE, NET

ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

	September 30, 2012			March 31, 2012
Current
Accounts receivable–billed	$	331,169		$	436,314
Accounts receivable–unbilled	509,240			641,800
Allowance for doubtful accounts	(762		)	(799		)
Accounts receivable, net	839,647			1,077,315
Long-term
Unbilled receivables related to retainage and holdbacks	19,527			24,163
Total accounts receivable, net	$	859,174		$	1,101,478

The Company recognized a provision for doubtful accounts of $150,000 and $2.3 million for the three months ended September 30, 2012 and 2011, respectively, and $890,000 and $2.9 million for the six months ended September 30, 2012 and 2011, respectively. Long-term unbilled receivables related to retainage, holdbacks, and long-term rate settlements to be billed at contract closeout are included in other long-term assets as accounts receivable in the accompanying condensed consolidated balance sheets.

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Stock-Based Compensation (Tables)

6 Months Ended

Sep. 30, 2012

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Stock-based compensation expense recognized in the condensed consolidated statements of operations

The following table summarizes stock-based compensation expense recognized in the condensed consolidated statements of operations:

	Three Months Ended September 30,				Six Months Ended September 30,
	2012		2011		2012		2011
Cost of revenue	$	2,168	2,213		$	4,095	$	5,269
General and administrative expenses	5,437		5,558		10,272		13,179
Total	$	7,605	$	7,771	$	14,367	$	18,448

Recorded stock-based compensation liabilities

	September 30, 2012						March 31, 2012
	EIP Options		Rollover Options		Total		EIP Options		Rollover Options		Total
Current portion of liability1	$	13,311	$	46,073	$	59,384	$	—	$	8,939	$	8,939
Long-term portion of liability2	—		45,223		45,223		—		27,724		27,724
	$	13,311	$	91,296	$	104,607	$	—	$	36,663	$	36,663

¹ Included in accrued compensation and benefits (Note 5).

² Included in other long-term liabilities.

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Stock-Based Compensation (Stock Plans) (Details) (USD $)	6 Months Ended		3 Months Ended		6 Months Ended		3 Months Ended		6 Months Ended		1 Months Ended	3 Months Ended		6 Months Ended		1 Months Ended		3 Months Ended	6 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Rollover Options Restricted stock Restricted common stock, Class C	Sep. 30, 2011 Rollover Options Restricted stock Restricted common stock, Class C	Sep. 30, 2012 Rollover Options Restricted stock Restricted common stock, Class C	Sep. 30, 2011 Rollover Options Restricted stock Restricted common stock, Class C	Sep. 30, 2012 Rollover Options Stock options	Sep. 30, 2011 Rollover Options Stock options	Sep. 30, 2012 Rollover Options Stock options	Sep. 30, 2011 Rollover Options Stock options	Aug. 31, 2012 EIP Stock options	Sep. 30, 2012 EIP Stock options	Sep. 30, 2011 EIP Stock options	Sep. 30, 2012 EIP Stock options	Sep. 30, 2011 EIP Stock options	Aug. 31, 2012 Annual Incentive Plan Restricted stock Common stock, Class A	Jun. 30, 2012 Annual Incentive Plan Restricted stock Common stock, Class A	Sep. 30, 2012 Annual Incentive Plan Restricted stock Common stock, Class A	Sep. 30, 2012 Annual Incentive Plan Restricted stock Common stock, Class A
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares vested in period			0		136,200
Stock options outstanding							8,239,293		8,239,293			10,860,741		10,860,741
Nonvested stock options							1,879,375		1,879,375			5,486,402		5,486,402
Stock options granted											20,000
Stock options granted, value, per share											$ 17.32
Restricted stock granted																24,251	674,456
Restricted stock, vesting period																			3 years
Restricted stock granted, fair value																	$ 10,300,000
Restricted stock granted, value, per share																	$ 15.28
Stock-based compensation expense	14,367,000	18,448,000	59,000	148,000	192,000	740,000	578,000,000	2,000,000	1,800,000	7,100,000		2,200,000	3,100,000	6,400,000	8,000,000			2,500,000	3,800,000
Unrecognized compensation cost related to unvested stock-based compensation agreements	$ 30,300,000		$ 178,000		$ 178,000		$ 1,700,000		$ 1,700,000			$ 15,500,000		$ 15,500,000				$ 11,300,000	$ 11,300,000
Unrecognized compensation cost, amortization period	4 years 9 months													4 years 9 months					2 years 9 months

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Subsequent Events

6 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

On October 16, 2012, the Company announced that it had entered into a definitive agreement to acquire the Defense Systems Engineering and Support, or DSES, division of ARINC Incorporated. The Company expects to complete the acquisition of 100% of the membership interests of the entity that owns DSES in the third quarter of fiscal 2013.

Pursuant to the terms of the definitive agreement, the Company will pay approximately $154 million in cash to ARINC Incorporated. The acquisition of DSES will be accounted for under the purchase method of accounting which requires the total purchase consideration to be allocated to the assets acquired and liabilities assumed based on estimates of fair value. The excess of the purchase consideration over the amounts assigned to tangible and intangible assets acquired and liabilities assumed will be recognized as goodwill. Of the total transaction costs of $3.5 million to $4.0 million expected to be incurred during fiscal 2013, $2.6 million has been accrued and recognized as a component of general and administrative expenses as of September 30, 2012.

On October 29, 2012, our Board of Directors authorized and declared a regular quarterly cash dividend in the amount of $0.09 per share. The quarterly dividend is payable on November 30, 2012 to shareholders of record on November 13, 2012.