Revenue Recognition

9 Months Ended

Mar. 31, 2019

Revenue From Contract With Customer [Abstract]

7.	Revenue Recognition

We disaggregate our revenue arrangements by contract type, customer, and whether the Company performs on the contract as the prime or subcontractor. We believe that these categories allow for a better understanding of the nature, amount, timing, and uncertainty of revenue and cash flows arising from our contracts.

Revenue by Contract Type

The Company generated revenue on our cost-plus-fee, firm fixed-price (including proprietary software product sales), and time-and-materials contracts as follows during the three and nine months ended March 31, 2019 (in thousands):

	Three Months Ended						Nine Months Ended
	March 31, 2019						March 31, 2019
	Domestic		International		Total		Domestic		International		Total
Cost-plus-fee	$	704,627	$	—	$	704,627	$	2,003,204	$	—	$	2,003,204
Firm fixed-price		348,143		25,863		374,006		982,232		73,152		1,055,384
Time and materials		172,761		13,564		186,325		509,170		44,705		553,875
Total	$	1,225,531	$	39,427	$	1,264,958	$	3,494,606	$	117,857	$	3,612,463

Customer Information

The Company generated revenue from our primary customer groups as follows during the three and nine months ended March 31, 2019 (in thousands):

	Three Months Ended						Nine Months Ended
	March 31, 2019						March 31, 2019
	Domestic		International		Total		Domestic		International		Total
Department of Defense	$	887,030	$	—	$	887,030	$	2,540,093	$	—	$	2,540,093
Federal civilian agencies		318,374		—		318,374		898,491		—		898,491
Commercial and other		20,127		39,427		59,554		56,022		117,857		173,879
Total	$	1,225,531	$	39,427	$	1,264,958	$	3,494,606	$	117,857	$	3,612,463

Prime or Subcontractor

The Company generated revenue as either the prime or subcontractor as follows during the three and nine months ended March 31, 2019 (in thousands):

	Three Months Ended						Nine Months Ended
	March 31, 2019						March 31, 2019
	Domestic		International		Total		Domestic		International		Total
Prime contractor	$	1,114,172	$	39,427	$	1,153,599	$	3,217,570	$	117,857	$	3,335,427
Subcontractor		111,359		—		111,359		277,036		—		277,036
Total	$	1,225,531	$	39,427	$	1,264,958	$	3,494,606	$	117,857	$	3,612,463

Significant Estimates

The Company uses an estimate at completion (EAC) as the basis to measure progress towards the complete satisfaction of its contractual performance obligations, for each of its contracts in which revenue is recognized using a percentage of completion calculation. The EAC process requires the Company to use professional judgment when assessing risks, estimating contract revenue and costs, estimating variable consideration, and making assumptions for schedule and technical issues. Based on changes in a contract’s EAC, a cumulative adjustment to revenue will be recorded. During the three and nine months ended March 31, 2019, we recognized an increase to income before income taxes of $6.3 million ($0.18 per diluted share) and $16.9 million ($0.49 per diluted share), respectively, from EAC adjustments. The Company used its statutory tax rate when calculating the impact to diluted earnings per share.

The Company records final true-up adjustments to its estimated award or incentive fees in the period in which we receive the customer’s final performance score or when we can determine that more objective, contractually-defined criteria have been fully satisfied. These final true-up adjustments are disclosed as revenue recognized from previously satisfied performance obligations. For the three and nine months ended March 31, 2019, the revenue recognized from previously satisfied performance obligations was $0.8 million and $1.1 million, respectively.

Remaining Performance Obligations

The Company’s remaining performance obligations balance as of period end represents the expected revenue to be recognized for the satisfaction of remaining performance obligations on our existing contracts. This balance excludes unexercised contract option years and task orders that may be issued underneath an IDIQ vehicle. Our remaining performance obligations balance as of March 31, 2019 was $6.7 billion.

The Company expects to recognize approximately 72.0 percent of our remaining performance obligations balance as revenue over the next year and the remaining 28.0 percent thereafter.