Revenue From Contracts With Customers

The Company’s primary service offerings are technology and business solutions, systems engineering and integration, cybersecurity, applied research and big data analytics, and investigative and risk mitigation services to the U.S. government and its agencies. Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

The Company determines revenue recognition through the five-step model as follows:

•Identification of the contract, or contracts, with a customer

•Identification of the performance obligations in the contract

•Determination of the transaction price

•Allocation of the transaction price to the performance obligations in the contract

•Recognition of revenue when, or as, we satisfy a performance obligation

Disaggregated Revenue

The following tables present revenue disaggregated by contract type:



	Three Months Ended September 30, 2018
(in millions)	Defense and Intelligence		Civilian and Health Care		Total
Cost-reimbursable	$	231	$	20	$	251
Fixed-price	367		240		607
Time-and-materials	104		106		210
Total	$	702	$	366	$	1,068



	Six Months Ended September 30, 2018
(in millions)	Defense and Intelligence		Civilian and Health Care		Total
Cost-reimbursable	$	340	$	41	$	381
Fixed-price	612		470		1,082
Time-and-materials	187		211		398
Total	$	1,139	$	722	$	1,861

The following tables present revenue disaggregated by prime or subcontractor:



	Three Months Ended September 30, 2018
(in millions)	Defense and Intelligence		Civilian and Health Care		Total
Prime contractor	$	660	$	315	$	975
Subcontractor	42		51		93
Total	$	702	$	366	$	1,068



	Six Months Ended September 30, 2018
(in millions)	Defense and Intelligence		Civilian and Health Care		Total
Prime contractor	$	1,077	$	650	$	1,727
Subcontractor	62		72		134
Total	$	1,139	$	722	$	1,861

The following tables present revenue disaggregated by customer type:



	Three Months Ended September 30, 2018
(in millions)	Defense and Intelligence		Civilian and Health Care		Total
Federal, including independent agencies	$	700	$	298	$	998
Non-federal (state, local, other)	2		68		70
Total	$	702	$	366	$	1,068



	Six Months Ended September 30, 2018
(in millions)	Defense and Intelligence		Civilian and Health Care		Total
Federal, including independent agencies	$	1,136	$	591	$	1,727
Non-federal (state, local, other)	3		131		134
Total	$	1,139	$	722	$	1,861

Performance Obligations

As of September 30, 2018, approximately $2.9 billion of revenue is expected to be recognized from remaining unsatisfied performance obligations on executed contracts. The Company expects to recognize revenue on these remaining performance obligations within approximately twelve months.

Contract Balances

Contract assets consist of unbilled receivables, which result from services provided under contracts when revenue is recognized over time, revenue recognized exceeds the amounts billed to the customer, and right to payment is not just subject to the passage of time. Amounts are invoiced as work progresses in accordance with agreed-upon contractual terms, either at periodic intervals or upon achievement of contractual milestones. Payment to employees and third parties for services provided to customers is generally immediate, while the related billing is generally within 90 days.

Contract liabilities include advance contract payments and billings in excess of costs incurred. Under certain contracts, the Company receives advances and milestone payments from its customers that exceed revenue earned to date, resulting in contract liabilities. Advances typically are not considered a significant financing component because it is used to meet working capital demands that can be higher in the early stages of a contract and to protect the Company from the customer failing to adequately complete some or all of its obligations under the contract.

Contract assets and contract liabilities were as follows:



		As Of
(in millions)	Balance Sheet Line Item	September 30, 2018		April 1, 2018
Contract assets:
Unbilled receivables	Receivables, net of allowance for doubtful accounts	$	316	$	193

Contract liabilities:
Current portion of deferred revenue and advance contract payments	Deferred revenue and advance contract payments	$	77	$	27
Non-current portion of deferred revenue and advance contract payments	Non-current deferred revenue and advance contract payments	$	8	$	7

Contract assets increased $123 million during the six months ended September 30, 2018, primarily due to the Mergers. There were no significant impairment losses related to the Company’s contract assets during the six months ended September 30, 2018.

Contract liabilities increased $51 million during the six months ended September 30, 2018, primarily due to the Mergers. During the three and six months ended September 30, 2018, the Company recognized $12 million and $22 million, respectively, of the deferred revenue and advance contract payments at April 1, 2018 as revenue.