Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Jun. 30, 2017 | Aug. 04, 2017 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | CSRA INC. | |
Entity Central Index Key | 1,646,383 | |
Current Fiscal Year End Date | --03-30 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2017 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 163,474,937 |
CONSOLIDATED AND CONDENSED BALA
CONSOLIDATED AND CONDENSED BALANCE SHEETS (unaudited) - USD ($) $ in Millions | Jun. 30, 2017 | Mar. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 194 | $ 126 |
Receivables, net of allowance for doubtful accounts of $26 and $24, respectively | 814 | 748 |
Prepaid expenses and other current assets | 102 | 126 |
Total current assets | 1,110 | 1,000 |
Intangible and other assets | ||
Goodwill | 2,335 | 2,335 |
Customer-related and other intangible assets, net of accumulated amortization of $256 and $244, respectively | 763 | 775 |
Software, net of accumulated amortization of $101 and $89, respectively | 73 | 81 |
Other assets | 83 | 87 |
Total intangible and other assets | 3,254 | 3,278 |
Property and equipment, net of accumulated depreciation of $690 and $694, respectively | 623 | 610 |
Total assets | 4,987 | 4,888 |
Current liabilities | ||
Accounts payable | 157 | 187 |
Accrued payroll and related costs | 183 | 181 |
Accrued expenses and other current liabilities | 525 | 487 |
Current capital lease liability | 45 | 44 |
Current maturities of long-term debt | 84 | 72 |
Dividends payable | 18 | 21 |
Total current liabilities | 1,012 | 992 |
Long-term debt, net of current maturities | 2,549 | 2,511 |
Noncurrent capital lease liability | 188 | 172 |
Deferred income tax liabilities | 268 | 272 |
Other long-term liabilities | 559 | 582 |
Commitments and contingent liabilities (Note 13) | ||
Equity | ||
Common stock, $0.001 par value, 750,000 shares authorized, 163,881 and 163,570 shares issued, and 163,367 and 163,216 shares outstanding, respectively | 0 | 0 |
Additional paid-in capital | 127 | 134 |
Accumulated earnings | 225 | 165 |
Accumulated other comprehensive income | 27 | 31 |
Total stockholders’ equity | 379 | 330 |
Noncontrolling interests | 32 | 29 |
Total equity | 411 | 359 |
Total liabilities and equity | $ 4,987 | $ 4,888 |
CONSOLIDATED AND CONDENSED BAL3
CONSOLIDATED AND CONDENSED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions | Jun. 30, 2017 | Mar. 31, 2017 |
Allowance for doubtful accounts | $ 26 | $ 24 |
Finite-lived intangible assets, accumulated amortization | 357 | 333 |
Plant, property and equipment, accumulated depreciation | $ 690 | $ 694 |
Common stock - par value (in USD per share) | $ 0.001 | $ 0.001 |
Common stock - shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock - shares issued (in shares) | 163,881,000 | 163,570,000 |
Common stock - shares outstanding (in shares) | 163,367,000 | 163,216,000 |
Customer-related and other intangible assets | ||
Finite-lived intangible assets, accumulated amortization | $ 256 | $ 244 |
Software | ||
Finite-lived intangible assets, accumulated amortization | $ 101 | $ 89 |
CONSOLIDATED AND CONDENSED STAT
CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Income Statement [Abstract] | ||
Revenues | $ 1,229 | $ 1,254 |
Cost of services | 979 | 1,015 |
Selling, general and administrative expenses | 49 | 56 |
Separation and merger costs | 5 | 5 |
Depreciation and amortization | 60 | 65 |
Operating expenses | 1,093 | 1,141 |
Operating income | 136 | 113 |
Net benefit of defined benefit plans | 21 | 24 |
Interest expense, net | (30) | (30) |
Other expense, net | (1) | (1) |
Income before income taxes | 126 | 106 |
Income tax expense | 46 | 38 |
Net income | 80 | 68 |
Less: noncontrolling interests | 3 | 3 |
Net income attributable to CSRA common stockholders | $ 77 | $ 65 |
Earnings per common share: | ||
Basic (in USD per share) | $ 0.47 | $ 0.40 |
Diluted (in USD per share) | $ 0.47 | $ 0.39 |
Common share information (weighted averages, in thousands): | ||
Common shares outstanding - basic (in shares) | 163,386 | 163,275 |
Dilutive effect of stock options and equity awards (in shares) | 1,594 | 1,663 |
Common shares outstanding - diluted (in shares) | 164,980 | 164,938 |
Cash dividend per common share (in USD per share) | $ 0.1 | $ 0.10 |
CONSOLIDATED AND CONDENSED STA5
CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 80 | $ 68 |
Other comprehensive income (loss), net of taxes, related to: | ||
Amortization of prior service cost | (2) | (2) |
Unrealized gain on derivatives | (2) | (6) |
Other comprehensive income (loss), net of taxes | (4) | (8) |
Comprehensive income | 76 | 60 |
Less: comprehensive income attributable to noncontrolling interest, net of taxes | 3 | 3 |
Comprehensive income attributable to CSRA common stockholders | $ 73 | $ 57 |
CONSOLIDATED AND CONDENSED STA6
CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Cash flows from operating activities: | ||
Net income | $ 80 | $ 68 |
Adjustments to reconcile net income to cash provided by operating activities: | ||
Depreciation and amortization | 60 | 67 |
Stock based compensation | 4 | 3 |
Excess tax benefit from stock based compensation | (1) | (1) |
Deferred income taxes | (2) | 0 |
Net loss on dispositions of business and assets | 0 | 2 |
Changes in assets and liabilities, net of acquisitions and dispositions: | ||
(Increase) decrease in assets | (39) | 14 |
(Decrease) increase in defined benefit plan liability | (20) | 7 |
(Decrease) increase in other liabilities | 2 | (10) |
Other operating activities, net | 3 | 6 |
Cash provided by operating activities | 87 | 156 |
Cash flows used in investing activities: | ||
Purchases of property and equipment | (29) | (34) |
Software purchased and developed | (2) | (4) |
Proceeds from disposals of assets | 6 | 0 |
Other investing activities, net | 19 | (5) |
Cash used in investing activities | (6) | (43) |
Cash flows used in financing activities: | ||
Borrowing on revolving credit facility | 55 | 0 |
Repayments of revolving credit facility | 0 | (48) |
Borrowings of long term debt | 184 | 0 |
Payments of long-term debt | (191) | (50) |
Debt issuance cost | (2) | 0 |
Proceeds from stock options and other common stock activity, net | 1 | 8 |
Repurchase of common stock | (14) | 0 |
Dividends paid | (17) | (18) |
Payments on lease liability | (10) | (7) |
Other financing activities, net | (19) | 5 |
Cash used in financing activities | (13) | (110) |
Net increase in cash and cash equivalents | 68 | 3 |
Cash and cash equivalents at beginning of period | 126 | 130 |
Cash and cash equivalents at end of period | $ 194 | $ 133 |
Description of the Business, Ba
Description of the Business, Basis of Presentation and Recent Accounting Pronouncements | 3 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of the Business, Basis of Presentation and Recent Accounting Pronouncements | Note 1—Description of the Business, Basis of Presentation and Recent Accounting Pronouncements Description of the Business CSRA Inc. (“CSRA” or the “Company”), a provider of IT and professional services, delivers IT, mission, and operations-related services across the U.S. government, including to the Department of Defense (“DoD”), Department of Homeland Security (“DHS”), the intelligence community, civil and healthcare agencies, and to state and local government agencies through two business segments: (1) Defense and Intelligence, and (2) Civil. NES Acquisition In May 2017, CSRA executed an agreement for the acquisition of NES Associates, LLC (“NES”), a provider of IT services to the U.S. government, for approximately $105 million in cash, subject to closing adjustments. The transaction closed in July 2017; and NES became a wholly-owned subsidiary of CSRA on the date of closing. The NES acquisition will be reflected in CSRA’s financial statements beginning in the second quarter of fiscal year 2018 using the acquisition method of accounting, with CSRA being considered the accounting acquirer of NES. Due to the recency of the acquisition, the initial purchase accounting for this acquisition was not completed at the time of issuance of these financial statements. CSRA will record the assets acquired and liabilities assumed at their estimated fair value, with the difference between the fair value of the net assets acquired and the purchase consideration reflected as goodwill. See Note 4—Goodwill and Other Intangible Assets for further discussion of the measurement considerations for intangible assets. Basis of Presentation The accompanying unaudited Consolidated and Condensed Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2017 . The interim period unaudited Consolidated and Condensed Financial Statements are presented as described below. All intercompany transactions and balances have been eliminated. Certain information and disclosures normally required for annual financial statements have been condensed or omitted pursuant to SEC rules and regulations. In the opinion of management, all adjustments considered necessary for fair presentation of the results of the interim period presented have been included. CSRA reports its results based on a fiscal year convention comprised of four thirteen-week quarters. Every fifth year includes an additional week in the first quarter to prevent the fiscal year from moving from an approximate end of March date. Contract accounting requires significant judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Due to the size and nature of many of CSRA’s contracts, developing total revenue and costs at completion estimates requires significant judgment. Contract costs include direct labor and billable expenses, allocation of allowable indirect costs, and warranty obligations. CSRA recognizes revenue and billable expenses from these transactions on a gross basis because it is the primary obligor on contracts with customers. The contracts that required estimates-at-completion (“EACs”) using the percentage-of-completion method were approximately 35% , and 37% of CSRA’s revenues for the three months ended June 30, 2017 , and July 1, 2016 , respectively. CSRA’s income before income taxes and noncontrolling interest for the three months ended June 30, 2017 and July 1, 2016 included the following gross favorable and unfavorable adjustments due to changes in estimated profitability on fixed price contracts accounted for under the percentage-of-completion method. Three Months Ended (Dollars in millions) June 30, 2017 July 1, 2016 Gross favorable $ 18 $ 11 Gross unfavorable (6 ) (8 ) Total net adjustments, before taxes and noncontrolling interests $ 12 $ 3 Unbilled recoverable amounts under contracts in progress do not have an allowance for credit losses and, therefore, any adjustments to these amounts related to credit quality are accounted for as a reduction of revenue. Unbilled amounts under contracts in progress resulting from sales, primarily to the U.S. and other governments, that are expected to be collected after one year totaled $16.8 million and $15.6 million as of June 30, 2017 and March 31, 2017 , respectively. Depreciation expense was $ 37.1 million and $ 32.4 million for the three months ended June 30, 2017 and July 1, 2016 , respectively. Earnings Per Share The computation of diluted earnings per share excludes stock options and restricted stock units, whose effect, if included, would be anti-dilutive. The number of shares related to such stock awards was 398,322 and 2,194,894 for the three months ended June 30, 2017 and July 1, 2016 , respectively. Use of Estimates GAAP requires management to make estimates and assumptions that affect certain amounts reported in the unaudited Consolidated and Condensed Financial Statements and accompanying notes. These estimates are based on management’s best knowledge of historical experience, current events, and other assumptions that management considers reasonable. Actual results could differ from those estimates. Amounts subject to significant judgment and/or estimates include, but are not limited to: determining the fair values of assets acquired and liabilities assumed, derivative instruments and non-financial assets such as internally developed software for internal use; costs to complete fixed-price contracts, certain deferred costs, collectability of receivables, reserves for tax benefits, including valuation allowances on deferred tax assets, loss accruals for litigation, and inputs used for computing share-based compensation. Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. The accounting guidance for fair value measurements establishes a three level hierarchy that prioritizes inputs as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Quoted prices for similar assets or liabilities or quoted market prices for identical or similar assets in markets that are not active. Level 3 — Valuations derived from techniques where one or more significant inputs are unobservable. Assets and liabilities valued using the fair value measurement guidance on a recurring basis include: pension assets and derivative instruments (consisting of interest rate swap contracts, total return swaps, and foreign currency forward exchange contracts). Pension assets are valued using model based pricing methods that use observable market data; and are, therefore, considered Level 2 inputs. The fair value of interest rate swaps is estimated based on valuation models that use observable interest rate yield curves as inputs. Total return swaps are settled on the last day of every fiscal month. Therefore, the value of any total return swaps outstanding as of any balance sheet date is not material. The inputs used to estimate the fair value of the Company's derivative instruments are classified as Level 2. No significant assets or liabilities are measured at fair value on a recurring basis using significant unobservable (Level 3) inputs. Assets and liabilities measured at fair value on a non-recurring basis include: those acquired in a business combination, equity-method investments, and long-lived assets, which are recognized at fair value if deemed to be impaired or if reclassified as assets held for sale. The fair value in these instances are then determined using Level 3 inputs. The Company’s financial instruments include cash, trade receivables, vendor payables, derivative financial instruments, and debt. As of June 30, 2017 , the carrying value of cash, trade receivables, and vendor payables approximated their fair value. The carrying amounts of the Company’s financial instruments with short-term maturities are deemed to approximate their market values. The carrying amount of the Company’s long-term debt, excluding capital leases, was $ 2.5 billion at both June 30, 2017 and March 31, 2017; and approximated its fair value on those dates based on recent trading activity. The fair value of long-term debt is estimated based on current interest rates offered to the Company for instruments with similar terms and remaining maturities, and are classified as Level 2. There were no transfers between levels of the fair value hierarchy during the three months ended June 30, 2017 or the three months ended July 1, 2016 . Recent Accounting Pronouncements New Accounting Standards During the three months ended June 30, 2017 , CSRA adopted the following Accounting Standard Update (“ASU”): In March 2017, the FASB issued ASU No. 2017-07- Compensation- Retirement Benefits (Topic 715) (“ASU 2017-07”), which changes the presentation of net periodic pension and post-retirement costs. The guidance requires that service costs associated with pension and post-retirement plans be presented in the same financial statement line item as the compensation cost for the related employees. All other net benefit costs must be reported separately from income from operations (if presented). The standard is effective for the first interim period within annual periods beginning after December 15, 2017, with early adoption permitted. Since CSRA’s defined benefit pension and post-retirement plans (the “Plans”) are frozen, historical service costs consist of administrative expenses. CSRA chose to early adopt this standard during the first quarter of the fiscal year ending March 30, 2018. As a result, net benefit costs of the Plans have been presented as a separate line item on the Company’s statements of operations. The prior period has been revised to conform with the current period presentation. Standards Issued But Not Yet Effective The following ASUs were recently issued but have not yet been adopted by CSRA: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements and some cost guidance included in the Accounting Standards Codification (ASC). Upon adoption, ASU 2014-09 will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date , resulting in a one-year deferral of the effective date of the standard. For CSRA, ASU 2014-09 will become effective in the first quarter of fiscal 2019. The new standard may be adopted either retrospectively or on a modified retrospective basis whereby it would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to the beginning balance of retained earnings at the effective date. The new standard requires us to identify contractual performance obligations and determine when revenue should be recognized. This and other requirements could change the method or timing of revenue recognition for our firm-fixed-price and cost-reimbursable-plus-fee contract portfolio. The Company’s implementation project team completed the initial assessment phase. Their integrated approach to analyzing the standard’s impact on our contract portfolio includes a review of accounting policies and practices, evaluating the effects of the requirements on our contracts and business practices, and assessing the need for system and internal control changes or enhancements. The Company identified likely effects related to the treatment of option years as discrete contracts and the grouping of promised goods and services into performance obligations for the purpose of recognizing revenue under the new standard. As a result, recognized changes in contract estimates may result in either smaller or larger revenue adjustments than before adoption of the ASU. Anticipated losses on contracts will continue to be recognized in the period they are identified. The Company plans to adopt the standard on April 1, 2018; and to implement it using the modified retrospective method, where the cumulative effect is recognized at the date of adoption. The project team has begun work to quantify the effect of adoption on the Company’s financial statements, as well as identify required changes to the Company’s current accounting policies and internal control framework. These activities and the Company’s evaluation of the quantitative effect of adoption will extend into future periods. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes the current guidance related to accounting for leases. The guidance requires lessees to recognize most leases on-balance sheet as a right of use asset and lease liability. ASU 2016-02 also requires expanded qualitative and quantitative disclosures to provide financial statement users with additional information on the amount, timing, and uncertainty of cash flows arising from CSRA leases. The standard must be adopted using the modified retrospective approach; and will be effective for the first interim period within annual periods beginning after December 15, 2019, with early adoption permitted. CSRA is currently evaluating the impact of adoption on its financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230) (“ASU 2016-18”). This guidance requires the inclusion of restricted cash and restricted cash-equivalent balances in the statement of cash flows. The ASU does not define "restricted cash" and "restricted cash equivalents." The Company will be required to include its restricted cash balance (currently classified within Prepaid and other current assets) in the Cash and cash equivalents balance presented in the statement of cash flows using a retrospective transition method for each period presented. A reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. An entity with a material balance of amounts generally described as restricted cash and restricted cash equivalents must also discuss the nature of the restrictions. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption, including during an interim period, is permitted. The Company has not yet determined an implementation date for this ASU. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). Its main provisions are: (a) removing step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation; and (b) eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. ASU 2017-04 is effective for all public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted on or after January 1, 2017. The Company tests goodwill for impairment annually on the first day of the second fiscal quarter and on an interim basis if an event occurs, or circumstances change that would “more likely than not” reduce the fair value of a reporting unit below its carrying amount. The Company plans to early adopt ASU 2017-04 on July 1, 2017, which coincides with its annual assessment for the impairment of goodwill. Other recently issued ASUs effective after June 30, 2017 are not expected to have a material effect on CSRA’s financial statements. |
Sale of Receivables
Sale of Receivables | 3 Months Ended |
Jun. 30, 2017 | |
Transfers and Servicing [Abstract] | |
Sale of Receivables | Note 2—Sale of Receivables CSRA is the seller of certain accounts receivable under a Master Accounts Receivable Purchase Agreement (the “Purchase Agreement”) with The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia, and Mizuho Bank, Ltd., each as Purchaser, for the continuous non-recourse sale of CSRA’s eligible trade receivables. Under the Purchase Agreement, CSRA sells eligible receivables, including billed receivables and certain unbilled receivables arising from cost plus fixed fee (“CPFF”) and time and materials (“T&M”) contracts up to $450.0 million outstanding at any time. CSRA has no retained interests in the transferred receivables and only performs collection and administrative functions for the Purchaser for a servicing fee. CSRA accounts for these receivable transfers as sales under ASC 860, Transfers and Servicing, and de-recognizes the sold receivables from its unaudited Consolidated and Condensed Balance Sheets. The fair value of the sold receivables approximated their book value due to their short-term nature. CSRA estimated that its servicing fee was at fair value and, therefore, no servicing asset or related liability was recognized at either June 30, 2017 or March 31, 2017 . We have amended the Purchase Agreement periodically to broaden the eligibility of receivables for sale under it. In the period when the receivables become eligible for sale, the proceeds from such sales will increase operating cash flow. The table below provides receivable sales activity, including initial sales of newly eligible receivables during the periods presented. Three Months Ended (Dollars in millions) June 30, 2017 July 1, 2016 Sales of billed receivables $ 413 $ 468 Sales of unbilled receivables 298 228 Total sales of receivables $ 711 $ 696 Collections of sold receivables $ 715 $ 579 Operating cash flow effect, net of collections and fees from sales (5 ) 116 As of June 30, 2017 and March 31, 2017 , there was $18.8 million and $ 37.0 million, respectively, of cash collected by CSRA, but not remitted to purchasers, which represents restricted cash and is included within Prepaid expenses and other current assets on our unaudited Consolidated and Condensed Balance Sheets. CSRA incurred purchase discount and administrative fees of $ 1.2 million and $0.6 million for the three months ended June 30, 2017 and July 1, 2016 , respectively. These fees were recorded within Other expense (income), net in the unaudited Consolidated and Condensed Statements of Operations. Concentrations of Risk The primary financial instruments, other than derivatives, that potentially subject the Company to concentrations of credit risk are accounts receivable. The Company’s primary customers are the U.S. government and prime contractors under contracts with the U.S. government. The Company continuously reviews its accounts receivable and records provisions for doubtful accounts as needed. |
Derivative Instruments
Derivative Instruments | 3 Months Ended |
Jun. 30, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Note 3—Derivative Instruments Derivatives Designated for Hedge Accounting Interest-rate swaps The Company uses derivative financial instruments to manage interest rate risk related to its Term Loan A Facilities. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish these objectives, the Company uses pay-fixed interest rate swaps as part of its interest rate risk management strategy. As of both June 30, 2017 and March 31, 2017 , the Company had outstanding pay-fixed interest rate derivatives with a notional value of $1.4 billion, which were designated as a cash flow hedge of interest rate risk. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated other comprehensive income (“AOCI”), net of taxes, and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. There was no ineffective portion in either the three months ended June 30, 2017 or July 1, 2016 . Foreign Currency Forward Exchange Contracts The Company transacts business in various foreign currencies, which subjects its cash flows and earnings to exposure related to changes in foreign currency exchange rates. The exposure arises primarily from purchases from or sales to third parties. Foreign currency forward exchange contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates; and are used to offset changes in the fair value of forecasted cash flows related to transactions denominated in foreign currencies. During the first quarter of fiscal year 2018, the Company began hedging certain of these forecasted cash flows. As of June 30, 2017 , the Company had outstanding foreign currency forward exchange contracts with notional amounts totaling $17.2 million . Neither the fair value of these derivatives at June 30, 2017 nor the gain or loss reclassified into earnings from AOCI nor any recognized amount related to the ineffective portion of the derivative instruments during the three months ended June 30, 2017 was significant. We do not expect amounts that will be reclassified into earnings within the next twelve months to be significant. The notional values consist primarily of contracts for the Mexican peso, Columbia peso, and Canadian dollar, and are stated in U.S. dollar equivalents. Fair Value of Derivative Instruments The fair values of derivative instruments are presented on a gross basis as none of the Company’s derivative contracts are subject to master netting arrangements. The fair value of the Company’s derivative financial instruments was an asset of $ 14.8 million and $18.2 million as of June 30, 2017 and March 31, 2017, respectively. These derivative instruments are classified by their short- and long-term components based on the fair value of the anticipated timing of their cash flows. For net asset positions, the current portion is included in Prepaid and other current assets and the long-term portion is included in Other assets in the unaudited Consolidated and Condensed Balance Sheets. There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during both the three months ended June 30, 2017 or July 1, 2016 . Cash flows associated with derivative contracts are recorded in operating activities in the unaudited Consolidated and Condensed Statement of Cash Flows. Under applicable agreements relating to the Company’s interest rate swaps, a counterparty could declare the Company to be in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default. Derivatives Not Designated for Hedge Accounting Total Return Swaps The Company uses total return swap derivative contracts to manage exposure to the market volatility of notional investments underlying its deferred compensation obligations. These arrangements are entered into monthly and settled on the last day of every fiscal month. For accounting purposes, these derivatives are not designated as hedges. As changes in the fair value of the deferred compensation liabilities are recognized in Cost of services and Selling, general and administrative expenses, so too are the changes in the fair value of the total return swaps derivative contracts. Amounts related to the total return swaps recognized in both the three months ended June 30, 2017 and July 1, 2016 were not significant. Concentrations of Risk The Company is subject to counterparty risk in connection with its interest rate swap derivative contracts. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The Company mitigates this credit risk by entering into agreements with credit-worthy counterparties. As of both June 30, 2017 and March 31, 2017 , there was one counterparty with greater than a 10% concentration of our total exposure. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Note 4—Goodwill and Other Intangible Assets In connection with acquisitions of other businesses, CSRA recognized goodwill and other intangible assets, which includes customer relationships intangibles, backlog, and contract-related intangibles. In addition, the Company records acquired and developed software technology as an intangible asset. The Company’s goodwill and other intangible assets arose primarily from the merger with SRA International Inc. (“SRA”) in fiscal year 2016. Goodwill Goodwill is allocated to each reportable segment based on the relative fair value of net assets acquired. There were no changes in the balance of goodwill or allocations to CSRA’s reportable segments during either the three months ended June 30, 2017 or July 1, 2016 . Testing for Goodwill Impairment The Company tests for impairment annually on the first day of the second fiscal quarter; and between annual tests if an event occurs, or circumstances change, that would “more likely than not” reduce the fair value of a reporting unit below its carrying amount. At the end of each annual and quarterly period, CSRA assesses whether any such events or changes occurred that require goodwill to be tested for impairment. On July 2, 2016, the date of CSRA’s last annual impairment test, the Company concluded the fair value of each reporting unit significantly exceeded its carrying value. As of June 30, 2017 , CSRA assessed and determined that there have been no indicators that required management to perform an interim goodwill impairment assessment test . There were no accumulated impairment losses at either June 30, 2017 or March 31, 2017 . Other Intangible Assets Other intangible assets consist primarily of customer relationships intangibles, backlog, and technology. Acquired intangible assets have been recorded at their fair value using various discounted cash flow valuation techniques that incorporated Level 3 inputs as described under the fair value hierarchy of ASC 820, Fair Value Measurements (“ASC 820”). The unobservable inputs used reflect CSRA’s assumptions about the assumptions that market participants would use in pricing an asset on a non-recurring basis. A summary of amortizing intangible assets is: As of June 30, 2017 (Dollars in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Acquisition-related intangibles: Customer-related intangibles $ 948 $ (187 ) $ 761 Backlog 65 (65 ) — Other intangible assets 6 (4 ) 2 Subtotal-acquisition-related intangibles: 1,019 (256 ) 763 Software 174 (101 ) 73 Total intangible assets $ 1,193 $ (357 ) $ 836 As of March 31, 2017 (Dollars in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Acquisition-related intangibles: Customer-related intangibles $ 948 $ (175 ) $ 773 Backlog 65 (65 ) — Other intangible assets 6 (4 ) 2 Subtotal-acquisition-related intangibles: 1,019 (244 ) 775 Software 170 (89 ) 81 Total intangible assets $ 1,189 $ (333 ) $ 856 Customer-related intangibles, backlog, and software are amortized to expense. Amortization expense for the three months ended June 30, 2017 and July 1, 2016 was $ 23.3 million and $ 32.6 million, respectively. As of June 30, 2017 , estimated amortization related to intangible assets for the remaining nine months of fiscal year 2018 is $ 70.1 million; and for each of fiscal years 2019, 2020, 2021, and 2022 is $81.5 million, $75.4 million, $66.3 million and $59.4 million, respectively. Purchased and internally developed software for external and internal use, net of accumulated amortization, consisted of: As of (Dollars in millions) June 30, 2017 March 31, 2017 Purchased software $ 70 $ 73 Internally developed software 3 8 Total software $ 73 $ 81 Amortization expense related to purchased software for the three months ended June 30, 2017 and July 1, 2016 was $5.9 million, and $ 3.6 million , respectively. Amortization expense related to internally developed software for the three months ended June 30, 2017 and July 1, 2016 was $5.2 million , and $0.2 million, respectively. As of June 30, 2017 , estimated amortization related to purchased and internally developed software for the remaining nine months of fiscal year 2018 is $17.6 million; and for each of the fiscal years 2019, 2020, 2021, and 2022 is $19.7 million, $16.9 million, $11.5 million, and $7.3 million, respectively. |
Accrued Expenses and Other Curr
Accrued Expenses and Other Current Liabilities | 3 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Accounts Expenses and Other Current Liabilities | Note 5—Accrued Expenses and Other Current Liabilities Accrued expenses and other current liabilities consisted of the following: As of (Dollars in millions) June 30, 2017 March 31, 2017 Accrued contract costs $ 237 $ 239 Deferred revenue 161 153 Accrued expenses 88 81 Other 39 14 Total $ 525 $ 487 |
Debt
Debt | 3 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Note 6—Debt CSRA maintains the following debt facilities: (1) a senior secured revolving credit facility (the “Revolving Credit Facility”) with a committed borrowing capacity of $700 million; (2) a senior secured tranche A1 Term loan facility (the “Tranche A1 Facility”); (3) a senior secured tranche A2 Term loan facility (the “Tranche A2 Facility” and, together with the Tranche A1 Facility, the “Term Loan A Facilities”); and (4) a senior secured term loan B facility (the “Term Loan B Facility” and, together with the Term Loan A Facilities, the “Term Loan Facilities”). The following is a summary of CSRA’s outstanding debt, as of June 30, 2017 and March 31, 2017 . June 30, 2017 March 31, 2017 (Dollars in millions) Interest Rate (1) Outstanding Balance Interest Rate (1) Outstanding Balance Revolving credit facility, due November 2021 2.73% - 2.79% $ 55 2.18% - 2.20% $ — Tranche A1 facility, due November 2019 2.61% - 2.67% 389 2.06% - 2.41% 570 Tranche A2 facility, due November 2021 2.73% - 2.80% 1,569 2.18% - 2.53% 1,580 Term Loan B facility, due November 2023 3.16% - 3.55% 650 3.28% - 3.75% 466 Capitalized lease liability 2.35% - 11.4% 233 2.35% - 15.09% 216 Total debt 2,896 2,832 Less: unamortized debt issuance costs (30 ) (33 ) Less: current portion of long-term debt and capitalized lease liability (129 ) (116 ) Total long-term debt, net of current maturities $ 2,737 $ 2,683 (1) Represents the range of the lowest and highest interest rate during the period for each facility. Capitalized lease rates are the lowest and highest rates among all leases outstanding during the period. The June 30, 2017 column represents the range during the three month period then ended and the March 31, 2017 column represents the range during the fiscal year then ended. On June 15, 2017, the Company entered into a Second Amendment to the Credit Agreement (the “Second Amendment”) with The Bank of Tokyo-Mitsubishi UFJ, Ltd, as pro-rata administrative agent, Royal Bank of Canada, as term loan B administrative agent, and the guarantors and lender parties thereto. Pursuant to the Second Amendment, the credit facilities were amended to provide for, among other things: (a) a reduction of 0.5% in the margin over indexed interest rates on the Term Loan B Facility (as defined under the Second Amendment), to LIBOR plus 2.00% on Eurocurrency Rate Advances; (b) an increase of $183.7 million in the unpaid principal balance of the Term Loan B Facility to a total of $650.0 million ; and (c) quarterly repayments of $0.5 million commencing September 30, 2017 through December 31, 2022 and quarterly repayments thereafter of $2.4 million (subject to reduction for any mandatory or voluntary prepayments) until the maturity date of the Term Loan B Facility. The additional borrowings under the Term Loan B Facility were immediately applied to repay $180.6 million of the unpaid principal balance of the Term Loan A1 Facility under the Credit Agreement; pay accrued and unpaid interest on amounts repaid on the Term Loan A1 Facility and on the Term Loan B Facility; and pay fees and expenses incurred in connection with the transaction. The Company wrote-off $ 1.7 million of deferred financing fees related to the portion of the loans deemed extinguished, which are recorded in interest expense; and recorded an additional $ 1.5 million of deferred financing costs related to fees paid in connection with the Second Amendment. In addition, during the first quarter of fiscal year 2018, the Company made a mandatory repayment of $ 10.8 million on its Term Loan Facilities. On June 30, 2017, the Company drew $55.0 million under its revolving credit facility in order to fund the settlement of its purchase of NES in July 2017. Interest expense consisted of: Three Months Ended (Dollars in millions) June 30, 2017 July 1, 2016 Contractual interest -revolving and term loan credit facilities $ 19 $ 19 Amortization of debt issuance costs 2 3 Interest on derivatives and other 7 8 Loss on debt extinguishment 2 — Total interest expense $ 30 $ 30 CSRA’s costs incurred in connection with the issuance of its Term Loan Facilities are amortized using the effective interest method over the life of the respective loans. Unamortized debt issuance costs related to the Revolving Credit Facility are recorded with the carrying value of the debt and are amortized using the straight-line method. Expected maturities of long-term debt, excluding future minimum capital lease payments, for the remaining three quarters of fiscal year 2018, and fiscal years subsequent to fiscal year 2018, are as follows: (Dollars in millions) Amount Fiscal year: Remaining of fiscal year 2018 $ 62 2019 83 2020 473 2021 84 2022 1,320 2023 4 Thereafter 637 Total $ 2,663 CSRA’s long-term debt facilities contain representations, warranties, and covenants customary for arrangements of these types, as well as customary events of default. CSRA was in compliance with all financial covenants associated with its borrowings as of June 30, 2017 . |
Income Taxes
Income Taxes | 3 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7—Income Taxes CSRA’s effective tax rate (“ETR”) was 36.5% for the three months ended June 30, 2017 , compared to 35.7% for the three months ended July 1, 2016 . The higher ETR for the three months ended June 30, 2017 was primarily a result of a reduction in the amount of tax deductible dividend equivalent payments made related to restricted stock unit (“RSU”) awards. Except for historic SRA tax liabilities and certain separate state liabilities, we are generally only responsible for taxes allocable to periods (or portions of periods) beginning after the Company’s separation from Computer Sciences Corporation (now known as DXC Technology) (“CSC”). CSRA is currently under examination in several tax jurisdictions. As a result of the merger with SRA, the tax years that remain subject to examination in certain of CSRA’s major tax jurisdictions are: Jurisdiction Tax Years United States - federal 2008 and forward United States - various states 2008 and forward One disputed matter remains unresolved in connection with the Internal Revenue Service’s (“IRS”) examination of SRA’s federal income tax return for 2011. The disputed matter concerns a $136.7 million worthless stock deduction for a disposed subsidiary. CSRA believes its tax positions are appropriate. The Company obtained a tax insurance policy in connection with its merger with SRA that limits CSRA’s exposure related to this position. It is reasonably possible that changes to CSRA’s unrecognized tax benefits could be significant; due to the uncertainty regarding the IRS administrative appeals process and possible outcomes, however, a current estimate of the range of increases or decreases that may occur within the next 12 months is not expected to be material. |
Pension and Other Post-retireme
Pension and Other Post-retirement Benefit Plans | 3 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
Pension and Other Post-retirement Benefit Plans | Note 8—Pension and Other Post-retirement Benefit Plans Certain employees of CSRA and its subsidiaries are participants in employer-sponsored defined benefit and defined contribution plans, including pension and other post-retirement benefit (“OPEB”) plans. Defined Benefit Pension Plans The assets and liabilities for the plans and the costs and benefits related to the plans’ participants are reflected in CSRA’s unaudited Consolidated and Condensed Financial Statements. The largest U.S. defined benefit pension plan was frozen in fiscal year 2010 for most participants. The net periodic pension benefit for CSRA pension plans includes the following components: (Dollars in millions) Three Months Ended June 30, 2017 July 1, 2016 Service cost (entirely administrative expenses) $ 3 $ 3 Interest cost 23 26 Expected return on assets (43 ) (49 ) Net periodic pension benefit $ (17 ) $ (20 ) The following table provides the pension plans’ projected benefit obligations, assets, and funding status: As of (Dollars in millions) June 30, 2017 March 31, 2017 Net benefit obligation $ (2,771 ) $ (2,787 ) Net plan assets 2,330 2,328 Net funded (unfunded) status $ (441 ) $ (459 ) CSRA contributed $2.1 million to the defined benefit pension plans during the three months ended June 30, 2017 for the funding of benefit payments made to plan participants. CSRA expects to make $6.2 million of additional contributions during the remaining nine months of fiscal year 2018 for the funding of participants’ benefit payments. Other Post-retirement Benefit Plans The assets and liabilities for the plans and the costs and benefits related to the plans’ participants are reflected in CSRA’s unaudited Consolidated and Condensed Financial Statements. CSRA’s financial statements reflect the service costs related to current employees and certain former employees of CSC and the businesses constituting CSC’s North American Public Sector segment and the assets and liabilities for the plans. CSRA provides subsidized healthcare, dental, and life insurance benefits for certain U.S. employees and retirees, primarily for individuals employed prior to August 1992. (Dollars in millions) Three Months Ended June 30, 2017 July 1, 2016 Net periodic post-retirement (benefit) costs: Expected return on assets $ (1 ) $ (1 ) Amortization of prior service benefit (3 ) (3 ) Net periodic benefit $ (4 ) $ (4 ) The following table provides the OPEB plans’ projected benefit obligations, assets, and funding status: (Dollars in millions) As of June 30, 2017 March 31, 2017 Net benefit obligation $ (85 ) $ (86 ) Net plan assets 76 76 Net unfunded status $ (9 ) $ (10 ) CSRA contributed $0.4 million to the OPEB plans during both the three months ended June 30, 2017 and July 1, 2016 . CSRA expects to make $1.1 million of additional contributions to this plan during the remaining nine months of fiscal year 2018 for the funding of participants’ benefit payments. |
Share-Based Compensation Plans
Share-Based Compensation Plans | 3 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation Plans | Note 9—Share-Based Compensation Plans Employee Incentives On November 27, 2015, CSRA became an independent company through the separation from CSC (“Spin-Off”). Prior to the Spin-Off, there were two stock incentive plans under which employees were granted stock options, RSUs, and performance stock units (“PSUs”). Some of these awards vested upon the Spin-Off, some continue to vest in accordance with their original terms, and some converted into a different type of equity award at separation. CSRA had a net receivable from CSC of $ 1.3 million at both June 30, 2017 and March 31, 2017, related to the settlement of equity awards-granted to employees prior to the Spin-Off. CSRA issues authorized but previously unissued shares upon the exercise of stock options and the settlement of RSUs and PSUs. As of June 30, 2017 , 6,461,283 shares of CSRA common stock were available for the grant of future stock options, RSUs, PSUs or other share-based incentives to employees of CSRA. For the three months ended June 30, 2017 and July 1, 2016 , CSRA recognized share-based compensation expense within Selling, general and administrative expenses of $3.8 million and $3.0 million , respectively, including CSRA’s corporate and non-employee director grants, which totaled $ 0.4 million and $1.3 million , respectively. Stock Options Information concerning stock options of CSRA during the three months ended June 30, 2017 , was as follows. Number of Option Shares Weighted Average Exercise Price per share Outstanding as of March 31, 2017 1,996,898 $ 24.29 Granted — — Exercised 65,820 24.05 Canceled/Forfeited 18,386 25.56 Expired 7,465 27.87 Outstanding as of June 30, 2017 1,905,227 24.27 Expected to vest in the future as of June 30, 2017 904,422 24.61 Exercisable as of June 30, 2017 1,000,805 23.96 As of June 30, 2017 , unrecognized compensation expense related to unvested stock options totaled $ 4.7 million. This cost is expected to be recognized over a weighted-average period of 1.8 years. RSUs and PSUs Information concerning RSUs and PSUs of CSRA during the three months ended June 30, 2017 , was as follows. Number of Restricted Stock Units Weighted Average Fair Value Outstanding as of March 31, 2017 857,914 $ 26.95 Granted 610,611 30.22 Vested 32,441 33.11 Canceled/Forfeited 6,595 26.26 Outstanding as of June 30, 2017 1,429,489 28.21 As of June 30, 2017 , total unrecognized compensation expense related to unvested RSUs and PSUs totaled $28.1 million. This cost is expected to be recognized over a weighted-average period of 2.6 years. |
Stockholder's Equity and Accumu
Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) | Note 10—Stockholders’ Equity and Accumulated Other Comprehensive Income (Loss) Dividends Declared In May 2017, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 163,760,678 shares, with a total dividend payout of $16.4 million . Payment of the dividend was made on July 12, 2017 to CSRA stockholders of record at the close of business on June 15, 2017. Share Repurchase Program On November 30, 2015, the Board authorized a share repurchase program (the “Share Repurchase Program”), pursuant to which CSRA, from time to time, purchases shares of its common stock for an aggregate purchase price not to exceed $400 million. During the first quarter of fiscal year 2017, no purchases were made under this plan. During the first quarter of fiscal year 2018, CSRA repurchased 450,000 shares of common stock for aggregate consideration of $14.3 million , at an average price of $31.71 per share. As of June 30, 2017 , CSRA remained authorized to repurchase $306.7 million of common stock pursuant to the Share Repurchase Program with an expiration date of March 31, 2019. Accumulated Other Comprehensive Income (Loss) The following tables show the activity in the components of other comprehensive income (loss), including the respective tax effects, and reclassification adjustments for the three months ended June 30, 2017 and July 1, 2016 , respectively. For the Three Months Ended June 30, 2017 (Dollars in millions) Before Tax Amount Tax Impact Net of Tax Amount Unrealized gain on derivatives $ (3 ) $ 1 $ (2 ) Amortization of prior service credit (3 ) 1 (2 ) Total other comprehensive income (loss) $ (6 ) $ 2 $ (4 ) For the Three Months Ended July 1, 2016 (Dollars in millions) Before Tax Amount Tax Impact Net of Tax Amount Unrealized gain on derivatives $ (10 ) $ 4 $ (6 ) Amortization of prior service credit (3 ) 1 (2 ) Total other comprehensive income (loss) $ (13 ) $ 5 $ (8 ) The following tables show the changes in Accumulated other comprehensive (loss) income for the three months ended June 30, 2017 and July 1, 2016 , respectively. (Dollars in millions) Cash Flow Hedge Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive (Loss) Income Balance as of March 31, 2017 $ 11 $ 20 $ 31 Other comprehensive income, net of taxes (2 ) — (2 ) Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests — (2 ) (2 ) Balance as of June 30, 2017 $ 9 $ 18 $ 27 (Dollars in millions) Cash Flow Hedge Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive (Loss) Income Balance as of April 1, 2016 $ (7 ) $ 28 $ 21 Other comprehensive income (loss), net of taxes (6 ) — (6 ) Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests — (2 ) (2 ) Balance as of July 1, 2016 $ (13 ) $ 26 $ 13 |
Segment Information
Segment Information | 3 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Note 11—Segment Information CSRA’s reportable segments are as follows: • Defense and Intelligence—provides services to the DoD, National Security Agency, branches of the Armed Forces and other DoD and intelligence agencies. • Civil—provides services to various federal agencies within the Department of Homeland Security, Department of Health and Human Services and other federal civil agencies, as well as various state and local government agencies. Beginning in the three months ended June 30, 2017, we revised Segment Operating Income to exclude the Net benefit of defined benefit plans coincident with our adoption of ASU 2017-07. The prior period has been revised to conform with the current period presentation. The following table summarizes operating results and total assets by reportable segment. (Dollars in millions) Defense and Intelligence Civil Subtotal Corporate (1) Total As of June 30, 2017 Total assets $ 2,012 $ 2,635 $ 4,647 $ 340 $ 4,987 Three Months Ended June 30, 2017 Revenues $ 525 $ 704 $ 1,229 $ — $ 1,229 Segment operating income (2) 58 97 155 (19 ) 136 Depreciation and amortization expense 41 19 60 — 60 As of July 1, 2016 Total assets $ 1,784 $ 2,768 $ 4,552 $ 232 $ 4,784 Three Months Ended July 1, 2016 Revenues $ 568 $ 686 $ 1,254 $ — $ 1,254 Segment operating income (2) 43 92 135 (22 ) 113 Depreciation and amortization expense 34 31 65 — 65 (1) Total assets allocated to the Corporate Segment at June 30, 2017 consist of the following: (a) $162 million of cash, (b) $58 million of accounts receivable, (c) $82 million of property, plant, and equipment, net, (d) $24 million of other current assets; and (e) $14 million of other long-term assets. (2) Segment operating income (loss) for the corporate segment includes corporate general and administrative expenses as well as Separation and merger costs. Segment operating income provides useful information to CSRA’s management for assessment of CSRA’s performance and results of operations and is one of the financial measures utilized to determine executive compensation. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Note 12—Supplemental Cash Flow Information (Dollars in millions) Three Months Ended June 30, 2017 July 1, 2016 Supplemental cash flow information: Cash paid for income taxes, net $ 2 $ 2 Cash paid for interest 26 28 Capital expenditures in accounts payable and other liabilities 9 13 Capital expenditures through capital lease obligations 28 — |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Jun. 30, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13—Commitments and Contingencies Commitments Letters of Credit and Surety Bonds In the normal course of business, CSRA may provide certain customers, principally governmental entities, with financial performance guarantees, which are generally backed by stand-by letters of credit or surety bonds. In general, CSRA would only be liable for the amounts of these guarantees in the event that nonperformance by CSRA permits termination of the related contract by the customer. As of June 30, 2017 and March 31, 2017 , CSRA had $20.6 million and $20.2 million respectively, of outstanding letters of credit, and $12.5 million and $12.0 million, respectively of surety bonds related to these performance guarantees. CSRA believes it is in compliance in all material respects with its performance obligations under all service contracts for which there is a financial performance guarantee and the ultimate liability, if any, incurred in connection with these guarantees will not have a material adverse effect on its unaudited Consolidated and Condensed Financial Statements. Indemnifications and Other Commitments CSRA generally indemnifies licensees of its proprietary software products against claims brought by third parties alleging infringement of intellectual property rights (including rights in patents, copyrights, trademarks, and trade secrets). Historically, CSRA has not incurred significant costs related to licensee software indemnifications. In May 2017, CSRA executed an agreement for the acquisition of NES for $105 million in cash, subject to closing adjustments. The acquisition was settled in July 2017 and was funded from cash on hand and increased borrowings. Contingencies CSRA accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated under applicable accounting guidance. CSRA believes it has appropriately recognized liabilities for any such matters. In addition to the matters noted below, CSRA is currently party to a number of disputes which involve or may involve litigation. CSRA assessed reasonably possible losses for all other such pending legal or other proceedings in the aggregate and concluded that the range of potential loss is not material. U.S. Government Agency Reviews CSRA is routinely subject to investigations and reviews relating to compliance with various laws and regulations relating to its role as a contractor to federal, state, and local government customers and in connection with performing services in countries outside of the U.S. Adverse findings in these investigations or reviews can lead to criminal, civil, or administrative proceedings, and CSRA could face penalties, fines, compensatory damages, and suspension or debarment from doing business with governmental agencies. In addition, CSRA could suffer serious reputational harm if allegations of impropriety were made against CSRA. Adverse findings could also have a material adverse effect on CSRA’s business and its unaudited Consolidated and Condensed Financial Statements due to CSRA’s reliance on government contracts. U.S. government agencies, including the Defense Contract Audit Agency (“DCAA”), Defense Contract Management Agency (“DCMA”), and others, routinely audit and review a contractor’s performance on government contracts, indirect rates, and pricing practices, and compliance with applicable contracting and procurement laws, regulations, and standards. These agencies also review the adequacy of the contractor’s compliance with government standards for its business systems including: a contractor’s accounting system, earned value management system, estimating system, materials management and accounting system, property management system, and purchasing system. CSRA’s indirect cost audits by the DCAA (including audits of both CSRA LLC and SRA) remain open for several fiscal years. Although the Company recorded contract revenues based upon estimates of costs that the Company’s management believes will be approved upon final audit or review, management does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed these estimates, CSRA’s profitability would be adversely affected. As of June 30, 2017 , CSRA has recorded a liability of $16.1 million for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs. This amount includes potential adjustments related to both pre-separation and post-separation audits or reviews. Legal Proceedings The Company is involved in various lawsuits, claims, and administrative proceedings arising in the normal course of business, including many that arose before the Company’s separation from CSC. See Note 21 — Commitments and Contingencies in CSRA’s Consolidated and Combined Financial Statements for the fiscal year ended March 31, 2017 for additional information. During the three months ended June 30, 2017, the following significant developments arose with respect to these matters: State of Maryland, Medicaid Enterprise Restructuring Project (“MERP”) On June 21, 2017 the Circuit Court for Anne Arundel County, Maryland granted the motion of the Maryland Office of the Attorney General (“OAG”) to dismiss CSCs complaint seeking a declaratory judgment that the Maryland False Health Claims Act of 2010 does not apply to the MERP contract and does not authorize the OAG to undertake discovery related thereto. The Court’s decision has no effect on the litigation of CSC’s contract claims against the State of Maryland (“State”), currently pending before the Maryland Board of Contracts Appeals, relating to the State’s refusal to amend the MERP contract and equitably adjust the compensation to be paid to CSC. Settlement discussions on CSC’s and the State’s claims have not progressed, and CSC has resumed litigation. CSRA expects to consolidate, on behalf of CSC, all of CSC’s claims against the State with any claims arising from the default termination. Management has evaluated the recoverability of assets related to the contract in light of these developments and concluded that no adjustments to its financial statements are required. Further, we have assessed the legal risk associated with the State’s claim under accounting guidance for contingencies and have concluded at this time that no reserve is required. Strauch et al. Fair Labor Standards Act Class Action On June 30, 2017 the U.S. District Court for the District of Connecticut granted class certification for former employees classified as Associate Professionals or as Professionals working in the states of California and Connecticut who worked more than 40 hours per week. The Court denied class certification for all class members in North Carolina on the basis that North Carolina law is preempted by the Fair Labor Standards Act. In addition, class certification was denied as to former employees classified as Senior Professionals in California and Connecticut. The Company filed a petition for review of the partial certification of the class with the Second Circuit on July 14, 2017. Southwest Asia Employment Contract Litigation On June 28, 2017, the Fourth Circuit ruled against CSC on its appeal of the District Court’s award of attorneys’ fees to the Rishell plaintiff. No additional accrual for indemnification of fees was necessary at June 30, 2017. In the case pending before the U.S. District Court for the Eastern District of Louisiana, on July 15, 2017, claims of 58 plaintiffs have been dismissed, and the claims of the remaining 37 plaintiffs have been limited, on the basis that these claims were untimely under Louisiana law. The Company has reduced the range of the possible losses for which it would be required to indemnify CSC to $0.6 million to $1.3 million . |
Subsequent Events
Subsequent Events | 3 Months Ended |
Jun. 30, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14—Subsequent Events The Company paid $1.6 million in July 2017 for 50,000 additional shares of CSRA common stock (at an average price of $31.77 per share) that had been repurchased in June 2017 but had not settled in cash by June 30. On August 9, 2017, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. Payment of the dividend will be made on October 3, 2017 to CSRA stockholders of record at the close of business on August 29, 2017. On August 8, 2017, we extended the term of the Purchase Agreement under which we sell certain of our accounts receivable for one year . |
Description of the Business, 21
Description of the Business, Basis of Presentation and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited Consolidated and Condensed Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”), and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2017 . The interim period unaudited Consolidated and Condensed Financial Statements are presented as described below. All intercompany transactions and balances have been eliminated. Certain information and disclosures normally required for annual financial statements have been condensed or omitted pursuant to SEC rules and regulations. In the opinion of management, all adjustments considered necessary for fair presentation of the results of the interim period presented have been included. CSRA reports its results based on a fiscal year convention comprised of four thirteen-week quarters. Every fifth year includes an additional week in the first quarter to prevent the fiscal year from moving from an approximate end of March date. Contract accounting requires significant judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Due to the size and nature of many of CSRA’s contracts, developing total revenue and costs at completion estimates requires significant judgment. Contract costs include direct labor and billable expenses, allocation of allowable indirect costs, and warranty obligations. CSRA recognizes revenue and billable expenses from these transactions on a gross basis because it is the primary obligor on contracts with customers. |
Earnings Per Share | Earnings Per Share The computation of diluted earnings per share excludes stock options and restricted stock units, whose effect, if included, would be anti-dilutive. |
Use of Estimates | Use of Estimates GAAP requires management to make estimates and assumptions that affect certain amounts reported in the unaudited Consolidated and Condensed Financial Statements and accompanying notes. These estimates are based on management’s best knowledge of historical experience, current events, and other assumptions that management considers reasonable. Actual results could differ from those estimates. Amounts subject to significant judgment and/or estimates include, but are not limited to: determining the fair values of assets acquired and liabilities assumed, derivative instruments and non-financial assets such as internally developed software for internal use; costs to complete fixed-price contracts, certain deferred costs, collectability of receivables, reserves for tax benefits, including valuation allowances on deferred tax assets, loss accruals for litigation, and inputs used for computing share-based compensation. |
Fair Value Measurements | Fair Value Measurements Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. The accounting guidance for fair value measurements establishes a three level hierarchy that prioritizes inputs as follows: Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 — Quoted prices for similar assets or liabilities or quoted market prices for identical or similar assets in markets that are not active. Level 3 — Valuations derived from techniques where one or more significant inputs are unobservable. Assets and liabilities valued using the fair value measurement guidance on a recurring basis include: pension assets and derivative instruments (consisting of interest rate swap contracts, total return swaps, and foreign currency forward exchange contracts). Pension assets are valued using model based pricing methods that use observable market data; and are, therefore, considered Level 2 inputs. The fair value of interest rate swaps is estimated based on valuation models that use observable interest rate yield curves as inputs. Total return swaps are settled on the last day of every fiscal month. Therefore, the value of any total return swaps outstanding as of any balance sheet date is not material. The inputs used to estimate the fair value of the Company's derivative instruments are classified as Level 2. No significant assets or liabilities are measured at fair value on a recurring basis using significant unobservable (Level 3) inputs. Assets and liabilities measured at fair value on a non-recurring basis include: those acquired in a business combination, equity-method investments, and long-lived assets, which are recognized at fair value if deemed to be impaired or if reclassified as assets held for sale. The fair value in these instances are then determined using Level 3 inputs. The Company’s financial instruments include cash, trade receivables, vendor payables, derivative financial instruments, and debt. As of June 30, 2017 , the carrying value of cash, trade receivables, and vendor payables approximated their fair value. The carrying amounts of the Company’s financial instruments with short-term maturities are deemed to approximate their market values. The carrying amount of the Company’s long-term debt, excluding capital leases, was $ 2.5 billion at both June 30, 2017 and March 31, 2017; and approximated its fair value on those dates based on recent trading activity. The fair value of long-term debt is estimated based on current interest rates offered to the Company for instruments with similar terms and remaining maturities, and are classified as Level 2. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New Accounting Standards During the three months ended June 30, 2017 , CSRA adopted the following Accounting Standard Update (“ASU”): In March 2017, the FASB issued ASU No. 2017-07- Compensation- Retirement Benefits (Topic 715) (“ASU 2017-07”), which changes the presentation of net periodic pension and post-retirement costs. The guidance requires that service costs associated with pension and post-retirement plans be presented in the same financial statement line item as the compensation cost for the related employees. All other net benefit costs must be reported separately from income from operations (if presented). The standard is effective for the first interim period within annual periods beginning after December 15, 2017, with early adoption permitted. Since CSRA’s defined benefit pension and post-retirement plans (the “Plans”) are frozen, historical service costs consist of administrative expenses. CSRA chose to early adopt this standard during the first quarter of the fiscal year ending March 30, 2018. As a result, net benefit costs of the Plans have been presented as a separate line item on the Company’s statements of operations. The prior period has been revised to conform with the current period presentation. Standards Issued But Not Yet Effective The following ASUs were recently issued but have not yet been adopted by CSRA: In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements and some cost guidance included in the Accounting Standards Codification (ASC). Upon adoption, ASU 2014-09 will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements. In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date , resulting in a one-year deferral of the effective date of the standard. For CSRA, ASU 2014-09 will become effective in the first quarter of fiscal 2019. The new standard may be adopted either retrospectively or on a modified retrospective basis whereby it would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to the beginning balance of retained earnings at the effective date. The new standard requires us to identify contractual performance obligations and determine when revenue should be recognized. This and other requirements could change the method or timing of revenue recognition for our firm-fixed-price and cost-reimbursable-plus-fee contract portfolio. The Company’s implementation project team completed the initial assessment phase. Their integrated approach to analyzing the standard’s impact on our contract portfolio includes a review of accounting policies and practices, evaluating the effects of the requirements on our contracts and business practices, and assessing the need for system and internal control changes or enhancements. The Company identified likely effects related to the treatment of option years as discrete contracts and the grouping of promised goods and services into performance obligations for the purpose of recognizing revenue under the new standard. As a result, recognized changes in contract estimates may result in either smaller or larger revenue adjustments than before adoption of the ASU. Anticipated losses on contracts will continue to be recognized in the period they are identified. The Company plans to adopt the standard on April 1, 2018; and to implement it using the modified retrospective method, where the cumulative effect is recognized at the date of adoption. The project team has begun work to quantify the effect of adoption on the Company’s financial statements, as well as identify required changes to the Company’s current accounting policies and internal control framework. These activities and the Company’s evaluation of the quantitative effect of adoption will extend into future periods. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes the current guidance related to accounting for leases. The guidance requires lessees to recognize most leases on-balance sheet as a right of use asset and lease liability. ASU 2016-02 also requires expanded qualitative and quantitative disclosures to provide financial statement users with additional information on the amount, timing, and uncertainty of cash flows arising from CSRA leases. The standard must be adopted using the modified retrospective approach; and will be effective for the first interim period within annual periods beginning after December 15, 2019, with early adoption permitted. CSRA is currently evaluating the impact of adoption on its financial statements. In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230) (“ASU 2016-18”). This guidance requires the inclusion of restricted cash and restricted cash-equivalent balances in the statement of cash flows. The ASU does not define "restricted cash" and "restricted cash equivalents." The Company will be required to include its restricted cash balance (currently classified within Prepaid and other current assets) in the Cash and cash equivalents balance presented in the statement of cash flows using a retrospective transition method for each period presented. A reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. An entity with a material balance of amounts generally described as restricted cash and restricted cash equivalents must also discuss the nature of the restrictions. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption, including during an interim period, is permitted. The Company has not yet determined an implementation date for this ASU. In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). Its main provisions are: (a) removing step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation; and (b) eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. ASU 2017-04 is effective for all public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted on or after January 1, 2017. The Company tests goodwill for impairment annually on the first day of the second fiscal quarter and on an interim basis if an event occurs, or circumstances change that would “more likely than not” reduce the fair value of a reporting unit below its carrying amount. The Company plans to early adopt ASU 2017-04 on July 1, 2017, which coincides with its annual assessment for the impairment of goodwill. Other recently issued ASUs effective after June 30, 2017 are not expected to have a material effect on CSRA’s financial statements. |
Description of the Business, 22
Description of the Business, Basis of Presentation and Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Change in Accounting Estimate | CSRA’s income before income taxes and noncontrolling interest for the three months ended June 30, 2017 and July 1, 2016 included the following gross favorable and unfavorable adjustments due to changes in estimated profitability on fixed price contracts accounted for under the percentage-of-completion method. Three Months Ended (Dollars in millions) June 30, 2017 July 1, 2016 Gross favorable $ 18 $ 11 Gross unfavorable (6 ) (8 ) Total net adjustments, before taxes and noncontrolling interests $ 12 $ 3 |
Sale of Receivables (Tables)
Sale of Receivables (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Transfers and Servicing [Abstract] | |
Accounts Receivable Sales Activity Under the Existing Facility | The table below provides receivable sales activity, including initial sales of newly eligible receivables during the periods presented. Three Months Ended (Dollars in millions) June 30, 2017 July 1, 2016 Sales of billed receivables $ 413 $ 468 Sales of unbilled receivables 298 228 Total sales of receivables $ 711 $ 696 Collections of sold receivables $ 715 $ 579 Operating cash flow effect, net of collections and fees from sales (5 ) 116 |
Goodwill and Other Intangible24
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of amortizing intangible assets | Purchased and internally developed software for external and internal use, net of accumulated amortization, consisted of: As of (Dollars in millions) June 30, 2017 March 31, 2017 Purchased software $ 70 $ 73 Internally developed software 3 8 Total software $ 73 $ 81 A summary of amortizing intangible assets is: As of June 30, 2017 (Dollars in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Acquisition-related intangibles: Customer-related intangibles $ 948 $ (187 ) $ 761 Backlog 65 (65 ) — Other intangible assets 6 (4 ) 2 Subtotal-acquisition-related intangibles: 1,019 (256 ) 763 Software 174 (101 ) 73 Total intangible assets $ 1,193 $ (357 ) $ 836 As of March 31, 2017 (Dollars in millions) Gross Carrying Value Accumulated Amortization Net Carrying Value Acquisition-related intangibles: Customer-related intangibles $ 948 $ (175 ) $ 773 Backlog 65 (65 ) — Other intangible assets 6 (4 ) 2 Subtotal-acquisition-related intangibles: 1,019 (244 ) 775 Software 170 (89 ) 81 Total intangible assets $ 1,189 $ (333 ) $ 856 |
Accrued Expenses and Other Cu25
Accrued Expenses and Other Current Liabilities (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities consisted of the following: As of (Dollars in millions) June 30, 2017 March 31, 2017 Accrued contract costs $ 237 $ 239 Deferred revenue 161 153 Accrued expenses 88 81 Other 39 14 Total $ 525 $ 487 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt | The following is a summary of CSRA’s outstanding debt, as of June 30, 2017 and March 31, 2017 . June 30, 2017 March 31, 2017 (Dollars in millions) Interest Rate (1) Outstanding Balance Interest Rate (1) Outstanding Balance Revolving credit facility, due November 2021 2.73% - 2.79% $ 55 2.18% - 2.20% $ — Tranche A1 facility, due November 2019 2.61% - 2.67% 389 2.06% - 2.41% 570 Tranche A2 facility, due November 2021 2.73% - 2.80% 1,569 2.18% - 2.53% 1,580 Term Loan B facility, due November 2023 3.16% - 3.55% 650 3.28% - 3.75% 466 Capitalized lease liability 2.35% - 11.4% 233 2.35% - 15.09% 216 Total debt 2,896 2,832 Less: unamortized debt issuance costs (30 ) (33 ) Less: current portion of long-term debt and capitalized lease liability (129 ) (116 ) Total long-term debt, net of current maturities $ 2,737 $ 2,683 (1) Represents the range of the lowest and highest interest rate during the period for each facility. Capitalized lease rates are the lowest and highest rates among all leases outstanding during the period. The June 30, 2017 column represents the range during the three month period then ended and the March 31, 2017 column represents the range during the fiscal year then ended. |
Schedule of Interest Expense | Interest expense consisted of: Three Months Ended (Dollars in millions) June 30, 2017 July 1, 2016 Contractual interest -revolving and term loan credit facilities $ 19 $ 19 Amortization of debt issuance costs 2 3 Interest on derivatives and other 7 8 Loss on debt extinguishment 2 — Total interest expense $ 30 $ 30 |
Schedule of Maturities of Long-term Debt | Expected maturities of long-term debt, excluding future minimum capital lease payments, for the remaining three quarters of fiscal year 2018, and fiscal years subsequent to fiscal year 2018, are as follows: (Dollars in millions) Amount Fiscal year: Remaining of fiscal year 2018 $ 62 2019 83 2020 473 2021 84 2022 1,320 2023 4 Thereafter 637 Total $ 2,663 |
Income Taxes (Tables)
Income Taxes (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | |
Summary of Income Tax Examinations | CSRA is currently under examination in several tax jurisdictions. As a result of the merger with SRA, the tax years that remain subject to examination in certain of CSRA’s major tax jurisdictions are: Jurisdiction Tax Years United States - federal 2008 and forward United States - various states 2008 and forward |
Pension and Other Post-retire28
Pension and Other Post-retirement Benefit Plans (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Retirement Benefits [Abstract] | |
Schedule of Net Benefit Costs | The net periodic pension benefit for CSRA pension plans includes the following components: (Dollars in millions) Three Months Ended June 30, 2017 July 1, 2016 Service cost (entirely administrative expenses) $ 3 $ 3 Interest cost 23 26 Expected return on assets (43 ) (49 ) Net periodic pension benefit $ (17 ) $ (20 ) (Dollars in millions) Three Months Ended June 30, 2017 July 1, 2016 Net periodic post-retirement (benefit) costs: Expected return on assets $ (1 ) $ (1 ) Amortization of prior service benefit (3 ) (3 ) Net periodic benefit $ (4 ) $ (4 ) |
Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan | The following table provides the pension plans’ projected benefit obligations, assets, and funding status: As of (Dollars in millions) June 30, 2017 March 31, 2017 Net benefit obligation $ (2,771 ) $ (2,787 ) Net plan assets 2,330 2,328 Net funded (unfunded) status $ (441 ) $ (459 ) The following table provides the OPEB plans’ projected benefit obligations, assets, and funding status: (Dollars in millions) As of June 30, 2017 March 31, 2017 Net benefit obligation $ (85 ) $ (86 ) Net plan assets 76 76 Net unfunded status $ (9 ) $ (10 ) |
Share-Based Compensation Plans
Share-Based Compensation Plans (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Schedule of Share-based Compensation, Restricted Stock and Restricted Stock Units Activity | |
Schedule of Recognized Share-based Compensation Expense | Information concerning stock options of CSRA during the three months ended June 30, 2017 , was as follows. Number of Option Shares Weighted Average Exercise Price per share Outstanding as of March 31, 2017 1,996,898 $ 24.29 Granted — — Exercised 65,820 24.05 Canceled/Forfeited 18,386 25.56 Expired 7,465 27.87 Outstanding as of June 30, 2017 1,905,227 24.27 Expected to vest in the future as of June 30, 2017 904,422 24.61 Exercisable as of June 30, 2017 1,000,805 23.96 |
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions | Information concerning stock options of CSRA during the three months ended June 30, 2017 , was as follows. Number of Option Shares Weighted Average Exercise Price per share Outstanding as of March 31, 2017 1,996,898 $ 24.29 Granted — — Exercised 65,820 24.05 Canceled/Forfeited 18,386 25.56 Expired 7,465 27.87 Outstanding as of June 30, 2017 1,905,227 24.27 Expected to vest in the future as of June 30, 2017 904,422 24.61 Exercisable as of June 30, 2017 1,000,805 23.96 |
Disclosure of Share-based Compensation by Award Type | Information concerning stock options of CSRA during the three months ended June 30, 2017 , was as follows. Number of Option Shares Weighted Average Exercise Price per share Outstanding as of March 31, 2017 1,996,898 $ 24.29 Granted — — Exercised 65,820 24.05 Canceled/Forfeited 18,386 25.56 Expired 7,465 27.87 Outstanding as of June 30, 2017 1,905,227 24.27 Expected to vest in the future as of June 30, 2017 904,422 24.61 Exercisable as of June 30, 2017 1,000,805 23.96 Information concerning RSUs and PSUs of CSRA during the three months ended June 30, 2017 , was as follows. Number of Restricted Stock Units Weighted Average Fair Value Outstanding as of March 31, 2017 857,914 $ 26.95 Granted 610,611 30.22 Vested 32,441 33.11 Canceled/Forfeited 6,595 26.26 Outstanding as of June 30, 2017 1,429,489 28.21 |
Stockholder's Equity and Accu30
Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following tables show the activity in the components of other comprehensive income (loss), including the respective tax effects, and reclassification adjustments for the three months ended June 30, 2017 and July 1, 2016 , respectively. For the Three Months Ended June 30, 2017 (Dollars in millions) Before Tax Amount Tax Impact Net of Tax Amount Unrealized gain on derivatives $ (3 ) $ 1 $ (2 ) Amortization of prior service credit (3 ) 1 (2 ) Total other comprehensive income (loss) $ (6 ) $ 2 $ (4 ) For the Three Months Ended July 1, 2016 (Dollars in millions) Before Tax Amount Tax Impact Net of Tax Amount Unrealized gain on derivatives $ (10 ) $ 4 $ (6 ) Amortization of prior service credit (3 ) 1 (2 ) Total other comprehensive income (loss) $ (13 ) $ 5 $ (8 ) |
Reclassification Out of Accumulated Other Comprehensive Income (Loss) | The following tables show the changes in Accumulated other comprehensive (loss) income for the three months ended June 30, 2017 and July 1, 2016 , respectively. (Dollars in millions) Cash Flow Hedge Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive (Loss) Income Balance as of March 31, 2017 $ 11 $ 20 $ 31 Other comprehensive income, net of taxes (2 ) — (2 ) Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests — (2 ) (2 ) Balance as of June 30, 2017 $ 9 $ 18 $ 27 (Dollars in millions) Cash Flow Hedge Pension and Other Post-retirement Benefit Plans Accumulated Other Comprehensive (Loss) Income Balance as of April 1, 2016 $ (7 ) $ 28 $ 21 Other comprehensive income (loss), net of taxes (6 ) — (6 ) Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests — (2 ) (2 ) Balance as of July 1, 2016 $ (13 ) $ 26 $ 13 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Segment Reporting [Abstract] | |
Operating Results and Total Assets by Reportable Segment | The following table summarizes operating results and total assets by reportable segment. (Dollars in millions) Defense and Intelligence Civil Subtotal Corporate (1) Total As of June 30, 2017 Total assets $ 2,012 $ 2,635 $ 4,647 $ 340 $ 4,987 Three Months Ended June 30, 2017 Revenues $ 525 $ 704 $ 1,229 $ — $ 1,229 Segment operating income (2) 58 97 155 (19 ) 136 Depreciation and amortization expense 41 19 60 — 60 As of July 1, 2016 Total assets $ 1,784 $ 2,768 $ 4,552 $ 232 $ 4,784 Three Months Ended July 1, 2016 Revenues $ 568 $ 686 $ 1,254 $ — $ 1,254 Segment operating income (2) 43 92 135 (22 ) 113 Depreciation and amortization expense 34 31 65 — 65 (1) Total assets allocated to the Corporate Segment at June 30, 2017 consist of the following: (a) $162 million of cash, (b) $58 million of accounts receivable, (c) $82 million of property, plant, and equipment, net, (d) $24 million of other current assets; and (e) $14 million of other long-term assets. (2) Segment operating income (loss) for the corporate segment includes corporate general and administrative expenses as well as Separation and merger costs. |
Supplemental Cash Flow Inform32
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Jun. 30, 2017 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of supplemental cash flow information | (Dollars in millions) Three Months Ended June 30, 2017 July 1, 2016 Supplemental cash flow information: Cash paid for income taxes, net $ 2 $ 2 Cash paid for interest 26 28 Capital expenditures in accounts payable and other liabilities 9 13 Capital expenditures through capital lease obligations 28 — |
Description of the Business, 33
Description of the Business, Basis of Presentation and Recent Accounting Pronouncements (Details) $ in Millions | May 22, 2017USD ($) | Jun. 30, 2017USD ($)reportable_segmentshares | Jul. 01, 2016USD ($)shares | Mar. 31, 2017USD ($) |
Business Acquisition [Line Items] | ||||
Number of segments | reportable_segment | 2 | |||
Percentage of revenues recognized under percentage of completion method | 35.00% | 37.00% | ||
Unbilled contracts receivable | $ 16.8 | $ 15.6 | ||
Depreciation expense | 37.1 | $ 32.4 | ||
Long-term debt, excluding capital leases | $ 2,549 | $ 2,511 | ||
NES Associates, LLC | ||||
Business Acquisition [Line Items] | ||||
Payments for acquisition | $ 105 | |||
Stock options | ||||
Business Acquisition [Line Items] | ||||
Anti-dilutive shares excluded from diluted earnings per share (in shares) | shares | 398,322 | 2,194,894 |
Description of the Business, 34
Description of the Business, Basis of Presentation and Recent Accounting Pronouncements - Income Before Income Taxes and Noncontrolling Interest Included Gross Favorable and Unfavorable Adjustments (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Gross favorable | $ 18 | $ 11 |
Gross unfavorable | (6) | (8) |
Total net adjustments, before taxes and noncontrolling interests | $ 12 | $ 3 |
Sale of Receivables - Narrative
Sale of Receivables - Narrative (Details) - USD ($) | 3 Months Ended | ||
Jun. 30, 2017 | Jul. 01, 2016 | Mar. 31, 2017 | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Cash collected from sale of receivables but not remitted | $ 18,800,000 | $ 37,000,000 | |
The Bank of Tokyo-Mitsubishi UFJ, Ltd, The Bank of Nova Scotia, and Mizuho Bank, Ltd. | |||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Receivables purchase facility commitment amount | 450,000,000 | ||
Other expense (income), net | |||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | |||
Purchase discount and administrative fees | $ 1,200,000 | $ 600,000 |
Sale of Receivables - Accounts
Sale of Receivables - Accounts Receivable Sales Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | ||
Sales of receivables | $ 711 | $ 696 |
Collections of sold receivables | 715 | 579 |
Operating cash flow effect, net of collections and fees from sales | (5) | 116 |
Sales of billed receivables | ||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | ||
Sales of receivables | 413 | 468 |
Sales of unbilled receivables | ||
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items] | ||
Sales of receivables | $ 298 | $ 228 |
Derivative Instruments (Details
Derivative Instruments (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Mar. 31, 2017 |
Foreign Exchange Forward | ||
Derivative [Line Items] | ||
Notional value | $ 17.2 | |
Derivatives Designated for Hedge Accounting | Interest rate swap | ||
Derivative [Line Items] | ||
Notional value | 1,400 | $ 1,400 |
Prepaid and other current assets and Other assets | Derivatives Designated for Hedge Accounting | Interest rate swap | ||
Derivative [Line Items] | ||
Derivative asset | $ 14.8 | |
Accrued expenses and other current liabilities and Other long-term liabilities | Derivatives Designated for Hedge Accounting | Interest rate swap | ||
Derivative [Line Items] | ||
Derivative liability | $ 18.2 |
Goodwill and Other Intangible38
Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, period increase (decrease) | $ 0 | $ 0 |
Goodwill and Other Intangible39
Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Mar. 31, 2017 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 1,193 | $ 1,189 |
Accumulated Amortization | (357) | (333) |
Net Carrying Value | 836 | 856 |
Customer-related intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 948 | 948 |
Accumulated Amortization | (187) | (175) |
Net Carrying Value | 761 | 773 |
Backlog | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 65 | 65 |
Accumulated Amortization | (65) | (65) |
Net Carrying Value | 0 | 0 |
Other intangible assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 6 | 6 |
Accumulated Amortization | (4) | (4) |
Net Carrying Value | 2 | 2 |
Acquisition Related Intangibles | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 1,019 | 1,019 |
Accumulated Amortization | (256) | (244) |
Net Carrying Value | 763 | 775 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 174 | 170 |
Accumulated Amortization | (101) | (89) |
Net Carrying Value | 73 | 81 |
Purchased software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | 70 | 73 |
Internally developed software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Net Carrying Value | $ 3 | $ 8 |
Goodwill and Other Intangible40
Goodwill and Other Intangible Assets - Other Intangible Assets Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense of intangible assets | $ 23.3 | $ 32.6 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2018 (remainder) | 70.1 | |
2,019 | 81.5 | |
2,020 | 75.4 | |
2,021 | 66.3 | |
2,022 | 59.4 | |
Purchased software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense of intangible assets | 5.9 | 3.6 |
Internally developed software for external use | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortization expense of intangible assets | 5.2 | $ 0.2 |
Software | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2018 (remainder) | 17.6 | |
2,019 | 19.7 | |
2,020 | 16.9 | |
2,021 | 11.5 | |
2,022 | $ 7.3 |
Accrued Expenses and Other Cu41
Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions | Jun. 30, 2017 | Mar. 31, 2017 |
Payables and Accruals [Abstract] | ||
Accrued contract costs | $ 237 | $ 239 |
Deferred revenue | 161 | 153 |
Accrued expenses | 88 | 81 |
Other | 39 | 14 |
Accrued expenses and other current liabilities | $ 525 | $ 487 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Jun. 15, 2017 | Jun. 30, 2017 | Mar. 31, 2017 |
Second Amendment, Credit Agreement | |||
Debt Instrument [Line Items] | |||
Quarterly repayment amounts, September 2017 through December 2022 | $ 500,000 | ||
Quarterly repayment amounts, thereafter | 2,400,000 | ||
Deferred Finance Costs, Own-share Lending Arrangement, Issuance Costs, Gross | $ 1,500,000 | ||
Tranche A1 facility, due November 2019 | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 180,600,000 | ||
Write off of deferred debt issuance cost | 1,700,000 | ||
Term Loan Facilities | Second Amendment, Credit Agreement | |||
Debt Instrument [Line Items] | |||
Reduction in margin over indexed interest rates | 0.50% | ||
Debt increase (decrease) | $ 183,700,000 | ||
Long-term debt | $ 650,000,000 | ||
Term Loan Facilities | Tranche A1 facility, due November 2019 | |||
Debt Instrument [Line Items] | |||
Long-term debt | 389,000,000 | $ 570,000,000 | |
Revolving credit facility | Line of credit | |||
Debt Instrument [Line Items] | |||
Repayments of debt | 55,000,000 | ||
Revolving credit facility | Line of credit | Revolving credit facility, due November 2021 | |||
Debt Instrument [Line Items] | |||
Maximum borrowing capacity | 700,000,000 | ||
Long-term debt | 55,000,000 | $ 0 | |
Term Loan Facilities | Line of credit | |||
Debt Instrument [Line Items] | |||
Repayments of debt | $ 10,800,000 | ||
LIBOR | Term Loan Facilities | Second Amendment, Credit Agreement | |||
Debt Instrument [Line Items] | |||
Basis spread | 2.00% |
Debt - Long-term Debt (Details)
Debt - Long-term Debt (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Mar. 31, 2017 | |
Debt Instrument [Line Items] | ||
Capitalized lease liability | $ 233 | $ 216 |
Total debt | 2,896 | 2,832 |
Less: unamortized debt issuance costs | (30) | (33) |
Less: current portion of long-term debt and capitalized lease liability | (129) | (116) |
Total long-term debt, net of current maturities | 2,737 | 2,683 |
Revolving credit facility, due November 2021 | Revolving credit facility | Line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | 55 | 0 |
Tranche A1 facility, due November 2019 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt | 389 | 570 |
Tranche A2 facility, due November 2021 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,569 | 1,580 |
Term Loan B facility, due November 2023 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 650 | $ 466 |
Minimum | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 2.35% | 2.35% |
Minimum | Revolving credit facility, due November 2021 | Revolving credit facility | Line of credit | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 2.73% | 2.18% |
Minimum | Tranche A1 facility, due November 2019 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 2.61% | 2.06% |
Minimum | Tranche A2 facility, due November 2021 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 2.73% | 2.18% |
Minimum | Term Loan B facility, due November 2023 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 3.16% | 3.28% |
Maximum | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 11.40% | 15.09% |
Maximum | Revolving credit facility, due November 2021 | Revolving credit facility | Line of credit | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 2.79% | 2.20% |
Maximum | Tranche A1 facility, due November 2019 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 2.67% | 2.41% |
Maximum | Tranche A2 facility, due November 2021 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 2.80% | 2.53% |
Maximum | Term Loan B facility, due November 2023 | Term Loan Facilities | ||
Debt Instrument [Line Items] | ||
Credit facility, interest rate during period | 3.55% | 3.75% |
Debt - Interest Expense (Detail
Debt - Interest Expense (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Debt Disclosure [Abstract] | ||
Contractual interest -revolving and term loan credit facilities | $ 19 | $ 19 |
Amortization of debt issuance costs | 2 | 3 |
Interest on derivatives and other | 7 | 8 |
Loss on debt extinguishment | 2 | 0 |
Total interest expense | $ 30 | $ 30 |
Debt - Maturities of Long-term
Debt - Maturities of Long-term Debt (Details) $ in Millions | Jun. 30, 2017USD ($) |
(Dollars in millions) | |
Remaining of fiscal year 2018 | $ 62 |
2,019 | 83 |
2,020 | 473 |
2,021 | 84 |
2,022 | 1,320 |
2,023 | 4 |
Thereafter | 637 |
Total | $ 2,663 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Income Tax Examination [Line Items] | ||
Effective tax rate (as a percent) | 36.50% | 35.70% |
Domestic Tax Authority | Internal Revenue Service (IRS) | ||
Income Tax Examination [Line Items] | ||
Income tax examination, estimate of possible loss | $ 136.7 |
Pension and Other Post-retire47
Pension and Other Post-retirement Benefit Plans - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Defined Benefit Pension Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Contributions by employer | $ 2.1 | |
Estimated future employer contributions for remainder of fiscal year | 6.2 | |
Supplemental Executive Retirement Plan | ||
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items] | ||
Contributions by employer | 0.4 | $ 0.4 |
Estimated future employer contributions for remainder of fiscal year | $ 1.1 |
Pension and Other Post-retire48
Pension and Other Post-retirement Benefit Plans - Defined Benefit Pension Plans (Details) - Defined Benefit Pension Plan - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2017 | Jul. 01, 2016 | Mar. 31, 2017 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Service cost (entirely administrative expenses) | $ 3 | $ 3 | |
Interest cost | 23 | 26 | |
Expected return on assets | (43) | (49) | |
Net periodic benefit | (17) | $ (20) | |
Defined Benefit Plan, Funded (Unfunded) Status of Plan [Abstract] | |||
Net benefit obligation | (2,771) | $ (2,787) | |
Net plan assets | 2,330 | 2,328 | |
Net funded (unfunded) status | $ (441) | $ (459) |
Pension and Other Post-retire49
Pension and Other Post-retirement Benefit Plans - Other Postretirement Benefit Plans (Details) - Other Postretirement Benefit Plan - USD ($) $ in Millions | 3 Months Ended | ||
Jun. 30, 2017 | Jul. 01, 2016 | Mar. 31, 2017 | |
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract] | |||
Expected return on assets | $ (1) | $ (1) | |
Amortization of prior service benefit | (3) | (3) | |
Net periodic benefit | (4) | $ (4) | |
Defined Benefit Plan, Funded (Unfunded) Status of Plan [Abstract] | |||
Net benefit obligation | (85) | $ (86) | |
Net plan assets | 76 | 76 | |
Net funded (unfunded) status | $ (9) | $ (10) |
Share-Based Compensation Plan50
Share-Based Compensation Plans - Narrative (Details) $ in Millions | Nov. 26, 2015plan | Jun. 30, 2017USD ($)shares | Jul. 01, 2016USD ($) | Mar. 31, 2017USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Accounts payable | $ 157 | $ 187 | ||
Number of common shares available for grant at period end (in shares) | shares | 6,461,283 | |||
Stock options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | $ 4.7 | |||
Period of recognition for unrecognized compensation expense | 1 year 9 months | |||
RSUs includings PSUs | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation expense | $ 28.1 | |||
Period of recognition for unrecognized compensation expense | 2 years 6 months 21 days | |||
CSRA corporate and non-employee director grants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 0.4 | $ 1.3 | ||
CSC | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of stock incentive plans | plan | 2 | |||
Selling, general and administrative expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based compensation expense | $ 3.8 | $ 3 | ||
Settlement of Equity Awards | Affiliated entity | CSC | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Accounts payable | $ 1.3 |
Share-Based Compensation Plan51
Share-Based Compensation Plans - Stock Options (Details) - Stock options | 3 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Outstanding beginning of period (in shares) | shares | 1,996,898 |
Granted (in shares) | shares | 0 |
Exercised (in shares) | shares | 65,820 |
Canceled/Forfeited (in shares) | shares | 18,386 |
Expired (in shares) | shares | 7,465 |
Outstanding end of period (in shares) | shares | 1,905,227 |
Expected to vest in the future as of end of period (in shares) | shares | 904,422 |
Exercisable as of end of period (in shares) | shares | 1,000,805 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted average exercise price - beginning of period (in USD per share) | $ / shares | $ 24.29 |
Weighted average exercise price - granted (in USD per share) | $ / shares | 0 |
Weighted average exercise price - exercised (in USD per share) | $ / shares | 24.05 |
Weighted average exercise price - canceled/forfeited (in USD per share) | $ / shares | 25.56 |
Weighted average exercise price - expired (in USD per share) | $ / shares | 27.87 |
Weighted average exercise price - end of period (in USD per share) | $ / shares | 24.27 |
Expected to vest in the future as of end of period (in USD per share) | $ / shares | 24.61 |
Exercisable as of end of period (in USD per share) | $ / shares | $ 23.96 |
Share-Based Compensation Plan52
Share-Based Compensation Plans - Restricted Stock Units (Details) - RSUs includings PSUs | 3 Months Ended |
Jun. 30, 2017$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward] | |
Beginning balance (in shares) | shares | 857,914 |
Granted (in shares) | shares | 610,611 |
Vested (in shares) | shares | 32,441 |
Canceled/forfeited (in shares) | shares | 6,595 |
Ending balance (in shares) | shares | 1,429,489 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Beginning balance (in USD per share) | $ / shares | $ 26.95 |
Granted (in USD per share) | $ / shares | 30.22 |
Vested (in USD per share) | $ / shares | 33.11 |
Canceled/forfeited (in USD per share) | $ / shares | 26.26 |
Ending balance (in USD per share) | $ / shares | $ 28.21 |
Stockholder's Equity and Accu53
Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) - Stockholder's Equity (Details) - USD ($) | 1 Months Ended | 3 Months Ended | ||
Jun. 30, 2017 | May 31, 2017 | Jun. 30, 2017 | Nov. 30, 2015 | |
Equity [Abstract] | ||||
Cash dividend per common share (in USD per share) | $ 0.10 | |||
Common stock with dividend payout (in shares) | 163,760,678 | |||
Dividends paid | $ 16,400,000 | |||
Stock repurchase program, authorized amount | $ 400,000,000 | |||
Shares repurchases during the period (in shares) | 50,000 | 450,000 | ||
Common stock repurchased | $ 14,300,000 | |||
Common stock, average price per share repurchased (in USD per share) | $ 31.77 | $ 31.71 | ||
Stock repurchase program, remaining authorized amount | $ 306,700,000 | $ 306,700,000 |
Stockholder's Equity and Accu54
Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) - Other Comprehensive Income (Loss) Activity (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Net of Tax Amount | ||
Total other comprehensive income (loss), before tax amount | $ (6) | $ (13) |
Total other comprehensive income (loss), tax impact | 2 | 5 |
Other comprehensive income (loss), net of taxes | (4) | (8) |
Unrealized gain on derivatives | ||
Before Tax Amount | ||
OCI, before tax | (3) | (10) |
Tax Impact | ||
OCI, tax impact | 1 | 4 |
Net of Tax Amount | ||
OCI, net of taxes | (2) | (6) |
Amortization of prior service credit | ||
Before Tax Amount | ||
OCI, before tax | (3) | (3) |
Tax Impact | ||
OCI, tax impact | 1 | 1 |
Net of Tax Amount | ||
OCI, net of taxes | $ (2) | $ (2) |
Stockholder's Equity and Accu55
Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive (loss) income, beginning balance | $ 359 | |
Accumulated other comprehensive (loss) income, ending balance | 411 | |
Cash Flow Hedge | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive (loss) income, beginning balance | 11 | $ (7) |
Other comprehensive income, net of taxes | (2) | (6) |
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests | 0 | 0 |
Accumulated other comprehensive (loss) income, ending balance | 9 | (13) |
Pension and Other Post-retirement Benefit Plans | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive (loss) income, beginning balance | 20 | 28 |
Other comprehensive income, net of taxes | 0 | 0 |
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests | (2) | (2) |
Accumulated other comprehensive (loss) income, ending balance | 18 | 26 |
Accumulated Other Comprehensive (Loss) Income | ||
Accumulated Other Comprehensive Income (Loss) [Roll Forward] | ||
Accumulated other comprehensive (loss) income, beginning balance | 31 | 21 |
Other comprehensive income, net of taxes | (2) | (6) |
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests | (2) | (2) |
Accumulated other comprehensive (loss) income, ending balance | $ 27 | $ 13 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Millions | 3 Months Ended | |||
Jun. 30, 2017 | Jul. 01, 2016 | Mar. 31, 2017 | Apr. 01, 2016 | |
Segment Reporting Information [Line Items] | ||||
Total assets | $ 4,987 | $ 4,784 | $ 4,888 | |
Revenues | 1,229 | 1,254 | ||
Operating Income (Loss) | 136 | 113 | ||
Depreciation and amortization expense | 60 | 65 | ||
Cash | 194 | 133 | 126 | $ 130 |
Property, plant and equipment | 623 | 610 | ||
Other long-term assets | 83 | $ 87 | ||
Operating Segments | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 4,647 | 4,552 | ||
Revenues | 1,229 | 1,254 | ||
Operating Income (Loss) | 155 | 135 | ||
Depreciation and amortization expense | 60 | 65 | ||
Operating Segments | Defense and Intelligence | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 2,012 | 1,784 | ||
Revenues | 525 | 568 | ||
Operating Income (Loss) | 58 | 43 | ||
Depreciation and amortization expense | 41 | 34 | ||
Operating Segments | Civil | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 2,635 | 2,768 | ||
Revenues | 704 | 686 | ||
Operating Income (Loss) | 97 | 92 | ||
Depreciation and amortization expense | 19 | 31 | ||
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Total assets | 340 | 232 | ||
Revenues | 0 | 0 | ||
Operating Income (Loss) | (19) | (22) | ||
Depreciation and amortization expense | 0 | $ 0 | ||
Cash | 162 | |||
Accounts receivable | 58 | |||
Property, plant and equipment | 82 | |||
Other current assets | 24 | |||
Other long-term assets | $ 14 |
Supplemental Cash Flow Inform57
Supplemental Cash Flow Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Jun. 30, 2017 | Jul. 01, 2016 | |
Supplemental cash flow information: | ||
Cash paid for income taxes, net | $ 2 | $ 2 |
Cash paid for interest | 26 | 28 |
Capital expenditures in accounts payable and other liabilities | 9 | 13 |
Capital expenditures through capital lease obligations | $ 28 | $ 0 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Jul. 15, 2017plaintiff | May 22, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) |
Potential adjustments on government contracts | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, estimate of possible loss | $ 16.1 | |||
Minimum | Southwest Asia Employment Contract Litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, estimate of possible loss | 0.6 | |||
Maximum | Southwest Asia Employment Contract Litigation | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, estimate of possible loss | 1.3 | |||
Stand-by letters of credit | ||||
Loss Contingencies [Line Items] | ||||
Total guarantees outstanding | 20.6 | $ 0 | ||
Surety bonds | ||||
Loss Contingencies [Line Items] | ||||
Total guarantees outstanding | $ 12.5 | $ 0 | ||
Subsequent event | Litigation Cases Similar To Southwest Asia Employment Contract Litigation [Member] | Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Number of Plaintiffs of Dismissed Cases | plaintiff | 58 | |||
Number of plaintiffs | plaintiff | 37 | |||
NES Associates, LLC | ||||
Loss Contingencies [Line Items] | ||||
Payments for acquisition | $ 105 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ / shares in Units, $ in Millions | Aug. 08, 2017 | Aug. 04, 2017 | Jul. 31, 2017 | Jun. 30, 2017 | Jun. 30, 2017 | Jul. 01, 2016 |
Subsequent Event [Line Items] | ||||||
Common stock repurchased | $ 14.3 | |||||
Shares repurchases during the period (in shares) | 50,000 | 450,000 | ||||
Common stock, average price per share repurchased (in USD per share) | $ 31.77 | $ 31.71 | ||||
Cash dividend per common share (in USD per share) | $ 0.1 | $ 0.10 | ||||
Subsequent event | ||||||
Subsequent Event [Line Items] | ||||||
Common stock repurchased | $ 1.6 | |||||
Cash dividend per common share (in USD per share) | $ 0.10 | |||||
Extended term of the Purchase Agreement under which we sell certain of our accounts receivable | 1 year |