Booz Allen Hamilton
Booz Allen Hamilton Holding Corp (Form: 8-K, Received: 05/22/2013 07:05:09)


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________ 
FORM 8-K
 ___________________________________
 
  CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 22, 2013  
___________________________________
  Booz Allen Hamilton Holding Corporation
(Exact name of Registrant as specified in its charter)  
___________________________________
 
 
 
 
 
 
 
Delaware
 
001-34972
 
26-2634160
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
 
 
8283 Greensboro Drive, McLean, Virginia
 
22,102
(Address of principal executive offices)
 
(Zip Code)
Registrant’s telephone number, including area code: (703) 902-5000  
___________________________________
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))






Item 2.02 Results of Operations and Financial Condition.
On May 22, 2013, Booz Allen Hamilton Holding Corporation (the “Company”) issued a press release announcing its results of operations for the fiscal year and quarter ended ended March 31, 2013. A copy of the press release is attached hereto as Exhibit 99.1.
On May 22, 2013, the Company posted to the “Investor Relations” section of its website slides that accompany the earnings conference call. A copy of the slides is attached hereto as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
 
Exhibit
No.
  
Description
 
 
99.1
  
Press Release dated May 22, 2013
 
 
99.2
  
Slides for the Earnings Conference Call







SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
                                
 
Booz Allen Hamilton Holding Corporation
 
BY: /s/ Samuel R. Strickland
Samuel R. Strickland
Executive Vice President, Chief Financial Officer and Chief Administrative Officer
Date: May 22, 2013






INDEX TO EXHIBITS
 
 
 
 
Exhibit
No.
  
Description
 
 
99.1
  
Press Release dated May 22, 2013
 
 
99.2
  
Slides for the Earnings Conference Call




Exhibit 99.1

BOOZ ALLEN HAMILTON ANNOUNCES
FOURTH QUARTER AND FULL YEAR FISCAL 2013 RESULTS

Fourth quarter revenue increased 0.3 percent, to $1.55 billion

Full year revenue decreased 1.7 percent to $5.76 billion

Full year Adjusted EBITDA increased 8.4 percent, to $529 million

Full year Adjusted Diluted Earnings per Share increased by 4 cents, to $1.65 per share

Quarterly dividend increased to 10 cents per share - payable on June 28, 2013


McLean, Virginia; May 22, 2013 - Booz Allen Hamilton Holding Corporation (NYSE:BAH), the parent company of management and technology consulting firm Booz Allen Hamilton Inc., today announced preliminary results for the fourth quarter and full year of its fiscal 2013 with a modest decline in full-year revenue and solid improvements in fiscal 2013 adjusted earnings. Booz Allen also reported total backlog of $11.83 billion as of March 31, 2013. Booz Allen's fiscal year runs from April 1 to March 31, with the fourth quarter of fiscal 2013 ending March 31, 2013.

Revenue in the fourth quarter of fiscal 2013 was $1.55 billion, compared with $1.54 billion in the prior year period, an increase of 0.3 percent. In fiscal year 2013, revenue was $5.76 billion, compared with $5.86 billion in the prior year period, a decrease of 1.7 percent. In fiscal 2013, Adjusted Net Income increased to $239.5 million from $227.2 million in fiscal 2012, while net income decreased to $219.1 million from $240.0 million in fiscal 2012. Adjusted Diluted Earnings per Share was $1.65 in fiscal 2013 compared with $1.61 in fiscal 2012. Diluted earnings per share for fiscal 2013 was $1.45 compared with $1.70 in fiscal 2012.

During fiscal 2013, the Company declared and paid a total of $8.36 per share in dividends. Today, the Company is announcing a regular cash dividend of $0.10 per share, an 11 percent increase in the per share quarterly dividend amount, which will be payable on June 28, 2013 to stockholders of record on June 10, 2013.

Ralph W. Shrader, Booz Allen's Chairman, Chief Executive Officer, and President, said “We are proud to have maintained revenue close to last year's levels and to have increased our adjusted earnings, demonstrating demand for our services from clients and our ability to manage our business well despite a challenging market environment. In fiscal year 2013, we returned more than eight dollars per share in total dividends to our stockholders and today are announcing an 11 percent increase in our regular quarterly dividend to $0.10 per share - demonstrating our continued focus on delivering value to our stockholders.

“Booz Allen is winning new work in all of our major markets - with large contract awards in the fourth quarter of fiscal 2013 from the US Army, Air Force, Navy and Marine Corps, NASA, the Department of Homeland Security, Department of the Interior, and the intelligence agencies. We are effectively managing non-billable cost which is important in today's highly-competitive environment, and we are investing in our Company's future through strategic acquisitions and continued investment in core and emerging business areas, including the creation of our new





Strategic Innovation Group to drive growth and build capabilities in areas such as predictive intelligence, hardware and software prototyping, and advanced analytics,” Shrader said.

Financial Review

Full Fiscal Year 2013 - Below is a summary of Booz Allen's results for fiscal year 2013, and the key factors driving those results:

Booz Allen's 1.7 percent decrease in revenue in fiscal 2013 compared with the prior year resulted from a small reduction in billable expenses and reductions in headcount due to modestly lower demand in an uncertain federal budget environment. Lower headcount led to fewer billable hours in total; however, improved productivity of consulting staff helped minimize the impact.

A shift toward more work performed at client sites has resulted in a slight reduction in our average billing rate. We also saw a decrease in revenue in fiscal 2013 compared with fiscal 2012 due to the sale of our state and local transportation business in July 2011; however, this was more than offset by an increase in revenue of $100.1 million attributable to our purchase of the Defense Systems & Engineering Support Division (DSES) of ARINC Incorporated in November 2012.

In fiscal 2013, operating income increased to $446.2 million from $387.4 million in fiscal 2012, and Adjusted Operating Income increased to $467.3 million from $429.2 million in fiscal 2012. In addition to the savings from decreases in senior staff compensation costs and infrastructure costs as a result of the January 2012 cost reduction actions, the increase in fiscal 2013 operating income and Adjusted Operating Income over fiscal 2012 levels was driven by improvements in consulting staff productivity and more effective management of unbillable costs, and a decrease in stock-based compensation expenses.

In fiscal 2013, net income decreased to $219.1 million from $240.0 million in fiscal 2012. This decrease was primarily attributable to two factors: the higher interest expense following the refinancing transaction associated with the special dividend declared in July 2012, which accounted for an approximate $14.5 million reduction in net income; and the release of a significant income tax reserve in fiscal 2012 which substantially reduced the effective tax rate for fiscal 2012. This decrease was partially offset by previously mentioned improvements in operating income.

Adjusted Net Income increased to $239.5 million from $227.2 million in fiscal 2012. This increase was primarily a result of the growth in Adjusted Operating Income, partially offset by the increased interest expense from our refinancing transaction. Adjusted EBITDA increased 8.4 percent to $528.8 million in fiscal 2013 compared with $488.1 million in fiscal 2012, primarily as a result of the growth in Adjusted Operating Income. In fiscal 2013, diluted EPS decreased to $1.45 per share from $1.70 per share in fiscal 2012. In fiscal 2013, Adjusted Diluted EPS increased to $1.65 per share from $1.61 per share in fiscal 2012. The per share earnings were driven by the same factors as net income and Adjusted Net Income.

Net cash provided by operating activities in fiscal 2013 was $464.7 million compared to $360.0 million in fiscal 2012. Free Cash Flow was $431.5 million in fiscal 2013, compared to $283.1 in fiscal 2012. Free Cash Flow in fiscal 2013 benefitted from continued strong cash collections, Days





Sales Outstanding of 61 days in the fourth quarter of fiscal 2013, compared with 65 days in the prior year quarter, and a decrease in capital spending.

Funded backlog as of March 31, 2013, was $2.51 billion, compared to $2.90 billion as of March 31, 2012. Booz Allen's total backlog as of March 31, 2013, was $11.83 billion, compared to $10.80 billion as of March 31, 2012.

Fourth Quarter 2013 - Below is a summary of Booz Allen's results for the fiscal 2013 fourth quarter, and the key factors driving those results:

Booz Allen's 0.3 percent increase in revenue in the fourth quarter of fiscal 2013 compared with the prior year period resulted from the addition of $78.2 million as a result of our purchase of DSES, improved productivity of consulting staff, revenue associated with the recovery of additional incentive compensation and other allowable indirect expenses, and a modest increase in billable expenses over the prior year period.

In the fourth quarter of fiscal 2013, Adjusted Operating Income increased to $116.9 million from $115.4 million in the prior year period, and operating income increased to $112.9 million from $97.5 million in the prior year period. The improvement in Adjusted Operating Income and operating income were driven by savings from decreases in senior staff compensation costs and infrastructure costs as a result of the January 2012 cost reduction actions, improved productivity of consulting staff, and the recovery of additional incentive compensation and other allowable indirect expenses.

In the fourth quarter of fiscal 2013, Adjusted Net Income decreased to $58.2 million from $62.2 million in the prior year period. The decline was primarily driven by the increased interest expense of approximately $5.1 million related to the refinancing transaction associated with the special dividend declared in July 2012.

Net income increased to $54.8 million from $50.6 million in the prior year period. This increase was primarily a result of the growth in operating income, partially offset by the increased interest expense from our refinancing transaction. Adjusted EBITDA increased 2.3 percent to $133.6 million from $130.6 million in the prior year period. These metrics were impacted by the same factors as Adjusted Operating Income and operating income.

In the fourth quarter of fiscal 2013, Adjusted Diluted EPS decreased to $0.40 per share from $0.44 per share in the prior year period; diluted EPS increased to $0.37 per share from $0.36 per share in the prior year period. The per share earnings were driven by the same factors as net income and Adjusted Net Income.


Financial Outlook

For fiscal 2014, we expect a low single digit decline in revenue. At the bottom line, for the full year, we are forecasting diluted EPS to be in the range of $1.47 to $1.57, and Adjusted Diluted EPS to be on the order of $1.55 to $1.65 per share. Our overall EPS outlook incorporates our expectations related to the business impacts of sequestration and reflects our confidence in our ability to generate demand for our services, while effectively managing our costs and consulting staff capacity in line with demand.






These EPS estimates are based on fiscal year 2014 estimated average diluted shares outstanding of approximately 149.0 million shares.


Conference Call Information
Booz Allen will host a conference call at 8 a.m. EDT on Wednesday, May 22, 2013, to discuss the financial results for its fourth quarter and full year for Fiscal 2013 (ending March 31, 2013). Analysts and institutional investors may participate on the call by dialing (877) 375-9141 (International: 253-237-1151). The conference call will be webcast simultaneously to the public through a link on the investor relations section of the Booz Allen Hamilton web site at investors.boozallen.com . A replay of the conference call will be available online at investors.boozallen.com beginning at 11 a.m. EDT on May 22, 2013, and continuing for thirty days. The replay will also be available by telephone for seven days at (855) 859-2056 (International: 404-537-3406). The conference ID number is #34094014.
About Booz Allen Hamilton
Booz Allen Hamilton is a leading provider of management consulting, technology, and engineering services to the U.S. government in defense, intelligence, and civil markets, and to major corporations, institutions, and not-for-profit organizations. Booz Allen is headquartered in McLean, Virginia, employs more than 24,000 people, and had revenue of $5.76 billion for the 12 months ended March 31, 2013.
CONTACT: 
Media Relations - Marie Lerch 703-902-5559; James Fisher 703-377-7595
Investor Relations - Curt Riggle 703-377-5332.

Non-GAAP Financial Information
“Adjusted Operating Income” represents Operating Income before (i) certain stock option-based and other equity-based compensation expenses, (ii) adjustments related to the amortization of intangible assets, and (iii) any extraordinary, unusual, or non-recurring items. Booz Allen prepares Adjusted Operating Income to eliminate the impact of items it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.
“Adjusted EBITDA” represents net income before income taxes, net interest and other expense and depreciation and amortization and before certain other items, including: (i) certain stock option-based and other equity-based compensation expenses, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, and (iii) any extraordinary, unusual or non-recurring items. Booz Allen prepares Adjusted EBITDA to eliminate the impact of items it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.
“Adjusted Net Income” represents net income before: (i) certain stock option-based and other equity-based compensation expenses, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, (iii) adjustments related to the amortization of intangible assets, (iv) amortization or write-off of debt issuance costs and write-off of original issue discount and (v) any extraordinary, unusual or non-recurring items, in each case net of the tax effect calculated using an assumed effective tax rate. Booz Allen prepares Adjusted Net Income to eliminate the impact of items, net of taxes, it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature.
“Adjusted Diluted EPS” represents diluted EPS calculated using Adjusted Net Income as opposed to Net Income. Additionally, Adjusted Diluted EPS does not contemplate any adjustments to net income as required under the two-class method of calculating EPS as required in accordance with GAAP.
“Free Cash Flow” represents the net cash generated from operating activities less the impact of purchases of property and equipment.





Booz Allen utilizes and discusses in this release Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS because management uses these measures for business planning purposes, including managing its business against internal projected results of operations and measuring its performance. Management views Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS as measures of the core operating business, which exclude the impact of the items detailed in the supplemental exhibits, as these items are generally not operational in nature. These supplemental performance measures also provide another basis for comparing period to period results by excluding potential differences caused by non-operational and unusual or non-recurring items. Booz Allen also utilizes and discusses Free Cash Flow in this release because management uses this measure for business planning purposes, measuring the cash generating ability of the operating business and measuring liquidity generally. Booz Allen presents these supplemental measures because it believes that these measures provide investors and securities analysts with important supplemental information with which to evaluate Booz Allen's performance, long term earnings potential, or liquidity, as applicable, and to enable them to assess Booz Allen's performance on the same basis as management. These supplemental performance measurements may vary from and may not be comparable to similarly titled measures by other companies in Booz Allen's industry. Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow are not recognized measurements under GAAP and when analyzing Booz Allen's performance or liquidity, as applicable, investors should (i) evaluate each adjustment in our reconciliation of Operating and Net Income to Adjusted Operating Income, Adjusted EBITDA and Adjusted Net Income, and cash flows to Free Cash Flows and the explanatory footnotes regarding those adjustments, (ii) use Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS in addition to, and not as an alternative to Operating Income, Net Income or Diluted EPS as measures of operating results, each as defined under GAAP, and (iii) use Free Cash Flows, in addition to, and not as an alternative to, Net Cash Provided by Operating Activities as a measure of liquidity, each as defined under GAAP. Exhibit 4 includes a reconciliation of Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow to the most directly comparable financial measure calculated and presented in accordance with GAAP.
No reconciliation of the forecasted range for Adjusted Diluted EPS to Diluted EPS for fiscal 2013 is included in this release because we are unable to quantify certain amounts that would be required to be included in the GAAP measure without unreasonable efforts and we believe such reconciliations would imply a degree of precision that would be confusing or misleading to investors.
Forward Looking Statements
Certain statements contained in this press release and in related comments by our management include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include information concerning Booz Allen's preliminary financial results, financial outlook and guidance, including forecasted revenue, Diluted EPS, and Adjusted Diluted EPS, future quarterly dividends, and future improvements in operating margins, as well as any other statement that does not directly relate to any historical or current fact. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “forecasts,” “expects,” “intends,” “plans,” “anticipates,” “projects,” “outlook,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “preliminary,” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct.
These forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
These risks and other factors include: cost cutting and efficiency initiatives, budget reductions, Congressionally-mandated automatic spending cuts, and other efforts to reduce U.S. government spending, including automatic sequestration required by the Budget Control Act of 2011 (as amended by the American Taxpayer Relief Act of 2012), which could reduce or delay funding for orders for services especially in the current political environment; delayed funding of our contracts due to delays in the completion of the U.S. government's budgeting process and the use of continuing resolutions by the U.S. government to fund its operations or related changes in the pattern or timing of government funding and spending (including potential cuts associated with sequestration or other budgetary cuts made in lieu of sequestration); current uncertainty around the timing, extent, and nature of Congressional and other U.S. government action to address budgetary constraints, the U.S. government's ability to incur indebtedness in excess of its current limit and the U.S. deficit; any issue that compromises our relationships with the U.S. government or damages our professional reputation; changes in U.S. government spending including a continuation of efforts by the





U.S. government to decrease spending for management support service contracts, and mission priorities that shift expenditures away from agencies or programs that we support; the size of our addressable markets and the amount of U.S. government spending on private contractors; failure to comply with numerous laws and regulations; our ability to compete effectively in the competitive bidding process and delays caused by competitors' protests of major contract awards received by us; the loss of General Services Administration Multiple Award Schedule Contracts, or GSA schedules, or our position as prime contractor on Government-wide acquisition contract vehicles; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; our ability to generate revenue under certain of our contracts; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in estimates used in recognizing revenue; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; an inability to hire, assimilate and deploy enough employees to serve our clients under existing contracts; an inability to timely and effectively utilize our employees; failure by us or our employees to obtain and maintain necessary security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; increased competition from other companies in our industry; failure to maintain strong relationships with other contractors; inherent uncertainties and potential adverse developments in legal or regulatory proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements, withheld payments, penalties or other unfavorable outcomes including debarment, as well as disputes over the availability of insurance or indemnification; internal system or service failures and security breaches, including, but not limited to, those resulting from external cyber attacks on our network and internal systems; risks related to changes to our operating structure, capabilities, or strategy intended to address client needs, grow our business or respond to market developments; risks associated with new relationships, clients, capabilities, and service offerings in our U.S. and international businesses; failure to comply with special U.S. government laws and regulations relating to our international operations; risks related to our indebtedness and credit facilities which contain financial and operating covenants; the adoption by the U.S. government of new laws, rules and regulations, such as those relating to organizational conflicts of interest issues; our ability to realize the expected benefits from our acquisition of the DSES division of ARINC Incorporated; risks related to future acquisitions; an inability to utilize existing or future tax benefits, including those related to stock-based compensation expense, for any reason, including a change in law; and variable purchasing patterns under U.S. government GSA schedules, blanket purchase agreements and Indefinite Delivery/Indefinite Quantity contracts. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K, filed with the SEC on May 30, 2012.
All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.



























Exhibits:  
Exhibit 1:             Consolidated Statements of Operations
Exhibit 2:             Consolidated Balance Sheets
Exhibit 3:             Consolidated Statements of Cash Flows
Exhibit 4:             Non-GAAP Financial Information
Exhibit 5:             Operating Data







Exhibit 1
Booz Allen Hamilton Holding Corporation
Consolidated Statements of Operations
 
 
 
Three Months Ended
March 31,
 
Fiscal Year Ended
March 31,
(Amounts in thousands, except per share data)
 
2013
 
2012
 
2013
 
2012
 
 
(Unaudited)
 

Revenue
 
$
1,545,290

 
$
1,540,620

 
$
5,758,059

 
$
5,859,218

Operating costs and expenses:
 
 
 
 
 
 
 
 
Cost of revenue
 
748,884

 
761,928

 
2,871,240

 
2,934,378

Billable expenses
 
418,166

 
399,181

 
1,532,590

 
1,542,822

General and administrative expenses
 
245,601

 
247,113

 
833,986

 
903,721

Depreciation and amortization
 
19,766

 
19,281

 
74,009

 
75,205

Restructuring charge
 

 
15,660

 

 
15,660

Total operating costs and expenses
 
1,432,417

 
1,443,163

 
5,311,825

 
5,471,786

Operating income
 
112,873

 
97,457

 
446,234

 
387,432

Interest expense
 
(19,496
)
 
(11,555
)
 
(70,284
)
 
(48,078
)
Other, net
 
53

 
673

 
(7,639
)
 
4,520

Income before income taxes
 
93,430

 
86,575

 
368,311

 
343,874

Income tax expense
 
38,617

 
35,948

 
149,253

 
103,919

Net income
 
$
54,813

 
$
50,627

 
$
219,058

 
$
239,955

Earnings per common share:
 
 
 
 
 
 
 
 
Basic
 
$
0.40

 
$
0.38

 
$
1.56

 
$
1.83

Diluted
 
$
0.37

 
$
0.36

 
$
1.45

 
$
1.70

 
 
 
 
 
 
 
 
 
Dividends declared per share
 
$
0.09

 
$
0.09

 
$
8.36

 
$
0.09






Exhibit 2
Booz Allen Hamilton Holding Corporation
Consolidated Balance Sheets
 
 
 
March 31,
 
March 31,
(Amounts in thousands, except share and per share data)
 
2013
 
2012
 
 

 
 
ASSETS
 
 
 
 
Current assets:
 
 
 
 
Cash and cash equivalents
 
$
350,384

 
$
484,368

Accounts receivable, net of allowance
 
1,029,586

 
1,077,315

Prepaid expenses
 
29,129

 
32,090

Income taxes receivable
 
5,689

 
46,794

Other current assets
 
9,564

 
13,090

Total current assets
 
1,424,352

 
1,653,657

Property and equipment, net of accumulated depreciation
 
166,570

 
191,079

Deferred income taxes
 
10,032

 
7,790

Intangible assets, net of accumulated amortization
 
236,220

 
223,834

Goodwill
 
1,277,369

 
1,188,004

Other long-term assets
 
62,985

 
50,427

Total assets
 
$
3,177,528

 
$
3,314,791

LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Current liabilities:
 
 
 
 
Current portion of long-term debt
 
$
55,562

 
$
42,500

Accounts payable and other accrued expenses
 
451,065

 
443,951

Accrued compensation and benefits
 
385,433

 
357,872

Deferred income taxes
 
10,286

 
59,493

Other current liabilities
 
62,300

 
10,630

Total current liabilities
 
964,646

 
914,446

Long-term debt, net of current portion
 
1,659,611

 
922,925

Income tax reserve
 
57,018

 
55,282

Other long-term liabilities
 
269,460

 
236,953

Total liabilities
 
2,950,735

 
2,129,606

Stockholders’ equity:
 
 
 
 
Common stock, Class A — $0.01 par value — authorized, 600,000,000 shares; issued, 136,457,444 shares at March 31, 2013 and 128,726,324 shares at March 31, 2012; outstanding, 136,051,601 shares at March 31, 2013 and 128,392,549 shares at March 31, 2012
 
1,364

 
1,287

Non-voting common stock, Class B — $0.01 par value — authorized, 16,000,000 shares; issued and outstanding, 1,451,600 shares at March 31, 2013 and 2,487,125 shares at March 31, 2012
 
15

 
25

Restricted common stock, Class C — $0.01 par value — authorized, 5,000,000 shares; issued and outstanding, 1,224,319 shares at March 31, 2013 and 1,533,020 shares at March 31, 2012
 
12

 
15

Special voting common stock, Class E — $0.003 par value — authorized, 25,000,000 shares; issued and outstanding, 7,478,522 shares at March 31, 2013 and 10,140,067 shares at March 31, 2012
 
22

 
30

Treasury stock, at cost — 405,843 shares at March 31, 2013 and 333,775 shares at March 31, 2012
 
(6,444
)
 
(5,377
)
Additional paid-in capital
 
120,836

 
898,541

Retained earnings
 
124,775

 
299,379

Accumulated other comprehensive loss
 
(13,787
)
 
(8,715
)
Total stockholders’ equity
 
226,793

 
1,185,185

Total liabilities and stockholders’ equity
 
$
3,177,528

 
$
3,314,791






Exhibit 3

Booz Allen Hamilton Holding Corporation Consolidated Statements of Cash Flows
 
 
 Fiscal Year Ended
March 31,
(Amounts in thousands)
 
2013
 
2012
 
 

Cash flows from operating activities
 
 
 
 
Net income
 
$
219,058

 
$
239,955

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
Depreciation and amortization
 
74,009

 
75,205

Stock-based compensation expense
 
24,841

 
31,263

Deferred income taxes
 
(48,088
)
 
74,785

Excess tax benefits from the exercise of stock options
 
(26,860
)
 
(16,461
)
Amortization of debt issuance costs and loss on extinguishment
 
17,224

 
5,880

Loss on disposition of property and equipment
 
1,106

 
376

Gain on sales of businesses
 
(254
)
 
(4,082
)
Changes in assets and liabilities:
 
 
 
 
Accounts receivable
 
125,125

 
25,275

Income taxes receivable / payable
 
104,877

 
(31,832
)
Prepaid expenses
 
3,038

 
1,407

Other current assets
 
6,968

 
6,215

Other long-term assets
 
2,723

 
(6,250
)
Accrued compensation and benefits
 
(26,832
)
 
(35,287
)
Accounts payable and other accrued expenses
 
(23,760
)
 
35,390

Accrued interest
 
(3,563
)
 
(11,801
)
Income tax reserves
 
1,736

 
(35,192
)
Other current liabilities
 
11,367

 
(2,373
)
Other long-term liabilities
 
1,939

 
7,573

Net cash provided by operating activities
 
464,654

 
360,046

Cash flows from investing activities
 
 
 
 
Purchases of property and equipment
 
(33,113
)
 
(76,925
)
Cash paid for business acquisitions, net of cash acquired
 
(157,964
)
 

Proceeds from sales of businesses
 
625

 
23,332

Net cash used in investing activities
 
(190,452
)
 
(53,593
)
Cash flows from financing activities
 
 
 
 
Net proceeds from issuance of common stock
 
6,373

 
8,757

Stock option exercises
 
14,977

 
7,349

Excess tax benefits from the exercise of stock options
 
26,860

 
16,461

Repurchases of common stock
 
(1,067
)
 
(5,377
)
Cash dividends paid
 
(1,122,457
)
 
(11,906
)
Dividend equivalents paid to option holders
 
(49,765
)
 

Repayment of debt
 
(993,250
)
 
(30,000
)
Net proceeds from debt issuance
 
1,710,143

 

Net cash used in financing activities
 
(408,186
)
 
(14,716
)
Net (decrease) increase in cash and cash equivalents
 
(133,984
)
 
291,737

Cash and cash equivalents — beginning of year
 
484,368

 
192,631

Cash and cash equivalents — end of year
 
$
350,384

 
$
484,368

Supplemental disclosures of cash flow information
 
 
 
 
Cash paid during the period for:
 
 
 
 
Interest
 
$
58,847

 
$
53,993

Income taxes
 
$
90,146

 
$
89,314






Exhibit 4
Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
 
 
 
Three Months Ended March 31,
 
Fiscal Year Ended March 31,
(Amounts in thousands, except share and per share data)
 
2013
 
2012
 
2013
 
2012
 
 
(Unaudited)
 
(Unaudited)
Adjusted Operating Income
 
 
 
 
 
 
 
 
Operating Income
 
$
112,873

 
$
97,457

 
$
446,234

 
$
387,432

Certain stock-based compensation expense (a)
 
924

 
2,652

 
5,868

 
14,241

Amortization of intangible assets (b) 
 
3,126

 
4,091

 
12,510

 
16,364

Net restructuring charge (c)
 

 
11,182

 

 
11,182

Transaction expenses (d)
 

 

 
2,725



Adjusted Operating Income
 
$
116,923

 
$
115,382

 
$
467,337

 
$
429,219

EBITDA & Adjusted EBITDA
 
 
 
 
 
 
 
 
Net income
 
$
54,813

 
$
50,627

 
$
219,058

 
$
239,955

Income tax expense
 
38,617

 
35,948

 
149,253

 
103,919

Interest and other, net
 
19,443

 
10,882

 
77,923

 
43,558

Depreciation and amortization
 
19,766

 
19,281

 
74,009

 
75,205

EBITDA
 
132,639

 
116,738

 
520,243

 
462,637

Certain stock-based compensation expense (a)
 
924

 
2,652

 
5,868

 
14,241

Net restructuring charge (c)
 

 
11,182

 

 
11,182

Transaction expenses (d)
 

 

 
2,725

 

Adjusted EBITDA
 
$
133,563

 
$
130,572

 
$
528,836

 
$
488,060

Adjusted Net Income
 
 
 
 
 
 
 
 
Net income
 
$
54,813

 
$
50,627

 
$
219,058

 
$
239,955

Certain stock-based compensation expense (a)
 
924

 
2,652

 
5,868

 
14,241

Net restructuring charge (c)
 

 
11,182

 

 
11,182

Transaction expenses (d)
 

 

 
2,725

 

Amortization of intangible assets (b)
 
3,126

 
4,091

 
12,510

 
16,364

Amortization or write-off of debt issuance costs and write-off of original issue discount
 
1,525

 
1,181

 
13,018

 
4,783

Net gain on sale of state and local transportation business (e)
 

 

 

 
(5,681
)
Release of income tax reserves (f)
 

 
111

 

 
(35,022
)
Adjustments for tax effect (g)
 
(2,230
)
 
(7,643
)
 
(13,649
)
 
(18,628
)
Adjusted Net Income
 
$
58,158

 
$
62,201

 
$
239,530

 
$
227,194

Adjusted Diluted Earnings Per Share
 
 
 
 
 
 
 
 
Weighted-average number of diluted shares outstanding
 
146,144,633

 
141,716,480

 
144,854,724

 
140,812,012

Adjusted Net Income Per Diluted Share (h)
 
$
0.40

 
$
0.44

 
$
1.65

 
$
1.61

Free Cash Flow
 
 
 
 
 
 
 
 
Net cash provided by operating activities
 
$
65,720

 
$
108,027

 
$
464,654

 
$
360,046

Less: Purchases of property and equipment
 
(12,456
)
 
(11,367
)
 
(33,113
)
 
(76,925
)
Free Cash Flow
 
$
53,264

 
$
96,660

 
$
431,541

 
$
283,121


(a)
Reflects stock-based compensation expense for options for Class A Common Stock and restricted shares, in each case, issued in connection with the Acquisition of our Company by The Carlyle Group (the Acquisition) under the Officers' Rollover Stock Plan. Also reflects stock-based compensation expense for Equity Incentive Plan Class A Common Stock options issued in connection with the Acquisition under the Equity Incentive Plan.
(b)
Reflects amortization of intangible assets resulting from the Acquisition.
(c)
Reflects restructuring charges of approximately $15.7 million incurred during the three months ended March 31, 2012, net of approximately $4.5 million of revenue recognized on recoverable expenses, associated with the cost of a restructuring plan to reduce certain personnel and infrastructure costs.
(d)
Reflects debt refinancing costs incurred in connection with the Recapitalization Transaction consummated on July 31, 2012.
(e)
Fiscal 2012 reflects the gain on sale of our state and local transportation business, net of the associated tax benefit of $1.6 million.
(f)
Reflects the release of income tax reserves.
(g)
Reflects tax effect of adjustments at an assumed marginal tax rate of 40%.
(h)
Excludes an adjustment of approximately $457,000 and $9.1 million of net earnings for the three and twelve months ended March 31, 2013, respectively, associated with the application of the two-class method for computing diluted earnings per share.





Exhibit 5
Booz Allen Hamilton Holding Corporation
Operating Data
 
 
 
As of
March 31,
(Amounts in millions)
 
2013
 
2012
Backlog (1)
 
 
 
 
Funded
 
$
2,509

 
$
2,898

Unfunded (2)
 
3,056

 
2,681

Priced Options (3)
 
6,265

 
5,225

Total Backlog
 
$
11,830

 
$
10,804

 
(1)
Backlog presented in the above table includes backlog acquired from the Company’s acquisition of ARINC’s Defense Systems Engineering and Support (DSES) division on November 30, 2012. Total backlog acquired from DSES is approximately $1.4 billion as of March 31, 2013.
(2)
Reflects a reduction by management to the revenue value of orders for services under two existing single award ID/IQ contracts the Company has had for several years, based on an established pattern of funding under these contracts by the U.S. government.
(3)
Amounts shown reflect 100% of the undiscounted revenue value of all priced options.
 
 
As of
March 31,
 
 
2013
 
2012
Book-to-Bill *
 
0.3
 
0.1
*
Book-to-bill is calculated as the change in total backlog during the relevant fiscal quarter plus the relevant fiscal quarter revenue, all divided by the relevant fiscal quarter revenue.
 
 
As of
March 31,
 
 
2013
 
2012
Headcount
 
 
 
 
Total Headcount
 
24,455
 
24,950
Consulting Staff Headcount
 
21,996
 
22,447
 
 
 
Three Months Ended
March 31,
 
Fiscal Year Ended
March 31,
 
 
2013
 
2012
 
2013
 
2012
Percentage of Total Revenue by Contract Type
 
 
 
 
 
 
 
 
Cost-Reimbursable (4)
 
59%
 
55%
 
57%
 
54%
Time-and-Materials
 
27%
 
31%
 
28%
 
31%
Fixed-Price (5)
 
14%
 
14%
 
15%
 
15%
 
(4)
Includes both cost-plus-fixed-fee and cost-plus-award fee contracts.
(5)
Includes fixed-price level of effort contracts.
 
 
Three Months Ended
March 31,
2013
 
Three Months Ended
March 31,
2012
Days Sales Outstanding **
 
61
 
65
 
**
Calculated as total accounts receivable divided by revenue per day during the relevant fiscal quarter.


Booz Allen Hamilton Fourth Quarter Fiscal 2013 May 22, 2013


 
Curt Riggle Director, Investor Relations Introduction Today’s Agenda Ralph Shrader Chairman, Chief Executive Officer and President Management Overview Sam Strickland Executive Vice President and Chief Financial Officer Financial Overview Questions and Answers 1 Horacio Rozanski Executive Vice President and Chief Operating Officer Strategic Overview


 
Disclaimers Forward Looking Safe Harbor Statement The following information includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include information concerning Booz Allen’s preliminary financial results, financial outlook and guidance, including projected Revenue, Diluted EPS, and Adjusted Diluted EPS, as well as any other statement that does not directly relate to any historical or current fact. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “forecasts,” “expects,” “intends,” “plans,” “anticipates,” “projects,” “outlook,” “believes,” “estimates,” “predicts,” “potential,” “continue,” “preliminary,” or the negative of these terms or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we can give you no assurance these expectations will prove to have been correct. These forward-looking statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. These risks and other factors include: cost cutting and efficiency initiatives, budget reductions, Congressionally-mandated automatic spending cuts, and other efforts to reduce U.S. government spending, including automatic sequestration required by the Budget Control Act of 2011 (as amended by the American Taxpayer Relief Act of 2012), which could reduce or delay funding for orders for services especially in the current political environment; delayed funding of our contracts due to delays in the completion of the U.S. government’s budgeting process and the use of continuing resolutions by the U.S. government to fund its operations or related changes in the pattern or timing of government funding and spending (including potential cuts associated with sequestration or other budgetary cuts made in lieu of sequestration); current uncertainty around the timing, extent, and nature of Congressional and other U.S. government action to address budgetary constraints, the U.S. government’s ability to incur indebtedness in excess of its current limit and the U.S. deficit; any issue that compromises our relationships with the U.S. government or damages our professional reputation; changes in U.S. government spending including a continuation of efforts by the U.S. government to decrease spending for management support service contracts, and mission priorities that shift expenditures away from agencies or programs that we support; the size of our addressable markets and the amount of U.S. government spending on private contractors; failure to comply with numerous laws and regulations; our ability to compete effectively in the competitive bidding process and delays caused by competitors’ protests of major contract awards received by us; the loss of General Services Administration Multiple Award Schedule Contracts, or GSA schedules, or our position as prime contractor on Government-wide acquisition contract vehicles; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts; our ability to generate revenue under certain of our contracts; our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in estimates used in recognizing revenue; any inability to attract, train or retain employees with the requisite skills, experience and security clearances; an inability to hire, assimilate and deploy enough employees to serve our clients under existing contracts; an inability to timely and effectively utilize our employees; failure by us or our employees to obtain and maintain necessary security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors; increased competition from other companies in our industry; failure to maintain strong relationships with other contractors; inherent uncertainties and potential adverse developments in legal or regulatory proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements, withheld payments, penalties or other unfavorable outcomes including debarment, as well as disputes over the availability of insurance or indemnification; internal system or service failures and security breaches, including, but not limited to, those resulting from external cyber attacks on our network and internal systems; risks related to changes to our operating structure, capabilities, or strategy intended to address client needs, grow our business or respond to market developments; risks associated with new relationships, clients, capabilities, and service offerings in our U.S. and international businesses; failure to comply with special U.S. government laws and regulations relating to our international operations; risks related to our indebtedness and credit facilities which contain financial and operating covenants; the adoption by the U.S. government of new laws, rules and regulations, such as those relating to organizational conflicts of interest issues; our ability to realize the expected benefits from our acquisition of the DSES division of ARINC Incorporated; risks related to future acquisitions; an inability to utilize existing or future tax benefits, including those related to stock-based compensation expense, for any reason, including a change in law; and variable purchasing patterns under U.S. government GSA schedules, blanket purchase agreements and Indefinite Delivery/Indefinite Quantity contracts. Additional information concerning these and other factors can be found in our filings with the Securities and Exchange Commission (SEC), including our Annual Report on Form 10-K, filed with the SEC on May 30, 2012. All forward-looking statements attributable to Booz Allen or persons acting on Booz Allen’s behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date made and, except as required by law, Booz Allen undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Note Regarding Non-GAAP Financial Data Information Booz Allen discloses in the following information Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow which are not recognized measurements under GAAP, and when analyzing Booz Allen’s performance or liquidity as applicable, investors should (i) evaluate each adjustment in our reconciliation of Operating and Net Income to Adjusted Operating Income, Adjusted EBITDA and Adjusted Net Income, and cash flow to free cash flow, and the explanatory footnotes regarding those adjustments, and (ii) use Adjusted EBITDA, Adjusted Net Income, Adjusted Operating Income, and Adjusted Diluted EPS in addition to, and not as an alternative to operating income, net income or Diluted EPS as a measure of operating results with cash flow in addition to and not as an alternative to net cash generated from operating activities as a measure of liquidity, each as defined under GAAP. The Financial Appendix includes a reconciliation of Adjusted Operating Income, Adjusted EBITDA, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow to the most directly comparable financial measure calculated and presented in accordance with GAAP. Booz Allen presents these supplemental performance measures because it believes that these measures provide investors and securities analysts with important supplemental information with which to evaluate Booz Allen’s performance, long term earnings potential, or liquidity, as applicable and to enable them to assess Booz Allen’s performance on the same basis as management. These supplemental performance and liquidity measurements may vary from and may not be comparable to similarly titled measures by other companies in Booz Allen’s industry. 2


 
Fiscal 2013 Business Highlights ► Proactively addressed structural change in the industry ► Continued growth in margins, operating income, and adjusted earnings ► $8.36 per share in dividend payments to stockholders during fiscal 2013 ► Free Cash Flow of $431.5 million in fiscal 2013 ► Building engineering capabilities organically and via acquisitions ► Investing in capabilities for clients today and for growth in the future ► Ongoing commitment to client service and our communities 3


 
Fiscal 2013 Financial Highlights ► Restructuring has ongoing benefit to financial performance ► Continuing to take action today to position for long term strength – Managing staffing capacity much more closely against client demand – Reducing infrastructure spending – More carefully managing compensation ► Tightly managed business is able to adapt quickly to changes in the market ► Full year fiscal 2013 Revenue: $5.76 billion ($100.1 million inorganic) ► Q4 fiscal 2013 Revenue: $1.55 billion ($78.2 million inorganic) 4


 
Drivers Impacting Fiscal Year 2013 Gross Revenue 5 Sale of State & Local Transportation Business (Closed July 2011) (0.30%) DSES Acquisition (Closed November 30 2012) 1.73% Change in Billable Expenses (1.26%) Reduction in Average Headcount (2.28%) Migration to Client Sites (Estimated) (0.68%) Increased Productivity 0.72% Other 0.34% Total Change in FY13 Gross Revenue (1.73%) Revenue Impacts Full Fiscal Year 2013 Compared to Full Fiscal Year 2012


 
Key Financial Highlights Preliminary Full Year Fiscal 2013 Results Comparisons are to prior fiscal year period 6 Revenue $5.76 billion Down 1.7% Adjusted Net Income $239.5 million Up 5.4% Net Income $219.1 million Down 8.7% Adjusted EBITDA $528.8 million Up 8.4% Adjusted Diluted EPS $1.65/share Up from $1.61/share Diluted EPS $1.45/share Down from $1.70/share


 
Key Financial Highlights Preliminary Fourth Quarter Fiscal 2013 Results Comparisons are to prior fiscal year period 7 Revenue $1.55 billion Up 0.8% Adjusted Net Income $58.2 million Down 6.5% Net Income $54.8 million Up 8.3% Adjusted EBITDA $133.6 million Up 2.3% Adjusted Diluted EPS $0.40/share Down from $0.44/share Diluted EPS $0.37/share Up from $0.36/share Total Backlog $11.83 billion Up 9.5%


 
Vision 2020 Market Analysis ► Conducted research and analysis on how our core markets may change over time ► Maximize results for clients by leveraging: – Our premier consulting franchise – Our deep client relationships – An increased focus on engineering and technology 8 Objective Look at Internal Business ► Considered service offerings, operating model, cost structure, pricing and people model ► Launched operating model enhancements – Maintains collaborative culture with single P&L and single bonus pool – Supports commitment to entrepreneurship and delivering new and unique solutions – Enables operational authority which is important in a slower growing market Launched the Strategic Innovation Group to drive strategic consulting, emerging technologies and advanced engineering solutions across our markets


 
Outlook Fiscal 2014 Outlook Revenue growth forecast: Low Single Digit Decline for the Full Fiscal 2014 Diluted EPS forecast (1): $1.47 - $1.57 Adjusted Diluted EPS forecast (1): $1.55 - $1.65 9 (1) Full Fiscal Year 2014 Estimated Weighted Average Diluted Share Count: 149.0 million


 
Financial Appendix 10


 
Booz Allen Hamilton Holding Corporation Non-GAAP Financial Information ► “Adjusted Operating Income” represents Operating Income before (i) certain stock option-based and other equity- based compensation expenses, (ii) adjustments related to the amortization of intangible assets, and (iii) any extraordinary, unusual, or non-recurring items. Booz Allen prepares Adjusted Operating Income to eliminate the impact of items it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature. ► “Adjusted EBITDA” represents net income before income taxes, net interest and other expense and depreciation and amortization and before certain other items, including: (i) certain stock option-based and other equity-based compensation expenses, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, and (iii) any extraordinary, unusual or non-recurring items. Booz Allen prepares Adjusted EBITDA to eliminate the impact of items it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature. ► “Adjusted Net Income” represents net income before: (i) certain stock option-based and other equity-based compensation expenses, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, (iii) adjustments related to the amortization of intangible assets, (iv) amortization or write-off of debt issuance costs and write-off of original issue discount and (v) any extraordinary, unusual or non-recurring items, in each case net of the tax effect calculated using an assumed effective tax rate. Booz Allen prepares Adjusted Net Income to eliminate the impact of items, net of taxes, it does not consider indicative of ongoing operating performance due to their inherent unusual, extraordinary or non-recurring nature or because they result from an event of a similar nature. ► “Adjusted Diluted EPS” represents Diluted EPS calculated using Adjusted Net Income as opposed to Net Income. Additionally, Adjusted Diluted EPS does not contemplate any adjustments to Net Income as required under the two-class method of calculating EPS as required in accordance with GAAP. ► “Free Cash Flow” represents the net cash generated from operating activities less the impact of purchases of property and equipment. 11


 
Booz Allen Hamilton Holding Corporation Non-GAAP Financial Information 12 (Unaudited and in thousands, except share and per share data) Three Months Ended March 31, Fiscal Year Ended March 31, 2013 2012 2013 2012 Adjusted Operating Income Operating Income $112,873 $97,457 $446,234 $387,432 Certain stock-based compensation expense (a) 924 2,652 5,868 14,241 Amortization of intangible assets (b) 3,126 4,091 12,510 16,364 Net restructuring charge (c) - 11,182 - 11,182 Transaction expenses (d) - - 2,725 - Adjusted Operating Income $116,923 $115,382 $467,337 $429,219 EBITDA & Adjusted EBITDA Net income $54,813 $50,627 $219,058 $239,955 Income tax expense 38,617 35,948 149,253 103,919 Interest and other, net 19,443 10,882 77,923 43,558 Depreciation and amortization 19,766 19,281 74,009 75,205 EBITDA 132,639 116,738 520,243 462,637 Certain stock-based compensation expense (a) 924 2,652 5,868 14,241 Net restructuring charge (c) - 11,182 - 11,182 Transaction expenses (d) - - 2,725 - Adjusted EBITDA $133,563 $130,572 $528,836 $488,060 Adjusted Net Income Net income $54,813 $50,627 $219,058 $239,955 Certain stock-based compensation expense (a) 924 2,652 5,868 14,241 Net restructuring charge (c) - 11,182 - 11,182 Transaction expenses (d) - - 2,725 - Amortization of intangible assets (b) 3,126 4,091 12,510 16,364 Amortization or write-off of debt issuance costs and write-off of original issue discount 1,525 1,181 13,018 4,783 Net gain on sale of state and local transportation business (e) - - - (5,681) Release of income tax reserves (f) - 111 - (35,022) Adjustments for tax effect (g) (2,230) (7,643) (13,649) (18,628) Adjusted Net Income $58,158 $62,201 $239,530 $227,194 Adjusted Diluted Earnings Per Share Weighted-average number of diluted shares outstanding 146,144,633 141,716,480 144,854,724 140,812,012 Adjusted Net Income per diluted share (h) $0.40 $0.44 $1.65 $1.61 Free Cash Flow Net cash provided by operating activities $65,720 $108,027 $464,654 $360,046 Less: Purchases of property and equipment (12,456) (11,367) (33,113) (76,925) Free Cash Flow $53,264 $96,660 $431,541 $283,121 (a) Reflects stock-based compensation expense for options for Class A Common Stock and restricted shares, in each case, issued in connection with the Acquisition of our Company by The Carlyle Group (the Acquisition) under the Officers' Rollover Stock Plan. Also reflects stock-based compensation expense for Equity Incentive Plan Class A Common Stock options issued in connection with the Acquisition under the Equity Incentive Plan. (b) Reflects amortization of intangible assets resulting from the Acquisition. (c) Reflects restructuring charges of approximately $15.7 million incurred during the three months ended March 31, 2012, net of approximately $4.5 million of revenue recognized on recoverable expenses, associated with the cost of a cost restructuring plan to reduce certain personnel and infrastructure costs. (d) Reflects debt refinancing costs incurred in connection with the Recapitalization Transaction consummated on July 31, 2012. (e) Fiscal 2012 reflects the gain on sale of our state and local transportation business, net of the associated tax benefit of $1.6 million. (f) Reflects the release of income tax reserves. (g) Reflects tax effect of adjustments at an assumed marginal tax rate of 40%. (h) Excludes an adjustment of approximately $457,000 and $9.1 million of net earnings for the three and twelve months ended March 31, 2013, respectively, associated with the application of the two-class method for computing diluted earnings per share.