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, 2017
___________________________________
Booz Allen Hamilton Holding Corporation
(Exact name of Registrant as specified in its charter)
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Delaware | 001-34972 | 26-2634160 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
8283 Greensboro Drive, McLean, Virginia | 22102 | |||
(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:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | 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, 2017, Booz Allen Hamilton Holding Corporation (the “Company”) issued a press release announcing its results of operations for the fiscal year and quarter ended March 31, 2017. A copy of the press release is attached hereto as Exhibit 99.1.
On May 22, 2017, the Company posted to the “Investor Relations” section of its website the presentation that accompanies the earnings conference call. A copy of the presentation is attached hereto as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
Exhibit No. | Description | |
99.1 | Press Release dated May 22, 2017 | |
99.2 | Earnings Conference Call Presentation | |
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/ Lloyd W. Howell, Jr. |
Lloyd W. Howell, Jr. | |
Executive Vice President, Chief Financial Officer and Treasurer | |
Date: May 22, 2017
INDEX TO EXHIBITS
Exhibit No. | Description | |
99.1 | Press Release dated May 22, 2017 | |
99.2 | Earnings Conference Call Presentation | |
Exhibit 99.1
BOOZ ALLEN HAMILTON ANNOUNCES
FOURTH QUARTER AND FULL-YEAR FISCAL 2017 RESULTS
Milestone Year of Accelerated Growth
Full-Year Revenue Increased by 7.4 percent to $5.80 billion
Full-Year Diluted Earnings per Share of $1.67 and Adjusted Diluted Earnings per Share1 of $1.75
Headcount Increase of nearly 720 year-over-year
Quarterly Dividend of $0.17 per share, Payable on June 30, 2017
McLean, Virginia; May 22, 2017 - Booz Allen Hamilton Holding Corporation (NYSE:BAH), the parent company of management and technology consulting and engineering services firm Booz Allen Hamilton Inc., today announced preliminary results for the fourth quarter and full year of fiscal 2017.
For the full year, the Company reported an increase in revenue of 7.4 percent as compared to fiscal 2016, and solid bottom line earnings. Headcount increased by nearly 720 over the prior year, which includes the employees from the January acquisition of Aquilent. Solid awards in fiscal 2017 resulted in a total backlog increase of 15 percent over the prior year and generated an annual book-to-bill ratio of 1.31. The fourth quarter book-to-bill ratio was 1.04, the highest ratio for a fourth quarter since the firm became public in 2010.
“The great fiscal year 2017 results we report today demonstrate success that has been built by the people of Booz Allen over the past several years,” said Horacio Rozanski, President and Chief Executive Officer. “We are transforming our business to bring clients advanced, integrated solutions that address their most pressing needs. We are proud of our position as the government services industry’s organic revenue growth leader and our long record of success in delivering value to investors.”
The Company declared a regular quarterly dividend of $0.17 per share, which is payable on June 30, 2017, to stockholders of record on June 10, 2017.
Financial Summary
Full Year Fiscal 2017 - A summary of Booz Allen’s results for the full year fiscal 2017 is below. All comparisons are to the prior year, and a description of key drivers can be found in the Company’s Earnings Call Presentation for the Fiscal Year 2017 posted on investors.boozallen.com.
• | Revenue: $5.80 billion, an increase of 7.4 percent. |
• | Revenue, Excluding Billable Expenses:1 $4.05 billion, an increase of 4.1 percent. |
• | Operating Income: $484.2 million, an increase of 8.9 percent; and Adjusted Operating Income:1 $491.8 million, an increase of 9.6 percent. |
• | Net Income: $252.5 million, a decrease of 14.2 percent; and Adjusted Net Income:1 $262.4 million, an increase of 6.5 percent. |
• | Adjusted EBITDA1: $547.1 million, an increase of 8.1 percent. |
• | Diluted EPS: $1.67, decreased from $1.94; and Adjusted Diluted EPS1: $1.75, increased from $1.65. |
As of March 31, 2017, total backlog was $13.6 billion, compared to $11.8 billion as of March 31, 2016, an increase of 15 percent. All components of backlog grew compared to the prior year. Net cash provided by operating activities for fiscal 2017 was $382.3 million, compared with $249.2 million in the prior year. Free cash flow1 for fiscal 2017 was $328.4 million, compared with $182.6 million in the prior year.
Fourth Quarter Ended March 31, 2017 - A summary of Booz Allen’s results for the fourth quarter of fiscal 2017 is below. All comparisons are to the prior year period, and a description of key drivers can be found in the Company’s Earnings Call Presentation for the Fiscal Year 2017 posted on investors.boozallen.com.
.
• | Revenue: $1.58 billion, an increase of 11.1 percent. |
• | Revenue, Excluding Billable Expenses:1 $1.10 billion, an increase of 9.2 percent. |
• | Operating Income: $129.2 million, an increase of 23.6 percent; and Adjusted Operating Income:1 $130.2 million, an increase of 23.4 percent. |
• | Net Income: $66.3 million, an increase of 1.1 percent; and Adjusted Net Income1: $67.3 million, an increase of 9.8 percent. |
• | Adjusted EBITDA:1 $145.1 million, compared with $119.4 million. |
• | Diluted EPS and Adjusted Diluted EPS1: $0.44 and $0.45, respectively, compared to $0.43 and $0.41, respectively. |
1 Revenue, Excluding Billable Expenses, Adjusted Operating Income, Adjusted Net Income, Adjusted EBITDA, Adjusted Diluted EPS, and Free Cash Flow are non-GAAP financial measures. See “Non-GAAP Financial Information” below for additional detail.
Financial Outlook
For our fiscal 2018, we are providing the following guidance:
• | Revenue: Growth in the 4 to 7 Percent Range |
• | Diluted EPS: $1.76 - $1.86 |
• | Adjusted Diluted EPS: $1.79 - $1.89 |
1) | These EPS estimates are based on fiscal 2018 estimated average diluted shares outstanding of approximately 149.5 million shares, and assumes an effective tax rate in the range of 39 percent to 40 percent. |
Conference Call Information
Booz Allen will host a conference call at 8:00 a.m. EDT on Monday, May 22, 2017, to discuss the financial results for its fourth quarter and full year fiscal 2017 (ended March 31, 2017). 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 11:00 a.m. EDT on May 22, 2017, and continuing for 30 days.
About Booz Allen Hamilton
Booz Allen Hamilton (NYSE: BAH) has been at the forefront of strategy and technology for more than one hundred years. Today, the firm provides management and technology consulting and engineering services to leading Fortune 500 corporations, governments, and not-for-profits across the globe. Booz Allen partners with public and private sector clients to solve their most difficult challenges through a combination of consulting, analytics, mission operations, technology, systems delivery, cybersecurity, engineering, and innovation expertise.
With international headquarters in McLean, Virginia, the firm employs 23,300 people globally, and had revenue of $5.80 billion for the 12 months ended March 31, 2017. To learn more, visit www.boozallen.com.
CONTACT:
Media Relations - James Fisher 703-377-7595;
Investor Relations - Curt Riggle 703-377-5332.
BAHPR-FI
Non-GAAP Financial Information
"Revenue, Excluding Billable Expenses" represents revenue less billable expenses. Booz Allen uses Revenue, Excluding Billable Expenses because it provides management useful information about the company's operating performance by excluding the impact of costs that are not indicative of the level of productivity of its consulting staff headcount and its overall direct labor, which management believes provides useful information to its investors about its core operations.
“Adjusted Operating Income” represents Operating Income before: (i) adjustments related to the amortization of intangible assets resulting from the acquisition of our Company by The Carlyle Group, and (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments. 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 transaction costs, fees, losses, and expenses, including fees associated with debt prepayments. “Adjusted EBITDA Margin” is calculated as Adjusted EBITDA divided by
revenue. Booz Allen prepares Adjusted EBITDA and Adjusted EBITDA Margin 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) adjustments related to the amortization of intangible assets resulting from the acquisition of our Company by The Carlyle Group,, (ii) transaction costs, fees, losses, and expenses, including fees associated with debt prepayments, (iii) amortization or write-off of debt issuance costs and write-off of original issue discount, and (iv) release of income tax reserves, in each case net of the tax effect where appropriate 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 Revenue, Excluding Billable Expenses, Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, 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 EBITDA Margin, 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. Management also utilizes Revenue, Excluding Billable Expenses because it provides management useful information about the company's operating performance by excluding the impact of costs that are not indicative of the level of productivity of its consulting staff headcount and its overall direct labor, which management believes provides useful information to its investors about its core operations. 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. Revenue, Excluding Billable Expenses, Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, 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 revenue to Revenue Excluding Billable Expenses, operating income to Adjusted Operating Income, net income to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted Earnings per Share, and net cash provided by operating activities to Free Cash Flow, and the explanatory footnotes regarding those adjustments, each as defined under GAAP, (ii) use Revenue Excluding Billable Expenses, Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted EPS in addition to, and not as an alternative to revenue, operating income, net income or diluted EPS as a measures of operating results, each as defined under GAAP, and (iii) use Free Cash Flow, 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 Revenue, Excluding Billable Expenses, Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, Adjusted Diluted EPS, and Free Cash Flow to the most directly comparable financial measure calculated and presented in accordance with GAAP.
With respect to our expectations under “Financial Outlook” above, a reconciliation of Adjusted Diluted EPS guidance to the closest corresponding GAAP measure is not available without unreasonable efforts on a forward-looking basis due to our inability to predict our stock price, equity grants and dividend declarations during the course of fiscal 2018. Projecting future stock price, equity grants and dividends to be declared would be necessary to accurately calculate the difference between Adjusted Diluted EPS and GAAP EPS as a result of the effects of the two-class method and related possible dilution used in the calculation of EPS. Consequently, any attempt to disclose such reconciliation would imply a degree of precision that could be confusing or misleading to investors. We expect the variability of the above charges to have an unpredictable, and potentially significant, impact on our future GAAP financial results.
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, the Bipartisan Budget Act of 2013 and the Bipartisan Budget Act of 2015), which have reduced and delayed contract awards and funding for orders for services especially in the current political environment or otherwise negatively affect our ability to generate revenue under contract awards, including as a result of reduced staffing and hours of operation at U.S. government clients; delayed funding of our contracts due to uncertainty relating to and a possible failure of Congressional efforts to approve funding of the U.S. government and to craft a long-term agreement on the U.S. government’s ability to incur indebtedness in excess of its current limits, or changes in the pattern or timing of government funding and spending (including those resulting from or related to cuts associated with sequestration or other budgetary cuts made in lieu of sequestration); current and continued uncertainty around the timing, extent, nature, and effect of ongoing Congressional and other U.S. government action to address budgetary constraints, including, but not limited to, uncertainty around the outcome of Congressional efforts to craft a long-term agreement on the U.S. government’s ability to incur indebtedness in excess of its current limits, and the U.S. deficit; any issue that compromises our relationships with the U.S. government or damages our professional reputation, including negative publicity concerning government contractors in general or us in particular; 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 or losses of contract awards caused by competitors' protests of major contract awards received by us; the loss of General Services Administration Multiple Award schedule contracts, or GSA schedules, or our position as prime contractor on government-wide acquisition contract vehicles, or GWACs; changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time, and resources for our contracts; our ability to generate revenue under certain of our contracts; our ability to realize the full value of and replenish our backlog and the timing of our receipt of revenue under contracts included in backlog; changes in estimates used in recognizing revenue; an inability to attract, train, or retain employees with the requisite skills, experience, and security clearances; an inability to hire, assimilate, and deploy enough employees to serve our clients under existing contracts; an inability to timely and effectively utilize our employees; failure by us or our employees to obtain and maintain necessary security clearances; the loss of members of senior management or failure to develop new leaders; misconduct or other improper activities from our employees or subcontractors, including the improper use or release of our clients' sensitive or classified information; increased insourcing by various U.S. government agencies due to changes in the definition of “inherently governmental” work, including proposals to limit contractor access to sensitive or classified information and work assignments; increased competition from other companies in our industry; failure to maintain strong relationships with other contractors or the failure of contractors with which we have entered into a sub- or prime-contractor relationship to meet their obligations to us or our clients; 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; continued efforts to change how the U.S. government reimburses compensation related and other expenses or otherwise limit such reimbursements, including recent rules that expand the scope of existing reimbursement limitations, such as a
reduction in allowable annual employee compensation to certain contractors as a result of the Bipartisan Budget Act of 2013, and an increased risk of compensation being deemed unallowable or payments being withheld as a result of U.S. government audit, review or investigation; 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 or limits; risks related to completed and future acquisitions, including our ability to realize the expected benefits from such acquisitions; an inability to utilize existing or future tax benefits, including those related to our stock-based compensation expense, for any reason, including a change in law; 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 19, 2016.
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.
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) | 2017 | 2016 | 2017 | 2016 | ||||||||||||
(Unaudited) | ||||||||||||||||
Revenue | $ | 1,582,071 | $ | 1,424,317 | $ | 5,804,284 | $ | 5,405,738 | ||||||||
Operating costs and expenses: | ||||||||||||||||
Cost of revenue | 724,724 | 680,650 | 2,691,982 | 2,580,026 | ||||||||||||
Billable expenses | 480,136 | 415,342 | 1,751,077 | 1,513,083 | ||||||||||||
General and administrative expenses | 232,094 | 208,898 | 817,434 | 806,509 | ||||||||||||
Depreciation and amortization | 15,956 | 14,919 | 59,544 | 61,536 | ||||||||||||
Total operating costs and expenses | 1,452,910 | 1,319,809 | 5,320,037 | 4,961,154 | ||||||||||||
Operating income | 129,161 | 104,508 | 484,247 | 444,584 | ||||||||||||
Interest expense | (15,541 | ) | (17,878 | ) | (62,298 | ) | (70,815 | ) | ||||||||
Other income (expense), net | (5,446 | ) | 5,384 | (10,049 | ) | 5,693 | ||||||||||
Income before income taxes | 108,174 | 92,014 | 411,900 | 379,462 | ||||||||||||
Income tax expense | 41,921 | 26,497 | 159,410 | 85,368 | ||||||||||||
Net income | $ | 66,253 | $ | 65,517 | $ | 252,490 | $ | 294,094 | ||||||||
Earnings per common share: | ||||||||||||||||
Basic | $ | 0.44 | $ | 0.44 | $ | 1.69 | $ | 1.98 | ||||||||
Diluted | $ | 0.44 | $ | 0.43 | $ | 1.67 | $ | 1.94 | ||||||||
Exhibit 2
Booz Allen Hamilton Holding Corporation
Consolidated Balance Sheets
(Amounts in thousands, except share and per share data) | March 31, 2017 | March 31, 2016 | |||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 217,417 | $ | 187,529 | |||
Accounts receivable, net of allowance | 991,810 | 892,289 | |||||
Prepaid expenses and other current assets | 85,253 | 109,953 | |||||
Total current assets | 1,294,480 | 1,189,771 | |||||
Property and equipment, net of accumulated depreciation | 139,167 | 130,169 | |||||
Deferred income taxes | 10,825 | 22,054 | |||||
Intangible assets, net of accumulated amortization | 271,880 | 220,658 | |||||
Goodwill | 1,571,190 | 1,361,913 | |||||
Other long-term assets | 85,563 | 85,606 | |||||
Total assets | $ | 3,373,105 | $ | 3,010,171 | |||
Liabilities and stockholders' equity | |||||||
Current liabilities: | |||||||
Current portion of long-term debt | $ | 193,150 | $ | 112,813 | |||
Accounts payable and other accrued expenses | 504,117 | 484,769 | |||||
Accrued compensation and benefits | 263,816 | 241,367 | |||||
Other current liabilities | 140,318 | 100,964 | |||||
Total current liabilities | 1,101,401 | 939,913 | |||||
Long-term debt, net of current portion | 1,470,174 | 1,484,448 | |||||
Income tax reserves | 11,647 | 1,517 | |||||
Other long-term liabilities | 216,292 | 175,805 | |||||
Total liabilities | 2,799,514 | 2,601,683 | |||||
Stockholders’ equity: | |||||||
Common stock, Class A — $0.01 par value — authorized, 600,000,000 shares; issued, 155,901,485 shares at March 31, 2017 and 153,391,058 shares at March 31, 2016; outstanding, 148,887,708 shares at March 31, 2017 and 147,992,462 shares at March 31, 2016 | 1,559 | 1,534 | |||||
Treasury stock, at cost — 7,013,777 shares at March 31, 2017 and 5,398,596 shares at March 31, 2016 | (191,900 | ) | (135,445 | ) | |||
Additional paid-in capital | 302,907 | 243,475 | |||||
Retained earnings | 478,102 | 318,537 | |||||
Accumulated other comprehensive loss | (17,077 | ) | (19,613 | ) | |||
Total stockholders’ equity | 573,591 | 408,488 | |||||
Total liabilities and stockholders’ equity | $ | 3,373,105 | $ | 3,010,171 | |||
Exhibit 3
Booz Allen Hamilton Holding Corporation
Consolidated Statements of Cash Flows
Fiscal Year Ended March 31, | |||||||
(Amounts in thousands) | 2017 | 2016 | |||||
Cash flows from operating activities | |||||||
Net income | $ | 252,490 | $ | 294,094 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation and amortization | 59,544 | 61,536 | |||||
Stock-based compensation expense | 21,249 | 24,992 | |||||
Deferred income taxes | 15,536 | 3,549 | |||||
Excess tax benefits from stock-based compensation | (18,175 | ) | (31,924 | ) | |||
Amortization of debt issuance costs and loss on extinguishment | 15,566 | 8,359 | |||||
Losses on dispositions and impairments | 4,673 | 547 | |||||
Changes in assets and liabilities: | |||||||
Accounts receivable | (87,154 | ) | (31,229 | ) | |||
Income taxes receivable / payable | 54,564 | (4,170 | ) | ||||
Prepaid expenses and other current assets | (115 | ) | 24,873 | ||||
Other long-term assets | (10,146 | ) | (49,060 | ) | |||
Accrued compensation and benefits | 21,535 | (8,409 | ) | ||||
Accounts payable and other accrued expenses | 14,846 | 4,911 | |||||
Accrued interest | (806 | ) | (2,829 | ) | |||
Income tax reserves | (91 | ) | (56,927 | ) | |||
Other current liabilities | 13,256 | 66,031 | |||||
Other long-term liabilities | 25,505 | (55,110 | ) | ||||
Net cash provided by operating activities | 382,277 | 249,234 | |||||
Cash flows from investing activities | |||||||
Purchases of property and equipment | (53,919 | ) | (66,635 | ) | |||
Payments for business acquisitions, net of cash acquired | (247,627 | ) | (51,118 | ) | |||
Insurance proceeds received for damage to equipment | 650 | — | |||||
Net cash used in investing activities | (300,896 | ) | (117,753 | ) | |||
Cash flows from financing activities | |||||||
Proceeds from issuance of common stock | 6,314 | 5,977 | |||||
Stock option exercises | 14,687 | 7,962 | |||||
Excess tax benefits from stock-based compensation | 18,175 | 31,924 | |||||
Repurchases of common stock | (46,548 | ) | (63,152 | ) | |||
Cash dividends paid | (92,925 | ) | (80,015 | ) | |||
Dividend equivalents paid to option holders | (2,254 | ) | (31,802 | ) | |||
Repayment of debt | (968,325 | ) | (295,063 | ) | |||
Proceeds from debt issuance | 1,019,383 | 273,000 | |||||
Net cash used in financing activities | (51,493 | ) | (151,169 | ) | |||
Net increase (decrease) in cash and cash equivalents | 29,888 | (19,688 | ) | ||||
Cash and cash equivalents — beginning of year | 187,529 | 207,217 | |||||
Cash and cash equivalents — end of year | $ | 217,417 | $ | 187,529 | |||
Supplemental disclosures of cash flow information | |||||||
Cash paid during the period for: | |||||||
Interest | $ | 49,062 | $ | 57,068 | |||
Income taxes | $ | 89,556 | $ | 143,083 | |||
Supplemental disclosures of non-cash investing and financing activities | |||||||
Share repurchases transacted but not settled and paid | $ | 9,907 | $ | — | |||
Contingent consideration arising from businesses acquired | $ | 3,576 | $ | — | |||
Exhibit 4
Booz Allen Hamilton Holding Corporation
Non-GAAP Financial Information
Three Months Ended March 31, | Fiscal Year Ended March 31, | ||||||||||||||
(In thousands, except share and per share data) | 2017 | 2016 | 2017 | 2016 | |||||||||||
(Unaudited) | (Unaudited) | ||||||||||||||
Revenue, Excluding Billable Expenses | |||||||||||||||
Revenue | $ | 1,582,071 | $ | 1,424,317 | $ | 5,804,284 | $ | 5,405,738 | |||||||
Billable expenses | 480,136 | 415,342 | 1,751,077 | 1,513,083 | |||||||||||
Revenue, Excluding Billable Expenses | $ | 1,101,935 | $ | 1,008,975 | $ | 4,053,207 | $ | 3,892,655 | |||||||
Adjusted Operating Income | |||||||||||||||
Operating Income | $ | 129,161 | $ | 104,508 | $ | 484,247 | $ | 444,584 | |||||||
Amortization of intangible assets (a) | 1,056 | 1,057 | 4,225 | 4,225 | |||||||||||
Transaction expenses (b) | — | — | 3,354 | — | |||||||||||
Adjusted Operating Income | $ | 130,217 | $ | 105,565 | $ | 491,826 | $ | 448,809 | |||||||
EBITDA, Adjusted EBITDA & Adjusted EBITDA Margin | |||||||||||||||
Net income | $ | 66,253 | $ | 65,517 | $ | 252,490 | $ | 294,094 | |||||||
Income tax expense | 41,921 | 26,497 | 159,410 | 85,368 | |||||||||||
Interest and other, net (c) | 20,987 | 12,494 | 72,347 | 65,122 | |||||||||||
Depreciation and amortization | 15,956 | 14,919 | 59,544 | 61,536 | |||||||||||
EBITDA | 145,117 | 119,427 | 543,791 | 506,120 | |||||||||||
Transaction expenses (b) | — | — | 3,354 | — | |||||||||||
Adjusted EBITDA | $ | 145,117 | $ | 119,427 | $ | 547,145 | $ | 506,120 | |||||||
Revenue | $ | 1,582,071 | $ | 1,424,317 | $ | 5,804,284 | $ | 5,405,738 | |||||||
Adjusted EBITDA Margin | 9.2 | % | 8.4 | % | 9.4 | % | 9.4 | % | |||||||
Adjusted Net Income | |||||||||||||||
Net income | $ | 66,253 | $ | 65,517 | $ | 252,490 | $ | 294,094 | |||||||
Amortization of intangible assets (a) | 1,056 | 1,057 | 4,225 | 4,225 | |||||||||||
Transaction expenses (b) | — | — | 3,354 | — | |||||||||||
Release of income tax reserves (d) | — | (5,634 | ) | — | (53,301 | ) | |||||||||
Amortization or write-off of debt issuance costs and write-off of original issue discount | 630 | 1,291 | 8,866 | 5,201 | |||||||||||
Adjustments for tax effect (e) | (674 | ) | (939 | ) | (6,578 | ) | (3,770 | ) | |||||||
Adjusted Net Income | $ | 67,265 | $ | 61,292 | $ | 262,357 | $ | 246,449 | |||||||
Adjusted Diluted Earnings Per Share | |||||||||||||||
Weighted-average number of diluted shares outstanding | 150,661,457 | 149,559,119 | 150,274,640 | 149,719,137 | |||||||||||
Adjusted Net Income Per Diluted Share (f) | $ | 0.45 | $ | 0.41 | $ | 1.75 | $ | 1.65 | |||||||
Free Cash Flow | |||||||||||||||
Net cash provided by operating activities | $ | 99,235 | $ | 68,237 | $ | 382,277 | $ | 249,234 | |||||||
Less: Purchases of property and equipment | (23,365 | ) | (20,806 | ) | (53,919 | ) | (66,635 | ) | |||||||
Free Cash Flow | $ | 75,870 | $ | 47,431 | $ | 328,358 | $ | 182,599 | |||||||
(a) | Reflects amortization of intangible assets resulting from the acquisition of our Company by The Carlyle Group. |
(b) | Reflects debt refinancing costs incurred in connection with the refinancing transaction consummated on July 13, 2016. |
(c) | Reflects the combination of Interest expense and Other income (expense), net from the consolidated income statement. |
(d) | Release of pre-acquisition income tax reserves assumed by the Company in connection with the acquisition of our Company by The Carlyle Group. |
(e) | Reflects tax effect of adjustments at an assumed marginal tax rate of 40%. |
(f) | Excludes an adjustment of approximately $0.6 million and $2.3 million of net earnings for the three and twelve months ended March 31, 2017, respectively, and excludes an adjustment of approximately $0.8 million and $3.5 million of net earnings for the three and twelve months ended March 31, 2016, 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) | 2017 | 2016 | |||||
Backlog | |||||||
Funded | $ | 2,815 | $ | 2,673 | |||
Unfunded | 3,098 | 2,546 | |||||
Priced Options | 7,679 | 6,595 | |||||
Total Backlog | $ | 13,592 | $ | 11,814 | |||
Three Months Ended March 31, | |||
2017 | 2016 | ||
Book-to-Bill * | 1.04 | 0.82 | |
* | 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, | |||
2017 | 2016 | ||
Headcount | |||
Total Headcount | 23,300 | 22,583 | |
Consulting Staff Headcount | 21,032 | 20,329 | |
Three Months Ended March 31, | Fiscal Year Ended March 31, | ||||||
2017 | 2016 | 2017 | 2016 | ||||
Percentage of Total Revenue by Contract Type | |||||||
Cost-Reimbursable (1) | 51% | 50% | 50% | 51% | |||
Time-and-Materials | 24% | 26% | 26% | 26% | |||
Fixed-Price (2) | 25% | 24% | 24% | 23% | |||
(1) | Includes both cost-plus-fixed-fee and cost-plus-award fee contracts. |
(2) | Includes fixed-price level of effort contracts. |
Three Months Ended March 31, | |||
2017 | 2016 | ||
Days Sales Outstanding ** | 60 | 60 | |
** | Calculated as total accounts receivable divided by revenue per day during the relevant fiscal quarter. |
Fiscal Year 2017, Full Year and Fourth Quarter
MAY 22, 2017
EARNINGS CALL
PRESENTATION
HORACIO ROZANSKI
PRESIDENT AND CHIEF EXECUTIVE OFFICER
LLOYD HOWELL
CHIEF FINANCIAL OFFICER AND TREASURER
CURT RIGGLE
VICE PRESIDENT INVESTOR RELATIONS
1
CALL
PARTICIPANTS
DISCLAIMER
2
Forward Looking Safe Harbor Statement
Certain statements contained in this presentation 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. A number of important factors could cause actual results to differ materially from those contained in or
implied by these forward-looking statements, including those factors discussed in our filings with the Securities and Exchange Commission (SEC), including our Annual
Report on Form 10-K for the fiscal year ended March 31, 2017, which can be found at the SEC’s website at www.sec.gov. 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.
Note Regarding Non-GAAP Financial Data Information
Booz Allen discloses in the following information Revenue, Excluding Billable Expenses, Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, 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 (i) evaluate each adjustment in our reconciliation of revenue to Revenue Excluding Billable Expenses, operating income to Adjusted Operating
Income, net income to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income and Adjusted Diluted Earnings Per Share, and net cash provided by operating
activities to Free Cash Flow, and the explanatory footnotes regarding those adjustments, each as defined under GAAP, (ii) use Revenue, Excluding Billable Expenses,
Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Net Income, and Adjusted Diluted EPS in addition to, and not as an alternative to
revenue, operating income, net income or diluted EPS as measures of operating results, and (iii) use Free Cash Flow 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. The Financial Appendix includes a reconciliation of Revenue, Excluding Billable
Expenses, Adjusted Operating Income, Adjusted EBITDA, Adjusted EBITDA Margin, 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. With
respect to our expectations under “Fiscal 2018 Full Year Outlook” on slide 7, reconciliation of Adjusted Diluted EPS guidance to the closest corresponding GAAP measure
is not available without unreasonable efforts on a forward-looking basis due to our inability to predict our stock price, equity grants and dividend declarations during the
course of fiscal 2018. Projecting future stock price, equity grants and dividends to be declared would be necessary to accurately calculate the difference between
Adjusted Diluted EPS and GAAP EPS as a result of the effects of the two-class method and related possible dilution used in the calculation of EPS. Consequently, any
attempt to disclose such reconciliation would imply a degree of precision that could be confusing or misleading to investors. We expect the variability of the above
charges to have an unpredictable, and potentially significant, impact on our future GAAP financial results.
CREATING VALUE FROM ACCELERATING GROWTH
3
Doing Work at the
Center of Clients’
Missions
Allows us to
Identify and Invest
in High Demand
Capabilities
Positions Us to
Win Additional
Work and Attract
the Right Talent
Results in High-
Quality Work for
Clients and Strong
Financial
Performance
A VIRTUOUS CYCLE GENERATES
SHAREHOLDER VALUE
FISCAL YEAR 2017 RESULTS DEMONSTRATE
SUCCESS THAT HAS BEEN BUILT BRICK-BY-
BRICK
• LONG-TERM STRATEGY FOR GROWTH
designed and operationalized over the last
several years
• Bolstering our position as the INDUSTRY’S
ORGANIC GROWTH LEADER (1)
(1) Industry consists of CACI, CSRA, Engility Holdings, Leidos, Mantech, and Science Applications International Corp.
THREE KEYS TO STRONG FY17 RESULTS
OPERATIONAL EXCELLENCE
• Quality delivery to clients
• Hiring and retaining talent
• Executing against backlog
• Spending discipline
• Capturing opportunities
IMPLEMENTATION OF VISION 2020 STRATEGY
• Scaling capabilities – analytics, digital solutions, cyber, engineering
• Integrating with consulting expertise and mission knowledge
STRENGTHENING OUR CULTURE
• Rearticulating Booz Allen’s purpose and values
4
KEY FINANCIAL RESULTS
FISCAL YEAR 2017 PRELIMINARY RESULTS
Comparisons are to prior fiscal year period
5
Y E A R T O D AT E F O U R T H Q U A R T E R
Revenue $5.8 billion 7.4% Increase $1.6 billion 11.1% Increase
Revenue, Excluding
Billable Expenses
$4.1 billion 4.1% Increase $1.1 billion 9.2% Increase
Net Income $252.5 million 14.2% Decrease $66.3 million 1.1% Increase
Adjusted Net Income $262.4 million 6.5% Increase $67.3 million 9.8% Increase
Adjusted EBITDA $547.1 million 8.1% Increase $145.1 million 21.5% Increase
Diluted EPS $1.67 13.9% Decrease $0.44 2.3% Increase
Adjusted Diluted EPS $1.75 6.1% Increase $0.45 9.8% Increase
Total Backlog
$13.6 billion
15.1% Increase
CAPITAL STRUCTURE AND DEPLOYMENT
WE ARE COMMITTED TO CREATING NEAR - AND LONG-TERM VALUE FOR INVESTORS
THROUGH REVENUE GROWTH, OPERATIONAL EXCELLENCE AND EFFECTIVE CAP ITAL
DEPLOYMENT
• Fiscal Year 2017 Deployment
- Aquilent (1) $250M
- Repurchase of 1.6M shares (2) $56.5M ($255M remaining authorization)
- Dividends $93M
• Recent Debt Actions
- Term Loan B repricing reduced interest rate spread by 50 bps
- Forward SWAPs fix LIBOR at 1.998% on an aggregate of $300M of outstanding debt under credit
agreement (effective date: 4/30/18; maturity date: 6/30/21)
- $350M Bond offering at 5.125% due in 2025
- Approximately 35% of debt is now at fixed rates
• Capital Generation and Deployment
- Strong Cash Generation
- EBITDA growth generates incremental borrowing capacity
- Target of deploying at least 100% of Free Cash Flow for acquisitions and/or to be returned to
shareholders in the form of share repurchases and dividends
6
(1) Represents the cash purchase price paid in connection with our acquisition of eGov Holdings Inc. (d/b/a Aquilent) in January 2017.
(2) Includes 0.3M withhold-to-cover shares
FINANCIAL OUTLOOK
1) Full Fiscal Year 2018 Estimated Weighted Average Diluted Share Count of 149.5 million shares, which excludes the impact of any
potential FY18 share repurchase activities
2) Assumes an effective tax rate in the range of 39% to 40%
7
F I S C A L 2 0 1 8 F U L L Y E A R O U T L O O K
Revenue
Growth in the Range of
Four to Seven Percent
Diluted EPS (1)(2) $1.76 - $1.86
Adjusted Diluted EPS (1)(2) $1.79 - $1.89
APPENDIX
8
NON-GAAP FINANCIAL INFORMATION
• “Revenue, Excluding Billable Expenses" represents revenue less billable expenses. We use Revenue, Excluding Billable Expenses
because it provides management useful information about the company's operating performance by excluding the impact of costs that
are not indicative of the level of productivity of our consulting staff headcount and our overall direct labor, which management
believes provides useful information to our investors about our core operations.
• "Adjusted Operating Income" represents operating income before: (i) adjustments related to the amortization of intangible assets
resulting from the acquisition of our Company by the Carlyle Group, and (ii) transaction costs, fees, losses, and expenses, including fees
associated with debt prepayments. We prepare Adjusted Operating Income to eliminate the impact of items we do not consider
indicative of ongoing operating performance due to their inherent unusual, extraordinary, or non-recurring nature or because they
result from an event of a similar nature.
• "Adjusted EBITDA” represents net income before income taxes, net interest and other expense and depreciation and amortization and
before certain other items, including transaction costs, fees, losses, and expenses, including fees associated with debt prepayments.
“Adjusted EBITDA Margin” is calculated as Adjusted EBITDA divided by revenue. Booz Allen prepares Adjusted EBITDA and Adjusted
EBITDA Margin 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) adjustments related to the amortization of intangible assets resulting from
the acquisition of our Company by the Carlyle Group, (ii) transaction costs, fees, losses, and expenses, including fees associated with
debt prepayments, (iii) amortization or write-off of debt issuance costs and write-off of original issue discount, and (iv) release of
income tax reserves, in each case net of the tax effect where appropriate calculated using an assumed effective tax rate. We prepare
Adjusted Net Income to eliminate the impact of items, net of tax, we do not consider indicative of ongoing operating performance due
to their inherent unusual, extraordinary, or non-recurring nature or because they result from an event of a similar nature.
• "Adjusted Diluted EPS" represents diluted EPS calculated using Adjusted Net Income as opposed to net income. Additionally, Adjusted
Diluted EPS does not contemplate any adjustments to net income as required under the two-class method as disclosed in the
footnotes to the financial statements.
• "Free Cash Flow" represents the net cash generated from operating activities less the impact of purchases of property and equipment.
9
NON-GAAP FINANCIAL INFORMATION
10
(a) Reflects amortization of intangible assets resulting
from the acquisition of our Company by The Carlyle
Group.
(b) Reflects debt refinancing costs incurred in
connection with the refinancing transaction
consummated on July 13, 2016.
(c) Reflects the combination of Interest Expense and
Other income (expense), net from the consolidated
income statement.
(d) Release of pre-acquisition income tax reserves
assumed by the Company in connection with the
acquisition of our Company by The Carlyle Group.
(e) Reflects tax effect of adjustments at an assumed
marginal tax rate of 40%.
(f) Excludes an adjustment of approximately $0.6
million and $2.3 million of net earnings for the three
and twelve months March 31, 2017, respectively, and
excludes an adjustment of approximately $0.8 million
and $3.5 million of net earnings for the three and
twelve months ended March 31, 2016, respectively,
associated with the application of the two-class
method for computing diluted earnings per share.
(Amounts in thousands, except share and per share data) 2017 2016 2017 2016
Revenue, Excluding Billable Expenses
Revenue 1,582,071$ 1,424,317$ 5,804,284$ 5,405,738$
Billable expenses 480,136 415,342 1,751,077 1,513,083
Revenue, Excluding Billable Expenses 1,101,935$ 1,008,975$ 4,053,207$ 3,892,655$
Adjusted Operating Income
Operating Income 129,161$ 104,508$ 484,247$ 444,584$
Amortization of intangible assets (a) 1,056 1,057 4,225 4,225
Transaction expenses (b) — — 3,354 —
Adjusted Operating Income 130,217$ 105,565$ 491,826$ 448,809$
EBITDA, Adjusted EBITDA & Adjusted EBITDA Margin
Net income 66,253$ 65,517$ 252,490$ 294,094$
Income tax expense
41,921 26,497 159,410 85,368
Interest and other, net (c) 20,987 12,494 72,347 65,122
Depreciation and amortization 15,956 14,919 59,544 61,536
EBITDA 145,117 119,427 543,791 506,120
Transaction expenses (b) — — 3,354 —
Adjusted EBITDA 145,117$ 119,427$ 547,145$ 506,120$
Revenue 1,582,071 1,424,317 5,804,284 5,405,738
Adjusted EBITDA Margin 9.2 % 8.4 % 9.4 % 9.4 %
Adjusted Net Income
Net income 66,253$ 65,517$ 252,490$ 294,094$
Amortization of intangible assets (a) 1,056 1,057 4,225 4,225
Transaction expenses (b) — — 3,354 —
Release of income tax reserves (d) — (5,634) — (53,301)
Amortization or write-off of debt issuance costs and write-off of
original issue discount 630 1,291 8,866 5,201
Adjustments for tax effect (e) (674) (939) (6,578) (3,770)
Adjusted Net Income 67,265$ 61,292$ 262,357$ 246,449$
Adjusted Diluted Earnings Per Share
Weighted-average number of diluted shares outstanding 150,661,457 149,559,119 150,274,640 149,719,137
Adjusted Net Income Per Diluted Share (f) 0.45$ 0.41$ 1.75$ 1.65$
Free Cash Flow
Net cash provid d by perating activities 99,235$ 68,237$ 382,277$ 249,234$
Less: Purchases of pr p rty and equipment (23,365) (20,806) (53,919) (66,635)
Free Cash Flow 75,870$ 47,431$ 328,358$ 182,599$
(Unaudited) (Unaudited)
Three Months Ended
March 31,
Fiscal Year Ended
March 31,
FINANCIAL RESULTS – FULL YEAR 2017
Full Fiscal Year 2017 – Booz Allen’s fiscal year runs from April 1 to March 31. A summary of the key factors driving results for the fiscal year ended
March 31, 2017 as compared to the prior year, is below:
• Revenue increased by 7.4 percent to $5.80 billion. These results were driven primarily by stronger client demand, which led to increased staff
headcount and billability as well as increases in billable expenses.
• Revenue, Excluding Billable expenses, increased 4.1 percent to $4.05 billion as a result of increased client demand, which led to increased staff
headcount and productivity.
• Operating Income and Adjusted Operating Income increased by 8.9 percent and 9.6 percent, respectively, to $484.2 million and $491.8 million,
respectively, due primarily to the same factors driving revenue as well as positive results from improved contract profitability, and management's
focus on indirect spending reduction initiatives. The increases in Operating Income and Adjusted Operating Income were partially offset by a
reduction in the net decrease in the Company's provisions for the potential recovery of allowable expenses recorded as compared to fiscal 2016,
as well as an increase in certain non-recurring business transaction costs. Adjusted Operating Income also benefitted from the adjustment of
transaction costs associated with the July 2016 refinancing transaction.
• Net Income decreased 14.2 percent to $252.5 million. Adjusted Net Income increased 6.5 percent to $262.4 million. The decreases were primarily
driven by the same factors as Operating Income and Adjusted Operating Income, respectively. The decline in Net Income was also due the release
of certain income tax reserves in fiscal 2016.
• EBITDA increased 7.4 percent to $543.8 million and Adjusted EBITDA increased 8.1 percent to $547.1 million. The increases were due to the same
drivers as Operating Income and Adjusted Operating Income, respectively.
• Diluted EPS declined to $1.67 from $1.94 in fiscal 2016, and Adjusted Diluted EPS increased to $1.75 from $1.65. The increases in Diluted EPS and
Adjusted Diluted EPS were driven by the same factors as Operating Income and Adjusted Operating Income, respectively, partially offset by a
modestly higher share count in fiscal 2017.
• Net cash provided by operating activities in fiscal 2017 increased by 53.4 percent to $382.3 million and Free Cash Flow increased by 79.8 percent
to $328.4 million. The increase in cash flow generation was primarily the result of our overall revenue and profitability growth, with related strong
collections, and our ability to manage our working capital needs and indirect spending, as well as lower cash taxes paid during fiscal 2017.
• As of March 31, 2017, total backlog was $13.6 billion, an increase of 15.1 percent. Growth took place in all backlog categories as the result of
awards across all elements of our business. When combined with our high win rates on proposals, this demonstrates further proof that our
strategy is delivering results.
11
FINANCIAL RESULTS – FOURTH QUARTER 2017
Fourth Quarter 2017 – Below is a summary of Booz Allen’s results for the fiscal 2017 fourth quarter and the key factors driving those results as
compared to the fourth quarter of fiscal 2016:
• Revenue increased by 11.1 percent to $1.58 billion, primarily as the result of increased client demand, which led to increased staff headcount and
billability as well as an increase in billable expenses.
• Revenue, Excluding Billable Expenses increased by 9.2 percent to $1.1 billion as the result of increased client demand, which led to increased staff
headcount and productivity.
• Operating Income and Adjusted Operating Income increased by 23.6 percent and 23.4 percent, respectively, to $129.2 million and $130.2 million,
respectively, driven primarily by the same factors driving revenue as well as positive results from improved contract profitability and
management's focus on indirect spending reduction initiatives. The increases in Operating Income and Adjusted Operating Income were partially
offset by a reduction in the net decrease in the Company's provisions for the potential recovery of allowable expenses recorded as compared to
the prior year period, as well as an increase in certain non-recurring business transaction costs.
• Net Income increased 1.1 percent to $66.3 million. Adjusted Net Income increased 9.8 percent to $67.3 million. The increases in Net Income and
Adjusted Net Income were driven by the same factors as Operating Income and Adjusted Operating Income, respectively.
• EBITDA and Adjusted EBITDA both increased by 21.5 percent to $145.1 million. The increases were driven by the same factors as Operating
Income and Adjusted Operating Income, respectively.
• Diluted EPS increased to $0.44 from $0.43, and Adjusted Diluted EPS increased to $0.45 from $0.41. The increase in Diluted EPS and Adjusted
Diluted EPS was driven by the same factors as Net Income and Adjusted Net Income, respectively, partially offset by a modestly higher share count
in fiscal 2017.
12