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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________________ 
FORM 10-Q
 ___________________________________
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2020
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission File No. 001-34972
 ___________________________________
Booz Allen Hamilton Holding Corporation
(Exact name of registrant as specified in its charter)
 ___________________________________
Delaware 26-2634160
(State or other jurisdiction of
incorporation or organization)
 (I.R.S. Employer
Identification No.)
8283 Greensboro Drive,McLean,Virginia 22102
(Address of principal executive offices) (Zip Code)
(703) 902-5000
Registrant’s telephone number, including area code
(Former name, former address, and former fiscal year if changed since last report.)
___________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Class A Common StockBAHNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes      No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes      No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large Accelerated Filer  
  Accelerated Filer  
Non-Accelerated Filer    Smaller Reporting Company  
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes      No  



Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
 Shares Outstanding
as of October 27, 2020
Class A Common Stock137,900,150 



TABLE OF CONTENTS
 
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Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.    Financial Statements

INDEX TO THE UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Page


Table of Contents


BOOZ ALLEN HAMILTON HOLDING CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30,
2020
March 31,
2020
 (Unaudited) 
 (Amounts in thousands, except
share and per share data)
ASSETS
Current assets:
Cash and cash equivalents$1,275,190 $741,901 
Accounts receivable, net of allowance1,467,581 1,459,471 
Prepaid expenses and other current assets68,272 126,816 
Total current assets2,811,043 2,328,188 
Property and equipment, net of accumulated depreciation
201,784 208,077 
Operating lease right-of-use assets241,523 240,122 
Intangible assets, net of accumulated amortization303,769 300,987 
Goodwill1,581,160 1,581,160 
Other long-term assets145,619 135,432 
Total assets$5,284,898 $4,793,966 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$77,865 $177,865 
Accounts payable and other accrued expenses852,885 698,011 
Accrued compensation and benefits360,547 348,775 
Operating lease liabilities52,988 49,021 
Other current liabilities57,306 54,006 
Total current liabilities1,401,591 1,327,678 
Long-term debt, net of current portion2,315,739 2,007,979 
Operating lease liabilities, net of current portion266,236 270,266 
Other long-term liabilities329,375 331,687 
Total liabilities4,312,941 3,937,610 
Commitments and contingencies (Note 18)
Stockholders’ equity:
Common stock, Class A — $0.01 par value — authorized, 600,000,000 shares; issued, 162,079,334 shares at September 30, 2020 and 161,333,973 shares at March 31, 2020; outstanding, 138,024,601 shares at September 30, 2020 and 138,719,921 shares at March 31, 2020
1,621 1,613 
Treasury stock, at cost — 24,054,733 at September 30, 2020 and 22,614,052 shares at March 31, 2020
(1,003,650)(898,095)
Additional paid-in capital509,512 468,027 
Retained earnings1,508,206 1,330,812 
Accumulated other comprehensive loss(43,732)(46,001)
Total stockholders’ equity971,957 856,356 
Total liabilities and stockholders’ equity$5,284,898 $4,793,966 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 Three Months Ended
September 30,
Six Months Ended
September 30,
 2020201920202019
 (Amounts in thousands,
except per share data)
(Amounts in thousands,
except per share data)
Revenue$2,019,185 $1,819,577 $3,975,638 $3,644,753 
Operating costs and expenses:
Cost of revenue942,597 843,942 1,891,499 1,684,596 
Billable expenses603,652 539,846 1,152,729 1,091,021 
General and administrative expenses244,700 244,122 490,555 478,402 
Depreciation and amortization21,015 19,632 41,747 39,653 
Total operating costs and expenses1,811,964 1,647,542 3,576,530 3,293,672 
Operating income207,221 172,035 399,108 351,081 
Interest expense(19,787)(25,863)(40,022)(51,050)
Other (expense) income, net(12,034)2,005 (12,870)3,976 
Income before income taxes175,400 148,177 346,216 304,007 
Income tax expense39,319 33,852 80,806 72,296 
Net income$136,081 $114,325 $265,410 $231,711 
Earnings per common share (Note 4):
Basic$0.98 $0.81 $1.91 $1.64 
Diluted$0.98 $0.80 $1.90 $1.63 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
 Three Months Ended
September 30,
Six Months Ended
September 30,
 2020201920202019
 (Amounts in thousands)(Amounts in thousands)
Net income$136,081 $114,325 $265,410 $231,711 
Other comprehensive income (loss), net of tax:
Change in unrealized gain (loss) on derivatives designated as cash flow hedges3,664 (5,014)2,225 (19,979)
Change in postretirement plan costs22 16 44 50 
Total other comprehensive income (loss), net of tax3,686 (4,998)2,269 (19,929)
Comprehensive income$139,767 $109,327 $267,679 $211,782 

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 Six Months Ended
September 30,
 20202019
 (Amounts in thousands)
Cash flows from operating activities
Net income$265,410 $231,711 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization41,747 39,653 
Noncash lease expense26,891 27,711 
Stock-based compensation expense25,632 15,808 
Amortization of debt issuance costs 2,176 2,459 
Loss on debt extinguishment13,239  
Losses on dispositions25 581 
Changes in assets and liabilities:
Accounts receivable, net of allowance(8,606)9,253 
Deferred income taxes and income taxes receivable / payable51,846 (30,322)
Prepaid expenses and other current assets(10,279)(16,696)
Other long-term assets(3,664)(95)
Accrued compensation and benefits22,788 (28,805)
Accounts payable and other accrued expenses154,140 34,623 
Other current liabilities2,669 2,311 
Operating lease liabilities(28,355)(24,529)
Other long-term liabilities10,365 3,016 
Net cash provided by operating activities566,024 266,679 
Cash flows from investing activities
Purchases of property, equipment, and software(38,084)(59,978)
Net cash used in investing activities(38,084)(59,978)
Cash flows from financing activities
Proceeds from issuance of common stock9,092 7,049 
Stock option exercises6,492 3,687 
Repurchases of common stock(116,291)(14,658)
Cash dividends paid(86,836)(64,848)
Debt extinguishment costs(8,971) 
Repayment of debt(488,933)(38,962)
Proceeds from debt issuance691,496 400,000 
Other financing activities(700)(1,413)
Net cash provided by financing activities5,349 290,855 
Net increase in cash and cash equivalents533,289 497,556 
Cash and cash equivalents––beginning of period741,901 283,990 
Cash and cash equivalents––end of period$1,275,190 $781,546 
Supplemental disclosures of cash flow information
Net cash paid during the period for:
Interest$32,282 $44,965 
Income taxes$24,451 $102,151 
Supplemental disclosures of non-cash investing and financing activities
Noncash financing activities$178 $2,110 
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)
(Amounts in thousands, except
share data)
Class A
Common Stock
Treasury
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
SharesAmountSharesAmount
Balance at June 30, 2020161,856,727$1,618 (23,659,991)$(973,601)$486,739 $1,415,129 $(47,418)$882,467 
Issuance of common stock81,4822 — — 4,667 — — 4,669 
Stock options exercised141,1251 — — 3,366 — — 3,367 
Repurchase of common stock— — (394,742)(30,049) – — — (30,049)
Recognition of liability related to future restricted stock units vesting— — — — (59)— — (59)
Net income— — — — — 136,081 — 136,081 
Other comprehensive income (loss), net of tax— — — —  – — 3,686 3,686 
Dividends paid of $0.31 per share of common stock
— — — —  – (43,004)— (43,004)
Stock-based compensation expense— — — — 14,799 — — 14,799 
Balance at September 30, 2020162,079,334$1,621 (24,054,733)$(1,003,650)$509,512 $1,508,206 $(43,732)$971,957 
Balance at March 31, 2020161,333,973$1,613 (22,614,052)$(898,095)$468,027 $1,330,812 $(46,001)$856,356 
Topic 326 adoption impact— — — — — (1,180)— (1,180)
Issuance of common stock443,3385 — — 9,087 — — 9,092 
Stock options exercised302,0233 — — 6,489 — — 6,492 
Repurchase of common stock (1)— — (1,440,681)(105,555)— — — (105,555)
Recognition of liability related to future restricted stock units vesting— — — — 280 — — 280 
Net income— — — — — 265,410 — 265,410 
Other comprehensive income (loss), net of tax— — — — — — 2,269 2,269 
Dividends paid of $0.62 per share of common stock
— — — — — (86,836)— (86,836)
Stock-based compensation expense— — — — 25,629 — — 25,629 
Balance at September 30, 2020162,079,334$1,621 (24,054,733)$(1,003,650)$509,512 $1,508,206 $(43,732)$971,957 

(1) During the six months ended September 30, 2020, the Company purchased 1.3 million shares of the Company’s Class A Common Stock in a series of open market transactions for $96.4 million. Additionally, the Company repurchased shares during the six months ended September 30, 2020 to cover the minimum statutory withholding taxes on restricted stock units that vested on various dates during the period.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED) [CONTINUED]
(Amounts in thousands, except
share data)
Class A
Common Stock
Treasury
Stock
Additional
Paid-In
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Total
Stockholders’
Equity
SharesAmountSharesAmount
Balance at June 30, 2019160,244,219$1,602 (20,026,100)$(719,736)$413,293 $1,079,785 $(26,121)$748,823 
Issuance of common stock88,1411 — — 3,670 — — 3,671 
Stock options exercised67,9971 — — 1,531 — — 1,532 
Repurchase of common stock— — (807)(57)— — — (57)
Recognition of liability related to future restricted stock units vesting— — — — (41)— — (41)
Net income— — — — — 114,325 — 114,325 
Other comprehensive income (loss), net of tax— — — — — — (4,998)(4,998)
Dividends paid of $0.23 per share of common stock
— — — — — (32,436)— (32,436)
Stock-based compensation expense— — — — 9,364 — — 9,364 
Balance at September 30, 2019160,400,357$1,604 (20,026,907)$(719,793)$427,817 $1,161,674 $(31,119)$840,183 
Balance at March 31, 2019159,924,825$1,599 (19,896,972)$(711,450)$401,596 $994,811 $(11,190)$675,366 
Issuance of common stock246,2333 — — 7,046 — — 7,049 
Stock options exercised229,2992 — — 3,685 — — 3,687 
Repurchase of common stock (2)— — (129,935)(8,343)— — — (8,343)
Recognition of liability related to future restricted stock units vesting— — — — (318)— — (318)
Net income— — — — — 231,711 — 231,711 
Other comprehensive income (loss), net of tax— — — — — — (19,929)(19,929)
Dividends paid of $0.46 per share of common stock
— — — — — (64,848)— (64,848)
Stock-based compensation expense— — — — 15,808 — — 15,808 
Balance at September 30, 2019160,400,357$1,604 (20,026,907)$(719,793)$427,817 $1,161,674 $(31,119)$840,183 

(2) During the six months ended September 30, 2019, the Company purchased 93 thousand shares of the Company’s Class A Common Stock in a series of open market transactions for $5.9 million. Additionally, the Company repurchased shares during the six months ended September 30, 2019 to cover the minimum statutory withholding taxes on restricted stock units that vested on various dates during the period.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in tables in thousands, except share and per share data or unless otherwise noted)
1. BUSINESS OVERVIEW
Booz Allen Hamilton Holding Corporation, including its wholly owned subsidiaries, or the Company, we, us, and our, was incorporated in Delaware in May 2008. The Company provides management and technology consulting, analytics, engineering, digital solutions, mission operations, and cyber services to U.S. and international governments, major corporations, and not-for-profit organizations. The Company reports operating results and financial data in one reportable segment. The Company is headquartered in McLean, Virginia, with approximately 27,600 employees as of September 30, 2020.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles, or GAAP, and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission, or SEC, and should be read in conjunction with the information contained in the Company's Annual Report on Form 10-K for the year ended March 31, 2020. The interim period unaudited condensed consolidated financial statements are presented as described below. Certain information and disclosures normally required for annual financial statements have been condensed or omitted pursuant to GAAP and SEC rules and regulations. In the opinion of management, all adjustments considered necessary for fair presentation of the results of the interim period presented have been included. The Company’s fiscal year ends on March 31 and unless otherwise noted, references to fiscal year or fiscal are for fiscal years ended March 31. The results of operations for the six months ended September 30, 2020 are not necessarily indicative of results to be expected for the full fiscal year.
The condensed consolidated financial statements and notes of the Company include its subsidiaries, and the joint ventures and partnerships over which the Company has a controlling financial interest. The Company uses the equity method to account for investments in entities that it does not control if it is otherwise able to exert significant influence over the entities' operating and financial policies.
Certain amounts reported in the Company's prior year condensed consolidated financial statements have been reclassified to conform to the current year presentation.
Accounting Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting periods. Areas of the financial statements where estimates may have the most significant effect include the provision for claimed indirect costs, valuation and lives of tangible and intangible assets, impairment of long-lived assets, accrued liabilities, revenue recognition, including the accrual of indirect costs, bonus and other incentive compensation, stock-based compensation, reserves for uncertain tax positions and valuation allowances on deferred tax assets, provisions for income taxes, postretirement obligations, collectability of receivables, and loss accruals for litigation. Actual results experienced by the Company may differ materially from management's estimates.
Recently Adopted Accounting Standards
In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). This guidance requires companies to record an allowance for expected credit losses over the contractual term of certain financial assets, including trade receivables and contract assets, and expands disclosure requirements for credit quality of financial assets. The Company adopted this standard effective April 1, 2020 using the modified retrospective method. The adoption of this standard did not have a material impact on the condensed consolidated financial statements and disclosures.
In August 2018, the FASB issued ASU 2018-15, Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract. This guidance requires a customer in a cloud computing arrangement that is a service contract to follow existing internal-use software guidance to determine which implementation costs to defer and recognize as an asset. ASU 2018-15 generally aligns the guidance on capitalizing implementation costs incurred in a cloud computing arrangement that is a service contract with that of implementation costs incurred to develop or obtain internal-use software, including hosting arrangements that include an internal-use software license. ASU 2018-15 is effective for interim reporting periods for fiscal years beginning after December 15, 2019. The Company adopted this standard effective April 1, 2020 on a prospective basis, and adoption of this standard did not have a material impact on the condensed consolidated financial statements.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in tables in thousands, except share and per share data or unless otherwise noted)
In December 2019, the FASB issued ASU 2019-12 Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This guidance includes removal of certain exceptions to the general principles of Topic 740, and simplification in several other areas such as accounting for a franchise tax (or similar tax) that is partially based on income. The provisions of this standard are effective for years beginning after December 15, 2020, with early adoption permitted. The Company early adopted the standard effective April 1, 2020, and applied most of the relevant amendments prospectively. The Company’s adoption did not have a material impact on the condensed consolidated financial statements.
In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This guidance contains optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other areas or transactions that are impacted by reference rate reform. The Company elected to adopt Topic 848 in fiscal 2020 and as of September 30, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the Company’s ability to apply hedge accounting to our derivative financial instruments. The Company continues to evaluate the impact of the guidance and may apply other elections, as applicable and as allowed by Topic 848.
Recent Accounting Pronouncements Not Yet Adopted
Other accounting and reporting pronouncements effective after September 30, 2020 and issued through the filing date are not expected to have a material impact on the Company's condensed consolidated financial statements.
3. REVENUE
The Company's revenues from contracts with customers (clients) are derived from offerings that include management and technology consulting services, analytics, digital solutions, engineering, mission operations, and cyber services, substantially with the U.S. government and its agencies and, to a lesser extent, subcontractors. The Company also serves foreign governments, as well as domestic and international commercial clients. The Company performs under various types of contracts, which include cost-reimbursable contracts, time-and-materials contracts, and fixed-price contracts.
Contract Estimates
Many of our contracts recognize revenue under a contract cost-based input method and require an Estimate-at-Completion (EAC) process, which management uses to review and monitor the progress towards the completion of our performance obligations. Under this process, management considers various inputs and assumptions related to the EAC, including, but not limited to, progress towards completion, labor costs and productivity, material and subcontractor costs, and identified risks. Estimating the total cost at completion of performance obligations is subjective and requires management to make assumptions about future activity and cost drivers under the contract. Changes in these estimates can occur for a variety of reasons and, if significant, may impact the profitability of the Company’s contracts. Changes in estimates related to contracts accounted for under the EAC process are recognized on a cumulative catch-up basis in the period when such changes are determinable and reasonably estimable. If the estimate of contract profitability indicates an anticipated loss on a contract, the Company recognizes the total loss at the time it is identified. For each of the three and six months ended September 30, 2020 and 2019, the aggregate impact of adjustments in contract estimates was not material.
Disaggregation of Revenue
We disaggregate our revenue from contracts with customers by contract type, customer, as well as whether the Company acts as prime contractor or sub-contractor, as we believe these categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. The following series of tables presents our revenue disaggregated by these categories.
Revenue by Contract Type:
    We generate revenue under the following three basic types of contracts:
Cost-Reimbursable Contracts: Cost-reimbursable contracts provide for the payment of allowable costs incurred during performance of the contract, up to a ceiling based on the amount that has been funded, plus a fixed fee or award fee.
Time-and-Materials Contracts: Under contracts in this category, we are paid a fixed hourly rate for each direct labor hour expended, and we are reimbursed for billable material costs and billable out-of-pocket expenses inclusive of allocable indirect costs. We assume the financial risk on time-and-materials contracts because our costs of performance may exceed negotiated hourly rates.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in tables in thousands, except share and per share data or unless otherwise noted)
Fixed-Price Contracts: Under a fixed-price contract, we agree to perform the specified work for a predetermined price. To the extent our actual direct and allocated indirect costs decrease or increase from the estimates upon which the price was negotiated, we will generate more or less profit, respectively, or could incur a loss.
The table below presents the total revenue for each type of contract:
 Three Months Ended
September 30,
Six Months Ended
September 30,
 2020201920202019
Cost-reimbursable$1,138,501 56 %$1,026,055 57 %$2,230,549 56 %$2,052,648 56 %
Time-and-materials504,663 25 %423,605 23 %1,007,209 25 %844,200 23 %
Fixed-price376,021 19 %369,917 20 %737,880 19 %747,905 21 %
Total Revenue$2,019,185 100 %$1,819,577 100 %$3,975,638 100 %$3,644,753 100 %
Revenue by Customer Type:
Three Months Ended
September 30,
Six Months Ended
September 30,
2020201920202019
U.S. government:
Defense Clients$1,000,340 50 %$845,270 47 %$1,931,676 49 %$1,704,206 47 %
Intelligence Clients396,110 19 %405,220 22 %803,214 20 %824,287 22 %
Civil Clients570,213 28 %511,012 28 %1,128,136 28 %1,003,045 28 %
Total U.S. government1,966,663 97 %1,761,502 97 %3,863,026 97 %3,531,538 97 %
Global Commercial Clients52,522 3 %58,075 3 %112,612 3 %113,215 3 %
Total Revenue$2,019,185 100 %$1,819,577 100 %$3,975,638 100 %$3,644,753 100 %
Revenue by Whether the Company Acts as a Prime Contractor or a Sub-Contractor:
Three Months Ended
September 30,
Six Months Ended
September 30,
2020201920202019
Prime Contractor$1,880,778 93 %$1,676,522 92 %$3,684,382 93 %$3,349,952 92 %
Sub-contractor138,407 7 %143,055 8 %291,256 7 %294,801 8 %
Total Revenue$2,019,185 100 %$1,819,577 100 %$3,975,638 100 %$3,644,753 100 %
Performance Obligations
Remaining performance obligations represent the transaction price of exercised contracts for which work has not yet been performed, irrespective of whether funding has or has not been authorized and appropriated as of the date of exercise. Remaining performance obligations do not include negotiated but unexercised options or the unfunded value of expired contracts.
As of September 30, 2020 and March 31, 2020, the Company had $8.4 billion and $6.3 billion, respectively, of remaining performance obligations and we expect to recognize more than half of the remaining performance obligations at September 30, 2020 as revenue over the next 12 months, and approximately three quarters over the next 24 months. The remainder is expected to be recognized thereafter.
Contract Balances
The Company's performance obligations are typically satisfied over time and revenue is generally recognized using a cost-based input method. Fixed-price contracts are typically billed to the customer using milestone or fixed monthly payments, while cost-reimbursable-plus-fee and time-and-material contracts are typically billed to the customer at periodic intervals (e.g. monthly or weekly) as indicated by the terms of the contract. Disparities between the timing of revenue recognition and customer billings and cash collections results in net contract assets or liabilities being recognized at the end of each reporting period.
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in tables in thousands, except share and per share data or unless otherwise noted)
Contract assets primarily consist of unbilled receivables typically resulting from revenue recognized exceeding the amount billed to the customer and right to payment is not just subject to the passage of time. Contract liabilities primarily consist of advance payments, billings in excess of costs incurred and deferred revenue. Contract assets and liabilities are reported on a net contract basis at the end of each reporting period. The Company maintains an allowance for doubtful accounts to provide for an estimate of uncollected receivables. Refer to Note 5 for more information on receivables recognized from contracts accounted for under Accounting Standards Codification (ASC) No. 606, Revenue from Contracts with Customers (Topic 606).
The following table summarizes the contract balances recognized on the Company’s condensed consolidated balance sheets:
 Balance Sheet line itemSeptember 30,
2020
March 31,
2020
Contract assets:
CurrentAccounts receivable, net of allowance1,022,558 988,634 
Long-termOther long-term assets63,294 62,600 
Total$1,085,852 $1,051,234 
Contract liabilities:
Advance payments, billings in excess of costs incurred and deferred revenueOther current liabilities$28,840 $26,018 
Changes in contract assets and contract liabilities are primarily due to the timing difference between the Company’s performance of services and payments from customers. For the three months ended September 30, 2020 and 2019, we recognized revenue of $2.5 million and $1.7 million, respectively, and for the six months ended September 30, 2020 and September 30, 2019, we recognized revenue of $22.0 million and $18.4 million, respectively, related to our contract liabilities on April 1, 2020 and 2019, respectively. To determine revenue recognized from contract liabilities during the reporting periods, the Company allocates revenue to individual contract liability balances and applies revenue recognized during the reporting periods first to the beginning balances of contract liabilities until the revenue exceeds the balances.

4. EARNINGS PER SHARE
The Company computes basic and diluted earnings per share amounts based on net income for the periods presented. The Company uses the weighted-average number of common shares outstanding during the period to calculate basic earnings per share, or EPS. Diluted EPS adjusts the weighted average number of shares outstanding to include the dilutive effect of outstanding common stock options and other stock-based awards.
The Company currently has outstanding shares of Class A Common Stock. Unvested Class A Restricted Common Stock holders are entitled to participate in non-forfeitable dividends or other distributions. These unvested restricted shares participated in the Company's dividends declared and were paid in the first and second quarters of fiscal 2021 and 2020. As such, EPS is calculated using the two-class method whereby earnings are reduced by distributed earnings as well as any available undistributed earnings allocable to holders of unvested restricted shares. A reconciliation of the income used to compute basic and diluted EPS for the periods presented are as follows:
 Three Months Ended
September 30,
Six Months Ended
September 30,
 2020201920202019
Earnings for basic computations (1)$135,283 $113,725 $263,951 $230,492 
Weighted-average common shares outstanding for basic computations137,882,906 140,245,038138,017,120 140,125,779
Earnings for diluted computations (1)$135,286 $113,728 $263,958 $230,499 
Dilutive stock options and restricted stock864,734 1,117,098987,262 1,127,138
Weighted-average common shares outstanding for diluted computations138,747,640 141,362,136139,004,382 141,252,917
Earnings per common share
Basic$0.98 $0.81 $1.91 $1.64 
Diluted$0.98 $0.80 $1.90 $1.63 
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in tables in thousands, except share and per share data or unless otherwise noted)

(1) During the three months ended September 30, 2020 and 2019, approximately 0.8 million and 0.7 million participating securities, respectively, were paid dividends totaling $0.3 million and $0.2 million, respectively. During the six months ended September 30, 2020 and 2019, approximately 0.8 million and 0.7 million participating securities, respectively, were paid dividends totaling $0.5 million and $0.3 million, respectively. For the three months ended September 30, 2020 and 2019, there were undistributed earnings of $0.5 million and $0.4 million, respectively, allocated to the participating class of securities in both basic and diluted EPS. For the six months ended September 30, 2020 and 2019, there were undistributed earnings of $1.0 million and $0.9 million, respectively, allocated to the participating class of securities in both basic and diluted EPS. The allocated undistributed earnings and the dividends paid comprise the difference between net income presented on the condensed consolidated statements of operations and earnings for basic and diluted computations for both the three and six months ended September 30, 2020 and 2019.
The EPS calculation for the three months ended September 30, 2020 and 2019 excludes 0.3 million and 0.2 million options, respectively, as their impact was anti-dilutive. The EPS calculation for both the six months ended September 30, 2020 and 2019 excludes 0.2 million options, as their impact was anti-dilutive.
5. ACCOUNTS RECEIVABLE, NET OF ALLOWANCE
Accounts receivable, net of allowance consisted of the following: 
September 30,
2020
March 31,
2020
Current assets
Accounts receivable–billed$449,382 $474,822 
Accounts receivable–unbilled1,022,558 988,634 
Allowance for doubtful accounts(4,359)(3,985)
Accounts receivable, net of allowance1,467,581 1,459,471 
Other long-term assets
Accounts receivable–unbilled63,294 62,600 
Total accounts receivable, net$1,530,875 $1,522,071 
Unbilled amounts represent revenues for which billings have not been presented to customers at quarter-end or year-end. These amounts are generally billed and collected within one year subject to various conditions including, without limitation, appropriated and available funding. Long-term unbilled receivables not anticipated to be billed and collected within one year, which are primarily related to retainage, holdbacks, and long-term rate settlements to be billed at contract closeout, are included in other long-term assets in the accompanying condensed consolidated balance sheets. The Company recognized a (benefit) provision for doubtful accounts of $(0.09) million and $0.5 million for the three months ended September 30, 2020 and 2019, respectively, and $(0.12) million and $2.4 million for the six months ended September 30, 2020 and September 30, 2019, respectively.
The primary financial instruments, other than derivatives, that potentially subject the Company to concentrations of credit risk are accounts receivable. The Company's primary customers are U.S. federal government agencies and prime contractors under contracts with the U.S. government. The Company is exposed to credit risk primarily through global commercial customers. The Company continuously monitors its credit exposure through review of customer balances against contract terms, historical cash collections, outstanding past due status, current economic conditions and dispute resolution. It records provisions for doubtful accounts based on its expected credit losses considering historical experience, current information and reasonable and supportable forecasts of future economic conditions.

6. ACCOUNTS PAYABLE AND OTHER ACCRUED EXPENSES
Accounts payable and other accrued expenses consisted of the following: 
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BOOZ ALLEN HAMILTON HOLDING CORPORATION
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Amounts in tables in thousands, except share and per share data or unless otherwise noted)
 September 30,
2020
March 31,
2020
Vendor payables$452,804 $432,953 
Accrued expenses400,081 265,058 
Total accounts payable and other accrued expenses$852,885 $698,011 
Accrued expenses consisted primarily of the Company’s provision for claimed indirect costs, which were approximately $237.5 million and $224.6 million as of September 30, 2020 and March 31, 2020, respectively. See Note 18 for further discussion of this provision.

7. ACCRUED COMPENSATION AND BENEFITS
Accrued compensation and benefits consisted of the following: 
September 30,
2020
March 31,
2020
Bonus$45,024 $114,359 
Retirement75,548 41,604 
Vacation210,977 159,512 
Other28,998 33,300