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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, 2022
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 10/26/2022
Class A Common Stock132,226,183



TABLE OF CONTENTS
 
Page
ITEM 1
ITEM 2
ITEM 3
ITEM 4
ITEM 1
ITEM 1A
ITEM 2
ITEM 3
ITEM 4
ITEM 5
ITEM 6



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
(Amounts in thousands, except share and per share data)
September 30,
2022
March 31,
2022
 (Unaudited)
ASSETS
Current assets:
Cash and cash equivalents$756,520 $695,910 
Accounts receivable, net1,655,774 1,622,989 
Prepaid expenses and other current assets305,753 126,777 
Total current assets2,718,047 2,445,676 
Property and equipment, net of accumulated depreciation
191,247 202,229 
Operating lease right-of-use assets198,656 227,231 
Intangible assets, net of accumulated amortization607,235 646,682 
Goodwill2,014,890 2,021,931 
Other long-term assets475,582 481,826 
Total assets$6,205,657 $6,025,575 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt$41,250 $68,379 
Accounts payable and other accrued expenses944,759 902,616 
Accrued compensation and benefits394,152 438,634 
Operating lease liabilities54,983 52,334 
Other current liabilities65,036 71,991 
Total current liabilities1,500,180 1,533,954 
Long-term debt, net of current portion2,790,011 2,731,693 
Operating lease liabilities, net of current portion212,129 247,070 
Deferred tax liabilities 239,602 
Other long-term liabilities484,802 226,535 
Total liabilities4,987,122 4,978,854 
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, Class A — $0.01 par value — authorized, 600,000,000 shares; issued, 165,110,617 shares at September 30, 2022 and 164,372,545 shares at March 31, 2022; outstanding, 132,314,959 shares at September 30, 2022 and 132,584,348 shares at March 31, 2022
1,651 1,646 
Treasury stock, at cost — 32,795,658 shares at September 30, 2022 and 31,788,197 shares at March 31, 2022
(1,722,881)(1,635,454)
Additional paid-in capital706,620 656,222 
Retained earnings2,208,952 2,015,071 
Accumulated other comprehensive loss22,141 8,585 
Total Booz Allen stockholders' equity1,216,483 1,046,070 
Non-controlling interest2,052 651 
Total stockholders’ equity1,218,535 1,046,721 
Total liabilities and stockholders’ equity$6,205,657 $6,025,575 

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)
(Amounts in thousands, except per share data)
 Three Months Ended
September 30,
Six Months Ended
September 30,
 2022202120222021
Revenue$2,298,976 $2,106,038 $4,548,576 $4,095,104 
Operating costs and expenses:
Cost of revenue1,057,450 947,689 2,132,423 1,910,408 
Billable expenses684,941 640,120 1,359,207 1,195,665 
General and administrative expenses293,612 262,260 546,676 564,060 
Depreciation and amortization39,052 37,602 79,154 65,347 
Total operating costs and expenses2,075,055 1,887,671 4,117,460 3,735,480 
Operating income223,921 218,367 431,116 359,624 
Interest expense(28,342)(24,254)(52,997)(45,524)
Other income, net26,460 6,848 23,502 6,315 
Income before income taxes222,039 200,961 401,621 320,415 
Income tax expense51,258 46,127 92,747 73,479 
Net income$170,781 $154,834 $308,874 $246,936 
Net loss attributable to non-controlling interest151  342  
Net income attributable to common stockholders170,932 154,834 309,216 246,936 
Earnings per common share (Note 4):
Basic$1.28 $1.14 $2.32 $1.82 
Diluted$1.28 $1.14 $2.31 $1.81 
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)
(Amounts in thousands)
 Three Months Ended
September 30,
Six Months Ended
September 30,
 2022202120222021
Net income$170,781 $154,834 $308,874 $246,936 
Other comprehensive income, net of tax:
Change in unrealized gain on derivatives designated as cash flow hedges7,801 2,739 13,560 5,733 
Change in postretirement plan costs(2)20 (4)39 
Total other comprehensive income, net of tax7,799 2,759 13,556 5,772 
Comprehensive income178,580 157,593 322,430 252,708 
Comprehensive loss attributable to non-controlling interest151  342  
Comprehensive income attributable to common stockholders$178,731 $157,593 $322,772 $252,708 

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)
(Amounts in thousands)Six Months Ended
September 30,
 20222021
Cash flows from operating activities
Net income$308,874 $246,936 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization79,154 65,347 
Noncash lease expense27,558 27,664 
Stock-based compensation expense32,222 28,428 
Amortization of debt issuance costs 2,287 2,294 
Loss on debt extinguishment10,251 2,515 
(Gains) losses on dispositions, and other(30,151)(3,018)
Gain on consolidation of equity method investment (5,666)
Changes in assets and liabilities:
Accounts receivable, net(39,358)(43,125)
Deferred income taxes and income taxes receivable / payable(130,843)59,350 
Prepaid expenses and other current and long-term assets(15,885)(27,747)
Accrued compensation and benefits(26,629)(25,268)
Accounts payable and other accrued expenses41,453 149,586 
Other current and long-term liabilities(31,841)(17,550)
Net cash provided by operating activities227,092 459,746 
Cash flows from investing activities
Purchases of property, equipment, and software(29,734)(29,675)
Payments for business acquisitions, net of cash acquired (779,581)
Payments for cost method investments (2,000)
Cash received from the sale of a business44,063  
Net cash provided by (used in) investing activities14,329 (811,256)
Cash flows from financing activities
Proceeds from issuance of common stock12,052 11,526 
Stock option exercises7,992 3,016 
Repurchases of common stock(103,266)(232,381)
Cash dividends paid(115,897)(101,869)
Repayments on revolving credit facility, term loans, and Senior Notes(396,443)(78,067)
Net proceeds from debt issuance414,751 487,027 
Proceeds from revolving credit facility 60,000 
Net cash (used in) provided by financing activities(180,811)149,252 
Net increase (decrease) in cash and cash equivalents60,610 (202,258)
Cash and cash equivalents––beginning of period695,910 990,955 
Cash and cash equivalents––end of period$756,520 $788,697 
Supplemental disclosures of cash flow information
Net cash paid during the period for:
Interest$42,936 $27,658 
Income taxes$215,767 $15,249 
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)
Non-Controlling InterestTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balance at June 30, 2022164,900,879$1,650 (32,477,501)$(1,693,012)$679,632 $2,095,093 $14,342 $1,419 $1,099,124 
Issuance of common stock118,2161 — — 5,970 — — — 5,971 
Stock options exercised91,522— — — 3,396 — — — 3,396 
Repurchase of common stock— — (318,157)(29,869)— — — — (29,869)
Net income— — — — — 170,932 — (151)170,781 
Other comprehensive income, net of tax— — — — — — 7,799 — 7,799 
Dividends declared of $0.43 per share of common stock
— — — — — (57,073)— — (57,073)
Stock-based compensation expense— — — — 18,406 — — — 18,406 
Contribution to non-controlling interest— — — — (784)— — 784  
Balance at September 30, 2022165,110,617$1,651 (32,795,658)$(1,722,881)$706,620 $2,208,952 $22,141 $2,052 $1,218,535 
Balance at March 31, 2022164,372,545$1,646 (31,788,197)$(1,635,454)$656,222 $2,015,071 $8,585 $651 $1,046,721 
Issuance of common stock503,2254 — — 12,048 — — — 12,052 
Stock options exercised234,8471 — — 7,991 — — — 7,992 
Repurchase of common stock (1)— — (1,007,461)(87,427)— — — — (87,427)
Net income— — — — — 309,216 — (342)308,874 
Other comprehensive income, net of tax— — — — — — 13,556 — 13,556 
Dividends declared of $0.86 per share of common stock
— — — — — (115,335)— — (115,335)
Stock-based compensation expense— — — — 32,102 — — — 32,102 
Contribution to non-controlling interest— — (1,743)— — 1,743  
Balance at September 30, 2022165,110,617$1,651 (32,795,658)$(1,722,881)$706,620 $2,208,952 $22,141 $2,052 $1,218,535 

(1) During the six months ended September 30, 2022, the Company purchased 0.9 million shares of the Company’s Class A Common Stock in a series of open market transactions for $76.4 million. Additionally, the Company repurchased shares for $11.0 million during the six months ended September 30, 2022 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
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)
Non-Controlling InterestTotal
Stockholders’
Equity
SharesAmountSharesAmount
Balance at June 30, 2021163,464,754$1,635 (28,035,397)$(1,327,601)$577,228 $1,799,029 $(26,758)$ $1,023,533 
Issuance of common stock99,738— — — 5,643 — — — 5,643 
Stock options exercised63,1591 — — 1,222 — — — 1,223 
Repurchase of common stock— — (1,267,144)(105,535)— — — — (105,535)
Recognition of liability related to future restricted stock units vesting— — — — 853 — — — 853 
Net income— — — — — 154,834 — — 154,834 
Other comprehensive income, net of tax— — — — — — 2,759 — 2,759 
Dividends paid of $0.37 per share of common stock
— — — — — (51,196)— — (51,196)
Stock-based compensation expense— — — — 15,984 — — — 15,984 
Balance at September 30, 2021163,627,651$1,636 (29,302,541)$(1,433,136)$600,930 $1,902,667 $(23,999)$ $1,048,098 
Balance at March 31, 2021162,950,606$1,629 (26,704,577)$(1,216,163)$557,957 $1,757,524 $(29,771)$ $1,071,176 
Issuance of common stock558,6816 — — 10,317 — — — 10,323 
Stock options exercised118,3641 — — 3,015 — — — 3,016 
Repurchase of common stock (2)— — (2,597,964)(216,973)— — — — (216,973)
Recognition of liability related to future restricted stock units vesting— — — — 1,213 — — — 1,213 
Net income— — — — — 246,936 — — 246,936 
Other comprehensive income, net of tax— — — — — — 5,772 — 5,772 
Dividends declared of $0.74 per share of common stock
— — — — — (101,793)— — (101,793)
Stock-based compensation expense— — — — 28,428 — — — 28,428 
Balance at September 30, 2021163,627,651$1,636 (29,302,541)$(1,433,136)$600,930 $1,902,667 $(23,999) $1,048,098 

(2) During the six months ended September 30, 2021, the Company purchased 2.4 million shares of the Company’s Class A Common Stock in a series of open market transactions for $203.7 million. Additionally, the Company repurchased shares for $13.3 million during the six months ended September 30, 2021 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 30,000 employees as of September 30, 2022.
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, 2022. 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 periods 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, 2022 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 other entities over which the Company has a controlling financial interest or where the Company is a primary beneficiary. 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. Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost or cost net of other-than-temporary impairments.
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 Pronouncements
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. The guidance is intended to provide relief for entities impacted by reference rate reform. Topic 848 contains provisions and optional accounting expedients designed to simplify requirements around the designation of hedging relationships, probability assessments of hedged forecasted transactions, and accounting for modifications of contracts that refer to LIBOR or other rates affected by reference rate reform. The guidance is elective and is effective on the date of issuance. Topic 848 is applied prospectively to contract modifications and as of the effective date for existing and new eligible hedging relationships. The Company has elected to apply the hedge accounting practical expedient related to the probability of hedged future LIBOR indexed cash flows and continues its quantitative method of assessing subsequent hedge effectiveness in the fourth quarter of fiscal 2020. Further, during the second quarter ended September 30, 2022, the Company transitioned its term loans from LIBOR-indexed interest payments to Term SOFR-indexed interest payments in connection with the Ninth Amendment of the Credit Agreement. For its interest rate swaps designated as cash flow hedges, the Company elected to apply certain of the accounting expedients to assume that the reference rates upon which hedged forecasted transactions will be based on match the LIBOR-indexed rates used in the Company's interest rate swaps consistent with past presentation. The Company continues to evaluate the impact of Topic 848 and may apply other elections, as applicable. The adoption of this guidance did not have a material impact on the consolidated financial statements and disclosures.
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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)
Recent Accounting Pronouncements Not Yet Adopted
Accounting and reporting pronouncements effective after September 30, 2022 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 consulting, analytics, digital solutions, engineering, mission, 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
We recognize revenue for many of our contracts 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 the completion of our 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 revenue and 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, 2022 and 2021, 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 subcontractor, 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.
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,
 2022202120222021
Cost-reimbursable$1,201,407 52 %$1,127,189 53 %$2,392,235 53 %$2,242,614 55 %
Time-and-materials564,438 25 %500,263 24 %1,110,340 24 %997,713 24 %
Fixed-price533,131 23 %478,586 23 %1,046,001 23 %854,777 21 %
Total Revenue$2,298,976 100 %$2,106,038 100 %$4,548,576 100 %$4,095,104 100 %
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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)
Revenue by Customer Type:
Three Months Ended
September 30,
Six Months Ended
September 30,
2022202120222021
U.S. government(1):
Defense Clients$1,019,108 44 %$996,463 48 %$2,039,099 45 %$1,970,069 48 %
Intelligence Clients432,543 19 %396,415 19 %841,426 18 %775,588 19 %
Civil Clients783,782 34 %662,138 31 %1,541,496 34 %1,254,934 31 %
Total U.S. government2,235,433 97 %2,055,016 98 %4,422,021 97 %4,000,591 98 %
Global Commercial Clients63,543 3 %51,022 2 %126,555 3 %94,513 2 %
Total Revenue$2,298,976 100 %$2,106,038 100 %$4,548,576 100 %$4,095,104 100 %
(1) Certain contracts were reassigned between the various verticals of our U.S. government business shown in the table above to better align our operations to the customers we serve within each market. Prior year revenue by customer type has been recast to reflect the changes.
Revenue by Whether the Company Acts as a Prime Contractor or a Subcontractor:
Three Months Ended
September 30,
Six Months Ended
September 30,
2022202120222021
Prime Contractor$2,179,375 95 %$1,978,216 94 %$4,310,670 95 %$3,839,939 94 %
Subcontractor119,601 5 %127,822 6 %237,906 5 %255,165 6 %
Total Revenue$2,298,976 100 %$2,106,038 100 %$4,548,576 100 %$4,095,104 100 %
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 exclude negotiated but unexercised options, the unfunded value of expired contracts, and certain variable consideration which the Company does not expect to recognize as revenue.
As of September 30, 2022 and March 31, 2022, the Company had $9.0 billion and $7.4 billion of remaining performance obligations, respectively. We expect to recognize approximately 70% of the remaining performance obligations at September 30, 2022 as revenue over the next 12 months, and approximately 85% 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 result in net contract assets or liabilities being recognized at the end of each reporting period.
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. Unbilled amounts represent revenues for which billings have not been presented to customers. 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. 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 credit losses to provide for an estimate of uncollectible receivables. Provision for credit losses recognized was not material for the three and six months ended September 30, 2022 and 2021.
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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)
The following table summarizes the contract assets and liabilities, and accounts receivable, net of allowance recognized on the Company’s condensed consolidated balance sheets:
September 30,
2022
March 31,
2022
Current assets
Accounts receivable–billed$446,058 $465,322 
Accounts receivable–unbilled (contract assets)1,209,718 1,157,667 
Allowance for credit losses(2) 
Accounts receivable, net1,655,774 1,622,989 
Other long-term assets
Accounts receivable–unbilled (contract assets)58,529 64,339 
Total accounts receivable, net$1,714,303 $1,687,328