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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Perspecta Inc | NYSE:PRSP | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 29.34 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
PERSPECTA INC.
|
||
(Exact Name of Registrant as Specified in Its Charter)
|
Nevada
|
82-3141520
|
(State or Other Jurisdiction of Incorporation or Organization)
|
(I.R.S. Employer Identification No.)
|
|
|
15052 Conference Center Drive, Chantilly, Virginia
|
20151
|
(Address of Principal Executive Offices)
|
(Zip Code)
|
|
|
Registrant’s Telephone Number, Including Area Code:
(571) 313-6000
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
x
|
Smaller reporting company
o
|
Emerging growth company
o
|
|
Item
|
|
|
Page
|
|
|
|
|
|
|
|
|
1.
|
|
||
2.
|
|
||
3.
|
|
||
4.
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
1.
|
|
||
1A.
|
|
||
2.
|
|
||
3.
|
|
||
4.
|
|
||
5.
|
|
||
6.
|
|
||
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions, except per share amounts)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
Revenue
|
|
$
|
1,075
|
|
|
$
|
722
|
|
|
$
|
2,936
|
|
|
$
|
2,104
|
|
|
|
|
|
|
|
|
|
|
||||||||
Costs of services (excludes depreciation and amortization and restructuring costs)
|
|
816
|
|
|
550
|
|
|
2,226
|
|
|
1,632
|
|
||||
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)
|
|
76
|
|
|
51
|
|
|
226
|
|
|
132
|
|
||||
Depreciation and amortization
|
|
76
|
|
|
46
|
|
|
214
|
|
|
116
|
|
||||
Restructuring costs
|
|
1
|
|
|
3
|
|
|
3
|
|
|
10
|
|
||||
Separation and integration-related costs
|
|
19
|
|
|
27
|
|
|
84
|
|
|
44
|
|
||||
Interest expense, net
|
|
37
|
|
|
—
|
|
|
84
|
|
|
7
|
|
||||
Other expense (income), net
|
|
2
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
||||
Total costs and expenses
|
|
1,027
|
|
|
677
|
|
|
2,811
|
|
|
1,941
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Income before taxes
|
|
48
|
|
|
45
|
|
|
125
|
|
|
163
|
|
||||
Income tax expense (benefit)
|
|
10
|
|
|
(59
|
)
|
|
34
|
|
|
(13
|
)
|
||||
Net income
|
|
$
|
38
|
|
|
$
|
104
|
|
|
$
|
91
|
|
|
$
|
176
|
|
|
|
|
|
|
|
|
|
|
||||||||
Earnings per common share
(1)
:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.23
|
|
|
$
|
0.73
|
|
|
$
|
0.55
|
|
|
$
|
1.24
|
|
Diluted
|
|
$
|
0.23
|
|
|
$
|
0.73
|
|
|
$
|
0.55
|
|
|
$
|
1.24
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
|||||||||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||||
Net income
|
|
$
|
38
|
|
|
$
|
104
|
|
|
$
|
91
|
|
|
$
|
176
|
|
||
Other comprehensive income (loss), net of taxes:
|
|
|
|
|
|
|
|
|
||||||||||
|
Cash flow hedge adjustments, net of tax
|
|
(18
|
)
|
|
—
|
|
|
(13
|
)
|
|
—
|
|
|||||
Comprehensive income
|
|
$
|
20
|
|
|
$
|
104
|
|
|
$
|
78
|
|
|
$
|
176
|
|
|
|
As of
|
||||||
(in millions, except per share and share amounts)
|
|
December 31, 2018
|
|
March 31, 2018
|
||||
ASSETS
|
|
|
|
|
||||
Current assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
100
|
|
|
$
|
—
|
|
Receivables, net of allowance for doubtful accounts of $1 and $0
|
|
487
|
|
|
354
|
|
||
Other receivables
|
|
58
|
|
|
—
|
|
||
Prepaid expenses and other current assets
|
|
158
|
|
|
74
|
|
||
Deferred contract costs
|
|
40
|
|
|
21
|
|
||
Total current assets
|
|
843
|
|
|
449
|
|
||
Property and equipment, net of accumulated depreciation of $119 and $66
|
|
354
|
|
|
290
|
|
||
Goodwill
|
|
3,272
|
|
|
2,022
|
|
||
Intangible assets, net of accumulated amortization of $220 and $98
|
|
1,406
|
|
|
897
|
|
||
Other assets
|
|
191
|
|
|
21
|
|
||
Total assets
|
|
$
|
6,066
|
|
|
$
|
3,679
|
|
LIABILITIES and STOCKHOLDERS’ EQUITY
|
|
|
|
|
||||
Current liabilities:
|
|
|
|
|
||||
Current maturities of long-term debt
|
|
$
|
79
|
|
|
$
|
—
|
|
Current capital lease liability
|
|
140
|
|
|
160
|
|
||
Accounts payable
|
|
268
|
|
|
195
|
|
||
Accrued payroll and related costs
|
|
94
|
|
|
17
|
|
||
Accrued expenses and other current liabilities
|
|
356
|
|
|
180
|
|
||
Deferred revenue and advance contract payments
|
|
28
|
|
|
53
|
|
||
Income taxes payable
|
|
48
|
|
|
—
|
|
||
Total current liabilities
|
|
1,013
|
|
|
605
|
|
||
Non-current portion of long-term debt
|
|
2,384
|
|
|
—
|
|
||
Non-current capital lease liability
|
|
149
|
|
|
144
|
|
||
Non-current deferred tax liabilities
|
|
111
|
|
|
176
|
|
||
Other long-term liabilities
|
|
212
|
|
|
25
|
|
||
Total liabilities
|
|
3,869
|
|
|
950
|
|
||
Commitments and contingencies
|
|
|
|
|
|
|
||
Stockholders’ equity:
|
|
|
|
|
||||
Parent company investment, prior to Spin-Off
|
|
—
|
|
|
2,729
|
|
||
Common stock, par value $0.01 per share; 750,000,000 shares authorized; 163,902,020 and 0 shares issued and outstanding
|
|
2
|
|
|
—
|
|
||
Additional paid-in capital
|
|
2,224
|
|
|
—
|
|
||
Retained earnings
|
|
29
|
|
|
—
|
|
||
Accumulated other comprehensive loss
|
|
(13
|
)
|
|
—
|
|
||
Treasury stock at cost, 1,940,382 shares and 0 shares
|
|
(45
|
)
|
|
—
|
|
||
Total stockholders’ equity
|
|
2,197
|
|
|
2,729
|
|
||
Total liabilities and stockholders’ equity
|
|
$
|
6,066
|
|
|
$
|
3,679
|
|
(in millions, except shares in thousands and per share amounts in ones)
|
Common Stock
|
Additional
Paid-in Capital |
Retained Earnings
(Accumulated Deficit) |
Accumulated
Other Comprehensive Income (Loss) |
Treasury Stock
|
Parent Company Investment
|
Total Stockholders’ Equity
|
|||||||||||||||||
Shares
|
|
Amount
|
||||||||||||||||||||||
Balance at March 31, 2018
|
—
|
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
—
|
|
$
|
2,729
|
|
$
|
2,729
|
|
Impact of adoption of new accounting standard
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
4
|
|
|||||||
Net income from April 1 to May 31, 2018
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
49
|
|
49
|
|
|||||||
Transfers to Parent, net from April 1 to May 31, 2018
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(145
|
)
|
(145
|
)
|
|||||||
Balance at May 31, 2018
|
—
|
|
|
—
|
|
—
|
|
—
|
|
—
|
|
—
|
|
2,637
|
|
2,637
|
|
|||||||
Dividend to DXC prior to May 31, 2018
|
—
|
|
|
—
|
|
(984
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(984
|
)
|
|||||||
Spin-Off activity
|
142,426
|
|
|
2
|
|
2,635
|
|
—
|
|
—
|
|
—
|
|
(2,637
|
)
|
—
|
|
|||||||
Mergers activity
|
23,273
|
|
|
—
|
|
578
|
|
—
|
|
—
|
|
—
|
|
—
|
|
578
|
|
|||||||
Net loss from June 1 to June 30, 2018
|
—
|
|
|
—
|
|
—
|
|
(20
|
)
|
—
|
|
—
|
|
—
|
|
(20
|
)
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
(1
|
)
|
|||||||
Dividends declared ($0.05 per share)
|
—
|
|
|
—
|
|
(8
|
)
|
—
|
|
—
|
|
—
|
|
—
|
|
(8
|
)
|
|||||||
Balance at June 30, 2018
|
165,699
|
|
|
2
|
|
2,221
|
|
(20
|
)
|
(1
|
)
|
—
|
|
—
|
|
2,202
|
|
|||||||
Net income from July 1 to September 30, 2018
|
—
|
|
|
—
|
|
—
|
|
24
|
|
—
|
|
—
|
|
—
|
|
24
|
|
|||||||
Other comprehensive income
|
—
|
|
|
—
|
|
—
|
|
—
|
|
6
|
|
—
|
|
—
|
|
6
|
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||||
Repurchases of common stock
|
(923
|
)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(23
|
)
|
—
|
|
(23
|
)
|
|||||||
Stock option exercises and other common stock transactions
|
43
|
|
|
—
|
|
1
|
|
—
|
|
—
|
|
—
|
|
—
|
|
1
|
|
|||||||
Dividends declared ($0.05 per share)
|
—
|
|
|
—
|
|
(4
|
)
|
(4
|
)
|
—
|
|
—
|
|
—
|
|
(8
|
)
|
|||||||
Balance at September 30, 2018
|
164,819
|
|
|
2
|
|
2,219
|
|
—
|
|
5
|
|
(23
|
)
|
—
|
|
2,203
|
|
|||||||
Net income from October 1 to December 31, 2018
|
—
|
|
|
—
|
|
—
|
|
38
|
|
—
|
|
—
|
|
—
|
|
38
|
|
|||||||
Other comprehensive loss
|
—
|
|
|
—
|
|
—
|
|
—
|
|
(18
|
)
|
—
|
|
—
|
|
(18
|
)
|
|||||||
Stock-based compensation
|
—
|
|
|
—
|
|
4
|
|
—
|
|
—
|
|
—
|
|
—
|
|
4
|
|
|||||||
Repurchases of common stock
|
(967
|
)
|
|
—
|
|
—
|
|
—
|
|
—
|
|
(21
|
)
|
—
|
|
(21
|
)
|
|||||||
Stock option exercises and other common stock transactions
|
50
|
|
|
—
|
|
1
|
|
—
|
|
—
|
|
(1
|
)
|
—
|
|
—
|
|
|||||||
Dividends declared ($0.05 per share)
|
—
|
|
|
—
|
|
—
|
|
(9
|
)
|
—
|
|
—
|
|
—
|
|
(9
|
)
|
|||||||
Balance at December 31, 2018
|
163,902
|
|
|
$
|
2
|
|
$
|
2,224
|
|
$
|
29
|
|
$
|
(13
|
)
|
$
|
(45
|
)
|
$
|
—
|
|
$
|
2,197
|
|
(in millions)
|
Parent Company Investment
|
Total Equity
|
||||
Balance at March 31, 2017
|
$
|
416
|
|
$
|
416
|
|
Effects of purchase accounting
|
2,434
|
|
2,434
|
|
||
Net income from April 1 to June 30, 2017
|
32
|
|
32
|
|
||
Transfers to Parent, net
|
(77
|
)
|
(77
|
)
|
||
Balance at June 30, 2017
|
2,805
|
|
2,805
|
|
||
Net income from July 1 to September 30, 2017
|
40
|
|
40
|
|
||
Transfers to Parent, net
|
(108
|
)
|
(108
|
)
|
||
Balance at September 30, 2017
|
2,737
|
|
2,737
|
|
||
Net income from October 1 to December 31, 2017
|
104
|
|
104
|
|
||
Transfers to Parent, net
|
2
|
|
2
|
|
||
Balance at December 31, 2017
|
$
|
2,843
|
|
$
|
2,843
|
|
|
|
Nine Months Ended
|
||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
91
|
|
|
$
|
176
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
214
|
|
|
116
|
|
||
Stock-based compensation
|
|
7
|
|
|
4
|
|
||
Deferred income taxes
|
|
(17
|
)
|
|
(71
|
)
|
||
Gain on sale of assets
|
|
(25
|
)
|
|
—
|
|
||
Other non-cash charges, net
|
|
(13
|
)
|
|
10
|
|
||
Changes in assets and liabilities, net of effects of acquisitions and dispositions:
|
|
|
|
|
||||
Receivables, net
|
|
78
|
|
|
37
|
|
||
Prepaid expenses and other current assets
|
|
(22
|
)
|
|
(20
|
)
|
||
Accounts payable and accrued liabilities
|
|
(23
|
)
|
|
99
|
|
||
Deferred revenue and advanced contract payments
|
|
(13
|
)
|
|
3
|
|
||
Income taxes payable
|
|
20
|
|
|
—
|
|
||
Other operating activities, net
|
|
(3
|
)
|
|
(7
|
)
|
||
Net cash provided by operating activities
|
|
294
|
|
|
347
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Payments for acquisitions, net of cash acquired
|
|
(312
|
)
|
|
—
|
|
||
Extinguishment of Vencore HC and KGS HC debt and related costs
|
|
(994
|
)
|
|
—
|
|
||
Proceeds from sale of assets
|
|
25
|
|
|
—
|
|
||
Purchases of property, equipment and software
|
|
(12
|
)
|
|
(8
|
)
|
||
Payments for outsourcing contract costs
|
|
(7
|
)
|
|
(9
|
)
|
||
Net cash used in investing activities
|
|
(1,300
|
)
|
|
(17
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Principal payments on long-term debt
|
|
(82
|
)
|
|
—
|
|
||
Proceeds from debt issuance
|
|
2,500
|
|
|
—
|
|
||
Payment of debt issuance costs
|
|
(46
|
)
|
|
—
|
|
||
Proceeds from revolving credit facility
|
|
50
|
|
|
—
|
|
||
Payments on revolving credit facility
|
|
(50
|
)
|
|
—
|
|
||
Payments on lease liability
|
|
(124
|
)
|
|
(117
|
)
|
||
Repurchases of common stock
|
|
(43
|
)
|
|
—
|
|
||
Repurchases of common stock to satisfy tax withholding obligations
|
|
(1
|
)
|
|
—
|
|
||
Dividend to DXC
|
|
(984
|
)
|
|
—
|
|
||
Dividends paid to Perspecta stockholders
|
|
(17
|
)
|
|
—
|
|
||
Net transfers to Parent
|
|
(88
|
)
|
|
(213
|
)
|
||
Net cash provided by (used in) financing activities
|
|
1,115
|
|
|
(330
|
)
|
||
Net increase in cash and cash equivalents, including restricted
|
|
109
|
|
|
—
|
|
||
Cash and cash equivalents, including restricted, at beginning of period
|
|
—
|
|
|
—
|
|
||
Cash and cash equivalents, including restricted, at end of period
|
|
109
|
|
|
—
|
|
||
Less restricted cash and cash equivalents included in prepaid expenses and other current assets
|
|
9
|
|
|
—
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
100
|
|
|
$
|
—
|
|
•
|
Ultra KMS Inc., a wholly-owned subsidiary of Perspecta, merged with and into KGS HC (the “KeyPoint Merger”), with KGS HC surviving the KeyPoint Merger;
|
•
|
Concurrently with the KeyPoint Merger, Ultra First VMS Inc., another wholly-owned subsidiary of Perspecta, merged with and into Vencore HC (the “First Vencore Merger”), with Vencore HC surviving the First Vencore Merger; and
|
•
|
Immediately after the KeyPoint Merger and First Vencore Merger, Vencore HC merged with and into Ultra Second VMS LLC (the “Second Vencore Merger” and, together with the KeyPoint Merger and the First Vencore Merger, the “Mergers”), with Ultra Second VMS LLC surviving the Second Vencore Merger.
|
•
|
the combined financial results and cash flows of USPS for the period from April 1, 2018 to May 31, 2018;
|
•
|
the combined financial results and cash flows of USPS for the
three and nine
months ended
December 31, 2017
; and
|
•
|
the combined financial position of USPS as of March 31, 2018.
|
•
|
the consolidated financial statements of Perspecta for the period from June 1, 2018 to
December 31, 2018
; and
|
•
|
the consolidated financial position of Perspecta as of
December 31, 2018
.
|
•
|
Defense and Intelligence - provides services to the DoD, intelligence community, branches of the U.S. Armed Forces, and other DoD agencies.
|
•
|
Civilian and Health Care - provides services to the Departments of Homeland Security, Justice, and Health and Human Services, as well as other federal civilian and state and local government agencies.
|
(in millions)
|
|
As
Reported
|
|
Balances
Without
Adoption of
ASC 606
|
|
Effect of
Change
Higher/(Lower)
|
||||||
Assets
|
|
|
|
|
|
|
||||||
Receivables, net of allowance for doubtful accounts
|
|
$
|
487
|
|
|
$
|
524
|
|
|
$
|
(37
|
)
|
Deferred contract costs
|
|
40
|
|
|
37
|
|
|
3
|
|
|||
Other assets
|
|
191
|
|
|
185
|
|
|
6
|
|
|||
Liabilities and Stockholders’ Equity
|
|
|
|
|
|
|
||||||
Accrued expenses and other current liabilities
|
|
$
|
356
|
|
|
$
|
350
|
|
|
$
|
6
|
|
Deferred revenue and advance contract payments
|
|
28
|
|
|
62
|
|
|
(34
|
)
|
|||
Non-current deferred tax liabilities
|
|
111
|
|
|
109
|
|
|
2
|
|
|||
Other long-term liabilities
|
|
212
|
|
|
221
|
|
|
(9
|
)
|
|||
Total stockholders’ equity
|
|
2,197
|
|
|
2,190
|
|
|
7
|
|
Acquired backlog
|
1 year
|
Software
|
2 to 10 years
|
Developed technology
|
6 years
|
Program assets
|
Expected program asset life
|
Outsourcing contract costs
|
Contract life, excluding option years
|
(in millions)
|
|
Amount
|
||
Preliminary fair value of equity purchase consideration received by Vencore Stockholders
(1)
|
|
$
|
578
|
|
Preliminary fair value of cash purchase consideration received by Vencore Stockholders
|
|
400
|
|
|
Preliminary fair value of cash consideration paid by USPS to extinguish certain existing Vencore indebtedness
|
|
994
|
|
|
Consideration transferred
|
|
$
|
1,972
|
|
(1)
|
Represents the fair value of consideration received by the Vencore HC Stockholder and the KeyPoint Stockholder for approximately
14%
ownership in the combined company. The fair value of the purchase consideration transferred was based on
18,877,244
shares of Perspecta common stock distributed to Vencore HC Stockholder and
4,396,097
shares of Perspecta common stock distributed to the KeyPoint Stockholder as of the close of business on the record date for the Mergers, at the closing price of
$24.86
per share on May 31, 2018.
|
(in millions)
|
|
Estimated Fair Value
|
||
Current assets
|
|
$
|
333
|
|
Property and equipment
|
|
35
|
|
|
Intangible assets
|
|
622
|
|
|
Other assets
|
|
33
|
|
|
Accounts payable, accrued payroll, accrued expenses, and other current liabilities
|
|
(188
|
)
|
|
Deferred revenue
|
|
(12
|
)
|
|
Other liabilities
|
|
(90
|
)
|
|
Net identifiable assets acquired
|
|
733
|
|
|
Goodwill
|
|
1,239
|
|
|
Consideration transferred
|
|
$
|
1,972
|
|
|
|
Nine Months Ended December 31, 2018
|
|
Period from April 1, 2018 to May 31, 2018
|
|
Nine Months Ended December 31, 2018
|
||||||||||||||
(in millions, except per-share amounts)
|
|
Historical Perspecta
(1)
|
|
Historical Vencore HC and KeyPoint HC
|
|
Effects of the Spin-Off
|
|
Effects of the Mergers
|
|
Pro Forma Combined for the Spin-Off and Mergers
|
||||||||||
Revenue
|
|
$
|
2,936
|
|
|
$
|
245
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,181
|
|
Net income (loss)
|
|
$
|
91
|
|
|
$
|
(57
|
)
|
|
$
|
(7
|
)
|
|
$
|
12
|
|
|
$
|
39
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per common share
(2)
:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
$
|
0.24
|
|
||||||
Diluted
|
|
$
|
0.55
|
|
|
|
|
|
|
|
|
$
|
0.24
|
|
|
|
Three Months Ended December 31, 2017
|
||||||||||||||||||
(in millions, except per-share amounts)
|
|
Historical Perspecta
|
|
Historical Vencore HC and KeyPoint HC
|
|
Effects of the Spin-Off
|
|
Effects of the Mergers
|
|
Pro Forma Combined for the Spin-Off and Mergers
|
||||||||||
Revenue
|
|
$
|
722
|
|
|
$
|
349
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,071
|
|
Net income (loss)
|
|
$
|
104
|
|
|
$
|
20
|
|
|
$
|
—
|
|
|
$
|
(32
|
)
|
|
$
|
92
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per common share
(1)
:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
$
|
0.56
|
|
||||||
Diluted
|
|
$
|
0.73
|
|
|
|
|
|
|
|
|
$
|
0.56
|
|
|
|
Nine Months Ended December 31, 2017
|
||||||||||||||||||
(in millions, except per-share amounts)
|
|
Historical Perspecta
|
|
Historical Vencore HC and KeyPoint HC
|
|
Effects of the Spin-Off
|
|
Effects of the Mergers
|
|
Pro Forma Combined for the Spin-Off and Mergers
|
||||||||||
Revenue
|
|
$
|
2,104
|
|
|
$
|
1,041
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,145
|
|
Net income (loss)
|
|
$
|
176
|
|
|
$
|
22
|
|
|
$
|
(18
|
)
|
|
$
|
(61
|
)
|
|
$
|
119
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per common share
(1)
:
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Basic
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
$
|
0.72
|
|
||||||
Diluted
|
|
$
|
1.24
|
|
|
|
|
|
|
|
|
$
|
0.72
|
|
•
|
Identification of the contract, or contracts, with a customer
|
•
|
Identification of the performance obligations in the contract
|
•
|
Determination of the transaction price
|
•
|
Allocation of the transaction price to the performance obligations in the contract
|
•
|
Recognition of revenue when, or as, we satisfy a performance obligation
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and
Health Care
|
|
Total
|
||||||
Cost-reimbursable
|
|
$
|
240
|
|
|
$
|
25
|
|
|
$
|
265
|
|
Fixed-price
|
|
373
|
|
|
229
|
|
|
602
|
|
|||
Time-and-materials
|
|
96
|
|
|
112
|
|
|
208
|
|
|||
Total
|
|
$
|
709
|
|
|
$
|
366
|
|
|
$
|
1,075
|
|
|
|
Nine Months Ended December 31, 2018
|
||||||||||
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and
Health Care
|
|
Total
|
||||||
Cost-reimbursable
|
|
$
|
580
|
|
|
$
|
66
|
|
|
$
|
646
|
|
Fixed-price
|
|
985
|
|
|
699
|
|
|
1,684
|
|
|||
Time-and-materials
|
|
283
|
|
|
323
|
|
|
606
|
|
|||
Total
|
|
$
|
1,848
|
|
|
$
|
1,088
|
|
|
$
|
2,936
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and
Health Care |
|
Total
|
||||||
Prime contractor
|
|
$
|
663
|
|
|
$
|
329
|
|
|
$
|
992
|
|
Subcontractor
|
|
46
|
|
|
37
|
|
|
83
|
|
|||
Total
|
|
$
|
709
|
|
|
$
|
366
|
|
|
$
|
1,075
|
|
|
|
Nine Months Ended December 31, 2018
|
||||||||||
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and
Health Care |
|
Total
|
||||||
Prime contractor
|
|
$
|
1,740
|
|
|
$
|
979
|
|
|
$
|
2,719
|
|
Subcontractor
|
|
108
|
|
|
109
|
|
|
217
|
|
|||
Total
|
|
$
|
1,848
|
|
|
$
|
1,088
|
|
|
$
|
2,936
|
|
|
|
Three Months Ended December 31, 2018
|
||||||||||
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and
Health Care |
|
Total
|
||||||
Federal, including independent agencies
|
|
$
|
707
|
|
|
$
|
302
|
|
|
$
|
1,009
|
|
Non-federal (state, local, other)
|
|
2
|
|
|
64
|
|
|
66
|
|
|||
Total
|
|
$
|
709
|
|
|
$
|
366
|
|
|
$
|
1,075
|
|
|
|
Nine Months Ended December 31, 2018
|
||||||||||
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and
Health Care |
|
Total
|
||||||
Federal, including independent agencies
|
|
$
|
1,843
|
|
|
$
|
893
|
|
|
$
|
2,736
|
|
Non-federal (state, local, other)
|
|
5
|
|
|
195
|
|
|
200
|
|
|||
Total
|
|
$
|
1,848
|
|
|
$
|
1,088
|
|
|
$
|
2,936
|
|
|
|
|
|
As of
|
||||||
(in millions)
|
|
Balance Sheet Line Item
|
|
December 31, 2018
|
|
April 1, 2018
|
||||
Contract assets:
|
|
|
|
|
|
|
||||
Unbilled receivables
|
|
Receivables, net of allowance for doubtful accounts
|
|
$
|
274
|
|
|
$
|
193
|
|
|
|
|
|
|
|
|
||||
Contract liabilities:
|
|
|
|
|
|
|
||||
Current portion of deferred revenue and advance contract payments
|
|
Deferred revenue and advance contract payments
|
|
$
|
28
|
|
|
$
|
27
|
|
Non-current portion of deferred revenue and advance contract payments
|
|
Other long-term liabilities
|
|
1
|
|
|
7
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions, except per share amounts)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
Net income
|
|
$
|
38
|
|
|
$
|
104
|
|
|
$
|
91
|
|
|
$
|
176
|
|
|
|
|
|
|
|
|
|
|
||||||||
Common share information:
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding for basic EPS
|
|
164.32
|
|
|
142.43
|
|
|
165.02
|
|
|
142.43
|
|
||||
Dilutive effect of stock options and equity awards
|
|
0.22
|
|
|
—
|
|
|
0.25
|
|
|
—
|
|
||||
Weighted average common shares outstanding for diluted EPS
|
|
164.54
|
|
|
142.43
|
|
|
165.27
|
|
|
142.43
|
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Earnings per share:
|
|
|
|
|
|
|
|
|
||||||||
Basic
|
|
$
|
0.23
|
|
|
$
|
0.73
|
|
|
$
|
0.55
|
|
|
$
|
1.24
|
|
Diluted
|
|
$
|
0.23
|
|
|
$
|
0.73
|
|
|
$
|
0.55
|
|
|
$
|
1.24
|
|
Award Type
|
|
Three Months Ended December 31, 2018
|
|
Nine Months Ended December 31, 2018
|
||
RSUs
|
|
0.73
|
|
|
0.32
|
|
|
|
|
|
|
|
|
As of December 31, 2018
|
||||||||||
(in millions)
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
Program assets
|
|
$
|
1,400
|
|
|
$
|
145
|
|
|
$
|
1,255
|
|
Software
|
|
83
|
|
|
47
|
|
|
36
|
|
|||
Developed technology
|
|
105
|
|
|
13
|
|
|
92
|
|
|||
Backlog
|
|
16
|
|
|
9
|
|
|
7
|
|
|||
Outsourcing contract costs
|
|
21
|
|
|
6
|
|
|
15
|
|
|||
Favorable leases
|
|
1
|
|
|
—
|
|
|
1
|
|
|||
Total intangible assets
|
|
$
|
1,626
|
|
|
$
|
220
|
|
|
$
|
1,406
|
|
|
|
As of March 31, 2018
|
||||||||||
(in millions)
|
|
Gross Carrying Value
|
|
Accumulated Amortization
|
|
Net Carrying Value
|
||||||
Program assets
|
|
$
|
900
|
|
|
$
|
69
|
|
|
$
|
831
|
|
Software
|
|
75
|
|
|
28
|
|
|
47
|
|
|||
Outsourcing contract costs
|
|
20
|
|
|
1
|
|
|
19
|
|
|||
Total intangible assets
|
|
$
|
995
|
|
|
$
|
98
|
|
|
$
|
897
|
|
Fiscal Year
|
|
(in millions)
|
|
|
Remainder of fiscal year 2019
|
|
$
|
48
|
|
2020
|
|
122
|
|
|
2021
|
|
99
|
|
|
2022
|
|
90
|
|
|
2023
|
|
86
|
|
|
Thereafter
|
|
961
|
|
|
Total
|
|
$
|
1,406
|
|
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and Health Care
|
|
Total
|
||||||
Balance as of March 31, 2018
|
|
$
|
977
|
|
|
$
|
1,045
|
|
|
$
|
2,022
|
|
Additions
|
|
1,156
|
|
|
83
|
|
|
1,239
|
|
|||
Allocations from DXC
|
|
11
|
|
|
—
|
|
|
11
|
|
|||
Balance as of December 31, 2018
|
|
$
|
2,144
|
|
|
$
|
1,128
|
|
|
$
|
3,272
|
|
|
|
Interest Rates
|
|
Maturities
|
|
December 31, 2018
(in millions)
|
||
Revolving Credit Facility
|
|
LIBOR + 1.50%
|
|
May 2023
|
|
$
|
—
|
|
Term Loan A Facilities (Tranche 1)
|
|
LIBOR + 1.375%
|
|
May 2021
|
|
312
|
|
|
Term Loan A Facilities (Tranche 2)
|
|
LIBOR + 1.50%
|
|
May 2023
|
|
1,608
|
|
|
Term Loan B Facility
|
|
LIBOR + 2.25%
|
|
May 2025
|
|
498
|
|
|
Subtotal senior secured credit facilities
|
|
|
|
|
|
2,418
|
|
|
Senior unsecured EDS Notes
|
|
7.45%
|
|
October 2029
|
|
66
|
|
|
Total debt
|
|
|
|
|
|
2,484
|
|
|
Less: current maturities of long-term debt, net
(1)
|
|
|
|
|
|
(79
|
)
|
|
Less: unamortized debt issuance costs and premiums
(2)
|
|
|
|
|
|
(21
|
)
|
|
Total long-term debt, net of current maturities
|
|
|
|
|
|
$
|
2,384
|
|
Fiscal Year
|
|
(in millions)
|
|
|
Remainder of fiscal year 2019
|
|
$
|
22
|
|
2020
|
|
88
|
|
|
2021
|
|
88
|
|
|
2022
|
|
399
|
|
|
2023
|
|
88
|
|
|
Thereafter
|
|
1,799
|
|
|
Total
|
|
$
|
2,484
|
|
Fiscal Year
|
|
(in millions)
|
|
|
Remainder of fiscal year 2019
|
|
$
|
51
|
|
2020
|
|
127
|
|
|
2021
|
|
79
|
|
|
2022
|
|
47
|
|
|
2023
|
|
12
|
|
|
Thereafter
|
|
1
|
|
|
Total minimum lease payments
|
|
317
|
|
|
Less: Amount representing interest and executory costs
|
|
28
|
|
|
Present value of net minimum lease payments
|
|
289
|
|
|
Less: Current capital lease liability
|
|
140
|
|
|
Non-current capital lease liability
|
|
$
|
149
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2018
|
||||
Service cost
|
|
$
|
—
|
|
|
$
|
—
|
|
Interest cost
|
|
5
|
|
|
11
|
|
||
Expected return on assets
|
|
(8
|
)
|
|
(17
|
)
|
||
Net periodic pension benefit
|
|
$
|
(3
|
)
|
|
$
|
(6
|
)
|
|
|
Rate
|
|
Benefit obligation:
|
|
|
|
Discount rate
|
|
4.3
|
%
|
Rate of increase in compensation levels
|
|
—
|
%
|
Net periodic pension cost:
|
|
|
|
Discount rate
|
|
4.3
|
%
|
Expected long-term rates of return on assets
|
|
7.3
|
%
|
Rates of increase in compensation levels
|
|
—
|
%
|
Jurisdiction
|
|
Tax Years Subject to Examination
|
U.S. Federal
|
|
2005 and forward
|
Various U.S. States
|
|
2003 and forward
|
|
|
Nine Months Ended
|
||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
||||
Cash paid for:
|
|
|
|
|
||||
Interest
(1)
|
|
$
|
84
|
|
|
$
|
7
|
|
Taxes on income, net of refunds
|
|
$
|
25
|
|
|
$
|
58
|
|
|
|
|
|
|
||||
Non-cash activities:
|
|
|
|
|
||||
Investing:
|
|
|
|
|
||||
Equipment acquired through capital lease obligations
|
|
$
|
104
|
|
|
$
|
117
|
|
Financing:
|
|
|
|
|
||||
Dividends declared but not yet paid
|
|
$
|
8
|
|
|
$
|
—
|
|
Stock issued for the acquisition of Vencore
|
|
$
|
578
|
|
|
$
|
—
|
|
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and Health Care
|
|
Total Reportable Segments
|
||||||
Three Months Ended December 31, 2018
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
709
|
|
|
$
|
366
|
|
|
$
|
1,075
|
|
Segment profit
|
|
$
|
85
|
|
|
$
|
26
|
|
|
$
|
111
|
|
Depreciation and amortization
(1)
|
|
$
|
34
|
|
|
$
|
42
|
|
|
$
|
76
|
|
|
|
|
|
|
|
|
||||||
Three Months Ended December 31, 2017
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
374
|
|
|
$
|
348
|
|
|
$
|
722
|
|
Segment profit
|
|
$
|
31
|
|
|
$
|
48
|
|
|
$
|
79
|
|
Depreciation and amortization
(1)
|
|
$
|
21
|
|
|
$
|
25
|
|
|
$
|
46
|
|
(in millions)
|
|
Defense and Intelligence
|
|
Civilian and Health Care
|
|
Total Reportable Segments
|
||||||
Nine Months Ended December 31, 2018
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
1,848
|
|
|
$
|
1,088
|
|
|
$
|
2,936
|
|
Segment profit
|
|
$
|
181
|
|
|
$
|
94
|
|
|
$
|
275
|
|
Depreciation and amortization
(2)
|
|
$
|
98
|
|
|
$
|
116
|
|
|
$
|
214
|
|
|
|
|
|
|
|
|
||||||
Nine Months Ended December 31, 2017
|
|
|
|
|
|
|
||||||
Revenue
|
|
$
|
1,051
|
|
|
$
|
1,053
|
|
|
$
|
2,104
|
|
Segment profit
|
|
$
|
81
|
|
|
$
|
147
|
|
|
$
|
228
|
|
Depreciation and amortization
(2)
|
|
$
|
54
|
|
|
$
|
62
|
|
|
$
|
116
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
||||||||
Total profit for reportable segments
|
|
$
|
111
|
|
|
$
|
79
|
|
|
$
|
275
|
|
|
$
|
228
|
|
Less:
|
|
|
|
|
|
|
|
|
||||||||
Stock-based compensation
|
|
4
|
|
|
4
|
|
|
7
|
|
|
4
|
|
||||
Restructuring costs
|
|
1
|
|
|
3
|
|
|
1
|
|
|
10
|
|
||||
Separation and integration-related costs
|
|
19
|
|
|
27
|
|
|
84
|
|
|
44
|
|
||||
Interest expense, net
|
|
37
|
|
|
—
|
|
|
84
|
|
|
7
|
|
||||
Other unallocated, net
|
|
2
|
|
|
—
|
|
|
(26
|
)
|
|
—
|
|
||||
Income before taxes
|
|
$
|
48
|
|
|
$
|
45
|
|
|
$
|
125
|
|
|
$
|
163
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year
(in millions)
|
|
Real Estate
|
|
Equipment
|
||||
Remainder of fiscal year 2019
|
|
$
|
11
|
|
|
$
|
5
|
|
2020
|
|
42
|
|
|
17
|
|
||
2021
|
|
33
|
|
|
6
|
|
||
2022
|
|
20
|
|
|
—
|
|
||
2023
|
|
15
|
|
|
—
|
|
||
Thereafter
|
|
11
|
|
|
—
|
|
||
Minimum fixed rentals
|
|
132
|
|
|
28
|
|
||
Less: Sublease rental income
|
|
(3
|
)
|
|
—
|
|
||
Totals
|
|
$
|
129
|
|
|
$
|
28
|
|
•
|
any issue that compromises our relationships with the U.S. federal government, or any state or local governments, or damages our professional reputation;
|
•
|
changes in the U.S. federal government, state and local governments’ spending and mission priorities that shift expenditures away from agencies or programs that we support;
|
•
|
any delay in completion of the U.S. federal government’s budget process;
|
•
|
failure to comply with numerous laws, regulations and rules, including regarding procurement, anti-bribery and organizational conflicts of interest;
|
•
|
failure by us or our employees to obtain and maintain necessary security clearances or certifications;
|
•
|
our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors’ protests of major contract awards received by us;
|
•
|
our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts;
|
•
|
problems or delays in the development, delivery and transition of new products and services or the enhancement of existing products and services to meet customer needs and respond to emerging technological trends;
|
•
|
failure of third parties to deliver on commitments under contracts with us;
|
•
|
misconduct or other improper activities from our employees or subcontractors;
|
•
|
delays, terminations, or cancellations of our major contract awards, including as a result of our competitors protesting such awards;
|
•
|
failure of our internal control over financial reporting to detect fraud or other issues;
|
•
|
failure to be awarded task orders under our indefinite delivery, indefinite quantity (“IDIQ”) contracts;
|
•
|
changes in government procurement, contract or other practices or the adoption by the government of new laws, rules and regulations in a manner adverse to us; and
|
•
|
the other factors described in Part I, Item 1A “Risk Factors” of Perspecta’s Annual Report on Form 10-K for the year ended March 31, 2018.
|
|
|
As of
|
||
(in millions)
|
|
December 31, 2018
|
||
Funded backlog
|
|
$
|
2,244
|
|
Unfunded backlog
|
|
8,186
|
|
|
Total contract value backlog
|
|
$
|
10,430
|
|
|
|
Three Months Ended
|
|||||||||||||
(in millions, except per-share amounts)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Change
|
|
Percentage Change
|
|||||||
Revenue
|
|
$
|
1,075
|
|
|
$
|
722
|
|
|
$
|
353
|
|
|
49
|
%
|
Total costs and expenses
|
|
1,027
|
|
|
677
|
|
|
350
|
|
|
52
|
%
|
|||
Income before income taxes
|
|
48
|
|
|
45
|
|
|
3
|
|
|
7
|
%
|
|||
Income tax expense (benefit)
|
|
10
|
|
|
(59
|
)
|
|
69
|
|
|
(117
|
)%
|
|||
Net income
|
|
$
|
38
|
|
|
$
|
104
|
|
|
$
|
(66
|
)
|
|
(63
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings per share
|
|
$
|
0.23
|
|
|
$
|
0.73
|
|
|
|
|
|
|
|
Nine Months Ended
|
|||||||||||||
(in millions, except per-share amounts)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Change
|
|
Percentage Change
|
|||||||
Revenue
|
|
$
|
2,936
|
|
|
$
|
2,104
|
|
|
$
|
832
|
|
|
40
|
%
|
Total costs and expenses
|
|
2,811
|
|
|
1,941
|
|
|
870
|
|
|
45
|
%
|
|||
Income before income taxes
|
|
125
|
|
|
163
|
|
|
(38
|
)
|
|
(23
|
)%
|
|||
Income tax expense (benefit)
|
|
34
|
|
|
(13
|
)
|
|
47
|
|
|
(362
|
)%
|
|||
Net income
|
|
$
|
91
|
|
|
$
|
176
|
|
|
$
|
(85
|
)
|
|
(48
|
)%
|
|
|
|
|
|
|
|
|
|
|||||||
Diluted earnings per share
|
|
$
|
0.55
|
|
|
$
|
1.24
|
|
|
|
|
|
|
|
Three Months Ended
|
|||||||||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Change
|
|
Percentage Change
|
|||||||
Defense and Intelligence
|
|
$
|
709
|
|
|
$
|
374
|
|
|
$
|
335
|
|
|
90
|
%
|
Civilian and Health Care
|
|
366
|
|
|
348
|
|
|
18
|
|
|
5
|
%
|
|||
Total
|
|
$
|
1,075
|
|
|
$
|
722
|
|
|
$
|
353
|
|
|
49
|
%
|
|
|
Nine Months Ended
|
|||||||||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Change
|
|
Percentage Change
|
|||||||
Defense and Intelligence
|
|
$
|
1,848
|
|
|
$
|
1,051
|
|
|
$
|
797
|
|
|
76
|
%
|
Civilian and Health Care
|
|
1,088
|
|
|
1,053
|
|
|
35
|
|
|
3
|
%
|
|||
Total
|
|
$
|
2,936
|
|
|
$
|
2,104
|
|
|
$
|
832
|
|
|
40
|
%
|
|
|
Three Months Ended
|
|
Percentage of Revenue
|
|
|
|
|
|||||||||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Change
|
|
Percentage Change
|
|||||||||
Costs of services (excludes depreciation and amortization and restructuring costs)
|
|
$
|
816
|
|
|
$
|
550
|
|
|
76
|
%
|
|
76
|
%
|
|
$
|
266
|
|
|
48
|
%
|
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)
|
|
76
|
|
|
51
|
|
|
7
|
%
|
|
7
|
%
|
|
25
|
|
|
49
|
%
|
|||
Depreciation and amortization
|
|
76
|
|
|
46
|
|
|
7
|
%
|
|
6
|
%
|
|
30
|
|
|
65
|
%
|
|||
Restructuring costs
|
|
1
|
|
|
3
|
|
|
—
|
%
|
|
—
|
%
|
|
(2
|
)
|
|
(67
|
)%
|
|||
Separation and integration-related costs
|
|
19
|
|
|
27
|
|
|
2
|
%
|
|
4
|
%
|
|
(8
|
)
|
|
(30
|
)%
|
|||
Interest expense, net
|
|
37
|
|
|
—
|
|
|
3
|
%
|
|
—
|
%
|
|
37
|
|
|
NM
|
|
|||
Other expense (income), net
|
|
2
|
|
|
—
|
|
|
—
|
%
|
|
—
|
%
|
|
2
|
|
|
NM
|
|
|||
Total costs and expenses
|
|
$
|
1,027
|
|
|
$
|
677
|
|
|
96
|
%
|
|
94
|
%
|
|
$
|
350
|
|
|
52
|
%
|
|
|
Nine Months Ended
|
|
Percentage of Revenue
|
|
|
|
|
|||||||||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Change
|
|
Percentage Change
|
|||||||||
Costs of services (excludes depreciation and amortization and restructuring costs)
|
|
$
|
2,226
|
|
|
$
|
1,632
|
|
|
76
|
%
|
|
78
|
%
|
|
$
|
594
|
|
|
36
|
%
|
Selling, general, and administrative (excludes depreciation and amortization and restructuring costs)
|
|
226
|
|
|
132
|
|
|
8
|
%
|
|
6
|
%
|
|
94
|
|
|
71
|
%
|
|||
Depreciation and amortization
|
|
214
|
|
|
116
|
|
|
7
|
%
|
|
6
|
%
|
|
98
|
|
|
84
|
%
|
|||
Restructuring costs
|
|
3
|
|
|
10
|
|
|
—
|
%
|
|
—
|
%
|
|
(7
|
)
|
|
(70
|
)%
|
|||
Separation and integration-related costs
|
|
84
|
|
|
44
|
|
|
3
|
%
|
|
2
|
%
|
|
40
|
|
|
91
|
%
|
|||
Interest expense, net
|
|
84
|
|
|
7
|
|
|
3
|
%
|
|
—
|
%
|
|
77
|
|
|
1,100
|
%
|
|||
Other expense (income), net
|
|
(26
|
)
|
|
—
|
|
|
(1
|
)%
|
|
—
|
%
|
|
(26
|
)
|
|
NM
|
|
|||
Total costs and expenses
|
|
$
|
2,811
|
|
|
$
|
1,941
|
|
|
96
|
%
|
|
92
|
%
|
|
$
|
870
|
|
|
45
|
%
|
|
|
As of
|
||
(in millions)
|
|
December 31, 2018
|
||
Cash and cash equivalents
|
|
$
|
100
|
|
Available borrowings under our Revolving Credit Facility
|
|
600
|
|
|
Total liquidity
|
|
$
|
700
|
|
|
|
Nine Months Ended
|
|
|
||||||||
(in millions)
|
|
December 31, 2018
|
|
December 31, 2017
|
|
Change
|
||||||
Net cash provided by operating activities
|
|
$
|
294
|
|
|
$
|
347
|
|
|
$
|
(53
|
)
|
Net cash used in investing activities
|
|
(1,300
|
)
|
|
(17
|
)
|
|
(1,283
|
)
|
|||
Net cash provided by (used in) financing activities
|
|
1,115
|
|
|
(330
|
)
|
|
1,445
|
|
|||
Net increase in cash and cash equivalents, including restricted
|
|
109
|
|
|
—
|
|
|
109
|
|
|||
Cash and cash equivalents, including restricted, at beginning of period
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Cash and cash equivalents, including restricted, at end of period
|
|
109
|
|
|
—
|
|
|
109
|
|
|||
Less restricted cash and cash equivalents included in prepaid expenses and other current assets
|
|
9
|
|
|
—
|
|
|
9
|
|
|||
Cash and cash equivalents at end of period
|
|
$
|
100
|
|
|
$
|
—
|
|
|
$
|
100
|
|
|
|
As of
|
||||||
(in millions)
|
|
December 31, 2018
|
|
March 31, 2018
|
||||
Short-term debt and current maturities of long-term debt
|
|
$
|
79
|
|
|
$
|
—
|
|
Long-term debt, net of current maturities
|
|
2,384
|
|
|
—
|
|
||
Total debt
|
|
$
|
2,463
|
|
|
$
|
—
|
|
|
|
As of
|
||||||
(in millions)
|
|
December 31, 2018
|
|
March 31, 2018
|
||||
Total debt and capital leases
|
|
$
|
2,752
|
|
|
$
|
304
|
|
Cash and cash equivalents
|
|
100
|
|
|
—
|
|
||
Net debt
(1)
|
|
$
|
2,652
|
|
|
$
|
304
|
|
|
|
|
|
|
||||
Total debt and capital leases
|
|
$
|
2,752
|
|
|
$
|
304
|
|
Equity
|
|
2,197
|
|
|
2,729
|
|
||
Total capitalization
|
|
$
|
4,949
|
|
|
$
|
3,033
|
|
|
|
|
|
|
||||
Debt-to-total capitalization
|
|
56
|
%
|
|
10
|
%
|
||
Net debt-to-total capitalization
(1)
|
|
54
|
%
|
|
10
|
%
|
Inception
|
|
Maturity
|
|
Notional Amount
(in millions)
|
|
Weighted-
Average Interest
Rate Paid
|
|||
May 2018
|
|
May 2021
|
|
$
|
400
|
|
|
2.57
|
%
|
May 2018
|
|
May 2022
|
|
500
|
|
|
2.61
|
%
|
|
October 2018
|
|
October 2022
|
|
200
|
|
|
2.92
|
%
|
|
May 2018
|
|
May 2023
|
|
500
|
|
|
2.68
|
%
|
|
Total / Weighted-average interest rate
|
|
|
|
$
|
1,600
|
|
|
2.66
|
%
|
(in millions)
|
|
Remainder of
Fiscal Year
2019
|
|
Fiscal Year
2020 - 2021
|
|
Fiscal Year
2022 - 2023
|
|
Thereafter
|
|
Total
|
||||||||||
Debt
(1)
|
|
$
|
22
|
|
|
$
|
176
|
|
|
$
|
487
|
|
|
$
|
1,799
|
|
|
$
|
2,484
|
|
Capitalized lease liabilities
(2)
|
|
51
|
|
|
206
|
|
|
59
|
|
|
1
|
|
|
317
|
|
|||||
Operating leases
|
|
16
|
|
|
98
|
|
|
35
|
|
|
11
|
|
|
160
|
|
|||||
Purchase obligations
(3)
|
|
65
|
|
|
71
|
|
|
—
|
|
|
—
|
|
|
136
|
|
|||||
Interest payments
(4)
|
|
28
|
|
|
226
|
|
|
187
|
|
|
90
|
|
|
531
|
|
|||||
Totals
(5)(6)
|
|
$
|
182
|
|
|
$
|
777
|
|
|
$
|
768
|
|
|
$
|
1,901
|
|
|
$
|
3,628
|
|
•
|
budgetary constraints, including Congressionally-mandated automatic spending cuts, affecting U.S. federal government spending generally, or specific agencies in particular, and changes in available funding;
|
•
|
a shift in expenditures away from agencies or programs that we support, including a shift in the focus of government research programs to short-term activities that are more urgent, thus reducing funding for forward-looking research;
|
•
|
U.S. government shutdowns due to a failure by elected officials to fully fund the government (such as the federal government shutdown in 2013 and the recent partial shutdown in December 2018 and January 2019, which could occur again), or weather-related closures in the Washington, D.C. area (such as that which occurred in the winter of 2016) and other potential delays in the appropriations process;
|
•
|
reduced U.S. federal government outsourcing of functions that we are currently contracted to provide, including as a result of increased insourcing by various U.S. federal 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;
|
•
|
further efforts to improve efficiency and reduce costs affecting government programs;
|
•
|
changes in government programs that we support or related requirements;
|
•
|
a continuation of recent efforts by the federal government to decrease spending for management support service contracts;
|
•
|
government agencies awarding contracts on a technically-acceptable/lowest-cost basis to reduce expenditures;
|
•
|
delays in the payment of our invoices by government payment offices;
|
•
|
an inability by the federal government to fund its operations as a result of a failure to increase the federal government’s debt ceiling, a credit downgrade of U.S. government obligations or for any other reason; and
|
•
|
changes in the political climate and general economic conditions, including a slowdown of the economy or unstable economic conditions and responses to conditions, such as emergency spending, that reduce funds available for other government priorities.
|
Period
|
|
Total Number
of Shares
Purchased
|
|
Average Price
Paid Per Share
|
|
Total Number
of Shares
Purchased as
Part of Publicly
Announced Plans
or Programs
|
|
Approximate
Dollar Value
of Shares that
May Yet be Purchased
Under the Plans or
Programs
(in millions)
|
||||||
October 1, 2018 to October 31, 2018
|
|
277,832
|
|
|
$
|
25.08
|
|
|
277,832
|
|
|
$
|
371
|
|
November 1, 2018 to November 30, 2018
|
|
575,976
|
|
|
$
|
21.34
|
|
|
575,976
|
|
|
$
|
358
|
|
December 1, 2018 to December 31, 2018
|
|
113,432
|
|
|
$
|
17.48
|
|
|
113,432
|
|
|
$
|
356
|
|
Total
|
|
967,240
|
|
|
$
|
21.96
|
|
|
967,240
|
|
|
|
|
|
|
Perspecta Inc.
|
|
|
|
|
Dated:
|
February 13, 2019
|
By:
|
/s/ William G. Luebke
|
|
|
Name:
|
William G. Luebke
|
|
|
Title:
|
Senior Vice President, Principal Accounting Officer and Controller
|
1 Year Perspecta Chart |
1 Month Perspecta Chart |
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