Revenues

6 Months Ended

Jun. 30, 2023

Revenue from Contract with Customer [Abstract]

Revenues

Note 2–Revenues

Remaining Performance Obligations

Remaining performance obligations ("RPO") represent the expected value of exercised contracts, both funded and unfunded, less revenue recognized to date. RPO does not include unexercised option periods and future potential task orders expected to be awarded under indefinite delivery/indefinite quantity ("IDIQ") contracts, General Services Administration Schedule or other master agreement contract vehicles, with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future anticipated task orders.

As of June 30, 2023, we had $13.9 billion of RPO and expect to recognize approximately 63% and 78% over the next 12 months and 24 months, respectively, with the remainder to be recognized thereafter.

Disaggregation of Revenues

We disaggregate revenues by customer-type, contract-type and geographic location for each of our reportable segments.

Disaggregated revenues by customer-type were as follows:

	Three Months Ended June 30, 2023								Six Months Ended June 30, 2023
	Defense Solutions		Civil		Health		Total		Defense Solutions		Civil		Health		Total
	(in millions)
DoD and U.S. Intelligence Community	$	1,578	$	22	$	253	$	1,853	$	3,121	$	43	$	513	$	3,677
Other U.S. government agencies(1)	253		680		473		1,406		511		1,359		901		2,771
Commercial and non-U.S. customers	355		177		22		554		665		335		44		1,044
Total	$	2,186	$	879	$	748	$	3,813	$	4,297	$	1,737	$	1,458	$	7,492

	Three Months Ended July 1, 2022								Six Months Ended July 1, 2022
	Defense Solutions		Civil		Health		Total		Defense Solutions		Civil		Health		Total
	(in millions)
DoD and U.S. Intelligence Community	$	1,522	$	20	$	239	$	1,781	$	3,061	$	40	$	477	$	3,578
Other U.S. government agencies(1)	228		660		420		1,308		450		1,273		805		2,528
Commercial and non-U.S. customers	302		148		28		478		589		295		55		939
Total	$	2,052	$	828	$	687	$	3,567	$	4,100	$	1,608	$	1,337	$	7,045

(1) Includes federal government agencies other than the DoD and U.S. Intelligence Community, as well as state and local government agencies.

Disaggregated revenues by contract-type were as follows:

	Three Months Ended June 30, 2023								Six Months Ended June 30, 2023
	Defense Solutions		Civil		Health		Total		Defense Solutions		Civil		Health		Total
	(in millions)
Cost-reimbursement and fixed-price-incentive-fee	$	1,167	$	458	$	202	$	1,827	$	2,331	$	929	$	411	$	3,671
Firm-fixed-price	734		276		447		1,457		1,410		527		853		2,790
Time-and-materials and fixed-price-level-of-effort	285		145		99		529		556		281		194		1,031
Total	$	2,186	$	879	$	748	$	3,813	$	4,297	$	1,737	$	1,458	$	7,492

	Three Months Ended July 1, 2022								Six Months Ended July 1, 2022
	Defense Solutions		Civil		Health		Total		Defense Solutions		Civil		Health		Total
	(in millions)
Cost-reimbursement and fixed-price-incentive-fee	$	1,144	$	443	$	167	$	1,754	$	2,327	$	851	$	334	$	3,512
Firm-fixed-price	664		258		454		1,376		1,282		513		871		2,666
Time-and-materials and fixed-price-level-of-effort	244		127		66		437		491		244		132		867
Total	$	2,052	$	828	$	687	$	3,567	$	4,100	$	1,608	$	1,337	$	7,045

Disaggregated revenues by geographic location were as follows:

	Three Months Ended June 30, 2023								Six Months Ended June 30, 2023
	Defense Solutions		Civil		Health		Total		Defense Solutions		Civil		Health		Total
	(in millions)
United States	$	1,890	$	836	$	748	$	3,474	$	3,723	$	1,659	$	1,458	$	6,840
International	296		43		—		339		574		78		—		652
Total	$	2,186	$	879	$	748	$	3,813	$	4,297	$	1,737	$	1,458	$	7,492

	Three Months Ended July 1, 2022								Six Months Ended July 1, 2022
	Defense Solutions		Civil		Health		Total		Defense Solutions		Civil		Health		Total
	(in millions)
United States	$	1,789	$	789	$	687	$	3,265	$	3,599	$	1,530	$	1,337	$	6,466
International	263		39		—		302		501		78		—		579
Total	$	2,052	$	828	$	687	$	3,567	$	4,100	$	1,608	$	1,337	$	7,045

Revenues by customer-type, contract-type and geographic location exclude lease income of $25 million and $45 million for the three and six months ended June 30, 2023, respectively, and $30 million and $46 million for the three and six months ended July 1, 2022, respectively.

Contract Assets and Liabilities

Performance obligations are satisfied either over time as work progresses or at a point in time. Firm-fixed-price contracts are typically billed to the customer using milestone payments while cost-reimbursable and time and materials contracts are typically billed to the customer on a monthly or bi-weekly basis as indicated by the negotiated billing terms and conditions of the contract. As a result, the timing of revenue recognition, customer billings and cash collections for each contract results in a net contract asset or liability at the end of each reporting period.

Contract assets consist of unbilled receivables, which is the amount of revenue recognized that exceeds the amount billed to the customer. Unbilled receivables exclude amounts billable where the right to consideration is solely subject to the passage of time. Contract liabilities consist of deferred revenue, which represents cash advances received prior to performance for programs and billings in excess of revenue recognized.

The components of contract assets and contract liabilities consisted of the following:

	Balance sheet line item	June 30, 2023		December 30, 2022
		(in millions)
Contract assets - current:
Unbilled receivables	Receivables, net	$	984	$	1,010
Contract liabilities - current:
Deferred revenue(1)	Accounts payable and accrued liabilities	$	305	$	380
Contract liabilities - non-current:
Deferred revenue(1)	Other long-term liabilities	$	26	$	29

(1) Certain contracts record revenue net of cost of revenues, and therefore, the respective deferred revenue balance will not fully convert to revenue.

The decrease in deferred revenue was primarily due to the timing of revenue recognized during the period offset by advanced payments.

Revenue recognized for the three and six months ended June 30, 2023, of $32 million and $187 million, respectively, was included as a contract liability at December 30, 2022. Revenue recognized for the three and six months ended July 1, 2022, of $52 million and $240 million, respectively, was included as a contract liability at December 31, 2021.