Recent Accounting Pronouncements (Tables)

6 Months Ended

Dec. 31, 2018

ASU 2014-09

Summary of Impact of Adoption of ASC 606 on Financial Statements

The impact of adoption on our consolidated balance sheet is as follows (in thousands):

	June 30, 2018 As Reported Under ASC 605		Adjustments Due to ASC 606		July 1, 2018 Balance Under ASC 606
Assets:
Accounts receivable, net	$	806,871	$	20,454	$	827,325
Prepaid expenses and other current assets		58,126		2,342		60,468
Other long-term assets		39,175		3,923		43,098
Liabilities and Shareholders' Equity:
Other accrued expenses and current liabilities		150,602		2,212		152,814
Deferred income taxes		200,880		6,639		207,519
Other long-term liabilities		85,187		98		85,285
Retained earnings		2,126,790		17,770		2,144,560

The table below presents the impact of adoption of ASC 606 on our consolidated statement of operations for the three and six months ended December 31, 2018 (in thousands):

	Three Months Ended							Six Months Ended
	December 31, 2018							December 31, 2018
	As Adjusted Under ASC 605		Effect of ASC 606			As Reported Under ASC 606		As Adjusted Under ASC 605		Effect of ASC 606			As Reported Under ASC 606
Revenue	$	1,177,635	$	4,006		$	1,181,641	$	2,336,337	$	11,168		$	2,347,505
Costs of revenue:
Direct costs		790,849		—			790,849		1,573,609		—			1,573,609
Indirect costs and selling expenses		270,997		(1,320	)		269,677		535,697		(1,263	)		534,434
Depreciation and amortization		18,852		—			18,852		37,599		—			37,599
Total costs of revenue		1,080,698		(1,320	)		1,079,378		2,146,905		(1,263	)		2,145,642
Income from operations		96,937		5,326			102,263		189,432		12,431			201,863
Interest expense and other, net		9,421		—			9,421		18,307		—			18,307
Income before taxes		87,516		5,326			92,842		171,125		12,431			183,556
Income tax expense		22,858		1,388			24,246		32,945		3,182			36,127
Net income	$	64,658	$	3,938		$	68,596	$	138,180	$	9,249		$	147,429
Basic earnings per share	$	2.60	$	0.16		$	2.76	$	5.57	$	0.37		$	5.95
Diluted earnings per share	$	2.55	$	0.16		$	2.71	$	5.44	$	0.36		$	5.81

For the three and six months ended December 31, 2018, the effect of ASC 606 was primarily related to the timing of award and incentive fee revenue recognition.

The table below presents the impact of adoption of ASC 606 on our consolidated balance sheet as of December 31, 2018 (in thousands):

	As Adjusted Under ASC 605		Effect of ASC 606		As Reported Under ASC 606
Assets:
Accounts receivable, net	$	987,494	$	29,474	$	1,016,968
Prepaid expenses and other current assets		67,077		2,640		69,717
Other long-term assets		34,109		4,888		38,997
Liabilities and Shareholders' Equity:
Other accrued expenses and current liabilities		156,538		3,823		160,361
Deferred income taxes		209,291		6,160		215,451
Other long-term liabilities		84,526		—		84,526
Retained earnings		2,264,970		27,019		2,291,989