10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended July 1, 2016

OR

o 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.: 001-37494

CSRA INC.

(Exact name of Registrant as specified in its charter)

Nevada	47-4310550
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)
3170 Fairview Park Drive
Falls Church, Virginia	22042
(Address of principal executive offices)	(zip code)
Registrant’s telephone number, including area code: (703) 641-2000

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.  xYesoNo

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files)xYes  oNo

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 and large accelerated filer” in Rule 12b-2 of the Exchange Act (Check one).

Large accelerated filer o Accelerated filero Non-accelerated filerx Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b of the Exchange Act).  oYes xNo

163,628,013 shares of Common Stock, $0.001 par value, were outstanding on August 5, 2016.

EXPLANATORY NOTE

On November 27, 2015, CSRA Inc. (“CSRA”) became an independent, publicly traded company through consummation of a spin-off by Computer Sciences Corporation (“CSC”) of the businesses constituting CSC’s North American Public Sector segment, which we refer to as the “Computer Sciences GS Business”, together with certain other assets and liabilities. We refer to this series of internal transactions as the “Internal Reorganization.” We refer to CSC’s distribution of the shares of CSRA common stock to CSC’s stockholders as the “Distribution” and to the Internal Reorganization and the Distribution collectively as the “Spin-Off.” On November 30, 2015, following two mergers (the “Mergers”) involving SRA Companies, Inc. (“SRA Parent”) and two wholly owned subsidiaries of CSRA, SRA International, Inc. (“SRA”) became an indirect wholly owned subsidiary of CSRA. For a more detailed description of the Spin-Off and Mergers, see CSRA’s Annual Report on Form 10-K for the year ended April 1, 2016.

Because the Spin-Off and the Mergers were not consummated until November 27, 2015 and November 30, 2015, respectively, the unaudited Consolidated and Condensed Financial Statements presented in this Quarterly Report on Form 10-Q (“Form 10-Q”) include only the legacy Computer Sciences GS Business activity for the period from April 4, 2015 to July 3, 2015 and CSRA including SRA from April 2, 2016 to July 1, 2016.

In this Form 10-Q, unless the context otherwise requires, “CSRA,” “Computer Sciences GS,” “we,” “our” and “us” refer to CSRA Inc. and its combined subsidiaries after giving effect to the Spin-Off for periods prior to the consummation of the Mergers; “CSRA,” “we,” “our” and “us” refer to CSRA Inc. and its combined subsidiaries, including the combined business of SRA, after giving effect to the Spin-Off and the Mergers for periods following the consummation of the Mergers.

Trademarks and Copyrights

We own or have rights to various trademarks, logos, service marks and trade names that we use in connection with the operation of our business. We also own or have the rights to copyrights that protect the content of our products. Solely for convenience, the trademarks, service marks, trade names and copyrights referred to in this Form 10-Q are listed without the ™, ® and © symbols, but such references do not constitute a waiver of any rights that might be associated with the respective trademarks, service marks, trade names and copyrights included or referred to in this Form 10-Q.

CSRA INC.

TABLE OF CONTENTS
		PAGE
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Consolidated and Condensed Balance Sheets as of July 1, 2016 and April 1, 2016	1
	Consolidated and Condensed Statements of Operations for the Three Months Ended July 1, 2016 and July 3, 2015	2
	Consolidated and Condensed Statements of Comprehensive Income for the Three Months Ended July 1, 2016 and July 3, 2015	3
	Consolidated and Condensed Statements of Cash Flows for the Three Months Ended July 1, 2016 and July 3, 2015	4
	Notes to Consolidated and Condensed Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	44
Item 4.	Controls and Procedures	45
PART II.	OTHER INFORMATION	45
Item 1.	Legal Proceedings	45
Item 1A.	Risk Factors	45
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Default Upon Senior Securities	46
Item 4.	Mine Safety Disclosures	46
Item 5.	Other Information	46
Item 6.	Exhibits	47

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

     CSRA INC.
CONSOLIDATED AND CONDENSED BALANCE SHEETS (unaudited)

		As of
(Dollars in millions)		July 1, 2016			April 1, 2016
Current assets
Cash and cash equivalents	$	133		$	130
Receivables, net of allowance for doubtful accounts of $25 and $21, respectively		743			751
Prepaid expenses and other current assets		110			123
Total current assets		986			1,004
Intangible and other assets
Goodwill		2,332			2,332
Customer-related and other intangible assets, net of accumulated amortization of $230 and $201, respectively		839			870
Software, net of accumulated amortization of $98 and $95, respectively		44			41
Other assets		69			69
Total intangible and other assets		3,284			3,312
Property and equipment, net of accumulated depreciation of $779 and $773, respectively		514			530
Total assets	$	4,784		$	4,846
Current liabilities
Accounts payable	$	185		$	170
Accrued payroll and related costs		187			200
Accrued expenses and other current liabilities		490			528
Current capital lease liability		48			42
Current maturities of long-term debt		66			128
Dividends payable		18			18
Total current liabilities		994			1,086
Long-term debt, net of current maturities		2,623			2,656
Noncurrent capital lease liability		96			109
Deferred income tax liabilities		156			163
Other long-term liabilities		765			742
Commitments and contingent liabilities (Note 15)
Equity
CSRA Stockholders’ Equity:
Common stock, $0.001 par value, 750,000,000 shares authorized, 163,603,851 and 162,925,821 shares issued, respectively and 163,489,212 and 162,925,821 shares outstanding, respectively		—			—
Additional paid-in capital		133			117
Accumulated earnings (deficit)		(25	)		(74	)
Accumulated other comprehensive income		13			21
Total CSRA stockholders’ equity		121			64
Noncontrolling interests		29			26
Total equity		150			90
Total liabilities and equity	$	4,784		$	4,846

See accompanying notes to Consolidated and Condensed Financial Statements (unaudited)

1

CSRA INC.

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (unaudited)

		Three Months Ended
(Dollars in millions, except per share amounts)		July 1, 2016		July 3, 2015
Revenue	$	1,254	$	957
Related-party revenue		—		2
Total revenue		1,254		959
Cost of services		991		773
Related-party cost of services		—		2
Total cost of services (excludes depreciation and amortization)		991		775
Selling, general and administrative expenses		56		41
Separation and merger costs		5		15
Depreciation and amortization		65		33
Interest expense, net		30		5
Other expense (income), net		1		(19	)
Total costs and expenses		1,148		850
Income before income taxes		106		109
Income tax expense		38		42
Net income		68		67
Less: noncontrolling interests		3		4
Net income attributable to CSRA common stockholders	$	65	$	63
Earnings per common share
Basic	$	0.40	$	0.45
Diluted	$	0.39	$	0.45
Common share information
Common shares outstanding for basic EPS		163,275,412		139,128,158
Dilutive effect of stock options and equity awards		1,663,182		—
Weighted average number of common shares outstanding - diluted		164,938,594		139,128,158
Cash dividend per common share	$	0.10	$	—

See accompanying notes to Consolidated and Condensed Financial Statements (unaudited)

2

CSRA INC.

CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

		Three Months Ended
(Dollars in millions)		July 1, 2016			July 3, 2015
Net income	$	68		$	67
Other comprehensive (loss) income, net of taxes, related to:
Amortization of prior service cost		(2	)		(1	)
Foreign currency translation adjustments		—			—
Unrealized loss on interest rate swaps		(6	)		—
Other comprehensive income (loss), net of taxes		(8	)		(1	)
Comprehensive income		60			66
Less: comprehensive income attributable to noncontrolling interest, net of taxes		3			4
Comprehensive income attributable to CSRA common stockholders	$	57		$	62

See accompanying notes to Consolidated and Condensed Financial Statements (unaudited)

3

CSRA INC.

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (unaudited)

(Dollars in millions)		Three Months Ended
		July 1, 2016			July 3, 2015
Cash flows from operating activities
Net income	$	68		$	67
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization		67			35
Stock-based compensation		3			(1	)
Excess tax benefit from stock compensation		(1	)		—
Net (gain) loss on dispositions of businesses and assets		2			(17	)
Changes in assets and liabilities, net of acquisitions and dispositions:
Decrease in assets		13			203
Decrease in liabilities		(2	)		(40	)
Other operating activities, net		6			—
Cash provided by operating activities		156			247
Cash flows from investing activities
Purchases of property and equipment		(34	)		(15	)
Proceeds from business dispositions		—			34
Other investing activities		(9	)		—
Cash provided by (used in) investing activities		(43	)		19
Cash flows from financing activities
Payments of lines of credit		(48	)		—
Payments of long-term debt		(50	)		—
Proceeds from stock options and other common stock transactions		8			—
Dividends paid		(18	)		—
Payments on lease liability		(7	)		(5	)
Net transfers to CSC		—			(259	)
Other financing activities		5			—
Cash used in financing activities		(110	)		(264	)
Net increase in cash and cash equivalents		3			2
Cash and cash equivalents at beginning of period		130			5
Cash and cash equivalents at end of period	$	133		$	7
Supplemental cash flow information:
Cash paid for income taxes	$	2		$	42
Cash paid for interest		28			5
Non-cash investing activities		13			9
Non-cash operating activities		4			—

See accompanying notes to Consolidated and Condensed Financial Statements (unaudited)

4

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 1—Description of the Business, Basis of Presentation and Recent Accounting Pronouncements

Description of the Business

CSRA Inc. (“CSRA” or the “Company”) is a provider of IT and professional services to U.S. government organizations. CSRA delivers IT, mission, and operations-related services across the U.S. federal government to the Department of Defense (“DoD”), the intelligence community and homeland security, civil and healthcare agencies, as well as to certain state and local government agencies through two business segments: (1) Defense and Intelligence and (2) Civil.

The Spin-Off and the Mergers

On November 27, 2015, Computer Sciences Corporation (“CSC” or “Parent”) completed the spin-off of CSRA, including the Computer Sciences GS Business to CSC shareholders of record (the “Spin-Off”). Following the Spin-Off, on November 30, 2015, CSRA also completed two mergers, which resulted in SRA Companies, Inc. (“SRA Parent”) merging with and into a wholly owned subsidiary of CSRA (the “Mergers”). As a result, SRA International Inc. (“SRA”) became an indirect wholly owned subsidiary of CSRA.

Basis of Presentation

The accompanying unaudited Consolidated and Condensed Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission, and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended April 1, 2016. The interim period unaudited Consolidated and Condensed Financial Statements are presented as described below.

Prior to the Spin-Off, the Company consisted of the business of CSC’s North American Public Sector segment and did not operate as a separate, stand-alone entity. Consequently, the period prior to the Spin-Off, as of and for the three months ended July 3, 2015, consists solely of the accounts and results of the Computer Sciences GS Business. The period subsequent to the Spin-Off and the Mergers, as of and for the three months ended July 1, 2016, consists of the consolidated accounts of CSRA and its wholly owned subsidiaries, which include the activity and operating results of SRA. All intercompany transactions and balances have been eliminated.

Certain information and disclosures normally required for annual financial statements have been condensed or omitted pursuant to 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 accompanying unaudited financial statements for the period prior to the Spin-Off are prepared on a carved-out and combined basis from the financial statements of CSC. Such carved-out and combined amounts were determined using the historical results of operations and carrying amounts of the assets and liabilities transferred to CSRA. Related-party transactions between CSRA and CSC or the Computer Sciences GS Business and other businesses of CSC are reflected as related-party transactions. For additional information, see Note 2—Related-Party Transactions and Corporate Allocations.

For the period prior to the Spin-Off, the unaudited Combined Condensed Financial Statements include all revenues and costs directly attributable to the Computer Sciences GS Business and an allocation of expenses related to certain CSC corporate functions, including, but not limited to, senior management, legal, human resources, finance, IT and other shared services. These expenses had been allocated to the Computer Sciences GS Business based on direct usage or benefit where identifiable, with the remainder allocated on a pro rata basis of revenues, headcount, square footage, number of transactions or other measures. The Computer Sciences GS Business considered these allocations to be a reasonable reflection of the utilization of services by, or benefit provided to it. However, the allocations may not be indicative of the actual expense that would have been incurred had the Computer Sciences GS Business operated as an independent, stand-alone entity for the period presented.

5

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Prior to the Spin-Off, CSC maintained various benefit and share-based compensation plans at a corporate level and other benefit plans at a subsidiary level. The employees of CSRA participated in those plans and a portion of the cost of those plans for the period prior to the Spin-Off is included in the unaudited Consolidated and Condensed Financial Statements for the period prior to the Spin-Off. However, the unaudited Combined Condensed Balance Sheets do not include any net benefit plan obligations unless the benefit plan covered only the Company’s active, retired and other former employees or any expense related to share­ based compensation plans. See Notes 11—Pension and Other Postretirement Benefit Plans and Note 12—Share Based Compensation Plans for further information about our benefit plans and share-based compensation, respectively.

For the period presented prior to the Spin-Off, the unaudited Combined and Condensed Financial Statements include current and deferred income tax expense that has been determined for the legacy Computer Sciences GS Business as if it were a separate taxpayer (i.e., following the separate return methodology).

CSRA reports its results based on a fiscal year convention that comprises four thirteen-week quarters. Every fifth year includes an additional week in the first quarter to prevent the fiscal year from moving from an approximate end of March date. For accounting purposes, the unaudited Consolidated and Condensed Financial Statements reflect the financial results of SRA for the three months ended June 30, 2016 combined with the Computer Sciences GS Business for the three months ended July 1, 2016.

CSRA’s income before income taxes and noncontrolling interest included gross favorable and unfavorable adjustments of $11 million and $(8) million, respectively, due to changes in estimated profitability on fixed price contracts accounted for under the percentage-of-completion method, for the three months ended July 1, 2016, compared to $22 million and $(5) million, respectively, for the three months ended July 3, 2015.

Unbilled recoverable amounts under contracts in progress do not have an allowance for credit losses and, therefore, any adjustments to unbilled recoverable amounts under contracts in progress related to credit quality would be accounted for as a reduction of revenue. Unbilled recoverable amounts under contracts in progress resulting from sales, primarily to the U.S. and other governments, that are expected to be collected after one year totaled $12.9 million and $14.4 million as of July 1, 2016 and April 1, 2016, respectively.

Depreciation expense was $32.4 million and $27.6 million for the three months ended July 1, 2016 and July 3, 2015, respectively.

Use of Estimates

GAAP requires management to make estimates and assumptions that affect certain amounts reported in the Consolidated and Condensed Financial Statements and accompanying notes. These estimates are based on management’s best knowledge of historical experience, current events and various other assumptions that management considers reasonable under the circumstances. Actual results could differ from those estimates. Amounts subject to significant judgment and/or estimates include, but are not limited to, determining the fair value of asset acquired and liabilities assumed, costs to complete fixed-price contracts, cash flows used in the evaluation of impairment of goodwill and other long-lived intangible assets, certain deferred costs, collectability of receivables, reserves for tax benefits and valuation allowances on deferred tax assets, loss accruals for litigation, and inputs used for computing share-based compensation and pension related liabilities.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. The accounting guidance for fair value measurements establishes a three level fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities.

6

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Level 2— Quoted prices for similar assets or liabilities or quoted market prices for identical or similar assets in markets that are not active.     

Level 3— Valuations derived from valuation techniques in which one or more significant inputs are observable.

Our assets and liabilities which are valued using the fair value measurement guidance, on a recurring basis, include pension assets and derivative instruments, consisting of interest rate swap contracts and total return swaps. Our pension assets are valued using model based pricing methods that use observable market data; as such these inputs are considered Level 2 inputs. The fair value of interest rate swaps is estimated based on valuation models that use observable interest rate yield curves as inputs. Total return swaps are settled on the last day of every fiscal month. Therefore, the value of any total return swaps outstanding as of any balance sheet date is not material. The inputs used to estimate the fair value of the Company's derivative instruments are classified as Level 2. No significant assets or liabilities are measured at fair value on a recurring basis using significant unobservable (Level 3) inputs.

Certain assets and liabilities are measured at fair value on a non-recurring basis. These include assets and liabilities acquired in a business combination, equity-method investments and long-lived assets, which would be recognized at fair value if deemed to be impaired or if reclassified as assets held for sale. The fair value in these instances would be determined using Level 3 inputs.

The Company’s financial instruments include cash, trade receivables, vendor payables, derivative financial instruments, and debt. As of July 1, 2016, the carrying value of cash, trade receivables, and vendor payables approximated their fair value. The carrying amounts of the Company’s financial instruments with short-term maturities are deemed to approximate their market values. The carrying amount of the Company’s long-term debt, excluding capital leases was $2.6 billion and $2.7 billion at July 1, 2016 and April 1, 2016, respectively, and approximated its fair value on July 1, 2016, based on recent trading activity. The fair value of long-term debt is estimated based on the current interest rates offered to the Company for instruments with similar terms and remaining maturities and are classified as Level 2.

Recent Accounting Pronouncements

New Accounting Standards

During the three months ended July 1, 2016, CSRA adopted the following Accounting Standard Updates (“ASUs”):

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) (“ASU 2016-09”), which simplifies several aspects of accounting for share-based payment award transactions related to accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification of employee taxes paid on the statements of cash flows when an employer withholds shares for tax-withholding purposes. The standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. At implementation of ASU 2016-09, a company may elect to adopt certain simplifications on a prospective or retrospective basis.

CSRA early adopted ASU 2016-09, effective for the period ended July 1, 2016. Certain of the simplification provisions were not applicable to CRSA. The primary impact of adoption was our election to no longer estimate forfeitures, but instead account for the forfeitures as they occur.  The change in accounting for forfeitures was applied on a modified retrospective basis; accordingly, a cumulative adjustment of $1.1 million was recognized as a reduction of accumulated earnings (deficit) upon adoption. The Company also adopted the simplification provision requiring recognition of excess tax benefits in the income statement as a discrete event and the provision related to the presentation of excess tax benefits and deficiencies within operating activities in the statement of cash flows on a prospective basis, beginning in the three months ended July 1, 2016. The adoption of this provision was not material to the Company’s financial results for the period.

7

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Standards Issued But Not Yet Effective

The following ASUs were recently issued but have not yet been adopted by CSRA:

In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard, ASC Topic 606, Revenue from Contracts with Customers that will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements. On July 9, 2015, the FASB approved a one-year deferral of the effective date, which for CSRA would make the standard effective at the start of fiscal year 2019 (April 1, 2018). The FASB provided an option that would permit us the ability to adopt the standard beginning fiscal year 2018 (April 1, 2017). Early adoption prior to fiscal year 2018 is not permitted. The new standard may be adopted either retrospectively or on a modified retrospective basis whereby the new standard would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to beginning retained earnings at the effective date for existing contracts with remaining performance obligations.

The new standard requires us to identify contractual performance obligations and determine when revenue should be recognized. This and other requirements could change the method or timing of revenue recognition for our firm-fixed-price and cost-reimbursable-plus-fee contract portfolio. As a result, we are applying an integrated approach to analyzing the standard’s impact on our contract portfolio, including a review of accounting policies and practices, evaluating differences from applying the requirements of the new standard to our contracts and business practices, and assessing the need for system changes or enhancements. As changes in estimated profit will be recognized in the period they are identified, rather than prospectively over the remaining contract term, the impact of revisions of contract estimates may be larger and potentially more variable from period to period. Anticipated losses on contracts will continue to be recognized in the period they are identified. While our assessment continues, we have not yet selected a transition date or method nor have we yet determined the effect of the adoption of this standard on our Consolidated and Condensed Financial Statements and, as a result, our evaluation of the effect of adoption will extend into future periods.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes the current guidance related to accounting for leases. The guidance requires lessees to recognize most leases on-balance sheet as a right of use asset and lease liability. ASU 2016-02 will also require expanded qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from CSRA leases. The standard is required to be adopted using the modified retrospective approach. The standard will be effective for the first interim period within annual periods beginning after December 15, 2019 with early adoption permitted. CSRA is currently evaluating the impact of adoption on CSRA’s Consolidated and Condensed Financial Statements.

Other recently issued ASUs effective after July 1, 2016 are not expected to have a material effect on CSRA’s Consolidated and Condensed Financial Statements.

8

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 2—Related-Party Transactions and Corporate Allocations

Corporate Allocations

The unaudited Consolidated and Condensed Financial Statements include an allocation of general corporate expenses from CSC for the period prior to Spin-Off. The financial information in these unaudited Consolidated and Condensed Financial Statements does not necessarily include all the expenses that would have been incurred by CSRA had it been a separate, stand-alone entity during that time. The management of CSRA considered these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, it. The allocation methods include relative headcount, actual services rendered and relative space utilization. Allocations for management costs and corporate support services provided to CSRA totaled $56.6 million for the three months ended July 3, 2015. This amount includes costs for corporate functions, including, but not limited to, senior management, legal, human resources, finance, IT and other shared services. Following the Spin-Off, CSRA performs all corporate functions that were previously performed by CSC.

Transition Agreements

In connection with the separation and distribution, CSRA entered into certain agreements that govern the respective rights and responsibilities between CSC and CSRA. CSRA entered into an Intellectual Property Matters Agreement with CSC that governs the respective rights and responsibilities between CSRA and CSC with respect to intellectual property owned or used by each of the companies. Pursuant to the Intellectual Property Matters Agreement, CSC granted CSRA a perpetual, royalty-free, non-assignable license to certain know-how, certain software products, trademarks and workflow and design methodologies.

CSRA pays CSC an annual net maintenance fee of $30.0 million per year for five years in exchange for maintenance and support of products licensed from CSC. On December 9, 2015, CSRA paid the maintenance fee for year one, which is included in Prepaid expenses and other current assets in the unaudited Consolidated and Condensed Balance Sheets and amortized on a straight line basis over one year. During the three months ended July 1, 2016, CSRA amortized $7.5 million, which is included in Selling, general and administrative (“SG&A”) in the unaudited Consolidated and Condensed Statements of Operations.

CSRA entered into a Tax Matters Agreement with CSC that governs the respective rights, responsibilities and obligations of CSC and CSRA with respect to all tax matters. CSRA has joint and several liability with CSC to the IRS for the consolidated U.S. Federal income taxes of the CSC consolidated group relating to the taxable periods in which we were part of that group. During the three months ended July 1, 2016, CSRA did not incur charges payable to CSC under the Tax Matters Agreement.

CSRA entered into a Real Estate Matters Agreement with CSC that governs the respective rights and responsibilities between CSRA and CSC following the Spin-Off with respect to certain real property used by CSRA. For the three months ended July 1, 2016, the rental income from CSC associated with the Real Estate Matters Agreement was not significant.

Note 3—Acquisitions and Divestitures

There were no acquisitions or divestitures of other businesses during the three months ended July 1, 2016. There were no acquisitions of other businesses during the three months ended July 3, 2015.

9

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Fiscal 2016 Divestiture

On April 27, 2015, the Computer Sciences GS Business divested its wholly owned subsidiary, Welkin Associates Limited (“Welkin”), a provider of systems engineering and technical assistance services to the intelligence community and other U.S. Department of Defense clients. The Computer Sciences GS Business received consideration of $34.0 million, and recorded a pre-tax gain on the sale of $18.5 million, which was included in Other expense (income), net in the Consolidated and Condensed Statements of Operations for the three months ended July 3, 2015. Included in the divested net assets of $13.8 million was $10.7 million of goodwill and transaction costs of $1.7 million. The divestiture did not qualify to be presented as discontinued operations as it did not represent a strategic shift that would have a major effect on the Computer Sciences GS Business’s operations and financial results.

Fiscal 2016 Acquisition

As discussed in Note 1—Description of the Business, Basis of Presentation and Recent Accounting Pronouncements, on November 30, 2015, CSRA completed its previously announced Mergers which resulted in SRA Parent merging with and into a wholly owned subsidiary of CSRA. As a result, SRA became an indirect, wholly owned subsidiary of CSRA.

The Mergers are reflected in CSRA’s financial statements using the acquisition method of accounting, with CSRA being considered the accounting acquirer of SRA. The total merger consideration (“Merger Consideration”) transferred was $2.3 billion, which consisted of (1) $390.0 million in cash (gross of cash acquired of $48.3 million), (2) 25,170,564 shares of CSRA common stock representing in the aggregate 15.32% of the total number of shares of CSRA common stock outstanding, (3) $1.1 billion related to SRA debt and (4) $29.9 million of acquiree-related transaction costs. The fair market value of shares was determined based on a volume-weighted average price of $30.95 per CSRA share on November 30, 2015, the first day of CSRA’s regular-way trading on the NYSE.

CSRA recorded, on a preliminary basis, the assets acquired and liabilities assumed at their estimated fair value, with the difference between the fair value of the net assets acquired and the purchase consideration reflected as goodwill. See Note 7—Goodwill and Other Intangible Assets for further discussion of the measurement considerations for acquired intangible assets. The following table reflects the preliminary fair values of assets acquired and liabilities assumed as of November 30, 2015 (including adjustments subsequent to closing):

Preliminary allocation (in millions):
Cash, accounts receivable and other current assets	$	302
Property, equipment and other long-term assets		47
Intangibles—customer relationships, backlog and other intangibles assets		891
Accounts payable and other current liabilities		(193	)
Other long-term liabilities		(26	)
Deferred tax liabilities		(261	)
Total identified net assets acquired		760
Goodwill		1,540
Estimated total purchase consideration and liabilities paid at closing	$	2,300

In the fourth quarter of fiscal year 2016, the Company made certain adjustment to provisional amounts previously recognized, which resulted in a $12.3 million reduction of the goodwill, which are reflected in the table above. No adjustments to the previously recorded fair values of the acquired assets and liabilities were made during the three months ended July 1, 2016. The goodwill recognized in the acquisition is attributable to the intellectual capital, the acquired assembled work force, and expected cost synergies, none of which qualify for recognition as a separate intangible asset. The goodwill is not expected to be deductible for tax purposes. Goodwill arising from the acquisition has been allocated on a preliminary basis to CSRA’s reporting units based on the relative fair value of assets acquired. The resulting preliminary allocation to CSRA’s reportable segments was as follows: $334.9 million allocated to Defense and Intelligence and $1.2 billion allocated to Civil.

10

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

The fair values of assets acquired and liabilities assumed were based on valuation estimates and assumptions that are subject to change and could result in material changes.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents results as if the Spin-Off and the Mergers and the related financing had occurred prior to April 3, 2015. The historical consolidated financial information of CSRA and SRA has been adjusted in the pro forma information to give effect to the events that are (1) directly attributable to the transactions, (2) factually supportable and (3) expected to have a continuing impact on the consolidated results. The consolidated financial information of SRA includes merger and integration costs that are not expected to recur and impact the consolidated results over the long term. The unaudited pro forma results do not reflect future events that have occurred or may occur after the transactions, including but not limited to, the impact of any actual or anticipated synergies expected to result from the Mergers. Accordingly, the unaudited pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected prior to April 3, 2015, nor is it necessarily an indication of future operating results.

	Three Months Ended July 1, 2016
(Dollars in millions, except per share amounts)		CSRA Three Months Ended July 1, 2016		Effects of Spin-Off		Effects of Mergers (a)		Pro Forma for Spin-Off and Merger
Revenue	$	1,254	$	—	$	—	$	1,254
Income (loss) attributable to CSRA Shareholders		65		—		3		68
Income per common share:
Basic	$	0.40					$	0.42
(a) Income from continuing operations effected for the Merger excludes $3 million, net of tax, of non-recurring costs incurred to give effect to the merger of SRA and CSRA.

	Three Months Ended July 3, 2015
(Dollars in millions, except per share amounts)		Historical Computer Sciences GS Three Months Ended July 3, 2015		Historical SRA Three Months Ended June 30, 2015		Effects of Spin-Off		Effects of Merger			Pro Forma for Spin-Off and Merger
Revenue	$	959	$	359	$	—	$	(1	)	$	1,317
Income (loss) attributable to Parent		63		1		13		10			87
Income (loss) per common share:
Basic	$	0.45								$	0.53

Note 4—Earnings Per Share

On November 27, 2015, the date that CSRA’s common stock was distributed to CSC shareholders in the Spin-Off, CSRA had 139,128,158 common shares outstanding. The calculation of both basic and diluted earnings per share for the three months ended July 3, 2015 utilized this number of common shares because at that time, CSRA did not operate as a separate, stand-alone entity, and no equity-based awards were outstanding in the period.

The calculation of basic earnings per share for the three months ended July 1, 2016 utilized 163,275,412 sharesbased on the weighted-average shares outstanding during the period. The calculation of diluted earnings per share for the three months ended July 1, 2016 utilized 164,938,594, reflecting the dilutive impact of 1,663,182 shares of outstanding stock options, restricted stock units, and performance-based stock units issued or granted. The computation of diluted earnings per share excluded stock options and restricted stock units, whose effect, if

11

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

included, would have been anti-dilutive. The number of shares related to such stock options was 2,194,894 for the three months ended July 1, 2016.

Note 5—Sale of Receivables

CSRA is the seller of certain accounts receivable under a Master Accounts Receivable Purchase Agreement (the “Purchase Agreement”) that was entered into on April 21, 2015 with the Royal Bank of Scotland, PLC (“RBS”), as Purchaser, along with Mitsubishi UFJ Financial Group Ltd, and Bank of Nova Scotia, each as a Participant, for the continuous non-recourse sale of CSRA’s eligible trade receivables.

The Purchase Agreement with RBS was subsequently amended, and RBS assigned its rights as a purchaser to The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia and Mizuho Bank, Ltd., each as a Purchaser. The amended agreement also converted the receivables purchase facility (the “Facility”) to a committed facility and extended the initial term to a two-year period.

Under the Facility, CSRA sells eligible receivables, including billed receivables and certain unbilled receivables arising from “cost plus fixed fee” and “time and materials” contracts up to $450.0 million outstanding at any one time. CSRA has no retained interests in the transferred receivables and only performs collection and administrative functions for the Purchaser for a servicing fee.

At the start of the first quarter of fiscal year 2017, SRA discontinued selling receivables under its separate accounts receivable purchase agreement. The SRA accounts receivable agreement was terminated as of June 27, 2016 and, at that time, SRA became an additional seller under the Purchase Agreement.

CSRA accounts for these receivable transfers as sales under ASC 860, Transfers and Servicing, and de-recognizes the sold receivables from its unaudited Consolidated and Condensed Balance Sheets. The fair value of the sold receivables approximated their book value due to their short-term nature. CSRA estimated that its servicing fee was at fair value and, therefore, no servicing asset or liability related to these services was recognized as of July 1, 2016 and April 1, 2016, respectively.

During the three months ended July 1, 2016, CSRA sold $468.3 million and $227.3 million, respectively, of billed and unbilled receivables. Collections corresponding to these receivable sales were $579.4 million for the three months ended July 1, 2016. As of July 1, 2016, there was $13.2 million of cash collected by CSRA but not remitted to purchasers. CSRA incurred purchase discount and administrative fees of $0.6 million for the three months ended July 1, 2016. These fees were recorded within Other expense (income), net in the unaudited Consolidated and Condensed Statements of Operations.

Total receivables sold, net of collections and fees related to accounts receivable sales, resulted in increased cash flow of $115.6 million for the three months ended July 1, 2016. The net cash proceeds under the Facility are reported as operating activities in the unaudited Consolidated and Condensed Statements of Cash Flows because both cash received from purchases and cash collections are not subject to significant interest rate risk.

Concentrations of Risk

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. government agencies and prime contractors under contracts with the U.S. government. The Company continuously reviews its accounts receivable and records provisions for doubtful accounts as needed.

12

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 6—Derivative Instruments

Derivatives Designated for Hedge Accounting

The Company utilizes derivative financial instruments to manage interest rate risk related to its Term Loan A Facilities. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. As of both July 1, 2016 and April 1, 2016, the Company had outstanding interest rate derivatives with a notional value of $1.4 billion, which were designated as a cash flow hedge of interest rate risk.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated other comprehensive income (“AOCI”), net of taxes, and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The Company reclassified $2.9 million of interest rate expense from AOCI into earnings in the Consolidated and Condensed Statements of Operations for the three months ending July 1, 2016. During the next twelve months, the Company estimates that approximately $6.6 million, net of tax, will be reclassified from AOCI into earnings.

The fair value of the Company’s derivative financial instruments was a liability of $21.9 million and $11.1 million as of July 1, 2016 and April 1, 2016, respectively. These derivative instruments are classified by their short- and long-term components based on the fair value of the anticipated timing of their cash flows. The current portion is included in the Accrued expenses and other current liabilities and the long-term portion is included in Other long-term liabilities in the Consolidated and Condensed Balance Sheets.

The Company has agreements with each of its interest rate swap counterparties that contain a provision providing that the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.

Derivatives Not Designated for Hedge Accounting

Total Return Swaps

The Company utilizes total return swap derivative contracts to manage exposure to market volatility of the notional investments underlying the Company’s deferred compensation obligations. These arrangements are entered into monthly and are settled on the last day of every fiscal month. For accounting purposes, these derivatives are not designated as hedges. As changes in the fair value of the deferred compensation liabilities are recognized in Cost of services and Selling, general and administrative expenses, so too are the changes in the fair value of the total return swaps derivative contracts. The Company recorded $0.1 million of loss attributable to the total return swaps in the Consolidated and Condensed Statements of Operations for the three months ended July 1, 2016.

Concentrations of Risk

The Company is subject to counterparty risk in connection with its interest rate swap derivative contracts. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The Company mitigates this credit risk by entering into agreements with credit-worthy counterparties. As of July 1, 2016 there was one counterparty with greater than a 10% concentration of our total exposure.

13

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 7—Goodwill and Other Intangible Assets

Goodwill

In November 2015, CSRA recorded $1.5 billion of goodwill acquired from the SRA acquisition, which was allocated to each reportable segment based on the relative fair value of net assets acquired. There were no changes in the balance of goodwill or the allocations to the segments during the three months ended July 1, 2016.

Testing for Goodwill Impairment

CSRA tests goodwill for impairment on an annual basis, as of the first day of the second fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. CSRA first assesses qualitative factors to determine whether events or circumstances existed that would lead CSRA to conclude that it is more likely than not that the fair value of any of its reporting units was below their carrying amounts. If CSRA determines that it is not more likely than not, then proceeding to step one of the two-step goodwill impairment test is not necessary.

As of July 1, 2016, CSRA assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below its carrying amount and require goodwill to be tested for impairment. CSRA determined that there have been no such indicators, and therefore, it was unnecessary to perform an interim goodwill impairment assessment as of July 1, 2016. Annual testing for goodwill impairment will occur during the second quarter of fiscal year 2017.

Other Intangible Assets

On November 30, 2015, CSRA acquired $891 million of other intangible assets, as described in Note 3—Acquisitions and Divestitures, which consisted of customer relationships intangibles, backlog, and technology. Acquired intangible assets have been recorded at their preliminary estimated fair value through the use of various discounted cash flow valuation techniques. These valuation techniques incorporated Level 3 inputs as described under the fair value hierarchy of ASC 820, Fair Value Measurements (“ASC 820”). These unobservable inputs reflect CSRA’s own assumptions about which assumptions market participants would use in pricing an asset on a non-recurring basis.

14

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

A summary of amortizing intangible assets is as follows:

		As of
		July 1, 2016
(Dollars in millions)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Customer-related intangibles	$	953		(144	)		809
Backlog		65		(38	)		27
Other intangible assets		51		(48	)		3
Software		142		(98	)		44
Total intangible assets	$	1,211	$	(328	)	$	883

		As of
		April 1, 2016
(Dollars in millions)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Customer-related intangibles	$	954	$	(133	)	$	821
Backlog		65		(22	)		43
Other intangible assets		52		(46	)		6
Software		136		(95	)		41
Total intangible assets	$	1,207	$	(296	)	$	911

Customer-related intangibles, backlog, and software are amortized to expense. Amortization expense for the three months ended July 1, 2016 and July 3, 2015 was $32.6 million and $7.6 million, respectively. Other intangible assets, which consist of contract-related intangibles, are amortized as a reduction to revenues and included in Depreciation and amortization in the Consolidated and Condensed Statements of Cash Flows. Amortization as a reduction to revenues for the three months ended July 1, 2016 and July 3, 2015 was $2.3 million in both periods.

As of July 1, 2016, estimated amortization related to intangible assets for the remainder of fiscal year 2017 is $68.6 million, and for each of the fiscal years 2018, 2019, 2020 and 2021, is as follows: $63.5 million, $72.8 million, $66.5 million and $60.6 million, respectively.

Purchased and internally developed software (for both external and internal use), net of accumulated amortization, consisted of the following:

		As of
(Dollars in millions)		July 1, 2016		April 1, 2016
Purchased software	$	37	$	40
Internally developed software for external use		1		1
Internally developed software for internal use		6		—
Total software	$	44	$	41

Amortization expense related to purchased software was $3.6 million and $3.5 million, for the three months ended July 1, 2016 and July 3, 2015, respectively. Amortization expense related to internally developed software for external use was $0.2 million and $0.3 million, for the three months ended July 1, 2016 and July 3, 2015, respectively. Amortization expense related to internally developed software for internal use was $0.2 million and $0.1 million for the three months ended July 1, 2016 and July 3, 2015, respectively.

15

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

As of July 1, 2016, estimated amortization related to purchased and internally developed software for the remainder of fiscal 2017 is $5.6 million, and for each of the fiscal years 2018, 2019, 2020 and 2021, is as follows: $10.3 million, $10.7 million, $7.8 million and $5.7 million, respectively.

Note 8—Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

		As of
(Dollars in millions)		July 1, 2016		April 1, 2016
Accrued contract costs	$	223	$	248
Deferred revenue		153		140
Accrued expenses		104		132
Other		10		8
Total	$	490	$	528

Note 9—Debt

CSRA maintains the following debt facilities: (1) a senior secured revolving credit facility (the “Revolving Credit Facility”) with a committed borrowing capacity of $700 million, (2) a senior secured tranche A1 Term loan facility (the “Tranche A1 Facility”), (3) a senior secured tranche A2 Term loan facility (the “Tranche A2 Facility” and, together with the Tranche A1 Facility, the “Term Loan A Facilities”) and (4) a senior secured term loan B facility (the “Term Loan B Facility” and, together with the Term Loan A Facilities, the “Term Loan Facilities”).

The following is a summary of CSRA’s outstanding debt as of July 1, 2016 and April 1, 2016:

		July 1, 2016			April 1, 2016
Revolving credit facility, due November 2020	$	—		$	50
Tranche A1 facility, due November 2018		590			600
Tranche A2 facility, due November 2020		1,407			1,432
Term Loan B facility, due November 2022		735			748
Capitalized lease liability		144			151
Total debt		2,876			2,981
Less: unamortized debt issuance costs		(43	)		(46	)
Less: current portion of long-term debt and capitalized lease liability		(114	)		(170	)
Total long-term debt, net of current maturities (1)	$	2,719		$	2,765
(1) As of July 1, 2016, the fair value of the Company’s debt, based on recent trading activity, approximated carrying value. We determined the fair value of our long-term debt using Level 2 inputs, in which fair value is generally estimated based on quoted market prices for identical or similar instruments.

During the first quarter of fiscal 2017 and fourth quarter of fiscal 2016, the Company made repayments of $50.0 million and $150.0 million, respectively, on the Revolving Credit Facility. Pursuant to the terms of the Term Loan Facilities agreements, CSRA paid $48.0 million related to FY16 excess cash flow during the first quarter of fiscal 2017, which was allocated as follows: (1) $10.4 million to the Tranche A1 Facility, (2) $24.7 million to the Tranche A2 Facility, and (3) $12.9 million to the Term Loan B Facility.

CSRA incurred costs in connection with the issuance of its Term Loan Facilities, which are amortized using the effective interest method over the life of the respective loans. Unamortized debt issuance costs related to the

16

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Revolving Credit Facility are recorded with the carrying value of the debt and are amortized using the straight-line method. During the three months ended July 1, 2016, $0.4 million and $2.4 million of costs for the Revolving Credit Facility and Term Loan Facilities, respectively, were amortized and reflected in Interest expense, net in the unaudited Consolidated and Condensed Statements of Operations.

Expected maturities of long-term debt, excluding future minimum capital lease payments for fiscal years subsequent to July 1, 2016, are as follows:

Fiscal Year		Amount (in Millions)
2017	$	48
2018		75
2019		670
2020		80
2021		1,149
Thereafter		710
Total	$	2,732

CSRA’s long-term debt facilities contain representations, warranties, and covenants customary for arrangements of these types, as well as customary events of default. CSRA was in compliance with all financial covenants associated with its borrowings as of July 1, 2016.

Note 10—Income Taxes

CSRA's effective tax rate (“ETR”) was 35.7% for the three months ended July 1, 2016 and 38.8% for the three months ended July 3, 2015. The lower ETR for the three months ended July 1, 2016 months compared to the three months ended July 3, 2015 was due to the addition of beneficial stock compensation deductions and the absence of adjustments related to the carve-out approach used for tax purposes prior to the Spin-Off in fiscal year 2016.

Our Tax Matters Agreement, entered into with CSC in connection with the Spin-Off, states each company’s rights and responsibilities with respect to payment of taxes, tax return filings and control of tax examinations. Except for historic SRA tax liabilities and certain separate state liabilities, we are generally only responsible for taxes allocable to periods (or portions of periods) beginning after the Spin-Off. Prior periods included uncertain tax positions allocated from CSC to CSRA on a stand-alone basis that are not reflected in the post-Spin-Off period.

CSRA is currently under examination in several tax jurisdictions. As a result of the Mergers, the tax years that remain subject to examination in certain of CSRA’s major tax jurisdictions are as follows:

Jurisdiction:	Tax Years that Remain Subject to Examination (Fiscal Year Ending):
United States - federal	2008 and forward
United States - various states	2008 and forward

The Internal Revenue Service (“IRS”) is currently examining SRA’s federal income tax return for 2011. The IRS has contested a $136.7 million worthless stock deduction for a disposed subsidiary in that period. CSRA believes its tax positions are appropriate and is prepared to defend them vigorously. Furthermore, pursuant to the Merger Agreement, SRA obtained an insurance policy limiting the exposure related to this position. It is reasonably possible that changes to CSRA’s unrecognized tax benefits could be significant; however, due to the uncertainty

17

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

regarding the timing of completion of audits and possible outcomes, a current estimate of the range of increases or decreases that may occur within the next 12 months is not expected to be material.

Note 11—Pension and Other Post-retirement Benefit Plans

Certain employees of CSRA and its subsidiaries may be participants in employer-sponsored defined benefit and defined contribution plans. CSRA’s defined benefit plans included both pension and other post-retirement benefit (“OPEB”) plans. As discussed in Note 1 — Description of the Business, Basis of Presentation and Recent Accounting Pronouncements, on November 27, 2015, CSC completed the Spin-Off of CSRA, including the Computer Sciences GS Business. Prior to the Spin-Off date, the Computer Sciences GS Business recorded the assets, liabilities, and service costs for current employees for the single employer pension and OPEB plans in the unaudited Consolidated and Condensed Financial Statements for the period ended July 3, 2015. For multi-employer plans, the Computer Sciences GS Business recorded the service cost related to their current employees in the unaudited Consolidated and Condensed Financial Statements for the period ended July 3, 2015. Subsequent to the Spin-Off date, all pension and OPEB plan assets, liabilities and services costs related to current employees were fully absorbed by CSRA.

Defined Benefit Pension Plans

The assets and liabilities for the plans as well as service and interest costs related to current employees are reflected in CSRA’s unaudited Consolidated and Condensed Financial Statements. The largest U.S. defined benefit pension plan was frozen in fiscal 2010 for most participants.

The net periodic pension benefit for CSRA pension plans includes the following components:

Net periodic pension costs (dollars in millions)		Three Months Ended
		July 1, 2016			July 3, 2015
Service cost		3			—
Interest cost	$	26		$	1
Expected return on assets		(49	)		(1	)
Net periodic pension benefit	$	(20	)	$	—

The following table provides the pension plans’ projected benefit obligations, assets, and a statement of their funded status:

		As of
(Dollars in millions)		July 1, 2016			April 1, 2016
Net benefit obligation	$	(3,209	)	$	(3,222	)
Net plan assets		2,594			2,585
Net unfunded status	$	(615	)	$	(637	)

CSRA contributed $2.1 million to the defined benefit pension plans during the three months ended July 1, 2016 for the funding of benefit payments made to plan participants. CSRA expects to make $6.2 million of additional contributions during the remainder of fiscal year 2017 for the funding of participants’ benefit payments.

18

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Other Postretirement Benefit Plans

The assets and liabilities for the OPEB plans as well as service costs related to current employees are reflected in CSRA’s unaudited Consolidated and Condensed Financial Statements. CSRA’s financial statements reflect the service costs related to current employees of the business and the assets and liabilities for the plans. CSRA provides subsidized healthcare, dental and life insurance benefits for certain U.S. employees and retirees, primarily for individuals employed prior to August 1992.

Net periodic postretirement benefit costs (in millions)		Three Months Ended
		July 1, 2016			July 3, 2015
Service cost	$	—		$	—
Interest cost		1			—
Expected return on assets		(1	)		—
Amortization of prior service benefit		(3	)		(1	)
Net periodic (benefit) cost	$	(3	)	$	(1	)

The following table provides the OPEB plans’ projected benefit obligations, assets, and a statement of their funded status:

		As of
(Dollars in millions)		July 1, 2016			April 1, 2016
Net benefit obligation	$	(92	)	$	(93	)
Net plan assets		75			76
Net unfunded status	$	(17	)	$	(17	)

CSRA contributed $0.4 to a supplemental executive retirement plan during the three months ended July 1, 2016. CSRA expects to make $1.1 million of additional contributions to this plan during the remainder of fiscal year 2017 for the funding of participants’ benefit payments.

Note 12—Share-Based Compensation Plans

Employee Incentives

Prior to the Spin-Off, CSC maintained various share-based compensation plans at a corporate level and other benefit plans at a subsidiary level. The employees of the Computer Sciences GS Business participated in those programs and a portion of the cost of those plans for the period prior to the Spin-Off is included in the unaudited Consolidated and Condensed Financial Statements.

On November 27, 2015, CSRA became an independent company through CSC’s consummation of the Spin-Off. Historically, CSC had two stock incentive plans under which CSC issued stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”). Some of these awards vested upon separation of CSC and CSRA, some continue to vest in accordance with their original terms, and some converted into a different type of equity award at separation. Additionally, CSRA issued stock in relation to restricted stock awards and stock option replacement awards to employees in connection with the SRA Mergers on November 30, 2015. As of July 1, 2016 and April 1, 2016, CSRA has a net payable to CSC of $4.0 million and a net payable from CSC of $6.5 million, respectively, related to the settlement of equity awards granted to employees prior to the Spin-Off.

19

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

On May 31, 2016, CSRA granted stock options, RSUs and PSUs award for approximately 1,538,878 shares that vest ratably over 3 years. The closing stock price on the date of the grant used to determine the award fair value was $24.77.

CSRA issues authorized but previously unissued shares upon the exercise of stock options, the granting of restricted stock and the settlement of RSUs and PSUs. As of July 1, 2016, 7,736,904 shares of CSRA common stock were available for the grant of future stock options, RSUs, PSUs or other share-based incentives to employees of CSRA.

Share-Based Compensation Expense

For the three months ended July 1, 2016 and July 3, 2015, CSRA recognized share-based compensation expense as follows:

		Three Months Ended
(Dollars in millions)		July 1, 2016		July 3, 2015
Cost of services	$	—	$	(1.4	)
Selling, general and administrative expenses		3.0		0.6
Total	$	3.0	$	(0.8	)
Total, net of tax	$	1.9	$	(0.5	)

The share-based compensation listed above included CSRA’s corporate and non-employee director grants and was $1.3 million for the three months ended July 1, 2016. The share-based compensation listed above included CSRA’s share of the former Parent’s corporate and non-employee director grants for the three months ended July 3, 2015 of $0.6 million.

CSRA uses the Black-Scholes-Merton model in determining the fair value of options granted. The risk-free rate is based on the zero-coupon interest rate of U.S. government-issue Treasury securities with periods commensurate with the expected term of the options.

The weighted-average grant date fair values of stock options granted for the three months ended July 1, 2016 was $5.99 per share of CSRA shares. In calculating the compensation expense for its stock incentive plans, the following weighted-average assumptions were used:

	Three Months Ended
	July 1, 2016		July 3, 2015
Risk-free interest rate	1.39	%	1.77	%
Expected volatility	30.90	%	31.76	%
Expected term (in years)	4.80		6.06
Dividend yield	1.61	%	1.39	%

For the three months ended July 1, 2016 and July 3, 2015, CSRA’s tax benefit realized for deductions from exercising stock options was $4.0 million and $1.5 million, respectively. CSRA’s excess tax benefit was $1.5 million for the three months ended July 1, 2016.

20

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Stock Options

Information concerning stock options of CSRA during the three months ended July 1, 2016 was as follows:

	Number of Option Shares			Weighted Average Exercise Price per share	Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Outstanding as of April 1, 2016	1,502,547		$	23.06	7.0	$	7.6
Granted	997,515			24.77
Exercised	(99,681	)		20.11
Canceled/Forfeited	(31,960	)		28.09
Expired	(48,079	)		26.37
Outstanding as of July 1, 2016	2,320,342			23.78	8.4		4.0
Vested and expected to vest in the future as of July 1, 2016	2,320,342			23.78	8.4		4.0
Exercisable as of July 1, 2016	700,514			22.70	5.5		1.9

The intrinsic value of options exercised during the three months ended July 1, 2016 and July 3, 2015 totaled $0.5 million and $1.3 million, respectively. The total intrinsic value of stock options is based on the difference between the fair market value of CSRA’s common stock less the applicable exercise price. The grant-date fair value of stock options vested during the three months ended July 1, 2016 totaled $1.0 million. The cash received from stock options exercised during the three months ended July 1, 2016 and July 3, 2015 was $1.7 million and $2.0 million, respectively.

As of July 1, 2016, unrecognized compensation expense related to unvested stock options totaled $8.6 million. This cost is expected to be recognized over a weighted-average period of 2.6 years.

Restricted Stock Units    

Information concerning RSUs (including PSUs) of CSRA during the three months ended July 1, 2016, was as follows:

	Number of Restricted Stock Units			Weighted Average Fair Value
Outstanding as of April 1, 2016	376,557		$	29.39
Granted	543,835			25.67
Vested	(94,362	)		26.00
Canceled/Forfeited	(12,226	)		31.90
Outstanding as of July 1, 2016	813,804			27.26

As of July 1, 2016, total unrecognized compensation expense related to unvested restricted stock units totaled $18.5 million, net of expected forfeitures. This cost is expected to be recognized over a weighted-average period of 2.5 years. As of July 1, 2016, accrued unpaid dividends related to restricted stock units outstanding as of the date of the Spin-Off totaled $1.2 million.

21

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 13—Stockholders’ Equity and Accumulated Other Comprehensive Income (Loss)

Dividends Declared

During the fourth quarter of fiscal 2016, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 162,952,919 shares with a total dividend payout of $16.3 million. Payment of the dividend was made on April 29, 2016 to CSRA stockholders of record at the close of business on April 5, 2016.

On May 25, 2016, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share.  The total qualifying shares were 163,427,525 shares, with a total dividend payout of $16.3 million. Payment of the dividend was made on July 11, 2016 to CSRA stockholders of record at the close of business on June 14, 2016.

Share Repurchase Program

On November 30, 2015, the Board authorized a share repurchase program (the “Share Repurchase Program”), pursuant to which CSRA, from time to time, purchases shares of its common stock for an aggregate purchase price not to exceed $400 million. During the three months ended July 1, 2016, no purchases were made under the Share Repurchase Program. As of July 1, 2016, CSRA remains authorized to repurchase $350 million of common stock under the program.

Accumulated Other Comprehensive Income (Loss)

The following tables show the activity in the components of other comprehensive income (loss), including the respective tax effects, and reclassification adjustments for the three months ended July 1, 2016 and July 3, 2015, respectively. Accumulated other comprehensive income (loss) was as follows:

		For the Three Months Ended July 1, 2016
(Dollars in millions)		Before Tax Amount		Tax Impact Increase (Decrease)	Net of Tax Amount
Foreign currency translation adjustments	$	—		—	—
Unrealized loss on interest rate swap		(10	)	4	(6	)
Amortization of prior service credit		(3	)	1	(2	)
Total other comprehensive income	$	(13	)	5	(8	)

		For the Three Months Ended July 3, 2015
(Dollars in millions)		Before Tax Amount		Tax Impact Increase (Decrease)	Net of Tax Amount
Foreign currency translation adjustments	$	—		—	—
Amortization of prior service credit		(1	)	—	(1	)
Total other comprehensive income	$	(1	)	—	(1	)

22

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

The following tables show the changes in Accumulated other comprehensive (loss) income for the three months ended July 1, 2016 and July 3, 2015, respectively:

(Dollars in millions)		Foreign Currency Translation Adjustments		Cash Flow Hedge			Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance as of April 1, 2016	$	—	$	(7	)	$	28		$	21
Other comprehensive income (loss), net of taxes		—		(6	)		—			(6	)
Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests		—		—			(2	)		(2	)
Balance as of July 1, 2016	$	—	$	(13	)	$	26		$	13

(Dollars in millions)		Foreign Currency Translation Adjustments			Pension and Other Postretirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance as of April 3, 2015	$	(2	)	$	2		$	—
Other comprehensive income, net of taxes		—			—			—
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests		—			(1	)		(1	)
Balance as of July 3, 2015	$	(2	)	$	1		$	(1	)

Note 14—Segment Information

CSRA’s reportable segments are as follows:

• Defense and Intelligence—The Defense and Intelligence segment provides services to the DoD, National Security Agency, branches of the Armed Forces and other DoD and intelligence agencies.

• Civil—The Civil segment provides services to various federal agencies within the Department of Homeland Security, Department of Health and Human Services and other federal civil agencies, as well as various state and local government agencies.

23

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

The following table summarizes operating results and total assets by reportable segments:

(Dollars in millions)		Defense and Intelligence		Civil		Subtotal		Corporate(1)		Total
As of July 1, 2016
Total assets	$	1,784	$	2,768	$	4,552	$	232	$	4,784
Three Months Ended July 1, 2016
Revenues	$	568	$	686	$	1,254	$	—	$	1,254
Segment operating income		54		105		159		—		159
Depreciation and amortization expense		34		31		65		—		65
As of July 3, 2015
Total assets	$	1,187	$	752	$	1,939	$	—	$	1,939
Three Months Ended July 3, 2015
Revenues	$	507	$	452	$	959	$	—	$	959
Segment operating income		64		61		125		—		125
Depreciation and amortization expense		22		11		33		—		33
(1) Total assets allocated to the Corporate Segment consist of the following: (1) $131.9 million of cash, (2) $18.4 million of Accounts Receivable, and (3) $81.3 million of net Property, plant, and equipment

Segment operating income provides useful information to CSRA’s management for assessment of CSRA’s performance and results of operations and is one of the financial measures utilized to determine executive compensation.

A reconciliation of consolidated segment operating income to income before income taxes is as follows:

		Three Months Ended
(Dollars in millions)		July 1, 2016			July 3, 2015
Segment operating income	$	159		$	125
Corporate G&A		(17	)		(15	)
Separation and merger costs		(5	)		(15	)
Interest expense, net		(30	)		(5	)
Other (expense) income, net		(1	)		19
Income before income taxes	$	106		$	109

24

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 15—Commitments and Contingencies

Commitments

In the normal course of business, CSRA may provide certain customers, principally governmental entities, with financial performance guarantees, which are generally backed by stand-by letters of credit or surety bonds. In general, CSRA would only be liable for the amounts of these guarantees in the event that nonperformance by CSRA permits termination of the related contract by the customer. As of July 1, 2016, CSRA had $44 million of outstanding letters of credit and $13 million of surety bonds related to these performance guarantees. CSRA believes it is in compliance with its performance obligations under all service contracts for which there is a financial performance guarantee and the ultimate liability, if any, incurred in connection with these guarantees will not have a material adverse effect on its Consolidated and Condensed Financial Statements.

The following table summarizes the expiration of CSRA’s financial guarantees and stand-by letters of credit outstanding as of July 1, 2016:

(Dollars in millions)		Fiscal 2017		Fiscal 2018		Fiscal 2019 and Thereafter		Total
Stand-by letters of credit	$	32	$	12	$	—	$	44
Surety bonds		—		13		—		13
Total	$	32	$	25	$	—	$	57

CSRA generally indemnifies licensees of its proprietary software products against claims brought by third parties alleging infringement of intellectual property rights (including rights in patents, copyrights, trademarks, and trade secrets). CSRA’s indemnification of its licensees relates to costs arising from court awards, negotiated settlements and the related legal and internal costs of those licensees. CSRA maintains the right, at its own costs, to modify or replace software in order to eliminate any infringement. Historically, CSRA has not incurred any significant costs related to licensee software indemnifications.

Contingencies

CSRA is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the U.S. Adverse findings in these investigations or reviews can lead to criminal, civil or administrative proceedings, and CSRA could face penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. In addition, CSRA could suffer serious reputational harm if allegations of impropriety were made against CSRA. Adverse findings could also have a material adverse effect on CSRA’s business, Consolidated and Condensed Financial Statements due to its reliance on government contracts.

U.S. federal government agencies, including the Defense Contract Audit Agency (“DCAA”), Defense Contract Management Agency (“DCMA”), and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations, and standards. These agencies also review the adequacy of the contractor’s compliance with government standards for its business systems including: a contractor’s accounting system, earned value management system, estimating system, materials management and accounting system, property management system and purchasing system. Both contractors and the U.S. federal government agencies conducting these audits and reviews have come under increased scrutiny, including such subjects as billing practices, labor charging and accounting for unallowable costs.

CSRA’s indirect cost audits by the DCAA remain open for fiscal 2004 and subsequent fiscal years. Although the Computer Sciences GS Business has recorded contract revenues subsequent to and including fiscal 2004 based upon an estimate of costs that the Computer Sciences GS Business believes will be approved upon final audit or

25

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

review, the Computer Sciences GS Business does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Computer Sciences GS Business’s estimates, its profitability would be adversely affected.

The DCAA has not completed audits of SRA’s incurred cost submissions for fiscal 2009 and subsequent fiscal years. SRA has recorded financial results subsequent to fiscal 2008 based upon costs that SRA believes will be approved upon final audit or review. If incurred cost audits result in adverse findings that exceed SRA’s estimates, it may have an adverse effect on our financial position, results of operations or cash flows.

As of July 1, 2016, CSRA has recorded a liability of $12.7 million for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs. This amount includes potential adjustments related to both pre-separation and post-separation audits or reviews.

In connection with the sale of ATD in fiscal 2014, CSC transferred its joint venture interests in Computer Sciences Raytheon (“CSR”) as part of the ATD sale transaction. CSR is a joint venture formed between CSC and Raytheon Technical Services Company, and its sole business is performance of a single contract for a DoD customer. CSR is the plan sponsor of the CSR pension plan, which was terminated in connection with the termination of the CSR contract with the customer. CSC agreed with the purchaser of ATD that CSC would fund the purchaser’s share of the CSR pension settlement obligation upon plan termination. In addition, the agreement with the purchaser provides that the eventual expected recovery by CSR of such plan termination settlement costs from the customer as provided for under federal Cost Accounting Standards (“CAS”) Section 413, whereby contractors may recover such costs from the government plus interest, will be reimbursed to the business. The CSR pension plan termination process commenced in September 2015, and may take upwards of 12 months to be completed. The current estimate of the share of the funding obligation that would be attributable to the purchaser and, therefore to be advanced by CSC, is approximately $26.0 million. The ultimate plan termination settlement funding obligation will be based on economic factors, including long-term interest rates that impact the cost of annuities offered by insurers at the time of the actual plan termination settlement. The fair value of CSC’s funding advance obligation net of subsequent expected recoveries was recorded by CSRA prior to CSRA’s separation from CSC. As part of the separation, CSC and CSRA agreed that CSC would transfer all rights, title and interest of the agreement to fund the CSR pension settlement obligation that would otherwise be the responsibility of CSC to CSRA. CSC’s obligation to advance funds, and therefore CSRA’s obligation to indemnify, will become due no later than October 15, 2016.

Unless otherwise noted, CSRA is unable to develop a reasonable estimate of a possible loss or range of losses associated with the following contingent matters at this time.

Maryland Medicaid Enterprise Restructuring Project

After competitive bidding on March 1, 2012, CSC was awarded the Maryland Medicaid Enterprise Restructuring Project (“MERP”) contract by the State of Maryland (the “State”) to modernize the Medicaid Management Information System (“MMIS”), a database of Medicaid recipients and providers used to manage Medicaid reimbursement claims. The MERP contract was predominately fixed-price. Since the date the MERP was awarded, U.S. federal government-mandated Medicaid IT standards have been in considerable flux. The State directed CSC to include additional functionality in the design to incorporate new federal mandates and guidance promulgated after the base scope of the Contract was finalized. Further, the State declined to approve contract modifications to compensate CSC for the additional work.

As a result of the State’s refusal to amend the MERP contract and equitably adjust the compensation to be paid to CSC and, in accordance with prescribed State statutes and regulations, CSC timely filed a certified contract claim in September 2013, which after various procedural developments is now pending before the Maryland Board of Contracts Appeals (the “State Board”).

On August 22, 2014, the State unilaterally suspended performance under the Contract for 90 days and repeatedly extended the suspension until providing a Notice of Default termination in October 2015. As the result of the suspension and other actions and inactions by the State in performance of its obligations under the Contract, in

26

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

October 2014, CSC filed additional claims under various legal theories, such that currently the total amount claimed by CSC is approximately $80.0 million.

Between April 2015 and September 2015, CSC and the State were in settlement negotiations to restructure the program and resolve all issues, including CSC’s contract claims. However, on September 14, 2015, the State orally advised CSC that the State elected to abandon the contract settlement and restructuring discussions. On October 14, 2015, the State provided CSC with a Notice of Default Termination. When a contract is terminated for default, Maryland procurement regulations allow the State to procure substitute performance, with the contractor being liable for any excess reprocurement costs. Any State claim against CSC arising from a default termination for reprocurement costs would be appealable by CSC to the State Board, as is the default termination itself. The State has not asserted a claim for reprocurement costs and, were it do so, CSC believes such a claim to be meritless and unsupported by the facts.

CSRA challenged the legal basis of the State’s termination for default in a Claim for $83.0 million filed with the State on December 14, 2015. The Claim subsumes the quantum of the prior claims and seeks to convert the termination to a convenience termination. The State has not rendered a decision on the latest claim; however, if it is denied, CSRA will appeal through litigation at the State Board.

On December 22, 2015, the State filed a Motion to Dismiss CSC’s Claim with the State Board. CSC responded to the State’s Motion to Dismiss on January 19, 2016. As set forth in CSC’s extensive brief, the four arguments made in the State’s Motion are based on an incomplete and flawed discussion of the Contract and the factual record. On May 6, 2016, the State Board held a hearing on the Department’s motion and decided to take the motion under advisement. The Board requested that the Department move expeditiously to arrive at a final decision on CSC’s other claims and indicated that it would then consolidate the claims going forward and, at that time, might issue a decision on the Department’s motion. When all of the material parts of the Contract and record are considered, CSRA believes that CSC is entitled to prevail on all of the issues raised by the Department’s motion.

On July 14, 2016, CSRA received a copy of a claim for breach of contract against CSC filed by the DHMH Contract Monitor with the DHMH Procurement Officer (the “State Claim”). The claim was filed in accordance with Maryland State procedure for claims against State contractors. If the DHMH Procurement Officer takes final action on the claim — which is likely to be an approval thereof — CSC and/or CSRA will be able to appeal to the State Board.

The State Claim seeks damages in excess of $30.0 million. Categories of damages include: the full amount paid to CSC, $30.0 million; costs to be incurred by the State in procuring substitute performance; amounts paid by the State to its project management consultant; lost federal reimbursement from CMS; and additional costs incurred by the State, including wages, attributable to CSC’s alleged breach.

The State Claim is based solely on issues raised in the State’s February 14, 2014, and March 14, 2014, cure notices which were fully addressed by CSC in the relevant timeframe. No new facts are contained in the State Claim. Subsequent to the cure notices, the State unilaterally suspended contract performance for over one year.

As CSC proceeds with the claims litigation, CSC expects to consolidate all of its claims against the State with any claims arising from the default termination. CSRA will litigate on behalf of CSC and indemnify CSC for the costs of litigation and any other costs or liabilities CSC may incur in the litigation. Recovery by CSC will be credited to CSRA. Management has evaluated the recoverability of assets related to the contract in light of these developments and concluded that no adjustments to its financial statements are required. Further, we have assessed the legal risk associated with the State Claim under ASC 450 and have concluded at this time that no reserve is required.

Strauch et al. Fair Labor Standards Act Class Action

On July 1, 2014, plaintiffs filed Strauch and Colby v. Computer Sciences Corporation in the U.S. District Court for the District of Connecticut, a putative nationwide class action alleging that CSC violated provisions of the Fair Labor Standards Act (“FLSA”) with respect to system administrators who worked for CSC at any time from June 1,

27

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

2011 to the present. Plaintiffs claim that CSC improperly classified its system administrators as exempt from the FLSA and that CSC, therefore, owes them overtime wages and associated relief available under the FLSA and various statutes, including the Connecticut Minimum Wage Act, the California Unfair Competition Law, California Labor Code, California Wage Order No. 4-2001, and the California Private Attorneys General Act. CSC’s Motion to Transfer Venue was denied in February 2015. In September 2015, plaintiffs filed an amended complaint, which added claims under Missouri and North Carolina wage and hour laws. The relief sought by Plaintiffs includes unpaid overtime compensation, liquidated damages, pre- and post-judgment interest, damages in the amount of twice the unpaid overtime wages due, and civil penalties. If a liability is ultimately incurred as a result of these claims, CSRA would pay a portion to CSC pursuant to an indemnity obligation. CSC and CSRA both maintain the position that system administrators have the job duties, responsibilities, and salaries of exempt employees and are properly classified as exempt from overtime compensation requirements.

On June 9, 2015, the Court entered an order granting the plaintiffs’ motion for conditional certification of the class of system administrators. The conditionally certified FLSA and putative classes include approximately 1,285 system administrators, of whom 407 are employed by CSRA and the remainder employed by CSC. Courts typically undertake a two-stage review in determining whether a suit may proceed as a class action under the FLSA. In its order, the Court noted that, as a first step, the Court examines pleadings and affidavits, and if it finds that proposed class members are similarly situated, the class is conditionally certified. Potential class members are then notified and given an opportunity to opt-in to the action. The second step of the class certification analysis occurs upon completion of discovery. At that point, the Court will examine all evidence then in the record to determine whether there is a sufficient basis to conclude that the proposed class members are similarly situated. If it is determined that they are, the case will proceed to trial; if it is determined they are not, the class is decertified and only the individual claims of the purported class representatives proceed. CSRA’s and CSC’s position in this litigation continues to be that the employees identified as belonging to the conditional class were paid in accordance with the FLSA and applicable state laws.

The parties have explored potential settlement scenarios but have not concluded any settlement. Accordingly, the litigation is ongoing and briefing on plaintiffs’ motion for class certification, the next step in the litigation, is in progress.

CECOM Rapid Response Demand Letter

On July 12, 2013, the U.S. Army’s Communications-Electronics Command (“CECOM”) issued a demand letter based upon DCAA audit reports and Form 1, for reimbursement in the amount of $235.2 million in costs that CSC allegedly overcharged under its Rapid Response (“R2”) contract (Contract No. DAAB07-03-D-B007) by placing CSC, interdivisional, teammate, and vendor employees in R2 labor categories for which they were not qualified. CSC’s position has been that, in most instances, the individuals in question met the contract requirements for their labor categories, and that, in all instances, DCAA and CECOM have ignored the value the government received for CSC’s work. CSC and CECOM have engaged in discussions in an attempt to resolve this issue but, at this point in time, there can be no assurance that the parties will be able to resolve their differences, in which case CSRA expects to litigate this matter.

28

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

DynCorp

In connection with CSC’s acquisition of DynCorp in 2003 and its divestiture of substantially all of that business in two separate transactions (in 2005 to The Veritas Capital Fund II L.P. and DI Acquisition Corp. and in 2013 to Pacific Architects and Engineers, Incorporated (collectively, the “DynCorp Divestitures”)), CSC assumed and Computer Sciences GS Business will retain various environmental indemnities of DynCorp and its former subsidiaries arising from environmental representations and warranties under which DynCorp agreed to indemnify the purchasers of its subsidiaries DynAir Tech and DynAir Services by Sabreliner Corporation and ALPHA Airports Group PLC, respectively. As part of the DynCorp Divestitures, CSC also assumed and Computer Sciences GS Business will also retain indemnities for insured litigation associated with dormant suits by former employees of DynCorp subsidiaries alleging exposure to asbestos and other substances; other indemnities related to a 2001 case arising from counter-narcotics spraying in Colombia under a U.S. Department of State contract and an environmental remediation case involving HRI, a former wholly owned subsidiary of DynCorp, in Lawrenceville, New Jersey. CSRA does not anticipate any material adverse effect on its financial position, results of operations and cash flows from these indemnities. Litigation involving DynCorp’s aviation insurance underwriters was recently resolved and had no significant effect on our results for fiscal year 2017.

Southwest Asia Employment Contract Litigation

Rishell v. CSC, a single plaintiff lawsuit, was filed in February 2013 in Florida.  In April 2013, a second lawsuit, Rhodes v. CSC, with five plaintiffs was filed in Mississippi.  Both cases were consolidated before the United States District Court for the Eastern District of Virginia in 2014.  Summary judgment was granted in each case on December 10, 2014, with the Rishell case decided under Florida law and the Rhodes case under Virginia law.

On May 2, 2016, the U.S. Court of Appeals for the Fourth Circuit ruled against CSC in an appeal of these two consolidated cases, the liability for which the Company is contractually obligated to indemnify CSC pursuant to the terms of the Master Separation and Distribution Agreement between CSRA and CSC. These cases involved six former CSC employees with each of whom CSC had entered into two contracts upon employment: a general “Offer Letter” specifying an “hourly rate” to be paid biweekly, and a more specific “Foreign Travel Letter” specifying certain aspects of the employees’ employment while working overseas in Southwest Asia as civilian government contractors. Employees had sued CSC, claiming entitlement to be paid on an hourly rate, as specified in the Offer Letter, as opposed to being paid on a salary basis, which is how CSC compensated them. The District Court had held as a matter of contract interpretation that the two contracts, read together, required CSC to pay the employees by the hour. The Fourth Circuit in its May 2 unpublished opinion agreed with the trial court. A reserve for the amount of damages awarded by the trial court and for which the Company will be required to indemnify CSC has been included in the Company’s Consolidated and Condensed Financial Statements.

In addition to the two consolidated cases that were the subject of the Fourth Circuit’s opinion, there are currently an additional six similar cases, involving approximately 85 individuals, pending before federal and state courts in California, Louisiana, and Virginia that have yet to be adjudicated. Plaintiffs in these cases present similar claims, that they worked in excess of 40 hours per week, they were compensated with a salary based on a 40-hour work week, and this violated the terms of their Offer Letters that quoted an hourly wage. It is reasonably possible that the trial courts considering these cases will interpret the Offer Letter and Foreign Travel Letter at issue in these other cases similarly to the Fourth Circuit and may enter judgments against CSC awarding damages. However, there remain differences among the pending cases, including statutes of limitations, which may lengthen or shorten the period of time for when damages may be recovered, and differences between plaintiffs’ legal entitlement to other damages or awards, such as punitive damages or attorneys’ fees. These are issues of state contract or statutory law and depend upon which states’ laws apply to the individual plaintiffs. These issues have not been resolved. The range of possible losses for which the Company would be required to indemnify CSC associated with these pending matters is between $0.0 million and $14.0 million.

CSRA accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated under ASC 450. CSRA believes it has appropriately recognized liabilities for any such matters. In addition to the matters noted above, CSRA is currently party to a number of

29

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

disputes which involve or may involve litigation. Regarding other matters that may involve actual or threatened disputes or litigation, CSRA, in accordance with the applicable reporting requirements, provides disclosure of such matters for which the likelihood of material loss is reasonably possible. CSRA assessed reasonably possible losses for all other such pending legal or other proceedings in the aggregate and concluded that the range of potential loss is not material.

CSRA also considered the requirements regarding estimates used in the disclosure of contingencies under ASC Subtopic 275-10, Risks and Uncertainties. Based on that guidance, CSRA determined that supplemental accrual and disclosure was not required for a change in estimate that involves contingencies because CSRA determined that it was not reasonably possible that a change in estimate will occur in the near term. CSRA reviews contingencies during each interim period and adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

Note 16—Subsequent Events

On August 10, 2016, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share.  Payment of the dividend will be made on October 4, 2016 to CSRA stockholders of record at the close of business on August 31, 2016.

30

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following management’s discussion and analysis of financial condition and results of operations (“MD&A”) in conjunction with our Annual Report on Form 10-K, for the period ended April 1, 2016 and our unaudited Consolidated and Condensed Financial Statements and accompanying notes for the three months ended July 1, 2016 (“FY17 1st Quarter Financial Statements”).

This discussion contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts, but rather are based on our current expectations, estimates, assumptions, and projections about our industry, business and future financial results. These statements should be considered in addition to, but not as a substitute for, other measures of our financial performance reported in accordance with GAAP. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a number of factors, including those we discuss in the “Risk Factors” section of this Form 10-Q and our Annual Report on Form 10-K for the period ended April 1, 2016.

Our Consolidated Financial Statements and unaudited Consolidated and Condensed Financial Statements, discussed below, reflect our financial condition, results of operations, and cash flows. This information may not necessarily reflect what our financial condition, results of operations, or cash flows would have been had we operated as a separate, independent entity during the period presented prior to the Spin-Off, or what our financial condition, results of operations, and cash flows may be in the future. The following MD&A of CSRA covers a period prior to the Spin-Off and the Mergers. For accounting and financial reporting purposes, Computer Sciences GS is considered to be the predecessor to CSRA and as a result, its historical financial statements now constitute the historical financial statements of CSRA. Accordingly, results reported through November 27, 2015 include only the operations of Computer Sciences GS, on a carve-out basis. The results reported after November 27, 2015 include the operations of CSRA, including the SRA Merger. These historical financial statements may not be indicative of our future performance.

Our MD&A is organized as follows:

• Overview: A discussion of our business and overall analysis of financial and other highlights affecting CSRA to provide context for the remainder of MD&A. The overview analysis compares the three months ended July 1, 2016 to the three months ended July 3, 2015;

• Results of Operations: An analysis of our financial results comparing the three months ended July 1, 2016 to the comparable prior-year period. A discussion of the results of operations at the consolidated level is followed by a discussion of the results of operations by segment;

• Liquidity and Capital Resources: An analysis of changes in our cash flows and a discussion of our financial condition and liquidity;

• Contractual Obligations: An overview of contractual obligations, retirement benefit plan funding and off balance sheet arrangements;

• Critical Accounting Policies and Estimates: A discussion of accounting policies and estimates that we believe are important to understanding the assumptions and judgments incorporated in our reported financial results.

Business Overview

Every day CSRA makes a difference in how the government serves our country and our citizens. We deliver a broad range of innovative, next-generation IT solutions and professional services to help our customers modernize their legacy systems, protect their networks and assets, and improve the effectiveness and efficiency of mission-

31

critical functions for our war fighters and our citizens. Our workforce of over 18,000 employees understands that success is a matter of perseverance, courage, adaptability and experience.

Headquartered in Falls Church, Virginia, we deliver comprehensive offerings from concept through sustainment. We deliver IT, mission- and operations-related services across the U.S. federal government to the DoD, intelligence community and homeland security, civil and healthcare agencies, as well as certain state and local government agencies. We leverage deep domain-based customer intimacy and decades of experience in helping customers execute their mission with a fundamental understanding of their IT environment that has earned us the ability to introduce next-generation technologies. We bring scalable and more cost-effective IT solutions to government agencies that are seeking to improve mission-critical effectiveness and efficiency through innovation.

This approach is designed to yield lower implementation and operational costs as well as a higher standard of delivery. Demand for our U.S. public sector offerings is driven by evolving government priorities such as: (1) the critical mission priorities of government agencies, (2) the government-wide mandate to improve efficiency and reduce cost and (3) the government’s long-term shift to next-generation technologies.

CSRA’s reportable segments are as follows:

• Defense and Intelligence—The Defense and Intelligence segment provides services to the DoD, National Security Agency, branches of the Armed Forces and other DoD and Intelligence agencies.

• Civil Segment—The Civil segment provides services to various federal agencies within the Department of Homeland Security, Department of Health and Human Services and other federal civil agencies, as well as various state and local government agencies.

Overview

The key operating results for the first quarter of fiscal 2017 include:

	Three Months Ended
(Dollars in millions)	July 1, 2016			July 3, 2015
Total Revenue	$	1,254		$	959
Income Before Income Taxes	106			109
Net Income	68			67
Net Income Attributable to Common Shareholders	65			63
Non -GAAP measures:
Total Segment Operating Income (1)	159			125
Adjusted EBITDA (2)	211			143
Segment Operating Income Margin	12.7		%	13.0		%

(1) Total segment operating income is a non-GAAP measure that provides useful information to our management for assessment of our performance and results of operations and is one of the financial measures utilized to determine executive compensation. Our definition of such measure may differ from other companies. We define segment operating income as total segment revenue less cost of services (“COS”), segment general and administrative (“G&A”) expense and segment depreciation and amortization expense. Segment operating income excludes actuarial and settlement charges related to pension and other post-employment benefit plans, corporate G&A, separation and merger costs and SRA integration costs. Management compensates for the limitations of this non-GAAP measure by also reviewing income before income taxes, which includes costs excluded from the operating income definition such as corporate G&A, interest and other income (expense). Management believes that presenting non-GAAP segment operating income is useful to investors because it (i) provides investors with meaningful supplemental information regarding financial performance by excluding certain items, (ii) permits investors to view performance using the same tools that management uses to budget, make operating and strategic

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decisions, and evaluate historical performance, and (iii) otherwise provides supplemental information that may be useful to investors in evaluating our results. A reconciliation of total segment operating income to income before income taxes is as follows:

	Three Months Ended
(Dollars in millions)	July 1, 2016			July 3, 2015
Total segment operating income(a)	$	159		$	125
Corporate G&A	(17		)	(15		)
Separation and CSRA Merger Costs(b)	(5		)	(15		)
Interest expense, net	(30		)	(5		)
Other (expense) income, net	(1		)	19
Income before income taxes(a)	$	106		$	109

(a) Income before taxes for the three months ended July 5, 2015, does not include the contribution from net periodic pension income related to CSC’s U.S. defined benefit pension plans that we assumed in the Spin-Off; net periodic pension income relating to these plans has not been included in CSRA’s historical non-GAAP segment operating income nor in the historical Consolidated Financial Statements or in the unaudited Consolidated and Condensed Financial Statements but included in our results of operations beginning in the period after the date of Distribution. The contribution to non-GAAP total segment operating income from net periodic pension income from CSC’s U.S. defined benefit pension plans amounted to approximately $(21) million for the three months ended July 3, 2015.

(b) Includes costs related to the Spin-Off and the Mergers.

(2) Adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is a non-GAAP measure provides useful information to investors regarding our results of operations as it provides another measure of our profitability, our ability to service our debt, and is considered an important measure by financial analysts covering CSRA and peer companies in our industry. This Adjusted EBITDA is based on CSRA’s credit agreement, and among the adjustments we make is the removal of actuarial gains and losses related to our various defined benefit plans, but does not reflect removal of costs we incur to integrate our operations with those of an acquired business. While such gains and losses are ultimately settled in cash, we make these adjustments as means to more clearly demonstrate to investors our core operating performance. Our definition of such measure may differ from other companies.

The following table presents a reconciliation of Net income to Adjusted EBITDA.

	Three Months Ended
(Dollars in millions)	July 1, 2016		July 3, 2015
Net income	$	68	$	67
Interest expense, net	30		5
Tax expense on income	38		42
Depreciation and amortization	65		31
Amortization for contract-related intangibles	2		2
Stock-based compensation	3		(1		)
Gain on disposition of business	—		(18		)
Separation Costs(a)	5		15
Adjusted EBITDA(b)	$	211	$	143

(a) Includes costs related to the Spin-Off and the Mergers.

(b) The prior period has been revised to conform with the current period presentation.

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Business Drivers and Key Performance Indicators

We manage and assess the performance of our business through various means, with the primary financial measures including contract wins, revenue, operating income, backlog, and free cash flow. See below as well as the MD&A in our Annual Report on Form 10-K for further discussion of factors that drive our business results and our key performance indicators. The following are some of these key performance indicators for the first quarter of fiscal 2017, compared to the first quarter of fiscal 2016:

• We announced contract awards⁽³⁾ of $1.3 billion for the first quarter of fiscal year 2017 as compared to $1.0 billion during the first quarter of fiscal year 2016.

• Total backlog⁽⁴⁾ was $15.1 billion at both July 1, 2016 and April 1, 2016. Of the total $15.1 billion backlog at July 1, 2016, $3.0 billion is expected to be realized as revenue during the remainder of fiscal year 2017, and$12.1 billion is not yet funded.

• Days Sales Outstanding (“DSO”)⁽⁵⁾ was 54 days as of July 1, 2016 and 52 days as of April 1, 2016.

• Cash provided by operating activities was $156.1 million and $246.6 million for the three months ended July 1, 2016 and July 3, 2015, respectively.

• Cash used in investing activities was $(43.3) million and $19.3 million for the three months ended July 1, 2016 and July 3, 2015, respectively.

• Cash used in financing activities was $(109.8) million and $(263.7) million for the three months ended July 1, 2016 and July 3, 2015, respectively.

• Free cash flow⁽⁶⁾ was $67 million and $52 million for the three months ended July 1, 2016 and July 3, 2015, respectively.

(3) Announced award values for competitive indefinite delivery/indefinite quantity awards represent the expected contract value at the time a task order is awarded under the contract. Announced values for non-competitive indefinite delivery/indefinite quantity awards represent management’s estimate at the award date. Our business awards, for all periods presented, have been revised to exclude the awards relating to discontinued operations.

(4) Backlog represents the total estimated contract value of predominantly long-term contracts, based on customer commitments that we believe to be firm, less the amount of revenue already recognized on those contracts. Backlog value is based on contract commitments, management’s judgment and assumptions about volume of services, availability of customer funding and other factors. Backlog estimates for government contracts include both the funded and unfunded portions and all of the option periods. Backlog estimates are subject to change and may be affected by factors including modifications of contracts and foreign currency movements. Our backlog, for all periods presented, has been revised to exclude the backlog relating to discontinued operations.

(5) DSO is calculated as total receivables at the fiscal period end divided by revenue-per-day. Revenue-per-day equals total revenues divided by the number of days in the fiscal period. Total receivables includes unbilled receivables but excludes tax receivables and long-term receivables.

(6) Free cash flow is a non-GAAP measure and our definition of such measure may differ from that used by other companies. We define free cash flow as equal to the sum of (1) operating cash flows, (2) investing cash flows, excluding business acquisitions, dispositions and investments and (3) payments on capital leases and other long-term asset financings. Free cash flow is further adjusted for certain other items, such as (i) non-recurring separation-related payments and (ii) the relative fiscal quarter impact of net proceeds arising from the initial sale of billed and/or unbilled receivables under the Master Accounts Receivable Purchase Agreement.

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Our free cash flow measure does not distinguish operating cash flows from investing cash flows as they are required to be presented in accordance with GAAP and should not be considered a substitute for operating and investing cash flows as determined in accordance with GAAP. Free cash flow is one of the factors our management uses in reviewing the overall performance of the business and motivating performance through incentive compensation for key business leaders. Management overcomes the limitations of this non-GAAP measure by also reviewing the GAAP measures of operating, investing and financing cash flows. Strong free cash flow is one of the attributes that attracts potential investors to our industry. Free cash flow provides both management and investors a measurement of cash generated from operations that is available to fund acquisitions, pay dividends, repay debt and repurchase our common stock. A reconciliation of free cash flow to the most directly comparable GAAP financial measure is presented below:

	Three Months Ended
(Dollars in millions)	July 1, 2016			July 3, 2015
Net cash provided by operating activities	$	156		$	247
Net cash (used in) provided by investing activities	(43		)	19
Sale of accounts receivable(a)	(46		)	(180		)
Business dispositions	—			(34		)
Payments on capital leases and other long-term assets financing	(7		)	(5		)
Separation-related payments	7			5
Free cash flow	$	67		$	52

(a) For the fiscal quarters presented, free cash flow is adjusted for the relative fiscal quarter impact of net proceeds arising from the initial sale of billed and/or unbilled receivables under the Master Accounts Receivable Purchase Agreement. For the fiscal quarter ended July 3, 2015, $180 million of net proceeds applies to billed and unbilled receivables sold by the Computer Sciences GS Business. For the fiscal quarter ended July 1, 2016, net proceeds of $46 million relates only to SRA unbilled receivables under the Master Accounts Receivable Purchase Agreement to which SRA was added to during the fiscal quarter. Billed receivables historically sold by SRA under a separate accounts receivable purchase agreement continue under the Master Accounts Receivable Purchase Agreement. See Note 5 - Sale of Receivables in our unaudited Consolidated and Combined Financial Statements for further discussion.

Economic and Industry Factors

For the three months ended July 1, 2016, we generated approximately 93% of our total revenues from sales to the U.S federal government either as a prime contractor or subcontractor to other contractors. We generated approximately 45% of our total revenues from the DoD (including all branches of the U.S. military) and Intelligence Community and approximately 48% of our total revenues from civilian agencies. We expect to continue to derive substantially all of our revenues from work performed under U.S. federal government contracts. As a result, our business performance is affected by the overall level of U.S. government spending and the alignment of our offerings and capabilities with the budget priorities of the U.S. government. While we believe that federal discretionary spending will grow, government budget deficits and the national U.S. debt will constrain spending across many federal agencies. Adverse changes in fiscal and economic conditions, including sequestration, future government shutdowns, and issues related to the nation’s debt ceiling could materially impact our business.

Our market is highly competitive and has characteristics unique to the federal contracting environment. Almost all of our U.S. federal government contracts and subcontracts may be modified, curtailed, or terminated either at the convenience of the government or for default based on factors set forth in the Federal Acquisition Regulation (“FAR”).

Our results of operations and our defined benefit plans are also impacted by economic conditions generally, including macroeconomic conditions, and the impact that they have on the U.S. federal government. We are monitoring current macroeconomic and credit market conditions and levels of business confidence and their potential effect on our customers and on us. Our results of operations are also affected by the evolving priorities of the U.S. federal government, as well as by the pace of technological change and the type and level of technology spending by our customers. The ability to identify and capitalize on these markets and technological changes early in their cycles is a key driver of our performance.

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Revenues are driven by our ability to secure new contracts and to deliver solutions and services that add value to our customers. To drive revenue growth we must deliver market-leading service offerings and deploy skilled teams of professionals quickly across all government industries and domains. We believe that our scale, combination of technical expertise in applications and IT infrastructure solutions combined with our deep public sector mission knowledge and experience, firmly established vendor partnerships, and commitment to a culture of frugality will enable us to compete effectively in the current market environment.

Results of Operations

We report our results based on a fiscal year convention that comprises four thirteen-week quarters. Every fifth year includes an additional week in the first quarter of the fiscal year to prevent the fiscal year from moving from an approximate end of March date. The first quarters of fiscal 2017 and fiscal 2016 were comprised of an equivalent number of weeks.

Revenues

Revenues for the Defense and Intelligence and Civil segments were as follows:

	Three Months Ended
(Dollars in millions)	July 1, 2016		July 3, 2015		Change		Percent Change
Defense and Intelligence	$	568	$	507	$	61	12.0	%
Civil	686		452		234		51.8
Total Revenue	$	1,254	$	959	$	295	30.8	%

For the three months ended July 1, 2016, our total revenue increased by $295 million, or 30.8%, as compared to the same period of the prior year primarily due to the additional revenue attributable to SRA. Excluding revenue of $349 million attributable to SRA, revenue for the three months ended July 1, 2016 amounted to $905 million, a decrease of $54 million compared to the same period of the prior year. Revenue declined in the three month periods due to reductions in the Logistics Modernization Program for the U.S. Army, as well as a lower overall volume of direct material and other direct cost purchases. We won contracts with award values of $1.3 billion during the three months ended July 1, 2016, as compared to $1.0 billion during the three months ended July 3, 2015.

Defense and Intelligence Segment

For the three months ended July 1, 2016, Defense and Intelligence segment revenues increased by $61 million, or 12.0% as compared to the same period of the prior year, primarily due to additional revenue attributable to SRA. Excluding revenue of $114 million attributable to SRA, the revenue decrease was due to a net reduction in tasking on existing contracts with the U.S. Army, U.S. Navy, and National Security Agency. In addition, there was reduced revenue of $10 million on certain contracts with the Missile Defense Agency that had either concluded or were winding down. These revenue reductions were partially offset by $9 million of revenue on a new classified contract.

Civil Segment

For the three months ended July 1, 2016, Civil segment revenues increased by $234 million, or 51.8% as compared to the same period of the prior year, primarily due to the additional revenue attributable to SRA. Excluding revenue of $235 million attributable to SRA, the net change was due in part to reduced revenue of $10 million on contracts with the Department of Homeland Security (DHS) that had either concluded or were close to ending, and $3 million on contracts with the Department of Treasury that had either concluded or were close to ending. These revenue reductions were mostly offset by an $11 million increase on contracts with federal and non-federal agencies due to increases in tasking and transaction volumes.

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Segment Operating Income

Segment operating income for the Defense and Intelligence, and Civil segments were as follows:

		Three Months Ended
(Dollars in millions)		July 1, 2016		July 3, 2015		Change			Percent Change
Defense and Intelligence	$	54	$	64	$	(10	)		(15.6	)	%
Civil		105		61		44			72.1
Total segment operating income	$	159	$	125	$	34			27.2		%
Segment operating income margin:
Defense and Intelligence		9.5	%	12.6	%	(3.1	)	%
Civil		15.3	%	13.5	%	1.8		%

For the three months ended July 1, 2016, our segment operating income increased by $34 million, or 27.2%, as compared to the same period of the prior year. Excluding the segment operating loss of $3 million attributable to SRA, the favorable operating income was a result of better contract performance and higher pension income.

Defense and Intelligence Segment

For the three months ended July 1, 2016, Defense and Intelligence segment operating income decreased by $10 million, or (15.6)% as compared to the same period of the prior year. Approximately $7 million of the decrease in the segment’s operating income is attributable to an operating loss at SRA due to directly allocable depreciation, amortization, and other costs associated with the merger. Excluding the impact of SRA, Defense and Intelligence segment operating income for the three months ending July 1, 2016 decreased by $3 million due to lower revenue on delivery of existing projects. Excluding the impact of the revenue reduction, the segment’s operating income as a percentage of sales increased due to more efficient Cost of Services and higher pension income.

Civil Segment

For the three months ended July 1, 2016, Civil segment operating income increased by $44 million, or 72.1% as compared to the same period of the prior year. Excluding Civil segment operating income of $4 million attributable to SRA, the increase in operating income for the three months July 1, 2016 was primarily the result of higher pension income, better contract performance and other program related efficiencies. SRA operating income in fiscal year 2017 was negatively impacted by directly allocable depreciation, amortization, and other costs associated with the merger. 

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Costs and Expenses

Our total costs and expenses were as follows:

	Three Months Ended
(Dollars in millions)		July 1, 2016		July 3, 2015
Costs of services(a)	$	991	$	775
Selling, general and administrative		56		41
Depreciation and amortization		65		33
Separation and merger costs		5		15
Interest expense, net		30		5
Other (income) expense, net		1		(19	)
Total	$	1,148	$	850

(a) COS also includes related-party transactions with CSC of $2 million for the three months ended July 3, 2015.

Costs of Services

COS, as a percentage of revenue, decreased to 79.0% for the three months ended July 1, 2016 as compared to 80.8% from the same period of the prior year. The decrease as a percentage of revenue for is a result of program delivery efficiencies, indirect cost reductions, and merger synergies.

Selling, General and Administrative

Selling, general, and administrative (“SG&A”), as a percentage of revenue, increased slightly to 4.5% for the three months ended July 1, 2016 as compared to 4.3% from the same period of the prior year, which is due in part to higher bid and proposal expenses as well as costs associated with the integration of SRA in the fiscal year 2017 period.

Depreciation and Amortization (D&A)

D&A for the Defense and Intelligence, and Civil segments were as follows:

		Three Months Ended
(Dollars in millions)		July 1, 2016		July 3, 2015		Change	Percent Change
Defense and Intelligence	$	34	$	22	$	12	54.5	%
Civil		31		11		20	181.8
Total depreciation and amortization	$	65	$	33	$	32	97.2	%

D&A, as a percentage of revenue, increased to 5.2% for the three months ended July 1, 2016, as compared to 3.4% from the same period of the prior year. This increase was primarily due to the amortization of intangible assets acquired in the SRA merger. Excluding D&A of $32 million and revenue attributable to SRA, D&A, as a percentage of revenue, for the three months ended July 1, 2016 was 3.6%, which is slightly higher than compared to the same period of the prior year.

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Separation and Merger Costs

Separation and merger costs were costs incurred to give effect to Computer Sciences GS’s separation from CSC and subsequent merger with SRA. These costs are primarily comprised of severance and other personnel costs, third-party accounting, legal and other consulting services, as well as information technology infrastructure and application costs. For the three months ended July 1, 2016, separation and merger costs were $5.4 million. Pursuant to the Merger Agreement, all merger costs incurred by Computer Sciences GS Business were paid by CSRA.

Interest Expense, Net

Interest expense of $29.9 million for the three months ended July 1, 2016 increased by $24.4 million compared to $5.5 million of interest expense for the same period of the prior year. Interest expense for the three months ended July 1, 2016 reflects the additional long-term debt incurred in connection with the Spin-Off and Merger transactions in November 2015.

Other (Income) Expense, Net

Other (income) expense, net comprises gains and losses from the sale of businesses and non-operating assets, the impact of movement in foreign currency exchange rates on CSRA's foreign currency denominated assets and liabilities and other miscellaneous gains and losses.

Other expenses of $0.8 million for the three months ended July 1, 2016 decreased compared to other income of $19.3 million for the same period of the prior year. The decrease is primarily due to the pre-tax gain from the divestiture of Welkin Associates Limited (“Welkin”) in the three months ended July 3, 2015.

Taxes

Our effective tax rate (“ETR”) was 35.7% for the three months ended July 1, 2016 and 38.8% for the three months ended July 3, 2015. The lower ETR for the three months ended July 1, 2016 months compared to the three months ended July 3, 2015 was due to the addition of beneficial stock compensation deductions and the absence of adjustments related to the carve-out approach used for tax purposes prior to the Spin-Off in the 2016 period.

Significant management judgment is required in determining our provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. A valuation allowance of $8.7 million has been recorded against deferred tax assets as of July 1, 2016 relating to net operating losses in foreign jurisdictions and state tax carryforwards.

Share-Based Compensation Expense

In connection with the Spin-Off, the equity compensation awards in fiscal 2016 of employees of CSC who became employees of CSRA were converted into equity awards of CSRA having the same terms and conditions as their prior CSC awards.

For the three months ended July 1, 2016, the total expense recognized in CSRA’s results of operations related to equity awards was $3.0 million. See Note 12—Share-Based Compensation Plans for additional information on share-based compensation including unrecognized compensation expense that will impact our earnings in future periods.

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Liquidity and Capital Resources

Cash Flows

		Three Months Ended
(Dollars in millions)		July 1, 2016			July 3, 2015
Cash provided by operating activities	$	156		$	247
Cash provided by (used in) investing activities		(43	)		19
Cash used in financing activities		(110	)		(264	)
Net increase in cash and cash equivalents		3			2
Cash and cash equivalents at beginning of year		130			5
Cash and cash equivalents at end of period	$	133		$	7

Operating Cash Flow

Net cash provided by operating activities for the three months ended July 1, 2016 was $156 million, a decrease of $91 million compared to the three months ended July 3, 2015. This decrease was primarily due to the introduction of the receivable sales activities during the three months ended July 3, 2015. Operating cash flow for the three months ended July 1, 2016 benefited from the inclusion of SRA into our receivable sales activities, including the sale of unbilled SRA receivables.

Investing Cash Flow

Net cash used in investing activities for the three months ended July 1, 2016 was $(43) million, as compared to cash provided by investing activities for the three months ended July 3, 2015 of $19 million. This decline reflects higher purchases of property and equipment in the fiscal year 2017 period as well as proceeds from the sale of Welkin in the fiscal year 2016 period.

Financing Cash Flow

Net cash used in financing activities for the three months ended July 1, 2016 was $(110) million, which was a decrease of $154 million from the three months ended July 3, 2015. This decrease reflects the absence of amounts transferred to CSC and $98 million of debt repayments in the fiscal 2017 period.

Discussion of Financial Condition

Cash and Cash equivalents were $132.8 million and $130.0 million at July 1, 2016 and April 1, 2016, respectively.

After the Spin-Off, CSRA became the primary seller of certain accounts receivable under a Master Accounts Receivable Purchase Agreement (the “Purchase Agreement”) that was first entered into on April 21, 2015 with The Royal Bank of Scotland, PLC (“RBS”), as Purchaser, along with Mitsubishi UFJ Financial Group Ltd, and Bank of Nova Scotia, each as a Participant, for the continuous non-recourse sale of our eligible trade receivables. In June 2016, SRA was added to the Purchase Agreement as an additional seller of accounts receivables. In connection with the addition of the SRA receivables into the facility, the Company evaluated allowances associated with SRA’s government audit activities, receivable aging and specific collectability issues and increased the associated allowance by approximately $3 million in the three months ended July 1, 2016.

Under the Facility, CSRA can sell our eligible receivables, including billed receivables and certain unbilled receivables arising from “cost plus fixed fee” and “time and materials” contracts up to $450 million outstanding at any one time. CSRA has no retained interests in the transferred receivables, and only perform collection and administrative functions for the Purchaser for a servicing fee.

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During the three months ended July 1, 2016, the sellers sold $695.6 million of our billed and unbilled receivables for cash. Collections by the purchaser on the receivables we sold were $579.4 million for the three months ended July 1, 2016. As of July 1, 2016, there was also $13.2 million of cash collected but not remitted due to timing of settlements, which was recorded as restricted cash. Total receivables sold, net of collections and fees related to accounts receivable sales, resulted in increased operating cash flow of $115.6 million for the three months ended July 1, 2016.

Upon consummation of the Mergers, SRA initially maintained a separate accounts receivable purchase agreement under which SRA sold certain accounts receivable to a third party, or the Factor, without recourse to SRA. There were no sales of receivables under this facility during the three months ended July 1, 2016 and the agreement with the Factor was terminated in June 2016.

Liquidity

As of July 1, 2016, CSRA’s total liquidity was $832.8 million, consisting of $132.8 million of cash and cash equivalents and $700.0 million available under CSRA’s revolving credit facility. In the opinion of management, CSRA will be able to meet its liquidity and cash needs for at least the next twelve months through the combination of cash flows from operating activities, available cash balances, and available borrowings under CSRA's revolving credit facility. If these resources need to be augmented, additional cash requirements would likely be financed by the issuance of debt or equity securities. However, there can be no assurances that CSRA will be able to obtain debt financing on acceptable terms in the future.

Our exposure to operational liquidity is primarily from long-term contracts, some of which require significant investment of cash flows from operating activities during the initial phases of the contracts. The recovery of these investments is over the life of the contract and is dependent upon our performance as well as customer acceptance. Continued uncertainty in global economic conditions may also affect our business as customers and suppliers may decide to downsize, defer or cancel contracts, which could negatively affect operating cash flows.

Our primary cash needs continue to be for working capital, capital expenditures, commitments and other discretionary investments. Our ability to fund our operating needs depends, in part, on our ability to continue to generate positive cash flow from operations or, if necessary, raise cash in the capital markets. Longer term, our pension funding obligation represents another potential cash need, depending on asset returns, interest rates and other factors.

At the end of the first quarter of fiscal 2017, CSRA’s ratio of net debt-to-total capitalization was 90.5%, a decrease of 2.2 percentage points from the end of fiscal 2016. The decrease in the ratio was primarily the result of repayments in the amount of $98.0 million during the first quarter of fiscal 2017.

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The following table summarizes CSRA’s capitalization ratios as of the end of the first quarter of fiscal 2017 and fiscal year 2016:

	As of
(Dollars in millions)	July 1, 2016			April 1, 2016
Total debt(7)	$	2,833		$	2,935
Cash and cash equivalents		133			130
Net debt(8)	$	2,700		$	2,805
Total debt	$	2,833		$	2,935
Equity		150			90
Total capitalization	$	2,983		$	3,025
Debt-to-total capitalization		95.0	%	97.0		%
Net debt-to-total capitalization		90.5	%	92.7		%

(7) Total debt is the sum of short and long-term components of GAAP debt and capitalized leases.

(8) Net debt is a non-GAAP measure and our determination of it may not be comparable with calculations of similar measures by other issuers. We calculate net debt by subtracting cash and cash equivalents from total debt (including capitalized leases). We believe that net debt assists in providing a more complete understanding of our financial position and we use it to monitor our financial leverage. We believe that net debt is useful to investors because it provides insights into our financial strength.

Debt Financing

At July 1, 2016, CSRA had $66 million of current maturities of long-term debt, and $2,623 million of long-term debt.

We obtained financing in connection with the Spin-Off and the Mergers under various facilities. See Note 9— Debt in our FY17 1st Quarter Financial Statements and “Liquidity” in our Annual Report on Form 10-K for information about these facilities, including covenants, default provisions, repayment terms, and interest rates of each facility.

Our term loan facilities require us to prepay outstanding term loans, subject to certain exceptions, in the case of excess annual cash flow and in the event of certain asset sales, casualty events and issuances of debt. Any required excess cash flow payments are due within 90 days following the end of the fiscal year. During the first quarter of fiscal 2017, we paid $48.0 million related to FY16 excess cash flow.

In March 2016, we executed a series of hedging transactions to manage the interest rate risk related to $1.4 billion of the Senior Secured Term Loan A facilities. CSRA’s objectives in using cash flow hedges are to add stability to interest expense and to manage its exposure to interest rate movements (see Note 6—Derivative Instruments).

We have liquidity available for debt servicing and other discretionary investments from free cash flow and the Revolving Credit Facility, of which $700 million remained available but undrawn. Debt service in the first five years is expected to be funded from available free cash flow, while still maintaining available liquidity for short-term working capital and other cash requirements needs. Our expected liquidity and capital structure may be impacted, however, by discretionary investments and acquisitions that CSRA could decide to pursue. While the timing and financial magnitude of these possible actions are currently indeterminable, CSRA expects to be able to manage and adjust its capital structure in the future to meet its liquidity needs.

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The amount of indebtedness incurred in connection with the Spin-Off and the Mergers was based on various factors including expected operating results, expected free cash flow generation, credit ratings considerations, ensuring strategic and financial flexibility, anticipated business plans, and general economic conditions. We believe our capital structure and financial strength provide us with financial flexibility in a dynamic industry that we believe affords competitive and strategic advantages to providers that maintain financial flexibility.

Equity Transactions

On November 30, 2015, CSRA’s Board of Directors approved a share repurchase program authorizing up to $400 million in share repurchases of CSRA's outstanding common stock. The timing, volume, and nature of future share repurchases are at the discretion of management and the Audit Committee, and may be suspended or discontinued at any time. CSRA plans to offset equity grants through share repurchases over time, balancing them with debt reduction and other forms of cash deployment. The repurchase program expires on March 31, 2019.

CSRA has remaining authorization to repurchase $350 million of common stock as of July 1, 2016 pursuant to its Share Repurchase Program.

During the fourth quarter of fiscal 2016, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 162,952,919 shares, with a total dividend payout of $16.3 million. Payment of the dividend was made on April 29, 2016 to CSRA stockholders of record at the close of business on April 5, 2016. On May 25, 2016, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share, payable on July 11, 2016 to CSRA stockholders of record at the close of business on June 14, 2016. In the opinion of management, CSRA has sufficient liquidity and expects to continue paying quarterly cash dividends although such payments are subject to continued approval by CSRA's Board of Directors.

Off Balance Sheet Arrangements

As of July 1, 2016, we did not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in our financial condition, revenues, or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Contractual Obligations

CSRA has contractual obligations for capital lease liabilities and other obligations, including our performance guarantees and expiration of the stand-by letters of credit. See Note 15—Commitments and Contingencies in the Consolidated and Condensed Financial Statements for further information about these obligations.

Critical Accounting Estimates

Recent accounting pronouncements and the anticipated impact to CSRA are described in Note 1— Description of the Business, Basis of Presentation and Recent Accounting Pronouncements in the Condensed and Consolidated Financial Statements for the first three months of fiscal 2017 within this Form 10-Q.

Our unaudited Consolidated and Condensed Financial Statements have been prepared in accordance with GAAP. The preparation of unaudited Consolidated and Condensed Financial Statements in accordance with GAAP requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue and expenses, as well as the disclosure of contingent assets and liabilities. We base our estimates and judgments on historical experience and other factors believed to be reasonable under the circumstances. Many of the estimates made are for contract-specific issues. Changes to estimates or assumptions on a specific contract could result in a material adjustment to the unaudited Consolidated and Condensed Financial Statements. See “Critical Accounting Policies” in our Annual Report on Form 10-K for additional information about these estimates. For all of these estimates, we caution that future events rarely develop exactly as forecast, and the best estimates routinely require adjustment.

43

Revenue recognition

Substantially all of our revenue is derived from contracts with departments and agencies of the U.S. federal government, as well as other state and local government agencies. We generate our revenue from the following types of contractual arrangements: time and materials contracts, firm-fixed-price contracts and cost-plus-fee contracts, which comprised 21%, 42%, and 37%, respectively, of our revenue in the first quarter of fiscal year 2017. We also provide services to other businesses of CSC, which are included as related-party revenues for the first quarter of fiscal year 2016. In the first quarter of fiscal year 2017, these services are included in revenues.

Many of our contracts require the use of estimates-at-completion (“EAC”) in the application of the percentage-of-completion accounting method. Contracts that require estimates at completion using the percentage-of-completion method accounted for approximately 37% of our revenues for the three months ended July 1, 2016. When changes in estimates of contract sales or costs occur, we make revisions to EACs and reflect changes in the results of operations as a change in accounting estimate in the period in which the facts that give rise to the revision become known by management. See Note 1— Description of the Business, Basis of Presentation and Recent Accounting Pronouncements in our unaudited Condensed and Consolidated Financial Statements for additional information.

Our U.S. federal government contracts generally contain FAR provisions that enable the customer to terminate a contract for default or for the convenience of the government. At July 1, 2016, we did not have any federal contract terminations in process that would have a material effect on our consolidated financial position, results of operations or cash flows.

Assumptions related to purchase accounting and goodwill

When we acquire a controlling financial interest through a business combination, we use the acquisition method of accounting to allocate the purchase consideration to the assets acquired and liabilities assumed, which are recorded at fair value. Any excess of purchase consideration over the fair value of the assets acquired and liabilities assumed is recognized as goodwill.

Acquisition-related costs are recognized separately from the business combination and are expensed as incurred. The results of operations of acquired businesses are included in our consolidated financial statements from the acquisition date. See Note 7— Goodwill and Other Intangible Assets in our FY17 1st Quarter Financial Statements for further information.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Market risk is the potential loss arising from adverse changes in market rates and market prices such as interest rates or foreign currency exchange rates. We actively monitor these exposures and manage such risks through our regular operating and financing activities or the use of derivative financial instruments.

Our exposure to market risk for changes in interest rates relates primarily to our outstanding debt and cash equivalents, which consist primarily of funds invested in U.S. government insured money-market accounts and prime money-market funds. As of July 1, 2016 and April 1, 2016, we had $133 million and $130 million, respectively, in cash and cash equivalents. The interest expense associated with our term loans and any loans under our revolving credit facility will vary with market rates.

Our exposure to financial risk from changes in interest rates related to our outstanding debt will impact our senior secured loan facilities. Pursuant to our interest rate risk management strategies, we use interest rate cash flow hedges to add stability to our incurrence of interest expense and to manage its exposure to related to interest rate movements (See Note 6 - Derivative Instruments in the unaudited Consolidated and Combined Financial Statements for further discussion). A hypothetical 1% increase in interest rates would have increased the interest expense incurred under our senior secured loan facilities by approximately $13 million as of July 1, 2016, and likewise decreased our net income and cash flows.

44

The return on our cash and cash equivalents balance as of July 1, 2016 and April 3, 2015 was less than 1%; thus, although investment interest rates may continue to decline in the future, the corresponding impact to our interest income, and likewise to our income and cash flow, would not be material.

Our reporting currency is the U.S. dollar (“USD”); however, our foreign business operations, which predominantly provide business processing support services to our U.S. federal government customers, incur expenses denominated in foreign, local currencies. The expenses associated with providing our business processing services are invoiced either in USD based upon the current USD to local currency exchange rates, or in the foreign, local currency. Such expenses expose us to exchange rate fluctuations between USD and the local currency. Historically, we mitigated the volatility relating to these exposures, in part, through the identification of potential foreign currency exposures through the contract bidding and forecasting process that would expand or modify our services. We have also been able to mitigate a portion of foreign currency risk through earnings by matching revenue earned in the same local currency as the expense incurred. However, as fluctuations (including possible devaluations) in currency exchange rates may occur or there may be the imposition of limitations on the conversion of foreign currencies into our reporting currency, we may enter into forward contracts to manage exchange rate volatility. A 1% increase in exchange rates would have increased our cost of services denominated in foreign currencies by $0.3 million in the three months ended July 1, 2016.

We have not entered into any hedging transactions for speculative or trading purposes.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

CSRA’s management, with the participation of CSRA’s Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of CSRA’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of July 1, 2016. Based on that evaluation, CSRA’s Chief Executive Officer and Chief Financial Officer concluded that, as of July 1, 2016, CSRA’s disclosure controls and procedures were effective to ensure that information required to be disclosed in reports that CSRA files or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and (ii) accumulated and communicated to management to allow their timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

Prior to the Spin-Off, we relied on certain financial information and resources of Parent to manage certain aspects of our business and report our results, including investor relations and corporate communications, accounting, tax, legal, human resources and benefit plan administration and reporting, general management, real estate, treasury, including insurance and risk management, and oversight functions such as Board of Directors and internal audit, including compliance with the Sarbanes-Oxley Act of 2002.

We have evaluated the changes in our internal control over financial reporting that occurred during the three months ended July 1, 2016 and concluded that there have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the last fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this Item is set forth in Note 15, Commitments and Contingencies, to the unaudited Consolidated Condensed Financial Statements under the caption “Contingencies,” contained in Part I Item 1 of this Form 10-Q. Such information is incorporated herein by reference and made a part hereof.

Item 1A. Risk Factors

Except for the additional risk factor discussed below, we are not aware of any material changes to the risk factors discussed in Part 1, Item 1A of the Annual Report on Form 10-K for the year ended April 1, 2016.

45

Sales of concentrated positions of our common stock into the market in the future could cause the market price of our common stock to decline, even if our business is performing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. As reported in our annual proxy statement, as of June 13, 2016, our directors, executive officers and our 3 largest stockholders beneficially own, collectively, approximately 27.8% of our outstanding common stock. If one or more of them were to sell a substantial portion of the shares they hold, it could cause our stock price to decline. The sales also could make it more difficult for us to sell equity or equity-related securities at a time and price that we deem appropriate.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

On November 30, 2015, the Board authorized the Share Repurchase Program, pursuant to which CSRA, from time to time, purchases shares of its common stock for an aggregate purchase price not to exceed $400 million. The share repurchases may be executed through various means, including, without limitation, open market transactions, and privately negotiated transactions or otherwise and are in compliance with SEC rules, market conditions and applicable federal and state legal requirements. The timing, volume, and nature of share repurchases are at the discretion of management and may be suspended or discontinued at any time. As of and during the three months ended July 1, 2016, CSRA made no repurchases under the Share Repurchase Program. As of July 1, 2016, CSRA made no repurchases of shares of common stock through open market purchases and remained authorized to repurchase $350 million of common stock under the program.

Item 3. Default Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

None.

Item 5. Other Information

None.

46

Item 6. Exhibits

EXHIBIT INDEX

Exhibit Number	Exhibit Description
10.15	Amendment No. 1 to Second Amended and Restated Master Accounts Receivable Purchase Agreement, dated as of February 26, 2016, among CSRA LLC (f/k/a CSC Government Solutions LLC), the Purchaser parties thereto and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent for the Purchasers
10.16	Second Amendment to Second Amended and Restated Master Accounts Receivable Purchase Agreement, dated as of June 27, 2016, among CSRA LLC (f/k/a CSC Government Solutions LLC), the Purchaser parties thereto and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent for the Purchasers
10.17	Joinder to Receivables Purchase Agreement, dated as of June 27, 2016, among SRA International, Inc., the Purchaser parties thereto and The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as administrative agent for the Purchasers
31.1	Section 302 Certification of Chief Executive Officer
31.2	Section 302 Certification of Chief Financial Officer
32.1	Section 906 Certification of Chief Executive Officer
32.2	Section 906 Certification of Chief Financial Officer
101.INS	XBRL Instance
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Labels
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			CSRA INC.
Dated:	August 10, 2016	By:	/s/ William Luebke
		Name:	William Luebke
		Title:	Controller
			(Principal Accounting Officer)

47

EX-10.15

EXECUTION VERSION

The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch

1251 Avenue of the Americas

New York, New York 10020-1104

February 26, 2016

CSC Government Solutions LLC

3170 Fairview Park Dr.

Falls Church, VA 22042

CSRA Inc. (f/k/a Computer Sciences Government Services Inc.)

3170 Fairview Park Dr.

Falls Church, VA 22042

Re:         Amendment No. 1 to Second Amended and Restated

Master Accounts Receivables Purchase Agreement

Ladies and Gentlemen:

Please refer to the Second Amended and Restated Master Accounts Receivable Purchase Agreement, dated as of October 1, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), among CSC GOVERNMENT SOLUTIONS LLC, a Nevada limited liability company, as the Seller and Seller Representative, each PURCHASER party thereto and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as administrative agent for the Purchasers (the Administrative Agent”). Capitalized terms used but not defined herein have the respective meanings set forth in the Agreement.

The Seller and the Purchasers have agreed to amend the terms of the Agreement as set forth in this letter agreement. Accordingly, the definition of “Payment Amount” in Section 1 of the Agreement shall be amended in its entirety to read as follows:

“Payment Amount” means, as of any given Settlement Date, the difference between (a) the Maximum Funded Amount minus the Funded Amount and (b) the Accrued Aggregate Unreimbursed Purchase Discount minus any Servicing Fee payable to the Seller Representative (for the benefit of the Sellers) on such Settlement Date plus any other amounts owing to the Administrative Agent or any Purchaser by a Seller under this Agreement as of such Settlement Date; provided, however, that if the Administrative Agent does not receive (on or before 12:00 p.m. (New York time)) the full amount of any funding expected from the Purchasers, then any positive Payment Amount will be reduced to $0 in accordance with Section 2.2.”

Furthermore, Section 5.1 of the Agreement shall be amended in its entirety to read as follows:

“Section 5.1Appointment of each Seller as a Servicer. Each Seller hereby agrees to service and administer the Purchased Receivables sold by it as agent for the Administrative Agent and the Purchasers, all on the terms set out in this Agreement. Each Seller shall use its commercially reasonable efforts to collect each Purchased Receivable sold by it as if such Purchased Receivable had not been purchased by the Administrative Agent on behalf of the Purchasers. Each Seller agrees that such Seller shall cooperate with the Administrative Agent and shall take any and all commercially reasonable actions requested by the Administrative Agent including, without limitation, initiating appropriate legal proceedings and exercising all rights and remedies that may be available to the Seller under its commercial arrangements with the Approved Obligors, in each case, in connection with collecting and recovering all amounts owed by any Approved Obligor with respect to such Purchased Receivable. The Administrative Agent (on behalf of the Purchasers) agrees to pay the reasonable costs and expenses (including reasonable attorney’s fees and expenses) incurred by each Seller in connection with the performance by each such Seller of the actions requested by the Administrative Agent and specified in the immediately preceding sentence, provided, however, that the Administrative Agent shall not be responsible for any costs and/or expenses of any Seller with respect to (i) the preservation of any rights of, or the exercise of any rights by, the Administrative Agent under, or the enforcement (whether through legal proceedings or otherwise) of, this Agreement against any Seller and (ii) actions necessary for a Seller to perform its

representations, warranties, covenants and agreements contained in this Agreement (it being understood that any such costs and expenses shall be for the account of the Sellers). Without limiting the foregoing, each Seller agrees to devote to the servicing of Purchased Receivables at least the same amount of time and attention, and to exercise at least the same level of skill, care and diligence in such servicing, as if each Seller were servicing Receivables legally and beneficially owned by it. Each Purchaser shall pay each Seller a Servicing Fee as consideration for the performance of such obligations as servicer under this Section 5.1 and this Agreement. On or before each Settlement Date, the Administrative Agent shall provide to the Seller Representative (on behalf of each Seller) and each Purchaser, a calculation for the servicing fee (the “Servicing Fee”) accrued for the related Settlement Period most recently ended. Such Servicing Fee shall be payable by the Administrative Agent, on behalf of the Purchasers, on such Settlement Date as provided in Section 2.4. The Servicing Fee shall be calculated as follows:

Servicing Fee = TOA x Rate X y/360

Where:         

TermDefinition

“TOA” equals        Total Outstanding Amount of all Purchased

Receivables as of the first day of the relevant

Settlement Period

“Rate” equals        0.03% per annum

“Y”      equals        The number of days in the relevant Settlement Period”

The foregoing amendments are strictly limited to the express terms thereof and, except as provided above, all provisions of the Agreement and the other Purchase Documents shall remain in full force and effect after giving effect hereto.

This letter agreement shall become effective on the date when (i) the Purchasers and the Administrative Agent have received counterparts hereof signed by the Seller and (ii) the Purchasers and the Administrative Agent have received a counterpart of the confirmation and acknowledgement of the Parent Guarantor attached to this letter agreement as Annex I.

This letter agreement (i) shall be governed by, and construed and enforced in accordance with, the laws of the State of New York without regard to any other conflicts of law provisions thereof (other than Sections 5-1401 and 5-1402 of the New York General Obligations Law) and (ii) may be signed in multiple counterparts, each of which shall be an original, but all of which shall constitute one and the same letter agreement. Delivery of a signed copy of a signature page to this letter agreement by facsimile or email transmission (in .PDF format) shall be effective as delivery of a manually signed counterpart hereof. This letter agreement is a Purchase Document.

[signature begin on following page]

Amendment No. 1 to MARPA

IN WITNESS WHEREOF, the undersigned has executed this letter agreement as of the date first set forth above.

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW

YORK BRANCH, as Administrative Agent

By: /S/ Thomas J Educate

Print Name:Thomas J. Educate

Title:Managing Director

Accepted and agreed as of

the date first above written:

CSC GOVERNMENT SOLUTIONS LLC,

AS Seller and Seller Representative

By: /s/ Kevin M. Libby

Title: Vice President and Treasurer

Accepted, agreed and consented to as of

The date first above written:

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW

YORK BRANCH, as Purchaser

By: /S/ Thomas J Educate

Print Name:Thomas J. Educate

Title:Managing Director

THE BANK OF NOVA SCOTIA,

As Purchaser

By: /S/ Jonathan Khan

Print Name:Jonathan Khan

Title:Director, Supply Chain Finance

MIZUHO BANK, LTD.,

As Purchaser

By: /S/ Bertram H. Tang

Print Name:Bertram H. Tang

Title:Authorized Signatory

Amendment No. 1 to MARPA

ANNEX I

CONFIRMATION AND ACKNOWLEDGEMENT

Reference is made to the Guaranty, dated as of October 1, 2015 (as amended, modified or supplemented from time to time, the “Guaranty”), made by the undersigned in favor of The Bank of Tokyo-Mitsubishi UFJ, Ltd., New York Branch, as Administrative Agent. The undersigned hereby consents to the execution and delivery by CSC Government Solutions LLC of the foregoing Amendment No. 1 to the Agreement (the “Amendment”). The undersigned hereby confirms that notwithstanding the effectiveness of the Amendment, the Guaranty shall continue to be in full force and effect.

IN WITNESS WHEREOF, the undersigned has caused this Confirmation and Acknowledgment to be duly executed and delivered as of February 26, 2016.

CSRA Inc. (formerly known as COMPUTER SCIENCES GOVERNMENT SERVICES INC.), as Parent Guarantor

By:/s/ David F Keffer

Print Name: David F. Keffer

Title:EVP, CFO

Amendment No. 1 to MARPA

EX-10.16

EXECUTION VERSION

SECOND AMENDMENT TO SECOND AMENDED AND RESTATED MASTER ACCOUNTS

RECEIVABLE PURCHASE AGREEMENT

This SECOND AMENDMENT to the SECOND AMENDED AND RESTATED MASTER

ACCOUNTS RECEIVABLE PURCHASE AGREEMENT (this “Amendment”), is made and entered into as of June 27, 2016 (as it may be modified, supplemented or amended from time to time in accordance with its terms) by and among the following parties:

(i) CSRA LLC (F/K/A CSC GOVERNMENT SOLUTIONS LLC), a Nevada limited liability company (“CSRA,” the “Seller” and “Seller Representative”);

(ii) each PURCHASER party hereto; and

(iii) THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH (“BTMUNY”),

as administrative agent (the “Administrative Agent”).

BACKGROUND

WHEREAS, the parties hereto have entered into the Second Amended and Restated Master Accounts Receivable Purchase Agreement, dated as of October 1, 2015 (as amended, restated, supplemented, assigned or otherwise modified from time to time, the “Existing Agreement”); and

WHEREAS, the parties hereto seek to modify the Existing Agreement upon the terms hereof.

NOW, THEREFORE, in exchange for good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged and confirmed), the parties hereto agree as follows:

AGREEMENT

1. Definitions. Unless otherwise defined or provided herein, capitalized terms used herein have the meanings attributed thereto in (or by reference in) the Existing Agreement.

2. Amendments to the Existing Agreement. The Existing Agreement is hereby amended as follows:

(a) The definition of “Repurchase Event” set forth in Section 1.1 of the Existing Agreement is amended in its entirety as follows:

“Repurchase Event” means, with respect to any Purchased Receivable: (i) any representation or warranty made by a Seller in Section 9.2 with respect to such Purchased Receivable shall be materially inaccurate, incorrect or untrue on any date as of which it is made or deemed to be made; (ii) a Dispute shall have occurred with respect to such Purchased Receivable; (iii) the breach of any covenant made by a Seller in Section 4.3, Section 5.1, Section 5.2 or Section 10.1 with respect to such Purchased Receivable; or (iv) the Administrative Agent elects to cause the applicable Seller to repurchase an Eligible Unbilled Receivable in accordance with Section 2.9.

(b) Section 2.9 of the Existing Agreement is restated in its entirety as follows:

“2.9 Eligible Unbilled Receivables. The Seller Representative shall procure that each Eligible Unbilled Receivable sold, transferred and assigned to the Administrative Agent hereunder will be the subject of an Invoice as soon as reasonably practicable, and in any event within ten (10) Business Days following the Seller Representative’s receipt of a written request to issue such Invoice from the Administrative Agent; provided, however, that if any Approved Obligor becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due, the Seller Representative shall promptly (and in any event, within five (5) Business Days) issue an Invoice for each Purchased Receivable that is an Eligible Unbilled Receivable payable by such Approved Obligor, and shall provide the Administrative Agent with a copy of each such Invoice. In the event of the occurrence of an event or condition of the type described in clauses (i) and (iii) of the definition of Facility Suspension Event, the Administrative Agent shall have the option to (i) retain ownership of any

Eligible Unbilled Receivable and/or (ii) cause the applicable Seller to repurchase such Eligible Unbilled Receivable from the Administrative Agent pursuant to Section 11. The Administrative Agent shall promptly inform the Seller Representative following any such event or condition of its decision to either retain ownership or cause a Repurchase Event with respect to any such Eligible Unbilled Receivable. In the event that the Administrative Agent elects to retain ownership of any Eligible Unbilled Receivable after any such event or condition, the Seller Representative shall promptly (and in any event, within five (5) Business Days) issue an Invoice for any such retained Eligible Unbilled Receivable. Upon issuance

by the relevant Seller of an Invoice for a Purchased Receivable that is an Eligible Unbilled Receivable, such Purchased Receivable shall immediately become a Billed Receivable for purposes hereof (the date upon which such Purchased Receivable becomes a Billed Receivable, the “Conversion Date”).”

(c) Section 14.3 of the Existing Agreement is amended by replacing the proviso that appears after the semicolon in its entirety with the following new proviso:

“provided that the Administrative Agent or such Purchaser may only exercise its right of setoff in this Section 14.3 if a Facility Suspension Event of the type described in clauses (i) and (iii) of the definition thereof has occurred and is continuing with respect to such Seller.”

3. Conditions to Effectiveness. This Amendment shall be effective as of the date on which (i) the Purchasers receive a counterpart of this Amendment duly executed and delivered by each of the parties hereto and

(ii) the Purchasers shall have received the Confirmation and acknowledgement attached to this Amendment as Annex I duly executed and delivered by an authorized officer of the Guarantor.

4. Certain Representations, Warranties and Covenants. The Seller hereby represents and warrants to the Purchaser, as of the date hereof that:

(a) the representations and warranties made by it in the Existing Agreement and in any other Purchase Document to which it is a party are true and correct both as of the date hereof and immediately after giving effect to this Amendment; and

(b) the execution and delivery by it of this Amendment, and the performance of its obligations under this Amendment, the Existing Agreement (as amended hereby) and the other Purchase Documents to which it is a party are within its organizational powers and have been duly authorized by all necessary organizational action on its part, and this Amendment, the Existing Agreement (as amended hereby) and the other Purchase Documents to which it is a party are its valid and legally binding obligations, enforceable in accordance with its terms, subject to the effect of bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors’ rights generally.

5. Reference to, and Effect on the Existing Agreement and the Purchase Documents.

(a) The Existing Agreement (except as specifically amended herein) and the other Purchase Documents shall remain in full force and effect and the Existing Agreement and such other Purchase Documents are hereby ratified and confirmed in all respects by each of the parties hereto.

(b) The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of Purchaser, nor constitute a waiver of any provision of, the Existing Agreement or any other Purchase Document.

(c) After this Amendment becomes effective, all references in the Existing Agreement or in any other Purchase Document to “the Master Accounts Receivable Purchase Agreement,” “this Agreement,” “hereof,” “herein” or words of similar effect, in each case referring to the Existing Agreement, shall be deemed to be references to the Existing Agreement as amended by this Amendment.

(d) To the extent that the consent of any party hereto, in any capacity, is required under the Purchase Documents or any other agreement entered into in connection with the Purchase Documents with respect to any of the amendments or other matters set forth herein, such Person hereby grants such consent.

6. Further Assurances. The Seller agrees to do all such things and execute all such documents and instruments as the Purchaser may reasonably consider necessary or desirable to give full effect to the transaction contemplated by this Amendment and the documents, instruments and agreements executed in connection herewith.

7. Costs and Expenses. The Seller agrees to pay on demand all reasonable costs (including reasonable attorneys’ fees and expenses) and expenses the Administrative Agent incurs in connection with the preparation, negotiation, documentation and delivery of this Amendment.

8. Purchase Document. This Amendment is a Purchase Document.

9. Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the Seller and the Administrative Agent and each Purchaser, and their respective successors and assigns.

10. Execution in Counterparts. This Amendment may be executed in any number of counterparts, and by the different parties hereto on separate counterparts; each such counterpart shall be deemed an original and all of such counterparts

taken together shall be deemed to constitute one and the same instrument. A facsimile or electronic copy of an executed counterpart of this Amendment shall be effective as an original for all purposes.

11. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND

CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT

REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW THEREOF (OTHER THAN SECTIONS 51401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW.

12. Section Headings. Section headings in this Amendment are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

13. Severability. Any provisions of this Amendment which are prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized, as of the date first above written.

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW

YORK BRANCH,as Administrative Agent

By: Thomas J. Educate

Print Name: Thomas J. Educate

Title: Managing Director

Accepted, agreed, and consented to as of

the date first above written:

CSRA LLC (f/d/a CSC GOVERNMENT SOLUTIONS LLC),    as Seller and Seller Representative

By: /s/ Kevin M. Libby

Print Name:Kevin M. Libby

Title: Vice President and Treasurer

Accepted, agreed and consented to as of

The date first above written:

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW

YORK BRANCH, as Purchaser

By: /S/ Thomas J Educate

Print Name:Thomas J. Educate

Title:Managing Director

THE BANK OF NOVA SCOTIA,

As Purchaser

By: /S/ Jonathan Khan

Print Name:Jonathan Khan

Title:Director

MIZUHO BANK, LTD.,

As Purchaser

By: /S/ David Lim

Print Name:David Lim

Title:Authorized Signatory

ANNEX I

CONFIRMATION AND ACKNOWLEDGEMENT

This CONFIRMATION AND ACKNOWLEDGEMENT (“Confirmation”), is executed and delivered by CSRA Inc. (f/k/a Computer Sciences Government Services Inc.), a Nevada corporation (the “Guarantor”).

1. Reference is made to the Guaranty, dated as of October 1, 2015 (as amended, modified or supplemented from time to time, the “Guaranty”), delivered by the Guarantor in connection with the Agreement (defined below).

2. Reference is further made to the First Amendment to the Agreement, dated as of the date hereof (the “Amendment”), to the Second Amended and Restated Master Accounts Receivable Purchase Agreement, dated October 1, 2015 (as amended, restated, supplemented or otherwise modified from time to time, the “Agreement”), among CSC GOVERNMENT SOLUTIONS LLC, a Nevada limited liability company, each PURCHASER party thereto and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Administrative Agent.

3. The Guarantor hereby consents to the Amendment. The Guarantor hereby confirms that notwithstanding the effectiveness of the Amendment, the Guaranty shall continue in full force and effect.

IN WITNESS WHEREOF, the undersigned has caused this Confirmation and Acknowledgment to be duly executed and delivered as of February 26, 2016.

CSRA Inc. (formerly known as COMPUTER SCIENCES GOVERNMENT SERVICES INC.), as Parent Guarantor

By:/s/ David F Keffer

Print Name: David F. Keffer

Title:EVP, CFO

EX-10.17

EXECUTION VERSION

JOINDER TO RECEIVABLES PURCHASE AGREEMENT

This JOINDER TO RECEIVABLES PURCHASE AGREEMENT dated as of June 27, 2016 (this "Agreement"), is by and among SRA INTERNATIONAL, INC., a corporation organized in the state of Virginia (the “New Seller”), the PURCHASERS party hereto and THE BANK OF TOKYOMITSUBISHI UFJ, LTD., NEW YORK BRANCH, in its capacity as Administrative Agent (as defined below) under the RPA (as defined below). Capitalized terms used and not defined herein have the meanings given to them in the RPA.

WITNESSETH THAT:

WHEREAS, certain parties (the “Existing Sellers”) have entered into that certain Second Amended and Restated Master Accounts Receivable Purchase Agreement, dated October 1, 2015 (the “RPA”), among CSRA LLC (f/k/a CSC GOVERNMENT SOLUTIONS LLC) (“CSRALLC”), a Nevada limited liability company, as a Seller and as Seller Representative (each of CSRALLC and any Additional Sellers (as defined in the RPA), a “Seller” and collectively the “Sellers”), the PURCHASERS described therein and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as administrative agent for the Purchasers (“BTMU” and the “Administrative Agent”) as amended through that certain amendment thereto as dated on the date hereof; and

WHEREAS, New Seller desires to be joined as a party to the RPA;

NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of accommodations given or to be given, to New Seller and the Existing Sellers by the Purchasers from time to time, New Seller hereby agrees as follows:

1. New Seller acknowledges and agrees that it is a “Seller” under the RPA, effective upon the date of New Seller’s execution of this Agreement. All references in the RPA to the term “Seller” or “Sellers” shall be deemed to include the New Seller. Without limiting the generality of the foregoing, New Seller hereby repeats and reaffirms all covenants, agreements, representations and warranties made or given by a Seller contained in the RPA, and appoints the Seller Representative as its agent, attorney-in-fact and representative in accordance with Section

2.5 of the RPA.

2. For purposes of the RPA, the “Existing Account” with respect to the New Seller will be (i) the account of the New Seller located at Bank of America, N.A. with account number [Redacted] and (ii) any other deposit account located at a depository bank satisfactory to the Administrative Agent, in each case, only so long as such accounts are subject to an Account Control Agreement.

3. For purposes of the RPA, the “Collection Account” with respect to the New Seller will be (i) the account of the New Seller located at Bank of America, N.A. with account number [Redacted] and (ii) any other deposit account located at a depository bank satisfactory to the Administrative Agent, in each case, only so long as such accounts are subject to an Account Control Agreement.

4. For purposes of Schedule B to the RPA, New Seller’s UCC Information shall be as follows:

(a) Name:                 SRA International, Inc.

(b) Chief Executive Office:         3170 Fairview Park Drive

Falls Church, VA 22042

(c) Jurisdiction of Organization:         Virginia

(d) Organizational Number:         0164564-7

(e) FEIN:                54-1360804

(f) Tradenames:                None

(g) Changes in Location, Name and

Corporate Organization in the last 5

years:                     See Attached Schedule 1

5. New Seller agrees to execute and deliver such further instruments and documents and do such further acts and things as the Administrative Agent may deem reasonably necessary or proper to carry out more effectively the purposes of this Agreement.

6. No reference to this Agreement need be made in the RPA or in any other Purchase Document or other document or instrument making reference to the same, any reference to Purchase Documents in any of such to be deemed a reference to the RPA, or other Purchase Documents, as applicable, as modified hereby.

7. The laws of the State of New York (without regard to conflicts of laws principles) shall govern all matters arising out of, in connection with or relating to this Agreement, including, without limitation, its validity, interpretation, construction, performance and enforcement.

Additional Special Provisions

8. On May 20, 2016, CSRALLC changed its legal name from “CSC Government Solutions LLC” to “CSRA LLC”. In effectuating such change, CSRALLC did not comply with the prior notice requirements described in Section 10.1(c) of the RPA. By executing this Agreement, each Purchaser hereby waives such non-compliance.

9. Pursuant to Section 14.22 of the RPA, the Seller Representative may, from time to time, request that one or more account debtors be added as additional Approved Obligors under this Agreement. The Seller Representative has requested that the Railroad Retirement Board, the Corporation for National & Community Service and the Securities and Exchange Commission be added as Approved Obligors with Approved Obligor Buffer Periods of 50 days. By executing this Agreement, each Purchaser hereby agrees to such request and confirms that each such Person will immediately upon the effectiveness of this Agreement become an Approved Obligor. Attached to this Agreement is an updated Schedule A to the RPA reflecting such designation.

[Remainder of Page Intentionally Left Blank]

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered by their proper and duly authorized officers as of the day and year first above written.

NEW SELLER:

SRA INTERNATIONAL, INC.

as Seller

By: /s/ William Luebke

Name: William Luebke

Title: Vice President and Controller

ACKNOWLEDGED AND ACCEPTED AS OF THE DATE FIRST WRITTEN ABOVE:

ADMINISTRATIVE AGENT:

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH

By: /S/ Thomas J Educate

Name: Thomas J. Educate

Title: Managing Director

PURCHASER(S):

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.,

NEW YORK BRANCH, as Purchaser

By: /S/ Thomas J Educate

Name: Thomas J. Educate

Title: Managing Director

THE BANK OF NOVA SCOTIA,

As Purchaser

By: /S/ Jonathan Khan

Name: Jonathan Khan

Title: Director

MIZUHO BANK, LTD.,

As Purchaser

By: /S/ David Lim

Name: David Lim

Title: Authorized Signatory

EXISTING SELLERS:

CSRA LLC (f/k/a CS GOVERNMANT SOLUTIONS

LLC), as a Seller and Seller Representative

By: /s/ Helaine G. Elderkin

Name: Helaine G. Elderkin

Title: Vice President and Secretary

ANNEX I

CONFIRMATION AND ACKNOWLEDGEMENT

This CONFIRMATION AND ACKNOWLEDGEMENT (“Confirmation”), is executed and delivered by CSRA Inc. (f/k/a Computer Sciences Government Services Inc.), a Nevada corporation (the “Guarantor”).

1. Reference is made to the Guaranty, dated as of October 1, 2015 (as amended, modified or supplemented from time to time, the “Guaranty”), delivered by the Guarantor in connection with the Agreement (defined below).

2. Reference is further made to the Joinder to Receivables Purchase Agreement, dated as of the date hereof (the “Joinder”), to the Second Amended and Restated Master Accounts Receivable Purchase Agreement, dated as of October 1, 2015, among CRRA LLC (f/k/aCSC GOVERNMENT SOLUTIONS LLC), a Nevada limited liability company, each PURCHASER party thereto and THE BANK OF TOKYO-MITSUBISHI UFJ, LTD., NEW YORK BRANCH, as Administrative Agent (as amended, restated, supplemented or otherwise modified from time to time).

3. The Guarantor hereby consents to the Joinder. The Guarantor hereby confirms that, notwithstanding the effectiveness of the Joinder, the Guaranty shall continue in full force and effect.

IN WITNESS WHEREOF, the Guarantor has caused this Confirmation to be duly executed and delivered on the date first set forth above.

CSRA INC. (formerly known as COMPUTER SCIENCES GOVERNMENT SERVICES INC.), as Parent Guarantor

By:/s/ David F Keffer

Print Name: David F. Keffer

Title:Chief Financial Officer

Schedule 1

SRA’s corporate offices changed in December 2015 from:

4300 Fair Lakes Court

Fairfax, VA 22033

to the following:

[CEO]

3170 Fairview Park Drive

Falls Church, VA 22042

[Tax Function]

15036 Conference Center Drive

Chantilly, VA 20151

Name Changes:

SRA International, Inc. changed its name from Systems Research and Applications Corporation (“SRAC”) on February 3, 2012

SRAC merged with SRA International, Inc. (Delaware) (February 3, 2012)

SRAC merged with Constella Group LLC (April 24, 2015); SRAC survived

SRAC merged with Platinum Solutions, Inc. (April 14, 2015); SRAC survived

SRAC merged with Touchstone Consulting Group, Inc. (November 8, 2013); SRAC survived

SRAC acquired National Security Solutions business of MorganFranklin Corporation (December 16, 2012); SRAC survived

SRAC merged with Interface and Control Systems, Inc. (March 14, 2012); SRAC survived

SRAC merged with Raba Technologies, LLC (March 21, 2012); SRAC survived

SRAC merged with Perrin Quarles Associates, Inc. (March 9, 2012); SRAC survived

SRAC merged with CMA Government Solutions, Inc. (March 9, 2012); SRAC survived

SRAC merged with Sentech Holdings, Inc. (March 9, 2012); SRAC survived

SRAC merged with Sterling Merger Inc. (July 20, 2011); SRAC survived

SCHEDULE A TO

SECOND AMENDED AND RESTATED MASTER ACCOUNTS RECEIVABLE PURCHASE AGREEMENT

Approved Obligors

Approved Obligor Buffer Period

Approved Obligor(days)

Legislative Branch                         50

Judicial Branch                             50

Department of Agriculture                     50

Department of Commerce                         50

Department of Defense-Military Programs                 50

Department of Defense-ARMY                     50

Department of Defense-NAVY / Marine Corps             50

Department of Defense-Air Force                     50

Department of Defense-All Other                     50

Department of Health and Human Services                 50

Department of the Interior                         50

Department of Justice                         50

Department of Labor                         50

Department of State                         50

Department of the Treasury                     50

Social Security Administration                     50

Department of Education                         50

Department of Energy                         50

Environmental Protection Agency                     50

Department of Transportation                     50

General Services Administration                     50

Department of Homeland Security                     50

Department of Housing and Urban Development             50

National Aeronautics and Space Administration             50

Office of Personnel Management                     50

Small Business Administration                     50

Department of Veterans Affairs                     50

Executive Office of the President                     50

International Assistance Programs-Department of State         50

Equal Employment Opportunity Commission             50

Federal Election Commission                     50

Federal Trade Commission                     50

National Science Foundation                     50

Railroad Retirement Board                     50

Corporation for National & Community Service             50

Securities and Exchange Commission                50

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO RULES 13a-14(a) AND 15a-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, Lawrence B. Prior III, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CSRA Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 10, 2016 /s/ Lawrence B. Prior III     
Name: Lawrence B. Prior III
Title:     President and Chief Executive Officer

1

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO RULES 13a-14(a) AND 15a-14(a)

OF THE SECURITIES EXCHANGE ACT OF 1934

I, David F. Keffer, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of CSRA Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 10, 2016 /s/ David F. Keffer    
Name: David F. Keffer
Title:     Chief Financial Officer

1

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Lawrence B. Prior III, President and Chief Executive Officer of CSRA Inc. (the “Company”), hereby certify, that, to my knowledge:

1. The Quarterly Report on Form 10-Q for the period ended July 1, 2016 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

CSRA INC.                    

Date: August 10, 2016 /s/ Lawrence B. Prior III     
Name: Lawrence B. Prior III
Title:     President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, David F. Keffer, Chief Financial Officer of CSRA Inc. (the “Company”), hereby certify, that, to my knowledge:

1. The Quarterly Report on Form 10-Q for the period ended July 1, 2016 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

CSRA INC.    

Date: August 10, 2016 /s/ David F. Keffer     
Name: David F. Keffer
Title:     Chief Financial Officer

XML

Document and Entity Information - shares	3 Months Ended
	Jul. 01, 2016	Aug. 05, 2016
Document And Entity Information [Abstract]
Entity Registrant Name	CSRA INC.
Entity Central Index Key	0001646383
Current Fiscal Year End Date	--03-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Jul. 01, 2016
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		163,628,013

XML

CONSOLIDATED AND CONDENSED BALANCE SHEETS (unaudited) - USD ($) $ in Millions	Jul. 01, 2016	Apr. 01, 2016
Current assets
Cash and cash equivalents	$ 133	$ 130
Receivables, net of allowance for doubtful accounts of $25 and $21, respectively	743	751
Prepaid expenses and other current assets	110	123
Total current assets	986	1,004
Intangible and other assets
Goodwill	2,332	2,332
Customer-related and other intangible assets, net of accumulated amortization of $230 and $201, respectively	839	870
Software, net of accumulated amortization of $98 and $95, respectively	44	41
Other assets	69	69
Total intangible and other assets	3,284	3,312
Property and equipment, net of accumulated depreciation of $779 and $773, respectively	514	530
Total assets	4,784	4,846
Current liabilities
Accounts payable	185	170
Accrued payroll and related costs	187	200
Accrued expenses and other current liabilities	490	528
Current capital lease liability	48	42
Current maturities of long-term debt	66	128
Dividends payable	18	18
Total current liabilities	994	1,086
Long-term debt, net of current maturities	2,623	2,656
Noncurrent capital lease liability	96	109
Deferred income tax liabilities	156	163
Other long-term liabilities	765	742
Commitments and contingent liabilities
Equity
Common stock, $0.001 par value, 750,000,000 shares authorized, 163,603,851 and 162,925,821 shares issued, respectively and 163,489,212 and 162,925,821 shares outstanding, respectively	0	0
Additional paid-in capital	133	117
Accumulated earnings (deficit)	(25)	(74)
Accumulated other comprehensive income	13	21
Total CSRA stockholders’ equity	121	64
Noncontrolling interests	29	26
Total equity	150	90
Total liabilities and equity	$ 4,784	$ 4,846

XML

CONSOLIDATED AND CONDENSED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions	Jul. 01, 2016	Apr. 01, 2016
Allowance for doubtful accounts	$ 25	$ 21
Finite-lived intangible assets, accumulated amortization	328	296
Plant, property and equipment, accumulated depreciation	$ 779	$ 773
Common stock - par value (in USD per share)	$ 0.001	$ 0.001
Common stock - shares authorized (in shares)	750,000,000	750,000,000
Common stock - shares issued (in shares)	163,603,851	162,925,821
Common stock - shares outstanding (in shares)	163,489,212	162,925,821
Customer-related and other intangible assets
Finite-lived intangible assets, accumulated amortization	$ 230	$ 201
Software
Finite-lived intangible assets, accumulated amortization	$ 98	$ 95

XML

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (unaudited) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Income Statement [Abstract]
Revenue	$ 1,254	$ 957
Related-party revenue	0	2
Total revenue	1,254	959
Cost of services	991	773
Related-party cost of services	0	2
Total cost of services (excludes depreciation and amortization)	991	775
Selling, general and administrative expenses	56	41
Separation and merger costs	5	15
Depreciation and amortization	65	33
Interest expense, net	30	5
Other expense (income), net	1	(19)
Total costs and expenses	1,148	850
Income before income taxes	106	109
Income tax expense	38	42
Net income	68	67
Less: noncontrolling interests	3	4
Net income attributable to CSRA common stockholders	$ 65	$ 63
Earnings per common share
Earnings (loss) per common share - Basic (in dollars per share)	$ 0.40	$ 0.45
Earnings (loss) per common share - Diluted (in dollars per share)	$ 0.39	$ 0.45
Common share information
Common shares outstanding for basic EPS (in shares)	163,275,412	139,128,158
Dilutive effect of stock options and equity awards (in shares)	1,663,182	0
Weighted average number of common shares outstanding - diluted (in shares)	164,938,594	139,128,158
Cash dividend per common share (in dollars per share)	$ 0.1	$ 0

XML

CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Statement of Comprehensive Income [Abstract]
Net income	$ 68	$ 67
Other comprehensive (loss) income, net of taxes, related to:
Amortization of prior service cost	(2)	(1)
Foreign currency translation adjustments	0	0
Unrealized loss on interest rate swaps	(6)	0
Other comprehensive income (loss), net of taxes	(8)	(1)
Comprehensive income	60	66
Less: comprehensive income attributable to noncontrolling interest, net of taxes	3	4
Comprehensive income attributable to CSRA common stockholders	$ 57	$ 62

XML

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Cash flows from operating activities
Net income	$ 68	$ 67
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	67	35
Stock-based compensation	3	(1)
Excess tax benefit from stock compensation	(1)	0
Net (gain) loss on dispositions of businesses and assets	2	(17)
Changes in assets and liabilities, net of acquisitions and dispositions:
Decrease in assets	13	203
Decrease in liabilities	(2)	(40)
Other operating activities, net	6	0
Cash provided by operating activities	156	247
Cash flows from investing activities
Purchases of property and equipment	(34)	(15)
Proceeds from business dispositions	0	34
Other investing activities	(9)	0
Cash provided by (used in) investing activities	(43)	19
Cash flows from financing activities
Payments of lines of credit	(48)	0
Payments of long-term debt	(50)	0
Proceeds from stock options and other common stock transactions	8	0
Dividends paid	(18)	0
Payments on lease liability	(7)	(5)
Net transfers to CSC	0	(259)
Other financing activities	5	0
Cash used in financing activities	(110)	(264)
Net increase in cash and cash equivalents	3	2
Cash and cash equivalents at beginning of period	130	5
Cash and cash equivalents at end of period	133	7
Supplemental cash flow information:
Cash paid for income taxes	2	42
Cash paid for interest	28	5
Non-cash investing activities	13	9
Non-cash operating activities	$ 4	$ 0

XML

Description of the Business, Basis of Presentation and Recent Accounting Pronouncements

3 Months Ended

Jul. 01, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of the Business, Basis of Presentation and Recent Accounting Pronouncements

Description of the Business, Basis of Presentation and Recent Accounting Pronouncements

Description of the Business

CSRA Inc. (“CSRA” or the “Company”) is a provider of IT and professional services to U.S. government organizations. CSRA delivers IT, mission, and operations-related services across the U.S. federal government to the Department of Defense (“DoD”), the intelligence community and homeland security, civil and healthcare agencies, as well as to certain state and local government agencies through two business segments: (1) Defense and Intelligence and (2) Civil.

The Spin-Off and the Mergers

On November 27, 2015, Computer Sciences Corporation (“CSC” or “Parent”) completed the spin-off of CSRA, including the Computer Sciences GS Business to CSC shareholders of record (the “Spin-Off”). Following the Spin-Off, on November 30, 2015, CSRA also completed two mergers, which resulted in SRA Companies, Inc. (“SRA Parent”) merging with and into a wholly owned subsidiary of CSRA (the “Mergers”). As a result, SRA International Inc. (“SRA”) became an indirect wholly owned subsidiary of CSRA.

Basis of Presentation

The accompanying unaudited Consolidated and Condensed Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission, and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended April 1, 2016. The interim period unaudited Consolidated and Condensed Financial Statements are presented as described below.

Prior to the Spin-Off, the Company consisted of the business of CSC’s North American Public Sector segment and did not operate as a separate, stand-alone entity. Consequently, the period prior to the Spin-Off, as of and for the three months ended July 3, 2015, consists solely of the accounts and results of the Computer Sciences GS Business. The period subsequent to the Spin-Off and the Mergers, as of and for the three months ended July 1, 2016, consists of the consolidated accounts of CSRA and its wholly owned subsidiaries, which include the activity and operating results of SRA. All intercompany transactions and balances have been eliminated.

Certain information and disclosures normally required for annual financial statements have been condensed or omitted pursuant to 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 accompanying unaudited financial statements for the period prior to the Spin-Off are prepared on a carved-out and combined basis from the financial statements of CSC. Such carved-out and combined amounts were determined using the historical results of operations and carrying amounts of the assets and liabilities transferred to CSRA. Related-party transactions between CSRA and CSC or the Computer Sciences GS Business and other businesses of CSC are reflected as related-party transactions. For additional information, see Note 2—Related-Party Transactions and Corporate Allocations.

For the period prior to the Spin-Off, the unaudited Combined Condensed Financial Statements include all revenues and costs directly attributable to the Computer Sciences GS Business and an allocation of expenses related to certain CSC corporate functions, including, but not limited to, senior management, legal, human resources, finance, IT and other shared services. These expenses had been allocated to the Computer Sciences GS Business based on direct usage or benefit where identifiable, with the remainder allocated on a pro rata basis of revenues, headcount, square footage, number of transactions or other measures. The Computer Sciences GS Business considered these allocations to be a reasonable reflection of the utilization of services by, or benefit provided to it. However, the allocations may not be indicative of the actual expense that would have been incurred had the Computer Sciences GS Business operated as an independent, stand-alone entity for the period presented.

Prior to the Spin-Off, CSC maintained various benefit and share-based compensation plans at a corporate level and other benefit plans at a subsidiary level. The employees of CSRA participated in those plans and a portion of the cost of those plans for the period prior to the Spin-Off is included in the unaudited Consolidated and Condensed Financial Statements for the period prior to the Spin-Off. However, the unaudited Combined Condensed Balance Sheets do not include any net benefit plan obligations unless the benefit plan covered only the Company’s active, retired and other former employees or any expense related to share­ based compensation plans. See Notes 11—Pension and Other Postretirement Benefit Plans and Note 12—Share Based Compensation Plans for further information about our benefit plans and share-based compensation, respectively.

For the period presented prior to the Spin-Off, the unaudited Combined and Condensed Financial Statements include current and deferred income tax expense that has been determined for the legacy Computer Sciences GS Business as if it were a separate taxpayer (i.e., following the separate return methodology).

CSRA reports its results based on a fiscal year convention that comprises four thirteen-week quarters. Every fifth year includes an additional week in the first quarter to prevent the fiscal year from moving from an approximate end of March date. For accounting purposes, the unaudited Consolidated and Condensed Financial Statements reflect the financial results of SRA for the three months ended June 30, 2016 combined with the Computer Sciences GS Business for the three months ended July 1, 2016.

CSRA’s income before income taxes and noncontrolling interest included gross favorable and unfavorable adjustments of $11 million and $(8) million, respectively, due to changes in estimated profitability on fixed price contracts accounted for under the percentage-of-completion method, for the three months ended July 1, 2016, compared to $22 million and $(5) million, respectively, for the three months ended July 3, 2015.

Unbilled recoverable amounts under contracts in progress do not have an allowance for credit losses and, therefore, any adjustments to unbilled recoverable amounts under contracts in progress related to credit quality would be accounted for as a reduction of revenue. Unbilled recoverable amounts under contracts in progress resulting from sales, primarily to the U.S. and other governments, that are expected to be collected after one year totaled $12.9 million and $14.4 million as of July 1, 2016 and April 1, 2016, respectively.

Depreciation expense was $32.4 million and $27.6 million for the three months ended July 1, 2016 and July 3, 2015, respectively.

Use of Estimates

GAAP requires management to make estimates and assumptions that affect certain amounts reported in the Consolidated and Condensed Financial Statements and accompanying notes. These estimates are based on management’s best knowledge of historical experience, current events and various other assumptions that management considers reasonable under the circumstances. Actual results could differ from those estimates. Amounts subject to significant judgment and/or estimates include, but are not limited to, determining the fair value of asset acquired and liabilities assumed, costs to complete fixed-price contracts, cash flows used in the evaluation of impairment of goodwill and other long-lived intangible assets, certain deferred costs, collectability of receivables, reserves for tax benefits and valuation allowances on deferred tax assets, loss accruals for litigation, and inputs used for computing share-based compensation and pension related liabilities.

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. The accounting guidance for fair value measurements establishes a three level fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2— Quoted prices for similar assets or liabilities or quoted market prices for identical or similar assets in markets that are not active.     

Level 3— Valuations derived from valuation techniques in which one or more significant inputs are observable.

Our assets and liabilities which are valued using the fair value measurement guidance, on a recurring basis, include pension assets and derivative instruments, consisting of interest rate swap contracts and total return swaps. Our pension assets are valued using model based pricing methods that use observable market data; as such these inputs are considered Level 2 inputs. The fair value of interest rate swaps is estimated based on valuation models that use observable interest rate yield curves as inputs. Total return swaps are settled on the last day of every fiscal month. Therefore, the value of any total return swaps outstanding as of any balance sheet date is not material. The inputs used to estimate the fair value of the Company's derivative instruments are classified as Level 2. No significant assets or liabilities are measured at fair value on a recurring basis using significant unobservable (Level 3) inputs.

Certain assets and liabilities are measured at fair value on a non-recurring basis. These include assets and liabilities acquired in a business combination, equity-method investments and long-lived assets, which would be recognized at fair value if deemed to be impaired or if reclassified as assets held for sale. The fair value in these instances would be determined using Level 3 inputs.

The Company’s financial instruments include cash, trade receivables, vendor payables, derivative financial instruments, and debt. As of July 1, 2016, the carrying value of cash, trade receivables, and vendor payables approximated their fair value. The carrying amounts of the Company’s financial instruments with short-term maturities are deemed to approximate their market values. The carrying amount of the Company’s long-term debt, excluding capital leases was $2.6 billion and $2.7 billion at July 1, 2016 and April 1, 2016, respectively, and approximated its fair value on July 1, 2016, based on recent trading activity. The fair value of long-term debt is estimated based on the current interest rates offered to the Company for instruments with similar terms and remaining maturities and are classified as Level 2.

Recent Accounting Pronouncements

New Accounting Standards

During the three months ended July 1, 2016, CSRA adopted the following Accounting Standard Updates (“ASUs”):

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) (“ASU 2016-09”), which simplifies several aspects of accounting for share-based payment award transactions related to accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification of employee taxes paid on the statements of cash flows when an employer withholds shares for tax-withholding purposes. The standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. At implementation of ASU 2016-09, a company may elect to adopt certain simplifications on a prospective or retrospective basis.

CSRA early adopted ASU 2016-09, effective for the period ended July 1, 2016. Certain of the simplification provisions were not applicable to CRSA. The primary impact of adoption was our election to no longer estimate forfeitures, but instead account for the forfeitures as they occur.  The change in accounting for forfeitures was applied on a modified retrospective basis; accordingly, a cumulative adjustment of $1.1 million was recognized as a reduction of accumulated earnings (deficit) upon adoption. The Company also adopted the simplification provision requiring recognition of excess tax benefits in the income statement as a discrete event and the provision related to the presentation of excess tax benefits and deficiencies within operating activities in the statement of cash flows on a prospective basis, beginning in the three months ended July 1, 2016. The adoption of this provision was not material to the Company’s financial results for the period.

Standards Issued But Not Yet Effective

The following ASUs were recently issued but have not yet been adopted by CSRA:

In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard, ASC Topic 606, Revenue from Contracts with Customers that will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements. On July 9, 2015, the FASB approved a one-year deferral of the effective date, which for CSRA would make the standard effective at the start of fiscal year 2019 (April 1, 2018). The FASB provided an option that would permit us the ability to adopt the standard beginning fiscal year 2018 (April 1, 2017). Early adoption prior to fiscal year 2018 is not permitted. The new standard may be adopted either retrospectively or on a modified retrospective basis whereby the new standard would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to beginning retained earnings at the effective date for existing contracts with remaining performance obligations.

The new standard requires us to identify contractual performance obligations and determine when revenue should be recognized. This and other requirements could change the method or timing of revenue recognition for our firm-fixed-price and cost-reimbursable-plus-fee contract portfolio. As a result, we are applying an integrated approach to analyzing the standard’s impact on our contract portfolio, including a review of accounting policies and practices, evaluating differences from applying the requirements of the new standard to our contracts and business practices, and assessing the need for system changes or enhancements. As changes in estimated profit will be recognized in the period they are identified, rather than prospectively over the remaining contract term, the impact of revisions of contract estimates may be larger and potentially more variable from period to period. Anticipated losses on contracts will continue to be recognized in the period they are identified. While our assessment continues, we have not yet selected a transition date or method nor have we yet determined the effect of the adoption of this standard on our Consolidated and Condensed Financial Statements and, as a result, our evaluation of the effect of adoption will extend into future periods.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes the current guidance related to accounting for leases. The guidance requires lessees to recognize most leases on-balance sheet as a right of use asset and lease liability. ASU 2016-02 will also require expanded qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from CSRA leases. The standard is required to be adopted using the modified retrospective approach. The standard will be effective for the first interim period within annual periods beginning after December 15, 2019 with early adoption permitted. CSRA is currently evaluating the impact of adoption on CSRA’s Consolidated and Condensed Financial Statements.

Other recently issued ASUs effective after July 1, 2016 are not expected to have a material effect on CSRA’s Consolidated and Condensed Financial Statements.

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Related-Party Transactions and Corporate Allocations

3 Months Ended

Jul. 01, 2016

Related Party Transactions [Abstract]

Related-Party Transactions and Corporate Allocations

Related-Party Transactions and Corporate Allocations

Corporate Allocations

The unaudited Consolidated and Condensed Financial Statements include an allocation of general corporate expenses from CSC for the period prior to Spin-Off. The financial information in these unaudited Consolidated and Condensed Financial Statements does not necessarily include all the expenses that would have been incurred by CSRA had it been a separate, stand-alone entity during that time. The management of CSRA considered these allocations to be a reasonable reflection of the utilization of services by, or the benefits provided to, it. The allocation methods include relative headcount, actual services rendered and relative space utilization. Allocations for management costs and corporate support services provided to CSRA totaled $56.6 million for the three months ended July 3, 2015. This amount includes costs for corporate functions, including, but not limited to, senior management, legal, human resources, finance, IT and other shared services. Following the Spin-Off, CSRA performs all corporate functions that were previously performed by CSC.

Transition Agreements

In connection with the separation and distribution, CSRA entered into certain agreements that govern the respective rights and responsibilities between CSC and CSRA. CSRA entered into an Intellectual Property Matters Agreement with CSC that governs the respective rights and responsibilities between CSRA and CSC with respect to intellectual property owned or used by each of the companies. Pursuant to the Intellectual Property Matters Agreement, CSC granted CSRA a perpetual, royalty-free, non-assignable license to certain know-how, certain software products, trademarks and workflow and design methodologies.

CSRA pays CSC an annual net maintenance fee of $30.0 million per year for five years in exchange for maintenance and support of products licensed from CSC. On December 9, 2015, CSRA paid the maintenance fee for year one, which is included in Prepaid expenses and other current assets in the unaudited Consolidated and Condensed Balance Sheets and amortized on a straight line basis over one year. During the three months ended July 1, 2016, CSRA amortized $7.5 million, which is included in Selling, general and administrative (“SG&A”) in the unaudited Consolidated and Condensed Statements of Operations.

CSRA entered into a Tax Matters Agreement with CSC that governs the respective rights, responsibilities and obligations of CSC and CSRA with respect to all tax matters. CSRA has joint and several liability with CSC to the IRS for the consolidated U.S. Federal income taxes of the CSC consolidated group relating to the taxable periods in which we were part of that group. During the three months ended July 1, 2016, CSRA did not incur charges payable to CSC under the Tax Matters Agreement.

CSRA entered into a Real Estate Matters Agreement with CSC that governs the respective rights and responsibilities between CSRA and CSC following the Spin-Off with respect to certain real property used by CSRA. For the three months ended July 1, 2016, the rental income from CSC associated with the Real Estate Matters Agreement was not significant.

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Acquisitions and Divestitures

3 Months Ended

Jul. 01, 2016

Business Combinations [Abstract]

Acquisitions and Divestitures

Acquisitions and Divestitures

There were no acquisitions or divestitures of other businesses during the three months ended July 1, 2016. There were no acquisitions of other businesses during the three months ended July 3, 2015.

Fiscal 2016 Divestiture

On April 27, 2015, the Computer Sciences GS Business divested its wholly owned subsidiary, Welkin Associates Limited (“Welkin”), a provider of systems engineering and technical assistance services to the intelligence community and other U.S. Department of Defense clients. The Computer Sciences GS Business received consideration of $34.0 million, and recorded a pre-tax gain on the sale of $18.5 million, which was included in Other expense (income), net in the Consolidated and Condensed Statements of Operations for the three months ended July 3, 2015. Included in the divested net assets of $13.8 million was $10.7 million of goodwill and transaction costs of $1.7 million. The divestiture did not qualify to be presented as discontinued operations as it did not represent a strategic shift that would have a major effect on the Computer Sciences GS Business’s operations and financial results.

Fiscal 2016 Acquisition

As discussed in Note 1—Description of the Business, Basis of Presentation and Recent Accounting Pronouncements, on November 30, 2015, CSRA completed its previously announced Mergers which resulted in SRA Parent merging with and into a wholly owned subsidiary of CSRA. As a result, SRA became an indirect, wholly owned subsidiary of CSRA.

The Mergers are reflected in CSRA’s financial statements using the acquisition method of accounting, with CSRA being considered the accounting acquirer of SRA. The total merger consideration (“Merger Consideration”) transferred was $2.3 billion, which consisted of (1) $390.0 million in cash (gross of cash acquired of $48.3 million), (2) 25,170,564 shares of CSRA common stock representing in the aggregate 15.32% of the total number of shares of CSRA common stock outstanding, (3) $1.1 billion related to SRA debt and (4) $29.9 million of acquiree-related transaction costs. The fair market value of shares was determined based on a volume-weighted average price of $30.95 per CSRA share on November 30, 2015, the first day of CSRA’s regular-way trading on the NYSE.

CSRA recorded, on a preliminary basis, the assets acquired and liabilities assumed at their estimated fair value, with the difference between the fair value of the net assets acquired and the purchase consideration reflected as goodwill. See Note 7—Goodwill and Other Intangible Assets for further discussion of the measurement considerations for acquired intangible assets. The following table reflects the preliminary fair values of assets acquired and liabilities assumed as of November 30, 2015 (including adjustments subsequent to closing):

Preliminary allocation (in millions):
Cash, accounts receivable and other current assets	$	302
Property, equipment and other long-term assets		47
Intangibles—customer relationships, backlog and other intangibles assets		891
Accounts payable and other current liabilities		(193	)
Other long-term liabilities		(26	)
Deferred tax liabilities		(261	)
Total identified net assets acquired		760
Goodwill		1,540
Estimated total purchase consideration and liabilities paid at closing	$	2,300

In the fourth quarter of fiscal year 2016, the Company made certain adjustment to provisional amounts previously recognized, which resulted in a $12.3 million reduction of the goodwill, which are reflected in the table above. No adjustments to the previously recorded fair values of the acquired assets and liabilities were made during the three months ended July 1, 2016. The goodwill recognized in the acquisition is attributable to the intellectual capital, the acquired assembled work force, and expected cost synergies, none of which qualify for recognition as a separate intangible asset. The goodwill is not expected to be deductible for tax purposes. Goodwill arising from the acquisition has been allocated on a preliminary basis to CSRA’s reporting units based on the relative fair value of assets acquired. The resulting preliminary allocation to CSRA’s reportable segments was as follows: $334.9 million allocated to Defense and Intelligence and $1.2 billion allocated to Civil.

The fair values of assets acquired and liabilities assumed were based on valuation estimates and assumptions that are subject to change and could result in material changes.

Unaudited Pro Forma Financial Information

The following unaudited pro forma financial information presents results as if the Spin-Off and the Mergers and the related financing had occurred prior to April 3, 2015. The historical consolidated financial information of CSRA and SRA has been adjusted in the pro forma information to give effect to the events that are (1) directly attributable to the transactions, (2) factually supportable and (3) expected to have a continuing impact on the consolidated results. The consolidated financial information of SRA includes merger and integration costs that are not expected to recur and impact the consolidated results over the long term. The unaudited pro forma results do not reflect future events that have occurred or may occur after the transactions, including but not limited to, the impact of any actual or anticipated synergies expected to result from the Mergers. Accordingly, the unaudited pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected prior to April 3, 2015, nor is it necessarily an indication of future operating results.

	Three Months Ended July 1, 2016
(Dollars in millions, except per share amounts)		CSRA Three Months Ended July 1, 2016		Effects of Spin-Off		Effects of Mergers (a)		Pro Forma for Spin-Off and Merger
Revenue	$	1,254	$	—	$	—	$	1,254
Income (loss) attributable to CSRA Shareholders		65		—		3		68
Income per common share:
Basic	$	0.40					$	0.42
(a) Income from continuing operations effected for the Merger excludes $3 million, net of tax, of non-recurring costs incurred to give effect to the merger of SRA and CSRA.

	Three Months Ended July 3, 2015
(Dollars in millions, except per share amounts)		Historical Computer Sciences GS Three Months Ended July 3, 2015		Historical SRA Three Months Ended June 30, 2015		Effects of Spin-Off		Effects of Merger			Pro Forma for Spin-Off and Merger
Revenue	$	959	$	359	$	—	$	(1	)	$	1,317
Income (loss) attributable to Parent		63		1		13		10			87
Income (loss) per common share:
Basic	$	0.45								$	0.53

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Earnings Per Share

3 Months Ended

Jul. 01, 2016

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

On November 27, 2015, the date that CSRA’s common stock was distributed to CSC shareholders in the Spin-Off, CSRA had 139,128,158 common shares outstanding. The calculation of both basic and diluted earnings per share for the three months ended July 3, 2015 utilized this number of common shares because at that time, CSRA did not operate as a separate, stand-alone entity, and no equity-based awards were outstanding in the period.

The calculation of basic earnings per share for the three months ended July 1, 2016 utilized 163,275,412 sharesbased on the weighted-average shares outstanding during the period. The calculation of diluted earnings per share for the three months ended July 1, 2016 utilized 164,938,594, reflecting the dilutive impact of 1,663,182 shares of outstanding stock options, restricted stock units, and performance-based stock units issued or granted. The computation of diluted earnings per share excluded stock options and restricted stock units, whose effect, if included, would have been anti-dilutive. The number of shares related to such stock options was 2,194,894 for the three months ended July 1, 2016.

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Sale of Receivables

3 Months Ended

Jul. 01, 2016

Transfers and Servicing [Abstract]

Sale of Receivables

Sale of Receivables

CSRA is the seller of certain accounts receivable under a Master Accounts Receivable Purchase Agreement (the “Purchase Agreement”) that was entered into on April 21, 2015 with the Royal Bank of Scotland, PLC (“RBS”), as Purchaser, along with Mitsubishi UFJ Financial Group Ltd, and Bank of Nova Scotia, each as a Participant, for the continuous non-recourse sale of CSRA’s eligible trade receivables.

The Purchase Agreement with RBS was subsequently amended, and RBS assigned its rights as a purchaser to The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia and Mizuho Bank, Ltd., each as a Purchaser. The amended agreement also converted the receivables purchase facility (the “Facility”) to a committed facility and extended the initial term to a two-year period.

Under the Facility, CSRA sells eligible receivables, including billed receivables and certain unbilled receivables arising from “cost plus fixed fee” and “time and materials” contracts up to $450.0 million outstanding at any one time. CSRA has no retained interests in the transferred receivables and only performs collection and administrative functions for the Purchaser for a servicing fee.

At the start of the first quarter of fiscal year 2017, SRA discontinued selling receivables under its separate accounts receivable purchase agreement. The SRA accounts receivable agreement was terminated as of June 27, 2016 and, at that time, SRA became an additional seller under the Purchase Agreement.

CSRA accounts for these receivable transfers as sales under ASC 860, Transfers and Servicing, and de-recognizes the sold receivables from its unaudited Consolidated and Condensed Balance Sheets. The fair value of the sold receivables approximated their book value due to their short-term nature. CSRA estimated that its servicing fee was at fair value and, therefore, no servicing asset or liability related to these services was recognized as of July 1, 2016 and April 1, 2016, respectively.

During the three months ended July 1, 2016, CSRA sold $468.3 million and $227.3 million, respectively, of billed and unbilled receivables. Collections corresponding to these receivable sales were $579.4 million for the three months ended July 1, 2016. As of July 1, 2016, there was $13.2 million of cash collected by CSRA but not remitted to purchasers. CSRA incurred purchase discount and administrative fees of $0.6 million for the three months ended July 1, 2016. These fees were recorded within Other expense (income), net in the unaudited Consolidated and Condensed Statements of Operations.

Total receivables sold, net of collections and fees related to accounts receivable sales, resulted in increased cash flow of $115.6 million for the three months ended July 1, 2016. The net cash proceeds under the Facility are reported as operating activities in the unaudited Consolidated and Condensed Statements of Cash Flows because both cash received from purchases and cash collections are not subject to significant interest rate risk.

Concentrations of Risk

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. government agencies and prime contractors under contracts with the U.S. government. The Company continuously reviews its accounts receivable and records provisions for doubtful accounts as needed.

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Derivative Instruments

3 Months Ended

Jul. 01, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Derivative Instruments

Derivatives Designated for Hedge Accounting

The Company utilizes derivative financial instruments to manage interest rate risk related to its Term Loan A Facilities. The Company’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company uses interest rate swaps as part of its interest rate risk management strategy. As of both July 1, 2016 and April 1, 2016, the Company had outstanding interest rate derivatives with a notional value of $1.4 billion, which were designated as a cash flow hedge of interest rate risk.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated other comprehensive income (“AOCI”), net of taxes, and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. Amounts reported in AOCI related to derivatives will be reclassified to interest expense as interest payments are made on the Company’s variable-rate debt. The Company reclassified $2.9 million of interest rate expense from AOCI into earnings in the Consolidated and Condensed Statements of Operations for the three months ending July 1, 2016. During the next twelve months, the Company estimates that approximately $6.6 million, net of tax, will be reclassified from AOCI into earnings.

The fair value of the Company’s derivative financial instruments was a liability of $21.9 million and $11.1 million as of July 1, 2016 and April 1, 2016, respectively. These derivative instruments are classified by their short- and long-term components based on the fair value of the anticipated timing of their cash flows. The current portion is included in the Accrued expenses and other current liabilities and the long-term portion is included in Other long-term liabilities in the Consolidated and Condensed Balance Sheets.

The Company has agreements with each of its interest rate swap counterparties that contain a provision providing that the Company could be declared in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default on the indebtedness.

Derivatives Not Designated for Hedge Accounting

Total Return Swaps

The Company utilizes total return swap derivative contracts to manage exposure to market volatility of the notional investments underlying the Company’s deferred compensation obligations. These arrangements are entered into monthly and are settled on the last day of every fiscal month. For accounting purposes, these derivatives are not designated as hedges. As changes in the fair value of the deferred compensation liabilities are recognized in Cost of services and Selling, general and administrative expenses, so too are the changes in the fair value of the total return swaps derivative contracts. The Company recorded $0.1 million of loss attributable to the total return swaps in the Consolidated and Condensed Statements of Operations for the three months ended July 1, 2016.

Concentrations of Risk

The Company is subject to counterparty risk in connection with its interest rate swap derivative contracts. Credit risk related to a derivative financial instrument represents the possibility that the counterparty will not fulfill the terms of the contract. The Company mitigates this credit risk by entering into agreements with credit-worthy counterparties. As of July 1, 2016 there was one counterparty with greater than a 10% concentration of our total exposure.

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Goodwill and Other Intangible Assets

3 Months Ended

Jul. 01, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

Goodwill

In November 2015, CSRA recorded $1.5 billion of goodwill acquired from the SRA acquisition, which was allocated to each reportable segment based on the relative fair value of net assets acquired. There were no changes in the balance of goodwill or the allocations to the segments during the three months ended July 1, 2016.

Testing for Goodwill Impairment

CSRA tests goodwill for impairment on an annual basis, as of the first day of the second fiscal quarter, and between annual tests if an event occurs, or circumstances change, that would more likely than not reduce the fair value of a reporting unit below its carrying amount. CSRA first assesses qualitative factors to determine whether events or circumstances existed that would lead CSRA to conclude that it is more likely than not that the fair value of any of its reporting units was below their carrying amounts. If CSRA determines that it is not more likely than not, then proceeding to step one of the two-step goodwill impairment test is not necessary.

As of July 1, 2016, CSRA assessed whether there were events or changes in circumstances that would more likely than not reduce the fair value of any of its reporting units below its carrying amount and require goodwill to be tested for impairment. CSRA determined that there have been no such indicators, and therefore, it was unnecessary to perform an interim goodwill impairment assessment as of July 1, 2016. Annual testing for goodwill impairment will occur during the second quarter of fiscal year 2017.

Other Intangible Assets

On November 30, 2015, CSRA acquired $891 million of other intangible assets, as described in Note 3—Acquisitions and Divestitures, which consisted of customer relationships intangibles, backlog, and technology. Acquired intangible assets have been recorded at their preliminary estimated fair value through the use of various discounted cash flow valuation techniques. These valuation techniques incorporated Level 3 inputs as described under the fair value hierarchy of ASC 820, Fair Value Measurements (“ASC 820”). These unobservable inputs reflect CSRA’s own assumptions about which assumptions market participants would use in pricing an asset on a non-recurring basis.

A summary of amortizing intangible assets is as follows:

		As of
		July 1, 2016
(Dollars in millions)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Customer-related intangibles	$	953		(144	)		809
Backlog		65		(38	)		27
Other intangible assets		51		(48	)		3
Software		142		(98	)		44
Total intangible assets	$	1,211	$	(328	)	$	883

		As of
		April 1, 2016
(Dollars in millions)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Customer-related intangibles	$	954	$	(133	)	$	821
Backlog		65		(22	)		43
Other intangible assets		52		(46	)		6
Software		136		(95	)		41
Total intangible assets	$	1,207	$	(296	)	$	911

Customer-related intangibles, backlog, and software are amortized to expense. Amortization expense for the three months ended July 1, 2016 and July 3, 2015 was $32.6 million and $7.6 million, respectively. Other intangible assets, which consist of contract-related intangibles, are amortized as a reduction to revenues and included in Depreciation and amortization in the Consolidated and Condensed Statements of Cash Flows. Amortization as a reduction to revenues for the three months ended July 1, 2016 and July 3, 2015 was $2.3 million in both periods.

As of July 1, 2016, estimated amortization related to intangible assets for the remainder of fiscal year 2017 is $68.6 million, and for each of the fiscal years 2018, 2019, 2020 and 2021, is as follows: $63.5 million, $72.8 million, $66.5 million and $60.6 million, respectively.

Purchased and internally developed software (for both external and internal use), net of accumulated amortization, consisted of the following:

		As of
(Dollars in millions)		July 1, 2016		April 1, 2016
Purchased software	$	37	$	40
Internally developed software for external use		1		1
Internally developed software for internal use		6		—
Total software	$	44	$	41

Amortization expense related to purchased software was $3.6 million and $3.5 million, for the three months ended July 1, 2016 and July 3, 2015, respectively. Amortization expense related to internally developed software for external use was $0.2 million and $0.3 million, for the three months ended July 1, 2016 and July 3, 2015, respectively. Amortization expense related to internally developed software for internal use was $0.2 million and $0.1 million for the three months ended July 1, 2016 and July 3, 2015, respectively.

As of July 1, 2016, estimated amortization related to purchased and internally developed software for the remainder of fiscal 2017 is $5.6 million, and for each of the fiscal years 2018, 2019, 2020 and 2021, is as follows: $10.3 million, $10.7 million, $7.8 million and $5.7 million, respectively.

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Accrued Expenses and Other Current Liabilities

3 Months Ended

Jul. 01, 2016

Payables and Accruals [Abstract]

Accounts Expenses and Other Current Liabilities

Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

		As of
(Dollars in millions)		July 1, 2016		April 1, 2016
Accrued contract costs	$	223	$	248
Deferred revenue		153		140
Accrued expenses		104		132
Other		10		8
Total	$	490	$	528

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Debt

3 Months Ended

Jul. 01, 2016

Debt Disclosure [Abstract]

Debt

Debt

CSRA maintains the following debt facilities: (1) a senior secured revolving credit facility (the “Revolving Credit Facility”) with a committed borrowing capacity of $700 million, (2) a senior secured tranche A1 Term loan facility (the “Tranche A1 Facility”), (3) a senior secured tranche A2 Term loan facility (the “Tranche A2 Facility” and, together with the Tranche A1 Facility, the “Term Loan A Facilities”) and (4) a senior secured term loan B facility (the “Term Loan B Facility” and, together with the Term Loan A Facilities, the “Term Loan Facilities”).

The following is a summary of CSRA’s outstanding debt as of July 1, 2016 and April 1, 2016:

		July 1, 2016			April 1, 2016
Revolving credit facility, due November 2020	$	—		$	50
Tranche A1 facility, due November 2018		590			600
Tranche A2 facility, due November 2020		1,407			1,432
Term Loan B facility, due November 2022		735			748
Capitalized lease liability		144			151
Total debt		2,876			2,981
Less: unamortized debt issuance costs		(43	)		(46	)
Less: current portion of long-term debt and capitalized lease liability		(114	)		(170	)
Total long-term debt, net of current maturities (1)	$	2,719		$	2,765
(1) As of July 1, 2016, the fair value of the Company’s debt, based on recent trading activity, approximated carrying value. We determined the fair value of our long-term debt using Level 2 inputs, in which fair value is generally estimated based on quoted market prices for identical or similar instruments.

During the first quarter of fiscal 2017 and fourth quarter of fiscal 2016, the Company made repayments of $50.0 million and $150.0 million, respectively, on the Revolving Credit Facility. Pursuant to the terms of the Term Loan Facilities agreements, CSRA paid $48.0 million related to FY16 excess cash flow during the first quarter of fiscal 2017, which was allocated as follows: (1) $10.4 million to the Tranche A1 Facility, (2) $24.7 million to the Tranche A2 Facility, and (3) $12.9 million to the Term Loan B Facility.

CSRA incurred costs in connection with the issuance of its Term Loan Facilities, which are amortized using the effective interest method over the life of the respective loans. Unamortized debt issuance costs related to the Revolving Credit Facility are recorded with the carrying value of the debt and are amortized using the straight-line method. During the three months ended July 1, 2016, $0.4 million and $2.4 million of costs for the Revolving Credit Facility and Term Loan Facilities, respectively, were amortized and reflected in Interest expense, net in the unaudited Consolidated and Condensed Statements of Operations.

Expected maturities of long-term debt, excluding future minimum capital lease payments for fiscal years subsequent to July 1, 2016, are as follows:

Fiscal Year		Amount (in Millions)
2017	$	48
2018		75
2019		670
2020		80
2021		1,149
Thereafter		710
Total	$	2,732

CSRA’s long-term debt facilities contain representations, warranties, and covenants customary for arrangements of these types, as well as customary events of default. CSRA was in compliance with all financial covenants associated with its borrowings as of July 1, 2016.

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Income Taxes

3 Months Ended

Jul. 01, 2016

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

CSRA's effective tax rate (“ETR”) was 35.7% for the three months ended July 1, 2016 and 38.8% for the three months ended July 3, 2015. The lower ETR for the three months ended July 1, 2016 months compared to the three months ended July 3, 2015 was due to the addition of beneficial stock compensation deductions and the absence of adjustments related to the carve-out approach used for tax purposes prior to the Spin-Off in fiscal year 2016.

Our Tax Matters Agreement, entered into with CSC in connection with the Spin-Off, states each company’s rights and responsibilities with respect to payment of taxes, tax return filings and control of tax examinations. Except for historic SRA tax liabilities and certain separate state liabilities, we are generally only responsible for taxes allocable to periods (or portions of periods) beginning after the Spin-Off. Prior periods included uncertain tax positions allocated from CSC to CSRA on a stand-alone basis that are not reflected in the post-Spin-Off period.

CSRA is currently under examination in several tax jurisdictions. As a result of the Mergers, the tax years that remain subject to examination in certain of CSRA’s major tax jurisdictions are as follows:

Jurisdiction:	Tax Years that Remain Subject to Examination (Fiscal Year Ending):
United States - federal	2008 and forward
United States - various states	2008 and forward

The Internal Revenue Service (“IRS”) is currently examining SRA’s federal income tax return for 2011. The IRS has contested a $136.7 million worthless stock deduction for a disposed subsidiary in that period. CSRA believes its tax positions are appropriate and is prepared to defend them vigorously. Furthermore, pursuant to the Merger Agreement, SRA obtained an insurance policy limiting the exposure related to this position. It is reasonably possible that changes to CSRA’s unrecognized tax benefits could be significant; however, due to the uncertainty regarding the timing of completion of audits and possible outcomes, a current estimate of the range of increases or decreases that may occur within the next 12 months is not expected to be material.

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Pension and Other Post-retirement Benefit Plans

3 Months Ended

Jul. 01, 2016

Compensation and Retirement Disclosure [Abstract]

Pension and Other Post-retirement Benefit Plans

Pension and Other Post-retirement Benefit Plans

Certain employees of CSRA and its subsidiaries may be participants in employer-sponsored defined benefit and defined contribution plans. CSRA’s defined benefit plans included both pension and other post-retirement benefit (“OPEB”) plans. As discussed in Note 1 — Description of the Business, Basis of Presentation and Recent Accounting Pronouncements, on November 27, 2015, CSC completed the Spin-Off of CSRA, including the Computer Sciences GS Business. Prior to the Spin-Off date, the Computer Sciences GS Business recorded the assets, liabilities, and service costs for current employees for the single employer pension and OPEB plans in the unaudited Consolidated and Condensed Financial Statements for the period ended July 3, 2015. For multi-employer plans, the Computer Sciences GS Business recorded the service cost related to their current employees in the unaudited Consolidated and Condensed Financial Statements for the period ended July 3, 2015. Subsequent to the Spin-Off date, all pension and OPEB plan assets, liabilities and services costs related to current employees were fully absorbed by CSRA.

Defined Benefit Pension Plans

The assets and liabilities for the plans as well as service and interest costs related to current employees are reflected in CSRA’s unaudited Consolidated and Condensed Financial Statements. The largest U.S. defined benefit pension plan was frozen in fiscal 2010 for most participants.

The net periodic pension benefit for CSRA pension plans includes the following components:

Net periodic pension costs (dollars in millions)		Three Months Ended
		July 1, 2016			July 3, 2015
Service cost		3			—
Interest cost	$	26		$	1
Expected return on assets		(49	)		(1	)
Net periodic pension benefit	$	(20	)	$	—

The following table provides the pension plans’ projected benefit obligations, assets, and a statement of their funded status:

		As of
(Dollars in millions)		July 1, 2016			April 1, 2016
Net benefit obligation	$	(3,209	)	$	(3,222	)
Net plan assets		2,594			2,585
Net unfunded status	$	(615	)	$	(637	)

CSRA contributed $2.1 million to the defined benefit pension plans during the three months ended July 1, 2016 for the funding of benefit payments made to plan participants. CSRA expects to make $6.2 million of additional contributions during the remainder of fiscal year 2017 for the funding of participants’ benefit payments.

Other Postretirement Benefit Plans

The assets and liabilities for the OPEB plans as well as service costs related to current employees are reflected in CSRA’s unaudited Consolidated and Condensed Financial Statements. CSRA’s financial statements reflect the service costs related to current employees of the business and the assets and liabilities for the plans. CSRA provides subsidized healthcare, dental and life insurance benefits for certain U.S. employees and retirees, primarily for individuals employed prior to August 1992.

Net periodic postretirement benefit costs (in millions)		Three Months Ended
		July 1, 2016			July 3, 2015
Service cost	$	—		$	—
Interest cost		1			—
Expected return on assets		(1	)		—
Amortization of prior service benefit		(3	)		(1	)
Net periodic (benefit) cost	$	(3	)	$	(1	)

The following table provides the OPEB plans’ projected benefit obligations, assets, and a statement of their funded status:

		As of
(Dollars in millions)		July 1, 2016			April 1, 2016
Net benefit obligation	$	(92	)	$	(93	)
Net plan assets		75			76
Net unfunded status	$	(17	)	$	(17	)

CSRA contributed $0.4 to a supplemental executive retirement plan during the three months ended July 1, 2016. CSRA expects to make $1.1 million of additional contributions to this plan during the remainder of fiscal year 2017 for the funding of participants’ benefit payments.

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Share-Based Compensation Plans

3 Months Ended

Jul. 01, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation Plans

Share-Based Compensation Plans

Employee Incentives

Prior to the Spin-Off, CSC maintained various share-based compensation plans at a corporate level and other benefit plans at a subsidiary level. The employees of the Computer Sciences GS Business participated in those programs and a portion of the cost of those plans for the period prior to the Spin-Off is included in the unaudited Consolidated and Condensed Financial Statements.

On November 27, 2015, CSRA became an independent company through CSC’s consummation of the Spin-Off. Historically, CSC had two stock incentive plans under which CSC issued stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”). Some of these awards vested upon separation of CSC and CSRA, some continue to vest in accordance with their original terms, and some converted into a different type of equity award at separation. Additionally, CSRA issued stock in relation to restricted stock awards and stock option replacement awards to employees in connection with the SRA Mergers on November 30, 2015. As of July 1, 2016 and April 1, 2016, CSRA has a net payable to CSC of $4.0 million and a net payable from CSC of $6.5 million, respectively, related to the settlement of equity awards granted to employees prior to the Spin-Off.

On May 31, 2016, CSRA granted stock options, RSUs and PSUs award for approximately 1,538,878 shares that vest ratably over 3 years. The closing stock price on the date of the grant used to determine the award fair value was $24.77.

CSRA issues authorized but previously unissued shares upon the exercise of stock options, the granting of restricted stock and the settlement of RSUs and PSUs. As of July 1, 2016, 7,736,904 shares of CSRA common stock were available for the grant of future stock options, RSUs, PSUs or other share-based incentives to employees of CSRA.

Share-Based Compensation Expense

For the three months ended July 1, 2016 and July 3, 2015, CSRA recognized share-based compensation expense as follows:

		Three Months Ended
(Dollars in millions)		July 1, 2016		July 3, 2015
Cost of services	$	—	$	(1.4	)
Selling, general and administrative expenses		3.0		0.6
Total	$	3.0	$	(0.8	)
Total, net of tax	$	1.9	$	(0.5	)

The share-based compensation listed above included CSRA’s corporate and non-employee director grants and was $1.3 million for the three months ended July 1, 2016. The share-based compensation listed above included CSRA’s share of the former Parent’s corporate and non-employee director grants for the three months ended July 3, 2015 of $0.6 million.

CSRA uses the Black-Scholes-Merton model in determining the fair value of options granted. The risk-free rate is based on the zero-coupon interest rate of U.S. government-issue Treasury securities with periods commensurate with the expected term of the options.

The weighted-average grant date fair values of stock options granted for the three months ended July 1, 2016 was $5.99 per share of CSRA shares. In calculating the compensation expense for its stock incentive plans, the following weighted-average assumptions were used:

	Three Months Ended
	July 1, 2016		July 3, 2015
Risk-free interest rate	1.39	%	1.77	%
Expected volatility	30.90	%	31.76	%
Expected term (in years)	4.80		6.06
Dividend yield	1.61	%	1.39	%

For the three months ended July 1, 2016 and July 3, 2015, CSRA’s tax benefit realized for deductions from exercising stock options was $4.0 million and $1.5 million, respectively. CSRA’s excess tax benefit was $1.5 million for the three months ended July 1, 2016.

Stock Options

Information concerning stock options of CSRA during the three months ended July 1, 2016 was as follows:

	Number of Option Shares			Weighted Average Exercise Price per share	Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Outstanding as of April 1, 2016	1,502,547		$	23.06	7.0	$	7.6
Granted	997,515			24.77
Exercised	(99,681	)		20.11
Canceled/Forfeited	(31,960	)		28.09
Expired	(48,079	)		26.37
Outstanding as of July 1, 2016	2,320,342			23.78	8.4		4.0
Vested and expected to vest in the future as of July 1, 2016	2,320,342			23.78	8.4		4.0
Exercisable as of July 1, 2016	700,514			22.70	5.5		1.9

The intrinsic value of options exercised during the three months ended July 1, 2016 and July 3, 2015 totaled $0.5 million and $1.3 million, respectively. The total intrinsic value of stock options is based on the difference between the fair market value of CSRA’s common stock less the applicable exercise price. The grant-date fair value of stock options vested during the three months ended July 1, 2016 totaled $1.0 million. The cash received from stock options exercised during the three months ended July 1, 2016 and July 3, 2015 was $1.7 million and $2.0 million, respectively.

As of July 1, 2016, unrecognized compensation expense related to unvested stock options totaled $8.6 million. This cost is expected to be recognized over a weighted-average period of 2.6 years.

Restricted Stock Units    

Information concerning RSUs (including PSUs) of CSRA during the three months ended July 1, 2016, was as follows:

	Number of Restricted Stock Units			Weighted Average Fair Value
Outstanding as of April 1, 2016	376,557		$	29.39
Granted	543,835			25.67
Vested	(94,362	)		26.00
Canceled/Forfeited	(12,226	)		31.90
Outstanding as of July 1, 2016	813,804			27.26

As of July 1, 2016, total unrecognized compensation expense related to unvested restricted stock units totaled $18.5 million, net of expected forfeitures. This cost is expected to be recognized over a weighted-average period of 2.5 years. As of July 1, 2016, accrued unpaid dividends related to restricted stock units outstanding as of the date of the Spin-Off totaled $1.2 million.

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Stockholder's Equity and Accumulated Other Comprehensive Income (Loss)

3 Months Ended

Jul. 01, 2016

Equity [Abstract]

Stockholder's Equity and Accumulated Other Comprehensive Income (Loss)

Stockholders’ Equity and Accumulated Other Comprehensive Income (Loss)

Dividends Declared

During the fourth quarter of fiscal 2016, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 162,952,919 shares with a total dividend payout of $16.3 million. Payment of the dividend was made on April 29, 2016 to CSRA stockholders of record at the close of business on April 5, 2016.

On May 25, 2016, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share.  The total qualifying shares were 163,427,525 shares, with a total dividend payout of $16.3 million. Payment of the dividend was made on July 11, 2016 to CSRA stockholders of record at the close of business on June 14, 2016.

Share Repurchase Program

On November 30, 2015, the Board authorized a share repurchase program (the “Share Repurchase Program”), pursuant to which CSRA, from time to time, purchases shares of its common stock for an aggregate purchase price not to exceed $400 million. During the three months ended July 1, 2016, no purchases were made under the Share Repurchase Program. As of July 1, 2016, CSRA remains authorized to repurchase $350 million of common stock under the program.

Accumulated Other Comprehensive Income (Loss)

The following tables show the activity in the components of other comprehensive income (loss), including the respective tax effects, and reclassification adjustments for the three months ended July 1, 2016 and July 3, 2015, respectively. Accumulated other comprehensive income (loss) was as follows:

		For the Three Months Ended July 1, 2016
(Dollars in millions)		Before Tax Amount		Tax Impact Increase (Decrease)	Net of Tax Amount
Foreign currency translation adjustments	$	—		—	—
Unrealized loss on interest rate swap		(10	)	4	(6	)
Amortization of prior service credit		(3	)	1	(2	)
Total other comprehensive income	$	(13	)	5	(8	)

		For the Three Months Ended July 3, 2015
(Dollars in millions)		Before Tax Amount		Tax Impact Increase (Decrease)	Net of Tax Amount
Foreign currency translation adjustments	$	—		—	—
Amortization of prior service credit		(1	)	—	(1	)
Total other comprehensive income	$	(1	)	—	(1	)

The following tables show the changes in Accumulated other comprehensive (loss) income for the three months ended July 1, 2016 and July 3, 2015, respectively:

(Dollars in millions)		Foreign Currency Translation Adjustments		Cash Flow Hedge			Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance as of April 1, 2016	$	—	$	(7	)	$	28		$	21
Other comprehensive income (loss), net of taxes		—		(6	)		—			(6	)
Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests		—		—			(2	)		(2	)
Balance as of July 1, 2016	$	—	$	(13	)	$	26		$	13

(Dollars in millions)		Foreign Currency Translation Adjustments			Pension and Other Postretirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance as of April 3, 2015	$	(2	)	$	2		$	—
Other comprehensive income, net of taxes		—			—			—
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests		—			(1	)		(1	)
Balance as of July 3, 2015	$	(2	)	$	1		$	(1	)

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Segment Information

3 Months Ended

Jul. 01, 2016

Segment Reporting [Abstract]

Segment Information

Segment Information

CSRA’s reportable segments are as follows:

• Defense and Intelligence—The Defense and Intelligence segment provides services to the DoD, National Security Agency, branches of the Armed Forces and other DoD and intelligence agencies.

• Civil—The Civil segment provides services to various federal agencies within the Department of Homeland Security, Department of Health and Human Services and other federal civil agencies, as well as various state and local government agencies.

The following table summarizes operating results and total assets by reportable segments:

(Dollars in millions)		Defense and Intelligence		Civil		Subtotal		Corporate(1)		Total
As of July 1, 2016
Total assets	$	1,784	$	2,768	$	4,552	$	232	$	4,784
Three Months Ended July 1, 2016
Revenues	$	568	$	686	$	1,254	$	—	$	1,254
Segment operating income		54		105		159		—		159
Depreciation and amortization expense		34		31		65		—		65
As of July 3, 2015
Total assets	$	1,187	$	752	$	1,939	$	—	$	1,939
Three Months Ended July 3, 2015
Revenues	$	507	$	452	$	959	$	—	$	959
Segment operating income		64		61		125		—		125
Depreciation and amortization expense		22		11		33		—		33
(1) Total assets allocated to the Corporate Segment consist of the following: (1) $131.9 million of cash, (2) $18.4 million of Accounts Receivable, and (3) $81.3 million of net Property, plant, and equipment

Segment operating income provides useful information to CSRA’s management for assessment of CSRA’s performance and results of operations and is one of the financial measures utilized to determine executive compensation.

A reconciliation of consolidated segment operating income to income before income taxes is as follows:

		Three Months Ended
(Dollars in millions)		July 1, 2016			July 3, 2015
Segment operating income	$	159		$	125
Corporate G&A		(17	)		(15	)
Separation and merger costs		(5	)		(15	)
Interest expense, net		(30	)		(5	)
Other (expense) income, net		(1	)		19
Income before income taxes	$	106		$	109

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Commitments and Contingencies

3 Months Ended

Jul. 01, 2016

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Commitments

In the normal course of business, CSRA may provide certain customers, principally governmental entities, with financial performance guarantees, which are generally backed by stand-by letters of credit or surety bonds. In general, CSRA would only be liable for the amounts of these guarantees in the event that nonperformance by CSRA permits termination of the related contract by the customer. As of July 1, 2016, CSRA had $44 million of outstanding letters of credit and $13 million of surety bonds related to these performance guarantees. CSRA believes it is in compliance with its performance obligations under all service contracts for which there is a financial performance guarantee and the ultimate liability, if any, incurred in connection with these guarantees will not have a material adverse effect on its Consolidated and Condensed Financial Statements.

The following table summarizes the expiration of CSRA’s financial guarantees and stand-by letters of credit outstanding as of July 1, 2016:

(Dollars in millions)		Fiscal 2017		Fiscal 2018		Fiscal 2019 and Thereafter		Total
Stand-by letters of credit	$	32	$	12	$	—	$	44
Surety bonds		—		13		—		13
Total	$	32	$	25	$	—	$	57

CSRA generally indemnifies licensees of its proprietary software products against claims brought by third parties alleging infringement of intellectual property rights (including rights in patents, copyrights, trademarks, and trade secrets). CSRA’s indemnification of its licensees relates to costs arising from court awards, negotiated settlements and the related legal and internal costs of those licensees. CSRA maintains the right, at its own costs, to modify or replace software in order to eliminate any infringement. Historically, CSRA has not incurred any significant costs related to licensee software indemnifications.

Contingencies

CSRA is routinely subject to investigations and reviews relating to compliance with various laws and regulations with respect to its role as a contractor to federal, state and local government customers and in connection with performing services in countries outside of the U.S. Adverse findings in these investigations or reviews can lead to criminal, civil or administrative proceedings, and CSRA could face penalties, fines, compensatory damages and suspension or debarment from doing business with governmental agencies. In addition, CSRA could suffer serious reputational harm if allegations of impropriety were made against CSRA. Adverse findings could also have a material adverse effect on CSRA’s business, Consolidated and Condensed Financial Statements due to its reliance on government contracts.

U.S. federal government agencies, including the Defense Contract Audit Agency (“DCAA”), Defense Contract Management Agency (“DCMA”), and others, routinely audit and review a contractor’s performance on government contracts, indirect rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations, and standards. These agencies also review the adequacy of the contractor’s compliance with government standards for its business systems including: a contractor’s accounting system, earned value management system, estimating system, materials management and accounting system, property management system and purchasing system. Both contractors and the U.S. federal government agencies conducting these audits and reviews have come under increased scrutiny, including such subjects as billing practices, labor charging and accounting for unallowable costs.

CSRA’s indirect cost audits by the DCAA remain open for fiscal 2004 and subsequent fiscal years. Although the Computer Sciences GS Business has recorded contract revenues subsequent to and including fiscal 2004 based upon an estimate of costs that the Computer Sciences GS Business believes will be approved upon final audit or review, the Computer Sciences GS Business does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed the Computer Sciences GS Business’s estimates, its profitability would be adversely affected.

The DCAA has not completed audits of SRA’s incurred cost submissions for fiscal 2009 and subsequent fiscal years. SRA has recorded financial results subsequent to fiscal 2008 based upon costs that SRA believes will be approved upon final audit or review. If incurred cost audits result in adverse findings that exceed SRA’s estimates, it may have an adverse effect on our financial position, results of operations or cash flows.

As of July 1, 2016, CSRA has recorded a liability of $12.7 million for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs. This amount includes potential adjustments related to both pre-separation and post-separation audits or reviews.

In connection with the sale of ATD in fiscal 2014, CSC transferred its joint venture interests in Computer Sciences Raytheon (“CSR”) as part of the ATD sale transaction. CSR is a joint venture formed between CSC and Raytheon Technical Services Company, and its sole business is performance of a single contract for a DoD customer. CSR is the plan sponsor of the CSR pension plan, which was terminated in connection with the termination of the CSR contract with the customer. CSC agreed with the purchaser of ATD that CSC would fund the purchaser’s share of the CSR pension settlement obligation upon plan termination. In addition, the agreement with the purchaser provides that the eventual expected recovery by CSR of such plan termination settlement costs from the customer as provided for under federal Cost Accounting Standards (“CAS”) Section 413, whereby contractors may recover such costs from the government plus interest, will be reimbursed to the business. The CSR pension plan termination process commenced in September 2015, and may take upwards of 12 months to be completed. The current estimate of the share of the funding obligation that would be attributable to the purchaser and, therefore to be advanced by CSC, is approximately $26.0 million. The ultimate plan termination settlement funding obligation will be based on economic factors, including long-term interest rates that impact the cost of annuities offered by insurers at the time of the actual plan termination settlement. The fair value of CSC’s funding advance obligation net of subsequent expected recoveries was recorded by CSRA prior to CSRA’s separation from CSC. As part of the separation, CSC and CSRA agreed that CSC would transfer all rights, title and interest of the agreement to fund the CSR pension settlement obligation that would otherwise be the responsibility of CSC to CSRA. CSC’s obligation to advance funds, and therefore CSRA’s obligation to indemnify, will become due no later than October 15, 2016.

Unless otherwise noted, CSRA is unable to develop a reasonable estimate of a possible loss or range of losses associated with the following contingent matters at this time.

Maryland Medicaid Enterprise Restructuring Project

After competitive bidding on March 1, 2012, CSC was awarded the Maryland Medicaid Enterprise Restructuring Project (“MERP”) contract by the State of Maryland (the “State”) to modernize the Medicaid Management Information System (“MMIS”), a database of Medicaid recipients and providers used to manage Medicaid reimbursement claims. The MERP contract was predominately fixed-price. Since the date the MERP was awarded, U.S. federal government-mandated Medicaid IT standards have been in considerable flux. The State directed CSC to include additional functionality in the design to incorporate new federal mandates and guidance promulgated after the base scope of the Contract was finalized. Further, the State declined to approve contract modifications to compensate CSC for the additional work.

As a result of the State’s refusal to amend the MERP contract and equitably adjust the compensation to be paid to CSC and, in accordance with prescribed State statutes and regulations, CSC timely filed a certified contract claim in September 2013, which after various procedural developments is now pending before the Maryland Board of Contracts Appeals (the “State Board”).

On August 22, 2014, the State unilaterally suspended performance under the Contract for 90 days and repeatedly extended the suspension until providing a Notice of Default termination in October 2015. As the result of the suspension and other actions and inactions by the State in performance of its obligations under the Contract, in October 2014, CSC filed additional claims under various legal theories, such that currently the total amount claimed by CSC is approximately $80.0 million.

Between April 2015 and September 2015, CSC and the State were in settlement negotiations to restructure the program and resolve all issues, including CSC’s contract claims. However, on September 14, 2015, the State orally advised CSC that the State elected to abandon the contract settlement and restructuring discussions. On October 14, 2015, the State provided CSC with a Notice of Default Termination. When a contract is terminated for default, Maryland procurement regulations allow the State to procure substitute performance, with the contractor being liable for any excess reprocurement costs. Any State claim against CSC arising from a default termination for reprocurement costs would be appealable by CSC to the State Board, as is the default termination itself. The State has not asserted a claim for reprocurement costs and, were it do so, CSC believes such a claim to be meritless and unsupported by the facts.

CSRA challenged the legal basis of the State’s termination for default in a Claim for $83.0 million filed with the State on December 14, 2015. The Claim subsumes the quantum of the prior claims and seeks to convert the termination to a convenience termination. The State has not rendered a decision on the latest claim; however, if it is denied, CSRA will appeal through litigation at the State Board.

On December 22, 2015, the State filed a Motion to Dismiss CSC’s Claim with the State Board. CSC responded to the State’s Motion to Dismiss on January 19, 2016. As set forth in CSC’s extensive brief, the four arguments made in the State’s Motion are based on an incomplete and flawed discussion of the Contract and the factual record. On May 6, 2016, the State Board held a hearing on the Department’s motion and decided to take the motion under advisement. The Board requested that the Department move expeditiously to arrive at a final decision on CSC’s other claims and indicated that it would then consolidate the claims going forward and, at that time, might issue a decision on the Department’s motion. When all of the material parts of the Contract and record are considered, CSRA believes that CSC is entitled to prevail on all of the issues raised by the Department’s motion.

On July 14, 2016, CSRA received a copy of a claim for breach of contract against CSC filed by the DHMH Contract Monitor with the DHMH Procurement Officer (the “State Claim”). The claim was filed in accordance with Maryland State procedure for claims against State contractors. If the DHMH Procurement Officer takes final action on the claim — which is likely to be an approval thereof — CSC and/or CSRA will be able to appeal to the State Board.

The State Claim seeks damages in excess of $30.0 million. Categories of damages include: the full amount paid to CSC, $30.0 million; costs to be incurred by the State in procuring substitute performance; amounts paid by the State to its project management consultant; lost federal reimbursement from CMS; and additional costs incurred by the State, including wages, attributable to CSC’s alleged breach.

The State Claim is based solely on issues raised in the State’s February 14, 2014, and March 14, 2014, cure notices which were fully addressed by CSC in the relevant timeframe. No new facts are contained in the State Claim. Subsequent to the cure notices, the State unilaterally suspended contract performance for over one year.

As CSC proceeds with the claims litigation, CSC expects to consolidate all of its claims against the State with any claims arising from the default termination. CSRA will litigate on behalf of CSC and indemnify CSC for the costs of litigation and any other costs or liabilities CSC may incur in the litigation. Recovery by CSC will be credited to CSRA. Management has evaluated the recoverability of assets related to the contract in light of these developments and concluded that no adjustments to its financial statements are required. Further, we have assessed the legal risk associated with the State Claim under ASC 450 and have concluded at this time that no reserve is required.

Strauch et al. Fair Labor Standards Act Class Action

On July 1, 2014, plaintiffs filed Strauch and Colby v. Computer Sciences Corporation in the U.S. District Court for the District of Connecticut, a putative nationwide class action alleging that CSC violated provisions of the Fair Labor Standards Act (“FLSA”) with respect to system administrators who worked for CSC at any time from June 1, 2011 to the present. Plaintiffs claim that CSC improperly classified its system administrators as exempt from the FLSA and that CSC, therefore, owes them overtime wages and associated relief available under the FLSA and various statutes, including the Connecticut Minimum Wage Act, the California Unfair Competition Law, California Labor Code, California Wage Order No. 4-2001, and the California Private Attorneys General Act. CSC’s Motion to Transfer Venue was denied in February 2015. In September 2015, plaintiffs filed an amended complaint, which added claims under Missouri and North Carolina wage and hour laws. The relief sought by Plaintiffs includes unpaid overtime compensation, liquidated damages, pre- and post-judgment interest, damages in the amount of twice the unpaid overtime wages due, and civil penalties. If a liability is ultimately incurred as a result of these claims, CSRA would pay a portion to CSC pursuant to an indemnity obligation. CSC and CSRA both maintain the position that system administrators have the job duties, responsibilities, and salaries of exempt employees and are properly classified as exempt from overtime compensation requirements.

On June 9, 2015, the Court entered an order granting the plaintiffs’ motion for conditional certification of the class of system administrators. The conditionally certified FLSA and putative classes include approximately 1,285 system administrators, of whom 407 are employed by CSRA and the remainder employed by CSC. Courts typically undertake a two-stage review in determining whether a suit may proceed as a class action under the FLSA. In its order, the Court noted that, as a first step, the Court examines pleadings and affidavits, and if it finds that proposed class members are similarly situated, the class is conditionally certified. Potential class members are then notified and given an opportunity to opt-in to the action. The second step of the class certification analysis occurs upon completion of discovery. At that point, the Court will examine all evidence then in the record to determine whether there is a sufficient basis to conclude that the proposed class members are similarly situated. If it is determined that they are, the case will proceed to trial; if it is determined they are not, the class is decertified and only the individual claims of the purported class representatives proceed. CSRA’s and CSC’s position in this litigation continues to be that the employees identified as belonging to the conditional class were paid in accordance with the FLSA and applicable state laws.

The parties have explored potential settlement scenarios but have not concluded any settlement. Accordingly, the litigation is ongoing and briefing on plaintiffs’ motion for class certification, the next step in the litigation, is in progress.

CECOM Rapid Response Demand Letter

On July 12, 2013, the U.S. Army’s Communications-Electronics Command (“CECOM”) issued a demand letter based upon DCAA audit reports and Form 1, for reimbursement in the amount of $235.2 million in costs that CSC allegedly overcharged under its Rapid Response (“R2”) contract (Contract No. DAAB07-03-D-B007) by placing CSC, interdivisional, teammate, and vendor employees in R2 labor categories for which they were not qualified. CSC’s position has been that, in most instances, the individuals in question met the contract requirements for their labor categories, and that, in all instances, DCAA and CECOM have ignored the value the government received for CSC’s work. CSC and CECOM have engaged in discussions in an attempt to resolve this issue but, at this point in time, there can be no assurance that the parties will be able to resolve their differences, in which case CSRA expects to litigate this matter.

DynCorp

In connection with CSC’s acquisition of DynCorp in 2003 and its divestiture of substantially all of that business in two separate transactions (in 2005 to The Veritas Capital Fund II L.P. and DI Acquisition Corp. and in 2013 to Pacific Architects and Engineers, Incorporated (collectively, the “DynCorp Divestitures”)), CSC assumed and Computer Sciences GS Business will retain various environmental indemnities of DynCorp and its former subsidiaries arising from environmental representations and warranties under which DynCorp agreed to indemnify the purchasers of its subsidiaries DynAir Tech and DynAir Services by Sabreliner Corporation and ALPHA Airports Group PLC, respectively. As part of the DynCorp Divestitures, CSC also assumed and Computer Sciences GS Business will also retain indemnities for insured litigation associated with dormant suits by former employees of DynCorp subsidiaries alleging exposure to asbestos and other substances; other indemnities related to a 2001 case arising from counter-narcotics spraying in Colombia under a U.S. Department of State contract and an environmental remediation case involving HRI, a former wholly owned subsidiary of DynCorp, in Lawrenceville, New Jersey. CSRA does not anticipate any material adverse effect on its financial position, results of operations and cash flows from these indemnities. Litigation involving DynCorp’s aviation insurance underwriters was recently resolved and had no significant effect on our results for fiscal year 2017.

Southwest Asia Employment Contract Litigation

Rishell v. CSC, a single plaintiff lawsuit, was filed in February 2013 in Florida.  In April 2013, a second lawsuit, Rhodes v. CSC, with five plaintiffs was filed in Mississippi.  Both cases were consolidated before the United States District Court for the Eastern District of Virginia in 2014.  Summary judgment was granted in each case on December 10, 2014, with the Rishell case decided under Florida law and the Rhodes case under Virginia law.

On May 2, 2016, the U.S. Court of Appeals for the Fourth Circuit ruled against CSC in an appeal of these two consolidated cases, the liability for which the Company is contractually obligated to indemnify CSC pursuant to the terms of the Master Separation and Distribution Agreement between CSRA and CSC. These cases involved six former CSC employees with each of whom CSC had entered into two contracts upon employment: a general “Offer Letter” specifying an “hourly rate” to be paid biweekly, and a more specific “Foreign Travel Letter” specifying certain aspects of the employees’ employment while working overseas in Southwest Asia as civilian government contractors. Employees had sued CSC, claiming entitlement to be paid on an hourly rate, as specified in the Offer Letter, as opposed to being paid on a salary basis, which is how CSC compensated them. The District Court had held as a matter of contract interpretation that the two contracts, read together, required CSC to pay the employees by the hour. The Fourth Circuit in its May 2 unpublished opinion agreed with the trial court. A reserve for the amount of damages awarded by the trial court and for which the Company will be required to indemnify CSC has been included in the Company’s Consolidated and Condensed Financial Statements.

In addition to the two consolidated cases that were the subject of the Fourth Circuit’s opinion, there are currently an additional six similar cases, involving approximately 85 individuals, pending before federal and state courts in California, Louisiana, and Virginia that have yet to be adjudicated. Plaintiffs in these cases present similar claims, that they worked in excess of 40 hours per week, they were compensated with a salary based on a 40-hour work week, and this violated the terms of their Offer Letters that quoted an hourly wage. It is reasonably possible that the trial courts considering these cases will interpret the Offer Letter and Foreign Travel Letter at issue in these other cases similarly to the Fourth Circuit and may enter judgments against CSC awarding damages. However, there remain differences among the pending cases, including statutes of limitations, which may lengthen or shorten the period of time for when damages may be recovered, and differences between plaintiffs’ legal entitlement to other damages or awards, such as punitive damages or attorneys’ fees. These are issues of state contract or statutory law and depend upon which states’ laws apply to the individual plaintiffs. These issues have not been resolved. The range of possible losses for which the Company would be required to indemnify CSC associated with these pending matters is between $0.0 million and $14.0 million.

CSRA accrues a liability when management believes that it is both probable that a liability has been incurred and the amount of loss can be reasonably estimated under ASC 450. CSRA believes it has appropriately recognized liabilities for any such matters. In addition to the matters noted above, CSRA is currently party to a number of disputes which involve or may involve litigation. Regarding other matters that may involve actual or threatened disputes or litigation, CSRA, in accordance with the applicable reporting requirements, provides disclosure of such matters for which the likelihood of material loss is reasonably possible. CSRA assessed reasonably possible losses for all other such pending legal or other proceedings in the aggregate and concluded that the range of potential loss is not material.

CSRA also considered the requirements regarding estimates used in the disclosure of contingencies under ASC Subtopic 275-10, Risks and Uncertainties. Based on that guidance, CSRA determined that supplemental accrual and disclosure was not required for a change in estimate that involves contingencies because CSRA determined that it was not reasonably possible that a change in estimate will occur in the near term. CSRA reviews contingencies during each interim period and adjusts its accruals to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

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Subsequent Events

3 Months Ended

Jul. 01, 2016

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On August 10, 2016, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share.  Payment of the dividend will be made on October 4, 2016 to CSRA stockholders of record at the close of business on August 31, 2016.

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Description of the Business, Basis of Presentation and Recent Accounting Pronouncements (Policies)

3 Months Ended

Jul. 01, 2016

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited Consolidated and Condensed Financial Statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission, and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended April 1, 2016. The interim period unaudited Consolidated and Condensed Financial Statements are presented as described below.

Prior to the Spin-Off, the Company consisted of the business of CSC’s North American Public Sector segment and did not operate as a separate, stand-alone entity. Consequently, the period prior to the Spin-Off, as of and for the three months ended July 3, 2015, consists solely of the accounts and results of the Computer Sciences GS Business. The period subsequent to the Spin-Off and the Mergers, as of and for the three months ended July 1, 2016, consists of the consolidated accounts of CSRA and its wholly owned subsidiaries, which include the activity and operating results of SRA. All intercompany transactions and balances have been eliminated.

Certain information and disclosures normally required for annual financial statements have been condensed or omitted pursuant to 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 accompanying unaudited financial statements for the period prior to the Spin-Off are prepared on a carved-out and combined basis from the financial statements of CSC. Such carved-out and combined amounts were determined using the historical results of operations and carrying amounts of the assets and liabilities transferred to CSRA. Related-party transactions between CSRA and CSC or the Computer Sciences GS Business and other businesses of CSC are reflected as related-party transactions. For additional information, see Note 2—Related-Party Transactions and Corporate Allocations.

For the period prior to the Spin-Off, the unaudited Combined Condensed Financial Statements include all revenues and costs directly attributable to the Computer Sciences GS Business and an allocation of expenses related to certain CSC corporate functions, including, but not limited to, senior management, legal, human resources, finance, IT and other shared services. These expenses had been allocated to the Computer Sciences GS Business based on direct usage or benefit where identifiable, with the remainder allocated on a pro rata basis of revenues, headcount, square footage, number of transactions or other measures. The Computer Sciences GS Business considered these allocations to be a reasonable reflection of the utilization of services by, or benefit provided to it. However, the allocations may not be indicative of the actual expense that would have been incurred had the Computer Sciences GS Business operated as an independent, stand-alone entity for the period presented.

Prior to the Spin-Off, CSC maintained various benefit and share-based compensation plans at a corporate level and other benefit plans at a subsidiary level. The employees of CSRA participated in those plans and a portion of the cost of those plans for the period prior to the Spin-Off is included in the unaudited Consolidated and Condensed Financial Statements for the period prior to the Spin-Off. However, the unaudited Combined Condensed Balance Sheets do not include any net benefit plan obligations unless the benefit plan covered only the Company’s active, retired and other former employees or any expense related to share­ based compensation plans. See Notes 11—Pension and Other Postretirement Benefit Plans and Note 12—Share Based Compensation Plans for further information about our benefit plans and share-based compensation, respectively.

For the period presented prior to the Spin-Off, the unaudited Combined and Condensed Financial Statements include current and deferred income tax expense that has been determined for the legacy Computer Sciences GS Business as if it were a separate taxpayer (i.e., following the separate return methodology).

CSRA reports its results based on a fiscal year convention that comprises four thirteen-week quarters. Every fifth year includes an additional week in the first quarter to prevent the fiscal year from moving from an approximate end of March date. For accounting purposes, the unaudited Consolidated and Condensed Financial Statements reflect the financial results of SRA for the three months ended June 30, 2016 combined with the Computer Sciences GS Business for the three months ended July 1, 2016.

Use of Estimates

Use of Estimates

GAAP requires management to make estimates and assumptions that affect certain amounts reported in the Consolidated and Condensed Financial Statements and accompanying notes. These estimates are based on management’s best knowledge of historical experience, current events and various other assumptions that management considers reasonable under the circumstances. Actual results could differ from those estimates. Amounts subject to significant judgment and/or estimates include, but are not limited to, determining the fair value of asset acquired and liabilities assumed, costs to complete fixed-price contracts, cash flows used in the evaluation of impairment of goodwill and other long-lived intangible assets, certain deferred costs, collectability of receivables, reserves for tax benefits and valuation allowances on deferred tax assets, loss accruals for litigation, and inputs used for computing share-based compensation and pension related liabilities.

Fair Value Measurements

Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in the principal or most advantageous market in an orderly transaction between marketplace participants. The accounting guidance for fair value measurements establishes a three level fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

Level 1— Unadjusted quoted prices in active markets for identical assets or liabilities.

Level 2— Quoted prices for similar assets or liabilities or quoted market prices for identical or similar assets in markets that are not active.     

Level 3— Valuations derived from valuation techniques in which one or more significant inputs are observable.

Our assets and liabilities which are valued using the fair value measurement guidance, on a recurring basis, include pension assets and derivative instruments, consisting of interest rate swap contracts and total return swaps. Our pension assets are valued using model based pricing methods that use observable market data; as such these inputs are considered Level 2 inputs. The fair value of interest rate swaps is estimated based on valuation models that use observable interest rate yield curves as inputs. Total return swaps are settled on the last day of every fiscal month. Therefore, the value of any total return swaps outstanding as of any balance sheet date is not material. The inputs used to estimate the fair value of the Company's derivative instruments are classified as Level 2. No significant assets or liabilities are measured at fair value on a recurring basis using significant unobservable (Level 3) inputs.

Certain assets and liabilities are measured at fair value on a non-recurring basis. These include assets and liabilities acquired in a business combination, equity-method investments and long-lived assets, which would be recognized at fair value if deemed to be impaired or if reclassified as assets held for sale. The fair value in these instances would be determined using Level 3 inputs.

The Company’s financial instruments include cash, trade receivables, vendor payables, derivative financial instruments, and debt. As of July 1, 2016, the carrying value of cash, trade receivables, and vendor payables approximated their fair value. The carrying amounts of the Company’s financial instruments with short-term maturities are deemed to approximate their market values. The carrying amount of the Company’s long-term debt, excluding capital leases was $2.6 billion and $2.7 billion at July 1, 2016 and April 1, 2016, respectively, and approximated its fair value on July 1, 2016, based on recent trading activity. The fair value of long-term debt is estimated based on the current interest rates offered to the Company for instruments with similar terms and remaining maturities and are classified as Level 2.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

New Accounting Standards

During the three months ended July 1, 2016, CSRA adopted the following Accounting Standard Updates (“ASUs”):

In March 2016, the FASB issued ASU 2016-09, Improvements to Employee Share-Based Payment Accounting (Topic 718) (“ASU 2016-09”), which simplifies several aspects of accounting for share-based payment award transactions related to accounting for income taxes, forfeitures, statutory tax withholding requirements, classification of awards as either equity or liabilities, and classification of employee taxes paid on the statements of cash flows when an employer withholds shares for tax-withholding purposes. The standard is effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods. Early adoption is permitted in any interim or annual period. At implementation of ASU 2016-09, a company may elect to adopt certain simplifications on a prospective or retrospective basis.

CSRA early adopted ASU 2016-09, effective for the period ended July 1, 2016. Certain of the simplification provisions were not applicable to CRSA. The primary impact of adoption was our election to no longer estimate forfeitures, but instead account for the forfeitures as they occur.  The change in accounting for forfeitures was applied on a modified retrospective basis; accordingly, a cumulative adjustment of $1.1 million was recognized as a reduction of accumulated earnings (deficit) upon adoption. The Company also adopted the simplification provision requiring recognition of excess tax benefits in the income statement as a discrete event and the provision related to the presentation of excess tax benefits and deficiencies within operating activities in the statement of cash flows on a prospective basis, beginning in the three months ended July 1, 2016. The adoption of this provision was not material to the Company’s financial results for the period.

Standards Issued But Not Yet Effective

The following ASUs were recently issued but have not yet been adopted by CSRA:

In May 2014, the Financial Accounting Standards Board (FASB) issued a new standard, ASC Topic 606, Revenue from Contracts with Customers that will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements. On July 9, 2015, the FASB approved a one-year deferral of the effective date, which for CSRA would make the standard effective at the start of fiscal year 2019 (April 1, 2018). The FASB provided an option that would permit us the ability to adopt the standard beginning fiscal year 2018 (April 1, 2017). Early adoption prior to fiscal year 2018 is not permitted. The new standard may be adopted either retrospectively or on a modified retrospective basis whereby the new standard would be applied to new contracts and existing contracts with remaining performance obligations as of the effective date, with a cumulative catch-up adjustment recorded to beginning retained earnings at the effective date for existing contracts with remaining performance obligations.

The new standard requires us to identify contractual performance obligations and determine when revenue should be recognized. This and other requirements could change the method or timing of revenue recognition for our firm-fixed-price and cost-reimbursable-plus-fee contract portfolio. As a result, we are applying an integrated approach to analyzing the standard’s impact on our contract portfolio, including a review of accounting policies and practices, evaluating differences from applying the requirements of the new standard to our contracts and business practices, and assessing the need for system changes or enhancements. As changes in estimated profit will be recognized in the period they are identified, rather than prospectively over the remaining contract term, the impact of revisions of contract estimates may be larger and potentially more variable from period to period. Anticipated losses on contracts will continue to be recognized in the period they are identified. While our assessment continues, we have not yet selected a transition date or method nor have we yet determined the effect of the adoption of this standard on our Consolidated and Condensed Financial Statements and, as a result, our evaluation of the effect of adoption will extend into future periods.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”), which supersedes the current guidance related to accounting for leases. The guidance requires lessees to recognize most leases on-balance sheet as a right of use asset and lease liability. ASU 2016-02 will also require expanded qualitative and quantitative disclosures designed to give financial statement users additional information on the amount, timing, and uncertainty of cash flows arising from CSRA leases. The standard is required to be adopted using the modified retrospective approach. The standard will be effective for the first interim period within annual periods beginning after December 15, 2019 with early adoption permitted. CSRA is currently evaluating the impact of adoption on CSRA’s Consolidated and Condensed Financial Statements.

Other recently issued ASUs effective after July 1, 2016 are not expected to have a material effect on CSRA’s Consolidated and Condensed Financial Statements.

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Acquisitions and Divestitures (Tables)

3 Months Ended

Jul. 01, 2016

Business Combinations [Abstract]

Fair Value of Assets Acquired and Liabilities Assumed

The following table reflects the preliminary fair values of assets acquired and liabilities assumed as of November 30, 2015 (including adjustments subsequent to closing):

Preliminary allocation (in millions):
Cash, accounts receivable and other current assets	$	302
Property, equipment and other long-term assets		47
Intangibles—customer relationships, backlog and other intangibles assets		891
Accounts payable and other current liabilities		(193	)
Other long-term liabilities		(26	)
Deferred tax liabilities		(261	)
Total identified net assets acquired		760
Goodwill		1,540
Estimated total purchase consideration and liabilities paid at closing	$	2,300

Pro Forma Information

The following unaudited pro forma financial information presents results as if the Spin-Off and the Mergers and the related financing had occurred prior to April 3, 2015. The historical consolidated financial information of CSRA and SRA has been adjusted in the pro forma information to give effect to the events that are (1) directly attributable to the transactions, (2) factually supportable and (3) expected to have a continuing impact on the consolidated results. The consolidated financial information of SRA includes merger and integration costs that are not expected to recur and impact the consolidated results over the long term. The unaudited pro forma results do not reflect future events that have occurred or may occur after the transactions, including but not limited to, the impact of any actual or anticipated synergies expected to result from the Mergers. Accordingly, the unaudited pro forma financial information is not necessarily indicative of the results of operations as they would have been had the transactions been effected prior to April 3, 2015, nor is it necessarily an indication of future operating results.

	Three Months Ended July 1, 2016
(Dollars in millions, except per share amounts)		CSRA Three Months Ended July 1, 2016		Effects of Spin-Off		Effects of Mergers (a)		Pro Forma for Spin-Off and Merger
Revenue	$	1,254	$	—	$	—	$	1,254
Income (loss) attributable to CSRA Shareholders		65		—		3		68
Income per common share:
Basic	$	0.40					$	0.42
(a) Income from continuing operations effected for the Merger excludes $3 million, net of tax, of non-recurring costs incurred to give effect to the merger of SRA and CSRA.

	Three Months Ended July 3, 2015
(Dollars in millions, except per share amounts)		Historical Computer Sciences GS Three Months Ended July 3, 2015		Historical SRA Three Months Ended June 30, 2015		Effects of Spin-Off		Effects of Merger			Pro Forma for Spin-Off and Merger
Revenue	$	959	$	359	$	—	$	(1	)	$	1,317
Income (loss) attributable to Parent		63		1		13		10			87
Income (loss) per common share:
Basic	$	0.45								$	0.53

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Goodwill and Other Intangible Assets (Tables)

3 Months Ended

Jul. 01, 2016

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of amortizing intangible assets

Purchased and internally developed software (for both external and internal use), net of accumulated amortization, consisted of the following:

		As of
(Dollars in millions)		July 1, 2016		April 1, 2016
Purchased software	$	37	$	40
Internally developed software for external use		1		1
Internally developed software for internal use		6		—
Total software	$	44	$	41

A summary of amortizing intangible assets is as follows:

		As of
		July 1, 2016
(Dollars in millions)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Customer-related intangibles	$	953		(144	)		809
Backlog		65		(38	)		27
Other intangible assets		51		(48	)		3
Software		142		(98	)		44
Total intangible assets	$	1,211	$	(328	)	$	883

		As of
		April 1, 2016
(Dollars in millions)		Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Customer-related intangibles	$	954	$	(133	)	$	821
Backlog		65		(22	)		43
Other intangible assets		52		(46	)		6
Software		136		(95	)		41
Total intangible assets	$	1,207	$	(296	)	$	911

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Accrued Expenses and Other Current Liabilities (Tables)

3 Months Ended

Jul. 01, 2016

Payables and Accruals [Abstract]

Schedule of Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

		As of
(Dollars in millions)		July 1, 2016		April 1, 2016
Accrued contract costs	$	223	$	248
Deferred revenue		153		140
Accrued expenses		104		132
Other		10		8
Total	$	490	$	528

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Debt (Tables)

3 Months Ended

Jul. 01, 2016

Debt Disclosure [Abstract]

Schedule of Long-term Debt

The following is a summary of CSRA’s outstanding debt as of July 1, 2016 and April 1, 2016:

		July 1, 2016			April 1, 2016
Revolving credit facility, due November 2020	$	—		$	50
Tranche A1 facility, due November 2018		590			600
Tranche A2 facility, due November 2020		1,407			1,432
Term Loan B facility, due November 2022		735			748
Capitalized lease liability		144			151
Total debt		2,876			2,981
Less: unamortized debt issuance costs		(43	)		(46	)
Less: current portion of long-term debt and capitalized lease liability		(114	)		(170	)
Total long-term debt, net of current maturities (1)	$	2,719		$	2,765
(1) As of July 1, 2016, the fair value of the Company’s debt, based on recent trading activity, approximated carrying value. We determined the fair value of our long-term debt using Level 2 inputs, in which fair value is generally estimated based on quoted market prices for identical or similar instruments.

Schedule of Maturities of Long-term Debt

Expected maturities of long-term debt, excluding future minimum capital lease payments for fiscal years subsequent to July 1, 2016, are as follows:

Fiscal Year		Amount (in Millions)
2017	$	48
2018		75
2019		670
2020		80
2021		1,149
Thereafter		710
Total	$	2,732

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Pension and Other Post-retirement Benefit Plans (Tables)

3 Months Ended

Jul. 01, 2016

Compensation and Retirement Disclosure [Abstract]

Schedule of Net Benefit Costs

Net periodic postretirement benefit costs (in millions)		Three Months Ended
		July 1, 2016			July 3, 2015
Service cost	$	—		$	—
Interest cost		1			—
Expected return on assets		(1	)		—
Amortization of prior service benefit		(3	)		(1	)
Net periodic (benefit) cost	$	(3	)	$	(1	)

The net periodic pension benefit for CSRA pension plans includes the following components:

Net periodic pension costs (dollars in millions)		Three Months Ended
		July 1, 2016			July 3, 2015
Service cost		3			—
Interest cost	$	26		$	1
Expected return on assets		(49	)		(1	)
Net periodic pension benefit	$	(20	)	$	—

Changes in Projected Benefit Obligations, Fair Value of Plan Assets, and Funded Status of Plan

The following table provides the OPEB plans’ projected benefit obligations, assets, and a statement of their funded status:

		As of
(Dollars in millions)		July 1, 2016			April 1, 2016
Net benefit obligation	$	(92	)	$	(93	)
Net plan assets		75			76
Net unfunded status	$	(17	)	$	(17	)

The following table provides the pension plans’ projected benefit obligations, assets, and a statement of their funded status:

		As of
(Dollars in millions)		July 1, 2016			April 1, 2016
Net benefit obligation	$	(3,209	)	$	(3,222	)
Net plan assets		2,594			2,585
Net unfunded status	$	(615	)	$	(637	)

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Share-Based Compensation Plans (Tables)

3 Months Ended

Jul. 01, 2016

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of Recognized Share-based Compensation Expense

For the three months ended July 1, 2016 and July 3, 2015, CSRA recognized share-based compensation expense as follows:

		Three Months Ended
(Dollars in millions)		July 1, 2016		July 3, 2015
Cost of services	$	—	$	(1.4	)
Selling, general and administrative expenses		3.0		0.6
Total	$	3.0	$	(0.8	)
Total, net of tax	$	1.9	$	(0.5	)

Schedule of Weighted-Average Assumptions for Stock Options

In calculating the compensation expense for its stock incentive plans, the following weighted-average assumptions were used:

	Three Months Ended
	July 1, 2016		July 3, 2015
Risk-free interest rate	1.39	%	1.77	%
Expected volatility	30.90	%	31.76	%
Expected term (in years)	4.80		6.06
Dividend yield	1.61	%	1.39	%

Disclosure of Share-based Compensation by Award Type

Information concerning RSUs (including PSUs) of CSRA during the three months ended July 1, 2016, was as follows:

	Number of Restricted Stock Units			Weighted Average Fair Value
Outstanding as of April 1, 2016	376,557		$	29.39
Granted	543,835			25.67
Vested	(94,362	)		26.00
Canceled/Forfeited	(12,226	)		31.90
Outstanding as of July 1, 2016	813,804			27.26

Information concerning stock options of CSRA during the three months ended July 1, 2016 was as follows:

	Number of Option Shares			Weighted Average Exercise Price per share	Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in millions)
Outstanding as of April 1, 2016	1,502,547		$	23.06	7.0	$	7.6
Granted	997,515			24.77
Exercised	(99,681	)		20.11
Canceled/Forfeited	(31,960	)		28.09
Expired	(48,079	)		26.37
Outstanding as of July 1, 2016	2,320,342			23.78	8.4		4.0
Vested and expected to vest in the future as of July 1, 2016	2,320,342			23.78	8.4		4.0
Exercisable as of July 1, 2016	700,514			22.70	5.5		1.9

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Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) (Tables)

3 Months Ended

Jul. 01, 2016

Equity [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The following tables show the activity in the components of other comprehensive income (loss), including the respective tax effects, and reclassification adjustments for the three months ended July 1, 2016 and July 3, 2015, respectively. Accumulated other comprehensive income (loss) was as follows:

		For the Three Months Ended July 1, 2016
(Dollars in millions)		Before Tax Amount		Tax Impact Increase (Decrease)	Net of Tax Amount
Foreign currency translation adjustments	$	—		—	—
Unrealized loss on interest rate swap		(10	)	4	(6	)
Amortization of prior service credit		(3	)	1	(2	)
Total other comprehensive income	$	(13	)	5	(8	)

		For the Three Months Ended July 3, 2015
(Dollars in millions)		Before Tax Amount		Tax Impact Increase (Decrease)	Net of Tax Amount
Foreign currency translation adjustments	$	—		—	—
Amortization of prior service credit		(1	)	—	(1	)
Total other comprehensive income	$	(1	)	—	(1	)

Reclassification Out of Accumulated Other Comprehensive Income (Loss)

The following tables show the changes in Accumulated other comprehensive (loss) income for the three months ended July 1, 2016 and July 3, 2015, respectively:

(Dollars in millions)		Foreign Currency Translation Adjustments		Cash Flow Hedge			Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance as of April 1, 2016	$	—	$	(7	)	$	28		$	21
Other comprehensive income (loss), net of taxes		—		(6	)		—			(6	)
Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests		—		—			(2	)		(2	)
Balance as of July 1, 2016	$	—	$	(13	)	$	26		$	13

(Dollars in millions)		Foreign Currency Translation Adjustments			Pension and Other Postretirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance as of April 3, 2015	$	(2	)	$	2		$	—
Other comprehensive income, net of taxes		—			—			—
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests		—			(1	)		(1	)
Balance as of July 3, 2015	$	(2	)	$	1		$	(1	)

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Segment Information (Tables)

3 Months Ended

Jul. 01, 2016

Segment Reporting [Abstract]

Operating Results by Reportable Segment

The following table summarizes operating results and total assets by reportable segments:

(Dollars in millions)		Defense and Intelligence		Civil		Subtotal		Corporate(1)		Total
As of July 1, 2016
Total assets	$	1,784	$	2,768	$	4,552	$	232	$	4,784
Three Months Ended July 1, 2016
Revenues	$	568	$	686	$	1,254	$	—	$	1,254
Segment operating income		54		105		159		—		159
Depreciation and amortization expense		34		31		65		—		65
As of July 3, 2015
Total assets	$	1,187	$	752	$	1,939	$	—	$	1,939
Three Months Ended July 3, 2015
Revenues	$	507	$	452	$	959	$	—	$	959
Segment operating income		64		61		125		—		125
Depreciation and amortization expense		22		11		33		—		33
(1) Total assets allocated to the Corporate Segment consist of the following: (1) $131.9 million of cash, (2) $18.4 million of Accounts Receivable, and (3) $81.3 million of net Property, plant, and equipment

Reconciliation of Combined Operating Income to Income Before Taxes

A reconciliation of consolidated segment operating income to income before income taxes is as follows:

		Three Months Ended
(Dollars in millions)		July 1, 2016			July 3, 2015
Segment operating income	$	159		$	125
Corporate G&A		(17	)		(15	)
Separation and merger costs		(5	)		(15	)
Interest expense, net		(30	)		(5	)
Other (expense) income, net		(1	)		19
Income before income taxes	$	106		$	109

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Commitments and Contingencies (Tables)

3 Months Ended

Jul. 01, 2016

Commitments and Contingencies Disclosure [Abstract]

Expiration Of Financial Guarantees

The following table summarizes the expiration of CSRA’s financial guarantees and stand-by letters of credit outstanding as of July 1, 2016:

(Dollars in millions)		Fiscal 2017		Fiscal 2018		Fiscal 2019 and Thereafter		Total
Stand-by letters of credit	$	32	$	12	$	—	$	44
Surety bonds		—		13		—		13
Total	$	32	$	25	$	—	$	57

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Description of the Business, Basis of Presentation and Recent Accounting Pronouncements (Details) $ in Millions	3 Months Ended
	Jul. 01, 2016 USD ($) reportable_segment	Jul. 03, 2015 USD ($)	Apr. 01, 2016 USD ($)	Nov. 30, 2015 merger
Entity Information [Line Items]
Number of segments | reportable_segment	2
Number of mergers | merger				2
Gross favorable adjustments	$ 11.0	$ 22.0
Gross unfavorable adjustments	(8.0)	(5.0)
Unbilled contracts receivable	12.9		$ 14.4
Depreciation expense	32.4	$ 27.6
Long-term debt, excluding capital leases	2,623.0		$ 2,656.0
Retained earnings | Accounting Standards Update 2016-09 | New accounting pronouncement, early adoption, effect
Entity Information [Line Items]
Cumulative adjustment to reduction of accumulated earnings (deficit)	$ (1.1)

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Related-Party Transactions and Corporate Allocations (Details) - Computer Sciences Corporation - Affiliated entity - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Allocated Expenses
Related Party Transaction [Line Items]
Allocated expenses		$ 56.6
Intellectual Property Matters Agreement
Related Party Transaction [Line Items]
Annual maintenance fee	$ 30.0
Term of agreement (in years)	5 years
Annual maintenance fee, amortization period (in years)	1 year
Selling, general and administrative expenses | Intellectual Property Matters Agreement
Related Party Transaction [Line Items]
Annual maintenance fee, amortization expense	$ 7.5

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Acquisitions and Divestitures - Fiscal 2016 Divestiture (Details) - USD ($) $ in Millions		3 Months Ended
	Apr. 27, 2015	Jul. 01, 2016	Jul. 03, 2015
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of business		$ 0.0	$ 34.0
Welkin Associates Limited | Disposal group, disposed of by sale, not discontinued operations
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Proceeds from divestiture of business	$ 34.0
Net assets divested	13.8
Goodwill divested	10.7
Transaction costs	1.7
Welkin Associates Limited | Disposal group, disposed of by sale, not discontinued operations | Other expense (income), net
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Pre-tax gain on divestiture of business	$ 18.5

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Acquisitions and Divestitures - Fiscal 2016 Acquisition (Details) - USD ($) $ / shares in Units, $ in Millions		3 Months Ended
	Nov. 30, 2015	Apr. 01, 2016	Jul. 01, 2016
Business Acquisition [Line Items]
Goodwill		$ 2,332.0	$ 2,332.0
Merger With SRA International
Business Acquisition [Line Items]
Total consideration transferred	$ 2,300.0
Payments for acquisition	390.0
Cash acquired from acquisition	$ 48.3
Business acquisition, number of shares issued (in shares)	25,170,564
Fair market value of share consideration (in USD per share)	$ 30.95
Debt assumed	$ 1,100.0
Acquiree-related transaction costs	29.9
Reduction of goodwill		$ 12.3
Goodwill	$ 1,540.0
Merger With SRA International | Common Stock Issued
Business Acquisition [Line Items]
Percentage of aggregate number of shares issued	15.32%
Defense and Intelligence | Merger With SRA International
Business Acquisition [Line Items]
Goodwill	$ 334.9
Civil | Merger With SRA International
Business Acquisition [Line Items]
Goodwill	$ 1,200.0

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Acquisitions and Divestitures - Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Jul. 01, 2016	Apr. 01, 2016	Nov. 30, 2015
Business Acquisition [Line Items]
Intangibles—customer relationships, backlog and other intangibles assets			$ 891
Goodwill	$ 2,332	$ 2,332
Merger With SRA International
Business Acquisition [Line Items]
Cash, accounts receivable and other current assets			302
Property, equipment and other long-term assets			47
Accounts payable and other current liabilities			(193)
Other long-term liabilities			(26)
Deferred tax liabilities			(261)
Total identified net assets acquired			760
Goodwill			1,540
Estimated total purchase consideration and liabilities paid at closing			2,300
Merger With SRA International | Customer relationships, backlog and other intangibles assets
Business Acquisition [Line Items]
Intangibles—customer relationships, backlog and other intangibles assets			$ 891

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Acquisitions and Divestitures - Pro Forma Information (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015	Jun. 30, 2015
Business Acquisition [Line Items]
Revenue	$ 1,254	$ 959
Income (loss) per common share, basic (in dollars per share)	$ 0.40	$ 0.45
Effects of Spin-Off
Business Acquisition [Line Items]
Revenue	$ 0	$ 0
Income (loss) from continuing operations attributable to Parent	0	13
Effects of Merger
Business Acquisition [Line Items]
Revenue	0	(1)
Income (loss) from continuing operations attributable to Parent	3	10
Pro Forma for Spin-Off and Merger
Business Acquisition [Line Items]
Revenue	1,254	1,317
Income (loss) from continuing operations attributable to Parent	$ 68	$ 87
Income (loss) per common share, basic (in dollars per share)	$ 0.42	$ 0.53
Historical Computer Sciences Corporation GS | Actual
Business Acquisition [Line Items]
Revenue		$ 959
Income (loss) from continuing operations attributable to Parent		$ 63
Income (loss) per common share, basic (in dollars per share)		$ 0.45
CSRA | Actual
Business Acquisition [Line Items]
Revenue	$ 1,254
Income (loss) from continuing operations attributable to Parent	$ 65
Income (loss) per common share, basic (in dollars per share)	$ 0.40
SRA | Actual
Business Acquisition [Line Items]
Revenue			$ 359
Income (loss) from continuing operations attributable to Parent			$ 1
Non-recurring merger related costs | Effects of Spin-Off
Business Acquisition [Line Items]
Income (loss) from continuing operations attributable to Parent	$ 3

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Earnings Per Share (Details) - shares	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015	Apr. 01, 2016	Nov. 27, 2015
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Common stock - shares outstanding (in shares)	163,489,212		162,925,821	139,128,158
Common shares outstanding for basic EPS (in shares)	163,275,412	139,128,158
Weighted average number of common shares outstanding - diluted (in shares)	164,938,594	139,128,158
Dilutive effect of stock options and equity awards (in shares)	1,663,182	0
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares excluded from diluted earnings per share (in shares)	2,194,894

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Sale of Receivables (Details)	3 Months Ended
	Jul. 01, 2016 USD ($)
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Cash collected from sale of receivables but not remitted	$ 13,200,000
Net proceeds from sale of receivables	115,600,000
Other (Income) Expense, Net
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Purchase discount and administrative fees	(600,000)
The Bank of Tokyo-Mitsubishi UFJ, Ltd, The Bank of Nova Scotia, and Mizuho Bank, Ltd.
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Cash remitted for collections	$ 579,400,000
The Bank of Tokyo-Mitsubishi UFJ, Ltd, The Bank of Nova Scotia, and Mizuho Bank, Ltd.
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Term of receivables purchase facility commitment (years)	2 years
Receivables purchase facility commitment amount	$ 450,000,000
Billed revenues
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Proceeds from sold receivables	468,300,000
Unbilled revenues
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Proceeds from sold receivables	$ 227,300,000

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Derivative Instruments (Details) $ in Millions	3 Months Ended
	Jul. 01, 2016 USD ($) counterparty	Apr. 01, 2016 USD ($)
Derivative [Line Items]
Interest rate expense reclassified from AOCI into earnings	$ 2.9
Interest rate expense expected to be reclassified from AOCI into earnings in the next twelve months	6.6
Cost of services and Selling, general, and administrative expenses | Total return swap
Derivative [Line Items]
Loss attributable to total return swaps in earnings	0.1
Derivatives Designated for Hedge Accounting | Interest rate swap
Derivative [Line Items]
Notional value	1,400.0	$ 1,400.0
Derivative liability	$ 21.9	$ 11.1
Derivatives Not Designated for Hedge Accounting | Interest rate swap
Derivative [Line Items]
Concentrations of risk, number of counterparties | counterparty	1

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Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Millions	Jul. 01, 2016	Apr. 01, 2016	Nov. 30, 2015
Goodwill [Line Items]
Goodwill	$ 2,332	$ 2,332
Merger With SRA International
Goodwill [Line Items]
Goodwill			$ 1,540

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Goodwill and Other Intangible Assets - Other Intangible Assets Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015	Nov. 30, 2015
Finite-Lived Intangible Assets [Line Items]
Intangibles acquired - customer relationships, backlog and technology			$ 891.0
Amortization expense of intangible assets	$ 32.6	$ 7.6
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2017 (remainder)	68.6
2018	63.5
2019	72.8
2020	66.5
2021	60.6
Customer-related intangibles
Finite-Lived Intangible Assets [Line Items]
Amortization recognized as a reduction of revenue	2.3	2.3
Purchased software
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	3.6	3.5
Internally developed software for external use
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	0.2	0.3
Internally developed software for internal use
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	0.2	$ 0.1
Software
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2017 (remainder)	5.6
2018	10.3
2019	10.7
2020	7.8
2021	$ 5.7

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Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions	Jul. 01, 2016	Apr. 01, 2016
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,211	$ 1,207
Accumulated Amortization	(328)	(296)
Net Carrying Value	883	911
Customer-related intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	953	954
Accumulated Amortization	(144)	(133)
Net Carrying Value	809	821
Backlog
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	65	65
Accumulated Amortization	(38)	(22)
Net Carrying Value	27	43
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	51	52
Accumulated Amortization	(48)	(46)
Net Carrying Value	3	6
Software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	142	136
Accumulated Amortization	(98)	(95)
Net Carrying Value	44	41
Purchased software
Finite-Lived Intangible Assets [Line Items]
Net Carrying Value	37	40
Internally developed software for external use
Finite-Lived Intangible Assets [Line Items]
Net Carrying Value	1	1
Internally developed software for internal use
Finite-Lived Intangible Assets [Line Items]
Net Carrying Value	$ 6	$ 0

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Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions	Jul. 01, 2016	Apr. 01, 2016
Payables and Accruals [Abstract]
Accrued contract costs	$ 223	$ 248
Deferred revenue	153	140
Accrued expenses	104	132
Other	10	8
Accrued expenses and other current liabilities	$ 490	$ 528

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Debt - Narrative (Details) - USD ($)	3 Months Ended
	Jul. 01, 2016	Apr. 01, 2016
Senior secured term loan facility
Debt Instrument [Line Items]
Excess cash flow payments	$ 48,000,000
Senior secured term loan facility | Tranche A1 Facility Due November 2018
Debt Instrument [Line Items]
Excess cash flow payments	10,400,000
Senior secured term loan facility | Tranche A2 Facility Due November 2020
Debt Instrument [Line Items]
Excess cash flow payments	24,700,000
Senior secured term loan facility | Term Loan B Facility Due November 2022
Debt Instrument [Line Items]
Excess cash flow payments	12,900,000
Revolving credit facility | Line of credit | Revolving Credit Facility Due November 2020
Debt Instrument [Line Items]
Maximum borrowing capacity	700,000,000
Repayments of debt	50,000,000	$ 150,000,000
Interest expense, net | Senior secured term loan facility
Debt Instrument [Line Items]
Amortization of debt discount	2,400,000
Interest expense, net | Revolving credit facility | Line of credit | Revolving Credit Facility Due November 2020
Debt Instrument [Line Items]
Amortization of debt discount	$ 400,000

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Debt - Long-term Debt (Details) - USD ($) $ in Millions	Jul. 01, 2016	Apr. 01, 2016
Debt Instrument [Line Items]
Capitalized lease liability	$ 144	$ 151
Total debt	2,876	2,981
Less: unamortized debt issuance costs	(43)	(46)
Less: current portion of long-term debt and capitalized lease liability	(114)	(170)
Total long-term debt, net of current maturities	2,719	2,765
Revolving Credit Facility Due November 2020 | Revolving credit facility | Line of credit
Debt Instrument [Line Items]
Long-term debt	0	50
Tranche A1 Facility Due November 2018 | Senior secured term loan facility
Debt Instrument [Line Items]
Long-term debt	590	600
Tranche A2 Facility Due November 2020 | Senior secured term loan facility
Debt Instrument [Line Items]
Long-term debt	1,407	1,432
Term Loan B Facility Due November 2022 | Senior secured term loan facility
Debt Instrument [Line Items]
Long-term debt	$ 735	$ 748

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Debt - Maturities of Long-term Debt (Details) $ in Millions	Jul. 01, 2016 USD ($)
Fiscal Year
2017	$ 48
2018	75
2019	670
2020	80
2021	1,149
Thereafter	710
Total	$ 2,732

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Income Tax Examination [Line Items]
Effective tax rate (as a percent)	35.70%	38.80%
Domestic Tax Authority | Internal Revenue Service (IRS)
Income Tax Examination [Line Items]
Income tax examination, estimate of possible loss	$ 136.7

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Pension and Other Post-retirement Benefit Plans - Narrative (Details) $ in Millions	3 Months Ended
	Jul. 01, 2016 USD ($)
Pension Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Contributions by employer	$ 2.1
Estimated future employer contributions for remainder of fiscal year	6.2
Supplemental executive retirement plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Contributions by employer	0.4
Estimated future employer contributions for remainder of fiscal year	$ 1.1

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Pension and Other Post-retirement Benefit Plans - Defined Benefit Pension Plans (Details) - Pension Plan - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015	Apr. 01, 2016
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	$ 3	$ 0
Interest cost	26	1
Expected return on assets	(49)	(1)
Net periodic (benefit) cost	(20)	$ 0
Defined Benefit Plan, Funded Status of Plan [Abstract]
Net benefit obligation	(3,209)		$ (3,222)
Net plan assets	2,594		2,585
Net unfunded status	$ (615)		$ (637)

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Pension and Other Post-retirement Benefit Plans - Other Postretirement Benefit Plans (Details) - Postretirement Health Coverage - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015	Apr. 01, 2016
Defined Benefit Plan, Net Periodic Benefit Cost [Abstract]
Service cost	$ 0	$ 0
Interest cost	1	0
Expected return on assets	(1)	0
Amortization of prior service benefit	(3)	(1)
Net periodic (benefit) cost	(3)	$ (1)
Defined Benefit Plan, Funded Status of Plan [Abstract]
Net benefit obligation	(92)		$ (93)
Net plan assets	75		76
Net unfunded status	$ (17)		$ (17)

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Share-Based Compensation Plans - Narrative (Details) $ / shares in Units, $ in Millions		3 Months Ended
	May 31, 2016 $ / shares shares	Jul. 01, 2016 USD ($) plan $ / shares shares	Jul. 03, 2015 USD ($)	Apr. 01, 2016 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of common shares available for grant at period end (in shares) | shares		7,736,904
Share-based compensation expense		$ 3.0	$ (0.8)
Excess tax benefit from stock compensation		1.0	0.0
Dividends payable		$ 18.0		$ 18.0
Stock options, RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of grants in period (in shares) | shares	1,538,878
Weighted average grant date fair value (in dollars per share) | $ / shares	$ 24.77
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Weighted average grant date fair value (in USD per share) | $ / shares		$ 5.99
Tax benefit realized from stock option exercises		$ 4.0	1.5
Excess tax benefit from stock compensation		1.5
Intrinsic value of options exercised		0.5	1.3
Grant date fair value of options vested		1.0
Cash received from exercises of stock options		1.7	2.0
Unrecognized compensation expense		$ 8.6
Period of recognition for unrecognized compensation expense		2 years 7 months 6 days
RSUs includings PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense		$ 18.5
Period of recognition for unrecognized compensation expense		2 years 5 months 27 days
Dividends payable		$ 1.2
CSRA corporate and non-employee director grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense		$ 1.3
CSC corporate and non-employee director grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense			$ 0.6
CSC
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock incentive plans | plan		2
Affiliated entity | Settlement of equity awards | CSC
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Related party net payable to CSC (from CSC)		$ (4.0)		$ 6.5
Maximum | Stock options, RSUs and PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years

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Share-Based Compensation Plans - Allocation of Recognized Share-Based Compensation Expense (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	$ 3.0	$ (0.8)
Share-based compensation expense, net of tax	1.9	(0.5)
Cost of services
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	0.0	(1.4)
Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
Share-based compensation expense	$ 3.0	$ 0.6

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Share-Based Compensation Plans - Assumptions Used To Determine Fair Value of Stock Option (Details) - Stock options	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Risk-free interest rate	1.39%	1.77%
Expected volatility	30.90%	31.76%
Expected term (in years)	4 years 9 months 18 days	6 years 22 days
Dividend yield	1.61%	1.39%

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Share-Based Compensation Plans - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended	12 Months Ended
	Jul. 01, 2016	Apr. 01, 2016	Jul. 01, 2016
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Vested and expected to vest in the future as of end of period (in shares)			2,320,342
Exercisable as of end of period (in shares)			700,514
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Vested and expected to vest in the future as of end of period (in USD per share)			$ 23.78
Exercisable as of end of period (in USD per share)			$ 22.70
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Weighted average remaining contractual life vested and expected to vest in the future as of period end (in years)	8 years 4 months 23 days
Weighted average remaining contractual life exercisable as of period end (in years)	5 years 5 months 27 days
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Aggregate intrinsic value vested and expected to vest in the future as of end of period			$ 4.0
Aggregate intrinsic value exercisable as of end of period			$ 1.9
Stock options
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding beginning of period (in shares)	1,502,547
Granted (in shares)	997,515
Exercised (in shares)	(99,681)
Canceled/Forfeited (in shares)	(31,960)
Expired (in shares)	(48,079)
Outstanding end of period (in shares)	1,502,547	1,502,547	2,320,342
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Weighted average exercise price - beginning of period (in USD per share)	$ 23.06
Weighted average exercise price - granted (in USD per share)	24.77
Weighted average exercise price - exercised (in USD per share)	20.11
Weighted average exercise price - canceled/forfeited (in USD per share)	28.09
Weighted average exercise price - expired (in USD per share)	26.37
Weighted average exercise price - end of period (in USD per share)	$ 23.78	$ 23.06
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested and Expected to Vest [Abstract]
Weighted average remaining contractual life (in years)	8 years 4 months 23 days	7 years
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Aggregate intrinsic value		$ 7.6	$ 4.0

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Share-Based Compensation Plans - Restricted Stock Units (Details) - RSUs includings PSUs	3 Months Ended
	Jul. 01, 2016 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Equity instruments other than options nonvested - beginning balance (in shares) | shares	376,557
Equity instruments other than options nonvested - granted (in shares) | shares	543,835
Equity instruments other than options nonvested - vested (in shares) | shares	(94,362)
Equity instruments other than options nonvested - canceled/forfeited (in shares) | shares	(12,226)
Equity instruments other than options nonvested - ending balance (in shares) | shares	813,804
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Equity instruments other than options nonvested - beginning balance (in USD per share) | $ / shares	$ 29.39
Equity instruments other than options nonvested - granted (in USD per share) | $ / shares	25.67
Equity instruments other than options nonvested - vested (in USD per share) | $ / shares	26.00
Equity instruments other than options nonvested - canceled/forfeited (in USD per share) | $ / shares	31.90
Equity instruments other than options nonvested - ending balance (in USD per share) | $ / shares	$ 27.26

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Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) - Stockholder's Equity (Details) - USD ($)					3 Months Ended
	Aug. 10, 2016	Jul. 11, 2016	May 25, 2016	Apr. 29, 2016	Jul. 01, 2016	Apr. 01, 2016	Jul. 03, 2015	Nov. 30, 2015
Equity, Class of Treasury Stock [Line Items]
Cash dividend per common share (in dollars per share)			$ 0.10		$ 0.1	$ 0.10	$ 0
Common stock with dividend payout (in shares)				162,952,919
Dividends paid				$ 16,300,000
Stock repurchase program, authorized amount					$ 350,000,000			$ 400,000,000
Shares repurchases during the period (in shares)					0
Subsequent event
Equity, Class of Treasury Stock [Line Items]
Cash dividend per common share (in dollars per share)	$ 0.10
Common stock with dividend payout (in shares)		163,427,525
Dividends paid		$ 16,300,000

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Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) - Other Comprehensive Income (Loss) Activity (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Before Tax Amount
Total OCI, Before Tax Amount	$ (13)	$ (1)
Tax Impact Increase (Decrease)
Total OCI, Tax Impact Increase (Decrease)	5	0
Net of Tax Amount
Other comprehensive income (loss), net of taxes	(8)	(1)
Foreign currency translation adjustments
Before Tax Amount
Component of OCI, Before Tax Amount	0	0
Tax Impact Increase (Decrease)
Component of OCI, Tax Impact Increase (Decrease)	0	0
Net of Tax Amount
Component of OCI, Net of Tax Amount	0	0
Reclassification Adjustments, Net of Tax Amount	0	0
Unrealized loss on interest rate swap
Before Tax Amount
Component of OCI, Before Tax Amount	(10)
Tax Impact Increase (Decrease)
Component of OCI, Tax Impact Increase (Decrease)	4
Net of Tax Amount
Component of OCI, Net of Tax Amount	(6)
Reclassification Adjustments, Net of Tax Amount	0
Amortization of prior service credit
Before Tax Amount
Reclassification Adjustment, Before Tax Amount	(3)	(1)
Tax Impact Increase (Decrease)
Reclassification Adjustments, Tax Impact Increase (Decrease)	1	0
Net of Tax Amount
Reclassification Adjustments, Net of Tax Amount	$ (2)	$ (1)

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Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) - Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	$ 90
Accumulated other comprehensive (loss) income, ending balance	150
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	0	$ (2)
Other comprehensive income (loss), net of taxes	0	0
Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests	0	0
Accumulated other comprehensive (loss) income, ending balance	0	(2)
Cash Flow Hedge
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	(7)
Other comprehensive income (loss), net of taxes	(6)
Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests	0
Accumulated other comprehensive (loss) income, ending balance	(13)
Pension and Other Post-retirement Benefit Plans
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	28	2
Other comprehensive income (loss), net of taxes	0	0
Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests	(2)	(1)
Accumulated other comprehensive (loss) income, ending balance	26	1
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance	21	0
Other comprehensive income (loss), net of taxes	(6)	0
Amounts reclassified from accumulated other comprehensive income (loss), net of taxes and noncontrolling interests	(2)	(1)
Accumulated other comprehensive (loss) income, ending balance	$ 13	$ (1)

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Segment Information (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015	Apr. 01, 2016	Apr. 03, 2015
Segment Reporting Information [Line Items]
Total assets	$ 4,784.0	$ 1,939.0	$ 4,846.0
Revenues	1,254.0	959.0
Segment operating income	159.0	125.0
Depreciation and amortization expense	65.0	33.0
Cash	133.0	7.0	130.0	$ 5.0
Property, plant and equipment	514.0		$ 530.0
Operating Segments
Segment Reporting Information [Line Items]
Total assets	4,552.0	1,939.0
Revenues	1,254.0	959.0
Segment operating income	159.0	125.0
Depreciation and amortization expense	65.0	33.0
Operating Segments | Defense and Intelligence
Segment Reporting Information [Line Items]
Total assets	1,784.0	1,187.0
Revenues	568.0	507.0
Segment operating income	54.0	64.0
Depreciation and amortization expense	34.0	22.0
Operating Segments | Civil
Segment Reporting Information [Line Items]
Total assets	2,768.0	752.0
Revenues	686.0	452.0
Segment operating income	105.0	61.0
Depreciation and amortization expense	31.0	11.0
Corporate
Segment Reporting Information [Line Items]
Total assets	232.0	0.0
Revenues	0.0	0.0
Segment operating income	0.0	0.0
Depreciation and amortization expense	0.0	$ 0.0
Cash	131.9
Accounts receivable	18.4
Property, plant and equipment	$ 81.3

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Segment Information - Reconciliation of Combined Operating Income to Income Before Taxes (Details) - USD ($) $ in Millions	3 Months Ended
	Jul. 01, 2016	Jul. 03, 2015
Segment Reporting [Abstract]
Segment operating income	$ 159	$ 125
Corporate G&A	(17)	(15)
Separation and merger costs	(5)	(15)
Interest expense, net	(30)	(5)
Other (expense) income, net	(1)	19
Income before income taxes	$ 106	$ 109

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Commitments and Contingencies - Commitments (Details) $ in Millions	Jul. 01, 2016 USD ($)
Loss Contingencies [Line Items]
Fiscal 2017	$ 32
Fiscal 2018	25
Fiscal 2019 and Thereafter	0
Total guarantees outstanding	57
Stand-by letters of credit
Loss Contingencies [Line Items]
Fiscal 2017	32
Fiscal 2018	12
Fiscal 2019 and Thereafter	0
Total guarantees outstanding	44
Surety bonds
Loss Contingencies [Line Items]
Fiscal 2017	0
Fiscal 2018	13
Fiscal 2019 and Thereafter	0
Total guarantees outstanding	$ 13

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Commitments and Contingencies - Contingencies (Details) $ in Millions						1 Months Ended			3 Months Ended
	Jul. 14, 2016 USD ($)	Dec. 14, 2015 USD ($)	Jun. 09, 2015 plaintiff	Aug. 22, 2014	Jul. 12, 2013 USD ($)	Oct. 31, 2014 USD ($)	Apr. 30, 2013 plaintiff	Feb. 28, 2013 plaintiff	Jul. 01, 2016 USD ($) plaintiff	May 02, 2016 contract employee
Maryland Medicaid Enterprise Restructuring Project
Loss Contingencies [Line Items]
Loss contingency, damages sought		$ 83.0
Strauch and Colby v. Computer Sciences Corporation | Pending Litigation
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff			1,285
Number of system administrators employed by CSRA | plaintiff			407
Southwest Asia Employment Contract Litigation
Loss Contingencies [Line Items]
Number of former employees | employee										6
Number of contracts entered into upon employment | contract										2
Rishell v. Computer Sciences Corporation | Pending Litigation
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff								1
Rhodes v. Computer Sciences Corporation | Pending Litigation
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff							5
Litigation Cases Similar To Southwest Asia Employment Contract Litigation [Member] | Pending Litigation
Loss Contingencies [Line Items]
Number of plaintiffs | plaintiff									85
CSC | Maryland Medicaid Enterprise Restructuring Project | Pending Litigation
Loss Contingencies [Line Items]
Loss contingency, damages sought						$ 80.0
Contract performance suspension period				90 days
CSC | U.S. Army Communications-Electronics Command v. Computer Sciences Corp | Pending Litigation
Loss Contingencies [Line Items]
Loss contingency, damages sought					$ 235.2
Potential adjustments on government contracts
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss									$ 12.7
Withdrawal from pension plan
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss									26.0
Minimum | Southwest Asia Employment Contract Litigation
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss									0.0
Maximum | Southwest Asia Employment Contract Litigation
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss									$ 14.0
Subsequent event | Maryland Medicaid Enterprise Restructuring Project - State Claim
Loss Contingencies [Line Items]
Loss contingency, damages sought	$ 30.0

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Subsequent Events (Details) - $ / shares			3 Months Ended
	Aug. 10, 2016	May 25, 2016	Jul. 01, 2016	Apr. 01, 2016	Jul. 03, 2015
Subsequent Event [Line Items]
Cash dividend per common share (in dollars per share)		$ 0.10	$ 0.1	$ 0.10	$ 0
Subsequent event
Subsequent Event [Line Items]
Cash dividend per common share (in dollars per share)	$ 0.10