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 December 29, 2017

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 x	Accelerated filer o	Non-accelerated filer o	Smaller reporting company o
Emerging growth Company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

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

163,923,601 shares of Common Stock, $0.001 par value, were outstanding on February 2, 2018.

CSRA INC.

TABLE OF CONTENTS
		PAGE
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)	1
	Consolidated and Condensed Balance Sheets as of March 31, 2017 and December 29, 2017	1
	Consolidated and Condensed Statements of Operations for the Three and Nine Months Ended December 29, 2017 and December 30, 2016	2
	Consolidated and Condensed Statements of Comprehensive Income for the Three and Nine Months Ended December 29, 2017 and December 30, 2016	3
	Consolidated and Condensed Statements of Cash Flows for the Nine Months Ended December 29, 2017 and December 30, 2016	4
	Notes to Consolidated and Condensed Financial Statements	5
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41
Item 4.	Controls and Procedures	42
PART II.	OTHER INFORMATION	43
Item 1.	Legal Proceedings	43
Item 1A.	Risk Factors	43
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	43
Item 3.	Default Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

     CSRA INC.
CONSOLIDATED AND CONDENSED BALANCE SHEETS (unaudited)

	As of
(Dollars in millions, shares in thousands)	December 29, 2017		March 31, 2017
Current assets
Cash and cash equivalents	$	80	$	126
Receivables, net of allowance for doubtful accounts of $26 and $24, respectively	945		748
Prepaid expenses and other current assets	119		126
Total current assets	1,144		1,000
Intangible and other assets
Goodwill	2,522		2,335
Customer-related and other intangible assets, net of accumulated amortization of $284 and $244, respectively	854		775
Software, net of accumulated amortization of $103 and $89, respectively	72		81
Other assets	86		87
Total intangible and other assets	3,534		3,278
Property and equipment, net of accumulated depreciation of $669 and $694, respectively	622		610
Total assets	$	5,300	$	4,888
Current liabilities
Accounts payable	$	120	$	187
Accrued payroll and related costs	212		181
Accrued expenses and other current liabilities	611		487
Current capital lease liability	50		44
Current maturities of long-term debt	86		72
Dividends payable	17		21
Total current liabilities	1,096		992
Long-term debt, net of current maturities	2,651		2,511
Noncurrent capital lease liability	210		172
Deferred income tax liabilities	170		272
Other long-term liabilities	522		582
Commitments and contingent liabilities (Note 13)
Equity
Stockholders’ Equity:
Common stock, $0.001 par value, 750,000 shares authorized, 164,350 and 163,570 shares issued, and 163,827 and 163,216 shares outstanding, respectively	—		—
Additional paid-in capital	141		134
Accumulated earnings	456		165
Accumulated other comprehensive income	28		31
Total stockholders’ equity	625		330
Noncontrolling interests	26		29
Total equity	651		359
Total liabilities and equity	$	5,300	$	4,888

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

1

CSRA INC.

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (unaudited)

	Three Months Ended						Nine Months Ended
(Dollars in millions, except per share amounts)	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Total revenue	$	1,309		$	1,222		$	3,810		$	3,739
Cost of services	1,063			1,000			3,064			3,023
Selling, general and administrative expenses	56			52			156			163
Acquisition, integration, and other costs	3			5			17			18
Depreciation and amortization	59			61			175			189
Operating expenses	1,181			1,118			3,412			3,393
Operating income	128			104			398			346
Net benefit of defined benefit plans	20			137			61			186
Interest expense, net	(29		)	(36		)	(88		)	(95		)
Other expense, net	(2		)	(1		)	(5		)	(3		)
Income before income taxes	117			204			366			434
Income tax (benefit) expense	(75		)	76			16			158
Net income	192			128			350			276
Less: noncontrolling interests	4			2			9			9
Net income attributable to CSRA common stockholders	$	188		$	126		$	341		$	267
Earnings per common share:
Basic	$	1.15		$	0.77		$	2.08		$	1.63
Diluted	$	1.14		$	0.76		$	2.07		$	1.62
Common share information (weighted averages, in thousands):
Common shares outstanding— basic	163,780			163,325			163,570			163,413
Dilutive effect of stock options and equity awards	1,364			1,563			1,490			1,388
Common shares outstanding— diluted	165,144			164,888			165,060			164,801
Cash dividend per common share	$	0.10		$	0.10		$	0.30		$	0.30

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

2

CSRA INC.

CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (unaudited)

	Three Months Ended						Nine Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Net income	$	192		$	128		$	350		$	276
Other comprehensive income (loss), net of taxes, related to:
Amortization of prior service cost	(3		)	(2		)	(6		)	(6		)
Foreign currency translation adjustments	—			1			—			1
Unrealized gain on derivatives	5			18			3			15
Other comprehensive income (loss), net of taxes	2			17			(3		)	10
Comprehensive income	194			145			347			286
Less: comprehensive income attributable to noncontrolling interest, net of taxes	4			2			9			9
Comprehensive income attributable to CSRA common stockholders	$	190		$	143		$	338		$	277

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

3

CSRA INC.

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (unaudited)

(Dollars in millions)	Nine Months Ended
	December 29, 2017			December 30, 2016
Cash flows from operating activities:
Net income	$	350		$	276
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	175			191
Pension settlement and actuarial gains	—			(114		)
Stock based compensation	11			25
Excess tax benefit from stock based compensation	(2		)	(3		)
Deferred income taxes	(102		)	—
Net loss on dispositions of business and assets	10			2
Other non-cash items, net	14			1
Changes in assets and liabilities, net of acquisitions and dispositions:
(Increase) decrease in assets	(91		)	26
Decrease in defined benefit plan liability	(59		)	(68		)
Increase in other liabilities	7			98
Other operating activities, net	3			4
Cash provided by operating activities	316			438
Cash flows used in investing activities:
Purchases of property and equipment	(94		)	(98		)
Software purchased and developed	(11		)	(16		)
Payments for acquisitions, net of cash acquired	(335		)	—
Proceeds from disposals of assets	36			9
Other investing activities, net	23			(13		)
Cash used in investing activities	(381		)	(118		)
Cash flows provided by (used in) financing activities:
Borrowing on Revolving Credit Facility	220			—
Repayments of Revolving Credit Facility	(220		)	(50		)
Borrowings of long term debt	384			234
Payments of long-term debt	(233		)	(379		)
Debt issuance cost	(4		)	(4		)
Proceeds from stock options and other common stock activity, net	3			2
Repurchase of common stock	(16		)	(29		)
Dividends paid	(50		)	(51		)
Payments on lease liability	(30		)	(32		)
Payments to noncontrolling interest	(12		)	(8		)
Other financing activities, net	(23		)	29
Cash provided by (used in) financing activities	19			(288		)
Net (decrease) increase in cash and cash equivalents	(46		)	32
Cash and cash equivalents at beginning of period	126			130
Cash and cash equivalents at end of period	$	80		$	162
Supplemental cash flow information:
Cash paid for taxes	$	99		$	61
Cash paid for interest	81			79
Capital expenditures in accounts payable and other liabilities	18			10
Capital expenditures through capital lease obligations	79			85
Non-cash transactions related to financing activities	—			32
Deferred tax liability	103			55

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”), a provider of IT and professional services, delivers IT, mission, and operations-related services across the U.S. government, including to the Department of Defense (“DoD”), Department of Homeland Security (“DHS”), the intelligence community, civil and healthcare agencies, and to state and local government agencies through two business segments: (1) Defense and Intelligence, and (2) Civil.

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 (“SEC”), and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2017. The interim period unaudited Consolidated and Condensed Financial Statements are presented as described below.

In May 2017, CSRA executed an agreement for the acquisition of NES Associates, LLC (“NES”), a consulting firm that provides IT services to the U.S. government. On July 3, 2017, CSRA completed its acquisition of NES, which resulted in NES becoming a wholly owned subsidiary of CSRA. In October 2017, CSRA announced that it had executed an agreement to acquire Praxis Engineering Technologies LLC (”Praxis”), a consulting and solutions firm dedicated to the practical application of software and systems engineering technologies. On November 17, 2017, CSRA completed the acquisition of Praxis, which resulted in Praxis becoming a wholly owned subsidiary of CSRA. See Note 4—Acquisitions for additional information.

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.

CSRA reports its results based on a fiscal year convention comprised of 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.

Contract accounting requires significant judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Due to the size and nature of many of CSRA’s contracts, developing total revenue and costs at completion estimates requires significant judgment. Contract costs include direct labor and billable expenses, allocation of allowable indirect costs, and warranty obligations. CSRA recognizes revenue and billable expenses from these transactions on a gross basis because it is the primary obligor on contracts with customers. The contracts that required estimates-at-completion (“EACs”) using the percentage-of-completion method were approximately 36%, and 38% of CSRA’s revenue for the nine months ended December 29, 2017, and December 30, 2016, respectively.

CSRA’s income before income taxes and noncontrolling interest for the three and nine months ended December 29, 2017 and December 30, 2016 included the following gross favorable and unfavorable adjustments due to changes in estimated profitability on fixed price contracts accounted for under the percentage-of-completion method.

5

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

	Three Months Ended						Nine Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Gross favorable	$	21		$	13		$	52		$	40
Gross unfavorable	(5		)	(8		)	(16		)	(24		)
Total net adjustments, before taxes and noncontrolling interests	$	16		$	5		$	36		$	16

Unbilled recoverable amounts under contracts in progress do not have an allowance for credit losses and, therefore, any adjustments to these amounts related to credit quality are accounted for as a reduction of revenue. Unbilled 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 $17.3 million and $15.6 million as of December 29, 2017 and March 31, 2017, respectively.

Depreciation expense was $38.0 million and $33.5 million for the three months ended December 29, 2017 and December 30, 2016, respectively. Depreciation expense was $111.1 million and $96.8 million for the nine months ended December 29, 2017 and December 30, 2016, respectively.

Earnings Per Share

The computation of diluted earnings per share excludes stock options, whose effect, if included, would be anti-dilutive. The number of shares related to such stock awards was 274,785 and 283,643 for the three and nine months ended December 29, 2017, respectively.

Use of Estimates

GAAP requires management to make estimates and assumptions that affect certain amounts reported in the unaudited Consolidated and Condensed Financial Statements and accompanying notes. These estimates are based on management’s best knowledge of historical experience, current events, and other assumptions that management considers reasonable. Actual results could differ from those estimates.

Amounts subject to significant judgment and/or estimates include, but are not limited to: determining the fair values of assets acquired and liabilities assumed, derivative instruments and non-financial assets such as internally developed software for internal use; costs to complete fixed-price contracts, certain deferred costs, collectability of receivables, deferred tax assets and liabilities, reserves for tax benefits, including valuation allowances on deferred tax assets, loss accruals for litigation, and inputs used for computing share-based compensation.

Reclassifications

Historically, the Company recognized separation and merger costs in connection with our separation from Computer Sciences Corporation (now known as DXC Technology) (“CSC”) and our subsequent merger with SRA International Inc. (“SRA”) as a separate operating expense. In the second quarter of fiscal year 2018, CSRA began to combine these costs with separately identifiable acquisition costs and fees paid to third parties for completed acquisitions as well as integration, transition, and other costs for integrating the businesses. These expenses are presented as acquisition, integration, and other costs on the unaudited Consolidated and Condensed Statements of Operations. Prior periods have been revised to conform to the current period presentation.

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 hierarchy that prioritizes inputs 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 techniques where one or more significant inputs are unobservable.

Assets and liabilities valued using the fair value measurement guidance on a recurring basis include: pension assets and derivative instruments (consisting of interest rate swap contracts, total return swaps, and foreign currency forward exchange contracts). Pension assets are valued using model based pricing methods that use observable market data and are, therefore, 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.

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

The Company’s financial instruments include cash, trade receivables, vendor payables, derivative financial instruments, and debt. As of December 29, 2017, 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 $2.7 billion and $2.5 billion at December 29, 2017 and March 31, 2017, respectively, and approximated its fair value on those dates based on recent trading activity, which is classified as Level 2 inputs. The fair value of interest rate swaps is estimated based on valuation models that use observable interest rate yield curves, which are considered Level 2 inputs. There were no transfers between levels of the fair value hierarchy during the three and nine months ended December 29, 2017 or December 30, 2016.

Recent Accounting Pronouncements

Newly-Adopted Accounting Standards

On December 22, 2017, the Tax Cuts and Jobs Acts (the “Tax Act”) was enacted into law. The Tax Act includes numerous significant changes to the U.S. Corporate tax laws such as: the reduction of the statutory tax rate from 35% to 21%; repeal of the corporate alternative minimum tax; changes to business tax exclusions, deductions and credits; and significant revision of international tax provisions. Shortly thereafter, the Securities and Exchange Commission issued guidance for accounting for taxes in Staff Accounting Bulletin No. 118 (“SAB 118”) to provide guidance on the application of accounting for income taxes (under ASC 740) in cases where the calculation of certain effects of the changes in tax laws or tax rates are incomplete upon issuance of an entity's financial statements for the reporting period in which the Tax Act is enacted. Under SAB 118, in the financial reporting period during which the Tax Act is enacted, the income tax effects of the Tax Act (for those changes where calculations are incomplete) would be reported as provisional based on a reasonable estimate, and are to be subject to adjustment during a "measurement period" until the accounting under guidance in ASC 740 is complete. When provisional amounts are used, supplemental disclosures should be provided, such as the reasons for the incomplete accounting and other information relevant to why the Company was not able to complete the accounting in a timely manner. CSRA has used the guidance in SAB 118 when determining the impact of the Tax Act on the Company’s consolidated financial statements. See Note 8—Income Taxes for further information.

In March 2017, the FASB issued ASU No. 2017-07-Compensation- Retirement Benefits (Topic 715) (“ASU 2017-07”), which changes the presentation of net periodic pension and post-retirement costs. The guidance requires that service costs associated with pension and post-retirement plans be presented in the same financial statement line item as the compensation cost for the related employees. All other net benefit costs must be reported separately from income from operations (if presented). The standard is effective for the first interim period within annual periods

7

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

beginning after December 15, 2017, with early adoption permitted. Since CSRA’s defined benefit pension and post-retirement plans (the “Plans”) are frozen, historical service costs consist of administrative expenses. CSRA chose to early adopt this standard during the first quarter of the fiscal year ending March 30, 2018. As a result, net benefit costs of the Plans have been presented as a separate line item on the Company’s statements of operations. The prior periods have been revised to conform to the current period presentation.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). Its main provisions are: (a) removing step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation; and (b) eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. ASU 2017-04 is effective for all public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted on or after January 1, 2017. The Company adopted ASU 2017-04 on July 1, 2017, which coincided with its annual assessment for the impairment of goodwill. The adoption had no impact on CSRA’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 ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements and some cost guidance included in the Accounting Standards Codification (ASC). Upon adoption, ASU 2014-09 will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements.

The new standard requires us to identify contractual performance obligations and determine when revenue should be recognized. This requirement and other provisions of the standard could change the method or timing of revenue recognition for our firm-fixed-price and, to a lesser extent, cost-reimbursable-plus-fee contract portfolio. The Company’s implementation project team is taking an integrated approach to analyzing the standard’s impact on our contract portfolio including a review of accounting policies and practices, evaluating the effects of the requirements on our contracts and business practices, and assessing the need for system and internal control changes or enhancements. These activities and the Company’s evaluation of the quantitative effect of adoption will continue to the end of the fiscal year.

The Company identified likely effects related to the treatment of option years as discrete contracts and the grouping of promised goods and services into performance obligations for the purpose of recognizing revenue under the new standard. As a result, gross favorable and unfavorable adjustments due to changes in contract estimates are anticipated to result in smaller revenue adjustments than before adoption of the ASU. Anticipated losses on contracts will continue to be recognized in the period in which they are identified.

In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, resulting in a one-year deferral of the effective date of ASU 2014-09. The new standard may be adopted either retrospectively or on a modified retrospective basis whereby it 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 the beginning balance of retained earnings at the effective date. The Company plans to adopt the standard on March 31, 2018 (the first day of fiscal year 2019), and to implement the standard using the modified retrospective method, whereby the cumulative effect will be recognized at the date of adoption.

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 also requires expanded qualitative and quantitative disclosures to provide financial statement users with additional information on the amount, timing, and uncertainty of cash flows arising from CSRA leases. The standard must be adopted using the modified retrospective approach, and 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 its policies, procedures, business practices, including internal controls, and financial statements.

8

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230)(“ASU 2016-18”). This guidance requires the inclusion of restricted cash and restricted cash-equivalent balances in the statement of cash flows. The ASU does not define "restricted cash" and "restricted cash equivalents." The Company will be required to include its restricted cash balance (currently classified within Prepaid expenses and other current assets) in the Cash and cash equivalents balance presented in the statement of cash flows using a retrospective transition method for each period presented. A reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. An entity with a material balance of amounts generally described as restricted cash and restricted cash equivalents must also discuss the nature of the restrictions. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption, including during an interim period, is permitted. The Company has not yet determined an implementation date for this ASU.

In August 2017, the FASB issued ASU No. 2017-12, Derivativesand Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which is intended to improve the transparency and understandability of information conveyed to financial statements users about an entity’s risk management activities and reduce the complexity and simplify the application of hedge accounting by companies. The impact of adopting this standard on CSRA’s financial position and results of operations is not expected to be material, but the Company will continue to evaluate until implementation. The standard is effective for fiscal years beginning after December 15, 2018 and interim period within those fiscal years for public entities.

Other recently issued ASUs effective after December 29, 2017 are not expected to have a material effect on CSRA’s financial statements.

Note 2—Sale of Receivables

CSRA is the seller of certain accounts receivable under a Master Accounts Receivable Purchase Agreement (the “Purchase Agreement”) with The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia, and Mizuho Bank, Ltd., each as Purchaser, for the continuous non-recourse sale of CSRA’s eligible trade receivables. On August 8, 2017, the term of the Purchase Agreement under which the Company sells certain of its accounts receivable was extended for one year, to August 7, 2018.

Under the Purchase Agreement, CSRA sells eligible receivables, including billed receivables and certain unbilled receivables arising from cost plus fixed fee (“CPFF”) and time and materials (“T&M”) contracts, up to $450.0 million outstanding at any time. CSRA has no retained interests in the sold receivables and only performs collection and administrative functions for the Purchaser for a servicing fee.

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 related liability was recognized at either December 29, 2017 or March 31, 2017.

9

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

We have amended the Purchase Agreement periodically to broaden the eligibility of receivables for sale under it. In the period when the receivables become eligible for sale, the proceeds from such sales will increase operating cash flow. The table below provides receivable sales activity, including initial sales of newly eligible receivables during the periods presented.

	Three Months Ended				Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		December 29, 2017		December 30, 2016
Sales of billed receivables	$	470	$	545	$	1,322	$	1,482
Sales of unbilled receivables	329		294		940		850
Total sales of receivables	$	799	$	839	$	2,262	$	2,332
Collections of sold receivables	$	680	$	790	$	2,127	$	2,192
Operating cash flow effect, net of collections and fees from sales	118		47		130		137

As of December 29, 2017 and March 31, 2017, there was $13.9 million and $37.0 million, respectively, of cash collected by CSRA, but not remitted to purchasers, which represents restricted cash and is included within Prepaid expenses and other current assets on our unaudited Consolidated and Condensed Balance Sheets. CSRA incurred purchase discount and administrative fees of $4.5 million and $2.7 million for the nine months ended December 29, 2017 and December 30, 2016, respectively. These fees were recorded within Other expense, net in the unaudited Consolidated and Condensed Statements of Operations.

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 the U.S. government 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.

Note 3—Derivative Instruments

Derivatives Designated for Hedge Accounting

Interest-rate swaps

The Company uses derivative financial instruments to manage interest rate risk related to its Term Loan A Facilities (as defined in Note 7—Debt, below). 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 on Term Loan Facilities (as defined in Note 7—Debt, below) that have variable index-based interest rates. To accomplish these objectives, the Company uses pay-fixed interest rate swaps as part of its interest rate risk management strategy. As of both December 29, 2017 and March 31, 2017, the Company had outstanding pay-fixed interest rate derivatives with a notional value of $1.4 billion, which were designated as a cash flow hedge of interest rate risk. The swap positions consist of a $1.1 billion notional swap agreement maturing in November 2020 and $300 million in aggregate notional swap agreements maturing in March 2018.

10

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Foreign Currency Forward Exchange Contracts

The Company transacts business in various foreign currencies, which subjects its cash flows and earnings to exposure related to changes in foreign currency exchange rates. The exposure arises primarily from purchases from or sales to third parties. Foreign currency forward exchange contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates, and are used to offset changes in the fair value of forecasted cash flows related to transactions denominated in foreign currencies. During fiscal year 2018, the Company began hedging certain of these forecasted cash flows. As of December 29, 2017, the Company had outstanding foreign currency forward exchange contracts with notional amounts totaling $11.2 million. Neither the fair value of these derivatives at December 29, 2017 nor the gain or loss reclassified into earnings from AOCI during the nine months ended December 29, 2017 was significant. We do not expect amounts that will be reclassified into earnings within the next twelve months to be significant. The notional values consist primarily of contracts for the Mexican peso, Columbian peso, and Canadian dollar, and are stated in U.S. dollar equivalents.

Fair Value of Derivative Instruments

The fair values of derivative instruments are presented on a gross basis as none of the Company’s derivative contracts are subject to master netting arrangements. The fair value of the Company’s derivative financial instruments was an asset of $22.2 million and $18.2 million as of December 29, 2017 and March 31, 2017, 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. For net asset positions, the current portion is included in Prepaid expenses and other current assets and the long-term portion is included in Other assets in the unaudited Consolidated and Condensed Balance Sheets. There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during either the nine months ended December 29, 2017 or December 30, 2016. Cash flows associated with derivative contracts are recorded in operating activities in the unaudited Consolidated and Condensed Statements of Cash Flows.

Under applicable agreements relating to the Company’s interest rate swaps, a counterparty could declare the Company to be in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default.

Concentrations of Risk

The Company is subject to counterparty risk in connection with its 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 seeking to enter into agreements with credit-worthy counterparties. As of both December 29, 2017 and March 31, 2017, there was one interest rate swap counterparty with greater than a 10% concentration of our total exposure.

Note 4—Acquisitions

Fiscal Year 2018 Acquisitions

On July 3, 2017, CSRA acquired NES for a base price of $105.0 million, less $0.9 million of working capital adjustments. The consideration consisted of $100.9 million in cash and $3.2 million deposited in escrow on behalf of the seller. CSRA recorded the assets acquired and liabilities assumed at their estimated fair value, and recorded the difference between the fair value of the net assets acquired and the purchase consideration as goodwill. See Note 5—Goodwill and Other Intangible Assets for further discussion of the measurement considerations for acquired intangible assets.

11

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

The following table presents the estimated fair values of assets acquired and liabilities assumed in our acquisition of NES as of July 3, 2017:

Preliminary allocation (in millions):	Amount
Cash, accounts receivable and other current assets	$	28
Property, equipment and other long-term assets	4
Intangibles—customer relationships, backlog and other intangibles assets	25
Accounts payable and other current liabilities	(15		)
Total identified net assets acquired	42
Goodwill	62
Total purchase consideration and liabilities paid at closing	$	104

The Company provisionally recorded the assets acquired and liabilities assumed of NES at their estimated fair values. As of December 29, 2017, the Company had not finalized the determination of fair values associated with NES’s current assets and liabilities but expects to do so by the first quarter of fiscal year 2019.

On November 17, 2017, CSRA acquired Praxis for $235 million in cash, subject to closing adjustments. Praxis is a consulting and solutions firm dedicated to the practical application of software and systems engineering technologies to the U.S. government.

The following table presents the estimated fair values of assets acquired and liabilities assumed in our acquisition of Praxis as of November 17, 2017:

Preliminary allocation (in millions):	Amount
Cash, accounts receivable and other current assets	$	49
Property, equipment and other long-term assets	2
Intangibles—customer relationships, backlog and other intangibles assets	95
Accounts payable and other current liabilities	(36		)
Total identified net assets acquired	110
Goodwill	125
Total purchase consideration and liabilities paid at closing	$	235

Due to the recency of the Praxis acquisition, the preliminary purchase price allocation was recorded on a provisional basis and is subject to change as the Company completes its analysis of the fair value at the date of the transaction, which could have a material impact.

Goodwill associated with the NES and Praxis acquisitions is tax-deductible. Pro forma financial information for the NES and Praxis acquisitions has not been presented as the revenue and operating income of NES and Praxis included in the Company’s unaudited Consolidated and Condensed Statement of Operations for the period, on a combined basis, was not material the Company’s consolidated results.

Note 5—Goodwill and Other Intangible Assets

In connection with acquisitions of other businesses, CSRA recognized goodwill and other intangible assets, which includes customer relationships, backlog, and contract-related intangibles. In addition, the Company records acquired and developed software technology as an intangible asset.

12

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Goodwill

Goodwill is allocated to each reportable segment based on the relative fair value of net assets acquired. The following table summarizes the changes in the carrying amount of goodwill by segment for the nine months ended December 29, 2017:

(Dollars in millions)	Defense and Intelligence		Civil		Total
Balance as of March 31, 2017	$	815	$	1,520	$	2,335
Acquisition of NES	62		—		62
Acquisition of Praxis	125		—		125
Balance as of December 29, 2017	$	1,002	$	1,520	$	2,522

During the nine months ended December 30, 2016, we made adjustments related to the acquisition of SRA, which resulted in a $2.6 million increase in goodwill, $0.3 million of which related to the Defense and Intelligence segment and $2.3 million to the Civil segment.

Testing for Goodwill Impairment

The Company tests for impairment annually on 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. At the end of each annual and quarterly period, CSRA determines if any such events or changes occurred that require goodwill to be tested for impairment.

On July 1, 2017, the Company performed its annual test of impairment and concluded qualitatively that the fair value of each reporting unit significantly exceeded its carrying value. As of December 29, 2017, CSRA determined there were no indicators that required management to perform an interim goodwill impairment assessment test. There were no accumulated impairment losses at either December 29, 2017 or March 31, 2017.

Other Intangible Assets

Other intangible assets consist primarily of customer relationships, backlog, and technology. Acquired intangible assets have been recorded at their fair value using various discounted cash flow valuation techniques that 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 assumptions about the assumptions market participants would use in pricing an asset on a non-recurring basis.

In connection with the acquisitions of NES and Praxis, the Company identified $24.8 million and $94.5 million, respectively, of intangible assets, representing customer relationships, backlog, and contract intangibles. The fair value measurements of these intangibles were primarily based on significant inputs not observable in the market and represent a Level 3 measurement. The income approach was primarily used to value intangible assets; this approach indicates value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flow is discounted at a rate of return that reflects the time value of money.

13

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

A summary of amortizing intangible assets, including preliminary fair values of those recorded in the NES and Praxis acquisitions, are:

	As of
	December 29, 2017
(Dollars in millions)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Acquisition-related intangibles:
Customer-related intangibles	$	1,064	$	(214	)	$	850
Backlog	67		(66		)	1
Other intangible assets	7		(4		)	3
Subtotal-acquisition-related intangibles:	1,138		(284		)	854
Software	175		(103		)	72
Total intangible assets	$	1,313	$	(387	)	$	926

	As of
	March 31, 2017
(Dollars in millions)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Acquisition-related intangibles:
Customer-related intangibles	$	948	$	(175	)	$	773
Backlog	65		(65		)	—
Other intangible assets	6		(4		)	2
Subtotal-acquisition-related intangibles:	1,019		(244		)	775
Software	170		(89		)	81
Total intangible assets	$	1,189	$	(333	)	$	856

Customer-related intangibles, backlog, and software are amortized to expense. Amortization expense for the three and nine months ended December 29, 2017 was $21.0 million and $63.8 million, respectively, compared to $26.8 million and $91.8 million, respectively, for the three and nine months ended December 30, 2016.

As of December 29, 2017, estimated amortization for the remaining three months of fiscal year 2018 is $24.1 million; and for each of fiscal years 2019, 2020, 2021, and 2022 is $92.7 million, $85.8 million, $77.2 million, and $70.3 million, respectively.

Purchased and internally developed software for external and internal use, net of accumulated amortization, consisted of:

	As of
(Dollars in millions)	December 29, 2017		March 31, 2017
Purchased software	$	67	$	73
Internally developed software	5		8
Total software	$	72	$	81

Amortization expense related to purchased software for the three and nine months ended December 29, 2017 was $5.9 million, and $17.8 million, respectively, compared to the three and nine months ended December 30, 2016 of $3.5 million and $10.4 million, respectively. Amortization expense related to internally developed software for the three and nine months ended December 29, 2017 was $0.0 million, and $5.6 million, respectively, compared to the three and nine months ended December 30, 2016 of $0.5 million and $1.4 million, respectively.

14

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

As of December 29, 2017, estimated amortization related to software for the remaining three months of fiscal year 2018 is $5.5 million; and for each of the fiscal years 2019, 2020, 2021, and 2022 and thereafter is $21.7 million, $19.0 million, $14.0 million, and $12.0 million, respectively.

Note 6—Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of
(Dollars in millions)	December 29, 2017		March 31, 2017
Accrued contract costs	$	318	$	239
Deferred revenue	160		153
Accrued expenses	109		81
Other	24		14
Total	$	611	$	487

Note 7—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 December 29, 2017 and March 31, 2017.

	December 29, 2017				March 31, 2017
(Dollars in millions)	Interest Rate(1)	Outstanding Balance			Interest Rate(1)	Outstanding Balance
Revolving Credit Facility, due November 2022	2.98% - 3.24%	$	—		2.18% - 2.20%	$	—
Tranche A1 Facility, due November 2019	2.61% - 2.98%	389			2.06% - 2.41%	570
Tranche A2 Facility, due November 2022	2.73% - 3.1%	1,528			2.18% - 2.53%	1,580
Term Loan B Facility, due November 2023	3.16% - 3.55%	849			3.28% - 3.75%	466
Capitalized lease liability	2.35% - 13.77%	260			2.35% - 15.09%	216
Total debt		3,026				2,832
Less: unamortized debt issuance costs		(29		)		(33		)
Less: current portion of long-term debt and capitalized lease liability		(136		)		(116		)
Total long-term debt, net of current maturities		$	2,861			$	2,683
(1) Represents the range of the lowest and highest interest rate during the period for each facility. Capitalized lease rates are the lowest and highest rates among all leases outstanding during the period. The December 29, 2017 column represents the range during the nine month period then ended and the March 31, 2017 column represents the range during the fiscal year then ended.

June Credit Agreement Amendments

On June 15, 2017, the Company entered into a Second Amendment to the Credit Agreement (the “Second Amendment”) among the Company, the guarantors party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd, as pro-rata administrative agent, Royal Bank of Canada, as term loan B administrative agent, certain replacement and

15

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

incremental term loan B lenders and the other lenders party thereto. Pursuant to the Second Amendment, the credit facilities were amended to provide for, among other things:

(a) a reduction of 0.5% in the interest rate margin applicable to the Term Loan B Facility (as defined under the Second Amendment of the Credit Agreement), to LIBOR plus 2.00% on Eurocurrency Rate Advances;

(b) an increase of $183.7 million in the unpaid principal balance of the Term Loan B Facility to a total of $650.0 million; and

(c) quarterly repayments of $0.5 million commencing September 30, 2017 through December 31, 2022 and quarterly repayments thereafter of $2.4 million (subject to reduction for any mandatory or voluntary prepayments) until the maturity date of the Term Loan B Facility.

The additional borrowings under the Term Loan B Facility were immediately applied to repay $180.6 million of the unpaid principal balance of the Tranche A1 Facility; to pay accrued and unpaid interest on amounts repaid on the Tranche A1 Facility and on the Term Loan B Facility; and to pay fees and expenses incurred in connection with the transaction. The Company wrote-off $1.7 million of deferred financing fees related to the portion of the loans deemed extinguished, which are recorded in interest expense; and recorded an additional $1.5 million of deferred financing costs related to fees paid in connection with the Second Amendment.

December Credit Agreement Amendments

On December 29, 2017, the Company entered into a Third Amendment to Credit Agreement (the “Third Amendment”) among the Company, the guarantors party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as pro rata administrative agent, Royal Bank of Canada, as term loan B administrative agent, certain incremental term loan B lenders, and the other lenders party thereto. Pursuant to the Third Amendment, the credit facilities were amended to provide for, among other things:

(a) an increase of $200.0 million in the unpaid principal balance of the Term Loan B Facility to a total of $849.0 million;

(b) an extension of each of the respective maturity dates of the Revolving Credit Facility and the Tranche A2 Facility by one year; and

(c) quarterly repayments with respect to the Term Loan B facility of $1 million commencing March 31, 2018 through December 31, 2022 and quarterly repayments thereafter of $3.25 million until the maturity date of the Term Loan B Facility, subject to reductions as a result of the application of voluntary or mandatory prepayments made by the Company.

The additional borrowings under the Term Loan B Facility were immediately applied to repay in full the aggregate principal amount of advances outstanding under the Revolving Credit Facility of $150 million and to pay fees and expenses incurred in connection with the Third Amendment.

During the first quarter of fiscal year 2018, the Company made a mandatory repayment of $10.8 million on its Term Loan Facilities. On June 30, 2017, the Company drew $55.0 million under its Revolving Credit Facility in order to fund in part the settlement of its purchase of NES in July 2017. In September 2017, the Company made a mandatory principal repayment of $20.9 million on the Term Loan Facilities. In November 2017, the Company drew an additional $165 million under its Revolving Credit Facility in order to fund in part the settlement of its purchase of Praxis. In December 2017, the Company made a mandatory principal repayment of $20.9 million on the Term Loan Facilities, and voluntarily paid off $70.0 million of its outstanding Revolving Credit Facility. The repayments noted in this paragraph are separate from, and in addition to, the application of the proceeds of the increased borrowings under the Term Loan B Facility in June and December 2017, as discussed above.

16

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Interest expense consisted of:

	Three Months Ended				Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		December 29, 2017		December 30, 2016
Contractual interest -Revolving and Term Loan Facilities	$	22	$	18	$	62	$	56
Amortization of debt issuance costs	2		2		6		8
Interest on derivatives and other	5		8		18		23
Loss on debt extinguishment	—		8		2		8
Total interest expense	$	29	$	36	$	88	$	95

CSRA’s costs incurred in connection with the issuance of its Term Loan Facilities 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.

Expected maturities of long-term debt, excluding future minimum capital lease payments are as follows:

(Dollars in millions)	Amount
Fiscal year:
Fourth quarter of fiscal year 2018	$	21
2019	85
2020	474
2021	86
2022	86
2023	1,188
Thereafter	826
Total	$	2,766

CSRA’s credit 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 December 29, 2017.

17

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Note 8—Income Taxes

On December 22, 2017, the U.S. government enacted the Tax Act. Among other provisions, this law significantly modifies the existing U.S. tax code for corporations, including a prospective change in the statutory tax rate from 35% to 21%, repeal of the corporate alternative minimum tax, changes to business tax deductions, and significant revision of international tax provisions. The change in the statutory tax rate is effective beginning January 1, 2018. As CSRA operates on a fiscal year calendar, the new rate is effective for the Company’s fourth quarter of fiscal year 2018. However, certain provisions of the new law, including asset depreciation rates for tax purposes, became effective at dates during the three months ended December 29, 2017 and the Company is required to evaluate its deferred tax assets and liabilities as of December 29, 2017 using the new statutory rates (subject to considerations in SAB 118). The Company’s net benefit for income taxes in the three months ended December 29, 2017 included a benefit of $100.7 million associated with: (a) the estimated net effect of these changes on CSRA’s deferred tax liabilities and assets at the end of the period; and to a much lesser extent (b) a change in the Company’s liability for an uncertain tax position. CSRA evaluated its deferred tax assets and liabilities on a provisional basis using management estimates. The impact of the Tax Act may differ from these estimates, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made. Any adjustments recorded to the provisional amounts through the third quarter of fiscal year 2019 will be included in income from operations as an adjustment to tax expense.

Excluding the net benefit associated with the evaluation of deferred tax items, our provision for taxes on current period income in the three months ended December 29, 2017 was recognized using reasonable estimates of income and the statutory rate of the Company for the full fiscal year. As the Company’s fiscal year end is March 30, 2018, the statutory federal corporate tax rate is prorated to 31.6%. The Company’s federal corporate statutory tax rate for fiscal year 2019 and beyond will be 21.0%. CSRA’s effective tax rate (“ETR”) was (64.1)% and 4.4% for the three and nine months ended December 29, 2017, respectively, compared to 37.3% and 36.4% for the three and nine months ended December 30, 2016, respectively.

CSRA is currently under examination in several tax jurisdictions. Tax years 2008 and forward remain subject to examination under both Federal and various state tax jurisdictions. One disputed matter remains unresolved in connection with the Internal Revenue Service’s (“IRS”) examination of SRA’s federal income tax return for 2011. The disputed matter concerns a $136.7 million worthless stock deduction for a disposed subsidiary. CSRA believes its tax positions are appropriate. The Company obtained a tax insurance policy in connection with its merger with SRA that limits CSRA’s exposure related to this dispute. It is reasonably possible that changes to CSRA’s unrecognized tax benefits could be significant; due to the uncertainty regarding the IRS administrative appeals process and possible outcomes, however, we estimate that the increases or decreases in our unrecognized benefits that may occur within the next 12 months will not be material.

Note 9—Pension and Other Post-retirement Benefit Plans

Certain employees of CSRA, its subsidiaries, and its former parent company are participants in employer-sponsored defined benefit and defined contribution plans, including pension and other post-retirement benefit (“OPEB”) plans. The assets and liabilities for the plans and the costs and benefits related to the plans’ participants are reflected in CSRA’s unaudited Consolidated and Condensed Financial Statements.

Defined Benefit Pension Plans

The largest U.S. defined benefit pension plan was frozen in fiscal year 2010 for most participants. All remaining participants have been frozen since 2016.

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

(Dollars in millions)	Three Months Ended						Nine Months Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Service cost (entirely administrative expenses)	$	4		$	3		$	11		$	9
Interest cost	23			25			69			76
Expected return on assets	(43		)	(47		)	(129		)	(145		)
Recognition of actuarial (gains) losses	—			(101		)	—			(101		)
Settlement gain	—			(13		)	—			(13		)
Net periodic pension benefit	$	(16	)	$	(133	)	$	(49	)	$	(174	)

The following table provides the pension plans’ projected benefit obligations, assets, and funding status:

	As of
(Dollars in millions)	December 29, 2017			March 31, 2017
Net benefit obligation	$	(2,739	)	$	(2,787	)
Net plan assets	2,335			2,328
Net unfunded status	$	(404	)	$	(459	)

CSRA contributed $6.2 million to the defined benefit pension plans during the nine months ended December 29, 2017 for the funding of benefit payments made to plan participants. CSRA expects to make $2.1 million of additional contributions during the remaining three months of fiscal year 2018 for the funding of participants’ benefit payments.

18

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Other Post-retirement Benefit Plans

CSRA’s financial statements reflect the service costs related to current employees and certain former employees of CSC and the businesses constituting CSC’s North American Public Sector segment 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.

(Dollars in millions)	Three Months Ended						Nine Months Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Net periodic post-retirement (benefit) costs:
Interest cost	$	1		$	1		$	2		$	2
Expected return on assets	(1		)	(1		)	(4		)	(4		)
Amortization of prior service benefit	(4		)	(4		)	(10		)	(10		)
Net periodic benefit	$	(4	)	$	(4	)	$	(12	)	$	(12	)

The following table provides the OPEB plans’ projected benefit obligations, assets, and funding status:

(Dollars in millions)	As of
	December 29, 2017			March 31, 2017
Net benefit obligation	$	(84	)	$	(86	)
Net plan assets	76			76
Net unfunded status	$	(8	)	$	(10	)

CSRA contributed $1.1 million to the OPEB plans during both the nine months ended December 29, 2017 and December 30, 2016. CSRA expects to make $0.4 million of additional contributions to this plan during the remaining three months of fiscal year 2018 for the funding of participants’ benefit payments.

Note 10—Share-Based Compensation Plans

Employee Incentives

Prior to the Company’s separation from CSC (the “Spin-Off”), there were two stock incentive plans under which employees were granted stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”). Some of these awards vested upon the Spin-Off, some continue to vest in accordance with their original terms, and some converted into a different type of equity award at separation. CSRA had a net receivable from CSC of $7.0 million at December 29, 2017 and $1.3 million as of March 31, 2017, related to the settlement of equity awards granted to employees prior to the Spin-Off.

On August 9, 2017, CSRA’s shareholders approved an increase in the number shares available for issuance under the Company’s 2015 Omnibus Incentive Plan of 4,483,000 shares. As of December 29, 2017, there were 11,179,870 available shares of CSRA common stock for the grant of future stock options, RSUs, PSUs or other share-based incentives to employees of CSRA. For the nine months ended December 29, 2017 and December 30, 2016, CSRA recognized share-based compensation expense within Selling, general and administrative expenses of $11.3 million and $25.1 million, respectively, including CSRA’s non-employee director grants, which totaled $1.2 million in both periods.

19

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Stock Options

Information concerning stock options of CSRA during the nine months ended December 29, 2017 was as follows.

	Number of Option Shares	Weighted Average Exercise Price per share
Outstanding as of March 31, 2017	1,996,898	$	24.29
Granted	—	—
Less:
Exercised	185,031	23.00
Canceled/Forfeited	89,600	23.92
Expired	9,369	28.49
Outstanding as of December 29, 2017	1,712,898	24.37
Expected to vest in the future as of December 29, 2017	730,968	25.03
Exercisable as of December 29, 2017	981,930	23.88

As of December 29, 2017, unrecognized compensation expense related to unvested stock options totaled $2.9 million. This cost is expected to be recognized over a weighted-average period of 1.3 years.

RSUs and PSUs    

Information concerning RSUs and PSUs of CSRA during the nine months ended December 29, 2017, was as follows.

	Number of Restricted Stock Units	Weighted Average Fair Value
Outstanding as of March 31, 2017	857,914	$	26.95
Granted	683,335	30.39
Less:
Vested	97,097	29.10
Canceled/Forfeited	109,170	28.10
Outstanding as of December 29, 2017	1,334,982	28.46

As of December 29, 2017, total unrecognized compensation expense related to unvested RSUs and PSUs totaled $20.7 million. This cost is expected to be recognized over a weighted-average period of 2.1 years.

Note 11—Stockholders’ Equity and Accumulated Other Comprehensive Income (Loss)

Dividends Declared

In May 2017, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 163,760,678 shares, with a total dividend payout of $16.4 million. Payment of the dividend was made on July 12, 2017 to CSRA stockholders of record at the close of business on June 15, 2017.

In August 2017, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 163,604,848 shares, with a total dividend payout of $16.4 million. Payment of the dividend was made on October 3, 2017 to CSRA stockholders of record at the close of business on August 29, 2017.

20

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

In December 2017, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 163,828,550 shares, with a total dividend payout of $16.4 million. Payment of the dividend was made on January 25, 2018 to CSRA stockholders of record at the close of business on January 4, 2018.

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 June 30, 2017, the Company repurchased 450,000 shares of CSRA common stock for aggregate consideration of $14.3 million, at an average price of $31.71 per share. During the three months ended September 29, 2017, the Company paid $1.6 million for 50,000 shares of CSRA common stock (at an average price of $31.77 per share). The Company did not repurchase shares of CSRA common stock during the three months ended December 29, 2017.

As of December 29, 2017, CSRA remained authorized to repurchase $305.1 million of common stock pursuant to the Share Repurchase Program with an expiration date of March 31, 2019.

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 and nine months ended December 29, 2017 and December 30, 2016, respectively.

	For the Three Months Ended December 29, 2017									For the Three Months Ended December 30, 2016
(Dollars in millions)	Before Tax Amount			Tax Impact			Net of Tax Amount			Before Tax Amount			Tax Impact			Net of Tax Amount
Foreign currency translation adjustments	$	—		$	—		$	—		$	1		$	—		$	1
Unrealized gain on derivatives	7			(2		)	5			30			(12		)	18
Amortization of prior service credit	(4		)	1			(3		)	(3		)	1			(2		)
Total other comprehensive income (loss)	$	3		$	(1	)	$	2		$	28		$	(11	)	$	17

	For the Nine Months Ended December 29, 2017									For the Nine Months Ended December 30, 2016
(Dollars in millions)	Before Tax Amount			Tax Impact			Net of Tax Amount			Before Tax Amount			Tax Impact			Net of Tax Amount
Foreign currency translation adjustments	$	—		$	—		$	—		$	2		$	(1	)	$	1
Unrealized gain on derivatives	4			(1		)	3			25			(10		)	15
Amortization of prior service credit	(10		)	4			(6		)	(10		)	4			(6		)
Total other comprehensive income (loss)	$	(6	)	$	3		$	(3	)	$	17		$	(7	)	$	10

The following tables show the changes in Accumulated other comprehensive (loss) income for the nine months ended December 29, 2017 and December 30, 2016, respectively.

	Nine month ended December 29, 2017								Nine months ended December 30, 2016
(Dollars in millions)	Cash Flow Hedge		Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income			Foreign Currency Translation Adjustments		Cash Flow Hedge			Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance, beginning of period	$	11	$	20		$	31		$	—	$	(7	)	$	28		$	21
Other comprehensive income, net of taxes	3		—			3			1		15			—			16
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests	—		(6		)	(6		)	—		—			(6		)	(6		)
Balance, end of period	$	14	$	14		$	28		$	1	$	8		$	22		$	31

Note 12—Segment Information

CSRA’s reportable segments are as follows:

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

• Civil—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.

Beginning in fiscal year 2018, we revised Segment operating income to exclude the Net benefit of defined benefit plans coincident with our adoption of ASU 2017-07. The prior period has been revised to conform to the current period presentation.

The following table summarizes operating results and total assets by reportable segment.

(Dollars in millions)	Defense and Intelligence		Civil		Subtotal		Corporate(1)			Total
As of December 29, 2017
Total assets	$	2,447	$	2,682	$	5,129	$	171		$	5,300
Three Months Ended December 29, 2017
Revenue	$	605	$	704	$	1,309	$	—		$	1,309
Segment operating income (loss)(2)	70		88		158		(30		)	128
Depreciation and amortization expense	42		17		59		—			59
Nine Months Ended December 29, 2017
Revenue	$	1,687	$	2,123	$	3,810	$	—		$	3,810

21

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Segment operating income (loss)(2)	203		283		486		(88		)	398
Depreciation and amortization expense	122		53		175		—			175
As of December 30, 2016
Total assets	$	1,970	$	2,594	$	4,564	$	322		$	4,886
Three Months Ended December 30, 2016
Revenue	$	556	$	666	$	1,222	$	—		$	1,222
Segment operating income (loss)(2)	37		91		128		(24		)	104
Depreciation and amortization expense	35		26		61		—			61
Nine Months Ended December 30, 2016
Revenue	$	1,699	$	2,040	$	3,739	$	—		$	3,739
Segment operating income (loss)(2)	149		270		419		(73		)	346
Depreciation and amortization expense	103		86		189		—			189
(1) Total assets allocated to the Corporate Segment at December 29, 2017 consist of the following: (a) $57 million of cash, (b) $46 million of accounts receivable, (c) $31 million of property, plant, and equipment, net, (d) $19 million of other current assets; and (e) $18 million of other long-term assets.
(2) Segment operating income (loss) for the corporate segment includes corporate general and administrative expenses as well as Acquisition, integration, and other costs. The fiscal year 2018 periods include approximately $10 million of loss recognized on the sale of the Company’s corporate headquarters building.

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.

Note 13—Commitments and Contingencies

Commitments

Sale-Leaseback Transaction

On November 2, 2017, CSRA closed a sale-leaseback transaction with MCPII 3170 Fairview, LLC, pursuant to which the Company sold its corporate headquarters building in Falls Church, Virginia, and simultaneously leased back a significant portion of the building. The lease has a 12-year term with two subsequent renewal options of five-years each. The lease qualifies as a capital lease, as the present value of the minimum lease payments exceeds 90% of the fair value of the portion of the property leased by CSRA. The gross sale price was $33.1 million and the Company recognized a loss of approximately $10 million in accordance with accounting guidance for leasing activities (ASC 840). The loss recognized on the sale is included in Selling, general and administrative expenses within the Company’s unaudited Consolidated and Condensed Statement of Operations. Payments under the lease are accounted for as interest and principal payments under the capital lease using a 12 year amortization term. Pursuant to the lease, the landlord agreed to provide a substantial tenant improvement allowance, and in addition, to perform certain renovations and improvements to the property.

As of December 29, 2017, CSRA has the following future minimum lease payments under all of its capital leases, including both facilities and equipment for use on customer contracts:

22

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

(Dollars in millions)	Amount
Fiscal year:
2018 (fourth quarter)	$	22
2019	82
2020	78
2021	71
2022	69
2023 and thereafter	101
Total minimum lease payments	423
Less: amount representing interest and executory costs	(71		)
Less: amount representing maintenance, taxes, and insurance costs	(92		)
Present value of net minimum lease payments	260
Less: current maturities of capital lease liability	(50		)
Noncurrent capital lease liability	$	210

Letters of Credit and Surety Bonds

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 December 29, 2017 and March 31, 2017, CSRA had $22.9 million and $20.2 million, respectively, of outstanding letters of credit, and $12.2 million and $12.0 million, respectively of surety bonds related to these performance guarantees. CSRA believes it is in compliance in all material respects with its performance obligations under all service contracts for which there is a financial performance guarantee and that the ultimate liability, if any, incurred in connection with these guarantees would not have a material adverse effect on its unaudited Consolidated and Condensed Financial Statements.

Indemnifications

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). Historically, CSRA has not incurred significant costs related to licensee software indemnifications.

Contingencies

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 applicable accounting guidance. CSRA believes it has appropriately recognized liabilities for any such matters. In addition to the matters noted below, CSRA is currently party to a number of disputes that involve or may involve litigation. 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.

U.S. Government Agency Reviews

CSRA is routinely subject to investigations and reviews relating to compliance with various laws and regulations relating 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 and its unaudited Consolidated and Condensed Financial Statements due to CSRA’s reliance on government contracts.

23

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

U.S. 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, 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.

CSRA’s indirect cost audits by the DCAA (including audits of both CSRA LLC and SRA) remain open for several fiscal years. Although the Company recorded contract revenue based upon estimates of costs that the Company’s management believes will be approved upon final audit or review, management does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed these estimates, CSRA’s profitability would be adversely affected.

As of December 29, 2017 and March 31, 2017, CSRA has recorded a liability of $16.3 million and $16.5 million, respectively, for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs. These amounts include potential adjustments related to both pre-separation and post-separation audits or reviews.

Legal Proceedings

The Company is involved in various lawsuits, claims, and administrative proceedings arising in the normal course of business, including many matters that arose before the Company’s separation from CSC. See Note 21—Commitments and Contingencies in CSRA’s Consolidated and Combined Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017 for additional information. During the nine months ended December 29, 2017, the following significant developments arose with respect to these matters:

State of Maryland, Medicaid Enterprise Restructuring Project (“MERP”)

On September 15, 2017, the Maryland Department of Health (the “State”) issued a procurement officer's decision and Departmental Final Action (the “Final Action”) denying CSC’s remaining undecided claims against the State in the total amount of $83 million. In the Final Action, the State also purports to award itself approximately $521 million on its counterclaim. The State alleges a default by CSC under the contracts for MERP. CSC contests both the State’s allegation that it defaulted and the amount of State’s alleged damages. CSC timely filed a notice of appeal with the Maryland State Board of Contract Appeals (the “State Board”), which will consider CSC’s claims and the State’s counterclaim anew.

CSC’s claims against the State have been consolidated at the State Board. On January 12, 2018, CSC filed various strong dispositive motions at the State Board, one of which challenges the State Board’s jurisdiction over the State’s claims against CSC. CSC’s January 12, 2018, motions also request summary decision on the State’s claims should jurisdiction be found.  

On November 22, 2017, the State filed a fraud complaint in Maryland State Circuit Court alleging that CSC’s purported contractual nonperformance amounted to fraud under common law and the Maryland False Health Claims Act (the “Complaint”). In the Complaint, the State seeks penalties of $0.8 million, unspecified compensatory damages in excess of $500 million, which may be trebled under the Maryland False Health Claims Act, and punitive damages in excess of $500 million. The complaint also sets forth specified damages totaling approximately $44 million, which are also set forth in the State’s $521 million counter-claim filed with the State Board in September 2017. On December 29, 2017, CSC removed the case to the U.S. District Court for the District of Maryland and on January 5, 2018, filed several dispositive motions, including a Motion to Dismiss, or in the Alternative for a More Definite Statement, under Federal Rules of Civil Procedure 9(b) and 12(e). Management is continuing to correspond with the State to seek a mutually agreeable resolution to these matters.

Management has evaluated the recoverability of its assets related to the MERP contract in light of these developments and concluded that no adjustments to its financial statements are required. Further, we have assessed the State’s counterclaim and have concluded that no reserve is required.

24

CSRA INC.

NOTES TO CONSOLIDATED AND CONDENSED FINANCIAL STATEMENTS

(unaudited)

Strauch et al. Fair Labor Standards Act Class Action

On June 30, 2017 the U.S. District Court for the District of Connecticut granted class certification for former employees classified as Associate Professionals or as Professionals working in the states of California and Connecticut who worked more than 40 hours per week. The Court denied class certification for all class members in North Carolina on the basis that North Carolina law is preempted by the Fair Labor Standards Act. In addition, class certification was denied as to former employees classified as Senior Professionals in California and Connecticut.  The Second Circuit denied the Company’s July 14, 2017 petition for review of the partial certification of the class. The case was tried in December 2017, resulting in a jury verdict in favor of the plaintiffs. The Court entered judgment on January 5, 2018, without specified damages. The Court noted that the judgment will be amended to include damages and fees when determined.

Southwest Asia Employment Contract Litigation

On June 28, 2017, the Fourth Circuit ruled against CSC on its appeal of the District Court’s award of attorneys’ fees to the Rishell plaintiff. The underlying judgment and attorney fees have been paid and this matter is now closed. No additional accrual for indemnification of fees was necessary.

In the separate case pending before the U.S. District Court for the Eastern District of Louisiana, on July 15, 2017, claims of 58 plaintiffs were dismissed, and the claims of the remaining 37 plaintiffs were limited, on the basis that these claims were untimely under Louisiana law. As the result of an October 2017 settlement conference, the parties reached an agreement in principle to settle the case for $0.6 million. The Company filed a motion to enforce the settlement on January 8, 2018. The range of the possible losses for which the Company would be required to indemnify CSC remains $0.6 million to $2.6 million.

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

You should read the following management discussion and analysis of financial condition and results of operations (“MD&A”) in conjunction with our Annual Report on Form 10-K for the fiscal year ended March 31, 2017 and our unaudited Consolidated and Condensed Financial Statements and accompanying notes for the three and nine months ended December 29, 2017 included herein.

Unless the context otherwise requires, “CSRA,” “we,” “our” and “us” refer to CSRA Inc. and its consolidated and combined subsidiaries. We refer to the federal government of the United States of America, including its branches, departments, agencies, armed forces, elected and unelected officials, and employees (acting in their capacity as such), as the “U.S. government.”

Cautionary Note on Forward-looking Statements

All statements and assumptions contained in this Form 10-Q and in the documents attached or incorporated by reference herein that do not directly and exclusively relate to historical or current facts constitute “forward-looking statements.” Forward-looking statements often include words such as “aims,” “anticipates,” “estimates,” “expects,” “projects,” “intends,” “plans,” “believes” and words and terms of similar substance in connection with discussions of future operating performance or financial performance or condition. These statements represent our current expectations and beliefs, and we can give no assurance that the results described will be achieved. Forward-looking information contained in these statements may include, among other things, statements related to our financial condition, results of operations, cash flows, business strategies, operating efficiencies or synergies, competitive position, growth opportunities, plans and objectives of management, and other matters. Such statements are subject to numerous assumptions, risks, uncertainties, and other factors, many of which are outside of our control, which could cause actual results to differ materially from the results described in such statements. These factors include without limitation those set forth in Item 1A, Risk Factors in our Annual Report on Form 10-K.

Factors or risks that could cause our actual results to differ materially from the results we anticipate include, but are not limited to: reduced spending levels and changing budget priorities of our largest customer, the U.S. government; failure to maintain strong relationships with the U.S. government and other contractors and

25

subcontractors; possible delays or overturning of our U.S. government contract awards due to bid protests, which can result in loss of contract revenue, diminished opportunities, or failure to perform by other companies on which we depend to deliver products and services; failure of our customers to fund contracts or exercise their options to extend contracts, or our inability to execute awarded contracts successfully; failure to win recompetes of contracts we currently have; pricing pressure on new work, reduced profitability, or loss of market share due to intense competition and/or commoditization of services we offer; our failure to comply with complex laws and regulations, including, but not limited to, the False Claims Act, the Federal Acquisition Regulation, the Defense Federal Acquisition Regulation Supplement, and the U.S. Government Cost Accounting Standards; adverse results of audits and investigations conducted by the Defense Contract Audit Agency or any of the Inspectors General for various agencies with which we contract; failure to comply with complex network security, data privacy, or legal and contractual obligations, or the failure to protect sensitive information; challenges attracting and retaining key personnel or high-quality employees, particularly those with security clearances; changes in estimates used in recognizing revenue; failure to manage acquisitions or divestitures successfully, including identifying, evaluating, and valuing acquisition targets, integrating acquired companies, businesses, or assets, losses associated with divestitures and the inability to effect divestitures at attractive prices or on a desired timeline; and limitations as a result of our substantial indebtedness, which could adversely affect our financial health, operational flexibility and strategic plans.

Forward-looking statements in this Form 10-Q speak only as of the date of this Form 10-Q, and forward-looking statements in documents attached or incorporated by reference speak only as of the date of those documents. We do not undertake any obligation to update or release any revisions to any forward-looking statement or to report any events or circumstances after the date of this Form 10-Q or to reflect the occurrence of unanticipated events.

Trademarks and Copyrights

CSRA owns or has rights to various trademarks, logos, service marks, and trade names used 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; the omission of these symbols, however, does not constitute a waiver of any rights associated with the respective trademarks, service marks, trade names, and copyrights included or referred to in this Form 10-Q.

Introduction

Our MD&A is organized as follows:

• Overview: A discussion of our business and overall analysis of financial and other highlights affecting CSRA, which we present to provide context for the remainder of our MD&A. The overview analysis compares the three and nine months ended December 29, 2017 to the three and nine months ended December 30, 2016;

• Results of Operations: An analysis of our financial results comparing the three and nine months ended December 29, 2017 to the comparable prior-year periods. 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 and off balance sheet arrangements; and

• 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.

26

Overview

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-critical functions for our war fighters and our citizens. Our workforce of over 19,000 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 and mission- and operations-related services across the U.S. government, including to the Department of Defense (“DoD”), intelligence and homeland security communities, and civil and healthcare agencies, as well as to state and local government agencies. We leverage deep domain-based customer intimacy and decades of experience in helping customers execute their missions with a fundamental understanding of their IT environments, which have 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:

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

• Civil —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.

Financial Overview

During fiscal year 2018, we have completed the following significant transactions:

•In June 2017, we completed an amendment of our credit facilities to reduce our interest rate on certain borrowings, and reallocate unpaid principal balances among portions of the credit facility

•We used our positive cash flow to repurchase 500,000 shares of CSRA common stock for approximately $15.9 million, in aggregate, at an average price of $31.72 per share, and paid $49.7 million in dividends.

•On July 3, 2017, we completed the acquisition of NES Associates, LLC (“NES”), which is a provider of IT services to the U.S. government. On June 30, 2017, we drew $55 million on our revolving credit facility in order to fund, in part, the settlement of its purchase of NES. NES became a wholly-owned subsidiary of CSRA at the beginning of the second quarter of fiscal year 2018.

•On November 17, 2017, we completed the acquisition of Praxis Engineering Technologies LLC (“Praxis”) for approximately $235 million in cash, subject to closing adjustments. Praxis is a consulting and solutions firm dedicated to the practical application of software and systems engineering technologies to the U.S. government. We drew $165 million on our revolving credit facility in order to fund, in part, the settlement of our purchase of Praxis. Praxis became a wholly-owned subsidiary of CSRA during the third quarter of fiscal year 2018.

27

•In November 2017, we executed and closed a sale-leaseback transaction of our corporate headquarters property in Falls Church, Virginia. Pursuant to the sale transaction, the gross sales price was $33.1 million and we recognized a loss of approximately $10 million on the sale of the property in the third quarter.

•In December 2017, we completed a further amendment of our credit facilities to extend the maturity dates of a portion of our borrowings under our term loan A facilities and under our revolving credit facility by one year and to increase our borrowings under our term loan B Facility by $200 million. We used the additional borrowings under the term loan B facility to pay in full the outstanding borrowings under our revolving credit facility, and to pay fees and expenses associated with the amendment.

Key operating results for the third quarter and first nine months of fiscal years 2018 and 2017 include:

	Three Months Ended				Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		December 29, 2017		December 30, 2016
Total revenue	$	1,309	$	1,222	$	3,810	$	3,739
Operating income	128		104		398		346
Net income	192		128		350		276
Net income attributable to common shareholders	188		126		341		267
Non-GAAP measures:
Free cash flow(1)	133		191		223		266
Adjusted EBITDA(2)	201		188		604		586

(1) Free cash flow is a non-GAAP measure and our definition of free cash flow may differ from that used by other companies. We define free cash flow as equal to the sum of: (a) operating cash flows; (b) investing cash flows, excluding business acquisitions, dispositions (including those of non-operating assets), and investments; and (c) payments on capital leases and other long-term asset financings. For comparability between periods, free cash flow is further adjusted for: (i) non-recurring separation and merger-related payments; (ii) the amount of net proceeds received from the initial sale of billed and/or unbilled receivables at the time that we initially implemented the Master Accounts Receivable Purchase Agreement (the “Purchase Agreement”); and (iii) the incremental net proceeds received from the initial sale of receivables when they first become eligible for sale under the Purchase Agreement. Free cash flow is not a substitute for operating and investing cash flows as determined in accordance with GAAP. Our management uses free cash flow in reviewing the overall performance of the business and motivating performance through incentive compensation for key business leaders. We believe that strong free cash flow is important to investors in our industry. Free cash flow provides both management and investors a measure of cash generated from operations that is available to fund acquisitions, repay debt, pay dividends, and repurchase our common stock. Management overcomes the limitations of this non-GAAP measure by also reviewing the GAAP measures of operating, investing, and financing cash flows.

28

A reconciliation of free cash flow to the most directly comparable GAAP financial measure is presented below:

	Three Months Ended						Nine Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Net cash provided by operating activities	$	157		$	227		$	316		$	438
Net cash used in investing activities	(222		)	(27		)	(381		)	(118		)
Initial sales of qualifying accounts receivables(a)	—			—			—			(46		)
Payments for acquisitions, net of cash acquired	234			—			335			—
Net proceeds from disposition of corporate headquarters	(31		)	—			(31		)	—
Payments on capital lease liabilities	(10		)	(15		)	(30		)	(32		)
Separation and merger-related payments	5			6			14			24
Free cash flow	$	133		$	191		$	223		$	266

(a) For the nine months ended December 30, 2016, the amount relates to SRA International Inc. (“SRA”) unbilled receivables under the Purchase Agreement to which SRA was added to during the period. Billed receivables historically sold by SRA under a separate accounts receivable purchase agreement continue under the Purchase Agreement.

(2) Adjusted earnings before interest, taxes, depreciation, and amortization (“EBITDA”) is a non-GAAP measure. Our calculation of Adjusted EBITDA is based on our credit agreement, and may differ from other companies. We changed our Adjusted EBITDA measure in fiscal year 2017 to remove fully the costs and benefits associated with our legacy defined benefits plans. We exclude the costs and benefits of legacy defined benefit plans because participation in these plans has been frozen for several years and these costs are not included in the compensation of our employees. We believe Adjusted EBITDA provides useful information to investors regarding our results of operations, as it provides another measure of our profitability and our ability to service our debt and is considered an important measure by financial analysts covering CSRA and peer companies in our industry.

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

	Three Months Ended						Nine Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Net income	$	192		$	128		$	350		$	276
Interest expense, net	29			36			88			95
Income tax (benefit) expense	(75		)	76			16			158
Depreciation and amortization	59			61			175			189
Amortization for contract-related intangibles	—			—			—			3
Stock-based compensation	3			4			11			11
Foreign currency exchange loss	1			—			1
Net benefits of pension and OPEB plans	(20		)	(137		)	(61		)	(186		)
Other separation-related items (within SG&A and cost of services)	9			15			7			22
Acquisition, integration, and other costs	3			5			17			18
Adjusted EBITDA	$	201		$	188		$	604		$	586

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Business Drivers and Key Performance Indicators

We manage and assess the performance of our business through various measures, including contract awards, revenue, backlog, days sales outstanding, and free cash flow. See the discussion 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. Certain of our key performance indicators for the three and nine months ended December 29, 2017, were as follows:

• We announced contract awards⁽³⁾ of $1.6 billion and $7.4 billion for the three and nine months ended December 29, 2017, respectively, as compared to $1.9 billion and $5.5 billion during the three and nine months ended December 30, 2016, respectively.

• Revenue recognized in the third quarter of fiscal year 2018 was$1.31 billion, compared to $1.22 billion in the third quarter of fiscal year 2017. Revenue was $3.81 billion in the nine months ended December 29, 2017, compared to $3.74 billion in the nine months ended December 30, 2016.

• Total backlog⁽⁴⁾ was $18.2 billion at December 29, 2017, compared to $15.2 billion at March 31, 2017. Of the total backlog at December 29, 2017, $1.2 billion is expected to be realized as revenue during the fourth quarter of fiscal year 2018, and $2.6 billion is funded. As of December 29, 2017, backlog for the Defense and Intelligence segment was $9.5 billion and was $8.7 billion for the Civil segment.

• Days Sales Outstanding (“DSO”)⁽⁵⁾ was 59 days as of December 29, 2017 compared to 54 days and 49 days as of September 30, 2017 and March 31, 2017, respectively. The increase in DSO in the third quarter is primarily due to an increase in our unbilled receivable balance related to timing and contract modifications that occurred late in the quarter. DSO as of December 29, 2017 excludes amounts associated with Praxis for consistency in comparability.

• Free cash flow was $133 million and $223 million for the three and nine months ended December 29, 2017, respectively, compared to $191 million and $266 million for the three and nine months ended December 30, 2016, respectively.

(3) Announced award values for competitive indefinite delivery/indefinite quantity (“IDIQ”) 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.

(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 includes potential orders under IDIQ contracts where CSRA is the sole awardee. 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.

(5) DSO is calculated as total receivables from customer contracts at the fiscal period end divided by revenue-per-day. Revenue-per-day equals total revenue divided by the number of days in the fiscal period. We revised our calculation of DSO in the first quarter of fiscal year 2018 to reflect only customer receivables (billed and unbilled) and exclude other receivable balances. Prior period data has been revised to conform to the current presentation.

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Economic and Industry Factors

For both the nine months ended December 29, 2017 and December 30, 2016, we generated approximately 94% of our total revenue from sales to the U.S government either as a prime contractor or subcontractor to other prime contractors. For the three and nine months ended December 29, 2017, we generated approximately 46% and 44%, respectively, of our total revenue from the DoD (including all branches of the U.S. military) and intelligence community and approximately 54% and 56%, respectively, of our total revenue from health and civil contracts. We expect to continue to derive substantially all of our revenue from work performed under U.S. 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 may 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. The U.S. government is operating under a continuing resolution bill passed on January 22, 2018 that extends the operations of the government to February 8, 2018. Negotiations continue in Congress to extend funding for the U.S. Government for the remainder of its fiscal year ending September 30, 2018.

Our market is highly competitive. Our revenue is 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 believe that 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, and our 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.

Our revenue is derived principally from contracts that have characteristics unique to the federal contracting environment. Almost all of our U.S. 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”).

On December 22, 2017, the U.S. government enacted the “Tax Cuts and Jobs Act” of 2017 (the “Tax Act”). Among other provisions, this law significantly modifies the existing U.S. tax code for corporations, including a prospective change in the statutory tax rate from 35% to 21%, repeal of the corporate alternative minimum tax, changes to business tax deductions, and significant revision of international tax provisions. The change in the statutory tax rate is effective beginning January 1, 2018. Our net benefit for income taxes in the three months ended December 29, 2017 includes a $100.7 million benefit related to: (a) the revaluation of our deferred tax assets and liabilities arising from the Tax Act; and to a much lesser extent (b) a change in the Company’s liability for an uncertain tax position. Excluding the revaluation adjustment, our provision for taxes on current period income was recognized using reasonable estimates of income and the statutory rate of the Company for the full fiscal year. As our fiscal year end is March 30, 2018, CSRA’s statutory federal corporate tax rate is prorated to 31.6%. Our federal statutory rate for fiscal year 2019 and beyond will be 21.0%.

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. government. We monitor 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 pace of technological change and the type and level of technology spending by our customers. The ability to identify and capitalize on these technological changes and customer technology spending early in their cycles is a key driver of our performance.

Results of Operations

We report our financial results using a fiscal year convention that comprises four thirteen-week quarters. Every fifth fiscal year includes an additional week in the first quarter to prevent the fiscal year from moving from an approximate end of March date. The first nine months and third quarters of fiscal years 2018 and 2017 were comprised of an equivalent number of weeks.

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Revenue

Revenue for the three and nine months ended December 29, 2017 and December 30, 2016 were:

	Three Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		Change		Percent Change
Defense and Intelligence	$	605	$	556	$	49	8.8	%
Civil	704		666		38		5.7
Total revenue	$	1,309	$	1,222	$	87	7.1	%

	Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		Change			Percent Change
Defense and Intelligence	$	1,687	$	1,699	$	(12	)	(0.7	)	%
Civil	2,123		2,040		83			4.1
Total revenue	$	3,810	$	3,739	$	71		1.9		%

For the three months ended December 29, 2017, our total revenue increased by $87 million, or 7.1%, and for the nine months ended December 29, 2017, our total revenue increased by $71 million, or 1.9%, as compared to the same fiscal period of the prior year. Both the three month and nine month periods in fiscal year 2018 include the revenue associated with NES since July 3, 2017 and Praxis since November 17, 2017, which is immaterial in these comparisons.

Defense and Intelligence Segment

For the three and nine months ended December 29, 2017, Defense and Intelligence segment revenue increased by $49 million, or 8.8%, and decreased by $12 million, or 0.7%, respectively, as compared to the same fiscal periods of the prior year.

For the three months ended December 29, 2017, the revenue increase was primarily due to new contract awards and net increases on existing task orders across multiple U.S. government programs partially offset by a $16 million decline associated with the Logistics Modernization Program (“LMP”) contract.

For the nine months ended December 29, 2017, the revenue decrease was primarily due to a $59 million decline associated with the LMP contract and other program completions, which was partially offset by new awards and net increases in existing task orders across multiple U.S. government programs.

Civil Segment

For the three and nine months ended December 29, 2017, Civil segment revenue increased by $38 million, or 5.7%, and $83 million, or 4.1%, respectively, as compared to the same fiscal periods of the prior year.

For the three months ended December 29, 2017, the revenue increase was primarily due to $89 million of revenue from new programs across multiple federal agencies, including the Department of Homeland Security (“DHS”), offset by program completions and net reductions on existing task orders.

For the nine months ended December 29, 2017, the revenue increase was primarily due to $160 million of revenue from new programs across multiple federal agencies, mainly the DHS, the Office of Personnel Management and the Environmental Protection Agency, partially offset by net reductions on existing task orders and program completions.

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Operating Income

Operating income increased approximately 23.1% to $128 million and approximately 15.0% to $398 million for the three and nine months ended December 29, 2017, respectively, from $104 million and $346 million for the three and nine months ended December 30, 2016, respectively.

For the three months ended December 29, 2017, the increase in operating income was primarily due to an increase in revenue and lower total operating costs, resulting from lower Cost of services (“COS”) as a percentage of revenue. Selling, general & administrative (“SG&A”) expense increased slightly in the three months ended December 29, 2017, due to an approximate $10 million loss on the sale of the Company’s headquarters facility in the period. Additionally, depreciation, and amortization costs declined due to the absence of amortization of the company’s headquarters facility as well as contract backlog assets acquired in the SRA merger, which were fully amortized by the end of fiscal year 2017.

For the nine months ended December 29, 2017, the increase in operating income was primarily due to the program delivery efficiencies and indirect cost reductions, which lowered total operating costs, resulting from lower COS and SG&A costs, as a percentage of revenue. However, SG&A in the nine months ended December 29, 2017 was negatively impacted by an approximate $10 million loss on the sale of the Company’s headquarters facility. Additionally, depreciation and amortization costs declined due to the absence of amortization of the company’s headquarters facility as well as contract backlog assets acquired in the SRA merger, which were fully amortized by the end of fiscal year 2017.

Segment Operating Income

Segment operating income presented below excludes corporate segment costs as well as Acquisition, integration, and other costs. This information is used to assess each segment’s financial performance, and is one of the financial measures used to determine executive compensation. Beginning in fiscal year 2018, we revised Segment operating income to exclude the net benefit of defined benefit plans coincident with our adoption of a recent change in accounting guidance for the presentation of retirement benefits. The prior period has been revised to conform to the current period presentation. For additional information about Segment operating income, see Note 12—Segment Information in our unaudited Consolidated and Condensed Financial Statements.

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

	Three Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016			Change				Percent Change
Defense and Intelligence	$	70		$	37		$	33			89.2		%
Civil	88			91			(3		)		(3.3	)
Segment operating income margin:
Defense and Intelligence	11.6		%	6.7		%	4.9			%
Civil	12.5		%	13.7		%	(1.2		)	%

	Nine Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016			Change			Percent Change
Defense and Intelligence	$	203		$	149		$	54		36.2	%
Civil	283			270			13			4.8
Segment operating income margin:
Defense and Intelligence	12.0		%	8.8		%	3.2		%
Civil	13.3		%	13.2		%	0.1		%

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Defense and Intelligence Segment

For the three months ended December 29, 2017, Defense and Intelligence segment operating income increased by $33 million, or approximately 89.2%, as compared to the same fiscal period of the prior year. The increase is primarily due to lower indirect costs allocated to the segment, mostly related to depreciation and amortization.

For the nine months ended December 29, 2017, Defense and Intelligence segment operating income increased by $54 million, or 36.2%, as compared to the same fiscal period of the prior year. The increase is primarily due to lower indirect costs allocated to the segment, mostly related to depreciation and amortization. These changes were partially offset by the decline in segment revenue.

Civil Segment

For the three months ended December 29, 2017, the Civil segment’s operating income decreased by $3 million, or 3.3%, as compared to the same fiscal period of the prior year. The decrease is primarily due to higher direct costs primarily associated with software license fees, and was partially offset by lower indirect costs allocated to the segment, mostly related to depreciation and amortization. The segment’s operating income in the fiscal year 2018 period benefited from an increase in revenue.

For the nine months ended December 29, 2017, the Civil segment’s operating income increased by $13 million, or 4.8%, as compared to the same fiscal period of the prior year. The increase is primarily due to lower indirect costs allocated to the segment, mostly related to depreciation and amortization. In addition, the segment’s operating income in the period benefited from an increase in revenue.

Costs and Expenses

Our total costs and expenses were:

	Three Months Ended
(Dollars in millions)	December 29, 2017			% of Revenue			December 30, 2016			% of Revenue
Costs of services	$	1,063		81.2		%	$	1,000		81.8		%
Selling, general and administrative	56			4.3			52			4.3
Acquisition, integration, and other costs	3			0.2			5			0.4
Depreciation and amortization	59			4.5			61			5.0
Total operating expenses	1,181			90.2			1,118			91.5
Net benefit of defined benefit plans	(20		)	(1.5	)		(137		)	(11.2	)
Interest expense, net	29			2.2			36			2.9
Other expense, net	2			0.2			1			0.1
Total costs and expenses	$	1,192		91.1		%	$	1,018		83.3		%

	Nine Months Ended
(Dollars in millions)	December 29, 2017			% of Revenue			December 30, 2016			% of Revenue
Costs of services	$	3,064		80.4		%	$	3,023		80.9		%
Selling, general and administrative	156			4.1			163			4.4
Acquisition, integration, and other costs	17			0.4			18			0.5
Depreciation and amortization	175			4.6			189			5.1
Total operating expenses	3,412			89.5			3,393			90.9
Net benefit of defined benefit plans	(61		)	(1.6	)		(186		)	(5.0	)
Interest expense, net	88			2.3			95			2.5
Other expense, net	5			0.1			3			0.1
Total costs and expenses	$	3,444		90.3		%	$	3,305		88.5		%

Costs of Services

For the three and nine months ended December 29, 2017, COS as a percentage of revenue was 81.2% and 80.4%, respectively, as compared to 81.8% and 80.9% for the same periods of the prior year. Overall, cost of services as a percent of revenue were relatively stable compared to prior year periods. However, program efficiencies, as well as integration efficiencies from SRA, were partially offset by higher costs on the increased revenue from new awards and slightly higher indirect costs.

Selling, General and Administrative

For both the three months ended December 29, 2017 and December 30, 2016, SG&A as a percentage of revenue was 4.3%, compared to 4.1% and 4.4% for the nine months ended December 29, 2017 and December 30, 2016, respectively. The three and nine month periods of fiscal year 2018 include approximately $10 million of loss recognized on the sale of the Company’s headquarters facility in the third quarter of fiscal year 2018. Absent that expense, SG&A would have decreased in the fiscal year 2018 periods due primarily to lower bid and proposal expenses and other indirect cost reductions for the three and nine month periods.

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For the three and nine months ended December 29, 2017, expense related to equity awards included within SG&A expenses in our results of operations was $3.3 million and $11.3 million, respectively, compared to $18.0 million and $25.1 million for the same periods of the prior year. See Note 10—Share-Based Compensation Plans in our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q for additional information on share-based compensation including unrecognized compensation expense that will impact our earnings in future periods.

Depreciation and Amortization (“D&A”)

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

	Three Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		Change			Percent Change
Defense and Intelligence	$	42	$	35	$	7		20.0		%
Civil	17		26		(9		)	(34.6	)
Total depreciation and amortization	$	59	$	61	$	(2	)	(3.3	)	%

	Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		Change			Percent Change
Defense and Intelligence	$	122	$	103	$	19		18.4		%
Civil	53		86		(33		)	(38.4	)
Total depreciation and amortization	$	175	$	189	$	(14	)	(7.4	)	%

For the three and nine months ended December 29, 2017, D&A as a percentage of revenue decreased to 4.5% and 4.6%, respectively, compared to 5.0% and 5.1% for the same periods of the prior year. These decreases are primarily due to the absence of amortization of contract backlog assets acquired in the SRA merger, which were fully amortized by the end of fiscal year 2017. Partially offsetting these decreases, we curtailed use of certain software during the first quarter of fiscal year 2018, and recognized approximately $4.9 million of accelerated amortization expense during the period.

Acquisition, Integration, and Other Costs

Acquisition, integration, and other costs consist of separately identifiable acquisition costs and fees paid to third parties for completed acquisitions as well as integration, transition, and other costs for integrating the businesses. In prior periods, we also incurred separation and merger costs in connection with our separation from Computer Sciences Corporation (now known as DXC Technology) (“CSC”) and our subsequent merger with SRA. These costs consisted primarily 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 and nine months ended December 29, 2017, acquisition, integration, and other costs were $3 million and $17 million, respectively, and were slightly lower compared to the same periods in fiscal year 2017 when Spin-off and SRA integration costs were generally higher than in the current year periods.

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Net Benefit of Defined Benefit Plans

Our defined benefit plans (the “Plans”) relate to certain legacy operations that we absorbed in the separation from CSC and are frozen for all participants. Thus, the net benefits of the Plans in fiscal year 2018 periods primarily represent the amount by which the expected return on plan assets exceeded the interest cost of our benefit obligation. However, net benefits in the three and nine month periods ended December 30, 2016 included $13 million of settlement gains associated with a voluntary settlement with certain participants as well as $101 million of actuarial gains arising from the interim remeasurement that was triggered by the settlement action in the prior year. The decrease in net benefits of the Plans was primarily due the remeasurement and settlement gains in the prior year that did not recur in fiscal year 2018. To a lesser extent, the fiscal year 2018 period declines also reflect a lower expected long-term rate of return on plan assets combined with a lower base of net pension assets in the Plans. For additional information about our estimates of the expected return on plan assets and discount rates associated with our Plans, see Note 16—Pension and Other Postretirement Benefit Plans in our Consolidated and Combined Financial Statements within our Form 10-K for the fiscal year ended March 31, 2017.

Interest Expense, Net

Interest expense was $29 million and $88 million for the three and nine months ended December 29, 2017, respectively, compared to $36 million and $95 million for the three and nine months ended December 30, 2016, respectively. See Note 7—Debt for further information about interest expense, net.

Other Expense, Net

Other expense, net comprises gains and losses from the sale of certain non-operating assets, the impact of movement in foreign currency exchange rates on CSRA's unhedged foreign currency denominated activity, and other miscellaneous gains and losses.

Other expense, net was $2 million and $5 million for the three and nine months ended December 29, 2017, respectively, compared to $1 million and $3 million for the three and nine months ended December 30, 2016, respectively.

Income Taxes

Our net benefit for income taxes in the three months ended December 29, 2017 included a benefit of $100.7 million associated with: (a) the estimated net effect of the revaluation adjustment of CSRA’s deferred tax liabilities and assets at the end of the period associated with the Tax Act; and to a much lesser extent (b) a change in the Company’s liability for an uncertain tax position. We evaluated its deferred tax assets and liabilities on a provisional basis using management estimates. Our effective tax rate (“ETR”) was (64.1)% and 4.4% for the three and nine months ended December 29, 2017, respectively, compared to 37.3% and 36.4% for the three and nine months ended December 30, 2016, respectively. The lower ETR for the three and nine months ended December 29, 2017 was primarily a result of the provisional change to the Company’s deferred tax assets and liabilities discussed above and the change to the statutory income tax rate enacted with the Tax Act. In addition, the Company’s ETR in fiscal year 2018 benefited from recognition of estimated tax credits for research and development activities, which excluding the impact of the Tax Act, lowered the ETR approximately 2.7 percentage points in the nine months ended December 29, 2017.

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. The impact of the Tax Act may differ from these estimates, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made. See Note 8—Income Taxes to our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q for further information.

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Liquidity and Capital Resources

Cash Flows

	Nine Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016
Cash provided by operating activities	$	316		$	438
Cash used in investing activities	(381		)	(118		)
Cash provided by (used in) financing activities	19			(288		)
Net (decrease) increase in cash and cash equivalents	(46		)	32
Cash and cash equivalents at beginning of year	126			130
Cash and cash equivalents at end of period	$	80		$	162

Operating Cash Flow

Net cash provided by operating activities for the nine months ended December 29, 2017 was $316 million, a decrease of $122 million compared to the nine months ended December 30, 2016. Operating cash flow in the nine months of fiscal year 2018 was negatively affected by a significant increase in accounts receivable in the period from delays in billing and collections as well as the addition of receivables associated with NES and Praxis.

Investing Cash Flow

Net cash used in investing activities for the nine months ended December 29, 2017 was $381 million, as compared to $118 million for the nine months ended December 30, 2016. The increase in the fiscal year 2018 period is primarily due to our purchases of NES and Praxis, which was partially offset by proceeds from the sale of our corporate headquarters building.

Financing Cash Flow

Net cash provided by financing activities for the nine months ended December 29, 2017 was $19 million, compared $288 million of cash used in financing activities in the nine months ended December 30, 2016. The net cash provided from financing activities in fiscal year 2018 primarily reflects our receipt of $151 million of proceeds from borrowings (net of repayments) whereas the fiscal year 2017 period reflects our net repayment of $195 million on long-term debt in that period. Financing activities in the fiscal year 2018 period also reflect repurchases of our common stock and the payment of quarterly cash dividends to common stockholders. As discussed in “Debt Financing” below, we refinanced our credit facilities in both the first and third quarters of fiscal year 2018, which extended the maturities of our credit facilities and resulted in lower margins over base index interest rates on our outstanding debt.

Discussion of Financial Condition

Cash and Cash equivalents were $80 million and $126 million at December 29, 2017 and March 31, 2017, respectively.

CSRA maintains an accounts receivable sales facility under our Purchase Agreement with The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia, and Mizuho Bank, Ltd., each as Purchaser, for the continuous non-recourse sale of CSRA’s eligible trade receivables. Under the Purchase Agreement, 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 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. On August 8, 2017, we extended the term of this facility for one year.

During the nine months ended December 29, 2017 and December 30, 2016, we sold $2.26 billion and $2.33 billion, respectively, of our billed and unbilled receivables for cash. Collections by the purchaser on the receivables we sold were $2.1 billion and $2.2 billion for the nine months ended December 29, 2017 and December 30, 2016,

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respectively. As of December 29, 2017, there was also $13.9 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 an increase in operating cash flow of $130 million and $137 million for the nine months ended December 29, 2017, and December 30, 2016, respectively.

Liquidity

As of December 29, 2017, CSRA’s total liquidity was $780 million, consisting of $80 million of cash and cash equivalents and $700 million available under CSRA’s revolving credit facility. Our cash from operations is primarily derived from long-term contracts, some of which require significant investment of cash flows from operating activities during the initial phases of the contracts. We recover these investments over the life of the contract; this recovery 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. Our pension funding obligation represents another potential cash need, depending on asset returns, interest rates and other factors.

In November 2017, we completed our $235 million acquisition for Praxis, which we funded initially, in part, with borrowings under our revolving credit facility. We subsequently repaid these borrowings, and other outstanding borrowings under our revolving credit facility, with proceeds from an increase in our term loan B facility upon amendment of the credit facilities in December 2017. In November, we executed and closed a sale-leaseback transaction of our corporate headquarters property in Falls Church, Virginia. Pursuant to the transaction we received approximately $31 million, net of fees and costs, and recognized a loss of approximately $10 million on sale of the property during the third quarter.

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 would be able to obtain such financing on acceptable terms (or at all) in the future.

Capitalization

At December 29, 2017, CSRA’s ratio of net debt-to-total capitalization was 80.0%, a decrease of 4.6 percentage points from the end of fiscal year 2017. The decrease in the ratio was primarily the result of the increase in equity capital from net income recognized during the first nine months of fiscal year 2018. 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.

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The following table summarizes CSRA’s capitalization ratios as of December 29, 2017 and March 31, 2017.

	As of
(Dollars in millions)	December 29, 2017				March 31, 2017
Total debt(7)		$	2,997			$	2,799
Less: Cash and cash equivalents		80				126
Net debt(8)		$	2,917			$	2,673
Total debt		$	2,997			$	2,799
Equity		651				359
Total capitalization		$	3,648			$	3,158
Debt-to-total capitalization		82.2		%	88.6			%
Net debt-to-total capitalization		80.0		%	84.6			%

(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 differ from 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 understanding 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

Including capitalized lease liabilities, CSRA had $136 million of current maturities of long-term debt and $2.86 billion of long-term debt at December 29, 2017. In March 2016, we executed a series of hedging transactions to manage the interest rate risk related to $1.4 billion of the 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 3—Derivative Instruments to our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q).

In June 2017, we completed an amendment of our credit facilities to reduce our interest rate on, and reallocate unpaid principal balances among portions of, the credit facilities. In December 2017, we completed an additional amendment of our credit facilities, which extended the maturity dates of each of the tranche A2 facility and the revolving credit facility by one year and increased our borrowings under the term loan B facility by $200 million (the proceeds of which were used, in part, to repay in full our outstanding borrowings under the revolving credit facility). See Note 7—Debt to our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q and “Liquidity” in our Annual Report on Form 10-K for information about our credit facilities, as amended, 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. During the first nine months of fiscal year 2018, we paid $122.6 million on our term loan facilities (excluding the payment of $180.6 million of the tranche A1 facility and the payment of $150.0 million of the revolving facility with the proceeds of additional borrowings under the term loan B facility).

We expect to meet our debt servicing obligations and make discretionary investments principally from free cash flow and our revolving credit facility, of which $700 million remained available but undrawn as of December 29, 2017. We do not expect that our debt service payments will adversely affect our available liquidity for short-term working capital and other cash requirements. Our expected liquidity and capital structure may be impacted, however, by discretionary investments and acquisitions that we may pursue. We are currently evaluating plans to refinance certain portions of our credit facilities. While the timing and financial magnitude of these possible actions

39

are currently indeterminable, we expect to be able to manage and adjust our capital structure in the future to meet the Company’s needs.

Equity Transactions

On November 30, 2015, CSRA’s Board of Directors approved a share repurchase program authorizing up to $400 million in 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 under our compensation plans through share repurchases over time, balancing them with debt reduction and other forms of cash deployment.

During the first nine months of fiscal 2018, CSRA repurchased 500,000 shares of common stock through open market purchases for an aggregate consideration of $15.9 million, at an average price of $31.72 per share. As of December 29, 2017, CSRA remained authorized to repurchase $305.1 million of common stock pursuant to the Share Repurchase Program with an expiration date of March 31, 2019.

CSRA has declared a cash dividend of $0.10 per share every quarter since the third quarter of fiscal year 2017. In the opinion of management, CSRA has sufficient liquidity and expects to continue paying quarterly cash dividends, subject to approval by our Board of Directors.

Off Balance Sheet Arrangements

As of December 29, 2017, we did not have any significant 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, revenue, expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Contractual Obligations

CSRA has contractual obligations for long-term debt, capital lease liabilities and other obligations, including our performance guarantees and expiration of stand-by letters of credit. See Note 7—Debt and Note 13—Commitments and Contingencies to our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q for further information about these obligations.

Critical Accounting Policies and 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 to our unaudited Consolidated and Condensed Financial Statements in 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 we make 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 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.

Revenue recognition

Substantially all of our revenue is derived from contracts with departments and agencies of the U.S. government, as well as 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 approximately 23%, 45%, and 32%, respectively, of our revenue in the nine months ended December 29, 2017, compared to 21%, 44%, and 35%, respectively, of our revenue in the nine months ended December 30, 2016.

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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 36% and 38% of our revenue for the nine months ended December 29, 2017 and December 30, 2016, respectively. When changes in estimates of contract sales or costs occur, we make revisions to EACs and reflect changes in the results of operations 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 to our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q for additional information.

Our U.S. government contracts generally contain FAR provisions that enable the customer to terminate a contract for default or for the convenience of the government. At December 29, 2017, 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 financial statements from the acquisition date. See Note 4—Acquisitions and Note 5—Goodwill and Other Intangible Assets to our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q for further information.

Income tax provision and deferred tax assets and liabilities

As discussed above in “Results of Operations- Income Taxes”, the Company’s results for the third quarter of fiscal year 2018 were significantly affected by the recently enacted Tax Act. Significant assumptions and estimates were required by us to determine the provisional amounts of our tax provision, deferred tax assets and deferred tax liabilities. For certain tax effects, we used the guidance provided by the SEC in Staff Accounting Bulletin No. 118 (“SAB 118”). See Note 1—Description of the Business, Basis of Presentation and Recent Accounting Pronouncements and Note 8—Income Taxes for additional 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. As of December 29, 2017 and March 31, 2017, we had $80 million and $126 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 outstanding debt facilities include variable interest rate terms and expose us to financial risk from changes in market interest rates. 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 our exposure related to interest rate movements (See Note 3—Derivative Instrumentsto our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q for further discussion). Net of the benefit from our interest-rate derivatives, a hypothetical 1% increase in interest rates would have increased the interest expense incurred under our credit facilities by approximately $15 million for the first nine months of fiscal year 2018, and likewise decreased our net income and cash flows.

The return on our cash and cash equivalents balance as of December 29, 2017 and March 31, 2017 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”). Our foreign business operations, however, which predominantly provide business processing support services to our U.S. 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 have 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. In the first

41

quarter of fiscal year 2018, we also began to hedge certain of these exposures using forward currency contracts. These mitigation strategies, however, may not be effective to offset currency exchange rate fluctuations (including possible currency devaluations). We estimate that an adverse change of1% in exchange rates would have increased our cost of services denominated in foreign currencies by $0.6 million in the nine months ended December 29, 2017.

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 December 29, 2017. Based on that evaluation, CSRA’s Chief Executive Officer and Chief Financial Officer concluded that, as of December 29, 2017, 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

We have evaluated the changes in our internal control over financial reporting that occurred during the nine months ended December 29, 2017 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 period that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The information required by this Item is set forth in Note 13—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

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 fiscal year ended March 31, 2017.

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 open market transactions, privately negotiated transactions, or other means, and are in compliance with SEC rules 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. See Note 11—Stockholders’ Equity and Accumulated Other Comprehensive Income (Loss) to our unaudited Consolidated and Condensed Financial Statements in this Form 10-Q for further information about the Share Repurchase Program.

The following table presents repurchases of our common stock during the nine months ended December 29, 2017.

Period	(a) Total Number of Shares (or Units) Purchased	(b) Average Price Paid per Share (or Unit) in Period		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Repurchase Plans or Programs (1)	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs (in millions)
April 1, 2017 - April 28, 2017	—	$	—	—	$	—
April 29, 2017 - May 26, 2017	—	—		—	—
May 27, 2017 - June 30, 2017	450,000	31.71		450,000	306.7
July 1, 2017 - July 28, 2017	50,000	31.77		500,000	305.1
July 29, 2017 - August 25, 2017	—	—		—	—
August 26, 2017 - September 29, 2017	—	—		—	—
October 30 - November 27, 2017	—	—		—	—
October 28, 2017 - November 24, 2017	—	—		—	—
November 25 - December 29, 2017	—	—		—	—
Total	500,000	$	31.72	500,000	$	305.1

(1) The Share Repurchase Program, which was authorized by the Board on November 30, 2015, does not obligate CSRA to purchase any shares, and expires on March 31, 2019. As of December 29, 2017, CSRA had repurchased 3,257,448 shares of common stock (at an average price of $29.13 per share) through open market purchases for an

43

aggregate consideration of approximately $94.9 million, and remained authorized to repurchase $305.1 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.

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Item 6. Exhibits

EXHIBIT INDEX

Exhibit Number		Exhibit Description
10.1		Third Amendment to Credit Agreement, dated as of December 29, 2017, by and among CSRA Inc., the guarantors party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., in its capacity as Pro Rata Administrative Agent, Royal Bank of Canada, in its capacity as Term Loan B Administrative Agent, the Incremental Term Loan B Lenders party thereto and the Lenders party thereto, incorporated by reference to Exhibit 10.1 to the current report on Form 8-K, filed on January 2, 2018.
10.2	*#	CSRA 2015 Non-Employee Director Incentive Plan Restricted Stock Unit Agreement
10.3	*#	Executive Officer Employment Separation Policy, effective June 15, 2016
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
	*	Filed herewith
	#	Management contract or compensatory plan or arrangement

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:	February 7, 2018	By:	/s/ William Luebke
		Name:	William Luebke
		Title:	Controller
			(Principal Accounting Officer)

45

EX-10.2

Exhibit 10.2

CSRA INC.

2015 NON-EMPLOYEE DIRECTOR INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

This Restricted Stock Unit Agreement (“Agreement”) is made and entered into as of the date indicated on the signature page hereto (the “Grant Date”) by and between CSRA Inc., a Nevada corporation (the “Company”), and the non-employee director of the Company executing this Agreement (the “Director”).

WHEREAS, pursuant to the Company’s 2015 Non-Employee Director Incentive Plan (the “Plan”), the Company is authorized to grant awards to directors of the Company who are not employees of the Company or any of its subsidiaries;

WHEREAS, such awards may include restricted stock units with respect to shares of the common stock of the Company (the “Common Stock”); and

WHEREAS, the Company desires to grant to the Director, and the Director desires to accept, a restricted stock unit upon the terms and conditions set forth herein, which terms and conditions have been approved by the Board;

NOW, THEREFORE, in consideration of the foregoing recitals and the covenants set forth herein, the parties hereto hereby agree as follows:

1.    Grant of RSUs. The Company hereby grants as of [GRANT DATE] to the Director, and the Director hereby accepts, [# GRANTED] restricted stock units upon the terms and conditions set forth in this Agreement (the “RSUs”). Each RSU represents the right to receive a share of Common Stock upon settlement of the RSU (each, an “RSU Share” and collectively, the “RSU Shares”), subject to the terms and conditions hereof.

2.    Adjustment of RSU Shares. If the outstanding securities of the class then subject to the RSUs are increased, decreased or exchanged for or converted into cash, property and/or a different number or kind of securities, or if cash, property and/or securities are distributed in respect of such outstanding securities, in either case as a result of a reorganization, merger, consolidation, recapitalization, restructuring, reclassification, dividend (other than a regular, quarterly cash dividend) or other distribution, stock split, reverse stock split or the like, or if substantially all of the property and assets of the Company are sold, then, unless the terms of such transaction shall provide otherwise, the Administrator (as defined in the Plan) shall make appropriate and proportionate adjustments, as of the date of such transaction, in the number and type of shares or other securities or cash or other property that are thereafter subject to the RSUs.

3.    Nontransferability of RSUs. Neither the RSUs nor any interest therein may be sold, assigned, conveyed, gifted, pledged, hypothecated or otherwise transferred in any manner other than by will or the laws of descent and distribution.

4.    Plan. The RSUs are granted pursuant to the Plan, as in effect on the Grant Date, and is subject to all the terms and conditions of the Plan, as the same may be amended from time to time; provided, however, that no such amendment shall deprive the Director, without his or her consent, of the RSUs or of any of the Director's rights under this Agreement. The interpretation and construction by the Board of the Plan and this Agreement shall be final and binding upon the Director.

5.    Stockholder Rights. No person or entity shall be entitled to vote, receive dividends or be deemed for any purpose the holder of any of the RSU Shares until the settlement of the RSUs in accordance with the provisions of this Agreement.

6.    Successors. This Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns, on the one hand, and the Director and his or her heirs, beneficiaries, legatees and personal representatives, on the other hand.

7.    Entire Agreement; Amendments and Waivers. This Agreement embodies the entire understanding and agreement of the parties with respect to the subject matter hereof, and no promise, condition, representation or warranty, express or implied, not stated or incorporated by reference herein, shall bind either party hereto. None of the terms and conditions of this Agreement may be amended, modified, waived or canceled except by a writing, signed by the parties hereto specifying such amendment, modification, waiver or cancellation. A waiver by either party at any time of compliance with any of the terms and conditions of this Agreement shall not be considered a modification, cancellation or consent to a future waiver of such terms and conditions or of any preceding or succeeding breach thereof, unless expressly so stated.

8.    Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Nevada applicable to contracts made and performed entirely within such state.

9.    Settlement of RSUs.

(a)    Except as otherwise provided in this Agreement, the Company shall settle the RSUs by delivering the RSU Shares and the Dividend Equivalents (as hereinafter defined) to the Director (or after the Director’s death, to the beneficiary designated by the Director for such purpose) on earlier of (i) the one-year anniversary of the Grant Date, or (ii) the date of the Company’s first Annual Meeting of Stockholders held after the Grant Date. Alternatively, settlement of the RSUs may be deferred until such time as the Director shall have elected pursuant to the Director’s election with respect thereto made on or prior to the later of (i) December 31 of the year preceding the Grant Date or (ii) 30 days after the date upon which the Director first became a director of the Company (but only with respect to the pro-rata portion of the RSUs relating to services to be performed after the election date). For purposes of the preceding sentence, if the Director was a director of Computer Sciences Corporation (“CSC”) immediately prior to the spinoff of the Company from CSC, the Director shall be deemed to have become a director of the Company on the date on which he or she first became a director of CSC. Notwithstanding any other provision in this Agreement to the contrary, if the Director ceases to be a director of the Company before the earlier of the one-year anniversary of the Grant Date or the date of the Company’s first Annual Meeting of Stockholders held after the Grant Date, then the RSUs shall terminate, unsettled, on the Director’s termination date.

(b)    For purposes of this Agreement, the term “Dividend Equivalents” shall mean, with respect to each RSU Share being delivered by the Company upon settlement of the RSUs, an amount in cash equal to the aggregate amount of all regular cash dividends paid on a share of Common Stock during the period between the Grant Date and the date of such settlement.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the Grant Date indicated below.

DIRECTOR _________________________________ [Name] [Acceptance Date] CSRA INC. _________________________________     Name:     Title:

1

EX-10.3

Exhibit 10.3

Policy (PO)

Title:	Executive Officer Employment Separation Policy	PO #:	1076
		Effective Date:	6/15/16
Approver:	John Reing	Rev #:
	Chief Human Resources Officer	Rev Date:

1.    Purpose

The purpose of this policy is to provide an overview of the CSRA provisions that are applicable in the event of the separation of an executive officer.

2.    Requirements

2.1    Executive Officer Identification

Executive officers are defined to include the Chief Executive Officer (CEO) and those Section 16 officers reporting directly to CEO.

2.2.    Executive Officer Severance Plan

2.2.1    Eligibility and Severance Provisions

Executive officers, reporting directly to CEO in active employment status with CSRA, are covered under the Executive Officer Severance Plan in the event that their employment is terminated by CSRA without cause. Executive officers who resign from CSRA or are separated for cause are not eligible for severance benefits. The following provisions apply:

• Severance payment is contingent upon signing a release of claims, within a specified time period, following the separation.

• Non-compete and non-solicitation provisions in the release agreement shall be generally consistent with company standard.

• Severance payments provided to executive officers must be approved by the CEO and the Compensation Committee.

• There may be a six month delay in payments and benefits provided to certain specified employees, as determined under Section 409A of the Internal Revenue Code. Earnings will be credited during any such payment or benefit delay period.

2.2.2    Severance Payment

Executive Officer Severance includes up to twelve (12) months of base salary continuation, Health & Welfare COBRA benefits for up to twelve (12) months, and a pro-rata portion of the EICP earned, paid at target, within thirty (30) days of receiving the fully executed release of claims.

2.3    Senior Management and Designated Key Employees Severance Plan in a Change in Control

2.3.1    Eligibility and Severance Provisions

Section 16 officers reporting directly to the CEO and key employees identified by the CEO are eligible for the Senior Management and Designated Key Employees Severance Plan if the participant either within two years of a change in control transaction closing, voluntarily resigns for good reason, as defined below, or if the participant within three years of a change in control transaction closing is involuntarily separated without cause, excluding reasons of death and disability. The following provisions apply:

• Severance payment is contingent upon signing a release of claims, within a specified time period, following the separation.

• Non-compete and non-solicitation provisions in the release agreement shall be generally consistent with company standard.

• Severance payments provided to executive officers must be approved by the CEO and the Compensation Committee. Severance payments provided to all other participants must be approved by the CEO.

• There may be a six month delay in payments and benefits provided to certain specified employees, as determined under Section 409A of the Internal Revenue Code. Earnings will be credited during any such payment or benefit delay period.

2.3.2    Severance Payment

Senior Management and Designated Key Employees Severance includes a one-time lump sum payment equal to two times the sum of the participant’s then-current annual base salary plus the average of the three most recent annual EICP awards paid (if available) plus H&W COBRA benefits for two years (24 months). Payment will be made within thirty (30) days of receiving a fully executed release of claims.

3.    Exceptions

If any specific provision of this policy directly conflicts with Federal, state, and local laws; regulations; and / or labor agreements, then the relevant law, regulation or labor agreement will supersede that section or provision of this policy, but the remainder of this policy will remain in effect.

Any exception to this policy must be reviewed and approved by CEO and the Compensation Committee.

4.    References

4.1     Definitions

Change in Control Consummation of a change in the ownership of CSRA, a change in effective control of CSRA or a change in the ownership of substantial portion of the assets of CSRA, in each case as defined under Section 409A of the Internal Revenue Code.

Voluntary Resignation for Good Reason A participant’s separation of employment from CSRA is deemed for good reason if it occurs within six months of the following without the participant’s express written consent:

1. A substantial change in the nature, or diminution in the status, of the participant’s duties or position from those in effect immediately prior to the change in control;

2. A reduction by CSRA in the participant’s annual base salary or target total cash in effect on the date of a change in control or in effect thereafter if such compensation has been increased and such increase was approved prior to the change in control.

3. A failure to continue in effect any stock option or other equity based or non-equity based incentive compensation plan in effect immediately prior to the change in control, or a reduction in the participant’s participation in any such plan, unless the participant is afforded the opportunity to participate in an alternative incentive compensation plan of reasonably equivalent value;

4. A failure to provide the participant the same number of paid vacation days per year available prior to the change in control, or any material reduction or the elimination of any material benefit or perquisite enjoyed by the participant immediately prior to the change in control;

5. Any material breach by CSRA of any provision of the severance plans or of any agreement entered into pursuant to the severance plans or any stock or restricted stock agreement;

6. Conduct by CSRA, against the participant’s volition, that would cause the participant to commit fraudulent acts or would expose the participant to criminal liability; and/or

7. Any failure by CSRA to obtain the assumption of the severance plans or any agreement entered into pursuant to the severance plans by any successor or assign of CSRA.

Separation for Cause A termination of employment that may result as a result of the following:

• Fraud, misappropriation, embezzlement or other act of material misconduct against CSRA or any of its affiliates;

• Conviction of a felony involving a crime of moral turpitude;

• Willful violation of any rules or regulations of any government or regulatory body material to the business of CSRA; and/or

• Substantial and willful failure to render services in accordance with the terms of the severance plans (other than as a result of illness, accident or other physical or mental incapacity), provided that (i) a demand for performance of services has been delivered to the participant in writing by or on behalf of the Board at least sixty (60) days prior to separation identifying the manner in which the Board believes that the participant has failed to perform and (ii) the participant has thereafter failed to remedy such failure to perform.

42     Supporting Documents

None

CSRA has the right to suspend, modify, or terminate this policy at any time.

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

1

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.

2

Date: February 7, 2018 /s/ Lawrence B. Prior III     
Name: Lawrence B. Prior III
Title:     President and Chief Executive Officer

3

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

1

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.

2

Date: February 7, 2018 /s/ David F. Keffer    
Name: David F. Keffer
Title:     Chief Financial Officer

3

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 December 29, 2017 (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: February 7, 2018 /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 December 29, 2017 (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: February 7, 2018 /s/ David F. Keffer     
Name: David F. Keffer
Title:     Chief Financial Officer

XML

Document and Entity Information - shares	9 Months Ended
	Dec. 29, 2017	Feb. 02, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	CSRA INC.
Entity Central Index Key	0001646383
Current Fiscal Year End Date	--03-30
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Dec. 29, 2017
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		163,923,601

XML

CONSOLIDATED AND CONDENSED BALANCE SHEETS (unaudited) - USD ($) $ in Millions	Dec. 29, 2017	Mar. 31, 2017
Current assets
Cash and cash equivalents	$ 80	$ 126
Receivables, net of allowance for doubtful accounts of $26 and $24, respectively	945	748
Prepaid expenses and other current assets	119	126
Total current assets	1,144	1,000
Intangible and other assets
Goodwill	2,522	2,335
Customer-related and other intangible assets, net of accumulated amortization of $284 and $244, respectively	854	775
Software, net of accumulated amortization of $103 and $89, respectively	72	81
Other assets	86	87
Total intangible and other assets	3,534	3,278
Property and equipment, net of accumulated depreciation of $669 and $694, respectively	622	610
Total assets	5,300	4,888
Current liabilities
Accounts payable	120	187
Accrued payroll and related costs	212	181
Accrued expenses and other current liabilities	611	487
Current capital lease liability	50	44
Current maturities of long-term debt	86	72
Dividends payable	17	21
Total current liabilities	1,096	992
Long-term debt, net of current maturities	2,651	2,511
Noncurrent capital lease liability	210	172
Deferred income tax liabilities	170	272
Other long-term liabilities	522	582
Commitments and contingent liabilities (Note 13)
Equity
Common stock, $0.001 par value, 750,000 shares authorized, 164,350 and 163,570 shares issued, and 163,827 and 163,216 shares outstanding, respectively	0	0
Additional paid-in capital	141	134
Accumulated earnings	456	165
Accumulated other comprehensive income	28	31
Total stockholders’ equity	625	330
Noncontrolling interests	26	29
Total equity	651	359
Total liabilities and equity	$ 5,300	$ 4,888

XML

CONSOLIDATED AND CONDENSED BALANCE SHEETS (unaudited) (Parenthetical) - USD ($) $ in Millions	Dec. 29, 2017	Mar. 31, 2017
Allowance for doubtful accounts	$ 26	$ 24
Finite-lived intangible assets, accumulated amortization	387	333
Plant, property and equipment, accumulated depreciation	$ 669	$ 694
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)	164,350,000	163,570,000
Common stock - shares outstanding (in shares)	163,827,000	163,216,000
Customer-related and other intangible assets
Finite-lived intangible assets, accumulated amortization	$ 284	$ 244
Software
Finite-lived intangible assets, accumulated amortization	$ 103	$ 89

XML

CONSOLIDATED AND CONDENSED STATEMENTS OF OPERATIONS (unaudited) - USD ($) shares in Thousands, $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016
Income Statement [Abstract]
Total revenue	$ 1,309	$ 1,222	$ 3,810	$ 3,739
Cost of services	1,063	1,000	3,064	3,023
Selling, general and administrative expenses	56	52	156	163
Acquisition, integration, and other costs	3	5	17	18
Depreciation and amortization	59	61	175	189
Operating expenses	1,181	1,118	3,412	3,393
Operating income	128	104	398	346
Net benefit of defined benefit plans	20	137	61	186
Interest expense, net	(29)	(36)	(88)	(95)
Other expense, net	(2)	(1)	(5)	(3)
Income before income taxes	117	204	366	434
Income tax (benefit) expense	(75)	76	16	158
Net income	192	128	350	276
Less: noncontrolling interests	4	2	9	9
Net income attributable to CSRA common stockholders	$ 188	$ 126	$ 341	$ 267
Earnings per common share:
Basic (in USD per share)	$ 1.15	$ 0.77	$ 2.08	$ 1.63
Diluted (in USD per share)	$ 1.14	$ 0.76	$ 2.07	$ 1.62
Common share information (weighted averages, in thousands):
Common shares outstanding - basic (in shares)	163,780	163,325	163,570	163,413
Dilutive effect of stock options and equity awards (in shares)	1,364	1,563	1,490	1,388
Common shares outstanding - diluted (in shares)	165,144	164,888	165,060	164,801
Cash dividend per common share (in USD per share)	$ 0.10	$ 0.10	$ 0.30	$ 0.30

XML

CONSOLIDATED AND CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016
Statement of Comprehensive Income [Abstract]
Net income	$ 192	$ 128	$ 350	$ 276
Other comprehensive income (loss), net of taxes, related to:
Amortization of prior service cost	(3)	(2)	(6)	(6)
Foreign currency translation adjustments	0	1	0	1
Unrealized gain on derivatives	5	18	3	15
Other comprehensive income (loss), net of taxes	2	17	(3)	10
Comprehensive income	194	145	347	286
Less: comprehensive income attributable to noncontrolling interest, net of taxes	4	2	9	9
Comprehensive income attributable to CSRA common stockholders	$ 190	$ 143	$ 338	$ 277

XML

CONSOLIDATED AND CONDENSED STATEMENTS OF CASH FLOWS (unaudited) - USD ($) $ in Millions	9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016
Cash flows from operating activities:
Net income	$ 350	$ 276
Adjustments to reconcile net income to cash provided by operating activities:
Depreciation and amortization	175	191
Pension settlement and actuarial gains	0	(114)
Stock based compensation	11	25
Excess tax benefit from stock based compensation	(2)	(3)
Deferred income taxes	(102)	0
Net loss on dispositions of business and assets	(10)	(2)
Other non-cash items, net	14	1
Changes in assets and liabilities, net of acquisitions and dispositions:
(Increase) decrease in assets	(91)	26
Decrease in defined benefit plan liability	(59)	(68)
Increase in other liabilities	7	98
Other operating activities, net	3	4
Cash provided by operating activities	316	438
Cash flows used in investing activities:
Purchases of property and equipment	(94)	(98)
Software purchased and developed	(11)	(16)
Payments for acquisitions, net of cash acquired	(335)	0
Proceeds from disposals of assets	36	9
Other investing activities, net	23	(13)
Cash used in investing activities	(381)	(118)
Cash flows provided by (used in) financing activities:
Borrowing on Revolving Credit Facility	220	0
Repayments of Revolving Credit Facility	(220)	(50)
Borrowings of long term debt	384	234
Payments of long-term debt	(233)	(379)
Debt issuance cost	(4)	(4)
Proceeds from stock options and other common stock activity, net	3	2
Repurchase of common stock	(16)	(29)
Dividends paid	(50)	(51)
Payments on lease liability	(30)	(32)
Payments to noncontrolling interest	(12)	(8)
Other financing activities, net	(23)	29
Cash provided by (used in) financing activities	19	(288)
Net (decrease) increase in cash and cash equivalents	(46)	32
Cash and cash equivalents at beginning of period	126	130
Cash and cash equivalents at end of period	80	162
Supplemental cash flow information:
Cash paid for taxes	99	61
Cash paid for interest	81	79
Capital expenditures in accounts payable and other liabilities	18	10
Capital expenditures through capital lease obligations	79	85
Non-cash transactions related to financing activities	0	32
Deferred tax liability	$ 103	$ 55

XML

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

9 Months Ended

Dec. 29, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

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

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

Description of the Business

CSRA Inc. (“CSRA” or the “Company”), a provider of IT and professional services, delivers IT, mission, and operations-related services across the U.S. government, including to the Department of Defense (“DoD”), Department of Homeland Security (“DHS”), the intelligence community, civil and healthcare agencies, and to state and local government agencies through two business segments: (1) Defense and Intelligence, and (2) Civil.

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 (“SEC”), and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2017. The interim period unaudited Consolidated and Condensed Financial Statements are presented as described below.

In May 2017, CSRA executed an agreement for the acquisition of NES Associates, LLC (“NES”), a consulting firm that provides IT services to the U.S. government. On July 3, 2017, CSRA completed its acquisition of NES, which resulted in NES becoming a wholly owned subsidiary of CSRA. In October 2017, CSRA announced that it had executed an agreement to acquire Praxis Engineering Technologies LLC (”Praxis”), a consulting and solutions firm dedicated to the practical application of software and systems engineering technologies. On November 17, 2017, CSRA completed the acquisition of Praxis, which resulted in Praxis becoming a wholly owned subsidiary of CSRA. See Note 4—Acquisitions for additional information.

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.

CSRA reports its results based on a fiscal year convention comprised of 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.

Contract accounting requires significant judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Due to the size and nature of many of CSRA’s contracts, developing total revenue and costs at completion estimates requires significant judgment. Contract costs include direct labor and billable expenses, allocation of allowable indirect costs, and warranty obligations. CSRA recognizes revenue and billable expenses from these transactions on a gross basis because it is the primary obligor on contracts with customers. The contracts that required estimates-at-completion (“EACs”) using the percentage-of-completion method were approximately 36%, and 38% of CSRA’s revenue for the nine months ended December 29, 2017, and December 30, 2016, respectively.

CSRA’s income before income taxes and noncontrolling interest for the three and nine months ended December 29, 2017 and December 30, 2016 included the following gross favorable and unfavorable adjustments due to changes in estimated profitability on fixed price contracts accounted for under the percentage-of-completion method.

	Three Months Ended						Nine Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Gross favorable	$	21		$	13		$	52		$	40
Gross unfavorable	(5		)	(8		)	(16		)	(24		)
Total net adjustments, before taxes and noncontrolling interests	$	16		$	5		$	36		$	16

Unbilled recoverable amounts under contracts in progress do not have an allowance for credit losses and, therefore, any adjustments to these amounts related to credit quality are accounted for as a reduction of revenue. Unbilled 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 $17.3 million and $15.6 million as of December 29, 2017 and March 31, 2017, respectively.

Depreciation expense was $38.0 million and $33.5 million for the three months ended December 29, 2017 and December 30, 2016, respectively. Depreciation expense was $111.1 million and $96.8 million for the nine months ended December 29, 2017 and December 30, 2016, respectively.

Earnings Per Share

The computation of diluted earnings per share excludes stock options, whose effect, if included, would be anti-dilutive. The number of shares related to such stock awards was 274,785 and 283,643 for the three and nine months ended December 29, 2017, respectively.

Use of Estimates

GAAP requires management to make estimates and assumptions that affect certain amounts reported in the unaudited Consolidated and Condensed Financial Statements and accompanying notes. These estimates are based on management’s best knowledge of historical experience, current events, and other assumptions that management considers reasonable. Actual results could differ from those estimates.

Amounts subject to significant judgment and/or estimates include, but are not limited to: determining the fair values of assets acquired and liabilities assumed, derivative instruments and non-financial assets such as internally developed software for internal use; costs to complete fixed-price contracts, certain deferred costs, collectability of receivables, deferred tax assets and liabilities, reserves for tax benefits, including valuation allowances on deferred tax assets, loss accruals for litigation, and inputs used for computing share-based compensation.

Reclassifications

Historically, the Company recognized separation and merger costs in connection with our separation from Computer Sciences Corporation (now known as DXC Technology) (“CSC”) and our subsequent merger with SRA International Inc. (“SRA”) as a separate operating expense. In the second quarter of fiscal year 2018, CSRA began to combine these costs with separately identifiable acquisition costs and fees paid to third parties for completed acquisitions as well as integration, transition, and other costs for integrating the businesses. These expenses are presented as acquisition, integration, and other costs on the unaudited Consolidated and Condensed Statements of Operations. Prior periods have been revised to conform to the current period presentation.

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 hierarchy that prioritizes inputs 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 techniques where one or more significant inputs are unobservable.

Assets and liabilities valued using the fair value measurement guidance on a recurring basis include: pension assets and derivative instruments (consisting of interest rate swap contracts, total return swaps, and foreign currency forward exchange contracts). Pension assets are valued using model based pricing methods that use observable market data and are, therefore, 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.

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

The Company’s financial instruments include cash, trade receivables, vendor payables, derivative financial instruments, and debt. As of December 29, 2017, 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 $2.7 billion and $2.5 billion at December 29, 2017 and March 31, 2017, respectively, and approximated its fair value on those dates based on recent trading activity, which is classified as Level 2 inputs. The fair value of interest rate swaps is estimated based on valuation models that use observable interest rate yield curves, which are considered Level 2 inputs. There were no transfers between levels of the fair value hierarchy during the three and nine months ended December 29, 2017 or December 30, 2016.

Recent Accounting Pronouncements

Newly-Adopted Accounting Standards

On December 22, 2017, the Tax Cuts and Jobs Acts (the “Tax Act”) was enacted into law. The Tax Act includes numerous significant changes to the U.S. Corporate tax laws such as: the reduction of the statutory tax rate from 35% to 21%; repeal of the corporate alternative minimum tax; changes to business tax exclusions, deductions and credits; and significant revision of international tax provisions. Shortly thereafter, the Securities and Exchange Commission issued guidance for accounting for taxes in Staff Accounting Bulletin No. 118 (“SAB 118”) to provide guidance on the application of accounting for income taxes (under ASC 740) in cases where the calculation of certain effects of the changes in tax laws or tax rates are incomplete upon issuance of an entity's financial statements for the reporting period in which the Tax Act is enacted. Under SAB 118, in the financial reporting period during which the Tax Act is enacted, the income tax effects of the Tax Act (for those changes where calculations are incomplete) would be reported as provisional based on a reasonable estimate, and are to be subject to adjustment during a "measurement period" until the accounting under guidance in ASC 740 is complete. When provisional amounts are used, supplemental disclosures should be provided, such as the reasons for the incomplete accounting and other information relevant to why the Company was not able to complete the accounting in a timely manner. CSRA has used the guidance in SAB 118 when determining the impact of the Tax Act on the Company’s consolidated financial statements. See Note 8—Income Taxes for further information.

In March 2017, the FASB issued ASU No. 2017-07-Compensation- Retirement Benefits (Topic 715) (“ASU 2017-07”), which changes the presentation of net periodic pension and post-retirement costs. The guidance requires that service costs associated with pension and post-retirement plans be presented in the same financial statement line item as the compensation cost for the related employees. All other net benefit costs must be reported separately from income from operations (if presented). The standard is effective for the first interim period within annual periods beginning after December 15, 2017, with early adoption permitted. Since CSRA’s defined benefit pension and post-retirement plans (the “Plans”) are frozen, historical service costs consist of administrative expenses. CSRA chose to early adopt this standard during the first quarter of the fiscal year ending March 30, 2018. As a result, net benefit costs of the Plans have been presented as a separate line item on the Company’s statements of operations. The prior periods have been revised to conform to the current period presentation.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). Its main provisions are: (a) removing step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation; and (b) eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. ASU 2017-04 is effective for all public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted on or after January 1, 2017. The Company adopted ASU 2017-04 on July 1, 2017, which coincided with its annual assessment for the impairment of goodwill. The adoption had no impact on CSRA’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 ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements and some cost guidance included in the Accounting Standards Codification (ASC). Upon adoption, ASU 2014-09 will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements.

The new standard requires us to identify contractual performance obligations and determine when revenue should be recognized. This requirement and other provisions of the standard could change the method or timing of revenue recognition for our firm-fixed-price and, to a lesser extent, cost-reimbursable-plus-fee contract portfolio. The Company’s implementation project team is taking an integrated approach to analyzing the standard’s impact on our contract portfolio including a review of accounting policies and practices, evaluating the effects of the requirements on our contracts and business practices, and assessing the need for system and internal control changes or enhancements. These activities and the Company’s evaluation of the quantitative effect of adoption will continue to the end of the fiscal year.

The Company identified likely effects related to the treatment of option years as discrete contracts and the grouping of promised goods and services into performance obligations for the purpose of recognizing revenue under the new standard. As a result, gross favorable and unfavorable adjustments due to changes in contract estimates are anticipated to result in smaller revenue adjustments than before adoption of the ASU. Anticipated losses on contracts will continue to be recognized in the period in which they are identified.

In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, resulting in a one-year deferral of the effective date of ASU 2014-09. The new standard may be adopted either retrospectively or on a modified retrospective basis whereby it 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 the beginning balance of retained earnings at the effective date. The Company plans to adopt the standard on March 31, 2018 (the first day of fiscal year 2019), and to implement the standard using the modified retrospective method, whereby the cumulative effect will be recognized at the date of adoption.

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 also requires expanded qualitative and quantitative disclosures to provide financial statement users with additional information on the amount, timing, and uncertainty of cash flows arising from CSRA leases. The standard must be adopted using the modified retrospective approach, and 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 its policies, procedures, business practices, including internal controls, and financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230)(“ASU 2016-18”). This guidance requires the inclusion of restricted cash and restricted cash-equivalent balances in the statement of cash flows. The ASU does not define "restricted cash" and "restricted cash equivalents." The Company will be required to include its restricted cash balance (currently classified within Prepaid expenses and other current assets) in the Cash and cash equivalents balance presented in the statement of cash flows using a retrospective transition method for each period presented. A reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. An entity with a material balance of amounts generally described as restricted cash and restricted cash equivalents must also discuss the nature of the restrictions. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption, including during an interim period, is permitted. The Company has not yet determined an implementation date for this ASU.

In August 2017, the FASB issued ASU No. 2017-12, Derivativesand Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which is intended to improve the transparency and understandability of information conveyed to financial statements users about an entity’s risk management activities and reduce the complexity and simplify the application of hedge accounting by companies. The impact of adopting this standard on CSRA’s financial position and results of operations is not expected to be material, but the Company will continue to evaluate until implementation. The standard is effective for fiscal years beginning after December 15, 2018 and interim period within those fiscal years for public entities.

Other recently issued ASUs effective after December 29, 2017 are not expected to have a material effect on CSRA’s financial statements.

XML

Sale of Receivables

9 Months Ended

Dec. 29, 2017

Transfers and Servicing [Abstract]

Sale of Receivables

Note 2—Sale of Receivables

CSRA is the seller of certain accounts receivable under a Master Accounts Receivable Purchase Agreement (the “Purchase Agreement”) with The Bank of Tokyo-Mitsubishi UFJ, Ltd., The Bank of Nova Scotia, and Mizuho Bank, Ltd., each as Purchaser, for the continuous non-recourse sale of CSRA’s eligible trade receivables. On August 8, 2017, the term of the Purchase Agreement under which the Company sells certain of its accounts receivable was extended for one year, to August 7, 2018.

Under the Purchase Agreement, CSRA sells eligible receivables, including billed receivables and certain unbilled receivables arising from cost plus fixed fee (“CPFF”) and time and materials (“T&M”) contracts, up to $450.0 million outstanding at any time. CSRA has no retained interests in the sold receivables and only performs collection and administrative functions for the Purchaser for a servicing fee.

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 related liability was recognized at either December 29, 2017 or March 31, 2017.

We have amended the Purchase Agreement periodically to broaden the eligibility of receivables for sale under it. In the period when the receivables become eligible for sale, the proceeds from such sales will increase operating cash flow. The table below provides receivable sales activity, including initial sales of newly eligible receivables during the periods presented.

	Three Months Ended				Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		December 29, 2017		December 30, 2016
Sales of billed receivables	$	470	$	545	$	1,322	$	1,482
Sales of unbilled receivables	329		294		940		850
Total sales of receivables	$	799	$	839	$	2,262	$	2,332
Collections of sold receivables	$	680	$	790	$	2,127	$	2,192
Operating cash flow effect, net of collections and fees from sales	118		47		130		137

As of December 29, 2017 and March 31, 2017, there was $13.9 million and $37.0 million, respectively, of cash collected by CSRA, but not remitted to purchasers, which represents restricted cash and is included within Prepaid expenses and other current assets on our unaudited Consolidated and Condensed Balance Sheets. CSRA incurred purchase discount and administrative fees of $4.5 million and $2.7 million for the nine months ended December 29, 2017 and December 30, 2016, respectively. These fees were recorded within Other expense, net in the unaudited Consolidated and Condensed Statements of Operations.

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 the U.S. government 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

9 Months Ended

Dec. 29, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments

Note 3—Derivative Instruments

Derivatives Designated for Hedge Accounting

Interest-rate swaps

The Company uses derivative financial instruments to manage interest rate risk related to its Term Loan A Facilities (as defined in Note 7—Debt, below). 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 on Term Loan Facilities (as defined in Note 7—Debt, below) that have variable index-based interest rates. To accomplish these objectives, the Company uses pay-fixed interest rate swaps as part of its interest rate risk management strategy. As of both December 29, 2017 and March 31, 2017, the Company had outstanding pay-fixed interest rate derivatives with a notional value of $1.4 billion, which were designated as a cash flow hedge of interest rate risk. The swap positions consist of a $1.1 billion notional swap agreement maturing in November 2020 and $300 million in aggregate notional swap agreements maturing in March 2018.

Foreign Currency Forward Exchange Contracts

The Company transacts business in various foreign currencies, which subjects its cash flows and earnings to exposure related to changes in foreign currency exchange rates. The exposure arises primarily from purchases from or sales to third parties. Foreign currency forward exchange contracts provide for the purchase or sale of foreign currencies at specified future dates at specified exchange rates, and are used to offset changes in the fair value of forecasted cash flows related to transactions denominated in foreign currencies. During fiscal year 2018, the Company began hedging certain of these forecasted cash flows. As of December 29, 2017, the Company had outstanding foreign currency forward exchange contracts with notional amounts totaling $11.2 million. Neither the fair value of these derivatives at December 29, 2017 nor the gain or loss reclassified into earnings from AOCI during the nine months ended December 29, 2017 was significant. We do not expect amounts that will be reclassified into earnings within the next twelve months to be significant. The notional values consist primarily of contracts for the Mexican peso, Columbian peso, and Canadian dollar, and are stated in U.S. dollar equivalents.

Fair Value of Derivative Instruments

The fair values of derivative instruments are presented on a gross basis as none of the Company’s derivative contracts are subject to master netting arrangements. The fair value of the Company’s derivative financial instruments was an asset of $22.2 million and $18.2 million as of December 29, 2017 and March 31, 2017, 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. For net asset positions, the current portion is included in Prepaid expenses and other current assets and the long-term portion is included in Other assets in the unaudited Consolidated and Condensed Balance Sheets. There was no significant impact to the Company’s earnings related to the ineffective portion of any hedging instruments during either the nine months ended December 29, 2017 or December 30, 2016. Cash flows associated with derivative contracts are recorded in operating activities in the unaudited Consolidated and Condensed Statements of Cash Flows.

Under applicable agreements relating to the Company’s interest rate swaps, a counterparty could declare the Company to be in default on its derivative obligations if repayment of the underlying indebtedness is accelerated by the lender due to the Company’s default.

Concentrations of Risk

The Company is subject to counterparty risk in connection with its 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 seeking to enter into agreements with credit-worthy counterparties. As of both December 29, 2017 and March 31, 2017, there was one interest rate swap counterparty with greater than a 10% concentration of our total exposure.

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Acquisitions

9 Months Ended

Dec. 29, 2017

Business Combinations [Abstract]

Business Combination Disclosure [Text Block]

Note 4—Acquisitions

Fiscal Year 2018 Acquisitions

On July 3, 2017, CSRA acquired NES for a base price of $105.0 million, less $0.9 million of working capital adjustments. The consideration consisted of $100.9 million in cash and $3.2 million deposited in escrow on behalf of the seller. CSRA recorded the assets acquired and liabilities assumed at their estimated fair value, and recorded the difference between the fair value of the net assets acquired and the purchase consideration as goodwill. See Note 5—Goodwill and Other Intangible Assets for further discussion of the measurement considerations for acquired intangible assets.

The following table presents the estimated fair values of assets acquired and liabilities assumed in our acquisition of NES as of July 3, 2017:

Preliminary allocation (in millions):	Amount
Cash, accounts receivable and other current assets	$	28
Property, equipment and other long-term assets	4
Intangibles—customer relationships, backlog and other intangibles assets	25
Accounts payable and other current liabilities	(15		)
Total identified net assets acquired	42
Goodwill	62
Total purchase consideration and liabilities paid at closing	$	104

The Company provisionally recorded the assets acquired and liabilities assumed of NES at their estimated fair values. As of December 29, 2017, the Company had not finalized the determination of fair values associated with NES’s current assets and liabilities but expects to do so by the first quarter of fiscal year 2019.

On November 17, 2017, CSRA acquired Praxis for $235 million in cash, subject to closing adjustments. Praxis is a consulting and solutions firm dedicated to the practical application of software and systems engineering technologies to the U.S. government.

The following table presents the estimated fair values of assets acquired and liabilities assumed in our acquisition of Praxis as of November 17, 2017:

Preliminary allocation (in millions):	Amount
Cash, accounts receivable and other current assets	$	49
Property, equipment and other long-term assets	2
Intangibles—customer relationships, backlog and other intangibles assets	95
Accounts payable and other current liabilities	(36		)
Total identified net assets acquired	110
Goodwill	125
Total purchase consideration and liabilities paid at closing	$	235

Due to the recency of the Praxis acquisition, the preliminary purchase price allocation was recorded on a provisional basis and is subject to change as the Company completes its analysis of the fair value at the date of the transaction, which could have a material impact.

Goodwill associated with the NES and Praxis acquisitions is tax-deductible. Pro forma financial information for the NES and Praxis acquisitions has not been presented as the revenue and operating income of NES and Praxis included in the Company’s unaudited Consolidated and Condensed Statement of Operations for the period, on a combined basis, was not material the Company’s consolidated results.

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Goodwill and Other Intangible Assets

9 Months Ended

Dec. 29, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 5—Goodwill and Other Intangible Assets

In connection with acquisitions of other businesses, CSRA recognized goodwill and other intangible assets, which includes customer relationships, backlog, and contract-related intangibles. In addition, the Company records acquired and developed software technology as an intangible asset.

Goodwill

Goodwill is allocated to each reportable segment based on the relative fair value of net assets acquired. The following table summarizes the changes in the carrying amount of goodwill by segment for the nine months ended December 29, 2017:

(Dollars in millions)	Defense and Intelligence		Civil		Total
Balance as of March 31, 2017	$	815	$	1,520	$	2,335
Acquisition of NES	62		—		62
Acquisition of Praxis	125		—		125
Balance as of December 29, 2017	$	1,002	$	1,520	$	2,522

During the nine months ended December 30, 2016, we made adjustments related to the acquisition of SRA, which resulted in a $2.6 million increase in goodwill, $0.3 million of which related to the Defense and Intelligence segment and $2.3 million to the Civil segment.

Testing for Goodwill Impairment

The Company tests for impairment annually on 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. At the end of each annual and quarterly period, CSRA determines if any such events or changes occurred that require goodwill to be tested for impairment.

On July 1, 2017, the Company performed its annual test of impairment and concluded qualitatively that the fair value of each reporting unit significantly exceeded its carrying value. As of December 29, 2017, CSRA determined there were no indicators that required management to perform an interim goodwill impairment assessment test. There were no accumulated impairment losses at either December 29, 2017 or March 31, 2017.

Other Intangible Assets

Other intangible assets consist primarily of customer relationships, backlog, and technology. Acquired intangible assets have been recorded at their fair value using various discounted cash flow valuation techniques that 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 assumptions about the assumptions market participants would use in pricing an asset on a non-recurring basis.

In connection with the acquisitions of NES and Praxis, the Company identified $24.8 million and $94.5 million, respectively, of intangible assets, representing customer relationships, backlog, and contract intangibles. The fair value measurements of these intangibles were primarily based on significant inputs not observable in the market and represent a Level 3 measurement. The income approach was primarily used to value intangible assets; this approach indicates value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flow is discounted at a rate of return that reflects the time value of money.

A summary of amortizing intangible assets, including preliminary fair values of those recorded in the NES and Praxis acquisitions, are:

	As of
	December 29, 2017
(Dollars in millions)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Acquisition-related intangibles:
Customer-related intangibles	$	1,064	$	(214	)	$	850
Backlog	67		(66		)	1
Other intangible assets	7		(4		)	3
Subtotal-acquisition-related intangibles:	1,138		(284		)	854
Software	175		(103		)	72
Total intangible assets	$	1,313	$	(387	)	$	926

	As of
	March 31, 2017
(Dollars in millions)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Acquisition-related intangibles:
Customer-related intangibles	$	948	$	(175	)	$	773
Backlog	65		(65		)	—
Other intangible assets	6		(4		)	2
Subtotal-acquisition-related intangibles:	1,019		(244		)	775
Software	170		(89		)	81
Total intangible assets	$	1,189	$	(333	)	$	856

Customer-related intangibles, backlog, and software are amortized to expense. Amortization expense for the three and nine months ended December 29, 2017 was $21.0 million and $63.8 million, respectively, compared to $26.8 million and $91.8 million, respectively, for the three and nine months ended December 30, 2016.

As of December 29, 2017, estimated amortization for the remaining three months of fiscal year 2018 is $24.1 million; and for each of fiscal years 2019, 2020, 2021, and 2022 is $92.7 million, $85.8 million, $77.2 million, and $70.3 million, respectively.

Purchased and internally developed software for external and internal use, net of accumulated amortization, consisted of:

	As of
(Dollars in millions)	December 29, 2017		March 31, 2017
Purchased software	$	67	$	73
Internally developed software	5		8
Total software	$	72	$	81

Amortization expense related to purchased software for the three and nine months ended December 29, 2017 was $5.9 million, and $17.8 million, respectively, compared to the three and nine months ended December 30, 2016 of $3.5 million and $10.4 million, respectively. Amortization expense related to internally developed software for the three and nine months ended December 29, 2017 was $0.0 million, and $5.6 million, respectively, compared to the three and nine months ended December 30, 2016 of $0.5 million and $1.4 million, respectively.

As of December 29, 2017, estimated amortization related to software for the remaining three months of fiscal year 2018 is $5.5 million; and for each of the fiscal years 2019, 2020, 2021, and 2022 and thereafter is $21.7 million, $19.0 million, $14.0 million, and $12.0 million, respectively.

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Accrued Expenses and Other Current Liabilities

9 Months Ended

Dec. 29, 2017

Payables and Accruals [Abstract]

Accounts Expenses and Other Current Liabilities

Note 6—Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following:

	As of
(Dollars in millions)	December 29, 2017		March 31, 2017
Accrued contract costs	$	318	$	239
Deferred revenue	160		153
Accrued expenses	109		81
Other	24		14
Total	$	611	$	487

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Debt

9 Months Ended

Dec. 29, 2017

Debt Disclosure [Abstract]

Debt

Note 7—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 December 29, 2017 and March 31, 2017.

	December 29, 2017				March 31, 2017
(Dollars in millions)	Interest Rate(1)	Outstanding Balance			Interest Rate(1)	Outstanding Balance
Revolving Credit Facility, due November 2022	2.98% - 3.24%	$	—		2.18% - 2.20%	$	—
Tranche A1 Facility, due November 2019	2.61% - 2.98%	389			2.06% - 2.41%	570
Tranche A2 Facility, due November 2022	2.73% - 3.1%	1,528			2.18% - 2.53%	1,580
Term Loan B Facility, due November 2023	3.16% - 3.55%	849			3.28% - 3.75%	466
Capitalized lease liability	2.35% - 13.77%	260			2.35% - 15.09%	216
Total debt		3,026				2,832
Less: unamortized debt issuance costs		(29		)		(33		)
Less: current portion of long-term debt and capitalized lease liability		(136		)		(116		)
Total long-term debt, net of current maturities		$	2,861			$	2,683
(1) Represents the range of the lowest and highest interest rate during the period for each facility. Capitalized lease rates are the lowest and highest rates among all leases outstanding during the period. The December 29, 2017 column represents the range during the nine month period then ended and the March 31, 2017 column represents the range during the fiscal year then ended.

June Credit Agreement Amendments

On June 15, 2017, the Company entered into a Second Amendment to the Credit Agreement (the “Second Amendment”) among the Company, the guarantors party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd, as pro-rata administrative agent, Royal Bank of Canada, as term loan B administrative agent, certain replacement and incremental term loan B lenders and the other lenders party thereto. Pursuant to the Second Amendment, the credit facilities were amended to provide for, among other things:

(a) a reduction of 0.5% in the interest rate margin applicable to the Term Loan B Facility (as defined under the Second Amendment of the Credit Agreement), to LIBOR plus 2.00% on Eurocurrency Rate Advances;

(b) an increase of $183.7 million in the unpaid principal balance of the Term Loan B Facility to a total of $650.0 million; and

(c) quarterly repayments of $0.5 million commencing September 30, 2017 through December 31, 2022 and quarterly repayments thereafter of $2.4 million (subject to reduction for any mandatory or voluntary prepayments) until the maturity date of the Term Loan B Facility.

The additional borrowings under the Term Loan B Facility were immediately applied to repay $180.6 million of the unpaid principal balance of the Tranche A1 Facility; to pay accrued and unpaid interest on amounts repaid on the Tranche A1 Facility and on the Term Loan B Facility; and to pay fees and expenses incurred in connection with the transaction. The Company wrote-off $1.7 million of deferred financing fees related to the portion of the loans deemed extinguished, which are recorded in interest expense; and recorded an additional $1.5 million of deferred financing costs related to fees paid in connection with the Second Amendment.

December Credit Agreement Amendments

On December 29, 2017, the Company entered into a Third Amendment to Credit Agreement (the “Third Amendment”) among the Company, the guarantors party thereto, The Bank of Tokyo-Mitsubishi UFJ, Ltd., as pro rata administrative agent, Royal Bank of Canada, as term loan B administrative agent, certain incremental term loan B lenders, and the other lenders party thereto. Pursuant to the Third Amendment, the credit facilities were amended to provide for, among other things:

(a) an increase of $200.0 million in the unpaid principal balance of the Term Loan B Facility to a total of $849.0 million;

(b) an extension of each of the respective maturity dates of the Revolving Credit Facility and the Tranche A2 Facility by one year; and

(c) quarterly repayments with respect to the Term Loan B facility of $1 million commencing March 31, 2018 through December 31, 2022 and quarterly repayments thereafter of $3.25 million until the maturity date of the Term Loan B Facility, subject to reductions as a result of the application of voluntary or mandatory prepayments made by the Company.

The additional borrowings under the Term Loan B Facility were immediately applied to repay in full the aggregate principal amount of advances outstanding under the Revolving Credit Facility of $150 million and to pay fees and expenses incurred in connection with the Third Amendment.

During the first quarter of fiscal year 2018, the Company made a mandatory repayment of $10.8 million on its Term Loan Facilities. On June 30, 2017, the Company drew $55.0 million under its Revolving Credit Facility in order to fund in part the settlement of its purchase of NES in July 2017. In September 2017, the Company made a mandatory principal repayment of $20.9 million on the Term Loan Facilities. In November 2017, the Company drew an additional $165 million under its Revolving Credit Facility in order to fund in part the settlement of its purchase of Praxis. In December 2017, the Company made a mandatory principal repayment of $20.9 million on the Term Loan Facilities, and voluntarily paid off $70.0 million of its outstanding Revolving Credit Facility. The repayments noted in this paragraph are separate from, and in addition to, the application of the proceeds of the increased borrowings under the Term Loan B Facility in June and December 2017, as discussed above.

Interest expense consisted of:

	Three Months Ended				Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		December 29, 2017		December 30, 2016
Contractual interest -Revolving and Term Loan Facilities	$	22	$	18	$	62	$	56
Amortization of debt issuance costs	2		2		6		8
Interest on derivatives and other	5		8		18		23
Loss on debt extinguishment	—		8		2		8
Total interest expense	$	29	$	36	$	88	$	95

CSRA’s costs incurred in connection with the issuance of its Term Loan Facilities 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.

Expected maturities of long-term debt, excluding future minimum capital lease payments are as follows:

(Dollars in millions)	Amount
Fiscal year:
Fourth quarter of fiscal year 2018	$	21
2019	85
2020	474
2021	86
2022	86
2023	1,188
Thereafter	826
Total	$	2,766

CSRA’s credit 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 December 29, 2017.

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Income Taxes

9 Months Ended

Dec. 29, 2017

Income Tax Disclosure [Abstract]

Income Taxes

Note 8—Income Taxes

On December 22, 2017, the U.S. government enacted the Tax Act. Among other provisions, this law significantly modifies the existing U.S. tax code for corporations, including a prospective change in the statutory tax rate from 35% to 21%, repeal of the corporate alternative minimum tax, changes to business tax deductions, and significant revision of international tax provisions. The change in the statutory tax rate is effective beginning January 1, 2018. As CSRA operates on a fiscal year calendar, the new rate is effective for the Company’s fourth quarter of fiscal year 2018. However, certain provisions of the new law, including asset depreciation rates for tax purposes, became effective at dates during the three months ended December 29, 2017 and the Company is required to evaluate its deferred tax assets and liabilities as of December 29, 2017 using the new statutory rates (subject to considerations in SAB 118). The Company’s net benefit for income taxes in the three months ended December 29, 2017 included a benefit of $100.7 million associated with: (a) the estimated net effect of these changes on CSRA’s deferred tax liabilities and assets at the end of the period; and to a much lesser extent (b) a change in the Company’s liability for an uncertain tax position. CSRA evaluated its deferred tax assets and liabilities on a provisional basis using management estimates. The impact of the Tax Act may differ from these estimates, possibly materially, due to, among other things, changes in interpretations and assumptions the Company has made. Any adjustments recorded to the provisional amounts through the third quarter of fiscal year 2019 will be included in income from operations as an adjustment to tax expense.

Excluding the net benefit associated with the evaluation of deferred tax items, our provision for taxes on current period income in the three months ended December 29, 2017 was recognized using reasonable estimates of income and the statutory rate of the Company for the full fiscal year. As the Company’s fiscal year end is March 30, 2018, the statutory federal corporate tax rate is prorated to 31.6%. The Company’s federal corporate statutory tax rate for fiscal year 2019 and beyond will be 21.0%. CSRA’s effective tax rate (“ETR”) was (64.1)% and 4.4% for the three and nine months ended December 29, 2017, respectively, compared to 37.3% and 36.4% for the three and nine months ended December 30, 2016, respectively.

CSRA is currently under examination in several tax jurisdictions. Tax years 2008 and forward remain subject to examination under both Federal and various state tax jurisdictions. One disputed matter remains unresolved in connection with the Internal Revenue Service’s (“IRS”) examination of SRA’s federal income tax return for 2011. The disputed matter concerns a $136.7 million worthless stock deduction for a disposed subsidiary. CSRA believes its tax positions are appropriate. The Company obtained a tax insurance policy in connection with its merger with SRA that limits CSRA’s exposure related to this dispute. It is reasonably possible that changes to CSRA’s unrecognized tax benefits could be significant; due to the uncertainty regarding the IRS administrative appeals process and possible outcomes, however, we estimate that the increases or decreases in our unrecognized benefits that may occur within the next 12 months will not be material.

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Pension and Other Post-retirement Benefit Plans

9 Months Ended

Dec. 29, 2017

Retirement Benefits [Abstract]

Pension and Other Post-retirement Benefit Plans

Note 9—Pension and Other Post-retirement Benefit Plans

Certain employees of CSRA, its subsidiaries, and its former parent company are participants in employer-sponsored defined benefit and defined contribution plans, including pension and other post-retirement benefit (“OPEB”) plans. The assets and liabilities for the plans and the costs and benefits related to the plans’ participants are reflected in CSRA’s unaudited Consolidated and Condensed Financial Statements.

Defined Benefit Pension Plans

The largest U.S. defined benefit pension plan was frozen in fiscal year 2010 for most participants. All remaining participants have been frozen since 2016.

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

(Dollars in millions)	Three Months Ended						Nine Months Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Service cost (entirely administrative expenses)	$	4		$	3		$	11		$	9
Interest cost	23			25			69			76
Expected return on assets	(43		)	(47		)	(129		)	(145		)
Recognition of actuarial (gains) losses	—			(101		)	—			(101		)
Settlement gain	—			(13		)	—			(13		)
Net periodic pension benefit	$	(16	)	$	(133	)	$	(49	)	$	(174	)

The following table provides the pension plans’ projected benefit obligations, assets, and funding status:

	As of
(Dollars in millions)	December 29, 2017			March 31, 2017
Net benefit obligation	$	(2,739	)	$	(2,787	)
Net plan assets	2,335			2,328
Net unfunded status	$	(404	)	$	(459	)

CSRA contributed $6.2 million to the defined benefit pension plans during the nine months ended December 29, 2017 for the funding of benefit payments made to plan participants. CSRA expects to make $2.1 million of additional contributions during the remaining three months of fiscal year 2018 for the funding of participants’ benefit payments.

Other Post-retirement Benefit Plans

CSRA’s financial statements reflect the service costs related to current employees and certain former employees of CSC and the businesses constituting CSC’s North American Public Sector segment 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.

(Dollars in millions)	Three Months Ended						Nine Months Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Net periodic post-retirement (benefit) costs:
Interest cost	$	1		$	1		$	2		$	2
Expected return on assets	(1		)	(1		)	(4		)	(4		)
Amortization of prior service benefit	(4		)	(4		)	(10		)	(10		)
Net periodic benefit	$	(4	)	$	(4	)	$	(12	)	$	(12	)

The following table provides the OPEB plans’ projected benefit obligations, assets, and funding status:

(Dollars in millions)	As of
	December 29, 2017			March 31, 2017
Net benefit obligation	$	(84	)	$	(86	)
Net plan assets	76			76
Net unfunded status	$	(8	)	$	(10	)

CSRA contributed $1.1 million to the OPEB plans during both the nine months ended December 29, 2017 and December 30, 2016. CSRA expects to make $0.4 million of additional contributions to this plan during the remaining three months of fiscal year 2018 for the funding of participants’ benefit payments.

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Share-Based Compensation Plans

9 Months Ended

Dec. 29, 2017

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

Share-Based Compensation Plans

Note 10—Share-Based Compensation Plans

Employee Incentives

Prior to the Company’s separation from CSC (the “Spin-Off”), there were two stock incentive plans under which employees were granted stock options, restricted stock units (“RSUs”), and performance stock units (“PSUs”). Some of these awards vested upon the Spin-Off, some continue to vest in accordance with their original terms, and some converted into a different type of equity award at separation. CSRA had a net receivable from CSC of $7.0 million at December 29, 2017 and $1.3 million as of March 31, 2017, related to the settlement of equity awards granted to employees prior to the Spin-Off.

On August 9, 2017, CSRA’s shareholders approved an increase in the number shares available for issuance under the Company’s 2015 Omnibus Incentive Plan of 4,483,000 shares. As of December 29, 2017, there were 11,179,870 available shares of CSRA common stock for the grant of future stock options, RSUs, PSUs or other share-based incentives to employees of CSRA. For the nine months ended December 29, 2017 and December 30, 2016, CSRA recognized share-based compensation expense within Selling, general and administrative expenses of $11.3 million and $25.1 million, respectively, including CSRA’s non-employee director grants, which totaled $1.2 million in both periods.

Stock Options

Information concerning stock options of CSRA during the nine months ended December 29, 2017 was as follows.

	Number of Option Shares	Weighted Average Exercise Price per share
Outstanding as of March 31, 2017	1,996,898	$	24.29
Granted	—	—
Less:
Exercised	185,031	23.00
Canceled/Forfeited	89,600	23.92
Expired	9,369	28.49
Outstanding as of December 29, 2017	1,712,898	24.37
Expected to vest in the future as of December 29, 2017	730,968	25.03
Exercisable as of December 29, 2017	981,930	23.88

As of December 29, 2017, unrecognized compensation expense related to unvested stock options totaled $2.9 million. This cost is expected to be recognized over a weighted-average period of 1.3 years.

RSUs and PSUs    

Information concerning RSUs and PSUs of CSRA during the nine months ended December 29, 2017, was as follows.

	Number of Restricted Stock Units	Weighted Average Fair Value
Outstanding as of March 31, 2017	857,914	$	26.95
Granted	683,335	30.39
Less:
Vested	97,097	29.10
Canceled/Forfeited	109,170	28.10
Outstanding as of December 29, 2017	1,334,982	28.46

As of December 29, 2017, total unrecognized compensation expense related to unvested RSUs and PSUs totaled $20.7 million. This cost is expected to be recognized over a weighted-average period of 2.1 years.

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

9 Months Ended

Dec. 29, 2017

Equity [Abstract]

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

Note 11—Stockholders’ Equity and Accumulated Other Comprehensive Income (Loss)

Dividends Declared

In May 2017, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 163,760,678 shares, with a total dividend payout of $16.4 million. Payment of the dividend was made on July 12, 2017 to CSRA stockholders of record at the close of business on June 15, 2017.

In August 2017, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 163,604,848 shares, with a total dividend payout of $16.4 million. Payment of the dividend was made on October 3, 2017 to CSRA stockholders of record at the close of business on August 29, 2017.

In December 2017, CSRA announced that its Board of Directors had declared a quarterly cash dividend of $0.10 per share. The total qualifying shares were 163,828,550 shares, with a total dividend payout of $16.4 million. Payment of the dividend was made on January 25, 2018 to CSRA stockholders of record at the close of business on January 4, 2018.

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 June 30, 2017, the Company repurchased 450,000 shares of CSRA common stock for aggregate consideration of $14.3 million, at an average price of $31.71 per share. During the three months ended September 29, 2017, the Company paid $1.6 million for 50,000 shares of CSRA common stock (at an average price of $31.77 per share). The Company did not repurchase shares of CSRA common stock during the three months ended December 29, 2017.

As of December 29, 2017, CSRA remained authorized to repurchase $305.1 million of common stock pursuant to the Share Repurchase Program with an expiration date of March 31, 2019.

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 and nine months ended December 29, 2017 and December 30, 2016, respectively.

	For the Three Months Ended December 29, 2017									For the Three Months Ended December 30, 2016
(Dollars in millions)	Before Tax Amount			Tax Impact			Net of Tax Amount			Before Tax Amount			Tax Impact			Net of Tax Amount
Foreign currency translation adjustments	$	—		$	—		$	—		$	1		$	—		$	1
Unrealized gain on derivatives	7			(2		)	5			30			(12		)	18
Amortization of prior service credit	(4		)	1			(3		)	(3		)	1			(2		)
Total other comprehensive income (loss)	$	3		$	(1	)	$	2		$	28		$	(11	)	$	17

	For the Nine Months Ended December 29, 2017									For the Nine Months Ended December 30, 2016
(Dollars in millions)	Before Tax Amount			Tax Impact			Net of Tax Amount			Before Tax Amount			Tax Impact			Net of Tax Amount
Foreign currency translation adjustments	$	—		$	—		$	—		$	2		$	(1	)	$	1
Unrealized gain on derivatives	4			(1		)	3			25			(10		)	15
Amortization of prior service credit	(10		)	4			(6		)	(10		)	4			(6		)
Total other comprehensive income (loss)	$	(6	)	$	3		$	(3	)	$	17		$	(7	)	$	10

The following tables show the changes in Accumulated other comprehensive (loss) income for the nine months ended December 29, 2017 and December 30, 2016, respectively.

	Nine month ended December 29, 2017								Nine months ended December 30, 2016
(Dollars in millions)	Cash Flow Hedge		Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income			Foreign Currency Translation Adjustments		Cash Flow Hedge			Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance, beginning of period	$	11	$	20		$	31		$	—	$	(7	)	$	28		$	21
Other comprehensive income, net of taxes	3		—			3			1		15			—			16
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests	—		(6		)	(6		)	—		—			(6		)	(6		)
Balance, end of period	$	14	$	14		$	28		$	1	$	8		$	22		$	31

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Segment Information

9 Months Ended

Dec. 29, 2017

Segment Reporting [Abstract]

Segment Information

Note 12—Segment Information

CSRA’s reportable segments are as follows:

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

• Civil—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.

Beginning in fiscal year 2018, we revised Segment operating income to exclude the Net benefit of defined benefit plans coincident with our adoption of ASU 2017-07. The prior period has been revised to conform to the current period presentation.

The following table summarizes operating results and total assets by reportable segment.

(Dollars in millions)	Defense and Intelligence		Civil		Subtotal		Corporate(1)			Total
As of December 29, 2017
Total assets	$	2,447	$	2,682	$	5,129	$	171		$	5,300
Three Months Ended December 29, 2017
Revenue	$	605	$	704	$	1,309	$	—		$	1,309
Segment operating income (loss)(2)	70		88		158		(30		)	128
Depreciation and amortization expense	42		17		59		—			59
Nine Months Ended December 29, 2017
Revenue	$	1,687	$	2,123	$	3,810	$	—		$	3,810

Segment operating income (loss)(2)	203		283		486		(88		)	398
Depreciation and amortization expense	122		53		175		—			175
As of December 30, 2016
Total assets	$	1,970	$	2,594	$	4,564	$	322		$	4,886
Three Months Ended December 30, 2016
Revenue	$	556	$	666	$	1,222	$	—		$	1,222
Segment operating income (loss)(2)	37		91		128		(24		)	104
Depreciation and amortization expense	35		26		61		—			61
Nine Months Ended December 30, 2016
Revenue	$	1,699	$	2,040	$	3,739	$	—		$	3,739
Segment operating income (loss)(2)	149		270		419		(73		)	346
Depreciation and amortization expense	103		86		189		—			189
(1) Total assets allocated to the Corporate Segment at December 29, 2017 consist of the following: (a) $57 million of cash, (b) $46 million of accounts receivable, (c) $31 million of property, plant, and equipment, net, (d) $19 million of other current assets; and (e) $18 million of other long-term assets.
(2) Segment operating income (loss) for the corporate segment includes corporate general and administrative expenses as well as Acquisition, integration, and other costs. The fiscal year 2018 periods include approximately $10 million of loss recognized on the sale of the Company’s corporate headquarters building.

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.

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Commitments and Contingencies

9 Months Ended

Dec. 29, 2017

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 13—Commitments and Contingencies

Commitments

Sale-Leaseback Transaction

On November 2, 2017, CSRA closed a sale-leaseback transaction with MCPII 3170 Fairview, LLC, pursuant to which the Company sold its corporate headquarters building in Falls Church, Virginia, and simultaneously leased back a significant portion of the building. The lease has a 12-year term with two subsequent renewal options of five-years each. The lease qualifies as a capital lease, as the present value of the minimum lease payments exceeds 90% of the fair value of the portion of the property leased by CSRA. The gross sale price was $33.1 million and the Company recognized a loss of approximately $10 million in accordance with accounting guidance for leasing activities (ASC 840). The loss recognized on the sale is included in Selling, general and administrative expenses within the Company’s unaudited Consolidated and Condensed Statement of Operations. Payments under the lease are accounted for as interest and principal payments under the capital lease using a 12 year amortization term. Pursuant to the lease, the landlord agreed to provide a substantial tenant improvement allowance, and in addition, to perform certain renovations and improvements to the property.

As of December 29, 2017, CSRA has the following future minimum lease payments under all of its capital leases, including both facilities and equipment for use on customer contracts:

(Dollars in millions)	Amount
Fiscal year:
2018 (fourth quarter)	$	22
2019	82
2020	78
2021	71
2022	69
2023 and thereafter	101
Total minimum lease payments	423
Less: amount representing interest and executory costs	(71		)
Less: amount representing maintenance, taxes, and insurance costs	(92		)
Present value of net minimum lease payments	260
Less: current maturities of capital lease liability	(50		)
Noncurrent capital lease liability	$	210

Letters of Credit and Surety Bonds

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 December 29, 2017 and March 31, 2017, CSRA had $22.9 million and $20.2 million, respectively, of outstanding letters of credit, and $12.2 million and $12.0 million, respectively of surety bonds related to these performance guarantees. CSRA believes it is in compliance in all material respects with its performance obligations under all service contracts for which there is a financial performance guarantee and that the ultimate liability, if any, incurred in connection with these guarantees would not have a material adverse effect on its unaudited Consolidated and Condensed Financial Statements.

Indemnifications

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). Historically, CSRA has not incurred significant costs related to licensee software indemnifications.

Contingencies

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 applicable accounting guidance. CSRA believes it has appropriately recognized liabilities for any such matters. In addition to the matters noted below, CSRA is currently party to a number of disputes that involve or may involve litigation. 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.

U.S. Government Agency Reviews

CSRA is routinely subject to investigations and reviews relating to compliance with various laws and regulations relating 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 and its unaudited Consolidated and Condensed Financial Statements due to CSRA’s reliance on government contracts.

U.S. 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, 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.

CSRA’s indirect cost audits by the DCAA (including audits of both CSRA LLC and SRA) remain open for several fiscal years. Although the Company recorded contract revenue based upon estimates of costs that the Company’s management believes will be approved upon final audit or review, management does not know the outcome of any ongoing or future audits or reviews and adjustments, and if future adjustments exceed these estimates, CSRA’s profitability would be adversely affected.

As of December 29, 2017 and March 31, 2017, CSRA has recorded a liability of $16.3 million and $16.5 million, respectively, for its current best estimate of net amounts to be refunded to customers for potential adjustments from such audits or reviews of contract costs. These amounts include potential adjustments related to both pre-separation and post-separation audits or reviews.

Legal Proceedings

The Company is involved in various lawsuits, claims, and administrative proceedings arising in the normal course of business, including many matters that arose before the Company’s separation from CSC. See Note 21—Commitments and Contingencies in CSRA’s Consolidated and Combined Financial Statements included in our Annual Report on Form 10-K for the fiscal year ended March 31, 2017 for additional information. During the nine months ended December 29, 2017, the following significant developments arose with respect to these matters:

State of Maryland, Medicaid Enterprise Restructuring Project (“MERP”)

On September 15, 2017, the Maryland Department of Health (the “State”) issued a procurement officer's decision and Departmental Final Action (the “Final Action”) denying CSC’s remaining undecided claims against the State in the total amount of $83 million. In the Final Action, the State also purports to award itself approximately $521 million on its counterclaim. The State alleges a default by CSC under the contracts for MERP. CSC contests both the State’s allegation that it defaulted and the amount of State’s alleged damages. CSC timely filed a notice of appeal with the Maryland State Board of Contract Appeals (the “State Board”), which will consider CSC’s claims and the State’s counterclaim anew.

CSC’s claims against the State have been consolidated at the State Board. On January 12, 2018, CSC filed various strong dispositive motions at the State Board, one of which challenges the State Board’s jurisdiction over the State’s claims against CSC. CSC’s January 12, 2018, motions also request summary decision on the State’s claims should jurisdiction be found.  

On November 22, 2017, the State filed a fraud complaint in Maryland State Circuit Court alleging that CSC’s purported contractual nonperformance amounted to fraud under common law and the Maryland False Health Claims Act (the “Complaint”). In the Complaint, the State seeks penalties of $0.8 million, unspecified compensatory damages in excess of $500 million, which may be trebled under the Maryland False Health Claims Act, and punitive damages in excess of $500 million. The complaint also sets forth specified damages totaling approximately $44 million, which are also set forth in the State’s $521 million counter-claim filed with the State Board in September 2017. On December 29, 2017, CSC removed the case to the U.S. District Court for the District of Maryland and on January 5, 2018, filed several dispositive motions, including a Motion to Dismiss, or in the Alternative for a More Definite Statement, under Federal Rules of Civil Procedure 9(b) and 12(e). Management is continuing to correspond with the State to seek a mutually agreeable resolution to these matters.

Management has evaluated the recoverability of its assets related to the MERP contract in light of these developments and concluded that no adjustments to its financial statements are required. Further, we have assessed the State’s counterclaim and have concluded that no reserve is required.

Strauch et al. Fair Labor Standards Act Class Action

On June 30, 2017 the U.S. District Court for the District of Connecticut granted class certification for former employees classified as Associate Professionals or as Professionals working in the states of California and Connecticut who worked more than 40 hours per week. The Court denied class certification for all class members in North Carolina on the basis that North Carolina law is preempted by the Fair Labor Standards Act. In addition, class certification was denied as to former employees classified as Senior Professionals in California and Connecticut.  The Second Circuit denied the Company’s July 14, 2017 petition for review of the partial certification of the class. The case was tried in December 2017, resulting in a jury verdict in favor of the plaintiffs. The Court entered judgment on January 5, 2018, without specified damages. The Court noted that the judgment will be amended to include damages and fees when determined.

Southwest Asia Employment Contract Litigation

On June 28, 2017, the Fourth Circuit ruled against CSC on its appeal of the District Court’s award of attorneys’ fees to the Rishell plaintiff. The underlying judgment and attorney fees have been paid and this matter is now closed. No additional accrual for indemnification of fees was necessary.

In the separate case pending before the U.S. District Court for the Eastern District of Louisiana, on July 15, 2017, claims of 58 plaintiffs were dismissed, and the claims of the remaining 37 plaintiffs were limited, on the basis that these claims were untimely under Louisiana law. As the result of an October 2017 settlement conference, the parties reached an agreement in principle to settle the case for $0.6 million. The Company filed a motion to enforce the settlement on January 8, 2018. The range of the possible losses for which the Company would be required to indemnify CSC remains $0.6 million to $2.6 million.

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

9 Months Ended

Dec. 29, 2017

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 (“SEC”), and should be read in conjunction with the information contained in the Company’s Annual Report on Form 10-K for the year ended March 31, 2017. The interim period unaudited Consolidated and Condensed Financial Statements are presented as described below.

In May 2017, CSRA executed an agreement for the acquisition of NES Associates, LLC (“NES”), a consulting firm that provides IT services to the U.S. government. On July 3, 2017, CSRA completed its acquisition of NES, which resulted in NES becoming a wholly owned subsidiary of CSRA. In October 2017, CSRA announced that it had executed an agreement to acquire Praxis Engineering Technologies LLC (”Praxis”), a consulting and solutions firm dedicated to the practical application of software and systems engineering technologies. On November 17, 2017, CSRA completed the acquisition of Praxis, which resulted in Praxis becoming a wholly owned subsidiary of CSRA. See Note 4—Acquisitions for additional information.

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.

CSRA reports its results based on a fiscal year convention comprised of 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.

Contract accounting requires significant judgment relative to assessing risks, estimating contract revenue and costs, and making assumptions for schedule and technical issues. Due to the size and nature of many of CSRA’s contracts, developing total revenue and costs at completion estimates requires significant judgment. Contract costs include direct labor and billable expenses, allocation of allowable indirect costs, and warranty obligations. CSRA recognizes revenue and billable expenses from these transactions on a gross basis because it is the primary obligor on contracts with customers.

Earnings Per Share

Earnings Per Share

The computation of diluted earnings per share excludes stock options, whose effect, if included, would be anti-dilutive.

Use of Estimates

Use of Estimates

GAAP requires management to make estimates and assumptions that affect certain amounts reported in the unaudited Consolidated and Condensed Financial Statements and accompanying notes. These estimates are based on management’s best knowledge of historical experience, current events, and other assumptions that management considers reasonable. Actual results could differ from those estimates.

Amounts subject to significant judgment and/or estimates include, but are not limited to: determining the fair values of assets acquired and liabilities assumed, derivative instruments and non-financial assets such as internally developed software for internal use; costs to complete fixed-price contracts, certain deferred costs, collectability of receivables, deferred tax assets and liabilities, reserves for tax benefits, including valuation allowances on deferred tax assets, loss accruals for litigation, and inputs used for computing share-based compensation.

Reclassifications

Reclassifications

Historically, the Company recognized separation and merger costs in connection with our separation from Computer Sciences Corporation (now known as DXC Technology) (“CSC”) and our subsequent merger with SRA International Inc. (“SRA”) as a separate operating expense. In the second quarter of fiscal year 2018, CSRA began to combine these costs with separately identifiable acquisition costs and fees paid to third parties for completed acquisitions as well as integration, transition, and other costs for integrating the businesses. These expenses are presented as acquisition, integration, and other costs on the unaudited Consolidated and Condensed Statements of Operations. Prior periods have been revised to conform to the current period presentation.

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 hierarchy that prioritizes inputs 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 techniques where one or more significant inputs are unobservable.

Assets and liabilities valued using the fair value measurement guidance on a recurring basis include: pension assets and derivative instruments (consisting of interest rate swap contracts, total return swaps, and foreign currency forward exchange contracts). Pension assets are valued using model based pricing methods that use observable market data and are, therefore, 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.

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

The Company’s financial instruments include cash, trade receivables, vendor payables, derivative financial instruments, and debt. As of December 29, 2017, 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 $2.7 billion and $2.5 billion at December 29, 2017 and March 31, 2017, respectively, and approximated its fair value on those dates based on recent trading activity, which is classified as Level 2 inputs.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Newly-Adopted Accounting Standards

On December 22, 2017, the Tax Cuts and Jobs Acts (the “Tax Act”) was enacted into law. The Tax Act includes numerous significant changes to the U.S. Corporate tax laws such as: the reduction of the statutory tax rate from 35% to 21%; repeal of the corporate alternative minimum tax; changes to business tax exclusions, deductions and credits; and significant revision of international tax provisions. Shortly thereafter, the Securities and Exchange Commission issued guidance for accounting for taxes in Staff Accounting Bulletin No. 118 (“SAB 118”) to provide guidance on the application of accounting for income taxes (under ASC 740) in cases where the calculation of certain effects of the changes in tax laws or tax rates are incomplete upon issuance of an entity's financial statements for the reporting period in which the Tax Act is enacted. Under SAB 118, in the financial reporting period during which the Tax Act is enacted, the income tax effects of the Tax Act (for those changes where calculations are incomplete) would be reported as provisional based on a reasonable estimate, and are to be subject to adjustment during a "measurement period" until the accounting under guidance in ASC 740 is complete. When provisional amounts are used, supplemental disclosures should be provided, such as the reasons for the incomplete accounting and other information relevant to why the Company was not able to complete the accounting in a timely manner. CSRA has used the guidance in SAB 118 when determining the impact of the Tax Act on the Company’s consolidated financial statements. See Note 8—Income Taxes for further information.

In March 2017, the FASB issued ASU No. 2017-07-Compensation- Retirement Benefits (Topic 715) (“ASU 2017-07”), which changes the presentation of net periodic pension and post-retirement costs. The guidance requires that service costs associated with pension and post-retirement plans be presented in the same financial statement line item as the compensation cost for the related employees. All other net benefit costs must be reported separately from income from operations (if presented). The standard is effective for the first interim period within annual periods beginning after December 15, 2017, with early adoption permitted. Since CSRA’s defined benefit pension and post-retirement plans (the “Plans”) are frozen, historical service costs consist of administrative expenses. CSRA chose to early adopt this standard during the first quarter of the fiscal year ending March 30, 2018. As a result, net benefit costs of the Plans have been presented as a separate line item on the Company’s statements of operations. The prior periods have been revised to conform to the current period presentation.

In January 2017, the FASB issued ASU No. 2017-04, Intangibles-Goodwill and Other (Topic 350) Simplifying the Accounting for Goodwill Impairment (“ASU 2017-04”). Its main provisions are: (a) removing step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation; and (b) eliminating the need to determine the fair value of individual assets and liabilities of a reporting unit to measure goodwill impairment. ASU 2017-04 is effective for all public business entities for fiscal years beginning after December 15, 2019, with early adoption permitted on or after January 1, 2017. The Company adopted ASU 2017-04 on July 1, 2017, which coincided with its annual assessment for the impairment of goodwill. The adoption had no impact on CSRA’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 ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014-09”), which supersedes the revenue recognition requirements and some cost guidance included in the Accounting Standards Codification (ASC). Upon adoption, ASU 2014-09 will change the way we recognize revenue and significantly expand the disclosure requirements for revenue arrangements.

The new standard requires us to identify contractual performance obligations and determine when revenue should be recognized. This requirement and other provisions of the standard could change the method or timing of revenue recognition for our firm-fixed-price and, to a lesser extent, cost-reimbursable-plus-fee contract portfolio. The Company’s implementation project team is taking an integrated approach to analyzing the standard’s impact on our contract portfolio including a review of accounting policies and practices, evaluating the effects of the requirements on our contracts and business practices, and assessing the need for system and internal control changes or enhancements. These activities and the Company’s evaluation of the quantitative effect of adoption will continue to the end of the fiscal year.

The Company identified likely effects related to the treatment of option years as discrete contracts and the grouping of promised goods and services into performance obligations for the purpose of recognizing revenue under the new standard. As a result, gross favorable and unfavorable adjustments due to changes in contract estimates are anticipated to result in smaller revenue adjustments than before adoption of the ASU. Anticipated losses on contracts will continue to be recognized in the period in which they are identified.

In August 2015, the FASB issued ASU 2015-14, Deferral of the Effective Date, resulting in a one-year deferral of the effective date of ASU 2014-09. The new standard may be adopted either retrospectively or on a modified retrospective basis whereby it 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 the beginning balance of retained earnings at the effective date. The Company plans to adopt the standard on March 31, 2018 (the first day of fiscal year 2019), and to implement the standard using the modified retrospective method, whereby the cumulative effect will be recognized at the date of adoption.

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 also requires expanded qualitative and quantitative disclosures to provide financial statement users with additional information on the amount, timing, and uncertainty of cash flows arising from CSRA leases. The standard must be adopted using the modified retrospective approach, and 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 its policies, procedures, business practices, including internal controls, and financial statements.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows: Restricted Cash (Topic 230)(“ASU 2016-18”). This guidance requires the inclusion of restricted cash and restricted cash-equivalent balances in the statement of cash flows. The ASU does not define "restricted cash" and "restricted cash equivalents." The Company will be required to include its restricted cash balance (currently classified within Prepaid expenses and other current assets) in the Cash and cash equivalents balance presented in the statement of cash flows using a retrospective transition method for each period presented. A reconciliation between the statement of financial position and the statement of cash flows must be disclosed when the statement of financial position includes more than one line item for cash, cash equivalents, restricted cash, and restricted cash equivalents. An entity with a material balance of amounts generally described as restricted cash and restricted cash equivalents must also discuss the nature of the restrictions. The standard is effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption, including during an interim period, is permitted. The Company has not yet determined an implementation date for this ASU.

In August 2017, the FASB issued ASU No. 2017-12, Derivativesand Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities (“ASU 2017-12”), which is intended to improve the transparency and understandability of information conveyed to financial statements users about an entity’s risk management activities and reduce the complexity and simplify the application of hedge accounting by companies. The impact of adopting this standard on CSRA’s financial position and results of operations is not expected to be material, but the Company will continue to evaluate until implementation. The standard is effective for fiscal years beginning after December 15, 2018 and interim period within those fiscal years for public entities.

Other recently issued ASUs effective after December 29, 2017 are not expected to have a material effect on CSRA’s financial statements.

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

9 Months Ended

Dec. 29, 2017

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Change in Accounting Estimate

CSRA’s income before income taxes and noncontrolling interest for the three and nine months ended December 29, 2017 and December 30, 2016 included the following gross favorable and unfavorable adjustments due to changes in estimated profitability on fixed price contracts accounted for under the percentage-of-completion method.

	Three Months Ended						Nine Months Ended
(Dollars in millions)	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Gross favorable	$	21		$	13		$	52		$	40
Gross unfavorable	(5		)	(8		)	(16		)	(24		)
Total net adjustments, before taxes and noncontrolling interests	$	16		$	5		$	36		$	16

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Sale of Receivables (Tables)

9 Months Ended

Dec. 29, 2017

Transfers and Servicing [Abstract]

Accounts Receivable Sales Activity Under the Existing Facility

The table below provides receivable sales activity, including initial sales of newly eligible receivables during the periods presented.

	Three Months Ended				Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		December 29, 2017		December 30, 2016
Sales of billed receivables	$	470	$	545	$	1,322	$	1,482
Sales of unbilled receivables	329		294		940		850
Total sales of receivables	$	799	$	839	$	2,262	$	2,332
Collections of sold receivables	$	680	$	790	$	2,127	$	2,192
Operating cash flow effect, net of collections and fees from sales	118		47		130		137

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Acquisitions (Tables)

9 Months Ended

Dec. 29, 2017

Business Combinations [Abstract]

Final Fair Value of Assets Acquired and Liabilities Assumed

The following table presents the estimated fair values of assets acquired and liabilities assumed in our acquisition of Praxis as of November 17, 2017:

Preliminary allocation (in millions):	Amount
Cash, accounts receivable and other current assets	$	49
Property, equipment and other long-term assets	2
Intangibles—customer relationships, backlog and other intangibles assets	95
Accounts payable and other current liabilities	(36		)
Total identified net assets acquired	110
Goodwill	125
Total purchase consideration and liabilities paid at closing	$	235

The following table presents the estimated fair values of assets acquired and liabilities assumed in our acquisition of NES as of July 3, 2017:

Preliminary allocation (in millions):	Amount
Cash, accounts receivable and other current assets	$	28
Property, equipment and other long-term assets	4
Intangibles—customer relationships, backlog and other intangibles assets	25
Accounts payable and other current liabilities	(15		)
Total identified net assets acquired	42
Goodwill	62
Total purchase consideration and liabilities paid at closing	$	104

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Dec. 29, 2017

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Goodwill

The following table summarizes the changes in the carrying amount of goodwill by segment for the nine months ended December 29, 2017:

(Dollars in millions)	Defense and Intelligence		Civil		Total
Balance as of March 31, 2017	$	815	$	1,520	$	2,335
Acquisition of NES	62		—		62
Acquisition of Praxis	125		—		125
Balance as of December 29, 2017	$	1,002	$	1,520	$	2,522

Schedule of amortizing intangible assets

Purchased and internally developed software for external and internal use, net of accumulated amortization, consisted of:

	As of
(Dollars in millions)	December 29, 2017		March 31, 2017
Purchased software	$	67	$	73
Internally developed software	5		8
Total software	$	72	$	81

A summary of amortizing intangible assets, including preliminary fair values of those recorded in the NES and Praxis acquisitions, are:

	As of
	December 29, 2017
(Dollars in millions)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Acquisition-related intangibles:
Customer-related intangibles	$	1,064	$	(214	)	$	850
Backlog	67		(66		)	1
Other intangible assets	7		(4		)	3
Subtotal-acquisition-related intangibles:	1,138		(284		)	854
Software	175		(103		)	72
Total intangible assets	$	1,313	$	(387	)	$	926

	As of
	March 31, 2017
(Dollars in millions)	Gross Carrying Value		Accumulated Amortization			Net Carrying Value
Acquisition-related intangibles:
Customer-related intangibles	$	948	$	(175	)	$	773
Backlog	65		(65		)	—
Other intangible assets	6		(4		)	2
Subtotal-acquisition-related intangibles:	1,019		(244		)	775
Software	170		(89		)	81
Total intangible assets	$	1,189	$	(333	)	$	856

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Accrued Expenses and Other Current Liabilities (Tables)

9 Months Ended

Dec. 29, 2017

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)	December 29, 2017		March 31, 2017
Accrued contract costs	$	318	$	239
Deferred revenue	160		153
Accrued expenses	109		81
Other	24		14
Total	$	611	$	487

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Debt (Tables)

9 Months Ended

Dec. 29, 2017

Debt Disclosure [Abstract]

Schedule of Long-term Debt

The following is a summary of CSRA’s outstanding debt, as of December 29, 2017 and March 31, 2017.

	December 29, 2017				March 31, 2017
(Dollars in millions)	Interest Rate(1)	Outstanding Balance			Interest Rate(1)	Outstanding Balance
Revolving Credit Facility, due November 2022	2.98% - 3.24%	$	—		2.18% - 2.20%	$	—
Tranche A1 Facility, due November 2019	2.61% - 2.98%	389			2.06% - 2.41%	570
Tranche A2 Facility, due November 2022	2.73% - 3.1%	1,528			2.18% - 2.53%	1,580
Term Loan B Facility, due November 2023	3.16% - 3.55%	849			3.28% - 3.75%	466
Capitalized lease liability	2.35% - 13.77%	260			2.35% - 15.09%	216
Total debt		3,026				2,832
Less: unamortized debt issuance costs		(29		)		(33		)
Less: current portion of long-term debt and capitalized lease liability		(136		)		(116		)
Total long-term debt, net of current maturities		$	2,861			$	2,683
(1) Represents the range of the lowest and highest interest rate during the period for each facility. Capitalized lease rates are the lowest and highest rates among all leases outstanding during the period. The December 29, 2017 column represents the range during the nine month period then ended and the March 31, 2017 column represents the range during the fiscal year then ended.

Schedule of Interest Expense

Interest expense consisted of:

	Three Months Ended				Nine Months Ended
(Dollars in millions)	December 29, 2017		December 30, 2016		December 29, 2017		December 30, 2016
Contractual interest -Revolving and Term Loan Facilities	$	22	$	18	$	62	$	56
Amortization of debt issuance costs	2		2		6		8
Interest on derivatives and other	5		8		18		23
Loss on debt extinguishment	—		8		2		8
Total interest expense	$	29	$	36	$	88	$	95

Schedule of Maturities of Long-term Debt

Expected maturities of long-term debt, excluding future minimum capital lease payments are as follows:

(Dollars in millions)	Amount
Fiscal year:
Fourth quarter of fiscal year 2018	$	21
2019	85
2020	474
2021	86
2022	86
2023	1,188
Thereafter	826
Total	$	2,766

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Pension and Other Post-retirement Benefit Plans (Tables)

9 Months Ended

Dec. 29, 2017

Retirement Benefits [Abstract]

Schedule of Net Benefit Costs

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

(Dollars in millions)	Three Months Ended						Nine Months Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Service cost (entirely administrative expenses)	$	4		$	3		$	11		$	9
Interest cost	23			25			69			76
Expected return on assets	(43		)	(47		)	(129		)	(145		)
Recognition of actuarial (gains) losses	—			(101		)	—			(101		)
Settlement gain	—			(13		)	—			(13		)
Net periodic pension benefit	$	(16	)	$	(133	)	$	(49	)	$	(174	)

(Dollars in millions)	Three Months Ended						Nine Months Ended
	December 29, 2017			December 30, 2016			December 29, 2017			December 30, 2016
Net periodic post-retirement (benefit) costs:
Interest cost	$	1		$	1		$	2		$	2
Expected return on assets	(1		)	(1		)	(4		)	(4		)
Amortization of prior service benefit	(4		)	(4		)	(10		)	(10		)
Net periodic benefit	$	(4	)	$	(4	)	$	(12	)	$	(12	)

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 funding status:

(Dollars in millions)	As of
	December 29, 2017			March 31, 2017
Net benefit obligation	$	(84	)	$	(86	)
Net plan assets	76			76
Net unfunded status	$	(8	)	$	(10	)

The following table provides the pension plans’ projected benefit obligations, assets, and funding status:

	As of
(Dollars in millions)	December 29, 2017			March 31, 2017
Net benefit obligation	$	(2,739	)	$	(2,787	)
Net plan assets	2,335			2,328
Net unfunded status	$	(404	)	$	(459	)

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Share-Based Compensation Plans (Tables)

9 Months Ended

Dec. 29, 2017

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

Schedule of Recognized Share-based Compensation Expense

Information concerning stock options of CSRA during the nine months ended December 29, 2017 was as follows.

	Number of Option Shares	Weighted Average Exercise Price per share
Outstanding as of March 31, 2017	1,996,898	$	24.29
Granted	—	—
Less:
Exercised	185,031	23.00
Canceled/Forfeited	89,600	23.92
Expired	9,369	28.49
Outstanding as of December 29, 2017	1,712,898	24.37
Expected to vest in the future as of December 29, 2017	730,968	25.03
Exercisable as of December 29, 2017	981,930	23.88

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

Information concerning stock options of CSRA during the nine months ended December 29, 2017 was as follows.

	Number of Option Shares	Weighted Average Exercise Price per share
Outstanding as of March 31, 2017	1,996,898	$	24.29
Granted	—	—
Less:
Exercised	185,031	23.00
Canceled/Forfeited	89,600	23.92
Expired	9,369	28.49
Outstanding as of December 29, 2017	1,712,898	24.37
Expected to vest in the future as of December 29, 2017	730,968	25.03
Exercisable as of December 29, 2017	981,930	23.88

Disclosure of Share-based Compensation by Award Type

Information concerning RSUs and PSUs of CSRA during the nine months ended December 29, 2017, was as follows.

	Number of Restricted Stock Units	Weighted Average Fair Value
Outstanding as of March 31, 2017	857,914	$	26.95
Granted	683,335	30.39
Less:
Vested	97,097	29.10
Canceled/Forfeited	109,170	28.10
Outstanding as of December 29, 2017	1,334,982	28.46

Information concerning stock options of CSRA during the nine months ended December 29, 2017 was as follows.

	Number of Option Shares	Weighted Average Exercise Price per share
Outstanding as of March 31, 2017	1,996,898	$	24.29
Granted	—	—
Less:
Exercised	185,031	23.00
Canceled/Forfeited	89,600	23.92
Expired	9,369	28.49
Outstanding as of December 29, 2017	1,712,898	24.37
Expected to vest in the future as of December 29, 2017	730,968	25.03
Exercisable as of December 29, 2017	981,930	23.88

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

9 Months Ended

Dec. 29, 2017

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 and nine months ended December 29, 2017 and December 30, 2016, respectively.

	For the Three Months Ended December 29, 2017									For the Three Months Ended December 30, 2016
(Dollars in millions)	Before Tax Amount			Tax Impact			Net of Tax Amount			Before Tax Amount			Tax Impact			Net of Tax Amount
Foreign currency translation adjustments	$	—		$	—		$	—		$	1		$	—		$	1
Unrealized gain on derivatives	7			(2		)	5			30			(12		)	18
Amortization of prior service credit	(4		)	1			(3		)	(3		)	1			(2		)
Total other comprehensive income (loss)	$	3		$	(1	)	$	2		$	28		$	(11	)	$	17

	For the Nine Months Ended December 29, 2017									For the Nine Months Ended December 30, 2016
(Dollars in millions)	Before Tax Amount			Tax Impact			Net of Tax Amount			Before Tax Amount			Tax Impact			Net of Tax Amount
Foreign currency translation adjustments	$	—		$	—		$	—		$	2		$	(1	)	$	1
Unrealized gain on derivatives	4			(1		)	3			25			(10		)	15
Amortization of prior service credit	(10		)	4			(6		)	(10		)	4			(6		)
Total other comprehensive income (loss)	$	(6	)	$	3		$	(3	)	$	17		$	(7	)	$	10

Reclassification Out of Accumulated Other Comprehensive Income (Loss)

The following tables show the changes in Accumulated other comprehensive (loss) income for the nine months ended December 29, 2017 and December 30, 2016, respectively.

	Nine month ended December 29, 2017								Nine months ended December 30, 2016
(Dollars in millions)	Cash Flow Hedge		Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income			Foreign Currency Translation Adjustments		Cash Flow Hedge			Pension and Other Post-retirement Benefit Plans			Accumulated Other Comprehensive (Loss) Income
Balance, beginning of period	$	11	$	20		$	31		$	—	$	(7	)	$	28		$	21
Other comprehensive income, net of taxes	3		—			3			1		15			—			16
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests	—		(6		)	(6		)	—		—			(6		)	(6		)
Balance, end of period	$	14	$	14		$	28		$	1	$	8		$	22		$	31

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Segment Information (Tables)

9 Months Ended

Dec. 29, 2017

Segment Reporting [Abstract]

Operating Results and Total Assets by Reportable Segment

The following table summarizes operating results and total assets by reportable segment.

(Dollars in millions)	Defense and Intelligence		Civil		Subtotal		Corporate(1)			Total
As of December 29, 2017
Total assets	$	2,447	$	2,682	$	5,129	$	171		$	5,300
Three Months Ended December 29, 2017
Revenue	$	605	$	704	$	1,309	$	—		$	1,309
Segment operating income (loss)(2)	70		88		158		(30		)	128
Depreciation and amortization expense	42		17		59		—			59
Nine Months Ended December 29, 2017
Revenue	$	1,687	$	2,123	$	3,810	$	—		$	3,810

Segment operating income (loss)(2)	203		283		486		(88		)	398
Depreciation and amortization expense	122		53		175		—			175
As of December 30, 2016
Total assets	$	1,970	$	2,594	$	4,564	$	322		$	4,886
Three Months Ended December 30, 2016
Revenue	$	556	$	666	$	1,222	$	—		$	1,222
Segment operating income (loss)(2)	37		91		128		(24		)	104
Depreciation and amortization expense	35		26		61		—			61
Nine Months Ended December 30, 2016
Revenue	$	1,699	$	2,040	$	3,739	$	—		$	3,739
Segment operating income (loss)(2)	149		270		419		(73		)	346
Depreciation and amortization expense	103		86		189		—			189
(1) Total assets allocated to the Corporate Segment at December 29, 2017 consist of the following: (a) $57 million of cash, (b) $46 million of accounts receivable, (c) $31 million of property, plant, and equipment, net, (d) $19 million of other current assets; and (e) $18 million of other long-term assets.
(2) Segment operating income (loss) for the corporate segment includes corporate general and administrative expenses as well as Acquisition, integration, and other costs. The fiscal year 2018 periods include approximately $10 million of loss recognized on the sale of the Company’s corporate headquarters building.

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Commitments and Contingencies (Tables)

9 Months Ended

Dec. 29, 2017

Commitments and Contingencies Disclosure [Abstract]

Schedule of Future Minimum Lease Payments for Capital Leases

As of December 29, 2017, CSRA has the following future minimum lease payments under all of its capital leases, including both facilities and equipment for use on customer contracts:

(Dollars in millions)	Amount
Fiscal year:
2018 (fourth quarter)	$	22
2019	82
2020	78
2021	71
2022	69
2023 and thereafter	101
Total minimum lease payments	423
Less: amount representing interest and executory costs	(71		)
Less: amount representing maintenance, taxes, and insurance costs	(92		)
Present value of net minimum lease payments	260
Less: current maturities of capital lease liability	(50		)
Noncurrent capital lease liability	$	210

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Description of the Business, Basis of Presentation and Recent Accounting Pronouncements (Details) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017 USD ($) shares	Dec. 30, 2016 USD ($)	Dec. 29, 2017 USD ($) reportable_segment shares	Dec. 30, 2016 USD ($)	Mar. 31, 2017 USD ($)
Business Acquisition [Line Items]
Number of segments | reportable_segment			2
Percentage of revenues recognized under percentage of completion method			36.00%	38.00%
Unbilled contracts receivable	$ 17.3		$ 17.3		$ 15.6
Depreciation expense	38.0	$ 33.5	111.1	$ 96.8
Long-term debt, excluding capital leases	$ 2,651.0		$ 2,651.0		$ 2,511.0
Stock options
Business Acquisition [Line Items]
Anti-dilutive shares excluded from diluted earnings per share (in shares) | shares	274,785		283,643

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Description of the Business, Basis of Presentation and Recent Accounting Pronouncements - Income Before Income Taxes and Noncontrolling Interest Included Gross Favorable and Unfavorable Adjustments (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Gross favorable	$ 21	$ 13	$ 52	$ 40
Gross unfavorable	(5)	(8)	(16)	(24)
Total net adjustments, before taxes and noncontrolling interests	$ 16	$ 5	$ 36	$ 16

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Sale of Receivables - Narrative (Details) - USD ($)	9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Mar. 31, 2017
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	$ 13,900,000		$ 37,000,000
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]
Receivables purchase facility commitment amount	450,000,000
Other expense (income), net
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Purchase discount and administrative fees	$ 4,500,000	$ 2,700,000

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Sale of Receivables - Accounts Receivable Sales Activity (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Sales of receivables	$ 799	$ 839	$ 2,262	$ 2,332
Collections of sold receivables	680	790	2,127	2,192
Operating cash flow effect, net of collections and fees from sales	118	47	130	137
Sales of billed receivables
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Sales of receivables	470	545	1,322	1,482
Sales of unbilled receivables
Securitization or Asset-backed Financing Arrangement, Financial Asset for which Transfer is Accounted as Sale [Line Items]
Sales of receivables	$ 329	$ 294	$ 940	$ 850

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Derivative Instruments (Details) - USD ($) $ in Millions	Dec. 29, 2017	Mar. 31, 2017
Foreign Exchange Forward
Derivative [Line Items]
Notional value	$ 11.2
Derivatives Designated for Hedge Accounting | Interest rate swap
Derivative [Line Items]
Notional value	1,400.0	$ 1,400.0
Prepaid and other current assets and Other assets | Derivatives Designated for Hedge Accounting | Interest rate swap
Derivative [Line Items]
Derivative asset	22.2	$ 18.2
Maturing November 2020 | Derivatives Designated for Hedge Accounting | Interest rate swap
Derivative [Line Items]
Notional value	1,100.0
Maturing March 2018 | Derivatives Designated for Hedge Accounting | Interest rate swap
Derivative [Line Items]
Notional value	$ 300.0

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Acquisitions - Fiscal 2018 Acquisition (Details) - USD ($) $ in Millions			9 Months Ended
	Nov. 17, 2017	Jul. 03, 2017	Dec. 29, 2017	Dec. 30, 2016	Mar. 31, 2017
Business Acquisition [Line Items]
Payments for acquisition			$ 335.0	$ 0.0
Goodwill			$ 2,522.0		$ 2,335.0
NES Associates, LLC
Business Acquisition [Line Items]
Acquisition, net price		$ 105.0
Working capital adjustments		0.9
Payments for acquisition		100.9
Cash deposited in escrow		3.2
Cash, accounts receivable and other current assets		28.0
Property, equipment and other long-term assets		4.0
Accounts payable and other current liabilities		(15.0)
Total identified net assets acquired		42.0
Goodwill		62.0
Total purchase consideration and liabilities paid at closing		104.0
Praxis
Business Acquisition [Line Items]
Payments for acquisition	$ 235.0
Cash, accounts receivable and other current assets	49.0
Property, equipment and other long-term assets	2.0
Accounts payable and other current liabilities	(36.0)
Total identified net assets acquired	110.0
Goodwill	125.0
Total purchase consideration and liabilities paid at closing	235.0
Intangibles—customer relationships, backlog and other intangibles assets | NES Associates, LLC
Business Acquisition [Line Items]
Intangibles—customer relationships, backlog and other intangibles assets		$ 25.0
Intangibles—customer relationships, backlog and other intangibles assets | Praxis
Business Acquisition [Line Items]
Intangibles—customer relationships, backlog and other intangibles assets	$ 95.0

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Acquisitions - Fair Values of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Dec. 29, 2017	Jul. 03, 2017	Mar. 31, 2017
Business Acquisition [Line Items]
Goodwill	$ 2,522		$ 2,335
NES Associates, LLC
Business Acquisition [Line Items]
Cash, accounts receivable and other current assets		$ 28
Property, equipment and other long-term assets		4
Accounts payable and other current liabilities		(15)
Total identified net assets acquired		42
Goodwill		62
Total purchase consideration and liabilities paid at closing		104
NES Associates, LLC | Intangibles—customer relationships, backlog and other intangibles assets
Business Acquisition [Line Items]
Intangibles—customer relationships, backlog and other intangibles assets		$ 25

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Goodwill and Other Intangible Assets - Goodwill (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Dec. 29, 2017	Dec. 29, 2017	Dec. 30, 2016
Goodwill [Line Items]
Balance as of March 31, 2017		$ 2,335
Balance as of December 29, 2017	$ 2,522	2,522
Goodwill, period increase (decrease)			$ 0
Defense and Intelligence
Goodwill [Line Items]
Balance as of March 31, 2017		815
Balance as of December 29, 2017	1,002	1,002
Goodwill, period increase (decrease)	0
Civil
Goodwill [Line Items]
Balance as of March 31, 2017		1,520
Balance as of December 29, 2017	1,520	1,520
Goodwill, period increase (decrease)	$ 0
NES Associates, LLC
Goodwill [Line Items]
Goodwill, acquired during period		62
NES Associates, LLC | Defense and Intelligence
Goodwill [Line Items]
Goodwill, acquired during period		62
NES Associates, LLC | Civil
Goodwill [Line Items]
Goodwill, acquired during period		0
Praxis
Goodwill [Line Items]
Goodwill, acquired during period		125
Praxis | Defense and Intelligence
Goodwill [Line Items]
Goodwill, acquired during period		125
Praxis | Civil
Goodwill [Line Items]
Goodwill, acquired during period		$ 0

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Goodwill and Other Intangible Assets - Other Intangible Assets (Details) - USD ($) $ in Millions	Dec. 29, 2017	Nov. 17, 2017	Mar. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 1,313.0		$ 1,189.0
Accumulated Amortization	(387.0)		(333.0)
Net Carrying Value	926.0		856.0
Customer-related intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	1,064.0		948.0
Accumulated Amortization	(214.0)		(175.0)
Net Carrying Value	850.0		773.0
Backlog
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	67.0		65.0
Accumulated Amortization	(66.0)		(65.0)
Net Carrying Value	1.0		0.0
Other intangible assets
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	7.0		6.0
Accumulated Amortization	(4.0)		(4.0)
Net Carrying Value	3.0		2.0
Acquisition Related Intangibles
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	1,138.0		1,019.0
Accumulated Amortization	(284.0)		(244.0)
Net Carrying Value	854.0		775.0
Software
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	175.0		170.0
Accumulated Amortization	(103.0)		(89.0)
Net Carrying Value	72.0		81.0
Purchased software
Finite-Lived Intangible Assets [Line Items]
Net Carrying Value	67.0		73.0
Internally developed software
Finite-Lived Intangible Assets [Line Items]
Net Carrying Value	$ 5.0		$ 8.0
Praxis | Programs, Contract, Backlog Software And Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value		$ 94.5

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Goodwill and Other Intangible Assets - Other Intangible Assets Narrative (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016	Nov. 17, 2017	Jul. 03, 2017	Mar. 31, 2017
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	$ 1,313.0		$ 1,313.0				$ 1,189.0
Amortization expense of intangible assets	21.0	$ 26.8	63.8	$ 91.8
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2018 (remainder)	24.1		24.1
2019	92.7		92.7
2020	85.8		85.8
2021	77.2		77.2
2022	70.3		70.3
Purchased software
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	5.9	3.5	17.8	10.4
Internally developed software for external use
Finite-Lived Intangible Assets [Line Items]
Amortization expense of intangible assets	0.0	$ 0.5	5.6	$ 1.4
Software
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross	175.0		175.0				$ 170.0
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract]
2018 (remainder)	5.5		5.5
2019	21.7		21.7
2020	19.0		19.0
2021	14.0		14.0
2022	$ 12.0		$ 12.0
Praxis | Programs, Contract, Backlog Software And Technology
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross					$ 94.5
NES Associates, LLC | Programs, Contract, Backlog Software And Technology
Finite-Lived Intangible Assets [Line Items]
Finite-lived intangible assets, gross						$ 24.8

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Accrued Expenses and Other Current Liabilities (Details) - USD ($) $ in Millions	Dec. 29, 2017	Mar. 31, 2017
Payables and Accruals [Abstract]
Accrued contract costs	$ 318	$ 239
Deferred revenue	160	153
Accrued expenses	109	81
Other	24	14
Accrued expenses and other current liabilities	$ 611	$ 487

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Debt - Narrative (Details) - USD ($)				1 Months Ended			3 Months Ended	9 Months Ended
	Dec. 29, 2017	Jun. 30, 2017	Jun. 15, 2017	Dec. 29, 2017	Nov. 30, 2017	Sep. 29, 2017	Jun. 30, 2017	Dec. 29, 2017	Dec. 30, 2016	Mar. 31, 2017
Debt Instrument [Line Items]
Extension period, debt	1 year
Borrowing on Revolving Credit Facility								$ 220,000,000	$ 0
Second Amendment, Credit Agreement
Debt Instrument [Line Items]
Quarterly repayment amounts, through December 2022			$ 500,000
Quarterly repayment amounts, thereafter			2,400,000
Deferred finance costs, own-share lending arrangement, issuance costs, gross	$ 1,500,000			$ 1,500,000				1,500,000
Tranche A1 Facility, due November 2019
Debt Instrument [Line Items]
Repayments of debt			$ 180,600,000
Write off of deferred debt issuance cost								1,700,000
Third Amendment, Credit Agreement [Member]
Debt Instrument [Line Items]
Quarterly repayment amounts, through December 2022	1,000,000
Quarterly repayment amounts, thereafter	3,250,000
Repayments of debt	150,000,000
Term Loan Facilities
Debt Instrument [Line Items]
Repayments of debt						$ 20,900,000
Term Loan Facilities | Second Amendment, Credit Agreement
Debt Instrument [Line Items]
Reduction in margin over indexed interest rates			(0.50%)
Debt increase (decrease)			$ 183,700,000
Long-term debt			$ 650,000,000
Term Loan Facilities | Tranche A1 Facility, due November 2019
Debt Instrument [Line Items]
Long-term debt	389,000,000			389,000,000				389,000,000		$ 570,000,000
Term Loan Facilities | Third Amendment, Credit Agreement [Member]
Debt Instrument [Line Items]
Debt increase (decrease)	200,000,000
Long-term debt	849,000,000			849,000,000				849,000,000
Revolving credit facility
Debt Instrument [Line Items]
Repayments of debt				70,000,000
Revolving credit facility | Line of credit
Debt Instrument [Line Items]
Borrowing on Revolving Credit Facility		$ 55,000,000			$ 165,000,000
Revolving credit facility | Line of credit | Revolving Credit Facility, due November 2022
Debt Instrument [Line Items]
Maximum borrowing capacity	700,000,000			700,000,000				700,000,000
Long-term debt	$ 0			0				$ 0		$ 0
Term Loan Facilities
Debt Instrument [Line Items]
Repayments of debt				$ 20,900,000
Term Loan Facilities | Line of credit
Debt Instrument [Line Items]
Repayments of debt							$ 10,800,000
LIBOR | Term Loan Facilities | Second Amendment, Credit Agreement
Debt Instrument [Line Items]
Basis spread			2.00%

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Debt - Long-term Debt (Details) - USD ($) $ in Millions		1 Months Ended	3 Months Ended	9 Months Ended
	Jun. 30, 2017	Nov. 30, 2017	Mar. 31, 2017	Dec. 29, 2017	Dec. 30, 2016
Debt Instrument [Line Items]
Borrowing on Revolving Credit Facility				$ 220.0	$ 0.0
Capitalized lease liability			$ 216.0	260.0
Total debt			2,832.0	3,026.0
Less: unamortized debt issuance costs			(33.0)	(29.0)
Less: current portion of long-term debt and capitalized lease liability			(116.0)	(136.0)
Total long-term debt, net of current maturities			2,683.0	2,861.0
Revolving credit facility | Line of credit
Debt Instrument [Line Items]
Borrowing on Revolving Credit Facility	$ 55.0	$ 165.0
Revolving Credit Facility, due November 2022 | Revolving credit facility | Line of credit
Debt Instrument [Line Items]
Long-term debt			0.0	0.0
Tranche A1 Facility, due November 2019 | Term Loan Facilities
Debt Instrument [Line Items]
Long-term debt			570.0	389.0
Tranche A2 Facility, due November 2022 | Term Loan Facilities
Debt Instrument [Line Items]
Long-term debt			1,580.0	1,528.0
Term Loan B Facility, due November 2023 | Term Loan Facilities
Debt Instrument [Line Items]
Long-term debt			$ 466.0	$ 849.0
Minimum
Debt Instrument [Line Items]
Credit facility, interest rate during period			2.35%	2.35%
Minimum | Revolving Credit Facility, due November 2022 | Revolving credit facility | Line of credit
Debt Instrument [Line Items]
Credit facility, interest rate during period			2.18%	2.98%
Minimum | Tranche A1 Facility, due November 2019 | Term Loan Facilities
Debt Instrument [Line Items]
Credit facility, interest rate during period			2.06%	2.61%
Minimum | Tranche A2 Facility, due November 2022 | Term Loan Facilities
Debt Instrument [Line Items]
Credit facility, interest rate during period			2.18%	2.73%
Minimum | Term Loan B Facility, due November 2023 | Term Loan Facilities
Debt Instrument [Line Items]
Credit facility, interest rate during period			3.28%	3.16%
Maximum
Debt Instrument [Line Items]
Credit facility, interest rate during period			15.09%	13.77%
Maximum | Revolving Credit Facility, due November 2022 | Revolving credit facility | Line of credit
Debt Instrument [Line Items]
Credit facility, interest rate during period			2.20%	3.24%
Maximum | Tranche A1 Facility, due November 2019 | Term Loan Facilities
Debt Instrument [Line Items]
Credit facility, interest rate during period			2.41%	2.98%
Maximum | Tranche A2 Facility, due November 2022 | Term Loan Facilities
Debt Instrument [Line Items]
Credit facility, interest rate during period			2.53%	3.10%
Maximum | Term Loan B Facility, due November 2023 | Term Loan Facilities
Debt Instrument [Line Items]
Credit facility, interest rate during period			3.75%	3.55%

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Debt - Interest Expense (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016
Debt Disclosure [Abstract]
Contractual interest -Revolving and Term Loan Facilities	$ 22	$ 18	$ 62	$ 56
Amortization of debt issuance costs	2	2	6	8
Interest on derivatives and other	5	8	18	23
Loss on debt extinguishment	0	8	2	8
Total interest expense	$ 29	$ 36	$ 88	$ 95

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Debt - Maturities of Long-term Debt (Details) $ in Millions	Dec. 29, 2017 USD ($)
(Dollars in millions)
Fourth quarter of fiscal year 2018	$ 21
2019	85
2020	474
2021	86
2022	86
2023	1,188
Thereafter	826
Total	$ 2,766

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Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016	Mar. 30, 2018
Income Tax Examination [Line Items]
Income tax benefit associated with new legislation	$ 100.7
Effective tax rate (as a percent)	(64.10%)	37.30%	4.40%	36.40%
Domestic Tax Authority | Internal Revenue Service (IRS)
Income Tax Examination [Line Items]
Income tax examination, estimate of possible loss			$ 136.7
Scenario, Forecast
Income Tax Examination [Line Items]
Statutory federal rate					31.60%

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Pension and Other Post-retirement Benefit Plans - Narrative (Details) $ in Millions	9 Months Ended
	Dec. 29, 2017 USD ($)
Defined Benefit Pension Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Contributions by employer	$ 6.2
Estimated future employer contributions for remainder of fiscal year	2.1
Other Postretirement Benefits Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Contributions by employer	1.1
Estimated future employer contributions for remainder of fiscal year	$ 0.4

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Pension and Other Post-retirement Benefit Plans - Defined Benefit Pension Plans (Details) - Defined Benefit Pension Plan - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016	Mar. 31, 2017
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Service cost (entirely administrative expenses)	$ 4	$ 3	$ 11	$ 9
Interest cost	23	25	69	76
Expected return on assets	(43)	(47)	(129)	(145)
Recognition of actuarial (gains) losses	0	101	0	101
Settlement gain	0	13	0	13
Net periodic benefit	(16)	$ (133)	(49)	$ (174)
Defined Benefit Plan, Funded (Unfunded) Status of Plan [Abstract]
Net benefit obligation	(2,739)		(2,739)		$ (2,787)
Net plan assets	2,335		2,335		2,328
Net unfunded status	$ (404)		$ (404)		$ (459)

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Pension and Other Post-retirement Benefit Plans - Other Postretirement Benefit Plans (Details) - Other Postretirement Benefits Plan - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016	Mar. 31, 2017
Defined Benefit Plan, Net Periodic Benefit Cost (Credit) [Abstract]
Interest cost	$ 1	$ 1	$ 2	$ 2
Expected return on assets	(1)	(1)	(4)	(4)
Amortization of prior service benefit	(4)	(4)	(10)	(10)
Net periodic benefit	(4)	$ (4)	(12)	$ (12)
Defined Benefit Plan, Funded (Unfunded) Status of Plan [Abstract]
Net benefit obligation	(84)		(84)		$ (86)
Net plan assets	76		76		76
Net unfunded status	$ (8)		$ (8)		$ (10)

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Share-Based Compensation Plans - Narrative (Details) $ in Millions			9 Months Ended
	Aug. 09, 2017 shares	Nov. 26, 2015 plan	Dec. 29, 2017 USD ($) shares	Dec. 30, 2016 USD ($)	Mar. 31, 2017 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Additional number of shares authorized for issuance (in shares) | shares	4,483,000
Number of common shares available for grant at period end (in shares) | shares			11,179,870
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense			$ 2.9
Period of recognition for unrecognized compensation expense			1 year 3 months 23 days
RSUs includings PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense			$ 20.7
Period of recognition for unrecognized compensation expense			2 years 1 month 11 days
CSRA corporate and non-employee director grants
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense			$ 1.2	$ 1.2
CSC
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock incentive plans | plan		2
Accounts receivable			7.0		$ 1.3
Selling, general and administrative expenses
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense			$ 11.3	$ 25.1

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Share-Based Compensation Plans - Stock Options (Details) - Stock options	9 Months Ended
	Dec. 29, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding beginning of period (in shares) | shares	1,996,898
Granted (in shares) | shares	0
Less:
Exercised (in shares) | shares	185,031
Canceled/Forfeited (in shares) | shares	89,600
Expired (in shares) | shares	9,369
Outstanding end of period (in shares) | shares	1,712,898
Expected to vest in the future as of end of period (in shares) | shares	730,968
Exercisable as of end of period (in shares) | shares	981,930
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) | $ / shares	$ 24.29
Weighted average exercise price - granted (in USD per share) | $ / shares	0.00
Weighted average exercise price - exercised (in USD per share) | $ / shares	23.00
Weighted average exercise price - canceled/forfeited (in USD per share) | $ / shares	23.92
Weighted average exercise price - expired (in USD per share) | $ / shares	28.49
Weighted average exercise price - end of period (in USD per share) | $ / shares	24.37
Expected to vest in the future as of end of period (in USD per share) | $ / shares	25.03
Exercisable as of end of period (in USD per share) | $ / shares	$ 23.88

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Share-Based Compensation Plans - Restricted Stock Units (Details) - RSUs includings PSUs	9 Months Ended
	Dec. 29, 2017 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Beginning balance (in shares) | shares	857,914
Granted (in shares) | shares	683,335
Vested (in shares) | shares	97,097
Canceled/forfeited (in shares) | shares	109,170
Ending balance (in shares) | shares	1,334,982
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Beginning balance (in USD per share) | $ / shares	$ 26.95
Granted (in USD per share) | $ / shares	30.39
Vested (in USD per share) | $ / shares	29.10
Canceled/forfeited (in USD per share) | $ / shares	28.10
Ending balance (in USD per share) | $ / shares	$ 28.46

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Stockholder's Equity and Accumulated Other Comprehensive Income (Loss) - Stockholder's Equity (Details) - USD ($)	1 Months Ended			3 Months Ended
	Dec. 29, 2017	Aug. 31, 2017	May 31, 2017	Sep. 29, 2017	Jun. 30, 2017	Nov. 30, 2015
Equity, Class of Treasury Stock [Line Items]
Cash dividend per common share (in USD per share)	$ 0.10	$ 0.10	$ 0.10
Common stock with dividend payout (in shares)	163,828,550	163,604,848	163,760,678
Dividends paid	$ 16,400,000	$ 16,400,000	$ 16,400,000
Stock repurchase program, authorized amount						$ 400,000,000
Shares repurchases during the period (in shares)					450,000
Common stock repurchased					$ 14,300,000
Common stock, average price per share repurchased (in USD per share)				$ 31.77	$ 31.71
Stock repurchase program, remaining authorized amount	$ 305,100,000
Traded First Quarter, Settled in Second Quarter
Equity, Class of Treasury Stock [Line Items]
Shares repurchases during the period (in shares)				50,000
Common stock repurchased				$ 1,600,000

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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		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016
Net of Tax Amount
Total other comprehensive income (loss), before tax amount	$ 3	$ 28	$ (6)	$ 17
Total other comprehensive income (loss), tax impact	(1)	(11)	3	(7)
Other comprehensive income (loss), net of taxes	2	17	(3)	10
Foreign currency translation adjustments
Before Tax Amount
OCI, before tax	0	1	0	2
Tax Impact
OCI, tax impact	0	0	0	(1)
Net of Tax Amount
OCI, net of taxes	0	1	0	1
Unrealized gain on derivatives
Before Tax Amount
OCI, before tax	7	30	4	25
Tax Impact
OCI, tax impact	(2)	(12)	(1)	(10)
Net of Tax Amount
OCI, net of taxes	5	18	3	15
Amortization of prior service credit
Before Tax Amount
OCI, before tax	(4)	(3)	(10)	(10)
Tax Impact
OCI, tax impact	1	1	4	4
Net of Tax Amount
OCI, net of taxes	$ (3)	$ (2)	$ (6)	$ (6)

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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		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance			$ 359
Accumulated other comprehensive (loss) income, ending balance	$ 651		651
Cash Flow Hedge
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance			11	$ (7)
Other comprehensive income, net of taxes	5	$ 18	3	15
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests			0	0
Accumulated other comprehensive (loss) income, ending balance	14	8	14	8
Pension and Other Post-retirement Benefit Plans
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance			20	28
Other comprehensive income, net of taxes			0	0
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests			(6)	(6)
Accumulated other comprehensive (loss) income, ending balance	14	22	14	22
Accumulated Other Comprehensive (Loss) Income
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance			31	21
Other comprehensive income, net of taxes			3	16
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests			(6)	(6)
Accumulated other comprehensive (loss) income, ending balance	28	31	28	31
Foreign Currency Translation Adjustments
Accumulated Other Comprehensive Income (Loss) [Roll Forward]
Accumulated other comprehensive (loss) income, beginning balance				0
Other comprehensive income, net of taxes	$ 0	1	$ 0	1
Amounts reclassified from accumulated other comprehensive income, net of taxes and noncontrolling interests				0
Accumulated other comprehensive (loss) income, ending balance		$ 1		$ 1

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Segment Information (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Dec. 29, 2017	Dec. 30, 2016	Dec. 29, 2017	Dec. 30, 2016	Mar. 31, 2017	Apr. 01, 2016
Segment Reporting Information [Line Items]
Total assets	$ 5,300	$ 4,886	$ 5,300	$ 4,886	$ 4,888
Revenue	1,309	1,222	3,810	3,739
Segment operating income	128	104	398	346
Depreciation and amortization expense	59	61	175	189
Cash	80	162	80	162	126	$ 130
Property, plant and equipment	622		622		610
Other long-term assets	86		86		$ 87
Operating Segments
Segment Reporting Information [Line Items]
Total assets	5,129	4,564	5,129	4,564
Revenue	1,309	1,222	3,810	3,739
Segment operating income	158	128	486	419
Depreciation and amortization expense	59	61	175	189
Loss on sale of properties			(10)
Operating Segments | Defense and Intelligence
Segment Reporting Information [Line Items]
Total assets	2,447	1,970	2,447	1,970
Revenue	605	556	1,687	1,699
Segment operating income	70	37	203	149
Depreciation and amortization expense	42	35	122	103
Operating Segments | Civil
Segment Reporting Information [Line Items]
Total assets	2,682	2,594	2,682	2,594
Revenue	704	666	2,123	2,040
Segment operating income	88	91	283	270
Depreciation and amortization expense	17	26	53	86
Corporate
Segment Reporting Information [Line Items]
Total assets	171	322	171	322
Revenue	0	0	0	0
Segment operating income	(30)	(24)	(88)	(73)
Depreciation and amortization expense	0	$ 0	0	$ 0
Cash	57		57
Accounts receivable	46		46
Property, plant and equipment	31		31
Other current assets	19		19
Other long-term assets	$ 18		$ 18

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Commitments and Contingencies (Details) $ in Millions				1 Months Ended
	Nov. 22, 2017 USD ($)	Nov. 02, 2017 USD ($) extension	Jul. 15, 2017 plaintiff	Sep. 29, 2017 USD ($)	Dec. 29, 2017 USD ($)	Sep. 15, 2017 USD ($)	Mar. 31, 2017 USD ($)
Loss Contingencies [Line Items]
Lease term		12 years
Lease extensions | extension		2
Gross proceeds		$ 33.1
Loss on sale of property		$ (10.0)
Amortization period		12 years
Loss contingency, estimate of possible loss					$ 0.6
Litigation Cases Similar To Southwest Asia Employment Contract Litigation | Pending Litigation
Loss Contingencies [Line Items]
Number of plaintiffs of dismissed cases | plaintiff			58
Number of plaintiffs | plaintiff			37
Maryland Medicaid Enterprise Restructuring Project
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss	$ 0.8					$ 521.0
Undecided claim						$ 83.0
Damages sought	500.0			$ 521.0
Potential adjustments on government contracts
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss					16.3		$ 16.5
Punitive Damages | Maryland Medicaid Enterprise Restructuring Project
Loss Contingencies [Line Items]
Damages sought	500.0
Specific Counterclaim | Maryland Medicaid Enterprise Restructuring Project
Loss Contingencies [Line Items]
Damages sought	$ 44.0
Minimum | Southwest Asia Employment Contract Litigation
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss					0.6
Maximum | Southwest Asia Employment Contract Litigation
Loss Contingencies [Line Items]
Loss contingency, estimate of possible loss					2.6
Stand-by letters of credit
Loss Contingencies [Line Items]
Total guarantees outstanding					22.9		20.2
Surety bonds
Loss Contingencies [Line Items]
Total guarantees outstanding					$ 12.2		$ 12.0

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Commitments and Contingencies - Capital Leases (Details) - USD ($) $ in Millions	Dec. 29, 2017	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
2018	$ 22
2019	82
2020	78
2021	71
2022	69
2023 and thereafter	101
Total minimum lease payments	423
Less: amount representing interest and executory costs	(71)
Less: amount representing maintenance, taxes, and insurance costs	(92)
Present value of net minimum lease payments	260
Less: current maturities of capital lease liability	(50)	$ (44)
Noncurrent capital lease liability	$ 210	$ 172