Segment Information

6 Months Ended

Mar. 31, 2013

Segment Information

Segment Information

Note 11 — Segment Information

Business segment financial data is as follows (in millions):

	Six Months Ended						Three Months Ended
	March 31,						March 31,
	2013			2012			2013			2012
Sales:
Transportation Systems	$	257.4		$	257.5		$	138.8		$	131.7
Mission Support Services	235.6			234.4			122.2			126.9
Defense Systems	184.4			164.0			103.2			80.7
Other	0.3			0.5			0.1			0.3
Total sales	$	677.7		$	656.4		$	364.3		$	339.6
Operating income (loss):
Transportation Systems	$	45.4		$	41.3		$	32.2		$	23.4
Mission Support Services	7.8			9.1			3.6			4.6
Defense Systems	1.5			12.1			0.3			6.1
Unallocated corporate expenses and other	(1.8		)	(2.2		)	(1.5		)	(1.6		)
Total operating income	$	52.9		$	60.3		$	34.6		$	32.5
Depreciation and amortization:
Transportation Systems	$	1.5		$	1.7		$	1.0		$	0.8
Mission Support Services	6.5			6.5			3.4			3.0
Defense Systems	2.9			2.5			2.1			1.3
Other	0.7			0.6			0.4			0.4
Total depreciation and amortization	$	11.6		$	11.3		$	6.9		$	5.5

Changes in estimates on contracts for which revenue is recognized using the cost-to-cost-percentage-of-completion method increased operating profit by approximately $3.1 million and $7.1 million in the three months ended March 31, 2013 and March 31, 2012, respectively and increased operating profit by approximately $3.6 million and $7.8 million for the six months ended March 31, 2013 and March 31, 2012, respectively. These adjustments increased net income by approximately $2.5 million ($0.10 per share) and $4.9 million ($0.19 per share) in the three months ended March 31, 2013 and March 31, 2012, respectively, and increased net income by approximately $3.1 million ($0.12 per share) and $5.4 million ($0.20 per share) in the six months ended March 31, 2013 and March 31, 2012, respectively.

Certain of our transportation systems service contracts contain service level or system usage incentives, for which we recognize revenues when the incentive award is fixed or determinable. These contract incentives are generally based upon monthly service levels or monthly performance and become fixed or determinable on a monthly basis. However, one of our transportation systems service contracts contains annual system usage incentives which are based upon system usage compared to annual baseline amounts. For this contract the annual system usage incentives are not considered fixed or determinable until the end of the contract year for which the incentives are measured, which falls within the second quarter of our fiscal year. During the quarters ended March 31, 2013 and 2012 we recognized sales of $13.2 million and $12.2 million, respectively related to annual system usage incentives on this transportation contract which resulted in additional operating income of the same amounts in these respective periods.

In March 2013, our CDS business implemented a restructuring plan to reduce global employee headcount by approximately 150 in order to rebalance our resources with work levels that have declined due to recent delays in contract awards and contract funding. CDS incurred a resulting restructuring charge of $6.1 million in the second quarter of fiscal 2013. The total costs of the restructuring plan are not expected to be significantly greater than the charges incurred to date.

The following table presents a rollforward of our restructuring liability as of March 31, 2013, which is included within accrued compensation and other current liabilities within our Condensed Consolidated Balance Sheets (in millions):

	Restructuring Liability
	Employee Separation
Liability as of December 31, 2012	$	—
Accrued costs	6.1
Cash payments	(0.5		)
Liability as of March 31, 2013	$	5.6

Certain restructuring costs are based upon estimates. Actual amounts paid may ultimately differ from these estimates. If additional costs are incurred or recognized amounts exceed costs, such changes in estimates will be recognized when incurred.