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INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

As filed with the Securities and Exchange Commission on June 21, 2017

Registration No. 333-

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

Vencore Holding Corp.
(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)		7373 (Primary Standard Industrial Classification Code Number)		80-0653613 (I.R.S. Employer Identification Number)

15052 Conference Center Drive
Chantilly, Virginia 20151
(571) 313-6000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

Kevin T. Boyle, Esq.
Senior Vice President, General Counsel and Secretary
15052 Conference Center Drive
Chantilly, Virginia 20151
(571) 313-6000
(Name, address, including zip code, and telephone number, including area code, of agent for service)


With copies to:
Gregg A. Noel, Esq. Michelle Gasaway, Esq. Skadden, Arps, Slate, Meagher & Flom LLP 300 South Grand Avenue, Suite 3400 Los Angeles, California 90071 (213) 687-5000		Andrew J. Pitts, Esq. D. Scott Bennett, Esq. Cravath, Swaine & Moore LLP Worldwide Plaza 825 Eighth Avenue New York, New York 10019 (212) 474-1000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: o

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

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 the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer o		Accelerated filer o		Non-accelerated filer ý (Do not check if a smaller reporting company)		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 accounting standards provided to Section 7(a)(2)(B) of the Securities Act. o

CALCULATION OF REGISTRATION FEE




Title of each class of securities to be registered	Proposed maximum aggregate offering price(1)(2)	Amount of registration fee

Common stock, par value $0.01 per share	$250,000,000	$28,975

(1): Includes offering price of shares of common stock that the underwriters have the option to purchase. See "Underwriting."
(2): Estimated solely for the purpose of calculating the registration fee in accordance with Rule 457(o) under the Securities Act of 1933, as amended.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion. Dated June 21, 2017.

Vencore Holding Corp.

Common Stock

This is an initial public offering of shares of common stock of Vencore Holding Corp. We are selling shares of our common stock. Prior to this offering, there has been no public market for our common stock. We currently expect that the initial public offering price of our common stock will be between $ and $ per share.

We intend to apply to have our common stock listed on the New York Stock Exchange (the "NYSE") under the symbol "VNCR."

Investing in our common stock involves risk. See "Risk Factors" beginning on page 19 to read about factors you should consider before buying shares of our common stock.

Neither the Securities and Exchange Commission (the "SEC") nor any other regulatory body has approved or disapproved of these securities or passed upon the accuracy or adequacy of this prospectus. Any representation to the contrary is a criminal offense.


	Per Share	Total

Initial public offering price	$	$
Underwriting discounts and commissions⁽¹⁾	$	$
Proceeds to us before expenses	$	$

(1): See "Underwriting" for additional information regarding the total underwriting compensation.

We have granted the underwriters an option to purchase up to additional shares of our common stock at the initial public offering price, less the underwriting discounts and commissions, solely to cover over-allotments, within 30 days of the date of this prospectus.

The underwriters expect to deliver the shares against payment in New York, New York on , 2017.


Goldman Sachs & Co. LLC		Wells Fargo Securities

Prospectus dated , 2017.

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You should rely only on the information contained in this prospectus or in any free writing prospectus prepared by or on behalf of us. Neither we nor the underwriters have authorized anyone to provide you with additional, different or inconsistent information. If anyone provides you with additional, different or inconsistent information, you should not rely on it. Neither we nor the underwriters are making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus or such other date stated in this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

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MARKET AND INDUSTRY DATA			ii
TRADEMARKS, SERVICE MARKS AND TRADE NAMES			ii
BASIS OF PRESENTATION			ii
DEFINED TERMS			iii
PROSPECTUS SUMMARY			1
THE OFFERING			14
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA			16
RISK FACTORS			19
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS			53
USE OF PROCEEDS			55
DIVIDEND POLICY			56
CAPITALIZATION			57
DILUTION			58
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA			60
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS			63
BUSINESS			90
MANAGEMENT			121
COMPENSATION DISCUSSION AND ANALYSIS			127
PRINCIPAL STOCKHOLDERS			143
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS			145
DESCRIPTION OF CERTAIN INDEBTEDNESS			148
DESCRIPTION OF CAPITAL STOCK			153
SHARES ELIGIBLE FOR FUTURE SALE			161
UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS FOR NON-U.S. HOLDERS			163
UNDERWRITING			166
LEGAL MATTERS			171
EXPERTS			171
WHERE YOU CAN FIND MORE INFORMATION			171
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS			F-1

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MARKET AND INDUSTRY DATA

We obtained the industry, market and competitive position data used throughout this prospectus from internal company surveys and management estimates as well as from industry and general publications and research, surveys and studies conducted by third parties. Third-party industry and general publications, research, surveys and studies generally state that the information contained therein has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. While we believe that each of these studies and publications is reliable, we have not independently verified any of the data from third-party sources and cannot guarantee its accuracy and completeness.

Forward-looking information obtained from these sources involves risks and uncertainties and is subject to change based on various factors, including those discussed under "Risk Factors," "Special Note Regarding Forward-Looking Statements" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus.

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

We own or have rights to trademarks, service marks and trade names, including Vencore®, that we use in conjunction with the operation of our business. In addition, our name, logo and website name and address are our service marks or trademarks. Solely for convenience, trademarks and trade names referred to in this prospectus may appear without the ® symbol, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under the applicable law, our rights or the rights of the applicable licensor to these trademarks and trade names. Other trademarks, service marks and trade names appearing in this prospectus are the property of their respective holders.

BASIS OF PRESENTATION

As used in this prospectus, unless otherwise noted or the context otherwise requires, (1) references to "Vencore," the "Company," "we," "our," or "us" are to Vencore Holding Corp. and its consolidated subsidiaries, (2) references to "Vencore Holding" are to Vencore Holding Corp. exclusive of its subsidiaries, (3) references to "Vencore OpCo" are to Vencore, Inc., a direct and wholly owned subsidiary of Vencore, (4) references to "Parent LLC" are to The SI Organization Holdings LLC, which prior to the consummation of this offering owned 100% of Vencore Holding's outstanding common stock, (5) references to "Veritas Capital Management" are to Veritas Capital Fund Management, L.L.C. and (6) references to "Veritas Capital" are to The Veritas Capital Fund III, L.P., The Veritas Capital Fund IV, L.P. and their affiliates, including Veritas Capital Management.

NON-GAAP FINANCIAL MEASURES

We have included certain financial measures in this prospectus that are not recognized under generally accepted accounting principles in the United States ("GAAP"), including Credit Agreement Adjusted EBITDA (as defined herein). These are supplemental financial measures that are not prepared in accordance with GAAP. For additional information on why we present Credit Agreement Adjusted EBITDA, the limitations associated with using Credit Agreement Adjusted EBITDA and a reconciliation of Credit Agreement Adjusted EBITDA to the most comparable GAAP measure, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Credit Agreements."

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DEFINED TERMS


ACS		Applied Communication Sciences
ASC		Accounting Standards Codification
CMMI		Capability Maturity Model Integration
DARPA		Defense Advanced Research Projects Agency
DCAA		Defense Contract Audit Agency
DCF		Discounted Cash Flow
DCMA		Defense Contract Management Agency
DGCL		Delaware General Corporation Law
DHS		Department of Homeland Security
DISA		Defense Information Systems Agency
DoD		Department of Defense
DoJ		Department of Justice
DSO		Days Sales Outstanding
FAA		Federal Aviation Administration
FAR		Federal Acquisition Regulation
FASB		Financial Accounting Standards Board
GAAP		Generally Accepted Accounting Principles in the United States
GSA		General Services Administration
GWAC		Government-wide Acquisition Contract
IARPA		Intelligence Advanced Research Projects Activity
ID / IQ		Indefinite Delivery / Indefinite Quantity
IP		Intellectual Property
ISO		International Organization for Standardization
IT		Information Technology
NASA		National Aeronautics and Space Administration
NIP		National Intelligence Program
NGA		National Geospatial-Intelligence Agency
NOAA		National Oceanic and Atmospheric Administration
NRO		National Reconnaissance Office
NSA		National Security Agency
NYSE		New York Stock Exchange
MIP		Military Intelligence Program
ODNI		Office of the Director of National Intelligence
QNA SSG		QinetiQ North America Services and Solutions Group
R&D		Research & Development
SE&I		Systems Engineering and Integration
SEC		Securities and Exchange Commission
SETA		Systems Engineering and Technical Assistance
USCIS		U.S. Citizenship and Immigration Services
USCYBERCOM		U.S. Cyber Command
VIE		Variable Interest Entity

iii

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PROSPECTUS SUMMARY

This summary highlights certain significant aspects of our business and this offering and is a summary of information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before making your investment decision. You should carefully read this entire prospectus, including the information presented under the sections titled "Risk Factors," "Special Note Regarding Forward-Looking Statements," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus, before making an investment decision. This summary contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from results contemplated in the forward-looking statements as a result of various factors such as those set forth in the sections titled "Risk Factors" and "Special Note Regarding Forward-Looking Statements." When making an investment decision, you should also read the discussion under "Basis of Presentation" and "Defined Terms" for the definition of some of the terms used in this prospectus and other matters described in this prospectus.

Overview

Vencore is a leading provider of mission-critical, innovation-driven services and solutions to U.S. Government customers. The foundation of our business is the application of systems engineering and integration ("SE&I"), cybersecurity, big data analytics and applied research on an enterprise-wide scale to assist our U.S. Government customers in solving their most complex information-related challenges. We are a leader in the architecture and integration of highly-engineered, mission-critical information solutions across the U.S. Government, and provide enterprise-level support to multiple governmental programs that manage, collect, analyze and disseminate critical mission data to national security agencies and their customers. We maintain industry-leading expertise in providing comprehensive solutions throughout the life of multi-billion dollar systems that support the core missions of the U.S. Intelligence Community (the "Intelligence Community") and other U.S. Government agency customers. Our services and solutions span the entire lifecycle of programs, encompassing system(s) definition, architecture, agile solutions development, test and integration, deployment and operations.

For over 40 years, Vencore has provided vital and differentiated engineering and integration services and solutions that allow the Intelligence Community, the Department of Defense ("DoD"), the Department of Homeland Security ("DHS"), the National Aeronautics and Space Administration ("NASA") and other federal and civilian agencies to assess and solve increasingly complex challenges and threats. We apply our cyber, analytical and engineering expertise to anticipate, identify and resolve our customers' most demanding information-related challenges, including the effective management and integration of large and complex government systems, the efficient collection and analysis of large quantities of critical data, the migration of applications and data to the cloud and the implementation of effective cybersecurity measures to successfully detect, prevent and mitigate cyber-attacks.

Our expertise has broad applications across our customer base and places us at the core of our customers' missions. Notable examples of our services and solutions include:

•: We have supported the U.S. national space system, including space-based intelligence platforms, as a SE&I prime contractor for over 40 years.
•: We are a prime contractor for the U.S. Navy's Tomahawk program, responsible for developing and maintaining mission-critical software deployed across multiple shore and shipboard installations to ensure successful Tomahawk missions.

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•: We are the prime SE&I contractor responsible for architecting and securing both the federal civilian government (.GOV) and DoD military (.MIL) information technology ("IT") infrastructures from advanced cyber threats for the DHS and DoD.
•: We are developing technologies for the Defense Advanced Research Projects Agency ("DARPA") and commercial customers for the detection of and response to cyberattacks on critical U.S. infrastructure, including the North American power grid, and distributed denial of service attacks enabled by increasingly prolific Internet-of-Things devices.
•: We lead agile software development and modernization for the DHS's U.S. Citizenship and Immigration Services ("USCIS") benefits portfolio, which processes approximately 24,000 immigration benefit applications each day.
•: We provide center-wide engineering and technical services support for NASA's Kennedy Space Center on the nation's human spaceflight program, including software design and development for the Spaceport Command and Control System.

We categorize our primary services and solutions as SE&I, cybersecurity, big data analytics and applied research. We believe that the breadth of our capabilities differentiates us from our competitors by allowing us to architect complex systems and service the full range of our customers' requirements across the entire enterprise, often placing us at the center of the customers' missions.

•: Systems Engineering and Integration. Government systems are often extremely large in scale, have high technical complexity and rely upon disparate information management systems that lack interoperability. Managing these complexities is challenging and often drives the government customer to engage a private contractor to create a fully-integrated enterprise. Vencore provides customers with broad domain expertise to architect solutions to ensure full enterprise integration and interoperability. We provide these services throughout the project lifecycle to ensure ongoing reliability and efficient management of these systems. These capabilities enable our customers to combine a variety of disparate systems into one cohesive and reliable enterprise. Our experience includes the successful design, architecting and operation of the most complex systems-of-systems supporting the defense market and Intelligence Community.
•: Cybersecurity. Our cybersecurity capabilities include solutions for the protection against, and response to, cyber threats. Vencore's proven offerings in cybersecurity systems architecture, engineering and operations ensure that our customers apply effective cybersecurity processes, take the correct preventative measures to eliminate or reduce the potential success of an attack and have the tools in place to quickly respond to a cyber-attack. Our solutions focus primarily on critical infrastructure protection, computer network defense, computer network exploitation and cyber risk management, which have broad governmental and commercial applications. These solutions proactively identify, assess and mitigate cyber vulnerabilities to protect our customers' critical missions.
•: Big Data Analytics. Vencore has a 45-year legacy of empowering government and commercial customers to make intelligent decisions through our analytical solutions and expertise. We apply deep data analytics methodologies, beyond traditional statistics or data mining, by combining state-of-the-art analytical processes, cutting-edge algorithms and scalable machine learning techniques to extract maximum value and intelligence from large amounts of structured and unstructured data. We deploy our big data analytics solutions across a variety of customers and missions, including the support of counterintelligence threat analysis, precision communications analysis to develop insights into adversary communications and enterprise logistics management to predict and provision fleet

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management systems. These solutions allow our customers to uncover trends and produce actionable information to support and justify critical decisions.

•: Applied Research. Our team at Vencore Labs, Inc. ("Vencore Labs"), our research center within Vencore, is the driving force behind our applied research. The innovative research performed at Vencore Labs is largely funded by our customers and augmented by internal research and development ("R&D"). Vencore Labs provides us with a key competitive advantage when competing for contracts across all of our markets and allows us to continuously deliver cutting-edge solutions to our customers. Vencore's research encompasses critical technologies across a broad range of high growth technological fields such as cybersecurity, optical networking, mobility solutions, wireless communications systems and information analytics. Unlike basic research, which simply drives toward a greater understanding of a particular topic without any specific applications, our applied research activities focus on developing near-term technologies and solutions to address recognized and specific needs of our customers.

Our focus on critical technology disciplines and innovation has resulted in over 260 issued patents and pending patent applications, owned or licensed by us. The patents and patent applications we license are subject to a licensing agreement pursuant to which we own royalty-free, fully paid-up, worldwide, irrevocable licenses to certain patents that we use in the operation of our business that were retained by the seller in connection with our acquisition of Vencore Labs. Aside from patents and patent applications, we also maintain a rich portfolio of other intellectual property ("IP") derived from customer investments in our programs and augmented by our own internal R&D initiatives. We derived approximately $70.9 million of customer investment from our Vencore Labs programs for the year ended December 31, 2016. We leverage our extensive IP portfolio to drive growth across our existing programs, win new business opportunities with new and existing customers, and actively pursue commercialization opportunities. The tools we develop are often directly applicable to our core business and we actively seek opportunities to apply these solutions across our portfolio.

Our core competencies are based on our expertise in big data analytics, information solutions and cybersecurity and form the foundation of our IP portfolio and unique capabilities. Our expertise in applied research drives the continued development of our IP portfolio and domain expertise. These technical discriminators, coupled with our deep customer intimacy, have enabled us to deliver cutting-edge SE&I solutions for our core Intelligence Community and space customers as their trusted partner for over 40 years. In recent years, we have leveraged these Intelligence Community and space solutions to expand our addressable market to include the DoD and other federal government agency customers.

The primary market for our services is the U.S. Government, which represents an approximate $120.0 billion annual market opportunity across the Intelligence Community, DoD, DHS, NASA and other federal civilian agencies. Owing to our extensive history as a leading SE&I contractor for the Intelligence Community, we have successfully applied our differentiated solutions to establish crucial positions at important adjacent customers, including the DoD, DHS, the General Services Administration ("GSA"), the National Oceanic and Atmospheric Administration ("NOAA") and other federal agencies. Today, we define our core markets as intelligence, defense, space, federal civilian agencies, and the commercial market. Our core government markets remain well funded by the U.S. federal budget and we believe our capabilities are directly aligned with high growth areas of the federal government budget. We believe our suite of services and solutions positions us to benefit from the U.S. Government's increased focus on technological and intelligence-based innovation in recent years.

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Our primary customers include key intelligence, defense, space and federal civilian agencies, such as the National Security Agency ("NSA"), the National Reconnaissance Office ("NRO"), the National Geospatial-Intelligence Agency ("NGA"), the Office of the Director of National Intelligence ("ODNI"), the Defense Information Systems Agency ("DISA"), the Departments of the Navy, Army and Air Force, DARPA, the Federal Aviation Administration ("FAA"), the DHS, NASA, the Department of Justice ("DoJ"), the GSA and classified intelligence customers, among others.

We perform our services and solutions across all of our core markets, which involve similar customers comprising primarily the U.S. Government and its agencies. These markets operate under the same or similar regulatory environments and are subject to federal regulations and standards. We operate in a highly integrated and collaborative environment and therefore have one reportable segment. Accordingly, we present and describe historical financial data related to the operations and financial condition of our business as a whole.

We serve as the prime contractor on 89% of our work, as measured by annual revenue. Our prime contractor role provides us with unique insights into our customers' needs and creates a distinct advantage when re-competing for expiring contracts. We believe the sensitivity and complexity of our work, our unique mission understanding and our proprietary processes and tools developed over decades-long support of our customers' missions make it difficult for our competitors to displace us. This is evidenced by our 97% historical re-compete win rate, as measured by contract value including option years, and an average award fee score of 93%, as measured by the total award fee earned from the total award fee available, since 2011. In addition, we have longstanding relationships with our customers, with relationships with certain key customers spanning over 40 years. Notably, we have supported the NRO and NASA for over 40 years, the NGA for over 30 years, the NSA, U.S. Navy, U.S. Army and DARPA for over 20 years and the DHS for over 15 years. These longstanding relationships have allowed us to establish profound trust with our customers and are further enhanced by a high degree of customer integration and co-location at customer facilities. As of December 31, 2016, approximately 1,822, or 49%, of our employees, were primarily located at a customer facility, which further embeds us with our customers and provides us with a high degree of customer intimacy. For the year ended December 31, 2016, we derived 79% of our revenue from cost-reimbursable contracts, 10% from time-and-materials contracts and 11% from fixed-price contracts. Under our cost-reimbursable contracts, we are paid for all of our allowed expenses up to a set limit, which provides protection against potential losses from higher costs than anticipated, and paid a fee, which may be fixed or performance-based. Under our time-and-materials contracts, we are reimbursed for the hours worked using the predetermined hourly rates for each labor category and are typically reimbursed for other direct contract costs and expenses at cost, which provides some protection against potential losses and also the ability to achieve higher profit margins than under our cost-reimbursable contracts. Under our fixed-price contracts, we perform specific tasks for a pre-determined price and may not make adjustments upward or downward based upon costs, which presents risk of potential losses due to higher than expected costs but at the same time provides the opportunity for profit improvement.

Our employee base is largely composed of highly-trained engineering professionals, many with the highest level of security clearances, which we believe represents a critical competitive advantage. As of December 31, 2016, we had approximately 3,750 full-time equivalent employees, of which 2,755, or 73%, held security clearances. Of our employees with security clearances, 1,805, or 66%, held Top Secret / Sensitive Compartmented Information clearances which typically require a polygraph. In order to maintain the depth and breadth of our employee base, we actively recruit top talent from prestigious universities, including PhDs with expertise in key knowledge areas.

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For the year ended December 31, 2016, we generated revenues of $1.2 billion. Our industry-leading re-compete and new business award rates, significant prime contractor mix and $2.5 billion backlog provide us with near term revenue and earnings visibility.

Revenue Breakdown for the Year Ended December 31, 2016

By Role		By Contract Type		By Market

Our Services and Solutions

We organize our capabilities across three primary types of services and solutions: SE&I, cybersecurity and big data analytics. We also perform customer-directed applied research, which serves as the research and development engine of our business, driving innovation and cutting-edge solutions that may be applied across all of our end markets and customers.

Systems Engineering and Integration

SE&I is the core of our mission and expertise. Our experience includes the successful design, architecting and operation of the most complex systems-of-systems supporting the defense market and Intelligence Community. Our principal SE&I capabilities include systems engineering, enterprise architecture, program management, software engineering and cloud engineering. We also deliver test and evaluation capabilities used to assess systems before deployment; independent verification and validation capabilities used to verify that new systems operate as specified; and modeling, simulation, and analysis capabilities, which complement our SE&I expertise by predicting systems' performance and effectiveness at completing mission requirements.

Government systems are often very large and complex and frequently rely on a network of disparate sub-systems. Managing these complexities is challenging and often drives the government customer to engage a private contractor to create a fully-integrated enterprise. Vencore provides customers with broad domain expertise to architect solutions to ensure full enterprise integration and interoperability. We provide these services throughout the project lifecycle to ensure ongoing reliability and efficient management of these systems. These capabilities enable our customers to combine a variety of disparate IT systems and sub-systems into one cohesive and reliable enterprise.

Our SE&I services also include IT and cloud engineering, software engineering development and agile software development capabilities. Our IT and cloud engineering capabilities include IT infrastructure design and development, cloud engineering and transition, network engineering and analysis and system performance forecasting. Additionally, we believe we are a leader in enterprise-scale agile solutions, notably agile software development and agile SE&I capabilities. Agile software development focuses on breaking product development work into small increments that minimize the amount of up-front planning and design, increase the frequency of testing and deliver functional capability early and continuously. Our ability to progressively design, test and apply solutions to

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emergent problems, in close collaboration with customer teams, results in effective, affordable and timely solutions.

Cybersecurity

Incidents of cyber-attacks have increased both in frequency and complexity, driving our government customers to assume a more proactive approach to understanding and managing their cyber vulnerabilities. Our proven offerings in cybersecurity systems engineering and solutions help our customers implement appropriate cybersecurity processes, identify key vulnerabilities, take correct measures to mitigate risks, and have the tools to quickly respond to an attack.

Big Data Analytics

Vencore provides innovative and cost-effective solutions by applying a deep data analytics methodology that goes beyond traditional statistics or data mining. Our innovative solutions combine advanced predictive analytical techniques, cutting-edge algorithms and machine learning techniques to efficiently analyze large amounts of unstructured data and help our customers make critical decisions. This allows us to more effectively uncover patterns and extract the intelligence required to help our customers enhance readiness and achieve mission success. Our solutions are typically deployed by our customers to identify threats, recommend areas of optimization, forecast multifaceted outcomes and mitigate risks.

Applied Research

Our applied research capabilities build upon our culture of technology innovation to help customers reframe information and technology-related problems, define their options and deliver transformative results. In contrast to basic or exploratory research, the technologies and processes developed through our applied research are principally focused on technologies with practical applications on the near-term horizon. Our solutions enable government agencies, utilities and commercial enterprises to develop and apply cutting-edge technologies in cybersecurity, wireless and optical communications, IT, mobility solutions and data analytics. We believe that these capabilities provide us with near-term revenue opportunities and a meaningful advantage when competing for new business.

Our applied research activities are driven by Vencore Labs. Vencore Labs provides us with the ability to develop some of the world's most advanced technologies alongside our government and university partners and deploy these technologies not only into existing programs, but also in new applications and markets. The innovative research performed at Vencore Labs is largely customer-funded and augmented by our own internal R&D budget. The successful development of

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proprietary technologies for a particular customer or contract often can be leveraged across our portfolio to capture new contract and commercialization opportunities.

Our Markets

We primarily serve the intelligence, defense, space, federal civilian and commercial markets. Across these markets, our primary customer in aggregate is the U.S. Government, which comprised substantially all of our revenue for the year ended December 31, 2016. The U.S. Government is the largest consumer of information and technology services in the United States, and the DoD is the largest consumer within the U.S. Government. We believe we are well-positioned to benefit from an improving outlook across each of our core markets. Since the U.S. Government's fiscal year ("U.S. fiscal") 2011, the U.S. Government has spent an average of approximately $77.0 billion annually on information and technology services. In U.S. fiscal 2017, the U.S. Government is expected to spend $81.6 billion, according to PSC Vision.

Within our core markets, spending in certain key technology areas is projected by industry sources to exceed broader federal government budget growth. In particular, spending for federal cybersecurity, cloud computing and migration and big data analytics is forecasted to grow by a compound annual growth rate of 5%, 15%, and 13%, respectively, through 2021, according to Deltek GovWin. We believe we possess unique capabilities that are strategically aligned with these key areas of U.S. Government budgetary focus. We believe the continued adoption of these technologies, coupled with the U.S. Government's desire for increased innovation, creates attractive growth opportunities for our business within our core markets.

Intelligence

The U.S. intelligence market is typically defined as the 16 agencies that make up the Intelligence Community. These agencies are funded by the National Intelligence Program ("NIP") and Military Intelligence Program ("MIP") budgets. The U.S. fiscal 2017 budget request includes $54.9 billion for NIP and $18.5 billion for MIP, for an aggregate of $73.4 billion, up from $70.7 billion in U.S. fiscal 2016.

The Intelligence Community is responsible for protecting the country from terrorism, arms proliferation, chemical and biological warfare, cyber-attacks and foreign intelligence operatives. Improving collection, analysis and dissemination capabilities is essential to national intelligence, policy and military operations. To achieve its mission, the Intelligence Community must operate systems that are extremely large in scale, have high technical complexity and depend on a disparate suite of IT systems. Budget priorities in the Intelligence Community highlight the U.S. Government's focus on innovation and keeping pace with the complex, rapidly changing technological environment and the evolving nature of the threats to our national security. As such, we believe Intelligence Community spending will emphasize space systems and payloads, increased intelligence sharing, investments in enterprise-wide capabilities, increased migration to cloud architectures and modernization of legacy systems to improve efficiency and information security. These are all capability areas where we have strong expertise.

The Intelligence Community's prioritization of technological innovation places Vencore in alignment with key funding priorities. Our technical expertise in areas such as space protection, communications and network engineering, cloud engineering, space and satellite engineering, cyber threat analysis, vulnerability assessment and forensic analysis positions us well to continue meeting requirements for new technology engineering, testing and integration. Additionally, we are a leader in enterprise-scale SE&I and agile software development solutions supporting the Intelligence Community's key IT enterprise transformation initiatives.

We possess deep ties with many key Intelligence Community agencies, including ODNI, NGA, the Intelligence Advance Research Projects Activity ("IARPA"), NSA, and classified customers. Our largest individual intelligence customer is the NGA. We have over 30 years of experience supporting the NGA and possess deep domain knowledge of the NGA's over 600 mission systems.

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Defense

The defense market for our services is comprised of U.S. Government defense agencies within the DoD that rely on large and complex systems that span multiple agencies, programs and missions. In U.S. fiscal 2016, the overall DoD base budget was $521.7 billion, with $30.8 billion allocated to IT systems procurement, according to the Office of the Under Secretary of Defense. Under the new administration, we believe the defense budget outlook has improved meaningfully, as we expect the new administration to increase defense spending relative to prior years and eliminate sequester caps.

We believe our capabilities in the defense market position us well to help the DoD implement this strategy. Our capabilities in the defense market center around supporting our defense customers in architecting and integrating large, complex and disparate systems into a cohesive and efficient enterprise. We provide best-in-class system architecting and engineering, software development, integration, and operational support for mission-critical enterprise solutions for our defense customers. Our solutions span a wide spectrum of innovative technologies, most notably software design and development for cloud and mobile; network engineering and optimization; cybersecurity system engineering and architecture; and modeling, simulation and training.

Space

The space market is comprised of space-related U.S. Government agencies, most notably NASA, the NRO, NOAA and the DoD. Demand for these services is driven primarily by NASA's budget and the space-related DoD budget. NASA had a $19.0 billion budget in U.S. fiscal 2017, of which $8.4 billion was allocated towards U.S. human exploration operations, according to NASA. The new administration has called for an increased focus on missile defense initiatives and manned spaceflight and human space exploration positions. The trend toward privatization of launch services also provides us with opportunities for future growth. We believe we are well-positioned in the space market given our existing space engineering expertise.

The complex, disparate nature of space-based and ground-based national security and intelligence systems requires sophisticated architecting and integration of component systems. As a result, these agencies frequently rely on contractors for full lifecycle SE&I and mission support. We are consistently entrusted by the space community to solve its largest, most complex engineering and integration-related problems.

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from the U.S. Government's increased budgetary focus on space exploration. Key capabilities include mission-facing SE&I and end-to-end enterprise architecture. In addition, we engineer both hardware, including satellites and ground support equipment, and software. We offer solutions that allow our customers to conduct pre-mortem analysis, including independent verification and validation and advanced modeling, simulation and analysis. Our technical domains include ground processing and equipment, launch support, command and control, safety and mission assurance, space vehicle engineering, satellite navigation and geolocation, and communications systems. In addition, we work with our customers to support geospatial and signals intelligence.

We have relationships with many of the largest space-related agencies within the U.S. Government, including the NOAA, the NRO, NASA and the Air Force Space and Missile Systems Center. Our largest space customer for the year ended December 31, 2016 was NASA, which we have supported for over 40 years.

Federal Civilian

We are actively engaged in providing highly complex, mission-critical services to a large number of the U.S. Government's key federal civilian agencies, including the DHS, the DoJ, the GSA, the SEC, the Department of Treasury and the FAA.

In the federal civilian market, demand for our services is driven by the budgets of our customers. Our largest federal civilian customer is the DHS. In U.S. fiscal 2016, the DHS had a $41.0 billion budget, of which approximately $6.0 billion was spent on IT, according to itdashboard.gov. The DHS budget for U.S. fiscal 2017 includes $275.0 million to strengthen the operational security of federal .GOV networks. Additionally, the U.S. fiscal 2017 budget proposed $471.0 million for the National Cybersecurity Protection System, commonly referred to as EINSTEIN, to prevent intrusions, enhance information sharing and improve analytical capabilities to secure the federal civilian IT enterprise. As the prime SE&I lead for the National Cybersecurity Protection System, Vencore is well-positioned to benefit as the DHS continues to focus on enhancing its cybersecurity capabilities.

Across the federal civilian market, agencies' vast troves of highly sensitive data and sprawling network of potentially vulnerable IT systems make them a frequent target of intrusions and attacks. As such, federal civilian agencies are increasingly relying on contractors to architect and integrate comprehensive cybersecurity solutions to protect critical infrastructure and complex information networks. Additionally, federal civilian agencies are increasingly focused on streamlining costs and improving IT efficiency through agile software development methodologies. Vencore's key areas of expertise in cybersecurity, agile software development, data analytics and other innovation- and efficiency-driven solutions are well-positioned to benefit from these secular trends and focus areas projected to experience outsized spending growth.

Commercial

We actively pursue opportunities to leverage our existing core competencies and extensive IP portfolio to continue to expand into adjacent commercial markets. The innovative IP developed at Vencore Labs, much of which is funded by customer development budgets, provides us with opportunities to develop cutting-edge technology that may be applied to a wide variety of commercial markets. Our approach to monetization includes IP sales, recurring licenses, joint ventures, and strategic industry partnerships.

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8.3%, more than twice the rate of overall IT spending growth, per annum through 2020 driven by the increasing complexity and volume of cyber-attacks. We believe Vencore is well positioned to capture new revenue opportunities in commercial cybersecurity by leveraging our IP portfolio and commercial-ready products to help corporations identify and protect against cyber threats.

Our Strengths

Systems Engineering and Integration Expertise with Large, Complex Programs for Defense and Intelligence Community Customers

The depth, breadth and length of our relationships with our customers in the defense market and Intelligence Community is rooted in our unique ability to deliver SE&I services and solutions to solve the most complex and technologically-demanding problems facing our customers. We provide end-to-end engineering and technical solutions that are vital to the success of our customers' core missions. Our deep domain expertise provides us with the distinctive ability to architect and integrate multi-billion dollar systems supporting core national security requirements. Our set of processes and capabilities, along with our experienced and highly-qualified employee base, make us a valuable partner to our increasingly technologically-focused customers. Vencore maintains leadership positions on a number of the Intelligence Community's largest and most complex programs. We are often the only provider with the capabilities and expertise to meet the specific requirements of these programs.

Unique Expertise in Cybersecurity and Data Analytics

We believe we are uniquely positioned to apply our expertise in cyber technologies and data analytics on an enterprise-wide basis to provide engineering-based solutions to support demanding customers throughout the Intelligence Community and U.S. federal agencies. We operate at the forefront of the cybersecurity industry and are renowned for our expertise in effectively preventing and responding to cyberattacks through advanced rapid attack and anomaly based detection methods. Our data analytics prowess relies on our advanced predictive analytics, cutting-edge algorithms and machine learning techniques, which together allow us to manage enormous volumes of unstructured data to uncover patterns and anomalies key to producing actionable intelligence.

We are well-positioned to benefit from increased U.S. Government budgetary focus on cybersecurity and data analytics. Cybersecurity remains an area of critical importance in the Intelligence Community and DoD, driven by increased reliance on connected devices and systems and the potential vulnerabilities to cyberattacks that they create. Furthermore, U.S. Government funding for big data analytics is expected to increase as the volume of data being collected and generated by U.S. Government agencies increases and the use of cloud-based information systems and mobile technologies becomes more prevalent.

Prime Contractor Role on Majority of Contracts

For the year ended December 31, 2016, we served as prime contractor on 89% of our contracts as measured by revenue. As the prime contractor on the majority of our programs, we believe we are uniquely positioned to pursue additional growth on existing contracts and new business opportunities with our current customers. We also maintain a prime contractor position on a significant number of government- and agency-wide indefinite delivery / indefinite quantity ("ID/IQ") contracts and blanket purchase agreements. Our customers in the defense and federal civilian markets increasingly rely on ID/IQ and other multiple contract award vehicles to procure services. According to the United States Government Accountability Office, from 2011 to 2015 approximately one-third of all government contract obligations involved ID/IQ contract vehicles with

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annual obligations under these contracts totaling more than $130.0 billion during that period. Our prime role on ID/IQ contracts enables us to continue to expand our addressable market and drive growth through the capture of new task orders by utilizing our sophisticated enterprise capture experts and tools to source new contract opportunities.

Robust IP Portfolio and Proven Reputation as a Technology Innovator

Our proprietary processes and IP are the result of over 40 years of mission and domain expertise in critical technology solutions engineered for our customers. Through both internal investment and customer-funded research, we have developed a valuable IP portfolio which today consists of over 260 issued patents and pending patent applications, owned or licensed by us. Our IP portfolio is focused on technical domains with strong government budgetary support, including big data analytics, cybersecurity, advanced networking and simulation. We believe our IP represents a vital differentiating feature in our pursuit of new business applications.

Depth and Breadth of Customer Relationships

We have a 45-year history of partnering with key government agencies on vital programs and platforms. We have a reputation for innovation and reliability among our customers and have been entrusted with supporting some of our nation's most important national security priorities. The nature of the work we perform for our customers places us at the core of their missions, providing us with unique insights and allowing us to anticipate future needs of these highly-complex programs. The unique requirements and complexity of the work we perform, exceptional contract performance evidenced by an average award fee score of 93% since 2011 and intimacy with our customers creates mission familiarity that represents a significant barrier to entry and makes it difficult for our competitors to displace us.

Our People

Our employees are our most valuable and important asset. We have a world-class employee base marked by a highly-educated technical team and a large number of employees with security clearances. We believe the quality and credentials of our employees represent a key differentiating feature in the market for our services. As of December 31, 2016, 73% of our employees held security clearances and 66% of our employees with security clearances held a Top Secret / Sensitive Compartmented Information-level clearance, which typically requires the completion of a polygraph. Furthermore, we are led by an experienced team of senior leaders with a long history of supporting our nation's most demanding customers and critical missions. Our team places a heavy emphasis on business development, lean operations and delivering exceptional results, and has the ability and drive to execute on the company's strategic plans and goals. Our senior leadership has an average of over 20 years of experience in relevant industries or roles and are well regarded by our customers and partners.

Strong Business and Financial Profile

Our highly differentiated business model and unique capabilities are the foundation of our business and facilitate our strong financial performance. Specifically, our industry-leading re-compete and new business win rates, as measured by contract value including option years, of approximately 97% and 33%, respectively, since 2011, strong mix of prime contractor roles and $2.5 billion backlog and $8.5 billion qualified pipeline as of December 31, 2016, have afforded us strong historical financial performance and provide us with meaningful revenue and earnings visibility as we look to the future. Aggressive working capital management, minimal capital requirements and a significant tax shield result in strong cash generation.

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Strategy for Growth

Increase Our Penetration with Existing Customers

Our core markets supporting the Intelligence Community, DoD, space and federal civilian agencies remain well-funded, and our current contracts provide a stable base for growth. Vencore is committed to maintaining and growing our core business by leveraging our exceptional contract performance (average award fee score of 93% since 2011) and technologies to drive further penetration with existing customers. Our presence with key customers in the Intelligence Community, DoD, space and federal civilian markets represent a total addressable market of approximately $120.0 billion.

Leverage Core Competencies to Target and Win Large Programs

The development and support of large, complex programs is the foundation upon which Vencore was built and remains central to our continued growth strategy, particularly in high-growth adjacent and underpenetrated markets in the federal civilian and DoD market. The Company's innovations in cybersecurity, data analytics and wireless communications technologies and our continuing focus on applied research are strongly aligned with areas of growing budgetary support. We focus on targeting and winning large and complex programs by leveraging our exceptional contract performance, proprietary technology-enabled solutions and large ID/IQ contract portfolios. Securing roles on complex programs allows us to establish franchise positions with new customers and places us at the core of our customers' missions. These contracts also afford us unique access to and knowledge of the customer, which make it difficult for our competitors to displace us.

Continue to Expand and Apply Our Suite of IP and Technological Capabilities

Our broad suite of IP and technological capabilities are a core competitive advantage and vital to our growth strategy. As of December 31, 2016, Vencore's IP portfolio included more than 260 issued patents and pending patent applications, owned or licensed by us. These patents and patent applications are based on institutional and product knowledge developed over decades, solving our customers' most challenging problems in key disciplines such as cybersecurity, advanced networking and analytics. Our proprietary tools and technologies further enhance our customer relationships and create meaningful barriers to entry, while also improving our competitive position on new contract pursuits through the offering of differentiated solutions. In particular, our capabilities and IP position us to capture the growing demand among government and commercial markets for information systems that are highly secure, scalable, reliable, interoperable and mobile. We apply these capabilities to achieve better mission outcomes, drive efficiencies and automation and address emerging threats.

Key to our strategy is the further application of our differentiated cybersecurity and data analytics technology capabilities from our programs and applied research to win new business. The volume of data that is both collected and generated by government agencies has increased exponentially in recent years. However, the capacity to harness and exploit this data to further the U.S. Government's mission has struggled to keep pace. Significant funding support exists for government big data initiatives, which seek to advance the core technologies needed to collect, store, preserve, manage, analyze and share massive quantities of data. A government-wide focus on reducing costs, increasing transparency and improving results is driving investments in data analytics across all major agencies in the intelligence, defense, space and federal civilian markets. According to Gartner, in 2016, the U.S. Government spent approximately $45.0 billion on big data initiatives. This is expected to grow to $66.0 billion by 2020.

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Pursue Opportunities to Commercialize and Monetize our IP Portfolio

For decades, we have been supporting our Intelligence Community customers and analyzing large data sets for anomalies. Recently, we have attempted to commercialize this technology through increasingly widely available public data sets. Our commercialization strategy, led by our Vencore Innovation Works initiative, is focused on application of our solutions to high-growth commercial adjacencies. Our portfolio consists of unique and cutting-edge IP and solutions developed over decades of solving our customers' most challenging problems. We are currently pursuing numerous commercialization initiatives at various stages of development. These initiatives provide us with access to future potential earnings and monetization opportunities in high growth, multi-billion dollar commercial markets at limited incremental expense.

Veritas Capital

Prior to the consummation of this offering, Veritas Capital, which includes Veritas Capital Management, beneficially owned approximately 90% of our common stock. Veritas Capital Management is a leading private equity firm that invests in companies that provide critical products and services, primarily technology and technology-enabled solutions, to government and commercial customers worldwide. Veritas Capital Management, through its private equity funds, has originated and managed more than 75 acquisitions in the firm's target industries, which include the sectors of aerospace and defense, communications, education, energy, government services, healthcare, national security, and technology. In addition to Vencore, Veritas Capital Management's current portfolio companies include Abaco Systems, Inc., Alion Science and Technology Corporation, Anaren, Inc., BeyondTrust Software, Inc., CPI International, Inc., Emergency Communications Network, LLC, Excelitas Technologies Corp., KeyPoint Government Solutions, Inc., MHVC Acquisition Corp., SolAero Technologies Corp., StandardAero Aviation Holdings, Inc. and Verscend Technologies, Inc.

After the consummation of this offering, including the Conversion (as defined herein), Veritas Capital will beneficially own approximately % of our common stock, or approximately % of our common stock if the underwriters exercise their over-allotment option in full. As a result, we will be a "controlled company" as defined under the NYSE Listing Rules, and we intend to take advantage of the "controlled company" exemption from certain of the corporate governance listing standards of the NYSE. Furthermore, Veritas Capital will continue to have significant influence over us and decisions made by our stockholders and may have interests that differ from yours. See "Risk Factors — Risks Related to this Offering and Ownership of Our Common Stock." and "Certain Relationships and Related Party Transactions — The Offering Transactions."

Corporate Information

Vencore Holding was incorporated in Delaware on October 11, 2010. Our executive offices are located at 15052 Conference Center Drive, Chantilly, Virginia 20151, and our telephone number at that location is (571) 313-6000. We maintain a corporate website at www.vencore.com. The information contained on or accessible through our corporate website or any other website that we may maintain is not part of this prospectus or the registration statement of which this prospectus is a part.

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THE OFFERING


Common stock offered by us		shares.
Underwriters' over-allotment option to purchase additional shares of common stock from us		shares.
Common stock to be outstanding immediately after this offering		shares (or shares if the underwriters exercise their over-allotment option in full) giving effect to the Conversion.
Proposed NYSE ticker symbol		"VNCR"
Use of proceeds		We estimate that the net proceeds to us from our sale of shares of common stock in this offering, after deducting estimated underwriting discounts and commissions and estimated offering expenses payable by us, will be approximately $ (or $ if the underwriters exercise their over-allotment option in full, giving effect to the Class A Dividend (as defined herein)).
		We intend to use $ million of the net proceeds from this offering (or $ if the underwriters exercise their over-allotment option in full, giving effect to the Class A Dividend) to repay a portion of the outstanding indebtedness under our First Lien Term Loan (as defined herein) and our Second Lien Term Loan (as defined herein) and to pay fees and expenses related thereto. In addition, $ million of the net proceeds from this offering will be paid to Veritas Capital Management as a transaction fee in connection with this offering under its advisory agreement with us. See "Use of Proceeds."
		If the underwriters exercise their over-allotment option, % of the aggregate net proceeds from the sale of shares pursuant to such option will be used to pay the Class A Dividend. To the extent the underwriters exercise their over-allotment option in full and assuming Parent LLC distributes the Class A Dividend to its members, Veritas Capital will receive $ million of the aggregate net proceeds from this offering. See "Dividend Policy" and "Certain Relationships and Related Party Transactions — The Offering Transactions."

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Lock-up agreements		In connection with this offering, we, our officers, directors and the Veritas Holders (as defined herein), prior to this offering have each agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of our or their shares of common stock or securities convertible into or exchangeable for shares of common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the representatives of the underwriters. See "Underwriting."
Risk factors		See "Risk Factors" beginning on page 19 and other information included in this prospectus for a discussion of factors you should carefully consider before deciding to invest in our common stock.
Dividend policy		We do not intend to pay cash dividends on our common stock for the foreseeable future. See "Dividend Policy."

The number of shares of our common stock to be outstanding immediately after the consummation of this offering presented in this prospectus (unless we indicate otherwise or the context otherwise requires) is based on the number of shares of common stock outstanding as of March 31, 2017 and does not reflect shares of common stock that are reserved for future issuance under our Equity Incentive Plan (as defined herein).

Unless we indicate otherwise or the context otherwise requires, all information in this prospectus:

•: Assumes (1) no exercise of the underwriters' over-allotment option to purchase additional shares of our common stock from us and (2) an initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover of this prospectus;
•: Assumes the filing and effectiveness of our amended and restated certificate of incorporation and the adoption of our second amended and restated bylaws, each of which will occur immediately prior to the consummation of this offering; and
•: Gives retroactive effect to the Conversion.

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA

The following tables summarize our historical consolidated financial and other data for the periods and as of the dates indicated.

We have derived the summary historical consolidated financial data for the years ended December 31, 2014, December 31, 2015 and December 31, 2016 and as of December 31, 2015 and December 31, 2016 from our audited consolidated financial statements and notes thereto included elsewhere in this prospectus. We have derived the summary balance sheet data as of December 31, 2014 from our unaudited consolidated financial statements and notes thereto that are not included in this prospectus. We have derived the summary historical consolidated financial data for the three months ended March 31, 2016 and March 31, 2017, and as of March 31, 2017, from our unaudited consolidated interim financial statements and notes thereto included elsewhere in this prospectus. We have derived the summary balance sheet data as of March 31, 2016 from our unaudited consolidated interim financial statements and notes thereto that are not included in this prospectus. Our unaudited consolidated interim financial statements were prepared on a basis consistent with our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the financial information.

Our historical results are not necessarily indicative of future operating results, and the results for any interim period are not necessarily indicative to the results that may be expected for a full fiscal year. Because the data in this table is only a summary and does not provide all of the data contained in our consolidated financial statements, the information should be read in conjunction with "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of

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Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.


		Year Ended December 31,									Three Months Ended March 31, (Unaudited)

($ in thousands)		2014			2015			2016			2016			2017

Consolidated Statement of Operations Data:
Revenue	$	1,001,578		$	1,166,645		$	1,168,067		$	295,756		$	284,684
Operating costs and expenses
Cost of revenue (excluding depreciation and amortization)		(853,816	)		(981,811	)		(985,205	)		(249,681	)		(240,945	)
General and administrative expenses		(72,165	)		(77,925	)		(70,204	)		(18,028	)		(18,812	)
Depreciation and amortization		(30,499	)		(29,122	)		(28,303	)		(6,997	)		(7,138	)
(Loss) gain on contingent consideration		(12,865	)		7,897			—			—			—
Lease abandonment expense		(21,645	)		—			—			—			—
Deferred contract costs		(1,833	)		(2,854	)		(6,493	)		(1,638	)		(1,286	)
Impairment of trade name		(56,000	)		—			—			—			—
Gain on pension plan		2,771			1,239			6,451			1,250			2,266

Total operating costs and expenses		(1,046,052	)		(1,082,576	)		(1,083,754	)		(275,094	)		(265,915	)

(Loss) income from operations		(44,474	)		84,069			84,313			20,662			18,769
Interest expense		(55,219	)		(60,941	)		(63,959	)		(15,472	)		(15,951	)
Debt extinguishment costs		(8,044	)		—			(7,159	)		—			—
Other, net		318			597			1,761			108			114
Investment gain		—			—			—			—			2,951

(Loss) income before income taxes and equity in net earnings of affiliate		(107,419	)		23,725			14,956			5,298			5,883
Income tax expense		(2,488	)		(13,315	)		(13,929	)		(4,602	)		(2,449	)

(Loss) income before equity in net earnings of affiliate		(109,907	)		10,410			1,027			696			3,434
Equity in net earnings of affiliate		—			—			—			—			(106	)

Net (loss) income	$	(109,907	)	$	10,410		$	1,027		$	696		$	3,328



Per Share Data:⁽¹⁾
Weighted average shares outstanding
Basic
Diluted
Earnings per share
Basic
Diluted

(1): Assumes no exercise of the underwriters' over-allotment option to purchase additional shares of our common stock from us and gives retroactive effect to the Conversion.

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		As of December 31,							As of March 31, (Unaudited)

($ in thousands)		2014 (Unaudited)		2015		2016			2016		2017

Consolidated Balance Sheet Data:
Cash and cash equivalents	$	26,183	$	62,207	$	38,504		$	58,951	$	34,379
Accounts receivable, net		194,209		154,314		148,971			169,732		147,014
Restricted cash		25,462		160		—			160		—
Prepaid expenses and other current assets		13,329		19,026		16,777			17,995		18,058

Total current assets		259,183		235,707		204,252			246,838		199,451

Property and equipment, net		38,296		30,737		31,916			30,458		29,837
Purchased intangibles, net		296,144		276,354		257,913			271,696		253,271
Goodwill		382,965		382,965		382,965			382,965		382,965
Other long-term assets		64,365		63,503		56,674			63,302		55,141

Total assets	$	1,040,953	$	989,266	$	933,720		$	995,259	$	920,665



Total current liabilities		191,275		145,225		159,805			148,127		142,937
Total liabilities and contingencies		1,001,242		952,420		1,081,726			958,126		1,065,921
Total stockholder's equity (deficit)		39,711		36,846		(148,006	)		37,133		(145,256	)

Total liabilities and stockholder's equity	$	1,040,953	$	989,266	$	933,720		$	995,259	$	920,665


		Year Ended December 31,									Three Months Ended March 31 (Unaudited)

($ in thousands)		2014			2015			2016			2016			2017

Consolidated Cash Flow Data:
Net cash provided by (used in) operating activities	$	492		$	48,489		$	65,227		$	1,471		$	(4,363	)
Net cash (used in) provided by investing activities		(184,842	)		18,096			(13,783	)		(3,724	)		1,741
Net cash provided by (used in) financing activities		151,371			(30,561	)		(75,147	)		(1,003	)		(1,503	)

Total (decrease) increase in cash and cash equivalents	$	(32,979	)	$	36,024		$	(23,703	)	$	(3,256	)	$	(4,125	)



Other Data:
Capital expenditures	$	(3,971	)	$	(14,107	)	$	(10,195	)	$	(2,761	)	$	(1,595	)


		Year Ended December 31,						Three Months Ended March 31

($ in thousands)		2014		2015		2016		2016		2017

Backlog (at end of period):
Funded	$	402,470	$	393,660	$	340,531	$	488,921	$	330,991
Unfunded		2,185,346		1,823,596		2,163,195		2,045,082		2,270,376

Total backlog	$	2,587,816	$	2,217,256	$	2,503,726	$	2,534,003	$	2,601,367

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RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the following risks as well as the other information included in this prospectus, including "Special Note Regarding Forward-Looking Statements," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and the related notes thereto included elsewhere in this prospectus, before investing in our common stock. Any of the following risks could materially and adversely affect our business, financial condition, results of operations or prospects. However, the selected risks described below are not the only risks facing us. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially and adversely affect our business, financial condition, results of operations or prospects. In such a case, the trading price of the common stock could decline and you may lose all or part of your investment in us.

Risks Related to Our Business

We depend on contracts with U.S. Government agencies for substantially all of our revenue. If our relationships with such agencies are harmed, our future revenue and operating profits could materially decline.

The U.S. Government is our primary client, with revenue from contracts and task orders, either as a prime or a subcontractor, with U.S. Government agencies accounting for substantially all of our revenue for the year ended December 31, 2016. We believe the future growth of our business will continue to depend primarily on our ability to be awarded work under U.S. Government contracts, as we expect this will be the primary source of substantially all of our revenue in the foreseeable future.

For this reason, any issue that compromises our relationship with the U.S. Government generally or any U.S. Government agency that we serve could cause our revenue to materially decline. Among the key factors in maintaining our relationship with U.S. Government agencies are our performance on contracts and task orders, the strength of our professional reputation, compliance with applicable laws and regulations, and the strength of our relationships with client personnel. In addition, the mishandling or the perception of mishandling of sensitive information, such as our failure to maintain the confidentiality of sensitive information associated with the work we perform for our clients, or even the existence of our business relationships with certain of our clients, including as a result of misconduct or other improper activities by our employees or subcontractors, or a failure to maintain adequate protection against security breaches, including those resulting from cyber-attacks, could harm our relationship with U.S. Government agencies. Our relationship with the U.S. Government could also be damaged as a result of an agency's dissatisfaction with work performed by us, a subcontractor, or other third parties who provide services or products for a specific project for any reason, including due to perceived or actual deficiencies in the performance or quality of our work, and we may incur additional costs to address any such situation and the profitability of that work might be impaired. In addition, to the extent our performance under a contract does not meet a U.S. Government agency's expectations, the client may seek to terminate the contract prior to its scheduled expiration date, provide a negative assessment of our performance to government-maintained contractor past-performance repositories, fail to award us additional business under existing contracts or otherwise, and direct future business to our competitors. Further, negative publicity concerning government contractors in general or us in particular may harm our reputation with federal government contractors. To the extent our reputation or relationships with U.S. Government agencies is impaired, our revenue and operating profits could materially decline.

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U.S. Government spending and mission priorities could change in a manner that adversely affects our business, financial condition, results of operations or prospects.

Our business depends upon continued U.S. Government expenditures on intelligence, defense, space and federal civilian programs for which we provide support. These expenditures have not remained constant over time, have been reduced in certain periods and, recently, have been affected by the U.S. Government's efforts to improve efficiency and reduce costs affecting federal government programs generally. Our business, financial condition, results of operations or prospects could be materially harmed by several causes, including:

•: budgetary constraints, including Congressionally mandated automatic spending cuts, affecting U.S. Government spending generally, or specific agencies in particular, and changes in available funding;
•: a shift in expenditures away from agencies or programs that we support, including a shift in the focus of government research programs to short-term activities that are more urgent, thus reducing funding for forward-looking research;
•: U.S. Government shutdowns due to a failure by elected officials to fund the government (such as that which occurred during U.S. fiscal 2014) or weather-related closures in the Washington, D.C. area (such as that which occurred in the winter of 2016) and other potential delays in the appropriations process;
•: reduced U.S. Government outsourcing of functions that we are currently contracted to provide, including as a result of increased insourcing by various U.S. Government agencies due to changes in the definition of "inherently governmental" work, including proposals to limit contractor access to sensitive or classified information and work assignments;
•: further efforts to improve efficiency and reduce costs affecting federal government programs;
•: changes in U.S. Government programs that we support or related requirements;
•: a continuation of recent efforts by the U.S. Government to decrease spending for management support service contracts;
•: U.S. Government agencies awarding contracts on a technically acceptable/lowest cost basis to reduce expenditures;
•: delays in the payment of our invoices by government payment offices;
•: an inability by the U.S. Government to fund its operations as a result of a failure to increase the federal government's debt ceiling, a credit downgrade of U.S. Government obligations or for any other reason; and
•: changes in the political climate and general economic conditions, including a slowdown of the economy or unstable economic conditions and responses to conditions, such as emergency spending, that reduce funds available for other government priorities.

In addition, any disruption in the functioning of U.S. Government agencies, including as a result of U.S. Government closures and shutdowns, terrorism, war, natural disasters, destruction of or damage to U.S. Government facilities, and other potential calamities could have a negative impact on our operations and cause us to lose revenue or incur additional costs due to, among other things, our inability to deploy our staff to client locations or facilities as a result of such disruptions.

The U.S. Government budget deficits, the national debt, and the prevailing economic condition, and actions taken to address them, could continue to negatively affect U.S. Government

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expenditures on intelligence, defense, space and federal civilian programs for which we provide support. The DoD is one of our significant clients and cost cutting, including through consolidation and elimination of duplicative organizations and insourcing, has become a major initiative for the DoD. In particular, the Budget Control Act of 2011 (as amended by the American Taxpayer Relief Act of 2012, the Bipartisan Budget Act of 2013 and the Bipartisan Budget Act of 2015) provides for automatic spending cuts (referred to as sequestration) totaling approximately $1.2 trillion between 2013 and 2021, including an estimated $500.0 billion in federal defense spending cuts over this time period. The Bipartisan Budget Act of 2015 set spending limits for the U.S. fiscal 2017 budget across the federal government and increased the prior discretionary spending caps in both defense and non-defense. The new DoD spending limit is approximately $620.0 billion for U.S. fiscal 2017, including an allocation of $59.0 billion in overseas contingency operations funding. While recent budget actions reflect a more measured and strategic approach to addressing the U.S. Government's fiscal challenges, there remains uncertainty as to how exactly budget cuts, including sequestration, could impact us, and we are therefore unable to predict the extent of the impact of such cuts on our business and results of operations. However, a reduction in the amount of, or reductions, delays, or cancellations of funding for, services that we are contracted to provide to the DoD as a result of any of these related initiatives, legislation or otherwise could have a material adverse effect on our business and results of operations. In addition, in response to an Office of Management and Budget mandate, U.S. Government agencies have reduced management support services spending in recent years. If federal awards for management support services continue to decline, our revenue and operating profits may materially decline and further efforts by the Office of Management and Budget to decrease federal awards for management support services could have a material and adverse effect on our business and results of operations.

These or other factors could cause our intelligence, defense, space and federal civilian clients to decrease the number or value of new contracts awarded generally and fail to award us new contracts, reduce their purchases under our existing contracts, exercise their right to terminate our contracts, or not exercise options to renew our contracts, any of which could cause a material decline in our revenue.

A delay in the completion of the U.S. Government's budget process could result in a reduction in our backlog and have a material adverse effect on our revenue and operating results.

On an annual basis, the U.S. Congress must approve budgets that govern spending by each of the federal agencies we support. When the U.S. Congress is unable to agree on budget priorities, and thus is unable to pass the annual budget on a timely basis, the U.S. Congress typically enacts a continuing resolution. A continuing resolution allows U.S. Government agencies to operate at spending levels approved in the previous budget cycle. Under a continuing resolution, funding may not be available for new projects. In addition, when U.S. Government agencies operate on the basis of a continuing resolution, they may delay funding we expect to receive on contracts we are already performing. Any such delays would likely result in new business initiatives being delayed or canceled and a reduction in our backlog, and could have a material adverse effect on our revenue and operating results. Furthermore, a failure to complete the budget process and fund government operations pursuant to a continuing resolution may result in a federal government shutdown (such as that which occurred during U.S. fiscal 2014). A shutdown may result in us incurring substantial costs without reimbursement under our contracts and the delay or cancellation of key programs, which could have a material adverse effect on our revenue and operating results.

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We may fail to obtain and maintain necessary security clearances or certifications which may adversely affect our ability to perform on certain contracts.

Many U.S. Government programs require contractor employees and facilities to have security clearances or certifications. Depending on the level of required clearance, security clearances and certifications can be difficult and time-consuming to obtain. If we, our employees or prospective employees or facilities are unable to obtain or retain necessary security clearances or certifications, we may not be able to bid on, win or perform on new contracts, or effectively compete for expiring contracts, and we may lose existing contracts, which may adversely affect our operating results and inhibit the execution of our growth strategy.

We derive a majority of our revenue from contracts awarded through a competitive bidding process, and our revenue and profitability may be materially adversely affected if we are unable to compete effectively in the process.

We derive a majority of our revenue from U.S. Government contracts awarded through competitive bidding processes. We do not expect this to change for the foreseeable future. Our failure to compete effectively in this procurement environment would have a material adverse effect on our revenue and profitability. In addition, our current contracts are re-competed from time to time, and we are not assured of winning these re-competes. In circumstances where we do not win those re-competes, and those lost contracts are not replaced, our operating results may be materially and adversely affected.

The competitive bidding process involves risk and significant costs to businesses operating in this environment, including:

•: the necessity to expend resources, make financial commitments (such as procuring leased premises) and bid on engagements in advance of the completion of their design, which may result in unforeseen difficulties in execution and cost overruns;
•: the substantial cost and managerial time and effort spent to prepare bids and proposals for contracts that may not be awarded to us;
•: the ability to accurately estimate the resources and costs that will be required to service any contract we are awarded;
•: the expense and delay that may arise if our competitors protest or challenge contract awards made to us pursuant to competitive bidding, and the risk that any such protest or challenge could result in the resubmission of bids on modified specifications, or in termination, reduction, or modification of the awarded contract; and
•: any opportunity cost of bidding and winning other contracts we might otherwise pursue.

In circumstances where contracts are held by other companies and are scheduled to expire, we still may not be provided the opportunity to bid on those contracts if the U.S. Government extends the existing contract. If we are unable to win particular contracts that are awarded through the competitive bidding process, we may not be able to operate in the market for services that are provided under those contracts for the duration of those contracts to the extent that there is no additional demand for such services. In addition, if the U.S. Government elects to use a contract vehicle that we do not hold, we will not be able to compete for work under that contract vehicle as a prime contractor. An inability to consistently win new contract awards or compete for work as a prime contractor over any extended period could have a material adverse effect on our business and results of operations.

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Our revenue and profitability may be materially adversely affected if there are delays, terminations or cancellations caused by our competitors protesting major contract awards received by us or there are adverse protest decisions in contracts awarded to us.

U.S. Government contracts are frequently subject to bid protests from unsuccessful bidders on new program awards. It can take many months for the relevant U.S. Government agency to resolve protests by one or more of our competitors of contract awards we receive. Bid protests may result in significant expense to us and contract modification, termination or cancellation of an awarded contract as a result of the award being overturned. Even if we do not lose the awarded contract, the resulting delay in the startup and funding of the work under these contracts may cause our revenue and profitability to be materially and adversely affected.

We are required to comply with numerous laws and regulations, some of which are highly complex, and our failure to comply could result in fines or civil or criminal penalties or suspension or debarment by the U.S. Government that could result in our inability to continue to work on or receive U.S. Government contracts, which could materially and adversely affect our results of operations.

As a U.S. Government contractor, we must comply with laws and regulations relating to the formation, administration, and performance of U.S. Government contracts, including in connection with services performed in countries outside the United States, which affect how we do business with our clients. Such laws and regulations may potentially impose added costs on our business, and our failure to comply with them may lead to civil or criminal penalties, termination of our U.S. Government contracts, and/or suspension or debarment from contracting with federal agencies. Some significant laws and regulations that affect us include:

•: the Federal Acquisition Regulation (the "FAR"), and agency regulations supplemental to the FAR, which regulate the formation, administration, and performance of U.S. Government contracts. For example, FAR 52.203-13 requires contractors to establish a Code of Business Ethics and Conduct, implement a comprehensive internal control system, and report to the government when the contractor has credible evidence that a principal, employee, agent, or subcontractor, in connection with a government contract, has violated certain federal criminal laws, violated the civil False Claims Act, or has received a significant overpayment;
•: the False Claims Act and False Statements Act, which impose civil and criminal liability for presenting false or fraudulent claims for payments or reimbursement, and making false statements to the U.S. Government, respectively;
•: the Truth in Negotiations Act, which requires certification and disclosure of cost and pricing data in connection with the negotiation of a contract, modification, or task order;
•: the Procurement Integrity Act, which restricts access to competitor bid and proposal information and government source selection information and limits our ability to provide compensation to certain former government officials;
•: post-government employment laws and regulations, which restrict the ability of a contractor to recruit, hire, and deploy former employees of the U.S. Government;
•: laws, regulations, and executive orders restricting the use and dissemination of information classified for national security purposes and the export of certain products, services, and technical data, including requirements regarding any applicable licensing of our employees involved in such work; and

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•: the U.S. Government Cost Accounting Standards and Cost Principles, which impose accounting requirements that govern our right to reimbursement under certain cost-based U.S. Government contracts and require consistency of accounting practices over time.

In addition, the U.S. Government adopts new laws, rules, and regulations from time to time that could have a material impact on our results of operations.

Our performance under our U.S. Government contracts and our compliance with the terms of those contracts and applicable laws and regulations are subject to periodic audit, review, and investigation by various U.S. Government agencies and the current environment has led to increased regulatory scrutiny and sanctions for non-compliance by such agencies generally. In addition, from time to time we report potential or actual violations of applicable laws and regulations to the relevant governmental authority. Any such report of a potential or actual violation of applicable laws or regulations could lead to an audit, review, or investigation by the relevant U.S. Government agencies. If such an audit, review, or investigation uncovers a violation of a law or regulation, or improper or illegal activities relating to our U.S. Government contracts, we may be subject to civil or criminal penalties or administrative sanctions, including the termination of contracts, forfeiture of profits, the triggering of price reduction clauses, withholding of payments, suspension of payments, fines and suspension, or debarment from contracting with U.S. Government agencies. Such penalties and sanctions are not uncommon in the industry and there is inherent uncertainty as to the outcome of any particular audit, review, or investigation. If we incur a material penalty or administrative sanction or otherwise suffer harm to our reputation, our profitability, cash position, and future prospects could be materially and adversely affected.

Further, if the U.S. Government were to initiate suspension or debarment proceedings against us or if we are indicted for or convicted of illegal activities relating to our U.S. Government contracts following an audit, review, or investigation, we may lose our ability to be awarded contracts in the future or receive renewals of existing contracts for a period of time which could materially and adversely affect our results of operations or financial condition. We could also suffer harm to our reputation if allegations of impropriety were made against us, which could impair our ability to win awards of contracts in the future or receive renewals of or option extensions under existing contracts. See "Business — Regulation."

The U.S. Government's organizational conflict of interest rules could limit our ability to successfully compete for new contracts or task orders, which would adversely affect our results of operations.

Past efforts by the U.S. Government to reform its procurement practices have focused, among other areas, on the separation of certain types of work to facilitate objectivity and avoid or mitigate organizational conflicts of interest and the strengthening of regulations governing organizational conflicts of interest. Organizational conflicts of interest may arise from circumstances in which a contractor has:

•: impaired objectivity during performance;
•: unfair access to non-public information; or
•: the ability to set the "ground rules" for another procurement for which the contractor competes.

A focus on organizational conflicts of interest issues has resulted in legislation and regulations aimed at increasing organizational conflicts of interest requirements, including, among other things, separating sellers of products and providers of advisory services in major defense acquisition programs. For example, our current launch services support contracts for the U.S. Government may limit our ability to apply our expertise and solutions to capitalize on all potential opportunities within

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the commercial launch market. Future legislation and regulations may increase the restrictions in current organizational conflicts of interest regulations and rules. To the extent that organizational conflicts of interest laws, regulations and rules limit our ability to successfully compete for new contracts or task orders with the U.S. Government and/or commercial entities, either because of organizational conflicts of interest issues arising from our business or because companies with which we are affiliated or with which we otherwise conduct business create organizational conflicts of interest issues for us, our results of operations could be materially and adversely affected.

The U.S. Government may revise its procurement, contract or other practices in a manner materially adverse to us at any time.

Our industry continues to experience significant changes to business practices as a result of an increased focus on affordability, efficiencies and recovery of costs, among other items. Legislation, regulations and initiatives dealing with procurement reform, mitigation of potential organizational conflicts of interest, deterrence of fraud, and environmental responsibility or sustainability could have a material adverse effect on us. Moreover, shifts in the buying practices of U.S. Government agencies (such as increased usage of fixed-price contracts, multiple award contracts and small business set-aside contracts) could have material adverse effects on government contractors, including us. The U.S. Government may:

•: revise its procurement practices or adopt new contract laws, rules, and regulations, such as cost accounting standards, organizational conflicts of interest, and other rules governing inherently governmental functions at any time;
•: reduce, delay, or cancel procurement programs resulting from U.S. Government efforts to improve procurement practices and efficiency;
•: limit the creation of new government-wide or agency-specific multiple award contracts;
•: face restrictions or pressure from government employees and their unions regarding the amount of services the U.S. Government may obtain from private contractors;
•: award contracts on a technically acceptable/lowest cost basis to reduce expenditures, and we may not be the lowest cost provider of services;
•: adopt new socio-economic requirements, including setting aside procurement opportunities for small, disadvantaged, minority-, women- or veteran-owned businesses;
•: change the basis upon which it reimburses our compensation and other expenses or otherwise limit such reimbursements; and
•: at its option, terminate or decline to renew our contracts.

In addition, any new contracting methods could be costly or administratively difficult for us to implement and could materially adversely affect our future revenue and profit margin. Furthermore, changes to the procurement system could cause delays in the procurement decision-making process. Any such changes to the U.S. Government's procurement practices or the adoption of new contracting rules or practices could impair our ability to obtain new or re-compete contracts and any such changes or increased associated costs could materially and adversely affect our results of operations. Moreover, cost-cutting initiatives recently announced by the Secretary of Defense may significantly change the way the U.S. Government solicits, negotiates, and manages its contracts, which could result in an increase in competitive pressure and decreased profitability on contracts and have a material adverse effect on our results of operations.

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The U.S. Government may prefer small, disadvantaged, minority-, women- or veteran-owned businesses. As a result we may have fewer opportunities to bid on new or incumbent work.

As a result of the Small Business Administration set-aside program, the U.S. Government may decide to restrict certain procurements only to bidders that qualify as small, disadvantaged, minority-, women- or veteran-owned. As a result, we would not be eligible to perform as a prime contractor on those programs and would be restricted to a maximum of 49% of the work as a subcontractor on those programs. An increase in the amount of procurements under the Small Business Administration set-aside program may impact our ability to bid on new procurements as a prime contractor or restrict our ability to re-compete on incumbent work that is placed in the set-aside program.

Our business is subject to reviews, audits and cost adjustments by the U.S. Government, which, if resolved unfavorably to us, could adversely affect our profitability, cash flows or growth prospects.

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 cost rates and pricing practices, and compliance with applicable contracting and procurement laws, regulations and standards. They also review the adequacy of the contractor's compliance with government standards for its business systems, which are defined as the contractor's accounting, earned value management, estimating, materials management, property management and purchasing systems. A finding of material weakness or significant control deficiencies in a contractor's business systems or a finding of noncompliance with the FAR Cost Accounting Standards can result in reduced billing rates to U.S. Government customers until the material weakness or control deficiencies are corrected and their remediation is accepted by the DCMA. The agencies conducting these audits and reviews have come under increased scrutiny. As a result, audits and reviews have become more rigorous and the standards to which we are held are being more strictly interpreted which has increased the likelihood of an audit or review resulting in an adverse outcome.

Government audits and reviews may conclude that our practices are not consistent with applicable laws and regulations and result in adjustments to contract costs and mandatory customer refunds. Such adjustments can be applied retroactively, which could result in significant customer refunds. Receipt of adverse audit findings or the failure to obtain an "approved" determination on our various business systems could significantly and adversely affect our business by, among other things, restricting our ability to bid on new contracts and, for those proposals under evaluation, diminishing our competitive position. A determination of noncompliance could also result in the U.S. Government imposing penalties and sanctions against us, including withholding of payments, suspension of payments and increased government scrutiny. Increased scrutiny could adversely impact our ability to perform on contracts, affect our ability to invoice for work performed, delay the receipt of timely payment on contracts, and weaken our ability to compete for new contracts with the U.S. Government.

The indirect cost audits by the DCAA of our business remain open for our fiscal years as early as the year ended December 31, 2006 (as it includes open audit years from our acquisitions). We have recorded contract revenues subsequent to and including the year ended December 31, 2016 based on an estimate of costs that we believe will be approved on final audit. We regularly review the status of these open audit years and record reserves, in amounts that we believe are appropriate based on management's best estimate of financial exposure. However, we do not know the outcome of any ongoing or future audits, which may result in significant customer refunds that could exceed our reserves established for these potential adjustments.

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If we cannot collect our receivables or if payment is delayed, our business and financial condition may be materially and adversely affected.

We depend on the timely collection of our receivables to generate cash flow, provide working capital, and continue our business operations. If the U.S. Government or any prime contractor for whom we are a subcontractor fails to pay or delays the payment of invoices for any reason, our business and financial condition may be materially and adversely affected. The U.S. Government may delay or fail to pay invoices for a number of reasons, including lack of appropriated funds, lack of an approved budget, or as a result of audit findings by government regulatory agencies. Some prime contractors for whom we are a subcontractor have significantly fewer financial resources than we do, which may increase the risk that we may not be paid in full or that payment may be delayed.

Our U.S. Government contracts may be terminated by the U.S. Government at any time and may contain other provisions permitting the U.S. Government to discontinue contract performance or that are otherwise unfavorable to us, and if lost contracts are not replaced, our operating results may differ materially and adversely from those anticipated.

U.S. Government contracts contain provisions and are subject to laws and regulations that provide U.S. Government clients with rights and remedies not typically found in commercial contracts. These rights and remedies allow the U.S. Government to, among other things:

•: terminate existing contracts, with short notice, for convenience as well as for default;
•: reduce orders under or otherwise modify contracts;
•: for contracts subject to the Truth in Negotiations Act, reduce the contract price or cost where it was increased because a contractor or subcontractor furnished cost or pricing data during negotiations that was not complete, accurate, and current;
•: for some contracts, demand a refund, make a forward price adjustment, or terminate a contract for default if a contractor provided inaccurate or incomplete data during the contract negotiation process and/or reduce the contract price under certain triggering circumstances, including the revision of price lists or other documents upon which the contract award was predicated;
•: terminate our facility security clearances and thereby prevent us from receiving classified contracts;
•: cancel multi-year contracts and related orders if funds for contract performance for any subsequent year become unavailable;
•: decline to exercise an option to renew a multi-year contract or issue task orders in connection with ID/IQ contracts;
•: assert rights in solutions, systems, and technology produced by us during contract performance, and continue to use that work product without continuing to contract for our services, and/or disclose or permit such work-product to be used by third parties, including other U.S. Government agencies and our competitors, which could harm our competitive position;
•: prohibit future procurement awards with a particular U.S. Government agency due to a finding of organizational conflicts of interest based upon prior related work performed for the U.S. Government agency that would give a contractor an unfair advantage over competing contractors, or the existence of conflicting roles that might bias a contractor's judgment;
•: suspend or debar us from doing business with the U.S. Government;

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•: impose fines and penalties on us, and subject us to criminal prosecution;
•: control or prohibit the export of our services; and
•: impose special handling and control requirements for controlled unclassified information.

Recent and potential future budget cuts, the impact of sequestration and recent efforts by the Office of Management and Budget to decrease federal awards for management support services may cause U.S. Government agencies with which we currently have contracts to terminate, reduce the number of task orders under or fail to renew such contracts. If a U.S. Government client were to unexpectedly terminate, cancel, or decline to exercise an option to renew with respect to one or more of our significant contracts, or suspend or debar us from doing business with the U.S. Government, our revenue and operating results could be materially harmed.

We face intense competition from many competitors, which could cause us to lose business, lower prices and suffer employee departures.

Our business operates in a highly competitive industry, and we generally compete with a wide variety of U.S. Government contractors, including large defense contractors, diversified service providers, and small businesses. There is also a significant industry trend towards consolidation, which may result in the emergence of companies that are better able to compete against us. Some of these companies possess greater financial resources and larger technical staffs, and others have smaller and more specialized staffs. These competitors could, among other things:

•: divert sales from us by winning very large-scale government contracts;
•: force us to charge lower prices in order to win or maintain contracts;
•: seek to hire our employees; or
•: adversely affect our relationships with current clients, including our ability to continue to win competitively awarded engagements where we are the incumbent.

If we lose business to our competitors or are forced to lower our prices or suffer employee departures, our revenue and our operating profits could decline. In addition, we may face competition from our subcontractors who, from time to time, seek to obtain prime contractor status on contracts for which they currently serve as a subcontractor to us. If one or more of our current subcontractors are awarded prime contractor status on such contracts in the future, it could divert sales from us and could force us to charge lower prices, which could have a material adverse effect on our revenue and profitability. See "Business — Competition."

We may earn less revenue than projected, or no revenue, under certain of our contracts.

Many of our contracts with our clients are ID/IQ contracts. ID/IQ contracts provide for the issuance by the client of orders for services or products under the contract, and often contain multi-year terms and unfunded ceiling amounts, which allow but do not commit the U.S. Government to purchase products and services from contractors. Our ability to generate revenue under each of these types of contracts depends upon our ability to be awarded task orders for specific services by the client. ID/IQ contracts may be awarded to one contractor (single award) or several contractors (multiple award). Multiple contractors must compete under multiple award ID/IQ contracts for task orders to provide particular services, and contractors earn revenue only to the extent that they successfully compete for these task orders. A failure to be awarded task orders under such contracts would have a material adverse effect on our results of operations and financial condition. In addition, our ability to maintain our existing business and win new business depends on our ability to maintain our prime and subcontractor positions on our ID/IQ contracts.

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The loss, without replacement, of certain of these contract vehicles could have a material adverse effect on our ability to win new business and our operating results.

Our business is subject to fluctuations that may cause our operating results to decline.

The U.S. fiscal year ends on September 30th of each year. While not certain, it is not uncommon for U.S. Government agencies to award extra tasks or complete other contract actions in the weeks before the end of the U.S. fiscal year in order to avoid the loss of unexpended fiscal year funds. In addition, we have also historically experienced higher bid and proposal costs in the months leading up to the U.S. fiscal year-end as we pursue new contract opportunities expected to be awarded early in the following U.S. fiscal year as a result of funding appropriated for that U.S. fiscal year. We may continue to experience this seasonality in future periods, and our results of operations may be affected by it. While not certain, changes in the U.S. Government's funding and spending patterns have altered historical seasonality trends, supporting our approach to managing the business on an annual basis. Seasonality is just one of a number of factors, many of which are outside of our control, which may negatively affect our operating results in any period.

We may fail to attract, train and retain skilled and qualified employees, which may impair our ability to generate revenue, effectively serve our clients, and execute our growth strategy.

Our business depends in large part upon our ability to attract and retain sufficient numbers of highly qualified individuals, including those who have advanced degrees in areas such as IT as well as appropriate security clearances. We compete for such qualified personnel with other U.S. Government contractors, the U.S. Government, and private industry, and such competition is intense. Personnel with the requisite skills, qualifications, or security clearance may be in short supply or generally unavailable. In addition, our ability to recruit, hire, and internally deploy former employees of the U.S. Government is subject to complex laws and regulations, which may serve as an impediment to our ability to attract such former employees, and failure to comply with these laws and regulations may expose us and our employees to civil or criminal penalties. Moreover, a number of our best and most experienced personnel are nearing retirement and we may not be able to attract people of the same caliber to replace these employees when they retire. If we are unable to recruit and retain a sufficient number of qualified employees, or fail to deploy such employees or obtain their appropriate security clearances in a timely manner, our ability to maintain and grow our business and to effectively serve our clients could be limited and our future revenue and results of operations could be materially and adversely affected. Furthermore, to the extent that we are unable to make necessary permanent hires to appropriately serve our clients, we could be required to engage larger numbers of contracted personnel, which could reduce our profit margins.

If we are able to attract sufficient numbers of qualified new hires, training and retention costs may place significant demands on our resources. In addition, to the extent that we experience attrition in our employee ranks, we may realize only a limited or no return on such invested resources, and we would have to expend additional resources to hire and train replacement employees. The loss of services of key personnel could also impair our ability to perform required services under some of our contracts and to retain such contracts, as well as our ability to win new business.

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Our profitability could suffer if we are not able to timely and effectively utilize our employees or manage our cost structure.

The cost of providing our services, including the degree to which our employees are utilized, affects our profitability. The degree to which we are able to utilize our employees in a timely manner or at all is affected by a number of factors, including:

•: our ability to transition employees from completed projects to new assignments and to hire, assimilate, and deploy new employees;
•: our ability to forecast demand for our services and to maintain and deploy headcount that is aligned with demand, including employees with the right mix of skills and experience to support our projects;
•: our employees' inability to obtain or retain necessary security clearances or required certifications;
•: our ability to manage attrition; and
•: our need to devote time and resources to training, business development, and other non-chargeable activities.

If our employees are under-utilized, our profit margin and profitability could suffer. Additionally, if our employees are over-utilized, it could have a material adverse effect on employee morale and attrition, which would in turn have a material adverse impact on our business.

Our profitability is also affected by the extent to which we are able to effectively manage our overall cost structure for operating expenses, such as wages and benefits, overhead and capital and other investment-related expenditures. If we are unable to effectively manage our costs and expenses and achieve efficiencies, our competitiveness and profitability may be adversely affected.

We may lose one or more members of our senior management team or fail to develop new leaders, which could cause a disruption in the management of our business.

We believe that the future success of our business and our ability to operate profitably depends on the continued contributions of the members of our senior management and the continued development of new members of senior management. We rely on our senior management to generate business and execute programs successfully. In addition, the relationships and reputation that many members of our senior management team have established and maintain with our clients are important to our business and our ability to identify new business opportunities. We do not have any employment agreements providing for a specific term of employment with any members of our senior management. The loss of any member of our senior management or our failure to continue to develop new members could impair our ability to identify and secure new contracts, to maintain good client relations, and to otherwise manage our business, and could have a material adverse effect on our results of operations and financial condition.

Our employees or subcontractors may engage in misconduct or other improper activities, which could harm our ability to conduct business with the U.S. Government.

We are exposed to the risk that employee or subcontractor fraud or other misconduct could occur. Misconduct by employees or subcontractors could include intentional or unintentional failures to comply with U.S. Government procurement regulations, engaging in other unauthorized activities, or falsifying time records. Employee or subcontractor misconduct could also involve the theft of or improper use of our clients' sensitive or classified information, or the inadvertent or intentional disclosure of our or our clients' sensitive or classified information in violation of our contractual, statutory, or regulatory obligations. The U.S. Government is increasingly concerned about such

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insider threats, and in May 2016, following a number of high-profile insider leaks, the DoD mandated that all government contractors subject to the National Industrial Security Program Operating Manual establish and maintain an insider-threat detection program that meets certain enumerated requirements. While we have established such a program, it is not always possible to deter employee or subcontractor misconduct, and the precautions we take to prevent and detect such insider threats or other misconduct may not be effective in controlling unknown or unmanaged risks or losses, which could materially harm our business. As a result of such misconduct, our employees could lose their security clearance, and we could face fines and civil or criminal penalties, loss of facility clearance accreditation, and suspension, proposed debarment or debarment from bidding for or performing under contracts with the U.S. Government, as well as reputational harm, which would materially and adversely affect our results of operations and financial condition.

We may not realize the full value of our backlog, which may result in lower than expected revenue.

As of December 31, 2016, our total backlog was $2.5 billion, of which $0.3 billion was funded. We define backlog to include the following two components:

•: Funded Backlog. Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized, less revenue previously recognized on these contracts.
•: Unfunded Backlog. Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized.

We historically have not realized all of the revenue included in our total backlog, and we may not realize all of the revenue included in our total backlog in the future. There is a higher degree of risk in this regard with respect to unfunded backlog. In addition, there can be no assurance that our backlog will result in actual revenue in any particular period. This is because the actual receipt, timing, and amount of revenue under contracts included in backlog are subject to various contingencies, including congressional appropriations, many of which are beyond our control. In particular, delays in the completion of the U.S. Government's budgeting process and the use of continuing resolutions could adversely affect our ability to timely recognize revenue under our contracts included in backlog. Furthermore, the actual receipt of revenue from contracts included in backlog may never occur or may be delayed because of factors such as the following: a program schedule could change or the program could be canceled; a contract's funding or scope could be reduced, modified, delayed, or terminated early, including as a result of a lack of appropriated funds or as a result of cost-cutting initiatives and other efforts to reduce U.S. Government spending or the automatic federal defense spending cuts required by sequestration; in the case of funded backlog, the period of performance for the contract could have expired; or, in the case of unfunded backlog, funding may not be available. In addition, consulting staff headcount growth is the primary means by which we are able to recognize revenue growth. Any inability to hire additional appropriately qualified personnel or failure to timely and effectively deploy such additional personnel against funded backlog could negatively affect our ability to grow our revenue. Furthermore, even if our backlog results in revenue, the contracts may not be profitable.

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Our earnings and profitability may vary based on the mix of our contracts and may be adversely affected by our failure to accurately estimate or otherwise recover the expenses, time, and resources for our contracts.

We enter into three general types of U.S. Government contracts for our services: cost-reimbursable, time-and-materials, and fixed-price. For the year ended December 31, 2016, we derived 79% of our revenue from cost-reimbursable contracts, 10% from time-and-materials contracts and 11% from fixed-price contracts.

Each of these types of contracts, to varying degrees, involves the risk that we could underestimate our cost of fulfilling the contract, which may reduce the profit we earn or lead to a financial loss on the contract and adversely affect our operating results.

Under cost-reimbursable contracts, we are reimbursed for allowable costs up to a ceiling and paid a fee, which may be fixed or performance-based. If our actual costs exceed the contract ceiling or are not allowable under the terms of the contract or applicable regulations, we may not be able to recover those costs. In particular, there is increasing focus by the U.S. Government on the extent to which government contractors, including us, are able to receive reimbursement for employee compensation, including rules under the Bipartisan Budget Act of 2013 that substantially decreased the level of allowable compensation cost for executive-level employees and further applied the newly reduced limitation to all employees. In addition, there is risk of compensation being deemed unallowable or payments being withheld as a result of U.S. Government audit, review, or investigation.

Under time-and-materials contracts, we are reimbursed for the hours worked using predetermined hourly rates for each labor category and typically reimbursed for other direct contract costs and expenses at cost. We assume financial risk on time-and-materials contracts because our costs of performance may exceed these negotiated hourly rates.

Under fixed-price contracts, we perform specific tasks for a pre-determined price. Compared to time-and-materials and cost-reimbursable contracts, fixed-price contracts generally offer higher margin opportunities because we receive the benefits of any cost savings, but involve greater financial risk because we bear the impact of any cost overruns. Because we assume the risk for cost overruns and contingent losses on fixed-price contracts, an increase in the percentage of fixed-price contracts in our contract mix could increase our risk of suffering losses.

Additionally, our profits could be adversely affected if our costs under any of these contracts exceed the assumptions we used in bidding for the contract. For example, we may miscalculate the costs, resources, or time needed to complete projects or meet contractual milestones as a result of delays on a particular project, including delays in designs, engineering information, or materials provided by the customer or a third party, delays or difficulties in equipment and material delivery, schedule changes, and other factors, some of which are beyond our control.

We have recorded provisions in our consolidated financial statements for losses on our contracts, as required under GAAP, but our contract loss provisions may not be adequate to cover all actual losses that we may incur in the future. Actual losses could have an adverse effect on our business and financial results.

We use estimates in recognizing revenue and if we make changes to estimates used in recognizing revenue, our future revenue, profitability and results of operations may be adversely affected.

Revenue from our fixed-price contracts is primarily recognized using the percentage-of-completion method with progress toward completion of a particular contract based on actual costs incurred relative to total estimated costs to be incurred over the life of the contract.

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Revenue from our cost-reimbursable contracts are based on our estimation of award fees over the life of the contract. Estimating costs at completion and award fees on our long-term contracts is complex and involves significant judgment. Adjustments to original estimates are often required as work progresses, experience is gained, and additional information becomes known, even though the scope of the work required under the contract may not change. Any adjustment as a result of a change in estimate is recognized as events become known.

In the event updated estimates indicate that we will experience a loss on the contract, we recognize the estimated loss at the time it is determined. Additional information may subsequently indicate that the loss is more or less than initially recognized, which requires further adjustments in our consolidated financial statements. Changes in the underlying assumptions, circumstances, or estimates could result in adjustments that could have a material adverse effect on our future revenue, profitability and results of operations.

Our business and financial results could be negatively affected by cyber or other security threats.

As a U.S. Government contractor and a provider of IT services operating in multiple regulated industries and geographies, we handle sensitive information which includes personally identifiable information, protected health information, personnel information, classified information, financial information and other confidential information concerning our business and employees and those of our customers (collectively referred to below as "sensitive information"). We are continuously exposed to risk from cyber and other security threats, including computer viruses and attacks by hackers. Any electronic or other security breach or compromise may jeopardize security of sensitive or other information stored or transmitted through our IT systems and networks. This could lead to disruptions in mission-critical systems, unauthorized release of confidential or otherwise protected information and corruption or loss of data. Although we have implemented policies, procedures and controls, including the use of third-party security audit and assessment firms, to protect against, detect and mitigate these threats, attempts by others to gain unauthorized access to our IT systems are becoming more sophisticated. These attempts include covertly introducing malware to our computers and networks and impersonating authorized users, among others, and may be perpetrated by well-funded organized crime or state sponsored efforts. We work with other companies in the industry and government participants to share threat intelligence and promote increased awareness and enhanced protections against cybersecurity threats, and we seek to detect and investigate all security events and to prevent their occurrence or recurrence. We continue to improve our threat protection, detection and mitigation policies, procedures and controls. However, because of the evolving nature of these security threats, there can be no assurance that our policies, procedures and controls have or will detect or prevent any of these threats, and we cannot predict the full impact of any such incident.

In addition, we may experience similar security threats to the IT systems that we develop, install or maintain under customer contracts, including customer contracts under which we may have access to or management responsibility for customer databases or networks that contain sensitive information relating to our customers, their employees or related third parties. Although we work cooperatively with our customers and other business partners to seek to minimize the impacts of cyber and other security threats, we must rely on the safeguards put in place by those entities. However, under certain of our customer contracts we are specifically tasked with cybersecurity measures and thus are affirmatively responsible for implementing cybersecurity measures to protect against, detect and mitigate these threats.

In the event of unauthorized access to sensitive information that we are responsible for safeguarding, our customers and their employees or related third parties, if applicable, may seek to hold us liable for any costs or other damages associated with the unauthorized access as a breach

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of our contractual and other obligations. In addition, various federal or state agencies may bring legal action against us for violation of or noncompliance with regulatory requirements relating to any unauthorized access to sensitive information within our control. Any remediation costs, damages or other liabilities related to unauthorized access of sensitive information of ours or our customers caused by cyber or other security threats may not be fully insured or indemnified by other means. The occurrence of any unauthorized access caused by these security threats could adversely affect our reputation and our ability to work on sensitive U.S. Government contracts, and, as a result, our business and financial results.

Certain services we provide and technologies we develop are designed to detect and monitor threats to our clients and may require our staff to travel to locations where their physical safety may be at risk.

We help our clients detect, monitor and mitigate threats to their people, information and facilities. These threats may originate from nation states, terrorist or criminal actors, activist hackers or others who seek to harm our clients. Successful attacks on our clients may cause reputational harm to us and our clients, as well as liability to our clients or third parties. In addition, if we are associated with our clients in this regard, our staff, information and facilities may be targeted by a similar group of threat actors and may be at risk for loss, or physical or reputational harm.

Internal system or service failures, or those of our vendors or clients, including as a result of cyber or other security threats, could disrupt our business and impair our ability to effectively provide our services to our clients, which could damage our reputation and have a material adverse effect on our business and results of operations.

We create, implement, and maintain IT and engineering systems for internal use and for our clients and also use vendors to provide services that are often critical to our clients' operations, some of which involve sensitive information and may be conducted in war zones or other hazardous environments, or include information whose confidentiality is protected by law. As a result, we are subject to systems or service failures, not only resulting from our own failures, the failures of third-party service providers or our clients, natural disasters, power shortages, or terrorist attacks, but also from continuous exposure to cyber and other security threats, including computer viruses or attacks by computer hackers. There has been an increase in the frequency and sophistication of the cyber and security threats we face, with attacks ranging from those common to businesses generally to those that are more advanced and persistent, which may target us because, as a cybersecurity services contractor, we hold classified or other sensitive information. As a result, we, our vendors and clients face a heightened risk of a security breach or disruption with respect to sensitive information resulting from an attack by computer hackers, foreign governments and cyber terrorists. While we put in place policies, controls, and technologies to help detect and protect against such attacks, we cannot guarantee that future incidents will not occur, and if an incident does occur, we may not be able to successfully mitigate the impact. We have been the target of these types of attacks in the past and future attacks are likely to occur. If successful, these types of attacks on our network or other systems or service failures could have a material adverse effect on our business and results of operations, due to, among other things, the loss of client or proprietary data, interruptions or delays in our clients' businesses, and damage to our reputation. In addition, the failure or disruption of our systems, communications, vendors, clients, or utilities could cause us to interrupt or suspend our operations, which could have a material adverse effect on our business and results of operations. In addition, if our employees inadvertently do not adhere to appropriate information security protocols, our protocols are inadequate, or our employees intentionally avoid these protocols, our or our clients' sensitive information may be released thereby causing significant negative impacts to our reputation and expose us or our clients to liability.

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If our, our vendors' or our clients' systems, services, or other applications have significant defects or errors, are successfully attacked by cyber and other security threats, suffer delivery delays or otherwise fail to meet our clients' expectations, we may, among other things:

•: lose revenue due to adverse client reaction;
•: be required to provide additional services to a client at no charge;
•: incur additional costs related to monitoring and increasing our cybersecurity;
•: lose revenue due to the deployment of internal staff for remediation efforts instead of client assignments;
•: receive negative publicity, which could damage our reputation and adversely affect our ability to attract or retain clients;
•: be unable to successfully market services that are reliant on the creation and maintenance of secure IT systems to U.S. Government, international and commercial clients;
•: suffer claims by clients or impacted third parties for substantial damages, particularly as a result of any successful network or systems breach and exfiltration of client and/or third-party information; or
•: incur significant costs, including fines from government regulators related to complying with applicable federal or state law, including laws pertaining to the security and protection of personal information.

In addition to any costs resulting from contract performance or required corrective action, these failures may result in increased costs or loss of revenue if they result in clients postponing subsequently scheduled work or canceling or failing to renew contracts.

The costs related to cyber or other security threats or disruptions may not be fully insured or indemnified by other means. Additionally, some cyber technologies and techniques that we utilize or develop may raise potential liabilities related to legal compliance, IP and civil liberties, including privacy concerns, which may not be fully insured or indemnified. Our errors and omissions insurance coverage may not continue to be available on reasonable terms or in sufficient amounts to cover one or more large claims, or the insurer may disclaim coverage as to some types of future claims. The successful assertion of any large claim against us could seriously harm our business. Even if not successful, these claims could result in significant legal and other costs, may be a distraction to our management, and may harm our client relationships. In certain new business areas, we may not be able to obtain sufficient insurance and may decide not to accept or solicit business in these areas.

Legal disputes could require us to pay potentially large damage awards and could be costly to defend, which would adversely affect our cash balances and profitability and could damage our reputation.

We are subject to, and may become a party to, a variety of lawsuits or claims and suits that arise from time to time in the ordinary course of our business. The DoJ and other enforcement agencies of the U.S. Government may bring claims or lawsuits against us in connection with our performance of government contracts or our billing or record-keeping relating to those contracts. The DoJ has considerably more resources at its disposal than we do and can bring suspension and debarment proceedings against us that would prevent us from working for some or all U.S. Government customers. In addition, certain statutes under which the DoJ may bring claims (like the False Claims Act) provide for treble damages and penalties on a per invoice basis against government contractors. These circumstances generally give the DoJ significantly more leverage in

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any legal dispute with us than if we were defending ourselves against claims brought by a commercial enterprise. Adverse judgments or settlements in some or all of these legal disputes may result in significant monetary damages or injunctive relief against us. Any claims or litigation could be costly to defend, and even if we are successful or fully indemnified or insured, could damage our reputation and make it more difficult to compete effectively or obtain adequate insurance in the future. Litigation and other claims are subject to inherent uncertainties, and management's view of these matters may change in the future.

Our business and operations expose us to numerous legal and regulatory requirements, and any violation of these requirements could harm our business.

We are subject to numerous federal, state and foreign legal requirements on matters as diverse as data privacy and protection, employment and labor relations, environmental, health and safety, immigration, taxation, anti-corruption, import/export controls, trade restrictions, internal and disclosure control obligations, securities regulation and anti-competition. Compliance with diverse and changing legal requirements is costly, time-consuming and requires significant resources. We also conduct business in certain identified growth areas, such as health information technology and energy, which are highly regulated and may expose us to increased compliance risk. Violations of one or more of these diverse legal requirements in the conduct of our business could result in significant fines and other damages, criminal sanctions against us or our officers, prohibitions on doing business (including suspension or disbarment from U.S. Government contracts or grants) and damage to our reputation. Violations of these regulations or contractual obligations related to regulatory compliance in connection with the performance of customer contracts could also result in liability for significant monetary damages, fines and/or criminal prosecution, unfavorable publicity and other reputational damage, restrictions on our ability to compete for certain work and allegations by our customers that we have not performed our contractual obligations.

Our insurance may be insufficient to protect us from liability claims or losses.

We maintain insurance coverage with third-party insurers as part of our overall risk management strategy and because some of our contracts require us to maintain specific insurance coverage limits. However, not every risk or liability is or can be protected by insurance, and, for those risks we insure, the limits of coverage we purchase or that are reasonably obtainable in the market may not be sufficient to cover all actual losses or liabilities incurred. If any of our third-party insurers fail, cancel our coverage or otherwise are unable to provide us with adequate insurance coverage, then our overall risk exposure and our operational expenses would increase and the management of our business operations would be disrupted. Our insurance may be insufficient to protect us from significant liability claims or losses. Moreover, there is a risk that commercially available liability insurance will not continue to be available to us at a reasonable cost, if at all. If liability claims or losses exceed our current or available insurance coverage, our business, financial position, operating results and prospects may be harmed. Regardless of the adequacy of our liability insurance coverages, any significant claim may have an adverse effect on our industry and market reputation, leading to a substantial decrease in demand for our products and services and reduced revenues.

Our failure to maintain strong relationships with other contractors, or the failure of contractors with which we have entered into a sub- or prime contractor relationship to meet their obligations to us or our clients, could have a material adverse effect on our business and results of operations.

Maintaining strong relationships with other U.S. Government contractors, who may also be our competitors, is important to our business, and our failure to do so could have a material adverse

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effect on our business, prospects, financial condition, and operating results. To the extent that we fail to maintain good relations with our subcontractors or other prime contractors due to either perceived or actual performance failures or other conduct, they may refuse to hire us as a subcontractor in the future or to work with us as our subcontractor. In addition, other contractors may choose not to use us as a subcontractor or choose not to perform work for us as a subcontractor for any number of additional reasons, including because they choose to establish relationships with our competitors or because they choose to directly offer services that compete with our business.

As a prime contractor, we often rely on other companies to perform some of the work under a contract, and we expect to continue to depend on relationships with other contractors for portions of our delivery of services and revenue in the foreseeable future. If our subcontractors fail to perform their contractual obligations, our operating results and future growth prospects could be impaired. There is a risk that we may have disputes with our subcontractors arising from, among other things, the quality and timeliness of work performed by the subcontractor, client concerns about the subcontractor, our failure to extend existing task orders or issue new task orders under a subcontract, or our hiring of a subcontractor's personnel. In addition, if any of our subcontractors fail to deliver the agreed-upon supplies or perform the agreed-upon services on a timely basis, our ability to fulfill our obligations as a prime contractor may be jeopardized. Material losses could arise in future periods and subcontractor performance deficiencies could result in a client terminating a contract for default. A termination for default could expose us to liability and have an adverse effect on our ability to compete for future contracts and orders.

We estimate that revenue derived from contracts under which we acted as a subcontractor to other companies represented approximately 10% of our revenue for the year ended December 31, 2016. As a subcontractor, we often lack control over fulfillment of a contract, and poor performance on the contract could tarnish our reputation, even when we perform as required, and could cause other contractors to choose not to hire us as a subcontractor in the future. If the U.S. Government terminates or reduces other prime contractors' programs or does not award them new contracts, subcontracting opportunities available to us could decrease, which would have a material adverse effect on our financial condition and results of operations. In addition, as a subcontractor, we may be unable to collect payments owed to us by the prime contractor, even if we have performed our obligations under the contract, as a result of, among other things, the prime contractor's inability to fulfill the contact. Due to certain common provisions in subcontracts in certain countries, we could also experience delays in receiving payment if the prime contractor experiences payment delays, which could have an adverse effect on our financial condition and results of operations.

Our focus on new growth areas for our business entails risks, including those associated with new relationships, clients, talent needs, capabilities, service offerings, and maintaining our collaborative culture and core values.

We are focused on growing our presence in our addressable markets by: increasing our penetration with existing clients, leveraging our core competencies to target and win large programs, continuing to expand and apply our suite of IP and technological capabilities and pursuing opportunities to commercialize and monetize our IP portfolio. These efforts entail inherent risks associated with innovation and competition from other participants in those areas. Potential risks include our failure to help our clients respond to the challenges they face, difficulties related to our ability to comply with uncertain evolving legal standards applicable to certain of our service offerings, including those in the cybersecurity area, and, with respect to potential international growth, risks associated with operating in foreign jurisdictions, such as compliance with applicable foreign and U.S. laws and regulations that may impose different and, occasionally, conflicting or contradictory requirements, and the economic, legal and political conditions in the foreign

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jurisdictions in which we operate. As we attempt to develop new relationships, clients, capabilities and service offerings, these efforts could harm our results of operations due to, among other things, a diversion of our focus and resources and the expenditure of actual costs, opportunity costs of pursuing these opportunities in lieu of others and a failure to reach a profitable return on our investments in new technologies, capabilities and businesses, including expenses on R&D investments. Additionally, these efforts could ultimately prove to be unsuccessful. The possibility also exists that our competitors might develop new capabilities or service offerings that might cause our existing capabilities and service offerings to become obsolete or less competitive. If we fail in our efforts to develop new capabilities or our capabilities or services fail to achieve market acceptance more rapidly than our competitors, our ability to procure new contracts could be negatively impacted, which would negatively impact our results of operations and financial condition.

With the growth of our operations, we are now providing client services and undertaking business development efforts in numerous and disparate geographic locations. Our ability to effectively serve our clients is dependent upon our ability to successfully leverage our operating model across all of these and any future locations and maintain effective management controls over all of our locations to ensure, among other things, compliance with applicable laws, rules and regulations at each of these and any future locations. Any inability to ensure any of the foregoing could have a material adverse effect on our business and results of operations.

Failure to adequately protect, maintain or enforce our rights in our IP and trade secrets may adversely limit our competitive position.

We rely upon a combination of nondisclosure agreements and other contractual arrangements, as well as copyright, trademark, patent and trade secret laws to protect our proprietary information. We also enter into proprietary information and IP agreements with employees, which require them to disclose any inventions created during employment, to convey such rights to inventions to us and to restrict any disclosure of proprietary information. Although our employees are subject to confidentiality obligations, this protection may be inadequate to deter or prevent misappropriation of our confidential information and/or the infringement of our patents and copyrights. Further, we may be unable to detect unauthorized use of our IP or otherwise take appropriate steps to enforce our rights. Failure to adequately protect, maintain or enforce our IP rights may adversely limit our competitive position.

In addition to the protection afforded by patents and other IP rights, we rely on trade secret protection and confidentiality agreements to protect trade secrets that are not covered by our patents and other IP rights. However, trade secrets are generally difficult to protect. Although we require all of our employees, consultants, advisors and any other third parties who have access to our trade secrets to enter into appropriate confidentiality agreements, we cannot be certain that our trade secrets will not be subject to unauthorized disclosure, that our competitors will not otherwise gain access to or independently develop substantially equivalent trade secrets or that the confidentiality agreements will be enforceable and sufficient to protect our trade secrets. Furthermore, enforcing a claim that an employee, consultant, advisor or other third party illegally obtained, and is using, our trade secrets is expensive and time consuming, and the outcome is unpredictable. Failure to adequately protect our trade secrets may adversely limit our competitive position.

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Assertions by third parties of infringement, misappropriation or other violations by us of their IP rights could result in significant costs and substantially harm our business and operating results.

In recent years, there has been significant litigation involving IP rights in technology industries. We may face, from time to time, allegations that we or a supplier or customer have violated the rights of third parties, including patent, trademark and other IP rights.

Any infringement, misappropriation or related claims, whether or not meritorious, are time consuming, divert technical and management personnel and are costly to resolve. As a result of any such dispute, we may have to develop non-infringing technology, pay damages, enter into royalty or licensing agreements, cease utilizing certain products or services or take other actions to resolve the claims. These actions, if required, may be costly or unavailable on terms acceptable to us. If we are unable to prevail in the litigation or retain or obtain sufficient rights or develop non-infringing IP or otherwise alter our business practices on a timely or cost-efficient basis, our business and operating results may be adversely affected.

Many of our contracts contain performance obligations that require innovative design capabilities, are technologically complex or are dependent upon factors not wholly within our control. Failure to meet these obligations could adversely affect our revenue and profitability.

We design and develop technologically advanced and innovative products and services applied by our customers in a variety of environments. Problems and delays in development or delivery as a result of issues with respect to design, technology, licensing and patent rights, labor, learning curve assumptions or materials and components could prevent us from achieving contractual requirements.

In addition, our offerings cannot be tested and proven in all situations and are otherwise subject to unforeseen problems that could negatively affect revenue and profitability such as problems with quality and workmanship, country of origin, delivery of subcontractor components or services and unplanned degradation of product performance. Among the factors that may adversely affect revenue and profits could be unforeseen costs and expenses not covered by insurance or indemnification from the customer, diversion of management focus in responding to unforeseen problems, loss of follow-on work, and, in the case of certain contracts, repayment to the U.S. Government customer of contract cost and fee payments we previously received.

Many of our contracts with the U.S. Government are classified or subject to other security restrictions, which may limit investor insight into portions of our business.

We derive a substantial portion of our revenue from contracts with the U.S. Government that are classified or subject to security restrictions that preclude the dissemination of certain information. In addition, a significant number of our employees have security clearances which preclude them from providing information regarding certain of our clients, and services provided to such clients, to persons without security clearances and investors. Because we are limited in our ability to provide information about these contracts and services, the various risks associated with these contracts or services or any dispute or claims relating to such contracts or services, you may not have important information concerning our business, which will limit your insight into a substantial portion of our business and therefore may leave you less able to fully evaluate the risks related to that portion of our business.

We have made and continue to make acquisitions, investments, joint ventures and divestitures that involve numerous risks and uncertainties.

We selectively pursue strategic acquisitions, investments and joint ventures. These transactions require significant investment of time and resources and may disrupt our business and

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distract our management from other responsibilities. Even if successful, these transactions could reduce earnings for a number of reasons, including the amortization of intangible assets, impairment charges, acquired operations that are not yet profitable or the payment of additional consideration under earn-out arrangements if an acquisition performs better than expected. Acquisitions, investments and joint ventures pose many other risks that could adversely affect our reputation, operations or financial results, including:

•: we may not be able to identify, compete effectively for or complete suitable acquisitions and investments at prices we consider attractive;
•: we may not be able to accurately estimate the financial effect of acquisitions and investments on our business, we may not realize anticipated synergies through acquisitions or acquisitions may not result in improved operating performance;
•: we may encounter performance problems with acquired technologies, capabilities and products, particularly with respect to those that are still in development when acquired;
•: we may have trouble retaining key employees and customers of an acquired business;
•: we may face difficulties in integrating such businesses, which may arise because of incompatible accounting, information management or other control systems, which could result in unforeseen difficulties;
•: we may assume material liabilities that were not identified as part of our due diligence or for which we are unable to receive a purchase price adjustment or reimbursement through indemnification;
•: we may assume legal or regulatory risks, particularly with respect to smaller businesses that have immature business processes and compliance programs;
•: acquired entities or joint ventures may not operate profitably, which could adversely affect our operating income or operating margins, and we may be unable to recover investments in any such acquisitions;
•: acquisitions, investments and joint ventures may require us to spend a significant amount of cash or to issue capital stock, resulting in dilution of ownership; and
•: we may not be able to effectively influence the operations of our joint ventures, or we may be exposed to certain liabilities if our joint venture partners do not fulfill their obligations.

If our acquisitions, investments or joint ventures fail, perform poorly or their value is otherwise impaired for any reason, including as a result of contractions in credit markets and global economic conditions, our business and financial results could be adversely affected.

In addition, we may choose to divest businesses, including businesses that are no longer a part of our ongoing strategic plan. These divestitures similarly would require significant investment of time and resources, may disrupt our business, distract management from other responsibilities and may result in losses on disposal or continued financial involvement in the divested business, including through indemnification, guarantee or other financial arrangements, for a period of time following the transaction, which could adversely affect our financial results.

Goodwill and other intangible assets represent 69% of our total assets as of December 31, 2016 and March 31, 2017, and any impairment of these assets could negatively impact our profitability and financial results.

Intangible assets with indefinite lives, including goodwill, are tested for impairment at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Intangible assets with finite lives are assessed for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. Examples of

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events or changes in circumstances indicating that the carrying value of intangible assets may not be recoverable could include a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, loss of key personnel or a more-likely-than-not expectation that a reporting unit or a significant portion of a reporting unit will be sold or otherwise disposed. We face continued uncertainty in our business environment due to the substantial fiscal and economic challenges facing the U.S. Government, our primary customer. Adverse changes in fiscal and economic conditions, such as the manner in which the budget cuts are implemented, including sequestration, and issues related to the nation's debt ceiling, could adversely impact our future revenues and profitability. These circumstances could result in an impairment of goodwill and/or other intangibles. Also, adverse equity market conditions that result in a decline in market multiples and our stock price could result in an impairment of goodwill and/or other intangibles. Any future impairment of goodwill or other intangible assets could have a negative impact on our profitability and financial results.

Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results or financial condition.

GAAP and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, including but not limited to revenue recognition, business combinations, impairment of goodwill, indefinite-lived intangible assets and long-lived assets, inventory and equity-based compensation, are highly complex and involve many subjective assumptions, estimates and judgments. Changes in these rules or their interpretation or changes in underlying assumptions, estimates or judgments could significantly change our reported or expected financial performance or financial condition.

We have a history of losses, anticipate increasing our operating expenses in the future and may not achieve or sustain profitability.

For the year ended December 31, 2012, we incurred a net loss of $117.7 million principally as a result of an impairment of our intangible assets in the amount of $127.1 million. For the year ended December 31, 2013, we incurred a net loss of $17.5 million which resulted in part due to an additional $8.0 million impairment of our intangible assets. For the year ended December 31, 2014, we incurred a net loss of $109.9 million related in part to the remaining write-off of our intangible assets in the amount of $56.0 million, $34.5 million in other acquisition related expenses and $8.0 million in debt extinguishment expenses. As of result of these losses and other factors, we had a total stockholder's deficit of $145.3 million as of March 31, 2017. We expect our operating expenses to increase as we implement initiatives designed to grow our business, including increasing our penetration with existing customers, targeting large and complex programs, expanding and applying our suite of IP and technological capabilities and pursuing opportunities to commercialize and monetize our IP portfolio, as well as increased costs in connection with legal, accounting, and other administrative expenses related to operating as a public company. These efforts may prove more expensive than we currently anticipate, and we may not succeed in increasing our revenue sufficiently, or at all, to offset these higher expenses and to sustain profitability. Growth of our revenue may slow or revenue may decline for a number of possible reasons, including harm to our relationships with U.S. Government agencies, changes in U.S. Government spending and mission priorities, a decrease in the size of our addressable markets, failure by us or our employees to obtain and maintain necessary security clearances or certifications, changes in U.S. Government procurement, contract or other practices or the adoption by the U.S. Government of new laws, rules and regulations in a manner adverse to us, an inability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors' protests of major contract awards received by us, changes in

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the mix of our contracts and failure to maintain strong relationships with other contractors. If we are unable to meet these risks and challenges as we encounter them, our business and operating results may be adversely affected, and even if we are able to sustain profitability, we may not be able to increase such profitability.

Risks Related to Our Indebtedness

Our high level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our floating-rate indebtedness and prevent us from meeting our obligations under our indebtedness.

We have a significant amount of indebtedness. As of March 31, 2017, we had $767.1 million of debt outstanding, including approximately $546.5 million under the First Lien Term Loan and $244.2 million under the Second Lien Term Loan, with total discounts of $19.7 million and deferred financing charges of $3.9 million. Additionally, as of March 31, 2017, we had $0.2 million of outstanding letters of credit under our Revolving Facility (as defined herein, and together with the First Lien Term Loan and the Second Lien Term Loan, "our credit facilities") and the ability to borrow an additional $49.8 million under the Revolving Facility.

Our substantial indebtedness could have important consequences to us, including the following:

•: requiring a substantial portion of cash flow from operations, which depends on many factors, some of which are not within our control, to be dedicated to the payment of principal and interest on our indebtedness, thereby reducing our ability to use our cash flow to fund our operations, working capital, capital expenditures, acquisitions and future business opportunities or to pay dividends;
•: exposing us to the risk of increased interest rates because certain of our borrowings, including certain borrowings under our credit facilities, bear interest at floating rates;
•: making it more difficult for us to satisfy our obligations with respect to our indebtedness, and any failure to comply with our obligations could result in an event of default under the agreements governing our indebtedness and, in the case of secured indebtedness, foreclosure on the assets that secure such indebtedness;
•: increasing vulnerability to adverse economic, industry or competitive developments;
•: restricting us from making strategic acquisitions or causing us to make non-strategic divestitures;
•: subjecting us to restrictive covenants that may limit our flexibility in operating our business;
•: limiting our ability to obtain additional financing to fund our operations, working capital, capital expenditures, product development, acquisitions, debt service requirements and future business opportunities or to pay dividends; and
•: limiting our flexibility in planning for, or reacting to, changes in our business or market conditions and placing us at a competitive disadvantage compared to our competitors who are less highly leveraged and who, therefore, may be able to take advantage of opportunities that our leverage prevents us from exploiting.

In addition, as our indebtedness matures, including our Revolving Facility, First Lien Term Loan and Second Lien Term Loan, which mature on May 23, 2019, November 23, 2019 and May 23, 2020, respectively, or if we are unable to service our high level of indebtedness, we may need to restructure or refinance all or a portion of our indebtedness, sell material assets or operations or raise additional debt or equity capital. We may not be able to effect any of these actions on a timely

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basis, on commercially reasonable terms, or at all, and these actions may not be sufficient to meet our capital requirements. Our failure to make required interest and principal payments on our indebtedness would result in an event of default under the agreement governing such indebtedness, which may result in the acceleration of some or all of our outstanding indebtedness and, in the case of secured indebtedness, foreclosure on the assets that secure such indebtedness.

Although our credit facilities contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of significant qualifications and exceptions and, under certain circumstances, the amount of indebtedness that could be incurred in compliance with these restrictions could be substantial, thereby exacerbating the risks associated with our high level of indebtedness.

Risks Related to this Offering and Ownership of Our Common Stock

No market currently exists for our common stock, and an active, liquid trading market for our common stock may not develop, which may cause our common stock to trade at a discount from the initial offering price and make it difficult for you to sell the common stock you purchase.

Prior to this offering, there has not been a public market for our common stock. We cannot predict the extent to which investor interest in us will lead to the development of a trading market on the NYSE or otherwise or how active and liquid that market may become. If an active and liquid trading market does not develop or continue, you may have difficulty selling any of our common stock that you purchase. The initial public offering price for the shares will be determined by negotiations among us and the underwriters and may not be indicative of prices that will prevail in the open market following this offering. The market price of our common stock may decline below the initial offering price, and you may not be able to sell your shares of our common stock at or above the price you paid in this offering, or at all.

You will incur immediate and substantial dilution in the net tangible book value (deficit) of the shares you purchase in this offering.

Parent LLC, our sole existing stockholder, paid substantially less per share of our common stock than the price in this offering. The initial public offering price of our common stock will be substantially higher than the net tangible book value (deficit) per share of outstanding common stock prior to consummation of the offering. After giving effect to the Conversion and our sale of shares of common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us, and giving effect to the proceeds of this offering, our adjusted net tangible book value (deficit) as of March 31, 2017 would have been $ million, or $ per share. This represents an immediate increase in net tangible book value (or a decrease in net tangible book deficit) of $ per share to Parent LLC and an immediate dilution in net tangible book value (deficit) of $ per share to investors purchasing shares of common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus. Dilution is the amount by which the offering price paid by purchasers of our common stock in this offering will exceed the adjusted net tangible book value (deficit) per share of our common stock upon consummation of this offering.

In the future, we may also issue our securities in connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition could constitute a material portion of the then outstanding shares of our common stock. Any issuance of additional securities in connection with investments or acquisitions may result in

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additional dilution to you. You may also experience additional dilution upon future equity issuances or the exercise of stock options to purchase, or redemptions of membership interests in Parent LLC in exchange for, our common stock pursuant to the Amended and Restated Limited Liability Company Operating Agreement of The SI Organization Holdings LLC (the "Operating Agreement") or granted to our employees, executive officers and directors under our current and future stock incentive plans. See "Dilution."

Our stock price may decline significantly following this offering, and you may not be able to resell your shares of our common stock at or above the price you paid or at all, and you could lose all or part of your investment as a result.

The trading price of our common stock may be volatile. We and the underwriters will negotiate to determine the initial public offering price. You may not be able to resell your shares at or above the initial public offering price due to a number of factors such as those listed in "Risk Factors — Risks Related to Our Business" and the following:

•: any cause of reduction or delay in U.S. Government funding;
•: fluctuations in revenue earned on existing contracts;
•: commencement, completion, or termination of contracts during a particular period;
•: a potential decline in our overall profit margins if our other direct costs and subcontract revenue grow at a faster rate than labor-related revenue;
•: strategic decisions by us or our competitors, such as changes to business strategy, strategic investments, acquisitions, divestitures, spin-offs and joint ventures;
•: a change in our contract mix to less profitable contracts;
•: changes in policy or budgetary measures that adversely affect U.S. Government contracts in general;
•: variable purchasing patterns under U.S. Government GSA schedules, blanket purchase agreements, which are agreements that fulfill repetitive needs under GSA schedules, and ID/IQ contracts;
•: changes in demand for our services and solutions;
•: fluctuations in the degree to which we are able to utilize our professionals;
•: seasonality associated with the U.S. fiscal year;
•: an inability to utilize existing or future tax benefits for any reason, including a change in law;
•: alterations to contract requirements; and
•: adverse judgments or settlements in legal disputes.

If the underwriters exercise their over-allotment option to purchase additional shares from us, we intend to use a portion of the net proceeds to pay the Class A Dividend.

In the event the underwriters exercise their over-allotment option to purchase additional shares from us, % of the aggregate net proceeds we would receive from the sale will be paid to Parent LLC as the Class A Dividend. Consequently, none of the proceeds payable to Parent LLC for such sales will be available to fund our operations, capital expenditures or acquisition opportunities. See "Dividend Policy," Use of Proceeds" and "Certain Relationships and Related Party Transactions."

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If securities analysts do not publish research or reports about our business, publish inaccurate or unfavorable research or if they downgrade our stock or our sector, our stock price and trading volume could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business. We do not control these analysts. Furthermore, if one or more of the analysts who do cover us downgrade our stock or our industry, or the stock of any of our competitors, or publish inaccurate or unfavorable research about our business, the price of our stock could decline. If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, we could lose visibility in the market, which in turn could cause our stock price or trading volume to decline.

Future sales, or the perception of future sales, by us or our existing stockholders in the public market following this offering could cause the market price for our common stock to decline.

After this offering, the sale of shares of our common stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult for us to sell equity securities in the future at a time and at a price that we deem appropriate.

Upon consummation of this offering, we will have a total of shares of common stock outstanding, giving effect to the Conversion. Of the outstanding shares, the shares (or shares if the underwriters exercise their over-allotment option in full) sold in this offering by us will be freely tradable without restriction or further registration under the Securities Act of 1933, as amended (the "Securities Act"), except that any shares held by our affiliates (as defined under Rule 144 of the Securities Act ("Rule 144")), including the Veritas Holders and our directors and executive officers may be sold only in compliance with the limitations described in "Shares Eligible for Future Sale."

The remaining shares (all of which are held by Parent LLC), representing % of our total outstanding shares of common stock immediately following this offering, will be "restricted securities" within the meaning of Rule 144 and subject to certain restrictions on resale following the consummation of this offering. Restricted securities may be sold in the public market only if they are registered under the Securities Act or are sold pursuant to an exemption from registration such as Rule 144, as described in "Shares Eligible for Future Sale."

In connection with this offering, we, our officers and directors and the Veritas Holders, prior to this offering have each agreed with the underwriters, subject to certain exceptions, not to dispose of or hedge any of our or their shares of common stock or securities convertible into or exchangeable for shares of our common stock during the period from the date of this prospectus continuing through the date 180 days after the date of this prospectus, except with the prior written consent of the representatives of the underwriters. See "Underwriting" for a description of these lock-up agreements. When the lock-up period expires, we and our officers and directors and the Veritas Holders subject to lock-up agreements will be able to sell our shares in the public market. In addition, the representatives of the underwriters may, in their sole discretion, release all or some portion of the shares subject to lock-up agreements at any time and for any reason. See "Shares Eligible for Future Sale" for more information. Sales of a substantial number of such shares upon expiration of the lock-up agreements, the perception that such sales may occur, or early release of these agreements, could cause our market price to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.

Following consummation of this offering, we intend to file one or more registration statements on Form S-8 under the Securities Act to register the shares of common stock issued or issuable under our Equity Incentive Plan. Any such Form S-8 registration statement will become effective

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automatically upon filing. We expect that the initial registration statement on Form S-8 will cover shares of common stock. Once these shares are registered, they can be sold in the public market upon issuance, subject to Rule 144 limitations applicable to affiliates, vesting restrictions and the lock-up restrictions described under "Underwriting."

Upon expiration of the lock-up agreements described above, shares held by our directors and officers and the Veritas Holders will be eligible for resale, subject to volume, manner of sale and other limitations under Rule 144.

In addition, pursuant to our registration rights agreement, we have granted to each of Parent LLC and Veritas Capital certain "demand" registration rights in connection with shares of our common stock (including any shares issuable upon redemption or exchange of membership interests in Parent LLC) held by Parent LLC or Veritas Capital, as applicable. Such demand registration rights are exercisable at any time following the date that is six months following the consummation of this offering, subject to specified dollar and ownership thresholds. In addition, we have granted to each of Parent LLC, Veritas Capital and the other holders of registrable securities customary "piggyback" registration rights in connection with our common stock (including any shares issuable upon redemption or exchange of membership interests of Parent LLC). By exercising their registration rights and selling a large number of shares, such stockholders could cause the prevailing market price of our common stock to decline. Registration of any of these outstanding shares of common stock would result in such shares becoming freely tradable without compliance with Rule 144 upon effectiveness of the registration statement. See "Certain Relationships and Related Party Transactions — Registration Rights Agreement" and "Shares Eligible for Future Sale."

As restrictions on resale end or if these stockholders exercise their registration rights, the market price of our shares of common stock could drop significantly if the holders of these shares sell them or are perceived by the market as intending to sell them. These factors could also make it more difficult for us to raise additional funds through future offerings of our shares of common stock or other securities.

Veritas Capital will continue to have significant influence over us after this offering, including control over decisions that require the approval of stockholders, which could limit your ability to influence the outcome of key transactions, including a change of control.

Veritas Capital exerts, and after this offering will continue to exert, significant influence over us. Immediately following this offering, giving effect to the Conversion, Veritas Capital will beneficially own approximately % of our common stock, or approximately % if the underwriters exercise their over-allotment option in full. As a result, Veritas Capital will have the ability to elect all of the members of our Board of Directors and thereby control our policies and operations, including, among other things, the appointment of management, future issuances of our common stock or other securities, the payment of dividends, if any, on our common stock, the incurrence or modification of debt by us, amendments to our amended and restated certificate of incorporation and second amended and restated bylaws and the entering into of extraordinary transactions. In addition, of our directors at the time of this offering are either employees of or advisors to Veritas Capital, as described under "Management."

Veritas Capital may have interests that do not align with the interests of our other stockholders, including with regard to pursuing acquisitions, divestitures and other transactions that, in their judgment, could enhance their equity investment, even though such transactions might involve risks to our other stockholders. For example, Veritas Capital could cause us to make acquisitions that increase our indebtedness or to sell sales-generating assets. Veritas Capital will have effective control over our decisions to enter into such corporate transactions regardless of whether others believe that the transaction is in our best interests. Such control may have the effect

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of delaying, preventing or deterring a change of control of us, could deprive stockholders of an opportunity to receive a premium for their common stock as part of a sale of us and might ultimately affect the market price of our common stock. In addition, so long as Veritas Capital continues to own a significant amount of our voting power, even if such amount is less than 50%, Veritas Capital will continue to be able to strongly influence or effectively control our decisions. The concentration of ownership could deprive you of an opportunity to receive a premium for your shares of our common stock as part of a sale of us and ultimately might affect the market price of our common stock. See "Description of Capital Stock."

Veritas Capital and its investors are also in the business of making investments in companies and may from time to time acquire and hold interests in businesses that compete directly or indirectly with us. Our amended and restated certificate of incorporation will provide that, to the fullest extent permitted by law, Veritas Capital, any of its affiliates or any director who is not employed by us (including any non-employee director who serves as one of our officers in both his director and officer capacities) or his or her affiliates will have no duty to refrain from engaging in a corporate opportunity in the same or similar lines of business in which we or our affiliates now engage or propose to engage or otherwise competing with us or our affiliates. Veritas Capital or its investors may also pursue acquisition opportunities that are complementary to our business and, as a result, those acquisition opportunities may not be available to us. Veritas Capital will not be obligated to present any particular investment or business opportunity to us, even if such opportunity is of a character that could be pursued by us, and may pursue it for their own account or recommend to any other person any such investment opportunity.

We will be a "controlled company" within the meaning of the rules of the NYSE. As a result, we will qualify for, and intend to rely on, exemptions from certain corporate governance requirements that provide protection to stockholders of other companies.

After consummation of this offering, giving effect to the Conversion, Veritas Capital will continue to control a majority of the voting power of our outstanding common stock. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE. Under these rules, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements, including:

•: the requirement that a majority of the board of directors consist of "independent directors" as defined under the rules of the NYSE;
•: the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities;
•: the requirement that we have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities; and
•: the requirement for an annual performance evaluation of the nominating/corporate governance and compensation committees.

Following this offering, we intend to utilize certain of these exemptions. As a result, we may not have a majority of independent directors, our Nominating and Corporate Governance Committee and our Compensation Committee will not consist entirely of independent directors and such committees will not be subject to annual performance evaluations. Additionally, we are only required to have one independent audit committee member upon the listing of our common stock on the NYSE, a majority of independent audit committee members within 90 days from the date of listing and all independent audit committee members within one year from the date of listing.

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Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. Our status as a controlled company could make our common stock less attractive to some investors or otherwise harm our stock price.

In addition, on June 20, 2012, the SEC adopted Rule 10C-1 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to implement provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 pertaining to compensation committee independence and the role and disclosure of compensation consultants and other advisers to the compensation committee. The NYSE has since adopted amendments to its existing listing standards to comply with provisions of Rule 10C-1 under the Exchange Act, and on January 11, 2013, the SEC approved such amendments. The amended listing standards require, among others, that:

•: compensation committees be composed of fully independent directors, as determined pursuant to new and existing independence requirements;
•: compensation committees be explicitly charged with hiring and overseeing compensation consultants, legal counsel and other committee advisers; and
•: compensation committees be required to consider, when engaging compensation consultants, legal counsel or other advisers, certain independence factors, including factors that examine the relationship between the consultant or adviser's employer and us.

As a "controlled company", we will not be subject to these compensation committee independence requirements.

If we fail to maintain proper and effective internal control over financial reporting, our ability to produce accurate and timely financial statements could be impaired and investors' views of us could be harmed.

The Sarbanes-Oxley Act of 2002, as amended (the "Sarbanes-Oxley Act"), requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. One key aspect of the Sarbanes-Oxley Act is that we must perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, with attestation from our independent registered public accounting firm on the effectiveness of our internal controls, beginning with our annual report on Form 10-K for the fiscal year ending December 31, 2018. If we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our common stock could decline and we could be subject to sanctions or investigations by the NYSE, the SEC or other regulatory authorities, which would require additional financial and management resources.

Our ability to successfully implement our business plan and comply with the Sarbanes-Oxley Act requires us to be able to prepare timely and accurate financial statements, among other requirements. Any delay in the implementation of, or disruption in the transition to, new or enhanced systems, procedures or controls, may cause our operations to suffer and we may be unable to conclude that our internal control over financial reporting is effective and to obtain an unqualified report on internal controls from our independent registered public accounting firm. Moreover, we cannot be certain that these measures would ensure that we implement and maintain adequate controls over our financial processes and reporting in the future. Even if we were to conclude, and our independent registered public accounting firm were to concur, that our internal

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control over financial reporting provided reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP, because of its inherent limitations, internal control over financial reporting may not prevent or detect fraud or misstatements. Were we to identify errors in our historical financial statements, we might be required to restate those financial statements and might not be able to timely comply with our reporting obligations as a public company. This, in turn, could have an adverse impact on trading prices for our common stock and could adversely affect our ability to access the capital markets.

We have identified material weaknesses in our internal control over financial reporting. If we do not adequately remediate these material weaknesses, or if we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, or comply with the accounting and reporting requirements applicable to public companies, which may adversely affect investor confidence in us and, as a result, the value of our common stock.

In connection with the audit of our consolidated financial statements for the year ended December 31, 2016, material adjustments were identified related to years ended December 31, 2012 through December 31, 2015, which represented material weaknesses in our internal control over financial reporting as of December 31, 2016 and as of March 31, 2017. A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

Our material weaknesses related to the following:

Material adjustments were identified and recorded in the financial statements for the years ended December 31, 2012 through December 31, 2015 related to the accounting for certain non-recurring or unique transactions involving a high level of complexity, subjectivity and judgment. During those periods we did not retain a sufficient complement of personnel possessing the appropriate accounting knowledge and experience, which resulted in incorrect conclusions in the application of GAAP associated with non-recurring or unique transactions involving a high level of complexity, subjectivity and judgment. This material weakness contributed to additional material weaknesses in which, specifically, (1) we did not design and maintain effective internal control over the accounting for business combinations including certain post-acquisition activities (including the assessment of appropriate reporting units) and (2) we did not maintain effective controls over the period-end financial reporting process, specifically controls over the review by individuals with the appropriate accounting knowledge of certain significant account reconciliations that analyzed the accounting for business combinations and certain post-acquisition activities and the review of the consolidated financial statements.

These material weaknesses resulted in adjustments to our consolidated financial statements for the years ended December 31, 2014 and 2015 related to the accounting for:

•: an indemnification settlement in connection with the Company's divestiture from Lockheed Martin Corporation ("Lockheed Martin");
•: a contingent consideration liability related to our acquisition of QNA SSG; and
•: certain lease abandonment liabilities.

As a public company, we are required to maintain internal control over financial reporting and to report any material weaknesses in the design or operating effectiveness of such internal controls. However, neither our management nor an independent registered public accounting firm has ever performed an evaluation of our internal control over financial reporting in accordance with the rules

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of the SEC because no such evaluation has been required. Had we or our independent registered public accounting firm performed an evaluation of our internal control over financial reporting, additional material weaknesses may have been identified. Further, due to a transition period established by the rules of the SEC for newly public companies, our management will not be required to provide a report on internal control over financial reporting until our second annual report following this offering, which will be for our year ending December 31, 2018, and our independent registered public accounting firm will not be required to attest to our management report on internal control over financial reporting until that time.

We have implemented and are still in the process of implementing measures designed to improve our internal control over financial reporting and remediate our material weaknesses, including:

•: the augmentation of our accounting staff, including the appointment of a new Corporate Controller and Chief Accounting Officer in January 2016 and several key accounting resources who possess the appropriate accounting knowledge and experience and who will also implement and maintain effective controls over the period-end financial reporting process; and
•: the commissioning of a third-party specialist to provide support in our analysis of the accounting for complex non-recurring transactions and also to assist us in formalizing the documentation of our accounting policies and internal controls and to provide recommendations for improvements.

Although we are in the process of carrying out these remediation activities, we cannot assure you that the measures we have taken to date, together with any measures we may take in the future, will be sufficient to remediate our material weaknesses in our internal control over financial reporting or to avoid potential future material weaknesses. If the steps we take do not correct the material weaknesses in a timely manner, we will be unable to conclude that we maintain effective internal control over financial reporting. Accordingly, this could result in misstatement of the accounts or disclosures that would result in a material misstatement of our financial statements that would not be prevented or detected on a timely basis. As we have not completed the design, evaluation and testing of our internal controls over financial reporting, we cannot be certain that these material weaknesses will be fully remediated or that other material weaknesses will not be discovered in the future.

If we are unable to successfully remediate our existing or any future material weaknesses in our internal control over financial reporting, or if we identify any additional existing material weaknesses, the accuracy and timing of our financial reporting may be adversely affected, we may be unable to maintain compliance with securities law requirements regarding timely filing of periodic reports in addition to NYSE listing requirements, our reported financial results may be materially misstated, investors may lose confidence in our financial reporting and our stock price may decline as a result. As a result of such failures, we could also become subject to investigations by the NYSE, the SEC or other regulatory authorities, and become subject to litigation from investors and stockholders, which could harm our reputation, business and financial condition and divert financial and management resources from our core business.

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We do not intend to pay dividends on our common stock for the foreseeable future and the instruments governing our current indebtedness contain various covenants that may limit our ability to pay dividends.

We do not intend to pay cash dividends on our common stock in the foreseeable future. Our Board of Directors may, in its discretion, modify or repeal our dividend policy. The declaration and payment of dividends depends on various factors, including our net income, financial conditions, cash requirements, future prospects and other factors deemed relevant by our Board of Directors. In addition, Vencore Holding is a holding company that does not conduct any business operations of its own. As a result, Vencore Holding is dependent upon cash dividends and distributions and other transfers from its subsidiaries to make dividend payments on its common stock.

The instruments governing our current indebtedness contain covenants which place limits on the amounts of dividends we may pay. See "Description of Certain Indebtedness." In addition, under Delaware law, our Board of Directors may declare dividends only to the extent of our "surplus" (which is defined as total assets at fair market value minus total liabilities, minus statutory capital), or if there is no surplus, out of net profits for the then-current and/or immediately preceding fiscal year. See "Dividend Policy."

Anti-takeover provisions in our organizational documents could delay or prevent a change of control.

Certain provisions of our amended and restated certificate of incorporation and second amended and restated bylaws may have an anti-takeover effect and may delay, defer or prevent a merger, acquisition, tender offer, takeover attempt or other change of control transaction that a stockholder might consider in its best interest, including those attempts that might result in a premium over the market price for the shares held by our stockholders.

These provisions provide for, among other things:

•: a classified Board of Directors with staggered three-year terms;
•: the ability of our Board of Directors to issue one or more series of preferred stock;
•: advance notice for nominations of directors by stockholders and for stockholders to include matters to be considered at our annual meetings;
•: certain limitations on convening special stockholder meetings;
•: the removal of directors only for cause and only upon the affirmative vote of the holders of at least % in voting power of all of the then outstanding shares of our stock entitled to vote thereon, voting together as a single class, if Veritas Capital beneficially owns, in the aggregate, less than % in voting power of our stock entitled to vote generally in the election of directors; and
•: that certain provisions may be amended only by the affirmative vote of at least % in voting power of all the then outstanding shares of our stock entitled to vote thereon, voting together as a single class, if Veritas Capital beneficially owns, in the aggregate, less than % in voting power of our stock entitled to vote generally in the election of directors.

These anti-takeover provisions could make it more difficult for a third party to acquire us, even if the third party's offer may be considered beneficial by many of our stockholders. As a result, our stockholders may be limited in their ability to obtain a premium for their shares. See "Description of Capital Stock."

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Our amended and restated certificate of incorporation will designate the Court of Chancery of the State of Delaware as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by our stockholders, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us or our directors, officers, employees or stockholders.

Our amended and restated certificate of incorporation will provide that, subject to limited exceptions, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for any (1) derivative action or proceeding brought on behalf of us, (2) action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or stockholders to us or our stockholders, (3) action asserting a claim against us or any of our directors, officers or stockholders arising pursuant to any provision of the Delaware General Corporation Law (the "DGCL") or our amended and restated certificate of incorporation or our second amended and restated bylaws or (4) action asserting a claim against us or any of our directors, officers or stockholders governed by the internal affairs doctrine.

Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and to have consented to the provisions of our amended and restated certificate of incorporation described above. This choice of forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers or other employees, which may discourage such lawsuits against us and our directors, officers and employees. Alternatively, if a court were to find these provisions of our amended and restated certificate of incorporation inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business and financial condition.

We will incur increased costs and become subject to additional regulations and requirements as a result of becoming a newly public company, and our management will be required to devote substantial time to new compliance matters, which could lower our profits or make it more difficult to run our business.

As a newly public company, we will incur significant legal, accounting and other expenses that we have not incurred as a private company, including costs associated with public company reporting requirements and costs of recruiting and retaining non-executive directors. We will also incur costs associated with the Sarbanes-Oxley Act and related rules implemented by the SEC and the NYSE. We expect these rules and regulations to increase our legal and financial compliance costs and to make some activities more time-consuming and costly, although we are currently unable to estimate these costs with any degree of certainty. For example, these laws and regulations could make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance. These laws and regulations could also make it more difficult for us to attract and retain qualified persons to serve on our Board of Directors, our board committees or as our executive officers. Our management and other personnel will devote a substantial amount of time to these compliance initiatives. As a result, management's attention may be diverted from other business concerns, which could harm our business and operating results. We will need to hire more employees in the future to comply with these requirements, which will increase our costs and expenses.

Our management team and other personnel will devote a substantial amount of time to new compliance initiatives and we may not successfully or efficiently manage our transition to a public company. To comply with the requirements of being a public company, including the Sarbanes-Oxley Act, we will need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or internal audit staff, which would require us to incur additional expenses and harm our results of operations.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This prospectus contains "forward-looking statements." All statements, other than statements of historical facts included in this prospectus, including statements concerning our plans, objectives, goals, strategies, future events, future performance or financial condition, financing needs, plans or intentions relating to acquisitions, business trends, prospects and other information referred to under "Prospectus Summary," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Business" are forward-looking statements. When used in this prospectus, the words "estimates," "expects," "contemplates," "anticipates," "projects," "plans," "intends," "believes," "forecasts," "may," "should" and variations of such words or similar expressions are intended to identify forward-looking statements. The forward-looking statements are not historical facts, and are based upon our current expectations, beliefs and projections, and various assumptions, many of which, by their nature, are inherently uncertain and beyond our control. Our expectations, beliefs and projections are expressed in good faith, and we believe there is a reasonable basis for them. However, there can be no assurance that management's expectations, beliefs and projections will result or be achieved, and actual results may vary materially from what is expressed in or indicated by the forward-looking statements.

There are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially from the forward-looking statements contained in this prospectus. Such risks, uncertainties and other important factors include, among others, the risks, uncertainties and factors set forth above under "Risk Factors" and the following risks, uncertainties and factors:

•: any issue that compromises our relationships with the U.S. Government or damages our professional reputation;
•: changes in U.S. Government spending and mission priorities that shift expenditures away from agencies or programs that we support;
•: the size of our addressable markets and the amount of U.S. Government spending on private contractors;
•: failure by us or our employees to obtain and maintain necessary security clearances or certifications;
•: failure to comply with numerous laws and regulations;
•: changes in U.S. Government procurement, contract or other practices or the adoption by the U.S. Government of new laws, rules and regulations in a manner adverse to us;
•: the termination or nonrenewal of our U.S. Government contracts;
•: our ability to compete effectively in the competitive bidding process and delays, contract terminations or cancellations caused by competitors' protests of major contract awards received by us;
•: increased competition from other companies in our industry;
•: our ability to generate revenue under certain of our contracts;
•: any inability to attract, train or retain employees with the requisite skills, experience and security clearances;
•: the loss of members of senior management or failure to develop new leaders;
•: misconduct or other improper activities from our employees or subcontractors;
•: our ability to realize the full value of our backlog and the timing of our receipt of revenue under contracts included in backlog;

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•: changes in the mix of our contracts and our ability to accurately estimate or otherwise recover expenses, time and resources for our contracts;
•: changes in estimates used in recognizing revenue;
•: internal system or service failures and security breaches;
•: inherent uncertainties and potential adverse developments in legal proceedings, including litigation, audits, reviews and investigations, which may result in materially adverse judgments, settlements or other unfavorable outcomes;
•: failure to maintain strong relationships with other contractors;
•: risks related to our indebtedness and our credit facilities which contain financial and operating covenants; and
•: other risks and factors listed under "Risk Factors" and elsewhere in this prospectus.

There may be other factors that may cause our actual results to differ materially from the forward-looking statements, including factors disclosed under the sections titled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus. You should evaluate all forward-looking statements made in this prospectus in the context of these risks and uncertainties.

We caution you that the risks, uncertainties and other factors referenced above may not contain all of the risks, uncertainties and other factors that are important to you. In addition, we cannot assure you that we will realize the results, benefits or developments that we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our business in the way expected. All forward-looking statements in this prospectus apply only as of the date made and are expressly qualified in their entirety by the cautionary statements included in this prospectus. We undertake no obligation to publicly update or revise any forward-looking statements to reflect subsequent events or circumstances.

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USE OF PROCEEDS

We estimate that we will receive gross proceeds from our sale of shares of common stock in this offering of approximately $ million (or $ million if the underwriters exercise their over-allotment option in full), based on the assumed initial public offering price of $ per share, the midpoint of the estimated offering price range set forth on the cover of this prospectus. After deducting the underwriting discounts and commissions and estimated offering expenses payable by us, which are estimated to be $ million, we expect to receive net proceeds from this offering of approximately $ million (or $ million if the underwriters exercise their over-allotment option in full, giving effect to the Class A Dividend). A $1.00 increase (decrease) in the assumed initial public offering price of $ would increase (decrease) the net proceeds that we receive from this offering by $ million (or $ million if the underwriters exercise their over-allotment option in full, giving effect to the Class A Dividend), assuming that the number of shares offered, as set forth on the cover page of this prospectus, remains the same after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

We intend to use $ million (or $ million if the underwriters exercise their over-allotment option in full, giving effect to the Class A Dividend) of the net proceeds from this offering to repay a portion of the outstanding indebtedness under our First Lien Term Loan and our Second Lien Term Loan and to pay fees and expenses related thereto, including a prepayment fee under our Second Lien Term Loan equal to 1% of the principal amount prepaid. As of March 31, 2017, our First Lien Term Loan and our Second Lien Term Loan had a weighted average interest rate of 7%. Our First Lien Term Loan matures on November 23, 2019 and our Second Lien Term Loan matures on May 23, 2020.

In addition, $ million of the net proceeds from this offering will be paid to Veritas Capital Management as a transaction fee in connection with this offering under its advisory agreement with us.

If the underwriters exercise their over-allotment option to purchase additional shares from us, % of the aggregate net proceeds from the sale of shares pursuant to such option will be used to pay the Class A Dividend. To the extent the underwriters exercise their over-allotment option in full and assuming Parent LLC distributes the Class A Dividend to its members, Veritas Capital will receive $ million of the aggregate net proceeds from this offering. See "Dividend Policy" and "Certain Relationships and Related Party Transactions."

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DIVIDEND POLICY

In June 2016, in connection with the refinancing of certain existing debt, we used a portion of the borrowings to declare and pay a one-time cash liquidating dividend in the amount of $183.0 million to Parent LLC as the sole holder of record of our outstanding common stock. Immediately prior to the consummation of this offering, we will declare the Class A Dividend payable if the underwriters exercise their over-allotment option, which will be in an amount representing % of the aggregate net proceeds from the sale of up to additional shares of our common stock. Upon the earlier of (1) the payment in full of the Class A Dividend, if any, or (2) , 2017, the expiration of the underwriters' over-allotment option, if unexercised, the Class A Common Stock will automatically convert on a one-for-one basis into our common stock. The Class A Dividend will not be payable if the underwriters do not exercise their over-allotment option.

We do not intend to pay cash dividends on our common stock in the foreseeable future. We are a holding company that does not conduct any business operations of our own. As a result, we are dependent upon cash dividends and distributions and other transfers from our subsidiaries to make dividend payments on our common stock. The amounts available to us to pay cash dividends are restricted by covenants in our credit facilities and may be further restricted by the terms of any future debt or preferred securities. See "Description of Certain Indebtedness" for a description of the restrictions on our ability to pay dividends. The declaration and payment of dividends is also at the discretion of our Board of Directors and depends on various factors including our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our Board of Directors.

In addition, under Delaware law, our Board of Directors may declare dividends only to the extent of our surplus (which is defined as total assets at fair market value minus total liabilities, minus statutory capital) or, if there is no surplus, out of our net profits for the then-current and/or immediately preceding fiscal year.

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CAPITALIZATION

The following table sets forth our cash and cash equivalents and capitalization as of March 31, 2017:

•: on an actual basis; and
•: on an as adjusted basis to give effect to (1) the Conversion, (2) the sale by us of shares of common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, and our receipt of the estimated net proceeds from this offering after deducting the underwriting discounts and commissions and estimated offering expenses payable by us (assuming no exercise of the underwriters' over-allotment option) and (3) the use of proceeds from this offering.

If the underwriters exercise their over-allotment option, we will pay % of the aggregate net proceeds from the sale of shares pursuant to such option to Parent LLC as the Class A Dividend.

You should read this table in conjunction with the information contained in "Use of Proceeds," "Selected Historical Consolidated Financial Data," "Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Description of Certain Indebtedness," as well as our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.


		As of March 31, 2017 (Unaudited)

($ in thousands, except par value and share numbers)		Actual			As Adjusted

Cash and cash equivalents	$	34,379		$

Debt:
Credit Facilities
Revolving Facility		—
First Lien Term Loan		546,480
Second Lien Term Loan		244,200
Less: Discount		(19,748	)
Less: Deferred financing costs		(3,878	)
Total debt	$	767,054		$



Stockholders' equity:
Common stock, $0.01 par value, 1,000 shares authorized, 1 share issued and outstanding, actual, and shares authorized, shares issued and outstanding, as adjusted
Additional paid-in capital		188,945
Accumulated other comprehensive loss		(274,878	)
Retained deficit		(59,323	)

Total stockholders' equity (deficit)		(145,256	)

Total capitalization	$	621,798		$

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DILUTION

If you invest in shares of our common stock in this offering, your investment in us will be immediately diluted to the extent of the difference between the initial public offering price per share of our common stock and the adjusted net tangible book value (deficit) per share of our common stock after this offering. Dilution results from the fact that the per share offering price of our common stock is substantially in excess of the book value (deficit) per share attributable to the shares of our common stock held by our existing stockholder.

Our net tangible book deficit as of March 31, 2017 was approximately $(781.5) million, or $ per share of our common stock, giving effect to the Conversion. We calculate net tangible book value (deficit) per share by taking the amount of our total tangible assets, reduced by the amount of our total liabilities, and then dividing that amount by the total number of shares of common stock outstanding.

After giving effect to (1) the Conversion and (2) the receipt of net proceeds from our sale of shares of common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover of this prospectus, and after deducting underwriting discounts and commissions and estimated offering expenses payable by us (assuming no exercise of the underwriters' over-allotment option), our adjusted net tangible book value (deficit) as of March 31, 2017 would have been $ million, or $ per share. This represents an immediate increase in net tangible book value (or a decrease in net tangible book deficit) of $ per share to our existing stockholder and an immediate dilution in net tangible book value (deficit) of $ per share to investors purchasing shares of common stock in this offering at the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus.

The following table illustrates this dilution on a per share basis:


Assumed initial public offering price per share	$	$
Net tangible book value (deficit) per share as of March 31, 2017
Increase in tangible book value (deficit) per share attributable to this offering
Adjusted net tangible book value (deficit) per share after this offering

Dilution per share to investors in this offering	$	$

Dilution is determined by subtracting adjusted net tangible book value (deficit) per share of common stock after the offering from the initial public offering price per share of common stock.

A $1.00 increase (decrease) in the assumed initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, would increase (decrease) our adjusted net tangible book value (deficit) per share by $ and dilution per share to investors purchasing shares of common stock in this offering by $ , assuming that the number of shares sold by us, as set forth on the cover of this prospectus, remains the same and after deducting underwriting discounts and commissions and estimated offering expenses payable by us. An increase (decrease) of shares in the number of shares of common stock sold by us, as set forth on the cover page of this prospectus, would increase (decrease) our adjusted net tangible book value (deficit) per share by $ and dilution per share to investors purchasing shares of common stock in this offering by $ , assuming no change in the assumed initial public offering price and after deducting underwriting discounts and commissions and estimated offering expenses payable by us.

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The following table summarizes, as of March 31, 2017, the total number of shares of common stock purchased from us, the total consideration paid to us and the average price per share paid by our existing stockholder and by new investors purchasing shares in this offering. As the table shows, new investors purchasing shares in this offering will pay an average price per share substantially higher than our existing stockholder paid. The table below assumes an initial public offering price of $ per share, which is the midpoint of the estimated offering price range set forth on the cover of this prospectus, for shares purchased in this offering and excludes underwriting discounts and commissions and estimated offering expenses payable by us:


	Shares Purchased			Total Consideration			Average Price

	Number	%		Amount	%		per Share

Existing stockholder
New investors

		100.0	%		100.0	%

Except as otherwise indicated, the above discussion and tables assume no exercise of the underwriters' over-allotment option and gives effect to the Conversion. If the underwriters exercise their over-allotment option in full, our existing stockholder would own % and our new investors would own % of the total number of shares of our common stock outstanding upon the consummation of this offering, giving effect to the Conversion.

You may also experience additional dilution upon future equity issuances or the exercise of stock options to purchase, or redemptions of membership interests in Parent LLC in exchange for, shares of our common stock pursuant to the Operating Agreement or granted to our employees, executive officers and directors under our current and future stock incentive plans.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

The following table sets forth our selected historical consolidated financial and other data for the periods and at the dates indicated. The selected historical consolidated financial data for the years ended December 31, 2014, December 31, 2015 and December 31, 2016 and as of December 31, 2015 and 2016 have been derived from our historical audited consolidated financial statements and notes thereto included elsewhere in this prospectus. We have derived the selected historical consolidated financial data for the years ended December 31, 2012 and December 31, 2013 and as of December 31, 2012, December 31, 2013 and December 31, 2014 from our unaudited historical consolidated financial statements and notes thereto not included in this prospectus. We have derived the selected historical consolidated financial data for the three months ended March 31, 2016 and March 31, 2017, and as of March 31, 2017, from our unaudited consolidated interim financial statements and notes thereto included elsewhere in this prospectus. We have derived the selected historical consolidated balance sheet data as of March 31, 2016 from our unaudited consolidated interim financial statements and notes thereto that are not included in this prospectus. Our unaudited consolidated interim financial statements were prepared on a basis consistent with our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal and recurring adjustments, necessary for a fair statement of the financial information.

Our historical results are not necessarily indicative of future operating results, and the results for any interim period are not necessarily indicative of the results that may be expected for a full fiscal year.

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You should read this information in conjunction with the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations" and our consolidated financial statements and notes thereto, in each case, included elsewhere in this prospectus.


		Years Ended December 31,															Three Months Ended March 31,

		(Unaudited)			(Unaudited)												(Unaudited)

($ in thousands)		2012			2013			2014			2015			2016			2016			2017

Consolidated Statements of Operations:
Revenue	$	691,687		$	650,203		$	1,001,578		$	1,166,645		$	1,168,067		$	295,756		$	284,684
Operating costs and expenses
Cost of revenue		(548,586	)		(539,907	)		(853,816	)		(981,811	)		(985,205	)		(249,681	)		(240,945	)
General and administrative expenses		(72,972	)		(52,963	)		(72,165	)		(77,925	)		(70,204	)		(18,028	)		(18,812	)
Depreciation and amortization		(22,966	)		(25,213	)		(30,499	)		(29,122	)		(28,303	)		(6,997	)		(7,138	)
Gain (loss) on contingent consideration		1,400			—			(12,865	)		7,897			—			—			—
Lease abandonment expense		—			—			(21,645	)		—			—			—			—
Deferred contract costs		(9,733	)		(12,558	)		(1,833	)		(2,854	)		(6,493	)		(1,638	)		(1,286	)
(Loss) gain on pension plan		(12,203	)		(9,278	)		2,771			1,239			6,451			1,250			2,266
Impairment of goodwill and trade name		(127,071	)		(8,000	)		(56,000	)		—			—			—			—

Total operating costs and expenses		(792,132	)		(647,919	)		(1,046,052	)		(1,082,576	)		(1,083,754	)		(275,094	)		(265,915	)

(Loss) income from operations		(100,444	)		2,284			(44,474	)		84,069			84,313			20,662			18,769
Interest expense		(39,169	)		(44,124	)		(55,219	)		(60,941	)		(63,959	)		(15,472	)		(15,951	)
Debt extinguishment expense		—			—			(8,044	)		—			(7,159	)		—			—
Other, net		7,949			266			318			597			1,761			108			114
Investment gain		—			—			—			—			—			—			2,951

(Loss) income before income taxes and equity in net earnings of affiliate		(131,664	)		(41,574	)		(107,419	)		23,725			14,956			5,298			5,883
Income tax expense		13,932			24,086			(2,488	)		(13,315	)		(13,929	)		(4,602	)		(2,449	)

(Loss) income before equity in net earnings of affiliate		(117,732	)		(17,488	)		(109,907	)		10,410			1,027			696			3,434

Equity in net earnings of affiliate		—			—			—			—			—			—			(106	)

Net (loss) income	$	(117,732	)	$	(17,488	)	$	(109,907	)	$	10,410		$	1,027		$	696		$	3,328



Per Share Data(1):
Weighted average shares outstanding
Basic
Diluted
Earnings per share
Basic
Diluted

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		As of December 31,											As of March 31,

		(Unaudited)		(Unaudited)		(Unaudited)							(Unaudited)

($ in thousands)		2012		2013		2014		2015		2016			2016		2017

Consolidated Balance Sheet Data (at end of period):
Cash and cash equivalents	$	34,858	$	59,162	$	26,183	$	62,207	$	38,504		$	58,951	$	34,379
Accounts receivable, net		75,419		76,759		194,209		154,314		148,971			169,732		147,014
Restricted Cash		—		—		25,462		160		—			160		—
Prepaid expenses and other current assets		5,366		6,606		13,329		19,026		16,777			17,995		18,058

Total current assets		115,643		142,527		259,183		235,707		204,252			246,838		199,451

Property and equipment, net		30,215		30,655		38,296		30,737		31,916			30,458		29,837
Intangible assets, net		366,945		342,938		296,144		276,354		257,913			271,696		253,271
Goodwill		287,588		300,029		382,965		382,965		382,965			382,965		382,965
Other long-term assets		12,584		25,891		64,365		63,503		56,674			63,302		55,141

Total assets	$	812,975	$	842,040	$	1,040,953	$	989,266	$	933,720		$	995,259	$	920,665



Total current liabilities		96,522		94,172		191,275		145,225		159,805			148,127		142,937
Total liabilities and contingencies		650,860		660,883		1,001,242		952,420		1,081,726			958,126		1,065,921
Total stockholder's equity (deficit)		162,115		181,157		39,711		36,846		(148,006	)		37,133		(145,256	)

Total liabilities and stockholder's equity	$	812,975	$	842,040	$	1,040,953	$	989,266	$	933,720		$	995,259	$	920,665

(1): Assumes no exercise of the underwriters' over-allotment option to purchase additional shares of our common stock from us and gives retroactive effect to the Conversion.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The following discussion and analysis is intended to help prospective investors understand our business, financial condition, results of operations, liquidity and capital resources. You should read this discussion in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this prospectus.

The statements in this discussion regarding industry outlook, our expectations regarding our future performance, liquidity and capital resources and other non-historical statements in this discussion are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties, including, but not limited to, the risks and uncertainties described in "Risk Factors" and "Special Note Regarding Forward-Looking Statements." Actual results may differ materially from those contained in any forward-looking statements.

Overview

Vencore is a leading provider of mission-critical, innovation-driven services and solutions to U.S. Government customers. The foundation of our business is the application of SE&I, cybersecurity, applied research and big data analytics on an enterprise-wide scale to assist our U.S. Government customers in solving their most complex information-related challenges. We are a leader in the architecture and integration of highly-engineered, mission-critical information solutions across the U.S. Government, and provide enterprise-level support to multiple governmental programs that manage, collect, analyze and disseminate critical mission data to national security agencies and their customers. We maintain industry-leading expertise in providing comprehensive solutions throughout the life of multi-billion dollar systems that support the core missions of the Intelligence Community and other U.S. Government agency customers. Our services and solutions span the entire lifecycle of programs, encompassing system(s) definition, architecture, agile solutions development, test and integration, deployment and operations. Our core values include accountability to ourselves and our customers, dedication to our customers' success, emphasis on continuous improvement and a commitment to upholding the highest standards of integrity.

Key Metrics

We manage and assess the performance of our business by evaluating a variety of metrics. Selected key metrics are discussed below.

Submittals, Awards, Book-to-Bill, Contract Backlog, Award Fees and DSO

Our future growth is dependent upon our ability to successfully bid and win new contracts in our target markets. Submittals include the total value of bids submitted, including both new and re-compete contracts. Submittals also include values of bids for task orders submitted under ID/IQ contracts and bids submitted as a subcontractor. The total value of proposals we submitted for the year ended December 31, 2016 and for the three months ended March 31, 2017 was $2.9 billion and $0.5 billion, respectively, $2.1 billion and $0.4 billion of which was for new business opportunities. The total value of proposals we submitted for the years ended December 31, 2014 and 2015 was $0.9 billion and $2.1 billion, respectively.

Contract awards generally represent the amount of revenue expected to be earned in the future from funded and unfunded contract awards received during the period, taking into account the value of option years. Contract awards include both new and re-compete contracts. Given that new contracts generate growth, we closely track the new awards component of contract awards each year. The total value of new awards we received for the years ended December 31, 2014,

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2015 and 2016, and for the three months ended March 31, 2017 was $115.8 million, $254.1 million, $204.0 million and $129.2 million, respectively.

Another key measure of our business growth is the ratio of total contract awards to revenue recorded in the same period, or our book-to-bill ratio. To drive future revenue growth, our goal is for the level of contract awards in a given period to exceed the revenue booked, thus yielding a book-to-bill ratio greater than 1.0. Our book-to-bill ratio was 0.4, 0.6, 1.4 and 1.4 for the years ended December 31, 2014, 2015 and 2016, and the three months ended March 31, 2017, respectively.

We view growth in total backlog as a key measure of our business growth. We define contract backlog to include funded backlog and unfunded backlog. Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized less revenue previously recognized on these contracts. Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized.

The following table summarizes the value of our total contract backlog at the respective dates:


		As of December 31,						As of March 31,

($ in thousands)		2014		2015		2016		2016		2017

Backlog
Funded	$	402,470	$	393,660	$	340,531	$	488,921	$	330,991
Unfunded		2,185,346		1,823,596		2,163,195		2,045,082		2,270,376

Total backlog	$	2,587,816	$	2,217,256	$	2,503,726	$	2,534,003	$	2,601,367

Backlog does not include any task orders under ID/IQ contracts, including GSA Multiple Award schedule contracts and GSA schedules, except to the extent that task orders have been awarded to us under those contracts. Our backlog includes orders under contracts that in some cases extend for several years. The U.S. Congress generally appropriates funds for our clients on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years. As a result, contracts typically are only partially funded at any point during their term and all or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

We cannot predict with any certainty the portion of our backlog that we expect to recognize as revenue in any future period. While we report internally on our backlog on a monthly basis and review backlog upon the occurrence of certain events to determine if any adjustments are necessary, we cannot guarantee that we will recognize any revenue from our backlog. The primary risks that could affect our ability to recognize such revenue are program schedule changes, contract modifications and our ability to assimilate and deploy new employees against funded backlog. Additional risks include the unilateral right of the U.S. Government to cancel multi-year contracts and related orders or to terminate existing contracts for convenience or default; cost-cutting initiatives and other efforts to reduce U.S. Government spending, such as the initiatives recently announced by the Secretary of Defense, which could reduce or delay funding for orders or services; delayed funding of our contracts due to delays in the completion of the U.S. Government's budgeting process and the use of continuing resolutions; in the case of unfunded backlog, the potential that funding will not be made available; and, in the case of priced options, the risk that our clients will not exercise their options. In our experience, the risks described above have not had a material negative effect on our ability to realize revenue from our funded backlog.

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Award Fees

Work performed under cost-plus award fee arrangements, a subset of our cost-reimbursable contracts with performance-based award fees, represented 59.9%, 61.2%, 61.5% and 61.4% of our revenues for the years ended December 31, 2014, 2015 and 2016, and for the three months ended March 31, 2017, respectively. Our award fees are significantly impacted by the performance and quality of our work performed. Additionally, our strong program execution resulted in favorable award fee scores, which can lead to contract expansion and successful awards on our re-compete contracts. For the year ended December 31, 2016, our average award fee score was 94.1% as compared to 92.9% and 93.7% for the years ended December 31, 2015 and 2014, respectively. For the three months ended March 31, 2017, our average award fee score was 92.9%. Award fee scores are measured by the total award fee earned from the total award fee available.

Days Sales Outstanding

Days sales outstanding ("DSO") is a measure of how effectively we manage the billing and collection of accounts receivable, our most significant working capital component. We calculate DSO by dividing accounts receivable at the end of each quarter, net of billings in excess of revenue, by revenue per day for the period. For the years ended December 31, 2014, 2015 and 2016, and for the three months ended March 31, 2017, DSO was 63 days, 55 days, 47 days and 47 days, respectively.

Financial and Other Highlights

Set forth below are key financial highlights for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016:

•: Revenue decreased by $11.1 million for the three months ended March 31, 2017 as compared to the three months ended March 31, 2016, principally as a result of lower volume on our recently re-competed programs.
•: Net income increased by $2.6 million to $3.3 million for the three months ended March 31, 2017 as compared to $0.7 million for the three months ended March 31, 2016, principally as a result of a gain related to our investment in HVH (as defined herein).

Set forth below are key financial highlights for the year ended December 31, 2016 as compared to the year ended December 31, 2015:

•: Revenue increased by $1.4 million for the year ended December 31, 2016 as compared to the year ended December 31, 2015. This was driven by $40.1 million of growth on existing contracts and $35.0 million for new contract wins. These increases were partially offset by a decline in revenue of approximately $35.2 million from one re-compete project, which was awarded at a reduced scope. There was also an additional decline in revenue as a result of programs ending and declines in revenue from non-core programs, which we define as contracts from our acquisition of QNA SSG that we expected to end and decided not to re-compete at the time of the acquisition.
•: Net income decreased by $9.4 million to $1.0 million for the year ended December 31, 2016 as compared to $10.4 million for the year ended December 31, 2015 principally as a result of one-time expenses incurred to refinance our debt.

Set forth below are key financial highlights for the year ended December, 31, 2015 as compared to the year ended December 31, 2014:

•: Revenue increased by $165.1 million for the year ended December 31, 2015 as compared to the year ended December 31, 2014. This was primarily attributable to the timing of the

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QNA SSG acquisition as results for the year ended December 31, 2014 incorporated only seven months of QNA SSG operating results, whereas results for the year ended December 31, 2015 incorporated a full year of QNA SSG operations. The impact of the QNA SSG acquisition to the year ended December 31, 2015 was an incremental increase in revenue of approximately $105.0 million. The remaining increase was from growth on existing programs.

•: Net income increased by $120.3 million to $10.4 million for the year ended December 31, 2015 as compared to a net loss of $109.9 million for the year ended December 31, 2014. The increase was attributable to both the additional profit associated with the additional five months of revenues from the QNA SSG acquisition as well as significant acquisition related charges recorded in the year ended December 31, 2014 including a $21.6 million charge to establish a lease abandonment liability, a $12.9 million contingent settlement loss and a trade name impairment charge of $56.0 million associated with rebranding the Company to Vencore.

Acquisition of QNA SSG

On May 23, 2014, the Company acquired QinetiQ North America Services and Solutions Group ("QNA SSG") through the purchase of all of the issued and outstanding stock of QinetiQ North America, Inc. QNA SSG was a leading provider of differentiated, high engineering content technical services and solutions to the U.S. Government. QNA SSG's core offerings included: aerospace, engineering, software solutions and enterprise IT, systems integration and engineering, training, modeling and simulation, logistics and life-cycle management. Pursuant to the terms of the merger agreement, the base consideration was $165.0 million before a $10.6 million working capital adjustment. As part of the total consideration, the Company agreed to pay contingent consideration of up to $50.0 million in cash depending on QNA SSG's financial performance between April 1, 2014 and March 31, 2015. Upon the effective date of the acquisition, management determined the fair value of the contingent consideration to be $4.6 million. The acquisition was funded by net borrowings under our Initial First Lien Term Loan (as defined herein), our Initial Second Lien Term Loan (as defined herein) and our Delayed Draw Term Loan (as defined herein). The financial results of the acquired QNA SSG business have been included in our consolidated results of operations from the May 23, 2014 acquisition date. See "Note 3 — Business Combinations" in the notes to our consolidated financial statements included elsewhere in this prospectus for further details.

Restructuring Activities

During the year ended December 31, 2014, the Company began implementing various restructuring plans upon completing acquisitions and to further achieve cost efficiencies. The Company consolidated operations in various facilities which resulted in the consolidation of leased facilities, the sale of an owned property and the reduction of full-time employees. These actions resulted in restructuring expenses, some of which were determined to be recoverable over a period based upon U.S. Government Cost Accounting Standards. Accordingly, the Company recorded an asset for these expenses of approximately $7.5 million, $11.2 million and $1.4 million for the years ended December 31, 2014, 2015 and 2016, respectively. The asset is amortized on a straight-line basis over three to five years. The Company believes that the variability of future results of operations caused by the restructuring activities will be minimal due to straight-line expense recognition of capitalized costs. These restructuring activities will result in a source of capital resources as cash receipts will be received in future periods through periodic billings. See "Note 5 — Deferred Contract Costs" in the notes to our consolidated financial statements included elsewhere in this prospectus for further details.

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Formation of HVH

On February 17, 2017, Vencore entered into a joint venture agreement with Havas Health, Inc. ("Havas"), a global communications company operating in over 50 countries focused on health and wellness communication and cross stakeholder strategy. The companies have joined together to form HVH Precision Analytics LLC ("HVH"). The joint venture will leverage sophisticated analytics and predictive modeling with deep therapeutic area expertise to provide unique data and insights into the niche rare disease market.

Upon formation, Vencore and Havas each contributed nonfinancial assets as well as cash in return for their interest in HVH, with Vencore contributing $0.5 million in cash and $3.0 million in assets, including: (i) IP, (ii) inventions, (iii) trademarks and trade secrets, (iv) IT assets and (v) customer relationships and agreements. In exchange for these contributions, Vencore received 1,000,000 of HVH's Class A Units, or 50% of HVH's equity interest.

In accordance with Financial Accounting Standards Board ("FASB") Accounting Standard Codification ("ASC") Topic 810, Consolidation ("ASC Topic 810"), we identified HVH as a variable interest entity ("VIE") because HVH, upon formation, has insufficient equity investment at risk and its equity investment holders at risk lack the ability, through voting or similar rights, to direct the activities that most significantly impact HVH's economic performance. Additionally, we evaluated our variable interests in HVH and concluded that the Company is not the primary beneficiary and therefore should not consolidate HVH as we do not hold the power to direct the activities that most significantly impact HVH's economic performance nor do we have the obligation to absorb the majority of the losses or the right to receive the majority of the benefits of the VIE. The Company has not identified any subsequent changes to HVH's governing documents or contractual arrangements that would change the characteristics or adequacy of the entity's equity investment at risk in accordance with ASC Topic 810.

The Company recorded a gain of $3.0 million with respect to its investment in HVH in the three months ended March 31, 2017, representing the fair value of contributed assets. The Company subsequently accounts for its share of earnings or losses using the equity method of accounting in accordance with ASC Topic 323, Investments — Equity method and joint ventures. The investment balance for HVH is included in "Other long-term assets" on the Company's consolidated balance sheet. The Company's investment related to this VIE totaled $2.9 million as of March 31, 2017, representing the Company's maximum exposure to loss. Under the equity method, the Company recognizes its share of earnings or losses of HVH in the periods for which they are reported by HVH in its financial statements.

Factors and Trends Affecting Our Results of Operations

We believe that the financial performance of our business and our future success are dependent upon many factors, including those highlighted in this section. Our operating performance will depend upon many variables, including the success of our growth strategies and the timing and size of investments and expenditures that we choose to undertake, as well as market growth and other factors that are not within our control.

Federal Budget Uncertainty

There is uncertainty around the timing, extent, nature and effect of Congressional and other U.S. Government actions to address budgetary constraints, caps on the discretionary budget for defense and non-defense departments and agencies, as established by the Bipartisan Budget Control Act 2011 and subsequently adjusted by the American Tax Payer Relief Act of 2012, the Bipartisan Budget Act of 2013 and the Bipartisan Budget Act of 2015, and the ability of Congress to determine how to allocate the available budget authority and pass appropriations bills to fund both

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U.S. Government departments and agencies that are, and those that are not, subject to the caps. Additionally, further delays in the completion of future U.S. Government budgets could in the future delay procurement of the services we provide. While recent budget actions reflect a more measured and strategic approach to addressing the U.S. Government's fiscal challenges, there remains uncertainty as to how exactly budget cuts, including sequestration, could impact us, and we are therefore unable to predict the extent of the impact of such cuts on our business and results of operations. A reduction in the amount of, or reductions, delays, or cancellations of funding for, services that we are contracted to provide to the U.S. Government as a result of any of these related initiatives, legislation or otherwise could have a material adverse effect on our business and results of operations.

U.S. Government Spending

Cost-cutting and efficiency initiatives, current and future budget restrictions, spending cuts and other efforts to reduce U.S. Government spending could cause clients to reduce or delay funding of orders for solutions or services or invest appropriated funds on a less consistent basis or not at all. There is a risk that clients will not issue task orders in sufficient volume to reach current contract ceilings or alter historical patterns of contract awards, including the typical increase in the award of task orders or completion of other contract actions by the U.S. Government in the period before the end of the U.S. fiscal year on September 30.

Regulations

Increased audit, review, investigation and general scrutiny by U.S. Government agencies of government contractors' performance under U.S. Government contracts and compliance with the terms of those contracts and applicable laws could affect our operating results. Negative publicity and increased scrutiny of government contractors in general, including us, relating to U.S. Government expenditures for contractor services and incidents involving the mishandling of sensitive or classified information as well as the increasingly complex requirements of the DoD and the Intelligence Community, including those related to cybersecurity, managing federal health care cost growth and focus on reforming existing government regulation of various sectors of the economy, such as financial regulation and healthcare, could impact our ability to perform in the marketplace.

Competitive Markets

We believe that we are uniquely positioned to take advantage of the markets in which we operate because of our expertise and specialization. Our ability to effectively manage project engagements, including logistics, client requirements, engineering resources and service levels, will affect our financial performance. Increased competition from other government contractors and market entrants seeking to take advantage of certain industry trends may result in the emergence of companies that are better able to compete against us.

Seasonality

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periods, and our results of operations may be affected by it. While not certain, changes in the U.S. Government's funding and spending patterns have altered historical seasonality trends, supporting our approach to managing the business on an annual basis. Seasonality is just one of a number of factors, many of which are outside of our control, which may affect our results in any period. See "Risk Factors."

Our People

Revenue from our contracts is derived from services delivered by our people and to a lesser extent from our subcontractors. Our ability to hire, retain and deploy talent is critical to our ability to grow our revenue. As of December 31, 2014, 2015, 2016, and as of March 31, 2017, we employed approximately 3,950, 3,700, 3,750 and 3,600 people, respectively. We continue to focus on our firm-wide hiring program to recruit and attract additional high quality and experienced talent. We believe this will allow us to grow our business through the deployment of increased staff against funded backlog.

Effects of Inflation

For the years ended December 31, 2014, 2015 and 2016 and for the three months ended March 31, 2017, 77.1%, 77.1%, 79.2% and 79.6% of our revenue was derived from cost-reimbursable contracts, respectively. Bids for longer-term fixed-price and time-and-materials contracts typically include sufficient provisions for labor and other cost escalations to cover anticipated cost increases over the period of performance. Consequently, revenue and costs have generally both increased commensurate with overall economic growth. As a result, operating income as a percentage of total revenue has not been significantly impacted by inflation.

Defined Benefit Plan and other Postretirement Benefits

Net actuarial gains and losses occur when the actual experience differs from any of the various assumptions used to value our benefit plans or when assumptions change. The primary factors contributing to actuarial gains and losses are changes in the discount rate used to value benefit obligations as of the measurement date each year and the difference between expected and actual returns on plan assets. This mark-to-market accounting method results in the potential for volatile and difficult to forecast adjustments.

Components of Results of Operations

Revenue

Substantially all of our revenue is derived from services provided under contracts with the U.S. Government and its agencies by our employees and subcontractors. Funding for our contracts is generally linked to trends in budgets and spending across various U.S. Government agencies and departments. We provide services under a large portfolio of contracts and contract vehicles to a broad client base, and we believe that our diversified contract and client base mitigates the risk of volatility in our business. Our service revenue includes SE&I, cybersecurity, applied research and big data analytics services.

We generate revenue under the following three basic types of contracts: cost-reimbursable, time-and-materials and fixed-price.

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include performance-based fee incentives, which are principally award fee arrangements, the Company recognizes income when such fees are probable and estimable. Estimates of the total fee to be earned are made based on contract provisions, prior experience with similar contracts or customers, and management's evaluation of our performance on such contracts. Contract costs, including indirect expenses, are subject to audit by the DCAA and, accordingly, are subject to possible cost disallowances.

Revenue on fixed-price contracts is primarily recognized using the percentage-of-completion method based on actual costs incurred relative to total estimated costs for the contracts, which are recorded using the cost-to-cost method. These estimated costs are updated during the term of the contract and may result in revision by the Company of recognized revenue and estimated costs in the period in which the changes in the estimated costs are identified. Any changes from prior estimates are recognized as an inception-to-date adjustment in the period in which the facts necessitating the revision have become known. Profits on fixed-price contracts result from the difference between incurred costs used to calculate the percentage of completion and revenue earned.

Revenue earned under time-and-materials contracts is recognized as hours are worked based on contractually billable rates to the client. Costs on time-and-materials contracts are expensed as incurred.

The table below presents the percentage of total revenue for each type of contract.


	Year Ended December 31,						Three Months Ended March 31 (Unaudited)

	2014		2015		2016		2017

Cost-reimbursable	77.1	%	77.1	%	79.2	%	79.6	%
Time-and-materials	8.9	%	11.7	%	9.9	%	10.0	%
Fixed-price	14.1	%	11.2	%	10.9	%	10.4	%

The amount of risk and potential reward varies under each type of contract. Under cost-reimbursable contracts, there is limited financial risk, because we are reimbursed for all allowable costs up to a ceiling. However, profit margins on this type of contract tend to be lower than on time-and-materials and fixed-price contracts. Under time-and-materials contracts, we are reimbursed for the hours worked using the predetermined hourly rates for each labor category. In addition, we are typically reimbursed for other direct contract costs and expenses at cost. We assume financial risk on time-and-materials contracts because our labor costs may exceed the negotiated billing rates. Profit margins on well-managed time-and-materials contracts tend to be higher than profit margins on cost-reimbursable contracts as long as we are able to staff those contracts with people who have an appropriate skill set. Under fixed-price contracts, we are required to deliver the objectives under the contract for a pre-determined price. Compared to time-and-materials and cost-reimbursable contracts, fixed-price contracts generally offer higher profit margin opportunities because we receive the full benefit of any cost savings, but they also generally involve greater financial risk because we bear the risk of any cost overruns. In the aggregate, the contract type mix in our revenue for any given period will affect that period's profitability. Over time, we have experienced a relatively stable contract mix.

Operating expenses

Operating expenses primarily include costs of revenue, general and administrative costs and depreciation and amortization. Costs associated with compensation and related expenses for our

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people are the most significant component of our operating expenses. The principal factors that affect our costs are the hiring of additional employees as we grow our business and are awarded new contracts and additional work under our existing contracts as well as costs associated with business development activities. We expect operating expenses to increase due to our anticipated growth and the incremental costs associated with being a public company. However, on a forward-looking basis, we generally expect these costs to decline as a percentage of our total revenue as we realize the benefits of scale.

Costs of revenue consist of direct labor and associated fringe benefits, indirect overhead, subcontractor costs, travel expenses and other expenses incurred to perform on contracts.

General and administrative expenses include salaries and wages and fringe benefits of our employees not performing work directly for customers as well as other costs related to these indirect functions.

(Loss) gain on Pension Plan

Equity in Net Earnings of Affiliate

Investments in HVH are accounted for under the equity method of accounting whereby the Company recognizes its proportionate share of HVH's net income or loss in the Company's consolidated statement of operations and does not consolidate HVH's assets and liabilities. The Company has a non-controlling 50% ownership interest in HVH and has the ability to exercise significant influence over the joint venture.

Results of Operations

The following table sets forth items from our consolidated statements of operations for the periods indicated. Our historical results are not necessarily indicative of results that may be expected for any future period. The information contained below should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this prospectus.

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Three months ended March 31, 2017 compared to three months ended March 31, 2016


		Three Months Ended March 31, (Unaudited)						Three Months Ended March 31, 2017 Compared to Three Months Ended March 31, 2016

($ in thousands)		2016			2017			$ Change		% Change

Revenue	$	295,756		$	284,684		$	(11,072	)	(3.7	)%
Operating costs and expenses
Costs of revenue (excluding depreciation and amortization)		(249,681	)		(240,945	)		(8,736	)	(3.5	)%
General and administrative expenses		(18,028	)		(18,812	)		784		4.3	%
Depreciation and amortization		(6,997	)		(7,138	)		141		2.0	%
Deferred contract cost		(1,638	)		(1,286	)		(352	)	(21.5	)%
Gain on pension plan		1,250			2,266			1,016		81.3	%

Total operating costs and expenses		(275,094	)		(265,915	)		(9,179	)	(3.3	)%

Income from operations		20,662			18,769			(1,893	)	(9.2	)%
Interest expense		(15,472	)		(15,951	)		479		3.1	%
Other, net		108			114			6		5.6	%
Investment gain		—			2,951			2,951		100	%

Income before income taxes and equity in net earnings of affiliate		5,298			5,883			585		11.0	%
Income tax expense		(4,602	)		(2,449	)		(2,153	)	(46.8	)%

Income before equity in net earnings of affiliate		696			3,434			2,738		393.4	%

Equity in net earnings of affiliate		—			(106	)		(106	)	(100	)%

Net income	$	696		$	3,328		$	2,632		378.2	%

Revenue

Revenue for the three months ended March 31, 2017 decreased by approximately $11.1 million, or 3.7%, as compared to the three months ended March 31, 2016. This decrease was primarily due to lower volume on certain re-compete contracts, where the customer reduced the scope of work. The Company also experienced a decline in revenue as a result of certain contracts ending, which was partially offset by expansion on existing programs, as well as an increase in revenue from new business, derived from our DHS USCIS JETS program contract and U.S. Cyber Command ("USCYBERCOM") contract.

Costs of Revenue

Costs of revenue for the three months ended March 31, 2017 decreased by $8.7 million, or 3.5%, as compared to the three months ended March 31, 2016. This reduction was primarily associated with the reduction in revenue.

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General and Administrative Expense

General and administrative expenses for the three months ended March 31, 2017 increased by approximately $0.8 million, or 4.3%, as compared to the three months ended March 31, 2016 due to higher bid and proposal costs. The Company expects to continue to invest in bid and proposal activities to meet its strategic growth objectives.

Depreciation and Amortization

Depreciation and amortization for the three months ended March 31, 2017 increased by approximately $0.1 million, or 2.0%, as compared to the three months ended March 31, 2016. This increase was primarily due to depreciation related to leasehold improvements made as we reduced our overall facilities footprint.

Gain on Pension Plan

The Company recorded non-cash gains of approximately $2.3 million and $1.3 million in respect of its pension plan for the three months ended March 31, 2017 and 2016, respectively.

Investment gain

The Company recorded an investment gain of approximately $3.0 million for the three months ended March 31, 2017 from our investment in HVH. We recorded a gain based on the value of the assets contributed by Vencore, which had been expensed in prior periods, in exchange for a 50% ownership in HVH.

Income Tax Expense

Income tax expense for the three months ended March 31, 2017 decreased by $2.2 million, or 46.8%, as compared to the three months ended March 31, 2016. Our effective tax rate ("ETR") for the three months ended March 31, 2017 was 41.6% as compared to 86.9% for the three months ended March 31, 2016. The decrease in ETR was attributable to the amount of tax expense associated with the amortization of indefinite-lived intangible assets in proportion to the amount of annual forecasted pretax book income. Our annualized pretax book income for the year ending December 31, 2017 is significantly higher than the amount for year ended December 31, 2016. Therefore, the amount of tax expense associated with the indefinite-lived intangibles is smaller in proportion to the amount of pretax book income, resulting in a lower annualized ETR.

Equity in Net Earnings of Affiliate

Equity in net earnings of affiliate in the amount of approximately $0.1 million represents the Company's share of the operating losses of HVH.

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Year ended December 31, 2016, compared to year ended December 31, 2015


		Year Ended December 31,						Fiscal 2016 Compared to Fiscal 2015

($ in thousands)		2015			2016			$ Change		% Change

Revenue	$	1,166,645		$	1,168,067		$	1,422		0.1	%
Operating costs and expenses
Costs of revenue (excluding depreciation and amortization)		(981,811	)		(985,205	)		3,394		0.3	%
General and administrative expenses		(77,925	)		(70,204	)		(7,721	)	(9.9	)%
Depreciation and amortization		(29,122	)		(28,303	)		(819	)	(2.8	)%
Gain on contingent consideration		7,897			—			(7,897	)	(100.0	)%
Deferred contract cost		(2,854	)		(6,493	)		3,639		127.5	%
Gain on pension plan		1,239			6,451			5,212		420.7	%

Total operating costs and expenses		(1,082,576	)		(1,083,754	)		1,178		0.1	%

Income from operations		84,069			84,313			244		0.3	%
Interest expense		(60,941	)		(63,959	)		3,018		5.0	%
Debt extinguishment costs		—			(7,159	)		(7,159	)	(100.0	)%
Other, net		597			1,761			1,164		195.0	%
Investment gain		—			—			—		—

Income before income taxes and equity in net earnings of affiliate		23,725			14,956			(8,769	)	(37.0	)%
Income tax expense		(13,315	)		(13,929	)		614		4.6	%

Income before equity in net earnings of affiliate	$	10,410		$	1,027		$	(9,383	)	(90.1	)%

Equity in net earnings of affiliate		—			—			—		—

Net income	$	10,410		$	1,027		$	(9,383	)	(90.1	)%

Revenue

Revenue for the year ended December 31, 2016 increased by approximately $1.4 million, or 0.1%, as compared to the year ended December 31, 2015. The Company experienced an increase in revenues of approximately $35.0 million from new contract awards, which was partially offset by a decline in revenue from our existing business primarily related to a re-compete contract won in 2016 with a lesser scope. However, this was offset by growth on existing contracts that yielded higher revenue.

Costs of Revenue

Costs of revenue for the year ended December 31, 2016 increased by $3.4 million, or 0.3%, as compared to the year ended December 31, 2015. Cost as a percentage of revenue was 84.3% for the year ended December 31, 2016, compared to 84.2% for the year ended December 31, 2015. The Company experienced an increase in direct labor and an offsetting decrease in subcontractor labor, which contributed to higher profitability, but this was offset by lower margins from our new wins and re-compete contracts.

General and Administrative Expense

General and administrative expenses for the year ended December 31, 2016 decreased by approximately $7.7 million, or 9.9%, as compared to the year ended December 31, 2015. The

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Company experienced cost efficiencies from restructuring efforts that were initiated subsequent to the QNA SSG acquisition in May 2014. During the year ended December 31, 2016, the Company fully integrated the QNA SSG business into the existing business and streamlined corporate functions in order to achieve cost efficiencies and synergies. For the year ended December 31, 2016, the Company reduced the average indirect employee headcount by 15.5% as compared to the year ended December 31, 2015.

Depreciation and Amortization

Depreciation and amortization for the year ended December 31, 2016 decreased by approximately $0.8 million, or 2.8%, as compared to the year ended December 31, 2015. This decrease was primarily a result of a decrease in our purchased intangible assets.

Gain on Settlement of Contingent Consideration

At the date of acquisition, management determined the fair value of the QNA SSG contingent consideration to be approximately $4.6 million. As of December 31, 2014, the fair value of this contingent consideration was valued at $17.5 million, resulting in a $12.9 million expense. In the year ended December 31, 2015, the Company settled and paid contingent consideration in the amount of $9.6 million, representing a gain of $7.9 million. The change in estimate was primarily due to the delay or cancelation of previously forecasted new business. This was a non-recurring transaction, and no further contingent consideration related to the QNA SSG acquisition is or will be payable.

Deferred Contract Costs

Beginning in the year ended December 31, 2014, the Company implemented restructuring activities across the Company to eliminate redundant employees, capabilities and certain leased and owned facilities. A portion of these restructuring costs were deferred based upon an agreement with the U.S. Government in order to be allocated to contracts in future periods. These costs are therefore being amortized by the Company over a period of three to five years. For the year ended December 31, 2016, the amount amortized was $6.5 million as compared to $2.9 million for the year ended December 31, 2015. The amount amortized increased for the year ended December 31, 2016 as more costs were capitalized in the year ended December 31, 2015, which were then amortized over a full 12 month period in the year ended December 31, 2016.

Gain on Pension Plan

The Company recorded gains of approximately $6.5 million and $1.2 million in respect of its pension plan for the years ended December 31, 2016 and 2015, respectively. This represented the non-cash gains on our pension plan based on the annual actuarial valuation.

Interest Expense and Debt Extinguishment Costs

Interest expense for the year ended December 31, 2016 increased by approximately $3.0 million, or 5.0%, as compared to the year ended December 31, 2015. The Company refinanced the Initial First Lien Term Loan and the Initial Second Lien Term Loan on June 17, 2016 to include a term loan increase of $181.9 million and $129.2 million, respectively. A portion of the borrowings under both the 2016 First Lien Term Loan (as defined herein) and the 2016 Second Lien Term Loan (as defined herein) were used to retire an aggregate principal amount of $175.0 million of the Company's senior subordinated notes. The Company paid fees of $21.4 million to lenders and third parties in connection with the refinancing. Out of the $21.4 million, $4.8 million was expensed in the period, $0.9 million was added to the deferred financing fees balance and the remaining $15.7 million was added to the loan discount. The retirement of the senior subordinated

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notes resulted in one-time fees totaling $7.1 million which were recognized as debt extinguishment costs for the year ended December 31, 2016. There were no debt extinguishment or issuance costs for the year ended December 31, 2015.

Income Tax Expense

Income tax expense for the year ended December 31, 2016 increased by $0.6 million, or 4.6%, as compared to the year ended December 31, 2015. This increase was primarily due to deferred taxes. Our ETR was 93.1% and 56.1% for the years ended December 31, 2016 and 2015, respectively. A reconciliation of the differences between the U.S. federal statutory rate and our ETR, as well as other information about our income tax provision, is provided in "Note 16 — Income Taxes" in the notes to our consolidated financial statements included elsewhere in this prospectus.

Year ended December 31, 2015, compared to year ended December 31, 2014


		Year Ended December 31,						Fiscal 2015 Compared to Fiscal 2014

($ in thousands)		2014			2015			$ Change		% Change

Revenue	$	1,001,578		$	1,166,645		$	165,067		16.5	%
Operating costs and expenses
Costs of revenue (excluding depreciation and amortization)		(853,816	)		(981,811	)		127,995		15.0	%
General and administrative expenses		(72,165	)		(77,925	)		5,760		8.0	%
Depreciation and amortization		(30,499	)		(29,122	)		(1,377	)	(4.5	)%
(Loss) gain on contingent consideration		(12,865	)		7,897			20,762		161.4	%
Lease abandonment expense		(21,645	)		—			(21,645	)	(100.0	)%
Deferred contract cost		(1,833	)		(2,854	)		(1,021	)	55.7	%
Impairment of trade name		(56,000	)		—			(56,000	)	(100.0	)%
Gain on pension plan		2,771			1,239			(1,532	)	(55.3	)%

Total operating costs and expenses		(1,046,052	)		(1,082,576	)		36,524		3.5	%

(Loss) income from operations		(44,474	)		84,069			128,543		289.0	%
Interest expense		(55,219	)		(60,941	)		5,722		10.4	%
Debt extinguishment costs		(8,044	)		—			(8,044	)	(100.0	)%
Other, net		318			597			279		87.7	%
Investment gain		—			—			—		—

(Loss) income before income taxes and equity in net earnings of affiliate		(107,419	)		23,725			131,144		122.1	%
Income tax expense		(2,488	)		(13,315	)		10,827		435.2	%

(Loss) income before equity in net earnings of affiliate	$	(109,907	)	$	10,410		$	120,317		109.5	%

Equity in net earnings of affiliate		—			—			—		—

Net (loss) income	$	(109,907	)	$	10,410		$	120,317		109.5	%

Revenue

Revenue for the year ended December 31, 2015 increased by $165.1 million, or 16.5%, as compared to the year ended December 31, 2014. In May 2014, the Company completed the acquisition of QNA SSG. Due to the timing of the transaction, the results for the year ended December 31, 2015 included a full year of revenue from QNA SSG whereas the results for the year

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ended December 31, 2014 only included seven months of revenue from QNA SSG. In addition, the Company experienced growth on existing programs totaling $60.6 million during 2015.

Costs of Revenue

Costs of revenue for the year ended December 31, 2015 increased by approximately $128.0 million, or 15.0%, as compared to the year ended December 31, 2014, consistent with the increase in revenue. Due to the timing of the QNA SSG acquisition, the results for the year ended December 31, 2015 included a full year of costs of revenue from QNA SSG whereas the results for the year ended December 31, 2014 only included seven months of costs of revenue from QNA SSG. Our costs as a percentage of revenue decreased to 84.2% for the year ended December 31, 2015 compared to 85.2% for the year ended December 31, 2014. This decrease was primarily a result of a change in cost mix, specifically an increase in labor and a decrease in direct materials.

General and Administrative Expense

General and administrative expenses for the year ended December 31, 2015 increased by approximately $5.8 million, or 8.0%, as compared to the year ended December 31, 2014, primarily driven by the acquisition of QNA SSG. The Company incurred additional integration related costs during the year ended December 31, 2015. Integration related costs included additional corporate indirect labor costs. The Company initiated cost saving restructuring activities during the year ended December 31, 2015 for which certain cost savings were realized in later periods.

Depreciation and Amortization

Depreciation and amortization for the year ended December 31, 2015 decreased by approximately $1.4 million, or 4.5%, as compared to the year ended December 31, 2014. This decrease was primarily a result of a decrease in our purchased intangible assets.

Gain on Settlement of Contingent Consideration

At the date of QNA SSG acquisition, management determined the fair value of the QNA SSG contingent consideration to be approximately $4.6 million. As of December 31, 2014, the fair value of this contingent consideration was valued at $17.5 million, resulting in a $12.9 million expense. In the year ended December 31, 2015, the Company settled and paid contingent consideration in the amount of $9.6 million and recorded a gain of $7.9 million.

Lease Abandonment Expense

Upon the acquisition of QNA SSG in 2014, the Company recorded a lease abandonment liability in the amount of approximately $5.3 million. Subsequent to the acquisition, the Company recorded additional lease abandonment liabilities totaling $21.6 million and recognized the expense in the statement of operations for the year ended December 31, 2014.

Deferred Contract Expense

Beginning in the year ended December 31, 2014, the Company implemented restructuring activities across the Company to eliminate redundant employees, capabilities and certain leased and owned facilities. A portion of these restructuring costs were deferred based upon an agreement with the U.S. Government in order to be allocated to contracts in future periods. These costs are therefore being amortized by the Company over a period of three to five years. The amount amortized for the year ended December 31, 2015 was $2.9 million as compared to $1.8 million for the year ended December 31, 2014. The amount amortized increased for the year ended

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December 31, 2015 as more costs were capitalized in the year ended December 31, 2014, which were then amortized over a full 12 month period in the year ended December 31, 2015.

Impairment of Trade Name

In conjunction with the Company's annual indefinite-lived intangible asset impairment test, management assessed the trade name of Vencore OpCo's predecessor entity, The SI Organization, Inc. (the "SI"), and determined the trade name was impaired and had no remaining market value. As such, the Company recorded an impairment charge for the total amount of the trade name, or $56.0 million, during the year ended December 31, 2014. No impairment of trade name was recorded for the year ended December 31, 2015.

Gain on Pension Plan

The Company recorded gains of approximately $1.2 million and $2.8 million in respect of its pension plan for the years ended December 31, 2015 and 2014, respectively. This represented the non-cash gains on our pension plan based on an annual actuarial valuation.

Income Tax Expense

Income tax expense for the year ended December 31, 2015 increased by $10.8 million, or 435.2%, as compared to the year ended December 31, 2014. This increase was primarily due to deferred taxes. Our ETR was 56.1% and (2.3)% for the years ended December 31, 2015 and 2014, respectively. A reconciliation of the differences between the U.S. federal statutory rate and our ETR, as well as other information about our income tax provision, is provided in "Note 16 — Income Taxes" in the notes to our consolidated financial statements included elsewhere in this prospectus.

Liquidity and Capital Resources

We finance our operations and capital expenditures through a combination of internally generated cash from operations and from borrowings under our credit facilities. We had $26.2 million, $62.2 million, $38.5 million and $34.4 million in cash and cash equivalents as of December 31, 2014, 2015 and 2016 and March 31, 2017, respectively. Our long-term debt amounted to $667.0 million, $645.6 million, $766.7 million and $767.1 million as of December 31, 2014, 2015 and 2016 and March 31, 2017, respectively. Our debt bears interest at specified rates and is held by a syndicate of lenders. See "Note 18 — Long-term Debt and Interest Rate Swap" in the notes to our consolidated financial statements included elsewhere in this prospectus for further details.

We intend to use $ million (or $ million if the underwriters exercise their over-allotment option in full, giving effect to the Class A Dividend) of the net proceeds from this offering to repay a portion of the outstanding indebtedness under our First Lien Term Loan, which was $546.5 million as of March 31, 2017, and our Second Lien Term Loan, which was $244.2 million as of March 31, 2017. We will recognize write-offs of certain deferred financing costs and original issue discount associated with that repaid debt. Following the consummation of this offering and the use of the net proceeds therefrom, our primary sources of liquidity will be cash provided by operating activities, cash and cash equivalents and borrowing capacity under our Revolving Facility. Our primary uses of cash following this offering will be for:

•: operating expenses, including salaries;
•: working capital requirements to fund the growth of our business;
•: capital expenditures which primarily relate to the purchase of computers, business systems, furniture and leasehold improvements to support our operations; and
•: debt service requirements for borrowings under our credit facilities.

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By selling shares of our common stock to the public in this offering, we will be able to expand ownership in the Company, gain access to the public capital markets and repay a portion of our outstanding indebtedness. In addition, from time to time we will evaluate alternative uses for excess cash resources, including funding acquisitions or repurchasing outstanding shares of common stock.

Generally, cash provided by operating activities has been adequate to fund our operations. Due to fluctuations in our cash flows and growth in our operations, it may be necessary from time to time in the future to borrow under our Revolving Facility to meet cash demands. Our management regularly monitors certain liquidity measures to monitor performance. We calculate our available liquidity as a sum of cash and cash equivalents from our consolidated balance sheet plus the amount available and unutilized on our Revolving Facility. We anticipate that cash provided by operating activities, cash and cash equivalents, and borrowing capacity under our Revolving Facility will be sufficient to meet our anticipated cash requirements for the next twelve months.

Credit Agreements

From time to time we may request that additional term loans under either of the First Lien Credit Agreement (as defined herein) or the Second Lien Credit Agreement (as defined herein and together with the First Lien Credit Agreement, our "Credit Agreements") or revolving commitments under the First Lien Credit Agreement be provided, subject to certain conditions. The amount of incremental borrowings that we could incur under the First Lien Credit Agreement is capped at an aggregate amount equal to the sum of (a) $125.0 million minus the amount of any incremental borrowings outstanding under the Second Lien Credit Agreement plus (b) an additional amount as long as, after giving pro forma effect thereto, (x) the first lien net leverage ratio (as defined in the First Lien Credit Agreement) would be less than 4.35:1.00 and (y) the senior secured net leverage ratio (as defined in the First Lien Credit Agreement) would be less than 6.35:1.00. The amount of incremental borrowings that we could incur under the Second Lien Credit Agreement is capped at an aggregate amount equal to the sum of (a) $125.0 million minus the amount of any incremental borrowings outstanding under the First Lien Credit Agreement plus (b) an additional amount as long as, after giving pro forma effect thereto, the senior secured net leverage ratio would be less than 6.35:1.00.

The First Lien Credit Agreement also contains a financial covenant for the benefit of the Revolving Facility lenders that requires us to maintain a maximum first lien net leverage ratio (as defined in the First Lien Credit Agreement) when utilization of the Revolving Facility exceeds 30% of the total aggregate Revolving Facility commitments. As of December 31, 2016, the Company was in compliance with the required consolidated net leverage ratio of 6.50:1:00. Events of default under the Credit Agreements include, among other things, failure to make applicable principal or interest payments when they are due, breach of certain covenants and representations or change in control. At the occurrence of such an event, the administrative agent, at the request of the lenders, may terminate the commitments and declare the outstanding principal and accrued interest thereon and all fees and other obligations to be due and payable and exercise other rights and remedies provided for in the First and Second Lien agreements. The Company is not currently in default under any of its loan provisions under the First and Second Lien agreements. See "Description of Certain Indebtedness" for more information.

The first lien net leverage ratio and the senior secured net leverage ratio are calculated using Consolidated EBITDA, as defined in our Credit Agreements ("Credit Agreement Adjusted EBITDA"). As a result, management uses Credit Agreement Adjusted EBITDA as a liquidity measure because it impacts our ability to obtain incremental borrowings under our Credit Agreements. Management also believes Credit Agreement Adjusted EBITDA is important in analyzing our liquidity because it is a key component in our ability to make further investments in our business, service our debt and

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meet working capital requirements. Consequently, Credit Agreement Adjusted EBITDA is critical to our assessment of our liquidity.

The following table shows the reconciliation of Credit Agreement Adjusted EBITDA from the most directly comparable GAAP measure, net cash provided by operating activities:


		Year Ended December 31,									Three Months Ended March 31, (Unaudited)

($ in thousands)		2014			2015			2016			2016			2017

Net cash provided by operating activities	$	492		$	48,489		$	65,227		$	1,471		$	(4,363	)
Amortization of debt discount and debt issuance costs		(3,617	)		(3,994	)		(5,870	)		(1,033	)		(1,848	)
Loss on debt extinguishment		(8,044	)					(7,159	)		—			—
Deferred income taxes		(722	)		(12,072	)		(12,778	)		(4,352	)		(2,244	)
Remeasurement of lease abandonment		—			—			1,598			—			—
(Loss) gain on dispositions of property and equipment		(400	)		(23	)		(309	)		—			—
Gain on investment		—			—			—			—			2,951
Loss on equity in net earnings of affiliate		—			—			—			—			(106	)
Changes in operating assets and liabilities, net of the effect of acquisitions		27,305			5,288			(5,105	)		13,792			17,531
Income tax expense, net		2,488			13,315			13,929			4,602			2,449
Interest expense		63,263			60,941			71,118			15,472			15,951
Pension and nonqualified plan		(3,887	)		(2,313	)		(6,114	)		(1,285	)		(1,822	)
Management advisory fee⁽¹⁾		3,644			3,340			3,705			875			944
One-time expenses⁽²⁾		8,720			6,012			4,735			629			1,241
Lender agreed pro forma cost savings adjustment⁽³⁾		7,500			3,000			—			—			—
Other		288			(572	)		(160	)		(109	)		(114	)

Credit Agreement Adjusted EBITDA	$	97,030		$	121,411		$	122,817		$	30,062		$	30,570

(1): "Management advisory fee" includes annual expenses paid or accrued at year-end related to the Company's annual obligation to Veritas Capital Management pursuant to its advisory agreement, which will be terminated in connection with this offering.
(2): "One-time expenses" primarily relate to transaction and transition costs, including severance, retention, fees and expenses, which in some cases may cross over multiple accounting periods as permitted in our Credit Agreements.
(3): "Lender agreed pro forma cost savings adjustment" after the acquisition of QNA SSG, which amounts were specifically agreed upon in our Credit Agreements.

Credit Agreement Adjusted EBITDA is not recognized under GAAP and should not be considered as an alternative to net income (loss), operating income or any other performance measures derived in accordance with GAAP, as a measure of operating performance.

Dividends

In June 2016, in connection with our debt refinancing, we used a portion of the borrowings to declare and pay a one-time cash liquidating dividend in the amount of $183.0 million to Parent LLC as the sole holder of record of our outstanding common stock. Also, immediately prior to the consummation of this offering, we will declare the Class A Dividend payable if the underwriters exercise their over-allotment option, which will be in an amount representing % of the aggregate net proceeds from the sale of up to additional shares of our common

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stock. Upon the earlier of (1) the payment in full of the Class A Dividend, if any, or (2) , 2017, the expiration of the underwriters' over-allotment option, if unexercised, the Class A Common Stock will automatically convert on a one-for-one basis into our common stock. The Class A Dividend will not be payable if the underwriters do not exercise their over-allotment option.

We do not intend to pay cash dividends on our common stock in the foreseeable future. We are a holding company that does not conduct any business operations of our own. As a result, we are dependent upon cash dividends and distributions and other transfers from our subsidiaries to make dividend payments on our common stock. The amounts available to us to pay cash dividends are restricted by covenants in our credit facilities and may be further restricted by terms of any future debt or preferred securities. See "Description of Certain Indebtedness" for a description of the restrictions on our ability to pay dividends. The declaration and payment of dividends is also at the discretion of our Board of Directors and depends on various factors, including our results of operations, financial condition, cash requirements, prospects and other factors deemed relevant by our Board of Directors. In addition, under Delaware law, our Board of Directors may declare dividends only to the extent of our surplus (which is defined as total assets at fair market value minus total liabilities, minus statutory capital) or, if there is no surplus, out of our net profits for the then-current and/or immediately preceding fiscal year.

Cash Flows

Cash received from clients, either from the payment of invoices for work performed or for advances in excess of revenue recognized, is our primary source of cash. We generally do not begin work on contracts until funding is appropriated by the client. Billing timetables and payment terms on our contracts vary based on a number of factors, including whether the contract type is cost-reimbursable, time-and-materials, or fixed-price. We generally bill and collect cash more frequently under cost-reimbursable and time-and-materials contracts, as we are authorized to bill as the costs are incurred or work is performed. In contrast, we may be limited to bill certain fixed-price contracts only when specified milestones, including deliveries, are achieved. A number of our contracts may provide for performance-based payments, which allow us to bill and collect cash prior to completing the work.

Accounts receivable is the principal component of our working capital and is generally driven by revenue growth. Accounts receivable reflects amounts billed to our clients as of each balance sheet date and receivable amounts that are currently due but unbilled. Our clients generally pay our invoices within 30 days of the invoice date. The total amount of our accounts receivable can vary significantly over time, but is generally sensitive to revenue levels.

The following table summarizes our sources and uses of cash over the periods indicated:


		Year Ended December 31,									Three Months Ended March 31, (Unaudited)

($ in thousands)		2014			2015			2016			2016			2017

Net cash provided by (used in) operating activities	$	492		$	48,489		$	65,227		$	1,471		$	(4,363	)
Net cash (used in) provided by investing activities		(184,842	)		18,096			(13,783	)		(3,724	)		1,741
Net cash provided by (used in) financing activities		151,371			(30,561	)		(75,147	)		(1,003	)		(1,503	)
Total (decrease) increase in cash and cash equivalents	$	(32,979	)	$	36,024		$	(23,703	)	$	(3,256	)	$	(4,125	)

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Operating Activities

Net cash provided by (used in) operating activities consist of net income (loss) adjusted for noncash items, such as: depreciation and amortization of property and equipment and intangible assets, deferred income taxes, share-based compensation, amortization of debt issuance costs, amortization of deferred contract costs, impairment charges and changes in net working capital assets and liabilities. The timing between the conversion of our billed and unbilled receivables into cash from our customers and disbursements to our employees and vendors is the primary driver of changes in our working capital. Our operating cash flows are primarily affected by our ability to invoice and collect from our clients in a timely manner, our ability to manage our vendor payments and the overall profitability of our contracts.

Net cash used in operating activities was $4.4 million for the three months ended March 31, 2017, as compared to net cash provided by operating activities of $1.5 million for the three months ended March 31, 2016. The $5.9 million decrease in net cash provided by operating activities was primarily due to lower income and timing differences related to customer and vendor payments.

Net cash provided by operating activities was $65.2 million for the year ended December 31, 2016, as compared to $48.5 million for the year ended December 31, 2015. The $16.7 million increase was primarily due to lower deferred contract costs in the year ended December 31, 2016 as compared to the year ended December 31, 2015 as well as the timing of our employee and vendor payments, partially offset by the timing of our customer payments.

Net cash provided by operating activities was $48.5 million for the year ended December 31, 2015, as compared to $0.5 million for the year ended December 31, 2014. This $48.0 million increase was primarily driven by higher net income and significant improvements in our billing and collections processes, leading to faster collections of accounts receivable. These increases were partially offset by higher payments for deferred contract costs and lease exit activities for the year ended December 31, 2015 as compared to the year ended December 31, 2014.

Investing Activities

Net cash provided by (used in) investing activities consists of the cash flows associated with capital expenditures, business acquisitions, acquisitions and/or dispositions of property and equipment and payments made to our deferred compensation plans. During the periods presented, all purchases of property and equipment were of a normal recurring nature.

Net cash provided by investing activities was $1.7 million for the three months ended March 31, 2017, as compared to net cash used in investing activities of $3.7 million for the three months ended March 31, 2016. The $5.4 million increase in net cash provided by investing activities was mainly due to the proceeds from the sale of investments in Company owned life insurance plans supporting the Company's deferred compensation plans that occurred in the three months ended March 31, 2017.

Net cash used in investing activities was $13.8 million for the year ended December 31, 2016, as compared to net cash provided by investing activities of $18.1 million for the year ended December 31, 2015. The $31.9 million decrease in net cash provided by investing activities was due to a $25.0 million decrease in restricted cash as a result of the settlement of our contingent consideration payment related to the QNA SSG acquisition.

Net cash provided by investing activities was $18.1 million for the year ended December 31, 2015, as compared to net cash used in investing activities of $184.8 million for the year ended December 31, 2014. The $202.9 million increase in net cash provided by investing activities was primarily due to the acquisition of QNA SSG in the year ended December 31, 2014 and an increase in restricted cash set aside in an escrow account to fund the contingent consideration payment on

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the QNA SSG acquisition. Additionally, in the year ended December 31, 2015 the Company received approximately $6.2 million from the sale of a building. These cash inflows were partially offset by increased expenditures for property and equipment in the year ended December 31, 2015.

Financing Activities

Net cash provided by (used in) financing activities is primarily associated with proceeds from debt and the repayment thereof.

Net cash used in financing activities was $1.5 million for the three months ended March 31, 2017, as compared to net cash used in financing activities of $1.0 million for the three months ended March 31, 2016. The $0.5 million increase in net cash used in financing activities was a result of higher debt payments.

Net cash used in financing activities was $75.1 million for the year ended December 31, 2016, as compared to net cash used in financing activities of $30.6 million for the year ended December 31, 2015. The $44.5 million increase in net cash used in financing activities resulted from a special liquidating dividend paid to Parent LLC of $183.0 million (no such dividend payments were made in the year ended December 31, 2015), payments to extinguish an aggregate principal amount of $175.0 million of our senior subordinated notes, and payment of debt issuance and extinguishment costs of $18.4 million, which were partially offset by a $311.1 million increase in borrowings under our First Lien Credit Agreement (as defined herein) and Second Lien Credit Agreement (as defined herein).

Net cash used in financing activities was $30.6 million for the year ended December 31, 2015, as compared to net cash provided by financing activities of $151.4 million for the year ended December 31, 2014. The increase in net cash used in financing activities was primarily due to our issuance of long-term debt and borrowings under our Delayed Draw Term Loan (as defined herein) of approximately $518.0 million in the year ended December 31, 2014 as compared to $9.6 million in the year ended December 31, 2015. These inflows were partially offset by repayment of delayed long-term debt and refinancing costs of approximately $361.1 million in the year ended December 31, 2014.

Qualitative and Quantitative Disclosure About Market Risk

Interest Rate Risk

Our market risks relate primarily to changes in interest rates. The interest rates on borrowings under our each of our First Lien Term Loan and our Second Lien Term Loan are floating and, therefore, are subject to fluctuations. Currently the applicable interest rate is based on a floor, but if interest rates rise in the future and the base rate increases above the floor, our interest expense will increase. We continually review our variable rate debt in order to ensure our portfolio is appropriately balanced as part of our overall interest rate risk management strategy, and during this process we consider both short-term and long-term conditions in the U.S. and global financial markets in making adjustments to our tolerable exposures to interest rate risk. To manage this risk, we have entered into an interest rate swap of $175.0 million. See "Note 18 — Long-Term Debt and Interest Rate Swap" in the notes to our consolidated financial statements included elsewhere in this prospectus for further information. A 1% increase in interest rates applied to our floating rate indebtedness would increase annual interest expense by approximately $8.2 million, before giving effect to our interest rate swap. We may also enter into additional interest rate swaps in the future to add stability to interest expense and to manage our exposure to interest rate fluctuations.

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Off-Balance Sheet Arrangements

We had $0.2 million of outstanding letters of credit under our Revolving Facility as of March 31, 2017. We have no other off-balance sheet arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, revenue or expenses, results of operations, liquidity, capital expenditures or capital resources.

Contractual Obligations

The following table summarizes our contractual obligations that require us to make future cash payments as of March 31, 2017 on a historical basis. For contractual obligations, we included payments that we have an unconditional obligation to make.

In the normal course of business, we enter into agreements with subcontractors and vendors to provide products and services that we consume in our operations or that are delivered to our clients. These products and services are not considered unconditional obligations until the products and services are actually delivered, at which time we record a liability for our obligation.


	Payments Due by Period
Contractual obligations	Total		Less Than 1 Year		1 to 3 Years		3 to 5 Years		More Than 5 Years
Long-term debt⁽¹⁾	$	790,680	$	4,343	$	542,137	$	244,200	$	—
Interest obligations⁽¹⁾		163,032		43,164		109,932		9,936		—
Operating lease obligations⁽²⁾		101,561		19,485		45,520		28,741		7,815
Pension obligations⁽³⁾		14,100		—		2,100		12,000		—
Capital lease obligations⁽²⁾		464		184		280		—		—

Total contractual obligations⁽⁴⁾	$	1,069,837	$	67,176	$	699,969	$	294,877	$	7,815

(1): See "Note 18 — Long-term Debt and Interest Rate Swap" in the notes to our consolidated financial statements included elsewhere in this prospectus for additional information regarding debt and related matters.
(2): See "Note 20 — Commitments and Contingencies" in the notes to our consolidated financial statements included elsewhere in this prospectus for additional information regarding commitments and contingencies.
(3): See "Note 19 — Postretirement Plans" in the notes to our consolidated financial statements included elsewhere in this prospectus for additional information regarding postretirement plans.
(4): The table above does not include $14.0 million of uncertain tax positions reflected in our consolidated balance sheet because we are fully indemnified for such tax obligations pursuant to our QNA SSG purchase agreement. See "Note 16 — Income Taxes" in the notes to our consolidated financial statements included elsewhere in this prospectus for additional information regarding income taxes.

Capital Expenditures

Since we do not own any of our facilities, our capital expenditure requirements primarily relate to the purchase of computers, business systems, furniture and leasehold improvements to support our operations. Direct costs billed to clients are not treated as capital expenses. Our capital expenditures for the year ended December 31, 2016 were $10.2 million, and the majority of such capital expenditures related to facilities infrastructure, equipment and IT. Expenditures for facilities infrastructure and equipment are generally incurred to support new and existing programs across our business. We also incur capital expenditures to support programs and general enterprise IT infrastructure.

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Commitments and Contingencies

We are subject to certain claims and assessments that arise in the ordinary course of business. We record a liability when we believe that it is both probable that a loss has been incurred and the amount can be reasonably estimated. Management judgment is required to determine the outcome and the estimated amount of a loss related to such matters. Management believes that there are no claims or assessments outstanding which would materially affect our consolidated results of operations or our financial position.

Recent Accounting Pronouncements

See the information set forth in "Note 2 — Significant Accounting Policies" in the notes to our consolidated financial statements included elsewhere in this prospectus.

Internal Control Over Financial Reporting

Material adjustments were identified and recorded in the financial statements for the years ended December 31, 2012 through December 31, 2015. During those periods we did not retain a sufficient complement of personnel possessing the appropriate accounting knowledge and experience, which resulted in incorrect conclusions in the application of GAAP associated with non-recurring or unique transactions involving a high level of complexity, subjectivity and judgment. This material weakness contributed to additional material weaknesses in which, specifically, (1) we did not design and maintain effective internal control over the accounting for business combinations including certain post-acquisition activities (including the assessment of appropriate reporting units) and (2) we did not maintain effective controls over the period-end financial reporting process, specifically controls over the review by individuals with the appropriate accounting knowledge of certain significant account reconciliations that analyzed the accounting for business combinations and certain post-acquisition activities and the review of the consolidated financial statements.

These material weaknesses resulted in adjustments to our consolidated financial statements for the years ended December 31, 2014 and 2015 related to the accounting for:

•: an indemnification settlement in connection with the Company's divestiture from Lockheed Martin Corporation ("Lockheed Martin");
•: a contingent consideration liability related to our acquisition of QNA SSG; and
•: certain lease abandonment liabilities.

(See also "Risk Factors—Risks Related to this Offering and Ownership of Our Common Stock—We have identified material weaknesses in our internal control over financial reporting. If we do not adequately remediate these material weaknesses, or if we experience additional material weaknesses in the future or otherwise fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, or comply with the accounting and reporting requirements applicable to public companies ,which may adversely affect investor confidence in us and, as a result, the value of our common stock.")

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We have implemented and are still in the process of implementing measures designed to improve our internal control over financial reporting and remediate our material weaknesses, including:

•: the augmentation of our accounting staff, including the appointment of a new Corporate Controller and Chief Accounting Officer in January 2016 and several key accounting resources who possess the appropriate accounting knowledge and experience and who will also implement and maintain effective controls over the period-end financial reporting process; and
•: the commissioning of a third-party specialist to provide support in our analysis of the accounting for complex non-recurring transactions and also to assist us in formalizing the documentation of our accounting policies and internal controls and to provide recommendations for improvements.

In addition to the above, during the year ending December 31, 2017 we will continue to evaluate whether we have a sufficient number of appropriately trained and experienced technical accounting personnel and will add new personnel as we deem necessary. We have also made significant investments to develop training programs. We have begun an enterprise-wide risk assessment whereby risks throughout the organization will be identified, assessed and prioritized. This enterprise-wide risk assessment will be periodically updated and leveraged as an ongoing mechanism to manage the broad set of risks that the Company faces. We will leverage the results of this enterprise-wide risk assessment as input for the determination of future initiatives and to tailor our future activities around the implementation, assessment and monitoring of internal controls.

As a public company, we are required to devote significant resources to comply with the Sarbanes-Oxley Act. One key aspect of the Sarbanes-Oxley Act is that we must perform system and process evaluation and testing of our internal control over financial reporting to allow management and our independent registered public accounting firm to report on the effectiveness of our internal control over financial reporting, as required by Section 404 of the Sarbanes-Oxley Act, with attestation from our independent registered public accounting firm on the effectiveness of our internal controls, beginning with our annual report on Form 10-K for the year ending December 31, 2018.

Critical Accounting Estimates and Policies

The preparation of our financial statements in accordance with GAAP requires management to make use of certain estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingencies at the date of the financial statements as well as the reported amounts of revenue and expenses during the reporting period. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could differ from those estimates.

In "Note 2 — Significant Accounting Policies" in the notes to our consolidated financial statements included elsewhere in this prospectus, we include a discussion of the significant accounting policies used in the preparation of our consolidated financial statements. We believe that the following items are the most critical accounting policies and estimates that involved significant judgment as we prepared our financial statements. We consider an accounting policy or estimate to be critical if the policy or estimate requires assumptions to be made that were uncertain at the time they were made and if changes in these assumptions could have a material impact on our financial condition or results of operations.

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Revenue Recognition

Substantially all of our revenue is derived from contracts to provide professional services to the U.S. Government and its agencies.

Revenue on cost-reimbursable contracts is recognized as services are performed, generally based on the allowable costs incurred during the period plus any recognizable earned fee. The Company considers fixed fees under cost-reimbursable contracts to be earned in proportion to the allowable costs incurred in performance of the contract. For cost-reimbursable contracts that include performance-based fee incentives, which are principally award fee arrangements, the Company recognizes income when such fees are probable and estimable. Estimates of the total fee to be earned are made based on contract provisions, prior experience with similar contracts or customers and management's evaluation of the performance on such contracts. Contract costs, including indirect expenses, are subject to audit by the DCAA and, accordingly, are subject to possible cost disallowances.

For time-and-materials contracts, revenue is recognized at the contractual hourly rates for the hours performed during the period. For fixed-price contracts, revenue is recognized on a proportional performance method. Estimating the proportional performance on a contract requires management judgment. Management bases its estimates on the scope of the work being performed, our historical experience performing similar work and the risks and uncertainties surrounding that work. These estimates are adjusted throughout the performance of the contract as work is completed. Historically, our actual results have not differed materially from our estimates and we do not believe it is reasonably likely that the estimates and related assumptions will change materially in the foreseeable future. We consider the principal versus agent accounting guidance to determine if revenue should be recognized gross or net of the associated costs. Applying the principal versus agent accounting guidance is a matter of judgment based on the consideration of several factors and indicators.

Business Combinations, Goodwill and Intangible Impairment

The accounting for the Company's business combinations consists of allocating the purchase price to tangible and intangible assets acquired and liabilities assumed based on their fair values, with the excess recorded as goodwill. Certain fair value measurements include inputs that are unobservable, requiring management to make judgments and estimates that can be affected by contract performance and other factors over time, which may cause final amounts to differ materially from original estimates. We have up to one year from the acquisition date to use additional information obtained to adjust the fair value of the acquired assets and liabilities, which may result in changes to the recorded values with an offsetting adjustment to goodwill.

Goodwill and intangible assets are generally acquired in conjunction with a business combination using the acquisition method of accounting. The acquisition method requires that the total purchase price of the acquired entity be allocated to the assets acquired and liabilities assumed based on their fair values at the acquisition date. Assets acquired include intangible assets such as customer relationships, trade names and contractual rights, and liabilities assumed include contractual commitments and contingencies. Any premium paid over the fair value of the net assets and liabilities acquired is recorded as goodwill. Determining the fair value of the assets and liabilities acquired involves significant estimates and judgments by management. Management typically engages a third-party valuation specialist to assist in the identification and valuation of these assets and liabilities. Valuing the assets and liabilities of a business generally involves the use of the market approach, income approach and cost approach.

Finite-lived intangible assets such as customer relationships assets and developed technology are amortized over their estimated useful lives, which represents the period of expected economic

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benefit, generally on a straight-line basis for periods ranging from seven to ten years. Estimating the useful life of finite-lived intangible assets requires management judgment. Management bases its judgment on historical experience and the assumptions and inputs used in initially valuing the assets. Assumptions and inputs used in determining customer relationships and trade name values include estimating future cash flows, profitability, discount rates and customer attrition rates. The useful life of developed technology is based on management's estimates of market trends. Finite-lived intangible assets are reviewed for impairment or obsolescence whenever events or circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of intangible assets is measured by comparing the carrying amount of the asset to the future undiscounted net cash flows expected to be generated by that asset. If the asset is considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the asset exceeds the estimated fair value. No impairment of finite-lived intangible assets was recognized for any of the periods presented.

We test goodwill for impairment at least annually on October 31. The impairment assessment considers qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. In performing this qualitative assessment, we assess relevant events and circumstances that may impact the fair value and the carrying amount of each reporting unit. Factors that are considered include, but are not limited to, the following: (1) macroeconomic conditions; (2) industry and market conditions; (3) overall financial performance and expected financial performance; (4) other entity specific events, such as changes in management or key personnel; and (5) events affecting our reporting units, such as a change in the composition of net assets or any expected dispositions.

If after assessing the qualitative factors, we determine that it is more likely than not that the fair value of a reporting unit is less than its carrying value, then we perform a two-step impairment test. The first step compares the fair value of a reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, the second step compares the implied fair value of the reporting unit goodwill with the carrying amount of that goodwill to determine the amount of impairment loss. The fair value of a reporting unit is determined by using a combination of the discounted cash flow approach and the market approach. The significant estimates and assumptions utilized in the fair value estimate include revenue and margin projections, working capital requirements, capital expenditures, terminal growth rates, discount rates and the selection of peer company multiples.

Similar to goodwill, indefinite-lived-intangible assets other than goodwill are assessed annually on October 31, or more frequently if necessary, for impairment. The impairment assessment first considers qualitative factors to determine whether events and circumstances indicate that it is more likely than not that an indefinite-lived intangible asset is impaired, including, but not limited to, the following: (1) the performance of the underlying business related to each trade name, (2) the use of the trade names to market to customers and transact with vendors and (3) the expectation that the trade names will continue to be used going forward. If after assessing the qualitative factors, we determine that it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value, then we will write-down the value of the intangible asset to its fair value. The fair value of an indefinite-lived intangible asset is determined using the relief from royalty method. The significant estimates and assumptions utilized in the fair value estimates include revenue projections, the royalty rate and the weighted average cost of capital.

Share-Based Compensation

We recognize share-based compensation expense in accordance with the provisions of ASC Topic 718, Compensation — Stock Compensation ("ASC Topic 718"). We measure and recognize share-based compensation expense for all share-based awards made to employees and

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directors using fair value methods over the requisite service period. The awards are re-measured each reporting period with the resulting increase or decrease to compensation expense and liability based on the pro rata portion of the fair value on the balance sheet date. The fair value of our liability awards is determined based on an external valuation prepared contemporaneously and approved by management and reviewed by the Board.

Critical inputs into the option-pricing model include: projected financial information; terminal value; discount rate; total equity value; "break points" at which various share classes begin participating; time to liquidity; volatility; risk-free interest rate; and discounts or adjustments made to fair value indications to reflect the rights of the holder.

Equity Investments

Investments in joint ventures where the Company has a non-controlling ownership interest representing not more than 50% and over which the Company has the ability to exercise significant influence, are accounted for under the equity method of accounting whereby the Company recognizes its proportionate share of the entities' net income or loss and does not consolidate the entities' assets and liabilities.

Equity investments in entities over which the Company does not have the ability to exercise significant influence and whose securities do not have a readily determinable fair value are carried at cost.

The Company accounts for its share of earnings or losses using the equity method of accounting whereby the Company recognizes its share of earnings or losses of the joint venture in the periods for which they are reported by the joint venture in its financial statements.

The Company applies the cumulative earnings approach and classifies cash inflows and outflows as operating activities unless the Company's cumulative distributions exceed cumulative equity in earnings recognized by the Company (as adjusted for amortization of basis differences). When such an excess occurs, the current-period distribution up to this excess is considered a return of investment and is classified as cash inflows from investing activities.

Accounting for Income Taxes

Deferred taxes are calculated using the liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards, and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The assessment of future realization of deferred tax assets requires management judgment. Based on management's forecast of future operations, a valuation allowance has been recorded against a significant portion of our deferred tax assets as it is more likely than not that the tax benefit will not be realized. Deferred tax assets and liabilities are presented based on the tax rates currently in effect and adjusted for changes in tax laws and rates on the date of enactment.

We evaluate our tax positions under a more-likely-than-not recognition threshold and measurement analysis before they can be recognized for financial statement reporting. Identifying and evaluating the likely outcome of tax positions requires management judgment. Uncertain tax positions have been classified as current or noncurrent income tax liabilities based on the expectation of whether they will be paid in the next 12 months. Our policy for interest and penalties related to income tax exposure is to recognize interest and penalties as a component of the income taxes on continuing operations in our consolidated statements of operations.

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BUSINESS

Overview

Our Mission, Vision, and Values

Vencore's mission is to deliver high-impact, analytical, and technical expertise to solve our customers' most complex and challenging problems. We seek to be a leader in the design, development, integration, and operation of complex, mission-critical information solutions across the U.S. Government. Our core values include accountability to ourselves and our customers, dedication to our customers' success, emphasis on continuous improvement, and a commitment to upholding the highest standards of integrity.

Our Company

Vencore is a leading provider of mission-critical, innovation-driven services and solutions to U.S. Government customers. The foundation of our business is the application of SE&I, cybersecurity, big data analytics and applied research on an enterprise-wide scale to assist our U.S. Government customers in solving their most complex information-related challenges. We are a leader in the architecture and integration of highly-engineered, mission-critical information solutions across the U.S. Government, and provide enterprise-level support to multiple governmental programs that manage, collect, analyze and disseminate critical mission data to national security agencies and their customers. We maintain industry-leading expertise in providing comprehensive solutions throughout the life of multi-billion dollar systems that support the core missions of the Intelligence Community and other U.S. Government agency customers. Our services and solutions span the entire lifecycle of programs, encompassing system(s) definition, architecture, agile solutions development, test and integration, deployment, and operations.

For more than 40 years, Vencore has provided vital and differentiated engineering and integration services and solutions that allow the Intelligence Community, DoD, DHS, NASA and other federal and civilian agencies to assess and solve increasingly complex challenges and threats. We apply our cyber, analytical and engineering expertise to anticipate, identify and resolve our customers' most demanding information-related challenges, including the effective management and integration of large and complex government systems, the efficient collection and analysis of large quantities of critical data, the migration of applications and data to the cloud and the implementation of effective cybersecurity measures to successfully detect, prevent and mitigate cyber-attacks.

Our expertise has broad applications across our customer base and places us at the core of our customers' missions. Notable examples of our services and solutions include:

•: We have supported the U.S. national space system, including space-based intelligence platforms, as a SE&I prime contractor for over 40 years.
•: We are a prime contractor for the U.S. Navy's Tomahawk program, responsible for developing and maintaining mission-critical software deployed across multiple shore and shipboard installations to ensure successful Tomahawk missions.
•: We are the prime SE&I contractor responsible for architecting and securing both the federal civilian government (.GOV) and DoD military (.MIL) IT infrastructures from advanced cyber threats for the DHS and DoD.
•: We are developing technologies for DARPA and commercial customers for the detection of and response to cyberattacks on critical U.S. infrastructure, including the North American power grid, and distributed denial of service attacks enabled by increasingly prolific Internet-of-Things devices.

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•: We lead agile software development and modernization for the DHS's USCIS benefits portfolio, which processes approximately 24,000 immigration benefit applications each day.
•: We provide center-wide engineering and technical services support for NASA's Kennedy Space Center on the nation's human spaceflight program, including software design and development for the Spaceport Command and Control System.

•: Systems Engineering and Integration. Government systems are often extremely large in scale, have high technical complexity and rely upon disparate information management systems that lack interoperability. Managing these complexities is challenging and often drives the government customer to engage a private contractor to create a fully-integrated enterprise. Vencore provides customers with broad domain expertise to architect solutions to ensure full enterprise integration and interoperability. We provide these services throughout the project lifecycle to ensure ongoing reliability and efficient management of these systems. These capabilities enable our customers to combine a variety of disparate systems into one cohesive and reliable enterprise. Our experience includes the successful design, architecting and operation of the most complex systems-of-systems supporting the defense market and Intelligence Community. Our principal SE&I capabilities include systems engineering, enterprise architecture, program management, software engineering and cloud engineering. We also deliver test and evaluation capabilities used to assess systems before deployment; independent verification and validation capabilities used to verify new systems operate as specified; and modeling, simulation and analysis capabilities, which complement our SE&I expertise by predicting systems performance and effectiveness at completing mission requirements.
•: Cybersecurity. Our cybersecurity capabilities include solutions for the protection against, and response to, cyber threats. Vencore's proven offerings in cybersecurity systems architecture, engineering and operations ensure that our customers apply effective cybersecurity processes, take the correct preventative measures to eliminate or reduce the potential success of an attack, and have the tools in place to quickly respond to a cyber-attack. Our solutions focus primarily on critical infrastructure protection, computer network defense, computer network exploitation and cyber risk management, which have broad governmental and commercial applications. We have developed cutting-edge solutions, such as our real-time Z-Day behavior-based malware detection tool, which focuses on previously unknown software weaknesses, known as "zero-day" vulnerabilities. These solutions proactively identify, assess and mitigate cyber vulnerabilities to protect our customers' critical missions.
•: Big Data Analytics. Vencore has a 45-year legacy of empowering government and commercial customers to make intelligent decisions through our analytical solutions and expertise. We apply deep data analytics methodologies, beyond traditional statistics or data mining, by combining state-of-the-art analytical processes, cutting-edge algorithms and scalable machine learning techniques to extract maximum value and intelligence from large amounts of structured and unstructured data. We deploy our big data analytics solutions across a variety of customers and missions, including the support of counterintelligence threat analysis, precision communications analysis to develop insights into adversary communications and enterprise logistics management to predict and provision fleet

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management systems. Our capabilities also include web-deployable, customizable visualization tools to provide deeper insight into analytic results and facilitate sharing of information across an enterprise. Together, these solutions allow our customers to uncover trends and produce actionable information to support and justify critical decisions. Vencore's proprietary analytics solutions recommend areas of optimization, including cost savings, forecast outcomes, mitigate risks and provide insights that protect or advance our customers' missions.

•: Applied Research. Our team at Vencore Labs, a research center within Vencore, is the driving force behind our applied research. The innovative research performed at Vencore Labs is largely funded by our customers and augmented by internal R&D. Vencore Labs provides us with a key competitive advantage when competing for contracts across all of our markets and allows us to continuously deliver cutting-edge solutions to our customers. Vencore's research encompasses critical technologies across a broad range of high growth technological fields such as cybersecurity, optical networking, mobility solutions, wireless communications systems and information analytics. Unlike basic research, which simply drives toward a greater understanding of a particular topic without any specific applications, our applied research activities focus on developing near-term technologies and solutions to address recognized and specific needs of our customers.

Our focus on critical technology disciplines and innovation has resulted in over 260 issued patents and pending patent applications, owned or licensed by us. The patents and patent applications we license are subject to a licensing agreement pursuant to which we own royalty-free, fully paid-up, worldwide, irrevocable licenses to certain patents that we use in the operation of our business that were retained by the seller in connection with our acquisition of Vencore Labs. Aside from patents and patent applications, we also maintain a rich portfolio of other IP derived from customer investments in our programs and augmented by our own internal R&D initiatives. We derived approximately $70.9 million of customer investment from our Vencore Labs programs for the year ended December 31, 2016. We leverage our extensive IP portfolio to drive growth across our existing programs, win new business opportunities with new and existing customers and actively pursue commercialization opportunities. The tools we develop are often directly applicable to our core business and we actively seek opportunities to apply these solutions across our portfolio. For example, we are partnered with the DoD to apply our proprietary behavior-based malware detection software to defend a critical missile program from cyber-attacks.

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federal government agency customers. These core skills and relationships are depicted in the figure below.

The primary market for our services is the U.S. Government, which represents an approximate $120.0 billion annual market opportunity across the Intelligence Community, DoD, DHS, NASA and other federal civilian agencies. Owing to our extensive history as a leading SE&I contractor for the Intelligence Community, we have successfully applied our differentiated solutions to establish crucial positions at important adjacent customers, including the DoD, DHS, GSA, NOAA and other federal agencies. Today, we define our core markets as intelligence, defense, space, federal civilian agencies, and the commercial market. Our core government markets remain well funded by the U.S. federal budget and we believe our capabilities are directly aligned with high growth areas of the federal government budget. We believe our suite of services and solutions positions us to benefit from the U.S. Government's increased focus on technological and intelligence-based innovation in recent years.

Our primary customers include key intelligence, defense, space and federal civilian agencies, such as the NSA, NRO, NGA, ODNI, DISA, the Departments of the Navy, Army and Air Force, DARPA, FAA, DHS, NASA, DoJ, GSA and classified intelligence customers, among others.

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contracts. Under our cost-reimbursable contracts, we are paid for all of our allowed expenses up to a set limit plus additional payment to allow for a profit, which allows for protection against potential losses. Under our time-and-materials contracts, we are reimbursed for the hours worked using the predetermined hourly rates for each labor category and are typically reimbursed for other direct contract costs and expenses at cost, which provides some protection against potential losses and the ability to achieve higher profit margins than our cost-reimbursable contracts. Our fixed-price contracts do not allow for adjustments upward or downward based upon costs, which presents risk of potential losses due to higher than expected costs but at the same time provides higher profit margin opportunities as compared to our cost-reimbursable contracts and our time-and-materials contracts.

As of December 31, 2016, we have approximately 330,400 square feet of customer-accredited Sensitive Compartmented Information Facility space with classified IT infrastructure and communications capabilities used to perform classified work for the Intelligence Community. These facilities are often required by our customers to compete for and service their contracts. Sensitive Compartmented Information Facility spaces are highly-specialized, require unique design and engineering, and are difficult and expensive to construct. We believe our existing technology infrastructure and Sensitive Compartmented Information Facility square footage, much of which is located near customer facilities, are important competitive advantages during the procurement process.

For the year ended December 31, 2016, we generated revenues of $1.2 billion. Our industry-leading re-compete and new business award rates, significant prime contractor mix, $2.5 billion backlog and $8.5 billion qualified pipeline provide us with significant revenue and earnings visibility. We use the term "qualified pipeline" to represent the aggregate opportunities that have been formally entered into our new business capture process and that have successfully completed comprehensive reviews with business leadership focused on requirements alignment to Vencore's capabilities, availability of customer funding, defined customer acquisition strategy and timeline, and an approved Vencore win strategy.

Revenue Breakdown for the Year Ended December 31, 2016


By Role	By Contract Type	By Market

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Our History

Vencore is a purpose-built intelligence and government services platform created through the combination of three highly complementary businesses, which today form the foundation of our capabilities, expertise, and longstanding customer relationships. We trace our roots back to General Electric Company's aerospace division, which in 1972 established The SI, Vencore OpCo's predecessor entity, in response to a request from the NRO for world-class SE&I expertise to help create a comprehensive, space-based national intelligence system. The SI continued to develop and expand its capabilities and customer base throughout the 1970s and 1980s, until the business was acquired by Lockheed Martin's predecessor, the Martin Marietta Corporation, in the early 1990s. Following the acquisition, the Company expanded its core capabilities and service offerings to include highly-classified, mission-critical capabilities for multiple intelligence agencies, including the Defense Mapping Agency, a predecessor organization to the NGA, and the NSA, and developed a reputation as a leading systems integrator delivering solutions to solve complex challenges.

In 2010, Lockheed Martin divested The SI as a result of changing government procurement rules, including significant constraints due to organizational conflict of interest concerns related to the SE&I work performed by The SI and work performed by other business units within Lockheed Martin. Veritas Capital acquired The SI from Lockheed Martin with the goal of creating a leading SE&I platform for the broader federal government market. The acquisition of The SI provided Veritas Capital with a unique opportunity to acquire a platform asset with a highly trained workforce, distinctive mission expertise and tools, and unique exposure to growing markets with increasingly complex dynamics.

In 2013, we acquired Applied Communication Sciences ("ACS"), Vencore Lab's predecessor entity, which traces its roots back to AT&T Bell Labs, a renowned research and development leader with a rich history of developing pioneering contributions in numerous foundational cyber and telecommunications technology fields. ACS was a leading provider of applied, largely customer-funded research and technology solutions to the U.S. defense and intelligence agencies, civil government organizations, and a variety of commercial customers. The acquisition of ACS expanded our technical and operational expertise and capabilities across a broad spectrum of rapidly-growing critical and emerging technologies, including wireless and mobile networking, cybersecurity, and big data analytics. The ACS acquisition was highly synergistic, and allowed us to leverage ACS' highly sophisticated technology across our existing customers and adjacent customer pursuits. Through this acquisition, we also acquired or expanded our relationship with customers such as DARPA, IARPA, and other DoD and R&D organizations while broadening our partnerships with leading universities and key professional communities.

In 2014, we acquired QNA SSG, which further enhanced our capabilities and addressable market. QNA SSG was a leading provider of differentiated, highly-engineered technical solutions to the U.S. Government, with a diversified customer base and incumbent positions on key contracts. The QNA SSG acquisition doubled the size of our core business, greatly expanded our addressable market, delivered significant synergies, and enhanced our competitive position by adding long-standing contracts with the DoD, DHS, NASA, GSA, and other federal civilian agencies. The acquisition also expanded our strategic mission and technological capabilities, most notably agile software development for mission-critical systems, classified and commercial launch support, spacecraft engineering, and enterprise IT.

Following the acquisition of QNA SSG, we rebranded the organization as Vencore and reorganized the combined business to more efficiently and effectively address our target markets and serve our customers. Today, we believe we maintain a prime position on nearly every major ID/IQ and government-wide acquisition contract ("GWAC") contract vehicle relevant to our business

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across the U.S. Government. We see an attractive opportunity to increase our volume of new bid activity as federal procurement spending continues to trend toward ID/IQ and GWAC contract vehicles over time. We remain well-positioned on our existing contracts, and believe we are uniquely positioned to continue to pursue and win new contract opportunities across all of our target end markets.

The below graphic depicts the transformation of our business since the acquisition by Veritas Capital.

Our Services and Solutions

We organize our capabilities across three primary types of services and solutions: SE&I, cybersecurity and big data analytics. We also perform customer-directed applied research, which serves as the research and development engine of our business, driving innovation and producing cutting-edge solutions that may be applied across all of our end markets and customers.

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Our core services, key capabilities, and areas of expertise are described below:

Systems Engineering and Integration

Government systems are often very large and complex, and frequently rely on a network of disparate sub-systems. Managing these complexities is challenging and often drives the government customer to engage a private contractor to create a fully-integrated enterprise. Vencore provides customers with broad domain expertise to architect solutions to ensure full enterprise integration and interoperability. We provide these services throughout the project lifecycle to ensure ongoing reliability and efficient management of these systems. These capabilities enable our customers to combine a variety of disparate IT systems and sub-systems into one cohesive and reliable enterprise. As an example, Vencore has several contracts with customers across the Intelligence Community who contribute to the creation of the common Intelligence Community IT enterprise. We are applying our SE&I capabilities across the major elements of Intelligence Community IT enterprise to achieve Intelligence Community cost efficiencies, enable data sharing and maximize discovery of joint intelligence to prevent future threats to our national security and commercial infrastructure.

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Our SE&I services also include IT and cloud engineering, software engineering development and agile software development capabilities. Our IT and cloud engineering capabilities include IT infrastructure design and development, cloud engineering and transition, network engineering and analysis and system performance forecasting. We offer a full suite of software solutions, which we apply on major programs including the U.S. Navy's Tomahawk program, multiple programs supporting GSA's Public Building Service and our Enterprise Services Contract supporting NASA. We additionally develop and field operational mission software for the U.S. Air Force to support the detection, location and classification of nuclear detonations anywhere in the world (e.g. China, North Korea, Pakistan and India) to include below ground, in water, surface blasts, free-air and space.

In partnership with our customers, we have further extended our SE&I practices to address the shift from traditional software and systems development to agile methods. Agile software development focuses on breaking product development work into small increments that minimize the amount of up-front planning and design, increase the frequency of testing and deliver functional capability early and continuously. Traditional methods are limited in comparison, relying on fully specified systems that often take years to develop and require meticulous and extensive planning. Our agile engineering practices are modeled on successful commercial practices, such as early and continual user involvement, shorter capability delivery times and continuous capability improvements. Our ability to progressively design, test and apply solutions to emergent problems, in close collaboration with customer teams, results in effective, affordable and timely solutions.

We believe we are a leader in enterprise-scale agile solutions, notably agile software development and agile SE&I capabilities. Our agile capabilities support the key enterprise digital services transformation initiatives and position us to continue to provide solutions to our customers as they move towards agile development to drive efficiency. Our DHS USCIS JETS program includes agile software application modernization, testing, operational deployment, operations and maintenance of the USCIS Benefits Portfolio, which processes 24,000 immigration benefit applications per day. As prime contractor, we manage multiple modern agile teams in a team-based agile environment, applying our "agile with continuous delivery" blueprint adapted from commercial industry to increase capabilities and enable new immigration services. Our agile teams deliver value frequently, cost-effectively, responsively and with high quality.

Unlike the more commoditized Systems Engineering and Technical Assistance ("SETA") services that many U.S. Government contractors provide, our SE&I capabilities focus on defining and developing end-to-end systems which rely on significant engineering content and technological expertise across the entire program lifecycle. Our SE&I work involves architecting and integrating complex systems, software and infrastructure on an enterprise-wide basis. This differs from many SETA services, which typically focus only on individual tasks or fragments of programs aligned with individual government staff, and are often managed on an hourly basis rather than towards a broader mission outcome. SETA work is limited in scope and does not require the architecting of solutions that span the full breadth of the customer's enterprise. In contrast, our SE&I work typically includes responsibility for architecting, defining and engineering end-to-end systems based on operational needs and is focused on solutions-based outcomes, rather than individual tasks. As a result, we typically serve as the prime contractor on our SE&I programs.

The below schematic portrays the work Vencore performs for a typical SE&I contract. Due to the classified nature of the work performed for the Intelligence Community, this depiction is not tied to one specific contract but rather is an aggregation of the work Vencore performs across multiple Intelligence Community programs. The diagram does however provide a realistic illustration of the requests for, and provision of, intelligence data from the point of collection (satellites and other platforms), to the ground stations and other ground elements, to the Intelligence Community networks and then to users of such data. We refer to the scale of our SE&I services as

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enterprise-wide, which means that it covers the breadth of major components of the intelligence chain and data, i.e. from point of collection to end user, rather than covering only one location along the chain. This process flow and the hardware, software and people that enable it, is what we refer to as the system, or more accurately system-of-systems, as each component is also a complex information system on its own. As the SE&I prime contractor for such a system-of-systems as illustrated below, Vencore is the subject matter expert across the enterprise having often times been the architect of the initial design, as we were when we assisted in creating the space-based intelligence program for the NRO 40 years ago. This architecting of the overall system, including the component subsystems, to accomplish the mission of our government customer is a key aspect of systems engineering. However, we do not stop supporting our customer at the system definition and architecture phase, but rather continue to serve as the customer's consultant to support the selection of the best provider for each component of the overall system, oversee their progress in development, periodically test the performance of these components and then enable correct interoperability between these components to ensure the overall system operates as envisioned. This process of managing the development of individual components and then connecting them to effectively enable mission outcomes is what we refer to as integration. In the illustration below, our integration activities enable the connectivity between space and ground station components; ground station and computer network components; and computer networks and user interface components. Furthermore, we describe our SE&I services as full-lifecycle, meaning that following the deployment of the initial system, we often remain a consultant to our customers to monitor the mission performance of the overall enterprise, modernize or enhance system capabilities, and decommission obsolete components of the system.

The illustration below depicts a number of examples of SE&I activities that Vencore currently performs for our Intelligence Community customers.

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Additional examples of our SE&I expertise and contracts include:

•: Prime role for an Intelligence Community customer, providing a full range of agency-wide SE&I functions and directly supporting the customer's Threat Operations Center, responsible for discovering and countering sophisticated cyber threats.
•: Prime role on the NOAA System Engineering and Technical Services contract, providing systems engineering in support of NOAA's national environmental satellite, data and information service missions. We support procurement of new flight and ground systems, and the modification of existing systems needed to operate NOAA satellites and to collect, process, distribute and archive satellite data for the nation's federally-administered civilian environmental satellite program.
•: Prime SE&I lead for an Intelligence Community customer's ground enterprise to include a network of worldwide ground stations supporting the collection and analysis of intelligence information for multiple agencies.

Cybersecurity

Our cybersecurity capabilities include continuous network monitoring solutions which assess and monitor vulnerabilities at every critical point across an IT enterprise. Our capabilities include forensics and analysis to rapidly detect malware incidents, mitigate and eradicate threats and return impacted systems to operation. We also provide advanced research capabilities and agile solution development to deliver the tools required to respond to an increasingly complex cyber threat environment. We employ certified cyber experts who architect and reengineer customer systems to eliminate vulnerabilities and ensure system resiliency in the event of an attack. Our workforce is skilled in key cyber domains and certifications, and includes cyber software developers, vulnerability analysts, reverse engineers, malware / intrusion forensics analysts, policy experts and cyber systems engineers.

We were recently awarded a prime position on the Mission Support ID/IQ contract with a ceiling value of $460.0 million to provide cyber operations support and services to USCYBERCOM. We believe we were awarded this contract largely due to our cybersecurity expertise, deep familiarity with the USCYBERCOM mission, and applied research directly aligned to USCYBERCOM requirements. We were awarded the first task order on this contract in 2016, and we are responsible for a broad range of full spectrum cyber operations support activities to secure, operate and defend the DoD information network. We also conduct the planning and execution of offensive and defensive cyberspace operations mission in support of joint warfighters. Additional responsibilities include: identifying and integrating network defense requirements into programs and projects, conducting IT security assessments and forensic analysis, analyzing and performing reverse engineering of malware discovered in DoD intrusions and providing cyberspace training and exercise support. This important contract places Vencore at the forefront of the U.S. Government's cybersecurity mission.

On our cybersecurity prime contracts, we utilize our expertise and technologies in cyber domains to partner with our U.S. Government customers to protect the entire network as opposed to individual components. Our work on our larger cybersecurity prime contracts is similar to the SE&I prime contracts previously described. The "system" for our cybersecurity prime contracts

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consists of government information system environments. Furthermore, similar to the previous example of SE&I for the Intelligence Community, our cybersecurity prime contracts are also enterprise-wide in scale and full-lifecycle in scope. For example, we serve as the prime contractor for the DHS Network Security Deployment Support contract, where we lead the engineering efforts to protect the federal civilian government's network infrastructure (.GOV) from advanced cyber threats, vulnerabilities and countermeasures.

The schematic below depicts the government network infrastructure, including .GOV and .MIL, and the users who interact with it both on the government and civilian sides. Similar to an SE&I prime contract, Vencore is the cybersecurity subject matter expert across the entire enterprise, defining the overall cyber requirements and architecture for the network. Following the design phase, we continue to serve as the customer's consultant to support the selection of the best cyber defense software for each component of the network, often times implementing and customizing commercial off-the-shelf products and at times deploying our own proprietary cyber solutions. Throughout this implementation, we periodically test the cyber defenses and assess vulnerabilities, as well as enable interoperability of all cyber defense components to close any gaps that malware could exploit.

We continue to successfully apply our cyber expertise to drive new business across both new and existing customers. Recent highlights include:

•: Secured a five-year ID/IQ contract with a ceiling value of $135.0 million (including option years) with the U.S. Navy for cyber technology integration, cyberspace science, research and engineering support to the Space and Naval Warfare Command Systems Center.
•: Awarded multiple DARPA contracts totaling approximately $18.0 million, including option years, to deliver cyber defense research against distributed denial of service attacks. The goal of this program is to develop fundamentally new approaches and greater resilience to detect and defend against a broad range of distributed denial of service attacks that

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leverage the widespread and growing deployment of Internet-of-Things devices to overwhelm current defensive techniques.

•: Awarded multiple DARPA and commercial contracts to develop technologies for detecting and responding to cyberattacks on critical U.S. infrastructure, including early detection of cyber-attacks on the North American power grid and the ability to rapidly localize and characterize cyber-weapons that have gained access to power grid infrastructure. This new work draws on Vencore Labs' expertise transitioning cybersecurity research technology to commercial use, as well as the Company's experience working with utilities to secure their networks through our first-of-its-kind infrastructure monitoring solution, SecureSmart™.

Big Data Analytics

Our big data analytics capabilities rely on a multi-disciplinary approach including data, performance and intelligence analysis, precision communication analysis, system readiness analysis and training solutions. Working directly with raw data enables us to identify actionable information, make defensible assumptions and support critical decision-making. We utilize advanced modeling, along with data mining and simulation techniques, to analyze large amounts of data to detect trends and predict future events. Our Vencore Analytic Platform is composed of subject matter experts, proprietary tools and techniques managed to address specific customer needs. The platform is designed as a flexible environment that allows subject matter experts intervention and validation between key analytical steps, allowing the engineers to respond to a wide variety of analytical requests.

An example of our big data analytics solutions is our recently completed contract in which we adapted analytic capabilities and expertise from our core Intelligence Community programs to identify potential international treaty violations in a conflict area. We developed an analytic service to provide independent/unbiased observations of reported activities in the conflict area. We then harvested and overlayed social media feeds using our open source collection platform, which was then analyzed by our regional analysts / experts to validate and give greater context to the reports. Our integration of our social media analytics, relationships and data collection and our geospatial analytics using global commercially available overhead imagery provided the most comprehensive reporting available. Over a period of four months, Vencore collected hundreds of potential incidents that were corroborated using a variety of sources. Our analysis also identified instances of spoofing by our adversaries, resulting in more accurate reporting and intelligence. The quality of our reports and other deliverables enabled our customer to provide intelligence consumers with more timely, accurate and actionable intelligence information.

Vencore has earned impressive qualifications implementing analytics solutions with a variety of federal government customers, in all cases leading to significant cost savings and efficiencies. Notable examples of our big data analytics expertise and outcomes include:

•: Performed modeling, simulation, and performance analysis for a multi-billion dollar satellite system that experienced an on-orbit anomaly, recovering mission performance to 95% of pre-anomaly levels and extending satellite life by seven years.

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•: Determined storage needs across the geospatial intelligence enterprise through the year 2043, applying detailed modeling and analysis to forecast Intelligence, Surveillance & Reconnaissance ingest and storage across approximately 340 different data source types. Architecture and policy changes achieved an estimated cost avoidance of more than $360.0 million.
•: Working as a prime lead for the Quantitative Research Analytical Data Support program with the SEC's Division of Economic and Risk Analysis to incorporate advanced analytics into the monitoring and managing of trends and risks in capital and financial markets.

Applied Research

Our applied research capabilities build upon our culture of technology innovation to help customers reframe information and technology-related problems, define their options, and deliver transformative results. In contrast to basic or exploratory research, the technologies and processes developed through our applied research are principally focused on technologies with practical applications on the near-term horizon. Our solutions enable government agencies, utilities and commercial enterprises to develop and apply cutting-edge technologies in cybersecurity, wireless and optical communications, IT, mobility solutions and data analytics. We believe that these capabilities provide us with near-term revenue opportunities and a meaningful advantage when competing for new business.

We provide applied research, technical consulting and technology solutions to a diverse set of U.S. defense, space, federal civilian, Intelligence Community and commercial customers. We manage projects through the full research development process, from proof of concept to prototyping, and believe we are well regarded for our ability to work on large-scale problems requiring deep industry expertise.

Our applied research expertise covers a broad range of critical, enabling technologies. Notable examples include:

•: Wireless communications and technologies, including technologies to support the deployment of wireless communication in military environments, LTE/4G network planning and design, wireless spectrum requirements and management, smartphone security and secure wireless communications. For example, we are designing technologies to enable wireless communications links with fiber-optic-equivalent capacity and long reach that can propagate through clouds and provide high availability. The all-weather (cloud, rain, and fog) system is anticipated to provide a massive increase in communications capability, providing 100 gigabit per second capacity at ranges of 100 km or greater.
•: Data analytics, including fast, multi-scale mathematical techniques, systems for extracting actionable intelligence, machine learning, data exploration and transformation and advanced analytics, including using advanced analytics techniques to identify patients with rare, hard-to-diagnose diseases. For example, we are applying our deep experience in data modeling, text and data analytics and statistical programming to provide rigorous advanced data analytics, monitoring and consulting services to the SEC.
•: Cybersecurity and resiliency, including zero-day detection and malware elimination, insider threat detection, vulnerability and exploit assessment and analysis, network penetration testing, cloud migration, and smart grid technologies, including the application of cyber security technologies to protecting smart grid networks. For example, we are developing advanced cyber defense capabilities to detect and defend against a broad range of distributed denial of service attacks that leverage the widespread and growing deployment of Internet-of-Things devices that easily overwhelms current defensive techniques.

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Our applied research activities are driven by Vencore Labs, a research center within Vencore. Vencore Labs provides us with the ability to develop some of the world's most advanced technologies alongside our government and university partners and deploy these technologies not only into existing programs, but also in new applications and markets. The innovative research performed at Vencore Labs is largely customer-funded and augmented by our own internal R&D budget. The successful development of proprietary technologies for a particular customer or contract often can be leveraged across our portfolio to capture new contract and commercialization opportunities. We frequently partner with leading academic, industrial and government institutions, which provides us with unique access to specialized facilities and world-class talent.

Our Markets

We primarily serve the intelligence, defense, space, federal civilian and commercial markets. We define these markets primarily by the mission focus areas and funding sources of our end-customers.

Across the intelligence, defense, space and federal civilian markets, our primary customer in aggregate is the U.S. Government, which comprised substantially all of our revenue for the year ended December 31, 2016. The U.S. Government is the largest consumer of information and technology services in the United States, and the DoD is the largest consumer within the U.S. Government. We believe we are well-positioned to benefit from an improving outlook across each of our core markets. Since U.S. fiscal 2011, the U.S. Government has spent an average of approximately $77.0 billion annually on information and technology services and is expected to spend $81.6 billion in U.S. fiscal 2017, according to PSC Vision.

Intelligence

The U.S. intelligence market is typically defined as the 16 agencies that make up the Intelligence Community. These agencies are funded by NIP and MIP budgets. The U.S. fiscal 2017 budget request includes $54.9 billion for NIP and $18.5 billion for MIP, an aggregated of $73.4 billion, up from $70.7 billion in U.S. fiscal 2016.

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The complex, disparate nature of space-based and ground-based national security and intelligence platforms requires sophisticated architecting and integration support systems. As a result, these agencies frequently rely on contractors for full lifecycle SE&I and mission support. The Intelligence Community's prioritization of technological innovation places Vencore in alignment with key funding priorities. Our technical expertise in areas such as space protection, communications and network engineering, cloud engineering, space and satellite engineering, cyber threat analysis, vulnerability assessment and forensic analysis positions us well to continue meeting requirements for new technology engineering, testing and integration. Additionally, we are a leader in enterprise-scale SE&I and agile software development solutions supporting the Intelligence Community's key IT enterprise transformation initiatives.

We possess deep ties with many key Intelligence Community agencies, including the ODNI, NGA, IARPA, NSA and classified customers. Our largest individual intelligence customer is the NGA. We have over 30 years of experience supporting the NGA and possess deep domain knowledge of the NGA's over 600 mission systems.

For the year ended December 31, 2016, our contracts supporting Intelligence Community customers generated revenues of $460.7 million, or approximately 39.4% of our consolidated revenue. For the year ended December 31, 2014 and 2015, a classified contract represented approximately 11% and 10%, respectively of our consolidated revenue. There was no single contract within the intelligence market representing 10% or more of our consolidated revenue for the year ended December 31, 2016.

Defense

The challenges facing the United States are rapidly evolving and growing in complexity. The focus of U.S. defense spending continues to shift toward a more capabilities-based structure emphasizing improved flexibility and mobility, stronger space capabilities, enhanced missile defense and improved information systems capability. These shifts reflect the changing nature of the conflicts that the U.S. faces and highlight the need for the U.S. Government to develop its cyber, special operations and precision strike capabilities. The DoD's latest cyber strategy, released in April 2015, highlighted three primary missions: defend DoD networks, systems and information; defend the U.S. homeland and national interests against cyberattacks and their consequences; and provide cyber support to military operational and contingency planners. Meeting the requirements of the new strategic guidance entails increasing funding for key investments in the areas of cyber, information systems and technology.

We believe our capabilities in the defense market position us well to help the DoD implement this strategy. Our capabilities in the defense market center around supporting our defense customers in architecting and integrating large, complex and disparate systems into a cohesive and efficient enterprise. We provide industry-leading system architecting and engineering, software development, integration, and operational support for mission-critical enterprise solutions for our defense customers. Our solutions span a wide spectrum of innovative technologies, most notably software design and development for cloud and mobile; network engineering and optimization; cybersecurity system engineering and architecture; and modeling, simulation and training.

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We provide services to a variety of agencies within the DoD, with some of our customer relationships spanning more than 20 years. Our core DoD customers include the U.S. Navy, U.S. Army, U.S. Air Force, DISA and DARPA. Among our DoD clients, we are known for our exceptional systems engineering, software development and operational support for mission-critical agency-wide solutions.

We have an established and growing cyber practice as the prime contractor securing the .MIL domain, and we recently secured a USCYBERCOM prime contract and initial awarded task order for the provision of a full range of support activities for defensive and offensive cyberspace operations, joint operation planning and training solutions. We are a sole source, prime contractor for the U.S. Navy's Tomahawk program. We serve as a lead architect and software developer responsible for developing and maintaining mission-critical software across multiple shore and shipboard installations to ensure successful Tomahawk missions. Our work encompasses strike planning, execution, post-mission debrief and theater mission planning for the Tomahawk cruise missile.

For the year ended December 31, 2016, our contracts supporting defense clients generated revenues of $168.8 million, or approximately 14.5% of our consolidated revenue. Our largest DoD clients are the U.S. Navy and U.S. Army, which represented 6.3% and 5.7% of our consolidated revenue in 2016, respectively.

Space

Within the space market, we facilitate access to space, support manned and unmanned missions and provide improved space-enabled precision strike and remote sensing capabilities. Our space-related solutions offering centers around providing end-to-end SE&I and mission support services for space-based and ground-based national security and intelligence systems. Our expertise in the areas of full-lifecycle SE&I and systems architecture positions us well to benefit from the U.S. Government's increased budgetary focus on space exploration. Key capabilities include mission-facing SE&I and end-to-end enterprise architecture. In addition, we engineer both hardware, including satellites and ground support equipment, and software. We offer solutions that allow our customers to conduct pre-mortem analysis, including independent verification and validation and advanced modeling, simulation and analysis. Our technical domains include ground processing and equipment, launch support, command and control, safety and mission assurance, space vehicle engineering, satellite navigation and geolocation, and communications systems. In addition, we work with our customers to support geospatial and signals intelligence.

We have relationships with many of the largest space-related agencies within the U.S. Government, including the NOAA, the NRO, NASA and the Air Force Space and Missile Systems

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Center. Our largest space customer for the year ended December 31, 2016 was NASA, which we have supported for over 40 years.

We are entrusted by the space community to solve its most complex problems, which is evidenced by our role on numerous critical space contracts. We are the prime contractor on the total expected $1.3 billion Engineering Services Contract at NASA's Kennedy Space Center under which we provide center-wide engineering and technical services support on NASA's launch and human spaceflight system. Our Engineering Services Contract team designs and develops systems and equipment to be used for the pre-launch preparation of space launch vehicles, spacecraft, and payloads. We are also responsible for developing the Spaceport Command and Control System software. Additionally, we currently serve as the sole provider on the Evolved Expendable Launch Vehicle contract with the NRO. We provide the NRO with classified launch vehicle systems analysis and modeling as well as independent verification and validation for mission-critical systems. Furthermore, through our SETS contract with the NOAA, we also provide mission-critical support for the NOAA's satellites, including end-to-end system engineering for the United States' next generation weather satellites, ground system sustaining engineering, and systems analysis.

For the year ended December 31, 2016, our contracts supporting space clients generated revenues of $412.8 million, or approximately 35% of our consolidated revenue. Our largest space client is NASA, which represented 13.4% of our consolidated revenue for the year ended December 31, 2016. For the years ended December 31, 2015 and 2016, our Engineering Services Contract represented approximately 13% and 12%, respectively of our consolidated revenue. For the years ended December 31, 2014 and 2016, a classified contract represented approximately 11% and 10%, respectively of our consolidated revenue.

Federal Civilian

In the federal civilian market, demand for our services is driven by the budgets of our customers. Our largest federal civilian customer is the DHS. In U.S. fiscal 2016, the DHS had a $41.0 billion budget, of which approximately $6.0 billion was spent on IT, according to itdashboard.gov. The DHS budget for U.S. fiscal 2017 includes approximately $275.0 million to strengthen the operational security of federal .GOV networks. Additionally, the U.S. fiscal 2017 budget proposed approximately $471.0 million for the National Cybersecurity Protection System, commonly referred to as EINSTEIN, to prevent intrusions, enhance information sharing and improve analytical capabilities to secure the federal civilian IT enterprise. As the prime SE&I lead for the National Cybersecurity Protection System, Vencore is well-positioned to benefit as the DHS continues to focus on enhancing its cybersecurity capabilities.

For the year ended December 31, 2016, contracts supporting our federal civilian agency customers together generated revenues of $110.6 million, or approximately 9.5% of our

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consolidated revenue. Our largest federal civilian customer is the DHS, which represented 5.7% of our consolidated revenue for the year ended December 31, 2016.

Commercial

Corporations are increasingly focused on implementing comprehensive cybersecurity to protect trade secrets and other sensitive private information. According to the International Data Corporation, worldwide cybersecurity spending on software and services was approximately $74.0 billion in 2016. The International Data Corporation expects cybersecurity spending to increase by 8.3%, more than twice the rate of overall IT spending growth, per annum through 2020 driven by the increasing complexity and volume of cyber-attacks. We believe Vencore is well positioned to capture new revenue opportunities in commercial cybersecurity by leveraging our IP portfolio and commercial-ready products to help corporations identify and protect against cyber threats.

Our Z-Day solution, HVH and our SecureSmart™ solutions, highlight the potential significant commercialization opportunities for our solutions and IP in the commercial cyber domain. Z-Day is a family of solutions that can detect and isolate previously unknown cyber threats based purely on behavior patterns. Z-Day effectively defends against malicious network intrusions, enhancing customer security and reducing associated system downtime. While this technology was originally developed for a government application, we believe this solution is particularly relevant to the commercial market and exhibits our unique ability to generate incremental revenue by cascading technology from our government contracts and customers into commercial markets. Additionally, our joint venture with Havas, HVH, represents a key initiative and important milestone in our commercialization efforts. Approximately 30 million Americans live with a rare disease and go an average of 7.6 years before being diagnosed correctly. We apply proven analytical methods and advanced precision analytics techniques to very large patient datasets to perform precision patient targeting, patient recruitment for marketed drugs and clinical trials, identification of patient journey and demographics, therapeutic market analysis and payer analysis. Furthermore, our patented SecureSmart™ solution is an integrated cybersecurity, operations and engineering solution for smart grid systems. Our SecureSmart™ solution offers advanced cybersecurity monitoring, with 24x7 continuous intrusion detection and validation of security controls and customer privacy.

We are currently progressing on several other late-stage commercialization initiatives in areas such as network management, continuous cybersecurity monitoring of utility field networks and healthcare data analytics.

For the year ended December 31, 2016, contracts supporting our commercial customers together generated revenues of $15.1 million, or approximately 1.3% of our consolidated revenue.

Our Strengths

Systems Engineering and Integration Expertise with Large, Complex Programs for Defense and Intelligence Community Customers

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end-to-end engineering and technical solutions that are vital to the success of our customers' core missions. Our deep domain expertise provides us with the distinctive ability to architect and integrate multi-billion dollar systems supporting core national security requirements. Our set of processes and capabilities, along with our experienced and highly-qualified employee base, make us a valuable partner to our increasingly technologically-focused customers.

Vencore maintains leadership positions on a number of the Intelligence Community's largest and most complex programs. We are often the only provider with the capabilities and expertise to meet the specific requirements of these programs.

Unique Expertise in Cybersecurity and Data Analytics

We believe we are uniquely positioned to apply our expertise in cyber technologies and data analytics on an enterprise-wide basis to provide engineering-based solutions to support demanding customers throughout the Intelligence Community and U.S. Government agencies. We operate at the forefront of the cybersecurity industry and are renowned for our expertise in effectively preventing and responding to cyberattacks through advanced rapid attack and anomaly based detection methods. Our data analytics prowess relies on our advanced predictive analytics, cutting-edge algorithms and machine learning techniques, which together allow us to manage enormous volumes of unstructured data to uncover patterns and anomalies key to producing actionable intelligence.

We are well-positioned to benefit from increased U.S. Government budgetary focus on cybersecurity and data analytics. Cybersecurity remains an area of critical importance in the Intelligence Community and DoD, driven by increased reliance on connected devices and systems and the potential vulnerabilities to cyberattacks that they create. Vencore was recently awarded a prime position on a USCYBERCOM contract to provide cyber operations support and services largely due to our breadth of background and expertise in cybersecurity. This important contract award places Vencore at the forefront of the U.S. Government's cybersecurity mission.

Furthermore, U.S. Government funding for big data analytics is expected to increase as the volume of data being collected and generated by U.S. Government agencies increases and the use of cloud-based information systems and mobile technologies becomes more prevalent. We believe our industry-leading data analytics capabilities and strong customer relationships position us well with respect to this trend. In addition, the proliferation of wireless traffic and sensors, growth in mobile communication and the increased usage of predictive analytics will create new and attractive commercial opportunities, in which we believe we have a meaningful competitive advantage.

Prime Contractor Role on Majority of Contracts

For the year ended December 31, 2016, we served as prime contractor on 89% of our contracts as measured by revenue. As the prime contractor on the majority of our programs, we believe we are uniquely positioned to pursue additional growth on existing contracts and new business opportunities with our current customers. We also maintain a prime contractor position on a significant number of government- and agency-wide ID/IQ contracts and blanket purchase agreements. Our customers in the defense and federal civilian markets increasingly rely on ID/IQ and other multiple contract award vehicles to procure services. According to the United States Government Accountability Office, from 2011 to 2015 approximately one-third of all government contract obligations involved ID/IQ contract vehicles with annual obligations under these contracts totaling more than $130.0 billion during that period. Our prime role on ID/IQ contracts enables us to continue to expand our addressable market and drive growth through the capture of new task orders by utilizing our sophisticated enterprise capture experts and tools to source new contract opportunities.

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A vital component of our new contract capture process is our ID/IQ Operations Center, a low-cost, high-volume command center that sits within the Vencore Business Development Group and is designed to quickly identify and capture new task orders on existing ID/IQ vehicles. The ID/IQ Operations Center drives work to Vencore's ID/IQ vehicles by researching and identifying expiring competitor task orders on Vencore's major vehicles and developing teaming partners to improve outcomes. The ID/IQ Operations Center performs as the ID/IQ Subject Matter Expert for the Company and serves as a valuable resource for providing repeatable processes to successfully win task orders.

We have extensive experience managing ID/IQ contracts, from single agency-multiple award vehicles like our United States Air Force's NETCENTS 2 Application Services contract, to GWACs like our GSA Alliant contract. For the years ended December 31, 2015 and 2016, Vencore generated revenues of $227.6 million and $314.1 million, respectively, from ID/IQ contracts.

Robust IP Portfolio and Proven Reputation as a Technology Innovator

Vencore Labs serves as the innovation engine for our company and provides us with unique IP and technology development capabilities. These tools have been developed over decades of solving the most challenging problems for our customers. The innovative R&D conducted at Vencore Labs, much of which is funded by our customers, provides us with opportunities to further penetrate existing customers and pursue new business in adjacent markets. Additionally, we have an institutionalized process to drive innovation throughout our organization and commercialize select technologies and IP developed by the Company.

Depth and Breadth of Customer Relationships

As of December 31, 2016, we had 520 active contracts across 32 different customers and agencies and 434 distinct programs. We have longstanding relationships with our customers, with relationships with certain key customers spanning over 40 years. Notably, we have supported the NRO and NASA for over 40 years, the NGA for over 30 years, the NSA, U.S. Navy, U.S. Army and DARPA for over 20 years and the DHS for over 15 years.

Our People

Our employees are our most valuable and important asset. We have a world-class employee base marked by a highly-educated technical team and a large number of employees with security

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clearances. We believe the quality and credentials of our employees represent a key differentiating feature in the market for our services. As of December 31, 2016, approximately 69% of our employees held a Bachelor's degree and 38% held advanced degrees in a variety of technical disciplines, with many holding additional industry and/or technical certifications in key skill areas such as cybersecurity, agile software development, systems engineering, program management and lean six sigma. As of December 31, 2016, 73% of our employees held security clearances and 66% of our employees with security clearances held a Top Secret / Sensitive Compartmented Information-level clearance, which typically requires the completion of a polygraph. We maintain close relationships with key academic institutions globally, which allows us to identify and target leading minds in key fields of study relevant to our business.

We are led by an experienced team of senior leaders with a long history of supporting our nation's most demanding customers and critical missions. Our team places a heavy emphasis on business development, lean operations and delivering exceptional results, and has the ability and drive to execute on the company's strategic plans and goals. Our senior leadership has an average of over 20 years of experience in relevant industries or roles and are well regarded by our customers and partners.

Strong Business and Financial Profile

Our highly differentiated business model and unique capabilities are the foundation of our business and facilitate our strong financial performance. Specifically, our industry-leading re-compete and new business win rates of approximately 97% and 33%, respectively, since 2011, strong mix of prime contractor roles, and $2.5 billion backlog and $8.5 billion qualified pipeline as of December 31, 2016, have afforded us strong historical financial performance and provide us with meaningful revenue and earnings visibility as we look to the future. Aggressive working capital management, minimal capital requirements and a significant tax shield result in high free cash flow conversion. For the year ended December 31, 2016, we generated revenues of $1.2 billion, net income of $1.0 million.

Strategy for Growth

We plan to continue to pursue a number of strategies intended to drive revenue and earnings growth, including:

Increase Our Penetration with Existing Customers

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Our long-standing, entrenched relationships with our customers allow us to expand our footprint on existing programs and use our capabilities and relationships to exploit new growth opportunities offered by our existing customers. For the year ended December 31, 2016, we added $340.7 million in contract value to our current programs by expanding the suite of services performed for our existing customers. We believe that we can effectively continue to expand the scope of our work by delivering new solutions, such as cybersecurity and data analytics, to existing programs and customers.

We maintain a prime position on nearly every major ID/IQ contract vehicle across the U.S. Government relevant to our business. ID/IQ contracts are frequently a preferred method for government contracting, as it is easier and faster to place an order on an ID/IQ contract than to solicit and award a separate contract each time a need arises. By not needing to specify an exact quantity or timing of delivery at the time of contract award, program offices can accommodate unforeseen needs on an ongoing basis through issuance of orders. With an estimated 36% of federal IT spending procured via ID/IQ contract vehicles for U.S. fiscal 2015, the volume of our new bid activity should meaningfully increase over time. Our strategy proactively targets specific ID/IQ vehicles based on customer buying habits and our specific capabilities to make sure we have the right vehicle for the right customer for the right capability. Our ID/IQ Operations Center allows us to position ourselves to bid on task orders currently held by competitors and to proactively manage the response process for opportunistic or "pop up" task orders.

Many of our ID/IQ contract vehicles supporting existing customers have significant remaining funding available for new task order awards. As an example, Vencore's recent cyber ID/IQ contract wins supporting the U.S. Navy Space and Naval Warfare Command Systems Command and USCYBERCOM had approximately $477.8 million of cyber-focused contract ceiling space available for award as of December 31, 2016. GSA Alliant, which supports a variety of IT and cyber domains, had over $20.0 billion in contract ceiling available as of December 31, 2016. Our strategy focuses on boosting performance to capture available funding on these contracts by driving more work to the contract and bidding on more orders.

As of December 31, 2016, approximately 49% of our workforce was co-located with our customers, further integrating us into their day-to-day operations. With a historical re-compete win rate of approximately 97%, new business win rate of approximately 33%, as measured by contract value including option years, and average fee score of approximately 93%, as measured by the total fee earned from the total fee available, since 2011, we believe we are very well positioned to continue to pursue growth opportunities with existing customers. As of December 31, 2016, we identified approximately $0.9 billion of new business and additional growth opportunities with our existing customers.

Leverage Core Competencies to Target and Win Large Programs

The development and support of large, complex programs is the foundation upon which Vencore was built and remains central to our continued growth strategy, particularly in high-growth adjacent and underpenetrated markets in the federal civilian and DoD market. The Company's innovations in cybersecurity, data analytics and wireless communications technologies and our continuing focus on applied research are strongly aligned with areas of growing budgetary support. We focus on targeting and winning large and complex programs by leveraging our exceptional contract performance, proprietary technology-enabled solutions and large ID/IQ portfolio. Securing roles on complex programs allows us to establish franchise positions with new customers and places us at the core of our customers' missions. These contracts also afford us unique access to and knowledge of the customer, which make it difficult for our competitors to displace us.

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Our recent new contract awards demonstrate our ability to target and win large and complex programs. In the year ended December 31, 2016, we were awarded the USCYBERCOM Omnibus ID/IQ contract. Vencore was also awarded the first task order under this ID/IQ. We believe the key to our win was our inclusion of cyber innovations derived from our Vencore Labs applied research, which are directly relevant to the USCYBERCOM mission. In addition, in January 2017, we applied our strong competencies in SE&I and space engineering to displace an incumbent to win the single award NOAA System Engineering and Technical Services contract. Vencore will provide systems engineering solutions to support NOAA's National Environmental Satellite, Data and Information Service, which acquires and manages the nation's operational environmental satellites and operates NOAA's National Centers for Environmental Information.

Our strategy for continuous and sustainable growth leverages our cyber engineering capabilities from our DHS, U.S. Navy, U.S. Army and classified Intelligence Community customers to win large engineering and cyber opportunities in the Department of State, DoJ, U.S. Air Force, U.S. Army and classified customer markets. Our SE&I competencies in model-based systems engineering and agile software development align with the U.S. Government's investments in existing platforms to address obsolescence, integrate new systems, upgrade legacy systems, extend in-service lives, and improve operational performance. Our capabilities span the product life cycle, which allows us to develop new systems as well as modernize existing systems. We will apply these to pursue large program opportunities within NASA, the U.S. Air Force and the U.S. Navy.

As of March 31, 2017, our qualified pipeline included over $6.4 billion in opportunities that are each greater than $100.0 million, a 93.2% increase in large program opportunities as compared to the new business pipeline as of December 31, 2014. These large program opportunities are in current and adjacent markets and include the Department of State, Intelligence Community, NASA and the DHS' Federal Emergency Management Agency.

Vencore maintains a number of recognized, difficult-to-achieve appraisals and certifications under commercial and government standards that are frequently required to submit bids on large SE&I and development opportunities. These requirements are often a barrier for potential suppliers. We have successfully maintained a Capability Maturity Model Integration ("CMMI") Development Model 1.3 Maturity Level 3 or greater rating since 2006, with our most recent appraisal occurring in March 2017, to ensure our continued compliance. Our core certifications include International Organization for Standardization ("ISO") 9001:2015, Aerospace Industries AS 9100, CMMI Maturity Level 3, Information Technology Infrastructure Library Foundation Certification Training Provider and FedRAMP Third Party Assessment Organization.

Continue to Expand and Apply Our Suite of Intellectual Property and Technological Capabilities

Our broad suite of IP and technological capabilities are a core competitive advantage and vital to our growth strategy. As of December 31, 2016, Vencore's IP portfolio included more than 260 issued patents and pending patent applications, owned or licensed by us. These patents are based on institutional and product knowledge developed over decades, solving our customers' most challenging problems in key disciplines such as cybersecurity, advanced networking and analytics. Our proprietary tools and technologies further enhance our customer relationships and create meaningful barriers to entry, while also improving our competitive position on new contract pursuits through the offering of differentiated solutions. In particular, our capabilities and IP position us to capture the growing demand among government and commercial markets for information systems that are highly secure, scalable, reliable, interoperable and mobile. We apply these capabilities to achieve better mission outcomes, drive efficiencies and automation and address emerging threats.

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Key to our strategy is the further application of our differentiated cybersecurity and data analytics technology capabilities from our programs and applied research to win new work. The volume of data that is both collected and generated by U.S. Government agencies has increased exponentially in recent years. However, the capacity to harness and exploit this data to further the Government's mission has struggled to keep pace. Significant funding support exists for U.S. Government big data initiatives, which seek to advance the core technologies needed to collect, store, preserve, manage, analyze and share massive quantities of data. A government-wide focus on reducing costs, increasing transparency and improving results is driving investments in data analytics across all major agencies in the intelligence, defense, space and federal civilian markets. According to Gartner, in U.S. fiscal 2016, the U.S. Government spent approximately $45.0 billion on big data initiatives. This is expected to grow to $66.0 billion by 2020.

Focusing on cybersecurity, the U.S. Government is expected to provide rapidly growing budgetary support for cybersecurity given the increasing sophistication of threats and the U.S. Government's thirst for innovation in this space. In U.S. fiscal 2016, the U.S. Government spent approximately $117.0 billion on cybersecurity-related initiatives. This is expected to grow to $170.0 billion by 2020, representing a 9.8% CAGR. Our mature capabilities in computer network defense, security for wireless networks and smart devices, smart-grid security and cloud security position us to pursue major cyber programs in current and new markets, such as the Department of State.

Vencore Labs serves as a key differentiator for us in cybersecurity, data analytics and other technology domains, allowing us to develop customer-requested technologies and apply them across our other businesses. Driving applied technology into use in real-world situations is core to our heritage. The innovative IP development at Vencore Labs is funded by both customer (notably DARPA, the Intelligence Community and DoD Research Labs) and internal R&D budgets. For the year ended December 31, 2016, $70.9 million, or 98%, of our R&D spend was funded by our customers.

Pursue Opportunities to Commercialize and Monetize our IP Portfolio

For decades, we've been supporting our Intelligence Community customers and have been analyzing large data sets for anomalies. Recently, we have attempted to commercialize this technology through increasingly widely available public data sets. Our commercialization strategy, led by our Vencore Innovation Works initiative, is focused on application of our solutions to high-growth commercial adjacencies. We develop products and solutions for our core customers that can often be commercialized through a recurring license model, IP sale or joint venture. Our portfolio consists of unique and cutting-edge IP and solutions developed over decades of solving our customers' most challenging problems. We are currently pursuing numerous commercialization initiatives at various stages of development. These initiatives provide us with access to future potential earnings and monetization opportunities in high growth, multi-billion dollar commercial markets at limited incremental expense.

Some recent, notable examples of our commercialization initiatives include:

HVH Patient Precision Analytics

As demand for data analytics increases in the commercial sector, Vencore is leveraging its advanced capabilities, developed from decades of experience working for government agencies, to meet the demands of commercial clients. HVH, our joint venture with Havas, represents a key commercial initiative, an important milestone in our commercialization efforts and an opportunity to grow revenue from a low-risk contract base. Approximately 30 million Americans live with a rare disease and go an average of 7.6 years before being diagnosed correctly. While these rare

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diseases often take an enormous toll on the patient and the healthcare system and result in millions of dollars of unnecessary expenses in unsuccessful treatments and attempted diagnoses, they also represent a considerable opportunity for drug manufacturers. The Orphan Drug Act of 1983 created significant financial incentives for drug manufacturers to develop treatments for hard-to-diagnose diseases. Today, the orphan disease population represents a very limited, but attractive patient demographic for orphan drug manufacturers. The primary challenge, however, is successfully identifying patients for these orphan drugs. Due to the limited incidences of these diseases, traditional methods of identification, which rely on large populations of field representatives working with doctors to identify potential patients or simple statistical analysis, are expensive, time consuming and inefficient.

The HVH joint venture combines Havas' clinical knowledge with our patent-pending patient precision analytics technology and advanced analytics expertise applied against very large data sets to identify candidate patients with these hard-to-diagnose diseases. Our "Clinically Intelligent" solution is a cloud-based, HIPAA compliant, proprietary analytics platform that collects and analyzes the journeys of known patients to inform early diagnosis and intervention of undiagnosed patient prospects. We apply proven analytical methods and advanced machine learning algorithms to very large patient datasets to perform precision patient targeting, patient recruitment for marketed drugs and clinical trials, identification of patient journey and demographics, therapeutic market analysis and payer analysis.

Our methodology has been validated in a peer-reviewed publication, The American Journal of Pharmacy Benefits, which concluded: "The study demonstrated the ability of this state-of-the-art predictive analysis to find rare disease patients in a large and complex database, shortening the time to diagnosis and relieving patients of the frustration of going from doctor to doctor without a confirmed diagnosis."

The HVH joint venture expands our marketing and access to the pharmaceutical and biotechnology industries and allows us to leverage Havas' large global presence, deep industry relationships and existing service agreements with many top pharmaceutical manufacturers to accelerate our growth and scale in this attractive and rapidly growing market.

SecureSmart™

Utility field networks are often large, complex and not well understood by their operators. Each endpoint on a network, typically a meter, is a cyber-target, often operating in an unprotected environment. Each of the more than 70 million smart meters in the United States creates an entry point for a cyberattack on grid infrastructure and homes. Our patented SecureSmart™ solution is an integrated cybersecurity, operations and engineering solution for smart grid systems. Our SecureSmart™ solution offers advanced cybersecurity monitoring, with 24x7 continuous intrusion detection and validation of security controls and customer privacy. In addition, we provide customers with access to real-time network monitoring and communications analysis, as well as engineering and field operations capabilities including network health, diagnostics, forensics and root cause analysis. SecureSmart™ is deployed by multiple utilities across the United States. Across 13 active contracts and pilot programs, we protect approximately one million smart meters and other utility network end point devices.

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Backlog

We view growth in total backlog as a key measure of our business growth. We define backlog to include the following two components:

•: Funded Backlog. Funded backlog represents the revenue value of orders for services under existing contracts for which funding is appropriated or otherwise authorized, less revenue previously recognized on these contracts.
•: Unfunded Backlog. Unfunded backlog represents the revenue value of orders for services under existing contracts for which funding has not been appropriated or otherwise authorized.

The following table summarizes the value of our contract backlog at the respective dates presented (in thousands):


		As of December 31,						As of March 31,

($ in thousands)		2014		2015		2016		2016		2017

Backlog
Funded	$	402,470	$	393,660	$	340,531	$	488,921	$	330,991
Unfunded	$	2,185,346	$	1,823,596	$	2,163,195		2,045,082	$	2,270,376

Total backlog	$	2,587,816	$	2,217,256	$	2,503,726	$	2,534,003	$	2,601,367

Backlog does not include any multi-award ID/IQ contracts, including GSA Multiple Award schedule contracts and GSA schedules, except to the extent that task orders have been awarded to us under those contracts. Our backlog includes orders under contracts that in some cases extend for several years. The U.S. Congress generally appropriates funds for our clients on a yearly basis, even though their contracts with us may call for performance that is expected to take a number of years. As a result, contracts typically are only partially funded at any point during their term and all or some of the work to be performed under the contracts may remain unfunded unless and until the U.S. Congress makes subsequent appropriations and the procuring agency allocates funding to the contract.

We cannot predict with any certainty the portion of our backlog that we expect to recognize as revenue in any future period. While we report internally on our backlog on a monthly basis and review backlog upon the occurrence of certain events to determine if any adjustments are necessary, we cannot guarantee that we will recognize any revenue from our backlog. The primary risks that could affect our ability to recognize such revenue are program schedule changes, contract modifications, and our ability to assimilate and deploy new employees against funded backlog. Additional risks include: the unilateral right of the U.S. Government to cancel multi-year contracts and related orders or to terminate existing contracts for convenience or default; cost-cutting initiatives and other efforts to reduce U.S. Government spending, such as the initiative recently announced by the Secretary of Defense, which could reduce or delay funding for orders for services; delayed funding of our contracts due to delays in the completion of the U.S. Government's budgeting process and the use of continuing resolutions; in the case of unfunded backlog, the potential that funding will not be made available; and, in the case of priced options, the risk that our clients will not exercise their options. In our experience, the risks laid out above have not had a material negative effect on our ability to generate revenue from our funded backlog. See "Management's Discussion and Analysis of Financial Condition and Results of Operations — Key Metrics — Submittals, Awards, Book-to-Bill, Contract Backlog, Award Fees and DSO" and "Risk Factors — We may not realize the full value of our backlog, which may result in lower than expected revenue."

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Competition

The U.S. Government engineering and technology services industries consists of a large number of enterprises ranging from small, niche-oriented companies to multi-billion dollar corporations that serve many U.S. Government customers. We frequently compete against well-known firms in the industry as a prime contractor. Our main competitors are U.S. federal systems integrators and service providers such as Leidos Holdings, Inc., Science Applications International Corp., Booz Allen Hamilton Holding Corporation, CSRA, Inc., Engility Holdings, Inc. and ManTech International Corporation. Some of these companies have greater resources and larger client bases than we do.

Seasonality

Our results may be affected by variances as a result of seasonality we experience across our business. This pattern is typically driven by the U.S. fiscal year-end, September 30. While not certain, it is not uncommon for U.S. Government agencies to award extra tasks or complete other contract actions in the weeks before the end of the U.S. fiscal year in order to avoid the loss of unexpended fiscal year funds. In addition, we have also historically experienced higher bid and proposal costs in the months leading up to the U.S. fiscal year-end as we pursue new contract opportunities expected to be awarded early in the following U.S. fiscal year as a result of funding appropriated for that U.S. fiscal year. We may continue to experience this seasonality in future periods, and our results of operations may be affected by it. While not certain, changes in the U.S. Government's funding and spending patterns have altered historical seasonality trends, supporting our approach to managing the business on an annual basis. Seasonality is just one of a number of factors, many of which are outside of our control, which may affect our results in any period. See "Risk Factors."

Employees

As of December 31, 2016, we had approximately 3,750 employees, and approximately 69% held a Bachelor's degree and 38% held advanced degrees in a variety of technical disciplines, with many holding additional industry and/or technical certifications in key skill areas such as cybersecurity, agile software development, systems engineering, program management and lean six sigma. As of December 31, 2016, 73% of our employees held security clearances and 66% of our employees with security clearances held a Top Secret / Sensitive Compartmented Information-level clearance, which typically requires the completion of a polygraph. In addition, our senior leadership has an average of over 20 years of experience in relevant industries or roles and are well regarded by our customers and partners. We continue to focus on our firm-wide hiring program to recruit and attract additional high quality and experienced talent and maintain close relationships with key academic institutions globally, which allows us to identify and target leading minds in key fields of study relevant to our business. We believe that our employee relations are satisfactory.

Properties

Our headquarters are located in Chantilly, Virginia, where we lease approximately 283,100 square feet of space. As of December 31, 2016, we leased 33 commercial facilities (including our headquarters) with an aggregate of approximately 1,079,495 square feet of space across 15 states used in connection with the various services rendered to our customers. Our principal locations outside of Chantilly, Virginia are: Huntsville, Alabama; Laurel, Maryland; King of Prussia, Pennsylvania; Reston, Virginia; and Herndon, Virginia. Additionally, across 9 facilities we have an aggregate of approximately 330,400 square feet of customer-accredited Sensitive Compartmented Information Facilities, which are highly-specialized, secure facilities used to perform classified work

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for the IC. We also have employees working at customer sites throughout the U.S. and in other countries. We believe our facilities are adequate for our current and presently foreseeable needs.

Intellectual Property

As of December 31, 2016, our IP portfolio included over 260 issued patents and pending patent applications, owned or licensed by us. The patents and patent applications we license are subject to a licensing agreement pursuant to which we own royalty-free, fully paid-up, worldwide, irrevocable licenses to certain patents that we use in the operation of our business that were retained by the seller in connection with our acquisition of Vencore Labs. Aside from patents and patent applications, we also maintain a rich portfolio of other IP derived from customer investments in our programs and augmented by our own internal R&D initiatives. We derived approximately $70.9 million of customer investment from our Vencore Labs programs for the year ended December 31, 2016. We also maintain a number of trade secrets that we endeavor to protect to ensure their continuing availability to us. Our proprietary processes and IP are vital to our growth strategy, and we believe they are a core competitive advantage.

During the normal course of business, we perform R&D and technology consulting services and related products in support of our customers. Typically these services do not depend on patent protection. In accordance with applicable law, our U.S. Government contracts often provide government agencies certain license rights to our inventions, copyrights and other IP. U.S. Government agencies may in turn sublicense to other contractors (including our competitors) the right to utilize our IP. In addition, in the case of our work as a subcontractor, our prime contractor may also have certain rights to data, information and products we develop under the subcontract. At the same time, our U.S. Government contracts often license to us patents, copyrights and other IP owned by third parties.

Research and Development

To maintain our growth and competitiveness, we engage in an active R&D program through Vencore Labs focusing on technology development and innovation. The R&D activities at Vencore Labs are funded by both customer (notably DARPA, the Intelligence Community and DoD Research Labs) and internal R&D budgets. For the years ended December 31, 2014, 2015 and 2016, $60.7 million, $64.7 million and $70.9 million of our R&D spend was funded by our Vencore Labs customers, respectively. Our ability to use this funding to develop customer-requested technologies and subsequently apply them across our other businesses serves as a key competitive advantage for us and is vital to our future growth strategy.

Regulation

We are heavily regulated in most of the fields in which we operate. We provide services and products to numerous U.S. Government agencies and entities, including the DoD, DHS, NASA, DHS, GSA and NOAA. When working with these and other U.S. Government agencies and entities, we must comply with various laws and regulations relating to the formation, administration and performance of contracts. U.S. Government contracts generally are subject to the FAR, which sets

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forth policies, procedures and requirements for the acquisition of goods and services by the U.S. Government, agency-specific regulations that implement or supplement FAR, such as the DoD's Defense FAR Supplement and other applicable laws and regulations. These regulations impose a broad range of requirements, many of which are unique to government contracting, including various procurement, import and export, employment, security, contract pricing and cost, contract termination and adjustment, audit and reporting requirements. Among other things, these laws and regulations:

•: require certification and disclosure of all cost and pricing data in connection with certain contract negotiations;
•: define allowable and unallowable costs and otherwise govern our right to reimbursement under various cost-based U.S. Government contracts;
•: require reviews by the DCAA, the DCMA and other U.S. Government agencies of compliance with government standards for a contractor's financial capability and business systems;
•: restrict the use and dissemination of information classified for national security purposes and the export of certain products and technical data;
•: require us not to compete for work if an organizational conflict of interest, as defined by these laws and regulations, related to such work exists and/or cannot be appropriately mitigated; and
•: require mandatory disclosure of certain circumstances of non-compliance.

The U.S. Government may revise its procurement practices or adopt new contract laws and regulations at any time. In order to help ensure compliance with these complex laws and regulations, all of our employees are required to complete ethics training and other compliance training relevant to their position.

Internationally, we are subject to special U.S. Government laws and regulations, local government laws and regulations and procurement policies and practices (including laws and regulations relating to bribery of foreign government officials, import-export control, investments, exchange controls and repatriation of earnings) and varying currency, political and economic risks.

U.S. Government contracts are, by their terms, subject to termination by the U.S. Government either for convenience or default by the contractor. U.S. Government contracts also contain provisions that provide government clients with rights to reduce orders under or otherwise modify contracts and, for some contracts, reduce the contract price or cost, demand a refund and/or make a forward price adjustment under certain circumstances. In addition, U.S. Government contracts are conditioned upon the continuing availability of Congressional appropriations. Congress usually appropriates funds for a given program on a September 30 fiscal year basis, even though contract performance may take many years. As is common in the industry, our company is subject to business risks, including changes in governmental appropriations, national defense polices, service modernization plans, and availability of funds. Any of these factors could materially adversely affect our company's business with the U.S. Government in the future.

See "Risk Factors — Risks Related to Our Business — We are required to comply with numerous laws and regulations, some of which are highly complex, and our failure to comply could result in fines or civil or criminal penalties or suspension or debarment by the U.S. Government that could result in our inability to continue to work on or receive U.S. Government contracts, which could materially and adversely affect our results of operations."

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Environmental Matters

We are subject to federal, state and local laws and regulations relating to environmental, health and safety matters, including, among other things, handling and disposal of regulated substances, contamination by regulated substances and wastes and employee health and safety. Our previous ownership and current and previous operation of real property may subject us to liability pursuant to these laws or regulations. Under existing U.S. environmental laws, current or previous owners or operators of businesses and real property may be held liable for the full cost of investigating or remediating contamination caused by hazardous substance releases, even if they did not know of and were not responsible for the releases. Our costs related to complying with environmental, health and safety laws and regulations have not been material in the past and are not currently material to our total operating costs or cash flows. However, if we have any violations of, or incur liabilities pursuant to these laws or regulations in the future, our financial condition and operating results could be adversely affected. In addition, in the unlikely event that we are required to fully fund remediation of a contaminated site, the statutory framework might allow us to pursue rights of contribution from other potentially responsible parties.

Legal Proceedings

Our performance under our U.S. Government contracts and our compliance with the terms of those contracts and applicable laws and regulations are subject to continuous audit, review and investigation by the U.S. Government. In addition, we are from time to time involved in legal proceedings and investigations arising in the ordinary course of business, including those relating to employment matters, relationships with clients and contractors, IP disputes and other business matters. Although the outcome of any such matter is inherently uncertain and may be materially adverse, based on current information, our management does not expect any of the currently ongoing matters to have a material adverse effect on our financial condition or results of operations.

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MANAGEMENT

Below is a list of our executive officers and directors and their respective ages and a brief summary of the business experience of each of them.


Name	Age		Position
John M. Curtis		60	Chief Executive Officer and President
Jennifer H. Felix		46	Chief Financial Officer and Senior Vice President
Kevin T. Boyle		48	Senior Vice President, General Counsel and Secretary
Jeffrey W. Bohling		47	Senior Vice President and General Manager of Civilian and Defense Group
V. Joseph Broadwater, Jr.		61	Senior Vice President and General Manager of Space Group
Kent L. Matlick		55	Senior Vice President and General Manager of Intelligence Group
Petros Mouchtaris, PhD		51	President and General Manager of Vencore Labs, Inc.
Ramzi M. Musallam		48	Chairman of the Board
William L. Graham		67	Director
Aneal Krishnan		36	Director
Benjamin M. Polk		66	Director

John M. Curtis. Mr. Curtis is our Chief Executive Officer and President. Before assuming the role of Chief Executive Officer and President in July 2013, Mr. Curtis served as a senior advisor to Veritas Capital Management where he served on the board of directors of three portfolio companies, including Truven Health Analytics Inc., CRGT Inc. and The SI Organization, Inc., which became Vencore OpCo after a strategic acquisition and new brand launch in 2014. From 2007 through 2011, Mr. Curtis served as President and Chief Executive Officer of Vangent, Inc., an information management and business process outsourcing company, which was sold to General Dynamics Corporation in 2011. Prior to his role at Vangent, Inc., Mr. Curtis served for more than six years as President and Chief Executive Officer of Pearson Government Solutions, Inc., which was sold to Veritas Capital Management in 2007 and changed its name to Vangent, Inc. Mr. Curtis also serves on the board of directors of the Intelligence and National Security Association and the Northern Virginia Technology Council and has Director Emeritus designation from his recent term as Chairman of the Professional Services Council. Mr. Curtis holds a Bachelor of Science degree in Civil Engineering from the Virginia Military Institute.

Jennifer H. Felix. Ms. Felix became our Chief Financial Officer and Senior Vice President in July 2015. Ms. Felix has spent over 25 years in finance and accounting supporting both public and private corporations across multiple industries. Prior to joining us, she spent three years as Executive Vice President and Chief Financial Officer at Sotera Defense Solutions, Inc. Prior to her role at Sotera Defense Solutions, Inc., Ms. Felix was responsible for Planning and Acquisitions in the $11.0 billion IS&T Segment of General Dynamics Corporation. From 2000 to 2011, Ms. Felix worked in financial leadership positions for multiple federal contracting and technology companies, including Vangent, Inc., Deltek, Inc. and American Management Systems, Inc. Ms. Felix spent the first eight years of her career with Deloitte and Touche LLP where she was a senior manager in the audit practice. Ms. Felix holds a Bachelor of Science degree in Accounting from the University of Maryland and is a Certified Public Accountant (inactive).

Kevin T. Boyle. Mr. Boyle became our Senior Vice President, General Counsel and Secretary in March 2017. Mr. Boyle has a career spanning over 20 years in senior legal and business roles working with and advising the corporate executives and boards of directors of private and public companies. Prior to joining us, he spent two years as Senior Vice President, General Counsel and

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Secretary of Alion Science and Technology Corporation, a provider of engineering solutions and services to the U.S. government. From February 2012 until January 2014, Mr. Boyle served as Senior Vice President, General Counsel and Secretary of MCR, LLC, a privately-held professional services firm specializing in integrated program management solutions for the DoD. From June 2007 until February 2012, Mr. Boyle served as Senior Vice President, General Counsel & Secretary for Vangent, Inc. From 2002 to May 2007, Mr. Boyle served as Assistant General Counsel for General Dynamics Information Technology, Inc., following its acquisition of Anteon International Corporation in June 2006. Mr. Boyle received his Juris Doctor degree from Tulane Law School and his Bachelor of Arts degree in History from Yale University.

Jeffrey W. Bohling. Mr. Bohling became our Senior Vice President and General Manager of our Civilian and Defense Group in January 2017. Mr. Bohling is responsible for the successful operation, execution and management of highly innovative, enterprise-wide solutions for federal civilian and defense agencies, including programs at the Department of the Army, Department of the Navy, DHS and GSA. Prior to joining us, Mr. Bohling spent 15 years with General Dynamics Information Technology, Inc. and its predecessor entities, serving the last five years of his tenure as Vice President and General Manager for the Civilian Solutions Sector, where he was responsible for growing business with civilian agencies. He holds a Bachelor of Science in Electrical Engineering from Iowa State University and an International Executive Master of Business Administration from Georgetown University.

V. Joseph Broadwater, Jr. Mr. Broadwater became our Senior Vice President and General Manager of our Space Group in May of 2014. Mr. Broadwater has a career spanning over 38 years of federal and private sector service, principally supporting the aerospace industry in various management and leadership positions. Prior to joining Vencore, he served as the Executive Vice President and General Manager of the Aerospace Operations and Systems Group at QinetiQ North America, Inc. From 2002 to 2006 he served as the Senior Vice President and Business Unit General Manager of the National Security and Space Business Unit of Science Applications International Corp. From 2000 to 2002 he served as the General Manager of the National Systems Business Unit of International Business Machines Corporation, commonly referred to as IBM. Mr. Broadwater spent 20 years as a CIA Officer assigned to the NRO and ended his federal career in 2000 as the Chief System Engineer of the NRO. Mr. Broadwater holds a Master of Business Administration from the University of Virginia, Darden School of Business, a Master of Science in Aerospace Engineering from Virginia Polytechnic Institute and a Bachelor of Science in General Biological Sciences as well as a Bachelor of Arts in Economics from the University of Maryland.

Kent L. Matlick. Mr. Matlick is our Senior Vice President and General Manager of our Intelligence Group. Mr. Matlick has been involved with our company and its predecessor entities for over 30 years, primarily focused on management of National programs. Previously, Mr. Matlick has served as the Senior Vice President of our Mission Integration Group, and as Senior Vice President for our National Systems Group. Prior to the divestiture from Lockheed Martin in November 2010, Mr. Matlick was Lockheed Martin's Vice President for the Systems Integration Solutions business unit and Director for the Mission Programs Division. Mr. Matlick also worked in program leadership positions with legacy companies Martin Marietta Corporation and General Electric Company's aerospace division. Mr. Matlick holds a Bachelor of Science degree in Computer Science from Shippensburg University and is a member of multiple industry associations, including U.S. Geospatial-Intelligence Forum, the Armed Forces Communications and Electronics Association and the Intelligence and National Security Alliance.

Petros Mouchtaris, PhD. Dr. Mouchtaris has been with Vencore Labs and its predecessor organizations for over 20 years starting as a research scientist and taking increasing responsibilities over the years as Executive Director, Vice President of Applied Research and currently President of

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Vencore Labs. Earlier in his career, he was Director of product development at Oracle Corporation and Technical Director at Pacific Bell Telephone Co. (now part of AT&T, Inc.). Over the years, Dr. Mouchtaris has published extensively in the areas of wireless networks, cyber security and voice-over-IP, and is co-author of the book Security for Wireless Ad Hoc Networks. He was elected a Telcordia Fellow in 2011 and has been named by Billing and OSS World as one of the "25 Most Influential People in Telecom Software." Dr. Mouchtaris holds a Diploma degree in Electrical Engineering from the National Technical University of Athens, Greece and a Master of Science and PhD in Electrical Engineering from the California Institute of Technology, California.

Ramzi M. Musallam. Mr. Musallam has served as Chairman of our Board of Directors since September 2012 and as a member of our Board of Directors since October 2010 and will continue to serve as Chairman following the consummation of this offering. Mr. Musallam is the Chief Executive Officer and Managing Partner of Veritas Capital Management, a leading private equity firm focused on investing in the government and technology markets, which he has been associated with since 1997. Previously, he worked at the private equity firms Pritzker and Pritzker and Berkshire Partners. Mr. Musallam holds a Bachelor of Arts, cum laude, from Colgate University with a major in Mathematical Economics and a Master of Business Administration with High Honors from the University of Chicago Booth School of Business. Mr. Musallam was chosen to serve on our Board of Directors because of his position as a Managing Partner at Veritas Capital Management, his experience on other public and private company boards and his extensive experience in finance and private equity investments.

William L. Graham. Mr. Graham has served as a member of our Board of Directors since September 2014 and will continue to serve as a member of our Board of Directors following the consummation of this offering. Mr. Graham served as our President and Chief Executive Officer from November 2010 to July 2013. Prior to joining us, Mr. Graham served as General Manager and President of Lockheed Martin where he was responsible for a multi-billion dollar business segment. Mr. Graham also served as the Commanding Officer of the Naval Air Station Patuxent River Reserve Augmentation organization. He is a retired Navy Captain. While serving as Commanding Officer, Mr. Graham was also the Lockheed Martin program manager in charge of integrating the systems for the LANDSAT 7 satellite development. Mr. Graham holds a Bachelor of Science degree in Engineering from the United States Naval Academy and a Master's degree in Computer Systems Management from the Naval PG School, Monterey, California. Mr. Graham was chosen to serve on our Board of Directors because of his prior position as our President and Chief Executive Officer and his extensive experience in, and understanding of, government contracting.

Aneal Krishnan. Mr. Krishnan has served as a member of our Board of Directors since April 2014 and will continue to serve as a member of our Board of Directors following the consummation of this offering. Mr. Krishnan is a Principal at Veritas Capital Management. Prior to joining Veritas Capital Management in 2010, Mr. Krishnan was an associate at Ripplewood Holdings, a New York-based private equity investment firm. Prior to Ripplewood, Mr. Krishnan was an investment banking analyst at Goldman Sachs & Co. LLC in their Financial Institutions Group. In 2007, Mr. Krishnan was deployed to Iraq with his U.S. Army reserve unit for a year-long combat tour where he served as an Infantry Officer. Mr. Krishnan holds two Bachelor of Science degrees in Electrical Engineering and Management from the Massachusetts Institute of Technology and a Master of Business Administration from Harvard Business School. Mr. Krishnan was chosen to serve on our Board of Directors because of his position as a Principal at Veritas Capital Management, his experience on other public and private company boards and his extensive experience in finance and private equity investments.

Benjamin M. Polk. Mr. Polk has served as a member of our Board of Directors since September 2012 and will continue to serve as a member of our Board of Directors following the

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consummation of this offering. Mr. Polk is a Partner at Veritas Capital Management. Prior to joining Veritas Capital Management in 2011, Mr. Polk was a partner at the law firm of Schulte Roth and Zabel LLP from May 2004 to July 2011 and prior to that, a partner at the law firm of Winston & Strawn LLP, where Mr. Polk practiced law with that firm and its predecessor firm from August 1976 to May 2004. During his legal career, Mr. Polk worked with Veritas Capital Management as its lead outside legal counsel on virtually every major transaction Veritas Capital Management has been involved in since its founding. Mr. Polk currently serves on the board of directors of Monster Beverage Corporation, where he has been a director since November 1990. Mr. Polk holds a Bachelor of Arts with High Honors from Hobart College and a Juris Doctor from Cornell Law School. Mr. Polk was chosen to serve on our Board of Directors because of his position as a Partner at Veritas Capital Management, his experience on other public and private company boards and his extensive experience in finance and private equity investments.

Composition of our Board of Directors

Our business and affairs are managed under the direction of our Board of Directors. Our Board of Directors currently consists of four directors. Under our amended and restated certificate of incorporation, our Board of Directors will consist of no fewer than three and no more than eleven directors, with the exact number of directors determined from time to time by resolution of our Board of Directors.

Upon the consummation of this offering, our amended and restated certificate of incorporation will provide for a classified board of directors comprised of three classes. The number of directors will be distributed among the three classes so that the number of directors in each class is as nearly equal in number as possible. Each director will serve a three-year term with one class being elected at each annual meeting of the stockholders. As of the date of this prospectus, Class I is expected to include , Class II is expected to include , and Class III is expected to include . See "Description of Capital Stock — Classified Board of Directors."

Each director will hold office until the annual meeting of the stockholders for the year in which his or her term expires and until his or her successor has been duly elected and qualified or until his or her earlier death, resignation, retirement, disqualification or removal. Any director may be removed from office by our stockholders. Veritas Capital is the beneficial owner of a majority of our common stock and will be able to unilaterally remove directors.

Controlled Company Exception

After the consummation of this offering, Veritas Capital will continue to beneficially own more than 50% of our voting power. As a result, we will be a "controlled company" within the meaning of the corporate governance standards of the NYSE.

Under the NYSE corporate governance standards, a company of which more than 50% of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance standards, including (1) the requirement that a majority of the board of directors consist of independent directors, (2) the requirement to have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, (3) the requirement to have a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee's purpose and responsibilities, and (4) the requirement for an annual performance evaluation of the nominating and corporate governance and compensation committees. Following this offering, we intend to utilize certain of these exemptions. As a result, following this offering, we may not have a majority of independent directors on our Board of Directors (although we expect our Board of Directors to determine that qualify as

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independent directors under the corporate governance standards of the NYSE) and neither our Nominating and Corporate Governance Committee nor our Compensation Committee will be composed entirely of independent directors. In addition, our Nominating and Corporate Governance Committee and our Compensation Committee will not be subject to annual performance evaluations. Accordingly, you will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of the NYSE. In the event that we cease to be a "controlled company," we will be required to comply with these provisions within the transition periods specified in the corporate governance rules of the NYSE.

A number of our directors also serve on the boards of directors of other portfolio companies of Veritas Capital. Our Board of Directors has carefully considered these facts in determining that each of Messrs. and are independent for purposes of the corporate governance rules of the NYSE.

Board Committees

Prior to the consummation of this offering, our Board of Directors will establish an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee, as discussed below.

Our Chief Executive Officer and other executive officers will regularly report to the non-executive directors and the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee to ensure effective and efficient oversight of our activities and to assist in proper risk management and the ongoing evaluation of management controls. We believe that the leadership structure of our Board of Directors will provide appropriate risk oversight of our activities given the controlling interests held by Veritas Capital.

Audit Committee

The members of our Audit Committee will be (Chairman), and . Our Board of Directors has determined that each of Messrs. and qualify as an independent director under the corporate governance standards of the NYSE and the independence requirements of Rule 10A-3 of the Exchange Act and as an "audit committee financial expert" as such term is defined in Item 407(d)(5) of Regulation S-K.

The purpose of the Audit Committee is to prepare the audit committee report required by the SEC to be included in our proxy statement and to assist our Board of Directors in overseeing and monitoring (1) the quality and integrity of our financial statements, (2) our compliance with legal and regulatory requirements, (3) our independent registered public accounting firm's qualifications and independence, (4) the performance of our internal audit function and (5) the performance of our independent registered public accounting firm.

The written charter for the Audit Committee will be available on our website. The information contained on or accessible through our corporate web

Vencore Holding Corp. S-1