##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended January 1, 2010
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from to
 Commission File Number: 333-127343
 
 DYNCORP INTERNATIONAL LLC
  Delaware
(State or other jurisdiction of 
incorporation or organization)
    
    52-2287126
(I.R.S. Employer
Identification No.)
 3190 Fairview Park Drive, Suite 700, Falls Church, Virginia 22042
(571) 722-0210
 þ o
 Yes o No o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
 Yes o No þ




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##### 



DYNCORP INTERNATIONAL LLC
TABLE OF CONTENTS
 PagePART I. FINANCIAL INFORMATIONForward-Looking StatementsItem 1. Financial StatementsUnaudited Consolidated Statements of IncomeThree Months Ended
January 1, 2010 and January 2, 2009
    
    
    3Unaudited Consolidated Statements of IncomeNine Months Ended
January 1, 2010 and January 2, 2009
    
    
    4Unaudited Consolidated Balance SheetsJanuary 1, 2010 and
April 3, 2009
    
    
    5Unaudited Consolidated Statements of Cash FlowsNine Months
Ended January 1, 2010 and January 2, 2009
    
    
    6Unaudited Consolidated Statements of Members EquityNine Months
Ended January 1, 2010 and January 2, 2009
    
    
    7Notes to Consolidated Financial Statements (unaudited)
    
    
    8Item 2. Managements Discussion and Analysis of Financial Condition and
Results of Operations.
    
    
    37Item 3. Quantitative and Qualitative Disclosures About Market Risk.
    
    
    50Item 4. Controls and Procedures.
    
    
    51PART II. OTHER INFORMATIONItem 1. Legal Matters.
    
    
    51Item 1A. Risk Factors.
    
    
    51Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
    
    
    52Item 3. Defaults Upon Senior Securities.
    
    
    52Item 4. Submission of Matters to a Vote of Security Holders.
    
    
    52Item 5. Other Information.
    
    
    52Item 6. Exhibits.
    
    
    52Global
Linguist Solutions LLC Financial Statements
    
    
    F1
    

Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2




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Disclosure Regarding Forward-Looking Information
   2




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 ITEM 1. FINANCIAL STATEMENTS
 DYNCORP INTERNATIONAL LLC
 
 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME  (Amounts in thousands)
 For the Three Months EndedJanuary 1, 2010
    
    
    January 2, 2009Revenue
    
    $
    914,970
    
    
    $
    792,327Cost of services
    
    
    (822,700
    )
    
    
    (704,210
    )Selling, general and administrative expenses
    
    
    (32,350
    )
    
    
    (26,505
    )Depreciation and amortization expense
    
    
    (10,530
    )
    
    
    (10,029
    )Operating income
    
    
    49,390
    
    
    
    51,583Interest expense
    
    
    (13,655
    )
    
    
    (15,322
    )Earnings from affiliates
    
    
    1,278
    
    
    
    1,319Interest income
    
    
    67
    
    
    
    730Other income (loss), net
    
    
    285
    
    
    
    (856
    )Income before income taxes
    
    
    37,365
    
    
    
    37,454Provision for income taxes
    
    
    (10,493
    )
    
    
    (11,639
    )Net income
    
    
    26,872
    
    
    
    25,815Noncontrolling interests
    
    
    (6,444
    )
    
    
    (6,062
    )Net income attributable to DynCorp International LLC
    
    $
    20,428
    
    
    $
    19,753
   3




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##### Table of Contents



DYNCORP INTERNATIONAL LLC
 
 UNAUDITED CONSOLIDATED STATEMENTS OF INCOME  (Amounts in thousands)
 For the Nine Months EndedJanuary 1, 2010
    
    
    January 2, 2009Revenue
    
    $
    2,521,519
    
    
    $
    2,288,272Cost of services
    
    
    (2,249,072
    )
    
    
    (2,039,118
    )Selling, general and administrative expenses
    
    
    (87,092
    )
    
    
    (80,350
    )Depreciation and amortization expense
    
    
    (30,913
    )
    
    
    (30,594
    )Operating income
    
    
    154,442
    
    
    
    138,210Interest expense
    
    
    (41,956
    )
    
    
    (44,442
    )Loss on early extinguishment of debt
    
    
    (146
    )
    
    
    (4,443
    )Earnings from affiliates
    
    
    3,859
    
    
    
    3,959Interest income
    
    
    509
    
    
    
    1,751Other income, net
    
    
    44
    
    
    
    809Income before income taxes
    
    
    116,752
    
    
    
    95,844Provision for income taxes
    
    
    (36,421
    )
    
    
    (30,086
    )Net income
    
    
    80,331
    
    
    
    65,758Noncontrolling interests
    
    
    (18,703
    )
    
    
    (15,154
    )Net income attributable to DynCorp International LLC
    
    $
    61,628
    
    
    $
    50,604
   4




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##### Table of Contents



DYNCORP INTERNATIONAL LLC
 
 UNAUDITED CONSOLIDATED BALANCE SHEETS  (Dollars in thousands)
 As ofJanuary 1, 2010
    
    
    April 3, 2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    67,082
    
    
    $
    200,222Restricted cash
    
    
    24,490
    
    
    
    5,935Accounts receivable, net of allowances of $74 and $68, respectively
    
    
    781,047
    
    
    
    564,432Prepaid expenses and other current assets
    
    
    108,631
    
    
    
    124,214Total current assets
    
    
    981,250
    
    
    
    894,803Property and equipment, net
    
    
    54,518
    
    
    
    18,338Goodwill
    
    
    448,356
    
    
    
    420,180Tradename
    
    
    18,683
    
    
    
    18,318Other intangibles, net
    
    
    127,973
    
    
    
    142,719Deferred income taxes
    
    
    3,348
    
    
    
    12,788Other assets, net
    
    
    32,378
    
    
    
    32,068Total assets
    
    $
    1,666,506
    
    
    $
    1,539,214LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    29,137
    
    
    $
    30,540Accounts payable
    
    
    284,178
    
    
    
    160,419Accrued payroll and employee costs
    
    
    121,825
    
    
    
    137,993Deferred income taxes
    
    
    12,210
    
    
    
    8,278Other accrued liabilities
    
    
    112,080
    
    
    
    111,590Income taxes payable
    
    
    4,408
    
    
    
    5,986Total current liabilities
    
    
    563,838
    
    
    
    454,806Long-term debt, less current portion
    
    
    522,949
    
    
    
    569,372Other long-term liabilities
    
    
    11,633
    
    
    
    6,779Total liabilities
    
    
    1,098,420
    
    
    
    1,030,957Commitments and contingencies
    
    
    
    
    
    
    Members equity:Members units, 100 outstanding
    
    
    331,616
    
    
    
    331,008Retained earnings
    
    
    241,183
    
    
    
    179,555Purchases of Parents common stock
    
    
    (8,948
    )
    
    
    (8,618
    )Accumulated other comprehensive loss
    
    
    (2,090
    )
    
    
    (4,424
    )Total members equity attributable to DynCorp International LLC
    
    
    561,761
    
    
    
    497,521Noncontrolling interests
    
    
    6,325
    
    
    
    10,736Total equity
    
    
    568,086
    
    
    
    508,257Total liabilities and members equity
    
    $
    1,666,506
    
    
    $
    1,539,214
   5




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##### Table of Contents



DYNCORP INTERNATIONAL LLC
 
 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS  (Dollars in thousands)
 For the Nine Months EndedJanuary 1, 2010
    
    
    January 2, 2009Cash flows from operating activitiesNet income
    
    $
    80,331
    
    
    $
    65,758Adjustments to reconcile net income to net cash provided by
(used in) operating activities:Depreciation and amortization
    
    
    31,736
    
    
    
    31,388Amortization of deferred loan costs
    
    
    2,931
    
    
    
    2,696Loss on early extinguishment of debt
    
    
    146
    
    
    
    4,443Recovery for losses on accounts receivable
    
    
    (12
    )
    
    
    (283
    )Equity based compensation
    
    
    2,536
    
    
    
    2,385Loss on disposition of assets, net
    
    
    (34
    )
    
    
    Earnings from affiliates
    
    
    (3,859
    )
    
    
    (3,959
    )Distributions from affiliates
    
    
    1,725
    
    
    
    2,439Deferred income taxes
    
    
    12,860
    
    
    
    32,193Other
    
    
    33
    
    
    
    (772
    )Changes in assets and liabilities:Restricted cash
    
    
    (18,555
    )
    
    
    8,429Accounts receivable
    
    
    (208,696
    )
    
    
    (121,329
    )Prepaid expenses and other assets
    
    
    12,775
    
    
    
    (20,711
    )Accounts payable and accrued liabilities
    
    
    105,354
    
    
    
    68,957Income taxes payable
    
    
    (3,692
    )
    
    
    (1,439
    )Net cash provided by operating activities
    
    
    15,579
    
    
    
    70,195Cash flows from investing activitiesCash paid for acquisition, net of cash acquired
    
    
    (37,905
    )
    
    
    Purchase of property and equipment
    
    
    (37,830
    )
    
    
    (3,407
    )Purchase of computer software
    
    
    (1,615
    )
    
    
    (1,634
    )Change in cash restricted as collateral on letters of credit
    
    
    
    
    
    
    (15,160
    )Other investing activities
    
    
    60
    
    
    
    (1,869
    )Net cash (used in) investing activities
    
    
    (77,290
    )
    
    
    (22,070
    )Cash flows from financing activitiesBorrowings on long-term debt
    
    
    51,500
    
    
    
    323,751Payments on long-term debt
    
    
    (100,126
    )
    
    
    (301,129
    )Purchases of Parents common stock
    
    
    (712
    )
    
    
    Borrowings under other financing arrangements
    
    
    
    
    
    
    4,299Payments of deferred financing cost
    
    
    13
    
    
    
    (9,834
    )Payments of dividends to noncontrolling interests
    
    
    (22,067
    )
    
    
    Other financing activities
    
    
    (37
    )
    
    
    (11
    )Net cash (used in) provided by financing activities
    
    
    (71,429
    )
    
    
    17,076Net (decrease) increase in cash and cash equivalents
    
    
    (133,140
    )
    
    
    65,201Cash and cash equivalents, beginning of period
    
    
    200,222
    
    
    
    85,379Cash and cash equivalents, end of period
    
    $
    67,082
    
    
    $
    150,580Income taxes paid, net of refunds
    
    $
    18,409
    
    
    $
    18,622Interest paid
    
    $
    31,103
    
    
    $
    34,354Non-cash investing activities
    
    $
    
    
    
    $
    8,296Non-cash dividends
    
    $
    1,047
    
    
    $
    
   6




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##### Table of Contents



DYNCORP INTERNATIONAL LLC
 
 UNAUDITED CONSOLIDATED STATEMENTS OF MEMBERS EQUITY
 For the nine months ended January 2, 2009  (Amounts in thousands)
 TotalMembersEquityAccumulated
    
    
    AttributableParents
    
    
    Other
    
    
    to DynCorpMembers
    
    
    Retained
    
    
    Common
    
    
    Comprehensive
    
    
    International
    
    
    Noncontrolling
    
    
    TotalUnits
    
    
    Earnings
    
    
    Stock
    
    
    Income (Loss)
    
    
    LLC
    
    
    Interests
    
    
    EquityBalance at March 28, 2008
    
    $
    321,414
    
    
    $
    109,785
    
    
    
    
    
    
    $
    (6,914
    )
    
    $
    424,285
    
    
    
    
    
    
    $
    424,285Comprehensive income (loss):Net income
    
    
    
    
    
    
    65,758
    
    
    
    
    
    
    
    
    
    
    
    65,758
    
    
    
    
    
    
    
    65,758Interest rate swap, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,710
    
    
    
    1,710
    
    
    
    
    
    
    
    1,710Currency translation adjustment,
net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (634
    )
    
    
    (634
    )
    
    
    
    
    
    
    (634
    )Comprehensive income
    
    
    
    
    
    
    65,758
    
    
    
    
    
    
    
    1,076
    
    
    
    66,834
    
    
    
    
    
    
    
    66,834Noncontrolling interests
    
    
    
    
    
    
    (15,154
    )
    
    
    
    
    
    
    
    
    
    
    (15,154
    )
    
    
    
    
    
    
    (15,154
    )Comprehensive income attributable to
DynCorp International LLC
    
    
    
    
    
    
    50,604
    
    
    
    
    
    
    
    1,076
    
    
    
    51,680
    
    
    
    
    
    
    
    51,680Net income and comprehensive income
attributable to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,154
    
    
    
    15,154Equity-based compensation
    
    
    575
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    575
    
    
    
    
    
    
    
    575Tax benefit reduction associated with
equity-based
compensation
    
    
    (10
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10
    )
    
    
    
    
    
    
    (10
    )Sale of noncontrolling interests of DIFZ
    
    
    8,190
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,190
    
    
    
    
    
    
    
    8,190DIFZ financing, net of tax
    
    
    106
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    106
    
    
    
    
    
    
    
    106Dividends
declared to noncontrolling
interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,306
    )
    
    
    (3,306
    )Balance at January 2, 2009
    
    $
    330,275
    
    
    $
    160,389
    
    
    $
    
    
    
    $
    (5,838
    )
    
    $
    484,826
    
    
    $
    11,848
    
    
    $
    496,674
 For the nine months ended January 1, 2010  (Amounts in thousands )
 TotalMembersEquityAccumulated
    
    
    AttributableParents
    
    
    Other
    
    
    to DynCorpMembers
    
    
    Retained
    
    
    Common
    
    
    Comprehensive
    
    
    International
    
    
    Noncontrolling
    
    
    TotalUnits
    
    
    Earnings
    
    
    Stock
    
    
    Income (Loss)
    
    
    LLC
    
    
    Interests
    
    
    EquityBalance at April 3, 2009
    
    $
    331,008
    
    
    $
    179,555
    
    
    $
    (8,618
    )
    
    $
    (4,424
    )
    
    $
    497,521
    
    
    $
    10,736
    
    
    $
    508,257Comprehensive income (loss):Net income
    
    
    
    
    
    
    80,331
    
    
    
    
    
    
    
    
    
    
    
    80,331
    
    
    
    
    
    
    
    80,331Interest rate swap, net of tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,985
    
    
    
    1,985
    
    
    
    
    
    
    
    1,985Currency translation adjustment, net of
tax
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    349
    
    
    
    349
    
    
    
    
    
    
    
    349Comprehensive income
    
    
    
    
    
    
    80,331
    
    
    
    
    
    
    
    2,334
    
    
    
    82,665
    
    
    
    
    
    
    
    82,665Noncontrolling interests
    
    
    
    
    
    
    (18,703
    )
    
    
    
    
    
    
    
    
    
    
    (18,703
    )
    
    
    
    
    
    
    (18,703
    )Comprehensive
income attributable to DynCorp International LLC
    
    
    
    
    
    
    61,628
    
    
    
    
    
    
    
    2,334
    
    
    
    63,962
    
    
    
    
    
    
    
    63,962Net income
and comprehensive income attributable to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,703
    
    
    
    18,703DIFZ financing, net of tax
    
    
    298
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    298
    
    
    
    
    
    
    
    298Purchases of Parents common stock
    
    
    
    
    
    
    
    
    
    
    (712
    )
    
    
    
    
    
    
    (712
    )
    
    
    
    
    
    
    (712
    )Parents shares issued to settle RSU liability
    
    
    90
    
    
    
    
    
    
    
    382
    
    
    
    
    
    
    
    472
    
    
    
    
    
    
    
    472Equity-based compensation
    
    
    257
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    257
    
    
    
    
    
    
    
    257Tax benefit reduction associated with
equity-based
compensation
    
    
    (37
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37
    )
    
    
    
    
    
    
    (37
    )Dividends
declared to noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (23,114
    )
    
    
    (23,114
    )Balance at January 1, 2010
    
    $
    331,616
    
    
    $
    241,183
    
    
    $
    (8,948
    )
    
    $
    (2,090
    )
    
    $
    561,761
    
    
    $
    6,325
    
    
    $
    568,086
   7




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##### Table of Contents



DYNCORP INTERNATIONAL LLC
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 Note 1Basis of Presentation and Accounting Policies
 Basis of Presentation
      Consolidation
 Principles of Consolidation
 Consolidation
  8




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##### Table of Contents



Contingency Response Services LLC
    
    
    45.0
    %Babcock DynCorp Limited
    
    
    44.0
    %Partnership for Temporary Housing LLC
    
    
    40.0
    %
 Consolidation
 Global Linguist Solutions LLC
    
    
    51.0
    %DynCorp International FZ-LLC
    
    
    50.0
    %
 Noncontrolling Interests
  Restricted Cash
  Property and Equipment
  Accounting Policies
  Accounting Developments
 Pronouncements Implemented
 Consolidation
  9




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##### Table of Contents



Business Combinations
 Collaborative Arrangements
 Intangibles Risks and Uncertainties
 Business Combinations
 Subsequent Events
  10




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##### Table of Contents



Generally Accepted Accounting Principles
 Pronouncements Not Yet Implemented
 Consolidation
 Fair Value Measurements and Disclosures
 Note 2Composition of Certain Financial Statement Captions
  Prepaid expenses and other current assets 
 January 1, 2010
    
    

April 3, 2009Prepaid expenses
    
    $
    49,936
    
    
    $
    61,570Inventories
    
    
    11,989
    
    
    
    10,840Assets available for sale
    
    
    3,517
    
    
    
    Work-in-process
    
    
    25,783
    
    
    
    33,885Joint venture receivables
    
    
    7,834
    
    
    
    2,491Other current assets
    
    
    9,572
    
    
    
    15,428Total
    
    $
    108,631
    
    
    $
    124,214
  11




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##### Table of Contents



Other assets, net 
 January 1, 2010
    
    

April 3, 2009Deferred financing costs, net
    
    $
    10,563
    
    
    $
    13,828Investment in affiliates
    
    
    8,219
    
    
    
    8,982Promissory notes, long-term portion
    
    
    6,419
    
    
    
    6,631Other
    
    
    7,177
    
    
    
    2,627Total
    
    $
    32,378
    
    
    $
    32,068
 Accrued payroll and employee costs 
 January 1, 2010
    
    

April 3, 2009Wages, compensation and other benefits (1)
    
    $
    90,724
    
    
    $
    108,879Accrued vacation
    
    
    29,108
    
    
    
    26,329Accrued contributions to employee benefit plans
    
    
    1,993
    
    
    
    2,785Total
    
    $
    121,825
    
    
    $
    137,993
 (1)
    
    Includes RSUs accounted for as liability awards presented in Note 9. Other accrued liabilities 
 January 1, 2010
    
    

April 3, 2009Deferred revenue
    
    $
    20,471
    
    
    $
    30,739Insurance expense
    
    
    27,872
    
    
    
    28,061Interest expense and short-term swap liability
    
    
    17,804
    
    
    
    11,688Contract losses
    
    
    3,270
    
    
    
    11,730Legal matters
    
    
    21,065
    
    
    
    16,993FIN 48
Liability
    
    
    10,211
    
    
    
    5,539Other
    
    
    11,387
    
    
    
    6,840Total
    
    $
    112,080
    
    
    $
    111,590
  Note 3Goodwill and Other Intangible Assets
   (Dollars in thousands)
    
    LCM/GSDS
    
    
    ISS /GLS
    
    
    MTSS/GPSS
    
    
    TotalGoodwill balance as of April 3, 2009
    
    $
    39,935
    
    
    $
    300,094
    
    
    $
    80,151
    
    
    $
    420,180Reallocation of goodwill
    
    
    169,138
    
    
    
    (300,094
    )
    
    
    130,956
    
    
    
    Phoenix acquisition
    
    
    28,176
    
    
    
    
    
    
    
    
    
    
    
    28,176Goodwill balance as of January 1, 2010
    
    $
    237,249
    
    
    $
    
    
    
    $
    211,107
    
    
    $
    448,356
   12




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##### Table of Contents



January 1, 2010WeightedAverageUseful Life
    
    
    Gross
    
    
    Accumulated(Amounts in thousands, except years)
    
    (Years)
    
    
    Carrying Value
    
    
    Amortization
    
    
    NetOther intangibles, netFinite lived intangible assets:Customer related intangible assets
    
    
    8.5
    
    
    $
    293,544
    
    
    $
    (181,171
    )
    
    $
    112,373Other
    
    
    6.6
    
    
    
    26,110
    
    
    
    (10,510
    )
    
    
    15,600$
    319,654
    
    
    $
    (191,681
    )
    
    $
    127,973TradenameFinite lived intangible assets Tradename  Phoenix
    
    
    5.0
    
    
    $
    381
    
    
    $
    (16
    )
    
    $
    365Indefinite lived intangible assets  Tradename
    
    
    
    
    
    
    18,318
    
    
    
    
    
    
    
    18,318$
    18,699
    
    
    $
    (16
    )
    
    $
    18,683
 April 3, 2009WeightedAverageUseful Life
    
    
    Gross Carrying
    
    
    Accumulated(Amounts in thousands, except years)
    
    (Years)
    
    
    Value
    
    
    Amortization
    
    
    NetOther intangibles, netFinite lived intangible assets:Customer related intangible assets
    
    
    8.5
    
    
    $
    290,716
    
    
    $
    (155,142
    )
    
    $
    135,574Other
    
    
    5.5
    
    
    
    15,351
    
    
    
    (8,206
    )
    
    
    7,145$
    306,067
    
    
    $
    (163,348
    )
    
    $
    142,719TradenameIndefinite lived intangible assets  Tradename
    
    
    
    
    
    $
    18,318
    
    
    $
    
    
    
    $
    18,318
   Amortization(Amounts in thousands)
    
    ExpenseThree month period ending April 2, 2010
    
    $
    9,879Estimate for fiscal year 2011
    
    
    35,644Estimate for fiscal year 2012
    
    
    24,857Estimate for fiscal year 2013
    
    
    20,971Estimate for fiscal year 2014
    
    
    9,605Thereafter
    
    
    27,382Total
    
    $
    128,338
  13




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##### Table of Contents



Note 4 Income Taxes
  Three Months Ended(Amounts in thousands)
    

January 1, 2010
    
    

January 2, 2009Current portion:Federal
    
    $
    9,292
    
    
    $
    (27,825
    )State
    
    
    781
    
    
    
    (1,397
    )Foreign
    
    
    1,100
    
    
    
    1,04611,173
    
    
    
    (28,176
    )Deferred portion:Federal
    
    
    (687
    )
    
    
    38,586State
    
    
    (23
    )
    
    
    1,290Foreign
    
    
    30
    
    
    
    (61
    )(680
    )
    
    
    39,815Provision for income taxes
    
    $
    10,493
    
    
    $
    11,639
 Nine Months Ended(Amounts in thousands)
    

January 1, 2010
    
    

January 2, 2009Current portion:Federal
    
    $
    17,800
    
    
    $
    (7,217
    )State
    
    
    1,850
    
    
    
    253Foreign
    
    
    3,911
    
    
    
    4,85723,561
    
    
    
    (2,107
    )Deferred portion:Federal
    
    
    12,417
    
    
    
    31,218State
    
    
    416
    
    
    
    1,044Foreign
    
    
    27
    
    
    
    (69
    )12,860
    
    
    
    32,193Provision for income taxes
    
    $
    36,421
    
    
    $
    30,086
  (Amounts in thousands)
    

January 1, 2010
    
    

April 3, 2009Current deferred tax liabilities
    
    $
    (12,210
    )
    
    $
    (8,278
    )Non-current deferred tax assets
    
    
    3,348
    
    
    
    12,788Deferred tax (liabilities)/assets, net
    
    $
    (8,862
    )
    
    $
    4,510
       14




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##### Table of Contents



Note 5 Accounts Receivable
  (Amounts in thousands)
    
    January 1, 2010
    
    
    April 3, 2009Billed
    
    $
    276,095
    
    
    $
    220,501Unbilled
    
    
    504,952
    
    
    
    343,931Total
    
    $
    781,047
    
    
    $
    564,432
  Note 6Long-Term Debt
  (Amounts in thousands)
    
    January 1, 2010
    
    
    April 3, 2009Term loans
    
    $
    176,637
    
    
    $
    200,0009.5% Senior subordinated notes(1)
    
    
    375,449
    
    
    
    399,912Total debt
    
    
    552,086
    
    
    
    599,912Less current portion of long-term debt
    
    
    (29,137
    )
    
    
    (30,540
    )Total long-term debt
    
    $
    522,949
    
    
    $
    569,372
 (1)
    
    This includes the impact of the discount which had a carrying value of ($0.8) million and
($1.0) million as of January 1, 2010 and April 3, 2009, respectively. Long-Term Debt
 Senior Secured Credit Facility
   9.5% Senior Subordinated Notes
   15




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##### Table of Contents



Note 7 Interest Rate Derivatives
  Fixed
    
    
    VariableNotional
    
    
    Interest
    
    
    Interest RateDate Entered
    
    Amount
    
    
    Rate Paid*
    
    
    Received
    
    
    Expiration Date(Dollars in thousands)April 2007
    
    $
    168,620
    
    
    
    4.975
    %
    
    3-month LIBOR
    
    May 2010April 2007
    
    $
    31,380
    
    
    
    4.975
    %
    
    3-month LIBOR
    
    May 2010
 *
    
    Plus applicable margin (2.5% at January 1, 2010).     Fair Value at
    
    
    Fair Value atDerivatives designated as hedges under ASC 815
    
    Balance Sheet Location
    
    
    January 1, 2010
    
    
    April 3, 2009Interest rate swaps
    
    Other accrued liabilities
    
    $
    3,341
    
    
    $
    5,259Interest rate swaps
    
    Other long-term liabilities
    
    
    
    
    
    
    957Total
    
    $
    3,341
    
    
    $
    6,216
 Fair Value at
    
    
    Fair Value atDerivatives not designated as hedges under ASC 815
    
    Balance Sheet Location
    
    
    January 1, 2010
    
    
    April 3, 2009Interest rate swaps
    
    Other accrued liabilities
    
    $
    613
    
    
    $
    893Interest rate swaps
    
    Other long-term liabilities
    
    
    
    
    
    
    182Total
    
    $
    613
    
    
    $
    1,075Total Derivatives
    
    
    
    
    
    $
    3,954
    
    
    $
    7,291
  16




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##### Table of Contents



Change in OCI fromGains (Losses)
    
    
    GAINS (LOSSES) RECLASSIFIED FROM
    
    
    GAINS (LOSSES) RECOGNIZEDRecognized in OCI
    
    
    ACCUMULATED OCI INTO INCOME
    
    
    IN INCOME ON DERIVATIVESon Derivatives
    
    
    (EFFECTIVE PORTION)
    
    
    (INEFFECTIVE PORTION)Derivatives Designated as
    
    (Effective Portion)
    
    
    Line Item
    
    
    
    
    
    
    Line ItemCash Flow Hedging
    
    Three Months ended
    
    
    in Statements
    
    
    
    
    
    
    in StatementsInstruments under ASC 815
    
    January 1, 2010
    
    
    of Income
    
    
    Amount
    
    
    of Income
    
    AmountInterest rate
derivatives
    
    $
    1,902
    
    
    Interest expense
    
    $
    (2,022
    )
    
    Other (loss)/income, net
    
    $
    Total
    
    $
    1,902
    
    
    
    
    
    
    $
    (2,022
    )
    
    
    
    
    
    $
    
  Change in OCI fromGains (Losses)
    
    
    GAINS (LOSSES) RECLASSIFIED FROM
    
    
    GAINS (LOSSES) RECOGNIZEDRecognized in OCI
    
    
    ACCUMULATED OCI INTO INCOME
    
    
    IN INCOME ON DERIVATIVESon Derivatives
    
    
    (EFFECTIVE PORTION)
    
    
    (INEFFECTIVE PORTION)Derivatives Designated as
    
    (Effective Portion)
    
    
    Line Item
    
    
    
    
    
    
    Line ItemCash Flow Hedging
    
    Nine Months ended
    
    
    in Statements
    
    
    
    
    
    
    in StatementsInstruments under ASC 815
    
    January 1, 2010
    
    
    of Income
    
    
    Amount
    
    
    of Income
    
    AmountInterest rate
derivatives
    
    $
    3,109
    
    
    Interest expense
    
    $
    (5,776
    )
    
    Other (loss)/income, net
    
    $
    Total
    
    $
    3,109
    
    
    
    
    
    
    $
    (5,776
    )
    
    
    
    
    
    $
    
  Change in OCI fromGains (Losses)
    
    
    GAINS (LOSSES) RECLASSIFIED FROM
    
    
    GAINS (LOSSES) RECOGNIZEDRecognized in OCI
    
    
    ACCUMULATED OCI INTO INCOME
    
    
    IN INCOME ON DERIVATIVESon Derivatives
    
    
    (EFFECTIVE PORTION)
    
    
    (INEFFECTIVE PORTION)Derivatives Designated as
    
    (Effective Portion)
    
    
    Line Item
    
    
    
    
    
    
    Line ItemCash Flow Hedging
    
    Three months ended
    
    
    in Statements
    
    
    
    
    
    
    in StatementsInstruments under ASC 815
    
    January 2, 2009
    
    
    of Income
    
    
    Amount
    
    
    of Incomes
    
    AmountInterest rate
derivatives
    
    $
    (2,892
    )
    
    Interest expense
    
    $
    (980
    )
    
    Interest expense
    
    $
    9Total
    
    $
    (2,892
    )
    
    
    
    
    
    $
    (980
    )
    
    
    
    
    
    $
    9
  17




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##### Table of Contents



Change in OCI fromGains (Losses)
    
    
    GAINS (LOSSES) RECLASSIFIED FROM
    
    
    GAINS (LOSSES) RECOGNIZEDRecognized in OCI
    
    
    ACCUMULATED OCI INTO INCOME
    
    
    IN INCOME ON DERIVATIVESon Derivatives
    
    
    (EFFECTIVE PORTION)
    
    
    (INEFFECTIVE PORTION)Derivatives Designated as
    
    (Effective Portion)
    
    
    Line Item
    
    
    
    
    
    
    Line ItemCash Flow Hedging
    
    Nine months ended
    
    
    in Statements
    
    
    
    
    
    
    in StatementsInstruments under ASC 815
    
    January 2, 2009
    
    
    of Income
    
    
    Amount
    
    
    of Incomes
    
    AmountInterest rate
derivatives
    
    $
    2,679
    
    
    Interest expense
    
    $
    (3,764
    )
    
    Interest expense
    
    $
    167Total
    
    $
    2,679
    
    
    
    
    
    
    $
    (3,764
    )
    
    
    
    
    
    $
    167
 Derivatives and Hedging
 Three
    
    
    ThreeMonths
    
    
    MonthsEnded
    
    
    EndedAMOUNT OF GAIN OR (LOSS) RECOGNIZED IN
    
    
    January 1,
    
    
    January 2,INCOME ON DERIVATE
    
    
    2010
    
    
    2009
 Derivatives not Designatedas Hedging Instruments
    
    Line Item in Statementsunder ASC 815
    
    of Income
    
    
    Amount
    
    
    AmountInterest rate derivatives
    
    Other (loss)/ income, net
    
    $
    11
    
    
    $
    Total
    
    
    
    
    
    $
    11
    
    
    $
    
 Nine
    
    
    Ninemonths
    
    
    monthsEnded
    
    
    EndedAMOUNT OF GAIN OR (LOSS) RECOGNIZED IN
    
    
    January 1,
    
    
    January 2,INCOME ON DERIVATE
    
    
    2010
    
    
    2009
 Derivatives not Designatedas Hedging Instruments
    
    Line Item in Statementsunder ASC 815
    
    of Income
    
    
    Amount
    
    
    AmountInterest rate derivatives
    
    Other (loss)/ income, net
    
    $
    (495
    )
    
    $
    (404
    )Total
    
    
    
    
    
    $
    (495
    )
    
    $
    (404
    )
   18




---



##### Table of Contents



Note 8Commitments and Contingencies
 Commitments
  General Legal Matters
   Pending litigation and claims
    19




---



##### Table of Contents



U.S. Government Investigations
   qui tam
 U.S. Government Audits
   20




---



##### Table of Contents



Contract Matters
  Note 9Equity-Based Compensation
 Compensation-Stock Compensation
 Class B Equity
   21




---



##### Table of Contents



% Interest in
    
    
    Grant DateDIV Holding
    
    
    Fair ValueBalance April 3, 2009
    
    
    4.71
    %
    
    $
    9,669First quarter fiscal year 2010 forfeitures
    
    
    (0.03
    %)
    
    
    (37
    )Balance July 3, 2009
    
    
    4.68
    %
    
    $
    9,632Second quarter fiscal year 2010 forfeitures
    
    
    
    
    
    
    Balance October 2, 2009
    
    
    4.68
    %
    
    $
    9,632Third quarter fiscal year 2010 forfeitures
    
    
    (0.10
    %)
    
    
    (318
    )Balance January 1, 2010
    
    
    4.58
    %
    
    $
    9,314April 3, 2009 vested
    
    
    3.69
    %
    
    $
    6,950First quarter fiscal year 2010 vesting
    
    
    0.04
    %
    
    
    174July 3, 2009 vested
    
    
    3.73
    %
    
    $
    7,124Second quarter fiscal year 2010 vesting
    
    
    0.05
    %
    
    
    73October 2, 2009 vested
    
    
    3.78
    %
    
    $
    7,197Third quarter fiscal year 2010 vesting
    
    
    0.20
    %
    
    
    702January 1, 2010 vested
    
    
    3.98
    %
    
    $
    7,899April 3, 2009 nonvested
    
    
    1.02
    %
    
    $
    2,719July 3, 2009 nonvested
    
    
    0.95
    %
    
    $
    2,508October 2, 2009 nonvested
    
    
    0.90
    %
    
    $
    2,435January 1, 2010 nonvested
    
    
    0.60
    %
    
    $
    1,415
  Three month period ending April 2, 2010
    
    $
    84Fiscal year ending April 1, 2011
    
    
    182Fiscal year ending March 30, 2012 and thereafter
    
    
    62Total
    
    $
    328
 Restricted Stock Units and Performance Stock Units
       22




---



##### Table of Contents



WeightedAverageOutstanding
    
    
    GrantRestricted
    
    
    DateStock Units
    
    
    Fair ValueOutstanding, April 3, 2009
    
    
    345,895
    
    
    $
    16.71Units granted
    
    
    607,050
    
    
    $
    17.05Units forfeited
    
    
    (86,970
    )
    
    $
    16.83Units vested and settled(1)
    
    
    (66,350
    )
    
    $
    17.99Outstanding, January 1, 2010
    
    
    799,625
    
    
    $
    16.85
 (1)
    
    During the nine months ended January 1, 2010, 21,695 RSU awards, with a value
of $0.4 million, vested but were not settled as of
January 1, 2010. Our Parent expects to settle these
shares in the fourth quarter of fiscal year 2010.  Three month fiscal period ending April 2, 2010
    
    $
    996Fiscal year ending April 1, 2011
    
    
    3,672Fiscal year ending March 30, 2012 and thereafter
    
    
    3,855Total
    
    $
    8,523
  Note 10Consolidating Financial Information of Subsidiary Guarantors
      23




---



##### Table of Contents



DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Statement of Operations Information
For the Three Months Ended January 1, 2010
 Subsidiary
    
    
    
    
    
    
    SubsidiaryLLC
    
    
    Guarantors
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Consolidated(Dollars in thousands)Revenue
    
    $
    700,554
    
    
    $
    51,029
    
    
    $
    177,763
    
    
    $
    115,472
    
    
    $
    (129,848
    )
    
    $
    914,970Cost of services
    
    
    (627,226
    )
    
    
    (48,175
    )
    
    
    (162,927
    )
    
    
    (114,220
    )
    
    
    129,848
    
    
    
    (822,700
    )Selling,
general and administrative expenses
    
    
    (25,252
    )
    
    
    (4,049
    )
    
    
    (2,774
    )
    
    
    (275
    )
    
    
    
    
    
    
    (32,350
    )Depreciation
and amortization expense
    
    
    (10,131
    )
    
    
    (383
    )
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    (10,530
    )Operating income
    
    
    37,945
    
    
    
    (1,578
    )
    
    
    12,062
    
    
    
    961
    
    
    
    
    
    
    
    49,390Interest expense
    
    
    (13,655
    )
    
    
    
    
    
    
    (611
    )
    
    
    
    
    
    
    611
    
    
    
    (13,655
    )Equity in
income (loss) of subsidiaries/affiliates
    
    
    5,861
    
    
    
    (113
    )
    
    
    
    
    
    
    
    
    
    
    (4,470
    )
    
    
    1,278Interest income
    
    
    674
    
    
    
    3
    
    
    
    1
    
    
    
    
    
    
    
    (611
    )
    
    
    67Other, net
    
    
    290
    
    
    
    (19
    )
    
    
    
    
    
    
    14
    
    
    
    
    
    
    
    285Income (loss) before income taxes
    
    
    31,115
    
    
    
    (1,707
    )
    
    
    11,452
    
    
    
    975
    
    
    
    (4,470
    )
    
    
    37,365Provision for income taxes
    
    
    (10,687
    )
    
    
    560
    
    
    
    
    
    
    
    (366
    )
    
    
    
    
    
    
    (10,493
    )Net income
    
    
    20,428
    
    
    
    (1,147
    )
    
    
    11,452
    
    
    
    609
    
    
    
    (4,470
    )
    
    
    26,872Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (5,689
    )
    
    
    (755
    )
    
    
    
    
    
    
    (6,444
    )Net income attributable to DynCorp
International LLC
    
    $
    20,428
    
    
    $
    (1,147
    )
    
    $
    5,763
    
    
    $
    (146
    )
    
    $
    (4,470
    )
    
    $
    20,428
 DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Statement of Operations Information
For the Three Months Ended January 2, 2009
 Subsidiary
    
    
    
    
    
    
    SubsidiaryLLC
    
    
    Guarantors
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Consolidated(Dollars in thousands)Revenue
    
    $
    540,113
    
    
    $
    53,263
    
    
    $
    198,951
    
    
    $
    101,253
    
    
    $
    (101,253
    )
    
    $
    792,327Cost of services
    
    
    (472,083
    )
    
    
    (49,959
    )
    
    
    (183,194
    )
    
    
    (100,227
    )
    
    
    101,253
    
    
    
    (704,210
    )Selling, general and administrative expenses
    
    
    (19,434
    )
    
    
    (1,676
    )
    
    
    (5,325
    )
    
    
    (70
    )
    
    
    
    
    
    
    (26,505
    )Depreciation and amortization expense
    
    
    (9,700
    )
    
    
    (314
    )
    
    
    
    
    
    
    (15
    )
    
    
    
    
    
    
    (10,029
    )Operating income
    
    
    38,896
    
    
    
    1,314
    
    
    
    10,432
    
    
    
    941
    
    
    
    
    
    
    
    51,583Interest expense
    
    
    (15,306
    )
    
    
    
    
    
    
    (775
    )
    
    
    (29
    )
    
    
    788
    
    
    
    (15,322
    )Equity in
income (loss) of subsidiaries/affiliates
    
    
    6,013
    
    
    
    (51
    )
    
    
    
    
    
    
    
    
    
    
    (4,643
    )
    
    
    1,319Interest income
    
    
    1,518
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (788
    )
    
    
    730Other, net
    
    
    (500
    )
    
    
    (267
    )
    
    
    
    
    
    
    (89
    )
    
    
    
    
    
    
    (856
    )Income before income taxes
    
    
    30,621
    
    
    
    996
    
    
    
    9,657
    
    
    
    823
    
    
    
    (4,643
    )
    
    
    37,454Provision for income taxes
    
    
    (10,868
    )
    
    
    (381
    )
    
    
    
    
    
    
    (390
    )
    
    
    
    
    
    
    (11,639
    )Net income
    
    
    19,753
    
    
    
    615
    
    
    
    9,657
    
    
    
    433
    
    
    
    (4,643
    )
    
    
    25,815Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (4,694
    )
    
    
    (1,368
    )
    
    
    
    
    
    
    (6,062
    )Net income attributable to DynCorp
International LLC
    
    $
    19,753
    
    
    $
    615
    
    
    $
    4,963
    
    
    $
    (935
    )
    
    $
    (4,643
    )
    
    $
    19,753
  24




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##### Table of Contents



DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Statement of Operations Information
For the Nine Months Ended January 1, 2010
 Subsidiary
    
    
    
    
    
    
    SubsidiaryLLC
    
    
    Guarantors
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Consolidated(Dollars in thousands)Revenue
    
    $
    1,813,278
    
    
    $
    147,845
    
    
    $
    574,205
    
    
    $
    329,224
    
    
    $
    (343,033
    )
    
    $
    2,521,519Cost of services
    
    
    (1,599,831
    )
    
    
    (136,929
    )
    
    
    (529,329
    )
    
    
    (326,016
    )
    
    
    343,033
    
    
    
    (2,249,072
    )Selling,
general and administrative expenses
    
    
    (68,821
    )
    
    
    (8,457
    )
    
    
    (9,193
    )
    
    
    (621
    )
    
    
    
    
    
    
    (87,092
    )Depreciation
and amortization expense
    
    
    (29,853
    )
    
    
    (1,012
    )
    
    
    
    
    
    
    (48
    )
    
    
    
    
    
    
    (30,913
    )Operating income
    
    
    114,773
    
    
    
    1,447
    
    
    
    35,683
    
    
    
    2,539
    
    
    
    
    
    
    
    154,442Interest expense
    
    
    (41,956
    )
    
    
    
    
    
    
    (1,810
    )
    
    
    
    
    
    
    1,810
    
    
    
    (41,956
    )Loss on extinguishment of debt
    
    
    (146
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (146
    )Equity in
income (loss) of subsidiaries/affiliates
    
    
    21,323
    
    
    
    (22
    )
    
    
    
    
    
    
    
    
    
    
    (17,442
    )
    
    
    3,859Interest income
    
    
    2,311
    
    
    
    3
    
    
    
    1
    
    
    
    4
    
    
    
    (1,810
    )
    
    
    509Other, net
    
    
    176
    
    
    
    (32
    )
    
    
    
    
    
    
    (100
    )
    
    
    
    
    
    
    44Income (loss) before income taxes
    
    
    96,481
    
    
    
    1,396
    
    
    
    33,874
    
    
    
    2,443
    
    
    
    (17,442
    )
    
    
    116,752Provision for income taxes
    
    
    (34,853
    )
    
    
    (562
    )
    
    
    
    
    
    
    (1,006
    )
    
    
    
    
    
    
    (36,421
    )Net income
    
    
    61,628
    
    
    
    834
    
    
    
    33,874
    
    
    
    1,437
    
    
    
    (17,442
    )
    
    
    80,331Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (16,606
    )
    
    
    (2,097
    )
    
    
    
    
    
    
    (18,703
    )Net income attributable to DynCorp
International LLC
    
    $
    61,628
    
    
    $
    834
    
    
    $
    17,268
    
    
    $
    (660
    )
    
    $
    (17,442
    )
    
    $
    61,628
 DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Statement of Operations Information
For the Nine Months Ended January 2, 2009
 Subsidiary
    
    
    
    
    
    
    SubsidiaryLLC
    
    
    Guarantors
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Consolidated(Dollars in thousands)Revenue
    
    $
    1,603,886
    
    
    $
    165,708
    
    
    $
    518,678
    
    
    $
    296,721
    
    
    $
    (296,721
    )
    
    $
    2,288,272Cost of services
    
    
    (1,417,751
    )
    
    
    (155,476
    )
    
    
    (475,119
    )
    
    
    (287,493
    )
    
    
    296,721
    
    
    
    (2,039,118
    )Selling, general and administrative expenses
    
    
    (60,614
    )
    
    
    (5,102
    )
    
    
    (14,147
    )
    
    
    (487
    )
    
    
    
    
    
    
    (80,350
    )Depreciation and amortization expense
    
    
    (29,586
    )
    
    
    (942
    )
    
    
    
    
    
    
    (66
    )
    
    
    
    
    
    
    (30,594
    )Operating income
    
    
    95,935
    
    
    
    4,188
    
    
    
    29,412
    
    
    
    8,675
    
    
    
    
    
    
    
    138,210Interest expense
    
    
    (44,426
    )
    
    
    
    
    
    
    (2,488
    )
    
    
    (16
    )
    
    
    2,488
    
    
    
    (44,442
    )Loss on early extinguishment of debt
    
    
    (4,443
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,443
    )Equity in
income (loss) of subsidiaries/affiliates
    
    
    25,949
    
    
    
    (201
    )
    
    
    
    
    
    
    
    
    
    
    (21,789
    )
    
    
    3,959Interest income
    
    
    4,234
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    (2,488
    )
    
    
    1,751Other, net
    
    
    904
    
    
    
    (111
    )
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    809Income before income taxes
    
    
    78,153
    
    
    
    3,881
    
    
    
    26,924
    
    
    
    8,675
    
    
    
    (21,789
    )
    
    
    95,844Provision for income taxes
    
    
    (27,549
    )
    
    
    (1,457
    )
    
    
    
    
    
    
    (1,080
    )
    
    
    
    
    
    
    (30,086
    )Net income
    
    
    50,604
    
    
    
    2,424
    
    
    
    26,924
    
    
    
    7,595
    
    
    
    (21,789
    )
    
    
    65,758Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (13,156
    )
    
    
    (1,998
    )
    
    
    
    
    
    
    (15,154
    )Net
income attributable to DynCorp International LLC
    
    $
    50,604
    
    
    $
    2,424
    
    
    $
    13,768
    
    
    $
    5,597
    
    
    $
    (21,789
    )
    
    $
    50,604
  25




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##### Table of Contents



DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Balance Sheet Information
January 1, 2010
 Subsidiary
    
    
    
    
    
    
    SubsidiaryLLC
    
    
    Guarantors
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Consolidated(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    56,342
    
    
    $
    2,527
    
    
    $
    1,604
    
    
    $
    6,609
    
    
    $
    
    
    
    $
    67,082Restricted cash
    
    
    24,140
    
    
    
    350
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    24,490Accounts receivable, net
    
    
    618,579
    
    
    
    29,157
    
    
    
    131,728
    
    
    
    4,749
    
    
    
    (3,166
    )
    
    
    781,047Intercompany receivable
    
    
    3,361
    
    
    
    
    
    
    
    
    
    
    
    55,589
    
    
    
    (58,950
    )
    
    
    GLS note receivable
    
    
    20,403
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20,403
    )
    
    
    Prepaid expenses and other current
assets
    
    
    91,090
    
    
    
    14,138
    
    
    
    1,589
    
    
    
    1,814
    
    
    
    
    
    
    
    108,631Total current assets
    
    
    813,915
    
    
    
    46,172
    
    
    
    134,921
    
    
    
    68,761
    
    
    
    (82,519
    )
    
    
    981,250Property and equipment, net
    
    
    50,727
    
    
    
    3,483
    
    
    
    
    
    
    
    308
    
    
    
    
    
    
    
    54,518Goodwill
    
    
    398,176
    
    
    
    50,180
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    448,356Tradename
    
    
    18,318
    
    
    
    365
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,683Other intangibles, net
    
    
    110,573
    
    
    
    17,400
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    127,973Investment in subsidiaries
    
    
    108,799
    
    
    
    567
    
    
    
    
    
    
    
    
    
    
    
    (109,366
    )
    
    
    Other assets, net
    
    
    33,986
    
    
    
    1,646
    
    
    
    94
    
    
    
    
    
    
    
    
    
    
    
    35,726Total assets
    
    $
    1,534,494
    
    
    $
    119,813
    
    
    $
    135,015
    
    
    $
    69,069
    
    
    $
    (191,885
    )
    
    $
    1,666,506LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    29,137
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    29,137Accounts payable
    
    
    210,372
    
    
    
    3,234
    
    
    
    72,310
    
    
    
    1,428
    
    
    
    (3,166
    )
    
    
    284,178Accrued payroll and employee costs
    
    
    55,179
    
    
    
    9,338
    
    
    
    24,792
    
    
    
    32,516
    
    
    
    
    
    
    
    121,825Intercompany payable
    
    
    55,589
    
    
    
    3,361
    
    
    
    
    
    
    
    
    
    
    
    (58,950
    )
    
    
    GLS note payable
    
    
    
    
    
    
    
    
    
    
    20,403
    
    
    
    
    
    
    
    (20,403
    )
    
    
    Other accrued liabilities
    
    
    68,578
    
    
    
    10,042
    
    
    
    6,058
    
    
    
    27,402
    
    
    
    
    
    
    
    112,080Income taxes payable and deferred
taxes
    
    
    15,911
    
    
    
    
    
    
    
    
    
    
    
    707
    
    
    
    
    
    
    
    16,618Total current liabilities
    
    
    434,766
    
    
    
    25,975
    
    
    
    123,563
    
    
    
    62,053
    
    
    
    (82,519
    )
    
    
    563,838Long-term debt, less current portion
    
    
    522,949
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    522,949Other long-term liabilities
    
    
    8,693
    
    
    
    2,936
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    11,633Total equity
    
    
    568,086
    
    
    
    90,902
    
    
    
    11,452
    
    
    
    7,012
    
    
    
    (109,366
    )
    
    
    568,086Total liabilities and members equity
    
    $
    1,534,494
    
    
    $
    119,813
    
    
    $
    135,015
    
    
    $
    69,069
    
    
    $
    (191,885
    )
    
    $
    1,666,506
  26




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##### Table of Contents



DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Balance Sheet Information
April 3, 2009
 Subsidiary
    
    
    
    
    
    
    SubsidiaryLLC
    
    

Guarantors
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    ConsolidatedCurrent assets:Cash and cash equivalents
    
    $
    192,968
    
    
    $
    657
    
    
    $
    1,877
    
    
    $
    4,720
    
    
    $
    
    
    
    $
    200,222Restricted cash
    
    
    5,935
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,935Accounts receivable, net
    
    
    389,716
    
    
    
    28,584
    
    
    
    144,315
    
    
    
    1,817
    
    
    
    
    
    
    
    564,432Intercompany receivables
    
    
    12,178
    
    
    
    
    
    
    
    
    
    
    
    41,346
    
    
    
    (53,524
    )
    
    
    GLS note receivable
    
    
    7,063
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,063
    )
    
    
    Prepaid expenses and other current assets
    
    
    110,549
    
    
    
    8,245
    
    
    
    4,182
    
    
    
    1,238
    
    
    
    
    
    
    
    124,214Total current assets
    
    
    718,409
    
    
    
    37,486
    
    
    
    150,374
    
    
    
    49,121
    
    
    
    (60,587
    )
    
    
    894,803Property and equipment, net
    
    
    14,582
    
    
    
    3,400
    
    
    
    
    
    
    
    356
    
    
    
    
    
    
    
    18,338Goodwill
    
    
    398,559
    
    
    
    21,621
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420,180Tradename
    
    
    18,318
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,318Other intangibles, net
    
    
    136,093
    
    
    
    6,626
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    142,719Investment in subsidiaries
    
    
    72,020
    
    
    
    589
    
    
    
    
    
    
    
    
    
    
    
    (72,609
    )
    
    
    Other assets, net
    
    
    44,288
    
    
    
    474
    
    
    
    94
    
    
    
    
    
    
    
    
    
    
    
    44,856Total assets
    
    $
    1,402,269
    
    
    $
    70,196
    
    
    $
    150,468
    
    
    $
    49,477
    
    
    $
    (133,196
    )
    
    $
    1,539,214Current liabilities:Current portion of long-term debt
    
    $
    30,540
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    30,540Accounts payable
    
    
    68,842
    
    
    
    3,522
    
    
    
    87,342
    
    
    
    713
    
    
    
    
    
    
    
    160,419Accrued payroll and employee costs
    
    
    69,220
    
    
    
    7,169
    
    
    
    25,796
    
    
    
    35,808
    
    
    
    
    
    
    
    137,993Intercompany payables
    
    
    41,346
    
    
    
    11,805
    
    
    
    373
    
    
    
    
    
    
    
    (53,524
    )
    
    
    GLS note payable
    
    
    
    
    
    
    
    
    
    
    7,063
    
    
    
    
    
    
    
    (7,063
    )
    
    
    Other accrued liabilities
    
    
    94,333
    
    
    
    5,302
    
    
    
    9,409
    
    
    
    2,546
    
    
    
    
    
    
    
    111,590Income taxes
payable and deferred taxes
    
    
    13,615
    
    
    
    
    
    
    
    
    
    
    
    649
    
    
    
    
    
    
    
    14,264Total current liabilities
    
    
    317,896
    
    
    
    27,798
    
    
    
    129,983
    
    
    
    39,716
    
    
    
    (60,587
    )
    
    
    454,806Long-term debt, less current portion
    
    
    569,372
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    569,372Other long-term liabilities
    
    
    6,744
    
    
    
    28
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    6,779Total equity
    
    
    508,257
    
    
    
    42,370
    
    
    
    20,478
    
    
    
    9,761
    
    
    
    (72,609
    )
    
    
    508,257Total liabilities and members equity
    
    $
    1,402,269
    
    
    $
    70,196
    
    
    $
    150,468
    
    
    $
    49,477
    
    
    $
    (133,196
    )
    
    $
    1,539,214
  27




---



##### Table of Contents



DynCorp International LLC and SubsidiariesUnaudited Condensed Consolidating Statement of Cash Flow Information
For the Nine Months Ended January 1, 2010
 Subsidiary
    
    
    
    
    
    
    SubsidiaryLLC
    
    
    Guarantors
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Consolidated(Dollars in thousands)Net cash (used in) provided by operating activities
    
    $
    (43,666
    )
    
    $
    10,574
    
    
    $
    29,400
    
    
    $
    19,271
    
    
    $
    
    
    
    $
    15,579Cash flows from investing activities:Purchase of property, equipment and computer software
    
    
    (39,445
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39,445
    )Cash paid for acquisition, net of cash acquired
    
    
    (37,905
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (37,905
    )Other investing cash flows
    
    
    60
    
    
    
    
    
    
    
    
    
    
    
    (14,243
    )
    
    
    14,243
    
    
    
    60Net cash used in investing activities
    
    
    (77,290
    )
    
    
    
    
    
    
    
    
    
    
    (14,243
    )
    
    
    14,243
    
    
    
    (77,290
    )Cash flows from financing activities:Net transfers from (to) Parent/Sub
    
    
    9,720
    
    
    
    (8,704
    )
    
    
    13,227
    
    
    
    
    
    
    
    (14,243
    )
    
    
    Borrowings on long-term debt
    
    
    51,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,500Payments on long-term debt
    
    
    (100,126
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (100,126
    )Receipts/payments of dividends to Parent
    
    
    23,972
    
    
    
    
    
    
    
    (42,900
    )
    
    
    (3,139
    )
    
    
    
    
    
    
    (22,067
    )Other financing activities
    
    
    (736
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (736
    )Net cash (used in) financing activities
    
    
    (15,670
    )
    
    
    (8,704
    )
    
    
    (29,673
    )
    
    
    (3,139
    )
    
    
    (14,243
    )
    
    
    (71,429
    )Net (decrease) increase in cash and cash equivalents
    
    
    (136,626
    )
    
    
    1,870
    
    
    
    (273
    )
    
    
    1,889
    
    
    
    
    
    
    
    (133,140
    )Cash and cash equivalents, beginning of period
    
    
    192,968
    
    
    
    657
    
    
    
    1,877
    
    
    
    4,720
    
    
    
    
    
    
    
    200,222Cash and cash equivalents, end of period
    
    $
    56,342
    
    
    $
    2,527
    
    
    $
    1,604
    
    
    $
    6,609
    
    
    $
    
    
    
    $
    67,082
 DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Statement of Cash Flow Information
For the Nine Months Ended January 2, 2009
 Subsidiary
    
    
    
    
    
    
    SubsidiaryLLC
    
    
    Guarantors
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Consolidated(Dollars in thousands)Net cash provided by (used in) operating activities
    
    $
    63,323
    
    
    $
    (8,060
    )
    
    $
    (6,587
    )
    
    $
    21,519
    
    
    $
    
    
    
    $
    70,195Cash flows from investing activities:Purchase of property, equipment and computer software
    
    
    (5,041
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,041
    )Other investing cash flows
    
    
    (17,029
    )
    
    
    
    
    
    
    
    
    
    
    (18,753
    )
    
    
    18,753
    
    
    
    (17,029
    )Net cash used in investing activities
    
    
    (22,070
    )
    
    
    
    
    
    
    
    
    
    
    (18,753
    )
    
    
    18,753
    
    
    
    (22,070
    )Cash flows from financing activities:Net transfers (to) from Parent/Sub
    
    
    2,736
    
    
    
    4,918
    
    
    
    11,099
    
    
    
    
    
    
    
    (18,753
    )
    
    
    Borrowings on long-term debt
    
    
    323,751
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    323,751Payments on long-term debt
    
    
    (301,129
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (301,129
    )Other financing activities
    
    
    (5,546
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,546
    )Net cash provided by financing activities
    
    
    19,812
    
    
    
    4,918
    
    
    
    11,099
    
    
    
    
    
    
    
    (18,753
    )
    
    
    17,076Net increase (decrease) in cash and cash equivalents
    
    
    61,065
    
    
    
    (3,142
    )
    
    
    4,512
    
    
    
    2,766
    
    
    
    
    
    
    
    65,201Cash and cash equivalents, beginning of period
    
    
    79,484
    
    
    
    3,782
    
    
    
    53
    
    
    
    2,060
    
    
    
    
    
    
    
    85,379Cash and cash equivalents, end of period
    
    $
    140,549
    
    
    $
    640
    
    
    $
    4,565
    
    
    $
    4,826
    
    
    $
    
    
    
    $
    150,580
  28




---



##### Table of Contents



DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Statement of Operations Information
For the Three Months Ended January 2, 2009
 Subsidiary
    
    
    Subsidiary
    
    
    
    
    
    
    
    
    
    
    Subsidiary
    
    
    SubsidiaryLLC
    
    
    LLC
    
    
    Guarantors
    
    
    Guarantors
    
    
    GLS
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Eliminations
    
    
    ConsolidatedAs previously
    
    
    
    
    
    
    As previously
    
    
    
    
    
    
    Not previously
    
    
    
    
    
    
    As previously
    
    
    
    
    
    
    As previouslypresented
    
    
    As restated
    
    
    presented
    
    
    As restated
    
    
    reported
    
    
    As restated
    
    
    reported
    
    
    As restated
    
    
    reported
    
    
    As restated(Dollars in thousands)Revenue
    
    $
    540,113
    
    
    $
    540,113
    
    
    $
    252,214
    
    
    $
    53,263
    
    
    $
    
    
    
    $
    198,951
    
    
    $
    101,253
    
    
    $
    101,253
    
    
    $
    (101,253
    )
    
    $
    (101,253
    )
    
    $
    792,327Cost of services
    
    
    (472,080
    )
    
    
    (472,083
    )
    
    
    (233,157
    )
    
    
    (49,959
    )
    
    
    
    
    
    
    (183,194
    )
    
    
    (100,226
    )
    
    
    (100,227
    )
    
    
    101,253
    
    
    
    101,253
    
    
    
    (704,210
    )Selling, general and administrative expenses
    
    
    (19,434
    )
    
    
    (19,434
    )
    
    
    (7,000
    )
    
    
    (1,676
    )
    
    
    
    
    
    
    (5,325
    )
    
    
    (71
    )
    
    
    (70
    )
    
    
    
    
    
    
    
    
    
    
    (26,505
    )Depreciation and amortization expense
    
    
    (10,015
    )
    
    
    (9,700
    )
    
    
    
    
    
    
    (314
    )
    
    
    
    
    
    
    
    
    
    
    (14
    )
    
    
    (15
    )
    
    
    
    
    
    
    
    
    
    
    (10,029
    )Operating income
    
    
    38,584
    
    
    
    38,896
    
    
    
    12,057
    
    
    
    1,314
    
    
    
    
    
    
    
    10,432
    
    
    
    942
    
    
    
    941
    
    
    
    
    
    
    
    
    
    
    
    51,583Interest expense
    
    
    (15,322
    )
    
    
    (15,306
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (775
    )
    
    
    
    
    
    
    (29
    )
    
    
    
    
    
    
    788
    
    
    
    (15,322
    )Equity in
income (loss) of subsidiaries/affiliates
    
    
    5,270
    
    
    
    6,013
    
    
    
    (51
    )
    
    
    (51
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,900
    )
    
    
    (4,643
    )
    
    
    1,319Interest income
    
    
    726
    
    
    
    1,518
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4
    
    
    
    
    
    
    
    
    
    
    
    (788
    )
    
    
    730Other, net
    
    
    (500
    )
    
    
    (500
    )
    
    
    (267
    )
    
    
    (267
    )
    
    
    
    
    
    
    
    
    
    
    (89
    )
    
    
    (89
    )
    
    
    
    
    
    
    
    
    
    
    (856
    )Income before income taxes
    
    
    28,758
    
    
    
    30,621
    
    
    
    11,739
    
    
    
    996
    
    
    
    
    
    
    
    9,657
    
    
    
    857
    
    
    
    823
    
    
    
    (3,900
    )
    
    
    (4,643
    )
    
    
    37,454Provision for income taxes
    
    
    (9,005
    )
    
    
    (10,868
    )
    
    
    (2,229
    )
    
    
    (381
    )
    
    
    
    
    
    
    
    
    
    
    (405
    )
    
    
    (390
    )
    
    
    
    
    
    
    
    
    
    
    (11,639
    )Net income
    
    
    19,753
    
    
    
    19,753
    
    
    
    9,510
    
    
    
    615
    
    
    
    
    
    
    
    9,657
    
    
    
    452
    
    
    
    433
    
    
    
    (3,900
    )
    
    
    (4,643
    )
    
    
    25,815Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (4,694
    )
    
    
    
    
    
    
    
    
    
    
    (4,694
    )
    
    
    (1,368
    )
    
    
    (1,368
    )
    
    
    
    
    
    
    
    
    
    
    (6,062
    )Net income attributable to DynCorp
International LLC
    
    $
    19,753
    
    
    $
    19,753
    
    
    $
    4,816
    
    
    $
    615
    
    
    $
    
    
    
    $
    4,963
    
    
    $
    (916
    )
    
    $
    (935
    )
    
    $
    (3,900
    )
    
    $
    (4,643
    )
    
    $
    19,753
 DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Statement of Operations Information
For the Nine Months Ended January 2, 2009
 Subsidiary
    
    
    Subsidiary
    
    
    
    
    
    
    
    
    
    
    Subsidiary
    
    
    SubsidiaryLLC
    
    
    LLC
    
    
    Guarantors
    
    
    Guarantors
    
    
    GLS
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Eliminations
    
    
    ConsolidatedAs previously
    
    
    
    
    
    
    As previously
    
    
    
    
    
    
    Not previously
    
    
    
    
    
    
    As previously
    
    
    
    
    
    
    As previouslypresented
    
    
    As restated
    
    
    presented
    
    
    As restated
    
    
    reported
    
    
    As restated
    
    
    reported
    
    
    As restated
    
    
    reported
    
    
    As restated(Dollars in thousands)Revenue
    
    $
    1,603,886
    
    
    $
    1,603,886
    
    
    $
    684,386
    
    
    $
    165,708
    
    
    $
    
    
    
    $
    518,678
    
    
    $
    296,721
    
    
    $
    296,721
    
    
    $
    (296,721
    )
    
    $
    (296,721
    )
    
    $
    2,288,272Cost of services
    
    
    (1,417,739
    )
    
    
    (1,417,751
    )
    
    
    (630,607
    )
    
    
    (155,476
    )
    
    
    
    
    
    
    (475,119
    )
    
    
    (287,493
    )
    
    
    (287,493
    )
    
    
    296,721
    
    
    
    296,721
    
    
    
    (2,039,118
    )Selling, general and administrative expenses
    
    
    (60,614
    )
    
    
    (60,614
    )
    
    
    (19,249
    )
    
    
    (5,102
    )
    
    
    
    
    
    
    (14,147
    )
    
    
    (487
    )
    
    
    (487
    )
    
    
    
    
    
    
    
    
    
    
    (80,350
    )Depreciation and amortization expense
    
    
    (30,529
    )
    
    
    (29,586
    )
    
    
    
    
    
    
    (942
    )
    
    
    
    
    
    
    
    
    
    
    (65
    )
    
    
    (66
    )
    
    
    
    
    
    
    
    
    
    
    (30,594
    )Operating income
    
    
    95,004
    
    
    
    95,935
    
    
    
    34,530
    
    
    
    4,188
    
    
    
    
    
    
    
    29,412
    
    
    
    8,676
    
    
    
    8,675
    
    
    
    
    
    
    
    
    
    
    
    138,210Interest expense
    
    
    (44,442
    )
    
    
    (44,426
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,488
    )
    
    
    
    
    
    
    (16
    )
    
    
    
    
    
    
    2,488
    
    
    
    (44,442
    )Loss on early extinguishment of debt
    
    
    (4,443
    )
    
    
    (4,443
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,443
    )Equity in
income (loss) of subsidiaries/affiliates
    
    
    25,910
    
    
    
    25,949
    
    
    
    (201
    )
    
    
    (201
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,750
    )
    
    
    (21,789
    )
    
    
    3,959Interest income
    
    
    1,729
    
    
    
    4,234
    
    
    
    6
    
    
    
    5
    
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    (2,488
    )
    
    
    1,751Other, net
    
    
    904
    
    
    
    904
    
    
    
    (111
    )
    
    
    (111
    )
    
    
    
    
    
    
    
    
    
    
    16
    
    
    
    16
    
    
    
    
    
    
    
    
    
    
    
    809Income before income taxes
    
    
    74,662
    
    
    
    78,153
    
    
    
    34,224
    
    
    
    3,881
    
    
    
    
    
    
    
    26,924
    
    
    
    8,708
    
    
    
    8,675
    
    
    
    (21,750
    )
    
    
    (21,789
    )
    
    
    95,844Provision for income taxes
    
    
    (24,058
    )
    
    
    (27,549
    )
    
    
    (3,339
    )
    
    
    (1,457
    )
    
    
    
    
    
    
    
    
    
    
    (2,689
    )
    
    
    (1,080
    )
    
    
    
    
    
    
    
    
    
    
    (30,086
    )Net income
    
    
    50,604
    
    
    
    50,604
    
    
    
    30,885
    
    
    
    2,424
    
    
    
    
    
    
    
    26,924
    
    
    
    6,019
    
    
    
    7,595
    
    
    
    (21,750
    )
    
    
    (21,789
    )
    
    
    65,758Noncontrolling interests
    
    
    
    
    
    
    
    
    
    
    (13,156
    )
    
    
    
    
    
    
    
    
    
    
    (13,156
    )
    
    
    (1,998
    )
    
    
    (1,998
    )
    
    
    
    
    
    
    
    
    
    
    (15,154
    )Net income attributable to DynCorp International LLC
    
    $
    50,604
    
    
    $
    50,604
    
    
    $
    17,729
    
    
    $
    2,424
    
    
    $
    
    
    
    $
    13,768
    
    
    $
    4,021
    
    
    $
    5,597
    
    
    $
    (21,750
    )
    
    $
    (21,789
    )
    
    $
    50,604
  29




---



##### Table of Contents



DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Balance Sheet Information
April 3, 2009
 Subsidiary
    
    
    Subsidiary
    
    
    
    
    
    
    
    
    
    
    Subsidiary
    
    
    SubsidiaryLLC
    
    
    LLC
    
    
    Guarantors
    
    
    Guarantors
    
    
    GLS
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Eliminations
    
    
    ConsolidatedAs previously
    
    
    
    
    
    
    As previously
    
    
    
    
    
    
    Not previously
    
    
    
    
    
    
    As previously
    
    
    
    
    
    
    As previouslypresented
    
    
    As restated
    
    
    presented
    
    
    As restated
    
    
    reported
    
    
    As restated
    
    
    reported
    
    
    As restated
    
    
    reported
    
    
    As restated(Dollars in thousands)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    192,968
    
    
    $
    192,968
    
    
    $
    2,534
    
    
    $
    657
    
    
    $
    
    
    
    $
    1,877
    
    
    $
    4,720
    
    
    $
    4,720
    
    
    $
    
    
    
    $
    
    
    
    $
    200,222Restricted cash
    
    
    5,935
    
    
    
    5,935
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,935Accounts receivable, net
    
    
    389,715
    
    
    
    389,716
    
    
    
    172,900
    
    
    
    28,584
    
    
    
    
    
    
    
    144,315
    
    
    
    1,817
    
    
    
    1,817
    
    
    
    
    
    
    
    
    
    
    
    564,432Intercompany receivables
    
    
    48,786
    
    
    
    12,178
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    43,663
    
    
    
    41,346
    
    
    
    (92,449
    )
    
    
    (53,524
    )
    
    
    GLS note receivable
    
    
    
    
    
    
    7,063
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,063
    )
    
    
    Prepaid expenses and other current assets
    
    
    112,024
    
    
    
    110,549
    
    
    
    10,952
    
    
    
    8,245
    
    
    
    
    
    
    
    4,182
    
    
    
    1,238
    
    
    
    1,238
    
    
    
    
    
    
    
    
    
    
    
    124,214Total current assets
    
    
    749,428
    
    
    
    718,409
    
    
    
    186,386
    
    
    
    37,486
    
    
    
    
    
    
    
    150,374
    
    
    
    51,438
    
    
    
    49,121
    
    
    
    (92,449
    )
    
    
    (60,587
    )
    
    
    894,803Property and equipment, net
    
    
    14,582
    
    
    
    14,582
    
    
    
    3,400
    
    
    
    3,400
    
    
    
    
    
    
    
    
    
    
    
    356
    
    
    
    356
    
    
    
    
    
    
    
    
    
    
    
    18,338Goodwill
    
    
    398,559
    
    
    
    398,559
    
    
    
    21,621
    
    
    
    21,621
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    420,180Tradename
    
    
    18,318
    
    
    
    18,318
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,318Other intangibles, net
    
    
    128,833
    
    
    
    136,093
    
    
    
    13,886
    
    
    
    6,626
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    142,719Investment in subsidiaries
    
    
    64,380
    
    
    
    72,020
    
    
    
    589
    
    
    
    589
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (64,969
    )
    
    
    (72,609
    )
    
    
    Other assets, net
    
    
    44,762
    
    
    
    44,288
    
    
    
    94
    
    
    
    474
    
    
    
    
    
    
    
    94
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    44,856Total assets
    
    $
    1,418,862
    
    
    $
    1,402,269
    
    
    $
    225,976
    
    
    $
    70,196
    
    
    $
    
    
    
    $
    150,468
    
    
    $
    51,794
    
    
    $
    49,477
    
    
    $
    (157,418
    )
    
    $
    (133,196
    )
    
    $
    1,539,214LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Current portion of long-term debt
    
    $
    30,540
    
    
    $
    30,540
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    30,540Accounts payable
    
    
    96,574
    
    
    
    68,842
    
    
    
    63,132
    
    
    
    3,522
    
    
    
    
    
    
    
    87,342
    
    
    
    713
    
    
    
    713
    
    
    
    
    
    
    
    
    
    
    
    160,419Accrued payroll and employee costs
    
    
    69,220
    
    
    
    69,220
    
    
    
    32,965
    
    
    
    7,169
    
    
    
    
    
    
    
    25,796
    
    
    
    35,808
    
    
    
    35,808
    
    
    
    
    
    
    
    
    
    
    
    137,993Intercompany payables
    
    
    30,207
    
    
    
    41,346
    
    
    
    62,242
    
    
    
    11,805
    
    
    
    
    
    
    
    373
    
    
    
    
    
    
    
    
    
    
    
    (92,449
    )
    
    
    (53,524
    )
    
    
    GLS note payable
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,063
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,063
    )
    
    
    Other accrued liabilities
    
    
    94,333
    
    
    
    94,333
    
    
    
    14,711
    
    
    
    5,302
    
    
    
    
    
    
    
    9,409
    
    
    
    2,546
    
    
    
    2,546
    
    
    
    
    
    
    
    
    
    
    
    111,590Income
taxes payable and deferred income taxes
    
    
    13,615
    
    
    
    13,615
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    649
    
    
    
    649
    
    
    
    
    
    
    
    
    
    
    
    14,264Total current liabilities
    
    
    334,489
    
    
    
    317,896
    
    
    
    173,050
    
    
    
    27,798
    
    
    
    
    
    
    
    129,983
    
    
    
    39,716
    
    
    
    39,716
    
    
    
    (92,449
    )
    
    
    (60,587
    )
    
    
    454,806Long-term debt, less current portion
    
    
    569,372
    
    
    
    569,372
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    569,372Other long-term liabilities
    
    
    6,744
    
    
    
    6,744
    
    
    
    35
    
    
    
    28
    
    
    
    
    
    
    
    7
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,779Total equity
    
    
    508,257
    
    
    
    508,257
    
    
    
    52,891
    
    
    
    42,370
    
    
    
    
    
    
    
    20,478
    
    
    
    12,078
    
    
    
    9,761
    
    
    
    (64,969
    )
    
    
    (72,609
    )
    
    
    508,257Total liabilities and members equity
    
    $
    1,418,862
    
    
    $
    1,402,269
    
    
    $
    225,976
    
    
    $
    70,196
    
    
    $
    
    
    
    $
    150,468
    
    
    $
    51,794
    
    
    $
    49,477
    
    
    $
    (157,418
    )
    
    $
    (133,196
    )
    
    $
    1,539,214
  30




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##### Table of Contents



DynCorp International LLC and Subsidiaries
Unaudited Condensed Consolidating Statement of Cash Flow Information
For the Nine Months Ended January 2, 2009
 Subsidiary
    
    
    Subsidiary
    
    
    
    
    
    
    
    
    
    
    Subsidiary
    
    
    SubsidiaryLLC
    
    
    LLC
    
    
    Guarantors
    
    
    Guarantors
    
    
    GLS
    
    
    GLS
    
    
    Non-Guarantors
    
    
    Non-Guarantors
    
    
    Eliminations
    
    
    Eliminations
    
    
    ConsolidatedAs previously
    
    
    
    
    
    
    As previously
    
    
    
    
    
    
    Not previously
    
    
    
    
    
    
    As previously
    
    
    
    
    
    
    As previouslypresented
    
    
    As restated
    
    
    presented
    
    
    As restated
    
    
    reported
    
    
    As restated
    
    
    reported
    
    
    As restated
    
    
    reported
    
    
    As restated(Dollars in thousands)Net cash provided by (used in) operating activities
    
    $
    92,578
    
    
    $
    63,323
    
    
    $
    (41,000
    )
    
    $
    (8,060
    )
    
    $
    
    
    
    $
    (6,587
    )
    
    $
    18,617
    
    
    $
    21,519
    
    
    $
    
    
    
    $
    
    
    
    $
    70,195Cash flows from investing activities:Purchase of property, equipment & computer software
    
    
    (5,041
    )
    
    
    (5,041
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,041
    )Other investing cash flows
    
    
    (17,029
    )
    
    
    (17,029
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,753
    )
    
    
    
    
    
    
    18,753
    
    
    
    (17,029
    )Net cash used in investing activities
    
    
    (22,070
    )
    
    
    (22,070
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (18,753
    )
    
    
    
    
    
    
    18,753
    
    
    
    (22,070
    )Cash flows from financing activities:Net transfers from (to) Parent/Sub
    
    
    (26,519
    )
    
    
    2,736
    
    
    
    42,370
    
    
    
    4,918
    
    
    
    
    
    
    
    11,099
    
    
    
    (15,851
    )
    
    
    
    
    
    
    
    
    
    
    (18,753
    )
    
    
    Borrowings on long-term debt
    
    
    323,751
    
    
    
    323,751
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    323,751Payments on long-term debt
    
    
    (301,129
    )
    
    
    (301,129
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (301,129
    )Other financing activities
    
    
    (5,546
    )
    
    
    (5,546
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,546
    )Net cash (used in) provided by financing activities
    
    
    (9,443
    )
    
    
    19,812
    
    
    
    42,370
    
    
    
    4,918
    
    
    
    
    
    
    
    11,099
    
    
    
    (15,851
    )
    
    
    
    
    
    
    
    
    
    
    (18,753
    )
    
    
    17,076Net increase (decrease) in cash and cash equivalents
    
    
    61,065
    
    
    
    61,065
    
    
    
    1,370
    
    
    
    (3,142
    )
    
    
    
    
    
    
    4,512
    
    
    
    2,766
    
    
    
    2,766
    
    
    
    
    
    
    
    
    
    
    
    65,201Cash and cash equivalents, beginning of period
    
    
    79,484
    
    
    
    79,484
    
    
    
    3,835
    
    
    
    3,782
    
    
    
    
    
    
    
    53
    
    
    
    2,060
    
    
    
    2,060
    
    
    
    
    
    
    
    
    
    
    
    85,379Cash and cash equivalents, end of period
    
    $
    140,549
    
    
    $
    140,549
    
    
    $
    5,205
    
    
    $
    640
    
    
    $
    
    
    
    $
    4,565
    
    
    $
    4,826
    
    
    $
    4,826
    
    
    $
    
    
    
    $
    
    
    
    $
    150,580
  Note 11  Related Parties, Joint Ventures and Variable Interest Entities
 Management Fee
 2,
 Joint Ventures
    31




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##### Table of Contents



Variable Interest Entities
    Note 12Collaborative Arrangement
  Collaborative Arrangements
  Note 13Segment Information
   Global Stabilization and Development Solutions, or GSDS
 Global Platform Support Solutions, or GPSS
 Global Linguist Solutions, or GLS
  32




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##### Table of Contents



Three Months EndedJanuary 1, 2010
    
    
    January 2, 2009RevenueGlobal Stabilization and Development Solutions
    
    $
    426,587
    
    
    $
    265,240Global Platform Support Solutions
    
    
    310,698
    
    
    
    329,832Global Linguist Solutions
    
    
    177,457
    
    
    
    198,951Other/Elimination
    
    
    228
    
    
    
    (1,696
    )Total revenue
    
    $
    914,970
    
    
    $
    792,327Operating IncomeGlobal Stabilization and Development Solutions
    
    $
    13,355
    
    
    $
    19,003Global Platform Support Solutions
    
    
    24,104
    
    
    
    22,618Global Linguist Solutions
    
    
    11,931
    
    
    
    9,962Total operating income
    
    $
    49,390
    
    
    $
    51,583Depreciation and amortizationGlobal Stabilization and Development Solutions
    
    $
    5,712
    
    
    $
    4,905Global Platform Support Solutions
    
    
    4,651
    
    
    
    4,957Global Linguist Solutions
    
    
    167
    
    
    
    167Total depreciation and amortization
    
    $
    10,530
    
    
    $
    10,029
 Nine months EndedJanuary 1, 2010
    
    
    January 2, 2009RevenueGlobal Stabilization and Development Solutions
    
    $
    1,047,193
    
    
    $
    798,779Global Platform Support Solutions
    
    
    898,859
    
    
    
    974,810Global Linguist Solutions
    
    
    574,205
    
    
    
    518,678Other/Elimination
    
    
    1,262
    
    
    
    (3,995
    )Total revenue
    
    $
    2,521,519
    
    
    $
    2,288,272Operating IncomeGlobal Stabilization and Development Solutions
    
    $
    49,633
    
    
    $
    43,009Global Platform Support Solutions
    
    
    69,814
    
    
    
    66,645Global Linguist Solutions
    
    
    34,995
    
    
    
    28,556Total operating income
    
    $
    154,442
    
    
    $
    138,210Depreciation and amortizationGlobal Stabilization and Development Solutions
    
    $
    15,613
    
    
    $
    14,858Global Platform Support Solutions
    
    
    14,818
    
    
    
    15,207Global Linguist Solutions
    
    
    482
    
    
    
    529Total depreciation and amortization
    
    $
    30,913
    
    
    $
    30,594
 As ofJanuary 1, 2010
    
    
    April 3, 2009AssetsGlobal Stabilization and Development Solutions
    
    $
    861,373
    
    
    $
    594,207Global Platform Support Solutions
    
    
    544,779
    
    
    
    510,583Global Linguist Solutions
    
    
    136,637
    
    
    
    152,090Corporate (1)
    
    
    123,717
    
    
    
    282,334Total assets
    
    $
    1,666,506
    
    
    $
    1,539,214
 (1)
    
    Corporate assets primarily include cash, deferred income taxes, and deferred
debt issuance cost.  33




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##### Table of Contents



Note 14Fair Value of Financial Assets and Liabilities
 Fair Value Measurements and Disclosures
 
    
    Level 1, defined as observable inputs such as quoted prices in active markets;
 
    
    Level 2, defined as inputs other than quoted prices in active markets that are
either directly or indirectly observable; and
 
    
    Level 3, defined as unobservable inputs in which little or no market data exists,
therefore requiring an entity to develop its own assumptions.
   Fair Value Measurements at Reporting Date UsingQuoted Prices inBook value of financial
    
    
    Active Markets for
    
    
    Significant Other
    
    
    Significantassets/(liabilities) as of
    
    
    Identical Assets
    
    
    Observable Inputs
    
    
    Unobservable Inputs(amounts in thousands)
    
    January 1, 2010
    
    
    (Level 1)
    
    
    (Level 2)
    
    
    (Level 3)AssetsCash equivalents(1)
    
    $
    91,572
    
    
    $
    91,572
    
    
    $
    
    
    
    $
    Total assets measured at fair
value
    
    $
    91,572
    
    
    $
    91,572
    
    
    $
    
    
    
    $
    LiabilitiesContingent earn-out
consideration
    
    $
    2,778
    
    
    $
    
    
    
    $
    
    
    
    $
    2,778Interest rate derivatives
    
    $
    3,954
    
    
    $
    
    
    
    $
    3,954
    
    
    $
    Total liabilities measured at
fair value
    
    $
    6,732
    
    
    $
    
    
    
    $
    3,954
    
    
    $
    2,778
 (1)
    
    Includes cash equivalents and restricted cash  34




---



##### Table of Contents



1, 2010.
 
 Contingent Earn-Out(amounts in thousands)
    
    ConsiderationBeginning balance
    
    $
    Total gains or losses (realized/unrealized)
included in earnings (or changes in net assets)
    
    
    71Purchases, issuances, and settlements
    
    
    2,707Transfers in and/or out of Level 3
    
    
    Ending balance
    
    $
    2,778The amount of total gains or losses for the period
included in earnings (or changes in net assets)
attributable to the change in unrealized gains or
losses relating to assets still held at the reporting date
    
    $
    71
 Note 15Acquisition
    Purchase(Amounts in thousands)
    
    ElementsCash paid for acquisition at closing
    
    $
    38,573Final working capital adjustment paid during the third quarter of fiscal year 2010
    
    
    1,094Fair value of contingent earn-out consideration payable in fiscal year 2011
    
    
    2,707Total purchase price
    
    $
    42,374
 Business
Combinations.
 Reconciliation(Amounts in thousands)
    
    to GoodwillTotal purchase price
    
    $
    42,374Cash acquired
    
    
    (1,762
    )Receivables
    
    
    (5,674
    )Other assets
    
    
    (4,326
    )Identifiable intangible assets
    
    
    (12,352
    )Earn-out consideration liability
    
    
    3,379Other liabilities assumed
    
    
    6,537Goodwill
    
    $
    28,176
  35




---



##### Table of Contents



Weighted Average(Amounts in thousands)
    
    Useful Life
    
    AmountCustomer relationships
    
    7.5
    
    $
    2,827Training materials
    
    10
    
    
    6,886Software
    
    10
    
    
    2,046Non-compete agreements
    
    2
    
    
    212Tradename
    
    5
    
    
    381$
    12,352
      36




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##### Table of Contents



Note 16Subsequent Events
     Business
Combinations.
   
 ITEM 2.
    
    MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
  COMPANY OVERVIEW
   37




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##### Table of Contents



Strategic Business Areas and Service Offerings
  Global Stabilization and Development Solutions
  Security & Training
 
    
    CivPol  This SBA provides international policing and police training, judicial
support, immigration support and base operations.
 
    
    Security & Mentoring  This SBA provides senior advisors and mentors to foreign
governmental agencies. In addition, it provides security and personal protection for
diplomats and governmental senior officials.
 Contingency Support and Operations
 
    
    LOGCAP IV  This SBA supports U.S. military operations and maintenance support,
including but not limited to: construction services, facilities management, electrical
power, water, sewage and waste management, laundry operations, food services and
transportation motor pool operations.
 
    
    Contingency Support & Operations  This SBA provides peace-keeping logistics
support, humanitarian relief, weapons removal and abatement, worldwide contingency
planning and other rapid response services. In addition, it offers inventory
procurement and tracking services, property control, data entry and mobile repair
services. Furthermore, this SBA provides facility and equipment maintenance and control
and custodial and administrative services.
  Infrastructure
 
    
    Infrastructure  This SBA provides civil, electrical, environmental and mechanical
engineering and construction management services.
 Intelligence Training and Solutions
 
    
    Intelligence Training & Solutions  This new SBA was created as a result of the
acquisition of Phoenix to provide proprietary training courses, management consulting
and augmentation services to the intelligence community. In addition, this SBA expands
our services to the intelligence community and national security clients.
  38




---



##### Table of Contents



Global Platform Support Solutions
  Aviation
 
    
    Aviation Life Cycle Support  Provides worldwide support of U.S. Army, Air Force and
Navy fixed wing assets. Aircraft are deployed throughout the U.S., Europe, Asia, South
America and the Middle East. This includes flight line and depot level maintenance
consisting of scheduled and unscheduled events. Specific functions include repair,
overhaul and procurement of components, and procurement of consumable materials and
transportation of materials to and from the operating sites. In addition, the team is
responsible for obsolescence engineering, quality control, inventory management,
avionics upgrades and recovery of downed aircraft.
 
    
    Domestic Aviation Operations and Support  Provides aircraft fleet maintenance and
modification services, ground vehicle maintenance and modification services, pilot and
maintenance training, logistics support, air traffic control services, base and depot
operations, program management and engineering services. Additionally, this SBA
provides aerial firefighting services. These services are provided in the U.S.
 
    
    Field Service Operations  Provides worldwide maintenance, modification, repair, and
logistics support on aircraft, weapons systems, and related support equipment to the
DoD and other U.S. government agencies. Contract Field Teams (CFT) is the most
significant program in our Field Service Operations SBA. We have provided CFT services
for over 58 years. This program deploys highly mobile, quick-response field teams to
customer locations to supplement a customers workforce.
 
    
    International Aviation Operations and Support  Provides aircraft fleet maintenance
and modification services, ground vehicle maintenance and modification services, pilot
and maintenance training, logistics support, air traffic control services, air
transportation, base and depot operations, program management and engineering services.
These services are provided internationally.
 
    
    INL Air Wing  Conducts foreign assistance programs to reduce the flow of
international narcotics.
 Land Systems
 
    
    Land Systems  This SBA provides maintenance, operations, support, life extension,
engineering, marine services and program management services primarily for ground
vehicles and docked ships. This includes the Mine Resistant Ambush Protected Vehicles
Logistics Support (MRAP) contract.
 Global Linguist Solutions
 Global Linguist Solutions
 CURRENT OPERATING CONDITIONS AND OUTLOOK
  Notable Events for the nine months ended January 1, 2010
 
    
    The LOGCAP IV task order in southern Afghanistan with an estimated value of
approximately $600 million was awarded in July 2009 and ramp-up activities began in
September 2009.
 
    
    In September 2009, we were awarded a contract by the U.S. Air Force to provide aircraft
maintenance support at Sheppard Air Force Base. The value of the contract is $31.2 million
for the base period, and a potential maximum value of $230 million over seven years, if all
options are exercised. Operations started ramping up in October 2009.
  39




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##### Table of Contents




    
    We were awarded a WPPS task order that was originally expected to ramp-up in the second
quarter of fiscal year 2010, but due to changes in customer requirements was delayed. Most
of the services are now being delivered under the INL Air Wing program, which commenced in
the fourth quarter of fiscal year 2010.
 
    
    During the second quarter, we purchased helicopters in support of our new WPPS air
services task order. Given the availability of customer assets to support this program, we
mutually agreed to a task order modification under which the customer will now supply its
own helicopters. As a result, we plan to utilize all but three of the purchased helicopter
assets on another program. We have sold one and plan to sell the remaining two helicopters
that we do not intend to use in other programs.
 
    
    During the nine months ended January 1, 2010, we continued to encounter cost overruns in
our Afghanistan construction projects, within our infrastructure service offering, due to
significant challenges including the deteriorating security environment and issues with
getting equipment through customs in Afghanistan. The nine months ended January 1, 2010
results included a loss on Afghanistan construction of
$10.0 million, including $0.8
million related to the third fiscal quarter. We expect that our firm fixed-price
Afghanistan construction contracts will continue to operate at a loss or at margins
approaching zero over the contract terms. Accordingly, we do not expect to bid on any
similar firm fixed-price contracts without revised terms and conditions.
 
    
    On the GLS program, we completed negotiations with the customer to modify our largest
task order to include a ceiling for recoverable cost of $752 million, resulting in a
cumulative reduction to revenue of approximately $6.0 million during the nine months ended
January 1, 2010. In connection with these negotiations, our customer exercised another
option under the task order covering a period from December 2009 to June 2010.
 
    
    We purchased Phoenix Consulting Group, Inc. on October 19, 2009. See Note 15 
Acquisitionfor additional information concerning this acquisition.
 
    
    We have historically participated in a collaborative arrangement with two other partners
on LOGCAP IV. In November 2009, a U.S. grand jury indicted one of our collaborative
partners, Agility, on charges of fraud and conspiracy alleging that it overcharged the U.S.
Army on $8.5 billion worth of contracts to provide food to soldiers in Iraq, Kuwait and
Jordan. Although Agility is associated with our LOGCAP IV collaborative arrangement, these
allegations were in no way related to the work performed under LOGCAP IV. Effective
December 16, 2009 we removed Agility as a collaborative partner on the LOGCAP IV contract
and terminated the work under existing task orders. We have transitioned Agilitys
responsibilities on our current task orders with no adverse affect to us.
 
    
    On December 16, 2009, we filed a pre-award protest with the Government Accountability
Office (GAO) concerning the planned procurement of training and mentoring of police and
government personnel in Afghanistan by the DoD through task orders issued by the U.S. Army
Space and Missile Defense Command Counter-Narcoterrorism Technology Program Office
(CNTPO). Under a CNTPO contract vehicle, we would be unable to bid on future CivPol task
orders in Afghanistan. As we are the incumbent contractor currently performing the work, we
believe it is in the customers best interest to allow us to bid on such work. We expect to
learn the result of our bid protest in March 2010.
 CONTRACT TYPES
  
    
    Fixed-Price Type Contracts:In a fixed-price contract, the price is not subject to
adjustment based on costs incurred, which can favorably or adversely impact our
profitability depending upon our execution in performing the contracted service.
Fixed-price contracts received by us include firm fixed-price, fixed-price with economic
adjustment, and fixed-price incentive.
 
    
    Time-and-Materials Type Contracts:A time-and-materials type contract provides for
acquiring supplies or services on the basis of direct labor hours at fixed hourly/daily
rates plus materials at cost.
 
    
    Cost-Reimbursement Type Contracts:Cost-reimbursement type contracts provide for
payment of allowable
incurred costs, to the extent prescribed in the contract, plus a fixed-fee, award-fee or
incentive-fee. Award-fees or incentive-fees are generally based upon various objective and
subjective criteria, such as aircraft mission capability rates and meeting cost targets.
  40




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##### Table of Contents



Three Months Ended
    
    
    Nine months EndedJanuary 1, 2010
    
    

January 2, 2009
    
    

January 1, 2010
    
    

January 2, 2009Fixed-Price
    
    
    26.6
    %
    
    
    23.6
    %
    
    
    26.4
    %
    
    
    27.6
    %Time-and-Materials
    
    
    14.8
    %
    
    
    23.1
    %
    
    
    17.7
    %
    
    
    24.4
    %Cost-Reimbursement
    
    
    58.6
    %
    
    
    53.3
    %
    
    
    55.9
    %
    
    
    48.0
    %Total
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
    
    
    100
    %
  BACKLOG
    January 1, 2010
    
    
    April 3, 2009Funded Backlog
    
    $
    1,686
    
    
    $
    1,431Unfunded Backlog
    
    
    4,451
    
    
    
    4,867Total Backlog
    
    $
    6,137
    
    
    $
    6,298
   41




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##### Table of Contents



ESTIMATED REMAINING CONTRACT VALUE
  RESULTS OF OPERATIONS
  Consolidated  Three and Nine months Ended January 1, 2010 Compared to Three and Nine months Ended
January 2, 2009.
  Three Months Ended(Dollars in thousands)
    
    January 1, 2010
    
    
    January 2, 2009Revenue
    
    $
    914,970
    
    
    
    100.0
    %
    
    $
    792,327
    
    
    
    100.00
    %Cost of services
    
    
    (822,700
    )
    
    
    (89.9
    %)
    
    
    (704,210
    )
    
    
    (88.9
    %)Selling, general and administrative expenses
    
    
    (32,350
    )
    
    
    (3.5
    %)
    
    
    (26,505
    )
    
    
    (3.3
    %)Depreciation and amortization expense
    
    
    (10,530
    )
    
    
    (1.2
    %)
    
    
    (10,029
    )
    
    
    (1.3
    %)Operating income
    
    
    49,390
    
    
    
    5.4
    %
    
    
    51,583
    
    
    
    6.5
    %Interest expense
    
    
    (13,655
    )
    
    
    (1.5
    %)
    
    
    (15,322
    )
    
    
    (2.0
    %)Earnings from affiliates
    
    
    1,278
    
    
    
    0.2
    %
    
    
    1,319
    
    
    
    0.2
    %Interest income
    
    
    67
    
    
    
    0.0
    %
    
    
    730
    
    
    
    0.1
    %Other income (loss), net
    
    
    285
    
    
    
    0.0
    %
    
    
    (856
    )
    
    
    (0.1
    %)Income before taxes
    
    
    37,365
    
    
    
    4.1
    %
    
    
    37,454
    
    
    
    4.7
    %Provision for income taxes
    
    
    (10,493
    )
    
    
    (1.2
    %)
    
    
    (11,639
    )
    
    
    (1.4
    %)Net income
    
    
    26,872
    
    
    
    2.9
    %
    
    
    25,815
    
    
    
    3.3
    %Noncontrolling interests
    
    
    (6,444
    )
    
    
    (0.7
    %)
    
    
    (6,062
    )
    
    
    (0.8
    %)Net income attributable to DynCorp International LLC
    
    $
    20,428
    
    
    
    2.2
    %
    
    $
    19,753
    
    
    
    2.5
    %
 Nine months Ended(Dollars in thousands)
    
    January 1, 2010
    
    
    January 2, 2009Revenue
    
    $
    2,521,519
    
    
    
    100.0
    %
    
    $
    2,288,272
    
    
    
    100.0
    %Cost of services
    
    
    (2,249,072
    )
    
    
    (89.2
    %)
    
    
    (2,039,118
    )
    
    
    (89.1
    %)Selling, general and administrative expenses
    
    
    (87,092
    )
    
    
    (3.5
    %)
    
    
    (80,350
    )
    
    
    (3.5
    %)Depreciation and amortization expense
    
    
    (30,913
    )
    
    
    (1.2
    %)
    
    
    (30,594
    )
    
    
    (1.4
    %)Operating income
    
    
    154,442
    
    
    
    6.1
    %
    
    
    138,210
    
    
    
    6.0
    %Interest expense
    
    
    (41,956
    )
    
    
    (1.7
    %)
    
    
    (44,442
    )
    
    
    (1.9
    %)Loss on early extinguishment of debt
    
    
    (146
    )
    
    
    (0.0
    %)
    
    
    (4,443
    )
    
    
    (0.2
    %)Earnings from affiliates
    
    
    3,859
    
    
    
    0.2
    %
    
    
    3,959
    
    
    
    0.2
    %Interest income
    
    
    509
    
    
    
    0.0
    %
    
    
    1,751
    
    
    
    0.1
    %Other income, net
    
    
    44
    
    
    
    0.0
    %
    
    
    809
    
    
    
    0.0
    %Income before taxes
    
    
    116,752
    
    
    
    4.6
    %
    
    
    95,844
    
    
    
    4.2
    %Provision for income taxes
    
    
    (36,421
    )
    
    
    (1.4
    %)
    
    
    (30,086
    )
    
    
    (1.3
    %)Net income
    
    
    80,331
    
    
    
    3.2
    %
    
    
    65,758
    
    
    
    2.9
    %Noncontrolling interests
    
    
    (18,703
    )
    
    
    (0.7
    %)
    
    
    (15,154
    )
    
    
    (0.7
    %)Net income attributable to DynCorp International LLC
    
    $
    61,628
    
    
    
    2.4
    %
    
    $
    50,604
    
    
    
    2.2
    %
  42




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##### Table of Contents



Revenue 
 Cost of services 
 Selling, general and administrative expenses (SG&A) 
 Depreciation and amortization 
 Interest expense 
 Income tax expense
  43




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Results by Segment  Three Months Ended January 1, 2010 Compared to Three Months Ended January 2,
2009
  For the Three Months Ended(Dollars in thousands)
    
    January 1, 2010
    
    
    January 2, 2009RevenueGlobal Stabilization and Development Solutions
    
    $
    426,587
    
    
    
    46.6
    %
    
    $
    265,240
    
    
    
    33.5
    %Global Platform Support Solutions
    
    
    310,698
    
    
    
    34.0
    %
    
    
    329,832
    
    
    
    41.6
    %Global Linguist Solutions
    
    
    177,457
    
    
    
    19.4
    %
    
    
    198,951
    
    
    
    25.1
    %Other/elimination
    
    
    228
    
    
    
    (0.0
    %)
    
    
    (1,696
    )
    
    
    (0.2
    %)Consolidated
    
    $
    914,970
    
    
    
    100.0
    %
    
    $
    792,327
    
    
    
    100.0
    %Operating IncomeGlobal Stabilization and Development Solutions
    
    $
    13.355
    
    
    
    3.1
    %
    
    $
    19,003
    
    
    
    7.2
    %Global Platform Support Solutions
    
    
    24,104
    
    
    
    7.8
    %
    
    
    22,618
    
    
    
    6.9
    %Global Linguist Solutions
    
    
    11,931
    
    
    
    6.7
    %
    
    
    9,962
    
    
    
    5.0
    %Consolidated
    
    $
    49,390
    
    
    
    5.4
    %
    
    $
    51,583
    
    
    
    6.5
    %
 Global Stabilization and Development Solutions
 Revenue 
     44




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##### Table of Contents



Operating Income
 Global Platform Support Solutions
 Revenue 
   Operating Income 
 Global Linguist Solutions
 Revenue 
 Operating Income 
  45




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##### Table of Contents



Results by Segment  Nine months Ended January 1, 2010 as Compared to the Nine months Ended January
2, 2009
  For the Nine months Ended(Dollars in thousands)
    
    January 1, 2010
    
    
    January 2, 2009RevenueGlobal Stabilization and Development Solutions
    
    $
    1,047,193
    
    
    
    41.5
    %
    
    $
    798,779
    
    
    
    34.9
    %Global Platform Support Solutions
    
    
    898,859
    
    
    
    35.6
    %
    
    
    974,810
    
    
    
    42.6
    %Global Linguist Solutions
    
    
    574,205
    
    
    
    22.8
    %
    
    
    518,678
    
    
    
    22.7
    %Other/elimination
    
    
    1,262
    
    
    
    0.1
    %
    
    
    (3,995
    )
    
    
    (0.2
    %)Consolidated
    
    $
    2,521,519
    
    
    
    100.0
    %
    
    $
    2,288,272
    
    
    
    100.0
    %Operating IncomeGlobal Stabilization and Development Solutions
    
    $
    49,633
    
    
    
    4.7
    %
    
    $
    43,009
    
    
    
    5.4
    %Global Platform Support Solutions
    
    
    69,814
    
    
    
    7.8
    %
    
    
    66,645
    
    
    
    6.8
    %Global Linguist Solutions
    
    
    34,995
    
    
    
    6.1
    %
    
    
    28,556
    
    
    
    5.5
    %Consolidated
    
    $
    154,442
    
    
    
    6.1
    %
    
    $
    138,210
    
    
    
    6.0
    %
 Global Stabilization and Development Solutions
 Revenue 
     Operating Income 
  46




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Global Platform Support Solutions
 Revenue 
   Operating Income 
 Global Linguist Solutions
    47




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##### Table of Contents



LIQUIDITY AND CAPITAL RESOURCES
       Cash Flow Analysis
 Nine months Ended(Dollars in thousands)
    
    January 1, 2010
    
    
    January 2, 2009Net Cash provided by operating activities
    
    $
    15,579
    
    
    $
    70,195Net Cash used in investing activities
    
    
    (77,290
    )
    
    
    (22,070
    )Net Cash (used in) provided by financing activities
    
    
    (71,429
    )
    
    
    17,076
    48




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##### Table of Contents



Financing
     Debt Covenants and Other Matters
   OFF BALANCE SHEET ARRANGEMENTS
  CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   49




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##### Table of Contents



Interim Goodwill Assessment
     ACCOUNTING DEVELOPMENTS
  
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
   50




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##### Table of Contents



ITEM 4. CONTROLS AND PROCEDURES
 Disclosure Controls and Procedures
  Changes in Internal Control over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 ITEM 1. LEGAL MATTERS
   
 ITEM 1A. RISK FACTORS
  If we fail to integrate the businesses we acquire or successfully manage the acquisition
process, our business operations may be disrupted, our Parents stockholder value may be diluted,
management attention may be diverted and our results of operations may be harmed.
  
    
    the difficulty of integrating the operations and personnel of the acquired
companies;
    
    the inability of our management to maximize our financial and strategic position by
the successful incorporation of acquired personnel into our service offerings;
    
    we may not realize anticipated synergies or financial growth;
  51




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##### Table of Contents




    
    we may assume material liabilities that were not identified during due diligence,
including potential regulatory penalties resulting from the acquisition targets
previous activities;
    
    difficulty maintaining uniform standards, controls, procedures and policies, with
respect to accounting matters and otherwise;
    
    the potential loss of key employees of acquired companies;
    
    the impairment of relationships with employees and customers as a result of changes
in management and operational structure; and
    
    acquisitions may require us to invest significant amounts of cash resulting in
dilution of our Parents stockholder value.
  
 ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
  
 ITEM 3. DEFAULTS UPON SENIOR SECURITIES
  
 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
  
 ITEM 5. OTHER INFORMATION
  
 ITEM 6. EXHIBITS
 ExhibitNumber
    
    Description31.1*
    
    Certification of Chief Executive Officer
pursuant to Section 302 of the Sarbanes-Oxley Act
of 200231.2*
    
    Certification of Chief Financial Officer
pursuant to Section 302 of the Sarbanes-Oxley Act
of 200232.1*
    
    Certification of Chief Executive Officer
pursuant to Section 906 of the Sarbanes-Oxley Act
of 200232.2*
    
    Certification of Chief Financial Officer
pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002
 *
    
    Filed herewith. 
 SIGNATURES
  DYNCORP INTERNATIONAL LLC/s/ Michael J. ThorneMichael J. ThorneSenior Vice President and Chief Financial Officer
Date: February 16, 2010  52




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##### Table of Contents



GLOBAL LINGUIST SOLUTIONS LLC
 TABLE OF CONTENTS
 FINANCIAL STATEMENTS
    
    PageStatements of Operations
    
    
    F-2Balance Sheets
    
    
    F-3Statements of Cash Flows
    
    
    F-4Statements of Members Equity
    
    
    F-5Notes to Financial Statements
    
    
    F-6Managements Discussion and Analysis
    
    
    F-9
  F-1




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##### Table of Contents



GLOBAL LINGUIST SOLUTIONS LLC
 
 UNAUDITED STATEMENTS OF OPERATIONS
 (Amounts in thousands)
 For the Three Months Ended
    
    
    For the Nine Months EndedJanuary 1, 2010
    
    
    January 2, 2009
    
    
    January 1, 2010
    
    
    January 2, 2009Revenue
    
    $
    177,763
    
    
    $
    198,951
    
    
    $
    574,205
    
    
    $
    518,678Cost of services
    
    
    (162,927
    )
    
    
    (183,194
    )
    
    
    (529,329
    )
    
    
    (475,119
    )Selling, general and
administrative expenses
    
    
    (2,774
    )
    
    
    (5,325
    )
    
    
    (9,193
    )
    
    
    (14,147
    )Operating income
    
    
    12,062
    
    
    
    10,432
    
    
    
    35,683
    
    
    
    29,412Interest expense, net
    
    
    (610
    )
    
    
    (775
    )
    
    
    (1,809
    )
    
    
    (2,488
    )Net income
    
    $
    11,452
    
    
    $
    9,657
    
    
    $
    33,874
    
    
    $
    26,924
   F - 2




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##### Table of Contents



GLOBAL LINGUIST SOLUTIONS LLC
 
 UNAUDITED BALANCE SHEETS
 (Amounts in thousands)
 As ofJanuary 1, 2010
    
    
    April 3, 2009ASSETSCurrent assets:Cash and cash equivalents
    
    $
    1,604
    
    
    $
    1,877Accounts receivable, net
    
    
    131,728
    
    
    
    144,315Prepaid expenses and other current assets
    
    
    1,589
    
    
    
    4,182Total current assets
    
    
    134,921
    
    
    
    150,374Other assets, net
    
    
    94
    
    
    
    94Total assets
    
    $
    135,015
    
    
    $
    150,468LIABILITIES AND MEMBERS EQUITYCurrent liabilities:Note payable to DynCorp International LLC, including
accrued interest of $269 and $156, respectively
    
    $
    20,403
    
    
    $
    7,063Accounts payable
    
    
    72,310
    
    
    
    87,342Accrued payroll and employee costs
    
    
    24,792
    
    
    
    25,796Accrued insurance
    
    
    5,828
    
    
    
    6,979Intercompany payables
    
    
    
    
    
    
    373Other accrued liabilities
    
    
    230
    
    
    
    209Customer advances
    
    
    
    
    
    
    2,221Total current liabilities
    
    
    123,563
    
    
    
    129,983Other long-term liabilities
    
    
    
    
    
    
    7Total liabilities
    
    
    123,563
    
    
    
    129,990Members equity:Cumulative earnings before dividend payments to
owners
    
    
    64,873
    
    
    
    30,999Cumulative dividends paid to owners
    
    
    (53,421
    )
    
    
    (10,521
    )Members equity
    
    
    11,452
    
    
    
    20,478Total liabilities and members equity
    
    $
    135,015
    
    
    $
    150,468
   F - 3




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##### Table of Contents



GLOBAL LINGUIST SOLUTIONS LLC
 
 UNAUDITED STATEMENTS OF CASH FLOWS
 (Amounts in thousands)
 For the Nine Months EndedJanuary 1, 2010
    
    
    January 2, 2009Cash flows from operating activitiesNet income
    
    $
    33,874
    
    
    $
    26,924Adjustments
to reconcile net income to net cash provided by (used in) operating activities:Changes in assets and liabilities:Accounts receivable
    
    
    12,585
    
    
    
    (151,588
    )Prepaid expenses and other current assets
    
    
    2,593
    
    
    
    (2,056
    )Accounts payable
    
    
    (15,031
    )
    
    
    92,731Accrued payroll and employee costs
    
    
    (1,004
    )
    
    
    20,912Accrued insurance
    
    
    (1,151
    )
    
    
    4,173Customer advances
    
    
    (2,221
    )
    
    
    Other
    
    
    (245
    )
    
    
    2,317Net cash provided by (used in) operating activities
    
    
    29,400
    
    
    
    (6,587
    )Cash flows from investing activitiesNet cash provided by investing activities
    
    
    
    
    
    
    Cash flows from financing activitiesNet borrowings from DynCorp International LLC
    
    
    13,227
    
    
    
    11,099Payments of dividends to McNeil Technologies
    
    
    (21,021
    )
    
    
    Payments of dividends to DynCorp International LLC
    
    
    (21,879
    )
    
    
    Net cash (used in) provided by financing activities
    
    
    (29,673
    )
    
    
    11,099Net (decrease) increase in cash and cash equivalents
    
    
    (273
    )
    
    
    4,512Cash and cash equivalents, beginning of period
    
    
    1,877
    
    
    
    53Cash and cash equivalents, end of period
    
    $
    1,604
    
    
    $
    4,565Interest paid
    
    $
    1,555
    
    
    $
    2,185
   F - 4




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##### Table of Contents



GLOBAL LINGUIST SOLUTIONS LLC
 
 UNAUDITED STATEMENT OF MEMBERS EQUITY
 (Amounts in thousands)
 Members equity at March 28, 2008
    
    $
    (6,746
    )Net income
    
    
    26,924Members equity at January 2, 2009
    
    $
    20,178Members equity at April 3, 2009
    
    $
    20,478Net income
    
    
    33,874Dividends paid to McNeil
    
    
    (21,021
    )Dividends paid to DI
    
    
    (21,879
    )Members equity at January 1, 2010
    
    $
    11,452
   F - 5




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##### Table of Contents



GLOBAL LINGUIST SOLUTIONS LLC
 
 NOTES TO FINANCIAL STATEMENTS
 Note 1  Basis of Presentation and Accounting Policies
 General
   INSCOM Contract
   Fiscal Periods
  Revenue Recognition
    F - 6




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##### Table of Contents



Operating Segments
  Cash and Cash Equivalents
  Use of Estimates
  Allowance for Doubtful Accounts
  Dividends Paid to Owners
  Income Taxes
   F - 7




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##### Table of Contents



New Accounting Pronouncements
  Note 2Billed and Unbilled Receivables
  (Amounts in thousands)
    
    January 1, 2010
    
    
    April 3, 2009Billed
    
    $
    54,981
    
    
    $
    62,515Unbilled
    
    
    76,747
    
    
    
    81,800Total
    
    $
    131,728
    
    
    $
    144,315
 Note 3  Related Party Loan
  Outstanding
    
    
    Outstanding(amounts in thousands)
    
    Principal
    
    
    Interest
    
    
    TotalBalance at April 3, 2009
    
    $
    6,907
    
    
    $
    156
    
    
    $
    7,063Balance at January 1, 2010
    
    $
    20,134
    
    
    $
    269
    
    
    $
    20,403
 Note 4  Related Party Agreement
  Note 5  Commitments and Contingencies
 Commitments
   Fiscal Year
    
    Real Estate
    
    
    Equipment
    
    
    TotalFourth quarter of fiscal year 2010
    
    $
    413
    
    
    $
    5
    
    
    $
    4182011
    
    
    1,442
    
    
    
    5
    
    
    
    1,4472012
    
    
    1,484
    
    
    
    
    
    
    
    1,4842013
    
    
    1,458
    
    
    
    
    
    
    
    1,4582014
    
    
    330
    
    
    
    
    
    
    
    330Thereafter
    
    
    
    
    
    
    
    
    
    
    $
    5,127
    
    
    $
    10
    
    
    $
    5,137
  Contingencies
   F - 8




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##### Table of Contents



U.S. Government Investigations
  U.S. Government Audits
   Note 6  401(k) Savings Plans
  
 MANAGEMENTS DISCUSSION AND ANALYSIS
  Company Overview
     F - 9




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##### Table of Contents



Competition
  Contractual Obligations
  Fiscal Year
    
    
    2015 &Q4-2010
    
    
    2011
    
    
    2012
    
    
    2013
    
    
    2014
    
    
    Thereafter
    
    
    Total(Dollars in thousands)Contractual obligations:Related party loan(1)
    
    $
    20,134
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    20,134Operating leases(2)
    
    
    418
    
    
    
    1,447
    
    
    
    1,484
    
    
    
    1,458
    
    
    
    330
    
    
    
    
    
    
    
    5,137Interest on indebtedness(3)
    
    
    269
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    269Total contractual obligations
    
    $
    20,821
    
    
    $
    1,447
    
    
    $
    1,484
    
    
    $
    1,458
    
    
    $
    $330
    
    
    $
    
    
    
    $
    25,540
 (1)
    
    For additional information about our related party loan, see Note 3 to our consolidated financial statements.(2)
    
    For additional information about our operating leases, see Note 5 to our consolidated financial statements.(3)
    
    Represents interest expense on the related party loan, see Note 3 to our consolidated financial statements. Results of Operations
 Revenue
   Operating Income
   Liquidity & Cash Flow
  Cash Flow Analysis
 For the Nine Months Ended(Amounts in thousands)
    
    January 1, 2010
    
    
    January 2, 2009Net cash provided by (used in)
operating activities
    
    $
    29,400
    
    
    $
    (6,587
    )Net cash used in investing activities
    
    
    
    
    
    
    Net cash provided by (used in)
financing activities
    
    $
    (29,673
    )
    
    $
    11,099
  F - 10




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F - 11