Maximus, Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Goodwill and intangible assets

Goodwill and intangible assets

12 Months Ended

Sep. 30, 2013

Goodwill and intangible assets

Goodwill and intangible assets

7. Goodwill and intangible assets

Changes in goodwill for the years ended September 30, 2013 and 2012 are as follows (in thousands):

	Health Services		Human Services			Total

Balance as of September 30, 2011	$	43,242	$	28,081		$	71,323
Goodwill acquired with PSI		19,898		19,263			39,161
Foreign currency translation		377		1,171			1,548

Balance as of September 30, 2012		63,517		48,515			112,032
Goodwill acquired with HML		58,316		—			58,316
Adjustment to goodwill acquired with PSI		65		64			129
Foreign currency translation		3,198		(1,808	)		1,390

Balance as of September 30, 2013	$	125,096	$	46,771		$	171,867

There have been no impairment charges in our goodwill related to continuing operations.

The following table sets forth the components of intangible assets (in thousands):

	As of September 30, 2013						As of September 30, 2012

	Cost		Accumulated Amortization		Intangible Assets, net		Cost		Accumulated Amortization		Intangible Assets, net
Customer contracts and relationships	$	39,243	$	3,953	$	35,290	$	20,167	$	3,082	$	17,085
Technology-based intangible assets		9,583		5,974		3,609		9,114		4,909		4,205
Trademarks and trade names		4,421		1,303		3,118		4,450		497		3,953
Non-compete arrangements		243		221		22		254		167		87

Total	$	53,490	$	11,451	$	42,039	$	33,985	$	8,655	$	25,330

The intangible assets include $3.4 million of fully amortized technology-based assets still in use by the Company. The Company's intangible assets have a weighted average remaining life of 12.6 years, comprising 14.2 years for customer contracts and relationships, 4.1 years for technology-based intangible assets, 3.9 years for trademarks and trade names and 0.3 years for non-compete arrangements. Amortization expense for the years ended September 30, 2013, 2012 and 2011 was $4.9 million, $2.7 million and $2.2 million, respectively. Future amortization expense is estimated as follows (in thousands):

	Future amortization expense

Year ending September 30, 2014	$	5,322
Year ending September 30, 2015		5,165
Year ending September 30, 2016		4,865
Year ending September 30, 2017		4,466
Year ending September 30, 2018		3,768

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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