| Business segments |
Business segments
We have three business segments, Health Services, U.S. Federal Services and Human Services. These segments reflect the way in which historically we have organized and managed the business and is consistent with the manner in which our Chief Executive Officer operated and reviewed the results of the business during the year ended September 30, 2018.
Expenses which are not specifically included in the segments are included in other categories, including amortization of intangible assets, costs incurred in restructuring our U.K. Human Services business, the direct costs of acquisitions and the gain on sale of the K-12 Education business. These costs are excluded from measuring each segment's operating performance.
The results of these segments for the three years ended September 30, 2018 are shown below (in thousands).
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Year ended September 30, |
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2018 |
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2017 |
|
2016 |
Revenue: |
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Health Services |
$ |
1,404,959 |
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$ |
1,380,151 |
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$ |
1,298,304 |
|
U.S. Federal Services |
478,911 |
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|
545,573 |
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|
591,728 |
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Human Services |
508,366 |
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|
525,237 |
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|
513,328 |
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Total |
$ |
2,392,236 |
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$ |
2,450,961 |
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$ |
2,403,360 |
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Gross Profit: |
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Health Services |
$ |
372,628 |
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$ |
347,325 |
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$ |
292,181 |
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U.S. Federal Services |
126,698 |
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|
139,321 |
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|
138,168 |
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Human Services |
95,059 |
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|
125,259 |
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|
131,842 |
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Total |
$ |
594,385 |
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$ |
611,905 |
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$ |
562,191 |
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Selling, general and administrative expense: |
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Health Services |
$ |
136,250 |
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$ |
132,081 |
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$ |
107,155 |
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U.S. Federal Services |
69,312 |
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|
74,345 |
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|
74,792 |
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Human Services |
76,835 |
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|
76,675 |
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|
84,157 |
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Other |
2,844 |
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|
1,492 |
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|
2,987 |
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Total |
$ |
285,241 |
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$ |
284,593 |
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|
$ |
269,091 |
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Operating income: |
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Health Services |
$ |
236,378 |
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$ |
215,244 |
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$ |
185,026 |
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U.S. Federal Services |
57,386 |
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|
64,976 |
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|
63,376 |
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Human Services |
18,224 |
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|
48,584 |
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|
47,685 |
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Amortization of intangible assets |
(10,308 |
) |
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(12,208 |
) |
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(13,377 |
) |
Restructuring costs |
(3,353 |
) |
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(2,242 |
) |
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— |
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Acquisition-related expenses |
(947 |
) |
|
(83 |
) |
|
(832 |
) |
Gain on sale of a business |
— |
|
|
650 |
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|
6,880 |
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Other |
(1,897 |
) |
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(1,409 |
) |
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(2,155 |
) |
Total |
$ |
295,483 |
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$ |
313,512 |
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$ |
286,603 |
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Operating income as a percentage of revenue: |
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Health Services |
16.8 |
% |
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15.6 |
% |
|
14.3 |
% |
U.S. Federal Services |
12.0 |
% |
|
11.9 |
% |
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10.7 |
% |
Human Services |
3.6 |
% |
|
9.2 |
% |
|
9.3 |
% |
Total |
12.4 |
% |
|
12.8 |
% |
|
11.9 |
% |
Depreciation and amortization: |
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Health Services |
$ |
28,613 |
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$ |
29,114 |
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$ |
31,916 |
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U.S. Federal Services |
8,478 |
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|
11,175 |
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|
9,953 |
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Human Services |
14,793 |
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|
15,480 |
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|
16,535 |
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Total |
$ |
51,884 |
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$ |
55,769 |
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$ |
58,404 |
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Acquisition-related expenses are costs of completed business combinations as well as the costs of any unsuccessful transactions. The charges above include costs for the acquisition of General Dynamics Information Technology's citizen engagement center business which were incurred in fiscal year 2018 prior to the transaction closing in fiscal year 2019. Other costs include those related to Revitalised Limited in fiscal year 2017 and both Ascend Management Innovations, LLC (Ascend) and Assessments Australia in fiscal year 2016.
We operate in the United States, the United Kingdom, Australia, Canada, Saudi Arabia and Singapore.
Our revenue was distributed as follows (in thousands):
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Year ended September 30, |
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2018 |
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2017 |
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2016 |
United States |
$ |
1,692,823 |
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$ |
1,765,661 |
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$ |
1,721,261 |
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United Kingdom |
347,026 |
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|
346,342 |
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|
384,649 |
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Australia |
247,850 |
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|
232,434 |
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|
200,539 |
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Rest of World |
104,537 |
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|
106,524 |
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|
96,911 |
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Total |
$ |
2,392,236 |
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$ |
2,450,961 |
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$ |
2,403,360 |
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Identifiable assets for the segments are shown below (in thousands):
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Year Ended
September 30, |
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2018 |
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2017 |
Health Services |
$ |
482,490 |
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$ |
515,850 |
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U.S. Federal Services |
375,807 |
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|
397,824 |
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Human Services |
144,445 |
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|
169,523 |
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Corporate/Other |
459,258 |
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|
267,465 |
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Total |
$ |
1,462,000 |
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$ |
1,350,662 |
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Our long-lived assets, consisting of property and equipment, capitalized software costs and deferred compensation plan assets, were distributed as follows (in thousands):
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Year Ended
September 30, |
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2018 |
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2017 |
United States |
$ |
98,340 |
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$ |
101,530 |
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Australia |
20,545 |
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|
32,165 |
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Canada |
9,504 |
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|
13,670 |
|
United Kingdom |
5,498 |
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|
9,251 |
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Rest of World |
391 |
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|
331 |
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Total |
$ |
134,278 |
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$ |
156,947 |
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