Annual report pursuant to Section 13 and 15(d)

Business combinations and disposal (Tables)

v3.19.3
Business combinations and disposal (Tables)
12 Months Ended
Sep. 30, 2019
Business Combinations [Abstract]  
Schedule of assets and liabilities recorded in the Company's financial statements at their fair values at the acquisition date
(dollars in thousands) Estimated purchase price allocation at June 30, 2019 Adjustments Final purchase price allocation at
September 30, 2019
Cash consideration $ 430,699    $ 24    $ 430,723   
Billed and unbilled receivables 142,165    (88)   142,077   
Property and equipment 8,974    4,987    13,961   
Other assets 4,508    22    4,530   
Intangible assets 122,300    —    122,300   
Total identifiable assets acquired 277,947    4,921    282,868   
Accounts payable and other liabilities 31,862    4,923    36,785   
Net identifiable assets acquired 246,085    (2)   246,083   
Goodwill 184,614    26    184,640   
Net assets acquired $ 430,699    $ 24    $ 430,723   
Summary of valuation of the intangible assets acquired
Useful life Fair value
Customer relationships - all contracts except U.S. Census 10 years $ 85,300   
Customer relationship - U.S. Census 2 years 37,000   
Total intangible assets $ 122,300   
Business Acquisition, Pro Forma Information
The following table presents certain results for the years ended September 30, 2019 and 2018, as though the acquisition had occurred on October 1, 2017. The pro forma results below eliminate intercompany transactions, include amortization charges for acquired intangible assets, eliminate pre-acquisition transaction costs and include estimates of interest expense, as well as corresponding changes in our tax charge. This pro forma information is presented for information only. For example, this pro forma information does not include any of our anticipated synergies but does include, in both years shown, a charge of $18.5 million, related to the amortization of the U.S. Census customer relationship intangible asset. Although the U.S. Census contract commenced prior to October 1, 2017, more of the benefit will be recorded in fiscal year 2020. For these and other reasons, this pro forma information is not necessarily indicative of the results if the acquisition had taken place on that date.

Pro forma results for the year ended September 30,
(dollars in thousands, except per share data) 2019 2018
Revenue $ 2,985,244    $ 3,016,823   
Net income 243,968    218,647   
Basic earnings per share attributable to MAXIMUS 3.79    3.34   
Diluted earnings per share attributed to MAXIMUS 3.77    3.32   
Schedule of changes in the carrying amount of goodwill
Changes in goodwill for the years ended September 30, 2019 and 2018 are shown below. Goodwill has been reallocated to conform with our new segment reporting.

(Dollars in thousands) U.S. Health and Human Services U.S. Federal
Services
Outside the U.S. Total
Balance as of September 30, 2017 $ 139,588    $ 228,148    $ 35,240    $ 402,976   
Foreign currency translation —    —    (3,094)   (3,094)  
Balance as of September 30, 2018 139,588    228,148    32,146    399,882   
Acquisition of citizen engagement centers business 24,884    154,470    5,286    184,640   
Acquisition of GT Hiring Solutions —    —    1,347    1,347   
Other —    —    372    372   
Foreign currency translation —    —    (1,772)   (1,772)  
Balance as of September 30, 2019 $ 164,472    $ 382,618    $ 37,379    $ 584,469   
Schedule of components of intangible assets
The following table sets forth the components of intangible assets (in thousands):
  As of September 30, 2019 As of September 30, 2018
  Cost Accumulated
Amortization
Intangible
Assets, net
Cost Accumulated
Amortization
Intangible
Assets, net
Customer contracts and relationships $ 250,455    $ 72,430    $ 178,025    $ 129,113    $ 42,683    $ 86,430   
Technology-based intangible assets 5,613    4,405    1,208    5,750    4,212    1,538   
Trademarks and trade names 4,483    4,466    17    4,496    4,429    67   
Total $ 260,551    $ 81,301    $ 179,250    $ 139,359    $ 51,324    $ 88,035   
Schedule of estimated future amortization expense The estimated future amortization expense for the next five years for the intangible assets held by the Company as of September 30, 2019, is as follows (in thousands):
2020 $ 35,632   
2021 18,582   
2022 16,212   
2023 16,118   
2024 15,994