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, 2014

Goodwill and intangible assets

Goodwill and intangible assets

7. Goodwill and intangible assets

Changes in goodwill for the years ended September 30, 2014 and 2013 are as follows (in thousands):

	Health Services			Human Services			Total
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
Adjustment to goodwill acquired with HML		31			—			31
Foreign currency translation		(207	)		(1,065	)		(1,272	)

Balance as of September 30, 2014	$	124,920		$	45,706		$	170,626

There have been no impairment charges in our goodwill.

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

	As of September 30, 2014						As of September 30, 2013
	Cost		Accumulated Amortization		Intangible Assets, net		Cost		Accumulated Amortization		Intangible Assets, net
Customer contracts and relationships	$	42,403	$	7,821	$	34,582	$	39,243	$	3,953	$	35,290
Technology-based intangible assets		9,295		6,910		2,385		9,583		5,974		3,609
Trademarks and trade names		4,374		2,102		2,272		4,421		1,303		3,118
Non-compete arrangements		—		—		—		243		221		22

Total	$	56,072	$	16,833	$	39,239	$	53,490	$	11,451	$	42,039

The intangible assets include $3.4 million of fully amortized technology-based assets still in use. Our intangible assets have a weighted average remaining life of 11.7 years, comprising 12.9 years for customer contracts and relationships, 3.2 years for technology-based intangible assets and 3.0 years for trademarks and trade names. Amortization expense for the years ended September 30, 2014, 2013 and 2012 was $5.9 million, $4.9 million and $2.7 million, respectively. Estimated future amortization expense is estimated as follows (in thousands):

Year ending September 30, 2015	$	5,875
Year ending September 30, 2016		5,613
Year ending September 30, 2017		5,214
Year ending September 30, 2018		4,002
Year ending September 30, 2019		3,042

- 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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