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

Annual report pursuant to Section 13 and 15(d)

Income taxes (Tables)

Income taxes (Tables)

12 Months Ended

Sep. 30, 2015

Components of income from continuing operations before income taxes

Components of income before income taxes (in thousands):

	Year ended September 30,
	2015		2014		2013
Income before income taxes:
United States	$	232,359	$	180,820	$	139,716
Foreign		27,460		46,549		49,306

Income before income taxes	$	259,819	$	227,369	$	189,022

Provision for income taxes

Components of provision for income taxes (in thousands):


	Year ended September 30,
	2015			2014		2013
Current provision:
Federal	$	74,050		$	55,656	$	43,199
State and local		15,332			12,003		11,257
Foreign		9,581			11,416		14,821

Total current provision		98,963			79,075		69,277

Deferred tax expense (benefit):
Federal		2,233			1,750		2,741
State and local		403			181		851
Foreign		(1,829	)		967		(1,196	)

Total deferred tax expense (benefit)		807			2,898		2,396

Provision for income taxes	$	99,770		$	81,973	$	71,673

Reconciliation of tax provision using the federal statutory income tax rate to reported provision

The provision for income taxes differs from that which would have resulted from the use of the federal statutory income tax rate as follows (in thousands):


	Year ended September 30,
	2015			2014			2013
Federal income tax provision at statutory rate of 35%	$	90,937		$	79,579		$	66,158
State income taxes, net of federal benefit		9,847			7,920			8,151
Foreign taxation		(2,208	)		(3,909	)		(3,715	)
Permanent items		1,602			1,286			708
Tax credits		(961	)		(1,623	)		(217	)
Valuation allowances on net operating loss carryforwards		—			(962	)		—
Other		553			(318	)		588

Income tax expense	$	99,770		$	81,973		$	71,673

Significant items comprising the Company's deferred tax assets and liabilities

The significant items comprising our deferred tax assets and liabilities as of September 30, 2015 and 2014 are as follows (in thousands):

	As of September 30,
	2015		2014
Deferred tax assets—current:
Deferred revenue	$	12,320	$	19,815
Costs deductible in future periods		15,467		14,944
Net operating loss carryforwards		777		207
Other		26		—

Total deferred tax assets—current		28,590		34,966

Deferred tax liabilities—current:
Accounts receivable—unbilled		9,598		6,858

Net deferred tax asset—current	$	18,992	$	28,108


Deferred tax assets—non-current:
Net operating loss carryforwards	$	139	$	2,355
Valuation allowance on net operating loss carryforwards		—		—

Net operating loss carryforwards net of valuation reserve		139		2,355
Deferred revenue		9,127		7,089
Stock compensation		4,600		4,100
Costs deductible in future periods		10,429		1,662
Other		441		7,828

Total deferred tax assets—non-current		24,736		23,034

Deferred tax liabilities—non-current
Amortization of goodwill and intangible assets		22,061		20,261
Capitalized software		9,781		12,057
Property and equipment		6,353		10,045
Deferred contract costs		—		1,762
Employee benefit costs		759		—
Other		941		292

Total deferred tax liability—non-current	$	39,895	$	44,417

Net deferred tax liability—non-current	$	15,159	$	21,383

Schedule of reconciliation of the beginning and ending amount of gross unrecognized tax benefits

The reconciliation of the beginning and ending amount of gross unrecognized tax benefits was as follows (in thousands):

	Year Ended September 30,
	2015			2014		2013
Balance at beginning of year	$	812		$	812	$	1,059
Lapse of statute of limitation		(200	)		—		(230	)
Reductions for tax positions of prior years		(83	)		—		(17	)

Balance at end of year	$	529		$	812	$	812