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

Annual report pursuant to Section 13 and 15(d)

Commitments and contingencies

Commitments and contingencies

12 Months Ended

Sep. 30, 2016

Commitments and Contingencies Disclosure [Abstract]

Performance bonds

Certain contracts require us to provide a surety bond as a guarantee of performance. At September 30, 2016, we had performance bond commitments totaling $23.0 million. These bonds are typically renewed annually and remain in place until the contractual obligations have been satisfied. Although the triggering events vary from contract to contract, in general we would only be liable for the amount of these guarantees in the event of default in our performance of our obligations under each contract, the probability of which we believe is remote.

Operating Leases

We lease office space and equipment under various operating leases. Lease expense for the years ended September 30, 2016, 2015 and 2014 was $75.4 million, $67.1 million and $61.8 million, respectively. Sublease income for the year ended September 30, 2016 was $1.1 million. Our operating leases may contain rent escalations or concessions. Lease expense is recorded on a straight-line basis over the life of the respective lease.

Minimum future lease commitments under leases in effect as of September 30, 2016 are as follows (in thousands):



	Office space		Equipment		Total
Year ending September 30,
2017	$	66,200	$	4,475	$	70,675
2018	46,185		3,779		49,964
2019	34,604		3,137		37,741
2020	20,670		1,910		22,580
2021	4,089		13		4,102
Thereafter	2,330		2		2,332
Total minimum lease payments	$	174,078	$	13,316	$	187,394

We anticipate future sublease income of $1.2 million per fiscal year through fiscal year 2020.

Collective bargaining agreements

Approximately 16% of our employees are covered by collective bargaining agreements or similar arrangements.