Annual report pursuant to Section 13 and 15(d)

Business segments

v3.10.0.1
Business segments
12 Months Ended
Sep. 30, 2018
Segment Reporting [Abstract]  
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).
 
Year ended September 30,
 
2018
 
2017
 
2016
Revenue:
 

 
 

 
 

Health Services
$
1,404,959

 
$
1,380,151

 
$
1,298,304

U.S. Federal Services
478,911

 
545,573

 
591,728

Human Services
508,366

 
525,237

 
513,328

Total
$
2,392,236

 
$
2,450,961

 
$
2,403,360

Gross Profit:
 

 
 

 
 

Health Services
$
372,628

 
$
347,325

 
$
292,181

U.S. Federal Services
126,698

 
139,321

 
138,168

Human Services
95,059

 
125,259

 
131,842

Total
$
594,385

 
$
611,905

 
$
562,191

Selling, general and administrative expense:
 

 
 

 
 

Health Services
$
136,250

 
$
132,081

 
$
107,155

U.S. Federal Services
69,312

 
74,345

 
74,792

Human Services
76,835

 
76,675

 
84,157

Other
2,844

 
1,492

 
2,987

Total
$
285,241

 
$
284,593

 
$
269,091

Operating income:
 

 
 

 
 

Health Services
$
236,378

 
$
215,244

 
$
185,026

U.S. Federal Services
57,386

 
64,976

 
63,376

Human Services
18,224

 
48,584

 
47,685

Amortization of intangible assets
(10,308
)
 
(12,208
)
 
(13,377
)
Restructuring costs
(3,353
)
 
(2,242
)
 

Acquisition-related expenses
(947
)
 
(83
)
 
(832
)
Gain on sale of a business

 
650

 
6,880

Other
(1,897
)
 
(1,409
)
 
(2,155
)
Total
$
295,483

 
$
313,512

 
$
286,603

Operating income as a percentage of revenue:
 
 
 
 
 
Health Services
16.8
%
 
15.6
%
 
14.3
%
U.S. Federal Services
12.0
%
 
11.9
%
 
10.7
%
Human Services
3.6
%
 
9.2
%
 
9.3
%
Total
12.4
%
 
12.8
%
 
11.9
%
Depreciation and amortization:
 

 
 

 
 

Health Services
$
28,613

 
$
29,114

 
$
31,916

U.S. Federal Services
8,478

 
11,175

 
9,953

Human Services
14,793

 
15,480

 
16,535

Total
$
51,884

 
$
55,769

 
$
58,404


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):
 
Year ended September 30,
 
2018
 
2017
 
2016
United States
$
1,692,823

 
$
1,765,661

 
$
1,721,261

United Kingdom
347,026

 
346,342

 
384,649

Australia
247,850

 
232,434

 
200,539

Rest of World
104,537

 
106,524

 
96,911

Total
$
2,392,236

 
$
2,450,961

 
$
2,403,360


Identifiable assets for the segments are shown below (in thousands):
 
Year Ended
September 30,
 
2018
 
2017
Health Services
$
482,490

 
$
515,850

U.S. Federal Services
375,807

 
397,824

Human Services
144,445

 
169,523

Corporate/Other
459,258

 
267,465

Total
$
1,462,000

 
$
1,350,662


Our long-lived assets, consisting of property and equipment, capitalized software costs and deferred compensation plan assets, were distributed as follows (in thousands):
 
Year Ended
September 30,
 
2018
 
2017
United States
$
98,340

 
$
101,530

Australia
20,545

 
32,165

Canada
9,504

 
13,670

United Kingdom
5,498

 
9,251

Rest of World
391

 
331

Total
$
134,278

 
$
156,947