Maximus (MMS) 10-Q 7 Aug 15 2015 Q3 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	9 Months Ended
	Jun. 30, 2015	Jul. 31, 2015
Document and Entity Information
Entity Registrant Name	MAXIMUS INC
Entity Central Index Key	1,032,220
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		65,951,694
Document Fiscal Year Focus	2,015
Document Fiscal Period Focus	Q3

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF OPERATIONS
Revenue	$ 572,301	$ 419,899	$ 1,521,138	$ 1,265,506
Cost of revenue	428,503	307,296	1,133,728	926,315
Gross profit	143,798	112,603	387,410	339,191
Selling, general and administrative expenses	66,997	55,838	178,350	160,727
Amortization of intangible assets	3,275	1,542	6,182	4,365
Acquisition-related expenses	2,459		4,573
Legal and settlement expense				600
Operating income	71,067	55,223	198,305	173,499
Interest and other income/ (expense), net	(681)	495	439	1,304
Income before income taxes	70,386	55,718	198,744	174,803
Provision for income taxes	28,127	21,290	75,108	65,559
Net Income	42,259	34,428	123,636	109,244
Income attributable to noncontrolling interests	(593)	(290)	(1,302)	(40)
Net income attributable to MAXIMUS	$ 41,666	$ 34,138	$ 122,334	$ 109,204
Basic earnings per share attributable to MAXIMUS (in dollars per share)	$ 0.63	$ 0.50	$ 1.86	$ 1.61
Diluted earnings per share attributable to MAXIMUS (in dollars per share)	0.62	0.49	1.83	1.57
Dividends per share (in dollars per share)	$ 0.045	$ 0.045	$ 0.135	$ 0.135
Weighted average shares outstanding:
Basic (in shares)	65,901	67,659	65,900	67,982
Diluted (in shares)	67,098	69,031	67,003	69,369

CONSOLIDATED STATEMENTS OF COMP

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Net income	$ 42,259	$ 34,428	$ 123,636	$ 109,244
Foreign currency translation adjustments	8,339	6,366	(12,694)	4,919
Interest rate hedge, net of income taxes	(23)		(23)
Comprehensive income	50,575	40,794	110,919	114,163
Comprehensive income attributable to noncontrolling interests	(593)	(290)	(1,302)	(40)
Comprehensive income attributable to MAXIMUS	$ 49,982	$ 40,504	$ 109,617	$ 114,123

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
Current assets:
Cash and cash equivalents	$ 81,877	$ 158,112
Accounts receivable - billed and billable, net of reserves of $4,331 and $3,138	377,729	263,011
Accounts receivable - unbilled	27,578	26,556
Deferred income taxes	31,567	28,108
Prepaid expenses and other current assets	64,336	56,673
Total current assets	583,087	532,460
Property and equipment, net	118,169	80,246
Capitalized software, net	34,787	39,734
Goodwill	379,895	170,626
Intangible assets, net	106,621	39,239
Deferred contract costs, net	19,715	12,046
Deferred compensation plan assets	20,904	17,126
Other assets, net	12,467	9,519
Total assets	1,275,645	900,996
Current liabilities:
Accounts payable and accrued liabilities	164,486	103,181
Accrued compensation and benefits	88,413	94,137
Deferred revenue	63,586	55,878
Income taxes payable	38,640	4,693
Other liabilities	10,843	7,432
Total current liabilities	365,968	265,321
Deferred revenue, less current portion	56,734	32,257
Deferred income taxes	16,543	21,383
Long-term debt	166,844	1,060
Deferred compensation plan liabilities, less current portion	20,906	18,768
Other liabilities	8,252	6,022
Total liabilities	635,247	344,811
Shareholders' equity:
Common stock, no par value; 100,000 shares authorized; 65,932 and 66,613 shares issued and outstanding at June 30, 2015 and September 30, 2014, at stated amount, respectively	442,135	429,857
Accumulated other comprehensive income/(loss)	(12,487)	230
Retained earnings	208,404	125,875
Total MAXIMUS shareholders' equity	638,052	555,962
Noncontrolling interests	2,346	223
Total equity	640,398	556,185
Total liabilities and equity	$ 1,275,645	$ 900,996

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands, $ in Thousands	Jun. 30, 2015	Sep. 30, 2014
CONSOLIDATED BALANCE SHEETS
Accounts receivable - billed and billable, reserves (in dollars)	$ 4,331	$ 3,138
Common stock, no par value (in dollars per share)	$ 0	$ 0
Common stock, shares authorized	100,000	100,000
Common stock, shares issued	65,932	66,613
Common stock, shares outstanding	65,932	66,613

CONSOLIDATED STATEMENTS OF CASH

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Cash flows from operating activities:
Net income	$ 123,636	$ 109,244
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of property, equipment and capitalized software	37,617	31,932
Amortization of intangible assets	6,182	4,365
Deferred income taxes	(8,921)	(577)
Stock compensation expense	12,785	12,809
Changes in assets and liabilities:
Accounts receivable-billed and billable	(81,430)	(1,362)
Accounts receivable - unbilled	2,209	3,280
Prepaid expenses and other current assets	(3,496)	(1,343)
Deferred contract costs	(7,390)	556
Accounts payable and accrued liabilities	45,064	(5,686)
Accrued compensation and benefits	(4,546)	2,510
Deferred revenue	32,424	88
Income taxes	37,476	6,162
Other assets and liabilities	(10,630)	3,172
Cash provided by operating activities	180,980	165,150
Cash flows from investing activities:
Purchases of property and equipment	(68,243)	(18,389)
Capitalized software costs	(4,924)	(9,177)
Acquisition of businesses, net of cash acquired	(289,612)	(2,670)
Proceeds from note receivable	406	350
Cash used in investing activities	(362,373)	(29,886)
Cash flows from financing activities:
Cash dividends paid	(8,966)	(9,181)
Repurchases of common stock	(32,616)	(59,354)
Tax withholding related to RSU vesting	(12,451)	(14,681)
Expansion of credit facility	(1,444)
Borrowings under credit facility	255,993	15,000
Repayment of credit facility and long-term debt	(90,112)	(15,122)
Tax benefit/(provision) due to option exercises and restricted stock units vesting	(1,208)	2,925
Stock option exercises	521	1,145
Cash provided by/ (used in) financing activities	109,717	(79,268)
Effect of exchange rate changes on cash and cash equivalents	(4,559)	1,329
Net increase/(decrease) in cash and cash equivalents	(76,235)	57,325
Cash and cash equivalents, beginning of period	158,112	125,617
Cash and cash equivalents, end of period	$ 81,877	$ 182,942

CONSOLIDATED STATEMENTS OF CHAN

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Common Stock	Accumulated Other Comprehensive Income/(Loss)	Retained Earnings	Noncontrolling Interest	Total
Balance at Sep. 30, 2013	$ 415,271	$ 7,987	$ 106,250	$ 267	$ 529,775
Balance (in shares) at Sep. 30, 2013	68,525
Increase (Decrease) in Shareholders' Equity
Net income			109,204	40	109,244
Foreign currency translation		4,919			4,919
Cash dividends			(9,181)		(9,181)
Dividends on RSUs	$ 369		(369)
Repurchases of common stock			(60,950)		$ (60,950)
Repurchases of common stock (in shares)	(1,406)				(1,400)
Stock compensation expense	$ 12,809				$ 12,809
Stock compensation tax benefit	2,925				2,925
Tax withholding related to RSU vesting	(1,877)				(1,877)
Stock options exercised and RSUs vesting	$ 1,145				1,145
Stock options exercised and RSUs vesting (in shares)	247
Balance at Jun. 30, 2014	$ 430,642	12,906	144,954	307	588,809
Balance (in shares) at Jun. 30, 2014	67,366
Balance at Sep. 30, 2014	$ 429,857	230	125,875	223	$ 556,185
Balance (in shares) at Sep. 30, 2014	66,613				66,613
Increase (Decrease) in Shareholders' Equity
Net income			122,334	1,302	$ 123,636
Foreign currency translation		(12,694)			(12,694)
Interest rate hedge, net of income taxes		(23)			(23)
Cash dividends			(8,891)	(75)	(8,966)
Dividends on RSUs	$ 296		(296)
Repurchases of common stock			(30,618)		$ (30,618)
Repurchases of common stock (in shares)	(753)				(800)
Stock compensation expense	$ 12,785				$ 12,785
Stock compensation tax benefit	(1,208)				(1,208)
Tax withholding related to RSU vesting	(116)				(116)
Stock options exercised and RSUs vesting	$ 521				521
Stock options exercised and RSUs vesting (in shares)	72
Addition of noncontrolling interest from acquisition				896	896
Balance at Jun. 30, 2015	$ 442,135	$ (12,487)	$ 208,404	$ 2,346	$ 640,398
Balance (in shares) at Jun. 30, 2015	65,932				65,932

Organization and Basis of Prese

Organization and Basis of Presentation	9 Months Ended
	Jun. 30, 2015
Organization and Basis of Presentation
Organization and Basis of Presentation	1. Organization and Basis of Presentation General The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by generally accepted accounting principles (GAAP) for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. The results of operations for the three and nine months ended June 30, 2015 are not necessarily indicative of the results that may be expected for the full fiscal year. The balance sheet at September 30, 2014 has been derived from the audited financial statements at that date but does not include all of the information and notes required by generally accepted accounting principles for complete financial statements. Certain reclassifications have been made from prior year to conform with current presentation. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent liabilities and the reported amounts of revenue and expenses. On an ongoing basis, we evaluate our estimates including those related to revenue recognition and cost estimation on certain contracts, the realizability of goodwill, and amounts related to income taxes, certain accrued liabilities and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Actual results could differ from those estimates. These financial statements should be read in conjunction with the consolidated audited financial statements and the notes thereto at September 30, 2014 and 2013 and for each of the three years ended September 30, 2014, included in our Annual Report on Form 10-K for the year ended September 30, 2014 which was filed with the Securities and Exchange Commission on November 17, 2014.

Segment Information

Segment Information	9 Months Ended
	Jun. 30, 2015
Segment Information
Segment Information	2. Segment Information The table below provides certain financial information for each of our business segments. The presentation of segments has been updated from our presentation in the prior year to show amortization of intangible assets separately and to reflect the transfer of a small business division from the Health Services Segment to the Human Services Segment. Three Months Ended June 30, Nine Months Ended June 30, (Amounts in thousands) 2015 % (1) 2014 % (1) 2015 % (1) 2014 % (1) Revenue: Health Services $ % $ % $ % $ % Human Services % % % % Total % % % % Gross Profit: Health Services % % % % Human Services % % % % Total % % % % Selling, general, and administrative expense: Health Services % % % % Human Services % % % % Other NM NM NM NM Total % % % % Operating income: Health Services % % % % Human Services % % % % Amortization of intangible assets ) NM ) NM ) NM ) NM Acquisition-related expenses (2) ) NM — NM ) NM — NM Legal and settlement expenses (3) — NM — NM — NM ) NM Other ) NM ) NM ) NM ) NM Total $ % $ % $ % $ % (1) Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.” (2) Acquisition-related expenses are costs directly incurred from the purchases of Acentia and Remploy, including legal, accounting and valuation services and severance costs. (3) Legal and settlement expenses consist of costs related to significant legal settlements and non-routine legal matters, including future probable legal costs expected to be incurred in connection with those matters. Legal expenses incurred in the ordinary course of business are included in their respective operating segments.

Earnings Per Share

Earnings Per Share	9 Months Ended
	Jun. 30, 2015
Earnings Per Share
Earnings Per Share	3. Earnings Per Share The weighted average number of shares outstanding used to compute earnings per share was as follows: Three Months Ended June 30, Nine Months Ended June 30, (Amounts in thousands) 2015 2014 2015 2014 Basic weighted average shares outstanding Effect of dilutive securities: Employee stock options and unvested restricted stock units Denominator for diluted earnings per share No shares were excluded from the computation in calculating the earnings per share for the three or nine months ended June 30, 2015 or 2014.

Business combinations

Business combinations	9 Months Ended
	Jun. 30, 2015
Business combinations
Business combinations	4. Business combinations Acentia On April 1, 2015 (the “acquisition date”), we acquired 100% of the ownership interests of Acentia, LLC (“Acentia”) for an estimated cash consideration of $292.8 million. The final cash consideration will be subject to adjustment based upon calculation of the working capital on the acquisition date, as well as certain other adjustments. Acentia provides system modernization, software development, program management and other information technology services and solutions to the United States Federal Government. We acquired Acentia, among other reasons, to expand our ability to provide complementary business services and offerings across government markets. The acquired assets and liabilities have been integrated into our Health Services Segment. We are in the process of allocating the acquisition price to the fair value of the assets and liabilities of Acentia at the acquisition date. Initial estimates of this allocation are shown below but may be subject to change as we complete our assessment of the acquisition date balance sheet. (Amounts in thousands) Preliminary Purchase Price Accounting Estimated purchase consideration, net of cash acquired $ Billed and unbilled receivables $ Other assets Property and equipment Intangible assets — customer relationships Total identifiable assets acquired Accounts payable and other liabilities Deferred revenue Total liabilities assumed Net identifiable assets acquired Goodwill Net assets acquired $ The excess of the acquisition date consideration over the estimated fair value of the net assets acquired was recorded as goodwill. We consider the goodwill to represent the value of the assembled workforce of Acentia, as well as the enhanced knowledge and capabilities resulting from this business combination. Approximately 70% of the goodwill balance is anticipated to be deductible for tax purposes. The intangible assets acquired represent customer relationships. These will be amortized on a straight-line basis over 14 years. During the three and nine months ended June 30, 2015, Acentia contributed $52.9 million and $4.3 million of revenue and operating income, respectively. The following table presents certain results for the three and nine months ended June 30, 2015 and 2014 as though the acquisition of Acentia had occurred on October 1, 2013. The unaudited pro forma information is presented for informational purposes only and is not necessarily indicative of our results if the acquisition had taken place on that date. The pro forma results presented below include amortization charges for acquired intangible assets, adjustments to interest expense incurred and exclude related acquisition expenses. Unaudited pro forma results Three Months Ended June 30, Nine Months Ended June 30, (Amounts in thousands, except per share amounts) 2015 2014 2015 2014 Revenue $ $ $ $ Net income Basic earnings per share attributable to MAXIMUS $ $ $ $ Diluted earnings per share attributable to MAXIMUS $ $ $ $ Remploy On April 7, 2015 (the “Remploy acquisition date”), we acquired 70% of the ownership interests of Remploy (2015) Limited, whose assets had previously operated under the “Remploy” tradename. The remaining 30% is held in a trust for the benefit of the employees. The acquisition consideration was $3.0 million (£2.0 million). The purchase agreement stipulated that the net assets of Remploy were zero on the Remploy acquisition date as calculated using United Kingdom accounting principles. Remploy provides services to the United Kingdom government, particularly in supporting employment opportunities for the disabled. We acquired Remploy to complement our welfare-to-work services in the United Kingdom. The acquired assets and liabilities have been integrated into our Human Services Segment. We are still in the process of allocating values to Remploy’s acquired assets and liabilities.

Goodwill and Intangible assets

Goodwill and Intangible assets	9 Months Ended
	Jun. 30, 2015
Goodwill and Intangible assets
Goodwill and Intangible Assets	5. Goodwill and Intangible Assets The changes in goodwill for the nine months ended June 30, 2015 are as follows: (Amounts in thousands) Health Services Human Services Total Balance as of September 30, 2014 $ $ $ Acquisition of Acentia — Foreign currency translation ) ) ) Balance as of June 30, 2015 $ $ $ The following table sets forth the components of intangible assets: As of June 30, 2015 As of September 30, 2014 (Amounts in thousands) Cost Accumulated Amortization Intangible Assets, net Cost Accumulated Amortization Intangible Assets, net Customer contracts and relationships $ $ $ $ $ $ Technology based intangible assets Trademarks and trade names Total $ $ $ $ $ $ Our intangible assets at June 30, 2015 had a weighted average remaining life of 12.6 years, comprising 12.9 years for customer contracts and relationships, 2.8 years for technology-based intangible assets and 2.2 years for the trademarks and trade names. Amortization expense for the nine months ended June 30, 2015 and 2014 was $6.2 million and $4.4 million, respectively. Estimated future amortization expense is as follows (in thousands): Three months ended September 30, 2015 $ Year ended September 30, 2016 Year ended September 30, 2017 Year ended September 30, 2018 Year ended September 30, 2019 Year ended September 30, 2020

Credit facilities

Credit facilities	9 Months Ended
	Jun. 30, 2015
Credit facilities
Credit Facilities	6. Credit facilities On March 9, 2015, we entered into an amendment to our unsecured credit agreement (the “Credit Agreement”). The Credit Agreement, as amended, provides for a revolving line of credit up to $400 million that may be used for revolving loans, swingline loans (subject to a sublimit of $5 million), and to request letters of credit, subject to a sublimit of $30 million. The line of credit is available for general corporate purposes, including working capital, capital expenditures and acquisitions. The arrangement will terminate on March 9, 2020, at which time all outstanding borrowings must be repaid. On April 1, 2015, we borrowed $225 million under the Credit Agreement in order to fund our acquisition of Acentia. Additional borrowings and repayments were subsequently made to fund working capital and capital expenditure requirements. The Credit Agreement permits us to make borrowings in currencies other than the United States Dollar. At June 30, 2015, we have U.S. Dollar borrowings of $155.0 million and Canadian Dollar borrowings of $11.0 million (13.5 million Canadian Dollars). In addition to borrowings under the Credit Facility, we have an outstanding loan of $1.0 million (1.2 million Canadian Dollars) with the Atlantic Innovation Fund of Canada. At June 30, 2015, we held four letters of credit under the Credit Agreement totaling $1.4 million. Each of these letters of credit may be called by vendors in the event that the Company defaults under the terms of a contract, the probability of which we believe is remote. In addition, two letters of credit totaling $3.0 million, secured with restricted cash balances, are held with another financial institution to cover similar obligations. The Credit Agreement requires us to comply with certain financial covenants and other covenants including a maximum total leverage ratio and a minimum fixed charge coverage ratio. We were in compliance with all covenants as of June 30, 2015. Our obligations under the Credit Agreement are guaranteed by material domestic subsidiaries of the Company. The Credit Facility is currently unsecured. In the event that our total leverage ratio, as defined in the credit agreement, exceeds 2.5 to 1, the Credit Agreement will become secured by the assets of the parent company and certain of its subsidiaries. At June 30, 2015, our total leverage ratio was less than 1.0:1.0. The Credit Agreement provides for an annual commitment fee payable on funds not borrowed or utilized for letters of credit. This charge is based upon our leverage and varies between 0.15% and 0.3%. Borrowings under the Credit Agreement bear interest at our choice at either (a) a Base Rate plus a margin that varies between 0.0% and 0.75% per year, (b) a Eurocurrency Rate plus an applicable margin that varies between 1.0% and 1.75% per year or (c) an Index Rate plus an applicable margin which varies between 1.0% and 1.75% per year. The Base Rate, Eurocurrency Rate and Index Rate are defined by the Credit Agreement. In order to reduce our exposure to floating interest rates, we entered into a derivative arrangement to fix payments on part of our open loan balance. We will pay a fixed rate of interest to a financial institution and receive a balance equivalent to the floating rate payable. At June 30, 2015, payments on $66.7 million of our principal balance are fixed. The principal balance subject to this derivative arrangement will decline through September 30, 2016. At June 30, 2015, the fair value of this derivative instrument was a liability of less than $0.1 million. As this cash flow hedge is considered effective, the loss related to the decline in the fair value of this derivative instrument is reported in the Statement of Comprehensive Income. During the three months ended June 30, 2015, we made interest payments of $0.5 million.

Supplemental disclosures

Supplemental disclosures	9 Months Ended
	Jun. 30, 2015
Supplemental disclosures
Supplemental disclosures	7. Supplemental disclosures During the nine months ended June 30, 2015 and 2014, we made income tax payments of $47.8 million and $57.4 million, respectively. At June 30, 2015, we held cash and cash equivalents of $81.9 million. Approximately 80% of these funds are denominated and held in jurisdictions outside the United States and we have no requirement or intent at this time to transfer the funds to the United States. Declines in the value of foreign currencies with respect to the United States Dollar, notably the Australian Dollar and British Pound, resulted in a decline in net assets of $12.7 million in the nine months ended June 30, 2015, including a $4.6 million decline in our cash and cash equivalents balance and a $4.7 million decline in our goodwill balance. These declines were recorded as losses in our statement of comprehensive income. Our deferred compensation plan assets include $9.5 million invested in mutual funds which have quoted prices in active markets. These assets are recorded at fair value with changes in fair value being recorded in the statement of operations. The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable and other amounts included within current assets and liabilities that meet the definition of a financial instrument are shown at values equivalent to fair value due to the short-term nature of these items. Our accounts receivable balance includes both amounts invoiced and those where amounts are ready to be invoiced and the funds are collectable within standard invoice terms.

Stock Repurchase Programs

Stock Repurchase Programs	9 Months Ended
	Jun. 30, 2015
Stock Repurchase Programs
Stock Repurchase Programs	8. Stock Repurchase Programs Under resolutions adopted in November 2011 and June 2014, our Board of Directors authorized the repurchase, at management’s discretion, of up to an aggregate of $275.0 million of our common stock. The resolution also authorized the use of option exercise proceeds for the repurchase of our common stock. During the nine months ended June 30, 2015 and 2014, we repurchased 0.8 million and 1.4 million common shares at a cost of $30.6 million and $60.9 million, respectively. The amount available for future repurchases at June 30, 2015 was $105.1 million.

Revenue recognition

Revenue recognition	9 Months Ended
	Jun. 30, 2015
Revenue recognition
Revenue recognition	9. Revenue recognition In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers. This new standard will change the manner in which we evaluate revenue recognition for all contracts with customers, although the effect of the changes on revenue recognition will vary from contract to contract. We would adopt this standard during our 2019 fiscal year. The standard permits a retrospective or cumulative effect transition method. We anticipate that we will adopt the new standard using the retrospective method. We are continuing to evaluate the likely effects on our business.

Dividend

Dividend	9 Months Ended
	Jun. 30, 2015
Dividend
Dividend	10 . Dividend On July 2, 2015, our Board of Directors declared a quarterly cash dividend of $0.045 for each share of our common stock outstanding. The dividend is payable on August 31, 2015 to shareholders of record on August 14, 2015.

Segment Information (Tables)

Segment Information (Tables)	9 Months Ended
	Jun. 30, 2015
Segment Information
Schedule of financial information for each of the Company's business segments	Three Months Ended June 30, Nine Months Ended June 30, (Amounts in thousands) 2015 % (1) 2014 % (1) 2015 % (1) 2014 % (1) Revenue: Health Services $ % $ % $ % $ % Human Services % % % % Total % % % % Gross Profit: Health Services % % % % Human Services % % % % Total % % % % Selling, general, and administrative expense: Health Services % % % % Human Services % % % % Other NM NM NM NM Total % % % % Operating income: Health Services % % % % Human Services % % % % Amortization of intangible assets ) NM ) NM ) NM ) NM Acquisition-related expenses (2) ) NM — NM ) NM — NM Legal and settlement expenses (3) — NM — NM — NM ) NM Other ) NM ) NM ) NM ) NM Total $ % $ % $ % $ % (1) Percentage of respective segment revenue. Percentages not considered meaningful are marked “NM.” (2) Acquisition-related expenses are costs directly incurred from the purchases of Acentia and Remploy, including legal, accounting and valuation services and severance costs. (3) Legal and settlement expenses consist of costs related to significant legal settlements and non-routine legal matters, including future probable legal costs expected to be incurred in connection with those matters. Legal expenses incurred in the ordinary course of business are included in their respective operating segments.

Earnings Per Share (Tables)

Earnings Per Share (Tables)	9 Months Ended
	Jun. 30, 2015
Earnings Per Share
Schedule of the components of basic and diluted earnings per share	Three Months Ended June 30, Nine Months Ended June 30, (Amounts in thousands) 2015 2014 2015 2014 Basic weighted average shares outstanding Effect of dilutive securities: Employee stock options and unvested restricted stock units Denominator for diluted earnings per share

Business combinations (Tables)

Business combinations (Tables) - Acentia LLC	9 Months Ended
	Jun. 30, 2015
Business combinations
Schedule of assets and liabilities recorded in the Company's financial statements at their fair values at the acquisition date	(Amounts in thousands) Preliminary Purchase Price Accounting Estimated purchase consideration, net of cash acquired $ Billed and unbilled receivables $ Other assets Property and equipment Intangible assets — customer relationships Total identifiable assets acquired Accounts payable and other liabilities Deferred revenue Total liabilities assumed Net identifiable assets acquired Goodwill Net assets acquired $
Schedule of unaudited pro forma information	Unaudited pro forma results Three Months Ended June 30, Nine Months Ended June 30, (Amounts in thousands, except per share amounts) 2015 2014 2015 2014 Revenue $ $ $ $ Net income Basic earnings per share attributable to MAXIMUS $ $ $ $ Diluted earnings per share attributable to MAXIMUS $ $ $ $

Goodwill and intangible assets

Goodwill and intangible assets (Tables)	9 Months Ended
	Jun. 30, 2015
Goodwill and Intangible assets
Schedule of changes in the carrying amount of goodwill	(Amounts in thousands) Health Services Human Services Total Balance as of September 30, 2014 $ $ $ Acquisition of Acentia — Foreign currency translation ) ) ) Balance as of June 30, 2015 $ $ $
Schedule of components of intangible assets	As of June 30, 2015 As of September 30, 2014 (Amounts in thousands) Cost Accumulated Amortization Intangible Assets, net Cost Accumulated Amortization Intangible Assets, net Customer contracts and relationships $ $ $ $ $ $ Technology based intangible assets Trademarks and trade names Total $ $ $ $ $ $
Schedule of estimated future amortization expense	Estimated future amortization expense is as follows (in thousands): Three months ended September 30, 2015 $ Year ended September 30, 2016 Year ended September 30, 2017 Year ended September 30, 2018 Year ended September 30, 2019 Year ended September 30, 2020

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Revenue:
Revenue		$ 572,301	$ 419,899	$ 1,521,138	$ 1,265,506
Revenue (as a percent)		100.00%	100.00%	100.00%	100.00%
Gross profit:
Gross profit		$ 143,798	$ 112,603	$ 387,410	$ 339,191
Gross profit (as a percent)		25.10%	26.80%	25.50%	26.80%
Selling, general, and administrative expense:
Selling, general and administrative expense		$ 66,997	$ 55,838	$ 178,350	$ 160,727
Selling, general, and administrative expense (as a percent)		11.70%	13.30%	11.70%	12.70%
Operating income:
Amortization of intangible assets		$ (3,275)	$ (1,542)	$ (6,182)	$ (4,365)
Acquisition-related expenses		(2,459)		(4,573)
Legal and settlement expense					(600)
Operating income		$ 71,067	$ 55,223	$ 198,305	$ 173,499
Operating income (as a percent)		12.40%	13.20%	13.00%	13.70%
Operating segments
Operating income:
Amortization of intangible assets		$ (3,275)	$ (1,542)	$ (6,182)	$ (4,365)
Acquisition-related expenses	[1]	(2,459)		(4,573)
Legal and settlement expense					(600)
Other		(8)	(35)	(108)	(14)
Other
Selling, general, and administrative expense:
Selling, general and administrative expense		8	35	108	14
Health Services | Operating segments
Revenue:
Revenue		$ 439,560	$ 305,253	$ 1,161,242	$ 927,435
Revenue (as a percent)		100.00%	100.00%	100.00%	100.00%
Gross profit:
Gross profit		$ 104,593	$ 79,532	$ 281,895	$ 240,906
Gross profit (as a percent)		23.80%	26.10%	24.30%	26.00%
Selling, general, and administrative expense:
Selling, general and administrative expense		$ 44,587	$ 36,333	$ 119,618	$ 105,641
Selling, general, and administrative expense (as a percent)		10.10%	11.90%	10.30%	11.40%
Operating income:
Operating income		$ 60,006	$ 43,199	$ 162,277	$ 135,265
Operating income (as a percent)		13.70%	14.20%	14.00%	14.60%
Human Services | Operating segments
Revenue:
Revenue		$ 132,741	$ 114,646	$ 359,896	$ 338,071
Revenue (as a percent)		100.00%	100.00%	100.00%	100.00%
Gross profit:
Gross profit		$ 39,205	$ 33,071	$ 105,515	$ 98,285
Gross profit (as a percent)		29.50%	28.80%	29.30%	29.10%
Selling, general, and administrative expense:
Selling, general and administrative expense		$ 22,402	$ 19,470	$ 58,624	$ 55,072
Selling, general, and administrative expense (as a percent)		16.90%	17.00%	16.30%	16.30%
Operating income:
Operating income		$ 16,803	$ 13,601	$ 46,891	$ 43,213
Operating income (as a percent)		12.70%	11.90%	13.00%	12.80%
[1]	Acquisition-related expenses are costs directly incurred from the purchases of Acentia and Remploy, including legal, accounting and valuation services and severance costs.

Earnings Per Share (Details)

Earnings Per Share (Details) - shares shares in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Denominator:
Basic weighted average shares outstanding	65,901	67,659	65,900	67,982
Employee stock options and unvested restricted stock units	1,197	1,372	1,103	1,387
Denominator for diluted earnings per share	67,098	69,031	67,003	69,369
Awards excluded from the calculation of diluted earnings per share (in shares)	0	0	0	0

Business combinations (Details)

Business combinations (Details) - USD ($) $ in Thousands	Apr. 01, 2015	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Preliminary Purchase Price Accounting
Cash consideration, net of cash acquired		$ 289,612	$ 2,670
Goodwill		$ 379,895		$ 170,626
Acentia LLC
Business combinations
Share capital acquired (as a percent)	100.00%
Preliminary Purchase Price Accounting
Cash consideration, net of cash acquired	$ 292,815
Billed and unbilled receivables	35,060
Other assets	5,151
Property and equipment	1,619
Total identifiable assets acquired	111,730
Accounts payable and other liabilities	32,619
Deferred revenue	251
Total liabilities assumed	32,870
Net identifiable assets acquired	78,860
Goodwill	213,955
Net assets acquired	$ 292,815
Percentage of goodwill anticipated to be deductible for tax purpose	70.00%
Acentia LLC | Customer relationships
Preliminary Purchase Price Accounting
Intangible assets	$ 69,900
Amortization period of intangible assets	14 years

Business combinations (Details

Business combinations (Details 2) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Business combinations
Revenues	$ 572,301	$ 419,899	$ 1,521,138	$ 1,265,506
Operating income	71,067	55,223	198,305	173,499
Acentia LLC
Business combinations
Revenues	52,900		52,900
Operating income	4,300		4,300
Pro forma information
Revenue	572,301	473,408	1,624,664	1,425,077
Net income	$ 43,896	$ 37,154	$ 130,260	$ 116,469
Basic earnings per share attributable to MAXIMUS (in dollars per share)	$ 0.66	$ 0.54	$ 1.96	$ 1.71
Diluted earnings per share attributable to MAXIMUS (in dollars per share)	$ 0.64	$ 0.53	$ 1.92	$ 1.68

Business combinations (Detail26

Business combinations (Details 3) - Apr. 07, 2015 - Remploy £ in Millions, $ in Millions	GBP (£)	USD ($)
Business combinations
Share capital acquired (as a percent)	70.00%
Share capital held in trust for the benefit of employees (as a percent)	30.00%
Preliminary Purchase Price Accounting
Acquisition consideration	£ 2	$ 3
Net assets	£ 0

Goodwill and Intangible Asset27

Goodwill and Intangible Assets (Details) $ in Thousands	9 Months Ended
	Jun. 30, 2015USD ($)
Changes in goodwill
Balance at the beginning of the period	$ 170,626
Acquisition of Acentia	213,955
Foreign currency translation	(4,686)
Balance at the end of the period	379,895
Health Services
Changes in goodwill
Balance at the beginning of the period	124,920
Acquisition of Acentia	213,955
Foreign currency translation	(2,676)
Balance at the end of the period	336,199
Human Services
Changes in goodwill
Balance at the beginning of the period	45,706
Foreign currency translation	(2,010)
Balance at the end of the period	$ 43,696

Goodwill and Intangible Asset28

Goodwill and Intangible Assets (Details 2) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014
Components of intangible assets
Cost	$ 129,229		$ 129,229		$ 56,072
Accumulated Amortization	22,608		22,608		16,833
Intangible Assets, net	106,621		$ 106,621		39,239
Weighted average remaining life of assets not fully amortized			12 years 7 months 6 days
Amortization expense	3,275	$ 1,542	$ 6,182	$ 4,365
Estimated future amortization expense
Three months ended September 30, 2015	3,213		3,213
Year ended September 30, 2016	12,852		12,852
Year ended September 30, 2017	11,235		11,235
Year ended September 30, 2018	8,880		8,880
Year ended September 30, 2019	7,989		7,989
Year ended September 30, 2020	6,884		6,884
Customer contracts and relationships
Components of intangible assets
Cost	115,975		115,975		42,403
Accumulated Amortization	12,524		12,524		7,821
Intangible Assets, net	103,451		$ 103,451		34,582
Weighted average remaining life of assets not fully amortized			12 years 10 months 24 days
Technology-based intangible assets
Components of intangible assets
Cost	8,936		$ 8,936		9,295
Accumulated Amortization	7,398		7,398		6,910
Intangible Assets, net	1,538		$ 1,538		2,385
Weighted average remaining life of assets not fully amortized			2 years 9 months 18 days
Trademarks and trade names
Components of intangible assets
Cost	4,318		$ 4,318		4,374
Accumulated Amortization	2,686		2,686		2,102
Intangible Assets, net	$ 1,632		$ 1,632		$ 2,272
Weighted average remaining life of assets not fully amortized			2 years 2 months 12 days

Credit facilities (Details)

Credit facilities (Details) CAD in Millions, $ in Millions	3 Months Ended	9 Months Ended
	Jun. 30, 2015USD ($)	Jun. 30, 2015CADitem	Jun. 30, 2015USD ($)item	Apr. 01, 2015USD ($)	Mar. 09, 2015USD ($)
Maximum
Credit Facilities
Derivative Liability			$ 0.1
Credit Agreement Expiring January 2020
Credit Facilities
Maximum borrowing capacity					$ 400
Amount borrowed				$ 225
Number of letters of credit issued | item		4	4
Fixed payment of principal balance			$ 66.7
Interest Paid	$ 0.5
Credit Agreement Expiring January 2020 | U.S Dollar Borrowings
Credit Facilities
Amount borrowed			155
Credit Agreement Expiring January 2020 | Canadian Dollar Borrowings
Credit Facilities
Amount borrowed		CAD 13.5	11
Credit Agreement Expiring January 2020 | Minimum
Credit Facilities
Leverage ratio to calculate annual commitment fee (as a percent)		0.15%
Credit Agreement Expiring January 2020 | Minimum | Base Rate
Credit Facilities
Margin (as a percent)		0.00%
Credit Agreement Expiring January 2020 | Minimum | Eurocurrency Rate
Credit Facilities
Margin (as a percent)		1.00%
Credit Agreement Expiring January 2020 | Minimum | Index Rate
Credit Facilities
Margin (as a percent)		1.00%
Credit Agreement Expiring January 2020 | Maximum
Credit Facilities
Leverage ratio		2.5
Total leverage ratio		1
Leverage ratio to calculate annual commitment fee (as a percent)		0.30%
Credit Agreement Expiring January 2020 | Maximum | Base Rate
Credit Facilities
Margin (as a percent)		0.75%
Credit Agreement Expiring January 2020 | Maximum | Eurocurrency Rate
Credit Facilities
Margin (as a percent)		1.75%
Credit Agreement Expiring January 2020 | Maximum | Index Rate
Credit Facilities
Margin (as a percent)		1.75%
Swingline loans
Credit Facilities
Maximum borrowing capacity					5
Letters of credit
Credit Facilities
Maximum borrowing capacity					$ 30
Outstanding borrowings			1.4
Letters of credit (Other than Revolving Credit Agreement)
Credit Facilities
Outstanding borrowings			$ 3
Number of letters of credit issued | item		2	2
Atlantic Innovation Fund of Canada
Credit Facilities
Outstanding borrowings		CAD 1.2	$ 1

Supplemental disclosures (Detai

Supplemental disclosures (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Sep. 30, 2014	Sep. 30, 2013
Cash and cash equivalents
Cash and cash equivalents	$ 81,877	$ 182,942	$ 81,877	$ 182,942	$ 158,112	$ 125,617
Percentage of cash and cash equivalents denominated and held in jurisdictions outside the United States	80.00%		80.00%
Foreign currency translation adjustments	$ 8,339	$ 6,366	$ (12,694)	4,919
Effect of exchange rate changes on cash and cash equivalents			(4,559)	1,329
Decline in goodwill value			(4,686)
Deferred compensation plan
Investments in mutual funds	$ 9,500		9,500
Income taxes
Income taxes paid			$ 47,800	$ 57,400

Stock Repurchase Programs (Deta

Stock Repurchase Programs (Details) - USD ($) $ in Thousands, shares in Millions	9 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Stock Repurchase Programs
Stock repurchase programs, authorized amount		$ 275,000
Common shares repurchased	0.8	1.4
Common shares repurchased, cost	$ 30,618	$ 60,950
Amount remaining available for future stock repurchases	$ 105,100

Dividend (Details)

Dividend (Details)	Jul. 02, 2015$ / shares
Subsequent events.
Cash dividend declared (in dollars per share)	$ 0.045