Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Nov. 06, 2014 | Mar. 31, 2014 | |
Document and Entity Information | ' | ' | ' |
Entity Registrant Name | 'CUBIC CORP /DE/ | ' | ' |
Entity Central Index Key | '0000026076 | ' | ' |
Document Type | '10-K | ' | ' |
Document Period End Date | 30-Sep-14 | ' | ' |
Amendment Flag | 'false | ' | ' |
Current Fiscal Year End Date | '--09-30 | ' | ' |
Entity Well-known Seasoned Issuer | 'No | ' | ' |
Entity Voluntary Filers | 'No | ' | ' |
Entity Current Reporting Status | 'Yes | ' | ' |
Entity Filer Category | 'Large Accelerated Filer | ' | ' |
Entity Public Float | ' | ' | $1,032,859,444 |
Entity Common Stock, Shares Outstanding | ' | 26,860,299 | ' |
Document Fiscal Year Focus | '2014 | ' | ' |
Document Fiscal Period Focus | 'FY | ' | ' |
CONSOLIDATED_STATEMENTS_OF_INC
CONSOLIDATED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Net sales: | ' | ' | ' |
Products | $583,937 | $562,310 | $677,328 |
Services | 814,415 | 799,097 | 726,756 |
Total net sales | 1,398,352 | 1,361,407 | 1,404,084 |
Costs and expenses: | ' | ' | ' |
Products | 424,682 | 425,793 | 466,178 |
Services | 657,853 | 629,520 | 593,962 |
Selling, general and administrative expenses | 181,672 | 165,230 | 164,189 |
Research and development | 17,959 | 24,445 | 28,722 |
Amortization of purchased intangibles | 22,602 | 16,680 | 14,828 |
Restructuring costs | 1,094 | 8,139 | ' |
Impairment of goodwill | ' | 50,865 | ' |
Total costs and expenses | 1,305,862 | 1,320,672 | 1,267,879 |
Operating income | 92,490 | 40,735 | 136,205 |
Other income (expense): | ' | ' | ' |
Interest and dividend income | 1,396 | 1,576 | 2,994 |
Interest expense | -4,084 | -3,427 | -1,602 |
Other income (expense), net | -391 | 887 | 366 |
Income before income taxes | 89,411 | 39,771 | 137,963 |
Income taxes | 19,831 | 14,502 | 40,332 |
Net income | 69,580 | 25,269 | 97,631 |
Less noncontrolling interest in income of VIE | 89 | 183 | 204 |
Net income attributable to Cubic | $69,491 | $25,086 | $97,427 |
Net income per share attributable to Cubic | ' | ' | ' |
Basic (in dollars per share) | $2.59 | $0.94 | $3.64 |
Diluted (in dollars per share) | $2.59 | $0.94 | $3.64 |
Weighted average shares used in per share calculations: | ' | ' | ' |
Basic (in shares) | 26,787 | 26,736 | 26,736 |
Diluted (in shares) | 26,845 | 26,760 | 26,736 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ' | ' | ' |
Net income | $69,580 | $25,269 | $97,631 |
Other comprehensive income (loss): | ' | ' | ' |
Adjustment to pension liability, net of tax | -1,085 | 13,106 | -5,585 |
Foreign currency translation | -2,017 | 974 | 10,877 |
Net unrealized gain (loss) on available-for-sale securities, net of tax | ' | -2 | ' |
Change in net unrealized gains/losses from cash flow hedges: | ' | ' | ' |
Change in fair value of cash flow hedges, net of tax | 748 | 2,977 | -4,217 |
Adjustment for net gains/losses realized and included in net income, net of tax | -215 | 800 | 4,459 |
Total change in net unrealized gains/losses from cash flow hedges, net of tax | 533 | 3,777 | 242 |
Total other comprehensive income (loss) | -2,569 | 17,855 | 5,534 |
Total comprehensive income | $67,011 | $43,124 | $103,165 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Current assets: | ' | ' |
Cash and cash equivalents | $215,849 | $203,892 |
Restricted cash | 69,056 | 69,381 |
Marketable securities | 1,196 | 4,055 |
Accounts receivable: | ' | ' |
Trade and other receivables | 30,593 | 17,352 |
Long-term contracts | 364,075 | 362,308 |
Allowance for doubtful accounts | -489 | -658 |
Accounts receivable - net | 394,179 | 379,002 |
Recoverable income taxes | 16,055 | 7,885 |
Inventories | 38,775 | 59,746 |
Deferred income taxes | 10,324 | 8,354 |
Prepaid expenses and other current assets | 19,953 | 10,284 |
Total current assets | 765,387 | 742,599 |
Long-term contract receivables | 15,870 | 19,021 |
Long-term capitalized contract costs | 76,209 | 68,963 |
Property, plant and equipment, net | 64,149 | 56,305 |
Deferred income taxes | 17,849 | 19,322 |
Goodwill | 184,141 | 136,094 |
Purchased intangibles, net | 63,618 | 57,542 |
Miscellaneous other assets | 7,383 | 9,772 |
Total assets | 1,194,606 | 1,109,618 |
Current liabilities: | ' | ' |
Trade accounts payable | 31,344 | 40,310 |
Customer advances | 91,690 | 84,307 |
Accrued compensation | 48,812 | 43,394 |
Other current liabilities | 84,555 | 65,859 |
Income taxes payable | 12,737 | 12,731 |
Deferred income taxes | 474 | ' |
Current maturities of long-term debt | 563 | 557 |
Total current liabilities | 270,175 | 247,158 |
Long-term debt | 101,827 | 102,363 |
Accrued pension liability | 17,219 | 20,785 |
Deferred compensation | 9,501 | 9,792 |
Income taxes payable | 6,324 | 6,434 |
Deferred income taxes | 1,152 | ' |
Other non current liabilities | 5,907 | 6,006 |
Commitments and contingencies | ' | ' |
Shareholders' equity: | ' | ' |
Preferred stock, no par value: Authorized--5,000 shares Issued and outstanding--none | ' | ' |
Common stock, no par value: Authorized--50,000 shares, Issued - 35,734 and 35,682 shares, outstanding - 26,789 and 26,736 shares for 2014 and 2013, respectively | 20,669 | 15,825 |
Retained earnings | 803,059 | 740,002 |
Accumulated other comprehensive loss | -5,372 | -2,803 |
Treasury stock at cost - 8,945 shares | -36,078 | -36,078 |
Shareholders' equity related to Cubic | 782,278 | 716,946 |
Noncontrolling interest in variable interest entity | 223 | 134 |
Total shareholders' equity | 782,501 | 717,080 |
Total liabilities and shareholders' equity | $1,194,606 | $1,109,618 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, except Per Share data, unless otherwise specified | ||
CONSOLIDATED BALANCE SHEETS | ' | ' |
Preferred stock, par value | $0 | $0 |
Preferred stock, Authorized shares | 5,000 | 5,000 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $0 | $0 |
Common stock, Authorized shares | 50,000 | 50,000 |
Common stock, Issued shares | 35,734 | 35,682 |
Common stock, outstanding shares | 26,789 | 26,736 |
Treasury stock, shares | 8,945 | 8,945 |
CONSOLIDATED_STATEMENTS_OF_CAS
CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Operating Activities: | ' | ' | ' |
Net income | $69,580 | $25,269 | $97,631 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ' | ' | ' |
Depreciation and amortization | 30,440 | 25,359 | 22,857 |
Stock-based compensation expense | 5,625 | 3,251 | ' |
Inventory write-down | 598 | 2,760 | ' |
Impairment of goodwill | ' | 50,865 | ' |
Deferred income taxes | 2,684 | -7,508 | -1,486 |
Excess tax benefit from equity incentive plans | -310 | ' | ' |
Changes in operating assets and liabilities, net of effects from acquisitions: | ' | ' | ' |
Accounts receivable | -4,300 | -18,991 | -122,984 |
Inventories | 20,590 | -19,890 | 173 |
Prepaid expenses and other current assets | -8,114 | 3,867 | 7,432 |
Long-term capitalized contract costs | -7,246 | -42,088 | -26,875 |
Accounts payable and other current liabilities | 6,505 | -25,637 | 9,630 |
Customer advances | 7,304 | 8,990 | -55,769 |
Income taxes | -9,768 | -19,114 | 14,219 |
Other items, net | 1,222 | -409 | 495 |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | 114,810 | -13,276 | -54,677 |
Investing Activities: | ' | ' | ' |
Acquisition of businesses, net of cash acquired | -83,456 | -63,691 | ' |
Purchases of marketable securities | -1,196 | -4,050 | ' |
Proceeds from sales or maturities of marketable securities | 4,050 | ' | 25,829 |
Purchases of property, plant and equipment | -16,620 | -9,052 | -14,226 |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | -97,222 | -76,793 | 11,603 |
Financing Activities: | ' | ' | ' |
Proceeds from short-term borrowings | 38,000 | 70,000 | ' |
Principal payments on short-term borrowings | -38,000 | -70,000 | ' |
Proceeds from long-term borrowings | ' | 100,000 | ' |
Principal payments on long-term borrowings | -573 | -8,543 | -4,549 |
Proceeds from issuance of common stock | 113 | ' | ' |
Purchase of common stock | -1,204 | ' | ' |
Excess tax benefits from equity incentive plans | 310 | ' | ' |
Contingent consideration payments related to acquisitions of businesses | -2,368 | -7,842 | ' |
Net change in restricted cash | 325 | -158 | -68,584 |
Dividends paid to shareholders | -6,429 | -6,417 | -6,417 |
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | -9,826 | 77,040 | -79,550 |
Effect of exchange rates on cash | 4,195 | 4,654 | 5,743 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | 11,957 | -8,375 | -116,881 |
Cash and cash equivalents at the beginning of the year | 203,892 | 212,267 | 329,148 |
CASH AND CASH EQUIVALENTS AT THE END OF THE YEAR | 215,849 | 203,892 | 212,267 |
NEK Special Programs Group LLC (NEK) | ' | ' | ' |
Operating Activities: | ' | ' | ' |
Net income | 600 | -500 | ' |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' | ' |
Liability incurred to acquire, net | ' | 4,490 | ' |
Intific Inc. | ' | ' | ' |
Operating Activities: | ' | ' | ' |
Net income | -4,200 | ' | ' |
Supplemental disclosure of non-cash investing and financing activities: | ' | ' | ' |
Liability incurred to acquire, net | $1,173 | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CHA
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (USD $) | Common Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Treasury Stock | Noncontrolling Interest in VIE | Total |
In Thousands, unless otherwise specified | ||||||
Balance at Sep. 30, 2011 | $12,574 | $630,323 | ($26,192) | ($36,078) | ($253) | ' |
Balance (in shares) at Sep. 30, 2011 | 26,736 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income | ' | 97,427 | ' | ' | 204 | 97,427 |
Other comprehensive loss, net of tax | ' | ' | 5,534 | ' | ' | ' |
Cash dividends paid -- $.24, $.24 and $.24 per share of common stock for year ended September 2014, 2013 and 2012, respectively | ' | -6,417 | ' | ' | ' | ' |
Balance at Sep. 30, 2012 | 12,574 | 721,333 | -20,658 | -36,078 | -49 | ' |
Balance (in shares) at Sep. 30, 2012 | 26,736 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income | ' | 25,086 | ' | ' | 183 | 25,086 |
Other comprehensive loss, net of tax | ' | ' | 17,855 | ' | ' | ' |
Stock- based compensation | 3,251 | ' | ' | ' | ' | ' |
Cash dividends paid -- $.24, $.24 and $.24 per share of common stock for year ended September 2014, 2013 and 2012, respectively | ' | -6,417 | ' | ' | ' | ' |
Balance at Sep. 30, 2013 | 15,825 | 740,002 | -2,803 | -36,078 | 134 | 717,080 |
Balance (in shares) at Sep. 30, 2013 | 26,736 | ' | ' | ' | ' | ' |
Increase (Decrease) in Stockholders' Equity | ' | ' | ' | ' | ' | ' |
Net income | ' | 69,491 | ' | ' | 89 | 69,491 |
Other comprehensive loss, net of tax | ' | ' | -2,569 | ' | ' | ' |
Stock issued under equity incentive plans, value | 113 | -5 | ' | ' | ' | ' |
Stock issued under equity incentive plans, shares | 75 | ' | ' | ' | ' | ' |
Purchase of common stock, value | -1,204 | ' | ' | ' | ' | ' |
Purchase of common stock, shares | -22 | ' | ' | ' | ' | ' |
Stock- based compensation | 5,625 | ' | ' | ' | ' | ' |
Tax benefit from equity incentive plans | 310 | ' | ' | ' | ' | ' |
Cash dividends paid -- $.24, $.24 and $.24 per share of common stock for year ended September 2014, 2013 and 2012, respectively | ' | -6,429 | ' | ' | ' | ' |
Balance at Sep. 30, 2014 | $20,669 | $803,059 | ($5,372) | ($36,078) | $223 | $782,501 |
Balance (in shares) at Sep. 30, 2014 | 26,789 | ' | ' | ' | ' | ' |
CONSOLIDATED_STATEMENTS_OF_CHA1
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | ' | ' | ' |
Cash dividends paid, per share of common stock | $0.24 | $0.24 | $0.24 |
SUMMARY_OF_SIGNIFICANT_ACCOUNT
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |||||||||||
Organization and Nature of the Business: We design, develop and manufacture products which are mainly electronic in nature such as mass transit fare collection systems, air and ground combat training systems, and secure communications products. We provide services such as specialized military training exercises, including live, virtual and constructive training exercises and support, and we operate and maintain fare systems for mass transit customers. Our principal lines of business are transportation fare collection systems and services, defense services, and defense systems. Our principal customers for defense products and services are the U.S. and foreign governments. Our transportation fare collection systems and services are sold primarily to large local government agencies worldwide. | |||||||||||
Principles of Consolidation: The consolidated financial statements include the accounts of Cubic Corporation, its majority-owned subsidiaries and its 50% owned variable interest entity, Transaction Systems Limited (TranSys). We consolidate variable interest entities (VIE) when we determine that Cubic is the primary beneficiary of the VIE. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
Foreign Currency Transactions and Translation: Our reporting currency is the U.S. dollar. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and our Consolidated Statements of Income are translated at the average exchange rates in effect during the applicable periods. The resulting unrealized cumulative translation adjustments are recorded as a component of other comprehensive income (loss) in our Consolidated Statements of Comprehensive Income. Cash flows from our operations in foreign countries are translated at the average rate for the applicable period. The effect of exchange rates on cash balances held in foreign currencies are separately reported in our Consolidated Statements of Cash Flows. | |||||||||||
Transactions denominated in currencies other than our or our subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our Consolidated Balance Sheets related to such transactions result in transaction gains and losses that are reflected in our Consolidated Statements of Income as either unrealized (based on the applicable period end translation) or realized (upon settlement of the transactions). Total transaction gains (losses), which are related primarily to advances to foreign subsidiaries amounted to $(1.3) million, $(0.8) million and $0.7 million in 2014, 2013 and 2012, respectively. | |||||||||||
Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include the estimated total costs at completion of our long-term contracts, estimated loss contingencies, estimated self-insurance liabilities, estimated discounted future cash flows of our reporting units used for goodwill impairment testing and estimated future cash flows for our long-lived asset impairment testing, estimated discounted cash flows used for valuation of intangible assets in business combinations, and estimated rates of return and discount rates related to our defined benefit pension plans. Actual results could differ from our estimates. | |||||||||||
Risks and Uncertainties: We are subject to the normal risks and uncertainties of performing large, multiyear, often fixed-price contracts. In addition, we are subject to audit of incurred costs related to many of our U.S. government contracts. These audits could produce different results than we have estimated; however, our experience has been that our costs are acceptable to the government. | |||||||||||
Cash Equivalents: We consider highly liquid investments with maturity of three months or less when purchased to be cash equivalents. | |||||||||||
Restricted Cash: Restricted cash represents cash that is restricted as to withdrawal usage for legal or contractual reasons. Restricted cash is classified either as current or non-current, depending upon the date of the lapse of the respective restriction. | |||||||||||
Concentration of Credit Risk: We have established guidelines pursuant to which our cash and cash equivalents are diversified among various money market instruments and investment funds. These guidelines emphasize the preservation of capital by requiring minimum credit ratings assigned by established credit organizations. We achieve diversification by specifying maximum investments in each instrument type and issuer. The majority of these investments are not on deposit in federally insured accounts. | |||||||||||
Marketable Securities: Marketable securities consist of exchange traded funds whose underlying assets consist of highly liquid debt instruments with short-term maturities and certificates of deposit with banks. Marketable securities are classified and accounted for as available-for-sale. These investments are recorded at fair value in the accompanying Consolidated Balance Sheets and the change in fair value is recorded, net of taxes, as a component of other comprehensive income. There have been no significant realized or unrealized gains or losses on these marketable securities to date. Marketable securities have been classified as current assets in the accompanying Consolidated Balance Sheets based upon the nature of the securities and availability for use in current operations. | |||||||||||
Accounts Receivable: Receivables consist primarily of amounts due from U.S. and foreign governments for defense products and services and local government agencies for transportation systems. Due to the nature of our customers, we generally do not require collateral. We have limited exposure to credit risk as we have historically collected substantially all of our receivables from government agencies. We generally require no allowance for doubtful accounts for these customers. | |||||||||||
Inventories: We state our inventories at the lower of cost or market. We determine cost using the first-in, first-out (FIFO) method, which approximates current replacement cost. We value our work in process at the actual production and engineering costs incurred to date, including applicable overhead. For contracts with the U.S. government our work in process also includes general and administrative costs. Any inventoried costs in excess of estimated realizable value are immediately charged to cost of sales. Where contracts include advances, performance-based payments and progress payments, we reflect the advances as an offset against any related inventory balances. We include qualifying contract costs allocable to units-of-delivery contracts as inventory. We also receive performance-based payments and progress payments associated with certain of these contracts based on the billing terms in the underlying contracts. Pursuant to contract provisions, agencies of the U.S. government and certain other customers have title to, or security interest in, inventories related to such contracts as a result of advances, performance-based payments, and progress payments. Contract advances, performance-based payments and progress payments received are recorded as an offset against the related inventory balances for contracts that that are accounted for on a percentage-of-completion basis using units-of-delivery as the basis to measure progress toward completing the contract. This determination is performed on a contract by contract basis. Any amount of payments received in excess of the cumulative amount of accounts receivable and inventoried costs for a contract is classified as customer advances, which is classified as a liability on the balance sheet. | |||||||||||
Long-term capitalized contract costs: Long-term capitalized contract costs include costs incurred on a contract to develop and manufacture a transportation fare system for a customer for which revenue recognition did not begin until the customer began operating the system in the fourth quarter of 2013. These capitalized costs are being recognized in cost of sales based upon the ratio of revenue recorded during a period compared to the revenue expected to be recognized over the term of the contract. | |||||||||||
Property, Plant and Equipment: We carry property, plant and equipment at cost. We provide depreciation in amounts sufficient to amortize the cost of the depreciable assets over their estimated useful lives. Generally, we use straight-line methods for depreciable real property over estimated useful lives or the term of the underlying lease for leasehold improvements. We use accelerated methods (declining balance and sum-of-the-years-digits) for machinery and equipment over their estimated useful lives. | |||||||||||
Goodwill and Purchased Intangibles: We evaluate goodwill for potential impairment annually as of July 1, or when circumstances indicate that the carrying value may not be recoverable. The test is performed by comparing the fair value of each of our reporting units, which are consistent with our operating segments, to its carrying value, including recorded goodwill. If the carrying value exceeds the fair value, we measure impairment by comparing the implied fair value of goodwill to its carrying value, and any impairment determined would be recorded in the current period. Our purchased intangible assets are subject to amortization and we use a combination of straight-line and accelerated methods, based on the expected cash flows from the assets. See Note 7 for a discussion of the impairment of our goodwill in 2013. | |||||||||||
Impairment of Long-Lived Assets: We generally evaluate the carrying values of long-lived assets other than goodwill for impairment only if events or changes in facts and circumstances indicate that carrying values may not be recoverable. If we determined there was any impairment, we would measure it by comparing the fair value of the related asset to its carrying value and record the difference in the current period. Fair value is generally determined by identifying estimated discounted cash flows to be generated by those assets. We have not recorded any impairment of long-lived assets for the years ended September 30, 2014, 2013 and 2012. | |||||||||||
Recognizing assets acquired and liabilities assumed in a business combination: Acquired assets and assumed liabilities are recognized in a business combination on the basis of their fair values at the date of acquisition. We assess fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, using a variety of methods including income approaches such as present value techniques or cost approaches such as the estimation of current selling prices and replacement values. Fair value of the assets acquired and liabilities assumed, including intangible assets, and contingent payments, are measured based on the assumptions and estimations with regards to the variable factors such as the amount and timing of future cash flows for the asset or liability being measured, appropriate risk-adjusted discount rates, nonperformance risk, or other factors that market participants would consider. Upon acquisition, we determine the estimated economic lives of the acquired intangible assets for amortization purposes, which are based on the underlying expected cash flows of such assets. Adjustments to inventory are based on the fair market value of inventory and amortized into income based on the period in which the underlying inventory is sold. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Actual results may vary from projected results and assumptions used in the fair value assessments. | |||||||||||
Customer Advances: We receive advances, performance-based payments and progress payments from customers that may exceed revenues recognized on certain contracts, including contracts with agencies of the U.S. government. We classify such advances, other than those reflected as a reduction of receivables or inventories, as current liabilities. | |||||||||||
Contingencies: We establish reserves for loss contingencies when, in the opinion of management, the likelihood of liability is probable and the extent of such liability is reasonably estimable. Estimates, by their nature, are based on judgment and currently available information and involve a variety of factors, including the type and nature of the litigation, claim or proceeding, the progress of the matter, the advice of legal counsel, our defenses and our experience in similar cases or proceedings as well as our assessment of matters, including settlements, involving other defendants in similar or related cases or proceedings. We may increase or decrease our legal reserves in the future, on a matter-by-matter basis, to account for developments in such matters. | |||||||||||
Derivative Financial Instruments: All derivatives are recorded at fair value, however, the classification of gains and losses resulting from changes in the fair values of derivatives are dependent on the intended use of the derivative and its resulting designation. If a derivative is designated as a fair value hedge, then a change in the fair value of the derivative is offset against the change in the fair value of the underlying hedged item and only the ineffective portion of the hedge, if any, is recognized in cost of sales. If a derivative is designated as a cash flow hedge, then the effective portion of a change in the fair value of the derivative is recognized as a component of accumulated other comprehensive income until the underlying hedged item is recognized in cost of sales, or the forecasted transaction is no longer probable of occurring. If a derivative does not qualify as a highly effective hedge, a change in fair value is immediately recognized in earnings. We formally document hedging relationships for all derivative hedges and the underlying hedged items, as well as the risk management objectives and strategies for undertaking the hedge transactions. | |||||||||||
Defined Benefit Pension Plans: Some of our employees are covered by defined benefit pension plans. The net periodic cost of our plans is determined using several actuarial assumptions, the most significant of which are the discount rate and the long-term rate of return on plan assets. We recognize on a plan-by-plan basis the funded status of our defined benefit pension plans as either an asset or liability on our balance sheets, with a corresponding adjustment to accumulated other comprehensive income (loss), net of tax, in shareholders’ equity. The funded status is measured as the difference between the fair value of the plan assets and the benefit obligation of the plan. | |||||||||||
Comprehensive Income: Other comprehensive income (loss), which is comprised of unrealized gains and losses on foreign currency translation adjustments, unrealized gains and losses on cash flow hedges, net of tax, unrealized gains and losses on available-for-sale securities, net of tax and pension liability adjustments, net of tax is included in our Consolidated Statement of Comprehensive Income as other comprehensive income (loss). | |||||||||||
Revenue Recognition: We generate revenue from the sale of products such as mass transit fare collection systems, air and ground combat training systems, and secure communications products. We also generate revenue from services we provide such as specialized military training exercises, including live, virtual and constructive training exercises and support, and we operate and maintain fare systems for mass transit customers. We classify sales as products or services in our Consolidated Statements of Income based on the attributes of the underlying contracts. | |||||||||||
We recognize sales and profits under our long-term fixed-price contracts which require a significant amount of development effort in relation to total contract value using the cost-to-cost percentage-of-completion method of accounting. We record sales and profits based on the ratio of contract costs incurred to estimated total contract costs at completion. Contract costs include material, labor and subcontracting costs, as well as an allocation of indirect costs. For contracts with the U.S. federal government, general and administrative costs are included in contract costs; however, for purposes of revenue measurement, general and administrative costs are not considered contract costs for any other customers. Costs are recognized as incurred for contracts accounted for under the cost- to-cost percentage-of-completion method. | |||||||||||
For certain other long-term, fixed price production contracts not requiring substantial development effort we use the units-of-delivery percentage-of-completion method as the basis to measure progress toward completing the contract and recognizing sales. The units-of delivery measure recognizes revenues as deliveries are made to the customer generally using unit sales values in accordance with the contract terms. Costs of sales are recorded as deliveries are made. We estimate profit as the difference between total estimated revenue and total estimated cost of a contract and recognize that profit over the life of the contract based on deliveries. | |||||||||||
For long-term fixed price contracts, we only include amounts representing contract change orders, claims or other items in the contract value when they can be reliably estimated and we consider realization probable. Changes in estimates of sales, costs and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. A significant change in one or more of these estimates could have a material effect on our consolidated financial position or results of operations. | |||||||||||
We record sales under cost-reimbursement-type contracts as we incur the costs. The Federal Acquisition Regulations provide guidance on the types of costs that we will be reimbursed in establishing the contract price. We consider incentives or penalties and awards applicable to performance on contracts in estimating sales and profits, and record them when there is sufficient information to assess anticipated contract performance. We do not recognize incentive provisions that increase or decrease earnings based solely on a single significant event until the event occurs. | |||||||||||
We occasionally enter into contracts that include multiple deliverables such as the construction or upgrade of a system and subsequent services to operate and maintain the delivered system. For such contracts, arrangement consideration is allocated at the inception of the arrangement to all deliverables using the relative-selling-price method. Under the relative-selling-price method, the selling price for each deliverable is determined using vendor specific objective evidence (VSOE) of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists for a deliverable, which is typically the case for our contracts, the guidance requires us to determine the best estimate of the selling price, which is the price at which we would sell the deliverable if it were sold on a standalone basis. In estimating the selling price of the deliverable on a standalone basis, we consider our overall pricing models and objectives, including the factors we contemplate in negotiating our contracts with our customers. The pricing models and objectives that we use are generally based upon a cost-plus margin approach, with the estimated margin based in part on qualitative factors such as perceived customer pricing sensitivity and competitive pressures. | |||||||||||
Once the contract value is allocated to the separate deliverables under a multiple-element arrangement, revenue recognition guidance relevant to each contractual element is followed. For example, for the long-term construction portion of a contract we generally use the percentage-of completion method and for the services portion we generally recognize the service revenues on a straight-line basis over the contractual service period or based on measurable units of work performed or incentives earned. | |||||||||||
For certain of our multiple-element arrangements, the contract specifies that we will not be paid upon the delivery of certain units of accounting, but rather we will be paid when subsequent performance obligations are satisfied. Generally, in these cases the allocation of arrangement consideration to the up-front deliverables is limited, in some cases to zero, and revenue is reduced, in some cases to zero for the delivery of up-front units of accounting. In such situations, if the costs associated with the delivered item exceed the amount of allocable arrangement consideration, we defer the direct and incremental costs associated with the delivered item that are in excess of the allocated arrangement consideration as capitalized contract costs. We assess recoverability of these costs by comparing the recorded asset to the deferred revenue in excess of the transaction price allocated to the remaining deliverables in the arrangement. Capitalized contract costs are subsequently recognized in income in a manner that is consistent with revenue recognition pattern for the arrangement as a whole. If no pattern of revenue recognition can be reasonably predicted for the arrangement, the capitalized costs are amortized on a straight-line basis. | |||||||||||
Revenue under our service contracts with the U.S. government is recorded under the cost-to cost percentage-of-completion method. Award fees and incentives related to performance under these service contracts are accrued during the performance of the contract based on our historical experience and estimates of success with such awards. | |||||||||||
Revenue under contracts for services other than those with the U.S. government and those associated with design, development, or production activities is recognized either as services are performed or when a contractually required event has occurred, depending on the contract. For such contracts that contain measurable units of work performed we recognize sales when the units of work are completed. Certain of our transportation systems service contracts contain service level or system usage incentives, for which we recognize revenues when the incentive award is fixed or determinable. These contract incentives are generally based upon monthly service levels or monthly performance and become fixed or determinable on a monthly basis. However, one of our transportation systems service contracts contains annual system usage incentives which are based upon system usage compared to annual baseline amounts. For this contract the annual system usage incentives are not considered fixed or determinable until the end of the contract year for which the incentives are measured, which falls within the second quarter of our fiscal year. Revenue under such contracts that do not contain measurable units of work performed, which is generally the case for our service contracts, is recognized on a straight- line basis over the contractual service period, unless evidence suggests that the revenue is earned, or obligations fulfilled, in a different manner. Costs incurred under these services contracts are expensed as incurred. | |||||||||||
We make provisions in the current period to fully recognize any anticipated losses on contracts. If we receive cash on a contract prior to revenue recognition or in excess of inventoried costs, we classify it as a customer advance on the balance sheet. | |||||||||||
Research and Development (R&D) : We record the cost of company sponsored R&D activities as the expenses are incurred. The cost of engineering and product development activities incurred in connection with the performance of work on our contracts is included in cost of sales as they are directly related to contract performance. | |||||||||||
Stock-Based Compensation: Restricted stock units awards (RSUs) are granted to eligible employees and directors and represent rights to receive shares of common stock at a future date if vesting occurs. RSUs granted to date have either time-based vesting or performance-based vesting. Compensation expense for all restricted stock unit awards is measured at fair value at the grant date and recognized based upon the number of RSUs that ultimately vest. We determine the fair value of RSUs based on the closing market price of our common stock on the grant date. The grant date of the performance-based RSUs takes place when the grant is authorized and the specific achievement goals are communicated. | |||||||||||
Compensation expense for time-based vesting awards is recorded on a straight-line basis over the requisite service period, adjusted by estimated forfeiture rates. Vesting of performance-based RSUs is tied to achievement of specific company goals over the measurement period, which is generally a three-year period from the date of the grant. For purposes of measuring compensation expense for performance-based RSUs, at each reporting date we estimate the number of shares for which vesting is deemed probable based on management’s expectations regarding achievement of the relevant performance criteria, adjusted by estimated forfeiture rates. Compensation expense for the number of shares ultimately expected to vest is recognized on a straight-line basis over the requisite service period for the performance-based RSUs. The recognition of compensation expense associated with performance-based RSUs requires judgment in assessing the probability of meeting the performance goals. For performance-based RSUs, there may be significant expense recognition or reversal of recognized expense in periods in which there are changes in the assessed probability of meeting performance-based vesting criteria. | |||||||||||
Income Taxes: Our provision for income taxes includes federal, state, local and foreign income taxes. We recognize tax credits, primarily for R&D, as a reduction of our provision for income taxes in the year in which they are available for tax purposes. We provide deferred income taxes on temporary differences between assets and liabilities for financial reporting and tax purposes as measured by enacted tax rates we expect to apply when the temporary differences are settled or realized. We establish valuation allowances for deferred tax assets when the amount of future taxable income we expect is not likely to support the use of the deduction or credit. We evaluate the capital requirements of our foreign subsidiaries and determine the amount of excess capital, if any, that is available for distribution. We provide for U.S. taxes on the amount we determine to be excess capital available for distribution. U.S. taxes are not provided on amounts we consider to be indefinitely reinvested. | |||||||||||
Net Income Per Share: Basic net income per share (EPS) is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period, including vested RSUs. | |||||||||||
Diluted EPS is computed by dividing the net income for the period by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares consist of dilutive restricted stock units. Dilutive restricted stock units are calculated based on the average share price for each fiscal period using the treasury stock method. For RSUs with performance-based vesting, no common equivalent shares are included in the computation of diluted EPS until the related performance criteria have been met. | |||||||||||
Basic and diluted EPS are computed as follows (amounts in thousands, except per share data): | |||||||||||
Year Ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net income attributable to Cubic | $ | 69,491 | $ | 25,086 | $ | 97,427 | |||||
Weighted average shares - basic | 26,787 | 26,736 | 26,736 | ||||||||
Effect of dilutive securities | 58 | 24 | — | ||||||||
Weighted average shares - diluted | 26,845 | 26,760 | 26,736 | ||||||||
Net income per share attributable to Cubic, basic | $ | 2.59 | $ | 0.94 | $ | 3.64 | |||||
Effect of dilutive securities | — | — | — | ||||||||
Net income per share attributable to Cubic, diluted | $ | 2.59 | $ | 0.94 | $ | 3.64 | |||||
Anti-dilutive employee share-based awards | — | — | — | ||||||||
Recent Accounting Pronouncements: | |||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists which requires companies to present in the financial statements an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward except to the extent such items are not available or not intended to be used at the reporting date to settle any additional income taxes that would result from the disallowance of a tax position. In such instances, the unrecognized tax benefit is required to be presented in the financial statements as a liability and not be combined with deferred tax assets. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Accordingly, we will adopt this standard in the first quarter of fiscal year 2015. We are currently evaluating the impact of adopting this guidance. | |||||||||||
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments contained in this update change the criteria for reporting discontinued operations and enhance the reporting requirements for discontinued operations. Under the revised standard, a discontinued operation must represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. Examples could include a disposal of a major line of business, a major geographical area, a major equity method investment, or other major parts of an entity. The revised standard will also allow an entity to have certain continuing cash flows or involvement with the component after the disposal. Additionally, the standard requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. This ASU is effective for reporting periods beginning after December 15, 2014 with early adoption permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issue. This adoption is not expected to have a significant impact on our financial statements. | |||||||||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance and will require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. ASU 2014-09 will be effective for us starting in the first quarter of fiscal 2018. ASU 2014-09 allows for two methods of adoption: (a) “full retrospective” adoption, meaning the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning the cumulative effect of applying ASU 2014-09 is recognized as an adjustment to the fiscal 2018 opening retained earnings balance. We have not yet determined which method of adoption we will select. As the new standard will supersede substantially all existing revenue guidance affecting us under GAAP, it could impact revenue and cost recognition on a significant number of contracts across our business segments, in addition to our business processes and our information technology systems. As a result, our evaluation of the effect of the new standard will likely extend over several future periods. | |||||||||||
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and provide related footnote disclosures. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. This adoption is not expected to have a significant impact on our financial statements. | |||||||||||
ACQUISITIONS
ACQUISITIONS | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
ACQUISITIONS | ' | |||||||
ACQUISITIONS | ' | |||||||
NOTE 2—ACQUISITIONS | ||||||||
Each of the following acquisitions has been treated as a business combination for accounting purposes. The results of operations of each acquired business has been included in our consolidated financial statements since the respective date of each acquisition. | ||||||||
Intific | ||||||||
On February 28, 2014 we acquired all of the outstanding capital stock of Intific Inc. (Intific). Intific is focused on software and game-based solutions in modeling and simulation, training and education, cyber warfare, and neuroscience. The acquisition of Intific expands the portfolio of services and customer base of our Cubic Defense Systems (CDS) segment. | ||||||||
For the year ended September 30, 2014, the amounts of Intific’s sales and net loss after taxes included in our Consolidated Statement of Income were $5.3 million and $4.2 million, respectively. Included in Intific’s operating results for the year ended September 30, 2014 are $0.2 million of transaction and acquisition related costs, and $3.7 million of compensation expense which was paid to Intific employees upon the close of the acquisition. | ||||||||
The acquisition date fair value of the consideration transferred was $12.4 million. Through September 30, 2014, we have paid cash of approximately $11.2 million to the seller and as of September 30, 2014 we have accrued a liability of $1.2 million for the remaining cash to be paid. | ||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): | ||||||||
Customer relationships | $ | 2 | ||||||
Technology | 0.7 | |||||||
Backlog | 0.7 | |||||||
Other intangible assets | 0.2 | |||||||
Accounts receivable | 1.5 | |||||||
Deferred tax assets | 1.5 | |||||||
Accounts payable and accrued expenses | (0.6 | ) | ||||||
Deferred tax liabilities | (1.5 | ) | ||||||
Other net assets acquired | 0.5 | |||||||
Net identifiable assets acquired | 5 | |||||||
Goodwill | 7.4 | |||||||
Net assets acquired | $ | 12.4 | ||||||
The fair values of purchased intangibles were determined using the valuation methodology deemed to be the most appropriate for each type of asset being valued. The customer relationships and backlog valuation used the excess earnings approach and the technology valuation used the replacement cost approach. | ||||||||
The intangible assets will be amortized using a combination of straight-line and accelerated methods based on the expected cash flows from the assets, over a weighted average useful life of two years from the date of acquisition and the amortization expense is not expected to be deductible for tax purposes. | ||||||||
The net deferred tax assets and liabilities offset each other to a negligible amount. However the deferred tax liabilities of $1.5 million were primarily recorded to reflect the tax impact of amortization related to identified intangible assets that is not expected to be deductible for tax purposes, net of acquisition consideration that is a tax deductible expense. The deferred tax assets of $1.5 million primarily related to the future tax deduction for the cancellation of unvested options. | ||||||||
The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of Intific with our existing CDS business and the acquired assembled workforce. The anticipated synergies include the ability to expand services offerings and cost reductions. The amount recorded as goodwill is allocated to our CDS segment and is not expected to be deductible for tax purposes. | ||||||||
The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of Intific for future periods is as follows (in millions): | ||||||||
Year Ended | ||||||||
September 30, | ||||||||
2015 | $ | 0.9 | ||||||
2016 | 0.7 | |||||||
2017 | 0.6 | |||||||
2018 | 0.5 | |||||||
2019 | 0.2 | |||||||
Thereafter | 0.1 | |||||||
ITMS | ||||||||
On November 26, 2013 we acquired all of the outstanding capital stock of Intelligent Transport Management Solutions Limited (ITMS) from Serco Limited. ITMS is a provider of traffic management systems technology, traffic and road enforcement and maintenance of traffic signals, emergency equipment and other critical road and tunnel infrastructure. The acquisition of ITMS expands the portfolio of services and customer base of our Cubic Transportation Systems (CTS) segment. | ||||||||
For the year ended September 30, 2014, the amounts of ITMS’ sales and net loss after taxes included in our Consolidated Statement of Income were $43.7 million and $2.3 million, respectively. Included in ITMS’ operating results are $0.5 million of transaction costs incurred during the year ended September 30, 2014. | ||||||||
The acquisition date fair value of the consideration transferred was $72.2 million. We paid the seller cash of $69.0 million in November 2013 and in May 2014, we paid the remaining cash of $3.2 million. | ||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): | ||||||||
Customer relationships | $ | 15.7 | ||||||
Intellectual property | 1.6 | |||||||
Backlog | 5.7 | |||||||
Supplier relationships | 0.6 | |||||||
Agreements with seller | 1.3 | |||||||
Accounts receivable - billed | 4.4 | |||||||
Accounts receivable - unbilled | 6.9 | |||||||
Deferred tax liabilities, net | (0.2 | ) | ||||||
Deferred revenue | (2.6 | ) | ||||||
Accounts payable and accrued expenses | (4.6 | ) | ||||||
Other net assets acquired | 2.6 | |||||||
Net identifiable assets acquired | 31.4 | |||||||
Goodwill | 40.8 | |||||||
Net assets acquired | $ | 72.2 | ||||||
The fair values of purchased intangibles were determined using the valuation methodology deemed to be the most appropriate for each type of asset being valued. The customer relationships and backlog valuation used the excess earnings approach and the non-compete agreement and seller agreements valuations used the with and without approach. The supplier relationship and intellectual property valuations used the replacement cost approach. | ||||||||
The intangible assets will be amortized using a combination of straight-line and accelerated methods based on the expected cash flows from the assets, over a weighted average useful life of two years from the date of acquisition. Future amortization of approximately $19.5 million of purchased intangibles is not expected to be deductible for tax purposes. | ||||||||
The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of ITMS with our existing CTS business and the acquired assembled workforce. The anticipated synergies include the ability to expand services offerings and cost reductions. The amount recorded as goodwill is allocated to our CTS segment and is not expected to be deductible for tax purposes. | ||||||||
The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of ITMS for future periods is as follows (in millions): | ||||||||
Year Ended | ||||||||
September 30, | ||||||||
2015 | $ | 5.9 | ||||||
2016 | 4.9 | |||||||
2017 | 3.9 | |||||||
2018 | 2.9 | |||||||
2019 | 0.9 | |||||||
Thereafter | 0.1 | |||||||
AIS | ||||||||
On July 1, 2013 we acquired certain assets of Advanced Interactive Systems (AIS) and all of the capital stock of its foreign subsidiaries through a bankruptcy auction. AIS is a supplier of live fire specialized range facilities, virtual simulation products, engineering design and project management services for counter-terrorism, law enforcement and military forces worldwide. For the year ended September 30, 2014 the amount of AIS’ sales and net loss after taxes included in our Consolidated Statement of Income were $8.8 million and $0.8 million, respectively. For the year ended September 30, 2013 the amount of AIS’ sales and net income after taxes included in our Consolidated Statement of Income were $2.0 million and $0.1 million, respectively. | ||||||||
We paid cash of $2.0 million from our existing cash resources, net of cash acquired, for the assets of AIS. | ||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date including the retrospective adjustments described above (in millions): | ||||||||
Customer relationships | $ | 1.4 | ||||||
Technology | 0.9 | |||||||
Backlog | 0.6 | |||||||
Other net liabilities assumed | (2.8 | ) | ||||||
Net identifiable assets acquired | 0.1 | |||||||
Goodwill | 1.9 | |||||||
Net assets acquired | $ | 2 | ||||||
The amount recorded as goodwill is allocated to our CDS segment and is not expected to be deductible for tax purposes. | ||||||||
PSMC | ||||||||
On July 1, 2013 we acquired certain assets of PS Management Consultants Pty Ltd. (PSMC). PSMC is a specialist project management and engineering enterprise, based in Canberra, Australia. For the year ended September 30, 2014 the amount of PSMC’s sales and net income after taxes included in our Consolidated Statement of Income were $3.8 million and $0.1 million, respectively. For the year ended September 30, 2013 the amount of PSMC’s sales and net income after taxes included in our Consolidated Statement of Income were $1.7 million and $0.1 million, respectively. | ||||||||
We paid cash of $1.3 million from our existing cash resources to acquire PSMC. The following table summarizes the estimated fair values of the assets acquired at the acquisition date (in millions): | ||||||||
Customer relationships | $ | 0.6 | ||||||
Backlog | 0.1 | |||||||
Net identifiable assets acquired | 0.7 | |||||||
Goodwill | 0.6 | |||||||
Net assets acquired | $ | 1.3 | ||||||
The amount recorded as goodwill is allocated to our CDS segment and is not expected to be deductible for tax purposes. | ||||||||
NextBus | ||||||||
On January 24, 2013, we acquired all of the outstanding capital stock of NextBus, Inc. (NextBus) from Webtech Wireless, Inc. NextBus provides products and services to transit agencies which provide real-time passenger information to transit passengers, expanding the portfolio of services and customer base of our CTS segment. For the year ended September 30, 2014 the amount of NextBus’ sales and net loss after taxes included in our Consolidated Statement of Income were $10.1 million and $0.6 million, respectively. For the year ended September 30, 2013 the amount of NextBus’ sales and net loss after taxes included in our Consolidated Statement of Income were $7.8 million and $0.4 million, respectively. Included in the NextBus operating results are $0.2 million in transaction related costs incurred during the year ended September 30, 2013. | ||||||||
We paid the seller cash of $20.2 million for NextBus from our existing cash resources. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): | ||||||||
Customer relationships | $ | 8.8 | ||||||
Accounts receivable, net | 2.2 | |||||||
Backlog | 1.7 | |||||||
Acquired technology | 1.3 | |||||||
Corporate trade names | 1 | |||||||
Accounts payable and accrued expenses | (1.1 | ) | ||||||
Deferred tax liabilities, net | (3.3 | ) | ||||||
Other net liabilities assumed | (1.2 | ) | ||||||
Net identifiable assets acquired | 9.4 | |||||||
Goodwill | 10.8 | |||||||
Net assets acquired | $ | 20.2 | ||||||
The fair values of purchased intangibles were determined using the valuation methodology deemed to be the most appropriate for each type of asset being valued. Each of the valuation methodologies used were various methods under the income approach. The customer relationships and backlog valuations used the excess earnings approach. The trade names and technology valuations used the relief from royalty approach. | ||||||||
The net deferred tax liabilities were primarily recorded to reflect the tax impact of the identified intangible assets that will not generate tax deductible amortization expense. | ||||||||
The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of NextBus and our CTS business and the acquired assembled workforce. The anticipated synergies include the ability to expand services offerings and cost reductions. The amount recorded as goodwill is allocated to our CTS segment and is not expected to be deductible for tax purposes. | ||||||||
The intangible assets are being amortized using a combination of accelerated and straight-line methods based on the expected cash flows from the assets, over a weighted average useful life of 5 years from the date of acquisition. The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of NextBus for future periods is as follows (in millions): | ||||||||
Year Ended | ||||||||
September 30, | ||||||||
2015 | $ | 1.5 | ||||||
2016 | 1.4 | |||||||
2017 | 1.3 | |||||||
2018 | 1.2 | |||||||
2019 | 1.1 | |||||||
Thereafter | 3.6 | |||||||
NEK | ||||||||
On December 14, 2012, Cubic acquired from NEK Advanced Securities Group, Inc. (Seller) the customer contracts and operating assets of NEK Special Programs Group LLC (NEK), which consists of the Seller’s Special Operation Forces training business based in Fayetteville, North Carolina and Colorado Springs, Colorado. | ||||||||
For the year ended September 30, 2014 the amount of NEK’s sales and net loss after taxes included in our Consolidated Statement of Income were $45.0 million and $0.6 million, respectively. For the year ended September 30, 2013 the amount of NEK’s sales and net loss after taxes included in our Consolidated Statement of Income were $31.6 million and $0.5 million, respectively. NEK’s net loss after tax in 2013 excludes any allocation of the goodwill impairment described in Note 7 that is recognized at the reporting unit level. Included in our operating results are $0.6 million in transaction related costs incurred during the year ended September 30, 2013 related to the NEK acquisition. | ||||||||
The acquisition-date fair value of consideration transferred is $52.6 million, which has been paid to the seller in cash from our existing cash resources. Of the $52.6 million of cash consideration that was paid to the Seller, $2.4 million paid in fiscal 2014 and $7.8 million paid in fiscal 2013 were contingent upon certain events that occurred between the acquisition date and September 30, 2014, including the novation of certain of the Seller’s contracts to NEK. | ||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): | ||||||||
Customer relationships | $ | 13.3 | ||||||
Corporate trade names | 4.9 | |||||||
Non-compete agreements | 0.2 | |||||||
Accounts receivable -billed | 3.1 | |||||||
Accounts receivable -unbilled | 7.7 | |||||||
Accounts payable | (3.0 | ) | ||||||
Other net liabilities assumed | (0.4 | ) | ||||||
Net identifiable assets acquired | 25.8 | |||||||
Goodwill | 26.8 | |||||||
Net assets acquired | $ | 52.6 | ||||||
The fair values of purchased intangibles were determined using the valuation methodology deemed to be the most appropriate for each type of asset being valued. Each of the valuation methodologies used were various methods under the income approach. The trade names valuation used the relief from royalty approach. The customer relationships valuation used the excess earnings approach and the non-compete agreements valuation used the with and without approach. The intangible assets are being amortized using a combination of straight-line and accelerated methods based on the expected cash flows from the assets, over a weighted average useful life of four years from the date of acquisition. | ||||||||
The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of NEK and our Mission Support Services (MSS) business and the acquired assembled workforce. The anticipated synergies include the ability to expand services offerings and cost reductions. The amount recorded as goodwill is allocated to our MSS segment and is expected to be deductible for tax purposes. | ||||||||
The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of NEK for future periods is as follows (in millions): | ||||||||
Year Ended | ||||||||
September 30, | ||||||||
2015 | $ | 2.9 | ||||||
2016 | 2.4 | |||||||
2017 | 1.9 | |||||||
2018 | 1.4 | |||||||
2019 | 0.8 | |||||||
Thereafter | 2.8 | |||||||
Pro forma information | ||||||||
The following unaudited pro forma information presents our consolidated results of operations as if Intific, ITMS, AIS, PSMC, NextBus and NEK had been included in our consolidated results since October 1, 2012 (in millions): | ||||||||
Years Ended | ||||||||
September 30, | ||||||||
2014 | 2013 | |||||||
Net sales | $ | 1,411.0 | $ | 1,460.6 | ||||
Net income attributable to Cubic | 69.2 | 31.2 | ||||||
The pro forma information includes adjustments to give effect to pro forma events that are directly attributable to the acquisitions and have a continuing impact on operations including the amortization of purchased intangibles and the elimination of interest expense for the repayment of debt. No adjustments were made for transaction expenses, other adjustments that do not reflect ongoing operations or for operating efficiencies or synergies. The pro forma financial information is not necessarily indicative of what the consolidated financial results of our operations would have been had the acquisitions been completed on October 1, 2012, and it does not purport to project our future operating results. | ||||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU
FAIR VALUE OF FINANCIAL INSTRUMENTS | 12 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | |||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | |||||||||||||||||||||||||
NOTE 3—FAIR VALUE OF FINANCIAL INSTRUMENTS | ||||||||||||||||||||||||||
The valuation techniques required to determine fair value are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. The two types of inputs create the following fair value hierarchy: | ||||||||||||||||||||||||||
· | Level 1 - Quoted prices for identical instruments in active markets. | |||||||||||||||||||||||||
· | Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. | |||||||||||||||||||||||||
· | Level 3 - Significant inputs to the valuation model are unobservable. | |||||||||||||||||||||||||
The fair value of cash equivalents and short-term investments approximates their cost. The fair value of our available for sale marketable securities is determined based on quoted market prices for identical securities. Derivative financial instruments are measured at fair value, the material portions of which are based on active or inactive markets for identical or similar instruments or model-derived valuations whose inputs are observable. Where model-derived valuations are appropriate, we use the applicable credit spread as the discount rate. Credit risk related to derivative financial instruments is considered minimal and is managed by requiring high credit standards for counterparties and through periodic settlements of positions. | ||||||||||||||||||||||||||
At September 30, 2013, the estimated fair value of the liability for contingent consideration payable to the seller of NEK was $3.5 million, which was equal to the maximum possible contingent payment. We paid the Seller $3.5 million during fiscal 2014 upon the resolution of the related contingencies and the liability was reduced to zero. Prior to the payment of the contingent consideration we had estimated the fair value of the contingent consideration using a probability-weighted discounted cash flow model. There was no change in the fair value of the contingent consideration liability between the date of the acquisition of NEK and September 30, 2014 other than for payments of the contingent consideration amount to the Seller; therefore, there has been no change in contingent consideration recorded in operations. | ||||||||||||||||||||||||||
The following table presents assets and liabilities measured and recorded at fair value on our balance sheets on a recurring basis (in thousands): | ||||||||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash equivalents | $ | 56,333 | $ | — | $ | — | $ | 56,333 | $ | 125,512 | $ | — | $ | — | $ | 125,512 | ||||||||||
Marketable securities | 1,196 | — | — | 1,196 | 4,055 | — | — | 4,055 | ||||||||||||||||||
Current derivative assets | — | 7,389 | — | 7,389 | — | 1,597 | — | 1,597 | ||||||||||||||||||
Noncurrent derivative assets | — | 5,920 | — | 5,920 | — | 6,096 | — | 6,096 | ||||||||||||||||||
Total assets measured at fair value | 57,529 | 13,309 | — | 70,838 | 129,567 | 7,693 | — | 137,260 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Current derivative liabilities | — | 6,645 | — | 6,645 | — | 2,360 | — | 2,360 | ||||||||||||||||||
Noncurrent derivative liabilities | — | 5,878 | — | 5,878 | — | 5,366 | — | 5,366 | ||||||||||||||||||
Contingent consideration to seller of NEK | — | — | — | — | — | — | 3,485 | 3,485 | ||||||||||||||||||
Total liabilities measured at fair value | $ | — | $ | 12,523 | $ | — | $ | 12,523 | $ | — | $ | 7,726 | $ | 3,485 | $ | 11,211 | ||||||||||
We carry financial instruments, including cash equivalents, accounts receivable, accounts payable and accrued liabilities at cost, which we believe approximates fair value because of the short-term maturity of these instruments. | ||||||||||||||||||||||||||
The fair value of long-term debt is calculated by discounting the value of the note based on market interest rates for similar debt instruments, which is a Level 2 technique. The following table presents the estimated fair value and carrying value of our long-term debt (in millions): | ||||||||||||||||||||||||||
September 30, | 2014 | 2013 | ||||||||||||||||||||||||
Fair value | $ | 99.6 | $ | 95.8 | ||||||||||||||||||||||
Carrying value | 102.4 | 102.9 | ||||||||||||||||||||||||
Due to the impairment of goodwill for MSS reporting unit at July 1, 2013, the goodwill for MSS was measured at its estimated fair value at July 1, 2013. We estimated the fair value of the goodwill primarily based on the discounted projected cash flows of the underlying MSS operations and based upon market multiples from publicly traded comparable companies, which are Level 3 fair value measurement techniques. See Note 7 for a further discussion of the goodwill impairment. We did not have any significant non-financial assets or liabilities measured at fair value on a non-recurring basis in 2013 or 2014 except for the MSS goodwill at July 1, 2013 and the fair value of assets and liabilities acquired in business acquisitions. | ||||||||||||||||||||||||||
ACCOUNTS_RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
ACCOUNTS RECEIVABLE | ' | |||||||
ACCOUNTS RECEIVABLE | ' | |||||||
NOTE 4—ACCOUNTS RECEIVABLE | ||||||||
The components of accounts receivable under long-term contracts are as follows (in thousands): | ||||||||
September 30, | 2014 | 2013 | ||||||
U.S. Government Contracts: | ||||||||
Amounts billed | $ | 41,588 | $ | 51,529 | ||||
Recoverable costs and accrued profits on progress completed—not billed | 66,657 | 60,435 | ||||||
108,245 | 111,964 | |||||||
Commercial Customers: | ||||||||
Amounts billed | 80,283 | 47,454 | ||||||
Recoverable costs and accrued profits on progress completed—not billed | 191,417 | 221,911 | ||||||
271,700 | 269,365 | |||||||
379,945 | 381,329 | |||||||
Less unbilled amounts not currently due—commercial customers | (15,870 | ) | (19,021 | ) | ||||
$ | 364,075 | $ | 362,308 | |||||
A portion of recoverable costs and accrued profits on progress completed is billable under progress or milestone payment provisions of the related contracts. The remainder of these amounts is billable upon delivery of products or furnishing of services, with an immaterial amount subject to retainage provisions of the contracts. It is anticipated that we will bill and collect substantially the entire unbilled portion of receivables identified as current assets under progress billing provisions of the contracts or upon completion of milestones and/or acceptance by the customers during fiscal 2015. The amount classified as not currently due is an estimate of the amount of long-term contract accounts receivable that will not be collected within one year from September 30, 2014 under transportation systems contracts in the U.S., Australia and the U.K. | ||||||||
INVENTORIES
INVENTORIES | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
INVENTORIES | ' | |||||||
INVENTORIES | ' | |||||||
NOTE 5—INVENTORIES | ||||||||
Significant components of inventories are as follows (in thousands): | ||||||||
September 30, | 2014 | 2013 | ||||||
Work in process and inventoried costs under long-term contracts | $ | 58,440 | $ | 80,918 | ||||
Materials and purchased parts | 125 | 693 | ||||||
Customer advances | (19,790 | ) | (21,865 | ) | ||||
$ | 38,775 | $ | 59,746 | |||||
At September 30, 2014, work in process and inventoried costs under long-term contracts includes approximately $2.3 million in costs incurred outside the scope of work or in advance of a contract award, compared to $5.8 million as of September 30, 2013. We believe it is probable that we will recover the costs inventoried at September 30, 2014, plus a profit margin, under contract change orders or awards within the next year. | ||||||||
Costs we incur for certain U.S. federal government contracts include general and administrative costs as allowed by government cost accounting standards. The amounts remaining in inventory at September 30, 2014 and 2013 were $2.4 million and $7.1 million, respectively. | ||||||||
PROPERTY_PLANT_AND_EQUIPMENT
PROPERTY, PLANT AND EQUIPMENT | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
PROPERTY, PLANT AND EQUIPMENT | ' | |||||||
PROPERTY, PLANT AND EQUIPMENT | ' | |||||||
NOTE 6—PROPERTY, PLANT AND EQUIPMENT | ||||||||
Significant components of property, plant and equipment are as follows (in thousands): | ||||||||
September 30, | 2014 | 2013 | ||||||
Land and land improvements | $ | 16,056 | $ | 15,996 | ||||
Buildings and improvements | 49,347 | 45,854 | ||||||
Machinery and other equipment | 90,781 | 95,216 | ||||||
Software | 5,710 | 682 | ||||||
Leasehold improvements | 11,191 | 9,714 | ||||||
Accumulated depreciation and amortization | (108,936 | ) | (111,157 | ) | ||||
$ | 64,149 | $ | 56,305 | |||||
Our provisions for depreciation of plant and equipment and amortization of leasehold improvements amounted to $7.8 million, $8.7 million and $8.0 million in 2014, 2013 and 2012, respectively. Generally, we use straight-line methods for depreciable real property over estimated useful lives ranging from 15 to 39 years or for leasehold improvements, the term of the underlying lease if shorter than the estimated useful lives. We use accelerated methods (declining balance and sum-of-the-years-digits) for machinery and equipment and software over estimated useful lives ranging from 5 to 10 years. | ||||||||
In 2014 and 2013 we capitalized internal costs of $5.0 million and $0.7 million, respectively, related to the development of software that is used to design products for our customers. This software was placed in service in late fiscal 2014. Amortization of this software totaled $0.4 million in 2014. | ||||||||
GOODWILL_AND_PURCHASED_INTANGI
GOODWILL AND PURCHASED INTANGIBLE ASSETS | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
GOODWILL AND PURCHASED INTANGIBLE ASSETS | ' | |||||||||||||||||||
GOODWILL AND PURCHASED INTANGIBLE ASSETS | ' | |||||||||||||||||||
NOTE 7—GOODWILL AND PURCHASED INTANGIBLE ASSETS | ||||||||||||||||||||
The changes in the carrying amount of goodwill for the two years ended September 30, 2014 are as follows (in thousands): | ||||||||||||||||||||
Transportation | Defense | Mission | Total | |||||||||||||||||
Systems | Systems | Support | ||||||||||||||||||
Services | ||||||||||||||||||||
Balances at October 1, 2012 | $ | 7,517 | $ | 20,983 | $ | 118,433 | $ | 146,933 | ||||||||||||
Acquisitions (see Note 2) | 10,837 | 2,466 | 26,782 | 40,085 | ||||||||||||||||
Impairment of goodwill | — | — | (50,865 | ) | (50,865 | ) | ||||||||||||||
Foreign currency exchange rate changes | (53 | ) | (6 | ) | — | (59 | ) | |||||||||||||
Balances at September 30, 2013 | 18,301 | 23,443 | 94,350 | 136,094 | ||||||||||||||||
Acquisitions (see Note 2) | 40,792 | 7,365 | — | 48,157 | ||||||||||||||||
Foreign currency exchange rate changes | 74 | (184 | ) | — | (110 | ) | ||||||||||||||
Balances at September 30, 2014 | $ | 59,167 | $ | 30,624 | $ | 94,350 | $ | 184,141 | ||||||||||||
We complete our annual goodwill impairment test each year as of July 1. The first step of the goodwill impairment test compares the fair value of our reporting units to their carrying values. We estimate the fair value of our reporting units primarily based on the discounted projected cash flows of the underlying operations and based upon market multiples from publicly traded comparable companies. For our 2014 impairment test, the estimated fair value of three all of our reporting units exceeded their respective carrying values. As such, there was no impairment of goodwill in 2014. | ||||||||||||||||||||
In 2013, slowed defense spending and margin compression due to competitive pressures on bid rates impacted operating results and tempered the projected cash flows of our MSS reporting unit, negatively impacting our estimate of its fair value at July 1, 2013. Step one of the impairment test indicated that the carrying value of our MSS reporting unit, including goodwill, exceeded its estimated fair value at July 1, 2013. Accordingly, in 2013 we performed the second step of the goodwill impairment test to measure the amount of the impairment loss, if any. The second step of the test requires the allocation of the reporting unit’s fair value to its assets and liabilities, including any unrecognized intangible assets, in a hypothetical analysis that calculates the implied fair value of goodwill as if the reporting unit was being acquired in a business combination. Based on the results of the step two analysis, we recorded a $50.9 million goodwill impairment in 2013. | ||||||||||||||||||||
Purchased Intangible Assets: The table below summarizes our purchased intangible assets (in thousands): | ||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Gross | Accumulated | Net Carrying | |||||||||||||||
Amount | Amortization | Amount | Carrying | Amortization | Amount | |||||||||||||||
Amount | ||||||||||||||||||||
Contract and program intangibles | $ | 121,340 | $ | (73,234 | ) | $ | 48,106 | $ | 97,424 | $ | (54,712 | ) | $ | 42,712 | ||||||
Other purchased intangibles | 27,362 | (11,850 | ) | 15,512 | 22,915 | (8,085 | ) | 14,830 | ||||||||||||
Total | $ | 148,702 | $ | (85,084 | ) | $ | 63,618 | $ | 120,339 | $ | (62,797 | ) | $ | 57,542 | ||||||
Total amortization expense for 2014, 2013 and 2012 was $22.6 million, $16.7 million and $14.8 million, respectively. | ||||||||||||||||||||
The table below shows our expected amortization of purchased intangibles as of September 30, 2014, for each of the next five years and thereafter (in thousands): | ||||||||||||||||||||
Transportation | Defense | Mission | Total | |||||||||||||||||
Systems | Systems | Support | ||||||||||||||||||
Services | ||||||||||||||||||||
2015 | $ | 8,886 | $ | 2,129 | $ | 7,690 | $ | 18,705 | ||||||||||||
2016 | 7,686 | 1,503 | 4,714 | 13,903 | ||||||||||||||||
2017 | 6,566 | 841 | 2,452 | 9,859 | ||||||||||||||||
2018 | 5,442 | 522 | 1,775 | 7,739 | ||||||||||||||||
2019 | 3,048 | 249 | 1,184 | 4,481 | ||||||||||||||||
Thereafter | 3,750 | 53 | 5,128 | 8,931 | ||||||||||||||||
$ | 35,378 | $ | 5,297 | $ | 22,943 | $ | 63,618 | |||||||||||||
FINANCING_ARRANGEMENTS
FINANCING ARRANGEMENTS | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
FINANCING ARRANGEMENTS | ' | |||||||
FINANCING ARRANGEMENTS | ' | |||||||
NOTE 8—FINANCING ARRANGEMENTS | ||||||||
Long-term debt consists of the following (in thousands): | ||||||||
September 30, | 2014 | 2013 | ||||||
Series A senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35% | $ | 50,000 | $ | 50,000 | ||||
Series B senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35% | 50,000 | 50,000 | ||||||
Mortgage note from a U.K. financial institution, with quarterly installments of principal and interest at 6.48% | 2,390 | 2,920 | ||||||
102,390 | 102,920 | |||||||
Less current portion | (563 | ) | (557 | ) | ||||
$ | 101,827 | $ | 102,363 | |||||
Maturities of long-term debt for each of the five years in the period ending September 30, 2019, are as follows: 2015 — $0.6 million; 2016 — $0.6 million; 2017 — $0.6 million; 2018 — $0.6 million; 2019 — $0.1 million. | ||||||||
Interest paid amounted to $4.1 million, $3.7 million and $7.4 million in 2014, 2013 and 2012, respectively. Interest paid in 2013 and 2012 included payment of $0.6 million and $5.9 million of interest in connection with a legal settlement, respectively. | ||||||||
In March 2013, we entered into a note purchase and private shelf agreement pursuant to which we issued $100.0 million of senior unsecured notes, bearing interest at a rate of 3.35% and maturing on March 12, 2025. Interest on these notes is due semi-annually and principal payments are due from 2021 through 2025. In addition, pursuant to the agreement, through March 2016 we may from time to time issue and sell, and the purchasers may in their sole discretion purchase, additional senior notes in aggregate principal amount of up to $25.0 million that will have terms, including interest rate, as we and the purchasers may agree upon at the time of issuance. | ||||||||
We have a committed five-year revolving credit agreement (Revolving Credit Agreement) with a group of financial institutions in the amount of $200 million, which expires in May 2017. The available line of credit is reduced by any letters of credit issued under the Revolving Credit Agreement. As of September 30, 2014, there were no borrowings under this agreement and there were letters of credit outstanding totaling $8.1 million, which reduce the available line of credit to $191.9 million. | ||||||||
We have a secured letter of credit facility agreement with a bank (Secured Letter of Credit Facility) which is cancellable by us at any time upon the completion of certain conditions to the satisfaction of the bank. At September 30, 2014 there were letters of credit outstanding under this agreement of $61.6 million. Restricted cash at September 30, 2014 of $69.1 million was held on deposit in the U.K. as collateral in support of this Secured Letter of Credit Facility. We are required to leave the cash in the restricted account so long as the bank continues to maintain associated letters of credit under the facility. The maximum amount of letters of credit currently allowed by the facility is $62.6 million, and any increase above this amount would require bank approval and additional restricted funds to be placed on deposit. We may choose at any time to terminate the facility and move the associated letters of credit to another credit facility. Letters of credit outstanding under the Secured Letter of Credit Facility do not reduce the available line of credit under the Revolving Credit Agreement. | ||||||||
As of September 30, 2014, we had letters of credit and bank guarantees outstanding totaling $75.2 million, including the letters of credit outstanding under the Revolving Credit Agreement and the Secured Letter of Credit Facility, which guarantee either our performance or customer advances under certain contracts. In addition, we had financial letters of credit outstanding totaling $8.9 million as of September 30, 2014, which primarily guarantee our payment of certain self-insured liabilities. We have never had a drawing on a letter of credit instrument, nor are any anticipated; therefore, we estimate the fair value of these instruments to be zero. | ||||||||
We maintain short-term borrowing arrangements in New Zealand and Australia totaling $0.5 million New Zealand dollars (equivalent to approximately $0.4 million) and $3.0 million Australian dollars (equivalent to approximately $2.6 million) to help meet the short- term working capital requirements of our subsidiaries in those countries. At September 30, 2014, no amounts were outstanding under these borrowing arrangements. | ||||||||
The terms of certain of our lending and credit agreements include provisions that require and/or limit, among other financial ratios and measurements, the permitted levels of debt, coverage of cash interest expense, and under certain circumstances, payments of dividends or other distributions to shareholders. As of September 30, 2014 this agreement does not restrict such distributions to shareholders. | ||||||||
Our self-insurance arrangements are limited to certain workers’ compensation plans, automobile liability and product liability claims. Under these arrangements, we self-insure only up to the amount of a specified deductible for each claim. Self-insurance liabilities included in other current liabilities on the balance sheet amounted to $9.1 million and $8.8 million as of September 30, 2014 and 2013, respectively. | ||||||||
COMMITMENTS
COMMITMENTS | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
COMMITMENTS | ' | ||||
COMMITMENTS | ' | ||||
NOTE 9—COMMITMENTS | |||||
We lease certain office, manufacturing and warehouse space, vehicles, and other office equipment under non-cancelable operating leases expiring in various years through 2027. These leases, some of which may be renewed for periods up to 10 years, generally require us to pay all maintenance, insurance and property taxes. Several leases are subject to periodic adjustment based on price indices or cost increases. Rental expense (net of sublease income of $0.2 million in 2014, $0.2 million in 2013 and $0.4 million in 2012) for all operating leases amounted to $12.0 million, $12.6 million and $10.2 million in 2014, 2013 and 2012, respectively. Future minimum payments, net of minimum sublease income, under non-cancelable operating leases with initial terms of one year or more consist of the following for the next five years and thereafter, as of September 30, 2014 (in thousands): | |||||
2015 | $ | 10,592 | |||
2016 | 8,074 | ||||
2017 | 5,897 | ||||
2018 | 4,232 | ||||
2019 | 2,499 | ||||
Thereafter | 3,191 | ||||
$ | 34,485 | ||||
INCOME_TAXES
INCOME TAXES | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
INCOME TAXES | ' | ||||||||||
INCOME TAXES | ' | ||||||||||
NOTE 10—INCOME TAXES | |||||||||||
Income (loss) before income taxes includes the following components (in thousands): | |||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
(in thousands) | |||||||||||
United States | $ | (22,788 | ) | $ | (31,640 | ) | $ | 38,692 | |||
Foreign | 112,199 | 71,411 | 99,271 | ||||||||
Total | $ | 89,411 | $ | 39,771 | $ | 137,963 | |||||
Significant components of the provision for income taxes are as follows: | |||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
(in thousands) | |||||||||||
Current: | |||||||||||
Federal | $ | (8,049 | ) | $ | 8,198 | $ | 15,448 | ||||
State | 918 | 2,437 | 1,927 | ||||||||
Foreign | 25,705 | 18,581 | 21,005 | ||||||||
Total current | 18,574 | 29,216 | 38,380 | ||||||||
Deferred: | |||||||||||
Federal | 1,296 | (14,182 | ) | 331 | |||||||
State | (1,232 | ) | (2,720 | ) | 328 | ||||||
Foreign | 1,193 | 2,188 | 1,293 | ||||||||
Total deferred | 1,257 | (14,714 | ) | 1,952 | |||||||
Provision for income taxes | $ | 19,831 | $ | 14,502 | $ | 40,332 | |||||
The reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense is as follows: | |||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
(in thousands) | |||||||||||
Tax expense at U.S. statutory rate | $ | 31,290 | $ | 13,921 | $ | 48,287 | |||||
State income taxes, net of federal tax effect | 111 | 120 | 1,364 | ||||||||
Nondeductible expenses | 1,319 | 1,609 | 286 | ||||||||
Change in reserve for tax contingencies | (601 | ) | (673 | ) | (2,752 | ) | |||||
Impact of goodwill impairment loss | — | 10,046 | — | ||||||||
Change in deferred tax asset valuation allowance | 921 | 4,044 | — | ||||||||
Tax effect from foreign earnings repatriation | — | — | 2,773 | ||||||||
Foreign earnings taxed at less than statutory rate | (12,783 | ) | (7,521 | ) | (7,847 | ) | |||||
R&D credits generated in the current year | (584 | ) | (3,202 | ) | (906 | ) | |||||
Reinstatement of federal research and development credit | — | (1,937 | ) | — | |||||||
Manufacturing deduction | — | (1,333 | ) | (630 | ) | ||||||
Other | 158 | (572 | ) | (243 | ) | ||||||
Provision for income taxes | $ | 19,831 | $ | 14,502 | $ | 40,332 | |||||
Significant components of our deferred tax assets and liabilities are as follows: | |||||||||||
September 30, | 2014 | 2013 | |||||||||
(in thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Accrued employee benefits | $ | 13,944 | $ | 11,642 | |||||||
Long-term contracts and inventory valuation reductions | 9,554 | 14,152 | |||||||||
Allowances for loss contingencies | 5,121 | 5,441 | |||||||||
Deferred compensation | 4,310 | 4,346 | |||||||||
Property, plant and equipment | 1,507 | 1,127 | |||||||||
Intangible assets | 2,324 | 477 | |||||||||
Retirement benefits | 4,729 | 5,678 | |||||||||
State research and development credit carryforward | 7,285 | 4,839 | |||||||||
Net operating losses carryforwards | 15,662 | 18,639 | |||||||||
Other | 585 | 2,048 | |||||||||
Total gross deferred tax assets | 65,021 | 68,389 | |||||||||
Deferred tax asset valuation allowance | (14,024 | ) | (8,801 | ) | |||||||
Total deferred tax assets | 50,997 | 59,588 | |||||||||
Deferred tax liabilities: | |||||||||||
Deferred revenue | (22,507 | ) | (28,865 | ) | |||||||
State taxes | (6 | ) | (995 | ) | |||||||
Other | (1,937 | ) | (2,052 | ) | |||||||
Total deferred tax liabilities | (24,450 | ) | (31,912 | ) | |||||||
Net deferred tax asset | $ | 26,547 | $ | 27,676 | |||||||
The deferred tax assets and liabilities for fiscal 2014 and 2013 include amounts related to various acquisitions. The total change in deferred tax assets and liabilities in fiscal 2014 includes changes that are recorded to Other Comprehensive Income (OCI) and goodwill. | |||||||||||
We calculate deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities, and measure them using the enacted tax rates and laws that we expect will be in effect when the differences reverse. Certain items within the 2013 presentation of the components of deferred tax assets and liabilities have been reclassified to conform to the current year presentation. The reclassifications primarily relate to $0.7 million of differences related to accounting for long-term contracts and were reclassified from other deferred tax assets and liabilities to long-term contracts and inventory valuation reductions. | |||||||||||
As of September 30, 2014, we had net operating loss carryforwards of approximately $51.1 million for foreign and $30.4 million for state, and unused state tax credits of $13.8 million. In general, our foreign operating loss carryforwards and state tax credits are not subject to expiration. The state operating loss carryforwards will begin to expire in fiscal year 2026. | |||||||||||
We are required to assess whether a valuation allowance should be recorded against our deferred tax assets by jurisdiction based on the consideration of all available evidence, with significant weight given to evidence that can be objectively verified and using a “more likely than not” realization standard. Through September 30, 2014, a valuation allowance of $14.0 million has been established for certain deferred tax assets related to state tax credits, certain foreign operating losses and other foreign assets. For fiscal 2014, the total change in the valuation allowance was $5.2 million, of which $2.3 million was recorded as tax expense through the income statement in the current year. | |||||||||||
With the exception of $10.5 million of accumulated earnings which the Company intends to repatriate, we do not provide for U.S. income taxes on the earnings of foreign subsidiaries which are considered indefinitely reinvested outside the U.S. Deferred income taxes, net of foreign tax credits, are provided for foreign earnings available for repatriation. As of September 30, 2014, the cumulative amount of earnings upon which U.S. income taxes have not been provided is approximately $389.8 million. Upon distribution of those earnings in the form of dividends or otherwise, we would be subject to both U.S. income taxes and foreign withholding taxes, but would also be able to offset unrecognized foreign tax credit carryforwards, if any. It is not practicable for us to determine the total amount of unrecognized deferred U.S. income tax liability because of the complexities associated with its hypothetical calculation. | |||||||||||
Accounting for Uncertainty in Income Taxes | |||||||||||
During fiscal 2014 and 2013, our aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows: | |||||||||||
Years ended September 30, | 2014 | 2013 | |||||||||
(in thousands) | |||||||||||
Balance at October 1 | $ | 8,441 | $ | 9,833 | |||||||
Increase (decrease) related to tax positions in prior years: | |||||||||||
Recognition of benefits from expiration of statutes | (973 | ) | (575 | ) | |||||||
Settlements with taxing authorities | (728 | ) | (2,332 | ) | |||||||
Other | (54 | ) | 824 | ||||||||
Tax positions related to the current year | 743 | 731 | |||||||||
Currency translation adjustment | (123 | ) | (40 | ) | |||||||
Balance at September 30 | $ | 7,306 | $ | 8,441 | |||||||
At September 30, 2014, the amount of unrecognized tax benefits from permanent tax adjustments that, if recognized, would affect the effective tax rate was $4.7 million. During the next 12 months, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and foreign, could be reached with respect to approximately $1.0 million of the unrecognized tax benefits depending on the timing of examinations or expiration of statute of limitations, either because the Company’s tax positions are sustained or because the Company agrees to their disallowance and pays the related income tax. The amount of net interest and penalties recognized as a component of income tax expense during 2014, 2013 and 2012 was not material. Interest and penalties accrued at September 30, 2014 and 2013 amounted to $1.6 million and $2.2 million, respectively, bringing the total liability for uncertain tax issues to $8.0 million and $9.3 million, respectively, as of September 30, 2014 and 2013. | |||||||||||
We are subject to ongoing audits from various taxing authorities in the jurisdictions in which we do business. As of September 30, 2014, the fiscal tax years open under the statute of limitations in significant jurisdictions include 2011-2014 in the U.S. and United Kingdom and 2009-2014 in New Zealand. We believe we have adequately provided for uncertain tax issues we have not yet resolved with federal, state and foreign tax authorities. Although not more likely than not, the most adverse resolution of these issues could result in additional charges to earnings in future periods. Based upon a consideration of all relevant facts and circumstances, we do not believe the ultimate resolution of uncertain tax issues for all open tax periods will have a material adverse effect upon our financial condition or results of operations. | |||||||||||
Cash amounts paid for income taxes, net of refunds received, were $27.3 million, $42.1 million and $25.4 million in 2014, 2013 and 2012, respectively. | |||||||||||
DERIVATIVE_INSTRUMENTS_AND_HED
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | 12 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||
NOTE 11—DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ||||||||||||||
In order to manage our exposure to fluctuations in interest and foreign currency exchange rates we utilize derivative financial instruments such as forward starting swaps and foreign currency forwards. We do not use any derivative financial instruments for trading or other speculative purposes. | ||||||||||||||
All derivatives are recorded at fair value, however, the classification of gains and losses resulting from changes in the fair values of derivatives are dependent on the intended use of the derivative and its resulting designation. If a derivative is designated as a fair value hedge, then a change in the fair value of the derivative is offset against the change in the fair value of the underlying hedged item and only the ineffective portion of the hedge, if any, is recognized in earnings. If a derivative is designated as a cash flow hedge, then the effective portion of a change in the fair value of the derivative is recognized as a component of accumulated other comprehensive income until the underlying hedged item is recognized in earnings, or the forecasted transaction is no longer probable of occurring. If a derivative does not qualify as a highly effective hedge, any change in fair value is immediately recognized in earnings. We formally document all hedging relationships for all derivative hedges and the underlying hedged items, as well as the risk management objectives and strategies for undertaking the hedge transactions. We classify the fair value of all derivative contracts as current or non- current assets or liabilities, depending on the realized and unrealized gain or loss position of the hedged contract at the balance sheet date, and the timing of future cash flows. The cash flows from derivatives treated as hedges are classified in the Consolidated Statements of Cash Flows in the same category as the item being hedged. | ||||||||||||||
The following table shows the notional principal amounts of our outstanding derivative instruments as of September 30, 2014 and 2013 (in thousands): | ||||||||||||||
Notional Principal | ||||||||||||||
September 30, | 2014 | 2013 | ||||||||||||
Instruments designated as accounting hedges: | ||||||||||||||
Foreign currency forwards | $ | 249,628 | $ | 231,051 | ||||||||||
Forward starting swap | — | 58,415 | ||||||||||||
Instruments not designated as accounting hedges: | ||||||||||||||
Foreign currency forwards | $ | 136,955 | $ | 130,687 | ||||||||||
Included in the amounts not designated as accounting hedges above at September 30, 2014 and 2013 are foreign currency forwards with notional principal amounts of $132.1 million and $128.1 million, respectively, that have been designed to manage exposure to foreign currency exchange risks, and for which the gains or losses of the changes in fair value of the forwards has approximately offset an equal and opposite amount of gains or losses related to the foreign currency exposure. | ||||||||||||||
The notional principal amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of the Company’s exposure to credit or market loss. Credit risk represents the Company’s gross exposure to potential accounting loss on derivative instruments that are outstanding or unsettled if all counterparties failed to perform according to the terms of the contract, based on then-current interest or currency exchange rates at each respective date. The Company’s exposure to credit loss and market risk will vary over time as a function of interest and currency exchange rates. The amount of credit risk from derivative instruments and hedging activities was not material for the fiscal years ended September 30, 2014 and 2013. Although the table above reflects the notional principal amounts of the Company’s forward starting swap and foreign exchange instruments, it does not reflect the gains or losses associated with the exposures and transactions that the forward starting swap and foreign exchange instruments are intended to hedge. The amounts ultimately realized upon settlement of these financial instruments, together with the gains and losses on the underlying exposures, will depend on actual market conditions during the remaining life of the instruments. | ||||||||||||||
The Company generally enters into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. The Company presents its derivative assets and derivative liabilities at their gross fair values. The Company did not have any derivative instruments with credit-risk related contingent features that would require it to post collateral as of September 30, 2014 or 2013. | ||||||||||||||
The table below presents the fair value of the Company’s derivative financial instruments that qualify for hedge accounting as well as their classification on the consolidated balance sheets as of September 30, 2014 and 2013 (in thousands): | ||||||||||||||
Fair Value | ||||||||||||||
September 30, | ||||||||||||||
Balance Sheet Location | 2014 | 2013 | ||||||||||||
Asset derivatives: | ||||||||||||||
Foreign currency forwards | Other current assets | $ | 7,389 | $ | 1,597 | |||||||||
Foreign currency forwards | Other noncurrent assets | 5,920 | 4,957 | |||||||||||
Forward starting swap | Other noncurrent assets | — | 1,139 | |||||||||||
$ | 13,309 | $ | 7,693 | |||||||||||
Liability derivatives: | ||||||||||||||
Foreign currency forwards | Other current liabilities | $ | 6,645 | $ | 2,360 | |||||||||
Foreign currency forwards | Other noncurrent liabilities | 5,878 | 5,366 | |||||||||||
Total | $ | 12,523 | $ | 7,726 | ||||||||||
The tables below present gains and losses recognized in OCI for the years ended September 30, 2014, 2013, and 2012 related to derivative financial instruments designated as cash flow hedges, as well as the amount of gains and losses reclassified into earnings during those periods (in thousands): | ||||||||||||||
Years ended September 30, | 2014 | 2013 | ||||||||||||
Derivative Type | Gains (losses) | Gains (losses) | Gains (losses) | Gains (losses) | ||||||||||
recognized in OCI | reclassified into | recognized in | reclassified into | |||||||||||
earnings - | OCI | earnings - Effective | ||||||||||||
Effective Portion | Portion | |||||||||||||
Foreign currency forwards | $ | 820 | $ | 330 | $ | 4,581 | $ | (1,231 | ) | |||||
Forward starting swap | — | — | 1,230 | — | ||||||||||
$ | 820 | $ | 330 | $ | 5,811 | $ | (1,231 | ) | ||||||
The amount of gains and losses from derivative instruments and hedging activities classified as not highly effective did not have a material impact on the results of operations for the years ended September 30, 2014, 2013, or 2012. The amount of estimated unrealized net losses from cash flow hedges which are expected to be reclassified to earnings in the next twelve months is $0.5 million, net of income taxes. | ||||||||||||||
Foreign currency forwards | ||||||||||||||
In order to limit our exposure to foreign currency exchange rate risk we generally hedge those commitments greater than $50,000 by using foreign currency exchange forward and option contracts that are denominated in currencies other than the functional currency of the subsidiary responsible for the commitment, typically the British pound, Canadian dollar, Singapore dollar, euro, Swedish krona, New Zealand dollar and Australian dollar. These contracts are designed to be effective hedges regardless of the direction or magnitude of any foreign currency exchange rate change, because they result in an equal and opposite income or cost stream that offsets the change in the value of the underlying commitment. | ||||||||||||||
Forward starting swap | ||||||||||||||
In July 2012 we entered into a forward-starting 10-year swap contract with a bank to reduce the interest rate variability exposure of the projected interest cash flows on a planned debt issuance to finance a contract in our CTS segment. The accrual period of the swap contract was designed to match the tenor of the planned debt issuance. Through the end of fiscal 2013, the forward starting swap was deemed to be a highly effective cash flow hedge, and changes in the fair value of the forward starting swap were recorded in other comprehensive income. In fiscal 2014, we determined that the planned issuance of debt was no longer probable; therefore, the forward starting swap was deemed to be ineffective. As such, in 2014 amounts previously reported in accumulated other comprehensive income related to this forward starting swap were reclassified into earnings, and subsequent changes in the fair value of the forward starting swap were recognized in earnings, within the other income (expense) line item. During 2014 the total net gain recognized on the forward starting swap was $0.2 million, and on July 1, 2014, at the termination date of the forward starting swap, we settled the forward starting swap and received $0.2 million from the counterparty. | ||||||||||||||
PENSION_PROFIT_SHARING_AND_OTH
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS | 12 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS | ' | |||||||||||||||||||||||||
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS | ' | |||||||||||||||||||||||||
NOTE 12—PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS | ||||||||||||||||||||||||||
Deferred Compensation Plans | ||||||||||||||||||||||||||
Deferred compensation includes amounts due under an arrangement in which participating members of management may elect to defer receiving payment for a portion of their compensation a minimum of five years, or until periods after their respective retirements. Our deferred compensation plans specify that we accrue interest on deferred compensation at the Prompt Payment Act interest rate as determined by the U.S. Department of the Treasury, until such time as it is paid in full. For the year ended September 30, 2014, the average interest rate used to accrue interest on our deferred compensation was 1.9%. | ||||||||||||||||||||||||||
Defined Contribution Plans | ||||||||||||||||||||||||||
We have profit sharing and other defined contribution retirement plans that provide benefits for most U.S. employees. Certain of these plans require the company to match a portion of eligible employee contributions up to specified limits. These plans also allow for additional company contributions at the discretion of the Board of Directors. In 2014, 2013 and 2012, more than half of our contributions to these plans were discretionary contributions. We also have a defined contribution plan for European employees that were formerly eligible for the European defined benefit plan described below. Under this plan, the company matches a portion of the eligible employee contributions up to limits specified in the plan. Company contributions to defined contribution plans aggregated $19.6 million, $19.7 million and $18.6 million in 2014, 2013 and 2012, respectively. | ||||||||||||||||||||||||||
Defined Benefit Pension Plans | ||||||||||||||||||||||||||
Certain employees in the U.S. are covered by a noncontributory defined benefit pension plan for which benefits were frozen as of December 31, 2006 (curtailment). The effect of the U.S. plan curtailment is that no new benefits have been accrued after that date. Approximately one-half of our European employees are covered by a contributory defined benefit pension plan for which benefits were frozen as of September 30, 2010. Although the effect of the European plan curtailment is that no new benefits will accrue after September 30, 2010, the plan is a final pay plan, which means that benefits will be adjusted for increases in the salaries of participants until their retirement or departure from the company. The European plan was amended in both 2014 and in 2013 to reduce the amount of participant compensation used in computing the pension liability for certain participants. We recognized decreases in our benefit obligation as a result of these plan amendments of $1.7 million in 2014 and $1.2 million in 2013. U.S. and European employees hired subsequent to the dates of the curtailment of the respective plans are not eligible for participation in the defined benefit plans. | ||||||||||||||||||||||||||
Our funding policy for the defined benefit pension plans provides that contributions will be at least equal to the minimum amounts mandated by statutory requirements. Based on our known requirements for the U.S. and U.K. plans, as of September 30, 2014, we expect to make contributions of approximately $3.6 million in 2015. September 30 is used as the measurement date for these plans. | ||||||||||||||||||||||||||
The unrecognized amounts recorded in accumulated other comprehensive income (loss) will be subsequently recognized as net periodic pension cost, consistent with our historical accounting policy for amortizing those amounts. We will recognize actuarial gains and losses that arise in future periods and are not recognized as net periodic pension cost in those periods as increases or decreases in other comprehensive income (loss), net of tax, in the period they arise. We adjust actuarial gains and losses recognized in other comprehensive income (loss) as they are subsequently recognized as a component of net periodic pension cost. The unrecognized actuarial gain or loss included in accumulated other comprehensive income (loss) at September 30, 2014 and expected to be recognized in net pension cost during fiscal 2015 is a loss of $0.7 million ($0.5 million net of income tax). No plan assets are expected to be returned to us in 2015. | ||||||||||||||||||||||||||
The projected benefit obligation, accumulated benefit obligation (ABO) and fair value of plan assets for the defined benefit pension plans in which the ABO was in excess of the fair value of plan assets were as follows (in thousands): | ||||||||||||||||||||||||||
September 30, | 2014 | 2013 | ||||||||||||||||||||||||
Projected benefit obligation | $ | 224,201 | $ | 209,118 | ||||||||||||||||||||||
Accumulated benefit obligation | 224,201 | 202,916 | ||||||||||||||||||||||||
Fair value of plan assets | 206,982 | 188,337 | ||||||||||||||||||||||||
The following table sets forth changes in the projected benefit obligation and fair value of plan assets and the funded status for these defined benefit plans (in thousands): | ||||||||||||||||||||||||||
September 30, | 2014 | 2013 | ||||||||||||||||||||||||
Change in benefit obligations: | ||||||||||||||||||||||||||
Net benefit obligation at the beginning of the year | $ | 209,118 | $ | 215,706 | ||||||||||||||||||||||
Service cost | 636 | 532 | ||||||||||||||||||||||||
Interest cost | 9,967 | 8,867 | ||||||||||||||||||||||||
Actuarial loss (gain) | 10,730 | (5,726 | ) | |||||||||||||||||||||||
Plan amendments | (1,044 | ) | (1,178 | ) | ||||||||||||||||||||||
Gross benefits paid | (6,229 | ) | (8,576 | ) | ||||||||||||||||||||||
Foreign currency exchange rate changes | 1,023 | (507 | ) | |||||||||||||||||||||||
Net benefit obligation at the end of the year | 224,201 | 209,118 | ||||||||||||||||||||||||
Change in plan assets: | ||||||||||||||||||||||||||
Fair value of plan assets at the beginning of the year | 188,337 | 169,323 | ||||||||||||||||||||||||
Actual return on plan assets | 21,127 | 24,707 | ||||||||||||||||||||||||
Employer contributions | 3,728 | 3,915 | ||||||||||||||||||||||||
Gross benefits paid | (6,229 | ) | (8,576 | ) | ||||||||||||||||||||||
Administrative expenses | (730 | ) | (843 | ) | ||||||||||||||||||||||
Foreign currency exchange rate changes | 749 | (189 | ) | |||||||||||||||||||||||
Fair value of plan assets at the end of the year | 206,982 | 188,337 | ||||||||||||||||||||||||
Unfunded status of the plans | (17,219 | ) | (20,781 | ) | ||||||||||||||||||||||
Unrecognized net actuarial loss | 33,376 | 31,657 | ||||||||||||||||||||||||
Net amount recognized | $ | 16,157 | $ | 10,876 | ||||||||||||||||||||||
Amounts recognized in Accumulated OCI | ||||||||||||||||||||||||||
Liability adjustment to OCI | $ | (33,376 | ) | $ | (31,657 | ) | ||||||||||||||||||||
Deferred tax asset | 9,925 | 9,291 | ||||||||||||||||||||||||
Accumulated other comprehensive loss | $ | (23,451 | ) | $ | (22,366 | ) | ||||||||||||||||||||
The components of net periodic pension cost (benefit) were as follows (in thousands): | ||||||||||||||||||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | |||||||||||||||||||||||
Service cost | $ | 636 | $ | 532 | $ | 508 | ||||||||||||||||||||
Interest cost | 9,967 | 8,867 | 9,565 | |||||||||||||||||||||||
Expected return on plan assets | (13,183 | ) | (11,605 | ) | (10,091 | ) | ||||||||||||||||||||
Amortization of actuarial loss | 802 | 1,798 | 1,593 | |||||||||||||||||||||||
Administrative expenses | 152 | 76 | 82 | |||||||||||||||||||||||
Net pension cost | $ | (1,626 | ) | $ | (332 | ) | $ | 1,657 | ||||||||||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | |||||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligation at September 30: | ||||||||||||||||||||||||||
Discount rate | 4.2 | % | 4.8 | % | 4.3 | % | ||||||||||||||||||||
Rate of compensation increase | 3.2 | % | 4.4 | % | 3.8 | % | ||||||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost for the years ended September 30: | ||||||||||||||||||||||||||
Discount rate | 4.8 | % | 4.3 | % | 5.2 | % | ||||||||||||||||||||
Expected return on plan assets | 7.0 | % | 7.0 | % | 7.0 | % | ||||||||||||||||||||
Rate of compensation increase | 4.4 | % | 3.8 | % | 4.3 | % | ||||||||||||||||||||
The long-term rate of return assumption represents the expected average rate of earnings on the funds invested or to be invested to provide for the benefits included in the benefit obligations. That assumption is determined based on a number of factors, including historical market index returns, the anticipated long-term asset allocation of the plans, historical plan return data, plan expenses, and the potential to outperform market index returns. | ||||||||||||||||||||||||||
We have the responsibility to formulate the investment policies and strategies for the plans’ assets. Our overall policies and strategies include: maintain the highest possible return commensurate with the level of assumed risk, and preserve benefit security for the plans’ participants. | ||||||||||||||||||||||||||
We do not direct the day-to-day operations and selection process of individual securities and investments and, accordingly, we have retained the professional services of investment management organizations to fulfill those tasks. The investment management organizations have investment discretion over the assets placed under their management. We provide each investment manager with specific investment guidelines by asset class. | ||||||||||||||||||||||||||
The target ranges for each major category of the plans’ assets at September 30, 2014 are as follows: | ||||||||||||||||||||||||||
Asset Category | Allocation | |||||||||||||||||||||||||
Range | ||||||||||||||||||||||||||
Equity securities | 20% to 55% | |||||||||||||||||||||||||
Debt securities | 25% to 75% | |||||||||||||||||||||||||
Cash | 0% to 55% | |||||||||||||||||||||||||
Real estate | 0% to 10% | |||||||||||||||||||||||||
Our defined benefit pension plans invest in cash and cash equivalents, equity securities, fixed income securities, pooled separate accounts and common collective trusts. The following tables present the fair value of the assets of our defined benefit pension plans by asset category and their level within the fair value hierarchy (in thousands). See Note 3 for a description of each level within the fair value hierarchy. During 2014 our plans invested in a diversified growth fund that holds underlying investments in equities, fixed- income securities, commodities, and real estate. | ||||||||||||||||||||||||||
All assets classified as Level 2 or Level 3 in the table below are invested in pooled separate accounts or common collective trusts which do not have publicly quoted prices. The fair value of the pooled separate accounts and common collective trusts are determined based on the net asset value of the underlying investments. The fair value of the underlying investments held by the pooled separate accounts and common collective trusts, other than real estate investments, is generally based upon quoted prices in active markets. The fair value of the underlying investments comprised of real estate properties is determined through an appraisal process which uses valuation methodologies including comparisons to similar real estate and discounting of income streams. For investments in the pooled separate accounts and common collective trusts categorized as Level 2 below, there are no restrictions on the ability of our benefit plans to sell these investments. | ||||||||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Cash equivalents | $ | 1,863 | $ | 407 | $ | — | $ | 2,270 | $ | 2,361 | $ | 475 | $ | — | $ | 2,836 | ||||||||||
Equity: | ||||||||||||||||||||||||||
U.S. equity securities | — | 43,351 | — | 43,351 | — | 54,870 | — | 54,870 | ||||||||||||||||||
Foreign equity securities | — | 47,110 | — | 47,110 | — | 47,569 | — | 47,569 | ||||||||||||||||||
Fixed Income: | ||||||||||||||||||||||||||
U.S. fixed-income funds | — | 49,479 | — | 49,479 | — | 33,849 | — | 33,849 | ||||||||||||||||||
U.K. fixed-income funds | — | 25,813 | — | 25,813 | — | 12,804 | — | 12,804 | ||||||||||||||||||
Diversified growth fund | — | 31,863 | 31,863 | — | 30,146 | 30,146 | ||||||||||||||||||||
Real Estate | — | — | 7,096 | 7,096 | — | — | 6,263 | 6,263 | ||||||||||||||||||
Total | $ | 1,863 | $ | 198,023 | $ | 7,096 | $ | 206,982 | $ | 2,361 | $ | 179,713 | $ | 6,263 | $ | 188,337 | ||||||||||
The following table presents the changes in the fair value of plan assets categorized as Level 3 in the preceding table (in thousands): | ||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||
Balance as of October 1, 2012 | $ | 5,614 | ||||||||||||||||||||||||
Realized and unrealized gains, net | 712 | |||||||||||||||||||||||||
Purchases, sales and settlements, net | (63 | ) | ||||||||||||||||||||||||
Balance as of September 30, 2013 | 6,263 | |||||||||||||||||||||||||
Realized and unrealized gains, net | 898 | |||||||||||||||||||||||||
Purchases, sales and settlements, net | (65 | ) | ||||||||||||||||||||||||
Balance as of September 30, 2014 | $ | 7,096 | ||||||||||||||||||||||||
The pension plans held no direct positions in Cubic Corporation common stock as of September 30, 2014 and 2013. | ||||||||||||||||||||||||||
We expect to pay the following pension benefit payments, which reflect expected future service, as appropriate, (in thousands): | ||||||||||||||||||||||||||
2015 | $ | 7,784 | ||||||||||||||||||||||||
2016 | 8,208 | |||||||||||||||||||||||||
2017 | 8,482 | |||||||||||||||||||||||||
2018 | 9,043 | |||||||||||||||||||||||||
2019 | 9,590 | |||||||||||||||||||||||||
2020-2024 | 52,964 | |||||||||||||||||||||||||
STOCKHOLDERS_EQUITY
STOCKHOLDERS' EQUITY | 12 Months Ended | ||||||
Sep. 30, 2014 | |||||||
STOCKHOLDERS' EQUITY | ' | ||||||
STOCKHOLDERS' EQUITY | ' | ||||||
NOTE 13—STOCKHOLDERS’ EQUITY | |||||||
Long-Term Equity Incentive Plan | |||||||
On March 21, 2013, the Executive Compensation Committee of the Board of Directors (Compensation Committee) approved a long- term equity incentive award program. Through September 30, 2014, the Compensation Committee has granted 416,929 RSU’s with time-based vesting and 314,656 RSU’s with performance-based vesting under this program. | |||||||
Each RSU represents a contingent right to receive one share of our common stock. Dividend equivalent rights accrue with respect to the RSUs when and as dividends are paid on our common stock and vest proportionately with the RSUs to which they relate. Vested shares are delivered to the recipient following each vesting date. | |||||||
The RSUs granted with time-based vesting generally vest in four equal installments on each of the four October 1 dates following the grant date, subject to the recipient’s continued service through such vesting date. | |||||||
The performance-based RSUs granted to participants vest over three-year performance periods based on Cubic’s achievement of performance goals established by the Compensation Committee over the performance periods, subject to the recipient’s continued service through the end of the respective performance periods. For the performance-based RSUs granted to date, the vesting will be contingent upon Cubic meeting one of three types of vesting criteria over the performance period. These three categories of vesting criteria consist of revenue growth targets, earnings targets, and return on equity targets. The level at which Cubic’s performs against scalable targets over the performance periods will determine the percentage of the RSUs that will ultimately vest. | |||||||
Through September 30, 2014, Cubic has granted 731,585 restricted stock units of which 69,994 have vested. The grant date fair value of each restricted stock unit is the fair market value of one share of our common stock at the grant date. At September 30, 2014, the total number of unvested RSUs that are ultimately expected to vest, after consideration of expected forfeitures and estimated vesting of performance-based RSUs is 345,240. | |||||||
The following table summarizes our RSU activity: | |||||||
Unvested Restricted Stock Units | |||||||
Number of Shares | Weighted-Average | ||||||
Grant-Date Fair | |||||||
Value | |||||||
Unvested at October 1, 2012 | — | $ | — | ||||
Granted | 426,511 | 43.76 | |||||
Vested | — | — | |||||
Forfeited | (5,142 | ) | 43.76 | ||||
Unvested at September 30, 2013 | 421,369 | $ | 43.76 | ||||
Granted | 305,074 | 49.57 | |||||
Vested | (69,994 | ) | 43.76 | ||||
Forfeited | (13,500 | ) | 47.8 | ||||
Unvested at September 30, 2014 | 642,949 | $ | 46.43 | ||||
As of September 30, 2014, approximately 3,746,426 shares remained available for future grants under our long-term equity incentive plan. On October 1, 2014, 105,886 restricted stock units vested. | |||||||
STOCK_BASED_COMPENSATION
STOCK BASED COMPENSATION | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
STOCK BASED COMPENSATION | ' | ||||
STOCK BASED COMPENSATION | ' | ||||
NOTE 14 — STOCK BASED COMPENSATION | |||||
We recorded non-cash compensation expense related to stock-based awards of $5.6 million for the year ended September 30, 2014, which was comprised of the following (in thousands): | |||||
Cost of sales | $ | 566 | |||
Selling, general and administrative | 5,059 | ||||
$ | 5,625 | ||||
As of September 30, 2014, there was $24.1 million of unrecognized compensation cost related to unvested RSUs. Based upon the expected forfeitures and the expected vesting of performance based RSUs, the aggregate fair value of RSUs expected to ultimately vest is $16.2 million. This amount is expected to be recognized over a weighted-average period of 1.7 years. | |||||
We are required to estimate forfeitures at the time of grant and revise those estimates in subsequent periods on a cumulative basis in the period the estimated forfeiture rate changes for all stock-based awards when significant events occur. We consider our historical experience with employee turnover as the basis to arrive at our estimated forfeiture rate. The forfeiture rate was estimated to be 12.5% per year as of September 30, 2014. To the extent the actual forfeiture rate is different from what we have estimated, stock-based compensation related to these awards will be different from our expectations. | |||||
LEGAL_MATTERS
LEGAL MATTERS | 12 Months Ended |
Sep. 30, 2014 | |
LEGAL MATTERS | ' |
LEGAL MATTERS | ' |
NOTE 15—LEGAL MATTERS | |
In November 2011, we received a claim from a public transit authority customer which alleged that the authority incurred a loss of transit revenue due to the inappropriate and illegal actions of one of our former employees, who has pled guilty to the charges. This individual was employed to work on a contract we acquired in a business combination in 2009 and had allegedly been committing these illegal acts from almost two years prior to our acquisition of the contract, until his arrest in May 2011. The transit system was designed and installed by a company unrelated to us. The transit authority sought recoupment from us of a total amount of $4.5 million for alleged lost revenue, fees and damages. In March 2012, the county superior court entered a default judgment against our former employee and others for $2.9 million based upon the estimated loss of revenue by the public transit authority customer. In 2012, we recorded an accrued cost of $2.9 million within general and administrative expense in the transportation systems segment based upon the court’s assessment of these losses. In July 2014 we entered into a settlement agreement with the customer for a cash payment of $2.6 million plus an assignment of forty percent of any insurance proceeds we receive under relevant insurance policies. In June 2014 we reduced our accrued costs to $2.6 million. We have submitted our claim to our insurance carriers but have not yet resolved the level of coverage. Any potential insurance proceeds, and any related assignment of a portion of the proceeds to the customer, will not be recognized in the financial statements until receipt of any such insurance proceeds is probable. | |
In October and December of 2013, and January of 2014, lawsuits were filed in the United States District Court for the Northern District of Illinois, Eastern Division against us and one of our transit customers alleging variously, among other things, breach of contract, violation of the Illinois Consumer Fraud Act, unjust enrichment and violation of the Electronic Funds Act. In January 2014 these cases were consolidated into a single case and the Plaintiffs are seeking to have the case certified as a class action. Plaintiffs variously claim, among other things, that: (i) they were wrongly charged for calling the call center that we operate for patrons of our transit customer, (ii) they were wrongly charged for a transfer and a second fare, (iii) they were not credited the cost of a transit card even after registration of the card, as is required under the terms of the cardholder agreement, and (iv) they were double charged for rides taken. We are undertaking the defense of the transit customer pursuant to our contractual obligations to that customer. We are investigating the matter and plan to vigorously defend this lawsuit. As this case is in its early stages, we cannot estimate the probability of loss or any range of estimate of possible loss. | |
Also in October 2013, a lawsuit was filed in the Circuit Court of Cook County, Illinois, County Department, Chancery Division against our same transit customer alleging conversion and unjust enrichment. This lawsuit was later amended and refiled in May 2014. The plaintiff alleges his bank debit card was charged two dollars and twenty-five cents for his ride on the transit system rather than the ride being charged to his transit fare card. This plaintiff is also seeking to have his case certified as a class action for all patrons whose bank cards were charged in the same manner. We are investigating the matter and we are undertaking the defense pursuant to our contractual obligations to our transit customer. We plan to vigorously defend this lawsuit. As this case is in its early stages, we cannot estimate the probability of loss or any range of estimate of possible loss. | |
In October 2014, a lawsuit was filed in the United States District Court, Northern District of Illinois against us and our same transit customer alleging infringement of various patents held by the plaintiff. We are investigating the matter and plan to vigorously defend the lawsuit. We are also undertaking defense of our customer in this matter pursuant to our contractual obligations to that customer. Due to the preliminary nature of this case, we cannot estimate the probability of loss or any range of estimate of possible loss. | |
We are not a party to any other material pending proceedings and we consider all other matters to be ordinary proceedings incidental to the business. We believe the outcome of these other proceedings will not have a materially adverse effect on our financial position, results of operations, or cash flows. | |
BUSINESS_SEGMENT_INFORMATION
BUSINESS SEGMENT INFORMATION | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
BUSINESS SEGMENT INFORMATION | ' | ||||||||||
BUSINESS SEGMENT INFORMATION | ' | ||||||||||
NOTE 16—BUSINESS SEGMENT INFORMATION | |||||||||||
We have three primary business segments: Cubic Transportation Systems (CTS), Mission Support Services (MSS) and Cubic Defense Systems (CDS). CTS designs, produces, installs and services electronic revenue collection systems for mass transit projects, including railways and buses. MSS provides training, operations, intelligence, maintenance, technical and other services to the U.S. government and allied nations. CDS performs work under U.S. and foreign government contracts relating to electronic defense systems and equipment. CDS products include customized military range instrumentation, laser based training systems, virtual simulation systems, communications products including datalinks, power amplifiers, avionics systems, multi-band communication tracking devices, and cross domain hardware solutions to address multi-level security requirements. | |||||||||||
We evaluate performance and allocate resources based on total segment operating profit or loss. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are immaterial and are eliminated in consolidation. | |||||||||||
Our reportable segments are business units that offer different products and services and are each managed separately. Operating results for each segment are reported separately to senior corporate management to make decisions as to the allocation of corporate resources and to assess performance. | |||||||||||
Business segment financial data is as follows (in millions): | |||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
Sales: | |||||||||||
Transportation Systems | $ | 599.7 | $ | 529.5 | $ | 522.2 | |||||
Mission Support Services | 398.1 | 468.7 | 491.4 | ||||||||
Defense Systems | 400.6 | 363 | 389.4 | ||||||||
Other | — | 0.2 | 1.1 | ||||||||
Total sales | $ | 1,398.40 | $ | 1,361.40 | $ | 1,404.10 | |||||
Operating income (loss): | |||||||||||
Transportation Systems | $ | 65.9 | $ | 66.8 | $ | 84.6 | |||||
Mission Support Services | 7.8 | (36.1 | ) | 21.1 | |||||||
Defense Systems | 26.8 | 14.2 | 35.3 | ||||||||
Unallocated corporate expenses and other | (8.0 | ) | (4.2 | ) | (4.8 | ) | |||||
Total operating income | $ | 92.5 | $ | 40.7 | $ | 136.2 | |||||
Assets: | |||||||||||
Transportation Systems | $ | 422.2 | $ | 369.8 | $ | 268.4 | |||||
Mission Support Services | 195.8 | 205.2 | 212.8 | ||||||||
Defense Systems | 252.4 | 228.9 | 211.2 | ||||||||
Corporate and other | 324.2 | 304.5 | 322.2 | ||||||||
Total assets | $ | 1,194.60 | $ | 1,108.40 | $ | 1,014.60 | |||||
Depreciation and amortization: | |||||||||||
Transportation Systems | $ | 11.5 | $ | 5 | $ | 3.7 | |||||
Mission Support Services | 10.7 | 13 | 12.5 | ||||||||
Defense Systems | 7.4 | 6.1 | 5.5 | ||||||||
Corporate and other | 0.8 | 1.3 | 1.2 | ||||||||
Total depreciation and amortization | $ | 30.4 | $ | 25.4 | $ | 22.9 | |||||
Capital expenditures: | |||||||||||
Transportation Systems | $ | 1.8 | $ | 2.8 | $ | 2.7 | |||||
Mission Support Services | — | 0.3 | 1.1 | ||||||||
Defense Systems | 13.2 | 4.6 | 8.9 | ||||||||
Corporate and other | 1.6 | 1.4 | 1.5 | ||||||||
Total expenditures for long-lived assets | $ | 16.6 | $ | 9.1 | $ | 14.2 | |||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
Geographic Information: | |||||||||||
Sales (a): | |||||||||||
United States | $ | 749.9 | $ | 741.7 | $ | 742.2 | |||||
United Kingdom | 294.4 | 267.4 | 283.2 | ||||||||
Canada | 9.0 | 30.4 | 54.8 | ||||||||
Australia | 161.9 | 148.5 | 181.9 | ||||||||
Middle East | 42.0 | 35.4 | 38.0 | ||||||||
Far East | 76.6 | 78.2 | 56.9 | ||||||||
Other | 64.6 | 59.8 | 47.1 | ||||||||
Total sales | $ | 1,398.4 | $ | 1,361.4 | $ | 1,404.1 | |||||
(a) Sales are attributed to countries or regions based on the location of customers. | |||||||||||
Long-lived assets, net: | |||||||||||
United States | $ | 49.8 | $ | 43.9 | $ | 42.4 | |||||
United Kingdom | 9.3 | 9.2 | 9.5 | ||||||||
Other foreign countries | 6.3 | 6.6 | 6.1 | ||||||||
Total long-lived assets, net | $ | 65.4 | $ | 59.7 | $ | 58.0 | |||||
MSS and CDS segment sales include $651.5 million, $691.8 million and $699.4 million in 2014, 2013 and 2012, respectively, of sales to U.S. government agencies. CTS segment sales include $213.2 million, $193.4 million and $184.7 million in 2014, 2013 and 2012, respectively, of sales under various contracts with our customer, Transport for London. No other customer accounts for 10% or more of our revenues for any periods presented. | |||||||||||
Changes in estimates on contracts for which revenue is recognized using the cost-to-cost percentage-of-completion method increased operating income by approximately $1.3 million in 2014, decreased operating income by approximately $1.7 million in 2013 and increased operating income by approximately $15.7 million in 2012. These adjustments increased net income by approximately $3.5 million ($0.13 per share) in 2014, decreased $0.3 million ($0.01 per share) in 2013 and increased net income by approximately $10.7 million ($0.40 per share) in 2012. | |||||||||||
Certain of our transportation systems service contracts contain service level or system usage incentives, for which we recognize revenues when the incentive award is fixed or determinable. These contract incentives are generally based upon monthly service levels or monthly performance and become fixed or determinable on a monthly basis. However, one of our transportation systems service contracts contains annual system usage incentives which are based upon system usage compared to annual baseline amounts. For this contract the annual system usage incentives are not considered fixed or determinable until the end of the contract year for which the incentives are measured, which falls within the second quarter of our fiscal year. During the years ended September 30, 2014, 2013, and 2012, we recognized sales of $12.2 million, $13.2 million, and $12.2 million, respectively related to annual system usage incentives on this transportation systems contract which resulted in additional operating income of the same amounts in these respective periods. | |||||||||||
In 2014 we incurred restructuring charges of $1.1 million primarily by our CTS business in September 2014 as a result of a planned reduction of employee headcount in the US by approximately 20. This restructuring was predominantly driven by the reduction in work on certain contracts that are in the process of moving from the design and build phase to the services phase. | |||||||||||
In 2013, we incurred restructuring charges of $8.1 million by our CDS segment to reduce global employee headcount by approximately 230 in order to rebalance our resources with work levels that declined due to delays in contract awards and contract funding. | |||||||||||
A summary of the activity relating to the restructuring liability and employee separation expenses, which is included within accrued compensation and other current liabilities within our Consolidated Balance Sheet, is as follows (in thousands): | |||||||||||
Liability as of September 30, 2012 | $ | — | |||||||||
Accrued costs | 8,139 | ||||||||||
Cash payments | (5,919 | ) | |||||||||
Liability as of September 30, 2013 | $ | 2,220 | |||||||||
Accrued costs | 1,094 | ||||||||||
Cash payments | (2,538 | ) | |||||||||
Liability as of September 30, 2014 | $ | 776 | |||||||||
SUMMARY_OF_QUARTERLY_RESULTS_O
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | ' | ||||||||||||||||
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | ' | ||||||||||||||||
NOTE 17—SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |||||||||||||||||
The following is a summary of our quarterly results of operations for the fiscal years ended September 30, 2014 and 2013: | |||||||||||||||||
Year | |||||||||||||||||
Three Months Ended | Ended | ||||||||||||||||
Fiscal 2014 | September 30 | June 30 | March 31 | December 31 | September 30 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Net sales | $ | 396,366 | $ | 340,357 | $ | 354,492 | $ | 307,137 | $ | 1,398,352 | |||||||
Operating income | 39,268 | 19,215 | 22,177 | 11,830 | 92,490 | ||||||||||||
Net income attributable to Cubic | 32,805 | 12,206 | 16,092 | 8,388 | 69,491 | ||||||||||||
Net income per share, basic | 1.22 | 0.46 | 0.60 | 0.31 | 2.59 | ||||||||||||
Net income per share, diluted | 1.22 | 0.45 | 0.60 | 0.31 | 2.59 | ||||||||||||
Year | |||||||||||||||||
Three Months Ended | Ended | ||||||||||||||||
Fiscal 2013 | September 30 | June 30 | March 31 | December 31 | September 30 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Net sales | $ | 340,776 | $ | 337,226 | $ | 368,609 | $ | 314,796 | $ | 1,361,407 | |||||||
Operating income (loss) | (44,055 | ) | 26,905 | 37,376 | 20,509 | 40,735 | |||||||||||
Net income (loss) attributable to Cubic | (37,186 | ) | 18,381 | 29,650 | 14,241 | 25,086 | |||||||||||
Net income (loss) per share, basic | (1.39 | ) | 0.69 | 1.11 | 0.53 | 0.94 | |||||||||||
Net income (loss) per share, diluted | (1.39 | ) | 0.69 | 1.11 | 0.53 | 0.94 | |||||||||||
In the fourth quarter of 2013, we completed our annual goodwill impairment test and concluded that the carrying value of our MSS reporting unit, including goodwill, exceeded its estimated fair value. As a result, in the fourth quarter of 2013 we recorded a goodwill impairment charge of $50.9 million (before applicable income taxes). There was no goodwill impairment charge in 2014. See Note 7 for a further discussion of the goodwill impairment. | |||||||||||||||||
Changes in estimates on contracts for which revenue is recognized using the cost-to-cost-percentage-of-completion method increased operating profit by approximately $10.7 million in the three months ended September 30, 2014 and decreased operating profit by approximately $9.9 million in the three months ended September 30, 2013. These adjustments increased net income by approximately $7.6 million ($0.28 per share) in the three months ended September 30, 2014 and decreased net income by approximately $6.6 million ($0.25 per share) in the three months ended and September 30, 2013. | |||||||||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT1
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
Organization and Nature of the Business | ' | ||||||||||
Organization and Nature of the Business: We design, develop and manufacture products which are mainly electronic in nature such as mass transit fare collection systems, air and ground combat training systems, and secure communications products. We provide services such as specialized military training exercises, including live, virtual and constructive training exercises and support, and we operate and maintain fare systems for mass transit customers. Our principal lines of business are transportation fare collection systems and services, defense services, and defense systems. Our principal customers for defense products and services are the U.S. and foreign governments. Our transportation fare collection systems and services are sold primarily to large local government agencies worldwide. | |||||||||||
Principles of Consolidation | ' | ||||||||||
Principles of Consolidation: The consolidated financial statements include the accounts of Cubic Corporation, its majority-owned subsidiaries and its 50% owned variable interest entity, Transaction Systems Limited (TranSys). We consolidate variable interest entities (VIE) when we determine that Cubic is the primary beneficiary of the VIE. All significant intercompany balances and transactions have been eliminated in consolidation. | |||||||||||
Foreign Currency Transactions and Translation | ' | ||||||||||
Foreign Currency Transactions and Translation: Our reporting currency is the U.S. dollar. Assets and liabilities of foreign subsidiaries are translated at the spot rate in effect at the applicable reporting date, and our Consolidated Statements of Income are translated at the average exchange rates in effect during the applicable periods. The resulting unrealized cumulative translation adjustments are recorded as a component of other comprehensive income (loss) in our Consolidated Statements of Comprehensive Income. Cash flows from our operations in foreign countries are translated at the average rate for the applicable period. The effect of exchange rates on cash balances held in foreign currencies are separately reported in our Consolidated Statements of Cash Flows. | |||||||||||
Transactions denominated in currencies other than our or our subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our Consolidated Balance Sheets related to such transactions result in transaction gains and losses that are reflected in our Consolidated Statements of Income as either unrealized (based on the applicable period end translation) or realized (upon settlement of the transactions). Total transaction gains (losses), which are related primarily to advances to foreign subsidiaries amounted to $(1.3) million, $(0.8) million and $0.7 million in 2014, 2013 and 2012, respectively. | |||||||||||
Use of Estimates | ' | ||||||||||
Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles (GAAP) requires us to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Significant estimates include the estimated total costs at completion of our long-term contracts, estimated loss contingencies, estimated self-insurance liabilities, estimated discounted future cash flows of our reporting units used for goodwill impairment testing and estimated future cash flows for our long-lived asset impairment testing, estimated discounted cash flows used for valuation of intangible assets in business combinations, and estimated rates of return and discount rates related to our defined benefit pension plans. Actual results could differ from our estimates. | |||||||||||
Risks and Uncertainties | ' | ||||||||||
Risks and Uncertainties: We are subject to the normal risks and uncertainties of performing large, multiyear, often fixed-price contracts. In addition, we are subject to audit of incurred costs related to many of our U.S. government contracts. These audits could produce different results than we have estimated; however, our experience has been that our costs are acceptable to the government. | |||||||||||
Cash Equivalents | ' | ||||||||||
Cash Equivalents: We consider highly liquid investments with maturity of three months or less when purchased to be cash equivalents. | |||||||||||
Restricted Cash | ' | ||||||||||
Restricted Cash: Restricted cash represents cash that is restricted as to withdrawal usage for legal or contractual reasons. Restricted cash is classified either as current or non-current, depending upon the date of the lapse of the respective restriction. | |||||||||||
Concentration of Credit Risk | ' | ||||||||||
Concentration of Credit Risk: We have established guidelines pursuant to which our cash and cash equivalents are diversified among various money market instruments and investment funds. These guidelines emphasize the preservation of capital by requiring minimum credit ratings assigned by established credit organizations. We achieve diversification by specifying maximum investments in each instrument type and issuer. The majority of these investments are not on deposit in federally insured accounts. | |||||||||||
Marketable Securities | ' | ||||||||||
Marketable Securities: Marketable securities consist of exchange traded funds whose underlying assets consist of highly liquid debt instruments with short-term maturities and certificates of deposit with banks. Marketable securities are classified and accounted for as available-for-sale. These investments are recorded at fair value in the accompanying Consolidated Balance Sheets and the change in fair value is recorded, net of taxes, as a component of other comprehensive income. There have been no significant realized or unrealized gains or losses on these marketable securities to date. Marketable securities have been classified as current assets in the accompanying Consolidated Balance Sheets based upon the nature of the securities and availability for use in current operations. | |||||||||||
Accounts Receivable | ' | ||||||||||
Accounts Receivable: Receivables consist primarily of amounts due from U.S. and foreign governments for defense products and services and local government agencies for transportation systems. Due to the nature of our customers, we generally do not require collateral. We have limited exposure to credit risk as we have historically collected substantially all of our receivables from government agencies. We generally require no allowance for doubtful accounts for these customers. | |||||||||||
Inventories | ' | ||||||||||
Inventories: We state our inventories at the lower of cost or market. We determine cost using the first-in, first-out (FIFO) method, which approximates current replacement cost. We value our work in process at the actual production and engineering costs incurred to date, including applicable overhead. For contracts with the U.S. government our work in process also includes general and administrative costs. Any inventoried costs in excess of estimated realizable value are immediately charged to cost of sales. Where contracts include advances, performance-based payments and progress payments, we reflect the advances as an offset against any related inventory balances. We include qualifying contract costs allocable to units-of-delivery contracts as inventory. We also receive performance-based payments and progress payments associated with certain of these contracts based on the billing terms in the underlying contracts. Pursuant to contract provisions, agencies of the U.S. government and certain other customers have title to, or security interest in, inventories related to such contracts as a result of advances, performance-based payments, and progress payments. Contract advances, performance-based payments and progress payments received are recorded as an offset against the related inventory balances for contracts that that are accounted for on a percentage-of-completion basis using units-of-delivery as the basis to measure progress toward completing the contract. This determination is performed on a contract by contract basis. Any amount of payments received in excess of the cumulative amount of accounts receivable and inventoried costs for a contract is classified as customer advances, which is classified as a liability on the balance sheet. | |||||||||||
Long-term capitalized contract costs | ' | ||||||||||
Long-term capitalized contract costs: Long-term capitalized contract costs include costs incurred on a contract to develop and manufacture a transportation fare system for a customer for which revenue recognition did not begin until the customer began operating the system in the fourth quarter of 2013. These capitalized costs are being recognized in cost of sales based upon the ratio of revenue recorded during a period compared to the revenue expected to be recognized over the term of the contract. | |||||||||||
Property, Plant and Equipment | ' | ||||||||||
Property, Plant and Equipment: We carry property, plant and equipment at cost. We provide depreciation in amounts sufficient to amortize the cost of the depreciable assets over their estimated useful lives. Generally, we use straight-line methods for depreciable real property over estimated useful lives or the term of the underlying lease for leasehold improvements. We use accelerated methods (declining balance and sum-of-the-years-digits) for machinery and equipment over their estimated useful lives. | |||||||||||
Goodwill and Purchased Intangibles | ' | ||||||||||
Goodwill and Purchased Intangibles: We evaluate goodwill for potential impairment annually as of July 1, or when circumstances indicate that the carrying value may not be recoverable. The test is performed by comparing the fair value of each of our reporting units, which are consistent with our operating segments, to its carrying value, including recorded goodwill. If the carrying value exceeds the fair value, we measure impairment by comparing the implied fair value of goodwill to its carrying value, and any impairment determined would be recorded in the current period. Our purchased intangible assets are subject to amortization and we use a combination of straight-line and accelerated methods, based on the expected cash flows from the assets. See Note 7 for a discussion of the impairment of our goodwill in 2013. | |||||||||||
Impairment of Long-Lived Assets | ' | ||||||||||
Impairment of Long-Lived Assets: We generally evaluate the carrying values of long-lived assets other than goodwill for impairment only if events or changes in facts and circumstances indicate that carrying values may not be recoverable. If we determined there was any impairment, we would measure it by comparing the fair value of the related asset to its carrying value and record the difference in the current period. Fair value is generally determined by identifying estimated discounted cash flows to be generated by those assets. We have not recorded any impairment of long-lived assets for the years ended September 30, 2014, 2013 and 2012. | |||||||||||
Recognizing assets acquired and liabilities assumed in a business combination | ' | ||||||||||
Recognizing assets acquired and liabilities assumed in a business combination: Acquired assets and assumed liabilities are recognized in a business combination on the basis of their fair values at the date of acquisition. We assess fair value, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, using a variety of methods including income approaches such as present value techniques or cost approaches such as the estimation of current selling prices and replacement values. Fair value of the assets acquired and liabilities assumed, including intangible assets, and contingent payments, are measured based on the assumptions and estimations with regards to the variable factors such as the amount and timing of future cash flows for the asset or liability being measured, appropriate risk-adjusted discount rates, nonperformance risk, or other factors that market participants would consider. Upon acquisition, we determine the estimated economic lives of the acquired intangible assets for amortization purposes, which are based on the underlying expected cash flows of such assets. Adjustments to inventory are based on the fair market value of inventory and amortized into income based on the period in which the underlying inventory is sold. Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Actual results may vary from projected results and assumptions used in the fair value assessments. | |||||||||||
Customer Advances | ' | ||||||||||
Customer Advances: We receive advances, performance-based payments and progress payments from customers that may exceed revenues recognized on certain contracts, including contracts with agencies of the U.S. government. We classify such advances, other than those reflected as a reduction of receivables or inventories, as current liabilities. | |||||||||||
Contingencies | ' | ||||||||||
Contingencies: We establish reserves for loss contingencies when, in the opinion of management, the likelihood of liability is probable and the extent of such liability is reasonably estimable. Estimates, by their nature, are based on judgment and currently available information and involve a variety of factors, including the type and nature of the litigation, claim or proceeding, the progress of the matter, the advice of legal counsel, our defenses and our experience in similar cases or proceedings as well as our assessment of matters, including settlements, involving other defendants in similar or related cases or proceedings. We may increase or decrease our legal reserves in the future, on a matter-by-matter basis, to account for developments in such matters. | |||||||||||
Derivative Financial Instruments | ' | ||||||||||
Derivative Financial Instruments: All derivatives are recorded at fair value, however, the classification of gains and losses resulting from changes in the fair values of derivatives are dependent on the intended use of the derivative and its resulting designation. If a derivative is designated as a fair value hedge, then a change in the fair value of the derivative is offset against the change in the fair value of the underlying hedged item and only the ineffective portion of the hedge, if any, is recognized in cost of sales. If a derivative is designated as a cash flow hedge, then the effective portion of a change in the fair value of the derivative is recognized as a component of accumulated other comprehensive income until the underlying hedged item is recognized in cost of sales, or the forecasted transaction is no longer probable of occurring. If a derivative does not qualify as a highly effective hedge, a change in fair value is immediately recognized in earnings. We formally document hedging relationships for all derivative hedges and the underlying hedged items, as well as the risk management objectives and strategies for undertaking the hedge transactions. | |||||||||||
Defined Benefit Pension Plans | ' | ||||||||||
Defined Benefit Pension Plans: Some of our employees are covered by defined benefit pension plans. The net periodic cost of our plans is determined using several actuarial assumptions, the most significant of which are the discount rate and the long-term rate of return on plan assets. We recognize on a plan-by-plan basis the funded status of our defined benefit pension plans as either an asset or liability on our balance sheets, with a corresponding adjustment to accumulated other comprehensive income (loss), net of tax, in shareholders’ equity. The funded status is measured as the difference between the fair value of the plan assets and the benefit obligation of the plan. | |||||||||||
Comprehensive Income | ' | ||||||||||
Comprehensive Income: Other comprehensive income (loss), which is comprised of unrealized gains and losses on foreign currency translation adjustments, unrealized gains and losses on cash flow hedges, net of tax, unrealized gains and losses on available-for-sale securities, net of tax and pension liability adjustments, net of tax is included in our Consolidated Statement of Comprehensive Income as other comprehensive income (loss). | |||||||||||
Revenue Recognition | ' | ||||||||||
Revenue Recognition: We generate revenue from the sale of products such as mass transit fare collection systems, air and ground combat training systems, and secure communications products. We also generate revenue from services we provide such as specialized military training exercises, including live, virtual and constructive training exercises and support, and we operate and maintain fare systems for mass transit customers. We classify sales as products or services in our Consolidated Statements of Income based on the attributes of the underlying contracts. | |||||||||||
We recognize sales and profits under our long-term fixed-price contracts which require a significant amount of development effort in relation to total contract value using the cost-to-cost percentage-of-completion method of accounting. We record sales and profits based on the ratio of contract costs incurred to estimated total contract costs at completion. Contract costs include material, labor and subcontracting costs, as well as an allocation of indirect costs. For contracts with the U.S. federal government, general and administrative costs are included in contract costs; however, for purposes of revenue measurement, general and administrative costs are not considered contract costs for any other customers. Costs are recognized as incurred for contracts accounted for under the cost- to-cost percentage-of-completion method. | |||||||||||
For certain other long-term, fixed price production contracts not requiring substantial development effort we use the units-of-delivery percentage-of-completion method as the basis to measure progress toward completing the contract and recognizing sales. The units-of delivery measure recognizes revenues as deliveries are made to the customer generally using unit sales values in accordance with the contract terms. Costs of sales are recorded as deliveries are made. We estimate profit as the difference between total estimated revenue and total estimated cost of a contract and recognize that profit over the life of the contract based on deliveries. | |||||||||||
For long-term fixed price contracts, we only include amounts representing contract change orders, claims or other items in the contract value when they can be reliably estimated and we consider realization probable. Changes in estimates of sales, costs and profits are recognized using the cumulative catch-up method of accounting. This method recognizes in the current period the cumulative effect of the changes on current and prior periods. A significant change in one or more of these estimates could have a material effect on our consolidated financial position or results of operations. | |||||||||||
We record sales under cost-reimbursement-type contracts as we incur the costs. The Federal Acquisition Regulations provide guidance on the types of costs that we will be reimbursed in establishing the contract price. We consider incentives or penalties and awards applicable to performance on contracts in estimating sales and profits, and record them when there is sufficient information to assess anticipated contract performance. We do not recognize incentive provisions that increase or decrease earnings based solely on a single significant event until the event occurs. | |||||||||||
We occasionally enter into contracts that include multiple deliverables such as the construction or upgrade of a system and subsequent services to operate and maintain the delivered system. For such contracts, arrangement consideration is allocated at the inception of the arrangement to all deliverables using the relative-selling-price method. Under the relative-selling-price method, the selling price for each deliverable is determined using vendor specific objective evidence (VSOE) of selling price or third-party evidence of selling price if VSOE does not exist. If neither VSOE nor third-party evidence of selling price exists for a deliverable, which is typically the case for our contracts, the guidance requires us to determine the best estimate of the selling price, which is the price at which we would sell the deliverable if it were sold on a standalone basis. In estimating the selling price of the deliverable on a standalone basis, we consider our overall pricing models and objectives, including the factors we contemplate in negotiating our contracts with our customers. The pricing models and objectives that we use are generally based upon a cost-plus margin approach, with the estimated margin based in part on qualitative factors such as perceived customer pricing sensitivity and competitive pressures. | |||||||||||
Once the contract value is allocated to the separate deliverables under a multiple-element arrangement, revenue recognition guidance relevant to each contractual element is followed. For example, for the long-term construction portion of a contract we generally use the percentage-of completion method and for the services portion we generally recognize the service revenues on a straight-line basis over the contractual service period or based on measurable units of work performed or incentives earned. | |||||||||||
For certain of our multiple-element arrangements, the contract specifies that we will not be paid upon the delivery of certain units of accounting, but rather we will be paid when subsequent performance obligations are satisfied. Generally, in these cases the allocation of arrangement consideration to the up-front deliverables is limited, in some cases to zero, and revenue is reduced, in some cases to zero for the delivery of up-front units of accounting. In such situations, if the costs associated with the delivered item exceed the amount of allocable arrangement consideration, we defer the direct and incremental costs associated with the delivered item that are in excess of the allocated arrangement consideration as capitalized contract costs. We assess recoverability of these costs by comparing the recorded asset to the deferred revenue in excess of the transaction price allocated to the remaining deliverables in the arrangement. Capitalized contract costs are subsequently recognized in income in a manner that is consistent with revenue recognition pattern for the arrangement as a whole. If no pattern of revenue recognition can be reasonably predicted for the arrangement, the capitalized costs are amortized on a straight-line basis. | |||||||||||
Revenue under our service contracts with the U.S. government is recorded under the cost-to cost percentage-of-completion method. Award fees and incentives related to performance under these service contracts are accrued during the performance of the contract based on our historical experience and estimates of success with such awards. | |||||||||||
Revenue under contracts for services other than those with the U.S. government and those associated with design, development, or production activities is recognized either as services are performed or when a contractually required event has occurred, depending on the contract. For such contracts that contain measurable units of work performed we recognize sales when the units of work are completed. Certain of our transportation systems service contracts contain service level or system usage incentives, for which we recognize revenues when the incentive award is fixed or determinable. These contract incentives are generally based upon monthly service levels or monthly performance and become fixed or determinable on a monthly basis. However, one of our transportation systems service contracts contains annual system usage incentives which are based upon system usage compared to annual baseline amounts. For this contract the annual system usage incentives are not considered fixed or determinable until the end of the contract year for which the incentives are measured, which falls within the second quarter of our fiscal year. Revenue under such contracts that do not contain measurable units of work performed, which is generally the case for our service contracts, is recognized on a straight- line basis over the contractual service period, unless evidence suggests that the revenue is earned, or obligations fulfilled, in a different manner. Costs incurred under these services contracts are expensed as incurred. | |||||||||||
We make provisions in the current period to fully recognize any anticipated losses on contracts. If we receive cash on a contract prior to revenue recognition or in excess of inventoried costs, we classify it as a customer advance on the balance sheet. | |||||||||||
Research and Development (R&D) | ' | ||||||||||
Research and Development (R&D) : We record the cost of company sponsored R&D activities as the expenses are incurred. The cost of engineering and product development activities incurred in connection with the performance of work on our contracts is included in cost of sales as they are directly related to contract performance. | |||||||||||
Stock-Based Compensation | ' | ||||||||||
Stock-Based Compensation: Restricted stock units awards (RSUs) are granted to eligible employees and directors and represent rights to receive shares of common stock at a future date if vesting occurs. RSUs granted to date have either time-based vesting or performance-based vesting. Compensation expense for all restricted stock unit awards is measured at fair value at the grant date and recognized based upon the number of RSUs that ultimately vest. We determine the fair value of RSUs based on the closing market price of our common stock on the grant date. The grant date of the performance-based RSUs takes place when the grant is authorized and the specific achievement goals are communicated. | |||||||||||
Compensation expense for time-based vesting awards is recorded on a straight-line basis over the requisite service period, adjusted by estimated forfeiture rates. Vesting of performance-based RSUs is tied to achievement of specific company goals over the measurement period, which is generally a three-year period from the date of the grant. For purposes of measuring compensation expense for performance-based RSUs, at each reporting date we estimate the number of shares for which vesting is deemed probable based on management’s expectations regarding achievement of the relevant performance criteria, adjusted by estimated forfeiture rates. Compensation expense for the number of shares ultimately expected to vest is recognized on a straight-line basis over the requisite service period for the performance-based RSUs. The recognition of compensation expense associated with performance-based RSUs requires judgment in assessing the probability of meeting the performance goals. For performance-based RSUs, there may be significant expense recognition or reversal of recognized expense in periods in which there are changes in the assessed probability of meeting performance-based vesting criteria. | |||||||||||
Income Taxes | ' | ||||||||||
Income Taxes: Our provision for income taxes includes federal, state, local and foreign income taxes. We recognize tax credits, primarily for R&D, as a reduction of our provision for income taxes in the year in which they are available for tax purposes. We provide deferred income taxes on temporary differences between assets and liabilities for financial reporting and tax purposes as measured by enacted tax rates we expect to apply when the temporary differences are settled or realized. We establish valuation allowances for deferred tax assets when the amount of future taxable income we expect is not likely to support the use of the deduction or credit. We evaluate the capital requirements of our foreign subsidiaries and determine the amount of excess capital, if any, that is available for distribution. We provide for U.S. taxes on the amount we determine to be excess capital available for distribution. U.S. taxes are not provided on amounts we consider to be indefinitely reinvested. | |||||||||||
Net Income Per Share | ' | ||||||||||
Net Income Per Share: Basic net income per share (EPS) is computed by dividing the net income for the period by the weighted average number of common shares outstanding during the period, including vested RSUs. | |||||||||||
Diluted EPS is computed by dividing the net income for the period by the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares consist of dilutive restricted stock units. Dilutive restricted stock units are calculated based on the average share price for each fiscal period using the treasury stock method. For RSUs with performance-based vesting, no common equivalent shares are included in the computation of diluted EPS until the related performance criteria have been met. | |||||||||||
Basic and diluted EPS are computed as follows (amounts in thousands, except per share data): | |||||||||||
Year Ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net income attributable to Cubic | $ | 69,491 | $ | 25,086 | $ | 97,427 | |||||
Weighted average shares - basic | 26,787 | 26,736 | 26,736 | ||||||||
Effect of dilutive securities | 58 | 24 | — | ||||||||
Weighted average shares - diluted | 26,845 | 26,760 | 26,736 | ||||||||
Net income per share attributable to Cubic, basic | $ | 2.59 | $ | 0.94 | $ | 3.64 | |||||
Effect of dilutive securities | — | — | — | ||||||||
Net income per share attributable to Cubic, diluted | $ | 2.59 | $ | 0.94 | $ | 3.64 | |||||
Anti-dilutive employee share-based awards | — | — | — | ||||||||
Recent Accounting Pronouncements | ' | ||||||||||
Recent Accounting Pronouncements: | |||||||||||
In July 2013, the FASB issued ASU No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists which requires companies to present in the financial statements an unrecognized tax benefit as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward except to the extent such items are not available or not intended to be used at the reporting date to settle any additional income taxes that would result from the disallowance of a tax position. In such instances, the unrecognized tax benefit is required to be presented in the financial statements as a liability and not be combined with deferred tax assets. This amendment is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. Accordingly, we will adopt this standard in the first quarter of fiscal year 2015. We are currently evaluating the impact of adopting this guidance. | |||||||||||
In April 2014, the FASB issued ASU No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments contained in this update change the criteria for reporting discontinued operations and enhance the reporting requirements for discontinued operations. Under the revised standard, a discontinued operation must represent a strategic shift that has or will have a major effect on an entity’s operations and financial results. Examples could include a disposal of a major line of business, a major geographical area, a major equity method investment, or other major parts of an entity. The revised standard will also allow an entity to have certain continuing cash flows or involvement with the component after the disposal. Additionally, the standard requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations. This ASU is effective for reporting periods beginning after December 15, 2014 with early adoption permitted, but only for disposals (or classifications as held for sale) that have not been reported in financial statements previously issued or available for issue. This adoption is not expected to have a significant impact on our financial statements. | |||||||||||
In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU 2014-09 outlines a comprehensive revenue recognition model and supersedes most current revenue recognition guidance and will require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which the company expects to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. ASU 2014-09 will be effective for us starting in the first quarter of fiscal 2018. ASU 2014-09 allows for two methods of adoption: (a) “full retrospective” adoption, meaning the standard is applied to all periods presented, or (b) “modified retrospective” adoption, meaning the cumulative effect of applying ASU 2014-09 is recognized as an adjustment to the fiscal 2018 opening retained earnings balance. We have not yet determined which method of adoption we will select. As the new standard will supersede substantially all existing revenue guidance affecting us under GAAP, it could impact revenue and cost recognition on a significant number of contracts across our business segments, in addition to our business processes and our information technology systems. As a result, our evaluation of the effect of the new standard will likely extend over several future periods. | |||||||||||
In August 2014, the FASB issued ASU 2014-15, Presentation of Financial Statements - Going Concern, which requires management to evaluate whether there is substantial doubt about an entity’s ability to continue as a going concern and provide related footnote disclosures. The guidance is effective for annual and interim reporting periods beginning on or after December 15, 2016. Early adoption is permitted for financial statements that have not been previously issued. This adoption is not expected to have a significant impact on our financial statements. | |||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ||||||||||
Schedule of computation of basic and diluted EPS | ' | ||||||||||
Basic and diluted EPS are computed as follows (amounts in thousands, except per share data): | |||||||||||
Year Ended September 30, | |||||||||||
2014 | 2013 | 2012 | |||||||||
Net income attributable to Cubic | $ | 69,491 | $ | 25,086 | $ | 97,427 | |||||
Weighted average shares - basic | 26,787 | 26,736 | 26,736 | ||||||||
Effect of dilutive securities | 58 | 24 | — | ||||||||
Weighted average shares - diluted | 26,845 | 26,760 | 26,736 | ||||||||
Net income per share attributable to Cubic, basic | $ | 2.59 | $ | 0.94 | $ | 3.64 | |||||
Effect of dilutive securities | — | — | — | ||||||||
Net income per share attributable to Cubic, diluted | $ | 2.59 | $ | 0.94 | $ | 3.64 | |||||
Anti-dilutive employee share-based awards | — | — | — | ||||||||
ACQUISITIONS_Tables
ACQUISITIONS (Tables) | 12 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
Acquisitions | ' | |||||||||||||
Schedule of estimated amortization expense related to acquisition | ' | |||||||||||||
The table below shows our expected amortization of purchased intangibles as of September 30, 2014, for each of the next five years and thereafter (in thousands): | ||||||||||||||
Transportation | Defense | Mission | Total | |||||||||||
Systems | Systems | Support | ||||||||||||
Services | ||||||||||||||
2015 | $ | 8,886 | $ | 2,129 | $ | 7,690 | $ | 18,705 | ||||||
2016 | 7,686 | 1,503 | 4,714 | 13,903 | ||||||||||
2017 | 6,566 | 841 | 2,452 | 9,859 | ||||||||||
2018 | 5,442 | 522 | 1,775 | 7,739 | ||||||||||
2019 | 3,048 | 249 | 1,184 | 4,481 | ||||||||||
Thereafter | 3,750 | 53 | 5,128 | 8,931 | ||||||||||
$ | 35,378 | $ | 5,297 | $ | 22,943 | $ | 63,618 | |||||||
Schedule of changes in the carrying amount of goodwill | ' | |||||||||||||
The changes in the carrying amount of goodwill for the two years ended September 30, 2014 are as follows (in thousands): | ||||||||||||||
Transportation | Defense | Mission | Total | |||||||||||
Systems | Systems | Support | ||||||||||||
Services | ||||||||||||||
Balances at October 1, 2012 | $ | 7,517 | $ | 20,983 | $ | 118,433 | $ | 146,933 | ||||||
Acquisitions (see Note 2) | 10,837 | 2,466 | 26,782 | 40,085 | ||||||||||
Impairment of goodwill | — | — | (50,865 | ) | (50,865 | ) | ||||||||
Foreign currency exchange rate changes | (53 | ) | (6 | ) | — | (59 | ) | |||||||
Balances at September 30, 2013 | 18,301 | 23,443 | 94,350 | 136,094 | ||||||||||
Acquisitions (see Note 2) | 40,792 | 7,365 | — | 48,157 | ||||||||||
Foreign currency exchange rate changes | 74 | (184 | ) | — | (110 | ) | ||||||||
Balances at September 30, 2014 | $ | 59,167 | $ | 30,624 | $ | 94,350 | $ | 184,141 | ||||||
Schedule of unaudited pro forma information | ' | |||||||||||||
The following unaudited pro forma information presents our consolidated results of operations as if Intific, ITMS, AIS, PSMC, NextBus and NEK had been included in our consolidated results since October 1, 2012 (in millions): | ||||||||||||||
Years Ended | ||||||||||||||
September 30, | ||||||||||||||
2014 | 2013 | |||||||||||||
Net sales | $ | 1,411.0 | $ | 1,460.6 | ||||||||||
Net income attributable to Cubic | 69.2 | 31.2 | ||||||||||||
Intific Inc. | ' | |||||||||||||
Acquisitions | ' | |||||||||||||
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date | ' | |||||||||||||
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): | ||||||||||||||
Customer relationships | $ | 2 | ||||||||||||
Technology | 0.7 | |||||||||||||
Backlog | 0.7 | |||||||||||||
Other intangible assets | 0.2 | |||||||||||||
Accounts receivable | 1.5 | |||||||||||||
Deferred tax assets | 1.5 | |||||||||||||
Accounts payable and accrued expenses | (0.6 | ) | ||||||||||||
Deferred tax liabilities | (1.5 | ) | ||||||||||||
Other net assets acquired | 0.5 | |||||||||||||
Net identifiable assets acquired | 5 | |||||||||||||
Goodwill | 7.4 | |||||||||||||
Net assets acquired | $ | 12.4 | ||||||||||||
Schedule of estimated amortization expense related to acquisition | ' | |||||||||||||
The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of Intific for future periods is as follows (in millions): | ||||||||||||||
Year Ended | ||||||||||||||
September 30, | ||||||||||||||
2015 | $ | 0.9 | ||||||||||||
2016 | 0.7 | |||||||||||||
2017 | 0.6 | |||||||||||||
2018 | 0.5 | |||||||||||||
2019 | 0.2 | |||||||||||||
Thereafter | 0.1 | |||||||||||||
ITMS | ' | |||||||||||||
Acquisitions | ' | |||||||||||||
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date | ' | |||||||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): | ||||||||||||||
Customer relationships | $ | 15.7 | ||||||||||||
Intellectual property | 1.6 | |||||||||||||
Backlog | 5.7 | |||||||||||||
Supplier relationships | 0.6 | |||||||||||||
Agreements with seller | 1.3 | |||||||||||||
Accounts receivable - billed | 4.4 | |||||||||||||
Accounts receivable - unbilled | 6.9 | |||||||||||||
Deferred tax liabilities, net | (0.2 | ) | ||||||||||||
Deferred revenue | (2.6 | ) | ||||||||||||
Accounts payable and accrued expenses | (4.6 | ) | ||||||||||||
Other net assets acquired | 2.6 | |||||||||||||
Net identifiable assets acquired | 31.4 | |||||||||||||
Goodwill | 40.8 | |||||||||||||
Net assets acquired | $ | 72.2 | ||||||||||||
Schedule of estimated amortization expense related to acquisition | ' | |||||||||||||
The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of ITMS for future periods is as follows (in millions): | ||||||||||||||
Year Ended | ||||||||||||||
September 30, | ||||||||||||||
2015 | $ | 5.9 | ||||||||||||
2016 | 4.9 | |||||||||||||
2017 | 3.9 | |||||||||||||
2018 | 2.9 | |||||||||||||
2019 | 0.9 | |||||||||||||
Thereafter | 0.1 | |||||||||||||
NEK Special Programs Group LLC (NEK) | ' | |||||||||||||
Acquisitions | ' | |||||||||||||
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date | ' | |||||||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): | ||||||||||||||
Customer relationships | $ | 13.3 | ||||||||||||
Corporate trade names | 4.9 | |||||||||||||
Non-compete agreements | 0.2 | |||||||||||||
Accounts receivable -billed | 3.1 | |||||||||||||
Accounts receivable -unbilled | 7.7 | |||||||||||||
Accounts payable | (3.0 | ) | ||||||||||||
Other net liabilities assumed | (0.4 | ) | ||||||||||||
Net identifiable assets acquired | 25.8 | |||||||||||||
Goodwill | 26.8 | |||||||||||||
Net assets acquired | $ | 52.6 | ||||||||||||
Schedule of estimated amortization expense related to acquisition | ' | |||||||||||||
The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of NEK for future periods is as follows (in millions): | ||||||||||||||
Year Ended | ||||||||||||||
September 30, | ||||||||||||||
2015 | $ | 2.9 | ||||||||||||
2016 | 2.4 | |||||||||||||
2017 | 1.9 | |||||||||||||
2018 | 1.4 | |||||||||||||
2019 | 0.8 | |||||||||||||
Thereafter | 2.8 | |||||||||||||
NextBus, Inc. | ' | |||||||||||||
Acquisitions | ' | |||||||||||||
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date | ' | |||||||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): | ||||||||||||||
Customer relationships | $ | 8.8 | ||||||||||||
Accounts receivable, net | 2.2 | |||||||||||||
Backlog | 1.7 | |||||||||||||
Acquired technology | 1.3 | |||||||||||||
Corporate trade names | 1 | |||||||||||||
Accounts payable and accrued expenses | (1.1 | ) | ||||||||||||
Deferred tax liabilities, net | (3.3 | ) | ||||||||||||
Other net liabilities assumed | (1.2 | ) | ||||||||||||
Net identifiable assets acquired | 9.4 | |||||||||||||
Goodwill | 10.8 | |||||||||||||
Net assets acquired | $ | 20.2 | ||||||||||||
Schedule of estimated amortization expense related to acquisition | ' | |||||||||||||
The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of NextBus for future periods is as follows (in millions): | ||||||||||||||
Year Ended | ||||||||||||||
September 30, | ||||||||||||||
2015 | $ | 1.5 | ||||||||||||
2016 | 1.4 | |||||||||||||
2017 | 1.3 | |||||||||||||
2018 | 1.2 | |||||||||||||
2019 | 1.1 | |||||||||||||
Thereafter | 3.6 | |||||||||||||
AIS | ' | |||||||||||||
Acquisitions | ' | |||||||||||||
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date | ' | |||||||||||||
The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date including the retrospective adjustments described above (in millions): | ||||||||||||||
Customer relationships | $ | 1.4 | ||||||||||||
Technology | 0.9 | |||||||||||||
Backlog | 0.6 | |||||||||||||
Other net liabilities assumed | (2.8 | ) | ||||||||||||
Net identifiable assets acquired | 0.1 | |||||||||||||
Goodwill | 1.9 | |||||||||||||
Net assets acquired | $ | 2 | ||||||||||||
PSMC | ' | |||||||||||||
Acquisitions | ' | |||||||||||||
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date | ' | |||||||||||||
The following table summarizes the estimated fair values of the assets acquired at the acquisition date (in millions): | ||||||||||||||
Customer relationships | $ | 0.6 | ||||||||||||
Backlog | 0.1 | |||||||||||||
Net identifiable assets acquired | 0.7 | |||||||||||||
Goodwill | 0.6 | |||||||||||||
Net assets acquired | $ | 1.3 | ||||||||||||
FAIR_VALUE_OF_FINANCIAL_INSTRU1
FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
FAIR VALUE OF FINANCIAL INSTRUMENTS | ' | |||||||||||||||||||||||||
Summary of assets and liabilities measured and recorded at fair value on Balance Sheet on a recurring basis | ' | |||||||||||||||||||||||||
The following table presents assets and liabilities measured and recorded at fair value on our balance sheets on a recurring basis (in thousands): | ||||||||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash equivalents | $ | 56,333 | $ | — | $ | — | $ | 56,333 | $ | 125,512 | $ | — | $ | — | $ | 125,512 | ||||||||||
Marketable securities | 1,196 | — | — | 1,196 | 4,055 | — | — | 4,055 | ||||||||||||||||||
Current derivative assets | — | 7,389 | — | 7,389 | — | 1,597 | — | 1,597 | ||||||||||||||||||
Noncurrent derivative assets | — | 5,920 | — | 5,920 | — | 6,096 | — | 6,096 | ||||||||||||||||||
Total assets measured at fair value | 57,529 | 13,309 | — | 70,838 | 129,567 | 7,693 | — | 137,260 | ||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Current derivative liabilities | — | 6,645 | — | 6,645 | — | 2,360 | — | 2,360 | ||||||||||||||||||
Noncurrent derivative liabilities | — | 5,878 | — | 5,878 | — | 5,366 | — | 5,366 | ||||||||||||||||||
Contingent consideration to seller of NEK | — | — | — | — | — | — | 3,485 | 3,485 | ||||||||||||||||||
Total liabilities measured at fair value | $ | — | $ | 12,523 | $ | — | $ | 12,523 | $ | — | $ | 7,726 | $ | 3,485 | $ | 11,211 | ||||||||||
Schedule of estimated fair value and carrying value of long-term debt | ' | |||||||||||||||||||||||||
The following table presents the estimated fair value and carrying value of our long-term debt (in millions): | ||||||||||||||||||||||||||
September 30, | 2014 | 2013 | ||||||||||||||||||||||||
Fair value | $ | 99.6 | $ | 95.8 | ||||||||||||||||||||||
Carrying value | 102.4 | 102.9 | ||||||||||||||||||||||||
ACCOUNTS_RECEIVABLE_Tables
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
ACCOUNTS RECEIVABLE | ' | |||||||
Schedule of components of accounts receivable | ' | |||||||
The components of accounts receivable under long-term contracts are as follows (in thousands): | ||||||||
September 30, | 2014 | 2013 | ||||||
U.S. Government Contracts: | ||||||||
Amounts billed | $ | 41,588 | $ | 51,529 | ||||
Recoverable costs and accrued profits on progress completed—not billed | 66,657 | 60,435 | ||||||
108,245 | 111,964 | |||||||
Commercial Customers: | ||||||||
Amounts billed | 80,283 | 47,454 | ||||||
Recoverable costs and accrued profits on progress completed—not billed | 191,417 | 221,911 | ||||||
271,700 | 269,365 | |||||||
379,945 | 381,329 | |||||||
Less unbilled amounts not currently due—commercial customers | (15,870 | ) | (19,021 | ) | ||||
$ | 364,075 | $ | 362,308 | |||||
INVENTORIES_Tables
INVENTORIES (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
INVENTORIES | ' | |||||||
Components of inventories | ' | |||||||
Significant components of inventories are as follows (in thousands): | ||||||||
September 30, | 2014 | 2013 | ||||||
Work in process and inventoried costs under long-term contracts | $ | 58,440 | $ | 80,918 | ||||
Materials and purchased parts | 125 | 693 | ||||||
Customer advances | (19,790 | ) | (21,865 | ) | ||||
$ | 38,775 | $ | 59,746 | |||||
PROPERTY_PLANT_AND_EQUIPMENT_T
PROPERTY, PLANT AND EQUIPMENT (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
PROPERTY, PLANT AND EQUIPMENT | ' | |||||||
Components of property, plant and equipment | ' | |||||||
Significant components of property, plant and equipment are as follows (in thousands): | ||||||||
September 30, | 2014 | 2013 | ||||||
Land and land improvements | $ | 16,056 | $ | 15,996 | ||||
Buildings and improvements | 49,347 | 45,854 | ||||||
Machinery and other equipment | 90,781 | 95,216 | ||||||
Software | 5,710 | 682 | ||||||
Leasehold improvements | 11,191 | 9,714 | ||||||
Accumulated depreciation and amortization | (108,936 | ) | (111,157 | ) | ||||
$ | 64,149 | $ | 56,305 | |||||
GOODWILL_AND_PURCHASED_INTANGI1
GOODWILL AND PURCHASED INTANGIBLE ASSETS (Tables) | 12 Months Ended | |||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||
GOODWILL AND PURCHASED INTANGIBLE ASSETS | ' | |||||||||||||||||||
Schedule of changes in the carrying amount of goodwill | ' | |||||||||||||||||||
The changes in the carrying amount of goodwill for the two years ended September 30, 2014 are as follows (in thousands): | ||||||||||||||||||||
Transportation | Defense | Mission | Total | |||||||||||||||||
Systems | Systems | Support | ||||||||||||||||||
Services | ||||||||||||||||||||
Balances at October 1, 2012 | $ | 7,517 | $ | 20,983 | $ | 118,433 | $ | 146,933 | ||||||||||||
Acquisitions (see Note 2) | 10,837 | 2,466 | 26,782 | 40,085 | ||||||||||||||||
Impairment of goodwill | — | — | (50,865 | ) | (50,865 | ) | ||||||||||||||
Foreign currency exchange rate changes | (53 | ) | (6 | ) | — | (59 | ) | |||||||||||||
Balances at September 30, 2013 | 18,301 | 23,443 | 94,350 | 136,094 | ||||||||||||||||
Acquisitions (see Note 2) | 40,792 | 7,365 | — | 48,157 | ||||||||||||||||
Foreign currency exchange rate changes | 74 | (184 | ) | — | (110 | ) | ||||||||||||||
Balances at September 30, 2014 | $ | 59,167 | $ | 30,624 | $ | 94,350 | $ | 184,141 | ||||||||||||
Schedule of entity's purchased intangible assets | ' | |||||||||||||||||||
The table below summarizes our purchased intangible assets (in thousands): | ||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||
Gross Carrying | Accumulated | Net Carrying | Gross | Accumulated | Net Carrying | |||||||||||||||
Amount | Amortization | Amount | Carrying | Amortization | Amount | |||||||||||||||
Amount | ||||||||||||||||||||
Contract and program intangibles | $ | 121,340 | $ | (73,234 | ) | $ | 48,106 | $ | 97,424 | $ | (54,712 | ) | $ | 42,712 | ||||||
Other purchased intangibles | 27,362 | (11,850 | ) | 15,512 | 22,915 | (8,085 | ) | 14,830 | ||||||||||||
Total | $ | 148,702 | $ | (85,084 | ) | $ | 63,618 | $ | 120,339 | $ | (62,797 | ) | $ | 57,542 | ||||||
Schedule of expected amortization of purchased intangibles for each of the next five years | ' | |||||||||||||||||||
The table below shows our expected amortization of purchased intangibles as of September 30, 2014, for each of the next five years and thereafter (in thousands): | ||||||||||||||||||||
Transportation | Defense | Mission | Total | |||||||||||||||||
Systems | Systems | Support | ||||||||||||||||||
Services | ||||||||||||||||||||
2015 | $ | 8,886 | $ | 2,129 | $ | 7,690 | $ | 18,705 | ||||||||||||
2016 | 7,686 | 1,503 | 4,714 | 13,903 | ||||||||||||||||
2017 | 6,566 | 841 | 2,452 | 9,859 | ||||||||||||||||
2018 | 5,442 | 522 | 1,775 | 7,739 | ||||||||||||||||
2019 | 3,048 | 249 | 1,184 | 4,481 | ||||||||||||||||
Thereafter | 3,750 | 53 | 5,128 | 8,931 | ||||||||||||||||
$ | 35,378 | $ | 5,297 | $ | 22,943 | $ | 63,618 | |||||||||||||
FINANCING_ARRANGEMENTS_Tables
FINANCING ARRANGEMENTS (Tables) | 12 Months Ended | |||||||
Sep. 30, 2014 | ||||||||
FINANCING ARRANGEMENTS | ' | |||||||
Schedule of long-term debt | ' | |||||||
Long-term debt consists of the following (in thousands): | ||||||||
September 30, | 2014 | 2013 | ||||||
Series A senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35% | $ | 50,000 | $ | 50,000 | ||||
Series B senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35% | 50,000 | 50,000 | ||||||
Mortgage note from a U.K. financial institution, with quarterly installments of principal and interest at 6.48% | 2,390 | 2,920 | ||||||
102,390 | 102,920 | |||||||
Less current portion | (563 | ) | (557 | ) | ||||
$ | 101,827 | $ | 102,363 | |||||
COMMITMENTS_Tables
COMMITMENTS (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
COMMITMENTS | ' | ||||
Summary of future minimum payments, net of minimum sublease income, under noncancelable operating leases | ' | ||||
Future minimum payments, net of minimum sublease income, under non-cancelable operating leases with initial terms of one year or more consist of the following for the next five years and thereafter, as of September 30, 2014 (in thousands): | |||||
2015 | $ | 10,592 | |||
2016 | 8,074 | ||||
2017 | 5,897 | ||||
2018 | 4,232 | ||||
2019 | 2,499 | ||||
Thereafter | 3,191 | ||||
$ | 34,485 | ||||
INCOME_TAXES_Tables
INCOME TAXES (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
INCOME TAXES | ' | ||||||||||
Components of income (loss) before income taxes | ' | ||||||||||
Income (loss) before income taxes includes the following components (in thousands): | |||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
(in thousands) | |||||||||||
United States | $ | (22,788 | ) | $ | (31,640 | ) | $ | 38,692 | |||
Foreign | 112,199 | 71,411 | 99,271 | ||||||||
Total | $ | 89,411 | $ | 39,771 | $ | 137,963 | |||||
Significant components of the provision for income taxes | ' | ||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
(in thousands) | |||||||||||
Current: | |||||||||||
Federal | $ | (8,049 | ) | $ | 8,198 | $ | 15,448 | ||||
State | 918 | 2,437 | 1,927 | ||||||||
Foreign | 25,705 | 18,581 | 21,005 | ||||||||
Total current | 18,574 | 29,216 | 38,380 | ||||||||
Deferred: | |||||||||||
Federal | 1,296 | (14,182 | ) | 331 | |||||||
State | (1,232 | ) | (2,720 | ) | 328 | ||||||
Foreign | 1,193 | 2,188 | 1,293 | ||||||||
Total deferred | 1,257 | (14,714 | ) | 1,952 | |||||||
Provision for income taxes | $ | 19,831 | $ | 14,502 | $ | 40,332 | |||||
Reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense | ' | ||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
(in thousands) | |||||||||||
Tax expense at U.S. statutory rate | $ | 31,290 | $ | 13,921 | $ | 48,287 | |||||
State income taxes, net of federal tax effect | 111 | 120 | 1,364 | ||||||||
Nondeductible expenses | 1,319 | 1,609 | 286 | ||||||||
Change in reserve for tax contingencies | (601 | ) | (673 | ) | (2,752 | ) | |||||
Impact of goodwill impairment loss | — | 10,046 | — | ||||||||
Change in deferred tax asset valuation allowance | 921 | 4,044 | — | ||||||||
Tax effect from foreign earnings repatriation | — | — | 2,773 | ||||||||
Foreign earnings taxed at less than statutory rate | (12,783 | ) | (7,521 | ) | (7,847 | ) | |||||
R&D credits generated in the current year | (584 | ) | (3,202 | ) | (906 | ) | |||||
Reinstatement of federal research and development credit | — | (1,937 | ) | — | |||||||
Manufacturing deduction | — | (1,333 | ) | (630 | ) | ||||||
Other | 158 | (572 | ) | (243 | ) | ||||||
Provision for income taxes | $ | 19,831 | $ | 14,502 | $ | 40,332 | |||||
Significant components of deferred tax assets and liabilities | ' | ||||||||||
September 30, | 2014 | 2013 | |||||||||
(in thousands) | |||||||||||
Deferred tax assets: | |||||||||||
Accrued employee benefits | $ | 13,944 | $ | 11,642 | |||||||
Long-term contracts and inventory valuation reductions | 9,554 | 14,152 | |||||||||
Allowances for loss contingencies | 5,121 | 5,441 | |||||||||
Deferred compensation | 4,310 | 4,346 | |||||||||
Property, plant and equipment | 1,507 | 1,127 | |||||||||
Intangible assets | 2,324 | 477 | |||||||||
Retirement benefits | 4,729 | 5,678 | |||||||||
State research and development credit carryforward | 7,285 | 4,839 | |||||||||
Net operating losses carryforwards | 15,662 | 18,639 | |||||||||
Other | 585 | 2,048 | |||||||||
Total gross deferred tax assets | 65,021 | 68,389 | |||||||||
Deferred tax asset valuation allowance | (14,024 | ) | (8,801 | ) | |||||||
Total deferred tax assets | 50,997 | 59,588 | |||||||||
Deferred tax liabilities: | |||||||||||
Deferred revenue | (22,507 | ) | (28,865 | ) | |||||||
State taxes | (6 | ) | (995 | ) | |||||||
Other | (1,937 | ) | (2,052 | ) | |||||||
Total deferred tax liabilities | (24,450 | ) | (31,912 | ) | |||||||
Net deferred tax asset | $ | 26,547 | $ | 27,676 | |||||||
Net changes in the liability for unrecognized tax benefits | ' | ||||||||||
Years ended September 30, | 2014 | 2013 | |||||||||
(in thousands) | |||||||||||
Balance at October 1 | $ | 8,441 | $ | 9,833 | |||||||
Increase (decrease) related to tax positions in prior years: | |||||||||||
Recognition of benefits from expiration of statutes | (973 | ) | (575 | ) | |||||||
Settlements with taxing authorities | (728 | ) | (2,332 | ) | |||||||
Other | (54 | ) | 824 | ||||||||
Tax positions related to the current year | 743 | 731 | |||||||||
Currency translation adjustment | (123 | ) | (40 | ) | |||||||
Balance at September 30 | $ | 7,306 | $ | 8,441 | |||||||
DERIVATIVE_INSTRUMENTS_AND_HED1
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Tables) | 12 Months Ended | |||||||||||||
Sep. 30, 2014 | ||||||||||||||
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES | ' | |||||||||||||
Schedule of notional principal amounts of the outstanding derivative instruments | ' | |||||||||||||
The following table shows the notional principal amounts of our outstanding derivative instruments as of September 30, 2014 and 2013 (in thousands): | ||||||||||||||
Notional Principal | ||||||||||||||
September 30, | 2014 | 2013 | ||||||||||||
Instruments designated as accounting hedges: | ||||||||||||||
Foreign currency forwards | $ | 249,628 | $ | 231,051 | ||||||||||
Forward starting swap | — | 58,415 | ||||||||||||
Instruments not designated as accounting hedges: | ||||||||||||||
Foreign currency forwards | $ | 136,955 | $ | 130,687 | ||||||||||
Schedule of fair value of derivative financial instruments | ' | |||||||||||||
The table below presents the fair value of the Company’s derivative financial instruments that qualify for hedge accounting as well as their classification on the consolidated balance sheets as of September 30, 2014 and 2013 (in thousands): | ||||||||||||||
Fair Value | ||||||||||||||
September 30, | ||||||||||||||
Balance Sheet Location | 2014 | 2013 | ||||||||||||
Asset derivatives: | ||||||||||||||
Foreign currency forwards | Other current assets | $ | 7,389 | $ | 1,597 | |||||||||
Foreign currency forwards | Other noncurrent assets | 5,920 | 4,957 | |||||||||||
Forward starting swap | Other noncurrent assets | — | 1,139 | |||||||||||
$ | 13,309 | $ | 7,693 | |||||||||||
Liability derivatives: | ||||||||||||||
Foreign currency forwards | Other current liabilities | $ | 6,645 | $ | 2,360 | |||||||||
Foreign currency forwards | Other noncurrent liabilities | 5,878 | 5,366 | |||||||||||
Total | $ | 12,523 | $ | 7,726 | ||||||||||
Schedule of gains and losses recognized in other comprehensive income (OCI) on derivative financial instruments designated as cash flow hedges | ' | |||||||||||||
The tables below present gains and losses recognized in OCI for the years ended September 30, 2014, 2013, and 2012 related to derivative financial instruments designated as cash flow hedges, as well as the amount of gains and losses reclassified into earnings during those periods (in thousands): | ||||||||||||||
Years ended September 30, | 2014 | 2013 | ||||||||||||
Derivative Type | Gains (losses) | Gains (losses) | Gains (losses) | Gains (losses) | ||||||||||
recognized in OCI | reclassified into | recognized in | reclassified into | |||||||||||
earnings - | OCI | earnings - Effective | ||||||||||||
Effective Portion | Portion | |||||||||||||
Foreign currency forwards | $ | 820 | $ | 330 | $ | 4,581 | $ | (1,231 | ) | |||||
Forward starting swap | — | — | 1,230 | — | ||||||||||
$ | 820 | $ | 330 | $ | 5,811 | $ | (1,231 | ) | ||||||
PENSION_PROFIT_SHARING_AND_OTH1
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS (Tables) | 12 Months Ended | |||||||||||||||||||||||||
Sep. 30, 2014 | ||||||||||||||||||||||||||
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS | ' | |||||||||||||||||||||||||
Schedule of projected benefit obligation, ABO and fair value of plan assets for the defined benefit pension plans in which the ABO was in excess of the fair value of plan assets | ' | |||||||||||||||||||||||||
The projected benefit obligation, accumulated benefit obligation (ABO) and fair value of plan assets for the defined benefit pension plans in which the ABO was in excess of the fair value of plan assets were as follows (in thousands): | ||||||||||||||||||||||||||
September 30, | 2014 | 2013 | ||||||||||||||||||||||||
Projected benefit obligation | $ | 224,201 | $ | 209,118 | ||||||||||||||||||||||
Accumulated benefit obligation | 224,201 | 202,916 | ||||||||||||||||||||||||
Fair value of plan assets | 206,982 | 188,337 | ||||||||||||||||||||||||
Schedule of changes in the projected benefit obligation and fair value of plan assets and the funded status | ' | |||||||||||||||||||||||||
The following table sets forth changes in the projected benefit obligation and fair value of plan assets and the funded status for these defined benefit plans (in thousands): | ||||||||||||||||||||||||||
September 30, | 2014 | 2013 | ||||||||||||||||||||||||
Change in benefit obligations: | ||||||||||||||||||||||||||
Net benefit obligation at the beginning of the year | $ | 209,118 | $ | 215,706 | ||||||||||||||||||||||
Service cost | 636 | 532 | ||||||||||||||||||||||||
Interest cost | 9,967 | 8,867 | ||||||||||||||||||||||||
Actuarial loss (gain) | 10,730 | (5,726 | ) | |||||||||||||||||||||||
Plan amendments | (1,044 | ) | (1,178 | ) | ||||||||||||||||||||||
Gross benefits paid | (6,229 | ) | (8,576 | ) | ||||||||||||||||||||||
Foreign currency exchange rate changes | 1,023 | (507 | ) | |||||||||||||||||||||||
Net benefit obligation at the end of the year | 224,201 | 209,118 | ||||||||||||||||||||||||
Change in plan assets: | ||||||||||||||||||||||||||
Fair value of plan assets at the beginning of the year | 188,337 | 169,323 | ||||||||||||||||||||||||
Actual return on plan assets | 21,127 | 24,707 | ||||||||||||||||||||||||
Employer contributions | 3,728 | 3,915 | ||||||||||||||||||||||||
Gross benefits paid | (6,229 | ) | (8,576 | ) | ||||||||||||||||||||||
Administrative expenses | (730 | ) | (843 | ) | ||||||||||||||||||||||
Foreign currency exchange rate changes | 749 | (189 | ) | |||||||||||||||||||||||
Fair value of plan assets at the end of the year | 206,982 | 188,337 | ||||||||||||||||||||||||
Unfunded status of the plans | (17,219 | ) | (20,781 | ) | ||||||||||||||||||||||
Unrecognized net actuarial loss | 33,376 | 31,657 | ||||||||||||||||||||||||
Net amount recognized | $ | 16,157 | $ | 10,876 | ||||||||||||||||||||||
Amounts recognized in Accumulated OCI | ||||||||||||||||||||||||||
Liability adjustment to OCI | $ | (33,376 | ) | $ | (31,657 | ) | ||||||||||||||||||||
Deferred tax asset | 9,925 | 9,291 | ||||||||||||||||||||||||
Accumulated other comprehensive loss | $ | (23,451 | ) | $ | (22,366 | ) | ||||||||||||||||||||
Components of net periodic pension cost (benefit) | ' | |||||||||||||||||||||||||
The components of net periodic pension cost (benefit) were as follows (in thousands): | ||||||||||||||||||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | |||||||||||||||||||||||
Service cost | $ | 636 | $ | 532 | $ | 508 | ||||||||||||||||||||
Interest cost | 9,967 | 8,867 | 9,565 | |||||||||||||||||||||||
Expected return on plan assets | (13,183 | ) | (11,605 | ) | (10,091 | ) | ||||||||||||||||||||
Amortization of actuarial loss | 802 | 1,798 | 1,593 | |||||||||||||||||||||||
Administrative expenses | 152 | 76 | 82 | |||||||||||||||||||||||
Net pension cost | $ | (1,626 | ) | $ | (332 | ) | $ | 1,657 | ||||||||||||||||||
Schedule of weighted-average assumptions used to determine benefit obligation and net periodic benefit cost | ' | |||||||||||||||||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | |||||||||||||||||||||||
Weighted-average assumptions used to determine benefit obligation at September 30: | ||||||||||||||||||||||||||
Discount rate | 4.2 | % | 4.8 | % | 4.3 | % | ||||||||||||||||||||
Rate of compensation increase | 3.2 | % | 4.4 | % | 3.8 | % | ||||||||||||||||||||
Weighted-average assumptions used to determine net periodic benefit cost for the years ended September 30: | ||||||||||||||||||||||||||
Discount rate | 4.8 | % | 4.3 | % | 5.2 | % | ||||||||||||||||||||
Expected return on plan assets | 7.0 | % | 7.0 | % | 7.0 | % | ||||||||||||||||||||
Rate of compensation increase | 4.4 | % | 3.8 | % | 4.3 | % | ||||||||||||||||||||
Schedule of target ranges for each major category of the plans' assets | ' | |||||||||||||||||||||||||
The target ranges for each major category of the plans’ assets at September 30, 2014 are as follows: | ||||||||||||||||||||||||||
Asset Category | Allocation | |||||||||||||||||||||||||
Range | ||||||||||||||||||||||||||
Equity securities | 20% to 55% | |||||||||||||||||||||||||
Debt securities | 25% to 75% | |||||||||||||||||||||||||
Cash | 0% to 55% | |||||||||||||||||||||||||
Real estate | 0% to 10% | |||||||||||||||||||||||||
Schedule of fair value of the assets of defined benefit pension plans by asset category and their level within the fair value hierarchy | ' | |||||||||||||||||||||||||
The following tables present the fair value of the assets of our defined benefit pension plans by asset category and their level within the fair value hierarchy (in thousands). | ||||||||||||||||||||||||||
September 30, 2014 | September 30, 2013 | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||
Cash equivalents | $ | 1,863 | $ | 407 | $ | — | $ | 2,270 | $ | 2,361 | $ | 475 | $ | — | $ | 2,836 | ||||||||||
Equity: | ||||||||||||||||||||||||||
U.S. equity securities | — | 43,351 | — | 43,351 | — | 54,870 | — | 54,870 | ||||||||||||||||||
Foreign equity securities | — | 47,110 | — | 47,110 | — | 47,569 | — | 47,569 | ||||||||||||||||||
Fixed Income: | ||||||||||||||||||||||||||
U.S. fixed-income funds | — | 49,479 | — | 49,479 | — | 33,849 | — | 33,849 | ||||||||||||||||||
U.K. fixed-income funds | — | 25,813 | — | 25,813 | — | 12,804 | — | 12,804 | ||||||||||||||||||
Diversified growth fund | — | 31,863 | 31,863 | — | 30,146 | 30,146 | ||||||||||||||||||||
Real Estate | — | — | 7,096 | 7,096 | — | — | 6,263 | 6,263 | ||||||||||||||||||
Total | $ | 1,863 | $ | 198,023 | $ | 7,096 | $ | 206,982 | $ | 2,361 | $ | 179,713 | $ | 6,263 | $ | 188,337 | ||||||||||
Schedule of changes during the fiscal year in the fair value of plan assets categorized as Level 3 | ' | |||||||||||||||||||||||||
The following table presents the changes in the fair value of plan assets categorized as Level 3 in the preceding table (in thousands): | ||||||||||||||||||||||||||
Real Estate | ||||||||||||||||||||||||||
Balance as of October 1, 2012 | $ | 5,614 | ||||||||||||||||||||||||
Realized and unrealized gains, net | 712 | |||||||||||||||||||||||||
Purchases, sales and settlements, net | (63 | ) | ||||||||||||||||||||||||
Balance as of September 30, 2013 | 6,263 | |||||||||||||||||||||||||
Realized and unrealized gains, net | 898 | |||||||||||||||||||||||||
Purchases, sales and settlements, net | (65 | ) | ||||||||||||||||||||||||
Balance as of September 30, 2014 | $ | 7,096 | ||||||||||||||||||||||||
Schedule of expected pension benefit payments, which reflect expected future service | ' | |||||||||||||||||||||||||
We expect to pay the following pension benefit payments, which reflect expected future service, as appropriate, (in thousands): | ||||||||||||||||||||||||||
2015 | $ | 7,784 | ||||||||||||||||||||||||
2016 | 8,208 | |||||||||||||||||||||||||
2017 | 8,482 | |||||||||||||||||||||||||
2018 | 9,043 | |||||||||||||||||||||||||
2019 | 9,590 | |||||||||||||||||||||||||
2020-2024 | 52,964 | |||||||||||||||||||||||||
STOCKHOLDERS_EQUITY_Tables
STOCKHOLDERS' EQUITY (Tables) | 12 Months Ended | ||||||
Sep. 30, 2014 | |||||||
STOCKHOLDERS' EQUITY | ' | ||||||
Summary of RSU activity | ' | ||||||
Unvested Restricted Stock Units | |||||||
Number of Shares | Weighted-Average | ||||||
Grant-Date Fair | |||||||
Value | |||||||
Unvested at October 1, 2012 | — | $ | — | ||||
Granted | 426,511 | 43.76 | |||||
Vested | — | — | |||||
Forfeited | (5,142 | ) | 43.76 | ||||
Unvested at September 30, 2013 | 421,369 | $ | 43.76 | ||||
Granted | 305,074 | 49.57 | |||||
Vested | (69,994 | ) | 43.76 | ||||
Forfeited | (13,500 | ) | 47.8 | ||||
Unvested at September 30, 2014 | 642,949 | $ | 46.43 | ||||
STOCK_BASED_COMPENSATION_Table
STOCK BASED COMPENSATION (Tables) | 12 Months Ended | ||||
Sep. 30, 2014 | |||||
STOCK BASED COMPENSATION | ' | ||||
Schedule of stock-based compensation expense related to stock-based awards | ' | ||||
We recorded non-cash compensation expense related to stock-based awards of $5.6 million for the year ended September 30, 2014, which was comprised of the following (in thousands): | |||||
Cost of sales | $ | 566 | |||
Selling, general and administrative | 5,059 | ||||
$ | 5,625 | ||||
BUSINESS_SEGMENT_INFORMATION_T
BUSINESS SEGMENT INFORMATION (Tables) | 12 Months Ended | ||||||||||
Sep. 30, 2014 | |||||||||||
BUSINESS SEGMENT INFORMATION | ' | ||||||||||
Schedule of business segment financial data | ' | ||||||||||
Business segment financial data is as follows (in millions): | |||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
Sales: | |||||||||||
Transportation Systems | $ | 599.7 | $ | 529.5 | $ | 522.2 | |||||
Mission Support Services | 398.1 | 468.7 | 491.4 | ||||||||
Defense Systems | 400.6 | 363 | 389.4 | ||||||||
Other | — | 0.2 | 1.1 | ||||||||
Total sales | $ | 1,398.40 | $ | 1,361.40 | $ | 1,404.10 | |||||
Operating income (loss): | |||||||||||
Transportation Systems | $ | 65.9 | $ | 66.8 | $ | 84.6 | |||||
Mission Support Services | 7.8 | (36.1 | ) | 21.1 | |||||||
Defense Systems | 26.8 | 14.2 | 35.3 | ||||||||
Unallocated corporate expenses and other | (8.0 | ) | (4.2 | ) | (4.8 | ) | |||||
Total operating income | $ | 92.5 | $ | 40.7 | $ | 136.2 | |||||
Assets: | |||||||||||
Transportation Systems | $ | 422.2 | $ | 369.8 | $ | 268.4 | |||||
Mission Support Services | 195.8 | 205.2 | 212.8 | ||||||||
Defense Systems | 252.4 | 228.9 | 211.2 | ||||||||
Corporate and other | 324.2 | 304.5 | 322.2 | ||||||||
Total assets | $ | 1,194.60 | $ | 1,108.40 | $ | 1,014.60 | |||||
Depreciation and amortization: | |||||||||||
Transportation Systems | $ | 11.5 | $ | 5 | $ | 3.7 | |||||
Mission Support Services | 10.7 | 13 | 12.5 | ||||||||
Defense Systems | 7.4 | 6.1 | 5.5 | ||||||||
Corporate and other | 0.8 | 1.3 | 1.2 | ||||||||
Total depreciation and amortization | $ | 30.4 | $ | 25.4 | $ | 22.9 | |||||
Capital expenditures: | |||||||||||
Transportation Systems | $ | 1.8 | $ | 2.8 | $ | 2.7 | |||||
Mission Support Services | — | 0.3 | 1.1 | ||||||||
Defense Systems | 13.2 | 4.6 | 8.9 | ||||||||
Corporate and other | 1.6 | 1.4 | 1.5 | ||||||||
Total expenditures for long-lived assets | $ | 16.6 | $ | 9.1 | $ | 14.2 | |||||
Schedule of sales by geographic area | ' | ||||||||||
Years ended September 30, | 2014 | 2013 | 2012 | ||||||||
Geographic Information: | |||||||||||
Sales (a): | |||||||||||
United States | $ | 749.9 | $ | 741.7 | $ | 742.2 | |||||
United Kingdom | 294.4 | 267.4 | 283.2 | ||||||||
Canada | 9.0 | 30.4 | 54.8 | ||||||||
Australia | 161.9 | 148.5 | 181.9 | ||||||||
Middle East | 42.0 | 35.4 | 38.0 | ||||||||
Far East | 76.6 | 78.2 | 56.9 | ||||||||
Other | 64.6 | 59.8 | 47.1 | ||||||||
Total sales | $ | 1,398.4 | $ | 1,361.4 | $ | 1,404.1 | |||||
(a) Sales are attributed to countries or regions based on the location of customers. | |||||||||||
Schedule of long-lived assets by country | ' | ||||||||||
Long-lived assets, net: | |||||||||||
United States | $ | 49.8 | $ | 43.9 | $ | 42.4 | |||||
United Kingdom | 9.3 | 9.2 | 9.5 | ||||||||
Other foreign countries | 6.3 | 6.6 | 6.1 | ||||||||
Total long-lived assets, net | $ | 65.4 | $ | 59.7 | $ | 58.0 | |||||
Summary of the activity relating to the restructuring liability and employee separation expenses | ' | ||||||||||
A summary of the activity relating to the restructuring liability and employee separation expenses, which is included within accrued compensation and other current liabilities within our Consolidated Balance Sheet, is as follows (in thousands): | |||||||||||
Liability as of September 30, 2012 | $ | — | |||||||||
Accrued costs | 8,139 | ||||||||||
Cash payments | (5,919 | ) | |||||||||
Liability as of September 30, 2013 | $ | 2,220 | |||||||||
Accrued costs | 1,094 | ||||||||||
Cash payments | (2,538 | ) | |||||||||
Liability as of September 30, 2014 | $ | 776 | |||||||||
SUMMARY_OF_QUARTERLY_RESULTS_O1
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | ' | ||||||||||||||||
Summary of quarterly results of operations | ' | ||||||||||||||||
Year | |||||||||||||||||
Three Months Ended | Ended | ||||||||||||||||
Fiscal 2014 | September 30 | June 30 | March 31 | December 31 | September 30 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Net sales | $ | 396,366 | $ | 340,357 | $ | 354,492 | $ | 307,137 | $ | 1,398,352 | |||||||
Operating income | 39,268 | 19,215 | 22,177 | 11,830 | 92,490 | ||||||||||||
Net income attributable to Cubic | 32,805 | 12,206 | 16,092 | 8,388 | 69,491 | ||||||||||||
Net income per share, basic | 1.22 | 0.46 | 0.60 | 0.31 | 2.59 | ||||||||||||
Net income per share, diluted | 1.22 | 0.45 | 0.60 | 0.31 | 2.59 | ||||||||||||
Year | |||||||||||||||||
Three Months Ended | Ended | ||||||||||||||||
Fiscal 2013 | September 30 | June 30 | March 31 | December 31 | September 30 | ||||||||||||
(in thousands, except per share data) | |||||||||||||||||
Net sales | $ | 340,776 | $ | 337,226 | $ | 368,609 | $ | 314,796 | $ | 1,361,407 | |||||||
Operating income (loss) | (44,055 | ) | 26,905 | 37,376 | 20,509 | 40,735 | |||||||||||
Net income (loss) attributable to Cubic | (37,186 | ) | 18,381 | 29,650 | 14,241 | 25,086 | |||||||||||
Net income (loss) per share, basic | (1.39 | ) | 0.69 | 1.11 | 0.53 | 0.94 | |||||||||||
Net income (loss) per share, diluted | (1.39 | ) | 0.69 | 1.11 | 0.53 | 0.94 | |||||||||||
SUMMARY_OF_SIGNIFICANT_ACCOUNT3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' |
Total transaction gains (losses) related primarily to advances to foreign subsidiaries | ($1.30) | ($0.80) | $0.70 |
Accounts Receivable | ' | ' | ' |
Allowance for doubtful accounts | $0 | ' | ' |
Transaction Systems Limited (TranSys) | ' | ' | ' |
Investment in variable interest entity | ' | ' | ' |
Percentage of common stock owned by the entity | 50.00% | ' | ' |
SUMMARY_OF_SIGNIFICANT_ACCOUNT4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
item | |||||||||||
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income (loss) attributable to Cubic | $32,805 | $12,206 | $16,092 | $8,388 | ($37,186) | $18,381 | $29,650 | $14,241 | $69,491 | $25,086 | $97,427 |
Average number of common shares outstanding | ' | ' | ' | ' | ' | ' | ' | ' | 26,787 | 26,736 | 26,736 |
Effect of dilutive securities (in shares) | ' | ' | ' | ' | ' | ' | ' | ' | 58 | 24 | ' |
Weighted average shares - diluted | ' | ' | ' | ' | ' | ' | ' | ' | 26,845 | 26,760 | 26,736 |
Basic (in dollars per share) | $1.22 | $0.46 | $0.60 | $0.31 | ($1.39) | $0.69 | $1.11 | $0.53 | $2.59 | $0.94 | $3.64 |
Diluted (in dollars per share) | $1.22 | $0.45 | $0.60 | $0.31 | ($1.39) | $0.69 | $1.11 | $0.53 | $2.59 | $0.94 | $3.64 |
Revenue Recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of estimates, a change in which could have material effect on financial position or results of operations | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
Allocation of arrangement consideration to the up-front deliverables | ' | ' | ' | ' | ' | ' | ' | ' | 0 | ' | ' |
Revenue for the delivery of up-front units of accounting | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' |
Number of transportation systems service contracts, which contain annual system usage incentives | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' |
ACQUISITIONS_Details
ACQUISITIONS (Details) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | 19 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | |||||||||||||||||||||||||||||||||||||||||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2014 | Feb. 28, 2014 | Feb. 28, 2013 | Feb. 28, 2014 | Feb. 28, 2014 | Feb. 28, 2014 | 31-May-14 | Nov. 30, 2013 | Sep. 30, 2014 | Nov. 26, 2013 | Nov. 26, 2013 | Nov. 26, 2013 | Nov. 26, 2013 | Nov. 26, 2013 | Nov. 26, 2013 | Dec. 14, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Jun. 30, 2014 | Dec. 14, 2012 | Dec. 14, 2012 | Dec. 14, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Jan. 24, 2013 | Jan. 24, 2013 | Jan. 24, 2013 | Jan. 24, 2013 | Jan. 24, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jul. 02, 2013 | Jul. 02, 2013 | Jul. 02, 2013 | Jul. 02, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Jul. 02, 2013 | Jul. 02, 2013 | Jul. 02, 2013 | |
Intific Inc. | Intific Inc. | Intific Inc. | Intific Inc. | Intific Inc. | Intific Inc. | ITMS | ITMS | ITMS | ITMS | ITMS | ITMS | ITMS | ITMS | ITMS | NEK Special Programs Group LLC (NEK) | NEK Special Programs Group LLC (NEK) | NEK Special Programs Group LLC (NEK) | NEK Special Programs Group LLC (NEK) | NEK Special Programs Group LLC (NEK) | NEK Special Programs Group LLC (NEK) | NEK Special Programs Group LLC (NEK) | NextBus, Inc. | NextBus, Inc. | NextBus, Inc. | NextBus, Inc. | NextBus, Inc. | NextBus, Inc. | NextBus, Inc. | AIS | AIS | AIS | AIS | AIS | AIS | PSMC | PSMC | PSMC | PSMC | PSMC | ||||||||||||
Customer relationships | Technology | Backlog | Customer relationships | Intellectual property | Backlog | Supplier relationships | Agreements with Seller | Customer relationships | Corporate trade names | Non-compete agreements | Customer relationships | Corporate trade names | Technology | Backlog | Customer relationships | Technology | Backlog | Customer relationships | Backlog | ||||||||||||||||||||||||||||||||
Acquisitions | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | $396,366,000 | $340,357,000 | $354,492,000 | $307,137,000 | $340,776,000 | $337,226,000 | $368,609,000 | $314,796,000 | $1,398,352,000 | $1,361,407,000 | $1,404,084,000 | $5,300,000 | ' | ' | ' | ' | ' | ' | ' | $43,700,000 | ' | ' | ' | ' | ' | ' | ' | $45,000,000 | $31,600,000 | ' | ' | ' | ' | $10,100,000 | $7,800,000 | ' | ' | ' | ' | ' | $8,800,000 | $2,000,000 | ' | ' | ' | ' | $3,800,000 | $1,700,000 | ' | ' | ' |
Net income (loss) after taxes | ' | ' | ' | ' | ' | ' | ' | ' | 69,580,000 | 25,269,000 | 97,631,000 | -4,200,000 | ' | ' | ' | ' | ' | ' | ' | -2,300,000 | ' | ' | ' | ' | ' | ' | ' | 600,000 | -500,000 | ' | ' | ' | ' | 600,000 | 400,000 | ' | ' | ' | ' | ' | 800,000 | 100,000 | ' | ' | ' | ' | 100,000 | 100,000 | ' | ' | ' |
Transaction and acquisition related costs | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | ' | 600,000 | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Compensation expense paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cost of acquisition net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 52,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of consideration transferred | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,400,000 | ' | ' | ' | ' | ' | ' | ' | 72,200,000 | ' | ' | ' | ' | ' | ' | 52,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash consideration paid | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 11,200,000 | ' | ' | ' | ' | ' | 3,200,000 | 69,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 7,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated current liability of additional cash consideration | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase potential customer claims liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Purchase price allocation | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amortizable intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,000,000 | 700,000 | 700,000 | ' | ' | 19,500,000 | ' | 15,700,000 | 1,600,000 | 5,700,000 | 600,000 | 1,300,000 | ' | ' | ' | ' | 13,300,000 | 4,900,000 | 200,000 | ' | ' | ' | 8,800,000 | 1,000,000 | 1,300,000 | 1,700,000 | ' | ' | ' | 1,400,000 | 900,000 | 600,000 | ' | ' | ' | 600,000 | 100,000 |
Other intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable - billed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 4,400,000 | ' | ' | ' | ' | ' | 3,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable - unbilled | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 6,900,000 | ' | ' | ' | ' | ' | 7,700,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts receivable, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | -200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 2,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Accounts payable and accrued expenses | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -600,000 | ' | ' | ' | ' | ' | ' | ' | -4,600,000 | ' | ' | ' | ' | ' | -3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | -1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred tax liabilities, net | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -3,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Deferred revenue | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other net liabilities assumed | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -400,000 | ' | ' | ' | ' | ' | ' | ' | ' | -1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Other net assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | 2,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | -2,800,000 | ' | ' | ' | ' | ' | ' | ' | ' |
Net identifiable assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 5,000,000 | ' | ' | ' | ' | ' | ' | ' | 31,400,000 | ' | ' | ' | ' | ' | 25,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | 9,400,000 | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | 700,000 | ' | ' |
Goodwill | 184,141,000 | ' | ' | ' | 136,094,000 | ' | ' | ' | 184,141,000 | 136,094,000 | 146,933,000 | ' | 7,400,000 | ' | ' | ' | ' | ' | ' | ' | 40,800,000 | ' | ' | ' | ' | ' | 26,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | 10,800,000 | ' | ' | ' | ' | ' | ' | 1,900,000 | ' | ' | ' | ' | ' | 600,000 | ' | ' |
Net assets acquired | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 12,400,000 | ' | ' | ' | ' | ' | ' | ' | 72,200,000 | ' | ' | ' | ' | ' | 52,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | 20,200,000 | ' | ' | ' | ' | ' | ' | 2,000,000 | ' | ' | ' | ' | ' | 1,300,000 | ' | ' |
Weighted average useful life of intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | '2 years | ' | ' | ' | ' | ' | ' | ' | '4 years | ' | ' | ' | ' | ' | '5 years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated amortization expense related to the intangible assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 18,705,000 | ' | ' | ' | ' | ' | ' | ' | 18,705,000 | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | 5,900,000 | ' | ' | ' | ' | ' | ' | ' | 2,900,000 | ' | ' | ' | ' | ' | 1,500,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 13,903,000 | ' | ' | ' | ' | ' | ' | ' | 13,903,000 | ' | ' | 700,000 | ' | ' | ' | ' | ' | ' | ' | 4,900,000 | ' | ' | ' | ' | ' | ' | ' | 2,400,000 | ' | ' | ' | ' | ' | 1,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 9,859,000 | ' | ' | ' | ' | ' | ' | ' | 9,859,000 | ' | ' | 600,000 | ' | ' | ' | ' | ' | ' | ' | 3,900,000 | ' | ' | ' | ' | ' | ' | ' | 1,900,000 | ' | ' | ' | ' | ' | 1,300,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 7,739,000 | ' | ' | ' | ' | ' | ' | ' | 7,739,000 | ' | ' | 500,000 | ' | ' | ' | ' | ' | ' | ' | 2,900,000 | ' | ' | ' | ' | ' | ' | ' | 1,400,000 | ' | ' | ' | ' | ' | 1,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019 | 4,481,000 | ' | ' | ' | ' | ' | ' | ' | 4,481,000 | ' | ' | 200,000 | ' | ' | ' | ' | ' | ' | ' | 900,000 | ' | ' | ' | ' | ' | ' | ' | 800,000 | ' | ' | ' | ' | ' | 1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Thereafter | 8,931,000 | ' | ' | ' | ' | ' | ' | ' | 8,931,000 | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | 100,000 | ' | ' | ' | ' | ' | ' | ' | 2,800,000 | ' | ' | ' | ' | ' | 3,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Unaudited pro forma information | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | ' | ' | ' | ' | ' | ' | ' | 1,411,000,000 | 1,460,600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net income attributable to Cubic | ' | ' | ' | ' | ' | ' | ' | ' | 69,200,000 | 31,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Adjustments made for transaction expenses | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
FAIR_VALUE_OF_FINANCIAL_INSTRU2
FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 14, 2012 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
NEK Special Programs Group LLC (NEK) | NEK Special Programs Group LLC (NEK) | Assets and liabilities measured at fair value | Assets and liabilities measured at fair value | Assets and liabilities measured at fair value | Assets and liabilities measured at fair value | Assets and liabilities measured at fair value | Assets and liabilities measured at fair value | Assets and liabilities measured at fair value | |||
Level 1 | Level 1 | Level 2 | Level 2 | Level 3 | Total | Total | |||||
Assets and liabilities measured at fair value on a recurring basis | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Estimated fair value of the liability for contingent consideration | ' | ' | ' | $3,500,000 | ' | ' | ' | ' | ' | ' | ' |
Change in fair value of contingent consideration since the date of the acquisition | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' |
Assets | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash equivalents | ' | ' | ' | ' | 56,333,000 | 125,512,000 | ' | ' | ' | 56,333,000 | 125,512,000 |
Marketable securities | ' | ' | ' | ' | 1,196,000 | 4,055,000 | ' | ' | ' | 1,196,000 | 4,055,000 |
Current derivative assets | ' | ' | ' | ' | ' | ' | 7,389,000 | 1,597,000 | ' | 7,389,000 | 1,597,000 |
Noncurrent derivative assets | ' | ' | ' | ' | ' | ' | 5,920,000 | 6,096,000 | ' | 5,920,000 | 6,096,000 |
Total assets measured at fair value | ' | ' | ' | ' | 57,529,000 | 129,567,000 | 13,309,000 | 7,693,000 | ' | 70,838,000 | 137,260,000 |
Liabilities | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Current derivative liabilities | ' | ' | ' | ' | ' | ' | 6,645,000 | 2,360,000 | ' | 6,645,000 | 2,360,000 |
Noncurrent derivative liabilities | ' | ' | ' | ' | ' | ' | 5,878,000 | 5,366,000 | ' | 5,878,000 | 5,366,000 |
Contingent consideration to Seller of NEK | ' | ' | ' | ' | ' | ' | ' | ' | 3,485,000 | ' | 3,485,000 |
Total liabilities measured at fair value | ' | ' | ' | ' | ' | ' | 12,523,000 | 7,726,000 | 3,485,000 | 12,523,000 | 11,211,000 |
Debt instruments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair Value | 99,600,000 | 95,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Carrying value | $102,390,000 | $102,920,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
ACCOUNTS_RECEIVABLE_Details
ACCOUNTS RECEIVABLE (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Components of accounts receivable under long-term contracts | ' | ' |
Total accounts receivable under long-term contracts | $379,945 | $381,329 |
Less estimated amounts not currently due | -15,870 | -19,021 |
Accounts receivable under long-term contracts, current | 364,075 | 362,308 |
U.S. government contracts | ' | ' |
Components of accounts receivable under long-term contracts | ' | ' |
Amounts billed | 41,588 | 51,529 |
Recoverable costs and accrued profits on progress completed--not billed | 66,657 | 60,435 |
Total accounts receivable under long-term contracts | 108,245 | 111,964 |
Commercial customers | ' | ' |
Components of accounts receivable under long-term contracts | ' | ' |
Amounts billed | 80,283 | 47,454 |
Recoverable costs and accrued profits on progress completed--not billed | 191,417 | 221,911 |
Total accounts receivable under long-term contracts | 271,700 | 269,365 |
Less estimated amounts not currently due | ($15,870) | ($19,021) |
INVENTORIES_Details
INVENTORIES (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
INVENTORIES | ' | ' |
Work in process and inventoried costs under long-term contracts | $58,440,000 | $80,918,000 |
Materials and purchased parts | 125,000 | 693,000 |
Customer advances | -19,790,000 | -21,865,000 |
Net inventories | 38,775,000 | 59,746,000 |
Costs incurred outside the scope of work or in advance of a contract award | 2,300,000 | 5,800,000 |
General and administrative amounts for certain government contracts remaining in inventory | $2,400,000 | $7,100,000 |
PROPERTY_PLANT_AND_EQUIPMENT_D
PROPERTY, PLANT AND EQUIPMENT (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Accumulated depreciation and amortization | ($108,936,000) | ($111,157,000) | ' |
Property, plant and equipment - net | 64,149,000 | 56,305,000 | ' |
Depreciation of plant and equipment and amortization of leasehold improvements | 7,800,000 | 8,700,000 | 8,000,000 |
Machinery and equipment and software | Minimum | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, useful life | '5 years | ' | ' |
Machinery and equipment and software | Maximum | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, useful life | '10 years | ' | ' |
Land and land improvements | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, Gross | 16,056,000 | 15,996,000 | ' |
Buildings and improvements | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, Gross | 49,347,000 | 45,854,000 | ' |
Machinery and other equipment | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, Gross | 90,781,000 | 95,216,000 | ' |
Leasehold improvements | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, Gross | 11,191,000 | 9,714,000 | ' |
Leasehold improvements | Minimum | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, useful life | '15 years | ' | ' |
Leasehold improvements | Maximum | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, useful life | '39 years | ' | ' |
Software Development | ' | ' | ' |
PROPERTY, PLANT AND EQUIPMENT | ' | ' | ' |
Property, plant and equipment, Gross | 5,710,000 | 682,000 | ' |
Accumulated depreciation and amortization | 400,000 | ' | ' |
Capitalized internal costs | $5,000,000 | $700,000 | ' |
GOODWILL_AND_PURCHASED_INTANGI2
GOODWILL AND PURCHASED INTANGIBLE ASSETS (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
item | ||||
Changes in the carrying amount of goodwill | ' | ' | ' | ' |
Balance at the beginning of the period | $184,141 | ' | $136,094 | $146,933 |
Acquisitions | ' | ' | 48,157 | 40,085 |
Impairment of goodwill | 0 | -50,900 | ' | -50,865 |
Foreign currency exchange rate changes | ' | ' | -110 | -59 |
Balance at the end of the period | 184,141 | 136,094 | 184,141 | 136,094 |
Number of remaining reporting units whose estimated fair values exceeded carrying values | 3 | ' | 3 | ' |
Transportation Systems | ' | ' | ' | ' |
Changes in the carrying amount of goodwill | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 18,301 | 7,517 |
Acquisitions | ' | ' | 40,792 | 10,837 |
Foreign currency exchange rate changes | ' | ' | 74 | -53 |
Balance at the end of the period | 59,167 | 18,301 | 59,167 | 18,301 |
Defense Systems | ' | ' | ' | ' |
Changes in the carrying amount of goodwill | ' | ' | ' | ' |
Balance at the beginning of the period | ' | ' | 23,443 | 20,983 |
Acquisitions | ' | ' | 7,365 | 2,466 |
Foreign currency exchange rate changes | ' | ' | -184 | -6 |
Balance at the end of the period | 30,624 | 23,443 | 30,624 | 23,443 |
Mission Support Services | ' | ' | ' | ' |
Changes in the carrying amount of goodwill | ' | ' | ' | ' |
Balance at the beginning of the period | 94,350 | ' | ' | 118,433 |
Acquisitions | ' | ' | ' | 26,782 |
Impairment of goodwill | ' | ' | ' | -50,865 |
Balance at the end of the period | $94,350 | $94,350 | $94,350 | $94,350 |
GOODWILL_AND_PURCHASED_INTANGI3
GOODWILL AND PURCHASED INTANGIBLE ASSETS (Details 2) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Purchased intangible assets | ' | ' | ' |
Amortization expense | $22,602 | $16,680 | $14,828 |
Amortized intangible assets, Gross Carrying Amount | 148,702 | 120,339 | ' |
Amortized intangible assets, Accumulated Amortization | -85,084 | -62,797 | ' |
Total intangible assets, Net Carrying Amount | 63,618 | 57,542 | ' |
Expected amortization for purchased intangibles for each of the next five years | ' | ' | ' |
2015 | 18,705 | ' | ' |
2016 | 13,903 | ' | ' |
2017 | 9,859 | ' | ' |
2018 | 7,739 | ' | ' |
2019 | 4,481 | ' | ' |
Thereafter | 8,931 | ' | ' |
Total expected amortization for purchased intangibles | 63,618 | ' | ' |
Contract and program intangibles | ' | ' | ' |
Purchased intangible assets | ' | ' | ' |
Amortized intangible assets, Gross Carrying Amount | 121,340 | 97,424 | ' |
Amortized intangible assets, Accumulated Amortization | -73,234 | -54,712 | ' |
Total intangible assets, Net Carrying Amount | 48,106 | 42,712 | ' |
Other purchased intangibles | ' | ' | ' |
Purchased intangible assets | ' | ' | ' |
Amortized intangible assets, Gross Carrying Amount | 27,362 | 22,915 | ' |
Amortized intangible assets, Accumulated Amortization | -11,850 | -8,085 | ' |
Total intangible assets, Net Carrying Amount | 15,512 | 14,830 | ' |
Transportation Systems | ' | ' | ' |
Expected amortization for purchased intangibles for each of the next five years | ' | ' | ' |
2015 | 8,886 | ' | ' |
2016 | 7,686 | ' | ' |
2017 | 6,566 | ' | ' |
2018 | 5,442 | ' | ' |
2019 | 3,048 | ' | ' |
Thereafter | 3,750 | ' | ' |
Total expected amortization for purchased intangibles | 35,378 | ' | ' |
Defense Systems | ' | ' | ' |
Expected amortization for purchased intangibles for each of the next five years | ' | ' | ' |
2015 | 2,129 | ' | ' |
2016 | 1,503 | ' | ' |
2017 | 841 | ' | ' |
2018 | 522 | ' | ' |
2019 | 249 | ' | ' |
Thereafter | 53 | ' | ' |
Total expected amortization for purchased intangibles | 5,297 | ' | ' |
Mission Support Services | ' | ' | ' |
Expected amortization for purchased intangibles for each of the next five years | ' | ' | ' |
2015 | 7,690 | ' | ' |
2016 | 4,714 | ' | ' |
2017 | 2,452 | ' | ' |
2018 | 1,775 | ' | ' |
2019 | 1,184 | ' | ' |
Thereafter | 5,128 | ' | ' |
Total expected amortization for purchased intangibles | $22,943 | ' | ' |
FINANCING_ARRANGEMENTS_Details
FINANCING ARRANGEMENTS (Details) | 12 Months Ended | 0 Months Ended | 12 Months Ended | |||||||||||||||||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | Mar. 31, 2013 | Mar. 31, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2014 | |
USD ($) | USD ($) | USD ($) | Letters of credit primarily for self-insured liabilities | Letters of credit and bank guarantees | New Zealand | New Zealand | Australia | Australia | Senior unsecured notes | Senior unsecured notes | Series A senior unsecured notes | Series A senior unsecured notes | Series B senior unsecured notes | Series B senior unsecured notes | Mortgage notes | Mortgage notes | Revolving credit agreement | Secured letter of credit agreement | Secured letter of credit agreement | |
USD ($) | USD ($) | USD ($) | NZD | USD ($) | AUD | Expected | Maximum | USD ($) | USD ($) | USD ($) | USD ($) | United Kingdom | United Kingdom | USD ($) | USD ($) | United Kingdom | ||||
USD ($) | USD ($) | USD ($) | USD ($) | USD ($) | ||||||||||||||||
Financial arrangement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Interest rate (as a percent) | ' | ' | ' | ' | ' | ' | ' | ' | ' | 3.35% | ' | 3.35% | 3.35% | 3.35% | 3.35% | 6.48% | 6.48% | ' | ' | ' |
Long-term Debt | $102,390,000 | $102,920,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | $50,000,000 | $50,000,000 | $50,000,000 | $50,000,000 | $2,390,000 | $2,920,000 | ' | ' | ' |
Less current portion | -563,000 | -557,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Long-term Debt, Excluding Current Maturities | 101,827,000 | 102,363,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maturities of long-term debt | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2015 | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2016 | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2017 | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2018 | 600,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
2019 | 100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of interest paid | 4,100,000 | 3,700,000 | 7,400,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Amount of interest paid to U.S. District Court in connection with arbitration award | ' | 600,000 | 5,900,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Principal amount of debt instrument | ' | ' | ' | ' | ' | ' | ' | ' | ' | 100,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Additional senior notes principal amount agreed to be issued within the next three years | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 25,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Term under revolving credit or letter of agreement | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | '5 years | ' | ' |
Letters of credit outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 8,100,000 | 61,600,000 | ' |
Available amount under line of credit | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 191,900,000 | ' | ' |
Restricted cash | 69,056,000 | 69,381,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Cash on deposit as collateral | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 69,100,000 |
Letters of Credit and bank guarantees outstanding | ' | ' | ' | 8,900,000 | 75,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Fair value of instruments | ' | ' | ' | 0 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Self-insurance liabilities | 9,100,000 | 8,800,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Short term borrowings | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Maximum borrowing capacity under credit agreement | ' | ' | ' | ' | ' | 400,000 | 500,000 | 2,600,000 | 3,000,000 | ' | ' | ' | ' | ' | ' | ' | ' | 200,000,000 | 62,600,000 | ' |
Borrowings outstanding | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | $0 | ' | ' |
COMMITMENTS_Details
COMMITMENTS (Details) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Commitments | ' | ' | ' |
Sublease income | $200,000 | $200,000 | $400,000 |
Rental expense, net of sublease income | 12,000,000 | 12,600,000 | 10,200,000 |
Future minimum payments, net of minimum sublease income, under noncancelable operating leases | ' | ' | ' |
2015 | 10,592,000 | ' | ' |
2016 | 8,074,000 | ' | ' |
2017 | 5,897,000 | ' | ' |
2018 | 4,232,000 | ' | ' |
2019 | 2,499,000 | ' | ' |
Thereafter | 3,191,000 | ' | ' |
Total future minimum payments, net of minimum sublease income | $34,485,000 | ' | ' |
Maximum | ' | ' | ' |
Commitments | ' | ' | ' |
Term of lease | '10 years | ' | ' |
INCOME_TAXES_Details
INCOME TAXES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Current: | ' | ' | ' |
Federal | ($8,049) | $8,198 | $15,448 |
State | 918 | 2,437 | 1,927 |
Foreign | 25,705 | 18,581 | 21,005 |
Total current | 18,574 | 29,216 | 38,380 |
Deferred: | ' | ' | ' |
Federal | 1,296 | -14,182 | 331 |
State | -1,232 | -2,720 | 328 |
Foreign | 1,193 | 2,188 | 1,293 |
Total deferred | 1,257 | -14,714 | 1,952 |
Total income tax expense | $19,831 | $14,502 | $40,332 |
INCOME_TAXES_Details_2
INCOME TAXES (Details 2) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Retirement benefits | $4,729,000 | $5,678,000 | ' |
Allowances for loss contingencies | 5,121,000 | 5,441,000 | ' |
Deferred tax assets: | ' | ' | ' |
Accrued employee benefits | 13,944,000 | 11,642,000 | ' |
Long-term contracts and inventory valuation reductions | 9,554,000 | 14,152,000 | ' |
Allowances for loss contingencies | 5,121,000 | 5,441,000 | ' |
Deferred compensation | 4,310,000 | 4,346,000 | ' |
Property, plant and equipment | 1,507,000 | 1,127,000 | ' |
Intangible assets | 2,324,000 | 477,000 | ' |
Retirement benefits | 4,729,000 | 5,678,000 | ' |
State research and development credit carryforward | 7,285,000 | 4,839,000 | ' |
Net operating losses carryforwards | 15,662,000 | 18,639,000 | ' |
Other | 585,000 | 2,048,000 | ' |
Total gross deferred tax assets | 65,021,000 | 68,389,000 | ' |
Valuation allowance | -14,024,000 | -8,801,000 | ' |
Total deferred tax assets | 50,997,000 | 59,588,000 | ' |
Deferred tax liabilities: | ' | ' | ' |
Deferred revenue | 22,507,000 | 28,865,000 | ' |
State taxes | 6,000 | 995,000 | ' |
Other | 1,937,000 | 2,052,000 | ' |
Deferred tax liabilities | 24,450,000 | 31,912,000 | ' |
Net deferred tax asset | 26,547,000 | 27,676,000 | ' |
Unused state tax credits | 13,800,000 | ' | ' |
Change in valuation allowance | 5,200,000 | ' | ' |
Foreign subsidiaries earnings on which income tax provided | 10,500,000 | ' | ' |
Foreign subsidiaries earnings on which income tax not provided | 389,800,000 | ' | ' |
Charge to income tax provision related to Australia | 19,831,000 | 14,502,000 | 40,332,000 |
Foreign | ' | ' | ' |
Deferred tax liabilities: | ' | ' | ' |
Net operating loss carryforwards | 51,100,000 | ' | ' |
State | ' | ' | ' |
Deferred tax liabilities: | ' | ' | ' |
Net operating loss carryforwards | 30,400,000 | ' | ' |
Adjustments | Reclassification of long-term contracts and inventory valuation reductions | ' | ' | ' |
Allowances for loss contingencies | 700,000 | ' | ' |
Deferred tax assets: | ' | ' | ' |
Allowances for loss contingencies | $700,000 | ' | ' |
INCOME_TAXES_Details_3
INCOME TAXES (Details 3) (USD $) | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense | ' | ' | ' |
Tax expense at U.S. statutory rate | $31,290,000 | $13,921,000 | $48,287,000 |
State income taxes, net of federal tax effect | 111,000 | 120,000 | 1,364,000 |
Nondeductible expenses | 1,319,000 | 1,609,000 | 286,000 |
Change in reserve for tax contingencies | -601,000 | -673,000 | -2,752,000 |
Impact of goodwill impairment loss | ' | 10,046,000 | ' |
Change in deferred tax asset valuation allowance | 921,000 | 4,044,000 | ' |
Tax effect from foreign earnings repatriation | ' | ' | 2,773,000 |
Foreign earnings taxes at less than statutory rate | -12,783,000 | -7,521,000 | -7,847,000 |
R&D credits generated in the current year | -584,000 | -3,202,000 | -906,000 |
Reinstatement of federal research and development credit | ' | -1,937,000 | ' |
Manufacturing deduction | ' | -1,333,000 | -630,000 |
Other | 158,000 | -572,000 | -243,000 |
Total income tax expense | 19,831,000 | 14,502,000 | 40,332,000 |
Net changes in the liability for unrecognized tax benefits | ' | ' | ' |
Balance at the beginning of the period | 8,441,000 | 9,833,000 | ' |
Increase (decrease) related to tax positions in prior years: | ' | ' | ' |
Recognition of benefits from expiration of statutes | -973,000 | -575,000 | ' |
Settlements with taxing authorities | -728,000 | -2,332,000 | ' |
Other | -54,000 | 824,000 | ' |
Tax positions related to the current year | 743,000 | 731,000 | ' |
Currency translation adjustment | -123,000 | -40,000 | ' |
Balance at the end of the period | 7,306,000 | 8,441,000 | 9,833,000 |
Unrecognized tax benefits from permanent tax adjustments that, if recognized, would affect the effective rate | 4,700,000 | ' | ' |
Unrecognized tax benefits related to settlements with taxing authorities | 1,000,000 | ' | ' |
Interest and penalties accrued | 1,600,000 | 2,200,000 | ' |
Total liability for uncertain tax issues | 8,000,000 | 9,300,000 | ' |
Cash amounts paid for income taxes, net of refunds received | 27,300,000 | 42,100,000 | 25,400,000 |
Components of income before income taxes | ' | ' | ' |
United States | -22,788,000 | -31,640,000 | 38,692,000 |
Foreign | 112,199,000 | 71,411,000 | 99,271,000 |
Income before income taxes | $89,411,000 | $39,771,000 | $137,963,000 |
DERIVATIVE_INSTRUMENTS_AND_HED2
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Not designated but designed to manage exposure: | Foreign currency forwards | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Notional Principal outstanding derivative instruments | $132,100 | $128,100 |
Instruments designated as accounting hedges: | Foreign currency forwards | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Notional Principal outstanding derivative instruments | 249,628 | 231,051 |
Instruments designated as accounting hedges: | Forward starting swap | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Notional Principal outstanding derivative instruments | ' | 58,415 |
Instruments not designated as accounting hedges: | Foreign currency forwards | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Notional Principal outstanding derivative instruments | $136,955 | $130,687 |
DERIVATIVE_INSTRUMENTS_AND_HED3
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 2) (Instruments designated as accounting hedges:, USD $) | Sep. 30, 2014 | Sep. 30, 2013 |
In Thousands, unless otherwise specified | ||
Derivative instruments and hedging activities | ' | ' |
Asset derivatives: | $13,309 | $7,693 |
Liability derivatives: | 12,523 | 7,726 |
Foreign currency forwards | Other current assets | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Asset derivatives: | 7,389 | 1,597 |
Foreign currency forwards | Other noncurrent assets | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Asset derivatives: | 5,920 | 4,957 |
Foreign currency forwards | Other current liabilities | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Liability derivatives: | 6,645 | 2,360 |
Foreign currency forwards | Other noncurrent liabilities | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Liability derivatives: | 5,878 | 5,366 |
Forward starting swap | Other noncurrent assets | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Asset derivatives: | ' | $1,139 |
DERIVATIVE_INSTRUMENTS_AND_HED4
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 3) (USD $) | 12 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Derivative instruments and hedging activities | ' | ' |
Gains (losses) recognized in OCI | $820,000 | $5,811,000 |
Gains (losses) reclassified into earnings - Effective Portion | 330,000 | -1,231,000 |
Estimated unrealized net gains from cash flow hedges which are expected to be reclassified into earnings in the next twelve months | 500,000 | ' |
Foreign currency forwards | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Gains (losses) recognized in OCI | 820,000 | 4,581,000 |
Gains (losses) reclassified into earnings - Effective Portion | 330,000 | -1,231,000 |
Forward starting swap | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Gains (losses) recognized in OCI | ' | $1,230,000 |
DERIVATIVE_INSTRUMENTS_AND_HED5
DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES (Details 4) (USD $) | 0 Months Ended | 12 Months Ended |
Jul. 01, 2014 | Sep. 30, 2014 | |
Forward starting swap | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Term of derivative contract | ' | '10 years |
Fair value of derivative immediately prior to the modification | ' | $200,000 |
Amount received from counterparty | 200,000 | ' |
Foreign currency forwards | ' | ' |
Derivative instruments and hedging activities | ' | ' |
Minimum commitment amount for hedging | ' | $50,000 |
PENSION_PROFIT_SHARING_AND_OTH2
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS (Details) (USD $) | 12 Months Ended | |||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2010 | |
Deferred Compensation Plans | ' | ' | ' | ' |
Minimum period in which members of management may elect to defer receiving payment for a portion of their compensation | '5 years | ' | ' | ' |
Interest rate adjustment semi-annually (as a percent) | 1.90% | ' | ' | ' |
Defined Contribution Plans | ' | ' | ' | ' |
Minimum discretionary contribution with Board of Directors | 0.5 | 0.5 | 0.5 | ' |
Company contributions to defined contribution plan | $19,600,000 | $19,700,000 | $18,600,000 | ' |
Weighted-average assumptions used to determine benefit obligation at the end of the year | ' | ' | ' | ' |
Discount rate (as a percent) | ' | ' | 4.30% | ' |
Rate of compensation increase (as a percent) | ' | ' | 3.80% | ' |
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ' | ' | ' | ' |
Discount rate (as a percent) | ' | ' | 5.20% | ' |
Expected return on plan assets (as a percent) | ' | ' | 7.00% | ' |
Rate of compensation increase (as a percent) | ' | ' | 4.30% | ' |
Equity securities | ' | ' | ' | ' |
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ' | ' | ' | ' |
Target allocation percentage, minimum | 20.00% | ' | ' | ' |
Target allocation percentage, maximum | 55.00% | ' | ' | ' |
Debt securities | ' | ' | ' | ' |
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ' | ' | ' | ' |
Target allocation percentage, minimum | 25.00% | ' | ' | ' |
Target allocation percentage, maximum | 75.00% | ' | ' | ' |
Cash | ' | ' | ' | ' |
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ' | ' | ' | ' |
Target allocation percentage, minimum | 0.00% | ' | ' | ' |
Target allocation percentage, maximum | 55.00% | ' | ' | ' |
Real Estate | ' | ' | ' | ' |
Change in plan assets: | ' | ' | ' | ' |
Fair value of plan assets at the beginning of the year | 6,263,000 | ' | ' | ' |
Fair value of plan assets at the end of the year | 7,096,000 | ' | ' | ' |
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ' | ' | ' | ' |
Target allocation percentage, minimum | 0.00% | ' | ' | ' |
Target allocation percentage, maximum | 10.00% | ' | ' | ' |
Defined Benefit Pension Plans | ' | ' | ' | ' |
Defined Benefit Pension Plans | ' | ' | ' | ' |
Number of European employees covered by contributory defined benefit pension plan for which benefits were frozen (as a percent) | ' | ' | ' | 50.00% |
Expected contribution to defined benefit pension plans in next fiscal year | 3,600,000 | ' | ' | ' |
Unrecognized actuarial loss expected to be recognized in net pension cost over next fiscal year | 700,000 | ' | ' | ' |
Unrecognized actuarial loss expected to be recognized in net pension cost over next fiscal year, net of tax | 500,000 | ' | ' | ' |
Plan assets expected to be returned in 2013 | 0 | ' | ' | ' |
Projected benefit obligation, ABO and fair value of plan assets for the defined benefit pension plans in which the ABO was in excess of the fair value of plan assets | ' | ' | ' | ' |
Projected benefit obligation | 224,201,000 | 209,118,000 | ' | ' |
Accumulated benefit obligation | 224,201,000 | 202,916,000 | ' | ' |
Fair value of plan assets | 206,982,000 | 188,337,000 | ' | ' |
Change in benefit obligations: | ' | ' | ' | ' |
Net benefit obligation at the beginning of the year | 209,118,000 | 215,706,000 | ' | ' |
Service cost | 636,000 | 532,000 | 508,000 | ' |
Interest cost | 9,967,000 | 8,867,000 | 9,565,000 | ' |
Actuarial loss (gain) | 10,730,000 | -5,726,000 | ' | ' |
Plan amendments | -1,044,000 | -1,178,000 | ' | ' |
Gross benefits paid | -6,229,000 | -8,576,000 | ' | ' |
Foreign currency exchange rate changes | 1,023,000 | -507,000 | ' | ' |
Net benefit obligation at the end of the year | 224,201,000 | 209,118,000 | 215,706,000 | ' |
Change in plan assets: | ' | ' | ' | ' |
Fair value of plan assets at the beginning of the year | 188,337,000 | 169,323,000 | ' | ' |
Actual return on plan assets | 21,127,000 | 24,707,000 | ' | ' |
Employer contributions | 3,728,000 | 3,915,000 | ' | ' |
Gross benefits paid | -6,229,000 | -8,576,000 | ' | ' |
Administrative expenses | -730,000 | -843,000 | ' | ' |
Foreign currency exchange rate changes | 749,000 | -189,000 | ' | ' |
Fair value of plan assets at the end of the year | 206,982,000 | 188,337,000 | 169,323,000 | ' |
Unfunded status of the plans | -17,219,000 | -20,781,000 | ' | ' |
Unrecognized net actuarial loss | 33,376,000 | 31,657,000 | ' | ' |
Net amount recognized | 16,157,000 | 10,876,000 | ' | ' |
Amounts recognized in Accumulated OCI | ' | ' | ' | ' |
Liability adjustment to OCI | -33,376,000 | -31,657,000 | ' | ' |
Deferred tax asset | 9,925,000 | 9,291,000 | ' | ' |
Accumulated other comprehensive loss | -23,451,000 | -22,366,000 | ' | ' |
Components of net periodic pension cost (benefit) | ' | ' | ' | ' |
Service cost | 636,000 | 532,000 | 508,000 | ' |
Interest cost | 9,967,000 | 8,867,000 | 9,565,000 | ' |
Expected return on plan assets | -13,183,000 | -11,605,000 | -10,091,000 | ' |
Amortization of actuarial loss | 802,000 | 1,798,000 | 1,593,000 | ' |
Administrative expenses | 152,000 | 76,000 | 82,000 | ' |
Net pension cost | ($1,626,000) | ($332,000) | $1,657,000 | ' |
Weighted-average assumptions used to determine benefit obligation at the end of the year | ' | ' | ' | ' |
Discount rate (as a percent) | 4.20% | 4.80% | ' | ' |
Rate of compensation increase (as a percent) | 3.20% | 4.40% | ' | ' |
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ' | ' | ' | ' |
Discount rate (as a percent) | 4.80% | 4.30% | ' | ' |
Expected return on plan assets (as a percent) | 7.00% | 7.00% | ' | ' |
Rate of compensation increase (as a percent) | 4.40% | 3.80% | ' | ' |
PENSION_PROFIT_SHARING_AND_OTH3
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS (Details 2) (USD $) | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
In Thousands, unless otherwise specified | |||
Cash and cash equivalents | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | $2,270 | $2,836 | ' |
Cash and cash equivalents | Level 1 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 1,863 | 2,361 | ' |
Cash and cash equivalents | Level 2 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 407 | 475 | ' |
Equity securities | United States | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 43,351 | 54,870 | ' |
Equity securities | United States | Level 2 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 43,351 | 54,870 | ' |
Equity securities | Foreign countries | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 47,110 | 47,569 | ' |
Equity securities | Foreign countries | Level 2 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 47,110 | 47,569 | ' |
Fixed-income funds | United States | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 49,479 | 33,849 | ' |
Fixed-income funds | United States | Level 2 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 49,479 | 33,849 | ' |
Fixed-income funds | United Kingdom | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 25,813 | 12,804 | ' |
Fixed-income funds | United Kingdom | Level 2 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 25,813 | 12,804 | ' |
Diversified growth fund | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 31,863 | 30,146 | ' |
Diversified growth fund | Level 2 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 31,863 | 30,146 | ' |
Real Estate | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 7,096 | 6,263 | ' |
Real Estate | Level 3 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 7,096 | 6,263 | ' |
Defined Benefit Pension Plans | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 206,982 | 188,337 | 169,323 |
Defined Benefit Pension Plans | Level 1 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 1,863 | 2,361 | ' |
Defined Benefit Pension Plans | Level 2 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | 198,023 | 179,713 | ' |
Defined Benefit Pension Plans | Level 3 | ' | ' | ' |
Fair value of assets of defined benefit pension plans by asset category | ' | ' | ' |
Fair value of the assets | $7,096 | $6,263 | $5,614 |
PENSION_PROFIT_SHARING_AND_OTH4
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS (Details 3) (Defined Benefit Pension Plans, USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Changes in the fair value of plan assets categorized as Level 3 | ' | ' |
Fair value of plan assets at the beginning of the year | $188,337 | $169,323 |
Realized and unrealized gains, net | 21,127 | 24,707 |
Fair value of plan assets at the end of the year | 206,982 | 188,337 |
Level 3 | ' | ' |
Changes in the fair value of plan assets categorized as Level 3 | ' | ' |
Fair value of plan assets at the beginning of the year | 6,263 | 5,614 |
Realized and unrealized gains, net | 898 | 712 |
Purchase, sales and settlements, net | -65 | -63 |
Fair value of plan assets at the end of the year | $7,096 | $6,263 |
PENSION_PROFIT_SHARING_AND_OTH5
PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS (Details 4) (USD $) | Sep. 30, 2014 |
In Thousands, unless otherwise specified | |
Expected pension benefit payments | ' |
2015 | $7,784 |
2016 | 8,208 |
2017 | 8,482 |
2018 | 9,043 |
2019 | 9,590 |
2020-2024 | $52,964 |
STOCKHOLDERS_EQUITY_Details
STOCKHOLDERS' EQUITY (Details) (USD $) | 12 Months Ended | 0 Months Ended | 12 Months Ended | 0 Months Ended | 12 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Mar. 21, 2013 | Sep. 30, 2014 | Mar. 21, 2013 | Sep. 30, 2014 | |
RSUs | RSUs | RSUs | Time-based RSUs | Time-based RSUs | Performance-based RSUs | Performance-based RSUs | |
Expected | item | ||||||
Stockholders' Equity | ' | ' | ' | ' | ' | ' | ' |
Number of units awarded (in shares) | 305,074 | 426,511 | ' | 416,929 | ' | 314,656 | ' |
Number of units awarded (in shares) | 731,585 | ' | ' | ' | ' | ' | ' |
Number of equal installments for vesting of stock awards | ' | ' | ' | ' | 4 | ' | ' |
Vesting period | ' | ' | ' | ' | ' | ' | '3 years |
Awards vested (in shares) | 69,994 | ' | 345,240 | ' | ' | ' | ' |
Weighted-average grant date fair value (in dollars per share) | $46.43 | $43.76 | ' | ' | ' | ' | ' |
STOCKHOLDERS_EQUITY_Details_2
STOCKHOLDERS' EQUITY (Details 2) (RSUs, USD $) | 12 Months Ended | 0 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | Oct. 02, 2014 | |
Subsequent event | |||
Number of Shares | ' | ' | ' |
Balance unvested at the beginning of the period (in shares) | 421,369 | ' | ' |
Granted (in shares) | 305,074 | 426,511 | ' |
Vested (in shares) | -69,994 | ' | -105,886 |
Forfeited (in shares) | -13,500 | -5,142 | ' |
Balance unvested at the end of the period (in shares) | 642,949 | 421,369 | ' |
Weighted Average Grant-Date Fair Value | ' | ' | ' |
Balance unvested at the beginning of the period (in dollars per share) | $43.76 | ' | ' |
Granted (in dollars per share) | $49.57 | $43.76 | ' |
Vested (in dollars per share) | $43.76 | ' | ' |
Forfeited (in dollars per share) | $47.80 | $43.76 | ' |
Balance unvested at the end of the period (in dollars per share) | $46.43 | $43.76 | ' |
Shares available for future grants | 3,746,426 | ' | ' |
STOCK_BASED_COMPENSATION_Detai
STOCK BASED COMPENSATION (Details) (USD $) | 12 Months Ended |
Sep. 30, 2014 | |
Stock-Based Compensation | ' |
Non-cash compensation expense related to stock-based awards | $5,625,000 |
Estimated forfeiture rate (as a percent) | 12.50% |
RSUs | ' |
Stock-Based Compensation | ' |
Unrecognized compensation cost related to unvested awards | 24,100,000 |
Weighted-average period of recognition | '1 year 8 months 12 days |
Aggregate fair value of awards | 16,200,000 |
RSUs | Cost of sales | ' |
Stock-Based Compensation | ' |
Non-cash compensation expense related to stock-based awards | 566,000 |
RSUs | Selling, general and administrative | ' |
Stock-Based Compensation | ' |
Non-cash compensation expense related to stock-based awards | $5,059,000 |
LEGAL_MATTERS_Details
LEGAL MATTERS (Details) (USD $) | Mar. 31, 2012 | Mar. 31, 2012 | Nov. 30, 2011 | Sep. 30, 2014 | Sep. 30, 2014 |
Claim from public transit authority customer | Claim from public transit authority customer | Claim from public transit authority customer | Lawsuit filed in state court against the transit customers alleging conversion and unjust enrichment | ||
item | Maximum | ||||
Legal Matters | ' | ' | ' | ' | ' |
Arbitration award amount | ' | ' | ' | $2,600,000 | ' |
Number of employees alleged for loss of revenue due to inappropriate and illegal actions | ' | ' | 1 | ' | ' |
Period prior to acquisition of contract during which a former employee was committing illegal acts | ' | ' | '2 years | ' | ' |
Amount of recoupment sought under claim for alleged lost revenue, fees and damages | ' | ' | 4,500,000 | ' | ' |
Estimated loss of revenue | 2,900,000 | ' | ' | ' | ' |
Default judgment award amount | ' | 2,900,000 | ' | ' | ' |
Amount charged on bank debit card for a ride on the transit system | ' | ' | ' | ' | $2.25 |
BUSINESS_SEGMENT_INFORMATION_D
BUSINESS SEGMENT INFORMATION (Details) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
segment | |||||||||||
BUSINESS SEGMENT INFORMATION | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Number of primary business segments | ' | ' | ' | ' | ' | ' | ' | ' | 3 | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | $396,366,000 | $340,357,000 | $354,492,000 | $307,137,000 | $340,776,000 | $337,226,000 | $368,609,000 | $314,796,000 | $1,398,352,000 | $1,361,407,000 | $1,404,084,000 |
Operating income (loss) | 39,268,000 | 19,215,000 | 22,177,000 | 11,830,000 | -44,055,000 | 26,905,000 | 37,376,000 | 20,509,000 | 92,490,000 | 40,735,000 | 136,205,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 30,440,000 | 25,359,000 | 22,857,000 |
Assets | 1,194,606,000 | ' | ' | ' | 1,109,618,000 | ' | ' | ' | 1,194,606,000 | 1,109,618,000 | 1,014,600,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 16,620,000 | 9,052,000 | 14,226,000 |
Transportation Systems | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 599,700,000 | 529,500,000 | 522,200,000 |
Operating income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 65,900,000 | 66,800,000 | 84,600,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 11,500,000 | 5,000,000 | 3,700,000 |
Assets | 422,200,000 | ' | ' | ' | 369,800,000 | ' | ' | ' | 422,200,000 | 369,800,000 | 268,400,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 1,800,000 | 2,800,000 | 2,700,000 |
Sales to Transport for London | ' | ' | ' | ' | ' | ' | ' | ' | 213,200,000 | 193,400,000 | 184,700,000 |
Mission Support Services | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 398,100,000 | 468,700,000 | 491,400,000 |
Operating income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 7,800,000 | -36,100,000 | 21,100,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 10,700,000 | 13,000,000 | 12,500,000 |
Assets | 195,800,000 | ' | ' | ' | 205,200,000 | ' | ' | ' | 195,800,000 | 205,200,000 | 212,800,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | ' | 300,000 | 1,100,000 |
Defense Systems | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 400,600,000 | 363,000,000 | 389,400,000 |
Operating income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | 26,800,000 | 14,200,000 | 35,300,000 |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 7,400,000 | 6,100,000 | 5,500,000 |
Assets | 252,400,000 | ' | ' | ' | 228,900,000 | ' | ' | ' | 252,400,000 | 228,900,000 | 211,200,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 13,200,000 | 4,600,000 | 8,900,000 |
Other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | ' | 200,000 | 1,100,000 |
Corporate and other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Depreciation and amortization | ' | ' | ' | ' | ' | ' | ' | ' | 800,000 | 1,300,000 | 1,200,000 |
Assets | 324,200,000 | ' | ' | ' | 304,500,000 | ' | ' | ' | 324,200,000 | 304,500,000 | 322,200,000 |
Capital expenditures | ' | ' | ' | ' | ' | ' | ' | ' | 1,600,000 | 1,400,000 | 1,500,000 |
MSS and CDS Segments | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales to U.S. government agencies | ' | ' | ' | ' | ' | ' | ' | ' | 651,500,000 | 691,800,000 | 699,400,000 |
Unallocated corporate expenses and other | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Operating income (loss) | ' | ' | ' | ' | ' | ' | ' | ' | ($8,000,000) | ($4,200,000) | ($4,800,000) |
BUSINESS_SEGMENT_INFORMATION_D1
BUSINESS SEGMENT INFORMATION (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
Business segment financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | $396,366,000 | $340,357,000 | $354,492,000 | $307,137,000 | $340,776,000 | $337,226,000 | $368,609,000 | $314,796,000 | $1,398,352,000 | $1,361,407,000 | $1,404,084,000 |
Long-lived assets, net | 65,400,000 | ' | ' | ' | 59,700,000 | ' | ' | ' | 65,400,000 | 59,700,000 | 58,000,000 |
United States | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business segment financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 749,900,000 | 741,700,000 | 742,200,000 |
Long-lived assets, net | 49,800,000 | ' | ' | ' | 43,900,000 | ' | ' | ' | 49,800,000 | 43,900,000 | 42,400,000 |
United Kingdom | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business segment financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 294,400,000 | 267,400,000 | 283,200,000 |
Long-lived assets, net | 9,300,000 | ' | ' | ' | 9,200,000 | ' | ' | ' | 9,300,000 | 9,200,000 | 9,500,000 |
Canada | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business segment financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 9,000,000 | 30,400,000 | 54,800,000 |
Australia | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business segment financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 161,900,000 | 148,500,000 | 181,900,000 |
Middle East | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business segment financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 42,000,000 | 35,400,000 | 38,000,000 |
Far East | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business segment financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 76,600,000 | 78,200,000 | 56,900,000 |
Foreign countries | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Business segment financial data | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales | ' | ' | ' | ' | ' | ' | ' | ' | 64,600,000 | 59,800,000 | 47,100,000 |
Long-lived assets, net | $6,300,000 | ' | ' | ' | $6,600,000 | ' | ' | ' | $6,300,000 | $6,600,000 | $6,100,000 |
BUSINESS_SEGMENT_INFORMATION_D2
BUSINESS SEGMENT INFORMATION (Details 3) (USD $) | 3 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||
Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 | |
item | Transportation Systems | Transportation Systems | Transportation Systems | Transportation Systems | Defense Systems | Defense Systems | Defense Systems | Change in estimated total costs | Change in estimated total costs | Change in estimated total costs | Change in estimated total costs | Change in estimated total costs | |||||||||||
item | item | Adjustment | Adjustment | Adjustment | Adjustment | Adjustment | |||||||||||||||||
Revenue recognition | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (decrease) in operating income | $39,268,000 | $19,215,000 | $22,177,000 | $11,830,000 | ($44,055,000) | $26,905,000 | $37,376,000 | $20,509,000 | $92,490,000 | $40,735,000 | $136,205,000 | ' | $65,900,000 | $66,800,000 | $84,600,000 | $26,800,000 | $14,200,000 | $35,300,000 | ($10,700,000) | $9,900,000 | $1,300,000 | $1,700,000 | $15,700,000 |
Increase (decrease) in net income | ' | ' | ' | ' | ' | ' | ' | ' | 69,580,000 | 25,269,000 | 97,631,000 | ' | ' | ' | ' | ' | ' | ' | -7,600,000 | 6,600,000 | -3,500,000 | 300,000 | 10,700,000 |
Increase (decrease) in net income per common share (in dollars per share) | $1.22 | $0.46 | $0.60 | $0.31 | ($1.39) | $0.69 | $1.11 | $0.53 | $2.59 | $0.94 | $3.64 | ' | ' | ' | ' | ' | ' | ' | ($0.28) | $0.25 | $0.13 | $0.01 | $0.40 |
Number of transportation systems service contracts contains annual system usage incentives | ' | ' | ' | ' | ' | ' | ' | ' | 1 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Sales related to annual system usage incentives | ' | ' | ' | ' | ' | ' | ' | ' | 12,200,000 | 13,200,000 | 12,200,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Reduction in employee headcount | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | 20 | ' | ' | ' | ' | 230 | ' | ' | ' | ' | ' | ' |
Restructuring costs | ' | ' | ' | ' | ' | ' | ' | ' | $1,094,000 | $8,139,000 | ' | $1,100,000 | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
BUSINESS_SEGMENT_INFORMATION_D3
BUSINESS SEGMENT INFORMATION (Details 4) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Restructuring liability | ' | ' |
Liability at the beginning of the period | $2,220 | ' |
Accrued costs | 1,094 | 8,139 |
Cash payments | -2,538 | -5,919 |
Liability at the end of the period | $776 | $2,220 |
Defense Systems | ' | ' |
Restructuring plan | ' | ' |
Reduction in employee headcount | ' | 230 |
SUMMARY_OF_QUARTERLY_RESULTS_O2
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) (USD $) | 0 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Net sales | ' | $396,366 | $340,357 | $354,492 | $307,137 | $340,776 | $337,226 | $368,609 | $314,796 | $1,398,352 | $1,361,407 | $1,404,084 |
Operating income (loss) | ' | 39,268 | 19,215 | 22,177 | 11,830 | -44,055 | 26,905 | 37,376 | 20,509 | 92,490 | 40,735 | 136,205 |
Net income (loss) attributable to Cubic | ' | 32,805 | 12,206 | 16,092 | 8,388 | -37,186 | 18,381 | 29,650 | 14,241 | 69,491 | 25,086 | 97,427 |
Net income (loss) per share, basic (in dollars per share) | ' | $1.22 | $0.46 | $0.60 | $0.31 | ($1.39) | $0.69 | $1.11 | $0.53 | $2.59 | $0.94 | $3.64 |
Net income (loss) per share, diluted (in dollars per share) | ' | $1.22 | $0.45 | $0.60 | $0.31 | ($1.39) | $0.69 | $1.11 | $0.53 | $2.59 | $0.94 | $3.64 |
Goodwill impairment charge related to MSS reporting unit | $0 | ' | ' | ' | ' | $50,900 | ' | ' | ' | ' | $50,865 | ' |
SUMMARY_OF_QUARTERLY_RESULTS_O3
SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details 2) (USD $) | 3 Months Ended | 12 Months Ended | |||||||||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Jun. 30, 2014 | Mar. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2013 | Jun. 30, 2013 | Mar. 31, 2013 | Dec. 31, 2012 | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2012 |
Summary Of quarterly results of operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (decrease) in operating income | $39,268 | $19,215 | $22,177 | $11,830 | ($44,055) | $26,905 | $37,376 | $20,509 | $92,490 | $40,735 | $136,205 |
Increase (decrease) in net income | ' | ' | ' | ' | ' | ' | ' | ' | 69,580 | 25,269 | 97,631 |
Increase (decrease) in net income per common share (in dollars per share) | $1.22 | $0.46 | $0.60 | $0.31 | ($1.39) | $0.69 | $1.11 | $0.53 | $2.59 | $0.94 | $3.64 |
Change in estimated total costs | Adjustment | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Summary Of quarterly results of operations | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' | ' |
Increase (decrease) in operating income | -10,700 | ' | ' | ' | 9,900 | ' | ' | ' | 1,300 | 1,700 | 15,700 |
Increase (decrease) in net income | ($7,600) | ' | ' | ' | $6,600 | ' | ' | ' | ($3,500) | $300 | $10,700 |
Increase (decrease) in net income per common share (in dollars per share) | ($0.28) | ' | ' | ' | $0.25 | ' | ' | ' | $0.13 | $0.01 | $0.40 |