Cubic 10-Q 4 Feb 16 2016 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2015	Jan. 22, 2016
Document and Entity Information
Entity Registrant Name	CUBIC CORP /DE/
Entity Central Index Key	26,076
Document Type	10-Q
Document Period End Date	Dec. 31, 2015
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 Common Stock, Shares Outstanding		26,972,270
Document Fiscal Year Focus	2,016
Document Fiscal Period Focus	Q1

CONDENSED CONSOLIDATED STATEMEN

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Net sales:
Products	$ 124,969	$ 128,612
Services	188,844	189,876
Total net sales	313,813	318,488
Costs and expenses:
Products	99,192	104,424
Services	154,656	149,292
Selling, general and administrative	58,491	47,554
Research and development	3,482	4,252
Amortization of purchased intangibles	6,455	5,935
Restructuring costs	(386)	(148)
Total costs and expenses	321,890	311,309
Operating income (loss)	(8,077)	7,179
Other income (expense):
Interest and dividend income	398	465
Interest expense	(1,338)	(871)
Other income (expense) - net	175	(916)
Income (loss) before income taxes	(8,842)	5,857
Income taxes	(3,428)	695
Net income (loss)	(5,414)	5,162
Less noncontrolling interest in income of VIE		10
Net income (loss) attributable to Cubic	$ (5,414)	$ 5,152
Net income (loss) per share attributable to Cubic
Basic (in dollars per share)	$ (0.20)	$ 0.19
Diluted (in dollars per share)	$ (0.20)	$ 0.19
Weighted average shares used in per share calculations:
Basic (in shares)	26,964	26,860
Diluted (in shares)	26,964	26,885

CONDENSED CONSOLIDATED STATEME3

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Net income (loss)	$ (5,414)	$ 5,162
Other comprehensive loss:
Foreign currency translation	(8,503)	(13,963)
Change in net unrealized gains/losses from cash flow hedges:
Change in fair value of cash flow hedges, net of tax	28	667
Adjustment for net gains/losses realized and included in net income, net of tax	(969)	(476)
Total change in unrealized gains/losses realized from cash flow hedges, net of tax	(941)	191
Total other comprehensive loss	(9,444)	(13,772)
Total comprehensive loss	$ (14,858)	$ (8,610)

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2015	Sep. 30, 2015
Current assets:
Cash and cash equivalents	$ 171,363	$ 218,476
Restricted cash	71,657	69,245
Marketable securities	23,611	30,533
Accounts receivable - net	352,601	358,925
Recoverable income taxes	8,063	753
Inventories - net	74,134	63,700
Deferred income taxes and other current assets	39,405	33,670
Total current assets	740,834	775,302
Long-term contract receivables	42,080	36,809
Long-term capitalized contract costs	71,689	73,017
Property, plant and equipment - net	82,727	74,690
Deferred income taxes	1,533	11,443
Goodwill	257,255	237,899
Purchased intangibles - net	81,262	72,936
Other assets	7,703	18,180
Total assets	1,285,083	1,300,276
Current liabilities:
Short-term borrowings	110,000	60,000
Trade accounts payable	23,245	47,170
Customer advances	80,418	77,083
Accrued compensation and other current liabilities	137,748	143,919
Income taxes payable	3,019	4,675
Deferred income taxes		13,404
Current portion of long-term debt	511	525
Total current liabilities	354,941	346,776
Long-term debt	126,021	126,180
Other long-term liabilities	62,287	71,032
Shareholders' equity:
Common stock	26,020	25,560
Retained earnings	813,172	818,642
Accumulated other comprehensive loss	(61,280)	(51,836)
Treasury stock at cost	(36,078)	(36,078)
Total shareholders' equity	741,834	756,288
Total liabilities and shareholders' equity	$ 1,285,083	$ 1,300,276

CONDENSED CONSOLIDATED STATEME5

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Operating Activities:
Net income (loss)	$ (5,414)	$ 5,162
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization	8,948	8,947
Share-based compensation expense	2,118	1,053
Changes in operating assets and liabilities, net of effects from acquisitions	(55,239)	(6,881)
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	(49,587)	8,281
Investing Activities:
Acquisition of businesses, net of cash acquired	(29,718)	(83,423)
Purchases of property, plant and equipment	(10,360)	(876)
Purchases of marketable securities	(7,541)
Proceeds from sales or maturities of marketable securities	14,176
Purchases of other assets		(2,352)
NET CASH USED IN INVESTING ACTIVITIES	(33,443)	(86,651)
Financing Activities:
Proceeds from short-term borrowings	72,600	60,000
Principal payments on short-term borrowings	(22,600)
Principal payments on long-term debt	(131)	(138)
Purchase of common stock	(1,658)	(1,582)
Net change in restricted cash	(2,412)	(59)
Contingent consideration payments related to acquisitions of businesses	(1,679)
NET CASH PROVIDED BY FINANCING ACTIVITIES	44,120	58,221
Effect of exchange rates on cash	(8,203)	(8,437)
NET DECREASE IN CASH AND CASH EQUIVALENTS	(47,113)	(28,586)
Cash and cash equivalents at the beginning of the period	218,476	215,849
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	171,363	187,263
TeraLogics
Supplemental disclosure of non-cash investing and financing activities:
Liability incurred to acquire, net	5,098
H4 Global
Supplemental disclosure of non-cash investing and financing activities:
Liability incurred to acquire, net	1,568
DTECH
Operating Activities:
Net income (loss)	$ (1,300)	(800)
Supplemental disclosure of non-cash investing and financing activities:
Liability incurred to acquire, net		$ 14,891

Basis for Presentation

Basis for Presentation	3 Months Ended
	Dec. 31, 2015
Basis for Presentation
Basis for Presentation	Note 1 — Basis for Presentation Cubic Corporation (“we”, “us”, and “Cubic”) has prepared the accompanying unaudited condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. In our opinion, the accompanying financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results for the interim periods presented. Operating results for the three-month period ended December 31, 2015 are not necessarily indicative of the results that may be expected for the year ending September 30, 2016. For further information, refer to the consolidated financial statements and footnotes thereto included in our Annual Report on Form 10-K for the year ended September 30, 2015. The preparation of the financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Significant Accounting Policies There have been no material changes to our significant accounting policies as compared with the significant accounting policies described in our Annual Report on Form 10-K for the year ended September 30, 2015. Recent Accounting Pronouncements 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 2019 or we may adopt ASU 2014-09 early in the first quarter of 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 opening retained earnings balance in the year of adoption. We do not intend to adopt the standard early and 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. ASU 2014-15 will be effective for the Company for the year ended September 30, 2017 and for interim reporting periods thereafter. Early adoption is permitted for financial statements that have not been previously issued, but we have not yet adopted this standard. This adoption is not expected to have a significant impact on our financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis . The new standard modifies current guidance on consolidation under the variable interest model and the voting model. We adopted ASU 2015-02 on October 1, 2015 with no significant impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 will be effective for the Company beginning on October 1, 2016, with early adoption permitted. We are currently assessing the impact that adopting this new accounting guidance will have on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs which requires that all costs incurred to issue debt be presented in the balance sheet as a direct reduction from the carrying value of the debt, similar to the presentation of debt discounts. ASU 2015-03 is effective for us on October 1, 2016 with early adoption permitted. We do not expect that the adoption of this new accounting guidance will have a material impact on our consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments in business combinations. This standard eliminates the need for an acquirer in a business combination to recognize measurement-period adjustments retrospectively, but instead measurement-period adjustments are to be recorded during the period in which the amount of the adjustment is determined, including the effect on earnings of any amount that would have been recorded in a previous period had the amount been recorded at the acquisition date. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2015, with early adoption permitted. Accordingly, we will be required to adopt this standard in the first quarter of fiscal year 2017. We are currently evaluating the impact this guidance will have on our financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes which removes the requirement to separate deferred tax liabilities and assets into current and noncurrent amounts and instead requires all such amounts be classified as noncurrent on the balance sheet. We adopted ASU 2015-17 prospectively on October 1, 2015 and reclassified the current portion of our net deferred tax assets and liabilities to net noncurrent deferred tax assets and liabilities. No prior periods were retrospectively adjusted. In January 2016, the FASB issued Accounting Standards Update ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10) which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 will be effective for us beginning October 1, 2018 and early adoption is not permitted. We are currently evaluating the impact this guidance will have on our financial statements and related disclosures.

Acquisitions

Acquisitions	3 Months Ended
	Dec. 31, 2015
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. TeraLogics On December 21, 2015 we acquired all of the assets of TeraLogics, LLC, an Ashburn, Virginia-based provider of real-time full motion video processing, exploitation and dissemination (PED) for the Department of Defense, the intelligence community and commercial customers. TeraLogics’ ability to develop real-time video analysis and delivery software for full motion video complements the existing tactical communications portfolio of our Cubic Global Defense Systems (CGD Systems) segment and expands our customer base. In the short period between our acquisition of TeraLogics and December 31, 2015, Teralogics did not have significant sales. For the quarter ended December 31, we incurred $0.4 million of transaction and acquisition expenses as well as a $1.3 million charge for compensation expense related to amounts paid to TeraLogics employees upon the close of the acquisition. As a consequence of these charges, the net loss after taxes related to the TeraLogics acquisition was $1.5 million in the first quarter of fiscal 2016. The estimated acquisition date fair value of consideration is $33.9 million, which is comprised of cash paid of $28.8 million plus the estimated fair value of contingent consideration of $5.1 million. Under the purchase agreement, we will pay the sellers up to $9.0 million of contingent consideration. Of this amount, up to $6.0 million will be paid if TeraLogics meets certain revenue thresholds in fiscal years 2016, 2017 and 2018; and up to $3.0 million will be paid if specific contract extensions are exercised by TeraLogics customers through fiscal 2018. The contingent consideration liability will be re-measured to fair value at each reporting date until the contingencies are resolved and any changes in fair value are recognized in earnings. The acquisition of TeraLogics is being paid for with a combination of funds from our existing cash resources and borrowings on our revolving credit facility. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Customer relationships $ Backlog Software Non compete agreements Accounts receivable Accounts payable and accrued expenses ) Other net assets acquired (liabilities assumed) ) Net identifiable assets acquired Goodwill Net assets acquired $ The estimated fair values of assets acquired and liabilities assumed, including purchased intangibles and deferred revenue, as well as the estimated fair value of contingent consideration are preliminary estimates pending the finalization of our valuation analyses. 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, the non-compete agreements used the with-and-without approach, and the software valuation uses the Replacement Cost New less cost decrements for obsolescence 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 three years from the date of acquisition. The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of TeraLogics with our existing CGD Systems business, including the synergies expected from combining TeraLogics real-time video capabilities with our existing tactical communications product portfolio. The goodwill also includes the value of the assembled workforce that became our employees following the close of the acquisition. The amount recorded as goodwill is allocated to our CGD Systems 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 TeraLogics for future periods is as follows (in millions): Year Ended September 30, 2016 $ 2017 2018 2019 2020 Thereafter H4 Global On November 4, 2015 we acquired all of the assets of H4 Global, a UK-based provider of simulation-based training solutions which complements our CGD Systems segment portfolio. In the short time period between our acquisition of H4 Global and December 31, 2015, H4 Global did not have significant sales or net income. During the quarter ended December 31, we incurred $0.1 million of transaction costs to acquire H4 Global. The estimated acquisition date fair value of consideration is $2.5 million, which is comprised of cash paid of $0.9 million plus the estimated fair value of contingent consideration of $1.6 million. Under the purchase agreement, we will pay the sellers up to $4.1 million of contingent consideration, based upon the value of contracts entered over the five-year period beginning on the acquisition date. The contingent consideration liability will be re-measured to fair value at each reporting date until the contingencies are resolved and any changes in fair value will be recognized in earnings. The fair value of the net assets acquired and liabilities assumed was not material. Consequently, virtually the entire purchase price of $2.5 million was recorded as goodwill, which is comprised of expected synergies and assembled workforce. The amount recorded as goodwill is allocated to our CGD Systems segment and is expected to be deductible for tax purposes. The estimated fair values of purchased intangibles and the estimated fair value of contingent consideration are preliminary estimates pending the finalization of our valuation analyses. DTECH On December 16, 2014 we acquired all of the outstanding capital stock of DTECH LABs, Inc. (DTECH). DTECH, based in Sterling, VA, is a provider of modular networking and baseband communications equipment that adds networking capability to our secure communications business. This acquisition expands the portfolio of product offerings and the customer base of our CGD Systems segment. For the three months ended December 31, 2015, the amounts of DTECH’s sales and net loss after taxes included in our Consolidated Statement of Income (Loss) were $7.8 million and $1.3 million, respectively. For the three months ended December 31, 2014, the amount of DTECH’s sales and net loss after tax were $1.0 million and $0.8 million, respectively. The DTECH operating results for the quarter ended December 31, 2015 include a charge of $0.8 million for the increase in the fair value of contingent consideration and for the quarter ended December 31, 2014 DTECH’s operations included $0.8 million of transaction and acquisition related costs before related income taxes. There was no significant change in the fair value of contingent consideration in the quarter ended December 31, 2014. The purchase agreement states that the cost of the acquisition is approximately $99.5 million, adjusted by the difference between the net working capital acquired and the targeted working capital amounts and adjusted for other acquisition related payments made upon closing, plus a contingent amount of up to $15.0 million based upon DTECH’s achievement of revenue and gross profit targets in the future. The acquisition date fair value of the consideration was $99.4 million. The total acquisition date fair value of consideration includes the acquisition fair value of holdback consideration and contingent consideration described below. Approximately $4.7 million of cash consideration (Holdback Consideration) will be paid to the seller over time when certain events occur in the future. The fair value of the Holdback Consideration is estimated to approximate $4.3 million using a discounted cash flow model, based upon the expected timing of the payment of the Holdback Consideration. In addition to the Holdback Consideration, we will pay the seller up to $15.0 million of contingent cash consideration based upon DTECH’s achievement of revenue and gross profit targets. The purchase agreement specifies independent revenue and gross profit targets for the period from our acquisition of DTECH through September 30, 2015, and separately for each of fiscal 2016 and fiscal 2017. At the acquisition date, the total fair value of the contingent consideration was estimated at $3.9 million using a real options approach (see Note 3 for further discussion of fair value measurements). During the measurement period ended September 30, 2015, DTECH met both the revenue and gross profit targets. As a result, $5.0 million was paid to the seller in December 2015. The remaining contingent consideration liability will be re-measured to fair value at each reporting date until the contingencies are resolved and any changes in fair value are recognized in earnings. At December 31, 2015 the fair value of the contingent consideration was $3.3 million and we recognized a charge of $0.8 million for the change in the fair value of contingent consideration during the quarter ended December 31, 2015. Through December 31, 2015 we have paid $96.3 million to the seller. At December 31, 2015 we have recorded a liability of $7.6 million as an estimate of the additional cash consideration that will be due to the seller in the future, including the Holdback Consideration and contingent consideration. The acquisition of DTECH is being paid for with a combination of funds from our existing cash resources and borrowings on our revolving credit facility. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Customer relationships $ Non compete agreements Backlog Cash Accounts receivable Inventory Warranty obligation ) Tax liabilities ) Accounts payable and accrued expenses ) Other net assets acquired Net identifiable assets acquired Goodwill Net assets acquired $ 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 agreements 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 two years from the date of acquisition and is expected to be deductible for tax purposes. The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of DTECH with our existing CGD Systems business, including the synergies expected from combining the networking and secure communications technologies of DTECH, and complementary products that will enhance our overall product and service portfolio. The goodwill also consists of the value of the assembled workforce that became our employees following the close of the acquisition. The amount recorded as goodwill is allocated to our CGD Systems 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 DTECH for future periods is as follows (in millions): Year Ended September 30, 2016 $ 2017 2018 2019 2020 Thereafter Changes in goodwill for the three months ended December 31, 2015 were as follows (in millions): Cubic Global Cubic Global Transportation Defense Defense Systems Systems Services Total Balances at September 30, 2015 $ $ $ $ Acquisitions — — Foreign currency exchange rate changes ) — ) Balances at December 31, 2015 $ $ $ $ Pro forma information The following unaudited pro forma information presents our consolidated results of operations as if TeraLogics, H4 Global and DTECH had been included in our consolidated results since October 1, 2014 (in millions): Three Months Ended December 31, 2015 2014 Net sales $ $ Net income attributable to Cubic $ ) $ 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, 2014, and it does not purport to project our future operating results. Subsequent event - acquisition of GATR In early February 2016 we acquired all of the outstanding capital stock of GATR Technologies, LLC (GATR), a defense systems business based in Huntsville, Alabama which manufactures deployable satellite communication terminal solutions. The purchase price is $225.0 million adjusted for the difference between net working capital acquired and a targeted working capital amount plus up to $7.5 million of contingent consideration.

Net Income (Loss) Per Share

Net Income (Loss) Per Share	3 Months Ended
	Dec. 31, 2015
Net Income (Loss) Per Share
Net Income (Loss) Per Share	Note 3 — Net Income (Loss) Per Share Basic net income (loss) per share (EPS) is computed by dividing the net income (loss) for the period by the weighted average number of common shares outstanding during the period, including vested restricted stock units (RSUs). In periods with a net income, 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. In periods with a net loss, common equivalent shares are not included in the computation of diluted EPS, because to do so would be anti-dilutive. For the three months ended December 31, 2015, the effect of 0.8 million shares of restricted stock were excluded from diluted loss per share that would have been included if we had been in a net income position. There were no anti-dilutive securities for the three months ended December 31, 2014. Basic and diluted EPS are computed as follows (amounts in thousands, except per share data). Three Months Ended December 31, 2015 2014 Net income (loss) attributable to Cubic $ ) $ Weighted average shares - basic Effect of dilutive securities — Weighted average shares - diluted Net income (loss) per share attributable to Cubic, basic $ ) $ Effect of dilutive securities — — Net income (loss) per share attributable to Cubic, diluted $ ) $

Balance Sheet Details

Balance Sheet Details	3 Months Ended
	Dec. 31, 2015
Balance Sheet Details
Balance Sheet Details	Note 4 — Balance Sheet Details Marketable Securities Marketable securities consist of fixed time deposits with short-term maturities. Marketable securities are classified and accounted for as available-for-sale. These investments are recorded at fair value in the accompanying Condensed Consolidated Balance Sheets and the change in fair value is recorded, net of taxes, as a component of other comprehensive loss. 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 Condensed Consolidated Balance Sheets based upon the nature of the securities and availability for use in current operations. Accounts Receivable The components of accounts receivable are as follows (in thousands): December 31, September 30, 2015 2015 Trade and other receivables $ $ Long-term contracts: Billed Unbilled Allowance for doubtful accounts ) ) Total accounts receivable Less estimated amounts not currently due ) ) Current accounts receivable $ $ 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 December 31, 2015 under transportation systems contracts in the U.S. and Australia, and under a CGD Systems contract in Italy based upon the payment terms in the contracts. The non-current balance at September 30, 2015 represented non-current amounts due from these same customers. Inventories Inventories consist of the following (in thousands): December 31, September 30, 2015 2015 Finished products $ $ Work in process and inventoried costs under long-term contracts Materials and purchased parts Customer advances ) ) Net inventories $ $ 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 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. At December 31, 2015, work in process and inventoried costs under long-term contracts includes approximately $4.1 million in costs incurred outside the scope of work or in advance of a contract award compared to $1.9 million at September 30, 2015. We believe it is probable that we will recover the costs inventoried at December 31, 2015, plus a profit margin, under contract change orders or awards within the next year. Long-term Capitalized Costs Long-term capitalized contract costs include costs incurred on contracts to develop and manufacture transportation systems for customers for which revenue recognition does not begin until the customers begin operating the systems. 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 contracts. Long-term capitalized costs that were recognized as cost of sales totaled $2.0 million and $1.8 million for the quarters ended December 31, 2015, and 2014 respectively. Capitalized Software We capitalize certain costs associated with the development or purchase of internal-use software. The amounts capitalized are included in property, plant and equipment in our Condensed Consolidated Balance Sheets and are amortized on a straight-line basis over the estimated useful life of the software, which ranges from three to seven years. No amortization expense is recorded until the software is ready for its intended use. As a part of our efforts to upgrade our current information systems, early in fiscal 2015 we purchased new enterprise resource planning (ERP) software and began the process of designing and configuring this software and other software applications to manage our operations. Capitalized software development costs related to these systems totaled $23.3 million at December 31, 2015 and $16.0 million at September 30, 2015. Such costs are classified as construction and internal-use software development in process at December 31, 2015 and September 30, 2015 as these systems have not yet been placed in service. In addition to software costs that were capitalized, during the three months ended December 31, 2015 and 2014, we recognized expense related to the development of our ERP system of $5.3 million and $0.3 million, respectively, for costs that did not meet the requirements for capitalization. Amounts that were expensed in connection with the development of these systems are classified within selling, general and administrative expenses in the Consolidated Statements of Income (Loss). Deferred Compensation Plan We have a non-qualified deferred compensation plan offered to a select group of highly compensated employees. The plan provides participants with the opportunity to defer a portion of their compensation in a given plan year. The liabilities associated with the non-qualified deferred compensation plan are included in other long-term liabilities in our Condensed Consolidated Balance Sheets and totaled $10.7 million and $9.9 million at December 31, 2015 and September 30, 2015, respectively. In the first quarter of fiscal 2015, we began making contributions to a rabbi trust to provide a source of funds for satisfying a portion of these deferred compensation liabilities. The total carrying value of the assets set aside to fund deferred compensation liabilities as of December 31, 2015 was $2.9 million, which included life insurance contracts with a carrying value of $2.1 million and marketable securities with a carrying value of $0.8 million. At September 30, 2015, the total carrying value of the assets set aside to fund deferred compensation liabilities was $2.9 million, which included life insurance contracts with a carrying value of $1.9 million and marketable securities with a carrying value of $1.0 million. The carrying value of the life insurance contracts is based on the cash surrender value of the policies. The marketable securities in the rabbi trust are carried at fair value, which is based upon quoted market prices for identical securities. Changes in the carrying value of the deferred compensation liability, and changes in the carrying value of the assets held in the rabbi trust are reflected in our Condensed Consolidated Statements of Income (Loss).

Fair Value of Financial Instrum

Fair Value of Financial Instruments	3 Months Ended
	Dec. 31, 2015
Fair Value of Financial Instruments
Fair Value of Financial Instruments	Note 5 — 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 certain of our cash equivalents are based upon quoted prices for identical instruments in active markets. The fair value of our other cash equivalents and our available for sale marketable securities is based upon a discounted cash flow model and approximate cost. The marketable securities in the rabbi trust are carried at fair value, which is based upon 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. The fair value of our contingent consideration liability to the sellers of businesses that we have acquired are revalued to their fair value each period and any increase or decrease is recorded into selling, general and administrative expense. Any changes in the assumed timing and amount of the probability of payment scenarios could impact the fair value. The fair value of the portion of the TeraLogics contingent consideration that is based on customer execution of contract extensions was estimated using a probability weighted approach. Subject to the terms and conditions of the TeraLogics Purchase Agreement, contingent consideration will be paid over a period commencing on the closing date and ending on December 21, 2018. The fair value of the contingent consideration was determined by applying probabilities of achieving the periodic payment to each period’s potential payment, and summing the present value of any future payments. The fair value of the portion of the TeraLogics contingent consideration that is based upon revenue targets was estimated using a real options approach. Each annual payment was modeled using a long digital options written on the underlying revenue metric. The strike price for each option is the respective revenue threshold as specified in the agreement, and the spot price is calibrated to the revenue forecast by calculating the present value of the corresponding projected revenues using a risk-adjusted discount rate. The volatility for the underlying revenue metrics was estimated to be 18% based on analysis of comparable guideline public companies. The risk-free rate was selected based on the quoted yields for U.S. Treasury securities with terms matching the earn-out payment period. The fair value of the H4 Global contingent consideration was estimated using a probability weighted approach. Subject to the terms and conditions of the H4 Global Purchase Agreement, contingent consideration will be paid over a five year term that commenced on October 1, 2015 and ends on September 30, 2020. The payments will be calculated based on the award of certain contracts during the specified period. The fair value of the contingent consideration was determined by applying probabilities to different scenarios, and summing the present value of any future payments. The fair value of the DTECH contingent consideration was estimated using a real options approach. Each annual payment was modeled using a portfolio of long and short digital options written on the underlying earnings metric (revenue or gross profit). The strike price for each option is the respective earnings threshold as specified in the agreement, and the spot price is calibrated to the revenue and gross profit forecast by calculating the present value of the corresponding projected earnings metric using a risk-adjusted discount rate. The volatility for the underlying earnings metrics was estimated to be 20% based on analysis of comparable guideline public companies. The risk-free rate was selected based on the quoted yields for U.S. Treasury securities with terms matching the earn-out payment period. The inputs to each of the contingent consideration fair value models include significant unobservable inputs and therefore represent Level 3 measurements within the fair value hierarchy. Significant judgment is employed in determining the appropriateness of these assumptions as of the acquisition dates and each subsequent period. Accordingly, changes in the assumptions described above can materially impact the amount of contingent consideration expense we record in any period. As of December 31, 2015, t he following table summarizes the change in fair value of our Level 3 DTECH contingent consideration liability (in thousands): Balance as of September 30, 2015 $ Cash paid to seller ) Total remeasurement recognized in earnings Balance as of December 31, 2015 $ There were no changes in the fair value of any of the other contingent consideration liabilities between the date of the respective business acquisitions and December 31, 2015. The following table presents assets and liabilities measured and recorded at fair value on our balance sheets on a recurring basis (in thousands): December 31, 2015 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ $ — $ — $ Marketable securities — — Current derivative assets — — Noncurrent derivative assets — — Marketable securities in rabbi trust — — Total assets measured at fair value $ $ $ — $ Liabilities Current derivative liabilities $ — $ $ — $ Noncurrent derivative liabilities — — Noncurrent contingent consideration to seller of Teralogics - contract extensions — — Noncurrent contingent consideration to seller of Teralogics - revenue targets — — Noncurrent contingent consideration to seller of H4 Global — — Current contingent consideration to seller of DTECH — — Noncurrent contingent consideration to seller of DTECH — — Total liabilities measured at fair value $ — $ $ $ September 30, 2015 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ $ — $ — $ Marketable securities — — Current derivative assets — — Noncurrent derivative assets — — Marketable securities in rabbi trust — — Total assets measured at fair value $ $ $ — $ Liabilities Current derivative liabilities $ — $ $ — $ Noncurrent derivative liabilities — — Current contingent consideration to seller of DTECH — — Noncurrent contingent consideration to seller of DTECH — — Total liabilities measured at fair value $ — $ $ $ We carry certain financial instruments, including accounts receivable, short-term borrowings, 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): December 31, September 30, 2015 2015 Fair value $ $ Carrying value $ $

Financing Arrangements

Financing Arrangements	3 Months Ended
	Dec. 31, 2015
Financing Arrangements
Financing Arrangements	Note 6 — Financing Arrangements 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, on July 17, 2015 we issued senior unsecured notes in an aggregate principal amount of $25.0 million. These additional notes will also mature on March 12, 2025 and bear an interest rate of 3.70%. All other terms, including the principal and interest payment dates are the same as the notes issued in March 2013. As of December 31, 2015 we had a committed five-year revolving credit agreement (Revolving Credit Agreement), expiring in May 2017, with a group of financial institutions in the amount of $200.0 million. The available line of credit is reduced by any letters of credit issued under the Revolving Credit Agreement. As of December 31, 2015, there were borrowings totaling $110.0 million under this agreement and there were letters of credit outstanding totaling $18.2 million, which reduced the available line of credit to $71.8 million. Borrowings under the agreement bear a variable rate of interest which is calculated based upon the U.S. dollar LIBOR rate plus a contractually defined credit spread that is based upon the tenor of the specific borrowing. At December 31, 2015 the weighted average interest rate on outstanding borrowings under the Revolving Credit Agreement was 1.9%. 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 December 31, 2015 there were letters of credit outstanding under this agreement of $62.8 million. Restricted cash at December 31, 2015 of $69.3 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 $62.8 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. We maintain a cash account with a bank that grants a first-ranking fixed charge over the account balance in favor of a customer in the in the United Kingdom. The account is required to secure the customer’s interest in cash deposited in the account to fund our activities related to our performance under a fare collection services contract. The balance in the account as of December 31, 2015 was $2.4 million and is classified as restricted cash in our December 31, 2015 Condensed Consolidated Balance Sheet. As of December 31, 2015, we had letters of credit and bank guarantees outstanding totaling $76.7 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 $16.9 million as of December 31, 2015, which primarily guarantee our payment of certain self-insured liabilities. We have never had a successful 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 $0.3 million) and $3.0 million Australian dollars (equivalent to approximately $2.2 million) to help meet the short- term working capital requirements of our subsidiaries in those countries. At December 31, 2015, 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 December 31, 2015, these agreements restrict such distributions to shareholders to a maximum of $36.4 million in the current fiscal year of 2016. 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 $8.4 million and $8.8 million as of December 31, 2015 and September 30, 2015, respectively. On February 2, 2016, Cubic and the group of financial institutions increased the revolving line of credit available under the Revolving Credit Agreement to $400.0 million and we borrowed $150.0 million in order to finance the purchase of GATR. The Revolving Credit Agreement bears a variable rate of interest and terminates on May 8, 2017. Also on February 2, 2016 we revised the note purchase agreement pursuant to which we previously issued $125.0 million of unsecured notes above and on February 2, 2016 we issued an additional $75.0 million of unsecured notes bearing interest at 3.93%, principal and interest due through 2026. All other terms are the same as those for the notes issued in March 2013. In connection with these financings, certain debt covenants definitions and limitations were modified to increase our leverage capacity.

Pension Plans

Pension Plans	3 Months Ended
	Dec. 31, 2015
Pension Plans
Pension Plans	Note 7 — Pension Plans The components of net periodic pension cost (benefit) are as follows (in thousands): Three Months Ended December 31, 2015 2014 Service cost $ $ Interest cost Expected return on plan assets ) ) Amortization of actuarial loss Administrative expenses Net pension benefit $ ) $ )

Stockholders' Equity

Stockholders' Equity	3 Months Ended
	Dec. 31, 2015
Stockholders' Equity
Stockholders' Equity	Note 8 - 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 December 31, 2015, the Compensation Committee has granted 700,247 RSU’s with time-based vesting and 661,218 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 performs against scalable targets over the performance periods will determine the percentage of the RSUs that will ultimately vest. Through December 31, 2015, Cubic has granted 1,361,465 restricted stock units of which 346,247 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 December 31, 2015, 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 440,407. The following table summarizes our RSU activity: Unvested Restricted Stock Units Number of Shares Weighted-Average Grant-Date Fair Value Unvested at September 30, 2015 $ Granted Vested ) Forfeited ) Unvested at December 31, 2015 $

Stock-Based Compensation

Stock-Based Compensation	3 Months Ended
	Dec. 31, 2015
Stock-Based Compensation
Stock-Based Compensation	Note 9 - Stock-Based Compensation We recorded non-cash compensation expense related to stock-based awards for the three-month period ended December 31, 2015 and 2014 as follows (in thousands): Three Months Ended December 31, 2015 2014 Cost of sales $ $ Selling, general and administrative $ $ As of December 31, 2015, there was $35.8 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 $20.6 million. This amount is expected to be recognized over a weighted-average period of 1.6 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 December 31, 2015. 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.

Income Taxes

Income Taxes	3 Months Ended
	Dec. 31, 2015
Income Taxes
Income Taxes	Note 10 — Income Taxes Our effective tax rate for the three months ended December 31, 2015 was 39% as compared to 68% for the year ended September 30, 2015. The effective tax rate for the three months ended December 31, 2015 is lower than the prior full year effective tax rate primarily as a result of the reinstatement of the U.S. federal research and development credit during the first quarter of fiscal 2016 and the impact of recording a valuation allowance against US deferred taxes during the prior fiscal year . The amount of net unrecognized tax benefits was $7.6 million as of December 31, 2015 and $7.3 million as of September 30, 2015, exclusive of interest and penalties. The increase in net unrecognized tax benefits was primarily related to the reinstatement of the U.S. federal research and development credit during the first quarter of fiscal 2016. At December 31, 2015, the amount of net unrecognized tax benefits from permanent tax adjustments that, if recognized, would favorably impact the effective rate was $4.8 million. During the next 12 months, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and international, could be reached with respect to approximately $3.7 million of the net unrecognized tax benefits depending on the timing of examinations and expiration of statute of limitations, either because our tax positions are sustained or because we agree to their disallowance and pay the related income tax. On October 1, 2015, we adopted FASB ASU No. 2015-17, “Balance Sheet Classification of Deferred Taxes” on a prospective basis. This ASU requires that deferred tax assets and liabilities be classified as non-current in a statement of financial position. Adoption of this ASU resulted in a reclassification of our net deferred tax assets and liabilities to the net non-current deferred tax asset in our Condensed Consolidated Balance Sheet as of December 31, 2015. No prior periods were retrospectively adjusted. We are subject to ongoing audits from various taxing authorities in the jurisdictions in which we do business. As of December 31, 2015, the years open under the statute of limitations in significant jurisdictions include fiscal years 2012-2015 in the U.S. We believe we have adequately provided for uncertain tax issues that have not yet been resolved with federal, state and foreign tax authorities. The Company evaluated its net deferred income taxes, which included an assessment of the cumulative income or loss over the prior-three year period and future periods, to determine if a valuation allowance is required. After considering its recent history of U.S. losses, the Company recorded a valuation allowance on its net U.S. deferred tax assets, with a corresponding charge to its income tax provision of $35.8 million and $0.4 million during fiscal year 2015 and first quarter of fiscal year 2016, respectively. As of December 31, 2015, the Company maintained a valuation allowance against its U.S. deferred tax assets as realization of such assets does not meet the more-likely-than-not threshold required under accounting guidelines. The Company will continue to assess the need for a valuation allowance on the deferred tax assets by evaluating positive and negative evidence that may exist. Through December 31, 2015, a total valuation allowance of $55.0 million has been established for U.S. net deferred tax assets, certain foreign operating losses and other foreign assets. If sufficient positive evidence arises in the future, such as a sustained return to profitability in the U.S., any existing valuation allowance could be reversed as appropriate, decreasing income tax expense in the period that such conclusion is reached. Until the Company re-establishes a pattern of continuing profitability in the U.S. tax jurisdiction, in accordance with the applicable accounting guidance, U.S. income tax expense or benefit related to the recognition of deferred tax assets in the condensed consolidated statement of operations for future periods will be offset by decreases or increases in the valuation allowance with no net effect on the consolidated condensed statement of operations.

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities	3 Months Ended
	Dec. 31, 2015
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 for periods typically up to three years. 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 loss 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 Condensed 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 December 31, 2015 and September 30, 2015 (in thousands): Notional Principal December 31, September 30, 2015 2015 Instruments designated as accounting hedges: Foreign currency forwards $ $ Instruments not designated as accounting hedges: Foreign currency forwards $ $ Included in the amounts not designated as accounting hedges above at December 31, 2015 and September 30, 2015 are foreign currency forwards with notional principal amounts of $117.0 million and $117.8 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 periods ended December 31, 2015 and September 30, 2015. Although the table above reflects the notional principal amounts of the Company’s foreign exchange instruments, it does not reflect the gains or losses associated with the exposures and transactions that the 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 December 31, 2015 or September 30, 2015. The table below presents the fair value of our derivative financial instruments that qualify for hedge accounting as well as their classification in the Condensed Consolidated Balance Sheets as of December 31, 2015 and September 30, 2015 (in thousands): Fair Value December 31, September 30, Balance Sheet Location 2015 2015 Asset derivatives: Foreign currency forwards Other current assets $ $ Foreign currency forwards Other noncurrent assets $ $ Liability derivatives: Foreign currency forwards Other current liabilities $ $ Foreign currency forwards Other noncurrent liabilities Total $ $ The tables below present gains and losses recognized in other comprehensive loss for the three months ended December 31, 2015 and 2014 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): Three Months Ended Three Months Ended December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014 Derivative Type Gains (losses) recognized in OCI Gains (losses) reclassified into earnings - Effective Portion Gains (losses) recognized in OCI Gains (losses) reclassified into earnings - Effective Portion Location of gain (loss) Gains (losses) recognized - Ineffective Portion and amount excluded from effectiveness testing Foreign currency forwards $ ) $ $ $ Other income/(expense), net $ ) $ — 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 three months ended December 31, 2015 and 2014. The amount of estimated unrealized net gains from cash flow hedges which are expected to be reclassified to earnings in the next twelve months is $0.3 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.

Segment Information

Segment Information	3 Months Ended
	Dec. 31, 2015
Segment Information
Segment Information	Note 12 — Segment Information Business segment financial data is as follows (in millions): Three Months Ended December 31, 2015 2014 Sales: Cubic Transportation Systems $ $ Cubic Global Defense Systems Cubic Global Defense Services Total sales $ $ Operating income (loss): Cubic Transportation Systems $ $ Cubic Global Defense Systems ) ) Cubic Global Defense Services — Unallocated corporate expenses and other ) ) Total operating income $ ) $ Depreciation and amortization: Cubic Transportation Systems $ $ Cubic Global Defense Systems Cubic Global Defense Services Other Total depreciation and amortization $ $ Unallocated corporate expenses for the three months ended December 31, 2015 and 2014, include expense related to the development of our ERP system of $5.3 million and $0.3 million, respectively, for costs that did not meet the requirements for capitalization. Changes in estimates on contracts for which revenue is recognized using the cost-to-cost-percentage-of-completion method decreased operating income by $2.4 million and $10.8 million for the three months ended December 31, 2015 and 2014, respectively. These adjustments decreased net income by $1.5 million ($0.06 per share) and $6.0 million ($0.22 per share) for the three months ended December 31, 2015 and 2014, respectively.

Legal Matters

Legal Matters	3 Months Ended
	Dec. 31, 2015
Legal Matters
Legal Matters	Note 13 — Legal Matters 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 were seeking to have the case certified as a class action. Plaintiffs variously claimed, 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 settled these lawsuits for a nominal amount in January 2016. In October 2014, a lawsuit was filed in the United States District Court, Northern District of Illinois against us and one of our transit customers 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.

Restructuring Costs

Restructuring Costs	3 Months Ended
	Dec. 31, 2015
Restructuring Costs
Restructuring Costs	Note 14 — Restructuring Costs In February 2015, we implemented a plan to restructure our defense services and defense systems businesses into a single business called Cubic Global Defense to better align our defense business organizational structure with customer requirements, increase operational efficiencies and improve collaboration and innovation across the company. The total costs of the restructuring plan are not expected to be significantly greater than the charges incurred to date. Restructuring charges (credits) incurred by business segment were as follows (in millions): Three Months Ended December 31, 2015 2014 Restructuring costs: Cubic Transportation Systems $ $ ) Cubic Global Defense Systems ) Cubic Global Defense Services — Unallocated corporate expenses and other — — Total restructuring costs $ ) $ ) The following table presents a rollforward of our restructuring liability as of December 31, 2015, which is included within accrued compensation and other current liabilities within our Condensed Consolidated Balance Sheets (in millions): Restructuring Liability Employee Separation Liability as of September 30, 2015 $ Reversal of previously recorded severance liability ) Cash payments ) Liability as of December 31, 2015 $ Certain restructuring costs are based upon estimates. Actual amounts paid may ultimately differ from these estimates. If additional costs are incurred or recognized amounts exceed costs, such changes in estimates will be recognized when incurred.

Basis for Presentation (Policie

Basis for Presentation (Policies)	3 Months Ended
	Dec. 31, 2015
Basis for Presentation
Recent Accounting Pronouncements	Recent Accounting Pronouncements 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 2019 or we may adopt ASU 2014-09 early in the first quarter of 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 opening retained earnings balance in the year of adoption. We do not intend to adopt the standard early and 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. ASU 2014-15 will be effective for the Company for the year ended September 30, 2017 and for interim reporting periods thereafter. Early adoption is permitted for financial statements that have not been previously issued, but we have not yet adopted this standard. This adoption is not expected to have a significant impact on our financial statements. In February 2015, the FASB issued ASU 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis . The new standard modifies current guidance on consolidation under the variable interest model and the voting model. We adopted ASU 2015-02 on October 1, 2015 with no significant impact on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-05, Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement. ASU 2015-05 provides guidance to customers about whether a cloud computing arrangement includes a software license. If a cloud computing arrangement includes a software license, then the customer should account for the software license element of the arrangement consistent with the acquisition of other software licenses. If a cloud computing arrangement does not include a software license, the customer should account for the arrangement as a service contract. ASU 2015-05 will be effective for the Company beginning on October 1, 2016, with early adoption permitted. We are currently assessing the impact that adopting this new accounting guidance will have on our consolidated financial statements. In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs which requires that all costs incurred to issue debt be presented in the balance sheet as a direct reduction from the carrying value of the debt, similar to the presentation of debt discounts. ASU 2015-03 is effective for us on October 1, 2016 with early adoption permitted. We do not expect that the adoption of this new accounting guidance will have a material impact on our consolidated financial statements. In September 2015, the FASB issued ASU 2015-16, Simplifying the Accounting for Measurement-Period Adjustments in business combinations. This standard eliminates the need for an acquirer in a business combination to recognize measurement-period adjustments retrospectively, but instead measurement-period adjustments are to be recorded during the period in which the amount of the adjustment is determined, including the effect on earnings of any amount that would have been recorded in a previous period had the amount been recorded at the acquisition date. This standard is effective for fiscal years, and interim periods within those fiscal years, beginning after Dec. 15, 2015, with early adoption permitted. Accordingly, we will be required to adopt this standard in the first quarter of fiscal year 2017. We are currently evaluating the impact this guidance will have on our financial statements and related disclosures. In November 2015, the FASB issued ASU 2015-17, Balance Sheet Classification of Deferred Taxes which removes the requirement to separate deferred tax liabilities and assets into current and noncurrent amounts and instead requires all such amounts be classified as noncurrent on the balance sheet. We adopted ASU 2015-17 prospectively on October 1, 2015 and reclassified the current portion of our net deferred tax assets and liabilities to net noncurrent deferred tax assets and liabilities. No prior periods were retrospectively adjusted. In January 2016, the FASB issued Accounting Standards Update ASU 2016-01, Financial Instruments — Overall (Subtopic 825-10) which updates certain aspects of recognition, measurement, presentation and disclosure of financial instruments. ASU 2016-01 will be effective for us beginning October 1, 2018 and early adoption is not permitted. We are currently evaluating the impact this guidance will have on our financial statements and related disclosures.

Acquisitions (Tables)

Acquisitions (Tables)	3 Months Ended
	Dec. 31, 2015
Acquisitions
Schedule of changes in the carrying amount of goodwill	Changes in goodwill for the three months ended December 31, 2015 were as follows (in millions): Cubic Global Cubic Global Transportation Defense Defense Systems Systems Services Total Balances at September 30, 2015 $ $ $ $ Acquisitions — — Foreign currency exchange rate changes ) — ) Balances at December 31, 2015 $ $ $ $
Schedule of unaudited pro forma information	The following unaudited pro forma information presents our consolidated results of operations as if TeraLogics, H4 Global and DTECH had been included in our consolidated results since October 1, 2014 (in millions): Three Months Ended December 31, 2015 2014 Net sales $ $ Net income attributable to Cubic $ ) $
TeraLogics
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 $ Backlog Software Non compete agreements Accounts receivable Accounts payable and accrued expenses ) Other net assets acquired (liabilities assumed) ) Net identifiable assets acquired Goodwill Net assets acquired $
Schedule of estimated amortization expense related to acquisition	The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of TeraLogics for future periods is as follows (in millions): Year Ended September 30, 2016 $ 2017 2018 2019 2020 Thereafter
DTECH
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 $ Non compete agreements Backlog Cash Accounts receivable Inventory Warranty obligation ) Tax liabilities ) Accounts payable and accrued expenses ) Other net assets acquired Net identifiable assets acquired Goodwill Net assets acquired $
Schedule of estimated amortization expense related to acquisition	The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of DTECH for future periods is as follows (in millions): Year Ended September 30, 2016 $ 2017 2018 2019 2020 Thereafter

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	3 Months Ended
	Dec. 31, 2015
Net Income (Loss) Per Share
Schedule of computation of basic and diluted EPS	Basic and diluted EPS are computed as follows (amounts in thousands, except per share data). Three Months Ended December 31, 2015 2014 Net income (loss) attributable to Cubic $ ) $ Weighted average shares - basic Effect of dilutive securities — Weighted average shares - diluted Net income (loss) per share attributable to Cubic, basic $ ) $ Effect of dilutive securities — — Net income (loss) per share attributable to Cubic, diluted $ ) $

Balance Sheet Details (Tables)

Balance Sheet Details (Tables)	3 Months Ended
	Dec. 31, 2015
Balance Sheet Details
Schedule of components of accounts receivable	The components of accounts receivable are as follows (in thousands): December 31, September 30, 2015 2015 Trade and other receivables $ $ Long-term contracts: Billed Unbilled Allowance for doubtful accounts ) ) Total accounts receivable Less estimated amounts not currently due ) ) Current accounts receivable $ $
Components of inventories	Inventories consist of the following (in thousands): December 31, September 30, 2015 2015 Finished products $ $ Work in process and inventoried costs under long-term contracts Materials and purchased parts Customer advances ) ) Net inventories $ $

Fair Value of Financial Instr24

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Dec. 31, 2015
Fair Value of Financial Instruments
Summary of change in fair value of liability	As of December 31, 2015, t he following table summarizes the change in fair value of our Level 3 DTECH contingent consideration liability (in thousands): Balance as of September 30, 2015 $ Cash paid to seller ) Total remeasurement recognized in earnings Balance as of December 31, 2015 $
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): December 31, 2015 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ $ — $ — $ Marketable securities — — Current derivative assets — — Noncurrent derivative assets — — Marketable securities in rabbi trust — — Total assets measured at fair value $ $ $ — $ Liabilities Current derivative liabilities $ — $ $ — $ Noncurrent derivative liabilities — — Noncurrent contingent consideration to seller of Teralogics - contract extensions — — Noncurrent contingent consideration to seller of Teralogics - revenue targets — — Noncurrent contingent consideration to seller of H4 Global — — Current contingent consideration to seller of DTECH — — Noncurrent contingent consideration to seller of DTECH — — Total liabilities measured at fair value $ — $ $ $ September 30, 2015 Level 1 Level 2 Level 3 Total Assets Cash equivalents $ $ — $ — $ Marketable securities — — Current derivative assets — — Noncurrent derivative assets — — Marketable securities in rabbi trust — — Total assets measured at fair value $ $ $ — $ Liabilities Current derivative liabilities $ — $ $ — $ Noncurrent derivative liabilities — — Current contingent consideration to seller of DTECH — — Noncurrent contingent consideration to seller of DTECH — — Total liabilities measured at fair value $ — $ $ $
Schedule of estimated fair value and carrying value of our long-term debt	The following table presents the estimated fair value and carrying value of our long-term debt (in millions): December 31, September 30, 2015 2015 Fair value $ $ Carrying value $ $

Pension Plans (Tables)

Pension Plans (Tables)	3 Months Ended
	Dec. 31, 2015
Pension Plans
Components of net periodic pension cost (benefit)	The components of net periodic pension cost (benefit) are as follows (in thousands): Three Months Ended December 31, 2015 2014 Service cost $ $ Interest cost Expected return on plan assets ) ) Amortization of actuarial loss Administrative expenses Net pension benefit $ ) $ )

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	3 Months Ended
	Dec. 31, 2015
Stockholders' Equity
Summary of RSU activity	The following table summarizes our RSU activity: Unvested Restricted Stock Units Number of Shares Weighted-Average Grant-Date Fair Value Unvested at September 30, 2015 $ Granted Vested ) Forfeited ) Unvested at December 31, 2015 $

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	3 Months Ended
	Dec. 31, 2015
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 for the three-month period ended December 31, 2015 and 2014 as follows (in thousands): Three Months Ended December 31, 2015 2014 Cost of sales $ $ Selling, general and administrative $ $

Derivative Instruments and He28

Derivative Instruments and Hedging Activities (Tables)	3 Months Ended
	Dec. 31, 2015
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 December 31, 2015 and September 30, 2015 (in thousands): Notional Principal December 31, September 30, 2015 2015 Instruments designated as accounting hedges: Foreign currency forwards $ $ Instruments not designated as accounting hedges: Foreign currency forwards $ $
Schedule of fair value of derivative financial instruments	The table below presents the fair value of our derivative financial instruments that qualify for hedge accounting as well as their classification in the Condensed Consolidated Balance Sheets as of December 31, 2015 and September 30, 2015 (in thousands): Fair Value December 31, September 30, Balance Sheet Location 2015 2015 Asset derivatives: Foreign currency forwards Other current assets $ $ Foreign currency forwards Other noncurrent assets $ $ Liability derivatives: Foreign currency forwards Other current liabilities $ $ Foreign currency forwards Other noncurrent liabilities Total $ $
Schedule of gains and losses recognized in other comprehensive loss on derivative financial instruments designated as cash flow hedges	The tables below present gains and losses recognized in other comprehensive loss for the three months ended December 31, 2015 and 2014 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): Three Months Ended Three Months Ended December 31, 2015 December 31, 2014 December 31, 2015 December 31, 2014 Derivative Type Gains (losses) recognized in OCI Gains (losses) reclassified into earnings - Effective Portion Gains (losses) recognized in OCI Gains (losses) reclassified into earnings - Effective Portion Location of gain (loss) Gains (losses) recognized - Ineffective Portion and amount excluded from effectiveness testing Foreign currency forwards $ ) $ $ $ Other income/(expense), net $ ) $ —

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Dec. 31, 2015
Segment Information
Schedule of business segment financial data	Business segment financial data is as follows (in millions): Three Months Ended December 31, 2015 2014 Sales: Cubic Transportation Systems $ $ Cubic Global Defense Systems Cubic Global Defense Services Total sales $ $ Operating income (loss): Cubic Transportation Systems $ $ Cubic Global Defense Systems ) ) Cubic Global Defense Services — Unallocated corporate expenses and other ) ) Total operating income $ ) $ Depreciation and amortization: Cubic Transportation Systems $ $ Cubic Global Defense Systems Cubic Global Defense Services Other Total depreciation and amortization $ $

Restructuring Costs (Tables)

Restructuring Costs (Tables)	3 Months Ended
	Dec. 31, 2015
Restructuring Costs
Schedule Of Restructuring Charges	Restructuring charges (credits) incurred by business segment were as follows (in millions): Three Months Ended December 31, 2015 2014 Restructuring costs: Cubic Transportation Systems $ $ ) Cubic Global Defense Systems ) Cubic Global Defense Services — Unallocated corporate expenses and other — — Total restructuring costs $ ) $ )
Summary of the activity relating to the restructuring liability and employee separation expenses	The following table presents a rollforward of our restructuring liability as of December 31, 2015, which is included within accrued compensation and other current liabilities within our Condensed Consolidated Balance Sheets (in millions): Restructuring Liability Employee Separation Liability as of September 30, 2015 $ Reversal of previously recorded severance liability ) Cash payments ) Liability as of December 31, 2015 $

Acquisitions (Details)

Acquisitions (Details) - USD ($) $ in Thousands	Dec. 21, 2015	Nov. 04, 2015	Dec. 16, 2014	Feb. 29, 2016	Dec. 31, 2015	Dec. 31, 2015	Dec. 31, 2014	Dec. 31, 2015	Dec. 21, 2015	Dec. 16, 2014
Acquisitions
Net sales						$ 313,813	$ 318,488
Net loss after taxes						5,414	(5,162)
Purchase price allocation
Goodwill					$ 257,255	237,899		$ 257,255
Changes in the carrying amount of goodwill
Balance at the beginning of the period						237,899
Balance at the end of the period					257,255	257,255
Unaudited pro forma information
Net sales						316,500	331,200
Net income attributable to Cubic						(5,400)	7,000
Adjustments made for transaction expenses						0
Cubic Transportation Systems
Acquisitions
Net sales						125,800	131,500
Purchase price allocation
Goodwill					54,800	56,000		54,800
Changes in the carrying amount of goodwill
Balance at the beginning of the period						56,000
Foreign currency exchange rate changes						(1,200)
Balance at the end of the period					54,800	54,800
Cubic Global Defense Services
Acquisitions
Net sales						92,100	89,000
Cubic Global Defense Systems
Acquisitions
Net sales						95,900	98,000
TeraLogics
Acquisitions
Transaction and acquisition related costs						400
Compensation expense paid						1,300
Net loss after taxes related to acquisition						(1,500)
Contingent Amount	$ 5,100
Fair value of consideration transferred	9,000
Cash consideration paid	28,800
Purchase price allocation
Accounts receivable									$ 1,300
Accounts payable and accrued expenses									(500)
Other net liabilities assumed									(200)
Net identifiable assets acquired									15,700
Goodwill	$ 18,200								18,200
Net assets acquired									33,900
Weighted average useful life of intangible assets	3 years
Estimated amortization expense related to the intangible assets
2,016									3,100
2,017									3,500
2,018									2,800
2,019									2,100
2,020									1,400
Thereafter									2,200
Changes in the carrying amount of goodwill
Balance at the end of the period	$ 18,200
TeraLogics | Maximum
Acquisitions
Additional cash consideration accelerated if certain event occurs	$ 6,000
Fair value of the potential customer									3,000
TeraLogics | Customer relationships
Purchase price allocation
Amortizable intangible assets									6,800
TeraLogics | Non-compete agreements
Purchase price allocation
Amortizable intangible assets									100
TeraLogics | Backlog
Purchase price allocation
Amortizable intangible assets									5,500
TeraLogics | Software.
Purchase price allocation
Amortizable intangible assets									$ 2,700
H4 Global
Acquisitions
Transaction and acquisition related costs						$ 100
Contingent Amount		$ 1,600
Fair value of consideration transferred		$ 2,500
Contingent consideration paid based upon contracts entered period		5 years				5 years
Cash consideration paid		$ 900
Purchase price allocation
Goodwill		2,500
Changes in the carrying amount of goodwill
Balance at the end of the period		2,500
H4 Global | Maximum
Acquisitions
Contingent consideration paid based upon the value of contracts entered		$ 4,100
DTECH
Acquisitions
Net sales						$ 7,800	1,000
Net loss after taxes						1,300	800
Transaction and acquisition related costs							$ 800
Fair value of contingent consideration						800
Cost of acquisition net			$ 99,500
Fair value of consideration transferred			99,400
Contingent consideration paid based upon the value of contracts entered					5,000
Additional cash consideration accelerated if certain event occurs			4,700
Fair value of the potential customer										$ 4,300
Estimated fair value of the liability for contingent consideration								3,300		3,900
Cumulative change in fair value of contingent consideration recognized as expense						800
Cash consideration paid						96,300
Fair value of additional cash consideration due to the seller, including the Holdback Consideration and contingent consideration								7,600
Purchase price allocation
Cash										900
Accounts receivable										5,400
Inventory										4,200
Warranty obligation										(400)
Tax liabilities										(3,300)
Accounts payable and accrued expenses										(3,400)
Other net assets acquired										200
Net identifiable assets acquired										41,500
Goodwill			57,900		257,300	$ 237,900		257,300		57,900
Net assets acquired										99,400
Weighted average useful life of intangible assets						2 years
Estimated amortization expense related to the intangible assets
2,016										8,000
2,017										6,800
2,018										5,500
2,019										4,100
2,020										2,800
Thereafter										1,500
Changes in the carrying amount of goodwill
Balance at the beginning of the period						$ 237,900
Acquisitions						20,300
Foreign currency exchange rate changes						(900)
Balance at the end of the period			57,900		257,300	257,300
DTECH | Maximum
Acquisitions
Contingent Amount			$ 15,000
DTECH | Cubic Global Defense Services
Purchase price allocation
Goodwill					108,100	87,500		108,100
Changes in the carrying amount of goodwill
Balance at the beginning of the period						87,500
Acquisitions						20,300
Foreign currency exchange rate changes						300
Balance at the end of the period					108,100	108,100
DTECH | Cubic Global Defense Systems
Purchase price allocation
Goodwill					94,400	94,400		$ 94,400
Changes in the carrying amount of goodwill
Balance at the beginning of the period						94,400
Balance at the end of the period					$ 94,400	$ 94,400
DTECH | Customer relationships
Purchase price allocation
Amortizable intangible assets										35,100
DTECH | Non-compete agreements
Purchase price allocation
Amortizable intangible assets										700
DTECH | Backlog
Purchase price allocation
Amortizable intangible assets										$ 2,100
GATR | Subsequent event
Acquisitions
Fair value of consideration transferred				$ 225,000
Estimated fair value of the liability for contingent consideration				$ 7,500

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Net income (loss) attributable to Cubic	$ (5,414)	$ 5,152
Weighted average shares - basic	26,964	26,860
Effect of dilutive securities (in shares)		25
Weighted average shares - diluted	26,964	26,885
Net income (loss) per share, basic (in dollars per share)	$ (0.20)	$ 0.19
Net income (loss) per share attributable to Cubic, diluted (in dollars per share)	$ (0.20)	$ 0.19
Anti-dilutive employee share-based awards		0
RSUs
Anti-dilutive employee share-based awards	800

Balance Sheet Details (Details)

Balance Sheet Details (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014	Sep. 30, 2015
Marketable Securities
Realized or unrealized gains or losses on marketable securities	$ 0
Accounts Receivable
Trade and other receivables	9,791		$ 12,812
Long-term contracts:
Billed	118,226		127,462
Unbilled	266,843		255,639
Allowance for doubtful accounts	(179)		(179)
Total accounts receivable	394,681		395,734
Less estimated amounts not currently due	(42,080)		(36,809)
Current accounts receivable	$ 352,601		358,925
Period that receivables will not be collected within to be classified as not currently due	1 year
Inventories
Finished products	$ 1,043		644
Work in process and inventoried costs under long-term contracts	75,555		66,293
Materials and purchased parts	3,359		2,733
Customer advances	(5,823)		(5,970)
Net inventories	74,134		63,700
Costs incurred outside the scope of work or in advance of a contract award	4,100		1,900
Long-term Capitalized Costs
Long-term capitalized costs being recognized as cost of sales	2,000	$ 1,800
Deferred Compensation Plan
Deferred compensation	10,700		9,900
Carrying value of Rabbi trust to fund deferred compensation liabilities	2,900		2,900
Carrying value of insurance contracts	2,100		1,900
Carrying value of marketable securities	800		1,000
Software
Capitalized Software
Amortization expense	0
Capitalized software, net	23,300		$ 16,000
Addition to capitalized software expenses	$ 5,300	$ 300
Software | Maximum
Capitalized Software
Estimated useful life	P7Y
Software | Minimum
Capitalized Software
Estimated useful life	P3Y

Fair Value of Financial Instr34

Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Nov. 04, 2015	Dec. 31, 2015	Dec. 31, 2015	Sep. 30, 2015
Assets and liabilities measured at fair value on a recurring basis
Contingent consideration payments related to acquisitions of businesses			$ (1,679)
TeraLogics
Assets and liabilities measured at fair value on a recurring basis
Change in fair value of contingent consideration since the date of the acquisition			$ 0
Debt instruments
Volatility earning metrics			18.00%
H4 Global
Assets and liabilities measured at fair value on a recurring basis
Contingent consideration paid based upon contracts entered period	5 years		5 years
Change in fair value of contingent consideration since the date of the acquisition			$ 0
DTECH
Assets and liabilities measured at fair value on a recurring basis
Change in fair value of contingent consideration since the date of the acquisition			$ 0
Liabilities
Noncurrent contingent consideration to seller of Teralogics - contract extensions		$ 5,000
Debt instruments
Volatility earning metrics			20.00%
Level 2
Debt instruments
Fair Value		122,400	$ 122,400	$ 125,800
Carrying value		126,500	126,500	126,700
Level 3 | DTECH
Assets and liabilities measured at fair value on a recurring basis
Balance at the Beginning period			7,507
Contingent consideration payments related to acquisitions of businesses			(5,000)
Total remeasurement recognized in earnings			809
Balance at the ending period		3,316	3,316
Assets and liabilities measured at fair value
Assets
Cash equivalents		65,035	65,035	68,194
Marketable securities		23,612	23,612	30,533
Current derivative assets		18,966	18,966	11,543
Noncurrent derivative assets		3,324	3,324	13,909
Marketable securities in rabbi trust		803	803	992
Total assets measured at fair value		111,740	111,740	125,171
Liabilities
Current derivative liabilities		18,432	18,432	9,370
Noncurrent derivative liabilities		3,355	3,355	13,909
Total liabilities measured at fair value		31,571	31,571	30,786
Assets and liabilities measured at fair value | TeraLogics
Liabilities
Noncurrent contingent consideration to seller of Teralogics - contract extensions			1,800
Noncurrent contingent consideration to seller		3,100	3,100
Assets and liabilities measured at fair value | H4 Global
Liabilities
Noncurrent contingent consideration to seller		1,568	1,568
Assets and liabilities measured at fair value | DTECH
Liabilities
Noncurrent contingent consideration to seller		945	945	2,507
Current contingent consideration to seller of DTECH		2,371	2,371	5,000
Assets and liabilities measured at fair value | Level 1
Assets
Cash equivalents		65,035	65,035	68,194
Marketable securities in rabbi trust		803	803	992
Total assets measured at fair value		65,838	65,838	69,186
Assets and liabilities measured at fair value | Level 2
Assets
Marketable securities		23,612	23,612	30,533
Current derivative assets		18,966	18,966	11,543
Noncurrent derivative assets		3,324	3,324	13,909
Total assets measured at fair value		45,902	45,902	55,985
Liabilities
Current derivative liabilities		18,432	18,432	9,370
Noncurrent derivative liabilities		3,355	3,355	13,909
Total liabilities measured at fair value		21,787	21,787	23,279
Assets and liabilities measured at fair value | Level 3
Liabilities
Total liabilities measured at fair value		9,784	9,784	7,507
Assets and liabilities measured at fair value | Level 3 | TeraLogics
Liabilities
Noncurrent contingent consideration to seller of Teralogics - contract extensions			1,800
Noncurrent contingent consideration to seller		3,100	3,100
Assets and liabilities measured at fair value | Level 3 | H4 Global
Liabilities
Noncurrent contingent consideration to seller		1,568	1,568
Assets and liabilities measured at fair value | Level 3 | DTECH
Liabilities
Noncurrent contingent consideration to seller		945	945	2,507
Current contingent consideration to seller of DTECH		$ 2,371	$ 2,371	$ 5,000

Financing Arrangements (Details

Financing Arrangements (Details) $ in Thousands, NZD in Millions, AUD in Millions	Feb. 02, 2016USD ($)	Jul. 17, 2015USD ($)	Mar. 31, 2013USD ($)	Dec. 31, 2015USD ($)	Dec. 31, 2015NZD	Dec. 31, 2015AUD	Dec. 31, 2015USD ($)	Sep. 30, 2015USD ($)
Financial arrangement
Cash on deposit as collateral							$ 2,400
Short term borrowings
Restricted cash							71,657	$ 69,245
Self-insurance liabilities							8,400	$ 8,800
Maximum amount of distributions to shareholders as restricted				$ 36,400
Letters of credit primarily for self-insured liabilities
Short term borrowings
Letters of Credit and bank guarantees outstanding							16,900
Fair value of instruments							0
Letters of credit and bank guarantees
Short term borrowings
Letters of Credit and bank guarantees outstanding							76,700
New Zealand
Short term borrowings
Maximum borrowing capacity under credit agreement					NZD 0.5		300
Borrowings outstanding							0
Australia
Short term borrowings
Maximum borrowing capacity under credit agreement						AUD 3	2,200
Borrowings outstanding							$ 0
Senior unsecured notes
Financial arrangement
Interest rate (as a percent)		3.70%	3.35%
Additional senior notes principal amount agreed to be issued		$ 25,000	$ 100,000
Senior unsecured notes | Subsequent event
Short term borrowings
Principal amount of debt instrument	$ 125,000
3.93% unsecured notes due through 2026 | Subsequent event
Financial arrangement
Interest rate (as a percent)	3.93%
Short term borrowings
Principal amount of debt instrument	$ 75,000
Revolving credit agreement
Financial arrangement
Weighted average interest rate on outstanding borrowings					1.90%	1.90%	1.90%
Short term borrowings
Maximum borrowing capacity under credit agreement							$ 200,000
Term under revolving credit or letter of agreement				5 years
Borrowings outstanding							110,000
Letters of credit outstanding							18,200
Available amount under line of credit							71,800
Revolving credit agreement | Subsequent event
Short term borrowings
Maximum borrowing capacity under credit agreement	400,000
Increase in line of credit	$ 150,000
Secured letter of credit agreement
Short term borrowings
Maximum borrowing capacity under credit agreement							62,800
Letters of credit outstanding							62,800
Secured letter of credit agreement | United Kingdom
Short term borrowings
Restricted cash							$ 69,300

Pension Plans (Details)

Pension Plans (Details) - Defined Benefit Pension Plans - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Components of net periodic pension cost (benefit)
Service cost	$ 158	$ 172
Interest cost	2,261	2,332
Expected return on plan assets	(3,472)	(3,388)
Amortization of actuarial loss	413	154
Administrative expenses	41	38
Net pension benefit	$ (599)	$ (692)

Stockholders' Equity (Details)

Stockholders' Equity (Details)	3 Months Ended
	Dec. 31, 2015item$ / sharesshares
RSUs
Stockholders' Equity
Number of shares of common stock that each award holder has the contingent right to receive	1
Number of units awarded (in shares)	1,361,465
Vested awards to date	346,247
Expected awards vested (in shares)	440,407
Number of Shares
Balance unvested at the beginning of the period (in shares)	760,285
Granted (in shares)	307,452
Vested (in shares)	(116,137)
Forfeited (in shares)	(173,565)
Balance unvested at the end of the period (in shares)	778,035
Weighted Average Grant-Date Fair Value
Balance unvested at the beginning of the period (in dollars per share) | $ / shares	$ 47.24
Granted (in dollars per share) | $ / shares	45.74
Vested (in dollars per share) | $ / shares	46.77
Forfeited (in dollars per share) | $ / shares	44.47
Balance unvested at the end of the period (in dollars per share) | $ / shares	$ 47.33
Time-based RSUs
Stockholders' Equity
Number of units awarded (in shares)	700,247
Number of equal installments for vesting of stock awards | item	4
Performance-based RSUs
Stockholders' Equity
Number of units awarded (in shares)	661,218
Vesting period	3 years
Number of vesting criteria which have to be satisfied out of total vesting criteria | item	1
Number of vesting criteria | item	3

Stock-Based Compensation (Detai

Stock-Based Compensation (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Stock-Based Compensation
Non-cash compensation expense related to stock-based awards	$ 2,118	$ 1,053
Estimated forfeiture rate (as a percent)	12.50%
RSUs
Stock-Based Compensation
Unrecognized compensation cost related to unvested awards	$ 35,800
Aggregate fair value of awards	$ 20,600
Weighted-average period of recognition	1 year 7 months 6 days
RSUs | Cost of sales
Stock-Based Compensation
Non-cash compensation expense related to stock-based awards	$ 319	173
RSUs | Selling, general and administrative
Stock-Based Compensation
Non-cash compensation expense related to stock-based awards	$ 1,799	$ 880

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Dec. 31, 2015	Sep. 30, 2015
Income Taxes
Effective tax rate (as a percent)	39.00%	68.00%
Additional income tax expense	$ 0.4	$ 35.8
Unrecognized tax benefits, exclusive of interest and penalties	7.6	$ 7.3
Unrecognized tax benefits from permanent tax adjustments that, if recognized, would affect the effective rate	4.8
Estimated unrecognized tax benefits resulting from possible resolution of reviews by domestic and international taxing authorities	3.7
Deferred tax asset valuation allowance	$ 55

Derivative Instruments and He40

Derivative Instruments and Hedging Activities (Details) - Foreign currency forwards - USD ($) $ in Thousands	Dec. 31, 2015	Sep. 30, 2015
Instruments designated as accounting hedges:
Derivative Instruments and Hedging Activities
Notional principal outstanding derivative instruments	$ 189,932	$ 217,796
Not designated but designed to manage exposure:
Derivative Instruments and Hedging Activities
Notional principal outstanding derivative instruments	117,000	117,800
Instruments not designated as accounting hedges:
Derivative Instruments and Hedging Activities
Notional principal outstanding derivative instruments	$ 144,326	$ 142,820

Derivative Instruments and He41

Derivative Instruments and Hedging Activities (Details 2) - Instruments designated as accounting hedges: - USD ($) $ in Thousands	Dec. 31, 2015	Sep. 30, 2015
Derivative Instruments and Hedging Activities
Asset derivatives:	$ 22,290	$ 25,230
Liability derivatives:	21,787	23,279
Foreign currency forwards | Other current assets
Derivative Instruments and Hedging Activities
Asset derivatives:	18,966	11,321
Foreign currency forwards | Other noncurrent assets
Derivative Instruments and Hedging Activities
Asset derivatives:	3,324	13,909
Foreign currency forwards | Other current liabilities
Derivative Instruments and Hedging Activities
Liability derivatives:	18,432	9,370
Foreign currency forwards | Other noncurrent liabilities
Derivative Instruments and Hedging Activities
Liability derivatives:	$ 3,355	$ 13,909

Derivative Instruments and He42

Derivative Instruments and Hedging Activities (Details 3) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Derivative instruments and hedging activities
Estimated unrealized net gains from cash flow hedges which are expected to be reclassified into earnings in the next twelve months	$ 300
Foreign currency forwards
Derivative instruments and hedging activities
Gains (losses) recognized in OCI	(1,448)	$ 294
Gains (losses) reclassified into earnings - Effective Portion	1,490	$ 732
Foreign currency forwards | Other income/(expense), net
Derivative instruments and hedging activities
Gain (losses) recognized - Ineffective Portion and Amount excluded from effectiveness testing	$ (160)

Derivative Instruments and He43

Derivative Instruments and Hedging Activities (Details 4)	Dec. 31, 2015USD ($)
Foreign currency forwards
Derivative instruments and hedging activities
Minimum commitment amount for hedging	$ 50,000

Segment Information (Details)

Segment Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Revenue recognition
Sales	$ 313,813	$ 318,488
Operating income (loss)	(8,077)	7,179
Depreciation and amortization	8,948	8,947
Cubic Transportation Systems
Revenue recognition
Sales	125,800	131,500
Operating income (loss)	3,600	12,100
Depreciation and amortization	2,500	3,100
Cubic Global Defense Systems
Revenue recognition
Sales	95,900	98,000
Operating income (loss)	(3,400)	(2,700)
Depreciation and amortization	4,100	3,200
Cubic Global Defense Services
Revenue recognition
Sales	92,100	89,000
Operating income (loss)	200
Depreciation and amortization	2,000	2,400
Other
Revenue recognition
Depreciation and amortization	300	200
Unallocated corporate expenses and other
Revenue recognition
Operating income (loss)	$ (8,500)	$ (2,200)

Segment Information (Detail 2)

Segment Information (Detail 2) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Revenue recognition
Increase (decrease) in operating income	$ (8,077)	$ 7,179
Increase (decrease) in net income	$ (5,414)	$ 5,162
Increase (decrease) in net income per common share (in dollars per share)	$ (0.20)	$ 0.19
Unallocated corporate expenses and other
Revenue recognition
Increase (decrease) in operating income	$ (8,500)	$ (2,200)
Expense related to the development of ERP system	5,300	300
Change in estimated total costs | Adjustment
Revenue recognition
Increase (decrease) in operating income	(2,400)	(10,800)
Increase (decrease) in net income	$ (1,500)	$ (6,000)
Increase (decrease) in net income per common share (in dollars per share)	$ (0.06)	$ (0.22)

Legal Matters (Details)

Legal Matters (Details)	4 Months Ended
	Jan. 31, 2014item
Lawsuit filed in federal court against the transit customers alleging breach of contract
Legal Matters
Number of former employees alleged for loss of revenue due to inappropriate and illegal actions	1

Restructuring Costs (Details)

Restructuring Costs (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2015	Dec. 31, 2014
Restructuring plan
Restructuring costs	$ (386)	$ (148)
Cubic Transportation Systems
Restructuring plan
Restructuring costs	100	(200)
Cubic Global Defense Systems
Restructuring plan
Restructuring costs	(600)	$ 100
Cubic Global Defense Services
Restructuring plan
Restructuring costs	$ 100

Restructuring Costs (Details 2)

Restructuring Costs (Details 2) $ in Millions	3 Months Ended
	Dec. 31, 2015USD ($)
Restructuring liability
Liability at the beginning of the period	$ 1.9
Reversal of previously recorded severance liability	(0.4)
Cash payments	(0.4)
Liability at the end of the period	$ 1.1