Cubic 10-Q 6 Feb 19 2019 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Dec. 31, 2018	Jan. 23, 2019
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, 2018
Amendment Flag	false
Current Fiscal Year End Date	--09-30
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		31,150,232
Document Fiscal Year Focus	2,019
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, 2018	Dec. 31, 2017
Net sales:
Net sales	$ 305,259	$ 248,391
Costs and expenses:
Selling, general and administrative expenses	62,986	61,680
Research and development	12,012	11,977
Amortization of purchased intangibles	10,565	7,351
Restructuring costs	1,992	1,495
Total costs and expenses	305,825	260,293
Operating loss	(566)	(11,902)
Other income (expenses):
Interest and dividend income	1,234	482
Interest expense	(4,032)	(2,674)
Other income (expense), net	(4,753)	(78)
Loss from continuing operations before income taxes	(8,117)	(14,172)
Income tax (benefit) provision	2,497	(2,737)
Loss from continuing operations	(10,614)	(11,435)
Net income from discontinued operations		1,649
Net loss	(10,614)	(9,786)
Less noncontrolling interest in loss of VIE	(4,027)
Net loss attributable to Cubic	(6,587)	(9,786)
Amounts attributable to Cubic:
Net loss from continuing operations	(6,587)	(11,435)
Net income from discontinued operations		1,649
Net loss attributable to Cubic	$ (6,587)	$ (9,786)
Basic
Continuing operations attributable to Cubic (in dollars per share)	$ (0.23)	$ (0.42)
Discontinued operations (in dollars per share)		0.06
Basic earnings per share attributable to Cubic (in dollars per share)	(0.23)	(0.36)
Diluted
Continuing operations attributable to Cubic (in dollars per share)	(0.23)	(0.42)
Discontinued operations (in dollars per share)		0.06
Diluted earnings per share attributable to Cubic (in dollars per share)	$ (0.23)	$ (0.36)
Weighted average shares used in per share calculations:
Basic (in shares)	28,492	27,207
Diluted (in shares)	28,492	27,207
Products
Net sales:
Net sales	$ 182,253	$ 131,743
Costs and expenses:
Costs	125,485	91,573
Services
Net sales:
Net sales	123,006	116,648
Costs and expenses:
Costs	$ 92,785	$ 86,217

CONDENSED CONSOLIDATED STATEM_2

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
Net loss	$ (10,614)	$ (9,786)
Other comprehensive income (loss):
Foreign currency translation	(3,318)	(192)
Change in unrealized gains/losses from cash flow hedges:
Change in fair value of cash flow hedges, net of tax	1,343	28
Adjustment for net gains/losses realized and included in net income, net of tax	(24)	503
Total change in unrealized gains/losses realized from cash flow hedges, net of tax	1,319	531
Total other comprehensive income (loss)	(1,999)	339
Total comprehensive loss	(12,613)	(9,447)
Noncontrolling interest in comprehensive loss of consolidated VIE, net of tax	(4,027)
Comprehensive loss attributable to Cubic, net of tax	$ (8,586)	$ (9,447)

CONDENSED CONSOLIDATED BALANCE

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018
Current assets:
Restricted cash		$ 27,400
Accounts receivable:
Long-term contracts	$ 119,943	393,691
Allowance for doubtful accounts	(1,652)	(1,324)
Accounts receivable - net	118,291	392,367
Contract assets	320,277
Recoverable income taxes	1,321	91
Inventories	92,201	84,199
Assets held for sale	8,177	8,177
Other current assets	40,924	43,705
Total current assets	684,675	668,147
Long-term contracts receivables		6,134
Long-term contracts financing receivables		6,134
Property, plant and equipment, net	125,298	117,546
Deferred income taxes	4,687	4,713
Goodwill	484,329	333,626
Purchased intangibles, net	137,201	73,533
Other assets	13,871
Total assets	1,548,955	1,304,883
Current liabilities:
Short-term borrowings	64,500
Contract liability	69,713
Customer advances		75,941
Accrued compensation and other current liabilities	82,323	118,233
Income taxes payable	6,771	8,586
Total current liabilities	332,606	328,339
Shareholders' equity:
Common stock	260,141	45,008
Retained earnings	815,083	801,834
Accumulated other comprehensive loss	(112,642)	(110,643)
Treasury stock at cost	(36,078)	(36,078)
Shareholders’ equity related to Cubic	926,504	700,121
Noncontrolling interest in consolidated VIE	24,703	24,075
Total shareholders’ equity	951,207	724,196
Total liabilities and shareholders' equity	1,548,955	1,304,883
Cubic Corporation Excluding VIE
Current assets:
Cash and cash equivalents	75,174	111,834
Restricted cash	17,889	17,400
Accounts receivable:
Long-term contracts financing receivables	44,936
Long-term capitalized contract costs		84,924
Other assets	13,871	14,192
Current liabilities:
Trade accounts payable	109,094	125,414
Long-term debt	199,801	199,793
Other long term liabilities	43,838	43,486
OpCo.
Current assets:
Cash and cash equivalents	421	374
Restricted cash	10,000	10,000
Accounts receivable:
Long-term contracts financing receivables	52,996
Long-term capitalized contract costs		1,258
Other assets	962	810
Current liabilities:
Trade accounts payable	205	165
Long-term debt	15,357	9,056
Other long term liabilities	$ 6,146	$ 13

CONDENSED CONSOLIDATED STATEM_3

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Operating Activities:
Net loss	$ (10,614)	$ (9,786)
Net income from discontinued operations		(1,649)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	16,011	12,433
Share-based compensation expense	2,720	1,627
Change in fair value of contingent consideration	429	298
Changes in operating assets and liabilities, net of effects from acquisitions:	(69,713)	(14,437)
NET CASH USED IN CONTINUING OPERATING ACTIVITIES	(61,167)	(11,514)
NET CASH USED IN OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS		(15,424)
NET CASH USED IN OPERATING ACTIVITIES	(61,167)	(26,938)
Investing Activities:
Acquisition of businesses, net of cash acquired	(247,150)	(4,650)
Purchases of property, plant and equipment	(12,045)	(6,318)
Purchase of non-marketable debt and equity securities		(671)
NET CASH USED IN INVESTING ACTIVITIES	(259,195)	(11,639)
Financing Activities:
Proceeds from short-term borrowings	372,000	82,000
Principal payments on short-term borrowings	(307,500)	(49,000)
Purchase of common stock	(3,419)	(2,256)
Contingent consideration payments related to acquisitions of businesses	(435)	(656)
Proceeds from equity offering, net	215,832
NET CASH PROVIDED BY FINANCING ACTIVITIES	282,276	30,088
Effect of exchange rates on cash	1,962	677
NET DECREASE IN CASH AND CASH EQUIVALENTS	(36,124)	(7,812)
Cash and cash equivalents at the beginning of the period	139,608	68,577
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD	103,484	$ 60,765
Trafficware
Supplemental disclosure of non-cash investing and financing activities:
Receivable recognized in connection with the acquisition of Trafficware, net	1,588
OpCo.
Financing Activities:
Proceeds from long-term borrowings	$ 5,798

Basis for Presentation

Basis for Presentation	3 Months Ended
	Dec. 31, 2018
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, 2018 are not necessarily indicative of the results that may be expected for the year ending September 30, 2019. 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, 2018. 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. Through September 30, 2017 our principal lines of business were transportation fare collection systems and services, defense systems, and defense services. On April 18, 2018, we entered into a stock purchase agreement with Nova Global Supply & Services, LLC (Purchaser), an entity affiliated with GC Valiant, LP, under which we agreed to sell our Cubic Global Defense Services (CGD Services) business to the Purchaser. The sale closed on May 31, 2018. As a result of the sale, the operating results and cash flows of CGD Services have been classified as discontinued operations in the Consolidated Statements of Operations and Consolidated Statements of Cash Flows for all periods presented. Refer to “Note 3 – Acquisitions and Divestitures” for additional information about the sale of CGD Services and the related discontinued operation classification. Recently Adopted Accounting Pronouncements – Revenue Recognition Revenue Recognition: Effective October 1, 2018, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, as amended (commonly referred to as ASC 606) using the modified retrospective transition method. The adoption of ASC 606 resulted in a change in our significant accounting policy regarding revenue recognition, and resulted in changes in our accounting policies regarding contract estimates, backlog, inventory, contract assets, long-term capitalized contract costs, and contract liabilities as described below. The cumulative effect of applying the standard was an increase of $24.5 million to shareholders' equity as of October 1, 2018. Our Condensed Consolidated Statements of Income (Loss) for the quarter ended December 31, 2018 and our Condensed Consolidated Balance Sheet as of December 31, 2018 are presented under ASC 606, while our Condensed Consolidated Statements of Income (Loss) for the quarter ended December 31, 2017 and our Condensed Consolidated Balance Sheet as of September 30, 2018 are presented under the legacy revenue recognition guidance under ASC 605, Revenue Recognition. See Note 2 for disclosure of the impact of the adoption of ASC 606 on our Condensed Consolidated Statements of Income (Loss) and Condensed Consolidated Balance Sheet for the quarter ended December 31, 2018, and the effect of changes made to our Condensed Consolidated Balance Sheet as of October 1, 2018. We generate revenue from the sale of integrated solutions such as mass transit fare collection systems, air and ground combat training systems, and products with command, control, communication, computers, intelligence, surveillance and reconnaissance (C4ISR) capabilities. A significant portion of our revenues are generated from long-term fixed-price contracts with customers that require us to design, develop, manufacture, modify, upgrade, test and integrate complex systems according to the customer’s specifications. We also generate revenue from services we provide, such as the operation and maintenance of fare systems for mass transit customers and the support of specialized military training exercises mainly for international customers . Our contracts are primarily with the U.S. government, state and local municipalities, and other international government customers and international local municipal transit agencies. We classify sales as products or services in our Condensed Consolidated Statements of Income (Loss) based on the attributes of the underlying contracts. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. For certain contracts that meet the foregoing requirements, primarily international direct commercial sale contracts, we are required to obtain certain regulatory approvals. In these cases where regulatory approval is required in addition to approval from both parties, we recognize revenue based on the likelihood of obtaining timely regulatory approvals based upon all known facts and circumstances. To determine the proper revenue recognition method, we evaluate each contractual arrangement to identify all performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The majority of our contracts have a single performance obligation because the promise to transfer the individual good or service is not separately identifiable from other promises within the contract and is, therefore, not distinct. These contractual arrangements either require the use of a highly specialized engineering, development and manufacturing process to provide goods according to customer specifications or represent a bundle of contracted goods and services that are integrated and together represent a combined output, which may include the delivery of multiple units. Some of our contracts have multiple performance obligations, primarily (i) related to the provision of multiple goods or services or (ii) due to the contract covering multiple phases of the product lifecycle (for instance: development and engineering, production, maintenance and support). For contracts with more than one performance obligation, we evaluate whether the stated selling prices for the products or services represent their standalone selling prices. In cases where a contract requires a customized good or service, our primary method used to estimate the standalone selling price is the expected cost plus a margin approach. In cases where we sell a standard product or service offering, the standalone selling price is based on an observable standalone selling price. Our contracts with the U.S. government, including contracts under the U.S. Department of Defense’s Foreign Military Sales program (FMS Contracts), are subject to the Federal Acquisition Regulations (FAR) and the price is typically based on estimated or actual costs plus a reasonable profit margin. As a result of these regulations, the standalone selling price of products or services in our contracts with the U.S. government and FMS Contracts are typically equal to the selling price stated in the contract. Therefore, we typically do not need to allocate (or reallocate) the transaction price to multiple performance obligations in our contracts with the U.S. government. The majority of our sales are from performance obligations satisfied over time. Sales are recognized over time when control is continuously transferred to the customer during the contract or the contracted good does not have alternative use to us. For U.S. government contracts, the continuous transfer of control to the customer is supported by contract clauses that provide for (i) progress or performance-based payments or (ii) the unilateral right of the customer to terminate the contract for its convenience, in which case we have the right to receive payment for costs incurred plus a reasonable profit for products and services that do not have alternative uses to us. Our contracts with international governments and local municipal transit agencies contain similar termination for convenience clauses, or we have a legally enforceable right to receive payment for costs incurred and a reasonable profit for products or services that do not have alternative uses to us. For those contracts for which control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. For our design and build type contracts, we generally use the cost-to-cost measure of progress because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Contract costs include material, labor and subcontracting costs, as well as an allocation of indirect costs, and are generally expensed as incurred for these contracts. For contracts with the U.S. government, general and administrative costs are included in contract costs; however, for purposes of revenue measurement, general and administrative costs are not considered contract costs for any other customers. We record sales under cost-reimbursement-type contracts as we incur the costs. For cost-reimbursement type contracts with the U.S. government, the FAR provides guidance on the types of costs that we will be reimbursed in establishing the contract price. Sales under service contracts are generally recognized as services are performed or value is provided to our customers. We measure the delivery of value to our customers using a number of metrics including ridership, units of work performed, and costs incurred. We determine which metric represents the most meaningful measure of value delivery based on the nature of the underlying service activities required under each individual contract. In certain circumstances we recognize revenue based on the right to bill when such amounts correspond to the value being delivered in a billing cycle. Certain of our transportation systems service contracts contain service level penalties or bonuses, which we recognize in each period incurred or earned. These contract penalties or bonuses are generally incurred or earned on a monthly basis; however, certain contracts may be based on a quarterly or annual evaluation. Sales under service contracts that do not contain measurable units of work performed are recognized on a straight-line basis over the contractual service period, unless evidence suggests that the revenue is earned, or obligations fulfilled, in a different manner. Costs incurred under these service contracts are generally expensed as incurred. Sales from performance obligations satisfied at a point in time are typically for standard goods and are recognized when the customer obtains control, which is generally upon delivery and acceptance. Costs of sales are recorded in the period in which revenue is recognized. Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. It is common for our long-term contracts to contain bonuses, penalties, transactional variable based fees, or other provisions that can either increase or decrease the transaction price. These variable amounts generally are incurred or earned upon certain performance metrics, program milestones, transactional based activities and other similar contractual events. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. Billing timetables and payment terms on our contracts vary based on a number of factors, including the contract type. Typical payment terms under fixed-price contracts with the U.S. government provide that the customer pays either performance-based payments based on the achievement of contract milestones or progress payments based on a percentage of costs we incur. For the majority of our international contracts to deliver complex systems, we typically receive milestone payments that are paid in accordance with the terms of our contract as we perform. For the majority of our service contracts, we generally bill on a monthly basis which corresponds with the satisfaction of our monthly performance obligation under these contracts. We recognize a liability for payments in excess of revenue recognized, which is presented as a contract liability on the balance sheet. The portion of payments retained by the customer until final contract settlement is not considered a significant financing component because the intent is to protect the customer from our failure to adequately complete some or all of the obligations under the contract. Payments received from customers in advance of revenue recognition are not considered to be significant financing components because they are used to meet working capital demands that can be higher in the early stages of a contract. For certain of our multiple-element arrangements, the contract specifies that we will not be paid upon the delivery of certain performance obligations, but rather we will be paid when subsequent performance obligations are satisfied. Generally, in these cases we have determined that a separate financing component exists as a performance obligation under the contract. In these instances, we allocate a portion of the transaction price to this financing component. We determine the value of the embedded financing component by discounting the repayment of the financed amount over the implied repayment term using the effective interest method. This discounting methodology uses an implied interest rate which reflects the credit quality of the customer and represents an interest rate that would be similar to what we would offer the customer in a separate financing transaction. Unpaid principal and interest amounts associated with the financed performance obligation and the value of the embedded financing component are presented as Long-term contracts financing receivables in our consolidated balance sheet. We recognize the allocated transaction price of the financing component as interest income over the implied financing term. For fixed-price and cost-reimbursable contracts, we present revenues recognized in excess of billings as contract assets on the balance sheet. Amounts billed and due from our customers under both contract types are classified as receivables on the balance sheet. We only include amounts representing contract change orders, claims or other items in the contract value when we believe the rights and obligations become enforceable. Contract modifications routinely occur to account for changes in contract specifications or requirements. In most cases, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract. Transaction price estimates include additional consideration for submitted contract modifications or claims when we believe there is an enforceable right to the modification or claim, the amount can be reliably estimated, and its realization is reasonably assured. Amounts representing modifications accounted for as part of the existing contract are included in the transaction price and recognized as an adjustment to sales on a cumulative catch-up basis. In addition, we are subject to audit of incurred costs related to many of our U.S. government contracts. These audits could produce different results than we have estimated for revenue recognized on our cost-based contracts with the U.S. government; however, our experience has been that our costs are acceptable to the government. Contract Estimates: Use of the cost-to-cost or other similar methods of revenue recognition requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. Revisions or adjustments to estimates of the transaction price, estimated costs at completion and estimated profit or loss of a performance obligation are often required as work progresses under a contract, as experience is gained, as facts and circumstances change and as new information is obtained, even though the scope of work required under the contract may not change. Revisions or adjustments may also be required if contract modifications occur. The impact of revisions in profit or loss estimates are recognized on a cumulative catch-up basis in the period in which the revisions are made. The revisions in contract estimates, if significant, can materially affect our results of operations and cash flows, and in some cases result in liabilities to complete contracts in a loss position. The aggregate impact of net changes in contract estimates are presented in the table below (amounts in thousands). Three Months Ended December 31, 2018 2017 Operating income (loss) $ 1,814 $ (929) Net income (loss) from continuing operations 1,271 (736) Diluted earnings per share 0.04 (0.03) Backlog: Backlog (i.e., unfulfilled or remaining performance obligations) represents the sales we expect to recognize for our products and services for which control has not yet transferred to the customer. It comprises both funded backlog (firm orders for which funding is authorized and appropriated) and unfunded backlog. Unexercised contract options and indefinite delivery indefinite quantity (IDIQ) contracts are not included in backlog until the time the option or IDIQ task order is exercised or awarded. For our cost-reimbursable and fixed-priced-incentive contracts, the estimated consideration we expect to receive pursuant to the terms of the contract may exceed the contractual award amount. The estimated consideration is determined at the outset of the contract and is continuously reviewed throughout the contract period. In determining the estimated consideration, we consider the risks related to the technical, schedule and cost impacts to complete the contract and an estimate of any variable consideration. Periodically, we review these risks and may increase or decrease backlog accordingly As of December 31, 2018, our ending backlog was $ 3.814 billion. We expect to recognize approximately 25% of our December 31, 2018 backlog over the next 12 months and approximately 40% over the next 24 months as revenue, with the remainder recognized thereafter. Disaggregation of Revenue: See Note 14 for information regarding our sales by customer type, contract type and geographic region for each of our segments. We believe those categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Accounts Receivable: Receivables consist of billed amounts due from our customers. Due to the nature of our customers, we generally do not require collateral. We have limited exposure to credit risk as we have historically collected substantially all of our receivables. We generally require minimal allowance for doubtful accounts for our customers, which amounted to $1.7 million and $ 1.3 million as of December 31, 2018 and September 30, 2018, respectively. Inventories: We state our inventories at the lower of cost or market. We determine cost using the first-in, first-out (FIFO) method, which approximates current replacement cost. We value our work in process at the actual production and engineering costs incurred to date, including applicable overhead. Any inventoried costs in excess of estimated realizable value are immediately charged to cost of sales. Contract Assets : Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. The amounts may not exceed their estimated net realizable value. Contract assets are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long-cycle nature of many of our contracts. Long-term Capitalized Contract Costs: Through September 30, 2018, long-term capitalized contract costs included costs incurred on contracts to develop and manufacture transportation systems for customers for which revenue recognition did not begin until the customers begin operating the systems prior to the adoption of ASC 606. Upon adoption of ASC 606, revenue recognition and cost recognition are no longer deferred in these situations and therefore we no longer have long-term capitalized contract costs. Contract Liabilities : Contract liabilities (formerly referred to as customer advances prior to the adoption of ASC 606) include advance payments and billings in excess of revenue recognized. Contract liabilities are classified as current liabilities based on our contract operating cycle and calculated on a contract-by-contract basis, net of revenue recognized, at the end of each reporting period. Recently Adopted Accounting Pronouncements – Income Taxes On December 22, 2017 the U.S. government enacted the “Tax Cuts and Jobs Act of 2017” (Tax Act). Due to the complexity of the Tax Act, the SEC issued guidance in SAB 118 which clarified the accounting for income taxes under ASC 740 if certain information was not yet available, prepared or analyzed, in reasonable detail to complete the accounting for income tax effects of the Tax Act. SAB 118 provided for a measurement period of up to one year after the enactment of the Tax Act, during which time the required analyses and accounting must be completed. During fiscal year 2018, we recorded provisional amounts for the income tax effects of the changes in tax law and tax rates, as reasonable estimates were determined by management during this period. During the first quarter of fiscal year 2019, we did not adjust provisional amounts recorded in the prior fiscal year and the SAB 118 measurement period subsequently ended on December 22, 2018. Although we no longer considers these amounts to be provisional, the determination of the Tax Act’s income tax effects may change following future legislation or further interpretation of the Tax Act based on the publication of recently proposed U.S. Treasury regulations and guidance from the Internal Revenue Service and state tax authorities. Recently Adopted Accounting Pronouncements – Other In October 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs . ASU 2016-16 was effective for us beginning October 1, 2018 and did not have any significant impact on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10), which requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for entities to disclose the methods and significant assumptions used to estimate the fair value that is currently required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 was adopted by us beginning October 1, 2018 and did not have any significant impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments , which provides clarifying guidance on how entities should classify cash receipts and cash payments from specific types of transactions on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 was effective for us beginning October 1, 2018 and did not have any significant impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash , which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. ASU 2016-18 was adopted by us beginning October 1, 2018. The application of this accounting standard update did not impact financial results, but resulted in a retrospective change in the presentation of restricted cash, including the inclusion of $27.4 million and $11.8 million of restricted cash on hand at September 30, 2018 and December 31, 2017, respectively, within the beginning and ending amounts of cash and cash equivalents in our Statements of Cash Flows. In addition, changes in the total of cash, cash equivalents and restricted cash are now reflected in our Statements of Cash Flows for all periods presented. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business . This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets transferred is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 was adopted by us on October 1, 2018 and did not have any immediate impact on our consolidated financial statements. However, adoption of ASU 2017-01 could impact the accounting for future acquisitions or disposals of assets and activities because the accounting for a business combination differs significantly from that of an asset acquisition. In March 2017, the FASB issued ASU 2017-07 , Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The update requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. The other components of net benefit cost, including interest cost, expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are to be presented outside of any subtotal of operating income. Employers will have to disclose the line(s) used to present the other components of net periodic benefit cost, if the components are not presented separately in the income statement. We adopted ASU 2017-07 beginning October 1, 2018 and it did not have any significant impact on our consolidated financial statements. The components of net periodic benefit cost, other than the service cost component, are included in other income (expense) in our condensed consolidated statements of income (loss). Recent Accounting Pronouncements – Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases . Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU will be effective for us beginning October 1, 2019 with early adoption permitted. ASU 2016-02 will be adopted on a modified retrospective transition basis for leases existing at, or entered into after the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements and we have determined we will not adopt the new guidance early. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. This standard removes the second step of the goodwill impairment test, where a determination of the fair value of individual assets and liabilities of a reporting unit was needed to measure the goodwill impairment. Under this updated standard, goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance will be effective for us in our fiscal year beginning October 1, 2020 with early adoption permitted. Adoption of ASU 2017-04 will have no immediate impact on our consolidated financial statements and would only have the potential to impact the amount of any goodwill impairment recorded after the adoption of the ASU. We are currently evaluating whether to adopt the guidance early. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which aims to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this ASU are intended to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To satisfy that objective, the amendments expand and refine hedge accounting for both non-financial and financial risk components, and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. Additionally, the amendments (1) permit hedge accounting for risk components in hedging relationships involving non-financial risk and interest rate risk; (2) change the guidance for designating fair value hedges of interest rate risk and for measuring the change in fair value of the hedged item in fair value hedges of interest rate risk; (3) continue to allow an entity to exclude option premiums and forward points from the assessment of hedge effectiveness; and (4) permit an entity to exclude the portion of the change in fair value of a currency swap that is attributable to a cross-currency basis spread from the assessment of hedge effectiveness. The amendments in this ASU are effective for us in our annual period beginning October 1, 2019 and interim periods within that year, with early adoption permitted. We are

New Accounting Standards Implem

New Accounting Standards Implemented	3 Months Ended
	Dec. 31, 2018
New Accounting Standards Implemented
New Accounting Standards Implemented	Note 2 — New Accounting Standards Implemented In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers , as amended (commonly referred to as ASC 606), which replaces numerous requirements in U.S. GAAP, including industry-specific requirements, and provides companies with a single revenue recognition model for recognizing revenue from contracts with customers and significantly expands the disclosure requirements for revenue arrangements. The new standard, as amended, was effective for us beginning on October 1, 2018. As discussed in Note 1, we adopted ASC 606 using the modified retrospective transition method. Results for reporting periods beginning after September 30, 2018 are presented under ASC 606, while prior period comparative information has not been restated and continues to be reported in accordance with ASC 605, the accounting standard in effect for periods ending prior to October 1, 2018. The adoption of ASC 606 primarily impacted certain (i) multiple-element transportation contracts that previously deferred the recognition of all revenue and related costs during the design and build phase, as the collection of payment occurred during the subsequent operate and maintain phase, and (ii) contracts previously covered by contract accounting standards that recognized revenue using the units-of-delivery method. Under ASC 606, we now recognize sales on these contracts over time by using the cost-to-cost method. Based on contracts in process at September 30, 2018, upon adoption of ASC 606 we recorded a net increase to retained earnings of $24.5 million, which includes the acceleration of net sales of approximately $114.9 million and the related cost of sales. The adjustment to retained earnings primarily relates to multiple element transportation contracts that previously required the deferral of revenue and costs during the design and build phase, as the collection of all customer payments occurs during the subsequent operate and maintain phase. Under ASC 606, deferral of such revenue and costs is not required. In addition, the adjustment to retained earnings is attributed to contracts previously accounted for under the units-of-delivery method, which are now recognized under ASC 606 earlier in the performance period as costs are incurred, as opposed to when the units are delivered under ASC 605. In accordance with the modified retrospective transition provisions of ASC 606, we will not recognize any of the accelerated net sales and related cost of sales through October 1, 2018 in our Condensed Consolidated Statements of Income (Loss) for any historical or future period. We made certain presentation changes to our Consolidated Balance Sheet on October 1, 2018 to comply with ASC 606. The component of accounts receivable as reported under ASC 605, which included unbilled contract receivables, has been reclassified as contract assets under ASC 606, after certain adjustments described below. The adoption of ASC 606 resulted in an increase in unbilled contract receivables (referred to as contract assets under ASC 606) primarily from converting contracts previously applying the units-of-delivery method to the cost-to-cost method with a corresponding reduction in inventoried contract costs. Additionally, the adoption of ASC 606 resulted in an increase in unbilled receivables from converting multiple element transportation contracts that previously deferred all revenue and costs during the design and build phase, with a corresponding reduction in long-term capitalized contract costs. Advance payments and deferred revenue, previously primarily classified in customer advances, are now presented as contract liabilities. The table below presents the cumulative effect of the changes made to our Condensed Consolidated Balance Sheet as of October 1, 2018 due to the adoption of ASC 606 (in thousands): Adjustments October 1, 2018 September 30, Due to As Adjusted 2018 ASC 606 Under ASC 606 ASSETS Current assets: Cash and cash equivalents $ 111,834 $ — $ 111,834 Cash in consolidated VIE 374 — 374 Restricted cash 17,400 — 17,400 Restricted cash in consolidated VIE 10,000 — 10,000 Accounts receivable, net 392,367 (236,743) 155,624 Contract assets — 272,210 272,210 Recoverable income taxes 91 — 91 Inventories 84,199 (22,511) 61,688 Assets held for sale 8,177 — 8,177 Other current assets 43,705 — 43,705 Total current assets 668,147 12,956 681,103 Long-term contracts receivables 6,134 (6,134) — Long-term contracts financing receivables — 56,228 56,228 Long-term contracts financing receivables in consolidated VIE — 38,990 38,990 Long-term capitalized contract costs 84,924 (84,924) — Long-term capitalized contract costs in consolidated VIE 1,258 (1,258) — Property, plant and equipment, net 117,546 — 117,546 Deferred income taxes 4,713 389 5,102 Goodwill 333,626 — 333,626 Purchased intangibles, net 73,533 — 73,533 Other assets 14,192 — 14,192 Other noncurrent assets in consolidated VIE 810 — 810 Total assets $ 1,304,883 $ 16,247 $ 1,321,130 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ — $ — $ — Trade accounts payable 125,414 (3,011) 122,403 Trade accounts payable in consolidated VIE 165 — 165 Contract liability — 70,127 70,127 Customer advances 75,941 (75,941) — Accrued compensation and other current liabilities 118,233 583 118,816 Income taxes payable 8,586 — 8,586 Total current liabilities 328,339 (8,242) 320,097 Long-term debt 199,793 — 199,793 Long-term debt in consolidated VIE 9,056 — 9,056 Other long-term liabilities 43,486 — 43,486 Other long-term liabilities in consolidated VIE 13 — 13 Shareholders’ equity: Common stock 45,008 — 45,008 Retained earnings 801,834 19,834 821,668 Accumulated other comprehensive loss (110,643) — (110,643) Treasury stock at cost (36,078) — (36,078) Shareholders’ equity related to Cubic 700,121 19,834 719,955 Noncontrolling interest in VIE 24,075 4,655 28,730 Total shareholders’ equity 724,196 24,489 748,685 Total liabilities and shareholders’ equity $ 1,304,883 $ 16,247 $ 1,321,130 The table below presents how the adoption of ASC 606 affected certain line items on our Condensed Consolidated Statements of Income (Loss) for the three months ended December 31, 2018 (in thousands): Three months ended December 31, 2018 As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 Net sales: Products $ 152,562 $ 29,691 $ 182,253 Services 124,262 (1,256) 123,006 276,824 28,435 305,259 Costs and expenses: Products 100,544 24,941 125,485 Services 92,785 — 92,785 Selling, general and administrative expenses 62,823 163 62,986 Research and development 12,012 — 12,012 Amortization of purchased intangibles 10,565 — 10,565 Restructuring costs 1,992 — 1,992 280,721 25,104 305,825 Operating loss (3,897) 3,331 (566) Other income (expenses): Interest and dividend income 56 1,178 1,234 Interest expense (4,032) — (4,032) Other income (expense), net (4,753) — (4,753) Loss from continuing operations before income taxes (12,626) 4,509 (8,117) Income tax provision 2,473 24 2,497 Net loss (15,099) 4,485 (10,614) Less noncontrolling interest in loss of VIE (5,981) 1,954 (4,027) Net loss attributable to Cubic $ (9,118) $ 2,531 $ (6,587) Net income (loss) per share: Basic earnings per share attributable to Cubic $ (0.32) $ 0.09 $ (0.23) Diluted earnings per share attributable to Cubic $ (0.32) $ 0.09 $ (0.23) The table below quantifies the impact of adopting ASC 606 on segment net sales and operating income (loss) for the three months ended December 31, 2018 (in thousands): Three months ended December 31, 2018 As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 Sales: (in thousands) Cubic Transportation Systems $ 172,728 $ 9,079 $ 181,807 Cubic Mission Solutions 45,363 1,030 46,393 Cubic Global Defense 58,733 18,326 77,059 Total sales $ 276,824 $ 28,435 $ 305,259 Operating income (loss): Cubic Transportation Systems $ 9,186 $ 1,790 $ 10,976 Cubic Mission Solutions (5,191) 251 (4,940) Cubic Global Defense 1,607 1,290 2,897 Unallocated corporate expenses (9,499) — (9,499) Total operating income (loss) $ (3,897) $ 3,331 $ (566) The table below presents how the impact of the adoption of ASC 606 affected certain line items on our Condensed Consolidated Balance Sheet at December 31, 2018 (in thousands): As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 ASSETS Current assets: Cash and cash equivalents $ 75,174 $ — $ 75,174 Cash in consolidated VIE 421 — 421 Restricted cash 17,889 — 17,889 Restricted cash in consolidated VIE 10,000 — 10,000 Accounts receivable, net 390,855 (272,564) 118,291 Contract assets — 320,277 320,277 Recoverable income taxes 1,086 235 1,321 Inventories 121,223 (29,022) 92,201 Assets held for sale 8,177 — 8,177 Other current assets 40,924 — 40,924 Total current assets 665,749 18,926 684,675 Long-term contracts receivables 4,064 (4,064) — Long-term contracts financing receivables — 44,936 44,936 Long-term contracts financing receivables in consolidated VIE — 52,996 52,996 Long-term capitalized contract costs 95,894 (95,894) — Long-term capitalized contract costs in consolidated VIE 1,551 (1,551) — Property, plant and equipment, net 125,298 — 125,298 Deferred income taxes 4,298 389 4,687 Goodwill 484,329 — 484,329 Purchased intangibles, net 137,201 — 137,201 Other assets 13,871 — 13,871 Other noncurrent assets in consolidated VIE 962 — 962 Total assets $ 1,533,217 $ 15,738 $ 1,548,955 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ 64,500 $ — $ 64,500 Trade accounts payable 111,310 (2,216) 109,094 Trade accounts payable in consolidated VIE 205 — 205 Contract liability — 69,713 69,713 Customer advances 80,993 (80,993) — Accrued compensation and other current liabilities 82,323 — 82,323 Income taxes payable 6,512 259 6,771 Total current liabilities 345,843 (13,237) 332,606 Long-term debt 199,801 — 199,801 Long-term debt in consolidated VIE 15,357 — 15,357 Other long-term liabilities 43,838 — 43,838 Other long-term liabilities in consolidated VIE 6,146 — 6,146 Shareholders’ equity: Common stock 260,141 — 260,141 Retained earnings 792,717 22,366 815,083 Accumulated other comprehensive loss (112,642) — (112,642) Treasury stock at cost (36,078) — (36,078) Shareholders’ equity related to Cubic 904,138 22,366 926,504 Noncontrolling interest in VIE 18,094 6,609 24,703 Total shareholders’ equity 922,232 28,975 951,207 Total liabilities and shareholders’ equity $ 1,533,217 $ 15,738 $ 1,548,955

Acquisitions and Divestitures

Acquisitions and Divestitures	3 Months Ended
	Dec. 31, 2018
Acquisitions and Divestitures
Acquisitions and Divestitures	Note 3 — Acquisitions and Divestitures Sale of CGD Services On April 18, 2018, we entered into a stock purchase agreement with the Purchaser, an entity affiliated with GC Valiant, LP, under which we agreed to sell our CGD Services business to the Purchaser. The sale closed on May 31, 2018. In accordance with the terms of the stock purchase agreement, the Purchaser agreed to pay us $135.0 million in cash upon the closing of the transaction, adjusted for the estimated working capital of CGD Services at the date of the sale compared to a working capital target. In the third quarter of fiscal 2018, we received $133.8 million in connection with the sale and at December 31, 2018, we have recorded a receivable from the Purchaser of $3.7 million for the estimated amount due related to the working capital settlement. The working capital settlement has not yet been settled with the Purchaser. In addition to the amounts described above, we are eligible to receive an additional cash payment of $3.0 million based on the achievement of pre-determined earn-out conditions related to the award of certain government contracts. No amount has been recorded as a receivable related to the potential achievement of earn-out conditions based upon our assessment of the probability of achievement of the required conditions. We concluded that the sale of the CGD Services business met all of the required conditions for discontinued operations presentation in the second quarter of fiscal 2018. As such, the CGD Services business financial results are reported within discontinued operations in our condensed consolidated financial statements. The operating results and cash flows of CGD Services have been classified as discontinued operations in the Condensed Consolidated Statements of Income (Loss) and Condensed Consolidated Statements of Cash Flows for all periods presented. The operations and cash flows of CGD Services are reflected in our consolidated Statements of Income and Consolidated Statements of Cash Flows as discontinued operations through May 31, 2018, the date of the sale. The following table presents the composition of net income from discontinued operations, net of taxes, for the quarter ended December 31, 2017 (in thousands). No amounts were recognized as income or loss from discontinued operations for the three months ended December 31, 2018: Three Months Ended December 31, 2017 Net sales $ 92,293 Costs and expenses: Cost of sales 83,120 Selling, general and administrative expenses 3,667 Amortization of purchased intangibles 608 Other income (5) Earnings from discontinued operations before income taxes 4,903 Income tax provision 3,254 Net income from discontinued operations $ 1,649 Under a transition services agreement, we are providing the Purchaser with certain post-closing support primarily consisting of IT and payroll services. We are charging the Purchaser for the post-closing support in amounts that approximate their expected costs, and these support services will be phased out over an approximate ten-month period from the date that the sale closed. Business 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. Advanced Traffic Solutions Inc. In October 2018, we acquired all of the outstanding capital stock of Advanced Traffic Solutions Inc. (Trafficware), a provider of intelligent traffic solutions for the transportation industry based in Sugar Land, Texas. Trafficware provides a fully integrated suite of software, Internet of Things devices, and hardware solutions that optimize the flow of motorist and pedestrian traffic. Trafficware is expected to provide synergies from combining its capabilities with our existing Cubic Transportation System (CTS) business. Trafficware’s sales and results of operations included in our operating results for the quarter ended December 31, 2018 and 2017 were as follows (in millions): Three Months Ended December 31, 2018 2017 Sales $ 10.5 $ — Operating loss (3.3) — Net loss after taxes (3.3) — Trafficware’s operating results above included the following amounts for the quarter (in millions): Three Months Ended December 31, 2018 2017 Amortization $ 4.3 $ — Acquisition-related expenses 1.4 — The acquisition-date fair value of consideration is $237.6 million, which is comprised of net cash paid of $239.2 million less a $1.6 million receivable due from the sellers for the difference between the net working capital acquired and the targeted working capital amounts. The acquisition was financed primarily with proceeds from draws on our line of credit. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Technology $ 43.3 Customer Relationships 21.9 Backlog 4.8 Trade Name 4.6 Accounts Receivable 10.4 Inventory 9.4 Accounts payable and accrued expenses (6.5) Other net assets acquired (liabilities assumed) (2.0) Net identifiable assets acquired 85.9 Goodwill 151.7 Net assets acquired $ 237.6 The estimated fair values of assets acquired and liabilities assumed, including purchased intangibles, are preliminary estimates pending the finalization of our valuation analyses. The estimated 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 trade name valuation used the relief from royalty method, the customer relationships valuation used the with-and-without valuation method, and the technology and backlog valuations used the excess earnings method. The intangible assets are being amortized using straight-line methods based on the expected period of undiscounted cash flows that will be generated by the assets, over an average useful life of seven years from the date of acquisition. The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of Trafficware with our existing CTS business, and strengthening our capability of developing and integrating products in our CTS 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 CTS segment and is not expected to be deductible for tax purposes. The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of Trafficware for fiscal years 2019 through 2023 and thereafter is as follows (in millions): Year Ended September 30, 2019 $ 15.3 2020 11.4 2021 11.4 2022 11.4 2023 6.4 Thereafter 18.8 Shield Aviation, Inc. In July 2018, we acquired the assets of Shield Aviation (Shield), based in San Diego, California, a provider of autonomous aircraft systems (AAS) for intelligence, surveillance and reconnaissance (ISR) services. The addition of Shield expands our C4ISR portfolio for our CMS segment and will provide our customers with a rapidly deployable, medium AAS that offers unique mission enabling capabilities. We already provide the data link as well as the command and control link for the Shield AAS. Shield’s sales and results of operations included in our operating results for the three months ended December 31, 2018 and 2017 were as follows (in millions): December 31, 2018 2017 Sales $ — $ — Operating loss (0.9) — Net loss after taxes (0.9) — Shield’s operating results above included the following amounts for the three months ended December 31, 2018 and 2017 (in millions): December 31, 2018 2017 Amortization $ 0.2 $ — Acquisition-related expenses — — The acquisition-date fair value of consideration is $12.8 million, which is comprised of estimated fair value of contingent consideration of $5.6 million, extinguishment of secured loans and warrants due from Shield of $5.2 million, cash paid of $1.3 million, plus additional consideration to be paid in the future of $0.7 million. Under the purchase agreement, we will pay the sellers up to $10.0 million of contingent consideration if Shield meets certain sales goals from the date of acquisition through July 31, 2025. The contingent consideration liability will be re-measured to fair value at each reporting date until the contingencies are resolved and any subsequent changes in fair value are recognized in earnings. The acquisition of Shield was paid for with funds from existing cash resources. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Technology $ 6.0 Other net assets acquired 0.3 Net identifiable assets acquired 6.3 Goodwill 6.5 Net assets acquired $ 12.8 The technology asset valuation used the excess earnings approach and is being amortized using the straight-line method over eight years, which is based on the expected period of cash flows that will be generated by the asset. The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of Shield with our existing Cubic Mission Solutions (CMS) business, and strengthening our capability of developing and integrating products and services in our CMS 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 CMS 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 Shield for fiscal years 2019 through 2023 and thereafter is as follows (in millions): Year Ended September 30, 2019 $ 0.8 2020 0.8 2021 0.8 2022 0.8 2023 0.8 Thereafter 2.1 MotionDSP In October 2017 we paid cash of $4.7 million to purchase 49% of the outstanding capital stock of MotionDSP, a private artificial intelligence software company based in Burlingame, California, which specializes in real-time video enhancement and computer vision analytics. On February 21, 2018, we paid net cash of $4.8 million to purchase the remaining outstanding capital stock of MotionDSP. The addition of MotionDSP enhances the capabilities in real-time video processing of our CMS business and expands our customer base in the public safety and other adjacent markets. MotionDSP’s sales and results of operations included in our operating results since its consolidation in our financial statements for the quarters ended December 31, 2018 and 2017 were as follows (in millions): December 31, 2018 2017 Sales $ 0.2 $ — Operating loss (0.4) — Net loss after taxes (0.4) — MotionDSP’s operating results above included the following amounts for the quarters ended December 31, 2018 and 2017 (in millions): December 31, 2018 2017 Amortization $ 0.2 $ — Acquisition-related expenses 0.1 — The acquisition of MotionDSP was paid for with funds from existing cash resources. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Customer relationships $ 0.2 Technology 4.5 Trade name 0.1 Accounts payable and accrued expenses (0.3) Other noncurrent liabilities (0.8) Other net liabilities assumed (0.9) Net identifiable assets acquired 2.8 Goodwill 6.7 Net assets acquired $ 9.5 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 trade name valuation used the relief from royalty method, the customer relationships valuation used the with-and-without valuation method, and the technology valuation used the excess earnings method. The intangible assets are being amortized using straight-line methods based on the expected cash flows from the assets, over a useful life of seven years from the date of acquisition. The goodwill resulting from the acquisition was deemed to consist primarily of the synergies expected from combining the operations of MotionDSP with our CMS operating segment, enhancing our capabilities in real-time video processing and computer vision analytics of our CMS portfolio, as well as the value of the assembled workforce that became our employees following the close of the acquisition. The amount recorded as goodwill in connection with the acquisition of MotionDSP is not expected to be deductible for tax purposes. The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of MotionDSP for fiscal years 2019 through 2023 and thereafter is as follows (in millions): Year Ended September 30, 2019 $ 0.7 2020 0.7 2021 0.7 2022 0.7 2023 0.7 Thereafter 0.8 Pro forma information The following unaudited pro forma information presents our consolidated results of operations as if Trafficware, Shield, and MotionDSP had been included in our consolidated results since October 1, 2017 (in millions): Three Months Ended December 31, 2018 2017 Net sales $ 307.1 $ 261.8 Net loss $ (6.3) $ (13.4) 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, 2017, and it does not purport to project our future operating results. Acquisition of GRIDSMART Subsequent to December 31, 2018 In January 2019, we acquired all of the outstanding capital stock of GRIDSMART Technologies, Inc. (GRIDSMART), a provider of differentiated video tracking to the Intelligent Traffic Systems (ITS) market. Based in Knoxville, Tennessee, GRIDSMART specializes in video detection at the intersection utilizing advanced image processing, computer vision modeling and machine learning along with a single camera solution providing best-in-class data for optimizing the flow of people and traffic through intersections. GRIDSMART is expected to provide synergies from combining its capabilities with our existing CTS business. The purchase price was $87.0 million adjusted for the difference between net working capital acquired and a targeted working capital amount, and was financed primarily with proceeds from draws on our line of credit. Due to the limited time between the acquisition date and the filing of this report and due to the difference in fiscal year dates between GRIDSMART and Cubic, it is not practicable for us to disclose: (i) the allocation of purchase price to assets acquired and liabilities assumed as of the date of close, (ii) the methods of amortization and amortization periods of acquired intangible assets, and (iii) pro forma revenues and earnings of the combined company for the quarter ended December 31, 2018. Goodwill Changes in goodwill for the three months ended December 31, 2018 were as follows for each of our reporting units (in thousands): Transportation Cubic Mission Cubic Global Systems Solutions Defense Total Net balances at September 30, 2018 $ 49,786 $ 138,127 $ 145,713 $ 333,626 Acquisitions 151,670 — — 151,670 Foreign currency exchange rate changes (798) (73) (96) (967) Net balances at December 31, 2018 $ 200,658 $ 138,054 $ 145,617 $ 484,329 Goodwill represents the purchase price paid in excess of the fair value of net tangible and intangible assets acquired. Goodwill is not amortized but is subject to an impairment test at a reporting unit level on an annual basis and when circumstances indicate that an impairment is more-likely-than-not. Circumstances that might indicate an impairment is more-likely-than-not include a significant adverse change in the business climate for one of our reporting units or a decision to dispose of a reporting unit or a significant portion of a reporting unit. The test for goodwill impairment is a two-step process. The first step of the test is performed by comparing the fair value of each reporting unit to its carrying value, including recorded goodwill. If the carrying value of a reporting unit exceeds its fair value, the second step is performed to measure the amount of the impairment, if any, by comparing the implied fair value of goodwill to its carrying value. Any resulting impairment determined would be recorded in the current period. Our most recent annual goodwill impairment test was our 2018 annual impairment test completed as of July 1, 2018. The results of our 2018 annual impairment test indicated that the estimated fair value for our CTS reporting unit exceeded its carrying value by over 100% while the estimated fair values of our Cubic Global Defense (CGD) and CMS reporting units each exceeded their carrying values by over 40%. Subsequent to the effective dates of the tests for each of our reporting units, we do not believe that circumstances have occurred that indicate that an impairment for any of our reporting units is more-likely-than-not. As such, no subsequent interim impairment tests have been performed.

Variable Interest Entities

Variable Interest Entities	3 Months Ended
	Dec. 31, 2018
Variable Interest Entities
Variable Interest Entities	Note 4 – Variable Interest Entities In accordance with ASC 810, Consolidation , we assess our partnerships and joint ventures at inception, and when there are changes in relevant factors, to determine if any meet the qualifications of a variable interest entity (VIE). We consider a partnership or joint venture a VIE if it has any of the following characteristics: (a) the total equity investment is not sufficient to permit the entity to finance its activities without additional subordinated financial support, (b) characteristics of a controlling financial interest are missing (either the ability to make decisions through voting or other rights, the obligation to absorb the expected losses of the entity or the right to receive the expected residual returns of the entity), or (c) the voting rights of the equity holders are not proportional to their obligations to absorb the expected losses of the entity and/or their rights to receive the expected residual returns of the entity, and substantially all of the entity's activities either involve or are conducted on behalf of an investor that has disproportionately few voting rights. We perform a qualitative assessment of each VIE to determine if we are its primary beneficiary. We conclude that we are the primary beneficiary and consolidate the VIE if we have both (a) the power to direct the activities that most significantly impact the VIE’s economic performance and (b) the obligation to absorb losses or the right to receive benefits from the VIE that could potentially be significant to the VIE. We consider the VIE design, the contractual agreements that define the ownership structure, distribution of profits and losses, risks, responsibilities, indebtedness, voting rights and board representation of the respective parties in determining if we are the primary beneficiary. We also consider all parties that have direct or implicit variable interests when determining whether we are the primary beneficiary. As required by ASC 810, our primary beneficiary assessment is continuously performed. In March 2018, CTS, a wholly owned subsidiary of Cubic, and John Laing, an unrelated company that specializes in contracting under public-private partnerships (P3), jointly formed Boston AFC 2.0 HoldCo. LLC (HoldCo.). Also in March 2018, HoldCo. created a wholly owned entity, Boston AFC 2.0 OpCo. LLC (OpCo.) which entered into a contract with the Massachusetts Bay Transit Authority (MBTA) for the financing, development, and operation of a next-generation fare payment system in Boston (the MBTA Contract). HoldCo. is 90% owned by John Laing and 10% owned by CTS. Collectively, HoldCo. and OpCo. are referred to as the P3 Venture. Based on our assessment under ASC 810, we have concluded that OpCo. and HoldCo. are VIE’s and that we are the primary beneficiary of OpCo. Consequently, we have consolidated the financial statements of OpCo. within Cubic’s consolidated financial statements. We have concluded that we are not the primary beneficiary of HoldCo., and thus we have not consolidated the financial statements of HoldCo. within Cubic’s consolidated financial statements. The MBTA Contract consists of a design and build phase of approximately three years and an operate and maintain phase of approximately ten years. The design and build phase is planned to be completed in 2021 and the operate and maintain phase will span from 2021 through 2031. MBTA will make fixed payments of $558.5 million, adjusted for incremental transaction-based fees, inflation, and performance penalties, to OpCo. in connection with the MBTA Contract over the ten-year operate and maintain phase. All of OpCo.’s contractual responsibilities regarding the design and development and the operation and maintenance of the fare system have been subcontracted to CTS by OpCo. CTS will receive fixed payments of $427.6 million, adjusted for incremental transaction-based fees, inflation, and performance penalties, under its subcontract with OpCo. Upon creation of the P3 Venture, John Laing made a loan to HoldCo. of $24.3 million in the form of a bridge loan that is intended to be converted to equity in the future in accordance with its equity funding responsibilities. Concurrently, HoldCo. made a corresponding equity contribution to OpCo. in the same amount which is included within equity of Noncontrolling interest in VIE within Cubic’s consolidated financial statements. Also, upon creation of the P3 Venture, CTS issued a letter of credit for $2.7 million to HoldCo. in accordance with CTS’s equity funding responsibilities. HoldCo. is able to draw on the CTS letter of credit in certain liquidity instances, but no amounts have been drawn on this letter of credit as of December 31, 2018. Upon creation of the P3 Venture, OpCo. entered into a credit agreement with a group of financial institutions (the OpCo. Credit Agreement) which includes a long-term debt facility and a revolving credit facility . The long-term debt facility allows for draws up to a maximum amount of $212.4 million; draws may only be made during the design and build phase of the MBTA Contract. The long-term debt facility, including interest and fees incurred during the design and build phase, is required to be repaid on a fixed monthly schedule over the operate and maintain phase of the MBTA Contract. The long-term debt facility bears interest at variable rates of LIBOR plus 1.3% and LIBOR plus 1.55% over the design and build and operate and maintain phases of the MBTA Contract, respectively . At December 31, 2018, the outstanding balance on the long-term debt facility was $15.4 million, which is presented net of unamortized deferred financing costs of $8.8 million. The revolving credit facility allows for draws up to a maximum amount of $13.9 million and is only available to be drawn on during the operate and maintain phase of the MBTA Contract. OpCo.’s debt is nonrecourse with respect to Cubic and its subsidiaries. The fair value of the long-term debt facility approximates its carrying value. The OpCo. Credit Agreement contains a number of covenants which require that OpCo. and Cubic maintain progress on the delivery of the MBTA Contract within a specified timeline and budget and provide regular reporting on such progress. The OpCo. Credit Agreement also contains a number of customary events of default including, but not limited to, the delivery of a customized fare collection system to MBTA by a pre-determined date. Failure to meet such delivery date will result in OpCo., and Cubic via its subcontract with OpCo., to incur penalties due to the lenders . OpCo. has entered into pay-fixed/receive-variable interest rate swaps with a group of financial institutions to mitigate variable interest rate risk associated with its long-term debt. The interest rate swaps contain forward starting notional principal amounts which align with OpCo.’s expected draws on its long-term debt facility. At December 31, 2018, the outstanding notional principal amounts on open interest rate swaps were $61.9 million. The fair value of OpCo.’s interest rate swaps at December 31, 2018 was $6.1 million and is recorded as a liability in Other long-term liabilities in our Consolidated Balance Sheets. OpCo.’s interest rate swaps were not designated as effective hedges at December 31, 2018 and as such any unrealized gains/losses are included in other income (expense), net . Unrealized losses as a result of changes in the fair value of OpCo.’s interest rate swaps were $6.1 million for the three months ended December 31, 2018. See Note 13 for a description of the measurement of fair value of derivative financial instruments, including OpCo.’s interest rate swaps. At December 31, 2018, OpCo. holds a $10.0 million restricted cash balance which is required by the MBTA Contract to allow for the delivery of future change orders and unplanned expansions as directed by MBTA . The assets and liabilities of OpCo. that are included in our condensed consolidated balance sheets at December 31, 2018 and September 30, 2018 are as follows: December 31, September 30, 2018 2018 (in thousands) Cash $ 421 $ 374 Restricted cash 10,000 10,000 Long-term capitalized contract costs — 1,258 Long-term contracts financing receivable 52,996 — Other noncurrent assets 962 810 Total assets $ 64,379 $ 12,442 Trade accounts payable $ 205 $ 165 Other long-term liabilities 6,146 13 Long-term debt 15,357 9,056 Total liabilities $ 21,708 $ 9,234 Total Cubic equity 39 (304) Noncontrolling interests 24,703 24,348 Total liabilities and owners' equity $ 46,450 $ 33,278 The balance sheets of OpCo. at December 31, 2018 and September 30, 2018 exclude $17.9 million of liabilities and $20.8 million of assets, respectively, that are eliminated in consolidation. The assets of OpCo. are restricted for its use only and are not available for the general operations of Cubic. OpCo.’s debt is non-recourse to Cubic. Cubic’s maximum exposure to loss as a result of its equity interest in the P3 Venture is limited to the $2.7 million outstanding letter of credit, which will be converted to a cash contribution upon completion of the design and build phase of the MBTA Contract. Prior to the adoption of ASC 606, Cubic and OpCo. were precluded from recognizing revenue on the MBTA Contract because MBTA was not required to make payments to OpCo. until the operate and maintain phase of the contract began. During this time period Cubic and OpCo. were capitalizing costs associated with designing and building the system for MBTA. The total amount of such costs capitalized through September 30, 2018 was $27.8 million, which was classified within long-term capitalized contract costs. Upon the adoption of ASC 606, Cubic and OpCo are now permitted to recognize revenue related to the MBTA contract and therefore costs are now recognized as incurred and are no longer capitalized. The revenue, operating income, and other income (expense), net of OpCo. that are included in our condensed consolidated statement of income (loss) for the three months ended December 31, 2018 and 2017 are as follows: Three Months Ended December 31, 2018 2017 Revenue $ 1,961 $ — Operating income 1,668 — Other income (expense), net (6,133) — Interest income 503 — Interest expense (512) —

Net Income (Loss) Per Share

Net Income (Loss) Per Share	3 Months Ended
	Dec. 31, 2018
Net Income (Loss) Per Share
Net Income (Loss) Per Share	Note 5 — Net Income (Loss) Per Share Basic net income (loss) per share (EPS) is computed by dividing the net income (loss) attributable to Cubic 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 from continuing operations attributable to Cubic, 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 from continuing operations attributable to Cubic, common equivalent shares are not included in the computation of diluted EPS, because to do so would be anti-dilutive. The weighted-average number of shares outstanding used to compute net loss per common share were as follows (in thousands): December 31, 2018 2017 Weighted average shares - basic 28,492 27,207 Effect of dilutive securities — — Weighted average shares - diluted 28,492 27,207 Number of anti-dilutive securities 990 1,040

Contract Assets and Liabilities

Contract Assets and Liabilities	3 Months Ended
	Dec. 31, 2018
Contract Assets and Liabilities
Contract Assets and Liabilities	Note 6 — Contract Assets and Liabilities Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Contract liabilities (formerly referred to as customer advances prior to the adoption of ASC 606 include advance payments and billings in excess of revenue recognized. Contract assets and contract liabilities were as follows (in thousands): December 31, October 1, 2018 2018 Contract assets $ 320,277 $ 272,210 Contract liabilities $ 69,713 $ 70,128 Contract assets increased $48.1 million during the three months ended December 31, 2018, primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the three months ended December 31, 2018 for which we have not yet billed. There were no significant impairment losses related to our contract assets during the three months ended December 31, 2018 and 2017. Contract liabilities decreased $0.4 million during the three months ended December 31, 2018, primarily due to payments received in excess of revenue recognized on these performance obligations. During the three months ended December 31, 2018, we recognized $20.7 million of our contract liabilities at October 1, 2018 as revenue. We expect our contract liabilities to be recognized as revenue over the next twelve months.

Balance Sheet Details

Balance Sheet Details	3 Months Ended
	Dec. 31, 2018
Balance Sheet Details
Balance Sheet Details	Note 7 — Balance Sheet Details Accounts Receivable The components of accounts receivable are as follows (in thousands): December 31, September 30, 2018 2018 Accounts receivable Billed $ 119,943 $ 156,948 Unbilled — 242,877 Allowance for doubtful accounts (1,652) (1,324) Total accounts receivable 118,291 Less estimated amounts not currently due — (6,134) Current accounts receivable $ 118,291 $ Inventories Inventories consist of the following (in thousands): December 31, September 30, 2018 2018 Finished products $ 7,716 $ 7,099 Work in process and inventoried costs under long-term contracts 49,295 63,169 Materials and purchased parts 35,190 23,710 Customer advances — (9,779) Net inventories $ 92,201 $ 84,199 At both December 31, 2018 and September 30, 2018, work in process and inventoried costs under long-term contracts includes approximately $0.9 million in costs incurred outside the scope of work or in advance of a contract award. We believe it is probable that we will recover the costs inventoried at December 31, 2018, plus a profit margin, under contract change orders or awards within the next year. 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. Various components of our ERP system became ready for their intended use and were placed into service in phases from fiscal 2016 through fiscal 2018. As each component became ready for its intended use, the component’s costs were transferred into completed software and we began amortizing these costs over their seven-year estimated useful life. Excluding businesses that we acquired in fiscal 2019, we completed the planned implementation of our ERP system in the fourth quarter of fiscal 2018. We continue to capitalize costs associated with the development of certain ERP features and upgrades that are not yet ready for their intended use. We capitalized costs related to ERP components in development totaling $0.5 million and $2.5 million for the quarters ended December 31, 2018 and 2017, respectively. In addition to software costs that were capitalized, during the quarters ended December 31, 2018 and December 31, 2017, we recognized expenses related to the development and implementation of our ERP system of $0.8 million and $6.3 million, respectively, for costs that did not meet the requirements for capitalization. Amounts that were expensed in connection with the development and implementation of these systems are classified within selling, general and administrative expenses in the Condensed 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 $12.0 million and $11.5 million at December 31, 2018 and September 30, 2018, respectively. We have made contributions to a rabbi trust to provide a source of funds for satisfying a portion of these deferred compensation liabilities. The total carrying values of assets set aside to fund deferred compensation liabilities as of December 31, 2018 and September 30, 2018 were $5.8 million and $6.4 million, respectively, which were comprised entirely of life insurance contracts. The carrying value of the life insurance contracts is based on the cash surrender value of the policies. 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, 2018
Fair Value of Financial Instruments
Fair Value of Financial Instruments	Note 8 — 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 following table presents assets and liabilities measured and recorded at fair value on our balance sheets on a recurring basis (in thousands): December 31, 2018 September 30, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ — $ — $ — $ — $ 9,000 $ — $ — $ 9,000 Current derivative assets — 5,036 — 5,036 — 1,803 — 1,803 Noncurrent derivative assets — 581 — 581 — 314 — 314 Total assets measured at fair value $ — $ 5,617 $ — $ 5,617 $ 9,000 $ 2,117 $ — $ 11,117 Liabilities Current derivative liabilities — 3,367 — 3,367 — 1,657 — 1,657 Noncurrent derivative liabilities — — — — — 75 — 75 Contingent consideration to seller of Deltenna — — 1,343 1,343 — — 1,081 1,081 Contingent consideration to seller of Shield — — 5,618 5,618 — — 5,618 5,618 Contingent consideration to seller of TeraLogics - revenue targets — — — — — — 1,750 1,750 Contingent consideration to seller of H4 Global — — 832 832 — — 665 665 Total liabilities measured at fair value $ — $ 3,367 $ 7,793 $ 11,160 $ — $ 1,732 $ 9,114 $ 10,846 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 is based upon a discounted cash flow model and approximate cost. 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 contingent consideration liabilities 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. At December 31, 2018, we have the following remaining contingent consideration arrangements with the sellers of companies which we acquired: · Deltenna: Payment of up to $6.9 million of contingent consideration if Deltenna meets certain sales goals from the date of acquisition through the year ending September 30, 2022. · H4 Global: Payment of up to $3.2 million of contingent consideration based upon the value of contracts entered into over the five-year period ending September 30, 2020. · Shield: Payments of up to $10.0 million of contingent consideration if Shield meets certain sales goals from the date of acquisition through July 31, 2025. In addition, we have a contingent consideration arrangement with the Purchaser of our CGD Services business under which we are eligible to receive a cash payment of $3.0 million if the Purchaser is awarded certain government contracts in the future. The fair value of Deltenna contingent consideration was valued using the real option approach. Under this approach, each payment was modeled using long digital options written on the underlying revenue metric. The strike price for each option is the respective revenue as specified in the related 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 based upon analysis of comparable guideline public companies and the volatility factor used in the December 31, 2018 valuations was 40% for Deltenna. The volatility factor used in the September 30, 2018 valuation was 53% for Deltenna. 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 maximum remaining payout to the sellers of H4 Global is $3.2 million at December 31, 2018, and is based upon the value of contracts entered into over the five-year period ending September 30, 2020. 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 Shield contingent consideration was estimated based on Monte Carlo simulations. Under the purchase agreement, we will pay the sellers up to $10.0 million if Shield meets certain sales goals from the date of acquisition through July 31, 2025. The fair value of the contingent consideration was determined based upon a probability distribution of values based on 100,000 iterations. Key inputs for the simulation include projected revenues, assumed discount rates for projected revenue and cash flows, and volatility. The volatility and revenue risk adjustment factors used as of December 31, 2018 were 20% and 14%, respectively, and were determined based on analysis of publicly traded comparable companies. The discount rate used as of December 31, 2018 and September 30, 2018 was based on our expected borrowing rate under our financing arrangements, which was determined to be 5.0% at December 31, 2018 and September 30, 2018. 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, 2018, the following table summarizes the change in fair value of our Level 3 contingent consideration liabilities (in thousands): H4 Global TeraLogics (Revenue Targets) Deltenna Shield Total Net balances at September 30, 2018 $ 665 $ 1,750 $ 1,081 $ 5,618 $ 9,114 Cash paid to seller — (1,750) — — (1,750) Total remeasurement (gain) loss recognized in earnings 167 — 262 — 429 Balance as of December 31, 2018 $ 832 $ — $ 1,343 $ 5,618 $ 7,793 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, 2018 2018 Fair value $ 195.4 $ 193.7 Carrying value $ 200.0 $ 200.0 We did not have any significant non-financial assets or liabilities measured at fair value on a non-recurring basis in the first quarter of fiscal 2019 or 2018 other than assets and liabilities acquired in business acquisitions described in Note 3 and the restricted stock units that were granted in the first quarter of fiscal 2019 that contain performance and market-based vesting criteria described in Note 11.

Financing Arrangements

Financing Arrangements	3 Months Ended
	Dec. 31, 2018
Financing Arrangements
Financing Arrangements	Note 9 — Financing Arrangements In December 2018, we completed an We used the net proceeds to repay a portion of our outstanding borrowings under our revolving credit agreement which was used to finance the acquisition of Trafficware and general corporate purposes. 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. In addition, pursuant to the agreement, on July 17, 2015, we issued an additional $25.0 million of senior unsecured notes bearing interest at a rate of 3.70% and maturing on March 12, 2025. Interest payments on the notes issued in 2013 and 2015 are due semi-annually and principal payments are due from 2021 through 2025. The agreement pertaining to the aforementioned notes also contained a provision that the coupon rate would increase by a further 0.50% should the company’s leverage ratio exceed a certain level. On February 2, 2016, we revised the note purchase agreement and we issued an additional $75.0 million of senior unsecured notes bearing interest at 3.93% and maturing on March 12, 2026. Interest payments on these notes are due semi-annually and principal payments are due from 2020 through 2026. At the time of the issuance of this last series of notes, certain terms and conditions of the note purchase and private shelf agreement were revised in coordination with the revision and expansion of the revolving credit agreement as discussed below in order to increase our leverage capacity. The interest rates on all of the term notes described above may be adjusted upwards by up to 0.75% should our leverage ratio exceed certain levels. We have a committed revolving credit agreement with a group of financial institutions in the amount of $400.0 million which expires in August 2021 (Revolving Credit Agreement). At December 31, 2018, the weighted average interest rate on outstanding borrowings under the Revolving Credit Agreement was 3.75%. Debt issuance and modification costs of $2.3 million and $1.3 million were incurred in connection with February 2, 2016 and August 11, 2016 amendments to the Revolving Credit Agreement, respectively. Costs incurred in connection with establishment of and amendments to this credit agreement are recorded in other assets on our Condensed Consolidated Balance Sheets, and are being amortized as interest expense using the effective interest method over the stated term of the Revolving Credit Agreement. At December 31, 2018, our total debt issuance costs have an unamortized balance of $1.7 million. The available line of credit is reduced by any letters of credit issued under the Revolving Credit Agreement. As of December 31, 2018, there were $64.5 million of borrowings under this agreement and there were letters of credit outstanding totaling $38.4 million, which reduce the available line of credit to $297.1 million. The $38.4 million of letters of credit includes both financial letters of credit and performance guarantees. We maintain a cash account with a bank in the United Kingdom for which the funds are restricted as to use. 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 in the United Kingdom. The balance in the account as of December 31, 2018 was $17.9 million and is classified as restricted cash in our Condensed Consolidated Balance Sheets. As of December 31, 2018, we had letters of credit and bank guarantees outstanding totaling $50.1 million, which includes the $38.4 million of letters of credit on the Revolving Credit Agreement above and $11.7 million of letters of credit issued under other facilities. The total of $50.1 million of letters of credit and bank guarantees includes $42.9 million that guarantees either our performance or customer advances under certain contracts and financial letters of credit of $7.2 million which primarily guarantee our payment of certain self-insured liabilities. We have never had a drawing on a letter of credit instrument, nor are any anticipated; therefore, we estimate the fair value of these instruments to be zero. We have entered into a short-term borrowing arrangement in the United Kingdom in the amount of £20.0 million British pounds (equivalent to approximately $25.5 million) to help meet the short-term working capital requirements of our subsidiary. At December 31, 2018, no amounts were outstanding under this borrowing arrangement. 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, 2018, these agreements have no restrictions on distributions to shareholders, subject to certain tests in these agreements. 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 $8.7 million at December 31, 2018 and $8.6 million at September 30, 2018.

Pension Plans

Pension Plans	3 Months Ended
	Dec. 31, 2018
Pension Plans
Pension Plans	Note 10 — Pension Plans The components of net periodic pension cost (benefit) are as follows (in thousands): Three Months Ended December 31, 2018 2017 Service cost $ 149 $ 151 Interest cost 1,910 1,880 Expected return on plan assets (3,009) (3,525) Amortization of actuarial loss 528 692 Administrative expenses 97 110 Net pension cost (benefit) $ (325) $ (692)

Stockholders_ Equity

Stockholders’ Equity	3 Months Ended
	Dec. 31, 2018
Stockholders’ Equity
Stockholders’ Equity	Note 11 - Stockholders’ Equity Long-Term Equity Incentive Plan In 2013, the Executive Compensation Committee of the Board of Directors (Compensation Committee) approved a long-term equity incentive award program. To date, the Compensation Committee has approved three general categories of grant awards: RSUs with time-based vesting, RSUs with performance-based vesting, and RSUs with performance and market-based vesting. Through December 31, 2018, the Compensation Committee has granted 1,285,560 RSUs with time-based vesting, 1,173,766 RSUs with performance-based vesting, and 219,890 RSUs with Each RSU with time-based vesting or performance-based vesting represents a contingent right to receive one share of our common stock. Each RSU with performance and market-based vesting represents a contingent right to receive up to 1.25 shares 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 prior to September 30, 2018, the vesting is contingent upon Cubic meeting one of three types of vesting criteria over the performance period, including revenue growth targets, earnings growth 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. In fiscal 2019, the Compensation Committee granted RSUs with performance and market-based vesting criteria. The performance and market-based RSUs granted to participants vest over three-year performance periods based on Cubic’s achievement of revenue growth targets and earnings growth targets subject to the recipient’s continued service through the end of the respective performance periods. The level at which Cubic performs against scalable targets over the performance periods impact the percentage of the RSUs that will ultimately vest. For these RSUs, Cubic’s relative total stock return (TSR) as compared to the Russell 2000 Index (Index) over the performance period will result in a multiplier for the number of RSUs that will vest. If the our TSR performance exceeds the performance of the Index based on a scale established by the Compensation Committee, the multiplier will result in up to an additional 25% of RSUs vesting at the end of the performance period. If the TSR performance is below the performance of the Index based on a scale established by the Compensation Committee, the multiplier could result in a reduction of up to 25% of these RSUs vesting at the end of the performance period. The grant date fair value of each RSU with time-based vesting or performance-based vesting is the fair market value of one share of our common stock at the grant date. The grant date fair value of each RSU with performance and market-based vesting was calculated using a Monte Carlo simulation valuation method. Under this method, the prices of the Index and our common stock were simulated through the end of the performance period. The correlation matrix between our common stock and the index as well as our stock and the Index’s return volatilities were developed based upon an analysis of historical data. The following table includes the assumptions used for the valuation of the RSUs with performance and market-based vesting that were granted in the first quarter of fiscal 2019: RSU's granted during the three months ended December 31, 2018 Date of grant November 21, 2018 Closing average share value (mean) $ 68.56 Performance period begins October 1, 2018 Performance period ends September 30, 2021 Risk-free interest rate 2.8% Expected volatility 34% As a result of the valuation analysis, the fair value of the RSUs with performance and market-based vesting granted in the first quarter of fiscal 2019 was calculated at $67.40 per RSU. At December 31, 2018, 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 331,181 RSUs with time-based vesting, 129,907 RSUs with performance-based vesting, and 152,570 RSUs with performance and market-based vesting. The following table summarizes our RSU activity: Unvested Restricted Stock Units Weighted-Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2018 366,460 $ 52.31 Granted 195,033 64.33 Vested (128,949) 50.61 Forfeited (15,391) 50.04 Unvested at December 31, 2018 417,153 $ 58.54 Unvested Restricted Stock Units with Performance Based Vesting Weighted-Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2018 635,628 $ 50.11 Granted — — Vested — — Forfeited (295,759) 43.86 Unvested at December 31, 2018 339,869 $ 55.54 Unvested Restricted Stock Units with Performance and Market Based Vesting Weighted-Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2018 — $ — Granted 219,890 67.40 Vested — — Forfeited — — Unvested at December 31, 2018 219,890 $ 67.40 We recorded non-cash compensation expense related to stock-based awards as follows (in thousands): Three Months Ended December 31, 2018 2017 Cost of sales $ 313 $ 156 Selling, general and administrative 2,407 1,471 $ 2,720 $ 1,627 As of December 31, 2018, there was $52.0 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 $37.5. million. This amount is expected to be recognized over a weighted-average period of 1.6 years. We 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, 2018. 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, 2018
Income Taxes
Income Taxes	Note 12 – Income Taxes U.S. Tax Cuts and Jobs Act On December 22, 2017, the U.S. government enacted the Tax Act. Due to the complexity of the Tax Act, the SEC issued guidance in SAB 118 which clarified the accounting for income taxes under ASC 740 if certain information was not yet available, prepared or analyzed in reasonable detail to complete the accounting for income tax effects of the Tax Act. SAB 118 provided for a measurement period of up to one year after the enactment of the Tax Act, during which time the required analyses and accounting must be completed. During fiscal year 2018, we recorded provisional amounts for the income tax effects of the changes in tax law and tax rates, as reasonable estimates were determined by management during this period. During the first quarter of fiscal year 2019, we did not adjust provisional amounts recorded in the prior fiscal year and the SAB 118 measurement period subsequently ended on December 22, 2018. Although we no longer considers these amounts to be provisional, the determination of the Tax Act’s income tax effects may change following future legislation or further interpretation of the Tax Act based on the publication of recently proposed U.S. Treasury regulations and guidance from the Internal Revenue Service and state tax authorities. The Tax Act includes provisions for Global Intangible Low-Tax Income (GILTI) under which taxes on foreign income are imposed on the excess of a deemed return on tangible assets of foreign subsidiaries. Consistent with accounting guidance, we have elected to account for the tax on GILTI as a period cost and thus have not adjusted any net deferred tax assets of our foreign subsidiaries in connection with the Tax Act. Effective Tax Rate During interim periods, the Company generally utilizes the estimated annual effective tax rate method which involves the use of forecasted information. Under this method, the provision is calculated by applying an estimate of the annual effective tax rate for the full fiscal year to “ordinary” income or loss (pretax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. For the three-month period ended December 31, 2018, the Company believes it is more appropriate to use a blend of the discrete effective tax rate method and the estimated annual effective tax rate method to calculate income tax expense for the period. The Company determined that since small changes in estimated “ordinary” income for U.S. operations would result in significant changes in the worldwide estimated annual effective tax rate, the discrete tax rate method should be utilized to determine a more reliable estimate of U.S. income tax expense for the period. Income tax expense recognized on pre-tax losses from continuing operations for the three months ended December 31, 2018 resulted in an effective tax rate of negative 31% which differs from the U.S. statutory tax rate of 21% primarily due to the jurisdictional mix of pre-tax income (loss) and U.S. losses for which no tax benefit can be realized due to a valuation allowance. The effective tax rate for the three months ended December 31, 2018 differs from the effective tax rate of negative 6% and positive 48% for the three months ended December 31, 2017 and the year ended September 30, 2018, respectively, primarily due to differences in the jurisdictional mix of pre-tax income (loss), partially offset by discrete benefits resulting from the enactment of the Tax Act. Deferred Tax Balances As of December 31, 2018, we maintained a valuation allowance against U.S. deferred tax assets as realization of such assets does not meet the more-likely-than-not threshold required under accounting guidelines. We will continue to assess the need for a valuation allowance on deferred tax assets by evaluating positive and negative evidence that may exist. Through December 31, 2018, a total valuation allowance of $79.3 million has been established for U.S. net deferred tax assets, certain foreign operating losses and other foreign assets.

Derivative Instruments and Hedg

Derivative Instruments and Hedging Activities	3 Months Ended
	Dec. 31, 2018
Derivative Instruments and Hedging Activities
Derivative Instruments and Hedging Activities	Note 13 — 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 income (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 noncurrent 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, 2018 and September 30, 2018 (in thousands): Notional Principal December 31, 2018 September 30, 2018 Instruments designated as accounting hedges: Foreign currency forwards $ 169,095 $ 169,406 Instruments not designated as accounting hedges: Foreign currency forwards $ 24,824 $ 27,909 Included in the amounts not designated as accounting hedges at December 31, 2018 and September 30, 2018 were foreign currency forwards with notional principal amounts of $12.7 million and $14.7 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. Unrealized losses of $0.3 million were recognized in other income (expense), net for the three months ended December 31, 2018 and 2017 related to these foreign currency forward contracts not designated as accounting hedges . The notional principal amounts for outstanding derivative instruments provide one measure of the transaction volume outstanding and do not represent the amount of our exposure to credit or market loss. Credit risk represents our 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. Our 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, 2018 and September 30, 2018. Although the table above reflects the notional principal amounts of our 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. We generally enter into master netting arrangements, which reduce credit risk by permitting net settlement of transactions with the same counterparty. We present our derivative assets and derivative liabilities at their gross fair values. We did not have any derivative instruments with credit-risk related contingent features that would require us to post collateral as of December 31, 2018 or September 30, 2018. 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, 2018 and September 30, 2018 (in thousands): Fair Value Balance Sheet Location December 31, 2018 September 30, 2018 Asset derivatives: Foreign currency forwards Other current assets $ 5,036 $ 1,803 Foreign currency forwards Other noncurrent assets 582 314 $ 5,618 $ 2,117 Liability derivatives: Foreign currency forwards Other current liabilities $ 3,367 $ 1,657 Foreign currency forwards Other noncurrent liabilities — 75 Total $ 3,367 $ 1,732 The tables below present gains and losses recognized in other comprehensive income (loss) for the three months ended December 31, 2018 and 2017 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 December 31, 2018 December 31, 2017 Gains (losses) Gains (losses) Gains (losses) reclassified into reclassified into recognized in earnings - Gains (losses) earnings - Derivative Type OCI Effective Portion recognized in OCI Effective Portion Foreign currency forwards $ 1,779 $ (33) $ 656 $ (774) The amount of unrealized 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-month periods ended December 31, 2018 and 2017. 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 $1.7 million, net of income taxes.

Segment Information

Segment Information	3 Months Ended
	Dec. 31, 2018
Segment Information
Segment Information	Note 14 — Segment Information We define our operating segments and reportable segments based on the way our chief executive officer, who we have concluded is our chief operating decision maker, manages our operations for purposes of allocating resources and assessing performance and we continually reassess our operating segment and reportable segment designation based upon these criteria. We evaluate performance and allocate resources based on total segment operating income or loss. The accounting policies of the reportable segments are the same as those described in the summary of significant accounting policies. Intersegment sales and transfers are immaterial and are eliminated in consolidation. Our reportable segments are business units that offer different products and services. Operating results for each segment are reported separately to senior corporate management to make decisions as to the allocation of corporate resources and to assess performance. Business segment financial data is as follows (in millions): Three Months Ended December 31, 2018 2017 Sales: Cubic Transportation Systems $ 181.8 $ 146.5 Cubic Mission Solutions 46.4 33.1 Cubic Global Defense 77.1 68.8 Total sales $ 305.3 $ 248.4 Operating income (loss): Cubic Transportation Systems $ 11.0 $ 9.9 Cubic Mission Solutions (4.9) (8.9) Cubic Global Defense 2.9 1.4 Unallocated corporate expenses (9.6) (14.3) Total operating income (loss) $ (0.6) $ (11.9) Depreciation and amortization: Cubic Transportation Systems $ 7.7 $ 3.3 Cubic Mission Solutions 5.4 5.9 Cubic Global Defense 2.2 2.1 Corporate 0.7 1.1 Total depreciation and amortization $ 16.0 $ 12.4 Unallocated corporate costs in the first quarter of 2019 include costs of strategic and IT system resource planning as part of our One Cubic Initiatives, which totaled $1.6 million compared to $8.0 million in the first quarter of last year. As described in Note 3, the operating results of CGD Services have been classified as discontinued operations in the Condensed Consolidated Statements of Income (Loss) for all periods presented. Disaggregation of Total Net Sales . We disaggregate our sales from contracts with customers by end customer, contract type, deliverable type and revenue recognition method for each of our segments, as we believe these factors affect the nature, amount, timing, and uncertainty of our revenue and cash flows. Sales by Geographic Region (in millions) : Three months ended December 31, 2018 CTS CMS CGD Total United States $ 91.3 $ 45.5 $ 35.7 $ 172.5 United Kingdom 50.9 0.4 4.3 55.6 Australia 29.8 0.1 5.6 35.5 Far East/Middle East 4.4 0.4 18.4 23.2 Other 5.4 — 13.1 18.5 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3 Sales by End Customer. We are the prime customer for the vast majority of our sales. The table below presents total net sales disaggregated by end customer (in millions): Three months ended December 31, 2018 CTS CMS CGD Total U.S. Federal Government and State and Local Municipalities $ 90.8 $ 45.8 $ 32.4 $ 169.0 Other 91.0 0.6 44.7 136.3 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3 Sales by Contract Type. Substantially all of our contracts are fixed-price type contracts. Sales included in Other contract types represent cost plus and time and material type contracts. On a fixed-price type contract, we agrees to perform the contractual statement of work for a predetermined sales price. On a cost-plus type contract, we are is paid our allowable incurred costs plus a profit which can be fixed or variable depending on the contract’s fee arrangement up to predetermined funding levels determined by the customer. On a time-and-material type contract, we are paid on the basis of direct labor hours expended at specified fixed-price hourly rates (that include wages, overhead, allowable general and administrative expenses and profit) and materials at cost. The table below presents total net sales disaggregated by contract type (in millions): Three months ended December 31, 2018 CTS CMS CGD Total Fixed Price $ 178.2 $ 45.8 $ 71.6 $ 295.6 Other 3.6 0.6 5.5 9.7 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3 Sales by Deliverable Type: The table below presents total net sales disaggregated by the type of deliverable, which is determined by us at the performance obligation level (in millions): Three months ended December 31, 2018 CTS CMS CGD Total Product $ 92.0 $ 40.6 $ 49.7 $ 182.3 Service 89.8 5.8 27.4 123.0 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3 Revenue Recognition Method: The table below presents total net sales disaggregated based on the revenue recognition method applied (in millions): Three months ended December 31, 2018 CTS CMS CGD Total Point in Time $ 16.7 $ 34.4 $ 0.5 $ 51.6 Over Time 165.1 12.0 76.6 253.7 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3

Legal Matters

Legal Matters	3 Months Ended
	Dec. 31, 2018
Legal Matters
Legal Matters	Note 15 — Legal Matters We consider all legal matters to be ordinary proceedings incidental to our business. We believe the outcome of these proceedings will not have a materially adverse effect on our financial position, results of operations, or cash flows.

Subsequent Event

Subsequent Event	3 Months Ended
	Dec. 31, 2018
Subsequent Events
Subsequent Events	Note 16 — Subsequent Event On February 5, 2019, we entered into agreements related to the construction and leasing of two buildings on our existing corporate campus in San Diego. This will allow us to consolidate virtually all of our San Diego operations in a single location and accommodate the expected growth of our business. Under these agreements a legal entity affiliated with the financial institutions involved with the project will own the buildings, and we will lease the buildings for a term of five years upon their completion. At the end of the lease term we will be required to elect to negotiate a new lease term, purchase the property, or arrange for a sale of the property to a third party. Alternatively the financial institutions may elect to keep the building and release us from these requirements.

Basis for Presentation (Policie

Basis for Presentation (Policies)	3 Months Ended
	Dec. 31, 2018
Basis for Presentation
Revenue Recognition	Recently Adopted Accounting Pronouncements – Revenue Recognition Revenue Recognition: Effective October 1, 2018, we adopted Accounting Standards Update (ASU) 2014-09, Revenue from Contracts with Customers, as amended (commonly referred to as ASC 606) using the modified retrospective transition method. The adoption of ASC 606 resulted in a change in our significant accounting policy regarding revenue recognition, and resulted in changes in our accounting policies regarding contract estimates, backlog, inventory, contract assets, long-term capitalized contract costs, and contract liabilities as described below. The cumulative effect of applying the standard was an increase of $24.5 million to shareholders' equity as of October 1, 2018. Our Condensed Consolidated Statements of Income (Loss) for the quarter ended December 31, 2018 and our Condensed Consolidated Balance Sheet as of December 31, 2018 are presented under ASC 606, while our Condensed Consolidated Statements of Income (Loss) for the quarter ended December 31, 2017 and our Condensed Consolidated Balance Sheet as of September 30, 2018 are presented under the legacy revenue recognition guidance under ASC 605, Revenue Recognition. See Note 2 for disclosure of the impact of the adoption of ASC 606 on our Condensed Consolidated Statements of Income (Loss) and Condensed Consolidated Balance Sheet for the quarter ended December 31, 2018, and the effect of changes made to our Condensed Consolidated Balance Sheet as of October 1, 2018. We generate revenue from the sale of integrated solutions such as mass transit fare collection systems, air and ground combat training systems, and products with command, control, communication, computers, intelligence, surveillance and reconnaissance (C4ISR) capabilities. A significant portion of our revenues are generated from long-term fixed-price contracts with customers that require us to design, develop, manufacture, modify, upgrade, test and integrate complex systems according to the customer’s specifications. We also generate revenue from services we provide, such as the operation and maintenance of fare systems for mass transit customers and the support of specialized military training exercises mainly for international customers . Our contracts are primarily with the U.S. government, state and local municipalities, and other international government customers and international local municipal transit agencies. We classify sales as products or services in our Condensed Consolidated Statements of Income (Loss) based on the attributes of the underlying contracts. We account for a contract when it has approval and commitment from both parties, the rights of the parties are identified, payment terms are identified, the contract has commercial substance and collectability of consideration is probable. For certain contracts that meet the foregoing requirements, primarily international direct commercial sale contracts, we are required to obtain certain regulatory approvals. In these cases where regulatory approval is required in addition to approval from both parties, we recognize revenue based on the likelihood of obtaining timely regulatory approvals based upon all known facts and circumstances. To determine the proper revenue recognition method, we evaluate each contractual arrangement to identify all performance obligations. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer. The majority of our contracts have a single performance obligation because the promise to transfer the individual good or service is not separately identifiable from other promises within the contract and is, therefore, not distinct. These contractual arrangements either require the use of a highly specialized engineering, development and manufacturing process to provide goods according to customer specifications or represent a bundle of contracted goods and services that are integrated and together represent a combined output, which may include the delivery of multiple units. Some of our contracts have multiple performance obligations, primarily (i) related to the provision of multiple goods or services or (ii) due to the contract covering multiple phases of the product lifecycle (for instance: development and engineering, production, maintenance and support). For contracts with more than one performance obligation, we evaluate whether the stated selling prices for the products or services represent their standalone selling prices. In cases where a contract requires a customized good or service, our primary method used to estimate the standalone selling price is the expected cost plus a margin approach. In cases where we sell a standard product or service offering, the standalone selling price is based on an observable standalone selling price. Our contracts with the U.S. government, including contracts under the U.S. Department of Defense’s Foreign Military Sales program (FMS Contracts), are subject to the Federal Acquisition Regulations (FAR) and the price is typically based on estimated or actual costs plus a reasonable profit margin. As a result of these regulations, the standalone selling price of products or services in our contracts with the U.S. government and FMS Contracts are typically equal to the selling price stated in the contract. Therefore, we typically do not need to allocate (or reallocate) the transaction price to multiple performance obligations in our contracts with the U.S. government. The majority of our sales are from performance obligations satisfied over time. Sales are recognized over time when control is continuously transferred to the customer during the contract or the contracted good does not have alternative use to us. For U.S. government contracts, the continuous transfer of control to the customer is supported by contract clauses that provide for (i) progress or performance-based payments or (ii) the unilateral right of the customer to terminate the contract for its convenience, in which case we have the right to receive payment for costs incurred plus a reasonable profit for products and services that do not have alternative uses to us. Our contracts with international governments and local municipal transit agencies contain similar termination for convenience clauses, or we have a legally enforceable right to receive payment for costs incurred and a reasonable profit for products or services that do not have alternative uses to us. For those contracts for which control transfers over time, revenue is recognized based on the extent of progress towards completion of the performance obligation. The selection of the method to measure progress towards completion requires judgment and is based on the nature of the products or services to be provided. For our design and build type contracts, we generally use the cost-to-cost measure of progress because it best depicts the transfer of control to the customer which occurs as we incur costs on our contracts. Under the cost-to-cost measure of progress, the extent of progress towards completion is measured based on the ratio of costs incurred to date to the total estimated costs at completion of the performance obligation. Revenues, including estimated fees or profits, are recorded proportionally as costs are incurred. Contract costs include material, labor and subcontracting costs, as well as an allocation of indirect costs, and are generally expensed as incurred for these contracts. For contracts with the U.S. government, general and administrative costs are included in contract costs; however, for purposes of revenue measurement, general and administrative costs are not considered contract costs for any other customers. We record sales under cost-reimbursement-type contracts as we incur the costs. For cost-reimbursement type contracts with the U.S. government, the FAR provides guidance on the types of costs that we will be reimbursed in establishing the contract price. Sales under service contracts are generally recognized as services are performed or value is provided to our customers. We measure the delivery of value to our customers using a number of metrics including ridership, units of work performed, and costs incurred. We determine which metric represents the most meaningful measure of value delivery based on the nature of the underlying service activities required under each individual contract. In certain circumstances we recognize revenue based on the right to bill when such amounts correspond to the value being delivered in a billing cycle. Certain of our transportation systems service contracts contain service level penalties or bonuses, which we recognize in each period incurred or earned. These contract penalties or bonuses are generally incurred or earned on a monthly basis; however, certain contracts may be based on a quarterly or annual evaluation. Sales under service contracts that do not contain measurable units of work performed are recognized on a straight-line basis over the contractual service period, unless evidence suggests that the revenue is earned, or obligations fulfilled, in a different manner. Costs incurred under these service contracts are generally expensed as incurred. Sales from performance obligations satisfied at a point in time are typically for standard goods and are recognized when the customer obtains control, which is generally upon delivery and acceptance. Costs of sales are recorded in the period in which revenue is recognized. Due to the nature of the work required to be performed on many of our performance obligations, the estimation of total revenue and cost at completion is complex, subject to many variables and requires significant judgment. It is common for our long-term contracts to contain bonuses, penalties, transactional variable based fees, or other provisions that can either increase or decrease the transaction price. These variable amounts generally are incurred or earned upon certain performance metrics, program milestones, transactional based activities and other similar contractual events. We estimate variable consideration at the most likely amount to which we expect to be entitled. We include estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely on an assessment of our anticipated performance and all information (historical, current and forecasted) that is reasonably available to us. Billing timetables and payment terms on our contracts vary based on a number of factors, including the contract type. Typical payment terms under fixed-price contracts with the U.S. government provide that the customer pays either performance-based payments based on the achievement of contract milestones or progress payments based on a percentage of costs we incur. For the majority of our international contracts to deliver complex systems, we typically receive milestone payments that are paid in accordance with the terms of our contract as we perform. For the majority of our service contracts, we generally bill on a monthly basis which corresponds with the satisfaction of our monthly performance obligation under these contracts. We recognize a liability for payments in excess of revenue recognized, which is presented as a contract liability on the balance sheet. The portion of payments retained by the customer until final contract settlement is not considered a significant financing component because the intent is to protect the customer from our failure to adequately complete some or all of the obligations under the contract. Payments received from customers in advance of revenue recognition are not considered to be significant financing components because they are used to meet working capital demands that can be higher in the early stages of a contract. For certain of our multiple-element arrangements, the contract specifies that we will not be paid upon the delivery of certain performance obligations, but rather we will be paid when subsequent performance obligations are satisfied. Generally, in these cases we have determined that a separate financing component exists as a performance obligation under the contract. In these instances, we allocate a portion of the transaction price to this financing component. We determine the value of the embedded financing component by discounting the repayment of the financed amount over the implied repayment term using the effective interest method. This discounting methodology uses an implied interest rate which reflects the credit quality of the customer and represents an interest rate that would be similar to what we would offer the customer in a separate financing transaction. Unpaid principal and interest amounts associated with the financed performance obligation and the value of the embedded financing component are presented as Long-term contracts financing receivables in our consolidated balance sheet. We recognize the allocated transaction price of the financing component as interest income over the implied financing term. For fixed-price and cost-reimbursable contracts, we present revenues recognized in excess of billings as contract assets on the balance sheet. Amounts billed and due from our customers under both contract types are classified as receivables on the balance sheet. We only include amounts representing contract change orders, claims or other items in the contract value when we believe the rights and obligations become enforceable. Contract modifications routinely occur to account for changes in contract specifications or requirements. In most cases, contract modifications are for goods or services that are not distinct and, therefore, are accounted for as part of the existing contract. Transaction price estimates include additional consideration for submitted contract modifications or claims when we believe there is an enforceable right to the modification or claim, the amount can be reliably estimated, and its realization is reasonably assured. Amounts representing modifications accounted for as part of the existing contract are included in the transaction price and recognized as an adjustment to sales on a cumulative catch-up basis. In addition, we are subject to audit of incurred costs related to many of our U.S. government contracts. These audits could produce different results than we have estimated for revenue recognized on our cost-based contracts with the U.S. government; however, our experience has been that our costs are acceptable to the government.
Contract Estimates	Contract Estimates: Use of the cost-to-cost or other similar methods of revenue recognition requires us to make reasonably dependable estimates regarding the revenue and cost associated with the design, manufacture and delivery of our products and services. Revisions or adjustments to estimates of the transaction price, estimated costs at completion and estimated profit or loss of a performance obligation are often required as work progresses under a contract, as experience is gained, as facts and circumstances change and as new information is obtained, even though the scope of work required under the contract may not change. Revisions or adjustments may also be required if contract modifications occur. The impact of revisions in profit or loss estimates are recognized on a cumulative catch-up basis in the period in which the revisions are made. The revisions in contract estimates, if significant, can materially affect our results of operations and cash flows, and in some cases result in liabilities to complete contracts in a loss position. The aggregate impact of net changes in contract estimates are presented in the table below (amounts in thousands). Three Months Ended December 31, 2018 2017 Operating income (loss) $ 1,814 $ (929) Net income (loss) from continuing operations 1,271 (736) Diluted earnings per share 0.04 (0.03)
Backlog	Backlog: Backlog (i.e., unfulfilled or remaining performance obligations) represents the sales we expect to recognize for our products and services for which control has not yet transferred to the customer. It comprises both funded backlog (firm orders for which funding is authorized and appropriated) and unfunded backlog. Unexercised contract options and indefinite delivery indefinite quantity (IDIQ) contracts are not included in backlog until the time the option or IDIQ task order is exercised or awarded. For our cost-reimbursable and fixed-priced-incentive contracts, the estimated consideration we expect to receive pursuant to the terms of the contract may exceed the contractual award amount. The estimated consideration is determined at the outset of the contract and is continuously reviewed throughout the contract period. In determining the estimated consideration, we consider the risks related to the technical, schedule and cost impacts to complete the contract and an estimate of any variable consideration. Periodically, we review these risks and may increase or decrease backlog accordingly As of December 31, 2018, our ending backlog was $ 3.814 billion. We expect to recognize approximately 25% of our December 31, 2018 backlog over the next 12 months and approximately 40% over the next 24 months as revenue, with the remainder recognized thereafter.
Disaggregation of Revenue	Disaggregation of Revenue: See Note 14 for information regarding our sales by customer type, contract type and geographic region for each of our segments. We believe those categories best depict how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors.
Accounts Receivable	Accounts Receivable: Receivables consist of billed amounts due from our customers. Due to the nature of our customers, we generally do not require collateral. We have limited exposure to credit risk as we have historically collected substantially all of our receivables. We generally require minimal allowance for doubtful accounts for our customers, which amounted to $1.7 million and $ 1.3 million as of December 31, 2018 and September 30, 2018, respectively.
Inventories	Inventories: We state our inventories at the lower of cost or market. We determine cost using the first-in, first-out (FIFO) method, which approximates current replacement cost. We value our work in process at the actual production and engineering costs incurred to date, including applicable overhead. Any inventoried costs in excess of estimated realizable value are immediately charged to cost of sales.
Contract Assets	Contract Assets : Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. The amounts may not exceed their estimated net realizable value. Contract assets are classified as current assets and, in accordance with industry practice, include amounts that may be billed and collected beyond one year due to the long-cycle nature of many of our contracts.
Long-term capitalized contract costs	Long-term Capitalized Contract Costs: Through September 30, 2018, long-term capitalized contract costs included costs incurred on contracts to develop and manufacture transportation systems for customers for which revenue recognition did not begin until the customers begin operating the systems prior to the adoption of ASC 606. Upon adoption of ASC 606, revenue recognition and cost recognition are no longer deferred in these situations and therefore we no longer have long-term capitalized contract costs.
Contract Liabilities	Contract Liabilities : Contract liabilities (formerly referred to as customer advances prior to the adoption of ASC 606) include advance payments and billings in excess of revenue recognized. Contract liabilities are classified as current liabilities based on our contract operating cycle and calculated on a contract-by-contract basis, net of revenue recognized, at the end of each reporting period.
Recent Accounting Pronouncements	Recently Adopted Accounting Pronouncements – Income Taxes On December 22, 2017 the U.S. government enacted the “Tax Cuts and Jobs Act of 2017” (Tax Act). Due to the complexity of the Tax Act, the SEC issued guidance in SAB 118 which clarified the accounting for income taxes under ASC 740 if certain information was not yet available, prepared or analyzed, in reasonable detail to complete the accounting for income tax effects of the Tax Act. SAB 118 provided for a measurement period of up to one year after the enactment of the Tax Act, during which time the required analyses and accounting must be completed. During fiscal year 2018, we recorded provisional amounts for the income tax effects of the changes in tax law and tax rates, as reasonable estimates were determined by management during this period. During the first quarter of fiscal year 2019, we did not adjust provisional amounts recorded in the prior fiscal year and the SAB 118 measurement period subsequently ended on December 22, 2018. Although we no longer considers these amounts to be provisional, the determination of the Tax Act’s income tax effects may change following future legislation or further interpretation of the Tax Act based on the publication of recently proposed U.S. Treasury regulations and guidance from the Internal Revenue Service and state tax authorities. Recently Adopted Accounting Pronouncements – Other In October 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-16, Intra-Entity Transfers of Assets Other Than Inventory, which requires an entity to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs . ASU 2016-16 was effective for us beginning October 1, 2018 and did not have any significant impact on our consolidated financial statements. In January 2016, the FASB issued ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10), which requires equity investments (except those accounted for under the equity method of accounting, or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income, requires entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes, requires separate presentation of financial assets and financial liabilities by measurement category and form of financial asset, and eliminates the requirement for entities to disclose the methods and significant assumptions used to estimate the fair value that is currently required to be disclosed for financial instruments measured at amortized cost. ASU 2016-01 was adopted by us beginning October 1, 2018 and did not have any significant impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Classification of Certain Cash Receipts and Cash Payments , which provides clarifying guidance on how entities should classify cash receipts and cash payments from specific types of transactions on the statement of cash flows. The guidance also clarifies how the predominance principle should be applied when cash receipts and cash payments have aspects of more than one class of cash flows. ASU 2016-15 was effective for us beginning October 1, 2018 and did not have any significant impact on our consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Restricted Cash , which requires amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the total beginning and ending amounts for the periods shown on the statement of cash flows. ASU 2016-18 was adopted by us beginning October 1, 2018. The application of this accounting standard update did not impact financial results, but resulted in a retrospective change in the presentation of restricted cash, including the inclusion of $27.4 million and $11.8 million of restricted cash on hand at September 30, 2018 and December 31, 2017, respectively, within the beginning and ending amounts of cash and cash equivalents in our Statements of Cash Flows. In addition, changes in the total of cash, cash equivalents and restricted cash are now reflected in our Statements of Cash Flows for all periods presented. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) Clarifying the Definition of a Business . This ASU clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets transferred is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. ASU 2017-01 was adopted by us on October 1, 2018 and did not have any immediate impact on our consolidated financial statements. However, adoption of ASU 2017-01 could impact the accounting for future acquisitions or disposals of assets and activities because the accounting for a business combination differs significantly from that of an asset acquisition. In March 2017, the FASB issued ASU 2017-07 , Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost . The update requires employers to present the service cost component of the net periodic benefit cost in the same income statement line item as other employee compensation costs arising from services rendered during the period. The other components of net benefit cost, including interest cost, expected return on plan assets, amortization of prior service cost/credit and actuarial gain/loss, and settlement and curtailment effects, are to be presented outside of any subtotal of operating income. Employers will have to disclose the line(s) used to present the other components of net periodic benefit cost, if the components are not presented separately in the income statement. We adopted ASU 2017-07 beginning October 1, 2018 and it did not have any significant impact on our consolidated financial statements. The components of net periodic benefit cost, other than the service cost component, are included in other income (expense) in our condensed consolidated statements of income (loss). Recent Accounting Pronouncements – Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases . Under the new guidance, lessees will be required to recognize the following for all leases (with the exception of short-term leases) at the commencement date: (a) a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (b) a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The ASU will be effective for us beginning October 1, 2019 with early adoption permitted. ASU 2016-02 will be adopted on a modified retrospective transition basis for leases existing at, or entered into after the beginning of the earliest comparative period presented in the financial statements. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements and we have determined we will not adopt the new guidance early. In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. This standard removes the second step of the goodwill impairment test, where a determination of the fair value of individual assets and liabilities of a reporting unit was needed to measure the goodwill impairment. Under this updated standard, goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance will be effective for us in our fiscal year beginning October 1, 2020 with early adoption permitted. Adoption of ASU 2017-04 will have no immediate impact on our consolidated financial statements and would only have the potential to impact the amount of any goodwill impairment recorded after the adoption of the ASU. We are currently evaluating whether to adopt the guidance early. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities, which aims to improve the financial reporting of hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. The amendments in this ASU are intended to better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To satisfy that objective, the amendments expand and refine hedge accounting for both non-financial and financial risk components, and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. Additionally, the amendments (1) permit hedge accounting for risk components in hedging relationships involving non-financial risk and interest rate risk; (2) change the guidance for designating fair value hedges of interest rate risk and for measuring the change in fair value of the hedged item in fair value hedges of interest rate risk; (3) continue to allow an entity to exclude option premiums and forward points from the assessment of hedge effectiveness; and (4) permit an entity to exclude the portion of the change in fair value of a currency swap that is attributable to a cross-currency basis spread from the assessment of hedge effectiveness. The amendments in this ASU are effective for us in our annual period beginning October 1, 2019 and interim periods within that year, with early adoption permitted. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements as well as whether to adopt the new guidance early. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement - Disclosure Framework (Topic 820). The updated guidance modifies the disclosure requirements on fair value measurements. The amendments in this accounting standard update are effective for us in our annual period beginning October 1, 2020 and interim periods within that annual period. Early adoption is permitted for any removed or modified disclosures. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements as well as whether to adopt the new guidance early. In August 2018, the FASB issued ASU 2018-14, Defined Benefit Plan - Disclosure Framework (Topic 715) , which modifies the disclosure requirements for employers that sponsor defined benefit pension or other postretirement benefit plans. The guidance removes disclosures that are no longer considered cost beneficial, clarifies the specific requirements of disclosures and adds disclosure requirements identified as relevant. The amendments in this accounting standard update are effective for us in our annual period beginning October 1, 2020. Early adoption is permitted. We are currently evaluating the impact of the application of this accounting standard update on our consolidated financial statements as well as whether to adopt the new guidance early

Basis for Presentation (Tables)

Basis for Presentation (Tables)	3 Months Ended
	Dec. 31, 2018
ASU 2014-09
Schedule of aggregate impact of net changes in contract estimates	The aggregate impact of net changes in contract estimates are presented in the table below (amounts in thousands). Three Months Ended December 31, 2018 2017 Operating income (loss) $ 1,814 $ (929) Net income (loss) from continuing operations 1,271 (736) Diluted earnings per share 0.04 (0.03)

New Accounting Standards Impl_2

New Accounting Standards Implemented (Tables)	3 Months Ended
	Dec. 31, 2018
New Accounting Standards Implemented
Schedule of cumulative effect of changes due to adoption of ASC 606	The table below presents the cumulative effect of the changes made to our Condensed Consolidated Balance Sheet as of October 1, 2018 due to the adoption of ASC 606 (in thousands): Adjustments October 1, 2018 September 30, Due to As Adjusted 2018 ASC 606 Under ASC 606 ASSETS Current assets: Cash and cash equivalents $ 111,834 $ — $ 111,834 Cash in consolidated VIE 374 — 374 Restricted cash 17,400 — 17,400 Restricted cash in consolidated VIE 10,000 — 10,000 Accounts receivable, net 392,367 (236,743) 155,624 Contract assets — 272,210 272,210 Recoverable income taxes 91 — 91 Inventories 84,199 (22,511) 61,688 Assets held for sale 8,177 — 8,177 Other current assets 43,705 — 43,705 Total current assets 668,147 12,956 681,103 Long-term contracts receivables 6,134 (6,134) — Long-term contracts financing receivables — 56,228 56,228 Long-term contracts financing receivables in consolidated VIE — 38,990 38,990 Long-term capitalized contract costs 84,924 (84,924) — Long-term capitalized contract costs in consolidated VIE 1,258 (1,258) — Property, plant and equipment, net 117,546 — 117,546 Deferred income taxes 4,713 389 5,102 Goodwill 333,626 — 333,626 Purchased intangibles, net 73,533 — 73,533 Other assets 14,192 — 14,192 Other noncurrent assets in consolidated VIE 810 — 810 Total assets $ 1,304,883 $ 16,247 $ 1,321,130 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ — $ — $ — Trade accounts payable 125,414 (3,011) 122,403 Trade accounts payable in consolidated VIE 165 — 165 Contract liability — 70,127 70,127 Customer advances 75,941 (75,941) — Accrued compensation and other current liabilities 118,233 583 118,816 Income taxes payable 8,586 — 8,586 Total current liabilities 328,339 (8,242) 320,097 Long-term debt 199,793 — 199,793 Long-term debt in consolidated VIE 9,056 — 9,056 Other long-term liabilities 43,486 — 43,486 Other long-term liabilities in consolidated VIE 13 — 13 Shareholders’ equity: Common stock 45,008 — 45,008 Retained earnings 801,834 19,834 821,668 Accumulated other comprehensive loss (110,643) — (110,643) Treasury stock at cost (36,078) — (36,078) Shareholders’ equity related to Cubic 700,121 19,834 719,955 Noncontrolling interest in VIE 24,075 4,655 28,730 Total shareholders’ equity 724,196 24,489 748,685 Total liabilities and shareholders’ equity $ 1,304,883 $ 16,247 $ 1,321,130 The table below presents how the adoption of ASC 606 affected certain line items on our Condensed Consolidated Statements of Income (Loss) for the three months ended December 31, 2018 (in thousands): Three months ended December 31, 2018 As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 Net sales: Products $ 152,562 $ 29,691 $ 182,253 Services 124,262 (1,256) 123,006 276,824 28,435 305,259 Costs and expenses: Products 100,544 24,941 125,485 Services 92,785 — 92,785 Selling, general and administrative expenses 62,823 163 62,986 Research and development 12,012 — 12,012 Amortization of purchased intangibles 10,565 — 10,565 Restructuring costs 1,992 — 1,992 280,721 25,104 305,825 Operating loss (3,897) 3,331 (566) Other income (expenses): Interest and dividend income 56 1,178 1,234 Interest expense (4,032) — (4,032) Other income (expense), net (4,753) — (4,753) Loss from continuing operations before income taxes (12,626) 4,509 (8,117) Income tax provision 2,473 24 2,497 Net loss (15,099) 4,485 (10,614) Less noncontrolling interest in loss of VIE (5,981) 1,954 (4,027) Net loss attributable to Cubic $ (9,118) $ 2,531 $ (6,587) Net income (loss) per share: Basic earnings per share attributable to Cubic $ (0.32) $ 0.09 $ (0.23) Diluted earnings per share attributable to Cubic $ (0.32) $ 0.09 $ (0.23) The table below quantifies the impact of adopting ASC 606 on segment net sales and operating income (loss) for the three months ended December 31, 2018 (in thousands): Three months ended December 31, 2018 As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 Sales: (in thousands) Cubic Transportation Systems $ 172,728 $ 9,079 $ 181,807 Cubic Mission Solutions 45,363 1,030 46,393 Cubic Global Defense 58,733 18,326 77,059 Total sales $ 276,824 $ 28,435 $ 305,259 Operating income (loss): Cubic Transportation Systems $ 9,186 $ 1,790 $ 10,976 Cubic Mission Solutions (5,191) 251 (4,940) Cubic Global Defense 1,607 1,290 2,897 Unallocated corporate expenses (9,499) — (9,499) Total operating income (loss) $ (3,897) $ 3,331 $ (566) The table below presents how the impact of the adoption of ASC 606 affected certain line items on our Condensed Consolidated Balance Sheet at December 31, 2018 (in thousands): As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 ASSETS Current assets: Cash and cash equivalents $ 75,174 $ — $ 75,174 Cash in consolidated VIE 421 — 421 Restricted cash 17,889 — 17,889 Restricted cash in consolidated VIE 10,000 — 10,000 Accounts receivable, net 390,855 (272,564) 118,291 Contract assets — 320,277 320,277 Recoverable income taxes 1,086 235 1,321 Inventories 121,223 (29,022) 92,201 Assets held for sale 8,177 — 8,177 Other current assets 40,924 — 40,924 Total current assets 665,749 18,926 684,675 Long-term contracts receivables 4,064 (4,064) — Long-term contracts financing receivables — 44,936 44,936 Long-term contracts financing receivables in consolidated VIE — 52,996 52,996 Long-term capitalized contract costs 95,894 (95,894) — Long-term capitalized contract costs in consolidated VIE 1,551 (1,551) — Property, plant and equipment, net 125,298 — 125,298 Deferred income taxes 4,298 389 4,687 Goodwill 484,329 — 484,329 Purchased intangibles, net 137,201 — 137,201 Other assets 13,871 — 13,871 Other noncurrent assets in consolidated VIE 962 — 962 Total assets $ 1,533,217 $ 15,738 $ 1,548,955 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ 64,500 $ — $ 64,500 Trade accounts payable 111,310 (2,216) 109,094 Trade accounts payable in consolidated VIE 205 — 205 Contract liability — 69,713 69,713 Customer advances 80,993 (80,993) — Accrued compensation and other current liabilities 82,323 — 82,323 Income taxes payable 6,512 259 6,771 Total current liabilities 345,843 (13,237) 332,606 Long-term debt 199,801 — 199,801 Long-term debt in consolidated VIE 15,357 — 15,357 Other long-term liabilities 43,838 — 43,838 Other long-term liabilities in consolidated VIE 6,146 — 6,146 Shareholders’ equity: Common stock 260,141 — 260,141 Retained earnings 792,717 22,366 815,083 Accumulated other comprehensive loss (112,642) — (112,642) Treasury stock at cost (36,078) — (36,078) Shareholders’ equity related to Cubic 904,138 22,366 926,504 Noncontrolling interest in VIE 18,094 6,609 24,703 Total shareholders’ equity 922,232 28,975 951,207 Total liabilities and shareholders’ equity $ 1,533,217 $ 15,738 $ 1,548,955

Acquisitions and Divestitures (

Acquisitions and Divestitures (Tables)	3 Months Ended
	Dec. 31, 2018
Acquisitions
Schedule of income (loss) and carrying amounts of assets and liabilities from discontinued operations	Three Months Ended December 31, 2017 Net sales $ 92,293 Costs and expenses: Cost of sales 83,120 Selling, general and administrative expenses 3,667 Amortization of purchased intangibles 608 Other income (5) Earnings from discontinued operations before income taxes 4,903 Income tax provision 3,254 Net income from discontinued operations $ 1,649
Schedule of unaudited pro forma information	The following unaudited pro forma information presents our consolidated results of operations as if Trafficware, Shield, and MotionDSP had been included in our consolidated results since October 1, 2017 (in millions): Three Months Ended December 31, 2018 2017 Net sales $ 307.1 $ 261.8 Net loss $ (6.3) $ (13.4)
Schedule of changes in the carrying amount of goodwill	Changes in goodwill for the three months ended December 31, 2018 were as follows for each of our reporting units (in thousands): Transportation Cubic Mission Cubic Global Systems Solutions Defense Total Net balances at September 30, 2018 $ 49,786 $ 138,127 $ 145,713 $ 333,626 Acquisitions 151,670 — — 151,670 Foreign currency exchange rate changes (798) (73) (96) (967) Net balances at December 31, 2018 $ 200,658 $ 138,054 $ 145,617 $ 484,329
Trafficware
Acquisitions
Schedule of Business Combination Operating Results	Trafficware’s sales and results of operations included in our operating results for the quarter ended December 31, 2018 and 2017 were as follows (in millions): Three Months Ended December 31, 2018 2017 Sales $ 10.5 $ — Operating loss (3.3) — Net loss after taxes (3.3) —
Schedule of Business Combination components of operating results	Trafficware’s operating results above included the following amounts for the quarter (in millions): Three Months Ended December 31, 2018 2017 Amortization $ 4.3 $ — Acquisition-related expenses 1.4 —
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): Technology $ 43.3 Customer Relationships 21.9 Backlog 4.8 Trade Name 4.6 Accounts Receivable 10.4 Inventory 9.4 Accounts payable and accrued expenses (6.5) Other net assets acquired (liabilities assumed) (2.0) Net identifiable assets acquired 85.9 Goodwill 151.7 Net assets acquired $ 237.6
Schedule of estimated amortization expense related to acquisition	The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of Trafficware for fiscal years 2019 through 2023 and thereafter is as follows (in millions): Year Ended September 30, 2019 $ 15.3 2020 11.4 2021 11.4 2022 11.4 2023 6.4 Thereafter 18.8
Shield Aviation
Acquisitions
Schedule of Business Combination Operating Results	Shield’s sales and results of operations included in our operating results for the three months ended December 31, 2018 and 2017 were as follows (in millions): December 31, 2018 2017 Sales $ — $ — Operating loss (0.9) — Net loss after taxes (0.9) —
Schedule of Business Combination components of operating results	Shield’s operating results above included the following amounts for the three months ended December 31, 2018 and 2017 (in millions): December 31, 2018 2017 Amortization $ 0.2 $ — Acquisition-related expenses — —
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date	The acquisition of Shield was paid for with funds from existing cash resources. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Technology $ 6.0 Other net assets acquired 0.3 Net identifiable assets acquired 6.3 Goodwill 6.5 Net assets acquired $ 12.8
Schedule of estimated amortization expense related to acquisition	The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of Shield for fiscal years 2019 through 2023 and thereafter is as follows (in millions): Year Ended September 30, 2019 $ 0.8 2020 0.8 2021 0.8 2022 0.8 2023 0.8 Thereafter 2.1
MotionDSP
Acquisitions
Schedule of Business Combination Operating Results	MotionDSP’s sales and results of operations included in our operating results since its consolidation in our financial statements for the quarters ended December 31, 2018 and 2017 were as follows (in millions): December 31, 2018 2017 Sales $ 0.2 $ — Operating loss (0.4) — Net loss after taxes (0.4) —
Schedule of Business Combination components of operating results	MotionDSP’s operating results above included the following amounts for the quarters ended December 31, 2018 and 2017 (in millions): December 31, 2018 2017 Amortization $ 0.2 $ — Acquisition-related expenses 0.1 —
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date	The acquisition of MotionDSP was paid for with funds from existing cash resources. The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Customer relationships $ 0.2 Technology 4.5 Trade name 0.1 Accounts payable and accrued expenses (0.3) Other noncurrent liabilities (0.8) Other net liabilities assumed (0.9) Net identifiable assets acquired 2.8 Goodwill 6.7 Net assets acquired $ 9.5
Schedule of estimated amortization expense related to acquisition	The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of MotionDSP for fiscal years 2019 through 2023 and thereafter is as follows (in millions): Year Ended September 30, 2019 $ 0.7 2020 0.7 2021 0.7 2022 0.7 2023 0.7 Thereafter 0.8

Variable Interest Entities (Tab

Variable Interest Entities (Tables)	3 Months Ended
	Dec. 31, 2018
Variable Interest Entities
Schedule of summary of the consolidated net assets and liabilities	The assets and liabilities of OpCo. that are included in our condensed consolidated balance sheets at December 31, 2018 and September 30, 2018 are as follows: December 31, September 30, 2018 2018 (in thousands) Cash $ 421 $ 374 Restricted cash 10,000 10,000 Long-term capitalized contract costs — 1,258 Long-term contracts financing receivable 52,996 — Other noncurrent assets 962 810 Total assets $ 64,379 $ 12,442 Trade accounts payable $ 205 $ 165 Other long-term liabilities 6,146 13 Long-term debt 15,357 9,056 Total liabilities $ 21,708 $ 9,234 Total Cubic equity 39 (304) Noncontrolling interests 24,703 24,348 Total liabilities and owners' equity $ 46,450 $ 33,278
Schedule of revenue, operating profit, and other income/(expense), net	The revenue, operating income, and other income (expense), net of OpCo. that are included in our condensed consolidated statement of income (loss) for the three months ended December 31, 2018 and 2017 are as follows: Three Months Ended December 31, 2018 2017 Revenue $ 1,961 $ — Operating income 1,668 — Other income (expense), net (6,133) — Interest income 503 — Interest expense (512) —

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	3 Months Ended
	Dec. 31, 2018
Net Income (Loss) Per Share
Schedule of computation of basic and diluted EPS	The weighted-average number of shares outstanding used to compute net loss per common share were as follows (in thousands): December 31, 2018 2017 Weighted average shares - basic 28,492 27,207 Effect of dilutive securities — — Weighted average shares - diluted 28,492 27,207 Number of anti-dilutive securities 990 1,040

Contract Assets and Liabiliti_2

Contract Assets and Liabilities (Tables)	3 Months Ended
	Dec. 31, 2018
Contract Assets and Liabilities
Schedule of contract assets and liabilities	Contract assets and contract liabilities were as follows (in thousands): December 31, October 1, 2018 2018 Contract assets $ 320,277 $ 272,210 Contract liabilities $ 69,713 $ 70,128

Balance Sheet Details (Tables)

Balance Sheet Details (Tables)	3 Months Ended
	Dec. 31, 2018
Balance Sheet Details
Schedule of components of accounts receivable	The components of accounts receivable are as follows (in thousands): December 31, September 30, 2018 2018 Accounts receivable Billed $ 119,943 $ 156,948 Unbilled — 242,877 Allowance for doubtful accounts (1,652) (1,324) Total accounts receivable 118,291 Less estimated amounts not currently due — (6,134) Current accounts receivable $ 118,291 $
Components of inventories	Inventories consist of the following (in thousands): December 31, September 30, 2018 2018 Finished products $ 7,716 $ 7,099 Work in process and inventoried costs under long-term contracts 49,295 63,169 Materials and purchased parts 35,190 23,710 Customer advances — (9,779) Net inventories $ 92,201 $ 84,199

Fair Value of Financial Instr_2

Fair Value of Financial Instruments (Tables)	3 Months Ended
	Dec. 31, 2018
Fair Value of Financial Instruments
Summary of assets and liabilities measured and recorded at fair value on Balance Sheet on a recurring basis	The following table presents assets and liabilities measured and recorded at fair value on our balance sheets on a recurring basis (in thousands): December 31, 2018 September 30, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Assets Cash equivalents $ — $ — $ — $ — $ 9,000 $ — $ — $ 9,000 Current derivative assets — 5,036 — 5,036 — 1,803 — 1,803 Noncurrent derivative assets — 581 — 581 — 314 — 314 Total assets measured at fair value $ — $ 5,617 $ — $ 5,617 $ 9,000 $ 2,117 $ — $ 11,117 Liabilities Current derivative liabilities — 3,367 — 3,367 — 1,657 — 1,657 Noncurrent derivative liabilities — — — — — 75 — 75 Contingent consideration to seller of Deltenna — — 1,343 1,343 — — 1,081 1,081 Contingent consideration to seller of Shield — — 5,618 5,618 — — 5,618 5,618 Contingent consideration to seller of TeraLogics - revenue targets — — — — — — 1,750 1,750 Contingent consideration to seller of H4 Global — — 832 832 — — 665 665 Total liabilities measured at fair value $ — $ 3,367 $ 7,793 $ 11,160 $ — $ 1,732 $ 9,114 $ 10,846
Summary of change in fair value of contingent consideration liability	As of December 31, 2018, the following table summarizes the change in fair value of our Level 3 contingent consideration liabilities (in thousands): H4 Global TeraLogics (Revenue Targets) Deltenna Shield Total Net balances at September 30, 2018 $ 665 $ 1,750 $ 1,081 $ 5,618 $ 9,114 Cash paid to seller — (1,750) — — (1,750) Total remeasurement (gain) loss recognized in earnings 167 — 262 — 429 Balance as of December 31, 2018 $ 832 $ — $ 1,343 $ 5,618 $ 7,793
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, 2018 2018 Fair value $ 195.4 $ 193.7 Carrying value $ 200.0 $ 200.0

Pension Plans (Tables)

Pension Plans (Tables)	3 Months Ended
	Dec. 31, 2018
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, 2018 2017 Service cost $ 149 $ 151 Interest cost 1,910 1,880 Expected return on plan assets (3,009) (3,525) Amortization of actuarial loss 528 692 Administrative expenses 97 110 Net pension cost (benefit) $ (325) $ (692)

Stockholders_ Equity (Tables)

Stockholders’ Equity (Tables)	3 Months Ended
	Dec. 31, 2018
Stockholders’ Equity
Summary of assumptions used for the valuation of the RSUs with performance and market-based vesting that were granted	RSU's granted during the three months ended December 31, 2018 Date of grant November 21, 2018 Closing average share value (mean) $ 68.56 Performance period begins October 1, 2018 Performance period ends September 30, 2021 Risk-free interest rate 2.8% Expected volatility 34%
Summary of RSU activity	Unvested Restricted Stock Units Weighted-Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2018 366,460 $ 52.31 Granted 195,033 64.33 Vested (128,949) 50.61 Forfeited (15,391) 50.04 Unvested at December 31, 2018 417,153 $ 58.54 Unvested Restricted Stock Units with Performance Based Vesting Weighted-Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2018 635,628 $ 50.11 Granted — — Vested — — Forfeited (295,759) 43.86 Unvested at December 31, 2018 339,869 $ 55.54 Unvested Restricted Stock Units with Performance and Market Based Vesting Weighted-Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2018 — $ — Granted 219,890 67.40 Vested — — Forfeited — — Unvested at December 31, 2018 219,890 $ 67.40
Schedule of stock-based compensation expense related to stock-based awards	We recorded non-cash compensation expense related to stock-based awards as follows (in thousands): Three Months Ended December 31, 2018 2017 Cost of sales $ 313 $ 156 Selling, general and administrative 2,407 1,471 $ 2,720 $ 1,627

Derivative Instruments and He_2

Derivative Instruments and Hedging Activities (Tables)	3 Months Ended
	Dec. 31, 2018
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, 2018 and September 30, 2018 (in thousands): Notional Principal December 31, 2018 September 30, 2018 Instruments designated as accounting hedges: Foreign currency forwards $ 169,095 $ 169,406 Instruments not designated as accounting hedges: Foreign currency forwards $ 24,824 $ 27,909
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, 2018 and September 30, 2018 (in thousands): Fair Value Balance Sheet Location December 31, 2018 September 30, 2018 Asset derivatives: Foreign currency forwards Other current assets $ 5,036 $ 1,803 Foreign currency forwards Other noncurrent assets 582 314 $ 5,618 $ 2,117 Liability derivatives: Foreign currency forwards Other current liabilities $ 3,367 $ 1,657 Foreign currency forwards Other noncurrent liabilities — 75 Total $ 3,367 $ 1,732
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 income (loss) for the three months ended December 31, 2018 and 2017 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 December 31, 2018 December 31, 2017 Gains (losses) Gains (losses) Gains (losses) reclassified into reclassified into recognized in earnings - Gains (losses) earnings - Derivative Type OCI Effective Portion recognized in OCI Effective Portion Foreign currency forwards $ 1,779 $ (33) $ 656 $ (774)

Segment Information (Tables)

Segment Information (Tables)	3 Months Ended
	Dec. 31, 2018
Segment Information
Schedule of business segment financial data	Business segment financial data is as follows (in millions): Three Months Ended December 31, 2018 2017 Sales: Cubic Transportation Systems $ 181.8 $ 146.5 Cubic Mission Solutions 46.4 33.1 Cubic Global Defense 77.1 68.8 Total sales $ 305.3 $ 248.4 Operating income (loss): Cubic Transportation Systems $ 11.0 $ 9.9 Cubic Mission Solutions (4.9) (8.9) Cubic Global Defense 2.9 1.4 Unallocated corporate expenses (9.6) (14.3) Total operating income (loss) $ (0.6) $ (11.9) Depreciation and amortization: Cubic Transportation Systems $ 7.7 $ 3.3 Cubic Mission Solutions 5.4 5.9 Cubic Global Defense 2.2 2.1 Corporate 0.7 1.1 Total depreciation and amortization $ 16.0 $ 12.4
Schedule of Disaggregation of Total Net Sales	Disaggregation of Total Net Sales . We disaggregate our sales from contracts with customers by end customer, contract type, deliverable type and revenue recognition method for each of our segments, as we believe these factors affect the nature, amount, timing, and uncertainty of our revenue and cash flows. Sales by Geographic Region (in millions) : Three months ended December 31, 2018 CTS CMS CGD Total United States $ 91.3 $ 45.5 $ 35.7 $ 172.5 United Kingdom 50.9 0.4 4.3 55.6 Australia 29.8 0.1 5.6 35.5 Far East/Middle East 4.4 0.4 18.4 23.2 Other 5.4 — 13.1 18.5 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3 Sales by End Customer. We are the prime customer for the vast majority of our sales. The table below presents total net sales disaggregated by end customer (in millions): Three months ended December 31, 2018 CTS CMS CGD Total U.S. Federal Government and State and Local Municipalities $ 90.8 $ 45.8 $ 32.4 $ 169.0 Other 91.0 0.6 44.7 136.3 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3 Sales by Contract Type. Substantially all of our contracts are fixed-price type contracts. Sales included in Other contract types represent cost plus and time and material type contracts. On a fixed-price type contract, we agrees to perform the contractual statement of work for a predetermined sales price. On a cost-plus type contract, we are is paid our allowable incurred costs plus a profit which can be fixed or variable depending on the contract’s fee arrangement up to predetermined funding levels determined by the customer. On a time-and-material type contract, we are paid on the basis of direct labor hours expended at specified fixed-price hourly rates (that include wages, overhead, allowable general and administrative expenses and profit) and materials at cost. The table below presents total net sales disaggregated by contract type (in millions): Three months ended December 31, 2018 CTS CMS CGD Total Fixed Price $ 178.2 $ 45.8 $ 71.6 $ 295.6 Other 3.6 0.6 5.5 9.7 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3 Sales by Deliverable Type: The table below presents total net sales disaggregated by the type of deliverable, which is determined by us at the performance obligation level (in millions): Three months ended December 31, 2018 CTS CMS CGD Total Product $ 92.0 $ 40.6 $ 49.7 $ 182.3 Service 89.8 5.8 27.4 123.0 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3 Revenue Recognition Method: The table below presents total net sales disaggregated based on the revenue recognition method applied (in millions): Three months ended December 31, 2018 CTS CMS CGD Total Point in Time $ 16.7 $ 34.4 $ 0.5 $ 51.6 Over Time 165.1 12.0 76.6 253.7 Total sales $ 181.8 $ 46.4 $ 77.1 $ 305.3

Basis for Presentation - ASC 60

Basis for Presentation - ASC 606 (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Oct. 01, 2018
Revenue, Initial Application Period Cumulative Effect Transition
Operating income (loss)	$ (566)	$ (11,902)
Net income (loss) from continuing operations	$ (10,614)	$ (11,435)
Diluted earnings per share attributable to Cubic (in dollars per share)	$ (0.23)	$ (0.36)
ASU 2014-09 | ASC 606
Revenue, Initial Application Period Cumulative Effect Transition
Cumulative effect of accounting standard adoption			$ 24,500
Operating income (loss)	$ 3,331
Diluted earnings per share attributable to Cubic (in dollars per share)	$ 0.09
ASU 2014-09 | ASC 606 | Change in Estimates
Revenue, Initial Application Period Cumulative Effect Transition
Operating income (loss)	$ 1,814	$ (929)
Net income (loss) from continuing operations	$ 1,271	$ (736)
Diluted earnings per share attributable to Cubic (in dollars per share)	$ 0.04	$ (0.03)

Basis for Presentation - Backlo

Basis for Presentation - Backlog (Details) $ in Millions	Dec. 31, 2018USD ($)
Basis for Presentation
Revenue, Remaining performance obligation	$ 3,814
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining performance obligation (in percent)	25.00%
Contract term	12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining performance obligation (in percent)	40.00%
Contract term	24 months

Basis for Presentation - Disagg

Basis for Presentation - Disaggregation of Revenue (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018
Basis for Presentation
Allowance for doubtful accounts	$ 1,652	$ 1,324

Basis for Presentation - Recent

Basis for Presentation - Recently Adopted Accounting Pronouncements (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Basis for Presentation
Restricted cash	$ 27.4	$ 11.8

New Accounting Standards Impl_3

New Accounting Standards Implemented (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2018	Oct. 01, 2018
Revenue, Initial Application Period Cumulative Effect Transition
Retained earnings	$ 815,083		$ 801,834	$ 821,668
Net sales	305,259	$ 248,391
ASU 2014-09 | ASC 606
Revenue, Initial Application Period Cumulative Effect Transition
Retained earnings	22,366		19,834
Net sales	$ 28,435		$ 114,900

New Accounting Standards Impl_4

New Accounting Standards Implemented - Cumulative effect on Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Oct. 01, 2018	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Restricted cash			$ 27,400	$ 11,800
Accounts receivable - net	$ 118,291	$ 155,624	392,367
Contract assets	320,277	272,210
Recoverable income taxes	1,321	91	91
Inventories	92,201	61,688	84,199
Assets held for sale	8,177	8,177	8,177
Other current assets	40,924	43,705	43,705
Total current assets	684,675	681,103	668,147
Long-term contracts receivables			6,134
Long-term contracts financing receivables			6,134
Property, plant and equipment, net	125,298	117,546	117,546
Deferred income taxes	4,687	5,102	4,713
Goodwill	484,329	333,626	333,626
Purchased intangibles, net	137,201	73,533	73,533
Other assets	13,871
Total assets	1,548,955	1,321,130	1,304,883
Current liabilities:
Short-term borrowings	64,500
Contract liabilities	69,713	70,127
Customer advances			75,941
Accrued compensation and other current liabilities	82,323	118,816	118,233
Income taxes payable	6,771	8,586	8,586
Total current liabilities	332,606	320,097	328,339
Shareholders' equity:
Common stock	260,141	45,008	45,008
Retained earnings	815,083	821,668	801,834
Accumulated other comprehensive loss	(112,642)	(110,643)	(110,643)
Treasury stock at cost	(36,078)	(36,078)	(36,078)
Shareholders’ equity related to Cubic	926,504	719,955	700,121
Noncontrolling interest in consolidated VIE	24,703	28,730	24,075
Total shareholders’ equity	951,207	748,685	724,196
Total liabilities and shareholders' equity	1,548,955	1,321,130	1,304,883
Cubic Corporation Excluding VIE
Current assets:
Cash and cash equivalents	75,174	111,834	111,834
Restricted cash	17,889	17,400	17,400
Long-term contracts financing receivables	44,936	56,228
Long-term capitalized contract costs			84,924
Other assets	13,871	14,192	14,192
Current liabilities:
Trade accounts payable	109,094	122,403	125,414
Long-term debt	199,801	199,793	199,793
Other long term liabilities	43,838	43,486	43,486
OpCo.
Current assets:
Cash and cash equivalents	421	374	374
Restricted cash	10,000	10,000	10,000
Long-term contracts financing receivables	52,996	38,990
Long-term capitalized contract costs			1,258
Other assets	962	810	810
Current liabilities:
Trade accounts payable	205	165	165
Long-term debt	15,357	9,056	9,056
Other long term liabilities	6,146	$ 13	13
ASU 2014-09 | ASC 606
Current assets:
Accounts receivable - net	(272,564)		(236,743)
Contract assets	320,277		272,210
Recoverable income taxes	235
Inventories	(29,022)		(22,511)
Total current assets	18,926		12,956
Long-term contracts receivables	(4,064)		(6,134)
Deferred income taxes	389		389
Total assets	15,738		16,247
Current liabilities:
Contract liabilities	69,713		70,127
Customer advances	(80,993)		(75,941)
Accrued compensation and other current liabilities			583
Income taxes payable	259
Total current liabilities	(13,237)		(8,242)
Shareholders' equity:
Retained earnings	22,366		19,834
Shareholders’ equity related to Cubic	22,366		19,834
Noncontrolling interest in consolidated VIE	6,609		4,655
Total shareholders’ equity	28,975		24,489
Total liabilities and shareholders' equity	15,738		16,247
ASU 2014-09 | Cubic Corporation Excluding VIE | ASC 606
Current assets:
Long-term contracts financing receivables	44,936		56,228
Long-term capitalized contract costs	(95,894)		(84,924)
Current liabilities:
Trade accounts payable	(2,216)		(3,011)
ASU 2014-09 | OpCo. | ASC 606
Current assets:
Long-term contracts financing receivables	52,996		38,990
Long-term capitalized contract costs	$ (1,551)		$ (1,258)

New Accounting Standards Impl_5

New Accounting Standards Implemented - Effect on Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2018
Net sales:
Net sales	$ 305,259	$ 248,391
Costs and expenses:
Selling, general and administrative expenses	62,986	61,680
Research and development	12,012	11,977
Amortization of purchased intangibles	10,565	7,351
Restructuring costs	1,992	1,495
Total costs and expenses	305,825	260,293
Operating loss	(566)	(11,902)
Other income (expenses):
Interest and dividend income	1,234	482
Interest expense	(4,032)	(2,674)
Other income (expense), net	(4,753)	(78)
Loss from continuing operations before income taxes	(8,117)	(14,172)
Income tax (benefit) provision	2,497	(2,737)
Net loss	(10,614)	(9,786)
Less noncontrolling interest in loss of VIE	(4,027)
Net loss attributable to Cubic	$ (6,587)	$ (9,786)
Basic
Basic earnings per share attributable to Cubic (in dollars per share)	$ (0.23)	$ (0.36)
Diluted
Diluted earnings per share attributable to Cubic (in dollars per share)	$ (0.23)	$ (0.36)
ASC 605 | ASU 2014-09
Net sales:
Net sales	$ 276,824
Costs and expenses:
Selling, general and administrative expenses	62,823
Research and development	12,012
Amortization of purchased intangibles	10,565
Restructuring costs	1,992
Total costs and expenses	280,721
Operating loss	(3,897)
Other income (expenses):
Interest and dividend income	56
Interest expense	(4,032)
Other income (expense), net	(4,753)
Loss from continuing operations before income taxes	(12,626)
Income tax (benefit) provision	2,473
Net loss	(15,099)
Less noncontrolling interest in loss of VIE	(5,981)
Net loss attributable to Cubic	$ (9,118)
Basic
Basic earnings per share attributable to Cubic (in dollars per share)	$ (0.32)
Diluted
Diluted earnings per share attributable to Cubic (in dollars per share)	$ (0.32)
ASC 606 | ASU 2014-09
Net sales:
Net sales	$ 28,435		$ 114,900
Costs and expenses:
Selling, general and administrative expenses	163
Total costs and expenses	25,104
Operating loss	3,331
Other income (expenses):
Interest and dividend income	1,178
Loss from continuing operations before income taxes	4,509
Income tax (benefit) provision	24
Net loss	4,485
Less noncontrolling interest in loss of VIE	1,954
Net loss attributable to Cubic	$ 2,531
Basic
Basic earnings per share attributable to Cubic (in dollars per share)	$ 0.09
Diluted
Diluted earnings per share attributable to Cubic (in dollars per share)	$ 0.09
Products
Net sales:
Net sales	$ 182,253	$ 131,743
Costs and expenses:
Costs	125,485	91,573
Products | ASC 605 | ASU 2014-09
Net sales:
Net sales	152,562
Costs and expenses:
Costs	100,544
Products | ASC 606 | ASU 2014-09
Net sales:
Net sales	29,691
Costs and expenses:
Costs	24,941
Services
Net sales:
Net sales	123,006	116,648
Costs and expenses:
Costs	92,785	$ 86,217
Services | ASC 605 | ASU 2014-09
Net sales:
Net sales	124,262
Costs and expenses:
Costs	92,785
Services | ASC 606 | ASU 2014-09
Net sales:
Net sales	$ (1,256)

New Accounting Standards Impl_6

New Accounting Standards Implemented - Impact on segment net sales and operating income (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2018
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	$ 305,259	$ 248,391
Operating income (loss)	(566)	(11,902)
ASU 2014-09 | ASC 605
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	276,824
Operating income (loss)	(3,897)
ASU 2014-09 | ASC 606
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	28,435		$ 114,900
Operating income (loss)	3,331
Unallocated corporate expenses and other
Revenue, Initial Application Period Cumulative Effect Transition
Operating income (loss)	(9,499)	(14,300)
Unallocated corporate expenses and other | ASU 2014-09 | ASC 605
Revenue, Initial Application Period Cumulative Effect Transition
Operating income (loss)	(9,499)
Transportation Systems
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	181,807	146,500
Operating income (loss)	10,976	9,900
Transportation Systems | ASU 2014-09 | ASC 605
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	172,728
Operating income (loss)	9,186
Transportation Systems | ASU 2014-09 | ASC 606
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	9,079
Operating income (loss)	1,790
Cubic Mission Solutions
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	46,393	33,100
Operating income (loss)	(4,940)	(8,900)
Cubic Mission Solutions | ASU 2014-09 | ASC 605
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	45,363
Operating income (loss)	(5,191)
Cubic Mission Solutions | ASU 2014-09 | ASC 606
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	1,030
Operating income (loss)	251
Cubic Global Defense
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	77,059	68,800
Operating income (loss)	2,897	$ 1,400
Cubic Global Defense | ASU 2014-09 | ASC 605
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	58,733
Operating income (loss)	1,607
Cubic Global Defense | ASU 2014-09 | ASC 606
Revenue, Initial Application Period Cumulative Effect Transition
Net sales	18,326
Operating income (loss)	$ 1,290

New Accounting Standards Impl_7

New Accounting Standards Implemented - Impact on Balance Sheet (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Oct. 01, 2018	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Restricted cash			$ 27,400	$ 11,800
Accounts receivable - net	$ 118,291	$ 155,624	392,367
Contract assets	320,277	272,210
Recoverable income taxes	1,321	91	91
Inventories	92,201	61,688	84,199
Assets held for sale	8,177	8,177	8,177
Other current assets	40,924	43,705	43,705
Total current assets	684,675	681,103	668,147
Long-term contracts receivables			6,134
Long-term contracts financing receivables			6,134
Property, plant and equipment, net	125,298	117,546	117,546
Deferred income taxes	4,687	5,102	4,713
Goodwill	484,329	333,626	333,626
Purchased intangibles, net	137,201	73,533	73,533
Other assets	13,871
Total assets	1,548,955	1,321,130	1,304,883
Current liabilities:
Short-term borrowings	64,500
Contract liabilities	69,713	70,127
Customer advances			75,941
Accrued compensation and other current liabilities	82,323	118,816	118,233
Income taxes payable	6,771	8,586	8,586
Total current liabilities	332,606	320,097	328,339
Shareholders' equity:
Common stock	260,141	45,008	45,008
Retained earnings	815,083	821,668	801,834
Accumulated other comprehensive loss	(112,642)	(110,643)	(110,643)
Treasury stock at cost	(36,078)	(36,078)	(36,078)
Shareholders’ equity related to Cubic	926,504	719,955	700,121
Noncontrolling interest in consolidated VIE	24,703	28,730	24,075
Total shareholders’ equity	951,207	748,685	724,196
Total liabilities and shareholders' equity	1,548,955	1,321,130	1,304,883
ASU 2014-09 | ASC 605
Current assets:
Accounts receivable - net	390,855
Recoverable income taxes	1,086
Inventories	121,223
Assets held for sale	8,177
Other current assets	40,924
Total current assets	665,749
Long-term contracts receivables	4,064
Property, plant and equipment, net	125,298
Deferred income taxes	4,298
Goodwill	484,329
Purchased intangibles, net	137,201
Other assets	13,871
Total assets	1,533,217
Current liabilities:
Short-term borrowings	64,500
Customer advances	80,993
Accrued compensation and other current liabilities	82,323
Income taxes payable	6,512
Total current liabilities	345,843
Shareholders' equity:
Common stock	260,141
Retained earnings	792,717
Accumulated other comprehensive loss	(112,642)
Treasury stock at cost	(36,078)
Shareholders’ equity related to Cubic	904,138
Noncontrolling interest in consolidated VIE	18,094
Total shareholders’ equity	922,232
Total liabilities and shareholders' equity	1,533,217
ASU 2014-09 | ASC 606
Current assets:
Accounts receivable - net	(272,564)		(236,743)
Contract assets	320,277		272,210
Recoverable income taxes	235
Inventories	(29,022)		(22,511)
Total current assets	18,926		12,956
Long-term contracts receivables	(4,064)		(6,134)
Deferred income taxes	389		389
Total assets	15,738		16,247
Current liabilities:
Contract liabilities	69,713		70,127
Customer advances	(80,993)		(75,941)
Accrued compensation and other current liabilities			583
Income taxes payable	259
Total current liabilities	(13,237)		(8,242)
Shareholders' equity:
Retained earnings	22,366		19,834
Shareholders’ equity related to Cubic	22,366		19,834
Noncontrolling interest in consolidated VIE	6,609		4,655
Total shareholders’ equity	28,975		24,489
Total liabilities and shareholders' equity	15,738		16,247
Cubic Corporation Excluding VIE
Current assets:
Cash and cash equivalents	75,174	111,834	111,834
Restricted cash	17,889	17,400	17,400
Long-term contracts financing receivables	44,936	56,228
Long-term capitalized contract costs			84,924
Other assets	13,871	14,192	14,192
Current liabilities:
Trade accounts payable	109,094	122,403	125,414
Long-term debt	199,801	199,793	199,793
Other long term liabilities	43,838	43,486	43,486
Cubic Corporation Excluding VIE | ASU 2014-09 | ASC 605
Current assets:
Cash and cash equivalents	75,174
Restricted cash	17,889
Long-term capitalized contract costs	95,894
Current liabilities:
Trade accounts payable	111,310
Long-term debt	199,801
Other long term liabilities	43,838
Cubic Corporation Excluding VIE | ASU 2014-09 | ASC 606
Current assets:
Long-term contracts financing receivables	44,936		56,228
Long-term capitalized contract costs	(95,894)		(84,924)
Current liabilities:
Trade accounts payable	(2,216)		(3,011)
OpCo.
Current assets:
Cash and cash equivalents	421	374	374
Restricted cash	10,000	10,000	10,000
Long-term contracts financing receivables	52,996	38,990
Long-term capitalized contract costs			1,258
Other assets	962	810	810
Current liabilities:
Trade accounts payable	205	165	165
Long-term debt	15,357	9,056	9,056
Other long term liabilities	6,146	$ 13	13
OpCo. | ASU 2014-09 | ASC 605
Current assets:
Cash and cash equivalents	421
Restricted cash	10,000
Long-term capitalized contract costs	1,551
Other assets	962
Current liabilities:
Trade accounts payable	205
Long-term debt	15,357
Other long term liabilities	6,146
OpCo. | ASU 2014-09 | ASC 606
Current assets:
Long-term contracts financing receivables	52,996		38,990
Long-term capitalized contract costs	$ (1,551)		$ (1,258)

Acquisitions and Divestitures -

Acquisitions and Divestitures - CGD Services - Income (loss) from discontinued operations (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Jun. 30, 2018	Apr. 18, 2018
Costs and expenses:
Net income from discontinued operations		$ 1,649
Cubic Global Defense Services
Divestitures
Receivable for estimated amount due from purchaser	$ 0
Cubic Global Defense Services | Disposed of by sale
Divestitures
Consideration from sale			$ 133,800	$ 135,000
Working capital settlement receivable	3,700
Receivable for estimated earn-out amount due from purchaser	3,000
Income (loss) from discontinued operations
Net sales		92,293
Costs and expenses:
Cost of sales		83,120
Selling, general and administrative expenses		3,667
Amortization of purchased intangibles		608
Other income		(5)
Earnings from discontinued operations before income taxes		4,903
Income tax provision (benefit)		3,254
Net income from discontinued operations	$ 0	$ 1,649

Acquisitions and Divestitures_2

Acquisitions and Divestitures - Consolidated Business Acquisitions (Details) - USD ($) $ in Thousands	Feb. 21, 2018	Jan. 31, 2019	Oct. 31, 2018	Jul. 31, 2018	Dec. 31, 2018	Dec. 31, 2017	Oct. 01, 2018	Sep. 30, 2018
Sales and results of operations
Sales					$ 305,259	$ 248,391
Operating income (loss)					(566)	(11,902)
Net loss after taxes					(6,587)	(9,786)
Estimated acquisition-date fair value of consideration
Compensation expense					2,720	$ 1,627
Purchase price allocation
Goodwill					484,329		$ 333,626	$ 333,626
Trafficware
Sales and results of operations
Sales					10,500
Operating income (loss)					(3,300)
Net loss after taxes					(3,300)
Amortization					4,300
Acquisition-related (benefit) expenses					1,400
Estimated acquisition-date fair value of consideration
Fair value of consideration transferred			$ 237,600
Cash consideration paid			239,200
Receivable due from the sellers			1,600
Purchase price allocation
Amortizable intangible assets			4,800
Accounts receivable			10,400
Inventory			9,400
Accounts payable and accrued expenses			(6,500)
Other net assets acquired (liabilities assumed)			(2,000)
Net identifiable assets acquired			85,900
Goodwill			151,700
Net assets acquired			$ 237,600
Weighted average useful life of intangible assets			7 years
Estimated amortization expense related to the intangible assets
2,019								15,300
2,020								11,400
2,021								11,400
2,022								11,400
2,023								6,400
Thereafter								18,800
Trafficware | Trade names
Purchase price allocation
Indefinite intangible assets			$ 4,600
Trafficware | Technology
Purchase price allocation
Amortizable intangible assets			43,300
Trafficware | Customer relationships
Purchase price allocation
Amortizable intangible assets			$ 21,900
Shield Aviation
Sales and results of operations
Operating income (loss)					(900)
Net loss after taxes					(900)
Amortization					200
Estimated acquisition-date fair value of consideration
Fair value of consideration transferred				$ 12,800
Extinguishment of debt				5,200
Cash consideration paid				1,300
Hold back consideration				700
Contingent consideration				5,600
Purchase price allocation
Other net assets acquired				300
Net identifiable assets acquired				6,300
Goodwill				6,500
Net assets acquired				12,800
Estimated amortization expense related to the intangible assets
2,019					800
2,020					800
2,021					800
2,022					800
2,023					800
Thereafter					2,100
Shield Aviation | Maximum
Estimated acquisition-date fair value of consideration
Contingent consideration				10,000	10,000
Shield Aviation | Technology
Purchase price allocation
Amortizable intangible assets				$ 6,000
MotionDSP
Sales and results of operations
Sales					200
Operating income (loss)					(400)
Net loss after taxes					(400)
Amortization					200
Acquisition-related (benefit) expenses					$ 100
Estimated acquisition-date fair value of consideration
Cash consideration paid	$ 4,800
Purchase price allocation
Accounts payable and accrued expenses	(300)
Other noncurrent liabilities	(800)
Other net assets acquired (liabilities assumed)	(900)
Net identifiable assets acquired	2,800
Goodwill	6,700
Net assets acquired	$ 9,500
Weighted average useful life of intangible assets	7 years
Estimated amortization expense related to the intangible assets
2,019								700
2,020								700
2,021								700
2,022								700
2,023								700
Thereafter								$ 800
MotionDSP | Trade names
Purchase price allocation
Indefinite intangible assets	$ 100
MotionDSP | Technology
Purchase price allocation
Amortizable intangible assets	4,500
MotionDSP | Customer relationships
Purchase price allocation
Amortizable intangible assets	$ 200
GRIDSMART | Subsequent event
Estimated acquisition-date fair value of consideration
Fair value of consideration transferred		$ 87,000

Acquisitions and Divestitures_3

Acquisitions and Divestitures - MotionDSP (Details) - USD ($) $ in Millions	Feb. 21, 2018	Oct. 31, 2017
MotionDSP
Business acquisition
Cash consideration paid	$ 4.8
MotionDSP
Equity method investment
Purchase price of capital stock		$ 4.7
Ownership percentage		49.00%

Acquisitions and Divestitures_4

Acquisitions and Divestitures - Goodwill and Pro forma information (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2018
Unaudited pro forma information
Net sales	$ 307,100	$ 261,800
Net income attributable to Cubic	(6,300)	(13,400)
Adjustments made for transaction expenses	0	$ 0
Changes in the carrying amount of goodwill
Net balances at the beginning of the period	333,626
Acquisitions	151,670
Foreign currency exchange rate changes	(967)
Net balance at the end of the period	484,329		$ 333,626
Transportation Systems
Changes in the carrying amount of goodwill
Net balances at the beginning of the period	49,786
Acquisitions	151,670
Foreign currency exchange rate changes	(798)
Net balance at the end of the period	200,658		$ 49,786
Transportation Systems | Minimum
Changes in the carrying amount of goodwill
Estimated percentage of excess of fair value over carrying value			100.00%
Cubic Mission Solutions
Changes in the carrying amount of goodwill
Net balances at the beginning of the period	138,127
Foreign currency exchange rate changes	(73)
Net balance at the end of the period	138,054		$ 138,127
Cubic Global Defense
Changes in the carrying amount of goodwill
Net balances at the beginning of the period	145,713
Foreign currency exchange rate changes	(96)
Net balance at the end of the period	$ 145,617		$ 145,713
Cubic Global Defense | Minimum
Changes in the carrying amount of goodwill
Estimated percentage of excess of fair value over carrying value			40.00%

Variable Interest Entities - Na

Variable Interest Entities - Narrative (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2018	Oct. 01, 2018	Sep. 30, 2018	Dec. 31, 2017
Revenue recognition
Restricted cash				$ 27,400	$ 11,800
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-01-01
Revenue recognition
Contract term		12 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01
Revenue recognition
Contract term		24 months
Revolving Credit Agreement
Revenue recognition
Unamortized Debt Issuance Expense		$ 1,700
Maximum borrowing capacity under credit agreement		400,000
Borrowings outstanding		$ 64,500
MBTA | Design and Build Phase | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2018-10-01
Revenue recognition
Contract term		3 years
MBTA | Operate and Maintain Phase | Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01
Revenue recognition
Contract term		10 years
Cubic Corporation Excluding VIE
Revenue recognition
Restricted cash		$ 17,889	$ 17,400	17,400
Long-term capitalized contract costs				84,924
OpCo.
Revenue recognition
Restricted cash		10,000	$ 10,000	10,000
Long-term capitalized contract costs				1,258
OpCo. | Interest Rate Swaps | Not Designated as Hedging Instrument
Revenue recognition
Unrealized loss		(6,100)
P3 Joint Venture
Revenue recognition
Maximum exposure to loss		2,700
OpCo. | Interest Rate Swaps | Not Designated as Hedging Instrument
Revenue recognition
Notional principal outstanding derivative instruments		61,900
OpCo. | Interest Rate Swaps | Not Designated as Hedging Instrument | Other noncurrent liabilities
Revenue recognition
Fair value interest rate swaps		6,100
OpCo. | P3 Credit Agreement | Revolving Credit Agreement
Revenue recognition
Maximum borrowing capacity under credit agreement		13,900
OpCo. | P3 Credit Agreement | Long-term Debt Facility
Revenue recognition
Loan amount	$ 212,400
Proceeds from issuance of debt		15,400
Carrying value		8,800
OpCo. | Design and Build Phase | P3 Credit Agreement | Long-term Debt Facility | LIBOR
Revenue recognition
Variable interest rate (as a percent)	1.30%
OpCo. | Operate and Maintain Phase | P3 Credit Agreement | Long-term Debt Facility | LIBOR
Revenue recognition
Variable interest rate (as a percent)	1.55%
OpCo. | MBTA
Revenue recognition
Expected contract revenue		$ 558,500
OpCo. | Cubic Corporation Excluding VIE | MBTA
Revenue recognition
Long-term capitalized contract costs				$ 27,800
Transportation Systems | HoldCo.
Revenue recognition
Ownership percentage		10.00%
Transportation Systems | HoldCo. | Letter of credit agreement
Revenue recognition
Maximum borrowing capacity under credit agreement		$ 2,700
Borrowings outstanding		0
Transportation Systems | OpCo.
Revenue recognition
Expected contract revenue		$ 427,600
John Laing | HoldCo.
Revenue recognition
Ownership percentage		90.00%
John Laing | HoldCo. | Equity Bridge Loan
Revenue recognition
Loan amount	$ 24,300

Variable Interest Entities - Ne

Variable Interest Entities - Net assets and liabilities (Details) - USD ($) $ in Thousands	3 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2018	Oct. 01, 2018
ASSETS
Restricted cash		$ 11,800	$ 27,400
Long-term contracts financing receivables			6,134
Other noncurrent assets	$ 13,871
Total assets	1,548,955		1,304,883	$ 1,321,130
LIABILITIES AND SHAREHOLDERS' EQUITY
Total Cubic equity	926,504		700,121	719,955
Noncontrolling interests	24,703		24,075	28,730
Total liabilities and shareholders' equity	1,548,955		1,304,883	1,321,130
Revenue	305,259	248,391
Operating income (loss)	(566)	(11,902)
Other income (expense), net	(4,753)	$ (78)
OpCo.
ASSETS
Cash	421		374	374
Restricted cash	10,000		10,000	10,000
Long-term capitalized contract costs			1,258
Long-term contracts financing receivables	52,996			38,990
Other noncurrent assets	962		810	810
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable	205		165	165
Other long term liabilities	6,146		13	13
Long-term debt	15,357		9,056	$ 9,056
VIE
ASSETS
Cash	421		374
Restricted cash	10,000		10,000
Long-term capitalized contract costs			1,258
Long-term contracts financing receivables	52,996
Other noncurrent assets	962		810
Total assets	64,379		12,442
LIABILITIES AND SHAREHOLDERS' EQUITY
Trade accounts payable	205		165
Other long term liabilities	6,146		13
Long-term debt	15,357		9,056
Total liabilities	21,708		9,234
Total Cubic equity	39		(304)
Noncontrolling interests	24,703		24,348
Total liabilities and shareholders' equity	46,450		33,278
Revenue			1,961
Operating income (loss)			1,668
Other income (expense), net			(6,133)
Interest income			503
Interest Expense			(512)
VIE | Consolidation Eliminations
ASSETS
Total assets			$ 20,800
LIABILITIES AND SHAREHOLDERS' EQUITY
Total liabilities	$ 17,900

Net Income (Loss) Per Share (De

Net Income (Loss) Per Share (Details) - shares shares in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Weighted-average number of shares outstanding
Weighted average shares - basic	28,492	27,207
Weighted average shares - diluted	28,492	27,207
Number of anti-dilutive securities	990	1,040

Contract Assets and Liabiliti_3

Contract Assets and Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Oct. 01, 2018
Contract Assets and Liabilities
Contract Assets	$ 320,277		$ 272,210
Contract Liabilities	69,713		$ 70,128
Increase in contract asset	48,100
Impairment losses related to contract assets	0	$ 0
Decrease in contract liabilities	400
Revenue recognized included in contract liability at beginning of quarter	$ 20,700

Balance Sheet Details (Details)

Balance Sheet Details (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Oct. 01, 2018	Sep. 30, 2018
Accounts Receivable
Billed	$ 119,943			$ 156,948
Unbilled				242,877
Allowance for doubtful accounts	(1,652)			(1,324)
Total accounts receivable	118,291			398,501
Less estimated amounts not currently due				(6,134)
Current accounts receivable	118,291		$ 155,624	392,367
Inventories
Finished products	7,716			7,099
Work in process and inventoried costs under long-term contracts	49,295			63,169
Materials and purchased parts	35,190			23,710
Customer advances				(9,779)
Net inventories	92,201		$ 61,688	84,199
Costs incurred outside the scope of work or in advance of a contract award	900			900
Deferred Compensation Plan
Deferred compensation	12,000			11,500
Carrying value of Rabbi trust to fund deferred compensation liabilities	$ 5,800			$ 6,400
Software
Capitalized Software
Estimated useful life	P7Y
Addition to capitalized software expenses	$ 500	$ 2,500
Software development expense	$ 800	$ 6,300
Software | Maximum
Capitalized Software
Estimated useful life	P7Y
Software | Minimum
Capitalized Software
Estimated useful life	P3Y

Fair Value of Financial Instr_3

Fair Value of Financial Instruments - Recurring Basis (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018
Level 2
Debt instruments
Fair Value	$ 195,400	$ 193,700
Carrying value	200,000	200,000
Assets and liabilities measured at fair value
Assets
Cash equivalents		9,000
Current derivative assets	5,036	1,803
Noncurrent derivative assets	581	314
Total assets measured at fair value	5,617	11,117
Liabilities
Current derivative liabilities	3,367	1,657
Noncurrent derivative liabilities		75
Total liabilities measured at fair value	11,160	10,846
Assets and liabilities measured at fair value | Deltenna
Liabilities
Contingent consideration to seller	1,343	1,081
Assets and liabilities measured at fair value | Shield Aviation
Liabilities
Contingent consideration to seller	5,618	5,618
Assets and liabilities measured at fair value | H4 Global
Liabilities
Contingent consideration to seller	832	665
Assets and liabilities measured at fair value | Revenue Targets | TeraLogics
Liabilities
Contingent consideration to seller		1,750
Assets and liabilities measured at fair value | Level 1
Assets
Cash equivalents		9,000
Total assets measured at fair value		9,000
Assets and liabilities measured at fair value | Level 2
Assets
Current derivative assets	5,036	1,803
Noncurrent derivative assets	581	314
Total assets measured at fair value	5,617	2,117
Liabilities
Current derivative liabilities	3,367	1,657
Noncurrent derivative liabilities		75
Total liabilities measured at fair value	3,367	1,732
Assets and liabilities measured at fair value | Level 3
Liabilities
Total liabilities measured at fair value	7,793	9,114
Assets and liabilities measured at fair value | Level 3 | Deltenna
Liabilities
Contingent consideration to seller	1,343	1,081
Assets and liabilities measured at fair value | Level 3 | Shield Aviation
Liabilities
Contingent consideration to seller	5,618	5,618
Assets and liabilities measured at fair value | Level 3 | H4 Global
Liabilities
Contingent consideration to seller	$ 832	665
Assets and liabilities measured at fair value | Level 3 | Revenue Targets | TeraLogics
Liabilities
Contingent consideration to seller		$ 1,750

Fair Value of Financial Instr_4

Fair Value of Financial Instruments - Contingent Consideration (Details) $ in Thousands	1 Months Ended	3 Months Ended	12 Months Ended
	Jul. 31, 2018USD ($)item	Dec. 31, 2018USD ($)item	Sep. 30, 2018USD ($)item
Cubic Global Defense Services | Disposed of by sale
Assets and liabilities measured at fair value on a recurring basis
Receivable for estimated earn-out amount due from purchaser		$ 3,000
Level 3
Change in fair value of our Level 3 contingent consideration
Balance at the Beginning period		9,114
Cash paid to seller		(1,750)
Total remeasurement (gain) loss recognized in earnings		429
Balance at the ending period		7,793	$ 9,114
Deltenna | Level 3
Change in fair value of our Level 3 contingent consideration
Balance at the Beginning period		1,081
Total remeasurement (gain) loss recognized in earnings		262
Balance at the ending period		1,343	$ 1,081
Deltenna | Maximum
Assets and liabilities measured at fair value on a recurring basis
Contingent consideration		$ 6,900
Deltenna | Volatility for underlying revenue metrics
Assets and liabilities measured at fair value on a recurring basis
Measurement inputs for contingent consideration | item		40	53
Shield Aviation
Assets and liabilities measured at fair value on a recurring basis
Contingent consideration	$ 5,600
Iterations used in determination of fair value of contingent consideration | item	100,000
Revenue risk adjustment used in determination of fair value of contingent consideration			0.14%
Shield Aviation | Level 3
Change in fair value of our Level 3 contingent consideration
Balance at the Beginning period		$ 5,618
Balance at the ending period		5,618	$ 5,618
Shield Aviation | Maximum
Assets and liabilities measured at fair value on a recurring basis
Contingent consideration	$ 10,000	$ 10,000
Shield Aviation | Volatility for underlying revenue metrics
Assets and liabilities measured at fair value on a recurring basis
Measurement inputs for contingent consideration			0.20
Shield Aviation | Discount Rate
Assets and liabilities measured at fair value on a recurring basis
Measurement inputs for contingent consideration		0.050	0.050
TeraLogics | Level 3 | Revenue Targets
Change in fair value of our Level 3 contingent consideration
Balance at the Beginning period		$ 1,750
Cash paid to seller		$ (1,750)
Balance at the ending period			$ 1,750
H4 Global
Assets and liabilities measured at fair value on a recurring basis
Period for contingent consideration contracts		5 years
H4 Global | Level 3
Change in fair value of our Level 3 contingent consideration
Balance at the Beginning period		$ 665
Total remeasurement (gain) loss recognized in earnings		167
Balance at the ending period		832	$ 665
H4 Global | Maximum
Assets and liabilities measured at fair value on a recurring basis
Contingent consideration		$ 3,200

Financing Arrangements - underw

Financing Arrangements - underwritten public offering (Details) $ / shares in Units, $ in Millions	1 Months Ended
	Dec. 31, 2018USD ($)$ / sharesshares
Financing Arrangements
Underwritten public offering (in shares)	3,300,000
Period to exercise additional shares	30 years
Additional shares granted to underwriters to purchase additional shares	495,000
Shares exercised by underwriters	495,000
Offered price (per share) | $ / shares	$ 60
Net Proceeds from public offering | $	$ 215.8
Underwriting discounts and commissions and offering expenses | $	$ 11.9

Financing Arrangements - Senior

Financing Arrangements - Senior Unsecured Notes (Details) - Senior unsecured notes - USD ($) $ in Millions	Jul. 17, 2015	Dec. 31, 2018	Feb. 02, 2016	Mar. 31, 2013
Financial arrangement
Coupon rate increase based on leverage ratio (as a percent)		0.75%
Senior Unsecured Notes Issued March 2013 and Due March 2025
Financial arrangement
Principal amount of debt instrument				$ 100
Interest rate (as a percent)				3.35%
Senior Unsecured Notes Issued July 2015 and Due March 2025
Financial arrangement
Principal amount of debt instrument	$ 25
Interest rate (as a percent)	3.70%
Coupon rate increase based on leverage ratio (as a percent)	0.50%
Senior Unsecured Notes Issued February 2016 and Due March 2026
Financial arrangement
Principal amount of debt instrument			$ 75
Interest rate (as a percent)			3.93%

Financing Arrangements - Revolv

Financing Arrangements - Revolving Credit Agreement (Details) £ in Millions, $ in Millions	Aug. 11, 2016USD ($)	Feb. 02, 2016USD ($)	Dec. 31, 2018GBP (£)	Dec. 31, 2018USD ($)	Sep. 30, 2018USD ($)	Dec. 31, 2017USD ($)
Financial arrangement
Restricted cash					$ 27.4	$ 11.8
Letters of Credit and bank guarantees outstanding				$ 50.1
Self-insurance liabilities				8.7	$ 8.6
Letters of credit primarily for self-insured liabilities
Financial arrangement
Letters of Credit and bank guarantees outstanding				7.2
Fair value of instruments				0
United Kingdom
Financial arrangement
Maximum borrowing capacity under credit agreement			£ 20	25.5
Borrowings outstanding				0
United Kingdom | Performance guarantee
Financial arrangement
Restricted cash				17.9
Revolving Credit Agreement
Financial arrangement
Maximum borrowing capacity under credit agreement				$ 400
Weighted average interest rate on outstanding borrowings			3.75%	3.75%
Debt issuance costs incurred		$ 2.3
Debt modification cost incurred	$ 1.3
Unamortized debt issuance costs				$ 1.7
Borrowings outstanding				64.5
Letters of credit outstanding				38.4
Available amount under line of credit				297.1
Revolving Credit Agreement | Letters of credit and bank guarantees
Financial arrangement
Letters of credit outstanding				38.4
Other Credit Facility
Financial arrangement
Letters of credit outstanding				11.7
Letter of credit agreement | Performance guarantee
Financial arrangement
Letters of credit outstanding				$ 42.9

Pension Plans (Details)

Pension Plans (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Components of net periodic pension cost (benefit)
Service cost	$ 149	$ 151
Interest cost	1,910	1,880
Expected return on plan assets	(3,009)	(3,525)
Amortization of actuarial loss	528	692
Administrative expenses	97	110
Net pension cost (benefit)	$ (325)	$ (692)

Stockholders_ Equity - Narrativ

Stockholders’ Equity - Narrative (Details)	3 Months Ended	75 Months Ended
	Dec. 31, 2018item$ / sharesshares	Dec. 31, 2018shares
RSUs
Stockholders' Equity
Number of shares of common stock that each award holder has the contingent right to receive	1
Fair value units granted (per share) | $ / shares	$ 64.33
Time-based RSUs
Stockholders' Equity
Number of units awarded (in shares)		1,285,560
Number of equal installments for vesting of stock awards | item	4
Expected awards vested (in shares)	331,181
Performance-based RSUs
Stockholders' Equity
Number of units awarded (in shares)		1,173,766
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
Expected awards vested (in shares)	129,907
Performance and market-based RSUs
Stockholders' Equity
Number of units awarded (in shares)		219,890
Number of shares of common stock that each award holder has the contingent right to receive	1.25
Vesting period	3 years
Fair value units granted (per share) | $ / shares	$ 67.40
Expected awards vested (in shares)	152,570
Performance and market-based RSUs | Maximum
Stockholders' Equity
Increase in multiplier based on performance	25.00%
Performance and market-based RSUs | Minimum
Stockholders' Equity
Decrease in multiplier based on performance	25.00%

Stockholders_ Equity - Assumpti

Stockholders’ Equity - Assumption used for RSU activity (Details) - RSUs	3 Months Ended
	Dec. 31, 2018$ / shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Closing average share value (mean)	$ 68.56
Risk-free interest rate(as a percent)	2.80%
Expected volatility (as a percent)	34.00%

Stockholders_ Equity - RSU acti

Stockholders’ Equity - RSU activity (Details)	3 Months Ended
	Dec. 31, 2018$ / sharesshares
RSUs
Number of Shares
Balance unvested at the beginning of the period (in shares)	366,460
Granted (in shares)	195,033
Vested (in shares)	(128,949)
Forfeited (in shares)	(15,391)
Balance unvested at the end of the period (in shares)	417,153
Weighted Average Grant-Date Fair Value
Balance unvested at the beginning of the period (in dollars per share) | $ / shares	$ 52.31
Granted (in dollars per share) | $ / shares	64.33
Vested (in dollars per share) | $ / shares	50.61
Forfeited (in dollars per share) | $ / shares	50.04
Balance unvested at the end of the period (in dollars per share) | $ / shares	$ 58.54
Vested (in shares)	128,949
Performance-based RSUs
Number of Shares
Balance unvested at the beginning of the period (in shares)	635,628
Forfeited (in shares)	(295,759)
Balance unvested at the end of the period (in shares)	339,869
Weighted Average Grant-Date Fair Value
Balance unvested at the beginning of the period (in dollars per share) | $ / shares	$ 50.11
Forfeited (in dollars per share) | $ / shares	43.86
Balance unvested at the end of the period (in dollars per share) | $ / shares	$ 55.54
Performance and market-based RSUs
Number of Shares
Granted (in shares)	219,890
Balance unvested at the end of the period (in shares)	219,890
Weighted Average Grant-Date Fair Value
Granted (in dollars per share) | $ / shares	$ 67.40
Balance unvested at the end of the period (in dollars per share) | $ / shares	$ 67.40

Stockholders_ Equity - Non-cash

Stockholders’ Equity - Non-cash compensation expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Stockholders' Equity
Non-cash compensation expense related to stock-based awards	$ 2,720	$ 1,627
Estimated forfeiture rate (as a percent)	12.50%
Cost of sales
Stockholders' Equity
Non-cash compensation expense related to stock-based awards	$ 313	156
Selling, general and administrative
Stockholders' Equity
Non-cash compensation expense related to stock-based awards	2,407	$ 1,471
RSUs
Stockholders' Equity
Unrecognized compensation cost related to unvested awards	52,000
Aggregate fair value of awards	$ 37,500
Weighted-average period of recognition	1 year 7 months 6 days

Income Taxes (Details)

Income Taxes (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2018
Income Taxes
U.S. statutory tax rate (as a percent)	21.00%
Effective tax rate (as a percent)	(31.00%)	(6.00%)	48.00%
Deferred tax asset valuation allowance	$ 79.3

Derivative Instruments and He_3

Derivative Instruments and Hedging Activities - Notional principal amounts (Details) - Foreign currency forwards - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Sep. 30, 2018
Derivative Instruments and Hedging Activities
Unrealized loss	$ (300)	$ (300)
Instruments designated as accounting hedges:
Derivative Instruments and Hedging Activities
Notional principal outstanding derivative instruments	169,095		$ 169,406
Instruments not designated as accounting hedges:
Derivative Instruments and Hedging Activities
Notional principal outstanding derivative instruments	24,824		27,909
Notional principal outstanding derivative instruments designed to manage exposure	$ 12,700		$ 14,700

Derivative Instruments and He_4

Derivative Instruments and Hedging Activities - Fair value of derivative financial instruments (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Sep. 30, 2018
Derivative Instruments and Hedging Activities
Asset derivatives	$ 5,618	$ 2,117
Liability derivatives	3,367	1,732
Foreign currency forwards | Other current assets
Derivative Instruments and Hedging Activities
Asset derivatives	5,036	1,803
Foreign currency forwards | Other noncurrent assets
Derivative Instruments and Hedging Activities
Asset derivatives	582	314
Foreign currency forwards | Other current liabilities
Derivative Instruments and Hedging Activities
Liability derivatives	$ 3,367	1,657
Foreign currency forwards | Other noncurrent liabilities
Derivative Instruments and Hedging Activities
Liability derivatives		$ 75

Derivative Instruments and He_5

Derivative Instruments and Hedging Activities - Gains and losses recognized (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Derivative instruments and hedging activities
Estimated unrealized net gains (losses) from cash flow hedges which are expected to be reclassified into earnings in the next twelve months	$ (1,700)
Foreign currency forwards
Derivative instruments and hedging activities
Gains (losses) recognized in OCI	1,779	$ 656
Gains (losses) reclassified into earnings - Effective Portion	$ (33)	$ (774)

Segment Information - Business

Segment Information - Business segment financial data (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Segment Information
Total sales	$ 305,259	$ 248,391
Operating income (loss)	(566)	(11,902)
Depreciation and amortization	16,011	12,433
Transportation Systems
Segment Information
Total sales	181,807	146,500
Operating income (loss)	10,976	9,900
Depreciation and amortization	7,700	3,300
Cubic Mission Solutions
Segment Information
Total sales	46,393	33,100
Operating income (loss)	(4,940)	(8,900)
Depreciation and amortization	5,400	5,900
Cubic Global Defense
Segment Information
Total sales	77,059	68,800
Operating income (loss)	2,897	1,400
Depreciation and amortization	2,200	2,100
Corporate
Segment Information
Depreciation and amortization	700	1,100
Unallocated corporate expenses and other
Segment Information
Operating income (loss)	$ (9,499)	$ (14,300)

Segment Information - Narrative

Segment Information - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Unallocated corporate expenses and other
Segment Information
Expense related to strategic and IT system resource planning	$ 1.6	$ 8

Segment Information - Sales by

Segment Information - Sales by Geographical Region (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue
Total sales	$ 305,259	$ 248,391
Transportation Systems
Disaggregation of Revenue
Total sales	181,807	146,500
Cubic Mission Solutions
Disaggregation of Revenue
Total sales	46,393	33,100
Cubic Global Defense
Disaggregation of Revenue
Total sales	77,059	$ 68,800
United States
Disaggregation of Revenue
Total sales	172,500
United States | Transportation Systems
Disaggregation of Revenue
Total sales	91,300
United States | Cubic Mission Solutions
Disaggregation of Revenue
Total sales	45,500
United States | Cubic Global Defense
Disaggregation of Revenue
Total sales	35,700
United Kingdom
Disaggregation of Revenue
Total sales	55,600
United Kingdom | Transportation Systems
Disaggregation of Revenue
Total sales	50,900
United Kingdom | Cubic Mission Solutions
Disaggregation of Revenue
Total sales	400
United Kingdom | Cubic Global Defense
Disaggregation of Revenue
Total sales	4,300
Australia
Disaggregation of Revenue
Total sales	35,500
Australia | Transportation Systems
Disaggregation of Revenue
Total sales	29,800
Australia | Cubic Mission Solutions
Disaggregation of Revenue
Total sales	100
Australia | Cubic Global Defense
Disaggregation of Revenue
Total sales	5,600
Far East/Middle East
Disaggregation of Revenue
Total sales	23,200
Far East/Middle East | Transportation Systems
Disaggregation of Revenue
Total sales	4,400
Far East/Middle East | Cubic Mission Solutions
Disaggregation of Revenue
Total sales	400
Far East/Middle East | Cubic Global Defense
Disaggregation of Revenue
Total sales	18,400
Other foreign countries
Disaggregation of Revenue
Total sales	18,500
Other foreign countries | Transportation Systems
Disaggregation of Revenue
Total sales	5,400
Other foreign countries | Cubic Global Defense
Disaggregation of Revenue
Total sales	$ 13,100

Segment Information - Sales b_2

Segment Information - Sales by End Customer (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue
Total sales	$ 305,259	$ 248,391
U.S. Government
Disaggregation of Revenue
Total sales	169,000
Other
Disaggregation of Revenue
Total sales	136,300
Transportation Systems
Disaggregation of Revenue
Total sales	181,807	146,500
Transportation Systems | U.S. Government
Disaggregation of Revenue
Total sales	90,800
Transportation Systems | Other
Disaggregation of Revenue
Total sales	91,000
Cubic Mission Solutions
Disaggregation of Revenue
Total sales	46,393	33,100
Cubic Mission Solutions | U.S. Government
Disaggregation of Revenue
Total sales	45,800
Cubic Mission Solutions | Other
Disaggregation of Revenue
Total sales	600
Cubic Global Defense
Disaggregation of Revenue
Total sales	77,059	$ 68,800
Cubic Global Defense | U.S. Government
Disaggregation of Revenue
Total sales	32,400
Cubic Global Defense | Other
Disaggregation of Revenue
Total sales	$ 44,700

Segment Information - Sales b_3

Segment Information - Sales by Contract Type (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue
Total sales	$ 305,259	$ 248,391
Fixed Price
Disaggregation of Revenue
Total sales	295,600
Other
Disaggregation of Revenue
Total sales	9,700
Transportation Systems
Disaggregation of Revenue
Total sales	181,807	146,500
Transportation Systems | Fixed Price
Disaggregation of Revenue
Total sales	178,200
Transportation Systems | Other
Disaggregation of Revenue
Total sales	3,600
Cubic Mission Solutions
Disaggregation of Revenue
Total sales	46,393	33,100
Cubic Mission Solutions | Fixed Price
Disaggregation of Revenue
Total sales	45,800
Cubic Mission Solutions | Other
Disaggregation of Revenue
Total sales	600
Cubic Global Defense
Disaggregation of Revenue
Total sales	77,059	$ 68,800
Cubic Global Defense | Fixed Price
Disaggregation of Revenue
Total sales	71,600
Cubic Global Defense | Other
Disaggregation of Revenue
Total sales	$ 5,500

Segment Information - Sales b_4

Segment Information - Sales by Deliverable Type (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue
Total sales	$ 305,259	$ 248,391
Products
Disaggregation of Revenue
Total sales	182,253	131,743
Services
Disaggregation of Revenue
Total sales	123,006	116,648
Transportation Systems
Disaggregation of Revenue
Total sales	181,807	146,500
Transportation Systems | Products
Disaggregation of Revenue
Total sales	92,000
Transportation Systems | Services
Disaggregation of Revenue
Total sales	89,800
Cubic Mission Solutions
Disaggregation of Revenue
Total sales	46,393	33,100
Cubic Mission Solutions | Products
Disaggregation of Revenue
Total sales	40,600
Cubic Mission Solutions | Services
Disaggregation of Revenue
Total sales	5,800
Cubic Global Defense
Disaggregation of Revenue
Total sales	77,059	$ 68,800
Cubic Global Defense | Products
Disaggregation of Revenue
Total sales	49,700
Cubic Global Defense | Services
Disaggregation of Revenue
Total sales	$ 27,400

Segment Information - Revenue R

Segment Information - Revenue Recognition Method (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Disaggregation of Revenue
Total sales	$ 305,259	$ 248,391
Point in time
Disaggregation of Revenue
Total sales	51,600
Over time
Disaggregation of Revenue
Total sales	253,700
Transportation Systems
Disaggregation of Revenue
Total sales	181,807	146,500
Transportation Systems | Point in time
Disaggregation of Revenue
Total sales	16,700
Transportation Systems | Over time
Disaggregation of Revenue
Total sales	165,100
Cubic Mission Solutions
Disaggregation of Revenue
Total sales	46,393	33,100
Cubic Mission Solutions | Point in time
Disaggregation of Revenue
Total sales	34,400
Cubic Mission Solutions | Over time
Disaggregation of Revenue
Total sales	12,000
Cubic Global Defense
Disaggregation of Revenue
Total sales	77,059	$ 68,800
Cubic Global Defense | Point in time
Disaggregation of Revenue
Total sales	500
Cubic Global Defense | Over time
Disaggregation of Revenue
Total sales	$ 76,600

Subsequent Events (Detail)

Subsequent Events (Detail) - Subsequent event - Construction and Leasing Agreement	Feb. 05, 2019building
Subsequent Events
Number of buildings	2
Lease term	5 years