Document and Entity Information
Document and Entity Information - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Nov. 01, 2019 | Mar. 31, 2019 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Period End Date | Sep. 30, 2019 | ||
Entity File Number | 001-08931 | ||
Entity Registrant Name | CUBIC CORP /DE/ | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 95-1678055 | ||
Entity Address, Address Line One | 9333 Balboa Avenue | ||
Entity Address, City or Town | San Diego | ||
Entity Address, State or Province | CA | ||
Entity Address, Postal Zip Code | 92123 | ||
City Area Code | 858 | ||
Local Phone Number | 277-6780 | ||
Title of 12(b) Security | Common Stock | ||
Trading Symbol | CUB | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Common Stock, Shares Outstanding | 31,274,052 | ||
Entity Public Float | $ 1,274,404,537 | ||
Current Fiscal Year End Date | --09-30 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0000026076 | ||
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net sales: | |||
Net sales | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
Costs and expenses: | |||
Selling, general and administrative expenses | 270,064 | 258,644 | 240,196 |
Research and development | 50,132 | 52,398 | 52,652 |
Amortization of purchased intangibles | 42,106 | 27,064 | 30,245 |
(Gain) loss on sale of property, plant and equipment | (32,510) | 405 | |
Restructuring costs | 15,386 | 5,018 | 2,260 |
Total costs and expenses | 1,410,238 | 1,178,516 | 1,105,081 |
Operating income | 86,237 | 24,382 | 2,628 |
Other income (expenses): | |||
Interest and dividend income | 6,519 | 1,615 | 953 |
Interest expense | (20,453) | (10,424) | (15,027) |
Other income (expense), net | (19,957) | (687) | 364 |
Income (loss) from continuing operations before income taxes | 52,346 | 14,886 | (11,082) |
Income tax provision | 11,040 | 7,093 | 14,658 |
Income (loss) from continuing operations | 41,306 | 7,793 | (25,740) |
Net income (loss) from discontinued operations | (1,423) | 4,243 | 14,531 |
Net income (loss) | 39,883 | 12,036 | (11,209) |
Less noncontrolling interest in loss of VIE | (9,811) | (274) | |
Net income (loss) attributable to Cubic | 49,694 | 12,310 | (11,209) |
Amounts attributable to Cubic: | |||
Net income (loss) from continuing operations | 51,117 | 8,067 | (25,740) |
Net income (loss) from discontinued operations | (1,423) | 4,243 | 14,531 |
Net income (loss) attributable to Cubic | $ 49,694 | $ 12,310 | $ (11,209) |
Basic | |||
Continuing operations attributable to Cubic (in dollars per share) | $ 1.68 | $ 0.30 | $ (0.95) |
Discontinued operations (in dollars per share) | (0.05) | 0.16 | 0.54 |
Basic earnings per share attributable to Cubic (in dollars per share) | 1.63 | 0.45 | (0.41) |
Diluted | |||
Continuing operations attributable to Cubic (in dollars per share) | 1.67 | 0.29 | (0.95) |
Discontinued operations (in dollars per share) | (0.05) | 0.16 | 0.54 |
Diluted earnings per share attributable to Cubic (in dollars per share) | $ 1.62 | $ 0.45 | $ (0.41) |
Weighted average shares used in per share calculations: | |||
Basic (in shares) | 30,495 | 27,229 | 27,106 |
Diluted (in shares) | 30,606 | 27,351 | 27,106 |
Products | |||
Net sales: | |||
Net sales | $ 1,011,069 | $ 704,941 | $ 681,559 |
Costs and expenses: | |||
Costs | 732,137 | 472,698 | 473,670 |
Services | |||
Net sales: | |||
Net sales | 485,406 | 497,957 | 426,150 |
Costs and expenses: | |||
Costs | $ 332,923 | $ 362,694 | $ 305,653 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | |||
Net income (loss) | $ 39,883 | $ 12,036 | $ (11,209) |
Other comprehensive income (loss): | |||
Adjustment to pension liability, net of tax | (19,481) | 5,540 | 13,180 |
Foreign currency translation | (11,286) | (8,126) | 1,440 |
Change in unrealized gains/losses from cash flow hedges: | |||
Change in fair value of cash flow hedges, net of tax | 3,103 | 34 | (1,071) |
Adjustment for net gains/losses realized and included in net income, net of tax | (1,386) | 929 | (358) |
Total change in unrealized gains/losses realized from cash flow hedges, net of tax | 1,717 | 963 | (1,429) |
Total other comprehensive income (loss) | (29,050) | (1,623) | 13,191 |
Total comprehensive income | 10,833 | 10,413 | 1,982 |
Noncontrolling interest in comprehensive loss of consolidated VIE, net of tax | (9,811) | (274) | |
Comprehensive income attributable to Cubic, net of tax | $ 20,644 | $ 10,687 | $ 1,982 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Accounts receivable: | ||
Long-term contracts | $ 127,406 | $ 393,691 |
Allowance for doubtful accounts | (1,392) | (1,324) |
Accounts receivable - net | 126,014 | 392,367 |
Contract assets | 349,559 | |
Recoverable income taxes | 7,754 | 91 |
Inventories | 106,794 | 84,199 |
Assets held for sale | 8,177 | |
Other current assets | 43,705 | |
Total current assets | 724,309 | 668,147 |
Long-term contracts receivables | 6,134 | |
Property, plant and equipment, net | 144,969 | 117,546 |
Deferred income taxes | 4,098 | 4,713 |
Goodwill | 578,097 | 333,626 |
Purchased intangibles, net | 165,613 | 73,533 |
Other assets | 76,872 | |
Total assets | 1,847,170 | 1,304,883 |
Current liabilities: | ||
Short-term borrowings | 195,500 | |
Contract Liability | 46,170 | |
Customer advances | 75,941 | |
Accrued compensation | 58,343 | 65,277 |
Income taxes payable | 773 | 8,586 |
Current portion of long-term debt | 10,714 | |
Total current liabilities | 529,159 | 328,339 |
Long-term debt | 189,111 | 199,793 |
Accrued pension liability | 25,386 | 7,802 |
Deferred compensation | 11,040 | 11,476 |
Income taxes payable | 937 | 2,406 |
Deferred income taxes | 4,554 | 2,689 |
Commitments and contingencies | ||
Shareholders' equity: | ||
Preferred stock, no par value: Authorized--5,000 shares, Issued and outstanding--none | ||
Common stock, no par value: Authorized--50,000 shares, 40,124 issued and 31,178 outstanding at September 30, 2019, 36,201 issued and 27,255 outstanding at September 30, 2018 | 274,472 | 45,008 |
Retained earnings | 862,948 | 801,834 |
Accumulated other comprehensive loss | (139,693) | (110,643) |
Treasury stock at cost - 8,945 shares | (36,078) | (36,078) |
Shareholders' equity related to Cubic | 961,649 | 700,121 |
Noncontrolling interest in VIE | 18,919 | 24,075 |
Total shareholders' equity | 980,568 | 724,196 |
Total liabilities and shareholders' equity | 1,847,170 | 1,304,883 |
Cubic Corporation Excluding VIE | ||
Current assets: | ||
Cash and cash equivalents | 65,800 | 111,834 |
Restricted cash | 19,507 | 17,400 |
Accounts receivable: | ||
Other current assets | 38,534 | 43,705 |
Long-term contracts financing receivables | 36,285 | |
Long-term capitalized contract costs | 84,924 | |
Other assets | 76,872 | 14,192 |
Current liabilities: | ||
Trade accounts payable | 180,773 | 125,414 |
Other current liabilities | 36,670 | 52,956 |
Long-term debt | 189,110 | 199,793 |
Other noncurrent liabilities | 22,817 | 19,113 |
OpCo. | ||
Current assets: | ||
Cash and cash equivalents | 347 | 374 |
Restricted cash | 9,967 | 10,000 |
Accounts receivable: | ||
Other current assets | 33 | |
Long-term contracts financing receivables | 115,508 | |
Long-term capitalized contract costs | 1,258 | |
Other assets | 1,419 | 810 |
Current liabilities: | ||
Trade accounts payable | 25 | 165 |
Other current liabilities | 191 | |
Long-term debt | 61,994 | 9,056 |
Other noncurrent liabilities | $ 21,605 | $ 13 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares shares in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred stock, par value | $ 0 | $ 0 |
Preferred stock, Authorized shares | 5,000 | 5,000 |
Preferred stock, Issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value | $ 0 | $ 0 |
Common stock, Authorized shares | 50,000 | 50,000 |
Common stock, Issued shares | 40,124 | 36,201 |
Common stock, outstanding shares | 31,178 | 27,255 |
Treasury stock, shares | 8,945 | 8,945 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities: | |||
Net income (loss) | $ 39,883 | $ 12,036 | $ (11,209) |
Net (income) loss from discontinued operations | 1,423 | (4,243) | (14,531) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Depreciation and amortization | 64,742 | 46,600 | 48,045 |
Share-based compensation expense | 15,488 | 7,515 | 5,012 |
Change in fair value of contingent consideration | (1,005) | 1,029 | (3,878) |
(Gain) loss on sale of property, plant and equipment | (32,510) | 405 | |
Gain on sale of investment in real estate | (1,474) | ||
Deferred income taxes | (3,363) | (6,860) | (917) |
Net pension benefit | (1,337) | (2,770) | (1,046) |
Excess tax benefits from equity incentive plans | (35) | ||
Changes in operating assets and liabilities, net of effects from acquisitions: | |||
Accounts receivable | 44,473 | (34,762) | (45,443) |
Contract assets | (83,697) | ||
Inventories | (31,544) | 3,023 | (18,867) |
Prepaid expenses and other current assets | 5,317 | (15,455) | 7,286 |
Long-term financing receivables | (56,575) | ||
Long-term capitalized contract costs | (29,552) | 8,911 | |
Accounts payable and other current liabilities | 27,792 | 30,423 | 13,389 |
Contract liabilities | (15,359) | 21,566 | 7,383 |
Income taxes | (17,268) | (361) | 8,240 |
Other items, net | 11,689 | (18,126) | (5,756) |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES FROM CONTINUING OPERATIONS | (31,851) | 8,589 | (3,011) |
NET CASH PROVIDED BY OPERATING ACTIVITIES FROM DISCONTINUED OPERATIONS | 10,376 | 27,747 | |
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (31,851) | 18,965 | 24,736 |
Investing Activities: | |||
Acquisition of businesses, net of cash acquired | (393,908) | (16,322) | (16,830) |
Purchases of marketable securities | (19,121) | ||
Proceeds from sales or maturities of marketable securities | 31,868 | ||
Proceeds from sale of property, plant and equipment | 44,891 | ||
Purchases of property, plant and equipment | (49,084) | (31,696) | (36,916) |
Proceeds from sale of investment in real estate | 2,400 | ||
Purchase of non-marketable debt and equity securities | (60,694) | (1,500) | (2,700) |
NET CASH USED IN INVESTING ACTIVITIES FROM CONTINUING OPERATIONS | (458,795) | (47,118) | (43,699) |
NET CASH PROVIDED BY INVESTING ACTIVITIES FROM DISCONTINUED OPERATIONS | 133,795 | 1,217 | |
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (458,795) | 86,677 | (42,482) |
Financing Activities: | |||
Proceeds from short-term borrowings | 898,000 | 269,770 | 130,780 |
Principal payments on short-term borrowings | (702,500) | (324,770) | (315,780) |
Principal payments on long-term debt | (978) | ||
Proceeds from stock issued under employee stock purchase plan | 1,832 | 1,517 | 2,234 |
Purchase of common stock | (3,688) | (2,449) | (2,444) |
Dividends paid | (8,414) | (7,355) | (7,341) |
Excess tax benefits from equity incentive plans | 35 | ||
Contingent consideration payments related to acquisitions of businesses | (820) | (1,156) | (2,625) |
Equity contribution from Boston VIE partner | 24,349 | ||
Proceeds from equity offering, net | 215,832 | ||
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 448,497 | (31,676) | (196,119) |
Effect of exchange rates on cash | (1,838) | (2,935) | 9,667 |
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS | (43,987) | 71,031 | (204,198) |
Cash and cash equivalents at the beginning of the period | 139,608 | 68,577 | 272,775 |
CASH AND CASH EQUIVALENTS AT THE END OF THE PERIOD | 95,621 | 139,608 | 68,577 |
Nuvotronics | |||
Supplemental disclosure of non-cash investing and financing activities: | |||
Liability recognized in connection with the acquisition, net | 4,900 | ||
Shield Aviation | |||
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Change in fair value of contingent consideration | (1,800) | 200 | |
Supplemental disclosure of non-cash investing and financing activities: | |||
Liability recognized in connection with the acquisition, net | 6,248 | ||
Deltenna | |||
Supplemental disclosure of non-cash investing and financing activities: | |||
Liability recognized in connection with the acquisition, net | 1,327 | ||
Vocality | |||
Supplemental disclosure of non-cash investing and financing activities: | |||
Liability recognized in connection with the acquisition, net | $ 271 | ||
Cubic Corporation Excluding VIE | |||
Financing Activities: | |||
Deferred financing fees | (1,907) | ||
OpCo. | |||
Financing Activities: | |||
Proceeds from long-term borrowings | $ 50,162 | 13,196 | |
Deferred financing fees | $ (4,778) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Common Stock | Retained Earnings | Accumulated Other Comprehensive Loss | Treasury Stock | Noncontrolling Interest in VIE | Total |
Balance at Sep. 30, 2016 | $ 32,756 | $ 813,035 | $ (119,817) | $ (36,078) | ||
Balance (in shares) at Sep. 30, 2016 | 26,992 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | (11,209) | $ (11,209) | ||||
Other comprehensive income (loss), net of tax | 13,191 | $ 13,191 | ||||
Stock issued under equity incentive plans (in shares) | 158 | |||||
Stock issued under employee stock purchase plans, value | 2,234 | |||||
Stock issued under employee stock purchase plans (in shares) | 32 | |||||
Purchase of common stock, value | (2,444) | |||||
Purchase of common stock (in shares) | (55) | |||||
Stock- based compensation | 5,269 | |||||
Tax expense from equity incentive plans | 35 | |||||
Cash dividends paid | (7,341) | |||||
Balance at Sep. 30, 2017 | 37,850 | 794,485 | (106,626) | (36,078) | ||
Balance (in shares) at Sep. 30, 2017 | 27,127 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 12,310 | $ (274) | $ 12,310 | |||
Other comprehensive income (loss), net of tax | (1,623) | $ (1,623) | ||||
Stock issued under equity incentive plans (in shares) | 158 | |||||
Stock issued under employee stock purchase plans, value | 1,517 | |||||
Stock issued under employee stock purchase plans (in shares) | 26 | |||||
Purchase of common stock, value | (2,449) | |||||
Purchase of common stock (in shares) | (56) | |||||
Stock- based compensation | 8,090 | |||||
Equity contribution of noncontrolling interest | 24,349 | |||||
Cumulative effect of accounting standard adoption | 2,394 | (2,394) | ||||
Cash dividends paid | (7,355) | |||||
Balance at Sep. 30, 2018 | 45,008 | 801,834 | (110,643) | (36,078) | 24,075 | $ 724,196 |
Balance (in shares) at Sep. 30, 2018 | 27,255 | |||||
Increase (Decrease) in Stockholders' Equity | ||||||
Net income (loss) | 49,694 | (9,811) | $ 49,694 | |||
Other comprehensive income (loss), net of tax | (29,050) | $ (29,050) | ||||
Stock issued under equity incentive plans (in shares) | 145 | |||||
Stock issued under employee stock purchase plans, value | 1,832 | |||||
Stock issued under employee stock purchase plans (in shares) | 32 | |||||
Purchase of common stock, value | (3,688) | |||||
Purchase of common stock (in shares) | (49) | |||||
Stock- based compensation | 15,488 | |||||
Cumulative effect of accounting standard adoption | 19,834 | 4,655 | ||||
Stock issued under equity offering, net, value | 215,832 | |||||
Stock issued under equity offering, net (in shares) | 3,795 | |||||
Cash dividends paid | (8,414) | |||||
Balance at Sep. 30, 2019 | $ 274,472 | $ 862,948 | $ (139,693) | $ (36,078) | $ 18,919 | $ 980,568 |
Balance (in shares) at Sep. 30, 2019 | 31,178 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - $ / shares | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY | |||
Cash dividends paid, per share of common stock | $ 0.27 | $ 0.27 | $ 0.27 |
Summary of Significant Accounti
Summary of Significant Accounting Polices | 12 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Polices | |
Summary of Significant Accounting Polices | CUBIC CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS September 30, 2019 NOTE 1—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Organization and Nature of the Business: Through September 30, 2017 our principal lines of business were transportation systems and services, defense systems, and defense services. On May 31, 2018, we sold the Cubic Global Defense Services (CGD Services) business. In March 2018, all of the criteria were met for the classification of CGD Services as a discontinued operation. As a result, the operating results, assets, liabilities, and cash flows of CGD Services have been classified as discontinued operations and have been excluded from amounts described below. In addition, we concluded that Cubic Mission Solutions became a separate operating and reportable segment beginning on October 1, 2017. As a result, we now operate in three reportable business segments: Cubic Transportation Systems (CTS), Cubic Global Defense Systems (CGD), and Cubic Mission Solutions (CMS). Refer to “Note 3 – Acquisitions and Divestitures” for additional information about the sale of CGD Services and the related discontinued operation classification and “Note 18 – Business Segment Information” for additional information on the separate disclosure of operating and reportable segment information for CMS. Principles of Consolidation: Foreign Currency Transactions and Translation Transactions denominated in currencies other than our own subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our Consolidated Balance Sheets related to such transactions result in transaction gains and losses that are reflected in our Consolidated Statements of Operations as a component of other income (expense). Total transaction gains and losses, which are related primarily to advances to foreign subsidiaries and advances between foreign subsidiaries amounted to a gain of $0.7 million in 2019, a loss of $2.2 million in 2018, and a gain of $0.7 million in 2017. Use of Estimates: Revenue Recognition: Revenue from Contracts with Customers 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. In accordance with the modified retrospective transition method, our Consolidated Statement of Operations for the year ended September 30, 2019 and our Consolidated Balance Sheet as of September 30, 2019 are presented under ASC 606, while our Consolidated Statement of Operations for the years ended September 30, 2018 and 2017 and our Consolidated Balance Sheet as of September 30, 2018 are presented under ASC 605, Revenue Recognition 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 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, international government customers, and international local municipal transit agencies. We classify sales as products or services in our Consolidated Statements of Operations 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 allocate the transaction price to the performance obligations based upon their relative standalone selling prices. For such contracts 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. A number of 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. 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. 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 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. 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 design and build type contracts 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 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 received 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 audits 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). Years Ended September 30, 2019 2018 2017 Operating income (loss) $ (2,235) $ (6,986) $ 5,737 Net income (loss) from continuing operations (2,351) (5,146) 3,208 Diluted earnings per share (0.08) (0.19) 0.12 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 is comprised of 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 September 30, 2019, our ending backlog was $3.401 billion. We expect to recognize approximately 30% of our September 30, 2019 backlog over the next 12 months and approximately 45% over the next 24 months as revenue, with the remainder recognized thereafter. Disaggregation of Revenue Cash Equivalents Restricted Cash: Accounts Receivable: Contract Assets: Inventories: Long-term capitalized contract costs: Property, Plant and Equipment: methods for depreciable real property over estimated useful lives or the term of the underlying lease, if shorter than the estimated useful lives, for leasehold improvements. We use accelerated methods (declining balance and sum-of-the-years-digits) for machinery and equipment over their estimated useful lives. Certain costs incurred in the development of internal-use software and software applications, including external direct costs of materials and services and applicable compensation costs of employees devoted to specific software development, are capitalized as computer software costs. Costs incurred outside of the application development stage are expensed as incurred. The amounts capitalized are included in property, plant and equipment and are depreciated on a straight-line basis over the estimated useful life of the software, which ranges from three to seven years. No depreciation expense is recorded until the software is ready for its intended use. Goodwill and Purchased Intangibles: Impairment of Long-Lived Assets: Recognizing assets acquired and liabilities assumed in a business combination: Contract Liabilities Contingencies: similar or related cases or proceedings. We may increase or decrease our legal reserves in the future, on a matter-by-matter basis, to account for developments in such matters. Derivative Financial Instruments: Defined Benefit Pension Plans: Comprehensive Income (Loss): Research and Development (R&D): Stock-Based Compensation: Income Taxes Net Income (Loss) Per Share: 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 RSUs. Dilutive RSUs 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. For RSUs with performance and market-based vesting, no common equivalent shares are included in the computation of diluted EPS until the performance criteria have been met, and once the criteria are met the dilutive restricted stock units are calculated using the treasury stock method, modified by the multiplier that is calculated at the end of the accounting period as if the vesting date was at the end of the accounting period. The multiplier on RSUs with performance and market-based vesting is further described in Note 16. 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 income (loss) per common share were as follows (in thousands): Years Ended September 30, 2019 2018 2017 Weighted average shares - basic 30,495 27,229 27,106 Effect of dilutive securities 111 122 — Weighted average shares - diluted 30,606 27,351 27,106 Number of anti-dilutive securities — — 967 Recent Accounting Pronouncements: Recently Adopted Accounting Pronouncements 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 Staff Accounting Bulletin (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. The SAB 118 measurement period subsequently ended on December 22, 2018. Although we no longer consider 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. In November 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-18, Restricted Cash Recent Accounting Pronouncements – Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases 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 and 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 expect to elect the practical expedients which provide that entities need not reassess whether existing contracts contain a lease, lease classification of existing leases, or the treatment of initial direct costs on existing leases. We are substantially complete with our review of lease contracts, evaluating other contracts for potentially embedded leases, implementing a new lease accounting and administration software solution, and establishing new processes and internal controls. Upon adoption, we expect to record a right of use asset of approximately $80 million and a lease liability of approximately $88 million. We do not expect material changes to the recognition of lease expense in our consolidated statements of income. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement - Disclosure Framework (Topic 820) In August 2018, the FASB issued ASU 2018-14, Defined Benefit Plan - Disclosure Framework (Topic 715) |
Implementation of the New Reven
Implementation of the New Revenue Recognition Standard | 12 Months Ended |
Sep. 30, 2019 | |
Implementation of the New Revenue Recognition Standard | |
Implementation of the New Revenue Recognition Standard | NOTE 2—IMPLEMENTATION OF THE NEW REVENUE RECOGNITION STANDARD In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers 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 , Based on contracts in process at September 30, 2018, upon adoption of ASC 606 we recorded a net increase to shareholder’s equity of $24.5 million, which includes the acceleration of net sales of approximately $114.9 million and the related cost of sales of $90.4 million. The adjustment to shareholder’s equity 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 appropriate. In addition, the adjustment to shareholder’s equity 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 Consolidated Statements of Operations 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 that consisted of unbilled contract receivables as reported under ASC 605 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 Consolidated Balance Sheet as of October 1, 2018 due to the adoption of ASC 606 (in thousands): September 30, Adjustments October 1, 2018 2018 Due to As Adjusted Under ASC 605 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 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 liabilities — 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 Accrued pension liability 7,802 — 7,802 Deferred compensation 11,476 — 11,476 Income taxes payable 2,406 — 2,406 Deferred income taxes 2,689 — 2,689 Other noncurrent liabilities 19,113 — 19,113 Other noncurrent 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 our Consolidated Statement of Operations for the twelve months ended September 30, 2019 (in thousands, except per share data): Twelve months ended September 30, 2019 As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 Net sales: Products $ 902,913 $ 108,156 $ 1,011,069 Services 484,363 1,043 485,406 1,387,276 109,199 1,496,475 Costs and expenses: Products 638,621 93,516 732,137 Services 332,923 — 332,923 Selling, general and administrative expenses 269,266 798 270,064 Research and development 50,132 — 50,132 Amortization of purchased intangibles 42,106 — 42,106 Gain on sale of fixed assets (32,510) — (32,510) Restructuring costs 15,386 — 15,386 1,315,924 94,314 1,410,238 Operating income 71,352 14,885 86,237 Other income (expenses): Interest and dividend income 394 6,125 6,519 Interest expense (20,453) — (20,453) Other income (expense), net (19,957) — (19,957) Income from continuing operations before income taxes 31,336 21,010 52,346 Income tax provision (benefit) 11,059 (19) 11,040 Income from continuing operations 20,277 21,029 41,306 Net loss from discontinued operations (1,423) — (1,423) Net income 18,854 21,029 39,883 Less noncontrolling interest in loss of VIE (22,076) 12,265 (9,811) Net income attributable to Cubic $ 40,930 $ 8,764 $ 49,694 Amounts attributable to Cubic: Net income from continuing operations 42,353 8,764 51,117 Net loss from discontinued operations (1,423) — (1,423) Net income attributable to Cubic $ 40,930 $ 8,764 $ 49,694 Net income per share: Basic earnings per share attributable to Cubic $ 1.34 $ 0.29 $ 1.63 Diluted earnings per share attributable to Cubic $ 1.34 $ 0.29 $ 1.62 The table below quantifies the impact of adopting ASC 606 on segment net sales and operating income (loss) for the twelve months ended September 30, 2019 (in thousands): Twelve months ended September 30, 2019 As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 Sales: Cubic Transportation Systems $ 787,936 $ 61,843 $ 849,779 Cubic Mission Solutions 327,139 1,632 328,771 Cubic Global Defense 272,201 45,724 317,925 Total sales $ 1,387,276 $ 109,199 $ 1,496,475 Operating income: Cubic Transportation Systems $ 65,974 $ 11,259 $ 77,233 Cubic Mission Solutions 7,244 515 7,759 Cubic Global Defense 19,858 3,111 22,969 Unallocated corporate expenses (21,724) — (21,724) Total operating income $ 71,352 $ 14,885 $ 86,237 The table below presents how the impact of the adoption of ASC 606 affected certain line items on our Consolidated Balance Sheet at September 30, 2019 (in thousands): As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 ASSETS Current assets: Cash and cash equivalents $ 65,800 $ — $ 65,800 Cash in consolidated VIE 347 — 347 Restricted cash 19,507 — 19,507 Restricted cash in consolidated VIE 9,967 — 9,967 Accounts receivable, net 399,639 (273,625) 126,014 Contract assets — 349,559 349,559 Recoverable income taxes 6,725 1,029 7,754 Inventories 158,713 (51,919) 106,794 Assets held for sale — — — Other current assets 38,534 — 38,534 Other current assets in consolidated VIE 33 — 33 Total current assets 699,265 25,044 724,309 Long-term contracts receivables 3,077 (3,077) — Long-term contracts financing receivables — 36,285 36,285 Long-term contracts financing receivables in consolidated VIE — 115,508 115,508 Long-term capitalized contract costs 136,804 (136,804) — Long-term capitalized contract costs in consolidated VIE 2,545 (2,545) — Property, plant and equipment, net 144,969 — 144,969 Deferred income taxes 4,098 — 4,098 Goodwill 578,097 — 578,097 Purchased intangibles, net 165,613 — 165,613 Other assets 76,872 — 76,872 Other assets in consolidated VIE 1,419 — 1,419 Total assets $ 1,812,759 $ 34,411 $ 1,847,170 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ 195,500 $ — $ 195,500 Trade accounts payable 182,671 (1,898) 180,773 Trade accounts payable in consolidated VIE 25 — 25 Contract liabilities — 46,170 46,170 Customer advances 56,001 (56,001) — Accrued compensation 58,343 — 58,343 Other current liabilities 36,670 — 36,670 Other current liabilities in consolidated VIE 191 — 191 Income taxes payable 152 621 773 Current portion of long-term debt 10,714 — 10,714 Total current liabilities 540,267 (11,108) 529,159 Long-term debt 189,110 — 189,110 Long-term debt in consolidated VIE 61,994 — 61,994 Accrued pension liability 25,386 — 25,386 Deferred compensation 11,040 — 11,040 Income taxes payable 937 — 937 Deferred income taxes 4,554 — 4,554 Other noncurrent liabilities 22,817 — 22,817 Other noncurrent liabilities in consolidated VIE 21,605 — 21,605 Shareholders’ equity: Common stock 274,472 — 274,472 Retained earnings 834,349 28,599 862,948 Accumulated other comprehensive loss (139,693) — (139,693) Treasury stock at cost (36,078) — (36,078) Shareholders’ equity related to Cubic 933,050 28,599 961,649 Noncontrolling interest in VIE 1,999 16,920 18,919 Total shareholders’ equity 935,049 45,519 980,568 Total liabilities and shareholders’ equity $ 1,812,759 $ 34,411 $ 1,847,170 |
Acquisitions and Divestitures
Acquisitions and Divestitures | 12 Months Ended |
Sep. 30, 2019 | |
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 Nova Global Supply & Services, LLC (Purchaser), an entity affiliated with GC Valiant, LP, under which we agreed to sell our CGD Services business to the Purchaser. 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. Consequently, in the second quarter of fiscal 2018, we recognized a $6.9 million loss within discontinued operations, which was calculated as the excess of the carrying value of the net assets of CGD Services less the estimated sales price in the stock purchase agreement less estimated selling costs. 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 we recorded a receivable from the Purchaser for the estimated amount due related to the working capital settlement. The balance of this receivable was $3.7 million at September 30, 2018. During fiscal 2019, we worked with the Purchaser and revised certain estimates related to the working capital settlement. In connection with the revision of these estimates, we reduced the receivable from the Purchaser by $1.4 million and recognized a corresponding loss on the sale of CGD Services in fiscal 2019. Certain remaining working capital settlement estimates, primarily related to the fair value of accounts receivable, have 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. The operations and cash flows of CGD Services are reflected in our Consolidated Statements of Operations 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 (in thousands): Years Ended September 30, 2019 2018 2017 Net sales $ — $ 262,228 $ 378,152 Costs and expenses: Cost of sales — 235,279 342,819 Selling, general and administrative expenses — 11,365 17,487 Amortization of purchased intangibles — 1,373 2,752 Restructuring costs — 7 208 Other income — (15) (46) Earnings from discontinued operations before income taxes — 14,219 14,932 Net loss on sale 1,423 6,131 — Income tax provision — 3,845 401 Net income (loss) from discontinued operations $ (1,423) $ 4,243 $ 14,531 Business Acquisitions PIXIA Corp. On June 27, 2019, we paid cash of $50.0 million to purchase 20% of the outstanding capital stock of PIXIA Corp (Pixia), a private software company based in Herndon, Virginia, which provides high performance advanced data indexing, warehousing, processing and dissemination software solutions for large volumes of imagery data within traditional or cloud-based architectures. We account for our investment in Pixia using the equity method of accounting. In accordance with ASC 323, Investments – Equity Method and Joint Ventures , we accounted for the basis difference between the cost of our investment in Pixia and our equity share of Pixia’s net assets as if Pixia was a consolidated subsidiary. At the date of our investment, we calculated the fair value of our share of Pixia’s identifiable intangible assets as $17.0 million, which will be amortized in other expense over a weighted average remaining useful life of approximately five years . The remaining identifiable intangible assets subject to amortization was $15.4 million as of September 30, 2019. Our share of the remaining basis difference of $32.3 million is identified as goodwill and will not be amortized. We recognize our interest in Pixia’s operating results less the amortization of our share of Pixia’s intangible assets within other income (expense) in our Consolidated Statements of Operations. The net amount we recognized in fiscal 2019 for our interest in Pixia’s operating results less the amortization of our share of Pixia’s intangible assets was $1.2 million. We also received a dividend of $2.0 million, which was recognized as a reduction in our investment in Pixia . At September 30, 2019 our investment in Pixia amounted to $49.2 million and is recorded within other assets on our Consolidated Balance Sheet. Our purchase agreement with Pixia includes an option to purchase the remaining 80% of its capital stock for $200.0 million, which we exercised in November 2019. We expect our acquisition of the remaining capital stock of Pixia to close in February 2020. Delerrok Inc. During fiscal years 2018 and 2019, we invested $1.5 million and $5.0 million, respectively, to purchase a total of 17.5% of the outstanding common stock of Delerrok Inc. (Delerrok), a private technology company based in Vista, California, that specializes in electronic fare collection systems. We elected the measurement alternative provided by ASC 321, Investments – Equity Securities , and recorded our investment in Delerrok at cost, adjusted for observable price changes or any impairments, within other assets on our Consolidated Balance Sheet. At September 30, 2019, our investment in Delerrok amounted to $6.5 million. We did not recognize any income or loss from our investment in Delerrok in fiscal 2018 or fiscal 2019. Our purchase agreement includes an option to purchase the remaining 82.5% of Delerrok’s common stock, which we exercised in November 2019. We expect our acquisition of the remaining common stock of Delerrok to close in December 2019. Consolidated 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. Nuvotronics, Inc. In March 2019, we acquired all of the outstanding capital stock of Nuvotronics, Inc. (Nuvotronics), a provider of microfabricated radio frequency (RF) products. Based in Durham, North Carolina, Nuvotronics’ patented PolyStrata technology enables the design and production of uniquely packaged RF devices, such as antennas, filters, and combiners, all of which are components in Cubic’s advanced technology product offerings. Nuvotronics is expected to provide synergies from combining its capabilities with our existing CMS business . Nuvotronics’ sales and results of operations included in our operating results were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ 7.4 $ — $ — Operating loss (6.9) — — Net loss after taxes (6.9) — — Nuvotronics’ operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 1.2 $ — $ — Acquisition-related expenses 3.0 — — The acquisition-date fair value of consideration is $66.8 million, which is comprised of net cash paid of $61.5 million, plus the estimated fair value of contingent consideration of $4.9 million, plus a $0.4 million estimated payable due to 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. Under the purchase agreement, we will pay the sellers up to $8.0 million of contingent consideration if Nuvotronics meets certain gross profit goals for the 12-month periods ended December 31, 2020 and December 31, 2021. 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 following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Technology $ 22.7 Trade name 1.5 Backlog 1.4 Non-compete agreements 0.5 Customer relationships 0.6 Accounts receivable and contract assets 2.6 Fixed assets 2.7 Accounts payable and accrued expenses (1.8) Deferred taxes (3.2) Other net assets acquired (liabilities assumed) (0.6) Net identifiable assets acquired 26.4 Goodwill 40.4 Net assets acquired $ 66.8 The estimated fair values of assets acquired and liabilities assumed, including purchased intangibles, are preliminary estimates pending the finalization of our valuation analyses and the receipt of further information from the seller regarding its assets and liabilities. 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 nine years from the date of acquisition. The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of Nuvotronics with our existing CMS business, and strengthening our capability of developing and integrating products 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 not expected to be deductible for tax purposes. The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of Nuvotronics is as follows (in millions): Year Ended September 30, 2020 $ 4.0 2021 3.0 2022 3.0 2023 2.9 2024 2.7 Thereafter 10.1 GRIDSMART Technologies, Inc. In January 2019, we acquired all of the outstanding capital stock of GRIDSMART Technologies, Inc. (GRIDSMART), a provider of differentiated video tracking solutions to the Intelligent Traffic Systems 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. GRIDSMART’s sales and results of operations included in our operating results were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ 20.6 $ — $ — Operating income 0.9 — — Net income after taxes 0.9 — — GRIDSMART’s operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 4.0 $ — $ — Acquisition-related expenses 2.9 — — The acquisition-date fair value of consideration is $86.8 million. 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 $ 25.7 Customer relationships 3.6 Trade name 2.4 Inventory 4.3 Accounts receivable 1.7 Accounts payable and accrued expenses (1.9) Deferred taxes (3.3) Other net assets acquired 0.6 Net identifiable assets acquired 33.1 Goodwill 53.7 Net assets acquired $ 86.8 The estimated fair values of assets acquired and liabilities assumed, including purchased intangibles, are preliminary estimates pending the finalization of our valuation analyses, including the filing of pre-acquisition income tax returns. 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 approximately eight years from the date of acquisition. The goodwill resulting from the acquisition consists primarily of the synergies expected from combining the operations of GRIDSMART 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 GRIDSMART is as follows (in millions): Year Ended September 30, 2020 $ 5.3 2021 3.9 2022 3.5 2023 3.5 2024 3.5 Thereafter 8.1 Advanced Traffic Solutions Inc. In October 2018, we acquired all of the outstanding capital stock of 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 CTS business. Trafficware’s sales and results of operations included in our operating results were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ 53.8 $ — $ — Operating loss (11.0) — — Net loss after taxes (11.0) — — Trafficware’s operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 15.3 $ — $ — Acquisition-related expenses 5.2 — — The acquisition-date fair value of consideration is $237.2 million. The acquisition was financed primarily with proceeds from draws on our line of credit. The following table summarizes the 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 9.9 Accounts payable and accrued expenses (8.9) Other net assets acquired (liabilities assumed) (2.0) Net identifiable assets acquired 84.0 Goodwill 153.2 Net assets acquired $ 237.2 The fair values of purchased intangibles were determined using the valuation methodology deemed to be the most appropriate for each type of asset being valued. The 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 is as follows (in millions): Year Ended September 30, 2020 $ 11.4 2021 11.4 2022 11.4 2023 6.4 2024 5.9 Thereafter 12.9 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 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 were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ — $ — $ — Operating loss (5.3) (0.8) — Net loss after taxes (5.3) (0.6) — Shield’s operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 0.8 $ 0.1 $ — Loss (gain) for changes in fair values of contingent consideration (1.8) 0.2 — The acquisition-date fair value of consideration is $12.8 million, which is comprised of the 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 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 method 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 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 amortization expense related to the intangible assets recorded in connection with our acquisition of Shield is as follows (in millions): Year Ended September 30, 2020 $ 0.8 2021 0.8 2022 0.8 2023 0.8 2024 0.8 Thereafter 1.4 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 were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ 1.5 $ 0.6 $ — Operating loss (0.6) (2.7) — Net loss after taxes (0.6) (1.9) — MotionDSP’s operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 0.7 $ 0.4 $ — Acquisition-related expenses 0.4 0.8 0.2 The acquisition of MotionDSP was paid for with funds from existing cash resources. The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Customer relationships $ 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 is as follows (in millions) Year Ended September 30, 2020 $ 0.7 2021 0.7 2022 0.7 2023 0.7 2024 0.6 Thereafter 0.2 Pro forma information The following unaudited pro forma information presents our consolidated results of operations as if Nuvotronics, GRIDSMART, Trafficware, Shield, and MotionDSP had been included in our consolidated results since October 1, 2017 (in millions): Years Ended September 30, 2019 2018 Net sales $ 1,510.8 $ 1,297.6 Net income (loss) $ 45.1 $ (5.0) 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 items 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. |
Variable Interest Entities
Variable Interest Entities | 12 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entities | |
Variable Interest Entities | NOTE 4—VARIABLE INTEREST ENTITIES In accordance with ASC 810, Consolidation 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, 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 Cubic. 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 Cubic by OpCo. Cubic 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 in Cubic’s consolidated financial statements. Also, upon creation of the P3 Venture, Cubic issued a letter of credit for $2.7 million to HoldCo in accordance with Cubic’s equity funding responsibilities. HoldCo is able to draw on the Cubic letter of credit in certain liquidity instances, but no amounts have been drawn on this letter of credit through September 30, 2019. 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 September 30, 2019, the outstanding balance on the long-term debt facility was $62.0 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 amount. 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 September 30, 2019 and 2018, the outstanding notional principal amounts on open interest rate swaps were $137.4 million and $38.6 million, respectively. The fair value of OpCo’s interest rate swaps was $21.6 million at September 30, 2019, and is recorded as a liability in other long-term liabilities in our consolidated balance sheets. The interest rate swaps had no significant fair value at September 30, 2018. OpCo’s interest rate swaps have not been designated as effective hedges, and as such 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 totaled $21.6 million in fiscal 2019. There was no significant unrealized gain or loss in fiscal 2018 related to the change in fair value of the interest rate swaps. See Note 5 for a description of the measurement of fair value of derivative financial instruments, including OpCo’s interest rate swaps. OpCo holds a 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 Consolidated Balance Sheets at September 30, 2019 and 2018 are as follows: September 30, 2019 2018 (in thousands) Cash $ 347 $ 374 Restricted cash 9,967 10,000 Other current assets 33 — Long-term capitalized contract costs — 33,818 Long-term contracts financing receivable 115,508 — Other noncurrent assets 1,419 810 Total assets $ 127,274 $ 45,002 Trade accounts payable $ 25 $ 165 Accrued compensation and other current liabilities 191 — Due to Cubic 25,143 11,724 Other long-term liabilities 21,605 13 Long-term debt 61,994 9,056 Total liabilities $ 108,958 $ 20,958 Total Cubic equity (603) (304) Noncontrolling interests 18,919 24,348 Total liabilities and owners' equity $ 127,274 $ 45,002 The assets of OpCo are restricted for OpCo’s use 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. 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 Consolidated Statements of Operations are as follows (in thousands): Years Ended September 30, 2019 2018 2017 Revenue $ 11,211 $ — $ — Operating income 9,923 — — Other income (expense), net (21,592) — — Interest income 3,704 — — Interest expense (2,946) — — |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | NOTE 5—FAIR VALUE OF FINANCIAL INSTRUMENTS The valuation techniques required to determine fair value are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. The two types of inputs create the following fair value hierarchy: ● Level 1 - Quoted prices for identical instruments in active markets. ● Level 2 - Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable. ● Level 3 - Significant inputs to the valuation model are unobservable. The following table presents assets and liabilities measured and recorded at fair value on our balance sheets on a recurring basis (in thousands): September 30, 2019 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 — 2,635 — 2,635 — 1,803 — 1,803 Noncurrent derivative assets — 859 — 859 — 314 — 314 Total assets measured at fair value $ — $ 3,494 $ — $ 3,494 $ 9,000 $ 2,117 $ — $ 11,117 Liabilities Current derivative liabilities — 529 — 529 — 1,657 — 1,657 Noncurrent derivative liabilities — 228 — 228 — 75 — 75 Contingent consideration to seller of H4 Global — — 1,073 1,073 — — 665 665 Contingent consideration to seller of Deltenna — — 1,787 1,787 — — 1,081 1,081 Contingent consideration to seller of Shield — — 3,814 3,814 — — 5,618 5,618 Contingent consideration to seller of Nuvotronics — — 4,200 4,200 — — — — Contingent consideration to seller of TeraLogics - revenue targets — — — — — — 1,750 1,750 Total liabilities measured at fair value $ — $ 757 $ 10,874 $ 11,631 $ — $ 1,732 $ 9,114 $ 10,846 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 September 30, 2019, we have the following remaining contingent consideration arrangements with the sellers of companies which we acquired: ● H4 Global: Payments of up to $2.7 million of contingent consideration based upon the value of contracts entered into over the five-year period ending September 30, 2020. ● Deltenna: Payments of up to $6.6 million of contingent consideration if Deltenna meets certain sales goals from the date of acquisition through the fiscal year ending September 30, 2022. ● 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. ● Nuvotronics: Payments of up to $8.0 million of contingent consideration if Nuvotronics meets certain gross profit goals for the 12-month periods ended December 31, 2020 and December 31, 2021. 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 maximum remaining payout to the sellers of H4 Global is $2.7 million at September 30, 2019, 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 Deltenna contingent consideration was primarily 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 was 36% as of September 30, 2019 and 53% as of September 30, 2018. The selected discount rate was 11% as of September 30, 2019 and 11.5% as of September 30, 2018. 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 1,000,000 simulation trials. Key inputs for the simulation include projected revenues, assumed discount rates for projected revenues and cash flows, and volatility. The volatility and revenue risk adjustment factors were determined based on analysis of publicly traded comparable companies and as of September 30, 2019 were 18.0% and 13.1%, respectively, and as of September 30, 2018 were 20.0% and 14.5%, respectively. The discount rate used was based on our expected borrowing rate under our financing arrangements, which was determined to be 3.6% at September 30, 2019 and 3.9% at September 30, 2018. The fair value of the Nuvotronics contingent consideration was estimated based on Monte Carlo simulations. Under the purchase agreement, we will pay the sellers up to $8.0 million if Nuvotronics meets certain gross profit goals for the 12-month periods ended December 31, 2020 and December 31, 2021. The fair value of the contingent consideration was determined based upon a probability distribution of values based on 1,000,000 simulation trials. Key inputs for the simulation include projected gross profits, assumed discount rates for projected gross profits, and gross profit volatility. The volatility factor used as of September 30, 2019 was 12.4% and was determined based on analysis of publicly traded comparable companies. The discount rate used as of September 30, 2019 was 7.4%, which was based on our risk-free rate of return adjusted for our gross profit required risk premium. 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 September 30, 2019, the following table summarizes the change in fair value of our Level 3 contingent consideration liabilities (in thousands): H4 Global Deltenna Shield Nuvotronics TeraLogics (Contract Extensions) TeraLogics (Revenue Targets) Total Balance as of September 30, 2017 $ 591 $ 1,376 $ — $ — $ 800 $ 2,450 $ 5,217 Initial measurement recognized at acquisition — — 5,618 — — — 5,618 Cash paid to seller — — — — (1,000) (1,750) (2,750) Total remeasurement (gain) loss recognized in earnings 74 (295) — — 200 1,050 1,029 Balance as of September 30, 2018 $ 665 $ 1,081 $ 5,618 $ — $ — $ 1,750 $ 9,114 Initial measurement recognized at acquisition — — — 4,900 — — 4,900 Cash paid to seller (385) — — — — (1,750) (2,135) Total remeasurement (gain) loss recognized in earnings 793 706 (1,804) (700) — — (1,005) Balance as of September 30, 2019 $ 1,073 $ 1,787 $ 3,814 $ 4,200 $ — $ — $ 10,874 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. In fiscal 2019, we invested $5.0 million in Franklin Blackhorse, L.P., a limited partnership investment fund that invests in early stage, privately owned companies in the military, commercial, and disruptive technology sectors. We account for our investment using the equity method of accounting. For the year ended September 30, 2019, we recognized earnings of $0.3 million representing our share of the fund’s operating results, which is included in other income (expense) in our Consolidated Statements of Operations. We recorded a $5.3 million investment within other assets in our Consolidated Balance Sheet at September 30, 2019. The fair value of long-term debt is calculated by discounting the value of the note based on market interest rates for similar debt instruments, which is a Level 2 technique. The following table presents the estimated fair value and carrying value of our long-term debt (in millions): September 30, 2019 2018 Fair value $ 203.3 $ 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 2019, 2018, or 2017 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 16. |
Contract Assets and Liabilities
Contract Assets and Liabilities | 12 Months Ended |
Sep. 30, 2019 | |
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): September 30, October 1, 2019 2018 Contract assets $ 349,559 $ 272,210 Contract liabilities $ 46,170 $ 70,127 Contract assets increased $77.3 million during the twelve months ended September 30, 2019, due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the twelve months ended September 30, 2019 for which we have not yet billed. There were no significant impairment losses related to our contract assets during the twelve months ended September 30, 2019. Contract liabilities decreased $24.0 million during the twelve months ended September 30, 2019, due to revenue recognition in excess of payments received on these performance obligations. During the twelve-month period ended September 30, 2019, we recognized $62.4 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. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Sep. 30, 2019 | |
Accounts Receivable | |
Accounts Receivable | NOTE 7—ACCOUNTS RECEIVABLE The components of accounts receivable are as follows (in thousands): September 30, 2019 2018 Accounts receivable Billed $ 127,406 $ 156,948 Unbilled — 242,877 Allowance for doubtful accounts (1,392) (1,324) Total accounts receivable 126,014 398,501 Less estimated amounts not currently due — (6,134) Current accounts receivable $ 126,014 $ 392,367 Amounts billed include $60.3 million and $80.5 million due on U.S. federal government contracts at September 30, 2019 and 2018, respectively. As further described in Note 2, effective October 1, 2018, the In our normal course of business, we may sell trade receivables to financial institutions as a cash management technique. We do not retain financial or legal obligations for these receivables that would result in material losses. Our ongoing involvement is limited to the remittance of customer payments to the financial institutions with respect to the sold trade receivables; therefore, our sold trade receivables are not included in our Consolidated Balance Sheet in any period presented. As of September 30, 2019, we sold $31.1 million of outstanding trade receivables to financial institutions. |
Inventories
Inventories | 12 Months Ended |
Sep. 30, 2019 | |
Inventories | |
Inventories | NOTE 8—INVENTORIES Inventories consist of the following (in thousands): September 30, 2019 2018 Finished products $ 10,905 $ 7,099 Work in process and inventoried costs under long-term contracts 46,951 63,169 Materials and purchased parts 48,938 23,710 Customer advances — (9,779) Net inventories $ 106,794 $ 84,199 At September 30, 2019, work in process and inventoried costs under long-term contracts includes approximately $5.8 million in costs incurred outside the scope of work or in advance of a contract award compared to $0.9 million at September 30, 2018. We believe it is probable that we will recover the costs inventoried at September 30, 2019, plus a profit margin, under contract change orders or awards within the next year. Costs we incur for certain U.S. federal government contracts include general and administrative costs as allowed by government cost accounting standards. The amounts remaining in inventory at September 30, 2019 and 2018 were $0.5 million and $2.0 million, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment | |
Property, Plant and Equipment | NOTE 9—PROPERTY, PLANT AND EQUIPMENT Significant components of property, plant and equipment are as follows (in thousands): September 30, 2019 2018 Land and land improvements $ 7,348 $ 13,132 Buildings and improvements 48,191 57,959 Machinery and other equipment 107,297 81,727 Software 108,526 84,631 Leasehold improvements 17,064 11,991 Construction and internal-use software development in progress 16,814 12,888 Accumulated depreciation and amortization (160,271) (144,782) $ 144,969 $ 117,546 In fiscal 2019, we entered into agreements related to the construction and leasing of two buildings on our existing corporate campus in San Diego, California. Under these agreements, a financial institution will own the buildings, and we will lease the property for a term of five years upon their completion. In the third quarter of fiscal 2019 we sold the land and buildings comprising our separate CTS campus in San Diego. We have entered into a lease with the buyer of this campus and CTS employees will continue to occupy this separate campus until the new buildings on our corporate campus are ready for occupancy in fiscal 2021. In the third quarter of fiscal 2019 we also sold land and buildings in Orlando, Florida and we are entering a lease for new space in Orlando to accommodate our employees and operations in Orlando. In connection with the sale of these real estate campuses we received total net proceeds of $44.9 million and recognized net gains on the sales totaling $32.5 million. 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. Costs incurred in the development of internal-use software and software applications, including external direct costs of materials and services and applicable compensation costs of employees devoted to specific software development, are capitalized as computer software costs. Costs incurred outside of the application development stage, or that are types of costs that do not meet the capitalization requirements, are expensed as incurred. Amounts capitalized are included in property, plant and equipment 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. Through September 30, 2019 we have incurred costs of $138.9 million related to the purchase and development of our ERP system, including $3.1 million, $22.5 million, and $40.6 million of costs incurred during fiscal years 2019, 2018 and 2017, respectively. We have capitalized $1.6 million, $7.5 million, and $16.7 million of qualifying software development costs as internal-use software development in progress during fiscal years 2019, 2018, and 2017, respectively. We have recognized expense for $1.5 million, $15.0 million, and $23.9 million of these costs in fiscal years 2019, 2018, and 2017, respectively, for costs that did not qualify for capitalization. Amounts that were expensed in connection with the development of these systems are classified within selling, general and administrative expenses in the Consolidated Statements of Operations. Various components of our ERP system became ready for their intended use and were placed into service at various times from fiscal 2016 through fiscal 2019. 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 using the straight-line method. We continue to capitalize costs associated with the development of other ERP components that are not yet ready for their intended use. Our provisions for depreciation of plant and equipment and amortization of leasehold improvements and software amounted to $22.6 million, $19.5 million and $17.8 million in 2019, 2018 and 2017, respectively. Generally, we use straight-line methods for depreciable real property over estimated useful lives ranging from 15 to 39 years or for leasehold improvements, the term of the underlying lease if shorter than the estimated useful lives. We typically use accelerated methods (declining balance) for machinery and equipment and software other than our ERP system over estimated useful lives ranging from 5 to 10 years . |
Goodwill and Purchased Intangib
Goodwill and Purchased Intangible Assets | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill and Purchased Intangible Assets | |
Goodwill and Purchased Intangible Assets | NOTE 10—GOODWILL AND PURCHASED INTANGIBLE ASSETS Changes in goodwill for the two years ended September 30, 2019 are as follows (in thousands): Cubic Transportation Cubic Mission Cubic Global Systems Solutions Defense Total Net balances at September 30, 2017 $ 50,870 $ — $ 270,692 $ 321,562 Reassignment on October 1, 2017 — 125,321 (125,321) — Acquisitions (see Note 2) — 13,085 665 13,750 Foreign currency exchange rate changes (1,084) (279) (323) (1,686) Net balances at September 30, 2018 49,786 138,127 145,713 333,626 Reassignment on April 1, 2019 — 3,428 (3,428) — Acquisitions 206,988 40,392 — 247,380 Foreign currency exchange rate changes (2,182) (523) (204) (2,909) Net balances at September 30, 2019 $ 254,592 $ 181,424 $ 142,081 $ 578,097 As described in Note 18, we concluded that CMS became a separate operating segment beginning on October 1, 2017. In conjunction with the changes to reporting units, we reassigned goodwill between CGD and CMS based on their relative fair values on October 1, 2017. In July 2017, we acquired Deltenna, a wireless infrastructure company specializing in the design and delivery of radio and antenna communication solutions. Deltenna’s operations were included in our CGD reporting unit upon its acquisition. On April 1, 2019, we reorganized our reporting structure to include Deltenna in our CMS reporting unit and reassigned $3.4 million of goodwill from CGD to CMS based upon its relative fair value. Since its acquisition, Deltenna’s sales, operating results, and cash flows have not been significant to our consolidated results. As such, reportable segment information has not been restated for this change in the composition of our reportable segments. We complete our annual goodwill impairment test each year as of July 1 separately for our CTS, CGD and CMS reporting units. 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 amount, including recorded goodwill. If the carrying amount 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 amount. Any resulting impairment determined would be recorded in the current period. For our 2019 impairment test, the estimated fair value of all three of our reporting units exceeded their respective carrying amounts. As such, there was no impairment of goodwill in 2019. Significant management judgment is required in the forecast of future operating results that are used in our impairment analysis. The estimates we used are consistent with the plans and estimates that we use to manage our business. Although we believe our underlying assumptions supporting these assessments are reasonable, if our forecasted sales and margin growth rates, timing of growth, or the discount rate vary from our forecasts, we may be required to perform interim analyses in fiscal 2020 that could expose us to material impairment charges in the future. Purchased Intangible Assets: September 30, 2019 September 30, 2018 Gross Gross Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Contract and program intangibles $ 181,903 $ (138,497) $ 43,406 $ 151,965 $ (112,399) $ 39,566 Other purchased intangibles 155,608 (33,401) 122,207 52,851 (18,884) 33,967 Total $ 337,511 $ (171,898) $ 165,613 $ 204,816 $ (131,283) $ 73,533 Total amortization expense for 2019, 2018 and 2017 was $42.1 million, $27.1 million and $30.2 million, respectively. The table below shows our expected amortization of purchased intangibles as of September 30, 2019, for each of the next five years and thereafter (in thousands): Transportation Cubic Mission Systems Solutions Total 2020 $ 17,553 $ 18,884 $ 36,437 2021 16,025 14,429 30,454 2022 15,470 11,304 26,774 2023 10,353 9,151 19,504 2024 9,797 7,179 16,976 Thereafter 21,531 13,937 35,468 $ 90,729 $ 74,884 $ 165,613 |
Financing Arrangements
Financing Arrangements | 12 Months Ended |
Sep. 30, 2019 | |
Financing Arrangements | |
Financing Arrangements | NOTE 11—FINANCING ARRANGEMENTS Long-term debt consists of the following (in thousands): September 30, 2019 2018 Series A senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35% $ 50,000 $ 50,000 Series B senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35% 50,000 50,000 Series C senior unsecured notes payable to a group of insurance companies, interest fixed at 3.70% 25,000 25,000 Series D senior unsecured notes payable to a group of insurance companies, interest fixed at 3.93% 75,000 75,000 200,000 200,000 Less unamortized debt issuance costs (175) (207) Less current portion (10,714) — $ 189,111 $ 199,793 Maturities of long-term debt for each of the five years in the period ending September 30, 2024, are as follows: 2020 — $10.7 million; 2021 — $35.7 million; 2022 — $35.7 million; 2023 — $35.7 million; 2024 — $35.7 million. 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. 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. 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. 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. We have a committed revolving credit agreement with a group of financial institutions in the amount of $800.0 million which is scheduled to expire in April 2024 (Revolving Credit Agreement). Under the terms of the Revolving Credit Agreement, the company may elect that the debts comprising each borrowing bear interest generally at a rate equal to (i) London Interbank Offer Rate (“LIBOR”) based upon tenor plus a margin that fluctuates between 1.00% and 2.00% , as determined by the company’s Leverage Ratio (as defined in the Revolving Credit Agreement) as set forth in the company’s most recently delivered compliance certificate or (ii) the Alternate Base Rate (defined as a rate equal to the highest of (a) the Prime Rate (b) the NYFRB rate plus 0.50% (c) the Adjusted LIBOR Rate plus 1.00% ), plus a margin that fluctuates between 0.00% and 1.00% , as determined by the company’s Leverage Ratio as set forth in its most recently delivered compliance certificate. Interest paid amounted to $16.8 million, $10.0 million and $14.8 million in fiscal 2019, 2018 and 2017, respectively. As of September 30, 2019, we had letters of credit and bank guarantees outstanding totaling $39.9 million, which includes the $31.5 million of letters of credit on the Revolving Credit Agreement described above and $8.4 million of letters of credit issued under other facilities. The total of $39.9 million of letters of credit and bank guarantees includes $34.4 million that guarantees either our performance or customer advances under certain contracts and financial letters of credit of $5.5 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 U.K. in the amount of £20.0 million British pounds (equivalent to approximately $24.6 million) to help meet the short-term working capital requirements of our subsidiary. At September 30, 2019, no amounts were outstanding under this borrowing arrangement. 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 September 30, 2019 was $19.5 million and is classified as restricted cash in our Consolidated Balance Sheets. The terms of certain of our lending and credit agreements include provisions that require and/or limit, among other financial ratios and measurements, the permitted levels of debt, coverage of cash interest expense, and under certain circumstances, payments of dividends or other distributions to shareholders. As of September 30, 2019, these agreements have no restrictions on distributions to shareholders, subject to certain tests in these agreements. In December 2018, we completed an underwritten public offering of 3,795,000 shares of our common stock, including the exercise of the underwriters’ option to purchase additional shares. All shares were offered by us at a price to the public of $60.00 per share. Net proceeds were $215.8 million, after deducting underwriting discounts and commissions and offering expenses of $11.9 million. We used the net proceeds to repay a portion of our outstanding borrowings under the Revolving Credit Agreement which was used to finance the acquisition of Trafficware and for general corporate purposes. 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 accrued compensation and other current liabilities on the balance sheet amounted to $7.4 million and $8.6 million as of September 30, 2019 and 2018, respectively. |
Commitments
Commitments | 12 Months Ended |
Sep. 30, 2019 | |
Commitments | |
Commitments | NOTE 12—COMMITMENTS We lease certain office, manufacturing and warehouse space, vehicles, and other office equipment under non-cancelable operating leases expiring in various years through 2030. These leases, some of which may be renewed for periods up to 10 years, generally require us to pay all maintenance, insurance and property taxes. Several leases are subject to periodic adjustment based on price indices or cost increases. Rental expense (net of sublease income of $0.2 million in 2019, $0.2 million in 2018 and $0.2 million in 2017) for all operating leases amounted to $13.3 million, $11.6 million and $10.5 million in 2019, 2018 and 2017, respectively. Future minimum payments, net of minimum sublease income, under non-cancelable operating leases with initial terms of one year or more consist of the following for the next five years and thereafter, as of September 30, 2019 (in thousands): 2020 $ 18,121 2021 17,218 2022 15,097 2023 13,250 2024 12,311 Thereafter 37,926 $ 113,923 |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Income Taxes | NOTE 13—INCOME TAXES On December 22, 2017, the U.S. government enacted the Tax Act, which 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. Due to the complexity of the Tax Act, the Securities and Exchange Commission 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. These amounts did not change in fiscal year 2019. The SAB 118 measurement period ended on December 22, 2018. Although we no longer consider 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. Income (loss) from continuing operations before income taxes includes the following components (in thousands): Years Ended September 30, 2019 2018 2017 (in thousands) United States $ (535) $ (51,049) $ (70,566) Foreign 52,881 65,935 59,484 Total $ 52,346 $ 14,886 $ (11,082) Significant components of the provision (benefit) for income taxes from continuing operations are as follows: Years Ended September 30, 2019 2018 2017 (in thousands) Current: Federal $ (710) $ (4,775) $ (4,070) State 2,898 976 878 Foreign 10,523 19,882 13,869 Total current 12,711 16,083 10,677 Deferred: Federal (4,553) (7,874) 2,257 State (135) 482 569 Foreign 3,017 (1,598) 1,155 Total deferred (1,671) (8,990) 3,981 Provision for income taxes $ 11,040 $ 7,093 $ 14,658 The reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense is as follows: Years Ended September 30, 2019 2018 2017 (in thousands) Tax expense at U.S. statutory rate $ 10,992 $ 3,124 $ (3,877) State income taxes, net of federal tax effect 1,416 (237) (923) Nondeductible expenses 1,720 1,186 (185) Change in reserve for tax contingencies (1,468) (1,047) (4,435) Change in deferred tax asset valuation allowance (10,007) 8,784 17,374 Foreign rate differential 2,149 5,684 9,912 Tax credits (4,767) (2,656) (3,459) Impact of U.S. Tax Reform — (7,053) — Global Intangible Low-Tax Income 8,182 — — Stock Based Compensation (448) 59 16 Non-controlling interest in equity arrangements 1,802 99 — Other 1,469 (850) 235 Provision for income taxes $ 11,040 $ 7,093 $ 14,658 (1) Significant components of our deferred tax assets and liabilities are as follows: September 30, 2019 2018 (in thousands) Deferred tax assets: Accrued employee benefits $ 11,409 $ 8,285 Allowances for loss contingencies 3,561 3,518 Deferred compensation 3,071 3,272 Intangible assets — 1,361 Inventory valuation 8,036 1,154 Long-term contracts 6,995 7,751 Prepaid and accrued expenses 1,816 1,229 Retirement benefits 4,967 1,398 Tax credit carryforwards 33,118 35,137 Loss carryforwards 36,248 29,097 Other 818 264 Total gross deferred tax assets 110,039 92,466 Valuation allowance (69,098) (81,838) Total deferred tax assets 40,941 10,628 Deferred tax liabilities: Debt obligation basis difference (4,582) — Deferred revenue (12,135) (2,351) Intangible assets (18,592) — Property, plant and equipment (4,524) (5,079) Unremitted earnings (977) (823) Other (587) (351) Total deferred tax liabilities (41,397) (8,604) Net deferred tax asset (liability) $ (456) $ 2,024 The deferred tax assets and liabilities for fiscal 2019 and 2018 include amounts related to various acquisitions. The total change in deferred tax assets and liabilities in fiscal 2019 includes changes that are recorded to other comprehensive income (loss), retained earnings and goodwill. We calculate deferred tax assets and liabilities based on differences between financial reporting and tax bases of assets and liabilities and measure them using the enacted tax rates and laws that we expect will be in effect when the differences reverse. At September 30, 2019, we have federal and state income tax credit carryforwards (in thousands) which begin to expire as follows: U.S. foreign tax credits $ 14,535 2027 U.S. research and development tax credits 14,439 2035 State research and development tax credits 25,748 Do not expire We have federal, state and foreign capital and net operating losses (in thousands) which begin to expire as follows: U.S. net operating loss carryforwards $ 127,013 2033 U.S. capital loss carryforwards 5,451 2023 State loss carryforwards 55,619 2021 State capital loss carryforwards 23,038 2023 Foreign net operating loss carryforwards 13,548 Do not expire During 2015, we evaluated our net U.S. deferred income taxes, which included an assessment of the cumulative income or loss over the prior three-year period and future periods and concluded that a valuation allowance was required. After consideration of our recent history of U.S. losses, we continue to maintain a valuation allowance on net U.S. deferred tax assets as of September 30, 2019. As of September 30, 2019, a total valuation allowance of $69.1 million has been established against U.S. deferred tax assets, certain foreign operating losses and other foreign assets. For fiscal 2019, the valuation allowance decreased by $12.7 million, of which $10.0 million was recorded as a net tax benefit in our Consolidated Statement of Operations, offset by amounts recorded through acquisition accounting and to other components of income. The non-cash charge to increase or decrease a valuation allowance does not have any impact on our cash flows, nor does such an allowance preclude us from using loss carryforwards or other deferred tax assets in the future. Until we re-establish a pattern of continuing profitability, in accordance with the applicable accounting guidance, U.S. income tax expense or benefit related to the recognition of deferred tax assets in the Consolidated Statement of Operations for future periods will be offset by decreases or increases in the valuation allowance with no net effect on the Consolidated Statement of Operations. If sufficient positive evidence arises in the future, any existing valuation allowance could be reversed as appropriate, decreasing income tax expense in the period that such conclusion is reached. Prior to the Tax Act, we provided deferred taxes on all undistributed foreign earnings, as we did not consider these amounts permanently reinvested. Under the transition to a modified territorial tax system, all previously untaxed undistributed foreign earnings are subject to a transition tax charge at reduced rates and future repatriations of foreign earnings will generally be exempt from U.S. tax. We will continue to provide applicable deferred taxes based on the tax liability or withholding taxes that would be due upon repatriation of the undistributed foreign earnings. As of September 30, 2019, we have recorded a deferred tax liability of $1.0 million related to future taxes on our unremitted foreign earnings. Accounting for Uncertainty in Income Taxes During fiscal 2019 and 2018, the aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows: September 30, 2019 2018 (in thousands) Balance at beginning of year $ 9,942 $ 13,248 Additions (reductions) for tax positions taken in prior years 8,458 (80) Recognition of benefits from expiration of statutes (776) (1,770) Additions for tax positions related to the current year 951 713 Reductions for tax positions related to acquisitions — (2,169) Balance at end of year $ 18,575 $ 9,942 At September 30, 2019 and 2018, the amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate was $0.7 million and $1.8 million, respectively. During fiscal year 2020, it is reasonably possible that resolution of reviews by taxing authorities, both domestic and foreign, could be reached with respect to an immaterial amount of net unrecognized tax benefits depending on the timing of examinations or expiration of statutes of limitations, either because our tax positions are sustained or because we agree to the disallowance and pay the related income tax. We recognize interest and/or penalties related to income tax matters in income tax expense. The amount of net interest and penalties recognized as a component of income tax expense during fiscal 2019 and 2018 were not material. We are subject to ongoing audits from various taxing authorities in the jurisdictions in which we do business. As of September 30, 2019, the fiscal years open under the statute of limitations in significant jurisdictions include 2016 through 2019 in the U.S. We believe we have adequately provided for uncertain tax issues we have not yet resolved with federal, state and foreign tax authorities. Although not more likely than not, the most adverse resolution of these issues could result in additional charges to earnings in future periods. Based upon a consideration of all relevant facts and circumstances, we do not believe the ultimate resolution of uncertain tax issues for all open tax periods will have a material adverse effect upon our financial condition or results of operations. Cash amounts paid for income taxes, net of refunds received, were $28.7 million, $15.7 million and $1.6 million in 2019, 2018 and 2017, respectively. |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | 12 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities | |
Derivative Instruments and Hedging Activities | NOTE 14—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 five 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 Consolidated Statements of Cash Flows in the same category as the item being hedged. The following table shows the notional principal amounts of our outstanding derivative instruments as of September 30, 2019 and 2018 (in thousands): Notional Principal September 30, 2019 September 30, 2018 Instruments designated as accounting hedges: Foreign currency forwards $ 143,164 $ 169,406 Interest rate swaps 95,000 — Instruments not designated as accounting hedges: Foreign currency forwards $ 24,220 $ 27,909 Included in the amounts not designated as accounting hedges at September 30, 2019 and 2018 were foreign currency forwards with notional principal amounts of $14.0 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 gains of $0.0 million and $0.2 million were recognized in other income (expense), net for the fiscal years ended September 30, 2019 and 2018, respectively, related to foreign currency forward contracts not designated as accounting hedges. During fiscal 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 financial institution will own the buildings, and we will lease the property for a term of five years upon their completion. In conjunction with these agreements, we entered into pay-variable/receive-fixed interest rate swaps with a group of financial institutions to mitigate variable interest rate risk associated with these future lease obligations. The interest rate swaps contain forward starting notional principal amounts which align with our expected lease payments. These interest rate swaps were designated as effective cash flow hedges at September 30, 2019, and as such, unrealized gains/losses are included in accumulated other comprehensive income (loss). Unrealized gains as a result of changes in the fair value of the interest rate swaps were $0.2 million for the year ended September 30, 2019. 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 fiscal years ended September 30, 2019 and 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 September 30, 2019 or 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 Consolidated Balance Sheets (in thousands): Fair Value Balance Sheet Location September 30, 2019 September 30, 2018 Asset derivatives: Foreign currency forwards Other current assets $ 2,635 $ 1,803 Foreign currency forwards Other assets 619 314 Forward starting swap Other assets 240 — $ 3,494 $ 2,117 Liability derivatives: Foreign currency forwards Other current liabilities $ 529 $ 1,657 Foreign currency forwards Other noncurrent liabilities 228 75 Total $ 757 $ 1,732 The tables below present gains and losses recognized in other comprehensive income (loss) related to derivative financial instruments designated as cash flow hedges, as well as the amount of gains and losses reclassified into earnings (in thousands): September 30, 2019 September 30, 2018 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 $ 4,344 $ 1,945 $ (45) $ (1,239) 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 years ended September 30, 2019 or 2018. 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 $1.5 million, net of income taxes. |
Pension, Profit Sharing and Oth
Pension, Profit Sharing and Other Benefit Plans | 12 Months Ended |
Sep. 30, 2019 | |
Pension Plans | |
Pension, Profit Sharing and Other Benefit Plans | NOTE 15—PENSION, PROFIT SHARING AND OTHER BENEFIT PLANS 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 noncurrent liabilities in our Consolidated Balance Sheets and totaled $11.0 million and $11.5 million at September 30, 2019 and 2018, respectively. In the past 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 value of the assets set aside to fund deferred compensation liabilities as of September 30, 2019 and 2018 were $6.6 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 Consolidated Statements of Operations. Defined Contribution Plans We have profit sharing and other defined contribution retirement plans that provide benefits for most U.S. employees. Certain of these plans require us to match a portion of eligible employee contributions up to specified limits. These plans also allow for additional company contributions at the discretion of the Board of Directors. We also have a defined contribution plan for European employees that were formerly eligible for the European defined benefit plan described below. Under this plan, we match a portion of the eligible employee contributions up to limits specified in the plan. Company contributions to defined contribution plans aggregated $19.4 million, $16.8 million and $16.8 million in 2019, 2018 and 2017, respectively. Employee Stock Purchase Plan We sponsor a noncompensatory Employee Stock Purchase Plan, which allows eligible employees to purchase common stock of the Company at a discount rate of 5% of the market price per share on the last trading day of the offering period. Annual employee contributions are limited to $25,000, are voluntary, and made through a bi-weekly payroll deduction. Defined Benefit Pension Plans Certain employees in the U.S. are covered by a noncontributory defined benefit pension plan for which benefits were frozen as of December 31, 2006 (curtailment). The effect of the U.S. plan curtailment is that no new benefits have been accrued after that date. Approximately one-half of our European employees are covered by a contributory defined benefit pension plan for which benefits were frozen as of September 30, 2010. Although the effect of the European plan curtailment is that no new benefits will accrue after September 30, 2010, the plan is a final pay plan, which means that benefits will be adjusted for increases in the salaries of participants until their retirement or departure from the company. The European plan was amended in 2014 to reduce the amount of participant compensation used in computing the pension liability for certain participants. U.S. and European employees hired subsequent to the dates of the curtailment of the respective plans are not eligible for participation in the defined benefit plans. Our funding policy for the defined benefit pension plans provides that contributions will be at least equal to the minimum amounts mandated by statutory requirements. Based on our known requirements for the U.S. and European plans, as of September 30, 2019, we expect to make contributions of approximately $6.1 million in 2020. September 30 is used as the measurement date for these plans. Changes in actuarial assumptions of our defined benefit pension plans are recorded in accumulated other comprehensive income (loss). The unrecognized amounts recorded in accumulated other comprehensive income (loss) will be subsequently recognized as net periodic pension cost, consistent with our historical accounting policy for amortizing those amounts. The unrecognized actuarial gain or loss included in accumulated other comprehensive income (loss) at September 30, 2019 and expected to be recognized in net pension cost during fiscal 2020 is a loss of $4.0 million ($3.2 million net of income tax). The unrecognized actuarial loss incurred in fiscal year 2019 was $32.1 million, which was primarily driven by a decrease in discount rates used in the calculation of the net benefit obligation. No plan assets are expected to be returned to us in fiscal 2020. The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the defined benefit pension plans were as follows (in thousands): September 30, 2019 2018 Projected benefit obligation $ 246,697 $ 222,332 Accumulated benefit obligation 246,697 222,332 Fair value of plan assets 221,311 214,530 The following table sets forth changes in the projected benefit obligation and fair value of plan assets and the funded status for these defined benefit plans (in thousands): September 30, 2019 2018 Change in benefit obligations: Net benefit obligation at the beginning of the year $ 222,332 $ 235,097 Service cost 590 606 Interest cost 7,617 7,529 Actuarial (gain) loss 32,067 (9,449) Gross benefits paid (8,141) (8,034) Foreign currency exchange rate changes (7,768) (3,417) Net benefit obligation at the end of the year 246,697 222,332 Change in plan assets: Fair value of plan assets at the beginning of the year 214,530 209,722 Actual return on plan assets 17,794 11,998 Employer contributions 4,842 5,117 Gross benefits paid (8,141) (8,034) PBGC Premium paid (177) (286) Administrative expenses (541) (698) Foreign currency exchange rate changes (6,996) (3,289) Fair value of plan assets at the end of the year 221,311 214,530 Unfunded status of the plans (25,386) (7,802) Unrecognized net actuarial loss 70,095 48,081 Net amount recognized $ 44,709 $ 40,279 Amounts recognized in Accumulated OCI Liability adjustment to OCI $ (70,095) $ (48,081) Deferred tax asset 11,667 7,365 Valuation allowance on deferred tax asset (1,172) 610 Accumulated other comprehensive loss $ (59,600) $ (40,106) The components of net periodic pension cost (benefit) were as follows (in thousands): Years Ended September 30, 2019 2018 2017 Service cost $ 590 $ 606 $ 617 Interest cost 7,617 7,529 7,091 Expected return on plan assets (11,990) (14,120) (12,928) Amortization of actuarial loss 2,098 2,777 3,700 Administrative expenses 348 438 474 Net pension benefit $ (1,337) $ (2,770) $ (1,046) Years Ended September 30, 2019 2018 2017 Weighted-average assumptions used to determine benefit obligation at September 30: Discount rate 2.5% 3.6% 3.3% Rate of compensation increase 3.1% 3.3% 3.2% Weighted-average assumptions used to determine net periodic benefit cost for the years ended September 30: Discount rate 3.6% 3.3% 3.0% Expected return on plan assets 5.7% 6.8% 6.8% Rate of compensation increase 3.3% 3.2% 3.1% The long-term rate of return assumption represents the expected average rate of earnings on the funds invested or to be invested to provide for the benefits included in the benefit obligations. That assumption is determined based on a number of factors, including historical market index returns, the anticipated long-term asset allocation of the plans, historical plan return data, plan expenses, and the potential to outperform market index returns. We have the responsibility to formulate the investment policies and strategies for the plans’ assets. Our overall policies and strategies include: maintain the highest possible return commensurate with the level of assumed risk, and preserve benefit security for the plans’ participants. We do not direct the day-to-day operations and selection process of individual securities and investments and, accordingly, we have retained the professional services of investment management organizations to fulfill those tasks. The investment management organizations have investment discretion over the assets placed under their management. We provide each investment manager with specific investment guidelines by asset class. The target ranges for each major category of the plans’ assets at September 30, 2019 are as follows: Allocation Asset Category Range Equity securities 20% to 55% Debt securities 25% to 75% Cash 0% to 55% Real estate 0% to 10% Our defined benefit pension plans invest in cash and cash equivalents, equity securities, fixed income securities, pooled separate accounts and common collective trusts. Our plans also invest in diversified growth funds that hold underlying investments in equities, fixed-income securities, commodities, and real estate. The following table presents the fair value of the assets of our defined benefit pension plans by asset category and their level within the fair value hierarchy (in thousands). See Note 5 for a description of each level within the fair value hierarchy. All assets measured at the net asset value (NAV) practical expedient in the table below are invested in pooled separate accounts or common collective trusts which do not have publicly quoted prices. The fair value of the pooled separate accounts and common collective trusts are determined based on the NAV of the underlying investments. The fair value of the underlying investments held by the pooled separate accounts and common collective trusts, other than real estate investments, is generally based upon quoted prices in active markets. The fair value of the underlying investments comprised of real estate properties is determined through an appraisal process which uses valuation methodologies including comparisons to similar real estate and discounting of income streams. September 30, 2019 September 30, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Plan assets held at fair value: Cash equivalents $ 2,908 $ — $ — $ 2,908 $ 19,314 $ — $ — $ 19,314 Plan assets held at net asset value practical expedient*: Equity Funds 100,302 107,424 Fixed Income Funds 105,651 73,533 Diversified Growth Funds 8,886 14,259 Real Estate Funds 3,564 — Total assets held at net asset value practical expedient: $ 218,403 $ 195,216 Total Plan Assets $ 221,311 $ 214,530 * Plan assets measured at fair value using NAV (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. The pension plans held no direct positions in Cubic Corporation common stock as of September 30, 2019 and 2018. We expect to pay the following pension benefit payments (in thousands): 2020 $ 9,067 2021 9,140 2022 9,306 2023 9,324 2024 9,693 2024-2028 52,750 |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity | |
Stockholders' Equity | NOTE 16—STOCKHOLDERS’ EQUITY Long-Term Equity Incentive Plan Under our long-term equity incentive program we have provided participants with three general categories of grant awards: RSUs with time-based vesting, RSUs with performance-based vesting, and RSUs with performance and market-based vesting. 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 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 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 which contained both 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 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 would result in a reduction of up to 25% of these RSUs vesting at the end of the performance period. During fiscal 2019, the Compensation Committee amended the long-term equity incentive program to provide accelerated vesting for retirement age participants. Under this amendment, participants who are 60 years of age, and whose age plus years of service equals or exceeds 70 are eligible for accelerated vesting of their RSUs. Participants who have reached the retirement age criteria must generally provide a one-year notice of retirement to the Company. For participants who have reached the retirement age criteria, expense is recognized over the adjusted service 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 during fiscal 2019: RSUs granted during the year ended September 30, 2019 Date of grant November 21, 2018 April 1, 2019 Grant date fair value $67.40 $59.29 Performance period begins November 21, 2018 April 1, 2019 Performance period ends September 30, 2021 September 30, 2021 Risk-free interest rate 2.8% 2.8% Expected volatility 34% 34% At September 30, 2019, 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 366,913 RSUs with time-based vesting, 112,942 RSUs with performance-based vesting, and 174,105 RSUs with performance and market-based vesting. The following table summarizes our RSU activity: Unvested Restricted Stock Units with Service-Based Vesting Weighted Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2017 366,331 $ 45.99 Granted 165,271 61.06 Vested (147,832) 46.86 Forfeited (17,310) 48.62 Unvested at September 30, 2018 366,460 $ 52.31 Granted 239,874 63.25 Vested (145,409) 50.76 Forfeited (38,831) 54.67 Unvested at September 30, 2019 422,094 $ 58.84 Unvested Restricted Stock Units with Performance-Based Vesting Weighted Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2017 678,856 $ 46.59 Granted 179,162 61.40 Vested — — Forfeited (222,390) 48.46 Unvested at September 30, 2018 635,628 $ 50.11 Granted — — Vested — — Forfeited (320,366) 44.63 Unvested at September 30, 2019 315,262 $ 55.67 Unvested Restricted Stock Units with Performance and Market-Based Vesting Weighted Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2017 — $ — Granted — — Vested — — Forfeited — — Unvested at September 30, 2018 — $ — Granted 237,616 66.79 Vested — — Forfeited (10,214) 67.40 Unvested at September 30, 2019 227,402 $ 66.77 As of September 30, 2019, approximately 1,637,274 shares remained available for future grants under our long-term equity incentive plan. On October 1, 2019, 148,995 RSUs vested. We recorded non-cash compensation expense related to stock-based awards as follows (in thousands): Years Ended September 30, 2019 2018 2017 Cost of sales $ 1,766 $ 1,096 $ 338 Selling, general and administrative 13,722 6,419 4,674 $ 15,488 $ 7,515 $ 5,012 As of September 30, 2019, there was $39.7 million of unrecognized compensation expense 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 $40.0 million, which is expected to be recognized over a weighted-average period of 1.7 years and includes the RSUs that vested on October 1, 2019. 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 September 30, 2019. To the extent the actual forfeiture rate is different from what we have estimated, compensation expense related to these awards will be different from our expectations. |
Legal Matters
Legal Matters | 12 Months Ended |
Sep. 30, 2019 | |
Legal Matters | |
Legal Matters | NOTE 17—LEGAL MATTERS In August 2019, a transit authority asserted loss of revenue due to alleged accidental undercharging of their customers for specific transactions by a fare system which we operate for them and has requested a corresponding recoupment from us. Based upon our investigation into this matter, we believe this matter will not have a materially adverse effect on our financial position, results of operations, or cash flows. No liability for this claim has been recorded as of September 30, 2019. We consider all other current 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. |
Business Segment Information
Business Segment Information | 12 Months Ended |
Sep. 30, 2019 | |
Business Segment Information | |
Business Segment Information | NOTE 18—BUSINESS 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. Through September 30, 2017, our company was aligned in our CGD and CTS operating segments, which were also our reportable segments. In 2016, we formalized the structure of our CMS business unit within our CGD operating segment. CMS combines and integrates our C4ISR and secure communications operations. Through September 30, 2017, we concluded that CMS was not a separate operating segment based upon factors including the nature of information presented to our chief executive officer and Board of Directors and the consequential level at which certain resource allocations and performance assessments were made. In the first quarter of fiscal 2018, we began providing additional financial information to our chief executive officer and Board of Directors at the CMS level, which allowed greater resource allocation decisions and performance assessments to be made at that level. As such, we concluded that CMS became a separate operating segment beginning on October 1, 2017. Applicable prior period amounts have been adjusted retrospectively to reflect the reportable segment change. 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): Years Ended September 30, 2019 2018 2017 Sales: Cubic Transportation Systems $ 849.8 $ 670.7 $ 578.6 Cubic Mission Solutions 328.8 207.0 168.9 Cubic Global Defense 317.9 325.2 360.2 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Operating income (loss): Cubic Transportation Systems $ 77.2 $ 60.4 $ 39.8 Cubic Mission Solutions 7.8 (0.1) (9.3) Cubic Global Defense 23.0 16.6 28.1 Unallocated corporate expenses (21.8) (52.5) (56.0) Total operating income $ 86.2 $ 24.4 $ 2.6 Assets: Cubic Transportation Systems $ 825.8 $ 390.2 $ 335.1 Cubic Mission Solutions 437.9 352.9 390.5 Cubic Global Defense 394.2 360.1 280.1 Corporate 189.3 201.7 156.4 Discontinued Operations — — 174.2 Total assets $ 1,847.2 $ 1,304.9 $ 1,336.3 Depreciation and amortization: Cubic Transportation Systems $ 30.7 $ 12.0 $ 8.8 Cubic Mission Solutions 23.3 22.4 23.8 Cubic Global Defense 6.8 8.5 10.4 Corporate 3.9 3.7 5.0 Total depreciation and amortization $ 64.7 $ 46.6 $ 48.0 Capital expenditures: Cubic Transportation Systems $ 6.6 $ 3.2 $ 6.9 Cubic Mission Solutions 11.1 2.1 1.7 Cubic Global Defense 4.5 9.4 5.9 Corporate 26.9 17.0 22.4 Total expenditures for long-lived assets $ 49.1 $ 31.7 $ 36.9 Years ended September 30, 2019 2018 2017 Long-lived assets, net: United States $ 128.4 $ 106.7 $ 100.6 United Kingdom 5.9 5.7 11.7 Other foreign countries 10.7 12.0 7.3 Total long-lived assets, net $ 145.0 $ 124.4 $ 119.6 CGD and CMS segment sales include $468.8 million, $365.8 million and $327.8 million in 2019, 2018 and 2017, respectively, of sales to U.S. government agencies. CTS segment sales include $158.5 million and $147.3 million in 2018 and 2017, respectively, of sales under various contracts with our customer, Transport for London. No other customer accounts for 10% or more of our revenues for any periods presented. Disaggregation of Total Net Sales : Sales by Geographic Region Years Ended September 30, 2019 2018 2017 United States $ 956.6 $ 627.8 $ 522.8 United Kingdom 218.2 240.7 219.4 Australia 163.5 166.7 175.6 Far East/Middle East 74.0 86.4 112.7 Other 84.2 81.3 77.2 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Sales by End Customer: Years Ended September 30, 2019 2018 2017 U.S. Federal Government and State and Local Municipalities $ 938.8 $ 639.5 $ 522.6 Other 557.7 563.4 585.1 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Sales by Contract Type: On a fixed-price type contract, we agree to perform the contractual statement of work for a predetermined sales price. On a cost-plus type contract, we are 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): Years Ended September 30, 2019 2018 2017 Fixed Price $ 1,452.4 $ 1,146.2 $ 1,036.9 Other 44.1 56.7 70.8 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Sales by Deliverable Type: Years Ended September 30, 2019 2018 2017 Product $ 1,011.1 $ 704.9 $ 681.6 Service 485.4 498.0 426.1 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Revenue Recognition Method: September 30, 2019 Point in Time $ 347.4 Over Time 1,149.1 Total sales $ 1,496.5 |
Restructuring
Restructuring | 12 Months Ended |
Sep. 30, 2019 | |
Restructuring | |
Restructuring | NOTE 19—RESTRUCTURING In 2019, we initiated projects to restructure and modify our supply chain strategy, functional responsibilities, methods, capabilities, processes and rationalize suppliers with the goal of reducing ongoing costs and increasing the efficiencies of our worldwide procurement organization. The majority of the costs associated with these restructuring activities are related to consultants that we have engaged in connection with these efforts, and such costs have been recognized by our corporate entity. The total costs of this restructuring project are expected to exceed amounts incurred to date by $0.9 million and these efforts are expected to be completed early in fiscal 2020. Also, in fiscal 2019 our CTS and CGD segments incurred restructuring charges, consisting primarily of employee severance costs related to headcount reductions initiated to optimize our cost positions. The total costs of each of these restructuring plans initiated thus far are not expected to be significantly greater than the charges incurred to date. Our fiscal 2018 restructuring activities related primarily to expenses incurred by our corporate entity to establish a North American shared services center. Our fiscal 2017 restructuring activities included corporate efforts to increase the centralization and efficiency of our manufacturing processes, as well as restructuring charges incurred by our CGD businesses related to the elimination of a level of management in the CGD simulator business. Restructuring charges incurred by our business segments were as follows (in millions): Years Ended September 30, 2019 2018 2017 Restructuring costs: Cubic Transportation Systems $ 3.2 $ 0.4 $ 0.4 Cubic Mission Solutions — 0.2 — Cubic Global Defense 3.3 1.3 0.9 Unallocated corporate expenses 8.9 3.1 1.0 Total restructuring costs $ 15.4 $ 5.0 $ 2.3 The following table presents a rollforward of our restructuring liability as of September 30, 2019, which is included within accrued compensation and other current liabilities within our Consolidated Balance Sheet, (in millions): Restructuring Liability Restructuring Liability Employee Separation and other Consulting Costs Balance as of October 1, 2017 $ 1.0 $ — Accrued costs 4.2 0.8 Cash payments (4.6) (0.5) Balance as of September 30, 2018 $ 0.6 $ 0.3 Accrued costs 7.5 7.9 Cash payments (6.1) (7.4) Balance as of September 30, 2019 $ 2.0 $ 0.8 Certain restructuring costs are based upon estimates. Actual amounts paid may ultimately differ from these estimates. If additional costs are incurred or recognized amounts exceed costs, such changes in estimates will be recognized when incurred. |
Summary of Quarterly Results of
Summary of Quarterly Results of Operations (Unaudited) | 12 Months Ended |
Sep. 30, 2019 | |
Summary of Quarterly Results of Operations (Unaudited) | |
Summary of Quarterly Results of Operations (Unaudited) | NOTE 20—SUMMARY OF QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) The following is a summary of our quarterly results of operations for the fiscal years ended September 30, 2019 and 2018: Year Three Months Ended Ended Fiscal 2019 September 30 June 30 March 31 December 31 September 30 (in thousands, except per share data) Net sales $ 471,198 $ 382,679 $ 337,339 $ 305,259 $ 1,496,475 Operating income (loss) 58,619 34,725 (6,541) (566) 86,237 Net income (loss) 41,763 23,910 (9,392) (6,587) 49,694 Net income (loss) per share, basic 1.39 0.77 (0.30) (0.23) 1.63 Net income (loss) per share, diluted 1.38 0.77 (0.30) (0.23) 1.62 Year Three Months Ended Ended Fiscal 2018 September 30 June 30 March 31 December 31 September 30 (in thousands, except per share data) Net sales $ 379,709 $ 296,212 $ 278,586 $ 248,391 $ 1,202,898 Operating income (loss) 27,673 10,290 (1,679) (11,902) 24,382 Net income (loss) 17,816 6,291 (2,011) (9,786) 12,310 Net income (loss) per share, basic 0.65 0.23 (0.07) (0.36) 0.45 Net income (loss) per share, diluted 0.65 0.23 (0.07) (0.36) 0.45 The following table summarizes the aggregate impact of net changes in contract estimates (amounts in thousands, except per share data): Three Months Ended September 30, 2019 2018 Operating income (loss) $ (1,420) $ (4,162) Net income (loss) from continuing operations (1,615) (3,149) Diluted earnings per share (0.05) (0.12) |
Summary of Significant Accoun_2
Summary of Significant Accounting Polices (Policies) | 12 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Polices | |
Organization and Nature of the Business | Organization and Nature of the Business: Through September 30, 2017 our principal lines of business were transportation systems and services, defense systems, and defense services. On May 31, 2018, we sold the Cubic Global Defense Services (CGD Services) business. In March 2018, all of the criteria were met for the classification of CGD Services as a discontinued operation. As a result, the operating results, assets, liabilities, and cash flows of CGD Services have been classified as discontinued operations and have been excluded from amounts described below. In addition, we concluded that Cubic Mission Solutions became a separate operating and reportable segment beginning on October 1, 2017. As a result, we now operate in three reportable business segments: Cubic Transportation Systems (CTS), Cubic Global Defense Systems (CGD), and Cubic Mission Solutions (CMS). Refer to “Note 3 – Acquisitions and Divestitures” for additional information about the sale of CGD Services and the related discontinued operation classification and “Note 18 – Business Segment Information” for additional information on the separate disclosure of operating and reportable segment information for CMS. |
Principles of Consolidation | Principles of Consolidation: |
Foreign Currency Transactions and Translation | Foreign Currency Transactions and Translation Transactions denominated in currencies other than our own subsidiaries’ functional currencies are recorded based on exchange rates at the time such transactions arise. Changes in exchange rates with respect to amounts recorded in our Consolidated Balance Sheets related to such transactions result in transaction gains and losses that are reflected in our Consolidated Statements of Operations as a component of other income (expense). Total transaction gains and losses, which are related primarily to advances to foreign subsidiaries and advances between foreign subsidiaries amounted to a gain of $0.7 million in 2019, a loss of $2.2 million in 2018, and a gain of $0.7 million in 2017. |
Use of Estimates | Use of Estimates: |
Revenue Recognition | Revenue Recognition: Revenue from Contracts with Customers 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. In accordance with the modified retrospective transition method, our Consolidated Statement of Operations for the year ended September 30, 2019 and our Consolidated Balance Sheet as of September 30, 2019 are presented under ASC 606, while our Consolidated Statement of Operations for the years ended September 30, 2018 and 2017 and our Consolidated Balance Sheet as of September 30, 2018 are presented under ASC 605, Revenue Recognition 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 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, international government customers, and international local municipal transit agencies. We classify sales as products or services in our Consolidated Statements of Operations 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 allocate the transaction price to the performance obligations based upon their relative standalone selling prices. For such contracts 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. A number of 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. 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. 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 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. 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 design and build type contracts 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 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 received 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 audits 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). Years Ended September 30, 2019 2018 2017 Operating income (loss) $ (2,235) $ (6,986) $ 5,737 Net income (loss) from continuing operations (2,351) (5,146) 3,208 Diluted earnings per share (0.08) (0.19) 0.12 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 is comprised of 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 September 30, 2019, our ending backlog was $3.401 billion. We expect to recognize approximately 30% of our September 30, 2019 backlog over the next 12 months and approximately 45% over the next 24 months as revenue, with the remainder recognized thereafter. Disaggregation of Revenue |
Cash Equivalents | Cash Equivalents |
Restricted Cash | Restricted Cash: |
Accounts Receivable | Accounts Receivable: |
Contract Assets | Contract Assets: |
Inventories | Inventories: |
Long-term capitalized contract costs | Long-term capitalized contract costs: |
Property, Plant and Equipment | Property, Plant and Equipment: methods for depreciable real property over estimated useful lives or the term of the underlying lease, if shorter than the estimated useful lives, for leasehold improvements. We use accelerated methods (declining balance and sum-of-the-years-digits) for machinery and equipment over their estimated useful lives. Certain costs incurred in the development of internal-use software and software applications, including external direct costs of materials and services and applicable compensation costs of employees devoted to specific software development, are capitalized as computer software costs. Costs incurred outside of the application development stage are expensed as incurred. The amounts capitalized are included in property, plant and equipment and are depreciated on a straight-line basis over the estimated useful life of the software, which ranges from three to seven years. No depreciation expense is recorded until the software is ready for its intended use. |
Goodwill and Purchased Intangibles | Goodwill and Purchased Intangibles: |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets: |
Recognizing assets acquired and liabilities assumed in a business combination | Recognizing assets acquired and liabilities assumed in a business combination: |
Contract Liabilities | Contract Liabilities |
Contingencies | Contingencies: similar or related cases or proceedings. We may increase or decrease our legal reserves in the future, on a matter-by-matter basis, to account for developments in such matters. |
Derivative Financial Instruments | Derivative Financial Instruments: |
Defined Benefit Pension Plans | Defined Benefit Pension Plans: |
Comprehensive Income (Loss) | Comprehensive Income (Loss): |
Research and Development (R&D) | Research and Development (R&D): |
Stock-Based Compensation | Stock-Based Compensation: |
Income Taxes | Income Taxes |
Net Income (Loss) Per Share | Net Income (Loss) Per Share: 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 RSUs. Dilutive RSUs 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. For RSUs with performance and market-based vesting, no common equivalent shares are included in the computation of diluted EPS until the performance criteria have been met, and once the criteria are met the dilutive restricted stock units are calculated using the treasury stock method, modified by the multiplier that is calculated at the end of the accounting period as if the vesting date was at the end of the accounting period. The multiplier on RSUs with performance and market-based vesting is further described in Note 16. 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 income (loss) per common share were as follows (in thousands): Years Ended September 30, 2019 2018 2017 Weighted average shares - basic 30,495 27,229 27,106 Effect of dilutive securities 111 122 — Weighted average shares - diluted 30,606 27,351 27,106 Number of anti-dilutive securities — — 967 |
Recent Accounting Pronouncements | Recent Accounting Pronouncements: Recently Adopted Accounting Pronouncements 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 Staff Accounting Bulletin (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. The SAB 118 measurement period subsequently ended on December 22, 2018. Although we no longer consider 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. In November 2016, the Financial Accounting Standards Board (FASB) issued ASU 2016-18, Restricted Cash Recent Accounting Pronouncements – Not Yet Adopted In February 2016, the FASB issued ASU 2016-02, Leases 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 and 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 expect to elect the practical expedients which provide that entities need not reassess whether existing contracts contain a lease, lease classification of existing leases, or the treatment of initial direct costs on existing leases. We are substantially complete with our review of lease contracts, evaluating other contracts for potentially embedded leases, implementing a new lease accounting and administration software solution, and establishing new processes and internal controls. Upon adoption, we expect to record a right of use asset of approximately $80 million and a lease liability of approximately $88 million. We do not expect material changes to the recognition of lease expense in our consolidated statements of income. In August 2017, the FASB issued ASU 2017-12, Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment. In August 2018, the FASB issued ASU 2018-13 , Fair Value Measurement - Disclosure Framework (Topic 820) In August 2018, the FASB issued ASU 2018-14, Defined Benefit Plan - Disclosure Framework (Topic 715) |
Summary of Significant Accoun_3
Summary of Significant Accounting Polices (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Schedule of computation of basic and diluted EPS | The weighted-average number of shares outstanding used to compute net income (loss) per common share were as follows (in thousands): Years Ended September 30, 2019 2018 2017 Weighted average shares - basic 30,495 27,229 27,106 Effect of dilutive securities 111 122 — Weighted average shares - diluted 30,606 27,351 27,106 Number of anti-dilutive securities — — 967 |
ASU 2014-09 | |
Schedule of aggregate impact of net changes in contract estimates | Years Ended September 30, 2019 2018 2017 Operating income (loss) $ (2,235) $ (6,986) $ 5,737 Net income (loss) from continuing operations (2,351) (5,146) 3,208 Diluted earnings per share (0.08) (0.19) 0.12 |
Implementation of the New Rev_2
Implementation of the New Revenue Recognition Standard (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
ASU 2014-09 | |
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 Consolidated Balance Sheet as of October 1, 2018 due to the adoption of ASC 606 (in thousands): September 30, Adjustments October 1, 2018 2018 Due to As Adjusted Under ASC 605 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 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 liabilities — 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 Accrued pension liability 7,802 — 7,802 Deferred compensation 11,476 — 11,476 Income taxes payable 2,406 — 2,406 Deferred income taxes 2,689 — 2,689 Other noncurrent liabilities 19,113 — 19,113 Other noncurrent 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 our Consolidated Statement of Operations for the twelve months ended September 30, 2019 (in thousands, except per share data): Twelve months ended September 30, 2019 As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 Net sales: Products $ 902,913 $ 108,156 $ 1,011,069 Services 484,363 1,043 485,406 1,387,276 109,199 1,496,475 Costs and expenses: Products 638,621 93,516 732,137 Services 332,923 — 332,923 Selling, general and administrative expenses 269,266 798 270,064 Research and development 50,132 — 50,132 Amortization of purchased intangibles 42,106 — 42,106 Gain on sale of fixed assets (32,510) — (32,510) Restructuring costs 15,386 — 15,386 1,315,924 94,314 1,410,238 Operating income 71,352 14,885 86,237 Other income (expenses): Interest and dividend income 394 6,125 6,519 Interest expense (20,453) — (20,453) Other income (expense), net (19,957) — (19,957) Income from continuing operations before income taxes 31,336 21,010 52,346 Income tax provision (benefit) 11,059 (19) 11,040 Income from continuing operations 20,277 21,029 41,306 Net loss from discontinued operations (1,423) — (1,423) Net income 18,854 21,029 39,883 Less noncontrolling interest in loss of VIE (22,076) 12,265 (9,811) Net income attributable to Cubic $ 40,930 $ 8,764 $ 49,694 Amounts attributable to Cubic: Net income from continuing operations 42,353 8,764 51,117 Net loss from discontinued operations (1,423) — (1,423) Net income attributable to Cubic $ 40,930 $ 8,764 $ 49,694 Net income per share: Basic earnings per share attributable to Cubic $ 1.34 $ 0.29 $ 1.63 Diluted earnings per share attributable to Cubic $ 1.34 $ 0.29 $ 1.62 The table below quantifies the impact of adopting ASC 606 on segment net sales and operating income (loss) for the twelve months ended September 30, 2019 (in thousands): Twelve months ended September 30, 2019 As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 Sales: Cubic Transportation Systems $ 787,936 $ 61,843 $ 849,779 Cubic Mission Solutions 327,139 1,632 328,771 Cubic Global Defense 272,201 45,724 317,925 Total sales $ 1,387,276 $ 109,199 $ 1,496,475 Operating income: Cubic Transportation Systems $ 65,974 $ 11,259 $ 77,233 Cubic Mission Solutions 7,244 515 7,759 Cubic Global Defense 19,858 3,111 22,969 Unallocated corporate expenses (21,724) — (21,724) Total operating income $ 71,352 $ 14,885 $ 86,237 The table below presents how the impact of the adoption of ASC 606 affected certain line items on our Consolidated Balance Sheet at September 30, 2019 (in thousands): As Reported Under Effect of Under ASC 605 ASC 606 ASC 606 ASSETS Current assets: Cash and cash equivalents $ 65,800 $ — $ 65,800 Cash in consolidated VIE 347 — 347 Restricted cash 19,507 — 19,507 Restricted cash in consolidated VIE 9,967 — 9,967 Accounts receivable, net 399,639 (273,625) 126,014 Contract assets — 349,559 349,559 Recoverable income taxes 6,725 1,029 7,754 Inventories 158,713 (51,919) 106,794 Assets held for sale — — — Other current assets 38,534 — 38,534 Other current assets in consolidated VIE 33 — 33 Total current assets 699,265 25,044 724,309 Long-term contracts receivables 3,077 (3,077) — Long-term contracts financing receivables — 36,285 36,285 Long-term contracts financing receivables in consolidated VIE — 115,508 115,508 Long-term capitalized contract costs 136,804 (136,804) — Long-term capitalized contract costs in consolidated VIE 2,545 (2,545) — Property, plant and equipment, net 144,969 — 144,969 Deferred income taxes 4,098 — 4,098 Goodwill 578,097 — 578,097 Purchased intangibles, net 165,613 — 165,613 Other assets 76,872 — 76,872 Other assets in consolidated VIE 1,419 — 1,419 Total assets $ 1,812,759 $ 34,411 $ 1,847,170 LIABILITIES AND SHAREHOLDERS’ EQUITY Current liabilities: Short-term borrowings $ 195,500 $ — $ 195,500 Trade accounts payable 182,671 (1,898) 180,773 Trade accounts payable in consolidated VIE 25 — 25 Contract liabilities — 46,170 46,170 Customer advances 56,001 (56,001) — Accrued compensation 58,343 — 58,343 Other current liabilities 36,670 — 36,670 Other current liabilities in consolidated VIE 191 — 191 Income taxes payable 152 621 773 Current portion of long-term debt 10,714 — 10,714 Total current liabilities 540,267 (11,108) 529,159 Long-term debt 189,110 — 189,110 Long-term debt in consolidated VIE 61,994 — 61,994 Accrued pension liability 25,386 — 25,386 Deferred compensation 11,040 — 11,040 Income taxes payable 937 — 937 Deferred income taxes 4,554 — 4,554 Other noncurrent liabilities 22,817 — 22,817 Other noncurrent liabilities in consolidated VIE 21,605 — 21,605 Shareholders’ equity: Common stock 274,472 — 274,472 Retained earnings 834,349 28,599 862,948 Accumulated other comprehensive loss (139,693) — (139,693) Treasury stock at cost (36,078) — (36,078) Shareholders’ equity related to Cubic 933,050 28,599 961,649 Noncontrolling interest in VIE 1,999 16,920 18,919 Total shareholders’ equity 935,049 45,519 980,568 Total liabilities and shareholders’ equity $ 1,812,759 $ 34,411 $ 1,847,170 |
Acquisitions and Divestitures (
Acquisitions and Divestitures (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Acquisitions | |
Schedule of income (loss) from discontinued operations | The following table presents the composition of net income from discontinued operations, net of taxes (in thousands): Years Ended September 30, 2019 2018 2017 Net sales $ — $ 262,228 $ 378,152 Costs and expenses: Cost of sales — 235,279 342,819 Selling, general and administrative expenses — 11,365 17,487 Amortization of purchased intangibles — 1,373 2,752 Restructuring costs — 7 208 Other income — (15) (46) Earnings from discontinued operations before income taxes — 14,219 14,932 Net loss on sale 1,423 6,131 — Income tax provision — 3,845 401 Net income (loss) from discontinued operations $ (1,423) $ 4,243 $ 14,531 |
Schedule of estimated amortization expense related to acquisition | The table below shows our expected amortization of purchased intangibles as of September 30, 2019, for each of the next five years and thereafter (in thousands): Transportation Cubic Mission Systems Solutions Total 2020 $ 17,553 $ 18,884 $ 36,437 2021 16,025 14,429 30,454 2022 15,470 11,304 26,774 2023 10,353 9,151 19,504 2024 9,797 7,179 16,976 Thereafter 21,531 13,937 35,468 $ 90,729 $ 74,884 $ 165,613 |
Schedule of unaudited pro forma information | The following unaudited pro forma information presents our consolidated results of operations as if Nuvotronics, GRIDSMART, Trafficware, Shield, and MotionDSP had been included in our consolidated results since October 1, 2017 (in millions): Years Ended September 30, 2019 2018 Net sales $ 1,510.8 $ 1,297.6 Net income (loss) $ 45.1 $ (5.0) |
Nuvotronics | |
Acquisitions | |
Schedule of Business Combination Operating Results | Nuvotronics’ sales and results of operations included in our operating results were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ 7.4 $ — $ — Operating loss (6.9) — — Net loss after taxes (6.9) — — |
Schedule of Business Combination components of operating results | Nuvotronics’ operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 1.2 $ — $ — Acquisition-related expenses 3.0 — — |
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 $ 22.7 Trade name 1.5 Backlog 1.4 Non-compete agreements 0.5 Customer relationships 0.6 Accounts receivable and contract assets 2.6 Fixed assets 2.7 Accounts payable and accrued expenses (1.8) Deferred taxes (3.2) Other net assets acquired (liabilities assumed) (0.6) Net identifiable assets acquired 26.4 Goodwill 40.4 Net assets acquired $ 66.8 |
Schedule of estimated amortization expense related to acquisition | The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of Nuvotronics is as follows (in millions): Year Ended September 30, 2020 $ 4.0 2021 3.0 2022 3.0 2023 2.9 2024 2.7 Thereafter 10.1 |
GRIDSMART | |
Acquisitions | |
Schedule of Business Combination Operating Results | GRIDSMART’s sales and results of operations included in our operating results were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ 20.6 $ — $ — Operating income 0.9 — — Net income after taxes 0.9 — — |
Schedule of Business Combination components of operating results | GRIDSMART’s operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 4.0 $ — $ — Acquisition-related expenses 2.9 — — |
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 $ 25.7 Customer relationships 3.6 Trade name 2.4 Inventory 4.3 Accounts receivable 1.7 Accounts payable and accrued expenses (1.9) Deferred taxes (3.3) Other net assets acquired 0.6 Net identifiable assets acquired 33.1 Goodwill 53.7 Net assets acquired $ 86.8 |
Schedule of estimated amortization expense related to acquisition | The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of GRIDSMART is as follows (in millions): Year Ended September 30, 2020 $ 5.3 2021 3.9 2022 3.5 2023 3.5 2024 3.5 Thereafter 8.1 |
Trafficware | |
Acquisitions | |
Schedule of Business Combination Operating Results | Trafficware’s sales and results of operations included in our operating results were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ 53.8 $ — $ — Operating loss (11.0) — — Net loss after taxes (11.0) — — |
Schedule of Business Combination components of operating results | Trafficware’s operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 15.3 $ — $ — Acquisition-related expenses 5.2 — — |
Schedule of estimated fair values of the assets acquired and liabilities assumed at the acquisition date | The following table summarizes the fair values of the assets acquired and liabilities assumed at the acquisition date (in millions): Technology $ 43.3 Customer relationships 21.9 Backlog 4.8 Trade name 4.6 Accounts receivable 10.4 Inventory 9.9 Accounts payable and accrued expenses (8.9) Other net assets acquired (liabilities assumed) (2.0) Net identifiable assets acquired 84.0 Goodwill 153.2 Net assets acquired $ 237.2 |
Schedule of estimated amortization expense related to acquisition | The estimated amortization expense related to the intangible assets recorded in connection with our acquisition of Trafficware is as follows (in millions): Year Ended September 30, 2020 $ 11.4 2021 11.4 2022 11.4 2023 6.4 2024 5.9 Thereafter 12.9 |
Shield Aviation | |
Acquisitions | |
Schedule of Business Combination Operating Results | Shield’s sales and results of operations included in our operating results were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ — $ — $ — Operating loss (5.3) (0.8) — Net loss after taxes (5.3) (0.6) — |
Schedule of Business Combination components of operating results | Shield’s operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 0.8 $ 0.1 $ — Loss (gain) for changes in fair values of contingent consideration (1.8) 0.2 — |
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 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 amortization expense related to the intangible assets recorded in connection with our acquisition of Shield is as follows (in millions): Year Ended September 30, 2020 $ 0.8 2021 0.8 2022 0.8 2023 0.8 2024 0.8 Thereafter 1.4 |
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 were as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales $ 1.5 $ 0.6 $ — Operating loss (0.6) (2.7) — Net loss after taxes (0.6) (1.9) — |
Schedule of Business Combination components of operating results | MotionDSP’s operating results above included the following amounts (in millions): Years Ended September 30, 2019 2018 2017 Amortization $ 0.7 $ 0.4 $ — Acquisition-related expenses 0.4 0.8 0.2 |
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 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 is as follows (in millions) Year Ended September 30, 2020 $ 0.7 2021 0.7 2022 0.7 2023 0.7 2024 0.6 Thereafter 0.2 |
Variable Interest Entities (Tab
Variable Interest Entities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Variable Interest Entities | |
Schedule of summary of the consolidated net assets and liabilities | The assets and liabilities of OpCo that are included in our Consolidated Balance Sheets at September 30, 2019 and 2018 are as follows: September 30, 2019 2018 (in thousands) Cash $ 347 $ 374 Restricted cash 9,967 10,000 Other current assets 33 — Long-term capitalized contract costs — 33,818 Long-term contracts financing receivable 115,508 — Other noncurrent assets 1,419 810 Total assets $ 127,274 $ 45,002 Trade accounts payable $ 25 $ 165 Accrued compensation and other current liabilities 191 — Due to Cubic 25,143 11,724 Other long-term liabilities 21,605 13 Long-term debt 61,994 9,056 Total liabilities $ 108,958 $ 20,958 Total Cubic equity (603) (304) Noncontrolling interests 18,919 24,348 Total liabilities and owners' equity $ 127,274 $ 45,002 |
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 Consolidated Statements of Operations are as follows (in thousands): Years Ended September 30, 2019 2018 2017 Revenue $ 11,211 $ — $ — Operating income 9,923 — — Other income (expense), net (21,592) — — Interest income 3,704 — — Interest expense (2,946) — — |
Fair Value Of Financial Instr_2
Fair Value Of Financial Instruments (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Summary of assets and liabilities measured and recorded at fair value on Balance Sheet on a recurring basis | The following table presents assets and liabilities measured and recorded at fair value on our balance sheets on a recurring basis (in thousands): September 30, 2019 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 — 2,635 — 2,635 — 1,803 — 1,803 Noncurrent derivative assets — 859 — 859 — 314 — 314 Total assets measured at fair value $ — $ 3,494 $ — $ 3,494 $ 9,000 $ 2,117 $ — $ 11,117 Liabilities Current derivative liabilities — 529 — 529 — 1,657 — 1,657 Noncurrent derivative liabilities — 228 — 228 — 75 — 75 Contingent consideration to seller of H4 Global — — 1,073 1,073 — — 665 665 Contingent consideration to seller of Deltenna — — 1,787 1,787 — — 1,081 1,081 Contingent consideration to seller of Shield — — 3,814 3,814 — — 5,618 5,618 Contingent consideration to seller of Nuvotronics — — 4,200 4,200 — — — — Contingent consideration to seller of TeraLogics - revenue targets — — — — — — 1,750 1,750 Total liabilities measured at fair value $ — $ 757 $ 10,874 $ 11,631 $ — $ 1,732 $ 9,114 $ 10,846 |
Summary of change in fair value of contingent consideration liability | As of September 30, 2019, the following table summarizes the change in fair value of our Level 3 contingent consideration liabilities (in thousands): H4 Global Deltenna Shield Nuvotronics TeraLogics (Contract Extensions) TeraLogics (Revenue Targets) Total Balance as of September 30, 2017 $ 591 $ 1,376 $ — $ — $ 800 $ 2,450 $ 5,217 Initial measurement recognized at acquisition — — 5,618 — — — 5,618 Cash paid to seller — — — — (1,000) (1,750) (2,750) Total remeasurement (gain) loss recognized in earnings 74 (295) — — 200 1,050 1,029 Balance as of September 30, 2018 $ 665 $ 1,081 $ 5,618 $ — $ — $ 1,750 $ 9,114 Initial measurement recognized at acquisition — — — 4,900 — — 4,900 Cash paid to seller (385) — — — — (1,750) (2,135) Total remeasurement (gain) loss recognized in earnings 793 706 (1,804) (700) — — (1,005) Balance as of September 30, 2019 $ 1,073 $ 1,787 $ 3,814 $ 4,200 $ — $ — $ 10,874 |
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): September 30, 2019 2018 Fair value $ 203.3 $ 193.7 Carrying value $ 200.0 $ 200.0 |
Contract Assets and Liabiliti_2
Contract Assets and Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Contract Assets and Liabilities | |
Schedule of contract assets and liabilities | Contract assets and contract liabilities were as follows (in thousands): September 30, October 1, 2019 2018 Contract assets $ 349,559 $ 272,210 Contract liabilities $ 46,170 $ 70,127 |
Accounts Receivables (Tables)
Accounts Receivables (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Accounts Receivable | |
Schedule of components of accounts receivable | The components of accounts receivable are as follows (in thousands): September 30, 2019 2018 Accounts receivable Billed $ 127,406 $ 156,948 Unbilled — 242,877 Allowance for doubtful accounts (1,392) (1,324) Total accounts receivable 126,014 398,501 Less estimated amounts not currently due — (6,134) Current accounts receivable $ 126,014 $ 392,367 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Inventories | |
Components of inventories | Inventories consist of the following (in thousands): September 30, 2019 2018 Finished products $ 10,905 $ 7,099 Work in process and inventoried costs under long-term contracts 46,951 63,169 Materials and purchased parts 48,938 23,710 Customer advances — (9,779) Net inventories $ 106,794 $ 84,199 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Property, Plant and Equipment | |
Components of property, plant and equipment | Significant components of property, plant and equipment are as follows (in thousands): September 30, 2019 2018 Land and land improvements $ 7,348 $ 13,132 Buildings and improvements 48,191 57,959 Machinery and other equipment 107,297 81,727 Software 108,526 84,631 Leasehold improvements 17,064 11,991 Construction and internal-use software development in progress 16,814 12,888 Accumulated depreciation and amortization (160,271) (144,782) $ 144,969 $ 117,546 |
Goodwill and Purchased Intang_2
Goodwill and Purchased Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Goodwill and Purchased Intangible Assets | |
Schedule of changes in the carrying amount of goodwill | Changes in goodwill for the two years ended September 30, 2019 are as follows (in thousands): Cubic Transportation Cubic Mission Cubic Global Systems Solutions Defense Total Net balances at September 30, 2017 $ 50,870 $ — $ 270,692 $ 321,562 Reassignment on October 1, 2017 — 125,321 (125,321) — Acquisitions (see Note 2) — 13,085 665 13,750 Foreign currency exchange rate changes (1,084) (279) (323) (1,686) Net balances at September 30, 2018 49,786 138,127 145,713 333,626 Reassignment on April 1, 2019 — 3,428 (3,428) — Acquisitions 206,988 40,392 — 247,380 Foreign currency exchange rate changes (2,182) (523) (204) (2,909) Net balances at September 30, 2019 $ 254,592 $ 181,424 $ 142,081 $ 578,097 |
Schedule of entity's purchased intangible assets | The table below summarizes our purchased intangible assets (in thousands): September 30, 2019 September 30, 2018 Gross Gross Carrying Accumulated Net Carrying Carrying Accumulated Net Carrying Amount Amortization Amount Amount Amortization Amount Contract and program intangibles $ 181,903 $ (138,497) $ 43,406 $ 151,965 $ (112,399) $ 39,566 Other purchased intangibles 155,608 (33,401) 122,207 52,851 (18,884) 33,967 Total $ 337,511 $ (171,898) $ 165,613 $ 204,816 $ (131,283) $ 73,533 |
Schedule of expected amortization of purchased intangibles for each of the next five years | The table below shows our expected amortization of purchased intangibles as of September 30, 2019, for each of the next five years and thereafter (in thousands): Transportation Cubic Mission Systems Solutions Total 2020 $ 17,553 $ 18,884 $ 36,437 2021 16,025 14,429 30,454 2022 15,470 11,304 26,774 2023 10,353 9,151 19,504 2024 9,797 7,179 16,976 Thereafter 21,531 13,937 35,468 $ 90,729 $ 74,884 $ 165,613 |
Financing Arrangements (Tables)
Financing Arrangements (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Financing Arrangements | |
Schedule of long-term debt | Long-term debt consists of the following (in thousands): September 30, 2019 2018 Series A senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35% $ 50,000 $ 50,000 Series B senior unsecured notes payable to a group of insurance companies, interest fixed at 3.35% 50,000 50,000 Series C senior unsecured notes payable to a group of insurance companies, interest fixed at 3.70% 25,000 25,000 Series D senior unsecured notes payable to a group of insurance companies, interest fixed at 3.93% 75,000 75,000 200,000 200,000 Less unamortized debt issuance costs (175) (207) Less current portion (10,714) — $ 189,111 $ 199,793 |
Commitments (Tables)
Commitments (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Commitments | |
Summary of future minimum payments, net of minimum sublease income, under noncancelable operating leases | Future minimum payments, net of minimum sublease income, under non-cancelable operating leases with initial terms of one year or more consist of the following for the next five years and thereafter, as of September 30, 2019 (in thousands): 2020 $ 18,121 2021 17,218 2022 15,097 2023 13,250 2024 12,311 Thereafter 37,926 $ 113,923 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Income Taxes | |
Components of income (loss) before income taxes | Income (loss) from continuing operations before income taxes includes the following components (in thousands): Years Ended September 30, 2019 2018 2017 (in thousands) United States $ (535) $ (51,049) $ (70,566) Foreign 52,881 65,935 59,484 Total $ 52,346 $ 14,886 $ (11,082) |
Significant components of the provision for income taxes | Significant components of the provision (benefit) for income taxes from continuing operations are as follows: Years Ended September 30, 2019 2018 2017 (in thousands) Current: Federal $ (710) $ (4,775) $ (4,070) State 2,898 976 878 Foreign 10,523 19,882 13,869 Total current 12,711 16,083 10,677 Deferred: Federal (4,553) (7,874) 2,257 State (135) 482 569 Foreign 3,017 (1,598) 1,155 Total deferred (1,671) (8,990) 3,981 Provision for income taxes $ 11,040 $ 7,093 $ 14,658 |
Reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense | The reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense is as follows: Years Ended September 30, 2019 2018 2017 (in thousands) Tax expense at U.S. statutory rate $ 10,992 $ 3,124 $ (3,877) State income taxes, net of federal tax effect 1,416 (237) (923) Nondeductible expenses 1,720 1,186 (185) Change in reserve for tax contingencies (1,468) (1,047) (4,435) Change in deferred tax asset valuation allowance (10,007) 8,784 17,374 Foreign rate differential 2,149 5,684 9,912 Tax credits (4,767) (2,656) (3,459) Impact of U.S. Tax Reform — (7,053) — Global Intangible Low-Tax Income 8,182 — — Stock Based Compensation (448) 59 16 Non-controlling interest in equity arrangements 1,802 99 — Other 1,469 (850) 235 Provision for income taxes $ 11,040 $ 7,093 $ 14,658 (1) |
Significant components of deferred tax assets and liabilities | Significant components of our deferred tax assets and liabilities are as follows: September 30, 2019 2018 (in thousands) Deferred tax assets: Accrued employee benefits $ 11,409 $ 8,285 Allowances for loss contingencies 3,561 3,518 Deferred compensation 3,071 3,272 Intangible assets — 1,361 Inventory valuation 8,036 1,154 Long-term contracts 6,995 7,751 Prepaid and accrued expenses 1,816 1,229 Retirement benefits 4,967 1,398 Tax credit carryforwards 33,118 35,137 Loss carryforwards 36,248 29,097 Other 818 264 Total gross deferred tax assets 110,039 92,466 Valuation allowance (69,098) (81,838) Total deferred tax assets 40,941 10,628 Deferred tax liabilities: Debt obligation basis difference (4,582) — Deferred revenue (12,135) (2,351) Intangible assets (18,592) — Property, plant and equipment (4,524) (5,079) Unremitted earnings (977) (823) Other (587) (351) Total deferred tax liabilities (41,397) (8,604) Net deferred tax asset (liability) $ (456) $ 2,024 |
Expiration of tax credit carryforwards | At September 30, 2019, we have federal and state income tax credit carryforwards (in thousands) which begin to expire as follows: U.S. foreign tax credits $ 14,535 2027 U.S. research and development tax credits 14,439 2035 State research and development tax credits 25,748 Do not expire |
Expiration of federal, state and foreign net operating losses | We have federal, state and foreign capital and net operating losses (in thousands) which begin to expire as follows: U.S. net operating loss carryforwards $ 127,013 2033 U.S. capital loss carryforwards 5,451 2023 State loss carryforwards 55,619 2021 State capital loss carryforwards 23,038 2023 Foreign net operating loss carryforwards 13,548 Do not expire |
Aggregate changes in the total gross unrecognized tax benefits | During fiscal 2019 and 2018, the aggregate changes in our total gross amount of unrecognized tax benefits are summarized as follows: September 30, 2019 2018 (in thousands) Balance at beginning of year $ 9,942 $ 13,248 Additions (reductions) for tax positions taken in prior years 8,458 (80) Recognition of benefits from expiration of statutes (776) (1,770) Additions for tax positions related to the current year 951 713 Reductions for tax positions related to acquisitions — (2,169) Balance at end of year $ 18,575 $ 9,942 |
Derivative Instruments and He_2
Derivative Instruments and Hedging Activities (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Derivative Instruments and Hedging Activities | |
Schedule of notional principal amounts of the outstanding derivative instruments | The following table shows the notional principal amounts of our outstanding derivative instruments as of September 30, 2019 and 2018 (in thousands): Notional Principal September 30, 2019 September 30, 2018 Instruments designated as accounting hedges: Foreign currency forwards $ 143,164 $ 169,406 Interest rate swaps 95,000 — Instruments not designated as accounting hedges: Foreign currency forwards $ 24,220 $ 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 Consolidated Balance Sheets (in thousands): Fair Value Balance Sheet Location September 30, 2019 September 30, 2018 Asset derivatives: Foreign currency forwards Other current assets $ 2,635 $ 1,803 Foreign currency forwards Other assets 619 314 Forward starting swap Other assets 240 — $ 3,494 $ 2,117 Liability derivatives: Foreign currency forwards Other current liabilities $ 529 $ 1,657 Foreign currency forwards Other noncurrent liabilities 228 75 Total $ 757 $ 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) related to derivative financial instruments designated as cash flow hedges, as well as the amount of gains and losses reclassified into earnings (in thousands): September 30, 2019 September 30, 2018 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 $ 4,344 $ 1,945 $ (45) $ (1,239) |
Pension, Profit Sharing and O_2
Pension, Profit Sharing and Other Benefit Plans (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Pension Plans | |
Schedule of projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the defined benefit pension plans | The projected benefit obligation, accumulated benefit obligation and fair value of plan assets for the defined benefit pension plans were as follows (in thousands): September 30, 2019 2018 Projected benefit obligation $ 246,697 $ 222,332 Accumulated benefit obligation 246,697 222,332 Fair value of plan assets 221,311 214,530 |
Schedule of changes in the projected benefit obligation and fair value of plan assets and the funded status | The following table sets forth changes in the projected benefit obligation and fair value of plan assets and the funded status for these defined benefit plans (in thousands): September 30, 2019 2018 Change in benefit obligations: Net benefit obligation at the beginning of the year $ 222,332 $ 235,097 Service cost 590 606 Interest cost 7,617 7,529 Actuarial (gain) loss 32,067 (9,449) Gross benefits paid (8,141) (8,034) Foreign currency exchange rate changes (7,768) (3,417) Net benefit obligation at the end of the year 246,697 222,332 Change in plan assets: Fair value of plan assets at the beginning of the year 214,530 209,722 Actual return on plan assets 17,794 11,998 Employer contributions 4,842 5,117 Gross benefits paid (8,141) (8,034) PBGC Premium paid (177) (286) Administrative expenses (541) (698) Foreign currency exchange rate changes (6,996) (3,289) Fair value of plan assets at the end of the year 221,311 214,530 Unfunded status of the plans (25,386) (7,802) Unrecognized net actuarial loss 70,095 48,081 Net amount recognized $ 44,709 $ 40,279 Amounts recognized in Accumulated OCI Liability adjustment to OCI $ (70,095) $ (48,081) Deferred tax asset 11,667 7,365 Valuation allowance on deferred tax asset (1,172) 610 Accumulated other comprehensive loss $ (59,600) $ (40,106) |
Components of net periodic pension cost (benefit) | The components of net periodic pension cost (benefit) were as follows (in thousands): Years Ended September 30, 2019 2018 2017 Service cost $ 590 $ 606 $ 617 Interest cost 7,617 7,529 7,091 Expected return on plan assets (11,990) (14,120) (12,928) Amortization of actuarial loss 2,098 2,777 3,700 Administrative expenses 348 438 474 Net pension benefit $ (1,337) $ (2,770) $ (1,046) |
Schedule of weighted-average assumptions used to determine benefit obligation and net periodic benefit cost | Years Ended September 30, 2019 2018 2017 Weighted-average assumptions used to determine benefit obligation at September 30: Discount rate 2.5% 3.6% 3.3% Rate of compensation increase 3.1% 3.3% 3.2% Weighted-average assumptions used to determine net periodic benefit cost for the years ended September 30: Discount rate 3.6% 3.3% 3.0% Expected return on plan assets 5.7% 6.8% 6.8% Rate of compensation increase 3.3% 3.2% 3.1% |
Schedule of target ranges for each major category of the plans' assets | The target ranges for each major category of the plans’ assets at September 30, 2019 are as follows: Allocation Asset Category Range Equity securities 20% to 55% Debt securities 25% to 75% Cash 0% to 55% Real estate 0% to 10% |
Schedule of fair value of the assets of defined benefit pension plans by asset category and their level within the fair value hierarchy | September 30, 2019 September 30, 2018 Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total Plan assets held at fair value: Cash equivalents $ 2,908 $ — $ — $ 2,908 $ 19,314 $ — $ — $ 19,314 Plan assets held at net asset value practical expedient*: Equity Funds 100,302 107,424 Fixed Income Funds 105,651 73,533 Diversified Growth Funds 8,886 14,259 Real Estate Funds 3,564 — Total assets held at net asset value practical expedient: $ 218,403 $ 195,216 Total Plan Assets $ 221,311 $ 214,530 * Plan assets measured at fair value using NAV (or its equivalent) as a practical expedient have not been categorized in the fair value hierarchy. |
Schedule of expected pension benefit payments, which reflect expected future service | We expect to pay the following pension benefit payments (in thousands): 2020 $ 9,067 2021 9,140 2022 9,306 2023 9,324 2024 9,693 2024-2028 52,750 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Stockholders' Equity | |
Summary of assumptions used for the valuation of the RSUs with performance and market-based vesting that were granted | The following table includes the assumptions used for the valuation of the RSUs with performance and market-based vesting that were granted during fiscal 2019: RSUs granted during the year ended September 30, 2019 Date of grant November 21, 2018 April 1, 2019 Grant date fair value $67.40 $59.29 Performance period begins November 21, 2018 April 1, 2019 Performance period ends September 30, 2021 September 30, 2021 Risk-free interest rate 2.8% 2.8% Expected volatility 34% 34% |
Summary of RSU activity | The following table summarizes our RSU activity: Unvested Restricted Stock Units with Service-Based Vesting Weighted Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2017 366,331 $ 45.99 Granted 165,271 61.06 Vested (147,832) 46.86 Forfeited (17,310) 48.62 Unvested at September 30, 2018 366,460 $ 52.31 Granted 239,874 63.25 Vested (145,409) 50.76 Forfeited (38,831) 54.67 Unvested at September 30, 2019 422,094 $ 58.84 Unvested Restricted Stock Units with Performance-Based Vesting Weighted Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2017 678,856 $ 46.59 Granted 179,162 61.40 Vested — — Forfeited (222,390) 48.46 Unvested at September 30, 2018 635,628 $ 50.11 Granted — — Vested — — Forfeited (320,366) 44.63 Unvested at September 30, 2019 315,262 $ 55.67 Unvested Restricted Stock Units with Performance and Market-Based Vesting Weighted Average Number of Shares Grant-Date Fair Value Unvested at September 30, 2017 — $ — Granted — — Vested — — Forfeited — — Unvested at September 30, 2018 — $ — Granted 237,616 66.79 Vested — — Forfeited (10,214) 67.40 Unvested at September 30, 2019 227,402 $ 66.77 |
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): Years Ended September 30, 2019 2018 2017 Cost of sales $ 1,766 $ 1,096 $ 338 Selling, general and administrative 13,722 6,419 4,674 $ 15,488 $ 7,515 $ 5,012 |
Business Segment Information (T
Business Segment Information (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Business Segment Information | |
Schedule of business segment financial data | Business segment financial data is as follows (in millions): Years Ended September 30, 2019 2018 2017 Sales: Cubic Transportation Systems $ 849.8 $ 670.7 $ 578.6 Cubic Mission Solutions 328.8 207.0 168.9 Cubic Global Defense 317.9 325.2 360.2 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Operating income (loss): Cubic Transportation Systems $ 77.2 $ 60.4 $ 39.8 Cubic Mission Solutions 7.8 (0.1) (9.3) Cubic Global Defense 23.0 16.6 28.1 Unallocated corporate expenses (21.8) (52.5) (56.0) Total operating income $ 86.2 $ 24.4 $ 2.6 Assets: Cubic Transportation Systems $ 825.8 $ 390.2 $ 335.1 Cubic Mission Solutions 437.9 352.9 390.5 Cubic Global Defense 394.2 360.1 280.1 Corporate 189.3 201.7 156.4 Discontinued Operations — — 174.2 Total assets $ 1,847.2 $ 1,304.9 $ 1,336.3 Depreciation and amortization: Cubic Transportation Systems $ 30.7 $ 12.0 $ 8.8 Cubic Mission Solutions 23.3 22.4 23.8 Cubic Global Defense 6.8 8.5 10.4 Corporate 3.9 3.7 5.0 Total depreciation and amortization $ 64.7 $ 46.6 $ 48.0 Capital expenditures: Cubic Transportation Systems $ 6.6 $ 3.2 $ 6.9 Cubic Mission Solutions 11.1 2.1 1.7 Cubic Global Defense 4.5 9.4 5.9 Corporate 26.9 17.0 22.4 Total expenditures for long-lived assets $ 49.1 $ 31.7 $ 36.9 |
Schedule of long-lived assets by country | Years ended September 30, 2019 2018 2017 Long-lived assets, net: United States $ 128.4 $ 106.7 $ 100.6 United Kingdom 5.9 5.7 11.7 Other foreign countries 10.7 12.0 7.3 Total long-lived assets, net $ 145.0 $ 124.4 $ 119.6 |
Schedule of Disaggregation of Total Net Sales | Disaggregation of Total Net Sales : Sales by Geographic Region Years Ended September 30, 2019 2018 2017 United States $ 956.6 $ 627.8 $ 522.8 United Kingdom 218.2 240.7 219.4 Australia 163.5 166.7 175.6 Far East/Middle East 74.0 86.4 112.7 Other 84.2 81.3 77.2 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Sales by End Customer: Years Ended September 30, 2019 2018 2017 U.S. Federal Government and State and Local Municipalities $ 938.8 $ 639.5 $ 522.6 Other 557.7 563.4 585.1 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Sales by Contract Type: On a fixed-price type contract, we agree to perform the contractual statement of work for a predetermined sales price. On a cost-plus type contract, we are 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): Years Ended September 30, 2019 2018 2017 Fixed Price $ 1,452.4 $ 1,146.2 $ 1,036.9 Other 44.1 56.7 70.8 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Sales by Deliverable Type: Years Ended September 30, 2019 2018 2017 Product $ 1,011.1 $ 704.9 $ 681.6 Service 485.4 498.0 426.1 Total sales $ 1,496.5 $ 1,202.9 $ 1,107.7 Revenue Recognition Method: September 30, 2019 Point in Time $ 347.4 Over Time 1,149.1 Total sales $ 1,496.5 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Restructuring | |
Schedule of restructuring charges incurred | Restructuring charges incurred by our business segments were as follows (in millions): Years Ended September 30, 2019 2018 2017 Restructuring costs: Cubic Transportation Systems $ 3.2 $ 0.4 $ 0.4 Cubic Mission Solutions — 0.2 — Cubic Global Defense 3.3 1.3 0.9 Unallocated corporate expenses 8.9 3.1 1.0 Total restructuring costs $ 15.4 $ 5.0 $ 2.3 |
Schedule of rollforward of restructuring liability | The following table presents a rollforward of our restructuring liability as of September 30, 2019, which is included within accrued compensation and other current liabilities within our Consolidated Balance Sheet, (in millions): Restructuring Liability Restructuring Liability Employee Separation and other Consulting Costs Balance as of October 1, 2017 $ 1.0 $ — Accrued costs 4.2 0.8 Cash payments (4.6) (0.5) Balance as of September 30, 2018 $ 0.6 $ 0.3 Accrued costs 7.5 7.9 Cash payments (6.1) (7.4) Balance as of September 30, 2019 $ 2.0 $ 0.8 |
Summary of Quarterly Results _2
Summary of Quarterly Results of Operations (Unaudited) (Tables) | 12 Months Ended |
Sep. 30, 2019 | |
Summary of Quarterly Results of Operations (Unaudited) | |
Summary of quarterly results of operations | The following is a summary of our quarterly results of operations for the fiscal years ended September 30, 2019 and 2018: Year Three Months Ended Ended Fiscal 2019 September 30 June 30 March 31 December 31 September 30 (in thousands, except per share data) Net sales $ 471,198 $ 382,679 $ 337,339 $ 305,259 $ 1,496,475 Operating income (loss) 58,619 34,725 (6,541) (566) 86,237 Net income (loss) 41,763 23,910 (9,392) (6,587) 49,694 Net income (loss) per share, basic 1.39 0.77 (0.30) (0.23) 1.63 Net income (loss) per share, diluted 1.38 0.77 (0.30) (0.23) 1.62 Year Three Months Ended Ended Fiscal 2018 September 30 June 30 March 31 December 31 September 30 (in thousands, except per share data) Net sales $ 379,709 $ 296,212 $ 278,586 $ 248,391 $ 1,202,898 Operating income (loss) 27,673 10,290 (1,679) (11,902) 24,382 Net income (loss) 17,816 6,291 (2,011) (9,786) 12,310 Net income (loss) per share, basic 0.65 0.23 (0.07) (0.36) 0.45 Net income (loss) per share, diluted 0.65 0.23 (0.07) (0.36) 0.45 The following table summarizes the aggregate impact of net changes in contract estimates (amounts in thousands, except per share data): Three Months Ended September 30, 2019 2018 Operating income (loss) $ (1,420) $ (4,162) Net income (loss) from continuing operations (1,615) (3,149) Diluted earnings per share (0.05) (0.12) |
Summary of Significant Accoun_4
Summary of Significant Accounting Polices - (Details) | 12 Months Ended |
Sep. 30, 2019item | |
Organization and Nature of the Business | |
Number of Reportable Segments | 3 |
Summary of Significant Accoun_5
Summary of Significant Accounting Polices - Foreign Currency Transactions and Translation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Foreign Currency Transactions and Translations | |||
Total transaction gains (losses) related primarily to advances to and between foreign subsidiaries | $ 0.7 | $ (2.2) | $ 0.7 |
Summary of Significant Accoun_6
Summary of Significant Accounting Polices - ASC 606 (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2018 | |
Revenue, Initial Application Period Cumulative Effect Transition | ||||||||||||
Equity | $ 980,568 | $ 724,196 | $ 980,568 | $ 724,196 | $ 748,685 | |||||||
Operating income (loss) | $ 58,619 | $ 34,725 | $ (6,541) | $ (566) | $ 27,673 | $ 10,290 | $ (1,679) | $ (11,902) | 86,237 | 24,382 | $ 2,628 | |
Net income (loss) from continuing operations | $ 41,306 | $ 7,793 | $ (25,740) | |||||||||
Diluted earnings per share attributable to Cubic (in dollars per share) | $ 1.38 | $ 0.77 | $ (0.30) | $ (0.23) | $ 0.65 | $ 0.23 | $ (0.07) | $ (0.36) | $ 1.62 | $ 0.45 | $ (0.41) | |
ASU 2014-09 | ASC 606 | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | ||||||||||||
Equity | $ 45,519 | $ 24,489 | $ 45,519 | $ 24,489 | ||||||||
Operating income (loss) | 14,885 | |||||||||||
Net income (loss) from continuing operations | $ 21,029 | |||||||||||
Diluted earnings per share attributable to Cubic (in dollars per share) | $ 0.29 | |||||||||||
ASU 2014-09 | ASC 606 | Change in Estimates | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | ||||||||||||
Operating income (loss) | (1,420) | (4,162) | $ (2,235) | (6,986) | $ 5,737 | |||||||
Net income (loss) from continuing operations | $ (1,615) | $ (3,149) | $ (2,351) | $ (5,146) | $ 3,208 | |||||||
Diluted earnings per share attributable to Cubic (in dollars per share) | $ (0.05) | $ (0.12) | $ (0.08) | $ (0.19) | $ 0.12 | |||||||
ASU 2014-09 | Adjustments | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | ||||||||||||
Equity | $ 24,500 |
Summary of Significant Accoun_7
Summary of Significant Accounting Polices - Backlog (Details) $ in Millions | Sep. 30, 2019USD ($) |
Summary of Significant Accounting Polices | |
Revenue, Remaining performance obligation | $ 3,401 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining performance obligation (in percent) | 30.00% |
Contract term | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining performance obligation (in percent) | 45.00% |
Contract term | 24 months |
Summary of Significant Accoun_8
Summary of Significant Accounting Polices - Accounts Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Accounts Receivable | ||
Allowance for doubtful accounts | $ 1,392 | $ 1,324 |
Summary of Significant Accoun_9
Summary of Significant Accounting Polices - PPNE, Impairment of Long-Lived Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Impairment of Long-Lived Assets | |||
Impairment of long-lived assets | $ 0 | $ 0 | $ 0 |
Software | Minimum | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful life | 3 years | ||
Software | Maximum | |||
Property, Plant and Equipment | |||
Property, plant and equipment, useful life | 7 years |
Summary of Significant Accou_10
Summary of Significant Accounting Polices - EPS (Details) - shares shares in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net income (loss) per share: | |||
Weighted average shares - basic | 30,495 | 27,229 | 27,106 |
Effect of dilutive securities | 111 | 122 | |
Weighted average shares - diluted | 30,606 | 27,351 | 27,106 |
Number of anti-dilutive securities | 967 |
Summary of Significant Accou_11
Summary of Significant Accounting Polices - New Accounting Pronouncements (Details) - ASU 2016-02 - Scenario Forecast Adjustment $ in Millions | Oct. 01, 2019USD ($) |
Recent Accounting Pronouncements | |
Right of use asset | $ 80 |
Lease liability | $ 88 |
Implementation of the New Rev_3
Implementation of the New Revenue Recognition Standard (Details) - USD ($) $ in Thousands | Oct. 01, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition | ||||||||||||
Retained earnings | $ 821,668 | $ 862,948 | $ 801,834 | $ 862,948 | $ 801,834 | |||||||
Net sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 | |
ASU 2014-09 | Adjustments | ||||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | ||||||||||||
Retained earnings | 24,500 | |||||||||||
Net sales | 114,900 | |||||||||||
Cost of Goods Sold | $ 90,400 |
Implementation of the New Rev_4
Implementation of the New Revenue Recognition Standard - Cumulative effect on Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Oct. 01, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||||
Accounts receivable, net | $ 126,014 | $ 155,624 | $ 392,367 | |
Contract assets | 349,559 | 272,210 | ||
Recoverable income taxes | 7,754 | 91 | 91 | |
Inventories | 106,794 | 61,688 | 84,199 | |
Assets held for sale | 8,177 | 8,177 | ||
Other current assets | 43,705 | 43,705 | ||
Total current assets | 724,309 | 681,103 | 668,147 | |
Long-term contracts receivables | 6,134 | |||
Property, plant and equipment, net | 144,969 | 117,546 | 117,546 | |
Deferred income taxes | 4,098 | 5,102 | 4,713 | |
Goodwill | 578,097 | 333,626 | 333,626 | $ 321,562 |
Purchased intangibles, net | 165,613 | 73,533 | 73,533 | |
Other assets | 76,872 | |||
Total assets | 1,847,170 | 1,321,130 | 1,304,883 | $ 1,336,300 |
Current liabilities: | ||||
Short-term borrowings | 195,500 | |||
Contract liabilities | 46,170 | 70,127 | ||
Customer advances | 75,941 | |||
Accrued compensation and other current liabilities | 118,816 | 118,233 | ||
Income taxes payable | 773 | 8,586 | 8,586 | |
Total current liabilities | 529,159 | 320,097 | 328,339 | |
Long-term debt | 189,111 | 199,793 | ||
Accrued pension liability | 25,386 | 7,802 | 7,802 | |
Deferred compensation | 11,040 | 11,476 | 11,476 | |
Income taxes payable | 937 | 2,406 | 2,406 | |
Deferred income taxes | 4,554 | 2,689 | 2,689 | |
Shareholders' equity: | ||||
Common stock | 274,472 | 45,008 | 45,008 | |
Retained earnings | 862,948 | 821,668 | 801,834 | |
Accumulated other comprehensive loss | (139,693) | (110,643) | (110,643) | |
Treasury stock at cost | (36,078) | (36,078) | (36,078) | |
Shareholders' equity related to Cubic | 961,649 | 719,955 | 700,121 | |
Noncontrolling interest in VIE | 18,919 | 28,730 | 24,075 | |
Total shareholders' equity | 980,568 | 748,685 | 724,196 | |
Total liabilities and shareholders' equity | 1,847,170 | 1,321,130 | 1,304,883 | |
Cubic Corporation Excluding VIE | ||||
Current assets: | ||||
Cash and cash equivalents | 65,800 | 111,834 | 111,834 | |
Restricted cash | 19,507 | 17,400 | 17,400 | |
Other current assets | 38,534 | 43,705 | ||
Long-term contracts financing receivables | 36,285 | 56,228 | ||
Long-term capitalized contract costs | 84,924 | |||
Other assets | 76,872 | 14,192 | 14,192 | |
Current liabilities: | ||||
Trade accounts payable | 180,773 | 122,403 | 125,414 | |
Long-term debt | 189,110 | 199,793 | 199,793 | |
Other long term liabilities | 22,817 | 19,113 | 19,113 | |
OpCo. | ||||
Current assets: | ||||
Cash and cash equivalents | 347 | 374 | 374 | |
Restricted cash | 9,967 | 10,000 | 10,000 | |
Other current assets | 33 | |||
Long-term contracts financing receivables | 115,508 | 38,990 | ||
Long-term capitalized contract costs | 1,258 | |||
Other assets | 1,419 | 810 | 810 | |
Current liabilities: | ||||
Trade accounts payable | 25 | 165 | 165 | |
Long-term debt | 61,994 | 9,056 | 9,056 | |
Other long term liabilities | 21,605 | $ 13 | 13 | |
ASU 2014-09 | ASC 606 | ||||
Current assets: | ||||
Accounts receivable, net | (273,625) | (236,743) | ||
Contract assets | 349,559 | 272,210 | ||
Recoverable income taxes | 1,029 | |||
Inventories | (51,919) | (22,511) | ||
Total current assets | 25,044 | 12,956 | ||
Long-term contracts receivables | (3,077) | (6,134) | ||
Deferred income taxes | 389 | |||
Total assets | 34,411 | 16,247 | ||
Current liabilities: | ||||
Contract liabilities | 46,170 | 70,127 | ||
Customer advances | (56,001) | (75,941) | ||
Accrued compensation and other current liabilities | 583 | |||
Income taxes payable | 621 | |||
Total current liabilities | (11,108) | (8,242) | ||
Shareholders' equity: | ||||
Retained earnings | 28,599 | 19,834 | ||
Shareholders' equity related to Cubic | 28,599 | 19,834 | ||
Noncontrolling interest in VIE | 16,920 | 4,655 | ||
Total shareholders' equity | 45,519 | 24,489 | ||
Total liabilities and shareholders' equity | 34,411 | 16,247 | ||
ASU 2014-09 | Cubic Corporation Excluding VIE | ASC 606 | ||||
Current assets: | ||||
Long-term contracts financing receivables | 36,285 | 56,228 | ||
Long-term capitalized contract costs | (136,804) | (84,924) | ||
Current liabilities: | ||||
Trade accounts payable | (1,898) | (3,011) | ||
ASU 2014-09 | OpCo. | ASC 606 | ||||
Current assets: | ||||
Long-term contracts financing receivables | 115,508 | 38,990 | ||
Long-term capitalized contract costs | $ (2,545) | $ (1,258) |
Implementation of the New Rev_5
Implementation of the New Revenue Recognition Standard - Effect on Statement of Operations (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net sales: | ||||||||||||
Net sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 | |
Costs and expenses: | ||||||||||||
Selling, general and administrative expenses | 270,064 | 258,644 | 240,196 | |||||||||
Research and development | 50,132 | 52,398 | 52,652 | |||||||||
Amortization of purchased intangibles | 42,106 | 27,064 | 30,245 | |||||||||
(Gain) loss on sale of property, plant and equipment | $ (32,500) | (32,510) | 405 | |||||||||
Restructuring costs | 15,386 | 5,018 | 2,260 | |||||||||
Total costs and expenses | 1,410,238 | 1,178,516 | 1,105,081 | |||||||||
Operating income | 58,619 | 34,725 | (6,541) | (566) | 27,673 | 10,290 | (1,679) | (11,902) | 86,237 | 24,382 | 2,628 | |
Other income (expenses): | ||||||||||||
Interest and dividend income | 6,519 | 1,615 | 953 | |||||||||
Interest expense | (20,453) | (10,424) | (15,027) | |||||||||
Other income (expense), net | (19,957) | (687) | 364 | |||||||||
Income (loss) from continuing operations before income taxes | 52,346 | 14,886 | (11,082) | |||||||||
Income tax provision | 11,040 | 7,093 | 14,658 | |||||||||
Income (loss) from continuing operations | 41,306 | 7,793 | (25,740) | |||||||||
Net loss from discontinued operations | (1,423) | 4,243 | 14,531 | |||||||||
Net income (loss) | 39,883 | 12,036 | (11,209) | |||||||||
Less noncontrolling interest in loss of VIE | (9,811) | (274) | ||||||||||
Net income (loss) attributable to Cubic | 41,763 | 23,910 | (9,392) | (6,587) | 17,816 | 6,291 | (2,011) | (9,786) | 49,694 | 12,310 | (11,209) | |
Amounts attributable to Cubic: | ||||||||||||
Net income from continuing operations | 51,117 | 8,067 | (25,740) | |||||||||
Net loss from discontinued operations | (1,423) | 4,243 | 14,531 | |||||||||
Net income (loss) attributable to Cubic | $ 41,763 | $ 23,910 | $ (9,392) | $ (6,587) | $ 17,816 | $ 6,291 | $ (2,011) | $ (9,786) | $ 49,694 | $ 12,310 | $ (11,209) | |
Net income (loss) per share: | ||||||||||||
Basic earnings per share attributable to Cubic (in dollars per share) | $ 1.39 | $ 0.77 | $ (0.30) | $ (0.23) | $ 0.65 | $ 0.23 | $ (0.07) | $ (0.36) | $ 1.63 | $ 0.45 | $ (0.41) | |
Diluted earnings per share attributable to Cubic (in dollars per share) | $ 1.38 | $ 0.77 | $ (0.30) | $ (0.23) | $ 0.65 | $ 0.23 | $ (0.07) | $ (0.36) | $ 1.62 | $ 0.45 | $ (0.41) | |
ASC 605 | ASU 2014-09 | ||||||||||||
Net sales: | ||||||||||||
Net sales | $ 1,387,276 | |||||||||||
Costs and expenses: | ||||||||||||
Selling, general and administrative expenses | 269,266 | |||||||||||
Research and development | 50,132 | |||||||||||
Amortization of purchased intangibles | 42,106 | |||||||||||
(Gain) loss on sale of property, plant and equipment | (32,510) | |||||||||||
Restructuring costs | 15,386 | |||||||||||
Total costs and expenses | 1,315,924 | |||||||||||
Operating income | 71,352 | |||||||||||
Other income (expenses): | ||||||||||||
Interest and dividend income | 394 | |||||||||||
Interest expense | (20,453) | |||||||||||
Other income (expense), net | (19,957) | |||||||||||
Income (loss) from continuing operations before income taxes | 31,336 | |||||||||||
Income tax provision | 11,059 | |||||||||||
Income (loss) from continuing operations | 20,277 | |||||||||||
Net loss from discontinued operations | (1,423) | |||||||||||
Net income (loss) | 18,854 | |||||||||||
Less noncontrolling interest in loss of VIE | (22,076) | |||||||||||
Net income (loss) attributable to Cubic | 40,930 | |||||||||||
Amounts attributable to Cubic: | ||||||||||||
Net income from continuing operations | 42,353 | |||||||||||
Net loss from discontinued operations | (1,423) | |||||||||||
Net income (loss) attributable to Cubic | $ 40,930 | |||||||||||
Net income (loss) per share: | ||||||||||||
Basic earnings per share attributable to Cubic (in dollars per share) | $ 1.34 | |||||||||||
Diluted earnings per share attributable to Cubic (in dollars per share) | $ 1.34 | |||||||||||
ASC 606 | ASU 2014-09 | ||||||||||||
Net sales: | ||||||||||||
Net sales | $ 109,199 | |||||||||||
Costs and expenses: | ||||||||||||
Selling, general and administrative expenses | 798 | |||||||||||
Total costs and expenses | 94,314 | |||||||||||
Operating income | 14,885 | |||||||||||
Other income (expenses): | ||||||||||||
Interest and dividend income | 6,125 | |||||||||||
Income (loss) from continuing operations before income taxes | 21,010 | |||||||||||
Income tax provision | (19) | |||||||||||
Income (loss) from continuing operations | 21,029 | |||||||||||
Net income (loss) | 21,029 | |||||||||||
Less noncontrolling interest in loss of VIE | 12,265 | |||||||||||
Net income (loss) attributable to Cubic | 8,764 | |||||||||||
Amounts attributable to Cubic: | ||||||||||||
Net income from continuing operations | 8,764 | |||||||||||
Net income (loss) attributable to Cubic | $ 8,764 | |||||||||||
Net income (loss) per share: | ||||||||||||
Basic earnings per share attributable to Cubic (in dollars per share) | $ 0.29 | |||||||||||
Diluted earnings per share attributable to Cubic (in dollars per share) | $ 0.29 | |||||||||||
Products | ||||||||||||
Net sales: | ||||||||||||
Net sales | $ 1,011,069 | $ 704,941 | $ 681,559 | |||||||||
Costs and expenses: | ||||||||||||
Costs | 732,137 | 472,698 | 473,670 | |||||||||
Products | ASC 605 | ASU 2014-09 | ||||||||||||
Net sales: | ||||||||||||
Net sales | 902,913 | |||||||||||
Costs and expenses: | ||||||||||||
Costs | 638,621 | |||||||||||
Products | ASC 606 | ASU 2014-09 | ||||||||||||
Net sales: | ||||||||||||
Net sales | 108,156 | |||||||||||
Costs and expenses: | ||||||||||||
Costs | 93,516 | |||||||||||
Services | ||||||||||||
Net sales: | ||||||||||||
Net sales | 485,406 | 497,957 | 426,150 | |||||||||
Costs and expenses: | ||||||||||||
Costs | 332,923 | $ 362,694 | $ 305,653 | |||||||||
Services | ASC 605 | ASU 2014-09 | ||||||||||||
Net sales: | ||||||||||||
Net sales | 484,363 | |||||||||||
Costs and expenses: | ||||||||||||
Costs | 332,923 | |||||||||||
Services | ASC 606 | ASU 2014-09 | ||||||||||||
Net sales: | ||||||||||||
Net sales | $ 1,043 |
Implementation of the New Rev_6
Implementation of the New Revenue Recognition Standard - Impact on segment net sales and operating income (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
Operating income (loss) | $ 58,619 | $ 34,725 | $ (6,541) | $ (566) | $ 27,673 | $ 10,290 | $ (1,679) | $ (11,902) | 86,237 | 24,382 | 2,628 |
ASU 2014-09 | ASC 605 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 1,387,276 | ||||||||||
Operating income (loss) | 71,352 | ||||||||||
ASU 2014-09 | ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 109,199 | ||||||||||
Operating income (loss) | 14,885 | ||||||||||
Unallocated corporate expenses and other | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Operating income (loss) | (21,724) | (52,500) | (56,000) | ||||||||
Unallocated corporate expenses and other | ASU 2014-09 | ASC 605 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Operating income (loss) | (21,724) | ||||||||||
Cubic Transportation Systems | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 849,779 | 670,700 | 578,600 | ||||||||
Operating income (loss) | 77,233 | 60,400 | 39,800 | ||||||||
Cubic Transportation Systems | ASU 2014-09 | ASC 605 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 787,936 | ||||||||||
Operating income (loss) | 65,974 | ||||||||||
Cubic Transportation Systems | ASU 2014-09 | ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 61,843 | ||||||||||
Operating income (loss) | 11,259 | ||||||||||
Cubic Mission Solutions | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 328,771 | 207,000 | 168,900 | ||||||||
Operating income (loss) | 7,759 | (100) | (9,300) | ||||||||
Cubic Mission Solutions | ASU 2014-09 | ASC 605 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 327,139 | ||||||||||
Operating income (loss) | 7,244 | ||||||||||
Cubic Mission Solutions | ASU 2014-09 | ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 1,632 | ||||||||||
Operating income (loss) | 515 | ||||||||||
Cubic Global Defense | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 317,925 | 325,200 | 360,200 | ||||||||
Operating income (loss) | 22,969 | $ 16,600 | $ 28,100 | ||||||||
Cubic Global Defense | ASU 2014-09 | ASC 605 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 272,201 | ||||||||||
Operating income (loss) | 19,858 | ||||||||||
Cubic Global Defense | ASU 2014-09 | ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Net sales | 45,724 | ||||||||||
Operating income (loss) | $ 3,111 |
Implementation of the New Rev_7
Implementation of the New Revenue Recognition Standard - Impact on Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Oct. 01, 2018 | Sep. 30, 2018 | Sep. 30, 2017 |
Current assets: | ||||
Accounts receivable, net | $ 126,014 | $ 155,624 | $ 392,367 | |
Contract assets | 349,559 | 272,210 | ||
Recoverable income taxes | 7,754 | 91 | 91 | |
Inventories | 106,794 | 61,688 | 84,199 | |
Assets held for sale | 8,177 | 8,177 | ||
Other current assets | 43,705 | 43,705 | ||
Total current assets | 724,309 | 681,103 | 668,147 | |
Long-term contracts receivables | 6,134 | |||
Property, plant and equipment, net | 144,969 | 117,546 | 117,546 | |
Deferred income taxes | 4,098 | 5,102 | 4,713 | |
Goodwill | 578,097 | 333,626 | 333,626 | $ 321,562 |
Purchased intangibles, net | 165,613 | 73,533 | 73,533 | |
Other assets | 76,872 | |||
Total assets | 1,847,170 | 1,321,130 | 1,304,883 | $ 1,336,300 |
Current liabilities: | ||||
Short-term borrowings | 195,500 | |||
Contract liabilities | 46,170 | 70,127 | ||
Customer advances | 75,941 | |||
Accrued compensation | 58,343 | 65,277 | ||
Income taxes payable | 773 | 8,586 | 8,586 | |
Current portion of long-term debt | 10,714 | |||
Total current liabilities | 529,159 | 320,097 | 328,339 | |
Long-term debt | 189,111 | 199,793 | ||
Accrued pension liability | 25,386 | 7,802 | 7,802 | |
Deferred compensation | 11,040 | 11,476 | 11,476 | |
Income taxes payable | 937 | 2,406 | 2,406 | |
Deferred income taxes | 4,554 | 2,689 | 2,689 | |
Shareholders' equity: | ||||
Common stock | 274,472 | 45,008 | 45,008 | |
Retained earnings | 862,948 | 821,668 | 801,834 | |
Accumulated other comprehensive loss | (139,693) | (110,643) | (110,643) | |
Treasury stock at cost | (36,078) | (36,078) | (36,078) | |
Shareholders' equity related to Cubic | 961,649 | 719,955 | 700,121 | |
Noncontrolling interest in VIE | 18,919 | 28,730 | 24,075 | |
Total shareholders' equity | 980,568 | 748,685 | 724,196 | |
Total liabilities and shareholders' equity | 1,847,170 | 1,321,130 | 1,304,883 | |
ASU 2014-09 | ASC 605 | ||||
Current assets: | ||||
Accounts receivable, net | 399,639 | |||
Recoverable income taxes | 6,725 | |||
Inventories | 158,713 | |||
Total current assets | 699,265 | |||
Long-term contracts receivables | 3,077 | |||
Property, plant and equipment, net | 144,969 | |||
Deferred income taxes | 4,098 | |||
Goodwill | 578,097 | |||
Purchased intangibles, net | 165,613 | |||
Other assets | 76,872 | |||
Total assets | 1,812,759 | |||
Current liabilities: | ||||
Short-term borrowings | 195,500 | |||
Customer advances | 56,001 | |||
Accrued compensation | 58,343 | |||
Income taxes payable | 152 | |||
Current portion of long-term debt | 10,714 | |||
Total current liabilities | 540,267 | |||
Accrued pension liability | 25,386 | |||
Deferred compensation | 11,040 | |||
Income taxes payable | 937 | |||
Deferred income taxes | 4,554 | |||
Shareholders' equity: | ||||
Common stock | 274,472 | |||
Retained earnings | 834,349 | |||
Accumulated other comprehensive loss | (139,693) | |||
Treasury stock at cost | (36,078) | |||
Shareholders' equity related to Cubic | 933,050 | |||
Noncontrolling interest in VIE | 1,999 | |||
Total shareholders' equity | 935,049 | |||
Total liabilities and shareholders' equity | 1,812,759 | |||
ASU 2014-09 | ASC 606 | ||||
Current assets: | ||||
Accounts receivable, net | (273,625) | (236,743) | ||
Contract assets | 349,559 | 272,210 | ||
Recoverable income taxes | 1,029 | |||
Inventories | (51,919) | (22,511) | ||
Total current assets | 25,044 | 12,956 | ||
Long-term contracts receivables | (3,077) | (6,134) | ||
Deferred income taxes | 389 | |||
Total assets | 34,411 | 16,247 | ||
Current liabilities: | ||||
Contract liabilities | 46,170 | 70,127 | ||
Customer advances | (56,001) | (75,941) | ||
Income taxes payable | 621 | |||
Total current liabilities | (11,108) | (8,242) | ||
Shareholders' equity: | ||||
Retained earnings | 28,599 | 19,834 | ||
Shareholders' equity related to Cubic | 28,599 | 19,834 | ||
Noncontrolling interest in VIE | 16,920 | 4,655 | ||
Total shareholders' equity | 45,519 | 24,489 | ||
Total liabilities and shareholders' equity | 34,411 | 16,247 | ||
Cubic Corporation Excluding VIE | ||||
Current assets: | ||||
Cash and cash equivalents | 65,800 | 111,834 | 111,834 | |
Restricted cash | 19,507 | 17,400 | 17,400 | |
Other current assets | 38,534 | 43,705 | ||
Long-term contracts financing receivables | 36,285 | 56,228 | ||
Long-term capitalized contract costs | 84,924 | |||
Other assets | 76,872 | 14,192 | 14,192 | |
Current liabilities: | ||||
Trade accounts payable | 180,773 | 122,403 | 125,414 | |
Other current liabilities | 36,670 | 52,956 | ||
Long-term debt | 189,110 | 199,793 | 199,793 | |
Other long term liabilities | 22,817 | 19,113 | 19,113 | |
Cubic Corporation Excluding VIE | ASU 2014-09 | ASC 605 | ||||
Current assets: | ||||
Cash and cash equivalents | 65,800 | |||
Restricted cash | 19,507 | |||
Other current assets | 38,534 | |||
Long-term capitalized contract costs | 136,804 | |||
Current liabilities: | ||||
Trade accounts payable | 182,671 | |||
Other current liabilities | 36,670 | |||
Long-term debt | 189,110 | |||
Other long term liabilities | 22,817 | |||
Cubic Corporation Excluding VIE | ASU 2014-09 | ASC 606 | ||||
Current assets: | ||||
Long-term contracts financing receivables | 36,285 | 56,228 | ||
Long-term capitalized contract costs | (136,804) | (84,924) | ||
Current liabilities: | ||||
Trade accounts payable | (1,898) | (3,011) | ||
OpCo. | ||||
Current assets: | ||||
Cash and cash equivalents | 347 | 374 | 374 | |
Restricted cash | 9,967 | 10,000 | 10,000 | |
Other current assets | 33 | |||
Long-term contracts financing receivables | 115,508 | 38,990 | ||
Long-term capitalized contract costs | 1,258 | |||
Other assets | 1,419 | 810 | 810 | |
Current liabilities: | ||||
Trade accounts payable | 25 | 165 | 165 | |
Other current liabilities | 191 | |||
Long-term debt | 61,994 | 9,056 | 9,056 | |
Other long term liabilities | 21,605 | $ 13 | 13 | |
OpCo. | ASU 2014-09 | ASC 605 | ||||
Current assets: | ||||
Cash and cash equivalents | 347 | |||
Restricted cash | 9,967 | |||
Other current assets | 33 | |||
Long-term capitalized contract costs | 2,545 | |||
Other assets | 1,419 | |||
Current liabilities: | ||||
Trade accounts payable | 25 | |||
Other current liabilities | 191 | |||
Long-term debt | 61,994 | |||
Other long term liabilities | 21,605 | |||
OpCo. | ASU 2014-09 | ASC 606 | ||||
Current assets: | ||||
Long-term contracts financing receivables | 115,508 | 38,990 | ||
Long-term capitalized contract costs | $ (2,545) | $ (1,258) |
Acquisitions and Divestitures -
Acquisitions and Divestitures - CGD Services - Income (loss) from discontinued operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||
Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Jun. 30, 2018 | Apr. 18, 2018 | |
Costs and expenses: | ||||||
Net income (loss) from discontinued operations | $ (1,423) | $ 4,243 | $ 14,531 | |||
Cubic Global Defense Services | Disposed of by sale | ||||||
Divestitures | ||||||
Consideration from sale | $ 133,800 | $ 135,000 | ||||
Working capital settlement receivable | 3,700 | |||||
Increase (decrease) in working capital settlement receivable | (1,400) | |||||
Receivable for estimated earn-out amount due from purchaser | 3,000 | |||||
Receivable for estimated amount due from purchaser | 0 | |||||
Income (loss) from discontinued operations | ||||||
Net sales | 262,228 | 378,152 | ||||
Costs and expenses: | ||||||
Cost of sales | 235,279 | 342,819 | ||||
Selling, general and administrative expenses | 11,365 | 17,487 | ||||
Amortization of purchased intangibles | 1,373 | 2,752 | ||||
Restructuring costs | 7 | 208 | ||||
Other income | (15) | (46) | ||||
Earnings from discontinued operations before income taxes | 14,219 | 14,932 | ||||
Net (gain) loss on sale | $ 6,900 | 1,423 | 6,131 | |||
Income tax (benefit) provision | 3,845 | 401 | ||||
Net income (loss) from discontinued operations | $ (1,423) | $ 4,243 | $ 14,531 |
Acquisitions and Divestitures_2
Acquisitions and Divestitures - PIXIA Corp (Details) - PIXIA Corp - USD ($) $ in Millions | Jun. 27, 2019 | Sep. 30, 2019 |
Equity method investment | ||
Purchase price of capital stock | $ 50 | |
Ownership percentage | 20.00% | |
Option to purchase remaining percentage of capital stock | 80.00% | |
Cost to purchase remaining capital stock | $ 200 | |
Intangible assets from equity method investment | $ 17 | $ 15.4 |
Useful life | 5 years | |
Goodwill from equity method investment | 32.3 | |
Operating results from equity method investment | 1.2 | |
Dividend from equity method investment | 2 | |
Equity Method Investments | $ 49.2 |
Acquisitions and Divestitures_3
Acquisitions and Divestitures - Delerrok Inc. (Details) - Delerrok Inc. - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 |
Equity method investment | ||
Purchase price of capital stock | $ 5 | $ 1.5 |
Ownership percentage | 17.50% | |
Option to purchase remaining percentage of capital stock | 82.50% | |
Additional contingent cash consideration to be paid | $ 2 | |
Cost to purchase remaining capital stock | 36.4 | |
Equity Method Investments | $ 6.5 |
Acquisitions and Divestitures_4
Acquisitions and Divestitures - Consolidated Business Acquisitions (Details) - USD ($) $ in Thousands | Feb. 21, 2018 | Mar. 31, 2019 | Jan. 31, 2019 | Oct. 31, 2018 | Jul. 31, 2018 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2018 | Oct. 31, 2017 |
Acquisitions | ||||||||||||||||||
Compensation expense | $ 15,488 | $ 7,515 | $ 5,012 | |||||||||||||||
Sales and results of operations | ||||||||||||||||||
Sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | 1,496,475 | 1,202,898 | 1,107,709 | |||||||
Operating income (loss) | 58,619 | 34,725 | (6,541) | (566) | 27,673 | 10,290 | (1,679) | (11,902) | 86,237 | 24,382 | 2,628 | |||||||
Net income (loss) after taxes | 41,763 | $ 23,910 | (9,392) | $ (6,587) | 17,816 | $ 6,291 | $ (2,011) | $ (9,786) | 49,694 | 12,310 | (11,209) | |||||||
Loss (gain) for changes in fair values of contingent consideration | (1,005) | 1,029 | (3,878) | |||||||||||||||
Purchase price allocation | ||||||||||||||||||
Goodwill | 578,097 | $ 333,626 | 578,097 | 333,626 | 321,562 | $ 333,626 | ||||||||||||
Estimated amortization expense related to the intangible assets | ||||||||||||||||||
2020 | 36,437 | 36,437 | ||||||||||||||||
2021 | 30,454 | 30,454 | ||||||||||||||||
2022 | 26,774 | 26,774 | ||||||||||||||||
2023 | 19,504 | 19,504 | ||||||||||||||||
2024 | 16,976 | 16,976 | ||||||||||||||||
Thereafter | 35,468 | 35,468 | ||||||||||||||||
Nuvotronics | ||||||||||||||||||
Sales and results of operations | ||||||||||||||||||
Sales | 7,400 | |||||||||||||||||
Operating income (loss) | (6,900) | |||||||||||||||||
Net income (loss) after taxes | (6,900) | |||||||||||||||||
Amortization | 1,200 | |||||||||||||||||
Acquisition-related expenses | $ 3,000 | |||||||||||||||||
Estimated acquisition-date fair value of consideration | ||||||||||||||||||
Fair value of consideration transferred | $ 66,800 | |||||||||||||||||
Cash consideration paid | 61,500 | |||||||||||||||||
Contingent consideration | 4,900 | 4,900 | ||||||||||||||||
Estimated Payable | 400 | 400 | ||||||||||||||||
Period for contingent consideration contracts | 12 months | |||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Accounts receivable and contract assets | 2,600 | 2,600 | ||||||||||||||||
Fixed assets | 2,700 | 2,700 | ||||||||||||||||
Accounts payable and accrued expenses | (1,800) | (1,800) | ||||||||||||||||
Deferred taxes | (3,200) | (3,200) | ||||||||||||||||
Other net assets acquired (liabilities assumed) | 600 | 600 | ||||||||||||||||
Net identifiable assets acquired | 26,400 | 26,400 | ||||||||||||||||
Goodwill | 40,400 | 40,400 | ||||||||||||||||
Net assets acquired | $ 66,800 | 66,800 | ||||||||||||||||
Weighted average useful life of intangible assets | 9 years | |||||||||||||||||
Estimated amortization expense related to the intangible assets | ||||||||||||||||||
2020 | 4,000 | $ 4,000 | ||||||||||||||||
2021 | 3,000 | 3,000 | ||||||||||||||||
2022 | 3,000 | 3,000 | ||||||||||||||||
2023 | 2,900 | 2,900 | ||||||||||||||||
2024 | 2,700 | 2,700 | ||||||||||||||||
Thereafter | 10,100 | 10,100 | ||||||||||||||||
Nuvotronics | Maximum | ||||||||||||||||||
Estimated acquisition-date fair value of consideration | ||||||||||||||||||
Contingent consideration | $ 8,000 | 8,000 | 8,000 | 8,000 | ||||||||||||||
Nuvotronics | Trade names | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Indefinite intangible assets | 1,500 | 1,500 | ||||||||||||||||
Nuvotronics | Technology | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Amortizable intangible assets | 22,700 | 22,700 | ||||||||||||||||
Nuvotronics | Customer relationships | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Amortizable intangible assets | 600 | 600 | ||||||||||||||||
Nuvotronics | Backlog | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Amortizable intangible assets | 1,400 | 1,400 | ||||||||||||||||
Nuvotronics | Non-compete agreements | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Amortizable intangible assets | $ 500 | $ 500 | ||||||||||||||||
GRIDSMART | ||||||||||||||||||
Sales and results of operations | ||||||||||||||||||
Sales | 20,600 | |||||||||||||||||
Operating income (loss) | 900 | |||||||||||||||||
Net income (loss) after taxes | 900 | |||||||||||||||||
Amortization | 4,000 | |||||||||||||||||
Acquisition-related expenses | 2,900 | |||||||||||||||||
Estimated acquisition-date fair value of consideration | ||||||||||||||||||
Fair value of consideration transferred | $ 86,800 | |||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Accounts receivable | 1,700 | |||||||||||||||||
Inventory | 4,300 | |||||||||||||||||
Accounts payable and accrued expenses | (1,900) | |||||||||||||||||
Deferred taxes | (3,300) | |||||||||||||||||
Other net assets acquired (liabilities assumed) | 600 | |||||||||||||||||
Net identifiable assets acquired | 33,100 | |||||||||||||||||
Goodwill | 53,700 | |||||||||||||||||
Net assets acquired | $ 86,800 | |||||||||||||||||
Weighted average useful life of intangible assets | 8 years | |||||||||||||||||
Estimated amortization expense related to the intangible assets | ||||||||||||||||||
2020 | 5,300 | 5,300 | ||||||||||||||||
2021 | 3,900 | 3,900 | ||||||||||||||||
2022 | 3,500 | 3,500 | ||||||||||||||||
2023 | 3,500 | 3,500 | ||||||||||||||||
2024 | 3,500 | 3,500 | ||||||||||||||||
Thereafter | 8,100 | 8,100 | ||||||||||||||||
GRIDSMART | Trade names | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Indefinite intangible assets | $ 2,400 | |||||||||||||||||
GRIDSMART | Technology | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Amortizable intangible assets | 25,700 | |||||||||||||||||
GRIDSMART | Customer relationships | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Amortizable intangible assets | $ 3,600 | |||||||||||||||||
Trafficware | ||||||||||||||||||
Sales and results of operations | ||||||||||||||||||
Sales | 53,800 | |||||||||||||||||
Operating income (loss) | (11,000) | |||||||||||||||||
Net income (loss) after taxes | (11,000) | |||||||||||||||||
Amortization | 15,300 | |||||||||||||||||
Acquisition-related expenses | 5,200 | |||||||||||||||||
Estimated acquisition-date fair value of consideration | ||||||||||||||||||
Fair value of consideration transferred | $ 237,200 | |||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Accounts receivable | 10,400 | |||||||||||||||||
Inventory | 9,900 | |||||||||||||||||
Accounts payable and accrued expenses | (8,900) | |||||||||||||||||
Other net assets acquired (liabilities assumed) | 2,000 | |||||||||||||||||
Net identifiable assets acquired | 84,000 | |||||||||||||||||
Goodwill | 153,200 | |||||||||||||||||
Net assets acquired | $ 237,200 | |||||||||||||||||
Weighted average useful life of intangible assets | 7 years | |||||||||||||||||
Estimated amortization expense related to the intangible assets | ||||||||||||||||||
2020 | 11,400 | 11,400 | ||||||||||||||||
2021 | 11,400 | 11,400 | ||||||||||||||||
2022 | 11,400 | 11,400 | ||||||||||||||||
2023 | 6,400 | 6,400 | ||||||||||||||||
2024 | 5,900 | 5,900 | ||||||||||||||||
Thereafter | 12,900 | 12,900 | ||||||||||||||||
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 | |||||||||||||||||
Trafficware | Backlog | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Amortizable intangible assets | $ 4,800 | |||||||||||||||||
Shield Aviation | ||||||||||||||||||
Sales and results of operations | ||||||||||||||||||
Operating income (loss) | (5,300) | (800) | ||||||||||||||||
Net income (loss) after taxes | (5,300) | (600) | ||||||||||||||||
Amortization | 800 | 100 | ||||||||||||||||
Loss (gain) for changes in fair values of contingent consideration | (1,800) | 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 | ||||||||||||||||||
2020 | 800 | 800 | ||||||||||||||||
2021 | 800 | 800 | ||||||||||||||||
2022 | 800 | 800 | ||||||||||||||||
2023 | 800 | 800 | ||||||||||||||||
2024 | 800 | 800 | ||||||||||||||||
Thereafter | 1,400 | 1,400 | ||||||||||||||||
Shield Aviation | Maximum | ||||||||||||||||||
Estimated acquisition-date fair value of consideration | ||||||||||||||||||
Contingent consideration | 10,000 | 10,000 | 10,000 | |||||||||||||||
Shield Aviation | Technology | ||||||||||||||||||
Purchase price allocation | ||||||||||||||||||
Amortizable intangible assets | $ 6,000 | |||||||||||||||||
Weighted average useful life of intangible assets | 8 years | |||||||||||||||||
MotionDSP | ||||||||||||||||||
Sales and results of operations | ||||||||||||||||||
Sales | 1,500 | 600 | ||||||||||||||||
Operating income (loss) | (600) | (2,700) | ||||||||||||||||
Net income (loss) after taxes | (600) | (1,900) | ||||||||||||||||
Amortization | 700 | 400 | ||||||||||||||||
Acquisition-related expenses | 400 | $ 800 | $ 200 | |||||||||||||||
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 | ||||||||||||||||||
2020 | 700 | 700 | ||||||||||||||||
2021 | 700 | 700 | ||||||||||||||||
2022 | 700 | 700 | ||||||||||||||||
2023 | 700 | 700 | ||||||||||||||||
2024 | 600 | 600 | ||||||||||||||||
Thereafter | $ 200 | $ 200 | ||||||||||||||||
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 | |||||||||||||||||
MotionDSP | ||||||||||||||||||
Acquisitions | ||||||||||||||||||
Purchase price of capital stock | $ 4,700 | |||||||||||||||||
Ownership percentage | 49.00% |
Acquisitions and Divestitures_5
Acquisitions and Divestitures - Pro forma information (Details) - USD ($) $ in Millions | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Acquisitions and Divestitures | ||
Net sales | $ 1,510.8 | $ 1,297.6 |
Net loss from continuing operations | 45.1 | $ (5) |
Adjustments made for transaction expenses | $ 0 |
Variable Interest Entities - Na
Variable Interest Entities - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Oct. 01, 2018 | |
Revenue recognition | ||||
Borrowings outstanding | $ 39,900 | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-10-01 | ||||
Revenue recognition | ||||
Contract term | 12 months | |||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | ||||
Revenue recognition | ||||
Contract term | 24 months | |||
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 | $ 19,507 | $ 17,400 | $ 17,400 | |
Long-term capitalized contract costs | 84,924 | |||
OpCo. | ||||
Revenue recognition | ||||
Restricted cash | 9,967 | 10,000 | $ 10,000 | |
Long-term capitalized contract costs | 1,258 | |||
OpCo. | Interest Rate Swaps | Not Designated as Hedging Instrument | ||||
Revenue recognition | ||||
Notional principal outstanding derivative instruments | 137,400 | 38,600 | ||
Fair value interest rate swaps | 21,600 | 0 | ||
Unrealized loss due to fair value changes | 21,600 | $ 0 | ||
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 | |||
Carrying value | 62,000 | |||
Unamortized Debt Issuance Expense | 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 | |||
P3 Joint Venture | ||||
Revenue recognition | ||||
Maximum exposure to loss | 2,700 | |||
Cubic Transportation Systems | OpCo. | ||||
Revenue recognition | ||||
Expected contract revenue | $ 427,600 | |||
Cubic Transportation Systems | HoldCo. | ||||
Revenue recognition | ||||
Ownership percentage | 10.00% | |||
Cubic Transportation Systems | HoldCo. | Letter of credit agreement | ||||
Revenue recognition | ||||
Maximum borrowing capacity under credit agreement | $ 2,700 | |||
Borrowings outstanding | $ 0 | |||
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 | ||||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2018 | |
ASSETS | ||||||||||||
Other current assets | $ 43,705 | $ 43,705 | $ 43,705 | |||||||||
Other noncurrent assets | $ 76,872 | $ 76,872 | ||||||||||
Total assets | 1,847,170 | 1,304,883 | 1,847,170 | 1,304,883 | $ 1,336,300 | 1,321,130 | ||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Accrued compensation and other current liabilities | 118,233 | 118,233 | 118,816 | |||||||||
Long-term debt | 189,111 | 199,793 | 189,111 | 199,793 | ||||||||
Shareholders' equity related to Cubic | 961,649 | 700,121 | 961,649 | 700,121 | 719,955 | |||||||
Noncontrolling interest in VIE | 18,919 | 24,075 | 18,919 | 24,075 | 28,730 | |||||||
Total liabilities and shareholders' equity | 1,847,170 | 1,304,883 | 1,847,170 | 1,304,883 | $ 1,321,130 | |||||||
Revenue | 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | 1,496,475 | 1,202,898 | 1,107,709 | |
Operating income (loss) | 58,619 | $ 34,725 | $ (6,541) | $ (566) | 27,673 | $ 10,290 | $ (1,679) | $ (11,902) | 86,237 | 24,382 | 2,628 | |
Other income (expense), net | (19,957) | (687) | $ 364 | |||||||||
VIE | ||||||||||||
ASSETS | ||||||||||||
Cash | 347 | 374 | 347 | 374 | ||||||||
Restricted cash | 9,967 | 10,000 | 9,967 | 10,000 | ||||||||
Other current assets | 33 | 33 | ||||||||||
Long-term capitalized contract costs | 33,818 | 33,818 | ||||||||||
Long-term contracts financing receivables | 115,508 | 115,508 | ||||||||||
Other noncurrent assets | 1,419 | 810 | 1,419 | 810 | ||||||||
Total assets | 127,274 | 45,002 | 127,274 | 45,002 | ||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
Trade accounts payable | 25 | 165 | 25 | 165 | ||||||||
Accrued compensation and other current liabilities | 191 | 191 | ||||||||||
Due to Cubic | 25,143 | 11,724 | 25,143 | 11,724 | ||||||||
Other long term liabilities | 21,605 | 13 | 21,605 | 13 | ||||||||
Long-term debt | 61,994 | 9,056 | 61,994 | 9,056 | ||||||||
Total liabilities | 108,958 | 20,958 | 108,958 | 20,958 | ||||||||
Shareholders' equity related to Cubic | (603) | (304) | (603) | (304) | ||||||||
Noncontrolling interest in VIE | 18,919 | 24,348 | 18,919 | 24,348 | ||||||||
Total liabilities and shareholders' equity | $ 127,274 | $ 45,002 | 127,274 | $ 45,002 | ||||||||
Revenue | 11,211 | |||||||||||
Operating income (loss) | 9,923 | |||||||||||
Other income (expense), net | (21,592) | |||||||||||
Interest income | 3,704 | |||||||||||
Interest Expense | $ (2,946) |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments - Recurring Basis (Details) - Assets and liabilities measured at fair value - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Assets | ||
Cash equivalents | $ 9,000 | |
Current derivative assets | $ 2,635 | 1,803 |
Noncurrent derivative assets | 859 | 314 |
Total assets measured at fair value | 3,494 | 11,117 |
Liabilities | ||
Current derivative liabilities | 529 | 1,657 |
Noncurrent derivative liabilities | 228 | 75 |
Total liabilities measured at fair value | 11,631 | 10,846 |
Deltenna | ||
Liabilities | ||
Contingent consideration to seller | 1,787 | 1,081 |
Shield Aviation | ||
Liabilities | ||
Contingent consideration to seller | 3,814 | 5,618 |
H4 Global | ||
Liabilities | ||
Contingent consideration to seller | 1,073 | 665 |
Nuvotronics | ||
Liabilities | ||
Contingent consideration to seller | 4,200 | |
Revenue Targets | TeraLogics | ||
Liabilities | ||
Contingent consideration to seller | 1,750 | |
Level 1 | ||
Assets | ||
Cash equivalents | 9,000 | |
Total assets measured at fair value | 9,000 | |
Level 2 | ||
Assets | ||
Current derivative assets | 2,635 | 1,803 |
Noncurrent derivative assets | 859 | 314 |
Total assets measured at fair value | 3,494 | 2,117 |
Liabilities | ||
Current derivative liabilities | 529 | 1,657 |
Noncurrent derivative liabilities | 228 | 75 |
Total liabilities measured at fair value | 757 | 1,732 |
Level 3 | ||
Liabilities | ||
Total liabilities measured at fair value | 10,874 | 9,114 |
Level 3 | Deltenna | ||
Liabilities | ||
Contingent consideration to seller | 1,787 | 1,081 |
Level 3 | Shield Aviation | ||
Liabilities | ||
Contingent consideration to seller | 3,814 | 5,618 |
Level 3 | H4 Global | ||
Liabilities | ||
Contingent consideration to seller | 1,073 | 665 |
Level 3 | Nuvotronics | ||
Liabilities | ||
Contingent consideration to seller | $ 4,200 | |
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 | 12 Months Ended | |||
Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($) | Jul. 31, 2018USD ($) | |
Franklin Blackhorse, L.P | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Investment | $ 5,000 | |||
Franklin Blackhorse, L.P | Other Assets | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Investment | 5,300 | |||
Franklin Blackhorse, L.P | Other income (expense) | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Income (Loss) from Equity Method Investments | 300 | |||
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 2 | ||||
Debt instruments | ||||
Fair Value | 203,300 | $ 193,700 | ||
Carrying value | 200,000 | 200,000 | ||
Level 3 | ||||
Change in fair value of our Level 3 contingent consideration | ||||
Balance at the Beginning period | 9,114 | 5,217 | ||
Initial measurement recognized at acquisition | 4,900 | 5,618 | ||
Cash paid to seller | (2,135) | (2,750) | ||
Total remeasurement (gain) loss recognized in earnings | (1,005) | 1,029 | ||
Balance at the ending period | 10,874 | 9,114 | ||
Deltenna | Level 3 | ||||
Change in fair value of our Level 3 contingent consideration | ||||
Balance at the Beginning period | 1,081 | 1,376 | ||
Total remeasurement (gain) loss recognized in earnings | 706 | (295) | ||
Balance at the ending period | 1,787 | $ 1,081 | ||
Deltenna | Maximum | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Contingent consideration | $ 6,600 | |||
Deltenna | Volatility for underlying revenue metrics | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Measurement inputs for contingent consideration | 36 | 53 | ||
Deltenna | Discount Rate | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Measurement inputs for contingent consideration | 11 | 11.5 | ||
Shield Aviation | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Contingent consideration | $ 5,600 | |||
Determination of fair value of contingent consideration | item | 1,000,000 | |||
Revenue risk adjustment used in determination of fair value of contingent consideration | 13.10% | 14.50% | ||
Shield Aviation | Level 3 | ||||
Change in fair value of our Level 3 contingent consideration | ||||
Balance at the Beginning period | $ 5,618 | |||
Initial measurement recognized at acquisition | $ 5,618 | |||
Total remeasurement (gain) loss recognized in earnings | (1,804) | |||
Balance at the ending period | 3,814 | $ 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 | ||||
Volatility for underlying earnings metrics used in determination of fair value of contingent consideration | 18.00% | 20.00% | ||
Shield Aviation | Discount Rate | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Measurement inputs for contingent consideration | 3.6 | 3.9 | ||
TeraLogics | Level 3 | Revenue Targets | ||||
Change in fair value of our Level 3 contingent consideration | ||||
Balance at the Beginning period | $ 1,750 | $ 2,450 | ||
Cash paid to seller | $ (1,750) | (1,750) | ||
Total remeasurement (gain) loss recognized in earnings | 1,050 | |||
Balance at the ending period | 1,750 | |||
TeraLogics | Level 3 | Contract extensions | ||||
Change in fair value of our Level 3 contingent consideration | ||||
Balance at the Beginning period | 800 | |||
Cash paid to seller | (1,000) | |||
Total remeasurement (gain) loss recognized in earnings | 200 | |||
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 | 591 | ||
Cash paid to seller | (385) | |||
Total remeasurement (gain) loss recognized in earnings | 793 | 74 | ||
Balance at the ending period | 1,073 | $ 665 | ||
H4 Global | Maximum | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Contingent consideration | $ 2,700 | |||
Nuvotronics | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Contingent consideration | $ 4,900 | |||
Determination of fair value of contingent consideration | item | 1,000,000 | |||
Period for contingent consideration contracts | 12 months | |||
Nuvotronics | Level 3 | ||||
Change in fair value of our Level 3 contingent consideration | ||||
Initial measurement recognized at acquisition | $ 4,900 | |||
Total remeasurement (gain) loss recognized in earnings | (700) | |||
Balance at the ending period | 4,200 | |||
Nuvotronics | Maximum | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Contingent consideration | $ 8,000 | $ 8,000 | ||
Nuvotronics | Volatility for underlying revenue metrics | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Volatility for underlying earnings metrics used in determination of fair value of contingent consideration | 12.40% | |||
Nuvotronics | Discount Rate | ||||
Assets and liabilities measured at fair value on a recurring basis | ||||
Measurement inputs for contingent consideration | 7.4 |
Contract Assets and Liabiliti_3
Contract Assets and Liabilities (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Oct. 01, 2018 | |
Contract Assets and Liabilities | ||
Contract assets | $ 349,559 | $ 272,210 |
Contract liabilities | 46,170 | $ 70,127 |
Increase (decrease) in contract asset | 77,300 | |
Impairment losses related to contract assets | 0 | |
Increase (decrease) in contract liabilities | (24,000) | |
Revenue recognized included in contract liability at beginning of quarter | $ 62,400 |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Oct. 01, 2018 | Sep. 30, 2018 | |
Accounts receivable | |||
Billed | $ 127,406 | $ 156,948 | |
Unbilled | 242,877 | ||
Allowance for doubtful accounts | (1,392) | (1,324) | |
Total accounts receivables | 126,014 | 398,501 | |
Less unbilled amounts not currently due--commercial customers | (6,134) | ||
Current accounts receivable | 126,014 | $ 155,624 | 392,367 |
Trade receivables sold to a financial institution | 31,100 | ||
U.S. federal government contracts | |||
Accounts receivable | |||
Billed | $ 60,300 | $ 80,500 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Oct. 01, 2018 | Sep. 30, 2018 |
Inventories | |||
Finished products | $ 10,905 | $ 7,099 | |
Work in process and inventoried costs under long-term contracts | 46,951 | 63,169 | |
Materials and purchased parts | 48,938 | 23,710 | |
Customer advances | (9,779) | ||
Net inventories | 106,794 | $ 61,688 | 84,199 |
Costs incurred outside the scope of work or in advance of a contract award | 5,800 | 900 | |
General and administrative amounts for certain government contracts remaining in inventory | $ 500 | $ 2,000 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | 60 Months Ended | |||
Jun. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2019 | Oct. 01, 2018 | |
PROPERTY, PLANT AND EQUIPMENT | ||||||
Accumulated depreciation and amortization | $ (160,271) | $ (144,782) | $ (160,271) | |||
Property, plant and equipment - net | 144,969 | 117,546 | 144,969 | $ 117,546 | ||
Proceeds from sale of property | $ 44,900 | 44,891 | ||||
Gain on sale of real estate | $ 32,500 | 32,510 | $ (405) | |||
Development expense | 50,132 | 52,398 | 52,652 | |||
Depreciation of plant and equipment and amortization of leasehold improvements | 22,600 | 19,500 | 17,800 | |||
Land and land improvements | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Property, plant and equipment, Gross | 7,348 | 13,132 | 7,348 | |||
Buildings and improvements | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Property, plant and equipment, Gross | $ 48,191 | 57,959 | $ 48,191 | |||
Buildings and improvements | Minimum | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Estimated life (years) | 15 years | |||||
Buildings and improvements | Maximum | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Estimated life (years) | 39 years | |||||
Two Buildings on Existing Campus | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Lease term | 5 years | 5 years | ||||
Machinery and other equipment | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Property, plant and equipment, Gross | $ 107,297 | 81,727 | $ 107,297 | |||
Machinery and other equipment | Minimum | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Estimated life (years) | 5 years | |||||
Machinery and other equipment | Maximum | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Estimated life (years) | 10 years | |||||
Software | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Property, plant and equipment, Gross | $ 108,526 | 84,631 | 108,526 | |||
Costs related to the purchase and development of software | 3,100 | 22,500 | 40,600 | 138,900 | ||
Addition to capitalized software expenses | 1,600 | 7,500 | 16,700 | |||
Development expense | $ 1,500 | 15,000 | $ 23,900 | |||
Software | Minimum | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Estimated life (years) | 3 years | |||||
Software | Maximum | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Estimated life (years) | 7 years | |||||
Leasehold improvements | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Property, plant and equipment, Gross | $ 17,064 | 11,991 | 17,064 | |||
Construction and internal-use software development in progress | ||||||
PROPERTY, PLANT AND EQUIPMENT | ||||||
Property, plant and equipment, Gross | $ 16,814 | $ 12,888 | $ 16,814 |
Goodwill and Purchased Intang_3
Goodwill and Purchased Intangible Assets - Goodwill (Details) $ in Thousands | Apr. 01, 2019USD ($) | Sep. 30, 2019USD ($)item | Sep. 30, 2018USD ($) |
Changes in the carrying amount of goodwill | |||
Net balances at the beginning of the period | $ 333,626 | $ 321,562 | |
Acquisitions | 247,380 | 13,750 | |
Foreign currency exchange rate changes | (2,909) | (1,686) | |
Net balance at the end of the period | $ 578,097 | 333,626 | |
Number of reporting segments | item | 3 | ||
Impairment of goodwill | $ 0 | ||
Cubic Transportation Systems | |||
Changes in the carrying amount of goodwill | |||
Net balances at the beginning of the period | 49,786 | 50,870 | |
Acquisitions | 206,988 | ||
Foreign currency exchange rate changes | (2,182) | (1,084) | |
Net balance at the end of the period | 254,592 | 49,786 | |
Cubic Mission Solutions | |||
Changes in the carrying amount of goodwill | |||
Net balances at the beginning of the period | 138,127 | ||
Reassignment of goodwill | $ 3,428 | 125,321 | |
Acquisitions | 40,392 | 13,085 | |
Foreign currency exchange rate changes | (523) | (279) | |
Net balance at the end of the period | 181,424 | 138,127 | |
Cubic Global Defense | |||
Changes in the carrying amount of goodwill | |||
Net balances at the beginning of the period | 145,713 | 270,692 | |
Reassignment of goodwill | (3,428) | (125,321) | |
Acquisitions | 665 | ||
Foreign currency exchange rate changes | (204) | (323) | |
Net balance at the end of the period | $ 142,081 | $ 145,713 | |
Deltenna | Cubic Mission Solutions | |||
Changes in the carrying amount of goodwill | |||
Reassignment of goodwill | 3,400 | ||
Deltenna | Cubic Global Defense | |||
Changes in the carrying amount of goodwill | |||
Reassignment of goodwill | $ (3,400) |
Goodwill and Purchased Intang_4
Goodwill and Purchased Intangible Assets - Intangible assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2018 | |
Purchased intangible assets | ||||
Gross Carrying Amount | $ 337,511 | $ 204,816 | ||
Accumulated Amortization | (171,898) | (131,283) | ||
Net Carrying Amount | 165,613 | 73,533 | $ 73,533 | |
Amortization expense | 42,106 | 27,064 | $ 30,245 | |
Expected amortization for purchased intangibles for each of the next five years | ||||
2020 | 36,437 | |||
2021 | 30,454 | |||
2022 | 26,774 | |||
2023 | 19,504 | |||
2024 | 16,976 | |||
Thereafter | 35,468 | |||
Total expected amortization for purchased intangibles | 165,613 | |||
Contract and program intangibles | ||||
Purchased intangible assets | ||||
Gross Carrying Amount | 181,903 | 151,965 | ||
Accumulated Amortization | (138,497) | (112,399) | ||
Net Carrying Amount | 43,406 | 39,566 | ||
Other purchased intangibles | ||||
Purchased intangible assets | ||||
Gross Carrying Amount | 155,608 | 52,851 | ||
Accumulated Amortization | (33,401) | (18,884) | ||
Net Carrying Amount | 122,207 | $ 33,967 | ||
Cubic Transportation Systems | ||||
Expected amortization for purchased intangibles for each of the next five years | ||||
2020 | 17,553 | |||
2021 | 16,025 | |||
2022 | 15,470 | |||
2023 | 10,353 | |||
2024 | 9,797 | |||
Thereafter | 21,531 | |||
Total expected amortization for purchased intangibles | 90,729 | |||
Cubic Mission Solutions | ||||
Expected amortization for purchased intangibles for each of the next five years | ||||
2020 | 18,884 | |||
2021 | 14,429 | |||
2022 | 11,304 | |||
2023 | 9,151 | |||
2024 | 7,179 | |||
Thereafter | 13,937 | |||
Total expected amortization for purchased intangibles | $ 74,884 |
Financing Arrangements (Details
Financing Arrangements (Details) $ in Thousands, £ in Millions | 1 Months Ended | 12 Months Ended | ||||||
Apr. 30, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Sep. 30, 2019GBP (£) | Feb. 02, 2016USD ($) | Jul. 17, 2015USD ($) | Mar. 31, 2013USD ($) | |
Financial arrangement | ||||||||
Long-term debt, gross | $ 200,000 | $ 200,000 | ||||||
Less unamortized debt issuance costs | (175) | (207) | ||||||
Less current portion | (10,714) | |||||||
Long-term debt | 189,111 | 199,793 | ||||||
Maturities of long-term debt | ||||||||
2020 | 10,700 | |||||||
2021 | 35,700 | |||||||
2022 | 35,700 | |||||||
2023 | 35,700 | |||||||
2024 | 35,700 | |||||||
Amount of interest paid | 16,800 | 10,000 | $ 14,800 | |||||
Short term borrowings | ||||||||
Borrowings outstanding | 39,900 | |||||||
Letters of Credit and bank guarantees outstanding | 39,900 | |||||||
Self-insurance liabilities | 7,400 | $ 8,600 | ||||||
Letters of credit primarily for self-insured liabilities | ||||||||
Short term borrowings | ||||||||
Letters of Credit and bank guarantees outstanding | 5,500 | |||||||
Fair value of instruments | 0 | |||||||
United Kingdom | ||||||||
Short term borrowings | ||||||||
Maximum borrowing capacity under credit agreement | 24,600 | £ 20 | ||||||
Borrowings outstanding | 0 | |||||||
Cash on deposit as collateral | $ 19,500 | |||||||
Senior unsecured notes | ||||||||
Financial arrangement | ||||||||
Interest rate (as a percent) | 3.35% | |||||||
Principal amount of debt instrument | $ 100,000 | |||||||
Short term borrowings | ||||||||
Variable interest rate (as a percent) | 0.50% | |||||||
Series A senior unsecured notes | ||||||||
Financial arrangement | ||||||||
Interest rate (as a percent) | 3.35% | 3.35% | 3.35% | |||||
Long-term debt, gross | $ 50,000 | $ 50,000 | ||||||
Series B senior unsecured notes | ||||||||
Financial arrangement | ||||||||
Interest rate (as a percent) | 3.35% | 3.35% | 3.35% | |||||
Long-term debt, gross | $ 50,000 | $ 50,000 | ||||||
Series C senior unsecured notes | ||||||||
Financial arrangement | ||||||||
Interest rate (as a percent) | 3.70% | 3.70% | 3.70% | 3.70% | ||||
Long-term debt, gross | $ 25,000 | $ 25,000 | ||||||
Principal amount of debt instrument | $ 25,000 | |||||||
Series D senior unsecured notes | ||||||||
Financial arrangement | ||||||||
Interest rate (as a percent) | 3.93% | 3.93% | 3.93% | 3.93% | ||||
Long-term debt, gross | $ 75,000 | $ 75,000 | ||||||
Principal amount of debt instrument | $ 75,000 | |||||||
Revolving credit agreement | ||||||||
Short term borrowings | ||||||||
Maximum borrowing capacity under credit agreement | $ 400,000 | 800,000 | ||||||
Borrowings outstanding | 195,500 | |||||||
Letters of credit outstanding | 31,500 | |||||||
Available amount under line of credit | $ 573,000 | |||||||
Weighted average interest rate on outstanding borrowings | 3.90% | 3.90% | ||||||
Debt issuance costs incurred | $ 1,900 | |||||||
Unamortized debt issuance costs | $ 1,200 | |||||||
Revolving credit agreement | Letters of credit and bank guarantees | ||||||||
Short term borrowings | ||||||||
Letters of credit outstanding | $ 31,500 | |||||||
Revolving credit agreement | LIBOR | Minimum | ||||||||
Short term borrowings | ||||||||
Variable interest rate (as a percent) | 1.00% | |||||||
Revolving credit agreement | LIBOR | Maximum | ||||||||
Short term borrowings | ||||||||
Variable interest rate (as a percent) | 2.00% | |||||||
Revolving credit agreement | Alternate Base Rate | ||||||||
Short term borrowings | ||||||||
Variable interest rate (as a percent) | 0.50% | |||||||
Revolving credit agreement | Adjusted LIBOR Rate | ||||||||
Short term borrowings | ||||||||
Variable interest rate (as a percent) | 1.00% | |||||||
Revolving credit agreement | Adjusted LIBOR Rate | Minimum | ||||||||
Short term borrowings | ||||||||
Margin interset rate (as a percent) | 0.00% | |||||||
Revolving credit agreement | Adjusted LIBOR Rate | Maximum | ||||||||
Short term borrowings | ||||||||
Margin interset rate (as a percent) | 1.00% | |||||||
Other credit facility | ||||||||
Short term borrowings | ||||||||
Letters of credit outstanding | $ 8,400 | |||||||
Letter of credit agreement | Performance guarantee | ||||||||
Short term borrowings | ||||||||
Letters of credit outstanding | $ 34,400 |
Financing Arrangements - underw
Financing Arrangements - underwritten public offering (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended |
Dec. 31, 2018 | Sep. 30, 2019 | |
Financing Arrangements | ||
Stock issued under equity offering, net (in shares) | 3,795,000 | 3,795,000 |
Stock offering price (per share) | $ 60 | |
Proceeds from equity offering, net | $ 215,800 | $ 215,832 |
Underwriting discounts and commissions and offering expenses | $ 11,900 |
Commitments (Details)
Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Commitments | |||
Sublease income | $ 200 | $ 200 | $ 200 |
Rental expense, net of sublease income | 13,300 | $ 11,600 | $ 10,500 |
Future minimum payments, net of minimum sublease income, under noncancelable operating leases | |||
2020 | 18,121 | ||
2021 | 17,218 | ||
2022 | 15,097 | ||
2023 | 13,250 | ||
2024 | 12,311 | ||
Thereafter | 37,926 | ||
Total future minimum payments, net of minimum sublease income | $ 113,923 | ||
Maximum | |||
Commitments | |||
Term of lease | 10 years |
Income Taxes - Components of in
Income Taxes - Components of income (loss) and provision for income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Components of income (loss) before income taxes | |||
United States | $ (535) | $ (51,049) | $ (70,566) |
Foreign | 52,881 | 65,935 | 59,484 |
Income (loss) from continuing operations before income taxes | 52,346 | 14,886 | (11,082) |
Current: | |||
Federal | (710) | (4,775) | (4,070) |
State | 2,898 | 976 | 878 |
Foreign | 10,523 | 19,882 | 13,869 |
Total current | 12,711 | 16,083 | 10,677 |
Deferred: | |||
Federal | (4,553) | (7,874) | 2,257 |
State | (135) | 482 | 569 |
Foreign | 3,017 | (1,598) | 1,155 |
Total deferred | (1,671) | (8,990) | 3,981 |
Provision for income taxes | $ 11,040 | $ 7,093 | $ 14,658 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of income tax and unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Reconciliation of income tax computed at the U.S. federal statutory tax rate to income tax expense | |||
Tax expense at U.S. statutory rate | $ 10,992 | $ 3,124 | $ (3,877) |
State income taxes, net of federal tax effect | 1,416 | (237) | (923) |
Nondeductible expenses | 1,720 | 1,186 | (185) |
Change in reserve for tax contingencies | (1,468) | (1,047) | (4,435) |
Change in deferred tax asset valuation allowance | (10,007) | 8,784 | 17,374 |
Foreign rate differential | 2,149 | 5,684 | 9,912 |
Tax credits | (4,767) | (2,656) | (3,459) |
Impact of U.S. Tax Reform | (7,053) | ||
Global Intangible Low-Tax Income | 8,182 | ||
Stock Based Compensation | (448) | 59 | 16 |
Non-controlling interest in equity arrangements | 1,802 | 99 | |
Other | 1,469 | (850) | 235 |
Provision for income taxes | $ 11,040 | 7,093 | 14,658 |
Tax charge from deferred taxes on unremitted foreign earnings | 3,500 | $ 9,500 | |
Additional tax expenses relating to foreign earnings after enactment | $ 2,100 |
Income Taxes - Deferred tax ass
Income Taxes - Deferred tax assets and liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Deferred tax assets: | ||
Accrued employee benefits | $ 11,409 | $ 8,285 |
Allowances for loss contingencies | 3,561 | 3,518 |
Deferred compensation | 3,071 | 3,272 |
Intangible assets | 1,361 | |
Inventory valuation | 8,036 | 1,154 |
Long-term contracts | 6,995 | 7,751 |
Prepaid and accrued expenses | 1,816 | 1,229 |
Retirement benefits | 4,967 | 1,398 |
Tax credit carryforwards | 33,118 | 35,137 |
Loss carryforwards | 36,248 | 29,097 |
Other | 818 | 264 |
Total gross deferred tax assets | 110,039 | 92,466 |
Valuation allowance | (69,098) | (81,838) |
Total deferred tax assets | 40,941 | 10,628 |
Deferred tax liabilities: | ||
Debt obligation basis difference | (4,582) | |
Deferred revenue | (12,135) | (2,351) |
Intangible assets | (18,592) | |
Property, plant and equipment | (4,524) | (5,079) |
Unremitted foreign earnings | (977) | (823) |
Other | (587) | (351) |
Total deferred tax liabilities | (41,397) | (8,604) |
Net deferred tax asset | $ 2,024 | |
Net deferred tax liabilities | $ (456) |
Income Taxes - Tax credit carry
Income Taxes - Tax credit carryforwards (Details) $ in Thousands | Sep. 30, 2019USD ($) |
U.S. | Foreign Tax Credits | |
Income tax credit carryforwards | |
Income tax credit carryforward | $ 14,535 |
U.S. | Research and Development Tax Credits | |
Income tax credit carryforwards | |
Income tax credit carryforward | 14,439 |
State | Research and Development Tax Credits | |
Income tax credit carryforwards | |
Income tax credit carryforward | $ 25,748 |
Income Taxes - Operating loss c
Income Taxes - Operating loss carryforwards (Details) $ in Thousands | Sep. 30, 2019USD ($) |
U.S. | |
Operating loss carryforwards | |
Operating Loss Carryforwards | $ 127,013 |
Capital loss carryforwards | 5,451 |
State | |
Operating loss carryforwards | |
Operating Loss Carryforwards | 55,619 |
Capital loss carryforwards | 23,038 |
Foreign | |
Operating loss carryforwards | |
Operating Loss Carryforwards | $ 13,548 |
Income Taxes - Tax valuation al
Income Taxes - Tax valuation allowance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Tax valuation allowance | ||
Deferred tax asset valuation allowance | $ 69,098 | $ 81,838 |
Change in valuation allowance | 12,700 | |
Net tax benefit before offset by amounts recorded through OCI | 10,000 | |
Deferred tax liability | 41,397 | $ 8,604 |
Foreign | ||
Tax valuation allowance | ||
Deferred tax liability | $ 1,000 |
Income Taxes - Unrecognized tax
Income Taxes - Unrecognized tax benefits (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Net changes in the liability for unrecognized tax benefits | |||
Balance at the beginning of the period | $ 9,942 | $ 13,248 | |
Additions (reductions) for tax positions taken in prior years | 8,458 | ||
Reductions for tax positions taken in prior years | (80) | ||
Recognition of benefits from expiration of statutes | (776) | (1,770) | |
Additions for tax positions related to the current year | 951 | 713 | |
Reductions for tax positions related to current year acquisitions | (2,169) | ||
Balance at the end of the period | 18,575 | 9,942 | $ 13,248 |
Unrecognized tax benefits from permanent tax adjustments that, if recognized, would affect the effective rate | 700 | 1,800 | |
Cash amounts paid for income taxes, net of refunds received | $ 28,700 | $ 15,700 | $ 1,600 |
Derivative Instruments and He_3
Derivative Instruments and Hedging Activities - Notional principal amounts (Details) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019USD ($)building | Sep. 30, 2018USD ($) | |
Two Buildings on Existing Campus | ||
Derivative Instruments and Hedging Activities | ||
Unrealized gain (loss) on derivative | $ 200 | |
Number of building under lease | building | 2 | |
Lease term | 5 years | |
Instruments designated as accounting hedges: | Foreign currency forwards | ||
Derivative Instruments and Hedging Activities | ||
Notional principal outstanding derivative instruments | $ 143,164 | $ 169,406 |
Instruments designated as accounting hedges: | Interest Rate Swaps | ||
Derivative Instruments and Hedging Activities | ||
Notional principal outstanding derivative instruments | 95,000 | |
Instruments not designated as accounting hedges: | Foreign currency forwards | ||
Derivative Instruments and Hedging Activities | ||
Notional principal outstanding derivative instruments | 24,220 | 27,909 |
Notional principal outstanding derivative instruments designed to manage exposure | 14,000 | 14,700 |
Unrealized gain (loss) on derivative | $ 0 | $ 200 |
Derivative Instruments and He_4
Derivative Instruments and Hedging Activities - Fair value of derivative financial instruments (Details) - Instruments designated as accounting hedges: - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 |
Foreign currency forwards | ||
Derivative Instruments and Hedging Activities | ||
Asset derivatives | $ 3,494 | $ 2,117 |
Liability derivatives | 757 | 1,732 |
Foreign currency forwards | Other current assets | ||
Derivative Instruments and Hedging Activities | ||
Asset derivatives | 2,635 | 1,803 |
Foreign currency forwards | Other assets | ||
Derivative Instruments and Hedging Activities | ||
Asset derivatives | 619 | 314 |
Foreign currency forwards | Other current liabilities | ||
Derivative Instruments and Hedging Activities | ||
Liability derivatives | 529 | 1,657 |
Foreign currency forwards | Other noncurrent liabilities | ||
Derivative Instruments and Hedging Activities | ||
Liability derivatives | 228 | $ 75 |
Interest Rate Swaps | Other assets | ||
Derivative Instruments and Hedging Activities | ||
Asset derivatives | $ 240 |
Derivative Instruments and He_5
Derivative Instruments and Hedging Activities - Gains and losses recognized (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
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 | $ 1,500 | |
Foreign currency forwards | ||
Derivative instruments and hedging activities | ||
Gains (losses) recognized in OCI | 4,344 | $ (45) |
Gains (losses) reclassified into earnings - Effective Portion | $ 1,945 | $ (1,239) |
Pension, Profit Sharing and O_3
Pension, Profit Sharing and Other Benefit Plans (Details) - USD ($) | 12 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2010 | |
Defined Contribution Plans | ||||
Company contributions to defined contribution plan | $ 19,400,000 | $ 16,800,000 | $ 16,800,000 | |
Equity securities | Minimum | ||||
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Target allocation percentage | 20.00% | |||
Equity securities | Maximum | ||||
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Target allocation percentage | 55.00% | |||
Debt securities | Minimum | ||||
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Target allocation percentage | 25.00% | |||
Debt securities | Maximum | ||||
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Target allocation percentage | 75.00% | |||
Cash equivalents | Minimum | ||||
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Target allocation percentage | 0.00% | |||
Cash equivalents | Maximum | ||||
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Target allocation percentage | 55.00% | |||
Real Estate | Minimum | ||||
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Target allocation percentage | 0.00% | |||
Real Estate | Maximum | ||||
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Target allocation percentage | 10.00% | |||
Defined Benefit Pension Plans | ||||
Defined Contribution Plans | ||||
Number of European employees covered by contributory defined benefit pension plan for which benefits were frozen (as a percent) | 50.00% | |||
Expected contribution to defined benefit pension plans in next fiscal year | $ 6,100,000 | |||
Unrecognized actuarial loss expected to be recognized in net pension cost over next fiscal year | (4,000,000) | |||
Unrecognized actuarial loss expected to be recognized in net pension cost over next fiscal year, net of tax | 3,200,000 | |||
Plan assets expected to be returned in 2020 | 0 | |||
Projected benefit obligation, ABO and fair value of plan assets for the defined benefit pension plans in which the ABO was in excess of the fair value of plan assets | ||||
Projected benefit obligation | 246,697,000 | 222,332,000 | ||
Accumulated benefit obligation | 246,697,000 | 222,332,000 | ||
Fair value of plan assets | 221,311,000 | 214,530,000 | ||
Change in benefit obligations: | ||||
Net benefit obligation at the beginning of the year | 222,332,000 | 235,097,000 | ||
Service cost | 590,000 | 606,000 | 617,000 | |
Interest cost | 7,617,000 | 7,529,000 | 7,091,000 | |
Actuarial (gain) loss | 32,067,000 | (9,449,000) | ||
Gross benefits paid | (8,141,000) | (8,034,000) | ||
Foreign currency exchange rate changes | (7,768,000) | (3,417,000) | ||
Net benefit obligation at the end of the year | 246,697,000 | 222,332,000 | 235,097,000 | |
Change in plan assets: | ||||
Fair value of plan assets at the beginning of the year | 214,530,000 | 209,722,000 | ||
Actual return on plan assets | 17,794,000 | 11,998,000 | ||
Employer contributions | 4,842,000 | 5,117,000 | ||
Gross benefits paid | (8,141,000) | (8,034,000) | ||
PBGC Premium paid | (177,000) | (286,000) | ||
Administrative expenses | (541,000) | (698,000) | ||
Foreign currency exchange rate changes | (6,996,000) | (3,289,000) | ||
Fair value of plan assets at the end of the year | 221,311,000 | 214,530,000 | 209,722,000 | |
Unfunded status of the plans | (25,386,000) | (7,802,000) | ||
Unrecognized net actuarial loss | 70,095,000 | 48,081,000 | ||
Net amount recognized | 44,709,000 | 40,279,000 | ||
Amounts recognized in Accumulated OCI | ||||
Liability adjustment to OCI | (70,095,000) | (48,081,000) | ||
Deferred tax asset | 11,667,000 | 7,365,000 | ||
Valuation allowance on deferred tax asset | (1,172,000) | 610,000 | ||
Accumulated other comprehensive loss | (59,600,000) | (40,106,000) | ||
Components of net periodic pension cost (benefit) | ||||
Service cost | 590,000 | 606,000 | 617,000 | |
Interest cost | 7,617,000 | 7,529,000 | 7,091,000 | |
Expected return on plan assets | (11,990,000) | (14,120,000) | (12,928,000) | |
Amortization of actuarial loss | 2,098,000 | 2,777,000 | 3,700,000 | |
Administrative expenses | 348,000 | 438,000 | 474,000 | |
Net pension cost (benefit) | $ (1,337,000) | $ (2,770,000) | $ (1,046,000) | |
Weighted-average assumptions used to determine benefit obligation at the end of the year | ||||
Discount rate (as a percent) | 2.50% | 3.60% | 3.30% | |
Rate of compensation increase (as a percent) | 3.10% | 3.30% | 3.20% | |
Weighted-average assumptions used to determine net periodic benefit cost at the end of the year | ||||
Discount rate (as a percent) | 3.60% | 3.30% | 3.00% | |
Expected return on plan assets (as a percent) | 5.70% | 6.80% | 6.80% | |
Rate of compensation increase (as a percent) | 3.30% | 3.20% | 3.10% | |
Defined Benefit Pension Plans | Equity securities | ||||
Change in plan assets: | ||||
Fair value of plan assets at the beginning of the year | $ 107,424,000 | |||
Fair value of plan assets at the end of the year | 100,302,000 | $ 107,424,000 | ||
Defined Benefit Pension Plans | Cash equivalents | ||||
Change in plan assets: | ||||
Fair value of plan assets at the beginning of the year | 19,314,000 | |||
Fair value of plan assets at the end of the year | 2,908,000 | 19,314,000 | ||
Defined Benefit Pension Plans | Real Estate | ||||
Change in plan assets: | ||||
Fair value of plan assets at the end of the year | 3,564,000 | |||
Non-qualified deferred compensation plan | ||||
Deferred compensation plans | ||||
Liabilities associated with the non-qualified deferred compensation plan | 11,000,000 | 11,500,000 | ||
Assets set aside to fund deferred compensation liabilities | $ 6,600,000 | $ 6,400,000 | ||
Employee Stock Purchase Plan | ||||
Employee Stock Purchase Plan | ||||
ESPP discount rate (as a percent) | 5.00% | |||
Maximum annual employee contributions | $ 25,000 |
Pension, Profit Sharing and O_4
Pension, Profit Sharing and Other Benefit Plans - Fair value by asset category and hierarchy (Details) - Defined Benefit Pension Plans - USD ($) $ in Thousands | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | $ 221,311 | $ 214,530 | $ 209,722 |
Net Asset Value | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 218,403 | 195,216 | |
Cash equivalents | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 2,908 | 19,314 | |
Cash equivalents | Level 1 | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 2,908 | 19,314 | |
Equity securities | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 100,302 | 107,424 | |
Equity securities | Net Asset Value | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 100,302 | 107,424 | |
Fixed Income Funds | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 105,651 | 73,533 | |
Fixed Income Funds | Net Asset Value | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 105,651 | 73,533 | |
Diversified growth fund | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 8,886 | 14,259 | |
Diversified growth fund | Net Asset Value | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 8,886 | $ 14,259 | |
Real Estate | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | 3,564 | ||
Real Estate | Net Asset Value | |||
Fair value of assets of defined benefit pension plans by asset category | |||
Fair value of the assets | $ 3,564 |
Pension, Profit Sharing and O_5
Pension, Profit Sharing and Other Benefit Plans - Expected benefit payments (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Expected pension benefit payments | |
2020 | $ 9,067 |
2021 | 9,140 |
2022 | 9,306 |
2023 | 9,324 |
2024 | 9,693 |
2024-2028 | $ 52,750 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | 12 Months Ended |
Sep. 30, 2019itemshares | |
Stockholders' Equity | |
Retirement age for participants | 60 years |
Retirement age and years of service combined | 70 years |
Notice period | 1 year |
RSUs | |
Stockholders' Equity | |
Number of shares of common stock that each award holder has the contingent right to receive | 1 |
Time-based RSUs | |
Stockholders' Equity | |
Number of equal installments for vesting of stock awards | item | 4 |
Expected awards vested (in shares) | 366,913 |
Performance-based RSUs | |
Stockholders' Equity | |
Vesting period | 3 years |
Expected awards vested (in shares) | 112,942 |
Performance and market-based RSUs | |
Stockholders' Equity | |
Number of shares of common stock that each award holder has the contingent right to receive | 1.25 |
Vesting period | 3 years |
Expected awards vested (in shares) | 174,105 |
Performance and market-based RSUs | Maximum | |
Stockholders' Equity | |
Increase (decrease) in multiplier based on performance | 25.00% |
Performance and market-based RSUs | Minimum | |
Stockholders' Equity | |
Increase (decrease) in multiplier based on performance | (25.00%) |
Stockholders' Equity - Assumpti
Stockholders' Equity - Assumption used for RSU activity (Details) - RSUs - $ / shares | Apr. 01, 2019 | Nov. 21, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Fair value units granted (per share) | $ 59.29 | $ 67.40 |
Risk-free interest rate(as a percent) | 2.80% | 2.80% |
Expected volatility (as a percent) | 34.00% | 34.00% |
Stockholders' Equity - RSU acti
Stockholders' Equity - RSU activity (Details) - $ / shares | Oct. 01, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Weighted Average Grant-Date Fair Value | |||
Shares available for future grants | 1,637,274 | ||
Subsequent event | |||
Number of Shares | |||
Vested (in shares) | (148,995) | ||
Service-Based RSUs | |||
Number of Shares | |||
Balance unvested at the beginning of the period (in shares) | 422,094 | 366,460 | 366,331 |
Granted (in shares) | 239,874 | 165,271 | |
Vested (in shares) | (145,409) | (147,832) | |
Forfeited (in shares) | (38,831) | (17,310) | |
Balance unvested at the end of the period (in shares) | 422,094 | 366,460 | |
Weighted Average Grant-Date Fair Value | |||
Balance unvested at the beginning of the period (in dollars per share) | $ 58.84 | $ 52.31 | $ 45.99 |
Granted (in dollars per share) | 63.25 | 61.06 | |
Vested (in dollars per share) | 50.76 | 46.86 | |
Forfeited (in dollars per share) | 54.67 | 48.62 | |
Balance unvested at the end of the period (in dollars per share) | $ 58.84 | $ 52.31 | |
Performance-based RSUs | |||
Number of Shares | |||
Balance unvested at the beginning of the period (in shares) | 315,262 | 635,628 | 678,856 |
Granted (in shares) | 179,162 | ||
Forfeited (in shares) | (320,366) | (222,390) | |
Balance unvested at the end of the period (in shares) | 315,262 | 635,628 | |
Weighted Average Grant-Date Fair Value | |||
Balance unvested at the beginning of the period (in dollars per share) | $ 55.67 | $ 50.11 | $ 46.59 |
Granted (in dollars per share) | 61.40 | ||
Forfeited (in dollars per share) | 44.63 | 48.46 | |
Balance unvested at the end of the period (in dollars per share) | $ 55.67 | $ 50.11 | |
Performance and market-based RSUs | |||
Number of Shares | |||
Balance unvested at the beginning of the period (in shares) | 227,402 | ||
Granted (in shares) | 237,616 | ||
Forfeited (in shares) | (10,214) | ||
Balance unvested at the end of the period (in shares) | 227,402 | ||
Weighted Average Grant-Date Fair Value | |||
Balance unvested at the beginning of the period (in dollars per share) | $ 66.77 | ||
Granted (in dollars per share) | $ 66.79 | ||
Forfeited (in dollars per share) | 67.40 | ||
Balance unvested at the end of the period (in dollars per share) | $ 66.77 |
Stockholders' Equity - Non-cash
Stockholders' Equity - Non-cash compensation expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stockholders' Equity | |||
Non-cash compensation expense related to stock-based awards | $ 15,488 | $ 7,515 | $ 5,012 |
Estimated forfeiture rate (as a percent) | 12.50% | ||
Cost of sales | |||
Stockholders' Equity | |||
Non-cash compensation expense related to stock-based awards | $ 1,766 | 1,096 | 338 |
Selling, general and administrative | |||
Stockholders' Equity | |||
Non-cash compensation expense related to stock-based awards | 13,722 | $ 6,419 | $ 4,674 |
RSUs | |||
Stockholders' Equity | |||
Unrecognized compensation cost related to unvested awards | 39,700 | ||
Aggregate fair value of awards | $ 40,000 | ||
Weighted-average period of recognition | 1 year 8 months 12 days |
Business Segment Information -
Business Segment Information - Financial data (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | Oct. 01, 2018 | |
Segment Information | ||||||||||||
Sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 | |
Operating income (loss) | 58,619 | $ 34,725 | $ (6,541) | $ (566) | 27,673 | $ 10,290 | $ (1,679) | $ (11,902) | 86,237 | 24,382 | 2,628 | |
Assets | 1,847,170 | 1,304,883 | 1,847,170 | 1,304,883 | 1,336,300 | $ 1,321,130 | ||||||
Assets - Discontinued Operations | 174,200 | |||||||||||
Depreciation and amortization | 64,742 | 46,600 | 48,045 | |||||||||
Capital expenditures | 49,084 | 31,696 | 36,916 | |||||||||
Cubic Transportation Systems | ||||||||||||
Segment Information | ||||||||||||
Sales | 849,779 | 670,700 | 578,600 | |||||||||
Operating income (loss) | 77,233 | 60,400 | 39,800 | |||||||||
Assets | 825,800 | 390,200 | 825,800 | 390,200 | 335,100 | |||||||
Depreciation and amortization | 30,700 | 12,000 | 8,800 | |||||||||
Capital expenditures | 6,600 | 3,200 | 6,900 | |||||||||
Cubic Mission Solutions | ||||||||||||
Segment Information | ||||||||||||
Sales | 328,771 | 207,000 | 168,900 | |||||||||
Operating income (loss) | 7,759 | (100) | (9,300) | |||||||||
Assets | 437,900 | 352,900 | 437,900 | 352,900 | 390,500 | |||||||
Depreciation and amortization | 23,300 | 22,400 | 23,800 | |||||||||
Capital expenditures | 11,100 | 2,100 | 1,700 | |||||||||
Cubic Global Defense | ||||||||||||
Segment Information | ||||||||||||
Sales | 317,925 | 325,200 | 360,200 | |||||||||
Operating income (loss) | 22,969 | 16,600 | 28,100 | |||||||||
Assets | 394,200 | 360,100 | 394,200 | 360,100 | 280,100 | |||||||
Depreciation and amortization | 6,800 | 8,500 | 10,400 | |||||||||
Capital expenditures | 4,500 | 9,400 | 5,900 | |||||||||
Corporate | ||||||||||||
Segment Information | ||||||||||||
Assets | $ 189,300 | $ 201,700 | 189,300 | 201,700 | 156,400 | |||||||
Depreciation and amortization | 3,900 | 3,700 | 5,000 | |||||||||
Capital expenditures | 26,900 | 17,000 | 22,400 | |||||||||
Unallocated corporate expenses and other | ||||||||||||
Segment Information | ||||||||||||
Operating income (loss) | $ (21,724) | $ (52,500) | $ (56,000) |
Business Segment Information _2
Business Segment Information - Long-lived Assets (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 |
Segment Information | |||
Long-lived assets, net | $ 145 | $ 124.4 | $ 119.6 |
United States | |||
Segment Information | |||
Long-lived assets, net | 128.4 | 106.7 | 100.6 |
United Kingdom | |||
Segment Information | |||
Long-lived assets, net | 5.9 | 5.7 | 11.7 |
Other foreign countries | |||
Segment Information | |||
Long-lived assets, net | $ 10.7 | $ 12 | $ 7.3 |
Business Segment Information _3
Business Segment Information - Customer concentration (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Customer sales concentration | |||||||||||
Sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
Sales Revenue | Customer Concentration | U.S. Government Agencies | |||||||||||
Customer sales concentration | |||||||||||
Sales | $ 468,800 | 365,800 | 327,800 | ||||||||
Sales Revenue | Customer Concentration | Transport for London (TfL) | |||||||||||
Customer sales concentration | |||||||||||
Sales | $ 158,500 | $ 147,300 |
Business Segment Information _4
Business Segment Information - Sales by Geographical Region (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | |||||||||||
Total sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
United States | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | 956,600 | 627,800 | 522,800 | ||||||||
United Kingdom | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | 218,200 | 240,700 | 219,400 | ||||||||
Australia | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | 163,500 | 166,700 | 175,600 | ||||||||
Far East/Middle East | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | 74,000 | 86,400 | 112,700 | ||||||||
Other foreign countries | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | $ 84,200 | $ 81,300 | $ 77,200 |
Business Segment Information _5
Business Segment Information - Sales by End Customer (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | |||||||||||
Total sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
U.S. Federal Government and State and Local Municipalities | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | 938,800 | 639,500 | 522,600 | ||||||||
Other | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | $ 557,700 | $ 563,400 | $ 585,100 |
Business Segment Information _6
Business Segment Information - Sales by Contract Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | |||||||||||
Total sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
Fixed Price | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | 1,452,400 | 1,146,200 | 1,036,900 | ||||||||
Other | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | $ 44,100 | $ 56,700 | $ 70,800 |
Business Segment Information _7
Business Segment Information - Sales by Deliverable Type (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | |||||||||||
Total sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
Products | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | 1,011,069 | 704,941 | 681,559 | ||||||||
Services | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | $ 485,406 | $ 497,957 | $ 426,150 |
Business Segment Information _8
Business Segment Information - Revenue Recognition Method (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue | |||||||||||
Total sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
Point in time | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | 347,400 | ||||||||||
Over time | |||||||||||
Disaggregation of Revenue | |||||||||||
Total sales | $ 1,149,100 |
Restructuring - Restructuring c
Restructuring - Restructuring charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring plan | |||
Expected remaining restructuring costs | $ 900 | ||
Restructuring costs | 15,386 | $ 5,018 | $ 2,260 |
Unallocated corporate expenses and other | |||
Restructuring plan | |||
Restructuring costs | 8,900 | 3,100 | 1,000 |
Cubic Transportation Systems | |||
Restructuring plan | |||
Restructuring costs | 3,200 | 400 | 400 |
Cubic Mission Solutions | |||
Restructuring plan | |||
Restructuring costs | 200 | ||
Cubic Global Defense | |||
Restructuring plan | |||
Restructuring costs | $ 3,300 | $ 1,300 | $ 900 |
Restructuring - Rollforward of
Restructuring - Rollforward of restructuring liability (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Restructuring liability | |||
Accrued costs | $ 15,386,000 | $ 5,018,000 | $ 2,260,000 |
Employee Separation and other | |||
Restructuring liability | |||
Balance as of the beginning of the period | 600 | 1,000 | |
Accrued costs | 7,500 | 4,200 | |
Cash payments | (6,100) | (4,600) | |
Balance as of the end of the period | 2,000 | 600 | $ 1,000 |
Consulting Costs | |||
Restructuring liability | |||
Balance as of the beginning of the period | 300 | ||
Accrued costs | 7,900 | 800 | |
Cash payments | (7,400) | (500) | |
Balance as of the end of the period | $ 800 | $ 300 |
Summary of Quarterly Results _3
Summary of Quarterly Results of Operations (Unaudited)) - Quarterly results (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Summary of Quarterly Results of Operations (Unaudited) | |||||||||||
Net sales | $ 471,198 | $ 382,679 | $ 337,339 | $ 305,259 | $ 379,709 | $ 296,212 | $ 278,586 | $ 248,391 | $ 1,496,475 | $ 1,202,898 | $ 1,107,709 |
Operating income (loss) | 58,619 | 34,725 | (6,541) | (566) | 27,673 | 10,290 | (1,679) | (11,902) | 86,237 | 24,382 | 2,628 |
Net income (loss) | $ 41,763 | $ 23,910 | $ (9,392) | $ (6,587) | $ 17,816 | $ 6,291 | $ (2,011) | $ (9,786) | $ 49,694 | $ 12,310 | $ (11,209) |
Net income (loss) per share, basic (in dollars per share) | $ 1.39 | $ 0.77 | $ (0.30) | $ (0.23) | $ 0.65 | $ 0.23 | $ (0.07) | $ (0.36) | $ 1.63 | $ 0.45 | $ (0.41) |
Net income (loss) per share, diluted (in dollars per share) | $ 1.38 | $ 0.77 | $ (0.30) | $ (0.23) | $ 0.65 | $ 0.23 | $ (0.07) | $ (0.36) | $ 1.62 | $ 0.45 | $ (0.41) |
Summary of Quarterly Results _4
Summary of Quarterly Results of Operations (Unaudited)) - Impact (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Operating income (loss) | $ 58,619 | $ 34,725 | $ (6,541) | $ (566) | $ 27,673 | $ 10,290 | $ (1,679) | $ (11,902) | $ 86,237 | $ 24,382 | $ 2,628 |
Net income (loss) from continuing operations | $ 41,306 | $ 7,793 | $ (25,740) | ||||||||
Diluted earnings per share attributable to Cubic (in dollars per share) | $ 1.38 | $ 0.77 | $ (0.30) | $ (0.23) | $ 0.65 | $ 0.23 | $ (0.07) | $ (0.36) | $ 1.62 | $ 0.45 | $ (0.41) |
ASU 2014-09 | ASC 606 | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Operating income (loss) | $ 14,885 | ||||||||||
Net income (loss) from continuing operations | $ 21,029 | ||||||||||
Diluted earnings per share attributable to Cubic (in dollars per share) | $ 0.29 | ||||||||||
ASU 2014-09 | ASC 606 | Change in Estimates | |||||||||||
Revenue, Initial Application Period Cumulative Effect Transition | |||||||||||
Operating income (loss) | $ (1,420) | $ (4,162) | $ (2,235) | $ (6,986) | $ 5,737 | ||||||
Net income (loss) from continuing operations | $ (1,615) | $ (3,149) | $ (2,351) | $ (5,146) | $ 3,208 | ||||||
Diluted earnings per share attributable to Cubic (in dollars per share) | $ (0.05) | $ (0.12) | $ (0.08) | $ (0.19) | $ 0.12 |