Revenue Recognition (Tables)

3 Months Ended

Dec. 30, 2018

Revenue from Contract with Customer [Abstract]

Summary of the Effects of Adoption of ASC 606

The following table presents how the adoption of ASC 606 affected certain line items in our consolidated statement of cash flows for the three months ended December 30, 2018:



	Recognition Under Previous Guidance			Impact of the Adoption of ASC 606			Recognition Under ASC 606
	(in thousands)
Cash flows from operating activities:
Net income	$	40,354		$	1,678		$	42,032
Accounts receivable and contract assets	7,574			6,954			14,528
Contract liabilities	15,248			(9,158		)	6,090
Income taxes receivable/payable	11,489			526			12,015
Net cash used in operating activities	(15,302		)	—			(15,302		)

The following table presents how the adoption of ASC 606 affected certain line items in our consolidated balance sheet as of December 30, 2018:



	Recognition Under Previous Guidance		Impact of the Adoption of ASC 606			Recognition Under ASC 606
	(in thousands)
Assets
Contract assets ⁽¹⁾	$	131,885	$	(5,340	)	$	126,545
Deferred tax assets	7,328		1,120			8,448

Liabilities and equity
Contract liabilities ⁽²⁾	$	158,519	$	(2,934	)	$	155,585
Income taxes payable	16,824		525			17,349

Equity ⁽³⁾
Retained earnings	$	978,632	$	(1,089	)	$	977,543

⁽¹⁾ Previously included in "Account receivable - net".

⁽²⁾ Previously presented as "Billings in excess of costs on uncompleted contracts".

⁽³⁾ Includes $2.8 million of cumulative catch-up adjustment to retained earnings on October 1, 2018 upon adoption of ASC 606.

The following table presents how the adoption of ASC 606 affected certain line items in our consolidated statement of income for the three months ended December 30, 2018:



	Recognition Under Previous Guidance		Impact of the Adoption of ASC 606		Recognition Under ASC 606
	(in thousands)
Revenue	$	715,228	$	2,203	$	717,431
Income from operations	53,508		2,203		55,711
Income tax expense	10,257		525		10,782
Net income attributable to Tetra Tech	40,319		1,678		41,997

Summary of Net Contract Liabilities/Assets

Net contract liabilities/assets consisted of the following:



	Balance at
	December 30, 2018		September 30, 2018
	(in thousands)
Contract assets	$	126,545	$	142,882
Contract liabilities	155,585		143,270
Net contract liabilities	29,040		388

Reconciliation of Disaggregation of Revenue to Reportable Segments



	Three Months Ended
	December 30, 2018		December 31, 2017
	(in thousands)
Client Sector
U.S. state and local government	$	123,280	$	151,754
U.S. federal government ⁽¹⁾	224,757		236,249
U.S. commercial	172,788		206,786
International ⁽²⁾	196,606		164,960
Total	$	717,431	$	759,749

⁽¹⁾ Includes revenue generated under U.S. federal government contracts performed outside the United States.

⁽²⁾ Includes revenue generated from foreign operations, primarily in Canada and Australia, and revenue generated from non-U.S. clients.

Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for the three months ended December 30, 2018 and December 31, 2017.



	Three Months Ended
	December 30, 2018		December 31, 2017

Contract Type
Fixed-price	$	240,933	$	235,420
Time-and-materials	336,537		376,773
Cost-plus	139,961		147,556
Total revenue	$	717,431	$	759,749

Remaining Performance Obligation, Expected Timing

We expect to satisfy our RUPOs as of December 30, 2018 over the following periods:



	Amount
	(in thousands)
Within 12 months	$	1,670,929
Beyond	1,101,342
Total RUPOs	$	2,772,271