Revenue Recognition (Tables)

6 Months Ended

Mar. 31, 2019

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 balance sheet as of March 31, 2019:



	Recognition Under Previous Guidance		Impact of the Adoption of ASC 606			Recognition Under ASC 606
	(in thousands)
Assets
Accounts receivable - net	$	634,972	$	(5,375	)	$	629,597
Contract assets ⁽¹⁾	165,530		(7,612		)	157,918
Deferred tax assets	29,461		1,120			30,581

Liabilities and equity
Contract liabilities ⁽²⁾	$	164,868	$	(10,259	)	$	154,609
Income taxes payable	1,597		280			1,877

Equity ⁽³⁾
Retained earnings	$	1,028,724	$	(1,888	)	$	1,026,836

⁽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 statements of income for the three and six months ended March 31, 2019:



	Three Months Ended							Six Months Ended
	Recognition Under Previous Guidance		Impact of the Adoption of ASC 606			Recognition Under ASC 606		Recognition Under Previous Guidance		Impact of the Adoption of ASC 606			Recognition Under ASC 606
	(in thousands)
Revenue	$	723,666	$	(1,045	)	$	722,621	$	1,438,894	$	1,158		$	1,440,052
Income from operations	48,590		(1,045		)	47,545		102,098		1,158			103,256
Income tax benefit (expense)	11,317		246			11,563		1,061		(280		)	781
Net income (loss) attributable to Tetra Tech	56,710		(799		)	55,911		97,028		879			97,907

The following table presents how the adoption of ASC 606 affected certain line items in our consolidated statement of cash flows for the six months ended March 31, 2019:



	Recognition Under Previous Guidance			Impact of the Adoption of ASC 606			Recognition Under ASC 606
	(in thousands)
Cash flows from operating activities:
Net income	$	97,097		$	879		$	97,976
Accounts receivable and contract assets	32,716			15,325			48,041
Contract liabilities	21,598			(16,484		)	5,114
Income taxes receivable/payable	(4,231		)	280			(3,951		)
Net cash provided by operating activities	99,248			—			99,248

Summary of Net Contract Liabilities/Assets

Net contract liabilities/assets consisted of the following:



	Balance at
	March 31, 2019		September 30, 2018
	(in thousands)
Contract assets	$	157,918	$	142,882
Contract liabilities	154,609		143,270
Net contract assets (liabilities)	$	3,309	$	(388	)

Reconciliation of Disaggregation of Revenue to Reportable Segments

The following tables provide information about disaggregated revenue and a reconciliation of the disaggregated revenue:



	Three Months Ended				Six Months Ended
	March 31, 2019		April 1, 2018		March 31, 2019		April 1, 2018

Client Sector
U.S. state and local government	$	129,868	$	104,905	$	253,147	$	256,659
U.S. federal government ⁽¹⁾	216,498		236,951		441,256		473,199
U.S. commercial	165,970		180,398		338,758		387,184
International ⁽²⁾	210,285		178,008		406,891		342,968
Total	$	722,621	$	700,262	$	1,440,052	$	1,460,010

⁽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 and six months ended March 31, 2019 and April 1, 2018.



	Three Months Ended				Six Months Ended
	March 31, 2019		April 1, 2018		March 31, 2019		April 1, 2018
	(in thousands)
Contract Type
Fixed-price	$	247,831	$	224,878	$	488,764	$	460,298
Time-and-materials	345,626		333,590		682,163		710,362
Cost-plus	129,164		141,794		269,125		289,350
Total	$	722,621	$	700,262	$	1,440,052	$	1,460,010

Remaining Performance Obligation, Expected Timing

We expect to satisfy our RUPOs as of March 31, 2019 over the following periods:



	Amount
	(in thousands)
Within 12 months	$	1,807,078
Beyond	993,344
Total	$	2,800,422