Reportable Segments

3 Months Ended

Dec. 30, 2012

Reportable Segments

Reportable Segments

9. Reportable Segments

In the first quarter of fiscal 2013, we implemented a reorganization of our operations to improve future growth and profitability.  These activities included the consolidation and realignment of certain operating activities to improve organizational effectiveness and achieve efficiencies in our segment management.  This reorganization included the elimination of the EAS segment.  Operating activities previously reported in this segment have been realigned to operations with similar client types, project types and financial metrics in the ECS and TSS segments.  Segment results for the prior year have been revised to conform to the current-year presentation.

Our reportable segments are as follows:

ECS.  ECS provides front-end science, consulting engineering and project management services in the areas of surface water management, water infrastructure, solid waste management, mining, geotechnical sciences, arctic engineering, industrial processes and oil sands, transportation, and information technology.

TSS.  TSS provides management consulting and engineering services and strategic direction in the areas of environmental assessments/hazardous waste management, climate change, international development, international reconstruction and stabilization, energy, oil and gas, technical government consulting, and buildings and facilities.

RCM.  RCM provides full-service support, including construction and construction management, to all of our client sectors including the U.S. federal government in the U.S. and internationally, and commercial clients worldwide, in the areas of environmental remediation, infrastructure development, energy, and oil and gas.

Management evaluates the performance of these reportable segments based upon their respective segment operating income before the effect of amortization expense related to acquisitions and other unallocated corporate expenses.  We account for inter-segment sales and transfers as if the sales and transfers were to third parties; that is, by applying a negotiated fee onto the costs of the services performed.  All significant intercompany balances and transactions are eliminated in consolidation.

The following tables set forth summarized financial information regarding our reportable segments:

Reportable Segments

	Three Months Ended
	December 30,2012		January 1,2012
	(in thousands)
Revenue
ECS	$	278,168	$	279,160
TSS	243,924		255,123
RCM	158,431		160,806
Elimination of inter-segment revenue	(21,978)		(12,462)
Total revenue	$	658,545	$	682,627

Operating Income
ECS	$	19,291	$	21,856
TSS	22,343		17,542
RCM	7,082		5,890
Corporate (1)	(6,907)		(9,195)
Total operating income	$	41,809	$	36,093

Depreciation
ECS		$	2,625	$	2,837
TSS		782		774
RCM		2,603		2,435
Corporate		798		740
Total depreciation		$	6,808	$	6,786
(1)	Includes amortization of intangibles, other costs and other income not allocable to segments. Amortization expense for first quarters of fiscal 2013 and 2012 was $5.6 million and $8.3 million, respectively.

		December 30,2012		September 30,2012
		(in thousands)
Total Assets
ECS		$	959,657	$	915,571
TSS		637,347		638,405
RCM		302,731		311,051
Assets not allocated to segments and intercompany eliminations (1)		(184,760)		(193,997)
Total assets		$	1,714,975	$	1,671,030
(1)	Assets not allocated to segments includes goodwill, intangible assets, deferred income taxes and certain other assets.

Major Clients

Other than the U.S. federal government, no single client accounted for more than 10% of our revenue.  All of our segments generated revenue from all client sectors.

The following table represents our revenue by client sector:

		Three Months Ended
		December 30,2012		January 1,2012
		(in thousands)
Client Sector
International (1)		$	167,518	$	159,931
U.S. commercial		173,141		177,430
U.S. federal government (2)		227,390		271,408
U.S. state and local government		90,496		73,858
Total		$	658,545	$	682,627
(1)	Includes revenue generated from foreign operations, primarily in Canada, and revenue generated from non-U.S. clients.
(2)	Includes revenue generated under U.S. federal government contracts performed outside the United States.