Reportable Segments

9 Months Ended

Jun. 30, 2013

Reportable Segments

Reportable Segments

10. 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 were 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 and their primary business activities are as follows:

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:  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:  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, transportation, 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:

	Three Months Ended				Nine Months Ended
	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
	(in thousands)
Revenue
ECS	$	251,239	$	296,995	$	788,600	$	856,050
TSS	221,198		258,435		687,230		762,897
RCM	162,560		153,826		499,491		432,043
Elimination of inter-segment revenue	(20,162)		(24,558)		(59,942)		(59,320)
Total revenue	$	614,835	$	684,698	$	1,915,379	$	1,991,670
Operating (Loss) Income
ECS	$	(7,700)	$	27,124	$	22,793	$	70,075
TSS	5,118		20,658		49,723		57,602
RCM	(35,285)		6,184		(14,109)		16,073
Corporate (1)	(62,017)		(7,705)		(78,816)		(25,854)
Total operating (loss) income	$	(99,884)	$	46,261	$	(20,409)	$	117,896
Depreciation
ECS	$	2,941	$	1,852	$	8,154	$	7,403
TSS	723		749		2,198		2,432
RCM	3,700		2,674		9,735		7,547
Corporate	726		802		2,333		2,275
Total depreciation	$	8,090	$	6,077	$	22,420	$	19,657
(1) Includes goodwill impairment charge, amortization of intangibles, other costs and other income not allocable to segments. The goodwill impairment charge of $56.6 million for the three and nine-month periods was recorded at Corporate.  The intangible asset amortization expense for the three and nine-month periods of fiscal 2013 was $9.6 million and $24.2 million, respectively, compared to $6.9 million and $22.1 million for the same periods last year.

	June 30,2013		September 30,2012
	(in thousands)
Total Assets
ECS	$	910,453	$	915,571
TSS	673,799		638,405
RCM	413,032		311,051
Assets not allocated to segments and intercompany eliminations (1)	(225,772)		(193,997)
Total assets	$	1,771,512	$	1,671,030
(1) Assets not allocated to segments include goodwill, intangible assets, deferred income taxes and certain other assets.

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 presents our revenue by client sector:

	Three Months Ended				Nine Months Ended
	June 30, 2013		July 1, 2012		June 30, 2013		July 1, 2012
	(in thousands)
Client Sector
International (1)	$	158,579	$	170,055	$	522,921	$	484,767
U.S. commercial	167,280		183,601		488,722		503,469
U.S. federal government (2)	187,983		245,050		621,677		769,167
U.S. state and local government	100,993		85,992		282,059		234,267
Total	$	614,835	$	684,698	$	1,915,379	$	1,991,670
(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.