Reportable Segments

9 Months Ended

Jun. 29, 2014

Reportable Segments

Reportable Segments

10.Reportable Segments

Our reportable segments 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 building 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 United States and internationally, and commercial clients worldwide, in the areas of environmental remediation, infrastructure development, solid waste management, 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				Nine Months Ended
	June 29, 2014		June 30, 2013		June 29, 2014		June 30, 2013
	(in thousands)
Revenue
ECS	$	246,977	$	251,239	$	707,952	$	788,600
TSS	236,056		221,198		674,042		687,230
RCM	171,518		162,560		549,949		499,491
Elimination of inter-segment revenue	(25,049)		(20,162)		(70,308)		(59,942)
Total revenue	$	629,502	$	614,835	$	1,861,635	$	1,915,379
Operating Income (loss)
ECS	$	18,351	$	(7,700)	$	50,322	$	22,793
TSS	22,867		5,118		68,971		49,723
RCM	(2,194)		(35,285)		836		(14,109)
Corporate (1)	143		(62,017)		8,941		(78,816)
Total operating income (loss)	$	39,167	$	(99,884)	$	129,070	$	(20,409)
Depreciation
ECS	$	1,737	$	2,941	$	5,950	$	8,154
TSS	577		723		1,746		2,198
RCM	3,300		3,700		10,134		9,735
Corporate	840		726		2,330		2,333
Total depreciation	$	6,454	$	8,090	$	20,160	$	22,420

(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 of fiscal 2013 was recorded at Corporate.  The intangible asset amortization expense for the three and nine-month periods of fiscal 2014 was $6.1 million and $21.4 million, respectively, compared to $9.6 million and $24.2 million for the same periods last year.

	June 29, 2014		September 29, 2013
	(in thousands)
Total Assets
ECS	$	931,810	$	912,996
TSS	742,047		673,864
RCM	432,203		435,053
Corporate (1)	(281,840)		(222,821)
Total assets	$	1,824,220	$	1,799,092

(1) Corporate assets consist of intercompany eliminations and assets not allocated to segments including 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				Nine Months Ended
	June 29, 2014		June 30, 2013		June 29, 2014		June 30, 2013
	(in thousands)
Client Sector
International (1)	$	141,553	$	158,579	$	487,056	$	522,921
U.S. commercial	183,757		167,280		517,907		488,722
U.S. federal government (2)	202,905		187,983		576,431		621,677
U.S. state and local government	101,287		100,993		280,241		282,059
Total	$	629,502	$	614,835	$	1,861,635	$	1,915,379

(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.