Operating Segments

In connection with the acquisition of Pipeline Services, the Company's reportable segments increased from three to four to reflect how the Company currently manages its business. The Company manages its business under the following four operating segments:

Energy: The Energy operating segment provides services to a range of clients including energy companies, power utilities, other commercial entities, and state and federal government entities. The Company's services include program management, engineer/procure/construct projects, design, and consulting. The Company's typical projects involve upgrades, design and new construction for electric transmission and distribution systems and substations; energy efficiency program design and management; and renewable energy development and power generation.

Environmental: The Environmental operating segment provides services to a wide range of clients including industrial, transportation, energy and natural resource companies, as well as federal, state and municipal agencies. The Environmental operating segment is organized to focus on key areas of demand including: environmental management of buildings and facilities; air quality measurements and modeling of potential air pollution impacts; water quality and water resource management; assessment and remediation of contaminated sites and buildings; hazardous waste management; construction monitoring, inspection and management; environmental, health and safety management and sustainability advisory services; compliance auditing and strategic due diligence; environmental licensing and permitting of a wide variety of projects; and natural and cultural resource assessment, protection and management.

Infrastructure: The Infrastructure operating segment provides services related to the expansion of infrastructure capacity, and the rehabilitation of overburdened and deteriorating infrastructure systems. The Company's client base is predominantly state and municipal governments as well as select commercial developers. In addition, the Company provides infrastructure services on projects originating in its Energy and Environmental operating segments. Primary services include: roadway, bridge and related surface transportation design; structural design and inspection of bridges; program management; construction engineering inspection and construction management for roads and bridges; civil engineering for municipalities and public works departments; geotechnical engineering services; and security assessments, design and construction management.

Pipeline Services: The Pipeline Services operating segment provides pipeline and facilities engineering, EPC/EPCM, field services and integrity services to the oil and gas transmission and midstream markets as well as at government facilities. The Company specializes in providing engineering services to assist clients in designing, engineering and constructing or expanding pipeline systems, compressor stations, pump stations, fuel storage facilities, terminals, and field gathering and production facilities. The Company's expertise extends to the engineering of a wide range of project peripherals, including various types of support buildings and utility systems, power generation and electrical transmission systems, communications systems, fire protection, water and sewage treatment, water transmission, roads and railroad sidings. The Company also provides project management, engineering and material procurement services to the refining industry and government agencies, including mechanical, civil, structural, electrical instrumentation/controls and environmental engineering. The Company provides full-service integrity management program offerings including program development, data services, risk analysis, corrosion evaluation, integrity engineering and integrity construction services. The Company is partnered with Google to provide a cloud-based pipeline life-cycle integrity management solution, Integra Link™, which utilizes Google’s geospatial technology platform to help oil and gas pipeline companies visualize and utilize their data and information.

The Company's chief operating decision maker ("CODM") is its Chief Executive Officer ("CEO"). The Company's CEO manages the business by evaluating the financial results of the four operating segments focusing primarily on segment revenue and segment profit. The Company utilizes segment revenue and segment profit because it believes they provide useful information for effectively allocating resources among operating segments; evaluating the health of its operating segments based on metrics that management can actively influence; and gauging its investments and its ability to service, incur or pay down debt. Specifically, the Company's CEO evaluates segment revenue and segment profit and assesses the performance of each operating segment based on these measures, as well as, among other things, the prospects of each of the operating segments and how they fit into the Company's overall strategy. The Company's CEO then decides how resources should be allocated among its operating segments. The Company does not track its assets by operating segment, and consequently, it is not practical to show assets by operating segment. Segment profit includes all operating expenses except the following: costs associated with providing corporate shared services (including certain depreciation and amortization), goodwill and intangible asset write-offs, stock-based compensation expense and amortization of intangible assets. Depreciation expense is primarily allocated to operating segments based upon their respective use of total operating segment office space. Assets solely used by Corporate are not allocated to the operating segments. Inter-segment balances and transactions are not material. The accounting policies of the operating segments are the same as those for the Company as a whole, except as discussed herein.

On July 1, 2015 the Company made certain changes to its management reporting structure which resulted in a change to the composition of its Energy and Infrastructure operating segments. In addition, certain corporate employees were transferred to the Energy operating segment. As a result, beginning in fiscal year 2016 the Company reports its financial performance based on the current reporting structure. The Company has recast certain prior period amounts to conform to the way it internally manages and monitors segment performance. These changes had no impact on consolidated net income or cash flows and were not material to the segment measurements presented.

The following tables present summarized financial information for the Company's operating segments (as of and for the periods noted below).



	Energy		Environmental		Infrastructure		Pipeline Services			Total
Year ended June 30, 2016:
Gross revenue	$	182,586	$	289,564	$	83,430	$	60,712		$	616,292
Net service revenue	150,636		206,126		57,218		48,379			462,359
Segment profit (loss)	33,666		41,669		12,048		(7,476		)	79,907
Acquisition and integration expenses	—		—		—		3,444			3,444
Depreciation	1,916		2,463		470		1,229			6,078
Amortization	1,116		1,224		—		4,823			7,163

Year ended June 30, 2015:
Gross revenue	$	168,564	$	303,126	$	70,242	$	—		$	541,932
Net service revenue	145,690		209,792		49,110		—			404,592
Segment profit (loss)	32,124		44,071		9,193		—			85,388
Acquisition and integration expenses	—		—		—		—			—
Depreciation	1,938		2,296		417		—			4,651
Amortization	1,204		1,401		—		—			2,605

Year ended June 30, 2014:
Gross revenue	$	160,651	$	245,944	$	63,251	$	—		$	469,846
Net service revenue	132,795		170,506		46,975		—			350,276
Segment profit (loss)	26,468		35,324		8,754		—			70,546
Acquisition and integration expenses	—		—		—		—			—
Depreciation	1,844		2,243		426		—			4,513
Amortization	1,409		460		—					1,869



	Years Ended
	June 30, 2016			June 30, 2015			June 30, 2014
Gross revenue
Gross revenue from reportable operating segments	$	616,292		$	541,932		$	469,846
Reconciling items(1)	4,572			4,185			5,831
Total consolidated gross revenue	$	620,864		$	546,117		$	475,677

Net service revenue
Net service revenue from reportable operating segments	$	462,359		$	404,592		$	350,276
Reconciling items(1)	2,770			3,426			4,680
Total consolidated net service revenue	$	465,129		$	408,018		$	354,956

Income from operations before taxes
Segment profit from reportable operating segments	$	79,907		$	85,388		$	70,546
Corporate shared services(2)	(46,431		)	(47,469		)	(42,549		)
Goodwill impairments	(21,981		)	—			—
Stock-based compensation expense	(5,554		)	(5,149		)	(4,658		)
Unallocated acquisition and integration expenses	(3,127		)	—			—
Unallocated depreciation and amortization	(1,484		)	(2,060		)	(2,418		)
Interest income	840			—			—
Interest expense	(2,707		)	(134		)	(169		)
Total consolidated (loss) income from operations before taxes	$	(537	)	$	30,576		$	20,752

Acquisition and integration expenses
Acquisition and integration expenses from reportable operating segments	$	3,444		$	—		$	—
Unallocated acquisition and integration expenses	3,127			—			—
Total consolidated acquisition and integration expenses	$	6,571		$	—		$	—

Depreciation and amortization
Depreciation and amortization from reportable operating segments	$	13,241		$	7,256		$	6,382
Unallocated depreciation and amortization	1,484			2,060			2,418
Total consolidated depreciation and amortization	$	14,725		$	9,316		$	8,800

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(1) Amounts represent certain unallocated corporate amounts not considered in the CODM's evaluation of operating segment performance.

(2) Corporate shared services consists of centrally managed functions in the following areas: accounting, treasury, information technology, legal, human resources, marketing, internal audit and executive management such as the CEO and various executives. These costs and other items of a general corporate nature are not allocated to the Company's four operating segments.