Reportable Segments

3 Months Ended

Jan. 01, 2012

Reportable Segments

Reportable Segments

9. Reportable Segments

In the first quarter of fiscal 2012, we implemented organizational changes that resulted in a realignment of certain operating units within our reportable segments.  These changes are intended to improve organizational effectiveness and efficiency by better aligning operations with similar client types, project types and financial metrics.  Prior year amounts have been reclassified to conform to the current year presentation.

Our reportable segments are as follows:

Engineering and Consulting Services (“ECS”).  ECS provides front-end science, consulting engineering services and project management in the areas of surface water management, groundwater, waste management, mining and geotechnical sciences, arctic engineering, industrial processes, and information technology.

Technical Support Services (“TSS”).  TSS advises clients through the study, design and implementation phases of projects. TSS provides management consulting and strategic direction in the areas of environmental assessments/hazardous waste management, climate change, international development/stabilization, energy services, and technical government staffing services.

Engineering and Architecture Services (“EAS”).  EAS provides engineering and architecture design services, including Leadership in Energy and Environmental Design (“LEED”) and sustainability services, together with technical and program administration services for projects related to water infrastructure, buildings, and transportation and facilities.

Remediation and Construction Management (“RCM”).  RCM is focused on providing full-service support to U.S. federal government, U.S. state and local governments, and U.S. commercial clients.  RCM’s service lines include environmental remediation, construction management, infrastructure development, and alternative energy.

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

	ECS		TSS		EAS		RCM		Total
	(in thousands)
Three months ended January 1, 2012:
Revenue	$	245,663	$	228,832	$	81,633	$	160,758	$	716,886
Segment operating income	19,491		15,502		4,405		5,890		45,288
Three months ended January 2, 2011:
Revenue	$	205,389	$	223,305	$	67,983	$	144,565	$	641,242
Segment operating income	18,301		15,789		4,744		3,111		41,945

Total assets by segment were as follows:

	January 1,2012		October 2,2011
	(in thousands)
ECS	$	792,491	$	767,347
TSS	505,309		505,198
EAS	110,112		111,555
RCM	303,667		296,361
Total assets	$	1,711,579	$	1,680,461

Reconciliations

	Three Months Ended
	January 1,2012			January 2,2011
	(in thousands)
Revenue
Revenue from reportable segments	$	716,886		$	641,242
Elimination of inter-segment revenue	(34,259		)	(30,118		)
Total consolidated revenue	$	682,627		$	611,124
Operating Income
Segment operating income	$	45,288		$	41,945
Amortization of intangibles	(8,264		)	(6,781		)
Other expense (1)	(931		)	(839		)
Total consolidated operating income	$	36,093		$	34,325
(1)     Other expense includes corporate costs not allocable to segments.

	January 1,2012			October 2,2011
	(in thousands)
Assets
Total assets of reportable segments	$	1,711,579		$	1,680,461
Assets not allocated to segments and intercompany eliminations	(110,952		)	(86,473		)
Total consolidated assets	$	1,600,627		$	1,593,988

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
	January 1,2012		January 2,2011
	(in thousands)
Client Sector
International (1)	$	159,931	$	126,557
U.S. commercial	177,430		135,135
U.S. federal government (2)	271,408		283,520
U.S. state and local government	73,858		65,912
Total	$	682,627	$	611,124
(1) Includes revenue generated from our foreign operations, primarily in Canada, and revenue generated from non-U.S. clients. (2)Includes revenue generated under U.S. government contracts performed outside the United States.