Reportable Segments

9 Months Ended

Jul. 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 activities in our reportable segments.  This realignment resulted from the organic growth of new activities in a component of an existing reportable segment due to changing business conditions.  These new activities are not regularly reviewed by our Chief Operating Decision Maker (“CODM”) to assess performance or make decisions about the resources to be allocated to them and do not individually meet the definition of a reportable operating segment.  The changes are intended to improve organizational effectiveness and efficiency by better aligning operations with similar characteristics such as client types, project types, required resources 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 present certain financial information for our reportable segments:

	Three Months Ended				Nine Months Ended
	July 1, 2012		July 3, 2011		July 1, 2012		July 3, 2011
	(in thousands)
Revenue
ECS	$	263,666	$	242,958	$	760,815	$	674,306
TSS	234,390		216,452		687,222		640,399
EAS	82,078		77,983		243,500		219,625
RCM	153,860		170,137		432,032		449,622
Elimination of inter-segment revenue	(49,296)		(33,738)		(131,899)		(86,470)
Total revenue	$	684,698	$	673,792	$	1,991,670	$	1,897,482
Operating Income
ECS	$	24,484	$	23,456	$	61,998	$	59,528
TSS	17,810		14,361		50,375		43,608
EAS	5,488		6,491		15,305		16,399
RCM	6,184		2,803		16,073		7,714
Corporate(1)	(7,705)		(7,703)		(25,855)		(24,260)
Total operating income	$	46,261	$	39,408	$	117,896	$	102,989

(1)Corporate includes amortization of intangibles and other costs not allocable to segments.

	July 1, 2012		October 2, 2011
	(in thousands)
Total Assets
ECS	$	861,846	$	767,347
TSS	573,423		505,198
EAS	120,445		111,555
RCM	322,687		296,361
Assets not allocated to segments and intercompany eliminations(1)	(168,782)		(86,473)
Total assets	$	1,709,619	$	1,593,988

(1)Assets not allocated to segments include 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.  Each of our segments generated revenue from all client sectors.

The following table represents our revenue by client sector:

	Three Months Ended				Nine Months Ended
	July 1, 2012		July 3, 2011		July 1, 2012		July 3, 2011
	(in thousands)
Client Sector
International(1)	$	170,055	$	156,759	$	484,767	$	433,339
U.S. commercial	183,601		157,103		503,469		404,310
U.S. federal government(2)	245,050		284,144		769,167		852,175
U.S. state and local government	85,992		75,786		234,267		207,658
Total	$	684,698	$	673,792	$	1,991,670	$	1,897,482

(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.