Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Dec. 31, 2017 | Jan. 29, 2018 | |
Document and Entity Information | ||
Entity Registrant Name | TETRA TECH INC | |
Entity Central Index Key | 831,641 | |
Document Type | 10-Q | |
Document Period End Date | Dec. 31, 2017 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-30 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 55,850,848 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Oct. 01, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 173,025 | $ 189,975 |
Accounts receivable – net | 846,201 | 788,767 |
Prepaid expenses and other current assets | 65,856 | 49,969 |
Income taxes receivable | 5,589 | 13,312 |
Total current assets | 1,090,671 | 1,042,023 |
Property and equipment – net | 56,929 | 56,835 |
Investments in unconsolidated joint ventures | 2,419 | 2,700 |
Goodwill | 763,455 | 740,886 |
Intangible assets – net | 24,533 | 26,688 |
Deferred tax assets | 0 | 1,763 |
Other long-term assets | 32,980 | 31,850 |
Total assets | 1,970,987 | 1,902,745 |
Current liabilities: | ||
Accounts payable | 144,628 | 177,638 |
Accrued compensation | 100,833 | 143,408 |
Billings in excess of costs on uncompleted contracts | 132,930 | 117,499 |
Current portion of long-term debt | 15,511 | 15,588 |
Current contingent earn-out liabilities | 7,868 | 2,024 |
Other current liabilities | 82,146 | 81,511 |
Total current liabilities | 483,916 | 537,668 |
Deferred tax liabilities | 39,240 | 43,781 |
Long-term debt | 432,431 | 341,283 |
Long-term contingent earn-out liabilities | 13,218 | 414 |
Other long-term liabilities | 55,061 | 50,975 |
Commitments and contingencies (Note 14) | ||
Equity: | ||
Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at December 31, 2017 and October 1, 2017 | 0 | 0 |
Common stock - authorized, 150,000 shares of $0.01 par value; issued and outstanding, 55,988 and 55,873 shares at December 31, 2017 and October 1, 2017, respectively | 560 | 559 |
Additional paid-in capital | 175,293 | 193,835 |
Accumulated other comprehensive loss | (101,901) | (98,500) |
Retained earnings | 873,004 | 832,559 |
Tetra Tech stockholders’ equity | 946,956 | 928,453 |
Noncontrolling interests | 165 | 171 |
Total stockholders' equity | 947,121 | 928,624 |
Total liabilities and stockholders' equity | $ 1,970,987 | $ 1,902,745 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Oct. 01, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, authorized shares (in shares) | 2,000,000 | 2,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, authorized shares (in shares) | 150,000,000 | 150,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 55,988,000 | 55,873,000 |
Common stock, shares outstanding (in shares) | 55,988,000 | 55,873,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | |
Income Statement [Abstract] | ||
Revenue | $ 759,749 | $ 668,851 |
Subcontractor costs | (214,902) | (179,300) |
Other costs of revenue | (450,702) | (408,190) |
Gross profit | 94,145 | 81,361 |
Selling, general and administrative expenses | (45,556) | (41,506) |
Income from operations | 48,589 | 39,855 |
Interest expense | (3,160) | (2,908) |
Income before income tax benefit (expense) | 45,429 | 36,947 |
Income tax benefit (expense) | 623 | (10,358) |
Net income | 46,052 | 26,589 |
Net income attributable to noncontrolling interests | (18) | (27) |
Net income attributable to Tetra Tech | $ 46,034 | $ 26,562 |
Earnings per share attributable to Tetra Tech: | ||
Basic (in dollars per share) | $ 0.82 | $ 0.47 |
Diluted (in dollars per share) | $ 0.81 | $ 0.46 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 55,855 | 57,099 |
Diluted (in shares) | 56,875 | 58,145 |
Cash dividends paid per share (in dollars per share) | $ 0.1 | $ 0.09 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 46,052 | $ 26,589 |
Foreign currency translation adjustments | (3,469) | (15,999) |
Gain on cash flow hedge valuations | 66 | 996 |
Other comprehensive loss, net of tax | (3,403) | (15,003) |
Comprehensive income, net of tax | 42,649 | 11,586 |
Net income attributable to noncontrolling interests | (18) | (27) |
Foreign currency translation adjustments | 2 | (183) |
Comprehensive income attributable to noncontrolling interests | (16) | (210) |
Comprehensive income attributable to Tetra Tech, net of tax | $ 42,633 | $ 11,376 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 46,052 | $ 26,589 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 9,983 | 11,191 |
Equity in income of unconsolidated joint ventures | (839) | (1,030) |
Distributions of earnings from unconsolidated joint ventures | 1,121 | 1,114 |
Non-cash stock compensation | 3,970 | 3,217 |
Deferred income taxes | (10,100) | 2,195 |
Provision for doubtful accounts | 2,524 | (1,128) |
Gain on disposal of property and equipment | (411) | (118) |
Changes in operating assets and liabilities, net of effects of business acquisitions: | ||
Accounts receivable | (36,011) | (41,962) |
Prepaid expenses and other assets | (16,321) | (7,392) |
Accounts payable | (35,169) | (22,609) |
Accrued compensation | (42,575) | (36,884) |
Billings in excess of costs on uncompleted contracts | 12,330 | 24,472 |
Other liabilities | (8,974) | (9,642) |
Income taxes receivable/payable | 7,926 | (6,760) |
Net cash used in operating activities | (66,494) | (58,747) |
Cash flows from investing activities: | ||
Payments for business acquisitions, net of cash acquired | (18,294) | 0 |
Capital expenditures | (2,143) | (2,031) |
Proceeds from sale of property and equipment | 710 | 223 |
Net cash used in investing activities | (19,727) | (1,808) |
Cash flows from financing activities: | ||
Proceeds from borrowings | 120,026 | 88,950 |
Payments on long-term debt | (25,026) | (47,265) |
Repurchases of common stock | (25,000) | (10,000) |
Dividends paid | (5,589) | (5,144) |
Net proceeds from issuance of common stock | 5,584 | 2,403 |
Net cash provided by financing activities | 69,995 | 28,944 |
Effect of exchange rate changes on cash | (724) | (1,867) |
Net decrease in cash and cash equivalents | (16,950) | (33,478) |
Cash and cash equivalents at beginning of period | 189,975 | 160,459 |
Cash and cash equivalents at end of period | 173,025 | 126,981 |
Cash paid during the period for: | ||
Interest | 2,913 | 2,931 |
Income taxes | $ 1,794 | $ 14,831 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim consolidated financial statements and related notes of Tetra Tech, Inc. (“we,” “us” , “our” or "Tetra Tech") have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements and, therefore, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended October 1, 2017 . These financial statements reflect all normal recurring adjustments that are considered necessary for a fair statement of our financial position, results of operations and cash flows for the interim periods presented. The results of operations and cash flows for any interim period are not necessarily indicative of results for the full year or for future years. Beginning in fiscal 2018 , we aligned our operations to better serve our clients and markets, resulting in two renamed reportable segments. Our Government Services Group (“GSG”) reportable segment primarily includes activities with U.S. government clients (federal, state and local) and all activities with development agencies worldwide. Our Commercial/International Services Group (“CIG”) reportable segment primarily includes activities with U.S. commercial clients and all international activities other than work for development agencies. This alignment allows us to capitalize on our growing market opportunities and enhance the development of high-end consulting and technical solutions to meet our growing client demand. We continue to report the results of the wind-down of our non-core construction activities in the Remediation and Construction Management (“RCM”) segment. Prior year amounts for reportable segments have been revised to conform to the current-year presentation. |
Accounts Receivable - Net and R
Accounts Receivable - Net and Revenue Recognition | 3 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable - Net and Revenue Recognition [Abstract] | |
Accounts Receivable - Net and Revenue Recognition | Accounts Receivable – Net and Revenue Recognition Net accounts receivable and billings in excess of costs on uncompleted contracts consisted of the following: December 31, October 1, (in thousands) Billed $ 437,317 $ 376,287 Unbilled 419,912 404,899 Contract retentions 23,109 39,840 Total accounts receivable – gross 880,338 821,026 Allowance for doubtful accounts (34,137 ) (32,259 ) Total accounts receivable – net $ 846,201 $ 788,767 Billings in excess of costs on uncompleted contracts $ 132,930 $ 117,499 Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable represent revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Except for amounts related to claims as discussed below, most of our unbilled receivables at December 31, 2017 are expected to be billed and collected within 12 months. Contract retentions represent amounts withheld by clients until certain conditions are met or the project is completed, which may be several months or years. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management's consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and particular industry conditions that may affect a client's ability to pay. Billings in excess of costs on uncompleted contracts represent the amount of cash collected from clients and billings to clients on contracts in advance of revenue recognized. The majority of billings in excess of costs on uncompleted contracts will be earned within 12 months. Once contract performance is underway, we may experience changes in conditions, client requirements, specifications, designs, materials and expectations regarding the period of performance. Such changes result in “change orders” and may be initiated by us or by our clients. In many cases, agreement with the client as to the terms of change orders is reached prior to work commencing; however, sometimes circumstances require that work progress without a definitive client agreement. Unapproved change orders constitute claims in excess of agreed contract prices that we seek to collect from our clients for delays, errors in specifications and designs, contract terminations, or other causes of unanticipated additional costs. Revenue on claims is recognized when contract costs related to claims have been incurred and when their addition to contract value can be reliably estimated. This can lead to a situation in which costs are recognized in one period and revenue is recognized in a subsequent period, such as when client agreement is obtained or a claims resolution occurs. Total accounts receivable at December 31, 2017 and October 1, 2017 included $ 61 million and $59 million , respectively, related to claims, including requests for equitable adjustment, on contracts that provide for price redetermination. We regularly evaluate all unsettled claim amounts and record appropriate adjustments to operating earnings when it is probable that the claim will result in a different contract value than the amount previously estimated. We recorded no gains or losses related to claims in the first quarters of fiscal 2018 and 2017 . Billed accounts receivable related to U.S. federal government contracts were $ 65.0 million and $ 45.4 million at December 31, 2017 and October 1, 2017 , respectively. U.S. federal government contracts unbilled receivables were $ 116.8 million and $ 109.7 million at December 31, 2017 and October 1, 2017 , respectively. Other than the U.S. federal government, no single client accounted for more than 10% of our accounts receivable at December 31, 2017 and October 1, 2017 . We recognize our revenue from contracts using the percentage-of-completion method, primarily utilizing the cost-to-cost approach, to estimate the progress towards completion in order to determine the amount of revenue and profit to recognize. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. As a result, we recognized net unfavorable operating income adjustments of $0.7 million during the first quarter of fiscal 2018 in the CIG segment. We recognized net unfavorable operating income adjustments during the first quarter of fiscal 2017 of $4.0 million ( $2.3 million in the CIG segment and $1.7 million in the RCM segment). Changes in revenue and cost estimates could also result in a projected loss that would be recorded immediately in earnings. As of December 31, 2017 and October 1, 2017 , our consolidated balance sheets included liabilities for anticipated losses of $4.5 million and $8.1 million , respectively. The estimated cost to complete the related contracts as of December 31, 2017 was $4.7 million . |
Mergers and Acquisitions
Mergers and Acquisitions | 3 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Mergers and Acquisitions | Mergers and Acquisitions On October 2, 2017, we completed the acquisition of Glumac, headquartered in Portland, Oregon. Glumac is a leader in sustainable infrastructure design with more than 300 employees and is part of our GSG segment. The fair value of the purchase price for Glumac was $38.4 million . This amount is comprised of $19.0 million of cash payments made to the sellers, $1.0 million held in escrow and included in current liabilities for pending resolution of the closing balance sheet, and $18.4 million of estimated fair value of contingent earn-out obligations, with a maximum of $20.0 million payable, based upon the achievement of specified operating income targets in each of the three years following the acquisition. In the second quarter of fiscal 2017, we acquired Eco Logical Australia (“ELA”), headquartered in Sydney, Australia. ELA is a multi-disciplinary consulting firm with over 160 staff that provides innovative, high-end environmental and ecological services, and is part of our CIG segment. The fair value of the purchase price for ELA was $9.9 million . This amount consists of $8.3 million of cash payments made to the sellers and $1.6 million of estimated fair value of contingent earn-out obligations, with a maximum of $1.7 million payable, based upon the achievement of specified operating income targets in each of the two years following the acquisition. Goodwill additions resulting from the above business combinations are primarily attributable to the existing workforce of the acquired companies and the synergies expected to arise after the acquisitions. The goodwill addition related to the fiscal 2018 acquisition primarily represents the value of a workforce with distinct expertise in the sustainable infrastructure design market. The goodwill addition related to the fiscal 2017 acquisition primarily represents the value of a workforce with distinct expertise in the environmental and ecological markets. In addition, these acquired capabilities, when combined with our existing global consulting and engineering business, result in opportunities that allow us to provide services under contracts that could not have been pursued individually by either us or the acquired companies. The results of these acquisitions were included in our consolidated financial statements from their respective closing dates. These acquisitions were not considered material to our consolidated financial statements. As a result, no pro forma information has been provided. Backlog, client relations and trade names intangible assets include the fair value of existing contracts and the underlying customer relationships with lives ranging from 1 to 10 years, and trade names with lives ranging from 3 to 5 years. For detailed information regarding our intangible assets, see Note 4, "Goodwill and Intangible Assets". Most of our acquisition agreements include contingent earn-out agreements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based on our valuations of the acquired companies, and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of any earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in “Current contingent earn-out liabilities” and “Long-term contingent earn-out liabilities” on our consolidated balance sheets. We consider several factors when determining that contingent earn-out liabilities are part of the purchase price, including the following: (1) the valuation of our acquisitions is not supported solely by the initial consideration paid, and the contingent earn-out formula is a critical and material component of the valuation approach to determining the purchase price; and (2) the former owners of acquired companies that remain as key employees receive compensation other than contingent earn-out payments at a reasonable level compared with the compensation of our other key employees. The contingent earn-out payments are not affected by employment termination. We measure our contingent earn-out liabilities at fair value on a recurring basis using significant unobservable inputs classified within Level 3 of the fair value hierarchy. We use a probability-weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount. The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally two or three years), and the probability outcome percentages we assign to each scenario. Significant increases or decreases to either of these inputs in isolation would result in a significantly higher or lower liability, with a higher liability capped by the contractual maximum of the contingent earn-out obligation. Ultimately, the liability will be equivalent to the amount paid, and the difference between the fair value estimate and amount paid will be recorded in earnings. The amount paid that is less than or equal to the contingent earn-out liability on the acquisition date is reflected as cash used in financing activities in our consolidated statements of cash flows. Any amount paid in excess of the contingent earn-out liability on the acquisition date is reflected as cash used in operating activities. We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. We had no adjustments to our contingent earn-out liabilities in the first quarters of fiscal 2018 and 2017 . At December 31, 2017 , there was a total potential maximum of $28.9 million of outstanding contingent consideration related to acquisitions. Of this amount, $ 21.1 million was estimated as the fair value and accrued on our consolidated balance sheet. Subsequent Event. On January 17, 2018, we announced a definitive agreement to acquire Norman Disney & Young (“NDY”), a leader in sustainable infrastructure engineering design. NDY is an Australian-based global engineering design firm with more than 700 professionals operating in offices throughout Australia, the Asia-Pacific region, the United Kingdom, and Canada. The acquisition is subject to the satisfaction of customary closing conditions and is expected to be completed during the second quarter of fiscal 2018. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The following table summarizes the changes in the carrying value of goodwill: GSG CIG Total (in thousands) Balance at October 1, 2017 $ 361,761 $ 379,125 $ 740,886 Goodwill additions 24,522 — 24,522 Foreign exchange impact (545 ) (1,408 ) (1,953 ) Balance at December 31, 2017 $ 385,738 $ 377,717 $ 763,455 The goodwill addition of $24.5 million resulted from our acquisition of Glumac. The purchase price allocation for Glumac is preliminary and subject to adjustment based upon the final determination of the net assets acquired and information to perform the final valuation. Foreign exchange impact relates to our foreign subsidiaries with functional currencies that are different than our reporting currency. The gross amounts of goodwill for GSG were $403.4 million and $379.5 million at December 31, 2017 and October 1, 2017 , respectively, excluding $17.7 million of accumulated impairment. The gross amounts of goodwill for CIG were $475.6 million and $477.0 million at December 31, 2017 and October 1, 2017 , respectively, excluding $97.9 million of accumulated impairment. We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our most recent annual review at July 3, 2017 (i.e. the first day of our fourth quarter in fiscal 2017 ) indicated that we had no impairment of goodwill, and all of our reporting units had estimated fair values that were in excess of their carrying values, including goodwill. We regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy, or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. The reorganization of our core operations, described in Note 1, "Basis of Presentation" and Note 10, "Reportable Segments", also impacted the definition of our reporting units for goodwill impairment testing. As a result, on October 2, 2017, we performed impairment testing for goodwill under our new segment structure and determined that the estimated fair value of each new reporting unit exceeded its corresponding carrying amount including recorded goodwill. Although we believe that our estimates of fair value for our reporting units are reasonable, if financial performance for our reporting units falls significantly below our expectations or market prices for similar businesses decline, the goodwill for our reporting units could become impaired. We estimate the fair value of all reporting units with a goodwill balance based on a comparison and weighting of the income approach (weighted 70% ), specifically the discounted cash flow method, and the market approach (weighted 30% ), which estimates the fair value of our reporting units based upon comparable market prices and recent transactions and also validates the reasonableness of the multiples from the income approach. The resulting fair value is most sensitive to the assumptions we use in our discounted cash flow analysis. The assumptions that have the most significant impact on the fair value calculation are the reporting unit’s revenue growth rate and operating profit margin, and the discount rate used to convert future estimated cash flows to a single present value amount. The gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets - net” on our consolidated balance sheets, were as follows: December 31, 2017 October 1, 2017 Weighted- Average Remaining Life (in Years) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization ($ in thousands) Non-compete agreements 0.0 $ 85 $ (85 ) $ 495 $ (493 ) Client relations 2.8 54,940 (41,700 ) 90,297 (75,074 ) Backlog 1.1 21,896 (13,530 ) 21,518 (13,301 ) Trade names 3.0 5,311 (2,384 ) 6,685 (3,439 ) Total $ 82,232 $ (57,699 ) $ 118,995 $ (92,307 ) Amortization expense for the first quarters of fiscal 2018 and 2017 was $ 4.6 million and $ 5.9 million, respectively. Estimated amortization expense for the remainder of fiscal 2018 and succeeding years is as follows: Amount (in thousands) 2018 $ 12,413 2019 7,027 2020 2,799 2021 1,654 2022 411 Beyond 229 Total $ 24,533 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: December 31, October 1, (in thousands) Equipment, furniture and fixtures 149,705 150,026 Leasehold improvements 30,212 27,689 Land and buildings $ 3,716 $ 3,680 Total property and equipment 183,633 181,395 Accumulated depreciation (126,704 ) (124,560 ) Property and equipment, net $ 56,929 $ 56,835 The depreciation expense related to property and equipment was $ 5.2 million and $ 5.3 million for the first quarters of fiscal 2018 and 2017 , respectively. |
Stock Repurchase and Dividends
Stock Repurchase and Dividends | 3 Months Ended |
Dec. 31, 2017 | |
Stock Repurchase and Dividends | |
Stock Repurchase and Dividends | Stock Repurchase and Dividends On November 7, 2016, the Board of Directors authorized a new stock repurchase program under which we could repurchase up to $200 million of our common stock. In the first quarter of fiscal 2018 , we repurchased through open market purchases under this program a total of 514,676 shares at an average price of $ 48.57 for a total cost of $ 25.0 million. On November 7, 2017, the Board of Directors declared a quarterly cash dividend of $0.10 per share payable on December 15, 2017 to stockholders of record as of the close of business on November 30, 2017. Dividends totaling $ 5.6 million and $ 5.1 million were paid in the first quarters of fiscal 2018 and 2017 , respectively. Subsequent Event. On January 29, 2018, the Board of Directors declared a quarterly cash dividend of $0.10 per share payable on March 2, 2018 to stockholders of record as of the close of business on February 14, 2018. |
Stockholders' Equity and Stock
Stockholders' Equity and Stock Compensation Plans | 3 Months Ended |
Dec. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity and Stock Compensation Plans | Stockholders’ Equity and Stock Compensation Plans We recognize the fair value of our stock-based compensation awards as compensation expense on a straight-line basis over the requisite service period in which the award vests. Stock-based compensation expense for the first quarters of fiscal 2018 and 2017 was $ 4.0 million and $ 3.2 million , respectively. The majority of these amounts were included in “Selling, general and administrative (“SG&A”) expenses” in our consolidated statements of income. In the first quarter of fiscal 2018 , we granted 170,222 stock options with an exercise price of $47.95 per share and an estimated weighted-average fair value of $14.79 per share to our non-employee directors and executive officers. The executive officer options vest over a four -year period, and the non-employee director options vest after one year. In addition, we awarded 98,599 performance shares units (“PSUs”) to our non-employee directors and executive officers at the fair value of $56.10 per share on the award date. All of the PSUs are performance-based and vest, if at all, after the conclusion of the three -year performance period. The number of PSUs that ultimately vest is based 50% on the growth in our diluted earnings per share and 50% on our total shareholder return relative to a peer group of companies and a stock market index over the vesting period. Additionally, we awarded 185,651 restricted stock units (“RSUs”) to our non-employee directors, executive officers and employees at the fair value of $47.95 per share on the award date. All of the executive officer and employee RSUs have time-based vesting over a four -year period, and the non-employee director RSUs vest after one year. |
Earnings Per Share ("EPS")
Earnings Per Share ("EPS") | 3 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share ("EPS") | Earnings Per Share (“EPS”) Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding, less unvested restricted stock for the period. Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding and dilutive potential common shares for the period. Potential common shares include the weighted-average dilutive effects of outstanding stock options and unvested restricted stock using the treasury stock method. The following table sets forth the number of weighted-average shares used to compute basic and diluted EPS: Three Months Ended December 31, January 1, (in thousands, except per share data) Net income attributable to Tetra Tech $ 46,034 $ 26,562 Weighted-average common shares outstanding – basic 55,855 57,099 Effect of dilutive stock options and unvested restricted stock 1,020 1,046 Weighted-average common stock outstanding – diluted 56,875 58,145 Earnings per share attributable to Tetra Tech: Basic $ 0.82 $ 0.47 Diluted $ 0.81 $ 0.46 For the first quarters of fiscal 2018 and 2017 , 0.3 million and 0.1 million options, respectively, were excluded from the calculation of dilutive potential common shares because the assumed proceeds per share exceeded the average market price per share during the periods. Therefore, their inclusion would have been anti-dilutive. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes In the first quarter of fiscal 2018 , we recorded an income tax benefit of $0.6 million , representing an effective tax rate of (1.4)% . This tax rate reflects the impact of the comprehensive tax legislation enacted by the U.S. government on December 22, 2017, which is commonly referred to as the Tax Cuts and Jobs Act ("TCJA"). The TCJA significantly revised the U.S. corporate income tax regime by, among other things, lowering the U.S. corporate tax rate from 35% to 21% effective January 1, 2018, while also repealing the deduction for domestic production activities, limiting the deductibility of certain executive compensation, implementing a territorial tax system, and imposing a one-time repatriation tax on deemed repatriated earnings of foreign subsidiaries. As we have a September 30 fiscal year-end, our U.S. federal corporate income tax rate will be blended in fiscal 2018, resulting in a statutory federal rate of approximately 24.5% (3 months at 35% and 9 months at 21%), and will be 21% for subsequent fiscal years. GAAP requires that the impact of tax legislation be recognized in the period in which the tax law was enacted. As a result of the TCJA, we reduced our deferred tax liabilities and recorded a one-time deferred tax benefit of approximately $10.1 million in the first quarter of fiscal 2018 to reflect our estimate of temporary differences in the United States that will be recovered or settled in fiscal 2018 based on the 24.5% blended corporate tax rate or based on the 21% tax rate in fiscal 2019 and beyond versus the previous enacted 35% corporate tax rate. Excluding this tax benefit, our effective tax rate in the first quarter of fiscal 2018 was 20.9% . The TCJA also imposes a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries. We analyzed this provision of the TCJA and our related foreign earnings accumulated under legacy tax laws during the first quarter of fiscal 2018. Based on our preliminary analysis of tax earnings and profits and tax deficits at the prescribed measurement dates, we have a cumulative net tax deficit and do not believe we have any tax liability related to this tax. The one-time revaluation of our deferred tax liabilities and our estimate of the one-time transition tax on foreign earnings are both preliminary and subject to adjustment as we refine the information necessary to record the final values. The provisional amounts incorporate assumptions made based on our current interpretation of the TCJA and may change as we receive additional clarification on the implementation guidance. Additionally, in order to complete the valuation of our deferred tax liabilities, additional information related to the timing of the recovery or settlement of our deferred tax assets and liabilities and the effective tax rates (including state tax rates) that will apply needs to be obtained and analyzed. Similarly, information related to the computation of our foreign earnings and profits subject to the one-time transition tax requires further analysis before we make a final determination that we have no related liability. The U.S. Securities and Exchange Commission ("SEC") has issued rules that would allow for a measurement period of up to one year after the enactment date of the TCJA to finalize the recording of the related tax impacts. We currently anticipate finalizing and recording any resulting adjustments by the end of our current fiscal year ending September 30, 2018. During the first quarter of fiscal 2017, we adopted accounting guidance which requires excess tax benefits and deficiencies on share-based payments to be recorded as an income tax benefit or expense, respectively, in the consolidated statement of income rather than being recorded in additional paid-in capital on the consolidated balance sheet. As a result, we recognized income tax benefits of $3.2 million and $1.8 million in the first quarters of fiscal 2018 and fiscal 2017, respectively. Excluding these discrete amounts from both periods and the one-time impacts of the TCJA, the effective tax rates for the first quarters of fiscal 2018 and 2017 were 28.0% and 32.8% , respectively. We evaluate the realizability of our deferred tax assets by assessing the valuation allowance and adjust the allowance, if necessary. The factors used to assess the likelihood of realization are our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The ability or failure to achieve the forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets. Based on future operating results in certain jurisdictions, it is possible that the current valuation allowance positions of those jurisdictions could be adjusted in the next 12 months. Because of the complexity of the new Global Intangible Low-Taxed Income ("GILTI") tax rules, we continue to evaluate this provision of the TCJA and the application of Accounting Standards Codification 740, Income Taxes. Under GAAP, we are allowed to make an accounting policy choice of either: 1) treating taxes due on future U.S. inclusions in taxable income related to GILTI as a current period expense when incurred (the "period cost method") or 2) factoring such amounts into our measurement of our deferred taxes (the "deferred method"). Our selection of an accounting policy with respect to the new GILTI tax rules will depend, in part, on analyzing our global income to determine whether we expect to have future U.S. inclusions in taxable income related to GILTI and, if so, what the impact is expected to be. Whether we expect to have future U.S. inclusions in taxable income related to GILTI depends on not only our current structure and estimated future results of global operations, but also our intent and ability to modify our structure. We are currently in the process of analyzing our structure and, as a result, we are not yet able to reasonably estimate the effect of this provision of the TCJA. Therefore, we have not made any adjustments related to potential GILTI tax in our consolidated financial statements, and have not made a policy decision regarding whether to record deferred tax on GILTI. As of December 31, 2017 and October 1, 2017 , the liability for income taxes associated with uncertain tax positions was $9.4 million and $9.3 million , respectively. These uncertain tax positions substantially relate to ongoing examinations, which are reasonably likely to be resolved within the next 12 months. |
Reportable Segments
Reportable Segments | 3 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments Beginning in fiscal 2018, we aligned our operations to better serve our clients and markets, resulting in two renamed reportable segments. Our GSG reportable segment primarily includes activities with U.S. government clients (federal, state and local) and all activities with development agencies worldwide. Our CIG reportable segment primarily includes activities with U.S. commercial clients and all international activities other than work for development agencies. This alignment allows us to capitalize on our growing market opportunities and enhance the development of high-end consulting and technical solutions to meet our growing client demand. We will continue to report the results of the wind-down of our non-core construction activities in the RCM segment. Prior year amounts for reportable segments have been revised to conform to the current-year presentation. GSG provides consulting and engineering services primarily to U.S. government clients (federal, state and local) and development agencies worldwide. GSG supports U.S. government civilian and defense agencies with services in water, environment, infrastructure, information technology, and emergency management services. GSG also provides engineering design services for municipal and commercial clients, especially in water infrastructure, solid waste, and high-end sustainable infrastructure designs. Additionally, GSG provides a wide range of support to development agencies worldwide. CIG provides consulting and engineering services primarily to U.S. commercial clients and international clients, both commercial and local government. CIG supports commercial clients across the Fortune 500, oil and gas, energy utilities, and mining markets. CIG also provides infrastructure and related environmental and geotechnical services, testing, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), as well as Brazil and Chile. CIG also provides field construction management activities in the United States and Western Canada. We report the results of the wind-down of our non-core construction activities in the RCM reportable segment. The remaining backlog for RCM as of December 31, 2017 was immaterial as the related projects were substantially completed. 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 revenues and transfers as if they 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. Reportable Segments The following tables set forth summarized financial information regarding our reportable segments: Three Months Ended December 31, January 1, (in thousands) Revenue GSG $ 442,772 $ 362,859 CIG 331,513 318,071 RCM 6,807 8,231 Elimination of inter-segment revenue (21,343 ) (20,310 ) Total revenue $ 759,749 $ 668,851 Income (loss) from operations GSG $ 39,125 $ 30,168 CIG 21,294 21,544 RCM (1,158 ) (3,042 ) Corporate (1) (10,672 ) (8,815 ) Total income from operations $ 48,589 $ 39,855 (1) Includes amortization of intangibles, other costs, and other income not allocable to our reportable segments. December 31, October 1, (in thousands) Total Assets GSG $ 489,893 $ 378,839 CIG 481,924 518,697 RCM 33,030 33,620 Corporate (1) 966,140 971,589 Total assets $ 1,970,987 $ 1,902,745 (1) Corporate assets consist of assets not allocated to our reportable 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. For the three -month periods ended December 31, 2017 and January 1, 2017, GSG and CIG generated revenue from all client sectors. The following table represents our revenue by client sector: Three Months Ended December 31, January 1, (in thousands) Client Sector U.S. federal government (1) $ 236,249 $ 222,634 International (2) 164,960 172,457 U.S. state and local government 151,754 83,494 U.S. commercial 206,786 190,266 Total $ 759,749 $ 668,851 (1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from foreign operations, primarily in Canada and Australia, and revenue generated from non-U.S. clients. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The fair value of long-term debt was determined using the present value of future cash flows based on the borrowing rates currently available for debt with similar terms and maturities (Level 2 measurement, as described in “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended October 1, 2017 ). The carrying value of our long-term debt approximated fair value at December 31, 2017 and October 1, 2017 . As of December 31, 2017 , we had borrowings of $ 447.6 million outstanding under our credit agreement, which were used to fund our business acquisitions, working capital needs, stock repurchases, dividends, capital expenditures and contingent earn-outs. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We use certain interest rate derivative contracts to hedge interest rate exposures on our variable rate debt. We enter into foreign currency derivative contracts with financial institutions to reduce the risk that cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. Our hedging program is not designated for trading or speculative purposes. We recognize derivative instruments as either assets or liabilities on our consolidated balance sheets at fair value. We record changes in the fair value (i.e., gains or losses) of the derivatives that have been designated as cash flow hedges in our consolidated balance sheets as accumulated other comprehensive income (loss), and in our consolidated statements of income for those derivatives designated as fair value hedges. In fiscal 2013, we entered into three interest rate swap agreements that we designated as cash flow hedges to fix the variable interest rates on a portion of borrowings under our term loan facility. In the first quarter of fiscal 2014, we entered into two interest rate swap agreements that we designated as cash flow hedges to fix the variable interest rates on the borrowings under our term loan facility. At December 31, 2017 , the effective portion of our interest rate swap agreements designated as cash flow hedges before tax effect was $0.1 million and is expected to be reclassified from accumulated other comprehensive income (loss) to interest expense within the next 12 months. As of December 31, 2017 , the notional principal, fixed rates and related expiration dates of our outstanding interest rate swap agreements are as follows: Notional Amount (in thousands) Fixed Rate Expiration Date $39,398 1.36% May 2018 39,398 1.34% May 2018 39,398 1.35% May 2018 19,700 1.23% May 2018 19,700 1.24% May 2018 The fair values of our outstanding derivatives designated as hedging instruments were as follows: Fair Value of Derivative Instruments as of Balance Sheet Location December 31, October 1, (in thousands) Interest rate swap agreements Other current assets $ 118 $ 49 The impact of the effective portions of derivative instruments in cash flow hedging relationships and fair value relationships on income and other comprehensive income was immaterial for the first three months of fiscal 2018 and the fiscal year ended October 1, 2017 . Additionally, there were no ineffective portions of derivative instruments. Accordingly, no amounts were excluded from effectiveness testing for our interest rate swap agreements. |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) | Reclassifications Out of Accumulated Other Comprehensive Income (Loss) The accumulated balances and reporting period activities for the three months ended December 31, 2017 and January 1, 2017 related to reclassifications out of accumulated other comprehensive loss are summarized as follows: Three Months Ended Foreign Currency Translation Adjustments Gain (Loss) on Derivative Instruments Accumulated Other Comprehensive Loss (in thousands) Balances at October 2, 2016 $ (126,844 ) $ (1,164 ) $ (128,008 ) Other comprehensive income (loss) before reclassifications (16,182 ) 1,338 (14,844 ) Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (342 ) (342 ) Net current-period other comprehensive income (loss) (16,182 ) 996 (15,186 ) Balances at January 1, 2017 $ (143,026 ) $ (168 ) $ (143,194 ) Balances at October 1, 2017 $ (98,946 ) $ 446 $ (98,500 ) Other comprehensive income (loss) before reclassifications (3,467 ) 84 (3,383 ) Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (18 ) (18 ) Net current-period other comprehensive income (loss) (3,467 ) 66 (3,401 ) Balances at December 31, 2017 $ (102,413 ) $ 512 $ (101,901 ) (1) This accumulated other comprehensive component is reclassified to "Interest expense" in our consolidated statements of income. See Note 12, "Derivative Financial Instruments", for more information. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to certain claims and lawsuits typically filed against the engineering, consulting and construction profession, alleging primarily professional errors or omissions. We carry professional liability insurance, subject to certain deductibles and policy limits, against such claims. However, in some actions, parties are seeking damages that exceed our insurance coverage or for which we are not insured. While management does not believe that the resolution of these claims will have a material adverse effect, individually or in aggregate, on our financial position, results of operations or cash flows, management acknowledges the uncertainty surrounding the ultimate resolution of these matters. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Dec. 31, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued an accounting standard that will supersede existing revenue recognition guidance under current GAAP. The new standard is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods and services. The standard may be applied retrospectively to each prior period presented or retrospectively with the cumulative effect recognized as of the date of initial application. This guidance is effective for fiscal reporting periods and interim periods within that reporting period, beginning after December 15, 2017 (first quarter of fiscal 2019 for us). We continue to evaluate the impact that this guidance will have on our consolidated financial statements. We expect to use the modified retrospective method, which may result in a cumulative effect adjustment as of the date of adoption. In January 2016, the FASB issued guidance that generally requires companies to measure investments in other entities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2017 (first quarter of fiscal 2019 for us). We do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In February 2016, the FASB issued guidance that primarily requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018 (first quarter of fiscal 2020 for us). Early adoption is permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In June 2016, the FASB issued updated guidance which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2019 (first quarter of fiscal 2021 for us). Early adoption is permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In August 2016, the FASB issued guidance to address eight specific cash flow issues to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2017 (first quarter of fiscal 2019 for us). Early adoption is permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In October 2016, the FASB issued updated guidance which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This guidance is effective for fiscal reporting periods and interim reporting periods within those fiscal reporting periods, beginning after December 15, 2017 (first quarter of fiscal 2019 for us). Early adoption is permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In November 2016, the FASB issued updated guidance which provides amendments to address the classification and presentation of changes in restricted cash and in the statement of cash flows. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2017 (first quarter of fiscal 2019 for us). Early adoption is permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In January 2017, the FASB issued updated guidance to simplify the test for goodwill impairment. This guidance eliminates step two from the goodwill impairment test. Under the updated guidance, an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value; however, the loss recognized should not exceed the total amount of goodwill allocated to the reporting unit. This guidance is effective for annual or any interim goodwill impairment tests in fiscal years beginning after December 15, 2019 (first quarter of fiscal 2021for us), on a prospective basis. Earlier adoption is permitted for goodwill impairment tests performed on testing dates after January 1, 2017. We adopted this guidance in the first quarter of our fiscal 2018, and the adoption of this guidance had no impact on our consolidated financial statements. In May 2017, the FASB issued updated guidance to clarify when changes to the terms or conditions of a share-based payment award must be accounted for as modifications. Under the updated guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award changes as a result of the change in terms or conditions. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2017 (first quarter of fiscal 2019 for us), on a prospective basis. Early adoption is permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In August 2017, the FASB issued accounting guidance on hedging activities. The amendment better aligns an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2018 (first quarter of fiscal 2020 for us). Early adoption is permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. |
Accounts Receivable - Net and22
Accounts Receivable - Net and Revenue Recognition (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Accounts Receivable - Net and Revenue Recognition [Abstract] | |
Schedule of net accounts receivable and billings in excess of costs on uncompleted contracts | Net accounts receivable and billings in excess of costs on uncompleted contracts consisted of the following: December 31, October 1, (in thousands) Billed $ 437,317 $ 376,287 Unbilled 419,912 404,899 Contract retentions 23,109 39,840 Total accounts receivable – gross 880,338 821,026 Allowance for doubtful accounts (34,137 ) (32,259 ) Total accounts receivable – net $ 846,201 $ 788,767 Billings in excess of costs on uncompleted contracts $ 132,930 $ 117,499 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of changes in the carrying value of goodwill | The following table summarizes the changes in the carrying value of goodwill: GSG CIG Total (in thousands) Balance at October 1, 2017 $ 361,761 $ 379,125 $ 740,886 Goodwill additions 24,522 — 24,522 Foreign exchange impact (545 ) (1,408 ) (1,953 ) Balance at December 31, 2017 $ 385,738 $ 377,717 $ 763,455 |
Summary of gross amount and accumulated amortization of acquired identifiable intangible assets with finite useful lives | The gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets - net” on our consolidated balance sheets, were as follows: December 31, 2017 October 1, 2017 Weighted- Average Remaining Life (in Years) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization ($ in thousands) Non-compete agreements 0.0 $ 85 $ (85 ) $ 495 $ (493 ) Client relations 2.8 54,940 (41,700 ) 90,297 (75,074 ) Backlog 1.1 21,896 (13,530 ) 21,518 (13,301 ) Trade names 3.0 5,311 (2,384 ) 6,685 (3,439 ) Total $ 82,232 $ (57,699 ) $ 118,995 $ (92,307 ) |
Schedule of estimated amortization expense for remainder of fiscal and succeeding years | Estimated amortization expense for the remainder of fiscal 2018 and succeeding years is as follows: Amount (in thousands) 2018 $ 12,413 2019 7,027 2020 2,799 2021 1,654 2022 411 Beyond 229 Total $ 24,533 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property and equipment | Property and equipment consisted of the following: December 31, October 1, (in thousands) Equipment, furniture and fixtures 149,705 150,026 Leasehold improvements 30,212 27,689 Land and buildings $ 3,716 $ 3,680 Total property and equipment 183,633 181,395 Accumulated depreciation (126,704 ) (124,560 ) Property and equipment, net $ 56,929 $ 56,835 |
Earnings Per Share ("EPS") (Tab
Earnings Per Share ("EPS") (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Earnings Per Share [Abstract] | |
Schedule of number of weighted-average shares used to compute basic and diluted EPS | The following table sets forth the number of weighted-average shares used to compute basic and diluted EPS: Three Months Ended December 31, January 1, (in thousands, except per share data) Net income attributable to Tetra Tech $ 46,034 $ 26,562 Weighted-average common shares outstanding – basic 55,855 57,099 Effect of dilutive stock options and unvested restricted stock 1,020 1,046 Weighted-average common stock outstanding – diluted 56,875 58,145 Earnings per share attributable to Tetra Tech: Basic $ 0.82 $ 0.47 Diluted $ 0.81 $ 0.46 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Summarized financial information of reportable segments | The following tables set forth summarized financial information regarding our reportable segments: Three Months Ended December 31, January 1, (in thousands) Revenue GSG $ 442,772 $ 362,859 CIG 331,513 318,071 RCM 6,807 8,231 Elimination of inter-segment revenue (21,343 ) (20,310 ) Total revenue $ 759,749 $ 668,851 Income (loss) from operations GSG $ 39,125 $ 30,168 CIG 21,294 21,544 RCM (1,158 ) (3,042 ) Corporate (1) (10,672 ) (8,815 ) Total income from operations $ 48,589 $ 39,855 (1) Includes amortization of intangibles, other costs, and other income not allocable to our reportable segments. December 31, October 1, (in thousands) Total Assets GSG $ 489,893 $ 378,839 CIG 481,924 518,697 RCM 33,030 33,620 Corporate (1) 966,140 971,589 Total assets $ 1,970,987 $ 1,902,745 (1) Corporate assets consist of assets not allocated to our reportable segments including goodwill, intangible assets, deferred income taxes and certain other assets . |
Summary of revenue by client sector | The following table represents our revenue by client sector: Three Months Ended December 31, January 1, (in thousands) Client Sector U.S. federal government (1) $ 236,249 $ 222,634 International (2) 164,960 172,457 U.S. state and local government 151,754 83,494 U.S. commercial 206,786 190,266 Total $ 759,749 $ 668,851 (1) Includes revenue generated under U.S. federal government contracts performed outside the United States. (2) Includes revenue generated from foreign operations, primarily in Canada and Australia, and revenue generated from non-U.S. clients. |
Derivative Financial Instrume27
Derivative Financial Instruments (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional principal, fixed rates and related expiration dates of outstanding interest rate swap agreements | As of December 31, 2017 , the notional principal, fixed rates and related expiration dates of our outstanding interest rate swap agreements are as follows: Notional Amount (in thousands) Fixed Rate Expiration Date $39,398 1.36% May 2018 39,398 1.34% May 2018 39,398 1.35% May 2018 19,700 1.23% May 2018 19,700 1.24% May 2018 |
Schedule of fair values of the entity's outstanding derivatives designated as hedging instruments | The fair values of our outstanding derivatives designated as hedging instruments were as follows: Fair Value of Derivative Instruments as of Balance Sheet Location December 31, October 1, (in thousands) Interest rate swap agreements Other current assets $ 118 $ 49 |
Reclassifications Out of Accu28
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Dec. 31, 2017 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | |
Summary of reclassifications out of accumulated other comprehensive loss | The accumulated balances and reporting period activities for the three months ended December 31, 2017 and January 1, 2017 related to reclassifications out of accumulated other comprehensive loss are summarized as follows: Three Months Ended Foreign Currency Translation Adjustments Gain (Loss) on Derivative Instruments Accumulated Other Comprehensive Loss (in thousands) Balances at October 2, 2016 $ (126,844 ) $ (1,164 ) $ (128,008 ) Other comprehensive income (loss) before reclassifications (16,182 ) 1,338 (14,844 ) Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (342 ) (342 ) Net current-period other comprehensive income (loss) (16,182 ) 996 (15,186 ) Balances at January 1, 2017 $ (143,026 ) $ (168 ) $ (143,194 ) Balances at October 1, 2017 $ (98,946 ) $ 446 $ (98,500 ) Other comprehensive income (loss) before reclassifications (3,467 ) 84 (3,383 ) Amounts reclassified from accumulated other comprehensive income Interest rate contracts, net of tax (1) — (18 ) (18 ) Net current-period other comprehensive income (loss) (3,467 ) 66 (3,401 ) Balances at December 31, 2017 $ (102,413 ) $ 512 $ (101,901 ) (1) This accumulated other comprehensive component is reclassified to "Interest expense" in our consolidated statements of income. See Note 12, "Derivative Financial Instruments", for more information. |
Basis of Presentation (Details)
Basis of Presentation (Details) | 3 Months Ended |
Dec. 31, 2017segment | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of renamed reportable segments | 2 |
Accounts Receivable - Net and30
Accounts Receivable - Net and Revenue Recognition - Net Accounts Receivable and Billings in Excess of Costs on Uncompleted Contracts (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Oct. 01, 2017 |
Accounts Receivable - Net and Revenue Recognition [Abstract] | ||
Billed | $ 437,317 | $ 376,287 |
Unbilled | 419,912 | 404,899 |
Contract retentions | 23,109 | 39,840 |
Total accounts receivable – gross | 880,338 | 821,026 |
Allowance for doubtful accounts | (34,137) | (32,259) |
Total accounts receivable – net | 846,201 | 788,767 |
Billings in excess of costs on uncompleted contracts | $ 132,930 | $ 117,499 |
Accounts Receivable - Net and31
Accounts Receivable - Net and Revenue Recognition (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | Oct. 01, 2017 | |
Accounts Receivable - Net and Revenue Recognition | |||
Period for billing and collecting unbilled receivables | 12 months | ||
Period for earning majority of billings in excess of costs | 12 months | ||
Unbilled accounts receivable related to claims and requests for equitable adjustment on contracts | $ 61,000,000 | $ 59,000,000 | |
Gains (losses) from claim settlement | 0 | $ 0 | |
Billed accounts receivable related to U.S. federal government contracts | 65,000,000 | 45,400,000 | |
U.S. federal government unbilled receivables | $ 116,800,000 | $ 109,700,000 | |
Threshold percentage for disclosure of accounts receivable from a single client | 10.00% | 10.00% | |
Net unfavorable operating income adjustments | 4,000,000 | ||
Liabilities for anticipated losses | $ 4,500,000 | $ 8,100,000 | |
Estimated cost to complete the related contracts | 4,700,000 | ||
CIG | |||
Accounts Receivable - Net and Revenue Recognition | |||
Net unfavorable operating income adjustments | $ 700,000 | 2,300,000 | |
RCM | |||
Accounts Receivable - Net and Revenue Recognition | |||
Net unfavorable operating income adjustments | $ 1,700,000 |
Mergers and Acquisitions - Narr
Mergers and Acquisitions - Narrative (Details) $ in Millions | Oct. 02, 2017USD ($)employee | Apr. 01, 2018employee | Dec. 31, 2017USD ($) | Apr. 02, 2017USD ($)employee |
Mergers and Acquisitions | ||||
Contingent earn-out liability | $ 21.1 | |||
Aggregate maximum of contingent consideration | $ 28.9 | |||
Minimum | ||||
Mergers and Acquisitions | ||||
Earn-out period | 2 years | |||
Minimum | Existing customer contracts | ||||
Mergers and Acquisitions | ||||
Useful life of intangible assets | 1 year | |||
Minimum | Trade names | ||||
Mergers and Acquisitions | ||||
Useful life of intangible assets | 3 years | |||
Maximum | ||||
Mergers and Acquisitions | ||||
Earn-out period | 3 years | |||
Maximum | Existing customer contracts | ||||
Mergers and Acquisitions | ||||
Useful life of intangible assets | 10 years | |||
Maximum | Trade names | ||||
Mergers and Acquisitions | ||||
Useful life of intangible assets | 5 years | |||
Glumac | ||||
Mergers and Acquisitions | ||||
Number of employees acquired in acquisition | employee | 300 | |||
Fair value of acquisition purchase price | $ 38.4 | |||
Cash paid to the former owners | 19 | |||
Amount held in escrow | 1 | |||
Contingent earn-out liability | 18.4 | |||
Aggregate maximum of contingent consideration | $ 20 | |||
Earn-out period | 3 years | |||
Eco Logical Australia | ||||
Mergers and Acquisitions | ||||
Number of employees acquired in acquisition | employee | 160 | |||
Fair value of acquisition purchase price | $ 9.9 | |||
Cash paid to the former owners | 8.3 | |||
Contingent earn-out liability | 1.6 | |||
Aggregate maximum of contingent consideration | $ 1.7 | |||
Earn-out period | 2 years | |||
Norman Disney & Young | Subsequent Event | Scenario, Forecast | ||||
Mergers and Acquisitions | ||||
Number of employees acquired in acquisition | employee | 700 |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill | |
Balance at beginning of the period | $ 740,886 |
Goodwill additions | 24,522 |
Foreign exchange impact | (1,953) |
Balance at end of the period | 763,455 |
GSG | |
Goodwill | |
Balance at beginning of the period | 361,761 |
Goodwill additions | 24,522 |
Foreign exchange impact | (545) |
Balance at end of the period | 385,738 |
CIG | |
Goodwill | |
Balance at beginning of the period | 379,125 |
Goodwill additions | 0 |
Foreign exchange impact | (1,408) |
Balance at end of the period | $ 377,717 |
Goodwill and Intangible Asset34
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | Jul. 03, 2017 | Dec. 31, 2017 | Oct. 01, 2017 |
Goodwill [Line Items] | |||
Goodwill additions | $ 24,522,000 | ||
Impairment of goodwill | $ 0 | ||
GSG | |||
Goodwill [Line Items] | |||
Goodwill additions | 24,522,000 | ||
Gross amounts of goodwill | 403,400,000 | $ 379,500,000 | |
Accumulated impairment | 17,700,000 | 17,700,000 | |
CIG | |||
Goodwill [Line Items] | |||
Goodwill additions | 0 | ||
Gross amounts of goodwill | 475,600,000 | 477,000,000 | |
Accumulated impairment | 97,900,000 | $ 97,900,000 | |
Glumac | |||
Goodwill [Line Items] | |||
Goodwill additions | $ 24,500,000 | ||
Income approach | |||
Goodwill [Line Items] | |||
Weighted rate used in fair value of goodwill (as a percent) | 70.00% | ||
Discounted cash flow and market approach | |||
Goodwill [Line Items] | |||
Weighted rate used in fair value of goodwill (as a percent) | 30.00% |
Goodwill and Intangible Asset35
Goodwill and Intangible Assets - Finite Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Oct. 01, 2017 | |
Finite-lived intangible assets | |||
Gross Amount | $ 82,232 | $ 118,995 | |
Accumulated Amortization | (57,699) | (92,307) | |
Amortization expense | 4,600 | $ 5,900 | |
Estimated amortization expense | |||
2,018 | 12,413 | ||
2,019 | 7,027 | ||
2,020 | 2,799 | ||
2,021 | 1,654 | ||
2,022 | 411 | ||
Beyond | 229 | ||
Total | $ 24,533 | ||
Non-compete agreements | |||
Finite-lived intangible assets | |||
Weighted- Average Remaining Life (in Years) | 0 years | ||
Gross Amount | $ 85 | 495 | |
Accumulated Amortization | $ (85) | (493) | |
Client relations | |||
Finite-lived intangible assets | |||
Weighted- Average Remaining Life (in Years) | 2 years 9 months 18 days | ||
Gross Amount | $ 54,940 | 90,297 | |
Accumulated Amortization | $ (41,700) | (75,074) | |
Backlog | |||
Finite-lived intangible assets | |||
Weighted- Average Remaining Life (in Years) | 1 year 1 month 6 days | ||
Gross Amount | $ 21,896 | 21,518 | |
Accumulated Amortization | $ (13,530) | (13,301) | |
Trade names | |||
Finite-lived intangible assets | |||
Weighted- Average Remaining Life (in Years) | 3 years | ||
Gross Amount | $ 5,311 | 6,685 | |
Accumulated Amortization | $ (2,384) | $ (3,439) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Oct. 01, 2017 | |
Property and Equipment | |||
Property and equipment, gross | $ 183,633 | $ 181,395 | |
Accumulated depreciation | (126,704) | (124,560) | |
Property and equipment, net | 56,929 | 56,835 | |
Depreciation expense related to property and equipment | 5,200 | $ 5,300 | |
Equipment, furniture and fixtures | |||
Property and Equipment | |||
Property and equipment, gross | 149,705 | 150,026 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | 30,212 | 27,689 | |
Land and buildings | |||
Property and Equipment | |||
Property and equipment, gross | $ 3,716 | $ 3,680 |
Stock Repurchase and Dividends
Stock Repurchase and Dividends (Details) - USD ($) | Jan. 29, 2018 | Nov. 07, 2017 | Dec. 31, 2017 | Jan. 01, 2017 | Nov. 07, 2016 |
Subsequent Event [Line Items] | |||||
Maximum repurchase amount under stock repurchase program | $ 200,000,000 | ||||
Shares repurchased through open market purchases (in shares) | 514,676 | ||||
Average price of shares repurchased (in dollars per share) | $ 48.57 | ||||
Cost of shares repurchased | $ 25,000,000 | ||||
Quarterly cash dividend declared (in dollars per share) | $ 0.10 | ||||
Dividends paid | $ 5,589,000 | $ 5,144,000 | |||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Quarterly cash dividend declared (in dollars per share) | $ 0.10 |
Stockholders' Equity and Stoc38
Stockholders' Equity and Stock Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | |
Stockholders' Equity and Stock Compensation Plans | ||
Stock-based compensation expense | $ 4 | $ 3.2 |
Non-employee directors and executive officers | ||
Stockholders' Equity and Stock Compensation Plans | ||
Options granted (in shares) | 170,222 | |
Exercise price of stock options granted (in dollars per share) | $ 47.95 | |
Weighted-average fair value of stock options granted (in dollars per share) | $ 14.79 | |
Stock options | Executive officers | ||
Stockholders' Equity and Stock Compensation Plans | ||
Vesting period | 4 years | |
Stock options | Non-employee director | ||
Stockholders' Equity and Stock Compensation Plans | ||
Vesting period | 1 year | |
Performance-based restricted stock | ||
Stockholders' Equity and Stock Compensation Plans | ||
Percentage of shares that ultimately vest depending on growth in diluted earnings per share | 50.00% | |
Percentage of shares that ultimately vest depending on the shareholder return relative to peer group of companies over vesting period | 50.00% | |
Performance-based restricted stock | Non-employee directors and executive officers | ||
Stockholders' Equity and Stock Compensation Plans | ||
Vesting period | 3 years | |
Granted (in shares) | 98,599 | |
Granted, fair value (in dollars per share) | $ 56.10 | |
Restricted stock units | Non-employee directors, executive officers and employees | ||
Stockholders' Equity and Stock Compensation Plans | ||
Granted (in shares) | 185,651 | |
Granted, fair value (in dollars per share) | $ 47.95 | |
Restricted stock units | Non-employee director | ||
Stockholders' Equity and Stock Compensation Plans | ||
Vesting period | 1 year | |
Restricted stock units | Executive officers and employees | ||
Stockholders' Equity and Stock Compensation Plans | ||
Vesting period | 4 years |
Earnings Per Share ("EPS") - Ca
Earnings Per Share ("EPS") - Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | |
Earnings Per Share [Abstract] | ||
Net income attributable to Tetra Tech | $ 46,034 | $ 26,562 |
Weighted-average common shares outstanding – basic (in shares) | 55,855 | 57,099 |
Effect of dilutive stock options and unvested restricted stock (in shares) | 1,020 | 1,046 |
Weighted-average common stock outstanding – diluted (in shares) | 56,875 | 58,145 |
Earnings per share attributable to Tetra Tech: | ||
Basic (in dollars per share) | $ 0.82 | $ 0.47 |
Diluted (in dollars per share) | $ 0.81 | $ 0.46 |
Earnings Per Share ("EPS") - An
Earnings Per Share ("EPS") - Antidilutive Securities (Details) - shares shares in Millions | 3 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | |
Stock options | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Securities excluded from the calculation of dilutive potential common shares (in shares) | 0.3 | 0.1 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017 | Jan. 01, 2017 | Sep. 30, 2018 | Oct. 01, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Income tax benefit | $ 623 | $ (10,358) | ||
Effective tax rate (as a percent) | (1.40%) | |||
Deferred tax benefit from tax reform remeasurement | $ 10,100 | |||
Effective income tax rate excluding revaluation of deferred taxes (as a percent) | 20.90% | |||
Effective income tax rate excluding excess tax benefit and TCJA impacts (as a percent) | 28.00% | 32.80% | ||
Liability for uncertain tax positions | $ 9,400 | $ 9,300 | ||
Period during which unrecognized tax benefits would affect the effective tax rate | 12 months | |||
Accounting Standards Update 2016-09 | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Excess tax benefit | $ 3,200 | $ 1,800 | ||
Scenario, Forecast | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Statutory federal tax rate | 24.50% |
Reportable Segments - Financial
Reportable Segments - Financial Information (Details) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2017USD ($)segment | Jan. 01, 2017USD ($) | Oct. 01, 2017USD ($) | |
Financial information regarding reportable segments | |||
Number of renamed reportable segments | segment | 2 | ||
Revenue | $ 759,749 | $ 668,851 | |
Income (loss) from operations | 48,589 | 39,855 | |
Total Assets | 1,970,987 | $ 1,902,745 | |
Operating segment | GSG | |||
Financial information regarding reportable segments | |||
Revenue | 442,772 | 362,859 | |
Income (loss) from operations | 39,125 | 30,168 | |
Total Assets | 489,893 | 378,839 | |
Operating segment | CIG | |||
Financial information regarding reportable segments | |||
Revenue | 331,513 | 318,071 | |
Income (loss) from operations | 21,294 | 21,544 | |
Total Assets | 481,924 | 518,697 | |
Operating segment | RCM | |||
Financial information regarding reportable segments | |||
Revenue | 6,807 | 8,231 | |
Income (loss) from operations | (1,158) | (3,042) | |
Total Assets | 33,030 | 33,620 | |
Elimination of inter-segment revenue | |||
Financial information regarding reportable segments | |||
Revenue | (21,343) | (20,310) | |
Corporate | |||
Financial information regarding reportable segments | |||
Income (loss) from operations | (10,672) | $ (8,815) | |
Total Assets | $ 966,140 | $ 971,589 |
Reportable Segments - Revenue B
Reportable Segments - Revenue By Client Sector (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | |
Revenue by client sector | ||
Threshold percentage for disclosure of revenue from a single client | 10.00% | 10.00% |
Revenue | $ 759,749 | $ 668,851 |
U.S. federal government | ||
Revenue by client sector | ||
Revenue | 236,249 | 222,634 |
International | ||
Revenue by client sector | ||
Revenue | 164,960 | 172,457 |
U.S. state and local government | ||
Revenue by client sector | ||
Revenue | 151,754 | 83,494 |
U.S. commercial | ||
Revenue by client sector | ||
Revenue | $ 206,786 | $ 190,266 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | Dec. 31, 2017USD ($) |
Fair Value Disclosures [Abstract] | |
Borrowing under credit agreement | $ 447.6 |
Derivative Financial Instrume45
Derivative Financial Instruments - General Information (Details) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2017USD ($) | Dec. 29, 2013agreement | Oct. 01, 2017USD ($) | Sep. 29, 2013agreement | |
Interest rate swap agreements | Designated as cash flow hedges | Derivatives designated as hedging instruments | ||||
Derivative Financial Instruments | ||||
Number of derivative agreements | agreement | 2 | 3 | ||
Amount of effective portion of derivatives before tax effect | $ 100,000 | |||
Period of reclassification from accumulated other comprehensive income (loss) to interest expense | 12 months | |||
Foreign currency forward contracts and interest rate swap agreements | Derivatives designated as hedging instruments | ||||
Derivative Financial Instruments | ||||
Ineffective portion of derivative instruments | $ 0 | $ 0 | ||
Amounts excluded from effectiveness testing | 0 | $ 0 | ||
Interest rate swap agreement bearing fixed rate 1.36% | ||||
Derivative Financial Instruments | ||||
Notional Amount | $ 39,398,000 | |||
Fixed Rate (as a percent) | 1.36% | |||
Interest rate swap agreement bearing fixed rate 1.34% | ||||
Derivative Financial Instruments | ||||
Notional Amount | $ 39,398,000 | |||
Fixed Rate (as a percent) | 1.34% | |||
Interest rate swap agreement bearing fixed rate 1.35% | ||||
Derivative Financial Instruments | ||||
Notional Amount | $ 39,398,000 | |||
Fixed Rate (as a percent) | 1.35% | |||
Interest rate swap agreement bearing fixed rate 1.23% | ||||
Derivative Financial Instruments | ||||
Notional Amount | $ 19,700,000 | |||
Fixed Rate (as a percent) | 1.23% | |||
Interest rate swap agreement bearing fixed rate 1.24% | ||||
Derivative Financial Instruments | ||||
Notional Amount | $ 19,700,000 | |||
Fixed Rate (as a percent) | 1.24% |
Derivative Financial Instrume46
Derivative Financial Instruments - Fair Value (Details) - USD ($) $ in Thousands | Dec. 31, 2017 | Oct. 01, 2017 |
Interest rate swap agreements | Derivatives designated as hedging instruments | Designated as cash flow hedges | Other current assets | ||
Derivative Financial Instruments | ||
Fair Value of Derivative Instruments | $ 118 | $ 49 |
Reclassifications Out of Accu47
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2017 | Jan. 01, 2017 | |
Reclassifications out of accumulated other comprehensive loss | ||
Balance at the beginning of the period | $ 928,453 | |
Other comprehensive income (loss) before reclassifications | (3,383) | $ (14,844) |
Amounts reclassified from accumulated other comprehensive income | (18) | (342) |
Net current-period other comprehensive income (loss) | (3,401) | (15,186) |
Balance at the end of the period | 946,956 | |
Foreign Currency Translation Adjustments | ||
Reclassifications out of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (98,946) | (126,844) |
Other comprehensive income (loss) before reclassifications | (3,467) | (16,182) |
Amounts reclassified from accumulated other comprehensive income | 0 | 0 |
Net current-period other comprehensive income (loss) | (3,467) | (16,182) |
Balance at the end of the period | (102,413) | (143,026) |
Gain (Loss) on Derivative Instruments | ||
Reclassifications out of accumulated other comprehensive loss | ||
Balance at the beginning of the period | 446 | (1,164) |
Other comprehensive income (loss) before reclassifications | 84 | 1,338 |
Amounts reclassified from accumulated other comprehensive income | (18) | (342) |
Net current-period other comprehensive income (loss) | 66 | 996 |
Balance at the end of the period | 512 | (168) |
Accumulated Other Comprehensive Loss | ||
Reclassifications out of accumulated other comprehensive loss | ||
Balance at the beginning of the period | (98,500) | (128,008) |
Balance at the end of the period | $ (101,901) | $ (143,194) |