Cover
Cover - shares | 3 Months Ended | |
Dec. 29, 2019 | Jan. 22, 2020 | |
Cover page. | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 29, 2019 | |
Document Transition Report | false | |
Entity File Number | 0-19655 | |
Entity Registrant Name | TETRA TECH, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 95-4148514 | |
Entity Address, Address Line One | 3475 East Foothill Boulevard | |
Entity Address, City or Town | Pasadena | |
Entity Address, State or Province | CA | |
Entity Address, Postal Zip Code | 91107 | |
City Area Code | 626 | |
Local Phone Number | 351-4664 | |
Title of 12(b) Security | Common Stock, $0.01 par value | |
Trading Symbol | TTEK | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 54,683,812 | |
Entity Central Index Key | 0000831641 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --09-27 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 29, 2019 | Sep. 29, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 110,833 | $ 120,732 |
Accounts receivable, net | 735,128 | 768,720 |
Contract assets | 111,115 | 114,324 |
Prepaid expenses and other current assets | 82,745 | 62,196 |
Income taxes receivable | 10,483 | 13,820 |
Total current assets | 1,050,304 | 1,079,792 |
Property and equipment, net | 40,438 | 39,441 |
Right-of-use assets, operating leases | 223,930 | |
Investments in unconsolidated joint ventures | 7,172 | 6,873 |
Goodwill | 937,068 | 924,820 |
Intangible assets, net | 14,081 | 16,440 |
Deferred tax assets | 27,827 | 28,385 |
Other long-term assets | 51,733 | 51,657 |
Total assets | 2,352,553 | 2,147,408 |
Current liabilities: | ||
Accounts payable | 140,228 | 206,609 |
Accrued compensation | 124,286 | 203,384 |
Contract liabilities | 203,818 | 165,611 |
Short-term lease liabilities, operating leases | 70,958 | |
Current portion of long-term debt | 12,546 | 12,572 |
Current contingent earn-out liabilities | 22,825 | 24,977 |
Other current liabilities | 137,815 | 156,801 |
Total current liabilities | 712,476 | 769,954 |
Deferred tax liabilities | 13,134 | 12,971 |
Long-term debt | 322,496 | 263,949 |
Long-term lease liabilities, operating leases | 172,121 | |
Long-term contingent earn-out liabilities | 21,598 | 28,015 |
Other long-term liabilities | 83,963 | 83,055 |
Commitments and contingencies (Note 16) | ||
Equity: | ||
Preferred stock - authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at December 29, 2019 and September 29, 2019 | 0 | 0 |
Common stock - authorized, 150,000 shares of $0.01 par value; issued and outstanding, 54,728 and 54,565 shares at December 29, 2019 and September 29, 2019, respectively | 547 | 546 |
Additional paid-in capital | 60,747 | 78,132 |
Accumulated other comprehensive loss | (145,015) | (160,584) |
Retained earnings | 1,110,312 | 1,071,192 |
Tetra Tech stockholders’ equity | 1,026,591 | 989,286 |
Noncontrolling interests | 174 | 178 |
Total stockholders' equity | 1,026,765 | 989,464 |
Total liabilities and stockholders' equity | $ 2,352,553 | $ 2,147,408 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 29, 2019 | Jun. 30, 2019 |
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) | 54,565,000 | 54,728,000 |
Common stock, shares outstanding (in shares) | 54,565,000 | 54,728,000 |
Consolidated Statements of Inco
Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Revenue | $ 797,623 | $ 717,431 |
Gross profit | 109,737 | 98,684 |
Selling, general and administrative expenses | (46,435) | (42,973) |
Income from operations | 63,302 | 55,711 |
Interest expense | (3,349) | (2,897) |
Income before income tax expense | 59,953 | 52,814 |
Income tax expense | (12,636) | (10,782) |
Net income | 47,317 | 42,032 |
Net income attributable to noncontrolling interests | (7) | (35) |
Net income attributable to Tetra Tech | $ 47,310 | $ 41,997 |
Earnings per share attributable to Tetra Tech: | ||
Basic (in dollars per share) | $ 0.87 | $ 0.76 |
Diluted (in dollars per share) | $ 0.85 | $ 0.75 |
Weighted-average common shares outstanding: | ||
Basic (in shares) | 54,560 | 55,390 |
Diluted (in shares) | 55,438 | 56,366 |
Subcontractor costs | ||
Cost of revenue | $ (183,600) | $ (164,067) |
Other costs of revenue | ||
Cost of revenue | $ (504,286) | $ (454,680) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 47,317 | $ 42,032 |
Other comprehensive income, net of tax | ||
Foreign currency translation adjustment, net of tax | 13,899 | (23,334) |
Gain (loss) on cash flow hedge valuations, net of tax | 1,670 | |
Gain (loss) on cash flow hedge valuations, net of tax | (4,009) | |
Other comprehensive income (loss) attributable to Tetra Tech, net of tax | 15,569 | (27,343) |
Other comprehensive income attributable to noncontrolling interests, net of tax | 2 | 237 |
Comprehensive income attributable to Tetra Tech, net of tax | 62,879 | 14,654 |
Comprehensive income attributable to noncontrolling interests, net of tax | 9 | 272 |
Comprehensive income, net of tax | $ 62,888 | $ 14,926 |
Consolidated Statements of Equi
Consolidated Statements of Equity - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings | Total Tetra Tech Equity | Non-Controlling Interests |
Beginning balance (in shares) at Sep. 30, 2018 | 55,349 | ||||||
Beginning balance at Sep. 30, 2018 | $ 967,100 | $ 553 | $ 148,803 | $ (127,350) | $ 944,965 | $ 966,971 | $ 129 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 42,032 | 41,997 | 41,997 | 35 | |||
Other comprehensive income (loss) | (27,106) | (27,343) | (27,343) | 237 | |||
Distributions paid to noncontrolling interests | (254) | (254) | |||||
Cash dividends per common share | (6,654) | (6,654) | (6,654) | ||||
Stock-based compensation | 4,529 | 4,529 | 4,529 | ||||
Restricted & performance shares released (in shares) | 174 | ||||||
Restricted & performance shares released | (6,740) | $ 2 | (6,742) | (6,740) | |||
Stock options exercised (in shares) | 86 | ||||||
Stock options exercised | 2,314 | $ 1 | 2,313 | 2,314 | |||
Shares issued for Employee Stock Purchase Plan (in shares) | 148 | ||||||
Shares issued for Employee Stock Purchase Plan | 6,847 | $ 1 | 6,846 | 6,847 | |||
Stock repurchases (in shares) | (431) | ||||||
Stock repurchases | (25,000) | $ (4) | (24,996) | (25,000) | |||
Ending balance (in shares) at Dec. 30, 2018 | 55,326 | ||||||
Ending balance at Dec. 30, 2018 | 954,303 | $ 553 | 130,753 | (154,693) | 977,543 | 954,156 | 147 |
Beginning balance (in shares) at Sep. 29, 2019 | 54,565 | ||||||
Beginning balance at Sep. 29, 2019 | 989,464 | $ 546 | 78,132 | (160,584) | 1,071,192 | 989,286 | 178 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net income | 47,317 | 47,310 | 47,310 | 7 | |||
Other comprehensive income (loss) | 15,571 | 15,569 | 15,569 | 2 | |||
Distributions paid to noncontrolling interests | (13) | (13) | |||||
Cash dividends per common share | (8,190) | (8,190) | (8,190) | ||||
Stock-based compensation | 4,482 | 4,482 | 4,482 | ||||
Restricted & performance shares released (in shares) | 185 | ||||||
Restricted & performance shares released | (10,818) | $ 1 | (10,819) | (10,818) | |||
Stock options exercised (in shares) | 54 | ||||||
Stock options exercised | 1,413 | $ 1 | 1,412 | 1,413 | |||
Shares issued for Employee Stock Purchase Plan (in shares) | 168 | ||||||
Shares issued for Employee Stock Purchase Plan | 8,716 | $ 1 | 8,715 | 8,716 | |||
Stock repurchases (in shares) | (244) | ||||||
Stock repurchases | (21,177) | $ (2) | (21,175) | (21,177) | |||
Ending balance (in shares) at Dec. 29, 2019 | 54,728 | ||||||
Ending balance at Dec. 29, 2019 | $ 1,026,765 | $ 547 | $ 60,747 | $ (145,015) | $ 1,110,312 | $ 1,026,591 | $ 174 |
Consolidated Statements of Eq_2
Consolidated Statements of Equity (Parenthetical) - $ / shares | Nov. 11, 2019 | Nov. 05, 2018 | Dec. 29, 2019 | Dec. 30, 2018 |
Statement of Stockholders' Equity [Abstract] | ||||
Dividend paid per share (in dollars per share) | $ 0.15 | $ 0.12 | $ 0.15 | $ 0.12 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 47,317 | $ 42,032 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 6,235 | 8,274 |
Equity in income of unconsolidated joint ventures | (1,675) | (581) |
Distributions of earnings from unconsolidated joint ventures | 1,447 | 1,002 |
Amortization of stock-based awards | 4,482 | 4,530 |
Deferred income taxes | 2,173 | (1,424) |
Provision for doubtful accounts | 3,121 | 3,073 |
Gain on sale of property and equipment | (897) | (104) |
Changes in operating assets and liabilities, net of effects of business acquisitions: | ||
Accounts receivable and contract assets | 40,919 | 14,528 |
Prepaid expenses and other assets | (2,053) | (3,936) |
Accounts payable | (66,381) | (40,859) |
Accrued compensation | (79,098) | (68,957) |
Contract liabilities | 38,207 | 6,090 |
Other liabilities | (14,917) | 9,015 |
Income taxes receivable/payable | 3,096 | 12,015 |
Net cash used in operating activities | (18,024) | (15,302) |
Cash flows from investing activities: | ||
Capital expenditures | (3,331) | (3,853) |
Proceeds from sale of property and equipment | 455 | 115 |
Net cash used in investing activities | (2,876) | (3,738) |
Cash flows from financing activities: | ||
Proceeds from borrowings | 198,364 | 45,727 |
Repayments on long-term debt | (141,550) | (62,668) |
Repurchases of common stock | (21,177) | (25,000) |
Taxes paid on vested restricted stock | (10,818) | (6,740) |
Stock options exercised | 1,413 | 2,314 |
Dividends paid | (8,190) | (6,654) |
Payments of contingent earn-out liabilities | (9,236) | (6,000) |
Net cash provided by (used in) financing activities | 8,806 | (59,021) |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 2,200 | (1,626) |
Net decrease in cash, cash equivalents and restricted cash | (9,894) | (79,687) |
Cash, cash equivalents and restricted cash at beginning of period | 120,901 | 148,884 |
Cash, cash equivalents and restricted cash at end of period | 111,007 | 69,197 |
Cash paid during the period for: | ||
Interest | 3,082 | 2,229 |
Income taxes, net of refunds received of $0.3 million and $0.6 million | 5,579 | 2,231 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Total cash, cash equivalents and restricted cash | $ 111,007 | $ 69,197 |
Consolidated Statements of Ca_2
Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
Income tax refunds | $ 0.3 | $ 0.6 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Dec. 29, 2019 | |
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 (“U.S. 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 U.S. 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 September 29, 2019 . 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. In the first quarter of fiscal 2020, we adopted Accounting Standards Update ("ASU") 2016-02 "Leases (Topic 842)", using the modified retrospective method. The new guidance was applied to leases that existed or were entered into on or after September 30, 2019. Our current year financial statements have been presented under Leases (Topic 842). However, the prior-year financial statements have not been adjusted and continue to be reported in accordance with previous guidance. See Note 8 , " Leases " for further discussion of the adoption and the impact on our financial statements. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Dec. 29, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board ("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. 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). The adoption of this guidance had no impact on our consolidated financial statements. In February 2018, the FASB issued guidance on reclassification of certain tax effects from accumulated comprehensive income, which allows for a reclassification of stranded tax effects from the Tax Cuts and Jobs Act ("TCJA") from accumulated other comprehensive income to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018 (first quarter of fiscal 2020 for us). The adoption of this guidance had no material impact 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. In November 2019, the FASB issued guidance clarifying and amending certain aspects of the credit losses standard issued in June 2016. The 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 2018, the FASB issued updated guidance modifying certain fair value measurement disclosures. The updated guidance contains additional disclosures to enable users of the financial statements to better understand the entity’s assumption used to develop significant unobservable inputs for Level 3 fair value measurements, but also eliminates the requirement for entities to disclose the amount of and reasons for transfers between Level 1 and Level 2 investments within the fair value hierarchy. 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 do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In December 2019, the FASB issued guidance simplifying the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and amending certain existing guidance for clarity. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020 (first quarter of fiscal 2022 for us). Early adoption is permitted. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements |
Revenue and Contract Balances
Revenue and Contract Balances | 3 Months Ended |
Dec. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue and Contract Balances | Revenue and Contract Balances Disaggregation of Revenue We disaggregate revenue by client sector and contract type, as we believe it best depicts how the nature, timing, and uncertainty of revenue and cash flows are affected by economic factors. The following tables provide information about disaggregated revenue: Three Months Ended December 29, December 30, (in thousands) Client Sector: U.S. state and local government $ 122,356 $ 123,280 U.S. federal government (1) 245,303 224,757 U.S. commercial 182,971 172,788 International (2) 246,993 196,606 Total $ 797,623 $ 717,431 Contract Type: Fixed-price $ 271,055 $ 240,933 Time-and-materials 388,158 336,537 Cost-plus 138,410 139,961 Total $ 797,623 $ 717,431 (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, Australia and the United Kingdom, and revenue generated from non-U.S. clients. Other than the U.S. federal government, no single client accounted for more than 10% of our revenue for the three months ended December 29, 2019 and December 30, 2018 . Contract Assets and Contract Liabilities We invoice customers based on the contractual terms of each contract. However, the timing of revenue recognition may differ from the timing of invoice issuance. Contract assets represent revenue recognized in excess of the amounts for which we have the contractual right to bill our customers. Such amounts are recoverable from customers based upon various measures of performance, including achievement of certain milestones or completion of a contract. In addition, many of our time and materials arrangements are billed in arrears pursuant to contract terms that are standard within the industry, resulting in contract assets and/or unbilled receivables being recorded, as revenue is recognized in advance of billings. Contract liabilities consist of billings in excess of revenue recognized. Contract liabilities decrease as we recognize revenue from the satisfaction of the related performance obligation and increase as billings in advance of revenue recognition occur. Contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. There were no substantial non-current contract assets or liabilities for the periods presented. Net contract assets/liabilities consisted of the following: Balance at December 29, 2019 September 29, 2019 (in thousands) Contract assets (1) $ 111,115 $ 114,324 Contract liabilities (203,818 ) (165,611 ) Net contract liabilities $ (92,703 ) $ (51,287 ) (1) Includes $22.8 million and $26.5 million of contract retentions as of December 29, 2019 and September 29, 2019, respectively. Revenue recognized in the first quarter of fiscal 2020 from amounts included in contract liabilities at the beginning of the period was approximately $64 million (approximately $56 million in the first quarter of fiscal 2019.) We recognize revenue primarily using the cost-to-cost measure of progress method, which involves the estimates of progress towards completion. 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. For the first quarters of fiscal 2020 and 2019, these adjustments to our operating income were immaterial. Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded immediately in earnings. As of December 29, 2019 and September 29, 2019 , our consolidated balance sheets included liabilities for anticipated losses of $13.0 million and $11.5 million , respectively. The estimated cost to complete the related contracts as of December 29, 2019 was approximately $60 million . Accounts Receivable, Net Net accounts receivable consisted of the following: Balance at December 29, September 29, (in thousands) Billed $ 528,011 $ 522,256 Unbilled 262,771 300,035 Total accounts receivable 790,782 822,291 Allowance for doubtful accounts (55,654 ) (53,571 ) Total accounts receivable, net $ 735,128 $ 768,720 Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable, which represent an unconditional right to payment subject only to the passage of time, include unbilled amounts typically resulting from revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Most of our unbilled receivables at December 29, 2019 are expected to be billed and collected within 12 months . 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 industry conditions that may affect a client's ability to pay. Total accounts receivable at both December 29, 2019 and September 29, 2019 included approximately $14 million and $15 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 material gains or losses related to claims in the first quarters of fiscal 2020 and fiscal 2019 . On our state and local government contracts, billed accounts receivable were $108.3 million and $129.3 million at December 29, 2019 and September 29, 2019 , respectively. The total of unbilled receivables and contract assets were $44.1 million and $59.6 million at December 29, 2019 and September 29, 2019 , respectively. Other than the state and local governments and U.S. federal government, no single client accounted for more than 10% of our accounts receivable at December 29, 2019 and September 29, 2019 . Remaining Unsatisfied Performance Obligations (“RUPOs”) Our RUPOs represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $3.1 billion of RUPOs as of December 29, 2019 . RUPOs increase with awards from new contracts or additions on existing contracts and decrease as work is performed and revenue is recognized on existing contracts. RUPOs may also decrease when projects are canceled or modified in scope. We include a contract within our RUPOs when the contract is awarded and an agreement on contract terms has been reached. We expect to satisfy our RUPOs as of December 29, 2019 over the following periods: Amount (in thousands) Within 12 months $ 1,812,206 Beyond 1,337,324 Total $ 3,149,530 Although RUPOs reflect business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPOs are adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty. Therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days). |
Acquisitions
Acquisitions | 3 Months Ended |
Dec. 29, 2019 | |
Business Combinations [Abstract] | |
Acquisitions | Acquisitions In the second quarter of fiscal 2019 , we acquired eGlobalTech ("EGT"), a high-end information technology solutions, cloud migration, cybersecurity, and management consulting firm based in Arlington, Virginia. EGT is part of our Government Services Group ("GSG") segment. The fair value of the purchase price was $49.1 million . This amount was comprised of a $ 24.7 million promissory note issued to the sellers (which was subsequently paid in full in the third quarter of fiscal 2019), $3.3 million of payables related to estimated post-closing adjustments for net assets acquired, and $21.1 million for the estimated fair value of contingent earn-out obligations, with a maximum of $25.0 million , based upon the achievement of specified operating income targets in each of the three years following the acquisition. In the fourth quarter of fiscal 2019 , we acquired WYG plc (“WYG”), which employs approximately 1,600 staff primarily in the United Kingdom and Europe, delivering consulting and engineering solutions for complex projects across key service areas including planning, water and environment, transport, infrastructure, the built environment, architecture, urban design, surveying, asset management, program management, and international development. WYG’s United Kingdom based consulting and engineering business is part of our CIG segment, while its international development business is part of our GSG segment. The fair value of the purchase price was $54.2 million , entirely paid in cash. In addition, we assumed a net debt of $11.5 million , which was subsequently paid in full in the fourth quarter of fiscal 2019. We also incurred $10.4 million in acquisition and transaction costs related to the WYG acquisition in the fourth quarter of fiscal 2019. 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 our fiscal 2019 acquisitions represent the value of a workforce with emerging technology and new techniques that incorporate artificial intelligence, data analytics and advanced cybersecurity solutions for government and commercial clients, and expanding our geographic presence in the United Kingdom with a strong platform for growth in the United Kingdom and Europe. 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 name intangible assets include the fair value of existing contracts and the underlying customer relationships with lives ranging from one to ten years , and trade names with lives ranging from three to five years . For detailed information regarding our intangible assets, see Note 5 , “ 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 the 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 in our consolidated statements of cash flows. 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 operating income in the first quarters of fiscal 2020 and 2019. At December 29, 2019 , there was a total potential maximum of $63.0 million of outstanding contingent consideration related to acquisitions. Of this amount, $44.4 million was estimated as the fair value and accrued on our consolidated balance sheet. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Dec. 29, 2019 | |
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 September 29, 2019 $ 441,802 $ 483,018 $ 924,820 Translation 2,502 9,746 12,248 Balance at December 29, 2019 $ 444,304 $ 492,764 $ 937,068 Our goodwill was impacted by foreign currency translation related to our foreign subsidiaries with functional currencies that are different than our reporting currency. The goodwill amounts above are presented net of any reductions from historical impairment adjustments. The gross amounts of goodwill for GSG were $462.0 million and $459.5 million at December 29, 2019 and September 29, 2019 , respectively, excluding $17.7 million of accumulated impairment. The gross amounts of goodwill for CIG were $598.5 million and $588.7 million at December 29, 2019 and September 29, 2019 , respectively, excluding $105.7 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 1, 2019 (i.e. the first day of our fourth quarter in fiscal 2019 ) 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. All of our reporting units had estimated fair values that exceeded their carrying values by more than 25% . We also 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. Although we believe that our estimates of fair value for these reporting units are reasonable, if financial performance for these reporting units falls significantly below our expectations or market prices for similar business decline, the goodwill for these 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. During the fourth quarter of fiscal 2019, we performed an interim goodwill impairment review of our Remediation and Field Services ("RFS") reporting unit and recorded a $7.8 million goodwill impairment charge. As a result of the impairment charge, the estimated fair value of the RFS reporting unit equaled its carrying value of $61 million at September 29, 2019, including the remaining $48.8 million of goodwill. If the financial performance of the operations in the RFS reporting unit were to fall below our revenue growth or operating profit margin forecasts, or we are required to increase the discount rate used in our cash flow analysis, the related goodwill may become further impaired. The gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets, net” on our consolidated balance sheets, were as follows: December 29, 2019 September 29, 2019 Weighted- Average Remaining Life (in Years) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization ($ in thousands) Client relations 2.8 $ 57,065 $ (51,401 ) $ 56,779 $ (50,455 ) Backlog 1.2 33,112 (27,312 ) 32,229 (24,968 ) Trade names 2.2 7,919 (5,302 ) 7,714 (4,859 ) Total $ 98,096 $ (84,015 ) $ 96,722 $ (80,282 ) Amortization expense for the three months ended December 29, 2019 was $2.9 million , compared to $4.0 million for the prior-year period. Estimated amortization expense for the remainder of fiscal 2020 and succeeding years is as follows: Amount (in thousands) 2020 $ 6,770 2021 4,729 2022 1,660 2023 922 Total $ 14,081 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Dec. 29, 2019 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Property and Equipment Property and equipment consisted of the following: Balance at December 29, September 29, (in thousands) Equipment, furniture and fixtures $ 118,433 $ 114,652 Leasehold improvements 36,346 34,881 Land and buildings 382 371 Total property and equipment 155,161 149,904 Accumulated depreciation (114,723 ) (110,463 ) Property and equipment, net $ 40,438 $ 39,441 The depreciation expense related to property and equipment was $3.3 million for the three months ended December 29, 2019 , compared to $4.3 million for the prior-year period. We classified $5.4 million |
Stock Repurchase and Dividends
Stock Repurchase and Dividends | 3 Months Ended |
Dec. 29, 2019 | |
Stock Repurchase And Dividends [Abstract] | |
Stock Repurchase and Dividends | Stock Repurchase and Dividends On November 5, 2018, the Board of Directors authorized a stock repurchase program under which we could repurchase up to $200 million of our common stock. This was in addition to the $25 million remaining as of fiscal 2018 year-end under the previous stock repurchase program. All repurchased shares were through open market purchases. As of December 29, 2020, we had a remaining balance of $103.8 million available for stock repurchases. The following table summarizes stock repurchase activity for fiscal 2019 and the first quarter of fiscal 2020: Fiscal-Year Stock Repurchase Program Shares Repurchased Average Price Paid per Share Total Cost (in thousands) 2019 2018 Program 430,559 $ 58.06 $ 25,000 2019 2019 Program 1,131,962 66.26 75,000 2019 Total 1,562,521 $ 64.00 $ 100,000 2020 2019 Program 244,438 $ 86.64 $ 21,177 The following table presents dividend declared and paid in the first quarters of fiscal 2020 and 2019 : Declare Date Dividend Paid Per Share Record Date Payment Date Dividend Paid November 11, 2019 $ 0.15 December 2, 2019 December 13, 2019 $ 8,190 November 5, 2018 $ 0.12 November 30, 2018 December 14, 2018 $ 6,654 Subsequent Event. On January 27, 2020, the Board of Directors declared a quarterly cash dividend of $0.15 per share payable on February 28, 2020 to stockholders of record as of the close of business on February 12, 2020. Additionally, the Board of Directors authorized a new $200 million stock repurchase program. The newly authorized program and the $103.8 million remaining under the previously approved program provide a total of $303.8 million available for repurchases. |
Leases
Leases | 3 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”, which is a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We elected to adopt the standard, and available practical expedients, effective September 30, 2019 (the first day of our fiscal 2020). These practical expedients allowed us to keep the lease classification assessed under the previous lease accounting standard (ASC 840) without reassessment under the new standard, and allowed all separate lease components, including non-lease components, to be accounted for as a single lease component for all existing leases prior to adoption of the new standard. We adopted this new standard under the modified retrospective transition approach without adjusting comparative periods in the financial statements, as allowed under Leases (Topic 842), and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact on our consolidated balance sheets but did not have an impact on the consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. Our finance leases are primarily for certain information technology ("IT") equipment and the related ROU and lease liabilities were immaterial at December 29, 2019. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and current and long-term operating lease liabilities in the consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for IT equipment, vehicles, and equipment. Our operating leases have remaining lease terms of one month to eight years , some of which may include options to extend the leases for up to five years . The components of lease costs for the three months ended December 29, 2019 are as follows: Amount (in thousands) Operating lease cost $ 21,172 Sublease income (574 ) Other 18 Total lease cost $ 20,616 Supplemental cash flow information related to leases for the three months ended December 29, 2019 is as follows: Amount (in thousands) Operating cash flows for operating leases $ 19,715 Right-of-use assets obtained in exchange for new operating lease liabilities $ 262,248 Supplemental balance sheet and other information related to leases as of December 29, 2019 are as follows: Amount (in thousands) Operating leases: Right-of-use assets $ 223,930 Lease liabilities: Current $ 70,958 Long-term 172,121 Total operating lease liabilities $ 243,079 Weighted-average remaining lease term: Operating leases 4 years Weighted-average discount rate: Operating leases 2.3 % As of December 29, 2019, we have additional operating leases, primarily for office space, that have not yet commenced of $58.8 million . These operating leases will commence in fiscal 2020 and 2021 with lease terms of five years to twelve years . A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of December 29, 2019 is as follows: Amount (in thousands) 2020 $ 59,146 2021 62,919 2022 51,443 2023 33,497 2024 22,540 Beyond 26,380 Total lease payments 255,925 Less: imputed interest (12,846 ) Total present value of lease liabilities $ 243,079 As of September 29, 2019, $343.5 million of minimum rental commitments on operating leases was payable as follows: $108.8 million in fiscal 2020, $66.4 million in fiscal 2021, $51.4 million in fiscal 2022, $36.5 million in fiscal 2023, $25.8 million in fiscal 2024, and $54.6 million thereafter. Rental expense for the three months ended December 30, 2018 was $19.4 million . |
Leases | Leases In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”, which is a new standard related to leases to increase transparency and comparability among organizations by requiring the recognition of right-of-use (“ROU”) assets obtained in exchange for lease liabilities on the balance sheet. Most prominent among the changes in the standard is the recognition of ROU assets and lease liabilities by lessees for those leases classified as operating leases. Under the standard, disclosures are required to meet the objective of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. We elected to adopt the standard, and available practical expedients, effective September 30, 2019 (the first day of our fiscal 2020). These practical expedients allowed us to keep the lease classification assessed under the previous lease accounting standard (ASC 840) without reassessment under the new standard, and allowed all separate lease components, including non-lease components, to be accounted for as a single lease component for all existing leases prior to adoption of the new standard. We adopted this new standard under the modified retrospective transition approach without adjusting comparative periods in the financial statements, as allowed under Leases (Topic 842), and implemented internal controls and key system functionality to enable the preparation of financial information on adoption. The standard had a material impact on our consolidated balance sheets but did not have an impact on the consolidated income statements. The most significant impact was the recognition of ROU assets and lease liabilities for operating leases, while accounting for finance leases remained substantially unchanged. Our finance leases are primarily for certain information technology ("IT") equipment and the related ROU and lease liabilities were immaterial at December 29, 2019. We determine if an arrangement is a lease at inception. Operating leases are included in operating lease ROU assets and current and long-term operating lease liabilities in the consolidated balance sheets. ROU assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, incremental borrowing rates are used based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for operating lease payments is recognized on a straight-line basis over the lease term. Our operating leases are primarily for corporate and project office spaces. To a much lesser extent, we have operating leases for IT equipment, vehicles, and equipment. Our operating leases have remaining lease terms of one month to eight years , some of which may include options to extend the leases for up to five years . The components of lease costs for the three months ended December 29, 2019 are as follows: Amount (in thousands) Operating lease cost $ 21,172 Sublease income (574 ) Other 18 Total lease cost $ 20,616 Supplemental cash flow information related to leases for the three months ended December 29, 2019 is as follows: Amount (in thousands) Operating cash flows for operating leases $ 19,715 Right-of-use assets obtained in exchange for new operating lease liabilities $ 262,248 Supplemental balance sheet and other information related to leases as of December 29, 2019 are as follows: Amount (in thousands) Operating leases: Right-of-use assets $ 223,930 Lease liabilities: Current $ 70,958 Long-term 172,121 Total operating lease liabilities $ 243,079 Weighted-average remaining lease term: Operating leases 4 years Weighted-average discount rate: Operating leases 2.3 % As of December 29, 2019, we have additional operating leases, primarily for office space, that have not yet commenced of $58.8 million . These operating leases will commence in fiscal 2020 and 2021 with lease terms of five years to twelve years . A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of December 29, 2019 is as follows: Amount (in thousands) 2020 $ 59,146 2021 62,919 2022 51,443 2023 33,497 2024 22,540 Beyond 26,380 Total lease payments 255,925 Less: imputed interest (12,846 ) Total present value of lease liabilities $ 243,079 As of September 29, 2019, $343.5 million of minimum rental commitments on operating leases was payable as follows: $108.8 million in fiscal 2020, $66.4 million in fiscal 2021, $51.4 million in fiscal 2022, $36.5 million in fiscal 2023, $25.8 million in fiscal 2024, and $54.6 million thereafter. Rental expense for the three months ended December 30, 2018 was $19.4 million . |
Stockholders' Equity and Stock
Stockholders' Equity and Stock Compensation Plans | 3 Months Ended |
Dec. 29, 2019 | |
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 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 2020 and 2019 was $ 4.5 million and $ 4.5 million , respectively. Most of these amounts were included in SG&A in our consolidated statements of income. In the first quarter of fiscal 2020 , we awarded 74,011 performance share units (“PSUs”) to our non-employee directors and executive officers at a fair value of $102.13 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 on 50% on the growth in our diluted earnings per share and 50% on our relative total shareholder return over the vesting period. Additionally, we awarded 160,775 restricted stock units (“RSUs”) to our non-employee directors, executive officers and employees at the fair value of $83.95 per share on the award date. All 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. 29, 2019 | |
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 presents the number of weighted-average shares used to compute basic and diluted EPS: Three Months Ended December 29, December 30, (in thousands, except per share data) Net income attributable to Tetra Tech $ 47,310 $ 41,997 Weighted-average common shares outstanding – basic 54,560 55,390 Effect of dilutive stock options and unvested restricted stock 878 976 Weighted-average common shares outstanding – diluted 55,438 56,366 Earnings per share attributable to Tetra Tech: Basic $ 0.87 $ 0.76 Diluted $ 0.85 $ 0.75 |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 29, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The effective tax rates for the first quarters of fiscal 2020 and 2019 were 21.1% and 20.4% , respectively. The tax rates for fiscal 2020 and 2019 reflect 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, and implementing a modified territorial tax system with the introduction of the Global Intangible Low-Taxed Income tax rules. The TCJA also imposed a one-time transition tax on deemed repatriation of historical earnings of foreign subsidiaries. U.S. GAAP requires that the impact of tax legislation be recognized in the period in which the tax law was enacted. We finalized the analysis of our deferred tax liabilities for the TCJA's lower tax rates in the first quarter of fiscal 2019 and recorded a deferred tax benefit of $2.6 million . Excluding the deferred tax benefit from the TCJA, our effective tax rate in the first quarter of fiscal 2019 was 25.3% . As of December 29, 2019 and September 29, 2019 , the liability for income taxes associated with uncertain tax positions was $9.6 million and $9.2 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. 29, 2019 | |
Segment Reporting [Abstract] | |
Reportable Segments | Reportable Segments We manage our operations under two 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 international clients other than 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 Construction Management ("RCM") reportable segment. 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 disaster management. GSG also provides engineering design services for U.S. municipal and commercial clients, especially in water infrastructure, solid waste, and high-end sustainable infrastructure designs. GSG also leads our support for development agencies worldwide, especially in the United States, United Kingdom, and Australia. CIG primarily provides consulting and engineering services to U.S. commercial clients, and international clients that include both commercial and government sectors. CIG supports commercial clients across the Fortune 500, energy, utilities, industrial, manufacturing, aerospace, and resource management 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), the United Kingdom, as well as Brazil and Chile. 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 summarize financial information regarding our reportable segments: Three Months Ended December 29, December 30, (in thousands) Revenue GSG $ 457,404 $ 411,971 CIG 351,164 317,793 RCM 145 1,453 Elimination of inter-segment revenue (11,090 ) (13,786 ) Total $ 797,623 $ 717,431 Income from operations GSG $ 42,048 $ 37,413 CIG 31,632 27,099 RCM 1 4 Corporate (1) (10,379 ) (8,805 ) Total $ 63,302 $ 55,711 (1) Includes amortization of intangibles, other costs and other income not allocable to our reportable segments. Balance at December 29, September 29, (in thousands) Total Assets GSG $ 588,062 $ 587,040 CIG 414,926 450,276 RCM 14,358 15,608 Corporate (1) 1,335,207 1,094,484 Total $ 2,352,553 $ 2,147,408 (1) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goodwill, intangible assets, leases, deferred income taxes and certain other assets . |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 29, 2019 | |
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 September 29, 2019 ). The carrying value of our long-term debt approximated fair value at December 29, 2019 and September 29, 2019 . At December 29, 2019 , we had borrowings of $335.0 million outstanding under our Amended Credit Agreement, which were used to fund business acquisitions, working capital needs, stock repurchases, dividends, capital expenditures and contingent earn-outs. |
Derivative Financial Instrument
Derivative Financial Instruments | 3 Months Ended |
Dec. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments We often use certain interest rate derivative contracts to hedge interest rate exposures on our variable rate debt. Also, we may enter into foreign currency derivative contracts with financial institutions to reduce the risk that cash flows and earnings could adversely be 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 the accompanying 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, and in our consolidated statements of income for those derivatives designated as fair value hedges. In fiscal 2018, we entered into five interest rate swap agreements that we designated as cash flow hedges to fix the interest rate on the borrowings under our term loan facility. As of December 29, 2019 , the notional principal of our outstanding interest swap agreements was $237.5 million ( $47.5 million each.) The interest rate swaps have a fixed interest rate of 2.79% and expire in July 2023 for all five agreements. At December 29, 2019 and September 29, 2019 , the fair value of the effective portion of our interest rate swap agreements designated as cash flow hedges before tax effect was $(9.2) million and $(10.9) million , respectively, of which we expect to reclassify $2.5 million from accumulated other comprehensive income to interest expense within the next twelve months. 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 29, 2019 September 29, 2019 (in thousands) Interest rate swap agreements Other current liabilities $ (9,203 ) $ (10,873 ) Changes in the fair value of the interest rate swap agreements are presented on the consolidated statements of comprehensive income as follows: Three Months Ended December 29, 2019 December 30, 2018 (in thousands) Gain (loss) recognized in other comprehensive income, net of tax: Interest rate swap agreements $ 1,670 $ (4,009 ) We had no other derivative instruments that were not designated as hedging instruments for the first quarter of fiscal 2020 and fiscal year ended September 29, 2019 . |
Reclassifications Out of Accumu
Reclassifications Out of Accumulated Other Comprehensive Income | 3 Months Ended |
Dec. 29, 2019 | |
Equity [Abstract] | |
Reclassifications Out of Accumulated Other Comprehensive Income | Reclassifications Out of Accumulated Other Comprehensive Income The accumulated balances and reporting period activities for the three months ended December 29, 2019 and December 30, 2018 related to reclassifications out of accumulated other comprehensive income (loss) are summarized as follows: Three Months Ended Foreign Currency Translation Adjustments Gain (Loss) on Derivative Instruments Accumulated Other Comprehensive Gain (Loss) (in thousands) Balances at September 30, 2018 $ (128,602 ) $ 1,252 $ (127,350 ) Other comprehensive loss before reclassifications (23,334 ) (3,783 ) (27,117 ) Amounts reclassified from accumulated other comprehensive loss: Interest rate contracts, net of tax (1) — (226 ) (226 ) Net current-period other comprehensive loss (23,334 ) (4,009 ) (27,343 ) Balances at December 30, 2018 $ (151,936 ) $ (2,757 ) $ (154,693 ) Balances at September 29, 2019 $ (149,711 ) $ (10,873 ) $ (160,584 ) Other comprehensive income before reclassifications 13,899 2,153 16,052 Amounts reclassified from accumulated other comprehensive loss: Interest rate contracts, net of tax (1) — (483 ) (483 ) Net current-period other comprehensive income 13,899 1,670 15,569 Balances at December 29, 2019 $ (135,812 ) $ (9,203 ) $ (145,015 ) (1) This accumulated other comprehensive component is reclassified to “Interest expense” in our consolidated statements of income. See Note 14, “Derivative Financial Instruments”, for more information. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Dec. 29, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies We are subject to certain claims and lawsuits typically filed against the consulting and engineering 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. On July 15, 2019, following an initial January 14, 2019 filing, the Civil Division of the United States Attorney's Office ("USAO") filed an amended complaint in intervention in three |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Dec. 29, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transaction We often provide services to unconsolidated joint ventures. For the first quarters of fiscal 2020 and 2019, our revenue included $28.9 million and $23.9 million , respectively, related to services we provided to unconsolidated joint ventures, and incurred the related reimbursable costs of approximately $28.7 million and $23.4 million , respectively. Our consolidated balance sheets also included the following amounts related to these services: Balance at December 29, 2019 September 29, 2019 (in thousands) Accounts receivable, net $ 20,573 $ 19,351 Contract assets 11,415 9,681 Contract liabilities (395 ) (111 ) |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Dec. 29, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recent Accounting Pronouncements | In August 2017, the Financial Accounting Standards Board ("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. 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). The adoption of this guidance had no impact on our consolidated financial statements. In February 2018, the FASB issued guidance on reclassification of certain tax effects from accumulated comprehensive income, which allows for a reclassification of stranded tax effects from the Tax Cuts and Jobs Act ("TCJA") from accumulated other comprehensive income to retained earnings. The guidance is effective for fiscal years beginning after December 15, 2018 (first quarter of fiscal 2020 for us). The adoption of this guidance had no material impact 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. In November 2019, the FASB issued guidance clarifying and amending certain aspects of the credit losses standard issued in June 2016. The 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 2018, the FASB issued updated guidance modifying certain fair value measurement disclosures. The updated guidance contains additional disclosures to enable users of the financial statements to better understand the entity’s assumption used to develop significant unobservable inputs for Level 3 fair value measurements, but also eliminates the requirement for entities to disclose the amount of and reasons for transfers between Level 1 and Level 2 investments within the fair value hierarchy. 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 do not expect the adoption of this guidance to have an impact on our consolidated financial statements. In December 2019, the FASB issued guidance simplifying the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and amending certain existing guidance for clarity. This guidance is effective for fiscal years and interim periods within those fiscal years, beginning after December 15, 2020 (first quarter of fiscal 2022 for us). Early adoption is permitted. We do not expect the adoption of this guidance to have an impact on our consolidated financial statements |
Contract Assets and Contract Liabilities | Although RUPOs reflect business that is considered to be firm, cancellations, deferrals or scope adjustments may occur. RUPOs are adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate. Our operations and maintenance contracts can generally be terminated by the clients without a substantive financial penalty. Therefore, the remaining performance obligations on such contracts are limited to the notice period required for the termination (usually 30, 60, or 90 days). Our RUPOs represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. We had $3.1 billion of RUPOs as of December 29, 2019 . RUPOs increase with awards from new contracts or additions on existing contracts and decrease as work is performed and revenue is recognized on existing contracts. RUPOs may also decrease when projects are canceled or modified in scope. We include a contract within our RUPOs when the contract is awarded and an agreement on contract terms has been reached. |
Revenue and Contract Balances (
Revenue and Contract Balances (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Reconciliation of Disaggregation of Revenue to Reportable Segments | The following tables provide information about disaggregated revenue: Three Months Ended December 29, December 30, (in thousands) Client Sector: U.S. state and local government $ 122,356 $ 123,280 U.S. federal government (1) 245,303 224,757 U.S. commercial 182,971 172,788 International (2) 246,993 196,606 Total $ 797,623 $ 717,431 Contract Type: Fixed-price $ 271,055 $ 240,933 Time-and-materials 388,158 336,537 Cost-plus 138,410 139,961 Total $ 797,623 $ 717,431 (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, Australia and the United Kingdom, and revenue generated from non-U.S. clients. |
Summary of Net Contract Liabilities/Assets | There were no substantial non-current contract assets or liabilities for the periods presented. Net contract assets/liabilities consisted of the following: Balance at December 29, 2019 September 29, 2019 (in thousands) Contract assets (1) $ 111,115 $ 114,324 Contract liabilities (203,818 ) (165,611 ) Net contract liabilities $ (92,703 ) $ (51,287 ) (1) Includes $22.8 million and $26.5 million of contract retentions as of December 29, 2019 and September 29, 2019, respectively. |
Remaining Performance Obligation, Expected Timing | We expect to satisfy our RUPOs as of December 29, 2019 over the following periods: Amount (in thousands) Within 12 months $ 1,812,206 Beyond 1,337,324 Total $ 3,149,530 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
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 September 29, 2019 $ 441,802 $ 483,018 $ 924,820 Translation 2,502 9,746 12,248 Balance at December 29, 2019 $ 444,304 $ 492,764 $ 937,068 |
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 29, 2019 September 29, 2019 Weighted- Average Remaining Life (in Years) Gross Amount Accumulated Amortization Gross Amount Accumulated Amortization ($ in thousands) Client relations 2.8 $ 57,065 $ (51,401 ) $ 56,779 $ (50,455 ) Backlog 1.2 33,112 (27,312 ) 32,229 (24,968 ) Trade names 2.2 7,919 (5,302 ) 7,714 (4,859 ) Total $ 98,096 $ (84,015 ) $ 96,722 $ (80,282 ) |
Schedule of Estimated Amortization Expense for Remainder of Fiscal and Succeeding Years | Estimated amortization expense for the remainder of fiscal 2020 and succeeding years is as follows: Amount (in thousands) 2020 $ 6,770 2021 4,729 2022 1,660 2023 922 Total $ 14,081 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property and Equipment | Property and equipment consisted of the following: Balance at December 29, September 29, (in thousands) Equipment, furniture and fixtures $ 118,433 $ 114,652 Leasehold improvements 36,346 34,881 Land and buildings 382 371 Total property and equipment 155,161 149,904 Accumulated depreciation (114,723 ) (110,463 ) Property and equipment, net $ 40,438 $ 39,441 |
Stock Repurchase and Dividends
Stock Repurchase and Dividends (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Stock Repurchase And Dividends [Abstract] | |
Summary of Shares Repurchased | The following table summarizes stock repurchase activity for fiscal 2019 and the first quarter of fiscal 2020: Fiscal-Year Stock Repurchase Program Shares Repurchased Average Price Paid per Share Total Cost (in thousands) 2019 2018 Program 430,559 $ 58.06 $ 25,000 2019 2019 Program 1,131,962 66.26 75,000 2019 Total 1,562,521 $ 64.00 $ 100,000 2020 2019 Program 244,438 $ 86.64 $ 21,177 |
Dividends Declared and Paid | The following table presents dividend declared and paid in the first quarters of fiscal 2020 and 2019 : Declare Date Dividend Paid Per Share Record Date Payment Date Dividend Paid November 11, 2019 $ 0.15 December 2, 2019 December 13, 2019 $ 8,190 November 5, 2018 $ 0.12 November 30, 2018 December 14, 2018 $ 6,654 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Leases [Abstract] | |
Summary of Components of Lease Cost | The components of lease costs for the three months ended December 29, 2019 are as follows: Amount (in thousands) Operating lease cost $ 21,172 Sublease income (574 ) Other 18 Total lease cost $ 20,616 Supplemental cash flow information related to leases for the three months ended December 29, 2019 is as follows: Amount (in thousands) Operating cash flows for operating leases $ 19,715 Right-of-use assets obtained in exchange for new operating lease liabilities $ 262,248 |
Summary of Supplemental Balance Sheet and Other Information | Supplemental balance sheet and other information related to leases as of December 29, 2019 are as follows: Amount (in thousands) Operating leases: Right-of-use assets $ 223,930 Lease liabilities: Current $ 70,958 Long-term 172,121 Total operating lease liabilities $ 243,079 Weighted-average remaining lease term: Operating leases 4 years Weighted-average discount rate: Operating leases 2.3 % |
Summary of Maturity Operating Lease Liability | A maturity analysis of the future undiscounted cash flows associated with our operating lease liabilities as of December 29, 2019 is as follows: Amount (in thousands) 2020 $ 59,146 2021 62,919 2022 51,443 2023 33,497 2024 22,540 Beyond 26,380 Total lease payments 255,925 Less: imputed interest (12,846 ) Total present value of lease liabilities $ 243,079 |
Earnings per Share ("EPS") (Tab
Earnings per Share ("EPS") (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Earnings Per Share [Abstract] | |
Schedule of Number of Weighted-average Shares Used to Compute Basic and Diluted EPS | The following table presents the number of weighted-average shares used to compute basic and diluted EPS: Three Months Ended December 29, December 30, (in thousands, except per share data) Net income attributable to Tetra Tech $ 47,310 $ 41,997 Weighted-average common shares outstanding – basic 54,560 55,390 Effect of dilutive stock options and unvested restricted stock 878 976 Weighted-average common shares outstanding – diluted 55,438 56,366 Earnings per share attributable to Tetra Tech: Basic $ 0.87 $ 0.76 Diluted $ 0.85 $ 0.75 |
Reportable Segments (Tables)
Reportable Segments (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Segment Reporting [Abstract] | |
Summarized Financial Information of Reportable Segments | The following tables summarize financial information regarding our reportable segments: Three Months Ended December 29, December 30, (in thousands) Revenue GSG $ 457,404 $ 411,971 CIG 351,164 317,793 RCM 145 1,453 Elimination of inter-segment revenue (11,090 ) (13,786 ) Total $ 797,623 $ 717,431 Income from operations GSG $ 42,048 $ 37,413 CIG 31,632 27,099 RCM 1 4 Corporate (1) (10,379 ) (8,805 ) Total $ 63,302 $ 55,711 (1) Includes amortization of intangibles, other costs and other income not allocable to our reportable segments. Balance at December 29, September 29, (in thousands) Total Assets GSG $ 588,062 $ 587,040 CIG 414,926 450,276 RCM 14,358 15,608 Corporate (1) 1,335,207 1,094,484 Total $ 2,352,553 $ 2,147,408 (1) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goodwill, intangible assets, leases, deferred income taxes and certain other assets . |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Fair Value of 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 29, 2019 September 29, 2019 (in thousands) Interest rate swap agreements Other current liabilities $ (9,203 ) $ (10,873 ) |
Schedule of Notional Principal, Fixed Rates and Related Expiration Dates of Outstanding Interest Rate Swap Agreements | Changes in the fair value of the interest rate swap agreements are presented on the consolidated statements of comprehensive income as follows: Three Months Ended December 29, 2019 December 30, 2018 (in thousands) Gain (loss) recognized in other comprehensive income, net of tax: Interest rate swap agreements $ 1,670 $ (4,009 ) |
Reclassifications Out of Accu_2
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Equity [Abstract] | |
Summary of Reclassifications Out of Accumulated Other Comprehensive Loss | The accumulated balances and reporting period activities for the three months ended December 29, 2019 and December 30, 2018 related to reclassifications out of accumulated other comprehensive income (loss) are summarized as follows: Three Months Ended Foreign Currency Translation Adjustments Gain (Loss) on Derivative Instruments Accumulated Other Comprehensive Gain (Loss) (in thousands) Balances at September 30, 2018 $ (128,602 ) $ 1,252 $ (127,350 ) Other comprehensive loss before reclassifications (23,334 ) (3,783 ) (27,117 ) Amounts reclassified from accumulated other comprehensive loss: Interest rate contracts, net of tax (1) — (226 ) (226 ) Net current-period other comprehensive loss (23,334 ) (4,009 ) (27,343 ) Balances at December 30, 2018 $ (151,936 ) $ (2,757 ) $ (154,693 ) Balances at September 29, 2019 $ (149,711 ) $ (10,873 ) $ (160,584 ) Other comprehensive income before reclassifications 13,899 2,153 16,052 Amounts reclassified from accumulated other comprehensive loss: Interest rate contracts, net of tax (1) — (483 ) (483 ) Net current-period other comprehensive income 13,899 1,670 15,569 Balances at December 29, 2019 $ (135,812 ) $ (9,203 ) $ (145,015 ) (1) This accumulated other comprehensive component is reclassified to “Interest expense” in our consolidated statements of income. See Note 14, “Derivative Financial Instruments”, for more information. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Dec. 29, 2019 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Our consolidated balance sheets also included the following amounts related to these services: Balance at December 29, 2019 September 29, 2019 (in thousands) Accounts receivable, net $ 20,573 $ 19,351 Contract assets 11,415 9,681 Contract liabilities (395 ) (111 ) |
Revenue and Contract Balances -
Revenue and Contract Balances - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 797,623 | $ 717,431 |
Fixed-price | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 271,055 | 240,933 |
Time-and-materials | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 388,158 | 336,537 |
Cost-plus | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 138,410 | 139,961 |
U.S. state and local government | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 122,356 | 123,280 |
U.S. federal government | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 245,303 | 224,757 |
U.S. commercial | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | 182,971 | 172,788 |
International | ||
Disaggregation of Revenue [Line Items] | ||
Revenue | $ 246,993 | $ 196,606 |
Revenue and Contract Balances_2
Revenue and Contract Balances - Summary of Contract Liabilities/Assets (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Sep. 29, 2019 |
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 111,115 | $ 114,324 |
Contract liabilities | (203,818) | (165,611) |
Net contract liabilities | (92,703) | (51,287) |
Contract Retentions | ||
Disaggregation of Revenue [Line Items] | ||
Contract assets | $ 22,800 | $ 26,500 |
Revenue and Contract Balances_3
Revenue and Contract Balances - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Sep. 29, 2019 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Contract liability revenue recognized during the period | $ 64,000 | $ 56,000 | |
Liabilities for anticipated losses | 13,000 | $ 11,500 | |
Estimated cost to complete the related contracts | $ 60,000 | ||
Period for billing and collecting unbilled receivables | 12 months | ||
Unbilled accounts receivable related to claims and requests for equitable adjustment on contracts | $ 14,000 | 15,000 | |
Gains (losses) from claim settlement | $ 0 | ||
Billed accounts receivable related to U.S. federal government contracts | 108,300 | 129,300 | |
Unbilled | 262,771 | 300,035 | |
Reaming unsatisfied performance obligation | 3,149,530 | ||
U.S. federal government | |||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Unbilled | $ 44,100 | $ 59,600 |
Revenue and Contract Balances_4
Revenue and Contract Balances - Accounts Receivable, Net (Details) - USD ($) $ in Thousands | Dec. 29, 2019 | Sep. 29, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Billed | $ 528,011 | $ 522,256 |
Unbilled | 262,771 | 300,035 |
Total accounts receivable | 790,782 | 822,291 |
Allowance for doubtful accounts | (55,654) | (53,571) |
Total accounts receivable, net | $ 735,128 | $ 768,720 |
Revenue and Contract Balances_5
Revenue and Contract Balances - Remaining Unsatisfied Performance Obligations (Details) $ in Thousands | Dec. 29, 2019USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Reaming unsatisfied performance obligation | $ 3,149,530 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-12-30 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Reaming unsatisfied performance obligation | $ 1,812,206 |
Remaining unsatisfied performance obligation, expected timing of satisfaction | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Reaming unsatisfied performance obligation | $ 1,337,324 |
Remaining unsatisfied performance obligation, expected timing of satisfaction |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | 3 Months Ended | ||
Dec. 29, 2019USD ($) | Sep. 29, 2019USD ($)employee | Mar. 31, 2019USD ($) | |
Mergers and Acquisitions | |||
Aggregate maximum of contingent consideration | $ 63 | ||
Contingent earn-out liability | $ 44.4 | ||
Minimum | |||
Mergers and Acquisitions | |||
Significant unobservable input, 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 | |||
Significant unobservable input, 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 | ||
eGlobalTech | |||
Mergers and Acquisitions | |||
Fair value of acquisition purchase price | $ 49.1 | ||
Issuance of promissory note for business acquisition | 24.7 | ||
Accruals | 3.3 | ||
Estimated fair value of contingent earn-out obligation | 21.1 | ||
Aggregate maximum of contingent consideration | $ 25 | ||
Contingent consideration achievement period | 3 years | ||
WYG plc | |||
Mergers and Acquisitions | |||
Fair value of acquisition purchase price | $ 54.2 | ||
Issuance of promissory note for business acquisition | $ 11.5 | ||
Number of employees | employee | 1,600 | ||
Acquisition related costs | $ 10.4 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Goodwill (Details) $ in Thousands | 3 Months Ended |
Dec. 29, 2019USD ($) | |
Goodwill | |
Balance at beginning of the period | $ 924,820 |
Translation | 12,248 |
Balance at end of the period | 937,068 |
GSG | |
Goodwill | |
Balance at beginning of the period | 441,802 |
Translation | 2,502 |
Balance at end of the period | 444,304 |
CIG | |
Goodwill | |
Balance at beginning of the period | 483,018 |
Translation | 9,746 |
Balance at end of the period | $ 492,764 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Narrative (Details) - USD ($) | Jul. 01, 2019 | Dec. 29, 2019 | Sep. 29, 2019 | Dec. 30, 2018 |
Goodwill [Line Items] | ||||
Impairment of goodwill | $ 0 | |||
Estimated fair values that exceeded their carrying values, percent (more than) | 25.00% | |||
Total Assets | $ 2,352,553,000 | $ 2,147,408,000 | ||
Goodwill | 937,068,000 | 924,820,000 | ||
Amortization expense | $ 2,900,000 | $ 4,000,000 | ||
Income approach, discounted cash flow method | ||||
Goodwill [Line Items] | ||||
Weighted rate used in fair value of goodwill (as a percent) | 70.00% | |||
Market approach | ||||
Goodwill [Line Items] | ||||
Weighted rate used in fair value of goodwill (as a percent) | 30.00% | |||
GSG | ||||
Goodwill [Line Items] | ||||
Gross amounts of goodwill | $ 462,000,000 | 459,500,000 | ||
Accumulated impairment | 17,700,000 | 17,700,000 | ||
Goodwill | 444,304,000 | 441,802,000 | ||
CIG | ||||
Goodwill [Line Items] | ||||
Gross amounts of goodwill | 598,500,000 | 588,700,000 | ||
Accumulated impairment | 105,700,000 | 105,700,000 | ||
Goodwill | $ 492,764,000 | 483,018,000 | ||
RFS | ||||
Goodwill [Line Items] | ||||
Impairment of goodwill | 7,800,000 | |||
Total Assets | 61,000,000 | |||
Goodwill | $ 48,800,000 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Finite Lived Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 29, 2019 | Sep. 29, 2019 | Sep. 30, 2018 | |
Finite-lived intangible assets | |||
Gross Amount | $ 98,096 | $ 96,722 | |
Accumulated Amortization | (84,015) | $ (80,282) | |
Estimated amortization expense | |||
2020 | 6,770 | ||
2021 | 4,729 | ||
2022 | 1,660 | ||
2023 | 922 | ||
Total | $ 14,081 | ||
Non-compete agreements | |||
Finite-lived intangible assets | |||
Weighted- Average Remaining Life (in Years) | 0 years | ||
Client relations | |||
Finite-lived intangible assets | |||
Weighted- Average Remaining Life (in Years) | 2 years 9 months 18 days | ||
Gross Amount | $ 57,065 | $ 56,779 | |
Accumulated Amortization | $ (51,401) | (50,455) | |
Backlog | |||
Finite-lived intangible assets | |||
Weighted- Average Remaining Life (in Years) | 1 year 2 months 12 days | ||
Gross Amount | $ 33,112 | 32,229 | |
Accumulated Amortization | $ (27,312) | (24,968) | |
Trade names | |||
Finite-lived intangible assets | |||
Weighted- Average Remaining Life (in Years) | 2 years 2 months 12 days | ||
Gross Amount | $ 7,919 | 7,714 | |
Accumulated Amortization | $ (5,302) | $ (4,859) |
Property and Equipment (Details
Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Sep. 29, 2019 | |
Property and Equipment | |||
Property and equipment, gross | $ 155,161 | $ 149,904 | |
Accumulated depreciation | (114,723) | (110,463) | |
Property and equipment, net | 40,438 | 39,441 | |
Depreciation expense related to property and equipment | 3,300 | $ 4,300 | |
Assets held-for-sale, current | 5,400 | 5,400 | |
Equipment, furniture and fixtures | |||
Property and Equipment | |||
Property and equipment, gross | 118,433 | 114,652 | |
Leasehold improvements | |||
Property and Equipment | |||
Property and equipment, gross | 36,346 | 34,881 | |
Land and buildings | |||
Property and Equipment | |||
Property and equipment, gross | $ 382 | $ 371 |
Stock Repurchase and Dividend_2
Stock Repurchase and Dividends - Narrative (Details) - USD ($) | Dec. 29, 2019 | Nov. 05, 2018 | Sep. 30, 2018 |
Stock Repurchase And Dividends [Abstract] | |||
Maximum repurchase amount under stock repurchase program | $ 200,000,000 | ||
Remaining authorized amount under share repurchase program | $ 103,800,000 | $ 25,000,000 |
Stock Repurchase and Dividend_3
Stock Repurchase and Dividends - Schedule of Stock Repurchase (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended |
Dec. 29, 2019 | Sep. 29, 2019 | |
Equity, Class of Treasury Stock [Line Items] | ||
Shares Repurchased (in shares) | 1,562,521 | |
Average Price Paid per Share (USD per share) | $ 64 | |
Total Cost | $ 100,000 | |
2018 Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares Repurchased (in shares) | 430,559 | |
Average Price Paid per Share (USD per share) | $ 58.06 | |
Total Cost | $ 25,000 | |
2019 Program | ||
Equity, Class of Treasury Stock [Line Items] | ||
Shares Repurchased (in shares) | 244,438 | 1,131,962 |
Average Price Paid per Share (USD per share) | $ 86.64 | $ 66.26 |
Total Cost | $ 21,177 | $ 75,000 |
Stock Repurchase and Dividend_4
Stock Repurchase and Dividends - Schedule of Dividends Declared and Paid and Subsequent Event (Details) - USD ($) | Feb. 28, 2020 | Jan. 27, 2020 | Dec. 13, 2019 | Nov. 11, 2019 | Dec. 14, 2018 | Nov. 05, 2018 | Dec. 29, 2019 | Dec. 30, 2018 | Sep. 30, 2018 |
Dividends Payable [Line Items] | |||||||||
Dividend paid per share (in dollars per share) | $ 0.15 | $ 0.12 | $ 0.15 | $ 0.12 | |||||
Dividend Paid (in thousands) | $ 8,190,000 | $ 6,654,000 | |||||||
Maximum repurchase amount under stock repurchase program | $ 200,000,000 | ||||||||
Remaining authorized amount under share repurchase program | $ 103,800,000 | $ 25,000,000 | |||||||
Subsequent Event | |||||||||
Dividends Payable [Line Items] | |||||||||
Quarterly cash dividend declared (in dollars per share) | $ 0.15 | ||||||||
Maximum repurchase amount under stock repurchase program | $ 200,000,000 | ||||||||
Remaining authorized amount under share repurchase program | $ 303,800,000 | ||||||||
Forecast | Subsequent Event | |||||||||
Dividends Payable [Line Items] | |||||||||
Dividend paid per share (in dollars per share) | $ 0.15 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 3 Months Ended |
Dec. 29, 2019USD ($) | |
Lessee, Lease, Description [Line Items] | |
Renewal term (up to) | 5 years |
Operating leases not yet commenced | $ 58.8 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 1 month |
Lease term | 5 years |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease term | 8 years |
Lease term | 12 years |
Leases - Components of Lease Co
Leases - Components of Lease Costs (Details) $ in Thousands | 3 Months Ended |
Dec. 29, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 21,172 |
Sublease income | (574) |
Other | 18 |
Total lease cost | $ 20,616 |
Leases - Supplemental Cash Flow
Leases - Supplemental Cash Flows (Details) $ in Thousands | 3 Months Ended |
Dec. 29, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows for operating leases | $ 19,715 |
Right-of-use assets obtained in exchange for new operating lease liabilities | $ 262,248 |
Leases - Supplemental Balance S
Leases - Supplemental Balance Sheet (Details) $ in Thousands | Dec. 29, 2019USD ($) |
Operating leases: | |
Right-of-use assets | $ 223,930 |
Lease liabilities: | |
Current | 70,958 |
Long-term | 172,121 |
Total operating lease liabilities | $ 243,079 |
Weighted-average remaining lease term: | |
Operating leases | 4 years |
Weighted-average discount rate: | |
Operating leases | 2.30% |
Leases - Maturity Analysis of t
Leases - Maturity Analysis of the Future Undiscounted Cash Flows of Operating and Finance Lease Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 30, 2018 | Dec. 29, 2019 | Sep. 29, 2019 | |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | |||
2020 | $ 59,146 | ||
2021 | 62,919 | ||
2022 | 51,443 | ||
2023 | 33,497 | ||
2024 | 22,540 | ||
Beyond | 26,380 | ||
Total lease payments | 255,925 | ||
Less: imputed interest | (12,846) | ||
Total present value of lease liabilities | $ 243,079 | ||
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |||
Total liability | $ 343,500 | ||
2020 | 108,800 | ||
2021 | 66,400 | ||
2022 | 51,400 | ||
2023 | 36,500 | ||
2024 | 25,800 | ||
Due after year 2024 | $ 54,600 | ||
Rent expense | $ 19,400 |
Stockholders' Equity and Stoc_2
Stockholders' Equity and Stock Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Stockholders' Equity and Stock Compensation Plans | ||
Stock-based compensation expense | $ 4.5 | $ 4.5 |
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 | ||
Granted (in shares) | 74,011 | |
Granted, fair value (in dollars per share) | $ 102.13 | |
Vesting period | 3 years | |
Restricted stock units | Non-employee directors, executive officers and employees | ||
Stockholders' Equity and Stock Compensation Plans | ||
Granted (in shares) | 160,775 | |
Granted, fair value (in dollars per share) | $ 83.95 | |
Restricted stock units | Executive officers and employees | ||
Stockholders' Equity and Stock Compensation Plans | ||
Vesting period | 4 years | |
Restricted stock units | Non-employee director | ||
Stockholders' Equity and Stock Compensation Plans | ||
Vesting period | 1 year |
Earnings per Share ("EPS") - Ca
Earnings per Share ("EPS") - Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Earnings Per Share [Abstract] | ||
Net income attributable to Tetra Tech | $ 47,310 | $ 41,997 |
Weighted-average common shares outstanding – basic (in shares) | 54,560 | 55,390 |
Effect of dilutive stock options and unvested restricted stock (in shares) | 878 | 976 |
Weighted-average common stock outstanding – diluted (in shares) | 55,438 | 56,366 |
Earnings per share attributable to Tetra Tech: | ||
Basic (in dollars per share) | $ 0.87 | $ 0.76 |
Diluted (in dollars per share) | $ 0.85 | $ 0.75 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Sep. 29, 2019 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 21.10% | 20.40% | |
Tax Cuts And Jobs Act, change in tax rate, income tax benefit | $ 2.6 | ||
Effective income tax rate excluding excess tax benefit and TCJA impact | 25.30% | ||
Liability for uncertain tax positions | $ 9.6 | $ 9.2 |
Reportable Segments - Financial
Reportable Segments - Financial Information (Details) $ in Thousands | 3 Months Ended | ||
Dec. 29, 2019USD ($)segment | Dec. 30, 2018USD ($) | Sep. 29, 2019USD ($) | |
Financial information regarding reportable segments | |||
Number of reportable segments | segment | 2 | ||
Revenue | $ 797,623 | $ 717,431 | |
Income from operations | 63,302 | 55,711 | |
Total Assets | 2,352,553 | $ 2,147,408 | |
Operating segment | GSG | |||
Financial information regarding reportable segments | |||
Revenue | 457,404 | 411,971 | |
Income from operations | 42,048 | 37,413 | |
Total Assets | 588,062 | 587,040 | |
Operating segment | CIG | |||
Financial information regarding reportable segments | |||
Revenue | 351,164 | 317,793 | |
Income from operations | 31,632 | 27,099 | |
Total Assets | 414,926 | 450,276 | |
Operating segment | RCM | |||
Financial information regarding reportable segments | |||
Revenue | 145 | 1,453 | |
Income from operations | 1 | 4 | |
Total Assets | 14,358 | 15,608 | |
Elimination of inter-segment revenue | |||
Financial information regarding reportable segments | |||
Revenue | (11,090) | (13,786) | |
Corporate | |||
Financial information regarding reportable segments | |||
Income from operations | (10,379) | $ (8,805) | |
Total Assets | $ 1,335,207 | $ 1,094,484 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) $ in Millions | Dec. 29, 2019USD ($) |
Fair Value Disclosures [Abstract] | |
Borrowing under credit agreement | $ 335 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) | Dec. 29, 2019USD ($)instrument | Sep. 29, 2019USD ($)instrument | Sep. 30, 2018agreement |
Derivatives not designated as hedging instruments | |||
Derivative Financial Instruments | |||
Number of instruments held | instrument | 0 | 0 | |
Interest rate swap agreements | |||
Derivative Financial Instruments | |||
Effective portion of interest rate swap agreements | $ (9,200,000) | ||
Effective portion of interest rate swap agreements | $ (10,900,000) | ||
Interest rate swap agreements | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative Financial Instruments | |||
Number of derivative agreements | agreement | 5 | ||
Notional amount | $ 237,500,000 | ||
Fixed rate | 2.79% | ||
Gain (loss) to be reclassified during next twelve months | $ 2,500,000 | ||
Interest Rate Swap 1 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative Financial Instruments | |||
Notional amount | 47,500,000 | ||
Interest Rate Swap 2 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative Financial Instruments | |||
Notional amount | 47,500,000 | ||
Interest Rate Swap 3 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative Financial Instruments | |||
Notional amount | 47,500,000 | ||
Interest Rate Swap 4 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative Financial Instruments | |||
Notional amount | 47,500,000 | ||
Interest Rate Swap 5 | Designated as cash flow hedges | Derivatives designated as hedging instruments | |||
Derivative Financial Instruments | |||
Notional amount | $ 47,500,000 |
Derivative Financial Instrume_4
Derivative Financial Instruments - Fair Value (Details) - Interest rate swap agreements - USD ($) $ in Thousands | Dec. 29, 2019 | Sep. 29, 2019 |
Derivative Financial Instruments | ||
Fair Value of Derivative Instruments | $ (9,200) | |
Fair Value of Derivative Instruments | $ (10,900) | |
Other current liabilities | ||
Derivative Financial Instruments | ||
Fair Value of Derivative Instruments | $ (9,203) | |
Fair Value of Derivative Instruments | $ (10,873) |
Derivative Financial Instrume_5
Derivative Financial Instruments - Schedule of Changed in FV of Cash Flow Hedges (Details) - Gain (Loss) on Derivative Instruments - Interest rate swap agreements - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||
Gain (loss) recognized in other comprehensive income, net of tax: | $ 1,670 | |
Gain (loss) recognized in other comprehensive income, net of tax: | $ (4,009) |
Reclassifications Out of Accu_3
Reclassifications Out of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 29, 2019 | Dec. 30, 2018 | |
Reclassifications out of accumulated other comprehensive loss | ||
Beginning balance | $ 989,464 | $ 967,100 |
Amounts reclassified from accumulated other comprehensive loss: | ||
Net current-period other comprehensive income | 15,571 | (27,106) |
Ending balance | 1,026,765 | 954,303 |
Foreign Currency Translation Adjustments | ||
Reclassifications out of accumulated other comprehensive loss | ||
Beginning balance | (149,711) | (128,602) |
Other comprehensive loss before reclassifications | 13,899 | (23,334) |
Amounts reclassified from accumulated other comprehensive loss: | ||
Interest rate contracts, net of tax | 0 | 0 |
Net current-period other comprehensive income | 13,899 | (23,334) |
Ending balance | (135,812) | (151,936) |
Gain (Loss) on Derivative Instruments | ||
Reclassifications out of accumulated other comprehensive loss | ||
Beginning balance | 1,252 | |
Other comprehensive loss before reclassifications | (3,783) | |
Amounts reclassified from accumulated other comprehensive loss: | ||
Interest rate contracts, net of tax | 226 | |
Ending balance | (2,757) | |
Gain (Loss) on Derivative Instruments | ||
Reclassifications out of accumulated other comprehensive loss | ||
Other comprehensive loss before reclassifications | 2,153 | |
Amounts reclassified from accumulated other comprehensive loss: | ||
Interest rate contracts, net of tax | 483 | |
Accumulated Other Comprehensive Gain (Loss) | ||
Reclassifications out of accumulated other comprehensive loss | ||
Beginning balance | (160,584) | (127,350) |
Other comprehensive loss before reclassifications | 16,052 | (27,117) |
Amounts reclassified from accumulated other comprehensive loss: | ||
Interest rate contracts, net of tax | 483 | 226 |
Net current-period other comprehensive income | 15,569 | (27,343) |
Ending balance | $ (145,015) | $ (154,693) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | Jul. 15, 2019action |
Commitments and Contingencies Disclosure [Abstract] | |
Loss contingency, actions taken by plaintiff | 3 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 29, 2019 | Dec. 30, 2018 | Sep. 29, 2019 | |
Related Party Transactions [Abstract] | |||
Related party revenues | $ 28,900 | $ 23,900 | |
Related party expenses | 28,700 | $ 23,400 | |
Accounts receivable, net | 20,573 | $ 19,351 | |
Contract assets | 11,415 | 9,681 | |
Contract liabilities | $ (395) | $ (111) |
Uncategorized Items - tt10-qfy2
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 2,695,000 |
Restricted Cash | us-gaap_RestrictedCash | 174,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (2,765,000) |
Parent [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | (2,765,000) |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (2,765,000) |