Tetra Tech (TTEK) 10-Q 3 Feb 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jan. 01, 2017	Jan. 30, 2017
Document and Entity Information
Entity Registrant Name	TETRA TECH INC
Entity Central Index Key	831,641
Document Type	10-Q
Document Period End Date	Jan. 1, 2017
Amendment Flag	false
Current Fiscal Year End Date	--10-01
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		57,317,053
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jan. 01, 2017	Oct. 02, 2016
Current assets:
Cash and cash equivalents	$ 126,981	$ 160,459
Accounts receivable - net	750,784	714,336
Prepaid expenses and other current assets	53,740	46,262
Income taxes receivable	22,497	14,371
Total current assets	954,002	935,428
Property and equipment - net	63,302	67,827
Investments in and advances to unconsolidated joint ventures	1,964	2,064
Goodwill	709,739	717,988
Intangible assets - net	42,167	48,962
Deferred income taxes	1,016	630
Other long-term assets	28,233	27,880
Total assets	1,800,423	1,800,779
Current liabilities:
Accounts payable	136,165	158,773
Accrued compensation	92,300	129,184
Billings in excess of costs on uncompleted contracts	112,695	88,223
Current portion of long-term debt	15,483	15,510
Current contingent earn-out liabilities	4,391	4,296
Other current liabilities	67,611	85,100
Total current liabilities	428,645	481,086
Deferred income taxes	63,470	60,348
Long-term debt	372,721	331,501
Long-term contingent earn-out liabilities	4,461	4,461
Other long-term liabilities	58,382	53,980
Commitments and contingencies (Note 15)
Equity:
Preferred stock - Authorized, 2,000 shares of $0.01 par value; no shares issued and outstanding at January 1, 2017 and October 2, 2016
Common stock - Authorized, 150,000 shares of $0.01 par value; issued and outstanding, 57,219 and 57,042 shares at January 1, 2017 and October 2, 2016, respectively	572	570
Additional paid-in capital	257,417	260,340
Accumulated other comprehensive loss	(143,194)	(128,008)
Retained earnings	757,776	736,357
Tetra Tech stockholders' equity	872,571	869,259
Noncontrolling interests	173	144
Total equity	872,744	869,403
Total liabilities and equity	$ 1,800,423	$ 1,800,779

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands	Jan. 01, 2017	Oct. 02, 2016
Condensed Consolidated Balance Sheets
Preferred stock, Authorized shares	2,000	2,000
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, Authorized shares	150,000	150,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares issued	57,219	57,042
Common stock, shares outstanding	57,219	57,042

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Condensed Consolidated Statements of Income
Revenue	$ 668,851	$ 560,708
Subcontractor costs	(179,300)	(139,752)
Other costs of revenue	(408,190)	(347,796)
Gross profit	81,361	73,160
Selling, general and administrative expenses	(41,506)	(39,229)
Contingent consideration - fair value adjustments		(1,001)
Operating income	39,855	32,930
Interest expense, net	(2,908)	(1,660)
Income before income tax expense	36,947	31,270
Income tax expense	(10,358)	(8,030)
Net income including noncontrolling interests	26,589	23,240
Net income from noncontrolling interests	(27)	(1)
Net income attributable to Tetra Tech	$ 26,562	$ 23,239
Earnings per share attributable to Tetra Tech:
Basic (in dollars per share)	$ 0.47	$ 0.39
Diluted (in dollars per share)	$ 0.46	$ 0.39
Weighted-average common shares outstanding:
Basic (in shares)	57,099	59,058
Diluted (in shares)	58,145	59,793
Cash dividends paid per share	$ 0.09	$ 0.08

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Condensed Consolidated Statements of Comprehensive Income
Net income including noncontrolling interests	$ 26,589	$ 23,240
Other comprehensive income (loss), net of tax:
Foreign currency translation adjustments	(15,999)	(16,474)
Gain on cash flow hedge valuations	996	1,110
Other comprehensive income (loss), net of tax	(15,003)	(15,364)
Comprehensive income including noncontrolling interests	11,586	7,876
Net income attributable to noncontrolling interests	(27)	(1)
Foreign currency translation adjustments, net of tax	(183)	(10)
Comprehensive income attributable to noncontrolling interests	(210)	(11)
Comprehensive income attributable to Tetra Tech	$ 11,376	$ 7,865

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Cash flows from operating activities:
Net income including noncontrolling interests	$ 26,589	$ 23,240
Adjustments to reconcile net income to net cash from operating activities:
Depreciation and amortization	11,191	9,805
Equity in income of unconsolidated joint ventures	(1,030)	(202)
Distributions of earnings from unconsolidated joint ventures	1,114	205
Stock-based compensation	3,217	2,792
Excess tax benefits from stock-based compensation		(118)
Deferred income taxes	2,195	928
Provision for doubtful accounts	(1,128)	7,019
Fair value adjustments to contingent consideration		1,001
Gain on disposal of property and equipment	(118)	(176)
Changes in operating assets and liabilities, net of effects of business acquisitions:
Accounts receivable	(41,962)	30,415
Prepaid expenses and other assets	(7,392)	(8,648)
Accounts payable	(22,609)	(30,361)
Accrued compensation	(36,884)	(12,233)
Billings in excess of costs on uncompleted contracts	24,472	2,199
Other liabilities	(9,642)	(1,309)
Income taxes receivable/payable	(6,760)	(942)
Net cash (used in) provided by operating activities	(58,747)	23,615
Cash flows from investing activities:
Capital expenditures	(2,031)	(3,250)
Proceeds from sale of property and equipment	223	704
Net cash used in investing activities	(1,808)	(2,546)
Cash flows from financing activities:
Payments on long-term debt	(47,265)	(2,802)
Proceeds from borrowings	88,950
Payments of earn-out liabilities		(1,001)
Excess tax benefits from stock-based compensation		118
Repurchases of common stock	(10,000)	(25,000)
Dividends paid	(5,144)	(4,713)
Net proceeds from issuance of common stock	2,403	4,085
Net cash provided by (used in) financing activities	28,944	(29,313)
Effect of foreign exchange rate changes on cash	(1,867)	(1,994)
Net decrease in cash and cash equivalents	(33,478)	(10,238)
Cash and cash equivalents at beginning of period	160,459	135,326
Cash and cash equivalents at end of period	126,981	125,088
Cash paid during the period for:
Interest	2,931	1,743
Income taxes, net of refunds received of $0.0 million and $0.4 million	$ 14,831	$ 8,793

Condensed Consolidated Stateme7

Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Condensed Consolidated Statements of Cash Flows
Income taxes, refunds received	$ 0	$ 0.4

Basis of Presentation

Basis of Presentation	3 Months Ended
	Jan. 01, 2017
Basis of Presentation
Basis of Presentation	1. Basis of Presentation The accompanying unaudited condensed consolidated financial statements and related notes of Tetra Tech, Inc. (“we,” “us” or “our”) have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements and, therefore, should be read in conjunction with the audited consolidated financial statements and related notes contained in our Annual Report on Form 10-K for the fiscal year ended October 2, 2016. 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.

Accounts Receivable - Net and R

Accounts Receivable - Net and Revenue Recognition	3 Months Ended
	Jan. 01, 2017
Accounts Receivable - Net and Revenue Recognition
Accounts Receivable - Net and Revenue Recognition	2. Accounts Receivable – Net and Revenue Recognition Net accounts receivable and billings in excess of costs on uncompleted contracts consisted of the following: January 1, October 2, (in thousands) Billed $ $ Unbilled Contract retentions Total accounts receivable – gross Allowance for doubtful accounts Total accounts receivable – net $ $ Billings in excess of costs on uncompleted contracts $ $ Billed accounts receivable represent amounts billed to clients that have not been collected. Unbilled accounts receivable represent revenue recognized but not yet billed pursuant to contract terms or billed after the period end date. Except for amounts related to claims as discussed below, most of our unbilled receivables at January 1, 2017 are expected to be billed and collected within 12 months. Contract retentions represent amounts withheld by clients until certain conditions are met or the project is completed, which may be several months or years. The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future. We determine an estimated allowance for uncollectible accounts based on management’s consideration of trends in the actual and forecasted credit quality of our clients, including delinquency and payment history; type of client, such as a government agency or a commercial sector client; and general economic and particular industry conditions that may affect a client’s ability to pay. Billings in excess of costs on uncompleted contracts represent the amount of cash collected from clients and billings to clients on contracts in advance of revenue recognized. The majority of billings in excess of costs on uncompleted contracts will be earned within 12 months. Once contract performance is underway, we may experience changes in conditions, client requirements, specifications, designs, materials and expectations regarding the period of performance. Such changes result in “change orders” and may be initiated by us or by our clients. In many cases, agreement with the client as to the terms of change orders is reached prior to work commencing; however, sometimes circumstances require that work progress without a definitive client agreement. Unapproved change orders constitute claims in excess of agreed contract prices that we seek to collect from our clients (or other third parties) for delays, errors in specifications and designs, contract terminations, or other causes of unanticipated additional costs. Revenue on claims is recognized when contract costs related to claims have been incurred and when their addition to contract value can be reliably estimated. This can lead to a situation in which costs are recognized in one period and revenue is recognized in a subsequent period, such as when client agreement is obtained or a claims resolution occurs. Total accounts receivable at January 1, 2017 and October 2, 2016 included $44 million and $45 million, respectively, related to claims, including requests for equitable adjustment, on contracts that provide for price redetermination. We regularly evaluate all unsettled claim amounts and record appropriate adjustments to operating earnings when it is probable that the claim will result in a different contract value than the amount previously estimated. We recorded no gains or losses related to claims in the first quarter of fiscal 2017. In the first quarter of fiscal 2016, we collected $13.4 million to settle claims of $8.8 million, which resulted in gains in operating income of $4.6 million in the RCM reportable segment. Billed accounts receivable related to U.S. federal government contracts were $76.0 million and $47.4 million at January 1, 2017 and October 2, 2016, respectively. The increase was largely due to the timing of collections on accounts receivable from a large U.S. federal government client. U.S. federal government unbilled receivables were $82.9 million and $92.2 million at January 1, 2017 and October 2, 2016, respectively. Other than the U.S. federal government, no single client accounted for more than 10% of our accounts receivable at January 1, 2017 and October 2, 2016. We recognize revenue for most of our contracts using the percentage-of-completion method, primarily utilizing the cost-to-cost approach, to estimate the progress towards completion in order to determine the amount of revenue and profit to recognize. Changes in those estimates could result in the recognition of cumulative catch-up adjustments to the contract’s inception-to-date revenue, costs and profit in the period in which such changes are made. As a result, we recognized net unfavorable operating income adjustments during the first quarter of fiscal 2017 of $4.0 million ($2.3 million in the Resource Management and Energy (“RME”) segment and $1.7 million in the Remediation and Construction Management (“RCM”) segment). These adjustments were immaterial in the first quarter of fiscal 2016. Changes in revenue and cost estimates could also result in a projected loss that would be recorded immediately in earnings. As of January 1, 2017 and October 2, 2016, our balance sheet included a liability for anticipated losses of $6.6 million and $6.7 million, respectively. The estimated cost to complete the related contracts as of January 1, 2017 was $18.1 million.

Mergers and Acquisitions

Mergers and Acquisitions	3 Months Ended
	Jan. 01, 2017
Mergers and Acquisitions
Mergers and Acquisitions	3. Mergers and Acquisitions We did not complete any acquisitions in the first quarter of fiscal 2017. On January 18, 2016, we acquired control of Coffey International Limited (“Coffey”), headquartered in Sydney, Australia. Coffey had approximately 3,300 staff delivering technical and engineering solutions in international development and geoscience. Coffey significantly expands our geographic presence, particularly in Australia and Asia Pacific, and is part of our RME segment. In addition to Australia, Coffey’s international development business has operations supporting federal government agencies in the U.S. and the United Kingdom. The fair value of the purchase price for Coffey was $76.1 million, in addition to $65.1 million of assumed debt, which consisted of secured bank term debt of $37.1 million and unsecured corporate bond obligations of $28.0 million. All of this debt was paid in full from other borrowings in the second quarter of fiscal 2016 subsequent to the acquisition. In the second quarter of fiscal 2016, we also acquired INDUS Corporation (“INDUS”), headquartered in Vienna, Virginia. INDUS is an information technology solutions firm focused on water data analytics, geospatial analysis, secure infrastructure, and software applications management for U.S. federal government customers, and is included in our Water, Environment and Infrastructure (“WEI”) segment. The fair value of the purchase price for INDUS was $18.7 million. Of this amount, $14.0 million was paid to the sellers and $4.7 million was the estimated fair value of contingent earn-out obligations, with a maximum of $8.0 million, based upon the achievement of specified operating income targets in each of the two years following the acquisition. The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the respective acquisition dates for our acquisitions completed in fiscal 2016 (in thousands): Accounts receivable $ Other current assets Property and equipment Goodwill Backlog and trade name intangible assets Other assets Current liabilities Borrowings Other long-term liabilities Net assets acquired $ 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. Specifically, goodwill additions related to the fiscal 2016 acquisitions primarily represent the value of workforces with distinct expertise in the international development, geoscience, and software applications management markets. In addition, these acquired capabilities, when combined with our existing global consulting and engineering business, result in opportunities that allow us to provide services under contracts that could not have been pursued individually by either us or the acquired companies. The results of these acquisitions were included in our condensed consolidated financial statements from their respective closing dates. Backlog and trade name intangible assets include the fair value of existing contracts and the underlying customer relationships with lives ranging from 1 to 5 years (weighted average of approximately 3 years) and the fair value of trade names with lives ranging from 3 to 5 years. The table below presents summarized unaudited consolidated pro forma operating results including the related acquisition, integration and debt pre-payment charges, assuming we had acquired Coffey and INDUS at the beginning of fiscal 2016. These pro-forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the related events occurred at the beginning of fiscal 2016. Pro-Forma Three Months Ended January 1, December 27, (in thousands, except per share data) Revenue $ $ Operating income Net income attributable to Tetra Tech Earnings per share attributable to Tetra Tech Basic $ $ Diluted $ $ Coffey and INDUS combined contributed $102.3 million in revenue and $7.4 million in operating income for the first quarter of fiscal 2017. Coffey’s contributions included the benefit of post-acquisition integration with our existing environmental and international development businesses. Amortization of intangible assets was $2.6 million for the first quarter of fiscal 2017. Most of our acquisition agreements include contingent earn-out agreements, which are generally based on the achievement of future operating income thresholds. The contingent earn-out arrangements are based on our valuations of the acquired companies, and reduce the risk of overpaying for acquisitions if the projected financial results are not achieved. The fair values of any earn-out arrangements are included as part of the purchase price of the acquired companies on their respective acquisition dates. For each transaction, we estimate the fair value of contingent earn-out payments as part of the initial purchase price and record the estimated fair value of contingent consideration as a liability in “Current contingent earn-out liabilities” and “Long-term contingent earn-out liabilities” on our condensed 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 condensed consolidated statements of cash flows. Any amount paid in excess of the contingent earn-out liability on the acquisition date is reflected as cash used in operating activities. We review and re-assess the estimated fair value of contingent consideration on a quarterly basis, and the updated fair value could differ materially from the initial estimates. Changes in the estimated fair value of our contingent earn-out liabilities related to the time component of the present value calculation are reported in interest expense. Adjustments to the estimated fair value related to changes in all other unobservable inputs are reported in operating income. We had no adjustments to our contingent earn-out liabilities in the first quarter of fiscal 2017. During the first quarter of fiscal 2016, we recorded an increase in our contingent earn-out liabilities and reported a related loss in operating income of $1.0 million. This loss represented the final cash settlement during the first quarter of fiscal 2016 of an earn-out liability that was valued at $0 at the end of fiscal 2015. At January 1, 2017, there was a total maximum of $14.5 million of outstanding contingent consideration related to acquisitions. Of this amount, $8.9 million was estimated as the fair value and accrued on our condensed consolidated balance sheet. Subsequent Event. On February 1, 2017, we announced the acquisition of Eco Logical Australia, a multi-disciplinary consulting firm with over 160 staff that provide innovative, high-end environmental and ecological services.

Goodwill and Intangible Assets

Goodwill and Intangible Assets	3 Months Ended
	Jan. 01, 2017
Goodwill and Intangible Assets
Goodwill and Intangible Assets	4. Goodwill and Intangible Assets The following table summarizes the changes in the carrying value of goodwill: WEI RME Total (in thousands) Balance at October 2, 2016 $ $ $ Goodwill adjustments Foreign exchange impact Balance at January 1, 2017 $ $ $ In the first quarter of fiscal 2017, we completed our purchase price allocations for Coffey and INDUS and recorded a net goodwill adjustment of $0.7 million, which resulted from an updated valuation of our purchase price allocation of net assets acquired in the Coffey acquisition. Foreign exchange impact relates to our foreign subsidiaries with functional currencies that are different than our reporting currency. The gross amounts of goodwill for WEI were $315.6 million and $304.4 million at January 1, 2017 and October 2, 2016, respectively, excluding $82.4 million of accumulated impairment. The gross amounts of goodwill for RME were $509.8 million and $529.2 million at January 1, 2017 and October 2, 2016, respectively, excluding $33.2 million of accumulated impairment. We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter. Our last review was performed at June 27, 2016 (i.e. the first day of our fourth quarter in fiscal 2016). In addition, we regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill. We perform interim goodwill impairment reviews between our annual reviews if certain events and circumstances have occurred, such as a deterioration in general economic conditions; an increase in the competitive environment; a change in management, key personnel, strategy, or customers; negative or declining cash flows; or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods. 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. Our fourth quarter 2016 goodwill impairment review 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. Although we believe that our estimates of fair value for our reporting units are reasonable, if financial performance for our reporting units falls significantly below our expectations or market prices for similar businesses decline, the goodwill for our reporting units could become impaired. The gross amount and accumulated amortization of our acquired identifiable intangible assets with finite useful lives included in “Intangible assets - net” on our condensed consolidated balance sheets, were as follows: January 1, 2017 October 2, 2016 Weighted- Gross Accumulated Gross Accumulated ($ in thousands) Non-compete agreements 0.7 $ $ ) $ $ ) Client relations 2.2 ) ) Backlog 2.0 ) ) Technology and trade names 3.6 ) ) Total $ $ ) $ $ ) Foreign currency translation adjustments reduced net intangible assets by $0.9 million in the first quarter of fiscal 2017. Amortization expense for the first quarters of fiscal 2017 and 2016 was $5.9 million and $4.3 million, respectively. Estimated amortization expense for the remainder of fiscal 2017 and succeeding years is as follows: Amount (in thousands) 2017 $ 2018 2019 2020 2021 Beyond Total $

Property and Equipment

Property and Equipment	3 Months Ended
	Jan. 01, 2017
Property and Equipment
Property and Equipment	5. Property and Equipment Property and equipment consisted of the following: January 1, October 2, (in thousands) Land and buildings $ $ Equipment, furniture and fixtures Leasehold improvements Total property and equipment Accumulated depreciation Property and equipment, net $ $ The depreciation expense related to property and equipment was both $5.3 million for the first quarters of fiscal 2017 and 2016.

Stock Repurchase and Dividends

Stock Repurchase and Dividends	3 Months Ended
	Jan. 01, 2017
Stock Repurchase and Dividends
Stock Repurchase and Dividends	6. Stock Repurchase and Dividends On November 7, 2016, the Board of Directors authorized a new stock repurchase program under which we could repurchase up to $200 million of our common stock. In the first quarter of 2017, we repurchased through open market purchases under this program a total of 232,665 shares at an average price of $42.98, for a total cost of $10.0 million. On November 7, 2016, the Board of Directors declared a quarterly cash dividend of $0.09 per share payable on December 14, 2016 to stockholders of record as of the close of business on December 1, 2016. Dividends totaling $5.1 million and $4.7 million were paid in the first quarters of fiscal 2017 and fiscal 2016, respectively. Subsequent Event. On January 30, 2017, the Board of Directors declared a quarterly cash dividend of $0.09 per share payable on March 3, 2017 to stockholders of record as of the close of business on February 17, 2017.

Stockholders' Equity and Stock

Stockholders' Equity and Stock Compensation Plans	3 Months Ended
	Jan. 01, 2017
Stockholders' Equity and Stock Compensation Plans
Stockholders' Equity and Stock Compensation Plans	7. Stockholders’ Equity and Stock Compensation Plans We recognize the fair value of our stock-based compensation awards as compensation expense on a straight-line basis over the requisite service period in which the award vests. Stock-based compensation expense for the first quarters of fiscal 2017 and 2016 was $3.2 million and $2.8 million, respectively. The majority of these amounts were included in “Selling, general and administrative (“SG&A”) expenses” in our condensed consolidated statements of income. In the first quarter of fiscal 2017, we granted 183,163 stock options with an exercise price of $40.67 per share and an estimated weighted-average fair value of $12.35 per share to our non-employee directors and executive officers. The executive officer options vest over a four-year period, and the non-employee director options vest after one year. In addition, we awarded 99,180 performance shares units (“PSUs”) to our non-employee directors and executive officers at the fair value of $47.36 per share on the award date. All of the PSUs are performance-based and vest, if at all, after the conclusion of the three-year performance period. The number of PSUs that ultimately vest is based 50% on the growth in our diluted earnings per share and 50% on our total shareholder return over the vesting period. Additionally, we awarded 218,941 restricted stock units (“RSUs”) to our non-employee directors, executive officers and employees at the fair value of $40.80 per share on the award date. All of the executive officer and employee RSUs have time-based vesting over a four-year period, and the non-employee director RSUs vest after one year.

Earnings Per Share ("EPS")

Earnings Per Share ("EPS")	3 Months Ended
	Jan. 01, 2017
Earnings Per Share ("EPS")
Earnings Per Share ("EPS")	8. Earnings Per Share (“EPS”) Basic EPS is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding, less unvested restricted stock for the period. Diluted EPS is computed by dividing net income by the weighted-average number of common shares outstanding and dilutive potential common shares for the period. Potential common shares include the weighted-average dilutive effects of outstanding stock options and unvested restricted stock using the treasury stock method. The following table sets forth the number of weighted-average shares used to compute basic and diluted EPS: Three Months Ended January 1, December 27, (in thousands, except per share data) Net income attributable to Tetra Tech $ $ Weighted-average common shares outstanding - basic Effect of dilutive stock options and unvested restricted stock Weighted-average common stock outstanding - diluted Earnings per share attributable to Tetra Tech: Basic $ $ Diluted $ $ For the first quarters of fiscal 2017 and 2016, 0.1 million and 0.6 million options, respectively, were excluded from the calculation of dilutive potential common shares because the assumed proceeds per share exceeded the average market price per share during the period. Therefore, their inclusion would have been anti-dilutive.

Income Taxes

Income Taxes	3 Months Ended
	Jan. 01, 2017
Income Taxes
Income Taxes	9. Income Taxes The effective tax rates for the first quarters of fiscal 2017 and 2016 were 28.0% and 25.7%, respectively. During the first quarter of fiscal 2017, we adopted accounting guidance which requires excess tax benefits and deficiencies on share-based payments to be recorded as income tax expense or benefit in the statement of income rather than being recorded in additional paid-in capital on the balance sheet. As a result, we recognized a $1.8 million income tax benefit in the first quarter of fiscal 2017. During the first quarter of fiscal 2016, the Protecting Americans from Tax Hikes (“PATH”) Act of 2015 was signed into law. This law permanently extended the federal research and development tax credits (“R&D Credits”) retroactively to January 1, 2015. Our income tax expense for the first quarter of fiscal 2016 included an income tax benefit of $2.0 million attributable to the last nine months of fiscal 2015, primarily related to the retroactive recognition of the R&D Credits. Excluding these items, the effective tax rates for the first quarters of fiscal 2017 and 2016 were 32.8% and 32.1%, respectively. We review the realizability of deferred tax assets on a quarterly basis by assessing the need for a valuation allowance. As of January 1, 2017, we performed our assessment of net deferred tax assets. Significant management judgment is required in determining the provision for income taxes and, in particular, any valuation allowance recorded against our deferred tax assets. Applying the applicable accounting guidance requires an assessment of all available evidence, both positive and negative, regarding the realizability of the net deferred tax assets. Based upon recent results, we concluded that a cumulative loss in recent years exists in certain foreign jurisdictions. We have historically relied on the following factors in our assessment of the realizability of our net deferred tax assets: · taxable income in prior carryback years as permitted under the tax law; · future reversals of existing taxable temporary differences; · consideration of available tax planning strategies and actions that could be implemented, if necessary; and · estimates of future taxable income from our operations. We considered these factors in our estimate of the reversal pattern of deferred tax assets, using assumptions that we believe are reasonable and consistent with operating results. However, as a result of projected cumulative pre-tax losses in certain foreign jurisdictions for the 36 months ending January 1, 2017, we concluded that our estimates of future taxable income and certain tax planning strategies did not constitute sufficient positive evidence to assert that it is more likely than not that certain deferred tax assets would be realizable before expiration. Based on our assessment, we have concluded that it is not more likely than not that assets related to loss carry-forwards in certain foreign jurisdictions will be realized for which a valuation allowance of $23.7 million has been provided.

Reportable Segments

Reportable Segments	3 Months Ended
	Jan. 01, 2017
Reportable Segments
Reportable Segments	10. Reportable Segments Our reportable segments are described as follows: WEI: WEI provides consulting and engineering services worldwide for a broad range of water and infrastructure-related needs in both developed and emerging economies. WEI supports both public and private clients including federal, state/provincial, and local governments, and global and local commercial clients. The primary markets for WEI’s services include water resources analysis and water management, environmental restoration, government consulting, and a broad range of civil infrastructure master planning and engineering design for facilities, transportation, and regional and local development. WEI’s services span from early data collection and monitoring, to data analysis and information technology, to science and engineering applied research, to engineering design, to construction management and operations and maintenance. RME: RME provides consulting and engineering services worldwide for a broad range of resource management and energy needs. RME supports both private and public clients, including global industrial and commercial clients, U.S. federal agencies in large scale remediation, and major international development agencies. The primary markets for RME’s services include natural resources, energy, international development, remediation, waste management and utilities. RME’s services span from early data collection and monitoring, to data analysis and information technology, to science and engineering applied research, to engineering design, to construction management and operations and maintenance. RME also supports engineering, procurement and construction management (“EPCM”) for full service implementation of commercial projects. RCM: We report the results of the wind-down of our non-core construction activities in the RCM reportable segment. The remaining work to be performed in this segment will be substantially completed in fiscal 2017. Management evaluates the performance of these reportable segments based upon their respective segment operating income before the effect of amortization expense related to acquisitions, and other unallocated corporate expenses. We account for inter-segment sales and transfers as if the sales and transfers were to third parties; that is, by applying a negotiated fee onto the costs of the services performed. All significant intercompany balances and transactions are eliminated in consolidation. The following tables set forth summarized financial information regarding our reportable segments: Reportable Segments Three Months Ended January 1, December 27, (in thousands) Revenue WEI $ $ RME RCM Elimination of inter-segment revenue Total revenue $ $ Operating Income WEI $ $ RME RCM Corporate (1) Total operating income $ $ Depreciation WEI $ $ RME RCM Corporate Total depreciation $ $ (1) Includes amortization of intangibles, other costs, and other income not allocable to our reportable segments. January 1, October 2, (in thousands) Total Assets WEI $ $ RME RCM Corporate (1) Total assets $ $ (1) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goodwill, intangible assets, deferred income taxes and certain other assets. Major Clients Other than the U.S. federal government, no single client accounted for more than 10% of our revenue. All of our segments generated revenue from all client sectors. The following table represents our revenue by client sector: Three Months Ended January 1, December 27, (in thousands) Client Sector International (1) $ $ U.S. commercial U.S. federal government (2) U.S. state and local government Total $ $ (1) Includes revenue generated from foreign operations, primarily in Canada and Australia, and revenue generated from non-U.S. clients. (2) Includes revenue generated under U.S. federal government contracts performed outside the United States.

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Jan. 01, 2017
Fair Value Measurements
Fair Value Measurements	11. Fair Value Measurements The fair value of long-term debt was determined using the present value of future cash flows based on the borrowing rates currently available for debt with similar terms and maturities (Level 2 measurement, as described in “Critical Accounting Policies and Estimates” in our Annual Report on Form 10-K for the fiscal year ended October 2, 2016). The carrying value of our long-term debt approximated fair value at January 1, 2017 and October 2, 2016. As of January 1, 2017, we had borrowings of $388 million outstanding under our credit agreement, which were used to fund our business acquisitions, working capital needs, share repurchases, dividends, capital expenditures and contingent earn-outs.

Joint Ventures

Joint Ventures	3 Months Ended
	Jan. 01, 2017
Joint Ventures
Joint Ventures	12. Joint Ventures Consolidated Joint Ventures The aggregate revenue of our consolidated joint ventures was $1.1 million and $0.5 million for the first quarters of fiscal 2017 and 2016, respectively. The assets and liabilities of these consolidated joint ventures were immaterial at January 1, 2017 and October 2, 2016. These assets are restricted for use only by those joint ventures and are not available for our general operations. Cash and cash equivalents maintained by the consolidated joint ventures at January 1, 2017 and October 2, 2016 were both $0.2 million. Unconsolidated Joint Ventures We account for our unconsolidated joint ventures using the equity method of accounting. Under this method, we recognize our proportionate share of the net earnings of these joint ventures within “Other costs of revenue” in our condensed consolidated statements of income. For the first quarters of fiscal 2017 and 2016, we reported $1.0 million and $0.2 million of equity in earnings of unconsolidated joint ventures, respectively. Our maximum exposure to loss as a result of our investments in unconsolidated joint ventures is typically limited to the aggregate of the carrying value of the investment. Future funding commitments for our unconsolidated joint ventures are immaterial. The unconsolidated joint ventures are, individually and in the aggregate, immaterial to our condensed consolidated financial statements. The aggregate carrying values of the assets and liabilities of the unconsolidated joint ventures were $14.3 million and $12.3 million, respectively, at January 1, 2017, and $15.6 million and $13.5 million, respectively, at October 2, 2016.

Derivative Financial Instrument

Derivative Financial Instruments	3 Months Ended
	Jan. 01, 2017
Derivative Financial Instruments
Derivative Financial Instruments	13. Derivative Financial Instruments We use certain interest rate derivative contracts to hedge interest rate exposures on our variable rate debt. We enter into foreign currency derivative contracts with financial institutions to reduce the risk that cash flows and earnings will be adversely affected by foreign currency exchange rate fluctuations. Our hedging program is not designated for trading or speculative purposes. We recognize derivative instruments as either assets or liabilities on the accompanying condensed 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 condensed consolidated balance sheets as accumulated other comprehensive income (loss), and in our condensed consolidated statements of income for those derivatives designated as fair value hedges. In fiscal 2013, we entered into three interest rate swap agreements that we have designated as cash flow hedges to fix the variable interest rates on a portion of borrowings under our term loan facility. In the first quarter of fiscal 2014, we entered into two interest rate swap agreements that we designated as cash flow hedges to fix the variable interest rates on the borrowings under our term loan facility. At January 1, 2017, the effective portion of our interest rate swap agreements designated as cash flow hedges before tax effect was $0.6 million, all of which we expect to be reclassified from accumulated other comprehensive income (loss) to interest expense within the next 12 months. As of January 1, 2017, the notional principal, fixed rates and related expiration dates of our outstanding interest rate swap agreements are as follows: Notional Amount Fixed Expiration $ May 2018 May 2018 May 2018 May 2018 May 2018 In December 2016, we entered into a forward contract with a notional amount of AUD$10.0 million to reduce the impact of changes in foreign exchange rates related to an Australian dollar receivable maturing January 2017. The fair values of our outstanding derivatives designated as hedging instruments were as follows: Fair Value of Derivative Balance Sheet Location January 1, October 2, (in thousands) Foreign exchange forward contract Other current assets $ $ – Interest rate swap agreements Other current liabilities $ $ The impact of the effective portions of derivative instruments in cash flow hedging relationships and fair value relationships on income and other comprehensive income was immaterial for the first three months of fiscal 2017 and the fiscal year ended October 2, 2016. Additionally, there were no ineffective portions of derivative instruments. Accordingly, no amounts were excluded from effectiveness testing for our foreign currency forward contracts and interest rate swap agreements.

Reclassifications Out of Accumu

Reclassifications Out of Accumulated Other Comprehensive Loss	3 Months Ended
	Jan. 01, 2017
Reclassifications Out of Accumulated Other Comprehensive Loss
Reclassifications Out of Accumulated Other Comprehensive Loss	14. Reclassifications Out of Accumulated Other Comprehensive Loss The accumulated balances and reporting period activities for the three months ended January 1, 2017 and December 27, 2015 related to reclassifications out of accumulated other comprehensive loss are summarized as follows: Foreign Loss on Accumulated (in thousands) Balances at September 27, 2015 $ $ $ Other comprehensive income (loss) before reclassifications Reclassification adjustment of prior derivative settlement, net of tax – Net current-period other comprehensive income (loss) Balances at December 27, 2015 $ $ $ Balances at October 2, 2016 $ $ $ Other comprehensive income (loss) before reclassifications Reclassification adjustment of prior derivative settlement, net of tax – Net current-period other comprehensive income (loss) Balances at January 1, 2017 $ $ $

Commitments and Contingencies

Commitments and Contingencies	3 Months Ended
	Jan. 01, 2017
Commitments and Contingencies
Commitments and Contingencies	15. Commitments and Contingencies We are subject to certain claims and lawsuits typically filed against the engineering, consulting and construction profession, alleging primarily professional errors or omissions. We carry professional liability insurance, subject to certain deductibles and policy limits, against such claims. However, in some actions, parties are seeking damages that exceed our insurance coverage or for which we are not insured. While management does not believe that the resolution of these claims will have a material adverse effect, individually or in aggregate, on our financial position, results of operations or cash flows, management acknowledges the uncertainty surrounding the ultimate resolution of these matters.

Recent Accounting Pronouncement

Recent Accounting Pronouncements	3 Months Ended
	Jan. 01, 2017
Recent Accounting Pronouncements
Recent Accounting Pronouncements	16. Recent Accounting Pronouncements In March 2016, the FASB issued updated guidance which requires excess tax benefits and deficiencies on share-based payments to be recorded as income tax expense or benefit in the income statement rather than being recorded in additional paid-in capital. This guidance is effective for annual and interim periods beginning after December 15, 2016, with early adoption permitted. In the first quarter of fiscal 2017, we adopted this guidance and recognized an income tax benefit of $1.8 million in our condensed consolidated statement of income. We also reported this amount as part of our cash from operating activities on our condensed consolidated statement of cash flows for the first quarter of fiscal 2017. In May 2014, the Financial Accounting Standards Board (“FASB”) issued an accounting standard that will supersede existing revenue recognition guidance under current U.S. GAAP. The new standard is a comprehensive new revenue recognition model that requires a company to recognize revenue to depict the transfer of goods or services to a customer at an amount that reflects the consideration it expects to receive in exchange for those goods and services. The accounting standard is effective for us in the first quarter of fiscal 2019. Companies may use either a full retrospective or a modified retrospective approach to adopt this standard. We are currently evaluating the impact and method of the adoption of this guidance on our consolidated financial statements. In January 2015, the FASB issued an amendment to the accounting guidance related to the income statement presentation of extraordinary and unusual items. The amendment eliminates from U.S. GAAP the concept of extraordinary items. The guidance is effective for us in the first quarter of fiscal 2017, and the adoption of this guidance had no impact on our condensed consolidated financial statements. In January 2016, the FASB issued guidance that generally requires companies to measure investments in other entities, except those accounted for under the equity method, at fair value and recognize any changes in fair value in net income. The guidance is effective for us in the second quarter of fiscal 2018. We do not expect the adoption of this guidance to have a significant impact on our consolidated financial statements. In February 2016, the FASB issued guidance that primarily requires lessees to recognize most leases on their balance sheets but record expenses on their income statements in a manner similar to current accounting. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The guidance is effective for us in the second quarter of fiscal 2019, with early adoption permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In June 2016, the FASB issued updated guidance which requires entities to estimate all expected credit losses for certain types of financial instruments, including trade receivables, held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. The updated guidance also expands the disclosure requirements to enable users of financial statements to understand the entity’s assumptions, models and methods for estimating expected credit losses. This guidance is effective for us in the second quarter of fiscal 2020, with early adoption permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In August 2016, the FASB issued guidance to address eight specific cash flow issues to reduce the existing diversity in practice in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. This guidance is effective for us in the second quarter of fiscal 2018, with early adoption permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In October 2016, the FASB issued updated guidance which requires entities to recognize the income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. The updated guidance also requires entities to disclose a comparison of income tax expense or benefit with statutory expectations and disclose the types of temporary differences and carryforwards that give rise to a significant portion of deferred income taxes. This guidance is effective for us in the second quarter of fiscal 2018, with early adoption permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In November 2016, the FASB issued updated guidance which provides amendments to address the classification and presentation of changes in restricted cash and in the statement of cash flows. This guidance is effective for us in the second quarter of fiscal 2018, with early adoption permitted using a retrospective transition method. We are currently evaluating the impact that this guidance will have on our consolidated financial statements. In January 2017, the FASB issued new guidance that changes the definition of a business to assist entities with evaluating when a set of transferred assets and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred assets and activities is not a business. This guidance is effective for us in the first quarter of fiscal year 2019, and interim periods within those years, with early adoption permitted. We are currently evaluating the impact that this guidance will have on our consolidated financial statements.

Accounts Receivable - Net and24

Accounts Receivable - Net and Revenue Recognition (Tables)	3 Months Ended
	Jan. 01, 2017
Accounts Receivable - Net and Revenue Recognition
Schedule of net accounts receivable and billings in excess of costs on uncompleted contracts	January 1, October 2, (in thousands) Billed $ $ Unbilled Contract retentions Total accounts receivable – gross Allowance for doubtful accounts Total accounts receivable – net $ $ Billings in excess of costs on uncompleted contracts $ $

Mergers and Acquisitions (Table

Mergers and Acquisitions (Tables) - Coffey and INDUS	3 Months Ended
	Jan. 01, 2017
Mergers and Acquisitions
Summary of estimated fair values of assets acquired and liabilities assumed	The following table summarizes the estimated fair values of assets acquired and liabilities assumed as of the respective acquisition dates for our acquisitions completed in fiscal 2016 (in thousands): Accounts receivable $ Other current assets Property and equipment Goodwill Backlog and trade name intangible assets Other assets Current liabilities Borrowings Other long-term liabilities Net assets acquired $
Summary of pro-forma operating results	Pro-Forma Three Months Ended January 1, December 27, (in thousands, except per share data) Revenue $ $ Operating income Net income attributable to Tetra Tech Earnings per share attributable to Tetra Tech Basic $ $ Diluted $ $

Goodwill and Intangible Assets

Goodwill and Intangible Assets (Tables)	3 Months Ended
	Jan. 01, 2017
Goodwill and Intangible Assets
Summary of changes in the carrying value of goodwill	WEI RME Total (in thousands) Balance at October 2, 2016 $ $ $ Goodwill adjustments Foreign exchange impact Balance at January 1, 2017 $ $ $
Summary of gross amount and accumulated amortization of acquired identifiable intangible assets with finite useful lives	January 1, 2017 October 2, 2016 Weighted- Gross Accumulated Gross Accumulated ($ in thousands) Non-compete agreements 0.7 $ $ ) $ $ ) Client relations 2.2 ) ) Backlog 2.0 ) ) Technology and trade names 3.6 ) ) Total $ $ ) $ $ )
Schedule of estimated amortization expense for remainder of fiscal and succeeding years	Amount (in thousands) 2017 $ 2018 2019 2020 2021 Beyond Total $

Property and Equipment (Tables)

Property and Equipment (Tables)	3 Months Ended
	Jan. 01, 2017
Property and Equipment
Schedule of property and equipment	January 1, October 2, (in thousands) Land and buildings $ $ Equipment, furniture and fixtures Leasehold improvements Total property and equipment Accumulated depreciation Property and equipment, net $ $

Earnings Per Share ("EPS") (Tab

Earnings Per Share ("EPS") (Tables)	3 Months Ended
	Jan. 01, 2017
Earnings Per Share ("EPS")
Schedule of number of weighted-average shares used to compute basic and diluted EPS	Three Months Ended January 1, December 27, (in thousands, except per share data) Net income attributable to Tetra Tech $ $ Weighted-average common shares outstanding - basic Effect of dilutive stock options and unvested restricted stock Weighted-average common stock outstanding - diluted Earnings per share attributable to Tetra Tech: Basic $ $ Diluted $ $

Reportable Segments (Tables)

Reportable Segments (Tables)	3 Months Ended
	Jan. 01, 2017
Reportable Segments
Summarized financial information of reportable segments	Three Months Ended January 1, December 27, (in thousands) Revenue WEI $ $ RME RCM Elimination of inter-segment revenue Total revenue $ $ Operating Income WEI $ $ RME RCM Corporate (1) Total operating income $ $ Depreciation WEI $ $ RME RCM Corporate Total depreciation $ $ (1) Includes amortization of intangibles, other costs, and other income not allocable to our reportable segments. January 1, October 2, (in thousands) Total Assets WEI $ $ RME RCM Corporate (1) Total assets $ $ (1) Corporate assets consist of intercompany eliminations and assets not allocated to our reportable segments including goodwill, intangible assets, deferred income taxes and certain other assets.
Summary of revenue by client sector	Three Months Ended January 1, December 27, (in thousands) Client Sector International (1) $ $ U.S. commercial U.S. federal government (2) U.S. state and local government Total $ $ (1) Includes revenue generated from foreign operations, primarily in Canada and Australia, and revenue generated from non-U.S. clients. (2) Includes revenue generated under U.S. federal government contracts performed outside the United States.

Derivative Financial Instrume30

Derivative Financial Instruments (Tables)	3 Months Ended
	Jan. 01, 2017
Derivative Financial Instruments
Schedule of notional principal, fixed rates and related expiration dates of outstanding interest rate swap agreements	As of January 1, 2017, the notional principal, fixed rates and related expiration dates of our outstanding interest rate swap agreements are as follows: Notional Amount Fixed Expiration $ May 2018 May 2018 May 2018 May 2018 May 2018
Schedule of fair values of the entity's outstanding derivatives designated as hedging instruments	Fair Value of Derivative Balance Sheet Location January 1, October 2, (in thousands) Foreign exchange forward contract Other current assets $ $ – Interest rate swap agreements Other current liabilities $ $

Reclassifications Out of Accu31

Reclassifications Out of Accumulated Other Comprehensive Loss (Tables)	3 Months Ended
	Jan. 01, 2017
Reclassifications Out of Accumulated Other Comprehensive Loss
Summary of reclassifications out of accumulated other comprehensive loss	Foreign Loss on Accumulated (in thousands) Balances at September 27, 2015 $ $ $ Other comprehensive income (loss) before reclassifications Reclassification adjustment of prior derivative settlement, net of tax – Net current-period other comprehensive income (loss) Balances at December 27, 2015 $ $ $ Balances at October 2, 2016 $ $ $ Other comprehensive income (loss) before reclassifications Reclassification adjustment of prior derivative settlement, net of tax – Net current-period other comprehensive income (loss) Balances at January 1, 2017 $ $ $

Accounts Receivable - Net and32

Accounts Receivable - Net and Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015	Oct. 02, 2016
Net accounts receivable and billings in excess of costs on uncompleted contracts
Billed	$ 406,173		$ 364,287
Unbilled	343,186		356,147
Contract retentions	32,683		29,135
Total accounts receivable - gross	782,042		749,569
Allowance for doubtful accounts	(31,258)		(35,233)
Total accounts receivable - net	750,784		714,336
Billings in excess of costs on uncompleted contracts	$ 112,695		88,223
Period for billing and collecting unbilled receivables	12 months
Period for earning majority of billings in excess of costs	12 months
Total accounts receivable related to claims, including requests for equitable adjustment on contracts	$ 44,000		45,000
Gains from claim settlement	0
Billed accounts receivable related to U.S. federal government contracts	76,000		47,400
U.S. federal government unbilled receivables	82,900		92,200
Revenue Recognition and Contract Costs
Net unfavorable operating income adjustments	4,000
Liability for anticipated losses	6,600		$ 6,700
Estimated cost to complete the related contracts	18,100
RME
Revenue Recognition and Contract Costs
Net unfavorable operating income adjustments	2,300
RCM
Net accounts receivable and billings in excess of costs on uncompleted contracts
Cash proceeds from claim settlement		$ 13,400
Claims amount		8,800
Gains from claim settlement		$ 4,600
Revenue Recognition and Contract Costs
Net unfavorable operating income adjustments	$ 1,700

Mergers and Acquisitions (Detai

Mergers and Acquisitions (Details) $ / shares in Units, $ in Thousands	Feb. 01, 2017employee	Jan. 18, 2016USD ($)employee	Jan. 01, 2017USD ($)$ / shares	Mar. 27, 2016USD ($)	Dec. 27, 2015USD ($)$ / shares	Oct. 02, 2016USD ($)	Sep. 27, 2015USD ($)
Mergers and Acquisitions
Contingent earn-out liability			$ 8,900
Aggregate maximum of contingent consideration			14,500
Estimated fair values of the assets acquired and liabilities assumed
Goodwill			709,739			$ 717,988
Pro-forma operating results
Increase (decrease) in contingent consideration			$ 0		$ 1,000
Gain (loss) on change in contingent consideration					(1,000)
Earn-out liability							$ 0
Minimum
Mergers and Acquisitions
Earn-out period for operating income projection			2 years
Maximum
Mergers and Acquisitions
Earn-out period for operating income projection			3 years
Coffey
Mergers and Acquisitions
Number of employees | employee		3,300
Aggregate fair value of purchase price		$ 76,100
Assumed debt		65,100
Secured bank debt assumed		37,100
Unsecured corporate bonds assumed		28,000
Estimated fair values of the assets acquired and liabilities assumed
Borrowings		$ (65,100)
INDUS
Mergers and Acquisitions
Aggregate fair value of purchase price				$ 18,700
Cash paid to the sellers				14,000
Contingent earn-out liability				4,700
Aggregate maximum of contingent consideration				$ 8,000
Earn-out period for operating income projection				2 years
Coffey and INDUS
Mergers and Acquisitions
Assumed debt						65,086
Estimated fair values of the assets acquired and liabilities assumed
Accounts receivable						71,515
Other current assets						18,869
Property and equipment						14,218
Goodwill						108,323
Backlog and trade name intangible assets						29,445
Other assets						747
Current liabilities						(78,311)
Borrowings						(65,086)
Other long-term liabilities						(4,885)
Net assets acquired						$ 94,835
Pro-forma operating results
Revenue			$ 668,851		671,669
Operating income			39,855		14,238
Net income attributable to Tetra Tech			$ 26,562		$ 3,016
Earnings per share attributable to Tetra Tech, Basic (in dollars per share) | $ / shares			$ 0.47		$ 0.05
Earnings per share attributable to Tetra Tech, Diluted (in dollars per share) | $ / shares			$ 0.46		$ 0.05
Revenue Contributed			$ 102,300
Operating income			7,400
Amortization of intangible assets			$ 2,600
Coffey and INDUS | Minimum | Backlog and customer relationship
Estimated fair values of the assets acquired and liabilities assumed
Useful life of intangible assets			1 year
Coffey and INDUS | Minimum | Trade names
Estimated fair values of the assets acquired and liabilities assumed
Useful life of intangible assets			3 years
Coffey and INDUS | Maximum | Backlog and customer relationship
Estimated fair values of the assets acquired and liabilities assumed
Useful life of intangible assets			5 years
Coffey and INDUS | Maximum | Trade names
Estimated fair values of the assets acquired and liabilities assumed
Useful life of intangible assets			5 years
Coffey and INDUS | Weighted average | Backlog and customer relationship
Estimated fair values of the assets acquired and liabilities assumed
Useful life of intangible assets			3 years
Eco Logical Australia | Subsequent Event
Mergers and Acquisitions
Number of employees | employee	160

Goodwill and Intangible Asset34

Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Oct. 02, 2016
Goodwill
Balance at beginning of the period	$ 717,988
Goodwill adjustments	705
Foreign exchange impact	(8,954)
Balance at end of the period	$ 709,739	$ 717,988
Impairment of goodwill		0
Income approach
Goodwill
Weighted rate used in fair value of goodwill (as a percent)	70.00%
Discounted cash flow and market approach
Goodwill
Weighted rate used in fair value of goodwill (as a percent)	30.00%
Coffey
Goodwill
Goodwill adjustments	$ 700
WEI
Goodwill
Balance at beginning of the period	221,953
Goodwill adjustments	13,509
Foreign exchange impact	(2,300)
Balance at end of the period	233,162	221,953
Gross amounts of goodwill	315,600	304,400
Accumulated impairment	82,400	82,400
RME
Goodwill
Balance at beginning of the period	496,035
Goodwill adjustments	(12,804)
Foreign exchange impact	(6,654)
Balance at end of the period	476,577	496,035
Gross amounts of goodwill	509,800	529,200
Accumulated impairment	$ 33,200	$ 33,200

Goodwill and Intangible Asset35

Goodwill and Intangible Assets - Finite Lived Assets (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015	Oct. 02, 2016
Finite-lived intangible assets
Gross Amount	$ 141,767		$ 144,044
Accumulated Amortization	(99,600)		(95,082)
Foreign currency translation adjustments	900
Amortization expense	5,900	$ 4,300
Estimated amortization expense
2,017	16,286
2,018	14,011
2,019	6,871
2,020	3,708
2,021	651
Beyond	640
Total	$ 42,167
Non-compete agreements
Finite-lived intangible assets
Weighted-Average Remaining Life (in Years)	8 months 12 days
Gross Amount	$ 876		881
Accumulated Amortization	$ (858)		(840)
Client relations
Finite-lived intangible assets
Weighted-Average Remaining Life (in Years)	2 years 2 months 12 days
Gross Amount	$ 111,166		112,367
Accumulated Amortization	$ (85,982)		(83,514)
Backlog
Finite-lived intangible assets
Weighted-Average Remaining Life (in Years)	2 years
Gross Amount	$ 22,229		23,018
Accumulated Amortization	$ (9,304)		(7,536)
Technology and trade names
Finite-lived intangible assets
Weighted-Average Remaining Life (in Years)	3 years 7 months 6 days
Gross Amount	$ 7,496		7,778
Accumulated Amortization	$ (3,456)		$ (3,192)

Property and Equipment (Details

Property and Equipment (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015	Oct. 02, 2016
Property and Equipment
Property and equipment, gross	$ 212,218		$ 214,694
Accumulated depreciation	(148,916)		(146,867)
Property and equipment, net	63,302		67,827
Depreciation expense related to property and equipment	5,251	$ 5,303
Land and buildings
Property and Equipment
Property and equipment, gross	3,683		3,683
Equipment, furniture and fixtures
Property and Equipment
Property and equipment, gross	179,674		180,750
Leasehold improvements
Property and Equipment
Property and equipment, gross	$ 28,861		$ 30,261

Stock Repurchase and Dividends

Stock Repurchase and Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands	Jan. 30, 2017	Nov. 07, 2016	Jan. 01, 2017	Dec. 27, 2015
Maximum repurchase amount under stock repurchase program		$ 200,000
Shares repurchased through open market purchases			232,665
Average price of shares repurchased (in dollars per share)			$ 42.98
Cost of shares repurchased			$ 10,000
Quarterly cash dividend declared (in dollars per share)		$ 0.09
Payment of dividends			$ 5,144	$ 4,713
Subsequent Event
Quarterly cash dividend declared (in dollars per share)	$ 0.09

Stockholders' Equity and Stoc38

Stockholders' Equity and Stock Compensation Plans (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Stockholder's equity and stock compensation plans
Stock-based compensation expense	$ 3.2	$ 2.8
Options granted (in shares)	183,163
Exercise price of stock options granted (in dollars per share)	$ 40.67
Non-employee directors and executive officers
Stockholder's equity and stock compensation plans
Weighted-average fair value of stock options granted (in dollars per share)	$ 12.35
Stock options | Executive officers
Stockholder's equity and stock compensation plans
Vesting period	4 years
Stock options | Non-employee director
Stockholder's equity and stock compensation plans
Vesting period	1 year
RSUs | Non-employee director
Stockholder's equity and stock compensation plans
Vesting period	1 year
RSUs | Executive officers and employees
Stockholder's equity and stock compensation plans
Vesting period	4 years
Performance-based restricted stock
Stockholder's 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 fiscal year shareholder vesting period	50.00%
Performance-based restricted stock | Non-employee directors and executive officers
Stockholder's equity and stock compensation plans
Granted (in shares)	99,180
Granted, fair value (in dollars per share)	$ 47.36
Vesting period	3 years
Time-based restricted stock | Non-employee directors, executive officers and employees
Stockholder's equity and stock compensation plans
Granted (in shares)	218,941
Granted, fair value (in dollars per share)	$ 40.80

Earnings Per Share (''EPS'') -

Earnings Per Share (''EPS'') - Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Number of weighted-average shares used to compute basic and diluted EPS:
Net income attributable to Tetra Tech	$ 26,562	$ 23,239
Weighted-average common shares outstanding - basic	57,099	59,058
Effect of dilutive stock options and unvested restricted stock	1,046	735
Weighted-average common stock outstanding - diluted	58,145	59,793
Earnings per share attributable to Tetra Tech:
Basic (in dollars per share)	$ 0.47	$ 0.39
Diluted (in dollars per share)	$ 0.46	$ 0.39

Earnings Per Share (''EPS'') 40

Earnings Per Share (''EPS'') - Antidilutive Securities (Details) - shares shares in Millions	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Stock options
Antidilutive securities
Securities excluded from the calculation of dilutive potential common shares	0.1	0.6

Income Taxes - Acquisition and

Income Taxes - Acquisition and integration expenses information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Effective tax rate (as a percent)	28.00%	25.70%
Income tax benefit	$ 10,358	$ 8,030
R&D Credits		$ 2,000
Effective income tax rate excluding R&D credits (as a percent)	32.80%	32.10%
Period of projected cumulative pre-tax losses in certain foreign jurisdictions	36 months
Foreign
Loss carry-forwards, valuation allowance	$ 23,700
Accounting Standards Update 2016-09
Income tax benefit	$ (1,800)

Reportable Segments - Financial

Reportable Segments - Financial Information (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015	Oct. 02, 2016
Financial information concerning reportable segments
Revenue	$ 668,851	$ 560,708
Operating Income	39,855	32,930
Depreciation	5,251	5,303
Total assets	1,800,423		$ 1,800,779
Inter-segment elimination
Financial information concerning reportable segments
Revenue	(22,538)	(16,218)
Corporate
Financial information concerning reportable segments
Operating Income	(8,815)	(7,261)
Depreciation	284	409
Total assets	895,212		930,339
WEI | Operating segment
Financial information concerning reportable segments
Revenue	287,136	240,383
Operating Income	24,979	20,030
Depreciation	1,165	1,168
Total assets	331,947		308,438
RME | Operating segment
Financial information concerning reportable segments
Revenue	396,022	315,717
Operating Income	26,733	25,443
Depreciation	3,647	3,533
Total assets	534,306		522,895
RCM | Operating segment
Financial information concerning reportable segments
Revenue	8,231	20,826
Operating Income	(3,042)	(5,282)
Depreciation	155	$ 193
Total assets	$ 38,958		$ 39,107

Reportable Segments - Revenue B

Reportable Segments - Revenue By Sector (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Revenue by client sector
Revenue	$ 668,851	$ 560,708
International
Revenue by client sector
Revenue	172,457	135,807
U.S. commercial
Revenue by client sector
Revenue	190,266	188,164
U.S. federal government
Revenue by client sector
Revenue	222,634	165,022
U.S. state and local government
Revenue by client sector
Revenue	$ 83,494	$ 71,715

Fair Value Measurements (Detail

Fair Value Measurements (Details) $ in Millions	Jan. 01, 2017USD ($)
Fair Value Measurements
Net borrowing under credit agreement	$ 388

Joint Ventures (Details)

Joint Ventures (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015	Oct. 02, 2016
Aggregate revenue of consolidated joint ventures	$ 668,851	$ 560,708
Unconsolidated Joint Ventures
Equity in earnings from unconsolidated joint ventures	1,030	202
Carrying value of assets of unconsolidated joint ventures	14,300		$ 15,600
Carrying value of liabilities of unconsolidated joint ventures	12,300		13,500
Consolidated Joint Ventures
Aggregate revenue of consolidated joint ventures	1,100	$ 500
Cash and cash equivalents of consolidated joint ventures	$ 200		$ 200

Derivative Financial Instrume46

Derivative Financial Instruments - General Information (Details) $ in Thousands, AUD in Millions	3 Months Ended		12 Months Ended
	Jan. 01, 2017USD ($)	Dec. 29, 2013item	Oct. 02, 2016USD ($)	Sep. 29, 2013item	Dec. 31, 2016AUD
Interest rate swap agreements | Derivatives designated as hedging instruments
Derivative financial instruments
Amounts excluded from effectiveness testing	$ 0		$ 0
Interest rate swap agreements | Designated as cash flow hedges | Derivatives designated as hedging instruments
Derivative financial instruments
Number of derivative agreements | item		2		3
Amount of effective portion of derivatives before tax effect	$ 600
Period of reclassification from accumulated other comprehensive income to interest expense	12 months
Interest rate swap agreement bearing fixed rate 1.36%
Derivative financial instruments
Notional Amount	$ 43,242
Fixed Rate (as a percent)	1.36%
Interest rate swap agreement bearing fixed rate 1.34%
Derivative financial instruments
Notional Amount	$ 43,242
Fixed Rate (as a percent)	1.34%
Interest rate swap agreement bearing fixed rate 1.35%
Derivative financial instruments
Notional Amount	$ 43,242
Fixed Rate (as a percent)	1.35%
Interest rate swap agreement bearing fixed rate 1.23%
Derivative financial instruments
Notional Amount	$ 21,621
Fixed Rate (as a percent)	1.23%
Interest rate swap agreement bearing fixed rate 1.24%
Derivative financial instruments
Notional Amount	$ 21,621
Fixed Rate (as a percent)	1.24%
Foreign exchange forward contract | Derivatives designated as hedging instruments
Derivative financial instruments
Amounts excluded from effectiveness testing	$ 0		$ 0
Foreign exchange forward contract | Designated as cash flow hedges | Derivatives designated as hedging instruments
Derivative financial instruments
Notional Amount | AUD					AUD 10

Derivative Financial Instrume47

Derivative Financial Instruments - Table (Details) - Derivatives designated as hedging instruments - Designated as cash flow hedges - USD ($) $ in Thousands	Jan. 01, 2017	Oct. 02, 2016
Foreign exchange forward contract | Other current assets
Derivative financial instruments
Fair value of derivative instruments	$ 81
Interest rate swap agreements | Other current liabilities
Derivative financial instruments
Fair value of derivative instruments	$ 567	$ 1,572

Reclassifications Out of Accu48

Reclassifications Out of Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Reclassifications out of accumulated other comprehensive income (loss)
Balance at the beginning of the period	$ 869,259
Balance at the end of the period	872,571
Foreign Currency Translation Adjustments
Reclassifications out of accumulated other comprehensive income (loss)
Balance at the beginning of the period	(126,844)	$ (141,229)
Other comprehensive income (loss) before classifications	(16,182)	(16,484)
Net current-period other comprehensive income (loss)	(16,182)	(16,484)
Balance at the end of the period	(143,026)	(157,713)
Loss on Derivative Instruments
Reclassifications out of accumulated other comprehensive income (loss)
Balance at the beginning of the period	(1,164)	(1,942)
Other comprehensive income (loss) before classifications	1,338	1,671
Reclassification adjustment of prior derivative settlement, net of tax	(342)	(561)
Net current-period other comprehensive income (loss)	996	1,110
Balance at the end of the period	(168)	(832)
Accumulated Other Comprehensive Loss
Reclassifications out of accumulated other comprehensive income (loss)
Balance at the beginning of the period	(128,008)	(143,171)
Other comprehensive income (loss) before classifications	(14,844)	(14,813)
Reclassification adjustment of prior derivative settlement, net of tax	(342)	(561)
Net current-period other comprehensive income (loss)	(15,186)	(15,374)
Balance at the end of the period	$ (143,194)	$ (158,545)

Recent Accounting Pronounceme49

Recent Accounting Pronouncements (Details) - USD ($) $ in Thousands	3 Months Ended
	Jan. 01, 2017	Dec. 27, 2015
Income tax benefit	$ 10,358	$ 8,030
Accounting Standards Update 2016-09
Income tax benefit	$ (1,800)