2 unchanged sentences
Report of Independent Registered Public Accounting Firm
−Removed: Consolidated Balance Sheets at October 3 , 202 1 and September 2 7 , 20 20
−Removed: Consolidated Statements of Income for the fiscal years ended October 3 , 202 1 , September 2 7 , 20 20 and September 29 , 201 9
−Removed: Consolidated Statements of Comprehensive Income for the fiscal years ended October 3 , 202 1 , September 2 7 , 20 20 and September 29 , 201 9
−Removed: Consolidated Statements of Cash Flows for the fiscal years ended October 3 , 202 1 , September 2 7 , 20 20 and September 29 , 201 9
−Removed: Consolidated Statements of Equity for the fiscal years ended October 3 , 202 1 , September 2 7 , 20 20 and September 29 , 201 9
+Added: Consolidated Balance Sheets at October 2 , 202 2 and October 3 , 202 1
+Added: Consolidated Statements of Income for the fiscal years ended October 2, 2022, October 3, 2021 and September 27, 2020
+Added: Consolidated Statements of Comprehensive Income for the fiscal years ended October 2, 2022, October 3, 2021 and September 27, 2020
+Added: Consolidated Statements of Cash Flows for the fiscal years ended October 2, 2022, October 3, 2021 and September 27, 2020
+Added: Consolidated Statements of Equity for the fiscal years ended October 2, 2022, October 3, 2021 and September 27, 2020
Notes to Consolidated Financial Statements
−Removed: Schedule II – Valuation and Qualifying Accounts and Reserves for the fiscal years ended October 3 , 202 1 , September 2 7 , 20 20 , and September 29 , 201 9
+Added: Schedule II – Valuation and Qualifying Accounts and Reserves for the fiscal years ended October 2, 2022, October 3, 2021 and September 27, 2020
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
2 unchanged sentences
We have audited the accompanying consolidated balance sheets of Tetra Tech, Inc.
−Removed: and its subsidiaries (the “Company”) as of October 3, 2021 and September 27, 2020, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended October 3, 2021, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”).
+Added: and its subsidiaries (the “Company”) as of October 2, 2022 and October 3, 2021, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended October 2, 2022, including the related notes (collectively referred to as the “consolidated financial statements”).
We also have audited the Company's internal control over financial reporting as of October 2, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
−Removed: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 3, 2021 and September 27, 2020, and the results of its operations and its cash flows for each of the three years in the period ended October 3, 2021 in conformity with accounting principles generally accepted in the United States of America.
+Added: In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of October 2, 2022 and October 3, 2021, and the results of its operations and its cash flows for each of the three years in the period ended October 2, 2022 in conformity with accounting principles generally accepted in the United States of America.
Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of October 2, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
−Removed: Change in Accounting Principle
−Removed: As discussed in Note 10 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in fiscal 2020.
Basis for Opinions
11 unchanged sentences
We believe that our audits provide a reasonable basis for our opinions.
−Removed: As described in Management's Report on Internal Control over Financial Reporting, management has excluded Hoare Lea, LLP and Subsidiaries ("HLE") from its assessment of internal control over financial reporting as of October 3, 2021, because it was acquired by the Company in a purchase business combination during 2021.
−Removed: We have also excluded HLE from our audit of internal control over financial reporting.
−Removed: HLE is a wholly-owned subsidiary whose total assets and total revenue excluded from management's assessment and our audit of internal control over financial reporting represent approximately 2% and less than 1%, respectively, of the related consolidated financial statement amounts as of and for the fiscal year ended October 3, 2021.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.
−Removed: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions
−Removed: and dispositions of the assets of the company;
+Added: A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;
11 unchanged sentences
The cost input is based primarily on contract cost incurred to date compared to total estimated contract cost.
−Removed: This measure includes forecasts based on the best information available and reflects management's judgement to faithfully depict the value of the services transferred to the customer.
+Added: This measure includes forecasts based on the best information available and reflects management's judgment to faithfully depict the value of the services transferred to the customer.
Due to uncertainties inherent in the estimation process, it is possible that estimates of costs to complete a performance obligation will be revised in the near-term.
For those performance obligations for which revenue is recognized using a cost-to-cost measure of progress method, changes in total estimated costs, and related progress towards complete satisfaction of the performance obligation, are recognized on a cumulative catch-up basis in the period in which the revisions to the estimates are made.
−Removed: As a result, the Company recognized net favorable operating income adjustments of $0.7 million for the year ended October 3, 2021, exclusive of the amounts related to claims described below.
+Added: As a result, the Company recognized immaterial operating income adjustments for the year ended October 2, 2022.
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.
1 unchanged sentence
Claims are amounts in excess of agreed contract prices that the Company seeks to collect from clients or other third parties.
−Removed: Claims were approximately $11 million as of October 3, 2021.
+Added: The Company had no claims as of October 2, 2022.
The principal considerations for our determination that performing procedures relating to revenue recognition - determination of total estimated contract cost for fixed-price contracts is a critical audit matter are the significant amount of judgment required by management in determining the total estimated contract cost for fixed-price contracts which, in turn, led to a high degree of auditor judgment, subjectivity, and audit effort in performing procedures and in evaluating the audit evidence obtained related to the total estimated contract costs for fixed-price contracts with cumulative catch-up adjustments, anticipated losses or claims.
12 unchanged sentences
ASSETS October 2,
−Removed: 2021 September 27,
+Added: 2022 October 3,
Current assets:
19 unchanged sentences
Short-term lease liabilities, operating leases 57,865 67,452
−Removed: Current portion of long-term debt and other short-term borrowings 12,504 49,264
+Added: Current portion of long-term debt 12,504 12,504
Current contingent earn-out liabilities 28,797 19,520
8 unchanged sentences
Preferred stock – Authorized, 2,000 shares of $ 0.01 par value;
−Removed: no shares issued and outstanding at October 3, 2021 and September 27, 2020
+Added: no shares issued and outstanding at October 2, 2022 and October 3, 2021
Common stock – Authorized, 150,000 shares of $ 0.01 par value;
−Removed: issued and outstanding, 53,981 and 53,797 shares at October 3, 2021 and September 27, 2020, respectively
+Added: issued and outstanding, 52,981 and 53,981 shares at October 2, 2022 and October 3, 2021, respectively
Accumulated other comprehensive loss ( 208,144 ) ( 125,028 )
9 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27, 2020
4 unchanged sentences
Selling, general and administrative expenses ( 234,784 ) ( 222,972 ) ( 204,615 )
−Removed: Acquisition and integration expenses — — ( 10,351 )
Contingent consideration – fair value adjustments ( 329 ) 3,273 14,971
3 unchanged sentences
Interest expense ( 13,364 ) ( 12,748 ) ( 14,475 )
+Added: Other income 19,904 — —
Income before income tax expense 348,766 266,870 227,991
14 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27, 2020
12 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27, 2020
7 unchanged sentences
Deferred income taxes 2,175 ( 38,494 ) 565
−Removed: Provision for losses on accounts receivables ( 4,130 ) 1,267 16,964
Impairment of goodwill — — 15,800
Fair value adjustments to contingent consideration 329 ( 3,273 ) ( 14,971 )
−Removed: Gain on sale of property and equipment ( 110 ) ( 11,066 ) ( 232 )
+Added: Loss (gain) on sale of assets 103 ( 110 ) ( 11,066 )
+Added: Fair value adjustment to foreign currency forward contract ( 19,904 ) — —
Changes in operating assets and liabilities, net of effects of business acquisitions:
10 unchanged sentences
Capital expenditures ( 10,582 ) ( 8,573 ) ( 12,245 )
−Removed: Proceeds from sale of property and equipment 492 17,710 651
+Added: Proceeds from sales of assets 3,966 492 17,710
Net cash used in investing activities ( 55,740 ) ( 92,992 ) ( 63,023 )
6 unchanged sentences
Stock options exercised 1,806 11,250 10,334
−Removed: Net change in overdrafts ( 36,627 ) 36,627 —
+Added: Bank overdrafts — ( 36,627 ) 36,627
Dividends paid ( 46,099 ) ( 40,041 ) ( 34,743 )
2 unchanged sentences
Effect of exchange rate changes on cash and cash equivalents ( 12,314 ) 7,772 207
−Removed: Net increase (decrease) in cash and cash equivalents 9,053 36,614 ( 27,983 )
+Added: Net increase in cash and cash equivalents 18,526 9,053 36,614
Cash and cash equivalents at beginning of year 166,568 157,515 120,901
8 unchanged sentences
Consolidated Statements of Equity
−Removed: Fiscal Years Ended September 29, 2019, September 27, 2020, and October 3, 2021
+Added: Fiscal Years Ended September 27, 2020, October 3, 2021, and October 2, 2022
(in thousands)
11 unchanged sentences
Foreign currency translation adjustments 3,436 3,436 ( 1 ) 3,435
−Removed: Gain on cash flow hedge valuations ( 12,125 ) ( 12,125 ) ( 12,125 )
+Added: Loss on cash flow hedge valuations ( 4,638 ) ( 4,638 ) ( 4,638 )
Comprehensive income, net of tax 172,657 30 172,687
7 unchanged sentences
Stock repurchases ( 1,509 ) ( 15 ) ( 105,432 ) $ ( 11,741 ) ( 117,188 ) ( 117,188 )
−Removed: Cumulative effect of accounting changes ( 2,767 ) ( 2,767 ) ( 2,767 )
BALANCE AT SEPTEMBER 27, 2020 53,797 538 — ( 161,786 ) 1,198,567 1,037,319 54 1,037,373
2 unchanged sentences
Foreign currency translation adjustments 30,641 30,641 3 30,644
−Removed: Loss on cash flow hedge valuations ( 4,638 ) ( 4,638 ) ( 4,638 )
+Added: Gain on cash flow hedge valuations 6,117 6,117 6,117
Comprehensive income, net of tax 269,568 24 269,592
7 unchanged sentences
Stock repurchases ( 479 ) ( 5 ) ( 27,385 ) ( 32,610 ) ( 60,000 ) ( 60,000 )
−Removed: BALANCE AT SEPTEMBER 27, 2020 53,797 538 — ( 161,786 ) 1,198,567 1,037,319 54 1,037,373
+Added: BALANCE AT OCTOBER 3, 2021 53,981 540 — ( 125,028 ) 1,358,726 1,234,238 53 1,234,291
Comprehensive income, net of tax:
+Added: Net income 263,125 263,125 39 263,164
Common Stock Additional
6 unchanged sentences
Shares Amount
−Removed: Net income 232,810 232,810 21 232,831
Foreign currency translation adjustments ( 94,922 ) ( 94,922 ) ( 11 ) ( 94,933 )
14 unchanged sentences
Description of Business
−Removed: We are a leading global provider of consulting and engineering services that focuses on water, environment, sustainable infrastructure, renewable energy, and international development.
+Added: We are a leading global provider of high-end consulting and engineering services that focuses on water, environment, sustainable infrastructure, renewable energy and international development.
We are a global company that is Leading with Science® to provide innovative solutions for our public and private clients.
We typically begin at the earliest stage of a project by identifying technical solutions and developing execution plans tailored to our clients’ needs and resources.
−Removed: Our solutions may span the entire life cycle of consulting and engineering projects and include applied science, data analysis, research, engineering, design, project management, and operations and maintenance.
+Added: Our solutions may span the entire life cycle of high-end consulting and engineering projects and include applied science, data analysis, research, engineering, design, project management and operations and maintenance.
We manage our business under two reportable segments.
3 unchanged sentences
commercial clients and international clients other than development agencies.
−Removed: We continue to report the historical results of the wind-down of our non-core construction activities in the Remediation and Construction Management (“RCM”) reportable segment.
+Added: Beginning in fiscal 2022, we aligned our operations to better serve our clients and markets, and created a new High Performance Buildings ("HPB") division in our CIG reportable segment.
+Added: As a result, we transferred some related operations in our GSG reportable segment to our CIG reportable segment.
+Added: Prior year amounts for reportable segments have been reclassified to conform to the current year presentation.
Basis of Presentation and Preparation
2 unchanged sentences
All significant intercompany balances and transactions have been eliminated in consolidation.
−Removed: We report results of operations based on 52/53-week periods ending on the Sunday nearest September 30.
−Removed: Fiscal 2021 contained 53 weeks, and fiscal 2020 and 2019 each contained 52 weeks.
+Added: We report results of operations based on 52 or 53-week periods ending on the Sunday nearest September 30.
+Added: Fiscal years 2022, 2021 and 2020 contained 52, 53 and 52 weeks, respectively.
Use of Estimates.
5 unchanged sentences
Cash and cash equivalents include highly liquid investments with original maturities of 90 days or less.
−Removed: We classify cash and cash equivalents as restricted when we are unable to freely use such cash and cash equivalents for our general operating purposes.
−Removed: Restricted cash balances are reported within our "Prepaid expenses and other current assets" on the consolidated balance sheets.
−Removed: Occasionally, we have book overdrafts which represent checks issued in excess of funds on deposit in our bank accounts that have not yet been paid by the applicable bank at the balance sheet date.
−Removed: Bank overdrafts occur when a bank honors disbursements in excess of funds on deposit in our bank accounts.
−Removed: We classify book and bank overdrafts as short-term borrowings on our consolidated balance sheets, and report the change in overdrafts as a financing activity in our consolidated statements of cash flows.
+Added: Occasionally, we have bank overdrafts, which occur when a bank honors disbursements in excess of funds on deposit in our bank accounts.
+Added: We classify bank overdrafts as short-term borrowings on our consolidated balance sheets, and report the change in overdrafts as a financing activity in our consolidated statements of cash flows.
Insurance Matters, Litigation and Contingencies.
13 unchanged sentences
type of client, such as a government agency or a commercial sector client;
−Removed: and general economic and industry conditions, including the potential impacts of the coronavirus disease 2019 ("COVID-19") pandemic, that may affect our clients' ability to pay.
+Added: and general economic and industry conditions that may affect our clients' ability to pay.
Contract Assets and Contract Liabilities.
1 unchanged sentence
Contract retentions, included in contract assets, represent amounts withheld by clients until certain conditions are met or the project is completed, which may extend beyond one year.
−Removed: liabilities represent the amount of cash collected from clients and billings to clients on contracts in advance of work performed and revenue recognized.
+Added: Contract liabilities represent the amount of cash collected from clients and billings to clients on contracts in advance of work performed and revenue recognized.
The majority of these amounts are expected be earned within 12 months and are classified as current liabilities.
40 unchanged sentences
We believe the methodology that we use to review impairment of goodwill, which includes a significant amount of judgment and estimates, provides us with a reasonable basis to determine whether impairment has occurred.
−Removed: However, many of the factors employed in determining whether our goodwill is
−Removed: impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods.
+Added: However, many of the factors employed in determining whether our goodwill is impaired are outside of our control and it is reasonably likely that assumptions and estimates will change in future periods.
These changes could result in future impairments.
We perform our annual goodwill impairment review at the beginning of our fiscal fourth quarter.
−Removed: Our last annual review was performed at June 28, 2021 (i.e., the first day of our fiscal fourth quarter).
+Added: Our last annual review was performed at July 4, 2022 (i.e., the first day of our fiscal fourth quarter).
In addition, we regularly evaluate whether events and circumstances have occurred that may indicate a potential change in recoverability of goodwill.
47 unchanged sentences
We account for our derivative instruments as either assets or liabilities and carry them at fair value.
−Removed: For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income (loss) in stockholders' equity and reclassified into income in the same period or periods during which the hedged transaction affects earnings.
+Added: For derivative instruments that hedge the exposure to variability in expected future cash flows that are designated as cash flow hedges, the effective portion of the gain or loss on the derivative instrument is reported as a component of accumulated other comprehensive income in stockholders' equity and reclassified into income in the same period or periods during which the hedged transaction affects earnings.
The ineffective portion of the gain or loss on the derivative instrument, if any, is recognized in current income.
8 unchanged sentences
Pension Plan .
−Removed: In connection with a fiscal 2021 acquisition, we assumed a defined benefit pension plan.
+Added: We assumed a defined benefit pension plan from a fiscal 2021 acquisition.
We calculate the market-related value of assets, which is used to determine the return-on-assets component of annual pension expense and the cumulative net unrecognized gain or loss subject to amortization.
10 unchanged sentences
According to the authoritative guidance on accounting for uncertainty in income taxes, we may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position.
−Removed: The tax benefits recognized in the financial statements from such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
+Added: The tax benefits recognized in the financial statements from
+Added: such a position should be measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement.
This guidance also addresses de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and disclosure requirements for uncertain tax positions.
1 unchanged sentence
Financial instruments that subject us to credit risk consist primarily of cash and cash equivalents and net accounts receivable.
−Removed: In th e event that we have surplus cash, we place our temporary cash investments with lower ris k financial institutions and, by policy, limit the amount of investment exposure to any one financial institution.
+Added: In th e event that we have surplus cash, we place our temporary cash investments with lower ri sk financial institutions and, by policy, limit the amount of investment exposure to any one financial institution.
Approximately 23 % of accounts receivable were due from various agencies of the U.S.
13 unchanged sentences
dollars is based on the average rate during the period.
−Removed: Translation gains or losses are reported as a component of other comprehensive income (loss).
+Added: Translation gains or losses are reported as a component of other comprehensive income.
Gains or losses from foreign currency transactions are included in income from operations.
Reclassifications.
−Removed: Certain reclassifications were made to the prior years to conform to the current-year presentation.
+Added: Certain reclassifications were made to the prior fiscal years to conform to the current-year presentation.
Recently Issued Accounting Pronouncements Adopted in Fiscal 2022.
−Removed: In June 2016, the FASB issued updated guidance, Accounting Standards Update ("ASU") 2016-13, related to the measurement of credit losses for certain financial assets.
−Removed: This guidance replaced the previous incurred loss methodology with an expected credit loss methodology.
−Removed: It requires us to recognize an allowance equal to our current estimate of all contractual cash flows that we do not expect to collect.
−Removed: We adopted this guidance in the first quarter of fiscal 2021, and the adoption did not have a material impact on our consolidated financial statements.
−Removed: Our estimate considered relevant information about past events, current conditions, and reasonable and supportable forecasts impacting the collectability of the reported amounts.
−Removed: In August 2018, the FASB issued updated guidance modifying certain fair value measurement disclosures.
−Removed: The 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.
−Removed: We adopted this guidance in the first quarter of fiscal 2021, and the adoption did not have a material impact on our consolidated financial statements.
−Removed: Recently Issued Accounting Pronouncements Not Yet Adopted.
−Removed: In December 2019, the FASB issued ASU 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to general principles in Topic 740 and amending certain existing guidance for clarity.
−Removed: 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).
−Removed: Early adoption is permitted.
−Removed: We do not expect the adoption of this guidance to have an impact on our consolidated financial statements.
+Added: In December 2019, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2019-12, which simplifies the accounting for income taxes by removing certain exceptions to general prin ciple s in Topic 740 and amending certain existing guidance for clarity .
+Added: We adopted this guidance in the first quarter of fiscal 2022, and the adoption did not have an impact on our consolidated financial statements.
In May 2020, the Securities and Exchange Commission issued guidance amending certain financial disclosures about acquired and disposed businesses.
The amendments are designed to assist registrants in making more meaningful determinations of whether a subsidiary or an acquired or disposed business is significant, and to improve the related disclosure requirements.
−Removed: The guidance is effective for fiscal years beginning after December 31, 2020 (first quarter of fiscal 2022 for us).
−Removed: We do not expect the adoption of this guidance to have an impact on our consolidated financial statements.
−Removed: In October 2021, the FASB issued ASU 2021-08, which requires the recognition and measurement of contract assets and contract liabilities acquired in a business combination in accordance with ASC 606, Revenue from Contracts with Customers.
+Added: We adopted this guidance in the first quarter of fiscal 2022, and the adoption did not have an impact on our consolidated financial statements.
+Added: In October 2021, the FASB issued ASU 2021-08, which requires the recognition and measurement of contract assets and contract liabilities acquired in a business combination in accordance with Accounting Standards Codification Topic 606, "Revenue from Contracts with Customers" ("ASC 606").
Considerations to determine the amount of contract assets and contract liabilities to record at the acquisition date include the terms of the acquired contract, such as timing of payment, identification of each performance obligation in the contract and allocation of the contract transaction price to each identified performance obligation on a relative standalone selling price basis as of contract inception.
2 unchanged sentences
Early adoption of the proposed amendments would be permitted, including adoption in an interim period.
−Removed: We are currently assessing the impact this standard will have on our consolidated financial statements.
+Added: We adopted this guidance in the first quarter of fiscal 2022, and the adoption did not have an impact on our consolidated financial statements.
+Added: Recently Issued Accounting Pronouncements Not Yet Adopted.
+Added: In November 2021, the FASB issued ASU 2021-10, Government Assistance (Topic 832), which requires disclosures for transactions with a government authority that are accounted for by applying a grant or contribution model by analogy, including (1) the types of transactions, (2) the accounting for those transactions, and (3) the effect of those transactions on an entity's financial statements.
+Added: ASU 2021-10 is effective for us beginning in the first quarter of fiscal 2023, with early adoption permitted.
+Added: This guidance should be applied prospectively to all transactions that are reflected in the financial statements at the date of initial application and to new transactions that are entered into after that date, or retrospectively.
+Added: In fiscal 2020, the Canadian federal government implemented the Canadian Emergency Wage Subsidy ("CEWS") program in response to the negative impact of the coronavirus disease 2019 (" COVID-19") pandemic on businesses operating in Canada.
+Added: Our Canadian legal entities qualified for and applied for these CEWS cash benefits to partially offset the impacts of revenue reductions and on-going staffing costs.
+Added: The $ 26.0 million total received was initially recorded in "Other current liabilities" until all potential amendments to the qualification criteria, including some that were proposed with retroactive application, were finalized in fiscal 2022.
+Added: As there are no further contingencies, beginning in fiscal 2023, the amounts received will be distributed to all Canadian employees.
+Added: We expect to distribute approximately $ 9 million in the next twelve months.
+Added: Accordingly, this amount was reclassified from "Other current liabilities" to "Accrued compensation" on our consolidated balance sheet as of October 2, 2022.
+Added: The remaining $ 17.0 million, which we expect to distribute beyond one year, was reclassified to "Other long-term liabilities".
+Added: We do not expect there will be any related impact to our operating income, and we have no outstanding applications for further government assistance.
Revenue and Contract Balances
11 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27, 2020
1 unchanged sentence
Client Sector:
−Removed: state and local government $ 536,309 $ 439,019 $ 587,364
federal government (1)
$ 1,064,347 $ 1,081,608 $ 993,835
+Added: state and local government 603,286 536,309 439,019
commercial 748,953 638,169 674,605
11 unchanged sentences
Other than the U.S.
−Removed: federal governme nt, no single client accounted for more than 10% of our revenue for fiscal 2021 and 2020.
+Added: federal government, no single client accounted for more than 10% of our revenue for fiscal 2022 and 2021.
Contract Assets and Contract Liabilities
10 unchanged sentences
Net contract liabilities consisted of the following:
−Removed: 2021 September 27, 2020
+Added: 2022 October 3, 2021
(in thousands)
3 unchanged sentences
Net contract liabilities $ ( 148,935 ) $ ( 86,619 )
−Removed: (1) Include s $ 12.2 million and $ 12.3 million of contract retentions as of October 3, 2021 and September 27, 2020, respectively.
−Removed: In fiscal 2021, we recognized revenue of approximately $ 119 million from amounts included in the contract liability balance at the end of fiscal 2020, compared to approximately $ 118 million for the compara tive prior-year period.
−Removed: We recognize revenue primarily using the cost-to-cost measure of progress method, which involves the estimates of progress towards completion.
+Added: (1) Includ es $ 23.3 million and $ 12.2 million of contract retentions as of October 2, 2022 and October 3, 2021, respectively.
+Added: In fiscal 2022, we recognized revenue of approximately $ 125 million from amounts included in the contract liability balance at the end of fiscal 2021, compared to approximately $ 119 million in fiscal 2021 .
+Added: We recognize revenue primarily using the cost-to-cost measure of progress method to estimate 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.
−Removed: As a result, we recognized net favorable operating income adjustments of $ 0.7 million and $ 0.8 million for fiscal 2021 and 2020, respectively, exclusive of the amounts related to claims described below.
−Removed: Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded i mmediately in earnings.
−Removed: As of October 3, 2021 and September 27, 2020, our consolidated balance sheets included liabilities for anticipated losses o f $ 12.7 million and $ 13.2 million, respectively.
−Removed: The estimated cost to complete these related contracts as of October 3, 2021 and September 27, 2020 was approximate ly $ 104 million and $ 118 million, respectively.
+Added: T he corresponding net revenue and operating income adjustments were immaterial for fiscal 2022 and 2021.
+Added: Changes in revenue and cost estimates could also result in a projected loss, determined at the contract level, which would be recorded i mmediately in earn ings.
+Added: As of October 2, 2022 and October 3, 2021, our consolidated balance sheets included liabilities for anticipated losses of $ 10.0 million and $ 12.7 million, respectively.
+Added: The estimated cost to complete these related contracts as of October 2, 2022 and October 3, 2021 was approximately $ 80 million and $ 104 million, respectively.
Accounts Receivable, Net
Net accounts receivable consisted of the following:
−Removed: 2021 September 27,
+Added: 2022 October 3,
(in thousands)
6 unchanged sentences
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.
−Removed: of our unbilled receivables at October 3, 2021 are expected to be billed and collected within 12 months.
−Removed: The allowance for doubtful accounts represents amounts that are expected to become uncollectible or unrealizable in the future.
+Added: Substantially all of our unbilled receivables at October 2, 2022 are expected to be billed and collecte d within 12 months.
+Added: 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;
1 unchanged sentence
and general economic and industry conditions, including the potential impacts of the COVID-19 pandemic, that may affect our clients' ability to pay.
−Removed: Total accounts receivable at October 3, 2021 and September 27, 2020 included approximate ly $ 11 million a nd $ 14 million, respectively, related to claims, including requests for equitable adjustment, on contracts that provide for price redetermination.
Claims are amounts 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, change orders in dispute or unapproved as to both scope and price or other causes of unanticipated additional costs.
2 unchanged sentences
This can lead to a situation in which costs are recognized in one period and revenue is recognized in a subsequent period when a client agreement is obtained or a claims resolution occurs.
−Removed: 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.
−Removed: In fiscal 2021 (all in the second quarter), we recognized increases to revenue and related gains of $ 2.8 million in our Commercial/International Services Group ("CIG").
−Removed: In fi scal 2020, we recorded net losses in operating income related to claims of $ 4.4 million in our CIG segment.
−Removed: No single client accounted for more than 10% of our accounts receivable at October 3, 2021 and September 27, 2020.
+Added: Total accounts receivable at October 3, 2021 included approximately $ 11 million related to claims, including requests for equitable adjustment, on contracts that provide for price redetermination.
+Added: This amount related to a single claim in our RCM reportable segment.
+Added: In May 2022, we received a cash settlement for the claim, which resulted in an immaterial gain in the third quarter of fiscal 2022.
+Added: There were no claims included in our total accounts receiva ble at October 2, 2022.
+Added: We regularly evaluate all unsettled claim amounts and record appropriate adjustme nts to revenue when it is probable that the claim will result in a different contract value than the amount previously estimated.
+Added: In fiscal 2022, we recorded no gains or losses related to claims other than the aforementioned immaterial gain on the settled RCM claim.
+Added: In fiscal 2021 (all in the second quarter), we recognized increases to revenue and related gains of $ 2.8 million in our CIG reportable segment.
+Added: No single client accounted for more than 10% of our accounts receivable at October 2, 2022 and October 3, 2021 .
Remaining Unsatisfied Performance Obligations (“RUPOs”)
14 unchanged sentences
Stock Repurchase and Dividends
−Removed: On January 27, 2020, the Board of D irectors authorized a $ 200 million stock repurchase program, which was included in our remaining authorization balance of $ 207.8 million as of fiscal 2020 year-end.
+Added: On October 5, 2021, our Board of Directors authorized a new stock repurchase program under which we could repurchase up to $ 400 million of our common stock in addi tion to the $ 147.8 million under the previous stock repurchase program at October 3, 2021 .
In fiscal 2022, we repurchased and settled 1,341,679 shares with an average price of $ 149.07 per share for a total cost of $ 200.0 million in the open market.
−Removed: As of October 3, 2021, we had a remaining balance of $ 147.8 million available under repurchase program.
+Added: As of October 2, 2022, we had a remaining balance of $ 347.8 million under our repurchase program.
The following table presents dividends declared and paid in fiscal 2022 and 2021:
1 unchanged sentence
(in thousands)
−Removed: November 9, 2020 $ 0.17 November 30, 2020 December 11, 2020 $ 9,198
+Added: November 15, 2021 $ 0.20 December 2, 2021 December 20, 2021 $ 10,793
January 31, 2022 $ 0.20 February 11, 2022 February 25, 2022 10,769
−Removed: April 26, 2021 $ 0.20 May 12, 2021 May 28, 2021 10,831
−Removed: July 26, 2021 $ 0.20 August 20, 2021 September 3, 2021 10,800
+Added: May 2, 2022 $ 0.23 May 13, 2022 May 27, 2022 12,311
+Added: August 1, 2022 $ 0.23 August 12, 2022 August 26, 2022 12,226
Total dividends paid as of October 2, 2022 $ 46,099
−Removed: November 11, 2019 $ 0.15 December 2, 2019 December 13, 2019 $ 8,190
+Added: November 9, 2020 $ 0.17 November 30, 2020 December 11, 2020 $ 9,198
January 25, 2021 $ 0.17 February 10, 2021 February 26, 2021 9,212
1 unchanged sentence
July 26, 2021 $ 0.20 August 20, 2021 September 3, 2021 10,800
−Removed: Total dividends paid as of September 27, 2020 $ 34,743
+Added: Total dividends paid as of October 3, 2021 $ 40,041
Subsequent Events.
−Removed: On October 5, 2021, the Board of Directors authorized a new stock repurchase program under which we could repurchase up to $ 400 million of our common stock in addition to the $ 147.8 million remaining under the previous stock repurchase program at October 3, 2021.
−Removed: On November 15, 2021, the Board of Directors also declared a quarterly cash dividend of $ 0.20 per share payable on December 20, 2021 to stockholders of record as of the close of business on December 2, 2021.
−Removed: In fiscal 2021, we acquired Coanda Research and Development Corporation ("CRD"), The Kaizen Company (“KZN”), IBRA-RMAC Automation Solutions (“IRM”), and the partnership interests of Hoare Lea, LLP and Subsidiaries ("HLE").
+Added: On November 7, 2022, our Board of Directors declared a quarterly cash dividend of $ 0.23 per share payable on December 9, 2022 to stockholders of record as of the close of business on November 21, 2022.
+Added: On September 23, 2022, we made an all cash offer to acquire all the outstanding shares of RPS Group plc ("RPS"), a publicly traded company on the London Stock Exchange for 222 pence per share, which was unanimously recommended by RPS's Board of Directors.
+Added: RPS employs approximately 5,000 associates in the United Kingdom, Europe, Asia Pacific and North America, delivering high-end solutions especially in energy transformation, water and program management for government and commercial clients.
+Added: The transaction is to be affected using a court sanctioned scheme of arrangement between RPS and its shareholders and is subject to certain regulatory approvals and approval by RPS shareholders.
+Added: Subsequent Event.
+Added: On November 3, 2022, RPS's shareholders approved the scheme of arrangement, with the acquisition expected to be closed and effective in January 2023 after regulatory and court approval with an all cash purchase price for 100 % of the outstanding shares of approximately GBP 636 million.
+Added: In fiscal 2022, we acquired The Integration Group of America ("TIGA"), Piteau Associates (“PAE”) and two other immaterial acquisitions.
+Added: TIGA is based in Spring, Texas and is an industry leader in process automation and system integration solutions, including customized software and platform (SaaS/PaaS) applications, advanced data analytics, cloud data integration and platform virtualization.
+Added: PAE is based in Vancouver, British Columbia and is a global leader in sustainable natural resource analytics including hydrologic numerical modeling and dewatering system design.
+Added: PAE is part of our CIG segment, and TIGA and other immaterial acquisitions are part of our GSG segment.
+Added: The total fair value of the purchase price for all four acquisitions was $ 88.3 million.
+Added: This amount is comprised of $ 44.0 million in initial cash payments made to the sellers, $ 2.5 million of receivables (net) related to estimated post-closing adjustments for the net assets acquired, $ 15.5 million payable in a promissory note issued to the sellers along with related transaction expenses of the sellers (which were subsequently paid in July 2022) and $ 31.3 million for the estimated fair value of contingent earn-out obligations, with a maximum of $ 47.0 million, based upon the achievement of specified operating income targets in each of the three to five years following the acquisitions.
+Added: In fiscal 2021, we acquired Coanda Research and Development Corporation ("CRD"), The Kaizen Company (“KZN”), IBRA-RMAC Automation Solutions (“IRM”) and Hoare Lea, LLP and Subsidiaries ("HLE").
CRD is based in Burnaby, British Columbia and provides world-class expertise in computational fluid dynamics and utilizes industry-leading capabilities to solve complex engineering science problems for commercial customers, across a broad range of industries.
−Removed: KZN is based in Washington, DC and provides international development advisory and management consulting services offering a suite of innovative tools that support advanced solutions in health, education, governance, peace and stability, and sustainable economic growth.
+Added: KZN is based in Washington, D.C.
+Added: and provides international development advisory and management consulting services offering a suite of innovative tools that support advanced solutions in health, education, governance, peace and stability and sustainable economic growth.
IRM is based in San Diego, California and provides digital water transformation consulting services and an innovative suite of tools to address complex water system modernization challenges.
3 unchanged sentences
The total fair value of the purchase price for these acquisitions was $ 151.7 million.
−Removed: This amount is comprised of $ 101.4 million in initial cash payments made to the sellers, and $ 50.3 million for the estimated fair value of contingent earn-out obligations, with a maximum of $ 74.0 million, based upon the achievement of specified operating income targets in each of the three to four years following the acquisitions.
+Added: This amount was comprised of $ 101.4 million in initial cash payments made to the sellers and $ 50.3 million for the estimated fair value of contingent earn-out obligations, with a maximum of $ 74.0 million, based upon the achievement of specified operating income targets in each of the three to four years following the acquisitions.
In fiscal 2020, we acquired Segue Technologies, Inc.
4 unchanged sentences
This amount was comprised of $ 71.4 million in initial cash payments made to the seller s, $ 0.7 million of payabl es related to estimated post-closing adjustments for net assets acquired and $ 16.5 million for the estimated fair value of contingent earn-out obligations, with a maximum of $ 28.0 million, based upon the achievement of specified operating income targets in each of the three years following the acquisitions.
−Removed: In fiscal 2019, we acquired eGlobalTech ("EGT") and WYG plc (“WYG”).
−Removed: EGT is a high-end information technology solutions, cloud migration, cybersecurity, and management consulting firm based in Arlington, Virginia.
−Removed: WYG 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.
−Removed: Both of these acquisitions are part of our GSG segment.
−Removed: The total fair value of the purchase price for these two acquisitions was $ 103.3 million.
−Removed: 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), cash payments of $ 54.2 million to the sellers, $ 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 acquisitions.
−Removed: In addition, we assumed net debt of $ 11.5 million, which was subsequently paid in full in the fourth quarter of fiscal 2019 and incurred $ 10.4 million in acquisition and integration costs.
−Removed: 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.
+Added: Goodwill additions resulting from fiscal 2022 business combinations are primarily attributable to the significant technical expertise residing in embedded workforces that are sought out by clients, long-term management experience, the industry reputations and the synergies expected to arise after the acquisitions in the areas of data management, digitization, modeling, water and natural resources.
The fiscal 2021 goodwill additions represent the significant technical expertise residing in embedded workforces that are sought out by clients and the long-standing reputation of HLE.
−Removed: The goodwill additions related to our fiscal 2020 goodwill additions represent the value of a workforce with distinct expertise in the high-end information technology field, in the areas of data analytics, modeling and simulation, cloud, and agile software development.
−Removed: In addition, these acquired capabilities, when combined with our exis ting 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 compan ies.
−Removed: T he results of these acquisitions were included in our consolidated financial statements from their respective closing dates.
+Added: The fiscal 2020 goodwill additions represent the value of a workforce with distinct expertise in the high-end information technology field, in the areas of data analytics, modeling and simulation, cloud and agile software development.
+Added: In addition, these acquired capabilities, when combined with our exis ting 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.
+Added: The results of these acquisitions were included in our consolidated financial statements from their respective closing dates.
These acquisitions were not considered material, individually or in the aggregate, to our consolidated financial statements.
As a result, no pro forma information has been provided.
−Removed: 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 .
+Added: Backlog and client relations 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 intangible assets have lives ranging from three to five years .
Most of our acquisition agreements include contingent earn-out agreements, which are generally based on the achievement of future operating income thresholds.
8 unchanged sentences
We use a probability-weighted discounted income approach as a valuation technique to convert future estimated cash flows to a single present value amount.
−Removed: 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.
+Added: The significant unobservable inputs used in the fair value measurements are operating income projections over the earn-out period (generally three or five 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.
6 unchanged sentences
In each quarter during fiscal 2022, we evaluated our estimates for contingent consideration liabilities for the remaining earn-out periods for each individual acquisition, which included a review of their financial results to-date, the status of ongoing projects in their RUPOs and the inventory of prospective new contract awards.
−Removed: In addition, we considered the potential impact of the global economic disruption due to the COVID-19 pandemic on our operating income projections over the various earn-out periods.
+Added: In fiscal 2022, total adjustments to our contingent earn-out liabilities in operating income were immaterial.
In fiscal 2021, we recorded adjustments to our contingent earn-out liabilities and reported a net gain in operating income of $ 3.3 million, substantially all in the fourth quarter.
1 unchanged sentence
In fiscal 2020, we recorded adjustments to our contingent earn-out liabilities and reported related net gains in operating income of $ 15.0 million, substantially all in the fourth quarter.
−Removed: These gains primarily resulted from updated valuations of the contingent consideration liabilities for Norman, Disney and Young ("NDY"), EGT, and SEG.
+Added: These gains primarily resulted from updated valuations of the contingent consideration liabilities for Norman, Disney and Young ("NDY"), eGlobalTech ("EGT") and SEG.
The acquisition agreement for NDY included a contingent earn-out agreement based on the achievement of operating income thresholds (in Australian dollars) in each of the first three years beginning on the acquisition date, which was in the second quarter of fiscal 2018.
−Removed: The maximum earn-out obligation over the three-year earn-out period was A$ 25 million
−Removed: (A$ 7.4 million in year one, and A$ 8.8 million each in years two and three).
+Added: The maximum earn-out obligation over the three-year earn-out period was A$ 25 million (A$ 7.4 million in year one, and A$ 8.8 million each in years two and three).
These amounts could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year.
6 unchanged sentences
NDY's actual financial performance in the first two earn-out periods exceeded our original estimates at the acquisition date.
−Removed: As a result, we increased the related contingent consideration liability and recognized losses of $ 2.1 million (A$ 3.0 million) an d $ 5.4 million (A$ 7.9 million) in fis cal 2018 and 2019, respectively.
+Added: As a result, we increased the related contingent consideration liability and recognized losses of $ 2.1 million (A$ 3.0 million) and $ 5.4 million (A$ 7.9 million) in fiscal 2018 and 2019, respectively.
In the fourth quarter of fiscal 2020, we evaluated our estimate of NDY’s contingent consideration liability for the third and final earn-out period.
−Removed: This assessment included a review of NDY’s actual and forecasted results for the third earn-out period, which included an evaluation of the status of ongoing projects in NDY’s backlog, and the inventory of prospective new contract awards and the impact of the COVID-19 pandemic on the Australian economy and NDY's operations.
+Added: This assessment included a review of NDY’s actual and forecasted results for the third earn-out period, which included an evaluation of the status of ongoing projects in NDY’s backlog, the inventory of prospective new contract awards and the impact of the COVID-19 pandemic on the Australian economy and NDY's operations.
As a result of this assessment, we concluded that NDY’s operating income in the third earn-out period would be lower than previously estimated, and we reduced NDY’s contingent earn-out liability to $ 1.8 million (A$ 2.6 million), which resulted in a gain of $ 3.7 million (A$ 5.2 million).
18 unchanged sentences
SEG was to receive a portion of the contingent consideration if SEG achieved a minimum operating income threshold in each year of the earn-out period.
−Removed: The remaining contingent consideration could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year.
+Added: The remaining contingent consideration
+Added: could be earned primarily on a pro-rata basis for operating income within a predetermined range in each year.
SEG was required to meet a minimum operating income threshold in each year to earn any of this contingent consideration.
10 unchanged sentences
Accordingly, in the fourth quarter of fiscal 2020, we reduced the SEG contingent earn-out liability to $ 8.1 million, which resulted in a gain of $ 3.4 million.
−Removed: In fiscal 2019, we recorded adjustments to our contingent earn-out liabilities and reported a related net loss of $ 1.1 million in operating income.
−Removed: These adjustments resulted from the updated valuations of the contingent consideration liabilities, which reflect updated projections of acquired companies' financial performance during their respective earn-out periods.
At October 2, 2022, there was a total potential max imum of $ 120.9 million of outstanding contingent consideration related to acquisitions.
−Removed: Of this amount, $ 59.3 million was estimated as the fair value and a ccrued on our consolidated balance sheet.
−Removed: If the global economic disruption due to the COVID-19 pandemic is prolonged, we could have more significant reductions in our contingent earn-out liabilities and related gains in operating income in future periods.
+Added: Of this amount, $ 65.6 million was estimated as the fair value and accrued on our consolidated balance sheet.
The following table summarizes the changes in the carrying value of estimated contingent earn-out liabilities:
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
15 unchanged sentences
Acquisitions 15,112 75,479 90,591
−Removed: Impairment — ( 15,800 ) ( 15,800 )
Translation and other 7,006 17,483 24,489
−Removed: Balance at September 27, 2020 516,315 477,183 993,498
+Added: Balance at October 3, 2021 538,433 570,145 1,108,578
+Added: Goodwill reallocation ( 51,497 ) 51,497 —
Acquisitions 42,365 26,318 68,683
1 unchanged sentence
Balance at October 2, 2022 $ 519,102 $ 591,310 $ 1,110,412
−Removed: Our goodwill was impacted by the final valuations of our acquisitions, and the foreign currency translation related to the goodwill balances of our foreign subsid iaries with functional currencies that are different than our reporting currency.
+Added: Our goodwill balances reflect the goodwill reallocation related to the creation of our new HPB division on the first day of fiscal 2022, which included a transfer of some related operations in our GSG reportable segment to our CIG reportable segment.
+Added: The foreign currency translation adjustments resulted from our foreign subsidiaries with functional currencies that are different than our rep orting currency.
The goodwill additions relate to our fiscal 2022 acquisitions.
−Removed: The purchase price allocations for our fiscal 2021 acquisitions of CRD, IRM, KZN and HLE are preliminary and subject to adjustment based upon the final determinations of the net assets acquired and information to perform th e final valuations.
+Added: The purchase price allocations for our fiscal 2022 acquisitions are preliminary and subject to adjustment based upon the final determinations of the net assets acquired and information to perform th e final valuations.
We per form our annual goodwill impairment review at the beginning of our fiscal fourth quarter.
−Removed: Our last review at June 28, 2021 (i.e.
+Added: Our last review at July 4, 2022 (i.e.
the first day of our fourth quarter in fiscal 2022) 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.
−Removed: We had no reporting units that had estimated fair values that exceeded their carrying values by less than 150 %.
+Added: As of July 4, 2022, and after the reallocation of goodwill on the first day of fiscal 2022, we had no reporting units that had estimated fair values that exceeded their carrying values by less than 165 %.
We also regularly evaluate whether events and circumstances have occurred that may indicate a potential change in the recoverability of goodwill.
5 unchanged sentences
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.
−Removed: On September 2, 2020, Australia announced that it had fallen into economic recession, defined as two consecutive quarters of negative growth, for the first time since 1991 including 7 % negative growth in the quarter ending in June 2020.
−Removed: This prompted a strategic review of our Asia/Pacific ("ASP") reporting unit .
−Removed: As a result of the economic recession in Australia, our revenue growth and profit margin forecasts for the ASP reporting unit declined from the previous forecast used for our annual goodwill impairment review as of June 29, 2020.
−Removed: We also performed an interim goodwill impairment review of our ASP reporting unit in September 2020 and recorded a $ 15.8 million goodwill impairment charge.
−Removed: The impaired goodwill related to our acquisitions of Coffey International Limited and NDY.
−Removed: As a result of the impairment charge, the estimated fair value of our ASP reporting unit equaled its carrying value of $ 144.9 million, including $ 95.5 million of goodwill, at September 27, 2020.
−Removed: On September 28, 2020 (the first day of our fiscal 2021), we merged our former ASP reporting unit into our Client Account Management reporting unit.
−Removed: 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.
−Removed: 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.
The gross amounts of goodwill for GSG were $ 536.8 million and $ 556.1 million at fiscal 2022 and 2021 year-ends, respectively, excluding accumulated impairment of $ 17.7 million for each period.
2 unchanged sentences
Fiscal Year Ended
−Removed: October 3, 2021 September 27, 2020
+Added: October 2, 2022 October 3, 2021
(in years) Gross
9 unchanged sentences
Amortization expense for the identifiable intangible assets for fiscal 2022, 2021 and 2020 was $ 13.2 million, $ 11.5 million and $ 11.6 million, respectively.
−Removed: Foreign currency translation adjustments were immaterial for fiscal 2021 and 2020.
+Added: Foreign currency translation adjustments reduced net identifiable intangible assets by $ 5.3 million in fiscal 2022 and were immaterial for fiscal 2021.
Estimated amortization expense for the succeeding five fiscal years and beyond is as foll ows:
4 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
(in thousands)
7 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
6 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
7 unchanged sentences
Foreign 3,016 ( 27,703 ) ( 328 )
−Removed: Total deferred income tax (benefit) expense ( 35,797 ) 2,729 ( 37,615 )
+Added: Total deferred income tax expense (benefit) 2,210 ( 35,797 ) 2,729
Total income tax expense $ 85,602 $ 34,039 $ 54,101
2 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
12 unchanged sentences
Unremitted earnings ( 0.2 ) 1.0 —
−Removed: Revaluation of deferred taxes — — ( 1.4 )
Deferred tax adjustments 0.1 0.8 ( 1.3 )
−Removed: Transition taxes on foreign earnings — — 1.4
Other 1.0 0.9 1.6
1 unchanged sentence
The effective tax rates for fiscal 2022, 2021 and 2020 were 24.5 %, 12.8 % and 23.7 %, respectively.
−Removed: Our fiscal 2021 and 2019 effective tax rates reflect non-recurring net tax benefits of $ 21.6 million and $ 22.3 million, respectively, primarily consisting of valuation allowances in the United Kingdom and Australia that were released due to sufficient positive evidence being obtained in the respective years.
−Removed: The valuation allowances were primarily related to net operating loss and research and development credit carry-forwards and other temporary differences.
+Added: The fiscal 2021 effective tax rate reflects a non-recurring net tax benefit of $ 21.6 million, consisting of a valuation allowance in the United Kingdom that was released due to sufficient positive evidence being obtained in fiscal 2021.
+Added: The valuation allowance was primarily related to net operating loss carry-forwards.
We evaluated the positive evidence against any negative evidence and determined that it was more likely than not that the deferred tax assets would be realized.
−Removed: The primary factors used to assess the likelihood of realization were the past performance of the related entities and our forecast of future taxable
−Removed: The goodwill impairment charges in fiscal 2020 and 2019 and certain of the transaction charges in fiscal 2019 did not have related tax benefits.
−Removed: Also, income tax expense was reduced by $ 12.9 million, $ 8.3 million, $ 6.4 million of excess tax benefits on share-based payments in fiscal 2021, 2020, and 2019, respectively.
−Removed: Excluding the impact of the valuation allowance releases, non-deductible goodwill impairment charges and transaction costs, and the excess tax benefits on share-based payments our effective tax rates in fiscal 2021, 2020, and 2019 were 25.7 %, 25.6 %, and 24.6 % respectively.
−Removed: We are currently under examination by the Internal Revenue Service for fiscal year 2018, the Canada Revenue Agency for fiscal years 2011 through 2016, and the California Franchise Tax Board for fiscal years 2014 through 2016.
+Added: The primary factors used to assess the likelihood of realization were the past performance of the related entity and our forecast of future taxable income.
+Added: In fiscal 2021, we repatriated approximately $ 80 million from Canada and recognized a related tax expense of $ 5.6 million.
+Added: At that time, we also determined that our remaining undistributed earnings in Canada of approximately $ 20.1 million were no longer being indefinitely reinvested and recorded an additional deferred tax liability/expense of $ 3.1 million.
+Added: The goodwill impairment
+Added: charge in fiscal 2020 did not have related tax benefits.
+Added: Also, income tax expense was reduced by $ 10.3 million, $ 12.9 million and $ 8.3 million of excess tax benefits on share-based payments in fiscal 2022, 2021 and 2020, respectively.
+Added: Excluding the impact of the valuation allowance release, the non-deductible goodwill impairment charge, the Canadian repatriation and the excess tax benefits on share-based payments our effective tax rates in fiscal 2022, 2021 and 2020 were 27.5 %, 25.7 % and 25.6 % respectively.
+Added: In fiscal 2022, the Inflation Reduction Act and the CHIPS and Science Act were signed into law.
+Added: These Acts both contain new U.S.
+Added: income tax provisions;
+Added: however, we do not expect them to have a material impact on our consolidated financial statements.
+Added: We are currently under examination by the Internal Revenue Service for fiscal years 2018 and 2019, and the Canada Revenue Agency for fiscal years 2011 through 2016.
We are also subject to various other state audits.
1 unchanged sentence
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
(in thousands)
6 unchanged sentences
Stock-based compensation 2,925 3,560
+Added: Unbilled revenue 4,885 —
Loss carry-forwards 41,648 54,825
10 unchanged sentences
Net deferred tax assets $ 32,643 $ 43,850
−Removed: In the fourth quarter of fiscal 2021, we repatriated approximately $ 80 million from Canada and recognized a related tax expense of $ 5.6 million.
−Removed: At this time, we also determined that our remaining undistributed earnings in Canada of approximately $ 20.1 million are no longer being indefinitely reinvested and recorded an additional deferred tax liability/expense of $ 3.1 million.
−Removed: At October 3, 2021, undistributed earnings of our other foreign subsidiaries, primarily in Australia and the U.K.
−Removed: of approximately $ 50.9 million are expected to be indefinitely reinvested in t hese foreign countries.
+Added: Prospectively, from the date of the aforementioned repatriation, our earnings in Canada are not considered indefinitely reinvested and any potential tax liability that would be incurred upon repatriation is recognized currently with the related income.
+Added: At October 2, 2022, undistributed earnings of our other foreign subsidiaries, primarily in Australia and the United Kingdom of approximately $ 81.7 million are expected to be indefinitely reinvested in these foreign countries.
Accordingly, no provision for foreign withholding taxes has been made.
4 unchanged sentences
We have performed an assessment of positive and negative evidence regarding the realization of the deferred tax assets.
−Removed: This assessment included the evaluation of scheduled reversals of deferred tax liabilities, availability of carrybacks, cumulative losses in recent years, estimates of projected future taxable income, and tax planning strategies.
−Removed: Although realization is not
−Removed: assured, based on our assessment, we have concluded that it is more likely than not that the assets will be realized except for the deferred tax assets related to the loss carry-forwards for which a valuation allowance of $ 13.0 million has been provided.
+Added: assessment included the evaluation of scheduled reversals of deferred tax liabilities, availability of carrybacks, cumulative losses in recent years, estimates of projected future taxable income and tax planning strategies.
+Added: Although realization is not assured, based on our assessment, we have concluded that it is more likely than not that the assets will be realized except for the deferred tax assets related to the loss carry-forwards for which a valuation allowance of $ 12.3 million has been provided.
At October 2, 2022, we had $ 8.9 million of unrecognized tax benefits, all of which, if recognized, would affect our effective tax rate.
3 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
1 unchanged sentence
Beginning balance $ 12,899 $ 9,228 $ 9,169
−Removed: Additions for current year tax positions 2,171 700 1,342
−Removed: Additions for prior year tax positions 1,500 — 356
−Removed: Reductions for prior year tax positions — ( 641 ) ( 100 )
+Added: Additions for current fiscal year tax positions — 2,171 700
+Added: Additions for prior fiscal year tax positions — 1,500 —
+Added: Reductions for prior fiscal year tax positions ( 3,014 ) — ( 641 )
Settlements ( 977 ) — —
1 unchanged sentence
We recognize potential interest and penalties related to unrecognized tax benefits in income tax expense.
−Removed: During fiscal years 2021, 2020 and 2019, we accrued additional interest and penalties of $ 0.8 million, $ 0.8 million and $ 2.6 million, respectively, and recorded reductions in accrued interest and penalties of $ 0 , $ 0 and $ 0.2 million, respectively, as a result of audit settlements and other prior-year adjustments.
−Removed: The amount of interest and penalties accrued at October 3, 2021, September 27, 2020 and September 29, 2019 was $ 5.2 million, $ 4.4 million and $ 3.6 million, respectively.
+Added: During fiscal years 2022 , 2021 and 2020 , we accrued additional interest and penalties of $ 0.5 million, $ 0.8 million and $ 0.8 million, respectively, and recorded reductions in accrued interest and penalties of $ 0.4 million, $ 0 and $ 0 , respectively, as a result of audit settlements and other prior-year adjustments.
+Added: The amount of interest and penalties accrued at October 2, 2022, October 3, 2021 and September 27, 2020 was $ 5.3 million, $ 5.2 million and $ 4.4 million, respectively.
Long-Term Debt
1 unchanged sentence
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
(in thousands)
2 unchanged sentences
Long-term debt $ 246,250 $ 200,000
−Removed: On July 30, 2018, we entered into a Second Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $ 1 billion that will mature in July 2023.
−Removed: The Amended Credit Agreement is a $ 700 million senior secured, five-year facility that provides for a $ 250 million term loan facility (the “Amended Term Loan Facility”), a $ 450 million revolving credit facility (the “Amended Revolving Credit Facility”), and a $ 300 million accordion feature that allows us to increase the Amended Credit Agreement to $ 1 billion subject to lender approval.
−Removed: The Amended Credit Agreement allows us to, among other things, (i) refinance indebtedness under our Credit Agreement dated as of May 7, 2013;
−Removed: (ii) finance certain permitted open market repurchases of our common stock, permitted acquisitions, and cash dividends and distributions;
+Added: On February 18, 2022, we entered into Amendment No.
+Added: 2 to our Second Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $ 1.05 billion that will mature in February 2027.
+Added: The Amended Credit Agreement is a $ 750 million senior secured, five -year facility that provides for a $ 250 million term loan facility (the “Amended Term Loan Facility”) and a $ 500 million revolving credit facility (the “Amended Revolving Credit Facility”).
+Added: In addition, the Amended Credit Agreement includes a $ 300 million accordion feature that allows us to increase the Amended Credit Agreement to $ 1.05 billion subject to lender approval.
+Added: The Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Credit Agreement dated as of July 30, 2018;
+Added: (ii) finance open market repurchases of common stock, acquisitions and cash dividends and distributions;
and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes.
+Added: The Amended Credit Agreement provides for a reduction in the interest grid for meeting certain sustainability targets related to the (i) reduction of greenhouse gas emissions through the Company’s projects and operational sustainability initiatives and (ii) improvement of peoples’ lives as a result of the Company’s projects that provide environmental, social and governance benefits.
The Amended Revolving Credit Facility includes a $ 100 million sublimit for the issuance of standby letters of credit, a $ 20 million sublimit for swingline loans and a $ 300 million sublimit for multicurrency borrowings and letters of credit.
−Removed: The entire Amended Term Loan Facility was drawn on July 30, 2018.
−Removed: The Amended Term Loan Facility is subject to quarterly amortization of principal at 5 % annually beginning December 31, 2018.
−Removed: We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a Eurocurrency rate plus a margin that ranges from 1.00 % to 1.75 % per annum, or (b) a base rate for loans in U.S.
+Added: The entire Amended Term Loan Facility was drawn on February 18, 2022.
+Added: The Amended Term Loan Facility is subject to quarterly amortization of principal at 5 % annually commencing June 30, 2022.
+Added: We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000 % to 1.875 % per
+Added: annum, or (b) a base rate for loans in U.S.
dollars (the highest of the U.S.
−Removed: federal funds rate plus 0.50 % per annum, the bank’s prime rate or the Eurocurrency rate plus 1.00 %) plus a margin that ranges from 0 % to 0.75 % per annum.
+Added: federal funds rate plus 0.50 % per annum, the bank’s prime rate or the Secured Overnight Financing Rate ("SOFR") rate plus 1.00 %, plus a margin that ranges from 0 % to 0.875 % per annum.
In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly.
The Amended Term Loan Facility is subject to the same interest rate provisions.
−Removed: The Amended Credit Agreement expires on July 30, 2023, or earlier at our discretion upon payment in full of loans and other obligations.
−Removed: At October 3, 2021, we had $ 212.5 million in outstanding borrowings under the Amended Credit Agreement, which was comprised of $ 212.5 million under the Amended Term Loan Facility and no borrowings outstanding under the Amended Revolving Credit Facility.
−Removed: The weighted-average interest rate of the outstanding borrowings during fiscal 2021 was 1.25 %.
+Added: The Amended Credit Agreement expires on February 18, 2027, or earlier at our discretion upon payment in full of loans and other obligations.
+Added: At October 2, 2022, we had $ 258.8 million in outstanding borrowings under the Amended Credit Agreement, which was comprised of $ 243.8 million under the Amended Term Loan Facility and $ 15.0 million under the Amended Revolving Credit Facility.
+Added: The year-to-date weighted-average interest rate of the outstanding borrowings during fiscal 2022 was 1.97 %.
In addition, we had $ 0.7 million in standby letters of credit under the Amended Credit Agreement.
−Removed: Our weighted-average interest rate on borrowings outstanding during fiscal 2021 under the Amended Credit Agreement, including the effects of interest rate swap agreements described in Note 14, “Derivative Financial Instruments” of the "Notes to Consolidated Financial Statements" included in Item 8, was 3.30 %.
+Added: Our year-to-date weighted-average interest rate on borrowings outstanding during fiscal 2021 under the Amended Credit Agreement, including the effects of interest rate swap agreements described in Note 14, “Derivative Financial Instruments” of the "Notes to Consolidated Financial Statements" included in Item 8, was 3.60 %.
At October 2, 2022, we had $ 484.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants.
3 unchanged sentences
At October 2, 2022, we were in compliance with these covenants with a consolidated leverage ratio of 0.76 x and a consolidated interest coverage ratio of 29.52 x.
−Removed: In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for bank overdrafts, short-term cash advances and bank guarantees.
−Removed: At October 3, 2021, th ere were no amounts outstanding under these facilities and the aggregate amount of standby letters of credit outstanding was $ 53.4 million.
+Added: In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for short-term cash advances and bank guarantees.
+Added: At October 2, 2022, there were no outstanding borrowings under these facilities and the aggregate amount of standby letters of credit outstanding was $ 44.4 million.
As of October 2, 2022 we had no bank overdrafts related to our disbursement bank accounts.
2 unchanged sentences
Total $ 258,754
−Removed: We adopted Leases (Topic 842), effective September 30, 2019 (the first day of our fiscal 2020) using the modified retrospective transition approach.
−Removed: Results for reporting periods beginning after the adoption date are presented under Topic 842, while prior period amounts are not adjusted and continue to be presented in accordance with our historical accounting under ASC 840.
+Added: Subsequent Event:
+Added: On October 26, 2022, we entered into a Third Amended and Restated Credit Agreement that provides for an additional $ 500 million senior secured term loan facility (the "New Term Loan Facility") increasing our total borrowing capacity to $ 1.55 billion.
+Added: We expect to draw the entire amount of the New Term Loan Facility to partially finance the acquisition of RPS.
+Added: The remaining purchase price is expected to be financed with existing cash on hand and borrowings under the Amended Revolving Credit Facility.
+Added: The New Term Loan Facility is not subject to any amortization payments of principal and matures on the third anniversary of the RPS acquisition closing date.
Our operating leases are primarily for corporate and project office spaces.
To a much lesser extent, we have operating leases for vehicles and equipment.
−Removed: Our operating leases have remaining lease terms of one month to twelve years , some of which may include options to extend the leases for up to five years .
+Added: Our operating leases have remaining lease terms of one month to ten years , some of which may include options to extend the leases for up to five years .
We determine if an arrangement is a lease at inception.
1 unchanged sentence
Our finance leases are primarily for certain IT equipment.
−Removed: The related ROU assets and lease liabilities were immaterial, and are included in "Property and equipment, net", "Other current liabilities" and "Other long-term liabilities", accordingly, in the consolidated balance sheets.
−Removed: 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.
−Removed: Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.
+Added: The related ROU assets and lease liabilities were immaterial.
+Added: ROU assets represent our right to use an underlying asset for the lease te rm and lease liabilities represent our obligation to make lease payments arising from the lease.
+Added: Operating lease ROU assets and liabilities are recognized at
+Added: 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 .
4 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
(in thousands)
4 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
(in thousands)
3 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
(in thousands)
17 unchanged sentences
Total present value of lease liabilities $ 204,150
−Removed: Rental expense for operating leases classified under ASC 840 for fiscal 2019 was $ 79.3 million, and was predominantly recorded within selling, general and administrative expenses.
Stockholders' Equity and Stock Compensation Plans
2 unchanged sentences
Key employees and non-employee directors may be granted equity awards, including stock options, restricted stock and restricted stock units ("RSUs").
−Removed: Options granted before March 6, 2006 vested at 25 % on the first anniversary of the grant date, and the balance vests monthly thereafter, such that these options become fully vested no later than four years from the date of grant.
−Removed: These options expire no later than ten years from the date of grant.
−Removed: Options granted on and after March 6, 2006 vest at 25 % on each anniversary of the grant date.
−Removed: These options expire no later than eight years from the grant date.
+Added: Options vest at 25 % on each anniversary of the grant date and expire no later than eight years from the grant date.
RSUs granted to date vest at 25 % on each anniversary of the grant date.
5 unchanged sentences
Key employees and non-employee directors may be granted equity awards, including stock options, PSUs and RSUs.
−Removed: Shares issued with respect to awards granted under the 2018 EIP other than stock options or stock appreciation rights, which are referred to as "full value awards", are counted against the 2018 EIP's aggregate share limit as one share for every share or unit issued.
+Added: Shares issued with respect to awards granted under the 2018 EIP other than stock options or stock appreciation rights, which are referred to as "full value awards", are counted against th e 2018 EIP's aggregate share limit as one share for every share or unit issued.
At October 2, 2022, there were 2.2 million shares available for future awards pursuant to the 2018 EIP.
2 unchanged sentences
An aggregate of 380,784 shares may be issued pursuant to such exercise.
−Removed: The maximum amount that an employee can contribute during a purchase right period is $ 5,000 .
+Added: The maximum amount that an employee can contribute during a purchas e right period is $ 5,000 .
The exercise price of a purchase right is the lesser of 100 % of the fair market value of a share of common stock on the first day of the purchase right period (the business day preceding January 1) or 85 % of the fair market value on the last day of the purchase right period (December 15, or the business day preceding December 15 if December 15 is not a business day).
1 unchanged sentence
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
13 unchanged sentences
(in thousands)
−Removed: Outstanding on September 27, 2020 539 $ 36.34
+Added: Outstanding on October 3, 2021 214 $ 38.80
Exercised ( 46 ) 39.44
5 unchanged sentences
This amount will change based on the fair market value of our stock.
−Removed: At October 3, 2021, we expect to recognize $ 0.1 million of unrecognized compensation cost related to stock option grants over a weighted-average period of one year .
−Removed: No stock options were granted in fiscal 2021 and 2020.
+Added: No stock options we re granted in fiscal 2022, 2021 and 2020.
The aggregate intrinsic value of options exercised during fiscal 2022, 2021 and 2020 was $ 5.7 million, $ 29.4 million and $ 22.4 million, respectively.
1 unchanged sentence
Our policy is to issue shares from our authorized shares upon the exercise of stock options.
−Removed: The actual income tax benefit realized from exercises of nonqualified stock options and disqualifying dispositions of qualified options for fiscal 2021, 2020 and 2019 was $ 12.9 million, $ 8.3 million and $ 6.4 million, respectively.
+Added: The actual income tax benefit realized from exercises of nonqualified stock options for fiscal 2022, 2021 and 2020 was $ 1.3 million, $ 6.7 million and $ 4.9 million, respectively.
RSU awards are granted to our key employee and non-employee directors.
5 unchanged sentences
The number of PSUs that ultimately vest is based 50 % on growth in our EPS and 50 % on our relative total shareholder return over the vesting period.
−Removed: For these performance-
−Removed: based awards, our expected performance is reviewed to estimate the percentage of shares that will vest.
+Added: For these performance-based awards, our expected performance is reviewed to estimate the percentage of shares that will vest.
The total compensation cost of the awards is then amortized over their applicable vesting period on a straight-line basis.
13 unchanged sentences
Forfeited ( 14 ) 77.74 ( 1 ) 74.05
−Removed: Nonvested balance at September 27, 2020 444 63.93 355 64.83
+Added: Nonvested balance at October 3, 2021 381 83.30 318 82.96
Granted 78 184.61 42 247.16
3 unchanged sentences
Nonvested balance at October 2, 2022 299 $ 111.40 272 $ 109.23
−Removed: (1) For fiscal 2019, includes a payout adjustment of 79,465 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2016 that vested during fiscal 2019.
−Removed: For fiscal 2020 includes a payout adjustment of 63,643 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2017 that vested during fiscal 2020.
−Removed: For fiscal 2021 includes a payout adjustment of 99,214 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2018 that vested during fiscal 2021.
−Removed: During fiscal 2021, 2020 and 2019, we awarded 117,934 , 167,525 and 179,478 shares of RSUs, respectively, to our key employees and non-employee directors.
+Added: (1) Fiscal 2020 includes a payout adjustment of 63,643 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2017 that vested during fiscal 2020.
+Added: Fiscal 2021 includes a payout adjustment of 99,214 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2018 that vested during fiscal 2021.
+Added: Fiscal 2022 includes a payout adjustment of 88,198 PSUs due to the actual performance level achieved for PSUs granted in fiscal 2019 that vested during fiscal 2022.
+Added: During fiscal 2022, 2021 and 2020, we awar ded 77,844 , 117,934 and 167,525 shares of RSUs, respectively, to our key employees and non-employee directors.
The weighted-average grant-date fair value of RSUs granted during fiscal 2022, 2021 and 2020 was $ 184.61 , $ 122.02 and $ 83.92 , respectively.
6 unchanged sentences
The stock-based compensation expense related to RSUs and PSUs for fiscal 2022, 2021 and 2020 was $ 23.9 million, $ 20.9 million and $ 17.7 million, respectively, and was included in total stock-based compensation expense.
−Removed: At October 3, 2021, there was $ 31.6 million of unrecognized stock-based compensation costs related to nonvested RSUs and PSUs that will be substantially recognized by the end of fiscal 2023.
+Added: The actual income tax benefit realized from RSUs and PSUs for fiscal 2022, 2021 and 2020 was $ 9.1 million, $ 6.2 million and $ 3.4 million, respectively.
+Added: At October 2, 2022, there was $ 35.9 million of unrecognized stock-based compensation costs r elated to nonvested RSUs and PSUs that will be substantially recognized by the end of fiscal 2025.
The following table summarizes shares purchased, weighted-average purchase price, and cash received for shares purchased under the ESPP:
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
5 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
11 unchanged sentences
We have defined contribution plans in various countries where we have employees.
−Removed: This primarily includes 401(k) plans in the United States.
+Added: This p rimarily includes 401(k) plans in the United States.
For fiscal 2022, 2021 and 2020, employer contributions to the U.S.
4 unchanged sentences
Employee deferrals are deposited into a rabbi trust, and the funds are generally invested in individual variable life insurance contracts that we own and are specifically designed to informally fund savings plans of this nature.
−Removed: At October 3, 2021 and September 27, 2020, the consolidated balance sheets reflect assets of $ 41.4 million and $ 35.1 million, respectively, related to the deferred compensation plan in "Other long-term assets," and liabilities of $ 41.1 million and $ 35.0 million, respectively, related to the deferred compensation plan in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our consolidated statements of income .
+Added: At October 2, 2022 and October 3, 2021, the consolidated balance sheets reflect assets of $ 36.7 million and $ 41.4 million, respectively, related to the deferred compensation plan in "Other long-term assets," and liabilities of $ 36.3 million and $ 41.1 million, respectively, related to the deferred compensation plan in "Other long-term liabilities." The net gains and losses related to the deferred compensation plan are reported as part of “Selling, general and administrative expenses” in our c onsolidated statements of income .
These related net gains and losses were immaterial for fiscal 2022 , 2021 and 2020 .
4 unchanged sentences
Under the agreed schedule of contributions, HLE will make no further contributions, and is to pay the expenses of administering the plan.
−Removed: The change in the defined benefit obligation, the change in fair value of plan assets, and the amounts recognized in the Consolidated Statement of Income, the Consolidated Statement of Comprehensive Income and the Consolidated Statements of Shareholders’ Equity for the period from July 26, 2021 (acquisition date of HLE) to October 3, 2021 were immaterial.
−Removed: The Plan's funded status at October 3, 2021 was as follows:
+Added: The change in the defined benefit obligation, the change in fair value of plan assets and the amounts recognized in the Consolidated Statement of Income, the Consolidated Statement of Comprehensive Income and the Consolidated Statements of Shareholders’ Equity for fiscal 2022 and fiscal 2021 were immaterial.
+Added: The Plan's funded status was as follows:
+Added: Fiscal Year Ended
+Added: 2022 October 3,
+Added: (in thousands)
Fair value of plan assets $ 36,250 $ 65,836
1 unchanged sentence
Net surplus $ 3,244 $ 1,006
−Removed: The net surplus is reflected in other long-term assets on our consolidated balance sheet at October 3, 2021.
+Added: The net surplus is reflected in other long-term assets on our consolidated balance sheets at October 2, 2022 and October 3, 2021.
+Added: As the plan is closed to new participants and to future benefit accrual, the reduction in the fair value of plan assets and the benefit obligation were primarily due to actual losses on plan assets and an increased discount rate, respectively.
+Added: Benefits paid during fiscal 2022 were $ 1.0 million.
The fair values of the plan assets are substantially categorized within Level 2 of the fair value hierarchy.
−Removed: As of October 3, 2021, the fair values of the plan assets by major asset categories were as follows (in 000’s):
+Added: The fair values of the plan assets by major asset categories were as follows:
+Added: Fiscal Year Ended
+Added: 2022 October 3,
+Added: (in thousands)
Equities $ 8,390 $ 13,646
6 unchanged sentences
The target asset allocation selected for each plan reflects a risk/return profile that we believe is appropriate relative to each plan’s liability structure and return goals.
−Removed: Principal assumptions used for the benefit obligation in the valuation at October 3, 2021 are as follows:
+Added: Principal assumptions used for the benefit obligation in the valuation are as follows:
+Added: Fiscal Year Ended
+Added: 2022 October 3,
Discount rate 4.75 % 2.00 %
Rate of inflation 2.95 % to 3.55 %
+Added: 2.85 % to 3.50 %
Earnings per Share
1 unchanged sentence
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27,
7 unchanged sentences
Diluted $ 4.86 $ 4.26 $ 3.16
−Removed: For fiscal 2021, 2020 and 2019, no options were excluded from the calculation of dilutive potential common shares.
+Added: For fisc al 2022, 2021 and 2020, no options were exc luded from the calculation of dilutive potential common shares.
Derivative Financial Instruments
−Removed: We often use certain interest rate derivative contracts to hedge interest rate exposures on our variable rate debt.
−Removed: 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.
+Added: We use certain interest rate derivative contracts to hedge interest rate exposures on our variable rate debt.
+Added: Also, we may enter in 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.
1 unchanged sentence
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.
−Removed: The derivative contracts to hedge interest exposure are categorized within Level 2 of the fair value hierarchy.
+Added: Our derivative contracts are categorized within Level 2 of the fair value hierarchy.
+Added: In the anticipation of the planned acquisition of RPS, we entered into a forward contract during the fourth quarter of fiscal 2022 to acquire GBP 714.0 million at a rate of 1.0852 for a total of USD 774.8 million.
+Added: The contract matures on December 30, 2022.
+Added: Although an effective economic hedge of our foreign exchange risk related to this transaction, the forward contract did not qualify for hedge accounting.
+Added: As a result, the forward contract is marked-to-market with changes in fair value recognized in earnings each period.
+Added: The intrinsic value of the forward contract was immaterial at inception as the GBP/USD spot and forward exchange rates were essentially the same.
+Added: The fair value of the forward contract at October 2, 2022 was $ 19.9 million, which resulted in an unrealized gain of the same amount in the fourth quarter fiscal 2022, which is reflected in “Other income" on the consolidated income statement for fiscal 2022.
+Added: The related $ 19.9 million asset is reported in "Prepaid expenses and other current assets" on the consolidated balance sheet at October 2, 2022.
In fiscal 2018, we entered into five interest rate swap agreements that we designated as cash flow hedges to fix the interest rates on the borrowings under our term loan facility.
As of October 2, 2022, the notional principal of our outstanding interest swap agreements was $ 200.0 million ($ 40.0 million each.) The interest rate swaps have a fixed interest rate of 2.79 % and expire in July 2023 for all five agreements.
−Removed: At October 3, 2021 and September 27, 2020, the fair value of the effective portion of our interest rate swap agreements designated as cash flow hedges before tax effect was $( 9.4 ) million and $( 15.5 ) million, respectively, of which we expect to reclassify $ 5.4 million from accumulated other comprehensive loss to interest expense within the next 12 months.
−Removed: The fair values of our outstanding derivatives designated as hedging instruments were as foll ows:
−Removed: Fair Value of Derivative
−Removed: Instruments as of
−Removed: Balance Sheet Location October 3,
−Removed: 2021 September 27,
−Removed: (in thousands)
−Removed: Interest rate swap agreements Other current liabilities $ 9,394 $ 15,512
−Removed: Changes in the fair value of the interest rate swap agreements are presented on the consolidated statements of comprehensive income as follows:
−Removed: Fiscal Year Ended
−Removed: October 3, 2021 September 27, 2020 September 29, 2019
−Removed: (in thousands)
−Removed: (Loss) gain recognized in other comprehensive income, net of tax
−Removed: Interest rate swap agreements 6,117 ( 4,638 ) ( 12,125 )
−Removed: There were no ineffective portions of derivative instruments.
−Removed: Accordingly, no amounts were excluded from effectiveness testing for our interest rate swap agreements.
−Removed: We had no other derivative instruments that were not designated as hedging instruments for fiscal 2021, 2020 and 2019.
+Added: At October 2, 2022 and October 3, 2021, the fair value of the effective portion of our interest rate swap agreements designated as cash flow hedges before tax effect was an unrealized gain of $ 2.4 million and an unrealized loss of $ 9.4 million, which were reported in "Other long-term assets" and "Other current liabilities" on our consolidated balance sheets, respectively.
+Added: Additionally, the related gain of $ 11.8 million, a gain of $ 6.1 million and a loss of $ 4.6 million for fiscal year ended 2022, 2021 and 2020, respectively, were recognized and reported on our consolidated statements of comprehensive income.
+Added: We expect to reclassify a credit of $ 3.1 million from accumulated other comprehensive loss to interest expense within the next 12 months.
+Added: There were no other derivative instruments that were not designated as hedging instruments for fiscal 2022, 2021 and 2020.
Reclassifications Out of Accumulated Other Comprehensive Income (Loss)
7 unchanged sentences
Balances at September 29, 2019 $ ( 149,711 ) $ ( 10,873 ) $ ( 160,584 )
−Removed: Other comprehensive loss before reclassifications ( 21,109 ) ( 11,247 ) ( 32,356 )
+Added: Other comprehensive income (loss) before reclassifications 3,436 ( 599 ) 2,837
Amounts reclassified from accumulated other comprehensive income
1 unchanged sentence
— ( 4,039 ) ( 4,039 )
−Removed: Net current-period other comprehensive loss ( 21,109 ) ( 12,125 ) ( 33,234 )
+Added: Net current-period other comprehensive income (loss) 3,436 ( 4,638 ) ( 1,202 )
Balances at September 27, 2020 $ ( 146,275 ) $ ( 15,511 ) $ ( 161,786 )
−Removed: Other comprehensive income (loss) before reclassifications 3,436 ( 599 ) 2,837
+Added: Other comprehensive income before reclassifications 30,641 12,175 42,816
Amounts reclassified from accumulated other comprehensive income
1 unchanged sentence
— ( 6,058 ) ( 6,058 )
−Removed: Net current-period other comprehensive income (loss) 3,436 ( 4,638 ) ( 1,202 )
−Removed: Balances at September 27, 2020 $ ( 146,275 ) $ ( 15,511 ) $ ( 161,786 )
+Added: Net current-period other comprehensive income 30,641 6,117 36,758
+Added: Balances at October 3, 2021 $ ( 115,634 ) $ ( 9,394 ) $ ( 125,028 )
Other comprehensive income before reclassifications ( 94,922 ) 15,937 ( 78,985 )
14 unchanged sentences
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).
−Removed: The carrying value of our long-term debt approximated fair value at October 3, 2021 and September 27, 2020.
+Added: The carrying value of our long-ter m debt approximated fair value at October 2, 2022 and October 3, 2021.
At October 2, 2022, we had borrowings of $ 258.8 million outstanding under our Amended Credit Agreement, which were used to fund our business acquisitions, working capital needs, stock repurchases, dividends, capital expenditures and contingent earn-outs.
20 unchanged sentences
Additionally , we continue to report the results of the wind-down of our non-core construction activities in the RCM reportable segment.
+Added: There has been no remaining backlog for RCM since fiscal 2018 as the projects were complete.
Our reportable segments are described as follows:
−Removed: GSG provides consulting and engineering services primarily to U.S.
+Added: GSG provides high-end consulting and engineering services primarily to U.S.
government clients (federal, state and local) and development agencies worldwide.
3 unchanged sentences
municipal and commercial clients, especially in water infrastructure, solid waste and high-end sustainable infrastructure designs.
−Removed: GSG also leads our support for development agencies worldwide, especially in the United States, United Kingdom, and Australia.
−Removed: CIG primarily provides consulting and engineering services to U.S.
+Added: GSG also leads our support for development agencies worldwide, especially in the United States, the United Kingdom and Australia.
+Added: CIG primarily provides high-end consulting and engineering services to U.S.
commercial clients, and international clients that include both commercial and government sectors.
−Removed: CIG supports commercial clients across the Fortune 500, energy utilities, industrial, manufacturing, aerospace, and resource management markets.
−Removed: CIG also provides infrastructure and related environmental, 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.
−Removed: We continued to report the results of the wind-down of our non-core construction activities in the RCM reportable segment for fiscal 2021.
−Removed: As of October 3, 2021, there was no remaining backlog for RCM as all projects were complete.
+Added: CIG supports commercial clients across the Fortune 500, renewable energy, industrial, high performance buildings and aerospace markets.
+Added: CIG also provides sustainable infrastructure and related environmental, 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.
+Added: We continued to report the results of the wind-down of our non-core construction activities in the RCM reportable segment in fiscal 2022.
+Added: There has been no remaining backlog for RCM since fiscal 2018 as the projects were complete.
+Added: In May 2022, we received a cash settlement for the last $ 11 million RCM claim outstanding.
+Added: This settlement resulted in an immaterial gain in the third quarter of fiscal 2022.
+Added: There were no significant operating activities in RCM for fiscal 2022, 2021 and 2020.
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.
5 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27, 2020
8 unchanged sentences
CIG 194,142 152,262 136,418
−Removed: RCM — — ( 5,933 )
Corporate (1)
1 unchanged sentence
Total income from operations $ 340,446 $ 278,701 $ 241,091
−Removed: (1) Includes goodwill and intangible assets impairment charges, amortization of intangibles, other costs and other income not allocable to segments.
−Removed: The intangible asset amortization expense for fiscal 2021, 2020 and 2019 w as $ 11.5 million, $ 11.6 million and $ 11.6 million, respectively.
−Removed: Additionally, Corporate results included income (loss) for fair value adjustments to contingent consideration liabilities of $ 3.3 million, $ 15.0 million and $( 1.1 ) million for fiscal 2021, 2020 and 2019, respectively.
−Removed: Corporate results in fiscal, 2020 and 2019 also included $ 15.8 million and $ 7.8 million goodwill impairment charges, respectively.
−Removed: See Note 6 - "Goodwill and Intangible Assets" for more information.
−Removed: 2021 September 27,
+Added: (1) Includes goodwill and intangible assets impairment charges, amortizat ion of intangibles, other costs and other income not allocable to segments.
+Added: The intangible asset amortization expense for fiscal 2022, 2021 and 2020 was $ 13.2 million, $ 11.5 million and $ 11.6 million, respectively.
+Added: Additionally, Corporate results included income (loss) for fair value adjustments to contingent consideration liabilities of $( 0.3 ) million, $ 3.3 million and $ 15.0 million for fiscal 2022,
+Added: 2021 and 2020, respectively.
+Added: Corporate results in fiscal 2020 also included $ 15.8 million goodwill impairment charges.
+Added: See No te 6 - "Goodwill and Intangible Assets" for more information.
+Added: 2022 October 3,
(in thousands)
1 unchanged sentence
CIG 688,640 698,916
−Removed: RCM 11,360 14,258
Corporate (1)
4 unchanged sentences
Fiscal Year Ended
−Removed: 2021 September 27,
+Added: 2022 October 3,
2021 September 27, 2020
5 unchanged sentences
Long-lived assets (2) :
−Removed: 2021 September 27,
+Added: 2022 October 3,
(in thousands)
5 unchanged sentences
(2) Excludes goodwill, intangible assets and deferred income taxes.
−Removed: Fiscal 2022 Reportable Segments
−Removed: On the first day of fiscal 2022, we created a new High Performance Buildings division in our CIG reportable segment.
−Removed: As a result, we transferred some related operations in our GSG reportable segment with annual revenue of approximately $ 170 million to our CIG reportable segment.
−Removed: Beginning in the first quarter of fiscal 2022, our segment reporting will reflect this transfer and our historical comparisons will be revised to be consistent with the fiscal 2022 presentation.
Related Party Transactions
3 unchanged sentences
Our consolidated balance sheets also included the following amounts related to these services:
−Removed: October 3, 2021 September 27, 2020
+Added: October 2, 2022 October 3, 2021
(in thousands)
3 unchanged sentences
Quarterly Financial Information – Unaudited
−Removed: In the opinion of management, the followin g unaudited quarte rly data for the fiscal years ended October 3, 2021 and September 27, 2020 reflect all adjustments necessary for a fair statement of the results of operations.
+Added: In the opinion of management, the followin g unaudited quarte rly data for the fiscal years ended October 2, 2022 and October 3, 2021 reflect all adjustments necessary for a fair statement of the results of operations.
+Added: In the fourth quarter of fiscal 2022, we recognized a $ 19.9 million unrea lized gain on a foreign currency forward contract related to the planned acquisition of RPS.
In the fourth quarter of fiscal 2021, we recognized a non-recurring net tax benefit of $ 21.6 million primarily consisting of valuation allowances in the United Kingdom that were released due to sufficient positive evidence being obtained.
−Removed: In the second quarter of fiscal 2020, we incurred incremental costs totaling $ 8.2 million to address the COVID-19 pandemic.
−Removed: In the fourth quarter of fiscal 2020, we recorded adjustments to our contingent earn-out liabilities and reported related net gains in operating income of $ 13.5 million.
−Removed: Additionally, we recorded a $ 15.8 million goodwill impairment charge related to the ASP reporting unit, which is in our CIG segment.
−Removed: We sold non-core equipment related to the disposal of our Canadian turn-key pipeline activities throughout fiscal 2020 which resulted in gains of $ 0.8 million, $ 2.2 million, $ 4.5 million, and $ 1.0 million in the first, second, third, and fourth quarters of fiscal 2020, respectively.
Quarter Second
24 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.