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Segment Information | 9 Months Ended
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Jun. 29, 2018
Segment Reporting [Abstract] |
Segment Information | Segment Information During the second quarter of fiscal 2018, we reorganized our operating and reporting structure around three lines of business (“LOBs”), which also serve as the Company’s operating segments. This reorganization occurred in conjunction with the integration of CH2M into the Company's legacy businesses, and is intended to better serve our global clients, leverage our workforce, help streamline operations, and provide enhanced growth opportunities. The three global LOBs are as follows: Aerospace, Technology, Environmental and Nuclear ("ATEN"); Buildings, Infrastructure and Advanced Facilities ("BIAF"); and Energy, Chemicals and Resources ("ECR"). Previously, the Company operated its business around four operating segments: Petroleum & Chemicals, Buildings & Infrastructure, Aerospace & Technology, and Industrial. Beginning in the second quarter of fiscal 2018, management no longer views or manages our Industrial line of business as a separate, distinct operating segment. Therefore, the elements of our former Industrial business are now presented within each of the three current operating segments as appropriate. The Company’s LOB leadership and internal reporting structures report to the Chief Executive Officer, who is also the Chief Operating Decision Maker (“CODM”), and enable the CODM to evaluate the performance of each of these segments and make appropriate resource allocations among each of the segments. For purposes of the Company’s goodwill impairment testing, it has been determined that the Company’s operating segments are also its reporting units based on management’s conclusion that the components comprising each of its operating segments share similar economic characteristics and meet the aggregation criteria for reporting units in accordance with ASC 350, Intangibles-Goodwill and Other. Under the new organization, each LOB has a president that reports directly to the CODM. The sales function is managed on an LOB basis, and accordingly, the associated cost is embedded in the new segments and reported to the respective LOB presidents. In addition, a portion of the costs of other support functions (e.g., finance, legal, human resources, and information technology) is allocated to each LOB using methodologies which, we believe, effectively attribute the cost of these support functions to the revenue generating activities of the Company on a rational basis. The cost of the Company’s cash incentive plan, the Management Incentive Plan (“MIP”) and the expense associated with the Jacobs Engineering Group Inc. 1999 Stock Incentive Plan (“1999 SIP”) have likewise been charged to the LOBs except for those amounts determined to relate to the business as a whole (which amounts remain in other corporate expenses). Financial information for each LOB is reviewed by the CODM to assess performance and make decisions regarding the allocation of resources. The Company generally does not track assets by LOB, nor does it provide such information to the CODM. The CODM evaluates the operating performance of our LOBs using segment operating profit, which is defined as margin less “corporate charges” (e.g., the allocated amounts described above). The Company incurs certain Selling, General and Administrative costs (“SG&A”) that relate to its business as a whole which are not allocated to the LOBs. On December 15, 2017, the Company completed the acquisition of CH2M. For purposes of the Company’s third quarter fiscal 2018 segment reporting, the operating financial information of CH2M has been categorized within the Company’s new LOB business structure, with its sales and operating profit results for the time period during which CH2M has been under the ownership of the Company being allocated to the Company’s ATEN, BIAF and ECR lines of business under a transitional business organization structure. The Company has not completed its final assessment of the CH2M purchase price allocation, including the fair value estimates of assets acquired and liabilities assumed. The following tables present total revenues and segment operating profit for each reportable segment (in thousands) and includes a reconciliation of segment operating profit to total U.S. GAAP operating profit by including certain corporate-level expenses and expenses relating to the Restructuring and other charges and CH2M transaction and integration costs (in thousands). Prior period information has been recast to reflect the current period presentation.
| For the Three Months Ended |  | For the Nine Months Ended
| June 29, 2018 |  | June 30, 2017 |  | June 29, 2018 |  | June 30, 2017
Revenues from External Customers: |  |  |  |  |  |  |
Aerospace, Technology, Environmental and Nuclear | $ | 1,221,306 |  |  | $ | 610,643 |  |  | $ | 3,072,900 |  |  | $ | 1,815,871 |
Buildings, Infrastructure and Advanced Facilities | 1,707,072 |  |  | 987,159 |  |  | 4,497,249 |  |  | 2,823,882 |
Energy, Chemicals and Resources | 1,228,285 |  |  | 916,949 |  |  | 3,271,852 |  |  | 2,729,169 |
Total | $ | 4,156,663 |  |  | $ | 2,514,751 |  |  | $ | 10,842,001 |  |  | $ | 7,368,922 |
| For the Three Months Ended |  | For the Nine Months Ended
| June 29, 2018 |  | June 30, 2017 |  | June 29, 2018 |  | June 30, 2017
Segment Operating Profit: |  |  |  |  |  |  |
Aerospace, Technology, Environmental and Nuclear (1) | $ | 89,334 |  |  | $ | 49,383 |  |  | $ | 217,003 |  |  | $ | 143,781 |
Buildings, Infrastructure and Advanced Facilities (2) | 145,901 |  |  | 72,991 |  |  | 347,887 |  |  | 191,680 |
Energy, Chemicals and Resources | 61,969 |  |  | 45,792 |  |  | 164,759 |  |  | 120,106 |
Total Segment Operating Profit | 297,204 |  |  | 168,166 |  |  | 729,649 |  |  | 455,567 |
Other Corporate Expenses (3) | (33,131 | ) |  | (28,991 | ) |  | (110,919 | ) |  | (55,625 | )
Restructuring and Other Charges | (46,922 | ) |  | (10,700 | ) |  | (135,156 | ) |  | (114,666 | )
CH2M Transaction Costs | (4,422 | ) |  | — |  |  | (76,915 | ) |  | — |
Total U.S. GAAP Operating Profit | 212,729 |  |  | 128,475 |  |  | 406,659 |  |  | 285,276 |
Total Other (Expense) Income, net (4) | (19,946 | ) |  | (1,079 | ) |  | (49,792 | ) |  | (11,509 | )
Earnings Before Taxes | $ | 192,783 |  |  | $ | 127,396 |  |  | $ | 356,867 |  |  | $ | 273,767 |
(1) | Includes $15.0 million in charges during the nine month period ended June 29, 2018 associated with a legal matter.
(2) | Excludes $22.6 million in restructuring and other charges for the nine months ended June 30, 2017. See Note 10, Restructuring and Other Charges.
(3) | Includes $15.0 million in other corporate charges associated with a certain project for the three months ended June 29, 2018.
(4) | Includes amortization of deferred financing fees related to the CH2M acquisition of $0.5 million and $1.2 million for the three and nine months ended June 29, 2018, respectively. Also includes $1.2 million of restructuring and other expenses for the nine months ended June 30, 2017.
Included in “other corporate expenses” in the above table are costs and expenses which relate to general corporate activities as well as corporate-managed benefit and insurance programs. Such costs and expenses include: (i) those elements of SG&A expenses relating to the business as a whole; (ii) those elements of the Management Incentive Plan and the 1999 SIP relating to corporate personnel whose other compensation costs are not allocated to the LOBs; (iii) the amortization of intangible assets acquired as part of purchased business combinations; (iv) the quarterly variances between the Company’s actual costs of certain of its self-insured integrated risk and employee benefit programs and amounts charged to the LOBs; and (v) certain adjustments relating to costs associated with the Company’s international defined benefit pension plans. In addition, other corporate expenses may also include from time to time certain adjustments to contract margins (both positive and negative) associated with projects where it has been determined, in the opinion of management, that such adjustments are not indicative of the performance of the related LOB. We provide a broad range of technical, professional, and construction services including engineering, design, and architectural services; construction and construction management services; operations and maintenance services; and process, scientific, and systems consulting services. We provide our services through offices and subsidiaries located primarily in North America, South America, Europe, the Middle East, India, Australia, Africa, and Asia. We provide our services under cost-reimbursable and fixed-price contracts. The following tables present total services revenues for each reportable segment for the three and nine months ended June 29, 2018 and June 30, 2017 (in thousands). Certain reclassifications have been made in connection with the segment realignment which took place in the second quarter of fiscal 2018.
| For the Three Months Ended |  | For the Nine Months Ended
| June 29, 2018 |  | June 29, 2018
| Aerospace, Technology, Environmental and Nuclear |  | Buildings, Infrastructure and Advanced Facilities |  | Energy, Chemicals and Resources |  | Total |  | Aerospace, Technology, Environmental and Nuclear |  | Buildings, Infrastructure and Advanced Facilities |  | Energy, Chemicals and Resources |  | Total
Technical Professional Services Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Project Services | $ | 592,290 |  |  | $ | 1,265,193 |  |  | $ | 275,884 |  |  | $ | 2,133,367 |  |  | $ | 1,415,382 |  |  | $ | 3,412,655 |  |  | $ | 908,397 |  |  | $ | 5,736,434 |
Process, Scientific, and Systems Consulting | 316,175 |  |  | 2,982 |  |  | 6,971 |  |  | 326,128 |  |  | 823,404 |  |  | 7,453 |  |  | 18,488 |  |  | 849,345 |
Total Technical Professional Services Revenues | 908,465 |  |  | 1,268,175 |  |  | 282,855 |  |  | 2,459,495 |  |  | 2,238,786 |  |  | 3,420,108 |  |  | 926,885 |  |  | 6,585,779 |
Field Services Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction | 175,154 |  |  | 433,270 |  |  | 680,553 |  |  | 1,288,977 |  |  | 478,893 |  |  | 1,065,879 |  |  | 1,683,296 |  |  | 3,228,068 |
Operations and Maintenance ("O&M") | 137,687 |  |  | 5,627 |  |  | 264,877 |  |  | 408,191 |  |  | 355,221 |  |  | 11,262 |  |  | 661,671 |  |  | 1,028,154 |
Total Field Services Revenues | 312,841 |  |  | 438,897 |  |  | 945,430 |  |  | 1,697,168 |  |  | 834,114 |  |  | 1,077,141 |  |  | 2,344,967 |  |  | 4,256,222 |
| $ | 1,221,306 |  |  | $ | 1,707,072 |  |  | $ | 1,228,285 |  |  | $ | 4,156,663 |  |  | $ | 3,072,900 |  |  | $ | 4,497,249 |  |  | $ | 3,271,852 |  |  | $ | 10,842,001 |
| For the Three Months Ended |  | For the Nine Months Ended
| June 30, 2017 |  | June 30, 2017
| Aerospace, Technology, Environmental and Nuclear |  | Buildings, Infrastructure and Advanced Facilities |  | Energy, Chemicals and Resources |  | Total |  | Aerospace, Technology, Environmental and Nuclear |  | Buildings, Infrastructure and Advanced Facilities |  | Energy, Chemicals and Resources |  | Total
Technical Professional Services Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Project Services | $ | 232,288 |  |  | $ | 704,940 |  |  | $ | 267,300 |  |  | $ | 1,204,528 |  |  | $ | 619,149 |  |  | $ | 1,992,889 |  |  | $ | 812,008 |  |  | $ | 3,424,046 |
Process, Scientific, and Systems Consulting | 190,955 |  |  | 2,537 |  |  | 5,463 |  |  | 198,955 |  |  | 575,728 |  |  | 8,868 |  |  | 15,554 |  |  | 600,150 |
Total Technical Professional Services Revenues | 423,243 |  |  | 707,477 |  |  | 272,763 |  |  | 1,403,483 |  |  | 1,194,877 |  |  | 2,001,757 |  |  | 827,562 |  |  | 4,024,196 |
Field Services Revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction | 82,295 |  |  | 276,013 |  |  | 483,911 |  |  | 842,219 |  |  | 254,505 |  |  | 811,410 |  |  | 1,445,720 |  |  | 2,511,635 |
Operations and Maintenance ("O&M") | 105,105 |  |  | 3,669 |  |  | 160,275 |  |  | 269,049 |  |  | 366,489 |  |  | 10,715 |  |  | 455,887 |  |  | 833,091 |
Total Field Services Revenues | 187,400 |  |  | 279,682 |  |  | 644,186 |  |  | 1,111,268 |  |  | 620,994 |  |  | 822,125 |  |  | 1,901,607 |  |  | 3,344,726 |
| $ | 610,643 |  |  | $ | 987,159 |  |  | $ | 916,949 |  |  | $ | 2,514,751 |  |  | $ | 1,815,871 |  |  | $ | 2,823,882 |  |  | $ | 2,729,169 |  |  | $ | 7,368,922 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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