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Discontinued Operations - Sale of Energy, Chemicals and Resources ("ECR") Business | 3 Months Ended
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Dec. 28, 2018
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations - Sale of Energy, Chemicals and Resources (ECR) Business | Sale of Energy, Chemicals and Resources ("ECR") Business On October 21, 2018, Jacobs and WorleyParsons Limited, a company incorporated in Australia, entered into a Stock and Asset Purchase Agreement pursuant to which Buyer agreed to acquire the Company’s ECR business for a purchase price of $3.3 billion consisting of (i) $2.6 billion in cash plus (ii) 58.2 million ordinary shares of the Buyer, subject to adjustments for changes in working capital and certain other items. The Transaction, which has been approved by the boards of directors of the Company and Buyer, is expected to close in the first half of calendar2019. The completion of the Transaction is subject to certain customary closing conditions, including, but not limited to, (i) the absence of any law or order prohibiting the consummation of the Transaction, (ii) the expiration or termination of the waiting period (and any extensions thereof) applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), (iii) the expiration or termination of all applicable waiting periods and the receipt of all applicable approvals required pursuant to or in connection with the competition laws of certain foreign jurisdictions in which the ECR business operates, (iv) the receipt of approval from the Committee on Foreign Investment in the United States (“CFIUS”), (v) the completion of a certain number of agreed upon steps of the pre-closing restructuring activities and (vi) the transfer of certain owned real property of the ECR business. On November 2, 2018, Jacobs and the Buyer filed their Premerger Notification and Report Forms under the HSR Act with the Antitrust Division of the U.S. Department of Justice and the Federal Trade Commission. On December 3, 2018, the required 30-day waiting period under the HSR Act expired. In addition, the requisite waiting periods and approvals under the competition laws of the European Union and Canada have been satisfied. Jacobs and WorleyParsons Limited previously submitted a joint voluntary notice seeking CFIUS approval which was accepted for review beginning February 4, 2019. Additional regulatory approvals are required to be obtained as a condition to closing. As a result of the Transaction and all relevant facts, the Company has concluded that the assets and liabilities to be sold in the Transaction (the "Disposal Group"), which includes our entire ECR business, met the criteria to be classified as held for sale beginning in the current fiscal quarter in accordance with U.S. GAAP. Furthermore, we determined that the assets held for sale should be reported as discontinued operations in accordance with ASC 210-05, Discontinued Operations because their disposal represents a strategic shift that will have a major effect on our operations and financial results. As such, the financial results of the ECR business are reflected in our unaudited Consolidated Statements of Earnings as discontinued operations for all periods presented. Furthermore, current and non-current assets and liabilities of the Disposal Group are reflected in the unaudited Consolidated Balance Sheets for both periods presented. The Company incurred approximately $6.3 million in related transaction costs (mainly professional service fees) for the ECR sale during the three months ended December 28, 2018. Summarized Financial Information of Discontinued Operations The following table represents earnings from discontinued operations, net of tax (in thousands):
| For the Three Months Ended
| December 28, 2018 |  | December 29, 2017
Revenues | $ | 1,164,707 |  |  | $ | 966,312 |
Direct cost of contracts | (995,606 | ) |  | (826,502 | )
Gross profit | 169,101 |  |  | 139,810 |
Selling, general and administrative expenses | (91,010 | ) |  | (93,546 | )
Operating Profit | 78,091 |  |  | 46,264 |
Total other (expense) income, net | 2,120 |  |  | 2,355 |
Earnings Before Taxes from Discontinued Operations | 80,211 |  |  | 48,619 |
Income Tax Expense | (20,053 | ) |  | (12,155 | )
Net Earnings of the Group from Discontinued Operations | $ | 60,158 |  |  | $ | 36,464 |
The following tables represent the assets and liabilities held for sale (in thousands):
| December 28, 2018 |  | September 28, 2018
Cash and cash equivalents | $ | 27,195 |  |  | $ | 21,138 |
Receivables and contract assets | 1,134,795 |  |  | 1,040,996 |
Prepaid expenses and other | 39,280 |  |  | 37,200 |
Current assets held for sale | $ | 1,201,270 |  |  | $ | 1,099,334 |
| December 28, 2018 |  | September 28, 2018
Property, Equipment and Improvements, net | $ | 198,520 |  |  | $ | 199,847 |
Goodwill | 1,290,723 |  |  | 1,308,000 |
Intangibles, net | 81,834 |  |  | 83,005 |
Miscellaneous | 109,832 |  |  | 110,838 |
Noncurrent assets held for sale | $ | 1,680,909 |  |  | $ | 1,701,690 |
| December 28, 2018 |  | September 28, 2018
Notes payable | $ | 1,537 |  |  | $ | 1,782 |
Accounts payable | 247,046 |  |  | 351,482 |
Accrued liabilities | 303,933 |  |  | 321,627 |
Contract liabilities | 239,763 |  |  | 146,679 |
Current liabilities held for sale | $ | 792,279 |  |  | $ | 821,570 |
| December 28, 2018 |  | September 28, 2018
Long-term Debt | $ | 1,685 |  |  | $ | 2,710 |
Other Deferred Liabilities | $ | 137,037 |  |  | $ | 147,894 |
Noncurrent liabilities held for sale | $ | 138,722 |  |  | $ | 150,604 |
The significant components included in our Consolidated Statements of Cash Flows for the discontinued operations are as follows (in thousands):
| For the Three Months Ended
| December 28, 2018 |  | December 29, 2017
Depreciation and amortization: |  |  |
Property, equipment and improvements | $ | 2,109.6 |  |  | $ | 6,355.9 |
Intangible assets | 613.8 |  |  | 3,251.3 |
Additions to property and equipment | (1,254.1 | ) |  | (7,621.0 | )
Stock based compensation | 3,615.0 |  |  | 2,364.5 |

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- Definition The entire disclosure related to a disposal group. Includes, but is not limited to, a discontinued operation, disposal classified as held-for-sale or disposed of by means other than sale or disposal of an individually significant component. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
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