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Discontinued Operations - Sale of Energy, Chemicals and Resources ("ECR") Business | 6 Months Ended
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Mar. 29, 2019
Discontinued Operations and Disposal Groups [Abstract] |
Discontinued Operations - Sale of Energy, Chemicals and Resources (ECR) Business | Discontinued Operations - Sale of Energy, Chemicals and Resources ("ECR") Business On October 21, 2018, Jacobs and WorleyParsons Limited ("Buyer"), 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 closed on April 26, 2019. As a result of the Transaction and all relevant facts, the Company concluded that the assets and liabilities sold in the Transaction (the "Disposal Group"), which represents our entire ECR business, met the criteria to be classified as held for sale beginning in the first fiscal quarter of 2019 in accordance with U.S. GAAP. Furthermore, we determined that the disposal group 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. Amounts reflected below as of September 28, 2018 include certain reclassifications to amounts previously disclosed in our first quarter 2019 Form 10-Q in order to conform to the current quarter classifications of assets and liabilities held for sale based on the current terms of the sale transaction. Amounts classified as of September 28, 2018 include an increase to cash and cash equivalents of $137.0 million and a reduction to contract liabilities of $65.0 million. Subsequent to the first quarter of fiscal 2019, it was determined that additional cash remain with ECR entities being sold, an equal amount of which will increase the purchase price. The Company incurred approximately $2.3 million and $8.6 million in related transaction costs (mainly professional service fees) for the ECR sale during the three and six month periods ended March 29, 2019. Summarized Financial Information of Discontinued Operations The following table represents earnings (loss) from discontinued operations, net of tax (in thousands):
| Three Months Ended |  | For the Six Months Ended
| March 29, 2019 |  | March 30, 2018 |  | March 29, 2019 |  | March 30, 2018
Revenues | $ | 1,161,083 |  |  | $ | 1,064,733 |  |  | $ | 2,325,790 |  |  | $ | 2,031,045 |
Direct cost of contracts | (999,944 | ) |  | (898,292 | ) |  | (1,995,550 | ) |  | (1,724,795 | )
Gross profit | 161,139 |  |  | 166,441 |  |  | 330,240 |  |  | 306,250 |
Selling, general and administrative expenses | (202,590 | ) |  | (94,959 | ) |  | (293,600 | ) |  | (188,505 | )
Operating Profit (Loss) | (41,451 | ) |  | 71,482 |  |  | 36,640 |  |  | 117,745 |
Total other (expense) income, net | (34,413 | ) |  | 2,034 |  |  | (32,293 | ) |  | 4,390 |
Earnings (Loss) Before Taxes from Discontinued Operations | (75,864 | ) |  | 73,516 |  |  | 4,347 |  |  | 122,135 |
Income Tax Benefit (Expense) | 18,858 |  |  | (18,379 | ) |  | (1,194 | ) |  | (30,534 | )
Net Earnings (Loss) of the Group from Discontinued Operations | $ | (57,006 | ) |  | $ | 55,137 |  |  | $ | 3,153 |  |  | $ | 91,601 |
Selling, general and administrative expenses and total other (expense) income, net in the table above include amounts recorded in connection with charges recognized in the second quarter of 2019 related to the Nui Phao ("NPMC") legal matter described in Note 18. The following tables represent the assets and liabilities held for sale (in thousands):
| March 29, 2019 |  | September 28, 2018
Cash and cash equivalents | $ | 176,090 |  |  | $ | 158,488 |
Receivables and contract assets | 1,087,492 |  |  | 1,040,996 |
Prepaid expenses and other | 33,848 |  |  | 37,200 |
Current assets held for sale | $ | 1,297,430 |  |  | $ | 1,236,684 |
Property, Equipment and Improvements, net | $ | 199,207 |  |  | $ | 199,847 |
Goodwill | 1,291,794 |  |  | 1,308,000 |
Intangibles, net | 82,396 |  |  | 83,005 |
Miscellaneous | 101,615 |  |  | 110,838 |
Noncurrent assets held for sale | $ | 1,675,012 |  |  | $ | 1,701,690 |
Notes payable | $ | 1,118 |  |  | $ | 1,782 |
Accounts payable | 283,481 |  |  | 351,482 |
Accrued liabilities | 304,454 |  |  | 321,627 |
Contract liabilities | 142,105 |  |  | 81,679 |
Current liabilities held for sale | $ | 731,158 |  |  | $ | 756,570 |
Long-term Debt | $ | 1,384 |  |  | $ | 2,710 |
Other Deferred Liabilities | $ | 121,609 |  |  | $ | 147,894 |
Noncurrent liabilities held for sale | $ | 122,993 |  |  | $ | 150,604 |
The significant components included in our Consolidated Statements of Cash Flows for the discontinued operations are as follows (in thousands):
| For the Six Months Ended
| March 29, 2019 |  | March 30, 2018
Depreciation and amortization: |  |  |
Property, equipment and improvements | $ | 2,110 |  |  | $ | 13,899 |
Intangible assets | $ | 614 |  |  | $ | 6,296 |
Additions to property and equipment | $ | (2,571 | ) |  | $ | (11,346 | )
Stock based compensation | $ | 7,220 |  |  | $ | 4,866 |

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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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