Restructuring and Other Charges

9 Months Ended

Jun. 28, 2019

Restructuring and Related Activities [Abstract]

ECR Sale and Other Restructuring

During fiscal 2019, the Company implemented certain restructuring and pre-separation initiatives associated with the sale of the ECR business, the acquisition of KeyW and other related cost reduction initiatives. The restructuring activities and related costs were comprised mainly of separation and lease abandonment programs, while the pre-separation activities and costs were mainly related to the engagement of consulting services and internal personnel and other related costs dedicated to the Company’s sales management efforts.

Leading up to and subsequent to the ECR sale, these activities include restructuring and other charges amounting to approximately $72.6 million and $106.1 million, respectively, for the three and nine months ended June 28, 2019. These activities are expected to continue into fiscal 2020.

CH2M Restructuring

During the fourth fiscal quarter of 2017, the Company implemented certain restructuring and pre-integration initiatives associated with the impending acquisition of CH2M, which closed on December 15, 2017. The restructuring activities and related costs were comprised mainly of severance and lease abandonment programs, while the pre-integration activities and costs were mainly related to the engagement of consulting services and internal personnel and other related costs dedicated to the Company’s acquisition integration management efforts.

Following the closing of the CH2M acquisition, these activities have continued into fiscal 2019 and include restructuring charges amounting to approximately $6.0 million and $68.5 million during the three and nine month periods ended June 28, 2019, respectively, and $33.9 million and $94.6 million in pre-tax charges during the three and nine month periods ended June 29, 2018, respectively. Combined with costs from integration activities of $17.3 million and $30.8 million for the three and nine month periods ended June 28, 2019, and $12.6 million and $40.6 million during the three and nine month periods ended June 29, 2018, respectively, the total cost of these restructuring and integration activities approximated $23.3 million and $99.3 million, in pre-tax charges for three and nine month periods ended June 28, 2019, respectively, and $46.5 million and $135.2 million, respectively, in pre-tax charges for the three and nine months ended June 29, 2018. These activities are expected to be substantially completed by the end of 2019. These activities are not expected to involve the exit of any service types or client end-markets.

Collectively, the above-mentioned restructuring activities are referred to as “Restructuring and other charges.”

The following table summarizes the impacts of the Restructuring and other charges (or recoveries, which primarily relate to the reversals of lease abandonment accruals) by LOB in connection with the CH2M and KeyW acquisitions and the ECR sale for the three and nine months ended June 28, 2019 and the CH2M acquisition for the three and nine months ended June 29, 2018 (in thousands):



	Three Months Ended					Nine Months Ended
	June 28, 2019		June 29, 2018			June 28, 2019			June 29, 2018
Aerospace, Technology and Nuclear	$	7,699	$	16,936		$	8,489		$	18,655
Buildings, Infrastructure and Advanced Facilities	10,619		32,423			68,644			53,603
Corporate(1)	74,921		(19,282		)	127,986			50,486
Continuing Operations	93,239		30,077			205,119			122,744
Energy, Chemicals and Resources (included in Discontinued Operations)	2,720		16,379			(138		)	12,412
Total	$	95,959	$	46,456		$	204,981		$	135,156

(1) Includes $34.6 million in pre-tax gains associated with the Company's CH2M retiree medical plan settlement during the nine months ended June 28, 2019.

The activity in the Company’s accrual for the Restructuring and other charges including the programs described above for the nine-month period ended June 28, 2019 is as follows (in thousands):



Balance at September 28, 2018	$	102,297
ECR Sale Transfer	(6,746		)
Net Charges(1)	204,981
Payments and Usage	(150,441		)
Balance at June 28, 2019	$	150,091

(1) Includes $34.6 million in pre-tax gains associated with the Company's CH2M retiree medical plan settlement during the nine months ended June 28, 2019.

The following table summarizes the Restructuring and other charges by major type of costs in connection with the CH2M and KeyW acquisitions and the ECR sale for the three and nine months ended June 28, 2019, and the CH2M acquisition for the three and nine months ended June 29, 2018 (in thousands):



	Three Months Ended				Nine Months Ended
	June 28, 2019		June 29, 2018		June 28, 2019		June 29, 2018
Lease Abandonments	$	22,982	$	14,678	$	66,341	$	55,114
Involuntary Terminations	12,020		10,215		22,979		29,335
Outside Services	39,853		11,418		95,987		28,176
Other(1)	21,104		10,145		19,674		22,531
Total	$	95,959	$	46,456	$	204,981	$	135,156

(1) Includes $34.6 million in pre-tax gains associated with the Company's CH2M retiree medical plan settlement during the nine months ended June 28, 2019.

Cumulative amounts incurred to date under our various restructuring and other programs described above by each major type of cost as of June 28, 2019 are as follows (in thousands):



Lease Abandonments	$	120,255
Involuntary Terminations	72,992
Outside Services	132,295
Other(1)	83,196
Total	$	408,738

(1) Includes $34.6 million in pre-tax gains associated with the Company's CH2M retiree medical plan settlement during the nine months ended June 28, 2019.