XML 44 R15.htm IDEA: XBRL DOCUMENT
v3.20.2

Income Taxes | 12 Months Ended
--- | ---
Oct. 02, 2020
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table presents the components of our consolidated income taxes for continuing operations for years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):
| For the Years Ended
| October 2, 2020 |  | September 27, 2019 |  | September 28, 2018
Current income tax (benefit) expense from continuing operations: |  |  |  |  |
Federal | $ | (37,030) |  |  | $ | 25,549 |  |  | $ | 49,829 |
State | (5,021) |  |  | 6,639 |  |  | (1,546) |
Foreign | 41,616 |  |  | 57,156 |  |  | 20,858 |
Total current tax expense from continuing operations | (435) |  |  | 89,344 |  |  | 69,141 |
Deferred income tax expense (benefit) from continuing operations: |  |  |  |  |
Federal | 53,485 |  |  | 6,607 |  |  | 230,358 |
State | 7,133 |  |  | 20,408 |  |  | 17,318 |
Foreign | (4,863) |  |  | (79,405) |  |  | 8,815 |
Total deferred tax expense (benefit) from continuing operations | 55,755 |  |  | (52,390) |  |  | 256,491 |
Consolidated income tax expense from continuing operations | $ | 55,320 |  |  | $ | 36,954 |  |  | $ | 325,632 |
On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted in the United States and significantly revised the U.S. corporate income tax laws. Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allowed registrants to record provisional amounts during a one year “measurement period” like that used when accounting for business combinations. As of December 22, 2018, we completed our accounting for the tax effects of the enactment of the Act. For the deferred tax balances, we measured the U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The Company’s revised measurement resulted in cumulative charges to income tax expense of $144.4 million during fiscal year 2018. Additionally, in fiscal year 2019, the Company recorded $24.4 million of tax expense associated with the valuation of U.S. net operating losses that were expected to be recovered at 35%, but were actually utilized at 21%. The Act called for a one-time tax on deemed repatriation of foreign earnings. This one-time transition tax was based on our total post-1986 earnings and profits (E&P) of certain of our foreign subsidiaries. We recorded $14.3 million in cumulative transition taxes during the measurement period in fiscal year 2018, although the transition tax was expected to be offset by foreign tax credits in the future, resulting in no additional cash tax liability. In fiscal 2018 the Company adopted ASU No 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income. The guidance provides the option to reclassify to retained earnings tax effects related to items in accumulated other comprehensive income that the FASB refers to as having been stranded in accumulated other comprehensive income as a result of tax reform. As a result of adoption of ASU 2018-02, the Company reclassified $10.2 million in accumulated other comprehensive income to retained earnings relating to the fiscal 2018 year deferred tax activity for its U.S. pension plans resulting from the Act. Deferred taxes reflect the tax effects of temporary differences between the amounts recorded as assets and liabilities for financial reporting purposes and the comparable amounts recorded for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The following table presents the components of our net deferred tax assets at October 2, 2020 and September 27, 2019 (in thousands):
| October 2, 2020 |  | September 27, 2019
Deferred tax assets: |  |  |
Obligations relating to: |  |  |
Defined benefit pension plans | $ | 55,949 |  |  | $ | 56,854 |
Other employee benefit plans | 132,613 |  |  | 149,276 |
Net operating losses | 197,987 |  |  | 241,033 |
Foreign tax credit | 87,259 |  |  | 84,553 |
Other credits | 6,808 |  |  | 13,881 |
Contract revenues and costs | 70,733 |  |  | 51,579 |
Investments | 49,848 |  |  | 23,204 |
Lease liability | 154,979 |  |  | — |
Deferred rent | — |  |  | 21,847 |
Restructuring | 11,974 |  |  | 8,205 |
Valuation allowance | (140,578) |  |  | (153,257) |
Gross deferred tax assets | 627,572 |  |  | 497,175 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (240,097) |  |  | (177,002) |
Lease right of use asset | (89,824) |  |  | — |
Unremitted earnings | (17,295) |  |  | (29,761) |
Partnership investment | (66,082) |  |  | — |
Other, net | (6,593) |  |  | (8,890) |
Gross deferred tax liabilities | (419,891) |  |  | (215,653) |
Net deferred tax assets | $ | 207,681 |  |  | $ | 281,522 |
A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. The valuation allowance was $140.6 million at October 2, 2020 and $153.3 million at September 27, 2019. Of the $12.7 million decrease in the valuation allowance, $15.1 million relates to a decrease for a change in judgment on the realizability of deferred tax assets in the U.K., which is offset by a $2.4 million increase attributable to current year activity. At October 2, 2020 and September 27, 2019, the domestic and international net operating loss (NOL) carryforwards totaled $783.9 million and $945.1 million, resulting in an NOL deferred tax asset of $198.0 million and $241.0 million, respectively. The Company's net operating losses have various expiration periods between 2021 and indefinite periods. At October 2, 2020, the Company has foreign tax credit carryforwards of $87.3 million, expiring between 2022 and 2037. The following table presents the income tax benefits from continuing operations realized from the exercise of non-qualified stock options and disqualifying dispositions of stock sold under our employee stock purchase plans for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in millions):
For the Years Ended
October 2, 2020 |  | September 27, 2019 |  | September 28, 2018
$ | 10.2 |  |  | $ | 7.9 |  |  | $ | 2.2 |
The following table reconciles total income tax expense from continuing operations using the statutory U.S. federal income tax rate to the consolidated income tax expense for continuing operations shown in the accompanying Consolidated Statements of Earnings for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (dollars in thousands):
| For the Years Ended
| October 2, 2020 |  | % |  | September 27, 2019 |  | % |  | September 28, 2018 |  | %
Statutory amount | $ | 92,652 |  |  | 21.0 | % |  | $ | 73,701 |  |  | 21.0 | % |  | $ | 81,421 |  |  | 24.6 | %
State taxes, net of the federal benefit | 7,254 |  | 1.6 | % |  | 10,183 |  |  | 2.9 | % |  | 15,772 |  |  | 4.8 | %
Exclusion of tax on non-controlling interests | (6,622) |  | (1.5) | % |  | (4,839) |  |  | (1.4) | % |  | (2,389) |  |  | (0.7) | %
Foreign: |  |  |  |  |  |  |  |  |  |  |
Difference in tax rates of foreign operations | (6,267) |  | (1.4) | % |  | 1,083 |  |  | 0.3 | % |  | 2,815 |  |  | 0.9 | %
Benefit from foreign valuation allowance release | (16,861) |  | (3.8) | % |  | (29,125) |  |  | (8.3) | % |  | (5,088) |  |  | (1.5) | %
U.S. tax cost (benefit) of foreign operations | 42,992 |  |  | 9.7 | % |  | (17,760) |  |  | (5.1) | % |  | 4,030 |  |  | 1.2 | %
Tax differential on foreign earnings | 19,864 |  |  | 4.5 | % |  | (45,802) |  |  | (13.1) | % |  | 1,757 |  |  | 0.6 | %
Foreign tax credits | (26,471) |  | (6.0) | % |  | (15,682) |  |  | (4.5) | % |  | (21,735) |  |  | (6.6) | %
Tax Rate Change | (6,811) |  |  | (1.5) | % |  | — |  |  | — |  |  | — |  |  | — |
Tax reform | — |  | — | % |  | 36,674 |  |  | 10.4 | % |  | 155,756 |  |  | 47.1 | %
Valuation allowance | — |  | — | % |  | (207) |  |  | (0.1) | % |  | 104,221 |  |  | 31.5 | %
Uncertain tax positions | (11,338) |  | (2.6) | % |  | (6,883) |  |  | (2.0) | % |  | (1,402) |  |  | (0.4) | %
Other items: |  |  |  |  |  |  |  |  |  |  |
IRS §179D deduction | (7,267) |  | (1.6) | % |  | (2,957) |  |  | (0.8) | % |  | (4,557) |  |  | (1.4) | %
Disallowed officer compensation | 5,081 |  | 1.2 | % |  | 5,568 |  |  | 1.6 | % |  | 1,510 |  |  | 0.5 | %
Stock compensation | (10,234) |  | (2.3) | % |  | (7,864) |  |  | (2.2) | % |  | (2,158) |  |  | (0.7) | %
Other items – net | (788) |  | (0.2) | % |  | (4,938) |  |  | (1.4) | % |  | (2,564) |  |  | (0.8) | %
Total other items | (13,208) |  | (3.0) | % |  | (10,191) |  |  | (2.8) | % |  | (7,769) |  |  | (2.4) | %
Taxes on income from continuing operations | $ | 55,320 |  |  | 12.5 | % |  | $ | 36,954 |  |  | 10.5 | % |  | $ | 325,632 |  |  | 98.4 | %
The following table presents income tax payments made during the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in millions):
October 2, 2020 |  | September 27, 2019 |  | September 28, 2018
$ | 39.8 |  |  | $ | 291.7 |  |  | $ | 44.3 |
The following table presents the components of our consolidated earnings from continuing operations before taxes for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):
| For the Years Ended
| October 2, 2020 |  | September 27, 2019 |  | September 28, 2018
United States earnings | $ | 208,302 |  |  | $ | 225,898 |  |  | $ | 263,991 |
Foreign earnings | 232,901 |  |  | 125,061 |  |  | 66,990 |
| $ | 441,203 |  |  | $ | 350,959 |  |  | $ | 330,981 |
The tax cost, net of applicable credits, have been provided on the undistributed earnings of the Company’s foreign subsidiaries. As of October 2, 2020, the estimated tax cost of repatriating earnings to the United States is approximately $16.2 million. The Company does not assert any earnings to be permanently reinvested. The Company accounts for unrecognized tax benefits in accordance with ASC Topic 740, Income Taxes. It accounts for interest and penalties on unrecognized tax benefits as interest and penalties reported above the line (i.e., not as part of income tax expense). The Company’s liability for gross unrecognized tax benefits was $93.4 million and $85.2 million at October 2, 2020 and September 27, 2019, respectively, after ASU 2013-11 netting of $9.1 million and $19.2 million, respectively. If recognized, $86.2 million would affect the Company’s consolidated effective income tax rate. The Company had $40.4 million and $51.1 million in accrued interest and penalties at October 2, 2020 and September 27, 2019, respectively. The Company estimates that, within twelve months, we may realize a decrease in our uncertain tax positions of approximately $5.5 million as a result of concluding various tax audits and closing tax years. As of October 2, 2020, the Company’s U.S. federal income tax returns for tax years 2013 and forward remain subject to examination. The following table presents the reconciliation of the beginning and ending amount of unrecognized tax benefits for both continuing and discontinued operations, with ECR-sale related impacts removed in the Acquisitions/Divestitures row, for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):
| For the Years Ended
| October 2, 2020 |  | September 27, 2019 |  | September 28, 2018
Balance, beginning of year | $ | 104,355 |  |  | $ | 179,140 |  |  | $ | 38,580 |
Acquisitions/Divestitures | — |  |  | (31,004) |  |  | 137,912 |
Additions based on tax positions related to the current year | 1,064 |  |  | 7,455 |  |  | 9,780 |
Additions for tax positions of prior years | 7,472 |  |  | 1,994 |  |  | 5,561 |
Reductions for tax positions of prior years | (6,695) |  |  | (49,849) |  |  | (8,962) |
Settlement | (3,712) |  |  | (3,381) |  |  | (3,731) |
Balance, end of year | $ | 102,484 |  |  | $ | 104,355 |  |  | $ | 179,140 |
On March 6, 2020, the Company completed the acquisition of John Wood Group's nuclear business, on June 12, 2019, the Company completed the acquisition of KeyW and on December 15, 2017 the Company completed the acquisition of CH2M. For income tax purposes, the transactions were accounted for as stock purchases. As a result of the acquisitions, the Company adjusted its U.S. GAAP opening balance sheet of John Wood Group, KeyW and CH2M to reflect estimates of the fair value of the net assets acquired. For income tax purposes, the tax attributes and basis of net assets acquired carryover without any step-up to fair value. For John Wood Group's nuclear business, the Company has made preliminary estimates and recorded deferred taxes associated with the purchase accounting. It is expected that the Company will make adjustments to the purchase accounting over the relevant measurement period as allowed by ASC 805. For KeyW, the Company completed its purchase accounting in the third quarter of the current fiscal year.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=116825942&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=84230637&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration