XML 37 R25.htm IDEA: XBRL DOCUMENT
v3.21.2

Sale of Energy, Chemicals and Resources ("ECR") Business | 9 Months Ended
--- | ---
Jul. 02, 2021
Discontinued Operations and Disposal Groups [Abstract] |
Sale of Energy, Chemicals and Resources (ECR) Business | Sale of Energy, Chemicals and Resources ("ECR") Business On April 26, 2019, Jacobs completed the sale of its ECR business to Worley for a purchase price of $3.4 billion consisting of (i) $2.8 billion in cash plus (ii) 58.2 million ordinary shares of Worley, subject to adjustments for changes in working capital and certain other items (the “ECR sale”). Discontinued Operations As a result of the ECR sale, substantially all ECR-related assets and liabilities were sold (the "Disposal Group"). We determined that the Disposal Group should be reported as discontinued operations in accordance with ASC 210-05, Discontinued Operations because their disposal represent a strategic shift that had 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. Additionally, assets and liabilities of the ECR business were reflected as held-for-sale in the Consolidated Balance Sheets through December 27, 2019. As of the fiscal year ended October 2, 2020, all of the ECR business to be sold under the terms of the ECR sale had been conveyed to Worley and as such, no amounts remain held for sale. Summarized Financial Information of Discontinued Operations The following table represents earnings (loss) from discontinued operations, net of tax (in thousands):
| For the Three Months Ended |  | For the Nine Months Ended
| July 2, 2021 |  | June 26, 2020 |  | July 2, 2021 |  | June 26, 2020
Revenues | $ | — |  |  | $ | 59 |  |  | $ | — |  |  | $ | 11,221 |
Direct cost of contracts | — |  |  | (69) |  |  | — |  |  | (6,124) |
Gross profit | — |  |  | (10) |  |  | — |  |  | 5,097 |
Selling, general and administrative expenses | — |  |  | (801) |  |  | (34) |  |  | 43,359 |
Operating (Loss) Profit | — |  |  | (811) |  |  | (34) |  |  | 48,456 |
Gain on sale of ECR business | — |  |  | 31,456 |  |  | 15,608 |  |  | 113,366 |
Other expense, net | 509 |  |  | 1,472 |  |  | (72) |  |  | 112 |
Earnings Before Taxes from Discontinued Operations | 509 |  |  | 32,117 |  |  | 15,502 |  |  | 161,934 |
Income Tax (Expense) Benefit | (125) |  |  | (14,074) |  |  | (3,812) |  |  | (36,423) |
Net Earnings of the Group from Discontinued Operations | $ | 384 |  |  | $ | 18,043 |  |  | $ | 11,690 |  |  | $ | 125,511 |
In t he second quarter of fiscal 2021, the Company received final working capital settlement proceeds of $36.4 million from Worley and as such, recorded a pre-tax gain of $15.6 million. Offsetting the proceeds from the settlement to arrive at the net gain amount were previously recorded accounts receivable from Worley. For the nine months ended June 26, 2020, selling, general and administrative expenses included an offsetting insuranc e recovery of $50.0 million recorded in connection with a legal matter. For the nine months ended June 26, 2020, the gain on sale of $113.4 million relates mainly to the recognition of the deferred gain for the delayed transfer of the ECR-related assets and liabilities of the two international entities discussed below, adjustments for working capital and certain other items in connection with the sale and additional income for the release of a deferred gain upon achievement of the IT Migration Date described below in connection with the delivery to Worley of certain IT application and hardware assets related to the ECR business. Gain on Sale and Deferred Gain As a result of the ECR sale, the Company recognized a pre-tax gain of approximately $1.0 billion, $935.1 million of which was recognized in fiscal 2019, $110.2 million for the year ended October 2, 2020 and $0.0 million and $15.6 million for the three and nine months ended July 2, 2021 respectively. Upon closing the ECR sale, the Company retained a noncontrolling interest (with significant influence) in People & Places Solutions ("P&PS")-related activities in one international legal entity acquired by Worley. The fair value of the Company’s retained interest in the net assets and liabilities of this entity was estimated at $33.0 million and recorded at closing. For another international legal entity, the closing and transfer of ECR-related assets to Worley were set to occur at a future date. At the time of the ECR sale, the Company allocated proceeds received to these deferred closing items on a relative fair value basis and recognized a deferred gain of $34.4 million. During the second fiscal quarter of 2020, the delayed transfer of the ECR-related assets and liabilities of these two international entities occurred, and as a result, previously deferred gain amounts were recognized. In addition to consideration received for the sale of the business, the proceeds received included advanced consideration for the Company to deliver IT application and related hardware assets at a future date (“IT Migration Date”) to Worley upon completion of the interim transition services, described further below. This deliverable of IT assets was considered to be a separate element of the ECR business sale transaction, and accordingly, we allocated a portion of the proceeds received of $95.3 million on a relative fair value basis to this separate deliverable and recognized deferred income. Upon completion and acceptance of this deliverable by Worley in December 2019, the deferred proceeds were recognized in income, along with expenses associated with any costs incurred and deferred by the Company for this deliverable. Investment in Worley Stock As discussed above, subsequent to the ECR sale, the Company holds 51.4 million in ordinary shares of Worley. Dividend income and unrealized gains and losses on changes in fair value of Worley shares are recognized in miscellaneous income (expense), net in continuing operations. The Company's investment in Worley is measured at fair value through net income as it is an equity investment with a readily determinable fair value based on quoted market prices and is $450.1 million at July 2, 2021 and $347.5 million at October 2, 2020. For the three months ended July 2, 2021 and June 26, 2020, the Company recognize d $36.8 million and $131.4 million, respectively in gains associated with share price and currency changes on this investment. For the nine months ended July 2, 2021 and June 26, 2020, the Company recognize d a gain of $102.6 million and a loss o f $138.9 million, respectively, associated with share price and currency changes on this investment. The nine months ended July 2, 2021 include Worley stock dividends of $9.8 million and for the nine months ended June 26, 2020, $7.7 million. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input. Transition Service Agreement Upon closing of the ECR sale, the Company entered into a Transition Services Agreement (the "TSA") with Worley pursuant to which the Company, on an interim basis, provided various services to Worley, including executive consultation, corporate, information technology, and project services. The initial term of the TSA began immediately following closing of the ECR sale on April 26, 2019 and expired in April 2020, although the parties mutually agreed to extend certain of the services for additional time periods beyond the initial term. Pursuant to the terms of the TSA, the Company received payments for the interim services which approximate costs incurred to perform the services. The Company has recognized costs recorded in SG&A expense incurred to perform the TSA, offset b y $0.2 million and $15.2 million in TSA related income for such services that is reported in miscellaneous income (expense) for the nine months ended July 2, 2021 and June 26, 2020, respectively, before inclusion of certain incremental outside service support costs agreed to be shared equally by the parties

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

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 360 -URI http://asc.fasb.org/topic&trid=2155823 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 205 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2122178 + Details
Name: | us-gaap_DisposalGroupsIncludingDiscontinuedOperationsDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration