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Restructuring and Other Charges
9 Months Ended
Jun. 30, 2023
Restructuring and Related Activities [Abstract]  
Restructuring and Other Charges Restructuring and Other Charges
During fiscal 2023, the Company implemented certain initiatives relating to the CMS separation, the activities of which are expected to continue through fiscal 2024, and restructuring related to the DVS segment reorganization and our investment in PA Consulting, the activities of which are expected to continue through fiscal 2023.
During fiscal 2022, the Company implemented certain restructuring and integration initiatives relating to the StreetLight and BlackLynx acquisitions, the activities of which are expected to be substantially completed before the end of fiscal 2023. Also, during fiscal 2022 and continuing into fiscal 2023, the Company implemented further real estate rescaling efforts that were associated with its fiscal 2020 transformation program relating to real estate and other staffing initiatives. These initiatives are expected to continue through the remainder of fiscal 2023.
During fiscal 2021, the Company implemented certain restructuring and integration initiatives relating to the acquisition of Buffalo Group LLC ("Buffalo Group") as well as integration related activities associated with our PA Consulting investment. The activities of the Buffalo Group initiative are substantially completed and the activities of the PA Consulting initiative are expected to end before the end of fiscal 2025.
During fiscal 2019 and continuing into fiscal 2020, the Company implemented certain restructuring, separation and integration initiatives associated with the ECR sale, the acquisition of KeyW Holding Corporation ('KeyW"), and other related cost reduction initiatives. Additionally, in fiscal 2020, the Company implemented certain restructuring and
integration initiatives associated with the acquisition of John Wood Group's nuclear business. The restructuring activities and related costs were comprised mainly of separation and lease abandonment and sublease programs, while the separation and 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 ECR-business separation. The activities of these initiatives have been substantially completed.
As part of the Company's acquisition of CH2M Hill Companies, Ltd. ("CH2M") during fiscal 2018, the Company implemented certain restructuring plans that were comprised mainly of severance and lease abandonment programs as well as integration activities involving the engagement of professional services and internal personnel dedicated to the Company's integration management efforts. The activities of these initiatives have been substantially completed.
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 by reportable segment in connection with the CH2M, KeyW, John Wood Group's nuclear business, Buffalo Group, StreetLight and BlackLynx acquisitions, the PA Consulting investment, the ECR sale, the CMS separation, the DVS segment reorganization and the Company's transformation initiatives relating to real estate and other staffing programs for the three and nine months ended June 30, 2023 and July 1, 2022 (in thousands):
Three Months EndedNine Months Ended
June 30, 2023July 1, 2022June 30, 2023July 1, 2022
Critical Mission Solutions$(1,128)$(255)$2,136 $4,361 
People & Places Solutions703 25 33,889 61,865 
Divergent Solutions100 — 5,312 — 
PA Consulting17,128 759 17,128 2,475 
Corporate14,109 4,048 19,731 113,399 
Total$30,912 $4,577 $78,196 $182,100 
Amounts included in:
Operating profit (mainly SG&A) (1)$31,184 $4,707 $79,129 $192,782 
Other Income, net (2)(272)(130)(933)(10,682)
$30,912 $4,577 $78,196 $182,100 

(1)The three and nine months ended June 30, 2023 included $17.2 million in restructuring and other charges relating to the Company's investment in PA Consulting (primarily employee separation costs) and $13.4 million relating to the separation activities (mainly professional services) around the CMS separation. Included in the nine month period ended June 30, 2023 and July 1, 2022 were approximately $40.0 million and $77.0 million, respectively, in charges associated mainly with real estate impairments and related charges. Also included in the nine month period ended July 1, 2022 was $91.3 million related to the final pre-tax settlement of the Legacy CH2M Matter (defined below), net of previously recorded reserves and $24.5 million in transformation and other charges, the majority of which related to People and Places Solutions.
(2)The nine month periods ended June 30, 2023 and July 1, 2022 included gains of $0.9 million and $7.1 million, respectively, related to lease terminations.
The activity in the Company’s accruals for Restructuring and other charges for the nine months ended June 30, 2023 is as follows (in thousands):
Balance at September 30, 2022
$4,137 
Net Charges (Credits) (1)39,088 
Payments and other(17,127)
Balance at June 30, 2023$26,098 
(1)    Excludes $39.1 million in charges associated mainly with real estate related impairments and other transformation activities described above during the nine months ended June 30, 2023.
The following table summarizes the Restructuring and other charges by major type of costs for the three and nine months ended June 30, 2023 and July 1, 2022 (in thousands):
Three Months EndedNine Months Ended
June 30, 2023July 1, 2022June 30, 2023July 1, 2022
Lease Abandonments and Impairments$803 $(32)$38,076 $67,805 
Voluntary and Involuntary Terminations17,925 (76)26,434 5,035 
Outside Services12,168 4,337 13,646 20,513 
Other (1)16 348 40 88,747 
Total$30,912 $4,577 $78,196 $182,100 
(1) The nine month period ended July 1, 2022 amounts are comprised mainly of $91.3 million in other charges related to the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves.
Cumulative amounts incurred to date under our various Restructuring and other activities described above by each major type of cost as of June 30, 2023 are as follows (in thousands):
Lease Abandonments and Impairments$425,678 
Voluntary and Involuntary Terminations176,811 
Outside Services329,979 
Other208,305 
Total$1,140,773