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Discontinued Operations, Goodwill and Intangible Assets | 6 Months Ended
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Mar. 31, 2020
Discontinued Operations, Goodwill and Intangible Assets |
Discontinued Operations, Goodwill and Intangible Assets | 3. Discontinued Operations, Goodwill and Intangible Assets ​ On October 12, 2019, the Company entered into a purchase and sale agreement with Maverick Purchaser Sub, LLC (“Purchaser”), an affiliate of American Securities LLC and Lindsay Goldberg LLC. Per the terms of that agreement, the Company agreed to transfer the assets and liabilities constituting its Management Services business to the Purchaser. The transaction with the Purchaser closed on January 31, 2020. The Company expects to receive total cash consideration of $2.25 billion and contingent consideration of approximately $120 million attributable to certain claims related to prior work and engagements. As a result of the sale, the Company recognized a pre-tax gain of $147.0 million, which was included in the net income from discontinued operations in the Consolidated Statement of Operations for the three-month period ending March 31, 2020. ​ Additionally, in the first quarter of fiscal 2020, management approved a plan to dispose via sale the Company’s self-perform at-risk construction businesses within the next year. These businesses include the Company’s civil infrastructure, power, and oil and gas construction businesses that were previously reported in the Company’s Construction Services segment. After consideration of the relevant facts, the Company concluded the assets and liabilities of its Management Services business and its self-perform at-risk construction businesses met the criteria for classification as held for sale. Additionally, the Company concluded the actual and proposed disposal activities represented a strategic shift that will have a major effect on the Company’s operations and financial results and qualified for presentation as discontinued operations in accordance with ASC 205-20. Accordingly, the financial results of the Management Services business and the self-perform at-risk construction businesses are presented in the Consolidated Statement of Operations as discontinued operations for all periods presented. Current and non-current assets and liabilities of these businesses are presented in the Consolidated Balance Sheet as assets and liabilities held for sale for both periods presented. Interest expense allocated to discontinued operations represents interest expenses for the discontinued operations’ finance leases and term loans, which were required to be settled upon the sale of the Management Services business. ​ During the second quarter of fiscal 2020, the Company identified indicators of impairment for the self-perform at-risk construction business. Specifically, the Company's forecast for its Oil and Gas business decreased significantly from the prior period due primarily to the volatility in global oil prices, which negatively impacted forecasts for future revenues and earnings. As a result, the Company assessed the Oil and Gas business for impairment and determined the fair value of the disposal group was lower than its carrying value. Fair value was estimated using Level 3 inputs, such as forecasted cash flows. Accordingly, the Company recorded impairment losses for that business's goodwill of approximately $83.6 million and intangible assets of approximately $5.7 million. These impairment losses were recorded in net income from discontinued operations on the Consolidated Statement of Operations. ​ The following table represents summarized balance sheet information of assets and liabilities held for sale (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | March 31, |  | September 30,
​ | ​ | 2020 | ​ | 2019
​ | ​ | ​ | ​ | ​ | ​ | ​
Cash and cash equivalents | ​ | $ | 131.3 | ​ | $ | 194.7
Receivables and contract assets | ​ |  | 646.5 | ​ |  | 1,326.6
Other | ​ |  | 22.0 | ​ |  | 112.0
Current assets held for sale | ​ | $ | 799.8 | ​ | $ | 1,633.3
​ | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment, net | ​ | $ | 113.0 | ​ | $ | 153.8
Goodwill | ​ |  | — | ​ |  | 1,798.5
Other | ​ |  | 225.7 | ​ |  | 364.7
Non-current assets held for sale | ​ | $ | 338.7 | ​ | $ | 2,317.0
​ | ​ | ​ | ​ | ​ | ​ | ​
Accounts payable and accrued expenses | ​ | $ | 448.7 | ​ | $ | 1,056.0
Contract liabilities | ​ |  | 78.6 | ​ |  | 88.9
Other | ​ |  | 24.6 | ​ |  | 18.8
Current liabilities held for sale | ​ | $ | 551.9 | ​ | $ | 1,163.7
​ | ​ | ​ | ​ | ​ | ​ | ​
Long term liabilities held for sale | ​ | $ | 97.1 | ​ | $ | 314.0
​ The following table represents summarized income statement information of discontinued operations (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended |  | Six months ended
​ |  | March 31, |  | March 31, |  | March 31, |  | March 31,
​ | ​ | 2020 | ​ | 2019 |  | 2020 | ​ | 2019
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Revenue | ​ | $ | 811.5 | ​ | $ | 1,627.4 | ​ | $ | 2,314.3 | ​ | $ | 3,308.6
Cost of revenue | ​ |  | 882.5 | ​ |  | 1,576.9 | ​ | ​ | 2,356.0 | ​ | ​ | 3,210.9
Gross (loss) profit | ​ |  | (71.0) | ​ |  | 50.5 | ​ | ​ | (41.7) | ​ | ​ | 97.7
Equity in earnings of joint ventures | ​ |  | (21.7) | ​ |  | 9.4 | ​ | ​ | (16.9) | ​ | ​ | 15.3
Gain on disposal activities | ​ | ​ | 147.0 | ​ | ​ | — | ​ | ​ | 147.0 | ​ | ​ | —
Transaction costs | ​ | ​ | (41.4) | ​ | ​ | — | ​ | ​ | (41.4) | ​ | ​ | —
Impairment of goodwill and intangibles assets | ​ | ​ | (89.3) | ​ | ​ | — | ​ | ​ | (89.3) | ​ | ​ | —
(Loss) income from operations | ​ |  | (76.4) | ​ |  | 59.9 | ​ | ​ | (42.3) | ​ | ​ | 113.0
Other income | ​ |  | 0.4 | ​ |  | 0.4 | ​ | ​ | 1.8 | ​ | ​ | 1.2
Interest expense | ​ |  | (25.9) | ​ |  | (16.5) | ​ | ​ | (38.7) | ​ | ​ | (33.3)
(Loss) income before taxes | ​ |  | (101.9) | ​ |  | 43.8 | ​ | ​ | (79.2) | ​ | ​ | 80.9
Income tax expense | ​ |  | 28.8 | ​ |  | 8.6 | ​ | ​ | 33.4 | ​ | ​ | 17.5
Net (loss) income from discontinued operations | ​ | $ | (130.7) | ​ | $ | 35.2 | ​ | $ | (112.6) | ​ | $ | 63.4
​ The significant components included in the Consolidated Statement of Cash Flows for the discontinued operations are as follows (in millions): ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended |  | Six months ended
​ |  | March 31, |  | March 31, |  | March 31, |  | March 31,
​ | ​ | 2020 | ​ | 2019 |  | 2020 | ​ | 2019
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Depreciation and amortization: |  | ​ |  |  | ​ |  | ​ | ​ | ​ | ​ | ​ | ​
Property and equipment | ​ | $ | — | ​ | $ | 6.0 | ​ | $ | 4.6 | ​ | $ | 13.7
Intangible assets and capitalized debt issuance costs | ​ | $ | 18.7 | ​ | $ | 16.5 | ​ | $ | 31.5 | ​ | $ | 32.9
Payments for capital expenditures | ​ | $ | (6.0) | ​ | $ | (5.0) | ​ | $ | (14.2) | ​ | $ | (9.2)
​ The changes in the carrying value of goodwill by reportable segment for the six months ended March 31, 2020 were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | Foreign |  | ​ | ​
​ | ​ | September 30, | ​ | Exchange | ​ | March 31,
​ | ​ | 2019 | ​ | Impact | ​ | 2020
​ | ​ | (in millions)
Americas | ​ | $ | 2,623.0 | ​ | $ | (9.9) | ​ | $ | 2,613.1
International | ​ |  | 853.8 | ​ |  | (20.0) | ​ |  | 833.8
Total | ​ | $ | 3,476.8 | ​ | $ | (29.9) | ​ | $ | 3,446.9
​ The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of March 31, 2020 and September 30, 2019, included in intangible assets—net, in the accompanying consolidated balance sheets, were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | March 31, 2020 | ​ | September 30, 2019 | ​ | ​ | ​ | ​
​ | ​ | Gross | ​ | Accumulated | ​ | Intangible | ​ | Gross | ​ | Accumulated | ​ | Intangible | ​ | Amortization
​ |  | Amount |  | Amortization |  | Assets, Net |  | Amount |  | Amortization |  | Assets, Net |  | Period
​ | ​ | (in millions) | ​ | (years)
Backlog and customer relationships | ​ | $ | 661.7 | ​ | $ | (574.1) | ​ | $ | 87.6 | ​ | $ | 661.4 | ​ | $ | (561.8) | ​ | $ | 99.6 |  | 1 | - | 11
​ Amortization expense of acquired intangible assets included within cost of revenue was $12.3 million and $12.7 million for the six months ended March 31, 2020 and 2019, respectively. The following table presents estimated amortization expense of existing intangible assets for the remainder of fiscal 2020 and for the succeeding years: ​
​ | ​ | ​ | ​
Fiscal Year |  | (in millions)
2020 (six months remaining) | ​ | $ | 11.3
2021 | ​ |  | 20.1
2022 | ​ |  | 19.3
2023 | ​ |  | 18.5
2024 | ​ |  | 17.4
Thereafter | ​ |  | 1.0
Total | ​ | $ | 87.6
​

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