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Discontinued Operations, Goodwill and Intangible Assets

3 Months Ended

Dec. 31, 2022

Discontinued Operations, Goodwill and Intangible Assets

Discontinued Operations, Goodwill and Intangible Assets

3. Discontinued Operations, Goodwill and Intangible Assets

In the first quarter of fiscal 2020, management approved a plan to dispose of via sale the Company’s self-perform at-risk construction businesses. 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 self-perform at-risk construction businesses met the criteria for classification as held for sale. The Company concluded the actual and proposed disposal activities represented a strategic shift that would have a major effect on the Company’s operations and financial results and qualified for presentation as discontinued operations in accordance with FASB ASC 205-20. Accordingly, the financial results of 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 not sold as of the balance sheet date are presented in the Consolidated Balance Sheets as assets and liabilities held for sale for both periods presented.

The Company completed the sale of its civil infrastructure construction business to affiliates of Oroco Capital in the second quarter of fiscal 2021. In the first quarter of fiscal 2022, the Company recorded an additional $40.0 million loss primarily related to revisions of estimates for its working capital obligation to be paid and a contingent consideration receivable. Under the terms of the sale agreement, the Company made the required cash payments and delivered the cash and cash equivalents, including cash in consolidated joint ventures, on the balance sheet at closing. As a result, the Company recorded the net cash impact of the sale as a use of cash in the investing section of its statement of cash flows.

On January 28, 2022, the Company completed the sale of its oil and gas construction business to affiliates of Graham Maintenance Services LP for a purchase price of $14 million, subject to cash, debt and working capital adjustments. The Company recorded a pre-tax gain of approximately $3.0 million on the sale, net of transaction costs.

The following table represents summarized balance sheet information of assets and liabilities held for sale (in millions):


	December 31,		September 30,
	2022		2022

Cash and cash equivalents	$	2.3	$	4.6
Receivables and contract assets		62.3		66.2
Other		8.0		8.2
Current assets held for sale	$	72.6	$	79.0

Property and equipment, net	$	12.0	$	8.0
Write-down of assets to fair value less cost to sell		(12.0)		(8.0)
Non-current assets held for sale	$	—	$	—

Accounts payable and accrued expenses	$	43.0	$	49.2
Other		—		—
Current liabilities held for sale	$	43.0	$	49.2

Long-term liabilities held for sale	$	0.3	$	0.2

The following table represents summarized income statement information of discontinued operations (in millions):


	Three months ended
	December 31,		December 31,
	2022		2021

Revenue	$	41.7	$	127.1
Cost of revenue		40.3		145.3
Gross profit (loss)		1.4		(18.2)
Equity in earnings of joint ventures		(1.7)		(3.4)
Loss on disposal activities		—		(42.1)
Transaction costs		(0.2)		(2.3)
Loss from operations		(0.5)		(66.0)
Interest expense		—		(0.1)
Loss before taxes		(0.5)		(66.1)
Income tax benefit		(0.1)		(4.1)
Net loss from discontinuing operations	$	(0.4)	$	(62.0)

The significant components included in our Consolidated Statement of Cash Flows for the discontinued operations are as follows (in millions):

The changes in the carrying value of goodwill by reportable segment for the three months ended December 31, 2022 were as follows:


			Foreign
	September 30,		Exchange		December 31,
	2022		Impact		2022

	(in millions)
Americas	$	2,610.7	$	3.5	$	2,614.2
International		770.1		40.4		810.5
Total	$	3,380.8	$	43.9	$	3,424.7

The gross amounts and accumulated amortization of the Company’s acquired identifiable intangible assets with finite useful lives as of December 31, 2022 and September 30, 2022, included in intangible assets—net, in the accompanying consolidated balance sheets, were as follows:


	December 31, 2022						September 30, 2022
	Gross		Accumulated		Intangible		Gross		Accumulated		Intangible		Amortization
	Amount		Amortization		Assets, Net		Amount		Amortization		Assets, Net		Period

	(in millions)												(years)
Customer relationships	$	663.4	$	(632.1)	$	31.3	$	663.0	$	(627.4)	$	35.6	1 - 11

Amortization expense of acquired intangible assets included within cost of revenue was $4.7 million for the three months ended December 31, 2022 and 2021. The following table presents estimated amortization expense of existing intangible assets for the remainder of fiscal 2023 and for the succeeding years:


Fiscal Year	(in millions)
2023 (nine months remaining)	$	13.5
2024		17.2
2025		0.6
Total	$	31.3

Three months ended

December 31,

December 31,

Payments for capital expenditures