Discontinued Operations - Sale of Energy, Chemicals and Resources ("ECR") Business

On October 21, 2018, Jacobs and WorleyParsons Limited ("Buyer"), a company incorporated in Australia, entered into a Stock and Asset Purchase Agreement pursuant to which Buyer agreed to acquire the Company’s ECR business for a purchase price of $3.3 billion consisting of (i) $2.6 billion in cash plus (ii) 58.2 million ordinary shares of the Buyer, subject to adjustments for changes in working capital and certain other items. The Transaction closed on April 26, 2019.

As a result of the Transaction and all relevant facts, the Company concluded that the assets and liabilities sold in the Transaction (the "Disposal Group"), which represents our entire ECR business, met the criteria to be classified as held for sale beginning in the first fiscal quarter of 2019 in accordance with U.S. GAAP. Furthermore, we determined that the disposal group should be reported as discontinued operations in accordance with ASC 210-05, Discontinued Operations because their disposal represents a strategic shift that will have 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. Furthermore, current and non-current assets and liabilities of the Disposal Group are reflected in the unaudited Consolidated Balance Sheets for both periods presented.

Amounts reflected below as of September 28, 2018 include certain reclassifications to amounts previously disclosed in our first quarter 2019 Form 10-Q in order to conform to the current quarter classifications of assets and liabilities held for sale based on the current terms of the sale transaction. Amounts classified as of September 28, 2018 include an increase to cash and cash equivalents of $137.0 million and a reduction to contract liabilities of $65.0 million. Subsequent to the first quarter of fiscal 2019, it was determined that additional cash remain with ECR entities being sold, an equal amount of which will increase the purchase price.

The Company incurred approximately $2.3 million and $8.6 million in related transaction costs (mainly professional service fees) for the ECR sale during the three and six month periods ended March 29, 2019.

Summarized Financial Information of Discontinued Operations

The following table represents earnings (loss) from discontinued operations, net of tax (in thousands):



	Three Months Ended						For the Six Months Ended
	March 29, 2019			March 30, 2018			March 29, 2019			March 30, 2018
Revenues	$	1,161,083		$	1,064,733		$	2,325,790		$	2,031,045
Direct cost of contracts	(999,944		)	(898,292		)	(1,995,550		)	(1,724,795		)
Gross profit	161,139			166,441			330,240			306,250
Selling, general and administrative expenses	(202,590		)	(94,959		)	(293,600		)	(188,505		)
Operating Profit (Loss)	(41,451		)	71,482			36,640			117,745
Total other (expense) income, net	(34,413		)	2,034			(32,293		)	4,390
Earnings (Loss) Before Taxes from Discontinued Operations	(75,864		)	73,516			4,347			122,135
Income Tax Benefit (Expense)	18,858			(18,379		)	(1,194		)	(30,534		)
Net Earnings (Loss) of the Group from Discontinued Operations	$	(57,006	)	$	55,137		$	3,153		$	91,601

Selling, general and administrative expenses and total other (expense) income, net in the table above include amounts recorded in connection with charges recognized in the second quarter of 2019 related to the Nui Phao ("NPMC") legal matter described in Note 18.

The following tables represent the assets and liabilities held for sale (in thousands):



	March 29, 2019		September 28, 2018
Cash and cash equivalents	$	176,090	$	158,488
Receivables and contract assets	1,087,492		1,040,996
Prepaid expenses and other	33,848		37,200
Current assets held for sale	$	1,297,430	$	1,236,684



Property, Equipment and Improvements, net	$	199,207	$	199,847
Goodwill	1,291,794		1,308,000
Intangibles, net	82,396		83,005
Miscellaneous	101,615		110,838
Noncurrent assets held for sale	$	1,675,012	$	1,701,690



Notes payable	$	1,118	$	1,782
Accounts payable	283,481		351,482
Accrued liabilities	304,454		321,627
Contract liabilities	142,105		81,679
Current liabilities held for sale	$	731,158	$	756,570



Long-term Debt	$	1,384	$	2,710
Other Deferred Liabilities	$	121,609	$	147,894
Noncurrent liabilities held for sale	$	122,993	$	150,604

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



	For the Six Months Ended
	March 29, 2019			March 30, 2018
Depreciation and amortization:
Property, equipment and improvements	$	2,110		$	13,899
Intangible assets	$	614		$	6,296
Additions to property and equipment	$	(2,571	)	$	(11,346	)
Stock based compensation	$	7,220		$	4,866