DALLAS, Nov. 25, 2019 /PRNewswire/ -- Jacobs
Engineering Group Inc. (NYSE: JEC) today announced its financial
results for the fiscal fourth quarter and fiscal year ended
September 27, 2019.
Q4 Financial Highlights:
- Q4 2019 revenue of $3.4
billion1 grew 13% year-over-year; up 15% on a net
revenue basis
- Q4 2019 EPS1 of $0.16
and adjusted EPS of $1.48, up 29% on
an adjusted basis year-over-year
- Executed accelerated share repurchase of $250 million during Q4 to be completed in
December 2019
- Paid $390 million in cash taxes
reflected in cash flow from operations related to the $935 million gain on the Q3 close of $3.4 billion sale of Energy, Chemicals and
Resources (ECR) business
Fiscal Year Highlights:
- FY19 portfolio transformation continued with completion of the
sale of ECR, $903 million acquisition
of KeyW and announcement of the approximately $300 million pending acquisition of Wood Nuclear
PLC
- FY19 revenue growth of 20% and pro forma net revenue growth of
11%
- Operating profit growth of 4% and adjusted EBITDA growth of
22%
- FY19 EPS1 of $2.09 and
adjusted EPS of $5.05, up 30% on an
adjusted basis year-over-year
- FY20 outlook initiated for $1,050
million to $1,150 million
adjusted EBITDA2, representing double-digit growth for
adjusted EBITDA and EPS2 versus FY19
Brand Launch Highlights:
- Strategic transformation further strengthened by launch of new
brand that focuses employees to redefine what is possible by
embracing innovative thinking and exploration
- Celebrates Jacobs' inclusive and diverse perspectives; inspires
employees to advance the communities where they live, work and
play
Fiscal 2019 was a year of transformation and growth at Jacobs.
The company updated its strategy and financial targets at its
Investor Day in February, completed the divestiture of its Energy,
Chemicals and Resources business in April, completed the
acquisition of KeyW in June, and announced its acquisition of
Wood's nuclear business in August. All of these actions are in line
with the company's strategic focus in higher value solutions.
Concurrent with its proactive portfolio transformation, Jacobs also
made inroads in the investment in its people, culture and
inclusion.
Jacobs launched its new brand globally today, culminating its
transition from engineering and construction to a global
technology-forward solutions company, resulting both in a planned
name change for the company to Jacobs Solutions Inc. and an NYSE
stock ticker symbol change to "J". Trading under this symbol will
be effective Dec. 10, 2019. Jacobs'
lines of business are also changing names to better reflect
outcome-focused solutions for their customers; Aerospace,
Technology and Nuclear is changing to Critical Mission Solutions,
and Buildings, Infrastructure and Advanced Facilities is changing
to People & Places Solutions. These name changes have no impact
on reported financials, line of business leadership or customer
relationships.
In a first for the company, the earnings call is taking place at
its new London flagship office in
the Cottons Centre, a Jacobs-designed office on the banks of the
Thames. The new office features flexible workspace for up to 1,000
employees. This innovative office pilots many of Jacobs' digital
consulting solutions, delivers some of the world's most iconic
projects and is the catalyst for further expansion in Europe and the Middle East.
"Our team has demonstrated strong execution by exceeding our
three-year revenue and operating profit guidance that was
established at our inaugural investor day in 2016. Our
transformed portfolio is well aligned to major secular growth
trends such as environmental resiliency, IT/OT convergence and
national security. Today we embrace a future of infinite
possibilities with a new brand that reflects who we are and where
we are going. We are adopting a new tagline - Challenging today.
Reinventing tomorrow. - to capture the shared passion, pride and
drive of our people as we work with our clients and partners to
solve some of the world's biggest challenges," said Chair and CEO
Steve Demetriou. "And as we do so,
our values continue to drive our behaviors, relationships and
outcomes: We do things right. We challenge the accepted. We aim
higher. We live inclusion."
Jacobs' CFO, Kevin Berryman,
added, "It's clear the strategic actions we have taken are
resulting in a high-performance culture with strong execution
discipline. This is demonstrated by our fiscal 2019 financial
results, including solid operating profit growth and achieving
results at the high end of our original guidance, leading to
double-digit adjusted EBITDA growth. During the fourth quarter, we
opportunistically initiated a $250
million accelerated share repurchase program, culminating in
more than $850 million in fiscal 2019
buy-backs. We are initiating a fiscal 2020 outlook of
$1.05 billion to $1.15 billion in adjusted EBITDA2 and
are off to a strong start in achieving our 2021 revenue and
profitability targets."
1Reflects continuing operations as reported in
accordance with GAAP.
2Reconciliation of the adjusted EPS outlook and
adjusted EBITDA outlook for the full fiscal year to the most
directly comparable GAAP measure is not available without
unreasonable efforts because the Company cannot predict with
sufficient certainty all the components required to provide such
reconciliation, including with respect to the costs and charges
relating to transaction expenses, restructuring and integration to
be incurred in fiscal 2020.
Fourth Quarter
Review
|
|
|
Fiscal 4Q
2019
|
Fiscal 4Q
2018
|
Change
|
Revenue
|
$3.4
billion
|
$3.0
billion
|
$0.4
billion
|
Net
Revenue
|
$2.7
billion
|
$2.3
billion
|
$0.4
billion
|
GAAP Net Earnings
from Continuing Operations
|
$22
million
|
$(77)
million
|
$99
million
|
GAAP Earnings Per
Diluted Share (EPS) from Continuing Operations
|
$0.16
|
($0.54)
|
$0.70
|
Adjusted Net
Earnings from Continuing Operations
|
$201
million
|
$165
million
|
$36
million
|
Adjusted EPS from
Continuing Operations
|
$1.48
|
$1.14
|
$0.34
|
The company's adjusted net earnings and adjusted EPS for the
fourth quarter of fiscal 2019 and fiscal 2018 exclude the charges
and costs set forth in the table below. For additional information
regarding these adjustments and a reconciliation of adjusted net
earnings and adjusted EPS to net earnings and EPS, respectively,
refer to the section entitled "Non-GAAP Financial Measures" at the
end of this release.
|
Fiscal 4Q
2019
|
Fiscal 4Q
2018
|
After-tax
restructuring and other charges ($106.4 million and $30.9 million
for the fiscal 2019 and 2018 periods, respectively, before income
taxes)
|
$83 million ($0.61
per diluted
share)
|
$22 million ($0.15
per diluted
share)
|
After-tax transaction
costs incurred in connection with the closing of the CH2M and KeyW
acquisitions and pending acquisition of John Wood Group Nuclear
business ($7.1 million and $4.1 million for the fiscal 2019 and
2018 periods, respectively before income taxes)
|
$5 million ($0.04 per
diluted
share)
|
$2 million ($0.01 per
diluted
share)
|
Other adjustments
include:
(a) addback of
amortization of intangible assets of $23.4 million and $19.1
million in the 2019 and 2018 periods, respectively,
(b) the allocation to
discontinued operations of estimated stranded corporate costs of
$0.0 million and $6.4 million in the 2019 and 2018 periods,
respectively, that will be reimbursed or otherwise eliminated in
connection with the sale of the ECR business,
(c) the
reclassification of revenues under the Company's Transition
Services Agreement (TSA) with Worley of $21.3 million included in
other income for U.S. GAAP reporting purposes to SG&A and the
exclusion of $0.7 million in remaining unreimbursed costs
associated with the TSA during the fiscal 2019 fourth
quarter,
(d) the removal of
$64.8 million in fair value adjustments and dividend income related
to our investment in Worley stock and certain foreign currency
revaluations relating to ECR sale proceeds in the 2019
period,
(e) the allocation to
discontinued operations of estimated interest expense amounts in
2019 and 2018 related to long-term debt that has been paid down in
connection with the sale of the ECR business of $0.0 million and
$17.8 million, respectively,
(f) the add-back of
charges resulting from the revaluation of certain deferred tax
assets/liabilities in connection with U.S. tax reform of $24.0 and
$184.5 million in the 2019 and 2018 periods and
(g) associated income
tax expense adjustments for the above pre-tax adjustment
items.
|
$91 million ($0.67
per diluted
share)
|
$218 million ($1.51
per diluted
share)
|
Adjusted EPS from
Continuing Operations
|
$201 million ($1.48
per diluted
share)
|
$165 million ($1.14
per diluted
share)
|
|
(note: earnings
per share amounts may not add due to rounding)
|
Fiscal fourth quarter 2019 adjusted earnings per share from
continuing operations reflect an adjusted effective tax rate of
23.4%, excluding a $0.09 benefit from
discrete tax items.
Fiscal 2019
Review
|
|
|
Fiscal
2019
|
Fiscal
2018
|
Change
|
Revenue
|
$13
billion
|
$11
billion
|
$2 billion
|
Net
Revenue
|
$10
billion
|
$8 billion
|
$2 billion
|
GAAP Net Earnings
from Continuing Operations
|
$291
million
|
$(4)
million
|
$295
million
|
GAAP Earnings Per
Diluted Share (EPS) from Continuing Operations
|
$2.09
|
($0.03)
|
$2.12
|
Adjusted Net
Earnings from Continuing Operations
|
$704
million
|
$540
million
|
$164
million
|
Adjusted EPS from
Continuing Operations
|
$5.05
|
$3.87
|
$1.18
|
The company's adjusted net earnings and adjusted EPS for fiscal
2019 and fiscal 2018 exclude the charges and costs set forth in the
table below. For additional information regarding these adjustments
and a reconciliation of adjusted net earnings and adjusted EPS to
net earnings and EPS, respectively, refer to the section entitled
"Non-GAAP Financial Measures" at the end of this release.
|
Fiscal
2019
|
Fiscal
2018
|
After-tax
restructuring and other charges ($311.5 million and $153.6 million
for the fiscal 2019 and 2018 periods, respectively, before income
taxes)
|
$244 million ($1.75
per diluted
share)
|
$113 million ($0.81
per diluted
share)
|
After-tax transaction
costs incurred in connection with the closing of the CH2M and KeyW
acquisitions and pending acquisition of John Wood Group Nuclear
business ($21.4 million and $82.2 million for the fiscal 2019 and
2018 periods, respectively before income taxes)
|
$16 million ($0.12
per diluted
share)
|
$61 million ($0.44
per diluted
share)
|
Other adjustments
include:
(a) addback of
amortization of intangible assets of $79.1 million and $68.1
million in the 2019 and 2018 periods, respectively,
(b) the allocation to
discontinued operations of estimated stranded corporate costs of
$14.8 million and $25.6 million in the 2019 and 2018 periods,
respectively, that will be reimbursed or otherwise eliminated in
connection with the sale of the ECR business,
(c) the
reclassification of revenues under the Company's Transition
Services Agreement (TSA) with Worley of $35.4 million included in
other income for U.S. GAAP reporting purposes to SG&A and the
exclusion of $3.9 million in remaining unreimbursed costs
associated with the TSA during the fiscal 2019 year,
(d) the allocation to
discontinued operations of estimated interest expense amounts in
2019 and 2018 related to long-term debt that has been paid down in
connection with the sale of the ECR business of $42.3 million and
$51.0 million, respectively,
(e) the removal of
$64.8 million in fair value adjustments and dividend income related
to our investment in Worley stock and certain foreign currency
revaluations relating to ECR sale proceeds in the 2019
period,
(f) the exclusion of
a $37 million one-time favorable adjustment in the 2019 period
associated with reduction of deferred income taxes for permanently
reinvested earnings from non-U.S. subsidiaries in connection with
the sale of the ECR business,
(g) the add-back of
charges resulting from the revaluation of certain deferred tax
assets/liabilities in connection with U.S. tax reform of $35.0
million and $259.2 million in the 2019 and 2018 periods,
respectively and other income tax adjustments of $1.5 million in
the current year and
(h) associated income
tax expense adjustments for the above pre-tax adjustment
items.
|
$153 million ($1.10
per diluted
share)
|
$371 million ($2.66
per diluted
share)
|
Adjusted EPS from
Continuing Operations
|
$704 million ($5.05
per diluted
share)
|
$540 million ($3.87
per diluted
share)
|
|
(note: earnings
per share amounts may not add due to rounding)
|
Fiscal year 2019 adjusted earnings per share from continuing
operations reflect an adjusted effective tax rate of 23.3%,
excluding benefits from discrete tax items of $0.32 cents per share.
Jacobs is hosting a conference call at 8:00 A.M. ET on
Monday November 25, 2019, which will
be webcast live at www.jacobs.com.
John Wood Group's Nuclear Business Acquisition
On August 20, 2019, Jacobs
announced that it has entered into an agreement to acquire John
Wood Group's Nuclear business for an enterprise value of £250
million (approx. $300 million) on a debt-free, cash-free
basis. The transaction is expected to close in the fiscal 2020
second quarter.
About Jacobs
At Jacobs, we're challenging today to reinvent tomorrow by
solving the world's most critical problems for thriving cities,
resilient environments, mission-critical outcomes, operational
advancement, scientific discovery and cutting-edge manufacturing,
turning abstract ideas into realities that transform the world for
good. With $13 billion in revenue and
a talent force of approximately 52,000, Jacobs provides a full
spectrum of professional services including consulting, technical,
scientific and project delivery for the government and private
sectors. Visit jacobs.com and connect with Jacobs on LinkedIn,
Twitter, Facebook and Instagram.
Forward-Looking Statements
Certain statements contained in this press release constitute
forward-looking statements as such term is defined in Section 27A
of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, and such statements
are intended to be covered by the safe harbor provided by the same.
Statements made in this press release that are not based on
historical fact are forward-looking statements. Although such
statements are based on management's current estimates and
expectations, and currently available competitive, financial, and
economic data, forward-looking statements are inherently uncertain,
and you should not place undue reliance on such statements as
actual results may differ materially. We caution the reader that
there are a variety of risks, uncertainties and other factors that
could cause actual results to differ materially from what is
contained, projected or implied by our forward-looking statements.
For a description of some additional factors that may occur that
could cause actual results to differ from our forward-looking
statements see our Annual Report on Form 10-K for the year ended
September 27, 2019, and in particular the discussions
contained therein under Item 1 - Business; Item 1A - Risk Factors;
Item 3 - Legal Proceedings; and Item 7 - Management's Discussion
and Analysis of Financial Condition and Results of Operations, as
well as the Company's other filings with the Securities and
Exchange Commission. The Company is not under any duty to
update any of the forward-looking statements after the date of this
press release to conform to actual results, except as required by
applicable law.
Financial
Highlights:
|
|
Results of
Operations (in thousands, except per-share data) (Quarterly data
unaudited):
|
|
|
For the Three Months
Ended
|
|
For the Years
Ended
|
|
September 27,
2019
|
|
September 28,
2018
|
|
September 27,
2019
|
|
September 28,
2018
|
Revenues
|
$
|
3,392,862
|
|
|
$
|
2,991,856
|
|
|
$
|
12,737,868
|
|
|
$
|
10,579,773
|
|
Direct cost of
contracts
|
(2,727,329)
|
|
|
(2,385,625)
|
|
|
(10,260,840)
|
|
|
(8,421,223)
|
|
Gross profit
|
665,533
|
|
|
606,231
|
|
|
2,477,028
|
|
|
2,158,550
|
|
Selling, general and
administrative expenses
|
(566,447)
|
|
|
(445,385)
|
|
|
(2,072,177)
|
|
|
(1,771,107)
|
|
Operating
Profit
|
99,086
|
|
|
160,846
|
|
|
404,851
|
|
|
387,443
|
|
Other Income
(Expense):
|
|
|
|
|
|
|
|
Interest
income
|
2,315
|
|
|
2,088
|
|
|
9,487
|
|
|
8,984
|
|
Interest
expense
|
(10,120)
|
|
|
(26,652)
|
|
|
(83,847)
|
|
|
(76,760)
|
|
Miscellaneous income
(expense), net
|
(37,744)
|
|
|
6,118
|
|
|
20,468
|
|
|
11,314
|
|
Total other (expense)
income, net
|
(45,549)
|
|
|
(18,446)
|
|
|
(53,892)
|
|
|
(56,462)
|
|
Earnings From
Continuing Operations Before Taxes
|
53,537
|
|
|
142,400
|
|
|
350,959
|
|
|
330,981
|
|
Income Tax Benefit
(Expense) for Continuing Operations
|
(24,124)
|
|
|
(215,402)
|
|
|
(36,954)
|
|
|
(325,632)
|
|
Net Earnings (Loss) of
the Group from Continuing Operations
|
29,413
|
|
|
(73,002)
|
|
|
314,005
|
|
|
5,349
|
|
Net Earnings (Loss) of
the Group from Discontinued Operations
|
120,378
|
|
|
41,579
|
|
|
559,214
|
|
|
167,793
|
|
Net Earnings (Loss) of
the Group
|
149,791
|
|
|
(31,423)
|
|
|
873,219
|
|
|
173,142
|
|
Net Earnings
Attributable to Noncontrolling Interests from Continuing
Operations
|
(7,467)
|
|
|
(3,995)
|
|
|
(23,045)
|
|
|
(9,534)
|
|
Net Earnings (Loss)
Attributable to Jacobs from Continuing Operations
|
21,946
|
|
|
(76,997)
|
|
|
290,960
|
|
|
(4,185)
|
|
Net Earnings
Attributable to Noncontrolling Interests from Discontinued
Operations
|
—
|
|
|
(2,123)
|
|
|
(2,195)
|
|
|
(177)
|
|
Net Earnings (Loss)
Attributable to Jacobs from Discontinued Operations
|
120,378
|
|
|
39,456
|
|
|
557,019
|
|
|
167,616
|
|
Net Earnings (Loss)
Attributable to Jacobs
|
$
|
142,324
|
|
|
$
|
(37,541)
|
|
|
$
|
847,979
|
|
|
$
|
163,431
|
|
Net Earnings Per
Share:
|
|
|
|
|
|
|
|
Basic Net Earnings
(Loss) from Continuing Operations Per Share
|
$
|
0.16
|
|
|
$
|
(0.54)
|
|
|
$
|
2.11
|
|
|
$
|
(0.03)
|
|
Basic Net Earnings
from Discontinued Operations Per Share
|
$
|
0.89
|
|
|
$
|
0.28
|
|
|
$
|
4.03
|
|
|
$
|
1.21
|
|
Basic Earnings (Loss)
Per Share
|
$
|
1.06
|
|
|
$
|
(0.26)
|
|
|
$
|
6.14
|
|
|
$
|
1.18
|
|
Diluted Net Earnings
(Loss) from Continuing Operations Per Share
|
$
|
0.16
|
|
|
$
|
(0.54)
|
|
|
$
|
2.09
|
|
|
$
|
(0.03)
|
|
Diluted Net Earnings
from Discontinued Operations Per Share
|
$
|
0.88
|
|
|
$
|
0.28
|
|
|
$
|
4.00
|
|
|
$
|
1.21
|
|
Diluted Earnings
(Loss) Per Share
|
$
|
1.04
|
|
|
$
|
(0.26)
|
|
|
$
|
6.08
|
|
|
$
|
1.18
|
|
Segment
Information (in thousands) (Quarterly data and Non-GAAP
unaudited):
|
|
|
For the Three Months
Ended
|
|
For the Years
Ended
|
|
September 27,
2019
|
|
September 28,
2018
|
|
September 27,
2019
|
|
September 28,
2018
|
Revenues from External
Customers:
|
|
|
|
|
|
|
|
Critical Mission
Solutions
|
$
|
1,300,137
|
|
|
$
|
1,069,062
|
|
|
$
|
4,551,162
|
|
|
$
|
3,725,365
|
|
People & Places
Solutions
|
2,092,725
|
|
|
1,922,794
|
|
|
8,186,706
|
|
|
6,854,408
|
|
Pass Through
Revenue
|
(702,786)
|
|
|
(650,547)
|
|
|
(2,543,358)
|
|
|
(2,254,477)
|
|
People & Places
Solutions Net Revenue
|
$
|
1,389,939
|
|
|
$
|
1,272,247
|
|
|
$
|
5,643,348
|
|
|
$
|
4,599,931
|
|
Total Revenue
|
$
|
3,392,862
|
|
|
$
|
2,991,856
|
|
|
$
|
12,737,868
|
|
|
$
|
10,579,773
|
|
Net
Revenue
|
$
|
2,690,076
|
|
|
$
|
2,341,309
|
|
|
$
|
10,194,510
|
|
|
$
|
8,325,296
|
|
|
|
|
|
|
For the Three Months
Ended
|
|
For the Years
Ended
|
|
September 27,
2019
|
|
September 28,
2018
|
|
September 27,
2019
|
|
September 28,
2018
|
Segment Operating
Profit:
|
|
|
|
|
|
|
|
Critical Mission
Solutions (1)
|
$
|
87,754
|
|
|
$
|
73,109
|
|
|
$
|
310,043
|
|
|
$
|
255,718
|
|
People & Places
Solutions (2)
|
198,929
|
|
|
153,091
|
|
|
714,394
|
|
|
527,900
|
|
Total Segment Operating
Profit
|
286,683
|
|
|
226,200
|
|
|
1,024,437
|
|
|
783,618
|
|
Other Corporate
Expenses (3)
|
(78,679)
|
|
|
(30,626)
|
|
|
(264,351)
|
|
|
(161,788)
|
|
Restructuring and Other
Charges
|
(103,487)
|
|
|
(31,207)
|
|
|
(337,066)
|
|
|
(153,951)
|
|
Transaction
Costs
|
(5,431)
|
|
|
(3,521)
|
|
|
(18,169)
|
|
|
(80,436)
|
|
Total U.S. GAAP
Operating Profit
|
99,086
|
|
|
160,846
|
|
|
404,851
|
|
|
387,443
|
|
Total other (expense)
income, net (4)
|
(45,549)
|
|
|
(18,446)
|
|
|
(53,892)
|
|
|
(56,462)
|
|
Earnings from
Continuing Operations Before Taxes
|
$
|
53,537
|
|
|
$
|
142,400
|
|
|
$
|
350,959
|
|
|
$
|
330,981
|
|
|
|
(1)
|
Includes $15.0
million in charges during the year ended September 28, 2018
associated with a legal matter.
|
|
|
(2)
|
Includes $25.0
million in charges associated with a certain project for the year
ended September 27, 2019.
|
|
|
(3)
|
Other corporate
expenses include costs that were previously allocated to the ECR
segment prior to discontinued operations presentation in connection
with the ECR sale in the approximate amounts of $- and $14.8
million for the three month period and year ended
September 27, 2019, respectively, and $6.4 million and $25.6
million for the three month period and year ended and
September 28, 2018, respectively. Other corporate expenses
also include intangibles amortization of $79.1 million and $68.1
million for the years ended September 27, 2019 and
September 28, 2018, respectively, and $23.4 million and $19.1
million for the three month periods ended September 27, 2019
and September 28, 2018, respectively.
|
|
|
(4)
|
Includes gain on the
settlement of the CH2M retiree medical plans of $0.4 and $35.0
million for the three month period and year ended
September 27, 2019. Includes the amortization of deferred
financing fees related to the CH2M acquisition of $1.8 million and
$3.2 million for the three month period and year ended
September 27, 2019, respectively, as well as $0.6 million and
$1.8 million for the three month period and year ended
September 28, 2018, respectively. Also includes revenues under
the Company's TSA agreement with Worley of $21.3 million and $35.4
million for the three month period and year ended
September 27, 2019 for which the related costs are included in
SG&A. This is offset by $64.8 million for fair value
adjustments (unrealized losses) and dividend income related to our
investment in Worley stock and certain foreign currency
revaluations relating to ECR sale proceeds for the three month
period and year ended September 27, 2019.
|
Other
Operational Information (in thousands):
|
|
Unaudited
|
For the Three Months
Ended
|
|
For the Years
Ended
|
Continuing
Operations
|
September 27,
2019
|
|
September 28,
2018
|
|
September 27,
2019
|
|
September 28,
2018
|
Depreciation
(pre-tax)
|
$
|
20,508
|
|
|
$
|
21,567
|
|
|
$
|
88,061
|
|
|
$
|
91,230
|
|
Amortization of
Intangibles (pre-tax)
|
$
|
22,752
|
|
|
$
|
18,352
|
|
|
$
|
78,484
|
|
|
$
|
67,404
|
|
Pass-Through Costs
Included in Revenues
|
$
|
702,786
|
|
|
$
|
650,547
|
|
|
$
|
2,543,358
|
|
|
$
|
2,254,477
|
|
Capital
Expenditures
|
$
|
29,307
|
|
|
$
|
26,240
|
|
|
$
|
126,773
|
|
|
$
|
75,215
|
|
Balance Sheet
(in thousands):
|
|
|
September 27,
2019
|
|
September 28,
2018
|
ASSETS
|
|
|
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
631,068
|
|
|
$
|
634,870
|
|
Receivables and
contract assets
|
2,840,209
|
|
|
2,513,934
|
|
Prepaid expenses and
other
|
639,539
|
|
|
171,096
|
|
Current assets held for
sale
|
952
|
|
|
1,236,684
|
|
Total current
assets
|
4,111,768
|
|
|
4,556,584
|
|
Property, Equipment and
Improvements, net
|
308,143
|
|
|
257,859
|
|
Other Noncurrent
Assets:
|
|
|
|
Goodwill
|
5,432,544
|
|
|
4,795,856
|
|
Intangibles,
net
|
665,076
|
|
|
572,952
|
|
Miscellaneous
|
918,202
|
|
|
760,854
|
|
Noncurrent assets held
for sale
|
26,978
|
|
|
1,701,690
|
|
Total other noncurrent
assets
|
7,042,800
|
|
|
7,831,352
|
|
|
$
|
11,462,711
|
|
|
$
|
12,645,795
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
Liabilities:
|
|
|
|
Short-term
debt
|
$
|
199,901
|
|
|
$
|
3,172
|
|
Accounts
payable
|
1,072,645
|
|
|
776,189
|
|
Accrued
liabilities
|
1,384,379
|
|
|
1,167,002
|
|
Contract
liabilities
|
414,208
|
|
|
442,760
|
|
Current liabilities
held for sale
|
2,573
|
|
|
756,570
|
|
Total current
liabilities
|
3,073,706
|
|
|
3,145,693
|
|
Long-term
Debt
|
1,201,245
|
|
|
2,144,167
|
|
Other Deferred
Liabilities
|
1,419,005
|
|
|
1,260,977
|
|
Noncurrent liabilities
held for sale
|
97
|
|
|
150,604
|
|
Commitments and
Contingencies
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Capital
stock:
|
—
|
|
|
—
|
|
Preferred stock, $1 par
value, authorized - 1,000,000 shares; issued and outstanding -
none
|
|
|
|
Common stock, $1 par
value, authorized - 240,000,000 shares; issued and outstanding -
132,879,395 shares and 142,217,933 shares as of September 27, 2019
and September 28, 2018, respectively
|
132,879
|
|
|
142,218
|
|
Additional paid-in
capital
|
2,559,450
|
|
|
2,708,839
|
|
Retained
earnings
|
3,939,174
|
|
|
3,809,991
|
|
Accumulated other
comprehensive loss
|
(916,812)
|
|
|
(806,703)
|
|
Total Jacobs
stockholders' equity
|
5,714,691
|
|
|
5,854,345
|
|
Noncontrolling
interests
|
53,967
|
|
|
90,009
|
|
Total Group
stockholders' equity
|
5,768,658
|
|
|
5,944,354
|
|
|
$
|
11,462,711
|
|
|
$
|
12,645,795
|
|
Cash Flows (In
thousands) (Quarterly data unaudited)
|
|
|
For the Three
Months Ended
|
|
For the Years
Ended
|
|
September 27,
2019
|
|
September 28,
2018
|
|
September 27,
2019
|
|
September 28,
2018
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to the Group
|
$
|
149,791
|
|
|
$
|
(31,423)
|
|
|
$
|
873,219
|
|
|
$
|
173,142
|
|
Adjustments to
reconcile net earnings to net cash flows (used for) provided by
operations:
|
|
|
|
|
|
|
|
Depreciation and
amortization:
|
|
|
|
|
|
|
|
Property, equipment
and improvements
|
20,508
|
|
|
29,141
|
|
|
90,171
|
|
|
117,856
|
|
Intangible
assets
|
22,752
|
|
|
22,236
|
|
|
79,098
|
|
|
80,731
|
|
Gain on sale of ECR
business
|
(17,416)
|
|
|
—
|
|
|
(935,110)
|
|
|
—
|
|
(Gain) Loss on
disposal of other businesses and investments
|
—
|
|
|
21,411
|
|
|
9,608
|
|
|
20,967
|
|
(Gain) Loss on
investment in equity securities
|
80,283
|
|
|
—
|
|
|
78,108
|
|
|
—
|
|
Stock based
compensation
|
21,796
|
|
|
17,421
|
|
|
69,137
|
|
|
79,242
|
|
Equity in (earnings)
loss of operating ventures, net
|
(1,152)
|
|
|
5,748
|
|
|
(8,784)
|
|
|
(2,639)
|
|
(Gain) Loss on
disposals of assets, net
|
4,224
|
|
|
7,436
|
|
|
6,222
|
|
|
17,491
|
|
(Gain) Loss on
pension and retiree medical plan changes
|
1,534
|
|
|
1,595
|
|
|
(33,087)
|
|
|
5,414
|
|
Deferred income
taxes
|
(158,531)
|
|
|
295,500
|
|
|
(105,939)
|
|
|
288,126
|
|
Changes in assets and
liabilities, excluding the effects of businesses
acquired:
|
|
|
|
|
|
|
|
Receivables and
contract assets
|
846
|
|
|
(118,812)
|
|
|
(401,770)
|
|
|
(435,198)
|
|
Prepaid expenses and
other current assets
|
(19,116)
|
|
|
(24,754)
|
|
|
(13,117)
|
|
|
(19,134)
|
|
Accounts
payable
|
227,368
|
|
|
44,344
|
|
|
295,146
|
|
|
183,057
|
|
Income taxes
payable
|
(367,659)
|
|
|
(32,481)
|
|
|
(294,995)
|
|
|
68,970
|
|
Accrued
liabilities
|
(71,873)
|
|
|
55,622
|
|
|
(305,716)
|
|
|
(37,746)
|
|
Contract
liabilities
|
(85,886)
|
|
|
(28,427)
|
|
|
333,876
|
|
|
6,268
|
|
Other deferred
liabilities
|
23,212
|
|
|
(58,273)
|
|
|
(106,256)
|
|
|
(79,280)
|
|
Other, net
|
23,196
|
|
|
5,918
|
|
|
3,753
|
|
|
13,885
|
|
Net cash (used for)
provided by operating activities
|
(146,123)
|
|
|
212,202
|
|
|
(366,436)
|
|
|
481,152
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
Additions to property
and equipment
|
(29,307)
|
|
|
(31,476)
|
|
|
(135,977)
|
|
|
(94,884)
|
|
Disposals of property
and equipment and other assets
|
(123)
|
|
|
2,865
|
|
|
7,177
|
|
|
3,293
|
|
Distributions of
capital from (contributions to) equity investees
|
(4,857)
|
|
|
(13,030)
|
|
|
(8,761)
|
|
|
(5,416)
|
|
Acquisitions of
businesses, net of cash acquired
|
—
|
|
|
210
|
|
|
(575,110)
|
|
|
(1,488,336)
|
|
Disposals of investment
in equity securities
|
—
|
|
|
—
|
|
|
64,708
|
|
|
—
|
|
Proceeds (payments)
related to sales of businesses
|
4,691
|
|
|
4,333
|
|
|
2,801,425
|
|
|
7,736
|
|
Purchases of
noncontrolling interests
|
—
|
|
|
—
|
|
|
(1,113)
|
|
|
—
|
|
Net cash (used for)
provided by investing activities
|
(29,596)
|
|
|
(37,098)
|
|
|
2,152,349
|
|
|
(1,577,607)
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
Proceeds from long-term
borrowings
|
575,000
|
|
|
413,000
|
|
|
2,782,193
|
|
|
5,784,355
|
|
Repayments of long-term
borrowings
|
(395,290)
|
|
|
(602,052)
|
|
|
(3,996,970)
|
|
|
(4,572,182)
|
|
Proceeds from
short-term borrowings
|
—
|
|
|
(1,149)
|
|
|
200,001
|
|
|
712
|
|
Repayments of
short-term borrowings
|
(22,664)
|
|
|
(2,692)
|
|
|
(28,566)
|
|
|
(3,391)
|
|
Debt issuance
costs
|
(174)
|
|
|
—
|
|
|
(3,915)
|
|
|
—
|
|
Proceeds from issuances
of common stock
|
18,815
|
|
|
19,996
|
|
|
64,958
|
|
|
53,584
|
|
Common stock
repurchases
|
(329,058)
|
|
|
1
|
|
|
(853,676)
|
|
|
(2,981)
|
|
Taxes paid on vested
restricted stock
|
(454)
|
|
|
(3,133)
|
|
|
(26,641)
|
|
|
(31,108)
|
|
Cash dividends,
including to noncontrolling interests
|
(24,139)
|
|
|
(21,337)
|
|
|
(106,396)
|
|
|
(86,569)
|
|
Net cash (used for)
provided by financing activities
|
(177,964)
|
|
|
(197,366)
|
|
|
(1,969,012)
|
|
|
1,142,420
|
|
Effect of Exchange Rate
Changes
|
(13,491)
|
|
|
(8,750)
|
|
|
20,809
|
|
|
(26,758)
|
|
Net (Decrease) Increase
in Cash and Cash Equivalents
|
(367,174)
|
|
|
(31,012)
|
|
|
(162,290)
|
|
|
19,207
|
|
Cash and Cash
Equivalents at the Beginning of the Period
|
998,242
|
|
|
824,370
|
|
|
793,358
|
|
|
774,151
|
|
Cash and Cash
Equivalents at the End of the Period
|
631,068
|
|
|
793,358
|
|
|
631,068
|
|
|
793,358
|
|
Less Cash and Cash
Equivalents included in Assets held for Sale
|
—
|
|
|
(158,488)
|
|
|
—
|
|
|
(158,488)
|
|
Cash and Cash
Equivalents of Continuing Operations at the End of the
Period
|
$
|
631,068
|
|
|
$
|
634,870
|
|
|
$
|
631,068
|
|
|
$
|
634,870
|
|
|
See the
accompanying Notes to Consolidated Financial
Statements.
|
Backlog (in
millions):
|
|
Unaudited
|
September 27,
2019
|
|
September 28,
2018
|
Critical Mission
Solutions
|
8,460
|
|
|
7,130
|
|
People & Places
Solutions
|
14,109
|
|
|
12,825
|
|
Total
|
$
|
22,569
|
|
|
$
|
19,955
|
|
|
|
|
|
|
|
|
|
Non-GAAP Financial Measures:
In this press release, the Company has included certain non-GAAP
financial measures as defined in Regulation G promulgated under the
Securities Exchange Act of 1934, as amended. The non-GAAP financial
measures included in this press release are net revenue, adjusted
net earnings from continuing operations, adjusted EPS from
continuing operations, adjusted operating profit and adjusted
EBITDA.
Net revenue is calculated excluding pass-through revenue of the
Company's People & Places Solutions segment from the Company's
revenue from continuing operations. Adjusted net earnings from
continuing operations, adjusted EPS from continuing operations and
adjusted operating profit are non-GAAP financial measures that are
calculated by (i) excluding the costs related to the 2015
restructuring activities, which included involuntary terminations,
the abandonment of certain leased offices, combining operational
organizations and the co-location of employees into other existing
offices; and charges associated with our Europe, U.K. and Middle East region, which included write-offs
on contract accounts receivable and charges for statutory
redundancy and severance costs (collectively, the "2015
Restructuring and other items"); (ii) excluding costs and other
charges associated with restructuring activities implemented in
connection with the CH2M acquisition, the ECR divestiture, the KeyW
acquisition and other related cost reduction initiatives, which
included involuntary terminations, costs associated with
co-locating Jacobs, KeyW and CH2M offices, separating physical
locations of ECR and continuing operations, costs and expenses of
the Integration Management Office and Separation Management Office,
including professional services and personnel costs, costs and
charges associated with the divestiture of joint venture interests
to resolve potential conflicts arising from the CH2M acquisition,
expenses relating to certain commitments and contingencies relating
to discontinued operations of the CH2M business, charges associated
with certain operations in India,
which included write-offs on contract accounts receivable and other
accruals, and similar costs and expenses (collectively referred to
as the "Restructuring and other charges"); (iii) excluding
transaction costs and other charges incurred in connection with
closing of the KeyW and CH2M acquisitions, the pending acquisition
of Wood Group's nuclear business, and sale of the ECR business (to
the extent incurred prior to the closing), including advisor fees,
change in control payments, costs and expenses relating to the
registration and listing of Jacobs stock issued in connection with
the CH2M acquisition, and similar transaction costs and expenses
(collectively referred to as "transaction costs"); (iv) adding back
amortization of intangible assets; (v) allocating to discontinued
operations estimated stranded corporate costs that will be
reimbursed or otherwise eliminated in connection with the sale of
the ECR business; (vi) the reclassification of revenue under the
Company's transition services agreement (TSA) included in other
income for U.S. GAAP reporting purposes to SG&A and the
exclusion of remaining unreimbursed costs associated with the TSA;
(vii) allocating to discontinued operations estimated interest
expense relating to long-term debt that was paid down with the
proceeds of the ECR sale; (viii) the removal of fair value
adjustments and dividend income related to the Company's investment
in Worley stock and certain foreign currency revaluations relating
to ECR sale proceeds in the 2019 period; (ix) the exclusion of a
one-time favorable adjustment in the fiscal 2019 period associated
with a reduction of deferred income taxes for permanently
reinvested earnings from non-U.S. subsidiaries in connection with
the sale of the ECR business; (x) excluding charges resulting from
the revaluation of certain deferred tax assets/liabilities in
connection with U.S. tax reform; (xi) adding back depreciation and
amortization relating to the ECR business of the Company that was
ceased as a result of the application of held-for-sale accounting;
and (xii) other income tax adjustments. Adjustments to derive
adjusted net earnings from continuing operations, adjusted EPS from
continuing operations and adjusted operating profit are calculated
on an after-tax basis. We believe that net revenue, adjusted net
earnings from continuing operations, adjusted EPS from continuing
operations, adjusted operating profit and adjusted EBITDA are
useful to management, investors and other users of our financial
information in evaluating the Company's operating results and
understanding the Company's operating trends by excluding or adding
back the effects of the items described above, the inclusion or
exclusion of which can obscure underlying trends. Additionally,
management uses such measures in its own evaluation of the
Company's performance, particularly when comparing performance to
past periods, and believes these measures are useful for investors
because they facilitate a comparison of our financial results from
period to period.
Adjusted EBITDA for prior periods is calculated by adding
depreciation expense to adjusted operating profit from continuing
operations. For fiscal 2020 outlook, the Company calculated
adjusted EBITDA by adding income tax expense, depreciation expense
and interest expense, and deducting interest income from adjusted
net earnings from continuing operations.
The Company provides non-GAAP measures to supplement U.S. GAAP
measures, as they provide additional insight into the Company's
financial results. However, non-GAAP measures have limitations as
analytical tools and should not be considered in isolation and are
not in accordance with, or a substitute for, U.S. GAAP measures. In
addition, other companies may define non-GAAP measures differently,
which limits the ability of investors to compare non-GAAP measures
of the Company to those used by our peer companies.
The following tables reconcile the components and values of U.S.
GAAP revenue, net earnings from continuing operations, EPS from
continuing operations, operating profit and revenue to the
corresponding "adjusted" amounts. For the comparable periods
presented below, such adjustments consist of amounts incurred in
connection with the items described above. Amounts are shown in
thousands, except for per-share data (note: earnings per share
amounts may not add across due to rounding). Reconciliation of the
adjusted EPS and adjusted EBITDA outlook for the full fiscal year
to the most directly comparable GAAP measure is not available
without unreasonable efforts because the Company cannot predict
with sufficient certainty all the components required to provide
such reconciliation (note: earnings per share amounts may not
add across due to rounding).
U.S. GAAP
Reconciliation for the fourth quarter of fiscal 2019 and
2018
|
|
|
Three Months
Ended
|
|
September 27,
2019
|
Unaudited
|
U.S.
GAAP
|
|
Effects of
Restructuring
and Other
Charges
|
|
Effects of
Transaction
Costs (1)
|
|
Other
Adjustments (2)
|
|
Adjusted
|
Revenues
|
$
|
3,392,862
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,392,862
|
|
Pass through
revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
(702,786)
|
|
|
(702,786)
|
|
Net revenue
|
3,392,862
|
|
|
—
|
|
|
—
|
|
|
(702,786)
|
|
|
2,690,076
|
|
Direct cost of
contracts
|
(2,727,329)
|
|
|
3,000
|
|
|
—
|
|
|
702,786
|
|
|
(2,021,543)
|
|
Gross profit
|
665,533
|
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
668,533
|
|
Selling, general and
administrative expenses
|
(566,447)
|
|
|
100,487
|
|
|
5,431
|
|
|
45,301
|
|
|
(415,228)
|
|
Operating
Profit
|
99,086
|
|
|
103,487
|
|
|
5,431
|
|
|
45,301
|
|
|
253,305
|
|
Total other (expense)
income, net
|
(45,549)
|
|
|
2,864
|
|
|
1,670
|
|
|
43,530
|
|
|
2,515
|
|
Earnings from
Continuing Operations Before Taxes
|
53,537
|
|
|
106,351
|
|
|
7,101
|
|
|
88,831
|
|
|
255,820
|
|
Income Tax (Expense)
Benefit for Continuing Operations
|
(24,124)
|
|
|
(23,346)
|
|
|
(1,743)
|
|
|
2,060
|
|
|
(47,153)
|
|
Net Earnings of the
Group from Continuing Operations
|
29,413
|
|
|
83,005
|
|
|
5,358
|
|
|
90,891
|
|
|
208,667
|
|
Net Earnings
Attributable to Noncontrolling Interests from Continuing
Operations
|
(7,467)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(7,467)
|
|
Net Earnings from
Continuing Operations attributable to Jacobs
|
21,946
|
|
|
83,005
|
|
|
5,358
|
|
|
90,891
|
|
|
201,200
|
|
Net Earnings
attributable to Discontinued Operations
|
120,378
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
120,378
|
|
Net Earnings
attributable to Jacobs
|
$
|
142,324
|
|
|
$
|
83,005
|
|
|
$
|
5,358
|
|
|
$
|
90,891
|
|
|
$
|
321,578
|
|
Diluted Net Earnings
from Continuing Operations Per Share
|
$
|
0.16
|
|
|
$
|
0.61
|
|
|
$
|
0.04
|
|
|
$
|
0.67
|
|
|
$
|
1.48
|
|
Diluted Net Earnings
from Discontinued Operations Per Share
|
$
|
0.88
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
0.88
|
|
Diluted Earnings Per
Share
|
$
|
1.04
|
|
|
$
|
0.61
|
|
|
$
|
0.04
|
|
|
$
|
0.67
|
|
|
$
|
2.36
|
|
Operating Profit
Margin
|
2.92
|
%
|
|
|
|
|
|
|
|
9.42
|
%
|
|
|
(1)
|
Includes after-tax
CH2M transaction costs and adjustments of $1.3 million, after-tax
transaction costs associated with the acquisition of KeyW of $0.2
million and after tax-transaction costs associated with the
acquisition of John Wood Group's Nuclear Business of $3.9
million.
|
|
|
(2)
|
Includes (a) the
removal of pass through revenues and costs for the People &
Places Solutions ("PPS") line of business for the calculation of
operating profit margin as a percentage of net revenue of $702.8
million, (b) the removal of amortization of intangible assets of
$23.4 million, (c) the reclassification of revenues under the
Company's TSA of $21.3 million included in other income for U.S.
GAAP reporting purposes to SG&A and the exclusion of $0.7
million in remaining unreimbursed costs associated with this
agreement, (d) the removal of $64.8 million in fair value
adjustments and dividend income related to our investment in Worley
stock and certain foreign currency revaluations relating to ECR
sale proceeds, (e) the add-back of charges resulting from the
revaluation of certain deferred tax assets/liabilities in
connection with U.S. tax reform of $24.0 million and (f) associated
income tax expense adjustments for the above pre-tax adjustment
items.
|
|
For the Three Months
Ended
|
|
September 28,
2018
|
Unaudited
|
U.S.
GAAP
|
|
Effects of
Restructuring
and Other
Charges
|
|
Effects of
Transaction
Costs (1)
|
|
Other
Adjustments (2)
|
|
Adjusted
|
Revenues
|
$
|
2,991,856
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,991,856
|
|
Pass through
revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
(650,547)
|
|
|
(650,547)
|
|
Net revenue
|
2,991,856
|
|
|
—
|
|
|
—
|
|
|
(650,547)
|
|
|
2,341,309
|
|
Direct cost of
contracts
|
(2,385,625)
|
|
|
1,269
|
|
|
—
|
|
|
650,547
|
|
|
(1,733,809)
|
|
Gross profit
|
606,231
|
|
|
1,269
|
|
|
—
|
|
|
—
|
|
|
607,500
|
|
Selling, general and
administrative expenses
|
(445,385)
|
|
|
29,938
|
|
|
3,521
|
|
|
25,488
|
|
|
(386,438)
|
|
Operating
Profit
|
160,846
|
|
|
31,207
|
|
|
3,521
|
|
|
25,488
|
|
|
221,062
|
|
Total other (expense)
income, net
|
(18,446)
|
|
|
(311)
|
|
|
585
|
|
|
17,787
|
|
|
(385)
|
|
Earnings from
Continuing Operations Before Taxes
|
142,400
|
|
|
30,896
|
|
|
4,106
|
|
|
43,275
|
|
|
220,677
|
|
Income Tax (Expense)
Benefit for Continuing Operations
|
(215,402)
|
|
|
(8,902)
|
|
|
(2,125)
|
|
|
174,582
|
|
|
(51,847)
|
|
Net Earnings of the
Group from Continuing Operations
|
(73,002)
|
|
|
21,994
|
|
|
1,981
|
|
|
217,857
|
|
|
168,830
|
|
Net Earnings
Attributable to Noncontrolling Interests from Continuing
Operations
|
(3,995)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,995)
|
|
Net Earnings from
Continuing Operations attributable to Jacobs
|
(76,997)
|
|
|
21,994
|
|
|
1,981
|
|
|
217,857
|
|
|
164,835
|
|
Net Earnings
attributable to Discontinued Operations
|
39,456
|
|
|
17,465
|
|
|
—
|
|
|
(15,612)
|
|
|
41,309
|
|
Net Earnings
attributable to Jacobs
|
$
|
(37,541)
|
|
|
$
|
39,459
|
|
|
$
|
1,981
|
|
|
$
|
202,245
|
|
|
$
|
206,144
|
|
Diluted Net Earnings
from Continuing Operations Per Share (3)
|
$
|
(0.54)
|
|
|
$
|
0.15
|
|
|
$
|
0.01
|
|
|
$
|
1.51
|
|
|
$
|
1.14
|
|
Diluted Net Earnings
from Discontinued Operations Per Share (3)
|
$
|
0.28
|
|
|
$
|
0.12
|
|
|
$
|
—
|
|
|
$
|
(0.11)
|
|
|
$
|
0.29
|
|
Diluted Earnings Per
Share (3)
|
$
|
(0.26)
|
|
|
$
|
0.27
|
|
|
$
|
0.01
|
|
|
$
|
1.40
|
|
|
$
|
1.43
|
|
Operating Profit
Margin
|
5.38
|
%
|
|
|
|
|
|
|
|
9.44
|
%
|
|
|
(1)
|
Includes pre-tax CH2M
transaction costs and adjustments of $(0.4 million) as well as
transaction costs associated with the recently announced sale of
our ECR line of business of $4.5 million.
|
|
|
(2)
|
Includes (a) the
removal of pass through revenues and costs for the PPS line of
business for the calculation of operating profit margin as a
percentage of net revenue of $650.5 million, (b) the removal of
amortization of intangible assets of $19.1 million, (c) the
allocation to discontinued operations of estimated stranded
corporate costs of $6.4 million that would have been reimbursed
under the ECR transition service agreement (TSA) with Worley or
otherwise eliminated from the ongoing operations in connection with
the sale of the ECR business, (d) estimated 2018 impacts of $19.0
million from overhead allocation realignments in connection with
the Company's CH2M business in the first quarter of fiscal 2019 had
those changes been put into effect in first quarter of fiscal 2018
( the net impact of which was zero for consolidated selling,
general and administrative expenses, (e) the allocation to
discontinued operations of estimated interest expense for the full
period related to long-term debt that has been paid down as a
result of the ECR sale of $17.8 million, (f) the add-back of
charges resulting from the revaluation of certain deferred tax
assets/liabilities in connection with U.S. tax reform of $184.5
million and (g) associated income tax expense adjustments for the
above pre-tax adjustment items.
|
|
|
(3)
|
Diluted Earnings Per
Share from Continuing Operations, Diluted Earnings Per Share from
Discontinued Operations and Diluted Earnings Per Share for GAAP EPS
assume no dilution from stock compensation plans because Net
Earnings from Continuing Operations attributable to Jacobs is a
loss. However, because Non-GAAP add-backs and Non-GAAP Net Earnings
from Continuing Operations attributable to Jacobs are income rather
than losses, the dilution from stock compensation plans is
considered in the weighted average diluted shares outstanding in
the calculation of Non-GAAP Diluted Earnings Per Share.
|
U.S. GAAP
Reconciliation for fiscal years 2019 and 2018
|
|
|
For the Year
Ended
|
|
September 27,
2019
|
Unaudited
|
U.S.
GAAP
|
|
Effects of
Restructuring
and Other
Charges
|
|
Effects of
Transaction
Costs (1)
|
|
Other
Adjustments (2)
|
|
Adjusted
|
Revenues
|
$
|
12,737,868
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
12,737,868
|
|
Pass through
revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,543,358)
|
|
|
(2,543,358)
|
|
Net revenue
|
12,737,868
|
|
|
—
|
|
|
—
|
|
|
(2,543,358)
|
|
|
10,194,510
|
|
Direct cost of
contracts
|
(10,260,840)
|
|
|
4,969
|
|
|
—
|
|
|
2,543,358
|
|
|
(7,712,513)
|
|
Gross profit
|
2,477,028
|
|
|
4,969
|
|
|
—
|
|
|
—
|
|
|
2,481,997
|
|
Selling, general and
administrative expenses
|
(2,072,177)
|
|
|
332,097
|
|
|
18,169
|
|
|
133,164
|
|
|
(1,588,747)
|
|
Operating
Profit
|
404,851
|
|
|
337,066
|
|
|
18,169
|
|
|
133,164
|
|
|
893,250
|
|
Total other (expense)
income, net
|
(53,892)
|
|
|
(25,596)
|
|
|
3,214
|
|
|
71,639
|
|
|
(4,635)
|
|
Earnings from
Continuing Operations Before Taxes
|
350,959
|
|
|
311,470
|
|
|
21,383
|
|
|
204,803
|
|
|
888,615
|
|
Income Tax (Expense)
Benefit for Continuing Operations
|
(36,954)
|
|
|
(67,789)
|
|
|
(5,252)
|
|
|
(51,722)
|
|
|
(161,717)
|
|
Net Earnings of the
Group from Continuing Operations
|
314,005
|
|
|
243,681
|
|
|
16,131
|
|
|
153,081
|
|
|
726,898
|
|
Net Earnings
Attributable to Noncontrolling Interests from Continuing
Operations
|
(23,045)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(23,045)
|
|
Net Earnings from
Continuing Operations attributable to Jacobs
|
290,960
|
|
|
243,681
|
|
|
16,131
|
|
|
153,081
|
|
|
703,853
|
|
Net Earnings
attributable to Discontinued Operations
|
557,019
|
|
|
(587)
|
|
|
8,948
|
|
|
(55,622)
|
|
|
509,758
|
|
Net Earnings
attributable to Jacobs
|
$
|
847,979
|
|
|
$
|
243,094
|
|
|
$
|
25,079
|
|
|
$
|
97,459
|
|
|
$
|
1,213,611
|
|
Diluted Net Earnings
from Continuing Operations Per Share
|
$
|
2.09
|
|
|
$
|
1.75
|
|
|
$
|
0.12
|
|
|
$
|
1.10
|
|
|
$
|
5.05
|
|
Diluted Net Earnings
from Discontinued Operations Per Share
|
$
|
4.00
|
|
|
$
|
—
|
|
|
$
|
0.06
|
|
|
$
|
(0.40)
|
|
|
$
|
3.66
|
|
Diluted Earnings Per
Share
|
$
|
6.08
|
|
|
$
|
1.74
|
|
|
$
|
0.18
|
|
|
$
|
0.70
|
|
|
$
|
8.71
|
|
Operating Profit
Margin
|
3.18
|
%
|
|
|
|
|
|
|
|
8.76
|
%
|
|
|
(1)
|
Includes after-tax
CH2M transaction costs and adjustments of $2.4 million, after
tax-transaction costs associated with the sale of our ECR line of
business of $8.9 million, after-tax transaction costs associated
with the acquisition of KeyW of $9.8 million and after-tax
transaction costs associated with the acquisition of John Wood
Group's Nuclear Business of $3.9 million.
|
|
|
(2)
|
Includes (a) the
removal of pass through revenues and costs for the PPS line of
business for the calculation of operating profit margin as a
percentage of net revenue of $2.54 billion, (b) the removal of
amortization of intangible assets of $79.1 million, (c) the
allocation to discontinued operations of estimated stranded
corporate costs of $14.8 million prior to the sale that will be
reimbursed under the ECR transition services agreement (TSA) with
Worley or otherwise eliminated from the ongoing operations in
connection with the sale of the ECR business, (d) the
reclassification of revenues under the Company's TSA of $35.4
million included in other income for U.S. GAAP reporting purposes
to SG&A and the exclusion of $3.9 million in remaining
unreimbursed costs associated with this agreement (e) the
allocation to discontinued operations of estimated interest expense
for the month of April prior to the sale related to long-term debt
that has been paid down as a result of the ECR sale of $42.3
million, (f) the removal of $64.8 million in fair value adjustments
and dividend income related to our investment in Worley stock and
certain foreign currency revaluations relating to ECR sale proceeds
(g) the exclusion of approximately $37.0 million in one-time
favorable income tax adjustment from the second quarter associated
with reduction of deferred income taxes for permanently reinvested
earnings from non-U.S. subsidiaries in connection with the sale of
the ECR business, (h) the add-back of charges resulting from the
revaluation of certain deferred tax assets/liabilities in
connection with U.S. tax reform from the first quarter of $35.0
million and other adjustments of $1.5 million, (i) the add-back of
depreciation relating to the ECR business that was ceased as a
result of the application of held-for-sale accounting of $17.3
million and (j) associated income tax expense adjustments for the
above pre-tax adjustment items.
|
|
For the Year
Ended
|
|
September 28,
2018
|
Unaudited
|
U.S.
GAAP
|
|
Effects of
Restructuring
and Other
Charges
|
|
Effects of
Transaction
Costs (1)
|
|
Other
Adjustments (2)
|
|
Adjusted
|
Revenues
|
$
|
10,579,773
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
10,579,773
|
|
Pass through
revenue
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,254,477)
|
|
|
(2,254,477)
|
|
Net revenue
|
10,579,773
|
|
|
—
|
|
|
—
|
|
|
(2,254,477)
|
|
|
8,325,296
|
|
Direct cost of
contracts
|
(8,421,223)
|
|
|
3,845
|
|
|
—
|
|
|
2,254,477
|
|
|
(6,162,901)
|
|
Gross profit
|
2,158,550
|
|
|
3,845
|
|
|
—
|
|
|
—
|
|
|
2,162,395
|
|
Selling, general and
administrative expenses
|
(1,771,107)
|
|
|
150,106
|
|
|
80,436
|
|
|
93,740
|
|
|
(1,446,825)
|
|
Operating
Profit
|
387,443
|
|
|
153,951
|
|
|
80,436
|
|
|
93,740
|
|
|
715,570
|
|
Total other (expense)
income, net
|
(56,462)
|
|
|
(311)
|
|
|
1,774
|
|
|
50,992
|
|
|
(4,007)
|
|
Earnings from
Continuing Operations Before Taxes
|
330,981
|
|
|
153,640
|
|
|
82,210
|
|
|
144,732
|
|
|
711,563
|
|
Income Tax (Expense)
Benefit for Continuing Operations
|
(325,632)
|
|
|
(40,254)
|
|
|
(21,488)
|
|
|
225,791
|
|
|
(161,583)
|
|
Net Earnings of the
Group from Continuing Operations
|
5,349
|
|
|
113,386
|
|
|
60,722
|
|
|
370,523
|
|
|
549,980
|
|
Net Earnings
Attributable to Noncontrolling Interests from Continuing
Operations
|
(9,534)
|
|
|
(577)
|
|
|
—
|
|
|
—
|
|
|
(10,111)
|
|
Net Earnings from
Continuing Operations attributable to Jacobs
|
(4,185)
|
|
|
112,809
|
|
|
60,722
|
|
|
370,523
|
|
|
539,869
|
|
Net Earnings
attributable to Discontinued Operations
|
167,616
|
|
|
27,259
|
|
|
—
|
|
|
(48,219)
|
|
|
146,656
|
|
Net Earnings
attributable to Jacobs
|
$
|
163,431
|
|
|
$
|
140,068
|
|
|
$
|
60,722
|
|
|
$
|
322,304
|
|
|
$
|
686,525
|
|
Diluted Net Earnings
from Continuing Operations Per Share (3)
|
$
|
(0.03)
|
|
|
$
|
0.81
|
|
|
$
|
0.44
|
|
|
$
|
2.66
|
|
|
$
|
3.87
|
|
Diluted Net Earnings
from Discontinued Operations Per Share (3)
|
$
|
1.21
|
|
|
$
|
0.20
|
|
|
$
|
—
|
|
|
$
|
(0.35)
|
|
|
$
|
1.05
|
|
Diluted Earnings Per
Share (3)
|
$
|
1.18
|
|
|
$
|
1.01
|
|
|
$
|
0.44
|
|
|
$
|
2.31
|
|
|
$
|
4.93
|
|
Operating Profit
Margin
|
3.66
|
%
|
|
|
|
|
|
|
|
8.60
|
%
|
|
|
(1)
|
Includes pre-tax CH2M
transaction costs and adjustments of $77.7 million as well as
transaction costs associated with the recently announced sale of
our ECR line of business of $4.5 million.
|
|
|
(2)
|
Includes (a) the
removal of pass through revenues and costs for the PPS line of
business for the calculation of operating profit margin as a
percentage of net revenue of $2.25 billion, (b) the removal of
amortization of intangible assets of $68.1 million, (c) the
allocation to discontinued operations of estimated stranded
corporate costs of $25.6 million that would have been reimbursed
under the ECR transition service agreement (TSA) with Worley or
otherwise eliminated from the ongoing operations in connection with
the sale of the ECR business, (d) estimated 2018 impacts of $70.0
million from overhead allocation realignments in connection with
the Company's CH2M business in the first quarter of fiscal 2019 had
those changes been put into effect in first quarter of fiscal 2018
( the net impact of which was zero for consolidated selling,
general and administrative expenses, (e) the allocation to
discontinued operations of estimated interest expense for the full
period related to long-term debt that has been paid down as a
result of the ECR sale of $51.0 million, (f) the add-back of
charges resulting from the revaluation of certain deferred tax
assets/liabilities in connection with U.S. tax reform of $259.2
million and (g) associated income tax expense adjustments for the
above pre-tax adjustment items.
|
|
|
(3)
|
Diluted Earnings Per
Share from Continuing Operations, Diluted Earnings Per Share from
Discontinued Operations and Diluted Earnings Per Share for GAAP EPS
assume no dilution from stock compensation plans because Net
Earnings from Continuing Operations attributable to Jacobs is a
loss. However, because Non-GAAP add-backs and Non-GAAP Net Earnings
from Continuing Operations attributable to Jacobs are income rather
than losses, the dilution from stock compensation plans is
considered in the weighted average diluted shares outstanding in
the calculation of Non-GAAP Diluted Earnings Per Share.
|
Reconciliation of
Operating Profit from Continuing Operations Attributable to Jacobs
to Adjusted EBITDA
|
|
|
For the Year
Ended
|
|
September 27,
2019
|
|
September 28,
2018
|
Adjusted operating
profit from continuing operations
|
893,250
|
|
715,570
|
Depreciation
expense
|
88,061
|
|
91,230
|
Adjusted
EBITDA
|
981,311
|
|
806,800
|
Earnings Per
Share:
|
|
|
For the Three
Months Ended
|
|
For the Years
Ended
|
|
September 27,
2019
|
|
September 28,
2018
|
|
September 27,
2019
|
|
September 28,
2018
|
Numerator for
Basic and Diluted EPS:
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to Jacobs from continuing operations
|
$
|
21,946
|
|
|
$
|
(76,997)
|
|
|
$
|
290,960
|
|
|
$
|
(4,185)
|
|
Net earnings (loss)
from continuing operations allocated to participating
securities
|
(16)
|
|
|
—
|
|
|
(415)
|
|
|
—
|
|
Net earnings
(loss) from continuing operations allocated to common stock for EPS
calculation
|
$
|
21,930
|
|
|
$
|
(76,997)
|
|
|
$
|
290,545
|
|
|
$
|
(4,185)
|
|
|
|
|
|
|
|
|
|
Net earnings (loss)
attributable to Jacobs from discontinued operations
|
$
|
120,378
|
|
|
$
|
39,456
|
|
|
$
|
557,019
|
|
|
$
|
167,616
|
|
Net earnings (loss)
from discontinued operations allocated to participating
securities
|
(88)
|
|
|
(105)
|
|
|
(795)
|
|
|
(808)
|
|
Net earnings
(loss) from discontinued operations allocated to common stock for
EPS calculation
|
$
|
120,290
|
|
|
$
|
39,351
|
|
|
$
|
556,224
|
|
|
$
|
166,808
|
|
|
|
|
|
|
|
|
|
Net earnings
allocated to common stock for EPS calculation
|
142,220
|
|
|
(37,646)
|
|
|
846,769
|
|
|
162,623
|
|
|
|
|
|
|
|
|
|
Denominator for
Basic and Diluted EPS:
|
|
|
|
|
|
|
|
Weighted average
basic shares
|
134,625
|
|
|
142,575
|
|
|
138,104
|
|
|
138,182
|
|
Shares allocated to
participating securities
|
(99)
|
|
|
(379)
|
|
|
(197)
|
|
|
(646)
|
|
Shares used for
calculating basic EPS attributable to common stock
|
134,526
|
|
|
142,196
|
|
|
137,907
|
|
|
137,536
|
|
|
|
|
|
|
|
|
|
Effect of dilutive
securities:
|
|
|
|
|
|
|
|
Stock compensation
plans
|
1,579
|
|
|
—
|
|
|
1,299
|
|
|
—
|
|
Shares used for
calculating diluted EPS attributable to common stock
|
136,105
|
|
|
142,196
|
|
|
139,206
|
|
|
137,536
|
|
|
|
|
|
|
|
|
|
Net Earnings Per
Share:
|
|
|
|
|
|
|
|
Basic Net Earnings
(Loss) from Continuing Operations Per Share
|
$
|
0.16
|
|
|
$
|
(0.54)
|
|
|
$
|
2.11
|
|
|
$
|
(0.03)
|
|
Basic Net Earnings
(Loss) from Discontinued Operations Per Share
|
$
|
0.89
|
|
|
$
|
0.28
|
|
|
$
|
4.03
|
|
|
$
|
1.21
|
|
Basic
EPS
|
$
|
1.06
|
|
|
$
|
(0.26)
|
|
|
$
|
6.14
|
|
|
$
|
1.18
|
|
Diluted Net Earnings
(Loss) from Continuing Operations Per Share
|
$
|
0.16
|
|
|
$
|
(0.54)
|
|
|
$
|
2.09
|
|
|
$
|
(0.03)
|
|
Diluted Net Earnings
from Discontinued Operations Per Share
|
$
|
0.88
|
|
|
$
|
0.28
|
|
|
$
|
4.00
|
|
|
$
|
1.21
|
|
Diluted
EPS
|
$
|
1.04
|
|
|
$
|
(0.26)
|
|
|
$
|
6.08
|
|
|
$
|
1.18
|
|
|
|
(1)
|
For the fiscal 2018
year-to-date period, because net earnings (loss) from continuing
operations was a loss, the effect of antidilutive securities of
1,176 were excluded from the denominator in calculating diluted
EPS. For the three-month period fiscal 2018 period, the effect of
antidilutive securities of 1,168 were excluded from the denominator
in calculating diluted EPS.
|
For additional information contact:
Investors:
Jonathan Doros, 214-583-8596
jonathan.doros@jacobs.com
Media:
Marietta Hannigan, 214-920-8035
marietta.hannigan@jacobs.com
View original content to download
multimedia:http://www.prnewswire.com/news-releases/jacobs-reports-fiscal-fourth-quarter-earnings-300964297.html
SOURCE Jacobs