Company Quick10K Filing
Jacobs Engineering Group
Price-0.00 EPS6
Shares139 P/E-0
MCap-0 P/FCF0
Net Debt570 EBIT950
TEV570 TEV/EBIT1
TTM 2019-09-27, in MM, except price, ratios
10-Q 2021-01-01 Filed 2021-02-09
10-K 2020-10-02 Filed 2020-11-24
10-Q 2020-03-27 Filed 2020-05-06
10-Q 2019-12-27 Filed 2020-02-04
8-K 2020-11-27
8-K 2020-11-24
8-K 2020-08-14
8-K 2020-05-06
8-K 2020-05-06
8-K 2020-03-25
8-K 2020-02-04
8-K 2020-01-14

J 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements.
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Item 4. Controls and Procedures.
Part II - Other Information
Item 1. Legal Proceedings.
Item 1A. Risk Factors.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosure.
Item 5. Other Information.
Item 6. Exhibits.
EX-10.1 exhibit101-formofpsuag.htm
EX-10.2 exhibit102-formofpsuag.htm
EX-10.3 exhibit103-formofrsuag.htm
EX-31.1 exhibit311q1fy2020.htm
EX-31.2 exhibit312q1fy2020.htm
EX-32.1 exhibit321q1fy2020.htm
EX-32.2 exhibit322q1fy2020.htm

Jacobs Engineering Group Earnings 2019-12-27

Balance SheetIncome StatementCash Flow
151296302018201820192020
Assets, Equity
3.42.72.01.40.70.02018201820192020
Rev, G Profit, Net Income
2.31.40.6-0.3-1.1-2.02018201820192020
Ops, Inv, Fin

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark one)
 Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended December 27, 2019
 Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from              to             
Commission File Number 1-7463
JACOBS ENGINEERING GROUP INC.
(Exact name of registrant as specified in its charter)

Delaware95-4081636
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
1999 Bryan StreetSuite 1200DallasTexas75201
(Address of principal executive offices)(Zip Code)

(214) 583 – 8500
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
_________________________________________________________________
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock$1 par valueJNew York Stock Exchange

Indicate by check-mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:     ☒ Yes    ☐  No

Indicate by check-mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    ☒  Yes    ☐  No
Page 1


Indicate by check-mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check-mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes   ☒  No
Number of shares of common stock outstanding at January 27, 2020: 133,050,144
Page 2


JACOBS ENGINEERING GROUP INC.
INDEX TO FORM 10-Q

Page No.
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.

Page 2


Part I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Page 3


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
(Unaudited)
December 27, 2019September 27, 2019
ASSETS
Current Assets:
Cash and cash equivalents$619,212  $631,068  
Receivables and contract assets3,056,115  2,840,209  
Prepaid expenses and other699,237  639,539  
Current assets held for sale4,022  952  
Total current assets4,378,586  4,111,768  
Property, Equipment and Improvements, net308,672  308,143  
Other Noncurrent Assets:
Goodwill5,437,422  5,432,544  
Intangibles, net645,468  665,076  
Miscellaneous1,403,881  918,202  
Noncurrent assets held for sale26,530  26,978  
Total other noncurrent assets7,513,301  7,042,800  
$12,200,559  $11,462,711  
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Short-term debt$199,936  $199,901  
Accounts payable1,032,820  1,072,645  
Accrued liabilities1,162,872  1,384,379  
Contract liabilities435,211  414,208  
Current liabilities held for sale797  2,573  
Total current liabilities2,831,636  3,073,706  
Long-term Debt1,414,903  1,201,245  
Other Deferred Liabilities1,891,797  1,419,005  
Noncurrent Liabilities Held for Sale52  97  
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—133,001,493 shares and 132,879,395
shares as of December 27, 2019 and September 27, 2019 , respectively
133,001  132,879  
Additional paid-in capital2,605,765  2,559,450  
Retained earnings4,145,825  3,939,174  
Accumulated other comprehensive loss(880,166) (916,812) 
Total Jacobs stockholders’ equity6,004,425  5,714,691  
Noncontrolling interests57,746  53,967  
Total Group stockholders’ equity6,062,171  5,768,658  
$12,200,559  $11,462,711  
See the accompanying Notes to Consolidated Financial Statements – Unaudited.
Page 4


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
For the Three Months Ended December 27, 2019 and December 28, 2018
(In thousands, except per share information)
(Unaudited)
For the Three Months Ended
December 27, 2019December 28, 2018
Revenues$3,360,049  $3,083,788  
Direct cost of contracts(2,715,478) (2,515,268) 
Gross profit644,571  568,520  
Selling, general and administrative expenses(493,226) (455,390) 
Operating Profit151,345  113,130  
Other Income (Expense):
Interest income946  2,104  
Interest expense(14,817) (25,325) 
Miscellaneous income (expense), net116,695  2,282  
Total other income (expense), net102,824  (20,939) 
Earnings from Continuing Operations Before Taxes254,169  92,191  
Income Tax Expense for Continuing Operations(68,489) (22,758) 
Net Earnings of the Group from Continuing Operations185,680  69,433  
Net Earnings of the Group from Discontinued Operations77,587  60,158  
Net Earnings of the Group263,267  129,591  
Net Earnings Attributable to Noncontrolling Interests from Continuing Operations(6,257) (4,539) 
Net Earnings Attributable to Jacobs from Continuing Operations179,423  64,894  
Net (Earnings) Losses Attributable to Noncontrolling Interests from Discontinued Operations  (756) 
Net Earnings Attributable to Jacobs from Discontinued Operations77,587  59,402  
Net Earnings Attributable to Jacobs$257,010  $124,296  
Net Earnings Per Share:
Basic Net Earnings from Continuing Operations Per Share$1.35  $0.45  
Basic Net Earnings from Discontinued Operations Per Share$0.58  $0.42  
Basic Earnings Per Share$1.93  $0.87  
Diluted Net Earnings from Continuing Operations Per Share$1.33  $0.45  
Diluted Net Earnings from Discontinued Operations Per Share$0.58  $0.41  
Diluted Earnings Per Share$1.91  $0.86  
See the accompanying Notes to Consolidated Financial Statements - Unaudited.
Page 5


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
For the Three Months Ended December 27, 2019 and December 28, 2018
(In thousands)
(Unaudited)
For the Three Months Ended
December 27, 2019December 28, 2018
Net Earnings of the Group$263,267  $129,591  
Other Comprehensive Income (Loss):
Foreign currency translation adjustment52,297  (52,400) 
Gain (loss) on cash flow hedges18  1,790  
Change in pension and retiree medical plan liabilities(16,251) 1,825  
Other comprehensive income (loss) before taxes36,064  (48,785) 
Income Tax (Expense) Benefit:
Cash flow hedges  (543) 
Change in pension and retiree medical plan liabilities582  (521) 
Income Tax (Expense) Benefit:582  (1,064) 
Net other comprehensive income (loss)36,646  (49,849) 
Net Comprehensive Income (Loss) of the Group299,913  79,742  
Net (Earnings) Loss Attributable to Noncontrolling Interests(6,257) (5,295) 
Net Comprehensive Income (Loss) Attributable to Jacobs$293,656  $74,447  
See the accompanying Notes to Consolidated Financial Statements - Unaudited.
Page 6


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three Months Ended December 27, 2019 and December 28, 2018
(In thousands)
(Unaudited)
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Jacobs Stockholders’ EquityNoncontrolling InterestsTotal Group Stockholders’ Equity
Balances at September 28, 2018
$142,218  $2,708,839  $3,809,991  $(806,703) $5,854,345  $90,009  $5,944,354  
Net earnings—  —  124,296  —  124,296  5,295  129,591  
Adoption of ASC 606, net of deferred taxes of $(10,285)
—  —  (37,209) —  (37,209) —  (37,209) 
Foreign currency translation adjustments—  —  —  (52,400) (52,400) —  (52,400) 
Pension and retiree medical plan liability, net of deferred taxes of $521
—  —  —  1,304  1,304  —  1,304  
Gain on derivatives, net of deferred taxes of $543
—  —  —  1,247  1,247  —  1,247  
Noncontrolling interest acquired / consolidated—  (1,113) —  —  (1,113) —  (1,113) 
Dividends—  —  (233) —  (233) —  (233) 
Distributions to noncontrolling interests—  —    —    (7,372) (7,372) 
Stock based compensation —  15,588  6—  15,594  —  15,594  
Issuances of equity securities including shares withheld for taxes506  (6,507) (4,929) —  (10,930) —  (10,930) 
Repurchases of equity securities(2,324) (44,417) (95,058) —  (141,799) —  (141,799) 
Balances at December 28, 2018
$140,400  $2,672,390  $3,796,864  $(856,552) $5,753,102  $87,932  $5,841,034  
Balances at September 27, 2019$132,879  $2,559,450  $3,939,174  $(916,812) $5,714,691  $53,967  $5,768,658  
Net earnings—  —  257,010  —  257,010  6,257  263,267  
Foreign currency translation adjustments—  —  52,297  52,297  —  52,297  
Pension liability, net of deferred taxes of $582
—  —  (15,669) (15,669) —  (15,669) 
Gain on derivatives, net of deferred taxes of $
—  —  18  18  —  18  
Dividends—  —  (68) —  (68) (68) 
Distributions to noncontrolling interests—  —  —  —  (2,478) (2,478) 
Stock based compensation —  13,200  1,079  —  14,279  —  14,279  
Issuances of equity securities including shares withheld for taxes474  (10,115) (8,492) —  (18,133) —  (18,133) 
Repurchases of equity securities(352) 43,230  (42,878) —    —    
Balances at December 27, 2019$133,001  $2,605,765  $4,145,825  $(880,166) $6,004,425  $57,746  $6,062,171  
See the accompanying Notes to Consolidated Financial Statements – Unaudited.
Page 7


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended December 27, 2019 and December 28, 2018
(In thousands)
(Unaudited)
For the Three Months Ended
December 27, 2019December 28, 2018
Cash Flows from Operating Activities:
Net earnings attributable to the Group$263,267  $129,591  
Adjustments to reconcile net earnings to net cash flows (used for) provided by operations:
Depreciation and amortization:
Property, equipment and improvements22,152  20,321  
Intangible assets21,845  19,285  
Gain on sale of ECR business(61,943)   
(Gain) Loss on investment in equity securities(105,319)   
Stock based compensation14,279  15,594  
Equity in earnings of operating ventures, net(715) (3,141) 
(Gain) Loss on disposals of assets, net36  511  
Loss (Gain) on pension and retiree medical plan changes 2,651  (2,172) 
Deferred income taxes102,487  (26,080) 
Changes in assets and liabilities, excluding the effects of businesses acquired:
Receivables and contract assets(121,532) (299,061) 
Prepaid expenses and other current assets(4,152) 39,198  
Accounts payable(35,380) 18,891  
Accrued liabilities(236,090) (169,948) 
Contract liabilities25,457  119,641  
Other deferred liabilities(60,562) (80,439) 
      Other, net36,333  (6,892) 
          Net cash (used for) provided by operating activities(137,186) (224,701) 
Cash Flows from Investing Activities:
Additions to property and equipment(22,260) (20,721) 
Disposals of property and equipment and other assets  205  
Distributions of capital from (contributions to) equity investees(12,000) (966) 
Purchases of noncontrolling interests  (1,113) 
           Net cash provided by (used for) investing activities(34,260) (22,595) 
Cash Flows from Financing Activities:
Proceeds from long-term borrowings841,544  851,156  
Repayments of long-term borrowings(631,000) (323,842) 
Proceeds from short-term borrowings78    
Repayments of short-term borrowings(6) (257) 
Proceeds from issuances of common stock6,201  7,582  
Common stock repurchases  (141,799) 
Taxes paid on vested restricted stock(24,334) (18,512) 
Cash dividends, including to noncontrolling interests(25,618) (28,603) 
            Net cash provided by (used for) financing activities166,865  345,725  
Effect of Exchange Rate Changes(7,275) 22,115  
Net (Decrease) Increase in Cash and Cash Equivalents(11,856) 120,544  
Cash and Cash Equivalents at the Beginning of the Period631,068  793,358  
Cash and Cash Equivalents at the End of the Period619,212  913,902  
Less Cash and Cash Equivalents included in Assets held for Sale  (27,195) 
Cash and Cash Equivalents of Continuing Operations at the End of the Period$619,212  $886,707  
See the accompanying Notes to Consolidated Financial Statements – Unaudited.


Page 8


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.Basis of Presentation
Unless the context otherwise requires:
References herein to “Jacobs” are to Jacobs Engineering Group Inc. and its predecessors;
References herein to the “Company”, “we”, “us” or “our” are to Jacobs Engineering Group Inc. and its consolidated subsidiaries; and
References herein to the “Group” are to the combined economic interests and activities of the Company and the persons and entities holding noncontrolling interests in our consolidated subsidiaries.
The accompanying consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form 10-Q. Consequently, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. Readers of this Quarterly Report on Form 10-Q should also read our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 27, 2019 (“2019 Form 10-K”).
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our consolidated financial statements at December 27, 2019, and for the three months ended December 27, 2019.
Our interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.
Effective the beginning of fiscal first quarter 2020, the Company adopted ASU 2016-02, Leases ("ASC 842"), including the subsequent ASU's that amended and clarified the related guidance. The Company adopted ASC 842 using a modified retrospective approach, and accordingly the new guidance was applied to leases that existed or were entered into after the first day of adoption without adjusting the comparative periods presented. Please refer to Note-14 Leases for a discussion of our updated policies and disclosures related to leases.
Effective the beginning of fiscal first quarter 2019, the Company adopted ASC 606, Revenue from Contracts with Customers, including the subsequent ASUs that amended and clarified the related guidance. The Company adopted ASC Topic 606 using the modified retrospective method, and accordingly the new guidance was applied retrospectively to contracts that were not completed or substantially completed as of September 29, 2018 (the date of initial application). Please refer to Note 13- Revenue Accounting for Contracts and Adoption of ASC Topic 606 for a discussion of our updated policies related to revenue recognition.
On June 12, 2019, Jacobs completed the acquisition of The KeyW Holding Corporation (“KeyW”), a U.S.-based national security solutions provider to the intelligence, cyber, and counterterrorism communities by acquiring 100% of the outstanding shares of KeyW common stock. The Company paid total consideration of $902.6 million which was comprised of approximately $604.2 million in cash to the former stockholders and certain equity award holders of KeyW and the assumption of KeyW’s debt of approximately $298.4 million. The Company repaid all of the assumed KeyW debt by the end of Q4 fiscal 2019. The Company has recorded its preliminary purchase price allocation associated with the acquisition, which is summarized in Note 5- Business Combinations.
Page 9

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
On April 26, 2019, Jacobs completed the sale of its Energy, Chemicals and Resources ("ECR") business to Worley Limited, a company incorporated in Australia ("Worley"), for a purchase price of $3.4 billion consisting of (i) $2.8 billion in cash plus (ii) 58.2 million ordinary shares of Worley, subject to adjustments for changes in working capital and certain other items (the “ECR sale”). As a result of the ECR sale, substantially all ECR-related assets and liabilities have been sold (the "Disposal Group"). 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 had 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. Additionally, current and non-current assets and liabilities of the Disposal Group are reflected as held-for-sale in the unaudited Consolidated Balance Sheet as of September 27, 2019. Further, as of the quarter ended December 27, 2019, a portion of the ECR business remains held by Jacobs and continues to be classified as held for sale during the first quarter of fiscal 2020 in accordance with U.S. GAAP. For further discussion see Note 7- Sale of Energy, Chemicals and Resources ("ECR") Business to the consolidated financial statements.
2. Use of Estimates and Assumptions
The preparation of financial statements in conformity with U.S. GAAP requires us to employ estimates and make assumptions that affect the reported amounts of certain assets and liabilities, the revenues and expenses reported for the periods covered by the accompanying consolidated financial statements, and certain amounts disclosed in these Notes to the Consolidated Financial Statements. Although such estimates and assumptions are based on management’s most recent assessment of the underlying facts and circumstances utilizing the most current information available and past experience, actual results could differ significantly from those estimates and assumptions. Our estimates, judgments, and assumptions are evaluated periodically and adjusted accordingly.
Please refer to Note 2- Significant Accounting Policies of Notes to Consolidated Financial Statements included in our 2019 Form 10-K for a discussion of other significant estimates and assumptions affecting our consolidated financial statements.
3. Fair Value and Fair Value Measurements
Certain amounts included in the accompanying consolidated financial statements are presented at “fair value.” Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as of the date fair value is determined (the “measurement date”). When determining fair value, we consider the principal or most advantageous market in which we would transact, and we consider only those assumptions we believe a typical market participant would consider when pricing an asset or liability. In measuring fair value, we use the following inputs in the order of priority indicated:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Observable inputs other than quoted prices in active markets included in Level 1, such as (i) quoted prices for similar assets or liabilities; (ii) quoted prices in markets that have insufficient volume or infrequent transactions (e.g., less active markets); and (iii) model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data for substantially the full term of the asset or liability.
Level 3 - Unobservable inputs to the valuation methodology that are significant to the fair value measurement.
Please refer to Note 2- Significant Accounting Policies of Notes to Consolidated Financial Statements included in our 2019 Form 10-K for a more complete discussion of the various items within the consolidated financial statements measured at fair value and the methods used to determine fair value. Please also refer to Note 7- Sale of Energy, Chemicals and Resources for discussion regarding the Company's investment in Worley ordinary shares.
The net carrying amounts of cash and cash equivalents, trade receivables and payables and short-term debt approximate fair value due to the short-term nature of these instruments. See Note 12- Borrowings for a discussion of the fair value of long-term debt.
Page 10

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
4. New Accounting Pronouncements
In August 2017, the FASB issued ASU No. 2017-12, Derivatives and Hedging ("ASC 815"): Targeted Improvements to Accounting for Hedging Activities. ASU 2017-12 provides financial reporting improvements related to hedging relationships to better portray the economic results of an entity’s risk management activities in its financial statements. Additionally, ASU No. 2017-12 makes certain targeted improvements to simplify the application of the hedge accounting guidance. The revised guidance is effective for fiscal years beginning after December 15, 2018 with early adoption permitted. The updated guidance did not have a significant impact on the Company’s consolidated financial statements.
ASU 2017-04, Simplifying the Test for Goodwill Impairment, is effective for fiscal years beginning after December 15, 2019 with early adoption permitted. ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. An entity will now recognize a goodwill impairment charge for the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the amount of goodwill allocated to the reporting unit. Management does not expect the adoption of ASU 2017-04 to have any impact on the Company's financial position, results of operations or cash flows.
ASU No. 2016-13, Financial Instruments - Credit Losses ("ASC 326"): Measurement of Credit Losses on Financial Instruments requires entities to use a current lifetime expected credit loss methodology to measure impairments of certain financial assets. Using this methodology will result in earlier recognition of losses than under the current incurred loss approach, which requires waiting to recognize a loss until it is probable of having been incurred. There are other provisions within the standard that affect how impairments of other financial assets may be recorded and presented, and that expand disclosures. This standard will be effective for our interim and annual periods beginning with the first quarter of fiscal 2021, and must be applied on a modified retrospective basis. We are currently evaluating the potential impact of this standard.
5. Business Combinations
KeyW
On June 12, 2019, Jacobs completed the acquisition of The KeyW Holding Corporation (“KeyW”), a U.S. based national security solutions provider to the intelligence, cyber, and counterterrorism communities, by acquiring 100% of the outstanding shares of KeyW common stock. The acquisition allows Jacobs to further expand its government services business. The Company paid total consideration of $902.6 million which was comprised of approximately $604.2 million in cash to the former stockholders and certain equity award holders of KeyW and the assumption of KeyW’s debt of approximately $298.4 million.  The Company has repaid all of the assumed KeyW debt by the end of Q4 fiscal 2019.
The following summarizes the fair values of KeyW assets and acquired liabilities assumed as of the acquisition date (in millions): 
Page 11

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Assets
Cash and cash equivalents$29.1  
Receivables80.1  
Inventories, net21.3  
Prepaid expenses and other2.5  
Property, equipment and improvements, net25.9  
Deferred tax asset and other35.4  
Goodwill613.1  
Identifiable intangible assets179.0  
Total Assets
$986.4  
Liabilities
Accounts payable$8.3  
Accrued expenses68.7  
Short term debt298.4  
Other current liabilities3.9  
Other non-current liabilities2.9  
Total Liabilities
382.2  
Net assets acquired$604.2  
The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained. Goodwill recognized results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. Goodwill recognized of $136.0 million is expected to be deductible for tax purposes. The Company has not completed its final assessment of the fair values of purchased receivables, tax balances or contingent liabilities. The final purchase price allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill. 
Identified intangibles include customer relationships, contracts and backlog and developed technology. The customer relationships, contracts and backlog intangible represents the fair value of existing contracts, underlying customer relationships and backlog. The customer relationships, contract and backlog intangible, and the developed technology intangible have lives of 10 and 12 years, respectively. Other intangible liabilities consist of the fair value of office leases and have a weighted average life of approximately 9 years.
Fair value measurements relating to the KeyW acquisition are made primarily using Level 3 inputs including discounted cash flow techniques. Fair value is estimated using inputs primarily for the income approach, which include the use of both the multiple period excess earnings method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) the estimated life the asset will contribute to cash flows, such as attrition rate of customers or remaining contractual terms, (ii) profitability and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows. Other personal property assets such as furniture, fixtures and equipment are valued using the cost approach which is based on replacement or reproduction costs of the asset less depreciation.
The following presents summarized unaudited pro forma operating results of Jacobs assuming that the Company had acquired KeyW at October 1, 2017. These pro forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the related events occurred (in millions, except per share data):
Page 12

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Three Months Ended December 28, 2018
Revenues$3,210.1  
Net earnings of the Group$69.0  
Net earnings (loss) attributable to Jacobs$64.5  
Net earnings (loss) attributable to Jacobs per share:
Basic earnings (loss) per share$0.45  
Diluted earnings (loss) per share$0.45  
Included in the table above are the unaudited pro forma operating results of continuing operations. Also, income tax expense (benefit) for the three-month pro forma period ended December 28, 2018 was $23.3 million.
John Wood Group's Nuclear Business
On August 20, 2019, Jacobs announced the entry into an agreement to acquire John Wood Group's Nuclear consulting, remediation and program management business for an enterprise value of £250 million (approximately $300 million) on a debt-free, cash-free basis. The transaction is expected to close by the end of the second quarter of fiscal 2020.
6. Goodwill and Intangibles
The carrying value of goodwill associated with continuing operations and appearing in the accompanying Consolidated Balance Sheets at December 27, 2019 and September 27, 2019 was as follows (in millions):
Critical Mission SolutionsPeople & Places SolutionsTotal
Balance September 27, 2019$2,202  $3,231  $5,433  
Post-Acquisition Adjustments1    1  
Foreign Exchange Impact1  2  3  
Balance December 27, 2019$2,204  $3,233  $5,437  
The following table provides certain information related to the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets at December 27, 2019 and September 27, 2019 (in thousands):
Customer Relationships, Contracts and BacklogDeveloped TechnologyTrade NamesLease Intangible AssetsTotal
Balances September 27, 2019$622,392  $40,833  $1,183  $668  $665,076  
Amortization(21,081) (875) (71) 182  (21,845) 
Foreign currency translation2,656      (419) 2,237  
Balances December 27, 2019$603,967  $39,958  $1,112  $431  $645,468  
In addition, we acquired $4.7 million in lease intangible liabilities in connection with the acquisitions of CH2M HILL Companies, Ltd. in 2017 and of KeyW, of which $3.8 million remains unamortized at December 27, 2019.
The following table presents estimated amortization expense of intangible assets for the remainder of fiscal 2020 and for the succeeding years.
Page 13

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
Fiscal Year(in millions)
2020$67.4  
202182.5  
202281.7  
202381.4  
202481.4  
Thereafter247.3  
Total$641.7  

7.  Sale of Energy, Chemicals and Resources ("ECR") Business
On April 26, 2019, Jacobs completed the sale of its ECR business to Worley for a purchase price of $3.4 billion consisting of (i) $2.8 billion in cash plus (ii) 58.2 million ordinary shares of Worley, subject to adjustments for changes in working capital and certain other items (the “ECR sale”). The stock purchase agreement for the ECR sale contained a lock-up on our ability to sell the Worley shares received in the transaction, which expired in the first quarter of fiscal 2020.
Gain on Sale and Deferred Gain
As a result of the sale of the ECR business, the Company recognized a pre-tax gain of $1.0 billion, $935.1 million of which was recognized in fiscal 2019 and $61.9 million which is included in Net Earnings of the Group from Discontinued Operations on the consolidated statement of earnings for the three months ended December 27, 2019, which is further discussed below.
Upon closing the ECR sale, the Company retained a noncontrolling interest (with significant influence) in People & Places Solutions ("P&PS")-related activities in one international legal entity that is now controlled and consolidated by Worley. The fair value of the Company’s retained interest in the net assets and liabilities of this entity was estimated at $33.0 million and recorded at closing. For another international legal entity, the closing and transfer of ECR-related assets to Worley will occur at a future date, currently estimated to be in the second quarter of fiscal 2020. Accordingly, the Company allocated proceeds received to this deferred closing on a relative fair value basis and recognized a deferred gain of $34.4 million, which will be recorded in income when the ECR-related assets are transferred. Subsequent to quarter end, the Company received the approval from the relevant regulatory body for this transfer.
In addition to consideration received for the sale of the business, the proceeds received included advanced consideration for the Company to deliver IT application and related hardware assets at a future date (ECR Business “IT Migration Date”) to Worley upon completion of the interim transition services, described further below. This deliverable of IT assets was considered to be a separate element of the ECR business sale transaction, and accordingly, we allocated a portion of the proceeds received of $95.3 million on a relative fair value basis to this separate deliverable and recognized deferred income. Upon completion and acceptance of this deliverable by Worley in December 2019, the deferred proceeds were recognized in income, along with expenses associated with any costs incurred and deferred by the Company for this deliverable.
Investment in Worley Stock
As discussed above, the Company received 58.2 million in ordinary shares of Worley. Pursuant to the purchase agreement for the ECR sale, 51.4 million of the shares were considered "restricted" during a lock-up period beginning April 26, 2019 and ending in December 2019. During the lock-up period Jacobs could not, without Worley's consent, directly or indirectly dispose of the "restricted" shares. The remaining 6.8 million shares not considered "restricted" were sold in the prior year, netting a loss of $4.9 million, which was recognized in miscellaneous income (expense), net. Dividend income and unrealized gains and losses on changes in fair value of Worley shares are recognized in miscellaneous income (expense), net in continuing operations.
Page 14

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The Company's investment in Worley is measured at fair value through net income as it is an equity investment with a readily determinable fair value based on quoted market prices. The 51.4 million ordinary shares that are no longer considered "restricted" are recorded within prepaid expenses and other in the Company's consolidated balance sheets at their estimated fair value, which is $556.5 million as of December 27, 2019. Quoted market prices are available for these securities in an active market and therefore categorized as a Level 1 input.
Transition Service Agreement
Upon closing of the ECR sale, the Company entered into a Transition Services Agreement ("TSA") with Worley pursuant to which the Company, on an interim basis, provides various services to Worley including executive consultation, corporate, information technology, and project services. The term of the TSA agreement began immediately following closing of the ECR sale on April 26, 2019 and will continue for up to one year, with an option to extend the period if mutually agreed upon. Pursuant to the terms of the TSA, the Company will receive payments for the interim services which approximate costs incurred to perform the services. The Company has recognized costs recorded in SG&A expense incurred to perform the TSA, offset by $12.0 million in TSA related income for such services that is reported in miscellaneous income (expense) for the three months ended December 27, 2019 before inclusion of certain incremental outside service support costs agreed to be shared equally by the parties.
Discontinued Operations
As a result of the ECR sale, substantially all ECR-related assets and liabilities have been sold (the "Disposal Group"). 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 had 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. Additionally, current and non-current assets and liabilities of the Disposal Group are reflected as held-for-sale in the unaudited Consolidated Balance Sheets. As of the quarter ended December 27, 2019, a portion of the ECR business remains held by Jacobs as described above and continues to be classified as held for sale during the first fiscal quarter of 2020 in accordance with U.S. GAAP.
Summarized Financial Information of Discontinued Operations
The following table represents earnings (loss) from discontinued operations, net of tax (in thousands):

Three Months Ended
December 27, 2019December 28, 2018
Revenues$7,099  $1,164,707  
Direct cost of contracts(4,692)