Amentum Holdings, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Consolidated Financial Statements Report of Independent Registered Public Accounting Firm (PCAOB ID: 42 ) 54 Consolidated Balance Sheets 56 Consolidated Statements of Operations 57 Consolidated Statements of Comprehensive Income (Loss) 58 Consolidated Statements of Shareholders' Equity 59 Consolidated Statements of Cash Flows 60 Notes to Consolidated Financial Statements of Amentum Holdings, Inc. 61 Note 1 — Organization and Description of Business 61 Note 2 — Summary of Significant Accounting Policies 61 Note 3 — Recent Accounting Pronouncements 66 Note 4 — Acquisition and Divestiture 66 Note 5 — Revenues 68 Note 6 — Contract Balances 70 Note 7 — Sales of Receivables 70 Note 8 — Goodwill and Intangible Assets 71 Note 9 — Income Taxes 72 Note 10 — Retirement Plans 74 Note 11 — Stock-Based Compensation 76 Note 12 — Debt 78 Note 13 — Fair Value of Financial Assets and Liabilities 81 Note 14 — Leases 81 Note 15 — Related Parties 83 Note 16 — Joint Ventures 83 Note 17 — Accumulated Other Comprehensive Income (Loss) 85 Note 18 — Segment Information 85 Note 19 — Composition of Certain Financial Statement Captions 86 Note 20 — Earnings (Loss) Per Share 88 Note 21 — Legal Proceedings and Commitments and Contingencies 88 53 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Amentum Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of Amentum Holdings, Inc. (the Company) as of October 3, 2025 and September 27, 2024, the related consolidated statements of operations, comprehensive income (loss), shareholders' equity and cash flows for each of the three years in the period ended October 3, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at October 3, 2025 and September 27, 2024, and the results of its operations and its cash flows for each of the three years in the period ended October 3, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of October 3, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 25, 2025 expressed an unqualified opinion thereon. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account to which it relates. 54 Revenue recognition related to the cost-based input method for certain fixed-price contracts Description of the Matter As described in Note 2 to the consolidated financial statements, the Company generally recognizes revenue over time as performance obligations are satisfied as most of its contracts involve a continuous transfer of control to the customer. For many fixed-price contracts, revenue is recognized under a cost-based input method that requires an estimate of total costs at contract completion. Estimates of total costs at contract completion for these contracts can change over the contract performance period due to a wide range of variables, and these changes could affect the Company’s results of operations. Auditing total costs at contract completion for certain fixed-price contracts was complex due to the judgment involved in evaluating management’s estimates of contract costs at completion which include cost elements required to complete associated tasks of the contract. These cost elements may include employee labor costs, the cost of materials, and the performance of subcontractors. How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design, and tested the operating effectiveness of controls related to the Company’s revenue recognition process, including controls over management’s estimates of total costs at completion for certain fixed-price contracts. To test the completeness and accuracy of the Company’s estimates of total costs at contract completion for certain fixed-price contracts where revenue is recognized under a cost-based input method, our audit procedures included, among others, comparing estimated costs to actual costs incurred to date, agreeing key terms to contract documentation, and obtaining an understanding of the Company’s progress on the contract. /s/ Ernst & Young LLP We have served as the Company’s auditor since 2020. Tysons, Virginia November 25, 2025 55 AMENTUM HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (in millions, except per share data) October 3, 2025 September 27, 2024 ASSETS Current assets: Cash and cash equivalents $ 437 $ 452 Accounts receivable, net 2,479 2,401 Prepaid expenses and other current assets 197 231 Total current assets 3,113 3,084 Property and equipment, net 114 144 Equity method investments 196 123 Goodwill 5,703 5,556 Intangible assets, net 1,955 2,623 Other long-term assets 379 444 Total assets $ 11,460 $ 11,974 LIABILITIES Current liabilities: Current portion of long-term debt $ 42 $ 36 Accounts payable 892 764 Accrued compensation and benefits 705 696 Contract liabilities 227 113 Other current liabilities 488 356 Total current liabilities 2,354 1,965 Long-term debt, net of current portion 3,901 4,643 Deferred tax liabilities 260 370 Other long-term liabilities 325 444 Total liabilities 6,840 7,422 Commitments and contingencies (Note 21) SHAREHOLDERS' EQUITY Common stock, $ 0.01 par value – 1,000,000,000 shares authorized and 243,464,776 shares issued and outstanding at October 3, 2025; 1,000,000,000 shares authorized and 243,302,173 shares issued and outstanding at September 27, 2024. 2 2 Additional paid-in capital 4,924 4,962 Retained deficit ( 461 ) ( 527 ) Accumulated other comprehensive income 40 23 Total Amentum shareholders' equity 4,505 4,460 Non-controlling interests 115 92 Total shareholders' equity 4,620 4,552 Total liabilities and shareholders' equity $ 11,460 $ 11,974 See notes to consolidated financial statements 56 AMENTUM HOLDINGS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (in millions, except per share data) For the years ended October 3, 2025 September 27, 2024 September 29, 2023 Revenues $ 14,393 $ 8,388 $ 7,865 Cost of revenues ( 12,880 ) ( 7,590 ) ( 7,083 ) Selling, general, and administrative expenses ( 616 ) ( 353 ) ( 297 ) Amortization of intangibles ( 479 ) ( 228 ) ( 298 ) Equity earnings of non-consolidated subsidiaries 62 74 56 Goodwill impairment charges — — ( 186 ) Operating income 480 291 57 Interest expense and other, net ( 353 ) ( 438 ) ( 397 ) Loss on extinguishment of debt ( 12 ) ( 45 ) — Gain on acquisition of controlling interest — 69 — Income (loss) before income taxes 115 ( 123 ) ( 340 ) (Provision) benefit for income taxes ( 56 ) 40 19 Net income (loss) including non-controlling interests 59 ( 83 ) ( 321 ) Less: net income attributable to non-controlling interests 7 1 7 Net income (loss) attributable to common shareholders $ 66 $ ( 82 ) $ ( 314 ) Earnings (loss) per share: Basic $ 0.27 $ ( 0.90 ) $ ( 3.49 ) Diluted $ 0.27 $ ( 0.90 ) $ ( 3.49 ) See notes to consolidated financial statements 57 AMENTUM HOLDINGS, INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in millions) For the years ended October 3, 2025 September 27, 2024 September 29, 2023 Net income (loss) including non-controlling interests $ 59 $ ( 83 ) $ ( 321 ) Other comprehensive income (loss): Net unrealized gain (loss) on interest rate swaps 14 ( 47 ) 25 Foreign currency translation adjustments 3 8 3 Pension adjustments 2 9 24 Other comprehensive income (loss) 19 ( 30 ) 52 Income tax (provision) benefit related to items of other comprehensive income (loss) ( 2 ) 5 ( 13 ) Other comprehensive income (loss), net of tax 17 ( 25 ) 39 Comprehensive income (loss) 76 ( 108 ) ( 282 ) Net income (loss) attributable to non-controlling interests 7 1 7 Comprehensive income (loss) attributable to common shareholders $ 83 $ ( 107 ) $ ( 275 ) See notes to consolidated financial statements 58 AMENTUM HOLDINGS, INC. CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (in millions) Common Stock Additional Paid-in Capital Retained Deficit Accumulated Other Comprehensive Income (Loss) Total Shareholders' Equity Attributable to Amentum Holdings, Inc. Non-controlling Interests Total Shareholders' Equity Shares Amount Balance at September 30, 2022 — $ — $ 755 $ ( 131 ) $ 9 $ 633 $ 73 $ 706 Net loss including non-controlling interests — — — ( 314 ) — ( 314 ) ( 7 ) ( 321 ) Other comprehensive loss, net of tax — — — — 39 39 — 39 Acquisition of remaining interest in consolidated joint ventures — — 14 — — 14 ( 14 ) — Capital contribution from non-controlling interest — — — — — — 13 13 Distributions to non-controlling interests — — — — — — ( 24 ) ( 24 ) Stock-based compensation and other — — 3 — — 3 — 3 Balance at September 29, 2023 — $ — $ 772 $ ( 445 ) $ 48 $ 375 $ 41 $ 416 Net loss including non-controlling interests — — — ( 82 ) — ( 82 ) ( 1 ) ( 83 ) Other comprehensive loss, net of tax — — — — ( 25 ) ( 25 ) — ( 25 ) Acquisition of CMS 243 2 3,935 — — 3,937 63 4,000 Capital contribution — — 235 — — 235 — 235 Distributions to non-controlling interests — — — — — — ( 6 ) ( 6 ) Stock-based compensation and other — — 20 — — 20 ( 5 ) 15 Balance at September 27, 2024 243 $ 2 $ 4,962 $ ( 527 ) $ 23 $ 4,460 $ 92 $ 4,552 Net income including non-controlling interests — — — 66 — 66 ( 7 ) 59 Other comprehensive income, net of tax — — — — 17 17 — 17 Measurement period adjustments — — ( 63 ) — — ( 63 ) 64 1 Issuances of common stock — — 4 — — 4 — 4 Capital contribution from non-controlling interest — — — — — — 3 3 Distributions to non-controlling interests — — — — — — ( 35 ) ( 35 ) Stock-based compensation and other — — 21 — — 21 ( 2 ) 19 Balance at October 3, 2025 243 $ 2 $ 4,924 $ ( 461 ) $ 40 $ 4,505 $ 115 $ 4,620 See notes to consolidated financial statements 59 AMENTUM HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in millions) For the years ended October 3, 2025 September 27, 2024 September 29, 2023 Cash flows from operating activities Net income (loss) including non-controlling interests $ 59 $ ( 83 ) $ ( 321 ) Adjustments to reconcile net income (loss) including non-controlling interests to net cash provided by operating activities: Depreciation 40 23 27 Amortization of intangibles 479 228 298 Amortization of deferred loan costs and original issue discount 11 22 21 Goodwill impairment charges — — 186 Derivative instruments 10 37 21 Equity earnings of non-consolidated subsidiaries ( 62 ) ( 74 ) ( 56 ) Distributions from equity method investments 76 61 49 Deferred income taxes ( 47 ) ( 115 ) ( 62 ) Stock-based compensation 21 18 3 Gain on acquisition of controlling interest — ( 69 ) — Other 17 14 2 Changes in assets and liabilities, net of effects of business acquisition: Accounts receivable, net ( 171 ) 81 ( 68 ) Prepaid expenses and other assets 81 78 56 Accounts payable, contract liabilities, and other current liabilities 54 ( 211 ) ( 24 ) Accrued compensation and benefits 28 43 ( 82 ) Other long-term liabilities ( 53 ) ( 6 ) 17 Net cash provided by operating activities 543 47 67 Cash flows from investing activities Acquisitions, net of cash acquired ( 70 ) 488 — Divestitures, net of cash conveyed 365 — — Purchase of property and equipment ( 27 ) ( 11 ) ( 12 ) Contributions to equity method investments ( 56 ) ( 1 ) ( 17 ) Return of capital from equity method investments 19 — 14 Other ( 3 ) ( 1 ) ( 2 ) Net cash provided by (used in) investing activities 228 475 ( 17 ) Cash flows from financing activities Borrowings on revolving credit facilities 1,146 562 1,201 Payments on revolving credit facilities ( 1,146 ) ( 562 ) ( 1,201 ) Proceeds from borrowing under the term loans — 2,620 — Repayments of borrowings under the credit agreement ( 750 ) ( 4,177 ) ( 34 ) Proceeds from issuance of Senior Notes — 1,000 — Payments of debt issuance fees — ( 38 ) — Repayments of borrowings under other agreements ( 9 ) ( 13 ) ( 67 ) Capital contribution — 235 — Capital contribution from non-controlling interests 3 — 13 Distributions to non-controlling interests ( 35 ) ( 6 ) ( 24 ) Other 1 ( 3 ) — Net cash used in financing activities ( 790 ) ( 382 ) ( 112 ) Effect of exchange rate changes on cash 4 7 1 Net change in cash and cash equivalents ( 15 ) 147 ( 61 ) Cash and cash equivalents, beginning of period 452 305 366 Cash and cash equivalents, end of period $ 437 $ 452 $ 305 Supplemental disclosure of cash flow information Common stock issued for the Transaction $ ( 63 ) $ 3,937 $ — Income taxes paid, net of receipts $ ( 107 ) $ ( 95 ) $ ( 26 ) Interest paid $ ( 306 ) $ ( 373 ) $ ( 362 ) See notes to consolidated financial statements 60 AMENTUM HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 — Organization and Description of Business Amentum Holdings, Inc. (collectively with its subsidiaries, “we,” “us,” “our,” “Amentum,” or the “Company”) is a global advanced engineering and technology solutions provider to a broad base of U.S. and allied government agencies, and customers in international and commercial markets, supporting programs of critical national importance across energy and environmental, intelligence, space, defense, civilian and commercial end-markets. We offer a broad reach of capabilities including energy, environmental remediation, intelligence and counter threat solutions, data fusion and analytics, engineering and integration, advanced test, training and readiness, and citizen solutions. As a leading provider of differentiated technology solutions, we have built a repertoire of deep customer knowledge, enabling us to engage our customers across multiple capabilities and markets. On September 27, 2024, the spin-off of the Jacobs Solutions Inc. (“Jacobs”) Critical Mission Solutions business and portions of the Jacobs Divergent Solutions business (and, together with the Critical Mission Solutions business, referred to as “CMS”) merged with Amentum Parent Holdings LLC (collectively, the “Transaction”) with the surviving entity renamed Amentum Holdings, Inc. We conduct our business activities and report financial results as two reportable segments: Digital Solutions and Global Engineering Solutions. The Digital Solutions segment provides advanced digital and data-driven solutions including intelligence analytics, space system development, cybersecurity, and next generation IT across the federal government and commercial clients. The Global Engineering Solutions segment provides large-scale environmental remediation, nuclear power solutions, platform engineering, sustainment and supply chain management across all seven continents for the U.S. government and allied nations. Amentum's Registration Statement on Form 10 (the “Registration Statement”), filed with the Securities and Exchange Commission (“SEC”) on July 15, 2024, was declared effective on September 18, 2024. Amentum Parent Holdings LLC is the accounting acquirer of CMS for accounting purposes in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Amentum Parent Holdings LLC is considered the Company’s predecessor and the historical financial statements of Amentum Parent Holdings LLC prior to September 27, 2024, are reflected in this Annual Report on Form 10-K as the Company’s historical financial statements. Accordingly, the financial results of the Company prior to September 27, 2024 do not include the financial results of CMS and current and future results will not be comparable to historical results. Note 2 — Summary of Significant Accounting Policies Reporting Periods Amentum’s fiscal year ends on the Friday nearest the end of September. Fiscal year 2025 ended on October 3, 2025 and included 53 weeks, with the 53rd week falling in the fourth fiscal quarter. Fiscal year 2024 and fiscal year 2023 ended on September 27, 2024 and September 29, 2023, respectively, and both included 52 weeks. Principles of Consolidation and Basis of Presentation The accompanying consolidated financial statements have been prepared in accordance with GAAP. The consolidated balance sheets as of October 3, 2025 and September 27, 2024 are for Amentum Holdings, Inc. and include CMS, which was acquired by the Company on September 27, 2024. The consolidated statement of operations and statement of cash flows for the year ended October 3, 2025 are for Amentum Holdings, Inc. and include CMS activity. The consolidated statement of operations and statement of cash flows for the years ended September 27, 2024 and September 29, 2023 do not include CMS activity due to the Transaction closing on September 27, 2024. The consolidated financial statements include the accounts of the Company's wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company has investments in joint ventures that are variable interest entities (“VIEs”). The VIEs are accounted for in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810, Consolidation . In cases where the Company has (i) the power to direct the activities of the VIE that most significantly impact its economic performance and (ii) the obligation to absorb losses of the VIE that could potentially be significant or the right to receive benefits from the entity that could potentially be significant to the VIE, the Company consolidates the entity. When the Company consolidates an entity that is not wholly-owned, the Company reports the minority interests in the entity as non-controlling interests in the equity section of the consolidated balance sheets. The Company has included the non-controlling interest in earnings of the entities within the consolidated net loss including non-controlling interests and deducted the same amount to derive net loss attributable to 61 common shareholders. Alternatively, in cases where all of the aforementioned criteria are not met, the investment is accounted for under the equity method. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities, and the reported amount of revenues and expenses. The most significant estimates relate to estimating contract revenues and costs at completion, fair value measurements, fair value of goodwill and intangible assets, valuation allowances, and reserves for contract-related matters and contingencies. Due to the size and nature of many of our contracts, the estimation of total revenues and cost at completion is subject to a wide range of variables. Actual results may differ from these estimates. Revenue Recognition The Company generates revenue from service arrangements primarily with the U.S. government, including subcontracts with other contractors performing work for the U.S. government. The Company also serves state, local and foreign governments and commercial customers. Our services are generally performed under cost-plus-fee, fixed-price, or time-and-materials contracts which typically involve an annual base period of performance followed by renewal option periods that, once exercised, are generally accounted for as separate contracts. We account for a contract when the parties have approved the contract and are committed to perform their respective obligations, the rights of each party and the payment terms are identified, the contract has commercial substance, and collectability is probable. To determine the proper revenue recognition, we assess whether the distinct goods or services to be provided are to be accounted for as a single performance obligation or as multiple performance obligations. The majority of our contracts have a single performance obligation as the promise to transfer the respective goods or services is not separately identifiable from other promises in the contract and is therefore not distinct. We also evaluate whether modifications to existing contracts should be accounted for as part of the original contract or as a separate contract. Contract modifications that do not add distinct goods or services are accounted for through cumulative catch-up adjustments. Contract modifications that add distinct goods or services and increase the contract value by an amount that reflects the standalone selling price are accounted for as separate contracts. The transaction price is the estimated amount of fixed and variable consideration we expect to receive for performance of our contracts. Variable consideration is typically in the form of award or incentive fees or a combination thereof. Variable consideration is generally based upon various objective and subjective criteria, such as meeting performance or cost targets. These estimates are based on historical award experience, anticipated performance and our best judgment based on current facts and circumstances. Management continuously monitors these factors that may affect the quality of its estimates, and material changes in estimates are disclosed accordingly. Variable consideration is included in the estimated transaction price, to the extent that it is probable that a significant reversal of cumulative revenues recognized will not occur, and there is a basis to reasonably estimate the amount of variable consideration. The Company generally recognizes revenues over time throughout the contract performance period as control is transferred continuously to our customers as work progresses. We measure our progress towards completion using an input measure of total costs incurred divided by total costs expected to be incurred. Revenues on cost-plus-fee contracts are recorded as contract allowable costs are incurred and fees are earned. Revenues are recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Revenues on fixed-price contracts are recorded as work is performed over the period of performance. Revenues are recognized over time using costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying our performance obligations. Incurred cost represents work performed, which corresponds with the transfer of control to the customer. For such contracts, we estimate total costs at the inception of the contract based on our assumptions of the cost elements required to complete the associated tasks of the contract and assess the impact of the risks on our estimates of total costs to complete the contract. Our cost estimates are based on assumptions that include our employee labor costs, the cost of materials, and the performance of our subcontractors. These cost estimates are subject to change as we perform under the contract and as a result, the timing of revenues and amount of profit on a contract may change as there are changes in estimated costs to complete the contract. Such adjustments are recognized on a cumulative catch-up basis in the period we identify the changes. If total expected costs exceed total estimated contract revenues, a provision for the entire expected loss on the contract is recorded in the period in which the loss is identified. Total estimated losses are inclusive of any unexercised options that are probable of award, only if they increase the amount of the loss. 62 Revenues for time-and-materials contracts are recorded based on the amount for which we have the right to invoice our customers, because the amount directly reflects the value of our work performed for the customer. Revenues are recorded on the basis of contract allowable labor hours worked multiplied by the contract defined billing rates, plus the direct costs and indirect cost burdens associated with materials and subcontract work used in performance on the contract. Generally, profits on time-and-materials contracts result from the difference between the cost of services performed and the contractually defined billing rates for these services. Changes in Estimates on Contracts The Company recognizes revenues on performance obligations using a cost-to-cost input method based on the ratio of costs incurred to date to total estimated costs at completion. Changes in estimates of revenues and costs of revenues related to performance obligations satisfied over time are recognized in the period in which the changes are made for the inception-to-date effect of the changes. The Company uses professional judgment when assessing risks, estimating contract revenues and costs, estimating variable consideration, and making assumptions for schedule and technical issues. The Company periodically reassesses its assumptions and estimates as needed. When estimates of total costs to be incurred on a contract exceed total revenues, a provision for the entire loss on the contract is recorded in the period in which the loss is determined. Total estimated losses are inclusive of any unexercised contract options that are probable of award. Cost of Revenues Cost of revenues includes all direct contract costs such as labor, materials, and subcontractor costs, allocations of indirect costs, and depreciation expense related to property and equipment directly attributable to contracts. Selling, General, and Administrative Expenses Selling, general, and administrative expenses include indirect costs that are allowable and allocable to contracts under federal procurement standards. Selling, general, and administrative expenses also include expenses that are unallowable under applicable procurement standards and are not allocable to contracts for billing purposes. Such unallowable expenses do not directly generate revenues but are necessary for business operations. Cash and Cash Equivalents The Company considers cash on deposit and all highly liquid investments with original maturities of three months or fewer at the date of purchase to be cash and cash equivalents. Accounts Receivable Accounts receivable include billed and billable receivables, and unbilled receivables. Billed and billable receivables represent amounts in which the right to consideration is unconditional other than the passage of time. The Company records its billed and billable receivables net of an allowance for expected credit losses. Upon determination that a specific receivable is uncollectible, the receivable is written off against the allowance for expected credit losses. Contract Assets Contract assets represent unbilled receivables in which our right to consideration is conditional upon factors other than the passage of time. Contract assets exclude billed and billable receivables. Contract assets consist of costs and fees that are billable on contract completion or billable upon other specified events, such as the completion of a milestone, retention of fees until contract completion, or resolution of a formal claim. Accounting for Sales of Accounts Receivable The Company considers accounts receivable transfers under its Master Accounts Receivable Purchase Agreement (“MARPA”) as sales under ASC 860, Transfers and Servicing , and derecognizes the sold accounts receivable from its balance sheet. The fair value of the sold accounts receivable approximated their book value due to their short-term nature. Contract Liabilities Contract liabilities represent advanced payments received from a customer and billings in excess of revenues recognized as of the balance sheet date. These amounts are subsequently recognized into revenues as the performance obligation is satisfied. Property and Equipment Property and equipment are recorded at cost and are depreciated over their estimated useful lives using the straight-line method. We review the carrying amounts of long-lived assets for impairment whenever there is evidence that events or changes in circumstances indicate that the carrying value may not be recoverable and the carrying amount of the asset exceeds its estimated fair value. Leases 63 The Company enters into contractual arrangements primarily for the use of real estate facilities, information technology equipment, vehicles, and certain other equipment. These arrangements contain a lease when the Company controls the underlying asset and has the right to obtain substantially all of the economic benefits or outputs from the asset. We have short-term leases, operating leases, and finance leases. The Company accounts for leases in accordance with principles contained in ASC 842, Leases . The Company categorizes leases with contractual terms longer than twelve months as either operating or finance leases. Finance leases are generally those leases that allow us to substantially utilize or pay for the entire asset over its estimated life. Assets acquired under finance leases are recorded in property and equipment, net. Finance lease assets are amortized within cost of revenues on a straight-line basis over the shorter of the estimated useful lives of the assets or, in the instance where title does not transfer at the end of the lease term, the lease term. The interest component of a finance lease is included in interest expense and other, net and recognized using the effective interest method over the lease term. The Company records a right-of-use asset and lease liability as of the lease commencement date equal to the present value of the remaining lease payments for its operating and finance leases. Most of our leases do not provide an implicit rate that can be readily determined. Therefore, we use a discount rate based on the Company’s incremental borrowing rate, which is determined using our credit rating and information available as of the commencement date. The right-of-use asset is then adjusted for initial direct costs and certain lease incentives included in the contractual arrangement. The Company has elected the practical expedient to apply the lease recognition guidance for short-term leases defined as twelve months or fewer. Our operating lease arrangements may contain options to extend the lease term or for early termination. We account for these options when it is reasonably certain we will exercise them. Right-of-use assets are evaluated for impairment in a manner consistent with the treatment of other long-lived assets. Operating lease expense is recognized on a straight-line basis over the lease term and is recorded within cost of revenues or selling, general, and administrative expenses on the consolidated statements of operations. Business Combinations The Company records all tangible and intangible assets acquired and liabilities assumed in a business combination at fair value as of the acquisition date, with any excess purchase consideration recorded as goodwill. Determining the fair value of acquired intangible assets requires management to make significant judgments about expected future cash flows, weighted-average cost of capital, discount rates, useful lives of assets and expected long-term growth rates. During the measurement period, not to exceed one year from the acquisition date, the Company may adjust provisional amounts recorded to reflect new information subsequently obtained regarding facts and circumstances that existed as of the acquisition date. Intangible Assets The Company primarily amortizes intangible assets using an accelerated method which best approximates the proportion of the future cash flows estimated to be generated in each period over the estimated useful life of the applicable asset and evaluated on an annual basis to ensure continued appropriateness unless their estimated useful lives are determined to be indefinite or the estimated cash flows indicate another pattern of amortization should be used. Goodwill Goodwill represents the excess of amounts paid over the estimated fair value of net assets acquired from an acquisition. The Company evaluates goodwill for impairment annually on the first day of the fourth quarter of the fiscal year or whenever events or circumstances indicate that the carrying value may not be recoverable. The evaluation includes a qualitative or quantitative assessment that compares the estimated fair value of the relevant reporting unit to its respective carrying value, including goodwill, and utilizes both market and income approaches, which are Level 2 and Level 3 inputs, respectively. The market approach utilizes observable Level 2 inputs as it considered the inputs of other comparable companies. The income approach utilizes unobservable inputs and management judgment which are Level 3 fair value measurements. The analysis utilizes judgments and assumptions about expected growth rates, terminal earnings before interest, taxes, depreciation and amortization (“EBITDA”) margins, discount rates based on weighted-average cost of capital, assumptions regarding future capital expenditures and observable inputs of other comparable companies. The fair value of each reporting unit is compared to the carrying amount of the reporting unit and if the carrying amount of the reporting unit exceeds the fair value, then an impairment loss is recognized for the difference. Commitments and Contingencies Accruals for commitments and loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. Defined Benefit Pension Plans 64 Accounting and reporting for the Company’s defined benefit pension plans require the use of assumptions, including but not limited to, a discount rate and an expected return on assets. We base the discount rate on a yield curve developed from corporate bonds rated AA or better with maturities consistent with our projected defined benefit plan cash flows. We evaluate the discount rate and related assumptions at least annually based on reviews of current plan information and consultation with the Company's independent actuary and the plans’ investment advisor. If these assumptions differ materially from actual results, the Company’s obligations under the defined benefit pension plans could also differ materially, potentially requiring the Company to record an additional liability. The Company’s defined benefit pension plan liabilities are developed from actuarial valuations, which are performed each year. Income Taxes The Company provides for income taxes in accordance with principles contained in ASC 740, Income Taxe s. Under these principles, income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Any interest or penalties incurred in connection with income taxes are recorded as part of the provision for income taxes for financial reporting purposes. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company also evaluates any uncertain tax positions and recognizes a liability for the tax benefit associated with an uncertain tax position if it is more likely than not that the tax position will not be sustained on examination by the taxing authorities upon consideration of the technical merits of the position. The tax benefits recognized in the financial statements from such positions are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Any change in judgment related to the expected ultimate resolution of uncertain tax positions is recognized in the period in which such change occurs. The Company recognizes interest and penalties related to uncertain tax positions within benefit (provision) for income taxes in the consolidated statement of operations. Interest Rate Swap Agreements We enter into interest rate swap agreements in order to hedge the variability of expected future cash interest payments. We designate our derivative instruments as cash flow hedges if they meet the criteria specified in ASC 815, Derivatives and Hedging . Changes in the fair value of derivatives designated and qualifying as cash flow hedges are deferred in accumulated other comprehensive income and are recognized into earnings as the hedged transactions affect earnings. Changes in the fair value of derivatives not designated and qualifying as cash flow hedges are immediately recognized in earnings and classified as interest expense. Fair Value of Financial Instruments The carrying amounts of cash and cash equivalents, accounts receivable, accounts payable, and amounts included in other current assets and current liabilities that meet the definition of a financial instrument approximate fair value because of the short-term nature of these amounts. The fair value of our debt approximates its carrying value. The fair value of our debt was estimated using Level 2 inputs based on our recently priced debt. Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted-average number of common shares outstanding for the period. Due to the loss experienced by the Company in fiscal year 2024, the computation of diluted loss per share does not assume the impact of restricted stock units that would have an antidilutive effect on loss per share. Information about the weighted-average number of basic and diluted shares is presented in “Note 20 — Earnings (Loss) Per Share”. Concentrations of Credit Risk Financial instruments that potentially subject the Company to credit risk include receivables and cash equivalents. Receivables credit risk is also limited due to the credit worthiness of the U.S. Government. Management believes the credit risk associated with the Company’s cash equivalents is limited due to the credit worthiness of the obligors of the investments underlying the cash equivalents. In addition, although the Company maintains cash balances at financial institutions that exceed federally insured limits, these balances are placed with high quality financial institutions. Approximately 81 %, 90 % and 91 % of the Company’s revenues were derived through direct contracts with agencies of the U.S. Government for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. Foreign Currency Translation 65 The Company’s functional currency is generally the United States dollar except for foreign operations where the functional currency is generally the local currency. Results of operations for foreign entities are translated to U.S. dollars using the average exchange rates during the period. Assets and liabilities for foreign entities are translated using the exchange rates in effect as of the date of the balance sheet. Resulting translation adjustments are recorded as a foreign currency translation adjustment into other accumulated comprehensive income in shareholders’ equity. Comprehensive Income (Loss) Comprehensive income (loss) is the change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. Other comprehensive income (loss) refers to revenues, expenses, and gains and losses that under GAAP are included in comprehensive income (loss), but excluded from the determination of net income (loss) including non-controlling interests. The elements within other comprehensive income (loss) consist of foreign currency translation adjustments, differences between actual amounts and estimates based on actuarial assumptions and the effect of changes in actuarial assumptions made under the Company’s pension plans and the changes in the fair value of interest rate swap agreements. The Company accounts for the residual income tax effects in comprehensive income (loss) using the portfolio method and will release the residual tax effect when the entire portfolio of the applicable balance is terminated. Note 3 — Recent Accounting Pronouncements Accounting Standards Updates Issued but Not Yet Adopted In December 2023, the FASB issued Accounting Standards Update (“ASU”) No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures , to enhance transparency and usefulness of income tax disclosures. This update requires disaggregated information about an entity’s effective tax rate reconciliation as well as information on income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and may be applied on a prospective or retrospective basis. We plan to adopt ASU 2023-09 using the prospective approach in fiscal year 2026. In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses , to enhance the transparency of certain expense disclosures. The update requires disclosure of specific types of expenses included in certain expense captions presented on the face of the consolidated statements of operations. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and for interim reporting periods beginning after December 15, 2027, and may be applied on a prospective or retrospective basis. Early adoption is permitted. We are currently evaluating the impacts of the new standard on our financial statements. Accounting Standards Updates Adopted In November 2023, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures , to improve reportable segment disclosure requirements. This update requires disclosure of significant segment expenses and other segment items in annual and interim periods. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The amendment requires retrospective application to all prior periods presented in the financial statements and early adoption is permitted. We adopted the annual disclosure requirements in fiscal year 2025 and will adopt the interim disclosure requirements in the first quarter of fiscal year 2026. See Note 18 — Segment Information for additional information. Note 4 — Acquisition and Divestiture Acquisition of CMS On September 27, 2024, Amentum Parent Holdings LLC completed its merger with CMS, a leading provider of mission-critical, technology-driven services in government and commercial markets, in a Reverse Morris Trust transaction. Amentum Parent Holdings LLC was the accounting acquirer of CMS. Immediately following the Transaction, the Company had approximately 243 million issued and outstanding shares of common stock, of which Jacobs and its shareholders (“CMS Shareholders”) owned 58.5 % of the issued and outstanding shares of common stock, and Amentum Joint Venture LP, our previous parent company (“AJVLP” and “Amentum Equityholder”) owns 37.0 %. Subsequently, Amentum Equityholder distributed its shares of our common stock to certain parties (collectively, “Sponsor Stockholder”). Further, 4.5 % of the issued and outstanding shares of common stock was placed in escrow at the merger date, to be released and delivered in the future to CMS Shareholders or to Amentum Equityholder, depending on the achievement of certain fiscal year 2024 targets by CMS (“Additional Merger Consideration”). In March 2025, the Company and Jacobs finalized the Additional Merger Consideration and released all 4.5 % of the issued and outstanding shares of common stock out of escrow with 3.5 % of the issued and outstanding shares released to CMS Shareholders and the remaining 1.0 % of issued and outstanding shares to the Sponsor Stockholder. Additionally, in connection and in accordance with the terms of the Transaction, prior to the spin-off and Transaction, CMS provided a cash payment to Jacobs of approximately $ 911 million, after adjustments based on the levels of cash, debt and working capital in CMS. 66 Under the acquisition method of accounting, the total final consideration exchanged for the CMS transaction is shown below and increased $ 7 million from September 27, 2024: (In millions, except per share amounts) Shares of Amentum Holdings, Inc. common stock issued to CMS shareholders 142 Per share price of Amentum Holdings, Inc. common stock 25.67 Fair value of common stock issued to CMS shareholders (1) 3,654 Fair value of additional equity consideration issued to CMS shareholders (2) 218 Final working capital settlement (3) 70 Other consideration (4) 6 Fair value of consideration transferred 3,948 Fair value of previously held equity interest (5) 84 Total consideration $ 4,032 (1) Represents the fair value of equity consideration received by CMS shareholders to provide 58.5 % ownership in the Company. (2) Represents the additional equity consideration which was finalized in March 2025. The balance reflects a decrease in equity consideration issued to CMS Shareholders following a resolution to release an additional 1.0 % of the issued and outstanding shares of Amentum common stock back to Sponsor Stockholder. This balance is presented at fair value based on the acquisition-date share price and is included in the total purchase consideration in accordance with ASC 805. (3) Reflects a $ 70 million cash payment made based on the final net working capital position. This payment was made in the third quarter of fiscal year 2025 and included in the total purchase consideration in accordance with ASC 805, as it represents an obligation attributable to pre-acquisition activities. (4) Represents other immaterial adjustments, including a) estimated equity consideration related to pre-combination stock-based compensation awards, b) the settlement of CMS transaction costs paid by Amentum, and c) the removal of consideration related to the acquisition of non-controlling interests. (5) Prior to the Transaction, we held a non-controlling interest in a joint venture of 50 % which was accounted for under the equity method of accounting, with the remaining 40 % held by CMS and 10 % held by an unrelated third party. As a result of the Transaction, the Company gained a controlling financial interest in the joint venture and it became a consolidated joint venture of the Company. This joint venture acquisition was accounted for as a business combination achieved in stages. Our pre-existing equity method investment in the joint venture was remeasured at an acquisition date fair value of $ 170 million by using a discounted cash flow model based on estimated future revenues, margins and discount rates, among other variables and estimates. The Company’s previously held equity interest in the joint venture was remeasured to fair value, resulting in a gain of $ 69 million recognized in the year ended September 27, 2024, which is included in gain on acquisition of controlling interest in our consolidated statements of operations. Additionally, as of the acquisition date, the Company had a payable from the joint venture with a fair value of $ 1 million that was settled in connection with the acquisition. The Company recognized $ 79 million of transaction costs for the year ended September 27, 2024, of which $ 31 million relates to debt issuance costs that were incurred immediately following the transaction and are expensed and presented in loss on extinguishment of debt in the consolidated statements of operations. The remaining $ 48 million of transaction costs are presented within selling, general, and administrative expenses in the consolidated statements of operations. The Transaction was accounted for as a business combination. The Company assessed the fair value of the identifiable intangible assets including customer relationships and backlog, which were valued using the excess earnings method of the income approach. This method requires several judgments and assumptions to determine the fair value of the intangible assets including expected future cash flows, weighted-average cost of capital, discount rates, useful lives of assets and expected long-term growth rates. The purchase price has been allocated to the tangible and intangible assets acquired and liabilities assumed based on their fair values as of the acquisition date, with the excess purchase consideration recorded as goodwill. The preliminary fair value estimates and assumptions to measure the assets acquired and liabilities assumed were subject to change as the Company obtained additional information during the measurement period. The Company finalized the allocation of the purchase price for the Transaction based on its understanding of the estimated fair value of the acquired assets and assumed liabilities as of the acquisition date, with the excess purchase consideration recorded as goodwill. The goodwill recognized was attributable to the synergies expected to be achieved by combining the businesses of Amentum and CMS, expected future contracts and the acquired workforce. Of the value attributed to goodwill and intangible assets, $ 737 million is deductible for income tax purposes. The Company completed the accounting for the merger during the fiscal year ended October 3, 2025. The final allocation of the purchase price is as follows: 67 ( Amounts in millions) Preliminary Allocation of Purchase Price Measurement Period Adjustments, Net Final Allocation of Purchase Price Cash and cash equivalents $ 488 $ — $ 488 Accounts receivable 1,043 ( 64 ) 979 Prepaid expenses and other current assets 82 ( 34 ) 48 Property and equipment 72 ( 3 ) 69 Equity method investments 17 50 67 Goodwill 2,665 339 3,004 Intangible assets 1,860 ( 55 ) 1,805 Other long-term assets 107 37 144 Current portion of long-term debt ( 8 ) — ( 8 ) Accounts payable ( 257 ) ( 3 ) ( 260 ) Accrued compensation and benefits ( 285 ) 22 ( 263 ) Contract liabilities ( 48 ) ( 49 ) ( 97 ) Other current liabilities ( 98 ) ( 190 ) ( 288 ) Long-term debt, net of current portion ( 1,122 ) — ( 1,122 ) Deferred tax liabilities ( 353 ) 61 ( 292 ) Other long-term liabilities ( 75 ) ( 40 ) ( 115 ) Non-controlling interests ( 63 ) ( 64 ) ( 127 ) Total consideration $ 4,025 $ 7 $ 4,032 The fair value of acquired backlog of $ 275 million was amortized on an accelerated basis over approximately 1 year and the fair value of customer relationship intangible assets of $ 1,530 million is amortized on an accelerated basis over approximately 14 years. The fair value attributed to these intangible assets acquired was based on assumptions and other information compiled by management, including independent valuations that utilized established valuation techniques, and thus represents a Level 3 fair value measurement. The income approach was primarily used to value the intangible assets, consisting primarily of acquired program and contract intangibles and backlog. The income approach indicates value for an asset based on the present value of cash flow projected to be generated by the asset. Projected cash flow is discounted at a rate of return that reflects the relative risk of achieving the cash flow and the time value of money. Unaudited Pro Forma Combined Financial Information The following unaudited pro forma combined financial information presents the combined results of operations for CMS and the Company for the pre-acquisition periods of the twelve months ended September 27, 2024 and September 29, 2023, respectively: For the years ended (Amounts in millions) September 27, 2024 September 29, 2023 Revenues $ 13,858 $ 13,371 Net income (loss) attributable to common shareholders 145 ( 170 ) The unaudited pro forma combined financial information presented above has been prepared from historical financial statements that have been adjusted to give effect to the Transaction as though it had occurred on October 1, 2022. The unaudited pro forma combined financial information includes adjustments for intangible asset amortization, stock-based compensation, interest expense, policy adjustments, and other transaction costs. The unaudited pro forma combined financial information is not intended to reflect the actual results of operations that would have occurred if the acquisition had occurred on October 1, 2022 nor is it indicative of future operating results. Divestiture of Rapid Solutions On June 26, 2025, we completed the sale of a hardware and product business, Rapid Solutions, to Lockheed Martin Corporation for a purchase price of $ 360 million in cash. Rapid Solutions was part of the DS segment. Note 5 — Revenues Disaggregation of Revenues 68 The Company disaggregates revenues by customer, contract type, prime contractor versus subcontractor, geographic location and whether the solution provided is primarily Digital Solutions or Global Engineering Solutions. These categories represent how the nature, amount, timing, and uncertainty of revenues and cash flows are affected. Disaggregated revenues by customer-type were as follows: For the years ended October 3, 2025 September 27, 2024 September 29, 2023 (Amounts in millions) DS GES Total DS GES Total DS GES Total Department of War and U.S. Intelligence Community $ 3,222 $ 4,456 $ 7,678 $ 1,509 $ 4,094 $ 5,603 $ 1,474 $ 3,791 $ 5,265 Other U.S. Government Agencies 1,607 2,387 3,994 386 1,598 1,984 341 1,526 1,867 Commercial and International 714 2,007 2,721 86 715 801 84 649 733 Total revenues $ 5,543 $ 8,850 $ 14,393 $ 1,981 $ 6,407 $ 8,388 $ 1,899 $ 5,966 $ 7,865 Disaggregated revenues by contract-type were as follows: For the years ended October 3, 2025 September 27, 2024 September 29, 2023 (Amounts in millions) DS GES Total DS GES Total DS GES Total Cost-plus-fee $ 3,557 $ 5,426 $ 8,983 $ 964 $ 4,234 $ 5,198 $ 875 $ 4,066 $ 4,941 Fixed-price 1,422 2,067 3,489 650 1,576 2,226 667 1,422 2,089 Time-and-materials 564 1,357 1,921 367 597 964 357 478 835 Total revenues $ 5,543 $ 8,850 $ 14,393 $ 1,981 $ 6,407 $ 8,388 $ 1,899 $ 5,966 $ 7,865 Disaggregated revenues by prime contractor versus subcontractor were as follows: For the years ended October 3, 2025 September 27, 2024 September 29, 2023 (Amounts in millions) DS GES Total DS GES Total DS GES Total Prime contractor $ 5,069 $ 8,027 $ 13,096 $ 1,772 $ 5,738 $ 7,510 $ 1,722 $ 5,236 $ 6,958 Subcontractor 474 823 1,297 209 669 878 177 730 907 Total revenues $ 5,543 $ 8,850 $ 14,393 $ 1,981 $ 6,407 $ 8,388 $ 1,899 $ 5,966 $ 7,865 Revenues by geographic location are reported by the country in which the work is performed and were as follows: For the years ended October 3, 2025 September 27, 2024 September 29, 2023 (Amounts in millions) DS GES Total DS GES Total DS GES Total United States $ 5,304 $ 5,442 $ 10,746 $ 1,679 $ 4,376 $ 6,055 $ 1,544 $ 4,204 $ 5,748 International 239 3,408 3,647 302 2,031 2,333 355 1,762 2,117 Total revenues $ 5,543 $ 8,850 $ 14,393 $ 1,981 $ 6,407 $ 8,388 $ 1,899 $ 5,966 $ 7,865 Changes in Estimates on Contracts Changes in estimated contract earnings at completion using the cumulative catch-up method of accounting were recognized in revenues as follows: 69 For the years ended ( Amounts in millions) October 3, 2025 September 27, 2024 September 29, 2023 Favorable earnings at completion adjustments $ 126 $ 83 $ 88 Unfavorable earnings at completion adjustments ( 67 ) ( 38 ) ( 46 ) Net favorable adjustments $ 59 $ 45 $ 42 Impact on diluted earnings (loss) per share attributable to common shareholders (1) $ 0.19 $ 0.40 $ 0.37 (1) The impact on diluted earnings (loss) per share attributable to common shareholders is calculated using our statutory rate. Remaining Performance Obligations The Company’s remaining performance obligations balance represents the expected revenues to be recognized for the satisfaction of remaining performance obligations on existing contracts. This balance excludes unexercised contract option years and task orders that may be issued as part of an indefinite delivery, indefinite quantity contract. The remaining performance obligations balance as of October 3, 2025 and September 27, 2024 was $ 9.9 billion and $ 12.9 billion, respectively. As of October 3, 2025, the Company expects to recognize approximately 77 % and 90 % of the remaining performance obligations balance as revenues over the next 12 and 24 months, respectively, with the remainder to be recognized thereafter. Note 6 — Contract Balances The Company's contract balances consisted of the following (in millions): As of Description of Contract Related Balance Classification October 3, 2025 September 27, 2024 Billed and billable receivables Accounts receivable, net $ 1,514 $ 1,378 Contract assets Accounts receivable, net 902 986 Related party receivables Accounts receivable, net 63 37 Long-term contract assets Other long-term assets 90 138 Related party contract liabilities - deferred revenues and other contract liabilities Contract liabilities ( 15 ) — Contract liabilities - deferred revenues and other contract liabilities Contract liabilities ( 212 ) ( 113 ) Contract assets primarily relate to accruals for reimbursable costs and fees in which our right to consideration is conditional. Long-term contract assets relate to a prior acquisition. The Company recognized revenues of $ 95 million and $ 98 million during the years ended October 3, 2025 and September 27, 2024, respectively, that was included in Contract liabilities as of September 27, 2024 and September 29, 2023, respectively. Note 7 — Sales of Receivables In March 2024, we entered into a Master Accounts Receivable Purchase Agreement (“MARPA”) with MUFG Bank, Ltd., (the “Purchaser”) for the sale of certain designated eligible U.S. Government receivables. In December 2024, we amended the MARPA with the Purchaser to increase the maximum amount of eligible receivables that can be sold up to a maximum amount of $ 400 million. Under the MARPA, the Company can sell certain eligible receivables without recourse for any U.S. Government credit risk. The Company does not retain an ongoing financial interest in the transferred receivables other than cash collection and administrative services. The Company estimated that its servicing fee was at fair value and therefore no servicing asset or liability related to these receivables was recognized as of October 3, 2025. Proceeds from the sold receivables are reflected in operating cash flows on the statement of cash flows. 70 The Company's MARPA activity consisted of the following: As of and for the Year Ended (Amounts in millions) October 3, 2025 September 27, 2024 Beginning balance: $ 177 $ — Sales of receivables 3,807 1,574 Cash collections ( 3,804 ) ( 1,397 ) Outstanding balance sold to Purchaser (1) 180 177 Cash collected, not remitted to Purchaser (2) ( 49 ) ( 39 ) Remaining sold receivables $ 131 $ 138 (1) For the years ended October 3, 2025 and September 27, 2024, the Company recorded a net cash inflow of $ 3 million and $ 177 million in its cash flows from operating activities, respectively, from sold receivables. MARPA cash flows are calculated as the change in the outstanding balance during the fiscal year. (2) Includes the cash collected on behalf of but not yet remitted to the Purchaser as of October 3, 2025 and September 27, 2024. This balance is included in Other current liabilities as of the balance sheet date. Note 8 — Goodwill and Intangible Assets Goodwill The table below presents changes in the carrying amount of goodwill by reportable segment for the periods presented: (Amounts in millions) DS GES Total Balance as of September 29, 2023 $ 1,256 $ 1,635 $ 2,891 Acquisition of CMS 1,156 1,509 2,665 Balance as of September 27, 2024 2,412 3,144 5,556 Measurement period adjustments (1) 41 298 339 Divestitures ( 193 ) — ( 193 ) Foreign currency translation — 1 1 Balance as of October 3, 2025 $ 2,260 $ 3,443 $ 5,703 (1) Represents changes to goodwill resulting from measurement period adjustments recorded in fiscal year 2025 associated with the acquisition of CMS purchase price allocation. During the first quarter of fiscal year 2025, we performed an interim goodwill impairment test both before and after we amended our organizational structure. In the fourth quarter of fiscal year 2025, we performed our annual goodwill impairment test. We concluded no impairment charges were necessary as a result of either test. During the first quarter of fiscal year 2023, we performed an interim goodwill impairment test both before and after we amended our organizational structure. Our interim quantitative goodwill impairment test concluded that the carrying value of one reporting unit exceeded its fair value. As a result, a non-cash impairment charge of $ 186 million was recognized during the year ended September 29, 2023. Accumulated goodwill impairment was $ 294 million as of both October 3, 2025 and September 27, 2024. Intangible Assets Intangible assets, net consisted of the following: As of October 3, 2025 (Amounts in millions, except years) Weighted Average Useful Life (Years) Gross Carrying Value Accumulated Amortization Net Backlog 5.1 $ 661 $ ( 586 ) $ 75 Customer relationship intangible assets 11.1 2,587 ( 721 ) 1,866 Capitalized software 4.6 27 ( 13 ) 14 Total intangible assets, net $ 3,275 $ ( 1,320 ) $ 1,955 71 As of September 27, 2024 (Amounts in millions, except years) Weighted Average Useful Life (Years) Gross Carrying Value Accumulated Amortization Net Backlog 2.4 $ 931 $ ( 552 ) $ 379 Customer relationship intangible assets 12.9 2,781 ( 550 ) 2,231 Capitalized software 4.8 23 ( 10 ) 13 Total intangible assets, net $ 3,735 $ ( 1,112 ) $ 2,623 Amortization expense was $ 479 million, $ 228 million and $ 298 million for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. Future amortization expense is expected to be as follows: Year Ending September 30, ( Amounts in millions) 2026 $ 376 2027 334 2028 265 2029 220 2030 186 Thereafter 574 Total $ 1,955 Note 9 — Income Taxes The (provision) benefit provision for income taxes consists of the following: For the years ended (Amounts in millions) October 3, 2025 September 27, 2024 September 29, 2023 Current income tax (provision): Federal $ ( 54 ) $ ( 44 ) $ ( 30 ) State ( 23 ) ( 13 ) ( 5 ) Foreign ( 26 ) ( 18 ) ( 9 ) Total current income tax (provision) ( 103 ) ( 75 ) ( 44 ) Deferred income tax benefit (provision): Federal 28 110 49 State 12 10 13 Foreign 7 ( 5 ) 1 Total deferred income tax benefit 47 115 63 (Provision) benefit for income taxes $ ( 56 ) $ 40 $ 19 The major elements contributing to the difference between the U.S. federal statutory rate and the effective tax rate are as follows: 72 For the years ended October 3, 2025 September 27, 2024 September 29, 2023 (Dollars in millions) Amount % Amount % Amount % Statutory Rate $ ( 24 ) 21.0 % $ 26 21.0 % $ 72 21.0 % State income tax, net of the federal benefit ( 9 ) 7.8 % ( 2 ) ( 2.0 ) % 7 2.2 % Non-controlling interests ( 2 ) 1.7 % — ( 0.2 ) % ( 2 ) ( 0.5 ) % Goodwill impairment — — % — — % ( 39 ) ( 11.5 ) % Transaction costs — — % ( 1 ) ( 0.8 ) % — — % Stock-based compensation — — % ( 4 ) ( 3.0 ) % — — % Nontaxable or nondeductible items ( 3 ) 2.6 % 1 0.4 % — ( 0.1 ) % Divestitures ( 21 ) 18.2 % — — % — — % Tax differential on foreign operations ( 1 ) 0.9 % ( 1 ) ( 0.5 ) % ( 4 ) ( 1.0 ) % Tax credits 5 ( 4.3 ) % 5 4.6 % 2 0.6 % Valuation allowance ( 7 ) 6.1 % 16 13.0 % ( 17 ) ( 5.1 ) % Unrecognized tax benefits 5 ( 4.4 ) % — — % — — % Other 1 ( 0.9 ) % — — % — — % (Provision) benefit for income taxes $ ( 56 ) 48.7 % $ 40 32.5 % $ 19 5.6 % Deferred income taxes are recorded for differences in the basis of assets and liabilities for financial reporting and income tax purposes. The following table presents the components of Total deferred tax liabilities, net as October 3, 2025 and September 27, 2024: As of (Amounts in millions) October 3, 2025 September 27, 2024 Deferred tax assets: Operating lease liabilities $ 55 $ 60 Reserves 48 37 Accrued compensation and benefits 81 92 Interest expense 177 160 Foreign tax credit 9 27 Research expenditures 30 23 Net operating losses and capital losses 45 76 Other 15 11 Valuation allowance ( 86 ) ( 76 ) Total deferred tax assets 374 410 Deferred tax liabilities: Acquired intangible assets ( 441 ) ( 573 ) Operating lease right-of-use assets ( 51 ) ( 58 ) Property and equipment, net ( 9 ) ( 13 ) Equity method and consolidated investments ( 116 ) ( 113 ) Other ( 17 ) ( 18 ) Total deferred tax liabilities ( 634 ) ( 775 ) Total deferred tax liabilities, net $ ( 260 ) $ ( 365 ) Total deferred tax liabilities, net consists of deferred tax liabilities of $ 260 million and $ 370 million as of October 3, 2025 and September 27, 2024, respectively, and a net deferred tax asset of $ 0 million and $ 5 million recorded within other long-term assets as of October 3, 2025 and September 27, 2024, respectively. Included in net deferred tax assets are valuation allowances of $ 86 million and $ 76 million as of October 3, 2025 and September 27, 2024, respectively, primarily attributable to net operating losses and disallowed interest expense. The increase of 73 $ 10 million in valuation allowance for the year ended October 3, 2025 was primarily related to the recognition of valuation allowances related to disallowed interest in the United States. Valuation allowances are recorded to reduce deferred tax assets to the amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. We expect to realize the benefit of these deferred tax assets primarily through future reversals of our deferred tax liabilities. Although realization is not assured, we believe it is more likely than not that all deferred tax assets for which valuation allowances have not been established will be realized. On July 4, 2025, the One Big, Beautiful Bill Act (“OBBBA”) was enacted, introducing several significant amendments to U.S. income tax legislation including the permanent restoration of EBITDA as the basis for computing business interest expense limitations and the immediate expensing of research expenditures. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We have incorporated these amendments into our fiscal year 2025 income tax provision, as applicable, which impacted the realizability of our deferred tax assets and valuation allowance assessment. We have approximately $ 45 million and $ 76 million of tax effected loss carryforwards related to the domestic and foreign income tax returns as of October 3, 2025 and September 27, 2024, respectively. The federal and foreign net operating losses have an indefinite carryforward. The state net operating loss carryforward will begin to expire in 2026. We also have $ 9 million of foreign tax credit carryforwards that will begin to expire in 2035, if unutilized. We have not recognized a U.S. deferred tax liability for the outside basis differences of certain foreign subsidiaries because we have asserted that these earnings are permanently reinvested outside of the U.S. It is not practicable to determine the amount of the unrecognized deferred tax liability associated with these earnings. We account for uncertain tax positions in accordance with ASC 740, Income Taxes, which prescribes the more likely than not threshold for recognition of a tax position in the financial statements. The following table summarizes the activity related to unrecognized tax benefits: (Amounts in millions) Unrecognized Tax Benefits Balance at September 30, 2022 $ 15 Reductions for tax positions related to prior years ( 1 ) Balance at September 29, 2023 14 Additions for tax positions related to prior years 9 Reductions for tax positions related to prior years ( 7 ) Additions for tax positions related to current years 2 Lapse of statute of limitations ( 5 ) Settlements ( 4 ) Balance at September 27, 2024 9 Additions for tax positions related to current years 2 Lapse of statute of limitations ( 5 ) Balance at October 3, 2025 $ 6 We file income tax returns in the U.S. and various foreign jurisdictions. With few exceptions, the statute of limitations for these jurisdictions is no longer open for audit or examination for the years before 2020 for federal income taxes in the U.S. and before 2016 with respect to various foreign jurisdictions. We are also subject to taxation in various states. We are under, or may be subject to, audit or examination and additional assessments by the relevant authorities. Note 10 — Retirement Plans Defined Contribution Plans The Company sponsors various participant-directed, defined contribution, 401(k) savings plans for the benefit of employees that meet certain eligibility requirements. The total expense for the defined contribution plans was $ 95 million, $ 55 million and $ 54 million for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. Deferred Compensation Plans The Company has non-qualified deferred compensation programs which provide benefits payable to directors, officers, and certain key employees or their designated beneficiaries at specified future dates, upon retirement or death. The plans are 74 unfunded and benefits are paid from the general assets of the Company. Participants’ cash deferrals earn a return based on the participants’ selection of investments in several hypothetical investment options. Defined Benefit Pension Plans The Company sponsors various postretirement benefit plans in the United States including defined benefit pension plans (“Defined Benefit Pension Plans”). The Defined Benefit Pension Plans are closed to new participants and benefits are generally based on the employee’s years of creditable service and compensation. The Defined Benefit Pension Plans benefit obligations and the fair value of the plan assets were measured as of October 3, 2025. The following tables provide reconciliations of the changes in the Defined Benefit Pension Plans benefit obligations, reconciliations of the changes in the fair value of assets for the years ended October 3, 2025, September 27, 2024 and September 29, 2023 and reconciliations of the funded status as of October 3, 2025 and September 27, 2024. For the years ended ( Amounts in millions) October 3, 2025 September 27, 2024 September 29, 2023 Change in benefit obligation Benefit obligation at beginning of period $ 313 $ 292 $ 310 Interest cost 14 17 16 Benefits paid from the plans ( 21 ) ( 22 ) ( 21 ) Actuarial (gain) loss ( 10 ) 26 ( 13 ) Benefit obligation at end of period $ 296 $ 313 $ 292 For the years ended ( Amounts in millions) October 3, 2025 September 27, 2024 September 29, 2023 Change in plan assets Fair value of plan assets at beginning of period $ 315 $ 281 $ 271 Actual return on plan assets 11 55 30 Employer contributions to plans — 1 — Benefits paid from the plans ( 21 ) ( 22 ) ( 20 ) Fair value of plan assets at end of period $ 305 $ 315 $ 281 The benefit obligation remained materially consistent with the accumulated benefit obligation for each of the fiscal years ended October 3, 2025 and September 27, 2024. The net amount recognized within Other long-term assets as of October 3, 2025 and September 27, 2024 was $ 9 million and $ 2 million, respectively. As of October 3, 2025 and September 27, 2024, the fair values of the Defined Benefit Pension Plan by major asset categories were as follows: 75 October 3, 2025 September 27, 2024 Carrying Value Quoted Prices in Active Markets (Level 1) Significant Other Observable Inputs (Level 2) Carrying Value Quoted Prices in Active Markets (Level 1) ( Amounts in millions) Investments measured at fair value Cash and cash equivalents $ 9 $ 9 $ — $ 6 $ 6 Investment funds Fixed income funds 233 50 183 128 128 Total investments measured at fair value $ 242 $ 59 $ 183 $ 134 $ 134 Investments measured at NAV Investment funds Common collective funds - debt $ — $ 87 Diversified and equity funds 63 94 Total investments measured at NAV 63 181 Total $ 305 $ 315 Cash equivalents are mostly comprised of short‑term money‑market instruments and are valued at cost, which approximates fair value. Fixed income investment funds categorized as Level 1 are publicly traded on an active exchange. Fixed income funds, not traded on an active exchange, categorized as Level 2 are valued using pricing models that use verifiable observable market data (e.g., interest rates and yield curves observable at commonly quoted intervals), bids provided by brokers or dealers, or quoted prices of securities with similar characteristics. Common collective funds are valued based on net asset value (“NAV”) per share or unit as a practical expedient as reported by the fund manager, multiplied by the number of shares or units held as of the measurement date. Accordingly, these NAV‑based investments have been excluded from the fair value hierarchy. These collective investment funds have minimal redemption notice periods and are redeemable daily at the NAV, less transaction fees, without significant restrictions. There are no significant unfunded commitments related to these investments. The Company may make discretionary contributions. The required minimum contributions and the expected annual future benefit payments for the Defined Benefit Pension Plans are not significant. Multiemployer Pension Plans We are subject to several collective-bargaining agreements (“CBAs”) that require contributions to a multiemployer defined benefit pension plan that covers its union-represented employees. These plans are not significant for the years ended October 3, 2025, September 27, 2024 and September 29, 2023. Note 11 — Stock-Based Compensation As of October 3, 2025, we had the following stock-based compensation awards outstanding: • Time-based restricted stock units (“RSUs”) within the Amentum Holdings, Inc. 2024 Stock Incentive Plan (the “Plan”); • Performance-based restricted stock units (“PSUs”) within the Plan; • Stock Options within the Plan; and the • Amentum Holdings, Inc. Employee Stock Purchase Plan (“ESPP”). We issue new shares upon the vesting of stock units or exercising of stock options under these plans. The Plan provides Amentum’s employees, non-employee directors and consultants the opportunity to receive various types of stock-based compensation awards including stock options, restricted stock units and performance-based awards, as well as cash awards. As of October 3, 2025, 15.9 million shares of Amentum’s common stock was reserved for future issuance under the Plan. Time-based Restricted Stock Units The fair value of the RSUs was determined based on the Company’s common stock closing price on the date of the grant. The RSUs generally vest 50 % a year over two years , 33 % a year over three years , 25 % a year over four years or cliff vest in three years . RSU compensation expense is recognized on a straight-line basis ratably over the requisite service period, which is generally the vesting period, unless otherwise specifically noted. Amounts recognized for forfeitures are adjusted periodically to reflect actual forfeitures. 76 Changes in RSUs during the year ended October 3, 2025 were not significant. As of October 3, 2025, there was $ 27 million of unrecognized compensation expense related to the RSUs, scheduled to be recognized over a weighted-average period of 2 years. The fair value of RSUs that vested in fiscal years 2025 was $ 1 million. No RSUs vested in fiscal years 2024 and 2023. Conversion of Restricted Stock Units due to Transaction As part of the Transaction, 65,182 Jacobs’ restricted stock units were converted to 342,741 of Amentum RSUs. The fair value of these RSUs was determined based on the Company’s common stock on the Transaction date. Performance-based Restricted Stock Units Performance-based restricted stock units vest and the stock is issued at the end of the performance period, which can range from 1 to 3 years, based upon the achievement of specific performance conditions. If the performance does not satisfy the applicable conditions, no shares will be issued. The initial PSU grants occurred in fiscal year 2025. Changes in PSUs during the year ended October 3, 2025 were not significant. As of October 3, 2025, there was $ 10 million of unrecognized compensation cost which is expected to be recognized over a weighted average of 2 years. Stock Options During fiscal year 2025, we commenced the grants of stock options. The stock options have a vesting term of 3 years with a portion vesting each year over the vesting period. The fair value of the stock options is estimated based on the date of the grant using the Black-Scholes-Merton option-pricing model and stock option compensation expense is recognized on a straight-line basis ratably over the requisite service period, which is the vesting period. Changes in stock options during the year ended October 3, 2025 were not significant. No stock options were provided in fiscal years 2024 and 2023. Employee Stock Purchase Plan The Company adopted the Amentum Holdings, Inc. Employee Stock Purchase Plan (“ESPP”) on September 27, 2024 and implemented the ESPP beginning July 01, 2025. The ESPP is a qualified plan under Section 423 of the Internal Revenue Code and allows eligible employees the right to purchase shares of our common stock at a 5 % discount of the market value on the last day of the offering period. For financial reporting purposes, the ESPP is considered non-compensatory, therefore no stock-based compensation expense is recognized to acquire shares under the ESPP. During fiscal year 2025, $ 3 million was received from ESPP plan participants for the issuance of Amentum common stock. As of October 3, 2025, participants have purchased 0.1 million shares under the ESPP, at a weighted-average price per share of $ 22.75 . A total of 2.5 million shares remain available for future issuance under the ESPP. Amentum Joint Venture LP Class B units Prior to the Transaction, certain members of management were awarded Time-Vested Class B units and Performance-Vested Class B units in Amentum Joint Venture LP, our previous parent company (“AJVLP” and “Amentum Equityholder”). The Time-Vested Class B units vested 20 % a year over five years and the Performance-Vested Class B units vested upon the consummation of a change in control transaction and achievement of certain return metrics associated with such transaction. Both the Time-Vested Class B units and Performance-Vested Class B units were equity classified awards in Amentum Joint Venture LP. The fair value of the Class B units was estimated based on the date of the grant using the Black-Scholes-Merton option-pricing model. We recognized compensation expense for the Time-Vested Class B units based on grant date fair values. Prior to the Transaction, compensation expense for the Time-Vested Class B units was recognized on a straight-line basis ratably over the requisite service period, which was the vesting period. In connection with the completion of the Transaction on September 27, 2024, the unvested Time-Vested and Performance-Vested Class B units were discretionarily modified to vest in connection with the Transaction. Due to the modification, we recognized $ 13 million of compensation expense in the consolidated statements of operations for the year ended September 27, 2024. As of September 27, 2024, there was no unrecognized compensation expense related to the Time-Vested Class B units or the Performance-Vested Class B units. Amounts recognized for forfeitures were adjusted periodically to reflect actual forfeitures. For the fiscal years ended September 27, 2024 and September 29, 2023, we recognized Class B unit compensation expense of $ 18 million and $ 3 million, respectively. For the fiscal years ended September 27, 2024 and September 29, 2023, there were no income tax benefits recognized from Class B unit compensation expense. Stock-Based Compensation Expense and Related Tax Benefits Recognized 77 Stock-based compensation expense and the related income tax benefits recognized under all plans were as follows: For the years ended (Amounts in millions) October 3, 2025 September 27, 2024 September 29, 2023 RSUs $ 16 $ — $ — PSUs 4 — — Stock Options 1 — — Class B units — 18 3 Total stock-based compensation expense $ 21 $ 18 $ 3 Income tax benefits recognized from stock-based compensation $ 3 $ — $ — Note 12 — Debt Debt consisted of the following: As of (Amounts in millions) October 3, 2025 September 27, 2024 Term Loan $ 3,000 $ 3,750 Senior notes 1,000 1,000 Other 8 17 Total debt 4,008 4,767 Unamortized original issue discount and unamortized deferred financing costs ( 65 ) ( 88 ) Total debt, net of original issue discount and deferred financing costs 3,943 4,679 Less current portion of long-term debt ( 42 ) ( 36 ) Total long-term debt, net of current portion $ 3,901 $ 4,643 Credit Facility On September 27, 2024, in connection with the consummation of the Transaction, we repaid all outstanding borrowings and other amounts under the prior first lien credit agreement and the prior second lien credit agreement dated as of January 31, 2020, as amended, (together, the “Prior Credit Agreements”) and the Prior Credit Agreements were terminated on September 27, 2024. On September 27, 2024, we entered into a Credit Agreement (the “Credit Agreement”), by and among Amentum, the borrowing subsidiaries from time to time party thereto, the lenders from time to time party thereto and JPMorgan Chase Bank, N.A., as administrative agent, for a new senior secured credit facility (the “Credit Facility”). The Credit Facility provides for a seven year , $ 3,750 million term facility (“Term Loan”) and a five year , $ 850 million revolving facility (“Revolver”) including a $ 200 million letter of credit subfacility and a $ 100 million swingline subfacility. The Credit Agreement was originally entered into by Amentum Parent Holdings LLC, and Amentum became a party to, and a borrower under the Credit Agreement as a result of the merger between Amentum and Amentum Parent Holdings LLC entered into in connection with the Transaction. A portion of the Term Loan, in the amount of $ 1,130 million, was originally borrowed on September 27, 2024 by Amentum under a separate term credit agreement, also entered on September 27, 2024, but immediately after the effective time of the merger, that separate term credit agreement was superseded and replaced in its entirety by the Credit Agreement, and such portion of the term facility is now outstanding under, and governed by, the Credit Agreement. The remaining $ 2,620 million of the term facility was borrowed on September 27, 2024. The Revolver and the Term Loan mature on September 27, 2029 and September 27, 2031, respectively. The Credit Facility is secured by substantially all of our assets and guaranteed by substantially all of our domestic subsidiaries. A portion of the Credit Facility was used, together with other cash sources, to repay in full all outstanding borrowings and other amounts under the Prior Credit Agreements and to pay related fees and expenses related to the financing and the related transactions. Proceeds of the Revolver under the Credit Agreement may be used for general corporate purposes. In fiscal year 2025, we made voluntary principal payments on the Term Loan of approximately $ 191 million, $ 250 million and $ 281 million on June 27, 2025, July 31, 2025 and September 30, 2025 , respectively, and as a result, we recognized $ 12 million of cost within loss on extinguishment of debt in the consolidated statements of operations during the fiscal year ended October 3, 2025. Due to the debt modification in fiscal year 2024, we recognized $ 31 million of debt issuance costs presented within loss on extinguishment of debt in the consolidated statements of operations for the year ended September 27, 2024. Further, we recognized $ 14 million of costs due to a loss on the debt modification presented within loss on extinguishment of 78 debt in the consolidated statements of operations during the fiscal year ended September 27, 2024. There was no such charge during the year ended September 29, 2023. As of October 3, 2025 and September 27, 2024, the available borrowing capacity under the Credit Facility was $ 766 million and $ 808 million, respectively, and included $ 84 million and $ 42 million, respectively, in issued letters of credit. As of October 3, 2025 and September 27, 2024, there were no amounts borrowed under the Revolver. Interest Rates on Term Loan Under the Credit Facility, the interest rate per annum applicable to the Term Loan is, at the Company’s option, equal to either the Alternate Base Rate (“ABR”) plus 1.25 % or the Term Secured Overnight Financing Rate (“SOFR”) plus 2.25 %. The interest rate per annum shall be reduced by 0.25 % in the event certain corporate ratings are achieved. The ABR is the rate equal to the highest of (a) the Prime Rate in effect on such day, (b) the New York Federal Reserve Bank (“NYFRB”) Rate in effect on such day plus 0.50 % or (c) SOFR for a one-month interest period as published two U.S. Government Securities Business Days prior to such day plus 1.00 %. Term Loan Amortization Payments and Prepayments Under the Credit Facility, we are required to make quarterly principal amortization payments equal to 0.25 % of the original principal amount of the Term Loan, which commenced on March 31, 2025, with the remainder of the principal being due at maturity. Any repayments and prepayments of borrowings under the term facility may not be reborrowed. Beginning with fiscal year 2026, the Credit Facility contains an annual requirement to submit a portion of our excess cash flow (as defined in the Credit Facility), within ten business days of delivering annual financial statements, as a Term Loan prepayment. No such prepayments have been required or made. Interest Rates on Revolver & Swingline Loans Under the Credit Facility, borrowings under the Revolver are available in U.S. dollars, Canadian dollars, euro and Sterling. The interest rate per annum applicable to the Revolver, at the Company's option, is equal to either the ABR or Canadian Prime Rate plus 0.50 % to 1.25 % or the Term SOFR, EURIBOR or Term Canadian Overnight Report Rate Average (“CORRA”) plus 1.50 % to 2.25 % based on our first lien leverage ratio. Interest Rates on Letter of Credit Subfacility and Unused Commitment Fees Under the Credit Facility, a portion of the revolving facility is available for the issuance of letters of credit in U.S. dollars, Canadian dollars, euro, Sterling and certain other foreign currencies. The interest rate per annum applicable to the letter of credit subfacility is equal to a range between 1.50 % to 2.25 % based on our first lien leverage ratio. All of our letters of credit under the Credit Facility are also subject to a 0.125 % fronting fee. The unused commitment fee on our Revolver is 0.25 % to 0.40 % based on our first lien leverage ratio. Covenants The Credit Agreement contains customary prepayment rights and customary mandatory prepayments, as well as customary affirmative and negative covenants that apply to Amentum and its restricted subsidiaries, including limitations on indebtedness, liens, restricted payments, restricted debt payments, investments, burdensome agreements, disposition of assets, transactions with affiliates, conduct of business and fundamental changes. The Term Loan does not include any financial maintenance covenants. The Revolver includes a financial maintenance covenant that requires, in certain circumstances tied to the usage of the Revolver and commenced with the second full fiscal quarter ended after September 27, 2024, compliance with a maximum first lien net leverage ratio of 5.25 to 1.00, stepping down to 5.00 to 1.00 commencing with the fifth full fiscal quarter ending after September 27, 2024. A breach of the financial maintenance covenant will only result in a default or event of default with respect to the Term Loan if the lenders under the Revolver have, as a result of such breach, demanded repayment of the obligations under the Revolver or otherwise accelerated such obligations (and terminated the commitments under the Revolver) and such demand or acceleration has not been rescinded. The Credit Agreement contains customary events of default (with customary qualifications, exceptions, grace periods and notice provisions), including nonpayment of principal, interest, fees or other amounts, defaults under other agreements, breach of loan documents, breach of representations and warranties, voluntary and involuntary bankruptcy or appointment of receiver, unsatisfied judgments and attachments, certain ERISA events, change of control, invalidity of guaranties, collateral documents and other loan documents, and obligations ceasing to constitute senior indebtedness for purposes of certain subordinated indebtedness. The obligations of Amentum and any borrowing subsidiaries under the Credit Agreement and certain designated cash management obligations, hedging obligations and ancillary services obligations, are unconditionally guaranteed on a senior basis (subject to customary exceptions) by, and secured by perfected first-priority security interests (subject to permitted liens 79 and other customary exceptions) in substantially all tangible and intangible assets of Amentum and its wholly owned material domestic restricted subsidiaries. Senior Notes In connection with the consummation of the Transaction, on August 13, 2024, the Company completed an offering of $ 1.0 billion in aggregate principal amount of 7.250 % senior notes due August 1, 2032 (the “Senior Notes”). The proceeds of the notes offering were initially funded into escrow and released concurrently with the consummation of the merger. Interest on the Senior Notes accrues at the rate of 7.250 % per annum and is payable on February 1 and August 1 of each year, which commenced on February 1, 2025. The Senior Notes are governed by the terms of the indenture dated as of August 13, 2024 (the “Indenture”), among Amentum Holdings, Inc., the Guarantors (as defined below) and U.S. Bank Trust Company National Association, as trustee (the “Trustee”) and collateral agent (the “Collateral Agent”). The Senior Notes are fully and unconditionally guaranteed on a senior unsecured basis by (1) the Company, and (2) our wholly-owned domestic restricted subsidiaries that currently guarantee the Credit Facility (the “Guarantors”). The Senior Notes have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), or the securities laws of any other jurisdiction. The Senior Notes may not be offered or sold in the United States or to U.S. persons (as defined in Regulation S) except in transactions exempt from, or not subject to, the registration requirements of the Securities Act. Accordingly, the Senior Notes were offered only to (1) “qualified institutional buyers” as defined in Rule 144A under the Securities Act and (2) outside the United States to non-U.S. persons in compliance with Regulation S under the Securities Act. Covenants The Indenture contains covenants that limit, among other things, our ability to: • incur additional indebtedness; • create liens or use assets as security in other transactions; • make certain payments, including loans, advances or capital contributions; • acquire capital stock, acquire all or substantially all of the assets of a division, line of business or other business unit; • dispose of certain assets; • make prepayments, redemptions and repurchases, more than one year prior to stated maturity, of certain debt; and • engage in transactions with affiliates. These covenants are subject to a number of important exceptions and qualifications as set forth in the Indenture. Upon the occurrence of specific kinds of change of control events (unless we elect to redeem the Senior Notes at our option prior thereto), holders of Senior Notes will have the right to require us to repurchase some or all of the Senior Notes at 101 % of their face amount, plus accrued and unpaid interest to the repurchase date. Optional Redemption The Senior Notes are redeemable at the option of the Company, in whole or in part, at any time and from time to time, upon not less than 30 nor more than 60 days’ prior notice. At any time prior to August 1, 2027, we may, at our option and on one or more occasions, redeem all or a part of the Senior Notes, at a redemption price equal to 100.000 % of the principal amount of the Senior Notes redeemed plus (i) a premium of either the highest of (a) 1.00 % of the principal amount of the Senior Notes or (b) the United States Treasury Rate as of the redemption date plus 50 basis points, and (ii) accrued and unpaid interest. At any time prior to August 1, 2027, we may, at our option and on one or more occasions, redeem up to 40.0 % of the aggregate principal amount of the Senior Notes at a redemption price equal to (i) 107.250 % of the aggregate principal amount, in an amount equal to or less than the amount of net cash proceeds from one or more equity offerings, as defined in the Indenture, to the extent such net cash proceeds are received by or contributed to the Company or a Guarantor, plus (ii) accrued and unpaid interest. The Senior Notes may be redeemed at the following prices (expressed as a percentage of the principal amount), plus accrued and unpaid cash interest, if any, if redeemed during the 12-month period commencing on August 1 of the years set forth below: 80 Redemption date Price On or after August 1, 2027 103.625 % On or after August 1, 2028 101.813 % On August 1, 2029 and thereafter 100.000 % Debt Maturity Schedule Future principal maturities of the Company’s long-term debt as of October 3, 2025 are as follows: Year Ending September 30, ( Amounts in millions) 2026 $ 43 2027 39 2028 38 2029 38 2030 38 Thereafter 3,812 Total $ 4,008 Cash Flow Hedges The Company utilizes derivative financial instruments to manage interest rate risk related to its variable rate debt. The Company’s objective is to manage its exposure to interest rate movements and reduce volatility of interest expense. The Company entered into several interest rate swaps with an aggregate notional value of $ 1.6 billion that were designated as cash flow hedges, in which the Company will pay at the fixed rate and receive payment at a floating rate indexed to the three-month term SOFR through maturity. The swaps mature at various dates through January 31, 2027. The change in fair value of the interest rate swaps is presented within accumulated other comprehensive income on our consolidated balance sheet and subsequently reclassified into interest expense and other, net on our consolidated statements of income and comprehensive loss in the period when the hedged transaction affects earnings. See Note 13 — Fair Value of Financial Assets and Liabilities and Note 17 — Accumulated Other Comprehensive Income (Loss) for additional information. Note 13 — Fair Value of Financial Assets and Liabilities ASC 820 — Fair Value Measurements and Disclosures establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: • Level 1, defined as observable inputs such as quoted prices in active markets; • Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and • Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The following table summarizes the financial assets and liabilities measured at fair value on a recurring basis and the level they fall within the fair value hierarchy (in millions): Fair Value Description Classification Fair Value Hierarchy October 3, 2025 September 27, 2024 Interest rate swaps Prepaid expenses and other current assets Level 2 $ 3 $ 8 Interest rate swaps Other long-term assets Level 2 — 1 Interest rate swaps Other current liabilities Level 2 ( 4 ) ( 3 ) Interest rate swaps Other long-term liabilities Level 2 ( 2 ) ( 13 ) Note 14 — Leases We primarily lease office space, warehouses, housing, equipment and vehicles and recognize a right-of-use asset and lease liability on the lease commencement date through calculation of the present value of unpaid lease payments over the lease term. All lease payments are based on the passage of time and certain leases are subject to annual escalations for increases in base rents. The Company's lease terms include options to extend or terminate the lease when it is reasonably certain that we will 81 exercise that option. We have no significant long-term purchase agreements with service providers and our lease agreements do not contain any material residual value guarantees or material restrictive covenants. Short-Term Leases We have elected the practical expedient for short-term lease recognition exemption by class of underlying asset which results in off-balance sheet accounting for leases with an initial term of 12 months or less (“short-term leases”). We recognize those lease payments in the consolidated statements of operations on a straight-line basis over the lease term. We also elected a package of practical expedients permitted under ASC 842 which allows the carry forward of historical lease classifications. Short-term lease rental expense was $ 53 million, $ 40 million and $ 42 million for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. Operating Leases The Company's operating leases primarily include our material leases of buildings (consisting primarily of our corporate office lease commitments) and equipment and, if applicable, embedded leases associated with real estate, equipment and vehicles in certain contracts with an initial term of 12 months or longer. These leases are classified as operating leases and are recognized as right-of-use assets and operating lease liabilities on the consolidated balance sheets. The following tables present our operating leases as of October 3, 2025 and September 27, 2024: As of (Amounts in millions) Classification October 3, 2025 September 27, 2024 Assets Operating lease right-of-use assets Other long-term assets $ 211 $ 250 Total leased assets $ 211 $ 250 Liabilities Current Current portion of operating lease liabilities Other current liabilities $ 67 $ 67 Noncurrent Long-term portion of operating lease liabilities Other long-term liabilities 157 193 Total lease liabilities $ 224 $ 260 Maturity of Lease Liabilities (Amounts in millions) Operating Leases September 30, 2026 $ 76 September 30, 2027 60 September 30, 2028 45 September 30, 2029 29 September 30, 2030 17 Thereafter 22 Total lease payments 249 Less: imputed interest ( 25 ) Present value of lease liabilities (1) $ 224 (1) As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. As of Lease Term and Discount Rate October 3, 2025 September 27, 2024 Weighted average remaining lease term (years) 4.4 4.4 Weighted average discount rate 4.6 % 4.0 % The following tables present selected financial information for the years ended October 3, 2025, September 27, 2024 and September 29, 2023: 82 Lease Cost For the years ended (Amounts in millions) Classification October 3, 2025 September 27, 2024 September 29, 2023 Operating lease cost Cost of revenues $ 34 $ 44 $ 40 Selling, general and administrative expenses 69 16 24 Net lease cost $ 103 $ 60 $ 64 Other Information For the years ended (Amounts in millions) October 3, 2025 September 27, 2024 September 29, 2023 Cash paid for amounts included in the measurement of lease liabilities Operating lease payments $ 95 $ 58 $ 68 Operating lease right-of-use assets obtained in exchange for new operating lease liability 31 4 1 Note 15 — Related Parties Related Party Receivables The Company has related party receivables due from our equity method investments, discussed further in Note 16 — Joint Ventures. Consulting and Management Fees We previously had a Master Consulting and Advisory Services agreement (“Consulting Agreement”) with American Securities LLC and Lindsay Goldberg LLC where, pursuant to the terms of the agreement, they made personnel available to us for the purpose of providing certain management and advisory services. We incurred $ 4 million of consulting fees in conjunction with the Consulting Agreement for the each of the years ended September 27, 2024 and September 29, 2023. There was no such expense during the year ended October 3, 2025. Capital Contribution In fiscal year 2024, immediately prior to the Transaction, Amentum Equityholder contributed $ 235 million in cash to the Company. Note 16 — Joint Ventures The Company’s joint ventures provide services to customers including program management and operations and maintenance services. Joint ventures, the combination of two or more partners, are generally formed for a specific project. Management of the joint venture is typically controlled by a joint venture executive committee, comprised of representatives from the joint venture partners. The joint venture executive committee normally provides management oversight and controls decisions which could have a significant impact on the joint venture. We account for joint ventures in accordance with ASC 810, Consolidation , as discussed in Note 2 — Summary of Significant Accounting Policies. The Company analyzes its joint ventures and classifies them as either: • a VIE that must be consolidated because the Company is the primary beneficiary or the joint venture is not a VIE and the Company holds the majority voting interest with no significant participative rights available to the other partners; or • a VIE that does not require consolidation and is treated as an equity method investment because the Company is not the primary beneficiary or the joint venture is not a VIE and the Company does not hold the majority voting interest. The following table presents selected financial information for our consolidated joint ventures that are VIEs as of October 3, 2025 and September 27, 2024: 83 As of (Amounts in millions) October 3, 2025 September 27, 2024 Cash and cash equivalents $ 167 $ 160 Current assets 191 322 Non-current assets — 2 Total assets $ 358 $ 484 Current liabilities $ 146 $ 190 Non-current liabilities — 1 Total liabilities 146 191 Total Amentum equity 153 228 Non-controlling interests 59 65 Total equity 212 293 Total liabilities and equity $ 358 $ 484 The following table presents selected financial information for our consolidated joint ventures that are VIEs for the years ended October 3, 2025, September 27, 2024 and September 29, 2023: For the years ended (Amounts in millions) October 3, 2025 September 27, 2024 September 29, 2023 Revenues $ 1,489 $ 370 $ 334 Cost of revenues ( 1,371 ) ( 337 ) ( 281 ) Net income including non-controlling interests 108 29 50 The Company has an ownership share in approximately 30 active joint ventures that were determined to be VIEs and are accounted for as equity method investments and the Company’s ownership percentages generally range from 25 % to 50 %. The following table presents selected financial information for our unconsolidated joint ventures, included as equity method investments on the consolidated balance sheets, as of October 3, 2025 and September 27, 2024: As of (Amounts in millions) October 3, 2025 September 27, 2024 Current assets $ 1,120 $ 701 Non-current assets 49 43 Total assets $ 1,169 $ 744 Current liabilities $ 740 $ 422 Non-current liabilities 17 16 Total liabilities 757 438 Joint ventures' equity 412 306 Total liabilities and joint ventures' equity $ 1,169 $ 744 The following table presents selected financial information for our equity method investments for the years ended October 3, 2025, September 27, 2024 and September 29, 2023: For the years ended (Amounts in millions) October 3, 2025 September 27, 2024 September 29, 2023 Revenues $ 3,603 $ 2,634 $ 2,373 Cost of revenues ( 3,357 ) ( 2,442 ) ( 2,215 ) Net income including non-controlling interests 207 183 152 84 Related party receivables due from our equity method investments were $ 63 million and $ 37 million as of October 3, 2025 and September 27, 2024, respectively. These receivables are a result of items purchased and services rendered by us on behalf of our equity method investments. We have assessed these receivables as having minimal collection risk based on our historic experience with these joint ventures and our inherent influence through our ownership interest. The related party revenues earned from our equity method investments was $ 276 million, $ 126 million and $ 45 million for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. Many of our joint ventures only perform on a single contract. The modification or termination of a contract under a joint venture could trigger an impairment in the fair value of our investment in these entities. In the aggregate, our maximum exposure to losses was $ 196 million related to our equity method investments as of October 3, 2025. Note 17 — Accumulated Other Comprehensive Income (Loss) The accumulated balances and reporting period activities for the years ended October 3, 2025, September 27, 2024 and September 29, 2023 related to accumulated other comprehensive income (loss) are summarized as follows: Gain (Loss) on Derivative Instruments Foreign Currency Translation Adjustments Pension Adjustments Income Tax (Provision) Benefit Related to Items of Other Comprehensive Income (Loss) Accumulated Other Comprehensive Income (Loss) (Amounts in millions) Balance at September 30, 2022 $ — $ ( 8 ) $ 22 $ ( 5 ) $ 9 Other comprehensive income (loss) before reclassification 27 3 26 ( 14 ) 42 Amounts reclassified from accumulated other comprehensive income (loss) ( 2 ) — ( 2 ) 1 ( 3 ) Balance at September 29, 2023 25 ( 5 ) 46 ( 18 ) 48 Other comprehensive (loss) income before reclassification ( 31 ) 8 11 2 ( 10 ) Amounts reclassified from accumulated other comprehensive (loss) income ( 16 ) — ( 2 ) 3 ( 15 ) Balance at September 27, 2024 ( 22 ) 3 55 ( 13 ) 23 Other comprehensive income (loss) before reclassification 21 3 3 ( 4 ) 23 Amounts reclassified from accumulated other comprehensive (loss) income ( 7 ) — ( 1 ) 2 ( 6 ) Balance at October 3, 2025 $ ( 8 ) $ 6 $ 57 $ ( 15 ) $ 40 Note 18 — Segment Information We operate our business activities and report financial results as two reportable segments: Digital Solutions (“DS”) and Global Engineering Solutions (“GES”). The Digital Solutions segment provides advanced digital and data-driven solutions including intelligence analytics, space system development, cybersecurity, and next generation IT across the federal government and commercial clients. The Global Engineering Solutions segment provides large-scale environmental remediation, nuclear power solutions, platform engineering, sustainment and supply chain management across all seven continents for the U.S. government and allied nations. The presentation of financial results as two reportable segments is consistent with the way the Company operates its business and the manner in which our chief operating decision maker (“CODM”), currently our Chief Executive Officer, manages the operations of the Company for purposes of allocating resources and assessing performance. The CODM evaluates the performance of our segments based on revenues and Adjusted EBITDA. Adjusted EBITDA is most comparable to net income (loss) attributable to common shareholders prepared based on GAAP. The Company defines Adjusted EBITDA as net income (loss) attributable to common shareholders adjusted for interest expense and other, net, provision for income taxes, depreciation and amortization, and certain discrete items that are not considered in the evaluation of ongoing operating performance. These discrete items include acquisition, transaction, and integration costs, non-cash gains and losses, loss on extinguishment of debt, utilization of certain fair market value adjustments assigned in purchase accounting, and stock-based compensation. While we believe Adjusted EBITDA is a useful metric in evaluating operating performance by allowing better evaluation of underlying segment performance and better period-to-period comparability, it is not a metric defined by GAAP and may not be comparable to non-GAAP metrics presented by other companies. In fiscal year 2025, the Company adopted ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures . Amongst other amendments, the standard requires disclosure of significant segment expenses that are 85 regularly provided to the CODM. Cost of revenues is the significant expense that is regularly provided to the Company's CODM, and includes direct contract costs such as labor, materials, and subcontractor costs, allocations of indirect costs, and depreciation expense related to property and equipment directly attributable to contracts. The following table presents segment information provided to the CODM and reconciles segment Adjusted EBITDA to net income (loss) attributable to common shareholders, with prior year performance measures recast to reflect the current reportable segment structure: For the years ended October 3, 2025 September 27, 2024 September 29, 2023 (Amounts in millions) DS GES Total DS GES Total DS GES Total Revenues $ 5,543 $ 8,850 $ 14,393 $ 1,981 $ 6,407 $ 8,388 $ 1,899 $ 5,966 $ 7,865 Cost of revenues ( 4,924 ) ( 7,956 ) ( 12,880 ) ( 1,761 ) ( 5,829 ) ( 7,590 ) ( 1,659 ) ( 5,424 ) ( 7,083 ) Other segment expenses (1) ( 182 ) ( 227 ) ( 409 ) ( 61 ) ( 119 ) ( 180 ) ( 81 ) ( 105 ) ( 186 ) Adjusted EBITDA attributable to Amentum Holdings, Inc. $ 437 $ 667 $ 1,104 $ 159 $ 459 $ 618 $ 159 $ 437 $ 596 Depreciation expense ( 40 ) ( 23 ) ( 27 ) Amortization of intangibles ( 479 ) ( 228 ) ( 298 ) Interest expense and other, net ( 353 ) ( 438 ) ( 397 ) Non-controlling interests ( 7 ) ( 1 ) ( 7 ) Acquisition, transaction and integration costs (2) ( 85 ) ( 62 ) ( 39 ) Non-cash GAAP expense (gain) (3) — 69 ( 186 ) Loss on extinguishment of debt (4) ( 12 ) ( 45 ) — Utilization of fair market value adjustments (5) 8 5 21 Stock-based compensation (6) ( 21 ) ( 18 ) ( 3 ) Income (loss) before income taxes 115 ( 123 ) ( 340 ) Provision for income taxes ( 56 ) 40 19 Net income (loss) including non-controlling interests 59 ( 83 ) ( 321 ) Net income (loss) attributable to non-controlling interests 7 1 7 Net income (loss) attributable to common shareholders $ 66 $ ( 82 ) $ ( 314 ) (1) Represents the difference between segment revenues, costs of revenues, and Adjusted EBITDA attributable to Amentum Holdings, Inc. Other segment expenses primarily includes selling, general, and administrative expenses, and equity earnings of non-consolidated subsidiaries and excludes certain discrete items that are not considered in the evaluation of ongoing performance. (2) Represents acquisition, transaction and integration costs, including severance, retention, and other adjustments related to acquisition and integration activities. (3) Represents a non-cash goodwill impairment charge and a non-cash gain on acquisition of controlling interest. (4) Represents the write-off of debt discount and debt issuance costs as a result of debt modifications. (5) Represents the periodic utilization of the fair market value adjustments assigned to certain equity method investments and non-controlling interests based on the remaining period of performance for the related contract. (6) Represents non-cash compensation expenses recognized for stock-based arrangements. Asset information by segment is not a key measure of performance used by the CODM. Note 19 — Composition of Certain Financial Statement Captions The following tables present financial information of certain consolidated balance sheet captions. Prepaid expenses and other current assets 86 As of (Amounts in millions) October 3, 2025 September 27, 2024 Prepaid expenses $ 87 $ 81 Prepaid taxes 57 47 Prepaid supplies and materials 18 23 Other current assets 35 80 Total prepaid expenses and other current assets $ 197 $ 231 Property and equipment, net As of (Amounts in millions) Useful Lives October 3, 2025 September 27, 2024 Aircraft 5 to 10 years $ 13 $ 13 Buildings 20 to 40 years 14 14 Computers and related equipment 1 to 5 years 37 34 Finance lease right-of-use assets Shorter of lease term or useful life 20 20 Leasehold improvements Shorter of lease term or useful life 38 42 Office furniture and fixtures 1 to 7 years 10 19 Vehicles and equipment 1 to 10 years 92 80 Gross property and equipment 224 222 Less accumulated depreciation ( 110 ) ( 78 ) Total property and equipment, net $ 114 $ 144 Depreciation expense was $ 40 million, $ 23 million and $ 27 million for the years ended October 3, 2025, September 27, 2024 and September 29, 2023, respectively. As of October 3, 2025, September 27, 2024 and September 29, 2023, Property and equipment, net, also included the accrual for property additions in accounts payable of $ 3 million, $ 1 million and $ 2 million, respectively. Accrued compensation and benefits As of (Amounts in millions) October 3, 2025 September 27, 2024 Wages, compensation and other benefits $ 448 $ 421 Accrued vacation 257 275 Total accrued compensation and benefits $ 705 $ 696 87 Other current liabilities As of (Amounts in millions) October 3, 2025 September 27, 2024 Contract losses $ 170 $ 61 Current portion of operating lease liabilities 67 67 MARPA payable 49 39 Reserves 46 50 Customer payables 42 33 Income tax payable 13 17 Accrued other taxes 36 42 Other 65 47 Total other current liabilities $ 488 $ 356 Other long-term liabilities As of (Amounts in millions) October 3, 2025 September 27, 2024 Operating lease liabilities $ 157 $ 193 Reserves 113 185 Other 55 66 Total other long-term liabilities $ 325 $ 444 Note 20 — Earnings (Loss) Per Share For the periods prior to September 27, 2024, the Company retrospectively adjusted the weighted average shares used in determining loss per share to reflect the conversion of the ownership interests of Amentum Parent Holdings LLC held by AJVLP that converted into 90,021,804 shares of the Company’s common stock at Transaction close. As discussed in Note 11 — Stock-Based Compensation certain employees of the Company were granted stock-based compensation in the form of Class B Time-Vested and Performance-Vested units of AJVLP. The compensation expense associated with such awards is recognized in the Company’s financial statements, however as such shares represent outstanding equity of AJVLP, and not of the Company, such awards do not impact the Company’s calculation of the weighted average shares outstanding. For the year ended September 27, 2024, Jacobs’ restricted stock units converted to Amentum time-based restricted stock were excluded from the computation of diluted loss per share because inclusion of these amounts would have had an anti-dilutive effect. There were no anti-dilutive shares in fiscal year 2025 or 2023. Basic and diluted earnings (loss) per share are computed as follows (in millions, except per share data): For the years ended October 3, 2025 September 27, 2024 September 29, 2023 Net income (loss) attributable to common shareholders $ 66 $ ( 82 ) $ ( 314 ) Weighted-average number of basic shares outstanding during the period 243 91 90 Dilutive effect of RSUs 1 — — Weighted-average number of diluted shares outstanding during the period 244 91 90 Basic earnings (loss) per share $ 0.27 $ ( 0.90 ) $ ( 3.49 ) Diluted earnings (loss) per share $ 0.27 $ ( 0.90 ) $ ( 3.49 ) Note 21 — Legal Proceedings and Commitments and Contingencies The Company is involved in various claims, disputes and administrative proceedings arising in the normal course of business. Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that an unfavorable result and/or liability will be incurred and the cost of the unfavorable result or liability can be reasonably estimated. Management is of the opinion that any liability or loss associated with such matters, either individually or in the aggregate, will not have a material adverse effect on the Company’s operations and liquidity. 88 Payments to the Company on cost-plus-fee contracts are provisional and are subject to adjustments upon audit by the Defense Contract Audit Agency (“DCAA”). In management’s opinion, audit adjustments that may result from audits not yet completed or started are not expected to have a material adverse effect on the Company’s operations and liquidity. U.S. Government Investigations We primarily sell our services to the U.S. Government. These contracts are subject to extensive legal and regulatory requirements, and we are occasionally the subject of investigations by various agencies of the U.S. Government who investigate whether our operations are being conducted in accordance with these requirements. Such investigations could result in administrative, civil or criminal liabilities, including repayments, fines or penalties being imposed on us, or could lead to suspension or debarment from future U.S. Government contracting. U.S. Government investigations often take years to complete and may result in adverse action against us. Any adverse actions arising from such matters could have a material effect on our ability to invoice and receive timely payment on our contracts, perform contracts or compete for contracts with the U.S. Government and could have a material effect on our operating performance. There are currently no investigations that are expected to have a material impact on our results of operations. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.