What changed in this filing

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Item 1. Financial Statements

2022-05-03 compared with 2022-02-08 · 292 added, 210 removed, 761 unchanged (40% of the section changed)

4 unchanged sentences

(In thousands, except share information)

December 31, 2021 October 1, 2021

April 1, 2022 October 1, 2021

Current Assets:

14 unchanged sentences

Current Liabilities:

Short-term debt $ 53,400 $ 53,456

Current maturities of long-term debt $ 52,911 $ 53,456

Accounts payable 921,372 908,441

16 unchanged sentences

issued and outstanding 128,899,796 shares and 128,892,540

shares as of December 31, 2021 and October 1, 2021, respectively

shares as of April 1, 2022 and October 1, 2021, respectively

128,900 128,893

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CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended December 31, 2021 and January 1, 2021

Three and Six Months Ended April 1, 2022 and April 2, 2021

(In thousands, except per share information)

For the Three Months Ended

December 31, 2021 January 1, 2021

For the Three Months Ended For the Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Revenues $ 3,834,059 $ 3,547,873 $ 7,214,684 $ 6,929,708

2 unchanged sentences

Selling, general and administrative expenses ( 704,195 ) ( 808,125 ) ( 1,323,336 ) ( 1,226,246 )

Operating Profit 177,333 213,940

Operating Profit (Loss) 166,215 ( 41,112 ) 343,548 172,826

Other Income (Expense):

1 unchanged sentence

Interest expense ( 21,995 ) ( 15,464 ) ( 41,421 ) ( 32,777 )

Miscellaneous income, net 9,682 156,360

Miscellaneous income (expense), net 10,681 ( 56,313 ) 20,362 100,047

Total other (expense) income, net ( 10,933 ) ( 71,169 ) ( 19,177 ) 69,002

Earnings from Continuing Operations Before Taxes 169,090 354,111

Income Tax Expense from Continuing Operations ( 15,889 ) ( 87,023 )

Net Earnings of the Group from Continuing Operations 153,201 267,088

Net Earnings of the Group from Discontinued Operations ( 232 ) ( 14 )

Net Earnings of the Group 152,969 267,074

Earnings (Loss) from Continuing Operations Before Taxes 155,282 ( 112,281 ) 324,371 241,828

Income Tax (Expense) Benefit from Continuing Operations ( 46,166 ) 20,772 ( 62,054 ) ( 66,250 )

Net Earnings (Loss) of the Group from Continuing Operations 109,116 ( 91,509 ) 262,317 175,578

Net (Loss) Earnings of the Group from Discontinued Operations ( 1 ) 11,320 ( 233 ) 11,305

Net Earnings (Loss) of the Group 109,115 ( 80,189 ) 262,084 186,883

Net Earnings Attributable to Noncontrolling Interests from Continuing Operations ( 10,261 ) ( 10,158 ) ( 19,514 ) ( 20,184 )

Net Earnings Attributable to Redeemable Noncontrolling interests ( 9,683 ) —

Net Earnings Attributable to Jacobs from Continuing Operations 134,266 257,062

Net (Earnings) Loss Attributable to Redeemable Noncontrolling interests ( 10,038 ) 101,392 ( 19,721 ) 101,392

Net Earnings (Loss) Attributable to Jacobs from Continuing Operations 88,817 ( 275 ) 223,082 256,786

Net Earnings Attributable to Jacobs $ 88,816 $ 11,045 $ 222,849 $ 268,091

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended December 31, 2021 and January 1, 2021

Three and Six Months Ended April 1, 2022 and April 2, 2021

(In thousands)

For the Three Months Ended

December 31, 2021 January 1, 2021

Net Earnings of the Group $ 152,969 $ 267,074

For the Three Months Ended For the Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Net Earnings (Loss) of the Group $ 109,115 $ ( 80,189 ) $ 262,084 $ 186,883

Other Comprehensive Income:

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Other comprehensive income before taxes 12,700 13,644 20,909 84,212

Income Tax Benefit (Expense):

Income Tax (Expense) Benefit:

Foreign currency translation adjustment ( 400 ) 3,409 2,590 ( 11,036 )

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( 13,418 ) ( 4,744 ) ( 14,841 ) ( 19,794 )

Net other comprehensive income 6,786 55,518

Net Comprehensive Income of the Group 159,755 322,592

Net other comprehensive (loss) income ( 718 ) 8,900 6,068 64,418

Net Comprehensive Income (Loss) of the Group 108,397 ( 71,289 ) 268,152 251,301

Net Earnings Attributable to Noncontrolling Interests ( 10,261 ) ( 10,158 ) ( 19,514 ) ( 20,184 )

Net Earnings Attributable to Redeemable Noncontrolling interests ( 9,683 ) —

Net (Earnings) Loss Attributable to Redeemable Noncontrolling interests ( 10,038 ) 101,392 ( 19,721 ) 101,392

Net Comprehensive Income Attributable to Jacobs $ 88,098 $ 19,945 $ 228,917 $ 332,509

3 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended December 31, 2021 and January 1, 2021

For the Three Months Ended April 1, 2022 and April 2, 2021

(In thousands)

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Jacobs Stockholders’ Equity Noncontrolling Interests Total Group Stockholders’ Equity

Balances at October 2, 2020 $ 129,748 $ 2,598,446 $ 4,020,575 $ ( 933,057 ) $ 5,815,712 $ 39,955 $ 5,855,667

Balances at January 1, 2021 $ 130,035 $ 2,597,586 $ 4,249,408 $ ( 877,539 ) $ 6,099,490 $ 43,877 $ 6,143,367

Net earnings — — 11,045 — 11,045 10,158 21,203

3 unchanged sentences

— — — 652 652 — 652

(Loss) Gain on derivatives, net of deferred taxes of ($ 221 )

Gain on derivatives, net of deferred taxes of $ 7,315

— — — 20,289 20,289 — 20,289

Dividends — — ( 27,482 ) — ( 27,482 ) — ( 27,482 )

Redeemable Noncontrolling interests redemption value adjustment to Common Shareholders — — ( 107,238 ) — ( 107,238 ) — ( 107,238 )

Noncontrolling interests - distributions and other — — — — — ( 18,728 ) ( 18,728 )

2 unchanged sentences

Repurchases of equity securities — — ( 148 ) — ( 148 ) — ( 148 )

Balances at January 1, 2021

Balances at April 2, 2021

$ 130,172 $ 2,621,454 $ 4,125,452 $ ( 868,639 ) $ 6,008,439 $ 35,307 $ 6,043,746

Balances at December 31, 2021 $ 129,153 $ 2,641,059 $ 4,087,390 $ ( 787,656 ) $ 6,069,946 $ 29,999 $ 6,099,945

Net earnings — — 88,816 — 88,816 10,261 99,077

Foreign currency translation adjustments, net of deferred taxes of $ 400

— — — ( 46,227 ) ( 46,227 ) — ( 46,227 )

Pension liability, net of deferred taxes of $ 728

— — — 11,308 11,308 — 11,308

Gain on derivatives, net of deferred taxes of $ 12,290

— — — 34,201 34,201 — 34,201

Dividends — — ( 29,871 ) — ( 29,871 ) — ( 29,871 )

Redeemable Noncontrolling interests redemption value adjustment — — ( 35,117 ) — ( 35,117 ) — ( 35,117 )

Noncontrolling interests - distributions and other — — — — — 4,272 4,272

Stock based compensation — 18,147 — — 18,147 — 18,147

Issuances of equity securities including shares withheld for taxes 142 16,134 ( 33 ) — 16,243 — 16,243

Repurchases of equity securities ( 395 ) ( 8,084 ) ( 41,521 ) — ( 50,000 ) — ( 50,000 )

Balances at April 1, 2022 $ 128,900 $ 2,667,256 $ 4,069,664 $ ( 788,374 ) $ 6,077,446 $ 44,532 $ 6,121,978

See the accompanying Notes to Consolidated Financial Statements – Unaudited.

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months Ended April 1, 2022 and April 2, 2021

(In thousands)

Common Stock Additional Paid-in Capital Retained Earnings Accumulated Other Comprehensive Income (Loss) Total Jacobs Stockholders’ Equity Noncontrolling Interests Total Group Stockholders’ Equity

Balances at October 2, 2020 $ 129,748 $ 2,598,446 $ 4,020,575 $ ( 933,057 ) $ 5,815,712 $ 39,955 $ 5,855,667

7 unchanged sentences

Dividends — — ( 27,515 ) — ( 27,515 ) ( 27,515 )

Redeemable Noncontrolling interests redemption value adjustment to Common Shareholders — — ( 107,238 ) — ( 107,238 ) — ( 107,238 )

Noncontrolling interests - distributions and other — — — — — ( 24,832 ) ( 24,832 )

Stock based compensation — 26,977 — — 26,977 — 26,977

Issuances of equity securities including shares withheld for taxes 675 1,058 ( 8,790 ) — ( 7,057 ) — ( 7,057 )

Repurchases of equity securities ( 251 ) ( 5,027 ) ( 19,671 ) — ( 24,949 ) — ( 24,949 )

Balances at April 2, 2021 $ 130,172 $ 2,621,454 $ 4,125,452 $ ( 868,639 ) $ 6,008,439 $ 35,307 $ 6,043,746

Balances at October 1, 2021 $ 128,893 $ 2,590,012 $ 4,015,578 $ ( 794,442 ) $ 5,940,041 $ 34,796 $ 5,974,837

Net earnings — — 222,849 — 222,849 19,514 242,363

Foreign currency translation adjustments, net of deferred taxes of $( 2,590 )

— — — ( 51,922 ) ( 51,922 ) — ( 51,922 )

Pension liability, net of deferred taxes of $ 2,196

— — — 17,879 17,879 — 17,879

Gain on derivatives, net of deferred taxes of $ 15,235

— — — 40,111 40,111 — 40,111

Dividends — — ( 29,994 ) — ( 29,994 ) — ( 29,994 )

Redeemable Noncontrolling interests redemption value adjustment — — ( 50,320 ) — ( 50,320 ) — ( 50,320 )

4 unchanged sentences

Repurchases of equity securities ( 737 ) 35,043 ( 84,306 ) — ( 50,000 ) — ( 50,000 )

Balances at December 31, 2021 $ 129,153 $ 2,641,059 $ 4,087,390 $ ( 787,656 ) $ 6,069,946 $ 29,999 $ 6,099,945

Balances at April 1, 2022 $ 128,900 $ 2,667,256 $ 4,069,664 $ ( 788,374 ) $ 6,077,446 $ 44,532 $ 6,121,978

See the accompanying Notes to Consolidated Financial Statements – Unaudited.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended December 31, 2021 and January 1, 2021

For the Six Months Ended April 1, 2022 and April 2, 2021

(In thousands)

For the Three Months Ended

December 31, 2021 January 1, 2021

For the Six Months Ended

April 1, 2022 April 2, 2021

Cash Flows from Operating Activities:

4 unchanged sentences

Intangible assets 95,338 53,753

Gain on sale of ECR business — ( 15,608 )

Gain on investment in equity securities — ( 114,443 )

1 unchanged sentence

Equity in earnings of operating ventures, net of return on capital distributions 13,280 6,353

Loss (gain) on disposals of assets, net 151 ( 134 )

Loss on disposals of assets, net 421 353

Impairment of long-lived assets and equity method investment 74,585 33,197

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Acquisitions of businesses, net of cash acquired ( 412,748 ) ( 1,741,062 )

Disposal of investment in equity securities — 13,027

Proceeds related to sales of businesses — 36,360

Net cash used for investing activities ( 458,825 ) ( 1,740,494 )

2 unchanged sentences

Repayments of long-term borrowings ( 1,125,528 ) ( 1,328,283 )

Proceeds from short-term borrowings — —

Repayments of short-term borrowings ( 6,359 ) ( 7,675 )

Debt issuance costs — ( 2,697 )

Proceeds from issuances of common stock 28,187 18,585

1 unchanged sentence

Taxes paid on vested restricted stock ( 28,398 ) ( 25,642 )

Cash dividends, including to noncontrolling interests ( 41,565 ) ( 35,718 )

Cash dividends to shareholders ( 57,247 ) ( 52,438 )

Net (dividends) contributions associated with noncontrolling interests ( 9,416 ) ( 29,442 )

Repurchase of redeemable noncontrolling interests ( 35,095 ) —

1 unchanged sentence

Effect of Exchange Rate Changes ( 12,792 ) 28,918

Net Increase (Decrease) in Cash and Cash Equivalents and Restricted Cash 219,162 ( 25,412 )

Net Increase in Cash and Cash Equivalents and Restricted Cash 209,783 304,430

Cash and Cash Equivalents, including Restricted Cash, at the Beginning of the Period 1,026,575 862,424

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Readers of this Quarterly Report on Form 10-Q should also read our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 1, 2021 (“2021 Form 10-K”).

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our consolidated financial statements at December 31, 2021, and for the three month periods ended December 31, 2021 and January 1, 2021.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our consolidated financial statements at April 1, 2022, and for the three and six month periods ended April 1, 2022.

Our interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.

On November 19, 2021, a subsidiary of Jacobs acquired all outstanding shares of common stock of BlackLynx, a provider of high-performance software, to complement Jacobs' portfolio of cyber, intelligence and digital solutions.

On February 4, 2022, the Company acquired StreetLight Data, Inc.

("StreetLight").

StreetLight is a pioneer of mobility analytics who uses its data and machine learning resources to shed light on mobility and enable users to solve complex transportation problems.

The Company paid total base consideration of approximately $190.7 million in cash, and issued $0.9 million in equity and $5.2 million in in-the-money stock options to the former owners of StreetLight.

The Company also paid off StreetLight's debt of approximately $1.0 million simultaneously with the consummation of the acquisition.

The Company has recorded its preliminary purchase price allocation associated with the acquisition, which is summarized in Note 16- Other Business Combinations.

On November 19, 2021, a subsidiary of Jacobs acquired all outstanding shares of common stock of BlackLynx ("BlackLynx"), a provider of high-performance software, to complement Jacobs' portfolio of cyber, intelligence and digital solutions.

The Company paid total base consideration of approximately $ 235.4 million in cash to the former owners of BlackLynx.

1 unchanged sentence

The estimated fair value of the contingent consideration on the acquisition date is $ 0.4 million.

The future contingent consideration will be paid, if and to the extent achieved, in second quarter of fiscal 2023.

The future contingent consideration will be paid, if and to the extent achieved, in the second quarter of fiscal 2023.

In conjunction with the acquisition, the Company also paid off BlackLynx's debt of approximately $ 5.3 million simultaneously with the consummation of the acquisition.

The Company has recorded its preliminary purchase price allocation associated with the acquisition, which is summarized in Note 16- Other Business Combinations.

On March 2, 2021, Jacobs completed the strategic investment of a 65 % interest in PA Consulting, a UK-based leading innovation and transformation consulting firm.

On March 2, 2021, Jacobs completed the strategic investment of a 65 % interest in PA Consulting Group Limited ("PA Consulting"), a UK-based leading innovation and transformation consulting firm.

The total consideration paid by the Company was $ 1.7 billion, funded through cash on hand, proceeds from a new term loan and draws on the Company's existing revolving credit facility.

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See Note 15- PA Consulting Business Combination for more discussion on the investment and Note 12- Borrowings for more discussion on the financing for the transaction.

On November 24, 2020, a subsidiary of Jacobs completed the acquisition of Buffalo Group, a leader in advanced cyber and intelligence solutions which allows Jacobs to further expand its cyber and intelligence solutions offerings to government clients.

On November 24, 2020, a subsidiary of Jacobs completed the acquisition of Buffalo Group, a leader in advanced cyber and intelligence solutions, which allows Jacobs to further expand its cyber and intelligence solutions offerings to

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

government clients.

The Company paid total consideration of $ 190.1 million, which was comprised of approximately $ 182.4 million in cash to the former owners of Buffalo Group and contingent consideration of $ 7.7 million.

3 unchanged sentences

The Company has recorded its final purchase price allocation associated with the acquisition, which is summarized in Note 16- Other Business Combinations.

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

On April 26, 2019, Jacobs completed the sale of its Energy, Chemicals and Resources ("ECR") business to Worley Limited, a company incorporated in Australia ("Worley"), for a purchase price of $ 3.4 billion consisting of (i) $ 2.8 billion in cash plus (ii) 58.2 million ordinary shares of Worley, subject to adjustments for changes in working capital and certain other items (the “ECR sale”).

On April 26, 2019, Jacobs completed the sale of its Energy, Chemicals and Resources ("ECR") business to Worley Limited ("Worley"), a company incorporated in Australia, for a purchase price of $ 3.4 billion consisting of (i) $ 2.8 billion in cash plus (ii) 58.2 million ordinary shares of Worley, subject to adjustments for changes in working capital and certain other items (the “ECR sale”).

As a result of the ECR sale, substantially all ECR-related assets and liabilities were sold (the "Disposal Group").

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Please also refer to Note 19- Commitments and Contingencies and Derivative Financial Instruments for discussion regarding the Company's derivative instruments.

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The net carrying amounts of cash and cash equivalents, trade receivables and payables and short-term debt approximate fair value due to the short-term nature of these instruments.

2 unchanged sentences

Fair value for the identified intangible assets is generally estimated using inputs primarily for the income approach using the multiple period excess earnings method and the relief from royalties method.

The significant assumptions used in estimating fair value include (i)

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

revenue projections of the business, (ii) profitability and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows.

The significant assumptions used in estimating fair value include (i) revenue projections of the business, including profitability, (ii) attrition rates and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows.

Other personal property assets, such as furniture, fixtures and equipment, are valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation.

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operations and maintenance services;

and technical, digital, p rocess, scientific and systems consulting process, scientific, and systems consulting services.

and technical, digital, p rocess, scientific and systems consulting services.

We provide our services through offices and subsidiaries located primarily in North America, Europe, the Middle East, India, Australia, Africa, and Asia.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table further disaggregates our revenue by geographic area for the three months ended December 31, 2021 and January 1, 2021 (in thousands):

Three Months Ended

December 31, 2021 January 1, 2021

The following table further disaggregates our revenue by geographic area for the three and six months ended April 1, 2022 and April 2, 2021 (in thousands):

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

United States $ 2,499,737 $ 2,474,672 $ 4,648,289 $ 4,931,712

8 unchanged sentences

Contract liabilities represent amounts billed to clients in excess of revenue recognized to date.

Revenue recognized for the three months ended December 31, 2021 and January 1, 2021 that was included in the contract liability balance on October 1, 2021 and October 2, 2020 was $ 291.5 million and $ 259.0 million respectively.

Revenue recognized for the three and six months ended April 1, 2022 that was previously included in the contract liability balance on October 1, 2021 was $ 79.6 million and $ 371.0 million, respectively.

Revenue recognized for the three and six months ended April 2, 2021 that was included in the contract liability balance on October 2, 2020 was $ 96.5 million and $ 355.6 million respectively.

Remaining Performance Obligation

The Company’s remaining performance obligations as of December 31, 2021 represent a measure of the total dollar value of work to be performed on contracts awarded and in progress.

The Company had approximately $ 13.2 billion in remaining performance obligations as of December 31, 2021.

The Company’s remaining performance obligations as of April 1, 2022 represent a measure of the total dollar value of work to be performed on contracts awarded and in progress.

The Company had approximately $ 15.2 billion in remaining performance obligations as of April 1, 2022.

The Company expects to recognize approximately 57 % of our remaining performance obligations into revenue within the next twelve months and the remaining 43 % thereafter.

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Participating securities and common shares have equal rights to undistributed earnings.

Net earnings used for the purpose of determining basic and diluted EPS is determined by taking net earnings, less earnings available to participating securities and the preferred redeemable noncontrolling interests redemption value adjustment associated with the PA Consulting transaction.

The following table reconciles the denominator used to compute basic EPS to the denominator used to compute diluted EPS for the three months ended December 31, 2021 and January 1, 2021 (in thousands):

Net earnings used for the purpose of determining basic and diluted EPS is determined by taking net earnings less earnings available to participating securities.

The following table reconciles the denominator used to compute basic EPS to the denominator used to compute diluted EPS for the three and six months ended April 1, 2022 and April 2, 2021 (in thousands):

JACOBS ENGINEERING GROUP INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Three Months Ended

December 31, 2021 January 1, 2021

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Numerator for Basic and Diluted EPS:

Net earnings from continuing operations allocated to common stock for EPS calculation $ 134,266 $ 257,062

Net earnings from discontinued operations allocated to common stock for EPS calculation $ ( 232 ) $ ( 14 )

Net earnings (loss) from continuing operations allocated to common stock for EPS calculation $ 88,817 $ ( 275 ) $ 223,082 $ 256,786

Net (loss) earnings from discontinued operations allocated to common stock for EPS calculation $ ( 1 ) $ 11,320 $ ( 233 ) $ 11,305

Net earnings allocated to common stock for EPS calculation $ 88,816 $ 11,045 $ 222,849 $ 268,091

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Diluted Earnings Per Share $ 0.68 $ 0.08 $ 1.71 $ 2.04

(1) For the three months ended April 2, 2021, because net earnings (loss) from continuing operations allocated to common stock for EPS was a loss, the effect of antidilutive securities of 902 equivalent shares were excluded from the denominator in calculating diluted EPS.

Share Repurchases

On January 16, 2020, the Company's Board of Directors authorized a share repurchase program of up to $ 1.0 billion of the Company's common stock, to expire on January 15, 2023 (the "2020 Repurchase Authorization").

In the fourth quarter of fiscal 2021, the Company initiated an accelerated share repurchase program by advancing $ 250 million to a financial institution in a privately negotiated transaction, with final non-cash settlement on the program during the first quarter of fiscal 2022 of 342,054 shares as depicted in the table below.

The following table summarizes the activity under the 2020 Repurchase Authorization through the first fiscal quarter of 2022:

The following table summarizes the activity under the 2020 Repurchase Authorization through the second fiscal quarter of 2022:

Amount Authorized

(2020 Repurchase Authorization) Average Price Per Share (1) Shares Repurchased Total Shares Retired

(2020 Repurchase Authorization) Average Price Per Share (1) Total Shares Retired Shares Repurchased

$ 1,000,000,000 $ 131.62 737,369 737,369

(1) Includes commissions paid and calculated at the average price per share

JACOBS ENGINEERING GROUP INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

As of December 31, 2021, the Company has $ 782.9 million remaining under the 2020 Repurchase Authorization.

(1) Includes commissions paid and calculated at the average price per share

As of April 1, 2022, the Company has $ 732.9 million remaining under the 2020 Repurchase Authorization.

Our share repurchase program does not obligate the Company to purchase any shares.

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The timing, amount and manner of share repurchases may depend upon market conditions and economic circumstances, availability of investment opportunities, the availability and costs of financing, currency fluctuations, the market price of the Company's common stock, other uses of capital and other factors.

On January 26, 2022, the Company’s Board of Directors declared a quarterly dividend of $ 0.23 per share of the Company’s common stock to be paid on March 25, 2022, to shareholders of record on the close of business on February 25, 2022.

On April 28, 2022, the Company’s Board of Directors declared a quarterly dividend of $ 0.23 per share of the Company’s common stock to be paid on June 24, 2022, to shareholders of record on the close of business on May 27, 2022.

Future dividend declarations are subject to review and approval by the Company’s Board of Directors.

Dividends paid through the first fiscal quarter of 2022 and the preceding fiscal year are as follows:

Dividends paid through the second fiscal quarter of 2022 and the preceding fiscal year are as follows:

Declaration Date Record Date Payment Date Cash Amount (per share)

January 26, 2022 February 25, 2022 March 25, 2022 $ 0.23

September 23, 2021 October 15, 2021 October 29, 2021 $ 0.21

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Goodwill and Intangibles

The carrying value of goodwill and appearing in the accompanying Consolidated Balance Sheets at December 31, 2021 and October 1, 2021 was as follows (in thousands):

The carrying value of goodwill and appearing in the accompanying Consolidated Balance Sheets at April 1, 2022 and October 1, 2021 was as follows (in thousands):

Critical Mission Solutions People & Places Solutions PA Consulting Total

1 unchanged sentence

Acquired 199,587 147,568 — 347,155

Foreign Exchange Impact ( 698 ) ( 1,335 ) ( 5,168 ) ( 7,201 )

Foreign currency translation ( 3,477 ) ( 7,165 ) ( 47,481 ) ( 58,123 )

Post-Acquisition Adjustments — — 5,983 5,983

Balance December 31, 2021 $ 2,708,431 $ 3,239,448 $ 1,402,615 $ 7,350,494

The following table provides certain information related to the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets at December 31, 2021 and October 1, 2021 (in thousands):

Balance April 1, 2022 $ 2,746,741 $ 3,381,186 $ 1,364,088 $ 7,492,015

The following table provides certain information related to the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets at April 1, 2022 and October 1, 2021 (in thousands):

Customer Relationships, Contracts and Backlog Developed Technology Trade Names Total

3 unchanged sentences

Foreign currency translation ( 22,484 ) ( 190 ) ( 6,824 ) ( 29,498 )

Balances December 31, 2021 $ 1,351,364 $ 54,420 $ 213,129 $ 1,618,913

Balances April 1, 2022 $ 1,269,757 $ 79,305 $ 204,221 $ 1,553,283

The following table presents estimated amortization expense of intangible assets for the remainder of fiscal 2022 and for the succeeding years.

The amounts below include preliminary amortization estimates for the BlackLynx and PA Consulting opening balance sheet fair values that are still preliminary and are subject to change.

The amounts below include preliminary amortization estimates for the Streetlight and BlackLynx opening balance sheet fair values that are still subject to change.

Fiscal Year (in millions)

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Receivables and Contract Assets

The following table presents the components of receivables appearing in the accompanying Consolidated Balance Sheets at December 31, 2021 and October 1, 2021, as well as certain other related information (in thousands):

December 31, 2021 October 1, 2021

The following table presents the components of receivables appearing in the accompanying Consolidated Balance Sheets at April 1, 2022 and October 1, 2021, as well as certain other related information (in thousands):

April 1, 2022 October 1, 2021

Components of receivables and contract assets:

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We anticipate that substantially all of such unbilled amounts will be billed and collected over the next twelve months.

Contract assets represent unbilled amounts where the right to payment is subject to more than merely the passage of time and includes performance-based incentives and services provided ahead of agreed contractual milestones.

Contract assets are transferred to unbilled receivables when the right to consideration becomes unconditional and are transferred to amounts billed upon invoicing.

The increase in contract assets was a result of normal business activity and not materially impacted by any other factors.

Accumulated Other Comprehensive Income

The following table presents the Company's roll forward of accumulated other comprehensive income (loss) after-tax as of December 31, 2021 (in thousands):

Change in Pension Liabilities Foreign Currency Translation Adjustment Gain/(Loss) on Cash Flow Hedges Total

The following table presents the Company's roll forward of accumulated other comprehensive income (loss) after-tax as of April 1, 2022 (in thousands):

Change in Net Pension Obligation Foreign Currency Translation Adjustment Gain/(Loss) on Cash Flow Hedges Total

Balance at October 1, 2021

2 unchanged sentences

Reclassifications from accumulated other comprehensive income (loss) — — 3,575 3,575

Balance at December 31, 2021

Balance at April 1, 2022

$ ( 376,682 ) $ ( 459,162 ) $ 47,470 $ ( 788,374 )

2 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The Company’s effective tax rates from continuing operations for the three months ended December 31, 2021 and January 1, 2021 were 9.4 % and 24.6 %, respectively.

The Company’s effective tax rate from continuing operations for the three months ended December 31, 2021 was lower than the corresponding rate in the prior period primarily due to a current year tax benefit of $ 15.7 million related to the release of previously reserved foreign tax credits, $ 4.2 million excess tax benefit attributable to stock compensation, and $ 4.0 million benefit from filing amended status returns.

The Company’s effective tax rates from continuing operations for the three months ended April 1, 2022 and April 2, 2021 were 29.7 % and 18.5 %, respectively, with the change due primarily to the absence of a $ 7.7 million benefit the Company recognized in the three months ended April 2, 2021 associated with a change in the Company’s assertion about the indefinite reinvestment of certain foreign unremitted earnings in India, other discrete foreign tax items and higher state taxes, partly offset by the absence in the current year of certain nondeductible compensation related charges associated with our PA Consulting investment that occurred in the three month period of fiscal 2021.

The Company's effective tax rates from continuing operations for the six months ended April 1, 2022 and April 2, 2021 were 19.1 % and 27.4 %, respectively, with the decrease primarily due to a tax benefit of $ 15.7 million related to the release of valuation allowance on foreign tax credits for the six months ended April 1, 2022 and the absence of certain non-deductible pre-tax compensation charges associated with our investment in PA Consulting for the six month period in fiscal 2021, partly offset by the absence of the 2021 period benefit from the India unremitted earnings reinvestment item mentioned above.

The amount of income taxes the Company pays is subject to ongoing audits by tax jurisdictions around the world.

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Likewise, the entire amount of each of the assets and liabilities are included in the Company’s Consolidated Balance Sheets.

For the consolidated VIEs, the carrying value of assets and liabilities was $ 266.8 million and $ 208.7 million, respectively, as of December 31, 2021 and $ 289.8 million and $ 220.8 million, respectively, as of October 1, 2021.

For the consolidated VIEs, the carrying value of assets and liabilities was $ 386.9 million and $ 255.8 million, respectively, as of April 1, 2022 and $ 289.8 million and $ 220.8 million, respectively, as of October 1, 2021.

There are no consolidated VIEs that have debt or credit facilities.

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See Note 15 - PA Consulting Business Combination for more discussion on the acquisition.

Unconsolidated joint ventures are accounted for under proportionate consolidation or the equity method.

Proportionate consolidation is used for joint ventures that include unincorporated legal entities and activities of the joint venture that are construction-related.

For those joint ventures accounted for under proportionate consolidation, only the Company’s pro rata share of assets, liabilities, revenue, and costs are included in the Company’s balance sheet and results of operations.

JACOBS ENGINEERING GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

For the proportionate consolidated VIEs, the carrying value of assets and liabilities was $ 114.2 million and $ 127.5 million, respectively, as of December 31, 2021, and $ 115.1 million and $ 129.5 million, respectively, as of October 1, 2021.

Unconsolidated joint ventures are accounted for under proportionate consolidation or the equity method.

Proportionate consolidation is used for joint ventures that include unincorporated legal entities and activities of the joint venture that are construction-related.

For the proportionate consolidated VIEs, the carrying value of assets and liabilities was $ 119.5 million and $ 146.1 million, respectively, as of April 1, 2022, and $ 115.1 million and $ 129.5 million, respectively, as of October 1, 2021.

For those joint ventures accounted for under the equity method, the Company's investment balances for the joint venture are included in Other Noncurrent Assets:

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These basis differences are amortized based on an internal allocation to underlying net assets, excluding allocations to goodwill.

As of December 31, 2021, the Company’s equity method investments exceeded its share of venture net assets by $ 36.6 million.

Our investments in equity method joint ventures on the Consolidated Balance Sheets as of December 31, 2021 and October 1, 2021 were $ 106.7 million and $ 121.3 million, respectively.

During the three months ended December 31, 2021 and January 1, 2021, we recognized income from equity method joint ventures of $ 6.8 million and $ 18.3 million, respectively.

Accounts receivable from unconsolidated joint ventures accounted for under the equity method is $ 16.1 million and $ 19.7 million as of December 31, 2021 and October 1, 2021, respectively.

As of April 1, 2022, the Company’s equity method investments exceeded its share of venture net assets by $ 36.3 million.

Our investments in equity method joint ventures on the Consolidated Balance Sheets as of April 1, 2022 and October 1, 2021 were $ 105.4 million and $ 121.3 million, respectively.

During the three months ended April 1, 2022 and April 2, 2021, we recognized income from equity method joint ventures of $ 12.5 million and $ 11.9 million, respectively.

During the six months ended April 1, 2022 and April 2, 2021, we recognized income from equity method joint ventures of $ 19.3 million and $ 30.2 million, respectively.

Accounts receivable from unconsolidated joint ventures accounted for under the equity method is $ 22.4 million and $ 19.7 million as of April 1, 2022 and October 1, 2021, respectively.

The Company held a 24.5 % interest in AWE Management Ltd ("AWE ML") that was accounted for under the equity method.

AWE ML was previously under a contractual operating arrangement with the UK Ministry of Defence (MoD) with multiple years remaining under the arrangement, and during fiscal 2021, the MoD unexpectedly announced plans to change its operating agreements with AWE ML that resulted in the early termination of the current contract in 2021.

During the three months ended January 1, 2021, the Company recorded an other-than-temporary impairment charge on its investment in AWE ML in the amount of $ 27.9 million, which was included in miscellaneous income (expense), net in the consolidated statement of earnings as a result of the contract termination.

During the six months ended April 2, 2021, the Company recorded an other-than-temporary impairment charge on its investment in AWE ML in the amount of $ 33.2 million, which was included in miscellaneous income (expense), net in the consolidated statement of earnings as a result of the contract termination.

The Company held a cost method investment in C3.ai, Inc.

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During fiscal 2021 and subsequent to the IPO, the Company sold all shares owned in C3.

Dividend income, unrealized gains and losses on changes in fair value and related realized gains and losses on disposal of the C3 shares were recognized in miscellaneous income (expense), net in the consolidated statement of earnings, which was $ 82.6 million, net, for the three months ended January 1, 2021 .

Dividend income, unrealized gains and related realized gains on disposal of these shares of $ 48.6 million were recognized in miscellaneous income (expense), net, in the consolidated statement of earnings for the six months ended April 2, 2021 .

JACOBS ENGINEERING GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

At December 31, 2021 and October 1, 2021, long-term debt consisted of the following (principal amounts in thousands):

Interest Rate Maturity December 31, 2021 October 1, 2021

At April 1, 2022 and October 1, 2021, long-term debt consisted of the following (principal amounts in thousands):

Interest Rate Maturity April 1, 2022 October 1, 2021

Revolving Credit Facility Benchmark + applicable margin (1) (2) March 2024 $ 747,794 $ 327,794

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Total Long-term debt, net $ 3,196,374 $ 2,839,933

(1) During the three months ended December 31, 2021, the aggregate principal amounts denominated in British pounds under the Revolving Credit Facility, 2021 Term Loan Facility and 2020 Term Loan Facility transitioned from underlying LIBOR benchmarked rates to SONIA rates.

(1) During the six months ended April 1, 2022, the aggregate principal amounts denominated in British pounds under the Revolving Credit Facility, 2021 Term Loan Facility and 2020 Term Loan Facility transitioned from underlying LIBOR benchmarked rates to SONIA rates.

Borrowings denominated in U.S.

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dollar denominated borrowings under the Revolving Credit Facility bear interest at either a eurocurrency rate plus a margin of between 0.875 % and 1.625 % or a base rate plus a margin of between 0 % and 0.625 %.

The applicable LIBOR rates including applicable margins at December 31, 2021 and October 1, 2021 were approximately 1.46 % and 1.45 %.

The applicable LIBOR rates including applicable margins at April 1, 2022 and October 1, 2021 were approximately 1.82 % and 1.45 %.

Borrowings denominated in British pounds bear interest at an adjusted SONIA rate plus a margin of between 0.875 % and 1.625 %.

There were no amounts drawn in British pounds as of December 31, 2021.

There were no amounts drawn in British pounds as of April 1, 2022.

(3) Depending on the Company’s Consolidated Leverage Ratio (as defined in the credit agreement governing the 2021 Term Loan Facility (defined below)), U.S.

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The applicable LIBOR rate including applicable margins for borrowings denominated in U.S.

dollars at December 31, 2021 and October 1, 2021 was approximately 1.48 % and 1.43 %.

Borrowings denominated in British pounds bear interest at an adjusted SONIA rate plus a margin of between 0.875 % and 1.625 %, which was approximately 1.60 % at December 31, 2021.

dollars at April 1, 2022 and October 1, 2021 was approximately 1.68 % and 1.43 %.

Borrowings denominated in British pounds bear interest at an adjusted SONIA rate plus a margin of between 0.875 % and 1.625 %, which was approximately 2.10 % at April 1, 2022.

(4) Depending on the Company’s Consolidated Leverage Ratio (as defined in the credit agreement governing the 2020 Term Loan Facility (defined below)), U.S.

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The applicable LIBOR rates including applicable margins for borrowings denominated in U.S.

dollars at December 31, 2021 and October 1, 2021 were approximately 1.48 % and 1.45 %.

Borrowings denominated in British pounds bear interest at an adjusted SONIA rate plus a margin of between 0.875 % and 1.625 %, which was approximately 1.55 % at December 31, 2021.

dollars at April 1, 2022 and October 1, 2021 were approximately 1.82 % and 1.45 %.

Borrowings denominated in British pounds bear interest at an adjusted SONIA rate plus a margin of between 0.875 % and 1.625 %, which was approximately 2.10 % at April 1, 2022.

(5) The 2020 Term Loan requires quarterly principal repayments of 1.25 %, or $ 9.125 million and £ 3.125 million, of the aggregate initial principal amount borrowed.

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On March 27, 2019, the Company entered into a second amended and restated credit agreement (the "Revolving Credit Facility"), which amended and restated the 2014 Revolving Credit Facility by, among other things, (a) extending the maturity date of the credit facility to March 27, 2024, (b) increasing the facility amount to $ 2.25 billion (with an accordion feature that allows a further increase of the facility amount up to $ 3.25 billion), (c) eliminating the covenants restricting investments, joint ventures and acquisitions by the Company and its subsidiaries and (d) adjusting the financial covenants to eliminate the net worth covenant upon the removal of the same covenant from the Company’s existing Note Purchase Agreement (defined below).

We were in compliance with the covenants under the Revolving Credit Facility at December 31, 2021.

We were in compliance with the covenants under the Revolving Credit Facility at April 1, 2022.

JACOBS ENGINEERING GROUP INC.

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The 2020 Term Loan Facility and the 2021 Term Loan Facility are together referred to as the "Term Loan Facilities".

We were in compliance with the covenants under the Term Loan Facilities at December 31, 2021.

We were in compliance with the covenants under the Term Loan Facilities at April 1, 2022.

On March 12, 2018, Jacobs entered into a note purchase agreement (as amended, the "Note Purchase Agreement") with respect to the issuance and sale in a private placement transaction o f $ 500 million in the aggregate principal amount of the Company’s senior notes in three series (collectively, the “Senior Notes”).

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In addition, the Note Purchase Agreement contains customary events of default.

We were in compliance with the covenants under the Note Purchase Agreement at December 31, 2021.

We were in compliance with the covenants under the Note Purchase Agreement at April 1, 2022.

We believe the carrying value of the Revolving Credit Facility, the Term Loan Facilities and other debt outstanding approximates fair value based on the interest rates and scheduled maturities applicable to the outstanding borrowings.

The fair value of the Senior Notes is estimated to be $ 547.5 million at December 31, 2021, based on Level 2 inputs.

The fair value of the Senior Notes is estimated to be $ 507.6 million at April 1, 2022, based on Level 2 inputs.

The fair value is determined by discounting future cash flows using interest rates available for issuances with sim ilar terms and average maturities.

The Company has issue d $ 1.7 million in letters of credit under the Revolving Credit Facility, leaving $ 1.67 billion of available borrowing capacity under the Revolving Credit Facility at December 31, 2021.

In addition, the Company had issued $ 272.0 million u nder separate, committed and uncommitted letter-of-credit facilities for total issued letters of credit of $ 273.7 million a t December 31, 2021.

The Company has issue d $ 1.7 million in letters of credit under the Revolving Credit Facility, leaving $ 1.50 billion of available borrowing capacity under the Revolving Credit Facility at April 1, 2022.

In addition, the Company had issued $ 272.9 million u nder separate, committed and uncommitted letter-of-credit facilities for total issued letters of credit of $ 274.6 million a t April 1, 2022.

The Company’s right-of use assets and lease liabilities relate to real estate, project assets used in connection with long-term construction contracts, IT assets and vehicles.

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The Company’s lease obligations are primarily for the use of office space and are primarily operating leases.

Certain of the Company’s leases contain renewal, extension, or termination options.

The Company assesses each option on an individual basis and will only include options reasonably certain of exercise in the lease term.

The Company generally

JACOBS ENGINEERING GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

considers the base term to be the term provided in the contract.

Certain of the Company’s leases contain renewal, extension, or termination options.

The Company assesses each option on an individual basis and will only include options reasonably certain of exercise in the lease term.

The Company generally considers the base term to be the term provided in the contract.

None of the Company’s lease agreements contain material options to purchase the lease property, material residual value guarantees, or material restrictions or covenants

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The components of lease expense (reflected in selling, general and administrative expenses) for th e three months ended December 31, 2021 and January 1, 2021 were as follows (in thousands):

Three Months Ended

December 31, 2021 January 1, 2021

The components of lease expense (reflected in selling, general and administrative expenses) for th e three and six months ended April 1, 2022 and April 2, 2021 were as follows (in thousands):

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Lease expense

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Total lease expense $ 42,145 $ 44,509 $ 86,100 $ 88,740

Supplemental information related to the Company's leases for the three months ended December 31, 2021 was as follows (in thousands):

Three Months Ended

December 31, 2021

Supplemental information related to the Company's leases for the six months ended April 1, 2022 was as follows (in thousands):

Six Months Ended

April 1, 2022

Cash paid for amounts included in the measurements of lease liabilities $ 119,031

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Right-of-Use and Other Long-Lived Asset Impairment

In the first quarter of fiscal 2022, as a result of the Company's transformation initiatives including the changing nature of the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio.

These initiatives during the current quarter resulted in the abandonment of certain leased office spaces and the establishment of a formal plan to sublease certain other leased spaces that will no longer be utilized by the Company.

During fiscal 2022, as a result of the Company's transformation initiatives, including the changing nature of the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio.

These initiatives during the current fiscal year resulted in the abandonment of certain leased office spaces and the establishment of a formal plan to sublease certain other leased spaces that will no longer be utilized by the Company.

In connection with the Company’s actions related to these initiatives, the Company evaluated certain of its lease right-of-use assets and related property, equipment and leasehold improvements for impairment under ASC 360.

As a result of the analysis, the Company recognized an impairment loss during the six month period of fiscal 2022 of $ 74.6 million, which is included in selling, general and administrative expenses in the accompanying statement of earnings for the current year-to-date period.

The impairment loss recorded includes $ 56.6 million related to right-of-use lease assets and $ 18.0 million related to other long-lived assets, including property, equipment and improvements and leasehold improvements.

JACOBS ENGINEERING GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

As a result of the analysis, the Company recognized an impairment loss during the first quarter of fiscal 2022 of $ 72.3 million, which is included in selling, general and administrative expenses in the accompanying statement of earnings for the current fiscal quarter.

The impairment loss recorded includes $ 54.9 million related to right-of-use lease assets and $ 17.4 million related to other long-lived assets, including property, equipment and improvements and leasehold improvements.

The fair values for the asset groups relating to the impaired long-lived assets were estimated primarily using discounted cash flow models (income approach) with Level 3 inputs.

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Pension and Other Postretirement Benefit Plans

The following table presents the components of net periodic pension benefit recognized in earnings during the three months ended December 31, 2021 and January 1, 2021 (in thousands):

Three Months Ended

December 31, 2021 January 1, 2021

The following table presents the components of net periodic pension benefit recognized in earnings during the three and six months ended April 1, 2022 and April 2, 2021 (in thousands):

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Service cost $ 1,709 $ 1,735 $ 3,418 $ 3,471

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The following table presents certain information regarding the Company’s cash contributions to our pension plans for fiscal 2022 (in thousands):

Cash contributions made during the first three months of fiscal 2022

Cash contributions made during the first six months of fiscal 2022

Cash contributions projected for the remainder of fiscal 2022

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Further, in connection with the transaction, an estimated additional $ 261 million in investment proceeds had not yet been distributed at the investment date due to continuing employment requirements of associated management owners.

Consequently, this amount represented compensation expense incurred related to the investment that was expensed subsequent to the date of the transaction, and was reflected in selling, general and administrative expense on the consolidated income statement for the fiscal year ended October 1, 2021.

Consequently, this amount represented compensation expense incurred related to the investment that was expensed subsequent to the date of the transaction, and was reflected in selling, general and administrative expense and cash from operations for the fiscal year ended October 1, 2021.

Approximately $267 million was recorded in the second quarter of fiscal 2021, with approximately $6 million of the estimated charges forfeited by employees that left the Company before payment and the net cash impact recorded in the third quarter of fiscal 2021.

The remaining 35 % interest was acquired by PA Consulting employees, whose redeemable noncontrolling interests had a fair value of $ 582.4 million on the closing date, including subsequent purchase accounting adjustments.

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Net assets acquired $ 1,701.9

The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained.

Goodwill recognized results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future economic benefits.

None of the goodwill recognized is expected to be deductible for tax purposes.

The Company has not completed its final assessment of the fair values of PA Consulting's assets acquired and liabilities assumed.

The final purchase price allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.

Since the initial preliminary estimates reported in the second quarter of fiscal 2021, the Company has updated certain provisional amounts reflected in the preliminary purchase price allocation, as summarized in the estimated fair values of PA Consulting assets acquired and liabilities assumed above.

The Company has completed its final assessment of the fair values of PA Consulting's assets acquired and liabilities assumed.

Since the initial preliminary estimates reported in the second quarter of fiscal 2021, the Company has updated certain provisional amounts reflected in the final purchase price allocation, as summarized in the estimated fair values of PA Consulting assets acquired and liabilities assumed above.

See below for further discussion on updates to redeemable noncontrolling interests.

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These pro forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been achieved had the related events occurred (in millions, except per share data):

For the Three Months Ended

January 1, 2021

For the Six Months Ended

April 2, 2021

Revenues $ 7,341.4

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Diluted earnings per share $ 2.58

I ncome tax expense for the three -month p ro forma period ended January 1, 2021 wa s $ 76.7 million.

Redeemable Noncontrolling Interest

In connection with the PA Consulting investment, the Company recorded redeemable noncontrolling interests, including subsequent purchase accounting adjustments, representing the noncontrolling interest holders' equity interest in the form of preferred and common shares of PA Consulting, with substantially all of the value associated with these interests allocable to the preferred shares.

Income tax expense for the six -month p ro forma period ended April 2, 2021 wa s $( 122.1 ) million.

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Redeemable Noncontrolling Interests

In connection with the PA Consulting investment, the Company recorded redeemable noncontrolling interests, including subsequent purchase accounting adjustments, representing the noncontrolling interest holders' equity interests in the form of preferred and common shares of PA Consulting, with substantially all of the value associated with these interests allocable to the preferred shares.

During the first quarter of fiscal 2022, PA Consulting repurchased certain shares of the redeemable noncontrolling interest holders for $ 35.1 million in cash.

The difference between the cash purchase price and the recorded book value of these repurchased interests was recorded in the Company’s consolidated retained earnings.

Changes in the redeemable noncontrolling interest d uring the three months ended December 31, 2021 are as follows (in thousands):

There were no such repurchases in the second quarter of fiscal 2022.

Changes in the redeemable noncontrolling interests d uring the six months ended April 1, 2022 are as follows (in thousands):

Balance at October 1, 2021

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Attribution of Preferred Dividend to Common Shareholders ( 33,927 )

Net income attributable to redeemable noncontrolling interest to Common Shareholders 9,683

Net income attributable to redeemable noncontrolling interests to Common Shareholders 19,721

Redeemable Noncontrolling interests redemption value adjustment 50,320

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Cumulative translation adjustment and other ( 15,380 )

Balance at December 31, 2021

Balance at April 1, 2022

In addition, certain employees and nonemployees of PA Consulting are eligible to receive equity-based incentive grants in the future under the terms of the applicable agreements.

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PA Consulting is party to an employee benefit trust that is a separately administered discretionary trust for the benefit of employees and is consolidated under U.S.

At December 31, 2021, t he Company held $ 0.7 million in cash within the employee benefit trust that is restricted from general use and is included in prepaid expenses and other current assets on the consolidated balance sheet.

At April 1, 2022, t he Company held $ 0.9 million in cash within the employee benefit trust that is restricted from general use and is included in prepaid expenses and other current assets on the consolidated balance sheet.

JACOBS ENGINEERING GROUP INC.

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StreetLight Data, Inc.

On February 4, 2022, the Company acquired StreetLight Data, Inc., ("StreetLight") for a purchase price based on an enterprise value of $209 million on a cash-free, debt-free basis, subject to customary post-closing adjustments.

On February 4, 2022, the Company acquired StreetLight Data, Inc.

("StreetLight").

StreetLight is a pioneer of mobility analytics who uses its data and machine learning resources to shed light on mobility and enable users to solve complex transportation problems.

The Company also paid off StreetLight's debt of approximately $1.0 million simultaneously with the consummation of the acquisition.

The following summarizes the fair values of StreetLight's assets acquired and liabilities assumed as of the acquisition date (in millions):

Cash and cash equivalents $ 7.3

Receivables 5.2

Property, equipment and improvements, net 0.1

Goodwill 147.6

Identifiable intangible assets 63.9

Prepaid expenses and other current assets 2.0

Total Assets $ 226.1

Accounts payable, accrued expenses and other current liabilities $ 23.1

Other long term liabilities 6.2

Total Liabilities 29.3

Net assets acquired $ 196.8

The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained.

Goodwill recognized results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations.

None of the goodwill recognized is expected to be deductible for tax purposes.

The Company has not completed its final assessment of the fair values of StreetLight's assets acquired and liabilities assumed.

The final purchase price allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.

Identifiable intangibles are technology and customer relationships, contracts and backlog and have estimated lives of 5 and 9 years, respectively.

No summarized unaudited pro forma results are provided for the StreetLight acquisition due to the immateriality of this acquisition relative to the Company's consolidated financial position and results of operations.

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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Prepaid expenses and other current assets 3.2

Miscellaneous long term assets 13.5

Total Assets $ 278.4

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The Company has not completed its final assessment of the fair values of BlackLynx's assets acquired and liabilities assumed.

The final purchase price allocation could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.

Identifiable intangibles are customer relationships, contracts and backlog and technology and have estimated lives of 12 and 15 years, respectively.

Since the initial preliminary estimates reported in the first quarter of fiscal 2021, the Company has updated certain amounts reflected in the preliminary purchase price allocation, as summarized in the fair values of BlackLynx's assets acquired and liabilities assumed as of the acquisition date set forth above, the majority of which related to reclassifications between goodwill and intangibles and for deferred taxes.

The final purchase price allocation could result in additional adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.

Identifiable intangibles are technology and customer relationships, contracts and backlog and have estimated lives of 11 years and 6 years, respectively.

No summarized unaudited pro forma results are provided for the BlackLynx acquisition due to the immateriality of this acquisition relative to the Company's consolidated financial position and results of operations.

Buffalo Group

JACOBS ENGINEERING GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Buffalo Group

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As such, the financial results of the ECR business are reflected in our unaudited Consolidated Statements of Earnings as discontinued operations for all periods presented.

As a result of the ECR sale, the Company recognized a pre-tax gain of approximately $ 1.1 billion, $ 935.1 million of which was recognized in fiscal 2019, $ 110.2 million for the year ended October 2, 2020 and $ 15.6 million for the year ended October 1, 2021.

As a result of the ECR sale, the Company recognized a pre-tax gain of approximately $ 1.1 billion, $ 935.1 million of which was recognized in fiscal 2019, $ 110.2 million in fiscal 2020 and $ 15.6 million for the year ended October 1, 2021.

JACOBS ENGINEERING GROUP INC.

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Dividend income, realized gains and losses on sale and unrealized gains and losses on changes in fair value of Worley shares were recognized in miscellaneous income (expense), net in continuing operations prior to sale.

The Company's investment in Worley was measured at fair value through net income as it was an equity investment with a readily determinable fair value based on quoted market prices and for the three months ended January 1, 2021, the Company recognized a $ 107.7 million gain associated with share price and currency changes on this investment.

The Company's investment in Worley was measured at fair value through net income as it was an equity investment with a readily determinable fair value based on quoted market prices and for the three and six month periods ended April 2, 2021, the Company recognized a $ 41.9 million loss and a $ 65.9 million gain, respectively, associated with share price and currency changes on this investment.

The three and six months ended April 2, 2021 included Worley stock dividends of $ 9.8 million.

The Company completed the sale of all ordinary shares of Worley it held in the fourth fiscal quarter of fiscal 2021.

Restructuring and Other Charges

During first quarter fiscal 2022, the Company implemented certain restructuring and integration initiatives relating to the BlackLynx acquisition, the activities of which are expected to be substantially completed before the end of fiscal 2022.

Also, during first quarter fiscal 2022, the Company implemented further real estate rescaling efforts that were associated with its fiscal 2020 transformation program relating to real estate and other staffing initiatives.

During fiscal 2022, the Company implemented certain restructuring and integration initiatives relating to the StreetLight and BlackLynx acquisitions, the activities of which are expected to be substantially completed before the end of fiscal 2023.

Also, during fiscal 2022, the Company implemented further real estate rescaling efforts that were associated with its fiscal 2020 transformation program relating to real estate and other staffing initiatives.

These initiatives are expected to continue into fiscal 2023.

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The activities of these initiatives are substantially completed and are expected to end before the end of fiscal 2025.

Additionally, the Company recorded impairment charges on its investment in AWE during fiscal 2021.

Additionally, the Company recorded impairment charges on its investment in AWE ML during fiscal 2021.

See related discussion in Note 11- Joint ventures, VIEs and other investments.

7 unchanged sentences

Collectively, the above-mentioned restructuring activities are referred to as “Restructuring and other charges.”

The following table summarizes the impacts of the Restructuring and other charges by line of business ("LOB") in connection with the CH2M, John Wood Group's nuclear business, Buffalo Group and BlackLynx acquisitions and the PA Consulting investment, the ECR sale and the Company's first quarter fiscal 2022 transformation initiatives relating to real estate and other staffing programs and impairment of the AWE Management Ltd.

investment for the three months ended December 31, 2021 and the CH2M, KeyW John Wood Group's nuclear business and Buffalo Group acquisitions, the ECR sale and the Company's fourth quarter fiscal 2020 transformation initiatives relating to real estate and other staffing programs and impairment of AWE Management Ltd.

investment for the three months ended January 1, 2021 (in thousands):

The following table summarizes the impacts of the Restructuring and other charges by line of business ("LOB") in connection with the CH2M acquisition, John Wood Group's nuclear business, Buffalo Group, StreetLight and BlackLynx acquisitions, the PA Consulting investment, the ECR sale, the Company's transformation initiatives relating to real estate and other staffing programs, and the impairment and final exit activities of the AWE ML investment for the three and six month periods ended April 1, 2022 and April 2, 2021 (in thousands):

JACOBS ENGINEERING GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Three Months Ended

December 31, 2021 January 1, 2021

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Critical Mission Solutions $ 3,462 $ 710 $ 4,616 $ 3,919

3 unchanged sentences

Total $ 108,164 $ 30,347 $ 177,524 $ 78,741

(1) For the three months ended December 31, 2021 and January 1, 2021, amounts include $ 77.9 million and $ 20.5 million, respectively, in items impacting operating profit, along with items recorded in other income (expense), net, which includes $ 1.7 million in income associated with final distributions from the exit of our AWE investment and a $( 27.9 ) million charge, respectively, related to the impairment charges on our AWE Management Ltd.

investment and a gain of $ 6.9 million related to a lease termination which is reflected in other income (expense) for the three months ended January 1, 2021.

Amounts included in:

Operating profit (mainly SG&A) (1) $ 110,171 $ 25,052 $ 188,075 $ 45,544

Other (Income) Expense, net (2) ( 2,007 ) 5,295 ( 10,551 ) 33,197

$ 108,164 $ 30,347 $ 177,524 $ 78,741

(1) Included in the three and six month periods ended April 1, 2022 was $ 91.3 million related to the final pre-tax settlement of the Legacy CH2M Matter (as defined in Note 19 - Commitments and Contingencies and Derivative Financial Instruments ), net of previously recorded reserves.

The six month period in fiscal 2022 included approximately $ 71.0 million in charges associated mainly with real estate related impairments and other transformation activities, the majority of which related to People and Places Solutions.

(2) The six month period ended April 1, 2022 included gains of $( 7.1 ) million related to lease terminations.

The six months ended April 2, 2021 included $ 33.2 million in charges related to the impairment of our AWE ML investment.

See Note 20 - Segment Information .

The activity in the Company’s accruals for restructuring and other charges for the three months ended December 31, 2021 is as follows (in thousands):

The activity in the Company’s accruals for Restructuring and other charges for the six months ended April 1, 2022 is as follows (in thousands):

Balance at October 1, 2021

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Payments and other ( 13,338 )

Balance at December 31, 2021 $ 10,765

(1) Excludes $ 70,953 in other net charges associated mainly with real estate related impairments and other transformation activities described above.

The following table summarizes the Restructuring and other charges by major type of costs for the three months ended December 31, 2021 and January 1, 2021 (in thousands):

Three Months Ended

December 31, 2021 January 1, 2021

Balance at April 1, 2022 $ 15,622

(1) Excludes $ 162.6 million in other net charges mainly comprised of $ 91.3 million in charges for the final pre-tax settlement of the Legacy CH2M Matter (net of previously recorded reserves) during the three months ended April 1, 2022, and $ 71.0 million associated mainly with real estate related impairments and other transformation activities described above during the six months ended April 1, 2022.

The following table summarizes the Restructuring and other charges by major type of costs for the three and six months ended April 1, 2022 and April 2, 2021 (in thousands):

Three Months Ended Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Lease Abandonments and Impairments (1) $ 2,294 $ 2,062 $ 67,837 $ 2,211

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Total $ 108,164 $ 30,347 $ 177,524 $ 78,741

(1) Includes $( 27.9 ) million related to the impairment charges on our AWE Management Ltd.

investment for the three months ended January 1, 2021.

Cumulative amounts incurred to date under our various restructuring and other activities described above by each major type of cost as of December 31, 2021 are as follows (in thousands):

(1) The six month period in fiscal 2022 includes approximately $ 71.0 million in charges associated mainly with real estate related impairments and other transformation activities reflected in Lease Abandonments and Impairments.

(2) The three and six month periods ended April 1, 2022 amounts are comprised mainly of $ 91.3 million in other charges related to the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves.

Also, the six months ended April 2, 2021 included $ 33.2 million in Other charges associated with the impairment of our investment in AWE ML.

Cumulative amounts incurred to date under our various Restructuring and other activities described above by each major type of cost as of April 1, 2022 are as follows (in thousands):

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Lease Abandonments and Impairments $ 385,635

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Total $ 1,079,037

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Commitments and Contingencies and Derivative Financial Instruments

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As such, we sometimes enter into foreign exchange hedging contracts and interest rate hedging contracts in order to limit our exposure to fluctuating foreign currencies and interest rates.

The Company is party to interest rate swap agreements and a cross-currency swap agreement with notional values of $ 795.7 million and $ 127.8 million, respectively, as of December 31, 2021 to manage the interest rate exposure on our variable rate loans and the foreign currency exposure on our USD borrowings by a European subsidiary.

The Company is party to interest rate swap agreements and a cross-currency swap agreement with notional values of $ 787.1 million and $ 127.8 million , respectively, as of April 1, 2022 to manage the interest rate exposure on our variable rate loans and the foreign currency exposure on our USD borrowings by a European subsidiary.

By entering into the swap agreements, the Company converted the LIBOR and SONIA rate based liabilities into fixed rate liabilities and, for the cross currency swap, our LIBOR rate based borrowing in USD to a fixed rate Euro liability, for periods ranging from three and a half to ten years .

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See Note 4- New Accounting Pronouncements for additional discussion related to the application of SONIA to existing hedge contracts.

The fair value of the interest rate and cross currency swaps at December 31, 2021 and October 1, 2021 was $ 11.2 million and $( 0.8 ) million, respectively, of which $( 7.4 ) million is inc luded in other deferred liabilities and $ 18.6 million is included in miscellaneous other assets on the consolidated balance sheets at December 31, 2021.

The fair value of the interest rate and cross currency swaps at April 1, 2022 and October 1, 2021 was $ 60.4 million and $( 0.8 ) million, respectively, of which $( 2.1 ) million is inc luded in other deferred liabilities and $ 62.5 million is included in miscellaneous other assets on the consolidated balance sheets at April 1, 2022.

As of October 1, 2021, $( 11.0 ) million is inc luded in other deferred liabilities and $ 10.2 million is included in miscellaneous other assets on the consolidated balance sheets.

The unrealized net gain (loss) on these interest rate and cross currency swaps was $ 13.3 million and $ 7.4 million, net of tax, and was included in accumulated other comprehensive inc ome as of December 31, 2021 and October 1, 2021, respectively .

Additionally, the Company held foreign exchange forward contracts in currenc ies that support our operations, in cluding British Pound, Euro, Australian Dollar and other currencies, with notional values of $ 503.5 million at December 31, 2021 and $ 506.5 million at October 1, 2021 .

The unrealized net gain (loss) on these interest rate and cross currency swaps was $ 47.5 million and $ 7.4 million, net of tax, and was included in accumulated other comprehensive inc ome as of April 1, 2022 and October 1, 2021, respectively .

Additionally, the Company held foreign exchange forward contracts in currenc ies that support our operations, in cluding British Pound, Euro, Australian Dollar and other currencies, with notional values of $ 576.5 million at April 1, 2022 and $ 506.5 million at October 1, 2021 .

The length of these contracts currently ranges from one to 12 months.

The fair value of the foreign exchange contracts at December 31, 2021 and October 1, 2021 w as $ 53.8 million and $ 55.5 million , respectively, which is included in current assets within re ceivables and contract assets on the consolidated balance sheets and with associated income statement impacts included in miscellaneous income (expense) in the consolidated statements of earnings.

The fair value of the foreign exchange contracts at April 1, 2022 and October 1, 2021 w as $ 2.4 million and $ 55.5 million , respectively, which is included in current assets within re ceivables and contract assets on the consolidated balance sheets and with associated income statement impacts included in miscellaneous income (expense) in the consolidated statements of earnings.

During the second quarter, the Company settled $ 66.7 million in fair value related to certain Australian Dollar foreign exchange forward contracts and received cash and subsequently entered into a new Australian Dollar instrument with an equal notional value.

The fair value measurements of these derivatives are being made using Level 2 inputs under ASC 820, Fair Value Measurement , as the measurements are based on o bservable inputs other than quoted prices in active markets .

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We have not experienced credit losses from our counterparties.

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Contractual Guarantees and Insurance

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Guarantees are accounted for in accordance with ASC 460-10, Guarantees , at fair value at the inception of the guarantee.

At December 31, 2021 and October 1, 2021, the Company had issued and outstanding approximate ly $ 273.7 million and $ 263.8 million , respectively, in LOCs and $ 2.3 billion an d $ 2.1 billion, respectively, in surety bonds.

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

At April 1, 2022 and October 1, 2021, the Company had issued and outstanding approximate ly $ 274.6 million and $ 263.8 million , respectively, in LOCs and $ 2.1 billion an d $ 2.1 billion, respectively, in surety bonds.

We maintain insurance coverage for most insurable aspects of our business and operations.

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government contract-related audits, investigations and claims, and income tax audits and investigations should not have a material adverse effect on our consolidated financial statements, beyond amounts currently accrued.

Litigation and Investigations

In 2012, CH2M HILL Australia PTY Limited, a subsidiary of CH2M, entered into a 50/50 integrated joint venture with Australian construction contractor UGL Infrastructure Pty Limited.

The joint venture entered into a Consortium Agreement with General Electric and GE Electrical International Inc.

The Consortium was awarded a subcontract by JKC Australia LNG Pty Limited ("JKC") for the engineering, procurement, construction and commissioning of a 360 MW Combined Cycle Power Plant for INPEX Operations Australia Pty Limited at Blaydin Point, Darwin, NT, Australia.

In January 2017, the Consortium terminated the Subcontract because of JKC’s repudiatory breach and demobilized from the work site.

JKC claimed the Consortium abandoned the work and itself purported to terminate the Subcontract.

The Consortium and JKC are now in dispute over the termination.

In August 2017, the Consortium filed an International Chamber of Commerce arbitration against JKC and is seeking compensatory damages in the amount of approximately $ 530.0 million for repudiatory breach or, in the alternative, seeking damages for unresolved contract claims and change orders.

JKC is seeking damages in excess of $ 1.7 billion and has drawn on the bonds.

In light of the COVID-19 pandemic, a November 2020 date for commencement of the hearing was vacated and the hearing was rescheduled for opening arguments in April 2021 and the remaining proceedings in July and August 2021.

The opening arguments did occur as scheduled, but in light of the Covid-19 pandemic, the remaining proceedings were rescheduled to now occur in April and May 2022.

It is anticipated that closing arguments will be made in July 2022.

Although an earlier decision is possible, no decision is expected before the end of 2022 or 2023.

In September 2018, JKC filed a declaratory judgment action in Western Australia alleging that the entities which executed parent company guaranties for the Consortium, including CH2M Hill Companies, Ltd., have an obligation to pay JKC’s ongoing costs to complete the project after termination.

A hearing on that matter was held in March 2019, and a decision in favor of the Consortium was issued.

JKC appealed the decision, a hearing on the appeal took place in March 2020 and a decision was handed down in July 2020 denying JKC’s appeal in its entirety.

The Consortium has denied liability and is vigorously defending JKC's claims and pursuing its affirmative claims against JKC.

Based on the information currently available, the Company does not expect the resolution of this matter to have a material adverse effect on the Company’s business, financial condition, results of operations or cash flows, in excess of the current reserve for this matter.

See Note 15- Other Business Combinations in the Company's fiscal 2021 Form 10-K for further information related to CH2M contingencies.

JACOBS ENGINEERING GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Litigation and Investigations

In 2012, CH2M HILL Australia PTY Limited, a subsidiary of CH2M, entered into a 50/50 integrated joint venture with Australian construction contractor UGL Infrastructure Pty Limited.

The joint venture entered into a Consortium Agreement with General Electric and GE Electrical International Inc.

The subcontract was terminated in January 2017.

In or around August 2017, the Consortium commenced an arbitration.

On April 12, 2022, JKC and the Consortium entered into a confidential deed of settlement (“Settlement Agreement”).

Under the terms of the Settlement Agreement, CH2M, as guarantor of CH2M Australia PTY Limited’s obligations with respect to the subcontract with JKC, made a cash payment to JKC of AUD 640 million (or approximately $ 475 million using mid-April 2022 exchange rates).

As a result of the settlement, additional pre-tax charges of $ 91.3 million were recorded during the three-months ended April 1, 2022 for this matter (over amounts previously reserved and reported in long-term Other Deferred Liabilities in the Company's consolidated balance sheet).

Further, the related final settlement liability was reclassified to current Accrued Liabilities at April 1, 2022 due to its short term nature.

The Settlement Agreement provided for a release of claims between JKC and each member of the Consortium, and in connection with this agreement the members of the Consortium also waived all claims against each other and their respective parent guarantors relating to the project.

On December 22, 2008, a coal fly ash pond at the Kingston Power Plant of the Tennessee Valley Authority ("TVA") was breached, releasing fly ash waste into the Emory River and surrounding community.

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The Company does not expect the resolution of this matter to have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Segment Information

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The Company’s Chair and Chief Executive Officer is the Chief Operating Decision Maker (“CODM”) and can evaluate the performance of each of these segments and make appropriate resource allocations among each of the segments.

For purposes of the Company’s goodwill impairment testing, it has been determined that the Company’s operating segments are also its reporting units based on management’s conclusion that the components comprising each of its operating segments share similar economic characteristics and meet the aggregation criteria for reporting units in accordance with ASC 350, Intangibles-Goodwill and Other .

Under this organization, the sales function is managed by LOB and PA Consulting, and accordingly, the associated cost is embedded in the segments and reported to the respective head of each segment.

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1999 Stock Incentive Plan (“1999 SIP”) have likewise been charged to the LOBs except for those amounts determined to relate to the business as a whole (which amounts remain in other corporate expenses).

JACOBS ENGINEERING GROUP INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Financial information for each segment is reviewed by the CODM to assess performance and make decisions regarding the allocation of resources.

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GAAP operating profit by including certain corporate-level expenses, Restructuring and other charges (as defined in Note 18 - Restructuring and Other Charges ) and transaction and integration costs (in thousands).

For the Three Months Ended

December 31, 2021 January 1, 2021

For the Three Months Ended For the Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Revenues from External Customers:

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Total $ 3,834,059 $ 3,547,873 $ 7,214,684 $ 6,929,708

For the Three Months Ended

December 31, 2021 January 1, 2021

For the Three Months Ended For the Six Months Ended

April 1, 2022 April 2, 2021 April 1, 2022 April 2, 2021

Segment Operating Profit:

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Earnings from Continuing Operations Before Taxes $ 155,282 $ ( 112,281 ) $ 324,371 $ 241,828

(1) Other corporate expenses also include intangibles amortization of $ 46.9 million and $ 23.2 million for the three months ended December 31, 2021 and January 1, 2021, respectively, with this increase mainly attributable to the PA Consulting investment.

(2) Included in the three months ended December 31, 2021 is $ 72.3 million of real estate impairment charges related to the Company's transformation initiatives.

(3) The three months ended December 31, 2021 include $ 1.7 million in income associated with final distributions from the exit of our AWE investment and a gain of $ 6.9 million related to a lease termination.

The three months ended January 1, 2021 include $ 93.1 million in fair value adjustments related to our investment in Worley stock (net of Worley stock dividend) and certain foreign currency revaluations relating to the ECR sale, $ 82.6 million in fair value adjustments related to our investment in C3 stock and $( 27.9 ) million related to impairment charges on our AWE Management Ltd.

The investments in Worley and C3 were sold in fiscal 2021 and therefore there are no comparable amounts in the current quarter.

JACOBS ENGINEERING GROUP INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

(1) Other corporate expenses also include intangibles amortization of $ 48.4 million and $ 30.6 million for the three months ended April 1, 2022 and April 2, 2021, respectively, and $ 95.3 million and $ 53.8 million for the six months ended April 1, 2022 and April 2, 2021, respectively, with the increase mainly attributable to the PA Consulting investment.

(2) Included in the three and six months ended April 1, 2022 is $ 91.3 million related to the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves and included in the six months ended April 1, 2022 are $ 74.6 million of real estate impairment charges related to the Company's transformation initiatives.

Included in the three and six months ended April 2, 2021 are $ 296.1 million and $ 300.2 million, respectively, of costs incurred in connection with the investment in PA Consulting, in part classified as compensation costs.

(3) The six months ended April 1, 2022 include $ 3.5 million in income associated with final exit activities associated with our AWE ML investment and a gain of $ 7.1 million related to a lease termination.

The three and six months ended April 2, 2021 include $ 29.7 million and $( 63.5 ) million, respectively, in fair value adjustments related to our investment in Worley stock (net of Worley stock dividend) and certain foreign currency revaluations relating to the ECR sale and $ 34.1 million and $( 48.6 ) million, respectively, in fair value adjustments related to our investment in C3 stock.

The six months ended April 2, 2021 also includes $ 33.2 million related to impairment of our AWE ML investment.

The investments in Worley and C3 were sold in fiscal 2021 and therefore there are no comparable amounts in the current quarter.

(1) Included in other corporate expenses in the above table are costs and expenses, which relate to general corporate activities as well as corporate-managed benefit and insurance programs.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements