What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-08-01 compared with 2022-05-03 · 133 added, 121 removed, 201 unchanged (56% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition from the most recent fiscal year-end to April 1, 2022 and (ii) results of operations during the current fiscal period(s) as compared to the corresponding period(s) of the preceding fiscal year.

The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition from the most recent fiscal year-end to July 1, 2022 and (ii) results of operations during the current fiscal period(s) as compared to the corresponding period(s) of the preceding fiscal year.

In order to better understand such changes, readers of this MD&A should also read:

6 unchanged sentences

When used herein, words such as “expects,” “anticipates,” “believes,” “seeks,” “estimates,” “plans,” “intends,” “future,” “will,” “would,” “could,” “can,” “may,” and similar words are intended to identify forward-looking statements.

Examples of forward-looking statements include, but are not limited to, statements we make concerning the potential continued effects of the COVID-19 pandemic on our business, financial condition and results of operations and our expectations as to our future growth, prospects, financial outlook and business strategy for fiscal 2022 or future fiscal years and the anticipated benefits of acquisitions and the strategic investment in PA Consulting.

Examples of forward-looking statements include, but are not limited to, statements we make concerning the potential continued effects of the COVID-19 pandemic on our business, financial condition and results of operations and our expectations as to our future growth, prospects, financial outlook and business strategy for fiscal 2022 or future fiscal years, the anticipated benefits of acquisitions and the strategic investment in PA Consulting, and our plans to implement a new holding company structure in the fourth fiscal quarter of 2022.

You should not place undue reliance on these forward-looking statements.

Although such statements are based on management’s current estimates and expectations, and/or currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain, and you should not place undue reliance on such statements as actual results may differ materially.

Although such statements are based on management’s current estimates and/or expectations, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain, and you should not place undue reliance on such statements as actual results may differ materially.

We caution the reader that there are a variety of risks, uncertainties and other factors that could cause actual results to differ materially from what is contained, projected or implied by our forward-looking statements.

Such factors include our ability to execute on our newly-announced three-year corporate strategy, including our ability to invest in the tools needed to fully implement our strategy, competition from existing and future competitors in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames and to successfully integrate acquired businesses while retaining key personnel, the impact of the COVID-19 pandemic, including the emergence and spread of variants of COVID-19, and any resulting economic downturn on our results, prospects and opportunities, measures or restrictions imposed by governments and health officials in response to the pandemic, the timing of the award of projects and funding under the Infrastructure Investment and Jobs Act, as well as general economic conditions, including inflation, changes in interest rates and foreign currency exchange rates and changes in capital markets, and geopolitical events and conflicts, among others.

Such factors include our ability to execute on our newly-announced three-year corporate strategy, including our ability to invest in the tools needed to fully implement our strategy, competition from existing and future competitors in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames and to successfully integrate acquired businesses while retaining key personnel, the impact of the COVID-19 pandemic, including the emergence and spread of variants of COVID-19, and any resulting economic downturn on our results, prospects and opportunities, measures or restrictions imposed by governments and health officials in response to the pandemic, the timing of the award of projects and funding under the Infrastructure Investment and Jobs Act, financial market risks that may affect the Company's funding obligations under defined benefit pension and postretirement plans, as well as general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates, foreign currency exchange rates, changes in capital markets, and geopolitical events and conflicts, among others.

The impact of such matters includes, but is not limited to, the possible reduction in demand for certain of our product solutions and services and the delay or abandonment of ongoing or anticipated projects due to the financial condition of our clients and suppliers or to governmental budget constraints or changes to governmental budgetary priorities;

2 unchanged sentences

illness, travel restrictions and other workforce disruptions that have and could continue to negatively affect our supply chain and our ability to timely and satisfactorily complete our clients’ projects;

difficulties associated with retaining key personnel or hiring additional employees;

difficulties associated with retaining key employees or hiring additional employees;

and the inability of governments in certain of the countries in which we operate to effectively mitigate the financial or other impacts of the COVID-19 pandemic on their economies and workforces and our operations therein.

27 unchanged sentences

Revenue by Type (Q3 FY2022)

In the fourth quarter fiscal 2022, the Company intends to create a new holding company, Jacobs Solutions Inc., which will become the new parent company of the Company.

This will more closely align our public identity with a global technology-forward solutions company.

Once completed, the Company’s current stockholders will automatically become stockholders of Jacobs Solutions Inc., on a one-for-one basis, with the same number of shares and same ownership percentage of the Company’s common stock that they held immediately prior to the transaction.

Lines of Business

31 unchanged sentences

PA Consulting has a diverse mix of private and public sector clients, from global household names to start-ups, to national and local public services.

Results of Operations for the three and six months ended April 1, 2022 and April 2, 2021

Results of Operations for the three and nine months ended July 1, 2022 and July 2, 2021

(in thousands, except per share information)

For the Three Months Ended For the Six Months Ended

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

For the Three Months Ended For the Nine Months Ended

July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021

Revenues $ 3,827,093 $ 3,576,436 $ 11,041,777 $ 10,506,144

2 unchanged sentences

Selling, general and administrative expenses (558,713) (553,189) (1,882,049) (1,779,435)

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

Operating Profit 265,762 263,746 609,310 436,572

Other Income (Expense):

1 unchanged sentence

Interest expense (26,129) (20,011) (67,551) (52,788)

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 (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

Miscellaneous income, net 31,440 38,658 51,802 138,705

Total other income (expense), net 6,353 19,648 (12,825) 88,650

Earnings from Continuing Operations Before Taxes 272,115 283,394 596,485 525,222

Income Tax Expense from Continuing Operations (59,491) (109,186) (121,545) (175,437)

Net Earnings of the Group from Continuing Operations 212,624 174,208 474,940 349,785

Net (Loss) Earnings of the Group from Discontinued Operations (343) 384 (576) 11,690

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

Net Earnings of the Group 212,281 174,592 474,364 361,475

Net Earnings Attributable to Noncontrolling Interests from Continuing Operations (8,773) (9,182) (28,286) (29,366)

Net (Earnings) Loss Attributable to Redeemable Noncontrolling interests (7,525) 384 (27,246) 101,776

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

Net Earnings Attributable to Jacobs from Continuing Operations 196,326 165,410 419,408 422,195

Net Earnings Attributable to Jacobs $ 195,983 $ 165,794 $ 418,832 $ 433,885

6 unchanged sentences

Diluted Earnings Per Share $ 1.52 $ 0.83 $ 3.23 $ 2.87

Overview – Three and Six Month Periods Ended April 1, 2022

Net earnings attributable to the Company from continuing operations for the second fiscal quarter ended April 1, 2022 were $88.8 million (or $0.68 per diluted share), an increase of $89.1 million, from net loss of $(0.3) million (or $0.00 per diluted share) for the corresponding period last year.

The second fiscal quarter of 2022 benefited from our StreetLight, BlackLynx and the full quarter impact of our PA Consulting investment acquired on March 2, 2021, partly offset by pre-tax Restructuring and other charges and transactions costs of $115.3 million, comprised mainly of the final pre-tax $91.3 million settlement of the Legacy CH2M Matter, net of previously recorded reserves, of $91.3 million, which is further discussed in Note 19 - Commitments and Contingencies and Derivative Financial Instruments.

The comparable period ended April 2, 2021 included $296.1 million in pre-tax deal related charges associated with the investment in PA Consulting, in part classified as compensation costs and reported in selling, general and administration expenses, as well as $(29.7) million and $(34.1) million in pre-tax fair value losses recorded in miscellaneous income (expense), net, associated with our former investments in Worley stock (net of Worley stock dividend) which includes impacts of certain foreign currency revaluations related to the ECR sale and C3.ai, Inc.

("C3"), respectively.

Lastly, current quarter selling, general and administrative expense includes pre-tax intangible amortization costs of $48.4 million, an increase of $17.8 million (or 58%), from the corresponding prior year period of $30.6 million due to acquired intangible assets from recent acquisitions mainly associated with the PA Consulting investment.

For the six months ended April 1, 2022, net earnings attributable to the Company from continuing operations were $223.1 million (or $1.71 per diluted share), a decrease of $(33.7) million, or (13.1)%, from $256.8 million (or $1.96 per diluted share) for the corresponding period last year.

The current year-to-date period benefited from the same recent investing activities mentioned above, partially offset by pre-tax Restructuring and other charges and transactions costs of $190.3 million, which included the final pre-tax settlement charges on the Legacy CH2M Matter mentioned above of $91.3 million and $74.6 million in charges associated with the Company's transformation initiatives relating to real estate which is discussed in Note 18 - Restructuring and Other Charges .

In comparison, the corresponding period in the prior year period included pre-tax costs incurred in connection with the investment in PA Consulting, in part classified as compensation costs and reported in selling, general and administrative expenses, of $300.2 million.

In addition, the corresponding prior year period included $63.5 million and $48.6 million in pre-tax fair value gains recorded in miscellaneous income (expense), net, associated with our former investments in Worley stock (net of Worley stock dividend) which includes impacts of certain foreign currency revaluations related to the ECR sale and C3, respectively.

The prior year comparable period also included a pre-tax other loss of $33.2 million for an other-than-temporary impairment of our investment in AWE Management Ltd.

Lastly, current year to date period selling, general and administrative expense includes pre-tax intangible amortization costs of $95.3 million, an increase of $41.6 million (or 77%), from the corresponding prior year period of $53.8 million due to acquired intangible assets from recent acquisitions mainly associated with PA Consulting investment.

Overview – Three and Nine Month Periods Ended July 1, 2022

Net earnings attributable to the Company from continuing operations for the third fiscal quarter ended July 1, 2022 were $196.3 million (or $1.52 per diluted share), an increase of $30.9 million, from net earnings of $165.4 million (or $0.82 per diluted share) for the corresponding period last year.

While operating profit levels were consistent for the respective three-month periods of fiscal 2022 and 2021, third quarter fiscal 2022 Other income (expense), net, of $6.4 million was lower by $13.2 million versus third quarter fiscal 2021 amounts of $19.6 million.

Third quarter fiscal 2022 amounts benefited from a $13.9 million pre-tax gain related to a cost method investment sold during the period, approximately $8 million in higher foreign exchange gains, as well as other miscellaneous income items quarter over quarter, partly offset by unfavorable impacts of higher net interest expense and lower pension income compared to the prior year quarter.

Third quarter fiscal 2021 amounts included $38.7 million in pre-tax fair value gains, related currency revaluations and dividends recorded in miscellaneous income (expense), net, associated with our former investment in Worley stock, the sale of which was completed in fourth quarter 2021.

Our reported net earnings for the current year quarter also benefited from lower income taxes of $49.6 million compared to the fiscal 2021 period, with lower effective tax rates in the current quarter due mainly to the absence of fiscal 2021 income tax charges of $30.8 million associated with a statutory tax rate increase in the UK and certain nondeductible compensation related charges associated with the Company's PA Consulting investment, as well as benefiting from other favorable tax impacts during the current quarter.

Additionally, redeemable noncontrolling interests was $7.1 million higher in the current quarter due to favorable net earnings results in our PA Consulting investment compared to the prior year quarter.

The Company’s reported earnings per share for the third quarter fiscal 2021 was impacted unfavorably by $(0.44) related to an allocation update between preferred and common shares for the PA Consulting investment as required under U.S.

This per share impact had no impact to the total consideration of the transaction and had no impact on the Company’s results of operations, financial position or cash flows;

see Note 15 - PA Consulting Business Combination in the consolidated financial statements.

For the nine months ended July 1, 2022, net earnings attributable to the Company from continuing operations were $419.4 million (or $3.23 per diluted share) and overall consistent in comparison to $422.2 million (or $2.78 per diluted share) for the corresponding period last year.

The current year results reflected higher year-over-year operating profit of $172.7 million, which benefited from the full year-to-date impact of the Company's PA Consulting investment acquired on March 2, 2021 and the absence of one-time deal and related other charges associated with this investment of approximately $297 million, including one-time compensation charges of $261 million in the 2021 fiscal period.

These favorable operating profit items were offset in part by higher year-over-year Restructuring and other charges and transaction costs in the current year, including pre-tax settlement charges associated with the Legacy CH2M Matter of $91.3 million and $74.6 million associated with the Company's transformation initiatives relating to real estate rescaling (see Note 18 - Restructuring and Other Charges ) and increases in intangibles amortization costs of $43.6 million, due mainly to full year impacts of acquired intangible assets from the PA Consulting investment.

Other income (expense), net was unfavorable $101.5 million for the current year-to-date period compared to corresponding fiscal 2021 amounts, due mainly to pre-tax fair value gains associated with our former investments in Worley stock (net of Worley stock dividend and related foreign exchange items) and C3 of $102.1 million and $49.6 million, respectively, as well as higher interest expense of $14.8 million in the current year compared to the prior year.

Current year-to-date fiscal 2022 other income (expense) results benefited from the absence of the prior year $38.9 million impairment of our investment in AWE Management Ltd.

("AWE ML") as well as the $13.9 million gain on sale of a cost investment and other favorable items during the current fiscal 2022 year-to-date period.

Income taxes were lower in the current year by $53.9 million, benefiting from lower effective tax rates in fiscal 2022, due primarily to the absence of fiscal 2021 additional income taxes attributable to the tax rate increase in the UK of $30.8 million and certain nondeductible compensation related charges associated with the Company's PA Consulting investment combined with current year-to-date tax benefits of $15.4 million related to the release of valuation allowance on foreign tax credits and $9.1 million related to the removal of intercompany withholding tax.

Finally, unfavorable year-over-year net earnings impacts associated with redeemable noncontrolling interests of $129 million were attributable mainly to the absence of the 2021 period redeemable noncontrolling interests share of $101.8 million in connection with the one-time compensation charges incurred in the PA Consulting investment mentioned above, offset in part by the full year-to-date effects of the redeemable noncontrolling interests share of PA Consulting's operating results in fiscal 2022.

Fiscal 2021 earnings per share was impacted by the $(0.44) per share impact of the value allocation update between preferred and common shares for the PA Consulting investment.

For discussion of discontinued operations, see Note 17 - Sale of Energy, Chemicals and Resources ("ECR") Business.

7 unchanged sentences

Consolidated Results of Operations

Revenues for the second fiscal quarter of 2022 were $3.83 billion, an increase of $286.2 million, or 8.1%, from $3.55 billion for the corresponding period last year.

For the six months ended April 1, 2022, revenues were $7.21 billion, an increase of $285.0 million, or 4.1%, from $6.93 billion for the corresponding period last year.

Revenue increases for the year over year periods were due mainly to fiscal 2022 incremental revenues from the PA Consulting investment and the StreetLight, BlackLynx and Buffalo group acquisitions, as well as benefits from increased spending in our U.S.

Revenues for the third fiscal quarter of 2022 were $3.83 billion, an increase of $250.7 million, or 7.0%, from $3.58 billion for the corresponding period last year.

For the nine months ended July 1, 2022, revenues were $11.04 billion, an increase of $535.6 million, or 5.1%, from $10.51 billion for the corresponding period last year.

Revenue increases for the year over year periods were due mainly to fiscal 2022 incremental revenues from the PA Consulting investment and the StreetLight and BlackLynx acquisitions, as well as benefits from increased spending in our U.S.

government business sector client base.

These increases in revenues for the three and six months ended April 1, 2022 were partially offset by declines in pass-through revenues in advanced facilities business.

The six months ended April 1, 2022 was

unfavorably impacted by certain large contract wind downs in the U.S.

Also, revenue was unfavorably impacted from foreign currency translation of $51.7 million and $42.5 million for the three and six months ended April 1, 2022, respectively, in our international businesses as compared to favorable impacts of $75.6 million and $113.0 million in the corresponding periods last year.

Pass-through costs included in revenues for the three and six months ended April 1, 2022 amounted to $563.7 million and $1.04 billion, respectively, a decrease of $13.0 million and $189.3 million, or (2.2)% and (15.4)%, from $576.6 million and $1.23 billion from the corresponding periods last year.

Gross profit for the second quarter of 2022 was $870.4 million, an increase of $103.4 million, or 13.5%, from $767.0 million from the corresponding period last year.

Our gross profit margins were 22.7% and 21.6% for the three months ended April 1, 2022 and April 2, 2021, respectively, with these margin differences being mainly attributable to favorable margin impacts from the business results of our recent PA Consulting investment and the StreetLight, BlackLynx and Buffalo Group acquisitions, as well as benefits from increased spending by customers in the U.S.

government business sector.

Gross profit for the six months ended April 1, 2022 was $1.67 billion, an increase of $267.8 million, or 19.1%, from $1.40 billion from the corresponding period to date last year.

Our gross profit margins were 23.1% and 20.2% for the six months ended April 1, 2022 and April 2, 2021, respectively, with benefits from the similar favorable margin trends and increased spending in the U.S.

government business sector noted above, partially offset by certain large contract wind downs in the U.S as well as increases in labor costs associated with moderation of COVID-19 mitigation efforts and a competitive labor market, and incremental investments to support projected top-line growth.

These increases in revenues for the current year-to-date period were partially offset by declines in pass-through revenues in our P&PS advanced facilities business.

Additionally, the nine months ended July 1, 2022 was unfavorably impacted by certain large contract wind downs in the U.S.

Also, revenue was unfavorably impacted by foreign currency translation of $130.1 million and $176.8 million for the three and nine months ended July 1, 2022, respectively, in our international businesses as compared to favorable impacts of $100.2 million and $213.1 million in the corresponding periods last year.

Pass-through costs included in revenues for the three and nine months ended July 1, 2022 amounted to $635.4 million and $1.67 billion, respectively, an increase of $23.4 million and a decrease of $165.9 million, or 3.8% and (9.0)%, respectively, from $612.0 million and $1.84 billion from the corresponding periods last year.

Gross profit for the third quarter of 2022 was $824.5 million, an increase of $7.5 million, or 0.9%, from $816.9 million from the corresponding period last year.

Our gross profit margins were 21.5% and 22.8% for the three months ended July 1, 2022 and July 2, 2021, respectively, with these margin differences being mainly attributable to lower utilization trends mainly in our PA Consulting business, partly offset by favorable impacts from our recent StreetLight and BlackLynx acquisitions as well as benefits from increased spending by customers in the U.S.

government business sector for the current quarter period.

Gross profit for the nine months ended July 1, 2022 was $2.49 billion, an increase of $275.4 million, or 12.4%, from $2.22 billion from the corresponding period last year, due in part to incremental gross profit from recent business acquisitions (mainly the full year results of PA Consulting).

Our gross profit margins were 22.6% and 21.1% for the nine months ended July 1, 2022 and July 2, 2021, respectively, with benefits from the similar favorable margins from recent acquisitions mentioned above and favorable impacts from the business results of our recent PA Consulting investment on a year-to-date basis and increased spending in the U.S.

government business sector noted above.

The increases in gross profit during the three and nine months ended July 1, 2022 were partially offset by the impacts from the recent large contract wind downs in the U.S.

mentioned above, as well as increases in labor costs associated with moderation of COVID-19 mitigation efforts and a competitive labor market along with inflation impacts and incremental investments to support projected top-line growth.

See Segment Financial Information discussion for further information on the Company’s results of operations at the operating segment.

SG&A expenses for the three and six months ended April 1, 2022 were $704.2 million and $1.32 billion, respectively, a decrease of $103.9 million and increase of $97.1 million, or (12.9)% and 7.9%, from $808.1 million and $1.23 billion for the corresponding periods last year.

The three and six months ended results for fiscal 2022 were impacted by incremental SG&A expenses from recent business acquisitions (mainly PA Consulting) of $98.5 million and $192.0 million, respectively, as compared to approximately $40 million (excluding compensation costs associated with the PA strategic investment mentioned below) in the corresponding prior year periods due to the prior comparable periods including PA Consulting activity only for the partial periods subsequent to the March 2, 2021 investment date.

Additionally, Restructuring and other charges and transaction costs for the periods of 2022 included $91.3 million attributable to final pre-tax settlement of the Legacy CH2M Matter, which is further discussed in Note 19- Commitments and Contingencies and Derivative Financial Instruments.

Also, the current 2022 periods SG&A expenses were impacted by higher personnel related costs due mainly to the moderation of COVID-19 mitigation efforts and related impacts.

Also, the current year-to-date Restructuring and other charges and transaction costs were impacted by $74.6 million in costs associated in part with the Company's transformation initiatives relating to real estate.

The three and six months ended April 2, 2021 include amounts of $296.1 million and $300.2 million, respectively, for pre-tax costs incurred in connection with the investment in PA Consulting, in part classified as compensation costs reported in selling, general and administrative expenses, in addition to the Company's transformation initiatives.

Lastly, SG&A expenses benefited from favorable foreign exchange impacts of $11.3 million and $9.0 million, respectively, for the three and six months ended April 1, 2022 as compared to unfavorable impacts of $41.3 million and $47.4 million for the corresponding periods last year.

Net interest expense for the three and six months ended April 1, 2022 was $21.6 million and $39.5 million, respectively, an increase of $6.8 million and $8.5 million from $14.9 million and $31.0 million for the corresponding periods last year.

The increase in net interest expense for the three and six month periods year over year is due to higher levels of average debt outstanding relating in part to the funding of the PA Consulting investment as well as the StreetLight and BlackLynx acquisitions, in addition to higher interest rates.

Miscellaneous income (expense), net for the three and six months ended April 1, 2022 was $10.7 million and $20.4 million, respectively, in comparison to $(56.3) million and $100.0 million for the corresponding periods last year.

The favorable improvement of $67.0 million from the prior three-month comparable period was due primarily to impacts in the prior year periods of pre-tax fair losses of $(29.7) million associated with our former investments in Worley stock (net of Worley stock dividend) and certain foreign currency revaluations relating to the ECR sale and pre-tax fair value losses associated with our investment in C3 of $(34.1) million, which were both sold during fiscal year 2021.

The decrease of $79.7 million from the prior year-to-date comparable period is attributable to full year pre-tax fair value gains of $63.5 million and $48.6 million in the Company's previously mentioned investment holdings in Worley (net of Worley stock dividend) which includes impacts of certain foreign currency revaluations related to the ECR sale and C3, respectively.

Additionally, the corresponding prior year periods included other-than-temporary impairment charges on our investment in AWE ML of $5.3 million and $33.2 million.

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.

SG&A expenses for the three and nine months ended July 1, 2022 were $558.7 million and $1.88 billion, respectively, increases of $5.5 million and $102.6 million, or 1.0% and 5.8%, from $553.2 million and $1.78 billion for the corresponding periods last year.

While the three month periods' results were comparatively consistent, the nine months ended results for fiscal 2022 were impacted by incremental SG&A expenses from recent business acquisitions (mainly PA Consulting) of $150.0 million (including $43.6 million in additional amortization expense for acquired intangibles and excluding the compensation related charge discussed below), respectively, due to the prior comparable periods including PA Consulting activity only for the partial periods subsequent to the March 2, 2021 investment date.

Additionally, Restructuring and other charges and transaction costs for the year-to-date period of 2022 included $91.3 million attributable to the final pre-tax settlement of the Legacy CH2M Matter, which is further discussed in Note 19- Commitments and Contingencies and Derivative Financial Instruments and $74.6 million in costs associated in part with the Company's transformation initiatives relating to real estate.

Also, the current 2022 periods SG&A expenses were impacted by higher personnel costs associated with investments in advance of expected growth anticipated in late 2022

As noted above, the prior year-to-date period included Restructuring and other charges of $261 million for pre-tax costs incurred in connection with the investment in PA Consulting, in part classified as compensation costs reported in selling, general and administrative expenses.

Lastly, SG&A expenses benefited from favorable foreign exchange impacts of $26.4 million and $36.8 million, respectively, for the three and nine months ended July 1, 2022 as compared to unfavorable impacts of $19.3 million and $66.7 million for the corresponding periods last year.

Net interest expense for the three and nine months ended July 1, 2022 was $25.1 million and $64.6 million, respectively, an increase of $6.1 million and $14.6 million from $19.0 million and $50.1 million for the corresponding periods last year.

The increase in net interest expense for the three and nine month periods was due to higher levels of debt outstanding due to the funding of the StreetLight and BlackLynx acquisitions and increased borrowings associated with the payment of the Legacy CH2M Matter settlement in the current fiscal quarter, in addition to higher interest rates.

Additionally, the nine month period year over year is also impacted by higher levels of average debt outstanding related to the funding of the PA Consulting investment.

Miscellaneous income (expense), net for the three and nine months ended July 1, 2022 was $31.4 million and $51.8 million, respectively, in comparison to $38.7 million and $138.7 million for the corresponding periods last year.

The $7.2 million decrease from the prior three-month comparable period was due primarily to impacts in the prior year periods of pre-tax unrealized gains of $38.7 million associated with our former investment in Worley stock (including the Worley stock dividend) and certain foreign currency revaluations relating to the ECR sale, which was sold during fiscal year 2021.

The decrease of $86.9 million from the prior year-to-date comparable period is attributable to nine months of pre-tax fair value gains of $102.2 million and $49.6 million in the Company's previously mentioned investment holdings in Worley (including the Worley stock dividend) which includes impacts of certain foreign currency revaluations related to the ECR sale and C3, respectively.

The three and nine month fiscal 2022 periods benefited primarily from a $13.9 million pre-tax gain related to a cost method investment sold during the period.

Additionally, the corresponding prior year periods included other-than-temporary impairment charges on our investment in AWE ML of $5.7 million and $38.9 million, respectively.

The Company’s effective tax rates from continuing operations for the three months ended July 1, 2022 and July 2, 2021 were 21.9% and 38.5%, respectively, with the decrease primarily due to the absence of a $30.8 million expense related to a change in tax rate applied to deferred tax assets in the United Kingdom and certain nondeductible compensation related charges associated with the Company's PA Consulting investment in the three months ended July 2, 2021, as well as a current period benefit of $9.1 million the Company recognized due to the reversal of a withholding tax accrual on certain intercompany loans, partly offset by increases in permanent book/tax adjustments, state taxes, and foreign inclusions for the three month period in fiscal 2022.

Additionally, a $15.6 million payment was made during the current quarter related to an amendment of an Australia tax return, which resulted in the removal of the associated uncertain tax position from the Consolidated Balance Sheet.

This payment had no impact on the current quarter income tax provision or effective tax rate.

The Company's effective tax rates from continuing operations for the nine months ended July 1, 2022 and July 2, 2021 were 20.4% and 33.4%, respectively, with the decrease primarily due to a current year tax benefit of $15.4 million related to the release of valuation allowance on foreign tax credits and $9.1 million related to the reversal of intercompany withholding tax noted above, as well as the absence of prior year expenses related to the United Kingdom’s change in tax rate mentioned above and certain non-deductible pre-tax compensation charges associated with our investment in PA Consulting, partly offset by the absence of the benefit from the change in the Company’s assertion about indefinite reinvestment of certain foreign unremitted earnings in India in fiscal 2021.

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

6 unchanged sentences

GAAP operating profit from continuing operations by including certain corporate-level expenses, Restructuring and other charges and transaction and integration costs (in thousands).

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021

Revenues from External Customers:

3 unchanged sentences

Total $ 3,827,093 $ 3,576,436 $ 11,041,777 $ 10,506,144

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021

Segment Operating Profit:

5 unchanged sentences

Restructuring, Transaction and Other Charges (2) (10,150) (1,968) (210,986) (345,725)

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

Total Other (Expense) Income, net (3) (10,933) (71,169) (19,177) 69,002

GAAP Operating Profit 265,762 263,746 609,310 436,572

Total Other Income (Expense), net (3) 6,353 19,648 (12,825) 88,650

Earnings Before Taxes from Continuing Operations

$ 272,115 $ 283,394 $ 596,485 $ 525,222

(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) Other corporate expenses also included intangibles amortization of $51.6 million and $49.6 million for the three months ended July 1, 2022 and July 2, 2021, respectively, and $146.9 million and $103.3 million for the nine months ended July 1, 2022 and July 2, 2021, respectively, with the comparative year-to-date period increase mainly attributable to higher amortization from the PA Consulting investment.

(2) Included in the nine months ended July 1, 2022 is $91.3 million in charges related to the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves and $74.6 million of real estate impairment charges and $24.5 million in other transformation and other charges related to the Company's transformation initiatives.

Included in the nine months ended July 2, 2021 are $297.4 million of costs incurred in connection with the investment in PA Consulting, in part classified as compensation costs.

(3) The three and nine months ended July 1, 2022 included a $13.9 million gain related to a cost method investment sold during the period.

The nine months ended July 1, 2022 included a gain of $7.1 million related to a lease termination.

The three and nine months ended July 2, 2021 include $38.7 million and $102.2 million, respectively, in fair value adjustments related to our investment in Worley stock (including Worley stock dividends) and certain foreign currency revaluations relating to the ECR sale and $1.0 million and $49.6 million, respectively, in fair value adjustments related to our investment in C3 stock, with both of these investments sold in fiscal 2021.

The nine months ended July 2, 2021 also includes $38.9 million related to impairment of our AWE ML investment.

Critical Mission Solutions

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021

Revenue $ 1,317,109 $ 1,218,089 $ 3,845,927 $ 3,822,949

Operating Profit $ 104,305 $ 108,131 $ 329,042 $ 332,133

Critical Mission Solutions (CMS) segment revenues for the three and six months ended April 1, 2022 were $1.37 billion and $2.53 billion, respectively, an increase of $56.7 million and decrease of $76.0 million, or 4.3% and (2.9)%, from $1.31 billion and $2.60 billion for the corresponding periods last year.

During the three and six months ended April 1, 2022, revenue benefited from increased spending by customers in the U.S.

government business sector and our legacy international clients, incremental revenue from recent acquisitions and a recent contract award with the Department of Energy Nuclear remediation program.

Revenue during the six months ended April 1, 2022 was impacted by several large contracts winding down in the U.S.

Also, impacts on revenues from unfavorable foreign currency translation were approximately $10.2 million and $7.9 million for the three and six-month periods ended April 1, 2022, respectively, compared to $20.3 million and $27.6 million in favorable impacts in the corresponding prior year periods.

Operating profit for the segment was $113.2 million and $224.7 million, respectively, for the three and six months ended April 1, 2022, a decrease of $0.7 million and increase of $0.7 million, or (0.6)% and 0.3%, from $113.9 million and $224.0 million for the corresponding periods last year.

Operating profit levels were generally consistent and in line with prior year comparable periods presented, with the business benefiting from higher margin U.S.

government business sectors as well as our recent acquisitions but with offsetting impacts from the large contract wind downs mentioned above.

Impacts on operating profit from foreign currency translation were not significant in the three and six months ended April 1, 2022, compared to favorable impacts of approximately $3.2 million and $4.5 million in the corresponding prior year periods.

Critical Mission Solutions (CMS) segment revenues for the three and nine months ended July 1, 2022 were $1.32 billion and $3.85 billion, respectively, an increase of $99.0 million and $23.0 million, or 8.1% and 0.6%, from $1.22 billion and $3.82 billion for the corresponding periods last year.

During the three and nine months ended July 1, 2022, revenue benefited from incremental revenue from recent acquisitions in addition to recent contract awards including the Department of Energy Nuclear remediation program.

Revenue during the nine months ended July 1, 2022 was impacted by several large contracts winding down in the U.S and labor supply challenges.

Also, impacts on revenues from unfavorable foreign currency translation were approximately $26.9 million and $34.9 million for the three and nine-month periods ended July 1, 2022, respectively, compared to $26.6 million and $54.2 million in favorable impacts in the corresponding prior year periods.

Operating profit for the segment was $104.3 million and $329.0 million, respectively, for the three and nine months ended July 1, 2022, representing slight decreases of $3.8 million and $3.1 million, or (3.5)% and (0.9)%, from $108.1 million and $332.1 million for the corresponding periods last year.

Operating profit levels were generally consistent with prior year comparable periods presented, with recent U.S.

government contract awards benefiting from higher margins and offsetting impacts from the large contract wind downs mentioned above.

Impacts on operating profit from unfavorable foreign currency translation were approximately $3.9 million and $5.0 million for the three and nine months ended July 1, 2022, compared to favorable impacts of approximately $4.3 million and $8.8 million in the corresponding prior year periods.

People & Places Solutions

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021

Revenue $ 2,232,404 $ 2,102,550 $ 6,330,906 $ 6,329,088

Operating Profit $ 210,046 $ 205,324 $ 592,883 $ 603,654

Revenues for the People & Places Solutions (P&PS) segment for the three months ended April 1, 2022 was $2.17 billion and $4.10 billion, respectively, an increase of $30.4 million and decrease of $128.0 million, or 1.4% and (3.0)%, from $2.14 billion and $4.23 billion for the corresponding periods last year.

The increase in revenue for the three months ended April 1, 2022 was primarily driven by growth in our advanced facilities business as compared to the prior year corresponding period.

The decrease in revenue for the six months ended April 1, 2022 was primarily due to lower pass through revenues from our advanced facilities business as compared to the prior year corresponding period.

Foreign currency translation had a $32.0 million and $34.6 million unfavorable impact on revenues in our international businesses for the three and six-month periods ended April 1, 2022, respectively as compared to favorable impacts of $55.3 million and $85.4 million in the corresponding prior year periods.

Operating profit for the segment for the three and six month periods ended April 1, 2022 was $191.1 million and $382.8 million , r espectively, a decrease of $10.9 million and $15.5 million, or (5.4)% and (3.9)% from $202.0 million and $398.3 million for the corresponding periods last year.

The year-over-year decrease in operating profit for the three months ended April 1, 2022 was driven by higher labor costs due to moderation of COVID-19 mitigation efforts and a competitive labor market, and incremental investments to support projected top-line growth, partially offset by benefits from higher re venue growth.

For the six months ended April 1, 2022, operating profit decreased year-over-year due mainly to the cost increases mentioned above for the six-month period .

Foreign currency translation had a $6.7 million and $6.8 million unfavorable impact on operating profit in our international businesses for the three and six-month periods ended April 1, 2022, respectively as compared to favorable impacts of $9.6 million and $13.8 million in the corresponding prior year periods.

Revenues for the People & Places Solutions (P&PS) segment for the three months ended July 1, 2022 was $2.23 billion and $6.33 billion, respectively, an increase of $129.9 million and $1.8 million, or 6.2% and —%, from $2.10 billion and $6.33 billion for the corresponding periods last year.

The increase in revenue for the three months ended July 1, 2022 was primarily driven by growth in our advanced facilities business as compared to the prior year corresponding period.

The increase in revenue for the nine months ended July 1, 2022 was primarily due to higher fee-based revenue from our advanced facilities and international businesses offset in part by lower pass through revenues across the business as compared to the prior year corresponding period.

Foreign currency translation had a $69.2 million and $103.8 million unfavorable impact on revenues in our international businesses for the three and nine-month periods ended July 1, 2022, respectively as compared to favorable impacts of $73.6 million and $158.9 million in the corresponding prior year periods.

Operating profit for the segment for the three and nine month periods ended July 1, 2022 was $210.0 million and $592.9 million, respectively, an increase of $4.7 million for the three-month period and a decrease of $10.8 million for the nine-month period, or 2.3% and (1.8)% from $205.3 million and $603.7 million for the corresponding periods last year.

The year-over-year increase in operating profit for the three months ended July 1, 2022 was driven by the revenue growth mentioned above but partially offset by higher personnel costs associated with investments in advance of expected growth anticipated in late 2022 and 2023.

For the nine months ended July 1, 2022, operating profit decreased year-over-year due mainly to similar cost increases mentioned above in the first half of the year.

Foreign currency translation had a $11.8 million and $18.7 million unfavorable impact on operating profit in our international businesses for the three and nine-month periods ended July 1, 2022, respectively as compared to favorable impacts of $13.9 million and $27.7 million in the corresponding prior year periods.

PA Consulting

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

July 1, 2022 July 2, 2021 July 1, 2022 July 2, 2021

Revenue $ 277,580 $ 255,797 $ 864,944 $ 354,107

Operating Profit $ 51,448 $ 56,791 $ 182,850 $ 84,708

Revenues for the PA Consulting segment for the three and six months ended April 1, 2022 were $297.4 million and $587.4 million, respectively, an increase of $199.1 million and $489.1 million, or 202.5% and 497.5%, from $98.3 million for the corresponding periods last year.

Operating profit for the segment for the three and six months ended April 2, 2021 was $68.3 million and $131.4 million, respectively, an increase of $40.4 million and $103.5 million, or 144.8% and 370.7%, from $27.9 million for the corresponding periods last year.

The increase in revenue and operating profit was due to only approximately one month of activity from the investment in PA Consulting in the prior periods due to the timing of the investment.

Foreign currency translation had a $9.5 million and $2.5 million unfavorable impact on revenues and operating profit, respectively, in our international businesses for the three months ended April 1, 2022, respectively.

Due to the partial period in the corresponding prior year, foreign currency impact was not significant for both revenue and operating profit.

Revenues for the PA Consulting segment for the three and nine months ended July 1, 2022 were $277.6 million and $864.9 million, respectively, an increase of $21.8 million and $510.8 million, or 8.5% and 144.3%, from $255.8 million and $354.1 million for the corresponding periods last year.

The increase in revenue for the three months ended July 1, 2022 was primarily driven by growth in the U.K.

The increase in revenue for the year-to-date period in the current year was due mainly to the full year-to-date impact of revenues from our March 2, 2021 investment in PA Consulting.

Foreign currency translation had a $34.0 million and $38.1 million unfavorable impact on revenues in our international businesses for the three and nine months ended July 1, 2022, respectively and a favorable impact of $29.3 million for the corresponding prior year quarter and year-to-date periods.

Operating profit for the segment for the three and nine months ended July 2, 2021 was $51.4 million and $182.9 million, respectively, a decrease of $5.3 million and an increase of $98.1 million, or (9.4)% and 115.9%, from $56.8 million and $84.7 million, respectively, for the corresponding periods last year.

The decrease in operating profit for the three months ended July 1, 2022 was driven by normalization of utilization rates during the quarter.

The increase in operating profit for the year-to-date period was also due mainly to the full year-to-date impact of operating profit from our March 2, 2021 investment in PA Consulting.

Foreign currency translation had a $6.7 million and $8.1 million unfavorable impact on operating profit in our international businesses for the three and nine months ended July 1, 2022 and a favorable impact of $6.4 million for the corresponding prior quarter and year-to-date periods.

Other Corporate Expenses

Other corporate expenses for the three and six months ended April 1, 2022 were $89.2 million and $194.6 million, respectively, an increase of $25.9 million and $60.9 million from $63.3 million and $133.7 million for the corresponding periods last year.

This increase was due primarily to higher intangible amortization expense from the PA Consulting investment and other acquisitions, as well as impacts from higher Company benefit program costs and other department spend increases.

Other corporate expenses for the three and nine months ended July 1, 2022 were $89.9 million and $284.5 million, respectively, a decrease of $14.6 million and an increase of $46.3 million from $104.5 million and $238.2 million for the corresponding periods last year.

This decrease during the three month period was due to decreases in real estate related costs, as well as other department spend decreases due in part to the Company's transformation initiatives.

The increase during the current year-to-date period was primarily due to higher intangible amortization expense from the StreetLight and BlackLynx acquisitions and the PA Consulting investment, as well as impacts from higher Company benefit program costs.

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.

5 unchanged sentences

and (v) certain adjustments relating to costs associated with the Company’s international defined benefit pension plans.

In addition, other corporate expenses may also include from time to time certain adjustments to contract margins (both

positive and negative) associated with projects, as well as other items, where it has been determined that such adjustments are not indicative of the performance of the related LOB.

In addition, other corporate expenses may also include from time to time certain adjustments to contract margins (both positive and negative) associated with projects, as well as other items, where it has been determined that such adjustments are not indicative of the performance of the related LOB.

Restructuring and Other Charges

10 unchanged sentences

Because certain contracts (e.g., contracts relating to large Engineering, Procurement & Construction ("EPC") projects as well as national government programs) can cause large increases to backlog in the fiscal period in which we recognize the award, and because many of our contracts require us to provide services that span over several fiscal quarters (and sometimes over fiscal years), we have presented our backlog on a year-over-year basis, rather than on a sequential, quarter-over-quarter basis.

The following table summarizes our backlog at April 1, 2022 and April 2, 2021 (in millions):

April 1, 2022 April 2, 2021

The following table summarizes our backlog at July 1, 2022 and July 2, 2021 (in millions):

July 1, 2022 July 2, 2021

Critical Mission Solutions $ 10,222 $ 9,565

2 unchanged sentences

Total $ 28,090 $ 25,436

The increase in backlog in Critical Mission Solutions (CMS) from April 2, 2021 was primarily driven by success in closing on a number of key opportunities in the U.S government space and the BlackLynx acquisition.

The increase in backlog in People & Places Solutions (P&PS) from April 2, 2021 was primarily driven by new business awards in our advanced facilities business and the StreetLight acquisition.

The increase in backlog in Critical Mission Solutions (CMS) from July 2, 2021 was primarily driven by success in closing on a number of key opportunities in the U.S government space.

The increase in backlog in People & Places Solutions (P&PS) from July 2, 2021 was primarily driven by new business awards in our advanced facilities business.

The PA Consulting backlog was consistent and in line with the prior year comparable period backlog.

3 unchanged sentences

Liquidity and Capital Resources

At April 1, 2022, our principal sources of liquidity consisted of $ 1.24 billion in cash and cash equivalents and $1.50 billion of available borrowing capacity under our $2.25 billion r evolving credit agreement (the "Revolving Credit Facility").

At July 1, 2022, our principal sources of liquidity consisted of $ 1.10 billion in cash and cash equivalents and $1.08 billion of available borrowing capacity under our $2.25 billion r evolving credit agreement (the "Revolving Credit Facility").

We finance much of our operations and growth through cash generated by our operations.

The amount of cash and cash equivalents at April 1, 2022 represented an increase of $221.2 million from $1.01 billion at October 1, 2021 , the reasons for which are described below.

Our net cash flow provided by operations of $446.3 million during the six months ended April 1, 2022 was favorable by $96.0 million in co mparison to the cash flow provided by operations of $350.2 million for the corresponding prior year period.

This improvement was due mainly to higher operating profit levels year over year, due in part to the investment in PA Consulting.

This improvement was partly offset by working capital performance year over year being impacted by higher payouts of employee incentives, higher estimated tax payments and impacts from timing of receivable collections with these impacts being offset in part by favorable impacts from timing of other payments on accounts payable and cash received on the settlement of foreign currency forward contracts (mainly AUD).

Our net cash used for investing activities for the six months ended wa s $458.8 million, compared to cash used for investing activities of $1.74 billion in the corresponding prior year period, with this change due primarily to the acquisitions of StreetLight and BlackLynx in the current year and our investment in PA Consulting and acquisition of Buffalo Group in the prior year.

Our net cash provided by financing activities o f $235.1 million for the six months ended April 1, 2022 resulted mainly from net proceeds from borr owings of $387.1 million primarily in connection with the StreetLight and BlackLynx acquisitions, partly offset by cash used for share repurchases of $50.0 million, cash used for repurchase of redeemable noncontrolling interests of $35.1 million and $57.2 million in dividends to shareholders and $9.4 million in dividends to noncontrolling interest holders .

The amount of cash and cash equivalents at July 1, 2022 represented an increase of $88.0 million from $1.01 billion at October 1, 2021 , the reasons for which are described below.

Our net cash flow provided by operations of $197.2 million during the nine months ended July 1, 2022 was unfavorable by $326.4 million in co mparison to the cash flow provided by operations of $523.6 million for the corresponding prior year period.

The year-over-year decrease in cash from operations is primarily attributable to the Legacy CH2M Matter cash settlement paid in the current fiscal quarter.

Our net cash used for investing activities for the nine months ended wa s $491.2 million, compared to cash used for investing activities of $1.72 billion in the corresponding prior year period, with this change due primarily to the acquisitions of StreetLight and BlackLynx in the current year and our investment in PA Consulting and acquisition of Buffalo Group in the prior year.

Our net cash provided by financing activities o f $461.8 million for the nine months ended July 1, 2022 resulted mainly from net proceeds from borr owings of $799.2 million primarily in connection with the StreetLight and BlackLynx acquisitions, partly offset by cash used for share repurchases of $250.7 million and $86.6 million in dividends to shareholders and $16.1 million in dividends to noncontrolling interest holders .

Cash provided by financing activities in the corresponding prior year period was $1.28 billion, due primarily to net proceeds from borrowings of $1.42 billion, offset by cash used for share repurchases of $24.9 million and $79.8 million in div idends to shareholders and $40.1 million in net dividends to (contributions from) noncontrolling interest holders.

At April 1, 2022, the Company had approximately $181.3 million in cash and cash equivalents held in the U.S.

and $1.05 billion held outside of the U.S.

At July 1, 2022, the Company had approximately $220.5 million in cash and cash equivalents held in the U.S.

and $881.8 million held outside of the U.S.

(primarily in the U.K., the Eurozone, Australia, India, Japan and the United Arab Emirates), which is used primarily for funding operations in those regions.

1 unchanged sentence

(see Note 7 - Income Taxes of Notes to Consolidated Financial Statements included in our 2021 Form 10-K), there are no material impediments to repatriating these funds to the U.S.

The Company had $274.6 million in le tters of credit outstanding at April 1, 2022.

The Company had $286.9 million in le tters of credit outstanding at July 1, 2022.

Of this amount, $1.3 million was issued under the Revolving Credit Facility and $285.6 million was issued under separate, committed and uncommitted letter-of-credit facilities.

8 unchanged sentences

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

In addition, the transaction involved the potential payment of future consideration that is contingent upon the achievement of certain revenue and gross margin thresholds being achieved in calendar year 2022.

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.

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.

16 unchanged sentences

We believe we have adequate liquidity and capital resources to fund our projected cash requirements for the next twelve months based on the liquidity provided by our cash and cash equivalents on hand, our borrowing capacity and our continuing cash from operations.

We further believe that our financial resources and discretionary spend controls, as well as near term benefits from government assistance programs, will allow us to continue managing the negative impacts of the COVID-19 pandemic on our business operations for the foreseeable future.

We further believe that our financial resources and discretionary spend controls will allow us to continue managing the negative impacts of the COVID-19 pandemic on our business operations for the foreseeable future.

We continue to evaluate the impact of the pandemic on our business and reassess accordingly.

We were in compliance with all of our debt covenants at April 1, 2022.

We were in compliance with all of our debt covenants at July 1, 2022.

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 2. Management’s Discussion and Analysis