What changed in this filing

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Item 1. Financial Statements

2024-05-07 compared with 2024-02-06 · 213 added, 159 removed, 669 unchanged (36% of the section changed)

4 unchanged sentences

(In thousands, except share information)

December 29, 2023 September 29, 2023

March 29, 2024 September 29, 2023

Current Assets:

14 unchanged sentences

Current Liabilities:

Short-term debt $ 55,839 $ 61,430

Current maturities of long-term debt $ 837,260 $ 61,430

Accounts payable 1,162,078 1,143,802

15 unchanged sentences

Common stock, $ 1 par value, authorized - 240,000,000 shares;

issued and outstanding - 125,599,058 shares and 125,976,998 shares as of December 29, 2023 and September 29, 2023, respectively

issued and outstanding - 125,216,293 shares and 125,976,998 shares as of March 29, 2024 and September 29, 2023, respectively

125,216 125,977

10 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

Three Months Ended December 29, 2023 and December 30, 2022

Three and Six Months Ended March 29, 2024 and March 31, 2023

(In thousands, except per share information)

For the Three Months Ended

December 29, 2023 December 30, 2022

For the Three Months Ended For the Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Revenues $ 4,269,093 $ 4,078,332 $ 8,428,318 $ 7,877,001

6 unchanged sentences

Interest expense ( 44,232 ) ( 40,613 ) ( 87,584 ) ( 80,690 )

Miscellaneous expense ( 3,195 ) ( 3,254 )

Miscellaneous expense, net ( 4,576 ) ( 4,567 ) ( 7,771 ) ( 7,820 )

Total other expense, net ( 39,403 ) ( 37,550 ) ( 77,716 ) ( 77,873 )

Earnings from Continuing Operations Before Taxes 241,585 252,313 407,336 449,795

Income Tax benefit (expense) from Continuing Operations 16,279 ( 50,103 )

Income Tax expense from Continuing Operations ( 67,283 ) ( 19,060 ) ( 51,005 ) ( 69,163 )

Net Earnings of the Group from Continuing Operations 174,302 233,253 356,331 380,632

16 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three Months Ended December 29, 2023 and December 30, 2022

Three and Six Months Ended March 29, 2024 and March 31, 2023

(In thousands)

For the Three Months Ended

December 29, 2023 December 30, 2022

For the Three Months Ended For the Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Net Earnings of the Group $ 173,534 $ 233,178 $ 354,989 $ 379,849

3 unchanged sentences

Change in pension plan liabilities 4,294 6 ( 6,459 ) ( 22,259 )

Other comprehensive income before taxes 69,629 132,925

Income Tax Benefit (Expense):

Other comprehensive (loss) income before taxes ( 28,653 ) 2,146 40,977 135,071

Income Tax (Expense) Benefit:

Foreign currency translation adjustment — 968 — ( 5,641 )

1 unchanged sentence

Change in pension plan liabilities ( 473 ) ( 351 ) ( 935 ) ( 659 )

Income Tax Benefit (Expense):

Income Tax (Expense) Benefit:

( 999 ) 5,664 5,734 2,017

Net other comprehensive income 76,363 129,278

Net other comprehensive (loss) income ( 29,652 ) 7,810 46,711 137,088

Net Comprehensive Income of the Group 143,882 240,988 401,700 516,937

6 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended December 29, 2023 and December 30, 2022

For the Three Months Ended March 29, 2024 and March 31, 2023

(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 September 30, 2022 $ 127,393 $ 2,682,009 $ 4,225,784 $ ( 975,130 ) $ 6,060,056 $ 44,336 $ 6,104,392

Balances at December 30, 2022 $ 126,669 $ 2,672,421 $ 4,230,866 $ ( 845,852 ) $ 6,184,104 $ 49,494 $ 6,233,598

Net earnings — — 216,512 — 216,512 7,803 224,315

7 unchanged sentences

Redeemable Noncontrolling interests redemption value adjustment — — ( 21,177 ) — ( 21,177 ) — ( 21,177 )

Repurchase and issuance of redeemable noncontrolling interests — — 11,337 — 11,337 — 11,337

Noncontrolling interests - distributions and other — — — — — ( 8,910 ) ( 8,910 )

1 unchanged sentence

Issuances of equity securities including shares withheld for taxes 136 10,048 ( 286 ) — 9,898 — 9,898

Repurchases of equity securities ( 1,238 ) ( 26,057 ) ( 113,227 ) — ( 140,522 ) — ( 140,522 )

Balances at March 31, 2023

$ 126,805 $ 2,697,523 $ 4,393,351 $ ( 838,042 ) $ 6,379,637 $ 48,387 $ 6,428,024

Balances at December 29, 2023 $ 125,599 $ 2,729,416 $ 4,604,850 $ ( 781,591 ) $ 6,678,274 $ 56,576 $ 6,734,850

Net earnings — — 162,112 — 162,112 7,340 169,452

Foreign currency translation adjustments — — — ( 34,872 ) ( 34,872 ) — ( 34,872 )

Pension plan liability, net of deferred taxes of $ 473

— — — 3,821 3,821 — 3,821

Change in cash flow hedges, net of deferred taxes of $ 526

— — — 1,399 1,399 — 1,399

Dividends — — ( 36,715 ) — ( 36,715 ) — ( 36,715 )

Redeemable Noncontrolling interests redemption value adjustment — — ( 70,845 ) — ( 70,845 ) — ( 70,845 )

Noncontrolling interests - distributions and other — — — — — ( 9,568 ) ( 9,568 )

Stock based compensation — 15,866 — — 15,866 — 15,866

Issuances of equity securities including shares withheld for taxes 257 2,371 ( 2,108 ) — 520 — 520

Repurchases of equity securities ( 640 ) ( 13,895 ) ( 80,911 ) — ( 95,446 ) — ( 95,446 )

Balances at March 29, 2024 $ 125,216 $ 2,733,758 $ 4,576,383 $ ( 811,243 ) $ 6,624,114 $ 54,348 $ 6,678,462

See the accompanying Notes to Consolidated Financial Statements – Unaudited.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Six Months Ended March 29, 2024 and March 31, 2023

(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 September 30, 2022 $ 127,393 $ 2,682,009 $ 4,225,784 $ ( 975,130 ) $ 6,060,056 $ 44,336 $ 6,104,392

Net earnings — — 352,160 — 352,160 14,834 366,994

Foreign currency translation adjustments, net of deferred taxes of $ 5,641

— — — 181,644 181,644 — 181,644

Pension liability, net of deferred taxes of $ 659

— — — ( 22,918 ) ( 22,918 ) — ( 22,918 )

Change in cash flow hedges, net of deferred taxes of $( 8,317 )

— — — ( 21,638 ) ( 21,638 ) — ( 21,638 )

Dividends — — ( 33,438 ) — ( 33,438 ) — ( 33,438 )

Redeemable Noncontrolling interests redemption value adjustment — — ( 44,494 ) — ( 44,494 ) — ( 44,494 )

Repurchase of redeemable noncontrolling interests — — 11,337 — 11,337 — 11,337

Noncontrolling interests - distributions and other — — — — — ( 10,783 ) ( 10,783 )

Stock based compensation — 35,285 — — 35,285 — 35,285

Issuances of equity securities including shares withheld for taxes 650 6,286 ( 4,771 ) — 2,165 — 2,165

Repurchases of equity securities ( 1,238 ) ( 26,057 ) ( 113,227 ) — ( 140,522 ) — ( 140,522 )

Balances at March 31, 2023 $ 126,805 $ 2,697,523 $ 4,393,351 $ ( 838,042 ) $ 6,379,637 $ 48,387 $ 6,428,024

Balances at September 29, 2023 $ 125,977 $ 2,735,325 $ 4,542,872 $ ( 857,954 ) $ 6,546,220 $ 53,862 $ 6,600,082

Net earnings — — 333,722 — 333,722 14,567 348,289

Foreign currency translation adjustments — — — 73,177 73,177 — 73,177

Pension plan liability, net of deferred taxes of $ 462

Pension liability, net of deferred taxes of $ 935

— — — ( 7,394 ) ( 7,394 ) — ( 7,394 )

8 unchanged sentences

Repurchases of equity securities ( 1,428 ) ( 31,021 ) ( 163,013 ) — ( 195,462 ) — ( 195,462 )

Balances at December 29, 2023 $ 125,599 $ 2,729,416 $ 4,604,850 $ ( 781,591 ) $ 6,678,274 $ 56,576 $ 6,734,850

Balances at March 29, 2024 $ 125,216 $ 2,733,758 $ 4,576,383 $ ( 811,243 ) $ 6,624,114 $ 54,348 $ 6,678,462

See the accompanying Notes to Consolidated Financial Statements – Unaudited.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Three Months Ended December 29, 2023 and December 30, 2022

For the Six Months Ended March 29, 2024 and March 31, 2023

(In thousands)

For the Three Months Ended

December 29, 2023 December 30, 2022

For the Six Months Ended

March 29, 2024 March 31, 2023

Cash Flows from Operating Activities:

7 unchanged sentences

Loss on disposals of assets, net 1,210 828

Impairment of long-lived assets and equity method investment — 27,142

Impairment of long-lived assets — 37,217

Deferred income taxes ( 73,966 ) 20,785

49 unchanged sentences

Readers of this Quarterly Report on Form 10-Q should also read our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 29, 2023 (“2023 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 29, 2023, and for the three months ended December 29, 2023.

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 as of March 29, 2024, and for the three and six months ended March 29, 2024.

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

31 unchanged sentences

See Note 12- Borrowings for a discussion of the fair value of long-term debt.

Fair value measurements relating to our business combinations and goodwill allocations related to our segment realignment are made primarily using Level 3 inputs including discounted cash flow techniques.

Fair value measurements relating to our business combinations and goodwill allocations related to our Divergent Solutions ("DVS") segment realignment were made primarily using Level 3 inputs including discounted cash flow techniques.

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.

12 unchanged sentences

however, retrospective application is also permitted.

ASU 2023-09 will be effective in the Company's annual fiscal 2026 period.

ASU 2023-09 will be effective for the Company in the first quarter of fiscal 2026.

The Company has identified and is implementing changes to processes and internal controls to meet the standard’s updated reporting and disclosure requirements.

4 unchanged sentences

Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis.

ASU 2023-07 will be effective for the Company's annual fiscal 2025 period.

The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures.

18 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table further disaggregates our revenue by geographic area for the three months ended December 29, 2023 and December 30, 2022 (in thousands):

Three Months Ended

December 29, 2023 December 30, 2022

The following table further disaggregates our revenue by geographic area for the three and six months ended March 29, 2024 and March 31, 2023 (in thousands):

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

United States $ 2,878,888 $ 2,694,735 $ 5,676,979 $ 5,231,013

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 29, 2023 that was previously included in the contract liability balance on September 29, 2023 was $ 369.6 million.

Revenue recognized for the three months ended December 30, 2022 that was included in the contract liability balance on September 30, 2022 was $ 330.3 million.

Revenue recognized for the three and six months ended March 29, 2024 that was previously included in the contract liability balance on September 29, 2023 was $ 105.2 million and $ 474.9 million, respectively.

Revenue recognized for the three and six months ended March 31, 2023 that was included in the contract liability balance on September 30, 2022 was $ 82.7 million and $ 413.0 million, respectively.

Remaining Performance Obligation

The Company’s remaining performance obligations as of December 29, 2023 represent a measure of the total dollar value of work to be performed on contracts awarded and in progress.

The Company had approximately $ 17.7 billion in remaining performance obligations as of December 29, 2023.

The Company’s remaining performance obligations as of March 29, 2024 represent a measure of the total dollar value of work to be performed on contracts awarded and in progress.

The Company had approximately $ 17.5 billion in remaining performance obligations as of March 29, 2024.

The Company expects to recognize approximately 56 % of its remaining performance obligations into revenue within the next twelve months and the remaining 44 % thereafter.

7 unchanged sentences

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 29, 2023 and December 30, 2022 (in thousands):

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 March 29, 2024 and March 31, 2023 (in thousands):

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Three Months Ended

December 29, 2023 December 30, 2022

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Numerator for Basic and Diluted EPS:

21 unchanged sentences

On January 25, 2023, the Company's Board of Directors authorized an incremental share repurchase program of up to $ 1.0 billion of the Company's common stock, to expire on January 25, 2026 (the "2023 Repurchase Authorization").

At December 29, 2023, the Company has $ 774.8 million remaining under the 2023 Repurchase Authorization.

The following table summarizes repurchase activity under the 2023 Repurchase Authorization through the first fiscal quarter of 2024:

Amount Authorized

(2023 Repurchase Authorization) Average Price Per Share (1) Total Shares Retired Shares Repurchased

$ 1,000,000,000 $ 126.80 788,758 788,758

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

At March 29, 2024, the Company has $ 679.4 million remaining under the 2023 Repurchase Authorization.

The following table summarizes repurchase activity under the 2023 Repurchase Authorization through the second fiscal quarter of 2024:

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Amount Authorized

(2023 Repurchase Authorization) Average Price Per Share (1) Total Shares Retired Shares Repurchased

$ 1,000,000,000 $ 136.86 1,428,180 1,428,180

(1) Includes commissions paid and excise tax due under the Inflation Reduction Act of 2022 and calculated at the average price per share.

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

2 unchanged sentences

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 25, 2024, the Company’s Board of Directors declared a quarterly dividend of $ 0.29 per share of the Company’s common stock to be paid on March 22, 2024, to shareholders of record on the close of business on February 23, 2024.

On May 2, 2024 , the Company’s Board of Directors declared a quarterly dividend of $ 0.29 per share of the Company’s common stock to be paid on June 21, 2024 , to shareholders of record on the close of business on May 24, 2024 .

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

Dividends paid through the first fiscal quarter of 2024 and the preceding fiscal year are as follows:

Dividends paid through the second fiscal quarter of 2024 and the preceding fiscal year are as follows:

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

January 25, 2024 February 23, 2024 March 22, 2024 $ 0.29

September 28, 2023 October 27, 2023 November 9, 2023 $ 0.26

7 unchanged sentences

Goodwill and Intangibles

The carrying value of goodwill appearing in the accompanying Consolidated Balance Sheets at December 29, 2023 and September 29, 2023 was as follows (in thousands):

The carrying value of goodwill appearing in the accompanying Consolidated Balance Sheets at March 29, 2024 and September 29, 2023 was as follows (in thousands):

Critical Mission Solutions People & Places Solutions Divergent Solutions PA Consulting Total

1 unchanged sentence

Foreign currency translation and other 4,392 5,917 1,166 49,421 60,896

Balance December 29, 2023 $ 2,251,515 $ 3,217,147 $ 597,445 $ 1,355,291 $ 7,421,398

The following table provides certain information related to the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets at December 29, 2023 and September 29, 2023 (in thousands):

Balance March 29, 2024 $ 2,249,377 $ 3,214,110 $ 596,878 $ 1,344,057 $ 7,404,422

The following table provides certain information related to the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets at March 29, 2024 and September 29, 2023 (in thousands):

Customer Relationships, Contracts and Backlog Developed Technology Trade Names Total

1 unchanged sentence

Amortization ( 89,669 ) ( 7,946 ) ( 6,148 ) ( 103,763 )

Acquired — — 14,000 14,000

Foreign currency translation and other 20,544 203 6,313 27,060

Balance December 29, 2023 $ 1,003,454 $ 71,064 $ 193,811 $ 1,268,329

Balance March 29, 2024 $ 953,276 $ 67,048 $ 188,916 $ 1,209,240

The following table presents estimated amortization expense of intangible assets for the remainder of fiscal 2024 and for the succeeding years.

6 unchanged sentences

Receivables and Contract Assets

The following table presents the components of receivables and contract assets appearing in the accompanying Consolidated Balance Sheets at December 29, 2023 and September 29, 2023, as well as certain other related information (in thousands):

December 29, 2023 September 29, 2023

The following table presents the components of receivables and contract assets appearing in the accompanying Consolidated Balance Sheets at March 29, 2024 and September 29, 2023, as well as certain other related information (in thousands):

March 29, 2024 September 29, 2023

Components of receivables and contract assets:

12 unchanged sentences

Accumulated Other Comprehensive Income

The following table presents the Company's roll forward of accumulated other comprehensive income (loss) after-tax as of December 29, 2023 (in thousands):

The following table presents the Company's roll forward of accumulated other comprehensive income (loss) after-tax as of March 29, 2024 (in thousands):

Change in Net Pension Obligation Foreign Currency Translation Adjustment (1)

4 unchanged sentences

Reclassifications from accumulated other comprehensive income (loss) — — ( 19,331 ) ( 19,331 )

Balance at December 29, 2023

Balance at March 29, 2024

$ ( 333,086 ) $ ( 562,760 ) $ 84,603 $ ( 811,243 )

( 1) Included in the overall foreign currency translation adjustment for the three months ended December 29, 2023 and December 30, 2022 are $( 37.7 ) million and $( 74.9 ) million, respectively in unreali zed gains (losses) on long-term foreign currency denominated intercompany loans not anticipated to be settled in the foreseeable future.

(2) Included in the Company’s cumulative net unrealized gains from interest rate and cross currency swaps recorded in accumulated other comprehensive income as of December 29, 2023 were approximately $ 19.1 million in unrealized gains, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to December 29, 2023.

( 1) Included in the overall foreign currency translation adjustment for the six months ended March 29, 2024 and March 31, 2023 are $( 21.2 ) million and $( 87.2 ) million, respectively, in unreali zed gains (losses) on long-term foreign currency denominated intercompany loans not anticipated to be settled in the foreseeable future.

(2) Included in the Company’s cumulative net unrealized gains from interest rate and cross currency swaps recorded in accumulated other comprehensive income as of March 29, 2024 were approximately $ 20.2 million in unrealized gains, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to March 29, 2024.

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The Company’s effective tax rates from continuing operations for the three months ended December 29, 2023 and December 30, 2022 were ( 9.8 )% and 25.4 %, respectively.

The most significant item contributing to the difference between the statutory U.S.

federal corporate tax rate of 21.0% and the Company's effective tax rate for the three-month period ended December 29, 2023 relates to a discrete event associated with the election to treat an Australian subsidiary as a corporation versus a partnership for U.S.

tax purposes.

The election resulted in the derecognition of a deferred tax liability, resulting in a discrete income tax benefit of $ 61.6 million as the Company asserts that a component of the investment will be indefinitely reinvested.

This benefit was partly offset by U.S.

The Company’s effective tax rates from continuing operations for the three months ended March 29, 2024 and March 31, 2023 were 27.9 % and 7.6 %, respectively.

The most significant items contributing to the difference between the statutory U.S.

federal corporate tax rate of 21% and the Company's effective tax rate for the three-month period ended March 29, 2024 were U.S.

state income tax expense of $ 4.0 million and U.S.

1 unchanged sentence

These expense items are expected to have a continuing impact on the Company's effective tax rate for the remainder of the fiscal year.

The most significant items contributing to the difference between the statutory U.S.

federal corporate tax rate of 21.0% and the Company's effective tax rate for the three months ended December 30, 2022, were U.S.

For the three months ended March 31, 2023, the main differences were attributable to a tax benefit of $ 40.2 million related to uncertain tax positions (“UTPs”) in the U.S.

that were effectively settled, of which $ 30.8 million relates to positions carried forward from the acquisition of CH2M Hill Companies Ltd.

that was completed in 2018, as well as a tax benefit of $ 8.6 million for the release of previously valued foreign tax credits.

These benefits were partly offset by U.S.

state income tax expense of $ 5.9 million and U.S.

tax on foreign earnings of $ 4.6 million.

The Company's effective tax rates from continuing operations for the six months ended March 29, 2024 and March 31, 2023 were 12.6 % and 15.4 %, respectively.

The most significant item contributing to the difference between the statutory U.S.

federal corporate tax rate of 21% and the Company’s effective tax rate for the six-month period ended March 29, 2024 related to a discrete event associated with the election to treat an Australian subsidiary as a corporation versus a partnership for U.S.

tax purposes, with this election resulting in the derecognition of a deferred tax liability and yielding a discrete income tax benefit of $ 61.6 million as the Company asserts that a component of the investment will be indefinitely reinvested.

This benefit was partly offset by U.S.

state income tax expense of $ 7.3 million and U.S.

tax on foreign earnings of $ 8.6 million, which are expected to have a continuing impact on the Company's effective tax rate for the remainder of the fiscal year.

For the six months ended March 31, 2023, the main differences were associated with net tax benefits of $ 39.0 million mostly related to UTPs mentioned above and a tax benefit of $ 8.6 million for the release of previously valued foreign tax credits, partly offset by U.S.

state income tax expense of $ 10.5 million and U.S.

tax on foreign earnings of $ 8.2 million.

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

4 unchanged sentences

Joint Ventures, VIEs and Other Investments

For the Company's consolidated variable interest entities ("VIE") joint ventures, the carrying value of assets and liabilities was $ 409.8 million and $ 256.4 million, respectively, as of December 29, 2023 and $ 424.2 million and $ 279.8 million, respectively, as of September 29, 2023.

For the Company's consolidated variable interest entities ("VIE") joint ventures, the carrying value of assets and liabilities was $ 391.8 million and $ 244.3 million, respectively, as of March 29, 2024 and $ 424.2 million and $ 279.8 million, respectively, as of September 29, 2023.

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

For the Company's proportionate consolidated VIEs, the carrying value of assets and liabilities was $ 146.1 million and $ 138.2 million, respectively, as of December 29, 2023, and $ 132.0 million and $ 128.9 million, respectively, as of September 29, 2023.

For the Company's proportionate consolidated VIEs, the carrying value of assets and liabilities was $ 128.9 million and $ 126.0 million, respectively, as of March 29, 2024, and $ 132.0 million and $ 128.9 million, respectively, as of September 29, 2023.

The carrying values of our investments in equity method joint ventures in the Consolidated Balance Sheets (reported in Other Noncurrent Assets:

Miscellaneous) as of December 29, 2023 and September 29, 2023 were $ 48.1 million and $ 49.6 million, respectively.

Additionally, income from equity method joint ventures (reported in Revenue) was $ 10.3 million and $ 10.0 million, respectively, during the three months ended December 29, 2023 and December 30, 2022.

As of December 29, 2023, the Company's equity method investment carrying values do not include material amounts exceeding their share of the respective joint ventures' reported net assets.

Accounts receivable from unconsolidated joint ventures accounted for under the equity method was $ 12.0 million and $ 16.1 million as of December 29, 2023 and September 29, 2023, respectively.

Miscellaneous) as of March 29, 2024 and September 29, 2023 were $ 54.4 million and $ 49.6 million, respectively.

Additionally, income from equity method joint ventures (reported in Revenue) was $ 15.2 million and $ 7.5 million, respectively, during the three months ended March 29, 2024 and March 31, 2023, with $ 25.5 million and $ 17.5 million, respectively, for the corresponding six month periods.

As of March 29, 2024, the Company's equity method investment carrying values do not include material amounts exceeding their share of the respective joint ventures' reported net assets.

Accounts receivable from unconsolidated joint ventures accounted for under the equity method was $ 14.4 million and $ 16.1 million as of March 29, 2024 and September 29, 2023, respectively.

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

At December 29, 2023 and September 29, 2023, long-term debt consisted of the following (principal amounts in thousands):

Interest Rate Maturity December 29, 2023 September 29, 2023

At March 29, 2024 and September 29, 2023, long-term debt consisted of the following (principal amounts in thousands):

Interest Rate Maturity March 29, 2024 September 29, 2023

Revolving Credit Facility Benchmark + applicable margin (1) (2) February 2028 $ 135,000 $ 10,000

17 unchanged sentences

dollar denominated borrowings under the Revolving Credit Facility bear interest at either a SOFR rate plus a margin of between 0.975 % and 1.725 % or a base rate plus a margin of between 0 % and 0.625 %.

The applicable SOFR rates, or LIBOR rate for the prior fiscal year end, including applicable margins at December 29, 2023 and September 29, 2023 were approximately 6.70 % and 8.75 %.

The applicable SOFR rates, or LIBOR rate for the prior fiscal year end, including applicable margins at March 29, 2024 and September 29, 2023 were approximately 6.68 % and 8.75 %.

Borrowings denominated in British pounds bear interest at an adjusted SONIA rate plus a margin of between 0.908 % and 1.658 %.

There were no amounts drawn in British pounds as of December 29, 2023.

There were no amounts drawn in British pounds as of March 29, 2024.

(3) Depending on the Company’s Consolidated Leverage Ratio or Debt Rating (each as defined in the Amended and Restated Term Loan Agreement (defined below)), U.S.

1 unchanged sentence

The applicable SOFR, or LIBOR rate for the prior fiscal year end, including applicable margins for borrowings denominated in U.S.

dollars at December 29, 2023 and September 29, 2023 was approximately 6.70 % and 6.68 %.

Borrowings denominated in British pounds bear interest at an adjusted SONIA rate plus a margin of between 0.908 % and 1.658 %, which was approximately 6.47 % and 6.47 % at December 29, 2023 and September 29, 2023, respectively.

dollars at March 29, 2024 and September 29, 2023 was approximately 6.67 % and 6.68 %.

Borrowings denominated in British pounds bear interest at an adjusted SONIA rate plus a margin of between 0.908 % and 1.658 %, which was approximately 6.47 % and 6.47 % at March 29, 2024 and September 29, 2023, respectively.

(4) Depending on the Company’s Consolidated Leverage Ratio or Debt Rating (each as defined in the 2020 Term Loan Agreement), U.S.

1 unchanged sentence

The applicable SOFR, or LIBOR rate for the prior fiscal year end, including applicable margins for borrowings denominated in U.S.

dollars at December 29, 2023 and September 29, 2023 were approximately 6.70 % and 6.68 %.

dollars at March 29, 2024 and September 29, 2023 were approximately 6.68 % and 6.68 %.

(5) From and including September 1, 2028 (the “First Step Up Date”), the interest rate payable on the 5.90 % Bonds (as defined below) will be increased by an additional 12.5 basis points to 6.025 % per annum (the “First Step Up Interest Rate”) unless the Company notifies the Trustee (as defined below) on or before the date that is 15 days prior to the First Step Up Date that the Percentage of Gender Diversity Performance Target (as defined in the First Supplemental Indenture (as defined below)) has been satisfied and receives a related assurance letter verifying such compliance.

3 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

(6) The current portion of long-term debt is comprised primarily of the 2020 Term Loan Facility quarterly principal repayments of 1.25 %, or $ 9.125 million and £ 3.125 million, of the aggregate initial principal amount borrowed.

(6) Balance as of March 29, 2024 is associated with the March 25, 2025 scheduled maturity of the 2020 Term Loan Facility, which was reclassified from long-term debt in March 2024.

Previously reported balance as of September 29, 2023 was comprised of the 2020 Term Loan quarterly principal repayments of 1.25 %, or $ 9.1 million and £ 3.1 million, of the aggregate initial principal amount borrowed, totaling $ 51.8 million in U.S.

dollars for the subsequent twelve months.

Revolving Credit Facility and Term Loans

1 unchanged sentence

and international banks and financial institutions.

The credit extensions under the Revolving Credit Facility can be funded in U.S dollars, British Sterling, Euros, Canadian dollars, Australian dollars, Swedish Krona, Singapore dollars and other agreed upon alternative currencies.

The credit extensions under the Revolving Credit Facility can be funded in U.S.

dollars, British Sterling, Euros, Canadian dollars, Australian dollars, Swedish Krona, Singapore dollars and other agreed upon alternative currencies.

The Revolving Credit Agreement also provides for a financial letter of credit sub facility of $ 400.0 million, permits performance letters of credit, and provides for a $ 100.0 million sub facility for swing line loans.

2 unchanged sentences

The Company and JEGI maintain an unsecured delayed draft term loan facility (the “2021 Term Loan Facility”) established under an amended and restated term loan agreement dated February 6, 2023 (the "Amended and Restated Term Loan Agreement"), by and among the Company and JEGI and a syndicate of banks and financial institutions.

JEGI borrowed $ 200.0 million and £ 650.0 million of term loans under the 2021 Term Loan Facility and the proceeds of such term loans were used primarily to fund JEGI's investment in PA Consulting.

JEGI borrowed $ 200.0 million and £ 650.0 million of term loans under the 2021 Term Loan Facility (reflecting scheduled maturities in February 2026 and September 2025, respectively) and the proceeds of such term loans were used primarily to fund JEGI's investment in PA Consulting.

The Amended and Restated Term Loan Agreement amended and restated the term loan agreement dated January 15, 2021, by and among JEGI and a syndicate of U.S.

9 unchanged sentences

(a) replace and adjust interest rates based on market conditions and incorporate a sustainability-linked pricing adjustment, (b) increase the Consolidated Leverage Ratio financial covenant to 3.50 :1.00 (subject to temporary increases to 4.00 :1.00 following the closing of certain material acquisitions), (c) eliminate the net worth financial covenant, and (d) add Jacobs as a guarantor of the obligations of JEGI and Jacobs U.K.

The 2020 Term Loan facility matures in March 2025 and the related outstanding balances under this facility have been reclassified to current maturities of long-term debt in the Company’s March 29, 2024 consolidated balance sheet in the current quarter.

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

In the fourth quarter of fiscal 2022, the Revolving Credit Facility and Term Loan Facilities were amended to permit the Holding Company Reorganization.

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

On December 20, 2023, the Revolving Credit Facility and Term Loan Facilities were amended to fix the point in time at which certain compliance thresholds are tested in connection with the Separation Transaction.

We were in compliance with the covenants under the Revolving Credit Facility and Term Loan Facilities at December 29, 2023.

In the fourth quarter of fiscal 2022, the Revolving Credit Facility and Term Loan Facilities were amended to permit the Holding Company Reorganization.

On December 20, 2023, the Revolving Credit Facility and Term Loan Facilities were amended to adjust the point in time at which certain compliance thresholds are tested in connection with the Separation Transaction.

We were in compliance with the covenants under the Revolving Credit Facility and Term Loan Facilities at March 29, 2024.

5.90 % Bonds, due 2033

27 unchanged sentences

See Note 17- Commitments and Contingencies and Derivative Financial Instruments for discussion regarding the Company's derivative instruments.

The Company has issued $ 0.9 million in letters of credit under the Revolving Credit Facility, leaving $ 2.25 billion of available borrowing capacity under the Revolving Credit Facility at December 29, 2023.

In addition, the Company had issued $ 310.7 million under separate, committed and uncommitted letter-of-credit facilities for total issued letters of credit of $ 311.5 million at December 29, 2023.

The Company has issued $ 0.5 million in letters of credit under the Revolving Credit Facility, leaving $ 2.11 billion of available borrowing capacity under the Revolving Credit Facility at March 29, 2024.

In addition, the Company had issued $ 289.2 million under various separate, committed and uncommitted letter-of-credit facilities for issued letters of credit totaling $ 289.7 million at March 29, 2024.

JACOBS SOLUTIONS INC.

1 unchanged sentence

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 29, 2023 and December 30, 2022 were as follows (in thousands):

Three Months Ended

December 29, 2023 December 30, 2022

The components of lease expense (reflected in selling, general and administrative expenses) for th e three and six months ended March 29, 2024 and March 31, 2023 were as follows (in thousands):

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Lease expense

3 unchanged sentences

Total lease expense $ 39,034 $ 40,541 $ 77,860 $ 80,763

Supplemental information related to the Company's leases for the three months ended December 29, 2023 and December 30, 2022 was as follows (in thousands):

Three Months Ended

December 29, 2023 December 30, 2022

Supplemental information related to the Company's leases for the six months ended March 29, 2024 and March 31, 2023 was as follows (in thousands):

Six Months Ended

March 29, 2024 March 31, 2023

Cash paid for amounts included in the measurements of lease liabilities $ 91,565 $ 92,142

14 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

As a result of this analysis, the Company recognized impairment losses during the first quarter of fiscal 2023 of $ 27.1 million, which is included in selling, general and administrative expenses in the accompanying statement of earnings.

The impairment losses include $ 24.3 million related to right-of-use lease assets and $ 2.8 million related to other long-lived assets, including property, equipment and improvements and leasehold improvements for the fiscal 2023 period.

As a result of the analysis, the Company recognized impairment losses during the three and six months ended March 31, 2023 of $ 10.1 million and $ 37.2 million, respectively, which are included in selling, general, and administrative expenses in the accompanying statement of earnings.

The impairment losses recorded include $ 32.4 million related to the right-of-use lease assets and $ 4.8 million related to the other long-lived assets, including property, equipment, and improvements and leasehold improvements for the fiscal 2023 period.

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.

1 unchanged sentence

Pension and Other Postretirement Benefit Plans

The following table presents the components of net periodic pension benefit expense recognized in earnings during the three months ended December 29, 2023 and December 30, 2022 (in thousands):

Three Months Ended

December 29, 2023 December 30, 2022

The following table presents the components of net periodic pension benefit expense recognized in earnings during the three and six months ended March 29, 2024 and March 31, 2023 (in thousands):

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Service cost $ 2,261 $ 1,748 $ 4,522 $ 3,496

5 unchanged sentences

The following table presents certain information regarding the Company’s cash contributions to our pension plans for fiscal 2024 (in thousands):

Cash contributions made during the first three months of fiscal 2024

Cash contributions made during the first six months of fiscal 2024

Cash contributions projected for the remainder of fiscal 2024

7 unchanged sentences

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 2024, PA Consulting repurchased certain shares of the redeemable noncontrolling interest holders for $ 24.4 million in cash.

During the first half of 2024 and 2023, PA Consulting repurchased certain shares of the redeemable noncontrolling interest holders for cash amounts of $ 24.4 million and $ 58.4 million, respectively.

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

The Company held 70 % and 69 % of the outstanding ownership of PA Consulting as of December 29, 2023 and September 29, 2023, respectively.

During the first quarter of 2024 the Company recognized approximately $ 1.8 million in redemption value adjustments associated with redeemable noncontrolling interests preference share repurchase and reissuance activities that were recorded as an increase in consolidated retained earnings and a $ 0.01 increase in earnings per share, the results of which had no impact on the Company’s overall results of operations, financial position or cash flows.

The Company held 70 % and 69 % of the outstanding ownership of PA Consulting as of March 29, 2024 and September 29, 2023, respectively.

During the first half of 2024, the Company recognized approximately $ 1.8 million in redemption value adjustments associated with redeemable noncontrolling interests preference share repurchase and reissuance activities that were recorded as an increase in consolidated retained earnings and a $ 0.01 increase in earnings per share, the results of which had no impact on the Company’s overall results of operations, financial position or cash flows.

See Note 6- Earnings Per Share and Certain Related Information for more information.

Changes in the redeemable noncontrolling interests d uring the three months ended December 29, 2023 are as follows (in thousands):

Changes in the redeemable noncontrolling interests d uring the six months ended March 29, 2024 are as follows (in thousands):

Balance at September 29, 2023 $ 632,979

5 unchanged sentences

Cumulative translation adjustment and other 15,847

Balance at December 29, 2023 $ 654,076

Balance at March 29, 2024 $ 725,830

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

During the first quarter of fiscal 2024 and 2023, the Company recorded $ 1.6 million and $ 4.3 million, respectively, in expenses associated with these agreements which is reflected in selling, general and administrative expenses in the consolidated statements of earnings.

The Company, through its investment in PA Consulting, held $ 1.0 million and $ 2.8 million at December 29, 2023 and September 29, 2023, respectively, in cash that is restricted from general use and is included in Prepaid expenses and other on the Consolidated Balance Sheets.

During the first six months of fiscal 2024 and 2023, the Company recorded $ 6.8 million and $ 1.1 million, respectively, in expenses associated with these agreements which is reflected in selling, general and administrative expenses in the consolidated statements of earnings.

The Company, through its investment in PA Consulting, held $ 1.0 million and $ 2.8 million at March 29, 2024 and September 29, 2023, respectively, in cash that is restricted from general use and is included in Prepaid expenses and other in the Company's Consolidated Balance Sheets.

JACOBS SOLUTIONS INC.

3 unchanged sentences

During fiscal 2023, the Company implemented restructuring and separation initiatives relating to the Separation Transaction which are expected to continue through fiscal 2025.

Restructuring initiatives were also implemented during fiscal 2023 relating to our investment in PA Consulting, which is expected to continue through fiscal 2024, and the DVS segment reorganization, which is substantially completed.

While restructuring activities for each of these programs are comprised mainly of employee termination costs, the separation activities and costs are primarily related to the engagement of outside services and internal personnel and other related costs dedicated to the Company’s Separation Transaction.

Restructuring initiatives were also implemented during fiscal 2023 relating to our investment in PA Consulting, which are expected to continue through fiscal 2024, and the DVS segment reorganization, which is substantially completed.

While restructuring activities for each of these programs are comprised mainly of employee termination costs, the separation activities and costs are primarily related to the engagement of outside services, dedicated internal personnel and other related costs dedicated to the Company’s Separation Transaction.

During fiscal 2022, the Company implemented certain restructuring and integration initiatives relating to the acquisitions of (i) BlackLynx, Inc.

8 unchanged sentences

During fiscal 2019 and continuing into fiscal 2020, the Company implemented certain restructuring and separation initiatives associated with the ECR sale and other related cost reduction initiatives.

The restructuring activities and related costs were comprised mainly of separation and lease abandonment and sublease programs, while the separation activities and costs were mainly related to the engagement of consulting services and internal personnel and other related costs dedicated to the Company’s ECR-business separation.

The restructuring activities and related costs were comprised mainly of separation and lease abandonment and sublease programs, while the separation activities and costs were mainly related to the engagement of consulting services and dedicated internal personnel and other related costs dedicated to the Company’s ECR-business separation.

The activities of these initiatives have been substantially completed.

6 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes the impacts of the Restructuring and other charges by reportable segment in connection with the Separation Transaction, PA Consulting investment, DVS segment reorganization, StreetLight and BlackLynx acquisitions, the Company’s transformation initiatives relating to real estate and other staffing programs, the ECR sale, and CH2M acquisition for the three months ended December 29, 2023 and December 30, 2022 (in thousands):

Three Months Ended

December 29, 2023 December 30, 2022

The following table summarizes the impacts of the Restructuring and other charges by reportable segment in connection with the Separation Transaction, PA Consulting investment, DVS segment reorganization, StreetLight and BlackLynx acquisitions, the Company’s transformation initiatives relating to real estate and other staffing programs, the ECR sale, and CH2M acquisition for the three and six months ended March 29, 2024 and March 31, 2023 (in thousands):

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Critical Mission Solutions $ 4,738 $ 1,052 $ 6,901 $ 3,264

9 unchanged sentences

$ 41,928 $ 12,840 $ 83,297 $ 47,284

(1) The three months ended December 29, 2023 included $ 40.1 million in restructuring and other charges mainly relating to the Separation Transaction (primarily professional services and employee separation costs).

The three months ended December 30, 2022, in cluded $ 27.8 million in charges associated mainly with real estate impairments and related charges.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The activity in the Company’s accruals for Restructuring and other charges for the three months ended December 29, 2023 is as follows (in thousands):

(1) The three and six months ended March 29, 2024 included approximately $ 38.9 million and $ 79.1 million, respectively, in restructuring and other charges mainly relating to the Separation Transaction (primarily professional services and employee separation costs).

The three and six months ended March 31, 2023, in cluded approximately $ 11.0 million and $ 38.7 million, respectively, in charges associated mainly with real estate impairments and related charges, the majority of which related to People and Places Solutions.

The activity in the Company’s accruals for Restructuring and other charges for the six months ended March 29, 2024 is as follows (in thousands):

Balance at September 29, 2023

1 unchanged sentence

Payments and other ( 75,112 )

Balance at December 29, 2023 $ 32,493

(1) Excludes other net charges associated mainly with the real estate related impairments and other transformation activities during the three months ended December 29, 2023.

The following table summarizes the Restructuring and other charges by major type of costs for the three months ended December 29, 2023 and December 30, 2022 (in thousands):

Three Months Ended

December 29, 2023 December 30, 2022

Balance at March 29, 2024 $ 45,454

(1) Excludes other net charges associated mainly with the real estate related impairments during the six months ended March 29, 2024.

The following table summarizes the Restructuring and other charges by major type of costs for the three and six months ended March 29, 2024 and March 31, 2023 (in thousands):

Three Months Ended Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Lease Abandonments and Impairments $ — $ 10,443 $ 49 $ 37,273

Voluntary and Involuntary Terminations 11,728 6,570

Terminations 11,823 1,939 23,551 8,509

Outside Services (1)

22,083 802 47,066 1,478

8,022 ( 344 ) 12,631 24

Total $ 41,928 $ 12,840 $ 83,297 $ 47,284

(1) Amounts in the three months ended December 29, 2023 are comprised of outside services relating to the Separation Transaction.

(2) Amounts in the three months ended December 29, 2023 are comprised of charges relating to the Separation Transaction.

Cumulative amounts incurred to date under our various Restructuring and other activities described above by each major type of cost as of December 29, 2023 are as follows (in thousands):

(1) Amounts in the three and six months ended March 29, 2024 are comprised of outside services relating to the Separation Transaction.

(2) Amounts in the three and six months ended March 29, 2024 are comprised of charges relating to the Separation Transaction.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Cumulative amounts incurred to date under our various Restructuring and other activities described above by each major type of cost as of March 29, 2024 are as follows (in thousands):

Lease Abandonments and Impairments $ 432,773

Voluntary and Involuntary Terminations 180,044

Terminations 191,867

Outside Services 392,756

8 unchanged sentences

See Note 12- Borrowings for further discussion relating to the terms of the 5.90 % Bonds .

The unrealized net gain on these instruments wa s $ 25.8 million and $ 26.5 million, net of tax, and is included in accumulated other comprehensive income as of December 29, 2023 and September 29, 2023, respectively.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

In fiscal 2020 we entered into interest rate swap agreements with a notio nal value of $ 779.9 million as of December 29, 2023 to manage the interest rate exposure on our variable rate loans.

By entering into the swap agreements, the Company converted the LIBOR and SONIA rate based liabilities into fixed rate liabilities.

The fair value of the interest rate swaps at December 29, 2023 and September 29, 2023 was $ 76.3 million and $ 102.6 million respectively, which are included in miscellaneous other assets on the consolidated balance sheet.

T he unrealized net gain on these interest rate swaps as of December 29, 2023 and September 29, 2023 was $ 57.4 million and $ 77.2 million, respectively, net of tax , and was included in accumulated other comprehensive income.

The unrealized net gain on these instruments was $ 25.1 million and $ 26.5 million, net of tax, and is included in accumulated other comprehensive income as of March 29, 2024 and September 29, 2023, respectively.

In fiscal 2020 we entered into interest rate swap agreements with a notio nal val ue of $ 745.9 million as of March 29, 2024 to manage the interest rate exposure on our variable rate loans.

By entering into the swap agreements, the Company converted the LIBOR and SONIA rate based liabilities into fixed rate liabilities, for periods ranging from five to ten years .

The fair value of the interest rate swaps at March 29, 2024 was $ 79.1 million of which $ 66.2 million is included within miscellaneous other assets and $ 12.9 million is included within current assets on the consolidated balance sheet as of March 29, 2024.

The fair value of interest rate swaps at September 29, 2023 was $ 102.6 million, which are included in miscellaneous other assets on the consolidated balance sheet as of September 29, 2023 .

The unrealized net gain on these interest rate swaps as of March 29, 2024 and September 29, 2023 was $ 59.6 million and $ 77.2 million, respectively, net of tax , and was included in accumulated other comprehensive income.

Additionally, in fiscal 2020, we entered into a cross currency swap agreement with a notional value of $ 127.8 million to manage the interest rate and foreign currency exposure on our USD borrowings by a European subsidiary.

By entering into 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 .

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

During the fourth quarter of fiscal 2023, the Company paid down the borrowings hedged by the cross currency swap and settled the cross currency swap agreement.

2 unchanged sentences

The swaps were designated as cash-flow hedges in accordance with ASC 815, Derivatives and Hedging .

Additionally, the Company held foreign exchange forward contracts in currencies that support our operations, including British Pound, Euro, Australian Dollar and other currencies, with notional values of $ 964.9 million at December 29, 2023 and $ 857.7 million at September 29, 2023.

Additionally, the Company held foreign exchange forward contracts in currencies that support our operations, including British Pound, Euro, Australian Dollar and other currencies, with notional values of $ 946.1 million at March 29, 2024 and $ 857.7 million at September 29, 2023.

The length of these contracts currently ranges from one week to 10 months.

The fair value of the foreign exchange contracts at December 29, 2023 was $ 23.3 million, of which $ 24.8 million is included within current assets and $( 1.5 ) million is included within accounts payable on the consolidated balance sheet as of December 29, 2023.

The fair value of the contracts as of September 29, 2023 was $ 9.5 million, of which $ 16.1 million is included within current assets and $( 6.6 ) million is included within accounts payable on the consolidated balance sheet as of September 29, 2023.

The fair value of the foreign exchange contracts at March 29, 2024 was $( 4.3 ) million, of which $( 4.9 ) million is included within current liabilities and $ 0.6 million is included within current assets on the consolidated balance sheet as of March 29, 2024.

The fair value of the contracts as of September 29, 2023 was $ 9.5 million, of which $ 16.1 million is included within current assets and $( 6.6 ) million is included within current liabilities on the consolidated balance sheet as of September 29, 2023.

A ssociated income statement impacts are included in miscellaneous income (expense) in the consolidated statements of earnings for both periods.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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 observable inputs other than quoted prices in active markets.

11 unchanged sentences

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

At December 29, 2023 and September 29, 2023, the Company had issued and outstanding approximately $ 311.5 million and $ 322.0 million, respectively, in LOCs a nd $ 2.1 billion and $ 2.0 billion, respectively, in surety bonds.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

At March 29, 2024 and September 29, 2023, the Company had issued and outstanding approximately $ 289.7 million and $ 322.0 million, respectively, in LOCs and $ 2.2 billion and $ 2.0 billion, respectively, in surety bonds.

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

13 unchanged sentences

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.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Litigation and Investigations

8 unchanged sentences

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.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

11 unchanged sentences

The amount of the settlement was not material to the Company's business, financial condition, results of operations or cash flows.

During the fourth quarter of fiscal 2022, the Company recorded a receivable for certain expected third-party recoveries equal to approximately $ 27 million before tax.

The Company received the payment during fiscal 2023 .

During the fourth quarter of fiscal 2022, the Company recorded a receivable for certain expected third-party recoveries equal to approximately $ 27 million before tax, which was collected during first half of fiscal 2023 .

Segment Information

8 unchanged sentences

The Company incurs certain Selling, General and Administrative costs (“SG&A”) that relate to its business as a whole which are not allocated to the segments.

The following tables present total revenues and segment operating profit from continuing operations for each reportable segment (in thousands) and includes a reconciliation of segment operating profit to total U.S.

GAAP operating profit by including certain corporate-level expenses, Restructuring and other charges (as defined in Note 16- Restructuring and Other Charges ) and transaction and integration costs (in thousands).

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

For the Three Months Ended

December 29, 2023 December 30, 2022

For the Three Months Ended For the Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Revenues from External Customers:

4 unchanged sentences

Total $ 4,269,093 $ 4,078,332 $ 8,428,318 $ 7,877,001

For the Three Months Ended

December 29, 2023 December 30, 2022

For the Three Months Ended For the Six Months Ended

March 29, 2024 March 31, 2023 March 29, 2024 March 31, 2023

Segment Operating Profit:

2 unchanged sentences

Divergent Solutions (1)

18,973 24,861 26,556 36,828

PA Consulting 60,169 65,631 114,624 116,658

8 unchanged sentences

Earnings from Continuing Operations Before Taxes $ 241,585 $ 252,313 $ 407,336 $ 449,795

(1) Includes an approximate $ 15 million pre-tax non-cash charge associated with an inventory write down during the fiscal 2024 period comprised of adjustments of immaterial cumulative inventory misstatements previously reported which would not have been material to any prior period financial statements nor any amounts reported in the current period.

(2) Other corporate expenses included intangibles amortization of $ 51.1 million and $ 49.8 million for the three months ended December 29, 2023 and December 30, 2022, respectively, along with an approximate $ 10 million intangibles impairment charge in the three month ended December 29, 2023 period.

Additionally, the comparison of the three month period of fiscal 2024 to the corresponding 2023 period was unfavorably impacted by the one-time net favorable impacts of $ 41 million relating mainly to changes in employee benefits programs in the prior year, partly offset by year over year favorable department spending as well as favorable impacts of corporate functional overhead cost recovery by our lines of business.

(3) The three months ended December 29, 2023 included $ 40.1 million in restructuring and $ 11.0 million of transaction charges, mainly relating to the Separation Transaction (primarily professional services and employee separation costs).

Included in the three months ended December 30, 2022 were mainly $ 27.1 million in restructuring and other charges associated mainly with real estate impairments with the remainder associated with other miscellaneous separation and transaction professional services costs from the prior year.

(1) For the six months ended March 29, 2024, operating profit included an approximate $ 15 million pre-tax non-cash charge associated with an inventory write down during the fiscal 2024 period comprised of cumulative adjustments of immaterial inventory misstatements previously reported which would not have been material to any prior period financial statements nor to any amounts reported in the current period.

(2) Other corporate expenses included intangibles amortization of $ 52.6 million and $ 50.5 million for the three months ended March 29, 2024 and March 31, 2023, respectively, and $ 103.8 million and $ 100.2 million, for the six months ended March 29, 2024 and March 31, 2023, respectively, along with approximately $ 11.0 million intangibles impairment charge in the six month period ended, March 29, 2024 .

Additionally, the comparison of the six month period of fiscal 2024 to the corresponding 2023 period was unfavorably impacted by the one-time net favorable impact of $ 41 million relating mainly to changes in employee benefits programs in the prior year, partly offset by year over year favorable department spending as well as favorable impacts of corporate functional overhead cost recovery by our lines of business.

(3) The three months and six months ended March 29, 2024 included $ 38.9 million and $ 79.1 million, respectively, in restructuring and other charges and $ 8.4 million and $ 19.4 million, respectively, of transaction charges, mainly relating to the Separation Transaction (primarily professional services and employee separation costs).

Included in the three months and six months ended March 31, 2023 were $ 10.1 million and $ 37.2 million, respectively, mainly in real estate impairment charges related to the Company's transformation initiatives.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

(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.

8 unchanged sentences

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