What changed in this filing

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Item 1. Financial Statements

2025-02-04 compared with 2024-08-06 · 281 added, 377 removed, 528 unchanged (55% of the section changed)

4 unchanged sentences

(In thousands, except share information)

June 28, 2024 September 29, 2023

December 27, 2024 September 27, 2024

Current Assets:

2 unchanged sentences

Prepaid expenses and other 136,855 155,865

Investment in equity securities 597,939 749,468

Total current assets 4,946,964 4,895,580

21 unchanged sentences

Other deferred liabilities 116,600 120,483

Total other noncurrent liabilities 2,646,195 2,291,779

Commitments and Contingencies

5 unchanged sentences

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

issued and outstanding - 124,253,511 shares and 125,976,998 shares as of June 28, 2024 and September 29, 2023, respectively

issued and outstanding - 122,912,389 shares and 124,253,511 shares as of December 27, 2024 and September 27, 2024, respectively

122,912 124,084

10 unchanged sentences

CONSOLIDATED STATEMENTS OF EARNINGS

Three and Nine Months Ended June 28, 2024 and June 30, 2023

Three Months Ended December 27, 2024 and December 29, 2023

(In thousands, except per share information)

For the Three Months Ended For the Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

For the Three Months Ended

December 27, 2024 December 29, 2023

Revenues $ 2,932,956 $ 2,810,227

6 unchanged sentences

Interest expense ( 34,820 ) ( 43,350 )

Miscellaneous income (expense), net 1,166 ( 7,099 ) ( 6,605 ) ( 14,920 )

Miscellaneous expense ( 130,107 ) ( 2,964 )

Total other expense, net ( 155,271 ) ( 38,795 )

Earnings from Continuing Operations Before Taxes 53,147 103,205

Income Tax Expense from Continuing Operations ( 67,739 ) ( 54,166 ) ( 118,743 ) ( 123,329 )

Net Earnings of the Group from Continuing Operations 158,411 172,519 514,743 553,149

Net Earnings (Loss) of the Group from Discontinued Operations 485 294 ( 857 ) ( 489 )

Net Earnings of the Group 158,896 172,813 513,886 552,660

Income Tax (Expense) Benefit from Continuing Operations ( 57,149 ) 31,610

Net (Loss) Earnings of the Group from Continuing Operations ( 4,002 ) 134,815

Net (Loss) Earnings of the Group from Discontinued Operations, net of tax ( 1,001 ) 46,639

Net (Loss) Earnings of the Group ( 5,003 ) 181,454

Net Earnings Attributable to Noncontrolling Interests from Continuing Operations ( 6,080 ) ( 3,851 )

Net Earnings Attributable to Redeemable Noncontrolling interests ( 7,047 ) ( 2,618 )

Net Earnings Attributable to Jacobs from Continuing Operations 146,449 163,945 481,514 516,886

Net Earnings Attributable to Jacobs $ 146,934 $ 164,239 $ 480,657 $ 516,397

Net (Loss) Earnings Attributable to Jacobs from Continuing Operations ( 17,129 ) 128,346

Net Earnings Attributable to Noncontrolling Interests from Discontinued Operations — ( 3,375 )

Net (Loss) Earnings Attributable to Jacobs from Discontinued Operations ( 1,001 ) 43,264

Net (Loss) Earnings Attributable to Jacobs $ ( 18,130 ) $ 171,610

Net Earnings Per Share:

Basic Net Earnings from Continuing Operations Per Share $ 1.17 $ 1.29 $ 3.85 $ 4.08

Basic Net Loss from Discontinued Operations Per Share $ — $ — $ ( 0.01 ) $ —

Basic Earnings Per Share $ 1.17 $ 1.30 $ 3.84 $ 4.07

Diluted Net Earnings from Continuing Operations Per Share $ 1.17 $ 1.29 $ 3.83 $ 4.06

Diluted Net Loss from Discontinued Operations Per Share $ — $ — $ ( 0.01 ) $ —

Diluted Earnings Per Share $ 1.17 $ 1.29 $ 3.82 $ 4.06

Basic Net (Loss) Earnings from Continuing Operations Per Share $ ( 0.10 ) $ 1.03

Basic Net (Loss) Earnings from Discontinued Operations Per Share $ ( 0.01 ) $ 0.34

Basic (Loss) Earnings Per Share $ ( 0.11 ) $ 1.37

Diluted Net (Loss) Earnings from Continuing Operations Per Share $ ( 0.10 ) $ 1.03

Diluted Net (Loss) Earnings from Discontinued Operations Per Share $ ( 0.01 ) $ 0.34

Diluted (Loss) Earnings Per Share $ ( 0.11 ) $ 1.37

See the accompanying Notes to Consolidated Financial Statements - Unaudited.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three and Nine Months Ended June 28, 2024 and June 30, 2023

Three Months Ended December 27, 2024 and December 29, 2023

(In thousands)

For the Three Months Ended For the Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Net Earnings of the Group $ 158,896 $ 172,813 $ 513,886 $ 552,660

For the Three Months Ended

December 27, 2024 December 29, 2023

Net (Loss) Earnings of the Group $ ( 5,003 ) $ 181,454

Other Comprehensive Income:

2 unchanged sentences

Change in pension plan liabilities 24,176 ( 10,753 )

Other comprehensive income before taxes 4 64,361 40,983 199,432

Other comprehensive (loss) income before taxes ( 130,151 ) 69,629

Income Tax (Expense) Benefit:

Foreign currency translation adjustment 4,390 5,293 4,390 ( 348 )

Cash flow hedges ( 1,484 ) 7,196

2 unchanged sentences

( 2,616 ) 6,734

Net other comprehensive income 4,828 65,654 51,539 202,742

Net Comprehensive Income of the Group 163,724 238,467 565,425 755,402

Net other comprehensive (loss) income ( 132,767 ) 76,363

Net Comprehensive (Loss) Income of the Group ( 137,770 ) 257,817

Net Earnings Attributable to Noncontrolling Interests ( 6,080 ) ( 7,226 )

Net Earnings Attributable to Redeemable Noncontrolling interests ( 7,047 ) ( 2,618 )

Net Comprehensive Income Attributable to Jacobs $ 151,762 $ 229,893 $ 532,196 $ 719,139

Net Comprehensive (Loss) Income Attributable to Jacobs $ ( 150,897 ) $ 247,973

See the accompanying Notes to Consolidated Financial Statements - Unaudited.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Three Months Ended June 28, 2024 and June 30, 2023

Three Months Ended December 27, 2024 and December 29, 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 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 — — 171,610 — 171,610 7,226 178,836

12 unchanged sentences

Repurchases of equity securities ( 789 ) ( 17,126 ) ( 82,101 ) — ( 100,016 ) — ( 100,016 )

Balances at June 30, 2023

$ 125,881 $ 2,707,494 $ 4,460,729 $ ( 772,388 ) $ 6,521,716 $ 50,700 $ 6,572,416

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

Net earnings — — 146,934 — 146,934 8,551 155,485

Foreign currency translation adjustments net of deferred taxes of $( 4,390 )

— — — 5,808 5,808 — 5,808

Pension plan liability, net of deferred taxes of $ 470

— — — 1,775 1,775 — 1,775

Change in cash flow hedges, net of deferred taxes of $( 904 )

Balances at December 29, 2023

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

Dividends — — ( 36,561 ) — ( 36,561 ) — ( 36,561 )

Redeemable Noncontrolling interests redemption value adjustment — — ( 2,796 ) — ( 2,796 ) — ( 2,796 )

Repurchase and issuance of redeemable noncontrolling interests — — ( 338 ) — ( 338 ) — ( 338 )

Noncontrolling interests - distributions and other — — — — — ( 3,262 ) ( 3,262 )

Stock based compensation — 18,994 — — 18,994 — 18,994

Issuances of equity securities including shares withheld for taxes 111 12,463 ( 37 ) — 12,537 — 12,537

Repurchases of equity securities ( 1,073 ) ( 23,465 ) ( 126,381 ) — ( 150,919 ) — ( 150,919 )

Balances at June 28, 2024 $ 124,254 $ 2,741,750 $ 4,557,204 $ ( 806,415 ) $ 6,616,793 $ 59,637 $ 6,676,430

See the accompanying Notes to Consolidated Financial Statements – Unaudited.

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Nine Months Ended June 28, 2024 and June 30, 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 27, 2024 $ 124,084 $ 2,758,064 $ 2,366,769 $ ( 699,450 ) $ 4,549,467 $ 17,836 $ 4,567,303

Net earnings — — 516,397 — 516,397 23,038 539,435

Foreign currency translation adjustments, net of deferred taxes of $ 348

— — — 242,420 242,420 — 242,420

Pension liability, net of deferred taxes of $ 1,022

— — — ( 30,047 ) ( 30,047 ) — ( 30,047 )

Change in cash flow hedges, net of deferred taxes of $( 4,680 )

Net (loss) earnings

— — ( 18,130 ) — ( 18,130 ) 6,080 ( 12,050 )

Dividends — — ( 66,652 ) — ( 66,652 ) — ( 66,652 )

Redeemable Noncontrolling interests redemption value adjustment — — ( 10,393 ) — ( 10,393 ) — ( 10,393 )

Repurchase of redeemable noncontrolling interests — — 14,936 — 14,936 — 14,936

Noncontrolling interests - distributions and other — — — — — ( 16,674 ) ( 16,674 )

Stock based compensation — 55,908 — — 55,908 — 55,908

Issuances of equity securities including shares withheld for taxes 814 18,779 ( 5,302 ) — 14,291 — 14,291

Repurchases of equity securities ( 2,326 ) ( 49,202 ) ( 214,041 ) — ( 265,569 ) — ( 265,569 )

Balances at June 30, 2023 $ 125,881 $ 2,707,494 $ 4,460,729 $ ( 772,388 ) $ 6,521,716 $ 50,700 $ 6,572,416

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 — — 480,657 — 480,657 23,117 503,774

Foreign currency translation adjustments net of deferred taxes of $ 0

— — — ( 160,148 ) ( 160,148 ) — ( 160,148 )

Pension liability, net of deferred taxes of $ 1,407

Pension plan liability, net of deferred taxes of $ 1,132

— — — 23,044 23,044 — 23,044

5 unchanged sentences

Noncontrolling interests - distributions and other — — — — — ( 2,309 ) ( 2,309 )

Distribution of SpinCo Business — — 1,000 — 1,000 — 1,000

Stock based compensation — 13,059 — — 13,059 — 13,059

1 unchanged sentence

Repurchases of equity securities ( 1,456 ) ( 32,359 ) ( 167,811 ) — ( 201,626 ) — ( 201,626 )

Balances at June 28, 2024 $ 124,254 $ 2,741,750 $ 4,557,204 $ ( 806,415 ) $ 6,616,793 $ 59,637 $ 6,676,430

Balances at December 27, 2024 $ 122,912 $ 2,735,155 $ 2,179,509 $ ( 832,217 ) $ 4,205,359 $ 21,607 $ 4,226,966

See the accompanying Notes to Consolidated Financial Statements – Unaudited.

2 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Nine Months Ended June 28, 2024 and June 30, 2023

For the Three Months Ended December 27, 2024 and December 29, 2023

(In thousands)

For the Nine Months Ended

June 28, 2024 June 30, 2023

For the Three Months Ended

December 27, 2024 December 29, 2023

Cash Flows from Operating Activities:

Net earnings attributable to the Group $ 513,886 $ 552,660

Adjustments to reconcile net earnings to net cash flows provided by operations:

Net (loss) earnings attributable to the Group $ ( 5,003 ) $ 181,454

Adjustments to reconcile net (loss) earnings to net cash flows provided by operations:

Depreciation and amortization:

1 unchanged sentence

Intangible assets 38,661 51,119

Loss on investment in equity securities 145,215 —

Stock based compensation 13,059 19,310

Equity in earnings of operating ventures, net of return on capital distributions ( 2,236 ) 1,870

Loss on disposals of assets, net 1,033 590

Impairment of long-lived assets — 38,131

(Gain) loss on disposals of assets, net ( 622 ) 608

Deferred income taxes 20,253 ( 58,239 )

Changes in assets and liabilities, excluding the effects of businesses acquired:

Changes in assets and liabilities:

Receivables and contract assets, net of contract liabilities ( 57,753 ) 102,705

10 unchanged sentences

Capital contributions to equity investees, net of return of capital distributions 932 1,266

Acquisitions of businesses, net of cash acquired ( 14,000 ) ( 17,685 )

Net cash used for investing activities ( 7,920 ) ( 15,997 )

2 unchanged sentences

Repayments of long-term borrowings ( 221,000 ) ( 567,752 )

Proceeds from short-term borrowings 1,106 3,353

Repayments of short-term borrowings ( 5,345 ) ( 6,262 )

6 unchanged sentences

Repurchase of redeemable noncontrolling interests ( 3,729 ) ( 24,360 )

Proceeds from issuances of redeemable noncontrolling interests 19,761 34,771

Net cash used for financing activities ( 492,567 ) ( 770,342 )

Net cash provided by (used for) financing activities 112,154 ( 208,701 )

Effect of Exchange Rate Changes ( 58,180 ) 34,148

2 unchanged sentences

Cash and Cash Equivalents, including Restricted Cash, at the End of the Period $ 1,300,441 $ 1,157,256

Less Cash and Cash Equivalents included in Assets held for spin $ — $ ( 215,622 )

Cash and Cash Equivalents, including Restricted Cash of Continuing Operations at the End of the Period $ 1,300,441 $ 941,634

See the accompanying Notes to Consolidated Financial Statements – Unaudited.

17 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 27, 2024 (“2024 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 as of June 28, 2024, and for the three and nine months ended June 28, 2024.

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 December 27, 2024, and for the three months ended December 27, 2024.

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

On November 20, 2023, Jacobs entered into a definitive agreement to spin-off and combine our Critical Mission Solutions ("CMS") and portions of our Divergent Solutions business, including Cyber & Intelligence (the "Separated Businesses") with Amentum Parent Holdings LLC ("Amentum"), in a Reverse Morris Trust transaction intended to be tax-free to Jacobs’ shareholders for U.S.

federal income tax purposes (hereinafter referred to as the “Separation Transaction”).

The Separation Transaction, which is expected to close in the second half of September 2024, is subject to regulatory approvals and other customary closing conditions.

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

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

We determined that the Disposal Group should be reported as discontinued operations in accordance with ASC 210-05, Discontinued Operations because their disposal represents a strategic shift that had a major effect on our operations and financial results.

As such, the financial results of the ECR business are reflected in our unaudited Consolidated Statements of Earnings as discontinued operations for all periods presented and all of the ECR business to be sold under the terms of the ECR sale had been conveyed to Worley and as such, no amounts remain held for sale.

On September 27, 2024, Jacobs Solutions Inc.

("Jacobs") completed the previously announced Reverse Morris Trust transaction pursuant to which (i) Jacobs first transferred its Critical Mission Solutions business (“CMS”) and portions of its Divergent Solutions (“DVS”) business (referred to herein as the Cyber & Intelligence business (“C&I”) and together with CMS referred to as the “SpinCo Business”), to Amazon Holdco Inc., a Delaware corporation, that was subsequently renamed Amentum Holdings, Inc.

(“SpinCo”) (the “Separation”), (ii) Jacobs then effectuated a spin-off of SpinCo by distributing 124,084,108 shares of SpinCo common stock, par value $ 0.01 per share (the “SpinCo Common Stock”) by way of a pro rata distribution to its shareholders such that each holder of shares of Jacobs common stock, par value $ 1.00 per share, (the “Jacobs Common Stock”) was entitled to receive one share of SpinCo Common Stock for each share of Jacobs Common Stock held as of the record date, September 23, 2024 (the “Distribution”), and (iii) finally, Amentum Parent Holdings LLC merged with and into SpinCo, with SpinCo surviving the merger (the “Merger” and together with the Separation and the Distribution, the “Separation Transaction”).

As a result of the Separation, substantially all SpinCo Business-related assets and liabilities have been separated and distributed (the "Disposal Group").

The Company determined that the Disposal Group should be reported as discontinued operations in accordance with ASC 205-20, Discontinued Operations because their disposal represents a strategic shift that had a major effect on the Company's operations and financial results.

As such, the financial results of the SpinCo Business are reflected in the Company's Consolidated Statements of Earnings as well as relevant disclosures as discontinued operations for all periods presented.

See Note 15- Discontinued Operations for more information.

Use of Estimates and Assumptions

3 unchanged sentences

and certain amounts disclosed in these Notes to the Consolidated Financial Statements.

Although such estimates and assumptions are based on management’s most recent assessment of the underlying facts and circumstances utilizing the most current information available and past experience, actual results could differ significantly from those estimates and assumptions.

Our estimates, judgments and assumptions are evaluated periodically and adjusted accordingly.

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

could differ significantly from those estimates and assumptions.

Our estimates, judgments and assumptions are evaluated periodically and adjusted accordingly.

Please refer to Note 2- Significant Accounting Policies of Notes to Consolidated Financial Statements included in our 2024 Form 10-K for a discussion of other significant estimates and assumptions affecting our consolidated financial statements.

10 unchanged sentences

Please refer to Note 2- Significant Accounting Policies of Notes to Consolidated Financial Statements included in our 2024 Form 10-K for a more complete discussion of the various items within the consolidated financial statements measured at fair value and the methods used to determine fair value.

Please also refer to Note 17- Commitments and Contingencies and Derivative Financial Instruments for discussion regarding the Company's derivative instruments.

Please also refer to Note 18- Commitments and Contingencies and Derivative Financial Instruments for discussion regarding the Company's derivative instruments Note 14- Discontinued Operations for discussion regarding the Company's investment in Amentum ordinary shares.

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

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

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.

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

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

The fair value of the contingent consideration is estimated using a Monte Carlo simulation and the significant assumptions used include projections of revenues and probabilities of meeting those projections.

Key inputs to the valuation of the noncontrolling interests include projected cash flows and the expected volatility associated with those cash flows.

JACOBS SOLUTIONS INC.

2 unchanged sentences

New Accounting Pronouncements

ASU 2024-03, Income Statement, (Subtopic 220-40):

Reporting Comprehensive Income - Disaggregation of Income Statement Expenses, requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses.

The amendments in this update also provide guidance on the disaggregation disclosure requirements for certain expense captions presented on the face of an entity’s income statement and provide guidance on the disclosure of selling expenses.

The amendments in ASU 2024-03 are effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted.

The amendments should be applied prospectively;

however, retrospective application is also permitted.

ASU 2024-03 will be effective for the Company in the fourth quarter of fiscal 2027.

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

ASU 2023-09, Income Taxes, (Topic 740):

4 unchanged sentences

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.

The Company is evaluating the impact of this guidance on its consolidated financial statements and related disclosures and is implementing changes to processes and internal controls to meet the standard’s updated reporting and disclosure requirements.

ASU 2023-07, Segment Reporting, (Topic 280):

9 unchanged sentences

The provisions of the standard are contingent upon instances where the SEC removes the related disclosure provisions from Regulation S-X and S-K.

ASU 2023-06 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

The amendments should be applied prospectively;

however, retrospective application is also permitted.

ASU 2023-06 will be effective for the Company in the fourth quarter of fiscal 2026.

The Company does not expect that the application of this standard will have a material impact on our consolidated financial statements and related disclosures.

13 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table further disaggregates our revenue by geographic area for the three and nine months ended June 28, 2024 and June 30, 2023 (in thousands):

Three Months Ended Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

The following table further disaggregates our revenue by geographic area for the three months ended December 27, 2024 and December 29, 2023 (in thousands):

Three Months Ended

December 27, 2024 December 29, 2023

United States $ 1,812,830 $ 1,734,649

8 unchanged sentences

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

Revenue recognized for the three and nine months ended June 28, 2024 that was previously included in the contract liability balance on September 29, 2023 was $ 56.5 million and $ 531.3 million, respectively.

Revenue recognized for the three and nine months ended June 30, 2023 that was included in the contract liability balance on September 30, 2022 was $ 65.1 million and $ 483.9 million, respectively.

Revenue recognized for the three months ended December 27, 2024 that was previously included in the contract liability balance on September 27, 2024 was $ 410.7 million.

Revenue recognized for the three months ended December 29, 2023 that was included in the contract liability balance on September 29, 2023 was $ 339.4 million.

Remaining Performance Obligation

The Company’s remaining performance obligations as of June 28, 2024 represent a measure of the total dollar value of work to be performed on contracts awarded and in progress.

The Company had approximately $ 18.8 billion in remaining performance obligations as of June 28, 2024.

The Company’s remaining performance obligations as of December 27, 2024 represent a measure of the total dollar value of work to be performed on contracts awarded and in progress.

The Company had approximately $ 14.6 billion in remaining performance obligations as of December 27, 2024.

The Company expects to recognize approximately 49 % of its remaining performance obligations into revenue within the next twelve months and the remaining 51 % thereafter.

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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 and nine months ended June 28, 2024 and June 30, 2023 (in thousands):

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 27, 2024 and December 29, 2023 (in thousands):

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Three Months Ended Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Three Months Ended

December 27, 2024 December 29, 2023

Numerator for Basic and Diluted EPS:

Net earnings attributable to Jacobs from continuing operations $ 146,449 $ 163,945 $ 481,514 $ 516,886

Net (loss) earnings attributable to Jacobs from continuing operations $ ( 17,129 ) $ 128,346

Preferred Redeemable Noncontrolling interests redemption value adjustment (See Note 16- PA Consulting Redeemable Noncontrolling Interests )

( 20 ) — 1,746 —

Net earnings from continuing operations allocated to common stock for EPS calculation $ 146,429 $ 163,945 $ 483,260 $ 516,886

Net earnings (loss) from discontinued operations allocated to common stock for EPS calculation $ 485 $ 294 $ ( 857 ) $ ( 489 )

Net earnings allocated to common stock for EPS calculation $ 146,914 $ 164,239 $ 482,403 $ 516,397

Net (loss) earnings from continuing operations allocated to common stock for EPS calculation $ ( 12,561 ) $ 130,112

Net (loss) earnings from discontinued operations allocated to common stock for EPS calculation $ ( 1,001 ) $ 43,264

Net (loss) earnings allocated to common stock for EPS calculation $ ( 13,562 ) $ 173,376

Denominator for Basic and Diluted EPS:

4 unchanged sentences

Net Earnings Per Share:

Basic Net Earnings from Continuing Operations Per Share $ 1.17 $ 1.29 $ 3.85 $ 4.08

Basic Net Loss from Discontinued Operations Per Share $ — $ — $ ( 0.01 ) $ —

Basic Earnings Per Share $ 1.17 $ 1.30 $ 3.84 $ 4.07

Diluted Net Earnings from Continuing Operations Per Share $ 1.17 $ 1.29 $ 3.83 $ 4.06

Diluted Net Loss from Discontinued Operations Per Share $ — $ — $ ( 0.01 ) $ —

Diluted Earnings Per Share $ 1.17 $ 1.29 $ 3.82 $ 4.06

Basic Net (Loss) Earnings from Continuing Operations Per Share $ ( 0.10 ) $ 1.03

Basic Net (Loss) Earnings from Discontinued Operations Per Share $ ( 0.01 ) $ 0.34

Basic (Loss) Earnings Per Share $ ( 0.11 ) $ 1.37

Diluted Net (Loss) Earnings from Continuing Operations Per Share $ ( 0.10 ) $ 1.03

Diluted Net (Loss) Earnings from Discontinued Operations Per Share $ ( 0.01 ) $ 0.34

Diluted (Loss) Earnings Per Share $ ( 0.11 ) $ 1.37

Per share amounts may not add due to rounding.

(1) For the three months ended December 27, 2024, because net (loss) earnings from continuing operations was a loss, the effect of antidilutive securities of 576 was excluded from the denominator in calculating diluted EPS.

Share Repurchases

2 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 June 28, 2024, the Company had $ 528.5 million remaining under the 2023 Repurchase Authorization.

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

At December 27, 2024, the Company had $ 270.8 million remaining under the 2023 Repurchase Authorization.

On January 30, 2025, the Company's Board of Directors authorized an incremental share repurchase program of up to $1.5 billion of the Company's common stock, to expire on January 30, 2028 (the "2025 Repurchase Authorization").

No repurchase activity has taken place under the 2025 Share Repurchase Authorization to date.

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The following table summarizes repurchase activity under the 2023 Repurchase Authorization through the first fiscal quarter of 2025:

Amount Authorized

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

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

$ 1,000,000,000 $ 138.50 1,455,839

4 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 July 11, 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 August 23, 2024 , to shareholders of record on the close of business on July 26, 2024 .

On January 30, 2025, the Company’s Board of Directors declared a quarterly dividend of $ 0.32 per share of the Company’s common stock to be paid on March 21, 2025, to shareholders of record on the close of business on February 21, 2025.

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

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

Dividends paid through the first fiscal quarter of 2025 and the preceding fiscal year are as follows:

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

May 2, 2024 May 24, 2024 June 21, 2024 $ 0.29

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

September 26, 2024 October 25, 2024 November 22, 2024 $ 0.29

July 11, 2024 July 26, 2024 August 23, 2024 $ 0.29

April 27, 2023 May 26, 2023 June 23, 2023 $ 0.26

May 2, 2024 May 24, 2024 June 21, 2024 $ 0.29

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

September 15, 2022 September 30, 2022 October 28, 2022 $ 0.23

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

JACOBS SOLUTIONS INC.

2 unchanged sentences

Goodwill and Intangibles

The carrying value of goodwill appearing in the accompanying Consolidated Balance Sheets at June 28, 2024 and September 29, 2023 was as follows (in thousands):

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

The carrying value of goodwill appearing in the accompanying Consolidated Balance Sheets at December 27, 2024 and September 27, 2024 was as follows (in thousands):

Infrastructure & Advanced Facilities PA Consulting Total

Balance September 27, 2024 $ 3,362,760 $ 1,425,421 $ 4,788,181

Foreign currency translation and other ( 20,125 ) ( 84,700 ) ( 104,825 )

Balance June 28, 2024 $ 2,249,839 $ 3,214,630 $ 597,001 $ 1,343,397 $ 7,404,867

The following table provides certain information related to the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets at June 28, 2024 and September 29, 2023 (in thousands):

Balance December 27, 2024 $ 3,342,635 $ 1,340,721 $ 4,683,356

The following table provides certain information related to the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets at December 27, 2024 and September 27, 2024 (in thousands):

Customer Relationships, Contracts and Backlog Developed Technology Trade Names Total

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Amortization ( 32,029 ) ( 2,995 ) ( 3,637 ) ( 38,661 )

Acquired — — 14,000 14,000

Foreign currency translation and other ( 30,198 ) ( 46 ) ( 10,704 ) ( 40,948 )

Balance June 28, 2024 $ 908,271 $ 63,071 $ 185,235 $ 1,156,577

Balance December 27, 2024 $ 589,667 $ 28,474 $ 177,144 $ 795,285

The following table presents estimated amortization expense of intangible assets for the remainder of fiscal 2025 and for the succeeding years.

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Receivables and Contract Assets

The following table presents the components of receivables and contract assets appearing in the accompanying Consolidated Balance Sheets at June 28, 2024 and September 29, 2023, as well as certain other related information (in thousands):

June 28, 2024 September 29, 2023

The following table presents the components of receivables and contract assets appearing in the accompanying Consolidated Balance Sheets at December 27, 2024 and September 27, 2024, as well as certain other related information (in thousands):

December 27, 2024 September 27, 2024

Components of receivables and contract assets:

3 unchanged sentences

Total receivables and contract assets, net $ 2,912,513 $ 2,845,452

Other information about receivables:

Amounts due from the United States federal government, included above, net of contract liabilities $ 806,068 $ 802,566

Amounts billed, net consist of amounts invoiced to clients in accordance with the terms of our client contracts and are shown net of an allowance for expected credit losses.

5 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 June 28, 2024 (in thousands):

The following table presents the Company's roll forward of accumulated other comprehensive income (loss) after-tax as of December 27, 2024 (in thousands):

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

2 unchanged sentences

$ ( 370,937 ) $ ( 369,516 ) $ 41,003 $ ( 699,450 )

Other comprehensive (loss) income ( 5,621 ) 78,985 6,964 80,328

Reclassifications from accumulated other comprehensive income (loss) — — ( 28,789 ) ( 28,789 )

Balance at June 28, 2024

Other comprehensive Income (loss) 23,044 ( 160,148 ) 6,412 ( 130,692 )

Reclassifications from accumulated other comprehensive loss — — ( 2,075 ) ( 2,075 )

Balance at December 27, 2024

$ ( 347,893 ) $ ( 529,664 ) $ 45,340 $ ( 832,217 )

( 1) Included in the overall foreign currency translation adjustment for the nine months ended June 28, 2024 and June 30, 2023 are $( 9.8 ) million and $( 93.5 ) 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 June 28, 2024 were approximately $ 18.3 million in unrealized gains, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to June 28, 2024.

( 1) Included in the overall foreign currency translation adjustment for the three months ended December 27, 2024 and December 29, 2023 are $( 1.3 ) million and $( 37.7 ) million, respectively, in unrealized 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 27, 2024 were approximately $ 7.0 million in unrealized gains, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to December 27, 2024.

JACOBS SOLUTIONS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The Company’s effective tax rates from continuing operations for the three months ended June 28, 2024 and June 30, 2023 were 30.0 % and 23.9 %, respectively.

The Company’s effective tax rates from continuing operations for the three months ended December 27, 2024 and December 29, 2023 were 107.5 % and ( 30.6 )%, 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 June 28, 2024 were U.S.

federal corporate tax rate of 21.0% and the Company's effective tax rate for the three-month period ended December 27, 2024 was due to $ 37.0 million in unfavorable tax impacts associated with the non-deductibility of losses from our investment in Amentum stock, as well as U.S.

state income tax expense of $ 5.4 million and U.S.

tax on foreign earnings of $ 10.5 million, and income tax expense of $ 10.6 million related to foreign exchange gains associated with a change in assertion on intercompany loans that were previously deemed indefinitely reinvested.

state income tax and U.S.

tax on foreign earnings of $ 4.9 million.

The U.S state income tax and U.S.

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

These expense items were partly offset by a return-to-provision income tax benefit of $ 7.9 million, mainly attributable to additional research and development credits claimed on the U.S.

federal tax return.

For the three months ended June 30, 2023, the main differences compared to the U.S.

federal statutory rate were attributable to U.S.

state income tax expense of $ 5.3 million and U.S.

tax on foreign earnings of $ 5.4 million, partly offset by a $ 3.5 million tax benefit for the release of previously valued foreign tax credits.

The Company's effective tax rates from continuing operations for the nine months ended June 28, 2024 and June 30, 2023 were 18.7 % and 18.2 %, 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 nine-month period ended June 28, 2024 is 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 $ 11.7 million, U.S.

tax on foreign earnings of $ 19.1 million, and income tax expense of $ 10.6 million related to foreign exchange gains associated with a change in assertion on intercompany loans that were previously deemed indefinitely reinvested.

state income tax and U.S.

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

For the nine months ended June 30, 2023, the main differences compared to the U.S.

federal statutory rate were associated with net tax benefits of $ 39.4 million which were mostly related to uncertain tax positions in the U.S.

that were effectively settled, of which $ 30.8 million related to positions carried forward from the fiscal 2018 acquisition of CH2M Hill Companies Ltd., as well as a tax benefit of $ 12.1 million for the release of previously valued foreign tax credits.

These benefits were partly offset by U.S.

state income tax expense of $ 15.8 million and U.S.

tax on foreign earnings of $ 13.6 million.

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

tax purposes, which resulted in the derecognition of a deferred tax liability and yielded a discrete income tax benefit of $ 61.6 million as the Company asserted that a component of the investment will be indefinitely reinvested.

In December 2021, the Organization for Economic Cooperation and Development ("OECD") released the Pillar Two Model Rules (also referred to as the global minimum tax or Global Anti-Base Erosion "GloBE" rules), which were designed to ensure large multinational enterprises pay a minimum 15 percent level of tax on the income arising in each jurisdiction in which they operate.

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The Company is continually monitoring developments and evaluating the potential impacts.

At this time, the Company does not anticipate a material tax charge as a result of implementation of these rules.

At this time, implementation of these rules has not generated a material impact on consolidated income taxes.

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 $ 406.4 million and $ 246.8 million, respectively, as of June 28, 2024 and $ 424.2 million and $ 279.8 million, respectively, as of September 29, 2023.

F or the Company's consolidated variable interest entities ("VIE") joint ventures, the carrying value of assets and liabilities was $ 172.8 million and $ 125.0 million, respectively, as of December 27, 2024 and $ 161.9 million and $ 122.7 million, respectively, as of September 27, 2024.

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 $ 143.8 million and $ 134.3 million, respectively, as of June 28, 2024, 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 $ 133.2 million and $ 123.7 million, respectively, as of December 27, 2024, and $ 138.8 million and $ 138.0 million, respectively, as of September 27, 2024.

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 27, 2024 and September 27, 2024 were $ 36.5 million and $ 36.6 million, respectively.

Additionally, income from equity method joint ventures (reported in Revenue) was $ 3.7 million and $ 2.7 million, respectively, during the three months ended December 27, 2024 and December 29, 2023.

As of December 27, 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 $ 18.0 million and $ 12.3 million as of December 27, 2024 and September 27, 2024, respectively.

JACOBS SOLUTIONS INC.

1 unchanged sentence

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

Miscellaneous) as of June 28, 2024 and September 29, 2023 were $ 61.0 million and $ 49.6 million, respectively.

Additionally, income from equity method joint ventures (reported in Revenue) was $ 12.5 million and $ 7.6 million, respectively, during the three months ended June 28, 2024 and June 30, 2023, with $ 38 million and $ 25.1 million, respectively, for the corresponding nine-month periods.

As of June 28, 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 $ 18.0 million and $ 16.1 million as of June 28, 2024 and September 29, 2023, respectively.

At June 28, 2024 and September 29, 2023, long-term debt consisted of the following (principal amounts in thousands):

Interest Rate Maturity June 28, 2024 September 29, 2023

At December 27, 2024 and September 27, 2024, long-term debt consisted of the following (principal amounts in thousands):

Interest Rate Maturity December 27, 2024 September 27, 2024

Revolving Credit Facility Benchmark + applicable margin (1) (2) February 2028 $ 508,000 $ 140,000

3 unchanged sentences

September 2025 818,545 870,415

2020 Term Loan Facility Benchmark + applicable margin (1) (4)

March 2025 (6) 824,060 854,246

5.9 % Bonds, due 2033

6 unchanged sentences

(1) During the year ended September 27, 2024, the aggregate principal amounts denominated in U.S.

dollars under the Revolving Credit Facility, the 2021 Term Loan Facility and the 2020 Term Loan Facility (each as defined below) transitioned from underlying LIBOR benchmarked rates to the Term Secured Overnight Financing Rate ("SOFR").

During fiscal 2022, the aggregate principal amounts denominated in British pounds under the Revolving Credit Facility, 2021 Term Loan Facility and 2020 Term Loan Facility transitioned from underlying LIBOR benchmarked rates to Sterling Overnight Index Average ("SONIA") rates.

dollars under the Revolving Credit Facility and the 2021 Term Loan Facility (each as defined below) transitioned from underlying LIBOR benchmarked rates to the Term Secured Overnight Financing Rate ("SOFR").

During fiscal 2022, the aggregate principal amounts denominated in British pounds under the Revolving Credit Facility, 2021 Term Loan Facility transitioned from underlying LIBOR benchmarked rates to Sterling Overnight Index Average ("SONIA") rates.

(2) Depending on the Company’s Consolidated Leverage Ratio or Debt Rating (each as defined in the Revolving Credit Facility (defined below)), U.S.

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 June 28, 2024 and September 29, 2023 were approximately 4.90 % and 8.75 %.

The applicable SOFR rates, or LIBOR rate for the prior fiscal year end, including applicable margins at December 27, 2024 and September 27, 2024 were approximately 5.61 % and 6.64 %.

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 June 28, 2024.

There were no amounts drawn in British pounds as of December 27, 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.

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

dollars at June 28, 2024 and September 29, 2023 was approximately 6.68 % 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 6.48 % and 6.47 % at June 28, 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.

dollar denominated borrowings under the 2020 Term Loan 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, or LIBOR rate for the prior fiscal year end, including applicable margins for borrowings denominated in U.S.

dollars at June 28, 2024 and September 29,

dollars at December 27, 2024 and September 27, 2024 was approximately 5.80 % and 6.52 %.

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 5.86 % and 6.23 % at December 27, 2024 and September 27, 2024, respectively.

(4) 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.

From and including September 1, 2030 (the “Second Step Up Date”), the interest rate payable on the 5.90 % Bonds will be increased by 12.5 basis points to (x) 6.150 % per annum if the First Step Up Interest Rate was in effect immediately prior to the Second Step Up Date or (y) 6.025 % per annum if the initial interest rate was in effect immediately prior to the Second Step Up Date, unless the Company notifies the Trustee on or before the date that is 15 days prior to the Second Step Up Date that the GHG Emissions Performance Target (as defined in the First Supplemental Indenture) has been satisfied and receives a related assurance letter verifying such compliance.

(5) Balance as of December 27, 2024 and September 27, 2024 is associated with the September 1, 2025 scheduled maturity of the 2021 Term Loan Facility, which was reclassified from lon g-term debt in September 2024 .

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

At December 27, 2024, the fair value of the 5.90 % Bonds and the 6.35 % bonds is estimated to be $ 503.0 million and $ 624.2 million , respectively, based on Level 2 inputs.

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

JACOBS SOLUTIONS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

2023 were approximately 6.69 % 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.

(6) Balance as of June 28, 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

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During the fourth quarter of fiscal 2023, the Company repaid $ 80.0 million of the USD portion of the 2021 Term Loan Facility.

On March 25, 2020, JEGI and Jacobs U.K., a wholly owned subsidiary of JEGI, entered into a term loan agreement (the "2020 Term Loan Agreement") with a syndicate of banks and financial institutions, which provides for an unsecured term loan facility (the “2020 Term Loan Facility”).

Under the 2020 Term Loan Facility, JEGI borrowed an aggregate principal amount of $ 730.0 million and Jacobs U.K.

borrowed an aggregate principal amount of £ 250.0 million.

In the fourth quarter of fiscal 2022, the Revolving Credit Facility and 2021 Term Loan Facility were amended to permit the Holding Company Reorganization.

On December 20, 2023, the Revolving Credit Facility and 2021 Term Loan Facility were amended to adjust the point in time at which certain compliance thresholds are tested in connection with the Separation Transaction.

On April 10, 2024, the 2021 Term Loan Facility was amended to permit the potential exchange of Jacobs' retained equity stake in the combined company after the Separation Transaction for the effective repayment of a portion of the Term Loan Facility.

We were in compliance with the covenants under the Revolving Credit Facility and 2021 Term Loan Facility at December 27, 2024.

JACOBS SOLUTIONS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

proceeds of the term loans were used to repay an existing term loan with a maturity date of June 2020 and for general corporate purposes.

On February 6, 2023, the 2020 Term Loan Agreement was amended to, among other things:

(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 were reclassified to current maturities of long-term debt in the Company’s March 29, 2024 consolidated balance sheet.

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.

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.

On April 10, 2024, the Term Loan Facilities were amended to permit the potential exchange of Jacobs' retained equity stake in the combined company after the Separation Transaction for the effective repayment of a portion of the Term Loan Facilities.

We were in compliance with the covenants under the Revolving Credit Facility and Term Loan Facilities at June 28, 2024.

5.90 % Bonds, due 2033

3 unchanged sentences

Bank Trust Company, National Association, as trustee (the “Trustee”), as amended and supplemented by the First Supplemental Indenture, dated as of February 16, 2023 (the “First Supplemental Indenture”).

Interest on the 5.90 % Bonds is payable semi-annually in arrears on each March 1 and September 1, commencing on September 1, 2023, until maturity.

Interest on the 5.90 % Bonds is payable semi-annually in arrears on each March 1 and September 1, until maturity.

The 5.90 % Bonds bear interest at 5.90 % per annum, subject to adjustments as discussed in note (5) to the table above.

3 unchanged sentences

6.35 % Bonds, due 2028

JACOBS SOLUTIONS INC.

AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

On August 18, 2023, JEGI completed an offering of $ 600 million aggregate principal amount of 6.35 % Bonds due 2028 (the “ 6.35 % Bonds”).

1 unchanged sentence

The 6.35 % Bonds and the 6.35 % Bonds Guarantee were offered pursuant to a prospectus supplement, dated August 15, 2023, to the prospectus dated February 6, 2023, that forms a part of the Company and JEGI’s automatic shelf registration statement on Form S-3ASR previously filed with the SEC, and were issued pursuant to the Indenture, as amended and supplemented by the Second Supplemental Indenture, dated as of August 18, 2023 (the “Second Supplemental Indenture”).

Interest on the 6.35 % Bonds is payable semi-annually in arrears on each February 18 and August 18, commencing on February 18, 2024, until maturity.

Interest on the 6.35 % Bonds is payable semi-annually in arrears on each February 18 and August 18, until maturity.

The Notes will bear interest at a rate of 6.35 % per annum and will mature on August 18, 2028.

4 unchanged sentences

Other arrangements

During fiscal 2022, the Company entered into two treasury lock agreements with an aggregate notional value of $ 500.0 million to manage its expected interest rate exposure in anticipation of issuing up to $ 500.0 million of fixed rate debt.

On February 13, 2023 and with the issuance of the 5.90 % Bonds, the Company settled these treasury lock agreements.

See Note 17- Commitments and Contingencies and Derivative Financial Instruments for more discussion around this transaction.

During fiscal 2020, the Company entered into interest rate and cross currency derivative contracts to swap a portion of our variable rate debt to fixed rate debt.

See Note 18- Commitments and Contingencies and Derivative Financial Instruments for discussion regarding the Company's derivative instruments.

The Company has issued $ 0.5 million in letters of credit under the Revolving Credit Facility, leaving $ 2.19 billion of available borrowing capacity under the Revolving Credit Facility at June 28, 2024.

In addition, the Company had issued $ 295.6 million under various separate, committed and uncommitted letter-of-credit facilities for issued letters of credit totaling $ 296.1 million at June 28, 2024.

JACOBS SOLUTIONS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The components of lease expense (reflected in selling, general and administrative expenses) for th e three and nine months ended June 28, 2024 and June 30, 2023 were as follows (in thousands):

Three Months Ended Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

The Company has issued $ 0.5 million in letters of credit under the Revolving Credit Facility, leaving $ 1.74 billion of available borrowing capacity under the Revolving Credit Facility at December 27, 2024.

In addition, the Company had issued $ 282.8 million under various separate, committed and uncommitted letter-of-credit facilities for issued letters of credit totaling $ 283.3 million at December 27, 2024.

The components of lease expense (reflected in selling, general and administrative expenses ("SG&A")) for th e three months ended December 27, 2024 and December 29, 2023 were as follows (in thousands):

Three Months Ended

December 27, 2024 December 29, 2023

Lease expense

3 unchanged sentences

Total lease expense $ 30,174 $ 33,343

Supplemental information related to the Company's leases for the nine months ended June 28, 2024 and June 30, 2023 was as follows (in thousands):

Nine Months Ended

June 28, 2024 June 30, 2023

Supplemental information related to the Company's leases for the three months ended December 27, 2024 and December 29, 2023 was as follows (in thousands):

Three Months Ended

December 27, 2024 December 29, 2023

Cash paid for amounts included in the measurements of lease liabilities $ 38,387 $ 39,609

7 unchanged sentences

Less Interest ( 56,567 )

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

During fiscal 2023, as a result of the Company's transformation initiatives, including the changing nature of the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio.

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

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

JACOBS SOLUTIONS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

As a result of the analysis, the Company recognized impairment losses during the nine months ended June 30, 2023 of $ 38.1 million which are included in selling, general, and administrative expenses in the accompanying statement of earnings.

The impairment losses recorded include $ 33.1 million related to the right-of-use lease assets and $ 5.0 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.

The significant assumptions used in estimating fair value include the expected downtime prior to the commencement of future subleases, projected sublease income over the remaining lease periods and discount rates that reflect the level of risk associated with receiving future cash flows.

Pension and Other Postretirement Benefit Plans

The following table presents the components of net periodic pension benefit expense recognized in earnings during the three and nine months ended June 28, 2024 and June 30, 2023 (in thousands):

Three Months Ended Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

The following table presents the components of net periodic pension benefit expense recognized in earnings during the three months ended December 27, 2024 and December 29, 2023 (in thousands):

Three Months Ended

December 27, 2024 December 29, 2023

Service cost $ 2,499 $ 2,261

5 unchanged sentences

The following table presents certain information regarding the Company’s cash contributions to our pension plans for fiscal 2025 (in thousands):

Cash contributions made during the first nine months of fiscal 2024

Cash contributions made during the first three months of fiscal 2025

Cash contributions projected for the remainder of fiscal 2025

Total $ 35,642

Discontinued Operations

Separation of Critical Mission Solutions (“CMS”) and Cyber & Intelligence (“C&I”) Businesses

On September 27, 2024, Jacobs completed the previously announced Reverse Morris Trust transaction pursuant to which (i) Jacobs first transferred its CMS and portions of its DVS business to Amazon Holdco Inc., a Delaware corporation ("SpinCo"), which has since been renamed Amentum Holdings, Inc., (ii) Jacobs then effectuated a spin-off of SpinCo by distributing 124,084,108 shares of SpinCo Common Stock, by way of a pro rata distribution to its shareholders such that each holder of shares of Jacobs Common Stock was entitled to receive one share of SpinCo Common Stock for each share of Jacobs common stock held as of the record date, September 23, 2024, and (iii) finally, Amentum Parent Holdings LLC merged with and into SpinCo, with SpinCo surviving the merger.

Amentum Holdings, Inc., as the surviving entity of the Separation Transaction is now an independent public company with common stock listed on the New York Stock Exchange under the symbol “AMTM” (“Amentum”).

In connection and in accordance with the terms of the Separation Transaction, prior to the Distribution and the Merger, Jacobs received a cash payment from SpinCo of approximately $ 911 million, after adjustments based on the levels of cash, debt and working capital in the SpinCo Business, which continues to be subject to final settlement between the parties, as set forth in the Agreement and Plan of Merger, dated as of November 20, 2023 (as amended, the “Merger Agreement").

JACOBS SOLUTIONS INC.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Summarized Financial Information of Discontinued Operations

The following table represents earnings from discontinued operations, net of tax (in thousands):

Three Months Ended

December 27, 2024 December 29, 2023

Revenues $ 64 $ 1,348,998

Direct cost of contracts ( 60 ) ( 1,163,190 )

Gross profit 4 185,808

Selling, general and administrative expense ( 1,348 ) ( 123,745 )

Operating (Loss) Profit

( 1,344 ) 62,063

Other income, net

(Loss) Earnings Before Taxes from Discontinued Operations

( 1,344 ) 62,545

Income Tax Benefit (Expense)

343 ( 15,332 )

Net (Loss) Earnings of the Group from Discontinued Operations

( 1,001 ) 47,213

Net Earnings Attributable to Noncontrolling Interests from Discontinued Operations

Net (Loss) Earnings Attributable to Jacobs from Discontinued Operations

$ ( 1,001 ) $ 43,838

Notable components included in our Consolidated Statements of Cash Flows for these discontinued operations are as follows (in thousands):

For the Three Months Ended

December 27, 2024 December 29, 2023

Depreciation and amortization:

Property, equipment and improvements $ — $ 3,475

Intangible assets $ — $ 14,187

Deferred income taxes $ — $ ( 6,206 )

Additions to property and equipment $ — $ ( 2,340 )

There were no assets and liabilities held for spin as of September 27, 2024.

Investment in Amentum Stock

As a result of the Separation Transaction on September 27, 2024, Jacobs held approximately 29 million of the outstanding shares of AMTM common stock initially recorded on a net book value basis under spin-off accounting rules.

Following the Merger and in accordance with the Escrow Agreement, Jacobs transferred 11 million shares of AMTM shares into escrow to be held and distributed between the parties to the Escrow Agreement based on terms and conditions set forth in the Merger Agreement, with final settlement of the shares between the parties (and associated financial statement impacts, if any) expected to be completed in fiscal 2025.

To the extent the Company and its shareholders become entitled to any portion of the contingent consideration, the first 0.5% of the outstanding shares of AMTM will be released from escrow and delivered to the Company.

Any further contingent consideration to which we and our shareholders may become entitled will be distributed on a pro rata basis to shareholders as of a record date to be determined in the future.

Any shares of contingent consideration to which we and our shareholders do not become entitled to receive will be delivered to the former equity holder of Amentum.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The Company's investment in AMTM shares (including shares held in escrow) is measured at fair value through net income as it is an investment in equity securities with a readily determinable fair value of approximately $ 597.9 million as of December 27, 2024.

Additionally, fair value ("market") mark-to market losses of approximately $ 145.2 million were recorded in Miscellaneous income (expense), net during the first quarter of fiscal 2025 in association with the total AMTM share positions held.

Further, as quoted market prices are available for these securities in an active market, the fair value measurement of the shares is categorized as a Level 1 input.

The Company intends to dispose of all of its final determined investment in AMTM shares within 12 months of the completion of the Separation and the Distribution, but there can be no assurance regarding the ultimate timing of such divestiture.

The Company cannot predict the trading price of shares of Amentum’s common stock and the market value of the Amentum shares are subject to market volatility and other factors outside of our control.

Unanticipated developments could delay, prevent or otherwise adversely affect the divestiture, including but not limited to financial market conditions.

Transition Services Agreement

Upon closing of the Separation Transaction, the Company entered into a Transition Services Agreement (the "TSA") with Amentum pursuant to which the Company, on an interim basis, will provide various services to Amentum including corporate, information technology, and project services.

The initial term of the TSA began immediately following the closing of the transaction on September 27, 2024 and expires in September 2025.

Pursuant to the terms of the TSA, the Company will receive payments for the interim services.

Since inception of the TSA agreement, the Company has recognized costs recorded in SG&A expense incurred to perform the TSA, offset by $ 11.4 million in TSA related income for such services that is reported in miscellaneous income (expense) for the three month period ended December 27, 2024.

Sale of Energy, Chemicals and Resources ("ECR") Business

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

For the three months ended December 27, 2024 and December 29, 2023, $ 0 and $( 0.6 ) million were reported in Net Earnings Attributable to Jacobs from Discontinued Operations on the Consolidated Statement of Earnings related to ECR.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

PA Consulting Redeemable Noncontrolling Interests

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

PA Consulting is accounted for as a consolidated subsidiary and as a separate operating segment.

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 nine months of 2024 and 2023, PA Consulting repurchased certain shares of the redeemable noncontrolling interest holders for cash amounts of $ 41.8 million and $ 90.4 million, respectively.

In connection with the Company's strategic investment in PA Consulting, 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 2025 and 2024, PA Consulting repurchased certain shares of the redeemable noncontrolling interest holders for cash amounts of $ 3.7 million and $ 24.4 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 out standing ownership of PA Consulting as of June 28, 2024 and September 29, 2023, respectively.

During the first nine months of 2024, the Company recognized approximately $ 1.7 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 approximately 70 % of the out standing ownership of PA Consulting as of December 27, 2024 and September 27, 2024.

During the first quarter of 2025, there was a $ 0.04 increase in earnings per share resulting from adjustments to the redeemable noncontrolling interests to reflect the reduction of the excess in the redemption values over fair values of the B common shares component of the redeemable equity.

During the first quarter of 2024, there was a $ 0.01 increase in earnings per share resulting from redemption value adjustments associated with redeemable noncontrolling interests preference share repurchase and reissuance activities that were recorded.

The changes above 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 nine months ended June 28, 2024 are as follows (in thousands):

Changes in the redeemable noncontrolling interests d uring the three months ended December 27, 2024 are as follows (in thousands):

Balance at September 27, 2024 $ 820,182

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Repurchase of redeemable noncontrolling interests ( 4,712 )

Issuance of redeemable noncontrolling interests 22,586

Cumulative translation adjustment and other ( 27,870 )

Balance at June 28, 2024 $ 734,465

Balance at December 27, 2024 $ 794,593

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 nine months of fiscal 2024 and 2023, the Company recorded $ 11.5 million and $ 5.1 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 $ 3.6 million and $ 2.8 million at June 28, 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.

During the first three months of fiscal 2025 and 2024, the Company recorded $ 5.9 million and $ 1.6 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 $ 0.8 million and $ 2.1 million at December 27, 2024 and September 27, 2024, respectively, in cash that is restricted from general use and is included in Prepaid expenses and other in the Company's Consolidated Balance Sheets.

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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 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.

(“BlackLynx”) in November 2021, and (ii) StreetLight Data, Inc.

(“StreetLight”) in February 2022.

Also, during fiscal 2022 and continuing into fiscal 2023, the Company implemented further real estate rescaling efforts that were associated with its fiscal 2020 transformation program relating to real estate and other staffing initiatives.

These initiatives are substantially complete.

During the fiscal year ended October 1, 2021, the Company recorded other-than-temporary impairment charges on its equity method investment in AWE Management Ltd (“AWE”) which were included in miscellaneous income (expense), net in the consolidated statement of earnings.

During fiscal year 2022, the contractual operating arrangement with UK Ministry of Defence was terminated which has resulted in the wind down and full impairment of the AWE Joint Venture with immaterial activity expected going forward.

During fiscal 2021, the Company implemented certain integration initiatives associated with our PA Consulting investment.

The activities are substantially completed.

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 dedicated internal personnel and other related costs dedicated to the Company’s ECR-business separation.

The activities of these initiatives have been substantially completed.

As part of the Company's acquisition of CH2M Hill Companies, Ltd.

("CH2M") during fiscal 2018, the Company implemented certain restructuring plans that were comprised mainly of severance and lease abandonment programs as well as integration activities involving the engagement of professional services and internal personnel dedicated to the Company's integration management efforts.

The activities of these initiatives have been substantially completed.

Restructuring initiatives were also implemented during fiscal 2023 relating to our investment in PA Consulting, which is substantially completed.

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

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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 and nine months ended June 28, 2024 and June 30, 2023 (in thousands):

Three Months Ended Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Critical Mission Solutions $ 5,801 $ ( 1,128 ) $ 12,702 $ 2,136

People & Places Solutions 11,415 703 25,199 33,889

Divergent Solutions 2,348 100 4,075 5,312

The following table summarizes the impacts of the Restructuring and other charges by operating segment for the three months ended December 27, 2024 and December 29, 2023 (in thousands):

Three Months Ended

December 27, 2024 December 29, 2023

Infrastructure & Advanced Facilities $ 14,976 $ 37,179

PA Consulting ( 236 ) 1,175

Corporate 35,323 14,109 92,049 19,731

Total $ 14,740 $ 38,354

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$ 14,740 $ 38,354

Other Income, net — ( 272 ) — ( 933 )

$ 14,740 $ 38,354

(1) The three and nine months ended June 28, 2024 included approximately $ 54.8 million and $ 133.9 million, respectively, in restructuring and other charges mainly relating to the Separation Transaction (primarily professional services and employee separation costs).

Included in the three and nine months ended June 30, 2023 were $ 17.2 million in restructuring and other charges relating to the Company's investment in PA Consulting (primarily employee separation costs) and $ 13.4 million in separation activities (mainly professional services) relating to the Separation Transaction.

The nine months ended June 30, 2023 in cluded approximately $ 40.0 million in charges associated mainly with real estate impairments and related charges.

The activity in the Company’s accruals for Restructuring and other charges for the nine months ended June 28, 2024 is as follows (in thousands):

(1) The three months ended December 27, 2024 and December 29, 2023 included approximate ly $ 15.0 million and $ 37.1 million, respectively, in restructuring and other charges mainly relating to the Separation Transaction (primarily professional services and employee separation costs).

The activity in the Company’s accruals for Restructuring and other charges for the three months ended December 27, 2024 is as follows (in thousands):

Balance at September 27, 2024

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Payments and other ( 42,742 )

Balance at June 28, 2024 $ 63,795

(1) Excludes other net charges associated mainly with the real estate related impairments during the nine months ended June 28, 2024.

The following table summarizes the Restructuring and other charges by major type of costs for the three and nine months ended June 28, 2024 and June 30, 2023 (in thousands):

Three Months Ended Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

Balance at December 27, 2024 $ 16,933

The following table summarizes the Restructuring and other charges by major type of costs for the three months ended December 27, 2024 and December 29, 2023 (in thousands):

Three Months Ended

December 27, 2024 December 29, 2023

Lease Abandonments and Impairments $ — $ 49

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11,412 23,793

5,801 16 18,432 40

Total $ 14,740 $ 38,354

(1) Amounts in the three and nine months ended June 28, 2024 are comprised of outside services relating to the Separation Transaction.

(2) Amounts in the three and nine months ended June 28, 2024 are comprised of charges relating to the Separation Transaction.

(1) Amounts in the three months ended December 27, 2024 and December 29, 2023 are comprised of professional services relating to the Separation Transaction.

(2) Amounts in the three months ended December 27, 2024 and December 29, 2023 are comprised of charges relating to the Separation Transaction.

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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 June 28, 2024 are as follows (in thousands):

Lease Abandonments and Impairments $ 432,773

Cumulative amounts incurred to date for restructuring and other programs that were active as of December 27, 2024 by each major type of cost are as follows (in thousands):

Terminations $ 79,673

Outside Services 145,488

Other 214,366

Total $ 224,004

(1) Cumulative amount includes a $ 35.2 million realized gain on interest rate swaps settled during the fourth quarter of fiscal 2024.

Commitments and Contingencies and Derivative Financial Instruments

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During fiscal 2022, the Company entered into two treasury lock agreements with a total notional value of $ 500 million to manage its interest rate exposure to the anticipated issuance of fixed rate debt before December 2023.

On February 13, 2023, the Company settled these treasury lock agreements and issued the 5.90 % Bonds in the aggregate principal amount of $ 500 million, which resulted in the receipt of cash and a gain of $ 37.4 million, before tax, which is being amortized to interest expense and recognized over the term of the 5.90 % Bonds.

On February 13, 2023, the Company settled these treasury lock agreements and issued the 5.90 % Bonds in the aggregate principal amount of $ 500 million, which resulted in the receipt of cash and a pre-tax gain of $ 37.4 million, which is being amortized to interest expense and recognized over the term of the 5.90 % Bonds.

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

The unrealized net gain on these instruments was $ 24.3 million and $ 26.5 million, net of tax, and is included in accumulated other comprehensive income as of June 28, 2024 and September 29, 2023, respectively.

In fiscal 2020 we entered into interest rate swap agreements with a notio nal val ue of $ 746.2 million as of June 28, 2024 to manage the interest rate exposure on our variable rate loans.

The unrealized net gain on these instruments was $ 23.0 million and $ 23.6 million, net of tax, and is included in accumulated other comprehensive income as of December 27, 2024 and September 27, 2024, respectively.

In fiscal 2020 we entered into interest rate swap agreements 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 June 28, 2024 was $ 76.4 million of which $ 66.7 million is included within miscellaneous other assets and $ 9.7 million is included within current assets on the consolidated balance sheet as of June 28, 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 June 28, 2024 and September 29, 2023 was $ 57.5 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, 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.

As of December 27, 2024 and September 27, 2024, the Company has one outstanding instrument with a notional value of $ 200.0 million.

The fair value of the interest rate swap at December 27, 2024 and September 27, 2024 was $ 29.8 million and $ 23.0 million, respectively, included within miscellaneous other assets on the consolidated balance sheet.

The unrealized net gain on the interest rate swap as of December 27, 2024 and September 27, 2024 was $ 22.4 million and $ 17.4 million, respectively, net of tax, and was included in accumulated other comprehensive income.

During fiscal 2023, the aggregate liability amounts denominated in U.S.

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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, Australian Dollar, Euro and other currencies, with notional values of $ 1,056.6 million at June 28, 2024 and $ 857.7 million at September 29, 2023.

The length of these contracts currently ranges from one week to 7 months.

The fair value of the foreign exchange contracts at June 28, 2024 was $( 1.9 ) million, of which $( 2.6 ) million is included within current liabilities and $ 0.7 million is included within current assets on the consolidated balance sheet as of June 28, 2024.

Additionally, the Company held foreign exchange forward contracts in currencies that support our operations, including British Pound, Australian Dollar and other currencies, with notional values of $ 693.4 million at December 27, 2024 and $ 827.3 million at September 27, 2024.

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

The fair value of the foreign exchange contracts at December 27, 2024 was $( 7.8 ) million , of which $( 8.2 ) million is included within current liabilities and $ 0.4 million is included within current assets on the consolidated balance sheet as of December 27, 2024.

The fair value of the contracts as of September 27, 2024 was $ 15.3 million, of which $ 15.8 million is included within current assets and $( 0.5 ) million is included within current liabilities on the consolidated balance sheet as of September 27, 2024.

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

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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.

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We have not experienced credit losses from our counterparties.

Contractual Guarantees and Insurance

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Contractual Guarantees, Legal Proceedings, Claims, Investigations and Insurance

In the normal course of business, we make contractual commitments (some of which are supported by separate guarantees) and on occasion we are a party in a litigation or arbitration proceeding.

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

At June 28, 2024 and September 29, 2023, the Company had issued and outstanding approximately $ 296.1 million and $ 322.0 million, respectively, in LOCs and $ 2.1 billion and $ 2.0 billion, respectively, in surety bonds.

At December 27, 2024 and September 27, 2024, the Company had issued and outstanding approximately $ 283.3 million and $ 306.2 million, respectively, in LOCs and $ 2.6 billion and $ 2.3 billion, respectively, in surety bonds.

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Litigation and Investigations

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

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

The Consortium was awarded a subcontract by JKC Australia LNG Pty Limited ("JKC") for the engineering, procurement, construction and commissioning of a 360 MW Combined Cycle Power Plant for INPEX Operations Australia Pty Limited at Blaydin Point, Darwin, NT, Australia (the "Legacy CH2M Matter").

The subcontract was terminated in January 2017.

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

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

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

As a result of the settlement agreement, additional pre-tax charges of $ 91.3 million were recorded during the year ended September 30, 2022 for this matter (over amounts previously reserved and reported in long-term Other Deferred Liabilities in the Company's Consolidated Balance Sheet).

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

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

In February 2009, TVA awarded a contract to the Company to provide project management services associated with the clean-up.

All remediation and dredging were completed in August 2013 by other contractors under direct contracts with TVA.

The Company did not perform the remediation, and its scope was limited to program management services.

Certain employees of the contractors performing the cleanup work on the project filed lawsuits against the Company beginning in August 2013, alleging they were injured due to the Company's failure to protect the plaintiffs from exposure to fly ash, and asserting related personal injuries.

The primary case, Greg Adkisson, et al.

Jacobs Engineering Group Inc., case No.

3:13-CV-505-TAV-HBG, filed in the U.S.

District Court for the Eastern District of Tennessee, consisted of 10 consolidated cases.

This case and the related cases involved several hundred plaintiffs that were employees of the contractors that completed the remediation and dredging work.

In the second quarter of fiscal 2023, the Company entered into a settlement agreement with the plaintiffs whose cases had not been previously dismissed.

As of the third quarter of fiscal 2023, all conditions to the settlement had been satisfied, and the cases dismissed.

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, which was collected during first half of fiscal 2023 .

Segment Information

The Company's four operating segments are comprised of its two global lines of business ("LOBs"):

Critical Mission Solutions ("CMS") and People & Places Solutions ("P&PS"), its business unit Divergent Solutions ("DVS") and its majority investment in PA Consulting.

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

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

In addition, a portion of the costs of other support functions (e.g., finance, legal, human resources, and information technology) is allocated to each segment using methodologies which, we believe, effectively attribute the cost of these support functions to the revenue generating activities of the Company on a rational basis.

The cost of the Company’s cash incentive plan, the Leadership Performance Plan ("LPP"), formerly named the Management Incentive Plan, and the expense associated with the Jacobs 1999 Stock Incentive Plan, which was amended and restated in the second quarter of 2023 and is now referred to as the Jacobs 2023 Stock Incentive Plan (the "2023 SIP") have likewise been charged to the segments except for those amounts determined to relate to the business as a whole (which amounts remain in other corporate expenses).

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

The CODM evaluates the operating performance of our operating segments using segment operating profit, which is defined as margin less “corporate charges” (e.g., the allocated amounts described above).

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 Company's two operating segments are comprised of Infrastructure and Advanced Facilities ("I&AF") and its majority investment in PA Consulting.

Subsequent to the Separation Transaction, the SpinCo businesses are now presented as discontinued operations for all periods and therefore not reflected in the segment disclosures below.

For further information, refer to Note 15- Discontinued Operations .

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

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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

The CODM evaluates the operating performance of our operating segments using segment operating profit.

The Company incurs certain 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 17- Restructuring and Other Charges ) and transaction and integration costs (in thousands).

For the Three Months Ended For the Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

For the Three Months Ended

December 27, 2024 December 29, 2023

Revenues from External Customers:

Critical Mission Solutions $ 1,155,806 $ 1,190,845 $ 3,513,635 $ 3,457,076

People & Places Solutions 2,564,698 2,469,694 7,556,999 7,041,744

Divergent Solutions 222,805 239,289 701,025 694,978

Infrastructure & Advanced Facilities $ 2,626,208 $ 2,504,226

PA Consulting 306,748 306,001

Total $ 2,932,956 $ 2,810,227

For the Three Months Ended For the Nine Months Ended

June 28, 2024 June 30, 2023 June 28, 2024 June 30, 2023

For the Three Months Ended

December 27, 2024 December 29, 2023

Segment Operating Profit:

Critical Mission Solutions $ 100,318 $ 99,141 $ 297,373 $ 275,304

People & Places Solutions 271,157 242,673 763,919 701,498

Divergent Solutions (1)

12,394 20,794 38,951 57,623

Infrastructure & Advanced Facilities (1) $ 157,776 $ 128,892

PA Consulting 66,738 54,455

Total Segment Operating Profit 224,514 183,347

Other Corporate Expenses (2)

( 118,040 ) ( 118,486 ) ( 356,413 ) ( 319,796 )

Restructuring, Transaction and Other Charges (2)

1 unchanged sentence

GAAP Operating Profit 208,418 142,000

Total Other Expense, net

Total Other (Expense) Income, net (3)

( 155,271 ) ( 38,795 )

Earnings from Continuing Operations Before Taxes $ 53,147 $ 103,205

(1) For the nine months ended June 28, 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 $ 52.5 million and $ 52.0 million for the three months ended June 28, 2024 and June 30, 2023, respectively, and $ 156.3 million and $ 152.2 million for the nine months ended June 28, 2024 and June 30, 2023, respectively, along with an approximately $ 11.0 million intangibles impairment charge in the nine month period ended June 28, 2024.

Additionally, the comparison of the nine 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 and nine months ended June 28, 2024 included $ 54.8 million and $ 133.9 million, respectively, in restructuring and other charges and $ 7.1 million and $ 26.5 million, respectively, of transaction charges, mainly relating to the Separation Transaction (primarily professional services and employee separation costs).

The three and nine months ended June 30, 2023 included $ 17.2 million in restructuring and other charges relating to the Company's investment in PA Consulting (primarily employee separation costs) and $ 13.4 million relating to the separation activities (mainly professional services) around the Separation Transaction, and the nine months ended June 30, 2023 included $ 38.1 million 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.

Such costs and expenses include:

(i) those elements of SG&A expenses relating to the business as a whole;

(ii) those elements of our incentive compensation plans relating to corporate personnel whose other compensation costs are not allocated to the LOBs;

(iii) the amortization of intangible assets acquired as part of business combinations;

(iv) the quarterly variances between the Company’s actual costs of certain of its self-insured integrated risk and employee benefit programs and amounts charged to the LOBs;

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.

(1) Segment operating profit for Infrastructure & Advanced Facilities includes consolidated intangibles amortization of $ 38.7 million and $ 36.9 million and other corporate transaction related costs for the three months ended December 27, 2024 and December 29, 2023, respectively.

Excluding these amounts, operating profit for the segment was $ 210.3 million and $ 167.4 million, respectively.

(2) The three months ended December 27, 2024 and December 29, 2023 included $ 15.0 million and $ 37.1 million , respectively, of restructuring and other charges mainly relating to the Separation Transaction (primarily professional services and employee separation costs).

(3) The three months ended December 27, 2024 included $ 145.2 million in mark-to-market losses associated with our investment in Amentum stock in connection with the Separation Transaction.

See also the further description o f results of operations for our operating segments in Item 2- Management’s Discussion and Analysis of Financial Condition and Results of Operations .

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