What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-02-04 compared with 2024-08-06 · 200 added, 267 removed, 129 unchanged (78% of the section changed)

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

The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition from the most recent fiscal year-end to June 28, 2024 and (ii) results of operations during the current fiscal period(s) as compared to the corresponding period(s) of the preceding fiscal year.

The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to provide a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition from the most recent fiscal year-end to December 27, 2024 and (ii) results of operations during the current fiscal period(s) as compared to the corresponding period(s) of the preceding fiscal year.

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

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

Examples of forward-looking statements include, but are not limited to, statements we make concerning the financial condition and results of operations and our expectations as to our future growth, prospects, financial outlook and business strategy for fiscal year 2024 or future fiscal years, including our expectations for the timing of completion of restructuring activities and savings to be realized from such activities, as well as the expected timing for closing the Separation Transaction, and any assumptions underlying any of the foregoing.

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

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

Such factors include the possibility that closing conditions for the Separation Transaction may not be satisfied or waived, on a timely basis or otherwise, uncertainties as to the impact of the Separation Transaction on Jacobs' and the combined company's businesses if the transaction is completed, including a possible impact on Jacobs' credit profile and a possible decrease in the trading price of Jacobs' and/or the combined company's shares, the possibility that the Separation Transaction, if completed, may not qualify for the expected tax treatment, the ability to obtain all required regulatory approvals, the risk that any consents or approvals required in connection with the Separation Transaction may not be received, the risk that the Separation Transaction may not be completed on the terms or in the time frame expected by the parties, uncertainties as to our and our stockholders' respective ownership percentages of the combined company and the value to be derived from the disposition of Jacobs’ stake in the combined company, unexpected costs, charges or expenses resulting from the Separation Transaction, business and management strategies and the growth expectations of the combined company, the inability of Jacobs' and the combined company to retain and hire key personnel, customers or suppliers while the Separation Transaction is pending or after it is completed, and the ability of the Company to eliminate all stranded costs, as well as other factors related to our business, such as our ability to fully execute on our three-year corporate strategy, including our ability to invest in the tools needed to implement our strategy, competition from existing and future competitors in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses, the impact of acquisitions, strategic alliances, divestitures, and other strategic events resulting from evolving business strategies, including on the Company’s ability to maintain its culture and retain key personnel, the impact of any pandemic, and any resulting economic downturn on our results, prospects and opportunities, measures or restrictions imposed by governments and health officials in response to the pandemic, the timing of the award of projects and funding and potential changes to the amounts provided for, under the Infrastructure Investment and Jobs Act, as well as other legislation related to governmental spending, any changes in U.S.

or foreign tax laws, statutes, rules, regulations or ordinances that may adversely impact our future financial positions or results of operations, financial market risks that may affect the Company, including by affecting the Company's access to capital, the cost of such capital and/or the Company's funding obligations under defined benefit pension and postretirement plans, as well as general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets, instability in the banking industry, or the impact of a possible recession or economic downturn on our results, prospects and opportunities, and geopolitical events and conflicts, among

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

the inability of our clients to meet their payment obligations in a timely manner or at all;

potential issues and risks related to a significant portion of our employees working remotely;

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

difficulties associated with retaining and hiring additional employees;

and the inability of governments in certain of the countries in which we operate to effectively mitigate the financial or other impacts of any future pandemics or infectious disease outbreaks on their economies and workforces and our operations therein.

Such factors include but are not limited to:

• general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets and stock market volatility, instability in the banking industry, labor shortages, or the impact of a possible recession or economic downturn or changes to monetary or fiscal policies or priorities in the U.S.

and the countries where we do business on our results, prospects and opportunities;

• competition from existing and future competitors in our target markets, as well as the possible reduction in demand for certain of our product solutions and services, including delays in the timing of the award of projects or reduction in funding, or the abandonment of ongoing or anticipated projects due to the financial condition of our clients and suppliers or due to governmental budget constraints or changes to governmental budgetary priorities, or the inability of our clients to meet their payment obligations in a timely manner or at all;

• our ability to fully execute on our corporate strategy, including (i) uncertainties as to the impact of the completed Separation Transaction (as defined below) on our business, such as a possible impact on our credit profile or our ability to operate as a separate public-company without the benefit of the resources and capabilities divested as part of the SpinCo Business (as defined below), the possibility that the Separation Transaction will not result in the intended benefits to us or our shareholders, that we will not realize the value expected to be derived from the disposition of our retained stake in Amentum (as defined below), or that we will incur unexpected costs, charges or expenses related to the provision of transition services in connection with the Separation Transaction, (ii) the impact of acquisitions, strategic alliances, divestitures, and other strategic events resulting from evolving business strategies, including on our ability to maintain our culture and retain key personnel, customers or suppliers, or our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, and (iii) our ability to invest in the tools needed to implement our strategy;

• financial market risks that may affect us, including by affecting our access to capital, the cost of such capital and/or our funding obligations under defined benefit pension and post-retirement plans;

• legislative changes, including potential changes to the amounts provided for, under the Infrastructure Investment and Jobs Act, as well as other legislation and executive orders related to governmental spending, and changes in U.S.

or foreign tax laws, statutes, rules, regulations or ordinances, including the impact of, and changes to, tariffs or trade policies that may adversely impact our future financial position or results of operations;

• increased geopolitical uncertainty and risks, including policy risks and potential civil unrest, relating to the outcome of elections across our key markets and elevated geopolitical tension and conflicts, including the Russia-Ukraine and Israel-Hamas conflicts and the escalating tensions in the Middle East, among others;

• the impact of any pandemic, and any resulting economic downturn on our results, prospects and opportunities, measures or restrictions imposed by governments and health officials in response to the pandemic, as well as the inability of governments in certain of the countries in which we operate to effectively mitigate the financial or other impacts of any future pandemics or infectious disease outbreaks on their economies and workforces and our operations therein.

The foregoing factors and potential future developments are inherently uncertain, unpredictable and, in many cases, beyond our control.

For a description of these and additional factors that may occur that could cause actual results to differ from our forward-looking statements, see Item 1A, Risk Factors included in our 2023 Form 10-K and in this Quarterly Report on Form 10-Q.

For a description of these and additional factors that may occur that could cause actual results to differ from our forward-looking statements, see the Company’s filings with the U.S.

Securities and Exchange Commission, including in particular the discussions contained in our fiscal 2024 Form 10-K under Item 1 - Business, Item 1A - Risk Factors, Item 3 - Legal Proceedings, and Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations;

and in this Quarterly Report on Form 10-Q under Part I, Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations, and Part II, Item 1 - Legal Proceedings and Item 1A - Risk Factors.

We undertake no obligation to release publicly any revisions or updates to any forward-looking statements.

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Business Overview

At Jacobs, we’re challenging today to reinvent tomorrow by solving the world’s most critical problems for thriving cities, resilient environments, mission-critical outcomes, operational advancement, scientific discovery and cutting-edge manufacturing, turning abstract ideas into realities that transform the world for good.

Leveraging a talent force of approximately 60,000 , Jacobs provides a full spectrum of professional services including consulting, technical, engineering, scientific and project delivery for the government and private sector.

Over the last seven years, Jacobs has been on a transformation journey, starting with a re-emphasis on business excellence, our culture and brand, and evolving our portfolio to create an inclusive, technology-forward company producing the critical solutions of tomorrow.

At Jacobs, our foundation guides us to create a more connected and sustainable world.

We are challenging today to reinvent tomorrow - delivering outcomes and solutions for the world’s most complex challenges.

With a team of approximately 45,000 , we provide end-to-end services in advanced manufacturing, cities & places, energy, environmental, life sciences, transportation and water markets.

From advisory and consulting, feasibility, planning, design, program and lifecycle management, we are creating a more connected and sustainable world.

Whether tackling water scarcity, aging infrastructure, access to life-saving therapies or sophisticated cyberattacks, we take on some of the world’s biggest challenges, bringing a different way of thinking to everything we do.

We channel our creativity, agility and our domain expertise to create value for our clients and society.

Over the last seven years, Jacobs has been on a transformation journey, starting with a re-emphasis on business excellence, our culture and brand, and evolving our portfolio to become a science-based consulting and advisory solutions provider focused on delivering solutions for some of the world’s most complex sustainability, critical infrastructure and advanced manufacturing challenges.

This transformation included acquiring a 65% stake in PA Consulting Group Limited ("PA Consulting") in fiscal 2021.

Acquisitions of Buffalo Group, BlackLynx and StreetLight further positioned us as a leader in high-value government services and technology-enabled solutions.

Our Boldly Moving Forward strategy announced in March of 2022 provides Jacobs with a three-year strategy that builds on our success over the preceding three years and takes advantage of a new lens crafted from the incredible pace of change in the world and in our markets.

We’re now focused on broadening our leadership in high growth sectors aligned with long-term secular trends, such as infrastructure renewal and investment, and the global transition to more sustainable ways of living.

Our strategy is driven by our purpose to create a more connected, sustainable world and our values.

An extensive evaluation of global trends, capabilities and markets to understand the largest opportunities, projected spend and growth rates identified three growth accelerators:

Climate Response, Data Solutions, and Consulting & Advisory, which cut across our entire organization and key sectors creating connections among global market trends, our client solutions and our company purpose.

Our three growth accelerators are delivering significant value for our clients, positioning Jacobs for high-margin growth while advancing sustainability and social value in the communities where we serve.

Acquisitions of BlackLynx and StreetLight further positioned us as a leader in high-value critical infrastructure and technology-enabled solutions.

In March of 2022, Jacobs launched Boldly Moving Forward, a three-year strategy that builds on our success over the preceding three years to take advantage of a new lens crafted from the incredible pace of change in the world and in our markets.

We are now focused on broadening our leadership in high growth sectors aligned with long-term secular trends, such as infrastructure renewal and investment, and the global transition to more sustainable ways of living.

Our strategy is driven by our purpose to create a more connected, sustainable world, applying our values and delivering on our brand promise of “Challenging today.

Reinventing tomorrow.” Extensive evaluation of global trends, capabilities and markets identified three growth accelerators:

Climate Response, Data Solutions, and Consulting & Advisory, which cut across our entire organization and key sectors creating connections among global market trends, our

client solutions and our company purpose.

Our three growth accelerators are delivering significant value for our clients, positioning Jacobs for high-margin growth while advancing sustainability and social value in our communities.

Today, our clients face a rapidly changing world - navigating multifaceted challenges such as the increasing pace of technological change, budget and supply chain limitations, global climate change events and complex geopolitical conditions.

At Jacobs, we strive to help them meet these challenges.

Climate Response

As a purpose-led company, we know we have a pivotal role to play across the entire Climate Response value chain – focusing on end-to-end solutions in energy transition, decarbonization, adaptation and resilience, and regenerative and nature-based climate solutions.

We consider this not only good business, but our duty to channel our technology-enabled expertise and capabilities toward benefiting people and the planet.

Data Solutions

As our clients navigate multifaceted challenges in a rapidly changing world, we are harnessing our data and digital capabilities, products and tools to help our clients operate more efficiently in a safe environment and capitalize on their data more than ever before.

We're empowering innovation and ingenuity to unlock better outcomes.

We’re investing in big data, artificial intelligence and generative design while building a technology backbone that enables us to add value in a more efficient way.

We are harnessing our data and digital capabilities, products and tools to help our clients operate more efficiently in a safe environment and capitalize on their data more than ever before.

We invest in big data, technology-enhanced and artificial intelligence solutions to help clients find better, safer and more agile ways of working.

We provide solutions in data analytics and insights, digital architecture, advisory and transformation, software development and cybersecurity and operational technology.

Consulting and Advisory

Together with our visionary partner, PA Consulting, we're expanding our position in high-end advisory services and deploying our collective strengths to create significant opportunities for our clients to adapt, innovate and transform.

We're focused on broadening our leadership in sustainable, higher growth, higher value sectors.

As part of our strategy, our brand promise:

"Challenging today.

Reinventing tomorrow." signals our transition to a global technology-forward solutions company.

We began trading as “J” on the New York Stock Exchange in December 2019, and in March 2021 our Global Industry Classifications Standard code changed to Research & Consulting Services.

Our Focus 2023 Transformation Office drove further innovation, delivering value-creating solutions for our clients and leveraging an integrated digital and technology strategy to improve our efficiency and effectiveness, ultimately freeing up valuable time and resources for reinvestment in our people.

In the fourth quarter fiscal 2022, Jacobs Engineering Group Inc.

(the predecessor parent company) created a new holding company, Jacobs Solutions Inc., which became the new parent company of Jacobs Engineering Group Inc.

As a result of the transaction, the predecessor parent company's then-current stockholders automatically became stockholders of Jacobs Solutions Inc., on a one-for-one basis, with the same number of shares and same ownership percentage of the predecessor parent company’s common stock that they held immediately prior to the transaction.

Operating Segments

The services we provide fall into the following two lines of business (LOB):

Critical Mission Solutions (CMS) and People & Places Solutions (P&PS).

Our LOBs, our business unit Divergent Solutions (DVS), which operates as an integrated offering to both LOBs, and a majority investment in PA Consulting (PA) constitute the Company’s reportable segments and are the foundation for how Jacobs helps create a more connected, sustainable world.

The services we provide to our markets fall into the following two operating segments:

1) Infrastructure & Advanced Facilities and 2) our majority investment in PA Consulting.

For additional information regarding our segments, including information about our financial results by segment and financial results by geography, see Note 19- Segment Information and Note 5- Revenue Accounting for Contracts of Notes to Consolidated Financial Statements.

Critical Mission Solutions (CMS)

Jacobs' Critical Mission Solutions line of business provides a full spectrum of solutions for clients to address evolving challenges like information and cyber warfare, digital transformation and modernization, national security and defense, space exploration, digital asset management and the green energy transition.

Our core capabilities include program management and mission operations;

systems digital engineering and mission integration, research, development, test and evaluation;

integration, operation, maintenance and sustainment of systems and facilities;

enterprise-level IT operations and mission IT delivery, software development, and software application integration;

engineering, design and construction of specialized technical facilities and systems;

environmental remediation;

specialized training;

robotics and automation;

and other highly technical consulting solutions.

We deliver these capabilities for government agencies as well as commercial clients in the U.S.

and international markets.

We leverage our deep experience to support clients in the Aerospace, Automotive, Space, Telecom, Intel, Defense and Energy sectors to develop lasting solutions in the communities where we live and work.

CMS is included as part of the Separation Transaction announced on November 20, 2023, which is expected to close in fiscal year 2024, subject to regulatory approvals and other customary closing conditions.

People & Places Solutions (P&PS)

Jacobs' People & Places Solutions line of business provides end-to-end solutions for our clients’ most complex challenges related to climate change, energy transition, connected mobility, integrated water management, pharmaceutical and semi-conductor manufacturing.

In doing so, we combine deep experience in the following end markets - Advanced Manufacturing, Cities & Places, Energy, Environment, Transportation and Water.

Infrastructure & Advanced Facilities (I&AF)

Jacobs' Infrastructure & Advanced Facilities line of business provides end-to-end solutions for our clients’ most complex challenges related to climate change, energy transition, connected mobility, buildings and infrastructure, integrated water management and biopharmaceutical manufacturing.

In doing so, we combine deep experience in the following end markets - Critical Infrastructure, Water & Environmental and Life Sciences & Advanced Manufacturing.

Our core skills revolve around consulting, planning, architecture, design, engineering, infrastructure delivery services including project, program and construction management and long-term operation of facilities.

Solutions are delivered as standalone professional service engagements, comprehensive program management partnerships, and selective progressive design-build and construction management at-risk delivery services.

Increasingly, we use data science and technology-enabled expertise to deliver positive and enduring outcomes for the clients and communities we serve .

Increasingly, we use data science and technology-enabled expertise to deliver positive and enduring outcomes for our clients and communities .

Our clients include national, state and local governments in the U.S., Europe, U.K., Middle East, and Asia Pacific, and multinational and local private sector clients throughout the world.

Divergent Solutions (DVS)

Jacobs’ operating segment, Divergent Solutions, serves as the core foundation for developing and delivering innovative, next-generation cloud, cyber, data and digital technologies.

DVS further strengthens our ability to drive value for clients of both LOBs by leveraging a full spectrum of cyber, data analytics, systems and software application integration services across Jacobs.

Our core capabilities include global strategic alliances, innovation collaboration, next-generation technologies, software and data as a service, and data and secure solutions, all aligned to high-growth verticals of Water, Transportation, Advanced Manufacturing and National Security.

DVS clients include government agencies and commercial clients in the U.S.

and international markets.

The Separation Transaction announced on November 20, 2023 includes portions of DVS, including its Cyber & Intelligence business.

PA Consulting

Jacobs invested in a 65% stake in PA Consulting, the company that is bringing ingenuity to life.

Jacobs invested in a 65% stake in PA Consulting, the global innovation and transformation consultancy firm.

PA Consulting accelerates new growth ideas from concept, through design and development and to commercial success, and revitalizes organizations, building leadership, culture, systems and processes to make innovation a reality.

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PA Consulting has a diverse mix of private and public sector clients.

Private sector clients include global household names like Unilever, and start-ups like PulPac, which converts plant fibers into sustainable packaging to reduce single-use plastic.

From sustainable airports with Amsterdam Airport Schiphol and enhanced home security with ADT, to resilient banking with Bankomat, pioneering medtech with Hubly Surgical, and accelerating the energy transition with Invenergy and energyRe.

Public sector clients include the U.K.'s Ministry of Defence, Norwegian Labour and Welfare Administration, and Danish Tax Agency.

In a fast-moving, complex world, we’re deploying the collective strengths of Jacobs and PA Consulting to create significant opportunities for our clients.

Private sector clients include global household names like Unilever, Microsoft, and Pret A Manger, and start-ups like PulPac, which converts plant fibers into sustainable packaging to reduce single-use plastic.

PA's work includes creating more sustainable airports with Amsterdam Airport Schiphol and accelerating the energy transition with Invenergy and energyRe, to new digital platforms for the American College of Emergency Physicians, pioneering medtech with Hubly Surgical, and resilient banking with Bankomat.

Public sector clients include the U.K.'s Ministry of Defence, National Highways, The Norwegian Labour and Welfare Administration, and The Danish Tax Agency.

The Company is deploying the collective strengths of Jacobs and PA Consulting to create significant opportunities for our clients.

Alongside Copenhagen Metro – one of the most advanced public transport systems in Europe – we’re providing strategic management and technical services to support its operations and maintenance.

We’re also supporting the Frederick Douglass Tunnel program, one of the largest national transportation infrastructure investments in the U.S.

We’re providing technical and commercial advice on the U.K.

Department for Transport’s portfolio of rail and other transport mode agreements, major projects and programs, and its policy and strategic work in transport.

Together, we’re also supporting the U.K.’s Nuclear Decommissioning Authority to transform its approach to asset management, decision-making and planning.

Results of Operations for the three and nine months ended June 28, 2024 and June 30, 2023

Drawing on our extensive experience with Louisiana’s critical state infrastructure, we’re developing a comprehensive offshore wind roadmap for the Louisiana Department of Energy and Natural Resources, U.S.

that aims to promote the state’s energy independence, diversification and security while developing its workforce and local economy.

Supporting the U.K.’s decarbonization and energy security future, we are delivering technical project management support to the U.K.

Department for Energy Security & Net Zero’s Carbon Capture, Usage and Storage program, an essential element of the U.K.’s commitment to deliver a net-zero economy by 2050.

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

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 the 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, which has been 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”).

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”).

As a result of the Separation Transaction, 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 operations and financial results.

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

No amounts remained held for spin at the end of fiscal 2024.

See Note 15- Discontinued Operations .

Prior to the Separation Transaction, Jacobs’ Critical Mission Solutions line of business provided a full spectrum of solutions for clients to address evolving challenges like digital transformation and modernization, national security and defense, space exploration, digital asset management, the clean energy transition, and nuclear decommissioning and cleanup.

Clients included government agencies, as well as private sector clients mainly in the aerospace, automotive, motorsports, energy and telecom sectors.

Prior to the Separation Transaction, the DVS business unit served as the core foundation for developing and delivering innovative, next-generation cloud, cyber, data and digital technologies.

DVS clients included government agencies and commercial clients in the U.S.

and international markets.

Certain portions of the DVS business were retained and are now part of I&AF, which include advising digital strategy and transformation and

developing digital solutions that facilitate capital, operational and cybersecurity decisions for our clients across our segments and their end markets.

Results of Operations for the 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

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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

Overview – Three and Nine Month Periods Ended June 28, 2024

Net earnings attributable to the Company from continuing operations for the third fiscal quarter ended June 28, 2024 were $146.4 million (or $1.17 per diluted share), a decrease of $17.5 million, from net ear nings of $163.9 million (or $1.29 per diluted share) for the corresponding period last year.

Current quarter favorable underlying operating performance compared to the prior year period was more than offset mainly by $68.3 million in pre-tax Restructuring and other charges and transaction costs due primarily to expenses incurred relating to the Separation Transaction (mainly professional services and employee separation costs), compared to fiscal 2023 amounts of $35.2 million mainly associated with the Company's restructuring program charges (primarily employee separation costs within PA Consulting) and expenses incurred relating to the Separation Transaction (mainly professional services), which are discussed in Note 16- Restructuring and Other Charges .

Also, miscellaneous net income (expense) for the three months ended June 28, 2024 was favorably impacted by foreign exchange gains and losses compared to the corresponding period last year.

Further, our reported net earnings for the current year quarter were unfavorably impacted by an increase in income taxes of $13.6 million compared to the fiscal 2023 period, attributable mainly to a tax expense of $10.6 million related to intercompany loans settled in the current period that were previously indefinitely reinvested as discussed in Note 10- Income Taxes .

Finally, earnings attributable to redeemable noncontrolling interests were $3.0 million higher for the three months ended June 28, 2024 due to higher net earnings results in our PA Consulting investment compared to the corresponding period last year.

For the nine months ended June 28, 2024, net earnings attributable to the Company from continuing operations were $481.5 million (or $3.83 per diluted share), a decrease of $35.4 million, from net earnings of $516.9 million (or $4.06 per diluted share) for the corresponding period last year.

Current favorable underlying operating performance compared to the prior year period was more than offset by approximately $175.8 million in pre-tax Restructuring and other charges and transactions costs activities relating to the Separation Transaction for the current fiscal year-to-date period, compared to fiscal 2023 amounts of $38.1 million associated with the Company's transformation initiatives relating to real estate, which are discussed in Note 16- Restructuring and Other Charges .

Further, the 2023 first fiscal quarter included a net favorable impact of approximately $15.0 million in overhead cost reductions associated mainly with one-time benefit program changes, which was offset in part by higher incentive and other compensation charges and higher investments in company technology platforms.

Our reported net earnings for the first nine months of fiscal 2024 were also favorably impacted by lower income taxes of $4.6 million compared to the fiscal 2023 period, due mainly to a deferred income tax benefit of $61.6 million related to Australia in the first quarter of fiscal 2024 and offset in part mainly by U.S.

state income tax expense and U.S.

tax on foreign earnings, combined with other current quarter income tax items further discussed in Note 10- Income Taxes.

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

Overview – Three Months Ended December 27, 2024

Net loss attributable to the Company from continuing operations for the first fiscal quarter of 2025 was $(17.1) million (or $(0.10) per diluted share), a decrease of $145.5 million, from net earnings of $128.3 million (or $1.03 per diluted share) for the corresponding period last year.

Included in the Company’s operating results from continuing operations for the first fiscal quarter of 2025 were $145.2 million in pre-tax fair value losses recorded in miscellaneous (expense) income, net, associated with our investment held in Amentum stock after finalization of the Separation Transaction as well as pre-tax Restructuring and other charges and transaction costs of $16.1 million associated primarily to expenses incurred relating to the Separation Transaction (primarily professional services and employee separation costs), compared to 2024 amounts of $41.4 million, which are discussed in Note 17- Restructuring and Other Charges .

Net loss attributable to the Company from discontinued operations for the first fiscal quarter of 2025 was $(1.0) million (or $(0.01) per diluted share), a decrease of $44.3 million, from net earnings of $43.3 million (or $0.34 per diluted share) for the corresponding period last year.

The change year-over-year was primarily driven by prior year operating results of the SpinCo Business which were divested and therefore are no longer in Company's financial results in fiscal year 2025.

See note 15- Discontinued Operations.

Consolidated Results of Operations

Revenues for the third fiscal quarter of 2024 were $4.23 billion, an increase of $44.9 million, or 1.1%, from $4.19 billion for the corresponding period last year.

For the nine months ended June 28, 2024, revenues were $12.66 billion, an increase of $596.2 million, or 4.9%, from $12.06 billion for the corresponding period last year.

Revenue increases for the quarterly year over year period were due mainly to the Company's P&PS business.

For the nine month periods higher revenue levels in P&PS as well as across our other lines of business contributed to our favorable revenue results.

The P&PS business benefited primarily from stronger performance in its Federal & Environmental Solutions, Energy & Power and Advanced Facilities operations while our CMS business benefited from stronger performance in Energy, Security & Technology.

Our revenues were favorably impacted by foreign currency translation of $0.6 million and $82.8 for the three and nine months ended June 28, 2024, respectively, across our international businesses, as compared to an unfavorable impact of $12.4 million and $279.0 million for the three and nine months ended June 30, 2023, respectively.

Gross profit for the third fiscal quarter of 2024 was $916.8 million, an increase of $60.0 million, or 7.0%, from $856.7 million from the corresponding period last year, with gross profit margins of 21.7% and 20.5% for the respective periods.

Gross profit for the nine months ended June 28, 2024 was $2.67 billion, an increase of $110.2 million, or 4.3%, from $2.56 billion from the corresponding period last year, with consistent gross profit margins noted for the comparative periods.

The Company's increase in gross profit was mainly attributable to higher revenues as mentioned above, with slight margin impacts from year over year mix as well as personnel cost impacts primarily in the nine month period.

Revenues for the first fiscal quarter of 2025 were $2.93 billion, an increase of $122.7 million, or 4.4%, from $2.81 billion for the corresponding period last year.

Revenue increases for the quarterly year over year period were due mainly to the Company's I&AF business, as well as slightly higher revenues year over year in our PA Consulting business.

The I&AF business benefited primarily from stronger performance in its Americas, Energy & Power and Asia Pacific and Middle East business operations.

Our revenues were favorably impacted by foreign currency translation of $16.4 million for the first fiscal quarter of 2025 across our international businesses, as compared to a favorable impact of $37.6 million for the first fiscal quarter of 2024, respectively.

Gross profit for the first fiscal quarter of 2025 was $721.3 million, an increase of $56.5 million, or 8.5%, from $664.7 million from the corresponding period last year, with gross profit margins of 24.6% and 23.7% for the respective periods.

The Company's increase in gross profit was mainly attributable to higher revenues as mentioned above, with favorable margin impacts from year over year mix as well as personnel cost impacts.

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

SG&A expenses for the three and nine months ended June 28, 2024 were $656.3 million and $1.93 billion respectively, compared to $587.0 million and $1.76 billion for the corresponding period last year, representing an increase of $69.3 million and $162.1 million or 11.8% and 9.2%, respectively.

SG&A expenses for the three and nine months ended June 28, 2024 were impacted by Restructuring and other charges and transactions related primarily to the Separation Transaction (mainly professional services and employee separation costs) of $61.9 million and $160.4 million respectively, in comparison to prior period Restructuring and other charges and transactions related mainly to real estate related costs of $0.9 million and $38.1 million respectively.

Further, our reported SG&A expenses were impacted by slight increases in other department spend and personnel costs.

Also, SG&A expenses were impacted by unfavorable foreign currency translation of $0.5 million and $14.4 million, respectively, for the three and nine months ended June 28, 2024 as compared to favorable impacts of $2.9 million and $53.4 million for the corresponding periods last year.

Net interest expense for the three and nine months ended June 28, 2024 was $35.5 million and $105.4 million respectively, a decrease of $0.5 million and $0.6 million from $36.0 million and $106.0 million, or 1.3% and 0.6%, respectively, for the corresponding periods last year.

Interest expense and interest income increased for the three and nine months ended June 28, 2024 compared to the corresponding periods last year due primarily to interest rates increasing throughout fiscal year 2023 and fiscal year 2024.

The increase in interest expense was offset by higher interest rates on cash held and by the Company's lower overall levels of outstanding debt compared to the comparative periods.

Miscellaneous net income (expense) for the three and nine months ended June 28, 2024 was $1.2 million and $(6.6) million, respectively, in comparison to $(7.1) million and $(14.9) million for the corresponding periods last year.

The favorable comparisons to the corresponding periods last year were due primarily to favorable foreign exchange gains and losses in the current year periods, along with decreases in pension and benefit related costs noted for the nine month comparative periods.

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.

Selling, general & administrative ("SG&A") expenses for the first fiscal quarter of 2025 were $512.8 million compared to $522.7 million for the corresponding period last year, representing a decrease of $9.9 million or 1.9%.

Lower SG&A expenses as compared to the corresponding period last year was due primarily to decrease of $22.2 million in Restructuring and other charges costs associated with the Separation Transaction.

This decrease in SG&A expenses was partly offset by increases in expenses associated with the Transition Services Agreement (the "TSA") with Amentum, incentives and other department spend.

Lastly, SG&A expenses were impacted by unfavorable foreign exchange impacts of $3.2 million for the first fiscal quarter of 2025 as compared to unfavorable impacts of $3.6 million for the first fiscal quarter of 2024.

Net interest expense for the first fiscal quarter of 2025 was $25.2 million, a decrease of $10.7 million from $35.8 million or 29.8%, for the corresponding period last year.

The decrease in net interest expense for the first fiscal quarter of 2025 was due primarily to the Company's higher levels of cash and lower overall levels of outstanding debt compared to the last fiscal year compared to the comparative periods.

Miscellaneous (expense) net for the first fiscal quarter of 2025 was $(130.1) million in comparison to $(3.0) million for the corresponding period last year.

The unfavorable comparisons to the corresponding period last year were due primarily to a $145.2 million loss associated with mark-to-market losses associated with our investment in Amentum stock in connection with the Separation Transaction, offset in part by $11.4 million in TSA-related income associated with the Separation Transaction as discussed in Note 15- Discontinued Operations .

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.

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However, future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are made or resolved, which may impact our effective tax rate.

Net earnings attributable to noncontrolling interests including redeemable noncontrolling interests for the three and nine months ended June 28, 2024 of $12.0 million and $33.2 million, respectively and $8.6 million and $36.3 million for the corresponding periods last year.

The year over year changes were primarily due to changes in net earnings results in our PA Consulting investment compared to the prior year periods.

Net earnings attributable to noncontrolling interests including redeemable noncontrolling interests for the first fiscal quarter of 2025 were $13.1 million and $6.5 million for the corresponding period last year.

The year over year increase was primarily due to changes in net earnings results in our PA Consulting investment compared to the prior year period.

Restructuring and Other Charges

During fiscal 2023, the Company implemented restructuring initiatives relating to the Separation Transaction.

The Company incurred approximately $19.8 million in fiscal 2023 and $42.2 million during the nine months ended June 28, 2024, in pre-tax cash charges in connection with these initiatives.

The Company incurred approximately $0.7 million during the first fiscal quarter of 2025 and $42.0 million and $17.5 million in fiscal 2024 and fiscal 2023, respectively, in pre-tax cash charges in connection with these initiatives.

These actions, which are expected to be substantially completed before the end of fiscal 2025, are expected to result in estimated gross annualized pre-tax cash savings of approximately $120 million to $147 million.

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During third quarter fiscal 2023, the Company approved a plan to improve business processes and cost structures of our PA Consulting investment by reorganizing senior management and reducing headcount.

In connection with these initiatives, which are expected to be substantially complete before the end of fiscal 2024, the Company incurred approximately $14.3 million during fiscal 2023 and $7.4 million in the nine months ending June 28, 2024, in pre-tax cash charges.

In connection with these initiatives, which are substantially completed, the Company incurred approximately $6.4 million and $14.3 million in fiscal 2024 and fiscal 2023, respectively, in pre-tax cash charges.

These activities are expected to result in estimated gross annualized pre-tax cash savings of approximately $50 million to $65 million.

During fiscal 2023, the Company implemented restructuring and cost reduction initiatives relating to the formation of the reporting and operating segment, Divergent Solutions, which were substantially completed in fiscal 2023.

The Company incurred approximately $7.5 million in pre-tax cash charges in connection with these initiatives during the year ended September 29, 2023.

These actions are expected to result in estimated gross annualized pre-tax cash savings of approximately $20 million to $24 million.

During fiscal 2020 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.

These activities were substantially completed in fiscal 2023.

In connection with these efforts, the Company has incurred $47.3 million and $72.4 million for the years ended September 29, 2023 and September 30, 2022, respectively, in pre-tax mainly non-cash charges.

These actions resulted in non-cash savings related mainly to the future amortization of lease right-of-use assets over the remaining lease terms.

Additionally, the objective of these initiatives was to create a modern, flexible work platform tailored to employees’ needs due to globalization and digital advances and to create total emissions savings that will be realized as we continue to optimize our real estate footprint.

Refer to Note 17– Restructuring and Other Charges for further information regarding restructuring and integration initiatives.

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

Three Months Ended Nine Months Ended

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

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

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

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) (16,096) (41,347)

GAAP Operating Profit 208,418 142,000

Total Other Expense, net (34,314) (43,056) (112,030) (120,930)

Total Other (Expense) Income, net (3) (155,271) (38,795)

Earnings Before Taxes from Continuing Operations

$ 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.

Critical Mission Solutions

Three Months Ended Nine Months Ended

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

Revenue $ 1,155,806 $ 1,190,845 $ 3,513,635 $ 3,457,076

Operating Profit $ 100,318 $ 99,141 $ 297,373 $ 275,304

Critical Mission Solutions segment revenues for the three and nine months ended June 28, 2024 were $1.16 billion and $3.51 billion respectively, a decrease of $35.0 million or 2.9% and increase of $56.6 million, or 1.6%, year-to-date, from reported amounts of $1.19 billion and $3.46 billion for the corre sponding periods last year.

During the three months ended June 28, 2024, the decrease is due to contracts in the defense market that completed and were not renewed.

For the nine months ended June 28, 2024, this was offset by benefits from increased volume in the nuclear remediation and energy sectors in the United Kingdom as well as strong performance from large U.S.

Government client programs.

Foreign currency translation had approximately $1.3 million and $23.9 million in favorable impacts on revenues for the three and nine months ended June 28, 2024, respectively, compared to $2.9 million and $61.5 million in unfavorable impact s in the corresponding prior year periods.

Operating profit for the segment was $100.3 million and $297.4 million, respectively, for the three and nine months ended June 28, 2024, which was an increase of $1.2 million and $22.1 million, or 1.2% and 8.0%, from $99.1 million and $275.3 million compared to the corresponding periods in the prior year.

Operating profit level and margin trends for the year-over-year periods were favorably impacted by increased profitability in the United Kingdom and U.S.

nuclear remediation and energy markets.

Foreign currency translation had approximately $0.1 million and $3.2 million in favorable impacts on operating profit for the three and nine months ended June 28, 2024 , as compared to $0.2 million and $7.4 million in unfavorable impacts in the corresponding prior year periods.

People & Places Solutions

Three Months Ended Nine Months Ended

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

Revenue $ 2,564,698 $ 2,469,694 $ 7,556,999 $ 7,041,744

Operating Profit $ 271,157 $ 242,673 $ 763,919 $ 701,498

Revenues for the People & Places Solutions segment for the three and nine months ended June 28, 2024 was $2.56 billion and $7.56 billion, respectively, an increase of $95.0 million and $515.3 million, or 3.8% and 7.3%, from reported amounts of $2.47 billion and $7.04 billion for the corresponding periods last year.

The increase in revenue for the three and nine months ended June 28, 2024 was driven by net revenue growth across all sectors, particularly in water, life sciences and energy.

Foreign currency translation had approximately $3.1 million in unfavorable and $26.5 million in favorable impacts on revenues for the three and nine months ended June 28, 2024, as compared to $10.1 million and $144.6 million in unfavorable impacts in the corresponding prior year periods.

Operating profit for the People & Places Solutions segment for the three and nine month period ended June 28, 2024 was $271.2 million and $763.9 million, respectively, an increase of $28.5 million and $62.4 million, or 11.7% and 8.9%, from $242.7 million and $701.5 million for the corresponding period last year.

The increase in the three and nine month periods is a result of higher year over year segment revenues mentioned above with partially offsetting impacts from higher corporate cost allocations versus the prior year period.

Further, operating profit in the three month period benefited from the non-cash reversal of certain accruals associated with a client program completed in a prior year, which benefit was largely offset by the unfavorable discrete impacts of higher than usual year over year medical and other benefit costs during the quarter.

The net impact of these adjustments was immaterial in the three and nine month periods presented.

Foreign currency translation had approximately $0.7 million in unfavorable and $4.7 million in favorable impacts on operating profit for the three and nine months ended June 28, 2024, as compared to $3.4 million and $28.7 million in unfavorable impacts in the corresponding prior year periods.

Divergent Solutions

Three Months Ended Nine Months Ended

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

(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.

Infrastructure & Advanced Facilities

Three Months Ended

(in thousands)

December 27, 2024 December 29, 2023

Revenue $ 2,626,208 $ 2,504,226

Operating Profit $ 157,776 $ 128,892

Revenues for the Divergent Solutions segment for the three and nine months ended June 28, 2024 were $222.8 million and $701.0 million, respectively, a decrease of $16.5 million, or 6.9%, and increase of $6.0 million, or 0.9%, from $239.3 million and $695.0 million for the corresponding periods last year.

The decrease in revenue for the three months ended June 28, 2024 was mainly due to a National Government program ending.

The nine month increase is due to startup of new programs previously won in fiscal 2023.

Foreign currency translation did not have a material impact on revenue in our Divergent Solutions segment for either period presented.

Operating profit for the segment was $12.4 million and $39.0 million, for the three and nine months ended June 28, 2024, respectively, a decrease of $8.4 million and $18.7 million, or 40.4% and 32.4%, from $20.8 million and $57.6 million for the corresponding periods last year.

In addition to revenue declines as mentioned above, the three month decrease is driven by unfavorable impacts of changes in overhead billing rates during the current year quarter of 2024 vs.

the prior year quarter mainly in our Cyber & Intelligence business.

Additionally, operating profit for the nine month period reflected mostly consistent underlying performance in the Cyber & Intelligence business unit and the new programs previously won in fiscal 2023, although substantially offset by an approximate one-time $15 million pre-tax non-cash charge associated with an inventory write down during the fiscal 2024 period.

Foreign currency translation had an immaterial impact on operating profit in our Divergent Solutions segment for both periods presented.

Revenues for the I&AF segment for the first fiscal quarter of 2025 was $2.63 billion, an increase of $122.0 million, or 4.9%, from reported amount of $2.50 billion for the corresponding period last year.

The increase in revenue for the first fiscal quarter of 2025 was driven by net revenue growth across all sectors, particularly in water, life sciences, transportation and energy.

Foreign currency translation had approximately $6.9 million in favorable impacts on revenues for the three months ended first fiscal quarter of 2025, as compared to $20.9 million in favorable impacts in the corresponding prior year period.

Operating profit for the I&AF segment for the first fiscal quarter of 2025 was $157.8 million, an increase of $28.9 million, or 22.4%, from $128.9 million for the corresponding period last year.

The increase in the three month period is a result of higher year over year segment revenues mentioned above as well as a one-time negative impact from changes in employee benefits programs in prior year period.

Foreign currency translation had approximately $0.7 million in favorable impact on operating profit for the first fiscal quarter of 2025, as compared to $5.0 million in favorable impacts in the corresponding prior year period.

PA Consulting

Three Months Ended Nine Months Ended

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

Three Months Ended

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

Revenue $ 306,748 $ 306,001

Operating Profit $ 66,738 $ 54,455

Revenues for the PA Consulting segment for the three and nine months ended June 28, 2024 were $288.3 million and $888.2 million, respectively, a change of $1.4 million and $18.3 million, or 0.5% and 2.1%, from $286.9 million and $869.9 million in the corresponding periods last year.

The nine month change is primarily due to growth in PA Consulting's Public Sector work.

Foreign currency translation had approximately $31.4 million in favorable impacts on revenues for the nine months ended June 28, 2024, respectively, as compared to $71.7 million in unfavorable impacts in the corresponding prior year period.

Operating profit for the segment for the three and nine months ended June 28, 2024 was $62.9 million and $177.5 million, respectively, an increase of $2.0 million, or 3.3%, and flat, from $60.9 million and $177.5 million in the corresponding periods last year.

The year-on-year improvement in the quarter is due mainly to the higher revenues noted above along with benefits from cost reduction programs while the nine month periods showed consistent performance levels.

Other Corporate Expenses

Other corporate expenses for the three and nine months ended June 28, 2024 were $118.0 million and $356.4 million, respectively, a decrease of $0.4 million, or 0.4%, and increase of $36.6 million, or 11.5%, from $118.5 million and $319.8 million for the corresponding periods last year.

The quarter-to-date period compared to the prior year was relatively flat, while the comparison of the nine months period of fiscal 2024 to the corresponding 2023 period was unfavorably impacted by a one-time net favorable impact of $41 million relating mainly to changes in employee benefits programs during first quarter 2023, 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.

Additionally, the fiscal 2024 year-to-date period reflects approximately $11 million in one-time non-cash intangibles impairment charges.

Included in other corporate expenses 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.

Revenues for the PA Consulting segment for the first fiscal quarter of 2025 were $306.7 million, an increase of $0.7 million, or 0.2% from $306.0 million in the corresponding period last year.

The three month increase is primarily due to foreign currency translation which had an approximately $9.5 million in favorable impacts on revenues for the first fiscal quarter of 2025, as compared to $16.7 million in favorable impacts in the corresponding prior year period, offset by lower performance in public sector work compared to the prior year.

Operating profit for the segment for the first fiscal quarter of 2025 was $66.7 million, an increase of $12.3 million, or 22.6% from $54.5 million in the corresponding period last year.

The year over year improvement in the quarter is mainly attributable to favorable impacts from cost reduction programs implemented in the prior year.

Backlog Information

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Backlog is not necessarily an indicator of future revenues.

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

The following table summarizes our backlog at June 28, 2024 and June 30, 2023 (in millions):

June 28, 2024 June 30, 2023

Critical Mission Solutions $ 8,450 $ 8,097

People & Places Solutions 19,277 17,498

Divergent Solutions 2,521 2,965

Because certain contracts (e.g., contracts relating to large engineering, procurement & construction projects as well as national government programs) can cause large increases to backlog in the fiscal period in which we recognize the

award, and because many of our contracts require us to provide services that span over several fiscal quarters (and sometimes over fiscal years), we have presented our backlog on a year-over-year basis, rather than on a sequential, quarter-over-quarter basis.

The following table summarizes our backlog at December 27, 2024 and December 29, 2023 (in millions):

December 27, 2024 December 29, 2023

Infrastructure & Advanced Facilities $ 21,484 $ 18,031

PA Consulting 331 317

Total $ 21,815 $ 18,348

The increase in backlog in Critical Mission Solutions from June 30, 2023 was primarily driven by growth and increased funding levels in the United Kingdom and U.S.

nuclear remediation markets along with growth in the U.K.

defense sector and U.S.

Telecom market that offset slower growth in the U.S.

Defense sector.

The increase in backlog in People & Places Solutions from June 30, 2023 was predominantly driven by growth in the Life Sciences and Water markets.

The decrease in backlog in Divergent Solutions (DVS) from June 30, 2023 was due to a major National Government program ending earlier than expected.

The increase in backlog in PA Consulting from June 30, 2023 was primarily driven by organic year-over-year growth of the business.

The increase in backlog in I&AF from December 29, 2023 was predominantly driven by growth across Water, Life Sciences and Transportation and Cities & Place markets.

Consolidated backlog differs from the Company’s remaining performance obligations as defined by ASC 606 primarily because of contract change orders or new wins not yet processed and our national government contracts where our policy is to generally include in backlog the contract award, whether funded or unfunded excluding certain option periods while our remaining performance obligations represent a measure of the total dollar value of work to be performed on contracts awarded and in progress.

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Liquidity and Capital Resources

At June 28, 2024, our principal sources of liquidity consisted of $1.21 billion in cash and cash equivalents and $2.19 billion of available borrowing capacity under our $2.25 billion revolving credit agreement (the "Revolving Credit Facility").

At December 27, 2024, our principal sources of liquidity consisted of $1.30 billion in cash and cash equivalents and $1.74 billion of available borrowing capacity under our $2.25 billion revolving credit agreement (the "Revolving Credit Facility").

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

Cash and cash equivalents at June 28, 2024 were $1.21 billion, representing an increase of $282.1 million from $926.6 million at September 29, 2023, the reasons for which are described below.

Our net cash flow provided by operations of $858.1 million during the nine months ended June 28, 2024 was favorable by $102.7 million in comparison to the cash flow provided by operations of $755.4 million for the corresponding prior year period.

The year-over-year increase in cash from operations is due mainly to higher cash generated from net earnings as adjusted for non-cash income statement activities including favorable net impacts mainly in accrued liabilities, prepaid expenses and other deferred liabilities, while impacts from other net working capital performance were overall consistent year over year.

Our net cash used for investing activities for the nine months ended June 28, 2024 was $95.0 million, compared to cash used for investing activities of $106.4 million in the corresponding prior year period, with this change due primarily to lower levels of additions to plant, property and equipment in the current year.

Our net cash used for financing activities of $492.6 million for the nine months ended June 28, 2024 is driven by share repurchases of $346.4 million, $106.4 million in dividends to shareholders, and $22.0 million in net PA Consulting related redeemable noncontrolling interests purchase and issuance activity, partly offset by proceeds from issuances of common stock of $35.4 million.

Cash used for financing activities in the corresponding prior year period was $770.3 million, due primarily to net repayments from borrowings of $338.6 million, share repurchases of $265.6 million, $95.7 million in dividends to shareholders, and $55.7 million in net PA Consulting related redeemable noncontrolling interests purchase and issuance activity.

At June 28, 2024, the Company had approximately $423.5 million in cash and cash equivalents held in the U.S.

Cash and cash equivalents at December 27, 2024 were $1.30 billion, representing an increase of $154.9 million from $1.14 billion at September 27, 2024, the reasons for which are described below.

The following table presents selected consolidated cash flow information of the Company for the respective periods shown below (including discontinued operations of our separated SpinCo businesses, see Note 15 - Discontinued Operations for more information):

For the Three Months Ended

(In thousands) December 27, 2024 December 29, 2023

Net cash provided by operating activities $ 107,456 $ 418,361

Cash Flows from Investing Activities:

Additions to property and equipment (10,333) (17,306)

Disposals of property and equipment and other assets 1,481 43

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

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

Cash Flows from Financing Activities:

Proceeds from long-term borrowings 589,000 540,401

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

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

Debt issuance costs — (1,606)

Proceeds from issuances of common stock 7,984 11,355

Common stock repurchases (201,626) (100,016)

Taxes paid on vested restricted stock (14,404) (22,387)

Cash dividends to shareholders (36,481) (33,366)

Net dividends associated with noncontrolling interests (2,245) (4,708)

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

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

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

Net Increase in Cash and Cash Equivalents and Restricted Cash 153,510 227,811

Cash and Cash Equivalents, including Restricted Cash, at the Beginning of the Period 1,146,931 929,445

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

Our net cash flow provided by operations for the first fiscal quarter of 2025 was $107.5 million.

For the first fiscal quarter of 2024, cash from operations was $418.4 million (inclusive of discontinued operations) and $307.1 million from continuing operations.

The decline on a continuing operations basis was largely due to higher uses of cash from increases in net working capital, namely Accounts Receivables as well as increases in cash income tax payments of $48.0 million within accrued liabilities.

These decreases were offset in part by higher net earnings from continuing operations after adjustments for non-cash reconciling items, mainly losses on investment securities.

Our net cash used for investing activities for the first fiscal quarter of 2025 was $7.9 million, compared to cash used for investing activities of $16.0 million in the corresponding prior year period (which included $2.3 million associated with discontinued operations), due to lower levels of additions to plant, property and equipment in the current year.

Our net cash provided by financing activities of $112.2 million for the first fiscal quarter of 2025 is driven by net proceeds from borrowings of $362.7 million, partly offset by share repurchases of $201.6 million, $36.5 million in dividends to shareholders, and $14.4 million in taxes paid on vested restricted stock.

Cash used for financing activities in the corresponding prior year period was $208.7 million, due primarily to share repurchases of $100.0 million, net repayments from borrowings of $33.6 million, $33.4 million in dividends to shareholders, and $24.4 million in net PA Consulting related redeemable noncontrolling interests purchase and issuance activity.

At December 27, 2024, the Company had approximately $229.7 million in cash and cash equivalents held in the U.S.

and $1,070.0 million held outside of the U.S.

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

Other than the tax cost of repatriating funds to the U.S.

(see Note 7- Income Taxes of Notes to Consolidated Financial Statements included in our 2023 Form 10-K), there are no material impediments to repatriating these funds to the U.S.

The Company had $296.1 million in letters of credit outstanding at June 28, 2024.

(primarily in the U.K., the Eurozone, Australia, India, Canada, and the Middle East region).

Other than the tax cost of repatriating funds to the U.S., there are no material impediments to repatriating these funds to the U.S.

The Company had $283.3 million in letters of credit outstanding at December 27, 2024.

Of this amount, $0.5 million was issued under the Revolving Credit Facility and $282.8 million was issued under separate, committed and uncommitted letter-of-credit facilities.

Long-term debt as of June 28, 2024 decreased by $722.0 million compared to September 29, 2023 primarily due to the reclassification of $785.7 million from long-term to short-term in March 2024 in connection with the March 25, 2025 scheduled maturity of the 2020 Term Loan Facility.

Under the Separation Transaction, Jacobs and its shareholders will own up to 63% of the combined company's common stock upon consummation of the transaction, the exact amount of which will be determined based on the achievement of certain fiscal year 2024 operating profit targets.

Jacobs is also expected to receive $1 billion of cash proceeds at closing, subject to customary adjustments.

The Company expects to use this cash received at closing to repay outstanding indebtedness.

Jacobs is also expected to realize additional value after closing through the disposition of its retained equity stake in the combined company within 12 months of the transaction closing date.

On February 6, 2023, the Company refinanced its Revolving Credit Facility and Term Loan Facilities, and on February 16, 2023, the Company issued the 5.90% Bonds in the aggregate principal amount of $500.0 million.

Long-term debt as of December 27, 2024 increased by $368.7 million compared to September 27, 2024 primarily due to an increased draw on the revolving credit facility to fund our operations.

Under the Separation Transaction, Jacobs and its shareholders will own up to 63% of AMTM stock upon consummation of the transaction, the exact amount of which continues to be subject to final settlement based on the achievement of certain fiscal year 2024 operating profit targets.

Jacobs is also expected to realize additional value after closing through the disposition of its retained equity stake in the combined company within 12 months of the transaction closing date, 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.

On February 6, 2023, the Company refinanced its Revolving Credit Facility and 2021 Term Loan Facility, and on February 16, 2023, the Company issued the 5.90% Bonds in the aggregate principal amount of $500.0 million.

On August 18, 2023, the Company issued the 6.35% Bonds in the aggregate principal amount of $600.0 million.

See Note 12 - Borrowings for further discussion relating to the terms of the 5.90% Bonds, the 6.35% Bonds, the Revolving Credit Facility and Term Loan Facilities following the issuances and refinancing.

See Note 12 - Borrowings for further discussion relating to the terms of the 5.90% Bonds, the 6.35% Bonds, the Revolving Credit Facility and 2021 Term Loan Facility following the issuances and refinancing.

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

We were in compliance with all of our debt covenants at June 28, 2024.

We were in compliance with all of our debt covenants at December 27, 2024.

Supplemental Obligor Group Financial Information

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This summarized financial information (in thousands) has been prepared and presented pursuant to Regulation S-X Rule 13-01, “Financial Disclosures about Guarantors and Issuers of Guaranteed Securities” and is not intended to present the financial position or results of operations of the Obligor Group in accordance with U.S.

Nine Months Ended

(in thousands) June 28, 2024

Three Months Ended

(in thousands) December 27, 2024

Summarized Statement of Earnings Data

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Noncontrolling interests $ (1,215)

(in thousands) June 28, 2024 September 29, 2023

(in thousands) December 27, 2024 September 27, 2024

Summarized Balance Sheet Data

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis