
								June 30, 2023		September 30, 2022
	December 29, 2017 (Unaudited)			September 29, 2017				(Unaudited)
ASSETS							ASSETS
Current Assets:							Current Assets:
Cash and cash equivalents	$	1,059,839		$	774,151		Cash and cash equivalents	$	1,092,127	$	1,140,479
Receivables		3,293,502			2,102,543
Receivables and contract assets							Receivables and contract assets	3,558,724		3,405,381
Prepaid expenses and other		193,614			119,486		Prepaid expenses and other	172,896		176,134

Total current assets		4,546,955			2,996,180		Total current assets	4,823,747		4,721,994
Property, Equipment and Improvements, net		574,034			349,911		Property, Equipment and Improvements, net	378,410		346,676
Other Noncurrent Assets:							Other Noncurrent Assets:
Goodwill		5,720,875			3,009,826		Goodwill	7,414,558		7,184,658
Intangibles, net		921,000			332,920		Intangibles, net	1,354,677		1,394,052
Deferred income tax assets							Deferred income tax assets	28,626		31,480
Operating lease right-of-use assets							Operating lease right-of-use assets	437,419		476,913
Miscellaneous		928,893			692,022		Miscellaneous	499,262		504,646
Total other noncurrent assets		7,570,768			4,034,768		Total other noncurrent assets	9,734,542		9,591,749
	$	12,691,757		$	7,380,859			$	14,936,699	$	14,660,419
LIABILITIES AND STOCKHOLDERS’ EQUITY							LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:							Current Liabilities:
Notes payable	$	5,450		$	3,071
Current maturities of long-term debt							Current maturities of long-term debt	$	55,743	$	50,415
Accounts payable		947,199			683,605		Accounts payable	1,091,179		966,792
Accrued liabilities		1,472,865			939,687		Accrued liabilities	1,238,545		1,441,762
Billings in excess of costs		637,542			299,864
Operating lease liability							Operating lease liability	152,945		150,171
Contract liabilities							Contract liabilities	761,574		641,705
Total current liabilities		3,063,056			1,926,227		Total current liabilities	3,299,986		3,250,845
Long-term Debt		2,587,933			235,000
Other Deferred Liabilities		1,079,021			732,281
Long-term debt							Long-term debt	3,145,529		3,357,256
Liabilities relating to defined benefit pension and retirement plans							Liabilities relating to defined benefit pension and retirement plans	288,474		271,332
Deferred income tax liabilities							Deferred income tax liabilities	289,036		269,077
Long-term operating lease liability							Long-term operating lease liability	570,321		607,447
Other deferred liabilities							Other deferred liabilities	126,590		167,548
Commitments and Contingencies							Commitments and Contingencies
Redeemable Noncontrolling interests							Redeemable Noncontrolling interests	644,347		632,522
Stockholders’ Equity:							Stockholders’ Equity:
Capital stock:							Capital stock:
Preferred stock, $1 par value, authorized - 1,000,000 shares; issued and outstanding - none		—			—		Preferred stock, $1 par value, authorized - 1,000,000 shares; issued and outstanding - none	—		—
Common stock, $1 par value, authorized - 240,000,000 shares; issued and outstanding—141,556,705 shares and 120,385,544 shares as of December 29, 2017 and September 29, 2017, respectively		141,557			120,386
Common stock, $1 par value, authorized - 240,000,000 shares; issued and outstanding - 125,880,738 shares and 127,393,378 shares as of June 30, 2023 and September 30, 2022, respectively							Common stock, $1 par value, authorized - 240,000,000 shares; issued and outstanding - 125,880,738 shares and 127,393,378 shares as of June 30, 2023 and September 30, 2022, respectively	125,881		127,393
Additional paid-in capital		2,628,012			1,239,782		Additional paid-in capital	2,707,494		2,682,009
Retained earnings		3,728,527			3,721,698		Retained earnings	4,460,729		4,225,784
Accumulated other comprehensive loss		(628,985	)		(653,514	)	Accumulated other comprehensive loss	(772,388)		(975,130)
Total Jacobs stockholders’ equity		5,869,111			4,428,352		Total Jacobs stockholders’ equity	6,521,716		6,060,056
Noncontrolling interests		92,636			58,999		Noncontrolling interests	50,700		44,336
Total Group stockholders’ equity		5,961,747			4,487,351		Total Group stockholders’ equity	6,572,416		6,104,392
	$	12,691,757		$	7,380,859			$	14,936,699	$	14,660,419

For the Three Months Ended

December 29, 2017

December 30, 2016

Cash Flows from Operating Activities:

Net earnings attributable to the Group

$
2,561

$
61,153

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

Depreciation and amortization:

Property, equipment and improvements

24,832

16,621

Intangible assets

14,695

11,914

Debt Issuance Costs

218

—

(Gain) Loss on sales of business

(444
)

822

Stock based compensation

24,619

10,205

Tax deficiency from stock based compensation

(1,205
)
Equity in earnings of operating ventures, net

(3,631
)

(902
)
(Gain) Losses on disposals of assets, net

(20
)

2,847

Change in pension plan obligations

(10,227
)

(5,301
)
Pension Settlement Charge

3,819

—

Change in deferred compensation plans

(985
)

463

Deferred income taxes

(11,951
)

(565
)
Changes in assets and liabilities, excluding the effects of businesses acquired:

Receivables

15,749

(19,627
)
Prepaid expenses and other current assets

(1,550
)

(2,612
)
Accounts payable

(38,875
)

(10,782
)
Accrued liabilities

(110,140
)

(69,638
)
Billings in excess of costs

71,587

111,862

Other deferred liabilities

5,997

(576
)
Non-current assets and other, net

60,632

5,748

Net cash provided by operating activities

46,886

110,427

Cash Flows Used for Investing Activities:

Additions to property and equipment

(22,450
)

(21,054
)
Disposals of property and equipment

104

4

Purchases of investments

(370
)

—

Additions to intangibles

(237
)

—

Acquisitions of businesses, net of cash acquired

(1,365,809
)

—

Sales of business

—

(2,036
)
Net cash used for investing activities

(1,388,762
)

(23,086
)
Cash Flows Provided by Financing Activities:

Proceeds from long-term borrowings

2,733,475

314,460

Repayments of long-term borrowings

(1,090,329
)

(303,128
)
Proceeds from short-term borrowings

721

669

Repayments of short-term borrowings

(721
)

—

Proceeds from issuances of common stock

14,454

37,396

Common stock repurchases

—

(30,221
)
Excess tax benefits from stock based compensation

—

1,205

Taxes paid on vested restricted stock

(13,780
)

(5,053
)
Cash dividends

(18,143
)

—

Net cash provided by financing activities

1,625,677

15,328

Effect of Exchange Rate Changes

1,887

(21,839
)
Net Increase in Cash and Cash Equivalents

285,688

80,830

Cash and Cash Equivalents at the Beginning of the Period

774,151

655,716

Cash and Cash Equivalents at the End of the Period

$
1,059,839

$
736,546

•References herein to the “Group” are to the combined economic interests and activities of the Company and the persons and entities holding noncontrolling interests in our consolidated subsidiaries.

On August 29, 2022, Jacobs Engineering Group Inc. ("JEGI"), the predecessor to Jacobs Solutions Inc., implemented a holding company structure, which resulted in Jacobs Solutions Inc. becoming the parent company of, and successor issuer to, JEGI (the "Holding Company Reorganization"). For purposes of this Quarterly Report, references to the "Company", "we", "us" or "our" or our management or business at any point prior to August 29, 2022 (the "Holding Company Implementation Date") refer to JEGI and its consolidated subsidiaries as the predecessor to Jacobs Solutions Inc.

The accompanying consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form 10-Q. Consequently, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. Readers of this Quarterly Report on Form 10-Q should also read our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September ~~29, 2017~~30, 2022 (“~~2017~~2022 Form 10-K”).

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our consolidated financial statements at ~~December 29, 2017,~~June 30, 2023, and for the ~~three-month period~~three and nine months ended ~~December 29, 2017.~~

June 30, 2023.

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

~~Please~~

On May 9, 2023, the Company announced its intention to separate its Critical Mission Solutions ("CMS") business, resulting in two independent publicly traded companies. Jacobs expects to complete the separation in fiscal 2024 through a distribution to Jacobs' stockholders that is intended to be tax-free to Jacobs’ stockholders for U.S. federal income tax purposes.There can be no assurances with respect to the timing or form of a separation transaction and completion remains subject to final approval by Jacobs’ Board of Directors and other customary conditions. As of June 30, 2023, and the three and nine months then ended, Critical Mission Solutions continues to be presented in continuing operations.

As part of the new Company strategy, during the first quarter of fiscal year 2023, Jacobs formed a reporting and operating segment, Divergent Solutions ("DVS"), to further strengthen our ability to drive value for our clients (the "DVS segment reorganization"). DVS supports both lines of business as the core foundation for developing and delivering innovative, next-generation cloud, cyber, data and digital technologies. For a further discussion of our segment information, please refer to Note 17 ~~Definitions~~18- Segment Information.

On February 4, 2022, the Company acquired StreetLight Data, Inc. ("StreetLight"). StreetLight is a pioneer of ~~Notes~~mobility analytics who uses its data and machine learning resources to ~~Consolidated Financial Statements included~~shed light on mobility and enable users to solve complex transportation problems. The Company paid total base consideration of approximately $190.8 million in cash, and issued $0.9 million in equity and $5.2 million in in-the-money stock options to the former owners of StreetLight. The Company also paid off StreetLight's debt of approximately $1.0 million simultaneously with the consummation of the acquisition. The Company has recorded its final purchase price allocation associated with the acquisition, which is summarized in Note 15- Other Business Combinations.

On November 19, 2021, Jacobs acquired all outstanding shares of common stock of BlackLynx, Inc. ("BlackLynx"), a provider of high-performance software, to complement Jacobs' portfolio of cyber, intelligence and digital solutions. The Company paid total base consideration of approximately $235.4 million in cash to the former owners of BlackLynx. In conjunction with the acquisition, the Company also paid off BlackLynx's debt of approximately $5.3 million simultaneously

Page 11

JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

with the consummation of the acquisition.The Company has recorded its final purchase price allocation associated with the acquisition, which is summarized in Note 15- Other Business Combinations.

On March 2, 2021, Jacobs completed the strategic investment of a 65% interest in PA Consulting Group Limited ("PA Consulting"), a UK-based leading innovation and transformation consulting firm. The total consideration paid by the Company was $1.7 billion, funded through cash on hand, proceeds from a new term loan and draws on the Company's existing revolving credit facility. The remaining 35% interest was acquired by PA Consulting employees, whose redeemable noncontrolling interests had a fair value of $582.4 million on the closing date, including subsequent purchase accounting adjustments. PA Consulting is accounted for as a consolidated subsidiary and as a separate operating segment. See Note 14- PA Consulting Business Combination for more discussion on the investment and Note 11- Borrowings for more discussion on the financing for the transaction.

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 ~~2017 Form 10-K~~unaudited Consolidated Statements of Earnings as discontinued operations for all periods presented and all of the ~~definitions~~ECR business to be sold under the terms of ~~certain terms used herein.~~

the ECR sale had been conveyed to Worley and as such, no amounts remain held for sale.

2.	~~Use of Estimates and Assumptions~~

2. Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires us to employ estimates and make assumptions that affect the reported amounts of certain assets and liabilities, the revenues and expenses reported for the periods covered by the accompanying consolidated financial statements, and certain amounts disclosed in these Notes to the Consolidated Financial Statements. Although such estimates and assumptions are believed to be reasonable under the circumstances and 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.

Please refer to Note 2 2- Significant Accounting Policies of Notes to Consolidated Financial Statements included in our ~~2017~~2022 Form 10-K for a discussion of ~~the~~other significant estimates and assumptions affecting our consolidated financial statements.

3.	~~Fair Value and Fair Value Measurements~~

3. Fair Value and Fair Value Measurements

Certain amounts included in the accompanying consolidated financial statements are presented at ~~“fair~~fair value.” Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as of the date fair value is determined (the “measurement date”). When determining fair value, we consider the principal or most advantageous market in which we would transact, and we consider only those assumptions we believe a typical market participant would consider when pricing an asset or liability. In measuring fair value, we use the following inputs in the order of priority indicated:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices in active markets included in Level 1, such as (i) quoted prices for similar assets or liabilities; (ii) quoted prices in markets that have insufficient volume or infrequent transactions (e.g., less active markets); and (iii) model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data for substantially the full term of the asset or liability.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the fair value measurement.

~~Page 7~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

Please refer to Note 2 2- Significant Accounting Policies of Notes to Consolidated Financial Statements included in our ~~2017~~2022 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.

Page 12

JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

The net carrying amounts of cash and cash equivalents, trade receivables and payables and ~~notes payable~~short-term debt approximate ~~Fair Value~~fair value due to the short-term nature of these instruments. ~~Similarly, we believe the carrying value of long-term debt also approximates Fair Value based on the interest rates and scheduled maturities applicable to the outstanding borrowings.~~

4.	~~New Accounting Pronouncements~~

~~Revenue Recognition~~

From time to time, the Financial Accounting Standards Board (“FASB”) issues accounting standards updates (each being an “ASU”) to its Accounting Standards Codification (“ASC”), which constitutes the primary source of U.S. GAAP. The Company regularly monitors ASUs as they are issued and considers their applicability to its business. All ASUs applicable to the Company are adopted by the due date and in the manner prescribed by the FASB.

~~In May 2014, the FASB issued ASU No. 2014-09~~ ~~Revenue from Contracts with Customers.~~ ~~The new guidance provided by ASU 2014-09 is intended to remove inconsistencies and perceived weaknesses in the existing revenue requirements, provide~~See Note 11- Borrowings for a more robust framework for addressing revenue issues, improve comparability, provide more useful information and simplify the preparation of financial statements. ASU 2014-09 was initially effective for annual and interim reporting periods beginning after December 15, 2016. On July 9, 2015, the FASB approved a one-year deferral of the effective date of this standard. The revised effective date for the standard is for annual reporting periods beginning after December 15, 2017 and interim periods therein. The FASB also approved changes allowing for early adoption of the standard as of the original effective date.

The Company’s adoption activities will be performed over three phases: (i) assessment, (ii) design, and (iii) implementation. Our assessment phase is complete. We have established a cross-functional team to implement ASU 2014-09. We have identified and are in the process of implementing changes to our systems, processes and internal controls to meet the standard’s updated reporting and disclosure requirements. The following are the potential significant differences identified during the assessment phase:

~~Performance Obligations~~

Under current U.S. GAAP, the Company typically considers engineering and construction services as separate performance obligations. Under ASU 2014-09, the Company has determined, in most instances, it is likely that engineering and construction services will be required to be combined into a single performance obligation. In these instances, this will likely change the timing and pattern of revenue recognition.

~~Contract Modifications~~

In many instances, the Company enters into contracts for construction services subsequent to entering in to engineering services contracts (“Phased Projects”). Under ASU 2014-09, the construction services contract may be deemed to modify the engineering contract, or may be required to be combined with the engineering contract. This modification or combination of contracts may result in a cumulative catchup adjustment, which will have an immediate impact on the Company’s results of operations in the period the contract combination or modification occurs. In addition, it will change the timing and pattern of revenue recognition after the period the contracts have been combined or modified. The Company analyzed its current Phased Projects and concluded that a significant number of these arrangements would be combined under ASU 2014-09.

The Company currently intends to adopt the new standard using the Modified Retrospective application. This standard could have a significant impact on the Company’s Consolidated Financial Statements and an administrative impact on its operations and will depend on the magnitude of the items discussed above. The Company will continue to evaluate the impact through the design and implementation phases.

~~Lease Accounting~~

~~In February 2016, the FASB issued ASU 2016-02~~ ~~Leases~~. ASU 2016-02 requires lessees to recognize assets and liabilities for most leases. ASU 2016-02 is effective for public entity financial statements for annual periods beginning after December 15, 2018, and interim periods within those annual periods. Early adoption is permitted, including adoption in an interim period. The guidance must be adopted using a modified retrospective approach for leases that exist or are entered into after the beginning of the earliest comparative period in the financial statements. The Company is evaluating the impact of the new guidance on its consolidated

~~Page 8~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

~~financial statements. This standard could have a significant administrative impact on its operations, and the Company will further assess the impact through its implementation program.~~

~~Hedge Accounting~~

~~In August 2017, the FASB issued ASU No. 2017-12,~~ ~~Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for Hedging Activities.~~ ASU No. 2017-12 makes targeted improvements to the current guidance on accounting for hedges so that it provides a better view of an entity’s risk management activities and how the entity’s hedging strategies are being used to manage risk. In addition, ASU No. 2017-12 further simplifies the application of certain aspects of hedge accounting, including the measurement of hedge effectiveness. The revised guidance becomes effective for fiscal years beginning after December 15, 2018. The Company is evaluating the impact of the new guidance on its consolidated financial statements. It is not expected that the updated guidance will have a significant impact on the Company’s consolidated financial statements.

5.	~~Business Combinations~~

On December 15, 2017, the Company completed the acquisition of CH2M HILL Companies, Ltd. (CH2M), an international provider of engineering, construction, and technical services, by acquiring 100% of the outstanding shares of CH2M common stock and preferred stock. The purpose of the acquisition is to further diversify the Company’s presence in the water, nuclear and environmental remediation sectors and to further the Company’s profitable growth strategy. The Company paid total consideration of approximately $1.8 billion in cash and issued approximately $1.4 billion of Jacobs’ common stock, or 20.7 million shares, to the former stockholders and certain equity award holders of CH2M. In connection with the acquisition, the Company also assumed CH2M’s revolving credit facility and second lien notes, including a $20 million prepayment penalty, which totaled approximately $700 million of long-term debt. Immediately following the effective time of the acquisition, the Company repaid CH2M’s revolving credit facility and second lien notes including the related prepayment penalty.

~~The following summarizes the estimated fair values of CH2M assets acquired and liabilities assumed as of the acquisition date (in millions):~~

Assets

Cash and cash equivalents

$
315.2

Receivables

1,201.9

Prepaid expenses and other

72.7

Property, equipment and improvements, net

225.6

Goodwill

2,698.8

Identifiable intangible assets:

Customer relationships, contracts and backlog

557.0

Trade name

40.0

Lease intangible assets

5.9

Total identifiable intangible assets

602.9

Miscellaneous

277.4

Total Assets

$ 5,394.5

Liabilities

Notes payable

2.2

Accounts payable

309.6

Accrued liabilities

659.0

Billings in excess of costs

263.5

Identifiable intangible liabilities:

Lease intangible liabilities

9.6

Long-term debt

702.3

Other deferred liabilities

382.7

Total Liabilities

2,328.9

Noncontrolling interests

(40.9)

Net assets acquired

$
3,024.7

~~Page 9~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

Customer relationships, contracts and backlog represent the fair value of existing contracts, the underlying customer relationships and backlog of consolidated subsidiaries and have lives ranging from 5 to 13 years (weighted average life of approximately 8 years). The fair value of the acquired trade name has an estimated life of three years. Other intangible assets and liabilities primarily consistdiscussion of the fair value of ~~office leases and have a weighted average life of approximately 12 years.~~

~~Estimated fair~~long-term debt.

Fair value measurements relating to ~~the CH2M acquisition~~our business combinations and goodwill allocations related to our segment realignment are made primarily using Level 3 inputs including discounted cash flow techniques. Fair value for the identified intangible assets is generally estimated using inputs primarily ~~from~~for the income approach ~~which include the use of both~~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 ~~estimated life the asset will contribute to cash flows, such as~~business, including profitability, (ii) attrition ~~rate of customers or remaining contractual terms, (ii) profitability~~rates and (iii) the estimated discount rate that ~~reflect~~reflects the level of risk associated with receiving future cash flows. The estimated fair value of land has been determined using the market approach, which arrives at an indication of value by comparing the site being valued to sites that have been recently acquired in arm’s-length transactions. Personal property assets with an active and identifiable secondary market are valued using the market approach. Buildings and land improvements are valued using the cost approach using a direct cost model built on estimates of replacement cost. 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.

~~Other deferred~~ 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.

4. Revenue Accounting for Contracts

Disaggregation of Revenues

Our revenues are principally derived from contracts to provide a diverse range of technical, professional, and construction services to a large number of industrial, commercial, and governmental clients. We provide a broad range of engineering, design, and architectural services; construction and construction management services; operations and maintenance services; and technical, digital, process, scientific and systems consulting services. We provide our services through offices and subsidiaries located primarily in North America, Europe, the Middle East, India, Australia, Africa, and Asia. We provide our services under cost-reimbursable and fixed-price contracts. Our contracts are with many different customers in numerous industries. Refer to Note 18- Segment Information for additional information on how we disaggregate our revenues by reportable segment.

The following table further disaggregates our revenue by geographic area for the three and nine months ended June 30, 2023 and July 1, 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
Revenues:
United States	$	2,816,773	$	2,577,892	$	8,047,887	$	7,226,189
Europe	905,917		862,011		2,691,479		2,666,219
Canada	70,164		74,509		193,880		206,701
Asia	35,054		35,741		105,520		104,361
India	39,749		30,761		126,922		81,753
Australia and New Zealand	181,308		172,926		512,416		532,228
Middle East and Africa	137,737		73,253		385,598		224,326
Total	$	4,186,702	$	3,827,093	$	12,063,702	$	11,041,777

Contract Liabilities

Contract liabilities ~~were comprised~~represent amounts billed to clients in excess of ~~pensions~~revenue recognized to date. Revenue recognized for the three and nine months ended June 30, 2023 that was previously included in the contract liability balance on September 30, 2022 was $65.1 million and $483.9 million, respectively. Revenue recognized for the three and nine months ended July 1, 2022 that was included in the contract liability balance on October 1, 2021 was $36.3 million and $407.3 million, respectively.

Page 13

JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

Remaining Performance Obligation

The Company’s remaining performance obligations as of June 30, 2023 represent a measure of the total dollar value of work to be performed on contracts awarded and in progress. The Company had approximately $17.2 billion in remaining performance obligations as of June 30, 2023. The Company expects to recognize approximately 51% of its remaining performance obligations into revenue within the next twelve months and the remaining 49% thereafter. The majority of the remaining performance obligations after the first twelve months are expected to be recognized over a four year period.

Although our remaining performance obligations reflect business volumes that are considered to be firm, normal business activities including scope adjustments, deferrals or cancellations may occur that impact volume or expected timing of their recognition. Remaining performance obligations are adjusted to reflect any known project cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate.

5. Earnings Per Share and Certain Related Information

Basic and diluted earnings per share (“EPS”) are computed using the two-class method, which is an earnings allocation method that determines EPS for common shares and participating securities. The undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period. Participating securities and common shares have equal rights to undistributed earnings. Net earnings used for the purpose of determining basic and diluted EPS is determined by taking net earnings less earnings available to participating securities.

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 30, 2023 and July 1, 2022 (in thousands):

Page 14

JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


	Three Months Ended				Nine Months Ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
Numerator for Basic and Diluted EPS:





Net earnings from continuing operations allocated to common stock for EPS calculation	$	163,945	$	196,326	$	516,886	$	419,408



Net earnings (loss) from discontinued operations allocated to common stock for EPS calculation	$	294	$	(343)	$	(489)	$	(576)

Net earnings allocated to common stock for EPS calculation	$	164,239	$	195,983	$	516,397	$	418,832

Denominator for Basic and Diluted EPS:



Shares used for calculating basic EPS attributable to common stock	126,646		128,225		126,785		128,966

Effect of dilutive securities:
Stock compensation plans	492		708		546		767
Shares used for calculating diluted EPS attributable to common stock	127,138		128,933		127,331		129,733

Net Earnings Per Share:
Basic Net Earnings from Continuing Operations Per Share	$	1.29	$	1.53	$	4.08	$	3.25
Basic Net Loss from Discontinued Operations Per Share	$	—	$	—	$	—	$	—
Basic Earnings Per Share	$	1.30	$	1.53	$	4.07	$	3.25
Diluted Net Earnings from Continuing Operations Per Share	$	1.29	$	1.52	$	4.06	$	3.23
Diluted Net Loss from Discontinued Operations Per Share	$	—	$	—	$	—	$	—
Diluted Earnings Per Share	$	1.29	$	1.52	$	4.06	$	3.23

Note: Per share amounts may not add due to rounding.

Share Repurchases


On January 16, 2020, the Company's Board of Directors authorized a share repurchase program of up to $1.0 billion of the Company's common stock (the "2020 Repurchase Authorization"). In the fourth quarter of fiscal 2021, the Company initiated an accelerated share repurchase program under the 2020 Repurchase Authorization by advancing $250 million to a financial institution in a privately negotiated transaction, with final non-cash settlement on the program during the first quarter of fiscal 2022 of 342,054 shares.

The 2020 Repurchase Authorization expired on January 15, 2023. 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 30, 2023, the Company has $875.0 million remaining under the 2023 Repurchase Authorization.

The following table summarizes repurchase activity under the 2020 Repurchase Authorization during fiscal year 2023 through expiration during the secondfiscal quarter of 2023:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)


Amount Authorized (2020 Repurchase Authorization)	Average Price Per Share (1)	Total Shares Retired	Shares Repurchased
$1,000,000,000	$113.56	1,237,688	1,237,688

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

The following table summarizes repurchase activity under the 2023 Repurchase Authorization from January 25, 2023 through the third fiscal quarter of 2023:


Amount Authorized (2023 Repurchase Authorization)	Average Price Per Share (1)	Total Shares Retired	Shares Repurchased
$1,000,000,000	$114.91	1,088,012	1,088,012

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


Our share repurchase program does not obligate the Company to purchase any shares. Share repurchases may be executed through various means including, without limitation, accelerated share repurchases, open market transactions, privately negotiated transactions, purchases pursuant to Rule 10b5-1 plans or otherwise. The authorization for the share repurchase programs may be terminated, increased or decreased by the Company’s Board of Directors in its discretion at any time. 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.

Dividends

On July 6, 2023, the Company’s Board of Directors declared a quarterly dividend of $0.26 per share of the Company’s common stock to be paid on August 25, 2023, to shareholders of record on the close of business on July 28, 2023. Future dividend declarations are subject to review and approval by the Company’s Board of Directors. Dividends paid through the third fiscal quarter of 2023 and the preceding fiscal year are as follows:

Declaration Date

Record Date

Payment Date

Cash Amount (per share)

April 27, 2023

May 26, 2023

June 23, 2023

$0.26

January 25, 2023

February 24, 2023

March 24, 2023

$0.26

September 15, 2022

September 30, 2022

October 28, 2022

$0.23

July 13, 2022

July 29, 2022

August 26, 2022

$0.23

April 28, 2022

May 27, 2022

June 24, 2022

$0.23

January 26, 2022

February 25, 2022

March 25, 2022

$0.23

September 23, 2021

October 15, 2021

October 29, 2021

$0.21

6. Goodwill and Intangibles

As a result of the formation of our new Divergent Solutions operating segment beginning in the first quarter of fiscal 2023, the historical carrying value of a portion of goodwill has been reallocated to this segment based on a relative

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fair value basis. The carrying value of goodwill appearing in the accompanying Consolidated Balance Sheets at June 30, 2023 and September 30, 2022 was as follows (in thousands):


	Critical Mission Solutions		People & Places Solutions		Divergent Solutions		PA Consulting		Total
Balance September 30, 2022	$	2,251,724	$	3,196,796	$	576,986	$	1,159,152	$	7,184,658
Acquired	—		—		—		11,956		11,956
Post-Acquisition Adjustments	—		(138)		—		877		739

Foreign currency translation and other	(1,379)		20,421		20,148		178,015		217,205
Balance June 30, 2023	$	2,250,345	$	3,217,079	$	597,134	$	1,350,000	$	7,414,558

The following table provides certain information related to the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets at June 30, 2023 and September 30, 2022 (in thousands):


	Customer Relationships, Contracts and Backlog		Developed Technology		Trade Names		Total
Balances September 30, 2022	$	1,136,438	$	88,931	$	168,683	$	1,394,052
Amortization	(132,772)		(11,720)		(7,740)		(152,232)
Acquired	5,537		—		—		5,537
Post-Acquisition Adjustments	(1,409)		—		—		(1,409)
Foreign currency translation and other	83,415		1,785		23,529		108,729
Balances June 30, 2023	$	1,091,209	$	78,996	$	184,472	$	1,354,677

The following table presents estimated amortization expense of intangible assets for the remainder of fiscal 2023 and for the succeeding years.


Fiscal Year	(in millions)
2023	$	52.2
2024	207.0
2025	206.5
2026	183.6
2027	150.7
Thereafter	554.7
Total	$	1,354.7

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7.Receivables and Contract Assets

The following table presents the components of receivables and contract assets appearing in the accompanying Consolidated Balance Sheets at June 30, 2023 and September 30, 2022, as well as certain other related information (in thousands):


	June 30, 2023		September 30, 2022
Components of receivables and contract assets:
Amounts billed, net	$	1,518,268	$	1,400,088
Unbilled receivables and other	1,408,253		1,523,249
Contract assets	632,203		482,044
Total receivables and contract assets, net	$	3,558,724	$	3,405,381
Other information about receivables:
Amounts due from the United States federal government, included above, net of contract liabilities	$	749,767	$	749,323

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

Unbilled receivables and other, ~~long-term employee related liabilities totaling approximately $291.0 million.~~

~~The purchase price allocation is based upon preliminary information~~which represent an unconditional right to payment subject only to the passage of time, are reclassified to amounts billed when they are billed under the terms of the contract. We anticipate that substantially all of such unbilled amounts will be billed and collected over the next twelve months.

Contract assets represent unbilled amounts where the right to payment is subject to ~~change~~more than merely the passage of time and includes performance-based incentives and services that have been provided in advance of agreed contractual milestones. Contract assets are transferred to unbilled receivables when the right to consideration becomes unconditional and are transferred to amounts billed upon invoicing.

8. Accumulated Other Comprehensive Income

The following table presents the Company's roll forward of accumulated other comprehensive income (loss) after-tax as of June 30, 2023 (in thousands):


	Change in Net Pension Obligation		Foreign Currency Translation Adjustment (1)		Gain/(Loss) on Cash Flow Hedges (2)		Total
Balance at September 30, 2022	$	(307,395)	$	(786,040)	$	118,305	$	(975,130)
Other comprehensive (loss) income	(30,047)		242,420		10,987		223,360
Reclassifications from accumulated other comprehensive income (loss)	—		—		(20,618)		(20,618)
Balance at June 30, 2023	$	(337,442)	$	(543,620)	$	108,674	$	(772,388)

(1) Included in the overall foreign currency translation adjustment for the nine months ended June 30, 2023 and July 1, 2022 are $(93.5) million and $90.5 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 June 30, 2023 were approximately $23.0 million in unrealized gains, net of taxes, which are expected to be realized in earnings during the twelve months subsequent to June 30, 2023.

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9. Income Taxes


The Company’s effective tax rates from continuing operations for the three months ended June 30, 2023 and July 1, 2022 were 23.9% and 21.9%, respectively. For the three months ended June 30, 2023, the primary differences between the statutory U.S. federal corporate tax rate of 21% and the Company’s effective tax rate were associated with 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. For the three months ended July 1, 2022 the main differences were attributable to U.S. state income tax expense of $8.4 million and U.S tax on foreign earnings of $5.3 million, partly offset by a $9.1 million tax benefit related to the reversal of a withholding tax accrual on certain intercompany loans.

The Company's effective tax rates from continuing operations for the nine months ended June 30, 2023 and July 1, 2022 were 18.2% and 20.4%, respectively. The primary differences between the statutory U.S. federal corporate tax rate of 21.0% and the Company’s effective tax rate for the nine months ended June 30, 2023 were related to net tax benefits of $39.4 million 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. For the nine months ended July 1, 2022, the main differences were associated with tax benefits of $15.4 million for the release of previously valued foreign tax credits, $9.1 million related to the reversal of a withholding tax accrual on certain intercompany loans, and $4.9 million from filing amended state tax returns. These benefits were partly offset by U.S. state income tax expense of $17.4 million and U.S. tax on foreign earnings of $9.3 million.

The amount of income taxes the Company pays is subject to ongoing audits by tax jurisdictions around the world. In the normal course of business, the Company is subject to examination by tax authorities throughout the world, including such major jurisdictions as Australia, Canada, India, the Netherlands, the United Kingdom and the United States. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of the relevant risks, facts, and circumstances existing at the time. The Company believes that it has adequately provided for reasonably foreseeable outcomes related to these matters. 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.

10. 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 $385.9 million and $245.5 million, respectively, as of June 30, 2023 and $353.9 million and $228.1 million, respectively, as of September 30, 2022. 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 $133.2 million and $145.8 million, respectively, as of June 30, 2023, and $109.3 million and $129.2 million, respectively, as of September 30, 2022.

Our investments in equity method joint ventures on the Consolidated Balance Sheets (reported in Other Noncurrent Assets: Miscellaneous) as of June 30, 2023 and September 30, 2022 were $51.7 million and $56.6 million, respectively. Additionally, income from equity method joint ventures (reported in Revenue) was $7.6 million and $10.8 million, respectively, during the three months ended June 30, 2023 and July 1, 2022, with $25.1 million and $30.1 million, respectively, reporting in the corresponding nine month periods. As of June 30, 2023, the Company's equity method investment carrying values do not include material amounts exceeding their share of the respective joint ventures' reported net assets.

Accounts receivable from unconsolidated joint ventures accounted for under the equity method was $17.8 million and $21.1 million as of June 30, 2023 and September 30, 2022, respectively.

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11. Borrowings

At June 30, 2023 and September 30, 2022, long-term debt consisted of the following (principal amounts in thousands):


	Interest Rate	Maturity	June 30, 2023		September 30, 2022
Revolving Credit Facility	Benchmark + applicable margin (1) (2)	February 2028	$	806,147	$	1,105,294
2021 Term Loan Facility - USD Portion	Benchmark + applicable margin (1) (3)	February 2026	200,000		200,000
2021 Term Loan Facility - GBP Portion	Benchmark + applicable margin (3)	September 2025	826,280		723,580
2020 Term Loan Facility	Benchmark + applicable margin (1) (4)	March 2025 (7)	877,532		882,263
Fixed-rate notes due:
Bonds, Sustainability-Linked	5.9% (5)	March 2033	500,000		—

Senior Notes, Series A	4.27%	May 2025 (6)	—		190,000
Senior Notes, Series B	4.42%	May 2028 (6)	—		180,000
Senior Notes, Series C	4.52%	May 2030 (6)	—		130,000
Less: Current Portion (7)			(55,743)		(50,415)
Less: Deferred Financing Fees			(8,687)		(3,466)
Total Long-term debt, net			$	3,145,529	$	3,357,256

(1)During the second quarter of fiscal 2023, 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.

(2)Depending on the Company’s Consolidated Leverage Ratio or Debt Rating (each as defined in the credit agreement governing the Revolving Credit Facility), 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 30, 2023 and September 30, 2022 were approximately 6.49% and 4.08%. 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 30, 2023.

(3)Depending on the Company’s Consolidated Leverage Ratio or Debt Rating (each as defined in the credit agreement governing the 2021 Term Loan Facility), U.S. dollar denominated borrowings under the 2021 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 30, 2023 and September 30, 2022 was approximately 6.50% and 4.06%. 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 6.21% and 3.60% at June 30, 2023 and September 30, 2022, respectively.

(4)Depending on the Company’s Consolidated Leverage Ratio or Debt Rating (each as defined in the credit agreement governing the 2020 Term Loan Facility), 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 30, 2023 and September 30, 2022 were approximately 6.45% and 4.49%. 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 6.21% and 3.60% at June 30, 2023 and September 30, 2022, respectively.

(5)From and including September 1, 2028 (the “First Step Up Date”), the interest rate payable on the 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 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

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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.

(6)All amounts due under the Note Purchase Agreement pursuant to which the Senior Notes (each as defined below) were issued were repaid in the first fiscal quarter of 2023.

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

Revolving Credit Facility and Term Loans

On February 7, 2014, Jacobs and certain of its subsidiaries entered into a $1.6 billion long-term unsecured, revolving credit facility (as amended, the “2014 Revolving Credit Facility”) with a syndicate of U.S. and international banks and financial institutions. On March 27, 2019, the Company entered into a second amended and restated credit agreement (the "Revolving Credit Facility"), which amended and restated the 2014 Revolving Credit Facility by, among other things, (a) extending the maturity date of the credit facility to March 27, 2024, (b) increasing the facility amount to $2.25 billion (with an accordion feature that allows a further increase of the facility amount up to $3.25 billion), (c) eliminating the covenants restricting investments, joint ventures and acquisitions by the Company and its subsidiaries and (d) adjusting the financial covenants to eliminate the net worth covenant upon the removal of the same covenant from the Company’s existing Note Purchase Agreement (defined below). On February 6, 2023, the Company amended and restated the Revolving Credit Facility to, among other things: (a) extend the maturity date to February 6, 2028, (b) replace and adjust interest rates based on market conditions and incorporate a sustainability-linked pricing adjustment, (c) 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), (d) eliminate the net worth financial covenant, and (e) add Jacobs Solutions Inc. as a guarantor of the obligations of JEGI and its subsidiaries under the Revolving Credit Facility.

The Revolving Credit Facility permits the Company to borrow in U.S. dollars, certain specified foreign currencies, and any other currency that may be approved in accordance with the terms of the Revolving Credit Facility. The Revolving Credit Facility also provides for a financial letter of credit sub facility of $400.0 million, permits performance letters of credit, and provides for a $100.0 million sub facility for swing line loans. Letters of credit are subject to fees based on the Company’s Consolidated Leverage Ratio and Debt Rating, whichever is more favorable to the Company. The Company pays a facility fee of between 0.10% and 0.25% per annum depending on the Company’s Consolidated Leverage Ratio and Debt Rating.

On January 20, 2021, the Company entered into an unsecured delayed draw term loan facility (the “2021 Term Loan Facility”) with a syndicate of financial institutions as lenders. Under the 2021 Term Loan Facility, the Company borrowed an aggregate principal amount of $200.0 million and £650.0 million. The proceeds of the term loans were used primarily to fund the Company's investment in PA Consulting. The 2021 Term Loan Facility contains affirmative and negative covenants and events of default customary for financings of this type that are consistent with those included in the Revolving Credit Facility and the 2020 Term Loan Facility. On February 6, 2023, the Company amended and restated the 2021 Term Loan Facility to, among other things: (a) extend the maturity date of the U.S. dollar term loan to February 6, 2026 and the British sterling term loan to September 1, 2025, (b) replace and adjust interest rates based on market conditions and incorporate a sustainability-linked pricing adjustment, (c) 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), (d) eliminate the net worth financial covenant, and (e) add Jacobs as a guarantor of the obligations of JEGI under the 2021 Term Loan Facility.

On March 25, 2020, the Company entered into an unsecured term loan facility (the “2020 Term Loan Facility”) with a syndicate of financial institutions as lenders. Under the 2020 Term Loan Facility, the Company borrowed an aggregate principal amount of $730.0 million and one of the Company's U.K. subsidiaries borrowed an aggregate principal amount of £250.0 million. The 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. The 2020 Term Loan Facility contains affirmative and negative covenants and events of default customary for financings of this type that are consistent with those included in the Revolving Credit Facility. On February 6, 2023, the Company amended the 2020 Term Loan Facility 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 and the 2021 Term Loan Facility are together referred to as the "Term Loan Facilities".

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JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

We were in compliance with the covenants under the Revolving Credit Facility and Term Loan Facilities at June 30, 2023.

Bonds, Sustainability-Linked

On February 16, 2023, JEGI completed an offering of $500 million aggregate principal amount of Sustainability-Linked Senior Notes due 2033 (the “Bonds”). The Bonds are fully and unconditionally guaranteed by the Company (the “Guarantee”). The Bonds and the Guarantee were offered pursuant to a prospectus supplement, dated February 13, 2023, to the prospectus dated February 6, 2023, that forms a part of the Company's and JEGI’s automatic shelf registration statement on Form S-3ASR previously filed with the Securities and Exchange Commission, and were issued pursuant to an Indenture, dated as of February 16, 2023, between JEGI, as issuer, the Company, as guarantor, and U.S. 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 Bonds is payable semi-annually in arrears on each March 1 and September 1, commencing on September 1, 2023, until maturity. The Bonds bear interest at 5.9% per annum, subject to adjustments, as discussed in note (5) to the table above.

Prior to December 1, 2032 (the “Par Call Date”), JEGI may redeem the Bonds at its option, in whole or in part, at any time and from time to time, at the redemption price calculated by JEGI (expressed as a percentage of principal amount and rounded to three decimal places) equal to the greater of: (1) (a) the sum of the present values of the remaining scheduled payments of principal and interest on the Bonds being redeemed, assuming that such Bonds matured on the Par Call Date, discounted to the redemption date on a semiannual basis (assuming a 360-day year of twelve 30-day months), at the Treasury Rate (as defined in the First Supplemental Indenture) plus 35 basis points, less (b) interest accrued to the redemption date, and (2) 100% of the principal amount of such Bonds to be redeemed, plus, in either case, accrued and unpaid interest on the Bonds, if any, to, but excluding, the redemption date. At any time and from time to time on or after the Par Call Date, JEGI may redeem the Bonds, at its option, in whole or in part, at a redemption price equal to 100% of the principal amount of the Bonds to be redeemed, plus accrued and unpaid interest thereon, if any, up to, but excluding, the redemption date.

Senior Notes, Series A, B and C

On March 12, 2018, the Company entered into a note purchase agreement (as amended, the "Note Purchase Agreement") with respect to the issuance and sale in a private placement transaction of $500 million in the aggregate principal amount of the Company’s senior notes in three series (collectively, “Senior Notes”). In connection with the Holding Company Reorganization, which was completed in August 2022, the Company launched an offer to repurchase its outstanding Senior Notes at par plus accrued and unpaid interest, and without any make-whole premium. In fiscal first quarter 2023, the Company repurchased $481 million of Senior Notes held by holders who accepted the offer with proceeds from the Revolving Credit Facility. In December 2022, the Company repurchased the remaining $19 million of Senior Notes.

We believe the carrying value of the Revolving Credit Facility, the Term Loan Facilities and other debt outstanding approximates fair value based on the interest rates and scheduled maturities applicable to the outstanding borrowings. The fair value of the Bonds is estimated to be $488.9 million at June 30, 2023, 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.

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 million of fixed rate debt. On February 13, 2023 and with the issuance of the Bonds, the Company settled these treasury lock agreements. See Note 17- Commitments and Contingencies and Derivative Financial Instruments for more discussion around this transaction.

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JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

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

The Company has issued $0.9 million in letters of credit under the Revolving Credit Facility, leaving $1.44 billion of available borrowing capacity under the Revolving Credit Facility at June 30, 2023. In addition, the Company had issued $325.3 million under separate, committed and uncommitted letter-of-credit facilities for total issued letters of credit of $326.2 million at June 30, 2023.

12. Leases

The components of lease expense (reflected in selling, general and administrative expenses) for the three and nine months ended June 30, 2023 and July 1, 2022 were as follows (in thousands):


	Three Months Ended				Nine Months Ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
Lease expense



Operating lease expense	$	35,632	$	36,636	$	106,453	$	114,387
Variable lease expense	9,212		8,532		27,973		24,471
Sublease income	(4,562)		(3,745)		(13,382)		(11,335)
Total lease expense	$	40,282	$	41,423	$	121,044	$	127,523

Supplemental information related to the Company's leases for the nine months ended June 30, 2023 and July 1, 2022 was as follows (in thousands):


	Nine Months Ended
	June 30, 2023		July 1, 2022
Cash paid for amounts included in the measurements of lease liabilities	$	138,213	$	173,639



Right-of-use assets obtained in exchange for new operating lease liabilities	$	57,441	$	35,187

Weighted average remaining lease term - operating leases	6.0 years		6.5 Years

Weighted average discount rate - operating leases	3.1%		2.8%

Total remaining lease payments under the Company's leases for the remainder of fiscal 2023 and for the succeeding years is ~~obtained.~~ as follows (in thousands):


Fiscal Year	Operating Leases
2023	$	45,089
2024	166,230
2025	139,244
2026	117,227
2027	96,003
Thereafter	230,689
	794,482
Less Interest	(71,216)
	$	723,266

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

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JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

During the fiscal first quarter of 2023 and 2022, as a result of the Company's transformation initiatives, including the changing nature of the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio. These initiatives resulted in the abandonment of certain leased office spaces and the establishment of a formal plan to sublease certain other leased spaces that will no longer be utilized by the Company. In connection with the Company’s actions related to these initiatives, the Company evaluated certain of its lease right-of-use assets and related property, equipment and leasehold improvements for impairment under ASC 360.

As a result of the analysis, the Company recognized impairment losses during the nine months ended June 30, 2023 of $38.1 million compared to $74.6 million for the corresponding period last year, which are included in selling, general and administrative expenses in the accompanying statement of earnings. The impairment losses recorded include $33.1 million and $56.6 million related to right-of-use lease assets and $5.0 million and $18.0 million related to other long-lived assets, including property, equipment and improvements and leasehold improvements for the fiscal year-to-date 2023 and 2022 periods, respectively.

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.

13. Pension and Other Postretirement Benefit Plans

The following table presents the components of net periodic pension benefit expense (income) recognized in earnings during the three and nine months ended June 30, 2023 and July 1, 2022 (in thousands):


	Three Months Ended				Nine Months Ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
Component:
Service cost	$	1,748	$	1,709	$	5,244	$	5,127
Interest cost	20,233		13,784		60,699		41,352
Expected return on plan assets	(21,091)		(23,263)		(63,273)		(69,789)
Amortization of previously unrecognized items	1,304		3,092		3,912		9,276

Total net periodic pension benefit expense/(income) recognized	$	2,194	$	(4,678)	$	6,582	$	(14,034)

The service cost component of net periodic pension benefit is presented in the same line item as other compensation costs (direct cost of contracts and selling, general and administrative expenses) and the other components of net periodic pension expense are presented in miscellaneous income (expense), net on the Consolidated Statements of Earnings.

The following table presents certain information regarding the Company’s cash contributions to our pension plans for fiscal 2023 (in thousands):


Cash contributions made during the first nine months of fiscal 2023	$	19,334
Cash contributions projected for the remainder of fiscal 2023	7,317
Total	$	26,651

Page 24

JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

14. PA Consulting Business Combination

Deal Summary

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. The total consideration paid by the Company was $1.7 billion, funded through cash on hand, proceeds from a new term loan and draws on the Company's existing Revolving Credit Facility. The remaining 35% interest was acquired by PA Consulting employees, whose redeemable noncontrolling interests had a fair value of $582.4 million on the closing date, including subsequent purchase accounting adjustments. PA Consulting is accounted for as a consolidated subsidiary and as a separate operating segment. See Note 11- Borrowings for more discussion on the financing for the transaction.

Redeemable Noncontrolling Interests

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

During the first nine months of 2023 and 2022, PA Consulting repurchased certain shares of the redeemable noncontrolling interest holders for $90.4 million and $46.1 million, respectively, and issued certain shares of redeemable noncontrolling interest holders for $34.8 million and $49.7 million, respectively. The difference between the cash purchase prices and the recorded book values of these repurchased and issued interests was recorded in the Company’s consolidated retained earnings.

Changes in the redeemable noncontrolling interests during the nine months ended June 30, 2023 are as follows (in thousands):




Balance at September 30, 2022	$	632,522
Accrued Preferred Dividend to Preference Shareholders	53,233
Attribution of Preferred Dividend to Common Shareholders	(53,233)

Net earnings attributable to redeemable noncontrolling interests to Common Shareholders	13,225
Redeemable Noncontrolling interests redemption value adjustment	10,393
Repurchase of redeemable noncontrolling interests	(108,379)
Issuance of redeemable noncontrolling interests	37,789
Cumulative translation adjustment and other	58,797
Balance at June 30, 2023	$	644,347

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 first nine months of fiscal 2023 and 2022, the Company recorded $5.1 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.

Restricted Cash

The Company, through its investment in PA Consulting, held $2.0 million and $13.7 million at June 30, 2023 and September 30, 2022, respectively, in cash that is restricted from general use and is included in Prepaid expenses and other on the Consolidated Balance Sheets.

Page 25

JACOBS SOLUTIONS INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

15. Other Business Combinations

StreetLight Data, Inc.

On February 4, 2022, the Company acquired StreetLight Data, Inc. ("StreetLight"). StreetLight is a pioneer of mobility analytics who uses its data and machine learning resources to shed light on mobility and enable users to solve complex transportation problems. The Company paid total base consideration of approximately $190.8 million in cash, and issued $0.9 million in equity and $5.2 million in in-the-money stock options to the former owners of StreetLight. The Company also paid off StreetLight's debt of approximately $1.0 million simultaneously with the consummation of the acquisition. The following summarizes the fair values of StreetLight's assets acquired and liabilities assumed as of the acquisition date (in millions):


Assets
Cash and cash equivalents	$	7.3
Receivables	5.2
Property, equipment and improvements, net	0.1
Goodwill	116.4
Identifiable intangible assets	105.1
Prepaid expenses and other current assets	2.0
Total Assets	$	236.1

Liabilities
Accounts payable, accrued expenses and other current liabilities	$	23.1
Other long term liabilities	16.1
Total Liabilities	39.2
Net assets acquired	$	196.9

Goodwill recognized ~~largely~~ results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected future synergies from combining operations. None of the goodwill recognized is expected to be deductible for tax purposes. The Company has ~~not~~ completed its final assessment of the fair values of ~~purchased receivables, intangible~~StreetLight's assets acquired and liabilities ~~property and equipment, tax balances, contingent liabilities, long-term leases or acquired contracts. The final~~assumed. Since the initial preliminary estimates reported in the second quarter of fiscal 2022, the Company has updated certain amounts reflected in the preliminary purchase price allocation, ~~will result~~as summarized in ~~adjustments to certain~~the fair values of StreetLight's assets acquired and liabilities ~~including the residual amount allocated to goodwill. See Note 18,~~ ~~Commitments and Contingencies, relating to CH2M contingencies.~~

~~From~~assumed as of the acquisition date set forth above, the majority of ~~December 15, 2017 through the end~~which related to reclassifications between goodwill and intangibles and for deferred taxes.

Identifiable intangibles are technology, data and customer relationships, contracts and backlog and have estimated lives of ~~the first fiscal quarter of 2018, CH2M contributed approximately $131 million in revenue~~5, 4 and $15.7 million in net earnings included in the accompanying consolidated statement of earnings. Included in these results were approximately $30 million in pre-tax restructuring and transaction costs.

Transaction costs associated with the CH2M acquisition in the accompanying consolidated statements of operations for the three months ended December 29, 2017 are comprised of the following (in millions):

9 years, respectively.

Personnel costs

$
41,222

Professional service, real estate-related, and other expenses

26,675

Total

$
67,897

~~The following presents~~No summarized unaudited pro forma ~~operating~~ results ~~assuming that~~are provided for the StreetLight acquisition due to the immateriality of this acquisition relative to the Company's consolidated financial position and results of operations.

During fiscal 2019 and continuing into fiscal 2020, the Company implemented certain restructuring, separation and integration initiatives associated with the ECR sale, the acquisition of KeyW Holding Corporation ('KeyW"), and other related ~~events occurred (in millions):~~

Three Months Ended

See note 1

December 29,
2017

December 30,
2016

Revenues

$
3,778

$
3,652

Net earnings (loss)

$                 25.8

$
             (47.0)

Net earnings (loss) attributable to  Jacobs

$
23.2

$
(56.6)

Net earnings (loss) attributable to Jacobs per share:

Basic earnings (loss) per share

$
0.16

$
(0.40)

Diluted earnings (loss) per share

$
0.16

$
(0.40)

cost reduction initiatives. Additionally, in fiscal 2020, the Company implemented certain restructuring and

Included in the unaudited pro forma operating results are charges relating to transaction expenses, severance expense and other items that are removed from the three months ended December 29, 2017 and are reflected in the three months ended December 30, 2016 due to the assumed timing of the transaction. Also, income tax expense (benefit) for the three month pro forma periods ended December 29, 2017 and December 30, 2016 were $67.4 million and ($78.6) million, respectively.

Page 10

JACOBS ~~ENGINEERING GROUP~~SOLUTIONS INC. AND SUBSIDIARIES

6.	~~Goodwill and Intangibles~~

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)

integration initiatives associated with the acquisition of John Wood Group's nuclear business. The ~~carrying value~~restructuring activities and related costs were comprised mainly of ~~goodwill by reportable segment~~ ~~appearing in~~separation and lease abandonment and sublease programs, while the ~~accompanying Consolidated Balance Sheets at December 29, 2017~~separation and ~~September 29, 2017~~integration activities and costs were ~~as follows (in millions):~~

Aerospace & Technology

Buildings & Infrastructure

Industrial

Petroleum & Chemicals

Total
Balance September 29, 2017

$
1,025.8

$
751.4

$
561.8

$
670.8
$

3,009.8
Acquired

945.2

1,417.9

–

335.7

2,698.8
Foreign Exchange Impact

4.2

3.1

2.3

2.7

12.3
Balance December 29, 2017

$
1,975.2

$
2,172.4

$
564.1

$
1,009.2
$

5,720.9

~~During~~mainly related to the ~~preparation~~engagement of consulting services and 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 ~~Form 10-Q for the first~~Company's acquisition of CH2M Hill Companies, Ltd. ("CH2M") during fiscal ~~quarter of 2017,~~2018, the Company ~~determined~~implemented certain restructuring plans that ~~its prior financial statements contained immaterial misstatements related to incorrect translation~~were comprised mainly of severance and lease abandonment programs as well as integration activities involving the ~~Company’s non-U.S. goodwill balances from local currency~~engagement of professional services and internal personnel dedicated to the ~~U.S. Dollar reporting currency. It was determined that~~Company's integration management efforts. The activities of these initiatives have been substantially completed.

Collectively, the Company had incorrectly used historical translation rates for the U.S. Dollar in place at the time of the Company’s recording of its foreign goodwill balances rather than using current translation rates at each balance sheet date in accordance with U.S. GAAP. The error dated backabove-mentioned restructuring activities are referred to ~~the time of our initial reporting of non-US goodwill balances in the late 1990s~~as “Restructuring and ~~affected our historical quarterly and annual reporting periods through the first fiscal quarter of 2017. Goodwill and accumulated~~ other comprehensive income in the Company’s September 30, 2016 consolidated balance sheet (which have not been adjusted) were each overstated by $209.9 million and was corrected in the first fiscal quarter of 2017 foreign currency translation adjustment. Consequently, the correction was a direct component of the overall translation adjustment amount of $287.5 million that was reported for the three months ended December 30, 2016. These adjustments had no impact on the Company’s Consolidated Statements of Earnings or Cash Flows.

charges.”

The following table ~~provides certain information related to~~summarizes the ~~Company’s acquired intangibles in~~impacts of the ~~accompanying Consolidated Balance Sheets at December 29, 2017~~Restructuring and ~~September 29, 2017 (in thousands):~~

Customer Relationships, Contracts, and Backlog

Developed Technology

Trade Names

Patents

Lease Intangible Assets

Other

Total

Balances, September 29, 2017
$
301,468

$
14,462

$
6,699

$
10,180

$ -

$
111

$
332,920

Acquisitions and additions

557,000

237

40,000

-

5,951

-

603,188

Amortization

(12,852
)

(384
)

(1,344
)

(104
)
-

(11
)

(14,695
)

Foreign currency translation

(346
)

-

26

(93
)
-

-

(413
)

Balances, December 29, 2017
$
845,270

$
14,315

$
45,381

$
9,983

$
5,951

$
100

$
921,000

~~In addition, we acquired $9.6 million in lease intangible liabilities~~other charges by reportable segment in connection with the CH2M, ~~acquisition.~~

KeyW, John Wood Group's nuclear business, Buffalo Group, StreetLight and BlackLynx acquisitions, the PA Consulting investment, the ECR sale, the CMS separation, the DVS segment reorganization and the Company's transformation initiatives relating to real estate and other staffing programs for the three and nine months ended June 30, 2023 and July 1, 2022 (in thousands):

The purpose of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) is to ~~the LOB.~~

We provide a broad range of technical, professional, and construction services including engineering, design, and architectural services; construction and construction management services; operations and maintenance services; and process, scientific, and systems consulting services. We provide our services through offices and subsidiaries located primarily in North America, South America, Europe,narrative analysis explaining the ~~Middle East, India, Australia, Africa, and Asia. We provide our services under cost-reimbursable and fixed-price contracts.~~

~~Page 13~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

~~The following tables present total services revenues~~reasons for ~~each reportable segment for the three months ended December 29, 2017 and December 30, 2016 (in thousands).~~

For the Three Months Ended

December 29, 2017

Aerospace & Technology

Buildings & Infrastructure

Industrial

Petroleum & Chemicals

Total

Technical Professional Services Revenues

Project Services
$
274,945

615,238

67,672

401,166

1,359,021

Process, Scientific, and Systems Consulting

244,128

-

-

6,945

251,073

Total Technical Professional Services Revenues

519,073

615,238

67,672

408,111

1,610,094

Field Services Revenues

Construction

121,869

42,653

496,632

212,415

873,569

Operations and Maintenance (“O&M”)

80,625

575

185,017

431

266,648

Total Field Services Revenues

202,494

43,228

681,649

212,846

1,140,217

Total Revenues
$
721,567

$
658,466

$
749,321

$
620,957

$
2,750,311

For the Three Months Ended

December 30, 2016

Aerospace & Technology

Buildings & Infrastructure

Industrial

Petroleum & Chemicals

Total

Technical Professional Services Revenues

Project Services
$
176,464

$
509,849

$
2,616

$
369,262

$
1,058,191

Process, Scientific, and Systems Consulting

199,829

—

—

6,917

206,746

Total Technical Professional Services Revenues

376,293

509,849

2,616

376,179

1,264,937

Field Services Revenues

Construction

82,787

66,641

535,336

262,183

946,947

Operations and Maintenance (“O&M”)

118,356

4,127

213,786

3,451

339,720

Total Field Services Revenues

201,143

70,768

749,122

265,634

1,286,667

Total Revenues
$
577,436

$
580,617

$
751,738

$
641,813

$
2,551,604

8.	~~Receivables~~

The following table presents the components of receivables appearing in the accompanying Consolidated Balance Sheets at December 29, 2017 and September 29, 2017, as well as certain other related information (in thousands):

December 29, 2017

September 29, 2017

Components of receivables:

Amounts billed, net

$
1,691,229

$
949,060

Unbilled receivables and other

1,577,005

1,118,144

Retentions receivable

25,268

35,339

Total receivables, net

$
3,293,502

$
2,102,543

Other information about receivables:

Amounts due from the United States federal
government, included above, net of advanced
billings

$
314,543

$
226,236

Claims receivable

$
4,600

$
4,600

Unbilled receivables and other and Retentions receivable represent reimbursable costs and amounts earned and reimbursable under contracts in progress as of the respective balance sheet dates. Such amounts become billable according to the contract terms, which usually provide that such amounts become billable upon the passage of time, achievement of certain milestones, or completion of the project. We anticipate that substantially all of such unbilled amounts will be billed and collected over the next twelve months.

~~Page 14~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

Claims receivable are included in receivables in the accompanying Consolidated Balance Sheets and represent certain costs incurred on contracts to the extent it is probable that such claims will result in additional contract revenue and the amount of such additional revenue can be reliably estimated.

9.	~~Property, Equipment and Improvements, Net~~

~~Property, Equipment and Improvements, Net in the accompanying Consolidated Balance Sheets at December 29, 2017 and September 29, 2017 consist of the following (in thousands):~~

December 29,
2017

September 29,
2017

Land

$
20,644

$
17,197

Buildings

137,336

93,313

Equipment

777,361

627,609

Leasehold improvements

274,141

220,295

Construction in progress

22,372

21,300

1,231,854

979,714

Accumulated depreciation and amortization

(657,820
)

(629,803
)

$
574,034

$
349,911

~~10.~~

~~Restructuring and Other Charges~~

Following the closing of the CH2M acquisition, these activities have continued into the first fiscal quarter of 2018 and include associated charges for professional services, personnel costs, severance and costs associated with co-locating Jacobs and CH2M offices amounting to approximately $19.3 million in pre-tax charges during first quarter ended December 29, 2017. These activities are expected to continue through 2019. These activities are not expected to involve the exit of any service types or client end-markets.

During the second fiscal quarter of 2017, the Company entered into strategic business restructuring activities associated with realignment of its Europe, U.K. and Middle East regional operations in our B&I segment. Pre-tax net charges of $22.6 million were recorded associated mainly with net realizable value write-offs on contract accounts receivable of $16.5 million, with additional charges recorded for statutory redundancy and severance costs of $1.4 million and other liabilities of $4.7 million which are both expected to be paid or settled within the next 12 months. Additional charges of $1.2 million were recorded under this business exit during third quarter fiscal 2017 associated mainly with contract accounts receivable charges.

During the second fiscal quarter of 2015, the Company began implementing a series of initiatives intended to improve operational efficiency, reduce costs, and better position itself to drive growth of the business in the future. We refer to these initiatives, in the aggregate, as the “2015 Restructuring”. These activities evolved and developed over time as management identified and evaluated opportunities formaterial changes in the Company’s (i) financial condition from the most recent fiscal year-end to June 30, 2023 and (ii) results of operations ~~(and related areas of potential cost savings),~~during the current fiscal period(s) as ~~economic conditions changed and as~~compared to the ~~realignment~~corresponding period(s) of the preceding fiscal year. In order to better understand such changes, readers of this MD&A should also read:

In the ~~three months ended December 30, 2016 (in thousands):~~

Three Months Ended

December 29, 2017

December 30, 2016

Aerospace & Technology
$
289

$

170

Buildings & Infrastructure

2,879

7,908

Industrial

435

2,524

Petroleum & Chemicals

3,363

13,584

Corporate

12,383

7,555

Total
$
19,349

$

31,741

~~The activity in~~fourth quarter fiscal 2022, Jacobs Engineering Group Inc. (the predecessor parent company) created a new holding company, Jacobs Solutions Inc., which, through a reverse triangular merger, became the ~~Company’s accrual for~~new parent company of Jacobs Engineering Group Inc. As a result of the ~~Restructuring and other activities for~~transaction, the ~~three-month period ended December 29, 2017 is as follows (in thousands):~~

Balance at September 29, 2017
$
174,343

CH2M Charges

19,349

Payments

(34,226
)
Balance at December 29, 2017
$
159,466

~~The following table summarizes the Restructuring and other activities by major type~~predecessor parent company's then-current stockholders automatically became stockholders of ~~costs in connection~~Jacobs Solutions Inc., on a one-for-one basis, with the ~~CH2M acquisition for the three-month period ended December 29, 2017~~same number of shares and ~~the 2015 Restructuring for the three months ended December 30, 2016 (in thousands):~~

Three Months Ended

Three Months Ended

December 29, 2017

December 30, 2016
Lease Abandonments
$

3,363
$
17,555

Involuntary Terminations

2,184

11,332

Outside Services

8,590

1,291

Other Restructuring Related

5,212

1,563

Total
$

19,349
$
31,741

~~Cumulative amounts incurred to date for Restructuring and other activities by each major type of cost as of December 29, 2017 are as follows (in thousands):~~

Lease Abandonments
$
242,222

Involuntary Terminations

186,763

Outside Services

32,957

Other restructuring related

14,145

Total
$
476,087

~~Page 16~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

~~11.~~

~~Long-term Debt~~

~~At December 29, 2017 and September 29, 2017, long-term debt consisted~~same ownership percentage of the ~~following:~~

December 29,
2017

September 29,
2017

Term Loan Facility

$
1,500,000

$
-

Less: Deferred Financing Fees

(3,779)

-

Revolving Credit Facility

1,085,159

235,000

Equipment Financing

6,553

-

Total Long-term debt, net

$
2,587,933

$
235,000

~~On February 7, 2014, Jacobs and certain of its subsidiaries entered into a $1.6 billion long-term unsecured, revolving credit facility (the “Revolving Credit~~ ~~Facility”) with a syndicate of large U.S. and international banks and financial institutions. The~~ ~~Revolving Credit~~ ~~Facility provides an accordion feature~~predecessor parent company’s common stock that ~~allows the Company and the lenders to increase the facility amount to $2.1 billion.~~

~~The total amount outstanding under the~~ ~~Revolving Credit~~ ~~Facility in the form of direct borrowings at December 29, 2017 was $1,085.2 million. The Company has issued $2.5 million in letters of credit under the~~ ~~Revolving Credit~~ ~~Facility, leaving $512.3 million~~ ~~of available borrowing capacity under the~~ ~~Revolving Credit~~ Facility at December 29, 2017. In addition, the Company had issued $491.6 million under separate, committed and uncommitted letter-of-credit facilities for total issued letters of credit of $494.1 million at December 29, 2017.

The Revolving Credit Facility expires in February 2020 and permits the Company to borrow under two separate tranches in U.S. dollars, certain specified foreign currencies, and any other currency that may be approved in accordance with the terms of the Revolving Credit Facility. Depending on the Company’s Consolidated Leverage Ratio (as defined in the credit agreement governing the Revolving Credit Facility), borrowings under the Revolving Credit Facility bear interest at either a eurocurrency rate plus a margin of between 1.0% and 1.5% or a base rate plus a margin of between 0% and 0.5%. The Revolving Credit Facility also provides for a financial letter of credit sub facility of $300.0 million, permits performance letters of credit, and provides for a $50.0 million sub facility for swing line loans. Letters of credit are subject to fees based on the Company’s Consolidated Leverage Ratio at the time any such letter of credit is issued. The Company pays a facility fee of between 0.100% and 0.250% per annum depending on the Company’s Consolidated Leverage Ratio. Amounts outstanding under the Revolving Credit Facility may be prepaid at the option of the Company without premium or penalty, subject to customary breakage fees in connection with the prepayment of euro currency loans. The Revolving Credit Facility contains affirmative, negative, and financial covenants customary for financings of this type including, among other things, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales and transactions with affiliates. In addition, the Revolving Credit Facility contains customary events of default. We were in compliance with our debt covenants at December 29, 2017.

On September 28, 2017, the Company entered into a Second Amendment to the Revolving Credit Facility, which provides for, among other things, an amendment to certain financial definitions used in the Revolving Credit Facility, including “Consolidated EBITDA”. These amendments were effective upon the consummation of the acquisition of CH2M in December 2017.

On September 28, 2017, the Company entered into a $1.5 billion unsecured delayed-draw term loan facility (the “Term Loan Facility”) with a syndicate of financial institutions as lenders and letter of credit issuers and BNP Paribas as administrative agent, TD Bank, N.A. and U.S. Bank National Association as co-documentation agent, BNP Paribas Securities Corp., The Bank of Nova Scotia and Wells Fargo Securities, LLC as joint book runners, and as joint arrangers.

We incurred loans under the Term Loan Facility on December 15, 2017 in connection with the closing of the CH2M acquisition in order to pay cash consideration for the acquisition, and to pay fees and expenses related to the acquisition and the Term Loan Facility. The Term Loan Facility matures in December 2020 and permits the Company to borrow in U.S. dollars at a base rate or a eurocurrency rate. Depending on the Company’s consolidated leverage ratio, borrowings under the Term Loan Facility bear interest at either a eurocurrency rate plus a margin of between 1.00% and 1.50% or a base rate plus a margin of between 0.00% and 0.50%. Amounts outstanding under the Term Loan Facility may be prepaid at the option of the Company without premium or penalty, subject to customary breakage fees in connection with the prepayment of eurocurrency loans.

The Term Loan Facility contains affirmative, negative and financial covenants customary for financings of this type, including, among other things, limitations on certain other indebtedness, investments, liens, mergers, asset sales and transactions with affiliates. In addition, the Term Loan Facility contains customary events of default. We were in compliance with these covenants at December 29, 2017.

~~Page 17~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

~~In conjunction with the acquisition of CH2M, the Company assumed certain equipment financing that was incurred by CH2M~~they held immediately prior to the ~~acquisition.~~ transaction.

Net earnings attributable to the Company from continuing operations for the ~~three months~~third fiscal quarter ended ~~December~~June 30, ~~2016 in these taxes. Additionally, all excess tax benefits related to share-based payments in our provision for income taxes are now classified as anoperating activity along with other income taxes in the statement~~2023 were $163.9 million (or $1.29 per diluted share), a decrease of ~~cash flows and this change is applied prospectively. These items were historically recorded in additional paid-in capital and in financing activities. The Company recognized $0.9~~$32.4 million, ~~of excess tax benefits related to share-based payments in our provision for income taxes for the three months ended December 29, 2017.~~

Finally, we have elected to begin accounting for share-based compensation award forfeitures when they occur instead of estimating the number of forfeitures expected in accordance with the new guidance. This change in accounting policy for share-based compensation award forfeitures resulted in a $1.8 million cumulative effect of change in accounting principle to retained earnings in the Company’s consolidated balance sheets.

~~15.~~

~~Other Comprehensive Income~~

~~The following table presents amounts reclassified~~ from change in pension liabilities in other comprehensive income to direct cost of contracts and SG&A expenses in the Company’s Consolidated Statements of Earnings for the three months ended December 29, 2017 and December 30, 2016 related to the Company’s defined benefit pension plans (in thousands):

For the Three Months Ended

December 29, 2017

December 30, 2016

Amortization of Defined Benefit Items:

Actuarial losses

$
3,596

$
(3,556
)

Prior service cost

77

Total Before Income Tax

3,596

(3,479
)

Income Tax Benefit

(125
)

803

Total reclassifications, after-tax

$
3,471

$
(2,676
)

~~16.~~

~~Income Taxes~~

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted in the United States. The Act reduces the top corporate U.S. federal statutory tax rate from 35% to 21% starting on January 1, 2018, resulting in a blended statutory tax rate for fiscal year filers. The Company’s blended federal statutory tax rate for fiscal 2018 is 24.6%. It also requires companies to pay a one-time transition tax onnet earnings of certain foreign subsidiaries, places limitations and exclusions on varied tax deductions and creates new taxes on certain foreign sourced earnings. The majority of the tax provisions, excluding the change in corporate tax rates, are effective for the first tax year beginning after January 1, 2018. For Jacobs that will be the Company’s taxable year beginning October 1, 2018.

Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allows registrants to record provisional amounts during a one year “measurement period” similar to that used when accounting for business combinations. However, the measurement period is deemed to have ended earlier when the registrant has obtained, prepared and analyzed the information necessary to finalize its accounting. During the measurement period, impacts of the law are expected to be recorded at the time a reasonable estimate for all or a portion of the effects can be made, and provisional amounts can be recognized and adjusted as information becomes available, prepared or analyzed.

SAB 118 summarizes a three-step process to be applied at each reporting period to account for and qualitatively disclose: (1) the effects of the change in tax law for which accounting is complete; (2) provisional amounts$196.3 million (or adjustments to provisional amounts) for the effects of the tax law where accounting is not complete, but that a reasonable estimate has been determined; and (3) a reasonable estimate cannot yet be made and therefore taxes are reflected in accordance with law prior to the enactment of the Act.

As of the end of the first quarter of fiscal 2018, December 29, 2017, we had not completed our accounting for the tax effects of the enactment of the Act. However, we have made a provisional estimate of the effects of the statutory tax rate reduction impact on our existing deferred tax balances and the one-time transition tax. We are not yet able to make a reasonable estimate on the other aspects of the Act and continue to account for those items based on our existing accounting under ASC 740, Income Taxes, and the provisions of the tax laws that were in effect immediately prior to enactment of the Act.

~~Page 20~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

For the deferred tax balances, we remeasured the U.S. deferred tax assets and liabilities based on the rates at which they are expected to reverse in the future, which is generally 21%. The Company’s provisional remeasurement resulted in a $24 million net favorable discrete benefit to income tax expense for the period. In addition, the Company has reached a preliminary conclusion that it should record a valuation allowance with respect to certain foreign tax credit deferred tax assets in the current quarter as a result of the Tax Act. The estimated amount of the valuation allowance is $53 million and is treated as a discrete charge for the period. We are still analyzing many aspects of the Act and refining our calculations, which could potentially affect the measurement of these balances or potentially give rise to new deferred tax assets and liabilities.

The Act calls for a one-time tax on deemed repatriation of foreign earnings. This one-time transition tax is based on our total post-1986 earnings and profits (E&P) of certain of our foreign subsidiaries. We have made a provisional estimate of the transition tax. Based upon our review of the Company’s historical foreign tax credit position and post-1986 E&P, it is estimated at this time that the Company should not have any liability for the transition tax. However, we are still in the process of completing our calculation of the total post-1986 E&P for the newly acquired foreign subsidiaries related to the recent CH2M acquisition. Our estimate may change when we finalize the calculation of post-1986 foreign E&P previously deferred from U.S. federal taxation and finalize the amounts held in cash or other specified assets.

~~The Company’s consolidated effective income tax rate for the three months ended December 29, 2017 was 93.9%, an increase from 28.8%~~$1.52 per diluted share) for the corresponding period last year. ~~The increase~~Higher year over year underlying operating performance in the ~~quarterly effective tax rate~~third fiscal quarter of 2023 was impacted by $25.0 million higher pre-tax Restructuring and other charges and transaction costs compared to the same fiscal quarter of 2022, with this increase due primarily to PA Consulting restructuring program charges (primarily employee separation costs) and CMS separation expenses (mainly professional services), which is ~~due~~discussed in Note 16- Restructuring and Other Charges. Third quarter fiscal 2023 other expense, net, was $43.1 million, an increase of $49.4 million versus third quarter fiscal 2022 income of $6.4 million, with the current period primarily impacted by unfavorable higher net interest expense, unfavorable currency exchange gains and losses and higher pension costs compared to ~~$29~~the prior year quarter, as discussed further below, with fiscal 2022 benefiting from a $13.9 million inpre-tax gain related to a cost method investment sold during the period. Further, our reported net ~~discrete charges during~~earnings for the current year quarter ~~comprised~~were favorably impacted by lower income taxes of ~~a $24~~$5.3 million ~~benefit from~~compared to the ~~provisional remeasurement of the deferred tax items in the U.S.,~~fiscal 2022 period, attributable to lower earnings before taxes offset by a higher effective tax rate in the current quarter. Finally, net earnings attributable to redeemable noncontrolling interests were $7.2 million lower for the quarter-to-date period due to lower net after-tax earnings results in our PA Consulting investment compared to the prior year.

The amount of income taxes the Company pays is subject to ongoing audits by tax jurisdictions around the world. In the normal course of business, the Company is subject to examination by tax authorities throughout the world, including such major jurisdictions as Australia, Canada, India, the Netherlands, the United Kingdom and the United States. Our estimate of the potential outcome of any uncertain tax issue is subject to our assessment of the relevant risks, facts, and circumstances existing at the time. The Company believes that it has adequately provided for reasonably foreseeable outcomes related to these matters. However, future results may include favorable or unfavorable adjustments to our estimated tax ~~liabilities~~liabilities in the period the assessments are made or resolved, which may impact our effective tax rate.

It is reasonably possible that, during the next 12 months, we may realize a decrease in our uncertain tax positions of approximately $7 million as a result of concluding various tax audits and closing tax years.

On December 15, 2017 the Company completed the acquisition of CH2M. For income tax purposes, the transaction was accounted for as a stock purchase. As a result of the acquisition, the Company adjusted its U.S. GAAP opening balance sheet of CH2M to reflect preliminary estimates of the fair value of the net assets acquired. For income tax purposes, the tax attributes and basis of net assets acquired carryover without any step-up to fair value. The Company has made preliminary estimates and recorded deferred taxes associated with the purchase accounting. It is expected that the Company will make adjustments to the purchase accounting over the relevant measurement period as allowed by ASC 805.

~~17.~~

~~Earnings Per Share and Certain Related Information~~

Basic and diluted earnings per share (“EPS”) are computed using the two-class method, which is an earnings allocation method that determines EPS for common shares and participating securities. The undistributed earnings are allocated between common shares and participating securities as if all earnings had been distributed during the period. Participating securities and common shares have equal rights to undistributed earnings. Net earnings used for the purpose of determining basic and diluted EPS is determined by taking net earnings, less earnings available to participating securities.

~~Page 21~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

The following table reconciles the denominator used to compute basic EPS to the denominator used to compute diluted EPS for the three months ended December 29, 2017 and December 30, 2016 (in thousands):

For the Three Months Ended

December 29, 2017

December 30, 2016

Numerator for Basic and Diluted EPS:

Net income

$
2,163

$
60,536

Net income allocated to participating securities

(15
)

—

Net income allocated to common stock for EPS calculation

$
2,148

$
60,536

Denominator for Basic and Diluted EPS:

Weighted average basic shares

124,122

119,438

Effect of dilutive securities:

Stock compensation plans

1,023

1,477

Restricted stock

886

936

Diluted shares

126,031

121,851

Shares allocated to participating securities

(886
)

—

Shares used for calculating diluted EPS attributable to common stock

125,145

121,851

Basic EPS

$
0.02

$
0.50

Diluted EPS

$
0.02

$
0.50

~~Share Repurchases~~

On July 23, 2015, the Company’s Board of Directors authorized a share repurchase program of up to $500 million of the Company’s common stock. The following table summarizes the activity under this program from the authorization date (in thousands, except per-share amounts):

Amount Authorized

Average Price Per
Share (1)

Total Shares
Retired

Shares
Repurchased

$
500,000

$
48.44

5,156

5,156

~~(1)~~

~~Includes commissions paid and calculated at the average price per share since the repurchase program authorization date.~~

~~There were no share repurchases during the first fiscal quarter of 2018.~~

~~Page 22~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

Share repurchases may be executed through various means including, without limitation, open market transactions, privately negotiated transactions or otherwise. The share repurchase program does not obligate the Company to purchase any shares and expires on July 22, 2018. The authorization for the share repurchase program may be terminated, increased or decreased by the Company’s Board of Directors in its discretion at any time. The timing of share repurchases may depend upon market conditions, other uses of capital, and other factors.

~~Dividend Program~~

On December 1, 2016, the Company announced that the Board of Directors approved the initiation of a cash dividend program. A quarterly dividend of $0.15 per share was paid on November 10, 2017 to shareholders of record as of the close of business on September 27, 2017. There were no dividends paid in the corresponding period of fiscal 2017.

On January 18, 2018, the Company’s Board of Directors declared a quarterly dividend of $0.15 per share of the Company’s common stock that will be paid on March 16, 2018, to shareholders of record on the close of business on February 16, 2018. Future dividend payments are subject to review and approval by the Company’s Board of Directors.

~~18.~~

~~Commitments and Contingencies~~

In the normal course of business, we are subject to certain contractual guarantees and litigation. The guarantees to which we are a party generally relate to project schedules and plant performance. Most of the litigation in which we are involved has us as a defendant in workers’ compensation, personal injury, environmental, employment/labor, professional liability, and other similar lawsuits.

We maintain insurance coverage for various aspects of our business and operations. Our insurance programs have varying coverage limits and maximums, and insurance companies may seek to not pay any claims we might make. We have also elected to retain a portion of losses that occur through the use of various deductibles, limits, and retentions under our insurance programs. As a result, we may be subject to future liability for which we are only partially insured or completely uninsured. We intend to mitigate any such future liability by continuing to exercise prudent business judgment in negotiating the terms and conditions of our contracts. Our insurers are also subject to business risk and, as a result, one or more of them may be unable to fulfill their insurance obligations due to insolvency or otherwise.

Additionally, as a contractor providing services to the U.S. federal government and several of its agencies, we are subject to many levels of audits, investigations, and claims by, or on behalf of, the U.S. federal government with respect to our contract performance, pricing, costs, cost allocations, and procurement practices. Furthermore, our income, franchise, and similar tax returns and filings are also subject to audit and investigation by the Internal Revenue Service, most states within the U.S., as well as by various government agencies representing jurisdictions outside the U.S.

We record in our Consolidated Balance Sheets amounts representing our estimated liability relating to such claims, guarantees, litigation, and audits and investigations. We perform an analysis to determine the level of reserves to establish for insurance-related claims that are known and have been asserted against us, and for insurance-related claims that are believed to have been incurred based on actuarial analysis, but have not yet been reported to our claims administrators as of the respective balance sheet dates. We include any adjustments to such insurance reserves in our consolidated results of operations.

The Company believes, after consultation with counsel, that such guarantees, litigation, U.S. government contract-related audits, investigations and claims, and income tax audits and investigations should not have any material adverse effect on our consolidated financial statements.

On September 30, 2015, Nui Phao Mining Company Limited (“NPMC”) commenced arbitration proceedings against Jacobs E&C Australia Pty Limited (“Jacobs E&C”). The arbitration is pending in Singapore before the Singapore International Arbitration Centre. In March 2011, Jacobs E&C was engaged by NPMC for the provision of management, design, engineering, and procurement services for the Nui Phao mine/mineral processing project in Vietnam. In the Notice of Arbitration and in a subsequently filed Statement of Claim and Supplementary Statement of Claim dated February 1, 2016 and February 26, 2016, respectively, NPMC asserts various causes of action and alleges that the quantum of its claim exceeds $167 million. Jacobs has denied liability and is vigorously defending this claim. A three week hearing on the merits concluded on December 15, 2017 and a decision is expected later this year. The Company does not expect the resolution of this matter to have a material adverse effect on its financial condition, results of operations and/or cash flows.

On December 7, 2009, the Judicial Council of California, Administrative Office of the Courts (“AOC”) initiated an action in the San Francisco County Superior Court against Jacobs Facilities Inc. (“JFI”) and Jacobs Project Management (“JPM”) and subsequently added Jacobs as a defendant. The action arises out of a contract between AOC and JFI pursuant to which JFI provided regular maintenance and repairs at certain AOC court facilities. AOC has alleged, among other things, that the Jacobs entities are required

~~Page 23~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

under California’s Contractors’ State License Law (“CSLL”) to disgorge certain fees paid by AOC, and the Jacobs entities have, among other things, cross-claimed for unpaid sums for work performed. On May 2, 2012, the jury returned a special verdict in favor of the Jacobs entities finding, among other things, JPM was owed approximately $4.7 million in unpaid fees and that JFI was not required to disgorge the approximate $18.3 million that AOC had paid for work performed. On August 20, 2015, the California Court of Appeal reversed the jury’s verdict, holding that JFI had violated the CSLL. The Court of Appeal remanded to the San Francisco County Superior Court for an evidentiary hearing to determine whether the JFI had “substantially complied” with the CSLL under California Business and Professions Code Section 7031(e). Establishing “substantial compliance” would prevent $18.3 million in disgorgement against Jacobs and permit Jacobs to recover $4.7 million. The evidentiary hearing on substantial compliance was conducted between July 18 and August 5, 2016. On December 29, 2016, the court issued a Statement of Decision in favor of the Company, finding that Jacobs Facilities had substantially complied with the CSLL, and entered a judgment in favor of JPM in the amount of $4.7 million plus prejudgment interest. On January 30, 2017, AOC filed a notice of appeal. The Company does not expect the resolution of this matter to have a material adverse effect on its financial condition, results of operations and/or cash flows.

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 JV 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 for the engineering, procurement, construction and commissioning of a 360 MW Combined Cycle Power Plant for INPEX Operations Australia Pty Limited at Blaydin Point, Darwin, NT, Australia. In January 2017, the Consortium terminated the Subcontract because of JKC’s repudiatory breach and demobilized from the work site. JKC claimed the Consortium abandoned the work and itself purported to terminate the Subcontract. The Consortium and JKC are now in dispute over the termination. In August 2017, the Consortium filed an International Chamber of Commerce arbitration against JKC for $665.5 million for repudiatory breach or, in the alternative, seeking damages for unresolved contract claims and change orders. JKC has provided a preliminary estimate of the monetary value of its claims in the amount of approximately $1.66 billion. If the Consortium is found liable, this matter could have a material adverse effect on the Company’s business, financial condition, results of operations and /or cash flows, particularly in the short term. However, the Consortium has denied liability and is vigorously defending these claims, and based on the information currently available, the Company does not expect the resolution of this matter to have a material adverse effect on the Company’s business, financial condition, results of operations, or cash flows.

~~Page 24~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

~~Item 2.~~

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

~~General~~

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 29, 2017, 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:

The discussion of the critical and significant accounting policies used by the Company in preparing its consolidated financial statements. The most current discussion of our critical accounting policies appears in Item 7, ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~of our 2017 Form 10-K, and the most current discussion of our significant accounting policies appears in Note 2,~~ ~~Significant Accounting Polices~~ ~~in Notes to Consolidated Financial Statements of our 2017 Form 10-K;~~

~~The Company’s fiscal 2017 audited consolidated financial statements and notes thereto included in our 2017 Form 10-K; and~~

~~Item 7,~~ ~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~ ~~included in our 2017 Form 10-K.~~

In addition to historical information, this MD&A and other parts of this Quarterly Report on Form 10-Q may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as “expects,” “anticipates,” “believes,” “seeks,” “estimates,” “plans,” “intends,” “future,” “will,” “would,” “could,” “can,” “may,” and similar words are intended to identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although such statements are based on management’s current estimates and expectations, and/or currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Some of the factors that could cause or contribute to such differences include, but are not limited to, those listed and discussed in Item 1A, ~~Risk Factors~~ included in this quarterly report on Form 10-Q and our 2017 Form 10-K. We undertake no obligation to release publicly any revisions or updates to any forward-looking statements. We encourage you to read carefully the risk factors described in this quarterly report on Form 10-Q and our 2017 Form 10-K and in other documents we file from time to time with the United States Securities and Exchange Commission.

~~Lines of Business~~

The Company’s operations are organized around four global lines of business (“LOBs”), which also serve as the Company’s operating segments: Aerospace & Technology, Buildings & Infrastructure, Industrial and Petroleum & Chemicals. The Company’s LOB leadership and internal reporting structures report to the Chief Executive Officer, who is also the Chief Operating Decision Maker (“CODM”), and enable the CODM to evaluate the performance of each of these segments and make appropriate resource allocations among each of the segments. For purposes of the Company’s goodwill impairment testing, it has been determined that the Company’s operating segments are also its reporting units based on management’s conclusion that the components comprising each of its operating segments share similar economic characteristics and meet the aggregation criteria in accordance with ASC 350, ~~Intangibles-Goodwill and Other.~~

Under the current organization, each LOB has a president that reports directly to the CODM. In addition, the sales function is managed on an LOB basis, and accordingly, the associated cost is embedded in the new segments and reported to the respective LOB presidents. In addition, a portion of the costs of other support functions (e.g., finance, legal, human resources, and information technology) is allocated to each LOB 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 Management Incentive Plan (“MIP”) and the expense associated with the Jacobs Engineering Group Inc. 1999 Stock Incentive Plan (“1999 SIP”) have likewise been charged to the LOBs except for those amounts determined to relate to the business as a whole (which amounts remain in corporate’s results of operations).

~~Aerospace and Technology~~ ~~(A&T)~~ – We provide an in-depth range of scientific, engineering, construction, nuclear and technical support services to the aerospace, defense, technical and automotive industries in several countries. Long-term clients include the Ministry of Defence in the U.K., the UK Nuclear Decommissioning Authority, NASA, the U.S. Department of Defense (“DoD”), the U.S. Special Operations Command ("USSOCOM"), the U.S. Intelligence community, and the Australian Department of Defence. Specific to NASA, one of our major government customers in the U.S., is our ability to design, build, operate, and maintain

~~Page 25~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

highly complex facilities relating to space systems, including test and evaluation facilities, launch facilities, and support infrastructure. We provide environmental characterization and restoration services to commercial and government customers both in the U.S. and U.K. This includes designing, building and operating high hazard remediation systems including for radiologically contaminated media.

In addition, we design and build aerodynamic, climatic, altitude and acoustic facilities in support of the automotive industry, as well as provide a wide range of services in the telecommunications market.

Our experience in the defense sector includes military systems acquisition management and strategic planning; operations and maintenance of test facilities and ranges; test and evaluation services in computer, laboratory, facility, and range environments; test facility computer systems instrumentation and diagnostics; and test facility design and build. We also provide systems engineering and integration of complex weapons and space systems, as well as hardware and software design of complex flight and ground systems.

We have provided advanced technology engineering services to the DoD for more than 50 years, and currently support major defense programs in the U.S. and internationally. We operate and maintain several DoD test centers and provide services and assist in the acquisition and development of systems and equipment for Special Operations Forces, as well as the development of biological, chemical, and nuclear detection and protection systems.

We maintain enterprise information systems for government and commercial clients worldwide, ranging from the operation of complex computational networks to the development and validation of specific software applications. We also support the DoD and the intelligence community in a number of information technology programs, including network design, integration, and support; command and control technology; development and maintenance of databases and customized applications; and cyber security solutions.

~~Also, the A&T segment includes professional services related to the Federal business of CH2M which adds substantial capabilities in Environmental and Nuclear remediation businesses.~~

~~Buildings & Infrastructure~~ ~~(B&I)~~ – We provide services to transit, aviation, built environment, mission critical, rail, and civil construction projects throughout North America, Europe, India, the Middle East, Australia, and Asia. Our representative clients include national government departments/agencies in the U.S., U.K., Australia, and Asia, state and local departments of transportation within the U.S, and private industry freight transport firms.

Typical projects include providing development/rehabilitation plans for highways, bridges, transit, tunnels, airports, railroads, intermodal facilities, and maritime or port projects. Our interdisciplinary teams can work independently or as an extension of the client’s staff. We have experience with alternative financing methods, which have been used in Europe through the privatization of public infrastructure systems.

Our water infrastructure group aids emerging economies, which are investing heavily in water and wastewater systems, and governments in North America and Europe, which are addressing the challenges of drought and an aging infrastructure system. We develop or rehabilitate critical water resource systems, water/wastewater conveyance systems, and flood defense projects.

We also plan, design, and construct buildings for a variety of clients and markets. We believe our global presence and understanding of contracting and delivery demands keep us well positioned to provide professional services worldwide. Our diversified client base encompasses both public and private sectors and relates primarily to institutional, commercial, government and corporate buildings, including projects at many of the world's leading medical and research centers, and universities. We focus our efforts and resources in two areas: where capital-spending initiatives drive demand, and where changes and advances in technology require innovative, value-adding solutions. We also provide integrated facility management services (sometimes through joint ventures with third parties) for which we assume responsibility for the ongoing operation and maintenance of entire commercial or industrial complexes on behalf of clients.

We have specific capabilities in energy and power, master planning, and commissioning of office headquarters, aviation facilities, mission-critical facilities, municipal and civic buildings, courts and correctional facilities, mixed-use and commercial centers, healthcare and education campuses, and recreational complexes. For advanced technology clients, who require highly specialized buildings in the fields of medical research, nano science, biotechnology, and laser sciences, we offer total integrated design and construction management solutions. We also have global capabilities in the pharma-bio, data center, government intelligence, corporate headquarters/interiors, and science and technology-based education markets. Our government building projects include large, multi-year programs in the U.S. and Europe supporting various U.S. and U.K. government agencies

~~Page 26~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

~~Our B&I segment also includes additional capabilities from the CH2M acquisition including Water, Remediation Consulting, Design Build and Conveyance capabilities.~~

~~Industrial~~ – We provide engineering, procurement, project management, construction, and on-site maintenance to our global clients in the Life Sciences, Mining & Minerals, Specialty Chemicals & Manufacturing and Field Services markets. We provide our Life Sciences clients single-point consulting, engineering, procurement, construction management, and validation project delivery, enabling us to execute capital programs on a single-responsibility basis. Typical projects in the life sciences sector include laboratories, research and development facilities, pilot plants, bulk active pharmaceutical ingredient production facilities, full-scale biotechnology production facilities, and tertiary manufacturing facilities.

~~We provide services relating to modular construction, as well as other consulting and strategic planning to help our clients complete capital projects faster and more efficiently.~~

In addition, we offer services in containment, barrier technology, locally controlled environments, building systems automation, and off-the-site design and fabrication of facility modules, as well as vaccine production and purification, and aseptic processing.

Our mining and minerals business targets the non-ferrous and ferrous metal markets, precious metals, energy minerals (uranium, coal, oil sands), and industrial and fertilizer minerals (borates, trona, phosphates and potash). We work with many resource companies undertaking new and existing facility upgrades, process plant and underground and surface material handling and infrastructure developments.

We offer project management, front-end studies, full engineering, procurement and construction management (“EPCM”) and engineering, procurement and construction (“EPC”) capabilities, and completions, commissioning and start-up services specializing in new plant construction, brownfield expansions, and sustaining capital and maintenance projects. We are also able to deliver value to our mining clients by providing distinctive adjacent large infrastructure capabilities to support their mining operations.

We provide a wide range of services, technology and manufactured equipment through our specialty chemicals group, where we own and license our proprietary technology. Our specialty chemicals areas are focused on sulfuric acid, sulphur, bleaching chemicals for pulp & paper, and synthetic chemicals, and manufactured equipment. Our manufacturing business areas include the Food & Beverage, Consumer Products, Semi-Conductor, and Pulp & Paper markets.

~~Our global Field Services unit supports construction and operations and maintenance (“O&M”) across the company, and performs our direct hire services.~~

Our construction activities include providing both construction management services and traditional field construction services to our clients. Historically, our field construction activities focused primarily on those construction projects where we perform much of the related engineering and design work (EPC/EPCM). However, we deliver construction-only projects when we have negotiated pricing and other contract terms we deem acceptable and which result in a fair return for the degree of risk we assume.

In our O&M business, we provide all services required to operate and maintain large, complex facilities on behalf of clients including asset management, direct hire maintenance and operations, complex turn-around planning and execution, and small capital programs. We provide key management and support services over all aspects of the operations of a facility, including managing subcontractors and other on-site personnel.

~~Petroleum & Chemicals~~ ~~(P&C)~~ –We provide integrated delivery of complex projects for our Oil and Gas, Refining, and Petrochemicals clients. Bridging the upstream, midstream and downstream industries, our services encompass consulting, engineering, procurement, construction, maintenance, and project management.

We provide services relating to onshore and offshore oil and gas production facilities, including fixed and floating platforms and subsea tie-backs, as well as full field development solutions, including processing facilities, gathering systems, transmission pipelines and terminals. Our heavy oil experience makes us a leader in upgrading, steam-assisted gravity drainage and in-situ oil sands projects. We have developed modular well pad and central processing facility designs. We also provide fit-for-purpose and standardized designs in the onshore conventional and unconventional space, paying particular attention to water and environmental issues.

In addition, we provide our refining customers with feasibility/economic studies, technology evaluation and conceptual engineering, front end loading (FEED), detailed engineering, procurement, construction, maintenance and commissioning services. We deliver installed EPC solutions as to grass root plants, expansions and revamps of existing units. Our focus is on both

~~Page 27~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

the inside the battery limit (ISBL) processing units as well as utilities and off-sites. We have engineering alliances and maintenance programs that span decades with core clients. With the objective of driving our clients’ total installed costs down, we endeavor to leverage emerging market sourcing and high value engineering. Our Comprimo Sulfur Solutions® is a significant technology for gas treatment and sulfur recovery plants around the world.

We provide services as to technically complex petrochemical facilities; from new manufacturing complexes, to expansions and modifications and management of plant relocations. We have experience with many licensed technologies, integrated basic petrochemicals, commodity and specialty chemicals projects, and olefins, aromatics, synthesis gas and their respective derivatives.

~~CH2M Acquisition~~

On December 15, 2017, the Company completed the acquisition of CH2M. For purposes of the Company’s first quarter fiscal 2018 segment reporting, the operating financial information of CH2M has been categorized within the Company’s existing LOB business structure, with its sales and operating profit results for the time period during which CH2M has been under the ownership of the Company (December 15, 2017-December 29, 2017) being allocated to the Company’s A&T, B&I and P&C lines of business under a transitional business organization structure. As part of the integration of the CH2M businesses into the Company’s business operating structures, the Company expects to realign its business financial reporting framework into three global business lines by no later than the second half of fiscal 2018 under the following new lines of business:

~~• Aerospace, Technology, Environmental and Nuclear (ATEN): serving global aerospace, automotive, defense, telecommunications, nuclear and environmental clients and the U.S. intelligence community.~~

• Buildings, Infrastructure and Advanced Facilities (BIAF): serving broad sectors including buildings, water, transportation (roads, rail, aviation and ports), and advanced facilities for life sciences, semiconductors, data centers, consumer products and other advanced manufacturing operations.

• Energy, Chemicals and Resources (ECR): serving energy, chemicals and resources sectors, including upstream, midstream and downstream oil, gas, refining, chemicals and mining and minerals industries.

Restructuring and Other Charges

During third quarter fiscal 2023, the ~~first fiscal quarter~~Company approved a plan to improve business processes and cost structure of ~~2018~~our PA Consulting investment by reorganizing senior management and ~~include associated charges for professional services, personnel costs, severance and costs associated~~reducing headcount. In connection with ~~co-locating Jacobs and CH2M offices and have amounted to~~these initiatives, the Company incurred approximately ~~$19.3~~ $17million in pre-tax charges during ~~first quarter~~the three and nine month periods ended ~~December 29, 2017. These activities~~June 30, 2023, which are expected to ~~continue through 2019.~~be settled in cash by the end of the fiscal year. These activities, ~~are not expected to involve the exit of any service types or client end-markets. The Company is targeting to achieve annual cost savings of $150 million upon the completion of these activities.~~

During the second fiscal quarter of 2017, the Company entered into strategic business restructuring activities associated with realignment of its Europe, U.K. and Middle East regional operations in our B&I segment. Pre-tax net charges of $22.6 million were recorded associated mainly with net realizable value write-offs on contract accounts receivable of $16.5 million, with additional charges recorded for statutory redundancy and severance costs of $1.4 million and other liabilities of $4.7 million which are ~~both~~ expected to be paid or settled within the next 12 months. Additional charges of $1.2 million were recorded under this business exit during third quarter fiscal 2017 associated mainly with contract accounts receivable charges.

During the second fiscal quarter of 2015, the Company began implementing a series of initiatives intended to improve operational efficiency, reduce costs, and better position itself to drive growth of the business in the future. We refer to these initiatives, in the aggregate, as the “2015 Restructuring”. These activities evolved and developed over time as management identified and evaluated opportunities for changes in the Company’s operations (and related areas of potential cost savings), as economic conditions changed and as the realignment of the Company’s operations into its four global LOBs was implemented. Actions related to the 2015 Restructuring included involuntary terminations, the abandonment of certain leased offices, combining operational organizations, and the colocation of employees into other existing offices. These activities did not involve the exit of any service types or client end-markets. The 2015 Restructuring wassubstantially completed ~~in fiscal 2017 although related cash payments continue under the related obligations recorded in connection with these activities.~~

~~Page 28~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

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

The following table summarizes the impacts of the Restructuring and other charges on the Company's reportable segment income by line of business in connection with the CH2M acquisition for the three months ended December 29, 2017 and the 2015 Restructuring for the three months ended December 30, 2016 (in thousands):

Three Months Ended

December 29, 2017

December 30, 2016
Aerospace & Technology
$
289

$

170
Buildings & Infrastructure

2,879

7,908
Industrial

435

2,524
Petroleum & Chemicals

3,363

13,584
Corporate

12,383

7,555
Total
$
19,349

$

31,741

~~The activity in the Company’s accrual for the Restructuring and other activities for the three-month period ended December 29, 2017 is as follows (in thousands):~~

Balance at September 29, 2017
$
174,343

CH2M Charges

19,349

Payments

(34,226
)
Balance at December 29, 2017
$
159,466

The following table summarizes the Restructuring and other activities by major type of costs in connection with the CH2M acquisition for the three-month period ended December 29, 2017 and the 2015 Restructuring for the three months ended December 30, 2016(in thousands):

~~Cumulative amounts incurred to date for Restructuring and other activities by each major type of costs as of December 29, 2017 are as follows (in thousands):~~

Lease Abandonments
$
242,222

Involuntary Terminations

186,763

Outside Services

32,957

Other restructuring related charges

14,145

Total
$
476,087

~~Page 29~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

~~Results of Operations for the three months ended December 29, 2017 and December 30, 2016~~

~~(in thousands, except per share information)~~

For the Three Months Ended

December 29, 2017

December 30, 2016

Revenues

$
2,750,311

$
2,551,604

Direct cost of contracts

(2,263,131
)

(2,132,292
)

Gross Profit

487,180

419,312

Selling, general and administrative expenses

(439,536
)

(330,684
)

Operating Profit

47,644

88,628

Other Income (Expense):

Interest income

3,834

1,486

Interest expense

(7,092
)

(3,518
)

Miscellaneous expense, net

(2,470
)

(716
)

Total other expense, net

(5,728
)

(2,748
)

Earnings Before Taxes

41,916

85,880

Income Tax Expense

(39,355)

(24,727
)

Net Earnings of the Group

2,561

61,153

Net Earnings Attributable to Noncontrolling Interests

(398
)

(617
)

Net Earnings Attributable to Jacobs

$
2,163

$
60,536

Net Earnings Per Share:

Basic

$
0.02

$
0.50

Diluted

$
0.02

$
0.50

~~Overview – Three Months EndedDecember 29, 2017~~

Net earnings for the first fiscal quarter of 2018 ended December 29, 2017 were $2.2 million (or $0.02 per diluted share), a decrease of $58.4 million from $60.5 million (or $0.50 per diluted share) for the corresponding period last year. Included in the Company’s operating results for the 2018 quarterly period were $14.7 million (or $0.11 per share) in after tax Restructuring and Other Charges, $51.4 million (or $0.41 per share) in transaction costs associated with the Company’s December 15, 2017 acquisition of ~~CH2M HILL Companies, Ltd. (“~~CH2M”) and $28.8 million in income tax charges associated with the Tax Cuts and Jobs Act (the “Act”). Our first quarter fiscal 2017 results included $22.8 million (or $0.18 per share) after tax charges associated with the 2015 Restructuring.

On December 15, 2017, the Company completed the acquisition of CH2M, an international provider of engineering, construction, and technical services, by acquiring 100% of the outstanding shares of CH2M common stock and preferred stock. The purpose of the acquisition was to further diversify the Company’s market presence in the water, nuclear and environmental remediation sectors and to further the Company’s growth strategy. The Company paid total consideration of approximately $1.8 billion in cash and issued approximately $1.4 billion of Jacobs’ common stock to the former stockholders and certain equity award holders of CH2M.

~~Consolidated Results of Operations~~

Revenues for the first fiscal quarter of 2018 were $2.75 billion, an increase of $198.7 million, or 7.8% from $2.55 billion for the corresponding period last year. The increase in revenues was due primarily to favorable impacts from the CH2M acquisition, which contributed approximately $131 million in incremental revenue for the quarter. Also, higher volumes in our legacy A&T and B&I businesses also contributed to the increase, partly offset by lower revenues in P&C and with Industrial revenues being flat for the comparative periods. Pass-through costs included in revenues for the first fiscal quarter of 2018 were $596.2 million, a decrease of $76.8 million, or 11.4%, from $673.0 million for the corresponding period last year.

Gross profit for first quarter 2018 was $487.2 million, up $67.9 million, or 16.2% from $419.3 million from the corresponding quarter in 2017. Our gross profit margins were 17.7% and 16.4% for the three month periods ended December 29, 2017 and December 30, 2016, respectively. The higher volume impacts seen in our A&T and B&I business, incremental benefits of the CH2M businesses acquired, and our continuing strategic focus on realigning our portfolio to higher margin businesses and project execution drove improving gross profit and margins for the year over year periods across our lines of business.

~~Page 30~~

~~JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES~~

SG&A expenses for the three months ended December 29, 2017 were $439.5 million, an increase of $108.9 million, or 32.9%, from $330.7 million for the corresponding period last year. The increase in SG&A expenses for the three month comparative periods was due mainly to CH2M transaction costs of $67.6 million, Restructuring and other associated costs of $19.3 million and higher year over year personnel costs during first quarter fiscal 2018, offset in part by $31.7 million in charges during first quarter fiscal 2017 from the 2015 Restructuring which concluded atbefore the end of fiscal ~~2017. Also, incremental SG&A expense from the acquired CH2M businesses approximated $20 million during the three-month 2018 period.~~

~~Net interest expense for the three months ended December 29, 2017 was $3.3 million, an increase of $1.3 million from $2.0 million for the corresponding period last year. The increase~~2023, are expected to result in net interest expense for the three months ended December 29, 2017 as compared to the corresponding period last year was due primarily to higher levels of average debt balances outstanding related to financing activities for the acquisition of CH2M, which was partially funded with term loan financing of $1.5 billion and increased revolving credit line borrowings of $850.2 million.

Miscellaneous expense, net for the three months ended December 29, 2017 was $2.5 million, up $1.8 million from $0.7 million for the corresponding period last year. The increase was due primarily to unfavorable year over year impacts from unrealized gains and losses from foreign exchange.

~~On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted in the United States.~~ The Act reduces the top corporate US federal statutory tax rate from 35% to 21% starting on January 1, 2018, resulting in a blended statutory tax rate for fiscal year filers. The Company’s blended federal statutory tax rate for fiscal 2018 is 24.6%. It also requires companies to pay a one-time transition tax on earnings of certain foreign subsidiaries, places limitations and exclusions on varied tax deductions and creates new taxes on certain foreign sourced earnings. The majority of the tax provisions are effective for the first tax year beginning after January 1, 2018. For Jacobs that will be the Company’s taxable year beginning October 1, 2018.

~~The Company’s consolidated effective income tax rate for the three months ended December 29, 2017~~ ~~was~~ 93.9%, an increase from 28.8% for the corresponding period last year. The increase in the quarterly effective tax rate is due to $29 million in net discrete charges during the current year quarter resulting from the Act, comprised of a $24 million benefit from the provisional remeasurement of the deferred tax items in the U.S., offset by a corresponding valuation allowance charge of $53 million.

~~It is reasonably possible that, during the next 12 months, we may realize a decrease in our uncertain tax positions~~estimated gross annualized pre-tax cash savings of approximately $7$40 million ~~(being realized as a reduction in income tax expense) as a result of concluding various tax audits~~to $50 million.

During the fourth fiscal quarter of 2017, the Company implemented certain restructuring activities (primarily severance related activities) associated with the Company’s announced definitive agreement to acquire CH2M. Following the closing of the CH2M acquisition, these activities have continued into the first fiscal quarter of 2018 and include associated charges for professional services, personnel costs, severance and costs associated with co-locating Jacobs and CH2M offices, amounting to approximately $19.3(2)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 CMS separation, and the nine months ended June 30, 2023 and July 1, 2022 included $38.1 million and $74.6 million, respectively in real estate impairment charges relating to the Company's transformation initiatives. Also included in the nine months ended July 1, 2022 is $91.3 million in pre-tax charges during first quarter ended December 29, 2017. These activities are expected to continue through 2019. These activities are not expected to involve the exit of any service types or client end-markets.

Aerospace & Technology segment revenues for the three months ended December 29, 2017 were $721.6 million, up $144.1 million, or 25%, from $577.4 million for the corresponding period last year. The increase was due in large part to approximately $84 million in incremental nuclear and environmental revenue resulting from the CH2M acquisition. Also, our revenues were positively

impacted by year over year revenue volume growth across our legacy portfolio, highlighted by increased spending by customers in the U.S. government business sector. Year over year impacts on revenues from unfavorable foreign currency were not material.

Operating profit for the segment was $65.8 million for the three months ended December 29, 2017, up $14.7 million, or 28.8% from $51.1 million for the corresponding period last year. In addition to incremental operating profit benefits from the CH2M acquisition, the increase from the prior year was primarily attributable to improvements in our nuclear and defense unit in the U.K. and fee income with our AWE business. Additionally, segment SG&A was up approximately $10 million for the three months ended December 29, 2017 of which approximately half of this increase was attributable to incremental SG&A coming with the CH2M business acquired.

Industrial revenues for the three months ended December 29, 2017 were $749.3 million, a slight decrease of $2.4 million versus $751.7 million from the corresponding period last year. The slight decrease in revenues for the three-month comparative periods was due mainly to declines in the Field Services business offset in part by improved performance in our Life Sciences business group. Additionally, foreign currency impacts were favorable in the current year three-month period of approximately $11 million compared to the corresponding period in the prior year.

Operating profit for the three months ended December 29, 2017 was $38.1 million, an increase of $13.0 million, or 51.7%, compared to $25.1 million for the corresponding period last year. The increase in profitability for the comparative three-month period in the current year was due mainly to improved project performance in the Mining and Minerals business as well as improved profitability in Life Sciences based on higher revenues. Declines in lower margin Field Services revenues were largely offset by improved project execution and favorable mix. Also, SG&A for the segment was roughly flat between the periods.

Petroleum & Chemicals revenues for the three months ended December 29, 2017 were $620.9 million, a decrease of $20.9 million, or 3.2%, from $641.8 million for the corresponding period last year. The decrease in revenues for the three months ended December 29, 2017 as compared to the prior year was due primarily to the completion or wind-down of several projects with significant pass through revenue as well as award delays of large post front-end engineering and design projects, as clients continue to evaluate their capital spending plans. Both of these factors resulted in lower field service revenues compared with the prior year period, while client investment spending continues primarily on compliance, maintenance and sustaining capital programs. Additionally, foreign currency impacts were favorable by approximately $12 million for the three-month period of 2018 versus the corresponding period of 2017.

Operating profit for the three months ended December 29, 2017 was $27.6 million, an increase of $3.9 million or 16.5% from $23.6 million for the corresponding period last year, with the increase in profitability due to improving business mix. SG&A was up approximately $7 million due mainly to incremental operating general and administrative expense coming with the CH2M acquisition with otherwise flat SG&A spend for the year over year periods due to the continued strong focus on cost control.

~~Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires domestic mine operators to disclose violations and orders issued under the Federal~~ Mine Safety ~~and Health Act of 1977 (the “Mine Act”)~~Disclosure.



Title of Each Class		Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock	$1 par value	J	New York Stock Exchange

	~~Page No.~~
			Page No.
PART I	FINANCIAL INFORMATION

	Item 1.	Financial Statements	3 4

		Consolidated Balance Sheets - Unaudited	3 5

		Consolidated Statements of Earnings - Unaudited	4 6

		Consolidated Statements of Comprehensive Income ~~(Loss)~~ - Unaudited	5 7

		Consolidated Statements of Stockholders’ Equity - Unaudited	8

		Consolidated Statements of Cash Flows - Unaudited	6 10

		Notes to Consolidated Financial Statements - Unaudited	7 11

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25 34

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36 49

	Item 4.	Controls and Procedures	37 56

PART II	OTHER INFORMATION

	Item 1.	Legal Proceedings	38 51

	Item 1A.	Risk Factors	38 51

	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38 51

	Item 3.	Defaults Upon Senior Securities	38 51

	Item 4.	Mine Safety Disclosures	38 52

	Item 5.	Other Information	38 52

	Item 6.	Exhibits	40 53

		SIGNATURES	42 54


	For the Three Months Ended				For the Nine Months Ended
	June 30, 2023		July 1, 2022		June 30, 2023		July 1, 2022
Net Earnings of the Group	$	172,813	$	212,281	$	552,660	$	474,364
Other Comprehensive Income:
Foreign currency translation adjustment	55,482		(187,841)		242,768		(242,353)
Change in cash flow hedges	15,644		9,440		(14,311)		64,786
Change in pension plan liabilities	(6,765)		28,584		(29,025)		48,659
Other comprehensive income (loss) before taxes	64,361		(149,817)		199,432		(128,908)
Income Tax Benefit (Expense):
Foreign currency translation adjustment	5,293		482		(348)		3,072
Cash flow hedges	(3,637)		(4,115)		4,680		(19,350)
Change in pension plan liabilities	(363)		(688)		(1,022)		(2,884)
Income Tax Benefit (Expense):	1,293		(4,321)		3,310		(19,162)
Net other comprehensive income (loss)	65,654		(154,138)		202,742		(148,070)
Net Comprehensive Income of the Group	238,467		58,143		755,402		326,294
Net Earnings Attributable to Noncontrolling Interests	(8,204)		(8,773)		(23,038)		(28,286)
Net Earnings Attributable to Redeemable Noncontrolling interests	(370)		(7,525)		(13,225)		(27,246)
Net Comprehensive Income Attributable to Jacobs	$	229,893	$	41,845	$	719,139	$	270,762


	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 April 1, 2022	$	128,900	$	2,667,256	$	4,069,664	$	(788,374)	$	6,077,446	$	44,532	$	6,121,978
Net earnings	—		—		195,983		—		195,983		8,773		204,756
Foreign currency translation adjustments, net of deferred taxes of $(482)	—		—		—		(187,359)		(187,359)		—		(187,359)
Pension plan liability, net of deferred taxes of $688	—		—		—		27,896		27,896		—		27,896
Change in cash flow hedges, net of deferred taxes of $4,115	—		—		—		5,325		5,325		—		5,325
Dividends	—		—		(29,479)		—		(29,479)		—		(29,479)
Redeemable Noncontrolling interests redemption value adjustment	—		—		20,169		—		20,169		—		20,169
Repurchase and issuance of redeemable noncontrolling interests	—		—		(5,147)		—		(5,147)		—		(5,147)
Noncontrolling interests - distributions and other	—		—		—		—		—		(6,184)		(6,184)
Stock based compensation	—		16,544		—		—		16,544		—		16,544
Issuances of equity securities including shares withheld for taxes	137		12,550		(63)		—		12,624		—		12,624
Repurchases of equity securities	(1,459)		(30,193)		(169,057)		—		(200,709)		—		(200,709)
Balances at July 1, 2022	$	127,578	$	2,666,157	$	4,082,070	$	(942,512)	$	5,933,293	$	47,121	$	5,980,414

Balances at March 31, 2023	$	126,805	$	2,697,523	$	4,393,351	$	(838,042)	$	6,379,637	$	48,387	$	6,428,024
Net earnings	—		—		164,239		—		164,239		8,204		172,443
Foreign currency translation adjustments, net of deferred taxes of $(5,293)	—		—		—		60,775		60,775		—		60,775
Pension plan liability, net of deferred taxes of $363	—		—		—		(7,128)		(7,128)		—		(7,128)
Change in cash flow hedges, net of deferred taxes of $3,637	—		—		—		12,007		12,007		—		12,007
Dividends	—		—		(33,216)		—		(33,216)		—		(33,216)
Redeemable Noncontrolling interests redemption value adjustment	—		—		34,101		—		34,101		—		34,101
Repurchase and issuance of redeemable noncontrolling interests	—		—		3,599		—		3,599		—		3,599
Noncontrolling interests - distributions and other	—		—		—		—		—		(5,891)		(5,891)
Stock based compensation	—		20,623		—		—		20,623		—		20,623
Issuances of equity securities including shares withheld for taxes	164		12,493		(531)		—		12,126		—		12,126
Repurchases of equity securities	(1,088)		(23,145)		(100,814)		—		(125,047)		—		(125,047)
Balances at June 30, 2023	$	125,881	$	2,707,494	$	4,460,729	$	(772,388)	$	6,521,716	$	50,700	$	6,572,416

	For the Three Months Ended
	December 29, 2017			December 30, 2016
Net Earnings of the Group	$	2,561		$	61,153
Other Comprehensive Income (Loss):
Foreign currency translation adjustment		20,168			(287,524	)
Gain (loss) on cash flow hedges		890			(942	)
Change in pension liabilities		3,596			24,753
Other comprehensive income (loss) before taxes		24,654			(263,713	)
Income Tax Expense:
Cash flow hedges		—			(82	)
Change in pension liabilities		(125	)		(4,522	)
Income Tax Expense:		(125	)		(4,604	)
Net other comprehensive income (loss)		24,529			(268,317	)
Net Comprehensive Income (Loss) of the Group		27,090			(207,164	)
Net Earnings Attributable to Noncontrolling Interests		(398	)		(617	)
Net Comprehensive Income (Loss) Attributable to Jacobs	$	26,692		$	(207,781	)

Assets
Cash and cash equivalents	$	315.2
Receivables	1,201.9
Prepaid expenses and other	72.7
Property, equipment and improvements, net	225.6
Goodwill	2,698.8
Identifiable intangible assets:
Customer relationships, contracts and backlog	557.0
Trade name	40.0
Lease intangible assets	5.9
Total identifiable intangible assets	602.9
Miscellaneous	277.4
Total Assets	$ 5,394.5
Liabilities
Notes payable	2.2
Accounts payable	309.6
Accrued liabilities	659.0
Billings in excess of costs	263.5
Identifiable intangible liabilities:
Lease intangible liabilities	9.6
Long-term debt	702.3
Other deferred liabilities	382.7
Total Liabilities	2,328.9
Noncontrolling interests	(40.9)
Net assets acquired	$	3,024.7

Personnel costs	$	41,222
Professional service, real estate-related, and other expenses	26,675
Total	$	67,897

	Three Months Ended
See note 1	December 29, 2017		December 30, 2016

Revenues	$	3,778	$	3,652
Net earnings (loss)	$ 25.8		$	(47.0)
Net earnings (loss) attributable to Jacobs	$	23.2	$	(56.6)
Net earnings (loss) attributable to Jacobs per share:
Basic earnings (loss) per share	$	0.16	$	(0.40)
Diluted earnings (loss) per share	$	0.16	$	(0.40)

		Aerospace & Technology		Buildings & Infrastructure		Industrial		Petroleum & Chemicals		Total
Balance September 29, 2017	$	1,025.8	$	751.4	$	561.8	$	670.8	$	3,009.8
Acquired		945.2		1,417.9		–		335.7		2,698.8
Foreign Exchange Impact		4.2		3.1		2.3		2.7		12.3
Balance December 29, 2017	$	1,975.2	$	2,172.4	$	564.1	$	1,009.2	$	5,720.9


Balance at September 30, 2022	$	4,137
Net Charges (Credits) (1)	39,088
Payments and other	(17,127)
Balance at June 30, 2023	$	26,098


Lease Abandonments and Impairments	$	425,678
Voluntary and Involuntary Terminations	176,811
Outside Services	329,979
Other	208,305
Total	$	1,140,773

Fiscal Year	(in millions)
2018 (nine months remaining)	$	90.5
2019	119.2
2020	117.1
2021	102.3

~~(1)~~	~~Includes~~
(1)			Other corporate expenses included intangibles amortization of ~~deferred financing fees related to the CH2M acquisition of $256 thousand for the three-month period ended December 29, 2017.~~

	~~(1)~~	~~Includes deferred financing fees related to the CH2M acquisition of $256 thousand~~ for the three months ~~ending December 29, 2017.~~ ended June 30, 2023 and July 1, 2022, respectively, and $152.2 million and $146.9 million, for the nine months ended June 30, 2023 and July 1, 2022, respectively. Additionally, the nine month period of fiscal 2023 included approximately $15.0 million in net favorable impacts from cost reductions compared to the prior year period, which was associated mainly with net favorable impacts during first quarter from changes in employee benefit programs of $41 million offset by approximately $26 million in higher spend in company technology platforms and other personnel and corporate cost increases.
(2)			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 CMS separation, and the nine months ended June 30, 2023 and July 1, 2022 included $38.1 million and $74.6 million, respectively in real estate impairment charges relating to the Company's transformation initiatives. Also included in the nine months ended July 1, 2022 is $91.3 million related to the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves.

(3)			The three and nine month periods ended July 1, 2022 included a $13.9 million gain related to a cost method investment sold during the period. The nine months ended July 1, 2022 included $3.5 million in income associated with final exit activities associated with our AWE ML investment and a gain of $7.1 million related to a lease termination. Additionally, the unfavorable change in Other Expense, net for the periods presented are attributable mainly to higher net interest expense year over year, primarily due to higher interest rates as well as the full 2023 period impacts of increased levels of debt outstanding due to fiscal 2022 incremental borrowings associated with the funding of the StreetLight and BlackLynx acquisitions and the payment of the Legacy CH2M Matter settlement.

	December 29, 2017		September 29, 2017
Components of receivables:
Amounts billed, net	$	1,691,229	$	949,060
Unbilled receivables and other		1,577,005		1,118,144
Retentions receivable		25,268		35,339
Total receivables, net	$	3,293,502	$	2,102,543
Other information about receivables:
Amounts due from the United States federal government, included above, net of advanced billings	$	314,543	$	226,236
Claims receivable	$	4,600	$	4,600

	December 29, 2017			September 29, 2017
Land	$	20,644		$	17,197
Buildings		137,336			93,313
Equipment		777,361			627,609
Leasehold improvements		274,141			220,295
Construction in progress		22,372			21,300
		1,231,854			979,714
Accumulated depreciation and amortization		(657,820	)		(629,803	)
	$	574,034		$	349,911

Balance at September 29, 2017	$	174,343
CH2M Charges		19,349
Payments		(34,226	)
Balance at December 29, 2017	$	159,466

Lease Abandonments	$	242,222
Involuntary Terminations		186,763
Outside Services		32,957
Other restructuring related		14,145
Total	$	476,087

	December 29, 2017		September 29, 2017
Term Loan Facility	$	1,500,000	$	-
Less: Deferred Financing Fees		(3,779)		-
Revolving Credit Facility		1,085,159		235,000
Equipment Financing		6,553		-
Total Long-term debt, net	$	2,587,933	$	235,000

	~~(1)~~	~~Includes deferred financing fees~~ related to the final pre-tax settlement of the Legacy CH2M ~~acquisition~~Matter, net of ~~$256 thousand~~previously recorded reserves.
(3)			The three and nine month periods ended July 1, 2022 included a $13.9 million gain related to a cost method investment sold during the period. The nine months ended July 1, 2022 included $3.5 million in income associated with final exit activities associated with our AWE ML investment and a gain of $7.1 million related to a lease termination. Additionally, the unfavorable change in Other Expense, net for the periods presented are attributable mainly to higher net interest expense year over year, primarily due to higher interest rates as well as the full 2023 period impacts of increased levels of debt outstanding due to fiscal 2022 incremental borrowings associated with the funding of the StreetLight and BlackLynx acquisitions and the payment of the Legacy CH2M Matter settlement.


Critical Mission Solutions segment revenues for the three and nine months ~~ending December 29, 2017.~~ ended June 30, 2023 were $1.19 billion and $3.46 billion, respectively, an increase of $81.8 million and $236.9 million, or 7.4% and 7.4%, from $1.11 billion and $3.22 billion for the corresponding periods last year. During the three and nine months ended June 30, 2023, revenue benefited from new contracts in the nuclear remediation sector as well across multiple markets in the U.S. and United Kingdom. Also, impacts on revenues from unfavorable foreign currency translation were approximately $2.9 million and $61.5 million for the three and nine-month periods ended June 30, 2023, compared to $26.7 million and $34.6 million in unfavorable impacts in the corresponding prior year periods.

Operating profit for the segment was $99.1 million and $275.3 million, respectively, for the three and nine months ended June 30, 2023, which was an increase of $10.8 million, or 12.2%, from $88.3 million for the quarter-to-date period compared to the prior year and relatively flat compared to the year-to-date period last year. Operating profit level trends for the year over year quarterly periods were favorably impacted by growth in the nuclear remediation market, U.S. government space market and international defense market, and for the year to date period, were offset in part by large contract wind downs in early fiscal 2022 that carried higher profit margins. Impacts on operating profit from unfavorable foreign currency translation were approximately $0.2 million and $7.4 million for the three and nine months ended June 30, 2023, as compared to unfavorable foreign currency translation of approximately $3.9 million and $5.0 million for the three and nine months ended July 1, 2022, respectively.


Revenues for the People & Places Solutions segment for the three and nine-months ended June 30, 2023 were $2.47 billion and $7.04 billion, respectively, an increase of $247.2 million and $735.2 million, or 11.1% and 11.7%, from $2.22 billion and $6.31 billion for the corresponding periods last year. The increases in revenue for the three and nine months ended June 30, 2023 were primarily driven by growth in our advanced facilities, U.S. and Asia Pacific and Middle East businesses as compared to the corresponding prior year periods. Foreign currency translation had $10.1 million and $144.6 million in unfavorable impacts on revenues in our international businesses for the three and nine month periods ended June 30, 2023, respectively, as compared to unfavorable impacts of $69.1 million and $103.7 million in the corresponding prior year periods.

Operating profit for the segment for the three and nine month period ended June 30, 2023 was $242.7 million and $701.5 million, respectively, an increase of $28.7 million and $106.0 million, or 13.4% and 17.8%, from $213.9 million and $595.5 million for the corresponding periods last year. The year-over-year increases in operating profit for the three and nine months ended June 30, 2023 were driven primarily by the revenue growth mentioned above while holding selling, general and administrative expenses relatively flat. Foreign currency translation had a $3.4 million and $28.7 million unfavorable impact on operating profit in our international businesses for the three and nine month periods ended June 30, 2023, respectively as compared to unfavorable impacts of $11.9 million and $18.7 million in the corresponding prior year periods.


Revenues for the Divergent Solutions segment for the three and nine months ended June 30, 2023 were $239.3 million and $695.0 million, respectively, an increase of $21.3 million and $44.9 million, or 9.8% and 6.9%, from $217.9 million and $650.1 million for the corresponding periods last year. The increases in revenue for the three and nine months ended June 30, 2023 were due mainly to favorable year over year software licensing revenue and the startup of new programs previously won in fiscal 2022. Also the year-to-date period benefited from incremental revenues from the StreetLight acquisition (owned for the full period in fiscal 2023). Foreign currency translation impacts on revenue were not significant for the periods presented.

Operating profit for the segment was $20.8 million and $57.6 million, respectively, for the three and nine months ended June 30, 2023, an increase of $8.7 million and $5.4 million, or 72.0% and 10.3%, from $12.1 million and $52.3 million for the corresponding periods last year. The increases in operating profit for the three and nine month periods were due mainly to favorable year over year software licensing, and for the year-to-date period, slightly offset by unfavorable impacts from overhead billing rate differences during the first quarter of 2023 versus the prior year first quarter mainly in our cyber intelligence business. Impacts on operating profit from foreign currency were not significant for the periods presented.


Revenues for the PA Consulting segment for the three and nine months ended June 30, 2023 were $286.9 million and $869.9 million, respectively, an increase of $9.3 million and $5.0 million, or 3.3% and 0.6%, from $277.6 million and $864.9 million for the corresponding periods last year, primarily due to growth in PA Consulting's Defence & Security, Public Sector and Energy & Utilities businesses. Revenues for the three-months ended June 30, 2023 were immaterially impacted by foreign currency translation and for the nine-months ended June 30, 2023 were unfavorably impacted by $71.7 million for our international businesses, and for the corresponding prior year periods, were unfavorably impacted by $34.0 million and $38.1 million.

Operating profit for the segment for the three and nine months ended June 30, 2023 was $60.9 million and $177.5 million, respectively, an increase of $9.4 million and a decrease of $5.3 million, or 18.3% and (2.9)%, from $51.4 million and $182.9 million, for the corresponding periods last year. The increase for the quarter to date period is mainly due to lower incentive costs and includes immaterial impacts from foreign currency in our international business, while the decrease for the year to date period is mainly due to unfavorable foreign currency translation impacts of $12.3 million, as compared to $6.7 million and $8.1 million in unfavorable impact in the corresponding prior year periods. Additionally, operating profit was impacted in the current year period by higher labor costs due to a competitive labor market and lower utilization.


The increase in backlog in Critical Mission Solutions from July 1, 2022 was primarily driven by new business awards in the U.S. government space sector along with growth in the U.K. defence, nuclear power, and nuclear remediation sectors that offset slower growth in the U.S. Defense market.

Backlog levels in People & Places Solutions and Divergent Solutions remained consistent year-over-year.



The increase in backlog in PA Consulting from July 1, 2022 was primarily driven by strategic focus on long-term projects as well as organic year over year growth of the business.


	Nine Months Ended
(in thousands)	June 30, 2023
Summarized Statement of Earnings Data
Revenue	$	2,537,856

Direct Costs	$	2,108,354

Selling, General and Administrative Expenses	$	222,756
Net earnings attributable to Guarantor Subsidiaries from continuing operations	$	87,671
Noncontrolling interests	$	(940)


Period	Total Number of Shares Purchased	Average Price Per Share (1)	Total Number of Shares Purchased under the 2023 Repurchase Authorization	Approximate Dollar Value of Shares that May Yet Be Purchased Under the 2023 Repurchase Authorization
May 1, 2023 - May 26, 2023	519,040	$115.62	519,040	$939,990,410
May 29, 2023 - June 30, 2023	568,972	$114.26	568,972	$874,978,253

~~3.1~~	Amended and Restated ~~Bylaws~~Certificate of Incorporation of Jacobs ~~Engineering Group~~Solutions Inc.~~, dated December 18, 2017.~~ Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K on ~~December 18, 2017~~August 29, 2022 and incorporated herein by reference.
3.2
~~10.1#~~	~~CH2M HILL Companies, Ltd. Supplemental Executive Retirement~~Amended and ~~Retention Plan, effective September 19, 2014.~~ Restated Bylaws of Jacobs Solutions Inc., dated as of July 6, 2023. Filed as Exhibit ~~10.~~63.1 to ~~CH2M’s Annual~~the Registrant’s Current Report on Form 10-K8-K/A on ~~February 25, 2015~~July 11, 2023 and incorporated herein by reference.
31.1*
~~10.2#~~		CH2M HILL Companies, Ltd. Amended and Restated Deferred Compensation Plan, effective November 13, 2014. Filed as Exhibit 10.5 to CH2M’s Annual Report on Form 10-K on February 25, 2015 and incorporated herein by reference.
10.3#*		~~CH2M HILL Companies, Ltd. Amended and Restated Long-Term Incentive Plan, as amended, effective December 15, 2017.~~

10.4#*		~~Form of Restricted Stock Unit Agreement (Performance Shares – Earnings Per Share Growth – 2018 Award) (awarded pursuant to the Jacobs Engineering Group Inc. 1999 Stock Incentive Plan).~~
10.5#*		~~Form of Restricted Stock Unit Agreement (Performance Shares – ROIC – 2018 Award) (awarded pursuant to the Jacobs Engineering Group Inc. 1999 Stock Incentive Plan).~~
10.6#*		~~Form of Restricted Stock Unit Agreement (Time-Based Vesting) (awarded pursuant to the Jacobs Engineering Group Inc. 1999 Stock Incentive Plan).~~
10.7#*		~~Form of Restricted Stock Unit Agreement (awarded pursuant to the Jacobs Engineering Group, Inc. 1999 Outside Director Stock Plan).~~
10.8#*		~~Form of Summary Description of Amendment to CH2M 2017 Long-Term Incentive Plan Award Agreements.~~
10.9#*		~~Amended and Restated Employment Agreement between Jacobs Engineering Group Inc. and Gary Mandel, effective as of December 30, 2017.~~
10.10#*	~~Jacobs Engineering Group Inc. 1999 Stock Incentive Plan, as amended and restated.~~
10.11#*	~~Jacobs Engineering Group Inc. 1999 Outside Director Stock Plan, as amended and restated~~.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2*
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1*
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101			The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Earnings, (iii) Consolidated Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Stockholders’ Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements, tagged as blocks of text and including detailed tags.
95* 104			~~Mine Safety Disclosure.~~ The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, (formatted as Inline XBRL and contained in Exhibit 101).

101.INS*	~~XBRL Instance Document.~~

101.SCH*	~~XBRL Taxonomy Extension Schema Document.~~

101.CAL*	~~XBRL Taxonomy Extension Calculation Linkbase Document.~~

101.DEF*	~~XBRL Taxonomy Extension Definition Linkbase Document.~~

101.LAB*	~~XBRL Taxonomy Extension Label Linkbase Document.~~

101.PRE*	~~XBRL Taxonomy Extension Presentation Linkbase Document.~~

#	~~Indicates management contract or compensatory plan or arrangement.~~

~~By:~~
By:			/s/ Kevin C. Berryman
			Kevin C. Berryman
			~~Executive Vice~~ President
			and Chief Financial Officer
			(Principal Financial Officer)

Date:			~~February 7, 2018~~ August 8, 2023