Jacobs Engineering Group, Inc. Annual Report 2020

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FY2020 Annual Report · Jacobs Engineering Group, Inc.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

_________________________________________________________________

FORM 10-K

(Mark One)

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended October 2, 2020
OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____ to ____

Commission File No. 1-7463

_________________________________________________________________

Jacobs Engineering Group Inc.

Delaware
(State or other jurisdiction of incorporation or organization)

1999 Bryan Street
(Address of principal executive offices)

Suite 1200

Dallas

Texas

(214) 583 – 8500
(Registrant’s telephone number, including area code)

95-4081636
(IRS Employer
identification number)

75201
(Zip Code)

Title of Each Class
Common Stock

$1 par value

Trading Symbol(s)
J

Name of Each Exchange on Which Registered
New York Stock Exchange

Securities registered pursuant to Section 12(b) of the Act:
_________________________________________________________________

Securities registered pursuant to Section 12(g) of the Act: None
_________________________________________________________________

Indicate by check-mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act: ☒ Yes ☐ No

Indicate by check-mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. ☐ Yes ☒ No

Indicate by check-mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements
for the past 90 days. ☒ Yes ☐ No

Indicate by check-mark whether the Registrant: has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such
files). ☒ Yes ☐ No

Indicate by check-mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the
definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Non-accelerated filer
Emerging growth company

Accelerated filer
Smaller reporting company

☒
☐
☐

☐
☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its
audit report. ☒

Indicate by check-mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Act) ☐ Yes ☒ No

There were 129,623,428 shares of common stock outstanding as of November 12, 2020. The aggregate market value of the Registrant’s common equity held by
non-affiliates was approximately $9.6 billion as of March 27, 2020, based upon the last reported sales price on the New York Stock Exchange on that date.

Portions of the Registrant’s definitive proxy statement to be issued in connection with its 2021 annual meeting of shareholders are incorporated by reference into
Part III of this Annual Report on Form 10-K where indicated.

DOCUMENTS INCORPORATED BY REFERENCE

Item
Part I

Part II

Part III

Part IV

Item 1.
Item 1A.
Item 1B.
Item 2.
Item 3.
Item 4.

Item 5.
Item 6.
Item 7.
Item 7A.
Item 8.
Item 9.
Item 9A.
Item 9B.

Item 10.
Item 11.
Item 12.
Item 13.
Item 14.

Item 15.

JACOBS ENGINEERING GROUP INC.
Fiscal 2020 Annual Report on Form 10-K
Table of Contents

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosure

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Selected Financial Data
Management’s Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements With Accountants On Accounting and Financial Disclosure
Controls and Procedures
Other Information

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services

Exhibits and Financial Statement Schedules
Signatures

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PART I

FORWARD-LOOKING STATEMENTS

In addition to historical information, this Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995, including, among other things, statements regarding our future operations, financial condition, and business
strategies and future economic and industry conditions. 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. Factors that could cause or contribute to such
differences include, but are not limited to, those listed and discussed in Item 1A— Risk Factors below. 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 herein and in
other documents we file from time to time with the United States Securities and Exchange Commission (the "SEC").

Unless the context otherwise requires, all references herein to "Jacobs" or the "Registrant" are to Jacobs Engineering Group Inc. and its

predecessors, and references to the "Company", "we", "us" or "our" are to Jacobs Engineering Group Inc. and its consolidated subsidiaries.

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Item 1. BUSINESS

At Jacobs, we’re challenging today to reinvent tomorrow by solving the world’s most critical problems for thriving cities, resilient environments,
mission-critical outcomes, operational advancement, scientific discovery and cutting-edge manufacturing, turning abstract ideas into realities that
transform the world for good. Leveraging a talent force of more than 55,000, Jacobs provides a full spectrum of professional services including
consulting, technical, scientific and project delivery for the government and private sector.

Our deep global domain knowledge - applied together with the latest advances in technology - are why customers large and small choose to partner
with Jacobs. We operate in two lines of business: Critical Mission Solutions and People & Places Solutions.

After spending three years transforming our portfolio and setting the foundation to get us where we are today, we launched a three-year accelerated
profitable growth strategy at our Investor Day in February 2019, focused on innovation and continued transformation to build upon our position as
the leading solutions provider for our clients. This transformation included the $3.2 billion acquisition of CH2M Hill Companies, Ltd ("CH2M") and the
$3.4 billion divestiture of the Company's energy, chemicals and resources business. The alignment of revenue synergies was key to the successful
integration of CH2M and created a model for successful follow-on integrations like The KeyW Holding Corporation and John Wood Group’s nuclear
business. These acquisitions further position us as a leader in high-value government services and technology-enabled solutions, enhancing our
portfolio by adding intellectual property-driven technology with unique proprietary C5ISR (command, control, communications, computer, combat
systems, intelligence, surveillance and reconnaissance) rapid solutions, and amplifying Jacobs’ position as a Tier-1 global nuclear services provider.

We have turned the course of Jacobs’ future and are now focused on broadening our leadership in sustainable, high growth sectors. As part of our
strategy, our new brand was created from an understanding of where we’ve been, what’s true to our culture and our strategy going forward. We
articulate our bold creativity in our brand promise: Challenging today. Reinventing tomorrow. Signaling our transition from an engineering and
construction company to a global technology-forward solutions company, we began trading as “J” on the New York Stock Exchange in December
2019. Our Transformation Office is charged with driving further innovation, delivering value-creating solutions for our clients and leveraging an
integrated digital and technology strategy to improve our efficiency and effectiveness, ultimately freeing up valuable time and resources for
reinvestment in our people.

Revenue by Type (Fiscal Year 2020)

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Technology and Consulting includes cybersecurity, data analytics, systems and software application integration services and consulting,
enterprise and mission IT services, engineering and design, nuclear services, enterprise level operations and maintenance and other highly
technical consulting solutions within Critical Mission Solutions (CMS) and data analytics, artificial intelligence and automation, software development
as well as digitally-driven consulting, planning and architecture, program management and other highly technical consulting solutions within People
& Places Solutions (P&PS).

Project Delivery Services includes management and execution of wind-tunnel design-build projects in CMS and progressive design-build for water
and construction management for our Advanced Facilities business in P&PS. We believe these services are lower risk than typical lump-sum type
construction contracting.

Pass-through Revenue includes P&PS procurement activities and revenue where we are acting as principal for subcontract labor or third-party
materials and equipment and are consequently reflected in both revenues and costs.

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Challenging today. Reinventing tomorrow

Our values continue to guide our behaviors, relationships and outcomes - allowing us to act as one company and unify us worldwide when
interacting with our clients, employees, communities and shareholders.

• We do things right. We always act with integrity - taking responsibility for our work, caring for our people and staying focused on safety

and sustainability. We make investments in our clients, people and communities, so we can grow together.

• We challenge the accepted. We know that to create a better future, we must ask the difficult questions. We always stay curious and

are not afraid to try new things.

• We aim higher. We do not settle - always looking beyond to raise the bar and deliver with excellence. We are committed to our clients

by bringing innovative solutions that lead to profitable growth and shared success.

• We live inclusion. We put people at the heart of our business. We have an unparalleled focus on inclusion, with a diverse team of

visionaries, thinkers and doers. We embrace all perspectives, collaborating to make a positive impact.

Our three-pillar strategy is based on the foundation of these values, as we drive to become the employer of choice, deliver connected and
sustainable solutions, and leverage technology-enabled execution.

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We do things right

We always act with integrity - taking responsibility for our work, caring for our people and staying focused on safety and sustainability. We make
investments in our clients, people and communities, so we can grow together.

From the way we operate our business, to the work we perform with clients and other organizations, we continue to look at ways we can make a
positive environmental, societal and economic difference for our people, businesses, governments and communities around the world.

As we face some of the world’s toughest challenges, including clean water, affordable energy, connectivity, resilient environments, climate change,
environmental pollution and economic growth, our people are discovering better ways to create an enduring legacy.

PlanBeyond is our approach to sustainability - planning beyond today for a more sustainable future for everyone. For us, this means social and
economic progress while protecting our environment and improving resilience.

Leadership on climate change and social value

In April 2020, we published our first company Climate Action Plan committing to 100% renewable energy for our operations in 2020 , net zero
carbon for our operations and business travel in 2020, and being carbon negative for our operations and business travel by 2030. We will achieve
net zero carbon in line with global standard PAS 2060:2014.

Our ESG Disclosures Report provides supplementary information regarding our Environmental, Social and Governance (ESG) performance,
organized according to the Sustainability Accounting Standards Board (SASB) framework.

1 Jacobs has achieved its 2020 Climate Action Plan commitments: carbon neutral status and 100% renewable electricity.

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Our partnership with Simetrica (a U.K.-based organization that specializes in social value measurement and wellbeing analysis) enables us to help
clients understand how they can transform local, city and regional decision-making – identifying innovative, inclusive and ethical investments that will
drive social change, spread prosperity and meet the growing challenges facing communities. In collaboration with Simetrica-Jacobs, we released a
thought leadership paper titled Before & Beyond the Build: A blueprint for creating social value through infrastructure investments. The paper
explores how infrastructure investments can contribute to addressing critical societal issues and how infrastructure could be planned, delivered/built
and operated to generate enduring social value at scale and help overcome entrenched social issues in our communities.

Developing our talent … a world where you can

We put the spotlight on ensuring that Jacobs is an employer of choice in every way: we aspire to be a merit-based organization that is inclusive and
diverse; we take on the responsibility to continually recruit and develop the best talent.

We are building an inclusive and diverse culture to provide a solid foundation for selecting, developing and retaining the best and brightest minds at
Jacobs. Our eight Jacobs Employee Networks (JENs) play a critical role in attracting new talent into our business, helping to shape our recruiting
strategies and policies, our science, technology, engineering,
arts and math (STEAM) programs, and our accessibility practices, including our Disability Employment Action Plan. Our global STEAM Ambassador
network helps us build partnerships with schools and other educational organizations and form lasting relationships that inspire the next generation
and sustain our business.

Our global career program "e3: engage. excel. elevate." is our unique approach to ensuring every employee can engage with our global network,
excel in their role and elevate their career. Our Total Rewards Compensation Program, includes our unique Global Career Structure framework,
combining career planning and development resources and tools
within a consistent career structure.

Conducting our business with integrity

Jacobs' ethics and Code of Conduct are rooted in our values and provide the standards and support to help us successfully navigate issues, make
the right decisions and conduct our business with the integrity that reflects our heritage and ethical reputation. We hold our suppliers and business
partners to the same standards.

Our culture of caring

BeyondZero® is our approach to the health, safety and security of our people, the protection of the environment and the resilience of Jacobs. Our
BeyondZero® culture of caring goes beyond taking health and safety statistics to zero, so that genuine care and respect for all people are
fundamental to our culture and reaches beyond our workplace. We work together to create a workplace that values the safety, positive mental health
and sense of belonging of all employees.

While our BeyondZero journey started with safety, as we continued to drive our injury rates down, we also expanded our thinking to our broader
culture of caring and particularly mental health. Through our mental health matters program, we furthered our industry-leading efforts to empower
our workforce, so they know they work in an environment where their mental health and well-being is the top priority and where everyone can "bring
their whole self to work." We have almost 2,000 Positive Mental Health Champions trained in how to guide staff who have mental health concerns or
crises to the appropriate level of help; support fellow employees; and help us encourage positive mental health throughout the workplace.

Supporting our communities

We live and play in the communities where we work - so we’re personally invested in doing what is right for people in the places and communities
we’re connected with. We craft solutions that affect the way people live. Thinking beyond one-dimensional approaches to help improve social,
environmental and economic resiliency. We provide infrastructure, technology and intelligence solutions to help communities build resiliency today
for a better tomorrow.

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From volunteering, employee matching campaigns and other fundraising, to providing wide-ranging technical and logistics support, every day,
Jacobs employees around the world make a positive difference for our clients and communities. As part of our PlanBeyond™ sustainability
strategy, the Collectively program (our Global Giving and Volunteering program) governs and centralizes our giving strategy and budget and
provides a user-friendly way for employees to donate and volunteer. The program unites our approximately 55,000 employees to support more than
2 million charities around the globe.

℠

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We challenge the accepted

We know that to create a better future, we must ask the difficult questions. We always stay curious and are not afraid to try new things.

What we do is more than a job, we work every day to make the world better for all. To us, everything we do - whether water scarcity, aging
infrastructure, access to life-saving therapies or sophisticated cyberattacks - is more than projects outlined in proposals and business plans. They’re
our challenges as human beings, too.

Transforming our innovation culture

For us, innovation means creating and delivering value — whether it’s new or different ideas, ways of working, services or solutions. In the past
year, we continued pushing our innovative mindset. We established our Innovation as a Service series of workshops and embraced an innovation
portfolio management platform to enable collaboration across internal and external teams, facilitating knowledge sharing and leading commercial
practices. We launched two Jacobs podcasts series, If/When and Inflection Points, and virtual engagement platforms like our Trends & Directions
videocasts and In the kNOW webinar series.

Beyond If is our award-winning global innovation program instilling and sustaining our innovation culture. It represents our creativity and agility to
challenge the accepted, with the domain expertise to push beyond our boundaries and deliver for today and into tomorrow. We act to turn ideas into
reality and create outcomes that deliver value for our clients and society at large.

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We aim higher

We do not settle - always looking beyond to raise the bar and deliver with excellence. We are committed to our clients by bringing innovative
solutions that lead to profitable growth and shared success. We take on some of the world’s biggest challenges, bringing a different way of thinking
to everything we do, challenging the status quo and questioning what others might accept.

We craft solutions that affect the way people live. From first-of-its-kind environmental cleanup efforts to digital twin technologies, from helping
communities adapt and thrive to retrofitting vaccine facilities to protect public health, we solve for better, never losing sight of our responsibility to
each other. We work with NASA scientists to leverage remotely-sensed data and images shot from 240 miles overhead on the International Space
Station to provide critical disaster response aid, and help communities recover. And, we’re on the ground assisting with critical Federal Emergency
Management Agency (FEMA) disaster-related operations throughout the U.S. and its territories.

The table below highlights examples of our key focus areas where we combine our deep domain knowledge with the latest advances in technology
to deliver solutions to solve our customer's most complex challenges.

BeyondExcellence℠ is our global program focused on quality, performance excellence and recognizing those who set the new standard through our
awards program.

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We live inclusion

We put people at the heart of our business. We have an unparalleled focus on inclusion, with a diverse team of visionaries, thinkers and doers. We
embrace all perspectives, collaborating to make a positive impact.

The aperture of inclusion is broader than lifestyle and culture. Joining, belonging and thriving - these are Jacobs’ key elements in retaining talent and
developing a culture where people want to stay - a place where you can bring your whole self to work. Fiscal 2020 brought a lot of change for our
people - a talent force of approximately 55,000 - and we doubled down on making sure talent, inclusion and diversity remained at the top of our
priorities by focusing on the employee experience.

Our eight Jacobs Employee Networks (JENs) have nearly 23,000 members among them and work to promote inclusion and equality, not only within
Jacobs but with our clients, potential recruits and with the communities that we serve. The JENs are entirely employee-led and organized, partnering
with leadership to drive strategy and policy.

In 2020, we launched our global Action Plan for Advancing Justice and Equality. Driven by members of our Black employee network, Harambee, in
partnership with our Executive Leadership Team and Jacobs’ Board of Directors, the plan sets out actionable initiatives and measurable objectives
to address embedded and systemic racial inequalities both within Jacobs and in communities across the world.

We tied inclusive behavior to our leaders’ performance review and compensation programs and delivered conscious inclusion training to nearly all
(98%) of our people.

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TogetherBeyond℠ is our approach to living inclusion every day and enabling diversity and equality globally. It’s not just about numbers, statistics or
quotas — it’s about every one of our people and the collective strength we take from their unique perspectives, ambitions and dreams.

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We maintain agile and disciplined capital deployment

Consistent with our profitable growth strategy, Jacobs pursues acquisitions, divestitures and other transactions to maximize long-term value by
continuing to reshape its portfolio to higher value solutions.

The Company has deployed capital to accelerate its profitable growth strategy through the following recent acquisitions:

• On March 6, 2020, we acquired the nuclear consulting, remediation and program management business of John Wood Group ("John

Wood Group" or "Wood Group"), a U.K.-based energy services company.

• On June 12, 2019, we acquired The KeyW Holding Corporation (“KeyW”), a U.S. based national security technology solutions provider

to the intelligence, cyber, and counterterrorism communities

• On December 15, 2017, we acquired CH2M, a provider of consulting and other services in the water, environmental, transportation and

nuclear remediation sectors.

During fiscal 2020 the Company repurchased $337.3 million of shares and paid $144.0 million in dividends to shareholders and noncontrolling
interests.

For additional information regarding certain issues related to our acquisition strategy, please refer to Item 1A- Risk Factors below.

Impact of COVID-19 on Our Business

On March 11, 2020, the World Health Organization characterized the outbreak of the novel coronavirus (“COVID-19”) as a global pandemic and
recommended certain containment and mitigation measures. On March 13, 2020, the United States declared a national emergency concerning the
outbreak, and the vast majority of states and many municipalities declared public health emergencies or took similar actions. Along with these
declarations, there were extraordinary and wide-ranging actions taken by international, federal, state and local public health and governmental
authorities to contain and combat outbreaks of COVID-19 in regions across the United States and around the world. These actions included
quarantines and “stay-at-home” or “shelter-in-place” orders, social distancing measures, travel restrictions, school closures and similar mandates for
many individuals in order to substantially restrict daily activities and orders for many businesses to curtail or cease normal operations unless their
work is critical, essential or life-sustaining. Although certain jurisdictions have subsequently taken steps to lift or ease such restrictions to various
degrees, many jurisdictions have subsequently reversed, or indicated they are considering reversing, such lifting or easing in response to increased
cases of COVID-19. In addition, governments and central banks in the United States and other countries in which we operate have enacted fiscal
and monetary stimulus and assistance measures to counteract the economic impacts of COVID-19.

As it became clear that the pandemic was unparalleled in the rate of community spread, we took early, decisive action to put people first, help flatten
the curve and take care of our clients and communities. In early March, we swiftly restricted travel and established return protocols for both client-
related and personal travel. In 10 days, we successfully transitioned more than 85% of our employees to a remote working environment to support
physical distancing. Where the essential and mission-critical nature of our work requires us to maintain staff at certain sites or locations, we worked
closely with our clients and established project-specific plans designed to ensure the safety of our people and the integrity of our operation. Using
technology and optimizing our networks, we continue to offer flexible work scenarios for our people, and to deliver business continuity for and
continued collaboration with our clients. Our Executive Leadership Team met daily for the first three months and weekly thereafter, focusing on
transparency, agile response and business resiliency; and our global and regional crisis management teams continued to maintain consistent
messaging and direct local responses. Regular global Town Halls, a weekly Chair and CEO email and short, self-produced leadership videos share
open, transparent information to connect and unite our global community.

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We are a company operating in a critical infrastructure industry, as defined by the U.S. Department of Homeland Security. Consistent with
international, federal, state and local requirements to date, we continue to materially operate. In addition, demand for certain of our services,
including those supporting health care relief efforts relating to COVID-19, has increased, and could continue to increase, as a result of COVID-19.
Notwithstanding our continued critical operations, COVID-19 has negatively impacted our business, and may have further adverse impacts on our
continued operations, including those listed and discussed in Item 1A, Risk Factors included in this Annual Report on Form 10-K. Accordingly, we
have reduced spending broadly across the Company, only proceeding with operating and capital spending that is critical. We have also ceased all
non-essential hiring and reduced discretionary expenses, including certain employee benefits and compensation. Looking ahead, we have
developed contingency plans to reduce costs further if the situation further deteriorates or lasts longer than current expectations. We will continue to
actively monitor the situation and may take further actions that alter our business operations as may be necessary or appropriate for the health and
safety of employees, contractors, customers, suppliers or others or as required by international, federal, state or local authorities.

Based on current estimates, we expect the impact of COVID-19 to continue in the first half of fiscal 2021, although to a lesser degree than what was
seen in fiscal 2020. Although this business disruption is expected to be temporary, significant uncertainty exists concerning the magnitude, duration
and impacts of the COVID-19 pandemic, including with regard to the effects on our customers and customer demand for our services. Accordingly,
actual results for future fiscal periods could differ materially versus current expectations and current results and financial condition discussed herein
may not be indicative of future operating results and trends.

For a discussion of risks and uncertainties related to COVID-19, including the potential impacts on our business, financial condition and results of
operations, see Item 1A - Risk Factors.

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Lines of Business

The services we provide fall into the following two lines of business (LOB): Critical Mission Solutions (CMS) and People & Places Solutions (P&PS)
which are also the Company’s reportable segments. For additional information regarding our segments, including information about our financial
results by segment and financial results by geography, see Note 19 - Segment Information of Notes to Consolidated Financial Statements beginning
on page F-1 of this Annual Report on Form 10-K.

Critical Mission Solutions (CMS)

Our Critical Mission Solutions line of business provides a full spectrum of cyber, data analytics, systems and software application integration
services and consulting, enterprise level operations and maintenance and mission IT, engineering and design, enterprise operations and
maintenance, program management, and other highly technical consulting solutions to government agencies as well as commercial customers. Our
representative clients include the U.S. Department of Defense (DoD), the Combatant Commands, the U.S. Intelligence Community, NASA, the U.S.
Department of Energy (DoE), Ministry of Defence in the U.K., the U.K. Nuclear Decommissioning Authority (NDA), and the Australian Department of
Defence, as well as private sector customers mainly in the aerospace, automotive, energy and telecom sectors.

Serving mission-critical end markets

Critical Mission Solutions serves broad sectors, including U.S. government services, cyber, nuclear, commercial, and international sectors.

Fiscal Year 2020

The U.S. government is the world’s largest buyer of technical services, and in fiscal 2020, approximately 79% of CMS’s revenue was earned from
serving the DoD, Intelligence Community and Federal Civilian governmental entities.

Trends affecting our government clients include information warfare, cyber, IT modernization, space exploration and intelligence, defense systems
and intelligent asset management, which are driving demand for our highly technical solutions.

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Another trend we are witnessing is an increase in the capabilities of unmanned aircraft and hypersonic weapons, which is impacting both offensive
and defensive spending priorities among our clients and is a driver for next generation solutions such as C5ISR (command, control,
communications, computer, combat systems, intelligence, surveillance and reconnaissance) and advanced aeronautical testing, respectively. We
are also seeing an increase in space exploration initiatives both from the U.S. government, such as NASA’s Artemis program to return to the moon
in 2024, as well as the commercial sector.

Within the nuclear sector, our customers have decades-long initiatives to manage, upgrade, decommission and remediate existing energy
infrastructure and nuclear weapons.

Our international customers, which accounted for 13% of fiscal 2020 revenue, have also increased demand for our IT and cybersecurity solutions
and nuclear projects, and the U.K. Ministry of Defence continues to focus on accelerating its strategic innovative and technology focused initiatives.

Leveraging our base market of offering valued technical services to U.S. government customers, CMS also serves commercial and international
markets. In fiscal 2020, approximately 8% of CMS’s revenue was from various U.S. commercial sectors, including the telecommunications sector,
which anticipates a large cellular infrastructure build-out from 4G to 5G technology. And like our government facility-based clients, our commercial
manufacturing clients are seeking ways to reduce maintenance costs and optimize their facilities with network connected facilities and equipment to
optimize operational systems, which we refer to as Intelligent Asset Management.

Leveraging strong domain expertise to deliver solutions

CMS brings domain-specific capability and cross-market innovations in each of the above sectors by leveraging six core capability groups.

•

Information Technology Services. Across various business units in CMS, we provide a wide range of software development and
enterprise IT solutions. We develop, integrate, modify and maintain software solutions and complex systems. These services include a
broad array of lifecycle services, including requirements analysis, design, integration, testing, maintenance, quality assurance and
documentation management. Our software activities support all major methodologies, including Agile, DevSecOps and other hybrid
methodologies. For our enterprise IT capability, we develop, implement and sustain enterprise information technology systems, with a
focus on improving mission performance, increasing security and reducing cost for our customers. Solutions typically include IT service
management, data center consolidation, network operations, enterprise architecture, mobile computing, cloud computing and migration,
software, infrastructure and platform as a service (SaaS, IaaS and PaaS), and data collection and analytics.

Cyber and Data Analytics. Strongly enhanced by our recent acquisition of KeyW, CMS offers a full suite of cyber services for our
government and commercial clients, including defensive cyber operations and training, offensive cyber operations, cloud and data
analytics, threat intelligence, intelligence analysis, incident response and forensics, software and infrastructure security engineering,
computer forensics and exploitation and information technology-operational technology (IT-OT) convergence services.

C5ISR (Command, Control, Communications, Computers, Combat Systems, Intelligence, Surveillance and Reconnaissance).
CMS is a leader in the design, development, analysis, implementation and support of C5ISR systems and technology in any
environment, including land, sea, air, space and cyber domains. We provide advanced solutions for collecting, processing, exploiting
and disseminating geospatial intelligence for the U.S. and Allied Intelligence Communities and Special Forces organizations. Core
capabilities include: imaging systems, radar systems, precision geo-location products, custom packaging and microelectronics and
customizable tagging, tracking and locating devices.

Technical Services. We provide a broad range of technical consulting services to our government and commercial clients, including:
systems integration, specialized propulsion, avionics, electrical, materials, aerodynamics, manufacturing processes modeling and
simulation, testing and evaluation, scientific research, intelligent asset management, program management and consulting. NASA is
one of our major government customers in the U.S., where we provide a wide range of technology services. For our
telecommunications customers, we provide permitting, site planning and engineering to enable the development of wireline and wireless
communications including the development of 5G small cell sites.

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•

Facility Engineering and Operations. We provide services for advanced technical structures and systems, including flight/launch
facilities, R&D facilities, test facilities and military range facilities. Customers also engage us to operate, maintain and provide technical
services for these facilities and systems over their lives. We also provide sustainment and technical services for facility-oriented clients
including for the automotive industry where we provide highly technical aerodynamic, climatic, altitude and acoustic solutions for our
customer research and development operations.

Nuclear Solutions. We provide support across the full nuclear life cycle, including new build, operational support, and
decommissioning. Support includes project management, engineering, technical and R&D services, complemented by the full range of
CMS’ other services. Customers include the U.S. DoE, the UK’s NDA, and commercial companies such as EDF Energy, the UK’s
largest producer of low-carbon energy.

Applying internally-developed technology

Across multiple businesses within CMS we license internally developed technology such as:

•

KeyRadar®: The acquisition of KeyW brought numerous internally developed technologies, including KeyRadar, a scalable, software-
defined synthetic aperture radar that can be configured to address a variety of missions, ranging from foliage penetration to long-range
maritime domain awareness or long-range moving target detection.

• Ginkgo: Ginkgo is the only virtual learning environment specifically created for cybersecurity training. Designed by experienced cyber
instructors, Ginkgo offers a complete solution for implementing hands-on IT and cybersecurity training for both local and distance
learning environments on desktops, tablets, and other mobile devices.

•

ion©: ion© is our open architecture, multi-protocol Industrial Internet of Things (IIoT) software solution providing an integrated, secure,
and scalable platform for data aggregation integration, analysis and visualization. Ion© is both licensed and delivered as-a-service (aas)
to commercial customers around the globe to enable a host of operational solutions, ranging from worker monitoring and safety to
industrial asset visibility and management to smart/connected construction. Most recently, Jacobs is using ion© to support Return to
Work solutions that allow our pharmaceutical clients to return mission essential personnel to their advanced research and production
facilities despite the ongoing COVID-19 pandemic.

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People & Places Solutions (P&PS)

Jacobs' People & Places Solutions line of business provides end-to-end solutions for our clients’ most complex projects - whether connected
mobility, integrated water management, smart cities, advanced manufacturing or environmental stewardship. In doing so, we employ predictive
analytics, artificial intelligence and automation, digital twin technology, IoT smart sensors, geospatial visualization and advanced delivery processes
and tools for consulting, planning, architecture, design, engineering, and implementation, as well as long-term operation of facilities and
infrastructure. Solutions may be delivered as standalone engagements or through comprehensive program management that integrates disparate
workstreams to yield additional benefits not attainable through project-by-project implementation. We also provide progressive design-build and
construction management at-risk delivery for our P&PS clients.

Our clients include national, state and local government in the U.S., Europe, U.K., Middle East, Australia, New Zealand and Asia, as well as
multinational private sector clients throughout the world.

Fiscal Year 2020

Serving broad market sectors that support people and places

Aging infrastructure; climate action; urbanization; water, food and energy security; global supply chains; pandemic preparedness and response;
environmental, social, and corporate governance (ESG); and digital transformation are driving new challenges and opportunities for our clients.
These drivers are highlighting the need for holistic, integrated technology solutions that draw on the domain knowledge resident in the
multidisciplinary consulting and delivery expertise of our global workforce. For example, an airport is no longer simply aviation infrastructure but is
now a smart city with extensive operational, cybersecurity and autonomous mobility requirements, as well as the contactless travel requirements
necessary to best manage COVID-19. Master planning for a city now requires advanced analytics to plan for climate adaption and next-generation
mobility as well as revenue generating fiber infrastructure. Furthermore, the future of nearly all water infrastructure will be highly technology-enabled,
leveraging solutions with digital twins, predictive analytics and smart metering technology to ensure we're giving communities, industries and regions
the secure water resource they need to flourish and expand.

This increase in technology requirements is a key factor in our organic growth strategy as well as our recent acquisitions and divestitures. Moreover,
our business model is evolving to provision a broader spectrum of digital- and technology-enabled solutions to address our infrastructure clients'
challenges with less exposure to craft construction services. Our focus on the five core sectors of Transportation, Water, Built Environment,
Environmental and Advanced Facilities provides us with the ability to leverage our expansive domain expertise across all global markets, enabling
truly end-to-end connected solutions for our clients' most complex major projects and programs, including the London 2012 Olympic and Paralympic
Games, Expo 2020 Dubai, and the LaGuardia Airport Redevelopment.

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Today, we are executing complex solutions that pull expertise from all markets, fused with digital expertise, for major developments in places like
London, Dubai, Sydney, Singapore, Miami, Los Angeles and Toronto.

Leveraging our global platform to deliver integrated solutions to clients

One of our key differentiators is our global integrated delivery model, which harnesses deep domain expertise from our global Solutions and
Technology organization that is leveraged with the benefits of scale when we focus the world’s best talent to deliver innovative solutions and value to
our clients.

• Within transportation, we provide sustainable solutions to plan, develop, finance, design engineer, construct, operate and maintain

next generation mobility across all modes, including highway, bridge, rail and transit, aviation, port and maritime infrastructure. For
example, we do this by assessing the impact of autonomous vehicles on roadways and cities for transportation agencies, engineering
and specifying vehicles for mass-transit; delivering consulting services for digital fare payment systems; providing program
management of the largest airport developments, designing cutting edge automated container terminals and ports infrastructure and
utilizing big data to develop cross modal mobility solutions. Our clients encompass the world’s largest transportation agencies as well as
private shipping and logistics companies worldwide, including the multi-modal Port Authority of New York and New Jersey, Transport for
London, Highways England, Transport for New South Wales and Etihad Rail.

• Water is one of the most precious resources in the world. Extreme weather events in the form of droughts, desertification and flooding
are stressing water supplies, at the same time as population growth and industrialization are increasing demand. Addressing these
challenges, we provide integrated solutions across water and wastewater treatment, water reuse, and water resources such as the
deployment of next generation smart metering, digital twin technology and highly technical consulting, engineering, design-build and
operation of complex water systems. We support our clients on some of the world’s largest water infrastructure projects such as
California WaterFix, Thames Tideway, Houston Water and Singapore National Water Agency.

•

For the built environment, we deliver full-service architecture, engineering, interiors, planning, urban design, landscape architecture
and project delivery solutions for government, corporate, commercial, institutional and industrial clients across diverse sectors.
Our technology-enabled expertise ranges from the future of work, transaction advisory and asset management to transportation hubs,
urban developments, government, healthcare, higher education and science facilities, as well as sports and entertainment venues. We
plan and deliver resilient, triple bottom line-based solutions that are connected, secure and smart, including the rebuild of Tyndall Air
Force Base in Florida into a visionary Installation of the Future; the corporate headquarters and research facility relocation of Spark
Therapeutics in Philadelphia, Pennsylvania; and the expanded Blacktown Mount Druitt Hospital in New South Wales, Australia.

In our environmental business, we utilize a multidisciplinary, systems-oriented approach to develop environmental planning for
infrastructure development; data-driven site remediation and regeneration for per- and polyfluoroalkyl substances (PFAS) and
other known and emerging contaminants; environmental health & safety (EHS) operational excellence and information management;
and climate action solutions that incorporate sustainability and resiliency principles as essential to the well-being of all people and of our
planet. We also provide post-disaster response and recovery services in support of the Federal Emergency Management Agency’s
mission throughout the U.S. In addition to providing end-to-end technology-enabled solutions for multinational oil & gas, chemical and
life sciences, mining, manufacturing and energy clients, Jacobs provides comprehensive environmental services for the U.S.
Department of Defense, the U.S. Environmental Protection Agency, NASA and other civilian agencies, the UK Environment Agency,
and the Australian Department of Defense.

• Within advanced facilities, we provide fully integrated solutions for highly specialized facilities in the fields of medical research,

sustainable manufacturing, nanoscience, biotechnology, semiconductor and data centers. Our services span the full range of facility
work, from early planning and site selection through architecture, engineering, construction and facility operations, all tailored to specific
client needs in the life sciences and pharmaceutical, specialty manufacturing, microelectronics and data intensive industries. As the
largest professional services provider to the biopharmaceutical industry, we are working with our multinational clients to rapidly increase
capacity for vaccines and therapeutics, as well as reshoring manufacturing facilities, in response to the COVID-19 pandemic.
Representative projects include the retrofit of AstraZeneca’s West Chester, Ohio manufacturing facility to deliver a potential COVID-19
vaccine;

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the Mountbatten Nanotechnology Electronics Research Complex, University of Southampton, U.K.; and the Procter & Gamble,
Singapore Innovation Center.

Applying internally developed technology
A strong foundation of data-rich innovative solutions is woven into every project that we deliver. This may include Jacobs-developed proprietary
software that employs an array of technical expertise to enable the most efficient, effective and predictable solutions for our clients. Examples of
these technologies include:

•
•

•

TrackRecord is a workflow automation and compliance management platform for the delivery of major projects.
AquaDNA is a predictive analytics platform that integrates innovative technologies for wastewater asset management through an AI
learning platform, facilitating a move from reactive to proactive maintenance and reduced operation and maintenance costs.

Travel Service Optimisation (TSO) is Jacobs' travel sharing solution for Special Education needs children which centers on the
children’s ability to travel together rather than focusing on their disability.

SafetyWeb is a site hazard management and compliance tool.

ProjectMapper is a web based geospatial mapping and project visualization software platform.

Flood Modeller provides proactive decision-making to help manage our environment and the challenges associated with flood risk. It is
suitable for a wide range of engineering and environmental applications, from calculating simple backwater profiles and modeling entire
catchments to mapping potential flood risk for entire countries.

ion© is an Industrial Internet of Things (IoT) multi-protocol wireless application networking system which provides an open, integrated,
secure and scalable system for data aggregation and viewing.

Replica™ is Jacobs’ digital twin solution software platform and consists of the following capabilities:

Replica Parametric Design™ (formerly CPES™) provides outputs on construction quantities and costs, life cycle quantities and costs,
and estimates of environmental impacts. Rapid process design in Replica Process and the resulting development of the Replica
Parametric Designs allows for thorough alternatives analysis and enhanced team communication.

Replica Preview™ is used for early stage visualization of facility designs. This software rapidly creates scaled three-dimensional
designs, which can be placed on Google Earth®. Rapid design development in Replica Parametric Design and visualization with
Replica Preview allows for informed analysis of many alternatives and sound decision-making.

Replica Systems Analysis™ (formerly Voyage™) is a flexible platform that can simulate resource systems dynamically, over time.
Examples of modeled systems include water resources, energy, solid waste and traffic. The ability to connect complex systems together
in a single interface that is visually intuitive leads to informed team collaboration and creative solutions.

Replica Process™ allows Jacobs' world-renowned expertise in water treatment to be simulated both statically and dynamically over
time in Replica Process™ software. Much of the process predictive capabilities in Replica Process are founded on the Jacobs'
Pro2D2™ and Source™ software. Informed decisions are founded on the ability of Replica Process to provide details on system
performance among many alternatives, very quickly.

Replica Hydraulics™ was designed to simulate all pressurized and gravity flow hydraulics of a system, simultaneously. Replica’s
hydraulic blocks were built on accepted engineering practice equations and have been successfully verified on hundreds of projects.
The Replica Hydraulics library is the foundation for complete, dynamic water system analysis and can be used exclusively for hydraulic
analysis of a system or in conjunction with Replica Process, Replica Controls and/or Replica Air.

Replica Controls™ allows for dynamic simulation of system instrumentation such as flow meters, indicator transmitters, limit switches
and stream analyzers as well as the logic objects including PID controllers, sequencers, units, controller and alarms. The software's
controls capabilities and functionality align with industry design standards and its ability to predict full scale performance is unmatched
due to the connectivity with Replica Hydraulics.

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Replica Air™ simulates all aspects of a compressible fluid (e.g. air) supply system, including pipes, valves, diffusers and blowers. The
ability to couple Replica Air with Replica Controls in a single simulation allows for the development of unique and robust designs that
reduce energy use and life cycle costs.

Energy, Chemicals and Resources (ECR)

ECR Disposition

On April 26, 2019, Jacobs completed the sale of its Energy, Chemicals and Resources (ECR) business to Worley Limited, a company incorporated
in Australia (Worley), for a purchase price of $3.4 billion consisting of (i) $2.8 billion in cash plus (ii) 58.2 million ordinary shares of Worley, subject to
adjustments for changes in working capital and certain other items (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
Consolidated Statements of Earnings as discontinued operations for all periods presented. Additionally, assets and liabilities of the ECR business
were reflected as held-for-sale in the Consolidated Balance Sheets through September 27, 2019. As of the year ended October 2, 2020, all of the
ECR business to be sold under the terms of the sale has been conveyed to Worley and as such, no amounts remain held for sale. For further
discussion see Note 15- Sale of Energy, Chemicals and Resources ("ECR") Business to the consolidated financial statements.

Prior to the sale, the ECR business served the energy, chemicals and resources sectors, including upstream, midstream and downstream oil, gas,
refining, chemicals and mining and minerals industries. The ECR business provided integrated delivery of complex projects for our Oil and Gas,
Refining, and Petrochemicals clients. Bridging the upstream, midstream and downstream industries, ECR's services encompassed consulting,
engineering, procurement, construction, maintenance and project management.

Significant Customers

The following table sets forth the percentage of total revenues earned directly or indirectly from agencies of the U.S. federal government for each of
the last three fiscal years:

2020
33%

2019
27%

2018
32%

Given the percentage of total revenue derived directly from the U.S. federal government, the loss of U.S. federal government agencies as customers
would have a material adverse effect on the Company. In addition, any or all of our government contracts could be terminated, we could be
suspended or debarred from all government contract work, or payment of our costs could be disallowed. Approximately 80% of revenue derived
directly from the U.S. federal government is in the CMS segment. For more information on risks relating to our government contracts, see Item 1A -
Risk Factors.

Contracts

While there is considerable variation in the pricing provisions of the contracts we undertake, our contracts generally fall into two broad categories:
cost-reimbursable and fixed-price. The following table sets forth the percentages of total revenues represented by these types of contracts for each
of the last three fiscal years:

Cost-reimbursable
Fixed-price, limited risk
Fixed-price, at risk

2020
76%
17%
7%

2019
76%
18%
6%

2018
74%
19%
7%

In accordance with industry practice, most of our contracts (including those with the U.S. federal government) are subject to termination at the
discretion of the client, which is discussed in greater detail in Item 1A - Risk Factors. In such situations, our contracts typically provide for
reimbursement of costs incurred and payment of fees earned through the date of termination.

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Cost-Reimbursable Contracts

Cost-reimbursable contracts generally provide for reimbursement of costs incurred plus an amount of profit. The profit element may be in the form of
a simple mark-up applied to the labor costs incurred or it may be in the form of a fee, or a combination of a mark-up and a fee. The fee element can
also take several forms. The fee may be a fixed amount; it may be an amount based on a percentage of the costs incurred; or it may be an incentive
fee based on targets, milestones, or performance factors defined in the contract.

Fixed-Price Contracts

Fixed-price contracts include both “lump sum bid” contracts and “negotiated fixed-price” contracts. Under lump sum bid contracts, we typically bid
against competitors based on client-furnished specifications. This type of pricing presents certain inherent risks, including the possibility of
ambiguities in the specifications received, problems with new technologies, and economic and other changes that may occur over the contract
period. Additionally, it is not unusual for lump sum bid contracts to lead to an adversarial relationship with clients, which is contrary to our
relationship-based business model. Accordingly, lump sum bid contracts are not our preferred form of contract. In contrast, under a negotiated fixed-
price contract, we are selected as the contractor first and then we negotiate a price with our client. Negotiated fixed-price contracts frequently exist
in single-responsibility arrangements where we perform some portion of the work before negotiating the total price of the project. Thus, although
both types of contracts involve a firm price for the client, the lump sum bid contract provides the greater degree of risk to us in our services contracts
as well as construction. However, because of economies that may be realized during the contract term, both negotiated fixed-price and lump sum
bid contracts may offer greater profit potential than other types of contracts. The Company carefully manages the risk inherent in these types of
contracts. In recent years, most of our fixed-price work has been either negotiated fixed-price contracts or lump sum bid contracts for design and/or
project services, rather than turnkey construction.

Competition

We compete with a large number of companies across the world including technology consulting, federal IT services, aerospace, defense and
engineering firms. Typically, no single company or companies dominate the markets in which we provide services and in many cases we partner
with our competitors or other companies to jointly pursue projects. AECOM, Booz Allen, CACI, KBR, Leidos, Parsons, SAIC, Tetra Tech, WSP,
General Dynamics and Northrop Grumman are some of our competitors. We compete based on the following factors, among others: technical
capabilities, reputation for quality, price of services, safety record, availability of qualified personnel, and ability to timely perform work and contract
terms.

Human Capital Management

At Jacobs, our people are the heart of our business. With our culture of caring and inclusion as our foundation, we celebrate the differences that
drive our collective strength and encourage our employees that there is no limit to who they can be and what we can achieve. Together we deliver
extraordinary solutions for a better tomorrow and live by our employee value statement: Jacobs. A world where you can.

As of October 2, 2020, we had a workforce of approximately 55,000 people worldwide, including a contingent workforce of approximately 3,000
people. The breakdown of our employees by region is as follows:

Region
Americas
Europe (including U.K)
Asia Pacific (including India)
Middle East and Africa

(1) Excludes contingent workforce

Percentage of Global
Workforce

(1)

62 %
23 %
12 %
3 %

Hiring, Training and Developing our Workforce

The success of Jacobs is dependent on our ability to hire, retain, engage and leverage highly qualified employees, including engineers, architects,
designers, digital specialists, craft employees and corporate professionals. We put the

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spotlight on ensuring that Jacobs is an employer of choice in every way: we aspire to be a merit-based organization that is inclusive and diverse; we
are building an inclusive culture where all employees feel they belong. Our culture is the foundation for selecting, developing and retaining the best
and brightest minds at Jacobs. Our eight Jacobs Employee Networks (JENs) play a critical role in attracting new talent into our business, helping to
shape our recruiting strategies and policies, our science, technology, engineering, arts and math programs, and our accessibility practices. In fiscal
2020, more than1,300 graduates, interns and apprentices were welcomed to our global team.

In fiscal 2020, we launched our new employee experience e3: engage. excel. elevate. From a talent profile for every employee to providing
continuous celebrations and feedback, and learning new skills and driving performance, e3 is our unique approach to ensuring every employee can
engage, excel in their role and elevate their career. We also introduced GlobalShare to enhance our ability to resolve short-term staffing needs and
enable employees to pursue opportunities across Jacobs. We also made enhancements to some of our policies to deliver greater work-day flexibility
to employees. Additionally, we undertook several new initiatives related to our Total Rewards Program, including implementing our Global Career
Structure framework, combining career planning and development resources and tools within a consistent career structure, and a global pay equity
review of our pay systems and processes to make pay equity a lasting reality at Jacobs.

Focus on Inclusion and Diversity

At Jacobs we have an unparalleled focus on inclusion, with a diverse team of visionaries, thinkers and doers. We embrace all perspectives,
collaborating to make a positive impact. The aperture of inclusion is broader than lifestyle and culture. Joining, belonging and thriving are Jacobs’
key elements in retaining talent and developing a culture where people want to stay – and a place where you can bring your best, whole self to work.

TogetherBeyond is our approach to living inclusion every day and enabling diversity and equality globally – it is not just about numbers and
statistics, but about every one of our people and the collective strength we take from their unique perspectives and ambitions.

℠

Having a culture of belonging where everyone can join in and thrive allows us to recruit and retain the best global talent and drive innovative
solutions for our business, clients and communities. “We live inclusion” is supported by the strength of tangible leadership commitment and
accountability at Jacobs. In that regard, we have tied inclusive behavior to our leaders’ performance review and compensation programs and
delivered conscious inclusion training to nearly all (98%) of our people.

As of October 2, 2020, our U.S. employees had the following race and ethnicity demographics:

White
Hispanic / Latino
Black
Asian
Multiracial
American Indian or Alaska Native
Native Hawaiian / Other Pacific Islander
Not provided

October 2, 2020
All U.S. Employees (1)

71.4 %
8.9 %
8.5 %
6.8 %
2.0 %
0.4 %
0.3 %
1.7 %

(1) Includes U.S. employee population only (excluding approximately 2,000 craft
employees)

Over the last year, we have seen tangible examples of progress resulting from our approach to inclusion. In fiscal 2020, we launched our global
Action Plan for Advancing Justice and Equality. Driven by members of our Black employee network, Harambee, in partnership with our Executive
Leadership Team and Jacobs’ Board of Directors, the Action Plan sets out actionable initiatives and measurable objectives to address advance
equality within the company and around the communities where we work.

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As of October 2, 2020, our global employees had the following gender demographics:

All employees

October 2, 2020

Women

Men

29.5%

70.5%

Looking ahead, we will continue to focus on inclusion and diversity by:

•
•

Following through on our global Action Plan for Advancing Justice and Equality
Striving to achieve our aspirational goals of creating a more gender-balanced and racially/ethnically diverse workforce around the globe to
more appropriately reflect the labor markets and communities in which we live and serve
Amplifying our culture of belonging

•
• Measuring employee sense of inclusion and belonging through a global survey
•

Identifying, developing and promoting allies across Jacobs

We know we have more to do when it comes to increasing the representation of historically underrepresented groups within our global workforce,
and we are committed to taking action and ensuring Jacobs is, and remains, an employer of choice.

Our Employees’ Safety and Wellbeing

BeyondZero® is our approach to the health, safety and security of our people, the protection of the environment and the resilience of Jacobs. In
fiscal 2020, we continued to demonstrate safety excellence with another year of zero employee fatalities at work, a 25% reduction in employee
recordable incidents from fiscal 2019, and a total recordable incident rate of 0.17 (recorded in accordance with OSHA record keeping requirements)
as of October 2, 2020 – compared to the North American Industry Classification System’s most recently reported aggregate rate of 0.60.

While our BeyondZero journey started with safety, as we continued to drive our injury rates down, we also expanded our thinking to our broader
culture of caring and particularly mental health. It was this strong foundation that helped us act swiftly at the start of the COVID-19 pandemic. The
foundation elements of our existing “Mental Health Matters” program enabled us to respond quickly to launch our “Mental Health Matters Resiliency”
program and to promote our suicide awareness campaign in fiscal 2020.

In fiscal 2020, almost 2,000 Positive Mental Health Champions (an 11% increase from fiscal 2019) trained to support the mental wellbeing of our
employees and one in every 29 employees trained as a Positive Mental Health Champion. In addition, 100% of Jacobs’ Executive Leadership Team
participated in Positive Mental Health training.

Information About Our Executive Officers

The information required by Paragraph (a), and Paragraphs (c) through (g) of Item 401 of Regulation S-K (except for information required by
Paragraph (e) of that Item to the extent the required information pertains to our executive officers) and Item 405 of Regulation S-K is set forth under
the captions “Members of the Board of Directors” and “Delinquent Section 16(a) Reports” in our definitive proxy statement to be filed with the SEC
pursuant to Regulation 14A within 120 days after the close of our fiscal year and is incorporated herein by reference.

Page 25

The following table presents the information required by Paragraph (b) of Item 401 of Regulation S-K.

Name

Age

Position with the Company

Steven J. Demetriou
Kevin C. Berryman
Robert V. Pragada
Dawne S. Hickton
Joanne E. Caruso
William B. Allen, Jr.
Michael R. Tyler

62 Chair and Chief Executive Officer
61 President and Chief Financial Officer
52 President and Chief Operating Officer
63 Executive Vice President and COO Critical Mission Solutions
60 Executive Vice President, Chief Legal and Administrative Officer
56 Senior Vice President, Chief Accounting Officer
64 Senior Vice President, General Counsel and Chief Compliance Officer

Year Joined the Company
2015
2014
2016
2019
2012
2016
2013

All of the officers listed in the preceding table serve in their respective capacities at the pleasure of the Board of Directors of the Company.

Mr. Demetriou joined the Company in August 2015. Mr. Demetriou served as Chairman and CEO of Aleris Corporation for 14 years, a global
downstream aluminum producer based in Cleveland, Ohio. Over the course of his career, he has gained broad experience with companies in a
range of industries including metals, specialty chemicals, oil & gas, manufacturing and fertilizers.

Mr. Berryman joined the Company in December 2014. Mr. Berryman served as EVP and CFO for five years at International Flavors and Fragrances
Inc., an S&P 500 company and leading global creator of flavors and fragrances used in a wide variety of consumer products. Prior to that, he spent
25 years at Nestlé in a number of finance roles including treasury, mergers & acquisitions, strategic planning and control.

Mr. Pragada rejoined the Company in February 2016 after serving as President and Chief Executive Officer of The Brock Group since August
2014. From March 2006 to August 2014 Mr. Pragada served in executive and senior leadership capacities with the Company.

Ms. Hickton joined the Company as Chief Operating Officer and President of Critical Mission Solutions in 2019. Prior to this role, Ms. Hickton served
as a member of the Board of Directors of the Company and was previously the Vice Chair and Chief Executive Officer for eight years at RTI
International Metals, Inc., a global supplier of advanced titanium products and services in commercial aerospace, defense, propulsion, medical
device and energy markets.

Ms. Caruso joined the Company in 2012. Prior to becoming Executive Vice President, Chief Legal and Administrative Officer, Ms. Caruso was
Senior Vice President, Chief Administrative Officer, and previously held the positions of Senior Vice President, Global Human Resources and Vice
President, Global Litigation. Prior to joining the Company, Ms. Caruso was a partner in two international law firms, Howrey LLP and Baker &
Hostetler LLP.

Mr. Allen joined the Company in October 2016. Mr. Allen served as Vice President, Finance and Principal Accounting Officer at Lyondellbasell
Industries, N.V. from 2013 to 2016. Prior to that, he was with Albemarle Corporation, where he served as Vice President, Corporate Controller and
Chief Accounting Officer from 2009 to 2013 after serving in CFO roles for their Catalysts and Fine Chemistry businesses from 2005 to 2009.

Mr. Tyler joined the Company in June 2013. He previously served as Executive Vice President, General Counsel and Secretary of Sanmina
Corporation, a global electronics manufacturing services provider from April 2007 to June 2013, and Chief Legal and Administrative Officer of
Gateway, Inc., a computer hardware company, from January 2004 to April 2007.

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Additional Information

Jacobs was founded in 1947 and incorporated as a Delaware corporation in 1987. We are headquartered in Dallas, Texas, USA. You may read and
copy any materials we file with the SEC at the SEC’s Public Reference Room located at 100 F Street N.E., Washington, D.C. 20549. In order to
obtain information about the operation of the Public Reference Room, a person may call the SEC at 1-800-732-0330. The SEC also maintains a site
on the Internet that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC.
The SEC’s website is http://www.sec.gov. You may also read and download the various reports we file with, or furnish to, the SEC free of charge
from our website at www.jacobs.com.

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Item 1A. RISK FACTORS

We operate in a changing global environment that involves numerous known and unknown risks and uncertainties that could materially

adversely affect our business, financial condition and results of operations. The risks described below highlight some of the factors that have
affected and could affect us in the future. We may also be affected by unknown risks or risks that we currently think are immaterial. If any such
events actually occur, our business, financial condition and results of operations could be materially adversely affected.

Summary Risk Factors

The following is a summary of some of the risks and uncertainties that could materially adversely affect our business, financial condition and

results of operations. You should read this summary together with the more detailed description of each risk factor contained below.

Risks Related to Our Operations

•

The COVID-19 pandemic, including the measures that international, federal, state and local public health and other governmental authorities
implement to address it, have adversely affected, and may continue to adversely affect, our business, financial condition and results of
operations.
Project sites are inherently dangerous workplaces. If we, the owner, or others working at the project site fail to maintain safe work sites, and
our employees or others become injured, disabled or even lose their lives, we can be exposed to significant financial losses and reputational
harm, as well as civil and criminal liabilities.

• Our results of operations depend on the award of new contracts and the timing of the performance of these contracts.
• We engage in a highly competitive business. If we are unable to compete effectively, we could lose market share and our business and

•

results of operations could be negatively impacted.
The nature of our contracts, particularly those that are fixed-price, subjects us to risks of cost overruns. We may experience reduced profits
or, in some cases, losses if costs increase above budgets or estimates or if the project experiences schedule delays.
The contracts in our backlog may be adjusted, canceled or suspended by our clients and, therefore, our backlog is not necessarily indicative
of our future revenues or earnings. Additionally, even if fully performed, our backlog is not a good indicator of our future gross margins.
• Contracts with the U.S. federal government and other governments and their agencies pose additional risks relating to future funding and

•

compliance. Our project execution activities may result in liability for faulty services.

• Our project execution activities may result in liability for faulty services.
•

The outcome of pending and future claims and litigation could have a material adverse impact on our business, financial condition, and
results of operations.

• Our use of joint ventures and partnerships exposes us to risks and uncertainties, many of which are outside of our control
•

Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could weaken our ability to win contracts,
which could result in reduced revenues and profits.

• Our international operations are exposed to additional risks and uncertainties, including unfavorable political developments and weak

foreign economies.

• Cyber security or privacy breaches, or systems and information technology interruption or failure could adversely impact our ability to

operate or expose us to significant financial losses and reputational harm.

• We are subject to professional standards, duties and statutory obligations on professional reports and opinions we issue, which could

•

subject us to monetary damages.
If we do not have adequate indemnification for our nuclear services, it could adversely affect our business, financial condition and results of
operations.

• Our actual results could differ from the estimates and assumptions used to prepare our financial statements.
•

An impairment charge on our goodwill could have a material adverse impact on our financial position and results of operations.

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• We may be required to contribute additional cash to meet any underfunded benefit obligations associated with retirement and post-

retirement benefit plans we manage.

• Demand for our services is cyclical as the sectors and industries in which our clients operate are impacted by economic downturns,

reductions in government or private spending and times of political uncertainty.

• Rising inflation, interest rates, and/or construction costs could reduce the demand for our services as well as decrease our profit on our

existing contracts, in particular with respect to our fixed-price contracts.

• Our global presence could give rise to material fluctuations in our income tax rates.
• Our businesses could be materially and adversely affected by events outside of our control.
•

Climate change and related environmental issues could have a material adverse impact on our business, financial condition and results of
operations.

• Our continued success is dependent upon our ability to hire, retain, and utilize qualified personnel.
• Our business strategy relies in part on acquisitions to sustain our growth. Acquisitions of other companies present certain risks and

uncertainties.

Risks Related to Regulatory Compliance

•
Past and future environmental, health, and safety laws could impose significant additional costs and liabilities.
•
If we fail to comply with federal, state, local or foreign governmental requirements, our business may be adversely affected.
• We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.
• We may be affected by market or regulatory responses to climate change.

Risks Related to Our Indebtedness

• We rely on cash provided by operations and liquidity under our credit facilities to fund our business. Negative conditions in the credit and

financial markets and delays in receiving client payments could adversely affect our cost of borrowing and our business.
• Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win some contracts.

Risks Related to Our Common Stock

• Our quarterly results may fluctuate significantly, which could have a material negative effect on the price of our common stock.
•
•

There can be no assurance that we will pay dividends on our common stock.
In the event we issue stock as consideration for certain acquisitions we may make, we could dilute share ownership, and if we receive stock
in connection with a divestiture, the value of stock is subject to fluctuation.

• Delaware law and our charter documents may impede or discourage a takeover or change of control.

Risks Related to Our Operations

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sustaining. Although certain jurisdictions have taken steps to lift or ease such restrictions to various degrees, some jurisdictions have subsequently
reversed such lifting or easing in response to increased cases of COVID-19.

The COVID-19 pandemic has adversely affected, and may continue to adversely affect, certain elements of our business, including, but not limited
to, the following:

• We have experienced, and may continue to experience, reductions in demand for certain of our services and the delay or abandonment

of ongoing or anticipated projects due to our clients’, suppliers’ and other third parties’ diminished financial conditions or financial
distress, as well as governmental budget constraints. These impacts are expected to continue or worsen if “stay-at-home”, “shelter-in-
place”, social distancing, travel restrictions and other similar orders, measures or restrictions remain in place for an extended period of
time or are re-imposed after being lifted or eased. Although we have experienced, and may continue to experience, an increase in
demand for certain of our services as a result of new projects that have arisen in response to the COVID-19 pandemic, there can be no
assurance that any such increased demand would be sufficient to offset lost or delayed demand.

• Government-sponsored stimulus or assistance programs enacted to-date in the United States and in the foreign countries in which we

operate in response to the COVID-19 pandemic have only been available to us or our customers or suppliers on a limited basis and are
insufficient to address the full impact of the COVID-19 pandemic. For example, the Coronavirus Aid, Relief and Economic Security Act
(the “CARES Act”) contains provisions that authorize Federal Agencies to pay contractors to retain key workers where regular work
schedules are not possible due to quarantines or other social isolation measures. We have pursued payment for these alternative work
arrangements with applicable Federal Agencies or contracting officials and will continue to assess the availability of such subsidies on a
contract-by-contract basis. Certain foreign governments are also permitting contracting authorities to revise the terms of government
contracts and/or providing various forms of subsidies to compensate companies who maintain their workforce rather than impose layoffs
or furloughs. Certain other governments have provided partial expense reimbursement for furloughed employees and also provided for
the deferral of payroll taxes. Although we expect to recover a significant portion of COVID-19 related labor costs, we do not expect to
recover the full amount of either our labor cost or associated fee. Additionally, these and other government-sponsored assistance and
stimulus programs are subject to renewal, modification or termination by the applicable governing bodies. If any government-sponsored
program from which we receive benefits is modified or terminated, our benefits thereunder could decline or cease altogether, which
could have a material adverse effect on our business, financial position, results of operations, and/or cash flows.

• Our clients may be unable to meet their payment obligations to us in a timely manner, including as a result of deteriorating financial
condition or bankruptcy resulting from the COVID-19 pandemic and resulting economic impacts. Further, other third parties, such as
suppliers, subcontractors, joint venture partners and other outside business partners, may experience significant disruptions in their
ability to satisfy their obligations with respect to us, or they may be unable to do so altogether.

• Many employers, including us, and governments continue to require all or a significant portion of employees to work from home or not

go into their offices. While many of our employees can effectively perform their responsibilities while working remotely, some work is not
well-suited for remote work, and that work may not be completed as efficiently as if it were performed on site. Additionally, we may be
exposed to unexpected cybersecurity risks and additional information technology-related expenses as a result of these remote working
requirements.

•

Illness, travel restrictions or other workforce disruptions could adversely affect our supply chain, our ability to timely and satisfactorily
complete our clients’ projects, our ability to provide services to our clients or our other business processes. Even after the COVID-19
pandemic subsides, we could experience a longer-term impact on our operating expenses, including, for example, due to the need for
enhanced health and hygiene requirements or the periodic revival of social distancing or other measures in one or more regions in
attempts to counteract future outbreaks.

• We have furloughed certain employees and may need to further furlough or reduce the number of employees that we employ. We may

experience difficulties associated with hiring additional employees or replacing employees, in particular with respect to roles that require
security clearances or other special qualifications that may be limited or difficult to obtain. Increased turnover rates of our employees
could increase operating costs and create challenges for us in maintaining high levels of employee awareness of

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and compliance with our internal procedures and external regulatory compliance requirements, in addition to increasing our recruiting,
training and supervisory costs.

•

In addition to existing travel restrictions implemented in response to the COVID-19 pandemic, jurisdictions may continue to close
borders, impose prolonged quarantines and further restrict travel and business activity, which could materially impair our ability to
support our operations and clients (both domestic and international), to source supplies through the global supply chain and to identify,
pursue and capture new business opportunities, and which could continue to restrict the ability of our employees to access their
workplaces. We also face the possibility of increased overhead or other expenses resulting from compliance with any future government
orders or other measures enacted in response to the COVID-19 pandemic.

The COVID-19 pandemic has increased volatility and pricing in the capital markets, and that increased volatility is likely to continue.
While we entered into a new $1 billion term loan facility in the second quarter of fiscal 2020, we might not be able to access further
sources of liquidity on acceptable pricing or borrowing terms if at all. Our credit facilities contain customary covenants restricting, among
other things, our ability to incur certain liens and indebtedness. We are also subject to certain financial covenants, including
maintenance of a maximum consolidated leverage ratio. A breach of any covenant or our inability to comply with the required financial
ratios, whether as a result of the impact of the COVID-19 pandemic on our business or otherwise, could result in a default under one or
more of our credit facilities and limit our ability to do further borrowing. Any inability to obtain additional liquidity as and when needed, or
to maintain compliance with the instruments governing our indebtedness, could have a material adverse effect on our business,
financial condition and results of operations.

• We operate in many countries around the world, and certain of those countries’ governments may be unable to effectively mitigate the

financial or other impacts of the COVID-19 pandemic on their economies and workforces and our operations therein.

The continued global spread of the COVID-19 pandemic and the responses thereto are complex and rapidly evolving, and the extent to which the
pandemic impacts our business, financial condition and results of operations, including the duration and magnitude of such impacts, will depend on
numerous evolving factors that we may not be able to accurately predict or assess. COVID-19, and the volatile regional and global economic
conditions stemming from the pandemic, as well as reactions to future pandemics or resurgences of COVID-19, could also precipitate or aggravate
the other risk factors that we identify in in this Annual Report on Form 10-K, which in turn could materially adversely affect our business, financial
condition and results of operations. There may be other adverse consequences to our business, financial condition and results of operations from
the spread of COVID-19 that we have not considered or have not become apparent. As a result, we cannot assure you that if COVID-19 continues
to spread, it would not have a further adverse impact on our business, financial condition and results of operations.

Project sites are inherently dangerous workplaces. If we, the owner, or others working at the project site fail to maintain safe work sites,
and our employees or others become injured, disabled or even lose their lives, we can be exposed to significant financial losses and
reputational harm, as well as civil and criminal liabilities.

Project sites often put our employees and others in close proximity with large pieces of mechanized equipment, moving vehicles, chemical

and manufacturing processes and highly regulated materials, in a challenging environment and often in geographically remote locations. If we, or
others working at such sites, fail to implement such procedures or if the procedures we implement are ineffective, or if others working at the site fail
to implement and follow appropriate safety procedures, our employees and others may become injured, disabled or even lose their lives, the
completion or commencement of our projects may be delayed and we may be exposed to litigation or investigations. Unsafe work sites also have
the potential to increase employee turnover, increase the cost of a project to our clients and raise our operating and insurance costs. Any of the
foregoing could result in financial losses or reputational harm, which could have a material adverse impact on our business, financial condition and
results of operations.

In addition, our projects can involve the handling of hazardous and other highly regulated materials, which, if improperly handled or

disposed of, could subject us to civil and/or criminal liabilities. We are also subject to regulations dealing with occupational health and safety.
Although we maintain functional groups whose primary purpose is to ensure we implement effective health, safety and environmental (“HSE”) work
procedures throughout our organization, including project sites and maintenance sites, the failure to comply with such regulations could subject

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us to liability. In addition, despite the work of our functional groups, we cannot guarantee the safety of our personnel or that there will be no damage
to or loss of our work, equipment or supplies.

Our safety record is critical to our reputation. Many of our clients require that we meet certain safety criteria to be eligible to bid for contracts

and many contracts provide for automatic termination or forfeiture of some or all of our contract fees or profit in the event we fail to meet certain
measures. Accordingly, if we fail to maintain adequate safety standards, we could suffer reduced profitability or the loss of projects or clients, which
could have a material adverse impact on our business, financial condition and results of operations.

Our results of operations depend on the award of new contracts and the timing of the performance of these contracts.

Our revenues are derived from new contract awards. Delays in the timing of the awards or cancellations of such projects as a result of

economic conditions, material and equipment pricing and availability or other factors could impact our long-term projected results. It is particularly
difficult to predict whether or when we will receive large-scale projects as these contracts frequently involve a lengthy and complex bidding and
selection process, which is affected by a number of factors, such as market conditions or governmental and environmental approvals. Since a
significant portion of our revenues is generated from such projects, our results of operations and cash flows can fluctuate significantly from quarter
to quarter depending on the timing of our contract awards and the commencement or progress of work under awarded contracts. Furthermore, many
of these contracts are subject to financing contingencies and, as a result, we are subject to the risk that the customer will not be able to secure the
necessary financing for the project.

In addition, many of our contracts require us to satisfy specific progress or performance milestones in order to receive payment from the

customer. As a result, we may incur significant costs for engineering, materials, components, equipment, labor or subcontractors prior to receipt of
payment from a customer.

The uncertainty of our contract award timing can also present difficulties in matching workforce size with contract needs. In some cases, we

maintain and bear the cost of a ready workforce that is larger than necessary under existing contracts in anticipation of future workforce needs for
expected contract awards. If an expected contract award is delayed or not received, we may incur additional costs resulting from reductions in staff
or redundancy of facilities, which could have a material adverse effect on our business, financial condition and results of operations.

We engage in a highly competitive business. If we are unable to compete effectively, we could lose market share and our business and
results of operations could be negatively impacted.

We face intense competition to provide technical, professional and construction management services to clients. The markets we serve are

highly competitive and we compete against a large number of regional, national and multinational companies. The extent and type of our
competition varies by industry, geographic area and project type.

Our projects are frequently awarded through a competitive bidding process, which is standard in our industry. We are constantly competing

for project awards based on pricing, schedule and the breadth and technical sophistication of our services. Competition can place downward
pressure on our contract prices and profit margins, which may force us to accept contractual terms and conditions that are less favorable to us,
thereby increasing the risk that, among other things, we may not realize profit margins at the same rates as we have seen in the past or may
become responsible for costs or other liabilities we have not accepted in the past. If we are unable to compete effectively, we may experience a loss
of market share or reduced profitability or both, which if significant, could have a material adverse impact on our business, financial condition and
results of operations.

The nature of our contracts, particularly those that are fixed-price, subjects us to risks of cost overruns. We may experience reduced
profits or, in some cases, losses if costs increase above budgets or estimates or if the project experiences schedule delays.

For fiscal 2020, approximately 24% of our revenues were earned under fixed-price contracts. Both fixed-price and many cost reimbursable
contracts require us to estimate the total cost of the project in advance of our performance. For fixed-price contracts, we may benefit from any cost-
savings, but we bear greater risk of paying some, if not all, of any cost overruns. Fixed-price contracts are established in part on partial or
incomplete designs, cost and scheduling estimates that are based on a number of assumptions, including those about future economic conditions,
commodity and other materials pricing and availability of labor, equipment and materials and other exigencies. If the

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design or the estimates prove inaccurate or if circumstances change due to, among other things, unanticipated technical problems, difficulties in
obtaining permits or approvals, changes in local laws or labor conditions, weather or other delays beyond our control, changes in the costs of
equipment or raw materials, our vendors’ or subcontractors’ inability or failure to perform, or changes in general economic conditions, then cost
overruns may occur and we could experience reduced profits or, in some cases, a loss for that project. These risks are exacerbated for projects with
long-term durations because there is an increased risk that the circumstances on which we based our original estimates will change in a manner
that increases costs. If the project is significant, or there are one or more issues that impact multiple projects, costs overruns could have a material
adverse impact on our business, financial condition and results of operations.

Our contracts that are fundamentally cost reimbursable in nature may also present a risk to the extent the final cost on a project exceeds the

amount the customer expected or budgeted. Like fixed-price contracts, the expected cost of cost-reimbursable projects are based in part on partial
design and our estimates of the resources and time necessary to perform such contracts. A portion of the fee is often linked to these estimates and
the related final cost and schedule objectives, and if for whatever reason these objectives are not met, the project may be less profitable than we
expect or even result in losses.

The loss of or a significant reduction in business from one or a few customers could have a material adverse impact on us.

A few clients have in the past and may in the future account for a significant portion of our revenue and/or backlog in any one year or over a

period of several consecutive years. For example, in fiscal 2020, 2019 and 2018, approximately 33%, 27% and 32%, respectively, of our revenue
was earned directly or indirectly from agencies of the U.S. federal government. Although we have long-standing relationships with many of our
significant clients, our clients may unilaterally reduce, delay or cancel their contracts at any time. Our loss of or a significant reduction in business
from a significant client could have a material adverse impact on our business, financial condition, and results of operations.

The contracts in our backlog may be adjusted, canceled or suspended by our clients and, therefore, our backlog is not necessarily
indicative of our future revenues or earnings. Additionally, even if fully performed, our backlog is not a good indicator of our future gross
margins.

Backlog represents the total dollar amount of revenues we expect to record in the future as a result of performing work under contracts that

have been awarded to us. As of the end of fiscal 2020, our backlog totaled approximately $23.8 billion. There is no assurance that backlog will
actually be realized as revenues in the amounts reported or, if realized, will result in profits. In accordance with industry practice, substantially all of
our contracts are subject to cancellation, termination, or suspension at the discretion of the client, including our U.S. government work. In the event
of a project cancellation, we would generally have no contractual right to the total revenue reflected in our backlog. Projects can remain in backlog
for extended periods of time because of the nature of the project and the timing of the particular services required by the project. The risk of
contracts in backlog being canceled or suspended generally increases during periods of widespread economic slowdowns or in response to
changes in commodity prices.

The contracts in our backlog are subject to changes in the scope of services to be provided as well as adjustments to the costs relating to

the contracts. The revenue for certain contracts included in backlog is based on estimates. Additionally, the way we perform on our individual
contracts can affect greatly our gross margins and hence, future profitability.

In some markets, there is a continuing trend towards cost-reimbursable contracts with incentive-fee arrangements. Typically, our incentive
fees are based on such things as achievement of target completion dates or target costs, overall safety performance, overall client satisfaction and
other performance criteria. If we fail to meet such targets or achieve the expected performance standards, we may receive a lower, or even zero,
incentive fee resulting in lower gross margins. Accordingly, there is no assurance that the contracts in backlog, assuming they produce the revenues
currently expected, will generate gross margins at the rates we have realized in the past.

Contracts with the U.S. federal government and other governments and their agencies pose additional risks relating to future funding and
compliance.

Contracts with the U.S. federal government and other governments and their agencies, which are a significant source of our revenue and

profit, are subject to various uncertainties, restrictions, and regulations including oversight

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audits by various government authorities as well as profit and cost controls, which could result in withholding or delay of payments to us.
Government contracts are also exposed to uncertainties associated with funding such as sequestration and budget deficits. Contracts with the U.S.
federal government, for example, are subject to the uncertainties of Congressional funding. U.S. government shutdowns or any related under-
staffing of the government departments or agencies that interact with our business could result in program cancellations, disruptions and/or stop
work orders, could limit the government’s ability to effectively progress programs and make timely payments, and could limit our ability to perform on
our existing U.S. government contracts and successfully compete for new work. Governments are typically under no obligation to maintain funding
at any specific level, and funds for government programs may even be eliminated. Legislatures typically appropriate funds on a year-by-year basis,
while contract performance may take more than one year. As a result, contracts with government agencies may be only partially funded or may be
terminated, and we may not realize all of the potential revenue and profit from those contracts.

Our government clients may reduce the scope of or terminate our contracts for convenience or decide not to renew our contracts with little

or no prior notice. Since government contracts represent a significant percentage of our revenues (for example, those with the U.S. federal
government represented approximately 33% of our total revenue in fiscal 2020), a significant reduction in government funding or the loss of such
contracts could have a material adverse impact on our business, financial condition, and results of operations.

Most government contracts are awarded through a rigorous competitive process. The U.S. federal government has increasingly relied upon

multiple-year contracts with multiple contractors that generally require those contractors to engage in an additional competitive bidding process for
each task order issued under a contract. This process may result in us facing significant additional pricing pressure and uncertainty and incurring
additional costs. Moreover, we may not be awarded government contracts because of existing policies designed to protect small businesses and
under-represented minorities. Our inability to win new contracts or be awarded work under existing contracts could have a material adverse impact
on our business, financial condition and results of operations.

In addition, government contracts are subject to specific procurement regulations and a variety of other socio-economic requirements, which

affect how we transact business with our clients and, in some instances, impose additional costs on our business operations. For example, for
contracts with the U.S. federal government, we must comply with the Federal Acquisition Regulation, the Truth in Negotiations Act, the Cost
Accounting Standards, and numerous regulations governing environmental protection and employment practices. Government contracts also
contain terms that expose us to heightened levels of risk and potential liability than non-government contracts. This includes, for example, unlimited
indemnification obligations.

We also are subject to government audits, investigations, and proceedings. For example, government agencies such as the U.S. Defense

Contract Audit Agency routinely review and audit us to determine the adequacy of and our compliance with our internal control systems and policies
and whether allowable costs are in accordance with applicable regulations. These audits can result in a determination that a rule or regulation has
been violated or that adjustments are necessary to the amount of contract costs we believe are reimbursable by the agencies and the amount of our
overhead costs allocated to the agencies.

If we violate a rule or regulation, fail to comply with a contractual or other requirement or do not satisfy an audit, a variety of penalties can be
imposed on us including monetary damages and criminal and civil penalties. For example, in so-called “qui tam” actions brought by individuals or the
government under the U.S. Federal False Claims Act or under similar state and local laws, treble damages can be awarded. In addition, any or all of
our government contracts could be terminated, we could be suspended or debarred from all government contract work, or payment of our costs
could be disallowed. The occurrence of any of these actions could have a material adverse impact on our business, financial condition and results of
operations.

Many of our federal government contracts require us to have security clearances, which can be difficult and time consuming to obtain. If our

employees or our facilities are unable to obtain or retain the necessary security clearances, our clients could terminate or not renew existing
contracts or award us new contracts, which could have a material adverse impact on our business, financial condition and results of operations
could be negatively impacted.

Our project execution activities may result in liability for faulty services.

If we fail to provide our services in accordance with applicable professional standards or contractual requirements, we could be exposed to

significant monetary damages or even criminal violations. Our engineering practice, for example, involves professional judgments regarding the
planning, design, development, construction,

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operations and management of industrial facilities and public infrastructure projects. While we do not generally accept liability for consequential
damages in our contracts, and although we have adopted a range of insurance, risk management and risk avoidance programs designed to reduce
potential liabilities, a catastrophic event at one of our project sites or completed projects resulting from the services we have performed could result
in significant professional or product liability and warranty or other claims against us as well as reputational harm, especially if public safety is
impacted. These liabilities could exceed our insurance limits or the fees we generate, may not be covered by insurance at all due to various
exclusions in our coverage and could impact our ability to obtain insurance in the future. Further, even where coverage applies, the policies have
deductibles, which result in our assumption of exposure for certain amounts with respect to any claim filed against us. In addition, clients or
subcontractors who have agreed to indemnify us against any such liabilities or losses might refuse or be unable to pay us. An uninsured claim,
either in part or in whole, as well as any claim covered by insurance but subject to a high deductible, if successful and of a material magnitude, could
have a material adverse impact on our business, financial condition and results of operations.

The outcome of pending and future claims and litigation could have a material adverse impact on our business, financial condition, and
results of operations.

We are a party to claims and litigation in the normal course of business, including litigation inherited through acquisitions. Since we engage

in engineering and construction activities for large facilities and projects where design, construction or systems failures can result in substantial
injury or damage to employees or others, we are exposed to substantial claims and litigation and investigations if there is a failure at any such facility
or project. Such claims could relate to, among other things, personal injury, loss of life, business interruption, property damage, pollution and
environmental damage and be brought by our clients or third parties, such as those who use or reside near our clients’ projects. We can also be
exposed to claims if we agreed that a project will achieve certain performance standards or satisfy certain technical requirements and those
standards or requirements are not met. In many of our contracts with clients, subcontractors and vendors, we agree to retain or assume potential
liabilities for damages, penalties, losses and other exposures relating to projects that could result in claims that greatly exceed the anticipated profits
relating to those contracts. In addition, while clients and subcontractors may agree to indemnify us against certain liabilities, such third parties may
refuse or be unable to pay us.

With a workforce of approximately 55,000 people globally, we are also party to labor and employment claims in the normal course of business.
Such claims could relate to allegations of harassment and discrimination, pay equity, denial of benefits, wage and hour violations, whistleblower
protections, concerted protected activity, and other employment protections, and may be pursued on an individual or class action basis depending
on applicable laws and regulations. Some of such claims may be insurable, while other such claims may not.

We maintain insurance coverage for various aspects of our business and operations. Our insurance programs have varying coverage limits
as well as exclusions for matters such as fraud, and insurance companies may attempt to deny claims for which we seek coverage. In addition, we
have elected to retain a portion of losses that may occur through the use of various deductibles, retentions and limits under these programs. As a
result, we may be subject to future liability for which we are only partially insured, or completely uninsured.

Although in the past we have been generally able to cover our insurance needs, there can be no assurances that we can secure all
necessary or appropriate insurance in the future, or that such insurance can be economically secured. For example, catastrophic events can result
in decreased coverage limits, coverage that is more limited, or increased premium costs or higher deductibles. We monitor the financial health of the
insurance companies from which we procure insurance, which is one of the factors we take into account when purchasing insurance. Our insurance
is purchased from a number of the world's leading providers, often in layered insurance or quota share arrangements. If any of our third party
insurers fail, abruptly cancel our coverage or otherwise cannot satisfy their insurance requirements to us, then our overall risk exposure and
operational expenses could be increased and our business operations could be interrupted.

In addition, the nature of our business sometimes results in clients, subcontractors and vendors presenting claims to us for, among other

things, recovery of costs related to certain projects. Similarly, we occasionally present change orders and claims to our clients, subcontractors and
vendors for, among other things, additional costs exceeding the original contract price. If we fail to document properly the nature of our claims and
change orders or are otherwise unsuccessful in negotiating reasonable settlements with our clients, subcontractors and vendors, we could incur cost
overruns, reduced profits or, in some cases, a loss for a project. Further, these claims can be the subject of lengthy negotiations, arbitration or
litigation proceedings, which could result in the investment of significant amounts

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of working capital pending the resolution of the relevant change orders and claims. A failure to promptly recover on these types of claims could have
a material adverse impact on our liquidity and financial results. Additionally, irrespective of how well we document the nature of our claims and
change orders, the cost to prosecute and defend claims and change orders can be significant.

Litigation and regulatory proceedings are subject to inherent uncertainties and unfavorable rulings can and do occur. Pending or future

claims against us could result in professional liability, product liability, criminal liability, warranty obligations, default under our credit agreements and
other liabilities which, to the extent we are not insured against a loss or our insurer fails to provide coverage, could have a material adverse impact
on our business, financial condition, and results of operations.

Our use of joint ventures and partnerships exposes us to risks and uncertainties, many of which are outside of our control.

As is common in our industry, we perform certain contracts as a member of joint ventures, partnerships, and similar arrangements. This

situation exposes us to a number of risks, including the risk that our partners may be unable to fulfill their obligations to us or our clients.

Further, we have limited ability to control the actions of our joint venture partners, including with respect to nonperformance, default,

bankruptcy or legal or regulatory compliance. Our partners may be unable or unwilling to provide the required levels of financial support to the
partnerships. If these circumstances occur, we may be liable for claims and losses attributable to the partner by operation of law or contract. These
circumstances could also lead to disputes and litigation with our partners or clients, all of which could have a material adverse impact on our
reputation, business, financial condition and results of operations.

We depend on the management effectiveness of our joint venture partners. Differences in views among the joint venture participants may
result in delayed decisions or in failures to agree on major issues, which could materially affect the business and operations of these ventures. In
addition, in many of the countries in which we engage in joint ventures, it may be difficult to enforce our contractual rights under the applicable joint
venture agreement. If we are not able to enforce our contractual rights, we may not be able to realize the benefits of the joint venture or we may be
subject to additional liabilities.

We participate in joint ventures and similar arrangements in which we are not the controlling partner. In these cases, we have limited control

over the actions of the joint venture. These joint ventures may not be subject to the same requirements regarding internal controls and internal
control over financial reporting that we follow. To the extent the controlling partner makes decisions that negatively impact the joint venture or
internal control problems arise within the joint venture, it could have a material adverse impact on our business, financial condition and results of
operations.

The failure by a joint venture partner to comply with applicable laws, regulations or client requirements could negatively impact our business

and, for government clients, could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material
adverse impact on our business, financial condition and results of operations.

We are dependent on third parties to complete many of our contracts.

Third-party subcontractors we hire perform a significant amount of the work performed under our contracts. We also rely on third-party

equipment manufacturers or suppliers to provide much of the equipment and materials used for projects. If we are unable to hire qualified
subcontractors or find qualified equipment manufacturers or suppliers, our ability to successfully complete a project could be impaired. If we are not
able to locate qualified third-party subcontractors or the amount we are required to pay for subcontractors or equipment and supplies exceeds what
we have estimated, especially in a lump sum or a fixed-price contract, we may suffer losses on these contracts. If a subcontractor, supplier, or
manufacturer fails to provide services, supplies or equipment as required under a contract for any reason, we may be required to source these
services, equipment or supplies to other third parties on a delayed basis or on less favorable terms, which could impact contract profitability. There
is a risk that we may have disputes with our subcontractors relating to, among other things, the quality and timeliness of work performed, customer
concerns about the subcontractor, or our failure to extend existing task orders or issue new task orders under a contract. In addition, faulty
workmanship, equipment or materials could impact the overall project, resulting in claims against us for failure to meet required project
specifications.

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In an uncertain or downturn economic environment, third parties may find it difficult to obtain sufficient financing to help fund their

operations. The inability to obtain financing could adversely affect a third party’s ability to provide materials, equipment or services which could have
a material adverse impact on our business, financial condition, and results of operations. In addition, a failure by a third party subcontractor, supplier
or manufacturer to comply with applicable laws, regulations or client requirements could negatively impact our business and, for government clients,
could result in fines, penalties, suspension or even debarment being imposed on us, which could have a material adverse impact on our business,
financial condition, and results of operations.

Employee, agent or partner misconduct or our overall failure to comply with laws or regulations could weaken our ability to win contracts,
which could result in reduced revenues and profits.

Misconduct, fraud, non-compliance with applicable laws and regulations, or other improper activities by one of our employees, agents or

partners could have a significant negative impact on our business and reputation. Such misconduct could include the failure to comply with
government procurement regulations, regulations regarding the protection of classified information, regulations prohibiting bribery and other corrupt
practices, regulations regarding the pricing of labor and other costs in government contracts, regulations on lobbying or similar activities, regulations
pertaining to the internal controls over financial reporting, regulations pertaining to export control, environmental laws, employee wages, pay and
benefits, and any other applicable laws or regulations. For example, we routinely provide services that may be highly sensitive or that relate to
critical national security matters; if a security breach were to occur, our ability to procure future government contracts could be severely limited. The
precautions we take to prevent and detect these activities may not be effective and we could face unknown risks or losses. Our failure to comply
with applicable laws or regulations, or acts of misconduct, could subject us to fines and penalties, cancellation of contracts, loss of security
clearance and suspension or debarment from contracting, which could weaken our ability to win contracts and result in reduced revenues and profits
and could have a material adverse impact on our business, financial condition and results of operations.

Our international operations are exposed to additional risks and uncertainties, including unfavorable political developments and weak
foreign economies.

For fiscal 2020, approximately 25% of our revenue was earned from clients outside the U.S. Our business is dependent on the continued

success of our international operations, and we expect our international operations to continue to account for a significant portion of our total
revenues. Our international operations are subject to a variety of risks, including:

•

Recessions and other economic crises in other regions, such as Europe, or specific foreign economies and the impact on our costs of
doing business in those countries;

Difficulties in staffing and managing foreign operations, including logistical and communication challenges;

Unexpected changes in foreign government policies and regulatory requirements;

Potential non-compliance with a wide variety of laws and regulations, including anti-corruption, export control and anti-boycott laws and
similar non-U.S. laws and regulations;

Potential non-compliance with regulations and evolving industry standards regarding consumer protection and data use and security,
including the General Data Protection Regulation approved by the European Union;

Lack of developed legal systems to enforce contractual rights;

Expropriation and nationalization of our assets in a foreign country;

Renegotiation or nullification of our existing contracts;

The adoption of new, and the expansion of existing, trade or other restrictions;

Embargoes, duties, tariffs or other trade restrictions, including sanctions;

Changes in labor conditions;

Acts of war, civil unrest, force majeure, and terrorism;

The ability to finance efficiently our foreign operations;

Social, political, and economic instability;

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•

Changes to tax policy;

Currency exchange rate fluctuations;

Limitations on the ability to repatriate foreign earnings; and

U.S. government policy changes in relation to the foreign countries in which we operate.

The lack of a well-developed legal system in some of these countries may make it difficult to enforce our contractual rights. In addition,

military action, geopolitical shifts or continued unrest, particularly in the Middle East, could impact the supply or pricing of oil, disrupt our operations
in the region and elsewhere and increase our security costs. To the extent our international operations are affected by unexpected or adverse
economic, political and other conditions, our business, financial condition and results of operations may be adversely affected.

We work in international locations where there are high security risks, which could result in harm to our employees or unanticipated cost.

Some of our services are performed in high-risk locations, where the country or location is subject to political, social or economic risks, or

war, terrorism or civil unrest. In those locations where we have employees or operations, we may expend significant efforts and incur substantial
security costs to maintain the safety of our personnel. Despite these activities, in these locations, we cannot guarantee the safety of our personnel
and we may suffer future losses of employees and subcontractors. Acts of terrorism and threats of armed conflicts in or around various areas in
which we operate could limit or disrupt markets and our operations, including disruptions resulting from the evacuation of personnel, cancellation of
contracts, or the loss of key employees, contractors or assets.

Cyber security or privacy breaches, or systems and information technology interruption or failure could adversely impact our ability to
operate or expose us to significant financial losses and reputational harm.

We rely heavily on computer, information and communications technology and related systems in order to properly operate our business.

From time to time, we experience occasional system interruptions and delays. In the event we are unable to regularly deploy software and
hardware, effectively upgrade our systems and network infrastructure and take other steps to maintain or improve the efficiency and efficacy of our
systems, the operation of such systems could be interrupted or result in the loss, corruption, or release of data. In addition, our computer and
communication systems and operations could be damaged or interrupted by natural disasters, force majeure events, telecommunications failures,
power loss, acts of war or terrorism, computer viruses, malicious code, physical or electronic security breaches, intentional or inadvertent user
misuse or error or similar events or disruptions. Any of these or other events could cause interruptions, delays, loss of critical and/or sensitive data
or similar effects, which could have a material adverse impact on our business, financial condition, protection of intellectual property and results of
operations, as well as those of our clients.

In addition, we face the threat to our computer systems of unauthorized access, computer hackers, computer viruses, malicious code,

ransomware, phishing, organized cyber-attacks and other security problems and system disruptions, including possible unauthorized access to and
disclosure of our and our clients’ proprietary or classified information. In addition, such tactics may also seek to cause payments due to or from the
Company to be misdirected to fraudulent accounts, which may not be recoverable by the Company.

While we have security measures and technology in place to protect our and our clients’ proprietary or classified information, if these

measures fail as a result of a cyber-attack, other third-party action, employee error, malfeasance or otherwise, and someone obtains unauthorized
access to our or our clients’ information, our reputation could be damaged, our business may suffer and we could incur significant liability. Because
the techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched
against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. As a result, we may be
required to expend significant resources to protect against the threat of system disruptions and security breaches or to alleviate problems caused by
these disruptions and breaches. Any of these events could damage our reputation and have a material adverse effect on our business, financial
condition and results of operations.

In addition, new laws and regulations governing data privacy and the unauthorized disclosure of confidential information, including the

European Union General Data Protection Regulation and the California Consumer Privacy

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Act, pose increasingly complex compliance challenges and potentially elevate costs, and any failure to comply with these laws and regulations could
result in significant penalties and legal liability.

We continuously evaluate the need to upgrade and/or replace our systems and network infrastructure to protect our computing environment,

to stay current on vendor supported products and to improve the efficiency of our systems and for other business reasons. The implementation of
new systems and information technology could adversely impact our operations by imposing substantial capital expenditures, demands on
management time and risks of delays or difficulties in transitioning to new systems. In addition, our systems implementations may not result in
productivity improvements at the levels anticipated. Systems implementation disruption and any other information technology disruption, if not
anticipated and appropriately mitigated, could have an adverse effect on our business.

We are subject to professional standards, duties and statutory obligations on professional reports and opinions we issue, which could
subject us to monetary damages.

We issue reports and opinions to clients based on our professional engineering expertise as well as our other professional credentials that
subject us to professional standards, duties and obligations regulating the performance of our services. For example, we issue opinions and reports
to government clients in connection with securities offerings. If a client or another third party alleges that our report or opinion is incorrect or it is
improperly relied upon and we are held responsible, we could be subject to significant monetary damages. In addition, our reports and other work
product may need to comply with professional standards, licensing requirements, securities regulations and other laws and rules governing the
performance of professional services in the jurisdiction where the services are performed. We could be liable to third parties who use or rely upon
our reports and other work product even if we are not contractually bound to those third parties. These events could in turn result in monetary
damages and penalties.

We may not be able to protect our intellectual property or that of our clients.

Our technology and intellectual property provide us, in certain instances, with a competitive advantage. Although we protect our property
through registration, licensing, contractual arrangements, security controls and similar mechanisms, we may not be able to successfully preserve
our rights and they could be invalidated, circumvented, challenged or become obsolete. Trade secrets are generally difficult to protect. Our
employees and contractors are subject to confidentiality obligations, but this protection may be inadequate to deter or prevent misappropriation of
our confidential information and/or infringement of our intellectual property. In addition, the laws of some foreign countries in which we operate do
not protect intellectual property rights to the same extent as the U.S. If we are unable to protect and maintain our intellectual property rights or if
there are any successful intellectual property challenges or infringement proceedings against us, our ability to differentiate our service offerings
could be reduced. Litigation to determine the scope of intellectual property rights, even if ultimately successful, could be costly and could divert
leadership’s attention away from other aspects of our business.

We also hold licenses from third parties which may be utilized in our business operations. If we are no longer able to license such

technology on commercially reasonable terms or otherwise, our business and financial performance could be adversely affected.

If our intellectual property rights or work processes become obsolete, we may not be able to differentiate our service offerings and some of

our competitors may be able to offer more attractive services to our customers. Our competitors may independently attempt to develop or obtain
access to technologies that are similar or superior to our technologies.

Our clients or other third parties may also provide us with their technology and intellectual property. There is a risk we may not sufficiently
protect our or their information from improper use or dissemination and, as a result, could be subject to claims and litigation and resulting liabilities,
loss of contracts or other consequences that could have a material adverse impact on our business, financial condition and results of operations.

If we do not have adequate indemnification for our nuclear services, it could adversely affect our business, financial condition and results
of operations.

The Price-Anderson Nuclear Industries Indemnity Act, commonly called the Price-Anderson Act (“PAA”), is a U.S. federal law, which, among

other things, regulates radioactive materials and the nuclear energy industry, including liability and compensation in the event of nuclear related
incidents. The PAA provides certain protections and indemnification to nuclear energy plant operators and U.S. Department of Energy (“DOE”)
contractors. The PAA

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protections and indemnification apply to us as part of our services to the U.S. nuclear energy industry and DOE for new facilities, maintenance,
modification, decontamination and decommissioning of nuclear energy, weapons and research facilities.

We offer similar services in other jurisdictions outside the U.S. For those jurisdictions, varying levels of nuclear liability protection is provided

by international treaties, and/or domestic laws, such as the Nuclear Liability and Compensation Act of Canada and the Nuclear Installations Act of
the United Kingdom, insurance and/or assets of the nuclear installation operators (some of which are backed by governments) as well as under
appropriate enforceable contractual indemnifications and hold-harmless provisions. These protections and indemnifications, however, may not cover
all of our liability that could arise in the performance of these services. To the extent the PAA or other protections and indemnifications do not apply
to our services, the cost of losses associated with liability not covered by the available protections and indemnifications, or by virtue of our loss of
business because of these added costs could have a material adverse impact on our business, financial condition and results of operations.

Our actual results could differ from the estimates and assumptions used to prepare our financial statements.

In preparing our financial statements, our leadership is required under U.S. GAAP to make estimates and assumptions as of the date of the

financial statements. These estimates and assumptions affect the reported values of assets, liabilities, revenue and expenses and disclosure of
contingent assets and liabilities. Areas requiring significant estimates by our leadership include:

•

Recognition of contract revenue, costs, profit or losses in applying the principles of percentage of completion accounting;

Estimated amounts for expected project losses, warranty costs, contract close-out or other costs;

Recognition of recoveries under contract change orders or claims;

Collectability of billed and unbilled accounts receivable and the need and amount of any allowance for doubtful accounts;

Estimates of other liabilities, including litigation and insurance revenues/reserves and reserves necessary for self-insured risks;

Accruals for estimated liabilities, including litigation reserves;

Valuation of assets acquired, and liabilities, goodwill, and intangible assets assumed, in acquisitions and ongoing assessment of
impairment;

Valuation of stock-based compensation;

The determination of liabilities under pension and other post-retirement benefit programs;

Income tax provisions and related valuation allowances; and

Valuation of investment in Worley stock.

Our actual business and financial results could differ from our estimates of such results, which could have a material adverse impact on our

financial condition and results of operations.

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An impairment charge on our goodwill or intangible assets could have a material adverse impact on our financial position and results of
operations.

Because we have grown in part through acquisitions, goodwill and intangible assets represent a substantial portion of our assets. Under

U.S. GAAP, we are required to test goodwill carried in our Consolidated Balance Sheets for possible impairment on an annual basis based upon a
fair value approach. We also assess the recoverability of the unamortized balance of our intangible assets when indications of impairment are
present based on expected future probability and undiscounted expected cash flows and their contribution to our overall operations. As of October 2,
2020, we had $5.64 billion of goodwill, representing 45.6% of our total assets of $12.35 billion. We have chosen to perform our annual impairment
reviews of goodwill at the beginning of the fourth quarter of our fiscal year. We also are required to test goodwill for impairment between annual tests
if events occur or circumstances change that would more likely than not reduce our enterprise fair value below its book value. These events or
circumstances could include a significant change in the business climate, including a significant sustained decline in a reporting unit’s market value,
legal factors, operating performance indicators, competition, sale or disposition of a significant portion of our business, potential government actions
toward our facilities and other factors.

If our market capitalization drops significantly below the amount of net equity recorded on our balance sheet, it might indicate a decline in

our fair value and would require us to further evaluate whether our goodwill has been impaired. If the fair value of our reporting units is less than
their carrying value, we could be required to record an impairment charge. The amount of any impairment could be significant and could have a
material adverse impact on our financial position and results of operations for the period in which the charge is taken. For a further discussion of
goodwill impairment testing, please see Item 7- Management’s Discussion and Analysis of Financial Condition and Results of Operations below.

Impairment of long-lived assets or restructuring activities may require us to record a significant charge to earnings.

Our long-lived assets, including our lease right-of-use assets, equity investments and other, are subject to periodic testing for impairment.
Failure to achieve sufficient levels of cash flow at the asset group level could result in impairment of our long-lived assets. Further changes in the
business environment could lead to changes in the scope of operations of our business. These changes, including the closure of one or more
offices, could result in restructuring and/or asset impairment charges. The COVID-19 pandemic raises the possibility of an extended global
economic downturn which increase the risk of long-lived asset impairment charges.

We may be required to contribute additional cash to meet any underfunded benefit obligations associated with retirement and post-
retirement benefit plans we manage.

We have various employee benefit plan obligations that require us to make contributions to satisfy, over time, our underfunded benefit

obligations, which are generally determined by calculating the projected benefit obligations minus the fair value of plan assets. For example, as of
October 2, 2020 and September 27, 2019, our defined benefit pension and post-retirement benefit plans were underfunded by $400.4 million and
$399.8 million, respectively. See Note 13- Pension and Other Postretirement Benefit Plans in the Notes to Consolidated Financial Statements
beginning on page F-1 of this Annual Report on Form 10-K for additional disclosure. In the future, our benefit plan obligations may increase or
decrease depending on changes in the levels of interest rates, pension plan asset performance and other factors. If we are required to contribute a
significant amount of the deficit for underfunded benefit plans, our cash flows could be materially and adversely affected.

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Negotiations with labor unions and possible work actions could disrupt operations and increase labor costs and operating expenses.

A certain portion of our work force has entered, or may in the future enter, into collective bargaining agreements, which on occasion may

require renegotiation. The outcome of future negotiations relating to union representation or collective bargaining agreements may not be favorable
to the Company in that they may increase our operating expenses and lower our net income as a result of higher wages or benefit expenses. In
addition, negotiations with unions could divert management attention and disrupt operations, which may adversely affect our results of operations. If
we are unable to negotiate acceptable collective bargaining agreements, we may have to address the threat of union-initiated work actions,
including strikes. Depending on the nature of the threat or the type and duration of any work action, these actions could have a material adverse
impact on our business, financial condition and results of operations.

Demand for our services is cyclical as the sectors and industries in which our clients operate are impacted by economic downturns,
reductions in government or private spending and times of political uncertainty.

We provide full spectrum technical and professional solutions to clients operating in a number of sectors and industries, including programs for
various national governments, including the U.S. federal government; aerospace; automotive; pharmaceuticals and biotechnology; infrastructure;
environmental and nuclear; buildings; smart cities; power; water; transportation; telecom and other general industrial and consumer businesses and
sectors. These sectors and industries and the resulting demand for our services have been, and we expect will continue to be, cyclical and subject
to significant fluctuations due to a variety of factors beyond our control, including economic conditions and changes in client spending, particularly
during periods of economic or political uncertainty.

Uncertain global economic and political conditions may negatively impact our clients’ ability and willingness to fund their projects, including their
ability to raise capital and pay, or timely pay, our invoices. They may also cause our clients to reduce their capital expenditures, alter the mix of
services purchased, seek more favorable price and other contract terms and otherwise slow their spending on our services. For example, in the
public sector, declines in state and local tax revenues as well as other economic declines may result in lower state and local government spending.
In addition, under such conditions, many of our competitors may be more inclined to take greater or unusual risks or accept terms and conditions in
contracts that we might not deem acceptable. These conditions may reduce the demand for our services, which may have a material adverse impact
on our business, financial condition and results of operations.

Additionally, uncertain economic and political conditions may make it difficult for our clients, our vendors, and us to accurately forecast and plan
future business activities. For example, recent changes to U.S. policies related to global trade and tariffs have resulted in uncertainty surrounding
the future of the global economy as well as retaliatory trade measures implemented by other countries. The increasing cost of steel and aluminum
may impact client spending. We cannot predict the outcome of these changing trade policies or other unanticipated political conditions, nor can we
predict the timing, strength or duration of any economic recovery or downturn worldwide or in our clients’ markets. In addition, our business has
traditionally lagged recoveries in the general economy and, therefore, may not recover as quickly as the economy at large. Weak economic
conditions, a failure to obtain expected benefits from any increased infrastructure spending, or a reduction in government spending could have a
material adverse impact on our business, financial condition and results of operations. Furthermore, if a significant portion of our clients or projects
are concentrated in a specific geographic area or industry, our business may be disproportionately affected by negative trends or economic
downturns in those specific geographic areas or industries.

Regardless of economic or market conditions, investment decisions by our customers may vary by location or as a result of other factors

like the availability of labor or relative construction cost. Because we are dependent on the timing and funding of new awards, we are therefore
vulnerable to changes in our clients’ markets and investment decisions. As a result, our past results have varied and may continue to vary
depending upon the demand for future projects in the markets and the locations in which we operate.

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Our operations may be impacted by the United Kingdom’s exit from the European Union.

In June 2016, the U.K. held a referendum in which voters approved an exit from the E.U., commonly referred to as “Brexit.” The U.K.
formally exited the E.U. on January 30, 2020, pursuant to a withdrawal agreement between the U.K. government and the E.U. The withdrawal
agreement provides for a transition period from February through December 2020 to allow time for a future trade deal to be agreed upon. As a result
of the U.K.’s exit from the E.U., there may be greater restrictions on imports and exports between the U.K. and E.U. countries and increased
regulatory complexities. These changes may adversely affect our relationships with our existing and future customers, suppliers, employees, and
subcontractors, or otherwise have an adverse effect on our business, financial condition and results of operations. The ongoing negotiations
between the U.K. and the E.U. as to the terms upon which the U.K. will exit from the E.U. and the uncertainty as to their future trade agreement
continues to create economic uncertainty, which may cause our customers to closely monitor their costs, terminate or reduce the scope of existing
contracts, decrease or postpone currently planned contracts, or negotiate for more favorable deal terms, each of which may have a negative impact
on our business, financial condition and results of operations.

Rising inflation, interest rates, and/or construction costs could reduce the demand for our services as well as decrease our profit on our
existing contracts, in particular with respect to our fixed-price contracts.

Rising inflation, interest rates, or construction costs could reduce the demand for our services. In addition, we bear all of the risk of rising
inflation with respect to those contracts that are fixed-price. Because a significant portion of our revenues are earned from cost-reimbursable type
contracts (approximately 76% during fiscal 2020), the effects of inflation on our financial condition and results of operations over the past few years
have been generally minor. However, if we expand our business into markets and geographic areas where fixed-price and lump-sum work is more
prevalent, inflation may have a larger impact on our results of operations in the future. Therefore, increases in inflation, interest rates or construction
costs could have a material adverse impact on our business, financial condition and results of operations.

Foreign exchange risks may affect our ability to realize a profit from certain projects.

Our reported financial condition and results of operations are exposed to the effects (both positive and negative) that fluctuating exchange

rates have on the process of translating the financial statements of our international operations, which are denominated in currencies other than the
U.S. dollar, into the U.S. dollar. While we generally attempt to denominate our contracts in the currencies of our expenditures, we do enter into
contracts that expose us to currency risk, particularly to the extent contract revenue is denominated in a currency different than the contract costs.
We attempt to minimize our exposure from currency risks by obtaining escalation provisions for projects in inflationary economies or entering into
derivative (hedging) instruments, when there is currency risk exposure that is not naturally mitigated via our contracts. These actions, however, may
not always eliminate currency risk exposure. The governments of certain countries have or may in the future impose restrictive exchange controls on
local currencies and it may not be possible for us to engage in effective hedging transactions to mitigate the risks associated with fluctuations in a
particular currency. Based on fluctuations in currency, the U.S. dollar value of our backlog may from time to time increase or decrease significantly.
We may also be exposed to limitations on our ability to reinvest earnings from operations in one country to fund the financing requirements of our
operations in other countries.

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Our global presence could give rise to material fluctuations in our income tax rates.

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. Significant judgment is required in determining our worldwide

provision for income taxes. In the ordinary course of our business, there are many transactions and calculations where the ultimate tax
determination is uncertain. We are regularly under audit by tax authorities. Although we believe that our tax estimates and tax positions are
reasonable, they could be materially affected by many factors including the final outcome of tax audits and related litigation, the introduction of new
tax accounting standards, legislation, regulations and related interpretations, our global mix of earnings, the realizability of deferred tax assets and
changes in uncertain tax positions. An increase or decrease in our effective tax rate, or an ultimate determination that the Company owes more
taxes than the amounts previously accrued, could have a material adverse impact on our financial condition and results of operations.

Our businesses could be materially and adversely affected by events outside of our control.

Extraordinary or force majeure events beyond our control, such as natural or man-made disasters, could negatively impact our ability to

operate. As an example, from time to time we face unexpected severe weather conditions which may result in weather-related delays that are not
always reimbursable under a fixed-price contract; evacuation of personnel and curtailment of services; increased labor and material costs in areas
resulting from weather-related damage and subsequent increased demand for labor and materials for repairing and rebuilding; inability to deliver
materials, equipment and personnel to job sites in accordance with contract schedules; and loss of productivity. We may remain obligated to perform
our services after any such natural or man-made event, unless a force majeure clause or other contractual provision provides us with relief from our
contractual obligations. If we are not able to react quickly to such events, or if a high concentration of our projects are in a specific geographic region
that suffers from a natural or man-made catastrophe, our operations may be significantly affected, which could have a material adverse impact on
our operations. In addition, if we cannot complete our contracts on time, we may be subject to potential liability claims by our clients which may
reduce our profits.

Climate change and related environmental issues could have a material adverse impact on our business, financial condition and results
of operations.

In 2020, the World Economic Forum identified failure to act on climate change and related environmental issues as one of the top ten risks
in terms of impact and likelihood for the first time. In 2017, the Task-force on Climate-related Financial Disclosures (TCFD),which is an industry-led
group tasked within bringing climate related financial reporting into the mainstream, estimated that the value of the global stock of manageable
assets at risk from climate change between now and the year 2100 could be up to $43 trillion USD. The risk framework put forward by the TCFD
encourages organizations to consider climate risks and their materiality in four domains (Market/technology; Reputation; Policy/legal; Physical) and
across two climate scenarios (“Paris Agreement”, or low carbon scenario; and “Business As Usual (BAU)”, or high carbon scenario). As further
described below, each domain could pose a material risk to the Company at a business and/or project level and could have a material adverse
impact on our business, financial condition and results of operations:

• Market and technological shifts: We expect that climate-related market and technological shifts will likely be driven by urban

•

development, population growth, quality of life expectations of an emerging middle class in historically developing countries and
developments in digital technologies. This could create demand for: low and zero carbon energy, industrial processes and
infrastructure; resilience services for natural environments, infrastructure and communities; and the application of “smart”, data-driven
technologies.
Reputation: Our reputation is influenced by our delivery performance, client engagement, innovation, price (of our labor and projects),
regulatory compliance and risk management. We anticipate, particularly under our Paris Agreement (1.5°C) scenario, that our
reputation with external and internal stakeholders could also be increasingly influenced by our values and practices regarding low/zero
carbon transformation.
Policy and legal: Policy and legal environments are expected to diverge sharply between our 4°C (BAU) and 1.5°C (Paris Agreement)
scenarios, with the divergence mainly relating to greenhouse gas emissions and the extent to which low/zero carbon transitions are
driven. We expect that some national and sub-national jurisdictions and some of our clients may advocate for the transition, regardless
of the extent to which there is global alignment with the Paris Agreement. In contrast, both scenarios are expected to converge on
climate change-related litigation and policy advocacy and regulatory support for climate resilience.

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•

Physical risks: There could be significant physical risks from climate change under both our 4°C and 1.5°C scenarios. These risks
could be driven by increased temperature, increased storm intensities, sea level rise and changes in rainfall amount, seasonality and
the intensity of extreme events. The types of change are similar under the two scenarios, but their expressions could be much more
severe under the 4°C scenario.

Fluctuations in commodity prices may affect our customers’ investment decisions and therefore subject us to risks of cancellation,
delays in existing work, or changes in the timing and funding of new awards.

Commodity prices can affect our customers in a number of ways. For example, for those customers that produce commodity products such

as oil, gas, copper, or fertilizers, fluctuations in price can have a direct effect on their profitability and cash flow and, therefore, their willingness to
continue to invest or make new capital investments. Furthermore, declines in commodity prices can negatively impact our business in regions whose
economies are substantially dependent on commodity prices, such as the Middle East. To the extent commodity prices decline or fluctuate and our
customers defer new investments or cancel or delay existing projects, the demand for our services decreases, which may have a material adverse
impact on our business, financial condition and results of operations.

Commodity prices can also strongly affect the costs of projects. Rising commodity prices can negatively impact the potential returns on
investments that are planned, as well as those in progress, and result in customers deferring new investments or canceling or delaying existing
projects. Cancellations and delays have affected our past results and may continue to do so in significant and unpredictable ways and could have a
material adverse impact on our business, financial condition and results of operations.

Our continued success is dependent upon our ability to hire, retain, and utilize qualified personnel.

The success of our business is dependent upon our ability to hire, retain and utilize qualified personnel, including engineers, architects,

designers, craft personnel and corporate leadership professionals who have the required experience and expertise at a reasonable cost. The market
for these and other personnel is competitive. From time to time, it may be difficult to attract and retain qualified individuals with the expertise, and in
the timeframe, demanded by our clients, or to replace such personnel when needed in a timely manner. In certain geographic areas, for example,
we may not be able to satisfy the demand for our services because of our inability to successfully hire and retain qualified personnel. Furthermore,
some of our personnel hold government granted clearance that may be required to obtain government projects. If we were to lose some or all of
these personnel, they would be difficult to replace. Loss of the services of, or failure to recruit, qualified technical and leadership personnel could
limit our ability to successfully complete existing projects and compete for new projects.

In addition, in the event that any of our key personnel retire or otherwise leave the Company, we need to have appropriate succession plans
in place and to successfully implement such plans, which requires devoting time and resources toward identifying and integrating new personnel into
leadership roles and other key positions. If we cannot attract and retain qualified personnel or effectively implement appropriate succession plans, it
could have a material adverse impact on our business, financial condition and results of operations.

The cost of providing our services, including the extent to which we utilize our workforce, affects our profitability. For example, the

uncertainty of contract award timing can present difficulties in matching our workforce size with our contracts. If an expected contract award is
delayed or not received, we could incur costs resulting from excess staff, reductions in staff, or redundancy of facilities that could have a material
adverse impact on our business, financial condition and results of operations.

Our business strategy relies in part on acquisitions to sustain our growth. Acquisitions of other companies present certain risks and
uncertainties.

Our business strategy involves growth through, among other things, the acquisition of other companies. Acquiring companies, including

CH2M HILL Companies, Ltd., which we acquired in December 2017, KeyW, which we acquired in June 2019, and John Wood Group’s nuclear
business, which we acquired in March 2020, presents a number of risks, including:

•
•

Assumption of liabilities of an acquired business, including liabilities that were unknown at the time the acquisition was negotiated;
Failure of the acquired business to comply with U.S. federal, state, local and foreign laws and regulations and/or contractual
requirements with government clients;

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•
•
•
•
•
•
•
•
•

•
•

•

Valuation methodologies may not accurately capture the value of the acquired business;
Failure to realize anticipated benefits, such as cost savings, synergies, business opportunities and growth opportunities;
The loss of key customers or suppliers, including as a result of any actual or perceived conflicts of interest;
Difficulties or delays in obtaining regulatory approvals, licenses and permits;
Difficulties relating to combining previously separate entities into a single, integrated, and efficient business;
The effects of diverting leadership’s attention from day-to-day operations to matters involving the integration of acquired companies;
Potentially substantial transaction costs associated with business combinations;
Potential impairment resulting from the overpayment for an acquisition or post-acquisition deterioration in an acquired business;
Difficulties relating to assimilating the leadership, personnel, benefits, services, and systems of an acquired business and to assimilating
marketing and other operational capabilities;
Difficulties retaining key personnel of an acquired business;
Increased burdens on our staff and on our administrative, internal control and operating systems, which may hinder our legal and
regulatory compliance activities;
Difficulties in applying and integrating our system of internal controls to an acquired business;
Increased financial and accounting challenges and complexities in areas such as tax planning, treasury management, financial
reporting and internal controls;
The potential requirement for additional equity or debt financing, which may not be available, or if available, may not have favorable
terms; and
The risks discussed in this Item 1A. Risk Factors that may relate to the activities of the acquired business prior to the acquisition.

While we may obtain indemnification rights from the sellers of acquired businesses and/or insurance that could mitigate certain of these
risks, such rights may be difficult to enforce, the losses may exceed any dedicated escrow funds and the indemnitors may not have the ability to
financially support the indemnity, or the insurance coverage may be unavailable or insufficient to cover all losses.

If our leadership is unable to successfully integrate acquired companies or implement our growth strategy, our operating results could be

harmed. In addition, even if the operations of an acquisition are integrated successfully, we may not realize the full benefits of an acquisition,
including the synergies, cost savings, or sales or growth opportunities that we expect. These benefits may not be achieved within the anticipated
time frame, or at all. Moreover, we cannot assure that we will continue to successfully expand or that growth or expansion will result in profitability.

In addition, there is no assurance that we will continue to locate suitable acquisition targets or that we will be able to consummate any such

transactions on terms and conditions acceptable to us. Existing cash balances and cash flow from operations, together with borrowing capacity
under our credit facilities, may be insufficient to make acquisitions. Future acquisitions may require us to obtain additional equity or debt financing,
which may not be available on attractive terms, or at all. Acquisitions may also bring us into businesses we have not previously conducted and
expose us to additional business risks that are different than those we have traditionally experienced.

Acquisitions and divestitures create various business risks and uncertainties during the pendency of the transaction.

Consummation of any merger or divestiture is subject to the satisfaction of customary conditions, including one or more of the following: (i)
due diligence and its associated time and cost commitments, (ii) board and shareholder approval, (iii) regulatory approvals, (iv) the absence of any
legal restraint that would prevent the consummation of the transaction, (v) the absence of material adverse conditions which can prevent the
consummation of the transaction, and (vi) compliance with covenants and the accuracy of representations and warranties contained in the
transaction agreement, among others. One or more of these conditions may not be fulfilled and, accordingly, the transaction may not be
consummated or may be significantly delayed. In such case, our ongoing business, financial condition and results of operations may be materially
adversely affected and the market price of our common stock

Page 46

may decline, particularly to the extent that the market price reflects a market assumption that the transaction will be consummated or will be
consummated within a particular timeframe.

Furthermore, most transactions require the Company to incur substantial expense associated with closing and if the transaction is not

consummated, we will incur these expenses without realizing the expected benefits. The pursuit of the transaction will also require management
attention and use of internal resources that would otherwise be focused on general business operations. In addition, customers’ uncertainty about
the effect of the transaction may have an adverse effect on the ability to win customer contracts, or could cause existing clients to seek to change
existing business relationships. Employee morale due to the uncertainties associated with the transaction could also be negatively affected. Any of
the foregoing, or other risks arising in connection with a failure or delay in consummating a transaction, including the diversion of management
attention or loss of other opportunities during the pendency of the transaction, could have a material adverse effect on our business, financial
condition and results of operations.

Risks Related to Regulatory Compliance

Past and future environmental, health, and safety laws could impose significant additional costs and liabilities.

We are subject to a variety of environmental, health, and safety laws and regulations governing, among other things, discharges to air and

water, the handling, storage and disposal of hazardous or waste materials and the remediation of contamination associated with the releases of
hazardous substances, and human health and safety. These laws and regulations and the risk of attendant litigation can cause significant delays to
a project and add significantly to its cost. Violations of these regulations could subject us and our management to civil and criminal penalties and
other liabilities.

Various U.S. federal, state, local and foreign environmental laws and regulations may impose liability for property damage and costs of

investigation and cleanup of hazardous or toxic substances on property currently or previously owned by us or arising out of our waste management
or environmental remediation activities. These laws may impose responsibility and liability without regard to knowledge of or causation of the
presence of contaminants. The liability under these laws may be joint and several. We have potential liabilities associated with our past waste
management and other activities and with our current and prior ownership of various properties. The discovery of additional contaminants or the
imposition of unforeseen clean-up obligations at these or other sites could have a material adverse impact on our financial condition and results of
operations.

When we perform our services, our personnel and equipment may be exposed to radioactive and hazardous materials and conditions. We
may be subject to liability claims by employees, customers and third parties as a result of such exposures. In addition, we may be subject to fines,
penalties or other liabilities arising under environmental or safety laws. A claim, if not covered or only partially covered by insurance, could have a
material adverse impact on our results of operations and financial condition.

Health, safety, and environmental laws and regulations and policies are reviewed periodically and any changes thereto could affect us in

substantial and unpredictable ways. Such changes could, for example, relax or repeal laws and regulations relating to the environment, which could
result in a decline in the demand for our environmental services and, in turn, could negatively impact our revenue. Changes in the environmental
laws and regulations, remediation obligations, enforcement actions, stricter interpretations of existing requirements, future discovery of
contamination or claims for damages to persons, property, natural resources or the environment could result in material costs and liabilities that we
currently do not anticipate. If we fail to comply with any environmental, health, or safety laws or regulations, whether actual or alleged, we could be
exposed to fines, penalties or potential litigation liabilities, including costs, settlements and judgments, any of which could adversely affect our
business, financial condition and results of operations.

In addition, we and many of our clients operate in highly regulated environments, which may require us or our clients to obtain, and to

comply with, federal, state and local government permits and approvals. Any of these permits or approvals may be subject to denial, revocation or
modification under various circumstances. Failure to obtain or comply with, or the loss or modification of, the conditions of permits or approvals may
subject us to penalties or other liabilities, which could have a material adverse impact on our business, financial condition and result of operations.

Page 47

If we fail to comply with federal, state, local or foreign governmental requirements, our business may be adversely affected.

We are subject to U.S. federal, state, local and foreign laws and regulations that affect our business. For example, our global operations

require importing and exporting goods and technology across international borders which requires full compliance with both export regulatory laws
and International Trafficking in Arms Regulations (“ITAR”). Although we have policies and procedures to comply with U.S. and foreign international
trade laws, the violation of such laws could subject the Company and its employees to civil or criminal penalties, including substantial monetary
fines, or other adverse actions including denial of import or export privileges or debarment from participation in U.S. government contracts, and
could damage our reputation and our ability to do business.

We could be adversely affected by violations of the U.S. Foreign Corrupt Practices Act and similar worldwide anti-bribery laws.

The U.S. Foreign Corrupt Practices Act (“FCPA”), the U.K. Bribery Act of 2010, and similar anti-bribery laws in other jurisdictions generally

prohibit companies and their intermediaries from making improper payments for the purpose of obtaining or retaining business. Our policies
mandate compliance with these anti-bribery laws, including the requirements to maintain accurate information and internal controls. We operate in
many parts of the world that have experienced governmental corruption to some degree and in certain circumstances; strict compliance with anti-
bribery laws may conflict with local customs and practices. Despite our training and compliance programs, there is no assurance that our internal
control policies and procedures will protect us from acts committed by our employees or agents. If we are found to be liable for FCPA or other
violations (either due to our own acts or our inadvertence, or due to the acts or inadvertence of others), we could suffer from civil and criminal
penalties or other sanctions, including contract cancellations or debarment and loss of reputation, any of which could have a material adverse
impact on our business, financial condition and results of operations.

We may be affected by market or regulatory responses to climate change.

Growing concerns about climate change may result in the imposition of additional environmental regulations. Legislation, international

protocols, regulation or other restrictions on emissions could result in increased compliance costs for us and our clients and have other impacts on
our clients, including those who are involved in the exploration, production or refining of fossil fuels, emit greenhouse gases through the combustion
of fossil fuels or emit greenhouse gases through the mining, manufacture, utilization or production of materials or goods. Such policy changes could
increase the costs of projects for our clients or, in some cases, prevent a project from going forward, thereby potentially reducing the need for our
services, which would in turn have a material adverse impact on our business, financial condition and results of operations. However, these changes
could also increase the pace of projects, such as carbon capture or storage projects, that could have a positive impact on our business. We cannot
predict when or whether any of these various proposals may be enacted or what their effect will be on us or on our customers.

Risks Related to Our Indebtedness

We rely on cash provided by operations and liquidity under our credit facilities to fund our business. Negative conditions in the

credit and financial markets and delays in receiving client payments could adversely affect our cost of borrowing and our business.

Although we finance much of our operations using cash provided by operations, at times we depend on the availability of credit to grow our

business and to help fund business acquisitions. We are currently a borrower under several credit facilities. These facilities all contain customary
covenants restricting, among other things, our ability to incur certain liens and indebtedness. We are also subject to certain financial covenants,
including maintenance of a maximum consolidated leverage ratio. A breach of any covenant or our inability to comply with the required financial
ratios could result in a default under one or more of our credit facilities and limit our ability to do further borrowing. Instability in the credit markets in
the U.S. or abroad could cause the availability of credit to be relatively difficult or expensive to obtain at competitive rates, on commercially
reasonable terms or in sufficient amounts. This situation could make it more difficult or more expensive for us to access funds, refinance our existing
indebtedness, enter into agreements for new indebtedness, or obtain funding through the issuance of securities or such additional capital may not
be available on terms acceptable to us, or at all. We may also enter into business acquisition agreements that require us to access credit, which if
not available at the closing of the acquisition could result in a breach of the acquisition agreement and a resulting claim for damages by the sellers of
such business. In addition, market conditions

Page 48

could negatively impact our clients’ ability to fund their projects and, therefore, utilize our services, which could have a material adverse impact on
our business, financial condition, and results of operations.

In addition, we are subject to the risk that the counterparties to our credit agreements may go bankrupt if they suffer catastrophic demand

on their liquidity that will prevent them from fulfilling their contractual obligations to us. We also routinely enter into contracts with counterparties
including vendors, suppliers and subcontractors that may be negatively impacted by events in the credit markets. If those counterparties are unable
to perform their obligations to us or our clients, we may be required to provide additional services or make alternate arrangements on less favorable
terms with other parties to ensure adequate performance and delivery of services to our clients. These circumstances could also lead to disputes
and litigation with our partners or clients, which could have a material adverse impact on our reputation, business, financial condition and results of
operations.

Some of our customers, suppliers and subcontractors depend on access to commercial financing and capital markets to fund their

operations. Disruptions of the credit or capital markets could adversely affect our clients’ ability to finance projects and could result in contract
cancellations or suspensions, project delays and payment delays or defaults by our clients. In addition, clients may be unable to fund new projects,
may choose to make fewer capital expenditures or otherwise slow their spending on our services or to seek contract terms more favorable to them.
Our government clients may face budget deficits that prohibit them from funding proposed and existing projects or that cause them to exercise their
right to terminate our contracts with little or no prior notice. In addition, any financial difficulties suffered by our subcontractors or suppliers could
increase our cost or adversely impact project schedules. These disruptions could materially impact our backlog and have a material adverse impact
on our business, financial condition and results of operations.

In addition, we typically bill our clients for our services in arrears and are, therefore, subject to our clients delaying or failing to pay our

invoices after we have already committed resources to their projects. In weak economic environments, we may experience increased delays and
failures due to, among other reasons, our clients’ unwillingness to pay for alleged poor performance or to preserve their own working capital. If one
or more clients delays in paying or fails to pay us a significant amount of our outstanding receivables, it could have a material adverse impact on our
liquidity, financial condition and results of operations.

Furthermore, our cash balances and short-term investments are maintained in accounts held by major banks and financial institutions

located primarily in North America, Europe, South America, Australia and Asia. Some of our accounts hold deposits in amounts that exceed
available insurance. Although none of the financial institutions in which we hold our cash and investments have gone into bankruptcy or forced
receivership, or have been seized by their governments, there is a risk that such events may occur in the future. If any such events were to occur,
we would be at risk of not being able to access our cash, which may result in a temporary liquidity crisis that could impede our ability to fund our
operations, which could have a material adverse impact on our business, financial condition and results of operations.

Maintaining adequate bonding and letter of credit capacity is necessary for us to successfully bid on and win some contracts.

In line with industry practice, we are often required to provide performance or payment bonds or letters of credit to our customers. These

instruments indemnify the customer should we fail to perform our obligations under the contract. If a bond or a letter of credit is required for a
particular project and we are unable to obtain an appropriate bond or letter of credit, we cannot pursue that project. Historically, we have had
adequate bonding and letter of credit capacity but, as is typically the case, the issuance of a bond is at the surety’s sole discretion and the issuance
of a letter of credit is based on the Company's credit-worthiness. Because of an overall lack of worldwide bonding capacity, we may find it difficult to
find sureties who will provide required levels of bonding or such bonding may only be available at significant additional cost. There can be no
assurance that our bonding capacity will continue to be available to us on reasonable terms. In addition, future projects may require us to obtain
letters of credit that extend beyond the term of our existing credit facilities. Our inability to obtain adequate bonding and, as a result, to bid on new
contracts that require such bonding or letter of credit could have a material adverse impact on our business, financial condition and results of
operations.

Page 49

Risks Related to Our Common Stock

Our quarterly results may fluctuate significantly, which could have a material negative effect on the price of our common stock.

Our quarterly operating results may fluctuate significantly or fall below the expectations of securities analysts, which could have a material

adverse impact on the price of our common stock. Fluctuations are caused by a number of factors, including:

•

Legal proceedings, disputes and/or government investigations;

Fluctuations in the spending patterns of our government and commercial customers;

The number and significance of projects executed during a quarter;

Unanticipated changes in contract performance, particularly with contracts that have funding limits;

The timing of resolving change orders, requests for equitable adjustments, and other contract adjustments;

Delays incurred in connection with a project;

Changes in prices of commodities or other supplies;

Changes in foreign currency exchange rates;

• Weather conditions that delay work at project sites;

•

The timing of expenses incurred in connection with acquisitions or other corporate initiatives;

The decision by the Board of Directors to begin or cease paying a dividend, and the expectation that if the Company pays dividends, it
would declare dividends at the same or higher levels in the future;

Natural disasters or other crises;

Staff levels and utilization rates;

Changes in prices of services offered by our competitors; and

• General economic and political conditions.

There can be no assurance that we will pay dividends on our common stock.

Our Board of Directors initiated a quarterly cash dividend program in fiscal 2017 under which we have paid, and intend to continue paying,
regular quarterly dividends. The declaration, amount and timing of such dividends are subject to capital availability and determinations by our Board
of Directors that cash dividends are in the best interest of our stockholders and are in compliance with all respective laws and applicable
agreements. Our ability to pay dividends will depend upon, among other factors, our cash balances and potential future capital requirements for
strategic transactions, including acquisitions, debt service requirements, results of operations, financial condition and other factors that our Board of
Directors may deem relevant. A reduction in or elimination of our dividend payments and/or our dividend program could have a material negative
effect on our stock price.

In the event we issue stock as consideration for certain acquisitions we may make, we could dilute share ownership, and if we receive
stock in connection with a divestiture, the value of stock is subject to fluctuation.

One method of acquiring companies or otherwise funding our corporate activities is through the issuance of additional equity securities. If
we issue additional equity securities, such issuances could have the effect of diluting our earnings per share as well as our existing shareholders’
individual ownership percentages in the Company.

Page 50

In addition, if we receive stock or other equity securities in connection with a sale or divestiture of a business, the value of such stock will

fluctuate and/or be subject to trading restrictions. Stock price changes may result from, among other things, changes in the business, operations or
prospects of the issuer prior to or following the transaction, litigation or regulatory considerations, general business, market, industry or economic
conditions, the ability to sell all or a portion of the stock based on current market conditions, and other factors both within and beyond the control of
the Company. In addition, if the stock received is valued in a currency other than U.S. dollars, the value of such stock will also fluctuate based on
foreign currency rates. For example, in connection with the ECR sale, the Company still holds 51.3 million ordinary shares of Worley received as a
portion of the purchase price. The value of such shares will fluctuate based on the trading price of the Worley shares on the Australian Securities
Exchange and the exchange rate of the Australian dollar.

Delaware law and our charter documents may impede or discourage a takeover or change of control.

We are a Delaware corporation. Certain anti-takeover provisions of the Delaware general corporation law impose restrictions on the ability

of others to acquire control of us. In addition, certain provisions of our charter documents may impede or discourage a takeover. For example:

• Only our Board of Directors can fill vacancies on the board;

•

There are various restrictions on the ability of a shareholder to nominate a director for election; and

• Our Board of Directors can authorize the issuance of preferred shares.

These types of provisions, as well as our ability to adopt a shareholder rights agreement in the future, could make it more difficult for a third
party to acquire control of us, even if the acquisition would be beneficial to our shareholders. Accordingly, shareholders may be limited in the ability
to obtain a premium for their shares.

Page 51

Item 1B. UNRESOLVED STAFF COMMENTS

None.

Item 2. PROPERTIES

Our properties consist primarily of office space within general, commercial office buildings located in major cities primarily in the following

countries: United States; Azerbaijan; Australia; Canada; China; Czech Republic; Egypt; France; Germany; Hong Kong; India; Indonesia; Iraq;
Ireland; Italy; Kazakhstan; Malaysia; The Netherlands; New Zealand; The Philippines; Poland; Qatar; Romania; Saudi Arabia; Singapore; Slovakia;
South Africa; South Korea; Sweden; Taiwan (Province of China); Thailand; United Arab Emirates and United Kingdom. We also lease smaller offices
located in certain other countries. Such space is used for operations (providing technical, professional, and other home office services), sales and
administration. The total amount of space leased by us for all of our operations is approximately 7.7 million square feet. We continue to evaluate our
real estate needs in connection with changes in the Company's use of its leased space as a result of the COVID-19 pandemic, and as part of the
integration of our prior acquisitions.

Item 3. LEGAL PROCEEDINGS

The information required by this Item 3 is included in Note 18 — Contractual Guarantees, Litigation, Investigations and Insurance of Notes

to Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K and is incorporated herein by reference.

Item 4. MINE SAFETY DISCLOSURE

None.

Page 52

PART II

Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY

SECURITIES

Market Information

Our common stock is listed on the New York Stock Exchange under the ticker symbol "J".

Shareholders

According to the records of our transfer agent, there were 3,182 shareholders of record as of November 12, 2020.

Dividend Policy

Share Repurchases

On January 17, 2019, the Company’s Board of Directors authorized a share repurchase program of up to $1.0 billion of the Company’s

common stock, to expire on January 16, 2022 (the "2019 Repurchase Authorization"). During fiscal 2019, the Company launched accelerated share
repurchase programs by advancing a total of $500 million to two financial institutions in privately negotiated transactions (collectively, the "2019 ASR
Programs"). The specific number of shares that the Company repurchased under the 2019 ASR Programs was determined based generally on a
discount to the volume-weighted average price per share of the Company's common stock during a calculation period which ended on June 5, 2019
for the first $250 million in repurchases and on December 4, 2019 for the second $250 million in repurchases. The purchases were recorded as
share retirements for purposes of calculating earnings per share.

The following table summarizes the activity under the 2019 Repurchase Authorization during fiscal 2020:

Amount Authorized
(2019 Repurchase
Authorization)
$1,000,000,000

Average Price Per Share (1)
$81.68

Shares Repurchased
4,129,003

Total Shares Retired
4,129,003

(1)

Includes commissions paid and calculated at the average price per share

As a precautionary measure in light of the COVID-19 pandemic, the Company temporarily suspended purchases under the share
repurchase plan in March 2020, with such suspension remaining in effect through the fiscal third quarter of 2020. During the fourth fiscal quarter of
2020, the Company resumed share repurchases on a limited basis. As of October 2, 2020, the Company has $57.9 million remaining under the
2019 Repurchase Authorization.

On January 16, 2020, the Company’s Board of Directors authorized an additional share repurchase program of up to $1.0 billion of the

Company’s common stock, to expire on January 15, 2023 (the "2020 Repurchase Authorization"). There have been no repurchases under the 2020
Repurchase Authorization as of October 2, 2020.

The share repurchase programs do 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 a Rule 10b5-1 plan 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.

Page 53

Unregistered Sales of Equity Securities.

None.

Performance Graph

The following graph and table shows the changes over the five-year period ended October 2, 2020 in the value of $100 as of the close of

market on October 2, 2015 in (1) the common stock of Jacobs Engineering Group Inc., (2) the Standard & Poor’s 500 Stock Index and (3) the
Standard & Poor's 1500 IT Consulting & Other Services Index.

The values of each investment are based on share price appreciation, with reinvestment of all dividends, provided any were paid. The
investments are assumed to have occurred at the beginning of the period presented. The stock performance included in this graph is not necessarily
indicative of future stock price performance.

Jacobs Engineering Group Inc.
S&P 500
S&P 1500 IT Consulting & Other Services

2015

2016

2017

2018

2019

2020

100.00
100.00
100.00

138.18
115.43
114.30

156.97
136.91
125.05

208.45
161.43
146.93

251.00
168.30
142.84

256.72
193.80
146.88

Page 54

Item 6. SELECTED FINANCIAL DATA

The following table presents selected financial data for each of the last five fiscal years. This selected financial data should be read in

conjunction with the Consolidated Financial Statements and related notes beginning on page F-1 of this Annual Report on Form 10-K. On April 26,
2019, Jacobs completed the sale of its ECR business to Worley. 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 represented 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 Consolidated Statements of Earnings as discontinued operations for all periods
presented. Additionally, current and non-current assets and liabilities of the Disposal Group are reflected as held-for-sale in the Consolidated
Balance Sheet as of September 28, 2018. Further, for the year ended September 27, 2019, a portion of the ECR business remained held by Jacobs
and was classified as held for sale as of fiscal year 2019 in accordance with U.S. GAAP. For further discussion see Note 15- Sale of Energy,
Chemicals and Resources ("ECR") Business to the consolidated financial statements. Dollar amounts are presented in thousands, except for per
share information:

Results of Operations:

Revenues
Net Earnings (Loss) Attributable to Jacobs
from Continuing Operations

Financial Position:
Current ratio
Working capital
Current assets
Total assets
Cash
Long-term debt
Total Jacobs stockholders’ equity
Return on average equity

Backlog:

Per Share Information:

Basic Net Earnings (Loss) from Continuing
Operations Per Share
Diluted Net Earnings (Loss) from Continuing
Operations Per Share
Stockholders’ equity

$
$
$
$
$
$

$
$

Average Number of Shares of Common Stock
and Common Stock Equivalents Outstanding
(Diluted)
Common Shares Outstanding At Year End
Cash Dividends Declared Per Common Share $

2020 (a)

2019 (b)

2018 (c)

2017 (d)

2016 (e)

13,566,975

353,861

1.54 to 1
1,598,002
4,539,599
12,354,353
862,424
1,676,941
5,815,712
6.14%
23,818

2.69

2.67
43.82

132,721
129,748
0.76

$
$
$
$
$
$

$
$

12,737,868

290,960

1.34 to 1
1,038,062
4,111,768
11,462,711
631,068
1,201,245
5,714,691
5.03%
22,569

2.11

2.09
41.05

139,206
132,879
0.68

$
$
$
$
$
$

$
$

10,579,773

(4,185)

1.45 to 1
1,410,891
4,556,584
12,645,795
634,870
2,144,167
5,854,345
(0.08)%
19,955

(0.03)

(0.03)
42.21

137,536
142,218
0.60

$
$
$
$
$
$

$
$

6,330,126

170,167

1.56 to 1
1,069,953
2,996,180
7,380,859
607,821
235,000
4,428,352
3.91%
13,147

1.41

1.40
36.78

120,147
120,386
0.60

$
$
$
$
$
$

$
$

6,257,478

159,998

1.61 to 1
1,081,784
2,864,470
7,360,022
507,169
385,330
4,265,276
3.74%
11,535

1.33

1.32
35.26

121,483
120,951
—

(a)

(b)

(c)

Includes after-tax costs of $248.2 million, or $1.87 per diluted share from continuing operations, related to the Company's restructuring, transactions, and
other initiatives during fiscal 2020. Also includes amortization of intangible assets of $68.3 million, or $0.51 per diluted share from continuing operations,
and $56.9 million, or $0.43 per diluted share from continuing operations in fair value adjustments partly offset by dividend income related to our investment
in Worley stock and certain foreign currency revaluations relating to ECR sale proceeds

Includes after-tax costs of $259.8 million, or $1.87 per diluted share from continuing operations, related to the Company's restructuring, transactions, and
other initiatives during fiscal 2019. Also includes amortization of intangible assets of $59.0 million, or $0.42 per diluted share from continuing operations,
and $48.1 million, or $0.34 per diluted share from continuing operations in fair value adjustments partly offset by dividend income related to our investment
in Worley stock and certain foreign currency revaluations relating to ECR sale proceeds

Includes after-tax costs of $112.8 million, or $0.81 per diluted share from continuing operations, related to the Company's restructuring and other initiatives
during fiscal 2018. Also included in fiscal 2018 are after-tax charges of $60.7 million, or $0.44 per diluted share, in professional fees and related costs
associated with the CH2M acquisition and pending ECR sale, $259.2 million, or $1.86 per diluted share from continuing operations, in charges related to
tax reform and amortization of intangible assets of $51.5 million, or $0.37 per diluted share from continuing operations

Page 55

(d)

(e)

Includes after-tax costs of $65.0 million, or $0.54 per diluted share from continuing operations, related to the Company's restructuring and other initiatives
during fiscal 2017. Also included in the fourth quarter of fiscal 2017 are after-tax charges of $10.6 million, or $0.09 per diluted share from continuing
operations, respectively, in professional fees and related costs associated with the CH2M acquisition. Also includes amortization of intangible assets of
$33.5 million, or $0.28 per diluted share from continuing operations

Includes after-tax costs of $75.2 million, or $0.62 per diluted share from continuing operations, related to the Company's restructuring initiatives during fiscal
2016. Also included in the fourth quarter of fiscal 2016 are (i) a loss on sale of our French subsidiary of $17.1 million or $0.14 per diluted share from
continuing operations; and (ii) a non-cash write-off on an equity investment of $10.4 million or $0.09 per diluted share from continuing operations. Also
includes amortization of intangible assets of $47.6 million, or $0.28 per diluted share from continuing operations.

Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

In order to better understand the changes that occur to key elements of our financial condition, results of operations and cash flows, a

reader of this Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) should be aware of the critical
accounting policies we apply in preparing our consolidated financial statements.

The consolidated financial statements contained in this report were prepared in accordance with U.S. GAAP. The preparation of our
consolidated financial statements and the financial statements of any business performing long-term professional services, engineering and
construction-type contracts requires management to make certain estimates and judgments that affect both the entity’s results of operations and the
carrying values of its assets and liabilities. Although our significant accounting policies are described in Note 2- Significant Accounting Policies of
Notes to Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K, the following discussion is intended to
highlight and describe those accounting policies that are especially critical to the preparation of our consolidated financial statements.

Revenue Accounting for Contracts

Engineering, Procurement & Construction Contracts and Service Contracts

On September 29, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, including the subsequent ASUs
that amended and clarified the related guidance. The Company recognizes engineering, procurement, and construction contract revenue over time,
as performance obligations are satisfied, due to the continuous transfer of control to the customer. Upon adoption of ASC Topic 606, contracts
which include engineering, procurement and construction services are generally accounted for as a single deliverable (a single performance
obligation) and are no longer segmented between types of services. In some instances, the Company’s services associated with a construction
activity are limited only to specific tasks such as customer support, consulting or supervisory services. In these instances, the services are typically
identified as separate performance obligations.

The Company recognizes revenue using the percentage-of-completion method, based primarily on contract costs incurred to date
compared to total estimated contract costs. Estimated contract costs include the Company’s latest estimates using judgments with respect to labor
hours and costs, materials, and subcontractor costs. The percentage-of-completion method (an input method) is the most representative depiction of
the Company’s performance because it directly measures the value of the services transferred to the customer. Subcontractor materials, labor and
equipment and, in certain cases, customer-furnished materials and labor and equipment are included in revenue and cost of revenue when
management believes that the company is acting as a principal rather than as an agent (e.g., the company integrates the materials, labor and
equipment into the deliverables promised to the customer or is otherwise primarily responsible for fulfillment and acceptability of the materials, labor
and/or equipment). The Company recognizes revenue, but not profit, on certain uninstalled materials that are not specifically produced, fabricated,
or constructed for a project. Revenue on these uninstalled materials is recognized when control is transferred. Changes to total estimated contract
cost or losses, if any, are recognized in the period in which they are determined as assessed at the contract level. Pre-contract costs are expensed
as incurred unless they are expected to be recovered from the client. Project mobilization costs are generally charged to project costs as incurred
when they are an integrated part of the performance obligation being transferred to the client. Under the typical payment terms of our engineering,
procurement and construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms at periodic
intervals (e.g., biweekly or monthly) and customer payments on are typically due within 30 to 60 days of billing, depending on the contract.

Page 56

For service contracts, the Company recognizes revenue over time using the cost-to-cost percentage-of-completion method. Service

contracts that include multiple performance obligations are segmented between types of services. For contracts with multiple performance
obligations, the Company allocates the transaction price to each performance obligation using an estimate of the stand-alone selling price of each
distinct service in the contract. In some instances where the Company is standing ready to provide services, the Company recognizes revenue
ratably over the service period. Under the typical payment terms of our service contracts, amounts are billed as work progresses in accordance with
agreed-upon contractual terms, and customer payments are typically due within 30 to 60 days of billing, depending on the contract.

Direct costs of contracts include all costs incurred in connection with and directly for the benefit of client contracts, including depreciation

and amortization relating to assets used in providing the services required by the related projects. The level of direct costs of contracts may fluctuate
between reporting periods due to a variety of factors, including the amount of pass-through costs we incur during a period. On those projects where
we are acting as principal for subcontract labor or third-party materials and equipment, we reflect the amounts of such items in both revenues and
costs (and we refer to such costs as “pass-through costs”).

Variable Consideration

The nature of the Company’s contracts gives rise to several types of variable consideration, including claims and unpriced change orders;
awards and incentive fees; and liquidated damages and penalties. The Company recognizes revenue for variable consideration when it is probable
that a significant reversal in the amount of cumulative revenue recognized will not occur. The Company estimates the amount of revenue to be
recognized on variable consideration using the expected value (i.e., the sum of a probability-weighted amount) or the most likely amount method,
whichever is expected to better predict the amount. Factors considered in determining whether revenue associated with claims (including change
orders in dispute and unapproved change orders in regard to both scope and price) should be recognized include the following: (a) the contract or
other evidence provides a legal basis for the claim, (b) additional costs were caused by circumstances that were unforeseen at the contract date and
not the result of deficiencies in the company’s performance, (c) claim-related costs are identifiable and considered reasonable in view of the work
performed, and (d) evidence supporting the claim is objective and verifiable. If the requirements for recognizing revenue for claims or unapproved
change orders are met, revenue is recorded only when the costs associated with the claims or unapproved change orders have been incurred and
only up to the amount of cost incurred. Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that
recovery of such cost is probable and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements
described above for claims accounting have been satisfied.

The Company generally provides limited warranties for work performed under its engineering and construction contracts. The warranty

periods typically extend for a limited duration following substantial completion of the Company’s work on the project. Historically, warranty claims
have not resulted in material costs incurred for which the Company was not compensated for by the customer.

Practical Expedient

If the Company has a right to consideration from a customer in an amount that corresponds directly with the value of the Company’s
performance completed to date (a service contract in which the company bills a fixed amount for each hour of service provided), the Company
recognizes revenue in the amount to which it has a right to invoice for services performed.

The Company does not adjust the contract price for the effects of a significant financing component if the Company expects, at contract
inception, that the period between when the Company transfers a service to a customer and when the customer pays for that service will be one
year or less.

Page 57

Joint Ventures and VIEs

As is common to the industry, we execute certain contracts jointly with third parties through various forms of joint ventures. Although the

joint ventures own and hold the contracts with the clients, the services required by the contracts are typically performed by us and our joint venture
partners, or by other subcontractors under subcontracting agreements with the joint ventures. Many of these joint ventures are formed for a specific
project. The assets of our joint ventures generally consist almost entirely of cash and receivables (representing amounts due from clients), and the
liabilities of our joint ventures generally consist almost entirely of amounts due to the joint venture partners (for services provided by the partners to
the joint ventures under their individual subcontracts) and other subcontractors. In general, at any given time, the equity of our joint ventures
represents the undistributed profits earned on contracts the joint ventures hold with clients. Very few of our joint ventures have employees or third-
party debt or credit facilities. The debt held by the joint ventures is non-recourse to the general credit of Jacobs.

The assets of a joint venture are restricted for use to the obligations of the particular joint venture and are not available for general
operations of the Company. Our risk of loss on these arrangements is usually shared with our partners. The liability of each partner is usually joint
and several, which means that each partner may become liable for the entire risk of loss on the project. Furthermore, on some of our projects, the
Company has granted guarantees which may encumber both our contracting subsidiary company and the Company for the entire risk of loss on the
project. The Company is unable to estimate the maximum potential amount of future payments that we could be required to make under outstanding
performance guarantees related to joint venture projects due to a number of factors, including but not limited to, the nature and extent of any
contractual defaults by our joint venture partners, resource availability, potential performance delays caused by the defaults, the location of the
projects, and the terms of the related contracts. See Note 18- Contractual Guarantees, Litigation, Investigations and Insurance for further
discussion.

Our unconsolidated joint ventures (including equity method investments) are reviewed for impairment whenever events or changes in

circumstances indicate that the carrying amount of the investment might not be recoverable, and impairment losses are recognized for such
investments if there is a decline in fair value below carrying value that is considered to be other-than-temporary.

Many of the joint ventures are deemed to be variable interest entities (“VIE”) because they lack sufficient equity to finance the activities of

the joint venture. The Company uses a qualitative approach to determine if the Company is the primary beneficiary of the VIE, which considers
factors that indicate a party has the power to direct the activities that most significantly impact the joint venture’s economic performance. These
factors include the composition of the governing board, how board decisions are approved, the powers granted to the operational manager(s) and
partner that holds that position(s), and to a certain extent, the partner’s economic interest in the joint venture. The Company analyzes each joint
venture initially to determine if it should be consolidated or unconsolidated.

•

Consolidated if the Company is the primary beneficiary of a VIE, or holds the majority of voting interests of a non-VIE (and no significant
participative rights are available to the other partners).

Unconsolidated if the Company is not the primary beneficiary of a VIE, or does not hold the majority of voting interest of a non-VIE.

Share-Based Payments

We measure the value of services received from employees and directors in exchange for an award of an equity instrument based on the

grant-date fair value of the award. The computed value is recognized as a non-cash cost on a straight-line basis over the period the individual
provides services, which is typically the vesting period of the award with the exception of the value of awards containing an internal performance
measure, such as EPS growth and ROIC, which is recognized on a straight-line basis over the vesting period subject to the probability of meeting
the performance requirements and adjusted for the number of shares expected to be earned.

Accounting for Pension Plans

The accounting for pension plans requires the use of assumptions and estimates in order to calculate periodic pension cost and the value of

the plans’ assets and liabilities. These assumptions include discount rates, investment returns and projected salary increases, among others. The
actuarial assumptions used in determining the funded statuses of the plans are provided in Note 13 - Pension and Other Postretirement Benefit
Plans of Notes to Consolidated Financial Statements beginning on page F-1 of this Annual Report on Form 10-K.

Page 58

The expected rates of return on plan assets range from 2.3% to 7.5% for fiscal 2020 and 1.8% to 7% fiscal 2021. We believe the range of
rates selected for fiscal 2020 reflects the long-term returns expected on the plans’ assets, considering recent market conditions, projected rates of
inflation, the diversification of the plans’ assets, and the expected real rates of market returns. The discount rates used to compute plan liabilities
decreased year over year with a range of 1.3% to 8.1% in fiscal 2019 and a range of 0.2% to 7.1% 2020. These assumptions represent the
Company’s best estimate of the rates at which its pension obligations could be effectively settled.

Changes in the actuarial assumptions often have a material effect on the values assigned to plan assets and liabilities, and the associated

pension expense. For example, if the discount rate used to value the net pension benefit obligation (“PBO”) at October 2, 2020 was higher by 0.5%,
the PBO would have been lower at that date by approximately $212.4 million for non-U.S. plans, and by approximately $19.8 million for U.S. plans. If
the expected return on plan assets was higher by 1.0%, the net periodic pension cost for fiscal 2020 would be lower by approximately $20.3 million
for non-U.S. plans, and by approximately $3.4 million for U.S. plans. Differences between actuarial assumptions and actual performance (i.e.,
actuarial gains and losses) that are not recognized as a component of net periodic pension cost in the period in which such differences arise are
recorded to accumulated other comprehensive income (loss) and are recognized as part of net periodic pension cost in future periods in accordance
with U.S. GAAP. Management monitors trends in the marketplace within which our pension plans operate in an effort to assure the fairness of the
actuarial assumptions used.

Contractual Guarantees, Litigation, Investigations, and Insurance

In the normal course of business, we make contractual commitments, some of which are supported by separate guarantees; and on

occasion we are a party in a litigation or arbitration proceeding. The litigation in which we are involved primarily includes personal injury claims,
professional liability claims, and breach of contract claims. Where we provide a separate guarantee, it is strictly in support of the underlying
contractual commitment. Guarantees take various forms including surety bonds required by law, or standby letters of credit ("LOC") (also referred to
as “bank guarantees”) or corporate guarantees given to induce a party to enter into a contract with a subsidiary. Standby LOCs are also used as
security for advance payments or in various other transactions. The guarantees have various expiration dates ranging from an arbitrary date to
completion of our work (e.g., engineering only) to completion of the overall project. We record in the Consolidated Balance Sheets amounts
representing our estimated liability relating to such guarantees, litigation and insurance claims. Guarantees are accounted for in accordance with
ASC 460-10, Guarantees, at fair value at the inception of the guarantee.

We maintain insurance coverage for most insurable aspects of our business and operations. Our insurance programs have varying

coverage limits depending upon the type of insurance, and include certain conditions and exclusions which insurance companies may raise in
response to any claim that the Company brings. We have also elected to retain a portion of losses and liabilities that occur through the use of
various deductibles, limits, and retentions under our insurance programs. As a result, we may be subject to a 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 the contracts which the Company enters with its clients. 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 we are subject to many types of audits, investigations, and

claims by, or on behalf of, the government including with respect to contract performance, pricing, cost allocations, procurement practices, labor
practices, and socioeconomic obligations. 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 United States, as well as by various government agencies representing
jurisdictions outside the United States.

Our Consolidated Balance Sheets include amounts representing our probable estimated liability relating to such claims, guarantees,

litigation, audits, and investigations. Our estimates of probable liabilities require us to make assumptions related to potential losses regarding our
determination of amounts considered probable and estimable. 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, as well as 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. Insurance recoveries are recorded as assets if recovery is
probable and estimated liabilities are not reduced by expected insurance recoveries.

Page 59

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 a material adverse effect on our consolidated financial
statements, beyond amounts currently accrued.

Testing Goodwill for Possible Impairment

The goodwill carried on our Consolidated Balance Sheets is tested annually for possible impairment, and on an interim basis if indicators of

possible impairment exist. For purposes of impairment testing, goodwill is assigned to the applicable reporting units based on the current reporting
structure. In performing the annual impairment test, we evaluate our goodwill at the reporting unit level. The Company performs the annual goodwill
impairment test for the reporting units at the beginning of the fourth quarter of its fiscal year.

U.S. GAAP does not prescribe a specific valuation method for estimating the fair value of reporting units. Any valuation technique used to

estimate the fair value of a reporting unit requires the use of significant estimates and assumptions, including revenue growth rates, operating
margins, discount rates and future market conditions, among others.

We used income and market approaches to test our goodwill for possible impairment which requires us to make estimates and judgments.

Under the income approach, fair value is determined by using the discounted cash flows of our reporting units. The Company’s discount rate reflects
a weighted average cost of capital (“WACC”) for a peer group of companies representative of the Company’s respective reporting units. Under the
market approach, the fair values of our reporting units are determined by reference to guideline companies that are reasonably comparable to our
reporting units; the fair values are estimated based on the valuation multiples of the invested capital associated with the guideline companies. In
assessing whether there is an indication that the carrying value of goodwill has been impaired, we utilize the results of both valuation techniques and
consider the range of fair values indicated.

It is possible that changes in market conditions, economy, facts and circumstances, judgments and assumptions used in estimating the fair

value could change, resulting in possible impairment of goodwill in the future. The fair values resulting from the valuation techniques used are not
necessarily representative of the values we might obtain in a sale of the reporting units to willing third parties.

We have determined that the fair value of our reporting units substantially exceeded their respective carrying values for the Consolidated

Balance Sheets presented.

Impairment of Long-Lived Assets

Our long-lived assets other than goodwill principally consist of right-of-use lease assets, property, equipment and improvements, and finite-

lived intangible assets. These long-lived assets are evaluated for impairment for each of our asset groups in accordance with ASC 360 by first
identifying whether indicators of impairment exist. If such indicators are present, we assess long-lived asset groups for recoverability based on
estimated future undiscounted cash flows. For asset groups where the recoverability test fails, the fair value of each asset group is then estimated
and compared to its carrying amount. An impairment loss is recognized for the amount by which an asset group’s carrying value exceeds its fair
value.

Page 60

12,737,868 $
(10,260,840)
2,477,028
(2,072,177)
404,851

September 28, 2018
10,579,773
(8,421,223)
2,158,550
(1,771,107)
387,443

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

For the Fiscal Years Ended October 2, 2020, September 27, 2019 and September 28, 2018
(In thousands, except per share information)

October 2, 2020

September 27, 2019

Revenues

Direct cost of contracts

Gross profit

Selling, general and administrative expenses

Operating Profit
Other Income (Expense):

Interest income
Interest expense
Miscellaneous (expense) income, net
Total other expense, net

Earnings from Continuing Operations Before Taxes
Income Tax Expense for Continuing Operations
Net Earnings of the Group from Continuing Operations
Net Earnings of the Group from Discontinued Operations
Net Earnings of the Group
Net Earnings Attributable to Noncontrolling Interests from Continuing
Operations

Net Earnings (Loss) Attributable to Jacobs from Continuing Operations
Net Earnings Attributable to Noncontrolling Interests from Discontinued
Operations
Net Earnings Attributable to Jacobs from Discontinued Operations

Net Earnings Attributable to Jacobs
Net Earnings (Loss) Per Share:
Basic Net Earnings (Loss) from Continuing Operations Per Share
Basic Net Earnings from Discontinued Operations Per Share

Basic Earnings Per Share

Diluted Net Earnings (Loss) from Continuing Operations Per Share
Diluted Net Earnings from Discontinued Operations Per Share

Diluted Earnings Per Share

$
$
$

Page 61

13,566,975 $
(10,980,307)
2,586,668
(2,050,695)
535,973

4,729
(62,206)
(37,293)
(94,770)
441,203
(55,320)
385,883
137,984
523,867

(32,022)
353,861

9,487
(83,847)
20,468
(53,892)
350,959
(36,954)
314,005
559,214
873,219

(23,045)
290,960

—
137,984
491,845 $

(2,195)
557,019
847,979 $

2.69 $
1.05 $
3.74 $

2.67 $
1.04 $
3.71 $

2.11 $
4.03 $
6.14 $

2.09 $
4.00 $
6.08 $

8,984
(76,760)
11,314
(56,462)
330,981
(325,632)
5,349
167,793
173,142

(9,534)
(4,185)

(177)
167,616
163,431

(0.03)
1.21
1.18

2020 Overview

COVID-19 Pandemic. There are many risks and uncertainties regarding the COVID-19 pandemic, including the anticipated duration of the
pandemic and the extent of local and worldwide social, political, and economic disruption it may cause. The Company’s operations for the last three
quarters of fiscal 2020 were adversely impacted by COVID-19. While certain business units of both Critical Mission Solutions and People & Places
Solutions have experienced, and may continue to experience, an increase in demand for certain of their services regarding new projects that may
arise in response to the COVID-19 pandemic, it is still expected that COVID-19 is likely to continue to have an adverse impact on each of Critical
Missions Solutions and People & Places Solutions in fiscal 2021, although to a lesser degree than what was seen in 2020.

Please refer to Item 1A - Risk Factors, for a discussion of risks and uncertainties related to COVID-19, including the potential impacts on the

Company’s business, financial condition and results of operations.

Net earnings attributable to the Company from continuing operations for fiscal 2020 were $353.9 million (or $2.67 per diluted share), an

increase of $62.9 million, or 21.6%, from $291.0 million (or $2.09 per diluted share) for the prior year. Included in the Company’s operating results
for the current year were $56.9 million (or $0.43 per share) in after tax fair value losses recorded in miscellaneous income (expense), net,
associated with our investment in Worley stock (net of Worley stock dividend) and certain foreign currency revaluations relating to the ECR sale and
$248.2 million in after-tax Restructuring and other charges and transaction costs associated in part with the Company's fourth quarter fiscal 2020
transformation initiatives relating to real estate and other staffing programs which are discussed in Note 16- Restructuring and Other Charges. Also,
fiscal 2020 results were impacted by charges associated with the Company's acquisition of John Wood Groups' nuclear consulting, remediation and
program management business along with charges relating to the integration of the KeyW and CH2M acquisitions and the sale of ECR. Our fiscal
2019 results included $259.8 million (or $1.86 per share) in after-tax Restructuring and other charges and transactions costs associated with the
Company's KeyW and CH2M acquisitions and the ECR sale. Also included in the fiscal 2019 net earnings from continuing operations are $48.1
million in after-tax fair value losses associated with our investment in Worley stock (net of Worley stock dividend) and certain foreign currency
revaluations relating to ECR sale proceeds. Income tax expense for continuing operations for fiscal 2020 was $55.3 million, an increase of $18.4
million, or 49.7%, from $37.0 million in the prior year. Key drivers for this year-over-year increase in the effective tax rate include a reduction in
valuation allowance releases in fiscal year 2020, as well as an increase in tax on foreign earnings in the U.S.

Net earnings attributable to Jacobs from discontinued operations for fiscal 2020 were $138.0 million (or $1.04 per diluted share), a decrease of
$419.0 million, or 75.2%, from $557.0 million (or $4.00 per diluted share) for the prior year. Included in net earnings attributable to the Company
from discontinued operations for the current year was an expense reduction for the settlement of the Nui Phao ("NPMC") legal matter described in
Note 17- Commitments and Contingencies and Derivative Financial Instruments that was reimbursed by insurance, the recognition of the deferred
gain for the delayed conveyance of the international entities and for the delivery of the ECR IT assets, as discussed in Note 15- Sale of Energy,
Chemicals and Resources ("ECR") Business and adjustments for working capital and certain other items in connection with the ECR sale.
Additionally, the year-over-year change was also driven by the gain on sale recognized in the fiscal 2019 period and the absence of normal
operating results of the ECR business as reported in the prior year. Included in the current year results from discontinued operations is the pre-tax
gain on sale of the ECR business of $110.2 million. Included in prior year results from discontinued operations is the pre-tax gain on the sale of the
ECR business of $935.1 million, see Note 15- Sale of Energy, Chemicals and Resources ("ECR") Business.

On March 6, 2020, a subsidiary of Jacobs completed the acquisition of the nuclear consulting, remediation and program management business of
John Wood Group for an enterprise value of £246 million, or approximately $317.9 million, less cash acquired of $24.3 million. On June 12, 2019,
we acquired KeyW, a U.S. based national security solutions provider to the intelligence, cyber, and counterterrorism communities. On December 15,
2017, we acquired CH2M, a provider of international engineering, construction and technical services.

Backlog at October 2, 2020 was $23.8 billion, up $1.2 billion, from $22.6 billion for the prior year. New prospects and new sales remain

strong and the Company continues to have a positive outlook for many of the industry groups and sectors in which our clients operate.

Results of Operations

Page 62

Fiscal 2020 Compared to Fiscal 2019

Revenues for the year ended October 2, 2020 were $13.57 billion, an increase of $829.1 million, or 6.5%, from $12.74 billion for the prior
year. The increase in revenues was due primarily to the a full year of revenues in fiscal 2020 from the KeyW acquisition completed in June 2019,
impacts from the March 2020 John Wood Group nuclear business acquisition and growth in our legacy People & Places Solutions businesses, offset
in part by impacts from the COVID 19 pandemic. Also, our revenues were impacted by an extra week of activity in fiscal 2020, see Note 1-
Description of Business and Basis of Presentation in the notes to the consolidated financial statements.

Pass-through costs included in revenues for the year ended October 2, 2020 were $2.61 billion in comparison to $2.54 billion in the prior
year. In general, pass-through costs are more significant on projects that have a higher content of field services activities. Pass-through costs are
generally incurred at specific points during the life cycle of a project and are highly dependent on the needs of our individual clients and the nature of
the clients’ projects. However, because we have hundreds of projects which start at various times within a fiscal year, the effect of pass-through
costs on the level of direct costs of contracts can vary between fiscal years without there being a fundamental or significant change to the underlying
business.

Gross profit for the year ended October 2, 2020 was $2.59 billion, up $109.6 million, or 4.4%, from $2.48 billion for the prior year. Our gross

profit margins were 19.1% and 19.4% for the years ended October 2, 2020 and September 27, 2019, respectively. The increase in our gross profit
was attributable to favorable impacts from the KeyW and John Wood Group nuclear business acquisitions, also impacted by the extra week of
activity in fiscal 2020. The slight differences in year over year gross margin trends were attributable mainly to legacy portfolio mix and lower
overhead rate impacts on revenue, with partial offsets from favorable margin trends from our recent KeyW and John Wood Group nuclear business
acquisitions and as well as year over year impacts from lower overhead reimbursement rates resulting from our ongoing cost reduction programs
partially offset by COVID-19 cost mitigation efforts.

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

level.

Selling, general & administrative expenses for the year ended October 2, 2020 were $2.05 billion, a decrease of $21.5 million, or 1.0%, from

$2.07 billion for the prior year. The decrease in SG&A expenses as compared to the prior year was due primarily to less expense relating to the
Transition Services Agreement (the "TSA") with Worley, which expired in April 2020, although the parties agreed to extend certain of the services
beyond the initial term, and reductions in personnel related and other overhead costs resulting from our ongoing cost reduction programs as well as
COVID-19 cost mitigation efforts, partially offset by incremental SG&A expenses from the KeyW and John Wood Group nuclear business
acquisitions and the extra week of activity in fiscal 2020. Also, included in the current year results were $325.1 million of restructuring and other
charges and transaction costs associated in part with the Company's fourth quarter fiscal 2020 transformation initiatives relating to real estate and
other staffing programs, and the Company's acquisition of John Wood Groups' nuclear business. In comparison, the prior year included $350.3
million of restructuring and other charges and transaction costs. Favorable impacts on SG&A expenses from foreign exchange were $3.2 million for
the current year.

Net interest expense for the year ended October 2, 2020 was $57.5 million, a decrease of $16.9 million from $74.4 million for the prior year.

The decrease in net interest expense year over year is primarily due to the paydown of debt subsequent to the ECR sale in the prior year third
quarter.

Miscellaneous income (expense), net for the year ended October 2, 2020 was $(37.3) million, a decrease of $57.8 million as compared to

$20.5 million in income for the prior year. The decrease from the prior year was due primarily to $74.5 million in pre-tax unrealized losses associated
with changes in the fair value of our investment in Worley stock (net of Worley stock dividend) and certain foreign currency revaluations relating to
the ECR sale in the current year, compared to $64.8 million in the prior year. Also included in miscellaneous (expense) income during the current
year is $15.8 million in TSA-related income associated with the ECR sale compared to $35.4 million in the prior year, as discussed in Note 15- Sale
of Energy, Chemicals and Resources ("ECR") Business. Further, miscellaneous income (expense), net for the year ended September 27, 2019
included a one-time gain on the settlement of the CH2M retiree medical plan of $35.0 million.

Net earnings attributable to Jacobs from discontinued operations for fiscal 2020 were $138.0 million (or $1.04 per diluted share), a decrease

of $419.0 million, or 75.2%, from $557.0 million (or $4.00 per diluted share) for the prior year. Included in net earnings attributable to the Company
from discontinued operations for the current year was an expense reduction for the settlement of the Nui Phao ("NPMC") legal matter described in
Note 17- Commitments and Contingencies and Derivative Financial Instruments that was reimbursed by insurance, the recognition of the deferred
gain

Page 63

for the delayed conveyance of the international entities and for the delivery of the ECR IT assets, as discussed in Note 15- Sale of Energy,
Chemicals and Resources ("ECR") Business and adjustments for working capital and certain other items in connection with the ECR sale.
Additionally, the year-over-year change was also driven by the gain on sale recognized in the fiscal 2019 period and the absence of normal
operating results of the ECR business as reported in the prior year. Included in the current year results from discontinued operations is the pre-tax
gain on sale of the ECR business of $110.2 million. Included in prior year results from discontinued operations is the pre-tax gain on the sale of the
ECR business of $935.1 million, see Note 15- Sale of Energy, Chemicals and Resources ("ECR") Business.

The Company’s consolidated effective income tax rate of 12.5% is lower than the U.S. statutory rate primarily due to a $16.9 million benefit
from foreign valuation allowance releases, $26.5 million of foreign tax generated in the current year, a benefit of $7.3 million from the application of
the Internal Revenue Code Section 179D, a reduction in uncertain tax positions of $11.3 million and benefits from tax rate changes and stock
compensation. These decreases in tax expense were offset by $43.0 million of U.S. foreign inclusions within U.S. tax costs of foreign operations.

The following table reconciles total income tax expense on continuing operations using the statutory U.S. federal income tax rate to the

consolidated income tax expense on continuing operations shown in the accompanying Consolidated Statements of Earnings for the years ended
October 2, 2020 and September 27, 2019 (dollars in thousands):

For the Years Ended

Statutory amount
State taxes, net of the federal benefit
Exclusion of tax on non-controlling interests
Foreign:

Difference in tax rates of foreign operations
Benefit from foreign valuation allowance release
U.S. tax cost (benefit) of foreign operations

Tax differential on foreign earnings

Foreign tax credits
Tax Rate Change
Tax reform
Valuation allowance
Uncertain tax positions
Other items:

IRS §179D deduction
Disallowed officer compensation
Stock compensation
Foreign partnership income/(loss)
Other items – net

Total other items

October 2, 2020
92,652
$
7,254
(6,622)

%
21.0 % $
1.6 %
(1.5)%

September 27,
2019

73,701
10,183
(4,839)

1,083
(29,125)
(17,760)
(45,802)
(15,682)
—
36,674
(207)
(6,883)

(2,957)
5,568
(7,864)
—
(4,938)
(10,191)
36,954

21.0 %
2.9 %
(1.4)%

0.3 %
(8.3)%
(5.1)%
(13.1)%
(4.5)%
—
10.4 %
(0.1)%
(2.0)%

(0.8)%
1.6 %
(2.2)%
— %
(1.4)%
(2.8)%
10.5 %

(6,267)
(16,861)
42,992
19,864
(26,471)
(6,811)
—
—
(11,338)

(7,267)
5,081
(10,234)
—
(788)
(13,208)
55,320

(1.4)%
(3.8)%
9.7 %
4.5 %
(6.0)%
(1.5)%
— %
— %
(2.6)%

(1.6)%
1.2 %
(2.3)%
— %
(0.2)%
(3.0)%
12.5 % $

Taxes on income from continuing operations

The Company’s consolidated effective income tax rate for the year ended October 2, 2020 increased to 12.5% from 10.5% for fiscal
2019. Key drivers for this year over year increase in the effective tax rate include a reduction in valuation allowance releases in fiscal 2020, as well
as an increase in tax on foreign earnings in the U.S.

Fiscal 2019 Compared to Fiscal 2018

Revenues for the year ended September 27, 2019, were $12.74 billion, an increase of $2.16 billion, or 20.4%, from $10.58 billion for the

corresponding period in 2018. The increase in revenues was due primarily to the CH2M acquisition in December fiscal 2018 included in fiscal 2019
for the full year, impacts from the KeyW acquisition included in the fiscal 2019 results since closing in mid-June and growth in our legacy CMS and
P&PS businesses.

Page 64

Pass-through costs included in revenues for the year ended September 27, 2019 were $2.54 billion in comparison to $2.25 billion in the

prior year. These year-over-year increases are due primarily to impacts from the CH2M acquisition included for the full year of fiscal 2019.

Gross profit for the year ended September 27, 2019 was $2.48 billion, an increase of $318.5 million, or 14.8% from $2.16 billion for the

corresponding period in 2018. Our gross profit margins were 19.4% and 20.4% for the years ended September 27, 2019 and September 28, 2018,
respectively. Revenue mix primarily drove the lower gross profit and margin for the year over year periods.

Selling, general & administrative expenses for the year ended September 27, 2019 were $2.07 billion, an increase of $0.30 billion, or 17.0%,

from $1.77 billion for the corresponding period in 2018. The increase in SG&A expenses is due mainly to incremental SG&A expense from the
CH2M and KeyW businesses acquired. Also, included in the 2019 results were $350.3 million of restructuring and other charges and transaction
costs, as well as higher personnel related costs year over year due in part to costs to service the TSA with Worley. In comparison, the prior year
included $230.5 million of restructuring and other charges and transaction costs.

Net interest expense for the year ended September 27, 2019 was $74.4 million, an increase of $6.6 million from $67.8 million for the

corresponding period in 2018. The increase in net interest expense as compared to the corresponding period in 2018 was due primarily to higher
levels of debt outstanding and our fixed rate notes having been outstanding for the full year of fiscal 2019 and only five months in fiscal 2018.

Miscellaneous income (expense), net for the year ended September 27, 2019 was $20.5 million, an increase of $9.2 million, as compared to
$11.3 million for the corresponding period in 2018. The increase was due primarily to the gain on the settlement of the CH2M retiree medical plan of
$35.0 million and income from the TSA with Worley of $35.4 million, offset by $64.8 million, net, relating to ECR related fair value adjustments
(unrealized losses) and dividend income related to our investment in Worley stock and certain foreign currency revaluations relating to ECR sale
proceeds.

Net earnings of the group from discontinued operations was $559.2 million for the year ended September 27, 2019, an increase of $391.4
million from $167.8 million for the corresponding period in 2018. Included in 2019 was the pre-tax gain on the sale of the ECR business of $935.1
million, offset in part by a charge for the final settlement of the Nui Phao legal matter. The 2018 fiscal year included a $21.0 million loss associated
with the disposal of the Company's equity investment in its Guimar joint venture.

Page 65

The Company’s consolidated effective income tax rate was lower than the U.S. statutory rate of 21.0% primarily due to a $29.1 million

benefit from foreign valuation allowance releases in fiscal 2019, $15.7 million of foreign tax and other credits generated in fiscal 2019 and a
reduction in the tax contingency reserves of $6.9 million. The decreases in tax expense were offset by a $36.7 million charge from the
remeasurement of net deferred tax assets and other miscellaneous U.S. tax reform changes. The following table reconciles total income tax
expense on continuing operations using the statutory U.S. federal income tax rate to the consolidated income tax expense on continuing operations
shown in the accompanying Consolidated Statements of Earnings for the years ended September 27, 2019 and September 28, 2018 (dollars in
thousands):

Statutory amount
State taxes, net of the federal benefit
Exclusion of tax on non-controlling interests
Foreign:

Difference in tax rates of foreign operations
Benefit from foreign valuation allowance release
U.S. tax cost (benefit) of foreign operations

Tax differential on foreign earnings

Foreign tax credits
Tax reform
Valuation allowance
Uncertain tax positions
Other items:

IRS §179D deduction
Disallowed officer compensation
Stock compensation
Other items – net

Total other items

Taxes on income from continuing operations

For the Years Ended

September 27,
2019

73,701
10,183
(4,839)

1,083
(29,125)
(17,760)
(45,802)
(15,682)
36,674
(207)
(6,883)

(2,957)
5,568
(7,864)
(4,938)
(10,191)
36,954

21.0 % $
2.9 %
(1.4)%

0.3 %
(8.3)%
(5.1)%
(13.1)%
(4.5)%
10.4 %
(0.1)%
(2.0)%

(0.8)%
1.6 %
(2.2)%
(1.4)%
(2.8)%
10.5 % $

September 28,
2018

81,421
15,772
(2,389)

2,815
(5,088)
4,030
1,757
(21,735)
155,756
104,221
(1,402)

(4,557)
1,510
(2,158)
(2,564)
(7,769)
325,632

24.6 %
4.8 %
(0.7)%

0.9 %
(1.5)%
1.2 %
0.6 %
(6.6)%
47.1 %
31.5 %
(0.4)%

(1.4)%
0.5 %
(0.7)%
(0.8)%
(2.4)%
98.4 %

The Company’s consolidated effective income tax rate for the year ended September 27, 2019 decreased to 10.5% from 98.4% for fiscal
2018. Key drivers for this year over year decrease in the effective tax rate include a reduction of $119.1 million associated with remeasurement of
U.S. deferred tax items due to tax reform and a decrease in the amount charged for valuation allowance related to foreign tax credits of $104.4
million.

Page 66

Segment Financial Information

The following tables present total revenues and segment operating profit for each reportable segment (in thousands) and includes a
reconciliation of segment operating profit to total U.S. GAAP operating profit by including certain corporate-level expenses and Restructuring,
transaction and other charges (in thousands). Prior period information has been recast to reflect the current period presentation.

Revenues from External Customers:

Critical Mission Solutions
People & Places Solutions

Total

Segment Operating Profit:

Critical Mission Solutions (1)
People & Places Solutions (2)

Total Segment Operating Profit

Other Corporate Expenses (3)
Restructuring, Transaction and Other Charges

Total U.S. GAAP Operating Profit

Total Other (Expense) Income, net (4)

Earnings from Continuing Operations Before Taxes

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

4,965,952 $
8,601,023
13,566,975 $

4,551,162 $
8,186,706
12,737,868 $

3,725,365
6,854,408
10,579,773

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

372,070 $
740,707
1,112,777
(249,391)
(327,413)
535,973
(94,770)
441,203 $

310,043 $
714,394
1,024,437
(264,351)
(355,235)
404,851
(53,892)
350,959 $

255,718
527,900
783,618
(161,788)
(234,387)
387,443
(56,462)
330,981

(1)

(2)

(3)

(4)

Includes $15.0 million in charges during the year ended September 28, 2018 associated with a legal matter.

Includes $25.0 million in charges associated with a certain project for the year ended September 27, 2019.

Other corporate expenses include costs that were previously allocated to the ECR segment prior to discontinued operations presentation in
connection with the ECR sale in the approximate amount of $— million, $14.8 million and $25.6 million for the years ended October 2, 2020,
September 27, 2019 and September 28, 2018, respectively. Also includes intangibles amortization of $90.6 million, $79.1 million and $68.1
million for the years ended October 2, 2020, September 27, 2019 and September 28, 2018, respectively.
For the years ended October 2, 2020 and September 27, 2019, other expenses includes revenues under the Company's TSA with Worley of
$15.8 million and $35.4 million, respectively, $74.3 million and $64.8 million in fair value adjustments related to our investment in Worley stock
(net of Worley Stock dividends) and certain foreign currency revaluations relating to ECR sale proceeds, respectively. Also included for the years
ended October 2, 2020, September 27, 2019 and September 28, 2018 is amortization of deferred financing fees related to the CH2M acquisition
of $0.7 million, $3.2 million and $1.8 million respectively. Lastly, includes loss on settlement of U.S. pension plan of $2.7 million for the year
ended October 2, 2020 and includes gain on settlement of the CH2M retiree medical plans of $35.0 million for the year ended September 27,
2019.

In evaluating the Company’s performance by operating segment, the CODM reviews various metrics and statistical data for each Line Of

Business ("LOB") but focuses primarily on revenues and operating profit. As discussed above, segment operating profit includes not only local
SG&A expenses but the SG&A expenses of the Company’s support groups that have been allocated to the segments. In addition, the Company
attributes each LOB’s specific incentive compensation plan costs to the LOBs. The revenues of the People & Places Solutions LOB are more
affected by pass-through revenues than the Critical Mission Solutions LOB. The methods for recognizing revenue, incentive fees, project losses and
change orders are consistent among the LOBs.

Page 67

Critical Mission Solutions

Revenue
Operating Profit

Fiscal 2020 vs. 2019

October 2, 2020

$
$

4,965,952 $
372,070 $

For the Years Ended
September 27, 2019

September 28, 2018

4,551,162 $
310,043 $

3,725,365
255,718

Critical Mission Solutions (CMS) segment revenues for the year ended October 2, 2020 were $4.97 billion, up $414.8 million, or 9.1%, from

$4.55 billion for the prior year. Our increase in revenue was primarily attributable to incremental revenue from the KeyW and John Wood Group
nuclear business acquisitions, along with the extra week of activity in fiscal 2020. These favorable impacts more than offset unfavorable COVID-19
related revenue impacts mainly due to challenges from physical distancing requirements, client scheduling changes and other related factors.
Impacts on revenues from unfavorable foreign currency translation were approximately $4.5 million for the year ended October 2, 2020.

Operating profit for the segment was $372.1 million for the year ended October 2, 2020, up $62.0 million, or 20.0%, from $310.0 million for

the prior year. The increases from the prior year were primarily attributable to incremental operating profit from the KeyW and John Wood Group
nuclear business acquisitions, the extra week of activity in fiscal 2020 and the favorable close out of a large program management contract in the
first fiscal quarter of 2020. Impacts on operating profit from unfavorable foreign currency translation were approximately $0.4 million for the year
ended October 2, 2020. Unfavorable revenue impacts from COVID-19 mentioned above were largely offset by the Company’s mitigating actions in
discretionary operating spend and benefits costs, government assistance programs and other areas of improved operating performance.

Fiscal 2019 vs. 2018

CMS segment revenues for the year ended September 27, 2019 were $4.55 billion, up $825.8 million, or 22.2%, from $3.73 billion for the

corresponding period in 2018. The increase in revenues was due in large part to nuclear services sector revenue resulting from the CH2M
acquisition included for the full year of fiscal 2019 and also incremental revenues from the KeyW acquisition. Also, our CMS revenues were
positively impacted by year-over-year revenue volume growth across the legacy portfolio, highlighted by increased spending by customers in the
U.S. government business. Impacts on revenues from unfavorable foreign currency were approximately $29.7 million for fiscal year 2019.

Operating profit for the CMS segment was $310.0 million for the year ended September 27, 2019, up $54.3 million, or 21.2%, from $255.7

million for the corresponding period in 2018. In addition to incremental operating profit benefits from the CH2M and KeyW acquisitions, the increase
from the prior year was primarily attributable to continued growth in profits from our U.S. governmental business. SG&A for the CMS segment
increased for fiscal 2019 attributable mainly to incremental SG&A associated with the CH2M and KeyW acquisitions. Fiscal 2018 included charges
of $15.0 million associated with a legal matter.

People & Places Solutions

Revenue
Operating Profit

October 2, 2020

$
$

8,601,023 $
740,707 $

For the Years Ended
September 27, 2019

September 28, 2018

8,186,706 $
714,394 $

6,854,408
527,900

Page 68

Fiscal 2020 vs. 2019

Revenues for the People & Places Solutions (P&PS) segment for the year ended October 2, 2020 were $8.60 billion, up $414.3 million, or

5.1%, from $8.19 billion for the prior year. The increases in revenue were due in part to portfolio growth across our businesses, highlighted by strong
investment in advanced facilities, water and transport infrastructure and project management/construction management ("PMCM") sectors, along
with the extra week of activity in fiscal 2020. These favorable performance trends more than offset unfavorable COVID-19 related revenue impacts
mainly due to challenges from physical distancing requirements, client scheduling changes and other related factors. Impacts on revenues from
unfavorable foreign currency translation were approximately $26.2 million for fiscal 2020.

Operating profit for the segment for the year ended October 2, 2020 was $740.7 million, an increase of $26.3 million, or 3.7%, from $714.4

million for the comparative period in 2019. The year-over-year increase in operating profit was due primarily to positive impacts from the higher year-
over-year revenues for the segment, along with the extra week of activity in fiscal 2020 and reductions in costs related to COVID-19 impacts and
mitigation efforts. Impacts on operating profit from unfavorable foreign currency translation were approximately $6.1 million for fiscal 2020.
Unfavorable revenue impacts from COVID-19 mentioned above were largely offset by the Company’s mitigating actions in discretionary operating
spend and benefits costs, government assistance programs and other areas of improved operating performance.

Fiscal 2019 vs. 2018

Revenues for the P&PS segment for the year ended September 27, 2019 were $8.19 billion, an increase of $1.34 billion, or 19.6%, from

$6.85 billion for the corresponding period in 2018. The increase in revenues was due in part to favorable impacts resulting from the CH2M
acquisition included for the full year of fiscal 2019 together with revenue increases across all our businesses given the strong investment by
customers in Life Sciences, Electronics, Water and Transport Infrastructure sectors. Impacts on revenues from unfavorable foreign currency were
approximately $57.8 million for fiscal 2019.

Operating profit for the segment for the year ended September 27, 2019 was $714.4 million, up $186.5 million, or 35.3%, compared to

$527.9 million for the corresponding period in 2018. The increase in operating profit was in part due to favorable impacts from the CH2M acquisition,
together with positive impacts from the higher year over year revenues for the segment. Included in fiscal 2019 results was a $25.0 million charge
associated with a project. SG&A for the P&PS segment increased for fiscal 2019, with this increase being attributable mainly to incremental SG&A
associated with the CH2M acquisition in December of fiscal 2018.

Other Corporate Expenses

Other corporate expenses were $249.4 million, $264.4 million and $161.8 million for the years ended October 2, 2020, September 27, 2019

and September 28, 2018, respectively. The decrease from fiscal 2019 to fiscal 2020 was due primarily to cost-reduction programs implemented
through prior restructuring initiatives and the current year COVID-19 pandemic response. The increase from fiscal 2018 to fiscal 2019 was due
primarily to higher intangible amortization expense from the KeyW and John Wood Group nuclear business acquisitions, as well as impacts from
company benefit program enhancements. These increases were partly offset by employee related and other cost reductions across the Company's
corporate functions. Fiscal 2019 also included approximately $70.2 million of year-to-date other current year cost allocation realignments that
occurred in the first quarter of fiscal 2019 in conjunction with the CH2M acquisition. Prior periods were not restated for the cost allocation
realignments.

Included in other corporate expenses in the above table are costs and expenses that relate to general corporate activities as well as
corporate-managed benefit and insurance programs. Such costs and expenses include: (i) those elements of SG&A expenses relating to the
business as a whole; (ii) those elements of our incentive compensation plans relating to corporate personnel whose other compensation costs are
not allocated to the LOBs; (iii) the amortization of intangible assets acquired as part of business combinations; (iv) the quarterly variances between
the Company’s actual costs of certain of its self-insured integrated risk and employee benefit programs and amounts charged to the LOBs; and (v)
certain adjustments relating to costs associated with the Company’s international defined benefit pension plans. In addition, other corporate
expenses may also include from time to time certain adjustments to contract margins (both positive and negative) associated with projects, as well
as other items, where it has been determined that such adjustments are not indicative of the performance of the related LOB.

Page 69

The Company currently holds a 24.5% interest in AWE Management Ltd (AWE ML) that is accounted for under the equity method, and the

carrying value of the Company’s investment as of October 2, 2020 was approximately $38 million. As of October 2, 2020, AWE ML was under a
contractual operating arrangement with the UK Ministry of Defence (MoD) with multiple years remaining under the arrangement. Subsequent to year
end, on November 2, 2020, the MoD unexpectedly announced plans to change its current operating agreements with AWE ML that would result in
the early termination of the current contract in 2021. The Company is currently evaluating this subsequent development, including the potential
impact on our accounting for this equity method investment in future quarters.

Restructuring and Other Charges

For discussion regarding restructuring and other charges, see Note 16- Restructuring and Other Charges to the Consolidated Financial
Statements.

Page 70

Backlog Information

We include in backlog the total dollar amount of revenues we expect to record in the future as a result of performing work under contracts

that have been awarded to us. Our policy with respect to Operations & Maintenance ("O&M") contracts, however, is to include in backlog the amount
of revenues we expect to receive for one succeeding year, regardless of the remaining life of the contract. For national government programs (other
than national government O&M contracts, which are subject to the same policy applicable to all other O&M contracts), our policy is to include in
backlog the full contract award, whether funded or unfunded, excluding option periods. Because of variations in the nature, size, expected duration,
funding commitments and the scope of services required by our contracts, the timing of when backlog will be recognized as revenues can vary
greatly between individual contracts.

Consistent with industry practice, substantially all of our contracts are subject to cancellation or termination at the option of the client,

including our U.S. government work. While management uses all information available to it to determine backlog, at any given time our backlog is
subject to changes in the scope of services to be provided as well as increases or decreases in costs relating to the contracts included therein.
Backlog is not necessarily an indicator of future revenues.

Because certain contracts (e.g., contracts relating to large Engineering, Procurement & Construction ("EPC") projects as well as national

government programs) can cause large increases to backlog in the fiscal period in which we recognize the award, and because many of our
contracts require us to provide services that span over several fiscal quarters (and sometimes over fiscal years), we evaluate our backlog generally
on a year-over-year basis, but also on a sequential, quarter-over-quarter basis, where appropriate.

Please refer to Item 1A- Risk Factors, above, for a discussion of other factors that may cause backlog to ultimately convert into revenues at

different amounts.

The following table summarizes our backlog for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in

millions):

Critical Mission Solutions
People & Places Solutions

Total

October 2, 2020

September 27, 2019

September 28, 2018

9,104 $

14,714
23,818 $

8,460 $

14,109
22,569 $

7,130
12,825
19,955

The increase in backlog in Critical Mission Solutions for the years presented was primarily the result of new awards from the U.S. federal

government and the acquisition of John Wood Group's nuclear consulting, remediation and program management business in fiscal 2020.

The increase in backlog in People & Places Solutions for the years presented was primarily the result of new awards in the U.K. and U.S.

markets.

Backlog relating to work to be performed either directly or indirectly for the U.S. federal government and its agencies totaled approximately

$8.5 billion (or 35.7% of total backlog), $8.8 billion (or 39.1% of total backlog) and $6.8 billion (or 34.1% of total backlog) at October 2, 2020,
September 27, 2019 and September 28, 2018, respectively. Most of our federal government contracts require that services be provided beyond one
year. In general, these contracts must be funded annually (i.e., the amounts to be spent under the contract must be appropriated by the U.S.
Congress to the procuring agency, and then the agency must allot these sums to the specific contracts).

We estimate that approximately $7.48 billion, or 31.4%, of total backlog at October 2, 2020 will be realized as revenues within the next fiscal

year.

Consolidated backlog differs from the Company’s remaining performance obligations as defined by ASC 606 primarily because of our

national government contracts (other than national government O&M contracts). Our policy is to include in backlog the full contract award, whether
funded or unfunded excluding the option periods while our remaining performance obligations represent a measure of the total dollar value of work
to be performed on contracts awarded and in progress. Additionally, the Company includes our proportionate share of backlog related to
unconsolidated joint ventures which is not included in our remaining performance obligations.

Page 71

Liquidity and Capital Resources

At October 2, 2020, our principal sources of liquidity consisted of $862.4 million in cash and cash equivalents and $2.09 billion of available

borrowing capacity under our $2.25 billion revolving credit agreement (the "Revolving Credit Facility"). We finance much of our operations and
growth through cash generated by our operations.

The amount of cash and cash equivalents at October 2, 2020 represented an increase of $231.4 million from $631.1 million at

September 27, 2019, the reasons for which are described below.

Our cash flow provided by operations of $806.8 million during fiscal 2020 was comparatively higher than the $366.4 million in cash flow

used for operations for the prior year. This improvement was due primarily to favorable net cash earnings driven in part by improved operating profit
performance and mitigating actions from the Company in response to the COVID-19 pandemic. Additionally, this favorable trend in cash from
operations benefited from lower working capital levels, due mainly to higher levels of cash used in the prior year for income taxes payable largely
attributable to taxes paid on the gain from the ECR sale and favorable cash flow impacts in accrued liabilities, including the deferral of certain
payments associated mainly with COVID-19 government assistance programs in the U.S. and Europe, offset mainly by higher cash used in
accounts payable.

Our cash used for investing activities for fiscal 2020 of $429.1 million was comparatively lower than the $2.2 billion cash provided by
investing activities for the prior year. The change was due primarily to the impact in 2019 of $2.80 billion in cash proceeds associated with the ECR
sale and cash paid for the KeyW acquisition of $575.1 million, net of cash acquired. On a comparative basis, cash used in investing activities
included approximately $293.6 million in cash paid for the John Wood Group's nuclear business, net of cash acquired in the second quarter of fiscal
2020.

Our cash used for financing activities of $208.3 million in fiscal 2020 resulted mainly from share repurchases of $337.3 million and dividend
payments to both shareholders and non-controlling interests totaling $144.0 million, offset by net proceeds from borrowings of $265.3 million. Cash
used for financing activities was $2.0 billion in fiscal 2019 resulted mainly from net repayments of borrowings of $1.0 billion primarily related to
repayments with cash received from the ECR sale, common stock repurchases of $853.7 million and dividend payments to both shareholders and
non-controlling interests of $106.4 million.

At October 2, 2020, the Company had approximately $153.0 million in cash and cash equivalents held in the U.S. and $709.4 million held

outside of the U.S. (primarily in the U.K., the Eurozone, Australia, India and the United Arab Emirates), which is used primarily for funding operations
in those regions. Other than the tax cost of repatriating funds to the U.S. (see Note 7- Income Taxes of Notes to Consolidated Financial Statements
beginning on page F-1 of this Annual Report on Form 10-K), there are no material impediments to repatriating these funds to the U.S.

In March 2020, the Company entered into a new unsecured term loan facility (the “2020 Term Loan Facility”) with a syndicate of financial
institutions as lenders. The principal balance of the 2020 Term Loan Facility was $1.0 billion as of October 2, 2020. The terms and other important
details are summarized in Note 9- Borrowings. The 2020 Term Loan Facility was entered into as part of our strategy to increase the portion of our
long-term debt that is represented by term loan facilities. During fiscal 2020, the Company used proceeds of the 2020 Term Loan Facility to repay
$200.0 million in short-term debt and all but $152.8 million in outstanding amounts under the Revolving Credit Facility.

The Company had $263.0 million in letters of credit outstanding at October 2, 2020. Of this amount, $2.3 million was issued under the

Revolving Credit Facility and $260.7 million was issued under separate, committed and uncommitted letter-of-credit facilities.

On March 6, 2020, a subsidiary of Jacobs completed the acquisition of John Wood Group's nuclear consulting, remediation and program
management business for an enterprise value of £246 million, or approximately $317.9 million, less cash acquired of $24.3 million. The Company
has recorded its preliminary purchase accounting processes associated with the acquisitions, which are summarized in Note 14- Business
Combinations.

On June 12, 2019, Jacobs completed the acquisition of KeyW by acquiring 100% of the outstanding shares of KeyW common stock. The

Company paid total consideration of $902.6 million which was comprised of approximately $604.2 million in cash to the former stockholders and
certain equity award holders of KeyW and the assumption of KeyW’s debt of $298.4 million. The Company repaid KeyW's outstanding debt by the
end of the fourth fiscal quarter of 2019. The Company has recorded its final purchase accounting associated with the acquisition, which is
summarized in Note 14- Business Combinations.

Page 72

On April 26, 2019, Jacobs completed the sale of its ECR business to Worley for a purchase price of $3.4 billion consisting of (i) $2.8 billion

in cash plus (ii) 58.2 million ordinary shares of Worley, subject to adjustments for changes in working capital and certain other items.

We believe we have adequate liquidity and capital resources to fund our projected cash requirements for the next twelve months based on

the liquidity provided by our cash and cash equivalents on hand, our borrowing capacity and our continuing cash from operations. We further believe
that our financial resources and discretionary spend controls, as well as near term benefits from government assistance programs, will allow us to
continue managing the negative impacts of the COVID-19 pandemic on our business operations for the foreseeable future, which is expected to
include reduced revenue from operating activities, based on current assumptions and expectations regarding the pandemic. We have taken actions
to reduce spending more broadly across the Company, only proceeding with operating and capital spending that is critical. We have also ceased all
non-essential hiring and reduced discretionary expenses, including certain employee benefits and compensation. In addition, as a precautionary
measure, we temporarily suspended purchases under the share repurchase plan in March 2020 with such suspension remaining in effect through
the third fiscal quarter of 2020. Looking ahead, we have developed contingency plans to reduce costs further if the situation deteriorates beyond or
lasts longer than current assumptions and expectations.

We were in compliance with all of our debt covenants at October 2, 2020.

Page 73

Contractual Obligations

The following table sets forth certain information about our contractual obligations as of October 2, 2020 (in thousands):

Payments Due by Fiscal Period

Debt obligations
Interest (1)
Operating leases
Unfunded portion of defined benefit pension plans (2)
Obligations under nonqualified deferred compensation
plans (3)
Purchase obligations (4)

Total

1 Year or Less

1 - 3 Years

3 - 5 Years

More than 5
Years

Total
1,678,620 $
188,238
994,678
400,391

— $

36,844
184,967
31,258

73,689
307,834
66,317

1,368,620 $
53,854
235,338
71,728

171,130
2,842,462
6,275,519 $

12,614
2,297,161
2,562,844 $

26,762
545,301
1,019,903 $

28,946
—

1,758,486 $

310,000
23,851
266,539
231,088

102,808
—
934,286

(1)

(2)

(3)

(4)

Determined based on borrowings outstanding at the end of fiscal 2020 using the interest rates in effect at that time, considering the effects of interest rate
swap agreements, and for our outstanding long-term debt, concluding with the expiration date of the debt facilities as defined below.
Assumes that future contributions will be consistent with amounts contributed in fiscal 2020, allowing for certain growth based on rates of inflation and
salary increases, but limited to the amount recorded as of October 2, 2020. Actual contributions will depend on a variety of factors, including amounts
required by local laws and regulations, and other funding requirements.

Assumes that future payments will be consistent with amounts paid in fiscal 2020. Due to the non-qualified nature of the plans, and the fact that benefits are
based in part on years of service, the payments included in the schedule were limited to the amount recorded as of October 2, 2020.

Represents those liabilities estimated to be under firm contractual commitments as of October 2, 2020; primarily accounts payable, accrued payroll and
accrued dividends.

Effects of Inflation and Changing Prices

The effects of inflation and changing prices on our business is discussed in Item 1A- Risk Factors, and is incorporated herein by reference.

Off-Balance Sheet Arrangements

We are party to financial instruments with off-balance sheet risk in the form of guarantees not reflected in our balance sheet that arise in the

normal course of business. However, such off-balance sheet arrangements are not reasonably likely to have a material adverse effect on our
financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or resources. See Note 17- Commitments and
Contingencies and Derivative Financial Instruments of Notes to Consolidated Financial Statements beginning on page F-1 of this Annual Report on
Form 10-K.

Page 74

New Accounting Pronouncements

ASU 2017-04, Simplifying the Test for Goodwill Impairment, is effective for fiscal years beginning after December 15, 2019 with early adoption
permitted. ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation. An entity
will now recognize a goodwill impairment charge for the amount by which a reporting unit's carrying value exceeds its fair value, not to exceed the
amount of goodwill allocated to the reporting unit. Management does not expect the adoption of ASU 2017-04 to have any impact on the Company's
financial position, results of operations or cash flows.

ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments requires

entities to use a current lifetime expected credit loss methodology to measure impairments of certain financial assets. Using this methodology will
result in earlier recognition of losses than under the current incurred loss approach, which requires waiting to recognize a loss until it is probable of
having been incurred. There are other provisions within the standard that affect how impairments of other financial assets may be recorded and
presented, and that expand disclosures. This standard will be effective for our interim and annual periods beginning with the first quarter of fiscal
2021, and must be applied on a modified retrospective basis. Management does not expect the adoption of ASU 326 to have a material impact on
the Company's financial position, results of operations or cash flows.

Page 75

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We do not enter into derivative financial instruments for trading, speculation or other purposes that would expose the Company to market

risk. In the normal course of business, our results of operations are exposed to risks associated with fluctuations in interest rates and currency
exchange rates.

Interest Rate Risk

Please see the Note 9- Borrowings in Notes to Consolidated Financial Statements beginning on Page F-1 of this Annual Report on Form

10-K, which is incorporated herein by reference, for a discussion of the Revolving Credit Facility and Note Purchase Agreement.

Our Revolving Credit Facility, 2020 Term Loan Facility and certain other debt obligations are subject to variable rate interest which could be

adversely affected by an increase in interest rates. As of October 2, 2020, we had an aggregate of $1.2 billion in outstanding borrowings under our
Revolving Credit Facility and 2020 Term Loan Facility. Interest on amounts borrowed under these agreements is subject to adjustment based on the
Company’s Consolidated Leverage Ratio (as defined in the credit agreements governing the Revolving Credit Facility and the 2020 Term Loan
Facility). Depending on the Company’s Consolidated Leverage Ratio, borrowings under the Revolving Credit Facility and the 2020 Term Loan
Facility bear interest at a Eurocurrency rate plus a margin of between 0.875% and 1.5% or a base rate plus a margin of between 0% and 0.5%.
Additionally, if our consolidated leverage ratio exceeds a certain amount, the interest on the Senior Notes may increase by 75 basis points.
However, as discussed in Note 17- Commitments and Contingencies and Derivative Financial Instruments, we have entered into swap agreements
with an aggregate notional value of $911.5 million to convert the variable rate interest based liabilities associated with a corresponding amount of
our debt into fixed interest rate liabilities, leaving $267.1 million in principal amount subject to variable interest rate risk.

For the year ended October 2, 2020, our weighted average floating rate borrowings were approximately $1.2 billion. If floating interest rates

had increased by 1.00%, our interest expense for the year ended October 2, 2020 would have increased by approximately $12.2 million.

Foreign Currency Risk

In situations where our operations incur contract costs in currencies other than their functional currency, we sometimes enter into foreign

exchange contracts to limit our exposure to fluctuating foreign currencies. We follow the provisions of ASC No. 815, Derivatives and Hedging in
accounting for our derivative contracts. The Company has $521.5 million in notional value of exchange rate sensitive instruments at October 2,
2020. See Note 17- Commitments and Contingencies and Derivative Financial Instruments for discussion.

Page 76

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required by this Item 8 is submitted as a separate section beginning on page F-1 of this Annual Report on Form 10-K and is

incorporated herein by reference.

Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

Item 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are those controls and procedures that are designed to ensure that information required to be disclosed

in our reports filed or submitted under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) are recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without
limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is
accumulated and communicated to management, including our Chair and Chief Executive Officer (principal executive officer) and Chief Financial
Officer (principal financial officer), to allow timely decisions regarding required disclosure.

The Company’s management, with the participation of its Chair and Chief Executive Officer (principal executive officer) and Chief Financial
Officer (principal financial officer), evaluated the effectiveness of the Company’s disclosure controls and procedures as defined by Rule 13a-15(e) of
the Exchange Act as of October 2, 2020, the end of the period covered by this Annual Report on Form 10-K (the “Evaluation Date”). Based on that
evaluation, the Company’s management, with the participation of the Chief Executive Officer (principal executive officer) and Chief Financial Officer
(principal financial officer) concluded that the Company’s disclosure controls and procedures as of the Evaluation Date were effective to ensure that
information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and
communicated to the Company’s management, including the Company’s Chair and Chief Executive Officer (principal executive officer) and Chief
Financial Officer (principal financial officer), as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining for the Company adequate internal control over financial reporting, as defined

in Rule 13a-15(f) under the Exchange Act. Management, with the participation of its Chair and Chief Executive Officer (principal executive officer)
and Chief Financial Officer (principal financial officer), has assessed the effectiveness of the Company’s internal control over financial reporting as of
the Evaluation Date based on the framework established in “Internal Control—Integrated Framework,” issued by the Committee of Sponsoring
Organizations of the Treadway Commission (2013 framework). Based on this assessment, management has concluded that the Company’s internal
control over financial reporting as of the Evaluation Date was effective.

The Company's independent registered public accounting firm, Ernst & Young LLP, that audited the Company's consolidated financial

statements included in this Annual Report on Form 10-K, also audited the effectiveness of our internal control over financial reporting as of
October 2, 2020, as stated in their report included in this Annual Report on Form 10-K.

Changes in Internal Control

There were no changes in the Company’s internal control over financial reporting during the Company’s fiscal quarter ended October 2,

2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Page 77

Limitations on Effectiveness of Controls

The Company’s management, including its Chief Executive Officer and Chief Financial Officer, does not expect that its disclosure controls

and procedures or its system of internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how
well designed or operated, can provide only reasonable, but not absolute, assurance that the objectives of the system of internal control are met.
The design of the Company’s control system reflects the fact that there are resource constraints, and that the benefits of such control systems must
be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide
absolute assurance that all control failures and instances of fraud, if any, within the Company have been detected. These inherent limitations include
the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Additionally,
controls can be circumvented by the intentional acts of individuals, by collusion of two or more people, or by management override of the controls.
The design of any system of controls is also based in part on certain assumptions about the likelihood of future events, and there can be no
assurance that the design of any particular control will always succeed in achieving its objective under all potential future conditions.

Item 9B. OTHER INFORMATION

None.

Page 78

Item 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

PART III

Directors, Executive Officers, Promoters and Control Persons

The information required by Paragraph (a), and Paragraphs (c) through (g) of Item 401 of Regulation S-K (except for information required by

Paragraph (e) of that Item to the extent the required information pertains to our executive officers) and Item 405 of Regulation S-K is set forth under
the captions “Members of the Board of Directors,” “Corporate Governance” and “Delinquent Section 16(a) Reports” in our definitive proxy statement
to be filed with the SEC pursuant to Regulation 14A within 120 days after the close of our fiscal year and is incorporated herein by reference. The
information required by Paragraph (b) of Item 401 of Regulation S-K, as well as the information required by Paragraph (e) of that Item to the extent
the required information pertains to our executive officers, is set forth in Part I, Item 1 of this Annual Report on Form 10-K under the heading
“Information About Our Executive Officers.”

Code of Ethics

We have adopted a code of ethics for our Chief Executive Officer and senior financial officers; a code of business conduct and ethics for

members of our Board of Directors and corporate governance guidelines. The full text of these codes of ethics and corporate governance guidelines
are available at our website at www.jacobs.com. In the event we make any amendment to, or grant any waiver from, a provision of the code of
ethics that applies to the principal executive officer, principal financial officer or principal accounting officer that requires disclosure under applicable
SEC rules, we will disclose such amendment or waiver and the reasons therefor on our website. We will provide any person without charge a copy
of any of the aforementioned codes of ethics upon receipt of a written request. Requests should be addressed to: Jacobs Engineering Group Inc.,
1999 Bryan Street, Suite 1200, Dallas, Texas 75201, Attention: Corporate Secretary.

Corporate Governance

The information required by Items 407(d)(4) and (d)(5) of Regulation S-K is set forth under the caption “Corporate Governance” in our

definitive proxy statement to be filed with the SEC pursuant to Regulation 14A within 120 days after the close of our fiscal year and is incorporated
herein by reference.

Item 11. EXECUTIVE COMPENSATION

The information required by this Item is set forth under the captions “Corporate Governance,” “Compensation Committee Report,”

“Compensation Discussion and Analysis” and “Executive Compensation” in our definitive proxy statement to be filed with the SEC pursuant to
Regulation 14A within 120 days after the close of our fiscal year and is incorporated herein by reference.

Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The information required by this Item is set forth in our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A within

120 days after the close of our fiscal year and is incorporated herein by reference.

Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

The information required by this Item is set forth under the captions “Members of The Board of Directors,” “Corporate Governance,” and

“Certain Relationships and Related Transactions” in our definitive proxy statement to be filed with the SEC pursuant to Regulation 14A within 120
days after the close of our fiscal year and is incorporated herein by reference.

Item 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is set forth under the captions “Report of the Audit Committee” and “Audit and Non-Audit Fees” in our
definitive proxy statement to be filed with the SEC pursuant to Regulation 14A within 120 days after the close of our fiscal year and is incorporated
herein by reference.

Page 79

PART IV

EXHIBITS AND FINANCIAL STATEMENTS

Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Documents filed as part of this report:

(1)

(2)

(3)

The Company’s Consolidated Financial Statements at October 2, 2020 and September 27, 2019 and for each of the three
years in the period ended October 2, 2020, and the notes thereto, together with the report of the independent auditors on
those Consolidated Financial Statements are hereby filed as part of this report, beginning on page F-1.
Financial statement schedules – no financial statement schedules are presented as the required information is either not
applicable, or is included in the consolidated financial statements or notes thereto.
See Exhibit Index below.

(b) Exhibit Index:

2.1

2.2

3.1

3.2

Agreement and Plan of Merger among The KeyW Holding Corporation, Jacobs Engineering Group Inc. and Atom Acquisition Sub, Inc., dated
April 21, 2019. Filed as Exhibit 2.1 to the Registrant’s Current Report on Form 8-K on April 22, 2019 and incorporated herein by reference.

Amended and Restated Stock and Asset Purchase Agreement, dated as of April 26, 2019, by and between Jacobs Engineering Group Inc.
and WorleyParsons Limited. Filed as Exhibit 2.1 to the Registrant's Current Report on Form 8-K on April 29, 2019 and incorporated herein by
reference.

Amended and Restated Certificate of Incorporation of Jacobs Engineering Group Inc. Filed as Exhibit 3.1 to the Registrant’s Current Report
on Form 8-K on January 28, 2014 and incorporated herein by reference.

Amended and Restated Bylaws of Jacobs Engineering Group Inc., dated as of October 5, 2020. Filed as Exhibit 3.1 to the Registrant’s
Current Report on Form 8-K on September 18, 2020 and incorporated herein by reference.

4.1†

Description of the Registrant’s Securities.

10.1

10.2

10.3

10.4

10.5

10.6

Second Amended and Restated Credit Agreement, dated March 27, 2019, by and among Jacobs Engineering Group Inc., certain of its
subsidiaries party thereto, the lenders party thereto and Bank of America, N.A., as administrative agent. Filed as Exhibit 10.1 to the
Registrant's Current Report on Form 8-K on March 28, 2019 and incorporated herein by reference.

Credit Agreement, dated as of September 28, 2017, among Jacobs Engineering Group Inc. and the lenders thereto, and BNP Paribas, as
administrative agent. Filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K on September 29, 2017 and incorporated herein
by reference.

First Amendment to Credit Agreement, dated as of November 30, 2018, among Jacobs Engineering Group Inc., the lenders party thereto and
BNP Paribas, as administrative agent. Filed as Exhibit 10.2 to the Registrant’s Current Report on Form 8-K on December 4, 2018 and
incorporated herein by reference.

Note Purchase Agreement, dated March 12, 2018, by and between Jacobs Engineering Group Inc. and the Purchasers identified therein.
Filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K on March 13, 2018, and incorporated herein by reference.

First Amendment to the Note Purchase Agreement, dated May 11, 2018, by and among Jacobs Engineering Group Inc. and the Purchasers
identified therein. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on May 15, 2018 and incorporated herein by reference.

Credit Agreement, dated as of March 25, 2020, among Jacobs Engineering Group Inc. and Jacobs U.K. Limited, as borrowers, the lenders
party thereto, Bank of America, N.A. as administrative agent, Bank of America, N.A., BNP Paribas and Wells Fargo Bank, N.A., as co-
syndication agents, The Bank of Nova Scotia, HSBC Bank USA, National Association, USA, PNC Bank, National Association, TD Bank, N.A.,
Truist Bank and U.S. Bank National Association, as co-documentation agents, and BofA Securities, Inc., BNP Paribas Securities Corp. and
Wells Fargo Securities, LLC, as joint lead arrangers and joint bookrunners. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form
8-K on March 27, 2020 and incorporated herein by reference.

Page 80

10.7#

10.8#

10.9#

Offer Letter by and between Jacobs Engineering Group Inc. and Steven J. Demetriou, dated July 10, 2015. Filed as Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K on July 16, 2015 and incorporated herein by reference.

Offer Letter by and between Jacobs Engineering Group Inc. and Kevin C. Berryman, effective November 12, 2014. Filed as Exhibit 99.1 to
Amendment No. 1 to the Registrant’s Current Report on Form 8-K/A on November 17, 2014 and incorporated herein by reference.

Offer letter by and between Jacobs Engineering Group Inc. and Robert V. Pragada, dated January 28, 2016. Filed as Exhibit 10.61 to the
Registrant’s fiscal 2016 Annual Report on Form 10-K and incorporated herein by reference.

10.10#

Offer letter by and between Jacobs Engineering Group Inc. and Michael Tyler dated May 28, 2013. Filed as Exhibit 10.2 to the Registrant’s
Quarterly Report on Form 10-Q for the third quarter of fiscal 2013 and incorporated herein by reference

10.11#

Offer letter by and between Jacobs Engineering Group Inc. and William Benton Allen, Jr. dated October 4, 2016. Filed as Exhibit 10.1 to the
Registrant’s Current Report on Form 8-K on October 14, 2016 and incorporated herein by reference.

10.12#

Offer Letter by and between Jacobs Engineering Group Inc. and Dawne Hickton, effective June 3, 2019. Filed as Exhibit 10.2 to the
Registrant’s Current Report on Form 10-Q on August 5, 2019 and incorporated herein by reference.

10.13#

Retirement Transition Agreement by and between Jacobs Engineering Group Inc. and Terence Hagen, dated as of June 6, 2019. Filed as
Exhibit 10.3 to the Registrant’s Current Report on Form 10-Q on August 5, 2019 and incorporated herein by reference.

10.14#

Form of Indemnification Agreement entered into between Jacobs Engineering Group Inc. and certain of its officers and directors. Filed as
Exhibit10.1 to the Registrant's Quarterly Report on Form 10-Q for the third quarter of fiscal 2012 and incorporated herein by reference.

10.15#

Jacobs Engineering Group Inc. 1989 Employee Stock Purchase Plan (as amended and restated on January 19, 2017). Filed as Exhibit
10.1 to the Registrant’s Current Report on Form 8-K on January 24, 2017 and incorporated herein by reference.

10.16#

Jacobs Engineering Group Inc. Global Employee Stock Purchase Plan (as amended and restated on January 19, 2017). Filed as Exhibit
10.2 to the Registrant’s Current Report on Form 8-K on January 24, 2017 and incorporated herein by reference.

10.17#

Jacobs Engineering Group Inc. Executive Deferral Plan, effective January 1, 2018. Filed as Exhibit 10.1 to the Registrant’s Current Report
on Form 8-K on October 2, 2017 and incorporated herein by reference.

10.18#

Jacobs Engineering Group Inc. Directors Deferral Plan, effective January 1, 2018. Filed as Exhibit 10.2 to the Registrant’s Current Report
on Form 8-K on October 2, 2017 and incorporated herein by reference.

10.19#

Jacobs Engineering Group Inc. 1999 Stock Incentive Plan, as amended and restated, effective January 18, 2018. Filed as Exhibit 10.10 to
the Registrant's Quarterly Report on Form 10-Q for the first quarter of fiscal 2018 and incorporated herein by reference.

10.20#

Jacobs Engineering Group Inc. 1999 Outside Director Stock Plan, as amended and restated. Filed as Exhibit 10.11 to the Registrant's
Quarterly Report on Form 10-Q for the first quarter of fiscal 2018 and incorporated herein by reference.

10.21#

Jacobs Engineering Group Inc. Executive Severance Plan, effective May 2, 2018. Filed as Exhibit 10.1 to the Registrant's Current Report on
Form 8-K on May 4, 2018 and incorporated herein by reference.

10.22#

10.23#

10.24#

Form of Restricted Stock Unit Agreement (with dividend equivalent rights) (awarded pursuant to the Jacobs Engineering Group Inc. 1999
Stock Incentive Plan). Filed as Exhibit 10.39 to the Registrant's fiscal 2017 Annual Report on Form 10-K and incorporated herein by
reference.

Form of Restricted Stock Unit Agreement (Performance Shares – Earnings Per Share Growth – 2017 Award) (awarded pursuant to the
Jacobs Engineering Group Inc. 1999 Stock Incentive Plan). Filed as Exhibit 10.45 to the Registrant's fiscal 2017 Annual Report on Form 10-
K and incorporated herein by reference.

Form of Restricted Stock Unit Agreement (Performance Shares – ROIC – 2017 Award) (awarded pursuant to the Jacobs Engineering Group
Inc. 1999 Stock Incentive Plan). Filed as Exhibit 10.46 to the Registrant's fiscal 2017 Annual Report on Form 10-K and incorporated herein
by reference.

Page 81

10.25#

Form of Restricted Stock Unit Agreement (Cash Settled Non-US Employees) (awarded pursuant to the Jacobs Engineering Group Inc. 1999
Stock Incentive Plan). Filed as Exhibit 10.48 to the Registrant’s fiscal 2015 Annual Report on Form 10-K and incorporated herein by
reference.

10.26#

Form of Restricted Stock Unit Award Agreement (awarded pursuant to the Jacobs Engineering Group Inc. 1999 Outside Directors Stock
Plan). Filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2017 and incorporated herein
by reference.

10.27#

10.28#

10.29#

10.30#

10.31#

10.32#

10.33#

10.34#

10.35#

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). Filed as Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the
first quarter of fiscal 2018 and incorporated herein by reference.

Form of Restricted Stock Unit Agreement (Performance Shares - ROIC - 2018 Award) (awarded pursuant to the Jacobs Engineering Group
Inc. 1999 Stock Incentive Plan). Filed as Exhibit 10.5 to the Registrant's Quarterly Report on Form 10-Q for the first quarter of fiscal 2018
and incorporated herein by reference.

Form of Restricted Stock Unit Agreement (Performance Shares - Earnings Per Share Growth - 2019 Award) (awarded pursuant to the
Jacobs Engineering Group Inc. 1999 Stock Incentive Plan). Filed as Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the
first quarter of fiscal 2018 filed February 6, 2019 and incorporated herein by reference.

Form of Restricted Stock Unit Agreement (Performance Shares - ROIC - 2019 Award) (awarded pursuant to the Jacobs Engineering Group
Inc. 1999 Stock Incentive Plan). Filed as Exhibit 10.4 to the Registrant's Quarterly Report on Form 10-Q for the first quarter of fiscal 2018
filed February 6, 2019 and incorporated herein by reference.

Form of Restricted Stock Unit Agreement (Time-Based Vesting) (awarded pursuant to the Jacobs Engineering Group Inc. 1999 Stock
Incentive Plan). Filed as Exhibit 10.6 to the Registrant's Quarterly Report on Form 10-Q for the first quarter of fiscal 2018 and incorporated
herein by reference.

Form of Restricted Stock Unit Agreement (awarded pursuant to the Jacobs Engineering Group, Inc. 1999 Outside Director Stock Plan).
Filed as Exhibit 10.7 to the Registrant's Quarterly Report on Form 10-Q for the first quarter of fiscal 2018 and incorporated herein by
reference.

Form of Restricted Stock Unit Agreement (Performance Shares – Earnings Per Share Growth – 2020 Award) (awarded pursuant to the
Jacobs Engineering Group Inc. 1999 Stock Incentive Plan). Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the
first quarter of fiscal 2020 and incorporated herein by reference.

Form of Restricted Stock Unit Agreement (Performance Shares – ROIC – 2020 Award) (awarded pursuant to the Jacobs Engineering Group
Inc. 1999 Stock Incentive Plan). Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the first quarter of fiscal 2020
and incorporated herein by reference.

Form of Restricted Stock Unit Agreement (Time-Based Vesting) (awarded pursuant to the Jacobs Engineering Group Inc. 1999 Stock
Incentive Plan). Filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the first quarter of fiscal 2020 and incorporated
herein by reference.

10.36

Transition Services Agreement, dated as of April 26, 2019, by and between Jacobs Engineering Group Inc. and WorleyParsons Limited.
Filed as Exhibit 10.1 to the Registrant's Current Report on Form 8-K on April 29, 2019 and incorporated herein by reference.

10.37# †

Jacobs Engineering Group Inc. Leadership Performance Plan, as amended and restated effective November 18, 2020.

21†

List of Subsidiaries of Jacobs Engineering Group Inc.

23†

Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.

31.1†

Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2†

Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

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.

Page 82

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.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

104†

XBRL Coverpage interactive data file

†

Being filed herewith.

Management contract or compensatory plan or arrangement.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be

signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Dated:

November 24, 2020

By:

JACOBS ENGINEERING GROUP INC.
/S/ Steven J. Demetriou
Steven J. Demetriou
Chair of the Board and Chief Executive Officer (Principal
Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf

of the Registrant and in the capacities and on the dates indicated:

Page 83

Signature

/S/ Steven J. Demetriou
Steven J. Demetriou
/S/ Joseph R. Bronson
Joseph R. Bronson
/S/ Vincent K. Brooks
Vincent K. Brooks
/S/ Robert C. Davidson, Jr.
Robert C. Davidson, Jr.
/S/ Ralph E. Eberhart
Ralph E. Eberhart
/S/ Manny Fernandez
Manny Fernandez
/S/ Georgette D. Kiser
Georgette D. Kiser
/S/ Linda Fayne Levinson
Linda Fayne Levinson
/S/ Barbara L. Loughran
Barbara L. Loughran
/S/ Robert A. McNamara
Robert A. McNamara
/S/ Peter J. Robertson
Peter J. Robertson
/S/ Christopher M.T. Thompson
Christopher M.T. Thompson

/S/ Kevin C. Berryman
Kevin C. Berryman

/S/ William B. Allen
William B. Allen

Title
Chair of the Board and Chief Executive Officer
(Principal Executive Officer)

Director

Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)

Date

November 24, 2020

Senior Vice President and Chief Accounting Officer
(Principal Accounting Officer)

November 24, 2020

Page 84

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

October 2, 2020

F-1

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

October 2, 2020

Consolidated Balance Sheets at October 2, 2020 and September 27, 2019

Consolidated Statements of Earnings for the Fiscal Years Ended October 2, 2020, September 27, 2019 and September 28,
2018

Consolidated Statements of Comprehensive Income for the Fiscal Years Ended October 2, 2020, September 27, 2019 and
September 28, 2018

Consolidated Statements of Stockholders’ Equity for the Fiscal Years Ended October 2, 2020, September 27, 2019 and
September 28, 2018

Consolidated Statements of Cash Flows for the Fiscal Years Ended October 2, 2020, September 27, 2019 and September 28,
2018

Notes to Consolidated Financial Statements

Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm

F-3

F-4

F-5

F-6

F-7

F-9

F-62

F-2

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)

October 2, 2020

September 27, 2019

ASSETS
Current Assets:

Cash and cash equivalents
Receivables and contract assets
Prepaid expenses and other
Investment in equity securities

Total current assets
Property, Equipment and Improvements, net
Other Noncurrent Assets:
Goodwill
Intangibles, net
Deferred income tax assets
Operating lease right-of-use assets
Miscellaneous

Total other noncurrent assets

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:

Short-term debt
Accounts payable
Accrued liabilities
Operating lease liability
Contract liabilities

Total current liabilities

Long-term debt
Liabilities relating to defined benefit pension and retirement plans
Deferred income tax liabilities
Long-term operating lease liability
Other deferred liabilities
Commitments and Contingencies
Stockholders’ Equity:
Capital stock:

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 - 129,747,783 shares and
132,879,395 shares as of October 2, 2020 and September 27, 2019, respectively

Additional paid-in capital
Retained earnings
Accumulated other comprehensive loss

Total Jacobs stockholders’ equity

Noncontrolling interests

Total Group stockholders’ equity

See the accompanying Notes to Consolidated Financial Statements.

F-3

862,424
3,167,310
162,355
347,510
4,539,599
319,371

5,639,091
658,340
211,047
576,915
409,990
7,495,383
12,354,353

—
1,061,754
1,249,883
164,312
465,648
2,941,597
1,676,941
568,176
3,366
735,202
573,404

631,068
2,840,209
189,358
451,133
4,111,768
308,143

5,432,544
665,076
514,633
—
430,547
7,042,800
11,462,711

199,901
1,072,645
1,386,952
—
414,208
3,073,706
1,201,245
575,897
233,111
—
610,094

—

129,748
2,598,446
4,020,575
(933,057)
5,815,712
39,955
5,855,667
12,354,353

132,879
2,559,450
3,939,174
(916,812)
5,714,691
53,967
5,768,658
11,462,711

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
For the Fiscal Years Ended October 2, 2020, September 27, 2019 and September 28, 2018
(In thousands, except per share information)

Revenues
Direct cost of contracts
Gross profit
Selling, general and administrative expenses
Operating Profit
Other Income (Expense):

Interest income
Interest expense
Miscellaneous (expense) income, net
Total other expense, net

Net Earnings (Loss) Attributable to Jacobs from Continuing Operations
Net Earnings Attributable to Noncontrolling Interests from Discontinued Operations
Net Earnings Attributable to Jacobs from Discontinued Operations

Net Earnings Attributable to Jacobs

Net Earnings (Loss) Per Share:

Basic Net Earnings (Loss) from Continuing Operations Per Share
Basic Net Earnings from Discontinued Operations Per Share

Basic Earnings Per Share

Diluted Net Earnings (Loss) from Continuing Operations Per Share
Diluted Net Earnings from Discontinued Operations Per Share

Diluted Earnings Per Share

October 2, 2020

13,566,975 $
(10,980,307)
2,586,668
(2,050,695)
535,973

September 27,
2019
12,737,868 $
(10,260,840)
2,477,028
(2,072,177)
404,851

September 28,
2018
10,579,773
(8,421,223)
2,158,550
(1,771,107)
387,443

4,729
(62,206)
(37,293)
(94,770)
441,203
(55,320)
385,883
137,984
523,867
(32,022)
353,861

9,487
(83,847)
20,468
(53,892)
350,959
(36,954)
314,005
559,214
873,219
(23,045)
290,960

—
137,984
491,845 $

(2,195)
557,019
847,979 $

2.69 $
1.05 $
3.74 $

2.67 $
1.04 $
3.71 $

2.11 $
4.03 $
6.14 $

2.09 $
4.00 $
6.08 $

8,984
(76,760)
11,314
(56,462)
330,981
(325,632)
5,349
167,793
173,142
(9,534)
(4,185)

(177)
167,616
163,431

(0.03)
1.21
1.18

$
$
$

See the accompanying Notes to Consolidated Financial Statements.

F-4

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Fiscal Years Ended October 2, 2020, September 27, 2019 and September 28, 2018
(In thousands)

Net Earnings of the Group
Other Comprehensive Income (Loss):

Foreign currency translation adjustment
Gain (loss) on cash flow hedges
Change in pension and retiree medical plan liabilities
Other comprehensive income (loss) before taxes

Income Tax (Expense) Benefit:

Foreign currency translation adjustment
Cash flow hedges
Change in pension and retiree medical plan liabilities

Income Tax (Expense) Benefit:
Net other comprehensive income (loss)
Net Comprehensive Income (Loss) of the Group
Net (Earnings) Loss Attributable to Noncontrolling Interests

Net Comprehensive Income (Loss) Attributable to Jacobs

October 2, 2020

523,867 $

September 27, 2019 September 28, 2018
173,142

873,219 $

64,052
(21,883)
(75,334)
(33,165)

(3,722)
7,285
13,357
16,920
(16,245)
507,622
(32,022)
475,600 $

15,972
1,369
(157,632)
(140,291)

—
(568)
30,750
30,182
(110,109)
763,110
(25,240)
737,870 $

(109,877)
118
(27,231)
(136,990)

—
859
(17,058)
(16,199)
(153,189)
19,953
(9,711)
10,242

See the accompanying Notes to Consolidated Financial Statements including the Company's note on
Other Financial Information for a presentation of amounts reclassified to net income during the period.

F-5

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Fiscal Years Ended October 2, 2020, September 27, 2019 and September 28, 2018
(In thousands)

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other Comprehensive
Income
(Loss)

Total Jacobs
Stockholders’
Equity

Noncontrolling
Interests

Total Group
Stockholders’
Equity

3,721,698 $
163,431
—

(653,514)
—
(109,877)

4,428,352
163,431
(109,877)

58,999
9,711
—

Balances at September 29, 2017

120,386 $

1,239,782 $

Net earnings
Foreign currency translation adjustments
Pension and retiree medical plan liability, net of deferred
taxes of $17,058
Gain on derivatives, net of deferred taxes of $(859)
Noncontrolling interest acquired / consolidated
Dividends
Distributions to noncontrolling interests
Stock based compensation
Issuances of equity securities
Repurchases of equity securities

—
—

—
—
—
—
—
—
21,881
(49)

—
—

—
—
3,456
—
—
81,196
1,385,316
(911)

Balances at September 28, 2018

142,218 $

2,708,839 $

10,160
—
—
(85,608)
7,705
(1,954)
(3,420)
(2,021)

(44,289)
977
—
—
—
—
—
—

3,809,991 $
847,979

(806,703)
—

Net earnings
Disposition of ECR business, net of deferred taxes of
$5,402
Adoption of ASC 606, net of deferred taxes of $(10,825)
Foreign currency translation adjustments
Pension and retiree medical plan liability, net of deferred
taxes of $25,348
Gain on derivatives, net of deferred taxes of $568
Noncontrolling interest acquired /
consolidated
Dividends
Distributions to noncontrolling interests
Stock based compensation
Issuances of equity securities including shares withheld
for taxes
Repurchases of equity securities

—

—
—
—

—
—

—
—
—
—

—

—
—
—

—
—

(1,113)
—
—
69,128

—
(37,209)
—

—
—

—
(92,980)
—
9

1,681
(11,020)

43,508
(260,912)

(6,872)
(581,744)

112,764
—
(84,456)

(139,218)
801

—
—
—
—

—
—

Balances at September 27, 2019

132,879 $

2,559,450 $

Net earnings
Foreign currency translation adjustments, net of deferred
taxes of $3,722
Pension and retiree medical plan liability, net of deferred
taxes of $(13,357)
(Loss) Gain on derivatives, net of deferred taxes of
$(7,285)
Dividends
Noncontrolling interests - distributions and other
Stock based compensation
Issuances of equity securities including shares withheld
for taxes
Repurchases of equity securities

—

—
—
—
—

998
(4,129)

—

—
—
5,002
47,048

17,890
(30,944)

3,939,174 $
491,845

(916,812)
—

—

—
(99,921)
—
1,102

(9,447)
(302,178)

60,330

(61,977)

(14,598)
—
—
—

—
—

(14,598)
(99,921)
5,002
48,150

9,441
(337,251)

(34,129)
977
3,456
(85,608)
7,705
79,242
1,403,777
(2,981)

5,854,345
847,979

112,764
(37,209)
(84,456)

(139,218)
801

(1,113)
(92,980)
—
69,137

38,317
(853,676)

5,714,691
491,845

—
—
33,690
—
(12,391)
—
—
—

90,009
25,240

(45,727)
—
—

—
—

—
—
(15,555)
—

—
—

53,967
32,022

—

—
—
(46,034)
—

4,487,351
173,142
(109,877)

(34,129)
977
37,146
(85,608)
(4,686)
79,242
1,403,777
(2,981)

5,944,354
873,219

67,037
(37,209)
(84,456)

(139,218)
801

(1,113)
(92,980)
(15,555)
69,137

38,317
(853,676)

5,768,658
523,867

60,330

(61,977)

(14,598)
(99,921)
(41,032)
48,150

—
—

9,441
(337,251)

Balances at October 2, 2020

129,748 $

2,598,446 $

4,020,575 $

(933,057)

5,815,712

39,955

5,855,667

See the accompanying Notes to Consolidated Financial Statements.

F-6

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Fiscal Years Ended October 2, 2020, September 27, 2019 and September 28, 2018
(In thousands)

Cash Flows from Operating Activities:

Net earnings attributable to the Group
Adjustments to reconcile net earnings to net cash flows provided by (used for) operations:
Depreciation and amortization:

Property, equipment and improvements
Intangible assets

Gain on sale of ECR business

Loss on disposal of other businesses and investments
Loss on investment in equity securities
Stock based compensation
Equity in earnings of operating ventures, net of return on capital distributions
Loss on disposals of assets, net
Impairment of long-lived assets
Loss (Gain) on pension and retiree medical plan changes
Deferred income taxes

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

Receivables and contract assets, net of contract liabilities
Prepaid expenses and other current assets
Accounts payable
Income taxes payable
Accrued liabilities
Other deferred liabilities

Other, net

Net cash provided by (used for) operating activities

Cash Flows from Investing Activities:

Additions to property and equipment
Disposals of property and equipment and other assets
Capital contributions to equity investees, net of return of capital distributions
Acquisitions of businesses, net of cash acquired
Disposals of investment in equity securities
(Payments) proceeds related to sales of businesses

Purchases of noncontrolling interests

Net cash (used for) provided by investing activities

Cash Flows from Financing Activities:

Proceeds from long-term borrowings
Repayments of long-term borrowings
Proceeds from short-term borrowings
Repayments of short-term borrowings
Debt issuance costs
Proceeds from issuances of common stock
Common stock repurchases
Taxes paid on vested restricted stock
Cash dividends, including to noncontrolling interests

Net cash (used for) provided by financing activities

Effect of Exchange Rate Changes

Net Increase (Decrease) in Cash and Cash Equivalents
Cash and Cash Equivalents at the Beginning of the Period

Cash and Cash Equivalents at the End of the Period

Less Cash and Cash Equivalents included in Assets held for Sale

Cash and Cash Equivalents of Continuing Operations at the End of the Period

October 2, 2020

September 27, 2019

September 28, 2018

523,867

873,219

173,142

91,070
90,563
(110,236)
—
103,623
48,150
9,172
766
162,238
4,598
82,275

(107,784)
(27,280)
(92,838)
35,194
(27,849)
(64,390)
85,710

806,849

(118,269)
96
(12,278)
(293,580)
—
(5,061)
—

(429,092)

2,986,661
(2,521,467)
78
(200,008)
(1,807)
37,235
(337,251)
(27,794)
(143,962)

(208,315)

61,914

231,356
631,068

862,424

—

90,171
79,098
(935,110)
9,608
78,108
69,137
(8,784)
6,222
—
(33,087)
(105,939)

(67,894)
(13,117)
295,146
(294,995)
(305,716)
(106,256)
3,753

(366,436)

(135,977)
7,177
(8,761)
(575,110)
64,708
2,801,425
(1,113)

2,152,349

2,782,193
(3,996,970)
200,001
(28,566)
(3,915)
64,958
(853,676)
(26,641)
(106,396)

(1,969,012)

20,809

(162,290)
793,358

631,068

—

862,424

631,068

117,856
80,731
—
20,967
—
79,242
(2,639)
17,491
—
5,414
288,126

(428,930)
(19,134)
183,057
68,970
(37,746)
(79,280)
13,885

481,152

(94,884)
3,293
(5,416)
(1,488,336)
—
7,736
—

(1,577,607)

5,784,355
(4,572,182)
712
(3,391)
—
53,584
(2,981)
(31,108)
(86,569)

1,142,420

(26,758)

19,207
774,151

793,358

(158,488)

634,870

See the accompanying Notes to Consolidated Financial Statements.

F-7

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Description of Business and Basis of Presentation

Description of Business

Jacobs is a leading global professional services company that designs and deploys technology-centric solutions to solve many of the

world’s most complex challenges. We operate in two lines of business: Critical Mission Solutions and People & Places Solutions.

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, Europe, the Middle East, India, Australia, New Zealand
and Asia. We provide our services under cost-reimbursable and fixed-price contracts, with our fixed-price contracts comprised mainly of professional
services arrangements and in some limited cases, construction. The percentage of revenues realized from each of these types of contracts for the
fiscal years ended October 2, 2020, September 27, 2019 and September 28, 2018 was as follows:

Cost-reimbursable
Fixed-price

October 2, 2020
76%
24%

For the Years Ended
September 27, 2019
76%
24%

September 28, 2018
74%
26%

Basis of Presentation, Definition of Fiscal Year, and Other Matters

The accompanying Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in
the United States ("U.S. GAAP") and include the accounts of Jacobs Engineering Group Inc. and its subsidiaries and affiliates which it controls. All
intercompany accounts and transactions have been eliminated in consolidation. Certain prior year balances have been reclassified to conform to
current year presentation.

The Company’s fiscal year ends on the Friday closest to September 30 (determined on the basis of the number of workdays) and,

accordingly, an additional week of activity is added every five-to-six years. Fiscal 2020 included an extra week of activity.

Effective the beginning of fiscal first quarter 2020, the Company adopted ASU 2016-02, Leases ("ASC 842"), including the subsequent

ASU's that amended and clarified the related guidance. The Company adopted ASC 842 using a modified retrospective approach, and accordingly
the new guidance was applied to leases that existed or were entered into after the first day of adoption without adjusting the comparative periods
presented. Please refer to Note 10- Leases for a discussion of our updated policies and disclosures related to leases.

Effective the beginning of fiscal first quarter 2019, the Company adopted ASC Topic 606, Revenue from Contracts with Customers,
including the subsequent ASUs that amended and clarified the related guidance. The Company adopted ASC Topic 606 using the modified
retrospective method, and accordingly the new guidance was applied retrospectively to contracts that were not completed or substantially completed
as of September 29, 2018 (the date of initial application). Please refer to Note 3- Revenue Accounting for Contracts.

On March 6, 2020, a subsidiary of Jacobs completed the acquisition of the nuclear consulting, remediation and program management
business of John Wood Group, a U.K.-based energy services company, for an enterprise value of £246 million, or approximately $317.9 million, less
cash acquired of $24.3 million. The Company has recorded its preliminary purchase price allocation associated with the acquisition, which is
summarized in Note 14- Business Combinations.

On June 12, 2019, Jacobs completed the acquisition of The KeyW Holding Corporation (“KeyW”), a U.S.-based national security solutions

provider to the intelligence, cyber, and counterterrorism communities by acquiring 100% of the outstanding shares of KeyW common stock. The
Company paid total consideration of $902.6 million which was comprised of approximately $604.2 million in cash to the former stockholders and
certain equity award holders of KeyW and the assumption of KeyW’s debt of approximately $298.4 million. The Company repaid all of the assumed

F-8

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

KeyW debt by the end of the fourth fiscal quarter of 2019. The Company has recorded its final purchase price allocation associated with the
acquisition, which is summarized in Note 14- Business Combinations.

On April 26, 2019, Jacobs completed the sale of its Energy, Chemicals and Resources ("ECR") business to Worley Limited, a company
incorporated in Australia ("Worley"), for a purchase price of $3.4 billion consisting of (i) $2.8 billion in cash plus (ii) 58.2 million ordinary shares of
Worley, subject to adjustments for changes in working capital and certain other items (the “ECR sale”). As a result of the ECR sale, substantially all
ECR-related assets and liabilities have been 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 Consolidated Statements
of Earnings as discontinued operations for all periods presented. As of the year ended September 27, 2019, a portion of the ECR business
remained held by Jacobs and continued to be classified as held for sale in accordance with U.S. GAAP. As of October 2, 2020, all of the ECR
business to be sold under the terms of the sale has been conveyed to Worley and as such, no amounts remain held for sale. For further discussion
see Note 15- Sale of Energy, Chemicals and Resources ("ECR") Business to the consolidated financial statements.

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
Company paid total consideration of approximately $1.8 billion in cash (excluding $315.2 million of cash acquired) 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 $20.0 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 Company has finalized its purchase accounting
processes associated with the acquisition, which is summarized in Note 14- Business Combinations.

Significant Accounting Policies

Revenue Accounting for Contracts

Engineering, Procurement & Construction Contracts and Service Contracts

On September 29, 2018, the Company adopted ASC Topic 606, Revenue from Contracts with Customers, including the subsequent ASUs
that amended and clarified the related guidance. The Company recognizes engineering, procurement, and construction contract revenue over time,
as performance obligations are satisfied, due to the continuous transfer of control to the customer. Upon adoption of ASC Topic 606, contracts
which include engineering, procurement and construction services are generally accounted for as a single deliverable (a single performance
obligation) and are no longer segmented between types of services. In some instances, the Company’s services associated with a construction
activity are limited to specific tasks such as customer support, consulting or supervisory services. In these instances, the services are typically
identified as separate performance obligations.

The Company recognizes revenue using the percentage-of-completion method, based primarily on contract costs incurred to date

compared to total estimated contract costs. The percentage-of-completion method (an input method) is the most representative depiction of the
Company’s performance because it directly measures the value of the services transferred to the customer. Subcontractor materials, labor and
equipment and, in certain cases, customer-furnished materials and labor and equipment are included in revenue and cost of revenue when
management believes that the company is acting as a principal rather than as an agent (e.g., the company integrates the materials, labor and
equipment into the deliverables promised to the customer or is otherwise primarily responsible for fulfillment and acceptability of the materials, labor
and/or equipment). The Company recognizes revenue, but not profit, on certain uninstalled materials that are not specifically produced, fabricated,
or constructed for a project. Revenue on these uninstalled materials is recognized when control is transferred. Changes to total estimated contract
cost or losses, if any, are recognized in the period in which they are determined as assessed at the contract level. Pre-contract costs are expensed
as incurred unless they are expected to be recovered from the client. Project mobilization costs are generally charged to project costs as incurred
when they are an integrated part of the performance obligation being transferred to the client. Under the typical payment terms of our engineering,
procurement and construction contracts, amounts are billed as work progresses in accordance with agreed-upon contractual terms at periodic
intervals (e.g., biweekly or monthly) and customer payments are typically due within 30 to 60 days of billing, depending on the contract.

F-9

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

For service contracts, the Company recognizes revenue over time using the cost-to-cost percentage-of-completion method. Service

Direct costs of contracts include all costs incurred in connection with and directly for the benefit of client contracts, including depreciation

Back charges to suppliers or subcontractors are recognized as a reduction of cost when it is determined that recovery of such cost is probable
and the amounts can be reliably estimated. Disputed back charges are recognized when the same requirements described above have been
satisfied.

Variable Consideration

The Company generally provides limited warranties for work performed under its engineering and construction contracts. The warranty

Practical Expedient

See Note 3- Revenue Accounting for Contracts for further discussion.

F-10

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Joint Ventures and VIEs

As is common to the industry, we execute certain contracts jointly with third parties through various forms of joint ventures. Although the

Most of the joint ventures are deemed to be variable interest entities (“VIE”) because they lack sufficient equity to finance the activities of the

joint venture. The Company uses a qualitative approach to determine if the Company is the primary beneficiary of the VIE, which considers factors
that indicate a party has the power to direct the activities that most significantly impact the joint venture’s economic performance. These factors
include the composition of the governing board, how board decisions are approved, the powers granted to the operational manager(s) and partner
that holds that position(s), and to a certain extent, the partner’s economic interest in the joint venture. The Company analyzes each joint venture
initially to determine if it should be consolidated or unconsolidated.

•

Consolidated if the Company is the primary beneficiary of a VIE, or holds the majority of voting interests of a non-VIE (and no
significant participative rights are available to the other partners).
Unconsolidated if the Company is not the primary beneficiary of a VIE, or does not hold the majority of voting interest of a non-VIE.

Our unconsolidated joint ventures (including equity method investments) are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of the investment might not be recoverable, and impairment losses are recognized for such
investments if there is a decline in fair value below carrying value that is considered to be other-than-temporary.

See Note 8- Joint Ventures and VIEs for further discussion.

Fair Value Measurements

Certain amounts included in the accompanying consolidated financial statements are presented at “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.

F-11

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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

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

the short-term nature of these instruments. See Note 9- Borrowings for a discussion of the fair value of long-term debt.

Certain other assets and liabilities, such as forward contracts and interest rate swap agreements we purchased as cash-flow hedges

discussed in Note 17- Commitments and Contingencies and Derivative Financial Instruments and the Company's investment in Worley ordinary
shares discussed in Note 15- Sale of Energy, Chemicals and Resources are required to be carried in our Consolidated Financial Statements at Fair
Value.

The fair value of the Company’s reporting units (used for purposes of determining whether there is an indication of possible impairment of

the carrying value of goodwill) is determined using an income and market approach. Both approaches require us to make certain estimates and
judgments. Under the income approach, fair value is determined by using the discounted cash flows of our reporting units. Under the market
approach, the fair values of our reporting units are determined by reference to guideline companies that are reasonably comparable to our reporting
units; the fair values are estimated based on the valuation multiples of the invested capital associated with the guideline companies. In assessing
whether there is an indication that the carrying value of goodwill has been impaired, we utilize the results of both valuation techniques and consider
the range of fair values indicated.

With respect to equity-based compensation (i.e., share-based payments), we estimate the fair value of stock options granted to employees

and directors using the Black-Scholes option-pricing model. Like all option-pricing models, the Black-Scholes model requires the use of subjective
assumptions including (i) the expected volatility of the market price of the underlying stock, and (ii) the expected term of the award, among others.
Accordingly, changes in assumptions and any subsequent adjustments to those assumptions can cause different fair values to be assigned to our
future stock option awards. For restricted stock awards (including restricted stock units) containing market conditions, compensation expense is
based on the fair value of such awards using a Monte Carlo simulation. For restricted stock awards (including restricted stock units) containing
service and performance conditions, compensation expense is based on the closing stock price on the date of grant.

The fair values of the assets owned by the various pension plans that the Company sponsors are determined based on the type of asset,
consistent with U.S. GAAP. Equity securities are valued by using market observable data such as quoted prices. Publicly traded corporate equity
securities are valued at the last reported sale price on the last business day of the year. Securities not traded on the last business day are valued at
the last reported bid price. Fixed income investment funds categorized as Level 2 are valued by the trustee using pricing models that use verifiable
observable market data (e.g., interest rates and yield curves observable at commonly quoted intervals), bids provided by brokers or dealers, or
quoted prices of securities with similar characteristics. Real estate consists primarily of common or collective trusts, with underlying investments in
real estate. These investments are valued using the best information available, including quoted market price, market prices for similar assets when
available, internal cash flow estimates discounted at an appropriate interest rate, or independent appraisals, as appropriate. Management values
insurance contracts and hedge funds using actuarial assumptions and certain values reported by fund managers.

The methodologies described above and elsewhere in these Notes to Consolidated Financial Statements may produce a fair value measure

that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods
are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of
certain financial instruments could result in a different fair value measurement.

Cash Equivalents

We consider all highly liquid investments with original maturities of less than three months to be cash equivalents. Cash equivalents at

October 2, 2020 and September 27, 2019 consisted primarily of money market mutual funds and overnight bank deposits.

Receivables, Contract Assets and Contract Liabilities

Receivables include amounts billed, net and unbilled receivables. 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.

F-12

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Unbilled receivables and other, which represent an unconditional right to payment subject only to the passage of time in connection with our

client contracts, are reclassified to amounts billed when they are billed under the terms of the contract. Prior to adoption of ASC 606, receivables
related to contractual milestones or achievement of performance-based targets were included in unbilled receivables. These are now included in
contract assets. 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 more than merely the passage of time and includes

performance-based incentives and services provided ahead 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.

Contract liabilities represent amounts billed to clients in excess of revenue recognized to date. We anticipate that substantially all such

amounts will be earned over the next twelve months.

In order to manage short-term liquidity and credit exposure, Jacobs may sell current customer receivables to third parties. When Jacobs

sells customer receivables to third parties it accelerates the receipt of cash that would otherwise have been collected from customers and records
these transactions as reductions to the receivable amounts. Jacobs does not maintain continuing involvement in these arrangements.

Property, Equipment, and Improvements

Property, equipment and improvements are carried at cost, and are shown net of accumulated depreciation and amortization in the

accompanying Consolidated Balance Sheets. Depreciation and amortization is computed primarily by using the straight-line method over the
estimated useful lives of the assets. The cost of leasehold improvements is amortized using the straight-line method over the lesser of the estimated
useful life of the asset or the remaining term of the related lease. Estimated useful lives range from 20 to 40 years for buildings, from 3 to 10 years
for equipment and from 4 to 10 years for leasehold improvements.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquired business over the fair value of the net tangible and intangible assets acquired.

Goodwill and intangible assets with indefinite lives are not amortized; instead, on an annual basis we test goodwill and intangible assets with
indefinite lives for possible impairment. Intangible assets with finite lives are amortized on a straight-line basis over the useful lives of those assets.

Interim testing for impairment is performed if indicators of potential impairment exist. For purposes of impairment testing, goodwill is

assigned to the applicable reporting units based on the current reporting structure. We have determined that our operating segments are also our
reporting units based on management’s conclusion that the components comprising each of our operating segments share similar economic
characteristics and meet the aggregation criteria in accordance with ASC 350.

When testing goodwill for impairment quantitatively, the Company first compares the fair value of each reporting unit with its carrying
amount. If the carrying amount of a reporting unit exceeds its fair value, a second step is performed to measure the amount of potential impairment.
In the second step, the Company compared the implied fair value of the reporting unit goodwill with the carrying amount of the reporting unit's
goodwill. If the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized. During
2020, we completed our annual goodwill impairment test and quantitatively determined that none of our goodwill was impaired. We have determined
that the fair value of our reporting units substantially exceeded their respective carrying values for the Consolidated Balance Sheets presented.

Impairment of Long-Lived Assets

Our long-lived assets other than goodwill principally consist of right-of-use lease assets, property, equipment and improvements, and finite-

F-13

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Foreign Currencies

In preparing our Consolidated Financial Statements, it is necessary to translate the financial statements of our subsidiaries operating
outside the U.S., which are denominated in currencies other than the U.S. dollar, into the U.S. dollar. In accordance with U.S. GAAP, revenues and
expenses of operations outside the U.S. are translated into U.S. dollars using weighted-average exchange rates for the applicable periods being
translated while the assets and liabilities of operations outside the U.S. are generally translated into U.S. dollars using period-end exchange rates.
The net effect of foreign currency translation adjustments is included in stockholders’ equity as a component of accumulated other comprehensive
income (loss) in the accompanying Consolidated Balance Sheets.

Share-Based Payments

We measure the value of services received from employees and directors in exchange for an award of an equity instrument based on the

grant-date fair value of the award. The computed value is recognized as a non-cash cost on a straight-line basis over the period the individual
provides services, which is typically the vesting period of the award with the exception of awards containing an internal performance measure, such
as Earnings Per Share growth and Return on Invested Capital, which is recognized on a straight-line basis over the vesting period subject to the
probability of meeting the performance requirements and adjusted for the number of shares expected to be earned. The cost of these awards is
recorded in selling, general and administrative expense in the accompanying Consolidated Statements of Earnings.

Concentrations of Credit Risk

Our cash balances and cash equivalents are maintained in accounts held by major banks and financial institutions located in North America,

South America, Europe, the Middle East, India, Australia, Africa and Asia. In the normal course of business, and consistent with industry practices,
we grant credit to our clients without requiring collateral. Concentrations of credit risk is the risk that, if we extend a significant amount of credit to
clients in a specific geographic area or industry, we may experience disproportionately high levels of default if those clients are adversely affected by
factors particular to their geographic area or industry. Concentrations of credit risk relative to trade receivables are limited due to our diverse client
base, which includes the U.S. federal government and multi-national corporations operating in a broad range of industries and geographic areas.
Additionally, in order to mitigate credit risk, we continually evaluate the credit worthiness of our major commercial clients.

Leases

On September 28, 2019 the Company adopted ASU 2016-02, Leases ("ASC 842"), along with ASU 2018-01, ASU 2018-10, ASU 2018-11,
ASU 2018-20 and ASU 2019-01, which amended and clarified the related guidance. ASC 842 requires lessees to recognize assets and liabilities for
most leases. The Company determines if an arrangement is a lease at contract inception. A lease exists when a contract conveys to the customer
the right to control the use of an identified asset for a period of time in exchange for consideration. The definition of a lease embodies two
conditions: (1) there is an identified asset in the contract, and (2) the customer has the right to control the use of the identified asset. Lessees are
required to classify leases as either finance or operating leases. This classification will determine whether lease expense is recognized based on an
effective interest method or on a straight-line basis over the term of the lease.

ASC 842 provided several optional practical expedients for use in transition to and ongoing application of ASC 842. The Company elected
to utilize the package of practical expedients in ASC 842-10-65-1(f) that, upon adoption of ASC 842, allows entities to (1) not reassess whether any
expired or existing contracts are or contain leases, (2) retain the classification of leases (e.g., operating or finance lease) existing as of the date of
adoption and (3) not reassess initial direct costs for any existing leases. The Company did not elect the practical expedient pertaining to the use of
hindsight. The Company elected to utilize the practical expedient in ASC 842-10-15-37 in which the Company has chosen to account for each
separate lease component of a contract and its associated non-lease components as a single lease component.

The Company adopted ASC 842 using the modified retrospective method, and accordingly, the new guidance was applied to leases that

existed as of September 28, 2019 (the date of initial application) without adjusting the comparative periods presented. As a result, as of September
28, 2019, the Company has recorded total right-of-use ("ROU") assets of $767.0 million, which is comprised of approximately $82.3 million in
reclassifications of previously recorded lease incentives and deferred rent, offset by $141.4 million in restructured lease cease-use liability.

F-14

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Additionally, the Company has recorded total current lease liabilities of $180.7 million, and total noncurrent lease liabilities of $810.1 million. The
adoption of ASC 842 did not have a material impact on the Company’s results of operations or any impact on the Company’s cash flows.

The Company’s right-of use assets and lease liabilities relate to real estate, project assets used in connection with long-term construction

contracts, IT assets and vehicles. The Company’s leases have remaining lease terms of one year to thirteen years. The Company’s lease
obligations are primarily for the use of office space and are primarily operating leases. Certain of the Company’s leases contain renewal, extension,
or termination options. The Company assesses each option on an individual basis and will only include options reasonably certain of exercise in the
lease term. The Company generally considers the base term to be the term provided in the contract. None of the Company’s lease agreements
contain material options to purchase the leased property, material residual value guarantees, or material restrictions or covenants.

Long-term project asset and vehicle leases (leases with terms greater than twelve months), along with all real estate and IT asset leases,

are recorded on the consolidated balance sheet at the present value of the minimum lease payments not yet paid. Because the Company primarily
acts as a lessee and the rates implicit in its leases are not readily determinable, the Company generally uses its incremental borrowing rate on the
lease commencement date to calculate the present value of future lease payments. Certain leases include payments that are based solely on an
index or rate. These variable lease payments are included in the calculation of the ROU asset and lease liability and are initially measured using the
index or rate at the lease commencement date. Other variable lease payments, such as payments based on use and for property taxes, insurance,
or common area maintenance that are based on actual assessments are excluded from the ROU asset and lease liability and are expensed as
incurred. In addition to the present value of the future lease payments, the calculation of the ROU asset also includes any deferred rent, lease pre-
payments and initial direct costs of obtaining the lease, such as commissions.

Certain lease contracts contain nonlease components such as maintenance and utilities. The Company has made an accounting policy

election, as allowed under ASC 842-10-15-37 and discussed above, to capitalize both the lease component and nonlease components of its
contracts as a single lease component for all of its right-of-use assets.

Short-term project asset and vehicle leases (project asset and vehicle leases with an initial term of twelve months or less or leases that are

cancellable by the lessee and lessor without significant penalties) are not recorded on the consolidated balance sheet and are expensed on a
straight-line basis over the lease term. The majority of the Company’s short-term leases relate to equipment used on construction projects. These
leases are entered into at agreed upon hourly, daily, weekly or monthly rental rates for an unspecified duration and typically have a termination for
convenience provision. Such equipment leases are considered short-term in nature unless it is reasonably certain that the equipment will be leased
for a term greater than twelve months.

Pensions

We use certain assumptions and estimates in order to calculate periodic pension cost and the value of the assets and liabilities of our

pension plans. These assumptions involve discount rates, investment returns and projected salary increases, among others. Changes in the
actuarial assumptions may have a material effect on the plans’ liabilities and the projected pension expense.

We use a corridor approach to amortize actuarial gains and losses. Under this approach, net gains or losses in excess of ten percent of the
larger of the pension benefit obligation or the market-related value of the assets are amortized on a straight-line basis. The period of amortization is
the average remaining service of active participants who are expected to receive benefits under certain plans and the average remaining future
lifetime of plan participants for certain plans.

We measure our defined benefit plan assets and obligations as of the end of the month closest to their fiscal year end, which is September

30, 2020 as the alternative measurement date in accordance with FASB guidance ASU 2015-04, Compensation Retirement Benefit (Topic 715):
Practical Expedient for the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Asset. This guidance allows employers with
fiscal year ends that do not coincide with a calendar month end to make an accounting policy election to measure defined benefit plan assets and
obligations as of the end of the month closest to their fiscal year end.

F-15

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Income Taxes

We determine our consolidated income tax expense using the asset and liability method prescribed by U.S. GAAP. Under this method,

deferred tax assets and liabilities are recognized for the temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and income tax purposes. Such deferred tax assets and liabilities are adjusted, as appropriate, to reflect changes in tax rates
expected to be in effect when the temporary differences reverse. If and when we determine that a deferred tax asset will not be realized for its full
amount, we will recognize and record a valuation allowance with a corresponding charge to earnings. Judgment is required in determining our
provision for income taxes. In the normal course of business, we may engage in numerous transactions every day for which the ultimate tax
outcome (including the period in which the transaction will ultimately be included in taxable income or deducted as an expense) is uncertain.
Additionally, we file income, franchise, gross receipts and similar tax returns in many jurisdictions. Our tax returns are subject to audit and
investigation by the Internal Revenue Service, most states in the U.S., and by various government agencies representing many jurisdictions outside
the U.S.

Contractual Guarantees, Litigation, Investigations and Insurance

In the normal course of business we are subject to certain contractual guarantees and litigation. We record in the Consolidated Balance
Sheets amounts representing our estimated liability relating to such guarantees, litigation and insurance claims. Guarantees are accounted for in
accordance with ASC 460-10, Guarantees, at fair value at the inception of the guarantee. We perform an analysis to determine the level of reserves
to establish for both insurance-related claims that are known and have been asserted against us as well as 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 Statements of Earnings. In addition, as a contractor
providing services to various agencies of the U.S. federal government, we are subject to many levels of audits, investigations, and claims by, or on
behalf of, the U.S. federal government with respect to contract performance, pricing, costs, cost allocations and procurement practices. We adjust
revenues based upon the amounts we expect to realize considering the effects of any client audits or governmental investigations.

Business Combinations

U.S. GAAP requires that the purchase price paid for business combinations accounted for using the acquisition method be allocated to the

assets and liabilities acquired based on their respective Fair Values. Determining the Fair Value of contract assets and liabilities acquired often
requires estimates and judgments regarding, among other things, the estimated cost to complete such contracts. The Company must also make
certain estimates and judgments relating to other assets and liabilities acquired as well as any identifiable intangible assets acquired.

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 financial statements; and
certain amounts disclosed in these Notes to the Consolidated Financial Statements. Although such estimates and assumptions are based on
management’s most recent assessment of the underlying facts and circumstances utilizing the most current information available and past
experience, actual results could differ significantly from those estimates and assumptions. Our estimates, judgments and assumptions are evaluated
periodically and adjusted accordingly.

New Accounting Pronouncements

ASU 2017-04, Simplifying the Test for Goodwill Impairment, is effective for fiscal years beginning after December 15, 2019 with early
adoption permitted. ASU 2017-04 removes the second step of the goodwill impairment test, which requires a hypothetical purchase price allocation.
An entity will now recognize a goodwill impairment charge for the amount by which a reporting unit's carrying value exceeds its fair value, not to
exceed the amount of goodwill allocated to the reporting unit. Management does not expect the adoption of ASU 2017-04 to have any impact on the
Company's financial position, results of operations or cash flows.

F-16

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments requires

F-17

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

3. 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 process, scientific, and systems consulting
services. We provide our services through offices and subsidiaries located primarily in North America, South 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 19- 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 years ended October 2, 2020, September 27, 2019 and

September 28, 2018 (in thousands):

Revenues:
United States
Europe
Canada
Asia
India
Australia and New Zealand
South America and Mexico
Middle East and Africa

Total

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

10,158,508 $
2,253,284
227,067
117,698
50,618
537,076
11
222,713
13,566,975 $

9,006,730 $
2,242,976
213,172
195,023
62,543
533,251
7,416
476,757
12,737,868 $

6,908,988
2,495,805
189,865
163,761
52,533
578,108
17,656
173,057
10,579,773

The following table presents the revenues earned directly or indirectly from the U.S. federal government and its agencies, expressed as a
percentage of total revenues:

October 2, 2020
33%

Contract Liabilities

For the Years Ended
September 27, 2019
27%

September 28, 2018
32%

Contract liabilities represent amounts billed to clients in excess of revenue recognized to date. Revenue recognized for the year ended
October 2, 2020 that was included in the contract liability balance on September 27, 2019 was $410.0 million. Revenue recognized for the year
ended September 27, 2019 that was included in the contract liability balance on September 28, 2018 was $350.3 million.

Remaining Performance Obligations

The Company’s remaining performance obligations as of October 2, 2020 represent a measure of the total dollar value of work to be
performed on contracts awarded and in progress. The Company had approximately $14.6 billion in remaining performance obligations as of
October 2, 2020. The Company expects to recognize 50% of our remaining performance obligations within the next twelve months and the
remaining 50% thereafter.

Although remaining performance obligations reflect business that is considered to be firm, cancellations, scope adjustments, foreign
currency exchange fluctuations or project deferrals may occur that impact their volume or the expected timing of their recognition. Remaining
performance obligations are adjusted to reflect any known project

F-18

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

cancellations, revisions to project scope and cost, foreign currency exchange fluctuations and project deferrals, as appropriate.

4. Earnings Per Share and Certain Related Information

Basic and Diluted Earnings Per Share

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.

F-19

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reconciles the denominator used to compute basic EPS to the denominator used to compute diluted EPS for the years

ended October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

Numerator for Basic and Diluted EPS:
Net earnings (loss) attributable to Jacobs from continuing
operations
Net earnings from continuing operations allocated to participating
securities
Net earnings (loss) from continuing operations allocated to
common stock for EPS calculation

Net earnings attributable to Jacobs from discontinued operations
Net earnings from discontinued operations allocated to participating
securities
Net earnings from discontinued operations allocated to
common stock for EPS calculation

Net earnings allocated to common stock for EPS calculation

Denominator for Basic and Diluted EPS:
Weighted average basic shares
Shares allocated to participating securities
Shares used for calculating basic EPS attributable to common
stock

Effect of dilutive securities:
Stock compensation plans (1)
Shares used for calculating diluted EPS attributable to
common stock

Net Earnings Per Share:
Basic Net Earnings (Loss) from Continuing Operations Per Share
Basic Net Earnings from Discontinued Operations Per Share

Basic EPS
Diluted Net Earnings (Loss) from Continuing Operations Per Share $
$
Diluted Net Earnings from Discontinued Operations Per Share
$

Diluted EPS

$
$
$

353,861 $

290,960 $

(72)

(415)

353,789 $

290,545 $

137,984 $

557,019 $

(28)

(795)

137,956 $

556,224 $

(4,185)

—

(4,185)

167,616

(808)

166,808

491,745 $

846,769 $

162,623

131,541
(27)

131,514

1,207

132,721

2.69 $
1.05 $
3.74 $

2.67 $
1.04 $
3.71 $

138,104
(197)

137,907

1,299

139,206

2.11 $
4.03 $
6.14 $

2.09 $
4.00 $
6.08 $

138,182
(646)

137,536

—

137,536

(0.03)
1.21
1.18

(1) For the fiscal 2018 period, because net earnings (loss) from continuing operations was a loss, the effect of antidilutive securities of 1,176 was excluded from

the denominator in calculating diluted EPS.

F-20

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Share Repurchases

On January 17, 2019, the Company’s Board of Directors authorized a share repurchase program of up to $1.0 billion of the Company’s

The following table summarizes the activity under the 2019 Repurchase Authorization during fiscal 2020:

Amount Authorized
(2019 Repurchase
Authorization)
$1,000,000,000

Average Price Per Share (1)
$81.68

Shares Repurchased
4,129,003

Total Shares Retired
4,129,003

(1)

Includes commissions paid and calculated at the average price per share

On January 16, 2020, the Company’s Board of Directors authorized an additional share repurchase program of up to $1.0 billion of the

Company’s common stock, to expire on January 15, 2023 (the "2020 Repurchase Authorization"). There have been no repurchases under the 2020
Repurchase Authorization as of October 2, 2020.

The share repurchase programs do not obligate the Company to purchase any shares. Share repurchases may be executed through

Common and Preferred Stock

Jacobs is authorized to issue two classes of capital stock designated “common stock” and “preferred stock” (each has a par value of $1.00

per share). The preferred stock may be issued in one or more series. The number of shares to be included in a series as well as each series’
designation, relative powers, dividend and other preferences, rights and qualifications, redemption provisions and restrictions are to be fixed by the
Company’s Board of Directors at the time each series is issued. Except as may be provided by the Company’s Board of Directors in a preferred
stock designation, or otherwise provided for by statute, the holders of shares of common stock have the exclusive right to vote for the election of
directors and on all other matters requiring stockholder action. The holders of shares of common stock are entitled to dividends if and when declared
by the Company’s Board of Directors from whatever assets are legally available for that purpose.

Dividends

On September 17, 2020, the Company’s Board of Directors declared a quarterly dividend of $0.19 per share of the Company’s common

stock which was paid on October 30, 2020, to shareholders of record on the close of business on October 2, 2020. Future dividend declarations are
subject to review and approval by the Company’s Board of Directors. Dividends paid through October 2, 2020 and the preceding fiscal year are as
follows:

F-21

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Declaration Date
July 9, 2020
May 5, 2020
January 16, 2020
September 19, 2019
July 11, 2019
May 2, 2019
January 17, 2019

Record Date
July 24, 2020
May 20, 2020
January 31, 2020
October 4, 2019
July 26, 2019
May 17, 2019
February 15, 2019

Payment Date
August 21, 2020
June 17, 2020
February 28, 2020
November 1, 2019
August 23, 2019
June 14, 2019
March 15, 2019

Cash Amount (per share)
$0.19
$0.19
$0.19
$0.17
$0.17
$0.17
$0.17

5. Goodwill and Intangibles

The carrying value of goodwill associated with continuing operations and appearing in the accompanying Consolidated Balance Sheets

October 2, 2020 and September 27, 2019 was as follows (in millions):

Balance September 27, 2019

Acquired
Post-Acquisition Adjustments
Disposed
Foreign Exchange Impact

Balance October 2, 2020

Critical Mission
Solutions

People & Places
Solutions

Total

2,202 $
206
2
—
(1)
2,409 $

3,231 $
—
—
(6)
5
3,230 $

5,433
206
2
(6)
4
5,639

The following table provides a roll-forward of the Company’s acquired intangibles in the accompanying Consolidated Balance Sheets for the

year ended October 2, 2020 (in thousands):

Customer
Relationships,
Contracts and
Backlog

Developed
Technology

Trade Names

Other

Total

Balances, September 27, 2019

Acquired
Transfer to lease right-of-use asset as a result
of adoption of ASC 842
Amortization
Foreign currency translation

Balances, October 2, 2020
Weighted Average Amortization Period (years)

622,392 $
73,558

—
(86,401)
4,496
614,045 $

40,833 $
6,452

—
(3,734)

21
43,572 $

1,183 $
—

—
(428)
(32)
723 $

668 $
—

(668)
—
—
— $

—

665,076
80,010

(668)
(90,563)
4,485
658,340

The weighted average amortization period includes the effects of foreign currency translation.

The following table presents estimated amortization expense of intangible assets for fiscal 2021 and for the succeeding years. The amounts

below include preliminary amortization estimates for the Wood Group opening balance sheet fair values that are still preliminary and are subject to
change.

F-22

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Fiscal Year
2021
2022
2023
2024
2025
Thereafter

Total

(in millions)

90.7
89.7
89.4
89.2
88.8
210.5
658.3

F-23

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

6. Other Financial Information

Receivables and contract assets

The following table presents the components of receivables appearing in the accompanying Consolidated Balance Sheets at October 2,

2020 and September 27, 2019 as well as certain other related information (in thousands):

Components of receivables:
Amounts billed, net
Unbilled receivables and other
Contract assets

Total receivables and contract assets, net

Other information about receivables:

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

Property, Equipment and Improvements, Net

October 2, 2020

September 27, 2019

1,294,204 $
1,449,184
423,922
3,167,310 $

1,222,339
1,216,028
401,842
2,840,209

600,207 $

630,975

The following table presents the components of our property, equipment and improvements, net at October 2, 2020 and September 27,

2019 (in thousands):

Land
Buildings
Equipment
Leasehold improvements
Construction in progress

Accumulated depreciation and amortization

October 2, 2020

September 27, 2019

966 $

21,550
560,352
187,980
16,410
787,258
(467,887)
319,371 $

355
14,331
533,804
247,660
8,781
804,931
(496,788)
308,143

F-24

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table presents our property, equipment and improvements, net by geographic area for the years ended October 2, 2020 and

September 27, 2019 (in thousands):

Property, equipment and improvements, net:
United States
Europe
Canada
Asia
India
Australia and New Zealand
Middle East and Africa

Total

For the Years Ended

October 2, 2020

September 27, 2019

230,881 $
59,321
2,599
3,817
10,710
10,492
1,551
319,371 $

230,476
52,775
3,199
5,652
2,379
12,091
1,571
308,143

See discussion in Note 10- Leases, regarding impairments recorded in the current year relating to the Company's real estate lease portfolio

and related property, equipment and improvements, net.

Accrued Liabilities

The following table presents the components of “Accrued liabilities” shown in the accompanying Consolidated Balance Sheets at October 2,

2020 and September 27, 2019 (in thousands):

Accrued payroll and related liabilities
Project-related accruals
Non project-related accruals
Insurance liabilities
Sales and other similar taxes
Deferred rent
Dividends payable
Deferred gain on ECR disposition (1)
Current liabilities held for sale
Total

October 2, 2020

September 27, 2019

746,637 $
60,531
237,204
75,267
104,720
—
25,524
—
—

1,249,883 $

677,313
58,835
258,312
83,968
34,390
68,914
23,439
179,208
2,573
1,386,952

(1) See Note 15- Sale of Energy, Chemicals and Resource ("ECR") Business for discussion regarding deferred gain.

F-25

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Accumulated Other Comprehensive Income

The following table presents the Company's roll forward of accumulated income (loss) after-tax for the years ended October 2, 2020 and

September 27, 2019 (in thousands):

Change in Pension
and Retiree Medical
Plan Liabilities

Foreign Currency
Translation
Adjustment

Gain/(Loss) on Cash
Flow Hedges

Total

Balance at September 28, 2018
Other comprehensive income (loss)
Reclassifications from other comprehensive
income (loss)
Balance at September 27, 2019
Other comprehensive income (loss)
Reclassifications from other comprehensive
income (loss)

Balance at October 2, 2020

(309,867) $
(104,434)

(22,448)
(436,749) $
(61,994)

(496,017) $
(84,456)

100,428
(480,045) $
60,330

—

(498,726) $

(419,715) $

(819) $
990

(189)

(18) $

(17,569)

2,971
(14,616) $

(806,703)
(187,900)

77,791
(916,812)
(19,233)

2,988
(933,057)

F-26

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

7. Income Taxes

The following table presents the components of our consolidated income taxes for continuing operations for years ended October 2, 2020,
September 27, 2019 and September 28, 2018 (in thousands):

Current income tax (benefit) expense from continuing operations:

Federal
State
Foreign
Total current tax expense from continuing operations

Deferred income tax expense (benefit) from continuing operations:

Federal
State
Foreign
Total deferred tax expense (benefit) from continuing operations

Consolidated income tax expense from continuing operations

October 2, 2020

For the Years Ended
September 27,
2019

September 28,
2018

(37,030) $
(5,021)
41,616
(435)

53,485
7,133
(4,863)
55,755
55,320 $

25,549 $
6,639
57,156
89,344

6,607
20,408
(79,405)
(52,390)
36,954 $

49,829
(1,546)
20,858
69,141

230,358
17,318
8,815
256,491
325,632

On December 22, 2017, the Tax Cuts and Jobs Act (the “Act”) was enacted in the United States and significantly revised the U.S. corporate

income tax laws. Given the significance of the legislation, the SEC staff issued Staff Accounting Bulletin No. 118 (SAB 118), which allowed
registrants to record provisional amounts during a one year “measurement period” like that used when accounting for business combinations. As of
December 22, 2018, we completed our accounting for the tax effects of the enactment of the Act. For the deferred tax balances, we measured 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 revised measurement resulted in cumulative charges to income tax expense of $144.4 million during fiscal year 2018. Additionally, in
fiscal year 2019, the Company recorded $24.4 million of tax expense associated with the valuation of U.S. net operating losses that were expected
to be recovered at 35%, but were actually utilized at 21%.

The Act called for a one-time tax on deemed repatriation of foreign earnings. This one-time transition tax was based on our total post-1986

earnings and profits (E&P) of certain of our foreign subsidiaries. We recorded $14.3 million in cumulative transition taxes during the measurement
period in fiscal year 2018, although the transition tax was expected to be offset by foreign tax credits in the future, resulting in no additional cash tax
liability.

In fiscal 2018 the Company adopted ASU No 2018-02, Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of
Certain Tax Effects from Accumulated Other Comprehensive Income. The guidance provides the option to reclassify to retained earnings tax effects
related to items in accumulated other comprehensive income that the FASB refers to as having been stranded in accumulated other comprehensive
income as a result of tax reform. As a result of adoption of ASU 2018-02, the Company reclassified $10.2 million in accumulated other
comprehensive income to retained earnings relating to the fiscal 2018 year deferred tax activity for its U.S. pension plans resulting from the Act.

Deferred taxes reflect the tax effects of temporary differences between the amounts recorded as assets and liabilities for financial reporting

purposes and the comparable amounts recorded for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax
rates and laws that will be in effect when the differences are expected to reverse.

F-27

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table presents the components of our net deferred tax assets at October 2, 2020 and September 27, 2019 (in thousands):

October 2, 2020

September 27, 2019

Deferred tax assets:

Obligations relating to:

Defined benefit pension plans
Other employee benefit plans
Net operating losses
Foreign tax credit
Other credits
Contract revenues and costs
Investments
Lease liability
Deferred rent
Restructuring
Valuation allowance

Gross deferred tax assets

Deferred tax liabilities:

Depreciation and amortization
Lease right of use asset
Unremitted earnings
Partnership investment
Other, net

Gross deferred tax liabilities

Net deferred tax assets

55,949 $

132,613
197,987
87,259
6,808
70,733
49,848
154,979
—
11,974
(140,578)
627,572

(240,097)
(89,824)
(17,295)
(66,082)
(6,593)
(419,891)
207,681 $

56,854
149,276
241,033
84,553
13,881
51,579
23,204
—
21,847
8,205
(153,257)
497,175

(177,002)
—
(29,761)
—
(8,890)
(215,653)
281,522

A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized based on an assessment
of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. The valuation
allowance was $140.6 million at October 2, 2020 and $153.3 million at September 27, 2019. Of the $12.7 million decrease in the valuation
allowance, $15.1 million relates to a decrease for a change in judgment on the realizability of deferred tax assets in the U.K., which is offset by a
$2.4 million increase attributable to current year activity.

At October 2, 2020 and September 27, 2019, the domestic and international net operating loss (NOL) carryforwards totaled $783.9 million
and $945.1 million, resulting in an NOL deferred tax asset of $198.0 million and $241.0 million, respectively. The Company's net operating losses
have various expiration periods between 2021 and indefinite periods. At October 2, 2020, the Company has foreign tax credit carryforwards of $87.3
million, expiring between 2022 and 2037.

The following table presents the income tax benefits from continuing operations realized from the exercise of non-qualified stock options

and disqualifying dispositions of stock sold under our employee stock purchase plans for the years ended October 2, 2020, September 27, 2019 and
September 28, 2018 (in millions):

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

10.2 $

7.9 $

2.2

F-28

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table reconciles total income tax expense from continuing operations using the statutory U.S. federal income tax rate to the
consolidated income tax expense for continuing operations shown in the accompanying Consolidated Statements of Earnings for the years ended
October 2, 2020, September 27, 2019 and September 28, 2018 (dollars in thousands):

For the Years Ended

Statutory amount
State taxes, net of the federal benefit
Exclusion of tax on non-controlling interests
Foreign:

Difference in tax rates of foreign operations
Benefit from foreign valuation allowance release
U.S. tax cost (benefit) of foreign operations

Tax differential on foreign earnings

Foreign tax credits
Tax Rate Change
Tax reform
Valuation allowance
Uncertain tax positions
Other items:

IRS §179D deduction
Disallowed officer compensation
Stock compensation
Other items – net

Total other items

Taxes on income from continuing operations

October 2, 2020
92,652
$
7,254
(6,622)

%
21.0 % $
1.6 %
(1.5)%

September 27,
2019

73,701
10,183
(4,839)

1,083
(29,125)
(17,760)
(45,802)
(15,682)
—
36,674
(207)
(6,883)

(2,957)
5,568
(7,864)
(4,938)
(10,191)
36,954

%
21.0 % $
2.9 %
(1.4)%

0.3 %
(8.3)%
(5.1)%
(13.1)%
(4.5)%
—
10.4 %
(0.1)%
(2.0)%

(0.8)%
1.6 %
(2.2)%
(1.4)%
(2.8)%
10.5 % $

September 28,
2018

81,421
15,772
(2,389)

2,815
(5,088)
4,030
1,757
(21,735)
—
155,756
104,221
(1,402)

(4,557)
1,510
(2,158)
(2,564)
(7,769)
325,632

%
24.6 %
4.8 %
(0.7)%

0.9 %
(1.5)%
1.2 %
0.6 %
(6.6)%
—
47.1 %
31.5 %
(0.4)%

(1.4)%
0.5 %
(0.7)%
(0.8)%
(2.4)%
98.4 %

(6,267)
(16,861)
42,992
19,864
(26,471)
(6,811)
—
—
(11,338)

(7,267)
5,081
(10,234)
(788)
(13,208)
55,320

(1.4)%
(3.8)%
9.7 %
4.5 %
(6.0)%
(1.5)%
— %
— %
(2.6)%

(1.6)%
1.2 %
(2.3)%
(0.2)%
(3.0)%
12.5 % $

The following table presents income tax payments made during the years ended October 2, 2020, September 27, 2019 and September 28, 2018
(in millions):

October 2, 2020

September 27, 2019

September 28, 2018

39.8 $

291.7 $

44.3

The following table presents the components of our consolidated earnings from continuing operations before taxes for the years ended

October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):

United States earnings
Foreign earnings

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

208,302 $
232,901
441,203 $

225,898 $
125,061
350,959 $

263,991
66,990
330,981

The tax cost, net of applicable credits, have been provided on the undistributed earnings of the Company’s foreign subsidiaries. As of

October 2, 2020, the estimated tax cost of repatriating earnings to the United States is approximately $16.2 million. The Company does not assert
any earnings to be permanently reinvested.

The Company accounts for unrecognized tax benefits in accordance with ASC Topic 740, Income Taxes. It accounts for interest and

penalties on unrecognized tax benefits as interest and penalties reported above the line (i.e., not as part of income tax expense). The Company’s
liability for gross unrecognized tax benefits was $93.4 million and $85.2 million at October 2, 2020 and September 27, 2019, respectively, after ASU
2013-11 netting of $9.1 million and $19.2 million, respectively. If recognized, $86.2 million would affect the Company’s consolidated effective income
tax rate. The Company had $40.4 million and $51.1 million in accrued interest and penalties at October 2, 2020 and September 27, 2019,
respectively. The Company estimates that, within twelve months, we may realize a decrease in our uncertain tax positions

F-29

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

of approximately $5.5 million as a result of concluding various tax audits and closing tax years. As of October 2, 2020, the Company’s U.S. federal
income tax returns for tax years 2013 and forward remain subject to examination.

The following table presents the reconciliation of the beginning and ending amount of unrecognized tax benefits for both continuing and

discontinued operations, with ECR-sale related impacts removed in the Acquisitions/Divestitures row, for the years ended October 2, 2020,
September 27, 2019 and September 28, 2018 (in thousands):

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

Balance, beginning of year
Acquisitions/Divestitures
Additions based on tax positions related to the current year
Additions for tax positions of prior years
Reductions for tax positions of prior years
Settlement
Balance, end of year

104,355 $

—
1,064
7,472
(6,695)
(3,712)
102,484 $

179,140 $
(31,004)
7,455
1,994
(49,849)
(3,381)
104,355 $

38,580
137,912
9,780
5,561
(8,962)
(3,731)
179,140

On March 6, 2020, the Company completed the acquisition of John Wood Group's nuclear business, on June 12, 2019, the Company

completed the acquisition of KeyW and on December 15, 2017 the Company completed the acquisition of CH2M. For income tax purposes, the
transactions were accounted for as stock purchases. As a result of the acquisitions, the Company adjusted its U.S. GAAP opening balance sheet of
John Wood Group, KeyW and CH2M to reflect 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. For John Wood Group's nuclear business, 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. For KeyW, the Company completed its purchase
accounting in the third quarter of the current fiscal year.

8. Joint Ventures and VIEs

For consolidated joint ventures, the entire amount of the revenue recognized for services performed and the costs associated with these

services, including the services provided by the other joint venture partners, are included in the Company's result of operations. Likewise, the entire
amount of each of the assets and liabilities are included in the Company’s consolidated balance sheet. There are no consolidated VIEs that have
debt or credit facilities. Summary financial information of consolidated VIEs is as follows (in millions):

Current assets
Non-Current assets

Total assets
Current liabilities
Non-current liabilities

Total liabilities

Revenue
Direct cost of contracts

Gross profit

Net earnings

October 2, 2020

September 27, 2019

261.6 $
0.2
261.8 $

190.3 $
—
190.3 $

192.6
—
192.6

138.5
—
138.5

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

912.9 $
(807.9)
105.0

72.6 $

571.6 $
(526.7)
44.9
45.2 $

481.4
(452.9)
28.5
28.4

Unconsolidated joint ventures are accounted for under the equity method or proportionate consolidation. Proportionate consolidation is used for
joint ventures that include unincorporated legal entities and activities of the joint

F-30

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

venture are construction-related. For those joint ventures accounted for under proportionate consolidation, only the Company’s pro rata share of
assets, liabilities, revenue, and costs are included in the Company’s balance sheet and results of operations. For the proportionate consolidated
VIEs, the carrying value of assets and liabilities was $64.1 million and $63.0 million as of October 2, 2020, respectively and $61.1 million and $63.7
million as of September 27, 2019, respectively. For those joint ventures accounted for under the equity method, the Company's investment balances
for the joint venture is included in other noncurrent Assets: miscellaneous on the balance sheet and the Company’s pro rata share of net income is
included in revenue. In limited cases, there are basis differences between the equity in the joint venture and Jacobs' investment created when
Jacobs purchased their share of the joint venture. These basis differences are amortized based on an internal allocation to underlying net assets,
excluding allocations to goodwill. As of October 2, 2020, the Company’s equity method investments exceeded its share of venture net assets by
$71.1 million. Our investments in equity method joint ventures on the Consolidated Balance Sheets as of October 2, 2020 and September 27, 2019
were a net asset of $161.3 million and $157.9 million, respectively. During the years ended October 2, 2020, September 27, 2019, and
September 28, 2018, we recognized income from equity method joint ventures of $82.2 million, $48.5 million, and $47.9 million, respectively.

Summary financial information of unconsolidated joint ventures accounted for under the equity method, as derived from their unaudited

financial statements, is as follows (in millions):

Current assets
Non-Current assets

Total assets
Current liabilities
Non-current liabilities

Total liabilities
Joint ventures' equity

Total liabilities & joint venture equity

October 2, 2020

September 27, 2019

1,697.0 $
34.9
1,731.9 $

889.7 $
631.0
1,520.7
211.2
1,731.9 $

1,443.5
29.9
1,473.4

692.1
473.6
1,165.7
307.7
1,473.4

Revenue
Direct cost of contracts

Gross profit

Net earnings

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

$
$

3,447.0 $
(3,126.6)

320.4 $
245.3 $

3,533.1 $
(3,176.2)

356.9 $
227.0 $

3,165.0
(2,902.5)
262.5
221.1

Accounts receivable from unconsolidated joint ventures accounted for under the equity method is $8.3 million and $19.5 million as of

October 2, 2020 and September 27, 2019, respectively.

The Company currently holds a 24.5% interest in AWE Management Ltd (AWE ML) that is accounted for under the equity method, and the

9. Borrowings

Short-Term Debt

At September 27, 2019, short-term debt consisted of a bilateral term loan facility with an aggregate principal balance of $200.0 million (the
"Bilateral Term Loan") and uncommitted credit arrangements with several banks providing short-term borrowing capacity and overdraft protection.
Offset from the Bilateral Term Loan were deferred financing fees of $0.1 million. This loan was repaid during the second fiscal quarter of 2020.

F-31

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Long-term Debt

The following table presents certain information regarding the Company’s long-term debt at October 2, 2020 and September 27, 2019

(dollars in thousands):

Revolving Credit Facility
2020 Term Loan Facility
2017 Term Loan Facility
Fixed-rate notes due:
Senior Notes, Series A
Senior Notes, Series B
Senior Notes, Series C
Less: Deferred Financing Fees

Total Long-term debt, net

Interest Rate
LIBOR + applicable margin (1)
LIBOR + applicable margin (2)
LIBOR + applicable margin (3)

Maturity
March 2024
March 2025
December 2020

4.27%
4.42%
4.52%

May 2025
May 2028
May 2030

October 2, 2020

152,794 $

1,025,826
—

190,000
180,000
130,000
(1,679)
1,676,941 $

September 27,
2019

303,780
—
400,000

190,000
180,000
130,000
(2,535)
1,201,245

(1)

(2)

(3)

Depending on the Company’s Consolidated Leverage Ratio (as defined in the credit agreement governing the Revolving Credit Facility (defined below)),
borrowings under the Revolving Credit Facility bear interest at either a eurocurrency rate plus a margin of between 0.875% and 1.5% or a base rate plus a
margin of between 0% and 0.5%. The applicable LIBOR rates, including applicable margins, at October 2, 2020 and September 27, 2019 were
approximately 1.39% and 2.97%.

Depending on the Company’s Consolidated Leverage Ratio (as defined in the credit agreement governing the 2020 Term Loan Facility (defined below)),
borrowings under the 2020 Term Loan Facility bear interest at either a eurocurrency rate plus a margin of between 0.875% and 1.5% or a base rate plus a
margin of between 0% and 0.5%. The applicable LIBOR rate, including applicable margin, at October 2, 2020 was approximately 1.37%.

Depending on the Company’s Consolidated Leverage Ratio (as defined in the credit agreement governing the 2017 Term Loan Facility (defined below)),
borrowings under the 2017 Term Loan 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 applicable LIBOR rate, including applicable margin, at September 27, 2019 was approximately 3.05%.

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).
We were in compliance with the covenants under the Revolving Credit Facility at October 2, 2020.

The Revolving Credit Facility 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. 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 $50.0 million sub
facility for swing line loans. Letters of credit are subject to fees based on the Company’s Consolidated Leverage Ratio. The Company pays a facility
fee of between 0.08% and 0.20% per annum depending on the Company’s Consolidated Leverage Ratio.

F-32

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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 the
Bilateral Term Loan 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. We were in compliance with the
covenants under the 2020 Term Loan Facility at October 2, 2020. 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.

On September 28, 2017, the Company entered into a $1.5 billion unsecured delayed-draw term loan facility (as amended, the “2017 Term
Loan Facility”) with a syndicate of financial institutions as lenders and letter of credit issuers. We incurred loans under the 2017 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 2017 Term Loan Facility. The 2017 Term Loan Facility was repaid in full during the first fiscal quarter
of 2020.

On March 12, 2018, Jacobs 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 $500.0 million in the aggregate principal amount of the Company’s senior notes in three
series (collectively, the “Senior Notes”). The Note Purchase Agreement provides that if the Company's consolidated leverage ratio exceeds a certain
amount, the interest on the Senior Notes may increase by 75 basis points. The Senior Notes may be prepaid at any time subject to a make-whole
premium. The sale of the Senior Notes closed on May 15, 2018. The Company used the net proceeds from the offering of Senior Notes to repay
certain existing indebtedness and for other general corporate purposes. The Note Purchase Agreement contains affirmative, negative and financial
covenants customary for financings of this type, including, among other things, covenants to maintain a minimum consolidated net worth and
maximum consolidated leverage ratio and limitations on certain liens, mergers, dispositions and transactions with affiliates. In addition, the Note
Purchase Agreement contains customary events of default. We were in compliance with the covenants under the Note Purchase Agreement at
October 2, 2020.

We believe the carrying value of the Revolving Credit Facility and the 2020 Term Loan Facility approximates fair value based on the interest

rates and scheduled maturities applicable to the outstanding borrowings. The fair value of the Senior Notes is estimated to be $543.7 million at
October 2, 2020, 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.

The Company has issued $2.3 million in letters of credit under the Revolving Credit Facility, leaving $2.09 billion of available borrowing
capacity under the Revolving Credit Facility at October 2, 2020. In addition, the Company had issued $260.7 million under separate, committed and
uncommitted letter-of-credit facilities for total issued letters of credit of $263.0 million at October 2, 2020.

The following table presents the amount of interest paid by the Company during October 2, 2020, September 27, 2019 and September 28,

2018 (in thousands):

October 2, 2020
$58,257

For the Years Ended
September 27, 2019
$81,582

September 28, 2018
$68,467

10. Leases

The components of lease expense (reflected in selling, general and administrative expenses) for the year ended October 2, 2020 were as

follows (in thousands):

F-33

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Lease cost
Operating lease cost
Variable lease cost
Sublease income

Total lease cost

Year Ended

169,967
35,083
(14,719)
190,331

Supplemental information related to the Company's leases for the year ended October 2, 2020 was as follows (in thousands):

Cash paid for amounts included in the measurements of lease
liabilities
Right-of-use assets obtained in exchange for new operating
lease liabilities
Weighted average remaining lease term - operating leases
Weighted average discount rate - operating leases

Year Ended

195,345

66,761
7 years
2.7%

Total remaining lease payments under the Company's leases for each of the succeeding years is as follows (in thousands):

Fiscal Year
2021
2022
2023
2024
2025
Thereafter

Less Interest

Operating Leases

184,967
163,166
144,668
127,472
107,866
266,539
994,678
(95,164)
899,514

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

In the fourth fiscal quarter of 2020, as a result and in consideration of the impacts of the COVID-19 pandemic and the changing nature of

the Company's use of office space for its workforce, the Company evaluated its existing real estate lease portfolio as part of its transformation
initiatives related to real estate and staffing programs. These initiatives during the fourth quarter resulted in the actual 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 an impairment loss during the fourth quarter of fiscal 2020 of $162 million, which is

included in selling, general and administrative expenses in the accompanying statement of earnings for the fiscal year ended October 2, 2020. The
impairment loss recorded includes $127 million related to right-of-use lease assets and $35 million related to other long-lived assets, including
property, equipment and improvements and leasehold improvements.

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 reflects the level of risk
associated with receiving future cash flows.

F-34

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

11. Employee Stock Purchase and Stock Incentive Plans

Employee Stock Purchase Plans

Under the 1989 ESPP and the GESPP, eligible employees who elect to participate in these plans are granted the right to purchase shares

of the common stock of Jacobs at a discount that is limited to 5% of the per-share market value on the day shares are sold to employees. The
following table summarizes the stock issuance activity under the 1989 ESPP and the GESPP for the fiscal years ended October 2, 2020,
September 27, 2019 and September 28, 2018:

Aggregate Purchase Price Paid for Shares Sold:

Under the 1989 ESPP
Under the GESPP

Total

Aggregate Number of Shares Sold:

Under the 1989 ESPP
Under the GESPP

Total

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

25,364,252 $
2,448,349
27,812,601 $

24,824,232 $
2,471,193
27,295,425 $

304,018
29,060
333,078

354,580
34,843
389,423

21,590,858
2,240,609
23,831,467

357,899
36,405
394,304

On January 19, 2017, the Company’s stockholders approved an increase in the number of shares authorized by 4,350,000 shares for the

1989 ESPP and by 150,000 shares for the GESPP.

At October 2, 2020, there remains 3,529,357 shares reserved for issuance under the 1989 ESPP and 74,672 shares reserved for issuance

under the GESPP.

Stock Incentive Plans

We also sponsor the 1999 Stock Incentive Plan, as amended and restated (the "SIP") and the 1999 Outside Director Stock Plan, as

amended and restated (the "ODSP"). The 1999 SIP provides for the issuance of incentive stock options, non-qualified stock options, share
appreciation rights ("SARs"), restricted stock and restricted stock units to employees. The 1999 ODSP provides for awards of shares of common
stock, restricted stock, restricted stock units and grants of non-qualified stock options to our outside (i.e., nonemployee) directors. The following
table sets forth certain information about the 1999 Plans:

Number of shares authorized

Number of remaining shares reserved for issuance at October 2, 2020
Number of shares relating to outstanding stock options at October 2, 2020

Number of shares available for future awards:
At October 2, 2020
At September 27, 2019

1999 SIP

1999 ODSP

29,850,000
5,272,572
568,114

4,704,458
4,963,761

1,100,000
359,875
138,375

221,500
256,252

Total
30,950,000
5,632,447
706,489

4,925,958
5,220,013

Effective September 28, 2012, all grants of shares under the 1999 SIP are issued on a fungible basis. An award other than an option or

SAR are granted on a 1.92-to-1.00 basis (“Fungible”). An award of an option or SAR are granted on a 1-to-1 basis (“Not Fungible”).

F-35

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table presents the fair value of shares (of restricted stock and restricted stock units) vested for the years ended October 2,

2020, September 27, 2019 and September 28, 2018 (in thousands):

Restricted Stock and Restricted Stock Units (service condition)
Restricted Stock Units (service, market, and performance conditions at
target)

Total

October 2, 2020

For the Years Ended
September 27, 2019

29,209 $

20,998
50,207 $

37,864 $

17,124
54,988 $

September 28, 2018
64,121

2,626
66,747

At October 2, 2020, the amount of compensation cost relating to non-vested awards not yet recognized in the financial statements is
approximately $61.3 million. The majority of these unrecognized compensation costs will be recognized by the first quarter of fiscal 2022. The
weighted average remaining contractual term of options currently exercisable is 2.1 years.

Stock Options

The following table summarizes the stock option activity for the years ended October 2, 2020, September 27, 2019 and September 28, 2018:

Outstanding at September 29, 2017
Exercised
Cancelled or expired
Outstanding at September 28, 2018
Exercised
Cancelled or expired
Outstanding at September 27, 2019
Exercised
Cancelled or expired

Outstanding at October 2, 2020

Number of Stock Options

Weighted Average
Exercise Price

2,516,825 $
(636,019) $
(114,047) $
1,766,759 $
(828,529) $
(11,624) $
926,606 $
(212,467) $
(7,650) $
706,489 $

46.19
46.93
52.26
45.53
45.63
42.10
45.48
44.05
45.31

45.91

Cash received from the exercise of stock options, net of tax remitted, during the year ended October 2, 2020 was $9.4 million.

Stock options outstanding at October 2, 2020 consisted entirely of non-qualified stock options. The following table presents the total intrinsic

value of stock options exercised for the fiscal years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):

October 2, 2020
$9,986

For the Years Ended
September 27, 2019
$27,720

September 28, 2018
$13,931

F-36

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The total intrinsic value of stock options exercisable at October 2, 2020 was approximately $34.1 million. The following table presents certain
other information regarding our 1999 SIP and 1999 OSDP for the fiscal years ended October 2, 2020, September 27, 2019 and September 28,
2018:

At fiscal year end:

Range of exercise prices for options exercisable

Number of options exercisable

For the fiscal year:

October 2, 2020

September 27, 2019

September 28, 2018

$32.51–$60.43
706,489

$32.51–$60.43
860,114

$32.51–$60.43
1,557,900

Range of prices relating to options exercised

$37.03–$60.08

$36.88-$60.43

$35.93-$61.26

The following table presents certain information regarding stock options outstanding and stock options exercisable at October 2, 2020:

October 2, 2020

Range of Exercise Prices
$32.51 - $37.03
$37.43 - $46.09
$47.11 - $55.13
$60.08 - $80.63

Number

36,500
468,077
173,537
28,375
706,489

Options Outstanding
Weighted Average
Remaining
Contractual Life
(years)

Weighted
Average Price
36.97
43.08
53.05
60.39
45.91

1.63 $
4.51 $
2.72 $
3.35 $
3.88 $

Options Exercisable

Number

Weighted
Average
Exercise Price
36.97
43.08
53.05
60.39
45.91

36,500 $
468,077 $
173,537 $
28,375 $
706,489 $

The 1999 ODSP and the 1999 SIP allow participants to satisfy the exercise price of stock options by tendering shares of Jacobs common

stock that have been owned by the participants for at least six months. Shares so tendered are retired and canceled, and are shown as repurchases
of common stock in the accompanying Consolidated Statements of Stockholders’ Equity. The weighted average remaining contractual term of
options currently exercisable is 3.88 years.

Restricted Stock

The following table presents the number of shares of restricted stock and restricted stock units issued as common stock under the 1999 SIP

for the years ended October 2, 2020, September 27, 2019 and September 28, 2018:

Restricted stock
Restricted stock units (service condition)
Restricted stock units (service and performance conditions)

—
351,670
202,792

—
318,056
240,068

—
1,087,724
254,784

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

The amount of restricted stock units issued for awards with performance and market conditions in the above table are issued based on

performance against the target amount. The number of shares ultimately issued, which could be greater or less than target, will be based on
achieving specific performance conditions related to the awards as well as achieving the service condition required for the restricted stock units to
vest.

F-37

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table presents the number and weighted average grant-date fair value of restricted stock and restricted stock units at

October 2, 2020:

Outstanding at September 27, 2019
Granted
Vested
Canceled

Outstanding at October 2, 2020

Number of Shares

Weighted Average Grant-
Date Fair Value

1,723,037 $
728,478 $
(850,054) $
(75,935) $
1,525,526 $

65.80
85.61
60.37
75.86

77.88

The following table presents the number of shares of restricted stock and restricted stock units canceled and withheld for taxes under the

1999 SIP for the years ended October 2, 2020, September 27, 2019 and September 28, 2018:

Restricted stock
Restricted stock units (service condition)

Restricted stock units (service, market and performance
conditions)

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

34,417
183,099

160,781

105,301
295,122

183,654

284,254
336,516

95,063

The amount of unvested restricted stock units canceled for awards with service and performance conditions in the above table is based on

the service period achieved and performance against the target amount.

The restrictions attached to restricted stock and restricted stock units generally relate to the recipient’s ability to sell or otherwise transfer the

stock or stock units. There are also restrictions that subject the stock and stock units to forfeiture back to the Company until earned by the recipient
through continued employment or service.

The following table provides the number of restricted stock units outstanding at October 2, 2020 under the 1999 SIP. No shares of restricted

stock were issued under the 1999 ODSP during such periods.

Restricted stock
Restricted stock units (service condition)

Restricted stock units (service, market and performance conditions)

October 2, 2020

—
756,054
647,262

The following table presents the number of shares of restricted stock and restricted stock units issued under the 1999 ODSP for the years

ended October 2, 2020, September 27, 2019 and September 28, 2018:

Restricted stock units (service condition)

18,100

26,372

21,620

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

The following table provides the number of shares of restricted stock and restricted stock units outstanding at October 2, 2020 under the

1999 ODSP:

Restricted stock
Restricted stock units (service condition)

All shares granted under the 1999 ODSP are issued on a 1.92-to-1.00 basis.

October 2, 2020

34,000
88,210

F-38

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

12. Savings and Deferred Compensation Plans

Savings Plans

We sponsor various defined contribution savings plans which allow participants to make voluntary contributions by salary deduction. Such
plans cover substantially all of our domestic, nonunion employees in the U.S. and are qualified under Section 401(k) of the U.S. Internal Revenue
Code. Similar plans outside the U.S. cover various groups of employees of our international subsidiaries and affiliates. Several of these plans allow
the Company to match, on a voluntary basis, a portion of the employee contributions. The following table presents the Company’s contributions to
these savings plans for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):

October 2, 2020

September 27, 2019

September 28, 2018

91,833 $

114,006 $

113,135

Deferred Compensation Plans

Our Executive Security Plan, Executive Deferral Plans, Directors Deferral Plan, legacy CH2M Supplemental Executive Retirement and

Retention Plan and legacy CH2M Deferred Compensation Plan are non-qualified deferred compensation programs that provide benefits payable to
directors, officers, and certain key employees or their designated beneficiaries at specified future dates, upon retirement, or death. The plans are
unfunded; therefore, benefits are paid from the general assets of the Company. Participants' cash deferrals earn a return based on the participants'
selection of investments in several hypothetical investment options. Participants are also able to defer stock based compensation in the plans, which
must remain invested in Company stock and are distributed in shares of Jacobs common stock. Since no investment diversification is permitted,
changes in the fair value of Jacobs' common stock are not recognized. For the deferred compensation held in company stock, the number of shares
needed to settle the liability is included in the denominator in both the basic and diluted earnings per share calculations. The following table presents
the amount charged to expense for the Company’s deferred compensation plans for the years ended October 2, 2020, September 27, 2019 and
September 28, 2018 (in thousands):

October 2, 2020

September 27, 2019

September 28, 2018

203 $

2,395 $

4,445

The following table presents the amount relating to assets held as deferred compensation arrangement investments for the years ended

October 2, 2020 and September 27, 2019 (in thousands):

Deferred compensation arrangement investments

October 2, 2020

September 27, 2019

$194,933

$219,948

Deferred compensation arrangement investments are comprised of the cash surrender value of life insurance policies and pooled-

investment funds. The fair value of the pooled investment funds is derived using Level 2 inputs.

F-39

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

13. Pension and Other Postretirement Benefit Plans

Company-Only Sponsored Plans

We sponsor various defined benefit pension and other post retirement plans covering employees of certain U.S. and international
subsidiaries. The pension plans provide pension benefits that are based on the employee’s compensation and years of service. Our funding policy
varies by country and plan according to applicable local funding requirements and plan-specific funding agreements.

The accounting for pension and other post-retirement benefit plans requires the use of assumptions and estimates in order to calculate

periodic benefit cost and the value of the plans’ assets and benefit obligations. These assumptions include discount rates, investment returns, and
projected salary increases, among others. The discount rates used in valuing the plans' benefit obligations were determined with reference to high
quality corporate and government bonds that are appropriately matched to the duration of each plan's obligations. The expected long-term rate of
return on plan assets is generally based on using country-specific simulation models which select a single outcome for expected return based on the
target asset allocation. The expected long-term rates of return used in the valuation are the annual average returns generated by these assumptions
over a 20-year period for each asset class based on the expected long-term rate of return of the underlying assets.

As a result of the ECR sale, ECR-related pension assets and liabilities that have been sold are reported as discontinued operations in

accordance with ASC 210-05, Discontinued Operations. Activity for the year ended September 27, 2019 is shown in the appropriate rows and the
balances as of the sale date are shown in the Disposition of ECR Plans rows below.

The following table sets forth the changes in the plans’ combined net benefit obligation (segregated between plans existing within and

outside the U.S.) for the years ended October 2, 2020 and September 27, 2019 (in thousands):

U.S. Plans

Non-U.S. Plans

Net benefit obligation at the beginning of the year
Service cost
Interest cost
Participants’ contributions
Actuarial (gains)/losses
Benefits paid
Curtailments/settlements/plan amendments
Disposition of ECR Plans
Effect of exchange rate changes and other, net

Net benefit obligation at the end of the year

October 2, 2020
$

September 27,
2019

October 2, 2020

448,540 $
409
12,673
—
15,584
(22,836)
(16,450)
—
—

437,920 $

448,402 $
2,784
16,697
243
52,720
(30,648)
(39,388)
—
(2,270)
448,540 $

September 27,
2019
2,149,246
7,171
52,627
367
314,889
(72,453)
30,124
(99,504)
(124,338)
2,258,129

2,258,129 $
5,710
39,469
167
35,626
(64,395)
(4,782)
—
118,153
2,388,077 $

The following table sets forth the changes in the combined Fair Value of the plans’ assets (segregated between plans existing within and

outside the U.S.) for the years ended October 2, 2020 and September 27, 2019 (in thousands):

F-40

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Fair value of plan assets at the beginning of the year
Actual return on plan assets
Employer contributions
Participants’ contributions
Gross benefits paid
Curtailments/settlements/plan amendments
Disposition of ECR Plans
Effect of exchange rate changes and other, net

Fair value of plan assets at the end of the year

U.S. Plans

Non-U.S. Plans

October 2, 2020
$

390,210 $
33,345
88
—
(22,836)
(18,557)
—
—

382,250 $

September 27,
2019

October 2, 2020

390,829 $
31,140
10,668
243
(30,648)
(9,751)
—
(2,271)
390,210 $

1,916,637 $
61,221
33,192
167
(64,395)
(4,782)
—
101,316
2,043,356 $

September 27,
2019
1,867,481
280,785
32,063
367
(72,453)
(5,814)
(76,111)
(109,681)
1,916,637

During fiscal 2020, the Company incurred combined curtailment and settlement losses on our defined benefit plans of approximately $4.6
million primarily related to the Ireland and U.S. plans. During fiscal 2019, the Company incurred combined curtailment and settlement gains on its
defined benefit plans of approximately $33.1 million primarily related to the CH2M retiree medical (further discussed below) and Ireland plans.

The following table reconciles the combined funded statuses of the plans recognized in the accompanying Consolidated Balance Sheets at

October 2, 2020 and September 27, 2019 (segregated between plans existing within and outside the U.S.) (in thousands):

U.S. Plans

Non-U.S. Plans

Net benefit obligation at the end of the year
Fair value of plan assets at the end of the year

Underfunded amount recognized at the end of the year

October 2, 2020
$

437,920 $
382,250

55,670 $

September 27,
2019

October 2, 2020

448,540 $
390,210

58,330 $

2,388,077 $
2,043,356

344,721 $

September 27,
2019
2,258,129
1,916,637
341,492

The following table presents the accumulated benefit obligation at October 2, 2020 and September 27, 2019 (segregated between plans

existing within and outside the U.S.) (in thousands):

U.S. Plans

Non-U.S. Plans

Accumulated benefit obligation at the end of the year

October 2, 2020
$

436,770 $

September 27,
2019

October 2, 2020

447,609 $

2,376,059 $

September 27,
2019
2,244,710

The following table presents the amounts recognized in the accompanying Consolidated Balance Sheets at October 2, 2020 and

September 27, 2019 (segregated between plans existing within and outside the U.S.) (in thousands):

U.S. Plans

Non-U.S. Plans

Prepaid benefit cost included in noncurrent assets
Accrued benefit cost included in current liabilities
Accrued benefit cost included in noncurrent liabilities

Net amount recognized at the end of the year

October 2, 2020
$

— $
85
57,919
58,004 $

September 27,
2019

October 2, 2020

September 27,
2019

— $
85
58,245
58,330 $

1,037 $
4,375
339,049
342,387 $

2,939
4,177
340,254
341,492

F-41

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table presents the significant actuarial assumptions used in determining the funded statuses and the following year's benefit

cost of the Company’s U.S. plans for the years ended October 2, 2020, September 27, 2019 and September 28, 2018:

Discount rates
Rates of compensation increases
Expected long-term rates of return on assets

October 2, 2020

2.0% to 2.7%
3.5%
4.6% to 4.7%

For the Years Ended
September 27, 2019

September 28, 2018

2.8% to 3.1%
3.5%
5.1%

3.9% to 4.2%
3.5%
5.8% to 5.9%

The following table presents the significant actuarial assumptions used in determining the funded statuses and the following year's benefit

cost of the Company’s non-U.S. plans for the years ended October 2, 2020, September 27, 2019 and September 28, 2018:

Discount rates
Rates of compensation increases
Expected long-term rates of return on assets

October 2, 2020

0.4% to 6.6%
2.7% to 7.5%
1.8% to 7.0%

For the Years Ended
September 27, 2019

September 28, 2018

0.2% to 7.1%
3.7% to 7.5%
2.3% to 7.5%

1.3% to 8.1%
3.8% to 7.5%
3.8% to 7.5%

The following table presents certain amounts relating to our U.S. plans recognized in accumulated other comprehensive (gain) loss at

October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):

Arising during the period:

Net actuarial (gain) loss
Prior service cost (benefit)
Total

Reclassification adjustments:

Net actuarial losses
Prior service cost (benefit)
Total

Total

October 2, 2020

September 27, 2019

September 28, 2018

(900) $
1,589
689

(2,653)
(244)
(2,897)
(2,208) $

36,108 $
—
36,108

(2,282)
—
(2,282)
33,826 $

(7,514)
—
(7,514)

(2,913)
—
(2,913)
(10,427)

The following table presents certain amounts relating to our non-U.S. plans recognized in accumulated other comprehensive (gain) loss at

October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):

October 2, 2020

September 27, 2019

September 28, 2018

Arising during the period:

Net actuarial (gain) loss
Net (gain) loss on Sale of ECR
Prior service cost (benefit)
Total

Reclassification adjustments:

Net actuarial losses
Prior service cost
Total

Total

71,676 $
—
—
71,676

(6,322)
(1,169)
(7,491)
64,185 $

F-42

83,368 $
(12,520)
29,829
100,677

(6,546)
(1,075)
(7,621)
93,056 $

59,827
—
215
60,042

(5,507)
181
(5,326)
54,716

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table presents certain amounts relating to our plans recorded in accumulated other comprehensive loss that have not yet

been recognized as components of net periodic benefit cost at October 2, 2020 and September 27, 2019 (segregated between U.S. and non-U.S.
plans) (in thousands):

Net actuarial loss
Prior service cost
Total

U.S. Plans

Non-U.S. Plans

October 2, 2020

September 27, 2019

October 2, 2020

September 27, 2019

67,530 $
1,345
68,875 $

71,083 $
—
71,083 $

401,930 $
27,921
429,851 $

365,661
28,346
394,007

The following table presents the amount of accumulated comprehensive income that will be amortized against earnings as part of our net

periodic benefit cost in fiscal 2021 based on 2020 exchange rates (segregated between U.S. and non-U.S. plans) (in thousands):

Unrecognized net actuarial loss
Unrecognized prior service cost

Accumulated comprehensive loss to be recorded against earnings

U.S. Plans

Non-U.S. Plans

4,249 $
431
4,680 $

10,016
1,431
11,447

We consider various factors in developing the estimates for the expected, long-term rates of return on plan assets. These factors include the

projected, long-term rates of returns on the various types of assets in which the plans invest, as well as historical returns. In general, investment
allocations are determined by each plan’s trustees and/or investment committees. The objectives of the plans’ investment policies are to
(i) maximize returns while preserving capital; (ii) provide returns sufficient to meet the current and long-term obligations of the plan as the obligations
become due; and (iii) maintain a diversified portfolio of assets so as to reduce the risk associated with having a disproportionate amount of the
plans’ total assets invested in any one type of asset, issuer or geography. None of our pension plans hold Jacobs common stock directly (although
some plans may hold shares indirectly through investments in mutual funds). The plans’ weighted average asset allocations at October 2, 2020 and
September 27, 2019 (the measurement dates used in valuing the plans’ assets and liabilities) were as follows:

Equity securities
Debt securities
Real estate investments
Other

U.S. Plans

Non-U.S. Plans

October 2, 2020

September 27, 2019

October 2, 2020

September 27, 2019

3 %
58 %
— %
39 %

21 %
56 %
7 %
17 %

20 %
52 %
7 %
21 %

The following table presents the Fair Value of the Company’s Domestic U.S. plan assets at October 2, 2020, segregated by level of Fair

Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):

Domestic equities
Domestic bonds
Overseas bonds
Cash and equivalents
Mutual funds
Total

October 2, 2020
Fair Value, Determined Using Fair Value Measurement Inputs

Level 1

Level 2

Level 3

Investments measured
at Net Asset Value

Total

12,376 $
68,324
—
18,226
132,567
231,493 $

— $

131,534
19,223
—
—

150,757 $

— $
—
—
—
—
— $

—
—
—
—
—
—

12,376
199,858
19,223
18,226
132,567
382,250

F-43

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table presents the Fair Value of the Company’s non-U.S. plan assets at October 2, 2020, segregated by level of Fair Value

measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):

Domestic equities
Overseas equities
Domestic bonds
Overseas bonds
Cash and equivalents
Real estate
Insurance contracts
Hedge funds
Mutual funds
Total

October 2, 2020
Fair Value, Determined Using Fair Value Measurement Inputs

Level 1

Level 2

Level 3

Investments
measured at Net
Asset Value

— $
—
—
—
24,568
—
—
—
—
24,568 $

103,036 $
229,576
34,469
1,049,119
—
10,383
4,402
—
64,742
1,495,727 $

— $
—
—
—
—
105,422
67,709
171,730
—

344,861 $

5,745 $

87,725
1,175
58,493
—
—
17,909
7,153
—

178,200 $

Total

108,781
317,301
35,644
1,107,612
24,568
115,805
90,020
178,883
64,742
2,043,356

The following table presents the Fair Value of the Company’s U.S. plan assets at September 27, 2019, segregated by level of Fair Value

measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):

Domestic equities
Domestic bonds
Overseas bonds
Cash and equivalents
Mutual funds
Total

September 27, 2019
Fair Value, Determined Using Fair Value Measurement Inputs

Level 1

Level 2

Level 3

Investments measured
at Net Asset Value

Total

10,890 $
65,490
—
28,972
130,244
235,596 $

— $

134,594
20,020
—
—

154,614 $

— $
—
—
—
—
— $

—
—
—
—
—
—

10,890
200,084
20,020
28,972
130,244
390,210

The following table presents the Fair Value of the Company’s non-U.S. plan assets at September 27, 2019, segregated by level of Fair

Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):

F-44

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

September 27, 2019
Fair Value, Determined Using Fair Value Measurement Inputs

Level 1

Level 2

Level 3

Investments
measured at Net
Asset Value

— $
—
—
—
37,811
—
—
—
—
—
37,811 $

17,255 $

182,600
306,225
728,616
(16)
24,735
4,478
—
—
148,812
1,412,705 $

— $
—
—
—
—
97,539
72,788
—
130,200
—

300,527 $

19,413 $
50,127
34,408
39,292
—
15,198
—
—
7,156
—

165,594 $

Total

36,668
232,727
340,633
767,908
37,795
137,472
77,266
—
137,356
148,812
1,916,637

Domestic equities
Overseas equities
Domestic bonds
Overseas bonds
Cash and equivalents
Real estate
Insurance contracts
Derivatives
Hedge funds
Mutual funds
Total

The following table summarizes the changes in the Fair Value of the Company’s non-U.S. Pension Plans’ Level 3 assets for the years

ended September 27, 2019 and October 2, 2020 (in thousands):

Real Estate

Insurance Contracts

Hedge Funds

Balance at Balance at September 28, 2018
Purchases, sales, and settlements
Realized and unrealized gains
Disposition of ECR Assets
Effect of exchange rate changes
Balance at September 27, 2019
Purchases, sales, and settlements
Realized and unrealized gains (losses)
Effect of exchange rate changes

Balance at October 2, 2020

99,587 $
(17,902)
21,838
—
(5,984)
97,539 $
(475)
3,337
5,021
105,422 $

95,782 $
(5,126)
9,134
(22,885)
(4,117)
72,788 $
(7,375)
(1,399)
3,695
67,709 $

135,786
(26,591)
29,161
—
(8,156)
130,200
29,999
5,435
6,096
171,730

The following table presents the amount of cash contributions we anticipate making into the plans during fiscal 2021 (in thousands):

Anticipated cash contributions

U.S. Plans

Non-U.S. Plans

— $

31,258

The following table presents the total benefit payments expected to be paid to plan participants during each of the next five fiscal years, and

in total for the five years thereafter (in thousands):

2021
2022
2023
2024
2025
For the periods 2026 through 2030

U.S. Plans

Non-U.S. Pans

34,757 $
32,690
32,022
30,710
29,312
129,516

70,264
69,594
71,386
72,131
73,217
406,156

F-45

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table presents the components of net periodic benefit cost for the Company’s U.S. plans recognized in the accompanying

Consolidated Statements of Earnings for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):

October 2, 2020

September 27, 2019

September 28, 2018

409 $

12,673
(17,670)
3,518
323
(747) $
3,436
2,689 $

2,784 $

16,697
(21,508)
3,026
—
999 $

(35,020)
(34,021) $

4,765
13,778
(19,663)
3,845
—
2,725
4,146
6,871

The following table presents the components of net periodic benefit cost for the Company’s Non-U.S. plans recognized in the accompanying

Consolidated Statements of Earnings for the years ended October 2, 2020, September 27, 2019 and September 28, 2018 (in thousands):

Service cost
Interest cost
Expected return on plan assets
Actuarial loss
Prior service cost
Net pension cost, before special items
Curtailment expense/Settlement (gain) loss
Total net periodic pension (income) cost recognized
Total net periodic pension (income) cost recognized from Discontinued
Operations
Total net periodic pension (income) cost recognized from Continuing
Operations

October 2, 2020

September 27, 2019

5,710 $

39,469
(93,407)
7,578
1,405
(39,245) $
1,341
(37,904) $

7,171 $

52,627
(82,274)
7,854
1,263
(13,359) $
1,933
(11,426) $

September 28, 2018
8,269
49,324
(83,328)
6,655
(257)
(19,337)
1,268
(18,069)

— $

2,282 $

(37,904) $

(13,708) $

3,606

(21,675)

As a result of the adoption of ASU 2017-07, Compensation- Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic
Pension Cost and Net Periodic Postretirement Benefit Cost in the first quarter of fiscal 2019, the service cost component of net periodic pension
expense has been 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 have been reclassified from selling, general and administrative expense and
direct cost of contracts and instead presented in miscellaneous income (expense), net on the Consolidated Statements of Earnings for the year
ended September 28, 2018 in the amount of $24.2 million.

In the first quarter of fiscal 2019, the Company elected to discontinue the CH2M Hill Retiree Medical Plan and the OMI Retiree Medical

Plan, effective December 31, 2018. Lump sum payments were made to participants in fiscal 2019, resulting in a plan settlement and related
settlement gain of $35.0 million recognized in fiscal 2019.

On January 1, 2019, the CH2M Hill Pension Plan and the CH2M Hill IDC Pension Plan merged into the Company's Sverdrup Pension Plan.

The newly combined plan is called the Jacobs Consolidated Pension Plan.

Due to a ruling by the High Court in the United Kingdom regarding equalization between men and women of a tranche of pension (the

Guaranteed Minimum Pension) accrued between 1990 and 1997, Jacobs measured the estimated impact of this ruling in its consolidated financial
statements, resulting in an increase of approximately $38.2 million in the ASC 715 balance sheet liability in fiscal 2019, with an offset to other
comprehensive income, net of tax. Additionally, the Company recognized an additional $1.5 million in additional net periodic benefit cost during the
year ended September 27, 2019 as a result of the ruling.

F-46

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Multiemployer Plans

In the U.S. and various other countries, we contribute to trusteed pension plans covering hourly and certain salaried employees under

industry-wide agreements. Contributions are based on the hours worked by employees covered under these agreements and are charged to direct
costs of contracts on a current basis.

The majority of the contributions the Company makes to multiemployer pension plans are outside the U.S. With respect to these
multiemployer plans, the Company's liability to fund these plans is generally limited to the contributions we are required to make under collective
bargaining agreements.

Based on our review of our multiemployer pension plans under the guidance provided in ASU 2011-09— Compensation-Retirement
Benefits-Multiemployer Plans, we have concluded that none of the multiemployer pension plans into which we contribute are individually significant
to our Consolidated Financial Statements. Additionally, in fiscal year 2019, all Canadian and some US and European multiemployer plans were sold
in connection with the ECR sale, which resulted in a year over year decrease in contributions made.

The following table presents the Company’s contributions to these multiemployer plans for the years ended October 2, 2020, September 27,

2019 and September 28, 2018 (in thousands):

Canada
Europe
United States
Contributions to multiemployer pension plans

October 2, 2020

September 27, 2019

September 28, 2018

— $

1,922
6,637
8,559 $

16,625 $
9,413
7,149
33,187 $

36,354
10,677
9,536
56,567

F-47

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

14. Business Combinations

John Wood Group's Nuclear Business

On March 6, 2020, a subsidiary of Jacobs completed the acquisition of the nuclear consulting, remediation and program management
business of John Wood Group, a U.K.-based energy services company, for an enterprise value of £246 million, or approximately $317.9 million, less
cash acquired of $24.3 million, as updated for additional working capital adjustments. The John Wood Group nuclear business allows Jacobs to
further expand its lifecycle nuclear services business. The following summarizes the fair values of John Wood Group's assets acquired and liabilities
assumed as of the acquisition date (in millions):

Assets

Cash and cash equivalents
Receivables
Other current assets
Property, equipment and improvements, net
Goodwill
Identifiable intangible assets
Miscellaneous

Total Assets

Liabilities

Accounts payable, accrued expenses and other current
liabilities
Long term liabilities

Total Liabilities

Net assets acquired

24.3
75.9
5.2
8.3
205.8
80.0
19.4
418.9

71.8
29.2

101.0
317.9

The purchase price allocation is based upon preliminary information and is subject to change when additional information is obtained.

Goodwill recognized 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 John Wood Group's assets acquired and liabilities assumed. The final purchase price allocation
could result in adjustments to certain assets and liabilities, including the residual amount allocated to goodwill.

Identified intangibles include customer relationships, contracts and backlog and developed technology. The customer relationships,

Fair value measurements relating to the John Wood Group nuclear business are made primarily using Level 3 inputs including discounted

cash flow techniques. Fair value is estimated using inputs primarily for the income approach, which include the use of both the multiple period
excess earnings method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) the estimated life
the asset will contribute to cash flows, such as attrition rate of customers or remaining contractual terms, (ii) profitability and (iii) the estimated
discount rate that reflects the level of risk associated with receiving future cash flows. Other personal property assets, such as furniture, fixtures and
equipment, are valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation.

No summarized unaudited pro forma results are provided for the John Wood Group nuclear business due to the immateriality of this

acquisition relative to the Company's consolidated financial position and results of operations.

F-48

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

KeyW

On June 12, 2019, Jacobs completed the acquisition of The KeyW Holding Corporation (“KeyW”), a U.S. based national security solutions

provider to the intelligence, cyber, and counterterrorism communities by acquiring 100% of the outstanding shares of KeyW common stock (the
"KeyW acquisition"). The KeyW acquisition allows Jacobs to further expand its government services business. The Company paid total
consideration of $902.6 million which was comprised of approximately $604.2 million in cash to the former stockholders and certain equity award
holders of KeyW and the assumption of KeyW’s debt of $298.4 million. The Company repaid all of KeyW's debt by the end of the fourth fiscal quarter
of 2019.

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

Assets
Cash and cash equivalents
Receivables
Inventories, net
Prepaid expenses and other
Property, equipment and improvements, net
Deferred tax asset and other
Goodwill
Identifiable intangible assets

Total Assets

Liabilities
Accounts payable
Accrued expenses
Short term debt
Other current liabilities
Other non-current liabilities
Total Liabilities

Net assets acquired

29.1
79.1
19.3
2.4
24.5
37.8
615.6
179.0
986.8

8.3
69.1
298.4
3.9
2.9
382.6
604.2

Goodwill recognized results from a substantial assembled workforce, which does not qualify for separate recognition, as well as expected

future synergies from combining operations. Goodwill of $136.3 million is expected to be deductible for tax purposes. The Company has completed
its final assessment of the fair values of the acquired assets and liabilities of KeyW. Since the initial preliminary estimates reported in the third
quarter of fiscal 2019, the Company has updated certain amounts reflected in the final purchase price allocation, as summarized in the fair values of
KeyW assets acquired and liabilities assumed as of the acquisition date as set forth above.

Identified intangibles include customer relationships, contracts and backlog and developed technology. The customer relationships,

contracts and backlog intangible represents the fair value of existing contracts, underlying customer relationships and backlog. The customer
relationships, contracts and backlog intangible, and the developed technology intangible have lives of 10 and 12 years, respectively. Other intangible
liabilities consist of the fair value of office leases and have a weighted average life of approximately 9 years.

Fair value measurements relating to the KeyW acquisition are made primarily using Level 3 inputs including discounted cash flow

techniques. Fair value is estimated using inputs primarily for the income approach, which include the use of both the multiple period excess earnings
method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) the estimated life the asset will
contribute to cash flows, such as attrition rate of customers or remaining contractual terms, (ii) profitability and (iii) the estimated discount rate that
reflects the level of risk associated with receiving future cash flows. Other personal property assets, such as furniture, fixtures and equipment, are
valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation.

F-49

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

For purposes of our comparative fiscal 2020 and 2019 reporting requirements in this Form 10-K, the following presents summarized
unaudited pro forma operating results of the Company for the year ended September 27, 2019 assuming that the June 12, 2019 acquisition of KeyW
had occurred at the beginning of fiscal 2018 for pro forma purposes. These pro forma operating results are presented for illustrative purposes only
and are not indicative of the operating results that would have been achieved had the related events occurred on such date (in millions, except per
share data):

Revenues

Net earnings of the Group from Continuing Operations

Net earnings (loss) attributable to Jacobs from continuing operations
Net earnings (loss) attributable to Jacobs from continuing operations per share:
Basic earnings (loss) from continuing operations per share

Diluted earnings (loss) from continuing operations per share

For the Year Ended
September 27, 2019

13,068.7

326.0

303.0

2.19

2.17

Included in the table above are the unaudited pro forma operating results of continuing operations. Also, income tax expense (benefit) for

the fiscal year pro forma period ended September 27, 2019 was $41.3 million.

CH2M

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
"CH2M acquisition"). The purpose of the CH2M acquisition was 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 (excluding $315.2 million of cash acquired) 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 CH2M acquisition, the Company also assumed CH2M’s
revolving credit facility and second lien notes, including a $20.0 million prepayment penalty, which totaled approximately $700 million of long-term
debt. Immediately following the effective time of the CH2M 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):

F-50

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Assets

Cash and cash equivalents
Receivables
Prepaid expenses and other
Property, equipment and improvements, net
Goodwill
Identifiable intangible assets:

Customer relationships, contracts and backlog
Lease intangible assets

Total identifiable intangible assets

Miscellaneous

Total Assets

Liabilities

Notes payable
Accounts payable
Accrued liabilities
Contract liabilities
Identifiable intangible liabilities:
Lease intangible liabilities

Long-term debt
Other deferred liabilities
Total Liabilities
Noncontrolling interests

Net assets acquired

315.2
1,120.6
72.7
175.1
3,165.5

412.3
4.4
416.7
530.8
5,796.6

2.2
309.6
787.4
260.8

9.6
706.0
659.0
2,734.6
(37.3)
3,024.7

Goodwill recognized 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. During the first quarter
of fiscal 2019, the Company completed its final assessment of the fair values of the acquired assets and liabilities of CH2M. Accrued liabilities and
other deferred liabilities include approximately $404.7 million related to estimates for various legal and other pre-acquisition contingent liabilities
accounted for under ASC 450. See Note 18- Contractual Guarantees, Litigation, Investigations and Insurance relating to CH2M contingencies.

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 9 to 11 years (weighted average life of approximately 10 years). Other intangible
assets and liabilities primarily consist of the fair value of office leases and have a weighted average life of approximately 10 years.

Fair value measurements relating to the CH2M acquisition are made using Level 3 inputs including discounted cash flow techniques. Fair
value is estimated using inputs primarily from the income approach, which include the use of both the multiple period excess earnings method and
the relief from royalties method. The significant assumptions used in estimating fair value include (i) the estimated life the asset will contribute to
cash flows, such as attrition rate of customers or remaining contractual terms, (ii) profitability and (iii) the estimated discount rate that reflect 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.

F-51

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

From the acquisition date of December 15, 2017 through September 28, 2018, CH2M consolidated, including both continuing and

discontinued operations, contributed approximately $3.8 billion in revenue and $185.9 million in pretax income included in the accompanying
consolidated statement of earnings. Included in these results were approximately $99.3 million in pre-tax restructuring and transaction costs.

Transaction costs associated with the CH2M acquisition in the accompanying consolidated statements of earnings for the year ended

September 28, 2018 are comprised of the following (in millions):

Personnel costs
Professional services and other expenses

Total

For the Year Ended
September 28, 2018

50.2
27.5
77.7

Personnel costs above include change of control payments and related severance costs.

The following presents summarized unaudited pro forma operating results assuming that the Company had acquired CH2M at October 1, 2016.
These pro forma operating results are presented for illustrative purposes only and are not indicative of the operating results that would have been
achieved had the related events occurred (in millions). Additionally, these pro forma operating results have not been recast for the sale of our ECR
business.

Revenues

Net earnings

Net earnings (loss) attributable to Jacobs

Net earnings (loss) attributable to Jacobs per share:
Basic earnings (loss) per share
Diluted earnings (loss) per share

For the Year Ended
September 28, 2018

16,012.4

196.3

184.5

1.28

1.27

Included in the unaudited pro forma operating results are charges relating to transaction expenses, severance expense and other items that

are removed from the year ended September 28, 2018 and are reflected in the year ended September 29, 2017 due to the assumed timing of the
transaction. Also, income tax expense (benefit) for the twelve- month pro forma period ended September 28, 2018 was $409.7 million.

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

On April 26, 2019, Jacobs completed the sale of its ECR business to Worley for a purchase price of $3.4 billion consisting of (i) $2.8 billion in cash
plus (ii) 58.2 million ordinary shares of Worley, subject to adjustments for changes in working capital and certain other items (the “ECR sale”). The
stock and asset purchase agreement for the ECR sale contained a restriction on our ability to sell the Worley shares received in the transaction,
which expired in the first fiscal quarter of 2020.

Discontinued Operations

As a result of the ECR sale, substantially all ECR-related assets and liabilities have been 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 Consolidated Statements of Earnings as discontinued operations for all periods presented. As of the year ended October 2, 2020, all
of the ECR business to be sold under the terms of the sale has been conveyed to Worley and as such, no amounts remain held for sale.

F-52

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Summarized Financial Information of Discontinued Operations

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

Revenues
Direct cost of contracts
Gross profit
Selling, general and administrative expenses
Operating Profit (Loss)
Gain on sale of ECR business
Other (expense) income, net
Earnings Before Taxes from Discontinued Operations
Income Tax Expense

Net Earnings of the Group from Discontinued Operations

For the Years Ended

(1)

October 2, 2020

September 27, 2019

September 28,
2018

11,235 $
(6,152)
5,083
32,668
37,751
110,236
515
148,502
(10,518)
137,984 $

2,725,699 $
(2,338,113)
387,586
(320,264)
67,322
935,110
(47,390)
955,042
(395,828)
559,214 $

4,404,873
(3,756,263)
648,610
(412,282)
236,328
—
(12,604)
223,724
(55,931)
167,793

(1) The ECR business was sold April 26, 2019, therefore the year ended September 27, 2019 includes only seven months of results.

Selling, general and administrative expenses includes a reduction for net insurance recoveries of approximately $40.0 million for the year ended
October 2, 2020 recorded in connection with the Nui Phao ("NPMC") legal matter described in Note 18- Contractual Guarantees, Litigations,
Investigations and Insurance. Additionally, the year ended September 27, 2019 includes a charge for the award and recovery of costs, estimated
related interest and attorneys' fees related to the NPMC legal matter. For the year ended October 2, 2020, the gain on sale of $110.2 million relates
mainly to the recognition of the deferred gain for the delayed transfer of the ECR-related assets and liabilities of the two international entities
discussed below, adjustments for working capital and certain other items in connection with the ECR sale and additional income for the release of a
deferred gain upon achievement of the IT Migration Date described below in connection with the delivery to Worley of certain IT application and
hardware assets related to the ECR business. For the year ended September 27, 2019, other expense (income), net was comprised of $35.0 million
in interest expense relating to the Nui Phao settlement, $6.0 million in foreign currency revaluations, $9.6 million in loss on the sale of a joint venture
which is offset by $4.4 million in miscellaneous income. For the year ended September 28, 2018, other expense (income), net was comprised of an
approximate $21.0 million loss on the sale of the Guimar joint venture, offset by $8.4 million in miscellaneous income.

The following tables represent the assets and liabilities held for sale (in thousands):

September 27, 2019

Cash and cash equivalents
Receivables and contract assets
Prepaid expenses and other

Current assets held for sale (1)

Property, Equipment and Improvements, net
Goodwill
Intangibles, net
Miscellaneous

Noncurrent assets held for sale (1)

—
871
81
952

1,643
24,896
—
439
26,978

F-53

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Notes payable
Accounts payable
Accrued liabilities
Contract liabilities

Current liabilities held for sale (1)

—
—
2,495
78
2,573

(1)

At September 27, 2019, current assets held for sale and noncurrent assets held for sale were included in the within prepaid expenses and other and
miscellaneous, respectively. At September 27, 2019, current liabilities held for sale and noncurrent liabilities held for sale were included within accrued
liabilities and other deferred liabilities, respectively.

The significant components included in our Consolidated Statements of Cash Flows for discontinued operations are as follows (in

thousands):

Depreciation and amortization:
Property, equipment and improvements
Intangible assets
Additions to property and equipment
Stock based compensation

Gain on Sale and Deferred Gain

For the Year Ended
September 27, 2019

$
$
$
$

2,110
614
(9,204)
10,852

As a result of the ECR sale, the Company recognized a pre-tax gain of $1.0 billion, $935.1 million of which was recognized in fiscal 2019 and
$110.2 million of which is included in Net Earnings of the Group from Discontinued Operations on the consolidated statement of earnings for the
year ended October 2, 2020, which is further discussed below.

Upon closing the ECR sale, the Company retained a noncontrolling interest (with significant influence) in P&PS-related activities in one
international legal entity acquired by Worley. The fair value of the Company’s retained interest in the net assets and liabilities of this entity was
estimated at $33.0 million and recorded at closing. For another international legal entity, the closing and transfer of ECR-related assets to Worley
were set to occur at a future date. At the time of the ECR sale, the Company allocated proceeds received to these deferred closing items on a
relative fair value basis and recognized a deferred gain of $34.4 million. During the second fiscal quarter of 2020, the delayed transfer of the ECR-
related assets and liabilities of these two international entities occurred, and as a result, previously deferred gain amounts were recognized.

In addition to consideration received for the sale of the ECR business, the proceeds received included advanced consideration for the Company
to deliver IT application and related hardware assets at a future date (“IT Migration Date”) to Worley upon completion of the interim transition
services provided under the TSA, described further below. This deliverable of IT assets is considered to be a separate element of the ECR business
sale transaction, and accordingly, we have allocated a portion of the proceeds received of $95.3 million on a relative fair value basis to this separate
deliverable and recognized deferred income. Upon completion and acceptance of this deliverable by Worley in December 2019, the deferred
proceeds were recognized in earnings from discontinued operations, along with expenses associated with any costs incurred and deferred by the
Company for this deliverable.

Investment in Worley Stock

As discussed above, the Company received 58.2 million in ordinary shares of Worley in connection with the ECR sale. Pursuant to the purchase
agreement for the ECR sale, 51.4 million of the shares were considered "restricted" during a lock-up period ending in December 2019. During the
lock-up period, Jacobs could not, without Worley's consent, directly or indirectly dispose of the "restricted" shares. The remaining 6.8 million shares
not considered "restricted" were sold in fiscal 2019, netting a loss of $4.9 million, which was recognized in miscellaneous income (expense), net.
Dividend income and unrealized gains and losses on changes in fair value of Worley shares are recognized in miscellaneous income (expense), net
in continuing operations.

F-54

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The Company's investment in Worley is measured at fair value through net income as it is an equity investment with a readily determinable fair
value based on quoted market prices. The 51.4 million ordinary shares currently held are recorded within investment in equity securities in the
Company's Consolidated Balance Sheets at their estimated fair value, which is $347.5 million as of October 2, 2020 and $451.1 million as of
September 27, 2019. For the years ended October 2, 2020 and September 27, 2019, the Company recognized a loss of $103.6 million and a loss of
$78.1 million, respectively, associated with share price and currency changes on this investment, as well as dividend income related to the equity
investment in the amount of $16.9 million and $5.2 million, respectively. Quoted market prices are available for these securities in an active market
and therefore categorized as a Level 1 input.

Transition Services Agreement

Upon closing of the ECR sale, the Company entered into a Transition Services Agreement (the "TSA") with Worley pursuant to which the
Company, on an interim basis, provided various services to Worley including executive consultation, corporate, information technology, and project
services. The initial term of the TSA began immediately following the closing of the ECR sale on April 26, 2019 and expired in April 2020, although
the parties mutually agreed to extend certain of the services for additional time periods beyond the initial term. All services under the TSA were
terminated in October 2020. Pursuant to the terms of the TSA, the Company received payments for the interim services which approximate costs
incurred to perform the services. The Company has recognized costs recorded in SG&A expense incurred to perform the TSA, offset by $15.8
million and $35.4 million in TSA related income for such services that is reported in miscellaneous income (expense) in continuing operations for the
year ended October 2, 2020 and September 27, 2019, respectively, before inclusion of certain incremental outside service support costs agreed to
be shared equally by the parties.

F-55

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

16. Restructuring and Other Charges

During fiscal 2020, the Company implemented certain restructuring and separation initiatives, including the Company's fourth quarter fiscal

2020 transformation initiatives relating to real estate and other staffing programs. The activities of these initiatives are expected to continue into
fiscal 2023.

During fiscal 2019 and continuing into fiscal 2020, the Company implemented certain restructuring and separation initiatives associated with

the ECR sale, the KeyW acquisition, and other related cost reduction initiatives. Additionally, in fiscal 2020, the Company implemented certain
restructuring and separation initiatives associated with the acquisition of John Wood Group's nuclear business. The restructuring activities and
related costs were comprised mainly of separation and lease abandonment and sublease programs, while the separation activities and costs were
mainly related to the engagement of consulting services and internal personnel and other related costs dedicated to the Company’s ECR-business
separation. The activities of these initiatives are expected to be substantially completed before the end of fiscal 2021.

During the fourth fiscal quarter of 2017, the Company implemented certain restructuring and pre-integration plans associated with the then-
pending acquisition of CH2M, which closed on December 15, 2017. The restructuring activities and related costs under these plans were comprised
mainly of severance and lease abandonment programs, while the integration activities and costs were mainly related to the engagement of
professional services and internal personnel and other related costs dedicated to the Company’s integration management efforts. Following the
closing of the CH2M acquisition, these activities have continued through fiscal 2020 and are expected to be substantially completed before the end
of fiscal 2022.

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 by LOB in connection with the CH2M, KeyW and John Wood
Group nuclear business acquisitions, the ECR sale and the Company's fourth quarter fiscal 2020 transformation initiatives relating to real estate and
other staffing programs for the year ended October 2, 2020, the CH2M and KeyW acquisitions and the ECR sale for the year ended September 27,
2019 and the CH2M acquisition for the year ended September 28, 2018 (in thousands):

Critical Mission Solutions
People & Places Solutions
Corporate

Continuing Operations (1)

Energy, Chemicals and Resources (included in
Discontinued Operations)

Total

October 2, 2020

September 27, 2019

September 28, 2018

24,083 $

170,631
129,469
324,183

—

324,183 $

17,989
108,835
184,646
311,470

(138)
311,332 $

20,254
56,238
77,148
153,640

37,166
190,806

(1)

For the years ended October 2, 2020, September 27, 2019 and September 28, 2018, amounts include $321.6 million, $337.0 million and $154.0 million,
respectively, in items impacting operating profit, along with items recorded in other income (expense), net, which are the loss on settlement of the CH2M
portion of the U.S. pension plan of $2.1 million for the year ended October 2, 2020, the gain on the settlement of the CH2M retiree medical plans of $35.0
million for the year ended September 27, 2019 and the write-off of fixed assets related to restructured leases of $10 million for the year ended
September 27, 2019 and other miscellaneous adjustments of $(0.5) million, $0.5 million and $0.3 million for the years ended October 2, 2020,
September 27, 2019 and September 28, 2018, respectively. See Note 19- Segment Information.

The activity in the Company’s accrual for the Restructuring and other charges including the program activities described above for the year

ended October 2, 2020 is as follows (in thousands):

Balance at September 27, 2019
Transfer to lease right-of-use asset as a result of adoption of ASC 842 (1)
Net Charges
Payments & Usage

Balance at October 2, 2020

162,702
(116,797)
324,183
(317,234)
52,854

(1)

In addition, there was $24.6 million in lease cease-use liabilities relating to 2015 restructuring initiatives which were reclassified to ROU asset balances in
accordance with the adoption of ASC 842, see Note 10- Leases. The 2015 restructuring initiatives are no longer active and therefore activity associated
with lease cease-use liabilities for those initiatives is not included in the table.

F-56

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The following table summarizes the Restructuring and other charges by major type of costs for the years ended October 2, 2020,

September 27, 2019 and September 28, 2018 (in thousands):

October 2, 2020

September 27, 2019

September 28, 2018

Lease Abandonments and Impairments
Voluntary and Involuntary Terminations
Outside Services
Other (1)

Total

151,150 $
53,484
88,476
31,073
324,183 $

99,976 $
33,742
133,148
44,604
311,470 $

61,526
29,056
35,987
27,071
153,640

(1)

Includes $35.0 million in pre-tax gains associated with the Company's CH2M retiree medical plan settlement during the year ended September 27, 2019.

Cumulative amounts since 2017 incurred to date under our various restructuring and other activities described above by each major type of

cost as of October 2, 2020 are as follows (in thousands):

Lease Abandonments and Impairments
Voluntary and Involuntary Terminations
Outside Services
Other (1)

Total

313,517
128,969
259,124
100,314
801,924

(1)

Includes $35.0 million in pre-tax gains associated with the Company's CH2M retiree medical plan settlement during the year ended September 27, 2019.

F-57

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

17. Commitments and Contingencies and Derivative Financial Instruments

Derivative Financial Instruments

The Company is exposed to interest rate risk under its variable rate borrowings and additionally, due to the nature of the Company's
international operations, we are at times exposed to foreign currency risk. As such, we sometimes enter into foreign exchange contracts and interest
rate contracts in order to limit our exposure to fluctuating foreign currencies and interest rates.

In fiscal 2020 we entered into interest rate swap agreements with a notional value of $783.7 million as of October 2, 2020 to manage the
interest rate exposure on our variable rate loans. Additionally, we entered into a cross-currency swap agreement with a notional value of $127.8
million to manage the interest rate and foreign currency exposure on our USD borrowings by a European subsidiary. By entering into the swap
agreements, the Company converted the LIBOR rate based liability into a fixed rate liability and, for the cross currency swap, our LIBOR rate based
borrowing in USD to a fixed rate Euro liability, for periods ranging from three and a half to ten years. Under the interest rate swap agreements, the
Company receives the one month LIBOR rate and pays monthly a fixed rate ranging from .704% to 1.116%, and under the cross currency swap
agreement, the Company receives the one month LIBOR rate plus 0.875% in USD and pays monthly a Euro fixed rate of .726% to .746% for the
term of the swaps. The swaps were designated as cash-flow hedges in accordance with ASC 815, Derivatives and Hedging. The fair value of the
interest rate and cross currency swaps at October 2, 2020 was $(31.5) million, which is included in other deferred liabilities on the consolidated
balance sheet. The unrealized net losses on these interest rate and cross currency swaps was $14.6 million, net of tax, and was included in
accumulated other comprehensive income as of October 2, 2020.

Additionally, at October 2, 2020, the Company held foreign exchange forward contracts in currencies that support our operations, including
British Pound, Euro, Australian Dollar and other currencies, with notional values of $393.7 million at October 2, 2020. The length of these contracts
currently ranges from one to twelve months. The fair value of the foreign exchange contracts at October 2, 2020 was $53.5 million, which is included
in current assets within receivables and contract assets on the consolidated balance sheet and with associated income statement impacts included
in miscellaneous income (expense) in the consolidated statement of earnings.

The fair value measurements of these derivatives are being made using Level 2 inputs under ASC 820, Fair Value Measurement, as the

measurements are based on observable inputs other than quoted prices in active markets. We are exposed to risk from credit-related losses
resulting from nonperformance by counterparties to our financial instruments. We perform credit evaluations of our counterparties under forward
exchange and interest rate contracts and expect all counterparties to meet their obligations. We have not experienced credit losses from our
counterparties.

Letters of Credit

At October 2, 2020, the Company had issued and outstanding approximately $263.0 million in LOCs and $2.3 billion in surety bonds. Of the
outstanding LOC amount, $2.3 million has been issued under the Revolving Credit Facility and $260.7 million are issued under separate, committed
and uncommitted letter-of-credit facilities.

18. Contractual Guarantees, Litigation, Investigations and Insurance

In the normal course of business, we make contractual commitments some of which are supported by separate guarantees; and on
occasion we are a party in a litigation or arbitration proceeding. The litigation or arbitration in which we are involved primarily includes personal injury
claims, professional liability claims and breach of contract claims. Where we provide a separate guarantee it is strictly in support of the underlying
contractual commitment. Guarantees take various forms including surety bonds required by law, or standby letters of credit ("LOC") (also referred to
as “bank guarantees”) or corporate guarantees given to induce a party to enter into a contract with a subsidiary. Standby LOCs are also used as
security for advance payments or in various other transactions. The guarantees have various expiration dates ranging from an arbitrary date to
completion of our work (e.g., engineering only) to completion of the overall project. See Note 17- Commitments and Contingencies and Derivative
Financial Instruments for more information surrounding LOCs and surety bonds.

F-58

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

We maintain insurance coverage for most insurable aspects of our business and operations. Our insurance programs have varying

Additionally, as a contractor providing services to the U.S. federal government we are subject to many types of audits, investigations and

claims by, or on behalf of, the government including with respect to contract performance, pricing, cost allocations, procurement practices, labor
practices and socioeconomic obligations. 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.

Our Consolidated Balance Sheets include amounts representing our probable estimated liability relating to such claims, guarantees,

litigation, 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. Insurance recoveries are recorded as assets if recovery is probable and estimated liabilities are
not reduced by expected insurance recoveries.

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 a material adverse effect on our consolidated financial
statements, beyond amounts currently accrued.

On September 30, 2015, Nui Phao Mining Company Limited (“NPMC”) commenced arbitration proceedings against Jacobs E&C Australia

Pty Limited (“Jacobs E&C”) in Singapore before the Singapore International Arbitration Centre. Jacobs E&C was engaged by NPMC for the
provision of management, design, engineering, and procurement services for a Nui Phao mine/mineral processing project in Vietnam as part of the
Company’s former Energy, Chemicals & Resources (“ECR”) line of business. A three-week hearing on the merits concluded on December 15, 2017,
and on March 28, 2019, the arbitration panel issued a decision finding against Jacobs E&C. On August 30, 2019, NPMC and Jacobs E&C settled all
of the proceedings related to this matter. Under the terms of the settlement, Jacobs E&C made a payment to NPMC in the amount of $130.0 million
in the fourth fiscal quarter of 2019. The settlement otherwise remains confidential. During the year ended October 2, 2020, the Company recognized
the reduction of $40.0 million of selling, general and administrative expenses in discontinued operations as a result of the realization of related net
insurance recoveries. Under the terms of the sale of the Company's ECR business to Worley on April 26, 2019, the Company retained liability with
respect to this matter.

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

contractor UGL Infrastructure Pty Limited. The joint venture entered into a Consortium Agreement with General Electric and GE Electrical
International Inc. The Consortium was awarded a subcontract by JKC Australia LNG Pty Limited ("JKC") for the engineering, procurement,
construction and commissioning of a 360 MW Combined Cycle Power Plant for INPEX Operations Australia Pty Limited at Blaydin Point, Darwin,
NT, Australia. 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 and is seeking
compensatory damages in the amount of approximately $530.0 million for repudiatory breach or, in the alternative, seeking damages for unresolved
contract claims and change orders. JKC is seeking damages in excess of $1.7 billion and has drawn on the bonds. In light of the COVID-19
pandemic, a November 2020 date for commencement of the hearing has been vacated and the hearing has been rescheduled for opening
arguments in April and the remaining proceedings in July and August 2021. Although an earlier decision is possible, no decision is expected before
2022. In September 2018, JKC filed a declaratory judgment action in Western Australia alleging that the entities which executed parent company
guaranties for the Consortium, including CH2M Hill Companies, Ltd., have an obligation to pay JKC’s ongoing costs to complete the project after
termination. A hearing on that matter was held in March 2019, and a decision in favor of the Consortium was issued. JKC appealed the decision, a
hearing on the

F-59

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

appeal took place in March 2020 and a decision was handed down on July 22, 2020 denying JKC’s appeal in its entirety. If the Consortium is found
liable, these matters 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 pursuing its affirmative
claims against JKC, 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, in excess of the current reserve for this matter.
See Note 14- Business Combinations, for further information related to CH2M contingencies.

On December 22, 2008, a coal fly ash pond at the Kingston Power Plant of the Tennessee Valley Authority ("TVA") was breached, releasing

fly ash waste into the Emory River and surrounding community. In February 2009, TVA awarded a contract to the Company to provide project
management services associated with the clean-up. All remediation and dredging were completed in August 2013 by other contractors under direct
contracts with TVA. The Company did not perform the remediation, and its scope was limited to program management services. Certain employees
of the contractors performing the cleanup work on the project filed lawsuits against the Company beginning in August 2013, alleging they were
injured due to the Company's failure to protect the plaintiffs from exposure to fly ash, and asserting related personal injuries. There are currently six
separate cases pending against the Company. The primary case, Greg Adkisson, et al. v. Jacobs Engineering Group Inc., case No. 3:13-CV-505-
TAV-HBG, filed in the U.S. District Court for the Eastern District of Tennessee, consists of 10 consolidated cases. This case and the related cases
involve several hundred plaintiffs that have been filed against the Company by employees of the contractors that completed the remediation and
dredging work. The cases are at various stages of litigation, and several of the cases are currently stayed pending resolution of other cases.
Separately, in May 2019, Roane County and the cities of King and Herriman filed a claim against TVA and the Company alleging that they misled
the public about risks associated with the released fly ash. In October 2020, the Court granted Jacobs and TVA’s motion to dismiss with prejudice
the Roane County litigation based on the expiration of the applicable statute of limitations. In addition, in November 2019, a resident of Roane
County filed a putative class action against TVA and the Company alleging they failed to adequately warn local residents about risks associated with
the released fly ash. In February 2020, the Company learned that the district attorney in Roane County recommended that the Tennessee Bureau of
Investigation investigate issues pertaining to clean up worker safety at Kingston, with that investigation still pending. There has been no finding of
liability against the Company or that any of the alleged illnesses are the result of exposure to fly ash in any of the above matters. The Company
disputes the claims asserted in all of the above matters and is vigorously defending these claims. The Company does not expect the resolution of
these matters to have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

On October 31, 2019, the Company received a request from the Enforcement Division of the Securities and Exchange Commission (the

"SEC") for the voluntary production of certain information and documents. The information and documents sought by the SEC primarily relate to the
operations of a joint venture in Morocco which was at one time partially-owned by the Company (and subsequently divested), including in respect of
possible corrupt practices. The Company is fully cooperating with the SEC and is producing the requested information and documents in its
possession. 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.

19. Segment Information

The Company's two operating segments and global lines of business ("LOBs") are as follows: Critical Mission Solutions ("CMS") and People

& Places Solutions ("P&PS"), with the previous Energy, Chemicals and Resources ("ECR") LOB reported as discontinued operations. For further
information on ECR, refer to Note 15- Sale of Energy, Chemicals and Resources ("ECR") Business.

The Company’s Chair and Chief Executive Officer is the Chief Operating Decision Maker (“CODM”) and can evaluate the performance of

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

Under this organization, the sales function is managed by LOB, and accordingly, the associated cost is embedded in the segments and

reported to the respective head of each LOB. 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

F-60

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

which, we believe, effectively attribute the cost of these support functions to the revenue generating activities of the Company on a rational basis.
The cost of the Company’s cash incentive plan, the Leadership Performance Plan ("LPP"), formerly named the Management Incentive Plan, and the
expense associated with the Jacobs 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 other corporate expenses).

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

resources. The Company generally does not track assets by LOB, nor does it provide such information to the CODM.

The CODM evaluates the operating performance of our LOBs using segment operating profit, which is defined as margin less “corporate

charges” (e.g., the allocated amounts described above). The Company incurs certain Selling, General and Administrative costs (“SG&A”) that relate
to its business as a whole which are not allocated to the LOBs.

The following tables present total revenues and segment operating profit for each reportable segment (in thousands) and includes a
reconciliation of segment operating profit to total U.S. GAAP operating profit by including certain corporate-level expenses and expenses relating to
the restructuring and other charges and transaction costs associated with the CH2M transaction and integration costs and the ECR sale (in
thousands).

Revenues from External Customers:

Critical Mission Solutions
People & Places Solutions
Total

Segment Operating Profit:

Critical Mission Solutions (1)
People & Places Solutions (2)

Total Segment Operating Profit

Other Corporate Expenses (3)
Restructuring, Transaction and Other Charges

Total U.S. GAAP Operating Profit

Total Other (Expense) Income, net (4)

Earnings from Continuing Operations Before Taxes

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

4,965,952 $
8,601,023
13,566,975 $

4,551,162 $
8,186,706
12,737,868 $

3,725,365
6,854,408
10,579,773

October 2, 2020

For the Years Ended
September 27, 2019

September 28, 2018

372,070 $
740,707
1,112,777
(249,391)
(327,413)
535,973
(94,770)
441,203 $

310,043 $
714,394
1,024,437
(264,351)
(355,235)
404,851
(53,892)
350,959 $

255,718
527,900
783,618
(161,788)
(234,387)
387,443
(56,462)
330,981

(1)

(2)

(3)

(4)

Includes $15.0 million in charges during the year ended September 28, 2018 associated with a legal matter.

Includes $25.0 million in charges associated with a certain project for the year ended September 27, 2019.

F-61

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Included in other corporate expenses in the above table are costs and expenses which relate to general corporate activities as well as

corporate-managed benefit and insurance programs. Such costs and expenses include: (i) those elements of SG&A expenses relating to the
business as a whole; (ii) those elements of our incentive compensation plans relating to corporate personnel whose other compensation costs are
not allocated to the LOBs; (iii) the amortization of intangible assets acquired as part of business combinations; (iv) the quarterly variances between
the Company’s actual costs of certain of its self-insured integrated risk and employee benefit programs and amounts charged to the LOBs; and (v)
certain adjustments relating to costs associated with the Company’s international defined benefit pension plans. In addition, other corporate
expenses may also include from time to time certain adjustments to contract margins (both positive and negative) associated with projects where it
has been determined, in the opinion of management, that such adjustments are not indicative of the performance of the related LOB.

20. Selected Quarterly Information — Unaudited

The following table presents selected quarterly financial information. (in thousands, except for per share amounts):

October 2, 2020
Revenues
Operating profit (a)
Earnings (Loss) from Continuing Operations Before
Taxes
Net Earnings (Loss) of the Group from Continuing
Operations
Net Earnings (Loss) Attributable to Jacobs from
Continuing Operations
Net Earnings (Loss) Attributable to Jacobs
Earnings per share:
Basic Net Earnings (Loss) from Continuing Operations
Per Share
Basic Net Earnings from Discontinued Operations Per
Share
Basic Earnings (Loss) Per Share

Diluted Net Earnings (Loss) from Continuing Operations
Per Share
Diluted Net Earnings (Loss) from Discontinued
Operations Per Share
Diluted Earnings (Loss) Per Share

September 27, 2019

Revenues

Operating profit (a)
Earnings from Continuing Operations Before Taxes
Net Earnings of the Group from Continuing Operations
Net Earnings Attributable to Jacobs from Continuing
Operations
Net Earnings Attributable to Jacobs
Earnings per share:
Basic Net Earnings from Continuing Operations Per
Share
Basic Net Earnings (Loss) from Discontinued Operations
Per Share
Basic Earnings Per Share

Diluted Net Earnings from Continuing Operations Per
Share
Diluted Net Earnings (Loss) from Discontinued
Operations Per Share
Diluted Earnings Per Share

$
$

$
$
$
$

$
$

First
Quarter

Second
Quarter

Third
Quarter

Fourth
Quarter

Fiscal
Year

3,360,049
151,345

(b)

254,169

185,680

179,423
257,010

(b)

1.35

0.58
1.93

1.33

(b)

0.58
1.91

(c)

3,083,788
113,130
92,191
69,433

64,894
124,296

(c)

0.45

0.42
0.87

0.45

(c)

0.41
0.86

$
$

$
$
$
$

$
$

3,427,180
167,778

(b)

(176,805)

(115,683)

(121,967)
(92,087)

(b)

(0.92)

0.23
(0.69)

(0.92)

(b)

0.23
(0.69)

(c)

3,091,596
102,681
111,832
119,779

114,755
56,917

(c)

0.83

(0.42)
0.41

0.82

(c)

(0.41)
0.41

$
$

$
$
$
$

$
$

3,260,057
194,376

(b)

303,681

236,007

226,886
244,929

(b)

1.74

0.14
1.88

1.73

(b)

0.14
1.87

(c)

3,169,622
89,954
93,399
95,380

89,365
524,442

(c)

0.65

3.18
3.83

0.65

(c)

3.15
3.80

$
$

$
$
$
$

$
$

3,519,689
22,474

(b)

60,158

79,879

69,519
81,993

(b)

0.53

0.10
0.63

0.53

(b)

(c)

0.09
0.62

(c)

3,392,862
99,086
53,537
29,413

21,946
142,324

(c)

0.16

0.89
1.06

0.16

(c)

(d)

0.88
1.04

$
$

$
$
$
$

$
$

13,566,975
535,973

441,203

385,883

353,861
491,845

2.69

1.05
3.74

2.67

1.04
3.71

12,737,868
404,851
350,959
314,005

290,960
847,979

2.11

4.03
6.14

2.09

4.00
6.08

(a)

Operating profit represents revenues less (i) direct costs of contracts and (ii) selling, general and administrative expenses.

F-62

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

(b)

(c)

Includes $85.2 million in operating profit and $(17.7) million in net earnings from continuing operations attributable to Jacobs, or $(0.13) per diluted share
from continuing operations in the first quarter of fiscal 2020; includes $68.7 million in operating profit, $308.2 million in net loss from continuing operations
attributable to Jacobs, or $2.31 per diluted share from continuing operations in the second quarter of fiscal 2020; includes $44.6 million in operating profit
and $(61.6) million in net earnings from continuing operations attributable to Jacobs, or $(0.47) per diluted share from continuing operations in the third
quarter of fiscal 2020; includes $235.4 million in operating profit and $144.8 million in both net earnings from continuing operations attributable to Jacobs,
and net earnings attributable to Jacobs, or $1.10 per diluted share in the fourth quarter of fiscal 2020 related to restructuring, transaction and other charges
(including the Company's fourth quarter fiscal 2020 transformation initiatives relating to real estate and other staffing programs), amortization of intangibles
and fair value adjustments related to our investment in Worley stock (net of Worley stock dividend) and certain foreign currency revaluations relating to
ECR sale. On a year to date basis, impacts on net earnings from continuing operations attributable to Jacobs were (i) $248.2 million in restructuring,
transaction and other charges (includes $146.6 million related to charges for the Company's fourth quarter fiscal 2020 transformation initiatives relating to
real estate and other staffing programs,), (ii) $68.3 million of intangible asset amortization and (iii) $56.9 million in fair value adjustments related to our
investment in Worley stock (net of Worley stock dividend) and certain foreign currency revaluations relating to the ECR sale.

Includes $47.2 million in operating profit and $46.8 million in net earnings from continuing operations attributable to Jacobs, or $0.33 per diluted share from
continuing operations in the first quarter of fiscal 2019; includes $119.0 million in operating profit, $50.8 million in net earnings from continuing operations
attributable to Jacobs, or $0.36 per diluted share from continuing operations in the second quarter of fiscal 2019; includes $142.8 million in operating profit
and $103.8 million in net earnings from continuing operations attributable to Jacobs, or $0.75 per diluted share from continuing operations in the third
quarter of fiscal 2019; includes $154.2 million in operating profit, $179.3 million in both net earnings from continuing operations attributable to Jacobs and
net earnings attributable to Jacobs, or $1.32 per diluted share in the fourth quarter of fiscal 2019 related to restructuring, transaction and other charges,
amortization of intangibles and fair value adjustments related to our investment in Worley stock (net of Worley stock dividend) and certain foreign currency
revaluations relating to the ECR sale. On a year to date basis, impacts on net earnings from continuing operations attributable to Jacobs were (i) $259.8
million in restructuring, transaction and other charges, (ii) $59.0 million of intangible asset amortization and (iii) $48.6 million in fair value adjustments
related to our investment in Worley stock (net of Worley stock dividend) and certain foreign currency revaluations relating to the ECR sale.

(d)

For the three-month period ended September 27, 2019, diluted net earnings (loss) per share from discontinued operations included $89.7 million related to
revisions to previous income tax expense estimates, $17.4 million in finalization of the pre-tax gain on the sale of our ECR business and $9.8 million related
to the difference between Nui Phao loss contingency as originally recorded and fourth quarter 2019 settlement amount.

F-63

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of Jacobs Engineering Group Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Jacobs Engineering Group Inc. and subsidiaries (the Company) as of October
2, 2020 and September 27, 2019, the related consolidated statements of earnings, comprehensive income, stockholders' equity and cash flows for
each of the three fiscal years in the period ended October 2, 2020, and the related notes (collectively referred to as the “consolidated financial
statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at
October 2, 2020 and September 27, 2019, and the results of its operations and its cash flows for each of the three fiscal years in the period ended
October 2, 2020, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
Company's internal control over financial reporting as of October 2, 2020, based on criteria established in Internal Control-Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated November 24, 2020
expressed an unqualified opinion thereon.

Adoption of New Accounting Standards

As discussed in Note 2 to the consolidated financial statements, the Company changed its method of accounting for leases in 2020 to reflect the
accounting method change due to the adoption of ASU 2016-02, Leases (Topic 842). As discussed in Note 2 to the consolidated financial
statements, the Company changed its method of accounting for revenue recognition on contracts with customers in 2019 to reflect the accounting
method change due to the adoption of ASU 2014-09, Revenue from Contracts with Customers (Topic 606).

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s
financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with
respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included
performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in
the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well
as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated
or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements
and (2) involved our especially challenging, subjective or complex judgments. The communication of critical audit matters does not alter in any way
our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing
separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

F-64

Revenue Recognition for Fixed-Price Engineering, Procurement and Construction Contracts

Description of the Matter

As described in Note 2 to the consolidated financial statements, the Company recognizes engineering, procurement
and construction contract revenue over time, as performance obligations are satisfied, using the percentage-of-
completion method (an input method) based primarily on contract costs incurred to date compared to total estimated
contract costs. Revenue recognition under this method is judgmental, as it requires the Company to prepare estimates
of total contract revenue and total contract costs, including costs to complete in-process contracts.

Auditing the Company’s estimates of total contract revenue and costs used to recognize revenue on fixed-price
engineering, procurement and construction contracts involved significant auditor judgment, as it required the
evaluation of subjective factors, such as assumptions related to estimated labor, forecasted material and subcontractor
costs and variable consideration estimates related to incentive fees and unpriced change orders. These assumptions
involved significant management judgment, which affects the measurement of revenue recognized by the Company.

How We Addressed the
Matter in Our Audit

We tested certain of the Company’s controls over the estimation process that affect revenue recognized on fixed-price
engineering, procurement and construction contracts. For example, we tested controls over management’s monitoring
and review of project cost and variable consideration estimates, including the Company’s procedures to validate the
completeness and accuracy of the data used to determine the estimates.

To test the Company’s contract estimates related to revenues recognized on fixed-price engineering, procurement,
and construction projects, our audit procedures included selecting a sample of projects and, among other procedures,
we obtained and inspected related contract agreements, amendments, and change orders to test the existence of
customer arrangements and understand the scope and pricing of the related projects; observed selected project team
status meetings at the Company and interviewed project team personnel to obtain an understanding of the status of
operational performance and progress on the related projects; evaluated the reasonableness of the Company’s
estimated costs to complete by obtaining and analyzing supporting documentation for a sample of cost estimate
components; and compared contract profitability estimates in the current year to historical estimates and actual
performance for the same projects.

Legal Contingencies

Description of the Matter

As described in Note 17 to the consolidated financial statements, the Company is subject to litigation and arbitration
proceedings, including a material legal contingency related to a dispute with JKC Australia LNG Pty Limited. Auditing
the Company’s estimates related to legal contingencies was especially subjective due to the judgment required to
evaluate information used by management to determine whether a probable loss exists and whether a loss can be
reasonably estimated, and if so, the assumptions used by management to estimate the potential range of losses.
Management’s assumptions had a significant effect on loss contingency accruals recorded.

How We Addressed the
Matter in Our Audit

We tested the Company’s controls over the identification and evaluation of the completeness and valuation of
contingent liabilities related to legal matters. For example, we tested controls over the Company’s assessment and
valuation of loss contingencies, including their evaluation of whether a loss is probable, and measurement of the
contingent liability associated with probable losses.

To test the Company’s accounting and disclosure for legal contingencies, we performed audit procedures that
included, among others, inspecting legal claim documentation submitted by counterparties, assessing management’s
assumptions regarding cost estimates related to potential loss contingencies, inspecting minutes of meetings of the
board of directors, and obtaining audit inquiry responses from external and internal legal counsel related to loss
contingencies.

F-65

Description of the Matter

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

As described in Note 10 to the consolidated financial statements, the Company recognized long-lived asset impairment
charges during 2020 related to right-of-use assets and related property, equipment and improvements associated with
real estate lease space the Company has abandoned or identified for subleasing. The Company evaluates long-lived
assets for impairment by first identifying whether indicators of impairment exist. If indicators are present for an asset
group, the Company evaluates recoverability by comparing the estimated future undiscounted cash flows to the
carrying amount of the asset group. If the asset group's carrying amount exceeds its estimated future undiscounted
cash flows, the fair value of the asset group is then estimated by management and compared to its carrying amount.
An impairment charge is recognized on a long-lived asset group when the carrying amount exceeds fair value.

Auditing management’s evaluation of long-lived asset impairment involved subjectivity due to the estimation required
to assess significant assumptions utilized in estimating the fair value of asset groups based on discounted cash flow
models, such as assumptions related to expected downtime prior to the commencement of future subleases, projected
sublease income over the remaining lease periods, and discount rates.

How We Addressed the
Matter in Our Audit

We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the
Company’s long-lived asset impairment evaluation process, including controls over management’s review of significant
assumptions used.

To test the Company’s long-lived asset impairment evaluation process, we performed audit procedures that included,
among others, assessing the methodologies used, evaluating the significant assumptions discussed above and testing
the completeness and accuracy of the underlying data used by the Company in its analysis. We inspected lease
agreements related to impaired right-of-use assets and compared significant assumptions used by management as
part of fair value estimates to current industry and economic trends and performed sensitivity analysis over significant
assumptions, among other procedures. We involved our valuation specialists to assist in our evaluation of certain
significant assumptions used on the calculation of fair value estimates specific to market participant real estate data.

/s/ Ernst & Young LLP

We have served as the Company's auditor since 1987.

Dallas, Texas

November 24, 2020

F-66

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Jacobs Engineering Group Inc.

Opinion on Internal Control Over Financial Reporting

We have audited Jacobs Engineering Group Inc. and subsidiaries’ internal control over financial reporting as of October 2, 2020, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013
framework) (the COSO criteria). In our opinion, Jacobs Engineering Group Inc. and subsidiaries (the Company) maintained, in all material respects,
effective internal control over financial reporting as of October 2, 2020, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
consolidated balance sheets of the Company as of October 2, 2020 and September 27, 2019, the related consolidated statements of earnings,
comprehensive income, stockholders’ equity and cash flows for each of the three fiscal years in the period ended October 2, 2020, and the related
notes and our report dated November 24, 2020 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are
a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.
federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing
and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we
considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that
transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles,
and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the
company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the
company’s assets that could have a material effect on the financial statements.

F-67

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Dallas, Texas

November 24, 2020

F-68

Exhibit 4.1

DESCRIPTION OF THE REGISTRANT’S SECURITIES

The following descriptions of the material provisions of (1) the capital stock of Jacobs Engineering Group Inc. (the
“Company”), (2) the Charter (as defined below) (3) the Bylaws (as defined below), and (4) certain provisions of the General
Corporation Law of the State of Delaware (the “DGCL”), are only intended to be summaries. These summaries do not purport to
be complete and are qualified in their entirety by reference to the Charter, the Bylaws, and the applicable provisions of the
DGCL.

Authorized Capital Stock

Under the Company’s amended and restated certificate of incorporation, amended on January 27, 2014 (the “Charter”), the

Company is authorized to issue an aggregate of 241 million shares of capital stock, divided into classes as follows:

•
•

240 million shares of common stock, par value $1.00 per share (“Common Stock”); and
1 million shares of preferred stock, par value $1.00 per share (“Preferred Stock”).

Common Stock

Voting

Pursuant to the Charter and the Company’s amended and restated bylaws, amended as of October 5, 2020 (the “Bylaws”),
except as may be provided by the board of directors of the Company (the “Board of Directors” or the “Board”) in a preferred stock
designation or by law, the holders of Common Stock shall have the exclusive right to vote on the election of directors and on all
other matters requiring stockholder action, each share being entitled to one (1) vote.

Any action at a meeting at which a quorum is present will be decided by a majority of the votes properly cast, except that the

affirmative vote of holders of not less than two-thirds of the total voting power of all outstanding shares entitled to vote in the
ordinary election of directors of the Company (“voting securities”), voting as a single class, shall be required (i) to adopt any
agreement for, or to approve, the merger or consolidation of the Company with or into any other corporation except for mergers
with respect to which no stockholder vote is required under Section 253 of the DGCL or any successor section, (ii) to authorize
any sale, lease transfer, exchange, mortgage, pledge or other disposition to any other corporation, person or entity of all or
substantially all of the assets of the Company, (iii) to authorize the issuance or transfer by the Company of any voting securities
of the Company in exchange for payment for the securities or assets of any other corporation, person or entity if such
authorization is otherwise required by law or by any agreement between the Company and any national securities exchange or
by any other agreement to which the Company is a party, or (iv) to adopt a plan or proposal for the liquidation or dissolution of
the Company. Holders of shares of Common Stock are not entitled to cumulate their votes in the election of directors.

Except as otherwise provided by law, and subject to any voting rights granted to holders of any outstanding Preferred Stock,

the Charter may not be repealed, amended or otherwise modified directly or indirectly in any respect that would reduce or
diminish in any manner any requirement for stockholder or director approval unless such repeal or amendment is approved by
the affirmative vote of the holders, voting as a single class, of not less than two-thirds of the outstanding voting securities of the
Company. However, the Company reserves the right to amend, alter, change or repeal any provision in the Charter subject to
the aforementioned reservation.

Dividends

Except as may be provided by the Board of Directors in a preferred stock designation or by law, dividends may be declared
and paid or set apart from payment upon the Common Stock out of any assets or funds of the Company legally available for the
payment of dividends.

Liquidation Rights

Except as may be provided by the Board of Directors in a preferred stock designation or by law, upon the voluntary or

involuntary liquidation, dissolution or winding up of the Company, the net assets of the

Exhibit 4.1

Company shall be distributed pro rata to the holders of the Common Stock in accordance with their respective rights and
interests.

Other Rights

Shares of Common Stock are neither redeemable nor convertible and there are no sinking fund provisions relating to these
shares. Holders of Common Stock are not entitled to any preemptive rights to purchase or subscribe for any of the Company’s
securities.

Anti-Takeover Provisions

The Charter, the Bylaws and the DGCL include a number of anti-takeover provisions that may have the effect of encouraging

persons considering unsolicited tender offers or other unilateral takeover proposals to negotiate with the Board of Directors
rather than pursue non-negotiated takeover attempts. These provisions include:

Advance Notice Requirements. The Bylaws establish advance notice procedures with regard to the nomination by stockholders

of candidates for election as directors or the proposal by stockholders of business to be brought before meetings of
stockholders. These procedures provide that notice of stockholder nominations and proposals must be timely and given in
writing to the Company’s Secretary. Generally, to be timely, notice must be delivered to the Company’s Secretary at the principal
executive office of the Company not less than 90 days nor more than 120 days prior to the first anniversary date of the annual
meeting for the preceding year. The notice must contain the information required by the Bylaws, including, in the case of
nominations, the completed and signed questionnaire, representation and agreement, as applicable.

Special Meetings of Stockholders. The Charter provides that except as may be provided by Section 151(g) of the DGCL (or its
successor statute as in effect from time to time) special meetings of stockholders may be called at any time by only the Board of
Directors, a committee of the Board of Directors that has been duly designated by the Board or whose powers and authority
include the power to call such meetings, or by the Chair of the Board of Directors. Special meetings may not be called by any
other person or persons.

No Written Consent of Stockholders. The Charter and the Bylaws provide that subject to any rights granted in a preferred stock
designation to any series of Preferred Stock, any action required or permitted to be taken by stockholders must be effected at an
annual or special meeting of stockholders and may not be effected by any consent in writing by such stockholders.

Amendment of Bylaws. The Board of Directors is expressly authorized to make, repeal, alter, amend or rescind the Bylaws.
Further, the Bylaws may not be made, repealed, amended or rescinded by the stockholders without obtaining the affirmative
vote of the holders of not less than seventy-five percent (75%) of the outstanding voting securities of the Company, voting as a
single class.

Authorized Shares. The authorized but unissued shares of Common Stock and Preferred Stock will be available for future
issuance without stockholder approval, except for any stockholder approval required by the New York Stock Exchange. These
additional shares may be utilized for a variety of corporate purposes, including future public offerings to raise additional capital,
corporate acquisitions and employee benefit plans. The existence of authorized but unissued shares of Common Stock and
Preferred Stock could render more difficult or discourage an attempt to obtain control of the Company by means of a proxy
contest, tender offer, merger or otherwise. In addition, the ability of the Board of Directors to establish the rights and issue
substantial amounts of Preferred Stock without the need for stockholder approval may delay or deter a change in control of the
Company.

Filling of Board Vacancies; Removal. Unless the Board of Directors otherwise determines or otherwise required by applicable law,

vacancies and newly created directorships resulting from any increase in the authorized number of directors may be filled only
by the affirmative vote of a majority of the remaining directors then in office, even though less than a quorum of Board of
Directors, or by a sole remaining director. Each such director will hold office until the next election of directors and until such
director’s successor is elected and qualified, or until the director’s earlier death, resignation or removal. The Board of Directors is
entitled to increase or decrease the size of the Board without stockholder approval.

Exhibit 4.1

Change of Control. The Charter provides that the Company may not undertake a merger or sale of substantially all of its assets

without obtaining the affirmative vote of at least sixty-six and two-thirds percent (66.67%) of the outstanding voting securities of
the Company present in person or represented by proxy at a stockholder meeting called to consider such transaction and
entitled to vote thereon.

Forum Selection. The Bylaws provide that, unless the Company consents in writing to the selection of an alternative forum, the

Court of Chancery of the State of Delaware will be the sole and exclusive forum for:

•
•

any derivative action or proceeding brought on behalf of the Company;
any action asserting a claim of breach of a fiduciary duty owed by any of the Company’s directors, officers or other
employees to the Company or its stockholders;
any action asserting a claim arising pursuant to the DGCL or the Charter or Bylaws; or
any action asserting a claim governed by the internal affairs doctrine of the State of Delaware.

In the event that the Court of Chancery lacks jurisdiction over any such action or proceeding, the Bylaws provide that the
sole and exclusive forum for such action or proceeding will be another state or federal court located within the State of Delaware

Mergers and Other Business Combinations. Section 203 of the DGCL applies to the Company. Under certain circumstances,
Section 203 limits the ability of an interested stockholder to effect various business combinations with the Company for a three-
year period following the time that such stockholder becomes an interested stockholder. For purposes of Section 203, a
“business combination” is broadly defined to include mergers, asset sales and other transactions resulting in a financial benefit
to the interested stockholder. An “interested stockholder” is a person who, together with affiliates and associates, owns, or within
the immediately preceding three years did own, 15 percent or more of the Company’s voting stock.

An interested stockholder may not engage in a business combination transaction with the Company within the three-year

period unless:

•

before the stockholder became an interested stockholder, the Board approved either the business combination or the
transaction which resulted in the stockholder becoming an interested stockholder;
upon consummation of the transaction in which the stockholder became an interested stockholder, the interested
stockholder owned at least 85% of the Company’s voting stock (excluding shares owned by officers, directors or certain
employee stock purchase plans); or
at or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special
meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting
stock that is not owned by the interested stockholder.

Stock Exchange Listing.

The Common Stock is currently listed on the New York Stock Exchange under the symbol “J”.

Transfer Agent and Registrar.

The transfer agent and registrar for the Common Stock is American Stock Transfer & Trust Company, LLC. The transfer

agent’s address is 6201 15th Ave, Brooklyn, NY 11219.

Exhibit 10.37

JACOBS ENGINEERING GROUP INC.

LEADERSHIP PERFORMANCE PLAN

(As Amended and Restated - effective November 18, 2020)

Summary of the Program

The purpose of the Jacobs Engineering Group Inc. Leadership Performance Plan (the “Plan”) is to promote the success of Jacobs Engineering
Group Inc. (“Jacobs”) and its subsidiaries (collectively referred to as the “Company”) by attracting and retaining highly qualified people who perform
to the best of their abilities to achieve Company objectives and profitability.

Eligibility and Participation

Employees participating in the Plan (each, a “Participant”) will be (1) those senior executives who are selected by the Human Resource and
Compensation Committee of the Company’s Board of Directors (the “Committee”) in its sole and absolute discretion and designated as
Participants, which shall include the Chief Executive Officer of the Company (the “CEO”), and (2) those key managers (management level personnel
who do not normally receive overtime compensation) selected by the Committee, the CEO, the President, the Executive Vice President, Chief
Financial Officer, or the Senior Vice President, Global Human Resources, or their functional equivalents (collectively, the “Approving Group”) in
their sole and absolute discretion and designated as Participants.

Incentive Formula

The Committee will determine the incentive formula for annual cash incentive awards (“Awards”) granted to Participants under the Plan in its sole
and absolute discretion based on one or more performance criteria. The incentive formula and additional terms and conditions applicable to an
Award will be set forth in documentation that (a) is not inconsistent with the terms and conditions of this Plan, (b) references this Plan and (c) is
approved by the Committee. The incentive formula with respect to an Award is subject to change at any time during the fiscal year. The incentive
formula need not be the same as to all Participants and the amount of a Participant’s target Award may be based on that Participant’s salary. If a
Participant moves from one level of designated participation to another during the fiscal year, the different weighting factors and incentive formula, if
any, will be applied to the Participant’s base salary as of July 1st of the fiscal year at each level and prorated accordingly.

Approvals

Participation of each Section 16 executive officer of the Company shall be approved by the Committee and participation of all other Participants shall
be approved by one or more members of the Approving Group.

Payment of Awards

An Award shall be paid at such time or times as determined by the Committee in the Committee’s sole and absolute discretion. The Committee may
reduce or increase any Award up to the date of payment. The Company shall withhold from all payments made to a Participant hereunder all taxes
which, by applicable federal, state, local or other law, the Company is required to withhold therefrom.

All Awards shall be paid in full within 90 days of the close of the applicable fiscal year, except Awards deferred pursuant to the terms of a Company
sponsored plan for which a Participant is eligible, which shall be paid pursuant to the terms of such plan.

If an individual becomes a Participant in the Plan after the beginning of a fiscal year, his or her Award will be prorated accordingly. Except as set
forth in the next sentence, to receive payment of an Award, a Participant must be employed with the Company on the date each Award is paid. If a
Participant’s employment terminates for any reason before the payment date, all unpaid Awards are automatically forfeited unless (i) the
determination is made to pay a pro-rated Award in the sole and absolute discretion of the Committee; (ii) a Participant “retires” during the fiscal year,
in which case the Participant will be eligible for a prorated payment based upon year-end results, which prorated payment shall be made at the
same time as other Participants are paid; or (iii) a Participant dies or becomes disabled (as determined by the Committee) (x) during the fiscal year,
in which case, the Participant (or his/her

“beneficiary” in the case of death) will be eligible to receive payment equal to the Participant’s target Award, prorated for the number of days worked
during the fiscal year or (y) after the end of the fiscal year but prior to the payment date, in which case the Participant (or his/her “beneficiary” in the
case of death) will be eligible to receive payment based on year-end results, which payment shall be made at the same time as other Participants
are paid. “Retires” means a Participant’s voluntary resignation from employment (i) at age 65 or older or (ii) at age 60 or older with 10 or more years
of service with the Company. “Beneficiary” means a Participant’s designated beneficiary for company-paid life insurance, or the Participant’s estate
if none.

Modifications and Administration

This Plan shall be administered by the Committee which shall consist of at least two independent directors of the Company. The Committee shall
have the sole and absolute discretion and authority to: (i) administer and interpret the Plan in accordance with all applicable laws as may be
appropriate; (ii) prescribe the terms and conditions of any Awards granted under the Plan; (iii) adopt rules and guidelines for the administration of the
Plan that are consistent with the Plan; and (iv) interpret, amend or revoke any such rules and guidelines. The Committee may terminate the Plan at
any time, for any and no reason, and may also amend the Plan in order to reduce or increase the amount of any Award payments at any time, for
any or no reason. The decisions and interpretations of the Committee and its delegates shall in every case be final and binding on all persons
having an interest in the Plan and shall be afforded the maximum deference permitted by applicable law, shall be reviewed under an “abuse of
discretion” standard of review, and shall be upheld as long as reasonable. The Committee may designate the Secretary of the Company or any
other Company employee to assist the Committee in the administration of the Plan, and may grant authority to such persons to execute Award
Agreements or other documents entered into under the Plan on behalf of the Committee or the Company. The Committee hereby delegates all of its
discretion and authority under the Plan as to all Participants (other than Participants who are Section 16 officers of the Company) to each other
member of the Approving Group, each of whom shall have all of the rights of the Committee as to such Participants; provided, however, that the
Committee may act in lieu of such delegates.

Claw-back [Note: Claw-back language to be moved to a stand-alone policy]

In the event of any Inaccurate Financial Statement, (i) Covered Executives will be required to return to the Company on demand all incentive-based
compensation payments made to them during the 3-year period preceding the date on which the Company is required to prepare an accounting
restatement for such Inaccurate Financial Statement that are in excess of what would have been paid had such incentive-based compensation
instead been determined under the accounting restatement and (ii) all earned but unpaid incentive-based compensation awarded to a Covered
Executive during the 3-year period preceding the date on which the Company is required to prepare an accounting restatement for such Inaccurate
Financial Statement that is in excess of what would have been earned had such incentive-based compensation instead been determined under the
accounting restatement shall be forfeited. The Committee shall have final authority to determine the amount to be repaid by a Covered Executive
and shall have sole and absolute discretion to offset required claw-back amounts against any payments due to Participant under the Plan. An
“Inaccurate Financial Statement” is any inaccurate financial statement due to material noncompliance by the Company with any financial reporting
requirements under the securities laws. “Covered Executives” are any current or former Section 16 officers of the Company.

Section 409A of the Code

It is intended that this Plan and any Awards granted hereunder shall be exempt from the definition of “non-qualified deferred compensation” within
the meaning Section 409A of the Code (together with any related regulations or other guidance promulgated with respect to such Section by the
U.S. Department of the Treasury of the Internal Revenue Service, collectively, “Section 409A”), and the Plan shall be interpreted accordingly. Any
provision that would cause any award granted hereunder to incur additional taxes under Section 409A shall have no force or effect unless and until
amended to comply with Section 409A, which amendment may be retroactive to the extent permitted by Section 409A.

No Right to Employment, Reelection or Continued Service

Nothing in this Plan or an Award granted hereunder shall interfere with or limit in any way the right of the Company to terminate any Participant’s
employment, service on the Board of Directors or other service for the Company at any time for any reason, or no reason, nor shall this Plan or an
Award granted hereunder confer upon any Participant any

right to continue his or her employment or service for any specified period of time. Neither this Plan nor any Award hereunder shall constitute an
employment contract between a Participant and the Company.

Unfunded Plan

The Plan is an unfunded plan. Participants are and shall at all times be general creditors of the Company with respect to any Awards granted under
the Plan, if any.

JACOBS ENGINEERING GROUP INC.
LIST OF SUBSIDIARIES

Exhibit 21

The following table sets forth all subsidiaries of the Company but may not include those subsidiaries that, when
considered in the aggregate, would not constitute a significant subsidiary.
Jacobs Government Services Company, a corporation of California..............................................
Jacobs Professional Services Inc., a corporation of Delaware...........................................................
Jacobs Engineering Inc., a corporation of Delaware.............................................................................
Jacobs Group Australia Investments Pty Ltd., a corporation of Australia……………..
Jacobs Australia Holdings Company Pty Ltd, a corporation of Australia ..........................
Sinclair Knight Merz Management Pty Ltd, a corporation of Australia..........................
Jacobs Group Australia Holding Ltd, a corporation of Australia....................................
Jacobs Group (Australia) Pty Ltd, a corporation of Australia............................
Aquenta Consulting Pty Ltd, a corporation of Australia………………..
Jacobs E&C Australia PTY Ltd, a corporation of Australia..........................

Jacobs Project Management Australia PTY Ltd, a corporation of

Australia..............................................................................................................
Jacobs Architecture (Australia) Pty Ltd, a corporation of Australia................
Jacobs (Thailand) Co., Ltd., a corporation Thailand.............................................
Jacobs Projects (Philippines) Inc., a corporation of the Philippines................
Sinclair Knight Merz Consulting (India) Private Ltd, a corporation of India..
Sinclair Knight Merz (Ireland) Ltd, a corporation of the Republic of Ireland..
Sinclair Knight Merz (NZ) Holdings Ltd, a corporation of New Zealand .......
Sinclair Knight Merz (Kenya) Limited, a corporation of Kenya………..
Jacobs New Zealand Limited, a corporation of New Zealand....................
PT Jacobs Group Indonesia, a corporation of Indonesia.....................
Sinclair Knight Merz International Holdings LLC, a limited liability company of
Delaware…………………………………………………………………………
Jacobs Engineering Group Malaysia Sdn Bhd, a corporation of Malaysia…
Perunding Mahir Bersatu Sdn Bhd, a corporation of Malaysia…... ..
Jacobs Engineering Services Sdn Bhd, a corporation of Malaysia…
Jacobs Consulting Services Sdn. Bhd., a corporation of Malaysia…
Sinclair Knight Merz (Hong Kong) Limited, a corporation of Hong Kong …

Sinclair Knight Merz International (Hong Kong) Ltd, a corporation of Hong Kong

..............................................................................................................
CODE International Assurance Ltd., a corporation of Nevada...................................................
Jacobs Engineering España, S.L.U., a corporation of Spain........................................................
Jacobs Luxembourg Finance Company Sarl, a corporation of Luxembourg................
Jacobs Nederland Finance and Investment Company B.V., a corporation of the
Netherlands…………………………………………………………………….
Jacobs Merrion Finance Unlimited Company, a corporation of Ireland………
Jacobs Europe Holdco Limited, a corporation of England and Wales............................
Jacobs UK Holdings Limited, a corporation of England and Wales.........................
Jacobs Switzerland GmbH, a corporation of Switzerland...................................
Jacobs U.K. Limited, a corporation of England and Wales.................................
Energy, Safety and Risk Consultants (UK) Limited, a corporation of England and
Wales…………………………………………………..
Jacobs Clean Energy International Limited, a corporation of England and

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
49.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
99.50%
100.00%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%

Wales…………………………………………………
Jacobs Clean Energy Limited, a corporation of England and
Wales……………………………………………………………….
Jacobs E&C Limited, a corporation of England and Wales………....
Jacobs Field Services Limited, a corporation of England and Wales
L.E.S Construction Ltd, a corporation of England and Wales........

100.00%

100.00%
100.00%
100.00%

Exhibit 21

HGC Constructors Private Ltd., a corporation of India ...................
Sula Systems Ltd, a corporation of England and Wales .....................................
Jacobs Stobbarts Ltd, a corporation of England and Wales..............................
Jacobs Engineering U.K. Ltd, a corporation of England and Wales……….

Lindsey Engineering Services Ltd, a corporation of England and Wales

Gibb Holdings Ltd., a corporation of England and Wales...........................
Jacobs One Limited, a corporation of Scotland.....................................
Jacobs European Holdings Limited, a corporation

of England and Wales.............................................................................

Babtie Shaw & Morton Ltd, a corporation of Scotland................
Jacobs China Limited, a Hong Kong corporation..........................
BEAR Scotland Limited, a corporation of Scotland......................
Growing Concern Scotland Limited...........................................
Ringway Jacobs Limited, a corporation of England and Wales
LeighFisher U.K. Limited, a corporation of England and Wales
JacobsGIBB Limited, a corporation of England and Wales.................

Westminster & Earley Services Ltd, a corporation of England and Wales

...............................................................................................................
Jacobs Engineering Ireland Limited, a corporation of the Republic of Ireland....
Jacobs Italia, SpA, a corporation of Italy..........................................................................
Jacobs International Limited, a corporation of the Republic of Ireland.........................
Jacobs Nucléaire SAS, a corporation of France......................................................
JEM Field Professional Services SA DE CV, a corporation of Mexico......................................
Jacobs Brazil Limited Inc. a corporation of Texas ........................................................................
JEG Acquisition Company Limited, a corporation of England and Wales..............................
AWE Management Limited, a corporation of England and Wales...................................
Jacobs Puerto Rico Inc., a corporation of Puerto Rico.................................................................
Jacobs Holdings Singapore Pte. Limited., a corporation of Singapore..................................
Jacobs International Consultants Pte Ltd. a corporation of Singapore
Jacobs Architecture Canada Inc., a corporation of Canada........................................................
Jacobs Consultancy Canada Inc., a corporation of Canada........................................................
Jacobs Advisers Inc., a corporation of California.............................................................................
Jacobs Civil Consultants Inc., a corporation of New York...................................................................
Jacobs Technology Inc., a corporation of Tennessee...........................................................................
Federal Network Systems LLC, a limited liability company of Delaware...............................
Jacobs Australia Pty limited, a corporation of Australia.............................................................
Jacobs Telecommunications, Inc., a corporation of New Jersey………………………..
Edwards and Kelcey Caribe Inc., a corporation of Puerto Rico………………
The KeyW Holding Corporation, a corporation of Maryland......................................................
Automotive Testing Operations, LLC, a limited liability company of Delaware...................
Tank Closure Partnership LLC, a limited liability company of Delaware………………..
Hanford Progress EcoPartners, LLC, a limited liability company of Delaware…………
Value Engineering and Management, Inc., a corporation of New Jersey.......................................
Jacobs Engineering New York Inc., a corporation of New York.........................................................
Jacobs Consultants, Inc., a corporation of Delaware............................................................................
Edwards and Kelcey Architectural and Design Services, a corporation of New Jersey.............

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%
100.00%
25.00%
100.00%
50.00%
100.00%
100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
33.33%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
62.00%
35.00%
100.00%
100.00%
100.00%
100.00%

Edwards and Kelcey Design Services Inc., a corporation of Illinois.................................................
JE Architects/Engineers, P.C., a professional corporation New York..............................................
Iffland Kavanagh Waterbury, P.L.L.C., a limited liability company of New York..........................

100.00%
100.00%
100.00%

Exhibit 21

Jacobs Project Management Co., a corporation Delaware.................................................................
VEI Inc., a corporation of
Texas...................................................................................................................
Traffic Services, Inc., a corporation of New Jersey................................................................................
Sverdrup Hydro Projects, Inc., a corporation of Missouri....................................................................
JEG Architecture Nevada, Inc., a corporation of Nevada.....................................................................
JE Associates, Inc., a corporation of Missouri.........................................................................................
Jacobs Architects/Engineers, Inc., a corporation of Delaware..........................................................
Jacobs Engineering Company, a corporation of California................................................................
Bechtel Jacobs Company LLC, a limited liability company of Delaware........................................
LeighFisher Inc., a corporation of Delaware............................................................................................
LeighFisher Canada Inc., a corporation of Canada........................................................................
LeighFisher Ecuador S.A., an corporation of Ecuador..................................................................
LeighFisher Holdings Ltd. a corporation of England and Wales...............................................
LeighFisher Ltd., a corporation of England and Wales........................................................
LeighFisher India Private Ltd., a corporation of India...................................................................
KlingStubbins Inc., a corporation of Delaware.......................................................................................
Sverdrup Asia Limited, a corporation of India........................................................................................
Jacobs Engineering and Construction (Thailand) Limited, a corporation of Thailand…….
Mission Support & Test Services, LLC, a limited liability company of Delaware…………….
CH2M HILL Companies, Ltd., a corporation of Delaware....................................................................
CH2M HILL, Inc., a corporation of Florida.........................................................................................
Halcrow, Inc., a corporation of Delaware….……………………………………
HPA Engineers, P.C., a corporation of New York…………………………..
CH2M HILL Constructors, Inc., a corporation of Delaware…………………………………
CH2M Facility Support Services, LLC, a limited liability company of Delaware…
CH2M HILL International, Ltd., a corporation of Delaware.........................................................
CH Caribe Engineers, P.S.C., a corporation of Puerto Rico………………….
CH2M HILL International Engineering, Inc., a corporation of Delaware……..
CH2M HILL One Limited, a corporation of the United Kingdom..…………….
CH2M HILL Holdings Limited, a corporation of the United Kingdom..……….
CH2M HILL Europe Limited, a corporation of the United Kingdom…..…...
Halcrow Holdings Limited, a corporation of the United Kingdom…….
Halcrow Consulting Limited, a corporation of the United
Kingdom………………………………………………………
Halcrow Group Limited, a corporation of the United
Kingdom…………………………………………………..
Halcrow International Limited, a corporation of the United
Kingdom…………………………………………………………
CHNG B.V., a corporation of the Netherlands……………………………..…
CH2M HILL Netherlands Holding B.V., a corporation of the
Netherlands…………………………………………………………….
CH2M HILL Canada Limited, a corporation of Canada……………
CH2M HILL International B.V., a corporation of the Netherlands..
CH2M HILL Singapore Pte. Ltd., a corporation of Singapore……………
CH2M HILL International Services, Inc., a corporation of Oregon…………………….
CHVENG, LLC, a limited liability company of Delaware………………………………….

100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
40.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
99.98%
37.00%
100.00%
100.00%
100.00%
100.00%(1)*
100.00%
100.00%
100.00%
100.00%(2)*
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%

100.00%

100.00%
100.00%

100.00%
100.00%
100.00%
100.00%
100.00%

Operations Management International, Inc., a corporation of California………….....…
CH2M HILL Global, Inc., a corporation of Delaware.....................................................................
CH2M HILL E&C, Inc., a corporation of Delaware……………………………...
CH2M HILL Engineers, Inc., a corporation of Delaware.................................................
CH2M HILL Puerto Rico, Inc., a corporation of Delaware……………….

100.00%
100.00%
100.00%
100.00%
100.00%

LG Constructors Inc., a corporation of Delaware.............................................................
CH2M HILL Constructors International, Inc., a corporation of Delaware……………….

100.00%
100.00%

(1) * Owned by Halcrow, Inc. through Stockholder Agreements with licensed individuals.
(2) * Owned by CH2M HILL International, Ltd. through Stockholder Agreements with licensed individuals.

Exhibit 21

Consent of
Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the following Registration Statements:

(1)

(2)

(3)

(4)

(5)

(6)

(7)

(8)

Registration Statement (Form S-8 Nos. 333-195708, 333-187677, 333-107344, 333-123448, 333-157014,
and 333-38974) pertaining to the Jacobs Engineering Group Inc. 1999 Stock Incentive Plan, as amended
and restated,
Registration Statement (Form S-8 Nos. 333-67048 and 333-216176) pertaining to the Jacobs Engineering
Group Inc. Global Employee Stock Purchase Plan, as amended and restated,
Registration Statement (Form S-8 Nos. 333-38984 and 333-209860) pertaining to the Jacobs Engineering
Group Inc. 1999 Outside Director Stock Plan, as amended and restated,
Registration Statement (Form S-8 No. 333-45475) pertaining to the Jacobs Engineering Group Inc. 1981
Executive Incentive Plan,
Registration Statement (Form S-8 Nos. 333-157015 and 333-216176) pertaining to the Jacobs Engineering
Group Inc. 1989 Employee Stock Purchase Plan, as amended and restated,
Registration Statement (Form S-4 No. 333-147936) and related Prospectus of Jacobs Engineering Group
Inc.,
Registration Statement (Form S-4 No. 333-220524 as amended) and Related Prospectus of Jacobs
Engineering Group Inc., and
Registration Statement (Form S-8 No. 333-222084) pertaining to the CH2M HILL Companies, Ltd.
Amended and Restated Long-Term Incentive Plan, as amended;

of our reports dated November 24, 2020, with respect to the consolidated financial statements of Jacobs Engineering
Group Inc. and subsidiaries and the effectiveness of internal control over financial reporting of Jacobs Engineering
Group Inc. and subsidiaries included in this Annual Report (Form 10-K) of Jacobs Engineering Group Inc. and
subsidiaries for the year ended October 2, 2020.

/s/ Ernst & Young LLP
Dallas, Texas
November 24, 2020

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Steven J. Demetriou, certify that:

I have reviewed this Annual Report on Form 10-K of Jacobs Engineering Group Inc.;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this
report;

The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures
(as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act
Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed
under our supervision, to ensure that material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is
being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be
designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the
registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has
materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the
equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and
report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.

/s/Steven J. Demetriou
Steven J. Demetriou
Chief Executive Officer

November 24, 2020

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kevin C. Berryman, certify that:

I have reviewed this Annual Report on Form 10-K of Jacobs Engineering Group Inc.;

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the
equivalent functions):

Any fraud, whether or not material, that involves management or other employees who have a significant role in the
registrant’s internal control over financial reporting.

/s/Kevin C. Berryman
Kevin C. Berryman
Chief Financial Officer

November 24, 2020

Exhibit 32.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER
Pursuant to 18 U.S.C. Section 1350
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Jacobs Engineering Group Inc. (the “Company”) on Form 10-K for the year ended October 2,
2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Steven J. Demetriou, Chief Executive Officer of the
Company (principal executive officer), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Steven J. Demetriou
Steven J. Demetriou
Chief Executive Officer

November 24, 2020

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the

Company and furnished to the Securities and Exchange Commission or its staff upon request.

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER
Pursuant to 18 U.S.C. Section 1350
Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Annual Report of Jacobs Engineering Group Inc. (the “Company”) on Form 10-K for the year ended October 2,

2020 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin C. Berryman, Chief Financial Officer of the
Company (principal financial officer), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
2002, that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the
information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/Kevin C. Berryman
Kevin C. Berryman
President
and Chief Financial Officer

November 24, 2020

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the

Company and furnished to the Securities and Exchange Commission or its staff upon request.