Jacobs Solutions (J) Risk Factor Changes

In addition, our credit facilities reference the Secured Overnight Financing Rate (“SOFR”) as the primary benchmark rate for our U.S.

In line with industry practice, we are often required to provide performance or payment bonds, letters of credit and/or bank guarantees at the request of our customers.

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

We depend on the availability of credit to grow our business and to help fund business acquisitions.

Increasing scrutiny and changing and conflicting expectations from governmental organizations, clients, investors, suppliers and partners, communities and our employees with respect to our practices and disclosures re…

At Jacobs, we have established various climate commitments and targets, including our goal to source 100% renewable electricity and our net-zero target validated by the Science Based Targets initiative to reach net ze…

Governmental policies designed to address the effects of climate change, or inversely, eliminating the focus on the effects of climate change, could increase the costs of projects for our clients or eliminate some or…

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

We are subject to a variety of HSSE-related 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 co…

Past and future non-financial health, safety, security and environment-related laws and regulations could impose significant additional costs and liabilities.

Consummation of any acquisition, merger, strategic investment or divestiture is subject to the satisfaction of customary conditions, including one or more of the following: (i) due diligence and its associated time an…

•The risks discussed in this Item 1A.

•Potential impairment resulting from the post-closing deterioration in the target company's business or the overpayment for an acquisition or investment, including due to the failure of our valuation methodologies to…

•Potentially substantial transaction costs associated with business combinations, strategic investments and/or divestitures and the possible incurrence of substantial indebtedness to finance the transaction;

•The effects of diverting leadership’s attention from day-to-day operations to matters involving the integration of target companies and/or new and sometimes geographically dispersed operations;

•Assumption of risks and liabilities of an acquired business, including those that were not accurately identified or quantified during the due diligence process and/or that were unknown at the time the transaction was…

We may engage in mergers, acquisitions, strategic investments or divestitures as part of our business strategy to accelerate our growth.

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 goodwil…

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

In connection with the Separation Transaction, we and Amentum entered into various transaction agreements, including a transition services agreement and project services agreement.

Additionally, any contractual arrangements between us and the Separated Business will be on an arm's length basis rather than intercompany arrangements, and therefore may be less favorable to us, may not efficiently m…

On September 27, 2024, we completed the separation of our Critical Mission Services business and a portion of our Divergent Solutions business (the “Separated Business”) in the Separation Transaction.

We may not achieve some or all of the expected benefits of the Separation Transaction.

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.

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

We are a global professional services company, with our international operations accounting for approximately 38% of our annual revenue in fiscal 2025.

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

•Difficulties in staffing and managing foreign personnel and operations, including challenges related to logistics, communications and professional licensure and work permits of our international workforce;

For fiscal 2025, approximately 38% of our revenue was earned from clients outside the U.S.

As with many developing technologies, AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business.

Our success also depends on our continued access to suppliers, subcontractors and partners, who provide us with important technologies, components and talent.

The needs of our customers change and evolve regularly.

We are focused on growing our presence in our addressable markets by: expanding our relationships with existing clients, suppliers, subcontractors and partners across our full value chain, developing new clients by le…

Our professional reputation and relationships are critical to our business, and any harm to our reputation or relationships could have a material adverse effect on our business, financial condition and results of oper…

Many of our employees have been working remotely since the COVID-19 pandemic.

Remote and hybrid working arrangements may increase our costs and adversely impact our culture and our ability to effectively recruit, retain and train our personnel.

We also continue to monitor changes in global pension regulations, as the complexity of pension laws in the jurisdictions where we sponsor plans can present financial risks in the event of non-compliance.

•Valuation estimates for redeemable noncontrolling interest calculations;

•Collectability of billed and unbilled accounts receivable and the need and amount of any allowance for expected credit losses;

We continuously evaluate the need to upgrade and/or replace our systems and network infrastructure to protect our computing environment and information technology systems, to stay current on vendor supported products…

We are subject to the risk of misconduct, fraud, non-compliance with applicable laws and regulations, or other improper activities by one of our employees, agents or partners, which could have a significant negative i…

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

Historically, we have benefited from both domestic and international government investment programs and bills that provide funding for our services, such as the Infrastructure Investment and Jobs Act, the CHIPS and Sc…

Such events could result in significant professional liability, general liability or product liability and warranty or other claims against us that could be highly publicized and have reputational harm, especially if…

We provide services that are subject to professional standards and qualifications, including providing services that are based on our professional engineering expertise, as well as our other professional credentials.

•We may not be awarded government contracts because of existing policies designed to protect small, under-represented and/or disadvantaged businesses.

•Some of our contracts are long-term government contracts, which are only funded on an annual basis.

The U.S.

Contracts with or funded by the U.S.

Many of our contracts require us to satisfy specific progress or performance milestones in order to receive payment from the customer.

For fiscal 2025, approximately 32% of our revenues were earned under fixed-price contracts.

Our HSSE performance is critical to our reputation.

Continuing or renewed inflation and high interest rates and/or construction costs (including supply chain issues) could reduce the demand for our services.

•Maintaining adequate bonding, letter of credit and bank guarantee capacity is necessary for us to successfully win some contracts.

•Increasing scrutiny and changing and conflicting expectations from governmental organizations, clients, investors, suppliers and partners, communities and our employees with respect to our practices and disclosures r…

•Climate change and related environmental issues, including those related to compliance with new and evolving federal, state, local and foreign laws and regulations, could have a material adverse impact on our busines…

•Past and future non-financial health, safety, security and environment-related laws and regulations could impose significant additional costs and liabilities.

•We may engage in acquisitions, divestments and strategic investments as part of our business strategy to accelerate our growth and we may make minority investments as well, all of which present certain risks and unce…

•We may not achieve some or all of the expected benefits of the Separation Transaction, and could incur a significant tax liability if the terms of the IRS private letter ruling are not satisfied.

•Any harm to our professional reputation or relationships could have a material adverse effect on our business, financial condition and results of operations, including by negatively impacting the amount of work award…

•Our continued success is dependent upon our ability to hire, retain, train and utilize qualified personnel while managing the risks associated with remote and hybrid working arrangements.

•Our results of operations depend on the award of new contracts and the timing of the award of these contracts and economic conditions.

GHG emissions.

We have also included sustainability-linked key performance indicators ("KPIs") in our credit facilities and certain of our senior notes, with KPI targets that include improving gender diversity and, in the case of th…

In addition, market conditions 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,…

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.

There is increased scrutiny from governmental organizations, clients, and employees on companies’ environmental, social, and governance (“ESG”) practices and disclosures, including with respect to inclusion and divers…

While our climate commitments and targets are ambitious, we believe that they are realistic and achievable.

We may also incur additional expenses as a result of U.S.

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

Consummation of any merger, strategic investment 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 commit…

•The potential for claims for damages by the sellers of any business if we enter into an acquisition agreement that we do not ultimately consummate, or if disputes arise post-closing relating to post-closing covenants…

•Difficulties retaining key personnel of the target company;

•Difficulties relating to assimilating the leadership, personnel, benefits, services, and systems of an acquired business and to assimilating marketing and other operational capabilities;

•Difficulties relating to combining previously separate entities into a single, integrated, and efficient business;

•The loss of key customers or suppliers, including as a result of any actual or perceived conflicts of interest;

•Failure to realize anticipated benefits, such as cost savings, synergies, business opportunities and growth opportunities within the anticipated timeframe or at all;

•Valuation methodologies may not accurately capture the value of the target company's business;

Our business strategy involves growth through, among other things, the acquisition of, and strategic investments in, other companies, such as our acquisitions of CH2M, BlackLynx and StreetLight and our strategic inves…

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

As a result of the Separation Transaction, we hold 7.5% of the issued and outstanding shares of common stock of Amentum.

of the Separation Transaction, or do not achieve them in the time we expect, our results of operations and financial condition could be materially adversely affected.

We may not achieve some or all of the expected benefits of the Separation Transaction, including with respect to our remaining ownership interest.

•Unexpected changes in foreign government policies and regulatory requirements;

Artificial intelligence, machine learning, data science and similar technologies (collectively, “AI”), including third-party AI tools, may be enabled by, or integrated into some of our business and solutions.

that one or more of our product offerings could fail to meet specifications in a particular application or could be perceived by our customers to contain defects, which could result in our being liable for damages and…

A significant portion of our revenue is earned directly or indirectly from various government agencies.

We provide services that are subject to professional standards and qualifications, including providing services that are based on our professional engineering expertise, as well as our other professional credentials.

For fiscal 2024, approximately 31.1% of our revenues were earned under fixed-price contracts.

Project sites are inherently dangerous workplaces.

Risks Related to the Separation Transaction

We also provide information to our investors on our practices, policies and other matters related to sustainability and corporate responsibility and submit such information to organizations that evaluate companies on…

Public statements with respect to sustainability and corporate responsibility-related matters also are becoming increasingly subject to heightened scrutiny from public and governmental authorities for being misleading…

various reporting standards within the timelines expected by stakeholders or at all, could also result in similar negative impacts.

There is increasing scrutiny from governmental organizations, clients, investors, suppliers, partners, communities, employees and other stakeholders on companies’ practices and disclosures related to sustainability an…

We may also incur additional expenses as a result of U.S.

Evolving regulatory and disclosure standards around sustainability objectives and reporting could impose additional compliance obligations on us that could adversely impact our business and results of operations.

Our business operations are subject to various and changing federal, state, local and foreign laws and regulations that could result in costs or sanctions that adversely affect our business and results of operations.

In addition, we may periodically divest or plan to divest businesses, including businesses that are no longer a part of our ongoing strategic plan.

•The potential for litigation relating to the transaction, including claims for damages or indemnification by any counterparty, including potential disputes relating to post-closing covenants or payment obligations; and