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

FORM 10-Q
(Mark one)
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended April 1, 2022
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from              to             
Commission File Number 1-7463
JACOBS ENGINEERING GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware95-4081636
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification Number)
1999 Bryan StreetSuite 1200DallasTexas75201
(Address of principal executive offices)(Zip Code)

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

Securities registered pursuant to Section 12(b) of the Act:
_________________________________________________________________
Title of Each ClassTrading Symbol(s)Name of Each Exchange on Which Registered
Common Stock$1 par valueJNew York Stock Exchange

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
Page 1


Indicate by check-mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes   ☒  No
Number of shares of common stock outstanding at April 22, 2022: 128,627,268
Page 2


JACOBS ENGINEERING GROUP INC.
INDEX TO FORM 10-Q
Page No.
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.


Page 3


Part I - FINANCIAL INFORMATION
Item 1.    Financial Statements.

Page 4


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share information)
April 1, 2022October 1, 2021
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents$1,235,422 $1,014,249 
Receivables and contract assets3,302,868 3,101,418 
Prepaid expenses and other152,989 176,228 
Total current assets4,691,279 4,291,895 
Property, Equipment and Improvements, net326,596 353,117 
Other Noncurrent Assets:
Goodwill7,492,015 7,197,000 
Intangibles, net1,553,283 1,565,758 
Deferred income tax assets68,376 103,193 
Operating lease right-of-use assets556,686 650,097 
Miscellaneous495,057 471,549 
Total other noncurrent assets10,165,417 9,987,597 
$15,183,292 $14,632,609 
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current maturities of long-term debt$52,911 $53,456 
Accounts payable921,372 908,441 
Accrued liabilities1,955,327 1,533,559 
Operating lease liability162,817 172,414 
Contract liabilities672,265 542,054 
Total current liabilities3,764,692 3,209,924 
Long-term Debt3,196,374 2,839,933 
Liabilities relating to defined benefit pension and retirement plans366,788 418,080 
Deferred income tax liabilities211,341 214,380 
Long-term operating lease liability688,604 758,358 
Other deferred liabilities163,988 559,375 
Commitments and Contingencies
Redeemable Noncontrolling interests669,527 657,722 
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 128,899,796 shares and 128,892,540
shares as of April 1, 2022 and October 1, 2021, respectively
128,900 128,893 
Additional paid-in capital2,667,256 2,590,012 
Retained earnings4,069,664 4,015,578 
Accumulated other comprehensive loss(788,374)(794,442)
Total Jacobs stockholders’ equity6,077,446 5,940,041 
Noncontrolling interests44,532 34,796 
Total Group stockholders’ equity6,121,978 5,974,837 
$15,183,292 $14,632,609 

See the accompanying Notes to Consolidated Financial Statements – Unaudited.

Page 5


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS
Three and Six Months Ended April 1, 2022 and April 2, 2021
(In thousands, except per share information)
(Unaudited)
For the Three Months EndedFor the Six Months Ended
April 1, 2022April 2, 2021April 1, 2022April 2, 2021
Revenues$3,834,059 $3,547,873 $7,214,684 $6,929,708 
Direct cost of contracts(2,963,649)(2,780,860)(5,547,800)(5,530,636)
Gross profit870,410 767,013 1,666,884 1,399,072 
Selling, general and administrative expenses(704,195)(808,125)(1,323,336)(1,226,246)
Operating Profit (Loss)166,215 (41,112)343,548 172,826 
Other Income (Expense):
Interest income381 608 1,882 1,732 
Interest expense(21,995)(15,464)(41,421)(32,777)
Miscellaneous income (expense), net10,681 (56,313)20,362 100,047 
Total other (expense) income, net(10,933)(71,169)(19,177)69,002 
Earnings (Loss) from Continuing Operations Before Taxes155,282 (112,281)324,371 241,828 
Income Tax (Expense) Benefit from Continuing Operations(46,166)20,772 (62,054)(66,250)
Net Earnings (Loss) of the Group from Continuing Operations109,116 (91,509)262,317 175,578 
Net (Loss) Earnings of the Group from Discontinued Operations(1)11,320 (233)11,305 
Net Earnings (Loss) of the Group109,115 (80,189)262,084 186,883 
Net Earnings Attributable to Noncontrolling Interests from Continuing Operations(10,261)(10,158)(19,514)(20,184)
Net (Earnings) Loss Attributable to Redeemable Noncontrolling interests(10,038)101,392 (19,721)101,392 
Net Earnings (Loss) Attributable to Jacobs from Continuing Operations88,817 (275)223,082 256,786 
Net Earnings Attributable to Jacobs$88,816 $11,045 $222,849 $268,091 
Net Earnings Per Share:
Basic Net Earnings from Continuing Operations Per Share$0.69 $ $1.72 $1.97 
Basic Net Earnings from Discontinued Operations Per Share$ $0.09 $ $0.09 
Basic Earnings Per Share$0.69 $0.08 $1.72 $2.06 
Diluted Net Earnings from Continuing Operations Per Share$0.68 $ $1.71 $1.96 
Diluted Net Earnings from Discontinued Operations Per Share$ $0.09 $ $0.09 
Diluted Earnings Per Share$0.68 $0.08 $1.71 $2.04 
See the accompanying Notes to Consolidated Financial Statements - Unaudited.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three and Six Months Ended April 1, 2022 and April 2, 2021
(In thousands)
(Unaudited)
For the Three Months EndedFor the Six Months Ended
April 1, 2022April 2, 2021April 1, 2022April 2, 2021
Net Earnings (Loss) of the Group$109,115 $(80,189)$262,084 $186,883 
Other Comprehensive Income:
Foreign currency translation adjustment(45,827)(15,450)(54,512)70,888 
Gain on cash flow hedges46,491 27,604 55,346 31,187 
Change in pension and retiree medical plan liabilities12,036 1,490 20,075 (17,863)
Other comprehensive income before taxes12,700 13,644 20,909 84,212 
Income Tax (Expense) Benefit:
Foreign currency translation adjustment(400)3,409 2,590 (11,036)
Cash flow hedges(12,290)(7,315)(15,235)(7,094)
Change in pension and retiree medical plan liabilities(728)(838)(2,196)(1,664)
Income Tax Expense:(13,418)(4,744)(14,841)(19,794)
Net other comprehensive (loss) income(718)8,900 6,068 64,418 
Net Comprehensive Income (Loss) of the Group108,397 (71,289)268,152 251,301 
Net Earnings Attributable to Noncontrolling Interests(10,261)(10,158)(19,514)(20,184)
Net (Earnings) Loss Attributable to Redeemable Noncontrolling interests(10,038)101,392 (19,721)101,392 
Net Comprehensive Income Attributable to Jacobs$88,098 $19,945 $228,917 $332,509 
See the accompanying Notes to Consolidated Financial Statements - Unaudited.

Page 7


JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Three Months Ended April 1, 2022 and April 2, 2021
(In thousands)
(Unaudited)
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Jacobs Stockholders’ EquityNoncontrolling InterestsTotal Group Stockholders’ Equity
Balances at January 1, 2021$130,035 $2,597,586 $4,249,408 $(877,539)$6,099,490 $43,877 $6,143,367 
Net earnings— — 11,045 — 11,045 10,158 21,203 
Foreign currency translation adjustments, net of deferred taxes of $(3,409)
— — — (12,041)(12,041)— (12,041)
Pension liability, net of deferred taxes of $838
— — — 652 652 — 652 
Gain on derivatives, net of deferred taxes of $7,315
— — — 20,289 20,289 — 20,289 
Dividends— — (27,482)— (27,482)— (27,482)
Redeemable Noncontrolling interests redemption value adjustment to Common Shareholders— — (107,238)— (107,238)— (107,238)
Noncontrolling interests - distributions and other— — — — — (18,728)(18,728)
Stock based compensation— 15,136 — — 15,136 — 15,136 
Issuances of equity securities including shares withheld for taxes137 8,732 (133)— 8,736 — 8,736 
Repurchases of equity securities  (148)— (148)— (148)
Balances at April 2, 2021
$130,172 $2,621,454 $4,125,452 $(868,639)$6,008,439 $35,307 $6,043,746 
Balances at December 31, 2021$129,153 $2,641,059 $4,087,390 $(787,656)$6,069,946 $29,999 $6,099,945 
Net earnings— — 88,816 — 88,816 10,261 99,077 
Foreign currency translation adjustments, net of deferred taxes of $400
— — — (46,227)(46,227)— (46,227)
Pension liability, net of deferred taxes of $728
— — — 11,308 11,308 — 11,308 
Gain on derivatives, net of deferred taxes of $12,290
— — — 34,201 34,201 — 34,201 
Dividends— — (29,871)— (29,871)— (29,871)
Redeemable Noncontrolling interests redemption value adjustment— — (35,117)— (35,117)— (35,117)
Noncontrolling interests - distributions and other— — — — — 4,272 4,272 
Stock based compensation — 18,147 — — 18,147 — 18,147 
Issuances of equity securities including shares withheld for taxes142 16,134 (33)— 16,243 — 16,243 
Repurchases of equity securities(395)(8,084)(41,521)— (50,000)— (50,000)
Balances at April 1, 2022$128,900 $2,667,256 $4,069,664 $(788,374)$6,077,446 $44,532 $6,121,978 
See the accompanying Notes to Consolidated Financial Statements – Unaudited.




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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
For the Six Months Ended April 1, 2022 and April 2, 2021
(In thousands)
(Unaudited)
Common StockAdditional Paid-in CapitalRetained EarningsAccumulated Other Comprehensive Income (Loss)Total Jacobs Stockholders’ EquityNoncontrolling InterestsTotal Group Stockholders’ Equity
Balances at October 2, 2020$129,748 $2,598,446 $4,020,575 $(933,057)$5,815,712 $39,955 $5,855,667 
Net earnings— — 268,091 — 268,091 20,184 288,275 
Foreign currency translation adjustments, net of deferred taxes of $11,036
— — — 59,852 59,852 — 59,852 
Pension liability, net of deferred taxes of $1,664
— — — (19,527)(19,527)— (19,527)
Gain on derivatives, net of deferred taxes of $7,094
— — — 24,093 24,093 — 24,093 
Dividends— — (27,515)— (27,515)(27,515)
Redeemable Noncontrolling interests redemption value adjustment to Common Shareholders— — (107,238)— (107,238)— (107,238)
Noncontrolling interests - distributions and other— — — — — (24,832)(24,832)
Stock based compensation — 26,977 — — 26,977 — 26,977 
Issuances of equity securities including shares withheld for taxes675 1,058 (8,790)— (7,057)— (7,057)
Repurchases of equity securities(251)(5,027)(19,671)— (24,949)— (24,949)
Balances at April 2, 2021$130,172 $2,621,454 $4,125,452 $(868,639)$6,008,439 $35,307 $6,043,746 
Balances at October 1, 2021$128,893 $2,590,012 $4,015,578 $(794,442)$5,940,041 $34,796 $5,974,837 
Net earnings— — 222,849 — 222,849 19,514 242,363 
Foreign currency translation adjustments, net of deferred taxes of $(2,590)
— — — (51,922)(51,922)— (51,922)
Pension liability, net of deferred taxes of $2,196
— — — 17,879 17,879 — 17,879 
Gain on derivatives, net of deferred taxes of $15,235
— — — 40,111 40,111 — 40,111 
Dividends— — (29,994)— (29,994)— (29,994)
Redeemable Noncontrolling interests redemption value adjustment— — (50,320)— (50,320)— (50,320)
Repurchase of redeemable noncontrolling interests7,761 7,761 7,761 
Noncontrolling interests - distributions and other— — — — — (9,778)(9,778)
Stock based compensation — 25,161 — — 25,161 — 25,161 
Issuances of equity securities including shares withheld for taxes744 17,040 (11,904)— 5,880 — 5,880 
Repurchases of equity securities(737)35,043 (84,306)— (50,000)— (50,000)
Balances at April 1, 2022$128,900 $2,667,256 $4,069,664 $(788,374)$6,077,446 $44,532 $6,121,978 
See the accompanying Notes to Consolidated Financial Statements – Unaudited.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended April 1, 2022 and April 2, 2021
(In thousands)
(Unaudited)
For the Six Months Ended
April 1, 2022April 2, 2021
Cash Flows from Operating Activities:
Net earnings attributable to the Group$262,084 $186,883 
Adjustments to reconcile net earnings to net cash flows provided by operations:
Depreciation and amortization:
Property, equipment and improvements52,620 48,079 
Intangible assets95,338 53,753 
Gain on sale of ECR business (15,608)
Gain on investment in equity securities (114,443)
Stock based compensation25,161 26,977 
Equity in earnings of operating ventures, net of return on capital distributions13,280 6,353 
Loss on disposals of assets, net421 353 
Impairment of long-lived assets and equity method investment74,585 33,197 
Deferred income taxes16,040 41,063 
Changes in assets and liabilities, excluding the effects of businesses acquired:
Receivables and contract assets, net of contract liabilities(33,881)73,542 
Prepaid expenses and other current assets15,916 14,521 
Miscellaneous other assets67,201 76,401 
Accounts payable18,448 (152,750)
Accrued liabilities(119,982)99,198 
Other deferred liabilities(33,305)(22,490)
      Other, net(7,670)(4,797)
          Net cash provided by operating activities446,256 350,232 
Cash Flows from Investing Activities:
Additions to property and equipment(48,223)(45,053)
Disposals of property and equipment and other assets1,064 427 
Capital contributions to equity investees, net of return of capital distributions1,082 (4,193)
Acquisitions of businesses, net of cash acquired(412,748)(1,741,062)
Disposal of investment in equity securities 13,027 
Proceeds related to sales of businesses 36,360 
          Net cash used for investing activities(458,825)(1,740,494)
Cash Flows from Financing Activities:
Proceeds from long-term borrowings1,519,000 3,118,315 
Repayments of long-term borrowings(1,125,528)(1,328,283)
Proceeds from short-term borrowings  
Repayments of short-term borrowings(6,359)(7,675)
Debt issuance costs (2,697)
Proceeds from issuances of common stock28,187 18,585 
Common stock repurchases(50,000)(24,949)
Taxes paid on vested restricted stock(28,398)(25,642)
Cash dividends to shareholders(57,247)(52,438)
Net (dividends) contributions associated with noncontrolling interests(9,416)(29,442)
Repurchase of redeemable noncontrolling interests(35,095) 
            Net cash provided by financing activities235,144 1,665,774 
Effect of Exchange Rate Changes(12,792)28,918 
Net Increase in Cash and Cash Equivalents and Restricted Cash209,783 304,430 
Cash and Cash Equivalents, including Restricted Cash, at the Beginning of the Period1,026,575 862,424 
Cash and Cash Equivalents, including Restricted Cash, at the End of the Period$1,236,358 $1,166,854 
See the accompanying Notes to Consolidated Financial Statements – Unaudited.


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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1.Basis of Presentation
Unless the context otherwise requires:
References herein to “Jacobs” are to Jacobs Engineering Group Inc. and its predecessors;
References herein to the “Company”, “we”, “us” or “our” are to Jacobs Engineering Group Inc. and its consolidated subsidiaries; and
References herein to the “Group” are to the combined economic interests and activities of the Company and the persons and entities holding noncontrolling interests in our consolidated subsidiaries.
The accompanying consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form 10-Q. Consequently, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been condensed or omitted. Readers of this Quarterly Report on Form 10-Q should also read our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 1, 2021 (“2021 Form 10-K”).
In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our consolidated financial statements at April 1, 2022, and for the three and six month periods ended April 1, 2022.
Our interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.
On February 4, 2022, the Company acquired StreetLight Data, Inc. ("StreetLight"). StreetLight is a pioneer of mobility analytics who uses its data and machine learning resources to shed light on mobility and enable users to solve complex transportation problems. The Company paid total base consideration of approximately $190.7 million in cash, and issued $0.9 million in equity and $5.2 million in in-the-money stock options to the former owners of StreetLight. The Company also paid off StreetLight's debt of approximately $1.0 million simultaneously with the consummation of the acquisition. The Company has recorded its preliminary purchase price allocation associated with the acquisition, which is summarized in Note 16- Other Business Combinations.
On November 19, 2021, a subsidiary of Jacobs acquired all outstanding shares of common stock of BlackLynx ("BlackLynx"), a provider of high-performance software, to complement Jacobs' portfolio of cyber, intelligence and digital solutions. The Company paid total base consideration of approximately $235.4 million in cash to the former owners of BlackLynx. In addition, the transaction involved the potential payment of future consideration that is contingent upon the achievement of certain revenue and gross margin thresholds being achieved in calendar year 2022. The estimated fair value of the contingent consideration on the acquisition date is $0.4 million. The future contingent consideration will be paid, if and to the extent achieved, in the second quarter of fiscal 2023. In conjunction with the acquisition, the Company also paid off BlackLynx's debt of approximately $5.3 million simultaneously with the consummation of the acquisition. The Company has recorded its preliminary purchase price allocation associated with the acquisition, which is summarized in Note 16- Other Business Combinations.
On March 2, 2021, Jacobs completed the strategic investment of a 65% interest in PA Consulting Group Limited ("PA Consulting"), a UK-based leading innovation and transformation consulting firm. The total consideration paid by the Company was $1.7 billion, funded through cash on hand, proceeds from a new term loan and draws on the Company's existing revolving credit facility. Further, in connection with the transaction, an additional $261 million in investment proceeds had not yet been distributed at the investment date due to continuing employment requirements of associated management owners. Consequently, this amount represented compensation expense incurred related to the investment that was expensed subsequent to the date of the transaction, and was reflected in selling, general and administrative expense and cash from operations for the fiscal year ended October 1, 2021. The remaining 35% interest was acquired by PA Consulting employees, whose redeemable noncontrolling interests had a fair value of $582.4 million on the closing date, including subsequent purchase accounting adjustments. PA Consulting is accounted for as a consolidated subsidiary and as a separate operating segment. See Note 15- PA Consulting Business Combination for more discussion on the investment and Note 12- Borrowings for more discussion on the financing for the transaction.
On November 24, 2020, a subsidiary of Jacobs completed the acquisition of Buffalo Group, a leader in advanced cyber and intelligence solutions, which allows Jacobs to further expand its cyber and intelligence solutions offerings to

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
government clients. The Company paid total consideration of $190.1 million, which was comprised of approximately $182.4 million in cash to the former owners of Buffalo Group and contingent consideration of $7.7 million. The contingent consideration was subsequently recognized as an offset to selling, general and administrative expense when it was determined no amounts would be paid. In conjunction with the acquisition, the Company assumed the Buffalo Group's debt of approximately $7.7 million. The Company repaid all of the assumed Buffalo Group debt by the end of the first fiscal quarter of 2021. The Company has recorded its final purchase price allocation associated with the acquisition, which is summarized in Note 16- Other Business Combinations.
On April 26, 2019, Jacobs completed the sale of its Energy, Chemicals and Resources ("ECR") business to Worley Limited ("Worley"), a company incorporated in Australia, for a purchase price of $3.4 billion consisting of (i) $2.8 billion in cash plus (ii) 58.2 million ordinary shares of Worley, subject to adjustments for changes in working capital and certain other items (the “ECR sale”). As a result of the ECR sale, substantially all ECR-related assets and liabilities were sold (the "Disposal Group"). We determined that the Disposal Group should be reported as discontinued operations in accordance with ASC 210-05, Discontinued Operations because their disposal represents a strategic shift that had a major effect on our operations and financial results. As such, the financial results of the ECR business are reflected in our unaudited Consolidated Statements of Earnings as discontinued operations for all periods presented. As of October 1, 2021, all of the ECR business to be sold under the terms of the ECR sale had been conveyed to Worley and as such, no amounts remain held for sale. For further discussion, see Note 17- Sale of Energy, Chemicals and Resources ("ECR") Business to the consolidated financial statements.
2.    Use of Estimates and Assumptions
The preparation of financial statements in conformity with U.S. GAAP requires us to employ estimates and make assumptions that affect the reported amounts of certain assets and liabilities, the revenues and expenses reported for the periods covered by the accompanying consolidated financial statements, and certain amounts disclosed in these Notes to the Consolidated Financial Statements. Although such estimates and assumptions are based on management’s most recent assessment of the underlying facts and circumstances utilizing the most current information available and past experience including considerations for potential impacts of the continuing coronavirus (COVID-19) pandemic, actual results could differ significantly from those estimates and assumptions. Our estimates, judgments, and assumptions are evaluated periodically and adjusted accordingly.
Please refer to Note 2- Significant Accounting Policies of Notes to Consolidated Financial Statements included in our 2021 Form 10-K for a discussion of other significant estimates and assumptions affecting our consolidated financial statements.
3.    Fair Value and 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.
Level 3 - Unobservable inputs to the valuation methodology that are significant to the fair value measurement.
Please refer to Note 2- Significant Accounting Policies of Notes to Consolidated Financial Statements included in our 2021 Form 10-K for a more complete discussion of the various items within the consolidated financial statements measured at fair value and the methods used to determine fair value. Please also refer to Note 19- Commitments and Contingencies and Derivative Financial Instruments for discussion regarding the Company's derivative instruments.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The net carrying amounts of cash and cash equivalents, trade receivables and payables and short-term debt approximate fair value due to the short-term nature of these instruments. See Note 12- Borrowings for a discussion of the fair value of long-term debt.
Fair value measurements relating to our business combinations are made primarily using Level 3 inputs including discounted cash flow and to the extent applicable, Monte Carlo simulation techniques. Fair value for the identified intangible assets is generally estimated using inputs primarily for the income approach using the multiple period excess earnings method and the relief from royalties method. The significant assumptions used in estimating fair value include (i) revenue projections of the business, including profitability, (ii) attrition rates and (iii) the estimated discount rate that reflects the level of risk associated with receiving future cash flows. Other personal property assets, such as furniture, fixtures and equipment, are valued using the cost approach, which is based on replacement or reproduction costs of the asset less depreciation. The fair value of the contingent consideration is estimated using a Monte Carlo simulation and the significant assumptions used include projections of revenues and probabilities of meeting those projections. Key inputs to the valuation of the noncontrolling interests include projected cash flows and the expected volatility associated with those cash flows.
4.    New Accounting Pronouncements
ASU 2020-04, Reference Rate Reform, (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting is intended to provide relief for entities impacted by reference rate reform and contains provisions and optional expedients designed to simplify requirements around designation of hedging relationships, probability assessments of hedged forecasted transactions and accounting for modifications of contracts that refer to LIBOR or other rates affected by reference rate reform. The guidance is elective and is effective on the date of issuance. ASU 2020-04 is applied prospectively to contract modifications and as of the effective date for existing and new eligible hedging relationships. The guidance is temporary and will generally not be applicable to contract modifications which occur after December 31, 2022. The adoption of the new guidance in the first quarter of fiscal 2022 allowed the Company to continue its British pound denominated interest rate hedge relationships which previously defined LIBOR as the benchmark interest rate and in December 2021 were amended to replace LIBOR with the Sterling Overnight Index Average rate ("SONIA").
ASU No. 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, is effective for fiscal years beginning after December 15, 2022. ASU 2021-08 requires contract assets and contract liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606, Revenue from Contracts with Customers. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. The Company adopted the new guidance in the first quarter of fiscal 2022 and the adoption had no impact on the Company's financial position, results of operations or cash flows.
5.    Revenue Accounting for Contracts
Disaggregation of Revenues
Our revenues are principally derived from contracts to provide a diverse range of technical, professional, and construction services to a large number of industrial, commercial, and governmental clients. We provide a broad range of engineering, design, and architectural services; construction and construction management services; operations and maintenance services; and technical, digital, process, scientific and systems consulting services. We provide our services through offices and subsidiaries located primarily in North America, Europe, the Middle East, India, Australia, Africa, and Asia. We provide our services under cost-reimbursable and fixed-price contracts. Our contracts are with many different customers in numerous industries. Refer to Note 20- Segment Information for additional information on how we disaggregate our revenues by reportable segment.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
The following table further disaggregates our revenue by geographic area for the three and six months ended April 1, 2022 and April 2, 2021 (in thousands):
Three Months EndedSix Months Ended
April 1, 2022April 2, 2021April 1, 2022April 2, 2021
Revenues:
     United States$2,499,737 $2,474,672 $4,648,289 $4,931,712 
     Europe937,864 756,474 1,804,216 1,395,789 
     Canada67,152 53,687 132,192 109,315 
     Asia36,533 28,650 68,620 56,055 
     India28,844 16,463 50,992 31,010 
     Australia and New Zealand181,650 159,778 359,302 297,186 
     Middle East and Africa82,279 58,149 151,073 108,641 
Total$3,834,059 $3,547,873 $7,214,684 $6,929,708 
Contract Liabilities
Contract liabilities represent amounts billed to clients in excess of revenue recognized to date. Revenue recognized for the three and six months ended April 1, 2022 that was previously included in the contract liability balance on October 1, 2021 was $79.6 million and $371.0 million, respectively. Revenue recognized for the three and six months ended April 2, 2021 that was included in the contract liability balance on October 2, 2020 was $