7.	Segment Information

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

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

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.

On December 15, 2017, the Company completed the acquisition of CH2M. For purposes of the Company’s first quarter fiscal 2018 segment reporting, the operating financial information of CH2M has been categorized within the Company’s existing LOB business structure, with its sales and operating profit results for the time period during which CH2M has been under the ownership of the Company (December 15, 2017 - December 29, 2017) being allocated to the Company’s A&T, B&I and P&C lines of business under a transitional business organization structure. Additionally, the preliminary purchase accounting for the acquisition, including opening balance sheet fair value determinations as well as final segment categorizations are still in process.

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 CH2M transaction and integration costs (in thousands).


	For the Three Months Ended
	December 29, 2017		December 30, 2016
Revenues from External Customers:
Aerospace & Technology	$	721,567	$	577,436
Buildings & Infrastructure		658,466		580,617
Industrial		749,321		751,738
Petroleum & Chemicals		620,957		641,813
Total	$	2,750,311	$	2,551,604


	For the Three Months Ended
	December 29, 2017			December 30, 2016
Segment Operating Profit:
Aerospace & Technology	$	65,820		$	51,087
Buildings & Infrastructure		45,273			38,797
Industrial		38,113			25,129
Petroleum & Chemicals		27,557			23,652
Total Segment Operating Profit		176,763			138,665
Other Corporate Items		(42,129	)		(18,296	)
Restructuring and Other Charges		(19,349	)		(31,741	)
CH2M Transaction Costs		(67,641	)		—
Total U.S. GAAP Operating Profit		47,644			88,628
Total Other Expense (1)		(5,728	)		(2,748	)
Earnings Before Taxes	$	41,916		$	85,880

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

During the fourth fiscal quarter of 2017, the Company implemented certain restructuring activities (primarily severance related activities) associated with the Company’s announced definitive agreement to acquire CH2M. Following the closing of the CH2M acquisition, these activities have continued into the first fiscal quarter of 2018 and include associated charges for professional services, personnel costs, severance and costs associated with co-locating Jacobs and CH2M offices, amounting to approximately $19.3 million in pre-tax charges during first quarter ended December 29, 2017. These activities are expected to continue through 2019. These activities are not expected to involve the exit of any service types or client end-markets.

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

Personnel costs	$	41,222
Professional service, real estate-related, and other expenses (1)	26,675
Total	$	67,897

(1)

Includes deferred financing fees related to the CH2M acquisition of $256 thousand for the three months ending December 29, 2017.

Included in “other corporate items” 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 the Management Incentive Plan and the 1999 SIP relating to corporate personnel whose other compensation costs are not allocated to the LOBs; (iii) the amortization of intangible assets acquired as part of purchased 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 items” includes 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 and therefore should not be attributed to the LOB.

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

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

	For the Three Months Ended
	December 29, 2017
	Aerospace & Technology		Buildings & Infrastructure		Industrial		Petroleum & Chemicals		Total
Technical Professional Services Revenues
Project Services	$	274,945		615,238		67,672		401,166		1,359,021
Process, Scientific, and Systems Consulting		244,128		-		-		6,945		251,073
Total Technical Professional Services Revenues		519,073		615,238		67,672		408,111		1,610,094
Field Services Revenues
Construction		121,869		42,653		496,632		212,415		873,569
Operations and Maintenance (“O&M”)		80,625		575		185,017		431		266,648
Total Field Services Revenues		202,494		43,228		681,649		212,846		1,140,217
Total Revenues	$	721,567	$	658,466	$	749,321	$	620,957	$	2,750,311

	For the Three Months Ended
	December 30, 2016
	Aerospace & Technology		Buildings & Infrastructure		Industrial		Petroleum & Chemicals		Total
Technical Professional Services Revenues
Project Services	$	176,464	$	509,849	$	2,616	$	369,262	$	1,058,191
Process, Scientific, and Systems Consulting		199,829		—		—		6,917		206,746
Total Technical Professional Services Revenues		376,293		509,849		2,616		376,179		1,264,937
Field Services Revenues
Construction		82,787		66,641		535,336		262,183		946,947
Operations and Maintenance (“O&M”)		118,356		4,127		213,786		3,451		339,720
Total Field Services Revenues		201,143		70,768		749,122		265,634		1,286,667
Total Revenues	$	577,436	$	580,617	$	751,738	$	641,813	$	2,551,604