XML 44 R15.htm IDEA: XBRL DOCUMENT
v3.21.2

Income Taxes | 12 Months Ended
--- | ---
Oct. 01, 2021
Income Tax Disclosure [Abstract] |
Income Taxes | Income Taxes The following table presents the components of our consolidated income taxes for continuing operations for years ended October 1, 2021, October 2, 2020 and September 27, 2019 (in thousands):
| For the Years Ended
| October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
Current income tax (benefit) expense from continuing operations: |  |  |  |  |
Federal | $ | 91,313 |  |  | $ | (37,030) |  |  | $ | 25,549 |
State | 30,886 |  |  | (5,021) |  |  | 6,639 |
Foreign | 38,959 |  |  | 41,616 |  |  | 57,156 |
Total current tax expense from continuing operations | 161,158 |  |  | (435) |  |  | 89,344 |
Deferred income tax expense (benefit) from continuing operations: |  |  |  |  |
Federal | 35,109 |  |  | 53,485 |  |  | 6,607 |
State | 21,826 |  |  | 7,133 |  |  | 20,408 |
Foreign | 56,688 |  |  | (4,863) |  |  | (79,405) |
Total deferred tax expense (benefit) from continuing operations | 113,623 |  |  | 55,755 |  |  | (52,390) |
Consolidated income tax expense from continuing operations | $ | 274,781 |  |  | $ | 55,320 |  |  | $ | 36,954 |
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. The following table presents the components of our net deferred tax (liabilities) assets at October 1, 2021 and October 2, 2020 (in thousands):
| October 1, 2021 |  | October 2, 2020
Deferred tax assets: |  |  |
Obligations relating to: |  |  |
Defined benefit pension plans | $ | 9,702 |  |  | $ | 55,949 |
Other employee benefit plans | 156,931 |  |  | 132,613 |
Net operating losses | 197,929 |  |  | 197,987 |
Foreign tax credit | 87,689 |  |  | 87,259 |
Contract revenues and costs | 81,633 |  |  | 68,870 |
Investments | — |  |  | 65,235 |
Lease liability | 155,064 |  |  | 154,979 |
Deferred interest | 9,988 |  |  | 11,410 |
Valuation allowance | (188,662) |  |  | (140,578) |
Gross deferred tax assets | 510,274 |  |  | 633,724 |
Deferred tax liabilities: |  |  |
Depreciation and amortization | (436,324) |  |  | (240,097) |
Lease right of use asset | (93,338) |  |  | (89,824) |
Unremitted earnings | (7,111) |  |  | (17,295) |
Partnership investment | (72,560) |  |  | (66,082) |
Other, net | (12,128) |  |  | (12,745) |
Gross deferred tax liabilities | (621,461) |  |  | (426,043) |
Net deferred tax (liabilities) assets | $ | (111,187) |  |  | $ | 207,681 |
Certain amounts have been reclassified to conform to current year presentation. Tax law changes were enacted in the United Kingdom that, among other provisions, will increase the corporate tax rate to 25% from 19% effective April 1, 2023. The rate change resulted in an increase to our net deferred tax liabilities of $25.6 million and a corresponding increase to income tax expense for the year ended October 1, 2021. Our income tax expense in the United Kingdom will be based on the new rate beginning in April 2023. 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 $188.7 million at October 1, 2021 and $140.6 million at October 2, 2020. Of the $48.1 million increase in the valuation allowance, $27.4 million relates to a change in judgment on the realizability of domestic deferred tax assets which are capital in nature with no expected capital gains to be able to realize them, $11.7 million for a change in judgment on the realizability on state net operating losses, a change of $4.6 million from certain deferred tax assets acquired in the PA Consulting acquisition which have been determined to not be realizable, $3.5 million relates to a tax rate change in the U.K., and $0.9 million attributable to current year activity. At October 1, 2021 and October 2, 2020, the domestic and international net operating loss (NOL) carryforwards totaled $760.4 million and $783.9 million, resulting in an NOL deferred tax asset of $197.9 million and $198.0 million, respectively. The Company's net operating losses have various expiration periods between 2021 and indefinite periods. At October 1, 2021, the Company has foreign tax credit carryforwards of $87.7 million, which has a full valuation allowance established, expiring between 2022 and 2031. 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 1, 2021, October 2, 2020 and September 27, 2019 (in millions):
For the Years Ended
October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
$ | 9.9 |  |  | $ | 10.2 |  |  | $ | 7.9 |
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 1, 2021, October 2, 2020 and September 27, 2019 (dollars in thousands):
| For the Years Ended
| October 1, 2021 |  | % |  | October 2, 2020 |  | % |  | September 27, 2019 |  | %
Statutory amount | $ | 146,078 |  |  | 21.0 | % |  | $ | 92,652 |  |  | 21.0 | % |  | $ | 73,701 |  |  | 21.0 | %
State taxes, net of the federal benefit | 14,564 |  | 2.1 | % |  | 7,254 |  |  | 1.6 | % |  | 10,183 |  |  | 2.9 | %
Exclusion of tax on non-controlling interests | (7,999) |  | (1.1) | % |  | (6,622) |  |  | (1.5) | % |  | (4,839) |  |  | (1.4) | %
Foreign: |  |  |  |  |  |  |  |  |  |  |
Difference in tax rates of foreign operations | 3,684 |  | 0.5 | % |  | (6,267) |  |  | (1.4) | % |  | 1,083 |  |  | 0.3 | %
Expense/(benefit) from foreign valuation allowance change | 2,148 |  | 0.3 | % |  | (16,861) |  |  | (3.8) | % |  | (29,125) |  |  | (8.3) | %
Nondeductible compensation | 48,727 |  | 7.0 | % |  | — |  |  | — | % |  | — |  |  | — | %
U.S. tax cost (benefit) of foreign operations | 35,228 |  |  | 5.1 | % |  | 42,992 |  |  | 9.7 | % |  | (17,760) |  |  | (5.1) | %
Tax differential on foreign earnings | 89,787 |  |  | 12.9 | % |  | 19,864 |  |  | 4.5 | % |  | (45,802) |  |  | (13.1) | %
Foreign tax credits | (25,230) |  | (3.6) | % |  | (26,471) |  |  | (6.0) | % |  | (15,682) |  |  | (4.5) | %
Tax Rate Change | 25,588 |  |  | 3.7 | % |  | (6,811) |  |  | (1.5) | % |  | — |  |  | — | %
Tax reform | — |  | — | % |  | — |  |  | — | % |  | 36,674 |  |  | 10.4 | %
Valuation allowance | 38,928 |  | 5.6 | % |  | — |  |  | — | % |  | (207) |  |  | (0.1) | %
Uncertain tax positions | 978 |  | 0.1 | % |  | (11,338) |  |  | (2.6) | % |  | (6,883) |  |  | (2.0) | %
Other items: |  |  |  |  |  |  |  |  |  |  |
Energy efficient commercial buildings deduction | (3,760) |  | (0.5) | % |  | (7,267) |  |  | (1.6) | % |  | (2,957) |  |  | (0.8) | %
Disallowed officer compensation | 6,689 |  | 1.0 | % |  | 5,081 |  |  | 1.2 | % |  | 5,568 |  |  | 1.6 | %
Stock compensation | (9,946) |  | (1.4) | % |  | (10,234) |  |  | (2.3) | % |  | (7,864) |  |  | (2.2) | %
Other items – net | (896) |  | (0.1) | % |  | (788) |  |  | (0.2) | % |  | (4,938) |  |  | (1.4) | %
Total other items | (7,913) |  | (1.1) | % |  | (13,208) |  |  | (3.0) | % |  | (10,191) |  |  | (2.8) | %
Taxes on income from continuing operations | $ | 274,781 |  |  | 39.5 | % |  | $ | 55,320 |  |  | 12.5 | % |  | $ | 36,954 |  |  | 10.5 | %
The following table presents income tax payments, net made during the years ended October 1, 2021, October 2, 2020 and September 27, 2019 (in millions):
October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
$ | 75.6 |  |  | $ | 39.8 |  |  | $ | 291.7 |
The following table presents the components of our consolidated earnings from continuing operations before taxes for the years ended October 1, 2021, October 2, 2020 and September 27, 2019 (in thousands):
| For the Years Ended
| October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
United States earnings | $ | 634,820 |  |  | $ | 208,302 |  |  | $ | 225,898 |
Foreign earnings | 60,782 |  |  | 232,901 |  |  | 125,061 |
| $ | 695,602 |  |  | $ | 441,203 |  |  | $ | 350,959 |
During the first and second quarters of fiscal year ended 2021, Jacobs management asserted that $4.4 million of undistributed earnings in Canada and $7.7 million of undistributed earnings in India be permanently reinvested. Management considered the additional working capital needs along with the future business operations in Canada and India in determining the permanent reinvestment assertion. 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 $91.9 million and $93.4 million at October 1, 2021 and October 2, 2020, respectively, after ASU 2013-11 netting of $21.7 million and $9.1 million, respectively. If recognized, $84.7 million would affect the Company’s consolidated effective income tax rate. The Company had $41.6 million and $40.4 million in accrued interest and penalties at October 1, 2021 and October 2, 2020, respectively. The Company estimates that, within twelve months, we may realize a decrease in our uncertain tax positions of approximately $5.5 million as a result of concluding various tax audits and closing tax years, as well as an estimated decrease of $15.4 million related to the filing of an amended return which would remove the uncertain tax position from the balance sheet. As of October 1, 2021, 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 PA Consulting related impacts added and with ECR-sale related impacts removed in the Acquisitions/Divestitures row, for the years ended October 1, 2021, October 2, 2020 and September 27, 2019 (in thousands):
| For the Years Ended
| October 1, 2021 |  | October 2, 2020 |  | September 27, 2019
Balance, beginning of year | $ | 102,484 |  |  | $ | 104,355 |  |  | $ | 179,140 |
Acquisitions/Divestitures | 7,639 |  |  | — |  |  | (31,004) |
Additions based on tax positions related to the current year | 7,088 |  |  | 1,064 |  |  | 7,455 |
Additions for tax positions of prior years | 1,711 |  |  | 7,472 |  |  | 1,994 |
Reductions for tax positions of prior years | (4,851) |  |  | (6,695) |  |  | (49,849) |
Settlement | (438) |  |  | (3,712) |  |  | (3,381) |
Balance, end of year | $ | 113,633 |  |  | $ | 102,484 |  |  | $ | 104,355 |
On March 2, 2021, Jacobs completed the strategic investment of a 65% interest in PA Consulting. On November 24, 2020, the Company completed the acquisition of Buffalo Group. On March 6, 2020, the Company completed the acquisition of John Wood Group's nuclear business and on June 12, 2019, the Company completed the acquisition of KeyW. For income tax purposes, the PA Consulting, John Wood Group's nuclear business and KeyW transactions were accounted for as stock purchases, while the Buffalo Group transaction was structured as an asset purchase. As a result of the acquisitions, the Company adjusted its U.S. GAAP opening balance sheet of PA Consulting, Buffalo Group, John Wood Group and KeyW 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 in the transactions structured as a stock purchase. However, in the Buffalo Group transaction, the basis of the net assets acquired were stepped up to fair value, as the sale was treated as a purchase of assets. For PA Consulting and Buffalo Group, 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 John Wood Group's nuclear business and KeyW, the Company completed its purchase accounting in the current and prior fiscal years, respectively.

X
- References No definition available. + Details
Name: | us-gaap_IncomeTaxDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 21 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32857-109319 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 2 -Subparagraph (SAB Topic 11.C) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330215-122817 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 17 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32809-109319 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SAB TOPIC 6.I.5.Q1) -URI http://asc.fasb.org/extlink&oid=122134291&loc=d3e330036-122817 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 10 -Section 50 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=121826272&loc=d3e32705-109319 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 270 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6424409&loc=d3e44925-109338 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -URI http://asc.fasb.org/topic&trid=2144680 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 740 -SubTopic 30 -Section 50 -Paragraph 2 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=6424122&loc=d3e41874-109331 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.4-08(h)(2)) -URI http://asc.fasb.org/extlink&oid=120395691&loc=d3e23780-122690 + Details
Name: | us-gaap_IncomeTaxDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration