Joint Ventures and VIE's and Other Investments

12 Months Ended

Oct. 01, 2021

Equity Method Investments and Joint Ventures [Abstract]

Joint Ventures and VIE's and Other Investments

Joint Ventures, VIEs and Other Investments

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 results 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):


	October 1, 2021		October 2, 2020
Current assets	$	289.7	$	261.6
Non-Current assets	0.1		0.2
Total assets	$	289.8	$	261.8
Current liabilities	$	220.8	$	190.3
Non-current liabilities	—		—
Total liabilities	$	220.8	$	190.3


	For the Years Ended
	October 1, 2021		October 2, 2020		September 27, 2019
Revenue	$	1,037.3	$	912.9	$	571.6
Direct cost of contracts	(910.1)		(807.9)		(526.7)
Gross profit	127.2		105.0		44.9
Net earnings	$	84.3	$	72.6	$	45.2

On March 2, 2021, Jacobs completed the strategic investment of a 65% interest in PA Consulting, a UK-based leading innovation and transformation consulting firm. The remaining 35% interest is held by PA Consulting employees. PA Consulting is accounted for as a consolidated subsidiary under U.S. GAAP accounting rules. See Note 14- PA Consulting Business Combination for more discussion on the acquisition.

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 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 $115.1 million and $129.5 million as of October 1, 2021, respectively and $64.1 million and $63.0 million as of October 2, 2020, 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 1, 2021, the Company’s equity method investments exceeded its share of venture net assets by $36.8 million. Our investments in equity method joint ventures on the Consolidated Balance Sheets as of October 1, 2021 and October 2, 2020 were a net asset of $121.3 million and $161.3 million, respectively. During the years ended October 1, 2021, October 2, 2020, and September 27, 2019, we recognized income from equity method joint ventures of $60.9 million, $82.2 million, and $48.5 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):


	October 1, 2021		October 2, 2020
Current assets	$	937.9	$	1,697.0
Non-Current assets	42.0		34.9
Total assets	$	979.9	$	1,731.9
Current liabilities	$	769.2	$	889.7
Non-current liabilities	33.7		631.0
Total liabilities	802.9		1,520.7
Joint ventures' equity	177.0		211.2
Total liabilities & joint venture equity	$	979.9	$	1,731.9


	For the Years Ended
	October 1, 2021		October 2, 2020		September 27, 2019
Revenue	$	3,299.9	$	3,447.0	$	3,533.1
Direct cost of contracts	(3,014.2)		(3,126.6)		(3,176.2)
Gross profit	$	285.7	$	320.4	$	356.9
Net earnings	$	207.5	$	245.3	$	227.0

Accounts receivable from unconsolidated joint ventures accounted for under the equity method is $19.7 million and $8.3 million as of October 1, 2021 and October 2, 2020, respectively.

The Company currently holds a 24.5% interest in AWE Management Ltd ("AWE") 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 was under a contractual operating arrangement with the UK Ministry of Defence (MoD) with multiple years remaining under the arrangement. On November 2, 2020, the MoD unexpectedly announced plans to change its current operating agreements with AWE that would result in the early termination of the current contract in 2021. During the fiscal year ended October 1, 2021, the Company recorded other-than-temporary impairment charges on its investment in AWE in the amount of $38.5 million, which were included in miscellaneous income (expense), net in the consolidated statement of earnings.

At October 2, 2020, the Company held a cost method investment in C3.ai, Inc. ("C3") of approximately $2.5 million. On December 9, 2020, C3 completed an initial public offering and as a result the Company carried its investment in C3 at fair value, with mark to market changes reflected in net income as it is an investment in equity securities with a readily determinable fair value based on quoted market prices. During the third fiscal quarter of fiscal 2021 and subsequent to the IPO, the Company sold all shares owned in C3, at a realized pre-tax gain of $49.6 million. Dividend income, unrealized gains and losses on changes in fair value and related realized gains and losses on disposal of the C3 shares have been recognized in miscellaneous income (expense), net in the consolidated statement of earnings.