Organizational Transformation and Financial Outlook
Non-GAAP Financial Measures (cont'd)
Adjusted net income, adjusted operating profit and adjusted operating profit margin are non-GAAP financial measures that are calculated by (i)
excluding the costs related to the 2015 restructuring activities, which included involuntary terminations, the abandonment of certain leased offices,
combining operational organizations and the co-location of employees into other existing offices; and charges associated with our Europe, U.K. and
Middle East region, which included write-offs on contract accounts receivable and charges for statutory redundancy and severance costs (collectively,
the "2015 Restructuring and other items"); (ii) excluding costs and other charges associated with restructuring activities implemented in connection
with the CH2M acquisition, which include involuntary terminations, costs associated with co-locating Jacobs and CH2M offices, costs and expenses of
the Integration Management Office, including professional services and personnel costs, costs and charges associated with the divestiture of joint
venture interests to resolve potential conflicts arising from the CH2M acquisition, expenses relating to certain commitments and contingencies relating
to discontinued operations of the CH2M business, and similar costs and expenses (collectively referred to as the "CH2M Restructuring and other
charges"); (iii) excluding transaction costs and other charges incurred in connection with closing of the CH2M acquisition, including advisor fees,
change in control payments, costs and expenses relating to the registration and listing of Jacobs stock issued in connection with the acquisition, and
similar transaction costs and expenses (collectively referred to as "CH2M transaction costs"); (iv) excluding charges resulting from the revaluation of
certain deferred tax assets/liabilities in connection with U.S. tax reform; (v) reducing for depreciation relating to the ECR business of the Company
that was ceased as a result of the application of held for sale accounting; (vi) excluding transaction costs and expenses incurred in connection with
the pending sale of the ECR business of the Company; and (vii) adding back amortization of intangibles acquired. Adjusted EPS outlook for fiscal
year 2019 is calculated by excluding (i) interest expense for the indebtedness of the Company to be repaid with the cash proceeds of the ECR
divestiture, (ii) interest income associated with the cash proceeds to be used to repay such indebtedness, and (iii) stranded costs not otherwise
included in discontinued operations that will be assumed by WorleyParsons in connection with the ECR divestiture or otherwise eliminated at the
closing of the transaction, in addition to the adjustments noted above. Adjustments to derive adjusted net income and adjusted EPS are calculated on
an after-tax basis. Adjusted EBITDA is calculated in accordance with the Company's existing credit facilities. Net revenue is calculated by excluding
pass-through revenues of the BIAF line of business.
We believe that these non-GAAP financial measures are useful to management, investors and other users of our financial information in evaluating
the Company's operating results and outlook, and understanding the Company's operating trends by excluding or adding back the effects of the items
described above, the inclusion or exclusion of which can obscure underlying trends. Additionally, management uses these measures in its own
evaluation of the Company's performance, particularly when comparing performance to past periods, and believes these measures are useful for
investors because they facilitate a comparison of our financial results from period to period.
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