TETRA TECH INC

Previous wording

Our reputation for high-end consulting and engineering services and our ability to develop solutions for water and environmental management has supported our growth for more than 50 years. Today, we are proud to be making a difference in people’s lives worldwide through our high-end consulting, engineering and technology service offerings. We are working on over 100,000 projects, in more than 100 countries on all seven continents, with a talent force of 30,000 associates. We are Leading with Science® throughout our operations, with domain experts across multiple disciplines supported by our advanced analytics, artificial intelligence, machine learning and digital technology solutions. Our ability to provide innovative and first-of-kind solutions is enhanced by partnerships with our forward-thinking clients. We embrace the breadth of experience across our talented workforce worldwide with a culture of innovation and entrepreneurship. We are disciplined in our business, and focused on delivering value to customers and high performance for our shareholders. In supporting our clients, we seek to add value and provide long-term sustainable consulting, engineering and technology solutions.

Current wording

Our reputation for high-end consulting and engineering services and our ability to develop solutions for water and environmental management has supported our growth for nearly 60 years. Our market leading climate mitigation and adaptation services are solving our clients' most complex challenges related to coastal flooding, water security, energy transition and biodiversity protection. Today, we are proud to be making a difference in people’s lives worldwide through our high-end consulting, engineering and technology service offerings. We are working on over 100,000 projects, in more than 100 countries on all seven continents, with more than 25,000 associates. We are Leading with Science® throughout our operations, with domain experts across multiple disciplines supported by our advanced analytics, artificial intelligence, machine learning and digital technology solutions. Our ability to provide innovative and first-of-kind solutions is enhanced by partnerships with our forward-thinking clients. We embrace the breadth of experience across our talented workforce worldwide with a culture of innovation and entrepreneurship. We are disciplined in our business, and focused on delivering value to customers and high performance for our shareholders. In supporting our clients, we seek to add value and provide long-term sustainable consulting, engineering and technology solutions.

Previous wording

Government Services Group (“GSG”). GSG provides high-end consulting and engineering services primarily to U.S. government clients (federal, state and local) and international development agencies worldwide. GSG supports U.S. government civilian and defense agencies with services in water, environment, sustainable infrastructure, information technology and disaster management. GSG also provides engineering design services for U.S. based federal and municipal clients, especially in water infrastructure, flood protection and solid waste. GSG also leads our support for development agencies worldwide, especially in the United States, United Kingdom and Australia.

Current wording

Government Services Group (“GSG”). GSG provides high-end consulting and engineering services primarily to U.S. government clients (federal, state and local). GSG supports U.S. government defense and civilian agencies with services in water, environment, sustainable infrastructure, information technology and disaster management. GSG also provides engineering design services for U.S. based federal and municipal clients, especially in water infrastructure, flood protection and solid waste.

Previous wording

Commercial/International Services Group (“CIG”). CIG primarily provides high-end consulting and engineering services to U.S. commercial clients, and international clients inclusive of the commercial and government sectors. CIG supports commercial clients worldwide in energy, industrial, high performance buildings and aerospace markets. CIG also provides sustainable infrastructure and related environmental, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), Europe, the United Kingdom and South America (primarily Brazil).

Current wording

Commercial/International Services Group (“CIG”). CIG primarily provides high-end consulting and engineering services to U.S. commercial clients, and international clients inclusive of the commercial and government sectors. CIG supports commercial clients worldwide in energy, industrial and high performance buildings markets. CIG also provides sustainable infrastructure and related environmental, engineering and project management services to commercial and local government clients across Canada, in Asia Pacific (primarily Australia and New Zealand), Europe, the United Kingdom and Brazil.

Previous wording

Divestitures. We regularly review and evaluate our existing operations to determine whether our business model should change through the divestiture of certain businesses. Accordingly, from time to time, we may divest or wind down certain non-core businesses and reallocate our resources to businesses that better align with our long-term strategic direction. In the first quarter of fiscal 2025, we divested a subsidiary in South America and a line of business in Australia, both of which were immaterial.

Current wording

Divestitures. We regularly review and evaluate our existing operations to determine whether our business model should change through the divestiture of certain businesses. Accordingly, from time to time, we may divest or wind down certain non-core businesses and reallocate our resources to businesses that better align with our long-term strategic direction. In the first quarter of fiscal 2026, we divested our operations in Norway, which were in our CIG segment. We received proceeds of $41.6 million and recognized a non-operating gain of $7.7 million in our consolidated statements of income. In the first quarter of fiscal 2025, we divested a subsidiary in South America and a line of business in Australia, both of which were immaterial.

Previous wording

For detailed information regarding acquisitions, see Note 4, “Acquisitions” of the “Notes to Consolidated Financial Statements”.

Current wording

For detailed information regarding acquisitions, see Note 4, “Acquisitions and Divestitures” of the “Notes to Consolidated Financial Statements”.

Previous wording

General. For the first nine months of fiscal 2025, our 7.5% revenue growth was primarily due to increased activity in the U.S. state and local and U.S. federal government client sectors. The overall growth includes $39 million from our recent acquisitions, that did not have comparable revenue for the same period last year. Excluding the impact of these acquisitions, our revenue increased 6.6% compared to the first nine months of fiscal 2024.

Current wording

General. For the first quarter of fiscal 2026, our revenue declined 14.8% compared to the prior-year quarter primarily due to fewer international development projects in our U.S. federal government client sector and lower disaster response activity in our U.S. state and local government client sector. Our revenue in the first quarter of fiscal 2026 includes approximately $40 million from our recent acquisitions, that did not have comparable revenue for the same quarter last year.

Previous wording

On January 20, 2025, President Trump signed Executive Order 14169, titled "Reevaluating and Realigning United States Foreign Aid", which initiated a 90-day pause on all U.S. foreign development assistance programs to assess their alignment with U.S. foreign policy objectives with few exemptions. Following a six-week review, on February 27, 2025, U.S. Secretary of State Rubio announced the cancellation of 83% of United States Agency for International Development ("USAID") programs, totaling approximately 5,200 contracts. Subsequently, we were notified that virtually all of our contracts with USAID were terminated for convenience with immediate effect. For the first nine months of fiscal 2025, our U.S. federal government revenue included $499.1 million from USAID programs compared to $499.8 million for the same period last year. Although our USAID revenue was flat for the first nine months year-over-year, essentially all of our revenue in the third quarter, which totaled $89.9 million, was for wind-down activities that are nearing completion. As a result, we expect our USAID revenue to be significantly lower in the fourth quarter of fiscal 2025, both sequentially and compared to the prior-year fourth quarter. Excluding USAID, we expect our U.S. federal revenue to grow for the remainder of fiscal 2025.

Current wording

Our U.S. federal government revenue decline of 45.7% was primarily due to decreased international development activity in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. On January 20, 2025, President Trump signed Executive Order 14169, titled "Reevaluating and Realigning United States Foreign Aid", which initiated a 90-day pause on all U.S. foreign development assistance programs to assess their alignment with U.S. foreign policy objectives with few exemptions. Following a six-week review, on February 27, 2025, U.S. Secretary of State Rubio announced the cancellation of 83% of United States Agency for International Development ("USAID") programs, totaling approximately 5,200 contracts. Subsequently, we were notified that virtually all of our contracts with USAID were terminated for convenience with immediate effect and that any remaining international development activity would be administered by the U.S. Department of State ("DOS"). In the first quarter of fiscal 2026, our U.S. federal government revenue included $56.4 million from USAID/DOS programs compared to $283.9 million in the first quarter of last year. We currently expect no significant USAID/DOS revenue in the remainder of fiscal 2026. However, we do expect our U.S. federal revenue to grow for the remainder of this fiscal year, excluding USAID/DOS activities.

Previous wording

Our U.S. state and local government revenue grew 34.8% compared to the first nine months of fiscal 2024 due to increased disaster response activity primarily related to Hurricanes Helene and Milton. Excluding this disaster response work, our U.S. state and local government revenue increased 15.3% in the first nine months of fiscal 2025 compared to fiscal 2024 first nine months; the growth was due to continued investment by our clients in clean drinking water. Most of our work for the U.S. state and local governments relates to critical water and environmental programs, which we expect to continue to grow for the remainder of fiscal 2025.

Current wording

Our U.S. state and local government revenue declined 15.5% compared to the fiscal 2025 quarter due to decreased disaster response activity primarily related to Hurricanes Helene and Milton, which occurred in September and October of 2024, respectively. Excluding this disaster response work, our U.S. state and local government revenue increased 10.3% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. This growth was due to continued investment by our clients in municipal water infrastructure, including digital water automation. Most of our work for the U.S. state and local governments relates to critical water and environmental programs, which we expect to continue to grow in the remainder of fiscal 2026.

Previous wording

Our U.S. commercial revenue growth of 0.1% in the first nine months of fiscal 2025 was primarily due to increased activity for environmental services, offset by reduced revenue related to renewable energy. We expect our U.S. commercial business revenue, excluding renewable energy, to be relatively stable for the remainder of fiscal 2025.

Current wording

Our U.S. commercial revenue declined 3.5% in the first quarter of fiscal 2026 primarily due to lower activity related to renewable energy, partially offset by increased power transmission services compared to the first quarter of fiscal 2025. We expect our U.S. commercial revenue, excluding renewable energy, to begin showing growth in the second half of fiscal 2026.

Previous wording

For the first nine months of fiscal 2025, our international revenue decreased 0.9% primarily due to lower infrastructure work in Australia, partially offset by increased water planning and design activities in the United Kingdom. We expect the growth in our international work, excluding Australia, to continue for the remainder of fiscal 2025.

Current wording

For the first quarter of fiscal 2026, our international revenue growth of 12.3% reflects increased activities for water utilities including digital water projects, partially offset by decreased infrastructure activities in Australia. Excluding the revenue from fiscal 2025 acquisitions, our international revenue increased 3.5% in the first quarter of fiscal 2026 compared to the fiscal 2025 quarter. We expect the growth in our international work to continue for the remainder of fiscal 2026.

Previous wording

Our revenue growth in the third quarter and first nine months of fiscal 2025 reflects increases primarily in our GSG reportable segment. For the third quarter of fiscal 2025, our GSG segment's revenue and revenue, net of subcontractor costs, increased $32.5 million, or 5.1%, and $32.3 million, or 6.6%, respectively, compared to the same quarter last year. Our CIG segment's revenue decreased $7.9 million, or 1.1%, and revenue, net of subcontractor costs, increased $11.2 million, or 1.8% in the third quarter of fiscal 2025 compared to the prior-year quarter.

Current wording

Our revenue decline in the first quarter of fiscal 2026 primarily reflects decreased revenue in our GSG reportable segment due to the aforementioned reduction in USAID/DOS international development activities. Our GSG segment's revenue and revenue, net of subcontractor costs, declined $265.8 million, or 33.6%, and $215.3 million, or 33.3%, respectively, compared to last year. Our CIG segment's revenue increased $59.3 million, or 9.2%, and revenue, net of subcontractor costs, increased $55.1 million, or 10.0% in the first quarter of fiscal 2026 compared to the first quarter of fiscal 2025. The results for GSG and CIG segments are described below under "Government Services Group" and "Commercial/International Group", respectively.

Previous wording

The following table reconciles our reported results to non-U.S. GAAP adjusted results. For the first nine months of fiscal 2025, our adjusted results exclude a non-cash goodwill impairment charge of $92.4 million related to our GDS reporting unit, which resulted from the aforementioned cancellation of USAID programs in the second quarter of fiscal 2025. This charge is further described in Note 5, "Goodwill and Intangible Assets"of the “Notes to Consolidated Financial Statements”. Our adjusted results also exclude adjustments tocontingent consideration liabilities for the first nine months of fiscal 2025. Additionally, for the first nine months of fiscal 2025, our adjusted results exclude a non-recurring charge of $115.0 million related to legal contingencies as described in Note 17, "Commitments and Contingencies" of the “Notes to Consolidated Financial Statem ents”. We determined that there is no tax benefit for $31.3 million of the legal contingency charge and $58.3 million of the goodwill impairment charge. The effective tax rate applied to the remaining adjustments to arrive at the adjusted earnings per share ("EPS") was 25.0%. We applied the relevant marginal statutory tax rate based on the nature of the adjustment and the tax jurisdiction in which it occurred. Both EPS and adjusted EPS were calculated using the diluted weighted-average common shares outstanding for the respe ctive periods as reflected in our Consolidated Statements of Income.

Current wording

The following table reconciles our reported results to non-GAAP adjusted results. For the first quarter of fiscal 2026, our adjusted results exclude adjustments tocontingent consideration liabilities and the earnings per share ("EPS") contribution from the aforementioned non-operating gain from the sale of our operations in Norway. Additionally, for the first quarter of fiscal 2025, our adjusted results exclude a non-recurring charge of $115.0 million related to legal contingencies as described in Note 16, "Commitments and Contingencies" of the “Notes to Consolidated Financial Statem ents”. We determined that there were no income tax expense for the non-operating gain in the first quarter of fiscal 2026 and no tax benefit for $31.3 million of the legal contingency charge in the first quarter of fiscal 2025. The effective tax rates applied to the remaining adjustments to arrive at the adjusted EPS were 27.5% and 25.0% for the first quarters of fiscal 2026 and 2025, respectively. We applied the relevant marginal statutory tax rate based on the nature of the adjustment and the tax jurisdiction in which it occurred. Both EPS and adjusted EPS were calculated using the diluted weighted-average common shares outstanding for the respe ctive periods as reflected in our Consolidated Statements of Income.

Previous wording

Excluding the non-recurring charges and the earn-out gains, our operating income increased $35.8 million, or 27.7% in the third quarter of fiscal 2025 and $74.3 million, or 20.8%, in the first nine months of fiscal 2025 compared to the same periods last year. The increase reflects improved results in both of our reportable segments, which are described below under "Government Services Group" and "Commercial/International Group", respectively.

Current wording

Excluding the non-recurring charges and the earn-out gains, our operating income declined $3.6 million, or 2.6% in the first quarter of fiscal 2026 compared to last year's quarter. The decrease reflects lower results in our GSG reportable segment, partially offset by improved results in our CIG reportable segment, which are described below under "Government Services Group" and "Commercial/International Group", respectively.

Previous wording

Net interest expense decreased in the third quarter of fiscal 2025 due to higher interest income and lower contingent earn-out interest expense compared to the prior-year period. For the first nine months of fiscal 2025, net interest expense decreased due to lower average interest rates and borrowings compared to the fiscal 2024 period.

Current wording

Net interest expense decreased in the first quarter of fiscal 2026 primarily due to lower average interest rates compared to the prior-year quarter.

Previous wording

The effective tax rates for the first nine months of fiscal 2025 and 2024 were 40.9% and 27.7%, respectively. Income tax expense was reduced by $1.0 million and $2.9 million of excess tax benefits on share-based payments in the first nine months of fiscal 2025 and 2024, respectively. In addition, in the first nine months of fiscal 2025, we recognized a $92.4 million goodwill impairment as described in Note 5, “Goodwill and Intangible Assets” of the “Notes to Consolidated Financial Statements”. We determined that $58.3 million of goodwill impairment is not deductible for income tax purposes. We also recognized a $115.0 million non-recurring charge related to legal contingencies as described in Note 17, "Commitments and Contingencies" of the “Notes to Consolidated Financial Statements”. We determined that $31.3 million of this charge is not tax deductible. Furthermore, income tax expense in the first nine months of fiscal 2024 (all in the second quarter) included $4.3 million of expense for the settlement of various tax positions that were under audit for fiscal years 2018 through 2021. Excluding the impact of the excess tax benefits on share-based payments, the goodwill impairment and the legal contingency charge in the first nine months of fiscal 2025 and the settlement amounts in the first nine months of 2024, our effective tax rates in the first nine months of fiscal 2025 and 2024 were 27.6% and 27.2%, respectively.

Current wording

The effective tax rates for the first quarters of fiscal 2026 and 2025 were 25.7% and 94.9%, respectively. Income tax expense was increased by $0.1 million of excess tax expenses and reduced by $1.0 million of excess tax benefits on share-based payments in the first three months of fiscal 2026 and 2025, respectively. In addition, in the first quarter of fiscal 2026, we recognized a $7.7 million gain from the sale of our operations in Norway as described in Note 4, “Acquisitions and Divestitures” of the “Notes to Consolidated Financial Statements”. The gain is not taxable for income tax purposes. In the first quarter of fiscal 2025, we also recognized a $115.0 million non-recurring charge related to legal contingencies as described in Note 16, "Commitments and Contingencies" of the “Notes to Consolidated Financial Statements”. We determined that $31.3 million of this charge is not tax deductible. Excluding the impact of the excess tax expenses on share-based payments, the gain from sale in the first quarter of fiscal 2026 and the legal contingency charge in the first quarter of fiscal 2025, our effective tax rates in the first three months of fiscal 2026 and 2025 were 27.1% and 27.8%, respectively.

Previous wording

Operating income increased primarily due to the aforementioned revenue growth. Our operating margin, based on revenue, net of subcontractor costs, for the first nine months of fiscal 2025 was 15.0% compared to 14.2% in the first nine months of fiscal 2024. The improved operating margin reflects better project execution including higher labor utilization.

Current wording

Operating income decreased primarily due to the aforementioned revenue decline. However, our operating margin, based on revenue, net of subcontractor costs, increased to 16.5% in the first quarter of fiscal 2026 compared to 14.2% in the prior-year quarter. The increased operating margin reflects improved project execution and the elimination of the lower margin cost-reimbursable revenue with USAID.

Previous wording

Our operating income increased due to the aforementioned revenue growth. Our operating margin, based on revenue, net of subcontractor costs, for the first nine months of fiscal 2025 was 13.8% compared to 13.1% for the fiscal 2024 period. The improved operating margin was primarily due to our continued focus on high-end consulting services and improved project execution.

Current wording

Our operating income increased due to the aforementioned revenue growth. Our operating margin, based on revenue, net of subcontractor costs, improved approximately 40 basis points to 13.0% in the first quarter of 2026 compared to 12.6% for the fiscal 2025 quarter. The improved operating margin was primarily due to our continued focus on high-end consulting services and improved project execution.

Previous wording

Backlog generally represents the dollar amount of revenues we expect to realize in the future when we perform the work. The difference between our remaining unsatisfied performance obligation ("RUPO") and backlog relates to contract terms. Specifically, our backlog does not consider the potential impact of termination for convenience clauses within the contracts. The contract term and thus remaining performance obligation on certain of our operations and maintenance contracts, are limited to the notice period required for contract termination (usually 30, 60, or 90 days). The differences between our backlog and RUPO at June 29, 2025 and September 29, 2024 were immaterial (see the table below):

Current wording

Backlog generally represents the dollar amount of revenue we expect to realize in the future when we perform the work. The difference between our remaining unsatisfied performance obligation ("RUPO") and backlog relates to contract terms. Specifically, our backlog does not consider the potential impact of termination for convenience clauses within the contracts. The contract term and thus remaining performance obligation on certain of our operations and maintenance contracts, are limited to the notice period required for contract termination (usually 30, 60, or 90 days). The differences between our backlog and RUPO at December 28, 2025 and September 28, 2025 were immaterial (see the table below):

Previous wording

Capital Requirements. At June 29, 2025, we had $242.8 million of cash and cash equivalents and access to an additional $999.3 million of borro wings available under our credit facility. During the first nine months of fiscal 2025, we generated $356.8 million of cash from operations. Our primary sources of liquidity are cash flows from operations and borrowings under our credit facilities. Our primary uses of cash are to fund working capital, cash dividends, share repurchases, capital expenditures and repayment of debt, as well as to fund acquisitions and earn-out obligations from prior acquisitions. We believe that our existing cash and cash equivalents, operating cash flows and borrowing capacity under our credit agreement, as described below, will be sufficient to meet our capital requirements for at least the next 12 months.

Current wording

Capital Requirements. At December 28, 2025, we had $269.4 million of cash and cash equivalents and access to an additional $929.3 million of borrowings available under our credit facility. During the first quarter of fiscal 2026, we generated $72.3 million of cash from operations. Our primary sources of liquidity are cash flows from operations and borrowings under our credit facilities. Our primary uses of cash are to fund working capital, cash dividends, share repurchases, capital expenditures and repayment of debt, as well as to fund acquisitions and earn-out obligations from prior acquisitions. We believe that our existing cash and cash equivalents, operating cash flows and borrowing capacity under our credit agreement, as described below, will be sufficient to meet our capital requirements for at least the next 12 months.

Previous wording

On May 5, 2025, we entered into a Fourth Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $1.5 billion that will mature in May 2030. The Amended Credit Agreement is a $1.1 billion senior secured, five-year facility that provides for a $250 million 3-year term loan facility (the “3Y Term Loan Facility”), a $250 million 5-year term loan facility (“the 5Y Term Loan Facility”), and a $600 million revolving credit facility (the “Amended Revolving Credit Facility”). In addition, the Amended Credit Agreement includes a $400 million accordion feature that allows us to increase the Amended Credit Agreement to $1.5 billion subject to lender approval. The 3Y Term Loan Facility will not be subject to any scheduled amortization of principal. The 5Y Term Loan Facility will be subject to quarterly amortization of principal, based upon the annual percentages of the original stated amount thereof (Year 1: 0.0%, Year 2: 0.0%, Year 3: 5.0%, Year 4: 10.0%, Year 5: 10.0%), with the first payment being due at the end of the first full fiscal quarter following the second anniversary of the Amendment Effective Date. The Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Third Amended Credit Agreement; (ii) finance open market repurchases of common stock, acquisitions, and cash dividends and distributions; and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes. The Amended Credit Agreement provides for a reduction in the pricing levels of the Consolidated Leverage Ratio and the removal of the Secured Overnight Financing Rate ("SOFR") credit spread adjustment. The Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans, and a $400 million sublimit for multicurrency borrowings and letters of credit.

Current wording

On May 5, 2025, we entered into a Fourth Amended and Restated Credit Agreement (“Amended Credit Agreement”) with a total borrowing capacity of $1.5 billion that will mature in May 2030. The Amended Credit Agreement is a $1.1 billion senior secured, five-year facility that provides for a $250 million 3-year term loan facility (the “3Y Term Loan Facility”), a $250 million 5-year term loan facility (“the 5Y Term Loan Facility”), and a $600 million revolving credit facility (the “Amended Revolving Credit Facility”). In addition, the Amended Credit Agreement includes a $400 million accordion feature that allows us to increase the Amended Credit Agreement to $1.5 billion subject to lender approval. The 5Y Term Loan Facility will be subject to quarterly amortization of principal, based upon the annual percentages of the original stated amount thereof (Year 1: 0.0%, Year 2: 0.0%, Year 3: 5.0%, Year 4: 10.0%, Year 5: 10.0%), with the first payment being due at the end of the first full fiscal quarter following the second anniversary of the Amendment Effective Date. The Amended Credit Agreement provides for, among other things, (i) refinance indebtedness under our Third Amended Credit Agreement; (ii) finance open market repurchases of common stock, acquisitions, and cash dividends and distributions; and (iii) utilize the proceeds for working capital, capital expenditures and other general corporate purposes. The Amended Credit Agreement provides for a reduction in the pricing levels of the Consolidated Leverage Ratio and the removal of the Secured Overnight Financing Rate ("SOFR") credit spread adjustment. The Amended Revolving Credit Facility includes a $100 million sublimit for the issuance of standby letters of credit, a $20 million sublimit for swingline loans, and a $400 million sublimit for multi-currency borrowings and letters of credit.

Previous wording

The entire 3Y Term Loan Facility and 5Y Term Loan Facility were drawn on May 5, 2025. The proceeds from these term loans were used to pay down our Third Term Loan Facility and the Second Revolving Credit Facility in full on May 5, 2025. We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.750% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%, plus a margin that ranges from 0% to 0.75% per annum). In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The 5Y Term Loan Facility is subject to the same interest rate provisions. The 3Y Term Loan Facility is subject to a benchmark rate plus a margin that ranges from 0.875% to 1.625% per annum. The Amended Credit Agreement expires on May 5, 2030, or earlier at our discretion upon payment in full of loans and other obligations.

Current wording

The entire 3Y Term Loan Facility and 5Y Term Loan Facility were drawn on May 5, 2025. The proceeds from these term loans were used to pay down our Third Term Loan Facility and the Second Revolving Credit Facility in full on May 5, 2025. On September 26, 2025, the 3Y Term Loan Facility was repaid in full. We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.750% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%, plus a margin that ranges from 0% to 0.75% per annum). In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The 5Y Term Loan Facility is subject to the same interest rate provisions. The Amended Credit Agreement expires on May 5, 2030, or earlier at our discretion upon payment in full of loans and other obligations.

Previous wording

At June 29, 2025, we had $300 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $100 million under the 3Y Term Loan Facility, $200 million under the 5Y Term Loan Facility and no borrowings under the Amended Revolving Credit Facility. For the first nine months of fiscal 2025, the weighted-average interest rate of the outstanding borrowings under the credit facilities was 5.66%. In addition, we had $0.7 million in standby letters of credit under the Amended Credit Agreement. At June 29, 2025, we had $599.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants.

Current wording

At December 28, 2025, we had $270 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $200 million under the 5Y Term Loan Facility and $70 million borrowings under the Amended Revolving Credit Facility. For the first quarter of fiscal 2026, the weighted-average interest rate of the outstanding borrowings under the credit facilities was 5.25%. In addition, we had $0.7 million in standby letters of credit under the Amended Credit Agreement. At December 28, 2025, we had $529.3 million of available credit under the Amended Revolving Credit Facility, all of which could be borrowed without a violation of our debt covenants.

Previous wording

The Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default. The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.50 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement). Our obligations under the Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers under the Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans, and those of our subsidiaries that are guarantors or borrowers. At June 29, 2025, we were in compliance with these covenants with a consolidated leverage ratio of 1.31x and a consolidated interest coverage ratio of 16.67x.

Current wording

The Amended Credit Agreement contains certain affirmative and restrictive covenants, and customary events of default. The financial covenants provide for a maximum Consolidated Leverage Ratio of 3.50 to 1.00 (total funded debt/EBITDA, as defined in the Amended Credit Agreement) and a minimum Consolidated Interest Coverage Ratio of 3.00 to 1.00 (EBITDA/Consolidated Interest Charges, as defined in the Amended Credit Agreement). Our obligations under the Amended Credit Agreement are guaranteed by certain of our domestic subsidiaries and are secured by first priority liens on (i) the equity interests of certain of our subsidiaries, including those subsidiaries that are guarantors or borrowers under the Amended Credit Agreement, and (ii) the accounts receivable, general intangibles and intercompany loans, and those of our subsidiaries that are guarantors or borrowers. At December 28, 2025, we were in compliance with these covenants with a consolidated leverage ratio of 1.24x and a consolidated interest coverage ratio of 17.31x.

Previous wording

In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for short-term cash advances and bank guarantees. At June 29, 2025, there were no borrowings under these facilities, and the aggregate amount of standby letters of credit outstanding was $43.9 million. At June 29, 2025, we had no bank overdrafts related to our disbursement bank accounts.

Current wording

In addition to the Amended Credit Agreement, we maintain other credit facilities, which may be used for short-term cash advances and bank guarantees. At December 28, 2025, there were no borrowings under these facilities, and the aggregate amount of standby letters of credit outstanding was $55.0 million. At December 28, 2025, we had no bank overdrafts related to our disbursement bank accounts.

Previous wording

Stock repurchases. On May 5, 2025, our Board of Directors authorized an additional $500 million stock repurchase program in addition to the previous $400 million stock repurchase program authorized on October 5, 2021. In the first nine months of fiscal 2025, we repurchased and settled 5,933,085 shares with an average price of $33.71 per share for a total cost of $200.0 million in the open market. We did not repurchase any shares of our common stock in the first nine months of fiscal 2024. At June 29, 2025, we had a remaining balance of $647.8 million under our stock repurchase programs.

Current wording

Stock repurchases. On May 5, 2025, our Board of Directors authorized an additional $500 million stock repurchase program in addition to the previous $400 million stock repurchase program authorized on October 5, 2021. In the first quarter of fiscal 2026, we repurchased and settled 1,482,116 shares with an average price of $33.74 per share for a total cost of $50.0 million in the open market. We repurchased and settled 600,007 shares with an average price of $41.67 per share for a total cost of $25.0 million in the open market in the first quarter of fiscal 2025. At December 28, 2025, we had a remaining balance of $547.8 million under our stock repurchase programs.

Previous wording

We evaluate the realizability of our deferred tax assets by assessing the valuation allowance and adjust the allowance, if necessary. The factors used to assess the likelihood of realization are our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The ability or failure to achieve the forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets. Based on future operating results in certain jurisdictions, it is unlikely that the current valuation allowance positions of those jurisdictions could be adjusted in the next 12 months.

Current wording

We evaluate the realizability of our deferred tax assets by assessing the valuation allowance and adjusting the allowance, if necessary. The factors used to assess the likelihood of realization are our forecast of future taxable income and available tax planning strategies that could be implemented to realize the net deferred tax assets. The ability or failure to achieve the forecasted taxable income in the applicable taxing jurisdictions could affect the ultimate realization of deferred tax assets. Based on future operating results in certain jurisdictions, it is unlikely that the current valuation allowance positions of those jurisdictions could be adjusted in the next 12 months.

Previous wording

At June 29, 2025 and September 29, 2024, the liability for income taxes associated with uncertain tax positions was $52.3 million and $50.1 million, respectively.

Current wording

At December 28, 2025 and September 28, 2025, the liability for income taxes associated with uncertain tax positions was $53.8 million and $52.8 million, respectively.

Previous wording

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions may not significantly decrease within the next 12 months. These liabilities represent our current estimates of the additional tax liabilities that we may be assessed when the related audits are concluded. If these audits are resolved in a manner more unfavorable than our current expectations, our additional tax liabilities could be materially higher than the amounts currently recorded resulting in additional tax expense.

Current wording

It is reasonably possible that the amount of the unrecognized benefit with respect to certain of our unrecognized tax positions may significantly decrease within the next 12 months. These liabilities represent our current estimates of the additional tax liabilities that we may be assessed when the related audits are concluded. If these audits are resolved in a manner more unfavorable than our current expectations, our additional tax liabilities could be materially higher than the amounts currently recorded resulting in additional tax expense.

Previous wording

•Letters of credit and bank guarantees are used prim arily to support project performance and insurance programs. We are required to reimburse the issuers of letters of credit and bank guarantees for any payments they make under the outstanding letters of credit or bank guarantees. Our Amended Credit Agreement and additional letter of credit facilities cover the issuance of our standby letters of credit and bank guarantees and are critical for our normal operations. If we default on the Amended Credit Agreement or additional credit facilities, our inability to issue or renew standby letters of credit and bank guarantees would impair our ability to maintain normal operations. At June 29, 2025, we had $0.7 million in standby letters of credit outstanding under our Amended Credit Agreement and $43.9 million in standby letters of credit outstanding under our additional letter of credit facilities.

Current wording

•Letters of credit and bank guarantees are used prim arily to support project performance and insurance programs. We are required to reimburse the issuers of letters of credit and bank guarantees for any payments they make under the outstanding letters of credit or bank guarantees. Our Amended Credit Agreement and additional letter of credit facilities cover the issuance of our standby letters of credit and bank guarantees and are critical for our normal operations. If we default on the Amended Credit Agreement or additional credit facilities, our inability to issue or renew standby letters of credit and bank guarantees would impair our ability to maintain normal operations. At December 28, 2025, we had $0.7 million in standby letters of credit outstanding under our Amended Credit Agreement and $55.0 million in standby letters of credit outstanding under our additional letter of credit facilities.

Previous wording

Our critical accounting policies are disclosed in our Annual Report on Form 10-K for the fiscal year ended September 29, 2024. To date, there have been no material changes in our critical accounting policies as reported in our fiscal

Current wording

Our critical accounting policies are disclosed in our Annual Report on Form 10-K for the fiscal year ended September 28, 2025. To date, there have been no material changes in our critical accounting policies as reported in our fiscal 2025 Annual Report on Form 10-K.

Previous wording

We are exposed to interest rate risk under our Amended Credit Agreement. We can borrow, at our option, under the 3Y Term Loan Facility, 5Y Term Loan Facility and Amended Revolving Credit Facility. We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.750% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%, plus a margin that ranges from 0% to 0.75% per annum). In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The 5Y Term Loan Facility is subject to the same interest rate provisions. The 3Y Term Loan Facility is subject to a benchmark rate plus a margin that ranges from 0.875% to 1.625% per annum. The Amended Credit Agreement expires on May 5, 2030, or earlier at our discretion upon payment in full of loans and other obligations. At June 29, 2025, we had $300 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $100 million under the 3Y Term Loan Facility, $200 million under the 5Y Term Loan Facility and no borrowings under the Amended Revolving Credit Facility. For the first nine months of fiscal 2025, the weighted-average interest rate of the outstanding borrowings under the Amended Credit Agreement was 5.66%.

Current wording

We are exposed to interest rate risk under our Amended Credit Agreement. We can borrow, at our option, under the 5Y Term Loan Facility and Amended Revolving Credit Facility. We may borrow on the Amended Revolving Credit Facility, at our option, at either (a) a benchmark rate plus a margin that ranges from 1.000% to 1.750% per annum, or (b) a base rate for loans in U.S. dollars (the highest of the U.S. federal funds rate plus 0.50% per annum, the bank’s prime rate or the SOFR rate plus 1.00%, plus a margin that ranges from 0% to 0.75% per annum). In each case, the applicable margin is based on our Consolidated Leverage Ratio, calculated quarterly. The 5Y Term Loan Facility is subject to the same interest rate provisions. The Amended Credit Agreement expires on May 5, 2030, or earlier at our discretion upon payment in full of loans and other obligations. At December 28, 2025, we had $270 million in outstanding borrowings under the Amended Credit Agreement, which consisted of $200 million under the 5Y Term Loan Facility and $70 million borrowings under the Amended Revolving Credit Facility. For the first quarter of fiscal 2026, the weighted-average interest rate of the outstanding borrowings under the Amended Credit Agreement was 5.25%.

Previous wording

The majority of our transactions are in U.S. dollars; however, some of our subsidiaries conduct business in foreign currencies, primarily the Canadian and Australian dollars, the Euro, and British Pound. Therefore, we are subject to currency exposure and volatility because of currency fluctuations. We attempt to minimize our exposure to these fluctuations by matching revenue and expenses in the same currency for our contracts. We report our foreign currency gains and losses in “Selling, general and administrative expenses” on our consolidated statements of income. For the first nine months of fiscal 2025, we reported $2.3 million of foreign currency loss compared to a loss of $1.0 million in the prior year period.

Current wording

The majority of our transactions are in U.S. dollars; however, some of our subsidiaries conduct business in foreign currencies, primarily the Canadian and Australian dollars, the Euro, and British Pound. Therefore, we are subject to currency exposure and volatility because of currency fluctuations. We attempt to minimize our exposure to these fluctuations by matching revenue and expenses in the same currency for our contracts. We report our foreign currency gains and losses in “Selling, general and administrative expenses” on our consolidated statements of income. For the first quarter of fiscal 2026, we reported $1.2 million of foreign currency loss compared to an immaterial amount in the prior year period.

Previous wording

We have foreign currency exchange rate exposure in our results of operations and equity primarily because of the currency translation related to our foreign subsidiaries where the local currency is the functional currency. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions will result in reduced revenue, operating expenses, assets and liabilities. Similarly, our revenue, operating expenses, assets and liabilities will increase if the U.S. dollar weakens against foreign currencies. For the first nine months of fiscal 2025 and 2024, 36.0% and 39.0% of our consolidated revenue, respectively, was generated by our international business. For the first nine months of fiscal 2025, the effect of foreign exchange rate translation on our consolidated balance sheet was an increase in equity of $13.8 million compared to an increase of $40.6 million in the prior-year period. These amounts were recognized as adjustments to equity through other comprehensive income.

Current wording

We have foreign currency exchange rate exposure in our results of operations and equity primarily because of the currency translation related to our foreign subsidiaries where the local currency is the functional currency. To the extent the U.S. dollar strengthens against foreign currencies, the translation of these foreign currency denominated transactions will result in reduced revenue, operating expenses, assets and liabilities. Similarly, our revenue, operating expenses, assets and liabilities will increase if the U.S. dollar weakens against foreign currencies. For the first quarters of fiscal 2026 and 2025, 44.7% and 33.9% of our consolidated revenue, respectively, was generated by our international business. For the first quarter of fiscal 2026, the effect of foreign exchange rate translation on our consolidated balance sheet was an increase in equity of $19.7 million compared to a decrease of $108.8 million in the prior-year period. These amounts were recognized as adjustments to equity through other comprehensive income.