Edgar Filing: JACOBS ENGINEERING GROUP INC /DE/

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Form 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Quarterly Report on

FORM 10-Q

(Mark one)


x		Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

		For the quarterly period ended April 2, 2010

¨		Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

		For the transition period from to

Commission File Number 1-7463

JACOBS ENGINEERING GROUP INC.

(Exact name of Registrant as specified in its charter)


Delaware (State of incorporation)		95-4081636 (I.R.S. employer identification number)

1111 South Arroyo Parkway, Pasadena, California (Address of principal executive offices)		91105 (Zip code)

(626) 578 – 3500

(Registrant’s telephone number, including area code)

Indicate by check-mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days: x Yes ¨ No

Indicate by check-mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). x Yes ¨ No

Indicate by check-mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check-mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ¨ Yes x No

Number of shares of common stock outstanding at April 22, 2010: 125,018,964

JACOBS ENGINEERING GROUP INC.

INDEX TO FORM 10-Q


			Page No.
PART I	FINANCIAL INFORMATION

	Item 1.	Financial Statements

		Consolidated Balance Sheets – April 2, 2010 (Unaudited) and October 2, 2009	3

		Consolidated Statements of Earnings - Unaudited Three and Six Months Ended April 2, 2010 and April 3, 2009	4

		Consolidated Statements of Comprehensive Income – Unaudited Three and Six Months Ended April 2, 2010 and April 3, 2009	5

		Consolidated Statements of Cash Flows – Unaudited Six Months Ended April 2, 2010 and April 3, 2009	6

		Notes to Consolidated Financial Statements – Unaudited	7 – 13

	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14 – 20

	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21

	Item 4.	Controls and Procedures	21

PART II	OTHER INFORMATION

	Item 1.	Legal Proceedings	22

	Item 1A.	Risk Factors	23

	Item 5.	Other Information	24

	Item 6.	Exhibits	25

SIGNATURES			26

Part I – FINANCIAL INFORMATION

Item 1.

Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share information)


	April 2, 2010 (Unaudited)			October 2, 2009
ASSETS
Current Assets:
Cash and cash equivalents	$	839,057		$	1,033,619
Receivables		1,698,774			1,618,561
Deferred income taxes		128,444			117,066
Prepaid expenses and other		44,055			49,203

Total current assets		2,710,330			2,818,449

Property, Equipment and Improvements, Net		223,776			240,350

Other Noncurrent Assets:
Goodwill		1,125,591			929,842
Miscellaneous		591,125			439,973

Total other non-current assets		1,716,716			1,369,815

	$	4,650,822		$	4,428,614

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable	$	95,579		$	17,495
Accounts payable		316,308			340,651
Accrued liabilities		695,803			679,109
Billings in excess of costs		237,685			252,149
Income taxes payable		7,331			6,497

Total current liabilities		1,352,706			1,295,901

Long-term Debt		561			737

Other Deferred Liabilities		485,268			500,501

Commitments and Contingencies
Stockholders’ Equity:
Capital stock:
Preferred stock, $1 par value, authorized—1,000,000 shares; issued and outstanding—none		—			—
Common stock, $1 par value, authorized—240,000,000 shares; issued and outstanding—124,904,879 shares and 124,229,933 shares, respectively		124,905			124,230
Additional paid-in capital		735,202			703,860
Retained earnings		2,156,895			2,009,338
Accumulated other comprehensive loss		(210,308	)		(211,515	)

Total Jacobs stockholders’ equity		2,806,694			2,625,913
Noncontrolling interests		5,593			5,562

Total Group stockholders’ equity		2,812,287			2,631,475

	$	4,650,822		$	4,428,614

See the accompanying Notes to Consolidated Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

For the Three and Six Months Ended April 2, 2010 and April 3, 2009

(In thousands, except per share information)


	For the Three Months Ended						For the Six Months Ended
	April 2, 2010			April 3, 2009			April 2, 2010			April 3, 2009
Revenues	$	2,586,974		$	2,975,452		$	5,064,759		$	6,208,105
Costs and Expenses:
Direct cost of contracts		(2,223,793	)		(2,571,828	)		(4,352,369	)		(5,367,062	)
Selling, general and administrative expenses		(241,177	)		(232,936	)		(476,905	)		(489,287	)

Operating Profit		122,004			170,688			235,485			351,756

Other Income (Expense):
Interest income		796			2,589			1,634			7,191
Interest expense		(705	)		(797	)		(1,317	)		(2,026	)
Miscellaneous expense, net		(935	)		(1,853	)		(1,494	)		(4,712	)
Total other income (expense), net		(844	)		(61	)		(1,177	)		453

Earnings Before Taxes		121,160			170,627			234,308			352,209

Income Tax Expense		(43,593	)		(61,457	)		(84,340	)		(126,922	)

Net Earnings of the Group		77,567			109,170			149,968			225,287

Net (Income) Loss Attributable to Noncontrolling Interests		(67	)		117			(31	)		350

Net Earnings Attributable to Jacobs	$	77,500		$	109,287		$	149,937		$	225,637


Net Earnings Per Share:
Basic	$	0.63		$	0.89		$	1.21		$	1.84
Diluted	$	0.62		$	0.88		$	1.20		$	1.82

See the accompanying Notes to Consolidated Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three and Six Months Ended April 2, 2010 and April 3, 2009

(In thousands)

(Unaudited)


	For the Three Months Ended						For the Six Months Ended
	April 2, 2010			April 3, 2009			April 2, 2010			April 3, 2009
Net Earnings of the Group	$	77,567		$	109,170		$	149,968		$	225,287

Other Comprehensive Income (Loss):
Foreign currency translation adjustment		(12,256	)		(7,387	)		(6,307	)		(49,328	)
Gain (loss) on cash flow hedges		(498	)		4,878			876			(9,103	)
Change in pension liability		11,571			(231	)		9,428			24,304
Other comprehensive income (loss) before taxes		(1,183	)		(2,740	)		3,997			(34,127	)
Income tax benefit (expense)		(2,918	)		(1,569	)		(2,790	)		5,389
Net other comprehensive income (loss)		(4,101	)		(4,309	)		1,207			(28,738	)

Net Comprehensive Income of the Group		73,466			104,861			151,175			196,549

Net Comprehensive (Income) Loss Attributable to Noncontrolling Interests		(67	)		117			(31	)		350

Net Comprehensive Income Attributable to Jacobs	$	73,399		$	104,978		$	151,144		$	196,899

See the accompanying Notes to Consolidated Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended April 2, 2010 and April 3, 2009

(In thousands)

(Unaudited)


	2010			2009
Cash Flows from Operating Activities:
Net earnings	$	149,937		$	225,637
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization:
Property, equipment and improvements		33,265			33,170
Intangible assets		11,576			4,234
Gain from investments		—			(1,249	)
Stock based compensation		11,585			11,621
Excess tax benefits from stock based compensation		(1,477	)		(2,048	)
Losses on sales of assets, net		11			93
Changes in certain assets and liabilities, excluding the effects of businesses acquired:
Receivables		(53,874	)		103,298
Prepaid expenses and other current assets		6,142			2,511
Accounts payable		(33,211	)		(83,286	)
Accrued liabilities		(2,860	)		(84,331	)
Billings in excess of costs		3,433			18,509
Income taxes payable		(8,768	)		(23,082	)
Deferred income taxes		1,017			(3,947	)
Other, net		391			—

Net cash provided by operating activities		117,167			201,130

Cash Flows from Investing Activities:
Additions to property and equipment		(23,372	)		(36,309	)
Disposals of property and equipment		12,179			1,641
Changes in investments, net		(121,720	)		(4,959	)
Acquisitions of businesses, net of cash acquired		(261,850	)		(1,033	)
Changes in other non-current assets, net		(11,296	)		23,514

Net cash used for investing activities		(406,059	)		(17,146	)

Cash Flows from Financing Activities:
Repayments of long-term borrowings		(150	)		(18,985	)
Net change in short-term borrowings		79,218			235
Proceeds from issuances of common stock		18,062			22,156
Excess tax benefits from stock based compensation		1,477			2,048
Changes in other deferred liabilities, net		(5,847	)		(5,775	)

Net cash provided by (used for) financing activities		92,760			(321	)

Effect of Exchange Rate Changes		1,570			(15,431	)

Net Increase (Decrease) in Cash and Cash Equivalents		(194,562	)		168,232
Cash and Cash Equivalents at the Beginning of the Period		1,033,619			604,420

Cash and Cash Equivalents at the End of the Period	$	839,057		$	772,652

See the accompanying Notes to Consolidated Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

Basis of Presentation

Unless the context otherwise requires:

•

References herein to “Jacobs” are to Jacobs Engineering Group Inc. and its predecessors;

•

References herein to the “Company,” “we,” “us” or “our” are to Jacobs Engineering Group Inc. and its consolidated subsidiaries; and

•

References herein to the “Group” are to the combined economic interests and activities of the Company and the persons and entities holding noncontrolling interests in our consolidated subsidiaries.

The accompanying consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form 10-Q. Consequently, certain information and note disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States have been condensed or omitted. Readers of this report should also read our consolidated financial statements and the notes thereto included in our Annual Report on Form 10-K for the fiscal year ended October 2, 2009 (“2009 Form 10-K”) as well as Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations also included in our 2009 Form 10-K. Readers should also read our report on Form 10-Q for the quarterly period ended January 1, 2010.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of our consolidated financial statements at April 2, 2010 and for the three and six month periods ended April 2, 2010 and April 3, 2009.

The Company has evaluated subsequent events through the date of filing this Form 10-Q with the SEC. No material subsequent events have occurred since April 2, 2010 that required recognition or disclosure in these financial statements.

Our interim results of operations are not necessarily indicative of the results to be expected for the full fiscal year.

New Accounting Standards

In December 2007, the Financial Accounting Standards Board (“FASB”) revised the accounting and reporting for business combinations. These revisions require, among other things, that acquisition-related costs be recognized separately from the costs of acquired businesses; that in a business combination achieved in stages, an acquiree to recognize the identifiable assets, liabilities and noncontrolling interest in the acquiree at the full amounts of their fair values as of the acquisition date; and, that an acquirer recognize assets or liabilities from contingencies as of the acquisition date. The requirement to measure the noncontrolling interests in the acquiree at fair value will result in recognizing the goodwill attributable to the noncontrolling interest in addition to that attributable to the acquirer. These revisions were effective for the Company October 3, 2009.

In December 2007, the FASB revised the accounting and reporting for noncontrolling (formerly known as minority) interests in consolidated financial statements. These revisions clarified that a noncontrolling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The revisions also established that net income attributable to both the parent and the noncontrolling interests be reported in the consolidated statement of earnings, and eliminated the requirement of purchase accounting for a parent’s acquisition of a noncontrolling ownership interest. These revisions were effective for the Company October 3, 2009.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Depending on the size and nature of an acquisition, the changes described above could have a material effect on the Company’s consolidated financial statements.

In June 2009, the FASB revised the accounting for variable interest entities (“VIEs”). These revisions require the Company to perform an analysis to determine whether its variable interests in VIEs give the Company a controlling financial interest in such entities. The Company is also required to assess whether it has the power to direct the activities of its VIEs and if it has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIEs. The revisions adopted by the FASB eliminate the quantitative approach previously required for determining the primary beneficiary of a VIE and significantly enhances disclosures. The new accounting requirements are effective for the Company October 2, 2010. The Company is currently evaluating the impact of this statement on its consolidated financial statements.

Business Combination

On February 16, 2010, the Company acquired Jordan, Jones and Goulding, Inc. (“JJG”), a 500-person professional services firm headquartered in Atlanta, Georgia. Founded in 1958, JJG provides engineering, planning, and consulting services for water, wastewater, environmental and other clients. The results of operations of JJG for the second quarter of fiscal 2010 were not material. The purchase price allocation has not been completed. Included in the Company’s Consolidated Balance Sheet at April 2, 2010 is goodwill of approximately $37.3 million associated with the acquisition of JJG.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Receivables

The following table presents the components of “Receivables” appearing in the accompanying Consolidated Balance Sheets at April 2, 2010 and October 2, 2009 as well as certain other related information (in thousands):


	2010			2009
Components of receivables:
Amounts billed	$	866,797		$	846,716
Unbilled receivables and other		794,825			750,035
Retentions receivable		46,934			31,409
Allowance for doubtful accounts		(9,782	)		(9,599	)

Total receivables, net	$	1,698,774		$	1,618,561

Other information about receivables:
Amounts due from the United States federal government, included above, net of advanced billings	$	394,054		$	366,158

Claims receivable:
Relating to the waste incineration project, explained below	$	35,197		$	37,887
Other		17,172			19,813

Total	$	52,369		$	57,700

Unbilled receivables represent reimbursable costs and amounts earned and reimbursable under contracts in progress as of the respective balance sheet dates. Such amounts become billable according to the contract terms, which usually consider the passage of time, achievement of certain milestones or completion of the project.

Claims receivable represent costs incurred on contracts to the extent it is probable that such claims will result in additional contract revenue and the amount of such additional revenue can be reliably estimated. The claim relating to the waste incineration project is discussed more fully in Note 11 — Contractual Guarantees, Litigation, Investigations, and Insurance of Notes to Consolidated Financial Statements beginning on page F-25 of our 2009 Form 10-K. Due to the timing of when this claim may be settled, the receivable is included in “Other Noncurrent Assets” in the accompanying Consolidated Balance Sheets. The claim relates to a dispute involving proper waste feed, content of residues, final acceptance of the plant, and costs of operation and maintenance of the plant. The other claims receivable are included in “Receivables” in the accompanying Consolidated Balance Sheets.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Property, Equipment and Improvements, Net

Property, Equipment and Improvements, net in the accompanying Consolidated Balance Sheets at April 2, 2010 and October 2, 2009 consisted of the following (in thousands):


	2010			2009
Land	$	12,173		$	11,901
Buildings		88,332			85,067
Equipment		434,145			430,220
Leasehold improvements		119,146			125,050
Construction in progress		16,552			5,845

		670,348			658,083
Accumulated depreciation and amortization		(446,572	)		(417,733	)

	$	223,776		$	240,350

Revenue Accounting for Contracts / Accounting for Joint Ventures

In general, we recognize revenues at the time we provide services. Depending on the commercial terms of the contract, we recognize revenues either when costs are incurred, or using the percentage-of-completion method of accounting by relating contract costs incurred to date to the total estimated costs at completion. Contract losses are provided for in their entirety in the period they become known, without regard to the percentage-of-completion.

The nature of our business sometimes results in clients, subcontractors or vendors presenting claims to us for recovery of costs they incurred in excess of what they expected to incur, or for which they believe they are not contractually responsible. In those situations where a claim against us may result in additional costs to the contract, we include in the total estimated costs of the contract (and therefore, the estimated amount of margin to be earned under the contract) an estimate, based on all relevant facts and circumstances available, of the additional costs to be incurred. Similarly, and in the normal course of business, we may present claims to our clients for costs we have incurred for which we believe we are not contractually responsible. With respect to such claims, we include in revenues the amount of costs incurred, without profit, to the extent it is probable that the claims will result in additional contract revenue, and the amount of such additional revenue can be reliably estimated. Costs associated with unapproved change orders are included in revenues using substantially the same criteria used for claims.

Certain cost-reimbursable contracts include incentive-fee arrangements. The incentive fees in such contracts can be based on a variety of factors but the most common are the achievement of target completion dates or target costs, and/or meeting other performance criteria as defined in the contracts. Failure to meet these targets can result in unrealized incentive fees. We recognize incentive fees based on expected results using the percentage-of-completion method of accounting. As the contract progresses and more information becomes available, the estimate of the anticipated incentive fee that will be earned is revised as necessary. We bill incentive fees based on the terms and conditions of the individual contracts. In certain situations we are allowed to bill a portion of the incentive fees over the performance period of the contract. In other situations, we are allowed to bill incentive fees only after the target criterion has been achieved. Incentive fees which have been recognized but not billed are included in receivables in the accompanying Consolidated Balance Sheets.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Certain cost-reimbursable contracts with government customers as well as certain commercial clients provide that contract costs are subject to audit and adjustment. In this situation, revenues are recorded at the time services are performed based upon the amounts we expect to realize upon completion of the contracts. Revenues are not recognized for non-recoverable costs. In those situations where an audit indicates that we may have billed a client for costs not allowable under the terms of the contract, we estimate the amount of such nonbillable costs and adjust our revenues accordingly.

As is common to the industry, we execute certain contracts jointly with third parties through various forms of joint ventures and consortiums. For certain of these joint ventures (i.e., where we have an undivided interest in the assets and liabilities of the joint venture), we recognize our proportionate share of joint venture revenues, costs, and operating profit in our Consolidated Statements of Earnings. For other investments in engineering and construction joint ventures, we use the equity method of accounting.

Very few of our joint ventures have employees. Although the joint ventures own and hold the contracts with the clients, the services required by the contracts are typically performed by us and our joint venture partners, or by other subcontractors under subcontracting agreements with the joint ventures. The assets of our joint ventures, therefore, consist almost entirely of cash and receivables (representing amounts due from clients), and the liabilities of our joint ventures consist almost entirely of amounts due to the joint venture partners (for services provided by the partners to the joint ventures under their individual subcontracts) and other subcontractors. In general, at any given time, the equity of our joint ventures represents the undistributed profits earned on contracts the joint ventures hold with clients. None of our joint ventures have third-party debt or credit facilities. Our joint ventures, therefore, are simply mechanisms used to deliver engineering and construction services to clients. Rarely do they, in and of themselves, present any risk of loss to us or to our partners separate from those that we would carry if we were performing the contract on our own. Under accounting principles generally accepted in the United States (“U.S. GAAP”), our share of losses associated with the contracts held by the joint ventures, if and when they occur, has always been reflected in our Consolidated Financial Statements.

We have analyzed our joint ventures and have classified them into two groups: (i) those VIEs of which we are the primary beneficiary of the VIEs expected residual returns or losses; and (ii) those VIEs of which we are not the primary beneficiary of the VIEs expected residual returns or losses. In accordance with U.S. GAAP, we apply the consolidation method of accounting for our investment in material VIEs of which we are the primary beneficiary.

The following table presents certain financial information as of April 2, 2010 about those VIEs (i) for which we are the primary beneficiary, and (ii) for which we are not the primary beneficiary (in thousands):


Selected financial information about those VIEs for which we are the primary beneficiary:
Total assets	$	61,837
Total liabilities	$	51,158

Selected financial information about those VIEs for which we are not the primary beneficiary:
Total assets	$	262,307
Total liabilities	$	220,963

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

When we are directly responsible for subcontractor labor or third-party materials and equipment, we reflect the costs of such items in both revenues and costs. On those projects where the client elects to pay for such items directly and we have no associated responsibility for such items, these amounts are not reflected in either revenues or costs.

The following table sets forth pass-through costs included in revenues for the three and six months ended April 2, 2010 and April 3, 2009 (in thousands):


	For the Three Months Ended				For the Six Months Ended
	April 2, 2010		April 3, 2009		April 2, 2010		April 3, 2009
Pass-through costs included in revenues	$	721,682	$	1,160,875	$	1,448,948	$	2,359,093

Disclosures About Defined Pension Benefit Obligations

The following table presents the components of net periodic benefit cost recognized in earnings during each of the three and six month periods ended April 2, 2010 and April 3, 2009 (in thousands):


	For the Three Months Ended						For the Six Months Ended
Component:	April 2, 2010			April 3, 2009			April 2, 2010			April 3, 2009
Service cost	$	5,308		$	4,553		$	11,387		$	9,232
Interest cost		12,784			11,843			27,043			24,075
Expected return on plan assets		(11,295	)		(10,661	)		(23,757	)		(21,684	)
Amortization of previously unrecognized items		2,986			1,286			6,293			2,623

Net periodic benefit cost	$	9,783		$	7,021		$	20,966		$	14,246

The following table presents certain information regarding Company cash contributions to our pension plans for fiscal 2010 (in thousands):


Cash contributions made during the first six months of fiscal 2010	$	25,265
Cash contributions we expect to make during the remainder of fiscal 2010		17,075

Total	$	42,340

The change in pension liability included in the Consolidated Statements of Comprehensive Income for the three and six months ended April 2, 2010 and April 3, 2009 relates primarily to the effects of exchange rate changes.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

April 2, 2010

(continued)

Earnings Per Share and Certain Related Information

The following table (i) reconciles the denominator used to compute basic earnings per share (“EPS”) to the denominator used to compute diluted EPS for the three and six months ended April 2, 2010 and April 3, 2009; (ii) provides information regarding the number of non-qualified stock options that were antidilutive and therefore disregarded in calculating the weighted average number of shares outstanding used in computing diluted EPS; and (iii) the number of shares of common stock issued from the exercise of stock options and the release of restricted stock (in thousands):


	For the Three Months Ended		For the Six Months Ended
	April 2, 2010	April 3, 2009	April 2, 2010	April 3, 2009
Shares used to calculate EPS:
Weighted average shares outstanding (denominator used to compute basic EPS)	123,911	122,605	123,771	122,414
Effect of stock options and restricted stock	1,654	1,753	1,670	1,757

Denominator used to compute diluted EPS	125,565	124,358	125,441	124,171

Antidilutive stock options	2,887.7	2,309.7	2,887.7	2,309.7

Shares of common stock issued from the exercise of stock options and the release of restricted stock	426.1	416.8	697.7	807.3

Accounting for and Disclosure of Guarantees and Contingencies

Please refer to Note 10 — Commitments and Contingencies, and Derivative Financial Instruments of Notes to Consolidated Financial Statements beginning on page F-24 of our 2009 Form 10-K for a discussion of our various commitments and contingencies.

Please refer to Note 11 — Contractual Guarantees, Litigation, Investigations, and Insurance of Notes to Consolidated Financial Statements beginning on page F-25 of our 2009 Form 10-K for a discussion of the Company’s contractual guarantees and a description of the various types of litigation in which we’re involved.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

The purpose of this Management’s Discussion and Analysis (“MD&A”) is to provide a narrative analysis explaining the reasons for material changes in the Company’s (i) financial condition since the most recent fiscal year-end, and (ii) results of operations during the current fiscal period(s) as compared to the corresponding period(s) of the preceding fiscal year. In order to better understand such changes, readers of this MD&A should also read:

•

The discussion of the critical and significant accounting policies used by the Company in preparing its consolidated financial statements (the most current discussion of our critical accounting policies appears on pages 33 through 36 of our 2009 Annual Report on Form 10-K (the “2009 Form 10-K”), and the most current discussion of our significant accounting policies appears on pages F-7 through F-13 of our 2009 Form 10-K), as well as the discussion of new accounting standards included in the Notes to Consolidated Financial Statements of this Form 10-Q;

•

The Company’s fiscal 2009 audited consolidated financial statements and notes thereto included in its 2009 Form 10-K (beginning on page F-1 thereto); and

•

Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2009 Form 10-K (beginning on page 33 thereto).

In addition to historical information, this MD&A may contain forward-looking statements that are not based on historical fact. When used herein, words such as “expects”, “anticipates”, “believes”, “seeks”, “estimates”, “plans”, “intends”, and similar words identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although such statements are based on management’s current estimates and expectations, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Some of the factors that could cause or contribute to such differences are listed and discussed in Item 1A—Risk Factors, included in our 2009 Form 10-K (beginning on page 18 thereto). We undertake no obligation to release publicly any revisions or updates to any forward-looking statements. We encourage you to read carefully the risk factors described in other documents we file from time to time with the United States Securities and Exchange Commission.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Results of Operations

In order to better understand the Company’s results of operations for the second quarter of fiscal 2010 (i.e., the current fiscal quarter) and the recent trends in our business, we present the following tables which compare our operating results for the current fiscal quarter to the first quarter of fiscal 2010 (i.e., the immediately preceding fiscal quarter) and the second quarter of fiscal 2009 (dollars in thousands, except per share information):


	Second Quarter FY 2010			First Quarter FY 2010			Second Quarter FY 2009
Revenues	$	2,586,974		$	2,477,785		$	2,975,452
Direct costs of contracts		(2,223,793	)		(2,128,576	)		(2,571,828	)
SG&A Expenses		(241,177	)		(235,728	)		(232,936	)

Operating profit	$	122,004		$	113,481		$	170,688

Net earnings	$	77,500		$	72,437		$	109,287

Earnings per share (diluted)	$	0.62		$	0.58		$	0.88

Direct costs of contracts as a percentage of revenues		86.0	%		85.9	%		86.4	%

Other Comparisons:


	Second Quarter of FY 2010 as Compared to
	First Quarter FY 2010		Second Quarter FY 2009
Percentage change in revenues	4.4	%	(13.1	%)
Percentage change in SG&A expenses	2.3	%	3.5	%
Percentage change in operating profit	7.5	%	(28.5	%)
Percentage change in net earnings	7.0	%	(29.1	%)

Net earnings for the second quarter of fiscal 2010 ended April 2, 2010 totaled $77.5 million compared to $109.3 million for the second quarter of fiscal 2009 ended April 3, 2009. Net earnings for the six months ended April 2, 2010 totaled $149.9 million compared to $225.6 million for the comparable period last year. In general, year-over-year (fiscal 2010 as compared to fiscal 2009) comparisons of net earnings, as well as most other elements of our results of operations, will continue to show the effects on our business of the global recession which began in 2007. Because our business tends to lag the general economy, our results of operations usually do not reflect the full effects of a recession, nor any recovery, until several or more fiscal quarters later.

Comparing the Company’s operating results for the second quarter of fiscal 2010 to the immediately preceding fiscal quarter, we experienced a 7.5% and 7.0% improvement in both operating profit and net earnings, respectively. The improvement in the Company’s results of operations during the current fiscal quarter as compared to the immediately preceding fiscal quarter was due primarily to an increase in project services revenues combined with continuing control over our selling, general, and administrative expenses.

During fiscal 2009 and continuing into fiscal 2010, we took certain actions which, we believe, will help to mitigate the effects of the recession. In particular, in the first quarter of fiscal 2010 the Company ceased using one of its offices located in Houston, Texas, and entered into a sublease for the entire property. Accordingly, included in net earnings for the six months ended April 2, 2010 is an after-tax charge of $5.8 million, or $0.04 per diluted share, relating to this real estate transaction. Partially offsetting the benefits of this restructuring charge during the second quarter of fiscal 2010 were the additional selling, general, and administrative expenses relating to our recent acquisitions as well as the amortization expense associated with those intangible assets acquired in connection with such acquisitions.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

We believe we are well positioned to weather the current recessionary business environment, but we can provide no assurance that we will be able to do so. The Company maintains its competitive cost posture by driving down costs and maintaining long-term relationships with core clients such as the U.S. federal and other national governments, and large, multinational companies. We also continued to monitor new project opportunities arising from the American Recovery and Reinvestment Act of 2009 (although the timing, size, and scope of any such new work cannot be presently predicted).

We continue to look for strategic acquisitions that expand our markets and geographic reach. Geographies where the Company sees opportunities include the Middle East, India, and China. Markets where the Company sees opportunities include aerospace and defense; water and wastewater; upstream oil and gas; power; and minerals. Our cash position allows us to execute our acquisition strategy.

Total revenues for the second quarter of fiscal 2010 decreased by $388.5 million, or 13.1%, to $2.6 billion compared to $3.0 billion for the second quarter of fiscal 2009. Total revenues for the six months ended April 2, 2010 decreased by $1.1 billion, or 18.4%, to $5.1 billion compared to $6.2 billion for the corresponding period last year.

The following table sets forth our revenues by the various types of services we provide for the three and six months ended April 2, 2010 and April 3, 2009 (in thousands):


	For the Three Months Ended				For the Six Months Ended
	April 2, 2010		April 3, 2009		April 2, 2010		April 3, 2009
Project Services	$	1,110,065	$	1,171,635	$	2,123,020	$	2,477,660
Construction		986,581		1,310,142		1,956,460		2,668,031
Operations and Maintenance (“O&M”)		255,834		273,215		543,516		619,737
Process, Scientific and Systems Consulting		234,494		220,460		441,763		442,677

	$	2,586,974	$	2,975,452	$	5,064,759	$	6,208,105

As shown above, revenues for both the three and six months ended April 2, 2010 among the types of services we provide were generally lower as compared to the corresponding periods last year, with revenues from construction services posting the largest declines.

The following table sets forth our revenues by the industry groups and markets in which our clients operate for the three and six months ended April 2, 2010 and April 3, 2009 (in thousands):


	For the Three Months Ended				For the Six Months Ended
	April 2, 2010		April 3, 2009		April 2, 2010		April 3, 2009
Energy & Refining - Downstream	$	825,991	$	1,110,046	$	1,650,055	$	2,282,931
National Government Programs		613,264		521,220		1,138,117		1,052,643
Chemicals and Polymers		314,349		291,886		627,584		629,334
Oil & Gas - Upstream		123,739		245,417		245,682		560,705
Infrastructure		240,119		239,095		456,525		490,813
Buildings		221,389		210,536		413,951		413,492
Pharmaceuticals and Biotechnology		154,251		203,848		351,335		454,839
Industrial and Other		93,872		153,404		181,510		323,348

	$	2,586,974	$	2,975,452	$	5,064,759	$	6,208,105

Amounts related to the Company’s buildings work for the U.S. Federal Government have been reclassified from the National Government Programs market into the Buildings market. Prior period information has been reclassified to conform to this new presentation.

As shown above, revenues for both the three and six months ended April 2, 2010 from projects for clients operating in many of the markets and industry groups we serve were generally lower as compared to the corresponding periods last year, with revenues from clients operating in the energy and refining (downstream) and oil and gas (upstream) markets posting the largest declines.

We believe these declines in revenues are attributable to the continuing effects of the current recession combined with the routine completion and normal winding-down of projects. Offsetting these declines in part are increased revenues from projects for our national government clients.

Direct costs of contracts for the three months ended April 2, 2010 decreased $348.0 million, or 13.5%, to $2.2 billion as compared to $2.6 billion for the corresponding period

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

last year. Direct costs of contracts for the six months ended April 2, 2010 decreased $1.0 billion, or 18.9%, to $4.4 billion as compared to $5.4 billion for the corresponding period last year. The level of direct costs of contracts may fluctuate between reporting periods due to a variety of factors including the amount of pass-through costs we incur during a period. On those projects where we are responsible for subcontract labor or third-party materials and equipment, we reflect the amounts of such items in both revenues and costs (and we refer to such items as “pass-through costs”). On other projects, where the client elects to pay for such items directly and we have no associated responsibility for such items, these amounts are not considered pass-through costs and are, therefore, not reflected in either revenues or costs. To the extent that we incur a significant amount of pass-through costs in a period, our direct cost of contracts are likely to increase as well.

For the three and six months ended April 2, 2010, pass-through costs decreased $439.2 million and $910.1 million, respectively, as compared to the corresponding periods last year. In general, pass-through costs are more significant on projects that have a higher content of field services activities. Pass-through costs are generally incurred at a specific point in the lifecycle of a project and are highly dependent on the needs of our individual clients and the nature of the clients’ projects. However, because we have hundreds of projects which start at various times within a fiscal year, the effect of pass-through costs on the level of direct costs of contracts can vary between fiscal years without there being a fundamental or significant change to the underlying business.

As a percentage of revenues, direct costs of contracts for the three and six months ended April 2, 2010 was 86.0% and 85.9%, respectively. This compares to 86.4% and 86.5%, respectively, for the three and six months ended April 3, 2009. The relationship between direct costs of contracts and revenues will fluctuate between reporting periods depending on a variety of factors including the mix of business during the reporting periods being compared as well as the level of margins earned from the various types of services provided. Generally speaking, the more procurement we do on behalf of our clients (i.e., where we purchase equipment and materials for use on projects, and/or procure subcontracts in connection with projects) and the more field services revenues we have relative to technical, professional services revenues, the higher the direct cost of contracts percentage will be. Because revenues from pass-through costs typically have lower margin rates associated with them, it is not unusual for us to experience an increase or decrease in such revenues without experiencing a corresponding increase or decrease in our gross margins and operating profit. The decrease in the direct cost of contracts percentage for the three and six months ended April 2, 2010 as compared to the corresponding periods last year were due primarily to a combination of lower construction services revenue relative to project services, combined with better project performance.

Selling, general and administrative (“SG&A”) expenses for the three months ended April 2, 2010 increased $8.2 million, or 3.5%, to $241.2 million compared to $232.9 million for the three months ended April 3, 2009. For the six months ended April 2, 2010, SG&A expenses decreased by $12.4 million, or 2.5%, to $476.9 million compared to $489.3 million for the six months ended April 3, 2009.

Included in SG&A expenses in the current fiscal year are the SG&A expenses of our recent acquisitions as well as the amortization expense associated with the acquired intangible assets. In addition, and in response to the current business environment, the Company ceased using one of its offices located in Houston, Texas, and entered into a sublease for the entire property. Included in SG&A expenses for the six months ended April 2, 2010 was a charge of $11.4 million relating to the Houston property.

Interest income for the three and six months ended April 2, 2010 decreased $1.8 million and $5.6 million, respectively as compared to the corresponding periods last year. The

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

decrease in interest income was due primarily to lower rates of interest earned during the current fiscal quarter as compared to last year.

Backlog Information

We include in backlog the total dollar amount of revenues we expect to record in the future as a result of performing work under contracts that have been awarded to us. Because of the nature, size, expected duration, funding commitments, and the scope of services required by our contracts, the timing of when backlog will be recognized as revenues can vary greatly between individual contracts. Our policy with respect to O&M contracts, however, is to include in backlog the amount of revenues we expect to receive for one succeeding year, regardless of the remaining life of the contract. For national government programs (other than national government O&M contracts), our policy is to include in backlog the full contract award, whether funded or unfunded, and exclude option periods.

In accordance with industry practice, substantially all of our contracts are subject to cancellation or termination at the option of the client. In a situation where a client terminates a contract, we typically are entitled to receive payment for work performed up to the date of termination and, in certain instances, we may be entitled to allowable termination and cancellation costs. While management uses all information available to it to determine backlog, our backlog at any given time is subject to changes in the scope of services to be provided as well as increases or decreases in costs relating to the contracts included therein.

Because certain contracts (for example, contracts relating to large engineering, procurement, and construction projects as well as national government programs) can cause large increases to backlog in the fiscal period in which we recognize the award, and because many of our contracts require us to provide services that span over a number of fiscal quarters (and sometimes over fiscal years), we evaluate our backlog on a year-over-year basis, rather than on a sequential, quarter-over-quarter basis.

The following table summarizes our backlog at April 2, 2010 and April 3, 2009 (in millions):


	2010		2009
Technical professional services	$	8,299.3	$	8,116.8
Field services		6,354.3		8,515.1

Total	$	14,653.6	$	16,631.9

Our backlog decreased $2.0 billion, or 11.9%, to $14.7 billion at April 2, 2010 from $16.6 billion at April 3, 2009. Backlog at April 2, 2010 includes new awards from our public sector clients.

Liquidity and Capital Resources

At April 2, 2010, our principal sources of liquidity consisted of $839.1 million of cash and cash equivalents, and $256.5 million of available borrowing capacity under our $290.0 million, long-term, unsecured revolving credit facility. We finance as much of our operations and growth as possible through cash generated by our operations.

In addition to our $290.0 million revolving credit facility, we have also entered into a short-term credit facility with a bank in the U.S. We entered into the facility in connection with our acquisition of a one-third interest in AWE Management Ltd. (“AWE”). Approximately $95.2 million was outstanding under this facility at April 2, 2010.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

During the first six months of fiscal 2010, our cash and cash equivalents decreased by $194.6 million to $839.1 million at April 2, 2010. This compares to a net increase in cash and cash equivalents of $168.2 million, to $772.7 million, during the corresponding period last year. During the six months ended April 2, 2010, we used $406.1 million of cash and cash equivalents for investing activities. This cash outflow was offset in part by net cash inflows of $117.2 million from operating activities, $92.8 million from financing activities, and $1.6 million from the effects of exchange rates.

Our operations provided net cash of $117.2 million during the six months ended April 2, 2010. This compares to net cash inflows of $201.1 million for the corresponding period last year. The $84.0 million decrease in cash provided by operations for the six months ended April 2, 2010 as compared to the corresponding period last year was due primarily to the following factors:

•

a $75.7 million decrease in net earnings; and,

•

a $22.8 million decrease relating to changes in our working capital accounts (discussed below).

These decreases in cash flows from operations were offset in part by the following:

•

a $7.3 million change relating to the amortization of intangibles; and,

•

a $5.0 million change relating to deferred income taxes.

With respect to the $22.8 million decrease in cash flows relating to changes in our working capital accounts, there was no unusual activity occurring in these accounts during the six months ended April 2, 2010.

Because such a high percentage of our revenues are earned on cost-plus type contracts, and due to the significance of revenues relating to pass-through costs, most of the costs we incur are included in invoices we send to clients. Although we continually monitor our accounts receivable, we manage the operating cash flows of the Company by managing the working capital accounts in total, rather than by the individual elements. The primary elements of the Company’s working capital accounts are accounts receivable, accounts payable, and billings in excess of cost. Accounts payable consists of obligations to third parties relating primarily to costs incurred for projects which are generally billable to clients. Accounts receivable consist of billings to our clients — a substantial portion of which is for project-related costs. Billings in excess of cost consist of billings to and payments from our clients for costs yet to be incurred.

This relationship between revenues and costs, and between receivables and payables is unique for our industry, and facilitates review at the total working capital level. The $22.8 million decrease in cash flows relating to changes in our working capital accounts was due simply to the timing of cash receipts and payments within our working capital accounts and is not indicative of any known trend or fundamental change to the underlying business.

We used $406.1 million of cash and cash equivalents for investing activities during the six months ended April 2, 2010 as compared to $17.1 million during the corresponding period last year. The $388.9 million increase in cash used for investing activities for the six months ended April 2, 2010 as compared to the corresponding period last year was due primarily to acquisitions of businesses and changes in investments.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

During the six months ended April 2, 2010 we acquired JJG, TYBRIN and completed our acquisition of AWE.

Our financing activities resulted in net cash inflows of $92.8 million during the six months ended April 2, 2010. This compares to net cash outflows of $0.3 million during the corresponding period last year. The $93.1 million net increase in cash flows from financing activities during the six months ended April 2, 2010 as compared to the corresponding period last year was due primarily to a $79.0 million increase in short-term borrowings.

We believe we have adequate liquidity and capital resources to fund our operations, support our acquisition strategy, and service our debt for the next twelve months. We had $839.1 million in cash and cash equivalents at April 2, 2010, compared to $1.0 billion at October 2, 2009. Our consolidated working capital position at April 2, 2010 was $1.4 billion, a decrease of $164.9 million from October 2, 2009. We have a long-term, unsecured, revolving credit facility providing up to $290.0 million of debt capacity, under which approximately $33.5 million was utilized at April 2, 2010 in the form of direct borrowings and letters of credit. While our access to capital has not been severely affected by the credit crisis currently impacting global markets, we believe the full effect of the crisis may increase our borrowing costs in the future. We believe that the capacity, terms and conditions of our long-term revolving credit facility, combined with other committed and uncommitted facilities we have in place, are adequate for our working capital and general business requirements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 3.

Quantitative and Qualitative Disclosures About Market Risk.

We do not enter into derivative financial instruments for trading, speculation or other purposes that would expose us to market risk. As more fully discussed below and in Item 1A—Risk Factors of our 2009 Form 10-K (beginning on page 18 thereto), our results of operations are exposed to risks associated with fluctuations in interest rates and currency exchange rates.

Interest Rate Risk

Our only committed source for long-term credit is a $290.0 million, long-term, unsecured revolving credit facility. The total amount outstanding under this facility at April 2, 2010 was $0.6 million. This agreement expires in May 2012, and provides for both fixed-rate and variable-rate borrowings. Our objectives in managing our interest rate risk are to limit the impact of interest rate changes on earnings and cash flows, and to lower our overall borrowing costs. To achieve these objectives, we continuously monitor changes in interest rates, and use cash provided from operations to re-pay our borrowings as quickly as possible. Furthermore, the Company can use a combination of both fixed rate and variable rate debt to manage our exposure to interest rate risk.

Foreign Currency Risk

In situations where our operations incur contract costs in currencies other than their functional currency, we attempt to have a portion of the related contract revenues denominated in the same currencies as the costs. In those situations where revenues and costs are transacted in different currencies, we sometimes enter into foreign exchange contracts in order to limit our exposure to fluctuating foreign currencies. The Company does not currently have exchange rate sensitive instruments that would have a material effect on our consolidated financial statements or results of operations.

Item 4.

Controls and Procedures.

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as defined by Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of April 2, 2010, the end of the period covered by this Quarterly Report on Form 10-Q (the “Evaluation Date”). Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the Evaluation Date.

There were no changes in the Company’s internal control over financial reporting during the quarter ended April 2, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

PART II – OTHER INFORMATION

Item 1.

Legal Proceedings.

In the normal course of business, we are subject to certain contractual guarantees and litigation. The guarantees to which we are a party generally relate to project schedules and plant performance. Most of the litigation involves us as a defendant in workers’ compensation; personal injury; environmental; employment/labor; professional liability; and other similar lawsuits.

We maintain insurance coverage for various aspects of our business and operations. We have elected, however, to retain a portion of losses that occur through the use of various deductibles, limits, and retentions under our insurance programs. This situation may subject us to some future liability for which we are only partially insured, or completely uninsured. We intend to mitigate any such future liability by continuing to exercise prudent business judgment in negotiating the terms and conditions of our contracts.

Additionally, as a contractor providing services to agencies of the United States federal government, we are subject to many levels of audits, investigations and claims by, or on behalf of, the U.S. federal government with respect to our contract performance, pricing, costs, cost allocations, and procurement practices. Furthermore, our income, franchise, and similar tax returns and filings are also subject to audit and investigation by the Internal Revenue Service, most states within the United States as well as by various government agencies representing jurisdictions outside the United States.

In accordance with Accounting Standards Codification 450—Contingencies and Accounting Standards Codification 740—Income Taxes, we record in our Consolidated Balance Sheets amounts representing our estimated liability relating to such claims, guarantees, litigation, and audits and investigations. We include any adjustments to such reserves in our consolidated results of operations.

Management believes, after consultation with counsel, that such guarantees, litigation, United States Government contract-related audits, investigations and claims, and income tax audits and investigations should not have any material adverse effect on our consolidated financial statements.

In addition to the matters described above, we are involved in a dispute with a client relating to a large waste incineration project in Europe. The contract was entered into by one of our subsidiaries more than ten years ago prior to our acquisition of that subsidiary. The dispute involves proper waste feed; content of residues; final acceptance of the plant; and costs of operation and maintenance of the plant. We have initiated litigation against the client and are seeking in excess of €40.0 million (approximately $54.1 million at April 2, 2010) in damages. The client has filed a counterclaim against us, which we believe is without merit. We believe our claims are valid and enforceable and that we will be ultimately successful in obtaining a favorable judgment.

On August 1, 2007 the I-35W bridge in Minneapolis, Minnesota suffered a tragic collapse. The bridge was designed and built in the early 1960’s. Sverdrup & Parcel and Associates, Inc. (“Sverdrup & Parcel”) provided design services to the Minnesota Department of Transportation (“MnDOT”) on the bridge. Sverdrup & Parcel was a predecessor company to Sverdrup Corporation, a company acquired by Jacobs in 1999. Several lawsuits have been filed against a consultant who had been providing engineering analyses of the bridge prior to its collapse, and against a contractor who was providing maintenance and construction work on the bridge at

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

the time of its collapse. No lawsuits have been filed directly against the Company by any of the primary plaintiffs. The consultant and the contractor have filed suit against the Company claiming that the Company was liable for negligent design services by Sverdrup & Parcel, and against MnDOT claiming that MnDOT had an obligation to inspect, maintain and repair the bridge and that it failed to do so. MnDOT has filed a suit against the Company claiming that it is entitled to be indemnified for any and all amounts that it pays out under its Victims Compensation Fund. We understand that the contractor has settled all of the plaintiffs’ claims against it. The contractor’s suit against the Company is in the process of being dismissed without any compensation being paid by the Company. The Company’s motions to dismiss the remaining claims against it by the consultant and MnDOT based on the State Statute of Repose were denied. The Company has filed an appeal. The Company does not expect this matter to have any material adverse effect on its consolidated financial statements.

Item 1A.

Risk Factors.

Please refer to Item 1A—Risk Factors on pages 18 through 29 of our 2009 Form 10-K, which is incorporated herein by reference. There have been no material changes from those risk factors previously disclosed in our 2009 Form 10-K.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 5.

Other Information

Submission of Matters to a Vote of Security Holders

The Company’s 2010 Annual Meeting of Shareholders was held at its headquarters on January 28, 2010, as previously announced in its Notice of Annual Meeting of Shareholders and Proxy Statement dated December 17, 2009, copies of which were filed with the Securities and Exchange Commission pursuant to Regulation 14A.

There were two matters voted upon by the shareholders at the Annual Meeting: (i) the election of Robert C. Davidson, Jr., Edward V. Fritzky, and Benjamin F. Montoya, as directors to hold office until the 2013 annual meeting, and the election of Peter J. Robertson as a director to hold office until the 2012 annual meeting, and (ii) ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the year ending October 1, 2010.

The results of the shareholder voting were as follows (all shares voted were voted by proxy):


	Votes For	Votes Against	Abstentions	Broker Non-votes
1. Election of Directors:
Robert C. Davidson, Jr.	81,787,281	1,543,923	111,214	15,022,903
Edward V. Fritzky	81,908,650	1,427,722	106,046	15,022,903
Benjamin F. Montoya	81,668,851	1,659,778	113,789	15,022,903
Peter J. Robertson	79,741,798	3,589,820	110,890	15,022,813
2. Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm.	97,281,977	1,036,004	146,977	363

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 6.

Exhibits

(a)

Exhibits



10.1 —		Jacobs Engineering Group Inc. 2005 Executive Deferral Plan

31.1 —		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 —		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 —		Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2 —		Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

JACOBS ENGINEERING GROUP INC.

By: /s/ John W. Prosser, Jr.

John W. Prosser, Jr.

Executive Vice President

Finance and Administration

and Treasurer

(Principal Financial Officer)

Date: April 29, 2010

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company