| Notes to Financial Statements | |
| 9 Months Ended
Jun. 30, 2009
USD / shares
|
| Notes to Financial Statements [Abstract] | |
| Basis of Presentation |
Basis of Presentation
Unless the context otherwise requires, references herein to Jacobs are to Jacobs Engineering Group Inc. and its predecessors, and references herein to the Company, we, us or our are to Jacobs Engineering Group Inc. and its consolidated subsidiaries.
The accompanying consolidated financial statements and financial information included herein have been prepared pursuant to the interim period reporting requirements of Form10-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 September30, 2008 (2008 Form10-K) as well as Item7Managements Discussion and Analysis of Financial Condition and Results of Operations also included in our 2008 Form 10-K. Readers should also read our reports on Form10-Q for the quarterly periods ended December31, 2008 and March31, 2009.
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 June30, 2009 and for the three and nine month periods ended June30, 2009 and 2008.
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 June30, 2009 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 |
New Accounting Standards
In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No.141R Business Combinations (SFAS141R). SFAS141R significantly changes the accounting and reporting for business combinations. Among other changes, SFAS141R requires acquisition related costs to be recognized separately from the acquisition; 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; an acquirer to recognize assets or liabilities from contingencies as of the acquisition date. The requirement to measure the noncontrolling interest 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. SFAS141R is effective for the Company October1, 2009.
In December 2007, the FASB issued Statement of Financial Accounting Standards No.160 Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No.51 (SFAS 160). SFAS160 significantly changes the accounting and reporting of noncontrolling (formerly known as minority) interests in consolidated financial statements. Among other changes, SFAS160 clarifies 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; establishes that net income attributable to both the parent and the noncontrolling interest will be reported in the consolidated statement of earnings; and eliminates the requirement of purchase accounting for a parents acquisition of a noncontrolling ownership interest. SFAS160 is effective for the Company October1, 2009.
Depending on the size and nature of an acquisition, the adoption of SFAS 141R and SFAS 160 could have a material effect on the Companys consolidated financial statements.
In June 2009, the FASB issued Statement of Financial Accounting Standards No. 167 Amendments to FASB Interpretation No. 46(R) (SFAS 167). SFAS 167 amends FIN 46(R) and requires the Company to perform an analysis to determine whether its variable interests give it a controlling financial interest in a variable interest entity. This analysis requires the Company to assess whether it has the power to direct the activities of the variable interest entity and if it has the obligation to absorb losses or the right to receive benefits that could potentially be significant to the variable interest entity. SFAS 167 eliminates the quantitative approach previously required for determining the primary beneficiary of a variable interest entity and significantly enhances disclosures.
The Company is still evaluating what, if any, impact the adoption of SFAS 167 will have on the Companys consolidated financial statements. |
| Receivables |
Receivables
Included in Receivables in the accompanying consolidated balance sheets at June30, 2009 and September30, 2008 were $770.6million and $964.8million, respectively, of unbilled receivables. 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. Included in these unbilled receivables at June30, 2009 and September30, 2008 were contract retentions totaling $23.6million and $35.0million, respectively. Also included in receivables at June30, 2009 and September30, 2008 were allowances for doubtful accounts of $9.6million and $10.1million, respectively.
In accordance with industry practice, we include in receivables claims representing the recovery of 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. Such amounts totaled $51.4million and $56.6million at June30, 2009 and September30, 2008, respectively, of which $36.8million and $38.1million, respectively, relate to one claim on a waste incineration project performed in Europe. This matter is more fully described in Note 11 Contractual Guarantees, Litigation, Investigations, and Insurance of Notes to Consolidated Financial Statements on page F-24 of our 2008 Form 10-K. Due to the timing of when the claim may be settled, the receivable is included in Other Noncurrent Assets in the accompanying consolidated balance sheets. 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 damages in excess of 40.0million (approximately $56.5million at June30, 2009), there can be no certainty as to the ultimate outcome of our claim. The client has filed a counterclaim against us, which we believe is without merit.
Amounts due from the United States federal government, net of advanced billings, totaled $273.2million and $274.1million at June30, 2009 and September30, 2008, respectively. |
| Property, Equipment and Improvements, Net |
Property, Equipment and Improvements, Net
Property, Equipment and Improvements, Net in the accompanying consolidated balance sheets consisted of the following (in thousands):
June30, 2009 September30, 2008
Land $ 11,570 $ 11,103
Buildings 82,406 79,497
Equipment 412,756 406,424
Leasehold improvements 120,287 112,244
Construction in progress 16,758 21,772
643,777 631,040
Accumulated depreciation and amortization (400,346 ) (374,900 )
$ 243,431 $ 256,140
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| Revenue Accounting for Contracts / Accounting for Joint Ventures |
Revenue Accounting for Contracts / Accounting for Joint Ventures
In accounting for long-term engineering and construction-type contracts, we follow the provisions of the American Institute of Certified Public Accountants Statement of Position 81-1 Accounting for Performance of Construction-Type and Certain Production-Type Contracts (SOP 81-1). 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. In those situations where we have presented such claims to our clients, 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, target costs, and/or other performance criteria. 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.
Certain cost-reimbursable contracts with government customers as well as certain commercial clients provide that contract costs are subject to au |
| Disclosures About Pension Benefit Obligations |
Disclosures About Pension Benefit Obligations
The components of net periodic benefit costs relating to our defined benefit pension plans are as follows (in thousands):
Three Months Ended June30, Nine Months Ended June30,
2009 2008 2009 2008
Service cost $ 4,901 $ 6,412 $ 14,133 $ 22,054
Interest cost 12,670 12,682 36,745 38,007
Expected return on plan assets (11,386 ) (13,336 ) (33,071 ) (40,087 )
Amortization of prior unrecognized items 1,379 426 4,003 1,290
Net periodic benefit cost $ 7,564 $ 6,184 $ 21,810 $ 21,264
During the nine months ended June30, 2009, we made cash contributions of approximately $28.8million to our plans, and we expect to make cash contributions of an additional $10.3million during the remainder of fiscal 2009.
The change in pension liability included in the Consolidated Statements of Comprehensive Income for the three and nine months ended June30, 2009 and 2008 relates primarily to the effects of exchange rate changes. |
| Earnings Per Share |
Earnings Per Share
The following table reconciles the denominator used to compute basic earnings per share (EPS) to the denominator used to compute diluted EPS (in thousands):
ThreeMonthsEnded June30, NineMonthsEnded June30,
2009 2008 2009 2008
Weighted average shares outstanding (denominator used to compute basic EPS) 122,953 121,474 122,593 120,833
Effect of stock options and restricted stock 1,795 3,150 1,766 3,471
Denominator used to compute diluted EPS 124,748 124,624 124,359 124,304
For the three months ended June30, 2009 and June30, 2008 we issued 385,475 and 629,407 shares of common stock, respectively, from the exercise of stock options and the release of restricted stock. For the nine months ended June30, 2009 and June30, 2008 we issued 1,192,794 and 1,964,983 shares of common stock, respectively, from the exercise of stock options and the release of restricted stock.
For the three and nine months ended June30, 2009 there were 2,276,113 and 2,959,263 non-qualified stock options, respectively, that were antidilutive and not included in the computation of diluted EPS. |
| Accounting for and Disclosure of Guarantees and Contingencies |
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-22 of our 2008 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-24 of our 2008 Form 10-K for a discussion of the Companys contractual guarantees and a description of the various types of litigation in which were involved. |
