Jacobs Engineering (J) 10-Q 28 Jan 10 2010 Q1 Quarterly report Financial data

Statement Of Financial Position

Statement Of Financial Position Classified (USD $)
In Thousands	Jan. 01, 2010	Oct. 02, 2009
Current Assets:
Cash and cash equivalents	$1,055,038	$1,033,619
Receivables	1,549,760	1,618,561
Deferred income taxes	117,637	117,066
Prepaid expenses and other	50,437	49,203
Total current assets	2,772,872	2,818,449
Property, Equipment and Improvements, Net	221,575	240,350
Other Noncurrent Assets:
Goodwill	1,133,309	929,842
Miscellaneous	552,780	439,973
Total other non-current assets	1,686,089	1,369,815
Assets, Total	4,680,536	4,428,614
Current Liabilities:
Notes payable	113,459	17,495
Accounts payable	338,269	340,651
Accrued liabilities	684,559	679,109
Billings in excess of costs	276,832	252,149
Income taxes payable	37,193	6,497
Total current liabilities	1,450,312	1,295,901
Long-term Debt	628	737
Other Deferred Liabilities	506,182	500,501
Capital stock:
Preferred stock, $1 par value, authorized-1,000,000 shares; issued and outstanding-none	0	0
Common stock, $1 par value, authorized-240,000,000 shares; issued and outstanding-124,511,300 shares and 124,229,933 shares, respectively	124,511	124,230
Additional paid-in capital	718,230	703,860
Retained earnings	2,081,354	2,009,338
Accumulated other comprehensive loss	(206,207)	(211,515)
Total Jacobs stockholders' equity	2,717,888	2,625,913
Noncontrolling Interests	5,526	5,562
Total Group stockholders' equity	2,723,414	2,631,475
Liabilities and Stockholders' Equity, Total	$4,680,536	$4,428,614

1_Statement Of Financial Positi

Statement Of Financial Position Classified (Parenthetical) (USD $)
	Jan. 01, 2010	Oct. 02, 2009
Preferred stock, par value	$1	$1
Preferred stock, authorized	1,000,000	1,000,000
Preferred stock, issued	0	0
Preferred stock, outstanding	0	0
Common stock, par value	$1	$1
Common stock, authorized	240,000,000	240,000,000
Common stock, issued	124,511,300	124,229,933
Common stock, outstanding	124,511,300	124,229,933

Statement Of Income Alternative

Statement Of Income Alternative (USD $)
In Thousands, except Per Share data	3 Months Ended Jan. 01, 2010	3 Months Ended Jan. 02, 2009
Revenues	$2,477,785	$3,232,653
Costs and Expenses:
Direct cost of contracts	(2,128,576)	(2,795,234)
Selling, general and administrative expenses	(235,728)	(256,351)
Operating Profit	113,481	181,068
Other Income (Expense):
Interest income	838	4,602
Interest expense	(612)	(1,229)
Miscellaneous expense, net	(559)	(2,860)
Total other income (expense), net	(333)	513
Earnings Before Taxes	113,148	181,581
Income Tax Expense	(40,747)	(65,465)
Net Earnings of the Group	72,401	116,116
Net Loss Attributable to Noncontrolling Interests	36	234
Net Earnings Attributable to Jacobs	$72,437	$116,350
Net Earnings Per Share:
Basic	0.59	0.95
Diluted	0.58	0.94

Statement Of Other Comprehensiv

Statement Of Other Comprehensive Income (USD $)
In Thousands	3 Months Ended Jan. 01, 2010	3 Months Ended Jan. 02, 2009
Net Earnings of the Group	$72,401	$116,116
Other Comprehensive Income (Loss):
Foreign currency translation adjustment	5,949	(41,942)
Income (loss) on cash flow hedges	1,374	(13,981)
Change in pension liability	(2,143)	24,535
Other comprehensive income (loss) before taxes	5,180	(31,388)
Income tax benefit	128	6,959
Net other comprehensive income (loss)	5,308	(24,429)
Net Comprehensive Income of the Group	77,709	91,687
Net Comprehensive Loss Attributable to Noncontrolling Interests	36	234
Net Comprehensive Income Attributable to Jacobs	$77,745	$91,921

Statement Of Cash Flows Indirec

Statement Of Cash Flows Indirect (USD $)
In Thousands	3 Months Ended Jan. 01, 2010	3 Months Ended Jan. 02, 2009
Cash Flows from Operating Activities:
Net earnings	$72,437	$116,350
Depreciation and amortization:
Property, equipment and improvements	17,312	16,562
Intangible assets	5,467	2,237
Gain from investments	0	(1,249)
Stock based compensation	6,216	6,059
Excess tax benefits from stock based compensation	(677)	(1,249)
(Gains)/losses of sales of assets, net	25	(35)
Changes in certain assets and liabilities, excluding the effects of businesses acquired:
Receivables	109,680	24,493
Prepaid expenses and other current assets	(517)	1,063
Accounts payable	(12,527)	(36,391)
Accrued liabilities	(12,508)	(36,884)
Billings in excess of costs	24,883	70,853
Income taxes payable	30,860	36,444
Deferred income taxes	(426)	4,838
Other, net	144	(58)
Net cash provided by operating activities	240,369	203,033
Cash Flows from Investing Activities:
Additions to property and equipment	(7,741)	(19,998)
Disposals of property and equipment	11,662	1,468
Changes in investments, net	(112,846)	(2,968)
Acquisitions of businesses, net of cash acquired	(220,131)	(1,033)
Changes in other non-current assets, net	1,848	7,216
Net cash used for investing activities	(327,208)	(15,315)
Cash Flows from Financing Activities:
Repayments of long-term borrowings	(120)	(4,555)
Net change in short-term borrowings	97,536	1,434
Proceeds from issuances of common stock	7,938	10,289
Excess tax benefits from stock based compensation	677	1,249
Changes in other deferred liabilities, net	1,380	(1,267)
Net cash provided by financing activities	107,411	7,150
Effect of Exchange Rate Changes	847	(11,422)
Net Increase in Cash and Cash Equivalents	21,419	183,446
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	$1,055,038	$787,866

Basis of Presentation

Basis of Presentation
	3 Months Ended Jan. 01, 2010 USD / shares
Basis of Presentation	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 October2, 2009 (2009 Form 10-K) as well as Item7Managements Discussion and Analysis of Financial Condition and Results of Operations also included in our 2009 Form 10-K. 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 January1, 2010 and for the three month periods ended January1, 2010 and January2, 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 January1, 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

New Accounting Standards
	3 Months Ended Jan. 01, 2010 USD / shares
New Accounting Standards	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 October3, 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 parents acquisition of a noncontrolling ownership interest. These revisions were effective for the Company October3, 2009. Depending on the size and nature of an acquisition, the changes described above could have a material effect on the Companys 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 October2, 2010. The Company is currently evaluating the impact of this statement on its consolidated financial statements.

Business Combination

Business Combination
	3 Months Ended Jan. 01, 2010 USD / shares
Business Combination	Business Combination On December18,2009, the Company acquired TYBRIN Corporation (TYBRIN), a 1,500-person professional services firm headquartered in Fort Walton Beach, Florida. Founded in 1972, TYBRIN is a leading supplier of mission planning solutions, systems engineering, software development, modeling and combat environment simulation, engineering and testing, range safety, and other services to the United States Department of Defense, NASA, and other government clients. The results of operations of TYBRIN for the first quarter of fiscal 2010 were not material. The purchase price allocation has not been completed. Included in the Companys Consolidated Balance Sheet at January1, 2010 is goodwill of approximately $207million associated with the acquisition of TYBRIN.

Receivables

Receivables
	3 Months Ended Jan. 01, 2010 USD / shares
Receivables	Receivables Included in Receivables in the accompanying Consolidated Balance Sheets at January1, 2010 and October2, 2009 were $740.1million and $769.6million, 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 January1, 2010 and October2, 2009 were contract retentions totaling $43.5million and $31.4million, respectively. Also included in receivables at January1, 2010 and October2, 2009 were allowances for doubtful accounts of $10.2million and $9.6million, respectively. We include in receivables claims representing 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 $51.9million and $57.7million at January1, 2010 and October2, 2009, respectively, of which $37.6million and $37.9million, respectively, relate to one claim on a waste incineration project performed in Europe. This matter is more fully described in Note 11Contractual 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 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 $57.7million at January1, 2010), 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 $408.7million and $366.2million at January1, 2010 and October2, 2009, respectively.

Property, Equipment and Improve

Property, Equipment and Improvements, Net
	3 Months Ended Jan. 01, 2010 USD / shares
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): January1, October2, 2010 2009 Land $ 12,035 $ 11,901 Buildings 89,025 85,067 Equipment 423,611 430,220 Leasehold improvements 112,120 125,050 Construction in progress 8,736 5,845 645,527 658,083 Accumulated depreciation and amortization (423,952 ) (417,733 ) $ 221,575 $ 240,350

Accounting for Joint Ventur

Accounting for Joint Ventures
	3 Months Ended Jan. 01, 2010 USD / shares
Revenue Accounting for Contracts / Accounting for Joint Ventures	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 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, 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 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 allowa

Disclosures About Pension Benef

Disclosures About Pension Benefit Obligations
	3 Months Ended Jan. 01, 2010 USD / shares
Disclosures About Pension Benefit Obligations	Disclosures About Pension Benefit Obligations The components of net periodic benefit costs relating to our defined benefit pension plans for the three months ended January1, 2010 and January2, 2009 are as follows (in thousands): 2010 2009 Service cost $ 6,080 $ 4,680 Interest cost 14,259 12,232 Expected return on plan assets (12,462 ) (11,023 ) Amortization of unrecognized items 3,307 1,337 Net periodic benefit cost $ 11,184 $ 7,226 During the three months ended January1, 2010, we made cash contributions of approximately $10.0million to our plans, and we expect to make cash contributions of an additional $28.5million during the remainder of fiscal 2010. The change in pension liability included in the Consolidated Statements of Comprehensive Income for the three months ended January1, 2010 and January2, 2009 relates primarily to the effects of exchange rate changes.

Earnings Per Share

Earnings Per Share
	3 Months Ended Jan. 01, 2010 USD / shares
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 for the three months ended January1, 2010 and January2, 2009 (in thousands): 2010 2009 Weighted average shares outstanding (denominator used to compute basic EPS) 123,622 122,217 Effect of employee and outside director stock options 1,680 1,760 Denominator used to compute diluted EPS 125,302 123,977 For the three months ended January1, 2010 and January2, 2009 we issued 271,585 and 390,471 shares of common stock, respectively, from the exercise of stock options and the release of restricted stock. For the three months ended January1, 2010 and January2, 2009 there were 2,926,838 and 2,301,188 non-qualified stock options, respectively, that were antidilutive and not included in the computation of diluted EPS.

Accounting for and Disclosure o

Accounting for and Disclosure of Guarantees and Contingencies
	3 Months Ended Jan. 01, 2010 USD / shares
Accounting for and Disclosure of Guarantees and Contingencies	Accounting for and Disclosure of Guarantees and Contingencies Please refer to Note 10Commitments 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 11Contractual 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 Companys contractual guarantees and a description of the various types of litigation in which were involved.

Document Information

Document Information
	3 Months Ended Jan. 01, 2010 USD / shares
Document Information [Text Block]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2010-01-01

Entity Information

Entity Information (USD $)
	3 Months Ended Jan. 01, 2010	Jan. 21, 2010
Entity [Text Block]
Trading Symbol	JEC
Entity Registrant Name	JACOBS ENGINEERING GROUP INC /DE/
Entity Central Index Key	0000052988
Current Fiscal Year End Date	--09-30
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		124,581,361