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 December 31, 2001 ----------------- [_] 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 95-4081636 - ------------------------------------------------------------------------------- (State of incorporation) (I.R.S. employer identification number) 1111 South Arroyo Parkway, Pasadena, California 91105 - -------------------------------------------------------------------------------- (Address of principal executive offices) (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 Number of shares of common stock outstanding at February 12, 2002: 26,916,595 Page 1
JACOBS ENGINEERING GROUP INC. INDEX TO FORM 10-Q <TABLE> <CAPTION> Page No. -------- <S> <C> Item 1. Financial Statements: Condensed Consolidated Balance Sheets - December 31, 2001 and September 30, 2001 3 Condensed Consolidated Statements of Earnings - Three Months Ended December 31, 2001 and 2000 4 Condensed Consolidated Statements of Comprehensive Income - Three Months Ended December 31, 2001 and 2000 5 Condensed Consolidated Statements of Cash Flows - Three Months Ended December 31, 2001 and 2000 6 Notes to Condensed Consolidated Financial Statements 7 - 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 - 14 Signatures 15 </TABLE> Page 2
Item 1. Financial Statements JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share information) (Unaudited) <TABLE> <CAPTION> December 31, September 30, 2001 2001 - ------------------------------------------------------------------------------------- <S> <C> <C> ASSETS Current Assets: Cash and cash equivalents $ 45,005 $ 49,263 Receivables 811,663 817,160 Deferred income taxes 69,874 64,651 Prepaid expenses and other 13,191 15,085 - ------------------------------------------------------------------------------------- Total current assets 939,733 946,159 - ------------------------------------------------------------------------------------- Property, Equipment and Improvements, Net 152,446 149,979 - ------------------------------------------------------------------------------------- Other Noncurrent Assets: Goodwill, net 366,531 317,664 Other 143,309 143,238 - ------------------------------------------------------------------------------------- Total other noncurrent assets 509,840 460,902 - ------------------------------------------------------------------------------------- $1,602,019 $1,557,040 ===================================================================================== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable $ 64,687 $ 19,688 Accounts payable 191,481 197,712 Accrued liabilities 344,850 295,763 Billings in excess of costs 135,280 163,833 Income taxes payable 28,690 23,663 - ------------------------------------------------------------------------------------- Total current liabilities 764,988 700,659 - ------------------------------------------------------------------------------------- Long-term Debt 121,482 164,308 - ------------------------------------------------------------------------------------- Other Deferred Liabilities 97,386 95,174 - ------------------------------------------------------------------------------------- Minority Interests 5,123 5,098 - ------------------------------------------------------------------------------------- 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 - 100,000,000 shares, 26,930,929 shares issued at December 31, 2001; 26,872,358 shares issued and outstanding at September 30, 2001 26,931 26,872 Additional paid-in capital 110,022 105,612 Retained earnings 494,237 472,010 Accumulated other comprehensive loss (13,874) (10,620) - ------------------------------------------------------------------------------------- 617,316 593,874 Unearned compensation (2,273) (2,073) Common stock in treasury, at cost (30,500 shares at December 31, 2001) (2,003) - - ------------------------------------------------------------------------------------- Total stockholders' equity 613,040 591,801 - ------------------------------------------------------------------------------------- $1,602,019 $1,557,040 ===================================================================================== </TABLE> See the accompanying Notes to Condensed Consolidated Financial Statements. Page 3
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS For the Three Months Ended December 31, 2001 and 2000 (In thousands, except per-share information) (Unaudited) <TABLE> <CAPTION> 2001 2000 - ------------------------------------------------------------------------ <S> <C> <C> Revenues $1,028,186 $ 929,182 Costs and Expenses: Direct costs of contracts (890,665) (816,526) Selling, general and administrative expenses (96,519) (79,469) - ------------------------------------------------------------------------ Operating Profit 41,002 33,187 - ------------------------------------------------------------------------ Other Income (Expense): Interest income 618 986 Interest expense (2,263) (3,045) Miscellaneous income 444 526 - ------------------------------------------------------------------------ Total other expense (1,201) (1,533) - ------------------------------------------------------------------------ Earnings Before Taxes 39,801 31,654 Income Tax Expense (13,931) (11,554) - ------------------------------------------------------------------------ Net Earnings $ 25,870 $ 20,100 ======================================================================== Net Earnings Per Share: Basic $ 0.96 $ 0.76 Diluted $ 0.94 $ 0.75 ======================================================================== </TABLE> See the accompanying Notes to Condensed Consolidated Financial Statements. Page 4
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Three Months Ended December 31, 2001 and 2000 (In thousands) (Unaudited) <TABLE> <CAPTION> 2001 2000 - -------------------------------------------------------------------------------------------------- <S> <C> <C> Net Earnings $ 25,870 $ 20,100 - -------------------------------------------------------------------------------------------------- Other Comprehensive Income (Loss): Unrealized holding gains on securities 319 847 Less: reclassification adjustment for gains realized in net earnings (740) (498) - -------------------------------------------------------------------------------------------------- Unrealized (losses) gains on securities, net of reclassification adjustment (421) 349 Foreign currency translation adjustments (2,997) 546 - -------------------------------------------------------------------------------------------------- Other Comprehensive (Loss) Income Before Income Taxes (3,418) 895 Income Tax Benefit (Expense) Relating to Other Comprehensive (Loss) Income 164 (122) - -------------------------------------------------------------------------------------------------- Other Comprehensive (Loss) Income (3,254) 773 - -------------------------------------------------------------------------------------------------- Total Comprehensive Income $ 22,616 $ 20,873 ================================================================================================== </TABLE> See the accompanying Notes to Condensed Consolidated Financial Statements. Page 5
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended December 31, 2001 and 2000 (In thousands) (Unaudited) <TABLE> <CAPTION> 2001 2000 - ------------------------------------------------------------------------------------ <S> <C> <C> Cash Flows from Operating Activities: Net earnings $ 25,870 $ 20,100 Adjustments to reconcile net earnings to net cash flows from operations: Depreciation and amortization of property, equipment and improvements 8,571 7,219 Amortization of goodwill - 2,140 Gains on sales of assets (608) (697) Changes in assets and liabilities, excluding the effects of businesses acquired: Receivables 53,827 (8,987) Prepaid expenses and other current assets 4,403 (2,215) Accounts payable (36,092) 53,541 Accrued liabilities 27,528 (156) Billings in excess of costs (32,287) (42,421) Income taxes payable 5,093 8,447 Deferred income taxes (943) (172) Other, net 145 96 - ------------------------------------------------------------------------------------ Net cash provided by operating activities 55,507 36,895 - ------------------------------------------------------------------------------------ Cash Flows from Investing Activities: Acquisitions of businesses, net of cash acquired (43,529) - Additions to property and equipment (11,844) (8,733) Disposals of property and equipment 274 12,482 Proceeds from sales of marketable securities and investments 3,850 741 Purchases of marketable securities and investments (1,374) (871) Net (increase) decrease in other noncurrent assets (6,137) 1,027 - ------------------------------------------------------------------------------------ Net cash (used for) provided by investing activities (58,760) 4,646 - ------------------------------------------------------------------------------------ Cash Flows from Financing Activities: Proceeds from long-term borrowings 88,309 13,581 Repayments of long-term borrowings (130,422) (26,449) Net change in short-term borrowings 45,150 (16,044) Exercises of stock options 725 669 Purchases of common stock for treasury (2,003) (2,210) Change in other deferred liabilities 2,923 1,874 - ------------------------------------------------------------------------------------ Net cash provided by (used) for financing activities 4,682 (28,579) - ------------------------------------------------------------------------------------ Effect of Exchange Rate Changes (5,687) 1,340 - ------------------------------------------------------------------------------------ (Decrease) increase in Cash and Cash Equivalents (4,258) 14,302 Cash and Cash Equivalents at Beginning of Period 49,263 65,848 - ------------------------------------------------------------------------------------ Cash and Cash Equivalents at End of Period $ 45,005 $ 80,150 ==================================================================================== </TABLE> See the accompanying Notes to Condensed Consolidated Financial Statements. Page 6
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 1. The accompanying condensed 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 refer to the consolidated financial statements and the notes thereto incorporated into the latest Annual Report on Form 10-K of Jacobs Engineering Group Inc. ("Jacobs", or the "Company"). In the opinion of management of the Company, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting solely of normal recurring adjustments) necessary for a fair presentation of the Company's consolidated financial position at December 31, 2001 and September 30, 2001, its consolidated results of operations for the three months ended December 31, 2001 and 2000, its consolidated comprehensive income for the three months ended December 31, 2001 and 2000, and its consolidated cash flows for the three months ended December 31, 2001 and 2000. The Company's interim results of operations are not necessarily indicative of the results to be expected for the full year. 2. Included in receivables at December 31, 2001 and September 30, 2001 were recoverable amounts under contracts in progress of $410.2 million and $420.6 million, respectively, that represent amounts earned under contracts in progress but not billable at the respective balance sheet dates. The Company anticipates that substantially all of such unbilled amounts will be billed and collected over the next twelve months. 3. Property, equipment and improvements are stated at cost and consisted of the following at December 31, 2001 and September 30, 2001 (in thousands): December 31, September 30, 2001 2001 -------------------------------------------------------------------------- Land $ 7,042 $ 7,106 Buildings 49,286 51,725 Equipment 240,520 231,322 Leasehold improvements 21,850 16,126 Construction in progress 15,266 16,290 ------------------------------------------------------------------------- 333,964 322,569 Accumulated depreciation and amortization (181,518) (172,590) ------------------------------------------------------------------------- $ 152,446 $ 149,979 ========================================================================== Page 7
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 4. Other noncurrent assets consisted of the following at December 31, 2001 and September 30, 2001 (in thousands): December 31, September 30, 2001 2001 ------------------------------------------------------------------ Cash surrender value of life insurance policies $ 43,020 $ 42,800 Investments 30,106 31,801 Deferred tax asset 18,054 18,054 Prepaid pension costs 16,240 16,377 Reimbursable pension costs 10,003 11,388 Notes receivable 10,518 9,764 Miscellaneous 15,368 13,054 ----------------------------------------------------------------- $ 143,309 $ 143,238 ================================================================== 5. The following table reconciles the denominator used to compute basic earnings per share to the denominator used to compute diluted earnings per share (in thousands): For the Three Months Ended December 31 ---------------------------- 2001 2000 ------------------------------------------------------------------- Weighted average shares outstanding (denominator used to compute basic EPS) 26,890 26,432 Effect of employee and outside director stock options 686 486 ------------------------------------------------------------------- Denominator used to compute diluted EPS 27,576 26,918 =================================================================== 6. During the three months ended December 31, 2001 and 2000, the Company made cash payments of approximately $2.1 million and $3.5 million, respectively, for interest and $7.5 million and $3.3 million, respectively, for income taxes. Page 8
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 7. On October 31, 2001, the Company completed the acquisition of McDermott Engineers & Constructors (Canada) Limited (including Delta Catalytic and Delta Hudson Engineering) (collectively, "Delta"). Delta provides engineering, construction, and maintenance services to various industries including upstream oil and gas, petroleum refining, petrochemicals, and chemicals. The total purchase price of $47.5 million in cash was financed with a new, short-term $50.0 million credit facility. The Delta acquisition was accounted for as a purchase. Accordingly, the Company's consolidated results of operations include those of Delta from the date of acquisition. The purchase price has been allocated to the assets and liabilities acquired based on their estimated fair values. The purchase price allocation, which may be adjusted further, resulted in goodwill of approximately $40.1 million. In January 1999, the Company completed its Agreement and Plan of Merger with Sverdrup Corporation ("Sverdrup"). In accordance with the merger agreement, each outstanding share of common stock of Sverdrup was converted into the right to receive (i) a proportional share of the total amount of initial merger consideration of $198.0 million paid at closing; and, (ii) a proportional amount of any additional merger consideration payable after each of the first three anniversaries of the date of the merger ("Deferred Merger Consideration"). Amounts payable as Deferred Merger Consideration at December 31, 2001 and 2000 were $11.1 million and $0.9 million, respectively. 8. Effective October 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 142 - Goodwill and Other Intangible Assets ("SFAS 142"). SFAS 142 eliminates the amortization of goodwill and intangible assets deemed to have indefinite lives. Instead, these assets must be tested for impairment using a fair value approach in accordance with SFAS 142. At September 30, 2001, the Company's goodwill was $317.7 million. The Company is required to complete the initial step of a transitional impairment test of such existing goodwill. An impairment loss, if any, resulting from the transitional impairment test will be recorded as a cumulative effect of a change in accounting principle. As of the date hereof, the Company does not expect any impairment loss as a result of such test. The Company will also be required to test the value of its goodwill annually. Subsequent impairment losses, if any, will be reflected as a charge to income in the Company's consolidated statement of earnings in the period they become known. Page 9
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS December 31, 2001 As required by SFAS 142, the results of the prior year quarter have not been restated. The following table presents the quarterly results of the Company on a comparable basis (in thousands, except per share data): For the Three Months Ended December 31, 2001 2000 ------- ------- Net Earnings: As reported $25,870 $20,100 Goodwill amortization, net of tax - 1,697 ------- ------- As adjusted $25,870 $21,797 ======= ======= Basic Earnings Per Share: As reported $ 0.96 $ 0.76 Goodwill amortization, net of tax - 0.06 ------- ------- As adjusted $ 0.96 $ 0.82 ======= ======= Diluted Earnings Per Share: As reported $ 0.94 $ 0.75 Goodwill amortization, net of tax - 0.06 ------- ------- As adjusted $ 0.94 $ 0.81 ======= ======= Page 10
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES December 31, 2001 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. General - ------- The following discussion should be read in conjunction with Management's Discussion and Analysis of Financial Condition and Results of Operations (incorporated by reference from pages C-5 through C-12 of Exhibit 13 to the Company's 2001 Annual Report on Form 10-K). Results of Operations - --------------------- On October 31, 2001, the Company completed the acquisition of McDermott Engineers & Constructors (Canada) Limited (including Delta Catalytic and Delta Hudson Engineering) (collectively, "Delta"). See Note 7 of the Notes to Condensed Consolidated Financial Statements for a discussion of the Delta transaction. The Company's consolidated results of operations for the first quarter ending December 31, 2001 include those of Delta from the date of its acquisition. Also included in the Company's consolidated results of operations during the current fiscal quarter are the operating results of Stork Phase II and GIBB, from the date of their respective acquisitions. Stork Phase II and GIBB were acquired after the first quarter of fiscal 2001. The Company recorded net earnings of $25.9 million, or $0.94 per diluted share, for the three months ended December 31, 2001, compared to net earnings of $20.1 million, or $0.75 per diluted share for the same period last year. Effective October 1, 2001, the Company eliminated the amortization of goodwill in accordance with Statement of Financial Accounting Standard No. 142 "Goodwill and Other Intangible Assets". The results for the prior year first quarter have not been restated. Had goodwill amortization not been recorded in the quarter ended December 31, 2000, net earnings would have been $21.8 million, or $0.81 per diluted share. See Note 8 of the Notes to Condensed Consolidated Financial Statements for additional discussion of SFAS 142. During the three months ended December 31, 2001, total revenues increased by $99.0 million, or 10.7%, to $1,028.2 million, compared to $929.2 million for the same period in fiscal 2001. Approximately 12%, or $126.1 million of revenues during the first quarter of fiscal 2002 were generated by the Delta and GIBB acquisitions. The Company's consolidated revenues during the first quarter of fiscal 2002 were not significantly impacted by the operations of Stork Phase II. Page 11
The following table sets forth the Company's revenues by type of service for the quarter ended December 31 of each fiscal year (in thousands): 2001 2000 % Change ----------------------------------------------------------------- Project Services $ 586,381 $542,502 8.1% Construction 266,545 229,008 16.4% Operations and Maintenance 131,558 128,738 2.2% Process, Scientific and Systems Consulting 43,702 28,934 51.0% ----------------------------------------------------------------- $1,028,186 $929,182 10.7% ================================================================= As a percentage of revenues, direct costs of contracts was 86.6% for the three months ended December 31, 2001, compared to 87.9% for the same period in fiscal 2001. The percentage 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 by the Company. Selling, general and administrative ("SG&A") expenses for the first quarter of fiscal 2002 increased by $17.0 million, or 21.4%, to $96.5 million, compared to $79.5 million for the first quarter of fiscal 2001. The increase of $17.0 million reflects the inclusion of the operations of Delta, GIBB and Stork Phase II, which contributed a total of $9.9 million to SG&A expenses during the current fiscal quarter. Excluding the impact of the acquisitions that were completed after the first quarter of fiscal 2001, and the impact of eliminating goodwill amortization in fiscal 2002, SG&A expenses increased by $9.3 million, or 12.1% during the first quarter of fiscal 2002 compared to the same period last year. As a percentage of revenues, consolidated SG&A expenses for the first quarter of fiscal 2002 increased to 9.4%, compared to 8.6% for the same period last year. During the three months ended December 31, 2001, the Company's operating profit (defined as revenues, less direct costs of contracts and SG&A expenses) increased by $7.8 million, or 23.5%, to $41.0 million, compared to $33.2 million during the three months ended December 31, 2000. The increase in the Company's operating profit for the first quarter of fiscal 2002 as compared to the first quarter of fiscal 2001 was due primarily to increases in business volume combined with a lower ratio of direct costs of contracts to revenues and the elimination of goodwill amortization. During the first quarter of fiscal 2002, interest expense decreased by $0.7 million, or 25.7%, to $2.3 million, compared to interest expense of $3.0 million for the same period last year. The decrease in interest expense in the current fiscal period as compared to last year was due to lower interest rates. At December 31, 2001, the Company had total debt of $186.2 million, compared to $137.8 million at December 31, 2000. During the first quarter ending December 31, 2001, the Company financed the acquisition of Delta by borrowing $47.5 million under a new short-term $50.0 million credit facility. At December 31, 2001 and 2000, outstanding borrowings under the $230.0 million revolving credit facility were $121.5 million at 3.3% and $135.3 million at 7.0%, respectively. Page 12
Backlog Information - ------------------- The following table summarizes the Company's backlog at December 31, 2000 and 1999 (in millions): 2001 2000 -------- -------- Technical professional services $2,785.1 $2,380.0 Total backlog 6,396.5 5,687.0 Liquidity and Capital Resources - -------------------------------- During the three months ended December 31, 2001, the Company's cash and cash equivalents decreased by $4.3 million, to $45.0 million. This compares to a net increase of $14.3 million, to $80.2 million, during the same period in fiscal 2001. During the first quarter of fiscal 2002, the Company experienced net cash inflows from operating and financing activities of $55.5 million and $4.7 million, respectively, offset in part by net cash outflows from investing activities, and the effect on cash of exchange rate changes, of $58.8 million and $5.7 million, respectively. Operations resulted in net cash inflows of $55.5 million during the three months ended December 31, 2001. This compares to a net contribution of $36.9 million during the same period in fiscal 2001. The $18.6 million increase in cash provided by operations in the first quarter of fiscal 2002 as compared to the first quarter of fiscal 2001 was due primarily to an increase in inflows of $14.3 million relating to the timing of cash receipts and payments within the Company's working capital accounts, and an increase of $5.8 million in net earnings, partially offset by a decrease in inflows of $2.1 million relating to the elimination of the amortization of goodwill beginning in the current fiscal year. The Company's investing activities resulted in net cash outflows of $58.8 million during the three months ended December 31, 2001. This compares to net cash inflows of $4.6 million during the same period last year. The net increase of $63.5 million in cash used for investing activities in the first quarter of fiscal 2002 as compared to the first quarter of fiscal 2001 was due primarily to $43.5 million of net cash used for the acquisition of Delta, and increases in net additions to property and equipment, and in other noncurrent assets, of $15.3 million and $7.2 million, respectively. These outflows were partially offset by an increase of $3.1 million in proceeds from sales of marketable securities and investments. The Company's financing activities resulted in net cash inflows of $4.7 million during the three months ended December 31, 2001. This compares to net cash outflows of $28.6 million during the three months ended December 31, 2000. The $33.3 million net increase in cash provided by financing activities in the current period as compared to last year was due primarily to increases in proceeds from long-term and short-term borrowings of $74.7 million and $61.2 million, respectively. These inflows were partially offset by an increase of $104.0 million in the repayments of long-term borrowings. The Company believes it has adequate capital resources to fund its operations in fiscal 2002 and beyond. The Company's consolidated working capital position was $174.7 million at December 31, 2001. As discussed earlier, the Company has a long-term $230.0 million revolving credit facility against which $121.5 million was outstanding at December 31, 2001 in the form of direct borrowings. At December 31, 2001, the Company had $100.1 million available through committed short-term credit facilities, which included the $50.0 million credit facility established for the Delta acquisition. At December 31, 2001, these short-term credit facilities had $64.7 million outstanding in the form of direct borrowings. Page 13
Under its stock repurchase program, the Company is authorized to buy-back up to 3.0 million shares of its common stock in the open market. Repurchases of common stock will be financed from existing credit facilities and available cash balances. Through the end of the first quarter of fiscal 2002, the Company had repurchased a total of 1,866,200 shares of its common stock in the open market at a total cost of $59.0 million. Except for 30,500 shares repurchased during the current quarter at a cost of $2.0 million, all of these treasury shares were eventually reissued for the Company's employee stock purchase and incentive stock plans. Forward-Looking Statements - -------------------------- Statements included in this Management's Discussion and Analysis that are not based on historical facts are "forward-looking statements", as that term is discussed in the Private Securities Litigation Reform Act of 1995. Such statements are based on management's current estimates, expectations and projections about the issues discussed, the industries in which the Company's clients operate and the services the Company provides. By their nature, such forward-looking statements involve risks and uncertainties. The Company has tried, wherever possible, to identify such statements by using words such as "anticipate," "estimate," "expect," "project," "intend," "plan," "believe" and words and terms of similar substance in connection with any discussion of future operating or financial performance. The Company cautions the reader that a variety of factors could cause business conditions and results to differ materially from what is contained in its forward-looking statements including the following: . increase in competition by foreign and domestic competitors; . availability of qualified engineers and other professional staff needed to execute contracts; . the timing of new awards and the funding of such awards; . the ability of the Company to meet performance or schedule guarantees: . cost overruns on fixed, maximum or unit priced contracts; . the outcome of pending and future litigation and governmental proceedings; . the cyclical nature of the individual markets in which the Company's customers operate; and, . the successful closing and/or subsequent integration of any merger or acquisition transaction. The preceding list is not all-inclusive, and the Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Readers of this Management's Discussion and Analysis should also read the Company's most recent Annual Report on Form 10-K for a further description of the Company's business, legal proceedings and other information that describes factors that could cause actual results to differ from such forward-looking statements. Page 14
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. - ----------------------------- (Registrant) By: s/n John W. Prosser, Jr. - ---------------------------------- John W. Prosser, Jr. Senior Vice President, Finance and Administration and Treasurer Date: February 13, 2002 Page 15