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 March 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 May 11, 2001: 26,765,061 Page 1
JACOBS ENGINEERING GROUP INC. INDEX TO FORM 10-Q Page No. -------- Part I - Financial Information Item 1. Financial Statements: Condensed Consolidated Balance Sheets - March 31, 2001 and September 30, 2000 3 Condensed Consolidated Statements of Earnings - Three and Six Months Ended March 31, 2001 and 2000 4 Condensed Consolidated Statements of Comprehensive Income - Three and Six Months Ended March 31, 2001 and 2000 5 Condensed Consolidated Statements of Cash Flows - Six Months Ended March 31, 2001 and 2000 6 Notes to Condensed Consolidated Financial Statements 7 - 9 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 10 - 13 Part II - Other Information Item 4. Submission of Matters to a Vote of Security Holders 14 Signatures 15 Page 2
Part I - FINANCIAL INFORMATION Item 1. Financial Statements JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share information) (Unaudited) <TABLE> <CAPTION> March 31, September 30, 2001 2000 ---------- ------------- <S> <C> <C> ASSETS Current Assets: Cash and cash equivalents $ 97,557 $ 65,848 Receivables 754,809 710,979 Deferred income taxes 60,407 61,968 Prepaid expenses and other 10,617 12,228 - --------------------------------------------------------------------------------- Total current assets 923,390 851,023 - --------------------------------------------------------------------------------- Property, Equipment and Improvements, Net 140,319 150,491 - --------------------------------------------------------------------------------- Other Noncurrent Assets: Goodwill, net 264,471 269,043 Other 121,278 113,819 - --------------------------------------------------------------------------------- Total other noncurrent assets 385,749 382,862 - --------------------------------------------------------------------------------- $1,449,458 $1,384,376 ================================================================================= LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Notes payable $ 4,546 $ 18,460 Accounts payable 233,091 224,063 Accrued liabilities 293,499 274,991 Customers' advances in excess of related revenues 119,171 145,708 Income taxes payable 28,215 20,641 - --------------------------------------------------------------------------------- Total current liabilities 678,522 683,863 - --------------------------------------------------------------------------------- Long-term Debt 160,559 146,820 - --------------------------------------------------------------------------------- Other Deferred Liabilities 63,191 52,946 - --------------------------------------------------------------------------------- Minority Interests 5,150 5,204 - --------------------------------------------------------------------------------- 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, 26,687,800 shares issued at March 31, 2001; 26,386,238 shares issued and outstanding at September 30, 2000 26,688 26,386 Additional paid-in capital 92,755 79,352 Retained earnings 436,661 400,791 Accumulated other comprehensive loss (10,602) (10,515) - --------------------------------------------------------------------------------- 545,502 496,014 Unearned compensation (1,784) (471) Common stock in treasury, at cost (32,000 shares at March 31, 2001) (1,682) - - --------------------------------------------------------------------------------- Total stockholders' equity 542,036 495,543 - --------------------------------------------------------------------------------- $1,449,458 $1,384,376 ================================================================================= </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 and Six Months Ended March 31, 2001 and 2000 (In thousands, except per-share information) (Unaudited) <TABLE> <CAPTION> For the Three Months For the Six Months Ended March 31, Ended March 31, ---------------------- ------------------------ 2001 2000 2001 2000 ---------- -------- ---------- ---------- <S> <C> <C> <C> <C> Revenues $1,009,869 $881,799 $1,939,051 $1,690,887 Costs and Expenses: Direct costs of contracts 888,456 772,310 1,704,982 1,477,668 Selling, general and administrative expenses 86,286 79,281 165,755 152,983 - -------------------------------------------------------------------------------------------------- Operating Profit 35,127 30,208 68,314 60,236 - -------------------------------------------------------------------------------------------------- Other (Expense) Income: Interest income 1,025 663 2,011 1,013 Interest expense (2,863) (2,586) (5,908) (4,689) Miscellaneous income, net 664 677 1,190 1,170 Provision for litigation settlement - - - (38,000) - -------------------------------------------------------------------------------------------------- Total other expense, net (1,174) (1,246) (2,707) (40,506) - -------------------------------------------------------------------------------------------------- Earnings Before Taxes 33,953 28,962 65,607 19,730 Income Tax Expense 12,393 10,862 23,947 7,399 - -------------------------------------------------------------------------------------------------- Net Earnings $ 21,560 $ 18,100 $ 41,660 $ 12,331 ================================================================================================== Net Earnings Per Share: Basic $0.81 $0.69 $1.57 $0.47 Diluted $0.79 $0.69 $1.54 $0.47 ================================================================================================== </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 and Six Months Ended March 31, 2001 and 2000 (In thousands) (Unaudited) <TABLE> <CAPTION> For the Three Months For the Six Months Ended March 31, Ended March 31, ---------------------- ---------------------- 2001 2000 2001 2000 - -------------------------------------------------------------------------------------------------------- <S> <C> <C> <C> <C> Net Earnings $21,560 $18,100 $41,660 $12,331 - -------------------------------------------------------------------------------------------------------- Other Comprehensive (Loss) Income: Unrealized holding (losses) gains on securities (411) 4,230 436 4,905 Less: reclassification adjustment for gains realized in net earnings (732) - (1,230) (900) - -------------------------------------------------------------------------------------------------------- Unrealized (losses) gains on securities, net of reclassification adjustment (1,143) 4,230 (794) 4,005 Foreign currency translation adjustments (141) (2,368) 405 (4,683) - -------------------------------------------------------------------------------------------------------- Other Comprehensive (Loss) Income Before Income Tax Benefit (Expense) (1,284) 1,862 (389) (678) Income Tax Benefit (Expense) Relating to Other Comprehensive (Loss) Income 424 (1,586) 302 (1,499) - -------------------------------------------------------------------------------------------------------- Other Comprehensive (Loss) Income (860) 276 (87) (2,177) - -------------------------------------------------------------------------------------------------------- Total Comprehensive Income $20,700 $18,376 $41,573 $10,154 ======================================================================================================== </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 Six Months Ended March 31, 2001 and 2000 (In thousands) (Unaudited) <TABLE> <CAPTION> 2001 2000 - -------------------------------------------------------------------------------- <S> <C> <C> Cash Flows from Operating Activities: Net earnings $ 41,660 $ 12,331 Adjustments to reconcile net earnings to net cash flows from operations: Depreciation and amortization of property, equipment and improvements 16,479 15,736 Amortization of goodwill 3,635 3,510 Gains on sales of assets (1,564) (2,313) Changes in assets and liabilities, excluding the effects of businesses acquired: Receivables (42,984) (27,004) Prepaid expenses and other current assets 1,666 (3,562) Accounts payable 9,142 3,641 Accrued liabilities 15,946 (4,890) Customers' advances (26,463) (6,714) Income taxes payable 10,139 (5,869) Deferred income taxes 1,562 (1,824) Other, net 222 236 - -------------------------------------------------------------------------------- Net cash provided by (used for) operating activities 29,440 (16,722) - -------------------------------------------------------------------------------- Cash Flows from Investing Activities: Acquisitions of business, net of cash acquired - (26,084) Additions to property and equipment, net of disposals (6,554) (21,174) Proceeds from sales of marketable securities and investments 1,666 2,878 Purchases of marketable securities and investments (3,722) (1,655) Net (increase) decrease in other noncurrent assets (4,052) 905 - -------------------------------------------------------------------------------- Net cash used for investing activities (12,662) (45,130) - -------------------------------------------------------------------------------- Cash Flows from Financing Activities: Proceeds from long-term borrowings 42,000 77,481 Repayments of long-term borrowings (26,522) (15,603) Net change in short-term borrowings (13,859) (1,213) Exercises of stock options 8,436 8,036 Purchases of common stock for treasury (3,892) (8,152) Change in other deferred liabilities 9,074 (2,229) - -------------------------------------------------------------------------------- Net cash provided by financing activities 15,237 58,320 - -------------------------------------------------------------------------------- Effect of Exchange Rate Changes (306) (2,101) - -------------------------------------------------------------------------------- Increase (Decrease) in Cash and Cash Equivalents 31,709 (5,633) Cash and Cash Equivalents at Beginning of Period 65,848 53,482 - -------------------------------------------------------------------------------- Cash and Cash Equivalents at End of Period $ 97,557 $ 47,849 ================================================================================ </TABLE> See the accompanying Notes to Condensed Consolidated Financial Statements. Page 6
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 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 March 31, 2001 and September 30, 2000, its consolidated results of operations for the three and six months ended March 31, 2001 and 2000, its consolidated comprehensive income for the three and six months ended March 31, 2001 and 2000, and its consolidated cash flows for the six months ended March 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 March 31, 2001 and September 30, 2000 were recoverable amounts under contracts in progress of $394,678,200 and $371,997,400, 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 March 31, 2001 and September 30, 2000 (in thousands): March 31, September 30, 2001 2000 -------------------------------------------------------------------------- Land $ 7,972 $ 11,579 Buildings 55,081 59,369 Equipment 216,545 201,896 Leasehold improvements 15,072 19,755 Construction in progress 13,126 11,497 -------------------------------------------------------------------------- 307,796 304,096 Accumulated depreciation and amortization (167,477) (153,605) -------------------------------------------------------------------------- $ 140,319 $ 150,491 ========================================================================== Page 7
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 4. Other noncurrent assets consisted of the following at March 31, 2001 and September 30, 2000 (in thousands): March 31, September 30, 2001 2000 -------------------------------------------------------------- Prepaid pension costs $ 18,735 $ 16,795 Reimbursable pension costs 9,764 11,691 Cash surrender value of life insurance policies 40,675 35,762 Investments 30,196 27,496 Notes receivable 10,476 11,847 Miscellaneous 11,432 10,228 -------------------------------------------------------------- $121,278 $113,819 ============================================================== 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): Three Months Ended Six Months Ended March 31, March 31, ------------------ ------------------ 2001 2000 2001 2000 -------- -------- -------- -------- Weighted average shares outstanding (denominator used to compute basic EPS) 26,506 26,073 26,469 26,104 Effect of employee and outside director stock options 643 196 575 234 ------ ------ ------ ------ Denominator used to compute diluted EPS 27,149 26,269 27,044 26,338 ====== ====== ====== ====== 6. During the six months ended March 31, 2001 and 2000, the Company made cash payments of approximately $5,732,300 and $4,947,500, respectively, for interest and $12,982,300 and $15,241,400, respectively, for income taxes. Page 8
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS March 31, 2001 7. On February 23, 2001, the Company finalized the second phase of the two- part transaction to acquire the engineering and contracting business of Stork N.V., the Netherlands ("Stork"). The first phase was completed on February 16, 2000 and included Stork's operations in Belgium, Germany, Southeast Asia and certain offices in the Netherlands. The second phase involved the balance of Stork's engineering and construction management operations in the Netherlands and the Middle East. The first phase was completed for a total purchase price of EUR 25.0 million (approximately $24.2 million). The purchase price was financed in part by long-term borrowings of EUR 15.0 million (approximately $14.8 million) under an existing $230.0 million revolving credit facility. The purchase price for the second phase of the Stork transaction was not material. For more information about the Stork transaction, readers of this Form 10-Q should refer to Note 3 to the Company's 2000 Consolidated Financial Statements included as Exhibit 13 to its 2000 Annual Report on Form 10-K. 8. On May 3, 2001, the Company completed the purchase of substantially all of the international engineering and construction management business of LawGibb Group Inc. (such businesses operating under the name of "Gibb"). The total purchase price was approximately $34.5 million in cash, and was financed with a combination of internal funds and borrowings made under the Company's $230.0 million revolving credit facility. With annual revenues of approximately $100.0 million, Gibb is a leading international engineering consultancy firm, providing professional technical services in the fields of transportation, civil and structural engineering, water and wastewater, environmental and geotechnical services, infrastructure, building and building services, information technology, defense, finance, and commerce. The businesses acquired conduct operations located primarily in the U.K., southern Africa, and certain other countries located primarily in Europe. Page 9
JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES March 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 E-5 through E-12 of Exhibit 13 to the Company's 2000 Annual Report on Form 10-K). Results of Operations - --------------------- On February 23, 2001, the Company finalized the second phase of a two-part transaction to acquire the engineering and contracting business of Stork N.V., the Netherlands ("Stork"). The first phase was completed on February 16, 2000. The Company's consolidated results of operations for the first half of fiscal 2001 and 2000 are not significantly impacted by Stork's operations. See Note 7 of the Notes to Condensed Consolidated Financial Statements for additional discussion of the Stork transaction. The Company recorded net earnings of $21.6 million, or $0.79 per diluted share, for the three months ended March 31, 2001, compared to net earnings of $18.1 million, or $0.69 per diluted share for the same period last year. For the six months ended March 31, 2001, the Company recorded net earnings of $41.7 million, or $1.54 per diluted share, compared to net earnings of $12.3 million, or $0.47 per diluted share, for the same period last year. Net earnings during the first half of fiscal 2000 included a pre-tax provision for litigation settlement of $38.0 million ($23.7 million after-tax). This special, one-time pre-tax charge, consisting of the settlement amount of $35.0 million and related litigation costs of $3.0 million, resulted from an agreement with the United States Department of Justice to settle a previously disclosed whistleblower suit. The settlement was paid in March 2000 and has no continuing impact on the Company's operating results. Excluding the after-tax impact of this special litigation charge, the Company's operations during the first half of fiscal 2000 resulted in pro forma net earnings of $36.1 million, or $1.37 per diluted share. During the three months ended March 31, 2001, total revenues increased by $128.1 million, or 14.5%, to $1.0 billion, compared to $881.8 million for the same period in fiscal 2000. During the first half of fiscal 2001, total revenues increased by $248.2 million, or 14.7%, to $1.9 billion, compared to $1.7 billion for the first half of fiscal 2000. Revenues from project services activities, which includes design, engineering and agency construction management services, increased by $86.0 million, or 18.3%, to $555.0 million during the second quarter of fiscal 2001, compared to $469.0 million for the same period last year. For the six months ended March 31, 2001, revenues from project services activities increased by $211.2 million, or 23.8%, to $1.1 billion, compared to $886.3 million for the same period in fiscal 2000. Page 10
Revenues from construction services increased by $47.1 million, or 19.4%, to $289.5 million during the second quarter of fiscal 2001, compared to $242.4 million for the same period last year. Revenues from construction services during the first half of fiscal 2001 increased by $39.3 million, or 8.2%, to $518.5 million, compared to $479.2 million during the same period last year. During the second quarter of fiscal 2001, revenues from operations and maintenance ("O&M") activities decreased by $8.2 million, or 5.8%, to $133.6 million, compared to $141.8 million during the second quarter of fiscal 2000. For the six months ended March 31, 2001, revenues from O&M activities decreased by $7.7 million, or 2.9%, to $262.3 million, compared to $270.0 million for the same period in fiscal 2000. Revenues from process, scientific and systems consulting services increased by $3.2 million, or 11.0%, to $31.8 million during the three months ended March 31, 2001, compared to $28.6 million for the same period last year. During the first half of fiscal 2001, revenues from process, scientific and systems consulting services increased by $5.3 million, or 9.6%, to $60.7 million, compared to $55.4 million for the same period last year. As a percentage of revenues, direct costs of contracts was 88.0% and 87.9%, respectively, for the three and six months ended March 31, 2001, compared to 87.6% and 87.4% for the same periods in fiscal 2000. 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 second quarter of fiscal 2001 increased by $7.0 million, or 8.8%, to $86.3 million, compared to $79.3 million for the second quarter of fiscal 2000. For the first half of fiscal 2001, SG&A expenses increased by $12.8 million, or 8.4%, to $165.8 million, compared to $153.0 million for the same period last year. As a percentage of revenues, SG&A expenses for the three and six months ended March 31, 2001 decreased to 8.54% and 8.55%, respectively, compared to 8.99% and 9.05%, respectively, for the same period last year, reflecting the Company's continuing efforts to control costs. During the second quarter ended March 31, 2001, the Company's operating profit (defined as revenues, less direct costs of contracts and SG&A expenses) increased by $4.9 million, or 16.3%, to $35.1 million, compared to $30.2 million during the same period last year. For the first half of fiscal 2001, the Company's operating profit increased by $8.1 million, or 13.4%, to $68.3 million, compared to $60.2 million during the same period last year. The increases in the Company's operating profit for the second quarter and first half of fiscal 2001 as compared to the same periods in fiscal 2000 were due primarily to significant increases in business volume and reduced SG&A expenses as a percentage of revenues. During the second quarter of fiscal 2001, interest expense increased by 10.7%, or $0.3 million, to $2.9 million, compared to $2.6 million for the same period last year. For the six months ended March 31, 2001, interest expense increased by 26.0%, or $1.2 million, to $5.9 million, compared to $4.7 million for the same period last year. Page 11
Backlog Information - ------------------- The following table summarizes the Company's backlog at March 31, 2001 and 2000 (in millions): 2001 2000 -------- -------- Professional technical services $2,563.2 $1,997.7 Total backlog 5,880.0 4,426.6 Liquidity and Capital Resources - ------------------------------- During the six months ended March 31, 2001, the Company's cash and cash equivalents increased by $31.7 million, to $97.6 million. This compares to a net decrease of $5.6 million, to $47.8 million, during the same period in fiscal 2000. During the first half of fiscal 2001, the Company experienced net cash inflows from operating and financing activities of $29.4 million and $15.2 million, respectively, offset in part by net cash outflows from investing activities and the effect on cash of exchange rate changes, of $12.7 million and $0.3 million, respectively. Operations resulted in net cash inflows of $29.4 million during the six months ended March 31, 2001. This compares to a net cash outflow of $16.7 million during the same period in fiscal 2000. The $46.2 million increase in cash provided by operations in the first half of fiscal 2001 as compared to the first half of fiscal 2000 was due primarily to an increase of $29.3 million in net earnings, and increases in inflows of $11.8 million and $3.4 million, respectively, relating to the timing of cash receipts and payments within the Company's working capital accounts and to deferred income taxes, respectively. The Company's investing activities resulted in net cash outflows of $12.7 million during the six months ended March 31, 2001. This compares to net cash outflows of $45.1 million during the same period last year. The net decrease of $32.4 million in cash used for investing activities in the first half of fiscal 2001 as compared to the first half of fiscal 2000 was due primarily to decreases in cash outflows of $26.1 million and $14.6 million, respectively, relating to acquisitions of business, net of cash acquired, and to additions to property and equipment, net of disposals, partially offset by an increase of $5.0 million in other noncurrent assets. The Company's financing activities resulted in net cash inflows of $15.2 million during the six months ended March 31, 2001. This compares to net cash inflows of $58.3 million during the six months ended March 31, 2000. The $43.1 million net decrease in cash provided by financing activities in the current period as compared to last year was due primarily to decreases of $46.4 million in long- term borrowings and $12.6 million in short-term borrowings. These reductions in borrowings were partially offset by an increase of $11.3 million in the change in other deferred liabilities, and a decrease of $4.3 million in the purchases of common stock for treasury. The Company believes it has adequate capital resources to fund its operations for the remainder of fiscal 2001 and beyond. The Company's consolidated working capital position was $244.9 million at March 31, 2001. As discussed earlier, the Company has a long-term $230.0 million revolving credit facility against which $160.6 million was outstanding at March 31, 2001 in the form of direct borrowings. At March 31, 2001, the Company had $49.5 million available through committed short-term credit facilities, of which $20.5 million was outstanding at that date in the form of direct borrowings and letters of credit. Page 12
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. From the program's inception in December 1999 through March 31, 2001, the Company had repurchased a total of 1,742,900 shares of its common stock at a total cost of $51.3 million. During the first half of fiscal 2001, the Company repurchased 85,800 shares of its common stock at a total cost of 3.9 million. Except for 32,000 shares of its common stock repurchased during the current quarter ending March 31, 2001, 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 Quarterly Report on Form 10-Q 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. These 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 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. These factors include, but are not necessarily limited to, 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 for 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 investigations and proceedings; the cyclical nature of the individual markets in which the Company's customers operate; the successful closing and/or subsequent integration of any merger or acquisition transaction; and, the amount of any contingent consideration the Company may be required to pay in the future in connection with the Sverdrup merger (including the availability of financing that may be required). 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 Form 10-Q 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 13
PART II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The Company's 2001 Annual Meeting of Shareholders was held at the Company's headquarters on February 13, 2001, as previously announced in its Notice of Annual Meeting of Shareholders and Proxy Statement dated January 8, 2001, copies of which have been filed with the Commission pursuant to Regulation 14A. There were four matters voted upon by the stockholders at the Annual Meeting. Those matters were: 1. To elect a slate of directors as nominated in the proxy statement (Peter H. Dailey, Robert C. Davidson, Jr., Robert B. Gwyn, Dr. Linda K. Jacobs, and Benjamin F. Montoya); 2. To approve an amendment to the Company's 1989 Employee Stock Purchase Plan to provide for a 2,000,000 share increase in the number of shares reserved for the Plan; 3. To approve an amendment of the Certificate of Incorporation to increase the authorized common stock to 100,000,000 shares; and, 4. To approve the appointment of Ernst & Young LLP as independent auditors for the year ending September 30, 2001. The results of the shareholder voting were as follows (all shares voted were voted by proxy): <TABLE> <CAPTION> Votes Against Broker Votes For or Withheld Abstentions Non-votes -------------- ------------- ----------- ----------- <S> <C> <C> <C> <C> 1. Election of Directors: Peter H. Dailey 23,671,521 61,720 -0- -0- Robert C. Davidson, Jr. 23,672,875 60,366 -0- -0- Robert B. Gwyn 23,672,888 60,353 -0- -0- Linda K. Jacobs 23,673,436 59,805 -0- -0- Benjamin F. Montoya, Jr. 23,671,846 61,395 -0- -0- 2. Approval of Amendment to the Company's 1989 Employee Stock Purchase Plan 19,742,276 1,585,138 39,357 2,366,470 3. Approval of Amendment to the Certificate of Incorporation 22,096,775 1,611,420 25,046 -0- 4. Ratification of the Appointment of Ernst & Young LLP as independent auditors 23,710,801 13,238 9,202 -0- </TABLE> The Directors who did not stand for election at the Annual Meeting and whose terms of office continued after the Annual Meeting were: Drs. Joseph J. Jacobs, James Clayburn LaForce and Dale R. Laurance; Messrs. Noel G. Watson, Richard E. Beumer, David M. Petrone and James L. Rainey, Jr.; and Ms. Linda Fayne Levinson. 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: May 14, 2001 Page 15