10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Quarterly Report on

FORM 10-Q

(Mark one)

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

For the quarterly period ended December 26, 2014

oTransition 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)
155 North Lake Avenue, Pasadena, California	91101
(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    o  No

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

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

Large accelerated filer	x	Accelerated filer	o
Non-accelerated filer	o	Smaller reporting company	o

Indicate by check-mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). 

o  Yes   x  No

Number of shares of common stock outstanding at January 28, 2015: 128,304,631

JACOBS ENGINEERING GROUP INC.

INDEX TO FORM 10-Q

			Page No.
PART I	FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets	3
		Consolidated Statements of Earnings - Unaudited	4
		Consolidated Statements of Comprehensive Income - Unaudited	5
		Consolidated Statements of Cash Flows - Unaudited	6
		Notes to Consolidated Financial Statements - Unaudited	8
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	21
	Item 4.	Controls and Procedures	22
PART II	OTHER INFORMATION
	Item 1.	Legal Proceedings	22
	Item 1A.	Risk Factors	22
	Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	23
	Item 4	Mine Safety Disclosure	23
	Item 6.	Exhibits	24
		SIGNATURES

Part I - FINANCIAL INFORMATION

Item 1. Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share information)

	December 26, 2014			September 26, 2014
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$	670,081		$	732,647
Receivables	2,733,511			2,867,555
Deferred income taxes	168,426			169,893
Prepaid expenses and other	113,766			121,976
Total current assets	3,685,784			3,892,071
Property, Equipment and Improvements, Net	447,144			456,797
Other Noncurrent Assets:
Goodwill	3,046,706			3,026,349
Intangibles	414,114			440,192
Miscellaneous	648,900			638,250
Total other non-current assets	4,109,720			4,104,791
	$	8,242,648		$	8,453,659
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable	$	44,332		$	36,732
Accounts payable	532,964			622,875
Accrued liabilities	1,226,985			1,279,556
Billings in excess of costs	417,407			410,683
Income taxes payable	16,967			—
Total current liabilities	2,238,655			2,349,846
Long-term Debt	706,610			764,075
Other Deferred Liabilities	824,700			834,078
Commitments and Contingencies
Stockholders’ Equity:
Capital stock:
Preferred stock, $1 par value, authorized - 1,000,000 shares; issued and outstanding - none	—			—
Common stock, $1 par value, authorized - 240,000,000 shares; issued and outstanding—129,476,076 shares and 131,752,768 shares, respectively	129,476			131,753
Additional paid-in capital	1,170,721			1,173,858
Retained earnings	3,539,510			3,527,193
Accumulated other comprehensive loss	(401,504		)	(363,549		)
Total Jacobs stockholders’ equity	4,438,203			4,469,255
Noncontrolling interests	34,480			36,405
Total Group stockholders’ equity	4,472,683			4,505,660
	$	8,242,648		$	8,453,659

See the accompanying Notes to Consolidated Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

For the Three Months Ended December 26, 2014 and December 27, 2013

(In thousands, except per share information)

(Unaudited)

	For the Three Months Ended
	December 26, 2014			December 27, 2013
Revenues	$	3,187,005		$	3,068,891
Costs and Expenses:
Direct cost of contracts	(2,667,559		)	(2,615,200		)
Selling, general and administrative expenses	(361,223		)	(308,644		)
Operating Profit	158,223			145,047
Other Income (Expense):
Interest income	2,276			1,796
Interest expense	(5,318		)	191
Miscellaneous expense	(486		)	(113		)
Total other income (expense), net	(3,528		)	1,874
Earnings Before Taxes	154,695			146,921
Income Tax Expense	(48,500		)	(47,972		)
Net Earnings of the Group	106,195			98,949
Net Earnings Attributable to Noncontrolling Interests	(6,116		)	(5,217		)
Net Earnings Attributable to Jacobs	$	100,079		$	93,732
Net Earnings Per Share:
Basic	$	0.78		$	0.72
Diluted	$	0.77		$	0.71

See the accompanying Notes to Consolidated Financial Statements including the Company's note on Other Comprehensive Income for a presentation of amounts reclassified to net earnings during the period.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Three Months Ended December 26, 2014 and December 27, 2013

(In thousands)

(Unaudited)

	For the Three Months Ended
	December 26, 2014			December 27, 2013
Net Earnings of the Group	$	106,195		$	98,949
Other Comprehensive Income (Loss):
Foreign currency translation adjustment	(48,373		)	(9,255		)
Gain (loss) on cash flow hedges	(1,919		)	551
Change in pension liabilities	14,643			(6,736		)
Other comprehensive loss before taxes	(35,649		)	(15,440		)
Income Tax Benefit (Expense):
Foreign currency translation adjustments	—			3,250
Cash flow hedges	622			(198		)
Change in pension liabilities	(2,928		)	1,749
Income Tax Benefit (Expense)	(2,306		)	4,801
Net Other Comprehensive Loss	(37,955		)	(10,639		)
Net Comprehensive Income of the Group	68,240			88,310
Net Comprehensive Income Attributable to      Noncontrolling Interests	(6,116		)	(5,217		)
Net Comprehensive Income Attributable to Jacobs	$	62,124		$	83,093

See the accompanying Notes to Consolidated Financial Statements including the Company's note on Other Comprehensive Income for a presentation of amounts reclassified to net earnings during the period.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended December 26, 2014 and December 27, 2013 (In thousands) (Unaudited)
	December 26, 2014			December 27, 2013
Cash Flows from Operating Activities:
Net earnings attributable to the Group	$	106,195		$	98,949
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization:
Property, equipment and improvements	26,006			19,649
Intangible assets	12,981			8,637
Stock based compensation	16,504			15,263
Tax deficiency (benefit) from stock based compensation	(279		)	67
Equity in earnings of operating ventures, net	(4,616		)	(2,296		)
Change in pension plan obligations	(154		)	1,219
Change in deferred compensation plans	(1,450		)	(1,875		)
(Gains) losses on sales of assets, net	(22		)	212
Changes in certain assets and liabilities, excluding the effects of businesses acquired:
Receivables	65,538			191,263
Prepaid expenses and other current assets	5,230			5,121
Accounts payable	(80,520		)	(104,583		)
Accrued liabilities	(33,198		)	(5,087		)
Billings in excess of costs	23,948			56,954
Income taxes payable	14,543			35,503
Deferred income taxes	(2,602		)	(3,739		)
Other deferred liabilities	(9,162		)	4,698
Other, net	29			6,525
Net cash provided by operating activities	138,971			326,480
Cash Flows from Investing Activities:
Additions to property and equipment	(33,775		)	(37,948		)
Disposals of property and equipment	3,374			71
Purchases of investments	—			(25,476		)
Sales of investments	13			—
Acquisitions of businesses, net of cash acquired	—			(1,132,933		)
Net cash used for investing activities	(30,388		)	(1,196,286		)

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Months Ended December 26, 2014 and December 27, 2013 (In thousands) (Unaudited) (Continued)
	December 26, 2014			December 27, 2013
Cash Flows from Financing Activities:
Proceeds from long-term borrowings	308,446			629,373
Repayments of long-term borrowings	(345,660		)	(8,646		)
Proceeds from short-term borrowings	112,638			45,596
Repayments of short-term borrowings	(103,187		)	(45,773		)
Proceeds from issuances of common stock	8,029			9,587
Common stock repurchases	(113,708		)	—
Tax (deficiency) benefit from stock based compensation	279			(67		)
Distributions to noncontrolling interests	(7,230		)	(1,986		)
Net cash provided by (used for) financing activities	(140,393		)	628,084
Effect of Exchange Rate Changes	(30,756		)	(3,447		)
Net Decrease in Cash and Cash Equivalents	(62,566		)	(245,169		)
Cash and Cash Equivalents at the Beginning of the Period	732,647			1,256,405
Cash and Cash Equivalents at the End of the Period	$	670,081		$	1,011,236

See the accompanying Notes to Consolidated Financial Statements.

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

December 26, 2014

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 ("U.S. GAAP") 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 September 26, 2014 ("2014 Form 10-K") as well as Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is also included in our 2014 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 December 26, 2014, and for the three month periods ended December 26, 2014 and December 27, 2013.

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

Please refer to Note 16 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K for the definitions of certain terms used herein.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires us to employ estimates and make assumptions that affect the reported amounts of certain assets and liabilities; the revenues and expenses reported for the periods covered by the accompanying consolidated financial statements; and certain amounts disclosed in these Notes to the Consolidated Financial Statements. Although such estimates and assumptions are based on management's most recent assessment of the underlying facts and circumstances utilizing the most current information available and past experience, actual results could differ significantly from those estimates and assumptions. Our estimates, judgments, and assumptions are evaluated periodically and adjusted accordingly. Please refer to Note 2 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K for a discussion of the significant estimates and assumptions affecting our consolidated financial statements.

Fair Value and Fair Value Measurements

Certain amounts included in the accompanying consolidated financial statements are presented at "fair value". Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as of the date fair value is determined (the "measurement date"). When determining fair value, we consider the principal or most advantageous market in which we would transact, and we consider only those assumptions we believe a typical market participant would consider when pricing an asset or liability. In measuring fair value, we use the following inputs in the order of priority indicated:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices in active markets included in Level 1, such as (i) quoted prices for similar assets or liabilities; (ii) quoted prices in markets that have insufficient volume or infrequent transactions (i.e., less active markets); and (iii) model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data for substantially the full term of the asset or liability.

Page 8

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

December 26, 2014

(continued)

Level 3 - Unobservable inputs to the valuation methodology that are significant to the fair value measurement.

Please refer to Note 2 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K for a more complete discussion of the various items within the consolidated financial statements measured at fair value and the methods used to determine fair value.

New Accounting Standards

From time to time, the Financial Accounting Standards Board ("FASB") issues accounting standards updates (each being an "ASU") to its Accounting Standards Codification ("ASC"), which constitutes the primary source of U.S. GAAP. The Company regularly monitors ASUs as they are issued and considers their applicability to its business. All ASUs applicable to the Company are adopted by the due date and in the manner prescribed by the FASB.

Business Combinations

On December 13, 2013, the Company acquired all of the outstanding interests in Sinclair Knight Merz Management Pty Limited and Sinclair Knight Merz Holdings Limited (collectively, "SKM"), a provider of engineering, design, procurement, construction and project management services, from the SKM shareholders. The Company purchased SKM for approximately $1.2 billion in cash. SKM's results of operations have been included in the Company's consolidated results of operations since the date of acquisition. The acquisition agreement includes customary representations, warranties, and indemnities supported by an escrow account.

During the first quarter of fiscal 2015, we completed the final purchase price allocation of SKM. The Company recorded a number of adjustments affecting, among other things, the balance sheet position of several major projects; the estimated liabilities relating to acquired professional liability exposures; and other adjustments.

The following table presents the final purchase price allocation for SKM (in thousands):

Assets:
Cash and cash equivalents	$	152,051
Receivables and other current assets	371,331
Property and equipment, and other	71,630
Intangible assets	202,166
Total assets	797,178
Liabilities:
Current liabilities	351,351
Deferred tax liability	72,656
Long-term liabilities	20,416
Total liabilities	444,423
Net identifiable assets acquired	352,755
Goodwill	866,919
Net assets acquired	$	1,219,674

Page 9

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

December 26, 2014

(continued)

The following table presents the values assigned to the acquired SKM intangible assets (in thousands):

Customer relationships / backlog	$	193,260
Trade name	8,906
	$	202,166

The useful lives of the intangible assets acquired from SKM range from 3 to 12 years.

Some of the factors contributing to the recognition of goodwill include: (i) access to a large, highly-trained and stable workforce; (ii) the opportunity to expand our client base in Australia, Asia, South America and the U.K.; (iii) the opportunity to expand our presence in multiple industries, including: mining, infrastructure, buildings, water and energy; and (iv) the opportunity to achieve operating synergies.

During fiscal year 2014, the Company also acquired Federal Network Services LLC ("FNS", formerly a subsidiary of Verizon), Eagleton Engineering, LLC, FMHC Corporation, Stobbarts (Nuclear) Limited, Trompeter Enterprises, and MARMAC Field Services, Inc. The results of operations of these other acquisitions, individually or in the aggregate, were not material to the Company's consolidated results for fiscal 2014. During fiscal 2014, we also acquired an additional 15% interest in Jacobs, Zamel and Turbag Consulting Engineers Company ("ZATE"), a refining, chemicals, infrastructure and civil engineering company headquartered in Al Khobar, Saudi Arabia. This transaction brought the Company's ownership in ZATE to 75%.

Receivables

The following table presents the components of "Receivables" appearing in the accompanying Consolidated Balance Sheets at December 26, 2014 and September 26, 2014 as well as certain other related information (in thousands):

	December 26, 2014		September 26, 2014
Components of receivables:
Amounts billed	$	1,431,225	$	1,425,341
Unbilled receivables and other	1,219,207		1,368,482
Retentions receivable	83,079		73,732
Total receivables, net	$	2,733,511	$	2,867,555
Other information about receivables:
Amounts due from the United States federal government,     included above, net of advanced billings	$	377,088	$	324,928
Claims receivable	$	50,972	$	78,634

Billed receivables consist of amounts invoiced to clients in accordance with the terms of our client contracts and are shown net of an allowance for doubtful accounts. We anticipate that substantially all of such billed amounts will be collected over the next twelve months.

Unbilled receivables and retentions receivable 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. We anticipate that substantially all of such unbilled amounts will be billed and collected over the next twelve months.

Claims receivable are included in "Receivables" in the accompanying Consolidated Balance Sheets and represent certain 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.

Page 10

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

December 26, 2014

(continued)

Property, Equipment and Improvements, Net

Property, Equipment and Improvements, Net in the accompanying Consolidated Balance Sheets at December 26, 2014 and September 26, 2014 consisted of the following (in thousands):

	December 26, 2014			September 26, 2014
Land	$	21,095		$	21,497
Buildings	126,885			128,584
Equipment	630,032			634,415
Leasehold improvements	292,816			287,814
Construction in progress	13,853			20,059
	1,084,681			1,092,369
Accumulated depreciation and amortization	(637,537		)	(635,572		)
	$	447,144		$	456,797

Long-term Debt

Jacobs and certain of its subsidiaries have a $1.6 billion long-term unsecured, revolving credit facility (the "2014 Facility") with a syndicate of large, U.S. and international banks and financial institutions. The 2014 Facility also provides an accordion feature that allows the Company and the lenders to increase the facility amount to $2.1 billion. The 2014 Facility did not change interest rates for borrowings outstanding under the the Company's prior credit facility, but did reduce the fees on the unused portion of the facility.

The total amount outstanding under the 2014 Facility in the form of direct borrowings at December 26, 2014 was $706.6 million. The Company has issued $2.8 million in letters of credit under the 2014 Facility leaving $890.6 million of available borrowing capacity under the 2014 Facility at December 26, 2014. In addition, the Company had $292.4 million issued under separate, committed and uncommitted letter-of-credit facilities for total issued letters of credit of $295.2 million at December 26, 2014.

The 2014 Facility expires inFebruary 2019and permits the Company to borrow undertwoseparate tranches in U.S. dollars, certain specified foreign currencies, and any other currency that may be approved in accordance with the terms of the 2014 Facility. Depending on the Company's Consolidated Leverage Ratio, borrowings under the 2014 Facility will bear interest at either a eurocurrency rate plus a margin of between1.0%and1.5%or a base rate plus a margin of between0%and0.5%. The 2014 Facility also provides for a financial letter of credit subfacility of $300.0 million, permits performance letters of credit, and provides for a $50.0 million subfacility for swingline loans. Letters of credit are subject to fees based on the Company's Consolidated Leverage Ratio at the time any such letter of credit is issued. The Company pays a facility fee of between 0.100% and 0.250% per annum depending on the Company's Consolidated Leverage Ratio. Amounts outstanding under the 2014 Facility may be prepaid at the option of the Company without premium or penalty, subject to customary breakage fees in connection with the prepayment of eurocurrency loans. The 2014 Facility contains affirmative, negative, and financial covenants customary for financings of this type including, among other things, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales and transactions with affiliates. Inaddition, the 2014 Facility contains customary events of default. We were in compliance with our debt covenants atDecember 26, 2014.

Revenue Accounting for Contracts / Accounting for Joint Ventures

In general, we recognize revenue 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. For multiple contracts with a single customer we account for each contract separately. We also recognize as revenues, costs associated with claims and unapproved change orders to the extent it is probable that such claims and change orders will result in additional contract revenue, and the amount

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

December 26, 2014

(continued)

of such additional revenue can be reliably estimated. A significant portion of the Company's revenue is earned on cost reimbursable contracts. The percentage of revenues realized by the Company by type of contract during fiscal 2014 can be found in Note 1 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K.

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 allowable under the terms of the contract, we estimate the amount of such nonbillable costs and adjust our revenues accordingly.

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

The following table sets forth pass-through costs included in revenues for each of the three months ended December 26, 2014 and December 27, 2013 (in thousands):

	For the Three Months Ended
	December 26, 2014		December 27, 2013
Pass-through costs included in revenues	$	706,830	$	752,023

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

Certain of our joint ventures meet the definition of a "variable interest entity" ("VIE"). As defined in U.S. GAAP, a VIE is a legal entity in which equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack any one of the following three characteristics: (i) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entity's economic performance; (ii) the obligation to absorb the expected losses of the legal entity; or (iii) the right to receive the expected residual returns of the legal entity. Accordingly, entities issuing consolidated financial statements (i.e., a "reporting entity") shall consolidate a VIE if the reporting entity has a "controlling financial interest" in the VIE, as demonstrated by the reporting entity having both (i) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance; and (ii) the right to receive benefits from the VIE that could potentially be significant to the VIE or the obligation to absorb losses of the VIE that could potentially be significant to the VIE.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

December 26, 2014

(continued)

In evaluating our VIEs for possible consolidation, we perform a qualitative analysis to determine whether or not we have a "controlling financial interest" in the VIE as defined by U.S. GAAP. We consolidate only those VIEs over which we have a controlling financial interest. For the Company’s unconsolidated joint ventures, we use the equity method of accounting. The Company does not currently participate in any significant VIEs in which it has a controlling financial interest.

Disclosures About Defined Pension Benefit Obligations

The following table presents the components of net periodic benefit cost recognized in earnings during each of the three months ended December 26, 2014 and December 27, 2013 (in thousands):

	For the Three Months Ended
Component:	December 26, 2014			December 27, 2013
Service cost	$	8,576		$	10,413
Interest cost	16,658			19,892
Expected return on plan assets	(21,049		)	(22,340		)
Amortization of previously unrecognized items	5,410			4,803
Settlement Loss	59			140
Net periodic benefit cost	$	9,654		$	12,908

Included in the above table are amounts relating to a U.S. pension plan, the participating employees of which are assigned to, and work exclusively on, a specific operating contract with the U.S. federal government. It is the expectation of the parties to this contract that the cost of this pension plan will be fully reimbursed by the U.S. federal government pursuant to applicable cost accounting standards. The underfunded amount for this pension plan is included in "Other Noncurrent Assets" in the accompanying Consolidated Balance Sheets at December 26, 2014. Net periodic pension costs for this pension plan for the three months ended December 26, 2014 and December 27, 2013 were $1.5 million and $1.9 million, respectively. Amounts related to the amortization of previously unrecognized items for this pension plan for the three months ended December 26, 2014 and December 27, 2013 were approximately zero.

The following table presents certain information regarding Company cash contributions to our pension plans for fiscal 2015 (in thousands):

Cash contributions made during the first three months of fiscal 2015	$	9,808
Cash contributions we expect to make during the remainder of fiscal 2015	36,396
Total	$	46,204

Other Comprehensive Income

The following table presents amounts reclassified from change in pension liabilities in other comprehensive income to direct cost of contracts and selling, general and administrative expenses in the Company's Consolidated Statements of Earnings for the three months ended December 26, 2014 and December 27, 2013 related to the Company's defined benefit pension plans (in thousands):

	For the Three Months Ended
	December 26, 2014			December 27, 2013
Amortization of Defined Benefit Items:
Actuarial losses	$	(5,410	)	$	(4,804	)
Prior service cost	24			(25		)
Total Before Income Tax	(5,386		)	(4,829		)
Income Tax Benefit	1,508			1,365
Total Reclassifications, After-tax	$	(3,878	)	$	(3,464	)

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

December 26, 2014

(continued)

Earnings Per Share and Certain Related Information

The following table (i) reconciles the denominator used to compute basic earnings per share ("EPS") to the denominator used to compute diluted EPS for the three months ended December 26, 2014 and December 27, 2013; (ii) provides information regarding the number of non-qualified stock options and shares of restricted stock that were antidilutive and therefore disregarded in calculating the weighted average number of shares outstanding used in computing diluted EPS; and (iii) provides the number of shares of common stock issued from the exercise of stock options and the release of restricted stock (in thousands):

	For the Three Months Ended
	December 26, 2014	December 27, 2013
Shares used to calculate EPS:
Weighted average shares outstanding (denominator used to compute basic EPS)	128,652	130,121
Effect of stock options and restricted stock	1,321	2,059
Denominator used to compute diluted EPS	129,973	132,180
Antidilutive stock options and restricted stock	3,169	1,632
Shares of common stock issued from the exercise of stock options and the release of restricted stock	396	195

Share Repurchases

On August 19, 2014, the Company's Board of Directors authorized a new share repurchase program of up to $500 million of the Company's common stock. The following table summarizes the activity under this program from the authorization date (in thousands, except per-share amounts):

Amount Authorized	Average Price Per Share (1)	Total Shares Retired	Shares Repurchased
$500,000	$48.0266	4,000	4,000

(1) Includes commissions paid and calculated as the average price per share since the repurchase

program authorization date.

Share repurchases may be executed through various means including, without limitation, open market transactions, privately negotiated transactions or otherwise. The share repurchase program does not obligate the Company to purchase any shares, and expires on August 19, 2017. The authorization for the share repurchase program may be terminated, increased or decreased by the Company’s Board of Directors in its discretion at any time.

Commitments and Contingencies

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

We maintain insurance coverage for various aspects of our business and operations. Our insurance programs have varying coverage limits and maximums, and insurance companies may and increasingly do seek to not pay any claims we might make. We have also elected to retain a portion of losses that occur through the use of various deductibles, limits, and retentions under our insurance programs. As a result, we may be subject to future liability for which we are only partially insured or completely uninsured. We intend to mitigate any such future liability by continuing to exercise prudent business judgment in negotiating the terms and conditions of our contracts. Our insurers are also subject to business risk and, as a result, one or more of them may be unable to fulfill their insurance obligations due to insolvency or otherwise.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – UNAUDITED

December 26, 2014

(continued)

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

We record in our Consolidated Balance Sheets amounts representing our estimated liability relating to such claims, guarantees, litigation, and audits and investigations. We perform an analysis to determine the level of reserves to establish for claims that may be insured that are known and have been asserted against us, and for claims that may be insured that are believed to have been incurred based on actuarial analysis, but have not yet been reported to our claims administrators as of the respective balance sheet dates. We include any adjustments to such insurance reserves in our consolidated results of operations.

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

On August 9, 2014, the Company received a Notice of Arbitration from Motiva Enterprises LLC. The arbitration is

pending in Houston, Texas before the International Institute for Conflict Prevention and Resolution. In 2006, Motiva contracted

with Bechtel-Jacobs CEP Port Arthur Joint Venture (“BJJV”), a joint venture between Bechtel Corporation and Jacobs

Engineering Group, Inc. to perform professional services in connection with the expansion project at the Motiva Port Arthur,

TX refinery. In the Notice of Arbitration, Motiva asserts various causes of action and alleges entitlement to equitable and

monetary relief in excess of $7 billion. BJJV has denied liability and is vigorously defending these claims. The Company does

not expect this matter to have a material adverse effect on its consolidated financial statements.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

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

General

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

• The discussion of the critical and significant accounting policies used by the Company in preparing its consolidated financial statements. The most current discussion of our critical accounting policies appears in Management's Discussion and Analysis of Financial Condition and Results of Operations of our 2014 Form 10-K, and the most current discussion of our significant accounting policies appears in Note 2—Significant Accounting Polices in Notes to Consolidated Financial Statements of our 2014 Form 10-K;

• The Company’s fiscal 2014 audited consolidated financial statements and notes thereto included in our 2014 Form 10-K; and

• Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2014 Form 10-K.

In addition to historical information, this MD&A may contain forward-looking statements that are not based on historical fact. When used herein, words such as "expects", "anticipates", "believes", "seeks", "estimates", "plans", "intends", and similar words identify forward-looking statements. You should not place undue reliance on these forward-looking statements. Although such statements are based on management’s current estimates and expectations, which we believe to be reasonable, and currently available competitive, financial, and economic data, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause our actual results to differ materially from what may be inferred from the forward-looking statements. Some of the factors that could cause or contribute to such differences are listed and discussed in Item 1A—Risk Factors, included in our 2014 Form 10-K. We undertake no obligation to release publicly any revisions or updates to any forward-looking statements. We encourage you to read carefully the risk factors described in other documents we file from time to time with the United States Securities and Exchange Commission.

Overview - Three Months Ended December 26, 2014

The Company's net earnings for the three months ended December 26, 2014increased by $6.3 million, or 6.8%, compared to the corresponding period last year. The Company's results for the first quarter of fiscal 2015 when compared to the corresponding period last year were positively impacted by the SKM acquisition and, to a lesser degree, the other acquisitions completed during fiscal 2014. Also influencing the comparability of the Company's results of operations for the first quarter of fiscal 2015 to the first quarter of fiscal 2014 are certain events and transactions recognized last year. These include one-time, transaction-related expenses relating to the completion of the SKM transaction; an operating loss from SKM for the two weeks it was included in our first quarter results of operations for fiscal 2014; and the successful resolution of an international tax matter.

Backlog at December 26, 2014 was $19.1 billion, and represents an increase of 5.8% over backlog at December 27, 2013. The Company continues to have a positive outlook for many of the industry groups and markets in which our clients operate.

During the three months ended December 26, 2014, the Company repurchased and retired 2.5 million shares of its common stock under its share repurchase program. Total cash spent for the shares repurchased was $113.7 million.

Business Combinations Completed During Fiscal 2014

In December 2013, the Company acquired all of the outstanding equity interests in SKM. The acquisition of SKM is described in more detail under Notes to Consolidated Financial Statements, above, as well as on page 8 and beginning on page F-11 of our 2014 Form 10-K.

We also completed a number of other acquisitions during fiscal 2014 including Federal Network Services LLC ("FNS", formerly a subsidiary of Verizon); Eagleton Engineering, LLC; FMHC Corporation; Stobbarts (Nuclear) Limited; Trompeter Enterprises; and MARMAC Field Services, Inc. The results of operations of these other acquisitions were not material, individually or in the aggregate, to the Company's consolidated results of operations for fiscal 2014. During fiscal 2014, we also acquired an additional 15% interest in Jacobs, Zamel and Turbag Consulting Engineers Company ("ZATE"). This transaction brought the Company's ownership in ZATE to 75%.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Consistent with other business combinations we've completed in the past, we began integrating SKM and the other businesses we acquired last year into our existing operations almost immediately after each business was acquired. Accordingly, it is not practicable to provide complete financial information for fiscal 2015 on a stand-alone basis for any of the businesses we acquired last year.

Results of Operations

Net earnings for the first quarter of fiscal 2015 ended December 26, 2014increased$6.3 million, or 6.8%, to $100.1 million (or $0.77 per diluted share) from $93.7 million (or $0.71 per diluted share) for the corresponding period last year.

Total revenues for the first quarter of fiscal 2015increased by $118.1 million, or 3.8%, to $3.19 billion, from $3.07 billion for the first quarter of fiscal 2014. This increase in revenue was due primarily to the SKM and FNS acquisitions.

The following table sets forth our revenues by the various types of services we provide for the three months ended December 26, 2014 and December 27, 2013, respectively (in thousands):

	For the Three Months Ended
	December 26, 2014		December 27, 2013
Technical Professional Services Revenues:
Project Services	$	1,623,587	$	1,520,778
Process, Scientific, and Systems Consulting	308,937		152,634
Total Technical Professional Services Revenues	1,932,524		1,673,412
Field Services Revenues:
Construction	947,792		1,081,214
Operations and Maintenance ("O&M")	306,689		314,265
Total Field Services Revenues	1,254,481		1,395,479
Total Revenues	$	3,187,005	$	3,068,891

Project Services revenues for the three months ended December 26, 2014increased$102.8 million, or 6.8%, from the corresponding period last year. This increase in Project Services revenues was due primarily to the SKM acquisition.

Process, Scientific, and Systems Consulting revenues for the three months ended December 26, 2014increased$156.3 million, or 102.4%, from the corresponding period last year. The increase was due primarily to the FNS acquisition completed during the fourth quarter of fiscal 2014. The revenues in this service type relate to science, engineering, and technical support services provided primarily to our U.S. federal government clients and its various agencies.

Construction revenues for the three months ended December 26, 2014decreased$133.4 million, or 12.3%, from the corresponding period last year, primarily due to the winding down of a U.S. project in the Mining and Minerals market.

Operations and Maintenance revenues for the three months ended December 26, 2014decreased$7.6 million, or 2.4%, or essentially flat from the corresponding period last year.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

The following table sets forth our revenues by the industry groups and markets in which our clients operate for the three months ended December 26, 2014 and December 27, 2013 (in thousands):

	For the Three Months Ended
	December 26, 2014		December 27, 2013
Chemicals and Polymers	$	698,356	$	762,062
National Government Programs	668,342		510,041
Refining - Downstream	508,888		610,536
Infrastructure	385,585		291,490
Oil & Gas - Upstream	246,014		207,863
Buildings	230,031		185,665
Pharmaceuticals and Biotechnology	129,785		110,506
Mining and Minerals	142,090		223,783
Industrial and Other	177,914		166,945
	$	3,187,005	$	3,068,891

For the three months ended December 26, 2014, revenues from projects for clients operating in the Chemicals and Polymers industries decreased$63.7 million, or 8.4%, to $698.4 million from $762.1 million for the corresponding period last year. The decrease in revenues was due primarily to the completion of a significant amount of procurement services relating to a project involving the relocation of a methanol production plant. Separately, we continue to receive new awards for FEED (front-end engineering design) and pre-FEED services. We have long-term relationships with numerous chemical companies around the world, and we believe this industry group will provide strong growth opportunities in the long-term. We see particularly good growth potential in North America and the Middle East due to the growing source of available feedstock. Leveraging our geographic presence as strengthened by the SKM transaction, we were recently awarded a significant professional services contract for what will be the largest chlorine dioxide plant in the world, located in Asia.

For the three months ended December 26, 2014, revenues from clients operating in the National Government Programs market increased$158.3 million, or 31.0%, to $668.3 million from $510.0 million for the corresponding period last year. The increase was primarily due to the FNS acquisition completed during the fourth quarter of fiscal 2014.

For the three months ended December 26, 2014, revenues from clients operating in the Infrastructure market increased$94.1 million, or 32.3%, to $385.6 million from $291.5 million for the corresponding period last year. The increase was due primarily to increased activity in Australia (due primarily to the SKM acquisition), the U.K., and the U.S. We believe market conditions may continue to improve within this industry group, particularly for transportation and water projects around the globe. One example is the Asset Management Programme (AMP6) cycle in the U.K., where we believe the Company is well positioned to assist clients improve their relative efficiency and wastewater effluent quality. Also included in this revenue category are our growing services to customers operating in the telecommunications industry. Long-term, we anticipate this market will attract significant capital as countries around the world strive to improve and expand their wireless communications capabilities.

For the three months ended December 26, 2014, revenues from clients operating in the Refining - Downstream market decreased$101.6 million, or 16.6%, to $508.9 million from $610.5 million for the corresponding period last year. The decrease occurred within our operations in Canada, Europe, and the U.K., and was partially offset by increased activities in the U.S. We see certain customers in this market moving more cautiously with respect to large capital spending; however, certain regulatory projects such as ISA 84 (a safety instrumentation standard designed to take a process to a safe state after certain, pre-defined conditions are triggered).I n addition, we see capital investment increasing in certain markets in the Middle East in support of local economic diversification efforts to integrate refining and petrochemical facilities to capture more revenue from downstream activities, as well as increasing their domestic refining capacity to meet local demand.

Although revenues on projects for clients operating in the Oil & Gas-Upstream market increased $38.2 million, or 18.4%, to $246.0 million from $207.9 million for the corresponding period last year, the Company believes that the recent decline in crude oil prices will likely have a negative impact on our client's near-term capital spending plans. As a result, we have seen some project delays and project cancellations by clients operating in this market. These delays and cancellations have not been

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

material to our business. In addition, we see certain clients deploying more of their capital budgets to sustaining capital-type programs (small-cap projects and maintenance-driven work).

For the three months ended December 26, 2014, revenues from clients operating in the Buildings market increased$44.4 million, or 23.9%, to $230.0 million from $185.7 million for the corresponding period last year. Although SKM was responsible for most of this increase, we saw growth in our Middle East, Asia, and U.K. markets. In the U.S., we continue to provide services for data centers and mission critical facilities. We see growth opportunities in parts of North and West Africa where we believe we are well positioned to capitalize on buildings projects with high technical content (e.g., buildings relating to health care, aviation, and education). We view the Buildings market as improving as our business continues to shift towards projects for clients in the private sector.

For the three months ended December 26, 2014, revenues from clients operating in the Mining and Minerals market decreased$81.7 million, or 36.5%, to $142.1 million from $223.8 million for the corresponding period last year. The decreased revenues in fiscal 2015 were due primarily to the winding down of a project in the U.S. This decrease in the U.S. was partially offset by increased business in Australia associated with the SKM acquisition. Globally, our clients in these industries continue to behave conservatively when it comes to new spend. In addition, although we believe consolidation among companies in this industry will provide more stable capital spending in the long-term, such actions may have significant impacts in the short-term. Nevertheless, we continue to believe we will be able to capture additional market share from clients operating in these industries by continuing to focus on asset optimization and sustaining capital projects for our clients.

Direct costs of contracts for the first quarter of fiscal 2015increased$52.4 million, or 2.0%, to $2.7 billion from $2.6 billion for the corresponding period last year. Direct costs of contracts include all costs incurred in connection with and directly for the benefit of client contracts, including depreciation and amortization relating to assets used in providing the services required by the related projects. The level of direct costs of contracts may fluctuate between reporting periods due to a variety of factors, including the amount of pass-through costs we incur during a period. On those projects where we are responsible for subcontract labor or third-party materials and equipment, we reflect the amounts of such items in both revenues and costs (and we refer to such costs as "pass-through costs"). On other projects where the client elects to pay for such items directly and we have no associated responsibility for such items, these amounts are not considered pass-through costs and are, therefore, not reflected in either revenues or costs. To the extent that we incur a significant amount of pass-through costs in a period, our direct costs of contracts are likely to increase as well.

Pass-through costs for the first quarter of fiscal 2015decreased$45.2 million, or 6.0%, to $706.8 million from $752.0 million for the corresponding period last year. In general, pass-through costs are more significant on projects that have a higher content of field services activities. Pass-through costs are generally incurred at specific points during the life cycle of a project and are highly dependent on the needs of our individual clients and the nature of the clients’ projects. However, because we have hundreds of projects which start at various times within a fiscal year, the effect of pass-through costs on the level of direct costs of contracts can vary between fiscal years without there being a fundamental or significant change to the underlying business.

As a percentage of revenues, direct costs of contracts for the three months ended December 26, 2014 was 83.7%. This compares to 85.2% for the three months ended December 27, 2013. The relationship between direct costs of contracts and revenues will fluctuate between reporting periods depending on a variety of factors including the mix of business during the reporting periods being compared as well as the level of margins earned from the various types of services provided. Generally, the more procurement we do on behalf of our clients (i.e., where we purchase equipment and materials for use on projects and/or procure subcontracts in connection with projects) and the more field services revenues we have relative to technical, professional services revenues, the higher the ratio will be of direct costs of contracts to revenues. Because revenues from pass-through costs typically have lower margin rates associated with them, it is not unusual for us to experience an increase or decrease in such revenues without experiencing a corresponding increase or decrease in our gross margins and operating profit.

Selling, general and administrative ("SG&A") expenses for the first quarter of fiscal 2015increased$52.6 million, or 17.0%, to $361.2 million from $308.6 million for the corresponding period last year. The increases were due primarily to the SG&A expenses attributable to the businesses we acquired in fiscal 2014.

Net interest expense for the three months ended December 26, 2014 was $3.0 million. This compares to net interest income of $2.0 million for the corresponding period last year. Included in net interest income for the three months ended December 27, 2013 was the reversal of $4.1 million of accrued interest expense recorded in connection with income tax liabilities relating to certain contested international tax matters which were favorably resolved during the first quarter of fiscal 2014. Adjusting for this reversal of expense, the increase in interest expense during the three months ended December 26, 2014 as compared to the corresponding period last year was due primarily to the effects of the increase in debt incurred in connection with the SKM acquisition.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

The Company's effective income tax rate for the first quarter ended December 26, 2014declined to 31.4% from 32.7% for the corresponding period last year. Contributing to the decrease during the three month period ended December 26, 2014 as compared to the prior year's period was the release of a valuation allowance which was held on foreign net operating losses and the benefit of deductible acquisition interest held outside the U.S. Contributing to the higher effective tax rate for the first quarter of fiscal 2014 was the non-deductibility of certain one-time closing costs associated with the SKM transaction, off-set in part by the successful resolution of an international tax matter that also occurred during the first quarter of fiscal 2014. The Company currently anticipates that its effective tax rate for fiscal 2015 will be below 32.0%.

Backlog Information

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

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

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

The following table summarizes our backlog at December 26, 2014 and December 27, 2013 (in millions):

	December 26, 2014		December 27, 2013
Technical professional services	$	13,222.4	$	12,279.7
Field services	5,885.0		5,774.5
Total	$	19,107.4	$	18,054.2

Our backlog increased$1.1 billion, or 5.8%, to $19.1 billion at December 26, 2014 from $18.1 billion at December 27, 2013. Backlog at December 26, 2014 includes SKM and new awards from clients operating in many of the industry groups and markets we serve, and in particular the National Governments, Buildings, and Infrastructure markets.

Liquidity and Capital Resources

At December 26, 2014, our principal sources of liquidity consisted of $670.1 million of cash and cash equivalents and $890.6 million of available borrowing capacity under our $1.6 billion revolving credit facility (the "2014 Facility"; refer to the note Long-term Debt in Notes to Consolidated Financial Statements). We finance much of our operations and growth through cash generated by our operations.

During the three months ended December 26, 2014, our cash and cash equivalents decreased by $62.6 million from $732.6 million at September 26, 2014 to $670.1 million at December 26, 2014. This compares to a net increase in cash and cash equivalents of $245.2 million to $1.01 billion during the corresponding period last year. During the three months ended December 26, 2014, we experienced net cash outflows of $30.4 million from investing activities, $140.4 million from financing activities, and $30.8 million from the effects of exchange rate changes. These cash outflows were offset in part by net cash inflows of $139.0 million from operating activities.

Our operations provided net cash inflows of $139.0 million during the three months ended December 26, 2014. This compares to net cash inflows of $326.5 million for the corresponding period last year. The $187.5 milliondecrease in cash flows from operating activities during the three months ended December 26, 2014 as compared to the corresponding period last

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

year was due primarily to a $183.6 milliondecrease in cash generated from changes within our working capital accounts (discussed below) offset in part by a small increase in net earnings.

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

This relationship between revenues and costs, and between receivables and payables, is unique to our industry, and facilitates review of our liquidity at the total working capital level. The $183.6 milliondecrease in cash flows relating to our working capital accounts was due to the timing of cash receipts and payments within our working capital accounts, including an improvement in cash collections from customers, off-set in part by an increase in vendor payments. Although the Company provides services to clients in a number of countries outside the U.S., we believe our credit risk with respect to these international clients is not significant. Our private sector customers are comprised principally of large, well-known, and well-established multi-national companies. Our government customers are comprised of national, state, and local agencies located principally in the U.S., the U.K., and Australia. We have not historically experienced significant collection issues with either of our governmental or non-governmental customers.

We used$30.4 million of cash and cash equivalents for investing activities during the three months ended December 26, 2014 as compared to $1.2 billionused during the corresponding period last year. The decrease is due to the absence of business acquisitions for the for the three months ended December 26, 2014 as compared to the corresponding period last year when the Company used $1.2 billion ($1.1 billion net of cash acquired) for the acquisition of SKM.

Our financing activities resulted in net cash outflows of $140.4 million during the three months ended December 26, 2014. This compares to net cash inflows of $628.1 million during the corresponding period last year. As of December 26, 2014, the outstanding amount under our 2014 Facility was principally used to fund elements of the Company's business acquisitions. The $140.4 million of cash outflows from financing activities for the first quarter of fiscal 2015 related primarily to $113.7 million used to repurchase common stock under the Company's board-approved share repurchase program (discussed in further detail in Part II, Item 2 of this report on Form 10-Q).

The Company had $670.1 million of cash and cash equivalents at December 26, 2014. Of this amount, approximately $155.6 million was held in the U.S. and $514.5 million was held outside of the U.S., primarily in Canada, Australia, the U.K., and the Eurozone. Other than the tax cost of repatriating funds to the U.S. (see Note 9—IncomeTaxes of Notes to Consolidated Financial Statements included in our 2014 Form 10-K), there are no material impediments to repatriating these funds to the U.S.

We believe we have adequate liquidity and capital resources to fund our operations, support our acquisition strategy, and service our debt for the next twelve months. We had $670.1 million in cash and cash equivalents at December 26, 2014, and our consolidated working capital position was $1.4 billion at that date. In addition, there was $890.6 million of borrowing capacity remaining under the 2014 Facility at December 26, 2014. We believe that the capacity, terms and conditions of the 2014 Facility, combined with cash on-hand and the other committed and uncommitted facilities we have in place, are adequate for our working capital and general business requirements for the next twelve months.

The Company had $295.2 million of letters of credit outstanding at December 26, 2014. Of this amount, $2.8 million was issued under the 2014 Facility and $292.4 million was issued under separate, committed and uncommitted letter-of-credit facilities.

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JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We do not enter into derivative financial instruments for trading, speculation or other purposes that would expose the Company to market risk. In the normal course of business, our results of operations are exposed to risks associated with fluctuations in interest rates and currency exchange rates.

Interest Rate Risk

Please see the Note Long-term Debt in Notes to Consolidated Financial Statements appearing under Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference, for a discussion of the 2014 Facility.

Foreign Currency Risk

In situations where our operations incur contract costs in currencies other than their functional currency, we attempt to have a portion of the related contract revenues denominated in the same currencies as the costs. In those situations where revenues and costs are transacted in different currencies, we sometimes enter into foreign exchange contracts in order to limit our exposure to fluctuating foreign currencies. We follow the provisions of ASC 815—Derivatives and Hedging in accounting for our derivative contracts. The Company does not currently have exchange rate sensitive instruments that would have a material effect on our consolidated financial statements or results of operations.

Item 4. Controls and Procedures.

The Company’s management, with the participation of its Executive Chairman (principal executive officer) and Chief Financial Officer (principal financial officer), evaluated the effectiveness of the Company’s disclosure controls and procedures as defined by Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of December 26, 2014, the end of the period covered by this Quarterly Report on Form 10-Q (the "Evaluation Date"). Based on that evaluation, the Executive Chairman (principal executive officer) and Chief Financial Officer (principal financial officer) concluded that the Company’s disclosure controls and procedures were effective as of the Evaluation Date.

There were no changes in the Company’s internal control over financial reporting during the quarter ended December 26, 2014 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

The information required by this Item 1 is included in the Note Commitments and Contingencies included in the Notes to Consolidated Financial Statements appearing under Part I - Item 1 of this Quarterly Report on Form 10-Q, which is incorporated herein by reference.

Item 1A. Risk Factors.

Please refer to Item 1A—Risk Factors in our 2014 Form 10-K, which is incorporated herein by reference, for a discussion of some of the factors that have affected our business, financial condition, and results of operations in the past and which could affect us in the future. There have been no material changes to those risk factors during the period covered by this Quarterly Report on Form 10-Q.

Page 22

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

There were no sales of unregistered equity securities during the first quarter of fiscal 2015.

Share Repurchases

On August 19, 2014, the Board of Directors approved a program to repurchase up to $500 million of the Company's common stock over the next three years. Under the program’s terms, shares may be repurchased from time to time at the our discretion on the open market, through block trades or otherwise. The timing of our share repurchases will depend upon market conditions, other uses of capital and other factors.

A summary of repurchases of our common stock each fiscal month during the first quarter of fiscal 2015 is as follows (in thousands, except per-share amounts):

Period	Total Number of Shares Purchased	Average Price Paid per Share (1)	Total Numbers of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
September 27 through October 24, 2014	1,300	$47.4803	1,300	$359,877
October 25 through November 21, 2014	—	—	—	359,877
November 22 through December 26, 2014	1,200	$43.3194	1,200	307,894
Total	2,500	$45.4831	2,500	$307,894

(1) Includes commissions paid.

Item 4. Mine Safety Disclosure.

Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) requires domestic mine operators to disclose violations and orders issued under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) by the federal Mine Safety and Health Administration. Under the Mine Act, an independent contractor, such as Jacobs, that performs services or construction of a mine is included within the definition of a mining operator. We do not act as the owner of any mines.

Information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K is included in Exhibit 95.

Page 23

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

Item 6. Exhibits

(a) Exhibits

31.1 –	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2 –	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 –	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2 –	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
95 –	Mine Safety Disclosure.
101.INS	XBRL Instance Document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB	XBRL Taxonomy Extension Label Linkbase Document.
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document.
#	Management contract or compensatory plan or arrangement.

Page 24

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

SIGNATURES

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

JACOBS ENGINEERING GROUP INC.

By:	/s/ Kevin C. Berryman
	Kevin C. Berryman
	Executive Vice President
	and Chief Financial Officer
	(Principal Financial Officer)
Date:	January 29, 2015

Page 25

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Noel G. Watson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended December 26, 2014 of Jacobs Engineering Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Noel G. Watson

Noel G. Watson

Executive Chairman

January 29, 2015

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Kevin C. Berryman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q for the quarter ended December 26, 2014 of Jacobs Engineering Group Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Kevin C. Berryman

Kevin C. Berryman

Chief Financial Officer

January 29, 2015

EX-32.1

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

Pursuant to 18 U.S.C. Section 1350

Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Jacobs Engineering Group Inc. (the “Company”) on Form 10-Q for the quarter ended December 26, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Noel G. Watson, Executive Chairman of the Company (principal executive officer), certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Noel G. Watson

Noel G. Watson

Executive Chairman

January 29, 2015

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

Pursuant to 18 U.S.C. Section 1350

Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report of Jacobs Engineering Group Inc. (the “Company”) on Form 10-Q for the quarter ended December 26, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Kevin C. Berryman, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (1) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Kevin C. Berryman

Kevin C. Berryman

Executive Vice President

and Chief Financial officer

January 29, 2015

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-95

Exhibit 95

Mine Safety Disclosure

Section 1503 of the Dodd-Frank Wall Street Reform and Consumer Protection Act requires domestic mine operators to disclose violations and orders issued under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”) by the federal Mine Safety and Health Administration (“MSHA”). Under the Mine Act, an independent contractor, such as Jacobs, that performs services or construction of a mine is included within the definition of a mining operator. We do not act as the owner of any mines. Due to timing and other factors, the data may not agree with the mine data retrieval system maintained by MSHA.

The following table provides information for the quarter ended December 26, 2014.

Mine or Operating Name/MSHA Identification Number	Section 104 S&S Citations (#)	Section 104(b) Orders (#)	Section 104(d) Citations and Orders (#)	Section 110(b)(2) Violations (#)	Section 107(a) Orders (#)	Total Dollar Value of MSHA Assessments Proposed ($)		Total Number of Mining Related Fatalities (#)	Received Notice of Pattern of Violations Under Section 104(e) (yes/no)	Received Notice of Potential to Have Pattern Under Section 104(e) (yes/no)	Legal Actions Initiated During Period (#)	Legal Actions Resolved During Period (#)	Legal Actions Pending as of Last Day of Period (#)
Mine ID: 02-00024 1PL						$	—		No	No		19	19
Mine ID: 02-00144 1PL						$	—		No	No
Mine ID: 02-03131 1PL						$	—		No	No
Mine ID: 02-00137 1PL						$	—		No	No
Mine ID: 02-00150 1PL						$	—		No	No
Mine ID: 26-01962 1PL						$	—		No	No		2	—
Mine ID: 29-00708 1PL						$	—		No	No		2
Mine ID: 29-00762 1PL						$	—		No	No
Mine ID: 26-02755 1PL	2					$	—					9
Mine ID: 04-00743 Y713						$	—		No	No
Totals	2	—	—	—	—	$	—	—	No	No	—	32	19

Notes:

(1) Jacobs intends to contest the 2 "S&S" citations assessed this quarter at Mine ID 26-02755.

(2) Of the 19 citations resolved this quarter, Jacobs successfully reduced civil penalties by over 30.00% and the "S&S" designation was removed from 3 citations.

(3) Jacobs successfully contested and vacated 4 citations this quarter.

XML

Disclosures About Defined Pension Benefit Obligations (Schedule of Pension Plans' Expense) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 26, 2014	Dec. 27, 2013
Component:
Service cost	$ 8,576	$ 10,413
Interest cost	16,658	19,892
Expected return on plan assets	(21,049)	(22,340)
Amortization of previously unrecognized items	5,410	4,803
Settlement Loss	59	140
Net periodic benefit cost	$ 9,654	$ 12,908

XML

Earnings Per Share and Certain Related Information (Tables)

3 Months Ended

Dec. 26, 2014

Earnings Per Share Reconciliation [Abstract]

Earnings Per Share

The following table (i) reconciles the denominator used to compute basic earnings per share ("EPS") to the denominator used to compute diluted EPS for the three months ended December 26, 2014 and December 27, 2013; (ii) provides information regarding the number of non-qualified stock options and shares of restricted stock that were antidilutive and therefore disregarded in calculating the weighted average number of shares outstanding used in computing diluted EPS; and (iii) provides the number of shares of common stock issued from the exercise of stock options and the release of restricted stock (in thousands):

	For the Three Months Ended
	December 26, 2014	December 27, 2013
Shares used to calculate EPS:
Weighted average shares outstanding (denominator used to compute basic EPS)	128,652	130,121
Effect of stock options and restricted stock	1,321	2,059
Denominator used to compute diluted EPS	129,973	132,180
Antidilutive stock options and restricted stock	3,169	1,632
Shares of common stock issued from the exercise of stock options and the release of restricted stock	396	195

Share Repurchases

The following table summarizes the activity under this program from the authorization date (in thousands, except per-share amounts):

Amount Authorized	Average Price Per Share (1)	Total Shares Retired	Shares Repurchased
$500,000	$48.0266	4,000	4,000

(1) Includes commissions paid and calculated as the average price per share since the repurchase

program authorization date.

XML

Earnings Per Share and Certain Related Information (Details) (USD $) Share data in Thousands, except Per Share data, unless otherwise specified	0 Months Ended		3 Months Ended
	Aug. 19, 2014		Dec. 26, 2014	Dec. 27, 2013	Aug. 19, 2014
Shares used to calculate EPS:
Weighted average shares outstanding (denominator used to compute basic EPS)			128,652	130,121
Effect of stock options and restricted stock (in shares)			1,321	2,059
Denominator used to compute diluted EPS (in shares)			129,973	132,180
Antidilutive stock options and restricted stock (in shares)			3,169	1,632
Shares of common stock issued from the exercise of stock options and the release of restricted stock			396	195
Share Repurchases
Amount authorized to be repurchased					$ 500,000,000
Average cost per share repurchased	$ 48.0266	[1]
Number of shares repurchased	4,000

[1] Includes commissions paid and calculated as the average price per share since the repurchaseprogram authorization date.

XML

Business Combinations

3 Months Ended

Dec. 26, 2014

Business Combinations [Abstract]

Business Combinations

Business Combinations

On December 13, 2013, the Company acquired all of the outstanding interests in Sinclair Knight Merz Management Pty Limited and Sinclair Knight Merz Holdings Limited (collectively, "SKM"), a provider of engineering, design, procurement, construction and project management services, from the SKM shareholders. The Company purchased SKM for approximately $1.2 billion in cash. SKM's results of operations have been included in the Company's consolidated results of operations since the date of acquisition. The acquisition agreement includes customary representations, warranties, and indemnities supported by an escrow account.

During the first quarter of fiscal 2015, we completed the final purchase price allocation of SKM. The Company recorded a number of adjustments affecting, among other things, the balance sheet position of several major projects; the estimated liabilities relating to acquired professional liability exposures; and other adjustments.

The following table presents the final purchase price allocation for SKM (in thousands):

Assets:
Cash and cash equivalents	$	152,051
Receivables and other current assets	371,331
Property and equipment, and other	71,630
Intangible assets	202,166
Total assets	797,178
Liabilities:
Current liabilities	351,351
Deferred tax liability	72,656
Long-term liabilities	20,416
Total liabilities	444,423
Net identifiable assets acquired	352,755
Goodwill	866,919
Net assets acquired	$	1,219,674

The following table presents the values assigned to the acquired SKM intangible assets (in thousands):

Customer relationships / backlog	$	193,260
Trade name	8,906
	$	202,166

The useful lives of the intangible assets acquired from SKM range from 3 to 12 years.

Some of the factors contributing to the recognition of goodwill include: (i) access to a large, highly-trained and stable workforce; (ii) the opportunity to expand our client base in Australia, Asia, South America and the U.K.; (iii) the opportunity to expand our presence in multiple industries, including: mining, infrastructure, buildings, water and energy; and (iv) the opportunity to achieve operating synergies.

During fiscal year 2014, the Company also acquired Federal Network Services LLC ("FNS", formerly a subsidiary of Verizon), Eagleton Engineering, LLC, FMHC Corporation, Stobbarts (Nuclear) Limited, Trompeter Enterprises, and MARMAC Field Services, Inc. The results of operations of these other acquisitions, individually or in the aggregate, were not material to the Company's consolidated results for fiscal 2014. During fiscal 2014, we also acquired an additional 15% interest in Jacobs, Zamel and Turbag Consulting Engineers Company ("ZATE"), a refining, chemicals, infrastructure and civil engineering company headquartered in Al Khobar, Saudi Arabia. This transaction brought the Company's ownership in ZATE to 75%.

XML

Receivables (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 26, 2014	Sep. 26, 2014
Components of receivables:
Amounts billed	$ 1,431,225	$ 1,425,341
Unbilled receivables and other	1,219,207	1,368,482
Retentions receivable	83,079	73,732
Total receivables, net	2,733,511	2,867,555
Other information about receivables:
Amounts due from the United States federal government, included above, net of advanced billings	377,088	324,928
Claims receivable	$ 50,972	$ 78,634
Duration which unbilled amounts will be billed and collected over (duration)	12 months

XML

Business Combinations (Intangibles) (Details) (Sinclair Knight Merz, USD $) In Thousands, unless otherwise specified	Dec. 26, 2014	Dec. 13, 2013
Business Acquisition [Line Items]
Intangible assets	$ 202,166	$ 202,166
Customer relationships / backlog
Business Acquisition [Line Items]
Intangible assets	193,260
Trade name
Business Acquisition [Line Items]
Intangible assets	$ 8,906

XML

Property, Equipment and Improvements, Net (Details) (USD $) In Thousands, unless otherwise specified	Dec. 26, 2014	Sep. 26, 2014
Property, Plant and Equipment [Line Items]
Property, equipment and improvements, gross	$ 1,084,681	$ 1,092,369
Accumulated depreciation and amortization	(637,537)	(635,572)
Property, equipment and improvements, net	447,144	456,797
Land
Property, Plant and Equipment [Line Items]
Property, equipment and improvements, gross	21,095	21,497
Buildings
Property, Plant and Equipment [Line Items]
Property, equipment and improvements, gross	126,885	128,584
Equipment
Property, Plant and Equipment [Line Items]
Property, equipment and improvements, gross	630,032	634,415
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, equipment and improvements, gross	292,816	287,814
Construction in progress
Property, Plant and Equipment [Line Items]
Property, equipment and improvements, gross	$ 13,853	$ 20,059

XML

Long-term Debt (Revolving Credit Facility) (Details) (USD $)	3 Months Ended
	Dec. 26, 2014 tranche
Line of Credit Facility [Line Items]
Total issued letters of credit	$ 295,200,000
Number of tranches in revolving credit facility (in tranches)	2
Letter of Credit
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity	300,000,000
Subfacility of Swingline Loans
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity	50,000,000
Minimum
Line of Credit Facility [Line Items]
Facility fee percentage	0.10%
Minimum | Eurocurrency Interest Rate
Line of Credit Facility [Line Items]
Margin added to variable rate interest rate (percentage)	1.00%
Minimum | Base Interest Rate
Line of Credit Facility [Line Items]
Margin added to variable rate interest rate (percentage)	0.00%
Maximum
Line of Credit Facility [Line Items]
Facility fee percentage	0.25%
Maximum | Eurocurrency Interest Rate
Line of Credit Facility [Line Items]
Margin added to variable rate interest rate (percentage)	1.50%
Maximum | Base Interest Rate
Line of Credit Facility [Line Items]
Margin added to variable rate interest rate (percentage)	0.50%
2014 Facility
Line of Credit Facility [Line Items]
Available borrowing capacity	890,600,000
2014 Facility | Revolving Credit Facility
Line of Credit Facility [Line Items]
Credit facility, maximum borrowing capacity	1,600,000,000
Credit facility potential borrowing capacity	2,100,000,000
Direct borrowings on credit facility	706,600,000
2014 Facility | Letter of Credit
Line of Credit Facility [Line Items]
Direct borrowings on credit facility	2,800,000
Committed and Uncommitted Letter of Credit Facility | Letter of Credit
Line of Credit Facility [Line Items]
Direct borrowings on credit facility	$ 292,400,000

XML

New Accounting Standards

3 Months Ended

Dec. 26, 2014

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Standards

New Accounting Standards

From time to time, the Financial Accounting Standards Board ("FASB") issues accounting standards updates (each being an "ASU") to its Accounting Standards Codification ("ASC"), which constitutes the primary source of U.S. GAAP. The Company regularly monitors ASUs as they are issued and considers their applicability to its business. All ASUs applicable to the Company are adopted by the due date and in the manner prescribed by the FASB.

XML

Revenue Accounting for Contracts / Accounting for Joint Ventures (Subcontractor Costs) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 26, 2014	Dec. 27, 2013
Revenue Accounting for Contracts / Accounting for Joint Ventures [Abstract]
Pass-through costs included in revenues	$ 706,830	$ 752,023

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Dec. 26, 2014	Sep. 26, 2014
Current Assets:
Cash and cash equivalents	$ 670,081	$ 732,647
Receivables	2,733,511	2,867,555
Deferred income taxes	168,426	169,893
Prepaid expenses and other	113,766	121,976
Total current assets	3,685,784	3,892,071
Property, Equipment and Improvements, Net	447,144	456,797
Other Noncurrent Assets:
Goodwill	3,046,706	3,026,349
Intangibles	414,114	440,192
Miscellaneous	648,900	638,250
Total other non-current assets	4,109,720	4,104,791
Assets	8,242,648	8,453,659
Current Liabilities:
Notes payable	44,332	36,732
Accounts payable	532,964	622,875
Accrued liabilities	1,226,985	1,279,556
Billings in excess of costs	417,407	410,683
Income taxes payable	16,967	0
Total current liabilities	2,238,655	2,349,846
Long-term Debt	706,610	764,075
Other Deferred Liabilities	824,700	834,078
Commitments and Contingencies
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—129,476,076 shares and 131,752,768 shares, respectively	129,476	131,753
Additional paid-in capital	1,170,721	1,173,858
Retained earnings	3,539,510	3,527,193
Accumulated other comprehensive loss	(401,504)	(363,549)
Total Jacobs stockholders’ equity	4,438,203	4,469,255
Noncontrolling interests	34,480	36,405
Total Group stockholders’ equity	4,472,683	4,505,660
Liabilities and Stockholders' Equity, Total	$ 8,242,648	$ 8,453,659

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 26, 2014	Dec. 27, 2013
Cash Flows from Operating Activities:
Net earnings attributable to the Group	$ 106,195	$ 98,949
Depreciation and amortization:
Property, equipment and improvements	26,006	19,649
Intangible assets	12,981	8,637
Stock based compensation	16,504	15,263
Tax deficiency (benefit) from stock based compensation	(279)	67
Equity in earnings of operating ventures, net	(4,616)	(2,296)
Change in pension plan obligations	(154)	1,219
Change in deferred compensation plans	(1,450)	(1,875)
(Gains) losses on sales of assets, net	(22)	212
Changes in certain assets and liabilities, excluding the effects of businesses acquired:
Receivables	65,538	191,263
Prepaid expenses and other current assets	5,230	5,121
Accounts payable	(80,520)	(104,583)
Accrued liabilities	(33,198)	(5,087)
Billings in excess of costs	23,948	56,954
Income taxes payable	14,543	35,503
Deferred income taxes	(2,602)	(3,739)
Other deferred liabilities	(9,162)	4,698
Other, net	29	6,525
Net cash provided by operating activities	138,971	326,480
Cash Flows from Investing Activities:
Additions to property and equipment	(33,775)	(37,948)
Disposals of property and equipment	3,374	71
Purchases of investments	0	(25,476)
Sales of investments	13	0
Acquisitions of businesses, net of cash acquired	0	(1,132,933)
Net cash used for investing activities	(30,388)	(1,196,286)
Cash Flows from Financing Activities:
Proceeds from long-term borrowings	308,446	629,373
Repayments of long-term borrowings	(345,660)	(8,646)
Proceeds from short-term borrowings	112,638	45,596
Repayments of short-term borrowings	(103,187)	(45,773)
Proceeds from issuances of common stock	8,029	9,587
Common stock repurchases	(113,708)	0
Tax (deficiency) benefit from stock based compensation	279	(67)
Distributions to noncontrolling interests	(7,230)	(1,986)
Net cash provided by (used for) financing activities	(140,393)	628,084
Effect of Exchange Rate Changes	(30,756)	(3,447)
Net Decrease in Cash and Cash Equivalents	(62,566)	(245,169)
Cash and Cash Equivalents at the Beginning of the Period	732,647	1,256,405
Cash and Cash Equivalents at the End of the Period	$ 670,081	$ 1,011,236

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Disclosures About Defined Pension Benefit Obligations (Defined Contribution Plans) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 26, 2014
Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]
Cash contributions made during the first three months of fiscal 2015	$ 9,808
Cash contributions we expect to make during the remainder of fiscal 2015	36,396
Total	$ 46,204

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Revenue Accounting for Contracts / Accounting for Joint Ventures (Tables)

3 Months Ended

Dec. 26, 2014

Revenue Accounting for Contracts / Accounting for Joint Ventures [Abstract]

Schedule of Variable Interest Entities

The following table sets forth pass-through costs included in revenues for each of the three months ended December 26, 2014 and December 27, 2013 (in thousands):

	For the Three Months Ended
	December 26, 2014		December 27, 2013
Pass-through costs included in revenues	$	706,830	$	752,023

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Other Comprehensive Income (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 26, 2014	Dec. 27, 2013
Amortization of Defined Benefit Items:
Earnings Before Taxes	$ 154,695	$ 146,921
Income Tax Benefit	(48,500)	(47,972)
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Defined Benefit Plans Adjustment
Amortization of Defined Benefit Items:
Actuarial losses	(5,410)	(4,804)
Prior service cost	24	(25)
Earnings Before Taxes	(5,386)	(4,829)
Income Tax Benefit	1,508	1,365
Total Reclassifications, After-tax	$ (3,878)	$ (3,464)

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Other Comprehensive Income (Tables)

3 Months Ended

Dec. 26, 2014

Equity [Abstract]

Reclassification out of Accumulated Other Comprehensive Income

The following table presents amounts reclassified from change in pension liabilities in other comprehensive income to direct cost of contracts and selling, general and administrative expenses in the Company's Consolidated Statements of Earnings for the three months ended December 26, 2014 and December 27, 2013 related to the Company's defined benefit pension plans (in thousands):

	For the Three Months Ended
	December 26, 2014			December 27, 2013
Amortization of Defined Benefit Items:
Actuarial losses	$	(5,410	)	$	(4,804	)
Prior service cost	24			(25		)
Total Before Income Tax	(5,386		)	(4,829		)
Income Tax Benefit	1,508			1,365
Total Reclassifications, After-tax	$	(3,878	)	$	(3,464	)

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Basis of Presentation

3 Months Ended

Dec. 26, 2014

Basis of Presentation [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;

• 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 ("U.S. GAAP") 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 September 26, 2014 ("2014 Form 10-K") as well as Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations, which is also included in our 2014 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 December 26, 2014, and for the three month periods ended December 26, 2014 and December 27, 2013.

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

Please refer to Note 16 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K for the definitions of certain terms used herein.

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires us to employ estimates and make assumptions that affect the reported amounts of certain assets and liabilities; the revenues and expenses reported for the periods covered by the accompanying consolidated financial statements; and certain amounts disclosed in these Notes to the Consolidated Financial Statements. Although such estimates and assumptions are based on management's most recent assessment of the underlying facts and circumstances utilizing the most current information available and past experience, actual results could differ significantly from those estimates and assumptions. Our estimates, judgments, and assumptions are evaluated periodically and adjusted accordingly. Please refer to Note 2 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K for a discussion of the significant estimates and assumptions affecting our consolidated financial statements.

Fair Value and Fair Value Measurements

Certain amounts included in the accompanying consolidated financial statements are presented at "fair value". Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants as of the date fair value is determined (the "measurement date"). When determining fair value, we consider the principal or most advantageous market in which we would transact, and we consider only those assumptions we believe a typical market participant would consider when pricing an asset or liability. In measuring fair value, we use the following inputs in the order of priority indicated:

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than quoted prices in active markets included in Level 1, such as (i) quoted prices for similar assets or liabilities; (ii) quoted prices in markets that have insufficient volume or infrequent transactions (i.e., less active markets); and (iii) model-driven valuations in which all significant inputs are observable or can be derived principally from, or corroborated with, observable market data for substantially the full term of the asset or liability.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the fair value measurement.

Please refer to Note 2 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K for a more complete discussion of the various items within the consolidated financial statements measured at fair value and the methods used to determine fair value.

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Consolidated Balance Sheets (Parenthetical) (USD $)	Dec. 26, 2014	Sep. 26, 2014
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 1	$ 1
Preferred stock, authorized (in shares)	1,000,000	1,000,000
Preferred stock, issued (in shares)	0	0
Preferred stock, outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, authorized (in shares)	240,000,000	240,000,000
Common stock, issued (in shares)	129,476,076	131,752,768
Common stock, outstanding (in shares)	129,476,076	131,752,768

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Commitments and Contingencies

3 Months Ended

Dec. 26, 2014

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

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

We maintain insurance coverage for various aspects of our business and operations. Our insurance programs have varying coverage limits and maximums, and insurance companies may and increasingly do seek to not pay any claims we might make. We have also elected to retain a portion of losses that occur through the use of various deductibles, limits, and retentions under our insurance programs. As a result, we may be subject to future liability for which we are only partially insured or completely uninsured. We intend to mitigate any such future liability by continuing to exercise prudent business judgment in negotiating the terms and conditions of our contracts. Our insurers are also subject to business risk and, as a result, one or more of them may be unable to fulfill their insurance obligations due to insolvency or otherwise.

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

We record in our Consolidated Balance Sheets amounts representing our estimated liability relating to such claims, guarantees, litigation, and audits and investigations. We perform an analysis to determine the level of reserves to establish for claims that may be insured that are known and have been asserted against us, and for claims that may be insured that are believed to have been incurred based on actuarial analysis, but have not yet been reported to our claims administrators as of the respective balance sheet dates. We include any adjustments to such insurance reserves in our consolidated results of operations.

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

On August 9, 2014, the Company received a Notice of Arbitration from Motiva Enterprises LLC. The arbitration is

pending in Houston, Texas before the International Institute for Conflict Prevention and Resolution. In 2006, Motiva contracted

with Bechtel-Jacobs CEP Port Arthur Joint Venture (“BJJV”), a joint venture between Bechtel Corporation and Jacobs

Engineering Group, Inc. to perform professional services in connection with the expansion project at the Motiva Port Arthur,

TX refinery. In the Notice of Arbitration, Motiva asserts various causes of action and alleges entitlement to equitable and

monetary relief in excess of $7 billion. BJJV has denied liability and is vigorously defending these claims. The Company does

not expect this matter to have a material adverse effect on its consolidated financial statements.

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Document And Entity Information	3 Months Ended
	Dec. 26, 2014	Jan. 28, 2015
Document And Entity Information [Abstract]
Entity Registrant Name	JACOBS ENGINEERING GROUP INC /DE/
Trading Symbol	jec
Entity Central Index Key	0000052988
Current Fiscal Year End Date	--10-02
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Dec. 26, 2014
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1
Amendment Flag	false
Entity Common Stock, Shares Outstanding		128,304,631

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Basis of Presentation Basis of Presentation (Policies)

3 Months Ended

Dec. 26, 2014

Basis of Presentation [Abstract]

Use of Estimates and Assumptions

Use of Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires us to employ estimates and make assumptions that affect the reported amounts of certain assets and liabilities; the revenues and expenses reported for the periods covered by the accompanying consolidated financial statements; and certain amounts disclosed in these Notes to the Consolidated Financial Statements. Although such estimates and assumptions are based on management's most recent assessment of the underlying facts and circumstances utilizing the most current information available and past experience, actual results could differ significantly from those estimates and assumptions. Our estimates, judgments, and assumptions are evaluated periodically and adjusted accordingly. Please refer to Note 2 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K for a discussion of the significant estimates and assumptions affecting our consolidated financial statements.

New Accounting Standards

From time to time, the Financial Accounting Standards Board ("FASB") issues accounting standards updates (each being an "ASU") to its Accounting Standards Codification ("ASC"), which constitutes the primary source of U.S. GAAP. The Company regularly monitors ASUs as they are issued and considers their applicability to its business. All ASUs applicable to the Company are adopted by the due date and in the manner prescribed by the FASB.

Revenue Recognition, Policy

In general, we recognize revenue 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. For multiple contracts with a single customer we account for each contract separately. We also recognize as revenues, costs associated with claims and unapproved change orders to the extent it is probable that such claims and change orders will result in additional contract revenue, and the amount of such additional revenue can be reliably estimated. A significant portion of the Company's revenue is earned on cost reimbursable contracts. The percentage of revenues realized by the Company by type of contract during fiscal 2014 can be found in Note 1 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K.

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 allowable under the terms of the contract, we estimate the amount of such nonbillable costs and adjust our revenues accordingly.

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

Consolidation, Variable Interest Entity, Policy

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

Certain of our joint ventures meet the definition of a "variable interest entity" ("VIE"). As defined in U.S. GAAP, a VIE is a legal entity in which equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack any one of the following three characteristics: (i) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entity's economic performance; (ii) the obligation to absorb the expected losses of the legal entity; or (iii) the right to receive the expected residual returns of the legal entity. Accordingly, entities issuing consolidated financial statements (i.e., a "reporting entity") shall consolidate a VIE if the reporting entity has a "controlling financial interest" in the VIE, as demonstrated by the reporting entity having both (i) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance; and (ii) the right to receive benefits from the VIE that could potentially be significant to the VIE or the obligation to absorb losses of the VIE that could potentially be significant to the VIE.

In evaluating our VIEs for possible consolidation, we perform a qualitative analysis to determine whether or not we have a "controlling financial interest" in the VIE as defined by U.S. GAAP. We consolidate only those VIEs over which we have a controlling financial interest. For the Company’s unconsolidated joint ventures, we use the equity method of accounting. The Company does not currently participate in any significant VIEs in which it has a controlling financial interest.

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Consolidated Statements of Earnings (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended
	Dec. 26, 2014	Dec. 27, 2013
Income Statement [Abstract]
Revenues	$ 3,187,005	$ 3,068,891
Costs and Expenses:
Direct cost of contracts	(2,667,559)	(2,615,200)
Selling, general and administrative expenses	(361,223)	(308,644)
Operating Profit	158,223	145,047
Other Income (Expense):
Interest income	2,276	1,796
Interest expense	(5,318)	191
Miscellaneous expense	(486)	(113)
Total other income (expense), net	(3,528)	1,874
Earnings Before Taxes	154,695	146,921
Income Tax Expense	(48,500)	(47,972)
Net Earnings of the Group	106,195	98,949
Net Earnings Attributable to Noncontrolling Interests	(6,116)	(5,217)
Net Earnings Attributable to Jacobs	$ 100,079	$ 93,732
Net Earnings Per Share:
Basic (in dollars per share)	$ 0.78	$ 0.72
Diluted (in dollars per share)	$ 0.77	$ 0.71

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Long-term Debt

3 Months Ended

Dec. 26, 2014

Debt Disclosure [Abstract]

Long-term Debt

Long-term Debt

Jacobs and certain of its subsidiaries have a $1.6 billion long-term unsecured, revolving credit facility (the "2014 Facility") with a syndicate of large, U.S. and international banks and financial institutions. The 2014 Facility also provides an accordion feature that allows the Company and the lenders to increase the facility amount to $2.1 billion. The 2014 Facility did not change interest rates for borrowings outstanding under the the Company's prior credit facility, but did reduce the fees on the unused portion of the facility.

The total amount outstanding under the 2014 Facility in the form of direct borrowings at December 26, 2014 was $706.6 million. The Company has issued $2.8 million in letters of credit under the 2014 Facility leaving $890.6 million of available borrowing capacity under the 2014 Facility at December 26, 2014. In addition, the Company had $292.4 million issued under separate, committed and uncommitted letter-of-credit facilities for total issued letters of credit of $295.2 million at December 26, 2014.

The 2014 Facility expires inFebruary 2019and permits the Company to borrow undertwoseparate tranches in U.S. dollars, certain specified foreign currencies, and any other currency that may be approved in accordance with the terms of the 2014 Facility. Depending on the Company's Consolidated Leverage Ratio, borrowings under the 2014 Facility will bear interest at either a eurocurrency rate plus a margin of between1.0%and1.5%or a base rate plus a margin of between0%and0.5%. The 2014 Facility also provides for a financial letter of credit subfacility of $300.0 million, permits performance letters of credit, and provides for a $50.0 million subfacility for swingline loans. Letters of credit are subject to fees based on the Company's Consolidated Leverage Ratio at the time any such letter of credit is issued. The Company pays a facility fee of between 0.100% and 0.250% per annum depending on the Company's Consolidated Leverage Ratio. Amounts outstanding under the 2014 Facility may be prepaid at the option of the Company without premium or penalty, subject to customary breakage fees in connection with the prepayment of eurocurrency loans. The 2014 Facility contains affirmative, negative, and financial covenants customary for financings of this type including, among other things, limitations on certain other indebtedness, loans and investments, liens, mergers, asset sales and transactions with affiliates. Inaddition, the 2014 Facility contains customary events of default. We were in compliance with our debt covenants atDecember 26, 2014.

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Property, Equipment and Improvements, Net

3 Months Ended

Dec. 26, 2014

Property, Plant and Equipment [Abstract]

Property, Equipment and Improvements, Net

Property, Equipment and Improvements, Net

Property, Equipment and Improvements, Net in the accompanying Consolidated Balance Sheets at December 26, 2014 and September 26, 2014 consisted of the following (in thousands):

	December 26, 2014			September 26, 2014
Land	$	21,095		$	21,497
Buildings	126,885			128,584
Equipment	630,032			634,415
Leasehold improvements	292,816			287,814
Construction in progress	13,853			20,059
	1,084,681			1,092,369
Accumulated depreciation and amortization	(637,537		)	(635,572		)
	$	447,144		$	456,797

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Disclosures About Defined Pension Benefit Obligations (Tables)

3 Months Ended

Dec. 26, 2014

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Schedule of Pension Plans' Net Benefit Obligation

The following table presents the components of net periodic benefit cost recognized in earnings during each of the three months ended December 26, 2014 and December 27, 2013 (in thousands):

	For the Three Months Ended
Component:	December 26, 2014			December 27, 2013
Service cost	$	8,576		$	10,413
Interest cost	16,658			19,892
Expected return on plan assets	(21,049		)	(22,340		)
Amortization of previously unrecognized items	5,410			4,803
Settlement Loss	59			140
Net periodic benefit cost	$	9,654		$	12,908

Defined Contribution Plans

The following table presents certain information regarding Company cash contributions to our pension plans for fiscal 2015 (in thousands):

Cash contributions made during the first three months of fiscal 2015	$	9,808
Cash contributions we expect to make during the remainder of fiscal 2015	36,396
Total	$	46,204

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Business Combinations (Tables)

3 Months Ended

Dec. 26, 2014

Business Combinations [Abstract]

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed

The following table presents the final purchase price allocation for SKM (in thousands):

Assets:
Cash and cash equivalents	$	152,051
Receivables and other current assets	371,331
Property and equipment, and other	71,630
Intangible assets	202,166
Total assets	797,178
Liabilities:
Current liabilities	351,351
Deferred tax liability	72,656
Long-term liabilities	20,416
Total liabilities	444,423
Net identifiable assets acquired	352,755
Goodwill	866,919
Net assets acquired	$	1,219,674

Schedule of Finite-Lived Intangible Assets Acquired as Part of Business Combination

The following table presents the values assigned to the acquired SKM intangible assets (in thousands):

Customer relationships / backlog	$	193,260
Trade name	8,906
	$	202,166

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Other Comprehensive Income

3 Months Ended

Dec. 26, 2014

Equity [Abstract]

Other Comprehensive Income

Other Comprehensive Income

The following table presents amounts reclassified from change in pension liabilities in other comprehensive income to direct cost of contracts and selling, general and administrative expenses in the Company's Consolidated Statements of Earnings for the three months ended December 26, 2014 and December 27, 2013 related to the Company's defined benefit pension plans (in thousands):

	For the Three Months Ended
	December 26, 2014			December 27, 2013
Amortization of Defined Benefit Items:
Actuarial losses	$	(5,410	)	$	(4,804	)
Prior service cost	24			(25		)
Total Before Income Tax	(5,386		)	(4,829		)
Income Tax Benefit	1,508			1,365
Total Reclassifications, After-tax	$	(3,878	)	$	(3,464	)

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Revenue Accounting for Contracts / Accounting for Joint Ventures

3 Months Ended

Dec. 26, 2014

Revenue Accounting for Contracts / Accounting for Joint Ventures [Abstract]

Revenue Accounting for Contracts / Accounting for Joint Ventures

Revenue Accounting for Contracts / Accounting for Joint Ventures

In general, we recognize revenue 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. For multiple contracts with a single customer we account for each contract separately. We also recognize as revenues, costs associated with claims and unapproved change orders to the extent it is probable that such claims and change orders will result in additional contract revenue, and the amount of such additional revenue can be reliably estimated. A significant portion of the Company's revenue is earned on cost reimbursable contracts. The percentage of revenues realized by the Company by type of contract during fiscal 2014 can be found in Note 1 of Notes to Consolidated Financial Statements included in our 2014 Form 10-K.

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 allowable under the terms of the contract, we estimate the amount of such nonbillable costs and adjust our revenues accordingly.

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

The following table sets forth pass-through costs included in revenues for each of the three months ended December 26, 2014 and December 27, 2013 (in thousands):

	For the Three Months Ended
	December 26, 2014		December 27, 2013
Pass-through costs included in revenues	$	706,830	$	752,023

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

Certain of our joint ventures meet the definition of a "variable interest entity" ("VIE"). As defined in U.S. GAAP, a VIE is a legal entity in which equity investors do not have sufficient equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of the equity investment at risk lack any one of the following three characteristics: (i) the power, through voting rights or similar rights, to direct the activities of a legal entity that most significantly impact the entity's economic performance; (ii) the obligation to absorb the expected losses of the legal entity; or (iii) the right to receive the expected residual returns of the legal entity. Accordingly, entities issuing consolidated financial statements (i.e., a "reporting entity") shall consolidate a VIE if the reporting entity has a "controlling financial interest" in the VIE, as demonstrated by the reporting entity having both (i) the power to direct the activities of a VIE that most significantly impact the VIE's economic performance; and (ii) the right to receive benefits from the VIE that could potentially be significant to the VIE or the obligation to absorb losses of the VIE that could potentially be significant to the VIE.

In evaluating our VIEs for possible consolidation, we perform a qualitative analysis to determine whether or not we have a "controlling financial interest" in the VIE as defined by U.S. GAAP. We consolidate only those VIEs over which we have a controlling financial interest. For the Company’s unconsolidated joint ventures, we use the equity method of accounting. The Company does not currently participate in any significant VIEs in which it has a controlling financial interest.

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Disclosures About Defined Pension Benefit Obligations

3 Months Ended

Dec. 26, 2014

Defined Benefit Pension Plans and Defined Benefit Postretirement Plans Disclosure [Abstract]

Disclosures About Defined Pension Benefit Obligations

Disclosures About Defined Pension Benefit Obligations

The following table presents the components of net periodic benefit cost recognized in earnings during each of the three months ended December 26, 2014 and December 27, 2013 (in thousands):

	For the Three Months Ended
Component:	December 26, 2014			December 27, 2013
Service cost	$	8,576		$	10,413
Interest cost	16,658			19,892
Expected return on plan assets	(21,049		)	(22,340		)
Amortization of previously unrecognized items	5,410			4,803
Settlement Loss	59			140
Net periodic benefit cost	$	9,654		$	12,908

Included in the above table are amounts relating to a U.S. pension plan, the participating employees of which are assigned to, and work exclusively on, a specific operating contract with the U.S. federal government. It is the expectation of the parties to this contract that the cost of this pension plan will be fully reimbursed by the U.S. federal government pursuant to applicable cost accounting standards. The underfunded amount for this pension plan is included in "Other Noncurrent Assets" in the accompanying Consolidated Balance Sheets at December 26, 2014. Net periodic pension costs for this pension plan for the three months ended December 26, 2014 and December 27, 2013 were $1.5 million and $1.9 million, respectively. Amounts related to the amortization of previously unrecognized items for this pension plan for the three months ended December 26, 2014 and December 27, 2013 were approximately zero.

The following table presents certain information regarding Company cash contributions to our pension plans for fiscal 2015 (in thousands):

Cash contributions made during the first three months of fiscal 2015	$	9,808
Cash contributions we expect to make during the remainder of fiscal 2015	36,396
Total	$	46,204

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Earnings Per Share and Certain Related Information

3 Months Ended

Dec. 26, 2014

Earnings Per Share Reconciliation [Abstract]

Earnings Per Share and Certain Related Information

Earnings Per Share and Certain Related Information

The following table (i) reconciles the denominator used to compute basic earnings per share ("EPS") to the denominator used to compute diluted EPS for the three months ended December 26, 2014 and December 27, 2013; (ii) provides information regarding the number of non-qualified stock options and shares of restricted stock that were antidilutive and therefore disregarded in calculating the weighted average number of shares outstanding used in computing diluted EPS; and (iii) provides the number of shares of common stock issued from the exercise of stock options and the release of restricted stock (in thousands):

	For the Three Months Ended
	December 26, 2014	December 27, 2013
Shares used to calculate EPS:
Weighted average shares outstanding (denominator used to compute basic EPS)	128,652	130,121
Effect of stock options and restricted stock	1,321	2,059
Denominator used to compute diluted EPS	129,973	132,180
Antidilutive stock options and restricted stock	3,169	1,632
Shares of common stock issued from the exercise of stock options and the release of restricted stock	396	195

Share Repurchases

On August 19, 2014, the Company's Board of Directors authorized a new share repurchase program of up to $500 million of the Company's common stock. The following table summarizes the activity under this program from the authorization date (in thousands, except per-share amounts):

Amount Authorized	Average Price Per Share (1)	Total Shares Retired	Shares Repurchased
$500,000	$48.0266	4,000	4,000

(1) Includes commissions paid and calculated as the average price per share since the repurchase

program authorization date.

Share repurchases may be executed through various means including, without limitation, open market transactions, privately negotiated transactions or otherwise. The share repurchase program does not obligate the Company to purchase any shares, and expires on August 19, 2017. The authorization for the share repurchase program may be terminated, increased or decreased by the Company’s Board of Directors in its discretion at any time.

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Disclosures About Defined Pension Benefit Obligations (Narrative) (Details) (USD $)	3 Months Ended
	Dec. 26, 2014	Dec. 27, 2013
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Net periodic pension costs	$ 9,654,000	$ 12,908,000
U.S. Pension Plan
Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]
Net periodic pension costs	1,500,000	1,900,000
Amortization of previously unrecognized items	$ 0	$ 0

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Property, Equipment and Improvements, Net (Tables)

3 Months Ended

Dec. 26, 2014

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment

Property, Equipment and Improvements, Net in the accompanying Consolidated Balance Sheets at December 26, 2014 and September 26, 2014 consisted of the following (in thousands):

	December 26, 2014			September 26, 2014
Land	$	21,095		$	21,497
Buildings	126,885			128,584
Equipment	630,032			634,415
Leasehold improvements	292,816			287,814
Construction in progress	13,853			20,059
	1,084,681			1,092,369
Accumulated depreciation and amortization	(637,537		)	(635,572		)
	$	447,144		$	456,797

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Business Combinations (Details) (USD $) In Billions, unless otherwise specified	0 Months Ended	3 Months Ended
	Dec. 13, 2013	Dec. 26, 2014	Sep. 26, 2014
Sinclair Knight Merz
Business Acquisition [Line Items]
Payments to acquire business	$ 1.2
Zamel and Turbag Consulting Engineers Company (ZATE)
Business Acquisition [Line Items]
Additional interest acquired (percent)			75.00%
Total ownership (percent)			15.00%
Minimum | Sinclair Knight Merz
Business Acquisition [Line Items]
Useful life of intangibles (duration)		3 years
Maximum | Sinclair Knight Merz
Business Acquisition [Line Items]
Useful life of intangibles (duration)		12 years

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Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Dec. 26, 2014	Dec. 27, 2013
Statement of Comprehensive Income [Abstract]
Net Earnings of the Group	$ 106,195	$ 98,949
Other Comprehensive Income (Loss):
Foreign currency translation adjustment	(48,373)	(9,255)
Gain (loss) on cash flow hedges	(1,919)	551
Change in pension liabilities	14,643	(6,736)
Other comprehensive loss before taxes	(35,649)	(15,440)
Income Tax Benefit (Expense):
Foreign currency translation adjustments	0	3,250
Cash flow hedges	622	(198)
Change in pension liabilities	(2,928)	1,749
Income Tax Benefit (Expense)	(2,306)	4,801
Net Other Comprehensive Loss	(37,955)	(10,639)
Net Comprehensive Income of the Group	68,240	88,310
Net Comprehensive Income Attributable to Noncontrolling Interests	(6,116)	(5,217)
Net Comprehensive Income Attributable to Jacobs	$ 62,124	$ 83,093

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Receivables

3 Months Ended

Dec. 26, 2014

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Receivables

Receivables

The following table presents the components of "Receivables" appearing in the accompanying Consolidated Balance Sheets at December 26, 2014 and September 26, 2014 as well as certain other related information (in thousands):

	December 26, 2014		September 26, 2014
Components of receivables:
Amounts billed	$	1,431,225	$	1,425,341
Unbilled receivables and other	1,219,207		1,368,482
Retentions receivable	83,079		73,732
Total receivables, net	$	2,733,511	$	2,867,555
Other information about receivables:
Amounts due from the United States federal government,     included above, net of advanced billings	$	377,088	$	324,928
Claims receivable	$	50,972	$	78,634

Billed receivables consist of amounts invoiced to clients in accordance with the terms of our client contracts and are shown net of an allowance for doubtful accounts. We anticipate that substantially all of such billed amounts will be collected over the next twelve months.

Unbilled receivables and retentions receivable 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. We anticipate that substantially all of such unbilled amounts will be billed and collected over the next twelve months.

Claims receivable are included in "Receivables" in the accompanying Consolidated Balance Sheets and represent certain 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.

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Business Combinations (Allocation of Purchase Price) (Details) (USD $) In Thousands, unless otherwise specified	Dec. 26, 2014	Sep. 26, 2014	Dec. 13, 2013
Liabilities:
Goodwill	$ 3,046,706	$ 3,026,349
Sinclair Knight Merz
Assets:
Cash and cash equivalents			152,051
Receivables and other current assets			371,331
Property and equipment, and other			71,630
Intangible assets	202,166		202,166
Total assets			797,178
Liabilities:
Current liabilities			351,351
Deferred tax liability			72,656
Long-term liabilities			20,416
Total liabilities			444,423
Net identifiable assets acquired			352,755
Goodwill			866,919
Net assets acquired			$ 1,219,674

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Commitments and Contingencies (Details) (Pending Litigation, Motiva vs. Bechtel-Jacobs CEP Port Arthur Joint Venture, USD $) In Billions, unless otherwise specified	0 Months Ended
	Aug. 09, 2014
Pending Litigation | Motiva vs. Bechtel-Jacobs CEP Port Arthur Joint Venture
Loss Contingencies [Line Items]
Damages sought (more than)	$ 7

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Receivables (Tables)

3 Months Ended

Dec. 26, 2014

Accounts, Notes, Loans and Financing Receivable, Gross, Allowance, and Net [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable

The following table presents the components of "Receivables" appearing in the accompanying Consolidated Balance Sheets at December 26, 2014 and September 26, 2014 as well as certain other related information (in thousands):

	December 26, 2014		September 26, 2014
Components of receivables:
Amounts billed	$	1,431,225	$	1,425,341
Unbilled receivables and other	1,219,207		1,368,482
Retentions receivable	83,079		73,732
Total receivables, net	$	2,733,511	$	2,867,555
Other information about receivables:
Amounts due from the United States federal government,     included above, net of advanced billings	$	377,088	$	324,928
Claims receivable	$	50,972	$	78,634