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jacobs_08AR

  1. 1. 2008 SUMMARY ANNUAL REPORT
  2. 2. SELECTED FINANCIAL HIGHLIGHTS For Fiscal Years Ended September 30 (dollars in thousands, except per share information): 2008 2007 2006 Revenues $ 11,252,159 $ 8,473,970 $ 7,421,270 Net earnings 420,742 287,130 196,883 Per share information: Basic EPS $ 3.47 $ 2.42 $ 1.69 Diluted EPS 3.38 2.35 1.64 Stockholders’ equity 18.30 15.34 12.06 Closing year-end stock price 54.31 75.58 37.37 Total assets $ 4,278,238 $ 3,389,421 $ 2,853,884 Stockholders’ equity 2,245,147 1,843,662 1,423,214 Return on average equity 20.58 % 17.58 % 15.21 % Stockholders of record 1,408 1,193 1,106 Backlog: Technical professional services $ 8,085,200 $ 6,188,500 $ 5,153,400 Total 16,696,600 13,585,800 9,777,700 Permanent staff 43,700 36,400 31,700 $ 11,252,159 $ 16,696,600 $ 420,742 $ 13,585,800 $ 8,473,970 $ 7,421,270 $ 9,777,700 $ 287,130 $ 196,883 06 07 08 06 07 08 06 07 08 NET EARNINGS TOTAL BACKLOG REV ENUES in thousands in thousands in thousands | www.jacobs.com page 1
  3. 3. To Our Shareholders, Customers, & Employees: FISCAL YEAR 2008 MARKED another excellent year safety performance in almost every aspect we measure. for the company. Our financial performance and other The question: “How do we go beyond zero incidents and metrics exceeded our expectations. Our earnings grew injuries?” has inspired our organization to a deeper, richer, dramatically and we finished our year with the highest emotional commitment to the safety of our employees, year-end backlog in our history. Our cash position is their families, their friends, even strangers. While we have a equally strong—we had $547.8 million in net cash as of lot left to do, we are highly optimistic about the results. September 30—supplemented by available lines-of-credit A very important measurement of how our client at very attractive rates. relationships are doing is reflected in their feedback. This As our earnings grew, our employee base grew year, we reached a milestone with our average quality too. Through a combination of acquisitions and active survey score rising to 90.5 percent, up from last year’s 89.9 recruitment, we added 7,900 employees during the year. percent. This milestone is significant as our data suggests a Recruiting people in 2008 wasn’t easy; there was fierce substantial amount of client loyalty begins to accrue to the competition for good talent. We are pleased that so many company when our performance is above the 90 percent people chose Jacobs. level. We continue to build on the culture of continuous The year was also a good one from an acquisitions improvement that our quality system provides, giving us a perspective. We added Carter & Burgess in the U.S. and meaningful competitive advantage. L.E.S. in the U.K. as well as a controlling interest in Zamel Unique to Jacobs’ culture is our constant drive to & Turbag Engineers in Saudi Arabia, and a minority provide our clients with real, meaningful, and differentiated interest in CES Ltd. in India. We are very excited about the value. Our Jacobs Value Plus program identifies cost contributions these firms will make to Jacobs’ continuing savings, cost avoidances, and performance improvements growth. that we make on our projects. This year, our team delivered We were also very pleased with our performance in almost $2.6 billion in client-validated savings. Our clients’ SM this first year of implementation of our BeyondZero recognition of these savings helps reinforce that they SM program. While BeyondZero is broader than safety, we continue to make the right choice with Jacobs year after are already seeing significant results in our safety metrics. year. Fast forward to today. The tail wind that helped To our delight, we saw double digit improvements in our drive our performance over the last three years is gone. SHAREHOLDERS MESSAGE 2008 SUMMARY ANNUAL REPORT FY08 highlights: • Record revenues of $11.3 billion. • Record net earnings of $420.7 million. • Backlog of $16.7 billion, an increase of $3.1 billion from September 30, 2007. • Net cash of over $500 million. • Fiscal 2008 diluted EPS increased 43.8% to $3.38 per share. • Our highest quality scores. • Almost $2.6 billion in savings to our clients through our Value Plus program. | page 2 2008 Summary Annual Report - Shareholders Message
  4. 4. Commodity prices have dropped dramatically, the housing We had a change in the Board of Directors this year with market remains stalled, the financial markets are in a the retirement of Dr. Dale R. Laurance, a 14-year veteran. crisis, and much of the world is in recession. Several words Dale was a major contributor and brought significant describe the conditions in our marketplace—challenging is insight to us over the years. He will be missed. We are one, turbulent is another. Another word also describes it: fortunate to add another strong director in John F. Coyne. opportune. John serves as President and Chief Executive Officer of Why are these times opportune? Our company’s core Western Digital Corporation. John is already proving to be values and business approach are ideal for addressing the a great contributor to the leadership and support our Board conditions we face. Our deep, lasting relationships with provides. our customers, our commitment to having the very best FY2008 was an outstanding year for the company. talent, and our commitment to long-term growth put us in While FY2009 looks to be more testing, we are confident we an excellent position to address today’s markets. We have can continue to grow in the years to come. Whether you seen these market conditions before, in different forms, and are a shareholder, employee, or customer, we thank you for structured our business to address them. There are several your commitment to our company and look forward to a things we do well that are critical to our success: bright future together. • Maintaining deep, lasting relationships with our core clients. Keep yourselves and your loved ones safe, • Focusing on the base-load business that drives our company. • Maintaining a flexible, very low-cost operating model. • Transferring work to where it can be performed most economically. Craig L. Martin • Performing our projects and providing our services flawlessly. President & Chief Executive Officer (below right) These capabilities, driven by our core values, enable us to capture market share and to do so profitably. Noel G. Watson Coupling them with our diversity of markets, services, and Chairman of the Board geographies puts us in an excellent position to continue to (seated below left) grow in challenging times. It is an opportune time for us. SHAREHOLDERS MESSAGE | www.jacobs.com page 3
  5. 5. REFINING [page 6] • Crude/vacuum units • Conversion: FCCU, hydroprocessing, coking • Clean fuels: gasoline and diesel • Reforming/aromatics • Treating/sulfur removal INFRASTRUCTURE [page 8] • Roadways, bridges, and Intelligent Transportation Systems • Railroads and transit • Water/wastewater conveyance and treatment • Underground structures and tunnels • Locks, dams, ports, and marine • Aviation PHARMACEUTICALS & BIOTECHNOLOGY [page 10] • Sterile products manufacturing • Bulk pharmaceuticals • Pharmaceutical finishing • Biotechnology • Fine chemicals • Research & development laboratories and pilot plants BUILDINGS [page 12] • Government: administrative, security, and defense installations • Health/research: replacement hospitals and advanced research • Education: K-12 and higher education • Justice: courts, prisons, and jails • Corporate buildings and industrial installations • Retail and mixed-use centers, recreation complexes, & commercial facilities MARKET PROFILE 2008 SUMMARY ANNUAL REPORT CONSUMER & FOREST PRODUCTS [page 14] • Food processing, packaging, and material handling • Malting, brewing, fermenting, and blending processes • Bottle, can, and keg packaging • New paper machines and rebuilds • Personal care product facilities • Converting and packaging • Mill optimization—energy/utility maintenance and shutdowns AUTOMOTIVE & INDUSTRIAL [page 16] • Building, equipment, and systems layout and integration • Automotive test facilities: powertrain test cells, emissions chambers, climatic wind tunnels, and aero/acoustic wind tunnels • Test facilities operations, maintenance, and metrology • Modeling and simulation | page 4 2008 Summary Annual Report - Market Profile
  6. 6. CHEMICALS & BASIC RESOURCES [page 18] • Organic/inorganic chemicals • Olefins • Polyolefins • Specialty polymers • Phosphates and potash TECHNOLOGY [page 20] • High-energy physics installations • Nanoscience research and production facilities • Semiconductor facility base build programming, tool installation, and sustaining engineering ENVIRONMENTAL PROGRAMS [page 22] • Accelerated environmental cleanup • Infrastructure sustainment, restoration, and modernization • Nuclear facilities decontamination and decommissioning • Chemical and explosive ordnance demilitarization • Environmental consulting, contaminated lands, and flood control OIL & GAS [page 24] • Gas compression/transmission/treatment/handling • Sulfur recovery • Water treatment, disposal, and water flooding • Offshore platforms and topsides • Oil and gas production • Heavy oil production and oil sands extraction From concept to completion and on to operation and maintenance, we provide clients with the full range of professional and technical services in 11 markets. AEROSPACE & DEFENSE [page 26] • Technical, engineering, and scientific mission support • Information technology and enterprise information support • Advanced aerospace research/development/test & evaluation facilities and laboratories MARKET PROFILE | www.jacobs.com page 5
  7. 7. 1 For BP’s Amsterdam Terminal in The Netherlands, we are “Jacobs’ technical competency and level of professionalism providing EPCM services for their Theseus project—an effort are excellent. Their participation added a lot of value to to expand the throughput capacity of the largest BP terminal our project.” in Europe by more than 50 percent, further strengthening the terminal as a strategic link in BP’s European fuel products supply Waleed Shammari, Project Engineer, and distribution network. The project includes safely constructing Saudi Aramco Oil Company a new combined jetty capable of handling sea ships and barges Saudi Arabia simultaneously all on a very tight schedule and while minimizing disruption to ongoing terminal operations. 2 Our scope for the ExxonMobil Creep Projects included preliminary design, detailed design, procurement, and construction management at the Antwerp refinery in Belgium. Working in an integrated approach with ExxonMobil personnel, 2 the team’s proactive safety efforts resulted in more than 125,000 work hours with zero incidents. The projects were completed on schedule and 10 percent under the final approved total installed cost. The higher than foreseen increase in capacity has the potential of increasing yearly revenues for ExxonMobil considerably. 3 The Irving Oil refinery in St. John, New Brunswick, is the largest in Canada, producing over 300,000 barrels of finished energy products per day. We have provided ongoing maintenance, small capital project, and turnaround services to Irving Oil since 1991. Performance Centered Maintenance is a new initiative with Irving 3 Oil that is redefining contract maintenance in Canada, effectively integrating our two firms and creating a strategic partnership to increase reliability and drive efficiencies. 4 Work continues at the Motiva Port Arthur Refinery Expansion project in southeast Texas, including this gas turbine generator recently set in the Power Station 4 unit. We’re working in joint venture as the prime engineering, procurement, and construction contractor for the project, which will increase the refinery’s throughput by 12 million gallons of diesel and jet fuel per day. REFINING 2008 SUMMARY ANNUAL REPORT 4 “Our client has a can-do attitude and works with us to make the job successful. Having such a close and collaborative relation- ship has allowed me to approach our client about all aspects of the project, Jacobs scope or not, and share lessons learned and ideas about how we can improve as a whole.” Christy D., Project Engineer, Borger, Texas | page 6 2008 Summary Annual Report - Refining
  8. 8. 1 REFINING VOLATILE CRUDE OIL PRICES and declining demand by providing full-service engineering, design, modular squeezed refining margins in 2008 although capital investment fabrication, construction, construction management, and asset momentum remained strong. In Europe/North America, management and maintenance services, most often through the investment emphasis is with existing assets to improve long-term partnering and alliance agreements. feedstock flexibility and shift the product slate to higher margin, The refining outlook for 2009 is challenging, with forecasted middle distillate products. Investments in regulatory driven soft demand and continued volatility in crude prices. While projects remained strong with MSAT II (benzene removal) and independent refiners may curtail investment due to cash flow ultra low sulfur diesel projects in full execution mode. and financing constraints, we expect our core client group of In countries with oil & gas reserves or high consumption major, diversified oil companies to continue investing apace growth, major investments in new capacity are nearing to capitalize on market opportunities while taking advantage completion which may exacerbate the short-term oversupply of lower capital costs. We are ideally positioned to help them problem in refining capacity. New investments will continue, achieve maximum value from their assets and target the best but at a slower pace. We support such capital investments new investments in these challenging times. | www.jacobs.com page 7
  9. 9. “Jacobs is doing an excellent job; we admire the flexibility 1 In Philadelphia, we managed the $710 million Southeastern in accommodating our demand for attention to detail Pennsylvania Transportation Authority’s (SEPTA) Market Street and providing the level of services that are required. The Elevated Project. This project required that weekday service level of communication is great. We need to be sensitive be maintained throughout the demolition and reconstruction of and supportive to the community and their interests, and a 2.2 mile elevated transit line and the construction of six new Jacobs is providing unprecedented program information transit stations to service it. for residents affected by our work.” 2 For the Environment Agency’s Cockshaw Catchment, we designed a flood alleviation system including environmental Glenn Gex, Project Manager, enhancements that incorporate artistic embellishments as well City of Atlanta, Department of Watershed Management as engineering solutions—all in a conservation area of the historic town of Hexham in northeast England. The scheme won the top award in the 2008 ICE Robert Stephenson Awards for project excellence. 2 3 In a design-build project for Florida’s Turnpike Enterprise, we modified two toll plazas on the Florida’s Turnpike to create open road tolling (ORT) lanes that allow drivers with SunPass transponders to pass through the plazas without slowing down. The entire project development and construction was completed in seven months at the Bird Road and Homestead toll plazas, easing congestion while improving safety and customer service at these busy locations. 4 We are helping Sound Transit on its mission to build regional transit to improve mobility for the Puget Sound. We provided 3 design services for the Beacon Hill Tunnel project, and construction management for a section of the Central Link Initial Segment. We were also recently awarded a contract to provide construction management services for the University Link extension connecting the Sea-Tac Airport and Downtown Seattle with the University of Washington. Sound Transit recently passed a measure to add 36 miles of light rail to its Central Link. INFRASTRUCTURE 2008 SUMMARY ANNUAL REPORT 4 “Working for a company with a diverse range of people and skills at its disposal is something I like. If there is an issue on site that cannot be readily resolved, there is someone in our global organization who will be able to provide the advice required. By using company depth, delivering quality pieces of work to time and cost, and communicating regularly, we give the client confidence in our capabilities as an organization.” Colin M., Engineering Geologist, Scrabster, Scotland | page 8 2008 Summary Annual Report - Infrastructure
  10. 10. 1 INFRASTRUCTURE SPENDING FOR MAJOR INFRASTRUCTURE programs traditional and alternative delivery methods such as design- will substantially increase as governments develop economic build and public-private partnerships. For the San Francisco stimulus packages. Aging infrastructure around the world Public Utilities Commission, for example, we were awarded requires maintenance, retrofit, upgrade, or replacement. In construction management contracts with a combined total addition, spending for infrastructure continues to expand in installed cost of $820 million. less developed countries as new funds become available. The infrastructure market in the U.K. and Ireland remains In the U.S., funding for roads, aviation, and transit programs at significantly high levels in the rail and energy sectors. The remains stable and many long-delayed water infrastructure highways sector will benefit from economic stimulus packages programs are being implemented. To drive key project to progress prioritized technology-led highway designs. The completion, national spending is complemented by state and water industry will continue to spend at normal levels to meet local infrastructure funding initiatives, many of which were standards set by European Union directives. While worldwide approved in the recent U.S. national, state, and local elections. economic issues may slow the pace of new projects, we see We are key delivery partners with our clients, supporting infrastructure markets remaining strong. | www.jacobs.com page 9
  11. 11. 1 We continued our long-term relationship with Wyeth by “Jacobs’ safety compliance is good and their record is delivering the design, construction, and commissioning of a excellent. They are responsive and will jump through biopharmaceutical development facility expansion at Wyeth’s hoops when we need something. Their quality of work Grange Castle, Dublin, Ireland site. Diligent planning and is very good as well.” close interaction with Wyeth ensured the 300,000+ workhour EPCM project was completed safely without any unscheduled Steve Hines, Construction Superintendent, interruptions, within budget, and two months ahead of schedule. Bayer Baytown, Texas 2 Siemens Healthcare Diagnostics is the world’s leading manufacturer of in-vitro diagnostic products. The site at Walpole, Massachusetts, is arguably the largest immunodiagnostic manufacturing facility in the world as a result of the completion of a $110 million expansion program. We worked as an integrated team with Siemens to effectively expand the facility 2 to beyond 500,000 square feet. Using state-of-the-art process and engineering solutions, we were able to complete the facility three months ahead of schedule. 3 We provided engineering, procurement, and modular services for Genentech’s new Lucentis© facility in Singapore. Our modular approach accelerated the schedule by six months and mitigated the impact of a shortage of skilled craft labor. 4 Our 10-year relationship with Boehringer Ingelheim (BI) continues with full EPCM services for the S5 Production Expansion in Petersburg, Virginia. The cGMP-compliant facility 3 will produce Bulk Active Pharmaceutical Ingredients for AIDS and Hypertension drug formulations. BI fully embraced our BeyondZeroSM Culture of Caring Safety Program—helping us achieve zero incidents. PHARMACEUTICALS & BIOTECHNOLOGY 2008 SUMMARY ANNUAL REPORT 4 “I enjoy having the opportunity to work with highly skilled and motivated people in a safe and friendly atmosphere. The different types of projects and interaction of a multitude of different disciplines provides me with opportunities and challenges that I really like.” David B., Structural Department General Foreman, Charleston, South Carolina | page 10 2008 Summary Annual Report - Pharmaceuticals & Biotechnology
  12. 12. 1 PHARMACEUTICALS & BIOTECHNOLOGY GLOBALLY, THE DEMAND FOR PHARMACEUTICAL and and facility management and maintenance services to help biotechnology products continues to grow but these markets lower costs. are changing, with cost pressures, increased competition from Biodefense is a growing market as countries and companies generics, and emerging markets driving our clients to retool develop and stockpile strategic medical countermeasures for their business strategies. Development/acquisition of new known and emerging threats. We are designing and building drugs remains a central priority, driving continued investment plants based on both conventional technologies and pioneering in R&D and related facilities. Competitive cost pressures are cell culture platforms. The critical need to build a robust forcing clients to examine manufacturing capacity, with many infrastructure of vaccine manufacturing capacity remains. centers in the U.S. and Europe being retooled and consolidated We provide consulting, engineering, construction, modular and new campuses developed in cost-advantaged regions. We fabrication, asset management, and maintenance services. are well positioned to assist our clients, with consulting services Using lean design and execution methods, we continue to and plant modifications to optimize traditional manufacturing reduce the product-to-market cycle times, retain our leadership centers, new asset deployment in Asia and Central Europe, position, and advance our clients’ competitiveness. | www.jacobs.com page 11
  13. 13. 1 We are providing construction management services for “I want to thank Jacobs for its key role in making our vision Los Angeles County + University of Southern California’s for Janelia Farms a reality. I’m pleased to say that Jacobs (LAC+USC’s) new $925 million, 1.5 million-square-foot consistently achieved the very highest of expectations. replacement hospital. The new facility replaces a building that The Institute relied heavily on their experience when they has been Los Angeles’ primary public healthcare provider for authorized the project to proceed. It is clear now that their more than 70 years. Our review of the original plans resulted trust was well placed. The project met its quality, cost, and in an alternative approach that reduced the overall project schedule objectives.” schedule and costs. Robert H. McGhee, Institute Architect and Senior Facilities Officer, United States Army Corps of Engineers 2 For the international fashion and lifestyle brand Diesel, we are Howard Hughes Medical Institute, Houston, Texas serving as designers and project and construction managers on two major investments—“Diesel Village,” their new world headquarters under construction near Vicenza in Italy and the recently completed showroom and commercial offices in Milan, 2 shown here. Along with Diesel’s Creative Team, we produced a design that satisfies innovative criteria for eco-sustainability and high energy-efficient buildings, while using our project management skills to successfully drive the schedule for on- time completion. 3 We are providing project management and construction supervision for the new $249 million Capital Plaza development in Abu Dhabi for the Real Estate for Investment and Services Company. Programmed at about 247,000 square meters of gross area, the complex includes three apartment towers, an office tower, and a five-star hotel. 3 4 The Fort Bliss Expansion program in Texas represents the largest construction effort by the U.S. Army since World War II. We are providing land development engineering and architectural/engineering design services supporting the $4.4 billion program that will be home for more than 50,000 soldiers and their family members stationed there by 2011. The program encompasses over 4,500 acres of green-field development, more than 1,000 acres of major Army airfield area upgrades, and multiple infill projects within the 3,000-acre historic Fort Bliss main post. BUILDINGS 2008 SUMMARY ANNUAL REPORT 4 “With an army of professionals and experts, and the accommodation of construction administration on site with the ability to resolve issues immediately, our project achieved the desired performance criteria needed for every single hospital department. Jacobs’ full service approach presents me with a spectrum of position opportunities rarely found in a purely engineering company.” Harry T., IPT Project Engineer, Los Angeles, California | page 12 2008 Summary Annual Report - Buildings
  14. 14. 1 BUILDINGS STRONG GLOBAL OPPORTUNITIES CONTINUE in mission-critical facilities, power and energy, major primary the buildings market, especially for defense, government, and secondary education capital improvement programs, healthcare, research, and education facilities. Both new state and local government courts and correctional facilities, building design and construction and renovations are as well as hospitals and health & research facilities. emphasizing energy efficiencies and renewable energy We expect these trends to continue in the coming years. resources. Together with U.S. military global repositioning Using advance planning tools such as our charrette and and base realignment, we see continued strong demand interactive planning processes, as well as state-of-the-art for design, program, and construction management for our visualization and Building Information Modeling techniques, buildings business. we help our clients maximize return on investment on real We continue to focus our efforts and resources in capital expenditures while meeting functional requirements. segments where capital spending initiatives drive demand and where changes and advances in technology require innovative, value-adding solutions. Typical projects include | www.jacobs.com page 13
  15. 15. 1 SP Newsprint, one of the most efficient producers of paper “I feel that Jacobs has the best craft that the union halls products, has maintained market position over the past 10 years have to offer on the various maintenance, turnaround, by reducing energy consumption, improving production, and and small capital services projects. This team continues to streamlining work processes. Working in partnership on these look for ways to be more efficient and they are 100 percent efforts, we provide consulting, engineering, and construction supportive of our needs to reduce cost.” services for a wide range of projects involving the paper machine as well as de-ink, TMP, power, and cogeneration Jeff Sadler, Project Manager, processes throughout the Newberg, Oregon, mill. MeadWestvaco Corp. Wickcliffe, Kentucky 2 Our global experience and local presence in diverse regions of the world allow our clients to exploit growth opportunities in developing markets. In the last year, we consulted for or executed work across Europe, Asia, as well as North and South America. 2 3 Our breadth of services from front-end consulting through construction and maintenance enables owners to reduce production costs by enhancing their top performing assets to produce differentiated high-value products. 4 With over $81 million in approved value-plus savings ideas in 2008 for our consumer and forest products clients, we demonstrated that our best practices and work process are effective in helping owners maximize the value of every dollar spent. 3 CONSUMER & FOREST PRODUCTS 2008 SUMMARY ANNUAL REPORT 4 “Jacobs is a global company that opens the doors for different and new opportunities around the world, providing the opportunity to work with a multi-national team. The opportunity to learn from this mosaic of people was an excellent growing experience both in my personal life and professional career. This is when your client/con- tractor relationship expedites projects, saves time and money, and creates opportunities to identify unique solutions.” Carlos C., Electrical Engineer, Appleton, Wisconsin | page 14 2008 Summary Annual Report - Consumer & Forest Products
  16. 16. 1 CONSUMER & FOREST PRODUCTS Our consumer and forest products clients face a The majority of our client relationships in this market are competitive and dynamic market. Success comes through long-term alliances with large global players. Our alliance product innovation and driving cost efficiencies by deploying model enables us to help clients plan the efficient delivery new technology and optimizing supply and delivery chain of new plants and equipment, shortening time-to-market logistics. To remain competitive and continue to grow, for new products. Long-term associations provide our teams these clients are on the move—expanding into lower cost with a deep understanding of our clients’ business drivers and production centers and regions with rapidly emerging challenges—making us more effective solution providers than consumer segments. At the end of 2008 and looking into 2009, traditional owner/contractor models. the global environment is challenging, with softened demand Our expertise is broad and deep—beginning with raw in the largest end markets of North America and Europe and materials processing through converting, packaging and slowing growth in Asia. Capital is at a premium and the need distribution. Whether our clients need assistance complying to efficiently deliver the right projects is critical—precisely the with environmental regulations or designing a new factory, environment where we bring best value. we bring a world of experience to support them. | www.jacobs.com page 15
  17. 17. 1 Following completion of our design/build work this summer for “Jacobs responsiveness is so impressive, it leaves me Wind Shear Inc.’s wind tunnel in Concord, North Carolina, our speechless. Each employee knows what to do on the commercial operations group assumed responsibility for test Advanced Materials Engineering Services Project and operations and maintenance. As the only commercially available they all work together to support each other.” full-scale wide belt rolling road wind tunnel, the facility’s first year schedule, based on a single, 10-hour shift operation, is Laura Soreide, Materials Manager, sold out. Automotive Components Holding Dearborn, Michigan 2 For BMW, we completed design-build delivery of the Aerothermisches Versuchszentrum (AVZ) facility in Munich, Germany. The AVZ facility contains two separate wind tunnels and a multi-story support building. The advances in aerodynamic performance we delivered at AVZ represent a dramatic breakthrough for the state-of-the-art in open jet wind 2 tunnels. 3 As part of our global consultant relationship with POWEO, we are their owner engineer for a new 400 MW single shaft combined cycle power station at Pont sur Sambre, France. The new plant will confirm POWEO Group’s positioning on the open energy market and secure their production. 4 Wind tunnel testing of race vehicles has been shown to provide a significant competitive advantage by duplicating aerodynamic conditions seen on the track in the controlled environment of a wind tunnel test cell. With our CFD model, we can run 3 simulations of actual customer vehicles, on actual tracks under actual environmental and competitive conditions. This removes the guesswork and makes sure the design will work as planned before the facility is constructed, thereby reducing customer risk. AUTOMOTIVE & INDUSTRIAL 2008 SUMMARY ANNUAL REPORT 4 “As a Jacobs’ Construction Manager, I’m fortunate to have traveled the world building best-in-class technical facilities for automakers, motor sport teams, and aerospace companies. By working on site, I interface with our clients and subcontractors daily to expedite our project tasks in accordance with schedule, budget, and technical specifications, ensuring we are meeting and exceeding client expectations.” Fred F., Construction Manager, Southfield, Michigan | page 16 2008 Summary Annual Report - Automotive & Industrial
  18. 18. 1 AUTOMOTIVE & INDUSTRIAL THE CHALLENGES FACING GLOBAL AUTOMAKERS, capital projects and services that include long-range studies, and especially the Detroit 3, dominated the economic news supplying specialized hardware/software, computer-based for much of the past year. Gasoline and other consumer analysis coupled with road-to-lab activities, state-of-the-art prices exhibited record fluctuations and financial market data acquisition and controls systems, and facility operations. uncertainties contributed to suppressed consumer demand for For the automotive race community, we now execute asset vehicles—dropping more than 20 percent worldwide. Despite a management of directed-air and other test facilities which, reduced amount of infrastructure spending by automakers, our in most cases, we designed and built. These facilities are emphasis on providing total solutions—design, construction, intended to provide a technical advantage to race teams and and operation of high-technology test facilities—enables us to original equipment manufacturers as they compete within the maintain our business volume in this turbulent marketplace NASCAR, Formula 1, and other racing series. and grow in specific areas. By supplying long-term maintenance and operations Given depressed spending levels on major capital projects, services, we provide our clients with uninterrupted support relative to historical levels, our current work focuses on small and bring greater stability to our business. | www.jacobs.com page 17
  19. 19. © 1 Stanyl high performance polyamide from DSM Engineering “When we need services from Jacobs, we get them—even on Plastics provides unique advantages with applications in the nights and weekends. We also receive an excellent response electronics and automotive industries amongst others. We when we change priorities. The group is doing a very good provided conceptual and basic design and complete EPCM job of providing quality services. We have set some de- services for the Stanyl-2 capacity expansion project at the manding schedules and the group has delivered in all cases Chemelot site in Geleen, The Netherlands. Efficient project and helped us meet our business needs.” execution, early procurement, and applying our interactive planning best practice facilitated starting construction activities Charlie Gasperetti, Site General Manager, after only four months of detailed design. ISP Lima LLC Lima, Ohio 2 Our engineering, subcontract administration, construction management, and start-up services enabled CPChem to: a) upgrade the control system for the Cedar Bayou ethylene plant in Texas and associated utilities to the latest distributed 2 control system (DCS); and b) design and construct a new 17,500-square-foot control building that integrates architectural function and circulation requirements with the required blast- resistant design and the DCS system design. 3 We are providing EPCM services to CIBA Specialty Chemicals for their multi-product antioxidant plant in Singapore. With two units already operational, and the remaining two units in different stages of construction, we have already crossed 2 million workhours without a lost-time incident. 4 Since 2003, we have been in partnership with Borealis in 3 Belgium working as an integrated team to manage and execute their small capex work, coming to about $35 million annually. We provide services from front-end loading through EPCM for their facilities in Beringen, Kallo, and Zwijnrecht. Recent performance includes over 600,000 workhours with zero incidents since 2005, 97 percent TIC accuracy, and over $3 million in client-approved value engineering savings. CHEMICALS & BASIC RESOURCES 2008 SUMMARY ANNUAL REPORT 4 “Here in Mumbai, India, we have worked on different kinds of projects which keep us safe, hone our skills, and help us grow. Maintaining an enduring and transparent relationship with our clients and working with offices worldwide helps me address client concerns efficiently and effectively. Working with Jacobs has become a way of life for me. Our company’s core values and goals relate to my personal values and goals. This makes them easy to apply.” Kaveri U., Chief Engineer, Process Engineering Department, Mumbai, India | page 18 2008 Summary Annual Report - Chemical & Basic Resources
  20. 20. 1 CHEMICALS & BASIC RESOURCES THE CHEMICALS AND BASIC RESOURCES MARKETS construction, modular fabrication, asset management, and are responding to a global economic slowdown and resulting maintenance services. drop in demand. Our clients in North America and Europe Investment in new capacity will continue in the feedstock- have taken bold steps to shave capacity and shore up rich regions of the Middle East and emerging consumer profitability during this lean period. New projects in this markets of Asia. Our growing local presence in these environment will have quick pay-backs and be focused on regions delivers the same client-focused partnerships we’ve improving manufacturing efficiency, and reducing waste and promoted in North America and Europe to a rapidly growing energy consumption. asset base. Additionally, our growing local relationships with These types of projects fit well within our long-term clients in these regions contribute to our success winning partnering and small cap alliance model that defines our large-project work for our major design centers in North relationships with most of our chemical industry clients. America, Europe, and India. We provide our full range of consulting, engineering, | www.jacobs.com page 19
  21. 21. 1 Microsystems and Engineering Sciences Applications facilities “I want to recognize the contribution that Jacobs has at the Sandia National Laboratories in New Mexico are made to the Laboratory as a result of being our designated dedicated to advancement in integrated MicroElectroMechanical subcontractor. Jacobs has stepped up and provided key Systems. We provided programming, design, and construction leadership and resources to solve a number of difficult and documents for the microsystems laboratory, and the long-standing Laboratory issues and has been integral to a microsystems fabrication facility and the weapons integration performance record that has improved sharply in numerous facility that achieved LEED Silver certification. These secure, areas. In doing so, the Jacobs team has set a high standard technologically advanced facilities are dedicated to the design for operations performance.” of microelectronic devices to support the needs of U.S. national security and the nuclear weapons complex of the future. Robert J. Zimmer, President, University of Chicago Argonne National Laboratories 2 At the Argonne National Laboratory in Argonne, Illinois, we continue to support the U.S. Department of Energy mission to advance the energy security of the United States. We are 2 integral to the planning for a new $95 million Energy Sciences Building (ESB) to replace aging research facilities. The new ESB will physically and intellectually co-locate existing Argonne scientists from multiple disciplines, giving them the 21st-century laboratory facilities they need to stay at the forefront of energy science research. 3 The National Ignition Facility (NIF), Livermore, California, is preparing for its grand opening in 2009. This also marks our over 12 years of support to NIF, now as it transitions to a national user facility. This year, NIF set world records for laser performance with the completion of its two 96-beam laser 3 bays. Work continues today in the target chamber area as an increasing number of beams are being aligned to the target. 4 To help meet global future energy needs, fusion research seeks to harness the nuclear energy provided by the fusion of light atoms. Our support of the €10 billion international ITER Fusion Reactor Project in Cadarache, France, uses expertise from our offices in Glasgow, Scotland, and Paris and Pertuis in France. We are providing preliminary architectural and engineering services to help develop the ITER facility buildings and site infrastructure. First Plasma for ITER is targeted for 2018. TECHNOLOGY 2008 SUMMARY ANNUAL REPORT 4 “I enjoy challenges and problem solving. I’ve learned a lot from working for Jacobs, most importantly, that the people you work with are the most critical and valuable tool available.” Sue L., Division Director, Argonne, Illinois | page 20 2008 Summary Annual Report - Technology
  22. 22. 1 TECHNOLOGY WE PROVIDE A BROAD RANGE OF PROJECT SERVICES In addition, we provide design, engineering, for a variety of technology, manufacturing, and test facilities. procurement, construction, and construction management This area includes projects involving highly complex test services for a variety of clients in the semiconductor industry. facilities for clients in the aerospace, automotive, and other Typical projects range from on-site plant engineering and industries. tool hook-ups to multi-million dollar state-of-the-art wafer We also provide a range of engineering, construction, fabrication and crystal growing facilities used to produce operation, and maintenance services for advanced research solar energy cells, microprocessors for computers, and other facilities, including facilities supporting research in fusion consumer electronic devices. and fission energy, nanoscale materials, and high-powered lasers and x-rays, to support important research activities in the United States, Europe, and the United Kingdom. | www.jacobs.com page 21
  23. 23. 1 This year saw us complete field operations at the Zschiegner “All work was executed very well. Jacobs did a great job on Refining Company Superfund Site in Howell, New Jersey, for the the tent city project, getting to the field in three weeks. They U.S. Army Corps of Engineers Philadelphia District. We safely also did a fantastic job with the B1305 HVAC, completing removed approximately 35,000 tons of contaminated soil from the construction work ahead of schedule, as well as this environmental remediation site located in a residential area, identifying that the existing equipment was not adequately receiving two consecutive quarterly safety awards from the sized and having the patience to wait for additional District in the process. funding to complete the project correctly!” 2 Our team, including subcontractors, successfully completed David Popovich, Project Manager, the Cold Bay Removal Action in remote Alaska with zero safety Kunsan AB, 8th Fighter Wing, Korea incidents or injuries. Our safety plan addressed concerns for wildlife, extreme winds, and an evacuation plan due to the nearby volcano that was active during our field work. We completed the project 12.5 percent under the approved final TIC and ahead of 2 schedule. Our project team worked collaboratively with our client on innovative approaches resulting in client-approved value engineering savings of $1.75 million. 3 In helping to restore the legendary harbor at New Bedford, Massachusetts, we delivered more than $6.6 million in client- approved cost savings to date to the U.S. Army Corps of Engineers New England District. We achieved this savings by avoiding unnecessary capital expenditures and implementing process improvements that enhance production. 4 At the Dounreay nuclear plant on the northern coast of Scotland, 3 we’re helping Dounreay Site Restoration Limited (part of the United Kingdom Atomic Energy Authority) to isolate a historic licensed Intermediate-Level Waste disposal facility from the surrounding bedrock as part of the country’s largest nuclear clean-up and demolition project. Our waste minimization strategy and other work directly contributed to the project receiving the 2008 Directors Annual Safety, Health and Environment (SHE) Award for “Best Overall Team Contribution to SHE Improvements” . ENVIRONMENTAL PROGRAMS 2008 SUMMARY ANNUAL REPORT 4 “With its global network of expertise and commitment to client de- light, Jacobs has what it takes to turn challenges into advantages. The success of my project was dependent on our access to cutting edge in- dustry technology and our daily client contact, which was instrumen- tal in developing the trust needed to work in our client’s best interest.” Alexandra T., Technical Lead, Fairbanks, Alaska | page 22 2008 Summary Annual Report - Environmental Programs
  24. 24. 1 ENVIRONMENTAL PROGRAMS THE ENVIRONMENTAL SERVICES MARKET IS A services to U.S. and U.K. government clients, our recent dynamic and rapidly evolving global opportunity for us. acquisitions provide us with a unique capability to deliver Our comprehensive environmental skills support capital sustainable energy solutions to our buildings clients. investment across all markets and include site and In the industrial realm, we are on the forefront of the environmental assessments, mitigation plans, and compliance global effort to reduce greenhouse emissions and improve monitoring of design and construction. For our core U.S. energy efficiency for our oil & gas, refining, and power clients. Department of Defense (DoD) and U.S. Department of Energy This also includes our market-leading technologies to remove clients, we provide a wide range of environmental services, sulfur from natural gas, crude, and coal processing. including those to support DoD build-up and redeployment in Looking ahead, this is a growing market and we are well- the Pacific Rim. positioned to continue capitalizing on it. The market outlook for decommissioning and clean-up of U.K. civilian nuclear facilities remains robust. In addition to our strong position providing environmental remediation | www.jacobs.com page 23
  25. 25. “The safety performance by Jacobs for maintenance 1 GDF SUEZ is the second leading operator of LNG terminals in services is exceptional. The Jacobs supervisor and long- Europe. We are providing conceptual engineering and owner’s term employees embrace all safety initiatives and take support services to extend their largest facility in France, located all new employees under their care and attention. The at Montoir. Our disciplined focus on safety at this operating site Jacobs core group of employees is excellent and all trades will help ensure a well-planned project construction phase. cooperate very well with each other. Their responsiveness to us is excellent.” 2 Suncor’s Firebag project in Canada is a staged program with each of the four stages designed to produce about 68,000 barrels of bitumen per day. As primary engineering contractor, Supervisor - Engineering and Maintenance, our approach is to design each consecutive stage as a copy of Petro-Canada, Port Moody, British Columbia, Canada the last, wherever possible, helping the client realize savings on engineering costs. Our integrated project management team approach on the cogeneration work was a finalist for the 2007 Global Project of the Year award from the Project Management 2 Institute. 3 In addition to site maintenance at the Nexen Long Lake Steam Assisted Gravity Drainage (SAGD) heavy oil facility, we also provide sustaining capital project engineering services. This design to maintenance mentality breaks down barriers to provide a singular, flexible, and integrated approach to project execution, resulting in improved overall maintenance and facility reliability. 4 We continue to provide project management, detail engineering, design, commissioning, construction, and start-up support to 3 Shell worldwide. The Na Kika facility in the Gulf of Mexico is a floating semi-submersible development and production system with topsides for oil and gas processing from subsea wells and pipelines for oil and gas export. This project brings six medium- sized independent fields together representing a new way to make collections from small and medium fields economically attractive. OIL & GAS 2008 SUMMARY ANNUAL REPORT 4 “Jacobs being a “relationship-based company” suits me well. The multi-cultural atmosphere helps me interact with people, providing me with opportunities for growth, socially and professionally. My position presents me with many different personalities and situa- tions. These challenges keep me on my toes and provide me with constant learning experiences. Close communication with Suncor keeps me abreast of their needs and concerns. In the end, what mat- ters most is delighting your client with your service.” “Rocky” R., Senior Project Coordinator, Ft. McMurray, Alberta, Canada | page 24 2008 Summary Annual Report - Oil & Gas
  26. 26. 1 OIL & GAS OIL & GAS PRICES HAVE FALLEN SUBSTANTIALLY from Off-setting the slowdown in new heavy oil projects is recent highs, although we expect some recovery. The long-term our growing maintenance and sustaining capital business trend in this market will provide robust opportunities for new that uses the same successful long-term partnering model investment, but near-term volatility has slowed some projects. we’ve used in refining and chemicals. Looking ahead, we New upstream investment focuses on lower cost reserves see growing opportunities with gas processing clients in with increased emphasis on enhanced recovery, expansions, Europe, Alaska, the Rockies, and the Gulf Coast— especially revamps, and reducing both capital and operating costs. in providing solutions for transporting/processing sweet and Recent acquisitions, combined with organic growth, sour gas. provide us with the significant local presence and technical We provide our full range of consulting, engineering, expertise required to exploit some of the largest oil & gas construction, modular fabrication, asset management and resources, such as those located in the Middle East, Canada, maintenance services in this market area. In addition, our the North Sea, and the U.S. Gulf Coast. We are well-positioned Superclaus® and Euroclaus® technologies provide us with an to support this capital intensive market over the long term. advantage when working with large sour gas fields. | www.jacobs.com page 25
  27. 27. 1 Working with government technical staff, our Naval Systems “In the mission planning and processes area, personnel Group engineers and technicians conduct radar cross-section and and facility safety were rated as Excellent. There were antenna testing in the indoor anechoic chambers of the Radar no E1 injuries in the 577,000 hours worked—the best Reflectivity Lab (RRL) at Point Mugu, California. Besides the work performance in this area during the five years of the we accomplish with our Navy partner on military applications, the contract.” RRL has provided radar signature measurement and analysis on projects for concealed weapons detection and identification, Art Huber, Commander, explosives detection sensors for airport security, and collision Arnold Engineering Development Center (AEDC) avoidance sensors for automotive safety applications. Tullahoma, Tennessee 2 Our Engineering and Technology Acquisition Support Services contract provides a broad range of experience to support the Electronic Systems Center (ESC)—a dynamic organization that provides the latest in command & control and information systems 2 for the Air Force, the Department of Defense, and our allies. Currently managing approximately 400 programs, projects, and initiatives, the ESC has an annual budget of more than $5 billion with many of their systems representing our most valuable defense assets, such as the E-3 AWACS. 3 As part of our test and evaluation contract at NASA’s White Sands Test Facility (WSTF), near Las Cruces, New Mexico, we are developing a liquid oxygen/methane propellant system being considered for NASA’s planned mission to Mars. Current development work includes enhancing the reliability of these “green” propellants. WSTF provides rocket propulsion, materials 3 and component testing and flight hardware processing for the Space Shuttle, International Space Station, the new Constellation program, and other commercial and military systems. 4 Through an integrated management team approach, we support AWE’s efforts to develop and upgrade facilities for the U.K.’s weapons program. One of those projects, Orion, is the exciting construction of a leading laser facility to create and study hot, dense matter. Construction is well underway, with commissioning expected by 2010. AEROSPACE & DEFENSE 2008 SUMMARY ANNUAL REPORT 4 “I support the Radar Reflectivity Laboratory (RRL) at the Naval Air Warfare Center, the premier Navy facility for measurement of radar scattering signatures. The team’s awareness and knowledge of the capabilities of the client’s staff enhances our ability to respond to changing customer requirements and to develop innovative solu- © British Crown Copyright/MOD. Reproduced with the permission of the tions. The opportunity to work in this type of environment, with Controller of Her Majesty’s Stationery Office. highly competent technical personnel, keeps me at Jacobs.” Dr. Dean M., Senior Engineering Specialist, Point Mugu, California | page 26 2008 Summary Annual Report - Aerospace & Defense
  28. 28. 1 AEROSPACE & DEFENSE With over 65 years experience working in aerospace NASA’s manned and unmanned space exploration & defense, we have earned a reputation for excellence in activities, including the new Constellation program, will also technical and managerial achievement, innovation, quality, hold strong. These programs spawn engineering and scientific performance, and safety. 2009 brings challenges to a new innovation and foster interest in engineering and scientific U.S. administration as our clients face increased pressure to education. reduce new investments due to the global economic downturn, Meeting these economic and scientific challenges requires competing domestic spending priorities, and continuing renewal of critical test facilities and infrastructure, state- military operations worldwide. Our core test and evaluation of-the-art enterprise management, and innovative design markets remain strong as we extend service life and modify/ and construction support to minimize test-hour costs while upgrade deployed systems and support facilities globally for sustaining high levels of reliability. We continue to grow our clients such as the U.S. Department of Defense, the U.S. Special core competencies in these areas, bringing lessons learned Operations Command, the Australian Department of Defence, from the commercial world to our public clients. and the U.K. Ministry of Defence. | www.jacobs.com page 27
  29. 29. ALLYN B. TAYLOR ROBERT MATHA PHILIP J. STASSI EARL J. MITCHELL, JR. Group Vice President, U.K. & Ireland Group Vice President, Southern Europe Group Vice President, Group Vice President, Western Region Global Construction Services WILLIAM C. MARKLEY, III CORA L. CARMODY JAMES T. STEWART KEVIN J. MCMAHON Senior Vice President, General Counsel Senior Vice President, Information Technology Group Vice President, Southern Region Group Vice President, North America Infrastructure H. THOMAS MCDUFFIE, JR. NAZIM G. THAWERBHOY WILLIAM J. BIRKHOFER Group Vice President, Global Buildings NA Senior Vice President & Controller Senior Vice President, Public Sector Sales MICHAEL J. HIGGINS ARLAN C. EMMERT ANDREW F. KREMER ROBERT M. CLEMENT Group Vice President, UK Infrastructure Group Vice President, Senior Vice President, Global Sales Group Vice President, Northern Region North America Infrastructure Board of Directors (top row, standing from left to right) (bottom row, seated from left to right) THOMAS M.T. NILES JOSEPH R. BRONSON Director (Vice Chairman of United States Council for International Business; Director (President & Chief Operating Officer of Sanmina-SCI Corporation) Former Ambassador to Canada) EDWARD V. FRITZKY LINDA FAYNE LEVINSON Director (Retired. Former Director of Amgen; Former President & Chairman Director (Former Partner of GRP Partners) of the Board of Immunex Corporation) ROBERT B. GWYN BENJAMIN F. MONTOYA Director (Retired. Former CEO and Chairman of the Board of Agricultural Director (Retired. Former Commander of Naval Facilities Minerals and Chemicals, Inc.) Engineering Command) ROBERT C. DAVIDSON, JR. JOHN P. JUMPER Director (Retired. Former Chairman and Chief Executive Officer of Director (Retired. Former Chief of Staff, U.S. Air Force) Surface Protection Industries, Inc.) JOHN F. COYNE Director (President and Chief Executive Officer of Western Digital Corporation) | www.jacobs.com page 29
  30. 30. ROGERS F. STARR JAMES E. DIXON CHRISTOPHER E. NAGEL MARK S. WILLIAMS President, Jacobs Technology, Inc. Group Vice President, Group Vice President, Asia-Pacific Group Vice President, Northern Europe Global Maintenance Services LAURENCE R. SADOFF MICHAEL COYLE JOHN MCLACHLAN Senior Vice President, Operations Group Vice President, Eastern Region Senior Vice President, Strategy & Acquisitions WALTER C. BARBER JOHN W. PROSSER, JR. ROBERT G. NORFLEET GEORGE A. KUNBERGER, JR. Group Vice President, Middle East Executive Vice President, Finance, Senior Vice President, Executive Vice President, Operations Administration & Treasurer Quality & Safety PATRICIA H. SUMMERS GREGORY J. LANDRY THOMAS R. HAMMOND Senior Vice President, Global Human Resources Executive Vice President, Operations Executive Vice President, Operations | page 28 2008 Summary Annual Report - Leadership
  31. 31. FINANCIAL PERSPECTIVES “We believe the company is one of the best operators in the business and should benefit from positive macro trends in certain end markets over the next several years, despite the uncertainty in current markets.” Richard S. Paget, CFA, Morgan Joseph November 3, 2008 “Jacobs has three key attributes that tend to separate it from its E&C peers. The first is their ability to keep a firm lid on costs. The second is Jacobs’ ability to find good and relatively inexpensive acquisitions that help to enhance their overall revenue and earnings growth. Third and finally, we think investors have to worry much less about cost overruns when they analyze whether to buy Jacobs’ shares. Jacobs backlog is over 90% cost reimbursable and has been that way for some time. Its contract mix should consequently keep the company out of trouble.” Andy Kaplowitz, Barclays Capital November 5, 2008 “We continue to view Jacobs as among the best positioned for long-term growth in the E&C industry based upon the company’s market position and operating strengths.” John B. Rogers, CFA, D.A. Davidson & Company January 22, 2008 FORWARD-LOOKING STATEMENTS AND OTHER SAFE HARBOR APPLICATIONS Statements included in this 2008 Summary Annual Report or a few customers or projects; adjustment, cancellation that are not based on historical facts are “forward-looking or suspension of contracts in the Company’s backlog; statements,” as that term is defined in the private Securities the outcome of pending and future claims and litigation; Litigation Reform Act of 1995. Although such statements employee, agent or partner misconduct; the risks and are based on management’s current estimates and uncertainties relating to acquiring other businesses and expectations, and currently available competitive, financial operating internationally; actual results differing from and economic data, forward-looking statements are estimates and assumptions in the Company’s financial inherently uncertain and involve risks and uncertainties that statements; and the Company’s ability to hire and retain could cause the results of the Company to differ materially qualified personnel. The list set forth in Item 1A—Risk from what is contained in these forward-looking statements. Factors of the Company’s most recent Annual Report on You should not place undue reliance on these forward- Form 10-K and the list set forth above—are not all-inclusive, looking statements. and the Company undertakes no obligation to release When used in this 2008 Summary Annual Report, words publicly any revisions or updates to any forward-looking such as “anticipate,” “estimate,” “expect,” “seek,” “intend,” statements that are contained in this 2008 Summary Annual “plan,” “believe,” and similar words are intended in part to Report. Readers of this 2008 Summary Annual Report are identify forward-looking statements. Some of the factors encouraged to read carefully the Company’s most recent that could cause or contribute to such differences are listed Annual Report on Form 10-K (including discussions and discussed in Item 1A—Risk Factors of the Company’s contained in Items 1—Business, 1A—Risk Factors, 3—Legal most recent Annual Report on Form 10-K and include the Proceedings, and 7—Management’s Discussion and Analysis following: exposure to financial losses and civil and criminal of Financial Condition and Results of Operations contained liabilities due to failure to maintain safe work sites or to therein) and other documents the Company files from time comply with various government regulations or contracts; to time with the United States Securities and Exchange negative conditions in the credit markets; fluctuations in Commission for a further description of some of the factors commodity prices; the cyclical nature of the markets in that could cause actual results to differ from the forward- which the Company and its clients operate; loss of one looking statements contained herein. | page 30 2008 Summary Annual Report - Financial Perspectives
  32. 32. REPORT OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, ON CONDENSED CONSOLIDATED FINANCIAL STATEMENTS The Board of Directors and Stockholders — Jacobs Engineering Group Inc. We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Jacobs Engineering Group Inc. and subsidiaries as of September 30, 2008 and 2007, and the related consolidated statements of earnings, changes in stockholders’ equity, and cash flows for each of the three years in the period ended September 30, 2008 (not presented separately herein); and in our report dated November 20, 2008, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying condensed consolidated financial statements is fairly stated in all material respects in relation to the consolidated financial statements from which it has been derived. We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Jacobs Engineering Group Inc.’s internal control over financial reporting as of September 30, 2008, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated November 20, 2008 expressed an unqualified opinion thereon. Los Angeles, California November 20, 2008 REPORT BY MANAGEMENT The management of Jacobs Engineering Group Inc. has prepared the accompanying consolidated financial statements and other financial information included in this summary annual report and is responsible for their integrity and objectivity. Management maintains a system of internal controls over financial reporting which is designed to provide reasonable assurance that, among other things, transactions are properly authorized, executed, and recorded, and that the Company’s records and reports are reliable. Management’s Report on Internal Control over Financial Reporting appears under Item 9A in the Company’s 2008 Annual Report on Form 10-K filed with the Securities and Exchange Commission. | www.jacobs.com page 31

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