April 8, 2011
Rufus Decker
Accounting Branch Chief
United States Securities and Exchange Commission
100 F Street, N.E., Stop 7010
Washington, DC 20549-4631
Re: | Your Letter Dated March 30, 2011 Regarding |
Jacobs Engineering Group Inc. (File No. 1-7463)
Form 10-K for the Fiscal Year Ended October 1, 2010
(the “2010 Form 10-K”), and
Form 10-Q for the Period Ended December 31, 2010
Dear Mr. Decker:
This letter is provided in response to the additional comment contained in your letter referred to above. As used herein, the terms “the Company”, “we”, and “our” are references to Jacobs Engineering Group Inc.
We provide the following response to Staff’s comment. For ease of reference, the heading and numbered paragraph below corresponds to the heading and numbered comment in your letter. Staff’s comment is presented first in italicized text with our response immediately following.
Consolidated Financial Statements -
Consolidated Statements of Cash Flows, page F-6
1.We read your response to comments one and two from our letter dated February 25, 2011. We understand that you will revise your Statement of Cash Flows for the year ended October 1, 2010 and the nine months ended July 2, 2010 in future filings to correctly present the $25.9 million non-cash charge within cash flows from operating activities. When you present these restated columns in your future filings, please ensure that the columns are appropriately labeled as restated and include the footnote disclosures required by ASC 250-10-50-7. Please show us in your supplemental response what the future filing revisions will look like.
RESPONSE:
Please find below the revised statement of cash flows for the year ended October 1, 2010 and the related footnote disclosure. As discussed on our phone call with Lisa Etheredge on March 31, 2011, the Company’s consolidated statements of cash flows in the Form 10-Q for the nine months ended July 2, 2010 is correct as filed.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Fiscal Years Ended September 30, 2011, October 1, 2010, and October 2, 2009
(In thousands)
2011 | 2010 (Restated) | 2009 | ||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net earnings attributable to the Group | $ | $ | 246,287 | $ | 399,213 | |||||||
Adjustments to reconcile net earnings to net cash flows from operations: | ||||||||||||
Depreciation and amortization: | ||||||||||||
Property, equipment and improvements | 64,447 | 68,670 | ||||||||||
Intangible assets | 24,048 | 17,672 | ||||||||||
Write-off of the SIVOM receivable | 25,894 | — | ||||||||||
Gains on sales of investment | — | (1,249 | ) | |||||||||
Stock based compensation | 24,361 | 24,085 | ||||||||||
Excess tax benefits from stock based compensation | (2,884 | ) | (3,514 | ) | ||||||||
Losses on sales of assets, net | 353 | 152 | ||||||||||
Changes in assets and liabilities, excluding the effects of businesses acquired: | ||||||||||||
Receivables | (3,052 | ) | 300,929 | |||||||||
Prepaid expenses and other current assets | (56 | ) | (4,972 | ) | ||||||||
Accounts payable | (46,920 | ) | (117,537 | ) | ||||||||
Accrued liabilities | (43,328 | ) | (135,121 | ) | ||||||||
Billings in excess of costs | (42,819 | ) | 14,475 | |||||||||
Income taxes payable | (24,733 | ) | (30,414 | ) | ||||||||
Deferred income taxes | 551 | 342 | ||||||||||
Other, net | 715 | 736 | ||||||||||
Net cash provided by operating activities | 222,864 | 533,467 | ||||||||||
Cash Flows from Investing Activities: | ||||||||||||
Additions to property and equipment | (49,075 | ) | (55,528 | ) | ||||||||
Disposals of property and equipment | 14,379 | 2,270 | ||||||||||
Purchases of investments | (106,733 | ) | (32,232 | ) | ||||||||
Other changes in investments | (1,759 | ) | (1,808 | ) | ||||||||
Acquisitions of businesses, net of cash acquired | (259,492 | ) | (23,329 | ) | ||||||||
Other changes in miscellaneous, non-current assets | 2,435 | 15,713 | ||||||||||
Net cash used for investing activities | (400,245 | ) | (94,914 | ) | ||||||||
Cash Flows from Financing Activities: | ||||||||||||
Proceeds from long-term borrowings | — | 2,030 | ||||||||||
Repayments of long-term borrowings | (217 | ) | (47,993 | ) | ||||||||
Net change in short-term borrowings | 58,090 | 15,933 | ||||||||||
Proceeds from issuances of common stock | 36,209 | 43,361 | ||||||||||
Excess tax benefits from stock based compensation | 2,884 | 3,514 | ||||||||||
Change in pension commitments | 2,516 | (45,223 | ) | |||||||||
Other, net | (3,852 | ) | (10,625 | ) | ||||||||
Net cash provided by (used for) financing activities | 95,630 | (39,003 | ) | |||||||||
Effect of Exchange Rate Changes | (13,026 | ) | 29,649 | |||||||||
Increase (Decrease) in Cash and Cash Equivalents | (94,777 | ) | 429,199 | |||||||||
Cash and Cash Equivalents at Beginning of Period | 938,842 | 1,033,619 | 604,420 | |||||||||
Cash and Cash Equivalents at End of Period | $ | $ | 938,842 | $ | 1,033,619 | |||||||
Footnote Disclosure
In the Company’s fiscal 2010 Form 10-K, the Company incorrectly included the $25.9 million non-cash charge related to the write-off of the Sivom long-term receivable in “other changes in miscellaneous, non-current assets” in the investing activities section in its consolidated statements of cash flows for fiscal 2010. This amount should have been classified as an adjustment to cash flows from operating activities. The Consolidated Statement of Cash Flows for the fiscal year ended October 1, 2010 has been restated to reflect this correction. As a result, cash flows from operating activities for fiscal 2010 changed from $197.0 million to $222.9 million and cash flows from investing activities changed from a use of $374.4 million to a use of $400.3 million. This adjustment had no effect on any of the Company’s other financial statements.
* * * * *
We hope this response has addressed Staff’s comment. Should you have additional questions regarding the information contained herein, we would be pleased to discuss them with you.
Very truly yours,
JACOBS ENGINEERING GROUP INC. | ||
By: | /s/ John W. Prosser, Jr. | |
John W. Prosser, Jr. | ||
Executive Vice President | ||
Finance and Administration |