Item 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)Documents filed as part of this report:

(1)	The Company’s Consolidated Financial Statements at October 2, 2015 and September 26, 2014 and for each of the three years in the period ended October 2, 2015, September 26, 2014 and September 28, 2012 and the notes thereto, together with the report of the independent auditors on those Consolidated Financial Statements are hereby filed as part of this report, beginning on page F-1.

(2)	Financial statement schedules – no financial statement schedules are presented as the required information is either not applicable, or is included in the consolidated financial statements or notes thereto.

(3)	See Exhibits and Index to Exhibits, below.

Page 58

(b)Exhibits and Index to Exhibits:

2.1			Merger Implementation Deed between Sinclair Knight Merz Management Pty Limited and Sinclair Knight Merz Holdings Limited and Jacobs Engineering Group Inc. and Jacobs Australia Holdings Company Pty. Ltd, dated as of September 8, 2013. Filed as Exhibit 2.2 to the Registrant’s fiscal 2013 Annual Report on Form 10-K and incorporated herein by reference.
2.2			Sales Agreement between Sinclair Knight Merz Management Pty Limited, Sinclair Knight Merz Holdings Limited, Jacobs Engineering Group Inc. and Jacobs Australia Holdings Company Pty, Ltd., dated as of December 13, 2013. Filed as Exhibit 2.3 to the Registrant’s Quarterly Report on Form 10-Q for the first quarter of fiscal 2014 and incorporated herein by reference.
3.1			Amended and Restated Certificate of Incorporation of the Registrant. Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K on January 28, 2014 and incorporated herein by reference.
3.2			Amended and Restated Bylaws of the Registrant. Filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K on July 16, 2015 and incorporated herein by reference.
4.1			See Sections 5 through 18 of Exhibit 3.1.
4.2			See Article II, Section 3.03 of Article III, Article VI and Section 7.04 of Article VII of Exhibit 3.2.
10.1#			The Jacobs Engineering Group Inc. Incentive Bonus Plan for Officers and Key Managers as amended and restated on May 22, 2014. Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2015 and incorporated herein by reference.
10.2#			The Executive Security Program of Jacobs Engineering Group Inc. Filed as Exhibit 10.2 to the Registrant’s fiscal 2014 Annual Report on Form 10-K and incorporated herein by reference.
10.3#			Amendment to the Executive Security Program of Jacobs Engineering Group Inc., dated December 23, 2008. Filed as Exhibit 10.3 to the Registrant’s fiscal 2014 Annual Report on Form 10-K and incorporated herein by reference.
10.4#			Amendment to the Executive Security Program of Jacobs Engineering Group Inc., dated May 31, 2009. Filed as Exhibit 10.4 to the Registrant’s fiscal 2014 Annual Report on Form 10-K and incorporated herein by reference.
10.5#			Jacobs Engineering Group Inc. 1991 Executive Deferral Plan, effective June 1, 1991. Filed as Exhibit 10.5 to the Registrant’s fiscal 2012 Annual Report on Form 10-K and incorporated herein by reference.
10.6#			Jacobs Engineering Group Inc. 1993 Executive Deferral Plan, effective December 1, 1993. Filed as Exhibit 10.6 to the Registrant’s fiscal 2012 Annual Report on Form 10-K and incorporated herein by reference.
10.7#			Jacobs Engineering Group Inc. 1995 Executive Deferral Plan, effective January 1, 1995. Filed as Exhibit 10.7 to the Registrant’s fiscal 2014 Annual Report on Form 10-K and incorporated herein by reference.
10.8#			Jacobs Engineering Group Inc. Amended and Restated Executive Deferral Plan. Filed as Exhibit 10.8 to the Registrant’s fiscal 2012 Annual Report on Form 10-K and incorporated herein by reference.

Page 59

10.9#			The Jacobs Engineering Group Inc. 1989 Employee Stock Purchase Plan, as Amended and Restated-effective January 22, 2009. Filed as Exhibit 10.9 to the Registrant’s fiscal 2014 Annual Report on Form 10-K and incorporated herein by reference.
10.10#			The Jacobs Engineering Group Inc. Global Employee Stock Purchase Plan. Filed as Exhibit 10.10 to the Registrant’s fiscal 2011 Annual Report on Form 10-K and incorporated herein by reference.
10.11#			Jacobs Engineering Group Inc. 401(k) Plus Savings Plan and Trust, as Amended and Restated April 1, 2003. Filed as Exhibit 10.12 to the Registrant’s fiscal 2012 Annual Report on Form 10-K and incorporated herein by reference.
10.12#			Jacobs Engineering Group Inc. 1999 Stock Incentive Plan, as Amended and Restated. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 333-157014) on January 28, 2014 and incorporated herein by reference.
10.13#			Form of Indemnification Agreement entered into between the Registrant and certain of its officers and directors. Filed as Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the third quarter of fiscal 2012 and incorporated herein by reference.
10.14#			Form of Jacobs Engineering Group Inc. Non-Qualified Stock Option Agreement. Filed as Exhibit 4.3 to the Registrant’s Registration Statement on Form S-8 filed on January 29, 2009 and incorporated herein by reference.
10.15#			Form of Jacobs Engineering Group Inc. Restricted Stock Agreement. Filed as Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the second quarter of fiscal 2012 and incorporated herein by reference.
10.16#			Form of Restricted Stock Unit Award Agreement. Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2012 and incorporated herein by reference.
10.17#			Form of Restricted Stock Award Agreement. Filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K on June 1, 2011 and incorporated herein by reference.
10.18#			Jacobs Engineering Group Inc. 1999 Outside Director Stock Plan, as Amended and Restated. Filed as Exhibit 10.21 to the Registrant’s fiscal 2012 Annual Report on Form 10-K and incorporated herein by reference.
10.19#			Form of Restricted Stock Unit Award Agreement (Performance Shares - Net Earnings Growth 2013 Award). Filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2013 and incorporated herein by reference.
10.20#			Form of Restricted Stock Unit Award Agreement. (Performance Shares - TSR 2013 Award). Filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2013 and incorporated herein by reference.
10.21			Credit Agreement dated as of March 29, 2012 among Jacobs Engineering Group Inc. and certain of its subsidiaries as borrowers, and the Bank of America, N.A, (as Administrative Agent); BNP Paribas, and Wells Fargo Bank, N.A. (as Co-Syndication Agents); Union Bank, N.A. (as Documentation Agent); Merrill Lynch, Pierce, Fenner & Smith Incorporated (as Sole Book Manager); and Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNP Paribas Securities Corp, and Wells Fargo Securities, LLC (as Joint Lead Arrangers). Filed as Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the second quarter of fiscal 2012 and incorporated herein by reference.

Page 60

10.22#			Employment agreement between Jacobs Engineering Group Inc. and Michael Tyler dated May 28, 2013. Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2013 and incorporated herein by reference.
10.23#			Retirement Agreement dated April 14, 2014 between the Registrant and Thomas R. Hammond. Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2014 and incorporated herein by reference.
10.24#			Jacobs Engineering Group Inc. 2005 Executive Deferral Plan, effective January 1, 2005. Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2010 and incorporated herein by reference.
10.25#			Agreement between Jacobs Engineering Group Inc. and Noel G. Watson dated July 1, 2010. Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2010 and incorporated herein by reference.
10.26#			Consulting Agreement between Jacobs Engineering Group Inc. and Noel G. Watson dated July 1, 2010. Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2010 and incorporated herein by reference.
10.27#			Amendment No. 1 to Consulting Agreement between the Registrant and Noel G. Watson dated July 1, 2011. Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2011 and incorporated herein by reference.
10.28#			Amendment No. 2 to Consulting Agreement between the Registrant and Noel G. Watson dated July 1, 2013. Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2013 and incorporated herein by reference.
10.29			Term Loan Agreement dated January 27, 2011 between Jacobs Engineering U.K. Limited and Royal Bank of Scotland Finance (Ireland). Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2011 and incorporated herein by reference.
10.30			Senior Term Loan Facility dated January 26, 2011 between Jacobs Nederland B.V. and BNP Paribas. Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2011 and incorporated herein by reference.
10.31			Senior Term Loan Facility dated January 26, 2011 between Jacobs Engineering U.K. Limited and Bank of America, N.A., London Branch. Filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2011 and incorporated herein by reference.

10.32			Senior Term Loan Facility dated January 26, 2011 between Jacobs Australia Pty Limited and Bank of America, N.A., Australian Branch. Filed as Exhibit 10.4 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2011 and incorporated herein by reference.
10.33			Form of Guaranty among certain subsidiaries of the Registrant and Royal Bank of Scotland Finance (Ireland), BNP Paribas, Bank of America, N.A., London Branch, and Bank of America, N.A., Australian Branch. Filed as Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2011 and incorporated herein by reference.
10.34#			Employment Agreement dated December 23, 2010 between the Registrant and Gary Mandel. Filed as Exhibit 10.6 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2011 and incorporated herein by reference.
10.35			Amended and Restated Credit Agreement dated as of February 7, 2014 among Jacobs Engineering Group Inc. and certain of its subsidiaries as borrowers, and the Bank of America, N.A. (as Administrative Agent); Bank of America, N.A., BNP Paribas, and Wells Fargo Bank, N.A. (as Co-Syndication Agents); The Bank of Tokyo-Mitsubishi UFJ, LTD, and TD Bank, N.A. (as Co-Documentation Agents); Merrill Lynch, Pierce, Fenner & Smith Incorporated (as Sole Book Manager); and Merrill Lynch, Pierce, Fenner & Smith Incorporated, BNP Paribas Securities Corp, and Wells Fargo Securities, LLC (as Joint Lead Arrangers). Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on February 11, 2014 and incorporated herein by reference.

Page 61

10.36#			Form of Restricted Stock Unit Award Agreement (Performance Shares - Net Earnings Growth - 2014 Award). Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2014 and incorporated herein by reference.
10.37#			Form of Restricted Stock Unit Award Agreement (Performance Shares - TSR - 2014 Award). Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2014 and incorporated herein by reference.
10.38			Amendment No. 3 to Consulting Agreement between the Registrant and Noel G. Watson dated July 1, 2014. Filed as Exhibit 10.40 to the Registrant’s fiscal 2014 Annual Report on Form 10-K and incorporated herein by reference.
10.39#			Offer Letter by and between Jacobs Engineering Group Inc. and Kevin C. Berryman, effective November 12, 2014. Filed as Exhibit 99.1 to Amendment No. 1 to the Registrant’s Current Report on Form 8-K/A on November 17, 2014 and incorporated herein by reference.
10.40#			Transition Agreement with Craig L. Martin, dated as of December 19, 2014. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on December 23, 2014 and incorporated herein by reference.
10.41#			Letter Agreement with Noel G. Watson, dated as of February 25, 2015. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on March 2, 2015 and incorporated herein by reference.
10.42			Amendment Agreement, dated as of March 4, 2015, among Jacobs Engineering Group, Inc., certain subsidiaries thereof party thereto, each lender party thereto, each issuer of letters of credit party thereto and Bank of America, N.A., as Administrative Agent and Swing Line Lender. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on March 5, 2015 and incorporated herein by reference.
10.43#			Form of Transition Agreement. Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2015 and incorporated herein by reference.
10.44#			Form of Stock Option Agreement (December 2014 grants). Filed as Exhibit 10.3 to the Registrant’s Quarterly Report on Form 10-Q for the second quarter of fiscal 2015 and incorporated herein by reference.
10.45#			Offer Letter with Steven J. Demetriou, dated as of July 10, 2015. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on July 16, 2015 and incorporated herein by reference.
10.46#			Form of Nonqualified Stock Option Agreement. Filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2015 and incorporated herein by reference.
10.47#			Form of Restricted Stock Unit Award Agreement (Performance Shares - Net Earnings Growth). Filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the third quarter of fiscal 2015 and incorporated herein by reference.
10.48#			Separation Agreement with Santo Rizzuto dated October 16, 2015. Filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K on October 22, 2015.
†10.49			Separation Agreement with Cora Carmody, effective September 15, 2015.
†10.50			Jacobs Engineering Group Inc. Management Incentive Plan, as Amended and Restated, effective November 19, 2015.
†10.51			Form of Restricted Stock Agreement (awarded pursuant to the 1999 Stock Incentive Plan).
†10.52			Form of Restricted Stock Unit Agreement (awarded pursuant to the 1999 Stock Incentive Plan).
†10.53			Form of Restricted Stock Unit Agreement (Performance Shares - Earnings Per Share Growth).
†10.54			Form of Restricted Stock Unit Agreement (Performance Shares - TSR).
†10.55			Form of Restricted Stock Unit Agreement (Cash Settled Non-US Employees).

Page 62

†10.56			Form of Nonqualified Stock Option Agreement (1999 Stock Incentive Plan).
†21.			List of Subsidiaries of Jacobs Engineering Group Inc.
†23.			Consent of Ernst & Young LLP, Independent Registered Public Accounting Firm.
†31.1			Certification of Chief 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 Chief 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

†	Being filed herewith.

#	Management contract or compensatory plan or arrangement.

Page 63

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

			JACOBS ENGINEERING GROUP INC.
Dated:	November 23, 2015		By:		/S/ Steven J. Demetriou
					Steven J. Demetriou
					President, Chief Executive Officer, and Director (Principal Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:

Page 64

Signature		Title		Date
/S/ Steven J. Demetriou		President, Chief Executive Officer and Director (Principal Executive Officer)		November 23, 2015
Steven J. Demetriou
/S/ Noel G. Watson		Chairman of the Board		November 23, 2015
Noel G. Watson
/S/ Joseph R. Bronson		Director		November 23, 2015
Joseph R. Bronson
/S/ John F. Coyne		Director		November 23, 2015
John F. Coyne
		Director		November 23, 2015
Juan Jose Suarez Coppel
/S/ Robert C. Davidson, Jr.		Director		November 23, 2015
Robert C. Davidson, Jr.
/S/ Ralph E. Eberhart		Director		November 23, 2015
Ralph E. Eberhart
/S/ Edward V. Fritzky		Director		November 23, 2015
Edward V. Fritzky
/S/ Dawne S. Hickton		Director		November 23, 2015
Dawne S. Hickton
/S/ Linda Fayne Levinson		Director		November 23, 2015
Linda Fayne Levinson
/S/ Peter J. Robertson		Director		November 23, 2015
Peter J. Robertson
/S/ Christopher M.T. Thompson		Director		November 23, 2015
Christopher M.T. Thompson
/S/ Kevin C. Berryman		Executive Vice President, Chief Financial Officer (Principal Financial Officer)		November 23, 2015
Kevin C. Berryman
/S/ Geoffrey P. Sanders		Senior Vice President and Chief Accounting Officer (Principal Accounting Officer)		November 23, 2015
Geoffrey P. Sanders

Page 65

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

WITH REPORTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

October 2, 2015

F-1

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

October 2, 2015

Consolidated Balance Sheets at October 2, 2015 and September 26, 2014		F-3
Consolidated Statements of Earnings for the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013		F-4
Consolidated Statements of Comprehensive Income for the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013		F-4
Consolidated Statements of Changes in Stockholders’ Equity for the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013		F-5
Consolidated Statements of Cash Flows for the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013		F-6
Notes to Consolidated Financial Statements		F-8
Reports of Ernst & Young LLP, Independent Registered Public Accounting Firm		F-43

F-2

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share information)

At October 2, 2015 and September 26, 2014

		2015				2014
ASSETS
Current Assets:
Cash and cash equivalents		$	460,859			$	732,647
Receivables		2,548,743				2,867,555
Deferred income taxes		160,298				169,893
Prepaid expenses and other current assets		113,076				121,976
Total current assets		3,282,976				3,892,071
Property, Equipment, and Improvements, Net		381,238				456,797
Other Noncurrent Assets:
Goodwill		3,048,778				3,026,349
Intangibles		353,419				440,192
Miscellaneous		719,515				638,250
Total other noncurrent assets		4,121,712				4,104,791
		$	7,785,926			$	8,453,659
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Notes payable		$	13,364			$	36,732
Accounts payable		566,866				622,875
Accrued liabilities		1,090,985				1,279,556
Billings in excess of costs		309,951				410,683
Total current liabilities		1,981,166				2,349,846
Long-term Debt		584,434				764,075
Other Deferred Liabilities		863,868				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—123,152,966 shares and 131,752,768 shares, respectively		123,153				131,753
Additional paid-in capital		1,137,144				1,173,858
Retained earnings		3,496,212				3,527,193
Accumulated other comprehensive loss		(464,764		)		(363,549		)
Total Jacobs stockholders’ equity		4,291,745				4,469,255
Noncontrolling interests		64,713				36,405
Total Group stockholders’ equity		4,356,458				4,505,660
		$	7,785,926			$	8,453,659

See the accompanying Notes to Consolidated Financial Statements.

F-3

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EARNINGS

For the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013

(In thousands, except per share information)

		2015				2014				2013
Revenues		$	12,114,832			$	12,695,157			$	11,818,376
Costs and Expenses:
Direct costs of contracts		(10,146,494		)		(10,621,373		)		(9,976,057		)
Selling, general and administrative expenses		(1,522,811		)		(1,545,716		)		(1,173,340		)
Operating Profit		445,527				528,068				668,979
Other Income (Expense):
Interest income		7,262				9,693				5,395
Interest expense		(19,503		)		(11,437		)		(12,906		)
Gain on sale of intellectual property		—				12,147				—
Miscellaneous income (expense), net		(3,149		)		3,695				80
Total other income (expense), net		(15,390		)		14,098				(7,431		)
Earnings Before Taxes		430,137				542,166				661,548
Income Tax Expense		(101,255		)		(190,054		)		(221,366		)
Net Earnings of the Group		328,882				352,112				440,182
Net Earnings Attributable to Noncontrolling Interests		(25,911		)		(24,004		)		(17,089		)
Net Earnings Attributable to Jacobs		$	302,971			$	328,108			$	423,093
Net Earnings Per Share:
Basic		$	2.42			$	2.51			$	3.27
Diluted		$	2.40			$	2.48			$	3.23

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013

(In thousands)

		2015				2014				2013
Net Earnings of the Group		$	328,882			$	352,112			$	440,182
Other Comprehensive Loss:
Foreign currency translation adjustments		(136,168		)		(33,316		)		(23,704		)
Change in pension liability		33,208				(15,303		)		4,496
Gains on cash flow hedges		2,949				1,022				1,467
Other Comprehensive (Loss) Income Before Income Taxes		(100,011		)		(47,597		)		(17,741		)
Income Tax Benefit (Expense):
Foreign currency translation adjustments		—				3,250				—
Change in pension liability		(438		)		(14,562		)		(3,949		)
Losses on cash flow hedges		(766		)		(513		)		(550		)
Total Income Tax Benefit (Expense)		(1,204		)		(11,825		)		(4,499		)
Net Other Comprehensive Loss		(101,215		)		(59,422		)		(22,240		)
Net Comprehensive Income of the Group		227,667				292,690				417,942
Net Comprehensive Income Attributable to Noncontrolling Interests		(25,911		)		(24,004		)		(17,089		)
Total Comprehensive Income Attributable to Jacobs		$	201,756			$	268,686			$	400,853

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 income during the period

F-4

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

For the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013

(In thousands)

		Common Stock				Additional Paid-in Capital				Retained Earnings				Accumulated Other Comp- rehensive Income (Loss)				Total Jacobs Stock- holders’ Equity				Non- controlling Interests				Total Group Stock- holders’ Equity
Balances at September 28, 2012		$	129,936			$	953,983			$	2,920,441			$	(281,887	)		$	3,722,473			$	36,416			$	3,758,889
Net earnings		—				—				423,093				—				423,093				17,089				440,182
Foreign currency translation adjustments		—				—				—				(23,704		)		(23,704		)		—				(23,704		)
Pension liability, net of deferred tax expense of $3,949		—				—				—				547				547				—				547
Gain on derivatives, net of deferred tax expense of $550		—				—				—				917				917				—				917
Noncontrolling interest acquired / consolidated		—				11,087				—				—				11,087				(10,293		)		794
Distributions to noncontrolling interests		—				—				—				—				—				(7,974		)		(7,974		)
Issuances of equity securities, net of deferred tax expense of $3,111		2,864				137,592				—				—				140,456				—				140,456
Repurchases of equity securities		(1,161		)		(18,038		)		(42,573		)		—				(61,772		)		—				(61,772		)
Balances at September 27, 2013		131,639				1,084,624				3,300,961				(304,127		)		4,213,097				35,238				4,248,335
Net earnings		—				—				328,108				—				328,108				24,004				352,112
Foreign currency translation adjustments, net of deferred tax benefit of $3,250		—				—				—				(30,066		)		(30,066		)		—				(30,066		)
Pension liability, net of deferred tax expense of $14,562		—				—				—				(29,865		)		(29,865		)		—				(29,865		)
Gain on derivatives, net of deferred tax expense of $513		—				—				—				509				509				—				509
Noncontrolling interest acquired / consolidated		—				4,779				(15,704		)		—				(10,925		)		(17,724		)		(28,649		)
Distributions to noncontrolling interests		—				—				(968		)		—				(968		)		(5,113		)		(6,081		)
Issuances of equity securities, net of deferred tax expense of $1,264		2,254				114,953				—				—				117,207				—				117,207
Repurchases of equity securities		(2,140		)		(30,498		)		(85,204		)		—				(117,842		)		—				(117,842		)
Balances at September 26, 2014		131,753				1,173,858				3,527,193				(363,549		)		4,469,255				36,405				4,505,660
Net earnings		—				—				302,971				—				302,971				25,911				328,882
Foreign currency translation adjustments		—				—				—				(136,168		)		(136,168		)		—				(136,168		)
Pension liability, net of deferred tax expense of $438		—				—				—				32,770				32,770				—				32,770
Gain on derivatives, net of deferred tax expense of $766		—				—				—				2,183				2,183				—				2,183
Noncontrolling interest acquired / consolidated		—				—				(9,709		)		—				(9,709		)		9,627				(82		)
Distributions to noncontrolling interests		—				—				—				—				—				(7,230		)		(7,230		)
Issuances of equity securities, net of deferred tax expense of $10,332		1,590				80,801				—				—				82,391				—				82,391
Repurchases of equity securities		(10,190		)		(117,515		)		(324,243		)		—				(451,948		)		—				(451,948		)
Balances at October 2, 2015		$	123,153			$	1,137,144			$	3,496,212			$	(464,764	)		$	4,291,745			$	64,713			$	4,356,458

See the accompanying Notes to Consolidated Financial Statements.

F-5

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013

(In thousands)

		2015				2014				2013
Cash Flows from Operating Activities:
Net earnings attributable to the Group		$	328,882			$	352,112			$	440,182
Adjustments to reconcile net earnings to net cash flows from operations:
Depreciation and amortization:
Property, equipment and improvements		99,924				98,592				69,889
Intangible assets		49,368				46,820				28,985
Loss on sale of business		2,909				—				—
Gain on sale of intellectual property		—				(12,147		)		—
Stock based compensation		41,412				43,400				39,518
Tax deficiency (benefit) from stock based compensation		(1,237		)		1,344				3,213
Equity in earnings of investees		5,483				(8,394		)		(14,140		)
Change in pension plan obligations		(5,980		)		(37,218		)		(8,714		)
Change in deferred compensation plans		(3,229		)		(7,062		)		(8,915		)
(Gains) Losses on disposals of assets, net		30,985				(4,668		)		519
Changes in assets and liabilities, excluding the effects of businesses acquired:
Receivables		172,958				107,944				(234,864		)
Prepaid expenses and other current assets		6,644				(7,217		)		(15,898		)
Accounts payable		(28,943		)		108,241				82,389
Accrued liabilities		(120,847		)		(2,172		)		(18,214		)
Billings in excess of costs		(52,441		)		29,833				84,043
Income taxes payable		(22,685		)		(17,373		)		(12,745		)
Deferred income taxes		(31,177		)		30,799				2,711
Other deferred liabilities		(15,759		)		3,725				(2,199		)
Deferred gain on synthetic lease transaction		23,343				—				—
Change in long-term receivables		—				2,828				15,815
Long-term insurance prepayment		—				(17,411		)		—
Other, net		4,962				9,740				(3,059		)
Net cash provided by operating activities		484,572				721,716				448,516
Cash Flows from Investing Activities:
Additions to property, equipment, and improvements		(88,404		)		(132,146		)		(127,270		)
Disposals of property, equipment, and improvements		369				10,414				4,276
Change in cash related to consolidation of joint ventures		—				—				5,344
Purchases of investments		—				(25,137		)		(15		)
Sales of investments		13				58				11
Sale of intellectual property		—				12,371				—
Acquisitions of businesses, net of cash acquired		(8,101		)		(1,384,342		)		(39,429		)
Net cash used for investing activities		(96,123		)		(1,518,782		)		(157,083		)

See the accompanying Notes to Consolidated Financial Statements.

F-6

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Fiscal Years Ended October 2, 2015, September 26, 2014, and September 27, 2013

(In thousands)

Continued

		2015				2014				2013
Cash Flows from Financing Activities:
Proceeds from long-term borrowings		1,768,639				819,681				—
Repayments of long-term borrowings		(1,907,109		)		(455,426		)		(118,293		)
Proceeds from short-term borrowings		362,433				207,876				59,094
Repayments of short-term borrowings		(382,190		)		(226,091		)		(35,400		)
Proceeds from issuances of common stock		33,222				44,704				46,079
Common stock repurchases		(422,316		)		(78,399		)		—
Tax (deficiency) benefit from stock based compensation		1,237				(1,344		)		(3,213		)
Distributions to noncontrolling interests		(7,230		)		(6,081		)		(7,974		)
Net cash provided by (used for) financing activities		(553,314		)		304,920				(59,707		)
Effect of Exchange Rate Changes		(106,923		)		(31,612		)		(7,778		)
Increase (Decrease) in Cash and Cash Equivalents		(271,788		)		(523,758		)		223,948
Cash and Cash Equivalents at Beginning of Period		732,647				1,256,405				1,032,457
Cash and Cash Equivalents at End of Period		$	460,859			$	732,647			$	1,256,405

See the accompanying Notes to Consolidated Financial Statements.

F-7

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Basis of Presentation

Description of Business

We provide a broad range of technical, professional, and construction services including engineering, design, and architectural services; construction and construction management services; operations and maintenance services; and process, scientific, and systems consulting services. We provide our services through offices and subsidiaries located primarily in North America, South America, Europe, the Middle East, India, Australia, Africa, and Asia. We provide our services under cost-reimbursable and fixed-price contracts. The percentage of revenues realized from each of these types of contracts for each of the last three fiscal years was as follows:

		2015			2014			2013
Cost-reimbursable		83	%		83	%		85	%
Fixed-price		17	%		17	%		15	%

Basis of Presentation, Definition of Fiscal Year, and Other Matters

The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and include the accounts of Jacobs Engineering Group Inc. and its subsidiaries and affiliates which it controls. All significant intercompany accounts and transactions have been eliminated in consolidation.

The Company’s fiscal year ends on the Friday closest to September 30 (determined on the basis of the number of workdays) and, accordingly, an additional week of activity is added every five-to-six years.

Please refer to Note 16—Definitions for the definitions of certain terms used in the accompanying Consolidated Financial Statements and these Notes to Consolidated Financial Statements.

2. Significant Accounting Policies

Revenue Accounting for Contracts and Use of Joint Ventures

In general, we recognize revenues 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.

Certain cost-reimbursable contracts include incentive-fee arrangements. These incentive fees 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.

F-8

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

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 (and we refer to such costs as “pass-through” 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 last three fiscal years (in millions):

2015				2014				2013
$	2,602.6			$	2,954.9			$	2,624.8

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 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 either the equity method of accounting or proportional consolidation. The Company does not currently participate in any significant VIEs in which it has a controlling financial interest that it does not consolidate.

There were no changes in facts and circumstances during the period that caused the Company to reassess the method of accounting for its VIEs.

Fair Value Measurements

The net carrying amounts of cash and cash equivalents, trade receivables and payables, and notes payable approximate Fair Value due to the short-term nature of these instruments. Similarly, we believe the carrying value of long-term debt also approximates Fair Value based on the interest rates and scheduled maturities applicable to the outstanding borrowings. Certain other assets and liabilities, such as forward contracts and an interest rate swap agreement we purchased as cash-flow hedges discussed in Note 10 —Commitments and Contingencies - Derivative Financial Instruments are required to be carried in our Consolidated Financial Statements at Fair Value.

The Fair Value of the Company’s reporting units (used for purposes of determining whether there is an indication of possible impairment of the carrying value of goodwill) is determined using both an income approach and a market approach. Both approaches require us to make certain estimates and judgments. Under the income approach, Fair Value is determined by using the discounted cash flows of our reporting units. Under the market approach, the Fair Values of our reporting units are determined by reference to guideline companies that are reasonably comparable to our reporting units; the Fair Values are estimated based on the valuation multiples of the invested capital associated with the guideline companies. In assessing whether there is an indication that the carrying value of goodwill has been impaired, we utilize the results of both valuation

F-9

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

techniques and consider the range of Fair Values indicated. The range of values (both ends of the range) for each reporting unit exceeded the respective book values by over 20% to 40%.

With respect to equity-based compensation (i.e., share-based payments), we estimate the Fair Value of stock options granted to employees and directors using the Black-Scholes option-pricing model. Like all option-pricing models, the Black-Scholes model requires the use of highly subjective assumptions including (i) the expected volatility of the market price of the underlying stock, and (ii) the expected term of the award, among others. Accordingly, changes in assumptions and any subsequent adjustments to those assumptions can cause drastically different Fair Values to be assigned to our stock option awards. For restricted stock units containing service and market conditions, compensation expense is based on the Fair Value of such units using a Monte Carlo simulation. Due to the uncertainties inherent in the use of assumptions and the results of applying Monte Carlo simulations and because equity awards tend to vest over several years and additional equity awards may be made in the future, the amount of expense recorded in the accompanying consolidated financial statements may not be representative of the effects on our future consolidated financial statements.

The Fair Values of the assets owned by the various pension plans that the Company sponsors are determined based on the type of asset, consistent with U.S. GAAP. Equity securities are valued by using market observable data such as quoted prices. Publicly traded corporate equity securities are valued at the last reported sale price on the last business day of the year. Securities not traded on the last business day are valued at the last reported bid price. Debt securities are valued at the last reported sale price on the last business day applicable. Real estate consists primarily of common or collective trusts, with underlying investments in real estate. They are valued using the best information available, including quoted market price, market prices for similar assets when available, internal cash flow estimates discounted at an appropriate interest rate, or independent appraisals, as appropriate. Insurance contracts, investments in infrastructure/raw goods, and hedge funds are valued using actuarial assumptions and values reported by the fund managers.

The methodologies described above and elsewhere in these Notes to Consolidated Financial Statements may produce a Fair Value measure that may not be indicative of net realizable value or reflective of future Fair Values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the Fair Value of certain financial instruments could result in a different Fair Value measurement.

Cash Equivalents

We consider all highly liquid investments with original maturities of less than three months to be cash equivalents. Cash equivalents at October 2, 2015 and September 26, 2014 consisted primarily of money market mutual funds and overnight bank deposits.

Receivables and Billings in Excess of Costs

“Receivables” include billed receivables, unbilled receivables, and retentions receivable. Billed receivables represent amounts invoiced to clients in accordance with the terms of our client contracts. They are recorded in our financial statements when they are issued. 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 fiscal year.

Certain contracts allow us to issue invoices to clients in advance of providing services. “Billings in excess of costs” represent billings to, and cash collected from, clients in advance of work performed. We anticipate that substantially all such amounts will be earned over the next twelve months.

Property, Equipment, and Improvements

Property, equipment and improvements are carried at cost, and are shown net of accumulated depreciation and amortization in the accompanying Consolidated Balance Sheets. Depreciation and amortization is computed primarily by using the straight-line method over the estimated useful lives of the assets. The cost of leasehold improvements is amortized using the straight-line method over the lesser of the estimated useful life of the asset or the remaining term of the related lease. Estimated useful lives range from 20 to 40 years for buildings, from 3 to 10 years for equipment and from 4 to 10 years for leasehold improvements.

F-10

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost of an acquired business over the Fair Value of the net tangible and intangible assets acquired. Goodwill and intangible assets with indefinite lives are not amortized; instead, we test goodwill for possible impairment. We conduct such tests annually (or more frequently if events occur or circumstances change that would more likely than not reduce the Fair Values of our reporting units below their respective carrying values). The first step in the test is to compare the Fair Value of each of the Company’s reporting units to their respective carrying amounts, including goodwill. In the event that the carrying value of a reporting unit exceeds its Fair Value, a second test is performed to measure the amount of the impairment loss, if any. In performing the annual impairment test, the Company evaluates goodwill at the reporting unit level. We have determined that our operating segment is comprised of two reporting units based on geography. Based on the results of these tests, we have determined that the Fair Value of our reporting units substantially exceeded their respective carrying values for fiscal years 2015, 2014, and 2013.

The following table provides certain information related to the Company’s acquired intangible assets for each of the fiscal years presented (in thousands):

		Customer Relationships, Contracts, and Backlog				Developed Technology				Trade Names				Other				Total
Balances, September 28, 2012		$	217,729			$	20,444			$	3,082			$	2,507			$	243,762
Amortization		(20,731		)		(1,533		)		(614		)		(1,130		)		(24,008		)
Foreign currency translation		(1,471		)		—				(289		)		(90		)		(1,850		)
Balances, September 27, 2013		195,527				18,911				2,179				1,287				217,904
Acquisitions		249,164				—				15,049				—				264,213
Amortization		(37,737		)		(1,533		)		(3,251		)		(693		)		(43,214		)
Foreign currency translation		1,087				—				171				31				1,289
Balances, September 26, 2014		408,041				17,378				14,148				625				440,192
Acquisitions		(4,315		)		—				(1,292		)		300				(5,307		)
Amortization		(39,967		)		(1,533		)		(4,172		)		(277		)		(45,949		)
Foreign currency translation		(34,418		)		—				(1,085		)		(14		)		(35,517		)
Balances, October 2, 2015		$	329,341			$	15,845			$	7,599			$	634			$	353,419
Weighted average amortization period (years)		9.2				10.3				4.4				6.9				9.2

The weighted average amortization period includes the effects of foreign currency translation.

The above table excludes the values assigned to those intangible assets embedded in the Company’s investment in AWE Management Ltd. (“AWE”) and Guimar Engenharia LTDA ("Guimar"). Those amounts are included in the carrying value of the Company’s investment in AWE and Guimar. The amount of amortization expense we estimate we will record during each of the next five fiscal years relating to intangible assets existing at October 2, 2015, including those associated with AWE and Guimar, is: fiscal 2016 - $46.5 million; fiscal 2017 - $44.5 million; fiscal 2018 - $43.7 million; fiscal 2019 - $42.7 million; and fiscal 2020 - $40.4 million. The amounts reported for future amortization include the effect of exchange rate changes.

The change in goodwill during the three year period ending October 2, 2015 was due primarily to businesses acquired during fiscal 2014.

Business Combinations

On December 13, 2013, the Company acquired all of the outstanding equity 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.

F-11

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Included in selling, general and administrative expense for fiscal 2014 is $9.2 million of incremental, transaction-related expenses.

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 liabilities	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 names	8,906
Total	$	202,166

The preliminary 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.

The following table presents the unaudited, pro forma consolidated results of operations (in millions, except per share amounts) for fiscal year 2014 as if the acquisition of SKM operations had occurred as of September 28, 2012. The period end dates of SKM are different from those of the Company and, accordingly, certain adjustments were made to conform SKM's period end dates to those of the Company. Management believes these adjustments make the comparative data more representative of what the combined results of operations would have been over the pro forma period. The pro forma results are not necessarily indicative of (i) the results of operations that would have occurred had we actually acquired SKM on September 28, 2012; or (ii) future results of operations:

	2014
Revenues	$	12,944,848
Net earnings attributable to Jacobs	$	335,658
Basic earnings per share	$	2.57
Diluted earnings per share	$	2.54

The pro forma earnings for fiscal year 2014 were adjusted to exclude $21.4 million of transaction-related costs incurred by both parties. For fiscal year 2014, the pro forma earnings were adjusted to reduce interest expense by $2.3 million

F-12

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

(for a total of $2.1 million). For fiscal year 2014, the pro forma earnings were adjusted to include net incremental intangible amortization of $2.5 million (for a total of $19.9 million).

The pro forma earnings for fiscal year 2014 include an expense from SKM of $24 million related to a settlement with certain SKM shareholders regarding provisions of their shareholding plan that was settled and paid prior to the close of the business combination and recorded during the three month period ended December 27, 2013.

During fiscal year 2014, the Company also acquired Federal Network Services LLC (formerly a subsidiary of Verizon), Eagleton Engineering, LLC, FMHC Corporation, Stobbarts (Nuclear) Limited, Trompeter Enterprises, and MARMAC Field Services, Inc. The operations of these acquisitions were not material to the Company's consolidated results for fiscal 2014. During fiscal 2014, we also acquired an additional 15% interest in 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%.

Foreign Currencies

In preparing our Consolidated Financial Statements, it is necessary to translate the financial statements of our subsidiaries operating outside the U.S., which are denominated in currencies other than the U.S. dollar, into the U.S. dollar. In accordance with U.S. GAAP, revenues and expenses of operations outside the U.S. are translated into U.S. dollars using weighted-average exchange rates for the applicable period(s) being translated while the assets and liabilities of operations outside the U.S. are generally translated into U.S. dollars using period-end exchange rates. The net effect of foreign currency translation adjustments is included in stockholders’ equity as a component of accumulated other comprehensive income (loss) in the accompanying Consolidated Balance Sheets.

Share-Based Payments

We measure the value of services received from employees and directors in exchange for an award of an equity instrument based on the grant-date Fair Value of the award. The computed value is recognized as a non-cash cost on a straight-line basis over the period the individual provides services, which is typically the vesting period of the award with the exception of awards containing an internal performance measure which is recognized on a straight-line basis over the vesting period subject to the probability of meeting the performance requirements and adjusted for the number of shares expected to be earned. The cost of these awards is recorded in selling, general and administrative expense in the accompanying Consolidated Financial Statements.

The following table presents our stock-based compensation expense for the various types of awards made by the Company for each of the fiscal years presented (in thousands):

Award Type		2015				2014				2013
Restricted Stock and Restricted Stock Units (excluding Market and Performance Awards)		$	20,779			$	17,307			$	12,836
Stock Options		10,683				10,829				11,385
Market and Performance Awards		9,950				15,264				15,297
Total Expense		$	41,412			$	43,400			$	39,518

The Company has two incentive plans whereby eligible employees and directors of Jacobs may be granted stock options, restricted stock, and/or restricted stock units.

Stock Options—Substantially all of the stock options granted during the year were awarded on the same date (although the date is different for employees and directors). The following table presents the assumptions used in the Black-Scholes option-pricing model during each of the last three fiscal years for awards made to employees and directors:

F-13

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

		Awards Made to Employees									Awards Made to Directors
		2015			2014			2013			2015			2014			2013
Dividend yield		0	%		0	%		0	%		0	%		0	%		0	%
Expected volatility		27.00	%		34.25	%		38.37	%		29.28	%		35.30	%		37.65	%
Risk-free interest rate		1.67	%		1.79	%		1.11	%		1.63	%		1.76	%		0.95	%
Expected term of options (in years)		5.82			5.82			5.82			5.82			5.82			5.82

Performance Awards— During fiscal years 2014 and 2013, the Company granted restricted stock units containing service, performance, and market conditions. The restricted stock unit award for these years is split equally between Relative TSR Restricted Stock Units and Net Earnings Growth Restricted Stock Units. During fiscal year 2015, the Company only granted Net Earnings Growth Restricted Stock Units.

The number of Relative TSR Restricted Stock Units in which the employee may ultimately vest shall be equal to the Relative TSR grant multiplied by the TSR Performance Multiplier. The TSR Performance Multiplier will be determined by comparing the Company's total stockholder return to the total stockholder return of each of the companies in a specified industry peer group over the three-year period immediately following the award date. For purposes of computing total stockholder return, the beginning stock price will be the average closing stock price over the 30 calendar day period ending on the award date ("Performance Period"), and the ending stock price will be the average closing price over the 30 calendar day period ending on the last day of the performance period. Any dividend payments made over the Performance Period will be deemed re-invested on the ex-dividend data in additional shares of the related Company.

The following table presents the basis on which the Relative TSR Restricted Stock Units are determined:

Company TSR Percentile Rank		TSR Performance Multiplier
Below 30th percentile		—%
30th percentile		50%
50th percentile		100%
70th percentile or above		150%

If the Company's total stockholder return over the Performance Period falls between any of the brackets described above, the TSR Performance Multiplier will be determined using straight line interpolation based on the actual percentile ranking.

Substantially all of the TSR restricted stock units awarded during the year are awarded on the same date. The following table presents the assumptions used to value the TSR restricted stock units:

	2014		2013
Dividend yield	—	%	—	%
Expected volatility	24.77	%	29.18	%
Risk-free interest rate	0.80	%	0.42	%
Expected term (in years)	3		3

The number of Net Earnings Growth Restricted Stock Units awarded in fiscal year 2013 in which an employee may ultimately vest shall be equal to the sum of the following: (1) an amount, not less than zero, equal to one-third of the earned Net Earnings Growth Restricted Stock Units grant multiplied by the Net Earnings Growth Performance Multiplier (or, "NEGPM", as defined) determined based upon the growth in the Company's Net Earnings (as defined) over the period starting on the first day of the Company's third quarter of fiscal 2013 and ending on the last day of the Company's second quarter of fiscal 2014; plus, (2) an amount, not less than zero, equal to (A) two-thirds of the earned Net Earnings Growth Restricted Stock Units grant multiplied by the NEGPM determined based upon the average growth in the Company's Net Earnings over the period starting on the first day of the Company's third quarter of fiscal 2013 and ending on the last day of the Company's second quarter of fiscal 2015, minus (B) the amount determined pursuant to (1) above; plus, (3) an amount, not less than zero, equal to (A) the earned Net Earnings Growth Restricted Stock Units grant multiplied by the NEGPM determined based upon the average growth in the Company's Net Earnings over the period starting on the first day of the Company's third quarter of

F-14

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

fiscal 2013 and ending on the last day of the Company's second quarter of fiscal 2016, minus (B) the amount determined pursuant to (1) and (2) above.

For Net Earnings Growth Restricted Stock Units awarded in fiscal years 2014 and 2015, all of the criteria referenced in the paragraph above are the same over the three year vesting period with the exception of the performance period. The performance periods for fiscal years 2014 and 2015 are based upon the Company's Net Earnings (as defined) over the period starting on the first day of the Company's third quarter of fiscal 2014 and ending on the last day of the Company's second quarter of fiscal 2017 and the Company's Net Earnings (as defined) over the period starting on the first day of the Company's third quarter of fiscal 2015 and ending on the last day of the Company's second quarter of fiscal 2018, respectively.

If the Company's average growth in Net Earnings over the applicable fiscal years during the respective performance periods is between 5% and 10%, 10% and 15%, or 15% and 20%, the Net Earnings Growth Performance Multiplier will be determined using straight line interpolation based on the actual average growth in the Company's consolidated net earnings attributable to Jacobs.

The following table presents the basis on which the Net Earnings Growth Restricted Stock Units are determined:

Average Net Earnings Growth		Net Earnings Growth Performance Multiplier
Less than 5%		—%
5%		50%
10%		100%
15%		150%
20%		200%

Unless stated otherwise, all other awards are valued based on the closing price of the Company's common stock as reported in the NYSE Composite Price History on their respective grant dates.

Concentrations of Credit Risk

Our cash balances and cash equivalents are maintained in accounts held by major banks and financial institutions located primarily in North America, South America, Europe, the Middle East, India, Australia, Africa, and Asia. In the normal course of business, and consistent with industry practices, we grant credit to our clients without requiring collateral. Concentrations of credit risk is the risk that, if we extend a significant amount of credit to clients in a specific geographic area or industry, we may experience disproportionately high levels of default if those clients are adversely affected by factors particular to their geographic area or industry. Concentrations of credit risk relative to trade receivables are limited due to our diverse client base, which includes the U.S. federal government and multi-national corporations operating in a broad range of industries and geographic areas. Additionally, in order to mitigate credit risk, we continually evaluate the credit worthiness of our major commercial clients.

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 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.

Earlier in these Notes to Consolidated Financial Statements we discussed three significant accounting policies that rely on the application of estimates and assumptions: revenue recognition for long-term construction contracts; the process for testing goodwill for possible impairment; and the accounting for share-based payments to employees and directors. The following is a discussion of certain other significant accounting policies that rely on the use of estimates:

F-15

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Accounting for Pensions— We use certain assumptions and estimates in order to calculate periodic pension cost and the value of the assets and liabilities of our pension plans. These assumptions involve discount rates, investment returns, and projected salary increases, among others. Changes in the actuarial assumptions may have a material effect on the plans’ liabilities and the projected pension expense.

Accounting for Income Taxes— We determine our consolidated income tax expense using the asset and liability method prescribed by U.S. GAAP. Under this method, deferred tax assets and liabilities are recognized for the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and income tax purposes. Such deferred tax assets and liabilities are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. If and when we determine that a deferred tax asset will not be realized for its full amount, we will recognize and record a valuation allowance with a corresponding charge to earnings. Judgment is required in determining our worldwide provision for income taxes. In the normal course of business, we may engage in numerous transactions every day for which the ultimate tax outcome (including the period in which the transaction will ultimately be included in taxable income or deducted as an expense) is uncertain. Additionally, we file income, franchise, gross receipts and similar tax returns in many jurisdictions. Our tax returns are subject to audit and investigation by the Internal Revenue Service, most states in the U.S., and by various government agencies representing many jurisdictions outside the U.S.

Contractual Guarantees, Litigation, Investigations, and Insurance— In the normal course of business, we are subject to certain contractual guarantees and litigation. We record in the Consolidated Balance Sheets amounts representing our estimated liability relating to such guarantees, litigation, and insurance claims. We perform an analysis to determine the level of reserves to establish for both insurance-related claims that are known and have been asserted against us as well as for insurance-related claims 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 Statements of Earnings. In addition, as a contractor providing services to various agencies of the U.S. federal government, we are subject to many levels of audits, investigations, and claims by, or on behalf of, the U.S. federal government with respect to contract performance, pricing, costs, cost allocations, and procurement practices. We adjust revenues based upon the amounts we expect to realize considering the effects of any client audits or governmental investigations.

Accounting for Business Combinations— U.S. GAAP requires that the purchase price paid for business combinations accounted for using the acquisition method be allocated to the assets and liabilities acquired based on their respective Fair Values. Determining the Fair Value of contract assets and liabilities acquired often requires estimates and judgments regarding, among other things, the estimated cost to complete such contracts. The Company must also make certain estimates and judgments relating to other assets and liabilities acquired as well as any identifiable intangible assets acquired.

New Accounting Pronouncements

In May 2014, the FASB issued ASU No. 2014-09—Revenue from Contracts with Customers. The new guidance provided by ASU 2014-09 is intended to remove inconsistencies and perceived weaknesses in the existing revenue requirements, provide a more robust framework for addressing revenue issues, improve comparability, provide more useful information and simplify the preparation of financial statements. ASU 2014-09 was initially effective for annual and interim reporting periods beginning after December 15, 2016. On July 9, 2015 the FASB approved a one year deferral of the effective date of this standard. The revised effective date for the standard is for annual reporting periods beginning after December 15, 2017 and interim periods therein. The FASB also approved changes allowing for early adoption of the standard as of the original effective date. The Company continues to evaluate the impact that the new guidance may have on the consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03—Simplifying the Presentation of Debt Issuance Costs. ASU 2015-03 was issued to simplify the presentation of debt issuance costs by requiring such costs to be presented as a deduction from the corresponding debt liability. Through this ASU, the FASB intends to make the presentation of debt issuance costs consistent with the presentation of debt discounts or premiums. The guidance is effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. The Company does not believe the adoption of this ASU will have a material effect on its consolidated financial statements.

In May 2015, the FASB issued Accounting Standards Update 2015-07—Disclosures for Investments in Certain Entities that Calculate Net Asset Value Per Share (or its Equivalent). ASU 2015-07 removes the requirement to categorize within the fair value hierarchy investments for which fair values are estimated using the net asset value practical expedient provided by ASC 820—Fair Value Measurement. Disclosures about investments in certain entities that calculate net asset value per share are limited under ASU 2015-07 to those investments for which the entity has elected to estimate the fair value using the net

F-16

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

asset value practical expedient. ASU 2015-07 is effective for entities (other than public business entities) for fiscal years beginning after December 15, 2016, with retrospective application to all periods presented. Early application is permitted. The Company is evaluating the impacts of the ASU, but does not expect the impacts to be material to its consolidated financial statements.

3. Employee Stock Purchase and Stock Option Plans

Broad-Based, Employee Stock Purchase Plans

Under the 1989 ESPP and the GESPP, eligible employees who elect to participate in these plans are granted the right to purchase shares of the common stock of Jacobs at a discount that is limited to 5% of the per-share market value on the day shares are sold to employees. The following table summarizes the stock issuance activity under the 1989 ESPP and the GESPP during each of the last three fiscal years:

		2015				2014				2013
Aggregate Purchase Price Paid for Shares Sold:
Under the 1989 ESPP		$	28,621,800			$	30,354,723			$	30,012,848
Under the GESPP		3,535,479				3,314,046				3,068,578
Total		$	32,157,279			$	33,668,769			$	33,081,426
Aggregate Number of Shares Sold:
Under the 1989 ESPP		696,853				553,201				642,675
Under the GESPP		84,361				59,883				64,963
Total		781,214				613,084				707,638

At October 2, 2015, there remains 1,163,967 shares reserved for issuance under the 1989 ESPP and 127,824 shares reserved for issuance under the GESPP.

Stock Incentive Plans

We also sponsor the 1999 SIP and the 1999 ODSP. The 1999 SIP provides for the issuance of incentive stock options, nonqualified stock options, share appreciation rights ("SAR"), restricted stock, and restricted stock units to employees. The 1999 ODSP provides for awards of shares of common stock, restricted stock, and restricted stock units, and grants of nonqualified stock options to our outside (i.e., nonemployee) directors. The following table sets forth certain information about the 1999 Plans:

		1999 SIP			1999 ODSP			Total
Number of shares authorized		29,850,000			800,000			30,650,000
Number of remaining shares reserved for issuance at October 2, 2015		10,894,091			323,500			11,217,591
Number of shares relating to outstanding stock options at October 2, 2015		3,790,332			282,375			4,072,707
Number of shares available for future awards:
At October 2, 2015		7,103,759			41,125			7,144,884
At September 26, 2014		7,118,672			90,125			7,208,797

Effective September 28, 2012, all grants of shares under the 1999 SIP are issued on a fungible share basis. An award of an option or SAR counts as 1.00 share issued under the 1999 SIP Plan. A grant other than an option or SAR counts as 1.92 shares issued under the 1999 SIP Plan.

F-17

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the Fair Value of shares (of restricted stock and restricted stock units) vested during each of the last three fiscal years (in thousands):

		2015				2014				2013
Restricted Stock and Restricted Stock Units (service condition)		18,568				6,820				13,054
Restricted Stock Units (service, market, and performance conditions at target)		11,264				18,675				—
Total		$	29,832			$	25,495			$	13,054

The following table presents the Company’s total pre-tax compensation cost relating to share-based payments included in the accompanying Consolidated Statements of Earnings (in thousands):

2015				2014				2013
$	41,412			$	43,400			$	39,518

At October 2, 2015, the amount of compensation cost relating to nonvested awards not yet recognized in the financial statements is approximately $109.8 million. The majority of the unrecognized compensation costs will be recognized by the first quarter of fiscal 2019. The weighted average remaining contractual term of options currently exercisable is 5.4 years years.

Stock Options

The following table summarizes the stock option activity for each of the last three fiscal years:

		Number of Stock Options			Weighted Average Exercise Price
Outstanding at September 28, 2012		5,756,734			$	47.23
Granted		753,450			$	54.71
Exercised		(1,782,371	)		$	37.00
Cancelled or expired		(121,601	)		$	50.22
Outstanding at September 27, 2013		4,606,212			$	52.33
Granted		602,525			$	53.51
Exercised		(718,065	)		$	47.18
Cancelled or expired		(269,525	)		$	54.46
Outstanding at September 26, 2014		4,221,147			$	53.23
Granted		614,759			$	43.56
Exercised		(34,000	)		$	31.54
Cancelled or expired		(729,199	)		$	86.15
Outstanding at October 2, 2015		4,072,707			$	46.06

Stock options outstanding at October 2, 2015 consisted entirely of nonqualified stock options. The following table presents the total intrinsic value of stock options exercised during each of the last three fiscal years (in thousands):

2015				2014				2013
$	442			$	9,590			$	22,163

F-18

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The total intrinsic value of stock options exercisable at October 2, 2015, was approximately $0.2 million. The following table presents certain other information regarding our 1999 Plans:

		2015				2014				2013
At fiscal year end:
Range of exercise prices for options outstanding		$32.51–$80.63				$25.87–$94.11				$20.98–$94.11
Number of options exercisable		2,590,560				2,725,980				3,034,111
For the fiscal year:
Range of prices relating to options exercised		$25.87–$42.74				$20.98–$57.54				$18.49–$56.95
Estimated weighted average Fair Values of options granted		$	13.41			$	19.04			$	20.64

The following table presents certain information regarding stock options outstanding, and stock options exercisable at October 2, 2015:

		Options Outstanding									Options Exercisable
Range of Exercise Prices		Number			Weighted Average Remaining Contractual Life (years)		Weighted Average Price				Number			Weighted Average Exercise Price
$32.51 - $37.32		519,375			6.39		$	37.01			394,625			$	37.00
$37.43 - $46.37		2,057,796			5.86		42.74				1,429,761			42.40
$47.11 - $55.53		1,401,461			7.38		53.00				709,699			52.22
$60.08 - $80.63		94,075			5.98		65.33				56,475			68.64
		4,072,707			6.56		$	46.06			2,590,560			$	44.84

The 1999 Plans allow participants to satisfy the exercise price of stock options by tendering shares of Jacobs common stock that have been owned by the participants for at least six months. Shares so tendered are retired and canceled, and are shown as repurchases of common stock in the accompanying Consolidated Statements of Stockholders’ Equity.

The following table presents the number of shares of restricted stock and restricted stock units issued under the 1999 SIP during each of the last three fiscal years:

		2015			2014			2013
Restricted stock		507,882			589,150			445,200
Restricted stock units (service condition)		126,635			287,545			107,500
Restricted stock units (service, market, and performance conditions at target)		219,965			432,700			471,250

Notes:

The amount of restricted stock units issued for awards with performance and market conditions in the above table are based on the target amount. The number of shares ultimately issued, which could be greater or less than target, will be based on achieving specific performance conditions described in Note 2 – Significant Accounting Policies.

The share amounts in the above tables reflect the non-fungible share counting of 1 shares for each share of restricted stock and restricted stock unit issued.

F-19

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the number of shares of restricted stock and restricted stock units cancelled and withheld for taxes under the 1999 SIP during each of the last three fiscal years:

		2015			2014			2013
Restricted stock		326,480			147,221			128,923
Restricted stock units (service condition)		70,296			12,333			3,385
Restricted stock units (service, market, and performance conditions at target)		194,116			52,000			32,000

Notes:

The amount of restricted stock units cancelled for awards with market and performance conditions in the above table is based on the target amount.

The share amounts in the above tables reflect the non-fungible share counting of 1 shares for each share of restricted stock and restricted stock unit issued.

The restrictions attached to restricted stock and restricted stock units generally relate to the recipient’s ability to sell or otherwise transfer the stock or stock units. There are also restrictions that subject the stock and stock units to forfeiture back to the Company until earned by the recipient through continued employment or service.

The following table provides the number of shares of restricted stock and restricted stock units outstanding at October 2, 2015 under the 1999 SIP. Shares granted prior to September 29, 2012 were granted on a 1-to-1 basis ("Not Fungible"). Shares Granted after September 28, 2012 were issued on a 1.92-to-1.00 basis ("Fungible"):

		Not Fungible			Fungible			Total
Restricted stock		459,100			1,351,732			1,810,832
Restricted stock units (service condition)		87,960			455,245			543,205
Restricted stock units (service, market, and performance conditions at target)		—			884,219			884,219

The following table presents the number of shares of restricted stock and restricted stock units issued under the 1999 ODSP during each of the last three fiscal years:

		2015			2014			2013
Restricted stock units (service condition)		13,500			15,000			13,500

The following table provides the number of shares of restricted stock and restricted stock units outstanding at October 2, 2015 under the 1999 ODSP:

		2015
Restricted stock		40,000
Restricted stock units (service condition)		76,000

All shares granted under the 1999 ODSP are issued on a 1-to-1 basis.

F-20

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

4. Earnings Per Share

Basic and Diluted Earnings Per Share

The following table (i) reconciles the denominator used to compute Basic EPS to the denominator used to compute Diluted EPS for each of the last three fiscal years, and (ii) discloses the number of antidilutive stock options, shares of restricted stock, and restricted stock units outstanding at the end of each of the fiscal years indicated (in thousands):

		2015			2014			2013
Shares used to calculate EPS:
Weighted average shares outstanding (denominator used to compute basic EPS)		125,007			130,483			129,288
Effect of stock options and restricted stock		1,103			1,888			1,657
Denominator used to compute diluted EPS		126,110			132,371			130,945
Antidilutive stock options, shares of restricted stock, and restricted stock units		3,237			2,074			2,603

Share Repurchases

On August 19, 2014, the Company's Board of Directors authorized a share repurchase program of up to $500 million of the Company's common stock over a three year period (the "2014 Share Repurchase Program"). As of October 2, 2015, the Company exhausted the repurchase capacity under the authorization. As authorized, share repurchases may be executed through various means including, without limitation, open market transactions, privately negotiated transactions or otherwise. The share repurchase program did not obligate the Company to purchase any shares, and would have expired on August 19, 2017.

The following table summarizes the activity under this program during fiscal 2015 (in thousands, except per-share amounts):

	Amount Authorized (in thousands)				Average Price Per Share (1)				Total Shares Retired					Shares Repurchased 2015
	$	500,000			$	43.33			9,746		422,315,657			9,746

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

program authorization date.

On July 23, 2015, the Board of Directors approved a program to purchase up to an additional $500 million of the Company's common stock over the next three years (the "2015 Share Repurchase Program"). The new share repurchase authorization is subject to the same general terms and conditions as the prior share repurchase authorization summarized above.

5. Borrowings

Short-Term Credit Arrangements

The Company maintains both committed and uncommitted credit arrangements with several banks providing for short-term borrowing capacity and overdraft protection. There were borrowings of $13.4 million outstanding under these short-term credit facilities at a weighted average interest rate of 2.3% at October 2, 2015, and there were borrowings of $36.7 million outstanding under these short-term credit facilities at September 26, 2014.

F-21

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Long-term Debt

On February 7, 2014, Jacobs and certain of its subsidiaries entered into 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 following table presents certain information regarding the Company’s long-term revolving credit facilities at October 2, 2015, and September 26, 2014 (dollars in thousands):

2015						2014
Principal Balance Outstanding				Range of Interest Rates		Principal Balance Outstanding				Range of Interest Rates
$	584,434			1.0% – 1.51%		$	764,075			1.0% – 1.51%

The total amount outstanding under the 2014 Facility in the form of direct borrowings at October 2, 2015 was $0.6 billion. The Company has issued $2.5 million in letters of credit leaving $1.0 billion of available borrowing capacity under the 2014 Facility at October 2, 2015. In addition, the Company had $233.9 million issued under separate, committed and uncommitted letter-of-credit facilities for total issued letters of credit of $236.4 million at October 2, 2015.

The 2014 Facility expires in February 2019 and permits the Company to borrow under two separate 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 between 1.0% and 1.5% or a base rate plus a margin of between 0% and 0.5%. 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 2014 Facility also provides an accordion feature that allows the Company and the lenders to increase the facility amount to $2.1 billion. The Company pays a facility fee of between 0.100% and 0.25% 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. In addition, the 2014 Facility contains customary events of default. We were in compliance with our debt covenants at October 2, 2015.

The following table presents certain additional information regarding the Company’s long-term debt for the fiscal years shown:

		2015				2014
Maximum amount outstanding at any month-end during the fiscal year		$	1,006,899			$	1,036,066
Average amount outstanding during the year		$	943,258			$	866,264
Weighted average interest rate during the year		1.28		%		1.18		%

The following table presents the amount of interest paid by the Company during each of the last three fiscal years (in thousands):

2015				2014				2013
$	15,506			$	13,841			$	6,685

6. Pension and Other Postretirement Benefit Plans

Company-Only Sponsored Plans

We sponsor various defined benefit pension plans covering employees of certain U.S. and international subsidiaries. The pension plans provide pension benefits that are based on the employee’s compensation and years of service. Our funding policy is to fund the actuarially determined accrued benefits where applicable, allowing for projected compensation increases using the projected unit method.

F-22

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The accounting for pension and other post-retirement benefit plans requires the use of assumptions and estimates in order to calculate periodic benefit cost and the value of the plans’ assets and benefit obligations. These assumptions include discount rates, investment returns, and projected salary increases, amongt others. The discount rates used in valuing the plans' benefit obligations were determined with reference to high quality corporate and government bonds that are appropriately matched to the duration of each plan's obligations. The expected long-term rate of return on plan assets is generally based on using country-specific simulation models which select a single outcome for expected return based on the target asset allocation. The expected long-term-rates of return used in the valuation are the annual average returns generated by these assumptions over a 20 year period for each asset class based on the expected long-term rate of return of the underlying assets.

The following table sets forth the changes in the plans’ combined net benefit obligation (segregated between plans existing within and outside the U.S.) during each of the fiscal years presented (in thousands):

		U.S. Pension Plans								Non-U.S. Pension Plans
		2015				2014				2015				2014
Net benefit obligation at the beginning of the year		$	495,788			$	468,439			$	1,196,520			$	1,307,331
Service cost		12,045				12,077				21,374				25,374
Interest cost		20,629				22,041				44,659				54,208
Participants’ contributions		2,743				3,095				4,402				9,082
Actuarial losses		42,749				27,076				30,238				105,838
Benefits paid		(40,289		)		(35,634		)		(35,662		)		(33,387		)
Curtailments and settlements		—				—				(5,763		)		(269,580		)
Plan amendments		—				(1,306		)		(1,612		)		—
Effect of exchange rate changes		—				—				(98,564		)		(2,346		)
Net benefit obligation at the end of the year		$	533,665			$	495,788			$	1,155,592			$	1,196,520

The following table sets forth the changes in the combined Fair Value of the plans’ assets (segregated between plans existing within and outside the U.S.) during each of the fiscal years presented (in thousands):

		U.S. Pension Plans								Non-U.S. Pension Plans
		2015				2014				2015				2014
Fair Value of plan assets at the beginning of the year		$	415,350			$	390,777			$	876,171			$	982,479
Actual return on plan assets		(1,754		)		45,484				86,411				130,665
Employer contributions		3,857				11,628				39,326				57,977
Participants’ contributions		2,743				3,095				4,402				9,082
Gross benefits paid		(40,289		)		(35,634		)		(35,662		)		(33,387		)
Curtailments/settlements		—				—				(1,646		)		(268,486		)
Effect of exchange rate changes		—				—				(72,704		)		(2,159		)
Fair Value of plan assets at the end of the year		$	379,907			$	415,350			$	896,298			$	876,171

F-23

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table reconciles the combined funded statuses of the plans recognized in the accompanying Consolidated Balance Sheets at October 2, 2015, and September 26, 2014 (segregated between plans existing within and outside the U.S.) (in thousands):

		U.S. Pension Plans								Non-U.S. Pension Plans
		2015				2014				2015				2014
Net benefit obligation at the end of the year		$	533,665			$	495,788			$	1,155,592			$	1,196,520
Fair Value of plan assets at the end of the year		379,907				415,350				896,298				876,171
Under-funded amount recognized at the end of the year		$	153,758			$	80,438			$	259,294			$	320,349

The following table presents the accumulated benefit obligation at October 2, 2015, and September 26, 2014 (segregated between plans existing within and outside the U.S.) (in thousands):

		U.S. Pension Plans								Non-U.S. Pension Plans
		2015				2014				2015				2014
Accumulated benefit obligation at the end of the year		$	488,024			$	455,245			$	1,113,016			$	1,128,715

The following table presents the amounts recognized in the accompanying Consolidated Balance Sheets at October 2, 2015 and September 26, 2014 (segregated between plans existing within and outside the U.S.) (in thousands):

		U.S. Pension Plans								Non-U.S. Pension Plans
		2015				2014				2015				2014
Prepaid benefit cost included in prepaid assets		$	—			$	—			$	4,054			$	7,123
Accrued benefit cost included in current liabilities		—				—				381				1,447
Accrued benefit cost included in noncurrent liabilities		153,758				80,438				262,967				326,025
Net amount recognized at the end of the year		$	153,758			$	80,438			$	259,294			$	320,349

Included in the tables are amounts relating to a U.S. pension plan, the participating employees in which are assigned to, and work exclusively on, a specific operating contract with the U.S. federal government. It is the intention 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. Accordingly, included in “Miscellaneous Noncurrent Assets” in the accompanying Consolidated Balance Sheet at October 2, 2015 is a receivable from the U.S. federal government of approximately $115.5 million ($61.1 million at September 26, 2014) representing the underfunded amount for this pension plan.

The following table presents the significant actuarial assumptions used in determining the funded statuses and the following year's benefit cost of the Company’s U.S. plans for each fiscal year presented:

		2015			2014			2013
Weighted average discount rates		3.9% to 4.0%			3.9% to 4.4%			4.4% to 5.0%
Rates of compensation increases		3.00	%		2.95	%		2.80	%
Expected long-term rates of return on plan assets		7.4	%		7.7	%		7.7	%

F-24

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the significant actuarial assumptions used in determining the funded statuses and the following year's benefit cost of the Company’s non-U.S. pension plans for each fiscal year presented:

		2015		2014		2013
Weighted average discount rates		1.6% to 7.8%		1.8% to 8.8%		0.4% to 9.3%
Rates of compensation increases		2.4% to 7.5%		2.6% to 7.5%		2.5% to 7.5%
Expected long-term rates of return on plan assets		3.5% to 8.5%		4.5% to 8.5%		0.4% to 8.5%

The following table presents certain amounts relating to our U.S. pension plans recognized in accumulated other comprehensive loss at October 2, 2015, September 26, 2014 and September 27, 2013 (in thousands):

		2015				2014				2013
Arising during the period:
Net actuarial (gain) loss		$	12,237			$	1,378			$	(15,850	)
Reclassification adjustments:
Net actuarial gain		(2,347		)		(2,255		)		(2,674		)
Total		$	9,890			$	(877	)		$	(18,524	)

The following table presents certain amounts relating to our non-U.S. pension plans recognized in accumulated other comprehensive loss at October 2, 2015, September 26, 2014 and September 27, 2013 (in thousands):

		2015				2014				2013
Arising during the period:
Net actuarial loss (gain)		$	(27,165	)		$	48,752			$	27,417
Prior service cost (benefit)		(1,512		)		(1		)		297
Total		(28,677		)		48,751				27,714
Reclassification adjustments:
Net actuarial gain		(14,034		)		(12,914		)		(9,778		)
Prior service cost (benefit)		51				(19		)		41
Total		(13,983		)		(12,933		)		(9,737		)
Total		$	(42,660	)		$	35,818			$	17,977

The following table presents certain amounts relating to our pension plans recorded in accumulated other comprehensive loss that have not yet been recognized as components of net periodic benefit cost at October 2, 2015, and September 26, 2014 (segregated between U.S. and non-U.S. plans) (in thousands):

		U.S. Pension Plans								Non-U.S. Pension Plans
		2015				2014				2015				2014
Net actuarial loss		$	59,458			$	49,569			$	208,929			$	263,913
Prior service cost		—				—				(1,947		)		(487		)
Total		$	59,458			$	49,569			$	206,982			$	263,426

The following table presents the amount of accumulated comprehensive income that will be amortized against earnings as part of our net periodic benefit cost in fiscal 2016 based on 2015 exchange rates (segregated between U.S. and non-U.S. plans) (in thousands):

		U.S. Pension Plans				Non-U.S. Pension Plans
Unrecognized net actuarial loss		$	8,876			$	14,176
Unrecognized prior service cost		(235		)		(245		)
Accumulated comprehensive loss to be recorded against earnings		$	8,641			$	13,931

F-25

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

We consider various factors in developing the estimates for the expected, long-term rates of return on plan assets. These factors include the projected, long-term rates of returns on the various types of assets in which the plans invest, as well as historical returns. In general, investment allocations are determined by each plan’s trustees and/or investment committees. The objectives of the plans’ investment policies are to (i) maximize returns while preserving capital; (ii) provide returns sufficient to meet the current and long-term obligations of the plan as the obligations become due; and (iii) maintain a diversified portfolio of assets so as to reduce the risk associated with having a disproportionate amount of the plans’ total assets invested in any one type of asset, issuer or geography. None of our pension plans hold Jacobs common stock directly (although some plans may hold shares indirectly through investments in mutual funds). The plans’ weighted average asset allocations at October 2, 2015, and September 26, 2014 (the measurement dates used in valuing the plans’ assets and liabilities) were as follows:

		U.S. Pension Plans						Non-U.S. Pension Plans
		2015			2014			2015			2014
Equity securities		70	%		75	%		25	%		29	%
Debt securities		21	%		21	%		31	%		32	%
Real estate investments		3	%		—	%		7	%		7	%
Other		6	%		4	%		37	%		32	%

The following table presents the Fair Value of the Company’s Domestic U.S. plan assets at October 2, 2015, segregated by level of Fair Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):

		Fair Values By Level of Fair Value Measurement Inputs
		Level 1				Level 3				Total
Domestic equities		$	225,362			$	—			$	225,362
Overseas equities		41,414				—				41,414
Domestic bonds		80,804				—				80,804
Cash and equivalents		6,041				—				6,041
Real estate		—				9,914				9,914
Hedge funds		—				16,372				16,372
Total		$	353,621			$	26,286			$	379,907

The following table presents the Fair Value of the Company’s non-U.S. pension plan assets at October 2, 2015, segregated by level of Fair Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):

		Fair Values By Level of Fair Value Measurement Inputs
		Level 1				Level 3				Total
Domestic equities		$	28,007			$	—			$	28,007
Overseas equities		198,309				—				198,309
Domestic bonds		203,266				—				203,266
Overseas bonds		71,545				—				71,545
Cash and equivalents		39,933				—				39,933
Real estate		—				61,996				61,996
Insurance contracts		—				32,522				32,522
Hedge funds		—				260,720				260,720
Total		$	541,060			$	355,238			$	896,298

F-26

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the Fair Value of the Company’s U.S. pension plan assets at September 26, 2014, segregated by level of Fair Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):

		Fair Values By Level of Fair Value Measurement Inputs
		Level 1				Level 3				Total
Domestic equities		$	268,674			$	—			$	268,674
Overseas equities		40,587				—				40,587
Domestic bonds		85,853				—				85,853
Cash and equivalents		3,932				—				3,932
Hedge funds		—				16,304				16,304
Total		$	399,046			$	16,304			$	415,350

The following table presents the Fair Value of the Company’s Non-U.S. pension plan assets at September 26, 2014, segregated by level of Fair Value measurement inputs within the Fair Value hierarchy promulgated by U.S. GAAP (in thousands):

		Fair Values By Level of Fair Value Measurement Inputs
		Level 1				Level 3				Total
Domestic equities		$	33,842			$	—			$	33,842
Overseas equities		218,779				—				218,779
Domestic bonds		198,344				—				198,344
Overseas bonds		76,349				—				76,349
Cash and equivalents		37,487				—				37,487
Real estate		—				59,966				59,966
Insurance contracts		—				37,468				37,468
Hedge funds		—				213,936				213,936
Total		$	564,801			$	311,370			$	876,171

At October 2, 2015 and September 26, 2014, the Company holds no assets in the U.S. or non-U.S. pension plans that use Level 2 fair value measurement inputs.

The following table summarizes the changes in the Fair Value of the Company’s U.S. Pension Plans’ Level 3 assets for the year ended October 2, 2015 (in thousands):

		Real Estate				Hedge Funds
Balance, beginning of year		$	—			$	16,304
Purchases, sales, and settlements		10,616				—
Realized and unrealized gains (losses)		—				68
Transfers		(702		)		—
Balance, end of year		$	9,914			$	16,372

F-27

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table summarizes the changes in the Fair Value of the Company’s non-U.S. Pension Plans’ Level 3 assets for the year ended October 2, 2015 (in thousands):

			Real Estate				Insurance Contracts				Hedge Funds
Balance, beginning of year			$	59,966			$	37,468			$	213,936
Purchases, sales, and settlements			1,271				526				4,760
Realized and unrealized gains			5,390				1,353				54,719
Transfers			—				—				—
Effect of exchange rate changes			(4,631		)		(6,825		)		(12,695		)
Balance, end of year			$	61,996			$	32,522			$	260,720

The following table summarizes the changes in the Fair Value of the Company’s U.S. Pension Plans’ Level 3 assets for the year ended September 26, 2014 (in thousands):

		Real Estate				Hedge Funds
Balance, beginning of year		$	4,411			$	15,511
Sales		(4,411		)		—
Realized and unrealized losses		—				793
Balance, end of year		$	—			$	16,304

The following table summarizes the changes in the Fair Value of the Company’s non-U.S. Pension Plans’ Level 3 assets for the year ended September 26, 2014 (in thousands):

		Infrastructure / Raw Goods				Real Estate				Insurance Contracts				Hedge Funds
Balance, beginning of year		$	7,076			$	57,173			$	21,214			$	246,389
Purchases, sales, and settlements		(8,125		)		(6,022		)		975				4,915
Realized and unrealized gains		1,025				8,341				926				(41,096		)
Transfers		—				—				15,756				—
Effect of exchange rate changes		24				474				(1,403		)		3,728
Balance, end of year		$	—			$	59,966			$	37,468			$	213,936

The following table presents the amount of cash contributions we anticipate making into the plans during fiscal 2016 (in thousands):

U.S. Pension Plans				Non-U.S. Pension Plans
$	15,100			$	30,830

The following table presents the total benefit payments expected to be paid to pension plan participants during each of the next five fiscal years, and in total for the five years thereafter (in thousands):

		U.S. Pension Plans				Non-U.S. Pension Plans
2016		$	43,155			$	30,242
2017		47,442				31,632
2018		41,798				33,959
2019		44,240				35,833
2020		44,697				35,869
For the periods 2021 through 2025		216,232				224,452

F-28

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the components of net periodic benefit cost for the Company’s U.S. pension plans recognized in the accompanying Consolidated Statements of Earnings for each of the last three fiscal years (in thousands):

		2015				2014				2013
Service cost		$	12,045			$	12,077			$	13,814
Interest cost		20,629				22,041				18,569
Expected return on plan assets		(29,526		)		(28,495		)		(25,826		)
Actuarial loss		3,756				3,608				8,030
Prior service cost		(239		)		(103		)		(103		)
Net pension cost, before special items		6,665				9,128				14,484
Special termination benefits		—				—				29
Total net periodic pension cost recognized		$	6,665			$	9,128			$	14,513

The following table presents the components of net periodic benefit cost for the Company’s Non-U.S. pension plans recognized in the accompanying Consolidated Statements of Earnings for each of the last three fiscal years (in thousands):

		2015				2014				2013
Service cost		$	21,374			$	25,374			$	30,117
Interest cost		44,659				54,208				51,331
Expected return on plan assets		(53,052		)		(56,394		)		(54,817		)
Actuarial loss		17,398				15,993				13,276
Prior service cost		(96		)		(28		)		(43		)
Net pension cost, before special items		30,283				39,153				39,864
Curtailments and settlements		255				(15,894		)		(383		)
Total net periodic pension cost recognized		$	30,538			$	23,259			$	39,481

Multiemployer Plans

In Canada and the U.S., we contribute to various trusteed pension plans covering hourly construction employees under industry-wide agreements. We also contribute to various trusteed plans in Australia and certain countries in Europe covering both hourly and certain salaried employees. Contributions are based on the hours worked by employees covered under these agreements and are charged to direct costs of contracts on a current basis.

The majority of the contributions the Company makes to multiemployer pension plans is outside the U.S. With respect to these multiemployer plans, the Company's liability to fund these plans is generally limited to the contributions we are required to make under collective bargaining agreements.

Based on our review of our multiemployer pension plans under the guidance provided in ASU 2011-09—Compensation-Retirement Benefits-Multiemployer Plans, we have concluded that none of the multiemployer pension plans into which we contribute are individually significant to our Consolidated Financial Statements.

The following table presents the Company’s contributions to these multiemployer plans during each of the last three fiscal years (in thousands):

		2015				2014				2013
Canada		$	42,575			$	56,341			$	72,660
Europe		10,902				12,693				12,930
United States		5,968				4,485				4,366
Total		$	59,445			$	73,519			$	89,956

F-29

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

7. Other Comprehensive Income

The following table presents amounts reclassified from changes 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 periods presented related to the Company's defined benefit pension plans (in thousands):

	2015				2014				2013
Amortization of Defined Benefit Items:
Actuarial losses	$	(21,153	)		$	(19,601	)		$	(17,554	)
Prior service benefit	96				28				43
Total Before Income Tax	(21,057		)		(19,573		)		(17,511		)
Income Tax Benefit	4,727				4,385				5,859
Total reclassifications after-tax	$	(16,330	)		$	(15,188	)		$	(11,652	)

8. Savings and Deferred Compensation Plans

Savings Plans

We sponsor various defined contribution savings plans which allow participants to make voluntary contributions by salary deduction. Such plans cover substantially all of our domestic, nonunion employees in the U.S. and are qualified under Section 401(k) of the U.S. IRC. Similar plans outside the U.S. cover various groups of employees of our international subsidiaries and affiliates. Several of these plans allow the Company to match, on a voluntary basis, a portion of the employee contributions. The following table presents the Company’s contributions to these savings plans during each of the last three fiscal years (in thousands):

2015				2014				2013
$	87,973			$	88,951			$	74,686

Deferred Compensation Plans

Our Executive Security Plan and Executive Deferral Plans are nonqualified deferred compensation programs that provide benefits payable to directors, officers, and certain key employees or their designated beneficiaries at specified future dates, upon retirement, or death. Benefit payments under both plans are funded by a combination of contributions from participants and the Company, and most of the participants are covered by life insurance policies with the Company designated as the beneficiary. The following table presents the amount charged to expense for the Company’s deferred compensation plans during each of the last three fiscal years (in thousands):

2015				2014				2013
$	5,536			$	5,321			$	4,470

F-30

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

9. Income Taxes

The following table presents the components of our consolidated income tax expense for each of the last three fiscal years (in thousands):

		2015				2014				2013
Current income tax expense:
Federal		$	72,840			$	102,450			$	121,302
State		16,248				18,698				23,246
Foreign		43,344				38,107				74,107
Total current tax expense		132,432				159,255				218,655
Deferred income tax expense (benefit):
Federal		13,337				7,561				(4,718		)
State		2,295				2,789				(582		)
Foreign		(46,809		)		20,449				8,011
Total deferred income tax expense (benefit)		(31,177		)		30,799				2,711
Consolidated income tax expense		$	101,255			$	190,054			$	221,366

Deferred taxes reflect the tax effects of the temporary differences between the amounts recorded as assets and liabilities for financial reporting purposes and the comparable amounts recorded for income tax purposes. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse. The following table presents the components of our net deferred tax assets at October 2, 2015, and September 26, 2014 (in thousands):

		2015				2014
Deferred tax assets:
Obligations relating to:
Defined benefit pension plans		$	64,644			$	67,822
Other employee benefit plans		186,701				215,863
Net Operating Losses		134,467				64,063
Contract revenues and costs		25,579				39,734
Deferred Rent		9,428				6,008
Other		13,565				1,703
Valuation Allowance		(60,320		)		(54,651		)
Gross deferred tax assets		374,064				340,542
Deferred tax liabilities:
Depreciation and amortization		(187,099		)		(193,726		)
Other, net		(3,994		)		(1,372		)
Gross deferred tax liabilities		(191,093		)		(195,098		)
Net deferred tax assets		$	182,971			$	145,444

A valuation allowance is recorded to reduce deferred tax assets to the amount that is more likely than not to be realized based on an assessment of positive and negative evidence, including estimates of future taxable income necessary to realize future deductible amounts. The valuation allowance at October 2, 2015 and September 26, 2014 was $60.3 million and $54.7 million, respectively.

Net operating loss carry forwards of foreign subsidiaries at October 2, 2015 and September 26, 2014 totaled $455.1 million and $205.8 million, respectively. If unused, foreign net operating losses of $127.8 million will expire between 2017 and 2035. Net operating losses of $327.3 million can be carried forward indefinitely.

F-31

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents the income tax benefits realized from the exercise of nonqualified stock options and disqualifying dispositions of stock sold under our employee stock purchase plans during each of the last three fiscal years (in millions):

2015				2014				2013
$	0.2			$	3.4			$	7.3

The following table reconciles total income tax expense using the statutory U.S. federal income tax rate to the consolidated income tax expense shown in the accompanying Consolidated Statements of Earnings for each of the last three fiscal years (dollars in thousands):

		2015				2014				2013
Statutory amount		$	141,479			$	189,758			$	231,542
State taxes, net of the federal benefit		12,857				12,750				14,892
Tax differential on foreign earnings		(60,151		)		(8,811		)		(20,253		)
Uncertain tax positions		2,281				(9,847		)		1,553
Other, net		4,789				6,204				(6,368		)
Consolidated income tax expense		$	101,255			$	190,054			$	221,366
Rates used to compute statutory amount		35.0		%		35.0		%		35.0		%
Consolidated effective income tax rate		23.5		%		35.1		%		33.5		%

The Company’s consolidated effective income tax rate was 23.5% for fiscal 2015, compared to 35.1% in fiscal 2014. Contributing to the decrease as compared to the prior year’s periods were the effects of a foreign currency loss and deductible costs associated with the 2015 Restructuring. Also contributing to the lower effective tax rate was the reduction of certain tax reserves due to statute expiration.

The following table presents income tax payments made during each of the last three fiscal years (in millions):

2015				2014				2013
$	156.5			$	173.6			$	235.8

The following table presents the components of our consolidated earnings before taxes for each of the last three fiscal years (in thousands):

		2015				2014				2013
United States earnings		$	283,504			$	288,800			$	352,404
Foreign earnings		146,633				253,366				309,144
		$	430,137			$	542,166			$	661,548

United States income taxes, net of applicable credits, have been provided on the undistributed earnings of the Company’s foreign subsidiaries, except in those instances where the earnings have been permanently reinvested. At October 2, 2015, approximately $26.1 million of such undistributed earnings of certain foreign subsidiaries have been permanently reinvested. Should these earnings be repatriated, approximately $4.9 million of income taxes would be payable.

The Company accounts for unrecognized tax benefits in accordance with ASC Topic 740, Income Taxes. It accounts for interest and penalties on unrecognized tax benefits as interest and penalties (i.e., not as part of income tax expense). The Company’s liability for gross unrecognized tax benefits was $42.7 million and $41.9 million at October 2, 2015 and September 26, 2014, respectively, all of which, if recognized, would affect the Company’s consolidated effective income tax rate. The Company had $42.1 million and $39.2 million in accrued interest and penalties at October 2, 2015, and September 26, 2014, respectively. The Company estimates that, within 12 months, $4.7 million of gross, primarily non-U.S.

F-32

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

unrecognized tax benefits will reverse due to the anticipated expiration of time to assess tax. As of October 2, 2015, the Company’s U.S. federal income tax returns for tax years 2012 through 2015 remain subject to examination.

The following table presents the reconciliation of the beginning and ending amount of unrecognized tax benefits for the years presented (in thousands):

		2015				2014				2013
Balance, beginning of year		$	41,923			$	51,770			$	53,637
Additions based on tax positions related to the current year		6,440				6,528				5,447
Reductions for tax positions of prior years		(5,697		)		(16,375		)		(6,354		)
Settlement		—				—				(960		)
Balance, end of year		$	42,666			$	41,923			$	51,770

10. Commitments and Contingencies, and Derivative Financial Instruments

Commitments Under Operating Leases

We lease certain of our facilities and equipment under operating leases with net aggregate future lease payments of approximately $915.8 million at October 2, 2015, payable as follows (in thousands):

In fiscal years,
2016	$	152,744
2017	138,081
2018	117,779
2019	98,626
2020	87,177
Thereafter	338,843
	933,250
Amounts representing sublease income	(17,401		)
Total, net aggregate future lease payments	$	915,849

We recognize rent expense, inclusive of landlord concessions and tenant allowances, over the lease term on a straight-line basis. We also recognize rent expense on a straight-line basis for leases containing fixed escalation clauses and rent holidays. Contingent rentals are included in rent expense as accruable. Operating leases relating to many of our major offices generally contain renewal options, and provide for additional rental based on escalation in operating expenses and real estate taxes.

The following table presents rent expense and sublease income offsetting the Company’s rent expense during each of the last three fiscal years (in thousands):

		2015				2014				2013
Rent expense		$	175,067			$	194,796			$	173,340
Sublease income		(5,275		)		(6,102		)		(7,914		)
Net rent		$	169,792			$	188,694			$	165,426

Guarantee

We are party to a synthetic lease agreement involving certain real and personal property located in Houston, Texas that we use in our operations. A synthetic lease is a type of off-balance sheet transaction which provides us with certain tax and other financial benefits. Significant terms of the lease are as follows:

End of lease term	2025
End of term purchase option (in thousands)	$	76,950
Residual value guaranty (in thousands)	$	62,412

F-33

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The Company refinanced the synthetic lease agreement effective July 28, 2015 with a ten year term. The new lease agreement continues to gives us the right to request an extension of the lease term. We may also assist the owner in selling the property at the end of the lease term, the proceeds from which would be used to reduce our residual value guarantee. The minimum lease payments required by the lease agreement is included in the above lease pay-out schedule. We have determined that the estimated Fair Value of the aforementioned financial guarantee was not significant at October 2, 2015.

Derivative Financial Instruments

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. 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.

Letters of Credit

Letters of credit outstanding at October 2, 2015 totaled $236.4 million. Of this amount, $2.5 million has been issued under the 2014 Facility and $233.9 million are issued under separate, committed and uncommitted letter-of-credit facilities.

11. Contractual Guarantees, Litigation, Investigations, and Insurance

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

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 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 insurance-related claims that are known and have been asserted against us, and for insurance-related claims 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.

The Company 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 ("Motiva"). 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 to perform professional services in connection with the expansion project at the Motiva Port Arthur, Texas refinery. In the Notice of Arbitration, Motiva asserts various causes of action and alleges fraud and breach of fiduciary duty and entitlement to equitable and monetary relief in excess of $7 billion. BJJV has denied liability and is vigorously defending these claims. The arbitration hearing is currently scheduled to begin on September 26, 2016. The Company does not expect this matter to have a material adverse effect on its consolidated financial statements.

F-34

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

On September 30, 2015, Nui Phao Mining Company Limited (“NPMC”) commenced arbitration proceedings against Jacobs E&C Australia Pty Limited. The arbitration is pending in Singapore before the Singapore International Arbitration Centre. In March 2011, Jacobs E&C was engaged by NPMC for the provision of management, design, engineering, and procurement services for the Nui Phao mine/mineral processing project in Vietnam. In the Notice of Arbitration, NPMC asserts various causes of action and alleges that the quantum of its claim exceeds $136.0 million. Jacobs has denied liability and is vigorously defending this claim. No hearing date has been set. The Company does not expect this matter to have a material adverse effect on its consolidated financial statements.

On August 7, 2015, Jacobs and Jacobs Field Services N.A. Inc. (collectively the “Jacobs Parties”) filed a demand for arbitration before the AAA against Freeport-McMoran Corporation (“Freeport”) alleging breach of contract for failure to pay invoices and for statutory penalties for failure to pay, and assert they are entitled to damages in the amount of $71.0 million. On August 28, 2015, Freeport filed an answering statement denying the Jacobs Parties’ claims and asserting counterclaims against the Jacobs Parties for breach of contract and alleging damages of $116.0 million. The Jacobs Parties have denied liability and are vigorously defending these claims. No hearing date has been set. The Company does not expect this matter to have a material adverse effect on its consolidated financial statements.

On December 7, 2009, the Judicial Council of California, Administrative Office of the Courts (“AOC”) initiated an action in the San Francisco County Superior Court against Jacobs Facilities Inc. (“JFI”) and Jacobs Project Management (“JPM”). On June 6, 2011, AOC filed an operative Second Amended Complaint, which added Jacobs as a defendant. The action arises out of a contract between AOC and JFI pursuant to which JFI agreed to provide regular maintenance and repairs at certain AOC court facilities. AOC alleged three causes of action: (1) breach of contract based on the expiration of JFI’s contractor’s license before the assignment and assumption agreement was executed; (2) disgorgement of all fees paid to JFI and JPM under the contract pursuant to California’s Contractors’ State License Law (“CSLL”); and (3) breach of Jacobs’ parent guarantee agreement. JPM cross-claimed for unpaid sums for services that the licensed JPM had performed pursuant to the assigned contract between August 2009 and November 2009. A jury trial was held on the parties’ CSLL claims in April 2012 and, on May 2, 2012, the jury returned a special verdict in favor of the Jacobs entities, finding, among other things, that JPM was owed approximately $4.7 million in unpaid fees and that JFI was not required to disgorge the approximate $18.3 million that AOC had paid for its work under the contract. AOC subsequently dismissed its cause of action for breach of contract, and JPM dismissed its cross-claims other than those for its unpaid invoices. AOC’s third cause of action for breach of the parent guaranty was resolved by a stipulation, which provided that if AOC obtains a judgment against JFI, the judgment will also be against its parent, Jacobs. The trial court entered judgment in the Jacobs entities’ favor and awarded them approximately $2.4 million in attorney fees. On August 20, 2015, the California Court of Appeal for the First Appellate District reversed the jury’s verdict, holding that JFI had violated the CSLL. The Court of Appeal remanded for an evidentiary hearing to determine whether JFI and JPM had “substantially complied” with, and may therefore avoid disgorgement under, the CSLL. The court also reversed the award of attorney fees. On September 29, 2015, the Jacobs entities filed a petition for review, seeking California Supreme Court review of the Court of Appeal’s decision that JFI and JPM had violated the CSLL. That petition was subsequently denied (Judicial Council of California, Administrative Office of the Courts v. Jacobs Facilities, Inc., et al.). The Jacobs entities have contested, and will continue to vigorously contest, the AOC’s claims and will vigorously litigate JPM’s claim for unpaid sums. The Company does not expect this matter to have a material adverse effect on its consolidated financial statements.

12. Common and Preferred Stock

Jacobs is authorized to issue two classes of capital stock designated “common stock” and “preferred stock” (each has a par value of $1.00 per share). The preferred stock may be issued in one or more series. The number of shares to be included in a series as well as each series’ designation, relative powers, dividend and other preferences, rights and qualifications, redemption provisions, and restrictions are to be fixed by the Board of Directors at the time each series is issued. Except as may be provided by the Board of Directors in a preferred stock designation, or otherwise provided for by statute, the holders of shares of common stock have the exclusive right to vote for the election of Directors and all other matters requiring stockholder action. The holders of shares of common stock are entitled to dividends if and when declared by the Board of Directors from whatever assets are legally available for that purpose.

F-35

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

13. Other Financial Information

Receivables

The following table presents the components of “Receivables” as shown in the accompanying Consolidated Balance Sheets at October 2, 2015, and September 27, 2013 as well as certain other related information (in thousands):

		2015				2014
Amounts billed, net		$	1,213,892			$	1,425,341
Unbilled receivables and other		1,252,509				1,368,482
Retentions receivable		82,342				73,732
Total receivables, net		$	2,548,743			$	2,867,555
Other information about receivables:
Amounts due from the United States federal government included above, net of advanced billings		$	327,157			$	324,928
Claims receivable		$	32,511			$	78,634

Billed receivables, net consist of amounts invoiced to clients in accordance with the terms of the 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.

Property, Equipment, and Improvements, Net

The following table presents the components of our property, equipment, and improvements, net at October 2, 2015, and September 26, 2014 (in thousands):

		2015				2014
Land		$	23,757			$	21,497
Buildings		97,597				128,584
Equipment		592,491				634,415
Leasehold improvements		259,544				287,814
Construction in progress		17,229				20,059
		990,618				1,092,369
Accumulated depreciation and amortization		(609,380		)		(635,572		)
		$	381,238			$	456,797

F-36

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Miscellaneous Noncurrent Assets

The following table presents the components of “Miscellaneous noncurrent assets” shown in the accompanying Consolidated Balance Sheets at October 2, 2015, and September 26, 2014 (in thousands):

		2015				2014
Deferred income taxes		$	213,767			$	170,649
Cash surrender value of life insurance policies		115,440				116,686
Investments		222,941				226,628
Notes receivable		13,197				8,007
Reimbursable pension costs (a)		119,548				77,710
Other		34,622				38,570
Total		$	719,515			$	638,250

(a)	Consists primarily of costs incurred relating to a defined benefit pension plan covering employees providing services on a contract with, and for the benefit of, the U.S. federal government pursuant to which such costs are fully reimbursable.

Accrued Liabilities

The following table presents the components of “Accrued liabilities” shown in the accompanying Consolidated Balance Sheets at October 2, 2015 and September 26, 2014 (in thousands):

		2015				2014
Accrued payroll and related liabilities		$	623,297			$	783,549
Project-related accruals		130,401				140,938
Non project-related accruals		102,324				76,588
Insurance liabilities		59,081				52,826
Sales and other similar taxes		53,476				52,373
Deferred rent		93,040				96,129
Other		29,366				77,153
Total		$	1,090,985			$	1,279,556

Other Deferred Liabilities

The following table presents the components of “Other deferred liabilities” shown in the accompanying Consolidated Balance Sheets at October 2, 2015 and September 26, 2014 (in thousands):

		2015				2014
Liabilities relating to defined benefit pension and early retirement plans		$	416,725			$	407,263
Liabilities relating to nonqualified deferred compensation arrangements		129,982				114,325
Deferred income taxes		191,093				195,098
Miscellaneous		126,068				117,392
Total		$	863,868			$	834,078

F-37

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

Total Accumulated Other Comprehensive Loss

The following table presents the components of “Accumulated other comprehensive loss” shown in the accompanying Consolidated Balance Sheets at October 2, 2015, and September 26, 2014 (in thousands):

		2015				2014
Foreign currency translation adjustments		$	(199,087	)		$	(62,919	)
Adjustments relating to defined benefit pension plans		(266,440		)		(299,210		)
Other		763				(1,420		)
Total		$	(464,764	)		$	(363,549	)

Supplemental Cash Flow Information

During fiscal 2015 and fiscal 2014, the Company acquired businesses for cash and stock of $8.10 million and $1.4 billion, respectively. The following table presents the non-cash adjustments relating to these acquisitions made in preparing the accompanying Consolidated Statements of Cash Flows (in thousands):

		2015				2014
Working capital		$	(8,749	)		$	48,327
Property and equipment		71				59,216
Noncurrent assets		(4,334		)		262,450
Deferred liabilities		(1,316		)		(7,895		)
Non-controlling interests		—				16,572
Foreign currency translation		—				1,768
Goodwill		22,429				1,005,923

14. Segment Information

We provide a broad range of technical, professional, and construction services including engineering, design, and architectural services; construction and construction management services; operations and maintenance services; and process, scientific, and systems consulting services. We provide our services through offices and subsidiaries located primarily in North America, South America, Europe, the Middle East, India, Australia, Africa, and Asia. We provide our services under cost-reimbursable and fixed-price contracts.

All of our operations share similar economic characteristics. For example, all of our operations are highly influenced by the general availability of qualified engineers and other technical professional staff. They also provide similar services as well as share similar processes for delivering our services. There is also a high degree of similarity of the workforces employed among the various categories of services we provide. For example, engineering and design services (i.e., services provided by persons who are degreed, and in certain circumstances licensed, professionals such as engineers, architects, scientists, and economists) exist in all four service categories. In addition, there is a high degree of similarity among a significant component of the workforces we employ to perform construction and operations and maintenance projects. In providing construction and operations and maintenance services, we employ a large number of skilled craft labor personnel. These include welders, pipe fitters, electricians, crane operators, and other personnel who work on very large capital projects (in the case of projects classified within the construction services category) or on smaller capital projects (in the case of maintenance projects classified within the operations and maintenance services category). In addition, the use of technology is highly similar and consistent throughout our organization, as is our client base (with the exception of our operations outside the U.S., which perform very little work for the U.S. federal government), and our project delivery and safety protocols and programs. Furthermore, the types of information and internal reports used by the Company’s chief operating decision maker and other members of management to monitor performance, evaluate results of operations, allocate resources, and otherwise manage the business support a single reportable segment. Accordingly, based on these operational similarities and the way management monitors the Company’s results of operations, we have concluded that our operations may be aggregated into one reportable segment for purposes of this disclosure.

F-38

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

The following table presents certain financial information by geographic area for fiscal 2015, 2014, and 2013 (in thousands):

		2015				2014				2013
Revenues:
United States		$	7,154,433			$	7,078,366			$	6,993,594
Europe		2,074,837				2,402,399				2,148,504
Canada		1,065,651				1,344,632				1,652,386
Asia		304,393				299,086				204,203
India		163,871				148,453				158,908
Australia and New Zealand		611,271				709,379				141,507
South America and Mexico		143,014				271,213				241,590
Middle East and Africa		597,362				441,629				277,684
Total		$	12,114,832			$	12,695,157			$	11,818,376
Long-Lived Assets:
United States		$	208,155			$	240,501			$	230,281
Europe		55,713				58,562				47,128
Canada		36,647				51,622				61,122
Asia		3,859				4,063				4,272
India		16,264				17,960				15,049
Australia		24,460				49,436				8,329
South America and Mexico		9,127				11,084				6,159
Middle East and Africa		27,013				23,569				6,956
Total		$	381,238			$	456,797			$	379,296

Revenues were earned from unaffiliated clients located primarily within the various and respective geographic areas shown. Long-lived assets consist of property and equipment, net of accumulated depreciation and amortization.

The following table presents the revenues earned directly or indirectly from the U.S. federal government and its agencies, expressed as a percentage of total revenues, for fiscal 2015, 2014, and 2013:

2015			2014			2013
21.7	%		17.8	%		19.9	%

During the first quarter of fiscal 2016, we announced a reorganization of our operations around four global lines of business. This reorganization is intended to better serve our global clients, leverage our workforce, help streamline operations, and provide enhanced growth opportunities. The four global lines of business are: Petroleum & Chemicals, Buildings & Infrastructure, Aerospace & Technology, and Industrial. We are in the process of modifying our systems and work processes to report the results of these business units accurately and timely. We are also developing processes for accurately eliminating inter-unit revenue and profit. We expect to complete our system and other process changes so that we may accurately report operating results by line of business to the Company's President & CEO no later than the second quarter of fiscal 2016.

F-39

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

15. Selected Quarterly Information — Unaudited

The following table presents selected quarterly financial information for each of the last three fiscal years. Amounts are presented in thousands, except for per share amounts:

		First Quarter				Second Quarter				Third Quarter				Fourth Quarter						Fiscal Year
2015
Revenues		$	3,187,005			$	2,903,332			$	2,907,541			$	3,116,954					$	12,114,832
Operating profit (a)		158,223				133,045				100,434				53,825						445,527
Earnings before taxes		154,695				128,962				97,188				49,292						430,137
Net earnings of the Group		106,195				88,110				97,308				37,269						328,882
Net earnings attributable to Jacobs		100,079				81,967			(b)	91,062			(b)	29,863				(b)		302,971
Earnings per share:
Basic		0.78				0.65			(b)	0.74			(b)	0.25				(b)		2.42
Diluted		0.77				0.64			(b)	0.73			(b)	0.24				(b)		2.40
2014
Revenues		$	3,068,891			$	3,176,033			$	3,231,791			$	3,218,442					$	12,695,157
Operating profit (a)		145,047				122,434				123,937				136,650						528,068
Earnings before taxes		146,921				132,394				118,046				144,805						542,166
Net earnings of the Group		98,949				90,800				71,309			(c)	91,054				(c)		352,112
Net earnings attributable to Jacobs		93,732				83,460			(d)	64,842				86,074						328,108
Earnings per share:
Basic		0.72				0.64			(d)	0.50			(c)	0.66				(c)		2.51
Diluted		0.71				0.63			(d)	0.49			(c)	0.65				(c)		2.48
2013
Revenues		$	2,759,641			$	2,835,084			$	3,080,995			$	3,142,656					$	11,818,376
Operating profit (a)		160,269				165,203				168,359				175,148						668,979
Earnings before taxes		156,311				161,908				168,423				174,906						661,548
Net earnings of the Group		104,523				107,089				112,089				116,481						440,182
Net earnings attributable to Jacobs		99,010				104,401				108,871				110,811						423,093
Earnings per share:
Basic		0.77				0.81				0.84				0.85						3.27
Diluted		0.76				0.80				0.83				0.84						3.23

(a)	Operating profit represents revenues less (i) direct costs of contracts, and (ii) selling, general and administrative expenses.

(b)	Includes costs of $9.6 million, or $0.08 per diluted share, in the second quarter of fiscal 2015, $30.1 million or $0.24 per diluted share in the third quarter of fiscal 2015, and $68.2 million, or $0.56 per diluted share, in the fourth quarter of fiscal 2015, related to the 2015 Restructuring.

(c)	Includes costs of $47.0 million, or $0.35 per diluted share, in the third quarter of fiscal 2014, and $30.4 million, or $0.23 per diluted share, in the fourth quarter of fiscal 2014, related to the 2014 Restructuring.

(d)	Includes $6.4 million, or $0.05 per diluted share, increase to net earnings related to a gain on the sale of certain intellectual property in the second quarter of fiscal 2014.

F-40

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

16.	Definitions

The following terms used in the accompanying Consolidated Financial Statements and these Notes to Consolidated Financial Statements have the meanings set forth below:

“1989 ESPP” means the Jacobs Engineering Group Inc. 1989 Employee Stock Purchase Plan, as amended. The 1989 ESPP is a shareholder-approved, broad-based, employee stock purchase plan qualified under Section 423 of the U.S. IRC.

“1999 ODSP" means the Jacobs Engineering Group Inc. 1999 Outside Director Stock Plan, as amended. The 1999 ODSP is a shareholder-approved, equity-based compensation plan covering Jacobs' non-management directors.

“1999 SIP” means the Jacobs Engineering Group Inc. Stock Incentive Plan, as amended. The 1999 SIP is a shareholder-approved, equity-based compensation plan covering the Company's officers and key employees.

The "2015 Restructuring" refers to a series of initiatives intended to improve operational efficiency, reduce costs, and better position the Company to drive growth of the business in the future. Actions included involuntary terminations, the abandonment of certain leased offices, and the co-location of employees. Included in the Company's consolidated results of operations for fiscal 2015 are pre-tax costs of $107.9 million relating to the 2015 Restructuring. These costs are primarily included in selling, general, and administrative expense in the accompanying Consolidated Statements of Earnings.

The "2014 Restructuring" refers to a series of initiatives intended to improve operational efficiency, reduce costs, accelerate the integration of SKM, and better position the Company to drive growth of the business in the future. Actions included involuntary terminations, the abandonment of certain leased offices, and the co-location of employees. Included in the Company's consolidated results of operations for fiscal 2014 are pre-tax costs of $93.3 million relating to the 2014 Restructuring. These costs are included in selling, general, and administrative expense in the accompanying Consolidated Statements of Earnings.

“ASC” refers to the Accounting Standards Codification as maintained by the FASB. The ASC is the primary source of U.S. GAAP to be applied by the Company and all other nongovernmental entities. The ASC organizes and presents hundreds of previously separate pieces of authoritative accounting guidance into a single on-line research database. The accounting principles promulgated by the ASC are organized therein by broad topics, and is updated by the FASB through the issuances of ASUs.

“ASU” means Accounting Standards Updates, the primary means by which the ASC is updated by the FASB.

“Company” (including “we”, “us” or “our”) means Jacobs Engineering Group Inc. and its consolidated subsidiaries and affiliates.

“Consolidated EBITDA" generally means consolidated net earnings attributable to Jacobs, plus consolidated (i) interest expense, (ii) tax expense, and (iii) depreciation and amortization expense (including amortization expense relating to intangible assets).

"Consolidated Funded Indebtedness" generally means the sum of (i) the balances outstanding under all loan, credit, and similar agreements for borrowed money (including purchase money indebtedness), (ii) all amounts representing direct obligations arising under letters of credit, (iii) indebtedness in respect of capital leases and similar financing arrangements, and (iv) the value of all guarantees issued with respect to the types of indebtedness described in (i) through (iii).

"Consolidated Leverage Ratio" means, as of any date of determination, the ratio of (i) the Company's Consolidated Funded Indebtedness as of such date to (ii) the Company's Consolidated EBITDA for the immediately preceding four consecutive fiscal quarters.

“EPS” means earnings-per-share. “Basic EPS” is computed by dividing the consolidated net earnings attributable to Jacobs by the weighted average number of shares of common stock outstanding during the period. “Diluted EPS” is computed in a manner similar to the computation of Basic EPS, but gives effect to all dilutive securities that were outstanding during the period. Our dilutive securities consist of nonqualified stock options and restricted stock (including restricted stock units)

F-41

JACOBS ENGINEERING GROUP INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)

“Fair Value” means 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 (i.e., the “measurement date”). When determining fair value, U.S. GAAP requires that we consider the principal or most advantageous market in which we would transact any sale or purchase. U.S. GAAP also requires that the inputs (factors) we use (consider) to determine fair value be considered in the following order of priority:

•	Level 1 inputs are quoted prices in active markets for identical assets or liabilities;

•

Level 2 inputs are 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; and

•	Level 3 inputs are unobservable inputs to the valuation methodology that are significant to the fair value measurement.

“FASB” means the Financial Accounting Standards Board. The FASB is the designated organization within the U.S. for establishing standards of financial accounting that govern the preparation of financial reports by nongovernmental entities.

“GESPP” means the Jacobs Engineering Group Inc. Global Employee Stock Purchase Plan, as amended. The GESPP is a shareholder-approved, broad-based, employee stock purchase plan covering employees of certain of Jacobs' non-U.S. subsidiaries.

“Group” refers to the combined economic interests and activities of Jacobs and the persons and entities holding noncontrolling interests in the subsidiaries and affiliates that are consolidated into the accompanying Consolidated Financial Statements.

“Jacobs” means Jacobs Engineering Group Inc.

“U.S. GAAP” means those accounting principles and practices generally accepted in the United States.

“U.S. IRC” means the U.S. Internal Revenue Code of 1986, as amended.

“VIE” means a “Variable Interest Entity” 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.

F-42

Report of Ernst & Young LLP

Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Jacobs Engineering Group Inc.

We have audited the accompanying consolidated balance sheets of Jacobs Engineering Group Inc. and subsidiaries as of October 2, 2015 and September 26, 2014, and the related consolidated statements of earnings, comprehensive income, stockholders' equity, and cash flows for each of the three fiscal years in the period ended October 2, 2015. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Jacobs Engineering Group Inc. and subsidiaries at October 2, 2015 and September 26, 2014, and the consolidated results of their operations and their cash flows for each of the three fiscal years in the period ended October 2, 2015, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Jacobs Engineering Group Inc. and subsidiaries’ internal control over financial reporting as of October 2, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated November 23, 2015 expressed an unqualified opinion thereon.

/S/ Ernst & Young LLP

Los Angeles, California

November 23, 2015

F-43

Report of Ernst & Young LLP

Independent Registered Public Accounting Firm

The Board of Directors and Stockholders

Jacobs Engineering Group Inc.

We have audited Jacobs Engineering Group Inc. and subsidiaries’ internal control over financial reporting as of October 2, 2015, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). Jacobs Engineering Group Inc. and subsidiaries’ management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed 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. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, Jacobs Engineering Group Inc. and subsidiaries maintained, in all material respects, effective internal control over financial reporting as of October 2, 2015, based on the COSO criteria.

We also 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 October 2, 2015 and September 26, 2014 and the related consolidated statements of earnings, comprehensive income, stockholders’ equity, and cash flows for each of the three fiscal years in the period ended October 2, 2015 of Jacobs Engineering Group Inc. and subsidiaries and our report dated November 23, 2015 expressed an unqualified opinion thereon.

/S/ Ernst & Young LLP

Los Angeles, California

November 23, 2015

F-44