Jacobs Engineering to Book Pre-Tax $94 Million Charge in Q3 (JEC)

Jacobs Engineering Group Inc. JEC announced today that its subsidiary, Jacobs France SAS, received an unfavorable judgment from an Administrative Tribunal in Strasbourg, France relating to a waste incineration plant project in France. Jacobs believes that the judgment of the Tribunal is not supported by the facts or by applicable law and will consider all possible avenues including appeal. As a result of the judgment, Jacobs will record a pre-tax charge to earnings of approximately $94 million in the quarter ending July 2, 2010. The pre-tax charge includes future cash payments of approximately $62 million. The dispute involves a project to design and build a waste incineration plant in Sausheim, France by a consortium led by Serete for the SIVOM de Mulhousienne. The contract was entered into in 1996, prior to the acquisition of Serete by Jacobs in 1997. Jacobs filed suit in 2002 seeking approximately $49 million in damages to recover its contract balance and additional project costs that it had incurred. The SIVOM counterclaimed for project completion costs, increased operating costs and costs relating to emissions problems. Jacobs is one of the world's largest and most diverse providers of technical, professional, and construction services. SOURCE: Jacobs Engineering Group Inc.