Good morning. My name is Kelly and I will be your conference operator for today. At this time I would like to welcome everyone to the Jacob's second quarter 2010 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speakers remarks, there will be a question and answer session. (Operator Instructions) Ms. Bruner, you may begin your conference.

The Company requests that we point out that any statements that the company makes today that are not based on historical fact are forward-looking statements. Although such statements are based on management's current estimates and expectations, and currently available competitive financial and economic data, forward-looking statements are inherently uncertain and involve risks and uncertainties that could cause actual results of the company to differ materially from what may be inferred from the forward-looking statements. For a description of some of the factors which may occur, that could cause or contribute to such differences, the company requests that you read its most recent annual report on form 10-K for the period entered October 2, 2009, including item 1A – Risk Factors, item 3 – Legal proceedings and item 7 – Management's Discussion and Analysis of Financial Conditions and Results of Operations contained therein in the most recent Form 10-Q for the period ending January 1st 2010 for a description of our business, legal proceedings and other information that describes the factors that could cause actual results to differ from such forward-looking statements. The company undertakes no obligation to release publicly any revisions or updates to any forward-looking statements, whether as a result of new information, future events, or otherwise. Now, John Prosser, CFO of Jacobs will discuss the financial results.

Thank you, Patty, and good morning. I will briefly go over the financial highlights for the quarter and then I'll turn it over to Craig Martin, our CEO to go through the overview of the business and what we are seeing out there in the marketplace. We go to slide 4, the financial highlights. As was covered in our press release, the diluted EPS for the quarter was $0.62, net earnings of $77.5 million and for the year-to-date, that brings us to $1.20 and net earnings of $149.9 million. Our backlog was at $14.7 billion, down a couple of hundred million sequentially from last quarter and we continue to have a very strong sheet. Our Q will be filed by the end of the week. So you'll be able to see the details of the financial statements at that point. The net cash at the end of the quarter was $743 million. This compares to $941 million last quarter and the decrease really is a result of a couple of acquisitions that we've made since the beginning of the year. We have revised our guidance. Our fiscal year 10 guidance is now at $2.15 to $2.65. So it's up slightly from the previous range. Moving on to slide 5 a track of our earnings history. Obviously we've been disappointed the last two [ph] years with the downturn. We have still shown, as you see the bars at the bottom of the graph that even with this downturn we still are averaging well above the 15% compounded growth rates that we talk about as our long term target. Now if you look through the end this last quarter, our last 10 year growth rate is at 18%. Looking at our backlog, which is slide 6, again the backlog came in at $14.7 billion for the total backlog but which is down slightly from last quarter but the professional services backlog at $8.3 billion is actually up about $100 million from last quarter when we had a backlog of $8.2 billion. So we are seeing a pickup in good activity on the professional services as we still see some weakness as we work through some of the – particularly one large project that we have in backlog on the field services side. We have the one acquisition this quarter and it actually added less than $100 million in backlog because it was relatively small in all of professional services. So with that I will turn it over to Craig to go through the overview of the quarter.

Thank you, John, and good morning everyone. I'm on slide 7 now. I want to take just a minute or two to talk about how we're going to continue to grow at that 15% compound rate that John mentioned. We've got five bullets here, the first two bullets remaining committed to our business model and our focus on market diversity. I'll talk about it in a little bit more detail later. So for now, we'll move on to the next three bullets and let me talk first about growth through our multi domestic strategy. As we've told you many times, we believe that it is important for us to be local to our customers and we believe there's significant opportunity to drive growth through continuing geographic expansion. We're particularly excited about opportunities to grow in the Middle East and in China. Particularly the Middle East chose opportunities in both the public sector and the private sector. I ran across the data point just the other day about Middle East CapEx in the process, the private sector side of the business and there is something like $178 billion to be spent in the next five years just in that area alone. So we think our expansion in the Middle East area is important to us. We're making good progress there and we're going to continue to keep pressure on the system to expand our Middle East presence and grow domestically. Remember that we'd like to be local because that's what drives our base load work and that base load is very important. I'll talk about that more in a minute. Our next bullet here is drive down costs continuously. We have had another good quarter in terms of cost control, from the perspective, maybe the way we look at it, you…

(Operator Instructions) Your first question comes from the line of Alex Rygiel with FBR Capital Markets. Alex Rygiel – FBR Capital Markets: Thank you, gentlemen.

Good morning, Alex. Alex Rygiel – FBR Capital Markets: Craig, could you comment a little bit more on pricing in the marketplace and margins that are embedded in some of the new order flow that you saw in the most recent quarter and possibly how that compares to a year ago or even how it compares to the prior quarter?

Sure. The pricing pressure continues in some markets. Yet this isn't true across all of our markets today. But if you look at, particularly the heavy process markets, so refining, upstream oil and gas, chemicals, there is still a significant amount of pricing pressure out there. It probably isn't worse than it was last quarter but it isn't better either. So as we think about margin pressure going forward, we see it continuing. But at least at the moment we don't see any further deterioration of where margins might go. So what that means is what's coming in the backlog looks an awful lot like what's in backlog. Remember that I told you last quarter that for some of our big alliance agreements in that sector of our market our customers are quick to get the pricing concessions that they want and they get them effective immediately. So backlog gets adjusted for pricing concessions, more or less when it happens. So as I say, I think that the margins and backlog in the heavy process business will continue to be under pressure but the pressures are probably not significantly different than they have been. That's not to say we won't see some further deterioration overall of pricing but I'm not expecting it to be dramatic. In other sectors of the market we're not seeing significant pricing pressure at all, either because of the nature of the business model or the weakness of the competitive slate but heavy process is the area of focus which still remains about half our business. Alex Rygiel – FBR Capital Markets: And one follow-up. You mentioned you're seeing some more opportunities in the U.K. environmental marketplace. Could you comment on the margin opportunity of that business relative to the U.S. environmental work performed currently?

We think that the margin opportunities there are going to be about the same, that those businesses and those projects will earn about the same sorts of margins as what we earn on similar work in the U.S. Does that answer your question? Alex Rygiel – FBR Capital Markets: Yes, it does. Thank you.

Okay.

Your next question comes from the line of Michael Dudas with Jefferies. Michael Dudas – Jefferies: Good morning gentlemen, Patty.

Hey Michael, how are you doing? Michael Dudas – Jefferies: Great, thanks. Maybe this one is for Noel. How would you characterize where we are in the cycle today relative to a like period throughout your career?

Well, the way it feels, Mike, is that generally we bottom and I think a lot will depend on the shape of the curve but it does appear, the bottom is past or we're in it right now. Prospects are tipping up. It does not feel a lot different than other periods, although it does appear to me, if you go back to the real comparative period which was in the middle 80's it came out of that awfully slowly. Our company did better at the time because we were smaller. But it came out awfully slow. It feels to me like it's going to come up better this time. I think it's going to be better for Jacob because we're just a lot more diversified. So if you go back into the middle 80's we had a very narrow market. So in my mind, it feels like it's going to come out but this is not a V shaped recovery like we had – the one in the 90's, in our early 90's, 93 and the one in 2000. Those were almost V shaped recoveries. This one is going to come out slow growth. Michael Dudas – Jefferies: When you come out of this recovery, do you appreciate your business mix of public versus private sector funding? Do you anticipate given where spending cycles may go out of this recovery that you'd want to lean more towards one area or the other and I mentioned that because you talk about water and waste water as very attractive A&D, but also on the power side and maybe if you could just follow-up on power, is the model changed enough for you to get very significantly into that market?

In terms of the balance between public and private and obviously we want to continue to sort of round out markets. So things like water and waste water are very attractive because we have a relatively small presence, good position in the U.K., getting started on our position in the U.S. and the demographics of that market, particularly the pent up capital demand suggest that the business will be good and at some point it will be great. So we're kind of looking at each market in terms of what we think the short term and long term opportunities are and where would we like to be positioned and we're also then of course looking at how those diversified and obviously the water and waste water market responds to little different CapEx cycle and taxation cycle than the transportation does for example. Those things are all considerations in how we think about diversifying our markets. I mentioned that we're keeping an eye on both power and mining and minerals, two markets that we're obviously not in. If we go into those markets it will be in the segment and the sector that matches our business model. So I'm not suggesting for a minute we're going to change we approach business or that we're going to jump out and become a leader in the lump sum turnkey power plant design and construction business. That's not Jacob's way. But I do think there are sub sets of that marketplace and customers within the marketplace that will enable our model and if the right opportunities came along on the acquisition side, we would do that. Certainly we're going to continue to work with those customers to try to bootstrap our growth in that market. Michael Dudas – Jefferies: Thank you. And my final, just follow-up is when you talk about acquisitions and the ones you've made over the last six months and in the marketplace, can you talk about where expectations are relative to multiples expected and visibility on getting transactions completed. Thank you.

Sure. In terms of multiples, the multiples are down a bit from their peak. Depending on the kind of services that you're buying and the strength of the particular company, you're probably seeing multiples on the services side in the range of 7 to 9 and on the construction side in a range of 5 to 7. So those are pretty good multiples from our perspective today. We've got a pretty good pipeline of deals and we're expecting that could result and I say could result advisedly in a nice, steady flow of actual transactions. But of course, these things are subject to lots of ins and outs and back and forth and these deals get done when they're ready to be done and not before. So it isn't something you can rely on with certainty. In fact we feel good about what's out there in a way of potential transactions and our ability to close them but it's a person to person kind of an issue when you get right down to it. Michael Dudas – Jefferies: Thank you, Craig and Noel.

Your next question comes from the line of Andrew Kaplowitz with Barclays Capital. Andrew Kaplowitz – Barclays Capital: Good morning guys.

Good morning. Andrew Kaplowitz – Barclays Capital: Craig, could you talk about the level of feed work that you're seeing. As you've sensed a little bit of recovery in your end markets, have you also seen an increase in feed activity and how do you think that bode for the larger projects? When do you think they can start to come back?

We are seeing a fair amount of feed activity and that's probably a bigger piece of the business today than maybe it's ever been because a lot of other Middle East activity for us is feed work and I think it actually is indicative of why we think the market may be firming up and why things may be getting better. There are a number of projects that are in the feed stage today or are just being awarded feeds that we have every reason to think will turn into major projects and some of those represent pretty significant additions to backlog when they do. We're being pretty careful about putting those big projects into backlog as we sit here today because the customers are still a little schizophrenic about all of this and so some days their projects are on, some days they aren't. Some days they say why don't we just push this off for about a year and see what happens. I was talking to one of our competitors on the phone yesterday and that particular competitor was explaining to me that they had did a couple of jobs now and these are lump sum turnkey jobs for the third time and they couldn't seem to get the project actually get released and their view was that the procurement department was simply shopping and shopping and shopping. It was going to keep bidding the job till they got the price they like, which I asked him, is it getting cheaper with each round of bids and the answer was, yes it is. So maybe that procurement department knows what they're doing. But that's kind of indicative of the sort of the unpredictability, the market right now. It is still a little uncertain how things are going to unfold and it goes in part to Noel's comment about we don't expect a V shaped recovery here. It's going to one of those kinds of grueling climbs off the bottom as opposed to just a great leap. Does that answer your question? Andrew Kaplowitz – Barclays Capital: It does but Craig, would you say that the customer confidence materially improved even throughout the quarter, let alone versus three months ago or six months ago?

Oh gosh. I don't have enough consistent customer contact with the same customer; say if any one customer's outlook improved. I would tell you that when I talked to the customers, for the most part their attitude seems to be like the one I described for us which is things are looking better. We can see that things are improving. It feels better. It looks better. The data is a little better than then they follow that with a but we're going to be careful for a while yet and so I think what you've got is the indicators are there but the confidence isn't there yet. And I think confidence is improving. It's just improving slowly. Andrew Kaplowitz – Barclays Capital: Understand. If I could ask you a follow-up actually related to your comment about cost? You mentioned that we might not like as much as you cited that you're keeping costs down. So obviously when we look sequentially, if you exclude the charge that you had last quarter, the SG&A is up on an absolute basis pretty significantly. The question that I have is how much of that is due to the acquisitions that you made over the last couple of quarters. How would we be able to see that you're managing cost?

Oh and that's a problem because I don't know a good way of doing that for your benefit that wouldn't get you too far into the numbers and our competition with you. But in fact the addition of those big chunks of overhead is a big factor in the numbers and as I think I've told you guys before, when we add business, particularly in the public side of the world, their G&A costs relative to their revenues are quite high. So those are significant adds to our overall business as we go forward. There is also some effects of things like the holidays which impact our G&A's positively and so we've had a quarter now with very little holiday time in it. So that's another factor that you have to look at when you're trying to see how well we're actually controlling the real cost of the business. So there's a whole bunch of factors that make it hard for you to see that and hard for me to demonstrate it to you other than you might have to just take my word for it. Andrew Kaplowitz – Barclays Capital: That's fine but Craig, is it realistic to say that if you're doing acquisitions today and we looked at the next few quarters, we should see on an absolute basis the SG&A revel off or even go down if you're doing what you usually do.

Yes, I would say that our, as we said last quarter has – still that we're putting pressure in keeping control on the costs. As we start seeing an upturn which we're still looking forward to is there will be a lagging effect between when our business picks up and when the G&A starts picking up. So we would expect to see the G&A's if anything to be flat or down when you're looking at it sequentially as we go through the year. Andrew Kaplowitz – Barclays Capital: Thank you, John. Thanks guys.

The comparison of our first and second quarter is impacted dramatically by the holidays and well we're in the Charismas season because you get a lot of people that take vacation and such. In Europe and such there is a lot of shut down in sites like that because people just take that time off. Andrew Kaplowitz – Barclays Capital: I understand, okay.

Your next question comes from the line of Andrew Obin with Merrill Lynch. Andrew Obin – Merrill Lynch: Yes, good morning.

Hi, Andrew. Andrew Obin – Merrill Lynch: Just to think about your downstream backlog and revenue line, how should we think about backlog progressing through the year ex-Motiva, when do you guys think it bottoms and how should we think about revenues on downstream and that's part one of the question for now?

Well, I think – let's kind of break it into parts and try to talk it through. The pro service revenue we think will continue to grow but not by leaps and bounds. Now remember, we have always said that our backlog is lumpy. Projects come in the backlog in chunks sometimes and so quarter-over-quarter predictions probably aren't all that valid but I think the general trend, if you think about it over several quarters is we think our closed service backlog is going to grow. On the field service side of backlog however you do have the Motiva effect. Motiva is about half done as we sit here today. So there is a fairly significant amount of construction work that will pass through our books over the next four or five quarters that represents a significant headwind on the technical professional services backlog side. So there I think it will be a challenge to replace Motiva. We don't really expect to place Motiva into the backlog long term, at least not in a form like Motiva where you expect to replace it in more of our base load business. But I think that headwind will exist for a few more quarters and that will impact both technical professional services and backlog overall. That answers your question, Andrew? Andrew Obin – Merrill Lynch: Yes, though is it fair to say that ex-Motiva we can expect downstream backlog North America to bottom sometime over the next couple of quarters?

Yes, I think that's fair. Andrew Obin – Merrill Lynch: And the other thing, can you talk about, just sort of more about upstream opportunities and I guess I understand if you are going to get sort of maintenance CapEx from your downstream customers but how are your customers thinking about giving you more sort of upstream work for example. Should we see more the accelerated contracts? I'm just using it as an example you've disclosed that where you're customers are giving you more upstream work and is it easy to do from a technical standpoint and there is a big difference in profitability?

We think we'll be able to expand our share of the sort of maintenance small cap business on the gas side pretty significantly over the next few years, maybe not quarter-over-quarter but certainly year-over-year. It is a good business with margins that are frankly slightly better than what we see in refinery maintenance because there are fewer competitors and its complex in a different way because of the geographic distribution of the work. So we continue to believe that's a good growth area for us and that it will be a good contributor to our bottom line. Just to make sure it's clear, when I say its better margins than refineries but neither are numbers that would make investment bankers proud. They're both small but one is slightly bigger than the other. Andrew Obin – Merrill Lynch: And then final question, what about cash used in the quarter or what drove this?

John?

Cash issued?

Cash used.

Cash used? Primarily the cash is down because of the acquisitions. One of the acquisitions was made in the first quarter but just because of year end shuffling and some of our customers cash and such, as they were paying the bills or we were paying our bills, it didn't show up as much in the first quarter as it did right after well into the second quarter. So you see our cash year-to-date is down a couple of hundred million dollars and we saw more than that in the acquisitions. We will continue to – as Craig as said, we still see a number of opportunities out there for acquisitions and so the primary use of our cash will be and continue to be toward acquisitions and growth of the business. Andrew Obin – Merrill Lynch: Okay, let me fall off with you. Thank you very much.

Your next question comes from the line of Scott Levine with JPMorgan. Scott Levine – JPMorgan: Good morning guys.

Good morning. Scott Levine – JPMorgan: The end market mix gave a very robust run down of the markets but if we just focus on the change in tone now versus call it six months ago when you initially provided fiscal 2010 guidance, could you isolate the areas where there has been the most significant change, either positive or disappointment versus your expectations in November, for which individual end markets would you say?

Let's see. That's a good question. I would tell you that when we started the year we were pretty pessimistic about the world in general and so our expectations were – I would characterize it as low for a number of markets. Places where I think we have been pleasantly surprised, pulp and paper as a whole and food and consumer products, chemicals, another area we've been nicely surprised, buildings has turned out to be a nice positive, the Obama effect at least to now in the research and development test engineering business has a plus for us. So, those markets are probably where the positives have come in, infrastructure and refining kind of have turned out likely expected maybe not quite as bad but certainly not in order of magnitude better. Oil and gas has been a little weaker than we thought it might be on the – that was market where we weren't sure where it would go but our positive side the glass half full view was probably better than what we are actually seeing, glass half empty view is probably worst than what we are actually seeing. So, I guess that puts it kind of in the middle. Pharma is about what we expected, so that hasn't changed very much I think that covered all the markets. Scott Levine – JPMorgan: You mentioned that chemicals was maybe a pleasant surprise versus six months ago and could you talk about in a little more detail maybe we saw good numbers of the DuPont, saw press release contract with DuPont this morning, maybe a little bit of thought about what's driving the difference versus expectations in that market specifically?

I put it down to sort of under spending for a very long time. When I look at the chemicals business I would have told you five years ago and probably did tell you on this call that we expect our chemicals business to grow a GDP and whether you look at U.S. GDP or global GDP. You got a growth spend okay; at least historically up I am looking at that five year kind of timeframe. But the spending didn't match that growth and I think we have finally reached that point where from a CapEx point of view the business growth driven by GDP has outstripped the ability to hold back capital and we are starting to see the capital come forward. Part of that is obviously driven by the sort of the Asian Tigers consumption issues but I think it's as much as anything it's just sort of pent-up investment and need for capacity because again remember most of our business is not giant brand new chemical plants in faraway places. It's helping our customers with their existing facilities in their sort of established venues, but the DuPont announcement yesterday was an example there. Scott Levine – JPMorgan: Got it. Thank you. One last if I may, would you characterize the UK government elections as a swing factor in your outlook for the infrastructure market or the environment clean up market or is that likely not much of an influence in the outlook in your view?

Well I think it's likely we have more impact in the infrastructure market than on the environment clean up market. I really don't think it will affect the environment clean up side very significantly, but I do think that, looking forward the infrastructure market funding wise could be challenged and it will depend a lot on government's commitment in terms of how it goes forward. I think that's one of the uncertainties that that's out there that's I don't know how to handicap it frankly. So, simply we have to watch and try to understand as it unfolds.

And I think probably more of an impact on 11 and beyond than on 10 or so.

Yeah, that's for sure. Scott Levine – JPMorgan: Understood. Thank you, either way.

Tahira Afzal – KeyBanc:

Good morning. Tahira Afzal – KeyBanc: Congratulations on a good quarter.

Thank you. Tahira Afzal – KeyBanc: Lot of the questions I have been asked, one of the questions I still had was as you start seeing revenue on some of the shortest cycle base load activity coming back. How does that offset pricing in terms of your operating margins?

Tahira Afzal – KeyBanc: Got it, okay. Second question was you talked about gas storage and gas maintenance business. What is making you so positive and excited about this? Is it the shale plays and is it something overseas as well. Would love to hear a bit more about that?

Okay, it's a combination of a number of things. The gas is an energy source has been under utilized for a long time now and so what we are starting to see is a realization that there is lots of gas in the world and that is a useful thing to do to get it and either make chemicals out of it or use it for energy purposes. So, the things that are exciting us is that increased focus on gas whether its tight gas, shale gas those kinds of things and the U.S. or whether its issues like making sure that their security as a gas supply which is driving a lot of gas storage work in Europe for example. So, it's a kind of a mixed spectrum and then of course when you go to the Middle East where gas has been a waste product either been flared or pushed back down hole. It's a tremendous source of potential resource for chemical manufacture and I think we are going to see as world's power generation and I think we are going to see our Middle East customers monetize their gas assets to a much greater degree than they have in the past and so all that's driving a boom in the gas side of the upstream business. We are just well positioned for that relative to a boom in the oil production side. Tahira Afzal – KeyBanc: Okay. Thank you very much, gentlemen. That's all I had.

All right. Thank you.

Your next question comes from the line of Richard Paget with Morgan Joseph. Richard Paget – Morgan Joseph: Hey everyone.

Hey, how are you doing? Richard Paget – Morgan Joseph: Just getting back to the cost question, that previously asked, how much more could you possibly can squeeze out of your structure or at this point it's all just keeping a lid of SG&A and variable cost. I mean are there more offices to close or are you pretty much gone through that process and there might not be much more to kind squeeze out of the model.

We that there are opportunities continue to drive our cost down through for example there is some additional office closures is one area. There is some ways to be a little smarter about what we spend, it will take a little time to implement, there is some restructuring that results that has to be done and managed particularly in Europe has to be managed intelligently and carefully and takes a little time to do. If you don't want to trigger all kinds of bad things and so we believe that we can continue to push in relative terms push our dollars down even further from where they are today. At some point we will probably get more to worry, it's a matter of maintenance and that will be a little bit of a function of how the markets behave because at some point if the markets aren't back you have to respond to that. There is a lag time before that results in higher G&A but it's not a long lag time. So, I think we will see continued improvement for a while yet and then I think we will be in more of a maintenance mode. Richard Paget – Morgan Joseph: Okay and then getting on the guidance mid-point suggest that the second half of the year will be more or else similar to the first half of the year. Without getting into not giving guidance within guidance, so what sort of scenarios or kind of risks or uncertainties on things the second half been less than the first half should we look at it, it is kind of timing on some of your base loads were coming in, is it something with Motiva if you could just give a little color on that?

It's hard to point any about one particular event or even one or two events that just how quickly we see this upturn. On the negative side we really aren't sure with all the pressure that's been put on some of the federal government for in sourcing jobs and there is a pressure on NASA and things like how that could affect us over the near term, the elections we have mentioned. Many of things we have already talked about have both pluses and minuses to them that could push us to various parts of in the range. So, it's just there is a lot of uncertainties both on the positive side and the negative side that could affect not only the longer-term growth in '11 but the balance of '10. Richard Paget – Morgan Joseph: Okay. Thanks.

I was not giving guidance within guidance. Richard Paget – Morgan Joseph: All right. Thanks, will get back in queue.

Barry Bannister – Stifel Nicolaus: Barry Bannister with Stifel Nicolaus.

Barry, do ever get tired of explaining how to pronounce the name of your company? It seems like you have to do that pretty often. Barry Bannister – Stifel Nicolaus: I feel Stifled by it. Anyway the thing that concerned us last quarter was when you spoke of a 4% operating margin as a theoretical bottom but we have done really well here with a four and three quarter percent margin. SG&A you have alluded to being a 9.5% peak as a percent of sales just by the TPS shift and gross margin which has lagged a little bit looks like it certainly got more upside than downside particularly as you go into TPS. So, are you willing to say here since you are starting to see bottoming your end markets that maybe four and three quarters operating margin is going to be the bottom instead of 4% this cycle?

I hate to discreet it but I don't think we ever said four was going to be the bottom. What we said is we didn't expect to see it to go down to what historically had been at the bottoms, we didn't give a floor but what I think we are still looking at is there is still the possibility of little bit of softness as the pricing as we go forward over the next few quarters as Craig said, we are – we expect the volume lead to pull us out of this downturn more than a pricing jump and the pricing will come after that. So, given that we could see a little bit more softening in the pricing and we are not going to call whether that's a just exactly where that is but it's or just exactly when that might happen but it certainly could, we could see it over the next couple of quarters the operating margins might still have a little bit of softness and we would hope to see that offset by volume pickups. Barry Bannister – Stifel Nicolaus: We look back at TPS going all the way to the '08 peak; the revenues, bookings and backlog all attract each other. There has been a huge divergence with falling out LTM revenues and bookings and yet backlog has remained very resilient at over $8 billion. Should we take that as a slower burn rate due to the changing mix of the TPS perhaps more long term supply contracts? What is the read on that?

I don't think there is a dramatic change in the burn rate on the TPS, there might be a little bit as the federal programs have grown. They would tend to be a little bit longer term but on the O&M side we tend to book those a year at a time in anyway. So the backlog reflects just a year worth of our expectation and it kind of enrolls in quarter after quarter. I think drawing any conclusions over the last 12 to 18 months has been very difficult because of the cancellations and things like that has affected the backlog particularly the field services side of the backlog much more heavily than the professional services but they haven't impacted the professional services as well. But I think as we have always said historically as we come out of any recession or any growth cycle it is lead by professional services. I think we will see that certainly over the next three to five quarters, we are going to see the professional services leading before we see the pickup in the field service. Barry Bannister – Stifel Nicolaus: Okay. And then lastly, I don't think it gets much mentioned but you have made huge strides on operating cash flow as a percentage of cash collections from clients, your cash flow yield has been extraordinarily been good, 15 year high this cycle at the peak. Have you made progress on DPOs and DSOs where you think you can keep the ground that you gained because since the recession your DPOs have fallen from about 19 days to about 14 days while your DSOs have fallen from about 57 days to 49 days? So, will you be able to stretch out those payables and accelerate those receivables and keep the cash flow this high?

Certainly, that's our goal, a lot of that has to do with the mix of business as well and we actually tend to get better cash flows off of our field services business and we do have some of our professional services businesses, so but we think that we are trying very hard and we believe that we will be able to keep most of that gain going forward.

There is lots of good in that too but it doesn't hurt that we are in a declining revenue cycles. So that also helps the number as well and when revenues are going the other way it will hurt the numbers.

Did that answer your question, Barry? Barry Bannister – Stifel Nicolaus:

Okay.

Your next question comes from the line of Steven Fisher with UBS. Steven Fisher – UBS: Hi, good morning.

Good morning. Steven Fisher – UBS: Just a follow-up on the cash, if the deals that you want to do actually get done. What do you think the cash balance goes over the next year or so? I mean do you think it mostly depletes the cash you have now or would you still do you think you are left with in the 100s of millions.

Well I certainly think we are probably going to have a few 100s of million on the balance sheet anytime in anticipation of what's that in front of us. We rather not do deals with debt, so we want to have cash balance but I don't think it will continue at the kind of level that it has been. Steven Fisher – UBS: Okay and then –

Just to remember that it has taken us a couple of years to build this up over a period of time when we acquisitions were too expensive and so we will take a couple of years to spend that and but even with that we will end up, we are still generating cash and we would expect to see favorable cash balance just there because we are generating cash as we go. Steven Fisher – UBS: All right now it makes sense and then what are some of the ways that you think the NASA situation could play out and how I might expect your revenues?

Well the scenario is sort of run from business as usual which would be a positive for our company, or a shift in spend to other not the sort of Mars world but a continuing support of NASAs mission that probably also be a positive toward a complete reversal of NASA spending to strictly what I will characterize as the science function which would be a relatively big negative for our business and there it has got I don't know 18 zillion alternatives in between. So long as there is – I will say it as a more positively than I think it's probably should be said but as long as there is a flight component to NASA we will do pretty well because not only do we support things like man space flight but all forms of NASA support to the aerospace world. If NASAs mission became purely science, we don't have nearly as big a rule. Does that make sense? Steven Fisher – UBS: Does the constellation cancellation, does that have any immediate effect on revenues over the next several quarters?

Not that we see yet. Steven Fisher – UBS: Okay. When might you know about that?

I think I said it's a more or less big uncertainties and it's an involving factor. If you stop and talk to one of our NASA customers on any given day, you will get responses that range from the sky as following and there is not going to be anybody working here in six months to – it doesn't mean anything at all. We have got all this stuff we still have to get done to put it in laymen's terms since I am not a rocket scientist. And you can even get that, those two different responses from the same customer on two different days and so it's really hard to say when this thing is going get sort out and what it's going to mean. It is one of those places of pretty significant uncertainty as we sit here today. Steven Fisher – UBS: Okay, that's fine, just last quickly. Did you have any cancellations in the quarter?

There were no significant cancellations there is always a little stuff but there was nothing significant. Steven Fisher – UBS: Okay, great. Thanks a lot.

Your next question comes from the line of AV Fisher with BMO Capital Markets. Avram Fisher – BMO Capital Markets: Hi, thanks for taking questions I don't have too many. You had said the JJG acquisition was less than a $100 million I backlog. I was wondering if you could specific a little more closely what that was?

Well, I think that's pretty close; I think that was like $96 million or something like that. Avram Fisher – BMO Capital Markets: It's roughly $100 million and a lot of people have asked that SG&A, I am just trying to get a sense of sort of where is the SG&A. Is it in the selling side, is it the G&A from the acquisition side or are you seeing a pick up in the selling cost of selling?

No we are not. I mean right now the cost of selling, remember our business model pretty stable from a sales cost point of view, so if anything or cost of selling are at a relative low given the volume of sales. Now as we start to see more energy in the market, more opportunity we will probably dial that particular G&A cost up first to take advantage of the market opportunities as we see them. That will be the first piece of G&A to start to rise the, operating G&A will be the last piece. But at least right now that's not, we are not there yet. Avram Fisher – BMO Capital Markets: So, I guess I am just trying to find a difference between sort of SG&A flat is slightly down the remainder of the year or was that slightly more optimistic view of revenues. Is it the offset of the G&A, is it I am just trying to figure out that difference.

I am not sure I understand the question. Avram Fisher – BMO Capital Markets: It sounds like you said that SG&A would be flat to slightly down for the reminder of the year. It sounds like selling cost will increase with revenues. So, I am just trying to understand why SG&A isn't going up despite and – or if it implies that revenues are going to be flat to slightly down which I don't think you are seeing.

I don't think he said that the selling cost was going to up immediately. I think they will track as business activity picks up a little bit but selling cost is still relatively small part of our overall SG&A. The big component is that all of the labor is everything from Craig's and my salary and down to through the support services and regional management and things like that but second biggest piece is facilities and as business picks up we won't be adding facilities immediately because we do have, you know, some added capacity in there and so and as business picks up some of the folks that are maybe our SG&A now will also get little bit more billable and we will get some benefits there but the selling part of the business, we don't have big selling cards like big transactional folks do. I mean we don't go out and have these huge project specific selling cost for the most part of the year. The only place that tends to, you know be a little bit larger is when you get into the federal government because of on some of their multi-year programs they tend to the proposal process tends to be a little bit bigger but in our normal sales activity it's just it is a fairly constant and steady cost.

And it's a smaller number, less 1% of revenue. Avram Fisher – BMO Capital Markets: Okay, I appreciate the color on that.

Okay. Avram Fisher – BMO Capital Markets: Thanks for your questions.

Your next question comes from the line of John Rogers with D.A. Davidson. John Rogers – D.A. Davidson: Thanks for me at the end. Craig if you look at the potential for your various segments over the next couple of few years and assuming the refining cycle is down for a while, what – I mean do you have a potential for another large Motiva type project come through, just want to understand I mean could big surge in field surge again. I am telling about the chemicals or the some of the infrastructure segment.

Well, have to say, John, that we wouldn't see a Motiva come through but we are certainly not planning on it, when I talk about Motiva is a head win and the fact we are not planning to replace Motiva I don't think we will replace in kind. Now I say all that and yet there is the occasional opportunity comes along where we are particularly positioned and the numbers are still big and we could easily win a piece or even all of the major project like that but it isn't something that we are going to base our model around and I certainly don't think we need that in order to continue to grow the business. Does that answer your question? John Rogers – D.A. Davidson:

No I think that's absolutely right. John Rogers – D.A. Davidson: So, does it also suggest in that the field services is large, again then we will continuous growth on the PPC side?

I don't think the contribution of field services from big EPC projects will be a big growth factor relative to where we are. I do think there is a lots of mid-sized field services projects out there that in the aggregate some of it will be significant. But I also think that the base load capital is still a huge opportunity for us from a growth perspective. I think there is opportunity for us to take significantly more share in the base load world and that will bring fair amount of field services dollars with it. John Rogers – D.A. Davidson: Okay and Craig does that also due to the infrastructure side because I had always assumed that you had to get larger in the field services side of that.

The infrastructure least in the near future or the future I can see is as I sit here, bill services revenue from infrastructure is non-started, that business is still for the most part hard money and so we are really not going to participate and so I don't expect much contribution at all on field sides from the services side from the infrastructure business. John Rogers – D.A. Davidson: Okay fair enough. Thanks I appreciate the help.

Your next question comes from the line of Will Gabrielski with Broadpoint AmTech. Will Gabrielski – Broadpoint AmTech:

Good morning. How are you doing Will? Will Gabrielski – Broadpoint AmTech: One question with ten parts, I am just kidding but as margins improve quarter-to-quarter and you guys have talked about (inaudible) burning through at higher rates through completion. So, can you update your completion target for that, will the burn be linear from here on out because if I assume the past revenues was flat quarter-to-quarter your scope margin or your margin on your non-pass through work was actually up about 30 bits and I am wondering if that – as that pass through number declines or else been equal and discontinue to book at the same margin and if we won't see margin get back up to high fours closer to 5%.

Well all these projects, big projects like Motive following and S-curve. And if an S-curve is a cumulative curve, you can think of it as a bell curve on spending if you want to look at it on a piece by piece basis. We are kind of at the peak of the bell as we sit there today and so being a half done means we have got about half of the construction spend that in front of us, half of its behind us. So, each quarter there will be a little smaller increment comes out of backlog, and the last probably it could be very little because it will be very little out of that. So, if not a linear thing for the next five or six quarters, it's more in the coming quarter than in the quarter after that one and so on. Will Gabrielski – Broadpoint AmTech: Okay. So, which quarter would be see the peak and pass through out that project.

Probably either last quarter or the one in front of us. Will Gabrielski – Broadpoint AmTech: Okay. Last question, any reason why you think?

Will Gabrielski – Broadpoint AmTech: Any particular reason why you think that might be taking a little bit longer to comeback given the amount of activity we are seeing in terms of projection sanctioning targets and FID target, they think that.

Let me ask Noel to comment. Noel was just in Canada last week, and so he has the most current information. Will Gabrielski – Broadpoint AmTech: All right.

What I would say is that and I think I have told Craig this afternoon I got back was $85 oil or whatever it is today but it's in that range. I was a little surprised at the – what I would call the slowness of the rebound, people are been quite conscious, I my own mind I think it's good because it doesn't look like we are going to go throw this hyperventilation we went through last time. So people are been cautious but they're certainly talking about the pickup. I think that's the encouraging thing I got out of meeting last week and I met I guess 10 different CEO's when I was up there. There is more commitment to the long term of the sands today by more of the super majors and the other oil companies than there has been reformed and so most people that are in the oil discovery business are seeing this as a long-term, secure reservoir I think they are all convinced that the price of oil is going to probably stay to the point where it will be economic. So, I come out of it very positive for the long-term but people are been careful. I think Craig said it before that they are not going to go back to the boom cycle at least they are going to try not to go back to the boom cycle we looked at couple of years what has been the historic boom cycle for us. Does that answer your question? Will Gabrielski – Broadpoint AmTech: I appreciate it guys. Thank you.

Chase Jacobsen – Sterne Agee: How are you?

Good. Chase Jacobsen – Sterne Agee: Just wanted to talk about the water-waste-water a little bit, we have heard a lot of the ENC companies talking about getting more involved in this market given the growth potential, I was just trying to get a little bit more color on what your strategy is other than acquisition and really going after sharing and keeping your margin and gaining traction with the customers on that side. If you could just give a little color on that?

Well couple of things, a little bit of background, for a long time we were resistant to being in the water and waste water business and the rationale for that as a time was that it's a very local business and many of the people who are in it feel the need to be in every little town in the United States waiting for their once every 20 year water treatment plant and so they have eight people in Wichita, Kansas for 20 years and they do a big job and then they have eight people in Wichita, Kansas for another 8 years and lose money eighteen of those years and make money two of them and that's not the business model we were interested in. As we have grown scale wise but what we have found is that we had a significant presence in about 20 or 25 major cities and we were building relationships and engaging in the community to support a transportation infrastructure businesses, some of the other businesses that we do in those communities and in those communities the leverage is pretty significant but also be in the water and waste water business. And so we are taking on these big cities like core clients treating them just like we would treat a core client and we believe that as we do that we'll be able to take a significant share of water and waste water community and we don't ever have to be in Wichita, Kansas and I love Wichita years of there that's why I pick on it right but its just not a 250,000 people doesn't represent a market for Jacobs business and so that's kinds of our overall strategy and we will do that by acquisition as we have already pointed out and by leveraging expertise we acquire through JJG and that we already had in the company through acquisitions and that we have in the UK through the Babtie acquisition into those businesses because technically it's a significant factor in the selection process. Remember there is no price selection to speak of and so that's where the leverage comes for us. One of the things that made the JJG acquisition so attractive was their huge concentration in Atlanta, that's very unusual in our experience and it's exactly the model that we are trying to follow as we develop that business. Does that answer your question? Chase Jacobsen – Sterne Agee: Yes I mean if you could take a little bit more of a conservative approach penetrating the customer deeper and the business will come to you eventually.

That's it. Chase Jacobsen – Sterne Agee: Thanks.

Your next question comes from the line of Justin Hauke of Robert W. Baird. Justin Hauke – Robert W. Baird: Good morning just quick question I know we are running a little long here, can you just tell me about your infrastructure business. I was wondering if you would comment a little bit on the municipal bond market and kind of the infusion you have seen in the Build America Bonds and if that's doing anything to kind of build your confidence, it seems like your little more positive this quarter than you have had.

It is and it is more impart for the reasons you have just described, I think as we – when we were pretty upbeat on infrastructure we talked about the municipal bond market and the support that the local community add for solving their infrastructure problems with or without the federal government. We went through a cycle that was pretty hard even if you passed the sales tax revenue bond program to get the bonds and start the work and we are now starting to see through the Build America Program and otherwise people actually going and trying to turn those sales tax revenues in the bond so they have got CapEx money and that's one of the positives. Also I just saw a report here last week I am going to say that shows that where the tax revenues are staying at local level are filling on the uptick they have turned back up, that's another positive as we sit here today and then as you may recall we were pushing hard for the federal government to do something about the transportation bill and the jobs bill both got done together and I think that's another positive. So, federal is what contributes to what is definitely a little more positive outlook at infrastructure than what we had three months ago. Justin Hauke – Robert W. Baird: Great. That's very helpful. Thank you.

Your next question comes from the line of Jamie Cook of Credit Suisse. Jamie Cook – Credit Suisse: Well I got in there, how are you? Just quick question, it sounds like we are getting back to the more historical sort of Jacobs margin, sorry Jacobs business strategy and acquisition. Is there enough in the pipeline in 2010 and that by 2011 we can start thinking about Jacobs getting half of their EPS growth or third from acquisition coming from and the rest organic. Are we getting to that point where you have done enough or there is enough in the pipeline?

John, do you want to comment?

Unlike historically it takes a while for us to really realize the acquisition growth that we acquire because of the intangible amortization. So, while we will acquire and I think the acquisition will contribute though it takes maybe two or three years before we actually start seeing that and maybe ever little longer and in some cases depending just the nature of it, but now we don't expect to see the longer term mix change that much we will still have that third coming from plus or minus coming acquisitions, and the balance coming from the organic growth and what we do with those acquisitions, we get them. Jamie Cook – Credit Suisse: Thanks.

Yeah I think one thing to think about here is that the actual acquisition, the earnings we buy are feeling the impacted by the amortization and intangibles especially as John points out on first two three years. Usually with these acquisitions we are able to make some things happen fairly quickly in terms of reducing their cost and expanding their market share, and those things tend to be positive in the shorter term, so as you look to the out years, I believe this acquisitions are going to be contributors to be in the ‘011 and ‘012, but probably not as the half kind of number that I think you mentioned in your question. Jamie Cook – Credit Suisse: Okay. Thanks. I'll get back in queue if there are any more questions.

There are no further questions at this time. I would like to turn the call over to Mr. Prosser.

I'll turn it over to Craig.

Nothing much to add. We appreciate all of your interest in the business. We think we are finally starting to see the light at the end of the tunnel I guess it's a use of various tried and true kind of praise. Things are going to get better. We are confident, it will get better, and actually it could better faster, so we would all be happy with the results. And with that everybody have a good week.

This concludes today's conference. You may now disconnect.