Patty Bruner - IR John W. Prosser, Jr. - CFO Craig L. Martin - CEO Noel G. Watson - Director

Andrew Kaplowitz - Lehman Brothers Richard S. Paget - Morgan Joseph Barry B. Bannister - Stifel Nicolaus Peter Chang - Credit Suisse John B. Rogers - D.A. Davidson & Co. Michael Dudas - Bear Stearns Jamie Cook - Credit Suisse

Good day ladies and gentlemen and welcome to the Second Quarter 2008 Jacobs Engineering Group Earnings Conference Call. My name is Kathy and I will be your coordinator for today. [Operator Instructions]. I would like to now turn the call over to Ms. Patty Bruner. Please proceed. Patty Bruner - Investor Relations: The company requests that we point out that any statements that the company makes today that are not based on historical facts 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 ending September 30th, 2007, including Item 1A, Risk Factors; Item 3, Legal Proceedings; and Item 7, Management's Discussion and Analysis of Financial Condition and Results of Operations contained therein and the most recent Form 10-Q for the period ending December 31st, 2007 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 will begin the discussion of the financial results. John W. Prosser, Jr. - Chief Financial Officer: Okay. Thank you, Patty and good morning. I'll be briefly going over the financial highlights for the quarter and then I will turn it over to Craig Martin, our CEO to review the quarter’s business overview and growth strategies. Starting on slide 4 of the package the financial highlights for the quarter, we had another very strong quarter. Our diluted EPS was at $0.80 or and the earnings were $99.3 million. So for the year-to-date excluding the one-time gain we had in the first quarter, the EPS was $1.55 and the net earnings are $192.3 million. That one-time gain was $0.04 and $5.4 million. Also year-end or at quarter-end, our backlog was at a record $16.2 billion. Our balance sheet continues to be in good shape is very strong. Our net cash position was at $359.5 million and we did in the earnings release and here have raised our guidance for the year to $3 to $3.30. This is up a nickel at both ends of the range. Turning to slide 5, this is a track of history of our earnings very consistent growth, obviously over the last five years we have shown a stronger growth than what is our normal outlook of 15% per year on average, but it does show a very strong, positive growth trend and reflects the strong markets that we have been seeing. On slide 6, looking at our backlog, again a very strong growth curve year-over-year on the total we are at 16.2 over 10.7 last year. For last quarter, we were at $15 billion, so we are up $1.2 billion from last quarter. On the professional services side, we are at 7.6, which is up from 5.8 last year and 7.1 last quarter. So, good strong growth on both areas of our backlog and in the total backlog. Actually as we have been talking about the growth in our Field Services from our growth rate were actually was a little stronger this quarter than what at our growth in our Professional Services were. So with that, I will now turn it over to Craig Martin to review the quarter. Craig L. Martin - Chief Executive Officer: Thank you, John. Good morning everyone. We are going to take the usual time to talk about how we are going to continue to try to grow this business and keep that 15% growth rate in the long-term. There are five things we think we have to focus on. We need to remain committed to our business model, which we think is relatively unique in the industry. We will talk more about that in a minute. We need to continue to diversify our market and focus on those markets that represent real opportunities for growth. Again, I will talk about that a little more in a minute. We need to continue to have a multi-domestic strategy, we think being local to our customers continues to be very important to our position in the marketplace, as I think we have talked a lot. We are not interested in so much in the big events as we are in the long-term local businesses. So, we are going to continue to focus on that multi-domestic strategy. We are going to grow in the Middle East, for example, you have heard about our acquisition of Zamel & Turbag ZATE, which we think we will begin to get us a real presence in Saudi Arabia and grow that business. We are making slow progress in Asia and we think we are going to continue to expand our base of operations there and grow in additional countries across Asia. We are going to continue to make acquisitions, it's a central part of our growth strategy or it has been. Our focus continues to be largely in the infrastructure and oil and gas arena where as we think have the most opportunities for growth and consolidation. So that will be an area where we will continue to focus probably focusing more on opportunities in Europe and Asia and the Middle East than on the US for the time being. As we complete the integration of acquisitions like Carter & Burgess we will come back to US and continue to expand here as well. And then we always talk about driving down costs. We think it's a critical advantage, particularly when this market goes away. We know this positive marketplace is great for all of us but it won't last for ever and companies that can control your costs and position themselves to be cost effective in the down cycle do better in the up cycle as well. So, let's talk a little more now about our relationship based business model, I am now on slide 8. Remind everybody of what we call the industry model there on the right side of the slide. For the most part our industry continues to focus on events. Now, in today's market those events aren't so much lump sum turnkey, but there is still events, big projects and far away places are a bit the dominant mode of the work for most of our competition. They also do discrete projects and they continue to have some preferred relationships and those pieces of the pie vary depending on the market climate where it's the big events that drive most of the players in our industry. We continue to be focused in the opposite way, preferred relationships are our basic approach. We get about 80%, 75% to 80% in any given quarter of our business from people within we have long standing preferred relationships. We got great links to be sure that we resource for those customers over any other opportunities that might be out there. So, where our priorities to serve our long-term customers make sure they are satisfied and we think that will help us not only in this up cycle, but it will also help us to be strong in a down cycle when and if it comes. Well there is no if, it will come. We will continue to do discrete projects in an effort to find additional preferred relationships and there may be the occasional event that makes sense for us as a company, but they are likely to be [inaudible] between. Moving to slide 9, we also continue to try to diversify our business and have a broad spectrum of opportunities that we can work on. We continue to think that not all these market cycle together and that having a diverse group of markets we serve we're helpless. Let me take you through kind of each of the markets and how each market is performing today. I'll start with refining. It is a very, very good market as we sit here. If you look at just announced projects, announced CapEx in the refining area and talk about CapEx first. The big oil and gas companies, the big refineries I should say more specifically have announced a $30 billion a year CapEx spend and so there is lots of money flowing into refining. We have got lots of drivers for that, capacity expansion is clearly a driver, there is also a fair amount of environmental regulation that is driving refining spending. The MSAT II program, the non-road loads offer [ph] diesel, the prospect of loads offer green fuel bunker, all are driving a lot of potential CapEx in refining. Moving to upstream oil and gas, big, big, big market. Again if you take just the major they have announced an annual spend of about $80 billion in upstream oil and gas. It looks like a terrific mark for us and you will recall we are still a very small player in that market. So, we think it is a very significant opportunity to take market share as well and grow our business. And in the chemicals business, there is good investment in the Middle East and Asia, some investment in North America and Europe, and so it continues to be a good steady market. Probably it doesn't have quite the energy behind it in terms of growth that oil and gas, and refining do quite a good business overall. When you look at overall CapEx released three businesses, there is about $590 billion of announced projects, a $115 billion or so in that oil sands, $475 billion in refining and chemicals. If you weighed all that according to what our consultants suggest is the likely project, there is still something like $200 billion, $195 billion in that range of announced projects in this business. So, we think this part of the diverse group of markets we serve is going to be pretty robust for a while yet. Moving on around the wheel, pulp and paper high tech, food and consumer products that are other category, it's other because there is nothing going on. There is not good business there... there is, but the growth prospects there is just not very strong, there is not just a lot of activity that’s going to drive a major increase in our business as we go forward. But it does keep several thousand people busy and we love it for that reason alone. PharmaBio, about 9% of our business right now is steady, it continues to grow although it's not as strong as it has been in times in the past. We have had a good spur of growth over the last year or two, but it looks to us like it's going to be a little slower going forward and not quite as active from a project perspective, may be as has been. Part of that I suspect to being driven by the election issues, but it will be a good business for us regardless. Just maybe not as strong in terms of growth perspectives as it has been. Moving to National Governments, you’ll recall that's really two kinds of business for us, research and development, time topic [ph], and technical engineering work, a very good business for us. We are getting steady, steady growth out of that business. We are kind of uniquely positioned, is one of the few services only providers to that industry, and it keeps us out of trouble and keeps us in a good position because we have always conflicted interest. We have a lot of prospect in the selection process. We are very optimistic about the possibilities of those projects being awarded the Jacobs. So we think we are in a great position to see continued growth out of the scientific and technical services side of our Government's business. On the environmental and related project side the more of the DoD side of the business, DEO side in the US, the ministry of the defense and the Nuclear Decommissioning agency in the UK. In the US, the businesses is at steady long-term business, we continue to see the environment clean-up work. It's a good solid business from that regard, probably not a big growth business, probably the number of opportunities are going to be pretty steady for the next few years, certainly not yet a dying business, but not one that we expect a lot of growth out of. But we are possibly accepting that as we can see a lot of activity related to base alignment and closure, both in terms of some clean-up work, but as much as anything pre-location issues and the projects that go with that. And we think you are prominently in that base relocation kind of work around the US, in a really good position we expect a good growth out of that. The UK business, one that we have been very excited about for some time continues to be a very exciting prospective market. There is still about $300 billion with the work out there to be done, but the process of awarding that work is doing more slowly than we expected and so that the business is not as robust at the tier one level as we might have liked. On the other hand at the tier 2 and tier 3 level the business is going very well, there is lots of activity and we are well positioned in that business so we continue to see good growth. We are also pretty excited about the atomic weapons establishment, what's going on there you may have seen our recent press release of our expanded scope in that regard. So, overall the national government's business looks to us to be another really robust market and good opportunities for Jacobs going forward. On the building side, remember that’s technical buildings, science facilities, jails, hospitals, healthcare related work that sort of thing. Another really good business for us we see lots of activity in science facilities. We see tremendous activity in hospitals and healthcare, that's a particular strength for Jacobs both in Europe and the US and given the overall graying of the baby boomers we think this is going to continue to be very strong market as well. In addition, US market for corrections, jails seems to be going through another cycle, it looks like we have run out of room to put prisoners in so got to build some more jails, so we could put some more people in them. That looks like a business that's going to be a little more robust in the next couple of years that has been in the last couple. So overall, the buildings market also looks to be a good market going forward. Finally, the infrastructure market, this is a market we have told you we are very high on for some time now and we continue to see no reason not to be very high on this market as we look forward. There is every evidence that infrastructure spending will remain robust through 2008 and 2009 based on what we can see. Part of that's driven by residual backlog of projects, part of it is driven by the fact there is just blatant demand out there, part of it is driven by the ageing of our infrastructure, things like the I-35 bridge problem or the St. Cloud bridge problem. All those things are factors that drive a demand for infrastructure that's not just unique to the United States. It's all over the world. And that market therefore in our mind remains one that is very, very robust for a very long time. And if you look at the evidence of how people feel about that, in the most recent data we have in terms of State Municipal Bond elections for infrastructure, 89% of those elections were approved and that's actually the highest level of last pin sets of elections. So it really is indicative that there is lots of support for the infrastructure business globally and we think that's going to remain a good business for us. Part of that is also because it’s our share business, no one has any significant market share. So the opportunity for Jacobs to take market share and grow its business is really quite strong. So, overall the markets I think are pretty good and we are diversified well in those markets. We will continue to look at other opportunities to diversify our business across the markets. Turning finally the slide 10, this is where we have our commercial. We do think we have a lot of things going for us that should make us attractive to the investor. We’ve got this unique customer driven business model. We are a diversified company. We are in a great market right now with a strong balance sheet, which should let us take advantage of that market in a number of ways and we believe we can continue to grow at 15% a year or more for evermore. So with that I will turn it back over to Kathy for questions. Question and Answer

[Operator Instructions]. Your first question comes from the line of Andy Kaplowitz from Lehman Brothers. Please proceed. Andrew Kaplowitz - Lehman Brothers: Good morning guys. Nice quarter. Craig L. Martin - Chief Executive Officer: Good morning, Andy. Thank you. Andrew Kaplowitz - Lehman Brothers: You guys reported about a billion dollars more of new awards than I personally expected, very robust quarter on the new award side. So I am wondering where it came from, I mean, obviously we see your press releases that are out there, were there any sort of large contracts that you weren't able to press release that were there, was it scope changes on existing projects? I am just wondering where the strength is coming from? Craig L. Martin - Chief Executive Officer: For the most part of it the strength is in new awards. There were no individual projects that would be on the scale of something like the Motiva project. The awards continue to be in the projects side is that we consider sort of smaller by global standards. That doesn't mean there aren’t some nice sized jobs in there. But that the awards are probably more consistent what we expect quarter-in-quarter out as a company, and that I would tell you is even though there is a lot of things we can’t talk about specifically because of the customer hasn't given us the approvals. They were well diversified across our markets. So, they were good awards whether it's national government's refining or oil & gas. Andrew Kaplowitz - Lehman Brothers: Okay, that's helpful. So, even now you can impressively start many oil & gas award that looks like that was still well representing in the numbers? Craig L. Martin - Chief Executive Officer: Yes, absolutely yes. Andrew Kaplowitz - Lehman Brothers: Okay, great. And then when you look at your guidance, obviously I know that you want to be conservative in how you look at on fiscal '08. I guess the question that I have is, so you have done $1.55 in the first two quarters of the year and then if you obviously if you multiply that by two you get close to the midpoint of your current range excluding the $0.04 gain and so my question is, it seems like you are assuming not too much EPS growth in the second half of the year versus the first half of the year yet you have this tremendous backlog growth. So, I am wondering are you just really being conservative, is there something you see that we should be aware of? What's going on there? John W. Prosser, Jr. - Chief Financial Officer: One answer that we try to analyze, two things, one is this backlog growth continues to be a little stronger on the field services side which tends to be longer work off so, the good news it's a longer string of work, but it doesn't comes in faster than it goes out. The other thing is, yes, we read the papers, we have an underlying concern of what's going on out there. We aren't seeing it in our marketplace at this point, but we have to be realistic about the possibilities of changing in the impacts of the economy. So if that translates in the year, comments about being conservative or just kind of looking at the overall picture, you can interpret that but we think that in this economic climate of fairly broad range is appropriate and we also think that the only reason we give guidance is because we really talk through us to give enough details for you to have any other way to gauge the business, so we are trying to put at least a fence around what the stream may be thinking about our prospects both on the positive side and the negative side. Andrew Kaplowitz - Lehman Brothers: That's good. Thanks. And then one more question if I could, are you guys seeing any signs of weakening in any brand markets right now versus lets say last quarter? Craig L. Martin - Chief Executive Officer: I would say that weakling probably the answer to that would have to generally be no. There are some markets where the rate of improvement and prospects, the rate of growth isn't what it was a quarter or two ago? I think, I mentioned pharma as an example of that. So, it's not the case that every market is booming everywhere. Some markets relatively speaking are not as robust as they were. Some remain as robust as ever. And I think that’s kind of the advantage of the diversity we have. Andrew Kaplowitz - Lehman Brothers: Okay, great. Thank you very much. I'll get back in queue.

The next question comes from the line of Richard Paget from Morgan Joseph. Please proceed. Richard S. Paget - Morgan Joseph: Good morning. Craig L. Martin - Chief Executive Officer: Good morning. Richard S. Paget - Morgan Joseph: I wonder maybe if we could expand a little bit on backlog acceleration, I mean, growth has definitely, the pace has ticked up and I know you said it's nature of the projects are a little bit longer drawn up, but how should we think about revenue growth, I mean, just given the way the backlog is coming and it seems like revenue growth would have to accelerate as well? Craig L. Martin - Chief Executive Officer: Yes, we would expect, particularly as this field services part of the backlog moves into work out that we will see an accelerate growth in revenues. Probably late in '08 may be the fourth quarter and on into '09 and beyond. We are seeing a nice pickup in the professional services at this point on the work off, and is working off a little faster than the field services at this point, but as we see that trends switch will see the revenues pickup probably fairly dramatically. Richard S. Paget - Morgan Joseph: Okay. And then, on the acquisition front, you mentioned two key focus areas, oil and gas and some infrastructure, how are you seeing sellers expectations, I mean, it seems oil and gas would still be very high, but may be in some infrastructure pockets expectations have come down? Craig L. Martin - Chief Executive Officer: Yes. I think what you would find is that the expectations have moderated a bit everywhere. That's partly because of what's happened with credit and the sort of the disappearance of private equity. There is a point in time when strategic buyers like Jacobs were well below the premiums being offered by private equity and that drove the numbers up overall. Today we are seeing that much less of a factor. Pricing for us obviously is very event driven because we are only dealing with one company or two at a time, but overall I would say pricing has actually improved a little bit in spite of how strong the market is. And that's probably also a little bit on the oil and gas side because some people had really unrealistic expectations and no one met them. And that helps the expectations as well. I can tell you over the years we have had a number of deals go away from us because everybody had the big idea about what their company was worth and then turn around let them come right back at our pricing when they found it wasn't out there. Richard S. Paget - Morgan Joseph: Okay. Do you characterize it more of less competition out there versus maybe some concerns about the economy? Craig L. Martin - Chief Executive Officer: Yes, I think it's more about less competition, and certainly in the oil & gas side I think on the infrastructure side, they are probably aren't in pocket some concerns about the economy that would make isolated acquisitions a little cheaper because people have a little bit of fear, but I don't think that is very significant at this stage. Richard S. Paget - Morgan Joseph: Okay, thanks. That's it from me.

Your next question comes from the line of Barry Bannister from Stifel Nicolaus. Please proceed. Barry B. Bannister - Stifel Nicolaus: Hi, guys. When I look at your field services percent of the backlog, it's up sharply from four quarters ago and seems to have broken out of a multi-year slide and yet as a percentage of revenues field service continues to decline for years and years in a row and even lately. We associate field construction with being not a complete commodity because of the high value buildings you do, but may be lower margin. One of the biggest misconceptions on this stock was that a lot of analysts probably felt that as you moved into the field your margins would come under pressure, but in fact your margins are at a 35-year highs. So should we read into this rising backlog that's field services and this decoupling with field service revenue that ultimately field service revenue rising will impact your margins? John W. Prosser, Jr. - Chief Financial Officer: Yes, as I have been saying, as the field services grows, the revenues will grow faster than it was just being driven by the professional services, but that will have a lower impact or a dampening impact on our margins. So at this point, while historically we have seen that they carry very similar margins here recently with the big run up in professional services driven by salary, escalation and such like that the professional service margins have grown faster than the field services margins. And we would expect that as field services grows it will have a dampening effect, a flattening effect on the margin percentages, but because of the volume effect of the higher revenues it's still... we should see growing margin dollars. Yeah because part of that will also… as the field services grows, the G&A as a percent of revenues will start coming down because there is very little G&A that gets attached to a growth in field services. Barry B. Bannister - Stifel Nicolaus: And you recently bought a Saudi Arabian Engineering firm and the Saudi king has said they want to build six new cities. There is going to be a lot of civil work it goes beyond just petroleum sector, what's the breakdown of that Saudi acquisition’s exposure to both civil as well as petroleum engineering? Noel G. Watson - Director: This is Noel. Let me answer that question in terms of, we actually own, purchased 60% of the Saudi firm. So it gives us control. The exposure to the market is going to have to be expanded, today they are pretty much in oil and gas and Saudi although we do have an operation in Abu Dhabi, that's doing both buildings and infrastructure work. We have been trying to position ourselves in the Middle East, ahead, the kind of diversities that we have everywhere else. So, we would have buildings, infrastructure, oil and gas, both upstream and downstream and chemicals in the beginning, but it is the work in progress as we speak, but we believe we are going to have exposure to all these markets in the long-term. And but this is a long game, this isn't going to happen immediately and so today this gives us 500 to 600 people in the Middle East. We are looking to having a couple of 1000 there by the end of the decade and moving on from there. So, it's a long game for us, but we will have exposure to all those markets and that's the game plan. Barry B. Bannister - Stifel Nicolaus: More so by bolt-on acquisitions and expanding the staffing of the existing firm you bought? Noel G. Watson - Director: No, I would think as we move forward, we are going to expand what we have. We are going to be putting Jacobs people in there, we are going to be building these businesses on the ground. So, a lot of the growth from this point forward is going to be internal rather than external. Barry B. Bannister - Stifel Nicolaus: Great. Thanks, Noel.

Your next question comes from the line of Jamie Cook from Credit Suisse. Please proceed. Peter Chang - Credit Suisse: Hey guys. Hi it's actually Peter Chang for Jamie. How is it going? Craig L. Martin - Chief Executive Officer: You don’t sound at all like Jamie. Peter Chang - Credit Suisse: Well, congratulations on a good quarter. I guess, regarding your comments on the acquisitions probably not were downstream oil and gas in the US, what innings you guys think we are regarding downstream oil and gas? Craig L. Martin - Chief Executive Officer: What innings, gosh I mean, it's not the way I normally think of it and I am not sure I know a good... I am not even a baseball guy maybe I should ask Noel to comment. I don't know if we were in the seventh innings stretch would that be good or bad. What do you think Noel? Noel G. Watson - Director: What I think is that we just don't know. There is a lot of demand going on, oil prices are high. It would be... right now it looks hopefully good I mean there is nothing out there that looks bad in this oil and gas business right now except that history shows it will not last. But right now you just can't predict it. But our prospect list are still long and strong. Craig L. Martin - Chief Executive Officer: Yes. If you listen to the customers, one of the big oil and gas customers recently publicly announced $125 billion five-year program in its area of which about.. that was between oil and gas and refining, which about 20% or 25 billion was going to go to refining. That's pretty robust spending for a long-time. Peter Chang - Credit Suisse: So, it's looking like you will continued pass at least in 2009? Craig L. Martin - Chief Executive Officer: I think 2009 will look solid. Yes. Noel G. Watson - Director: But I think on the upstream side you got to remember while the refining tends to have various historic cycles. The upstream spending is there pretty much after… yes through the cycles. So while they go up and down a little bit even when oil was back in the teens not too many years ago, they still were spending significant money on the upstream side, finding new fields developing, the existing fields and such like that so, that at least from our perspective and historically looking at it, that tends to be a little bit less of the big cycles than you see in some of the refining or chemicals or some of the other say on the manufacturing or the producing side. Peter Chang - Credit Suisse: Okay, great. I guess ... are you guys willing to any kind of capacity constrains in terms of the employees, in terms of work. Did you guys have... your backlog is up 50% so, it just looks like, is there any promt [ph] going on in that area? Craig L. Martin - Chief Executive Officer: Well, the businesses of getting the talent to do the work is a huge challenge in today's marketplace. And it's a challenge everyday, but what we are finding is that we are having to work harder to do it, but we are getting the people we need. It's stretch and we are having to get people coming back in the market place, we are having to put younger people to work in places where they wouldn't have been allowed to work in the past, just because the customers wanted experienced engineers, but there aren't enough of them. So, that let’s us put young college graduates to work on projects today that they couldn't have worked on five years ago. So, we look at all the different things we are able to do. We are getting the people we need to get. Some of that has created sourcing, some of it's stealing from smaller competitors, it don't have a global scale and are kind of interesting projects to work on. The team out there doing the work finds about how hard it is, but they get it. And I don't see any reason to think that’s not going to continue. Peter Chang - Credit Suisse: Great. Thanks again for the quarter guys. Craig L. Martin - Chief Executive Officer: Thanks.

Your next question comes from the line of John Rogers from D.A. Davidson. Please proceed. John B. Rogers - D.A. Davidson & Co.: Hi, John. John B. Rogers - D.A. Davidson & Co.: Hi, good morning. You talked about margins in... the difference between the professional services and field services. But if you look at your operating margins over the past couple of years or so, they have grown pretty steadily and I am wondering how much of that as you look at it is mix versus just better pricing. In your case, because I know everything essentially pass through, but you are keeping a higher margin, I guess that would former price increases? Craig L. Martin - Chief Executive Officer: Well. I think there are three things, I will have John a chance to comment here, but we are certainly continuing to see labor escalation that allows for margins expansion for us. We also are getting some modest, at least modest by what our wildest dreams would be, expansion in pricing. So, both those things are contributing. We are using... our facility utilization, the things like that drive our business are also quite good. So, that's a positive and then we have changed our mix. If you look at the business compared to any time in the past, we are certainly getting a lot more of our pro-service revenue from relatively high margin businesses. And that's part of why we think today when you look at our pro-services versus field services, at the net margin level, our pro-services business, technical services business is probably going to continually have a little stronger margin line than our field services business will. I don't know John, you want to elaborate? John W. Prosser, Jr. - Chief Financial Officer: No. I think, [inaudible] also when you look at it, over the last two years, the mix has changed quite a bit and we are at 55% pro-services now of the revenue and you go back couple of years ago and we were just about the opposite, we were 55% construction. And as the pro-services the mix and the combination of both the mix changing but the margins coming off of the pro-services improving for these reasons as Craig just mentioned. And those are the driver much more for the pro-services side than the field side. We have seen a continued expansion in our margins and while the field service margins may be have improved a little bit in a percentage, most of the pricing in the field services is done off of total revenue where the pricing in the technical professional services is done off of a multiplier of salaries. So, as fuel cost escalate and there has been escalation there, you don't get the leverage you get out of the professional services because we are regaining that same percentage of just a bigger number. John B. Rogers - D.A. Davidson & Co.: Right. But, yes and as material cost go up, I mean, the percentage should interior [ph] would actually decline, but. Craig L. Martin - Chief Executive Officer: Yes, actually the percentage will stay about the same. John B. Rogers - D.A. Davidson & Co.: Okay, is your multiplier then on the professional services, it is expanding? John W. Prosser, Jr. - Chief Financial Officer: It is only slightly. There is a little bit there, but that's only a relatively… probably between the three things that Craig mentioned, the salary escalation, overtime and… which is better utilization of the G&A cost and pricing... the pricing is probably the lowest of the three as far as contributing to the improved margins. John B. Rogers - D.A. Davidson & Co.: Okay. And I guess looking forward a little bit, I know you talked about... and I guess this mainly referred to the Middle East, but expanding with your people there, but as you look at other opportunities, other markets to go into, are these... I mean do you expect to see higher margin markets or markets that offer higher multipliers, maybe you can just talk about what you're targeting? Craig L. Martin - Chief Executive Officer: Well if you look at the markets we serve today and just those, the multiplier is very significantly from market-to-market. So, multipliers for example in the infrastructure market are much higher then multipliers in the refining market. I mean like 15%, 20% higher. But the cost to serve are higher. So one of the things that's affecting our numbers is very hard to explain without getting into a exhaustive detail is how growth, for example, on the infrastructure and professional services side affects the overall gross margin numbers and the net margin numbers compared to growth of special services on the engineering side and the refining business. So there is all kinds of mix issues going on in the context, pretty much across the board there is a very minor expansion. If you think about a multiplier of 2.0, maybe the multiplier expanded to 2.05. John B. Rogers - D.A. Davidson & Co.: Okay. Craig L. Martin - Chief Executive Officer: That's the kind of expansion we are talking about. John B. Rogers - D.A. Davidson & Co.: Okay. But if you look at, I mean you've talked a lot Craig I guess about the infrastructure market, and where you want to expand those markets in general offer higher multipliers or higher margins you think? Craig L. Martin - Chief Executive Officer: They certainly offer higher multipliers, so let... just again as a comparison, the multipliers in the refining business might be going to give you a range 1.8 to 2.0 and the multipliers in the infrastructure business again give you a range might be 2.2 to 2.6. So you can see there is very significant difference in the multipliers. Now, a significant fraction of that goes away and the cost to serve because the refining business allows a lot of billability, accounting billability, computer staff billability, whereas in the infrastructure business a lot of those things are overhead and are not billed. So at the gross margin level there is a very significant difference between those businesses. At the net margin level, it's smaller, but I would tell you that infrastructure in general carries a little higher net margins than refining because it's a public sector customer with a benign purchasing strategy, i.e. we award on qualifications and pay you what it costs [inaudible] versus a private sector business or you are dealing with some of the toughest customers in the world? John W. Prosser, Jr. - Chief Financial Officer: When you look across the industries, the net margin ... the operating margin really doesn't vary that much depending on where you are on the cycles. As you get into market right now that you can say the ones that are really hard, the most of them are all pretty strong, but there is a little bit more upward pressure on say it in the oil and gas and refining and infrastructure markets than right now in pulp and paper or some of the markets that are little slower. So, there will be a little variance with where you are in the cycle, but when you get down to the operating margin level it really depends more on where you are in the cycle as to which are the better markets than the pure pricing in that market itself. John B. Rogers - D.A. Davidson & Co.: Okay. Thanks. That helps a lot.

Your next question comes from the line of Pierre Afel [ph] from KeyBanc. Please proceed.

Good morning gentlemen. Craig L. Martin - Chief Executive Officer: Good morning. Nice day.

Hi. Just the first question, in terms of your guidance rise, what has changed in terms of your expectations in this quarter versus the last quarter that increased everything by a nickel? John W. Prosser, Jr. - Chief Financial Officer: Well, we had a better quarter than we thought we were going to have. So if you take the $0.03 that we beat consensus, I mean that’s [inaudible] that’s part of it and the strong backlog it just moves up our expectations through the balance of the year.

So, the backlog you would say for this quarter was a little stronger than your own expectations thus far? John W. Prosser, Jr. - Chief Financial Officer: Yes.

Okay. And in terms of ... I was just at the URS conference and they were commenting that they expect a slowdown in the infrastructure space in the US in the second half of this year and the first half of '09 and that the state budget that will be announced on July 1st would be a primary indicator of the extent of the slowdown. I was just wondering how to reconcile what you are saying with what they are commenting on, whether there is a material difference in infrastructure sides you compete in versus URS? Craig L. Martin - Chief Executive Officer: I am not sure, I could give you the answer, because we don't understand fully with the difference either. I pressed our own team very hard in advance of this call because of what Martin had to say and our view remains as we've outlined it. We see the business from where we were sitting is very robust. Now remember that we have a much smaller share of the market than URS does and we also participate in the market perhaps in a little different aspects of the programs and projects than in terms of what the actual underlying work mix is than may be URS does. So we are not perhaps as dependent on state and federal funding for our business as Martin might be. I don't know that, I don't know the details of his business. But I think from our perspective, we see the market is very good for us looking forward well out into '09.

[inaudible] that’s actually very helpful. The third thing I wanted to ask was, just on the Motiva project, will you be having any bonus incentives at any points on that particular project? John W. Prosser, Jr. - Chief Financial Officer: Well, we can't disclose any of financial terms for the Motiva deal, but we... all of our projects get recognized as they go. So there wouldn't be any expectation even if we do have any short of surprise.

So, I mean it would be, it won't be like a little bump in any other quarter, it would, it's like a constant kind of profit recognition? John W. Prosser, Jr. - Chief Financial Officer: It will be as steady as the construction progress.

Okay great. And one last question in terms of the Saudi business, I was wondering what the backlog would that… forfeited backlog of that is if available and then the kind of margins that that business brings with it? Craig L. Martin - Chief Executive Officer: Well, as far as the backlog goes, you can't find it in our numbers, okay. So, it's very, very small compared to the overall Jacobs. As far as the margins go in Saudi on a... when you looking at the local currency, the margins are relatively decent particularly for the local contractors, because there is just a lot of work there right now with the ramp going [inaudible] and some of these other Saudi clients being the big payers and the big users of services. And so the margins in Saudi itself for the people operating in country are pretty good.

So, I guess it would be fair to say that, it seems at the moment more strategic with potentially a good contribution to your margins? Craig L. Martin - Chief Executive Officer: Well, it's strategic today, you won't fit in our numbers this year or next. It's a long game as I said earlier. As we look at the things that play out in Saudi and the King in Saudi and plus the other Emirates near the Gulf countries continue to spend very large amounts of money in developing their countries and they are pushing a lot of money away from the oil and gas business into buildings and infrastructure, roads and bridges, universities that type of thing to build the Pyramids in the Middle East.

And thank you very much. John W. Prosser, Jr. - Chief Financial Officer: Thank you.

[Operator Instructions] Your next question comes from the line of Michael Dudas from Bear Stearns. Please proceed. Michael Dudas - Bear Stearns: Good morning, everybody and happy Earth Day. Craig L. Martin - Chief Executive Officer: Well, happy Earth Day to you. We didn't think you’ll have any more to say than that. Michael Dudas - Bear Stearns: Following that's part of the question, do you just give the sense from your major industrial energy customers, a real concern and nervousness about carving globally? Craig L. Martin - Chief Executive Officer: You would have to say that everybody has concern. You would also say that many of our customers are working on strategies to address carbon issues. We have got a half dozen customers who are talking to us about various ideas for carving sequesterization that kind of thing. Certainly to the extent that those things are non-revenue projects, there is a concern that CapEx is going to be driven into things that don't grow the business as oppose to things that do. But I think for the most part our customers are very, very aware of what's happening in the marketplace, what's the challenges are going to be or doing what's right in the sense of what's economically intelligent to minimize their carbon gases and environmentally unfriendly actors [ph] and will continue to do so. I think they are going to try to lobby for an intelligent response from a science and economics point of view to the green problem, but I don't think they are going to do anything foolish one way or the other. I certainly haven't heard anybody say, look if this happens, we are just… we are going to stop doing projects, we are going to stop investing, we are going to let you take us out of business so to speak. I don't think our customers are thinking that way. Michael Dudas - Bear Stearns: But Craig, I guess it will be for Jacobs over the next how many years a bigger percentage of opportunities for business, because you could be helping these customers and spend their money where they really don't want to like you have done back in 80's, and 90's during the US refineries cycle? Craig L. Martin - Chief Executive Officer: Yes, absolutely Michael. We see the whole process of environmental regulations unfortunately for our customers as a nice boon to us. Because we think there is going to continue to be environmentally driven projects for decades and we are a company that will benefit from most projects. Certainly things just like the MSAT 2 with the benzene removal, there is a whole slew of projects out there now that didn't exist 24 months ago. And I think that will continue with respect to green house gases and carbon sequestration and just how do you get the carbon out of the gas before you sequester it. Lost of interesting problems that will result in lots of interesting projects.

Your next question, I am sorry. Craig L. Martin - Chief Executive Officer: Did I make you mad, Michael.

I think he dropped off the line. Craig L. Martin - Chief Executive Officer: I guess he must have.

I'm sorry. Your next question comes from the line of Jamie Cook from Credit Suisse. Please proceed. Jamie Cook - Credit Suisse: Hi, guys. It's a... sorry I just had a quick follow-up. Could you guys possibly give the breakdown regarding your expectations in the infrastructure market between will you expect the market to grow in ’08, '09 and what you guys think you’ll growth due to market share gains? And sort of back to I guess the baseball metaphor and maybe a ballpark range on the expected FERC range. Craig L. Martin - Chief Executive Officer: Really couldn't do that as we sit here today. Haven’t analyzed it… you have to understand the part of the issue here is the market is so big and we are so small. That's what the market does from a growth point of view is not very relevant, so we don't really try to forecast the market growth. Jamie Cook - Credit Suisse: Okay. Craig L. Martin - Chief Executive Officer: There are people out there doing that. But we expect good solid growth certainly in line with our long-term expectations of that business for our sales. Jamie Cook - Credit Suisse: Okay, so it will probably be some kind of combination I guess between market share gains and maybe that even regardless of what the overall market grows. Craig L. Martin - Chief Executive Officer: Well I think for Jacob's to grow in infrastructure is almost a level of what the market does. I mean that's wild exaggeration a sense of it goes away completely, but if the growth rate in infrastructure were 3% and the growth rate in infrastructure were 8%, we'd still be able to grow our business by taking market share. If the growth rate infrastructure were minus 2% we can still grow our business by taking market share. So... and market share is not that hard to get when you are at the size we are and that’s one of the differences I suspect between us and say URS. Jamie Cook - Credit Suisse: Okay. All right. Thanks again guys.

We have a follow-up from Andy Kaplowitz from Lehman Brothers. Please proceed. Andy Kaplowitz - Lehman Brothers: Just one quick question, on the Canadian Oil Sands Craig, maybe what I'm wondering is you guys obviously have a strong presence there, what are the chances of bigger projects coming out of there over the next couple of years for you guys? Craig L. Martin - Chief Executive Officer: Andy, I don't think bigger projects are on anybody screen. The investments up there are going to be huge, but most of these customers got badly burned in the last round of investments by sort of trying to spend $4 billion all at once. And so what we're seeing today is that these projects are being released in a much more of a phased sort of approach and even when their bigger projects they are being broken into pieces and the pieces are being spread around. So the chance again of some sort of Motiva scale project for Jacob's or anyone else on that matter is probably not very high. One of customers has got a $4.5 billion program but it's ten phases. We are currently working on phase III, IV and we expect to be working on V, VI, VII, VIII, XI, and X. But those phases are not committed at this point. And that tends to be more the pattern we are seeing from the customer up there than the let’s go do the $2 billion x, y, z. Andy Kaplowitz - Lehman Brothers: So Craig, you still have a good growth rate out of that business but we shouldn't see some big Motiva type thing. Craig L. Martin - Chief Executive Officer: That's exactly what I am saying. Andy Kaplowitz - Lehman Brothers: Got you. And then maybe just one another quick thing on pharma and bio, it sounds to me like what you are saying is that that business is going to be relatively flattish over the next year or two. Is that a fair assessment or can it weaken a bit for you or what you will be thinking for you in pharma and bio? Craig L. Martin - Chief Executive Officer: Well, I don't think it will weaken materially, but I do think flattish is probably a good description of where we think we are right now. Andy Kaplowitz - Lehman Brothers: Okay. Thank you.

At this time, I am sure you have no further questions. I would like to now turn the call back over to Mr. Craig Martin. Craig L. Martin - Chief Executive Officer: Yes. Thank you all. We are pretty pleased with the results this quarter and we are pretty optimistic about the results going forward. So, we look forward to talking to you in about 90 days and hopefully we will have good news once again. Thank you all.

Ladies and gentlemen thank you for your participation in today's conference. This concludes the presentation. You may now disconnect. Have a wonderful day.