1117414--12/19/2008--PBSJ_CORP

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{stock, price, share}

{cost, contract, operation}

{customer, product, revenue}

{financial, litigation, operation}

{loss, insurance, financial}

{competitive, industry, competition}

{regulation, government, change}

{acquisition, growth, future}

{condition, economic, financial}

{personnel, key, retain}

{investment, property, distribution}

{capital, credit, financial}

{debt, indebtedness, cash}

Certain Risks Related to Our Marketplace and Our Operations We are involved in litigation, legal proceedings and governmental investigations, which could have a material adverse effect on our profitability and financial position. Downturns in the financial markets, like the present financial market downturn, and reduced federal, state and local government budget spending could cause a reduction in our revenues, operating results and liquidity. We operate in a highly competitive market. If we are unable to offer competitive services, our revenues, operating results and liquidity may be adversely affected. Pending or future governmental audits could result in findings which require downward adjustments of our revenue; and, under certain circumstances, could cause us to incur significant liabilities and could impair or disqualify us from obtaining future contracts. We derive a significant portion of our engineering fees from a few clients, and the loss of these clients could have a material adverse impact on our financial performance. Our backlog is subject to cancellation and unexpected adjustments, which could have a negative impact on future revenues, operating results and liquidity. If we are unable to accurately estimate the revenues, costs, time and resources on our contractual commitments, we may incur a lower profit or loss on the contract. If we are unable to retain and recruit highly qualified personnel to fulfill our contractual obligations, our business may be adversely affected. Failure to meet the covenants of our existing revolving credit facility could result in the loss of use of our available line of credit. We may not be successful in growing through acquisitions or integrating effectively and efficiently any businesses and operations we may acquire. Our inability to enforce non-competition agreements with former principals and key management of the businesses we acquire may adversely affect our operating results, cash flows and liquidity. We may be unable to obtain sufficient bonding capacity to support certain service offerings and the need for performance and surety bonds may impact our ability to win projects and reduce our availability under our credit facility. Most of our contracts may be canceled on short notice, so our revenue is not guaranteed. Our subcontractors may fail to satisfy their obligations to us or other parties, or we may be unable to maintain these relationships, either of which may have a material adverse affect our results of operations, cash flows and liquidity. Our financial results are based, in part, upon estimates and assumptions that may differ from actual results. Percentage-of-completion accounting used for our fixed price contracts can result in overstated or understated profits or losses and variations of actual results from our assumptions could reduce our profitability Rising inflation, interest rates and/or construction costs could reduce the demand for our services as well as decrease our profit on our existing contracts, in particular with respect to our fixed price contracts. Our projects may result in liability for faulty engineering services. We are self-insured against many potential liabilities. Certain Risks Related to Owning Our Stock Because no public market exists for our stock, and we are not required to redeem stock held by our shareholders even upon retirement or other termination of employment, the ability of our shareholders to sell their common stock is limited. The ability of shareholders to sell or transfer their common stock is restricted and, even upon such a sale, may not result in immediate receipt of cash consideration. Because we do not intend to pay dividends, our shareholders will benefit from an investment in our common stock only if our stock price appreciates. The value of our stock may be negatively impacted by current and future governmental agency investigations. The limited market and transfer restrictions on our common stock will likely have anti-takeover effects.

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