investor day 2008 - library.corporate-ir.netplanning, design & engineering operations & ......

Investor Day 2008New York | April 22, 2008

Forward-Looking StatementsStatements contained in this presentation that are not historical facts may constitute forward-looking statements, including statements relating to future revenues and revenue growth, future earnings, future cash flows, future operating margins and other financial measures, future business trends, future tax obligations, future contractual backlog, future debt payments, future outstanding shares, future integration of the Washington Group and future economic and industry conditions. The Company believes that its expectations are reasonable and are based on reasonable assumptions. However, such forward-looking statements by their nature involve risks and uncertainties. We caution that a variety of factors could cause the Company’s business and financial results to differ materially from those expressed or implied in the Company’s forward-looking statements. These factors include, but are not limited to: an economic downturn; changes in the Company’s book of business; the Company’s compliance with government contract procurement regulations; the Company’s leveraged position and ability to service its debt; restrictive covenants in the Company’s Credit Facility; the Company’s integration of the Washington Group International, Inc.; the Company’s ability to procure government contracts; the Company’s reliance on government appropriations; the ability of the government to unilaterally terminate the Company’s contracts; the Company’s ability to make accurate estimates and control costs; the Company’s and its partners’ ability to bid on, win, perform and renew contracts and projects; the Company’s dependence on subcontractors and suppliers; customer payment defaults; availability of bonding and insurance; environmental liabilities; liabilities for pending and future litigation; the impact of changes in regulations and laws; a decline in defense spending; industry competition; the Company’s ability to attract and retain key individuals; employee, agent and partner misconduct; risks associated with international operations; business activities in high security risk countries; third party software risks; terrorist and natural disaster risks; the Company’s relationships with its labor unions; the Company’s ability to protect its intellectual property rights; anti-takeover risks and other factors discussed more fully in the Company's Form 10-K for the year ended December 28, 2007, as well as in other reports filed from time to time with the Securities and Exchange Commission. These forward-looking statements represent only the Company’s current intentions, beliefs or expectations, and any forward-looking statement speaks onlyas of the date on which it was made. The Company assumes no obligation to revise or update any forward-looking statements.

Non-GAAP Financial MeasuresOur presentation includes net income and EPS guidance excluding the impact of the amortization of the intangible assets related to the Washington Group International (“WGI”) acquisition, which are financial measures not computed in accordance with generally accepted accounting principles ("GAAP"). We presented these amounts primarily to demonstrate the impact of the WGI acquisition on our projected fiscal year 2008 results as well as reflect additional financial metrics used by the investment community to measure companies in our industry. These non-GAAP measures may be useful to investors seeking to compare the expected performance of our underlying business with the actual performance of our business in prior periods. These non-GAAP measures should not be used as a substitute for financial measures prepared according to GAAP.

Martin KoffelChairman & CEO

Agenda

Time Topic Presenters8:00 – 8:20 am Opening Remarks Martin Koffel8:20 – 8:55 am Federal Sector

Q&ARandy WotringDave Pethick

8:55 – 9:30 am Infrastructure SectorQ&A

Tom Bishop

9:30 – 9:45 am Break

9:45 – 10:20 am Industrial and Commercial SectorQ&A

Gary JandegianRobert Zaist

10:20 – 10:55 am Power SectorQ&A

Tom Zarges Lou Pardi

10:55 – 11:30 am Financial Review / Guidance Tom Hicks11:30 – 12:15 pm General Q&A12:15 – 1:15 pm Lunch

Positioned for Performance

• Top-tier diversified engineering, construction and technical services firm with leading positions in:

• High growth power sector, including resurgent nuclear market

• Expanding oil & gas market

• Strong U.S. DOE and rapidly emerging UK nuclear waste management markets

• Growing military outsourcing and global threat reduction markets

• Long-term, dynamic infrastructure market

• FY 2007 - achieved strong growth across all key marketsand completed landmark acquisition

• $30B book of business provides foundation for growth

• $5.4B in combined company revenues

• 56,000 employees in offices in 30 countries

• Ability to service full project life cycle across key markets

• Very well positioned to benefit from fast growing markets over the next decade, particularly power/nuclear and oil & gas

$0.1 $0.3

$ 0.0

$ 1.0

$ 2.0

$ 3.0

$ 4.0

$ 5.0

$ 6.0

$ 7.0

$ 8.0

$ 9.0

$ 10.0

1990 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

1. Expected revenue (approximate) for FY 2008.

(Rev

enue

s, $

Bn)

Infrastructure/Public Sector

Strategically Compelling, Well Timed Acquisitions

Transportation

$0.4

Commercial / Industrial

$0.8

PM/CM, Transit, Private Sector, International

$1.4

Federal O&M

$2.2 $2.3 $2.4$3.2 $3.4

$3.5 $4.2

$5.4

Washington Group International Construction, Power, DOE

$9.8(1)

FacilityStart-up

Construction &

ConstructionManagement

Decommissioning &

Closure

Significantly Expanded Service Offering

Power Federal

Industrial & Commercial Infrastructure

TechnicalConsulting

Planning, Design &

Engineering

Operations &Maintenance

ProjectDevelopment

ProgramManagement

Acquisition Transformed Business Mix

Power Sector14%Industrial &

Commercial22%

Federal Sector40%Infrastructure

24%

2007 Revenue Mix:$5.4 billion

Acquisition Transformed Business Mix

* Based on midpoint of guidance range for sector revenues.

Federal Sector35%Infrastructure

18%

Power Sector21%

14%22%

24%40%

Expected 2008 Revenues*:$9.8 billion

Industrial &Commercial

26%

Oil & Gas9%

Federal Sector Stronger, More Diversified

• Leading DOE contractor for environmental management and closure

• Leader in chemical threat reduction

• Top Ten O&M Defense Contractor*

• Over 25 federal agency clients, including DOD and DOE

• Demand driven by reconfiguration of U.S. military, increased outsourcing, bundled, multi-service worldwide contracts

• Revenue mix balanced across separately-funded DOD and DOE work

• Less than 10% of revenues related to Middle East operations

35%

* Source: Ranking by Defense News; URS estimates

Enhanced Infrastructure Capabilities• Leading position in long-term growth markets:

• Transportation• Port and harbors• Public facilities• Water and wastewater

• Acquisition added to strong legacy infrastructure engineering business, with expanded construction and O&M capabilities

• Ability to manage through entire project life-cycle, extend duration of services and revenue with existing client base

• Growing demand to rebuild/upgrade vital but aging infrastructure

• Competitive advantages• National delivery system• Long-term client relationships with state and local agencies• Unparalleled experience in project development• Breadth of services

• Planning, Design, and PM/CM• Design-Build• Design-Build-Operate-Maintain

18%

Industrial and Commercial: Complete Range of Services Is Our Competitive Edge

• Major end-markets• Oil & Gas• Mining• Industrial, manufacturing, chemicals

• Clients want fully integrated engineering solutions

• Relationship-based Master Service Agreements with nearly half of Fortune 500

• Demand driven by energy exploration, facility expansion, strong demand for metals and minerals

• URS provides full scope of project delivery

• Engineering• Procurement• Construction• Operations & Maintenance• Contract Mining

26%

http://www.dow.com/

Leading Position In Power Sector

• One of the largest EPC companies in the U.S. power market• One of only two steam generator placement contractors for U.S.

nuclear plants• A leading provider of U.S. FGD retrofits in last ten years• Demand driven by need for power generation, emissions regulations

21%

Every Major Nuclear or Fossil Technology

Every Region of The World

Every Segment ofThe Life CycleLatin America

20,600 MW

North America184,100 MW

Europe8,000 MW

Middle East/Africa2,400 MW

Asia/Pacific37,000 MW

Designed and / or Constructed 250,000 MW WorldwideDesigned and / or Constructed 250,000 MW Worldwide

Long-term Revenue Growth Potential

1 2 3 4 5 6 7 8 9 10

Federal

Infrastructure

Industrial & Commercial

Power

GROWTH UPSIDE

STRONG BASE

Year

TOTAL MARKET GROWTH OPPORTUNITY10%-12%

$30 Billion Book of Business Drives Revenue and Earnings Growth

0

3

6

9

12

15

18

21

24

27

30

33

FY 2004 FY 2005 FY 2006 FY 2007

IDCs DesignationsOption Years

$12.4B$10.1B

$11.5B

$30B

$2.5B

$5.7B

$3.1B

$18.7B($ B

illion

)

Backlog

Federal Sector Overview / DOD and Related Business

Randy WotringPresident, EG&G Division

David Pethick President, Energy & Environment Business Unit

Washington Division

Leading Federal Sector Business

• Client relationships with over 25 agencies, including DOD (all military branches), DOE, NASA, DHS and others

• Leading DOE environmental management contractor

• Demand driven by multi-service bundled worldwide contracts, reconfiguration of U.S. military, increased outsourcing

DOD

35%

• Installations and logistics management

• Flight services and training

• Global threat reduction

• Critical infrastructure

• Mission support

DOE• Site management and

operations

• EPC and operations for complex, high hazard facilities

• Hazardous and nuclear waste management

• Risk, safety, threat analysis

More Diversified Revenue Mix

Estimated Mix of 2008 Federal Sector Revenues: $3.3 - $3.5 billion

• Structure of DOE contracts understates revenue exposure • $2.3 billion “imputed DOE revenue”

Department of Defense

65%

Department of Energy

20%

Other FederalAgencies

15%

8% Directly Related to Military Operations in

Middle East

Enhanced Opportunities with DOD and Other Agencies

• Enhanced scale and global reach better position URS to win large, bundled multi-service DOD contracts

• Addition of construction capability provides new opportunities

• Military construction• Military base realignment and closure (BRAC)

• Increased opportunities under existing contracts with the Air Force, Navy and other military branches

• Heavy Engineering, Repair and Construction (HERC) program for the Air Force

• Air Force Contract Augmentation Program (AFCAP)• Navy Global Contingency Construction Contract (GCCC)

Positive DOD Budget Trends

0

100

200

300

400

500

600

700

800

2005 2006 2007 2008 2009

$ B

illio

ns

Supp. RequestSupp. ApprovedBaseline

DOD ToplineBudget

Significant O&M Spending

-

Consistent O&M Growth

182

214

301282

240

0

50

100

150

200

250

300

350

FY05 FY06 FY07 FY08 FY09

$ B

illio

ns

MILCON4.1%

Revolving Funds0.4%

Family Housing0.6%

RDT&E15.4%

Military Personnel

24.3%

Procurement20.2% O&M

34.9%

501526

601669

685

Source: DOD FY09 Budget Submission; URS Estimates for FY08 and FY09

8.1% CAGR

13.4% CAGR

FY09 O&M Spending Estimated to Increase to FY09 O&M Spending Estimated to Increase to $300B Including $300B Including SupplementalsSupplementals

Enhanced Capabilities to Meet Military Base Realignment and Closure Projects

• U.S. realigning base locations to meet post-Cold War threats• Focus on Eastern Europe, Central Asia, and Africa • Major base realignment and closure (BRAC) program- $20B market;

$10B addressable by URS• New system organized around three tiers of overseas bases

• Retaining some of large existing “main operating bases”• Establishing austere overseas “forward operating sites”• Establishing minimalist “cooperative security locations”

KeyExpeditionary Operations CampaignCONUS BRACEuropeanAsia-Pacific RimAFRICOM

Quadrennial Defense Review (QDR) Determines Military Priorities

• Realign the military to combat a broad range of threats

• Four priority areas:• Defeating terrorist networks• Defending the U.S. homeland• Shaping the choices of countries at strategic

crossroads• Preventing hostile states and non-state actors

from acquiring or using WMD

Key Projects

• Chemical weapons destruction - U.S. Army• Johnson Atoll (Closed)• Tooele, UT• Anniston, AL• Pine Bluff, AR• Umatilla, OR• Pueblo, CO• Bluegrass, KY

• Significant international demilitarization work• Demilitarization project for Defense Threat

Reduction Agency (DTRA) in Europe and former Soviet Union

• Joint range technical services (J-Tech) support- U.S. Air Force

• Test and training ranges in Utah, Nevada, Edwards AFB, CA, and Navy Electronic Combat Range at China Lake, CA

• JT-3 joint venture with Raytheon

Key Projects

• Contract field teams - U.S. Air Force/U.S. Army

• DOD contractor providing maintenance and repair services to military ground and aviation systems worldwide

• Weapons of Mass Destruction Proliferation Prevention Initiative (WMD-PPI)- Defense Threat Reduction Agency (DTRA)

• Installation of nuclear detection portal monitors, communication, and data storage at over 30 points of entry in Eurasia

• Hickam Air Force Base• Design and construction services

supporting C-17• 60,000 sq. ft. corrosion control hangar• 20,000 sq. ft. maintenance shop

Department of Energy BusinessDavid Pethick

President, Energy & Environment Business UnitWashington Division

DOE Business Foundation

• Leading provider of environmental management services to the DOE (37% share)*

• Strong, long-term relationship with DOE and predecessor agencies dates to Manhattan Project• Won 9 of past 11 major DOE project awards pursued

since 2001

• Highly talented team with advanced skills in nuclear, high hazard, classified and regulatory driven environments

• Separate funding sources from other URS federal businesses

* Source: URS current estimates

Leading Capabilities in Three DOE Business Areas

Management Services

Consulting

Engineering, Procurement and Construction

Large, Stable Funding Source

• Expect DOE budget to remain stable for near term

• Current oil prices will drive increased funding for nuclear and renewable energy, and clean coal technology

DOE Budget(as appropriated)

$ Billions

Other DOE

9.1 9.2 9.2

7.2 6.6 6.2

8.7 8.8

7.0 5.6

7.2 107.9 8.3 9.0

2004 2005 2006 2007 2008

22.9 24.2 24.1 24.424.4

National Nuclear Security AdministrationEnvironmental Management

DOE Complex-Wide InvolvementDecontamination, decommissioning, and environmental remediation work

Part of teams that manage Los Alamos, Lawrence Livermore, and Idaho National Laboratories

Lead contractor for West Valley decommissioning and closure project

Lead contractor for management and operations of the Savannah River Site and National Laboratory

Manage deep geological nuclear waste repository

─ Team with Power Business Unit

• Licensing• Services• Operations

Operations/Projects/ConsultingOperations/Projects/Consulting

UK MarketUK Market

Increase National Nuclear Security Administration and

Other DOE Market Share

• Expand to UK by Transporting DOE Model

• Expand high hazard expertise / technology to adjacent government markets

• NASA

Recognized Global Market Leader in High Hazard Risk Reduction

Retain #1 DOE Environmental Market Share

• Hydrogen• Advanced Nuclear

Plants• Advanced Nuclear

Fuel Cycles• Reprocessing

Future EnergyFuture Energy

Nuclear RenaissanceNuclear Renaissance

Diversified Growth Strategy

Management Services Projects

Savannah River SiteAiken, South Carolina

• Largest integrated site in the DOE complex

• 310 square miles encompassing parts of 3 counties

• $1.1B annual budget

• $26.7B since 1989

Waste Isolation Pilot ProjectCarlsbad, New Mexico

• Only licensed deep geological nuclear waste repository in U.S.

• $2.2B facility

• $230M annual budget

• Managing contractor since 1985

Management Services Projects (continued)

Idaho National LaboratoryIdaho

• $500M Annual budget

• National energy and space research

Los Alamos National LaboratoryNew Mexico


• National security research

Lawrence Livermore National LaboratoriesCalifornia


• Prevent spread and use of weapons of mass destruction

Cleanup/Closure Projects

West Valley Demonstration ProjectWest Valley, New York

• Nation’s only commercial nuclear fuel reprocessing center – shutdown in 1972

• $2.4B project • Managing contractor since inception in 1982• First high-level liquid radioactive waste

solidification program completed in U.S.

Hanford Waste Treatment PlantRichland, Washington

• Largest nuclear construction project in U.S.• $12B EPC contract • Plant will treat 53 million gallons of high-level

liquid nuclear waste stored in 177 underground storage tanks

• Builds on West Valley, Savannah River, and Idaho Cleanup Project experience

Cleanup/Closure Projects (continued)

River Corridor Closure ContractHanford Site, Washington

• Cleanup of 210 square mile site• $1.9B project • 7 year contract awarded in March 2005• Placement of deactivated plutonium

production reactors in interim safe storage, clean up of waste sites and burial grounds and demolition of contaminated facilities

Idaho Cleanup ProjectIdaho National Laboratory, Idaho

• Environmental cleanup of 890-square-mile national laboratory in Eastern Idaho

• $2.9B project• 10 year contract awarded in March 2005 • Decommissioning and dismantlement of

215 excess facilities including three reactors, management of spent nuclear fuel, remediation of subsurface disposal area

UK Market Characteristics

• Stable funding• Cost-reimbursable contracts• Predictable earnings and cash flow• Minimal working capital

5.7 5.6 5.54.9

0.0

2.0

4.0

6.0

2007/8 2008/9 2009/10 2010/11

UK Nuclear Decommissioning Authority Budget(as appropriated)

$ in Billions

* Source: Nuclear Decommissioning Authority

Significant UK Opportunity

• UK is in early stages of cleaning up and decommissioning governmental nuclear complexes

• $25B expected to be spent over next 5 years*

• Nuclear decommissioning

• Waste reprocessing

• Remediation

• Facility management

• Preferred bidder announcement for Sellafield Site contract expected in 2008 ($12B budget for initial 5 year term)

• Several additional opportunities expected in next 5 years ranging from $800M to $12.5B (5 – 17 year terms)

* Source: Nuclear Decommissioning Authority

Areas of Strength for URS

UK Management Services Project

Low Level Waste RepositoryUnited Kingdom

• March 2008, URS-led team signed agreement to manage and operate UK’s national low-level-nuclear waste repository and develop national UK low level waste strategy

• $300M over 5 years

• First of series of large contracts to be awarded by the Nuclear Decommissioning Authority

Federal Sector Business Positioned for Growth

• Leading Federal sector business with diversified DOD and DOE revenue mix

• Well positioned to seize long-term growth opportunities in DOD market and maintain/grow DOE market share

• Strategic opportunity to participate in emerging UK market by transporting our DOE business models overseas

Federal SectorQuestions & Answers

Infrastructure SectorTom Bishop

Senior Vice President, URS Division

Leading Infrastructure Business

• Leading position in long-term growth markets• Transportation: highways, transit, airports,

ports and harbors• Public facilities: schools, courthouses, hospitals• Water resources

• Competitive advantages• Client-driven project delivery models:

• Plan, Design and Construct• Design-Build• Design-Build-Operate-Maintain

• National delivery system• Long-term relationships with state/local agencies

• The New URS: full service capability• Project development• Program management• Planning and design• Construction/construction management services• Operations and maintenance• Demolition

20%

Well Diversified End Markets

Transportation

Water Resources

Facilities65%

22%

13%

Estimated Mix of 2008 Infrastructure Sector Revenues: $1.7 – $1.9 Billion

Expanded Service Capabilities

• Program management• Planning and permitting• Environmental consulting• Architectural design• Design and engineering• Construction management• Demolition

“Old” URS

Expanded Service Capabilities

“New” URS• Project development• Procurement• Construction• Design build• Facility start-up• Operations and maintenance

• Program management• Planning and permitting• Environmental consulting• Architectural design• Design and engineering• Construction management• Demolition

FullyFully--Integrated Design/Build/Operate/Maintain CapabilitiesIntegrated Design/Build/Operate/Maintain Capabilities

Full Life Cycle Capabilities

Operations & Maintenance

70%

Construction

Estimated Mix of 2008 Infrastructure Sector Revenues: $1.7 – $1.9 Billion

Engineering Services

25%5%

Capabilities Added Through Washington

Group acquisition

National Delivery System

Nationwide operations through 300+ offices

Long-Term Need for Infrastructure Investment is Clear

• $30-40B of additional annual highway investment required

• More than 25% of nation’s bridges rated structurally deficient

• $200B in investments needed in water over next 20 years

Aging Infrastructure*

Population Growth/Migration

Regulations/ Compliance

Technical Innovations

Public Awareness

• Regional population growth driving need for new schools, hospitals, water, transportation infrastructure (Texas, Nevada, Arizona)

• Aging boomer generation requiring additional health care facilities

• Clean Water and Safe Drinking Water Acts

• Smaller class sizes mandated by the No Child Left Behind Act

• Technology in classrooms driving renovation of facilities

• Medical advances require retrofitting of medial centers and hospitals

• Mass transit increased 21% from 1993 to 2002, faster than any other mode of transport

• Water quality issues and shortages focusing attention on infrastructure needs

• Political Initiatives (Coalition for Building America’s Future, National Infrastructure Bank Act)

*Source: American Society of Civil Engineers; Urban Land Institute, May 2007

Increasing Use of Bond Financing

0

50

100

150

200

250

300

350

400

'01 '02 '03 '04 '05 '06 '07 '08E

General Fund Revenues -Top URS States ($B)

Total Annual Bond Issuance -All States ($B)

Source for Graphs: Thomson Financial, National Association of State Budget Officers and individual state estimates for 2008

150

200

250

300

350

400

450

500

'01 '02 '03 '04 '05 '06 '07

Funding Environment Estimated to Support MidFunding Environment Estimated to Support Mid--to Highto High--Single Single Digit Growth in URS Infrastructure Revenues in 2008 Digit Growth in URS Infrastructure Revenues in 2008

Bond Sales Accelerating Investments

2002 2007

General Purpose

Utilities

Transportation

Public Facilities

Housing

Environmental Facilities

Education

$430 B

$360 B

Bond Sales by Major Categories Top Bond Issuing States

1. California

2. Texas

3. New York

4. Florida

5. Pennsylvania

6. Illinois

7. Ohio

8. New Jersey

9. Massachusetts

10. Georgia

Source: Thomson Financial

Leader in Transportation Markets

Representative Markets:• Highways, bridges, tunnels

• Rail systems: commuter, heavy, light, freight and high speed

• Airport terminals, runways, towers

• Ports and harbors

• Other transportation structures: stations, parking, maintenance facilities

Long-Term Funding Sources in Place

• Federal funding for highway, transit and airport projects

• SAFETEA-LU: $286.5B over FY2004 – FY2009 (up 31% from TEA-21 bill)

• Vision 100-Century of Aviation Re-authorization Act

• State and local discretionary and capital budgets

• Funding delivery accelerated through increased use of bonds

• Public Private Partnerships (PPPs)

General Fund

Bonds

State Taxes/User

Fees

Federal Funds

Surface Transportation: Funding Sources/Methods*

*Source: Represents current estimated funding sources for capital spending at state level

Hudson-Bergen Light Rail Transit

• Design-Build-Operate-Maintain (DBOM) contract $1.4B light rail system in Northern New Jersey

• Largest DBOM transit project in U.S.

• 20 rail miles

• Transports more than 20,000 commuters each day with 98-99% reliability

Significant Player in Facilities Markets

Representative Markets:

• Health care facilities

• Education: K-14 and universities

• Judicial and corrections facilities

• Public use buildings

• Government office buildings

• Transportation facility structures

General Fund

Federal FundsOther

State/Local Funds

Bonds

Educational Facilities: Funding Sources/Methods*

Bonds are Major Funding Source for Facilities Projects

• Majority of funding from bond issuances

• Local real estate taxes

• State general funding (limited to a few states)

• Private endowments

• Funding delivery accelerated through use of bonds

*Source: Represents current estimated funding sources for capital expenditure on K-14 and higher education facilities

England Airpark and Community

• Transformation of former England Air Force Base into a business and industrial campus, including a commercial airport

• Decommissioning and closure

• Planning, design and engineering

• Highly successful base realignment and closure project (BRAC) in Rapides Parish, Louisiana

Leader in Water / Wastewater Market

Representative Markets:• Dams and reservoirs• Water treatment• Storm and ground water management• Wastewater collection and treatment• Flood control• Coastal erosion• Hydropower facilities• Levees

Significant Majority of Funding from Bonds and User Fees

• Increasing user fees

• Accelerated funding delivery through use of bonds

• Federal funding for waterways, flood control and wetlands under Water Resources Development Act of 2007 (WRDA)

• $23B authorization

Federal Funds

Other State Programs

User Fees

Bonds

Water/Wastewater Funding*

*Source: Represents current estimated funding sources for capital expenditure in URS water/wastewater markets

Olmsted Dam

• Construction of 2,700-foot-long concrete dam across Ohio River near Olmsted, IL

• Addition of dam and locks to maintain navigable depths for shipping routes

• $865M construction cost

• Technically innovative construction program using “in-the-wet”, or underwater, method

The New URS Can Deliver Infrastructure

URS Division Washington Division

The New URS

• Project development

• Detailed engineering

• Procurement

• Construction

• Design build

• Facility start-up

• Operations and maintenance

• Program management

• Planning and permitting

• Environmental consulting

• Architectural and engineering design

• Construction management

• Demolition

• National footprint of +300 offices

• Relationships with local decision makers

• Early entry into projects as program managers and planners

• Full Scope of project Services

• Responds to client trends:

• One-stop-shop

• Public / Private / Partnerships

• Outsourcing of O&M

• Improved marketknowledge, including upcoming projects

• Improved intelligence of project issues

• Ability to selectively pursue optimal projects

Stronger Combined Service Offering to Capture LongerStronger Combined Service Offering to Capture Longer--Term GrowthTerm Growth

Infrastructure SectorQuestions & Answers

Industrial & Commercial SectorGary Jandegian

President, URS Division

Robert ZaistSenior Executive Vice President

Washington Division

Strongly Positioned in Industrialand Commercial Sector

• Relationship based model• Master Service Agreements with nearly half

of Fortune 500• Clients seeking fully integrated engineering

and construction solutions for ongoing operations and capital projects

• URS provides services for full project life cycle• Consulting• Planning, siting, permitting, environmental studies• Engineering• Procurement• Construction• Project and program management• Operations & maintenance• Decommissioning, demolition and asset recovery

• Major end-markets• Industrial and manufacturing• Mining• Oil & Gas

26%

http://www.dow.com/

Focused on Three Growth Markets

• Oil & Gas EPC and EPCM• Gas monetization• Heavy maintenance• Refining• Pipelines• Asset recovery• Environmental compliance

• Aerospace & electronics • Automotive• Food & beverage• Pulp & paper• Metals• Chemicals• Pharmaceuticals

• Base & precious metals• Energy minerals• Industrial minerals

Industrial & Manufacturing Mining Oil & Gas

Balanced Revenue Mix

Oil & Gas

35%

Industrial & Manufacturing

50%

Mining

15%

Estimated Mix of 2008 Industrial and Commercial Revenues: $2.4 – $2.6 Billion

• Expected 2008 Oil & Gas revenues of approximately $875M

• Expected 2008 Mining revenues of approximately $375M

Expanded Service Offering – Old URS

Environmental

Consulting

Construct

ionFaci

lity Star

t-up

Procurement

Engineering & Desi

gn

Process E

ngineering

O&M and

Facility

Management

Expanded Service Offering – New URS

Environmental

Consulting

Engineering & Desi

gn

Construct

ionFaci

lity Star

t-up

O&M and

Facility

Management

Process E

ngineering

Procurement

Fully Integrated Engineering, Construction and Operations & Maintenance Services

Revenues Across Project Life Cycle

Engineering

50%Construction

30%

Operations & Maintenance

20%

Estimated Mix of 2008 Industrial and Commercial Revenues:$2.4 – $2.6 Billion

Holcim Cement Project

Client: Holcim CementLocation: MissouriService: ConstructionContract Value: $500M+Duration: 2007 – 2009Scope:• Construction management

and general contractor services

Caterpillar Global ServicesGlobal Facilities Management Alliance

Client: CaterpillarLocation: 40 sites on four continentsServices: Bundled FMContract Value: $242MDuration: 2006 – 2011Scope:• Facilities management services for over

100 million sq. ft. of industrial space Services include:• Program management; building and

production maintenance; utilities and security; mail and shipping; hazardous material removal; and water/wastewater treatment

Servicing a Range of Mining Projects

• Base and Precious Metals• Industrial Minerals• Coal / Lignite• Uranium

Clients Include:

TechnicalConsulting

ProjectDevelopment

Engineering& Design

ProjectManagement Construction

FacilityStart-up

Operations&

Management

Reclamation& Closure

Pinto Valley Copper Mine Restart

Client: BPH Copper, Inc. (Subsidiary of BHP Billiton Ltd.)

Location: ArizonaProduct: CopperContract Value: $310MProduction: 33 million tonnes per

year of ore Duration: 2007-2012Scope:• Contracting mining services including

drilling and blasting, and loading and hauling of ore, leach and waste

Oil & Gas MarketRobert Zaist

Senior Executive Vice President, Washington Division

Well Positioned In Oil & Gas Market

• URS provides complete life cycle of services – planning, environmental, engineering, procurement, constructionand O&M

• Old URS business was almost entirely downstream – new URS business portfolio balanced between upstream and downstream

• $350B global market• Early project involvement transitioning to full scale projects

FeasibilityStudies

Environmental Services

Engineering & Design Procurement Construction Operations &

Management

Combination of URS Division’s MSA Relationships and Washington Division’s Major Strength in Programs and Broader Service Offering

Provide Company with a Unique Competitive Position

Opportunities Across Oil & Gas Process

• Oil Sands

• Oil and Gas

SulfurRecovery

Gas Delivery

Fuel Distribution

Petrochemicals

ChemicalsOil Sands Mining

Oil Production

Gas

Gas Monetization

Current Focus Area Strategic Growth Area Future Potential Areas

OilExtraction

and Upgrading

RefiningBitumen

Sand Production

MidstreamProcessing

LiquefiedNatural Gas

(LNG)

LNGTerminal

Gas-to-Liquid(GTL)

Gas-Oil Separation

Field Processing

Global Reach

Confidential ClientPolymers Project

Louisiana

Upstream GasColorado

Ohio Refinery

Sulfur HandlingQatar

SRU/TGCUOntario

Oil SandsAlberta

New JerseyRefining

MethanolEquatorial Guinea



Sulfur HandlingAbu Dhabi GOSP

Abu Dhabi

Upstream GasSakhalin Island

OfficesProjects

Strong Energy Demand Growth

Source: Engineering and Construction Contracting Association 38th Annual Engineering Construction Contracting Conference

Energy by Type World Oil and Gas Demand

50

0

350

300

250

200

150

100

1980 20302020201020001990

MBDOE

Oil

Gas

Coal

Other

50

0

350

300

250

200

150

100

1980 20302020201020001990

MBDOE

Required NewProduction

Producing FieldsDecline

~4-6% per year

Existing IndustryProduction

Industry Outlook

Significant Opportunities in Oil Sands

• Recoverable reserves • 175 billion barrels

• Capital investment • $14B in 2006

• $16B in 2007

• Major producers announce CAPEX expansions• Facilities able to produce

3.0 - 3.4 million barrels per day by 2015

Source: CAPP; “Canadian Oil and Gas Industry Outlook: Opportunities and Challenges -2007,” January 2008

Favorable Market Trends

• Upstream oil & gas development• Oil & gas demand growth projected to remain robust

and support investment• Industry collaboration and equitable risk profile• Staged execution – Pre-FEED, FEED, EPC

• Downstream refining & petrochemicals• Refining investment driven by crude mix changes• Petrochemical facility expansion driven by product demand• Staged execution, FEED to EPC

• Increased investment in other energy sources• Oil sands• Gas• Coal gasification

ExxonMobilPiceance Basin Program

Client: ExxonMobil

Location: Piceance Valley, NW Colorado

Capacity:• 200 MMSCFD natural gas production• 20,000 bbl produced water• 17,000 bbl gas condensates

Scope:• FEED, engineering, procurement,

construction management

Project Features:• Gas, water, and condensate separation and

administrative facilities at three locations• Well pad production/separation facilities;

nine wells per pad• 17-mile gathering pipeline truck system• Administration complex

ConocoPhillipsWood River Construction and O&M

Client: ConocoPhillips

Location: Roxana, Illinois

Scope: Construction and O&M services

Projects:• Sulfur block unit and CCU-3 restart

Project Features:• 322,000 bpd crude oil refinery, largest

in ConocoPhillips system• Construction projects are part of the Coker

and Refinery Expansion (CORE) Program• Supplemental maintenance, turnarounds,

and capital projects support since 1992• Award-winning safety program • Approximately 320,000 work

hours annually

QatarGas IICommon Sulfur Project

Client: QatarGas

Location: Ras Laffan, Qatar

Project:• QatarGas II• Common Sulfur Project

Capacity: 12,000 LTPD

Scope:• Engineering, procurement, construction

Project Features:• 12,000 tons/day liquid sulfur gathering• Molten sulfur collected from 11 gas plants;

34 kilometers of electrically-heated pipelines • Solidification, granulation, storage and shipping• Achieved 5,000,000 safe work hours to date

Combined CapabilitiesWashington URS New URS

Market Focus

• Upstream – Onshore processing• Midstream – Gas storage, NGL

fractionation, LNG• Downstream – Sour water

treatment• Other – Chemicals, ethanol, coal

gasification studies, oil sands

• Midstream – Pipelines, NGL recovery, fractionation and storage

• Downstream – Refining & chemicals

• Other – Industrial wastewater, environmental permitting, assessments (non-P&EG) and control

• Fully integrated upstream capability

• Broad midstream capabilities• Upstream field development

and operational support• Downstream facilities

upgrades and expansions

• Full life-cycle services

• Full project range capabilities

• Expanded global reach

• Broad offerings to the oil, gas and chemicals industries

Services • FEED• EPC, EPCM, C• Maintenance

• Permitting (non-P&EG)• FEED• EPCM

Project Size

• Range – Mid-size to large • Range – Small to mid-size

Geography • U.S. • Canada• Middle East

• U.S. and selected international locations

Sweet Spots

• Gas processing• Sulfur recovery/handling• Gasification• EPC project delivery• Union/non-union construction

• Liquids fractionation• Select refining/chemical processes • Industrial wastewater treatment• Emissions control• EP project delivery• Small project alliances

Industrial & Commercial SectorQuestions & Answers

Power Sector OverviewTom Zarges

President, Washington Division

Lou PardiPresident, Power Business Unit

Washington Division

Leading Power Sector Business

• Demand from increasing power generation needs, emissions regulations• One of the largest EPC companies in the U.S. power market• One of two steam generator replacement contractors for U.S. nuclear plants• Leading provider of U.S. FGD retrofits in last ten years

21%

Every Major Nuclear or Fossil Technology

Every Region of the World

Every Segment ofthe Life CycleLatin America

20,600 MW

North America184,100 MW

Europe8,000 MW

Middle East/Africa2,400 MW

Asia/Pacific37,000 MW

Designed and/or Constructed 250,000 MW WorldwideDesigned and/or Constructed 250,000 MW Worldwide

Unmatched Experience

• One of the largest power generation contractors, with over 250,000 MW installed capacity worldwide

• Full in-house service capability –from conceptual engineering through turnkey construction

• More than 100 years of power generation experience

• Long-term client relationships through alliances, services and outsourcing agreements (DTE, Reliant, TVA, NRG)

Strong Presence in Fossil and Nuclear Power

Fossil Fuel

85%

Nuclear

15%

Fossil Fuel markets • Coal• Natural gas• Retrofits

Nuclear markets • Steam generator

replacement• New nuclear

Note: Percentages represent approximate proportion of expected 2008 Power Sector revenues

Estimated Mix of 2008 Power Sector Revenue: $2.0 – $2.2 Billion

Client Base of Leading Energy Companies

Representative Clients

Allegheny Energy

Alliant Energy

Constellation Energy

Detroit Edison

Suncor Energy

Tennessee Valley Authority

We Energies

Fossil NuclearRepresentative Clients

Entergy

Exelon

Florida Power & Light

General Electric - Hitachi

Louisiana Energy Services

Pacific Gas & Electric

Public Service Enterprise Group

New Generation• Coal-fired power plants

• Conventional• Circulating fluidized bed• Gasification (IGCC)

• Combustion turbine plants• Combined cycle• Simple cycle

• Nuclear• Boiling water• Pressurized water

• 30% of Power revenue

• Clean air retrofits• Sulfur oxides, nitrous

oxides, particulates, mercury

• Maintenance• Component replacement

• Steam generators• Pressurizers• Reactor vessel heads

• 60% of Power revenue

• Fossil and nuclear• Transmission and

distribution• Studies• Licensing• Consulting• Engineering• Construction management• Utility management• Outsourcing / seconding• 10% of Power revenue

Serving a Broad Range of Markets

Modification Services Technical Services

Comprehensive Service Offering

Planning and Consulting• General planning• Siting and licensing• Environmental permitting

Grassroots Development• Engineering and construction, startup• Transmission and distribution

Operations• Expansion, retrofit and modification• Operations and maintenance

Closure• Decontamination / decommissioning

FacilityStart-up

Construction &

ConstructionManagement

Decommissioning &

Closure

TechnicalConsulting

Planning, Design &

Engineering

Operations &Maintenance

ProjectDevelopment

ProgramManagement

URS Offers Broadest Range of Services

Fossil New Generation

Nuclear New Generation

Nuclear Steam

Generator Replacement

Air Quality Control Systems

Transmission &

Distribution

BECHTEL

FLUOR

SHAW

BLACK & VEATCH

QUANTASERVICES

Fossil Power Opportunities

Key Market Drivers and Trends• New nuclear plants in U.S. will not come online until at least 2014-2015 • Natural gas-fired plants will fill gap due to short schedules and low CAPEX• Renewable energy will provide only modest competition for investment dollars• Clean Air Interstate/Clean Air Mercury rules will continue to drive air quality

investments until 2020; second wave may be driven by CO2 legislation

0

2000

4000

6000

8000

10000

12000

2006 2007 2008 2009 2010

Combined Cycle Gas

Coal

Simple Cycle Gas

U.S. Fossil Capacity Additions by Technology Type (MW)*

*Source: Platts Power Outlook Research Service, February 2008

Strategic Growth Priorities

• Customer Base• Maintain U.S. focus; expand overseas around existing platforms• Relationship-based, focused on repeat business

• Roles• Bundled services as EPC contractor, program manager• Professional services

• Markets• New fossil and nuclear generation• Major modifications (clean air retrofits, steam generator replacements)• Transmission, distribution, substations, SCADA• Technological neutrality

• Risk Management• Maintain appropriate risk/reward balance

• Sustain strong market position in major nuclear and fossil retrofits• Pursue natural gas and new-generation coal projects• URS is positioned for nuclear renaissance

Majority of URS Projects are Target Price

Spectrum of options• The risk extremes are “turnkey” and “cost plus”• The cost extremes are “turnkey” and “target price”• The control extremes are “turnkey” and “cost plus”• Owner chooses optimal cost/risk/control allocation

Owner’s Contingency

$

Risk Allocation

Cost Plus

minmax

Owner’s RiskContractor’s Risk

maxmin

Target PriceFirm Fixed PriceThrough Mechanical Completion

Base Project Cost

Project TIC

Contractor’sContingency & Margin

Turnkey

We EnergiesPort Washington Generating Station

Location: Port Washington, WisconsinMajor Equipment:• 4 GE FR7FA combustion turbines• 4 Alstom HRSGs• 2 GE steam turbines• DCS – Emerson Ovations SystemScope:• Engineering, procurement and construction - target price Completion Date: Mid-2008Unique Features/Challenges:• OSHA VPP Construction Star status (highest level available)• New plant is located on existing coal fired power station• SCR for NOX Control• Existing circulating water tunnel was adapted for new plantAwards:• Power Engineering’s Best Gas-Fired Project, 2005

Salt River ProjectSpringerville Unit 4 Coal-Fired Power Plant

Location: Springerville, ArizonaMajor Equipment:• Boiler (Foster Wheeler)• Steam Turbine Generator (Mitsubishi) • SCR (Alstom)• Dry FGD System (Alstom)• Baghouse (Alstom)Scope:• Engineering, design, procurement support

and construction managementCompletion Date: December 2009Unique Features/Challenges:• Tight site due to existing Unit 3, railroad tracks

and existing U/G Systems• Short engineering and construction schedule

Tennessee Valley AuthorityFlue Gas Desulfurization (FGD) System

Location: Paradise, Kentucky, and other sitesScope:• Engineering, design, procurement and

construction/construction managementUnique Features/Challenges:

• URS-MHI (Mitsubishi Heavy Industries) joint venture for FGD projects

• $1.5B 10-year FGD scrubber program(since 2002)

• In 2007, completed the design and installation of scrubber for TVA’s 1,050 MW plant in Paradise, KY – among the largest FGD scrubber projects in the world

Nuclear MarketLou Pardi

President, Power Business UnitWashington Division

A Rich Nuclear Power Heritage

Extensive U.S. Nuclear Experience

Diablo Canyon

IndianPoint

Fort Calhoun

Comanche Peak

Waterford St.Lucie

Crystal River

Robinson

Brunswick

Harris 1

J.A. FitzpatrickSeabrook

Engineer of Record

Watts Bar

Millstone

Vermont Yankee

(Puerto Rico)Bonus

Constructor of Record

Dresden

South Texas

Quad Cities

Three Mile Island

Ft. St. Vrain

West Valley

Hanford River

Corridor

Idaho Falls Laboratory

Mound Facility

Savannah River

Rocky Flats

INEL (M&O)

Oak Ridge

WIPP

DOE Projects

Salem

Calvert Cliffs

Wolf Creek

Byron

Palo Verde

Connecticut Yankee

Browns Ferry

Callaway

ClintonBraidwood

LaSalle

Prairie IslandPoint Beach

PalisadesFermiFermi

LimerickPeach Bottom

Nine MilePoint

Oconee

Engineering Modifications

Susque-hanna

Columbia

Hatch

Vogtle

PerryPerry

Maintenance Services

Arkansas Nuclear One

Shoreham

Quality Programs

Pilgrim

Princeton – PA Accelerator

McGuire Catawba

River Bend

Grand Gulf

San Onofre

Zion

U.S. SGR/RVCH Projects

DCCook

Decommissioning

ShippingportWaltz Mill

Worldwide Nuclear Experience

EngineeringConstruction

Angra 1

Laguna Verde 1Laguna Verde 2

Chin Shan 1Chin Shan 2

Torai 1Tsuruga 1Mihama 1Ohi 1Ohi 2

Almaraz 1Almaraz 2Cofrentes

Santa Marid de GaronaJose Cabera

Ringhals 2

Beznau 1Beznau 2

Lungmen 1Lungmen 2

Nuclear Fuel Market Drivers

• Solution to greenhouse gas emissions• Rising fuel prices• Provides fuel diversity• Energy Policy Act stimulation

• Production tax credit of $18/MWh for the first 6,000MW (first 8 years online)• 80 percent loan guarantees• Standby support for delays in the first 6 plants (due to process breakdown or litigation)• Price Anderson Act renewal to plants online before 2025

• Technology improvements; one-stop licensing; spent fuel storage and reprocessing

U.S. Nuclear Power Status: Uprate Approvals and New Plant Applications*

Power uprate approvals**

Applications for new plants 0

2

4

6

8

10

12

14

16

2004 2005 2006 2007 2008 2009 2010

ExpectedActual

*Source: Nuclear Regulatory Commission, April, 2008 **Assumes average 1 year approval time for anticipated uprate applications

Best CaseMost LikelyWorst Case

Key*

7

0

10

2006 - 2016

Emerging Markets Keys to success …Certainty—of technology, cost & schedule

Capacity—resource & supply chain to deliver

Credibility—experienced delivery team

Commitment—to industry for the long term

Keys to success …Certainty—of technology, cost & schedule

Capacity—resource & supply chain to deliver

Credibility—experienced delivery team

Commitment—to industry for the long term

Projected Nuclear New Build

Estimated New Plant Orders by 2016 Estimated New Plant Orders by 2016 ——Scenarios Worth $35 to $150B Over Next 10 YearsScenarios Worth $35 to $150B Over Next 10 Years

106

16

2006 - 2016

Europe

93

16

2006 - 2016

AIM

23

42

10

2006 - 2016

Asia

North America

157

24

2006 - 2016

*Source: GE

Nuclear Power Plants – The New Way

• Advanced designs are pre-licensed

• Engineering is largely completed before construction begins

• More regulatory certainty

• Increased collaboration among project participants

• Utilize information technology

• New techniques, such as open-top construction and composite structuresConstruction Cycle Shorter Construction Cycle Shorter –– Verification and Verification and Configuration Management are Integrated into DesignConfiguration Management are Integrated into Design

Well Positioned for Nuclear Renaissance

• Advancing construction management techniques• Louisiana Energy Services, National Enrichment Facility

• Real time construction on a multi-billion dollar facility• Steam Generation Team (SGT) joint venture with AREVA

• One of only two major component replacement contractors in the U.S.

• Alignment with technology suppliers• GE - Economic Simplified Boiling Water Reactor (ESBWR) • Mitsubishi – Advanced Pressurized Water Reactor (APWR)• AREVA – SGT joint venture

• Expanding international customer base through project management work in China

• New Nuclear Center near Charlotte, North Carolina

AmerenUECallaway Nuclear Power Plant Unit 1

Location: Fulton, Missouri

Major Equipment:• Standardized Nuclear Unit Power Plant System• Westinghouse water reactor• General Electric turbine generator

Scope:• Engineering, PM, licensing, training,

and construction to support steam generator replacement

Completion Date: November 2005

Unique Features/Challenges:• Work completed in record time: 63 days, 13 hours

(set 3 world records for a Westinghouse system)• Successfully installed large components ― each generator

is 68 feet tall, 17 feet in diameter at widest part and weighs 372 tons ― in complex environment

Awards/Records:• Platts Global Energy Award; ENR/McGraw-Hill Construction

Energy Project of Year, 2006

Louisiana Energy ServicesNational Enrichment Facility

Location: Eunice, New Mexico

Scope:• Construction, CM and procurement

Completion Date: August 2011

Unique features/challenges:• First new nuclear construction

in last 25 years• Largest grassroots new nuclear

construction project in the U.S. today• First new nuclear facility in U.S. licensed

under the NRC’s one-step process

Power Sector is Positioned for Growth

• Well positioned to benefit from high-growth market, including nuclear renaissance

• Significantly enhanced capabilities with the addition of the Washington Division

• Unmatched experience, serving a broad range of markets

• Poised to maintain leading market position, while expanding overseas business

Power SectorQuestions & Answers

Financial OverviewTom Hicks

Chief Financial Officer

History of Strong Earnings Growth and Cash Flow

Net Income

($ M

)

Estimated and EPS excludes non-cash charge related to amortization of purchased intangibles from the Washington Group acquisition. See reconciliation table at the end of presentation for a reconciliation of non-GAAP financial measures to GAAP.

*Expected EPS for 2008 is $2.61 - $2.73

0

50

100

150

200

'04 '05 '06 '0750

100

150

200

250

300

350

'04 '05 '06 '07

Cash Flow

($ M

)

Operating Cash Flow

Earnings Per Share

1.00

1.50

2.00

2.50

3.00

'04 '05 '06 '07 '08*(Estimated)

2004-2007 CAGR of 15.4% 2004-2007 CAGR of 28.9% 2004-2007 Op Cash FlowCAGR of 48.4%

Attractive Operating and Financial Profile

• Diversified revenue base, with over 12,000 contracts• Focused on long-term customer relationships• Approximately 80% of 2007 revenues from repeat customers

• Very limited exposure to lump-sum fixed-price contracts

• Low CAPEX needed to support growth (~$100M in 2008, less than D&A)

• High percentage of net income converts to operating cash flow

• NOLs and tax benefit of intangible amortization from Washington Group acquisition should largely offset federal taxes for next two years

Very Limited Fixed-Price Contract Exposure

Cost Plus (40 - 50%)

Time & Materials (20 - 25%)

Target Cost, Unit Delivery & Other (20 – 25%)

Fixed-Price (10 - 15%)

Estimated 2008 Revenue Base

Fixed Price Only 10 Fixed Price Only 10 -- 15% of Total Outstanding Contract Value15% of Total Outstanding Contract Value

Balanced Revenue Mix & Operating Margins

URS33%

EG&G22%

WD45%

Estimated 2008 Revenues

Estimated Operating Margins*• URS Division 6-8%• EG&G Division 5-7%• Washington Division 4-6%

*Estimated long-term average

Expected 2008 Revenue Breakdown

$2.5B$1.8B$2.1B$3.4BTotal

1.40.41.90.7WD

2.2EG&G

1.11.40.20.5URS

Industrial & CommercialInfrastructurePowerFederal

$3.2B

Total

$2.2B

$4.4B

$9.8B

$30 Billion Book of Business Drives Growth

0

3

6

9

12

15

18

21

24

27

30

33

FY 2004 FY 2005 FY 2006 FY 2007

IDCs DesignationsOption Years

$12.4B$10.1B

$11.5B

$30B

$2.5B

$5.7B

$3.1B

$18.7B

($ B

illio

n)

Backlog

Approximately 65% of Expected 2008 Approximately 65% of Expected 2008 Revenue is in Year End 2007 BacklogRevenue is in Year End 2007 Backlog

Washington Group Integration On-Plan

• Expected annual expense savings of $50-55M already identified• $50-55M annual run rate achieved as of April 1, 2008• Expect to capture approx. 90% of savings in calendar 2008• Expect to identify and capture additional expense synergies

in 2009

• Businesses have been realigned

• Corporate offices integrated – all redundant positions eliminated

• Retained all key operating staff

Long-Term Margin Improvement Opportunities

• Maintain and expand contract margins

• Operational efficiencies

• Reduction of corporate G&A as percentage of revenues

• Lower interest expense through debt reduction

Demonstrated Capacity to Pay Down Debt

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

Q4 '02 Q4 '03 Q4 '04 Q4 '05 Q4 '06 Q4 '07

Total Debt / Total Capital

Debt from acquisition of

EG&G

Debt from acquisition of

Washington Group

Capital Structure Approach

• Goal to maintain prudent debt level given our business portfolio

• Debt/total capitalization ratio of 25%-30% is optimal, given our business portfolio and long-term outlook

• No current plan, or need, to issue equity to reduce debt or execute business plan

2008 Guidance

($M) 2007 2008E

Net Income $132.2 $187-197

Net Income (Excluding amortization)* $139.3 $218-228

Average Shares O/S (M) 56.3 83.5

EPS (GAAP) $2.35 $2.24-2.36

EPS (Excluding intangible amortization)* $2.42 $2.61-2.73

*See reconciliation table at the end of presentation for a reconciliation of non-GAAP financial measures to GAAP.

Summary

• Strong track record of earnings growth and cash flow

• Current business mix offers balance and attractive long-term growth opportunities

• Washington Group integration is on plan

• There are opportunities for long-term margin improvement

• Reaffirming guidance for 2008

• Continued deleveraging in 2008

Reconciliation Table

($M) 2007 2008Net Income $132.2 $187-$197

Amortization of Intangible Assets $7.1 $31

EPS (GAAP) $2.35 $2.24-$2.36

EPS Impact of Amortization of Intangible Assets 0.07 $0.37

EPS (Excluding Amortization of Intangible Assets) $2.42 $2.61-$2.73

Net Income Excluding Amortization of Intangible Assets $139.3 $218-$228

Average Diluted Shares Outstanding 56.3 83.5

Our presentation includes net income and EPS guidance excluding the impact of the amortization of the intangible assets related to the Washington Group International (“WGI”) acquisition, which are financial measures not computed in accordance with generally accepted accounting principles ("GAAP"). We presented these amounts primarily to demonstrate the impact of the WGI acquisition on our projected fiscal year 2008 results as well as reflect additional financial metrics used by the investment community to measure companies in our industry. These non-GAAP measures may be useful to investors seeking to compare the expected performance of our underlying business with the actual performance of our business in prior periods. These non-GAAP measures should not be used as a substitute for financial measures prepared according to GAAP.

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