URS Corporation Reports Fiscal Year 2009 Results

URS Corporation (NYSE: URS) today reported its financial results for the fiscal year ended January 1, 2010. Revenues were $9.25 billion compared to $10.09 billion in fiscal 2008. URS’ net income for fiscal 2009 was $269.1 million, a 22.4% increase from net income of $219.8 million in fiscal 2008, and diluted earnings per share ("EPS”) was $3.29 for fiscal 2009, a 27.0% increase from diluted EPS of $2.59 in 2008. For the purpose of calculating diluted EPS, weighted-average shares outstanding were 81.8 million for the full year of fiscal 2009.

The results for the year ended January 1, 2010 include a net after-tax gain of $30.6 million, or $0.37 per share, from the sale of URS’ equity interest in MIBRAG mbH ("MIBRAG”), a German mining and power business, and an after-tax, non-cash charge of $19.6 million, or $0.24 per share, for the write-down of an intangible asset related to the discontinuation of the "Washington” trade name and the transition to a single URS name, which the Company announced on December 22, 2009. Excluding these items, the Company’s diluted EPS for the year would have been $3.16, a 22.0% increase from fiscal 2008. A table reconciling diluted EPS for the fourth quarter and fiscal year 2009, excluding these items, to GAAP EPS is attached to this release.

The Company’s backlog as of January 1, 2010 was $17.3 billion, up slightly when compared to January 2, 2009. The Company’s book of business at the end of the year was $29.4 billion, up slightly from $29.1 billion at the end of 2008.

Commenting on the Company’s financial results, Martin M. Koffel, Chairman and Chief Executive Officer, stated, "URS performed well in 2009, delivering its fifth consecutive year of EPS growth. The strength of our diversified business mix enabled us to deliver solid results despite difficult economic conditions. The growth in our federal sector work, combined with the stability of our infrastructure business, which generated revenues near to the record levels achieved in 2008, offset the current weakness in our power and industrial and commercial sectors due to the economic downturn.”

Mr. Koffel continued: "We are well positioned to deliver growth in 2010, driven by the continued strength of our federal business and a recovery in the infrastructure sector. Our positive outlook is supported by a solid book of business. Longer-term, we believe URS will benefit from increased capital spending by its private sector clients in the power and industrial and commercial sectors when the economy recovers and utilities invest in new power facilities, including the next generation of nuclear plants.”

Fourth Quarter 2009 Results

For the fourth quarter of fiscal 2009, the Company reported revenues of $2.11 billion, compared to revenues of $2.71 billion in the fourth quarter of 2008. URS’ net income for the fourth quarter of fiscal 2009 was $33.8 million, or $0.41 on a diluted, per share basis, compared with net income of $45.2 million, and diluted EPS of $0.54, in the fourth quarter of fiscal 2008. Excluding the non-cash charge for the write-down of an intangible asset related to the discontinuation of the "Washington” trade name, the Company’s diluted EPS for the fourth quarter of 2009 would have been $0.65. A table reconciling diluted EPS for the fourth quarter, excluding the charge for the write-down of this intangible asset, to GAAP EPS is attached to this release.

Weighted-average shares outstanding for purposes of calculating diluted EPS for the fourth quarter of both fiscal years 2009 and 2008 were approximately 81.7 million.

Business Segment Results

As previously announced, URS changed the names of its three financial reporting segments in the fourth quarter of fiscal 2009. The new segment names are: Infrastructure and Environment (formerly the URS Division); Federal Services (formerly the EG&G Division); and Energy and Construction (formerly the Washington Division). The business operations within each segment have not changed. The Infrastructure and Environment segment includes program management, planning, design and engineering, construction management, and operating and maintenance services in the federal, infrastructure, and industrial and commercial markets. The Federal Services segment primarily includes program management, planning, systems engineering and technical assistance, construction and construction management, operations and maintenance, and decommissioning and closure services to the U.S. Departments of Defense, State, Homeland Security and Treasury, NASA, and other federal agencies. The Energy and Construction segment includes program management, planning, design, engineering, construction and construction management, operations and maintenance, and decommissioning and closure services to clients in the power, infrastructure, industrial and commercial, and federal markets. Revenues and operating income by segment for the fiscal year and fourth quarter of 2009 are as follows:

Infrastructure and Environment. For fiscal 2009, the Infrastructure and Environment segment reported revenues of $3.2 billion and operating income of $255.7 million, compared to revenues of $3.4 billion and operating income of $242.7 million for fiscal 2008.

For the fourth quarter of fiscal 2009, the Infrastructure and Environment segment reported revenues of $733.7 million and operating income of $66.0 million, compared to revenues of $849.1 million and operating income of $58.6 million for the fourth quarter of 2008.

Federal Services. For fiscal 2009, the Federal Services segment reported revenues of $2.6 billion and operating income of $143.2 million, compared to revenues of $2.4 billion and operating income of $130.1 million for fiscal 2008.

For the fourth quarter of fiscal 2009, the Federal Services segment reported revenues of $620.7 million and operating income of $29.9 million, including a $3.8 million impairment charge related to the "Washington” trade name, compared to revenues of $683.5 million and operating income of $29.1 million for the corresponding period in 2008.

Energy and Construction. For fiscal 2009, the Energy and Construction segment reported revenues of $3.6 billion and operating income of $145.9 million, including a $29.0 million charge related to the impairment of the "Washington” trade name, compared to revenues of $4.3 billion and operating income of $211.0 million for fiscal 2008.

For the fourth quarter of fiscal 2009, the Energy and Construction segment reported revenues of $773.4 million and operating loss of $1.2 million, including a $29.0 million charge related to the impairment of the "Washington” trade name, compared to revenues of $1.2 billion and operating income of $45.5 million for the corresponding period in 2008.

Fiscal 2010 Outlook

URS expects its fiscal 2010 revenues to be between $9.4 billion and $9.7 billion. The Company expects that GAAP EPS will be in the range of $3.35 to $3.45 for fiscal 2010. The Company’s fully diluted weighted-average shares outstanding for 2010 are expected to be approximately 81.5 million.

Webcast Information

URS will host a dial-in conference call on Wednesday, March 3, 2010 at 11:00 a.m. (EST), to discuss its fourth quarter and year-end fiscal 2009 results. A live webcast of this call will be available on the investor relations portion of URS’ website at www.urscorp.com.

URS Corporation (NYSE: URS) is a leading provider of engineering, construction and technical services for public agencies and private sector companies around the world. The Company offers a full range of program management; planning, design and engineering; systems engineering and technical assistance; construction and construction management; operations and maintenance; and decommissioning and closure services. URS provides services for power, infrastructure, industrial and commercial, and federal projects and programs. Headquartered in San Francisco, URS Corporation has approximately 45,000 employees in a network of offices in more than 30 countries (www.urscorp.com).

TABLES TO FOLLOW

Statements contained in this earnings release that are not historical facts may constitute forward-looking statements, including statements relating to future revenues, future net income and earnings per share, future backlog and book of business, future outstanding shares and other future business, economic and industry conditions. We believe that our expectations are reasonable and are based on reasonable assumptions; however, we caution you against relying on any of our forward-looking statements as such forward-looking statements by their nature involve risks and uncertainties. A variety of factors, including but not limited to the following, could cause our business and financial results, as well as the timing of events, to differ materially from those expressed or implied in our forward-looking statements: economic weakness and declines in client spending; changes in our book of business; our compliance with government contract procurement regulations; employee, agent or partner misconduct; our ability to procure government contracts; our reliance on government appropriations; unilateral termination provisions in government contracts; our ability to make accurate estimates and assumptions; our accounting policies; workforce utilization; our and our partners’ ability to bid on, win, perform and renew contracts and projects; our dependence on partners, subcontractors and suppliers; customer payment defaults; our ability to recover on claims; availability of bonding and insurance; impact of contract types on earnings; the inherent dangers at our project sites; impairment of our goodwill; environmental liabilities; liabilities for pending and future litigation; the impact of changes in laws and regulations; indemnifications; a decline in defense or federal spending; industry competition; our ability to attract and retain key individuals; retirement plan obligations; integration of acquisitions; impact of recent liquidity constraints upon us or upon our clients; our leveraged position and the ability to service our debt; restrictive covenants in our credit agreement; risks associated with international operations; business activities in high security risk countries; third-party software risks; terrorist and natural disaster risks; our relationships with labor unions; our ability to protect our intellectual property rights; anti-takeover risks and other factors discussed more fully in our Form 10-K for the period ended January 1, 2010 as well as in other reports subsequently filed from time to time with the United States Securities and Exchange Commission. The forward-looking statements represent our current intentions as of the date on which it was made and we assume no obligation to revise or update any forward-looking statements.

Diluted EPS excluding the impact of the sale of our equity investment in MIBRAG and the write-down of an intangible asset related to the discontinuation of the "Washington” trade name is not computed in accordance with generally accepted accounting principles ("GAAP”). We presented these amounts to demonstrate the impact of these transactions. These non-GAAP measures may be useful to investors seeking to compare the actual or expected performance of our ongoing business with the actual performance of our business in prior periods. Diluted EPS excluding the impact of the sale of our equity investment in MIBRAG and the write-down of an intangible asset related to the discontinuation of the "Washington” trade name should not be used as a substitute for diluted EPS prepared in conformity with GAAP, or as a GAAP measure of profitability or cash flow.

Below is the reconciliation of diluted EPS, before the impact of the sale of our equity investment in MIBRAG and the write-down of an intangible asset related to the discontinuation of the "Washington” trade name, to GAAP diluted EPS for the year ended January 1, 2010. The impact of the sale of our equity investment in MIBRAG includes the loss on settlement of our foreign currency forward contract of $27.7 million before tax for the year ended January 1, 2010. This foreign currency forward contract was used primarily as a hedge against our net investment in MIBRAG.