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URS Corporation Reports First Quarter 2013 Results

  URS Corporation Reports First Quarter 2013 Results

                      Reaffirms Outlook for Fiscal 2013;
                         Announces Quarterly Dividend

Business Wire

SAN FRANCISCO -- May 07, 2013

URS Corporation (NYSE: URS) today reported its financial results for the first
quarter of fiscal 2013, which ended on March 29, 2013.

Revenues for the first quarter of 2013 were $2.80 billion compared to $2.36
billion recorded during the first quarter of 2012. Operating income for the
quarter was $152.6 million, compared with $161.4 million reported in the
corresponding period of the prior year. Net income was $71.9 million, compared
with net income of $79.7 million reported in the first quarter of 2012.
Diluted earnings per share (“EPS”) were $0.96, compared with EPS of $1.07
reported in the first quarter of last year.

The results for the first quarter of fiscal 2012 included an after-tax charge
of $3.4 million, or $.05 per share, related to the acquisition of Flint Energy
Services Ltd. (“Flint”). Excluding this charge, URS’ net income for the first
quarter of fiscal 2012 would have been $83.1 million and diluted EPS would
have been $1.12.

A table reconciling net income and EPS for the Company for the first quarter
of fiscal 2012, excluding the charge noted above, to generally accepted
accounting principles (“GAAP”) results is included in the Reconciliation
Schedule of GAAP to Non-GAAP Measures attached to this release and available
on the investor relations section of the Company’s website at: www.urs.com.

Commenting on the Company’s financial results, Martin M. Koffel, Chairman and
Chief Executive Officer, stated: “Overall results in the quarter were in line
with our expectations. Revenues were driven by our strategy of diversifying
across private and public market sectors, including our recent expansion in
oil and gas. We expect that operating income quarter-to-quarter will be uneven
due to the diverse size and scope of our operations and large projects, and
this is reflected in the first quarter results. Operating cash flow was
particularly robust in the quarter. We generated $50 million in operating cash
flow, which we continue to use to support organic growth and return value to
stockholders. We repurchased one million shares during the quarter and paid a
dividend of $0.20 per share. Based on our current operations, the book of
business in hand and pending proposals, we remain on track to achieve our
guidance for the year.”

The Company’s backlog was $12.8 billion at the end of the first quarter of
2013, compared to $13.3 billion as of December 28, 2012, the last day of the
Company’s 2012 fiscal year. The Company ended the quarter with a book of
business of $24.2 billion, compared to $24.9 billion at the end of fiscal
2012.

Business Segment Results

In addition to providing consolidated financial results, URS reports separate
financial information for its four segments: Infrastructure & Environment,
Federal Services, Energy & Construction, and Oil & Gas. The Infrastructure &
Environment segment includes program management, planning, design and
engineering, construction management, and operations 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, information technology services, and
decommissioning and closure services to the U.S. Departments of Defense,
State, Homeland Security and Treasury, NASA and other federal agencies. The
Energy & 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. The Oil & Gas
segment consists of the operations of Flint, which URS acquired on May 14,
2012, which includes construction, maintenance and other services across the
upstream, midstream and downstream oil and gas market.

Infrastructure & Environment. For the first quarter of 2013, the
Infrastructure & Environment segment reported revenues of $933.4 million and
operating income of $41.3 million, compared to revenues of $964.2 million and
operating income of $45.9 million for the corresponding period in 2012.

Federal Services. For the first quarter of 2013, the Federal Services segment
reported revenues of $678.2 million and operating income of $99.1 million,
compared to revenues of $717.1 million and an operating income of $93.0
million for the corresponding period in 2012.

Energy & Construction. For the first quarter of 2013, the Energy &
Construction segment reported revenues of $664.8 million and operating income
of $27.1 million, compared to revenues of $725.7 million and an operating
income of $48.1 million for the corresponding period in 2012.

Oil & Gas. For the first quarter of 2013, the Oil & Gas segment reported
revenues of $583.8 million and operating income of $7.8 million. URS
established the Oil & Gas segment with the acquisition of Flint on May 14,
2012.

Quarterly Dividend

On May 3, 2013, the Company declared a quarterly cash dividend of $0.21 per
common share for the second quarter of 2013. The dividend will be paid on July
5, 2013 to stockholders of record as of June 14, 2013.

Outlook for Fiscal 2013

URS continues to expect that fiscal 2013 consolidated revenues will be between
$11.8 billion and $12.2 billion. The Company also continues to expect that EPS
will be between $4.25 and $4.75, on a fully diluted basis.

Webcast Information

URS will host a dial-in conference call on Tuesday, May 7, 2013 at 5:00 p.m.
(ET) to discuss its first quarter fiscal 2013 results. A live webcast of this
call will be available on the investor relations portion of URS’ website at
http://investors.urs.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;
information technology; and decommissioning and closure services. URS provides
services for power, infrastructure, industrial, oil and gas, and federal
projects and programs. Headquartered in San Francisco, URS Corporation has
more than 50,000 employees in a network of offices in nearly 50 countries
(www.urs.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, net income and earnings per share, future backlog and book of
business, future dividend payments and other future business, economic and
industry trends and conditions. We believe that our expectations are
reasonable and are based on reasonable assumptions; however, we caution
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:
declines in the economy or client spending; federal sequestration; changes in
our book of business; our compliance with government regulations; integration
of acquisitions; employee, agent or partner misconduct; our ability to procure
government contracts; liabilities for pending and future litigation;
environmental liabilities; changes in oil, natural gas and other commodity
prices; availability of bonding and insurance; our reliance on government
appropriations; unilateral termination provisions in government contracts;
impairment of our goodwill; 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; impact of target and fixed-priced
contracts on earnings; the inherent dangers at our project sites; the impact
of changes in laws and regulations; nuclear indemnifications and insurance;
misstatements in expert reports; a decline in defense spending; industry
competition; our ability to attract and retain key individuals; retirement
plan obligations; our leveraged position and the ability to service our debt;
restrictive covenants in finance arrangements; risks associated with
international operations; business activities in high security risk countries;
information technology risks; natural and man-made 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-Q for the period ended March 29, 2013, 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 they were made and we assume no obligation
to revise or update any forward-looking statements.


URS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS - UNAUDITED
(In millions, except per share data)
                                                    
                                               March 29, 2013   December 28,
                                                                2012
ASSETS
Current assets:
  Cash and cash equivalents                    $  248.8         $  314.5
  Accounts receivable, including retentions
  of $129.1 and $114.4,                           1,522.2          1,554.8

  respectively
  Costs and accrued earnings in excess of         1,326.7          1,384.3
  billings on contracts
  Less receivable allowances                     (67.8    )      (69.7    )
          Net accounts receivable                 2,781.1          2,869.4
  Deferred tax assets                             73.6             67.6
  Inventory                                       60.1             61.5
  Other current assets                           186.9          204.2    
                Total current assets              3,350.5          3,517.2
Investments in and advances to                    272.2            278.3
unconsolidated joint ventures
Property and equipment at cost, net               680.5            687.5
Intangible assets, net                            655.5            692.2
Goodwill                                          3,229.9          3,247.1
Other long-term assets                           435.4          364.2    
                         Total assets          $  8,624.0      $  8,786.5  
LIABILITIES AND EQUITY
Current liabilities:
  Current portion of long-term debt            $  83.0          $  71.8
  Accounts payable and subcontractors
  payable, including retentions                   680.7            803.5

  of $31.9 and $32.3, respectively
  Accrued salaries and employee benefits          535.2            558.8
  Billings in excess of costs and accrued         264.2            289.1
  earnings on contracts
  Other current liabilities                      259.5          277.8    
                Total current liabilities         1,822.6          2,001.0
Long-term debt                                    2,002.4          1,992.5
Deferred tax liabilities                          329.5            328.3
Self-insurance reserves                           133.1            129.8
Pension and post-retirement benefit               288.5            300.9
obligations
Other long-term liabilities                      291.1          271.0    
                     Total liabilities           4,867.2        5,023.5  
Commitments and contingencies
URS stockholders’ equity:
  Preferred stock, authorized 3.0 shares; no      —                —
  shares outstanding
  Common stock, par value $.01; authorized
  200.0 shares; 89.1 and

  88.9 shares issued, respectively; and 76.0      0.9              0.9
  and 76.8 shares

  outstanding, respectively
  Treasury stock, 13.1 and 12.1 shares at         (540.0   )       (494.9   )
  cost, respectively
  Additional paid-in capital                      3,021.0          3,003.9
  Accumulated other comprehensive loss            (145.6   )       (113.2   )
  Retained earnings                              1,280.3        1,224.4  
                Total URS stockholders’           3,616.6          3,621.1
                equity
Noncontrolling interests                         140.2          141.9    
                     Total stockholders’         3,756.8        3,763.0  
                     equity
                         Total liabilities
                         and stockholders’     $  8,624.0      $  8,786.5  
                         equity


URS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - UNAUDITED
(In millions, except per share data)
                                           
                                                   Three Months Ended
                                                   March 29,     March 30,
                                                   2013           2012       
                                                                  
Revenues                                           $ 2,802.5      $ 2,361.5
Cost of revenues                                     (2,651.3 )     (2,203.2 )
General and administrative expenses                  (22.7    )     (20.0    )
Acquisition-related expenses                         —              (5.6     )
Equity in income (loss) of unconsolidated joint     24.1         28.7     
ventures
                Operating income (loss)              152.6          161.4
Interest expense                                     (21.1    )     (9.8     )
Other income (expenses)                             (2.5     )    2.5      
                Income (loss) before income          129.0          154.1
                taxes
Income tax expense                                  (42.2    )    (48.6    )
                Net income (loss) including
                noncontrolling                       86.8           105.5

                interests
Noncontrolling interests in income of
                                                    (14.9    )    (25.8    )
consolidated subsidiaries
                        Net income (loss)          $ 71.9        $ 79.7     
                        attributable to URS
                                                                    
                                                                    
Earnings per share:
        Basic                                      $ 0.97        $ 1.08     
        Diluted                                    $ 0.96        $ 1.07     
Weighted-average shares outstanding:
        Basic                                       74.4         74.0     
        Diluted                                     74.9         74.3     
                                                                    
Cash dividends declared per share                  $ 0.21        $ 0.20     


URS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - UNAUDITED
(In millions)
                                              
                                                       Three Months Ended
                                                       March 29,   March 30,
                                                       2013         2012     
Cash flows from operating activities:
  Net income (loss) including noncontrolling           $ 86.8      $ 105.5  
  interests
  Adjustments to reconcile net income (loss) to net
  cash from operating activities:
        Depreciation and amortization                    39.9         20.0
        Amortization of intangible assets                27.6         17.2
        Amortization of debt issuance costs and          0.1          0.8
        discount/premium
        Foreign currency (gains) losses related to
        foreign currency derivatives and                 2.5          (2.5   )

        intercompany loans
        Normal profit                                    (0.6   )     1.4
        Provision for doubtful accounts                  1.1          1.4
        Loss (gain) on disposal of property and          (1.0   )     —
        equipment
        Deferred income taxes                            (6.9   )     2.1
        Stock-based compensation                         11.0         11.3
        Excess tax benefits from stock-based             —            (0.4   )
        compensation
        Equity in income of unconsolidated joint         (24.1  )     (28.7  )
        ventures
        Dividends received from unconsolidated joint     23.1         18.6
        ventures
  Changes in operating assets, liabilities and
  other, net of effects of business

  acquisitions:
        Accounts receivable and costs and accrued
        earnings in excess of billings on                88.8         (68.8  )

        contracts
        Inventory                                        1.4          (0.5   )
        Other current assets                             3.0          (5.4   )
        Advances to unconsolidated joint ventures        —            (5.7   )
        Accounts payable, accrued salaries and
        employee benefits, and other current             (129.9 )     (20.1  )

        liabilities
        Billings in excess of costs and accrued          (12.5  )     (65.5  )
        earnings on contracts
        Other long-term liabilities                      35.2         (4.1   )
        Other long-term assets                          (95.8  )    2.7    
                    Total adjustments and changes       (37.1  )    (126.2 )
                                    Net cash from
                                    operating           49.7       (20.7  )
                                    activities
Cash flows from investing activities:
  Proceeds from disposal of property and equipment       3.4          9.5
  Investments in unconsolidated joint ventures           (0.1   )     (4.0   )
  Changes in restricted cash                             1.9          1.7
  Capital expenditures, less equipment purchased
  through capital leases and                            (25.0  )    (17.8  )

  equipment notes
                                    Net cash from
                                    investing           (19.8  )    (10.6  )
                                    activities


URS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS – UNAUDITED (continued)
(In millions)
                                             
                                                      Three Months Ended
                                                      March 29,   March 30,
                                                      2013         2012      
Cash flows from financing activities:
  Borrowings from long-term debt                        —            998.9
  Payments on long-term debt                            (1.2   )     (1.6    )
  Borrowings from revolving line of credit              255.0        50.0
  Payments on revolving line of credit                  (234.5 )     (73.6   )
  Net payments under foreign lines of credit and        (2.3   )     (8.9    )
  short-term notes
  Net change in overdrafts                              (31.4  )     0.6
  Payments on capital lease obligations                 (4.5   )     (2.6    )
  Payments of debt issuance costs                       —            (8.7    )
  Excess tax benefits from stock-based compensation     —            0.4
  Proceeds from employee stock purchases and            6.3          1.0
  exercises of stock options
  Distributions to noncontrolling interests             (15.7  )     (15.5   )
  Contributions and advances from noncontrolling        0.8          0.5
  interests
  Dividends paid                                        (14.9  )     —
  Repurchases of common stock                          (45.1  )    (40.0   )
                                     Net cash from
                                     financing         (87.5  )    900.5   
                                     activities
Net change in cash and cash equivalents                 (57.6  )     869.2
Effect of foreign exchange rate changes on cash and     (8.1   )     4.3
cash equivalents
Cash and cash equivalents at beginning of period       314.5      436.0   
Cash and cash equivalents at end of period            $ 248.8     $ 1,309.5 
                                                                     
Supplemental information:
  Interest paid                                       $ 6.3       $ 7.3     
  Taxes paid                                          $ 10.2      $ 8.8     
                                                                     
Supplemental schedule of non-cash investing and
financing activities:
  Equipment acquired with capital lease obligations
  and equipment note                                  $ 17.8      $ 3.9     

  obligations
  Cash dividends declared but not paid                $ 16.0      $ 15.2    
                                                                             

                       URS CORPORATION AND SUBSIDIARIES
             RECONCILIATION SCHEDULE OF GAAP TO NON-GAAP MEASURES

Net income and diluted EPS, excluding the impact of acquisition-related
expenses in the table below is not computed in accordance with generally
accepted accounting principles (“GAAP”). We present these amounts to
demonstrate their impact. These non-GAAP measures are useful to us, and may be
useful to investors, because they permit a comparison of the actual or
expected performance of our ongoing business with the actual performance of
our business in prior periods. Net income and diluted EPS excluding the impact
of acquisition-related expenses should not be used as a substitute for net
income and diluted EPS prepared in conformity with GAAP, or as a GAAP measure
of profitability or cash flows.

Below is the reconciliation of net income and diluted EPS, before the impact
of acquisition-related expenses, to GAAP net income and diluted EPS for the
three months ended March 30, 2012.

                                        
                                             Three Months Ended March 30, 2012
  (In millions, except per share data)       Net Income         Diluted EPS
  Before the impact of acquisition-related   $    83.1           $   1.12
  expenses
  Acquisition-related expenses, net of tax       (3.4    )         (.05   )
                Net income and diluted EPS   $    79.7          $   1.07   
                                                                            


URS CORPORATION AND SUBSIDIARIES
BOOK OF BUSINESS
                                                                 
               Infrastructure   Federal     Energy &
(In            &                                           Oil & Gas   Total
millions)                       Services    Construction
               Environment
As of March
29, 2013
Backlog        $    3,173.0     $ 3,067.5   $   5,878.0    $ 679.4     $ 12,797.9
Option years        178.7         2,665.8       2,019.1      —           4,863.6
Indefinite
delivery           2,375.9      3,232.3      236.0       655.5      6,499.7
contracts
    Total
  book of    $    5,727.6     $ 8,965.6   $   8,133.1    $ 1,334.9   $ 24,161.2
    business
                                                                         
As of
December 28,
2012
Backlog        $    3,028.4     $ 3,476.9   $   5,947.1    $ 823.8     $ 13,276.2
Option years        197.3         2,728.1       2,056.8      —           4,982.2
Indefinite
delivery           2,572.4      3,238.7      236.0       611.7      6,658.8
contracts
    Total
    book of    $    5,798.1     $ 9,443.7   $   8,239.9    $ 1,435.5   $ 24,917.2
    business


                     March 29,   December 28,
  (In millions)               2013         2012
  Backlog by market sector:
        Federal               $ 5,966.5    $  6,546.5
        Infrastructure          2,983.9       2,957.6
        Oil & Gas               1,453.6       1,461.3
        Power                   1,417.4       1,416.1
        Industrial             976.5        894.7
              Total backlog   $ 12,797.9   $  13,276.2


URS CORPORATION AND SUBSIDIARIES
REVENUES AND OPERATING INCOME (LOSS) BY DIVISION
                                
                                     Three Months Ended
(In millions)                        March 29,    March 30,
                                     2013          2012      
Revenues
Infrastructure & Environment         $ 933.4       $ 964.2
Federal Services                       678.2         717.1
Energy & Construction                  664.8         725.7
Oil & Gas ^ (1)                        583.8         —
Inter-segment eliminations            (57.7   )    (45.5   )
     Total revenues                  $ 2,802.5    $ 2,361.5 
Operating income (loss)
Infrastructure & Environment         $ 41.3        $ 45.9
Federal Services                       99.1          93.0
Energy & Construction                  27.1          48.1
Oil & Gas ^ (1)                        7.8           —
Corporate                             (22.7   )    (25.6   )
     Total operating income (loss)   $ 152.6      $ 161.4   

(1) The operating results of Flint were included in the three months ended
March 29, 2013, but not in the corresponding period ended March 30, 2012, as
we completed the acquisition in May 2012.


URS CORPORATION AND SUBSIDIARIES
REVENUE BREAKDOWN BY DIVISION AND MARKET SECTOR

Amounts shown in the table below are net of eliminations.
                                                                          
(In millions)     Federal     Infrastructure   Oil and   Power     Industrial   Total
                                               Gas
Three months
ended March 29,
2013
 Infrastructure  $ 163.6     $     383.0      $ 141.2   $ 45.1    $   172.4    $ 905.3
  & Environment
  Federal           677.9           —            —         —           —          677.9
  Services
  Energy &          226.9           53.2         89.2      167.8       109.5      646.6
  Construction
  Oil & Gas ^      —              —           572.7    —          —         572.7
  (1)
      Total      $ 1,068.4   $     436.2      $ 803.1   $ 212.9   $   281.9    $ 2,802.5
       
Three months
ended March 30,
2012
  Infrastructure  $ 179.3     $     384.3      $ 124.7   $ 55.4    $   183.5    $ 927.2
  & Environment
  Federal           717.0           —            —         —           —          717.0
  Services
  Energy &          277.0           53.7         38.5      236.6       111.5      717.3
  Construction
  Oil & Gas ^      —              —           —        —          —         —
  (1)
       Total      $ 1,173.3   $     438.0      $ 163.2   $ 292.0   $   295.0    $ 2,361.5

(1) The operating results of Flint were included in the three months ended
March 29, 2013, but not in the corresponding period ended March 30, 2012, as
we completed the acquisition in May 2012.

Contact:

URS Corporation
Sam Ramraj
Vice President,
Investor Relations
(415) 774-2700
or
Sard Verbinnen & Co
Jamie Tully/Delia Cannan
(212) 687-8080