URS Corporation Announces Preliminary Results for Fiscal 2013 and Preliminary 2014 Outlook

  URS Corporation Announces Preliminary Results for Fiscal 2013 and
  Preliminary 2014 Outlook

  Company Now Expects Fiscal 2013 Earnings Per Share to be Between $3.20 and
                                    $3.30

Expects Operating Cash Flow of Approximately $600 Million in Fiscal 2013, And
                    Between $725 and $775 Million in 2014

                Accelerates Return of Capital to Stockholders

      To Host Conference Call at 8:30 AM (EST) on Thursday, February 13

Business Wire

SAN FRANCISCO -- February 12, 2014

URS Corporation (NYSE:URS) today announced preliminary financial results for
fiscal 2013 ended January 3, 2014. The Company expects fiscal 2013 revenues to
be approximately $11.0 billion. Fully diluted earnings per share are expected
to be between $3.20 and $3.30. Cash flow from Operations for 2013 is expected
to be approximately $600 million, and Cash EPS, a non-GAAP measure, is
expected to be between $4.16 and $4.26, on a fully diluted basis. A
reconciliation of Cash EPS to GAAP EPS for fiscal year 2013 is attached to
this release and available on the investor relations page of URS’ website at
www.urs.com. The 2013 fiscal year results are preliminary and are unaudited.

The Company’s backlog as of January 3, 2014 is expected to be approximately
$11.3 billion, compared to $13.3 billion on December 28, 2012, the last day of
the Company’s 2012 fiscal year. URS’ year-end fiscal 2013 book of business is
expected to be approximately $22.8 billion, compared to $24.9 billion as of
December 28, 2012.

Martin M. Koffel, Chairman and Chief Executive Officer, stated: “We are
extremely disappointed with the Company’s fourth quarter financial
performance, which fell significantly short of our expectations. Execution
issues in our new Oil & Gas Division, which were identified during a review of
the fourth quarter of 2013, led to a significant deterioration in project
earnings. We also experienced project delays caused, in part, by the residual
effects of lower than expected natural gas prices and pipeline capacity. These
issues adversely impacted Q4 operating income in Oil & Gas by approximately
$40 million.”

Koffel continued: “Notwithstanding these unanticipated operational
shortcomings, revenues for our Oil & Gas Division were $2.2 billion, in line
with our expectations, and the business is well positioned for the future. It
has a strong franchise, an outstanding customer base and relationships, and a
dedicated and talented workforce in Canada and the U.S.”

In addition, the Company’s income tax expense for the year will be
approximately $15 million higher than expected due to the performance of the
Oil & Gas Division and certain international operations. Also, the increase in
the value of the U.S. dollar relative to the Canadian dollar created
approximately $4 million of foreign currency losses on intercompany notes that
affected financial results for the fourth quarter. Finally, the results were
negatively influenced by recent events that required the Company to reduce the
carrying value of two assets by a total of $15 million. One asset is real
property the Company is holding for sale and a change in a zoning ordinance
applicable to the property reduced its marketable value. The other asset was
an exclusive technology license held by the Company. The value of this asset
was lost when the licensor filed for bankruptcy protection and thereafter
rejected the Company’s exclusive license as part of a plan of reorganization.

Organizational Changes

The Company already has taken a number of corrective actions, including more
closely aligning the Energy & Construction and the Oil & Gas Divisions.
Effective immediately, Wayne S. Shaw, President of Oil & Gas, will report to
George L. Nash, the President of the Energy & Construction Division. Both of
these divisions are construction intensive, and aligning them more closely
will promote the standardization of work practices, enhance focus on project
execution, and increase collaboration on new business pursuits. It also will
enhance the sharing of project resources, particularly the Energy &
Construction Division’s large project management skills, enabling the Company
to pursue larger and more technically complex projects.

URS also noted that W. J. (Bill) Lingard, the former President and Chief
Executive Officer of Flint Energy Services Ltd., which URS acquired in May
2012, has resigned his position as URS’ President and Chief Operating Officer,
effective February 10, 2014.

Preliminary Fiscal 2014 Outlook

Commenting on the Company’s outlook, Mr. Koffel said: “URS is well positioned
across all of our markets and we are optimistic about our long-term prospects
and our continued ability to generate substantial free cash flow. Trends in
our industrial, infrastructure and power markets for 2014 are positive. In the
federal market, we expect the impact of sequestration to continue, and we also
will have a difficult year-over-year comparison (2014 to 2013) due to the wind
down of our highly successful work on the DoD’s chemical weapons
demilitarization (Chem Demil) program. In 2014, we expect revenues from this
program to decrease by approximately $355 million and operating income to
decrease by approximately $125 million. However, due to the diversity of our
federal business, we have confidence in its future growth prospects.”

Based on its preliminary plan, URS expects that fiscal 2014 consolidated
revenues will be between $10.8 billion and $11.2 billion. The Company expects
fiscal 2014 EPS will be between $3.20 and $3.50 and Cash EPS for fiscal 2014
will be between $4.13 and $4.43, on a fully diluted basis. In addition, URS
expects that 2014 operating cash flow will be between $725 million and $775
million. Accordingly, the Company is accelerating its previously announced
plan to return a total of at least $500 million to stockholders through stock
repurchases and dividends by the end of 2015. URS now expects to spend
approximately $350 million for stock repurchases in 2014. A reconciliation of
Cash EPS to GAAP EPS for the fiscal year 2014 preliminary plan is attached to
this release and available on the investor relations page of URS’ website at
www.urs.com.

To accommodate the accelerated stock repurchase plan, the Company’s Board of
Directors approved a modification of the stock repurchase program to allow for
the repurchase of up to 12 million shares of the Company’s common stock during
the 2014 fiscal year.

Call Information

URS will host a call at 8:30 a.m. (EST) on February 13, 2014 to discuss its
preliminary fiscal 2013 results. A live webcast will be available at
http://investors.urs.com. URS will announce its full fourth quarter and fiscal
2013 results after the market close on Monday, March 3, 2014, and will hold
its usual call to discuss the full results at 5:00 p.m. (EST) that day. A live
webcast of that call also will be available 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 federal, oil and gas, infrastructure, power, and industrial
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 effects of the October 2013 federal government shutdown,
federal budget and sequestration, future weather-related delays, future
capital allocation priorities including dividend payments, share repurchases,
debt pay downs, acquisitions and organic growth opportunities, the future
impact of our goodwill restatement and the amounts we estimate will be
reflected in our restated financial statements and the periodic reports that
we expect to amend, 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 and budget issues; failure to raise the
federal debt ceiling; unusually severe weather conditions; 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 September 27, 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
 RECONCILIATION SCHEDULES OF PRELIMINARY GAAP DILUTED EPS TO PRELIMINARY CASH
                                     EPS

Preliminary cash EPS in the table below are not computed in accordance with
generally accepted accounting principles (“GAAP”). Cash EPS is useful to us,
and may be useful to investors, because it permits a comparison of the actual
or expected performance of our ongoing business. Cash EPS should not be used
as substitutes for diluted EPS in conformity with GAAP, or as a GAAP measure
of profitability.

Below are the reconciliations of preliminary Cash EPS to preliminary GAAP
diluted EPS for the year ended January 3, 2014 and for the guidance range for
fiscal year ending on January 2, 2015.

                                             
                    Fiscal Year Ended              Fiscal Year Ending on
                     January 3, 2014                 January 2, 2015
                                                     
                   Lower Range   Upper Range     Lower Range   Upper Range
                                                                  
  Preliminary cash   $ 4.16          $ 4.26          $ 4.13          $ 4.43
  EPS
  Intangible
  amortization
  expense,
  net of tax ^(1)     (0.96 )        (0.96 )        (0.93 )        (0.93 )
       Preliminary   $ 3.20         $ 3.30         $ 3.20         $ 3.50  
       diluted EPS
       

                           Amounts are net of tax effects of $0.47 and $0.46
         ^(1)   for the year ended January 3, 2014 and for the year
                           ending January 2, 2015, respectively.

Contact:

URS Corporation
Sam Ramraj, 415-774-2700
Vice President,
Investor Relations
or
Sard Verbinnen & Co
Jamie Tully/Delia Cannan
212-687-8080
 
Press spacebar to pause and continue. Press esc to stop.