Washington Group International Inc
Washington Group International — Credit Suisse Engineering and Environmental Services Conference 2007
29 slides from Washington Group International's conference presentation, Jun 7, 2007
Slide 1: Credit Suisse Engineering and Environmental Services Conference June 7, 2007
Credit Suisse Engineering and Environmental Services Conference June 7, 2007
Slide 2: Forward Looking Statement
Forward Looking Statement Statements contained in this presentation that are not historical facts may constitute forward-looking statements, including statements relating to the timing of and the satisfaction of conditions to the merger, whether any of the anticipated benefits of the merger will be
Slide 3: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed transaction, URS and Washington Group will be filing documents with the Securities and Exchange Commission (the "SEC"), including the filing by URS of a registration statement on Form S-4, and URS and Washington Group intend
Slide 4: URS Company Overview
URS Company Overview Successful growth strategy #1 engineering & design services firm in U.S. and worldwide* Tier 1 Federal contractor Two operating divisions Approximately 29,500 professionals in more than 20 countries * Source: ENR Magazine, April 2007, The Top 500 Design Firms, and ENR Magazine,
Slide 5: Key Investment Highlights
Key Investment Highlights Attractive Operating Risk Profile Deliver professional services Flexible cost structure Diversified markets, services, clients, and geographies Positioned for Future Growth Acquisition strategy has created a critical mass All client sectors poised for long-term growth, driv
Slide 6: A Successful Track Record of Integrating Acquisitions
A Successful Track Record of Integrating Acquisitions 1990 0.1 1996 0.3 1997 0.4 1998 0.8 1999 1.4 2000 2.2 2001 2.3 2002 2.4 2003 3.2 2004 3.4 2005 3.9 2006 4.2 2007 4.65 3.9 Based on combined 2007 revenues as if the transaction closed on 1/1/07; $3.9Bn and $4.65Bn of revenues for Washington Group
Slide 7: Diversified Revenue Base
Diversified Revenue Base State & Local Government International Private Industry Federal - EG&G Federal - URS 22% 10% 31% 10% 27% Q1'07 Revenues 41%
Slide 8: Diversified Market Portfolio
Diversified Market Portfolio URS EG&G FY06 revenues: $2,805 MM #1 engineering design services firm in U.S. and worldwide* FY06 revenues: $1,451 MM Tier 1 federal contractor for support services Tran 35 13 6 27 Homeland Security 7 Defense Systems 74 Installations & Logistics 19 Water 9 Defense System
Slide 9: Federal Sector: Business Overview
Federal Sector: Business Overview Serve over 25 federal agencies 85% DoD and Homeland Security Key Markets Defense systems Homeland security Installations and Logistics Environmental Facilities Toole Chemical Agent Disposal Facility Sandra Day O'Connor US Courthouse
Slide 10: Federal Sector: Long Term Growth Drivers
Federal Sector: Long Term Growth Drivers Increasing DoD and DHS budgets; continued outsourcing trend Significant growth in O&M spending and military construction; O&M spending forecast to increase to over $235 Bn in FY08 High operational tempo impact on platforms FY07 $70 Bn Bridge funding plus $95.
Slide 11: Federal Sector: Projects
Federal Sector: Projects Contract Field Teams (CFT) - U.S. Air Force/ U.S. Army DOD contractor providing maintenance and repair services to military ground and aviation systems worldwide Undergraduate Flight Training (UFT)- U.S. Air Force Aircraft flight training for pilot trainees including academi
Slide 12: State and Local Sector: Business Overview
Los Angeles Central Library Key markets Transportation Facilities Water/Wastewater Competitive advantages Presence in all 50 states Long term relationships Long term growth drivers Strength of state budgets Growing demand to rebuild and upgrade aging infrastructure Bond measures SAFETEA-LU funding P
Slide 13: State/Local Sector: Projects
Sacramento-San Joaquin Delta Project management, geotechnical, civil and environmental design, and construction inspection of California's eroding levee system Homeland Security Vulnerability assessments, exercises supported by state and local grant programs EG&G expertise, URS office network I-80 E
Slide 14: Private Sector: Business Overview
Strong recurring revenue base Growing importance of Master Service Agreements (MSAs) Approximately 2,300 clients, including more than half of Fortune 500 Broad range of services Environmental engineering and compliance support Process engineering Facilities design Long term growth drivers Economic g
Slide 15: Private Sector: Projects
Private Sector: Projects Tennessee Valley Authority $1.5 Bn multi-year flue gas desulphurization (FGD) scrubber program A 60/40 JV with Mitsubishi Heavy Industries; JV controlled by URS BP Environmental Program Providing investigation, environmental consulting and remediation services Two multi-year
Slide 16: Financial Review
Financial Review
Slide 17: Balance Sheet
Balance Sheet ($ in millions)
Slide 18: Income Statement
Income Statement ($ in millions, except per share data)
Slide 19: Cash Flow Statement
Cash Flow Statement ($ in millions)
Slide 20: Growing Book of Business
Growing Book of Business ($ in millions) Backlog Designations IDCs Option Years FY 2003 3662 1150 2893 1358 FY 2004 3823 1333 3550 1367 FY 2005 3838 1476 5065 1092 FY 2006 4637 1581 5178 1010 Q1'07 5018 1969 5004 1159 Backlog Designations IDCs Option Years $12,406 $9,063 $10,073 ($ MM) $11,471 $13,1
Slide 21: Washington Group Acquisition: Strategic Rationale
Washington Group Acquisition: Strategic Rationale Leadership Positions in Key Growth Markets Infrastructure and Power DoE and DoD Industry Leading Global Scale Combined revenues of $8.6 Bn and 54,500 employees, projects in over 50 countries Broader Service Capabilities From Front-End Engineering to
Slide 22: Transaction Overview
Transaction Overview Per Share Consideration $43.80 in cash and 0.772 share of URS stock Valued at $80.00 per Washington Group share based on URS closing price on 5/25/07 of $46.89 Implied consideration mix of 55% cash / 45% stock Post transaction, Washington Group stockholders will own approximatel
Slide 23: Who is Washington Group International?
Who is Washington Group International? Integrated engineering, construction and management services company Well positioned in key growth markets Power (Fossil and Nuclear) Infrastructure #1 DOE environmental management firm Strong Positions in Defense, Industrial/Process, and Mining 2006 Revenue: $
Slide 24: Washington Group's Fast Growing Global Markets
Washington Group's Fast Growing Global Markets Technical Consulting Engineering & Design Construction Facility Start-up Operations & Maintenance Shut-down & Decommission Project Development Project Management $60 Billion* Oil Sands Development $2 Trillion* Oil & Gas Development $3.6 Trillion* Water
Slide 25: Combined Company Summary
Combined Company Summary 4th largest public E&C company #1 Engineering Design Services firm #1 DOE environmental management firm Tier 1 Federal contractor Industry leading scale Leader in safety 54,500 employees Projects in over 50 countries 2007 combined revenues of $8.6 Bn
Slide 26: Capital Structure
Capital Structure Estimated debt at closing: $1.5 Bn Consideration includes 45% equity to optimize capital structure Estimated Debt/Total Cap of 37% at Closing Estimated Debt/EBITDA of 3.2x is very manageable and lower than our past acquisitions Committed to deleveraging and maintaining a strong bal
Slide 27: Financial Benefits
Financial Benefits Cash EPS expected to be Accretive in 2008 and beyond GAAP EPS neutral to accretive in 2008 and accretive in 2009 and beyond Does not include impact of potential revenue synergies Combined Backlog > $11 Bn Industry Leading EBITDA Strong Cash Flows
Slide 28: EBITDA Reconciliation
EBITDA Reconciliation Interest expense includes write-off of deferred financing fees of $5.1 MM for Washington Group In addition to the financial measures prepared in accordance with GAAP, we use the non-GAAP financial measure "EBITDA." EBITDA is defined as net earnings (loss) before interest, taxes
Slide 29: Corporate Headquarters
Corporate Headquarters 600 Montgomery Street, 26th Floor San Francisco, CA 94111 [email protected]