URS Corp /New/
URS Corp /New/ — Washington Group International — Merger or Acquisition (September 2007)
24 slides from URS Corp /New/'s merger presentation, Sep 20, 2007
Slide 1: 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 satisfaction of conditions to our proposed merger with Washington Group International, whether any of the an
Slide 2: Additional Information and Where to Find It
Additional Information and Where to Find It · In connection with the proposed transaction, URS Corporation (“URS”) and Washington Group International (“Washington Group”) filed a preliminary joint proxy statement/prospectus, as amended, with the SEC on July 19, 2007, and URS intends to file a regist
Slide 3: URS Company Overview
URS Company Overview Successful growth strategy – #1 engineering & design services firm in U.S.* – Tier 1 Federal contractor – Two operating divisions – Approximately 30,000 professionals serving clients in more than 50 countries * Source: ENR Magazine, April 2007, The Top 500 Design Firms
Slide 4: 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-ter
Slide 5: Successful Execution of Growth Strategy
Successful Execution of Growth Strategy A Successful Track Record of Integrating Acquisitions $9.0 $8.8 (1) $8.0 PM/CM, Transit, Private Sector $4.0 $7.0 Bn) Commercial / Industrial $ $6.0 Federal O&M (Revenues, International $5.0 Expansion $4.2 $3.9 $4.0 $3.4 Transportation $3.2 $3.0 Infrastructure
Slide 6: Diversified Revenue Base
Diversified Revenue Base Q2’07 Revenues International State & Local Government 10% 22% Federal – URS 11% 41% 27% Private Industry 30% Federal – EG&G
Slide 7: Diversified Market Portfolio
Diversified Market Portfolio URS EG&G · FY06 revenues: $2,805 MM • FY06 revenues: $1,451 MM · #1 engineering design • Tier 1 federal contractor for services firm in U.S.* support services Installations and Homeland Security Water / Wastewater Logistics Industrial 10% 7% Transportation 19% Infrastruc
Slide 8: Federal Sector: Business Overview
Federal Sector: Business Overview · Serve over 25 federal agencies – 85% DoD and Homeland Security Sandra Day O’Connor US Courthouse · Key Markets – Defense systems – Homeland security – Installations and Logistics – Environmental – Facilities Toole Chemical Agent Disposal Facility
Slide 9: 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 · FY08 $483 Bn DoD baseline re
Slide 10: Federal Sector: Projects
Federal Sector: Projects • Contract Field Teams (CFT) — U.S. Air Force/ U.S. Army – DOD contractor providing maintenance and repair services to military ground and aviation systems worldwide • Undergraduate Flight Training (UFT)-U.S. Air Force – Aircraft flight training for pilot trainees including
Slide 11: State and Local Sector: Business Overview
State and Local Sector: Business Overview · Key markets – Transportation – Facilities – Water/Wastewater · Competitive advantages Baltimore/Washington International Airport – Presence in all 50 states – Long term relationships · Long term growth drivers – Strength of state budgets – Growing demand t
Slide 12: State/Local Sector: Projects
State/Local Sector: Projects • Homeland Security – Vulnerability assessments, exercises supported by state and local grant programs –EG&G expertise, URS office network · Sacramento-San Joaquin Delta – Project management, geotechnical, civil and environmental design, and construction inspection of Ca
Slide 13: Private Sector: Business Overview
Private Sector: Business Overview · Strong recurring revenue base – Growing importance of Master Service Agreements (MSAs) – Approximately 2,300 clients, including more than half of Fortune 500 · Broad range of services – Environmental engineering and compliance support – Process engineering – Facil
Slide 14: Private Sector: Projects
Private Sector: Projects • Tennessee Valley Authority –$ 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 – Tw
Slide 15: Financial Review
Financial Review
Slide 16: Balance Sheet
Balance Sheet ($ in millions) As of As of June 29, 2007 Dec. 29, 2006 Current Assets $1,422 $1,374 Property and Equipment, net 170 163 Goodwill 1,007 989 Other Assets 36 55 Total Assets $2,635 $2,581 Current Liabilities excluding current portion of long-term debt $ 751 $ 767 Total Debt 132 169 Other
Slide 17: Income Statement
Income Statement ($ in millions, except per share data) Three Months Ended June 29, 2007 June 30, 2006 Revenues $1,247 $1,070 Direct operating expenses 835 691 Gross Profit 412 379 Indirect, general and admin. expenses * 345 317 Operating Income * 67 62 Interest expense 4 6 Income before taxes 63 56
Slide 18: Growing Book of Business
Growing Book of Business ($ in millions) $13,863 14,000 $12,405 $1,136 12,000 $11,471 $1,010 $10,073 *$1,092 $5,028 10,000 $9,063 * $1,367 $5,178 MM)$1,358 8,000 $5,065 $( $3,550 $1,951 6,000 $2,893 $1,580 $1,333 $1,476 4,000 $1,150 $5,748 $3,823 $4,637 2,000 $3,662 $3,838 0 FY 2003 FY 2004FY 2005 F
Slide 19: Washington Group Acquisition: Strategic Rationale
Washington Group Acquisition: Strategic Rationale Creating a Well Diversified “Single-Source” Engineering, Construction and Management Services Company · Leadership Positions in Key Growth Markets –Infrastructure and Power –DoE and DoD · Industry Leading Global Scale – Combined revenues of $8.8 Bn (
Slide 20: Transaction Overview
Transaction Overview Per Share • $43.80 in cash and 0.772 share of URS stock Consideration • 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 appr
Slide 21: Capital Structure
Capital Structure · Estimated debt at closing: $1.4 Bn – Consideration includes 45% equity to optimize capital structure – Estimated Debt/Total Cap of 34% at Closing – Estimated Debt/EBITDA of ~3.4x is very manageable and lower than our past acquisitions · Committed to deleveraging and maintaining a
Slide 22: 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 > $11 Bn · Industry Leading EBITDA · Strong Cash Flows
Slide 23: EBITDA Reconciliation
EBITDA Reconciliation 2006 EBITDA Reconciliation Washington ($MM) URS Group Combined Net Income 113.0 80.8 Taxes 83.9 30.6 Interest Expense (1) 19.7 11.3 Depreciation and Amortization 38.0 45.0 EBITDA 254.6 167.7 422.3 In addition to the financial measures prepared in accordance with GAAP, we use th
Slide 24: Corporate Office
Corporate Office 600 Montgomery Street, 26 th Floor San Francisco, CA 94111 [email protected]
Washington Group International — Merger or Acquisition (September 2007) on 6ix